Exhibit 10.2
Exhibit A to Director Stock Option Agreement
STOCKHOLDER'S AGREEMENT, dated as of [_____], 1999, between The
Yankee Candle Company, Inc., a Massachusetts corporation (the "Company"), and
the undersigned (the "Director"), 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 a Stock Option Agreement, dated
as of ____, 1999 between the Company and the Director (the "Option Agreement").
WHEREAS, the Director was at the time of the grant of the Option a
member of the Board of Directors of the Company;
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"), own an aggregate of [ ] shares of Common Stock,
par value $0.01 per share, of the Company;
WHEREAS, the Option Agreement requires the Director to enter into a
Stockholder's Agreement upon and as a condition to the exercise of the Option;
WHEREAS, the Director wishes to exercise the Option to acquire shares
of Common Stock; and
WHEREAS, the Director and the Company wish to provide for certain
arrangements with respect to the Director's rights to hold and dispose of the
shares of Common Stock acquired by the Director upon exercise of the Option.
NOW, THEREFORE, the parties hereto agree as follows:
1. DEFINITIONS; EXERCISE OF OPTION.
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.
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"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.
"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 Director owns an
equity interest, a portion of the interests in such Competitor owned by such
entity shall be attributed to the Director, such portion determined by applying
the percentage of the equity interest in such entity owned by the Director 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 Director, 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
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the direction of the management and policies of any Competitor, whether through
the ownership of equity or debt interests, by contract or otherwise.
"Competitor" shall mean any Person that engages either directly
or indirectly in the candle business.
"Equity-V" shall have the meaning ascribed to such term in the
second "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 2.2, 2.3 or 2.4 hereof to the extent that such
expenses are not paid or reimbursed by the Company.
"FL & Co. Companies" shall mean the collective reference to
Equity-V and MBO-VI.
"Legal Representative" shall mean the guardian, executor,
administrator or other legal representative of the Director. All references
herein to the Director shall be deemed to include references to the Director'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
second "Whereas" clause hereof.
"Option" and "Option Agreement" 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 2.1(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.
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"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 5.12(b).
"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 2.2, 2.3 or 2.4
hereof.
"Section 2.2 Notice" shall have the meaning ascribed to such
term in Section 2.2(a) hereof.
"Section 2.3 Notice" shall have the meaning ascribed to such
term in Section 2.3(a) hereof.
"Stock Dividend" shall mean any stock split, stock dividend or
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 Director's
service as a director the Company 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 2.2, 2.3
or 2.4 hereof.
"Valuation Date" shall mean the last day of the fiscal year of
the Company immediately preceding the fiscal year in which the Director's
service with the Company as a director is Terminated.
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(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.
1.2. ACQUISITION OF COMMON STOCK. The Director 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 full
compliance by the Director with the terms of the Option Agreement and Section
5.12(a)(ii) hereof, the Company shall promptly issue a stock certificate in the
name of the Director representing the shares of Common Stock in respect of which
the Option is being exercised and shall enter the Director's name on the books
of the Company as the stockholder of record of such shares of Common Stock.
2. RIGHTS AND RESTRICTIONS ON COMMON STOCK.
2.1 NO SALE OR TRANSFER.
(a) The Director shall not sell, transfer, assign, exchange,
pledge, encumber or otherwise dispose of any shares of Common Stock acquired
pursuant hereto or otherwise subject to this Agreement 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 Director may transfer any shares of Common Stock
acquired hereunder or otherwise subject to this Agreement by will, but only to:
(i) any spouse, parent, child (whether natural or
adopted), brother or sister of the Director, or
(ii) any corporation or partnership which is controlled
by any spouse, parent, child (whether natural or
adopted), brother or sister of the Director
(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 Director (including,
without limitation, Section 5.12(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
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all of the partners of any Permitted Transferee that is a partnership shall
agree with the Company 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 Director shall also 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 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 Director.
