Exhibit 3
STOCKHOLDER'S AGREEMENT, dated as of [__________], 1999, between
The Yankee Candle Company, Inc., a Massachusetts corporation (the
"Company"), and [Name] (the "Employee").
WHEREAS, Forstmann Little & Co. Equity Partnership-V, L.P., a
Delaware limited partnership ("Equity-V"), and Forstmann Little & Co.
Subordinated Debt and Equity Management Buyout Partnership-V, L.P., a
Delaware limited partnership ("MBO-VI"), will own shares of Common Stock,
par value $0.01 per share, of the Company;
WHEREAS, the Employee purchased shares of Class B Common Stock
("Class B Common Stock"), par value $0.01 per share, of Yankee Candle
Holdings Corp., a Delaware corporation ("Holdings"), on the terms and
subject to the conditions set forth in the Stockholder's Agreement, dated
as of [_______,] 1998 (the "Old Stockholder's Agreement");
WHEREAS, in a reorganization that will occur in connection with
the initial public offering (the "Offering") of the Company, shares of
Class B Common Stock will be exchanged for shares of Common Stock, par
value $0.01 per share, of the Company;
WHEREAS, effective upon the closing of the Offering, the Employee
will own shares of Common Stock and the Old Stockholder's Agreement will be
cancelled (and all rights and obligations thereunder will be null and
void); and
WHEREAS, the Employee and the Company wish to provide for certain
arrangements with respect to the Employee's rights to hold and dispose of
the shares of Common Stock.
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions
-----------
1.1 Definitions; Rules of Construction.
----------------------------------
(a) The following terms, as used herein, shall have the
following meanings:
"Act" shall mean the Securities Act of 1933, as amended.
"Affiliate" shall mean, with respect to any Person, any
other Person which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person.
"Affiliate Securities" shall mean any securities issued by
an Affiliate of the Company.
"Aggregate Number of Acquired Shares" shall mean the
aggregate number of shares of Common Stock acquired by the Employee
pursuant hereto (adjusted, where appropriate, to reflect any Capital
Transaction).
"Aggregate Number of Shares Sold" shall mean, as at any
date, the aggregate number of shares sold by the Employee pursuant to
Section 2.3, 2.4 or 2.5 hereof prior to such date, if any (adjusted, where
appropriate, to reflect any Capital Transaction effected after the date of
any such sale).
"Agreement" shall mean this Stockholder's Agreement, as
amended, supplemented or modified from time to time.
"Book Value of the Company" shall mean the sum of (x) the
total assets minus the total liabilities of the Company on a consolidated
basis, plus (y) the amount of any reduction in stockholders' equity
resulting from the application of EITF Issue Summary No. 88-16, Basis in
Leveraged Buyouts, as of the Valuation Date, plus (z) the amount of
accumulated amortization of that portion of the purchase price paid for the
Company by the FL & Co. Companies that was allocated to goodwill, excluding
other acquired identified intangible assets. For purposes of calculating
the Book Value of the Company and the Book Value Per Share, (i) all options
and other rights to acquire equity interests in the Company outstanding
immediately prior to the Delivery Date or exercised between the Valuation
Date and the Delivery Date shall be deemed to have been exercised on the
Valuation Date, and (ii) the number of outstanding shares on the Valuation
Date shall be increased by the number of shares subject to each such option
or other right and the assets of the Company shall be increased by the
aggregate exercise price payable in respect of the exercise of each such
option or other right (with respect to clauses (i) and (ii), in the case of
any such option or other right unless the effect thereof would be to
increase the Book Value Per Share).
"Book Value Per Share" shall mean the amount which would be
payable on the Valuation Date in respect of one share of Common Stock in
the event of a dissolution, liquidation or winding-up of the affairs of the
Company if the amount of assets available for distribution in the event of
such dissolution, liquidation or winding-up with respect to all shares of
capital stock of the Company outstanding (or deemed to be outstanding, as
set forth above in the definition of "Book Value of the Company") on the
Valuation Date were equal to the Book Value of the Company. In the event
there has been a Stock Dividend after the Valuation Date and prior to the
Election Date, the number of shares outstanding for purposes of determining
Book Value Per Share shall be the number of shares that would have been
outstanding immediately after the Stock Dividend on the Valuation Date had
the Stock Dividend occurred on the Valuation Date.
"Call Shares" shall have the meaning ascribed to such term
in Section 2.2(d) hereof.
"Capital Transaction" shall mean any Stock Dividend,
recapitalization (including, without limitation, any special dividend or
distribution), reclassification, spin-off, partial liquidation or similar
capital adjustments (including, without limitation, through merger or
consolidation).
"Common Stock" shall mean the Common Stock, par value $0.01
per share, of the Company. There shall be included within the term Common
Stock any Common Stock now or hereafter authorized to be issued, and any
and all securities of any kind whatsoever of the Company which may be
issued after the date hereof in respect of, or in exchange for, shares of
Common Stock pursuant to a Capital Transaction or otherwise.
"Company" shall mean The Yankee Candle Company, Inc., a
Massachusetts corporation, and shall include any successor thereto by
merger, consolidation, acquisition of substantially all the assets thereof,
or otherwise.
