Exhibit 10.1


 


FRANCESCA’S SERVICES CORPORATION


 


September 16, 2016


 


Re: Employment Letter Agreement


 


Dear Steve:


 


Subject to the terms and
conditions of this letter agreement (this “Agreement”), Francesca’s Services Corporation, a Delaware corporation
(“FSC”), Francesca’s Holdings Corporation, a Delaware corporation (“Parent”), and Francesca’s
Collections, Inc., a Texas corporation (“FCI” and, collectively with FSC and Parent, the “Company”)
desires to employ you on the terms and conditions of this Agreement. This Agreement is subject to the Company completing a satisfactory
background check and shall be effective as of the Effective Date.


 


1.  Employment; Compensation and Benefits.


 


(a)  Position and
Duties. You shall serve as the Company’s President and Chief Executive Officer. During your Period of Employment (as
defined below) with the Company, you agree to (i) devote substantially all of your business time, energy and skill to the
performance of your duties for the Company, (ii) perform such duties in a faithful, effective and efficient manner and (iii) hold
no other employment.


 


(b)  Period
of Employment. Your start date will be October 10, 2016 (the “Effective Date”). Your “Period of
Employment” begins on the Effective Date and is for an indefinite term, until terminated as provided in Section 2(a).


 


(c)  Base Salary.
Your base salary (the “Base Salary”) shall be at an annualized rate of Seven Hundred Seventy-Five Thousand Dollars
($775,000.00) and shall be paid in accordance with the Company’s regular payroll practices in effect from time to time.


 


(d)  Annual Bonus.
You may be eligible for an annual incentive bonus based on the Company’s annual bonus plan that may exist from time to time.
Your target annual incentive bonus amount for a particular fiscal year of the Company during the Period of Employment shall equal
One Hundred Percent (100%) of your Base Salary for that fiscal year. With respect to the fiscal year in which the Effective Date
occurs, you will be eligible for a bonus for such fiscal year, pro-rated to reflect the number of calendar days of your employment
with the Company from the Effective Date through the end of the fiscal year and the Company’s performance for such period
as determined by the Compensation Committee of the Parent’s Board of Directors (the “Compensation Committee”)
relative to performance goals previously established by the Compensation Committee for fiscal 2016 bonuses for the Company’s
other senior executives.


 


(e)  Signing Bonus.
In connection with your execution of this Agreement, you will be entitled to payment of a signing bonus of Three Hundred Thousand
Dollars ($300,000) (the “Signing Bonus”). The Signing Bonus will be paid to you within ten (10) business days
after the Effective Date. If, at any time prior to the first anniversary of the Effective Date, either you voluntarily terminate
your employment with the Company or the Company terminates your employment for Cause (as defined below), you agree that you will
promptly (and in all cases within thirty (30) days following your termination of employment) repay to the Company the gross (pre-tax)
amount of the Signing Bonus.


 




     


     


    

 


(f)  Make-Whole Bonus.
You will also be entitled to receive a payment from the Company (the “Make-Whole Bonus”) to compensate you for
the bonus opportunity granted to you by your prior employer (the “Prior Employer”) with respect to the Prior
Employer’s 2016 fiscal year (the “Prior Employer Bonus”) that you actually forfeited as a result of your
accepting and commencing employment with the Company. The amount of such payment (if any) will be determined as set forth in Exhibit
A attached herewith and incorporated herein for all purposes; subject to the final approval of the Compensation Committee The Compensation Committee shall
confirm the amount of the Make-Whole Bonus as soon as practicable after the end of the Prior Employer’s 2016 fiscal year
and the Make-Whole Bonus shall be paid to you within ten (10) business days after the Compensation Committee’s determination;
provided, however, that your right to receive any Make-Whole Bonus is subject to your continued employment with the Company through
the date the Make-Whole Bonus is paid.


 


(g)  Retirement, Welfare
and Fringe Benefits. During the Period of Employment you shall be entitled to participate in all employee savings and welfare
benefit plans and programs, and fringe benefit plans and programs, made available by the Company to the Company’s employees
generally, in accordance with the eligibility and participation provisions of such plans and as such plans or programs may be in
effect from time to time. You will be eligible for twenty (20) days of paid-time-off each year in accordance with the Company’s
policies.


