EXHIBIT 10.2





                              Amended and Restated

                              EMPLOYMENT AGREEMENT

                                     between

                            WKI HOLDING COMPANY, INC.

                                       and

                                DOUGLAS S. ARNOLD





<PAGE>
                              EMPLOYMENT AGREEMENT
                              --------------------

                                    Recitals
                                    --------


     WHEREAS, Douglas S. Arnold ("Executive") entered into an Employment
                                  ---------
Agreement (the "Employment Agreement") with WKI Holding Company, Inc. (the
"Company") which was effective on February 10, 2003 (the "Prior Agreement"); and

     WHEREAS, the Company desires to continue to employ Executive to serve as
the Vice President of Human Resources of the Company, upon the terms and subject
to the conditions set forth in this Agreement (the "Agreement") which shall be
effective on the date it is executed (the "Agreement Date"); and

     WHEREAS, the Company and Executive further agree and acknowledge that the
terms of this Agreement supersede and completely replace the terms of the Prior
Agreement as of the Agreement Date and the Prior Agreement is null and void as
of the Agreement Date.

     NOW, THEREFORE, in consideration of the premises (which are deemed to be an
integral part of this Agreement) and the mutual covenants, representations,
warranties and agreements contained herein, the Company and Executive hereby
agree as follows:

                           Article I.     DEFINITIONS

     The terms set forth below have the following meanings (such meanings to be
applicable to both the singular and plural forms, except where otherwise
expressly indicated):

     1.1     "Accrued Annual Bonus" means the amount of any Annual Bonus earned
              --------------------
     but not yet paid with respect to the Fiscal Year ended prior to the Date of
     Termination.

     1.2     "Accrued Base Salary" means the amount of Executive's Base Salary
              -------------------
     which is earned but not yet paid as of the Date of Termination.

     1.3     "Agreement" is defined in the Recitals to this Agreement.
              ---------

     1.4     "Agreement Date" is defined in the Recitals to this Agreement.
              --------------

     1.5     "Anniversary Date" means any annual anniversary of the Agreement
              ----------------
     Date or the Employment Date, as applicable.

     1.6     "Annual Bonus" is defined in Section 4.2(a).
              ------------

     1.7     "Base Salary" is defined in Section 4.1.
              -----------

     1.8     "Beneficiary" is defined in Section 8.9.
              -----------

     1.9     "Cause" means any of the following:
              -----

            (a) Executive's commission of a misdemeanor involving fraud,
            dishonesty, or moral turpitude, or of a felony,


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            (b) Executive's willful or intentional material breach of his
            material obligations under this Agreement; provided that such
            misconduct is not cured to the best of Executive's ability within
            ten (10) business days after the delivery of notice to Executive of
            such misconduct,

            (c) willful or intentional material misconduct by Executive in the
            performance of his duties under this Agreement, or

            (d) the willful or intentional failure by Executive to materially
            comply (to the best of his ability) with a specific, written
            direction of the Chief Executive Officer of the Company that is not
            inconsistent with this Agreement and Executive's responsibilities
            hereunder, provided that such refusal or failure (i) is not cured to
            the best of Executive's ability within ten (10) business days after
            the delivery of such direction to Executive and (ii) is not based on
            Executive's good faith belief, as expressed by written notice to the
            Chief Executive Officer of the Company given within such ten (10)
            business day period, that the implementation of such direction of
            the Chief Executive Officer of the Company would be unlawful or
            unethical.

     1.10     "Change of Control" means any one or more of the following events:
               -----------------

            (a) any person (as such term is used in Rule 13d-5 under the
            Exchange Act) or group (as such term is defined in Sections 3(a)(9)
            and 13(d)(3) of the Exchange Act), other than any Subsidiary or any
            employee benefit plan (or any related trust) of the Company or any
            of its Subsidiaries, becomes the beneficial owner in the aggregate
            of more than thirty-five percent (35%) of the Voting Securities;

            (b) individuals who constitute the initial board of directors of the
            Company as of January 31, 2003 (the "Reorganized Incumbent Board")
                                                 ---------------------------
            cease for any reason to constitute more than sixty-six and
            two-thirds percent (66-2/3%) of the members of the board of
            directors of the Company; provided that any individual who becomes a
            director after January 31, 2003 whose election or nomination for
            election by the Company shareholders, was approved by more than
            sixty-six and two-thirds percent (66-2/3%) of the members of the
            Reorganized Incumbent Board (other than an election or nomination of
            an individual whose initial assumption of office is in connection
            with an actual or threatened "election contest" relating to the
            election of the directors of the Company (as such terms are used in
            Rule 14a-11 under the Exchange Act), "tender offer" (as such term is
            used in Section 14(d) of the Exchange Act) or a proposed Merger (as
            defined below in clause (c) of this Section 1.10)) shall be deemed
            to be members of the Reorganized Incumbent Board;

