AGREEMENT FOR PERFORMANCE SHARES UNDER THE LENOX GROUP INC. (LGI or Company) 2004 STOCK INCENTIVE PLAN

1.

Achieve Fiscal Year [1] operating income of $ XXXX million.

2.

Achieve Fiscal Year [2] operating income of $ XXXX million.

3.

Achieve Fiscal Year [3] operating income of $ XXXX million.

4.

Achieve cumulative 3-year operating income of $ XXXX million over the Performance Cycle of Fiscals [1], [2] and [3].

Vesting of Performance Shares.

2.1

Vesting and Earning.

(a)

Subject to the provisions of this Agreement, the Plan and the specifications for the Grant adopted by the Committee (e.g., vesting percentage formula, and target, threshold and minimum number of Performance Shares that may be earned by the Grantee under this Grant), as of the last day of the Performance Cycle shown above (the “Performance Cycle”), the Grantee may earn and become vested in a specific percentage of the Performance Shares covered by the Grant depending upon the extent to which operating income as shown above is met as of the end of the Performance Cycle. The determination as to what extent such performance objective is met shall be made with reference to the Company’s fiscal year-end “operating income” (as defined below) for each of the fiscal years included in the Performance Cycle.

(b)

The number of Performance Shares actually earned and vested under this Grant shall be as follows:

o

If the Target Performance is achieved, then the Target Number of Performance Shares shall have been earned by and vested in the Grantee.

o

If the Threshold Performance is achieved, then the Threshold Number of Performance Shares shall have been earned by and vested in the Grantee as set forth above.

o

If the Minimum Performance is achieved, then the Minimum Number of Performance Shares shall have been earned by and vested in the Grantee as set forth above.

o

If cumulative 3-year operating income is below the Minimum Performance, then none of the Performance Shares shall have been earned by or vested in the Grantee.

(c)

For these purposes, the term “operating income” shall mean operating income at fiscal year-end as reported in the Company’s audited consolidated financial statements (subject to any adjustments for transactions that would be excluded from consolidated EBITDA under the Company’s loan agreements to the extent they are included in reported operating income). Since acquisitions are part of the Company’s business strategy, for these purposes any acquisition’s operating income is included in the determination of operating income for the performance measures set forth above, only if the acquisition transaction is consummated prior to the beginning of the last fiscal year of the Performance Cycle and then, if such test is met, only to the extent that such acquisition generated operating income during the subsequent fiscal year(s) covered by the Performance Cycle.

2.2

Forfeiture of Unearned Grant. As soon as practicable following the determination of earning and vesting made in accordance with Section 2.1 hereof, all Performance Shares not so determined to have been earned by and vested in the Grantee shall be forfeited and transferred back to the Company.

2.3

Effect of Change in Control. Notwithstanding anything contained in this Agreement to the contrary and unless otherwise provided in the Plan or another agreement between the Company and the Grantee, in the event of a Change in Control all Performance Shares shall vest in the Grantee on the following basis and subject to the following conditions:

(i)

If a Change in Control occurs prior to the last day of the Performance Cycle, the Grantee shall become vested in a number of Performance Shares hereunder determined as follows:

A.

First, the Company shall be deemed to have achieved the Target Performance as set forth above.

B.

Next, the number of Performance Shares earned as a result Clause (A) of this Paragraph (i) is multiplied by a fraction, the numerator of which is the number of months of the Grantee's continuous employment within the Performance Cycle prior to the Change in Control and the denominator of which is the number of months within the entire Performance Cycle.

(ii)

Distribution of the Grantee's vested Performance Shares as determined in Paragraph (i) hereof shall be made as soon as practicable after the first occurrence of a Change in Control. Upon the making of any such distribution, this Grant and the underlying Performance Shares shall be deemed canceled and of no further force and effect.

Certain Restrictions.

3.1

Non-transferability. Until such time (the “Lapse Date”) as the Grantee is determined in accordance with Section 2. 1 or Section 2.3 hereof to have earned and become vested in any Performance Shares covered by this Grant, the Grantee shall not be entitled to transfer, sell, pledge, hypothecate or assign any Performance Shares (collectively, the "Transfer Restrictions"). This Grant and the underlying Performance Shares shall not be transferable by the Grantee otherwise than by will or the laws of descent and distribution, or to his or her guardian, executor, administrator or other legal representative (each a "Legal Representative") (all references herein to "Grantee" being deemed to include the Grantee's Legal Representative, if any, unless the context otherwise requires). The terms of such Grant shall be final, binding and conclusive upon the beneficiaries, executors, administrators, heirs and successors of the Grantee. The Grantee may designate in writing on forms prescribed by and filed with the Company a beneficiary or beneficiaries to receive any benefits payable after his or her death, and may at any time amend or revoke such designation. If no beneficiary designation is in effect at the time of the Grantee's death, payments under this Agreement, if any, shall be made to his or her Legal Representative.

