Exhibit 99.3
Form of Indemnification Agreement
THE YANKEE CANDLE COMPANY, INC.
INDEMNIFICATION AGREEMENT
This Agreement is made as of June 2, 2005, by and between The Yankee
Candle Company, Inc., a Massachusetts corporation (the "Corporation"), and
___________________ ("Indemnitee"), a director or officer of the Corporation.
WHEREAS, it is essential to the Corporation to retain and attract as
directors and officers the most capable persons available, and
WHEREAS, the threat of corporate litigation subjects directors and
officers to expensive litigation risks while directors' and officers' liability
insurance has become more expensive and limited in coverage, and
WHEREAS, it is the express policy of the Corporation to indemnify its
directors and officers so as to provide them with the maximum possible
protection permitted by law, and
WHEREAS, Indemnitee does not regard the protection available under the
Corporation's Articles of Organization and insurance as adequate in the present
circumstances, and may not be willing to serve or continue to serve as a
director or officer of the Corporation without adequate protection, and
WHEREAS, the Corporation desires Indemnitee to serve, or continue to
serve, as a director or officer of the Corporation.
NOW THEREFORE, the Corporation and Indemnitee do hereby agree as follows:
1. Agreement to Serve. Indemnitee agrees to serve or continue to serve as
a director or officer of the Corporation for so long as Indemnitee is duly
elected or appointed or until such time as Indemnitee tenders his or her
resignation in writing.
2. Definitions. As used in this Agreement:
(a) The term "Corporate Status" shall mean the status of a person
who is or was a director or officer of the Corporation or who, while a director
or officer of the Corporation, is or was serving at the Corporation's request as
a director, officer, partner, trustee, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other entity. A
director or officer is considered to be serving an employee benefit plan at the
Corporation's request if his or her duties to the Corporation also impose duties
on, or otherwise involve services by, him or her to the plan or to participants
in or beneficiaries of the plan.
(b) The term "Disinterested Director" shall mean a director of the
Corporation who, at the time of a vote referred to in Paragraph 8 of this
Agreement, is not (i) a party to the Proceeding, or (ii) an individual having a
familial, financial, professional or employment relationship with Indemnitee,
which relationship would, in the circumstances, reasonably be expected to exert
an influence on the director's judgment when voting on the decision being made.
(c) The term "Expenses" shall include, without limitation,
attorneys' fees, retainers, court costs, transcript costs, fees and expenses of
experts, travel expenses, duplicating costs, printing and binding costs,
telephone and telecopy charges, postage, delivery service fees and other
disbursements or
expenses of the type customarily incurred in connection with a Proceeding, but
shall not include the amount of judgments, fines or penalties against Indemnitee
or amounts paid in settlement in connection with such matters.
(d) The term "Liability" shall mean the obligation to pay a
judgment, settlement, penalty, fine (including an excise tax assessed with
respect to an employee benefit plan) or reasonable Expenses incurred with
respect to a Proceeding.
(e) The term "Proceeding" shall mean any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative,
arbitrative or investigative and whether formal or informal.
3. Indemnification.
(a) The Corporation shall indemnify Indemnitee if Indemnitee was, is
or is threatened to be made a defendant or respondent in a Proceeding because of
Indemnitee's Corporate Status as a director of the Corporation against Liability
incurred in the Proceeding if (i) (1) Indemnitee conducted himself or herself in
good faith, and (2) Indemnitee reasonably believed that his or her conduct was
in the best interests of the Corporation or that his or her conduct was at least
not opposed to the best interests of the Corporation, and (3) in the case of any
criminal proceeding, Indemnitee had no reasonable cause to believe his or her
conduct was unlawful, or (ii) Indemnitee engaged in conduct for which Indemnitee
shall not be liable under a provision of the Corporation's Articles of
Organization authorized by Section 2.02(b)(4) of Chapter 156D of the General
Laws of the Commonwealth of Massachusetts ("Chapter 156D") or any predecessor or
successor provision to such Section. The Corporation shall indemnify Indemnitee
if Indemnitee was, is or is threatened to be made a defendant or respondent in a
Proceeding because of Indemnitee's Corporate Status as an officer of the
Corporation against Liability incurred in the Proceeding, except for Liability
arising out of acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law.
(b) Indemnitee's conduct with respect to an employee benefit plan
for a purpose Indemnitee reasonably believed to be in the interests of the
participants in, and the beneficiaries of, the plan is conduct that satisfies
the requirement that Indemnitee's conduct was at least not opposed to the best
interests of the Corporation.
