Exhibit 10 (cix)

THE KITCHEN COLLECTION, INC.
LONG-TERM INCENTIVE COMPENSATION PLAN
(Effective as of January 1, 2003)

1. Purpose of the Plan

     The purpose of this January 1, 2003 Long-Term Incentive Compensation Plan
(the “Plan”) is to further the long-term profits and growth of The Kitchen
Collection, Inc. (the “Company”) by enabling the Company to attract and retain
key management employees by offering long-term incentive compensation to those
officers and key management employees who will be in a position to make
significant contributions to such profits and growth. This incentive is in
addition to annual compensation and is intended to reflect growth in the value
of the Company’s stockholders’ equity.

2. Definitions

     (a) “Award” shall mean an award of Book Value Units granted to a
Participant under this Plan for an Award Year in an amount determined pursuant
to a formula which is established by the Committee not later than the 90th
calendar day of the Award Year. Notwithstanding the foregoing, for the 2003
Award Year, such formula shall be established by the Committee prior to or as
soon as practicable following the adoption of the Plan.

     (b) “Award Units” shall mean Book Value Units which are issued pursuant to,
and with such restrictions as are imposed by, the terms of this Plan.

     (c) “Award Unit Price” as to any Book Value Unit shall mean the Book Value
on the Quarter Date coincident with or immediately preceding the Grant Date of
the Award.

     (d) “Award Year” shall mean the calendar year on which an Award is based.

     (e) “Beneficiary” shall mean the person(s) designated in writing (on a form
acceptable to the Committee) to receive the payment of all or part of an Award
hereunder in the event of the death of a Participant. In the absence of such a
designation and at anytime when there is no existing Beneficiary hereunder, a
Participant’s Beneficiary shall be his surviving Spouse or, if none, his estate.

     (f) “Book Value” as to any Book Value Unit shall mean an amount determined
by the Committee or, if no amount is set by the Committee, as of any date
(i) the stockholders’ equity (as

 

--------------------------------------------------------------------------------

 

determined in accordance with generally accepted accounting principles, applied
on a consistent basis) allocable to the Common Stock of the Company, as set
forth on the balance sheet of the Company as of the Quarter Date coincident with
or immediately preceding such date, divided by (ii) the number of Notional
Shares existing as of such Quarter Date; provided, however, that Book Value
and/or the number of Notional Shares may be adjusted to such an extent as may be
determined by the Committee to preserve the benefit of the arrangement for
holders of Book Value Units and the Company, if in the opinion of the Committee,
after consultation with the Company’s independent public accountants, changes in
the Company’s accounting policies, acquisitions or other unusual or
extraordinary items have materially affected the stockholders’ equity allocable
to the Notional Shares.

     (g) “Book Value Unit” or “Unit” shall mean a right granted pursuant to the
terms and conditions set forth in Section 5.

     (h) “Committee” shall mean the Nominating, Organization and Compensation
Committee of the Company’s Board of Directors or any other committee appointed
by the Company’s Board of Directors to administer this Plan in accordance with
Section 3.

     (i) “Grant Date” shall mean the effective date of an Award, as determined
under Section 5(b)(ii) of the Plan.

     (j) “Guidelines” shall mean the annual guidelines that are approved by the
Committee for the administration of the Awards granted under the Plan. To the
extent that there is any inconsistency between the Guidelines and the Plan, the
Guidelines shall control.

     (k) “Hay Salary Grade” shall mean the salary grade or points assigned to a
Participant by the Company pursuant to the Hay Salary System, or any successor
salary system subsequently adopted by the Company.

     (l) “Notional Shares” shall mean the number of assumed shares of Common
Stock of the Company as determined by the Committee from time to time in order
to implement the purposes of the Plan, and shall equal one million shares on the
effective date described in Section 10 hereof.

     (m) “Participant” shall mean any person who meets the eligibility criteria
set forth in Section 4 and who is granted an Award under the Plan.

     (n) “Quarter Date” shall mean the last business day of each calendar
quarter.

 

--------------------------------------------------------------------------------

 

     (o) “Retirement” or “Retire” shall mean the termination of a Participant’s
employment with the Company after the Participant has reached age 60 and
completed at least 15 years of service.

     (p) “Target Award” shall mean the dollar value of the Award to be paid to a
Participant under the Plan assuming that the performance targets are met.

