DEPARTMENT 56 INC
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<TYPE>EX-10.10
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<HEAD><TITLE>Exhibit 10.10 To Department 56, Inc. Form 10-K dated 1/3/2004</TITLE></HEAD>
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<H1 ALIGN=LEFT><FONT FACE="Arial, Helvetica, Sans-Serif" SIZE=2>Exhibit 10.10 </FONT> </H1>



<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4>DEPARTMENT 56, INC. </FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>2004 CASH INCENTIVE
PLAN<br>
(EFFECTIVE FEBRUARY 18, 2004)</FONT></H1>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Section 1. Purpose. </FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
purpose of the 2004 Cash Incentive Plan (the &#147;<B>Plan</B>&#148;) is to promote the
interests of Department 56, Inc. (&#147;<B>Department 56</B>&#148;) and its subsidiaries
(the &#147;<B>Company</B>&#148;) by providing eligible key employees of the Company with
incentive to assist the Company in meeting and exceeding its business goals. </FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Section 2.
Administration. </FONT></H1>

     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;
          The Plan shall be administered by the Compensation Committee (the
          &#147;<B>Committee</B>&#148;) of the Board of Directors of Department 56 (the
          &#147;<B>Board</B>&#148;) from among its members and shall be comprised of not
          fewer than two members who shall be &#147;outside directors&#148; within the
          meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the
          &#147;<B>Code</B>&#148;), and the regulations thereunder. </FONT></P>

     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;
          The Committee may, subject to the provisions of the Plan, establish, adopt or
          revise rules and regulations relating to the Plan or take such actions as it
          deems necessary or advisable for the proper administration of the Plan. The
          Committee shall have the authority to interpret the Plan in its absolute
          discretion. Each interpretation made or action taken by the Committee pursuant
          to the Plan shall be final and conclusive for all purposes and binding upon all
          Participants (as defined in Section 3) or former Participants and their
          successors in interest. </FONT></P>

     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;
          Neither the Committee nor any member of the Committee shall be liable for any
          act, omission, interpretation, construction or determination made in good faith
          in connection with the Plan, and the members of the Committee shall be entitled
          to indemnification and reimbursement by Department 56 in respect of any claim,
          loss, damage or expense (including, without limitation, reasonable
          attorneys&#146; fees) arising or resulting therefrom to the fullest extent
          permitted by law. </FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Section 3. Eligibility. </FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Awards
may be granted to key employees of the Company who are selected for participation in the
Plan by the Committee. A qualifying employee selected by the Committee to participate in
the Plan shall be a <B>&#147;Participant</B>&#148; in the Plan. </FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Section 4. Award
Criteria. </FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Committee may grant performance-based awards (&#147;<B>Awards</B>&#148;) to Participants
with respect to any performance period (each, a &#147;<B>Performance Period</B>&#148;),
subject to the terms and conditions of the Plan. All Awards shall be settled in cash.
Performance Periods may be equal to or longer than, but not less than, one fiscal year of
the Company and may be overlapping. Within 90 </FONT></P>



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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>days after the beginning of a Performance
Period, and in any case before 25% of the Performance Period has elapsed, the Committee
shall establish (a) performance goals and objectives (&#147;<B>Performance
Targets</B>&#148;) for the Company for such Performance Period, (b) target awards
(&#147;<B>Target Awards</B>&#148;) for each Participant which shall be a specified dollar
amount, and (c) schedules or other objective methods for determining the applicable
performance percentage (&#147;<B>Performance Percentage</B>&#148;) to be applied to each
Target Award to which a Performance Target relates in arriving at the actual Award payout
amount (&#147;<B>Performance Schedules</B>&#148;). </FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Section 5. Performance
Targets. </FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Committee shall establish Performance Targets for each Performance Period. Such
Performance Targets shall be based on one or more of the following business criteria:
revenue growth, operating income, operating cash flow, net income, earnings per share,
return on sales, return on assets, return on equity, return on invested capital and total
shareholder return. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
measurement of any Performance Targets may exclude the impact of charges for
extraordinary, unusual or non-recurring items (including without limitation charges for
restructurings and discontinued operations), and the cumulative effects of accounting
changes, each as defined by generally accepted accounting principles and as identified in
the Company&#146;s audited financial statements, including the notes thereto. Any
Performance Targets may be used to measure the performance of Department 56 or a
subsidiary of Department 56 as a whole or any business unit of Department 56 or any
subsidiary or any combination thereof, as the Committee may deem appropriate, or any of
the above Performance Targets as compared to the performance of a group of comparator
companies, or a published or special index that the Committee, in its sole discretion,
deems appropriate. </FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Section 6. Awards. </FONT></H1>

