BLYTH INDUSTRIES INC, 10-Q, 1996-09-12

BLYTH INDUSTRIES INC
10-Q, 1996-09-12
MISCELLANEOUS MANUFACTURING INDUSTRIES

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTER ENDED JULY 31, 1996

Commission file number 1-13026

BLYTH INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 36-2984916
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)

100 FIELD POINT ROAD, GREENWICH, CONNECTICUT 06830
(Address of principal executive offices) (Zip Code)

(203) 661-1926
(Registrant's telephone number, including area code)

NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last
report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----------- -----------

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.

30,741,927 COMMON SHARES AS OF AUGUST 30, 1996.

PAGE 1 OF 15

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BLYTH INDUSTRIES, INC.

INDEX

PAGE
----

Form 10-Q Cover Page . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Form 10-Q Index . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Part I. Financial Information:

Item 1. Financial Statements:
Consolidated Balance Sheets. . . . . . . . . . . . . . 3

Consolidated Statements of Earnings. . . . . . . . . . 4,5

Consolidated Statements of Stockholders' Equity. . . . 6

Consolidated Statements of Cash Flows. . . . . . . . . 7

Notes to Consolidated Financial Statements . . . . . . 8

Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . .9-12

Part II. Other Information

Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . 13

Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . 13

Item 3. Defaults upon Senior Securities . . . . . . . . . . . . . . 13

Item 4. Submission of Matters to a Vote of Security Holders . . . . 13

Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . 13

Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . .13,14

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

PAGE 2 OF 15

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Part I. FINANCIAL INFORMATION
Item I. FINANCIAL STATEMENTS

BLYTH INDUSTRIES, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
JULY 31, JANUARY 31,
(In thousands, except share data) 1996 1996
- ----------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 16,084 $ 46,509
Accounts receivable, less allowance for doubtful receivables
of $695 and $570, respectively 28,846 24,889
Inventories (Note 3) 102,951 73,176
Prepaid expenses 204 288
Deferred income taxes 600 600
- --------------------------------------------------------------------------------------------
Total current assets 148,685 145,462

PROPERTY, PLANT AND EQUIPMENT
Less accumulated depreciation ($24,627 and $21,030 respectively) 71,045 58,159

OTHER ASSETS
Investments 6,605 6,586
Excess of cost over fair value of assets acquired, net of
accumulated amortization of $635 and $207 respectively 10,893 3,925
Deposits 512 590
- --------------------------------------------------------------------------------------------
$ 237,740 $ 214,722
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 526 $ 514
Accounts payable 23,969 18,856
Accrued expenses 22,160 18,961
Income taxes 579 93
- --------------------------------------------------------------------------------------------
Total current liabilities 47,234 38,424
DEFERRED INCOME TAXES 3,500 3,000
LONG-TERM DEBT, less current maturities 27,232 27,504
EXCESS OF FAIR VALUE OVER COST OF ASSETS ACQUIRED, net of
accumulated amortization of $511 and $451 respectively 893 953
MINORITY INTEREST 1,221 1,487
STOCKHOLDERS' EQUITY:
Preferred stock, authorized 10,000,000 shares of $0.01
par value; no shares issued and outstanding - -
Common stock, authorized 100,000,000 shares of $0.02
par value; issued and outstanding, 30,741,927 and
30,707,220, respectively 615 614
Additional contributed capital 87,150 86,701
Retained earnings 69,895 56,039
- --------------------------------------------------------------------------------------------
157,660 143,354
- --------------------------------------------------------------------------------------------
$ 237,740 $ 214,722
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PAGE 3 OF 15

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BLYTH INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
SIX MONTHS ENDED JULY 31 (In thousands, except per share data)

1996 1995
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Net sales $ 206,828 $ 135,896
Cost of goods sold 92,669 66,276
- ---------------------------------------------------------------------------------------
Gross profit 114,159 69,620
Selling and Shipping 70,528 44,975
Administrative 20,107 11,686
- ---------------------------------------------------------------------------------------
90,635 56,661
- ---------------------------------------------------------------------------------------
Operating profit 23,524 12,959
Other expense (income)
Interest expense 1,063 394
Interest income (698) (154)
Equity in earnings of investees (107) (90)
- ---------------------------------------------------------------------------------------
258 150
- ---------------------------------------------------------------------------------------
Earnings before income tax expense and minority interest 23,266 12,809
Income tax expense 9,380 5,059
- ---------------------------------------------------------------------------------------
Earnings before minority interest 13,886 7,750
Minority interest 30 35
- ---------------------------------------------------------------------------------------
NET EARNINGS $ 13,856 $ 7,715
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
Net earnings per common and common
equivalent share $ 0.45 $ 0.27
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
Weighted average number of shares outstanding 31,048 28,394
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PAGE 4 OF 15

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BLYTH INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
THREE MONTHS ENDED JULY 31 (In thousands, except per share data)

1996 1995
- ------------------------------------------------------------------------------------
<S> <C> <C>
Net sales $ 100,490 $ 66,994
Cost of goods sold 44,806 33,539
- ------------------------------------------------------------------------------------
Gross profit 55,684 33,455
Selling and Shipping 34,198 21,380
Administrative 10,154 5,799
- ------------------------------------------------------------------------------------
44,352 27,179
- ------------------------------------------------------------------------------------
Operating profit 11,332 6,276
Other expense (income)
Interest expense 529 329
Interest income (290) (41)
Equity in earnings of investees (26) (23)
- ------------------------------------------------------------------------------------
213 265
- ------------------------------------------------------------------------------------
Earnings before income tax expense and minority interest 11,119 6,011
Income tax expense 4,483 2,367
- ------------------------------------------------------------------------------------
Earnings before minority interest 6,636 3,644
Minority interest 28 35
- ------------------------------------------------------------------------------------
NET EARNINGS $ 6,608 $ 3,609
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Net earnings per common and common
equivalent share $ 0.21 $ 0.13
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Weighted average number of shares outstanding 31,072 28,468
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PAGE 5 OF 15

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BLYTH INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
JULY 31, (In thousands, except share data)
ADDITIONAL TOTAL
COMMON STOCK CONTRIBUTED RETAINED STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS EQUITY
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED JULY 31, 1995:

Balance, February 1, 1995 28,191,412 $ 282 $ 31,218 $ 32,322 $ 63,822

Net earnings for the period - - - 7,715 7,715

Common stock issued in connection with
investment in European candle manufacturer 99,808 1 1,405 - 1,406

Common stock issued in connection with
exercise of stock options 11,200 - 92 - 92
---------------------------------------------------------
Balance, July 31, 1995 28,302,420 $ 283 $ 32,715 $ 40,037 $ 73,035
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------

FOR THE SIX MONTHS ENDED JULY 31, 1996:

Balance, February 1, 1996 30,707,220 $ 614 $ 86,701 $ 56,039 $ 143,354

Net earnings for the period - - - 13,856 13,856

Common stock issued in connection with
exercise of stock options and other 34,707 1 449 - 450
---------------------------------------------------------
Balance, July 31, 1996 30,741,927 $ 615 $ 87,150 $ 69,895 $ 157,660
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PAGE 6 OF 15

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BLYTH INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------

SIX MONTHS ENDED JULY 31 (In thousands) 1996 1995
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 13,856 $ 7,715
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation and amortization 4,112 2,264
Deferred income taxes 500 200
Equity in earnings of investees (107) (90)
Minority interest 30 35
Changes in operating assets and liabilities, net of
effect of business acquisition:
Accounts receivable (3,957) (162)
Inventories (29,774) (22,916)
Prepaid expenses 83 (31)
Other assets 78 (278)
Accounts payable 5,100 3,822
Accrued expenses 3,199 1,665
Income taxes 486 (293)
- --------------------------------------------------------------------------------------------
Total adjustments (20,250) (15,784)
- --------------------------------------------------------------------------------------------
Net cash used in operating activities (6,394) (8,069)
Cash flows from investing activities:
Purchases of property, plant, and equipment (15,233) (11,341)
Investments in investees - (2,898)
Purchase of businesses net of cash acquired (8,893) (7,116)
- --------------------------------------------------------------------------------------------
Net cash used in investing activities (24,126) (21,355)
- --------------------------------------------------------------------------------------------
Cash flows from financing activities:
Proceeds from issuance of common stock 351 92
Borrowings from bank line of credit 4,600 13,160
Repayments on bank line of credit (4,600) (13,160)
Proceeds from issuance of long-term debt - 25,000
Payments on long-term debt (256) (215)
- --------------------------------------------------------------------------------------------
Net cash provided by financing activities 95 24,877
- --------------------------------------------------------------------------------------------
Net decrease in cash (30,425) (4,547)
Cash and cash equivalents at beginning of period 46,509 9,081
- --------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 16,084 $ 4,534
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PAGE 7 OF 15

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BLYTH INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. BASIS OF PRESENTATION

The consolidated financial statements include the accounts of the Company,
its wholly owned subsidiaries and their subsidiaries. All significant
inter-company accounts and transactions have been eliminated. In the
opinion of the Management, the accompanying unaudited consolidated
financial statements include all accruals (consisting only of normal
recurring accruals) necessary for fair presentation of the Company's
consolidated financial position at July 31, 1996 and the consolidated
results of its operations and cash flows for the three and six month
periods ended July 31, 1996 and 1995. In December 1995, the Company
effected a two-for-one stock split in the form of a stock dividend. All
share quantities, per share amounts and options data have been
retroactively restated to reflect the stock split. These interim
statements should be read in conjunction with the Company's consolidated
financial statements for the year ended January 31, 1996, as set forth in
the Company's Form 10-K Annual Report. Operating results for the six
months ended July 31, 1996 are not necessarily indicative of the results
that may be expected for the year ending January 31, 1997.

