Exhibit 10.3
STOCKHOLDER'S AGREEMENT, dated as of [________], 1999, between The
Yankee Candle Company, Inc., a Massachusetts corporation (the "Company"), and
the undersigned (the "Employee"), who was granted the right and option (the
"Option") to acquire shares of Common Stock, par value $0.01 per share, of the
Company pursuant to the terms and conditions of the Company's Employee Stock
Option Plan (the "Plan") and a Stock Option Agreement, dated as of _____,____
between the Company and the Employee (the "Option Agreement").
WHEREAS, the Option Agreement requires the Employee to enter into a
Stockholder's Agreement upon and as a condition to the exercise of the Option;
WHEREAS, the Employee wishes to exercise the Option to acquire
shares of Common Stock; 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 acquired by the Employee upon exercise of the Option.
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.
"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 date of the Repurchase Notice or exercised
between the Valuation Date and the date of the Repurchase Notice 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 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 date of the Repurchase Notice, 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.
"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.
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"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.
"Competing Operations" shall have the meaning ascribed to such
term in the definition of Competitive Activity.
"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.
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"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.
"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 3.2, 3.3 or 3.4 hereof to the extent that such
expenses are not paid or reimbursed by the Company.
"FL & Co. Companies" shall mean the collective reference to
Forstmann Little & Co. Equity Partnership-V, L.P., a Delaware limited
partnership, and Forstmann Little & Co. Subordinated Debt and Equity Management
Buyout Partnership-VI, L.P., a Delaware limited partnership.
"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.
"Option," "Option Agreement" and "Plan" shall have the
respective meanings ascribed to such terms in the first paragraph hereof.
"Permitted Transferee" shall have the meaning ascribed to such
term in Section 3.1(b) 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 4.1 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.
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"Representative" shall have the meaning ascribed to such term in
Section 6.13(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 3.2, 3.3 or 3.4
hereof.
"Section 3.2 Notice" shall have the meaning ascribed to such
term in Section 3.2(a) hereof.
"Section 3.3 Notice" shall have the meaning ascribed to such
term in Section 3.3(a) 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.
"Terminated" or "Termination" 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 of the FL &
Co. Companies 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 3.2,
3.3 or 3.4 hereof.
"Valuation Date" shall mean the last day of the fiscal year of
the Company immediately preceding the fiscal year in which the Employee's
employment is Terminated.
(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.
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2. ACQUISITION OF COMMON STOCK.
2.1 EXERCISE OF OPTION. The Employee hereby elects to exercise the
Option in respect of the shares of Common Stock set forth in Annex A hereto.
Promptly upon payment in full of the exercise price for the shares of Common
Stock in respect of which the Option is being exercised and compliance by the
Employee with the other provisions of Article 5 of the Option Agreement and
Section 6.13(a)(ii) hereof, the Company shall issue a stock certificate in the
name of the Employee representing the shares of Common Stock in respect of which
the Option is being exercised and shall enter the Employee's name on the books
of the Company as the stockholder of record of such shares of Common Stock.
3. RIGHTS AND RESTRICTIONS ON COMMON STOCK.
3.1 NO SALE OR TRANSFER.
(a) The Employee shall not sell, transfer, assign, exchange,
pledge, encumber or otherwise dispose of any shares of Common Stock acquired
hereunder 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.
(b) The Employee may transfer any shares of Common Stock
acquired hereunder 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 3.1(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 4 and Section 6.13(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
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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 3.1(b).
Without limiting the generality of the foregoing, the provisions of Section 4.2
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.
3.2 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 3.3 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). For purposes of determining the number
of shares of Common Stock in respect of which the Employee may participate in
such sale pursuant to this Section 3.2, the Employee shall be deemed to own the
shares of Common Stock acquired upon exercise of the Option at any time plus the
shares of Common Stock subject to any then unexercised portion of the Option, in
each case other than any shares with respect to which any section of this
Agreement (including Section 4.3 hereof) or the Option Agreement (including
Section 6.2(c) thereof) provides that the Employee may not participate in such
sale. 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 3.2 Notice"),
and the Employee shall notify the Company in writing within five days after
receipt of the Section 3.2 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 five-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 3.2 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
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Section 3.2, the Employee shall pay and be responsible for the Employee's
proportionate share of the Expenses of Sale and the Sale Obligations.
3.3 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). For purposes of determining the number
of shares of Common Stock in respect of which the Employee may participate in
such public offering pursuant to this Section 3.3, the Employee shall be deemed
to own the shares of Common Stock acquired upon exercise of the Option at any
time plus the shares of Common Stock subject to any then unexercised portion of
the Option, in each case other than any shares with respect to which any section
of this Agreement (including Section 4.3 hereof) or the Option Agreement
(including Section 6.2(c) thereof) provides that the Employee may not
participate in such public offering. 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 3.3 Notice") and shall cause the
Employee's shares to be sold in such public offering to be included therein. The
Employee shall notify the Company in writing within five days after receipt of
the Section 3.3 Notice of his or her intention to participate in such public
offering, 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 five-day period shall be deemed an election by the Employee
not to participate in such public offering with respect to any of his or her
shares. If the Employee sells any shares of Common Stock pursuant to this
Section 3.3, 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
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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.