3. Administration

     This Plan shall be administered by the Committee. The Committee shall have
complete authority to interpret all provisions of this Plan consistent with law,
to prescribe the form of any instrument evidencing any Award granted under this
Plan, to adopt, amend and rescind general and special rules and regulations for
its administration (including, without limitation, the Guidelines), and to make
all other determinations necessary or advisable for the administration of this
Plan. A majority of the Committee shall constitute a quorum, and the action of
members of the Committee present at any meeting at which a quorum is present, or
acts unanimously approved in writing, shall be the act of the Committee. All
acts and decisions of the Committee with respect to any questions arising in
connection with the administration and interpretation of this Plan, including
the severability of any or all of the provisions hereof, shall be conclusive,
final and binding upon the Company and all present and former Participants, all
other employees of the Company, and their respective descendants, successors and
assigns. No member of the Committee shall be liable for any such act or decision
made in good faith.

4. Eligibility

     Any person who is classified by the Company as a salaried employee of the
Company generally with Hay points of 800 or above (or a compensation level
equivalent thereto), who in the judgment of the Committee occupies an officer or
other key management position in which his efforts may significantly contribute
to the profits or growth of the Company, may be awarded Book Value Units;
provided, however, that (a) directors of the Company who are not classified as
salaried employees of the Company and (b) leased employees (as such term is
defined in Section 414 of the Internal Revenue Code (the “Code”)) shall not be
eligible to participate in the Plan. A person who satisfies the requirements of
this Section 4 shall become a Participant in the Plan when granted an Award
hereunder.

 

--------------------------------------------------------------------------------

 

5. Granting of Awards

     The Committee may, from time to time and upon such conditions as it may
determine, authorize the granting of Awards to Participants, which shall be not
inconsistent with, and shall be subject to all of the requirements of, the
following provisions:

     (a) Not later than the ninetieth day of each Award Year (or as soon as
practicable after the date of the adoption of the Plan, if later), the Committee
shall approve (i) a Target Award to be granted to each Participant for such Year
and (ii) a formula for determining the amount of each Award, which formula is
based upon the Company’s average return on total capital employed for such Year.

     (b) Effective during April of the calendar year following the Award Year,
the Committee shall approve:

          (i) a preliminary calculation of the amount of each Award based upon
the application of the formula (as in effect at the calculation date) and actual
performance to the Target Awards previously determined in accordance with
Section 5(a); and

          (ii) a final calculation of the amount of each Award to be granted to
each Participant for the Award Year, which amount shall be not greater than the
amount determined in accordance with Section 5(b)(i) (the “Grant Date” of such
Award being January 1st of the calendar year following the Award Year). The
Committee shall have the power to increase or decrease the amount of any Award
above or below the amount determined in accordance with Section 5(b)(i);
provided, however, no Award, including any Award equal to the Target Award,
shall be payable under the Plan to any Participant except as determined by the
Committee.

     (c) Calculations of Target Awards shall initially be based on a
Participant’s Hay Salary Grade as of January 1 of the Award Year. However (i) if
a Participant receives a change in Hay Salary Grade, salary midpoint and/or
long-term incentive compensation target percentage, such change will be
reflected in a pro-rata Target Award and (ii) employees hired into or promoted
to a position eligible to participate in the Plan (as specified in Section 4
above) during an Award Year will, if designated as a Plan Participant by the
Committee, be assigned a pro-rated Target Award based on their length of service
during an Award Year. In order to be eligible to receive an Award for an Award
Year, the Participant must be employed by the Company and must be a Participant
on December 31 of the Award Year; provided, however, that if a Participant dies,
becomes disabled or Retires during the Award Year, the

 

--------------------------------------------------------------------------------

 

Participant shall be entitled to a pro-rata portion of the Award for such Award
Year, based on the number of days the Participant was actually employed by the
Company during the Award Term.

     (d) Each Award shall be granted in the form of Book Value Units. The number
of Book Value Units to be issued to a Participant shall be determined by
dividing the amount of the Award by the Award Unit Price. Notwithstanding any
other provision of the Plan, the maximum cash value of the Awards granted to a
Participant under this Plan in a single year shall not exceed $250,000.

     (e) Multiple Awards may be granted to a Participant; provided, however,
that no two Awards to a Participant may have identical performance periods

6. Vesting; Payment of Awards

     (a) Vesting. All Book Value Units granted pursuant to an Award hereunder
shall be immediately 100% vested as of the Grant Date.

