EXHIBIT 10.21

# SEPARATION AGREEMENT AND GENERAL RELEASE

This Separation Agreement and
General Release (Agreement) is entered into between David H. Weiser(you) and Department 56,
Inc. (the Company). Your employment with the Company will end effective January 1, 2005, as further described
below. The Company will provide you with certain benefits in consideration of your signing this Agreement; however, your decision
whether to sign this Agreement will not affect the end of your employment with the Company.

You and the Company agree as
follows:

1.   Separation
from Employment.   Effective November 5, 2004, (the Position Elimination Date), your present
capacity as an officer and/or director of the Company and its subsidiaries will terminate and your role with the Company will
convert to the employee position of Senior Advisor (as defined Section 2(d) below). Your employment as Senior Advisor will
continue from the Position Elimination Date until January 1, 2005, (the Employment Termination Date) at the same rate
of pay and benefits as in effect immediately prior to the Position Elimination Date, except that you shall no longer continue to
accrue any paid time off and all your indoor parking privileges shall cease. Effective as of the Employment Termination Date, your
employment with the Company will fully end. Except as provided in this Agreement, all other benefits and privileges of employment
will cease as of the Employment Termination Date. You agree to continue working for the Company in your present capacity
supporting any transitional efforts that the Company may request, exercising your best efforts, through the Position Elimination
Date and thereafter working in the capacity of a Senior Advisor (as defined Section 2(d) below), and you acknowledge that certain
benefits provided for in this Agreement are contingent upon your willingness to do so.

2.   Payments and Benefits.   In
consideration of your signing this Agreement, the Company will provide the following payments and benefits to you:

| | (a)   The
Company will provide you base salary continuation from January 2, 2005, through November 5, 2005, (the Severance
Period) as severance pay, subject to all required deductions, withholdings, and tax reporting requirements. Payment will be
made to you during this Severance Period according to the Companys normal payroll schedule beginning on the first payroll
period following the Employment Termination Date, provided that you do not revoke or rescind this Agreement.
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| | (b)   During
the Severance Period, you will have the option of continuing to receive the same or substantially similar following benefits, to
the extent such are currently available to you as an employee of the Company and to the extent permitted by law and the governing
plan documents: Group Medical Plan; Group Dental Plan; Group Vision Plan; Healthcare Reimbursement Plan; Dependent Care
Reimbursement Plan; Group Life Insurance; Group AD&D Insurance; Long-Term Disability Income Individual and Group Policies; and
Professional Dues, License and Required Continuing Professional Education Fees (capped at three thousand dollars ($3,000.00)). At
the Companys option, such benefits may be provided either by continuing you in the
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| | Companys existing benefit plans and programs; by
establishing a separate benefit plan or program or by obtaining separate insurance coverage; or by reimbursing you for the cost of
securing the equivalent benefit for yourself. In any event, you shall be required to pay an amount equal to any contribution you
would have had to make to receive the same or substantially similar benefit as an employee of the Company and you shall be
responsible for any individual tax consequences relating to the continuation of these benefits.
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| | (i)   In
order to receive continuation of medical, dental, and vision benefits, you will be required to elect COBRA coverage (a COBRA
notice will be provided to you) and pay each month, by check made out to the Company, an amount equal to the employee contribution
you currently pay for such coverage. The remainder of the COBRA premium will be paid on your behalf by the Company and this amount
shall be imputed as income to you.
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| | (ii)   Your
Long Term Disability Income Group Insurance will be converted by the Company into a trust, with a maximum monthly trust benefit
payable to you of three thousand six hundred ninety dollars ($3,690.00).
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| | (c)   In
addition to the already vested portion of any incentive pay or stock options, you currently hold three thousand two hundred fifty
(3,250) shares of restricted stock scheduled to vest over various dates and three thousand six hundred sixty three (3,663)
unvested stock options scheduled to vest on December 31, 2004. Through the end of the Severance Period, these shares and stock
options will continue to vest according to the schedule established in the original grant, with any unvested portion remaining at
the end of the Severance Period fully vesting at that time. All vested stock options must be exercised by the earlier of the
expiration date in the original stock option grant or twelve (12) months from the end of the Severance Period; otherwise, such
stock options shall be deemed to have expired.
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| | (d)   As
noted above, your role will convert to Senior Advisor as of the Position Elimination Date and your employment will continue in
that new, non-officer and/or director capacity until the Employment Termination Date. As a Senior Advisor, you agree to discuss
matters of Company business on an as needed basis, upon reasonable notice and at the direction of the CEO. Your status
as an employee of the Company in the position of Senior Advisor through the Employment Termination Date will qualify you for the
full year 2004 annual cash incentive bonus at your current 40% target bonus opportunity and for your full year 2004
profit-sharing, in each case payment to be made to the same extent and in the same manner as generally applied to officers of the
Company for 2004.
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| | (e)   The
Company will pay out any accrued paid time off that remains unused as of the Position Elimination Date, up to two (2) weeks.
Please note, however, that your receipt of severance pay and other benefits is contingent upon your willingness to work in your
present capacity up through the Position Elimination Date and as Senior Advisor (as defined Section 2(d)) thereafter up through
the Employment Termination Date, and you
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| | may not satisfy this condition by using accrued paid time off in
lieu of actually working, unless the Company expressly consents.
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| | (f)   The
Company will offer you outplacement services commensurate with your position and experience through the end of the Severance
Period or until you find new employment, whichever comes first.
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You acknowledge that you are
not entitled to the payments and benefits set forth in subsections (a) through (f) above unless you sign this Agreement and do not
revoke or rescind in accordance with Section 5 and that you remain willing to work for the Company in your present capacity up
through the Position Elimination Date and as Senior Advisor (as defined Section 2(d)) thereafter up through the Employment
Termination Date, or such other time as you and the Company may mutually determine.

