Document:

EXHIBIT 10.2

 

[Department 56, Inc. Letterhead]

 

October 20,
2005

 

[Name
of Executive]

[Address]

 

Re:                               Amendment to Retention Agreement with Lenox, Inc. and Issuance of
Restricted Stock of Department 56, Inc.

 

Dear Mr./Ms.                    :

 

Reference is made to the
Retention Agreement dated as of February 22, 2005 (the “Retention
Agreement”) between you and Lenox, Inc. 
As you are aware, on September 1, 2005, Department 56, Inc. (“D56”)
acquired all of the outstanding stock of Lenox, Inc. (“Lenox”) (the “Transaction”),
thereby constituting a “Sale of Employer” under the Retention Agreement.  In connection with your continued employment
with Lenox and/or D56, D56 has agreed to issue shares of restricted stock to
you in consideration of your agreement to amend the Retention Agreement as set
forth below.

 

Based on the foregoing, the
parties agree as follows:

 

1.                                       D56 agrees to issue shares of restricted
stock to you, which shares shall have the terms and conditions set forth in the
attached form of Restricted Stock Agreement (collectively, the “Restricted
Stock”).

 

2.                                       You and Lenox agree that the Retention
Agreement is hereby amended by deleting in its entirety subparagraph (1) from
the definition of “Good Reason” contained in Section 1(d) of the
Retention Agreement.  You understand and
agree that the effect of this amendment shall be that you are not entitled to
the Retention Bonus (as defined in the Retention Agreement) if you resign on or
after the closing of the Transaction based upon a material reduction of your
title, job duties or responsibilities.

 

3.                                       D56 agrees to extend your right to receive
the “Severance Benefits” (as defined in Section 3 of the Retention
Agreement) through and including September 30, 2008; therefore, if an
event described in subparagraph (2) of Section 2(a) of the
Retention Agreement occurs after September 1, 2006 and prior to October 1,
2008 (each a “Severance Event”), you shall be entitled to receive the Severance
Benefits.  If a Severance Event occurs
prior to October 1, 2008, you will receive the greater of the fair market
value of the Severance Benefits or the Restricted Stock (as to which all
restrictions shall thereupon automatically lapse).  You agree that, upon payment of the Severance
Benefits or issuance of the Restricted Stock (with all restrictions having
lapsed) to you, D56’s obligations to pay you severance shall have been
satisfied in full.

 

 

4.                                       This letter agreement is effective as of September 30,
2005 (the “Effective Date”).  Except as
amended herein, all of the terms and conditions of the Retention Agreement
shall remain in full force and effect.

 

Please confirm your
agreement with the terms and provisions set forth in this letter by signing a
copy of this letter and returning it Louis Fantin, General Counsel of D56.

 

Sincerely,

 

	
  DEPARTMENT 56, INC.

  	
  LENOX, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Timothy Schugel

  	
  Name:

  	
  Susan Engel

  	
   

  
	
  Title:

  	
  CFO

  	
  Title:

  	
  CEO

  	
   

  
	
   

  	
   

  	
   

  
	
  Agreed to as of the Effective Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [Name]

  	
   

  	
   

  	
   

  
										

 

2EXHIBIT 10.3

 

RESTRICTED
STOCK AGREEMENT

 

THIS AGREEMENT, made as of September 30, 2005
(the “Grant Date”), between Department 56, Inc., a Delaware corporation
(the “Corporation”), and                        
(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, 2008 (the “Lapse
Date”), provided that the Grantee continues to be an employee of the
Corporation (or any wholly owned subsidiary of the Corporation) until such
Lapse Date; provided, however, that the Transfer

 

 

Restrictions with
respect to all shares of Restricted Stock granted hereunder shall lapse, if
sooner (i) on the date of the Grantee’s death, or (ii) on the date of
the termination of the Grantee’s employment by the Corporation other than for “Cause”
(as defined in the Retention Agreement between the Grantee and Lenox,
Incorporated dated as of February 22, 2005 (the “Retention Agreement”))
and such Restricted Stock is issued to Grantee in lieu of “Severance Benefits”
(as defined in the Retention Agreement) in accordance with the terms of the
Letter Agreement by and among the Grantee, the Corporation and Lenox,
Incorporated dated October 20, 2005 (each, 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 other than as a result of such events set forth in Section 3.1,
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:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Timothy
  Schugel

  
	
   

  	
   

  	
  Title:

  	
  CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GRANTEE:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Number
  of Shares of Restricted Stock

  
	
   

  	
  Hereby
  Granted:

  	
   

  	
   

  
									

 

4

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