     (b) Payment Restrictions. Each Award shall provide that the Book Value
Units granted therein shall be subject to a payment restriction in the manner
and to the extent prescribed by the Committee for a period of five years from
the Grant Date, or such other shorter or longer period as may be determined by
the Committee from time to time. Notwithstanding the foregoing, such payment
restrictions shall automatically lapse upon a termination of employment by
reason of death, permanent disability or Retirement. In addition, in the case of
other special circumstances of a Participant who holds Award Units as to which
the payment restrictions have not lapsed, or in case of a termination of the
Plan pursuant to Section 8, the Committee may, in its sole discretion,
accelerate the time at which such payment restrictions will lapse.

     (c) Payment Date/Value. Unless a Participant makes a deferral election
under Subsection (d) of this Section, as soon as practicable following the lapse
of a payment restriction applicable to an Award pursuant to Section 6(b), the
Company shall deliver to the Participant (or, if applicable, his Beneficiary), a
check in full payment of the Book Value Units granted pursuant to such Award.
For participants who terminated employment (for reasons other than death,
permanent disability or Retirement), the value of such Book Value Units shall be
based on the Book Value as of the Quarter Date coincident with or immediately
preceding the date of termination. For Participants who terminated employment
due to death, permanent disability or Retirement, the value of such Book Value
Units shall be based on the Book Value as of the Quarter Date coincident with or
immediately preceding the date on which the payment restriction lapses. There
shall be deducted from each payment under the Plan the amount of any

 

--------------------------------------------------------------------------------

 

tax required by any governmental authority to be withheld and paid over to such
governmental authority for the account of the person entitled to such payment.

     (d) Deferral Option. Prior to the date described in Subsection (c), to the
extent determined by the Committee in its sole and absolute discretion (and
subject to the rules and procedures specified in the Guidelines), a Participant
who is a citizen or resident of the United States may make an irrevocable
election to defer receipt of 100% of the Award granted to him for a particular
Award Year for a period not to exceed ten (10) years from the Grant Date of such
Award. A separate deferral election may be made with respect to each Award
granted under the Plan. The Awards which are subject to such a deferral election
shall continue to be subject to the terms and conditions of this Plan and shall
continue to be valued in accordance with the terms of the Plan until the date of
payment (or further deferral, as described in the following sentence). In
addition, a Participant who is a citizen or resident of the United States and
who has made an irrevocable election to defer the receipt of all of an Award
until exactly ten (10) years from the Grant Date of such Award shall be
permitted (subject to the Committee’s sole and absolute discretion and the rules
and procedures contained in the Guidelines) to make another irrevocable election
to further defer the receipt of 100% of such deferred Award under and into The
Kitchen Collection, Inc. Deferred Compensation Plan for Management Employees
(the “Deferred Compensation Plan”). Deferred Awards payable to an active
employee under this Plan shall be paid to the Participant as soon as practicable
following the payment date previously elected by the Participant and shall be
based on the Book Value as of the Quarter Date coincident with or immediately
preceding such payment date. Deferred Awards which are further deferred into the
Deferred Compensation Plan shall be credited to the Deferred Compensation Plan
as soon as practicable following the 10th anniversary of the Grant Date of such
Award and shall be based on the Book Value as of the Quarter Date coincident
with or immediately preceding such anniversary date. Notwithstanding the
foregoing, any deferral election hereunder shall automatically terminate (and
shall be of no further effect) upon a Participant’s termination of employment
with the Company for any reason (including death or disability) and payment of
all such deferred Awards shall be made as soon as practicable following the date
of the Participant’s termination of employment, based on the Book Value as of
the Quarter Date coincident with or immediately preceding such termination date;
provided, however, that any Awards which are subject to a deferral election at
the time of a Participant’s Retirement shall automatically be deferred under and
into the Deferred Compensation Plan as of the date of the Participant’s
Retirement, with the value of the Book Value Units being based on the Book Value
as of the Quarter Date coincident with or immediately preceding such Retirement
date if

 

--------------------------------------------------------------------------------

 

(and only if) the Participant has a currently-effective payment election
relating to Awards under the Deferred Compensation Plan and is then eligible to
participate in the Deferred Compensation Plan.

7. Assignability

     No Award granted to a Participant under this Plan shall be transferable by
him for any reason whatsoever; provided, however, that upon the death of a
Participant the right to the proceeds of an Award may be transferred to a
Beneficiary.