(c) The termination of a Proceeding by judgment, order, settlement
or conviction, or upon a plea of nolo contendere or its equivalent, is not, of
itself, determinative that Indemnitee did not meet the relevant standard of
conduct described in this Paragraph 3.
4. Exceptions to Right of Indemnification. Notwithstanding anything to the
contrary in this Agreement, except as set forth in Paragraphs 9 and 10, the
Corporation shall not indemnify Indemnitee in connection with a Proceeding (or
part thereof) initiated by Indemnitee unless the initiation thereof was approved
by the Board of Directors of the Corporation (the "Board of Directors").
Notwithstanding anything to the contrary in this Agreement, the Corporation
shall not indemnify Indemnitee to the extent Indemnitee is reimbursed from the
proceeds of insurance, and in the event the Corporation makes any
indemnification payments to Indemnitee and Indemnitee is subsequently reimbursed
from the proceeds of insurance, Indemnitee shall promptly refund such
indemnification payments to the Corporation to the extent of such insurance
reimbursements.
5. Indemnification of Expenses of Successful Party. Notwithstanding any
other provision of this Agreement, to the extent that Indemnitee has been wholly
successful, on the merits or otherwise, in the defense of any Proceeding to
which Indemnitee was a party because of Indemnitee's Corporate Status,
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Indemnitee shall be indemnified against all reasonable Expenses incurred by
Indemnitee or on Indemnitee's behalf in connection therewith. Without limiting
the foregoing, if any Proceeding is disposed of, on the merits or otherwise
(including a disposition without prejudice), without (a) the disposition being
adverse to Indemnitee, (b) an adjudication that Indemnitee was liable to the
Corporation, (c) a plea of guilty or nolo contendere or its equivalent by
Indemnitee, (d) an adjudication that Indemnitee did not act in good faith, (e)
with respect to Indemnitee in his or her Corporate Status as a director of the
Corporation, an adjudication that Indemnitee did not act in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
Corporation, (f) with respect to any criminal proceeding involving Indemnitee in
his or her Corporate Status as a director of the Corporation, an adjudication
that Indemnitee had reasonable cause to believe his or her conduct was unlawful,
and (g) with respect to Indemnitee in his or her Corporate Status as an officer
of the Corporation, an adjudication that Indemnitee's conduct involved
intentional misconduct or a knowing violation of law, Indemnitee shall be
considered for the purposes hereof to have been wholly successful with respect
thereto.
6. Notification and Defense of Claim. As a condition precedent to
Indemnitee's right to be indemnified, Indemnitee must notify the Corporation in
writing as soon as practicable of any Proceeding for which indemnity will or
could be sought by Indemnitee and provide the Corporation with a copy of any
summons, citation, subpoena, complaint, indictment, information or other
document relating to such Proceeding with which Indemnitee is served. With
respect to any Proceeding of which the Corporation is so notified, the
Corporation will be entitled to participate therein at its own expense and/or to
assume the defense thereof at its own expense, with legal counsel reasonably
acceptable to Indemnitee. After notice from the Corporation to Indemnitee of its
election so to assume such defense, the Corporation shall not be liable to
Indemnitee for any legal or other expenses subsequently incurred by Indemnitee
in connection with such claim, other than as provided below in this Paragraph 6.
Indemnitee shall have the right to employ Indemnitee's own counsel in connection
with such claim, but the fees and expenses of such counsel incurred after notice
from the Corporation of its assumption of the defense thereof shall be at the
expense of Indemnitee unless (a) the employment of counsel by Indemnitee has
been authorized by the Corporation, (b) counsel to Indemnitee shall have
reasonably concluded that there may be a conflict of interest or position on any
significant issue between the Corporation and Indemnitee in the conduct of the
defense of such action or (c) the Corporation shall not in fact have employed
counsel to assume the defense of such action, in each of which cases the
reasonable fees and expenses of counsel for Indemnitee shall be at the expense
of the Corporation, except as otherwise expressly provided by this Agreement.
The Corporation shall not be entitled, without the consent of Indemnitee, to
assume the defense of any claim brought by or in the right of the Corporation or
as to which counsel for Indemnitee shall have reasonably made the conclusion
provided for in clause (b) above. The Corporation shall not be required to
indemnify Indemnitee under this Agreement for any amounts paid in settlement of
any Proceeding effected without its written consent. The Corporation shall not
settle any Proceeding in any manner which would impose any penalty or limitation
on Indemnitee without Indemnitee's written consent. Neither the Corporation nor
Indemnitee will unreasonably withhold its or his or her consent to any proposed
settlement.