            (c) consummation of a merger, reorganization, consolidation, or
            similar transaction (any of the foregoing, a "Merger") unless the
                                                          ------
            Persons who were the beneficial owners of the Voting Securities
            immediately before such Merger, are the beneficial owners,
            immediately after such Merger, directly or indirectly, in the
            aggregate, of more than sixty percent (60%) of the common stock and
            any other voting securities of the entity resulting from such Merger


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            in substantially the same relative proportions as they owned the
            Voting Securities immediately before the Merger;

            (d) consummation of a transfer or sale of all or substantially all
            of the assets of the Company or World Kitchen, Inc. (a "Sale")
                                                                    ----
            unless the Persons who were the beneficial owners of the Voting
            Securities immediately before such Sale, are the beneficial owners,
            immediately after such Sale, directly or indirectly, in the
            aggregate, of more than sixty percent (60%) of the common stock and
            any other voting securities of the entity or entities that own such
            assets immediately after the Sale; or

            (e) The board of directors of the Company or the shareholders of the
            Company, as applicable, approve a plan of liquidation of the Company
            or World Kitchen, Inc.

     Notwithstanding the foregoing, there shall not be a Change of Control if,
     in advance of (or subsequent to) such event, Executive, in his sole
     discretion, agrees in writing that such event shall not constitute a Change
     of Control. For purposes of this definition of Change of Control, entry
     into and performance of the Stockholder's Agreement entered into by and
     among the Company and certain of its stockholders dated as of January 31,
     2003 (as the same may be amended from time to time) shall not constitute
     any Person as a member of a group with any other Person.

     1.11     "Code" means the Internal Revenue Code of 1986, as amended from
               ----
     time to time.

     1.12     "Compensation Committee" means the compensation committee of the
               ----------------------
     WKI Board, composed exclusively of non-employee directors.

     1.13     "Date of Termination" means the effective date of a Termination of
               -------------------
     Employment for any reason, including death or Disability, whether by the
     Company or by Executive.

     1.14     "Disability" means a mental or physical condition which renders
               ----------
     Executive unable or incompetent to carry out the material job
     responsibilities which Executive held or the material duties to which
     Executive was assigned at the time the disability was incurred, which has
     existed for at least three (3) calendar months and which in the opinion of
     a physician mutually agreed upon by the Company and Executive (provided
     that the parties shall not unreasonably withhold such agreement) is
     expected to be permanent or to last for an indefinite duration or a
     duration in excess of six (6) calendar months.

     1.15     "Employment Period" is defined in Article III.
               -----------------

     1.16     "Equity Plan" means the WKI Holding Company, Inc. Stock Option
               -----------
     Plan.

     1.17     "Exchange Act" means the United States Securities Exchange Act of
               ------------
     1934, as amended, or any federal statute or statutes which shall be enacted
     to take its place, together with all rules and regulations promulgated
     thereunder.


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     1.18     "Excise Tax" means the excise tax imposed by Section 4999 of the
               ----------
     Code, together with any interest or penalties imposed with respect to such
     excise tax.

     1.19     "Executive" is defined in the Recitals to this Agreement.
               ---------

     1.20     "Fiscal Year" means the calendar year period beginning each
               -----------
     January 1 and ending each December 31.

     1.21     "Good Reason" means the occurrence of any one of the following
               -----------
     events:

            (a) any material breach of the Agreement by the Company (or by World
            Kitchen, Inc. under Section 8.5 hereof) of any material obligation
            under this Agreement, including any of the following occurrences
            which shall be deemed to constitute a material breach of a material
            obligation:

               (i)    failure to pay Base Salary as required by Section 4.1 or
            Annual Bonus as required by Section 4.2;

               (ii)    failure to pay or provide material benefits under
            Articles V or VI of this Agreement, including, without limitation,
            the failure to comply with the provisions of the Long-Term Incentive
            Compensation Plan or any applicable Guidelines as are adopted by the
            Committee relating thereto; or

               (iii)    any substantial adverse change in the position,
            responsibilities, and duties of Executive as compared to Executive's
            position, responsibilities and duties as set forth in Section 2.1,

            (b) the failure of the Company to assign this Agreement to a
            successor, as applicable, or the failure of such successor to
            explicitly assume and agree to be bound by this Agreement.

     Notwithstanding the foregoing, none of the foregoing events shall
constitute a "Good Reason" event if, in advance of (or subsequent to) such
event, Executive, in his sole discretion, agrees in writing that such event
shall not constitute a "Good Reason" event within the meaning of this Agreement.

     1.22     "Guidelines" shall have the meaning set forth in the Long-Term
               ----------
     Incentive Plan.

