EX-10.1 Employment Agreement with Ira Kaplan

Exhibit 10.1

EMPLOYMENT AGREEMENT

     This Employment Agreement (“Agreement”) is made and entered into as of the 18^th day of January 2007 by and between CLAIRE’S STORES, INC., a Florida corporation (the “Company”), and IRA KAPLAN (the “Executive”).

RECITALS

     A. The Executive is currently employed as the Chief Financial Officer of the Company.

     B. The Executive possesses intimate knowledge of the business and affairs of the Company, its policies, methods and personnel.

     C. The Board of Directors of the Company (the “Board”) recognizes that the Executive’s talents and abilities are unique and that the Executive has been integral to the growth and success of the Company, and desires to assure the Company of the Executive’s continued employment and to compensate him therefor.

     D. The Board also recognizes that, in addition to the foregoing, the network of contacts among suppliers and wholesalers that has been established and maintained by the Executive (the “Network”) is also a unique asset that has been integral to the growth and success of the Company, and desires to assure the Company that the Executive will not compete with the Company in the foreseeable future.

     E. The Board has determined that this Agreement will reinforce and encourage the Executive’s continued attention and dedication to the Company and benefit the Company.

     F. The Executive is willing to make his services available to the Company on the terms and conditions hereinafter set forth, and the Company is willing to make payments and provide benefits to the Executive on the terms and conditions hereinafter set forth.

AGREEMENT

     NOW, THEREFORE, in consideration of the premises and mutual covenants set forth herein, the parties agree as follows:

ARTICLE I.

     1.1. Employment and Term. The Company hereby agrees to employ the Executive and the Executive hereby agrees to serve the Company on the terms and conditions set forth herein.

     1.2. Duties of Executive. During the Term of Employment under this Agreement, the Executive shall continue to serve as Chief Financial Officer of the Company and shall faithfully and diligently perform all services as may be assigned to him by the Co-Chairmen of the Board, or either of them (provided that, such services shall not materially differ from the services currently provided by the Executive), and shall exercise such power and have such authority as may from time to time be delegated to him by the Co-Chairmen of the Board, or either of them.

The Executive shall report directly to the Co-Chairmen of the Board. The Executive shall devote his full time and attention to the business and affairs of the Company, render such services to the best of his ability, and use his best efforts to promote the interests of the Company. Notwithstanding the foregoing or any other provision of this Agreement, it shall not be a breach or violation of this Agreement for the Executive to (i) serve on corporate, civic or charitable boards or committees, (ii) deliver lectures or fulfill speaking engagements, or (iii) manage personal investments, so long as such activities do not significantly interfere with or significantly detract from the performance of the Executive’s responsibilities to the Company in accordance with this Agreement. The restrictions in the foregoing sentence shall not apply to the Executive’s ownership of common stock of the Company or the acquisition by the Executive, solely as an investment, of securities of any issuer that is registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, and that are listed or admitted for trading on any United States national securities exchange or that are quoted on the National Association of Securities Dealers Automated Quotations System, or any similar system or automated dissemination of quotations of securities prices in common use, so long as the Executive does not control, acquire a controlling interest in or become a member of a group which exercises direct or indirect control of, more than five percent of any class of capital stock of such corporation.

ARTICLE II.

     2.1. In General. The Term of Employment under this Agreement, and the employment of the Executive hereunder (including any renewal periods hereof, the “Term of Employment”), shall commence as of the date first set forth above (the “Commencement Date”) and shall terminate upon the earlier of (a) January 31, 2008, or (b) the date on which the employment of the Executive is terminated pursuant to and in accordance with Article V hereof. Except as provided in Section 2.2.1 of this Article, below, the Term of Employment hereunder shall be renewed automatically for successive periods of one (1) year, unless either the Company or the Executive elects not to renew such term by giving written notice to the other thereof at least one hundred eighty (180) days prior to the Expiration Date (as defined herein). For purposes hereof, the date on which the Term of Employment under this Agreement shall terminate is sometimes referred to herein as the “Termination Date”, and the date on which the Term of Employment shall expire or would have expired absent an earlier termination pursuant to Article V hereof is sometimes referred to herein as the “Expiration Date.”

     2.2. Change in Control of Company.

     2.2.1. Renewal of Agreement. In the event that a Change in Control of the Company (as defined in Subsection 2.2.2 of this Article, below) shall occur during the Term of Employment, this Agreement shall automatically be renewed for a term of three (3) years commencing on the date on which the Change in Control of the Company becomes effective.

     2.2.2. Definition. For purposes of this Agreement, the term “Change in Control” shall mean a “Change in Control” as defined in the Company’s Amended and Restated 2005 Incentive Compensation Plan, as in effect on the date hereof.

ARTICLE III.

     3.1. Base Salary. The Executive’s current base salary at the annual rate of Five Hundred Thousand Dollars ($500,000) shall be increased to Five Hundred Fifteen Thousand Dollars ($515,000) as of February 1, 2007 (as increased from time to time, the “Base Salary”), with such Base Salary payable in installments consistent with the Company’s normal payroll schedule. The Base Salary shall be reviewed on an annual basis during the Term of Employment, with the first review occurring on or before the first anniversary of the Commencement Date. The Base Salary shall increase annually by no less than 3%.

     3.2. Bonuses: Incentive Compensation. For each fiscal year during the Term of Employment, the Executive shall be eligible to receive additional compensation (the “Incentive Compensation”) of up to 150% of Base Salary, based on achievement of performance criteria. As used herein, the term “Incentive Compensation” shall include the portion of any annual incentive compensation award that is earned by the Executive in respect of a fiscal year (including the portion of any such award that is deferred by the Executive), but such term shall not include any Company “matching” contributions with respect to the deferred portion of any annual bonus award. The performance criteria for fiscal year 2007 have been established by a committee of the Board and provided to the Executive. The performance criteria for the remaining fiscal years during the Term of Employment shall be established each year within 90 days of the beginning of the applicable fiscal year by a committee of the Board.

