<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT [ ] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
- --------------------------------------------------------------------------------
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
THE YANKEE CANDLE COMPANY, INC.
(Name of Registrant as Specified In Its Charter)
NAME OF COMPANY
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
THE YANKEE CANDLE COMPANY, INC.
102 CHRISTIAN LANE
WHATELY, MASSACHUSETTS 01093
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
------------------------
To the Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual
Meeting") of THE YANKEE CANDLE COMPANY, INC. (the "Company"), a Massachusetts
corporation, will be held on Thursday, June 1, 2000, at 10:00 a.m. at The Yankee
Candle Employee Health and Fitness Center, 25 Greenfield Road (Route 5),
Deerfield, Massachusetts (adjacent to the South Deerfield flagship store), to
consider and act upon the following matters:
1. To elect three (3) Class I directors for the ensuing three years;
2. To ratify the selection of Deloitte & Touche as independent
auditors for the Company for the fiscal year ending December 31, 2000; and
3. To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on April 21, 2000 as
the record date for the determination of stockholders entitled to receive notice
of and vote at the Annual Meeting and any adjournment thereof.
We hope that all stockholders will be able to attend the Annual Meeting in
person. In order to ensure that a quorum is present at the Annual Meeting,
please date, sign and promptly return the enclosed Proxy whether or not you
expect to attend the Annual Meeting. A postage-prepaid envelope has been
enclosed for your convenience.
All stockholders are cordially invited to attend the meeting.
By Order of the Board of Directors,
MICHAEL D. PARRY
President and Chief Executive
Officer
Whately, Massachusetts
April 28, 2000
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN
THE ENCLOSED PROXY CARD AND PROMPTLY MAIL IT IN THE ENCLOSED ENVELOPE IN ORDER
TO ASSURE REPRESENTATION OF YOUR SHARES AT THE MEETING. NO POSTAGE NEED BE
AFFIXED IF THE PROXY CARD IS MAILED IN THE UNITED STATES.
<PAGE> 3
THE YANKEE CANDLE COMPANY, INC.
102 CHRISTIAN LANE
WHATELY, MASSACHUSETTS 01093
------------------------
PROXY STATEMENT
------------------------
FOR THE 2000 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 1, 2000
GENERAL INFORMATION
The enclosed proxy is solicited by the Board of Directors of THE YANKEE
CANDLE COMPANY, INC. (the "Company"), a Massachusetts corporation, for use at
the Annual Meeting of Stockholders (the "Annual Meeting") to be held on
Thursday, June 1, 2000, at 10:00 a.m. at The Yankee Candle Employee Health and
Fitness Center, 25 Greenfield Road (Route 5), Deerfield, Massachusetts (adjacent
to the South Deerfield flagship store), and at any adjournment or adjournments
thereof.
All proxies will be voted in accordance with the instructions contained
therein, and if no choice is specified, the proxies will be voted in favor of
the matters set forth in the accompanying Notice of Meeting. Any proxy may be
revoked by a stockholder at any time before it is exercised, by delivery of
written revocation or a subsequently dated proxy to the Clerk of the Company, or
by voting in person at the Annual Meeting.
The Company's Annual Report to Stockholders for the fiscal year ended
January 1, 2000 ("Fiscal 1999") is being mailed to stockholders with the mailing
of this Notice and Proxy Statement on or about April 28, 2000.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED JANUARY 1, 2000 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION,
EXCEPT FOR EXHIBITS, WILL BE FURNISHED WITHOUT CHARGE TO ANY STOCKHOLDER UPON
WRITTEN REQUEST TO THE CHIEF FINANCIAL OFFICER, THE YANKEE CANDLE COMPANY, INC.,
102 CHRISTIAN LANE, WHATELY, MASSACHUSETTS 01093. COPIES ARE ALSO AVAILABLE ON
THE INTERNET AT BOTH THE COMPANY'S WEB SITE (WWW.YANKEECANDLE.COM) AND THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION'S EDGAR DATABASE WEB SITE
(WWW.SEC.GOV).
QUORUM AND VOTE REQUIREMENT
Stockholders of record at the close of business on April 21, 2000 will be
entitled to notice of and to vote at the Annual Meeting and at any adjournment
or adjournments thereof. On that date, 54,513,961 shares of the Company's common
stock, $0.01 par value per share (the "Common Stock"), were issued and
outstanding, constituting all of the outstanding voting stock of the Company.
Each share of Common Stock entitles the holder to one vote with respect to all
matters submitted to stockholders at the Annual Meeting.
<PAGE> 4
The representation in person or by proxy of at least a majority of the
shares of Common Stock entitled to vote at the Annual Meeting is necessary to
establish a quorum for the transaction of business. Shares of Common Stock
represented in person or by proxy (including shares which abstain or otherwise
do not vote with respect to one or more of the matters presented for stockholder
approval) will be counted for purposes of determining whether a quorum is
present at the Annual Meeting.
Directors are elected by a plurality of votes cast by stockholders entitled
to vote at the Annual Meeting. The ratification of the selection of independent
auditors requires the affirmative vote of the majority of votes cast on the
matter.