2.2 PARTICIPATION IN SALE OF COMMON STOCK. The Director, at the
Director's option, may participate proportionately (and the FL & Co. Companies
shall allow the Director to participate proportionately) in any sale (other than
a public offering, which shall be governed by Section 2.3 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 to the Third Party the same percentage of the
Director's shares of Common Stock as the FL & Co. Companies propose to sell of
their shares to the Third Party (determined on the basis of the aggregate number
of such 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 Director may participate in
such sale pursuant to this Section 2.2, the Director shall be deemed to own the
shares of Common Stock acquired upon exercise of the Option at any time plus (a)
if, at the time of such sale, the Director is still serving as a director of the
Company, the shares of Common Stock subject to any then unexercised portion of
the Option, if any, or (b) if, at the time of such sale, the Director has ceased
to serve as a director of the Company but has not yet exercised the Option
pursuant to Section 6.2(b) of the Option Agreement, the shares of Common Stock
issuable upon exercise of the portion of the Option that is exercisable pursuant
to Sections 6.2(b) and 4.1 of the Option Agreement, if any. The Company shall
notify the Director 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 2.2 Notice"), and the Director
shall notify the Company in writing within five days after receipt of the
Section 2.2 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 Director to so notify the Company within
such five-day period shall be deemed an election by the Director not to
participate in such sale
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with respect to any of his or her shares. Any sale of shares of Common Stock by
the Director pursuant to this Section 2.2 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 Director sells
any shares of Common Stock pursuant to this Section 2.2, the Director shall pay
and be responsible for the Director's proportionate share of the Expenses of
Sale and the Sale Obligations.
2.3 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 Director shall be entitled and required to participate in
such public offering by selling in the public offering the same percentage of
the Director'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 Director may participate in
such public offering pursuant to this Section 2.3, the Director shall be deemed
to own the shares of Common Stock acquired upon exercise of the Option at any
time plus (a) if, at the time of such sale, the Director is still serving as a
director of the Company, the shares of Common Stock subject to any then
unexercised portion of the Option, if any, or (b) if, at the time of such sale,
the Director has ceased to serve as a director of the Company but has not yet
exercised the Option pursuant to Section 6.2(b) of the Option Agreement, the
shares of Common Stock issuable upon exercise of the portion of the Option that
is exercisable pursuant to Sections 6.2(b) and 4.1 of the Option Agreement, if
any. The Company shall notify the Director 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 2.3 Notice") and shall cause the Director's shares to be
sold in such public offering to be included therein. The Director shall notify
the Company in writing within five days after receipt of the Section 2.3 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 Director to so notify the Company within such
five-day period shall be deemed an election by the Director not to participate
in such public offering with respect to any of his or her shares. If the
Director sells any shares of Common Stock pursuant to this Section 2.3, the
Director shall pay and be responsible for the Director'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.
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(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 Director 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 Director 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 Director take any of the actions
referred to in clause (i) or (ii) of the previous sentence, the Director shall
take such action promptly but in any event within five days following the date
of such request.
2.4 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 Director sell the same
percentage of the Director'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 Director is entitled to vote thereon, that the Director vote the
Director's shares in favor thereof. For purposes of determining the number of
shares of Common Stock in respect of which the Director is to participate in
such sale pursuant to this Section 2.4, the Director shall be deemed to own the
shares of Common Stock acquired upon exercise of the Option at any time plus (a)
if, at the time of such sale, the Director is still serving as a director of the
Company, the shares of Common Stock subject to any then unexercised portion of
the Option, if any, or (b) if, at the time of such sale, the Director has ceased
to serve as a director of the Company but has not yet exercised the Option
pursuant to Section 6.2(b) of the Option Agreement, the shares of Common Stock
issuable upon exercise of the portion of the Option that is exercisable pursuant
to Sections 6.2(b) and 4.1 of the Option Agreement, if any. If the Director
sells any shares pursuant to this Section 2.4, the Director shall pay and be
responsible for the Director's proportionate share of the Expenses of Sale and
the Sale Obligations.
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2.5 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 Director (a) may be sold, transferred,
assigned, exchanged, pledged, encumbered or otherwise disposed of (and the
Director 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 4 (other than this Section 2.5 and Sections 4.1(a), 4.1(b) and 4.1(c)
hereof) shall terminate and have no further force or effect.
3. STOCK CERTIFICATE LEGEND AND INVESTMENT REPRESENTATIONS; OTHER
REPRESENTATIONS.
3.1 LEGEND. All certificates representing shares of Common Stock
acquired hereunder or otherwise subject to this Agreement (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."
3.2 REPRESENTATIONS OF THE DIRECTOR. The Director represents and
warrants that: (a) the Director 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; and (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; (b) the Director is acquiring the shares of Common
Stock being acquired hereunder for investment for the Director's own account and
not with a view to the distribution thereof; (c) the Director will not, directly
or indirectly, sell, transfer, assign, exchange, pledge, encumber or
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otherwise dispose of any shares of Common Stock being acquired hereunder except
in accordance with this Agreement; (d) the Director has, or the Director
together with the Director's advisers, if any, have, such knowledge and
experience in financial and business matters that the Director is, or the
Director together with the Director's advisers, if any, are, and will be capable
of evaluating the merits and risks relating to the Director's acquisition of
shares of Common Stock under this Agreement; (e) the Director 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 Director's investment in the Common Stock; (f)
the Director's decision to invest in the Company has been based upon independent
investigations made by the Director and the Director's advisers, if any; (g) the
Director is able to bear the economic risk of a total loss of the Director's
investment in the Company; and (h) the Director has adequate means of providing
for the Director's current needs and foreseeable personal contingencies and has
no need for the Director's investment in the Common Stock to be liquid.
4. PROHIBITED ACTIVITIES.
4.1 PROHIBITION AGAINST CERTAIN ACTIVITIES. The Director agrees that
(a) the Director will not, at any time while serving as a director of the
Company (other than in the course of such employment) or for two years following
a Termination, directly or indirectly disclose or furnish to any other Person or
use for the Director'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 while serving as a director
of, or otherwise performing of services for, the Company or any Affiliate
thereof, and the Director 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) the Director will not, at any time while serving as
a director of the Company (other than in the course of such employment) or for
two years following a 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, and (c) the Director will not breach the provisions of Section 2.1
hereof (any activity prohibited by clause (a), (b) or (c) of this Section 4.1
being referred to as a "Prohibited Activity").
4.2 RIGHT TO PURCHASE SHARES. The Director understands and agrees
that the Company has granted to the Director the right to acquire shares of
Common Stock to reward the Director for the Director's future efforts and
loyalty to the Company and its Affiliates by giving the Director the opportunity
to participate in the potential future appreciation of the Company. Accordingly,
if the Director engages in any Prohibited Activity, then, in addition to any
other rights and remedies available to the Company,
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the Company shall be entitled, at its option, exercisable by written notice (the
"Repurchase Notice") to the Director, to purchase all of the shares of Common
Stock then held by the Director. In addition, if, at any time during the
Director's service as a director of the Company or during the two years
following a Termination, the Director engages in any Competitive Activity, the
Company shall be entitled, at its option, exercisable by delivery of the
Repurchase Notice to the Director, to purchase all of the shares of Common Stock
then held by the Director.
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 Director 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 Director 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 Director, and the
Company shall deliver to the Director, 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 Director 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 Director shall
not have any rights with respect to any shares of Common Stock which the
Director is required to sell to the Company pursuant to this Article 4
(including any rights pursuant to Section 2.2 or 2.3 hereof), except to receive
the purchase price therefor.
4.4 TRANSACTION PROCEEDS. Notwithstanding anything to the contrary
set forth in Section 2.2, 2.3 or 2.4 hereof, if at the time of a Transaction in
which the Director is participating, the Company is entitled to purchase the
Director'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
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Director from such Transaction, then the Director 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 Company participating in such Transaction pro rata in
accordance with their respective participation in such Transaction.
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 Director, the
Director 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 Director.
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
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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
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 Director, to the address set forth below the
Director'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
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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, 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 Director agrees to indemnify the Company
against any Federal, state and local withholding taxes for which the Company may
be liable in connection with the Director's acquisition, ownership or
disposition of any Common Stock.
5.12 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 Director pursuant hereto
or otherwise subject to this Agreement 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 Director, and
(ii) concurrently with the Director's execution and delivery to the Company of
this Agreement, the Director shall deliver to the Company an undated stock
power, duly executed in blank, for each such certificate. The Director 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 Director hereby irrevocably appoints the FL & Co.
Companies, and each of them (individually and collectively, the
"Representative"), the Director's true and lawful agent and attorney-in-fact,
with full powers of substitution, to act in the Director'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 2.2, 2.3 or 2.4 hereof, including, without in any way
limiting the generality of the foregoing, in the case of a sale pursuant to
Section 2.2 or 2.4 hereof, to execute and deliver on behalf of the Director 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 Director 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 2.2 or 2.4 hereof and any public offering pursuant to
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Section 2.3(a) hereof, to receive on behalf of the Director the proceeds of the
sale or public offering of the Director's shares, to hold back from any such
proceeds any amount that the Representative deems necessary to reserve against
the Director's share of any Expenses of Sale and Sale Obligations and to pay
such Expenses of Sale and Sale Obligations. The Director hereby ratifies and
confirms all that the Representative shall do or cause to be done by virtue of
its appointment as the Director's agent and attorney-in-fact. In acting for the
Director pursuant to the appointment set forth in this Section 5.12(b), the
Representative shall not be responsible to the Director for any loss or damage
the Director 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 Director, 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 Director in all
matters referred to in this Section 5.12(b).
5.13 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.
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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.
DIRECTOR 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 2.2 and
2.3 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.
---------------------------
Director's Spouse
(if applicable)
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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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