EMPLOYMENT AGREEMENT



      THIS EMPLOYMENT AGREEMENT is entered into effective as of June 1, 2005,

between Jack Lewis ("Executive") and KIRKLAND'S, INC., a Tennessee corporation

with principal offices in Jackson, Tennessee (the "Company").



                                     RECITAL



      Executive and the Company desire to memorialize the terms of Executive's

employment with the Company as Chief Executive Officer and President of the

Company. The Company operates a chain of retail stores (the "Stores"). The

parties have agreed concerning the terms of Executive's employment.



      NOW, THEREFORE, in consideration of the premises and the parties' mutual

covenants, it is agreed:



      1. Employment; Scope of Duties. The Company hereby employs Executive, and

Executive accepts employment as Chief Executive Officer and President. Executive

shall report to the Board of Directors of the Company, and shall perform those

duties as from time to time assigned by the Board of Directors of the Company.



      2. Term. The term of this Agreement shall commence on June 1, 2005 and

continue until terminated as provided herein.



      3. Compensation and Benefits.



      (a) Salary and Annual Bonus. As base compensation for the services

      rendered hereunder to the Company, Executive shall be paid an annual base

      salary of $375,000, payable in accordance with the Company's standard

      payroll practices as in effect from time to time. The Board's Compensation

      Committee will review the base salary amount annually. In addition,

      beginning in fiscal 2005, Executive's target annual bonus opportunity will

      be $375,000, with $250,000 of that first year's bonus guaranteed. The

      bonus criteria, and the actual amount of any annual bonus (other than the

      first year's guaranteed amount), shall be determined by the Board of

      Directors Compensation Committee. The Board's Compensation Committee will

      review the bonus annually in accordance with the Company's Management

      Bonus Plan, as in effect from time to time.



      (b) Stock Options. Effective upon the commencement of employment, the

      Company will grant Executive an incentive stock option for the purchase of

      200,000 shares of Kirkland's common stock, with the option price set as

      the closing price for the stock on the date of the award. The option will

      vest over four years based on Executive's continued employment by the

      Company over that period. The remaining terms of this option will be

      determined by the Company's Board and set forth in a separate stock option

      agreement.



<PAGE>



      In addition, provided Executive is still employed in good standing with

      the Company, the Company will, during 2006, grant Executive an additional

      incentive stock option for the purchase of 100,000 shares of Kirkland's

      common stock, with the stock price set as the closing price of the stock

      on the date of the award. The vesting schedule for this option will be the

      same as for the first option, and the remaining terms of this second

      option will be determined by the Company's Board and set forth in a

      separate stock option agreement.



      (c) Health/Life Insurance. Subject to the terms of the Company's group

      health insurance plans and policies from time to time in effect, Executive

      and his dependents are eligible for group health coverage, having such

      benefits as from time to time provided by the Company in its absolute

      discretion, together with the maximum life insurance coverage available

      for senior executives of the Company under such policies (up to such limit

      as from time to time set by the Company in the Company's absolute

      discretion). Executive understands and agrees that it is Executive's

      responsibility to promptly fill out and submit any insurance

      application(s) necessary for such coverage and that the Company has no

      control over any requirement by the insurer for medical "underwriting".

      The Company shall have no liability resulting from denial of coverage by

      the insurer or for the denial of one or more claims thereunder. Executive

      is solely responsible to make valid claims for benefits thereunder in

      order to generate benefits due and owing. Employee shall also be eligible

      to participate in the Company's voluntary life insurance program.



      (d) Company Car or Allowance. Executive shall receive a $600 per month car

      allowance.



      (e) Vacation and Other Benefits. Executive shall have such other benefits

      as from time to time provided by the Company in the Company's absolute

      discretion, including but not limited to paid vacation, and the right to

      participate in the Company's 401(k) plan, deferred compensation plan, and

      Employee Stock Purchase Plan, all on the terms applicable to such

      benefits. Executive is entitled to four (4) weeks of paid vacation in

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