Shares which abstain from voting as to a particular matter, and shares held
in "street name" by a broker or nominee who indicates on a proxy that it does
not have discretionary authority to vote as to a particular matter, will not be
voted in favor of such matter, and also will not be counted as votes cast on
such matter. Accordingly, abstentions and "broker non-votes" will have no effect
on the voting on a matter that requires the affirmative vote of a certain
percentage of the votes cast on that matter (such as the election of the
directors and the ratification of the selection of independent auditors).
STOCK OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of January 31, 2000, unless indicated
otherwise, certain information concerning the beneficial ownership of the
Company's Common Stock by (i) each person known by the Company to own
beneficially five percent (5%) or more of the outstanding shares of the
Company's Common Stock; (ii) each of the Company's executive officers and
directors; and (iii) all executive officers and directors as a group.
The number of shares beneficially owned by each 5% stockholder, director or
executive officer is determined under rules of the Securities and Exchange
Commission (the "SEC"), and the information is not necessarily indicative of
beneficial ownership for any other purpose. Under such rules, beneficial
ownership includes any shares as to which the individual or entity has sole or
shared voting power or investment power and also any shares which the individual
or entity has the right to acquire on or before March 31, 2000 through the
exercise of stock options, and any reference in the footnotes to this table to
shares subject to stock options refers only to stock options that are so
exercisable. For purposes of computing the percentage of outstanding shares of
common stock held by each person or entity, any shares which that person or
entity has the right to acquire on or before March 31, 2000, are deemed to be
outstanding but are not deemed to be outstanding for the purpose of computing
the percentage ownership of any other person. Unless otherwise indicated, each
person or entity has sole investment and voting power (or shares such power with
his or her spouse) with respect to the shares set forth in the following table.
The inclusion herein of any shares deemed beneficially owned does not constitute
an admission of beneficial ownership of those shares.
2
<PAGE> 5
<TABLE>
<CAPTION>
SHARE OF PERCENTAGE OF
COMMON OUTSTANDING
STOCK BENEFICIALLY COMMON
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED STOCK(10)
- ------------------------------------ ------------------ -------------
<S> <C> <C>
5% STOCKHOLDERS:
Forstmann Little & Co. Equity Partnership-V, L.P.(1)... 20,745,742 38.06%
Forstmann Little & Co. Subordinated Debt and Equity
Management Buyout Partnership-VI, L.P................ 13,661,830 25.06%
Chieftain Capital Management, Inc.(2).................. 6,009,825 11.02%
Michael J. Kittredge(3)................................ 4,059,840 7.45%
OTHER DIRECTORS:
Theodore J. Forstmann(1)............................... 34,407,572 63.12%
Nicholas C. Forstmann(1)............................... 34,407,572 63.12%
Sandra J. Horbach(1)................................... 34,407,572 63.12%
Michael D. Parry....................................... 451,234 *
Michael S. Ovitz(4).................................... 86,658 *
Ronald L. Sargent(5)................................... 54,357 *
Emily Woods(6)......................................... 16,286 *
Steven B. Klinsky(7)................................... 0 *
OTHER EXECUTIVE OFFICERS:
Gail M. Flood(8)....................................... 315,816 *
Robert R. Spellman..................................... 451,234 *
Stephen T. Williams.................................... 180,556 *
CLASS I DIRECTOR NOMINEE:
Jamie C. Nicholls...................................... 0 *
All Directors and Executive Officers as a Group (12
persons)(9).......................................... 39,944,803 73.27%
</TABLE>
- ---------------
* Less than 1%.
(1) The general partner of Forstmann Little & Co. Equity Partnership-V, L.P., a
Delaware limited partnership ("Equity-V"), is FLC XXX Partnership, L.P., a
New York limited partnership ("FLC XXX Partnership") of which Messrs.
Theodore J. Forstmann and Nicholas C. Forstmann, Ms. Sandra J. Horbach,
Messrs. Thomas H. Lister, Winston W. Hutchins and Erskine B. Bowles
(through Tywana LLC, a North Carolina limited liability company having its
principal business office at 2012 North Tryon Street, Suite 2450,
Charlotte, NC 28202), Ms. Jamie C. Nicholls and Mr. S. Joshua Lewis are
general partners. The general partner of Forstmann Little & Co.
Subordinated Debt and Equity Management Buyout Partnership-VI, L.P., a
Delaware limited partnership ("MBO-VI"), is FLC XXIX Partnership, L.P., a
New York limited partnership of which Messrs. Theodore J. Forstmann and
Nicholas C. Forstmann, Ms. Sandra J. Horbach, Messrs. Thomas H. Lister,
Winston W. Hutchins and Erskine B. Bowles (through Tywana LLC), Ms. Jamie
C. Nicholls and Mr. S. Joshua Lewis are general
3
<PAGE> 6
partners. Accordingly, each of the individuals named above, other than Mr.
Lister, with respect to MBO-VI, and Mr. Bowles, Ms. Nicholls and Mr. Lewis
with respect to Equity-V and MBO-VI, for the reasons described below, may
be deemed the beneficial owners of shares owned by MBO-VI and Equity-V and,
for purposes of this table, beneficial ownership is included. Mr. Lister,
with respect to MBO-VI, and Mr. Bowles, Ms. Nicholls and Mr. Lewis with
respect to Equity-V and MBO-VI, do not have any voting or investment power
with respect to, or any economic interest in, the shares of common stock
held by MBO-VI or Equity-V; and, accordingly, Mr. Lister, Mr. Bowles, Ms.
