EXHIBIT 10.16
THE YANKEE CANDLE COMPANY, INC.
AWARD OF PERFORMANCE SHARES AGREEMENT
This Agreement is made as of ________________ between The Yankee Candle
Company, Inc., a Massachusetts corporation (the "Company"), and
_____________________ (the "Participant").
WHEREAS, the [1999/2005] Stock Option and Award Plan of the Company (the
"Plan") authorizes the Company to grant awards of Performance Shares (as defined
below);
WHEREAS, the Participant is an Eligible Individual as defined in the Plan;
and
WHEREAS, the Compensation Committee of the Board of Directors of the
Company has approved the grant to the Participant of the Award covered by this
Agreement;
NOW, THEREFORE, in consideration of the mutual commitments made in this
Agreement, the Company and the Participant agree as follows:
1. Grant of Award. The Company hereby grants to the Participant an
award of Performance Shares (the "Award"). The Award entitles the
Participant to receive, subject to the terms and conditions of this
Agreement, shares of common stock, $.01 par value per share, of the
Company (the "Performance Shares"), which shall be issued under the
Plan. The target number of Performance Shares to be issued to the
Participant is _________, although the actual number (if any) of
Performance Shares issued could be lower or higher, as provided in
this Agreement. Any Performance Shares issued under this Agreement
shall be issued in consideration of employment services performed by
the Participant during the Performance Period (as defined below).
2. Number of Performance Shares.
a) The actual number of Performance Shares which may be issued to
the Participant shall be based upon the Company's cumulative
earnings per share, as determined in accordance with generally
accepted accounting principles and as reported by the Company
in its filings with the Securities and Exchange Commission
("EPS"), for the three fiscal years ending ________________,
________________ and ________________ (the "Performance
Period"). The Participant shall receive, subject to the other
terms and conditions of this Agreement, the following
percentage of his or her target number of Performance Shares:
CUMULATIVE EPS DURING
PERFORMANCE PERCENTAGE OF TARGET
PERIOD SHARES ISSUED
Less than $____ 0%
$____ ___%
From $____ through __% plus ___% for each
$____ $____ of EPS in excess of
$____
$____ 100%
From $____ through 100% plus .___% for each
$____ $____ of EPS in excess of
$____
$____ and above 175%
b) The Compensation Committee shall have the authority,
exercisable in its discretion, to adjust from time to time the
EPS targets set forth in Section 2(a) and elsewhere in this
Agreement as it deems appropriate under the circumstances,
including to take into account (i) events such as share
repurchases by the Company and equity financings by the
Company that affect the number of outstanding shares of common
stock of the Company and (ii) acquisitions or other unusual
events that affect the Company's net income.
3. Issuance of Performance Shares and Dividend Equivalent Payment. At
the first meeting of the Compensation Committee held after the
Company's financial results for the fiscal year ending
________________ [third fiscal year in Performance Period] are first
reported by the Company as part of a filing (including a Current
Report on Form 8-K) with the Securities and Exchange Commission, the
Compensation Committee shall (i) review the Company's EPS over the
Performance Period (or portion thereof, as provided in Section 5),
(ii) make any adjustments to the EPS targets set forth in this
Agreement pursuant to the authority granted in Section 2(b), and
(iii) approve (subject to the continued employment condition set
forth in Section 4) the issuance of Performance Shares to the
Participant in accordance with the provisions of Section 2(a) or
Section 5, as applicable. As promptly as practicable following such
Compensation Committee meeting, the Company shall (a) issue to the
Participant such number of Performance Shares as have been approved
for issuance to the Participant as described above and (b) pay to
the Participant an amount in cash equal to the Dividend Equivalent
Payment. For purposes of this Agreement, the "Dividend Equivalent
Payment" means (i) the total amount (if any) of the dividends
declared on a share of common stock of the Company payable to
holders of record as of a date between the date of this Agreement
and the date on which the Performance Shares are issued to the
Participant, multiplied by (ii) the number of Performance Shares
issued to the Participant. The Participant shall forfeit any rights
he or she may have had to any Performance Shares that are not issued
to the Participant as provided in this Section 3.