2. BUSINESS ACQUISITIONS

On February 13, 1996, the Company purchased from Hallmark Cards,
Incorporated the Canterbury candle product line and related candle
manufacturing equipment for approximately $8,400,000. Under the terms of
the purchase agreement, the Company will work jointly with Hallmark as a
preferred vendor in the merchandising and distribution of the Company's
candles and candle accessories through various outlets which carry Hallmark
candles. While the Company began shipping Colonial Candle of Cape Cod and
Mrs. Baker brands to Hallmark Gold Crown stores in July 1996, these
shipments had no material impact on second quarter results.

3. INVENTORIES

The components of inventory consist of the following (in thousands):

July 31, 1996 January 31, 1996
------------------------------------
FINISHED GOODS $88,258 $60,940
WORK IN PROGRESS 1,939 1,803
RAW MATERIALS 12,754 10,433
----------------------------------
$102,951 $73,176

PAGE 8 OF 15

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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS:

Net Sales

Net sales increased $70.9 million, or 52.2%, from $135.9 million in the
first six months of fiscal 1996 to $206.8 million in the first six months
of fiscal 1997. Net sales increased $33.5 million, or 50.0%, from $67.0
million in the quarter ended July 31, 1995 to $100.5 million in the quarter
ended July 31, 1996. Virtually all of these increases were attributable to
unit growth in sales of the Company's consumer everyday products,
particularly scented candles and accessories, and seasonal outdoor
products. In particular, three product areas were among those which
experienced the highest growth rate for the six months ended July 31, 1996:
Ambria, our new brand of coordinated home fragrance and decorative lighting
products; PartyLite Gifts, our party plan direct seller in the United
States; and International, particularly Europe and Canada. Several factors
contributed to the increase in unit sales. Sales to new customers
continued to represent at least 50% of the net sales increase. The
increase in sales to new domestic customers was attributable to improved
penetration of existing channels of distribution and to geographic
expansion in the United States, particularly by the Company's direct
selling activities. In addition, the Company was able to increase sales to
existing customers, particularly mass merchandisers and specialty chains.
International sales, including sales in Canada, grew at a faster rate than
the Company as a whole, and accounted for approximately 18% of the net
sales increase. International sales accounted for approximately 12% of
total net sales for the six months ended July 31, 1996.

Sales of scented candles, which are typically higher gross profit margin
products, also continued to grow at a substantially faster rate than
unscented products. Consumable products (which consist of candles,
citronella candles and potpourri) accounted for approximately 70% of the
Company's net sales for the six months ended July 31, 1996. Candle
accessories continued to account for the balance of net sales.

Gross Profit

Gross profit increased $44.6 million, or 64.0%, from $69.6 million in the
first six months of fiscal 1996 to $114.2 million in the first six months
of fiscal 1997. Gross profit margin increased from 51.2% for the first six
months of fiscal 1996 to 55.2% for the first six months of fiscal 1997.
Gross profit increased $22.2 million, or 66.3%. from $33.5 million in the
quarter ended July 31, 1995 to $55.7 million in the quarter ended July 31,
1996. Gross profit margin increased from 49.9% for the quarter ended July
31, 1995 to 55.4% for the quarter ended July 31, 1996. Such increases were
due, in substantial part, to the continued increased sales of the Company's
products to the consumer market, which products generally carry higher
gross profit margins than other of the Company's products, as well as to a
continued shift in the mix of the Company's products for the consumer
market to a greater percentage of higher gross profit margin products, such
as scented candles and candle accessories. As in fiscal 1996,
manufacturing efficiencies due to higher unit volume and process technology
improvements continued to have a favorable impact on gross profit margins.

Selling and Shipping Expense

Selling and shipping expense increased $25.5 million, or 56.7%, from $45.0
million in the first six months of fiscal 1996 (33.1% of net sales), to
$70.5 million in the first six months of fiscal 1997 (34.1% of net sales).
Selling and shipping expense increased $12.8 million, or 59.8%, from $21.4
million in the quarter ended July 31, 1995 (31.9% of net sales), to $34.2
million in the quarter ended July 31, 1996 (34.0% of net sales). The
increases were primarily attributable to increased sales through the
Company's consumer market, particularly sales through the Company's home
party plan direct selling activities, in which sales expenses, as a
percentage of sales, are relatively higher. In addition, the Company's
consumer products generally require a higher level of product development
and sales and marketing expense than the Company's food service and
religious products.

PAGE 9 OF 15

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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Administrative Expense

Administrative expense increased $8.4 million, or 71.8%, from $11.7 million
in the first six months of fiscal 1996 (8.6% of net sales) to $20.1 million
in the first six months of fiscal 1997 (9.7% of net sales). Administrative
expense increased $4.4 million, or 75.9%, from $5.8 million in the quarter
ended July 31, 1995 (8.7% of net sales) to $10.2 million in the quarter
ended July 31, 1996 (10.1% of net sales). Such increases were a result of
increases in personnel (from approximately 206 administrative employees at
July 31, 1995 to approximately 347 administrative employees at July 31,
1996), substantially improved information and data processing capabilities,
increases in leased and owned office space and increased research and
development costs. In connection with anticipated growth in its consumer
product sales, which generally require somewhat greater administrative
expenditures, the Company expects further increases in administrative
expenses due to expected increases in the number of employees. The Company
also expects additional infrastructure spending associated with
improvements in information and administrative support systems.

Interest Expense

Interest expense increased $0.7 million, or 175.0%, from $0.4 million in
the first six months of fiscal 1996 to $1.1 million in the first six months
of fiscal 1997. Interest expense increased $0.2 million, or 66.7%, from
$0.3 million in the quarter ended July 31, 1995 to $0.5 in the quarter
ended July 31, 1996. Interest expense was higher due to the issuance by
certain of the Company's subsidiaries of $25.0 million aggregate principal
amount of senior notes which were issued July 7, 1995 and therefore did not
result in substantial interest expense in the first six months of fiscal
1996.

Income Tax Expense

Income tax expense increased $4.3 million, or 84.3%, from $5.1 million in
the first six months of fiscal 1996 to $9.4 million in the first six months
of fiscal 1997. Income tax expense increased $2.1 million, or 87.5%, from
$2.4 million in the quarter ended July 31, 1995 to $4.5 million in the
quarter ended July 31, 1996. The effective income tax rate was
approximately 40.0% for the first six months of fiscal 1997 and fiscal
1996.

Net Earnings

As a result of the foregoing, net earnings increased $6.2 million, or
80.5%, from $7.7 million in the first six months of fiscal 1996 to $13.9
million in the first six months of fiscal 1997. Net earnings increased
$3.0 million, or 83.3%, from $3.6 million in the quarter ended July 31,
1995 to $6.6 million in the quarter ended July 31, 1996.

Earnings per share based upon the weighted average number of shares
outstanding for the six months ended July 31, 1996 were $0.45 compared to
$0.27 for the same period last year. Earnings per share for the quarter
ended July 31, 1996 were $0.21 compared to $0.13 for the quarter ended July
31, 1995. Earnings per share have been restated for a 2 for 1 stock split
effected as a stock dividend in December 1995.

PAGE 10 OF 15

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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources

Operating assets and liabilities increased from January 31, 1996 to July
31, 1996 due to the Company's internally generated growth. To meet
increases in current and anticipated demand during the first six months of
fiscal 1997, the Company increased its inventory at a greater rate than in
the past. Inventory increased from $73.2 million at January 31, 1996 to
$103.0 million at July 31, 1996. Measured in terms of number of days'
worth of cost of goods sold, inventory increased from 169 days worth of
inventory at the end of fiscal 1996 to 200 days' worth of inventory at July
31, 1996. This increase was primarily due to the build up of inventory for
the rollout of Colonial Candle of Cape Cod and Mrs. Baker brand candles to
Hallmark stores and the introduction of our new Ambria brand. After giving
effect to this recent increase, the Company expects to manage its inventory
in the ordinary course to meet increased demand and to improve customer
service. Accounts receivable increased $3.9 million, or 15.7%, from $24.9
million at the end of fiscal 1996 to $28.8 million at July 31, 1996 due to
sales growth. Accounts payable and accrued expenses increased $8.3
million, or 22.0%, from $37.8 million at the end of fiscal 1996 to $46.1
million at July 31, 1996. The increase in accounts payable and accrued
expenses is attributable to the increases in operating assets and the
Company's overall growth.

Capital expenditures for property, plant and equipment were $15.2 million
in the first six months of fiscal 1997. Capital expenditures were
primarily investments in new plant and equipment and improvements to
existing plant and equipment. The Company anticipates total capital
spending of approximately $50.0 million for fiscal 1997, of which
approximately $18.0 million will be used for a new distribution facility in
Elkin, North Carolina, approximately $25.0 million will be used for
machinery and equipment, including machinery and equipment for the new
facilities and upgrades to machinery and equipment in existing facilities,
and approximately $7.0 million will be used for information systems and
office expansion. In fiscal 1998, the Company expects that it will be
required to make further substantial capital expenditures for increased
manufacturing and distribution capacity.

The Company has grown in part through acquisitions and, as part of its
growth strategy, the Company expects to continue from time to time in the
ordinary course of its business to evaluate and pursue opportunities to
acquire other companies, assets and product lines that either complement or
expand its existing business. The Company expects to effect one or more
such acquisitions in the next twelve months, although the Company currently
has no arrangements, agreements or understandings with respect to any such
acquisitions. In the first six months of fiscal 1997, the Company expended
an aggregate of $8.9 million in connection with the purchase of the
Canterbury Candle product line and related candle manufacturing equipment
from Hallmark Cards, Incorporated and the slight increase of its ownership
of the capital stock of Jeanmarie Creations, Inc.

