SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report ( Date of Earliest Event Reported ): May 9, 2006

KIRKLAND’S, INC.

(Exact Name of Issuer as Specified in Charter)

Tennessee		000-49885		62-1287151
(State or Other Jurisdiction		(Commission File Number)		(I.R.S. Employer
of Incorporation or				Identification
Organization)				Number)

805 North Parkway
Jackson, Tennessee 38305
(Address of Principal Executive Offices)

(731) 668-2444
(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

Item 1.01 Entry into a Material Definitive Agreement.

     2005 Executive Officer Bonuses

     On May 9, 2006 our Board of Directors reviewed the achievement of personal performance goals for fiscal 2005 with respect to our executive officers. Following the recommendation of the Compensation Committee, the Board determined that certain executive officers had achieved their personal performance goals so as to entitle them to a portion of their total bonus potential under their respective employment agreements. Based on that review, the Board approved the following annual bonuses for fiscal 2005 for the executive officers named below:

Executive Officer		Fiscal 2005 Bonus
Robert E. Alderson, Chief Executive Officer		$	30,000
Reynolds C. Faulkner, Executive Vice President and Chief Financial Officer (until April 30, 2006)		$	30,000
Dwayne F. Cochran, Executive Vice President and Director of Stores		$	30,000

     Executive Officer Option Grants

     Also on May 9, 2006, following the recommendation of the Compensation Committee, the Board approved option grants to the following executives, in the following amounts, with an exercise price equal to the closing price of our stock on the grant date:

Executive Officer		Option Grant
Robert E. Alderson, Chief Executive Officer		50,000 shares
Catherine A. David, President and Chief Operating Officer			(1	)
Michael Madden, Vice President and Chief Financial Officer		20,000 shares
Dwayne F. Cochran,
Executive Vice President and Director of Stores		25,000 shares

     2006 Executive Officer Bonus Plan

     Also on May 9, 2006, following the recommendation of the Compensation Committee, the Board approved a management bonus plan for fiscal 2006, including the financial criteria and range of potential bonus payments for each participant. Except to the extent otherwise indicated in the chart below, the opportunity for the executive officers to earn a bonus for fiscal 2006 depends on the achievement by the Company of a specified level of earnings per share in fiscal 2006 (the “financial goal”). No financial goal-based bonus will be earned unless the Company achieves at least 85% of the financial goal, and the target bonus amount is earned if the financial goal is achieved at the 100% level, with a pro rata entitlement between those two points. The executive officers have the opportunity to earn up to 150% of the target bonus level if the financial goal is achieved at the 125% level. The percentage of each executive officer’s base salary which may be earned at the target financial goal level is set forth in the chart below:

Executive Officer	Target Bonus Amount as a Percentage of Base Salary
Robert E. Alderson, Chief Executive Officer			100	%
Catherine A. David, President and Chief Operating Officer			100	%
Dwayne F. Cochran, Executive Vice President and Director of Stores			100	%(2)
Michael Madden, Vice President and Chief Financial Officer			50	%

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.