"Competitive Activity" shall mean engaging in any of the
following activities: (i) serving as a director of any Competitor; (ii)
directly or indirectly (X) controlling any Competitor or (Y) owning any
equity or debt interests in any Competitor (other than equity or debt
interests which are publicly traded and do not exceed 2% of the particular
class of interests then outstanding) (it being understood that, if any such
interests in any Competitor are owned by an investment vehicle or other
entity in which the Employee owns an equity interest, a portion of the
interests in such Competitor owned by such entity shall be attributed to
the Employee, such portion determined by applying the percentage of the
equity interest in such entity owned by the Employee to the interests in
such Competitor owned by such entity); (iii) directly or indirectly
soliciting, diverting, taking away, appropriating or otherwise interfering
with any of the customers or suppliers of the Company or any Affiliate of
the Company; or (iv) employment by (including serving as an officer or
director of), or providing consulting services to, any Competitor;
provided, however, that if the Competitor has more than one discrete and
readily distinguishable part of its business, employment by or providing
consulting services to any Competitor shall be Competitive Activity only if
(1) his or her employment duties are at or involving the part of the
Competitor's business that competes with any of the businesses conducted by
the Company or any of its subsidiaries (the "Competing Operations"),
including serving in a capacity where any person at the Competing
Operations reports to the Employee, or (2) the consulting services are
provided to or involve the Competing Operations. For purposes of this
definition, the term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of any Competitor, whether through the ownership of equity or
debt interests, by contract or otherwise. Notwithstanding the foregoing,
the term "Competitive Activity" shall not include the direct or indirect
ownership or operation of, investment in, or employment or engagement by a
Person that is a Competitor solely because such Person is an independent
retail gift shop or retail garden shop, provided that (i) if such gift shop
sells candles or other home fragrancing products, such products must be
manufactured solely by the Company or its Affiliates, (ii) such gift shop
is not located within a 50 mile radius of any retail gift store owned by
the Company or its Affiliates, and (iii) such retail gift shop does not
have revenues in excess of $2 million per year.
"Competitor" shall mean any Person that competes either
directly or indirectly with any of the businesses in which, at the time the
Employee's employment is Terminated, the Company or any of its subsidiaries
is engaged.
"Delivery Date" shall have the meaning ascribed to such term
in Section 2.2(b) hereof.
"Election Date" shall have the meaning ascribed to such term
in Section 2.2(a) hereof.
"Equity-V" shall have the meaning ascribed to such term in
the first "Whereas" clause hereof.
"Expenses of Sale" shall mean all expenses incurred by the
FL & Co. Companies in connection with the sale of the shares of the selling
stockholders pursuant to Section 2.3, 2.4 or 2.5 hereof to the extent that
such expenses are not paid or reimbursed by the Company.
"FL & Co. Companies" shall mean the collective reference to
Equity-V and MBO-VI.
"Legal Representative" shall mean the guardian, executor,
administrator or other legal representative of the Employee. All references
herein to the Employee shall be deemed to include references to the
Employee's Legal Representative, if any, unless the context otherwise
requires.
"Litigation" shall mean any actions, suits or proceedings
arising out of or relating to this Agreement and the transactions
contemplated hereby.
"MBO-VI" shall have the meaning ascribed to such term in the
first "Whereas" clause hereof.
"Permitted Transferee" shall have the meaning ascribed to
such term in Section 2.1 hereof.
"Person" shall mean an individual, a corporation, a
partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or
instrumentality thereof.
"Prohibited Activity" shall have the meaning ascribed to
such term in Section 3.1 hereof.
"Purchase Price" shall have the meaning ascribed to such
term in Section 2.2(c) hereof.
"Purchase Price Certificate" shall have the meaning ascribed
to such term in Section 2.2(b) hereof.
"Release Date" shall mean the date on which the FL & Co.
Companies and their affiliates shall cease to own in the aggregate directly
or indirectly at least 20 percent of the then outstanding securities of the
Company having the power to vote in the election of directors of the
Company.
"Representative" shall have the meaning ascribed to such
term in Section 5.13(b) hereof.
"Repurchase Notice" shall have the meaning ascribed to such
term in Section 4.2 hereof.
"Sale Obligations" shall mean any liabilities and
obligations (including liabilities and obligations for indemnification,
amounts paid into escrow and post-closing adjustments) incurred by the
selling stockholders in connection with the sale of their shares pursuant
to Section 2.3, 2.4 or 2.5 hereof.
"Scheduled Closing Date" shall have the meaning ascribed to
such term in Section 3.2(d) hereof.
"Section 2.3 Notice" shall have the meaning ascribed to such
term in Section 2.3 hereof.
"Section 2.4 Notice" shall have the meaning ascribed to such
term in Section 2.4 hereof.
"Stock Dividend" shall mean any stock split, stock dividend,
reverse stock split or similar transaction which changes the number of
outstanding shares of capital stock of the Company.
"Termination" or "Terminated" shall mean that the Employee's
employment on a full-time basis by the Company and its subsidiaries shall
have ceased for any reason whatsoever (including by reason of death,
permanent disability or adjudicated incompetency).
"Third Party" shall mean any Person other than any FL & Co.
Company or an Affiliate or a partner of any of the FL & Co. Companies or an
Affiliate of such partner.
"Transaction" shall mean any sale pursuant to Section 2.3,
2.4 or 2.5 hereof.