4. Continuation of Employment as a Condition to Issuance of Performance
Shares.
a) Except as provided in Section 4(b) and Section 5, if the
Participant's employment with the Company terminates for any
reason prior to ________________ [end of third fiscal year in
Performance Period], the Participant shall forfeit all rights
under this Agreement effective as of such employment
termination, and shall not be entitled to receive any
Performance Shares
(regardless of whether the EPS targets are attained). For
purposes of this Agreement, the Participant shall be deemed to
be employed by the Company if he or she is employed by any
subsidiary of the Company.
b) If the Participant terminates his or her employment pursuant
to a Qualifying Retirement (as defined below) on or after
________________ [first day of second fiscal year in
Performance Period] but prior to ________________ [end of
third fiscal year in Performance Period], or if such
employment is terminated during such time period by reason of
the Participant's death or Disability (as defined in the
Plan), then notwithstanding the terms of Section 4(a), he or
she shall be eligible to receive Performance Shares and the
Dividend Equivalent Payment in accordance with the terms of
Section 3 (including the timing of issuance and payment
provided for therein) and the other terms of this Agreement,
as if his or her employment with the Company had continued
through ________________ [end of third fiscal year in
Performance Period], except that (i) if the Qualifying
Retirement or death or Disability occurs subsequent to the end
of the fiscal year ending ________________ [first fiscal year
in Performance Period] but prior to the end of the fiscal year
ending ________________ [second fiscal year in Performance
Period], the number of Performance Shares issued to the
Participant shall be reduced to 33.33% of the number that
would otherwise have been issued to the Participant, and (ii)
if the Qualifying Retirement or death or Disability occurs
subsequent to the end of the fiscal year ending
________________ [second fiscal year in Performance Period]
but prior to the end of the fiscal year ending
________________ [third fiscal year in Performance Period],
the number of Performance Shares issued to the Participant
shall be reduced to 66.67% of the number that would otherwise
have been issued to the Participant.
c) A "Qualifying Retirement" means retirement by the Participant
after satisfaction of the conditions in either clause (i) or
clause (ii):
i. The Participant has both (A) attained the age of 55 and
(B) completed at least ten years of employment with the
Company; or
ii. the sum of the Participant's age plus the number of
years he or she has been employed by the Company equals
or exceeds 75 years.
5. Change in Control.
a) In the event a Change in Control of the Company (as defined in
the Plan) occurs prior to the end of the fiscal year ending
________________ [first fiscal year in Performance Period],
this Agreement shall terminate and the Participant shall
forfeit any rights he or she may have had to any Performance
Shares issuable under this Agreement.
b) In the event a Change in Control of the Company occurs
subsequent to the end of the fiscal year ending
________________ [first fiscal year in Performance Period] but
prior to the end of the fiscal year ending ________________
[second fiscal year in Performance Period] and the Participant
remains employed by the Company through the date of the Change
in Control, (i) the Participant's target number of Performance
Shares shall be reduced to 33.33% of the original target
number, (ii) the Participant shall receive his or her adjusted
target number of Performance Shares if the Company's EPS for
the fiscal year ending ________________ [first fiscal year in
Performance Period] is at least $____, (iii) the Compensation
Committee shall meet prior to the date of the Change in
Control to take the actions contemplated by Section 3, (iv)
immediately prior to the Change in Control, the Company shall
issue to the Participant such number of Performance Shares as
have been approved by the Compensation Committee for issuance
to the Participant and pay to the Participant an amount in
cash equal to the Dividend Equivalent Payment, and (v) this
Agreement shall terminate and the
Participant shall forfeit any rights he or she may have had to
any additional Performance Shares issuable under this
Agreement.
