Department 56, Inc. Exhibit 10.10 to Form 10-Q Dated: 10-1-2005





Exhibit 10.10 



RESTRICTED STOCK
AGREEMENT 



        THIS
AGREEMENT, made as of September 30, 2005 (the “Grant Date”), between
Department 56, Inc., a Delaware corporation (the “Corporation”), and Linda J.
Miller (the “Grantee”). 



        WHEREAS,
the Corporation has adopted the 2004 Stock Incentive Plan (the “Plan”) for the
purpose of providing employees, consultants and non-employee members of its Board of
Directors a proprietary interest in pursuing the long-term growth, profitability and
financial success of the Corporation (except as otherwise expressly set forth herein, the
capitalized terms used in this Agreement shall have the same definitions set forth in the
Plan). 



        WHEREAS,
pursuant to the Plan, the Board of Directors has determined to grant an Other Stock-Based
Award to the Grantee in the form of shares of Common Stock subject to the terms,
conditions and limitations provided herein and in the Plan (“Restricted Stock”); 



        NOW,
THEREFORE, the parties hereto agree as follows: 



             1.    
Grant of Restricted Stock. 



        
       1.1    The Corporation hereby grants to
the Grantee, on the terms and conditions set forth in this Agreement, the number of shares
of Restricted Stock set forth under the Grantee’s name on the signature page hereto. 



        
       1.2    The Grantee’s rights with
respect to all the shares of Restricted Stock shall remain forfeitable at all times prior
to the Lapse Date (as defined below). 



        
       1.3    This Agreement shall be construed
in accordance with, and subject to, the terms of the Plan (the provisions of which are
incorporated herein by reference). 



             2.    
          Rights of Grantee. Except as otherwise provided in this Agreement, the
          Grantee shall be entitled, at all times on and after the Grant Date, to exercise
          all rights of a shareholder with respect to the shares of Restricted Stock
          (whether or not the restrictions thereon shall have lapsed), other than with
          respect to those shares of Restricted Stock which have been forfeited pursuant
          to Section 3.2 hereof, including the right to vote the shares of Restricted
          Stock and the right to receive dividends thereon. The deferred dividends shall
          be held by the Corporation for the account of the Grantee until the Lapse Date,
          at which time the dividends, with no interest thereon, shall be paid to the
          Grantee or her/his estate, as the case may be. Notwithstanding the foregoing,
          prior to the Lapse Date, the Grantee shall not be entitled to transfer, sell,
          pledge, hypothecate or assign any shares of Restricted Stock (collectively, the
          “Transfer Restrictions”). 



             3.    
          Vesting; Lapse of Restrictions. 



        
       3.1    The Transfer Restrictions with
respect to all the shares of Restricted Stock granted under this Agreement shall lapse on
September 30, 2006 (the “Lapse Date”) provided the Grantee continues to
perform consulting services for the Corporation until such Lapse Date as required under
either the Consulting Agreement dated September 26, 2005 (the “Consulting
Agreement”) between the Grantee and the Corporation or such consulting agreement (the
“Prior Consulting Agreement”) as may become effective after June 15, 2006
as provided in the Consulting Agreement; provided, however, that the Transfer Restrictions
with respect to all the shares of Restricted Stock shall lapse, if sooner, (a) on the
date of the Grantee’s death or (b) on the date the Corporation terminates the
Consulting Agreement or the Prior Consulting Agreement (each, also a “Lapse
Date”). Notwithstanding anything in the vesting acceleration provision contained in
the proviso of the preceding sentence to the contrary, in no event shall the Grantee be
vested or otherwise entitled to more than one hundred percent (100%) of the shares of
Restricted Stock granted pursuant to Section 1.1 above. 













        
       3.2    Notwithstanding anything in this
Agreement to the contrary, upon the termination of the Grantee’s employment by the
Corporation for any reason other than as a result of the Grantee’s death, all shares
of Restricted Stock in respect of which the Transfer Restrictions have not previously
lapsed in accordance with Section 3.1 hereof shall be forfeited and automatically
transferred to and reacquired by the Corporation at no cost to the Corporation, and
neither the Grantee nor any heirs, executors, administrators or successors of such Grantee
shall thereafter have any right or interest in such shares of Restricted Stock. 



             4.    
Escrow and Delivery of Shares. 



        
       4.1    Certificates (or an
“electronic “book entry” on the books of the Corporation’s stock
transfer agent) representing the shares of Restricted Stock shall be issued and held by
the Corporation (or its stock transfer agent) in escrow (together with any stock transfer
powers which the Corporation may request of Grantee) and shall remain in the custody of
the Corporation (or its stock transfer agent) until (i) their delivery to the Grantee
or his/her estate as set forth in Section 4.2 hereof, or (ii) their forfeiture and
transfer to the Corporation as set forth in Section 3.2 hereof. The appointment of an
independent escrow agent shall not be required. 