"Unvested Shares" shall mean, as at any date, all shares of
Common Stock owned by the Employee which are not Vested Shares as of such
date.
"Valuation Date" shall mean the last day of the fiscal
quarter of the Company immediately preceding the fiscal year in which the
Employee's employment is Terminated.
"Vested Shares" shall mean the number of shares of Common
Stock determined as follows: (i) if the Employee is Terminated on or before
[______________], zero; (ii) if the Employee is Terminated after
[______________] but on or before [______________], (x) 20 percent of the
Aggregate Number of Acquired Shares minus (y) the Aggregate Number of
Shares Sold; (iii) if the Employee is Terminated after [______________] but
on or before [______________], (x) 40 percent of the Aggregate Number of
Acquired Shares minus (y) the Aggregate Number of Shares Sold; (iv) if the
Employee is Terminated after [______________] but on or before
[______________], (x) 60 percent of the Aggregate Number of Acquired Shares
minus (y) the Aggregate Number of Shares Sold; (iv) if the Employee is
Terminated after [______________] but on or before [______________], (x) 80
percent of the Aggregate Number of Acquired Shares minus (y) the Aggregate
Number of Shares Sold; and (vi) if the Employee is Terminated after
[______________], (x) the Aggregate Number of Acquired Shares minus (y) the
Aggregate Number of Shares Sold.
(b) In this Agreement, unless the context otherwise
requires, words in the singular number or in the plural number shall each
include the singular number and the plural number.
2. Rights and Restrictions on Common Stock.
----------------------------------------
2.1 Effectiveness of Agreement; No Sale or Transfer.
-----------------------------------------------
(a) This Agreement shall become effective as of the closing
of the Offering and shall apply to shares of Common Stock acquired in
exchange for shares of Class B Common Stock (subject to the provisions of
Section 5.1).
(b) The Employee shall not sell, transfer, assign, exchange,
pledge, encumber or otherwise dispose of any shares of Common Stock or
grant any option or right to purchase such shares or any legal or
beneficial interest therein, except in accordance with the provisions of
this Agreement.
(c) The Employee may transfer any shares of Common Stock by
will, but only to:
(i) any spouse, parent, child (whether natural or
adopted), brother or sister of the Employee, or
(ii) any corporation or partnership which is controlled
by any spouse, parent, child (whether natural or adopted),
brother or sister of the Employee
(the person or persons to which shares of Common Stock are transferred in
accordance with this Section 2.1(b) being herein referred to as the
"Permitted Transferee"); provided, that, for any transfer to the Permitted
Transferee to be effective hereunder, the Permitted Transferee shall agree
in writing to be bound by all the terms of this Agreement applicable to the
Employee (including, without limitation, Article 3 and Section 5.13(b)
hereof) as if the Permitted Transferee originally had been a party hereto;
and provided, further, that all of the stockholders of any Permitted
Transferee that is a corporation and all of the partners of any Permitted
Transferee that is a partnership shall agree in writing not to transfer any
shares they then own or may hereafter acquire in the corporate Permitted
Transferee or any partnership interests they then own or may hereafter
acquire in the partnership Permitted Transferee except to a person
described in paragraph (i) or (ii) above that has made the same agreement
in writing to the Company, so long as the corporate or partnership
Permitted Transferee shall own any shares of Common Stock. Any reference
herein to the Employee shall be to the Permitted Transferee from and after
the date the transfer is effected in accordance with this Section 2.1(b).
Without limiting the generality of the foregoing, the provisions of Section
3.2 hereof shall be likewise applicable to any Permitted Transferee,
commencing upon the date that such Person becomes a Permitted Transferee,
for the respective periods they would have applied to the Employee.
2.2 Employment Termination.
----------------------
(a) If the Employee shall be Terminated, irrespective of
whether the Employee receives, in connection with such Termination, any
severance or other payment from the Company or any of its Affiliates under
any employment agreement or otherwise, the Company shall have the right, at
its option, exercisable by delivery of written notice to the Employee
within 90 days following the date of Termination (the date of delivery of
such written notice being referred to herein as the "Election Date"), to
purchase all or any portion of the Unvested Shares held by the Employee as
of the date of such Termination. Any Vested Shares and any Unvested Shares
that the Company does not elect to repurchase pursuant to the provisions of
this Section 2.2(a) shall continue to be subject to the provisions of this
Agreement (including, without limitation, Sections 2.3, 2.4 and 2.5 and
Article 3 hereof) other than this Section 2.2.
(b) If the Company exercises its purchase right pursuant to
Section 2.2(a) hereof, then, within 15 days following the later of the
Election Date or the date the financial statements referred to below are
available (such date of delivery being referred to herein as the "Delivery
Date"), the Company shall deliver to the Terminated Employee a certificate
of the chief financial officer of the Company setting forth the Purchase
Price and the calculation thereof and the Book Value of the Company and
stating that a copy of the Company's financial statements as of the
Valuation Date are available for review at the principal office of the
Company (the "Purchase Price Certificate"), and shall make available to the
Employee, for review at the principal office of the Company, a copy of the
Company's financial statements as of the Valuation Date. The calculations
as set forth on the Purchase Price Certificate shall be final and binding
on the Company and the Employee for purposes of this Agreement. The
Employee shall keep the Purchase Price Certificate, the financial
statements and any other documentation provided in connection therewith
confidential, shall not use any such material or any information contained
therein for any purpose other than to verify the amounts due the Employee
in respect of any shares owned by the Employee being purchased by the
Company, and shall not disclose any such material or any information
contained therein to anyone other than the Employee's legal or financial
advisers who have agreed in writing to the equivalent confidentiality,
non-use and non-disclosure provisions contained in this paragraph.