     3.3. Long Term Incentives. For each fiscal year during the Term of Employment, the Company shall provide the Executive with a long term incentive opportunity through the grant of stock options, restricted stock, performance based stock or other similar long term incentives (each such annual grant, a “Long Term Incentive Grant”) under a plan established by the Company for the benefit of the Executive and other senior management of the Company (each, a “Long Term Incentive Plan”). Any Long Term Incentive Grant shall be reflected in an agreement entered into between the Company and the Executive and shall be subject to the terms of the Long Term Incentive Plan and agreement pursuant to which such Long Term Incentive Grant is made, and shall be subject to achievement of performance criteria to be established by a committee of the Board within ninety (90) days of the beginning of each fiscal year (the “Performance Goals”), except in the case of stock option grants or any long term awards intended to vest solely based on the passage of time. The Performance Goals shall not be any more stringent than the criteria for the award of long term incentives to senior management of the Company in general. The Executive acknowledges that Company has provided him with the Long Term Incentive Grant on account of fiscal year 2007 pursuant to the 2005 Incentive Compensation Plan and the performance criteria relating thereto have been established by a committee of the Board and provided to the Executive. In addition to the Long Term Incentive Grants described above, the Company may (but shall not be obligated to) during the Term of Employment provide the Executive with other incentive compensation based upon external competitiveness, internal equity and the degree of difficulty in attaining target performance levels.

ARTICLE IV.

     4.1. Reimbursement of Expenses. Upon the submission of proper substantiation by the Executive, and subject to such rules and guidelines as the Company may from time to time adopt with respect to the reimbursement of expenses of executive personnel, the Company shall reimburse the Executive for all reasonable expenses actually paid or incurred by the Executive during the Term of Employment in the course of and pursuant to the business of the Company. The Executive shall account to the Company in writing for all expenses for which reimbursement is sought and shall supply to the Company copies of all relevant invoices, receipts or other evidence reasonably requested by the Company.

     4.2. Compensation/Benefit Programs. During the Term of Employment, the Executive shall be entitled to participate in all medical, dental, hospitalization, accidental death and dismemberment, disability, travel and life insurance plans, and any and all other plans as are presently and hereinafter generally offered by the Company to its executive personnel (other than those that may be offered by the Company to its Co-Chairmen (or either of them) and not to other executive personnel), including savings, pension, profit-sharing and deferred compensation plans, subject to the general eligibility and participation provisions set forth in such plans.

     4.3. Working Facilities. During the Term of Employment, the Company shall furnish the Executive with an office, secretarial help and such other facilities and services suitable to his position and adequate for the performance of his duties hereunder in Pembroke Pines, Florida (or such other city within Broward County, Florida in which the Company may, from time to time, maintain its executive office). The office and staff provided to the Executive during the Term of Employment shall be consistent with those provided to the Executive prior to the Commencement Date hereof.

     4.4. Vacation Benefits. Executive shall be entitled to five (5) weeks of paid vacation each fiscal year during the Term of Employment, to be taken at such times as shall be approved by the Company’s Co-Chairmen (or either of them), provided that no vacation time shall significantly interfere with the duties required to be rendered by Executive hereunder. The Executive may carry forward up to two (2) weeks of vacation which accrues but is unused in any fiscal year into the next succeeding fiscal year (but any such vacation carried forward from any fiscal year that is not used in the next succeeding fiscal year shall lapse). Except as and to the extent otherwise expressly set forth in this Agreement, the Executive shall have no right to receive payment of any compensation on account of any vacation which accrues but is unused in any fiscal year. As soon as practicable on or after the date of this Agreement, the Company shall pay to the Executive a lump sum cash amount of $224,000 in full satisfaction of all of the Executive’s accrued vacation benefits through the date of this Agreement.

ARTICLE V.

     5.1. Termination for Cause. The Company shall at all times have the right, upon written notice to the Executive, to terminate the Term of Employment, for Cause as defined below. For purposes of this Agreement, the term “Cause” shall mean (i) an action or omission of the Executive during the Term of Employment which constitutes a willful and material breach

of, or willful and material failure or refusal (other than by reason of his disability or incapacity) to perform his duties under this Agreement which is not cured within fifteen (15) days after receipt by the Executive of written notice of same, (ii) fraud, embezzlement, misappropriation of funds or breach of trust in connection with his services hereunder during the Term of Employment, (iii) the conviction of, or pleading guilty or nolo contendere by, the Executive of any felony during the Term of Employment, or (iv) gross negligence or intentional acts during the Term of Employment, including, without limitation, immoral or disreputable conduct, that could reasonably be expected to result in material damage to the business or reputation of the Company. Any termination for Cause shall be made by notice in writing to the Executive, which notice shall set forth in reasonable detail all acts or omissions upon which the Company is relying for such termination. The Executive shall have the right to address the Board regarding the acts set forth in the notice of termination. Upon any termination pursuant to this Section 5.1: (a) the Company shall, within fifteen (15) days of the Termination Date, pay to the Executive: any earned but unpaid Base Salary through the Termination Date; (b) the portion of any Long Term Incentive Grants that have not vested or which shall remain subject to any restrictions or performance criteria as of the Termination Date shall terminate, and (c) any stock options previously granted to him which are not vested as of the Termination Date shall terminate and be of no further force and effect (unless otherwise provided in the plan or agreement pursuant to which such stock options were granted). Upon any termination effected and compensated pursuant to this Section 5.1, the Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the Termination Date, subject to the provisions of Section 4.1 of this Agreement).

     5.2. Disability. In the event that, due to the physical or mental disability or illness of the Executive, the Executive shall be unable to perform the essential functions of his position for a period of one hundred eighty (180) consecutive days or for one hundred eighty (180) days, whether or not consecutive, in any twelve (12) month period, the Company shall have the option, in accordance with applicable law, to terminate the Term of Employment upon written notice to the Executive. Whether the Executive is subject to a “disability” and whether the disability substantially impairs the Executive’s ability to perform the essential functions of his position under this Agreement shall be determined by the decision of a medical specialist selected by the Company and the Executive (or the Executive’s legal representative if the Executive is incapable of making such determination). Upon termination pursuant to this Section 5.2: (a) the Company shall, within fifteen (15) days of the Termination Date, pay to the Executive (i) the greater of any earned but unpaid Base Salary through the Termination Date, or an amount equal to the disability benefits payable to the Executive for the period of time during which the unpaid Base Salary accrued (in the later case, net of any portion thereof that shall have been paid or is payable by any third party insurance company, pursuant to a policy, the premiums for which were paid by the Company) and any Incentive Compensation earned but unpaid as of the Termination Date for any previously completed fiscal year of the Company; (ii) the Incentive Compensation described in the “Bonuses: Incentive Compensation” section of this Agreement, above, for the fiscal year in which the Termination Date occurs, pro-rated through the Termination Date (the annual amount to be pro-rated under this part (ii) shall be the average annual amount of Incentive Compensation earned by the Executive in respect of the three (3) prior fiscal years); and (iii) payment for unused vacation days that have been carried forward from the fiscal year preceding the fiscal year in which the Termination Date occurs in accordance with the terms of this Agreement and any unused vacation days which have accrued during the fiscal year in which the