3.4 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. For purposes of determining the number of
shares of Common Stock in respect of which the Employee is to participate in
such sale pursuant to this Section 3.4, the Employee shall be deemed to own the
shares of Common Stock acquired upon exercise of the Option at any time plus the
shares of Common Stock subject to any then unexercised portion of the Option, in
each case other than any shares with respect to which any section of this
Agreement (including Section 4.3 hereof) or the Option Agreement (including
Section 6.2(c) thereof) provides that the Employee may not participate in such
sale. If the Employee sells any shares pursuant to this Section 3.4, the
Employee shall pay and be responsible for the Employee's proportionate share of
the Expenses of Sale and the Sale Obligations.
3.5 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
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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 3 and 4 hereof (other than this Section 3.5 and
Sections 4.1(a), 4.1(b) and 4.1(c) hereof) shall terminate and have no further
force or effect.
4. PROHIBITED ACTIVITIES.
4.1 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 or any Affiliate
thereof, (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 3.1 hereof (any activity prohibited by clause (a), (b), (c) or (d) of
this Section 4.1 being referred to as a "Prohibited Activity").
4.2 RIGHT TO PURCHASE SHARES. The Employee understands and agrees
that the Company has granted to the Employee the right to acquire shares of
Common Stock 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
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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.
4.3 PURCHASE PRICE; CLOSING. The purchase price per share of the
shares of Common Stock purchased pursuant to this Article 4 shall be equal to
the lesser of (a) $[____] (adjusted to reflect any Capital Transaction effected
after the date hereof and prior to the date of the Repurchase Notice) and (b)
the Book Value Per Share. The closing of such purchase shall take place at the
principal office of the Company 10 days following the date of the Repurchase
Notice, except that if the Company is prohibited from repurchasing any shares of
Common Stock pursuant to this Article 4 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. 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 the
certificates 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 4.3 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 4
(including any rights pursuant to Section 3.2 or 3.3 hereof), except to receive
the purchase price therefor.
4.4 TRANSACTION PROCEEDS. Notwithstanding anything to the contrary
set forth in Section 3.2, 3.3 or 3.4 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 4, and if the
purchase price per share for a purchase pursuant to this Article 4 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 4, with the balance of the proceeds of sale in the
Transaction being remitted to the other stockholders of the
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Company participating in such Transaction pro rata in accordance with their
respective participation in such Transaction.
5. STOCK CERTIFICATE LEGEND AND INVESTMENT REPRESENTATIONS; OTHER
REPRESENTATIONS.
5.1 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."
5.2 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 acquisition 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
acquisition 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
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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.
6. MISCELLANEOUS.
6.1 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.
6.2 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.
6.3 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.
6.4 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.
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6.5 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.
6.6 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
with a copy to:
Forstmann Little & Co. Equity Partnership-V, L.P.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxx
(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 6.6.
6.7 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.
6.8 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.
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6.9 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.
6.10 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement, and supersedes all prior agreements and understandings, oral and
written, between the parties hereto with respect to the subject matter hereof.
6.11 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.
6.12 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.
6.13 POSSESSION OF CERTIFICATES; POWER OF ATTORNEY.
(a) In order to provide for the safekeeping of the certificates
representing the shares of Common Stock acquired by the Employee pursuant hereto
and to facilitate the enforcement of the terms and conditions hereof, (i) the
Company shall retain physical possession of all certificates representing shares
of Common Stock issued to the Employee, and (ii) concurrently with the
Employee's execution and delivery to the Company of this Agreement, 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.
(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
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deem necessary or appropriate in connection with a public offering of securities
of the Company or a sale pursuant to Section 3.2, 3.4 or 4.2 hereof, including,
without in any way limiting the generality of the foregoing, in the case of a
sale pursuant to Section 3.2 or 3.4 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 3.2 or 3.4 hereof and any public offering pursuant to
Section 3.3(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 6.13(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 6.13(b).
6.14 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 6.6 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.
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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.
EMPLOYEE THE YANKEE CANDLE
COMPANY, INC.
______________________________ By: ______________________________
Name: Name:
Address: Title:
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The undersigned hereby agree to be bound by the provisions of Sections 3.2 and
3.3 of the foregoing Agreement.
FORSTMANN LITTLE & CO. EQUITY
PARTNERSHIP-V, L.P.
By: FLC XXX Partnership,
its general partner
By: ____________________________
__________________,
a general partner
FORSTMANN LITTLE & CO. SUBORDINATED
DEBT AND EQUITY MANAGEMENT
BUYOUT PARTNERSHIP-VI, L.P.
By: FLC XXIX Partnership,
its general partner
By: ____________________________
__________________,
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 acquired
shares of Common Stock of The Yankee Candle Company, Inc. as reflected in such
Agreement and agrees to be bound by the foregoing Agreement.
___________________________
Employee's Spouse
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ANNEX A
Number of Shares in Cumulative Number of
Respect of Which Option Shares Subject to the
Is Being Exercised on Stockholder's Agreement
Date the Date Indicated on the Date Indicated
---- ----------------------- -----------------------
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