3.2

Employment Termination. Except as may be agreed between the Committee and the Grantee or otherwise provided in the Plan or another agreement between the Company and the Grantee, if the Grantee shall no longer be employed by the Company or any of its Subsidiaries for any reason whatsoever prior to the end of the Performance Cycle ("Terminated" or a "Termination"), the Grantee shall forfeit any right or entitlement to or in the Grant and the underlying Performance Shares; provided, however, that if the Termination occurs six (6) months or more after the date this Grant was made but prior to the last day of the Performance Cycle due to the occurrence of the Grantee's death, approved retirement, termination without cause, other approved separation from employment, or disability, the Grantee may become vested in a number of Performance Shares hereunder, the number being determined as follows: A. First, the number of Performance Shares which would have vested in the Grantee as of the last day of the Performance Cycle had the Grantee remained employed throughout such Performance Cycle shall be calculated upon completion of the Performance Cycle in accordance with Section 2.1 hereof. B. Next, the result obtained in Clause (A) of this Section 3.2 shall be multiplied by a fraction, the numerator of which is the number of months of such Grantee's continuous employment within the Performance Cycle prior to Termination, and the denominator of which is the number of months within the entire Performance Cycle.

3.3

Shareholder Rights. 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 Performance Shares (whether or not the Transfer Restrictions thereon shall have lapsed), other than with respect to those Performance Shares which have been forfeited pursuant to Section 2.2 hereof, including the right to vote the Performance Shares and the right, subject to Section 3.4 hereof, to receive dividends thereon.

3.4

Dividends. All dividends declared and paid by the Company on Performance Shares shall be deferred in their distribution to the Grantee until the lapsing of the Transfer Restrictions pursuant to Sections 2.1, 2.3 and 3.1. The deferred dividends shall be held by the Company 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. In the event of any forfeiture of the Performance Shares pursuant to Section 2.2, any deferred dividends pertaining to such forfeited shares shall also be forfeited to the Company.

7.

Share Issuance, Etc.

Prohibition Against Certain Activities.

9.1

Restricted Activities. The Grantee understands that the Company is granting to the Grantee the Performance Shares to reward the Grantee for the Grantee's future efforts and loyalty to the Company and its Affiliates by giving the Grantee the opportunity to participate in the equity of the Company. Accordingly, and in order to better protect the goodwill of the Company and thereby ensure the long-term success of the business, the Grantee 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 Grantee 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 Grantee 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 Grantee 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, the Grantee agrees that s/he will not at any time during his/her employment with the Company or any Affiliate and 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).

Remedies.

9.2.1

By acceptance of the Performance Shares, the Grantee acknowledges that if the Grantee were, without the prior written consent of Company, to violate, or threaten to violate, any of the provisions of Section 9.1, the Company would be entitled to a temporary restraining order and injunctive relief and other appropriate relief to prevent the Grantee from doing so, without the necessity of posting bond or proving irreparable harm such as being conclusively admitted by the Grantee. The Grantee acknowledges that the harm caused to the Company by the breach or anticipated breach of Section 9.1 is by its nature irreparable because, among other things, it is not readily susceptible of proof as to the monetary harm that would ensue. The Grantee further acknowledges that the restrictions set forth in Section 9.1 are reasonable in scope and duration and are necessary to protect the Company’s legitimate business interests, given the nature of the business of the Company. The Grantee agrees that the provisions of Section 9.1 hereof, and/or the issuance of an injunction restraining the Grantee from breaching such provisions of Section 9.1 will not pose an unreasonable restriction on Grantee’s ability to earn a living, pursue an occupation or obtain employment or other work following the Grantee’s termination of employment with the Company or any of its Affiliates. The Grantee consents that any interim or final equitable relief entered by a court of competent jurisdiction shall, at the request of the Company, be entered on consent and enforced by any court having jurisdiction over the Grantee, without prejudice to any rights either party may have to appeal from the proceedings which resulted in any grant of such relief.

9.2.2

If any of the provisions contained in Section 9.1 shall for any reason, whether by application of existing law or law which may develop after the Grantee’s acceptance of the Performance Shares, be determined by a court of competent jurisdiction to be overly broad as to scope of activity, duration, or territory, the Grantee agrees to join the Company in requesting such court to construe such provision by limiting or reducing it so as to be enforceable to the extent compatible with then applicable law.

9.2.3

In the event the Grantee violates any provision of Section 9.1 or is charged or convicted of a crime against the Company or any Affiliate, then, in addition to other remedies available to the Company provided herein, and any other remedies provided by operation of law, the Company shall be entitled, in its sole discretion and irrespective of whether a Lapse Date has occurred, to require upon written demand the forfeiture of (and the Grantee shall be obligated upon such written demand to repay) the Performance Shares to the Company (including any net cash proceeds from the sale of any Performance Shares by the Grantee).