Termination Date occurs (prorated for that portion of the fiscal year which occurs prior to the Termination Date); (b) the portion of any Long Term Incentive Grants that have not vested as of the Termination Date shall vest, any restrictions on any Long Term Incentive Grants that have not yet lapsed shall lapse and any performance criteria relating to any Long Term Incentive Grants shall be deemed to have been satisfied in full such that all performance-based Long Term Incentive Grants that would otherwise be phased in over annual increments for periods continuing after the Termination Date shall instead be completely phased in as of the Termination Date on the basis of deemed “plan” level performance achievement, (c) the Executive shall have one (1) year following the Termination Date to exercise any and all stock options previously granted to him (unless otherwise provided in the plan or agreement pursuant to which such stock options were granted, and provided further that no stock option shall remain exercisable beyond its expiration date or beyond the date after which the Executive would be subject to additional taxation under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)), and (d) the Company shall continue to provide the Executive with the benefits he was receiving under Section 4.2 hereof (the “Benefits”) for twelve (12) months following the Termination Date, in the manner and at such times as the Benefits otherwise would have been payable or provided to the Executive.^** Upon any termination effected and compensated pursuant to this Section 5.2, the Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the Termination Date, subject, however to the provisions of Section 4.1).

     5.3. Death. Upon the death of the Executive during the Term of Employment: (a) the Company shall, within fifteen (15) days of the Termination Date, pay to the Executive’s estate (i) the amount of any earned but unpaid Base Salary through the Termination Date and any Incentive Compensation earned but unpaid as of the Termination Date for any previously completed fiscal year of the Company, (ii) the Incentive Compensation described in the “Bonuses: Incentive Compensation” section of this Agreement, above, for the fiscal year in which the Termination Date occurs, which amount shall be pro-rated through the Termination Date (the annual amount to be pro-rated under this part (ii) shall be the average annual amount of Incentive Compensation earned by the Executive in respect of the three (3) prior fiscal years), and (iii) payment for unused vacation days that have been carried forward from the fiscal year preceding the fiscal year in which the Termination Date occurs in accordance with the terms of this Agreement and any unused vacation days which have accrued during the fiscal year in which the Termination Date occurs (prorated for that portion of the fiscal year which occurs prior to the Termination Date); (b) the portion of any Long Term Incentive Grants that have not vested as of

the Termination Date shall vest, any restrictions on any Long Term Incentive Grants that have not yet lapsed shall lapse and any performance criteria relating to any Long Term Incentive Grants shall be deemed to have been satisfied in full such that all performance-based Long Term Incentive Grants that would otherwise be phased in over annual increments for periods continuing after the Termination Date shall instead be completely phased in as of the Termination Date on the basis of deemed “plan” level performance achievement, and (c) the Executive’s estate shall have one (1) year following the Termination Date to exercise any and all stock options previously granted to the Executive (unless otherwise provided in the plan or agreement pursuant to which such stock options were granted, and provided further that no stock option shall remain exercisable beyond its expiration date or beyond the date after which the Executive would be subject to additional taxation under Section 409A of the Code). Upon any termination effected and compensated pursuant to this Section 5.3, the Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the date of the Executive’s death, subject, however to the provisions of Section 4.1).

     5.4. Termination Without Cause.

     5.4.1. Termination; Notice Period. Except as provided in Section 5.6., the Company shall have the right to terminate the Term of Employment by written notice, not less than thirty (30) days prior to the Termination Date (the “Without Cause Notice Period”), to the Executive. If the Company gives the Executive notice of termination pursuant to this Section 5.4, the Company may, upon the date such notice is given, or anytime thereafter, relieve the Executive, in whole or in part, of Executive’s duties, provided, however, that the Termination Date for purposes of determining the Executive’s rights under this Section 5.4. shall be the last day of the Without Cause Notice Period.

     5.4.2. Executive’s Rights. Upon any termination pursuant to this Section 5.4. (that is not a termination under any of Sections 5.1, 5.2, 5.3, 5.5 or 5.6.), the Company shall within fifteen (15) days of the Termination Date, pay to the Executive (i) an amount equal to the Executive’s annual Base Salary payable during the fiscal year in which the Termination Date occurs; (ii) an amount equal to the Incentive Compensation described in the “Bonuses: Incentive Compensation” section of this Agreement above, based upon the average annual amount of Incentive Compensation earned by the Executive in respect of the prior three (3) fiscal years (such average annual bonus, the “Bonus Amount”); (iii) payment for unused vacation days that have been carried forward from the fiscal year preceding the fiscal year in which the Termination Date occurs in accordance with the terms of this Agreement and any unused vacation days which have accrued during the fiscal year in which the Termination Date occurs (prorated for that portion of the fiscal year which occurs prior to the Termination Date); (iv) all accrued Base Salary through the Termination Date and any Incentive Compensation earned but unpaid as of the Termination Date for any previously completed fiscal year of the Company; and (v) an amount equal to the Bonus Amount multiplied by a fraction, the numerator of which shall equal the number of days the Executive was employed by the Company in the Company fiscal year in which the Executive’s termination occurs and the denominator of which shall equal 365. The Executive shall also receive such other benefits, if any, to which the Executive may be entitled pursuant to the terms and conditions of the employee compensation, incentive, equity, benefit or fringe benefit plans, policies or programs of the Company, other than any Company severance policy (or any other payment that

would result in duplication of benefits), and the Company shall continue to provide the Executive with the benefits he was receiving under Section 4.2 hereof (the “Benefits”) for twelve (12) months following the Termination Date, in the manner and at such times as the Benefits otherwise would have been payable or provided to the Executive.^** Additionally, the portion of any Long Term Incentive Grants that have not vested as of the Termination Date shall vest, any restrictions on any Long Term Incentive Grants that have not yet lapsed shall lapse and any performance criteria relating to any Long Term Incentive Grants shall be deemed to have been satisfied in full such that all performance-based Long Term Incentive Grants that would otherwise be phased in over annual increments for periods continuing after the Termination Date shall instead be completely phased in as of the Termination Date on the basis of deemed “plan” level performance achievement, and the Executive shall have ninety (90) day following the Termination Date to exercise any and all stock options previously granted to the Executive (unless otherwise provided in the plan or agreement pursuant to which such stock options were granted, and provided further that no stock option shall remain exercisable beyond its expiration date or beyond the date after which the Executive would be subject to additional taxation under Section 409A of the Code). Upon any termination effected and compensated pursuant to this Section 5.2, the Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the Termination Date, subject, however to the provisions of Section 4.1).