 


(h)  RSA Grants.
In connection with your actual commencement of employment with the Company as of the Effective Date, you will be granted the following
awards of performance shares of Parent’s common stock in accordance with the Francesca’s Holdings Corporation 2015
Equity Incentive Plan (the “Plan”):


 


		(i)	An award on the same terms and conditions as the annual awards of performance shares granted to
the Company’s other executive officers in March 2016 for the Company’s 2016 fiscal year (including the performance
metrics, goals and weightings applicable to such awards), with the target number of shares subject to such award to be determined
by dividing (A) the product obtained by multiplying (x) One Million Five Hundred Thousand Dollars ($1,500,000), by (y) a fraction,
the numerator of which is the number of calendar days between the Effective Date and the last day of the Company’s 2016 fiscal
year and the denominator of which is three hundred sixty-five (365), by (B) the closing price of a share of Parent’s common
stock on The Nasdaq Stock Market on the last trading day prior to the Effective Date.



 


		(ii)	An award of a number of performance shares determined by dividing (A) One Million Five Hundred
Thousand Dollars ($1,500,000), by (B) the closing price of a share of Parent’s common stock on The Nasdaq Stock Market on
the last trading day prior to the Effective Date, such award to vest (x) with respect to one-third (1/3rd) of the shares
on the last day of the Company’s 2017 fiscal year if both your employment with the Company continues through the first anniversary
of the Effective Date and the Company’s earnings per share for the 2017 fiscal year is greater than $0.75, and (y) with respect
to the remaining two-thirds (2/3rd) of the shares on the last day of the Company’s 2019 fiscal year if both your
employment with the Company continues through the third anniversary of the Effective Date and the Company’s earnings per
share for the 2019 fiscal year is greater than $0.75.



 




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Each of these grants will
be evidenced by a Restricted Stock Award Agreement to be effective as of the Effective Date, be subject to the approval of the
Compensation Committee, and in accordance with the terms and conditions of the Plan.


 


(i)  Future Long-Term
Incentive Grants. During the Period of Employment, you shall be eligible to be granted an award under the Company’s long-term
incentive program for the Company’s fiscal year that begins in February 2017 and each fiscal year thereafter. The grant level
and terms for each such grant shall be established by the Compensation Committee in its sole discretion. It is expected that the
grant date fair value (as determined by the Company based on its usual equity award valuation methodology and assumptions) of the
target number of shares subject to the award or awards that you are granted in each year will have a value, in the aggregate, of
not less than One Million Five Hundred Thousand Dollars ($1,500,000).


 


2.  Termination and Severance.


 


(a)  Termination.
Your employment by the Company may be terminated by the Company: (i) immediately upon notice, with Cause (as defined below),
or (ii) with no less than thirty (30) days’ advance written notice to you, without Cause, or (iii) immediately
in the event of your Disability (as defined below) or your death. In the event that you are provided with notice of termination
without Cause pursuant to clause (ii) above, the Company will have the option to place you on administrative leave during
the notice period. You may terminate your employment by the Company: (x) with Good Reason (as defined below) with no less than
seven (7) days’ advance written notice to the Company or (y) for any reason with no less than thirty (30) days’
advance written notice to the Company. Any termination of your employment (by you or by the Company) must be communicated by written
notice from the terminating party to the other party. Such notice of termination must be hand delivered (if to the Company, to
the Company’s General Counsel) and must indicate the specific provision(s) of this Agreement relied upon in effecting the
termination. The date your employment by the Company terminates is referred to herein as your “Severance Date.”


 


(b)  Benefits upon
Termination. Regardless of the reason for the termination of your employment with the Company, in connection with such termination
the Company will pay you (on or within 30 days following your Severance Date) your accrued and unused vacation (if any) and you
will be entitled to any benefits that are due to you under the Company’s 401(k) plan in accordance with the terms of that
plan. If you hold any stock options or other equity or equity-based awards granted by the Company, the terms and conditions applicable
to those awards will control as to the consequences of a termination of your employment on those awards. In addition to the foregoing,
if your employment with the Company terminates as a result of a termination by the Company of your employment without Cause (as
defined below) or if you terminate your employment with Good Reason, you will (subject to the other conditions set forth in Section 2(c)
below) be entitled to receive, subject to tax withholding and other authorized deductions, an aggregate amount equal to one (1)
times your Base Salary as in effect on the Severance Date (the “Severance Benefit”). Subject to Section 5,
the Company will pay this benefit to you in substantially equal installments (each in the applicable fraction of the aggregate
benefit) in accordance with the Company’s standard payroll practices over a period of twelve (12) months, with the first
installment payable in the month following the month in which your Separation from Service (as such term is defined below) occurs.