     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;
          <B>Calculation.</B> In the manner required by Section 162(m) of the Code, the
          Committee shall, promptly after the date on which the necessary financial and
          other information for a particular Performance Period becomes available, certify
          the extent to which Performance Targets have been achieved. Using the
          Performance Schedule, the Committee shall determine the Performance Percentage
          applicable to each Performance Target and multiply the portion of the Target
          Award to which the Performance Target relates by such Performance Percentage in
          order to arrive at the actual Award payout for such portion. </FONT></P>

     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;
          <B>Discretionary Reduction.</B> The Committee may, in its discretion, reduce or
          eliminate the amount of any Award payable to any Participant, based on such
          factors as the Committee may deem relevant, but the Committee may not increase
          the amount of any Award payable to any Participant above the amount established
          in accordance with the relevant Performance Targets. For purposes of clarity,
          the Committee may exercise the discretion provided for by the foregoing sentence
          in a non-uniform manner among Participants. </FONT></P>

     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;
          <B>Limitation.</B> The amount paid under the Plan to any Participant with
          respect to any Award for a Performance Period of one year shall not exceed one
          million five hundred thousand dollars ($1,500,000). The amount paid under the
          Plan to any Participant with respect to any Award for a Performance Period of
          more than one year shall not exceed three million dollars ($3 million). </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>No Participant shall be eligible to earn Awards for more than three Performance
          Periods that end within any single fiscal year of the Company. </FONT></P>

     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;
          <B>Payment.</B> The Company shall pay Awards as soon as administratively
          practical following certification by the Committee of the extent to which the
          applicable Performance Targets have been achieved and the determination of the
          actual Awards in accordance with Section 5 and this Section 6. </FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Section 7. General
Provisions. </FONT></H1>

     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;
          <B>No Rights to Awards or Continued Employment.</B> No employee of the Company
          shall have any claim or right to receive Awards under the Plan. Neither the Plan
          nor any action taken under the Plan shall be construed as giving any employee
          any right to be retained by the Company. </FONT></P>

     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;
          <B>No Limits on Other Awards and Plans.</B> Nothing contained in this Plan shall
          prohibit the Company from establishing other special awards or incentive
          compensation plans providing for the payment of incentive compensation to
          employees of the Company, including any Participants. </FONT></P>

     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;
          <B> Withholding Taxes.</B> The Company shall deduct from all payments and
          distributions under the Plan any required federal, state or local governments
          tax withholdings. </FONT></P>

     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;
          <B>Unfunded Status of Plan.</B> The Company shall not have any obligation to
          establish any separate fund or trust or other segregation of assets to provide
          for payments under the Plan. To the extent any person acquires any rights to
          receive payments hereunder from the Company, such rights shall be no greater
          than those of an unsecured creditor. </FONT></P>

     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;
          <B>Effective Date; Amendment.</B> The Plan is effective as of February 18, 2004,
          subject to approval by the shareholders of Department 56 at its 2004 annual
          meeting of shareholders. The Committee may at any time and from time to time
          alter, amend, suspend or terminate the Plan in whole or in part. </FONT></P>

     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;
          <B> Governing Law.</B> The Plan and the rights of all persons under the Plan
          shall be construed and administered in accordance with the laws of the State of
          New York without regard to its conflict of law principles. </FONT></P>

     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;
          <B> Interpretation.</B> The Plan is designed and intended to comply with Section
          162(m) of the Code and all provisions hereof shall be construed in a manner so
          to comply. </FONT></P>


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