     5.5. Termination by Executive.

     5.5.1. Right of Executive to Terminate Agreement. The Executive shall at all times have the right, by written notice not less than thirty (30) days prior to the Termination Date (the “Voluntary Termination Notice Period”), to terminate the Term of Employment hereunder. If the Executive gives the Company notice of termination pursuant to this Section 5.5, the Company may, upon the date such notice is given, or anytime thereafter, relieve the Executive, in whole or in part, of Executive’s duties, provided, however, that the Termination Date for purposes of determining the Executive’s rights under this Section 5.5 shall be the last day of the Voluntary Termination Notice Period.

     5.5.2. Termination by Executive Without Good Reason. Upon termination of the Term of Employment pursuant to this Section 5.5 by the Executive without Good Reason (as defined below): (a) the Company shall, within fifteen (15) days of the Termination Date, pay to the Executive any earned but unpaid Base Salary through the Termination Date; (b) the portion of any Long Term Incentive Grants that have not vested or which shall remain subject to any restrictions or performance criteria as of the Termination Date shall terminate, and (c) any stock options previously granted to Executive which are vested as of the Termination Date shall terminate and be of no further force and effect unless exercised on or prior to the Termination Date (unless otherwise provided in the plan or agreement pursuant to which such stock options were granted). Upon any termination effected and compensated pursuant to this Section 5.1, the Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the Termination Date, subject to the provisions of Section 4.1 of this Agreement).

     5.5.3. Termination by Executive for Good Reason. Upon termination of the Term of Employment pursuant to this Section 5.5 by the Executive for Good Reason, the Company shall pay to the Executive the same amounts, and shall continue or compensate for Benefits in the same amounts, and shall provide the same conditions for the vesting of any Long Term Incentive Awards by the Executive, that would have been payable or provided by the Company to the Executive under Section 5.4 of this Agreement, above, if the Term of Employment had been terminated by the Company without Cause. Except as provided in Section 5.7 of this Agreement, below, and all subsections thereof, upon any termination effected and compensated pursuant to this Subsection 5.5.3, the Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the Termination Date, subject, however, to the provisions of Section 4.1).

     5.5.4. Definition. For purposes of this Agreement, “Good Reason” shall mean (i) the assignment to the Executive of any duties inconsistent in any material respect with the Executive’s chief financial officer position (including status, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 1.2. of this Agreement, or any other action by the Company which results in a material diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial or inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive; (ii) any failure by the Company to comply with any of the provisions of Article III of this Agreement, other than an isolated, insubstantial or inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive; and (iii) the Company’s requiring the Executive to be primarily based at any office or location outside of Broward County, Florida, except for travel reasonably required in the performance of the Executive’s responsibilities.

     5.6. Change of Control Protection Benefits.

     5.6.1. Termination; Notice Period. In the event that a Change in Control of the Company (as defined in Subsection 2.2.2 of this Agreement above) shall occur during the Term of Employment, the Company shall have the right to terminate the Term of Employment by written notice, not less than (30) days prior to the Termination Date (the “Change of Control Notice Period”), to the Executive. If the Company gives the Executive notice of termination pursuant to this Section 5.6, the Company may, upon the date such notice is given, or anytime thereafter, relieve the Executive, in whole or in part, of Executive’s duties, provided, however, that the Termination Date for purposes of determining the Executive’s rights under this Section 5.6. shall be the last day of the Change of Control Notice Period.

     5.6.2. Executive’s Rights. Upon any termination of the Executive’s employment within twenty four (24) months following the Change in Control of the Company due to (a) an involuntary termination by the Company without Cause or (b) a termination by the Executive for Good Reason, the Company shall within fifteen (15) days of the Termination Date, pay to the Executive (in lieu of the amounts that would otherwise be paid under Section 5.4 or 5.5): (i) an amount equal to two-and-one-half (2.5) times the Executive’s annual Base Salary payable during the fiscal year in which the Termination

Date occurs; (ii) an amount equal to two-and-one-half (2.5) times the Bonus Amount; (iii) payment for unused vacation days that have been carried forward from the fiscal year preceding the fiscal year in which the Termination Date occurs in accordance with the terms of this Agreement and any unused vacation days which have accrued during the fiscal year in which the Termination Date occurs (prorated for that portion of the fiscal year which occurs prior to the Termination Date); (iv) all accrued Base Salary through the Termination Date and any Incentive Compensation earned but unpaid as of the Termination Date for any previously completed fiscal year of the Company; and (v) an amount equal to the Bonus Amount multiplied by a fraction, the numerator of which shall equal the number of days the Executive was employed by the Company in the Company fiscal year in which the Executive’s termination occurs and the denominator of which shall equal 365. The Executive shall also receive such other benefits, if any, to which the Executive may be entitled pursuant to the terms and conditions of the employee compensation, incentive, equity, benefit or fringe benefit plans, policies or programs of the Company, other than any Company severance policy (or any other payment that would result in duplication of benefits), and the Company shall continue to provide the Executive with the Benefits he was receiving under Section 4.2 hereof for thirty (30) months following the Termination Date, in the manner and at such times as the Benefits otherwise would have been payable or provided to the Executive.^** Upon any termination effected and compensated pursuant to this Section 5.6.2, the Company shall have no further liability hereunder (other than pursuant to Section 5.7 or for reimbursement for reasonable business expenses incurred prior to the Termination Date, subject to the provisions of Section 4.1 of this Agreement).

     5.6.3. Certain Other Change in Control Benefits. Subject to the Executive’s continued employment with the Company and its Subsidiaries through the date of a Change in Control during the Term of Employment, the Company shall pay to the Executive the following amounts 15 business days after the Change in Control: (i) a lump sum amount in cash equal to the sum of 6 months’ Base Salary plus 50% of the Incentive Compensation amount that Executive would be entitled to receive for “plan” level performance with respect to the Company’s fiscal year ending January 31, 2007, (ii) all amounts accrued under the Company’s 1999 and 2005 Management Deferred Compensation Plans and (iii) all previously deferred annual bonus payments (including both the employee “holdback” portions and the Company matching contributions thereon). Additionally, the portion of any Long Term Incentive Grants that have not vested as of the Change in Control shall vest, any restrictions on any Long Term Incentive Grants that have not yet lapsed shall lapse and any performance criteria relating to any Long Term Incentive Grants shall be deemed to have been satisfied in full such that all performance-based Long Term Incentive Grants that would otherwise be phased in over annual increments for periods continuing after the date of the Change in Control shall instead be completely phased in as of the date of the Change in Control on the basis of deemed “plan” level performance achievement.