     1.23     "including" means including without limitation.
               ---------

     1.24     "Interest Rate" means the prime commercial lending rate announced
               -------------
     by JPMorgan Chase Bank or its successor on the date an amount is to be
     determined hereunder or, if no such rate shall be announced on such date,
     the immediately prior date on which JPMorgan Chase Bank or its successor
     announced such a rate; provided, however, that if the interest rate
     determined in accordance with this Section 1.22 exceeds the highest legally
     permissible interest rate, then the Interest Rate shall be the highest
     legally-permissible interest rate.


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     1.25     "Long-Term Incentive Plan" means the WKI Holding Company, Inc.
               ------------------------
     Long-Term Incentive Plan effective as of May 29, 2003, as in effect from
     time to time.

     1.26     "Maximum Annual Bonus" is defined in Section 4.2(b).
               --------------------

     1.27     "Maximum Annual Goals" is defined in Section 4.2(b).
               --------------------

     1.28     "Maximum Percentage" is defined in Section 4.2(b).
               ------------------

     1.29     "Payment" shall mean any payment or distribution in the nature of
               -------
     compensation (within the meaning of Section 280G(b)(2) of the Code) to or
     for the benefit of Executive, whether paid or payable pursuant to this
     Agreement or otherwise.

     1.30     "Person" means any individual, sole proprietorship, partnership,
               ------
     joint venture, trust, unincorporated organization, association,
     corporation, institution, public benefit corporation, entity or government
     instrumentality, division, agency, body or department.

     1.31     "Prorata Annual Bonus" means (a) the product of the Target Annual
               --------------------
     Bonus for the Fiscal Year that includes the Date of Termination multiplied
     by (b) a fraction, the numerator of which is the number of days which have
     elapsed in the Fiscal Year through the Date of Termination and the
     denominator of which is 365.

     1.32     "Severance Period" means two (2) years from the Date of
               ----------------
     Termination.

     1.33     "Stock" means the shares of common stock, par value $0.01 per
               -----
     share, of the Company.

     1.34     "Subsidiary" means, with respect to any Person, (a) any
               ----------
     corporation of which more than fifty percent (50%) of the outstanding
     capital stock having ordinary voting power to elect a majority of the board
     of directors of such corporation (irrespective of whether, at the time,
     stock of any other class or classes of such corporation shall have or might
     have voting power by reason of the happening of any contingency) is at the
     time, directly or indirectly, owned by such Person, or (b) any partnership,
     limited liability company or other entity in which such Person has a direct
     or indirect interest (whether in the form of voting or participation in
     profits or capital contribution) of more than fifty percent (50%).

     1.35     "Target Annual Bonus" is defined in Section 4.2(b).
               -------------------

     1.36     "Target Annual Goals" is defined in Section 4.2(b).
               -------------------

     1.37     "Target Percentage" is defined in Section 4.2(b).
               -----------------

     1.38     "Taxes" means the incremental United States federal, state and
               -----
     local income, excise and other taxes payable by Executive with respect to
     any applicable item of income.

     1.39     "Termination for Cause" means a termination of the employment of
               ---------------------
     the Executive by the Company for Cause during the Employment Period.


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     1.40      "Termination for Good Reason" means a Termination of Employment
                ---------------------------
     by Executive for a Good Reason during the Employment Period.

     1.41     "Termination of Employment" means a termination by the Company or
               -------------------------
     by Executive of Executive's employment by the Company.

     1.42     "Termination Without Cause" means a termination of Executive by
               -------------------------
     the Company for any reason other than Cause or Executive's death or
     Disability during the Employment Period.

     1.43     "Voting Securities" means any of the securities of the Company
               -----------------
     entitled to vote generally in the election of the directors of the Company.

     1.44     "WKI Board" means the board of directors of the Company.
               ---------

                  Article II.     POSITION AND RESPONSIBILITIES

     2.1     Duties.  During the Employment Period, the Company shall employ the
             ------
     Executive as its Vice President of Human Resources. Executive shall be
     responsible for such functions and operations as assigned to him from time
     to time by the Chief Executive Officer of the Company. Executive shall
     report on all functions and operations within the scope of his
     responsibilities to the Chief Executive Officer of the Company. During the
     Employment Period, and excluding any periods of disability, vacation, or
     sick leave to which Executive is entitled, Executive agrees to devote his
     full attention and time to the business and affairs of the Company and the
     Subsidiaries.

     2.2     Other Activities.  Executive may serve on corporate, civic or
             ----------------
     charitable boards or committees, deliver lectures, fulfill speaking
     engagements or teach at educational institutions, or manage personal
     investments, provided that such activities do not individually or in the
     aggregate materially interfere with the performance of Executive's duties
     under this Agreement.