c) In the event a Change in Control of the Company occurs
subsequent to the end of the fiscal year ending
________________ [second fiscal year in Performance Period]
but prior to the end of the fiscal year ending
________________ [third fiscal year in Performance Period] and
the Participant remains employed by the Company through the
date of the Change in Control, (i) the Participant's target
number of Performance Shares shall be reduced to 66.67% of the
original target number, (ii) the Participant shall receive his
or her adjusted target number of Performance Shares if the
Company's cumulative EPS for the fiscal years ending
________________ and ______________ [first and second fiscal
years in Performance Period] is at least $____, (iii) the
Compensation Committee shall meet prior to the date of the
Change in Control to take the actions contemplated by Section
3, (iv) immediately prior to the Change in Control, the
Company shall issue to the Participant such number of
Performance Shares as have been approved by the Compensation
Committee for issuance to the Participant and pay to the
Participant an amount in cash equal to the Dividend Equivalent
Payment, and (v) this Agreement shall terminate and the
Participant shall forfeit any rights he or she may have had to
any additional Performance Shares issuable under this
Agreement.
d) If it is impracticable for the Compensation Committee and/or
the Company to take the actions described in paragraph (b) or
(c) of this Section 5 prior to the Change in Control, the
Compensation Committee and/or the Company shall take such
actions as promptly as practicable following the Change in
Control, or shall otherwise provide to the Participant the
economic equivalent of the share issuance and cash payment
provided for in this Section 5.
6. Non-competition and Non-Solicitation.
a) While the Participant is employed by the Company and for a
period of two years after the termination or cessation of such
employment for any reason,
i. the Participant shall not, directly or indirectly, as an
individual proprietor, partner, stockholder, officer,
employee, director, joint venture, investor, lender,
consultant, or in any other capacity whatsoever (other
than as the holder of not more than one percent of the
combined voting power of the outstanding stock of a
publicly held company), engage in or be affiliated with
any business that is competitive with the business of
the Company, including but not limited to any business
or enterprise that either (A) develops, manufactures,
markets, licenses or sells candles, candle accessories,
home or personal fragrance products, or products sold by
the Company under its Old Farmers Almanac General Store
retail format, or (B) otherwise provides any other
consumer product or service that competes with any
product or service that (1) was developed, manufactured,
marketed, licensed, sold or provided by the Company
during the time in which the Participant was employed
with the Company, or (2) the Company planned, during the
time in which the Participant was employed with the
Company, to develop, manufacture, market, license, sell
or provide; and
ii. the Participant shall not, either alone or in
association with others (A) solicit, or permit any
organization directly or indirectly controlled by the
Participant to solicit, any employee of the Company to
leave the employ of the Company, or (B) solicit for
employment, hire or engage as an independent contractor,
or permit any organization directly or indirectly
controlled by the Participant to solicit for employment,
hire or engage as an independent contractor, any person
who was employed by the Company at the time of the
termination or cessation of the Participant's employment
with the Company; provided, that this clause (B) shall
not apply to the solicitation, hiring or
engagement of any individual whose employment with the
Company has been terminated for a period of six months
or longer.
b) If any restriction set forth in this Section 6 is found by any
court of competent jurisdiction to be unenforceable because it
extends for too long a period of time or over too great a
range of activities or in too broad a geographic area, it
shall be interpreted to extend only over the maximum period of
time, range of activities or geographic area as to which it
may be enforceable.
c) The restrictions contained in this Section 6 are necessary for
the protection of the business and goodwill of the Company and
are considered by the Participant to be reasonable for such
purpose. The Participant agrees that any breach of this
Section 6 is likely to cause the Company substantial and
irrevocable damage that is difficult to measure. Therefore, in
the event of any such breach or threatened breach, the
Participant agrees that the Company, in addition to such other
remedies which may be available, shall have the right to
obtain an injunction from a court restraining such a breach or
threatened breach and the right to specific performance of the
provisions of this Agreement and the Participant hereby waives
the adequacy of a remedy at law as a defense to such relief.
7. Rights as a Stockholder. The Participant shall not be deemed to be
the holder of or to have any of the rights of a holder with respect
to, any of the Performance Shares unless and until such Performance
Shares have been issued to the Participant in accordance with the
terms of this Agreement.