     5.6.4. Failure to Renew Term of Employment Following a Change in Control. In the event that the Company delivers a notice of non-renewal to the Executive pursuant to Section 2.1 following a Change in Control (but prior to the date that is 180 days prior to the third anniversary of the Change in Control) such that the Executive’s employment

terminates on the third anniversary of the Change in Control, then the Executive shall be entitled to receive, and the Company shall be required to provide the enhanced Change in Control termination protection payments and benefits described in Section 5.6.2. In the event that the Term of Employment is renewed for at least one additional year following the third anniversary of the Change in Control, and the Company subsequently delivers a notice of non-renewal to the Executive pursuant to Section 2.1 such that the Executive’s employment terminates on an Expiration Date that occurs after the third anniversary of the Change in Control, then the Executive shall be entitled to receive, and the Company shall be required to provide the termination payments and benefits described in Section 5.4.2.

     5.7. Section 280G Gross-Up. If the payments to which the Executive is entitled hereunder or otherwise (collectively the “Company Payments”) will cause the Executive to be subject to the tax (the “Excise Tax”) imposed by §4999 of the Code, the Company shall pay to or for the benefit of the Executive at the time specified in Subsection 5.7.2, below, an additional amount (the “Gross-up Payment”) such that the net amount retained by the Executive, after deduction of any Excise Tax on the Company Payments and any U.S. federal, state, and for local income or payroll tax upon the Gross-up Payment, but before deduction for any U.S. federal, state, and local income or payroll tax on the Company Payments, shall be equal to the Company Payments. For purposes of calculating the Gross-Up Payment, the Executive shall be deemed to pay income taxes at the highest applicable marginal rate of federal, state or local income taxation for the calendar year in which the Gross-Up Payment is to be made.

     5.7.1. Calculation of Gross-Up Payments. Subject to any determinations made by the Internal Revenue Service (the “IRS”), all determinations as to whether a Gross-Up Payment is required and the amount of Gross-Up Payment and the assumptions to be used in arriving at the determination shall be made by the Company’s independent certified public accountants, appointed prior to any change in ownership (as defined under Code §280G(b)(2)), and/or tax counsel selected by such accountants (the “Accountants”) in accordance with the principles of §280G of the Code. Subject to any determinations made by the IRS, determinations of the Accountants under this Agreement with respect to (i) the initial amount of any Gross-Up Payment and (ii) any subsequent adjustment of such payment shall be binding on the Company and the Executive.

     5.7.2. Time for Payment to Executive. The Gross-Up Payment calculated pursuant to Subsection 5.7.1, above, shall be paid no later than the thirtieth (30th) day following an event occurring which subjects the Executive to the Excise Tax; provided, however, that if the amount of such Gross-Up Payment or portion thereof cannot be reasonably determined on or before such day, the Company shall pay to the Executive the amount of the Gross-Up Payment no later than 10 days following the determination of the Gross-Up Payments by the Accountants. Notwithstanding the foregoing, the Gross-Up Payment shall be paid to or for the benefit of the Executive no later than 15 business days prior to the date by which the Executive is required to pay the Excise Tax or any portion of the Gross-Up Payment to any federal, state or local taxing authority, without regard to extensions.

     5.7.3. If Gross-Up Payment Is Excessive. In the event that the Excise Tax or the Gross-Up Payment is subsequently determined by the Accountants to be less than the amount taken into account hereunder at the time the Gross-up Payment is made, the Executive shall repay to the Company, at the time that the amount of such reduction in Excise Tax is finally determined, the portion of the prior Gross-up Payment attributable to such reduction (plus the portion of the Gross-up Payment attributable to the Excise Tax and U.S. federal, state and local income tax imposed on the portion of the Gross-up Payment being repaid by the Executive if such repayment results in a reduction in Excise Tax or a U.S. federal, state and local income tax deduction), plus interest on the amount of such repayment at the rate provided in § 1274(b)(2)(B) of the Code. Notwithstanding the foregoing, in the event any portion of the Gross-up Payment to be refunded to the Company has been paid to any U.S. federal, state and local tax authority, repayment thereof (and related amounts) shall not be required until actual refund or credit of such portion has been made to the Executive, and interest payable to the Company shall not exceed the interest received or credited to the Executive by such tax authority for the period it held such portion. The Executive and the Company shall cooperate in good faith in determining the course of action to be pursued (and the method of allocating the expense thereof) if the Executive’s claim for refund or credit is denied. However, if agreement cannot be reached, the Company shall decide the appropriate course of action to pursue provided that the action does not adversely impact any issues the Executive may have with respect to his tax return, other than the Excise Tax.

     5.7.4. If Gross-Up Payment is Insufficient. In the event that the Excise Tax is later determined by the Accountants or the IRS to exceed the amount taken into account hereunder at the time the Gross-up Payment is made (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-up Payment), the Company shall make an additional Gross-up Payment to or for the benefit of the Executive in respect of such excess (plus any interest or penalties payable with respect to such excess) at the time that the amount of such excess is finally determined.

     5.7.5. Controversy With IRS. In the event of any controversy with the IRS (or other taxing authority) with regard to the Excise Tax, the Executive shall permit the Company to control issues related to the Excise Tax (at its expense), provided that such issues do not potentially materially adversely affect the Executive. In the event issues are interrelated, the Executive and the Company shall in good faith cooperate so as not to jeopardize resolution of either issue. In the event of any conference with any taxing authority as to the Excise Tax or associated income or payroll taxes, the Executive shall permit the representative of the Company to accompany the Executive, and the Executive and the Executive’s representative shall cooperate with the Company and its representative.

     5.7.6. Accounting Fees. The Company shall be responsible for all fees and expenses of the Accountant.

     5.7.7. Sharing of Communication. The Company and the Executive shall promptly deliver to each other copies of any written communications, and summaries of any verbal communications, with any taxing authority regarding the Excise Tax or associated income or payroll taxes.

     5.8. Release. Notwithstanding anything to the contrary contained herein, the Executive shall, as a condition to his right to receive any payments or other benefits discussed in Article V of this Agreement, execute and deliver to the Company a release of any and all claims that may be brought against the Company at any time and for any reason in the form attached hereto as Exhibit A (with such changes to such form as may in the opinion of counsel to the Company be required to cause such release to comply with then applicable law).