 




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(c)  Conditions for Receipt of Severance
Benefit. Notwithstanding anything to the contrary herein, if the Severance Benefit is otherwise due to you and, at any time,
you breach any obligation under Section 6 of this Agreement, from and after the date of such breach and not in any way in
limitation of any right or remedy otherwise available to the Company, you will no longer be entitled to, and the Company will no
longer be obligated to pay, any remaining unpaid portion of the Severance Benefit. In addition, in order to receive any Severance
Benefit, you must, upon or promptly following (and in all events, within twenty-one (21) days of, unless a longer period of
time is required by applicable law) your Severance Date, provide the Company with a separation agreement which shall contain a
valid, executed general release agreement in a form acceptable to the Company, and such release shall have not been revoked. In
the event a period longer than twenty-one (21) days is required by applicable law, then the first installment of the Severance
Benefit shall remain payable in the month following the month in which your Separation from Service (as such term is defined below)
occurs, provided that if you fail to provide the Company with the executed general release agreement described above (or have otherwise
revoked the release), any further installments of the Severance Benefit shall cease at such time and shall no longer be payable
to you. You agree and acknowledge that such separation agreement may contain additional restrictive covenants, including, without
limitation, non-solicitation covenants and non-disparagement covenants.


 


(d)  Exclusive Remedy.
You agree that should your employment by the Company terminate for any reason, the payments and benefits contemplated by this Agreement
with respect to the circumstances of such termination shall constitute the exclusive and sole remedy for any such termination of
your employment and you agree not to assert or pursue any other remedies, at law or in equity, with respect to any termination
of employment. You agree that, in the event of a termination of your employment, you are not and will not be entitled to severance
benefits under any other agreement, plan, program, or policy of the Company.


 


3.  Certain Defined
Terms. As used in this Agreement, the following terms shall be defined as follows:


 


(a)  “Cause”
shall mean that one or more of the following has occurred: (i) you have been convicted of or pleaded no contest to a felony
(under the laws of the United States or any relevant state, or a similar crime or offense under the applicable laws of any relevant
foreign jurisdiction); (ii) you have engaged in acts of fraud, dishonesty or other acts of material misconduct in the course
of your duties; (iii) your abuse of narcotics or alcohol that has or may reasonably harm the Company; (iv) any violation
by you of the Company’s written policies; (v) your failure to perform or uphold your duties and/or you fail to comply
with reasonable directives of the Parent’s Board of Directors, as applicable; or (vi) any breach by you of any provision
of Section 6, or any material breach by you of this Agreement or any other contract you are a party to with the Company.


 


(b)  “Disability”
shall mean a physical or mental impairment which renders you unable to perform the essential functions of your employment with
the Company, even with reasonable accommodation that does not impose an undue hardship on the Company, for more than 180 days in
any 12-month period, unless a longer period is required by federal or state law, in which case that longer period would apply.


 




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(c)  “Separation
from Service” occurs when you die, retire, or otherwise have a termination of employment with the Company that constitutes
a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h)(1), without regard to
the optional alternative definitions available thereunder.


 


(d)  “Good Reason”
shall mean the following events without your express written consent: (i) the assignment to you by the Board of any duties or responsibilities
which are materially inconsistent with your position as President and Chief Executive Officer or a material reduction in duties
and responsibilities exercised by you, or a loss of the title of President and/or Chief Executive Officer, except in connection
with the termination of employment for Cause or Disability or death, or (ii) any material breach by the Company of any provision
of this Agreement which is not cured to your reasonable satisfaction within thirty (30) days after written notice has been provided
to the Company.


 


4.  Limitation on
Benefits. Notwithstanding anything contained in this Agreement to the contrary, to the extent that any payment, benefit
or distribution of any type to you or for your benefit by the Company or any of its affiliates, whether paid or payable, provided
or to be provided, or distributed or distributable pursuant to the terms of this Agreement or otherwise (collectively, the “Total
Payments”) would be subject to the excise tax imposed under Section 4999 of the Internal Revenue Code of 1986, as
amended (the “Code”), then the Total Payments shall be reduced (but not below zero) so that the maximum amount
of the Total Payments (after reduction) shall be one dollar ($1.00) less than the amount which would cause the Total Payments to
be subject to the excise tax imposed by Section 4999 of the Code. Unless you shall have given prior written notice to the
Company to effectuate a reduction in the Total Payments if such a reduction is required, any such notice consistent with the requirements
of Section 409A of the Code to avoid the imputation of any tax, penalty or interest thereunder, the Company shall reduce or
eliminate the Total Payments by first reducing or eliminating any cash severance benefits (with the payments to be made furthest
in the future being reduced first), then by reducing or eliminating any accelerated vesting of stock options or similar awards,
then by reducing or eliminating any accelerated vesting of restricted stock or similar awards, then by reducing or eliminating
any other remaining Total Payments. The preceding provisions of this Section 4 shall take precedence over the provisions of
any other plan, arrangement or agreement governing your rights and entitlements to any benefits or compensation.


 


5.  Section 409A.
It is intended that any amounts payable under this Agreement and the Company’s and your exercise of authority or discretion
hereunder shall comply with and avoid the imputation of any tax, penalty or interest under Section 409A of the Code. This
Agreement shall be construed and interpreted consistent with that intent. If you are a “specified employee” within
the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of your Separation from Service and you are entitled
to the Severance Benefit, you shall not be entitled to any payment or benefit pursuant to Section 2(b) until the earlier of
(i) the date which is six (6) months after your Separation from Service for any reason other than your death, or (ii) the
date of your death. The provisions of the preceding sentence shall only apply if, and to the extent, required to avoid the imputation
of any tax, penalty or interest pursuant to Section 409A of the Code. Any amounts otherwise payable to you upon or in the
six (6) month period following your Separation from Service that are not so paid by reason of such 6-month delay provision
shall be paid (without interest) as soon as practicable (and in all events within thirty (30) days) after the date that is
six (6) months after your Separation from Service (or, if earlier, as soon as practicable, and in all events within thirty (30)
days, after the date of your death).


 




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6.  Protective Covenants.


 


(a)  Confidential Information.


 


(i)  You shall
not disclose or use at any time, either during the Period of Employment or thereafter, any Trade Secrets and Confidential Information
(as defined below) of which you become aware, whether or not such information is developed by you, except to the extent that such
disclosure or use is directly related to and required by your performance in good faith of duties for the Company. You will take
all appropriate steps to safeguard Trade Secrets and Confidential Information in your possession and to protect it against disclosure,
misuse, espionage, loss and theft. You shall deliver to the Company at the termination of your employment, or at any time the Company
may request, all memoranda, notes, plans, records, reports, computer tapes and software and other documents and data (and copies
thereof) relating to the Trade Secrets and Confidential Information or the Work Product (as hereinafter defined) of the business
of the Company or any of its affiliates which you may then possess or have under your control. Notwithstanding the foregoing, you
may truthfully respond to a lawful and valid subpoena or other legal process, but shall give the Company the earliest possible
notice thereof.


 


(ii)  For
purposes of this Agreement, “Trade Secrets and Confidential Information” means information that is not generally
known to the public and that is used, developed or obtained by the Company in connection with its business, including, but not
limited to, information, observations and data obtained by you while employed by the Company or any predecessors thereof concerning
(i) the business or affairs of the Company (or such predecessors), (ii) products or services, (iii) fees, costs
and pricing structures, (iv) designs, (v) analyses, (vi) drawings, photographs and reports, (vii) computer
software, including operating systems, applications and program listings, (viii) flow charts, manuals and documentation, (ix) data
bases, (x) accounting and business methods, (xi) inventions, devices, new developments, methods and processes, whether
patentable or unpatentable and whether or not reduced to practice, (xii) customers and clients and customer or client lists,
(xiii) other copyrightable works, (xiv) all production methods, processes, technology and trade secrets, and (xv) all
similar and related information in whatever form. Trade Secrets and Confidential Information will not include any information that
has been published (other than a disclosure by you in breach of this Agreement) in a form generally available to the public prior
to the date you propose to disclose or use such information. Trade Secrets and Confidential Information will not be deemed to have
been published merely because individual portions of the information have been separately published, but only if all material features
comprising such information have been published in combination.