(c) The purchase price per share of the shares of Common
Stock purchased pursuant to Section 2.2(a) hereof (the "Purchase Price")
shall be equal to the Book Value Per Share, adjusted to reflect any Capital
Transaction between the Valuation Date and the Election Date, as if such
event had occurred as of the Valuation Date.
(d) Subject to Section 2.2(e) hereof, the closing (the
"Closing") of any purchase of shares of Common Stock which the Company has
elected to purchase pursuant to Section 2.2(a) hereof (the "Call Shares")
shall take place at the principal office of the Company on the later of (i)
10 days after the Delivery Date (or, in the case of a First-Year
Termination, 10 days after the Election Date) and (ii) (if applicable) 10
days after the appointment of a Legal Representative (such later date, the
"Scheduled Closing Date"). At the Closing, the Employee shall sell, convey,
transfer, assign and deliver to the Company all right, title and interest
in and to the Call Shares, which shall constitute (and, at the Closing, the
Employee shall certify the same to the Company in writing) good and
unencumbered title to such shares, free and clear of all liens, security
interests, encumbrances and adverse claims of any kind and nature (other
than those in favor of the Company and the FL & Co. Companies pursuant to
this Agreement), and shall deliver to the Company a certificate
representing the shares duly endorsed for transfer, or accompanied by
appropriate stock transfer powers duly executed, and with all necessary
transfer tax stamps affixed thereto at the expense of the Employee, and the
Company shall deliver to the Employee, in full payment of the purchase
price for the Call Shares, either a wire transfer to an account designated
by the Employee or a cashier's, certified or official bank check payable to
the order of the Employee (the method of payment to be at the option of the
Company), in the amount equal to the Purchase Price multiplied by the
number of Call Shares. Notwithstanding anything herein to the contrary,
from and after the Election Date, the Employee shall not have any rights
with respect to any of the Call Shares (including any rights pursuant to
Sections 2.3 and 2.4 hereof), except to receive the Purchase Price
therefor.
(e) Notwithstanding the provisions of Section 2.2(d) hereof,
if the Company exercises its option to purchase Unvested Shares pursuant to
Section 2.2(a) hereof, but is prohibited from effecting the Closing on the
Scheduled Closing Date by any contractual obligation of the Company or any
of its Affiliates or by applicable law, then the Closing shall take place
on the first practicable date on which the Company is permitted to purchase
such shares, and, at the Closing, the Company shall pay to the Employee
interest on the unpaid Purchase Price from and including the Scheduled
Closing Date to, but not including, the date of the Closing, at the rate
(as of the Scheduled Closing Date) for a six-month certificate of deposit
at The Chase Manhattan Bank or any successor bank thereto. If at any time
the prohibition shall cease to be applicable to any portion of the shares
not repurchased, then the Company shall purchase such portion on the first
practicable date on which the Company is permitted to do so. The Company
shall not declare or pay any dividend of cash or cash equivalents, or
repurchase any shares of Common Stock or Common Stock for cash or cash
equivalents, until the purchase price for all of the Call Shares has been
paid in full.
2.3 Participation in Sale of Common Stock. The Employee, at the
Employee's option, may participate proportionately (and the FL & Co.
Companies shall allow the Employee to participate proportionately) in any
sale (other than a public offering, which shall be governed by Section 2.4
hereof) of all or a portion of the shares of Common Stock owned by either
of the FL & Co. Companies to any Third Party by selling in such sale the
same percentage of the Employee's shares of Common Stock as the FL & Co.
Companies propose to sell of their shares of Common Stock to the Third
Party (determined on the basis of the aggregate number of shares of Common
Stock owned, and the aggregate number of such shares being sold, by the FL
& Co. Companies). The Company shall notify the Employee in writing of the
FL & Co. Companies' intention to effect such a sale to a Third Party and
the nature and per share amount of consideration to be paid by such Third
Party at least 10 days, or such shorter time as the Company deems
practicable, before the closing of any such proposed sale of shares of
Common Stock (the "Section 2.3 Notice"), and the Employee shall notify the
Company in writing within 5 days after receipt of the Section 2.3 Notice of
his or her intention to participate in such sale, including the number of
shares of Common Stock with respect to which he or she will so participate.
Any failure by the Employee to so notify the Company within such 5 day
period shall be deemed an election by the Employee not to participate in
such sale with respect to any of his or her shares. Any sale of shares of
Common Stock by the Employee pursuant to this Section 2.3 shall be for the
same consideration per share, on the same terms and subject to the same
conditions as the sale of shares of Common Stock owned by the FL & Co.
Companies. If the Employee sells any shares of Common Stock pursuant to
this Section 2.3, the Employee shall pay and be responsible for the
Employee's proportionate share of the Expenses of Sale and the Sale
Obligations.
