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                                                                    EXHIBIT 10.1

                   NON-QUALIFIED STOCK OPTION AWARD AGREEMENT
              UNDER THE KIRKLAND'S, INC. 2002 EQUITY INCENTIVE PLAN

                    [USED FOR AUTOMATIC GRANTS TO DIRECTORS]

            KIRKLAND'S, INC. (the "Company") has, on __________, 200_, granted
to _________ _________________ (the "Optionee") the option to purchase the
number of shares of Common Stock set forth below in Section 3 at the price set
forth below in Section 4 (the "Option"). The Option is subject to the terms set
forth herein, and in all respects is subject to the terms and provisions of the
Kirkland's, Inc. 2002 Equity Incentive Plan (as amended, the "Plan"), which
terms and provisions are incorporated herein by this reference. Unless the
context herein requires otherwise, the terms defined in the Plan will have the
same meanings when used in this Award Agreement.

            1. NATURE OF THE OPTION. The Option is intended to be a
Non-Qualified Stock Option for federal income tax purposes and is not intended
to be an Incentive Stock Option described by Section 422 of the Code.

            2. DATE OF GRANT; TERM OF OPTION. The Option was granted on
__________, 200_ (the "Grant Date"). The Option may not be exercised later than
the tenth anniversary of the Grant Date and is subject to earlier termination,
as provided in the Plan and in Section 7 of this Award Agreement.

            3. COMMON STOCK SUBJECT TO OPTION. The Option applies with respect
to ______ shares of the Common Stock, subject to adjustment in accordance with
the Plan.

            4. OPTION EXERCISE PRICE. The cost to purchase each share of Common
Stock subject to the Option (each "Option Share") is $_______, subject to
adjustment in accordance with the Plan.

            5. EXERCISE OF OPTION. The Option will be exercisable during its
term only in accordance with the terms and provisions of the Plan and this Award
Agreement, as follows:

                  a. RIGHT TO EXERCISE. The Option is fully vested and
exercisable as of the Grant Date.

                  b. METHOD OF EXERCISE. The Optionee may exercise the Option by
providing written notice to the Secretary of the Company or such other person as
may be designated by the Company. Such written notice must be signed by the
Optionee and delivered in person or by certified mail. The written notice must
be accompanied by payment of the exercise price in the form of cash, certified
check or such other method of payment as may be authorized by the Board pursuant
to the Plan.

                  c. PARTIAL EXERCISE. The Option may be exercised in whole or
in part; provided, however, that any exercise may apply only with respect to a
whole number of Option Shares.

                  d. RESTRICTIONS ON EXERCISE. The Option may not be exercised
if the issuance of the Option Shares would constitute a violation of any
applicable federal or state securities laws or other laws or regulations. As a
condition to the exercise of the Option, the Company may require the Optionee to
make any representation and warranty to the Company as may be required by the
Plan, or as may be required by or advisable under any applicable law or
regulation.

            6. CERTIFICATES. The Optionee will have no right to vote or receive
dividends and will have no other rights as a stockholder with respect to any
Option Shares, notwithstanding the exercise of the Option with respect to those
Option Shares, until the issuance (as evidenced by the appropriate

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entry on the books of the Company or of a duly authorized transfer agent of the
Company) of the stock certificate(s) evidencing those Option Shares. Any
certificate evidencing Option Shares will contain such legends as may be
required by the Plan, or as may be required by or advisable under any applicable
law or regulation.

            7. TERMINATION OF RELATIONSHIP WITH THE COMPANY. If the Optionee's
service to the Company ceases for any reason other than death, Disability or
removal for Cause, the Option will terminate 90 days following such cessation.
If the Optionee's service to the Company ceases due to removal for Cause, the
Option will terminate immediately and automatically. If the Optionee's service
to the Company ceases due to the death or Disability of the Optionee, the Option
will terminate one year following such cessation. In the case of death, the
Option may be exercised by the Optionee's estate or by a person who acquired the
right to exercise the Option by bequest or inheritance. In the case of
Disability, the Option may be exercised by the Optionee or his legal guardian or
representative. To the extent that the Option is not exercised within the time
specified herein, the Option will terminate. Notwithstanding the foregoing, the
Option will not be exercisable after the expiration of the term set forth above
in Section 2.

            8. NONTRANSFERABILITY OF OPTION. The Option may not be sold,
pledged, assigned, hypothecated, gifted, transferred or disposed of in any
manner, either voluntarily or involuntarily by operation of law, other than by
will or by the laws of descent or distribution. During the lifetime of the
Optionee, the Option may be exercised only by the Optionee. Subject to the
foregoing and the terms of the Plan, the terms of the Option will be binding
upon the executors, administrators, heirs and successors of the Optionee.

            9. THE PLAN. The Optionee has received a copy of the Plan (a copy of
which is attached hereto), has read the Plan and is familiar with its terms, and
hereby accepts the Option subject to all of the terms and provisions of the
Plan, as amended from time to time. Pursuant to the Plan, the Board of Directors
and any duly authorized Committee thereof are authorized to interpret the Plan
and to adopt rules and regulations not inconsistent with the Plan as they deem
appropriate. The Optionee hereby agrees to accept as binding, conclusive and
final all decisions or interpretations of the Board of Directors and any duly
authorized Committee thereof upon any questions arising under the Plan.

            10. MARKET STAND-OFF. The Optionee agrees that, in connection with
any public offering by the Company of its equity securities pursuant to a
registration statement filed under the Exchange Act, he or she will not sell,
make any short sale of, loan, hypothecate, pledge, grant any option for the
purchase of or otherwise dispose of any Option Shares without the prior written
consent of the Company or its underwriters, for such period of time before or
after the effective date of such registration as may be requested by the Company
or such underwriters, provided that all similarly situated stockholders are
subject to a similar lock-up restriction.

            11. ENTIRE AGREEMENT. This Award Agreement, together with the Plan
and the other exhibits attached thereto or hereto, represents the entire
agreement between the parties.

            12. GOVERNING LAW. This Award Agreement will be construed in
accordance with the laws of the State of Tennessee, without regard to the
application of the principles of conflicts of laws.

            13. SURVIVAL. Sections 6 and 9 through 13 of this Award Agreement
will survive the exercise of the Option.

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            IN WITNESS WHEREOF, this Award Agreement has been executed by the
parties as of the       day of              , 20  .

                                             COMPANY

                                     By: Kirkland's, Inc.
                                         _______________________________________


                                     Title:

                                             OPTIONEE

                                             ___________________________________


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