Nicholls and Mr. Lewis are not deemed to be the beneficial owners of these
shares. Theodore J. Forstmann and Nicholas C. Forstmann are brothers. FLC
XXX Partnership is a limited partner of Equity-V. None of the other limited
partners in each of MBO-VI and Equity-V is otherwise affiliated with the
Company, or Forstmann Little & Co. The address of Equity-V and MBO-VI is
c/o Forstmann Little & Co., 767 Fifth Avenue, New York, New York 10153. The
address for Messrs. Theodore J. Forstmann and Nicholas C. Forstmann, Ms.
Sandra J. Horbach, Messrs. Thomas H. Lister, Winston W. Hutchins and
Erskine B. Bowles, Ms. Jamie C. Nicholls and Mr. S. Joshua Lewis is c/o
Forstmann Little & Co., 767 Fifth Avenue, New York, New York 10153.
(2) The information is based solely on a Schedule 13G, dated February 14, 2000,
filed with the SEC by Chieftain Capital Management, Inc. ("Chieftain").
Chieftain has investment discretion with respect to the shares of common
stock listed. Chieftain's clients are the direct owners of such securities,
and Chieftain does not have any economic interest in such securities. Such
clients have the sole right to receive dividends from, and the proceeds
from the sale of, such securities. No such client has an interest that
relates to more than 5% of the class. The address of Chieftain is 12 East
49th Street, New York, NY 10017.
(3) Mr. Kittredge's address is c/o The Yankee Candle Company, Inc., 102
Christian Lane, Whately, Massachusetts 01093.
(4) Includes 7,908 shares subject to options. In addition, although not a
general partner of Equity-V, Mr. Ovitz may be deemed a beneficial owner of
78,750 shares owned by Equity-V, and, for purposes of this table,
beneficial ownership of such shares is included.
(5) Includes 48,857 shares subject to options.
(6) Represents 16,286 shares subject to options.
(7) Mr. Klinsky is not standing for reelection as a director of the Company at
the Annual Meeting.
(8) Does not include 157,908 shares beneficially owned by Mr. Harry Flood, Ms.
Gail Flood's husband.
(9) Includes 73,051 shares subject to options.
(10) There were 54,513,961 shares of common stock outstanding on January 31,
2000.
4
<PAGE> 7
ELECTION OF DIRECTORS
The Company's Board of Directors is divided into three classes, with
members of each class holding office for staggered three-year terms. Currently
there are three Class I directors, whose terms expire at this Annual Meeting of
Stockholders, three Class II directors, whose terms expire at the Annual Meeting
of Stockholders following the fiscal year ending December 30, 2000 ("Fiscal
2000"), and three Class III directors, whose terms expire at the Annual Meeting
of Stockholders following the fiscal year ending December 29, 2001 ("Fiscal
2001") (in all cases subject to the election and qualification of their
successors or to their earlier death, resignation or removal). A director may
only be removed with cause by the affirmative vote of the holders of a majority
of the outstanding shares of capital stock entitled to vote in the election of
directors. The Forstmann Little partnerships have a contractual right to elect
two directors until they no longer own any shares of the Company's common stock.
The persons named in the enclosed proxy will vote to elect Theodore J.
Forstmann, Michael S. Ovitz and Jamie C. Nicholls as Class I directors, unless
authority to vote for the election of the nominees is withheld by marking the
proxy to that effect. Mr. Forstmann and Mr. Ovitz are currently Class I
directors of the Company. Ms. Nicholls is a nominee for Class I director of the
Company. They have indicated their willingness to serve, if elected, but if they
should be unable or unwilling to stand for election, proxies may be voted for
substitute nominees designated by the Board of Directors.
Set forth below are the names and certain information with respect to each
director of the Company, as well as the new nominee for Class I director.
NOMINEES FOR CLASS I DIRECTORS
THEODORE J. FORSTMANN has been a director of the Company since April 1999.
Mr. Forstmann has been a general partner of FLC XXIX Partnership, L.P., a
general partner of Forstmann Little & Co., since he co-founded Forstmann Little
& Co. in 1978. He also serves as a director of McLeodUSA Incorporated. Messrs.
Theodore J. Forstmann and Nicholas C. Forstmann are brothers. Mr. Forstmann is
60 years old.
MICHAEL S. OVITZ has been a director of the Company since April 1999. He is
an independent businessman and investor, and has been active in this capacity
since December 1996. In August 1998, Mr. Ovitz co-founded Artists Management
Group, a management/production/multi-media company in which he continues to
serve as a Principal. From October 1995 to December 1996, Mr. Ovitz was
President of The Walt Disney Company. From 1975 to 1995, Mr. Ovitz served as
chairman of Creative Artists Agency, which he co-founded. Mr. Ovitz is 53 years
old.