7. Advancement of Expenses. In the event that (a) the Corporation does not
assume the defense pursuant to Paragraph 6 of this Agreement of any Proceeding
to which Indemnitee is a party or is threatened to be made a party by reason of
Indemnitee's Corporate Status or by reason of any action alleged to have been
taken or omitted in connection therewith and of which the Corporation receives
notice under this Agreement or (b) the Corporation assumes such defense but
Indemnitee is, pursuant to Paragraph 6 of this Agreement, nonetheless entitled
to have the fees and costs of Indemnitee's own counsel paid for by the
Corporation, any Expenses incurred by Indemnitee or on his or her behalf in
defending such Proceeding shall be paid by the Corporation in advance of the
final disposition of such Proceeding; provided, however, that the payment of
such Expenses incurred by Indemnitee or on his or her behalf in advance of the
final disposition of such Proceeding shall be made only upon receipt of (a) a
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written affirmation of Indemnitee's good faith belief that Indemnitee has met
the applicable standard of conduct described in Paragraph 3 of this Agreement or
that the Proceeding involves conduct for which Liability has been eliminated
under a provision of the Corporation's Articles of Organization as authorized by
Section 2.02(b)(4) of Chapter 156D or any predecessor or successor provision to
such Section and (b) an unlimited undertaking by or on behalf of Indemnitee to
repay all amounts so advanced in the event that it shall ultimately be
determined that Indemnitee is not entitled to be indemnified by the Corporation
as authorized in this Agreement. Such Expenses shall be paid promptly following
the Corporation's receipt of Indemnitee's written affirmation of conduct and
unlimited undertaking to repay advanced amounts in the event Indemnitee is not
entitled to indemnification. The undertaking referred to in clause (b) above
shall be an unlimited general obligation of Indemnitee and shall be accepted
without reference to Indemnitee's financial ability to make repayment.
8. Procedure for Indemnification. In order to obtain indemnification
pursuant to Paragraphs 3 or 5 of this Agreement, Indemnitee shall submit to the
Corporation a written request, including in such request such documentation and
information as is reasonably available to Indemnitee and is reasonably necessary
to determine whether and to what extent Indemnitee is entitled to
indemnification. Any such indemnification shall be made promptly, and in any
event within 60 days after receipt by the Corporation of the written request of
Indemnitee, unless with respect to requests under Paragraph 3 the Corporation
determines within such 60-day period that Indemnitee did not meet the applicable
standard of conduct set forth in Paragraph 3. Except as set forth in the last
sentence of this Paragraph 8, the determination of whether Indemnitee has met
the relevant standard of conduct set forth in Paragraph 3 shall be made in each
instance (a) if there are two or more Disinterested Directors, by the Board of
Directors by a majority vote of all the Disinterested Directors, a majority of
whom shall for such purpose constitute a quorum, or by a majority of the members
of a committee of two or more Disinterested Directors appointed by vote; (b) by
special legal counsel (i) selected in the manner prescribed in clause (a), or
(ii) if there are fewer than two Disinterested Directors, selected by those
members of the Board of Directors who do not qualify as Disinterested Directors;
or (c) by the shareholders of the Corporation. Notwithstanding anything to the
contrary herein, to the extent Indemnitee is an officer and not a director of
the Corporation, the determination of whether Indemnitee has met the relevant
standard of conduct set forth in Paragraph 3 shall be made by the Board of
Directors.
9. Right to Seek Court-Ordered Indemnification and Advance of Expenses.
Nothing contained in this Agreement shall abrogate or limit the right of
Indemnitee to apply to a court of competent jurisdiction for indemnification or
an advance of Expenses to the extent permitted by Section 8.54 of Chapter 156D
or any successor Section thereto that increases the scope of permitted
indemnification.
10. Remedies. The right to indemnification and advancement of Expenses as
provided by this Agreement shall be enforceable by Indemnitee in any court of
competent jurisdiction. Unless otherwise required by law, the burden of proving
that indemnification is not appropriate shall be on the Corporation. Neither the
failure of the Corporation to have made a determination prior to the
commencement of such action that indemnification is proper in the circumstances
because Indemnitee has met the applicable standard of conduct, nor an actual
determination by the Corporation pursuant to Paragraph 8 that Indemnitee has not
met such applicable standard of conduct, shall be a defense to the action or
create a presumption that Indemnitee has not met the standard of conduct.
Indemnitee's expenses (of the type described in the definition of "Expenses" in
Paragraph 2(c)) reasonably incurred in connection with successfully establishing
his or her right to indemnification, in whole, or in part, in any such
Proceeding shall also be indemnified by the Corporation.