3.   Releases.   In
consideration for the payments and benefits specified in Section 2, you fully release and discharge from all legal claims,
complaints, causes of action, charges, or demands arising out of or relating to your employment or termination of employment with
the Company (Legal Claims): the Company, its related and/or affiliated companies, and all of the respective
predecessors, successors, affiliates, assigns, officers, shareholders, board members, directors, employees, agents, contractors,
counsel, and insurers of the Company and its related and/or affiliated companies.

| | (a)   You
understand that by releasing all of your Legal Claims against these entities and persons, you are releasing all of your rights to
bring any Legal Claims against them based on any actions, decisions, or events occurring through the date of your signing of this
Agreement, including the terms and conditions of your employment and your separation from employment.
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| | (b)   You
understand that you are releasing, and do hereby release, any Legal Claims for damages, whether brought by you or on your behalf
by any other party, governmental or otherwise, and agree not to institute any Legal Claims for damages via administrative or legal
proceedings against the Company. You also waive and release any and all rights to money damages or other legal relief awarded by
any governmental agency related to any Legal Claims brought against the Company.
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| | (c)   You
understand that you are giving up any and all Legal Claims, whether now known or unknown, asserted or unasserted, direct or
indirect, which you have or may have by reason of any matter, fact, or thing occurring up through the date of your signing this
Agreement, including any Legal Claims arising under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e
et seq., the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq., the Americans with
Disabilities Act, 42 U.S.C. § 12101 et seq., the Employee Retirement and Income Security Act, 29 U.S.C. §
1001 et seq., the Family and Medical Leave Act, 29 U.S.C. § 2601 et seq., the Federal Fair Labor
Standards Act, 29 U.S.C. § 201 et seq., the Minnesota Human Rights Act, Minn. Stat. § 363A.01
et seq., the Minnesota Fair Labor Standards Act, Minn. Stat. § 177.21 et seq.,
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| | Minn. Stat. §181.81, Minn. Stat. § 176.82, as well as
any other federal, state, or local statute, regulation, or ordinance.
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| | (d)   You
understand that you are giving up all other Legal Claims under any other theory, whether legal or equitable, including those
grounded in contract or tort theories, including, but not limited to, wrongful discharge, breach of contract, tortious
interference with contractual relations, promissory estoppel, breach of the implied covenant of good faith and fair dealing,
breach of express or implied promise; breach of manuals or other policies, assault, battery, fraud, false imprisonment, invasion
of privacy; intentional or negligent misrepresentation, defamation, discharge in violation of public policy, whistleblower,
intentional or negligent infliction of emotional distress, failure to pay wages, bonuses, or other forms of compensation, and any
and all attempts to recover attorneys fees.
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Notwithstanding anything in
this Section 3 to the contrary, you do not release the Company of any of its obligations or any of your claims or demands: (1)
under any of the Companys applicable insurance policies or any applicable indemnification agreement or law with respect to
suits, demands, proceedings or other claims arising out of events, occurrences, or conduct in connection with your conduct as
officer, director, or employee of the Company or any of its subsidiaries, so long as, with respect to the events, occurrences, or
conduct which gives rise to any such suit, demand, proceeding or other claim, you acted in good faith in the reasonable belief
that your acts or omissions were in (or not opposed to) the best interest of the Company; (2) under this Agreement or any of the
stock option or restricted stock agreements (as may have been modified by this Agreement) to which you are a party; and (3) under
any employee pension benefit plan or employee welfare benefit plan, which rights shall be governed by the terms of any such plans
maintained by the Company. To the extent any of the agreements specifically referenced in the preceding sentence, by their own
terms, survive the termination of your employment, their duration shall not be affected by the termination of your employment or
this Agreement, except that any non-compete, non-solicitation, non-disclosure, or similar covenant contained in any such agreement
shall be superseded and replaced by the provisions of Section 10 of this Agreement. You represent that you are not presently
asserting nor are you aware of the existence of, based on information reasonably available to you, any of the claims or demands
enumerated (1)  (3) in this paragraph.