JAMIE C. NICHOLLS has been a general partner since January 2000 of FLC XXIX
Partnership, L.P., a general partner of Forstmann Little & Co. She has also been
a general partner since January 2000 of FLC XXX Partnership, L.P., the general
partner of Forstmann Little & Co. Equity Partnership-V, L.P. Ms. Nicholls joined
Forstmann Little & Co as an associate in 1995. Prior to joining Forstmann Little
& Co, she was an associate in Goldman, Sachs & Co.'s principal investment area
from 1993 to 1995. Ms. Nicholls is 33 years old.
5
<PAGE> 8
CLASS II DIRECTORS
MICHAEL J. KITTREDGE is the Chairman of the Board and the founder of the
Company. He served as a director until April 1998 and was re-appointed as a
director of the Company in April 1999. He has been honored several times by the
United States Small Business Administration (S.B.A.), once in 1985 as the winner
of the "Entrepreneurial Success Award," and again in 1986 as the "Businessman of
the Year" for Massachusetts and the New England region. In 1996, Mr. Kittredge
received USA Today's and Ernst & Young's Retail Entrepreneur of the Year Award.
Mr. Kittredge is 48 years old.
NICHOLAS C. FORSTMANN has been a director of the Company since April 1999.
He has been a general partner of FLC XXIX Partnership, L.P. since he co-founded
Forstmann Little & Co. in 1978. He is also a director of NEXTLINK
Communications, Inc. Mr. Forstmann is 53 years old.
RONALD L. SARGENT has been a director of the Company since May 1999. Mr.
Sargent has served as President and Chief Operating Officer of Staples, Inc.
since November 1998. Prior to that time, he served in various capacities since
joining Staples, an office products company, in March 1989, including
President -- North American Operations from October 1997 to November 1998,
President -- Staples Contract & Commercial from June 1994 to October 1997, and
Vice President -- Staples Direct and Executive Vice President -- Contract &
Commercial from September 1991 until June 1994. Mr. Sargent also serves as a
director of Staples, Inc. Mr. Sargent is 44 years old.
CLASS III DIRECTORS
SANDRA J. HORBACH has been a director of the Company since May 1998. She
has been a general partner of FLC XXIX Partnership, L.P. since 1993. She is also
a director of NEXTLINK Communications, Inc. Ms. Horbach is 39 years old.
MICHAEL D. PARRY has served as a director of the Company since May 1998. He
is also the President and Chief Executive Officer of the Company. Mr. Parry
joined the Company in 1982 as General Manager, and was appointed Vice President
in January 1989, President in July 1996, and Chief Executive Officer in November
1998. Since 1989, he has been in charge of all of the Company's operations
including general oversight of wholesale and retail activities and manufacturing
and distribution. Mr. Parry is 48 years old.
EMILY WOODS has been a director of the Company since April 1999. She is the
Chairman of J. Crew Group, Inc., an apparel company, which she co-founded in
1983. Ms. Woods is 39 years old.
BOARD AND COMMITTEE MEETINGS
The Board of Directors met four times during Fiscal 1999. During Fiscal
1999, each of the Company's directors attended each of the meetings of the Board
of Directors of the Company held while he or she served as a director, except
for Mr. Kittredge who was unable to attend the meeting held on September 21,
1999.
6
<PAGE> 9
In Fiscal 1999, Messrs. Steven B. Klinsky and Ronald L. Sargent and Ms.
Emily Woods served as the members of the Audit Committee, with Mr. Klinsky and
Ms. Woods joining the Audit Committee in April 1999 and Mr. Sargent joining the
Audit Committee in May 1999. The Company did not have an Audit Committee, or a
committee performing comparable functions, prior to April 1999. The Audit
Committee was established to review the Company's internal accounting policies
and procedures, review the Company's financial statements, consult with the
Company's independent accountants and perform such other functions as may from
time to time be delegated to it by the Board of Directors. The Audit Committee
did not meet during Fiscal 1999, as its responsibilities were discharged by the
full Board of Directors.
In Fiscal 1999, Messrs. Theodore J. Forstmann and Nicholas C. Forstmann and
Ms. Sandra J. Horbach served as members of the Compensation Committee, each of
whom has served on the Compensation Committee since April 1999. The Company did
not have a Compensation Committee, or a committee performing comparable
functions, prior to April 1999. The Compensation Committee was established to
take all actions necessary or desirable to administer the Company's employee
benefit plans, including selecting participants, granting options, construing
and interpreting the terms of such plans and establishing from time to time,
such regulations, provisions, procedures and conditions regarding options and
awards under such plans as may be advisable, to determine the cash compensation
of the Company's executive officers and to perform such other functions as may
from time to time be delegated to it by the Board of Directors. The Compensation
Committee did not meet during Fiscal 1999, as its responsibilities were
discharged by the full Board of Directors.
The Company does not have a standing nominating committee or a committee
performing similar functions.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Each of Messrs. Theodore J. Forstmann and Nicholas C. Forstmann and Ms.
Sandra J. Horbach, the members of the Compensation Committee, are general
partners in partnerships affiliated with the Forstmann Little partnerships. None
of the Compensation Committee members have been officers or employees of the
Company or its subsidiaries. No executive officer of the Company has served as a
member of the Board of Directors or Compensation Committee of another entity,
one of whose executive officers served as a member of the Board of Directors or
Compensation Committee of the Company.