2.4 Participation in Public Offering of Common Stock.
------------------------------------------------
(a) If the FL & Co. Companies propose to sell all or any
portion of the shares of Common Stock owned by the FL & Co. Companies in a
public offering, the Employee shall be entitled and required to participate
in such public offering by selling in the public offering the same
percentage of the Employee's shares of Common Stock as the FL & Co.
Companies propose to sell of their shares in the public offering
(determined on the basis of the aggregate number of shares of Common Stock
owned, and the aggregate number of such shares being sold, by the FL & Co.
Companies). The Company shall notify the Employee in writing of the FL &
Co. Companies' intention to effect such public offering at least 10 days,
or such shorter time as the Company deems practicable, before the filing
with the Securities and Exchange Commission of the registration statement
relating to such public offering (the "Section 2.4 Notice") and shall cause
the Employee's shares to be sold in such public offering to be included
therein. If the Employee sells any shares pursuant to this Section 2.4, the
Employee shall pay and be responsible for the Employee's proportionate
share of the Expenses of Sale and the Sale Obligations, including, without
limitation, indemnifying the underwriters of such public offering, on a
proportionate basis, to the same extent as the FL & Co. Companies are
required to indemnify such underwriters.
(b) In connection with any proposed public offering of
securities of the Company, whether by any of the FL & Co. Companies or the
Company or otherwise, the Employee agrees (i) to supply any information
reasonably requested by the Company in connection with the preparation of a
registration statement and/or any other documents relating to such public
offering, and (ii) to execute and deliver any agreements and instruments
reasonably requested by the Company to effectuate such public offering,
including, without limitation, an underwriting agreement, a custody
agreement and a "hold back" agreement pursuant to which the Employee will
agree not to sell or purchase any securities of the Company (whether or not
such securities are otherwise governed by this Agreement) for the same
period of time following the public offering as is agreed to by the FL &
Co. Companies with respect to themselves. If the Company requests that the
Employee take any of the actions referred to in clause (i) or (ii) of the
previous sentence, the Employee shall take such action promptly but in any
event within five days following the date of such request.
2.5 Required Participation in Sale of Common Stock by the FL &
Co. Companies. Notwithstanding any other provision of this Agreement to the
contrary, if the FL & Co. Companies shall propose to sell (including by
exchange, in a business combination or otherwise) all or any portion of
their shares of Common Stock in a bona fide arm's-length transaction, the
FL & Co. Companies, at their option, may require that the Employee sell the
same percentage of the Employee's shares of Common Stock as the FL & Co.
Companies propose to sell of their shares in the transaction (determined on
the basis of the aggregate number of shares of Common Stock owned, and the
aggregate number of such shares then being sold, by the FL & Co. Companies)
for the same consideration per share, on the same terms and subject to the
same conditions in the same transaction and, if stockholder approval of the
transaction is required and the Employee is entitled to vote thereon, that
the Employee vote the Employee's shares in favor thereof. If the Employee
sells any shares pursuant to this Section 2.5, the Employee shall pay and
be responsible for the Employee's proportionate share of the Expenses of
Sale and the Sale Obligations.
2.6 Termination of Restrictions and Rights. Notwithstanding any
other provision of this Agreement to the contrary, but subject to the
restrictions of all applicable federal and state securities laws, including
the restrictions in this Agreement relating thereto, from and after the
Release Date any and all shares of Common Stock owned by the Employee (a)
may be sold, transferred, assigned, exchanged, pledged, encumbered or
otherwise disposed of (and the Employee may grant any option or right to
purchase such shares or any legal or beneficial interest therein, or may
continue to hold such shares), free of the restrictions contained in this
Agreement and (b) shall no longer be entitled to any of the rights
contained in this Agreement. Without limiting the generality of the
foregoing, from and after the Release Date, the provisions of Articles 2
and 3 hereof (other than this Section 2.6 and Sections 3.1(a), 3.1(b) and
3.1(c) hereof) shall terminate and have no further force or effect.
3. Prohibited Activities.
---------------------
3.1 Prohibition against Certain Activities. The Employee
agrees that (a) the Employee will not at any time during the Employee's
employment (other than in the course of such employment) with the Company
or any Affiliate thereof, or after a Termination, directly or indirectly
disclose or furnish to any other Person or use for the Employee's own or
any other Person's account any confidential or proprietary knowledge or
information or any other information which is not a matter of public
knowledge and which was obtained during the Employee's employment with, or
other performance of services for, the Company or any Affiliate thereof or
any predecessor of any of the foregoing, no matter from where or in what
manner the Employee may have acquired such knowledge or information, and
the Employee 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 the Employee is Terminated, the Employee will not
for three years following such Termination directly or indirectly solicit
for employment, including without limitation recommending to any subsequent
employer the solicitation for employment of, any employee of the Company,
(c) the Employee will not, at any time during the Employee's employment
with the Company or any Affiliate thereof or after a Termination, publish
any statement or make any statement (under circumstances reasonably likely
to become public or that the Employee might reasonably expect to become
public) critical of the Company or any Affiliate of the Company, or in any
way adversely affecting or otherwise maligning the business or reputation
of any of the foregoing entities, and (d) the Employee will not breach the
provisions of Section 2.1 hereof (any activity prohibited by clause (a),
(b), (c) or (d) of this Section 3.1 being referred to as a "Prohibited
Activity").