In consideration of your
foregoing release of the Company, the sufficiency of which is expressly acknowledged, the Company hereby releases you from all
liability for damages, claims, and demands, whether known or unknown, of any kind, including all claims for costs expenses, and
attorneys fees, which the Company or its successors or assigns may have against you, provided, however, that the
Companys release of you shall not extend to, and the Company expressly does not release, any liability for damages, claims,
and demands, whether known or unknown, which the Company or its successors or assigns may have against you relating in any way to
any conduct by you prior to your termination of employment: (1) that results in your conviction of, or plea of nolo
contendere to, any felony which materially or adversely impacted or impacts the Companys financial condition or
reputation; (2) that constitutes willful gross neglect or willful gross misconduct in carrying out your duties which materially
and adversely impacted or impacts the Companys financial condition or reputation;

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or (3) that would be a breach by you of this Agreement. You represent,
however, that you are not aware of the existence of any facts, based on information reasonably available to you, that would
support a claim against you by the Company for any of the enumerated reasons (1)  (3) in this paragraph.

By signing this Agreement,
you hereby acknowledge the sufficiency of the payments and benefits provided to you (including, without limitation, the
Companys release of you set forth above) in exchange for your release.

4.   Acceptance
Period.   You acknowledge that you have been advised that the terms of this Agreement are open for acceptance
by you for a period of twenty-one (21) days, during which period you may consider whether or not to accept this Agreement, and
that the negotiations over the form of this Agreement are part of and do not restart this twenty-one (21) day period. You may
decide to accept this Agreement at any time during this period; however, you are asked not to sign this Agreement prior to the
Position Elimination Date, in order to make the release effective through the last day of employment in your present capacity with
the Company. You also understand and agree that you will be asked to sign a similar release effective through the Employment
Termination Date.

5.   Right
to Revoke.   You may rescind this Agreement as far as it extends to claims or potential claims under the
Minnesota Human Rights Act by delivering to the addressee below a notice of your intent do so within fifteen (15) calendar days
following your signing of this Agreement. You further are entitled to revoke this Agreement insofar as it extends to claims or
potential claims under the Age Discrimination in Employment Act by delivering a notice of your intent to revoke this release
within seven (7) calendar days following your signing of it to:

| | Timothy J. Schugel
Chief Financial Officer
Department 56, Inc.
6436 City West Parkway
Eden Prairie, MN 55344
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| | (a)   To
be effective, such written notice must either be delivered by hand or by certified mail, return receipt requested, within such
fifteen (15) or seven (7) day time period. You acknowledge and understand that the time periods described above shall run
concurrently, that the day on which you sign this Agreement shall count as the first day of both the fifteen (15) and seven (7)
day time periods, and that no allowance will be made should the last day of the time period fall on a weekend or holiday.
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| | (b)   This
Agreement will not become effective until the rescission and revocation periods have expired, and no payment shall be made to you
until at least the first business day following the expiration of the fifteen (15) day rescission period. In the event that you
provide a timely notice of your intent to rescind or revoke this Agreement, the Company may, at its option, declare the entire
Agreement null and void, in which case neither you nor the Company shall have any rights or obligations under this Agreement.
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6.   Return
of Company Property.   You agree that you will deliver to the Company within one business day of the Position
Elimination Date, all Company equipment, including all computers, telephone calling cards, keys, cellular telephones, pagers,
records, manuals, books, blank forms, documents (including all letters, memoranda, notes, notebooks, and reports) and other data,
and all copies thereof, and all other tangible Company property, which are in your possession or under your control as of the
Position Elimination Date. Any such Company property that comes into your possession or control during your work as a Senior
Advisor or was not returned by you to the Company within one day of the Position Elimination Date because it was necessary for
your work as a Senior Advisor shall be returned to the Company within one business day of the Employment Termination Date.
Notwithstanding the foregoing, the Company agrees that you may keep and use, and the Company shall make for you a CD-ROM copy of,
your Microsoft Outlook Contacts file.

7.   Passwords
and Password-Protected Documents.   You agree that, prior to your signing this Agreement, that you have
provided to the Company, all passwords in use by you at the time of the Position Elimination Date, a list of any documents that
you created or of which you are otherwise aware that are password-protected, and the password(s) necessary to access such
password-protected documents.