                       Article III.     EMPLOYMENT PERIOD

     3.1     Employment Period.
             -----------------

            (a) Subject to the termination provisions hereinafter provided, the
            initial term of Executive's employment under this Agreement (the
            "Employment Period") shall commence on February 10, 2003 (the
             -----------------
            "Employment Date") and end on the Anniversary Date which is three
            (3) years after the Employment Date (the "Initial Term"); provided,
                                                      ------------
            however, that as of the date that is six (6) months before the end
            of the Initial Term, the Employment Period will automatically be
            extended through the Anniversary Date that is five years after the
            Employment Date, unless one party has previously provided the other
            with a notice that such extension shall not take place (a "Notice of
            Non-Extension"). The period from the end of the Initial Term through
            such fifth Anniversary Date is referred to as the "Extension
            Period". The Initial Term and the Extension Period shall
            collectively be referred to herein as the "Employment Period."


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            (b) Notwithstanding the foregoing, (i) if either party timely
            delivers a written Notice of Non-Extension to the other in
            accordance with the provisions of Subsection (a) hereof, this
            Agreement and the Employment Period shall automatically terminate at
            the end of the Initial Term and (ii) this Agreement and the
            Employment Period shall automatically terminate at the end of the
            Employment Period, subject to Executive's rights as set forth in
            Section 7.

                          Article IV.     COMPENSATION

     4.1     Salary.  The Company shall pay Executive in accordance with the
             ------
     normal payroll practices of the Company an annual salary at a rate of
     $275,000 per year ("Base Salary"). During the Employment Period, the Base
                         -----------
     Salary shall be reviewed at least annually and may be increased (but not
     decreased) from time to time as shall be determined by the WKI Board or the
     Compensation Committee. Any increase in Base Salary shall not limit or
     reduce any other obligation of the Company to Executive under this
     Agreement. Each such increase in the Base Salary shall be treated for all
     purposes of this Agreement as Executive's Base Salary. Base Salary shall
     not be decreased at any time without the express written consent of
     Executive.

     4.2     Annual Bonus.
             ------------

            (a) Executive shall be eligible to earn an annual cash bonus
            ("Annual Bonus") in accordance with the terms hereof for each Fiscal
              ------------
            Year which begins during the Employment Period.

            (b) The WKI Board or the Compensation Committee, as applicable,
            (collectively, the "Board or Committee") shall establish written
                                ------------------
            performance goals, the achievement of which will determine the
            amount of the Executive's annual bonuses for the 2003 Fiscal Year
            and later Fiscal Years that end during the Employment Period. In the
            case of the 2003 Fiscal Year, performance goals shall be set by the
            Board or Committee as soon as practicable after the Agreement Date.
            Performance goals for other Fiscal Years shall be established
            annually by the Board or Committee, after consultation with the
            Executive, within ninety (90) calendar days after the first day of
            the applicable Fiscal Year. If Executive achieves the target level
            of such performance goals (the "Target Annual Goals"), as determined
                                            -------------------
            by the Board or Committee, his Annual Bonus for that Fiscal year
            shall be equal to fifty percent (50%) (the "Target Percentage") of
                                                        -----------------
            Executive's Base Salary (the "Target Annual Bonus"). If Executive
                                          -------------------
            achieves the maximum level of such performance goals ("Maximum
                                                                   -------
            Annual Goals") for any such Fiscal Year, as determined by the Board
            ------------
            or Committee, his Annual Bonus for that Fiscal Year shall be one
            hundred percent (100%) (the "Maximum Percentage") of Executive's
                                         ------------------
            Base Salary (the "Maximum Annual Bonus"). The Annual Bonus for any
                              --------------------
            Fiscal Year may exceed the Maximum Annual Bonus at the discretion of
            the Board or Committee. The Target Percentage and the Maximum
            Percentage may be increased by the Board or Committee, from time to
            time, but may not be decreased below the above specified percentages
            of Executive's Base Salary without the express written consent of
            Executive. If Executive achieves a level of performance which falls


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            between the Target Annual Goals and the Maximum Annual Goals, linear
            interpolation shall be applied to determine Executive's Annual Bonus
            for such year. Notwithstanding the foregoing, for the 2003 Fiscal
            Year, Executive's Target Annual Bonus shall be equal to fifty
            percent (50%) of Executive's Base Salary (or $137,500). Executive
            shall be guaranteed an Annual Bonus for the 2003 Fiscal Year of not
            less than $68,750, provided he remains actively employed by the
            Company through December 31, 2003.

            (c) Except as described in the following sentence, the Company shall
            pay the entire Annual Bonus that is payable with respect to a Fiscal
            Year in a lump sum cash payment as soon as practicable after the
            Board or Committee determines whether and the degree to which
            Maximum Annual Goals or Target Annual Goals have been achieved
            following the close of such Fiscal Year. Any such Annual Bonus shall
            in any event be determined and paid within ninety (90) calendar days
            after the end of the Fiscal Year; provided, however, that the
            guaranteed $68,750 Annual Bonus for the 2003 Fiscal Year shall be
            paid on January 2, 2004.

