Exhibit 10.1


 


LENOX GROUP INC. 
(“LGI”) STOCK OPTION AGREEMENT


FOR OPTIONS UNDER THE 2004 STOCK
INCENTIVE PLAN


 


	
  Optionee:

  	
   

  	
  Grant Date:

  
	
   

  	
   

  	
   

  
	
  Number of Shares
  subject to the Option:

  	
   

  	
  Exercise Price per
  Share:

  



 


1.                    General.


 


1.1    The
Company hereby grants to the Optionee, subject to the terms of this Agreement
and the Company’s 2004 Stock Incentive Plan (the “Plan”), the right and option
(the “Option”) to purchase, at the Exercise Price, the number of Shares set
forth above.  The number of Shares and
the Exercise Price are subject to adjustment as provided in Section 13 of
the Plan, which is made a part of this Agreement.  Except as otherwise defined herein,
capitalized terms used in this Agreement shall have the same definitions as set
forth in the Plan.  For purposes of this
Agreement, (a) the term “person” shall mean an individual, a corporation, a
partnership, an association, a trust, a sole proprietorship, a limited
liability company, or any other entity or organization, including a government
or governmental agency, instrumentality, authority, commission or court, (b)
the term “Affiliate” of the Company shall mean any person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, the Company and (b) the term “control” shall
mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of any person, whether through the
ownership of equity interests, by contract or otherwise.


 


1.2         This Option is not
intended to qualify as an Incentive Stock Option within the meaning of
Section 422 of the Code.


 


1.3       The Option shall be
exercisable to the extent and in the manner provided in this Agreement for a
period of 10 years from the date hereof (the “Exercise Term”); provided,
however, that the Option may be terminated earlier as provided in
Section 4 or 5.


 


2.                    Vesting and
Exercisability of Options.


 


2.1         Fully Vested Upon
Grant; Delayed Exercisability.  The
Option shall be fully vested on and as of the Grant Date, subject to forfeiture
only as set forth in this Agreement and the Plan. Notwithstanding the foregoing
and subject to the provisions of this Agreement and the Plan, the Option shall
become exercisable with respect to the total number of Shares which may be
purchased pursuant to the Option on the second anniversary of the Grant Date.


 


2.2         Timing of Exercise.  The Optionee or the guardian, executor,
administrator or other legal representative (each a “Legal Representative”) of
the Optionee may exercise the Option, in whole or in part, at any time or from
time to time, but only to the extent the Option is exercisable at such time.


 


2.3         Effect of Change in
Control.  Notwithstanding anything
contained in this Agreement to the contrary, in the event of a Change in
Control, the Option shall become immediately and fully exercisable.


 


3.                    Manner of
Exercise and Payment.


 


3.1         Subject to the terms and
conditions of this Agreement and the Plan, the Option may be exercised by
delivery of written notice, in person or by mail, to the Secretary of the
Company, at the Company’s principal executive office (or such other address as
the Company may from time to time notify the Optionee in writing). Such notice
shall state that the Optionee is electing to exercise the Option and the
underlying number of Shares being exercised and shall be signed by the Optionee
or, where applicable, by his/her Legal Representative.  The Company may require proof satisfactory to
it as to the right of the Legal Representative to exercise the Option.


 





















 


3.2         The notice of exercise
described in Section 3.1 shall be accompanied by the full purchase price
for the underlying Shares being exercised, such purchase price to be paid by
check.  Not less than 10 Shares may be
purchased at any one time upon an exercise of the Option, unless the number of
Shares so purchased constitutes the total number of Shares then purchasable
under the Option.


 


3.3         The Optionee shall not be
deemed to be the holder of, or to have any of the rights of a holder with
respect to, any Shares subject to the Option until the conditions in Section
7.3 of the Plan have been satisfied.


 


4.                    Certain
Restrictions.


 


4.1         Non-transferability.  The Option shall not be transferable by the
Optionee otherwise than by will or the laws of descent and distribution, and an
Option may be exercised during the lifetime of such Optionee only by the
Optionee or his/her Legal Representative. 
The terms of such Option shall be final, binding and conclusive upon the
beneficiaries, executors, administrators, heirs and successors of the Optionee.


 


4.2    Employment Termination.  (a)  Except as may be agreed
between the Committee and the Optionee, if the Optionee shall no longer be
employed by the Company or any of its Subsidiaries, for any reason whatsoever
(including by reason of death, permanent disability or adjudicated
incompetency) (“Terminated” or a “Termination”), irrespective of whether the
Optionee receives, in connection with the Termination, any severance or other
payment from the Company or any of its Subsidiaries under any employment
agreement or otherwise, the Option shall terminate and shall be of no further
force or effect from and after the date of such Termination (the “Termination
Date”) as follows:


 


(1)     
In the event the Termination is the result of the Optionee’s resignation from
employment (other than “Retirement” as defined below), the last day on which
the Option may be exercised (and after which day the Option shall terminate and
be of no further force or effect) shall be the ninetieth (90th) day
following the Termination Date unless the second anniversary of the Grant Date
of the Option occurs after such ninetieth day, in which case the last day of
Option exercisability shall be the second anniversary of the Grant Date of the
Option; provided, however, that in the event the Optionee dies during
the period between the Termination Date and the last day of Option
exercisability as set forth in this clause 4.2(a)(1), then the Legal
Representative may exercise the Option at any time until and through (but not
after) the later to occur of (x) such last day of Option exercisability and (y)
the three-hundred-sixty-fifth (365th) day after the date of the Optionee’s
death.


