Document:

FRANCESCA’S COLLECTIONS, INC.

 

December 28, 2012

 

Re: Amended and Restated Employment Letter Agreement

 

Dear Neill:

 

This letter agreement (this “Agreement”)
hereby amends and restates in its entirety that certain letter agreement entered into by and between you and Francesca’s
Collections, Inc., a Texas corporation (“Francesca’s”), dated as of August 6, 2012 (the “Prior
Letter Agreement”). Francesca’s is the wholly-owned indirect subsidiary of Francesca’s Holdings Corporation,
a Delaware corporation (“Parent”). Parent and Francesca’s are herein collectively referred to as the “Company.”
Subject to the terms and conditions of this Agreement, the Company desires to provide for your continued employment on the terms
and conditions of this Agreement. This Agreement is effective as of January 1, 2013 (the “Effective Date”).

 

		1.	Employment; Compensation and Benefits.

 

(a)    Position and
Duties. You shall serve both the Parent and Francesca’s as their respective Chief Executive Officer, and you shall report
to the Board of Directors of Parent and Francesca’s, as applicable. 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. The “Period of Employment” shall be a period of three (3) years commencing on the Effective
Date and ending at the close of business on the third (3rd) anniversary of the Effective Date. Notwithstanding the foregoing,
the Period of Employment is subject to earlier termination as provided in Section 2(a) of this Agreement.

 

(c)     Base Salary.
Your aggregate base salary (the “Base Salary”) shall be at an annualized rate of Five Hundred and Fifty Thousand
Dollars ($550,000.00) 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 aggregate 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.

 

(e)     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.

 

(f)     Benefits
Allowance. For each fiscal year during the Period of Employment, commencing on the date hereof, the Company shall provide you
with an aggregate allowance of $50,000.00 to apply towards the purchase of additional benefits at your discretion. Such allowance
shall be paid in equal monthly installments (unless a pro-rata payment is to be made) on the closest payroll date on or following
the first day of each month of each calendar year, provided that you are employed with the Company on such date.

 

    	 

    	 

    

 

		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 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 Board of Directors) 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), you will (subject to the other conditions set forth in Section 2(c) below) be
entitled to the following benefits: the Company will pay you, subject to tax withholding and other authorized deductions, an aggregate
amount equal to one and one-half (1.50) times the sum of your Base Salary and the target annual incentive bonus amount 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 eighteen (18) 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.

 

(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 instalments 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.

 

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(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 committed 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 Company’s
Board of Directors; 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.

 

(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.

 

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.

 

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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).

 

		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.

 

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(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.

 

(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.

 

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(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 the
world (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 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. 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.

 

(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. 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.

 

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(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.

 

(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 NEW YORK 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.

 

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11.     Entire Agreement,
Amendment and Waiver. This Agreement constitutes the entire agreement between you and the parties hereto with respect to
the subject matter hereof and supersedes any and all prior or contemporaneous oral or written communications respecting such subject
matter, including, without limitation, the Prior Letter Agreement. This Agreement shall not be modified, amended or in any way
altered except by written instrument signed by you and an officer of Parent and Francesca’s (other than you in the event
you are the chief executive officer of such party). A waiver by any of the parties 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.

 

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, Francesca’s
and Parent have executed this Agreement as of December 28, 2012.

 

	 	Francesca’s Collections, Inc.
	 	a Texas corporation
	 	 
	 	By:	/s/ Kal Malik
	 	Name:	Kal Malik
	 	Title:	Chief Administrative Officer
	 	 
	 	Francesca’s Holdings Corporation,
	 	a Delaware corporation
	 	 
	 	By:	/s/ Kal Malik
	 	Name:	Kal Malik
	 	Title:	Chief Administrative Officer

 

	 	AGREED BY:
	 	 
	 	/s/ Neill P. Davis
	 	Neill P. Davis

 

    	9FRANCESCA’S COLLECTIONS, INC.

 

December 28, 2012

 

Re: Amended and Restated Employment Letter Agreement

 

Dear Theresa:

 

This letter agreement (this “Agreement”)
hereby amends and restates in its entirety that certain letter agreement entered into by and between you and Francesca’s
Collections, Inc., a Texas corporation (“Francesca’s”), dated as of July 14, 2011 (the “Prior
Letter Agreement”). Francesca’s is the wholly-owned indirect subsidiary of Francesca’s Holding Corporation,
a Delaware corporation (“Parent”). Parent and Francesca’s are herein collectively referred to as the “Company.”
Subject to the terms and conditions of this Agreement, the Company desires to provide for your continued employment on the terms
and conditions of this Agreement. This Agreement is effective as of January 1, 2013 (the “Effective Date”).

 

		1.	Employment; Compensation and Benefits.

 

(a)   Position and Duties.
You shall serve both the Parent and Francesca’s as their respective President, Chief Operating Officer, and you shall report
to the Chief Executive Officer of Parent and Francesca’s, as applicable. 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.
The “Period of Employment” shall be a period of three (3) years commencing on the Effective Date and ending
at the close of business on the third (3rd) anniversary of the Effective Date. Notwithstanding the foregoing, the Period of Employment
is subject to earlier termination as provided in Section 2(a) of this Agreement.

 

(c)    Base Salary.
Your aggregate base salary (the “Base Salary”) shall be at an annualized rate of Four Hundred Thousand Dollars
($400,000.00) 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 aggregate target annual incentive bonus amount for a particular fiscal year of the Company during the Period of Employment
shall equal Seventy-Five Percent (75%) of your Base Salary for that fiscal year.

 

(e)    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.

 

(f)    Benefits Allowance.
For each fiscal year during the Period of Employment, commencing on the date hereof, the Company shall provide you with an aggregate
allowance of $20,000.00 to apply towards the purchase of additional benefits at your discretion. Such allowance shall be paid in
equal monthly installments (unless a pro-rata payment is to be made) on the closest payroll date on or following the first day
of each month of each calendar year, provided that you are employed with the Company on such date.

 

    	 

    	 

    

 

		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 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 Chief Executive Officer) 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), you will (subject to the other conditions set forth in Section 2(c) below) be entitled to the following benefits:
the Company will pay you, 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.

 

(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 instalments 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.

 

    	2

    	 

    

 

(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 committed 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 Company’s
Chief Executive Officer or 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.

 

(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.

 

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.

 

    	3

    	 

    

 

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).

 

		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.

 

    	4

    	 

    

 

(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.

 

(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.

 

    	5

    	 

    

 

(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 the
world (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 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. 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.

 

(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. 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.

 

    	6

    	 

    

 

(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.

 

(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 NEW YORK 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.

 

    	7

    	 

    

 

11.    Entire Agreement,
Amendment and Waiver. This Agreement constitutes the entire agreement between you and the parties hereto with respect to
the subject matter hereof and supersedes any and all prior or contemporaneous oral or written communications respecting such subject
matter, including, without limitation, the Prior Letter Agreement. This Agreement shall not be modified, amended or in any way
altered except by written instrument signed by you and the Chief Executive Officer of Parent and Francesca’s. A waiver by
any of the parties 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.

 

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]

 

    	8

    	 

    

 

IN WITNESS WHEREOF, you, Francesca’s
and Parent have executed this Agreement as of December 28, 2012.

 

	 	Francesca’s Collections, Inc.
	 	a Texas corporation
	 	 
	 	By:	/s/ Neill  Davis
	 	Name:	Neill  Davis
	 	Title:	President
	 	 
	 	Francesca’s Holdings Corporation,
	 	a Delaware corporation
	 	 
	 	By:	/s/ Neill  Davis
	 	Name:	Neill  Davis
	 	Title:	President

 

	 	AGREED BY:
	 	 
	 	/s/ Theresa Backes
	 	Theresa Backes

 

    	9

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