     4.3     Hiring Bonus.  The Company shall pay the Executive a hiring bonus
             ------------
     in the amount of $30,000, payable as soon as practicable following the
     Employment Date.

                   Article V.     PARTICIPATION IN EQUITY PLAN

     5.1     Executive and the Company entered into a stock option agreement
     pursuant to which Executive was granted an option to purchase 30,000 shares
     of Stock at a price of $18.25 per share under the terms of the Equity Plan.
     Executive acknowledges and agrees that this stock option grant fully
     satisfies any and all obligations of the Company under the Prior Agreement
     with respect to Executive's participation in the Equity Plan.

     5.2     In the event of a conflict between this Agreement and the Equity
     Plan, the provisions of the Equity Plan shall control, including, without
     limitation, all provisions pertaining to Executive's rights under the
     Equity Plan in the event of a Change of Control or a Termination of
     Employment.

                    Article VI.     BENEFITS AND PERQUISITES

     6.1    Benefit Plans and Perquisites.
            -----------------------------

            (a) During the Employment Period, Executive shall be entitled to
            participate in the welfare benefit plans and programs and
            perquisites of the Company on terms not less favorable than those in
            effect for other senior executives of the Company from time to time;
            provided, that Executive shall not be covered by any severance plan,
            program or policy during the Employment Period.

            (b) During the Employment Period, Executive shall be entitled to
            participate in the retirement and savings benefit plans and programs
            of the Company on terms not less favorable than those in effect for
            other senior executives of the Company from time to time.

            (c) Without limiting the generality of the foregoing, during the
            Employment Period, Executive shall receive a cash benefits allowance


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            of $35,000 per year, which amount shall be paid (in arrears) no
            later than January 31 of the following year.

            (d) During the Employment Period, Executive shall also be entitled
            to participate in the Long-Term Incentive Plan or such other plan or
            program sponsored by the Company providing deferred compensation or
            retirement benefits, as in effect from time to time.

     6.2     Expenses.  During the Employment Period, Executive shall be
             --------
     entitled to receive prompt reimbursement for all reasonable
     employment-related expenses incurred by Executive upon the receipt by the
     Company of an accounting for such expenses in accordance with the
     practices, policies and procedures applicable to other senior executives of
     the Company.

     6.3     Office; Support Staff.  During the Employment Period, Executive
             ---------------------
     shall be entitled to an office, and to secretarial and other assistance,
     appropriate to his position and duties under this Agreement.

                      Article VII.     TERMINATION BENEFITS

     7.1     Termination for Other Than for Good Reason, Death or Disability, or
             -------------------------------------------------------------------
     At or After End of Employment Term.
     ----------------------------------

            (a) If Executive terminates his employment during the Employment
            Term other than for Good Reason, death or Disability, the Company
            shall pay to Executive as soon as reasonably possible but in no
            event later than thirty (30) calendar days after the Date of
            Termination an amount equal to the sum of Executive's Accrued Base
            Salary and Accrued Annual Bonus. The respective provisions of the
            Equity Plan, the Long-Term Incentive Plan and any other benefit
            plans and perquisite programs in which Executive participates shall
            govern whether Executive shall be entitled to any benefits
            thereunder in the event his employment is terminated under the
            foregoing circumstances.

            (b) If the Executive's employment is terminated at or after the end
            of the Employment Period for any reason (whether by Executive or the
            Company), including, without limitation, by virtue of the Company
            providing a Notice of Non-Extension to the Executive, (i) the
            Company shall pay to Executive as soon as reasonably possible but in
            no event later than thirty (30) calendar days after the Date of
            Termination an amount equal to the sum of Executive's Accrued Base
            Salary and Accrued Annual Bonus and (ii) the respective provisions
            of the Equity Plan, the Long-Term Incentive Plan and any other
            benefit plans and perquisite programs in which Executive
            participates shall govern whether Executive shall be entitled to any
            benefits thereunder in the event his employment is terminated under
            the foregoing circumstances. Notwithstanding the foregoing, in the
            event that the Executive's employment is terminated, for reasons
            other than cause, after the end of the Employment Period under
            circumstances which would otherwise entitle him to receive severance
            benefits under a severance plan or policy of the Company in effect
            as such time, the amount of the Executive's severance pay payable
            under such plan or policy shall in no event be less than one (1)


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            year's Base Salary (as in effect at termination), payable in a lump
            sum in cash within thirty (30) days of the Date of Termination.