 




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(iii)  For
purposes of this Agreement, “Work Product” means all inventions, innovations, improvements, technical information,
systems, software developments, methods, designs, analyses, drawings, reports, service marks, trademarks, trade names, logos and
all similar or related information (whether patentable or unpatentable, copyrightable, registerable as a trademark, reduced to
writing, or otherwise) which relates to the Company’s or any of its affiliates’ actual or anticipated business, research
and development or existing or future products or services and which are conceived, developed or made by you (whether or not during
usual business hours, whether or not by the use of the facilities of the Company or any of its affiliates, and whether or not alone
or in conjunction with any other person) while employed by the Company (including those conceived, developed or made prior to the
Effective Date) together with all patent applications, letters patent, trademark, trade name and service mark applications or registrations,
copyrights and reissues thereof that may be granted for or upon any of the foregoing. All Work Product that you may have discovered,
invented or originated during your employment by the Company or any of its affiliates prior to the date hereof, that you may discover,
invent or originate during your employment or at any time following the termination of your employment with the Company, shall
be the exclusive property of the Company and its affiliates, as applicable, and you hereby assign all of your right, title and
interest in and to such Work Product to the Company or its applicable affiliate, including all intellectual property rights therein.
You shall promptly disclose all Work Product to the Company, shall execute at the request of the Company any assignments or other
documents the Company may deem necessary to protect or perfect its (or any of its affiliates’, as applicable) rights therein,
and shall assist the Company, at the Company’s expense, in obtaining, defending and enforcing the Company’s (or any
of its affiliates’, as applicable) rights therein. You hereby appoint the Company as your attorney-in-fact to execute on
your behalf any assignments or other documents deemed necessary by the Company to protect or perfect the Company, the Company’s
(and any of its affiliates’, as applicable) rights to any Work Product.


 


(b)  Restriction on
Competition. During your employment with the Company and twelve (12) months following the termination of your
employment with the Company (regardless of the reason for such termination and regardless of whether or not you are entitled to
the Severance Benefit) (the “Restricted Period”), you shall not directly or indirectly, individually or on behalf
of any other person or entity, manage, participate in, work for, consult with, render services for, or take an interest in (as
an owner, stockholder, partner or lender) any Competitor. For purposes of this Agreement, “Competitor” means
a Person anywhere in North America (the “Restricted Area”) that at any time during the period of time during
which you are employed by the Company, or any time during the Restricted Period engages in the business of operating retail stores
and/or websites for the sale of women’s apparel, jewelry, accessories, gifts, greeting cards, picture frames and related
items or any other business that the Company is engaged in, or reasonably anticipates becoming engaged in. As used herein, the
term ‘retail stores’ shall not include: (i) stores that are operated in thirty-thousand or greater square feet; (ii)
department stores such as Macy’s, Dillard’s, JCPenney, Nordstrom, Target, Walmart etc., and ; (iii) the following named
stores; Burlington Coat Factory, Marshall’s, Dollar General, Family Dollar, DSW, FootLocker, and Dick’s Sporting Goods.
The parties hereto agree that the Company intends to engage in business throughout the Restricted Area, even if it does not currently
do so, and therefore its scope is reasonable. Nothing herein shall prohibit you from being a passive owner of not more than 2%
of the outstanding stock of any class of a corporation which is publicly traded, so long as you have no active participation in
the business of such corporation. The term “Person” as used in this Agreement shall be construed broadly and
shall include, without limitation, an individual, a partnership, a limited liability company, a corporation, an association, a
joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency
or political subdivision thereof.