        
       4.2    (a)    Subject to paragraph (b) of
this Section 4.2, certificates (or an electronic “book entry”) representing
those shares of Restricted Stock in respect of which the Transfer Restrictions have lapsed
pursuant to Section 3.1 hereof shall be delivered to the Grantee as soon as practicable
following the Lapse Date, subject to the application of Section 8 below. 



             
                (b)    
          Certificates (or an electronic “book entry”) representing those shares
          of Restricted Stock in respect of which the Transfer Restrictions have lapsed
          pursuant to Section 3.1 upon the Grantee’s death shall be delivered to the
          executors or administrators of the Grantee’s estate as soon as practicable
          following the Lapse Date and the Corporation’s receipt of notification of
          the Grantee’s death, accompanied by an official death certificate. 



             
                (c)    
          The Grantee, or the executors or administrators of the Grantee’s estate, as
          the case may be, may receive, hold, sell or otherwise dispose of those shares of
          Restricted Stock delivered to him or her pursuant to paragraphs (a) or (b) of
          this Section 4.2 free and clear of the Transfer Restrictions, but subject to
          compliance with all federal and state securities laws. 







2 










        
       4.3    (a)    Each stock
certificate issued pursuant to Section 4.1 shall bear a legend in substantially the
following form: 




	  	
This
certificate and the shares of stock represented hereby are subject to the terms and
conditions applicable to Restricted Stock contained in the 2004 Stock Incentive Plan (the
“Plan”) and a Restricted Stock Agreement (the “Agreement”) between
the Corporation and the registered owner of the shares represented hereby. Release from
such terms and conditions shall be made only in accordance with the provisions of the
Plan(s) and the Agreement, copies of which are on file in the office of the Secretary of
the Corporation.  






             
                (b)    
          As soon as practicable following a Lapse Date, the Corporation shall issue a new
          certificate (or electronic “book entry”) for shares of the Restricted
          Stock which have become non-forfeitable in relation to such Lapse Date, which
          new certificate (or electronic “book entry”) shall not bear the legend
          set forth in paragraph (a) of this Section 4.3 and shall be delivered in
          accordance with Section 4.2 hereof. 



             5.    
          Dividends. All dividends declared and paid by the Corporation on shares
          of Restricted Stock shall be deferred until the lapsing of the Transfer
          Restrictions pursuant to Section 3.1. The deferred dividends shall be held by
          the Corporation for the account of the Grantee until the Lapse Date, at which
          time the dividends, with no interest thereon, shall be paid to the Grantee or
          her/his estate, as the case may be. Upon the forfeiture of the shares of
          Restricted Stock pursuant to Section 3.2, any deferred dividends shall also be
          forfeited to the Corporation. 



             6.    
          No Right to Continued Employment. Nothing in this Agreement or the Plan
          shall be interpreted or construed to confer upon the Grantee any right with
          respect to continued employment nor shall this Agreement or the Plan interfere
          in any way with the right of the Corporation to terminate the Grantee’s
          employment at any time. 



             7.    
          Adjustments Upon Change in Capitalization. If, by operation of
          Section 10 of the Plan, the Grantee shall be entitled to new, additional or
          different shares of stock or securities of the Corporation or any successor
          corporation or entity or other property, such new, additional or different
          shares or other property shall thereupon be subject to all of the conditions and
          restrictions which were applicable to the shares of Restricted Stock immediately
          prior to the event and/or transaction that gave rise to the operation of
          Section 10 of the Plan. 



             8.    
          Modification of Agreement. Except as set forth in the Plan and herein,
          this Agreement may be modified, amended, suspended or terminated, and any terms
          or conditions may be waived, but only by a written instrument executed by the
          parties hereto. 



             9.    
          Severability. Should any provision of this Agreement be held by a court
          of competent jurisdiction to be unenforceable or invalid for any reason, the
          remaining provisions of this Agreement shall not be affected by such holding and
          shall continue in full force and effect in accordance with their terms. 







3 










             10.    
          Governing Law. The validity, interpretation, construction and performance
          of this Agreement shall be governed by the laws of the State of Delaware without
          giving effect to the conflicts of laws principles thereof. 




             11.    
          Successors in Interest. This Agreement shall inure to the benefit of and
          be binding upon any successor to the Corporation. This Agreement shall inure to
          the benefit of the Grantee’s heirs, executors, administrators and
          successors. All obligations imposed upon the Grantee and all rights granted to
          the Corporation under this Agreement shall be binding upon the Grantee’s
          heirs, executors, administrators and successors. 




		DEPARTMENT 56, INC.
	 
	 
		By:  /Timothy Schugel/
                  
		
        Name:    Timothy Schugel

        Title:   CFO
	 
	 
		GRANTEE: 
	 
	 
		        /Linda J. Miller/
                  
		Name:  Linda J. Miller

Number of Shares of Restricted Stock
Hereby Granted: 10,000













4