     7.2     Termination for Cause.  If the Company terminates Executive's
             ---------------------
     employment for Cause, the Company shall pay to Executive as soon as
     reasonably possible but in no event later than thirty (30) calendar days
     after the Date of Termination an amount equal to the Executive's Accrued
     Base Salary. In addition, the respective provisions of the Equity Plan, the
     Long-Term Incentive Plan and any other benefit plans and perquisite
     programs in which Executive participates shall govern whether Executive
     shall be entitled to any benefits thereunder in the event of a Termination
     for Cause; provided, however, that in no event shall the Executive be
     entitled to receive any Accrued Annual Bonus (or similar payment) in the
     event of a Termination for Cause.

     7.3     Termination for Death or Disability.  If, before the end of the
             -----------------------------------
     Employment Period, Executive's employment terminates due to his death or
     Disability, the Company shall pay to Executive or his Beneficiaries, as the
     case may be, as soon as reasonably possible but in no event later than
     thirty (30) calendar days after the Date of Termination, an amount which is
     equal to the sum of Executive's Accrued Base Salary and Accrued Annual
     Bonus. Further, if the Date of Termination occurs during the period
     commencing from July 1 through December 31 of any Fiscal Year, Executive or
     his Beneficiaries, as the case may be, shall be paid a Prorata Annual Bonus
     as soon as reasonably possible but in no event later than thirty (30)
     calendar days after the Date of Termination. The respective provisions of
     the Equity Plan, the Long-Term Incentive Plan and any other benefit plans
     and perquisite programs in which Executive participates shall govern
     whether Executive or his Beneficiaries, as applicable, shall be entitled to
     any benefits under such plans or programs in the event of a termination of
     Executive's employment for death or Disability.

     7.4    Termination Without Cause or for Good Reason.
            --------------------------------------------

            (a) In the event of a Termination Without Cause or a Termination for
            Good Reason during the Employment Period, Executive shall receive
            the following:

               (i)    as soon as reasonably possible but in no event later than
            thirty (30) calendar days after the Date of Termination, a lump sum
            amount in immediately available funds equal to the sum of
            Executive's Accrued Base Salary and Accrued Annual Bonus;

               (ii)    as soon as reasonably possible but in no event later than
            thirty (30) calendar days after the Date of Termination, a lump sum
            amount in immediately available funds equal to 120% of Executive's
            Base Salary;

               (iii)    if the Date of Termination occurs during the period
            commencing from July 1 through December 31 of any Fiscal Year, as
            soon as reasonably possible but in no event later than thirty (30)
            calendar days after the Date of Termination, a lump sum amount in
            immediately available funds equal to the Prorata Annual Bonus;


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<PAGE>
               (iv)    as soon as reasonably possible but in no event later than
            thirty (30) calendar days after the Date of Termination, a lump sum
            amount in immediately available funds equal to the total amount (if
            any) of Executive's unvested benefits under any plan or program
            sponsored by the Company providing deferred compensation or
            retirement benefits, that are forfeited on account of the
            Termination of Employment, and that would have vested, had
            Executive's employment continued through the end of the Severance
            Period;

               (v)    the provisions of the Equity Plan, the Long-Term Incentive
            Plan and any other benefit plans or perquisite programs in which
            Executive is a participant as of the Date of Termination shall
            govern whether Executive shall be entitled to any benefits under
            such plans or programs in the event of a Termination for Good Reason
            or a Termination Without Cause;

               (vi)    the medical and dental benefits referred to in Section
            6.1(a) to which Executive is entitled as of the Date of Termination
            through the Severance Period; and

               (vii)    as soon as reasonably possible but in no event later
            than thirty (30) calendar days after the Date of Termination, but
            without duplication of the foregoing, a lump sum cash payment equal
            to the present value (determined using the Interest Rate) of the
            amounts payable under Section 6.1(c) for the period from the Date of
            Termination through the Severance Period.

            (b) Executive's Termination of Employment shall not be considered to
            be for Good Reason unless:

               (i)    not more than ninety (90) calendar days after the
            occurrence (or if later, not more than ninety (90) calendar days
            after the Executive becomes aware) of the event or events alleged to
            constitute Good Reason, Executive provides the Company with written
            notice (the "Notice of Good Reason") of his intent to consider the
                         ---------------------
            Termination for Good Reason, including a detailed description of the
            specific reasons which form the basis for such consideration, and
            demanding that such event or events be cured not later than ten (10)
            business days after the Company receives the Notice of Good Reason
            (the "Cure Period");
                  -----------

               (ii)    the Company shall have failed to cure such event or
            events during the Cure Period; and

               (iii)    not more than ninety (90) calendar days following the
            expiration of the Cure Period, Executive shall have given the
            Company a second notice (a "Notice of Termination for Good Reason")
                                        -------------------------------------
            stating that such cure has not occurred and that as a result,
            Executive is terminating his employment for Good Reason on the date
            (after the end of the Cure Period) specified in the Notice of
            Termination for Good Reason. A Notice of Termination for Good Reason
            shall not be based upon any reason or reasons other than one or more
            reasons set forth in the Notice of Good Reason.