 




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(c)  Non-Solicitation
of Employees and Consultants. During your employment with the Company and during the Restricted Period, you will not, and should
be enjoined (if necessary) from being able to directly or indirectly through any other Person: (i) induce or attempt to induce
any employee or independent contractor of the Company or any affiliate of the Company to leave the employ or service, as applicable,
of the Company or such affiliate, or in any way interfere with the relationship between the Company or any such affiliate, on the
one hand, and any employee or independent contractor thereof, on the other hand, or (ii) hire any person who was an employee
of the Company or any affiliate of the Company until twelve (12) months after such individual’s employment relationship
with the Company or such affiliate has been terminated.


 


(d)  Non-Solicitation
of Customers; Non-Disparagement. During your employment with the Company and during the Restricted Period, you will not, and
should be enjoined (if necessary) from being able to directly or indirectly through any other Person: (i) influence or attempt
to influence customers, vendors, suppliers, licensors, lessors, joint venturers, associates, consultants, agents, or partners of
the Company or any affiliate of the Company to divert their business away from the Company or such affiliate; and (ii) interfere
with, disrupt or attempt to disrupt the business relationships, contractual or otherwise, between the Company or any affiliate
of the Company, on the one hand, and any of its or their customers, suppliers, vendors, lessors, licensors, joint venturers, associates,
officers, employees, consultants, managers, partners, members or investors, on the other hand.


 


You agree that you will not
disparage, ridicule or criticize the Company or its affiliates and its and their present and former employees, directors and officers,
or make any remarks or statements that could reasonably be construed as disparaging, ridiculing or criticizing any of them; provided,
however, the foregoing shall not prohibit you from giving truthful testimony in any legal proceeding pending before any
agency or court of the United States or state government or in any arbitration proceeding relating to this Agreement.


 


(e)  Understanding
of Covenants. You acknowledge and agree that the Company would not have entered into this Agreement, providing for severance
protections to you on the terms and conditions set forth herein, but for your agreements herein. You agree that the foregoing covenants
set forth in this Section 6 (the “Restrictive Covenants”) are reasonable, including in temporal and geographical
scope, and in all other respects, and necessary to protect the Company’s and its affiliates’ Trade Secrets and Confidential
Information, good will, stable workforce, and customer relations. The parties hereto intend that Restrictive Covenants shall be
deemed to be a series of separate covenants, one for each county or province of each and every state or jurisdiction within the
Restricted Area and one for each month of the Restricted Period. You understand that the Restrictive Covenants may limit your ability
to earn a livelihood in a business similar to the business of the Company and any of its affiliates, but you nevertheless believe
that you have received and will receive sufficient consideration and other benefits as an employee of the Company and as otherwise
provided hereunder or as described in the recitals hereto to clearly justify such restrictions which, in any event (given your
education, skills and ability), you do not believe would prevent you from otherwise earning a living. You agree that the Restrictive
Covenants do not confer a benefit upon the Company disproportionate to your detriment.


 




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(f)  Enforcement.
You agree that a breach by you of any of the covenants in this Section 6 would cause immediate and irreparable harm to the
Company that would be difficult or impossible to measure, and that damages to the Company for any such injury would therefore be
an inadequate remedy for any such breach. Therefore, you agree that in the event of any breach or threatened breach of any provision
of this Section 6, the Company shall be entitled, in addition to and without limitation upon all other remedies the Company
may have under this Agreement, at law or otherwise, to obtain specific performance, injunctive relief and/or other appropriate
relief (without posting any bond or deposit) in order to enforce or prevent any violations of the provisions of this Section 6,
or require you to account for and pay over to the Company all compensation, profits, moneys, accruals, increments or other benefits
derived from or received as a result of any transactions constituting a breach of this Section 6, if and when final judgment
of a court of competent jurisdiction is so entered against you.


 


7.  Withholding Taxes.
Notwithstanding anything else herein to the contrary, the Company may withhold (or cause there to be withheld, as the case may
be) from any amounts otherwise due or payable under or pursuant to this Agreement such federal, state and local income, employment,
or other taxes as may be required to be withheld pursuant to any applicable law or regulation.


 


8.  Successors and
Assigns. This Agreement is personal to you and without the prior written consent of the Company shall not be assignable
by you otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable
by your legal representatives. This Agreement shall inure to the benefit of and be binding upon the Company and its successors
and assigns.