The Company's primary capital requirements are for working capital to fund
the increased inventory and accounts receivable to sustain the Company's
sales growth and for capital expenditures (including capital expenditures
related to planned facilities expansion). The Company is building its
inventory to meet increased demand. The Company believes that cash on
hand, cash from operations and available borrowings under the Credit
Facility described below, will be sufficient to fund its operating
requirements, capital expenditures and all other obligations for the next
twelve months. However, the Company anticipates that it will finance up to
$20.0 million for the construction and equipment for the new Elkin, North
Carolina distribution facility in the form of a term loan.

PAGE 11 OF 15

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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources (continued)

In July 1996, the Company extended and improved the terms of it's credit
facility (the "Credit Facility") with Harris Trust and Savings Bank
("Harris") and the Bank of America Illinois (together with Harris, the
"Banks") through July 21, 1998. Pursuant to the Credit Facility the Banks
have agreed, subject to certain conditions, to provide an unsecured
revolving credit facility to the Company in an aggregate amount of up to
$21.0 million to fund ongoing working capital requirements, letter of
credit requirements and general corporate purposes of the Company. Amounts
which may be outstanding under the Credit Facility bear interest, at the
Company's option, at Harris' prime rate (8.25% at July 31, 1996) or at
LIBOR plus 0.40%. In connection with the Credit Facility, the Company pays
a commitment fee of 0.125% per annum on the unused portion of the revolving
credit facility. The Credit Facility contains standard covenants,
including maintenance of certain financial ratios and limitations on
certain restricted payments, including dividends. The Company does not
believe that such covenants will have a material adverse effect on its
operations.

Net cash used in operating activities amounted to $6.4 million in the first
six months of fiscal 1997 compared to $8.1 million in the first six months
of fiscal 1996. At July 31, 1996, no indebtedness was outstanding under
the Credit Facility and approximately $3.1 million face amount of letters
of credit were outstanding under the Credit Facility as of July 31, 1996.

PAGE 12 OF 15

<PAGE>

Part II. OTHER INFORMATION

Item 1. Legal Proceedings
None

Item 2. Changes in Securities
None

Item 3. Defaults upon Senior Securities
None

Item 4. Submission of Matters to a Vote of Security Holders

The following matters were voted upon at the Annual Meeting of
Stockholders held on June 6, 1996, and received the votes set forth
below:

1. Each of the following persons nominated was elected to serve as
director and received the number of votes set opposite his name:

For Against Withheld
-------------------------------------
John W. Burkhart 29,379,957 0 8,137
John E. Preschlack 29,379,960 0 8,134
Frederick H. Stephens, Jr. 29,379,957 0 8,137

2. A proposal to ratify the appointment of Grant Thornton LLP as
independent certified public accountants received 29,382,173
votes for, 406 votes against, and 5,515 votes withheld.

Item 5. Other Information
None

Item 6. Exhibits and Reports on Form 8-K
a) Exhibits

4.1 Amended and Restated 1994 Employee Stock Option Plan of
the Company.

4.2 Form of Nontransferable Incentive Stock Option
Agreement under the Amended and Restated 1994
Employee Stock Option Plan of the Company.

4.3 Form of Nontransferable Non-Qualified Stock Option
Agreement under the Amended and Restated 1994
Employee Stock Option Plan of the Company.

4.4 Form of Stock Option Agreement under the 1994 Stock
Option Plan for Non-Employee Directors of the Company.

PAGE 13 OF 15

<PAGE>

Part II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K (continued)

10.1 Fourth Amendment, dated as of July 18, 1996, to the Amended
and Restated Credit Agreement dated January 31, 1994, as
amended, between Candle Corporation Worldwide, Inc. and
Harris Trust and Savings Bank, individually and as agent,
and the Bank of America Illinois.

11. Statement regarding computation of per share earnings.

27.1 Financial data schedule as of and for the period ended July
31, 1996.

27.2 Amended financial data schedule as of and for the period
ended April 30, 1996.

b) Reports on Form 8-K

There were no reports on Form 8-K filed by the Company
during the fiscal quarter ended July 31, 1996.

PAGE 14 OF 15

<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.

BLYTH INDUSTRIES, INC.

Date: September 12, 1996 By: /s/ Robert B. Goergen
-------------------- ------------------------
Robert B. Goergen
Chief Executive Officer

Date: September 12, 1996 By: /s/ Howard E. Rose
-------------------- ------------------------
Howard E. Rose
Chief Financial Officer

PAGE 15 OF 15

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EXHIBIT INDEX

EXHIBIT DESCRIPTION PAGE NO.
- ------- ----------- --------

4.1 Amended and Restated 1994 Employee Stock Option
Plan of the Company. 18

4.2 Form of Nontransferable Incentive Stock Option Agreement
under the Amended and Restated 1994 Employee Stock
Option Plan of the Company. 32

4.3 Form of Nontransferable Non-Qualified Stock Option
Agreement under the Amended and Restated 1994
Employee Stock Option Plan of the Company. 42

4.4 Form of Stock Option Agreement under the 1994 Stock
Option Plan for Non-Employee Directors of the Company. 51

10.1 Fourth Amendment, dated as of July 18, 1996, to the
Amended and Restated Credit Agreement dated
January 31, 1994, as amended, between Candle
Corporation Worldwide, Inc. and Harris Trust and
Savings Bank, individually and as agent, and the
Bank of America Illinois. 59

11. Statement regarding computations of per share earnings. 65

27.1 Financial data schedule as of and for the period ended
July 31, 1996. 66

27.2 Amended financial data schedule as of and for the period
ended April 30, 1996. 67

<PAGE>

EXHIBIT 4.1

BLYTH INDUSTRIES, INC.

1994 EMPLOYEE STOCK OPTION PLAN

(AMENDED AND RESTATED AS OF SEPTEMBER 5, 1996)

1. PURPOSE OF THE PLAN.

The purpose of the amended and restated BLYTH INDUSTRIES, INC. 1994
EMPLOYEE STOCK OPTION PLAN (the "Plan") is (i) to further the growth and success
of Blyth Industries, Inc., a Delaware corporation (the "Company"), and its
Subsidiaries (as hereinafter defined) by enabling officers and employees of the
Company and any of its Subsidiaries to acquire shares of Common Stock, $.02 par
value (the "Common Stock"), of the Company, thereby increasing their personal
interest in such growth and success, and (ii) to provide a means of rewarding
outstanding performance by such persons to the Company and/or its Subsidiaries.
Options granted under the Plan may be either "incentive stock options" ("ISOs"),
intended to qualify as such under the provisions of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), or non-qualified stock options
("NSOs"). For purposes of the Plan, the terms "Parent" and "Subsidiary" shall
mean "Parent Corporation" and "Subsidiary Corporation", respectively, as such
terms are defined in Sections 424(e) and (f) of the Code. Unless the context
otherwise requires, any ISO or NSO shall hereinafter be referred to as an
"Option".

This amended and restated Plan (a) clarifies the provisions of the
Plan relating to cashless exercise programs, (b) makes certain changes in
connection with certain amendments to Rule 16b-3 (as defined below) and (c)
makes certain other changes, including changes to reflect a two-for-one stock
split effected as a stock dividend in December 1995.

2. ADMINISTRATION OF THE PLAN.

(a) STOCK OPTION COMMITTEE.

So long as the Plan shall be required to comply with Rule 16b-3 ("Rule
16b-3") promulgated by the Securities and Exchange Commission (the "SEC") under
the Securities Exchange Act of 1934, as amended (the "1934 Act"), in order to
permit transactions pursuant to the Plan by officers and employee directors of
the Company to be exempt from the provisions of Section 16(b) of the 1934 Act,
the Plan shall be administered by a committee (the "Committee") consisting of
two or more directors appointed to such Committee from time to time by the Board
of Directors of the Company (the "Board"), and each member of the Committee, at
the effective date of his or her appointment to the Committee, shall be a "non-
employee director" within the meaning of Rule 16b-3. The members of the
Committee may be removed at

<PAGE>

any time either with or without cause by the Board. Any vacancy on the
Committee, whether due to action of the Board or any other cause, shall be
filled by the Board. The term "Committee" shall, for all purposes of the Plan
other than this Section 2, be deemed to refer to the Board if the Board is
administering the Plan.

(b) PROCEDURES.

The Committee shall from time to time select a Chairman from among its
members and shall adopt such rules and regulations as it shall deem appropriate
concerning the holding of meetings and the administration of the Plan. A
majority of the entire Committee shall constitute a quorum and the actions of a
majority of the members of the Committee present at a meeting at which a quorum
is present, or actions approved in writing by all of the members of the
Committee, shall be the actions of the Committee; PROVIDED, HOWEVER, that if the
Committee consists of only two members, both shall be required to constitute a
quorum and to act at a meeting or to approve actions in writing.

Except as otherwise expressly provided in the Plan, the Committee
shall have all powers with respect to the administration of the Plan, including,
without limitation, full power and authority to interpret the provisions of the
Plan and any Option Agreement (as defined in Section 5(b)), and to resolve all
questions arising under the Plan. All decisions of the Board or the Committee,
as the case may be, shall be conclusive and binding on all participants in the
Plan.

3. SHARES OF STOCK SUBJECT TO THE PLAN.

(a) NUMBER OF SHARES.

Subject to the provisions of Section 9 (relating to adjustments upon
changes in capital structure and other corporate transactions), the number of
shares of Common Stock subject at any one time to Options granted under the
Plan, plus the number of shares of Common Stock theretofore issued and delivered
pursuant to the exercise of Options granted under the Plan, shall not exceed
920,000 shares. If and to the extent that Options granted under the Plan
terminate, expire or are cancelled without having been fully exercised, new
Options may be granted under the Plan with respect to the shares of Common Stock
covered by the unexercised portion of such terminated, expired or cancelled
Options.

(b) CHARACTER OF SHARES.