COMPENSATION OF DIRECTORS
Directors who are neither executive officers of the Company nor general
partners in the Forstmann Little partnerships have been granted options to
purchase common stock in connection with their election to the Board of
Directors of Yankee Candle Holdings or the Company. Mr. Michael S. Ovitz and Ms.
Emily Woods each received options to purchase 48,857 shares of the Company's
common stock at $4.25 per share in Fiscal 1998. These options vest ratably over
a three-year period. Mr. Ronald L. Sargent received an option to purchase 48,857
shares of common stock at $18.00 per share in Fiscal 1999. This option to
purchase shares is immediately exercisable.
7
<PAGE> 10
Directors do not receive any fees for serving on the Company's board, but
are reimbursed for their out-of-pocket expenses arising from attendance at
meetings of the board and committees.
COMPENSATION OF EXECUTIVE OFFICERS
Summary Compensation Table. The following table sets forth information
concerning the annual and long-term compensation for services rendered to the
Company for Fiscal 1999 and the year ended December 31, 1998 ("Fiscal 1998"), of
each executive officer of the Company.
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
ANNUAL COMPENSATION(2)
FISCAL ----------------------- ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(3)
- --------------------------- ------ ---------- --------- ---------------
<S> <C> <C> <C> <C>
Michael J. Kittredge.................... 1999 $342,000 $ -- $ 20,526
Chairman of the Board 1998 342,000 -- 21,016
Michael D. Parry........................ 1999 230,000 80,500 20,324
President and Chief 1998 216,539 76,502 9,454,544
Executive Officer
Robert R. Spellman...................... 1999 230,000 80,500 20,497
Senior Vice President of 1998(4) 30,962(5) 11,500(5) 575,173
Finance and Chief
Financial Officer
Gail M. Flood........................... 1999 174,519 61,250 20,150
Senior Vice President of 1998 149,616 58,628 9,454,094
Retail Operations
Stephen T. Williams..................... 1999 174,327 61,250 20,225
Senior Vice President of 1998 139,616 55,000 9,454,275
Wholesale Operations
</TABLE>
- ---------------
(1) The Company does not have any executive officers other than those named in
the summary compensation table. Mr. Kittredge served as the Company's Chief
Executive Officer until November 1998.
(2) In accordance with the rules of the Securities and Exchange Commission,
other compensation in the form of perquisites and other personal benefits
has been omitted because such perquisites and other personal benefits
constituted less than the lesser of $50,000 or 10% of the total of annual
salary and bonus for the executive officer for the fiscal year.
(3) Fiscal 1999 data amounts include a matching contribution of $20,000 under
the Company's Executive Deferred Compensation Plan and premiums paid for
life insurance in the amounts of $526, $324, $497, $225 and $150 for Messrs.
Kittredge, Parry, Spellman and Williams and Ms. Flood, respectively. Amounts
listed for Fiscal 1998 include (i) a matching contribution of $20,000 under
the Company's Executive Deferred Compensation Plan for each of Messrs.
Kittredge,
8
<PAGE> 11
Parry and Williams and Ms. Flood; (ii) a special bonus of $9,433,962 paid in
connection with the 1998 recapitalization for each of Messrs. Parry and
Williams and Ms. Flood; (iii) premiums paid for life insurance in the
amounts of $1,016, $582, $313 and $132 for Messrs. Kittredge, Parry and
Williams and Ms. Flood, respectively; and (iv) premiums of $173 paid for
life insurance, a one-time signing bonus of $500,000 and a one-time payment
of $75,000 paid in connection with a bonus forfeited by Mr. Spellman upon
separation of his prior employment.
(4) Mr. Spellman became an employee of the Company in November 1998.
(5) Information for Fiscal 1998 reflects the portion of Mr. Spellman's annual
base salary and annual bonus that he actually earned in 1998.
Option Grants Table. There were no grants of options to purchase the
Company's Common Stock made to the executive officers during Fiscal 1999.
Aggregated Option Exercises and Fiscal Year-End Option Value Table. None
of the executive officers own options to purchase the Company's Common Stock.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
On October 22, 1998, the Company entered into an employment agreement with
Mr. Spellman. The agreement provides that Mr. Spellman shall (i) serve as Senior
Vice President and Chief Financial Officer, (ii) receive a base salary of
$230,000 per year, (iii) be eligible to receive a target bonus equal to 35% of
base salary under the executive bonus plan, (iv) have the right to purchase
544,614 shares of common stock, and (iv) receive a one-time signing bonus of
$500,000, which he must repay if he leaves voluntarily or is terminated for
cause prior to May 9, 2000.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As a result of an award in October 1998 to purchase stock, Mr. Spellman on
February 3, 1999, invested approximately $1.0 million in Yankee Candle Holdings
by purchasing 544,614 shares of Yankee Candle Holdings common stock. The Company
lent Mr. Spellman $750,000 to help finance his investment. The loan to Mr.
Spellman carried an interest rate of 7%. Mr. Spellman paid the loan (including
accrued interest) in full in July 1999.
BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Compensation Committee of the Board of Directors (the "Committee"). The
Committee was established in 1999 in connection with the Company's transition
from a privately-held company to a company with publicly traded common stock.
The Committee is composed of three (3) non-employee directors: Theodore J.
Forstmann, Nicholas C. Forstmann and Sandra J. Horbach.