3.2 Right to Purchase Shares. The Employee understands and
agrees that Holdings and the Company have granted to the Employee the right
to purchase equity securities to reward the Employee for the Employee's
future efforts and loyalty to the Company and its Affiliates by giving the
Employee the opportunity to participate in the potential future
appreciation of the Company. Accordingly, (a) if the Employee engages in
any Prohibited Activity, or (b) if, at any time during the Employee's
employment with the Company or any of its Affiliates or during the three
years following a Termination, the Employee engages in any Competitive
Activity, or (c) if, at any time (whether during the Employee's employment
or after any Termination thereof), the Employee is convicted of a crime
against the Company or any of its Affiliates, then, in addition to any
other rights and remedies available to the Company, the Company shall be
entitled, at its option, exercisable by written notice (the "Repurchase
Notice") to the Employee, to purchase all of the shares of Common Stock
then held by the Employee.
3.3 Purchase Price; Closing. The purchase price per share of
the shares of Common Stock purchased pursuant to this Article 3 shall be
equal to the lesser of (a) $[____] (adjusted to reflect any Capital
Transaction effected after the Closing Date and prior to the date of the
Repurchase Notice) and (b) the Book Value Per Share (except that any
reference to the Delivery Date or Election Date shall instead be a
reference to the date of the Repurchase Notice). If such purchase price is
determined pursuant to clause (b) of the preceding sentence, then the
Company shall, within 15 days following the later of receipt of the
Employee's written request therefor (which request must be made within
eight days of the date of the Repurchase Notice) and the date the relevant
financial statements are available, provide the Employee with the same
purchase price certificate as is referred to in Section 2.2(b) hereof, and
the Employee hereby agrees to the same confidentiality, non-use and
non-disclosure provisions with respect thereto as are contained in Section
2.2(b) hereof. The calculations as set forth on such certificate shall be
final and binding on the Company and the Employee for purposes of this
Agreement. The closing of such purchase shall take place at the principal
office of the Company 10 days following the date of the Repurchase Notice
or, if a written request therefor was timely made, 10 days following the
date of delivery of the aforesaid certificate, except that if the Company
is prohibited from repurchasing any shares of Common Stock pursuant to this
Article 3 by any contractual obligation of the Company or any of its
Affiliates or by applicable law, the closing of such purchase shall take
place on the first practicable date on which the Company is permitted to
purchase such shares (and the provisions of the last two sentences of
Section 2.2(e) shall likewise apply to repurchases pursuant to this Article
3). At such closing, the Employee shall sell, convey, transfer, assign and
deliver to the Company all right, title and interest in and to the shares
of Common Stock being purchased by the Company, which shall constitute
(and, at the closing, the Employee shall certify the same to the Company in
writing) good and unencumbered title to such shares, free and clear of all
liens, security interests, encumbrances and adverse claims of any kind and
nature (other than those in favor of the Company and the FL & Co. Companies
pursuant to this Agreement), and shall deliver to the Company a certificate
representing the shares duly endorsed for transfer, or accompanied by
appropriate stock transfer powers duly executed, and with all necessary
transfer tax stamps affixed thereto at the expense of the Employee, and the
Company shall deliver to the Employee, in full payment of the purchase
price payable pursuant to this Section 3.3 for the shares of Common Stock
purchased, a check payable to the order of the Employee, in the amount of
the aggregate purchase price for the shares purchased. Notwithstanding
anything herein to the contrary, from and after the date of the Repurchase
Notice, the Employee shall not have any rights with respect to any shares
of Common Stock which the Employee is required to sell to the Company
pursuant to this Article 3 (including any rights pursuant to Section 2.3 or
2.4 hereof), except to receive the purchase price therefor.
3.4 Transaction Proceeds. Notwithstanding anything to the
contrary set forth in Sections 2.3, 2.4 or 2.5 hereof, if at the time of a
Transaction in which the Employee is participating, the Company is entitled
to purchase the Employee's shares of Common Stock pursuant to this Article
3, and if the purchase price per share for a purchase pursuant to this
Article 3 would be less than the proceeds per share to the Employee from
such Transaction, then the Employee shall be entitled to receive only the
aggregate purchase price payable under this Article 3, with the balance of
the proceeds of sale in the Transaction being remitted to the other
stockholders of the Company participating in such Transaction pro rata in
accordance with their respective participation in such Transaction.
4. Stock Certificate Legend and Investment Representations; Other
Representations.
--------------------------------------------------------------
4.1 Legend. All certificates representing shares of Common Stock
acquired hereunder or hereafter by the Employee (unless registered under
the Act) shall bear the following legend:
"The shares represented by this certificate have
not been registered under the Securities Act of 1933,
as amended, or any securities regulatory authority of
any state, and may not be sold, transferred, assigned,
exchanged, pledged, encumbered or otherwise disposed of
except in compliance with all applicable securities
laws and except in accordance with the provisions of a
Stockholder's Agreement with the Company, a copy of
which is available for inspection at the offices of the
Company."