 


(2)     
In the event the Termination is the result of the Optionee’s “Retirement”
(being the Optionee’s resignation from employment or the Company’s termination
of employment without Cause, in either case, at such time as the Optionee is
age sixty (60) or greater), the last day on which the Option may be exercised
(and after which day the Option shall terminate and be of no further force or
effect) shall be the tenth (10th) anniversary of the Grant Date of
the Option; provided, however, that in the event the Optionee dies
during the period between the Termination Date and the last day of Option
exercisability as set forth in this clause 4.2(a)(2), then the Legal
Representative may exercise the Option at any time until and through (but not
after) the later to occur of (x) the second anniversary of the Grant Date of
the Option and (y) the three-hundred-sixty-fifth (365th) day after the date of
the Optionee’s death.


 


(3)     
In the event the Termination is the result of the Optionee’s death while
employed by the Company or one of its Affiliates, the Legal Representative may
exercise the Option at any time within three-hundred-sixty-five (365) days
after the date of the Optionee’s death (and after such 365th day the Option
shall terminate and be of no further force or effect) unless the second
anniversary of the Grant Date of the Option occurs after the Termination Date,
in which case the last day of Option exercisability shall be the second
anniversary of the Grant Date of the Option.


 





















 


(4)     
In the event the Termination is the result of the Company’s dismissal without
Cause of the Optionee from employment (other than due to Retirement), the last
day on which the Option may be exercised (and after which day the Option shall
terminate and be of no further force or effect) shall be the later (the “Later
Day”) of (x) the last day in respect of which the Optionee is paid severance
following the Termination Date (e.g., the end of the severance period) and (y)
the ninetieth (90th) day following the Termination Date; provided,
however, that in the event the second anniversary of the Grant Date of the
Option occurs after the Later Day, the last day of Option exercisability shall
be the second anniversary of the Grant Date of the Option; and further
provided, that in the event the Optionee dies during the period between the
Termination Date and the last day of Option exercisability as set forth in this
clause 4.2(a)(4), then the Legal Representative may exercise the Option at any
time until and through (but not after) the later to occur of (x) such last day
of Option exercisability as set forth in the preceding proviso and (y) the
three-hundred-sixty-fifth (365th) day after the date of the Optionee’s death.


 


(5)     
In the event the Termination is the result of the Company’s dismissal with
Cause of the Optionee from employment, the last day on which the Option may be
exercised (and after which day the Option shall terminate and be of no further
force or effect) shall be the Termination Date.


 


(b)         For purposes of this
Section 4.2, the term “Cause” shall mean the Company’s determination that the
Optionee shall have committed one or more of the following: fraud, material and
deliberate injury or attempted injury to the business or a fellow employee or
customer in the line of work, breach of any law or Company policy which
presents the reasonable likelihood of a material adverse impact to the
Company’s business or its reputation, material competition with the Company
(including solicitation of its employees or customers), willful breach of duty,
habitual neglect, or habitual absenteeism, or substantial dependence on or
addiction to alcohol or any controlled substance.


 


5.                    Prohibition
Against Certain Activities.


 