9
<PAGE> 12
The Committee is responsible for developing, implementing and administering
the Company's compensation policies. These responsibilities include, among other
things, determination of the cash compensation paid to the Company's executive
officers, the establishment and administration of the Company's bonus programs
and the granting of stock options or awards pursuant to the Company's employee
benefit plans. All decisions of the Committee relating to the compensation of
executive officers are reviewed by the Board of Directors. The Committee did not
formally meet in 1999, as its duties and responsibilities with respect to Fiscal
1999 were discharged by the Board of Directors. Neither Michael J. Kittredge nor
Michael D. Parry, each of whom is both a member of the Board of Directors and an
executive officer of the Company, participated in any of the Board's
deliberations and determinations relating to his own compensation. Accordingly,
subject to the above limitation regarding the participation of Messrs. Kittredge
and Parry, all references contained in this Report on Executive Compensation to
determinations and policy decisions made on behalf of the Company are intended
to refer, with respect to 1999, to determinations and decisions made by the full
Board of Directors. The Committee has met once to date in 2000 and recommended
to the Board of Directors for its approval, which was subsequently granted, the
executive officer compensation amounts for 2000.
The objectives of the Company's compensation policies, and the goals of the
Board of Directors and the Committee in administering the same, are (i) to
provide a level of compensation that will allow the Company to attract, retain
and reward talented executives who have the ability to contribute to the success
of the Company, (ii) to link executive compensation to the success of the
Company through the use of bonus payments based in whole or in part upon the
Company's performance (or that of a particular business unit), (iii) to align
the interests of the executives with those of the Company's stockholders through
equity participation, including the use of stock awards or option grants,
thereby providing incentive for, and rewarding, the attainment of objectives
that inure to the benefit of the Company's stockholders, and (iv) to motivate
and reward high levels of performance or achievement. While no stock awards or
option grants were made to executive officers in 1999, each of the Company's
executive officers holds a significant equity interest in the Company. The
Company anticipates that stock awards or option grants may be issued in the
future as part of its executive compensation program.
Base Salary. Determinations as to appropriate base salaries are largely
subjective, and do not depend upon the application of a particular formula or
the use of designated benchmarks. In establishing base salaries for the
Company's executive officers in 1999, the Board of Directors considered numerous
factors, including its subjective assessment of the executive's performance, the
nature of the executive's responsibilities, the executive's contributions and
importance to the Company, the executive's historical compensation and the
nature and extent of the executive's other forms of compensation. The Company
anticipates that future determinations of base salary made by the Committee will
be based upon similar factors. To the extent it deems it appropriate, the
Committee may also consider the salaries of executives at other companies whose
business and/or financial situation is similar to that of the Company, together
with competitive conditions and the general economic conditions within the area
and within the industry. The annual base salary of the
10
<PAGE> 13
Company's Chief Executive Officer, having been last adjusted by the Board of
Directors in November of 1998, remained unchanged in 1999.
Bonuses. The Company has adopted a Key Management Incentive Plan (the
"Bonus Plan") to reward certain members of management and other key individuals
for their contributions to the Company's success and for the attainment of
personal and/or team goals. Under the terms of the Bonus Plan, each participant
is eligible to receive a target bonus amount equal to a specified percentage of
the participant's base salary. Payment of bonus awards under the Bonus Plan is
conditioned upon the achievement by the Company of pre-approved annual operating
and financial objectives and/or the attainment by the participant of certain
pre-approved individual or team objectives (in 1999, all bonus awards were tied
to the achievement of the Company's operating and financial objectives and not
to individual goals). The Bonus Plan also provides, under certain circumstances,
for the payment of increased or reduced awards (i.e., above or below the
established target amount) in the event the applicable objectives are surpassed
or substantially (at least 90%) attained, respectively. The Company believes
that bonus awards tied to the achievement of pre-approved Company and/or
individual objectives provide its executives and management personnel with
additional incentive for superior performance and also align the interests of
such personnel with those of the Company's stockholders. The provisions of the
Bonus Plan, including the establishment of the applicable annual performance
objectives, were with respect to 1999 reviewed and approved by the Board of
Directors, and will hereafter be reviewed and approved by the Committee each
year. The Company achieved its operating and financial goals in 1999 and
eligible recipients, including the Company's Chief Executive Officer, received
their target bonus awards. The target bonus established for the Chief Executive
Officer in 1999 was an amount equal to thirty-five (35%) percent of the base
salary paid during said year. This bonus structure was unchanged from 1998.
Stock Options and Awards. The Company believes that stock options and
awards provide an incentive for its executives to maximize stockholder value
and, because the option grants typically vest over a period of several years,
serve as an important means of retaining key personnel. In addition, stock
option grants only serve to compensate the recipients to the extent that the
Company's stockholders also benefit. Pursuant to the Company's Stock Option and
Award Plan adopted by the Board of Directors in 1999, the Committee has the
authority to grant stock options and awards as part of the compensation of key
executives and management personnel and to determine the terms and conditions of
such grants, including without limitation the vesting period and the exercise
price of any option grants. The decision to grant stock options and awards is
made subjectively by the Committee based largely upon many of the same factors
considered in determining base salary. The Committee also considers factors such
as the number of outstanding shares of the Company's common stock, the number of
shares reserved for issuance under the Company's option plan, recommendations of
the Company's executive officers with respect to non-executive officer
associates and the Company's hiring and retention needs. No stock option grants
or awards were made by the Company to its executive officers in 1999, although
as noted above each such executive officer holds a significant equity interest
in the Company. The Company anticipates that stock awards or option grants may
be issued in the future as part of its executive compensation program.