4.2 Representations of the Employee. The Employee represents and
warrants that: (a) the Employee understands that (i) the offer and sale of
shares of Common Stock in accordance with this Agreement have not been and
will not be registered under the Act, and it is the intention of the
parties hereto that the offer and sale of the securities be exempt from
registration under the Act and the rules promulgated thereunder by the
Securities and Exchange Commission; (ii) the shares of Common Stock being
acquired hereunder cannot be sold, transferred, assigned, exchanged,
pledged, encumbered or otherwise disposed of unless they are registered
under the Act or an exemption from registration is available; and (iii) the
purchase of Common Stock hereunder does not entitle the Employee to
participate in any other equity program of the Company, whether now
existing or hereafter established; (b) the Employee is acquiring the shares
of Common Stock being acquired hereunder for investment for the Employee's
own account and not with a view to the distribution thereof; (c) the
Employee will not, directly or indirectly, sell, transfer, assign,
exchange, pledge, encumber or otherwise dispose of any shares of Common
Stock being acquired hereunder except in accordance with this Agreement;
(d) the Employee has, or the Employee together with the Employee's
advisers, if any, have, such knowledge and experience in financial and
business matters that the Employee is, or the Employee together with the
Employee's advisers, if any, are, and will be capable of evaluating the
merits and risks relating to the Employee's purchase of shares of Common
Stock under this Agreement; (e) the Employee has been given the opportunity
to obtain information and documents relating to the Company and to ask
questions of and receive answers from representatives of the Company
concerning the Company and the Employee's investment in the Common Stock;
(f) the Employee's decision to invest in the Company has been based upon
independent investigations made by the Employee and the Employee's
advisers, if any; (g) the Employee is able to bear the economic risk of a
total loss of the Employee's investment in the Company; and (h) the
Employee has adequate means of providing for the Employee's current needs
and foreseeable personal contingencies and has no need for the Employee's
investment in the Common Stock to be liquid.
5. Miscellaneous.
--------------
5.1 Distributions. In the event of any dividend, distribution or
exchange paid or made in respect of the Common Stock consisting of
Affiliate Securities, (a) the restrictions and rights with respect to the
Common Stock that are contained in this Agreement shall be applicable to
the Affiliate Securities without further action of the parties (with the
references to Common Stock being deemed references to the Affiliate
Securities and the references to the Company being deemed references to the
Affiliate), and (b) as a condition precedent to the receipt of the
Affiliate Securities by the Employee, the Employee shall enter into a
stockholder's agreement containing substantially equivalent terms with
respect to the Affiliate Securities (but reflecting the economics of the
dividend, distribution or exchange and the capitalization of the Affiliate)
as are contained herein. The Board of Directors of the Company, in good
faith, shall determine such terms and its determination shall be final and
binding on the Employee.
5.2 Further Assurances. Each party hereto shall do and perform or
cause to be done and performed all further acts and things and shall
execute and deliver all other agreements, certificates, instruments, and
documents as any other party hereto reasonably may request in order to
carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
5.3 Governing Law. This Agreement and the rights and obligations
of the parties hereto shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York, without giving effect
to the principles of conflicts of law thereof.
5.4 Specific Performance. The parties hereto acknowledge that
there will be no adequate remedy at law for a violation of any of the
provisions of this Agreement and that, in addition to any other remedies
which may be available, all of the provisions of this Agreement shall be
specifically enforceable in accordance with their respective terms.
5.5 Invalidity of Provisions. The invalidity or unenforceability
of any provision of this Agreement in any jurisdiction shall not affect the
validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of this Agreement, including
that provision, in any other jurisdiction. If any provision of this
Agreement is held unlawful or unenforceable in any respect, such provision
shall be revised or applied in a manner that renders it lawful and
enforceable to the fullest extent possible.
5.6 Notice. All notices and other communications hereunder shall
be in writing and, unless otherwise provided herein, shall be deemed to
have been given when received by the party to whom such notice is to be
given at its address set forth below, or such other address for the party
as shall be specified by notice given pursuant hereto:
(a) If to the Company, to:
The Yankee Candle Company, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: President
(b) If to the Employee, to the address set forth below the
Employee's signature, and if to the Legal Representative, to
such Person at the address of which the Company is notified
in accordance with this Section 5.6.
5.7 Binding Effect. This Agreement shall inure to the benefit of
and shall be binding upon the parties hereto and their respective heirs,
legal representatives, successors and assigns. In addition, each of the FL
& Co. Companies shall be a third party beneficiary of this Agreement and
shall be entitled to enforce this Agreement.
5.8 Amendment and Modification. This Agreement may be amended,
modified or supplemented only by written agreement of the party against
whom enforcement of such amendment, modification or supplement is sought.
5.9 Headings; Execution in Counterparts. The headings and
captions contained herein are for convenience only and shall not control or
affect the meaning or construction of any provision hereof. This Agreement
may be executed in any number of counterparts, each of which shall be
deemed to be an original and which together shall constitute one and the
same instrument.
5.10 Entire Agreement. This Agreement constitutes the entire
agreement, and supersedes all prior agreements and understandings
(including the Old Stockholder's Agreement, which will be of no further
force and effect from and after the closing of the Offering), oral and
written, between the parties hereto with respect to the subject matter
hereof.
5.11 Withholding. The Company shall have the right to deduct from
any amount payable under this Agreement any taxes or other amounts required
by applicable law to be withheld. The Employee agrees to indemnify the
Company against any Federal, state and local withholding taxes for which
the Company may be liable in connection with the Employee's acquisition,
ownership or disposition of any Common Stock.