The shares of Common Stock issuable upon exercise of an Option granted
under the Plan shall be (i) authorized but unis-

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<PAGE>

sued shares of Common Stock, (ii) shares of Common Stock held in the Company's
treasury or (iii) a combination of the foregoing.

The number of shares of Common Stock reserved for issuance under the
Plan shall at no time be less than the maximum number of shares which may be
purchased at any time pursuant to outstanding Options.

4. ELIGIBILITY.

(a) GENERAL.

Options may be granted by the Committee under the Plan only to persons
who are officers or employees (including directors who are officers or
employees) of the Company or any of its Subsidiaries. Options granted under the
Plan shall be, in the discretion of the Committee, either ISOs or NSOs.
Notwithstanding the foregoing, Options may be conditionally granted to persons
who are prospective employees of the Company or any of its Subsidiaries;
PROVIDED, HOWEVER, that any such conditional grant of an ISO to a prospective
employee shall, by its terms, become effective no earlier than the date on which
such person actually becomes an employee.

(b) EXCEPTIONS.

Notwithstanding anything contained in Section 4(a) to the contrary:

(i) no ISO may be granted under the Plan to an employee who
owns, directly or indirectly (within the meaning of Sections 422(b)(6) and
424(d) of the Code), stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or of its Parent or
Subsidiaries, if any, unless (A) the Option Price (as defined in Section
6(a)) of the shares of Common Stock subject to such ISO is fixed at not
less than 110% of the Fair Market Value on the date of grant (as determined
in accordance with Section 6(b)) of such shares and (B) such ISO, by its
terms, is not exercisable after the expiration of five years from the date
it is granted; and

(ii) no Option may be granted to a person (A) who has been
appointed pursuant to Section 2(a) to serve on the Committee effective
as of a future date at any time during the period from the date such
appointment is made to the date such appointment is to become
effective or (B) who is serving as a member of the Committee.

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<PAGE>

5. GRANT OF OPTIONS.

(a) GENERAL.

Options may be granted under the Plan at any time and from time to
time on or prior to the Expiration Date (as defined in Section 12). Subject to
the provisions of the Plan, the Committee shall have plenary authority, in its
discretion, to determine:

(i) the persons (from among the class of persons eligible
to receive Options under the Plan) to whom Options shall be granted
(the "Optionees");

(ii) the time or times at which Options shall be granted;

(iii) the number of shares subject to each Option;

(iv) the Option Price of the shares subject to each Option,
which price shall be not less than the minimum specified in Section
4(b)(i) or 6(a) (as applicable); and

(v) the time or times when, or the occurrence of the event
or events upon which, each Option shall become exercisable and the
duration of the exercise period.

(b) OPTION AGREEMENTS.

Each Option granted under the Plan shall be designated as an ISO or an
NSO and shall be subject to the terms and conditions applicable to ISOs and/or
NSOs (as the case may be) set forth in the Plan. In addition, each Option shall
be evidenced by a written agreement (an "Option Agreement"), containing such
terms and conditions and in such form, not inconsistent with the Plan, as the
Committee shall, in its discretion, provide. Each Option Agreement shall be
executed by the Company and the Optionee.

Nothing contained in the Plan or in any Option Agreement shall confer
upon any Optionee any right with respect to the continuation of his or her
employment by the Company or any of its Subsidiaries or interfere in any way
with the right of the Company or any such Subsidiary (subject to the terms of
any separate agreement to the contrary), at any time to terminate such
employment or to increase or decrease the compensation of

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<PAGE>

the Optionee from the rate in existence at the time of the grant of an Option.

(d) DATE OF GRANT.

The date of grant of an Option under the Plan shall be the date as of
which the Committee approves the grant; PROVIDED, HOWEVER, that in the case of
an ISO, the date of grant shall in no event be earlier than the date as of which
the Optionee becomes an employee of the Company or one of its Subsidiaries.

6. OPTION PRICE.

(a) GENERAL.

Subject to Section 9, the price (the "Option Price") at which each
share of Common Stock subject to an Option granted under the Plan may be
purchased shall be determined by the Committee at the time the Option is
granted; PROVIDED, HOWEVER, that in the case of an ISO (subject to Section
4(b)(i)) or an NSO, such Option Price shall in no event be less than 100% of the
Fair Market Value on the date of grant (as determined in accordance with Section
6(b)) of such share of Common Stock; and PROVIDED FURTHER, HOWEVER, that, in the
case of an Option granted effective on the Effective Date (as defined in Section
7(a)), such Option Price shall be the initial public offering price per share of
the Common Stock.

(b) DETERMINATION OF FAIR MARKET VALUE.

Subject to the requirements of Section 422 of the Code, for purposes
of the Plan, the "Fair Market Value" of shares of Common Stock shall be equal
to:

(i) if such shares are publicly traded, (x) if the Common
Stock is then traded on a national securities exchange, the average of
the high and low prices on the date of grant or, if such date is not a
business day on which shares are traded, the next immediately
preceding trading day, or (y) the closing price, if applicable, or the
average of the last bid and asked prices on the date of grant or, if
such date is not a business day on which shares are traded, the next
immediately preceding trading day, in the over-the-counter market as
reported by NASDAQ; or

(ii) if there is no public trading market for such shares,
the fair value of such shares on the date of grant as determined by
the Committee after taking into consideration all factors which it
deems appropriate, including, without limitation, recent sale

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<PAGE>

and offer prices of the Common Stock in private transactions negotiated at
arms' length.

Anything contained in the Plan to the contrary notwithstanding, all
determinations pursuant to Section 6(b)(ii) shall be made without regard to any
restriction other than a restriction which, by its terms, will never lapse.

Subsequent to the date of grant of any NSO, the Committee may, at its
discretion and with the consent of the Optionee, establish a new Option Price
for such NSO so as to increase or decrease the Option Price of such NSO.

7. EXERCISABILITY OF OPTIONS.

(a) COMMITTEE DETERMINATION.

Each Option granted under the Plan shall be exercisable at such time
or times, or upon the occurrence of such event or events, and for such number of
shares subject to the Option, as shall be determined by the Committee and set
forth in the Option Agreement evidencing such Option; PROVIDED, HOWEVER, that no
Option granted under the Plan shall be exercisable during the 180-day period
immediately following the effective date (the "Effective Date") of the
registration statement filed by the Company under the Securities Act of 1933, as
amended (the "Securities Act"), in connection with the initial public offering
of the Common Stock. Subject to the proviso of the immediately preceding
sentence, if an Option is not at the time of grant immediately exercisable, the
Committee may (i) in the Option Agreement evidencing such Option, provide for
the acceleration of the exercise date or dates of the subject Option upon the
occurrence of specified events and/or (ii) at any time prior to the complete
termination of such Option, accelerate the exercise date or dates of such
Option.

(b) AUTOMATIC TERMINATION OF OPTION.

The unexercised portion of any Option granted under the Plan shall
automatically terminate and shall become null and void and be of no further
force or effect upon the first to occur of the following:

(i) the tenth anniversary of the date on which such Option
is granted or, in the case of any ISO granted to a person described in
Section 4(b)(i), the fifth anniversary of the date on which such ISO
is granted;

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<PAGE>

(ii) the expiration of such period of time or the
occurrence of such event as the Committee in its discretion may
provide in the Option Agreement;

(iii) the effective date of a Corporate Transaction (as
defined in Section 9(b)) to which Section 9(b)(ii) (relating to
assumptions and substitutions of Options) does not apply; PROVIDED,
HOWEVER, that an Optionee's right to exercise any Option outstanding
prior to such effective date shall in all events be suspended during
the period commencing 10 days prior to the proposed effective date of
such Corporate Transaction and ending on either the actual effective
date of such Corporate Transaction or upon receipt of notice from the
Company that such Corporate Transaction will not in fact occur; and

(iv) except to the extent permitted by Section 9(b)(ii), the
date on which an Option or any part thereof or right or privilege relating
thereto is transferred (otherwise than by will or the laws of descent and
distribution), assigned, pledged, hypothecated, attached or otherwise
disposed of by the Optionee.

Anything contained in the Plan to the contrary notwithstanding, unless
otherwise provided in an Option Agreement, no Option granted under the Plan
shall be affected by any change of duties or position of the Optionee (including
a transfer to or from the Company or one of its Subsidiaries), so long as such
Optionee continues to be an officer or employee of the Company or one of its
Subsidiaries.

Anything contained in the Plan to the contrary notwithstanding, an ISO
granted under the Plan to an Optionee shall not be exercisable to the extent
that the aggregate Fair Market Value on the date of grant of such ISO (as
determined in accordance with Section 6(b)) of all stock with respect to which
incentive stock options are exercisable for the first time by such Optionee
during any calendar year (under all plans of the Company and its Subsidiaries)
exceeds $100,000.

8. PROCEDURE FOR EXERCISE.

(a) PAYMENT.

At the time an Option is granted under the Plan, the Committee shall,
in its discretion, specify one or more of the following forms of payment which
may be used by an Optionee upon exercise of his Option:

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<PAGE>

(i) cash or personal or certified check payable to the
Company in an amount equal to the aggregate Option Price of the shares
with respect to which the Option is being exercised;

(ii) stock certificates (in negotiable form) representing
whole shares of Common Stock having a Fair Market Value on the date of
exercise (as determined in accordance with Section 6(b) as if the date
of exercise were the date of grant) equal to the aggregate Option
Price of the shares with respect to which the Option is being
exercised;

(iii) (x) by arrangements which are acceptable to the Committee
whereby the Optionee delivers irrevocable instructions to a broker promptly
to deliver to the Company the amount of sale proceeds from the sale of
shares subject to the Option as is necessary to pay the Option Price and,
unless otherwise allowed by the Committee, any applicable tax withholding
obligation (provided that, in the case of an ISO, if this form of payment
is approved by the Committee, and if this form of payment is utilized by
the Optionee, a Disqualifying Disposition (as defined in Section 15 below)
will be deemed to have occurred) or (y) in compliance with any other
cashless exercise program authorized by the Company for use in connection
with the Plan at the time of such exercise (provided that, in the case of
an ISO, if this form of payment is approved by the Committee, and if this
form of payment is utilized by the Optionee, a Disqualifying Disposition
may be deemed to have occurred); or

(iv) a combination of the methods set forth in clauses (i), (ii)
and (iii);

(b) NOTICE.

An Optionee (or other person, as provided in Section 10(b)) may
exercise an Option granted under the Plan in whole or in part (but for the
purchase of whole shares only), as provided in the Option Agreement evidencing
his or her Option, by delivering a written notice (the "Notice") to the
Secretary of the Company. The Notice shall:

(i) state that the Optionee elects to exercise the Option;

(ii) state the number of shares with respect to which the
Option is being exercised (the "Optioned Shares");

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<PAGE>

(iii) state the method of payment for the Optioned Shares
(which method must be available to the Optionee under the terms of his
or her Option Agreement);

(iv) state the date upon which the Optionee desires to
consummate the purchase (which date must be prior to the termination
of such Option and no later than 30 days from the delivery of such
Notice);

(v) include any representations of the Optionee required
pursuant to Section 10(a);

(vi) if the Option is exercised pursuant to Section 10(b) by any
person other than the Optionee, include evidence to the satisfaction of the
Committee of the right of such person to exercise the Option; and

(vii) include such further provisions consistent with the
Plan as the Committee may from time to time require.

The exercise date of an Option shall be the date on which the Company
receives the Notice from the Optionee.

Within 30 days of the exercise of the Option, the Optionee shall
deliver to the Company a copy of any election filed by the Optionee with the
Internal Revenue Service under Section 83(b) of the Code.

The Company shall issue a stock certificate in the name of the
Optionee (or such other person exercising the Option in accordance with the
provisions of Section 10(b)) for the Optioned Shares as soon as practicable
after receipt of the Notice and payment of the aggregate Option Price for such
shares. Neither the Optionee nor any person exercising an Option in accordance
with the provisions of Section 10(b) shall have any privileges as a stockholder
of the Company with respect to any shares of stock subject to an Option granted
under the Plan until the date of issuance of a stock certificate pursuant to
this Section 8(c).

9. ADJUSTMENTS.

(a) CHANGES IN CAPITAL STRUCTURE.

Subject to Section 9(b), if the Common Stock is changed by reason of a
stock split, reverse stock split, stock dividend or recapitalization, or
converted into or exchanged for other securities as a result of a merger,
consolidation or reorganization, the Committee shall make such adjustments in
the number and

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<PAGE>

class of shares of stock with respect to which Options may be granted under the
Plan as shall be equitable and appropriate in order to make such Options, as
nearly as may be practicable, equivalent to such Options immediately prior to
such change. A corresponding adjustment changing the number and class of shares
allocated to, and the Option Price of, each Option or portion thereof
outstanding at the time of such change shall likewise be made. Anything
contained in the Plan to the contrary notwithstanding, in the case of ISOs, no
adjustment under this Section 9(a) shall be appropriate if such adjustment (i)
would constitute a modification, extension or renewal of such ISOs within the
meaning of Sections 422 and 424 of the Code, and the regulations promulgated by
the Treasury Department thereunder, or (ii) would, under Section 422 of the Code
and the regulations promulgated by the Treasury Department thereunder, be
considered the adoption of a new plan requiring stockholder approval.

(b) CORPORATE TRANSACTIONS.

The following rules shall apply in connection with the dissolution or
liquidation of the Company, a reorganization, merger or consolidation in which
the Company is not the surviving corporation or a sale of all or substantially
all of the assets of the Company to another person or entity (a "Corporate
Transaction"):

(i) each holder of an Option outstanding at such time shall
be given (A) written notice of such Corporate Transaction at least 20
days prior to its proposed effective date (as specified in such
notice) and (B) an opportunity, during the period commencing with
delivery of such notice and ending 10 days prior to such proposed
effective date, to exercise the Option to the full extent to which
such Option would have been exercisable by the Optionee at the
expiration of such 20-day period; PROVIDED, HOWEVER, that upon the
effective date of a Corporate Transaction, all Options granted under
the Plan not so exercised shall automatically terminate; and

(ii) anything contained in the Plan to the contrary
notwithstanding, Section 9(b)(i) shall not be applicable if provision
shall be made in connection with such Corporate Transaction for the
assumption of outstanding Options by, or the substitution for such
Options of new options covering the stock of, the surviving, successor
or purchasing corporation, or a parent or subsidiary thereof, with
appropriate adjustments as to the number, kind and option prices of
shares subject to such options; PROVIDED, HOWEVER, that in the case of
ISOs, the Committee shall, to the extent not inconsistent with the
best interests of the Company or its Subsidiaries (such best interests
to be determined

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<PAGE>

in good faith by the Committee in its sole discretion), use its best
efforts to ensure that any such assumption or substitution will not
constitute a modification, extension or renewal of the ISOs within the
meaning of Section 424(h) of the Code and the regulations promulgated by
the Treasury Department thereunder.

The following rules shall apply in connection with Section 9(a) and
(b) above:

(i) no fractional shares shall be issued as a result of any
such adjustment, and any fractional shares resulting from the
computations pursuant to Section 9(a) or (b) shall be eliminated
without consideration from the respective Options;

(ii) no adjustment shall be made for cash dividends or the
issuance to stockholders of rights to subscribe for additional shares
of Common Stock or other securities; and

(iii) any adjustments referred to in Section 9(a) or (b)
shall be made by the Committee in its sole discretion and shall be
conclusive and binding on all persons holding Options granted under
the Plan.

10. RESTRICTIONS ON OPTIONS AND OPTIONED SHARES.

(a) COMPLIANCE WITH SECURITIES LAWS.

No Options shall be granted under the Plan, and no shares of Common
Stock shall be issued and delivered upon the exercise of Options granted under
the Plan, unless and until the Company and/or the Optionee shall have complied
with all applicable Federal or state registration, listing and/or qualification
requirements and all other requirements of law or of any regulatory agencies
having jurisdiction.

The Committee in its discretion may, as a condition to the exercise of
any Option granted under the Plan, require an Optionee (i) to represent in
writing that the shares of Common Stock received upon exercise of an Option are
being acquired for investment and not with a view to distribution and (ii) to
make such other representations and warranties as are deemed appropriate by
counsel to the Company. Stock certificates representing shares of Common Stock
acquired upon the exercise of Options that have not been registered under the
Securities Act shall, if required by the Committee, bear the following legend:

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<PAGE>

"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES
HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE PLEDGED,
HYPOTHECATED, SOLD OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE
SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL TO THE
COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT."

(b) NONASSIGNABILITY OF OPTION RIGHTS.

No Option granted under the Plan shall be assignable or otherwise
transferable by the Optionee except by will or by the laws of descent and
distribution. An Option may be exercised during the lifetime of the Optionee
only by the Optionee. If an Optionee dies, his or her Option shall thereafter
be exercisable, during the period specified in the Option Agreement, by his or
her executors or administrators to the full extent to which such Option was
exercisable by the Optionee at the time of his or her death.

11. EFFECTIVE DATE OF PLAN.

The Plan became effective on the Effective Date. This amendment and
restatement of the Plan is effective as of September 5, 1996.

12. EXPIRATION AND TERMINATION OF THE PLAN.

Except with respect to Options then outstanding, the Plan shall expire
on the date (the "Expiration Date") which is the first to occur of (i) the later
of (a) the tenth anniversary of the Effective Date and (b) the tenth anniversary
of the date on which the Plan is approved by the stockholders of the Company and
(ii) the date as of which the Board, in its sole discretion, determines that the
Plan shall terminate. Any Options outstanding as of the Expiration Date shall
remain in effect until they have been exercised or terminated or have expired by
their respective terms.

13. AMENDMENT OF PLAN.

The Board may at any time prior to the Expiration Date modify and
amend the Plan in any respect; PROVIDED, HOWEVER, that the approval of the
holders of a majority of the votes that may be cast by all of the holders of
shares of Common Stock and preferred stock of the Company, if any, entitled to
vote (voting as a single class) shall be obtained prior to any such amendment

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<PAGE>

becoming effective if such approval is required by law or is necessary to comply
with regulations promulgated by the SEC under Section 16(b) of the 1934 Act or
with Section 422 of the Code or the regulations promulgated by the Treasury
Department thereunder.

14. CAPTIONS.

The use of captions in the Plan is for convenience. The captions are
not intended to provide substantive rights.

15. DISQUALIFYING DISPOSITIONS.

If Optioned Shares acquired by exercise of an ISO granted under the
Plan are disposed of within two years following the date of grant of the ISO or
one year following the transfer of the Optioned Shares to the Optionee (a
"Disqualifying Disposition"), the holder of the Optioned Shares shall,
immediately prior to such Disqualifying Disposition, notify the Company in
writing of the date and terms of such Disqualifying
Disposition and provide such other information regarding the Disqualifying
Disposition as the Company may reasonably require.

16. WITHHOLDING TAXES.

Whenever under the Plan shares of Common Stock are to be delivered to
an Optionee upon exercise of an Option, the Company shall be entitled to require
as a condition of delivery that the Optionee remit or, in appropriate cases,
agree to remit when due, an amount sufficient to satisfy all current or
estimated future Federal, state and local withholding tax and employment tax
requirements relating thereto. At the time of a Disqualifying Disposition, the
Optionee shall remit to the Company in cash the amount of any applicable
Federal, state and local withholding taxes and employment taxes.