 


9.  Governing Law.
THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO ANY
CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF TEXAS OR ANY OTHER JURISDICTION) THAT WOULD CAUSE
THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF TEXAS TO BE APPLIED.


 


10.  Severability.
If any provision of this Agreement is found by any court of competent jurisdiction to be invalid or unenforceable for any reason,
such finding shall not affect, impair or invalidate the remainder of this Agreement. If any aspect of any restriction herein is
too broad or restrictive to permit enforcement to its fullest extent, you and the Company agree that any court of competent jurisdiction
shall modify such restriction to the minimum extent necessary to make it enforceable and then enforce the provision as modified.


 


11.  Entire Agreement,
Amendment and Waiver. This Agreement constitutes the entire agreement between you and the Company with respect to the subject
matter hereof and supersedes any and all prior or contemporaneous oral or written communications respecting such subject matter.
This Agreement shall not be modified, amended or in any way altered except by written instrument signed by you and by an officer
of the Company duly authorized by Parent’s Board of Directors to execute such instrument. A waiver by either party hereto
of any rights or remedies hereunder on any occasion shall not be a bar to the exercise of the same right or remedy on any subsequent
occasion or of any other right or remedy at any time.


 


12.  Waiver of Jury
Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT.


 




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13.  Remedies.
Each of the parties to this Agreement and any such person or entity granted rights hereunder whether or not such person or entity
is a signatory hereto shall be entitled to enforce its rights under this Agreement specifically to recover damages and costs for
any breach of any provision of this Agreement and to exercise all other rights existing in its favor. The parties hereto agree
and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that each
party may in its sole discretion apply to any court of law or equity of competent jurisdiction for specific performance, injunctive
relief and/or other appropriate equitable relief (without posting any bond or deposit) in order to enforce or prevent any violations
of the provisions of this Agreement. Each party shall be responsible for paying its own attorneys’ fees, costs and other
expenses pertaining to any such legal proceeding and enforcement regardless of whether an award or finding or any judgment or verdict
thereon is entered against either party.


 


14.  Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against any party whose
signature appears thereon, and all of which together shall constitute one and the same instrument.


 


[Signature page follows]


 




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IN WITNESS WHEREOF,
you and the Company have executed this Agreement as of September 16, 2016.


 


	 	Francesca’s Services Corporation
	 	a Delaware corporation
	 	Francesca’s Collections, Inc.
	 	a Texas corporation
	 	Francesca’s Holdings Corporation
	 	a Delaware corporation
	 	 	 
	 	By:  	/s/ Rick Kunes
	 	 	Rick Kunes, Interim CEO
	 	 	 
	 	AGREED BY:
	 	 
	 	 /s/ Steve Lawrence
	 	Steve Lawrence


 




    	 	11	 



     


    

 


Exhibit A


 


	Performance Criteria	 	Weighting	 	 	 	Payout as % of

    Target Bonus

    Allocable to the

    Metric	 	$ Target
	Pre-Tax Earnings (Income from continuing operations before income taxes)	 	66.7%	 	
        Maximum

        Target

        Threshold
	 	
        200%

        100%

        Up to 25%
	 	
        $43.5m

        $34.7m

        $30.4m

	Comparable Store Sales (Relative to our performance group)	 	33.3%	 	
        Maximum

        Target

        Threshold
	 	
        200%

        100%

        25%
	 	
        TBD

        TBD

        TBD



 


Target Bonus for purposes of this Exhibit A: $330,344 [($657,400
x .75) x.67].


 


Performance Group for purposes of this Exhibit shall be as follows:


Dillard’s, Inc., Abercrombie & Fitch Co. Genesco Inc.,
J. C. Penney Company, Inc., American Eagle Outfitters, Inc. Guess?, Inc., Kohl’s Corporation, Ann Inc., L Brands, Inc., Macy’s,
Inc., Ascena Retail Group, Inc., The Men’s Wearhouse, Inc., Nordstrom, Inc., Chico’s FAS, Inc., Ross Stores, Inc.,
Sears Holdings Corporation, DSW Inc., The TJX Companies, Inc., Foot Locker, Inc., Urban Outfitters, Inc., The Gap, Inc.


 


All of the above subject to confirmation per the final reported
by Prior Employer.