                                       11
<PAGE>
                         Article VIII.     MISCELLANEOUS

     8.1     Public Announcement.  Executive shall be given a reasonable
             -------------------
     opportunity to review and comment on any public announcement by the Company
     or any of its Subsidiaries relating to this Agreement or Executive's
     employment by the Company.

     8.2     Approvals.  The Company represents and warrants to Executive that
             ---------
     it has taken all corporate action necessary to authorize and enter into
     this Agreement.

     8.3     No Offset.  The obligations of the Company (and World Kitchen, Inc.
             ---------
     solely for purposes of Section 8.5) to make the payments provided for in
     this Agreement and otherwise to perform their obligations hereunder shall
     not be affected by any circumstances, including set-off, counterclaim,
     recoupment, defense or other claim, right or action which the Company or
     World Kitchen, Inc., as applicable, may have against Executive or others.
     Any claim which the Company or World Kitchen, Inc., as applicable, may have
     against Executive, whether for a breach of this Agreement or otherwise,
     shall be brought in a separate action or proceeding and not as part of any
     action or proceeding brought by Executive to enforce any rights against the
     Company or World Kitchen, Inc. under this Agreement.

     8.4     No Mitigation.  In no event shall Executive be obligated to seek
             -------------
     other employment or to take any other action to mitigate the amounts
     payable to Executive under any of the provisions of this Agreement, nor
     shall the amount of any payment hereunder be reduced by any compensation
     earned as a result of Executive's employment by another employer, except
     that any continued welfare benefits provided for by Section 7.4(a)(vi)
     shall not duplicate any benefits that are provided to Executive and his
     family by such other employer and shall be secondary to any coverage
     provided by such other employer.

     8.5     Guarantee.  World Kitchen, Inc. agrees to guarantee the payment of
             ---------
     all liabilities under this Agreement except amounts which are due and owing
     under the Long-Term Incentive Plan or the Equity Plan, which payments shall
     remain the sole obligation of the Company. World Kitchen, Inc. represents
     and warrants to Executive that it has taken all corporate action necessary
     to authorize and make the foregoing guarantee of payment.

     8.6     Liability Insurance and Indemnification.  The Company shall
             ---------------------------------------
     maintain directors' and officers' liability insurance for Executive while
     employed, and for a six (6) year period following Termination of Employment
     at a level equivalent to the most favorable and protective coverage for any
     active officer or director of the Company. The Company agrees to indemnify
     Executive for any job-related liability to the fullest extent permitted
     under all applicable laws, its by-laws, and all other applicable
     indemnification agreements of the Company and any of its Subsidiaries.

     8.7     Non-Solicitation.  In consideration of the benefits provided
             ----------------
     under this Agreement, Executive hereby agrees to be bound by the provisions
     of this Section. During the Employment Period and for a period of one (1)
     year after termination of employment for any reason, Executive shall not in
     any manner, directly or indirectly, induce or attempt to induce any
     employee of the Company or any Subsidiary or affiliate to quit or abandon
     his or her employment, or any customer, independent contractor, consultant,


                                       12
<PAGE>
     supplier or vendor of the Company Business to quit or abandon its
     relationship for any purpose whatsoever. For purposes of this Section,
     "Company Business" means the development, manufacture or purchase from
     third parties and marketing of consumer bakeware, dinnerware, kitchen and
     household tools, rangetop cookware and cutlery products.

     8.8    Enforcement.
            -----------

            (a) If Executive incurs legal, accounting, expert witness or other
            fees and expenses in an effort to establish, in connection with any
            dispute with the Company, Executive's entitlement to compensation
            and benefits under this Agreement, the Company shall, to the extent
            Executive is successful in, or enters into a settlement with the
            Company in which the Company agrees to resolve, such dispute,
            reimburse Executive for such fees and expenses, to the extent the
            incurrence and amount thereof are reasonable, and shall pay
            Executive a Tax Gross-Up Payment in respect of the Taxes incurred by
            Executive with respect to such reimbursement of fees and expenses.
            The Company shall reimburse Executive for such fees and expenses on
            a monthly basis upon Executive's request for reimbursement
            accompanied by evidence that the fees and expenses were incurred.

            (b) If the Company fails to pay any amount provided under this
            Agreement when due, the Company shall pay interest on such amount at
            a rate equal to the Interest Rate.

     8.9     Beneficiary.  If Executive dies prior to receiving all of the
             -----------
     amounts payable to him in accordance with the terms and conditions of this
     Agreement, such amounts shall be paid to the beneficiary ("Beneficiary")
                                                                -----------
     designated by Executive in writing to the Company during his lifetime, or
     if no such Beneficiary is designated, to Executive's estate. Such payments
     shall be made in a lump sum to the extent so payable and, to the extent not
     payable in a lump sum, in accordance with the terms of this Agreement.
     Executive, without the consent of any prior Beneficiary, may change his
     designation of Beneficiary or Beneficiaries at any time or from time to
     time by submitting to the Company a new designation in writing.