8.   Non-Disparagement.   You
agree not to disparage the Company, its products, services, employees or management. The Company agrees that, in response to any
inquiry properly referred by you to the Company, it will describe your termination as a strategic cost saving measure in response
to current business conditions.

9.   Confidentiality.   You
agree to keep the terms of this Agreement confidential. You agree not to disclose any information concerning this Agreement to any
person, including any present or former employee of the Company. These confidentiality provisions are subject to the following
exceptions: you may disclose this Agreement to your attorneys, accountants, tax advisors or spouse, in the course of legal
proceedings involving the Company, or in response to a court order, subpoena or inquiry by a government agency.

10.   Non-Competition,
Non-Solicitation, and Non-Disclosure.   You acknowledge that in the course of your employment with the Company
you have had access to confidential information and trade secrets relating to the business affairs, customers, and employees of
the Company and/or related companies and entities. In consideration of the payments and benefits described in this Agreement, you
therefore agree that:

| | (a)   You
will not, through the end of the Severance Period: (1) engage in competition with the Company by working, in a management-level or
higher capacity, in the giftware business, whether for or on behalf of yourself or any other person or entity; (2) interfere with
the Companys relationships with any of its customers by soliciting giftware business from any such customers or otherwise;
(3) interfere with the Companys relationships with any of its vendors by soliciting giftware business or related products or
services from any such vendors or otherwise; or (4) interfere with the Companys relationships with any of its employees by
soliciting any such employees for
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| | potential employment elsewhere, by encouraging any such employees
to seek potential employment elsewhere, by participating in, providing information in connection with, recommending, or otherwise
facilitating the hiring of any such employees for employment elsewhere, or otherwise.
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| | (b)   You
will, during the Severance Period, notify the Company of any contemplated giftware business employment, giftware business
affiliation, or other giftware business activity potentially competitive with the Company prior to you commencing such employment,
business affiliation, or other business activity, so that the Company can, in its sole discretion, determine whether such
employment, business affiliation, or other business activity would be permitted under this Section 10.
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| | (c)   You
will not, at any time, disclose or use for any purpose any confidential, proprietary, or trade secret information of the Company,
including information regarding current business or plans for future business, finances, marketing, employees, customers, vendors,
and pricing, without the express written consent of the Company.
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The parties hereby agree that
the provisions of this Section 10 shall supersede and replace any prior non-competition, non-solicitation, non-disclosure, or
similar covenant between them.

11.   No
Admission.   This Agreement is not an admission by the Company that it has acted wrongfully toward you or
anyone else, and shall not be interpreted as such.

12.   No
Assignment.   This Agreement is personal to you and may not be assigned by you. The payments and benefits to be
provided to you shall be made to your estate in the event of your death prior to your receipt thereof.

13.   Governing
Law; Severability.   This Agreement shall be governed by the laws of the State of Minnesota. If any part of
this Agreement is construed to be in violation of any law, such part shall be modified to achieve the objective of the parties to
the fullest extent permitted and the balance of this Agreement shall remain in full force and effect.

14.   Entire
Agreement.   You agree that this Agreement (including any agreements specifically referenced in this Agreement)
contains the entire agreement between you and the Company with respect to your employment and separation from employment and that
there are no promises or understandings outside of this Agreement with respect to your employment or your separation from
employment with the Company. Any modification of or addition to this Agreement must be in a writing signed by you and the Company.

15.   Acknowledgment.   You
hereby affirm and acknowledge that you have read this Agreement and the provisions of this Agreement are written in language you
understand. You further represent that you understand the release contained in this Agreement specifically refers to rights or
claims arising under the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq., and that such release
does not extend to claims arising after the date of execution. You also represent that you are entering into this Agreement freely
and voluntarily, in exchange for

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valuable and sufficient consideration to which you are not otherwise
entitled. Finally, you acknowledge that you have been advised you may take up to twenty-one (21) days to consider whether to enter
into this Agreement and to consult with an attorney before signing.

The persons below have read
the foregoing Agreement, agree to the provisions it contains, and hereby execute it voluntarily with full understanding of its
consequences. IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date shown below.

|                          |                       |                      |  |  | 
|------------------------- | --------------------- | -------------------- |  |  | 
|                          | /s/   David H. Weiser
|Dated:   November 9, 2004 |                       |                     
|                          | David H. Weiser      
|                         
|                         
|Dated:   November 9, 2004 |                       | DEPARTMENT 56, INC. 
|                         
|                          | By:                   | /s/   Susan E. Engel
|                          |                      
|                          | Its:                  | CEO                 
|                          |                      

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