11
<PAGE> 14
Section 162(m). Section 162(m) of the Internal Revenue Code of 1986, as
amended, provides that compensation in excess of $1,000,000 paid to the chief
executive officer or to any of the other four most highly compensated executive
officers of a company will not be deductible for federal income tax purposes
unless such compensation is paid pursuant to one of the enumerated exceptions
set forth in Section 162(m). The Company's primary objective in designing and
administering its compensation policies is to support and encourage the
achievement of the Company's long term strategic goals and to enhance
stockholder value. When consistent with this compensation philosophy, the
Company also intends to attempt to structure its compensation programs such that
compensation paid thereunder will be tax deductible by the Company. In general,
stock options granted under the Company's Stock Option and Award Plan will be
intended to qualify under and comply with the "performance based compensation"
exemption provided under Section 162(m), thus excluding from the Section 162(m)
compensation limitation any income recognized by executives pursuant to such
stock options. The Committee intends to review periodically the potential
impacts of Section 162(m) in structuring and administering the Company's
compensation programs.
BOARD OF DIRECTORS
<TABLE>
<S> <C>
Theodore J. Forstmann Michael S. Ovitz
Nicholas C. Forstmann Ronald L. Sargent
Sandra J. Horbach Emily Woods
Michael J. Kittredge Steven B. Klinsky
Michael D. Parry
</TABLE>
12
<PAGE> 15
COMPARATIVE STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on the
Company's common stock between July 1, 1999 (the initial public offering date)
and December 31, 1999 with the cumulative total return of (i) Standard & Poor's
500 Composite Index and (ii) the Russell 2000 Index. The graph assumes the
investment of $100.00 on July 1, 1999 in the Company's common stock, the
Standard & Poor's 500 Composite Index and the Russell 2000 Index, and assumes
dividends are reinvested.
<TABLE>
<CAPTION>
THE YANKEE CANDLE
COMPANY, INC. S&P 500 RUSSELL 2000
----------------- ------- ------------
<S> <C> <C> <C>
7/1/99 100.00 100.00 100.00
12/31/99 90.63 107.71 93.59
</TABLE>
13
<PAGE> 16
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
Deloitte & Touche LLP has served as the Company's independent accountants
since May 1998. The Board of Directors has selected Deloitte & Touche LLP as the
Company's independent accountants for the Fiscal Year 2000. If the stockholders
do not ratify the selection of Deloitte & Touche LLP, the Board of Directors
will reconsider the matter.
On May 4, 1998, the Board of Directors dismissed Ernst & Young LLP, who
audited the Company's 1997 financial statements, and appointed Deloitte & Touche
LLP.
There were no disagreements between Ernst & Young LLP and the Company's
management at the decision-making level during the period of their engagement,
which disagreements, if not resolved to the satisfaction of Ernst & Young, LLP,
would have caused them to make reference to the subject matter of the
disagreements in connection with their reports. In addition, there were no
reportable events during the engagement period of Ernst & Young LLP.
Prior to their appointment, neither the Company nor anyone on the Company's
behalf consulted Deloitte & Touche LLP regarding the application of accounting
principles to a specified transaction or the type of audit opinion that might be
rendered on the Company's financial statements, and Deloitte & Touche LLP did
not provide a written or oral report or advice that the Company's management
concluded was an important factor considered by the Company in reaching a
decision on the issue.
Representatives of Deloitte & Touche LLP are expected to be present at the
Annual Meeting. They will have an opportunity to make a statement if they desire
to do so, and will also be available to respond to appropriate questions from
stockholders.
OTHER MATTERS
The Board of Directors does not know of any other matters which may come
before the Annual Meeting. However, if any other matters are properly presented
to the Annual Meeting, it is the intention of the persons named in the
accompanying proxy to vote, to the extent permitted by SEC proxy rules, or
otherwise act, in accordance with their judgment on such matters.
SOLICITATION OF PROXIES
The cost of solicitation of proxies will be borne by the Company. In
addition to the solicitation of proxies by mail, officers and employees of the
Company may solicit proxies in person or by telephone. The Company may reimburse
brokers or persons holding stock in their names, or in the names of their
nominees, for their expenses in sending proxies and proxy material to beneficial
owners.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and holders of more than 10% of the Common Stock
to file with the SEC initial
14
<PAGE> 17
reports of ownership of the Company's Common Stock and other equity securities
on a Form 3 and reports of changes in such ownership on a Form 4 or Form 5.
Officers, directors and 10% stockholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the Company's
records and written representations by the persons required to file such
reports, except as set forth in the following sentence, the filing requirements
of Section 16(a) were satisfied on a timely basis with respect to the Company's
most recent fiscal year. Amended reports were filed on behalf of Messrs. Ovitz
and Sargent, on Forms 3 and 4 respectively, in each instance in order to provide
information as to additional beneficial ownership of the Company's common stock
that was inadvertently omitted from a prior filing.