8. Withholding Taxes. The Participant shall pay to the Company, or make
provision satisfactory to the Company for the payment of, any taxes
required by law to be withheld in connection with the issuance of
the Performance Shares and the payment of the Dividend Equivalent
Payment by the Company to the Participant. The Company may, to the
extent permitted by law, deduct any such tax obligations from any
payment of any kind otherwise due to the Participant. Without
limiting the generality of the foregoing, unless otherwise agreed in
writing, and provided the common stock of the Company continues to
be registered under Section 12(b) of the Securities Exchange Act of
1934, in satisfaction of such withholding tax obligation the Company
is hereby directed to and shall (i) withhold, from the number of
Performance Shares that would otherwise have been issued to the
Participant under this Agreement, such number of Performance Shares
as have a Fair Market Value (as defined in the Plan) equal to the
Company's tax withholding obligation or (ii) withhold the amount of
such tax withholding obligation from the Dividend Equivalent
Payment.
9. Miscellaneous Provisions.
a) Provisions of the Plan. The Award covered by this Agreement is
made pursuant to, and is subject to the provisions of, the
Plan.
b) Capitalization Changes. In the event of any stock split,
reverse stock split, stock dividend, combination of shares or
similar change in the capitalization of the Company, the
target number of Performance Shares and the EPS targets, as
well as the calculation of the Dividend Equivalent Payment,
shall be proportionately adjusted to reflect such event.
c) Non-transferability of Award. The Award covered by this
Agreement may not be sold, transferred, pledged, hypothecated
or otherwise disposed of. Any Performance Shares issued under
this Agreement may be sold, transferred, pledged, hypothecated
or otherwise disposed of, subject to the provisions of
applicable law and any other agreement to which the
Participant may be a party.
d) Authority of Compensation Committee. In making any decisions
or taking any actions with respect to the matters covered by
this Agreement, the Compensation Committee shall have all
of the authority and discretion, and shall be subject to all
of the protections, provided for in the Plan. All decisions
and actions by the Compensation Committee with respect to this
Agreement shall be made in the Compensation Committee's
discretion and shall be final and binding on the Participant.
e) No Right to Continued Employment. The Participant acknowledges
and agrees that, notwithstanding the fact that the issuance of
the Performance Shares is contingent upon (among other things)
his or her continued employment by the Company, this Agreement
does not constitute an express or implied promise of continued
employment or confer upon the Participant any rights with
respect to continued employment by the Company.
f) Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, and
each other provision of this Agreement shall be severable and
enforceable to the extent permitted by law.
g) Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the Company and the Participant and their
respective heirs, executors, administrators, legal
representatives, successors and assigns, subject to the
restrictions on transfer set forth in Section 9(c).
h) Notice. All notices required or permitted hereunder shall be
in writing and deemed effectively given upon personal delivery
or five days after deposit in the United States Post Office,
by registered or certified mail, postage prepaid, addressed to
the other party hereto at the address shown beneath his or its
respective signature to this Agreement (directed, in the case
of notices to the Company, to the Chief Financial Officer), or
at such other address or addresses as either party shall
designate to the other in accordance with this Section 9(h).
i) Counterparts. 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.
j) Entire Agreement. This Agreement and the Plan constitute the
entire agreement between the parties, and supersedes all prior
agreements and understandings, relating to the subject matter
of this Agreement.
k) Amendment. This Agreement may be amended or modified only by a
written instrument executed by both the Company and the
Participant.
l) Governing Law. This Agreement shall be construed, interpreted
and enforced in accordance with the internal laws of the
Commonwealth of Massachusetts without regard to any applicable
conflicts of laws.
m) Participant's Acknowledgments. The Participant acknowledges
that he or she has read this Agreement, has received and read
the Plan, and understands the terms and conditions of this
Agreement and the Plan.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
THE YANKEE CANDLE COMPANY, INC.
By: ___________________________
Title: ______________________
Address: 16 Yankee Candle Way
P.O. Box 110
South Deerfield, MA 01373
__________________________
Name of Participant:
Address: __________________
__________________