11. Partial Indemnification. If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Corporation for some or a portion of
the Expenses, judgments, fines, penalties
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or amounts paid in settlement actually and reasonably incurred by him or her or
on his or her behalf in connection with any Proceeding but not, however, for the
total amount thereof, the Corporation shall nevertheless indemnify Indemnitee
for the portion of such Expenses, judgments, fines, penalties or amounts paid in
settlement to which Indemnitee is entitled.
12. Subrogation. In the event of any payment under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all papers required and take
all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Corporation to bring suit to enforce
such rights.
13. Term of Agreement. This Agreement shall continue until and terminate
upon the later of (a) six years after the date that Indemnitee shall have ceased
to serve as a director or officer of the Corporation or, at the request of the
Corporation, as a director, officer, partner, trustee, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise or (b) the final termination of all Proceedings pending on the
date set forth in clause (a) in respect of which Indemnitee is granted rights of
indemnification or advancement of Expenses hereunder and of any Proceeding
commenced by Indemnitee pursuant to Paragraph 10 of this Agreement relating
thereto.
14. Indemnification Hereunder Not Exclusive. The indemnification and
advancement of Expenses provided by this Agreement shall not be deemed exclusive
of any other rights to which Indemnitee may be entitled under the Corporation's
Articles of Organization or Bylaws, any agreement, any vote of shareholders or
directors of the Corporation, Chapter 156D, any other law (common or statutory)
or otherwise, both as to action in Indemnitee's official capacity and as to
action in another capacity while holding office for the Corporation. Nothing
contained in this Agreement shall be deemed to prohibit the Corporation from
purchasing and maintaining insurance, at its expense, to protect itself or
Indemnitee against any expense, liability or loss incurred by it or him or her
in any such capacity, or arising out of Indemnitee's status as such, whether or
not Indemnitee would be indemnified against such expense, liability or loss
under this Agreement; provided that the Corporation shall not be liable under
this Agreement to make any payment of amounts otherwise indemnifiable hereunder
if and to the extent that Indemnitee has otherwise actually received such
payment under any insurance policy, contract, agreement or otherwise.
15. No Special Rights. Nothing herein shall confer upon Indemnitee any
right to continue to serve as an officer or director of the Corporation for any
period of time, or at any particular rate of compensation.
16. Savings Clause. If this Agreement or any portion thereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify Indemnitee as to Expenses, judgments,
fines, penalties and amounts paid in settlement with respect to any Proceeding
to the full extent permitted by any applicable portion of this Agreement that
shall not have been invalidated and to the fullest extent permitted by
applicable law.
17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute the original.
18. Successors and Assigns. This Agreement shall be binding upon the
Corporation and its successors and assigns and shall inure to the benefit of the
estate, heirs, executors, administrators and personal representatives of
Indemnitee.
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19. Headings. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
20. Modification and Waiver. This Agreement may be amended from time to
time to reflect changes in Massachusetts law or for other reasons. No
supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by both of the parties hereto. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provision hereof nor shall any such waiver constitute a continuing waiver.
21. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been given (a) when
delivered by hand or (b) if mailed by certified or registered mail with postage
prepaid, on the third day after the date on which it is so mailed:
(i) if to Indemnitee, to the address appearing on the signature
page of this Agreement.
(ii) if to the Corporation, to:
16 Yankee Xxxxxx Xxx
X.X. Xxx 000
Xxxxx Xxxxxxxxx, XX 00000
Attn: General Counsel
or to such other address as may have been furnished to Indemnitee by the
Corporation or to the Corporation by Indemnitee, as the case may be.
22. Applicable Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the Commonwealth of Massachusetts.
23. Enforcement. The Corporation expressly confirms and agrees that it has
entered into this Agreement in order to induce Indemnitee to serve or to
continue to serve as a director or officer of the Corporation, and acknowledges
that Indemnitee is relying upon this Agreement in continuing in such capacity.
24. Entire Agreement. This Agreement sets forth the entire agreement of
the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, whether oral or written, by any officer,
employee or representative of any party hereto in respect of the subject matter
contained herein; and any prior agreement of the parties hereto in respect of
the subject matter contained herein is hereby terminated and cancelled. For
avoidance of doubt, the parties confirm that the foregoing does not apply to or
limit Indemnitee's rights under Massachusetts law or the Corporation's Articles
of Organization or Bylaws.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
THE YANKEE CANDLE COMPANY, INC.
By: /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chairman and Chief Executive Officer
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INDEMNITEE:
_____________________________________
Name:
Address:_____________________________
_____________________________________
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