     5.9. No Mitigation. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement, and compensation earned from such employment or otherwise shall not reduce the amounts otherwise payable under this Agreement.

     5.10. Resignation. Upon the Termination Date or the Expiration Date, whichever is applicable, the Executive shall be deemed to have resigned as an officer, and if he was then serving as a director of the Company, as a director, and if required by the Board, the Executive hereby agrees to immediately execute a resignation letter to the Board.

     5.11. Survival. The provisions of this Article V shall survive the termination of this Agreement, as applicable. Any payments required to be made to the Executive as a result of termination of his employment pursuant to this Article V shall be made to the estate of the Executive in the event the Executive dies prior to the date such payment is actually made by the Company.

ARTICLE VI.

     6.1. Non-competition. At all times while the Executive is employed by the Company and (a) upon a termination pursuant to Section 5.6 above, for two (2) years following the Termination Date or the Expiration Date, whichever is applicable, and (b) upon a termination other than pursuant to Section 5.6 above, for one (1) year following the Termination Date or the Expiration Date, whichever is applicable, the Executive shall not, directly or indirectly, engage in or have any interest in any sole proprietorship, corporation, company, partnership, association, venture or business or any other person or entity (whether as an employee, officer, director, partner, agent, security holder, creditor, consultant or otherwise) that directly or indirectly (or through any affiliated entity) engages in any Competing Business, or benefits or could benefit in any manner from the use of the Network. For purposes of this Agreement, the term “Competing Business” shall mean any retail business that derives 50% or more of its business from sales of costume jewelry, accessories and/or cosmetics targeted to girls and women. The restrictions in the foregoing sentence shall not apply to the Executive’s ownership of Common Stock of the Company or the acquisition by the Executive, solely as an investment, of securities of any issuer that is registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, and that are listed or admitted for trading on any United States national securities exchange or that are quoted on the National Association of Securities Dealers Automated Quotations System, or any similar system or automated dissemination of quotations of securities prices in common use, so long as the Executive does not control, acquire a controlling interest in or become a member of a group which exercises direct or indirect control of, more than five percent of any class of capital stock of such corporation.

     6.2. Confidential Information. The Executive shall not at any time divulge, communicate, use to the detriment of the Company or for the benefit of any other person or persons, or misuse in any way, any Confidential Information (as hereinafter defined) pertaining to the business of the Company. Any Confidential Information or data now or hereafter acquired by the Executive with respect to the business of the Company (which shall include, but not be limited to, information concerning the Company’s financial condition, prospects, technology, customers, suppliers, sources of leads and methods of doing business) shall be deemed a valuable, special and unique asset of the Company that is received by the Executive in confidence and as a fiduciary, and Executive shall remain a fiduciary to the Company with respect to all of such information. For purposes of this Agreement, “Confidential Information” means information disclosed to the Executive or known by the Executive as a consequence of or through the unique position of his employment with the Company (including information conceived, originated, discovered or developed by the Executive) prior to or after the date hereof, and not generally or publicly known, about the Company or its business. Notwithstanding the foregoing, nothing herein shall be deemed to restrict the Executive from disclosing Confidential Information to the extent required by law.

     6.3. Non-solicitation of Employees and Customers. At all times while the Executive is employed by the Company and for two (2) years following the Termination Date or the Expiration Date, whichever is applicable, the Executive shall not, directly or indirectly, for himself or for any other person, firm, corporation, partnership, association or other entity (a) employ or attempt to employ or enter into any contractual arrangement with any employee or former employee of the Company, unless such former employee has not been employed by the Company for a period in excess of six months, and/or (b) call on or solicit any of the actual or targeted prospective customers or clients of the Company on behalf of any person or entity in connection with any Competing Business, nor shall the Executive make known the names and addresses of such clients or any information relating in any manner to the Company’s trade or business relationships with such customers, other than in connection with the performance of Executive’s duties under this Agreement.

     6.4. Ownership of Developments. All copyrights, patents, trade secrets, or other intellectual property rights associated with any ideas, concepts, techniques, inventions, processes, or works of authorship developed or created by Executive during the course of performing work for the Company or its clients, whether prior to or during the term of this Agreement (collectively, the “Work Product”), shall belong exclusively to the Company and shall, to the extent possible, be considered a work made by the Executive for hire for the Company within the meaning of Title 17 of the United States Code. To the extent the Work Product may not be considered work made by the Executive for hire for the Company, the Executive agrees to assign, and automatically assign at the time of creation of the Work Product, without any requirement of further consideration, any right, title, or interest the Executive may have in such Work Product. Upon the request of the Company, the Executive shall take such further actions, including execution and delivery of instruments of conveyance, as may be appropriate to give full and proper effect to such assignment.

     6.5 Books and Records. All books, records, and accounts relating in any manner to the customers or clients of the Company, whether prepared by the Executive or otherwise coming into the Executive’s possession, shall be the exclusive property of the Company and

shall be returned immediately to the Company on termination of the Executive’s employment hereunder or on the Company’s request at any time.

     6.6. Non Disparagement. The Executive agrees that at all times during and after the Term of Employment, the Executive will not engage in any conduct that is injurious to the reputation or interests of the Company or its affiliates, including, without limitation, making disparaging comments (or inducing or encouraging others to make disparaging comments) about the Company or any of its affiliates, or any of their respective directors, officers, employees or agents, or their respective businesses, operations, financial condition, prospects, products or services.

     6.7. Definition of Company. Solely for purposes of this Article VI, the term “Company” also shall include any existing or future subsidiaries of the Company that are operating during the time periods described herein and any other entities that directly or indirectly, through one or more intermediaries, control, are controlled by or are under common control with the Company during the periods described herein.

     6.8. Acknowledgment by Executive. The Executive acknowledges and confirms that (a) the restrictive covenants contained in this Article VI are reasonably necessary to protect the legitimate business interests of the Company, and (b) the restrictions contained in this Article VI (including without limitation the length of the term of the provisions of this Article VI) are not overbroad, overlong, or unfair and are not the result of overreaching, duress or coercion of any kind. The Executive further acknowledges and confirms that his full, uninhibited and faithful observance of each of the covenants contained in this Article VI will not cause him any undue hardship, financial or otherwise, and that enforcement of each of the covenants contained herein will not impair his ability to obtain employment commensurate with his abilities and on terms fully acceptable to him or otherwise to obtain income required for the comfortable support of him and his family and the satisfaction of the needs of his creditors. The Executive acknowledges and confirms that his special knowledge of the business of the Company is such as would cause the Company serious injury or loss if he were to use such ability and knowledge to the benefit of a competitor or were to compete with the Company in violation of the terms of this Article VI. The Executive further acknowledges that the restrictions contained in this Article VI are intended to be, and shall be, for the benefit of and shall be enforceable by, the Company’s successors and assigns.