17. OTHER PROVISIONS.

Each Option granted under the Plan may contain such other terms and
conditions not inconsistent with the Plan as may be determined by the Committee,
in its sole discretion. Notwithstanding the foregoing, each ISO granted under
the Plan shall include those terms and conditions which are necessary to qualify
the ISO as an "incentive stock option" within the meaning of Section 422 of the
Code and the regulations thereunder and shall not include any terms or
conditions which are inconsistent therewith.

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<PAGE>

18. NUMBER AND GENDER.

With respect to words used in the Plan, the singular form shall
include the plural form, the masculine gender shall include the feminine
gender, and vice-versa, as the context requires.

19. GOVERNING LAW.

The validity and construction of the Plan and the instruments
evidencing the Options granted hereunder shall be governed by the laws of the
State of Delaware.

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<PAGE>
EXHIBIT 4.2

FORM FOR ISO UNDER 1994 EMPLOYEE
STOCK OPTION PLAN

NONTRANSFERABLE INCENTIVE STOCK
OPTION AGREEMENT dated as of ________
__, 19__, between BLYTH INDUSTRIES,
INC., a Delaware corporation (the
"Company"), and __________ (the
"Optionee", which term as used herein
shall be deemed to include any successor
to the Optionee by will or by the laws
of descent and distribution, unless the
context shall otherwise require).

Pursuant to the Company's amended and restated 1994 Employee Stock
Option Plan (the "Plan"), the Company, acting through the Stock Option and
Compensation Committee of its Board of Directors (the "Committee"), approved the
issuance to the Optionee, effective as of the date set forth above, of an
incentive stock option to purchase up to an aggregate of [# OF SHARES] shares of
Common Stock, $.02 par value, of the Company (the "Common Stock"), at the price
(the "Option Price") of [not less than 100% of the fair market value of a share
of Common Stock on the date of grant (110%, in the case of a 10% stockholder)]
[PRICE] per share, upon the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual premises and
undertakings hereinafter set forth, the parties hereto agree as follows:

1. OPTION; OPTION PRICE. On behalf of the Company, the Committee
hereby grants to the Optionee the option (the "Option") to purchase, subject to
the terms and conditions of this Agreement and the Plan (which are incorporated
by reference herein and which in all cases shall control in the event of any
conflict with the terms, definitions and provisions of this Agreement), [# OF
SHARES] shares of Common Stock of the Company at an exercise price per share
equal to the Option Price, which Option is intended to qualify for Federal
income tax purposes as an "incentive stock option" within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"). A copy of
the Plan as in effect on the date hereof has been supplied to the Optionee, and
the Optionee hereby acknowledges receipt thereof.

2. TERM. The term (the "Option Term") of the Option shall commence
on the date of this Agreement and shall expire on

<PAGE>

the tenth anniversary of the date of this Agreement [fifth anniversary, in the
case of a 10% stockholder], unless such Option shall theretofore have been
terminated in accordance with the terms hereof or of the Plan.

3. TIME OF EXERCISE. (a) Unless accelerated in the discretion of
the Committee or as otherwise provided herein, the Option shall become
exercisable as to the total number of shares of Common Stock subject to the
Option multiplied by the fraction specified in Exhibit A hereto, for the periods
specified in Exhibit A hereto. Subject to the provisions of Sections 5 and 8
hereof, shares as to which the Option becomes exercisable pursuant to the
foregoing provisions may be purchased at any time thereafter prior to the
expiration or termination of the Option.

(b) Anything contained in this Agreement to the contrary
notwithstanding, the Option shall not be exercisable to the extent that the
aggregate Fair Market Value (as determined in accordance with Section 6(b) of
the Plan) on the date hereof of all stock with respect to which incentive stock
options are exercisable for the first time by the Optionee during any calendar
year (under the Plan and all other plans of the Company and its subsidiaries, if
any) exceeds $100,000.

4. TERMINATION OF OPTION. (a) The unexercised portion of the
Option shall automatically terminate and shall become null and void and be of no
further force or effect upon the first to occur of the following:

(i) the expiration of the Option Term;

(ii) the expiration of three months from the date that the
Optionee ceases to be an employee of the Company or any of its subsidiaries
(other than as a result of an Involuntary Termination (as defined in
subparagraph (iii) below) or a Termination For Cause (as defined in
subparagraph (iv) below)); PROVIDED, HOWEVER, that if the Optionee shall
die during such three-month period, the time of termination of the
unexercised portion of the Option shall be determined in accordance with
subparagraph (iii) below;

(iii) the expiration of 12 months from the date that the Optionee
ceases to be an employee of the Company or any of its subsidiaries as a
result of the Optionee's death or permanent and total disability (within
the meaning of Section 22(e)(3) of the Code) (an "Involuntary
Termination");

- ---------------
* Subject to modification by the Committee to accommodate performance
objectives, if any.

-2-

<PAGE>

(iv) immediately if the Optionee ceases to be an employee of the
Company or any of its subsidiaries if such termination is for cause or is
otherwise attributable to a breach by the Optionee of an employee,
noncompetition or other similar agreement with the Company or any such
subsidiary (any such termination, determined in accordance with paragraph
(b) below, a "Termination For Cause");

(v) the effective date of a Corporate Transaction (as defined in
Section 9(b) of the Plan) to which Section 9(b)(ii) of the Plan (relating
to assumptions and substitutions of Options) does not apply; PROVIDED,
HOWEVER, that the Optionee's right to exercise the Option prior to such
effective date shall in all events be suspended during the period
commencing 10 days prior to the proposed effective date of such Corporate
Transaction and ending on either the actual effective date of such
Corporate Transaction or upon receipt of notice from the Company that such
Corporate Transaction will not in fact occur; and

(vi) except to the extent permitted by Section 9(b)(ii) of the
Plan, the date on which the Option or any part thereof or right or
privilege relating thereto is transferred (otherwise than by will or the
laws of descent and distribution), assigned, pledged, hypothecated,
attached or otherwise disposed of by the Optionee.

(b) The Board of Directors of the Company shall have the power to
determine what constitutes a Termination For Cause, and the date upon which such
Termination For Cause occurs. Any such determination shall be final, conclusive
and binding upon the Optionee.

(c) Anything contained herein to the contrary notwithstanding, the
Option shall not be affected by any change of duties or position of the Optionee
(including a transfer to or from the Company or one of its subsidiaries), so
long as the Optionee continues to be an officer or employee of the Company or
one of its subsidiaries.

5. PROCEDURE FOR EXERCISE. (a) The Option may be exercised, from
time to time, in whole or in part (but for the purchase of whole shares only),
by delivery of a written notice (the "Notice") from the Optionee to the
Secretary of the Company, which Notice shall:

(i) state that the Optionee elects to exercise the
Option;

(ii) state the number of shares with respect to which
the Option is being exercised (the "Optioned Shares");

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<PAGE>

(iii) state the method of payment for the Optioned Shares
pursuant to Section 5(b);

(iv) state the date upon which the Optionee desires to
consummate the purchase of the Optioned Shares (which date must be
prior to the termination of such Option and no later than 30 days from
the delivery of such Notice);

(v) include any representations of the Optionee required
under Section 8(b); and

(vi) if the Option shall be exercised pursuant to Section 10
by any person other than the Optionee, include evidence to the
satisfaction of the Committee of the right of such person to exercise
the Option.

(b) Payment of the Option Price for the Optioned Shares shall be
made (i) in cash or by personal or certified check, (ii) by delivery of stock
certificates (in negotiable form) representing shares of Common Stock that have
been owned of record by the Optionee for at least six months prior to the date
of exercise and that have a Fair Market Value on the date of exercise
(determined in the manner set forth in Section 6(b) of the Plan) equal to the
product of (A) the number of Optioned Shares which are being purchased pursuant
to the exercise of such Option, multiplied by (B) the applicable Option Price,
(iii) (A) by arrangements which are acceptable to the Committee whereby the
Optionee delivers irrevocable instructions to a broker to promptly deliver to
the Company the amount of sale proceeds from the sale of the Optioned Shares as
is necessary to pay the Option Price and, unless otherwise allowed by the
Committee, any applicable tax withholding obligation or (B) in compliance with
any other cashless exercise program authorized by the Company for use in
connection with the Plan at the time of such exercise, or (iv) a combination of
the methods set forth in the foregoing clauses (i), (ii) and (iii).

(c) The Company shall issue a stock certificate in the name of
the Optionee (or such other person exercising the Option in accordance with the
provisions of Section 10) for the Optioned Shares as soon as practicable after
receipt of the Notice and payment of the aggregate Option Price for such shares.

6. NO RIGHTS AS A STOCKHOLDER. The Optionee shall not have any
privileges of a stockholder of the Company with respect to any Optioned Shares
until the date of issuance of a stock certificate pursuant to Section 5(c).

7. ADJUSTMENTS. (a) Subject to Section 7(b), if, at any time while
the Option is outstanding, the Common Stock is

-4-

<PAGE>

changed by reason of a stock split, reverse stock split, stock dividend or
recapitalization, or converted into or exchanged for other securities as a
result of a merger, consolidation or reorganization, the Committee shall make
adjustments in the number and class of shares of stock subject to the Option,
and the Option Price of the Option, subject to the provisions of Sections 9(a)
and 9(c) of the Plan (or any similar or successor provisions of the Plan which
may be hereafter adopted).

(b) In the event of the dissolution or liquidation of the
Company, or reorganization, merger or consolidation in which the Company is not
the surviving corporation or a sale of all or substantially all of the assets of
the Company to another person or entity, the provisions of Sections 9(b) and
9(c) of the Plan (or any similar or successor provisions of the Plan which may
be hereafter adopted) shall apply.

8. ADDITIONAL PROVISIONS RELATED TO EXERCISE. (a) The Option shall
be exercisable only on such date or dates and during such period and for such
number of shares of Common Stock as are set forth in this Agreement.