8. Amendment, Termination and Adjustments

     (a) The Committee, in its sole and absolute discretion, may alter or amend
this Plan from time to time; provided, however, that no such amendment shall,
without the consent of a Participant, affect the amount of any outstanding Award
or any Award Units of such Participant.

     (b) The Committee, in its sole and absolute discretion, may terminate this
Plan in its entirety at any time; provided that, except as provided in this
Subsection, no such termination shall, without the consent of a Participant,
affect the amount of any outstanding Award or any Award Units of such
Participant. Except as otherwise provided in an amendment to the Plan, all
Target Awards and Awards granted prior to any termination of this Plan shall
continue to be subject to the terms of this Plan. Notwithstanding the foregoing,
upon a complete termination of the Plan, the Committee, in its sole and absolute
discretion, shall have the right to change the time of distribution of
Participants’ Award Units under the Plan, including requiring that all such
Award Units be immediately distributed in the form of lump sum cash payments.

     (c) Any amendment or termination of the Plan shall be in the form of a
written instrument executed by an officer of the Company on the order of the
Committee. Such amendment or termination shall become effective as of the date
specified in the instrument or, if no such date is specified, on the date of its
execution.

     (d) The Committee may make or provide for an adjustment in the total number
of Award Units to be issued under this Plan as the Committee in its sole
discretion, exercised in good faith, may determine is equitably required to
reflect (i) any stock dividend, stock split, combination of shares,
recapitalization or any other change in the capital structure of the Company,
(ii) any merger, consolidation, spin-off, split-off, spin-out, split-up,
reorganization, partial or complete liquidation or

 

--------------------------------------------------------------------------------

 

other distribution of assets, issuance of rights or warrants to purchase
securities, or (iii) any other corporate transaction or event having an effect
similar to any of the foregoing.

9. General Provisions

     (a) No Right of Employment. Neither the adoption or operation of this Plan,
nor any document describing or referring to this Plan, or any part thereof,
shall confer upon any employee any right to continue in the employ of the
Company, or shall in any way affect the right and power of the Company to
terminate the employment of any employee at any time with or without assigning a
reason therefor to the same extent as the Company might have done if this Plan
had not been adopted.

     (b) Governing Law. The provisions of this Plan shall be governed by and
construed in accordance with the laws of the State of Ohio, except when
preempted by federal law.

     (c) Liability for Payment/Expenses.

     (i) The Company shall be liable for the payment of any Award to or on
behalf of a Participant.

     (ii) Expenses of administering the Plan shall be paid by the Company.

     (d) Limitation on Rights of Participants; No trust.

     (i) No trust has been created by the Company for the payment of Book Value
Units granted under this Plan; nor have the grantees of Book Value Units been
granted any lien on any assets of the Company to secure payment of such
benefits. This Plan represents only an unfunded, unsecured promise to pay by the
Company, and the grantees hereunder are unsecured creditors of the Company.

     (ii) Notwithstanding any provision of the Plan to the contrary, the Company
shall not be required to make any payment hereunder to any Participant or
Beneficiary if the Company is “Insolvent” at the time such payment is due to be
made. For purposes of the Plan, the Company shall be considered Insolvent at
such time as it is unable to pay its debts as they mature or is subject to a
pending voluntary or involuntary proceeding as a debtor under the United States
Bankruptcy Code (or similar foreign law).

     (e) Payment to Guardian. If an Award is payable to a minor, to a person
declared incompetent or to a person incapable of handling the disposition of his
property, the Committee may direct payment of

 

--------------------------------------------------------------------------------

 

such Award to the guardian, legal representative or person having the care and
custody of such minor, incompetent or person. The Committee may require such
proof of incompetency, minority, incapacity or guardianship as it may deem
appropriate prior to the distribution of such Award. Such distribution shall
completely discharge the Company and the Subsidiaries from all liability with
respect to such Award.

     (f) Miscellaneous. Headings are given to the sections of this Plan solely
as a convenience to facilitate reference. Such headings, numbering and
paragraphing shall not in any case be deemed in any way material or relevant to
the construction of this Plan or any provisions thereof. The use of the
masculine gender shall also include within its meaning the feminine. The use of
the singular shall also include within its meaning the plural, and vice versa.

10. Effective Date

     The effective date of this Plan is as of January 1, 2003.

              THE KITCHEN COLLECTION, INC.
 
       

  By:   /s/ Charles A. Bittenbender

       

      Title: Assistant Secretary
 
       

  Date:   4/4/03