STOCKHOLDER PROPOSALS
Proposals of stockholders submitted pursuant to Rule 14a-8 under the
Securities Exchange Act of 1934 (the "Exchange Act") to be presented at the
Annual Meeting of Stockholders for the Fiscal Year 2000 must be received by the
Company at its principal executive offices no later than January 1, 2001 in
order to be considered for inclusion in the Company's proxy materials for the
meeting.
The Company's by-laws require that the Company be given advance written
notice of stockholder nominations for election to the Company's Board of
Directors and of other matters which stockholders wish to present for action at
an annual meeting of stockholders (other than matters included in the Company's
proxy materials in accordance with Rule 14a-8 under the Exchange Act).
Stockholder nominations for election to the Company's Board of Directors
must be received by the Company's Clerk not less than 45 days nor more 60 days
prior to the anniversary of the date on which the Company first mailed its proxy
materials for the prior year's annual meeting of stockholders; provided,
however, that if the date of such annual meeting is more than 30 days before or
after the anniversary of the prior year's annual meeting, such nomination must
be mailed or delivered to the Clerk not later than the close of business on the
later of (i) the date 60 days prior to the date of such meeting or (ii) the 10th
day following the date on which the notice of the meeting was mailed or public
disclosure was made, whichever occurs first.
For all other matters, the stockholder notice must be received at the
Company's principal executive offices not less than 45 days nor more 60 days
prior to the anniversary of the date on which the Company first mailed its proxy
materials for the prior year's annual meeting of stockholders; provided,
however, that if the date of such annual meeting is more than 30 days before or
after the anniversary of the prior year's annual meeting, such stockholder's
notice must be mailed or delivered to the Clerk not later than the close of
business on the later of (i) the date 60 days prior to the date of such meeting
or (ii) the 10th day following the date on which the notice of the meeting was
mailed or public disclosure was made, whichever occurs first.
15
<PAGE> 18
The Company's by-laws also specify requirements relating to the content of
such notices which stockholders must provide to the Clerk of the Company for any
matter, including a stockholder nomination for director, to be properly
presented at a stockholder meeting.
By Order of the Board of Directors
ROBERT R. SPELLMAN
Clerk
Whately, Massachusetts
April 28, 2000
THE BOARD OF DIRECTORS HOPES THAT STOCKHOLDERS WILL ATTEND THE ANNUAL MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN, AND
RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. A PROMPT RESPONSE WILL
GREATLY FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION WILL BE
APPRECIATED. STOCKHOLDERS WHO ATTEND THE MEETING MAY VOTE THEIR STOCK PERSONALLY
EVEN THOUGH THEY HAVE SENT IN THEIR PROXIES.
16
<PAGE> 19
DETACH HERE
PROXY
THE YANKEE CANDLE COMPANY, INC.
ANNUAL MEETING OF STOCKHOLDERS - JUNE 1, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned, having received notice of the Annual Meeting and management's
Proxy Statement therefor, and revoking all prior proxies, hereby appoint(s)
Michael D. Parry, Robert R. Spellman and James A. Perley, and each of them
(with full power of substitution), as proxies of the undersigned to attend the
Annual Meeting of Stockholders of The Yankee Candle Company, Inc. (the
"Company") to be held on Thursday, June 1, 2000 and any adjourned sessions
thereof, and there to vote and act upon the following matters in respect of all
shares of Common Stock of the Company which the undersigned would be entitled
to vote or act upon, with all powers the undersigned would possess if
personally present.
Attendance of the undersigned at the meeting or at any adjourned session thereof
will not be deemed to revoke this proxy unless the undersigned shall
affirmatively indicate at such meeting or adjourned session the intention of the
undersigned to vote said shares in person. If the undersigned hold(s) any of the
shares of the Company in a fiduciary, custodial or joint capacity or capacities,
this proxy is signed by the undersigned in every such capacity as well as
individually.
SEE REVERSE SIDE SEE REVERSE SIDE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE> 20
DETACH HERE
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
UNDERSIGNED. IF NO DIRECTION IS GIVEN WITH RESPECT TO ANY ELECTION TO OFFICE
OR PROPOSAL SPECIFIED BELOW, THIS PROXY WILL BE VOTED FOR SUCH ELECTION TO
OFFICE OR PROPOSAL.
1. To elect the following individuals as Class I Directors:
NOMINEES: (01) Theodore J. Forstmann, (2) Michael S. Ovitz,
(03) Jamie C. Nicholls
FOR ALL NOMINEES WITHHELD FROM ALL NOMINEES
[ ] [ ]
[ ] ______________________________________
For all nominees except as noted above
2. To ratify the selection of Deloitte & Touche LLP as the Company's independent
auditors for the current fiscal year.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
In their discretion, the named Proxies are authorized to vote upon such other
matters as may properly come before the meeting, or any adjournment thereof.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Please sign name(s) exactly as appearing hereon. When signing as attorney,
executor, administrator or other fiduciary, please give your full title as
such. Joint owners should each sign personally. If a corporation, sign in full
corporate name, by authorized officer. If a partnership, please sign
in partnership name, by authorized person.
Signature: ______________ Date: ________ Signature: ______________ Date: _______