(b) To exercise the Option, the Optionee shall follow the
procedures set forth in Section 5 hereof. Upon the exercise of the Option at a
time when there is not in effect a registration statement under the Securities
Act of 1933, as amended (the "Securities Act"), relating to the shares of Common
Stock issuable upon exercise of the Option, the Committee in its discretion may,
as a condition to the exercise of the Option, require the Optionee (i) to
represent in writing that the shares of Common Stock received upon exercise of
the Option are being acquired for investment and not with a view to distribution
and (ii) to make such other representations and warranties as are deemed
appropriate by counsel to the Company. No shares of Common Stock shall be
issued and delivered upon the exercise of the Option unless and until the
Company and/or the Optionee shall have complied with all applicable Federal or
state registration, listing and/or qualification requirements and all other
requirements of law or of any regulatory agencies having jurisdiction.

(c) Stock certificates representing shares of Common Stock
acquired upon the exercise of the Option that have not been registered under the
Securities Act shall, if required by the Committee, bear the following legend:

-5-

<PAGE>

STATEMENT FOR THE SHARES UNDER THE SECURITIES ACT OF 1933 OR AN
OPINION OF COUNSEL TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT."

9. NO EVIDENCE OF EMPLOYMENT OR SERVICE. Nothing contained in the
Plan or this Agreement shall confer upon the Optionee any right to continue in
the employ of the Company or any of its subsidiaries or interfere in any way
with the right of the Company or its subsidiaries (subject to the terms of any
separate agreement to the contrary) to terminate the Optionee's employment or to
increase or decrease the Optionee's compensation at any time.

10. RESTRICTION ON TRANSFER. The Option may not be transferred,
pledged, assigned, hypothecated or otherwise disposed of in any way by the
Optionee, except by will or by the laws of descent and distribution, and may be
exercised during the lifetime of the Optionee only by the Optionee. If the
Optionee dies, the Option shall thereafter be exercisable, during the period
specified in Section 4(a)(iii), by his executors or administrators to the full
extent to which the Option was exercisable by the Optionee at the time of his
death. The Option shall not be subject to execution, attachment or similar
process. Any attempted assignment, transfer, pledge, hypothecation or other
disposition of the Option contrary to the provisions hereof, and the levy of any
execution, attachment or similar process upon the Option, shall be null and void
and without effect.

11. DISQUALIFYING DISPOSITIONS; TAXES. (a) If Optioned Shares are
disposed of within two years following the date of this Agreement or one year
following the issuance thereof to the Optionee (a "Disqualifying Disposition"),
the Optionee shall, immediately prior to such Disqualifying Disposition, notify
the Company in writing of the date and terms of such Disqualifying Disposition
and provide such other information regarding the Disqualifying Disposition as
the Company may reasonably require.

(b) At the time of a Disqualifying Disposition, the Optionee shall
remit to the Company in cash the amount of any applicable Federal, state and
local withholding taxes and employment taxes.

12. NOTICES. All notices or other communications which are required
or permitted hereunder shall be in writing and sufficient if (i) personally
delivered, (ii) sent by nationally-recognized overnight courier or (iii) sent by
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:

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<PAGE>

if to the Optionee, to the address set forth on the signature
page hereto; and

if to the Company, to:

Blyth Industries, Inc.
100 Field Point Road
Greenwich, Connecticut 06830
Attention: Secretary;

or to such other address as the party to whom notice is to be given may have
furnished to each other party in writing in accordance herewith. Any such
communication shall be deemed to have been given (i) when delivered, if
personally delivered, (ii) on the first Business Day (as hereinafter defined)
after dispatch, if sent by nationally-recognized overnight courier and (iii) on
the third Business Day following the date on which the piece of mail containing
such communication is posted, if sent by mail. As used herein, "Business Day"
means a day that is not a Saturday, Sunday or a day on which banking
institutions in the city to which the notice or communication is to be sent are
not required to be open.

13. NO WAIVER. No waiver of any breach or condition of this
Agreement shall be deemed to be a waiver of any other or subsequent breach or
condition, whether of like or different nature.

14. OPTIONEE UNDERTAKING. The Optionee hereby agrees to take
whatever additional actions and execute whatever additional documents the
Company may in its reasonable judgment deem necessary or advisable in order to
carry out or effect one or more of the obligations or restrictions imposed on
the Optionee pursuant to the express provisions of this Agreement.

15. MODIFICATION OF RIGHTS. The rights of the Optionee are subject
to modification and termination in certain events as provided in this Agreement
and the Plan.

16. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to
contracts made and to be wholly performed therein.

17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

18. ENTIRE AGREEMENT. This Agreement and the Plan constitute the
entire agreement between the parties with respect to the subject matter hereof,
and supersede all previously

-7-

<PAGE>

written or oral negotiations, commitments, representations and agreements with
respect thereto.

-8-

<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this
Nontransferable Incentive Stock Option Agreement as of the date first written
above.

BLYTH INDUSTRIES, INC.

By:
---------------------------
Name:
Title:

OPTIONEE:

------------------------------
Name:
-------------------------
Address:
----------------------
----------------------
----------------------

<PAGE>

EXHIBIT A

One-fifth (1/5) of the aggregate number of options issued hereunder
shall become exercisable on each anniversary of the date of grant on which the
Optionee is employed by the Company.

<PAGE>

EXHIBIT 4.3

FORM FOR NSO UNDER 1994
EMPLOYEE STOCK OPTION PLAN

NONTRANSFERABLE NON-QUALIFIED
STOCK OPTION AGREEMENT dated as of
, 199 , between BLYTH
INDUSTRIES, INC., a Delaware
corporation (the "Company"), and
(the "Optionee",
which term as used herein shall be
deemed to include any successor to
the Optionee by will or by the
laws of descent and distribution,
unless the context shall otherwise
require).

Pursuant to the Company's amended and restated 1994 Employee Stock
Option Plan (the "Plan"), the Company, acting through the Stock Option and
Compensation Committee of its Board of Directors (the "Committee"), approved the
issuance to the Optionee, effective as of the date set forth above, of a non-
qualified option to purchase up to an aggregate of [# OF SHARES] shares of
Common Stock, $.02 par value, of the Company (the "Common Stock"), at the price
of (the "Option Price") [not less than 100% of the fair market value of a share
of Common Stock on the date of grant] [PRICE] per share, upon the terms and
conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual premises and
undertakings hereinafter set forth, the parties hereto agree as follows:

1. OPTION; OPTION PRICE. On behalf of the Company, the Committee
hereby grants to the Optionee the option (the "Option") to purchase, subject to
the terms and conditions of this Agreement and the Plan (which are incorporated
by reference herein and which in all cases shall control in the event of any
conflict with the terms, definitions and provisions of this Agreement), [# OF
SHARES] shares of Common Stock of the Company at an exercise price per share
equal to the Option Price, which Option is NOT intended to qualify for Federal
income tax purposes as an "incentive stock option" within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"). A copy of
the Plan as in effect on the date hereof has been supplied to the Optionee, and
the Optionee hereby acknowledges receipt thereof.

2. TERM. The term (the "Option Term") of the Option shall commence
on the date of this Agreement and shall expire on the tenth anniversary of the
date of this Agreement, unless such Option shall theretofore have been
terminated in accordance with the terms hereof or of the Plan.

<PAGE>

3. TIME OF EXERCISE. Unless accelerated in the discretion of the
Committee or as otherwise provided herein, the Option shall become exercisable
as to the total number of shares of Common Stock subject to the Option
multiplied by the fraction specified in Exhibit A hereto, for the periods
specified in Exhibit A hereto.* Subject to the provisions of Sections 5 and 8
hereof, shares as to which the Option becomes exercisable pursuant to the
foregoing provisions may be purchased at any time thereafter prior to the
expiration or termination of the Option.

(i) the expiration of the Option Term;

- --------------------

* Subject to modification by the Committee to accommodate performance
objectives, if any.

-2-

<PAGE>

effective date of such Corporate Transaction and ending on either the
actual effective date of such Corporate Transaction or upon receipt of
notice from the Company that such Corporate Transaction will not in fact
occur; and

(i) state that the Optionee elects to exercise the
Option;

(ii) state the number of shares with respect to which
the Option is being exercised (the "Optioned Shares");

(iii) state the method of payment for the Optioned Shares
pursuant to Section 5(b);

(v) include any representations of the Optionee required
under Section 8(b); and

(vi) if the Option shall be exercised pursuant to Section 10
by any person other than the Optionee, include evidence to the
satisfaction of the

-3-

<PAGE>

Committee of the right of such person to exercise the Option.

(b) Payment of the Option Price for the Optioned Shares shall be
made (i) in cash or by personal or certified check, (ii) by delivery of stock
certificates (in negotiable form) representing shares of Common Stock that have
been owned of record by the Optionee for at least six months prior to the date
of exercise and that have a Fair Market Value on the date of exercise
(determined in the manner set forth in Section 6(b) of the Plan) equal to the
product of (A) the number of Optioned Shares which are being purchased pursuant
to the exercise of such Option, multiplied by (B) the applicable Option Price,
(iii)(A) by arrangements which are acceptable to the Committee whereby the
Optionee delivers irrevocable instructions to a broker to promptly deliver to
the Company the amount of sale proceeds from the sale of the Optioned Shares as
is necessary to pay the Option Price and, unless otherwise allowed by the
Committee, any applicable tax withholding obligation or (B) in compliance with
any other cashless exercise program authorized by the Company for use in
connection with the Plan at the time of such exercise, or (iv) a combination of
the methods set forth in the foregoing clauses (i), (ii) and (iii).

7. ADJUSTMENTS. (a) Subject to Section 7(b), if, at any time while
the Option is outstanding, the Common Stock is changed by reason of a stock
split, reverse stock split, stock dividend or recapitalization, or converted
into or exchanged for other securities as a result of a merger, consolidation or
reorganization, the Committee shall make adjustments in the number and class of
shares of stock subject to the Option, and the Option Price of the Option,
subject to the provisions of Sections 9(a) and 9(c) of the Plan (or any similar
or successor provisions of the Plan which may be hereafter adopted).