     6.9. Reformation by Court. In the event that a court of competent jurisdiction shall determine that any provision of this Article VI is invalid or more restrictive than permitted under the governing law of such jurisdiction, then only as to enforcement of this Article VI within the jurisdiction of such court, such provision shall be interpreted and enforced as if it provided for the maximum restriction permitted under such governing law.

     6.10. Extension of Time. If the Executive shall be in violation of any provision of this Article VI, then each time limitation set forth in this Article VI shall be extended for a period of time equal to the period of time during which such violation or violations occur. If the Company seeks injunctive relief from such violation in any court, then the covenants set forth in this Article VI shall be extended for a period of time equal to the pendency of such proceeding including all appeals by the Executive.

     6.11. Injunction. It is recognized and hereby acknowledged by the parties hereto that a breach by the Executive of any of the covenants contained in Article VI of this Agreement will cause irreparable harm and damage to the Company, the monetary amount of which may be virtually impossible to ascertain. As a result, the Executive recognizes and hereby acknowledges that the Company shall be entitled to an injunction from any court of competent jurisdiction enjoining and restraining any violation of any or all of the covenants contained in Article VI of this Agreement by the Executive or any of his affiliates, associates, partners or agents, either directly or indirectly, and that such right to injunction shall be cumulative and in addition to whatever other remedies the Company may possess.

     6.12. Survival. The provisions of this Article VI shall survive the expiration or other termination of this Agreement, as applicable.

ARTICLE VII.

     7.1. Exclusive Remedy. The parties recognize that litigation in federal or state courts or before federal or state administrative agencies of disputes arising out of the Executive’s employment with the Company or out of this Agreement, or the Executive’s termination of employment or termination of this Agreement, may not be in the best interests of either the Executive or the Company, and may result in unnecessary costs, delays, complexities, and uncertainty. The parties agree that any dispute between the parties arising out of or relating to the Executive’s employment, or to the negotiation, execution, performance or termination of this Agreement or the Executive’s employment, including, but not limited to, any claim arising out of this Agreement, claims under Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, Section 1981 of the Civil Rights Act of 1966, as amended, the Family Medical Leave Act, the Employee Retirement Income Security Act, and any similar federal, state or local law, statute, regulation, or any common law doctrine, whether that dispute arises during or after employment shall be resolved by arbitration in the Broward County, Florida area, in accordance with the National Employment Arbitration Rules of the American Arbitration Association, as modified by the provisions of this Article VII. Except as set forth below with respect to Article VI of this Agreement, the parties each further agree that the arbitration provisions of this Agreement shall provide each party with its exclusive remedy, and each party expressly waives any right it might have to seek redress in any other forum, except as otherwise expressly provided in this Agreement. Notwithstanding anything in this Agreement to the contrary, the provisions of this Article VII shall not apply to any injunctions that may be sought with respect to disputes arising out of or relating to Article VI of this Agreement. The parties acknowledge and agree that their obligations under this arbitration agreement survive the expiration or termination of this Agreement and continue after the termination of the employment relationship between the Executive and the Company. By election of arbitration as the means for final settlement of all claims, the parties hereby waive their respective rights to, and agree not to, sue each other in any action in a Federal, State or local court with respect to such claims, but may seek to enforce in court an arbitration award rendered pursuant to this Agreement. The parties specifically agree to waive their respective rights to a trial by jury, and further agree that no demand, request or motion will be made for trial by jury.

     7.2. Arbitration Procedure and Arbitrator’s Authority. In the arbitration proceeding, each party shall be entitled to engage in any type of discovery permitted by the Federal Rules of Civil Procedure, to retain its own counsel, to present evidence and cross-examine witnesses, to purchase a stenographic record of the proceedings, and to submit post-hearing briefs. In reaching his/her decision, the arbitrator shall have no authority to add to, detract from, or otherwise modify any provision of this Agreement. The arbitrator shall submit with the award a written opinion which shall include findings of fact and conclusions of law. Judgment upon the award rendered by the arbitrator may be entered in any court having competent jurisdiction.

     7.3. Effect of Arbitrator’s Decision: Arbitrator’s Fees. The decision of the arbitrator shall be final and binding between the parties as to all claims which were or could have been raised in connection with the dispute, to the full extent permitted by law. In all cases in which applicable federal law precludes a waiver of judicial remedies, the parties agree that the decision of the arbitrator shall be a condition precedent to the institution or maintenance of any legal, equitable, administrative, or other formal proceeding by the Executive in connection with the dispute, and that the decision and opinion of the arbitrator may be presented in any other forum on the merits of the dispute. If the arbitrator finds that the Executive was terminated in violation of law or this Agreement, the parties agree that the arbitrator acting hereunder shall be empowered to provide the Executive with any remedy available should the matter have been tried in a court, including equitable and/or legal remedies, compensatory damages and back pay. The arbitrator’s fees and expenses and all administrative fees and expenses associated with the filing of the arbitration shall be borne by the non-prevailing party.

ARTICLE VIII.

     The Company shall have the right to assign this Agreement and its rights and obligations hereunder in whole, but not in part, to any corporation or other entity with or into which the Company may hereafter merge or consolidate or to which the Company may transfer all or substantially all of its assets, if in any such case said corporation or other entity shall by operation of law or expressly in writing assume all obligations of the Company hereunder as fully as if it had been originally made a party hereto, but may not otherwise assign this Agreement or its rights and obligations hereunder. The Executive may not assign or transfer this Agreement or any rights or obligations hereunder.

ARTICLE IX.

     This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Florida. The exclusive venue for any action to enforce this Agreement, other than those actions or claims that are subject to the Arbitration provisions set forth in Article VII hereof, shall be the state or federal courts located within Broward County, Florida.

ARTICLE X.

     This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and, upon its effectiveness, shall supersede all prior agreements, understandings and arrangements, both oral and written, between the Executive and the Company (or any of its affiliates) with respect to such subject matter. This Agreement may not be modified in any way unless by a written instrument signed by both the Company and the Executive.

ARTICLE XI.