5.12 No Right to Continued Employment. This Agreement shall not
confer upon the Employee any right with respect to continuance of
employment by the Company or any Affiliate thereof, nor shall it interfere
in any way with the right of the Company or any Affiliate thereof to
terminate the Employee's employment at any time.
5.13 Possession of Certificates; Power of Attorney.
---------------------------------------------
(a) In order to provide for the safekeeping of the
certificates representing the shares of Common Stock purchased by the
Employee and to facilitate the enforcement of the terms and conditions
hereof, (i) the Employee shall redeliver to the Company, and the Company
shall retain physical possession of, all certificates representing shares
of Common Stock acquired by the Employee and (ii) the Employee shall
deliver to the Company an undated stock power, duly executed in blank, for
each such certificate. The Employee shall be relieved of any obligation
otherwise imposed by this Agreement to deliver certificates representing
shares of Common Stock if the same are in the custody of the Company. After
the Release Date, upon written request by the Employee therefor, the
Company shall deliver to the Employee any certificates in its custody
representing the Employee's shares of Common Stock.
(b) The Employee hereby irrevocably appoints the FL & Co.
Companies, and each of them (individually and collectively, the
"Representative"), the Employee's true and lawful agent and
attorney-in-fact, with full powers of substitution, to act in the
Employee's name, place and stead, to do or refrain from doing all such acts
and things, and to execute and deliver all such documents, as the
Representative shall deem necessary or appropriate in connection with a
public offering of securities of the Company or a sale pursuant to Section
2.3, 2.5 or 3.2 hereof, including, without in any way limiting the
generality of the foregoing, in the case of a sale pursuant to Section 2.3
or 2.5 hereof, to execute and deliver on behalf of the Employee a purchase
and sale agreement and any other agreements and documents that the
Representative deems necessary in connection with any such sale, and in the
case of a public offering, to execute and deliver on behalf of the Employee
an underwriting agreement, a "hold back" agreement, a custody agreement,
and any other agreements and documents that the Representative deems
necessary in connection with any such public offering, and in the case of
any sale pursuant to Section 2.3 or 2.5 hereof and any public offering
pursuant to Section 2.4(a) hereof, to receive on behalf of the Employee the
proceeds of the sale or public offering of the Employee's shares, to hold
back from any such proceeds any amount that the Representative deems
necessary to reserve against the Employee's share of any Expenses of Sale
and Sale Obligations and to pay such Expenses of Sale and Sale Obligations.
The Employee hereby ratifies and confirms all that the Representative shall
do or cause to be done by virtue of its appointment as the Employee's agent
and attorney-in-fact. In acting for the Employee pursuant to the
appointment set forth in this Section 5.13(b), the Representative shall not
be responsible to the Employee for any loss or damage the Employee may
suffer by reason of the performance by the Representative of its duties
under this Agreement, except for loss or damage arising from willful
violation of law or gross negligence by the Representative in the
performance of its duties hereunder. The appointment of the Representative
shall be deemed coupled with an interest and as such shall be irrevocable
and shall survive the death, incompetency, mental illness or insanity of
the Employee, and any person dealing with the Representative may
conclusively and absolutely rely, without inquiry, upon any act of the
Representative as the act of the Employee in all matters referred to in
this Section 5.13(b).
5.14 Consent to Jurisdiction. Each party hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the
courts of the State of New York and of the United States of America, in
each case located in the County of New York, for any Litigation (and agrees
not to commence any Litigation except in any such court), and further
agrees that service of process, summons, notice or document by U.S.
registered mail to such party's respective address set forth in Section 5.6
hereof shall be effective service of process for any Litigation brought
against such party in any such court. Each party hereby irrevocably and
unconditionally waives any objection to the laying of venue of any
Litigation in the courts of the State of New York or of the United States
of America, in each case located in the County of New York, and hereby
further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any Litigation brought in any such court has
been brought in an inconvenient forum.
IN WITNESS WHEREOF, this Agreement has been signed by or on
behalf of each of the parties hereto, all as of the date first above
written.
THE YANKEE CANDLE COMPANY, INC.
By:
---------------------------------------
Name:
Title:
EMPLOYEE
By:
---------------------------------------
Xxxxxx X. Xxxxxxxx, as Attorney-in-Fact
for the Employee
Name:
Address:
The undersigned hereby agree to be bound by the provisions of Sections 2.3
and 2.4 of the foregoing Stockholder's Agreement.
FORSTMANN LITTLE & CO. EQUITY
PARTNERSHIP-V, L.P.
By: FLC XXX Partnership, L.P.
its general partner
By:
-----------------------------------
Xxxxxx X. Xxxxxxx,
a general partner
FORSTMANN LITTLE & CO. SUBORDINATED
DEBT AND EQUITY MANAGEMENT BUYOUT
PARTNERSHIP-VI, L.P.
By: FLC XXIX Partnership, L.P.
its general partner
By:
-----------------------------------
Xxxxxx X. Xxxxxxx,
a general partner
The undersigned acknowledges that the undersigned has read the
foregoing Agreement between The Yankee Candle Company, Inc. and the
undersigned's spouse, understands that the undersigned's spouse has
purchased shares of Common Stock as reflected in such Agreement and agrees
to be bound by the foregoing Agreement.
--------------------------------
Employee's Spouse
ANNEX A
-------
Employee Number of Shares
-------- ----------------
[Name] [Shares]