5.1         Restricted Activities.
The Optionee understands that the Company is granting to the Optionee an option
to purchase Shares to reward the Optionee for the Optionee’s future efforts and
loyalty to the Company and its Affiliates by giving the Optionee the
opportunity to participate in the potential future appreciation of the
Company.  Accordingly, the Optionee
agrees that: (a) s/he will not at any time during his/her employment with the
Company or any Affiliate, or after any Termination, directly or indirectly
disclose or furnish to any other person or use for his/her own or any other
person’s account any confidential or proprietary knowledge or any other
information which is not a matter of public knowledge obtained during the
entire course of his/her employment with, or other performance of services for,
the Company or any Affiliate or any predecessor of any of the foregoing, no
matter from where or in what manner the Optionee may have acquired such
knowledge or information, and s/he shall retain all such knowledge and
information in trust for the benefit of the Company, its Affiliates and the
successors and assigns of any of them; (b) if s/he is Terminated, s/he will not
for two years following the Termination directly or indirectly solicit for
employment, including without limitation recommending to any subsequent
employer the solicitation for employment of, any person who at the time of the
solicitation is employed by the Company or any Affiliate  (a ““LGI” Employee”) (it being understood
that, if the Optionee becomes affiliated with another person (the “Successor”)
and the Successor solicits for employment a “LGI” Employee, it shall not
constitute a solicitation hereunder if the Optionee does not solicit, recommend
to the Successor, or otherwise bring to the attention of the Successor, the
“LGI” Employee); and (c) s/he will not at any time during his/her employment or
after any Termination publish any statement or make any statement (under
circumstances reasonably likely to become public or that s/he might reasonably
expect to become public) critical of the Company or any Affiliate, or in any
way adversely affecting or otherwise maligning the business or reputation of
the Company or any of its Affiliates or any of their respective officers,
directors or employees (any activity described in clause (a), (b) or (c) of
this sentence being herein referred to as a “Prohibited Activity”).  In addition, accordingly, the Optionee agrees
that s/he will not at any time during his/her employment with the Company or
any Affiliate or the twelve (12) months thereafter (including any period
following Termination during or in respect of which s/he is receiving any severance
payment) engage in any Competitive Activity (as defined below) anywhere in the
world (including, without limitation, anywhere in the United States of America,
the United Kingdom, Hong Kong, China or Taiwan).


 





















 


The term “Competitive Activity” shall mean engaging in
any of the following activities:  (a)
directly or indirectly through one or more intermediaries controlling any
Competitor (as defined below) or owning any equity or debt interests in any
Competitor (other than equity or debt interests which are publicly traded and
do not exceed 2% of the particular class of interests outstanding); (b)
directly or indirectly soliciting, diverting, taking away, appropriating or
otherwise interfering with any of the employees or customers of the Company or any
Affiliate; or (c) employment by (including serving as an officer or director
of), or providing consulting or other services to, any Competitor.  The term “Competitor” means any person who
derives  significant revenues, income or
reputational gain from producing, selling, designing, dealing or otherwise
conducting commercial activity in, with or pertaining to, tabletop products,
collectibles, miniature decorative or collectible buildings or coordinated
“village” accessories, figurines, jewelry, textiles, watches, small leather
goods or general decorative giftware products.


 


5.2         Right to Terminate
Option; Disgorgement.  The Optionee
understands that the Company is granting to the Optionee an option to purchase
Shares to reward the Optionee for the Optionee’s future efforts and loyalty to
the Company and its Affiliates by giving the Optionee the opportunity to
participate in the potential future appreciation of the Company.  Accordingly, if the Optionee: (a) engages in
any Prohibited Activity; (b) engages in any Competitive Activity; or (c) is
convicted of a crime against the Company or any Affiliate, then, in addition to
any other rights and remedies available to the Company, the Company shall be
entitled, in its sole discretion, to terminate the Option, which shall then be
of no further force or effect.


 


The Optionee
further understands that if he/she is found to have violated any provision of
Section 5.1 after he/she exercises the Option, the Company has the right to
demand repayment of (and the Optionee shall be obligated upon such written
demand to repay) all of Optionee’s after-tax profit realized from the exercise
of the Option (including any net cash proceeds from the sale of Shares acquired
through exercise of the Option and any Shares held by the Optionee acquired
through exercise of the Option).


 


6.                    Specific
Performance.  The parties hereto
acknowledge that there will be no adequate remedy at law for a violation of any
of the provisions of this Agreement and that, in addition to any other remedies
which may be available, all of the provisions of this
Agreement shall be specifically enforceable in accordance with their respective
terms.


 


7.                    Withholding.  Prior to the issuance of any Shares to the
Optionee hereunder, the Optionee shall remit to the Company the full amount of
any applicable Withholding Taxes.  The
Company shall have the right to deduct from any distribution of cash to the
Optionee any amount necessary in satisfaction of any applicable Withholding
Taxes.


 


8.                    Entire
Agreement.  This Agreement and the
Plan constitute the entire agreement, and supersede all prior agreements and
understandings, oral and written, between the parties hereto with respect to
the subject matter hereof.


 


9.                    Choice of
Law.  This Agreement shall be
interpreted under the laws of the State of Delaware (except with respect to
matters of employment law, which shall be interpreted under the laws of the
State of Minnesota), entirely independent of the forum in which the Agreement
or any part of it may come up for construction, interpretation or enforcement.


 





















 


10.              Acknowledgment.  The Optionee hereby acknowledges prior
receipt of a copy of the Plan and agrees to be bound by all the terms and
provisions thereof as the same may be amended from time to time.  The Optionee hereby acknowledges that s/he
has reviewed the Plan and this Agreement and understands his/her rights and
obligations thereunder and hereunder. 
The Optionee also acknowledges that s/he has been provided with such
information concerning the Company, the Plan and this Agreement as s/he and
his/her advisors have requested.


 


 


LENOX GROUP INC.


 


 


	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Optionee: