Document:

exv10w2

 

EXHIBIT 10.2

Special Retention Bonus Plan

The Yankee Candle Company, Inc.

Special Retention Bonus Plan

     Purpose. The Yankee Candle Company, Inc. (the “Company”) wishes to provide under this plan
(the “Plan”) made as of September 14, 2006 (the “Effective Date”) a Special Retention Bonus to
certain individuals in recognition of their prior contributions and as an incentive for such
individuals to continue to provide services to the Company.

     Participants. Participants are those persons designated as such by the Board of Directors of
the Company at its meeting on September 14, 2006, as the same may be amended by the Company’s Chief
Executive Officer pursuant to authority delegated to him by the Board of Directors at such meeting.
A schedule of all approved Participants shall be kept on file by the Chief Executive Officer,
which schedule shall be deemed to be conclusive as to the identity of approved Participants.

     Special Retention Bonuses. The Company will pay a Special Retention Bonus to each of the
Eligible Participants no later than 15 days following the Trigger Date (as defined below) in an
amount equal to either a certain percentage of such
Participant’s base salary as of the Effective Date or a
specified dollar amount.
The designated percentage to be used in calculating the Special
Retention Bonus or the specified dollar amount, as the case may be, for each
Participant if he or she becomes an Eligible Participant was approved by the Board of Directors at
its meeting on September 14, 2006 and shall be set forth on the above-referenced schedule to be
maintained by the Chief Executive Officer. An “Eligible Participant” is a Participant who is
continuously employed by the Company between the Effective Date and the date (the “Trigger Date”)
three months following the date of the first occurrence after the Effective Date of a Change in
Control Event (as defined herein), or whose employment with the Company is terminated by the
Company without Cause, as that term is defined herein, prior to the Trigger Date. Participants
whose employment with the Company ends prior to the Trigger Date for any reason other than due to a
termination by the Company without Cause shall not receive a Special Retention Bonus.

     Definition of “Change in Control Event.” For purposes of this Plan, “Change in Control
Event” means an event or occurrence set forth in any one or more of paragraphs (a) through (c)
below:

          (a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”)
of beneficial ownership of any capital stock of the Company if, after such acquisition, such Person
beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) more than
50% of either (x) the then-outstanding shares of common stock of the Company (the “Outstanding
Company Common Stock”) or (y) the combined voting power of the then-outstanding securities of the
Company entitled to vote generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes
of this paragraph (a), the following acquisitions shall not constitute a Change in Control Event:
(i) any acquisition directly from the Company (excluding an acquisition pursuant to the exercise,
conversion or exchange of any security exercisable for, convertible into or exchangeable for

 

 

EXHIBIT 10.2

Special Retention Bonus Plan

common stock or voting securities of the Company, unless the Person exercising, converting or exchanging
such security acquired such security directly from the Company or an underwriter or agent of the
Company), (ii) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or (iii) any acquisition by
any company pursuant to a Business Combination (as defined below) which complies with clauses (i)
and (ii) of paragraph (c) of this definition; or

          (b) such time as the Continuing Directors (as defined below) do not constitute a majority of
the Board of Directors of the Company (or, if applicable, the Board of Directors of a successor
corporation to the Company), where the term “Continuing Director” means at any date a member of the
Board of Directors (x) who was a member of the Board of Directors on the Effective Date or (y) who
was nominated or elected subsequent to such date by at least two-thirds of the directors who were
Continuing Directors at the time of such nomination or election or whose election to the Board of
Directors was recommended or endorsed by at least two-thirds of the directors who were Continuing
Directors at the time of such nomination or election; provided, however, that there shall be
excluded from this clause (y) any individual whose initial assumption of office occurred as a
result of an actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a
person other than the Board of Directors; or

          (c) the consummation of a merger, consolidation, reorganization, recapitalization or share
exchange involving the Company or a sale or other disposition of all or substantially all of the
assets of the Company (a “Business Combination”), unless, immediately following such Business
Combination, each of the following two conditions is satisfied: (i) all or substantially all of the
individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, at least 50% of the then-outstanding shares of common stock and the
combined voting power of the then-outstanding securities entitled to vote generally in the election
of directors, respectively, of the resulting or acquiring company in such Business Combination
(which shall include, without limitation, a company which as a result of such transaction owns the
Company or substantially all of the Company’s assets either directly or through one or more
subsidiaries) (such resulting or acquiring company is referred to herein as the “Acquiring
Company”) in substantially the same proportions as their ownership of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, respectively, immediately prior to such
Business Combination; and (ii) no Person (excluding any employee benefit plan (or related trust)
maintained or sponsored by the Company or by the Acquiring Company) beneficially owns, directly or
indirectly, more than 50% of the then-outstanding shares of common stock of the Acquiring Company,
or of the combined voting power of the then-outstanding securities of such company entitled to vote
generally in the election of directors (except to the extent that such ownership existed prior to
the Business Combination).

     Definition of “Cause.” For purposes of this Plan, “Cause” means the Participant’s (a)
intentional failure to perform his or her reasonably assigned duties, (b) dishonesty or willful
misconduct in the performance of his or her duties, (c) involvement in a transaction in

 

 

EXHIBIT 10.2

Special Retention Bonus Plan

connection
with the performance of his or her duties to the Company or any of its subsidiaries which
transaction is adverse to the interests of the Company or any of its subsidiaries and which is
engaged in for personal profit or (d) willful violation of any law, rule or regulation in
connection with the performance of his or her duties to the Company or any of its subsidiaries
(other than traffic violations or similar offenses).

     Administration. The Compensation Committee of the Company’s Board of Directors (the
“Compensation Committee”) is responsible for the general operation and administration of the Plan
and for carrying out the provisions thereof and has full discretion in interpreting and
administering the provisions of the Plan in a manner consistent with the Plan’s intent.

     Effect on Other Plans. The accrual or payment of the amounts under this Plan shall not affect
the Participant’s participation under any other plan.

     Nontransferability. Neither the Participant nor his or her beneficiaries nor anyone claiming
an interest through him, her or them shall have any right to assign, pledge, or otherwise transfer
the right to receive a payment under this Plan. Any rights to such payments are expressly declared
to be nonassignable and nontransferable. Unless the law requires otherwise, no unpaid amounts
shall be subject to attachment, alienation, garnishment, or execution, or be transferable if the
Participant becomes bankrupt or insolvent, for the satisfaction of the debts of, or other
obligations or claims against, the Participant, his or her beneficiaries, or any person or entity
claiming an interest through him, her, or them, including claims for alimony, support, or separate
maintenance.

     Plan Amendments. The Compensation Committee may amend or terminate the Plan at any time,
without the consent of the Participants; provided, however, that no amendment will deprive any
Eligible Participant of any benefits set forth in the Plan that were earned before any such
amendment or termination.

     Plan Termination. The Plan will terminate on April 1, 2007 if a Change in Control Event has
not occurred by that date, which date may be extended by the Compensation Committee in its
discretion.

     No Employment Contract. Nothing contained in this Plan constitutes an employment contract
between the Company and any Participant. The Plan does not give any Participant any right to be
retained in the Company’s employ, nor does it enlarge or diminish the Company’s right to terminate
any Participant’s employment.

     Unfunded;unsecured. This Plan will at all times be entirely unfunded and no provisions will
at any time be made with respect to segregating assets of any entity for payment of any benefits
hereunder. Any assets set aside or earmarked for the payment of benefits hereunder shall belong
exclusively to the Company. Nothing contained herein may be construed as giving a Participant or
any other person any equity or other interest of any kind in any assets of any
entity or creating a trust of any kind or a fiduciary relationship of any kind between any
entity and any such person. As to any claim for any unpaid amounts under this Plan, a Participant
or

 

 

EXHIBIT 10.2

Special Retention Bonus Plan

any other person having a claim for payment shall have no rights greater than the rights of an
unsecured general creditor of the Company.

     Tax Withholding; Code Section 409A. The Company will withhold from any payments under this
Plan any amount required to satisfy its income and employment tax withholding obligations under
federal, state and local law. This Plan is intended to comply with, or be exempt from, the
requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and must be
interpreted consistently therewith.

     Applicable Law. The laws of the Commonwealth of Massachusetts govern this Plan and its
interpretation.exv10w3

 

THE YANKEE CANDLE COMPANY, INC.

EXECUTIVE DEFERRED COMPENSATION PLAN

Effective as of January 1, 2005

 

 

THE YANKEE CANDLE COMPANY, INC.

EXECUTIVE DEFERRED COMPENSATION PLAN

ARTICLE I — PURPOSE; EFFECTIVE DATE

     1.1 Purpose. The purpose of The YANKEE CANDLE COMPANY, INC. EXECUTIVE DEFERRED
COMPENSATION PLAN (hereinafter, the “Plan”) is to permit a select group of management or highly
compensated employees of The Yankee Candle Company, Inc. (and its selected subsidiaries and/or
affiliates) to defer the receipt of income which would otherwise become payable to them. It is
intended that this Plan, by providing these eligible employees an opportunity to defer the receipt
of income, will assist in the retaining and attracting individuals of exceptional ability and by
providing an additional opportunity to save for retirement beyond Code limitations imposed on
qualified retirement plans. This Plan is intended to be “unfunded” for purposes of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”).

     1.2 Effective Date. This Plan was originally adopted by the Company effective as of
October 1, 1996 and amended on or about May 28, 2004. The effective date of this Plan, as amended
and restated herein, shall be effective as of January 1, 2005. It is the intent that all of the
amounts deferred and benefits provided under this Plan will comply with the terms of Section 409A
of the Code and interpretive guidance issued thereunder.

     1.3 Unfunded Plan. This Plan is an unfunded top-hat plan maintained primarily to
provide deferred compensation benefits for a “select group of management or highly-compensated
employees” within the meaning of Sections 201, 301, and 401 of ERISA, and therefore is exempt from
the provisions of Parts 2, 3 and 4 of Title I of ERISA.

ARTICLE II — DEFINITIONS

     For the purpose of this Plan, the following terms shall have the meanings indicated, unless
the context clearly indicates otherwise:

     2.1 Account(s). “Account(s)” means the notional account or accounts maintained on the
books of the Company used solely to calculate the amount payable to each Participant under this
Plan and shall not constitute a separate fund of assets. Account(s) shall be deemed to exist from
the time amounts are first credited to such Account(s) until such time that the entire Account
balance has been distributed in accordance with this Plan. The Accounts available for each
Participant shall be identified as:

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          (a) Deferral Account; and

          (b) Company Matching Contribution Account.

     2.2 Beneficiary. “Beneficiary” means the person, persons or entity as designated by
the Participant, entitled under Article VI to receive any Plan benefits payable after the
Participant’s death.

     2.3 Board. “Board” means the Board of Directors of the Company.

     2.4 Change of Control. “Change of Control” means:

          (a) a change in the ownership or effective control of the Company, or in the ownership of a
substantial portion of the assets of the Company, as defined and determined under Section
409A(a)(2)(A)(v) of the Code (or its successor provisions), Treasury Notice 2005-1 and Proposed
Treasury Regulation 1.409A-1 and any further interpretive guidance issued thereunder. Without in
any way limiting the scope of the preceding sentence, a Change of Control shall be deemed to occur
on the date upon which one of the following events occurs:

               i. any one person (as such term is used in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), or more than one person acting as a group
(as determined under applicable Treasury regulations), acquires ownership of stock of the Company
that, together with stock held by such person or group, constitutes more than 50% of either the
total fair market value or total voting power of the stock of the Company (except that the
acquisition of additional control of the Company by the same person or persons during such 12-month
period is not considered to cause a change in control of the Company); or

               ii. any one person (as such term is used in the Exchange Act), or more than one person acting
as a group (as determined under applicable Treasury regulations), acquires (or has acquired during
the 12-month period ending on the date of the most recent acquisition by such person or persons)
ownership of stock of the Company possessing 35% or more of the total voting power of the Company
(except that the acquisition of additional control of the Company by the same person or persons
during such 12-month period is not considered to cause a change in control of the Company); or

               iii. a majority of members of the Board is replaced during any 12-month period by directors
whose appointment or election is not endorsed by a majority of the members of the Board prior to
the date of the appointment or election; or

               iv. any one person (as such term is used in the Exchange Act), or more than one person acting
as a group (as determined under applicable Treasury regulations), acquires (or has acquired during
the 12-month period ending on the date of the most recent acquisition by such person or persons)
assets from the Company that have a total gross fair market value equal to or more than 40% of the
total gross fair market value of all of the assets of the Company immediately

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prior to such acquisition or acquisitions.

     2.5 Code. “Code” means the Internal Revenue Code of 1986, as amended, and any
successor thereto.

     2.6 Company. “Company” means The Yankee Candle Company, Inc., a Massachusetts
corporation, and any affiliate designated by the Board, or any successor to the business thereof.

     2.7 Compensation. “Compensation” means wages as defined in Section 3401(a) of the
Code and all other payments of compensation to a Participant by the Company (in the course of the
Company’s trade or business) for which the Participant is required to furnish the Participant a
written statement under Section 6041(d) and 6051(a)(3) of the Code, excluding reimbursements or
other expense allowances, fringe benefits (cash and non-cash), moving expenses, deferred
compensation and welfare benefits, but including amounts that are not includable in the gross
income of the Participant under a salary reduction agreement by reason of the application of
Section 125, 402(a)(8), 402(h), or 403(b) of the Code. Compensation must be determined without
regard to any rules under Section 3401(a) of the Code that limit the remuneration included in wages
based on the nature or location of the employment or the services performed. Compensation shall
generally be based on the amount that would have been actually paid to the Participant during the
Plan Year but for an election under Article III.

     2.8 Compensation Committee. “Compensation Committee or Committee” means the
Compensation Committee appointed by the Board to administer the Plan pursuant to Article VII.
Further, the Compensation Committee may designate a sub-Committee to administer the Plan.

     2.9 Deferral Election. “Deferral Election” means an irrevocable written commitment
made by a Participant to defer a portion of his/her Compensation as set forth in Article III, and
as permitted by the Committee in its sole discretion. The Deferral Election shall apply to each
payment of salary and/or bonus payable to a Participant. Such designation shall be made in the
form of a whole percentage or an exact stated dollar amount. Such Deferral Election shall be made
on an Election Form within the period of time set forth in Sections 3.2 and 3.3 herein. A Deferral
Election with respect to any bonus or incentive compensation which is based on services performed
over a period of at least twelve (12) months shall be made no later than six (6) months prior to
the end of such performance period.

     2.10 Deferral Period. “Deferral Period” means each calendar year, except that if a
Participant first becomes eligible after the beginning of a calendar year, the initial Deferral
Period shall be the date the Participant first becomes eligible to participate in this Plan through
and including December 31st of that calendar year. For purposes of deferrals related to
Participant’s annual bonus or other incentive based compensation, “Deferral Period” shall mean the
Company’s Fiscal Year.

     2.11 Determination Date. “Determination Date” means each business day.

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     2.12 Disability. “Disability” means the Participant is: (i) unable to engage in any
substantial gainful activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a continuous period of not
less than 12 months, or (ii) by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a continuous period of not
less than 12 months, receiving income replacement or other disability benefits for a period of not
less than 3 months under an accident and health plan covering employees of the participant’s
employer.

     2.13 Employee. “Employee” means any employee of the Company.

     2.14 ERISA. “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time.

     2.15 Financial Hardship. “Financial Hardship” means a severe financial hardship to
the Participant resulting from an illness or accident of the Participant, the Participant’s spouse,
or a dependent (as defined in Section 152(a) of the Code) of the Participant, loss of the
Participant’s property due to casualty, or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the participant, provided, that
such financial hardship may not be relieved through reimbursement or compensation from insurance or
otherwise, by liquidation of the Participant’s assets, to the extent the liquidation of such assets
would not cause severe financial hardship, or by cessation of deferrals under the Plan. The
determination of whether a Financial Hardship exists shall be subject to and determined in
accordance with relevant tax guidance issued under Section 409A of the Code.

     2.16 Interest. “Interest” means the amount credited to or charged against a
Participant’s Account(s) on each Determination Date, which shall be based on the Valuation Funds
chosen by the Participant as provided in Section 2.22, below and in a manner consistent with
Section 4.3, below. Such credits or charges to a Participant’s Account may be either positive or
negative to reflect the increase or decrease in value of the Account in accordance with the
provisions of this Plan.

     2.17 Company Matching Contribution. “Company Matching Contribution” means the annual
contribution made by the Company to the eligible Participant’s Company Matching Contribution
Account as provided for in Section 4.4, below.

     2.18 Participant. “Participant” means any individual who is eligible, pursuant to
Section 3.1, below, to participate in this Plan, and who has elected to defer Compensation under
this Plan in accordance with Article III, below. Such individual shall remain a Participant in
this Plan for the period of deferral, or credit, and until such time as all benefits payable under
this Plan have been paid in accordance with the provisions hereof.

     2.19 Plan. “Plan” means this Executive Deferred Compensation Plan as amended from
time to time.

     2.20 Plan Year. “Plan Year” means the calendar year.

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     2.21 Specified Employees. “Specified Employees” means key employees, as defined in
Section 416(i) of the Code without regard to paragraph (5) thereof, of the Company, determined as
of December 31 of the preceding calendar year.

     2.22 Valuation Funds. “Valuation Funds” means one or more of the hypothetical
investment funds or indices managed by an investment manager that are selected by the Committee.
These Valuation Funds are used solely to calculate the Interest that is credited to each
Participant’s Account(s) in accordance with Article IV, below, and does not represent, nor should
it be interpreted to convey any beneficial interest or ownership on the part of the Participant in
any asset or other property of the Company. Participants may allocate their Account(s) between
Valuation Funds. Exhibit A attached hereto sets forth the available Valuation Funds which may be
amended from time to time in the sole and absolute discretion of the Committee.

ARTICLE
III —  ELIGIBILITY AND PARTICIPATION

     3.1 Eligibility and Participation.

          (a) Eligibility. Employees holding the following positions with the Company, and any
named Employees designated by the Committee by special vote as eligible or ineligible, are eligible
to participate in the Plan:

               (i) Chief Executive Officer;

               (ii) President;

               (iii) Senior Vice President;

               (iv) Vice President; and

          (b) Participation. An individual’s participation in the Plan shall be effective upon
the first day of the month following notification to the individual by the Committee or its
designee of his/her eligibility to participate; provided the individual has completed and submitted
an Enrollment Form and Allocation Form to the Committee no later than fifteen (15) days prior to
the beginning of the Deferral Period; otherwise, the individual shall become a Participant in the
Plan as of the first day of the Plan Year for which he or she has filed the aforementioned forms.

     3.2 First-Year Participation. When an individual first becomes eligible to participate
in this Plan, a Deferral Election may be submitted to the Committee within thirty (30) days after
the Committee notifies the individual of eligibility to participate. Such Deferral Election will
be effective only with regard to Compensation earned and payable following submission of the
Deferral Election to the Committee.

     3.3 Form of Deferral Election. A Participant may irrevocably elect to make a Deferral
Election no later than December 31 of the Plan Year prior to the beginning of the Deferral Period
by

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submitting the Enrollment Form permitted by the Committee. The Deferral Election shall
specify the following:

          (a) Deferral Amounts. A Deferral Election shall be made with respect to each payment
of Compensation payable by the Company to a Participant during the Deferral Period. The
Participant shall set forth the amount of his or her salary to be deferred as a whole percentage
amount of Compensation, and with respect to the deferral of bonus Compensation, a stated dollar
amount or a whole percentage amount above a stated dollar amount.

          (b) Allocation to Valuation Funds. The Participant shall specify in a separate form
(known as the “Allocation Form”) filed with the Committee, the Participant’s initial allocation of
the amounts deferred into his or her Account(s) among the various available Valuation Funds.

          (c) Maximum Deferral. The maximum amount of Compensation that may be deferred shall
be no more than one hundred percent (100%) of base salary and one hundred percent (100%) of annual
bonus or incentive compensation.

     3.4 Period of Commitment. Any Deferral Election made by a Participant with respect to
Compensation shall remain in effect for the next succeeding Deferral Period, and shall remain in
effect for all future Deferral Periods unless revoked or amended in writing by the Participant and
delivered to the Committee no later than fifteen (15) days prior to the beginning of a subsequent
Deferral Period, except that if a Participant suffers a Disability or terminates employment with
Company prior to the end of the Deferral Period, the Deferral Period shall end as of the date of
Disability or termination.

     3.5 Modification of Deferral Election. Except as provided in Sections 3.3, above, and
5.3 below, a Deferral Election shall be irrevocable by the Participant during a Deferral Period.

     3.6 Change in Status. If the Committee determines that a Participant’s employment
performance is no longer at a level that warrants reward through participation in this Plan, but
does not terminate the Participant’s employment with Company, the Participant’s existing Deferral
Election shall terminate at the end of the Deferral Period, and no new Deferral Election may be
made by such Participant after notice of such determination is given by the Committee, unless the
Participant later satisfies the requirements of Section 3.1. If the Committee, in its sole
discretion, determines that the Participant no longer qualifies as a member of a select group of
management or highly compensated employees, as determined in accordance with ERISA, and
interpretive guidance issued thereunder, the Committee may, in its sole discretion terminate any
Deferral Election for that year, and prohibit the Participant from making any future Deferral
Elections.

     3.7 Defaults in Event of Incomplete or Inaccurate Deferral Elections. In the event
that a Participant submits a Deferral Election to the Committee that contains information necessary
to the efficient operation of this Plan which, in the sole discretion of the Committee, is

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incomplete or inaccurate, the Committee shall be authorized to treat the incomplete or
inaccurate Deferral Election as if the following elections had been made by the Participant, and
such information shall be communicated to the Participant:

          (a) If no Valuation Fund is selected — treat as if the Money Market Fund was elected;

          (b) If Valuation Fund(s) selected equal less than 100% — treat as if the Money Market Fund was
elected for remaining balance; and

          (c) If Valuation Fund(s) selected equal more than 100% — proportionately reduce each Valuation
Fund to equal 100%.

ARTICLE IV — DEFERRED COMPENSATION ACCOUNT

     4.1 Accounts. The Compensation deferred by a Participant under the Plan, and Interest
shall be credited to the Participant’s Deferral Account as selected by the Participant; any
Matching Contributions and Interest thereon shall be credited to the Participant’s Company Matching
Contribution Account.

     4.2 Timing of Credits; Withholding. A Participant’s deferred Compensation shall be
credited to the Participant’s Deferral Account as soon as administratively practical after the date
the Compensation deferred would have otherwise been payable to the Participant. Any Matching
Contributions shall be credited to the Company Matching Contribution Account as set forth in
Section 4.5, below. Any withholding of taxes or other amounts with respect to deferred
Compensation or other amounts credited under this Plan that is required by local, state or federal
law shall be withheld from the Participant’s corresponding non-deferred portion of the Compensation
to the maximum extent possible, and any remaining amount shall reduce the amount credited to the
Participant’s Account in a manner specified by the Committee.

     4.3 Valuation Funds. A Participant shall designate, at a time and in a manner
acceptable to the Committee, one or more Valuation Funds for each Account for the sole purpose of
determining the amount of Interest to be credited or debited to such Account. Such election shall
designate the portion of each deferral of Compensation and/or Matching Contribution that shall be
allocated among the available Valuation Fund(s), and such election shall apply to each succeeding
deferral of Compensation and/or Matching Contribution until such time as the Participant shall file
a new election with the Committee. Upon notice to the Committee, Participants shall also be
permitted to reallocate the balance in each Valuation Fund among the other available Valuation
Funds as determined by the Committee. The manner in which such elections shall be made and the
frequency with which such elections may be changed and the manner in which such elections shall
become effective shall be determined in accordance with the procedures to be adopted by the
Committee or its delegates from time to time. As of the Effective Date, such elections may be made
on a daily basis electronically, and such elections shall become effective on the date made or the
next available Determination Date.

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     4.4 Company Matching Contributions. The Company shall make a Matching Company
Contribution only to the Company Matching Contribution Account of any Participants: (i) who hold
the title of Senior Vice President and above, and any Vice President who is a member of the
Company’s Executive Committee (the composition of such committee is determined in the sole and
absolute discretion of the Company’s Board), and (ii) any named Employees so designated by the
Committee as eligible. To receive a Company Matching Contribution for a Plan Year eligible
Participants must be employed by the Company on the last day of the Plan Year. The Company shall
make the Company Matching Contribution as soon as is practical after the Plan Year, but in no event
later than the sixty (60) days following the close of the Plan Year. The amount of the Company
Matching Contribution shall equal one hundred percent (100%) of the Participant’s first $10,000
contributed to his/her Deferral Account for the Plan Year and fifty percent (50%) of the next
$20,000 contributed to his/her Deferral Account for the Plan Year. Notwithstanding anything herein
to the contrary (other than the eligibility requirements of the first sentence of this Section
4.4), in the event that either a Change in Control occurs, the Company or any successor executes an
amendment to the Plan to retroactively eliminate or reduce the Company Matching Contributions or
the death or disability of the Participant, then the Company shall be obligated to contribute the
Company Matching Contribution within fifteen (15) days of the occurrence of the Change of Control,
effective date of any such amendment, or death or disability of the Participant based upon
contributions credited to an eligible Participant’s Deferral Account as of such date.

     4.5 Determination of Accounts. Each Participant’s Account as of each Determination
Date shall consist of the balance of the Account as of the immediately preceding Determination
Date, adjusted as follows:

          (a) New Deferrals. Each Account shall be increased by any deferred Compensation
credited since such prior Determination Date, except that no amount of new deferrals shall be
credited to an Account at the same time that a distribution is to be made from that Account.

          (b) Company Matching Contributions. Each Account shall be increased by any Matching
Contributions credited since such prior Determination as set forth above in sections 4.4 or as
otherwise directed by the Committee.

          (c) Distributions. Each Account shall be reduced by the amount of each benefit
payment made from that Account since the prior Determination Date. Distributions shall be deemed
to have been made proportionally from each of the Valuation Funds maintained within such Account
based on the proportion that such Valuation Fund bears to the sum of all Valuation Funds maintained
within such Account for that Participant as of the Determination Date immediately preceding the
date of payment.

          (d) Interest. Each Account shall be increased or decreased by the Interest credited
to such Account since such Determination Date as though the balance of that Account as of the
beginning of the current month had been invested in the applicable Valuation Funds chosen by the
Participant.

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          (e) Vesting of Accounts. A Participant shall be one-hundred percent (100%) vested at
all times in the amount of Compensation elected to be deferred under this Plan to the Deferral
Account and in Company Matching Contributions, if any, contributed to a Participant’s Company
Matching Contribution Account.

          (f) Statement of Accounts. The Committee shall direct the Plan’s third-party
administrator to provide to each Participant a statement showing the balances in the Participant’s
Account on a quarterly basis.

ARTICLE V — PLAN BENEFITS

     5.1 Deferral Account. A Participant’s Deferral and Company Matching Contribution
Account shall be distributed to the Participant upon the termination of employment with the
Company.

          (a) Timing of Payment. Subject to Section 5.6, benefits payable from the Deferral
Account and Company Matching Contribution Account shall be made on or about the January
15th immediately following the date of the Participant’s termination of employment, or
if later forty-five (45) days following the Participant’s termination of employment

          (b) Form of Payment. The form of benefit payment from the Deferral Account shall be
paid in the form of a lump sum payment.

     5.2 Death Benefit. Upon the death of a Participant prior to the commencement of
benefits under this Plan from any particular Account, Company shall pay to the Participant’s
Beneficiary an amount equal to the Account balance in that Account in the form of a lump sum
payment. In the event of the death of the Participant after the commencement of benefits under
this Plan from any Account, the benefits from that Account(s) shall be paid to the Participant’s
designated Beneficiary from that Account at the same time and in the same manner as if the
Participant had survived.

     5.3 Hardship Distributions. Upon a finding that a Participant has suffered a Financial
Hardship, the Committee shall terminate the existing Deferral Election, and/or make distributions
from any or all of the Participant’s Accounts. The amount of such distribution, subject to a $1,000
minimum distribution amount, shall be limited to the amount reasonably necessary to meet the
Participant’s needs resulting from the Financial Hardship plus amounts necessary to pay taxes
reasonably anticipated as a result of the distribution, after taking into account the extent to
which such Financial Hardship is or may be relieved through the reimbursement or compensation by
insurance, or otherwise or by liquidation of the Participant’s assets (to the extent that
liquidation of such assets would not itself cause severe financial hardship). The amount of such
distribution will not exceed the Participant’s vested Account balances. If payment is made due to
Financial Hardship, the Participant’s deferrals under this Plan shall cease for the period of the
Financial Hardship and for twelve (12)

9

 

months thereafter. If the Participant is again eligible to participate, any resumption of the
Participant’s deferrals under the Plan after such twelve (12) month period shall be made only at
the election of the Participant in accordance with Article III herein.

     5.4 Change of Control Distributions. Upon the occurrence of a Change of Control,
benefits payable from the Deferral and Company Matching Contribution Accounts shall be distributed
to the Participant within thirty (30) days following the Change of Control.

     5.5 Payment to Specified Employees. Payments of benefits from a Participant’s
Account(s) caused by the termination of employment of a Participant who is determined to meet the
definition of Specified Employee shall be payable as otherwise provided, except that the initial
payment shall be made no earlier than the six (6) months following the termination of employment
with the Company.

          (a) Form of Payment. Unless otherwise specified in this Article, the benefits payable
from any Account under this Plan shall be paid in the form of a lump sum amount which is equal to
the vested Account.

     5.6 Withholding; Payroll Taxes. Company shall withhold from any payment made pursuant
to this Plan any taxes required to be withheld from such payments under local, state or federal
law. A Beneficiary, however, may elect not to have withholding of federal income tax pursuant to
Section 3405(a)(2) of the Code, or any successor provision thereto.

     5.7 Payment to Guardian. If a Plan benefit is payable to a minor or a person declared
incompetent or to a person incapable of handling the disposition of the property, the Committee may
direct payment to the guardian, legal representative or person having the care and custody of such
minor, incompetent or person. The Committee may require proof of incompetency, minority,
incapacity or guardianship as it may deem appropriate prior to distribution. Such distribution
shall completely discharge the Committee and Company from all liability with respect to such
benefit. 

     5.8 Effect of Payment. The full payment of the applicable benefit under this Article
V shall completely discharge all obligations on the part of the Company to the Participant (and the
Participant’s Beneficiary) with respect to the operation of this Plan, and the Participant’s (and
Participant’s Beneficiary’s) rights under this Plan shall terminate.

     5.9 Forfeiture. In the event a Participant is terminated for “cause”, then his
Company Matching Contribution Account shall be immediately forfeited. For purposes of this Plan,
“cause” shall mean, in summary, the Participant’s (i) intentional failure to perform reasonably
assigned duties; (ii) dishonesty or willful misconduct in the performance of duties; (iii)
involvement in a transaction in connection with the performance of duties to the Company that is
adverse to the interests of the Company and that is engaged in for personal profit; or (iv) willful
violation of any law, rule or regulation in connection with the performance of duties (other than
traffic violations or similar offenses). Notwithstanding anything in the Plan to the contrary,
forfeiture for cause may not occur following a Change of Control.

10

 

ARTICLE VI — BENEFICIARY DESIGNATION

     6.1 Beneficiary Designation. Each Participant shall have the right, at any time, to
designate one (1) or more persons or entity as Beneficiary (both primary as well as secondary) to
whom benefits under this Plan shall be paid in the event of Participant’s death prior to complete
distribution of the Participant’s vested Account balance. Each Beneficiary designation shall be in
a written form prescribed by the Committee and shall be effective only when filed with the
Committee during the Participant’s lifetime.

     6.2 Changing Beneficiary. Any Beneficiary designation may be changed by a Participant
without the consent of the previously named Beneficiary by the filing of a new Beneficiary
designation with the Committee.

     6.3 No Beneficiary Designation. If any Participant fails to designate a Beneficiary
in the manner provided above, if the designation is void, or if the Beneficiary designated by a
deceased Participant dies before the Participant or before complete distribution of the
Participant’s benefits, the Participant’s Beneficiary shall be the person in the first of the
following classes in which there is a survivor:

          (a) The Participant’s surviving spouse;

          (b) The Participant’s children in equal shares, except that if any of the children predeceases
the Participant but leaves surviving issue, then such issue shall take by right of representation
the share the deceased child would have taken if living; or

          (c) The Participant’s estate.

     6.4 Effect of Payment. Payment to the Beneficiary shall completely discharge the
Company’s obligations under this Plan.

ARTICLE VII — ADMINISTRATION

     7.1 Committee; Duties. This Plan shall be administered by the Compensation Committee.
The Committee or its designee shall have the authority to make, amend, interpret and enforce all
appropriate rules and regulations for the administration of the Plan and decide or resolve any and
all questions, including interpretations of the Plan, as they may arise in such administration. A
majority vote of the Committee members shall control any decision.

     7.2 Agents. The Committee may, from time to time, employ agents and delegate to them
such administrative duties as it sees fit, and may from time to time consult with counsel who may
be counsel to the Company.

     7.3 Binding Effect of Decisions. The decision or action of the Committee with
respect to any question arising out of or in connection with the administration, interpretation and

11

 

application of the Plan and the rules and regulations promulgated hereunder shall be final,
conclusive and binding upon all persons having any interest in the Plan.

     7.4 Indemnity of Committee. To the fullest extent permitted by the Company’s Articles
of Incorporation and By-Laws, the Company shall indemnify and hold harmless the members of the
Compensation Committee against any and all claims, loss, damage, expense or liability arising from
any action or failure to act with respect to this Plan on account of such member’s service on the
Committee, except in the case of gross negligence or willful misconduct.

ARTICLE VIII — CLAIMS PROCEDURE

     8.1 Claim. Any person or entity claiming a benefit, requesting an interpretation or
ruling under the Plan (hereinafter referred to as “Claimant”), or requesting information under the
Plan shall present the request in writing to the Committee, which shall respond in writing as soon
as practical, but in no event later than ninety (90) days after receiving the initial claim (or no
later than forty-five (45) days after receiving the initial claim regarding a Disability under this
Plan).

     8.2 Denial of Claim. If the claim or request is denied, the written notice of denial
shall state:

          (a) The reasons for denial, with specific reference to the Plan provisions on which the denial
is based;

          (b) A description of any additional material or information required and an explanation of why
it is necessary, in which event the time frames listed in section 8.1 shall be one hundred and
eighty (180) and seventy-five (75) days from the date of the initial claim respectively; and

          (c) An explanation of the Plan’s claim review procedure.

     8.3 Review of Claim. Any Claimant whose claim or request is denied or who has not
received a response within sixty (60) days (or one hundred and eighty (180) days in the event of a
claim regarding a Disability) may request a review by notice given in writing to the Committee.
Such request must be made within sixty (60) days (or one hundred and eighty (180) days in the event
of a claim regarding a Disability) after receipt by the Claimant of the written notice of denial,
or in the event Claimant has not received a response sixty (60) days (or one hundred and eighty
(180) days in the event of a claim regarding a Disability) after receipt by the Committee of
Claimant’s claim or request. The claim or request shall be reviewed by the Committee which may,
but shall not be required to, grant the Claimant a hearing. On review, the claimant may have
representation, examine pertinent documents, and submit issues and comments in writing.

     8.4 Final Decision. The decision on review shall normally be made within sixty (60)
days (or forty-five (45) days in the event of a claim regarding a Disability) after the Committee’s
receipt of claimant’s claim or request. If an extension of time is required for a hearing or other
special

12

 

circumstances, the Claimant shall be notified and the time limit shall be one hundred twenty
(120) days (or ninety (90) days in the event of a claim regarding a Disability). The decision
shall be in writing and shall state the reasons and the relevant Plan provisions. All decisions on
review shall be final and bind all parties concerned.

     8.5 Indemnity. The Company agrees to pay all costs and expenses incurred by any
Participant in connection with efforts to enforce his or her rights under this Plan and will
indemnify and hold harmless any Participant from and against any damages, liabilities and expenses
(including without limitation reasonable fees and expenses of counsel) incurred by the Participant
in connection with any litigation or threatened litigation, including any regulatory proceedings,
arising out of the making, performance or enforcement of this Plan.

ARTICLE IX — AMENDMENT AND TERMINATION OF PLAN

     9.1 Amendment. The Board may at any time amend the Plan by written instrument,
notice of which is given to all Participants and to Beneficiary receiving installment payments,
except that no amendment shall reduce or otherwise adversely affect the amount accrued in any
Account as of the date the amendment is adopted. In the event the Board amends the Plan to
eliminate Matching Contributions, each Participant shall be entitled to a pro-rata Company Matching
Contribution through the effective date of the amendment to the Plan for Deferral Contributions
made during the Plan Year, pursuant to Section 4.4 of this Plan. Further, upon the occurrence of
a Change of Control, no amendment shall reduce or otherwise adversely affect the proportionate
share of a Participant’s Deferral Election, with regard to both compensation and bonus, and any
Company Matching Contribution attributable thereto.

     9.2 Company’s Right to Terminate. The Board may at any time terminate the Plan
provided that such termination of the Plan is not treated as an “acceleration of benefits” as
described in Section 409A(a)(3) of the Code and appropriate Treasury regulations or other guidance
issued by the Internal Revenue Service or Treasury. Upon a permitted partial or complete
termination, the Board may cease all future Deferral Elections, all current Deferral Elections, and
or, in its sole discretion, pay out Accounts over a period of up to five (5) years, provided such
action is not treated as an “acceleration of benefits” as described in Section 409A(a)(3) of the
Code and appropriate Treasury regulations or other guidance issued by the Internal Revenue Service
or Treasury without the action.

ARTICLE X — MISCELLANEOUS

     10.1 Unsecured General Creditor. Notwithstanding any other provision of this Plan,
Participants and Participants’ Beneficiary shall be unsecured general creditors, with no secured or
preferential rights to any assets of Company or any other party for payment of benefits under this
Plan. Any property held by Company for the purpose of generating the cash flow for benefit
payments shall remain its general, unpledged and unrestricted assets. Company’s obligation under
the Plan shall be an unfunded and unsecured promise to pay money in the future.

     10.2 Trust Fund. Company shall be responsible for the payment of all benefits

13

 

provided under the Plan. At its discretion, Company may establish one (1) or more rabbi
trusts, with such trustees as the Board may approve, for the purpose of assisting in the payment of
such benefits. The assets of any such trust shall be held for payment of all Company’s general
creditors in the event of insolvency. To the extent any benefits provided under the Plan are paid
from any such trust, Company shall have no further obligation to pay them. If not paid from the
trust, such benefits shall remain the obligation of Company.

     10.3 Nonassignability. Neither a Participant nor any other person shall have any right
to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer,
hypothecate or convey in advance of actual receipt the amounts, if any, payable hereunder, or any
part thereof, which are, and all rights to which are, expressly declared to be unassignable and
non-transferable. No part of the amounts payable shall, prior to actual payment, be subject to
seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance
owed by a Participant or any other person, nor be transferable by operation of law in the event of
a Participant’s or any other person’s bankruptcy or insolvency.

     10.4 Not a Contract of Employment. This Plan shall not constitute an employment
contract or a contract for services of any kind between the Company and the Participant. Nothing
in this Plan shall confer on the Participant the right to be retained by Company or otherwise be
retained in the service of the Company or to interfere with the right of the Company to terminate
its relationship with a Participant at any time.

     10.5 Protective Provisions. A Participant will cooperate with Company by furnishing
any and all information requested by Company, in order to facilitate the payment of benefits
hereunder, and by taking such physical examinations as Company may deem necessary and taking such
other action as may be requested by Company.

     10.6 Governing Law. The provisions of this Plan shall be construed and interpreted
according to the laws of the Commonwealth of Massachusetts, except to the extent as preempted by
federal law.

     10.7 Validity. If any provision of this Plan shall be held illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan
shall be construed and enforced as if such illegal and invalid provision had never been inserted
herein.

     10.8 Notice. Any notice required or permitted under the Plan shall be sufficient if
in writing and hand delivered or sent by registered or certified mail. Such notice shall be deemed
given as of the date of delivery or, if delivery is made by mail, as of the date shown on the
postmark on the receipt for registration or certification. Mailed notice to the Committee shall be
directed to the company’s address. Mailed notice to a Participant or Beneficiary shall be directed
to the individual’s last known address in company’s records.

     10.9 Successors. The provisions of this Plan shall bind and inure to the benefit of
Company and its successors and assigns. The term successors as used herein shall include any

14

 

corporate or other business entity which shall, whether by merger, consolidation, purchase or
otherwise acquire all or substantially all of the business and assets of Company, and successors of
any such corporation or other business entity

     10.10 409A. Notwithstanding anything herein to the contrary, in the event that the
Company, upon the advice of its counsel, determines in its sole and absolute discretion that a
delay in payment of a benefit hereunder or other modification is necessary to comply with Section
409A of the Code and interpretive guidance thereunder, then such delay in payment or other
modification shall be made.

	 	 	 	 	 
	 	 	THE YANKEE CANDLE COMPANY, INC.
	 
	 	 	 	 
	 

	 	BY:	 	 
	 

	 	 	 	 
	 

	 	DATED	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	# 1449768 v6 -
	 	 	 	 

15

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