     All notices required or permitted to be given hereunder shall be in writing and shall be personally delivered by courier, sent by registered or certified mail, return receipt requested or sent by confirmed facsimile transmission addressed as set forth herein. Notices personally delivered, sent by facsimile or sent by overnight courier shall be deemed given on the date of delivery and notices mailed in accordance with the foregoing shall be deemed given upon the earlier of receipt by the addressee, as evidenced by the return receipt thereof, or three (3) days after deposit in the U.S. mail. Notice shall be sent (i) if to the Company, addressed to 3 SW 129^th Avenue, Pembroke Pines, Florida 33027, Attention: General Counsel, and (ii) if to the Executive, to his address as reflected on the payroll records of the Company, or to such other in accordance with this provision.

ARTICLE XII.
BENEFITS; BINDING EFFECT

     This Agreement shall be for the benefit of and binding upon the parties hereto and their respective heirs, personal representatives, legal representatives, successors and, where permitted and applicable, assigns, including, without limitation, any successor to the Company, whether by merger, consolidation, sale of stock, sale of assets or otherwise.

ARTICLE XIII.
SEVERABILITY

     The invalidity of any one or more of the words, phrases, sentences, clauses, provisions, sections or articles contained in this Agreement shall not affect the enforceability of the remaining portions of this Agreement or any part thereof, all of which are inserted conditionally on their being valid in law, and, in the event that any one or more of the words, phrases, sentences, clauses, provisions, sections or articles contained in this Agreement shall be declared invalid, this Agreement shall be construed as if such invalid word or words, phrase or phrases, sentence or sentences, clause or clauses, provisions or provisions, section or sections or article or articles had not been inserted. If such invalidity is caused by length of time or size of area, or both, the otherwise invalid provision will be considered to be reduced to a period or area which would cure such invalidity.

ARTICLE XIV.

     The waiver by either party hereto of a breach or violation of any term or provision of this Agreement shall not operate nor be construed as a waiver of any subsequent breach or violation.

ARTICLE XV.

     The article, section and paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

ARTICLE XVI.

     Nothing expressed or implied in this Agreement is intended, or shall be construed, to confer upon or give any person other than the Company, the parties hereto and their respective heirs, personal representatives, legal representatives, successors and permitted assigns, any rights or remedies under or by reason of this Agreement.

ARTICLE XVII.

     This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument and agreement.

ARTICLE XVIII.

     Notwithstanding any other provision of this Agreement, the Company may, to the extent required by law, withhold applicable federal, state and local income and other taxes from any payments due to the Executive hereunder.

ARTICLE XIX.

     In the event that it is reasonably determined by the Company that, as a result of Section 409A (“Section 409A”) of the Code (and any related regulations or other pronouncements thereunder), any of the payments that the Executive is entitled to under the terms of this Agreement or any nonqualified deferred compensation plan (as defined under Section 409A) may not be made at the time contemplated by the terms hereof or thereof, as the case may be, without causing the Executive to be subject to an income tax under Section 409A, the Company will make such payment on the first day that would not result in the Executive incurring any tax liability under Section 409A, together with an additional interest payment on any such delayed payments at the rate provided in Section 1274(b)(2)(B) of the Code. In addition, other provisions of this Agreement or any other plan notwithstanding, the Company shall have no right to accelerate any such payment or to make any such payment as the result of an event if such payment would, as a result, be subject to the tax imposed by Section 409A; provided, however,

that if any payments or benefits that the Company would otherwise be required to provide under this Agreement or any Company plan cannot be provided in the manner contemplated herein or under the applicable plan without subjecting the Executive to income tax under Section 409A, the Company shall provide such intended payments or benefits to the Executive in an alternative manner that conveys an equivalent economic benefit to the Executive (without materially increasing the aggregate cost to the Company).

     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

Exhibit A

WAIVER AND RELEASE OF CLAIMS

     1. Release by the Executive. In consideration of, and subject to, the payments to be made to Ira Kaplan (the “Executive”) by Claire’s Stores, Inc., or any of its subsidiaries, or its or their successor(s) or assigns (the “Company”), pursuant to the attached Employment Agreement (the “Employment Agreement”) dated January 18, 2007, the Executive hereby releases and forever discharges the Company, and its respective past and present officers, directors, shareholders, employees and agents from any and all claims and causes of action, known or unknown, which may heretofore have existed or which may now exist, up to and including the date on which the Executive signs this Waiver and Release of Claims, arising out of or relating to the Executive’s employment with the Company or the termination thereof, including, but not limited to, wrongful discharge, breach of contract, tort, fraud, the Civil Rights Act, Age Discrimination in Employment Act, Employee Retirement Income Security Act, Americans with Disabilities Act, or any other federal, state or local legislation or common law relating to employment or discrimination in employment.

     Notwithstanding the foregoing or any other provision hereof, nothing in this Waiver and Release of Claims shall adversely affect (i) the Executive’s rights under the Employment Agreement; (ii) the Executive’s rights to benefits other than severance benefits under plans, programs and arrangements of the Company which are accrued but unpaid as of the date of the Executive’s termination; or (iii) the Executive’s rights to indemnification under any indemnification agreement, applicable law, and certificates of incorporation and bylaws of the Company, and the Executive’s rights under any directors’ and officers’ liability insurance policy covering the Executive.

     The Executive acknowledges that he has signed this Waiver and Release of Claims voluntarily, knowingly, of his own free will and without reservation or duress, and that no promises or representations have been made to the Executive by any person to induce the Executive to do so other than the promise of payment set forth in the first paragraph above and the Company’s acknowledgement of the Executive’s rights reserved under the second paragraph above.

     The Executive acknowledges that he has been given not less than [twenty-one (21)] [forty-five (45)] days to review and consider this Waiver and Release of Claims, and that he has had the opportunity to consult with an attorney or other advisors of his choice and has been advised by the Company to do so if he chooses. The Executive may revoke this Waiver and Release of Claims seven days or less after its execution by providing written notice to the Company. Finally, the Executive acknowledges that he has read this Waiver and Release of Claims and understands all of its terms.

     2. Release by the Company. In consideration of the Executive’s release and the other promises contained herein and other good and valuable consideration, the Company completely releases and forever discharges the Executive and his heirs, personal representatives, successors and assigns from any and all claims and causes of action, known or unknown, which may heretofore have existed or which may now exist, up to and including the date on which the Executive signs this Waiver and Release of Claims, arising out of or relating to the Executive’s

employment with the Company or the termination thereof; provided, however, that the Company shall not release the Executive for any claims arising out of any acts or omissions by the Executive which constitute the violation of any applicable criminal law or any claims arising out of the Executive’s breach of this Waiver and Release of Claims.

          IN WITNESS WHEREOF, the undersigned have executed this Waiver and Release of Claims as of the date indicated below.