     8.10     Assignment; Successors.  Neither the Company nor World Kitchen,
              ----------------------
     Inc. may assign its rights or obligations under this Agreement without the
     prior written consent of Executive except to any surviving entity following
     a Change of Control that has assumed in writing all of the obligations of
     this Agreement. This Agreement shall be binding upon and inure to the
     benefit of Executive, his estate and Beneficiaries, the Company, World
     Kitchen, Inc. and the successors and permitted assigns of the Company and
     World Kitchen, Inc. Any assignment or attempted assignment in violation of
     this Section 8.10 shall constitute a Good Reason event of termination.

     8.11     Nonalienation.  Except as otherwise expressly provided herein,
              -------------
     benefits payable under this Agreement shall not be subject in any manner to
     anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
     charge, garnishment, execution or levy of any kind, either voluntary or
     involuntary, prior to actually being received by Executive, and any such
     attempt to dispose of any right to benefits payable hereunder shall be
     void.


                                       13
<PAGE>
     8.12     Severability.  If all or any part of this Agreement is declared by
              ------------
     any court or governmental authority to be unlawful or invalid, such
     unlawfulness or invalidity shall not serve to invalidate any portion of
     this Agreement not declared to be unlawful or invalid. Any provision so
     declared to be unlawful or invalid shall, if possible, be construed in a
     manner which will give effect to the terms of such provision to the fullest
     extent possible while remaining lawful and valid.

     8.13     Amendment; Waiver.  This Agreement shall not be amended or
              -----------------
     modified except by written instrument executed by the Company, World
     Kitchen, Inc. and Executive. A waiver of any term, covenant or condition
     contained in this Agreement shall not be deemed a waiver of any other term,
     covenant or condition, and any waiver of any default in any such term,
     covenant or condition shall not be deemed a waiver of any later default
     thereof or of any other term, covenant or condition.

     8.14     Notices.  All notices hereunder shall be in writing and delivered
              -------
     by hand, by nationally-recognized delivery service that guarantees
     overnight delivery, or by first-class, registered or certified mail, return
     receipt requested, postage prepaid, addressed as follows:

          If to the Company, to:

               11911 Freedom Drive
               One Fountain Square
               Reston, Virginia  20190
               Attention:  Chief Executive Officer


          If to Executive, to:

               Douglas S. Arnold
               1635 Greenbriar Drive
               Green Oaks, IL 60048


     The parties may from time to time designate a new address by notice given
     in accordance with this Section 8.14. Notice shall be considered to have
     been given when actually received by the addressee.

     8.15     Counterparts.  This Agreement may be executed in several
              ------------
     counterparts, each of which shall be deemed to be an original but all of
     which together shall constitute one and the same instrument.

     8.16     Entire Agreement.  This Agreement and each of the plans, benefit
              ----------------
     programs and policies in effect from time to time during the Employment
     Period forms the entire agreement between the parties hereto with respect
     to the subject matter contained in the Agreement and in the respective
     plans, benefit programs and policies and shall supersede all prior
     agreements, promises and representations regarding employment,
     compensation, severance or other payments contingent or any other
     obligation of the Company or any of its Subsidiaries upon Termination of
     Employment, whether in writing or otherwise.


                                       14
<PAGE>
     8.17     Applicable Law.  This Agreement shall be interpreted and construed
              --------------
     in accordance with the laws of the State of Delaware, without regard to its
     choice of law principles.

     8.18     Survival of Executive's Rights.  Each of the provisions of this
              ------------------------------
     Agreement which by their terms are to be performed after, or which
     expressly survive, the termination of this Agreement or the Date of
     Termination shall survive the termination of Executive's employment, the
     termination of this Agreement, or both.

     IN  WITNESS  WHEREOF,  the  parties  have  executed  this  Agreement  to be
effective  as  of  last date on which it is executed below (the Agreement Date).

                                 WKI  HOLDING  COMPANY,  INC.


                                 By:      Douglas  Arnold
                                    ------------------------------------
                                 Its:
                                     -----------------------------------
                                 Date:     July  31,  2003
                                      ----------------------------------

                                 WORLD  KITCHEN,  INC.

                                 By:
                                    ------------------------------------
                                 Its:
                                     -----------------------------------
                                 Date:
                                      ----------------------------------

                                 EXECUTIVE:

                                           Douglas Arnold
                                 -------------------------------------
                                 Douglas S. Arnold



                                            July 31, 2003
                                 -------------------------------------
                                 Date


                                       15
<PAGE>