-4-

<PAGE>

-5-

<PAGE>

lifetime of the Optionee only by the Optionee. If the Optionee dies, the Option
shall thereafter be exercisable, during the period specified in Section
4(a)(iii), by his executors or administrators to the full extent to which the
Option was exercisable by the Optionee at the time of his death. The Option
shall not be subject to execution, attachment or similar process. Any attempted
assignment, transfer, pledge, hypothecation or other disposition of the Option
contrary to the provisions hereof, and the levy of any execution, attachment or
similar process upon the Option, shall be null and void and without effect.

11. TAXES. Whenever shares of Common Stock are to be delivered to
the Optionee upon exercise of the Option, the Company shall be entitled to
require as a condition of delivery that the Optionee remit or, in appropriate
cases, agree to remit when due, an amount sufficient to satisfy all current or
estimated future Federal, state and local withholding tax and employment tax
requirements relating thereto.

if to the Optionee, to the address set forth on the signature
page hereto; and

if to the Company, to:

Blyth Industries, Inc.
100 Field Point Road
Greenwich, Connecticut 06830
Attention: Secretary;

13. NO WAIVER. No waiver of any breach or condition of this
Agreement shall be deemed to be a waiver of any other or

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<PAGE>

subsequent breach or condition, whether of like or different nature.

15. MODIFICATION OF RIGHTS. The rights of the Optionee are subject
to modification and termination in certain events as provided in this Agreement
and the Plan.

16. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to
contracts made and to be wholly performed therein.

17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

18. ENTIRE AGREEMENT. This Agreement and the Plan constitute the
entire agreement between the parties with respect to the subject matter hereof,
and supersede all previously written or oral negotiations, commitments,
representations and agreements with respect thereto.

-7-

<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this
Nontransferable Non-Qualified Stock Option Agreement as of the date first
written above.

BLYTH INDUSTRIES, INC.

By:
---------------------------
Name:
Title:

OPTIONEE:

------------------------------
Name:
-------------------------
Address:
----------------------
----------------------
----------------------

<PAGE>

EXHIBIT A

One-fifth (1/5) of the aggregate number of options issued hereunder
shall become exercisable on each anniversary of the date of grant on which the
Optionee is employed by the Company.

<PAGE>

EXHIBIT 4.4

FORM FOR 1994 STOCK OPTION
PLAN FOR NON-EMPLOYEE
DIRECTORS
--------------------------

STOCK OPTION AGREEMENT dated
as of , 19 , between
BLYTH INDUSTRIES, INC., a Delaware
corporation (the "Company"), and
, a member of
the Board of Directors of the
Company (the "Optionee", which term
as used herein shall be deemed to
include any successor to the
Optionee by will or by the laws of
descent and distribution, unless the
context shall otherwise require).

The Company desires, by affording the Optionee the right and option
(the "Option") to purchase shares of its Common Stock, $.02 par value (the
"Common Stock"), as hereinafter provided, to provide an incentive to the
Optionee to continue to work for the best interests of the Company and its
stockholders and to that end has adopted the Blyth Industries, Inc. 1994 Stock
Option Plan for Non-Employee Directors (the "Plan").

NOW, THEREFORE, in consideration of the mutual premises and
undertakings hereinafter set forth, the parties hereto agree as follows:

1. DEFINITIONS. As used herein, the following terms shall have the
respective meanings set forth below:

"Commencement Date" shall mean , 19 ;*

"Option Term" shall mean the period of 10 years from the
Commencement Date, or such shorter period as may be prescribed in Sections
6, 7 and 8 hereof; and

"Vested Shares" shall mean the number of Optioned Shares (as
defined in Section 2 hereof) which are subject to the exercise of the
Option at a particular time in accordance with Section 4 hereof.

2. GRANT OF THE OPTION. The Company hereby grants to the Optionee
the Option, from and after the Commencement Date, to

- -------------------
* The date on which the Option is granted.

<PAGE>

purchase all or any part of an aggregate of * shares (the "Optioned
Shares") of Common Stock on the terms and conditions hereinafter set forth.

3. EXERCISE PRICE. The purchase price of the Optioned Shares shall
be per Optioned Share (the "Exercise Price").**

4. TERMS OF THE OPTION. (a) The Option shall become exercisable in
full on the first anniversary of the Commencement Date.

(b) The Option shall be exercisable in whole at any time or in
part from time to time during the Option Term as to any or all Vested Shares;
PROVIDED, HOWEVER, that the Option must be exercised within the Option Term; and
PROVIDED FURTHER, HOWEVER, that except as provided in Sections 6, 7 and 8, the
Option may not be exercised unless at the time of exercise the Optionee shall be
a member of the Board of Directors of the Company. Neither the Optionee nor his
or her successors in interest shall have any rights of a stockholder with
respect to any Optioned Shares until such Optioned Shares shall be issued to him
or her upon the due exercise of the Option in accordance with the terms hereof.

5. RESTRICTION ON TRANSFER. Except as provided in Section 7, the
Option may not be transferred, pledged, assigned or hypothecated in any way by
the Optionee and may be exercised only by the Optionee. The Option shall not be
subject to execution, attachment or similar process. Any attempted assignment,
transfer, pledge, hypothecation or other disposition of the Option contrary to
the provisions hereof, and the levy of any execution, attachment or similar
process upon the Option, shall be null and void and without effect.

6. TERMINATION OF RELATIONSHIP. Except as provided in Sections 7 and
8, in the event the Optionee shall cease to be a member of the Board of
Directors of the Company, the Option, to the extent not theretofore exercised,
shall terminate after the passage of 30 days from the date of such termination,
but in no event after the expiration of the Option Term.

7. DEATH OF OPTIONEE. In the event of the death of the Optionee, the
Option may be exercised with respect to any or

- ------------------------
* 1,000 shares for options granted upon election to office; 500 shares for
options granted on January 1 of any year thereafter.

** The Exercise Price shall be the fair market value (as determined pursuant
to Section 6 of the Plan) of the shares on the date of grant.

-2-

<PAGE>

all Vested Shares not theretofore purchased upon prior exercise of the Option,
at any time within a period of 180 days after the death of the Optionee, but in
no event after the expiration of the Option Term, by the estate, legatee,
distributee or beneficiary of the Optionee or any of their respective legal
representatives to the same extent as the Option could have been exercised on
the date of death of the Optionee.

8. MERGER, CONSOLIDATION, SALE OF ASSETS, ETC., RESULTING IN A CHANGE
IN CONTROL. (a) In the event of a Change in Control (as hereinafter defined),
notwithstanding the provisions of Section 4, the Option shall become fully
exercisable if, within one year of such Change in Control, the Optionee shall
cease for any reason to be a member of the Board of Directors of the Company.
For purposes of this Agreement, a Change in Control of the Company shall be
deemed to have occurred if (i) there shall be consummated (x) any consolidation
or merger of the Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of the Common Stock would be converted
into cash, securities or other property, other than a merger of the Company in
which the holders of the Common Stock immediately prior to the merger have the
same proportionate ownership of common stock of the surviving corporation
immediately after the merger, or (y) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company; or (ii) the stockholders of the
Company approve any plan or proposal for the liquidation or dissolution of the
Company; or (iii) any 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")), shall become the beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act) of 30% or more of the outstanding Common Stock; or (iv)
during any period of two consecutive years, individuals who at the beginning of
such period constitute the entire Board of Directors shall cease for any reason
to constitute a majority thereof unless the election, or the nomination for
election by the Company's stockholders, of each new director was approved by a
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of the period.

(b) Any exercise of the Option permitted pursuant to Section
8(a) shall be made within 180 days of the Optionee's termination as a director
of the Company.

9. REORGANIZATION, MERGER, CONSOLIDATION, ETC. In the event that, at
any time after the date hereof, the outstanding shares of the Common Stock are
changed into or exchanged for a different number or kind of shares or other
securities of the Company or another corporation by reason of any
reorganization, merger, consolidation, recapitalization, reclassification, stock
split-up, combination of shares or dividend payable in capital stock, the Option
shall thereafter be exercisable for the kind

-3-

<PAGE>

and number of shares of stock or other securities of the Company or of the
corporation resulting therefrom to which the holder of the number of Optioned
Shares not theretofore purchased by the Optionee thereunder would have been
entitled thereupon. Such adjustment shall be made without change in the total
price applicable to the Optioned Shares not theretofore purchased by the
Optionee, but with a corresponding adjustment in the Exercise Price per Optioned
Share.

10. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE OPTIONEE. The
Optionee hereby confirms that the Optioned Shares, when issued to the Optionee
pursuant to the terms of this Agreement, will be issued subject to the
provisions, conditions and restrictions of this Agreement and agrees that in
consideration of the grant of the Option he or she will continue to serve as a
director of the Company during the term for which he or she was elected. In
addition, unless the Optioned Shares have been effectively registered under the
Securities Act of 1933, as amended (the "Securities Act"), the Optionee hereby
further represents, warrants and agrees as follows:

(a) that he or she will acquire any Optioned Shares for his or
her own account, for investment and not with a view to the distribution
thereof within the meaning of the Securities Act;

(b) that he or she understands that the Optioned Shares have not
been registered under the Securities Act by reason of their issuance by the
Company in a transaction exempt from the registration requirements of the
Securities Act; and that the Optioned Shares must be held by the Optionee
indefinitely unless a subsequent disposition thereof is registered under
the Securities Act or is exempt from such registration;

(c) that he or she further understands that the exemption from
registration afforded by Rule 144 (the provisions of which are known to the
Optionee) promulgated under the Securities Act depends on the satisfaction
of various conditions and that, if applicable, Rule 144 affords the basis
for sales under certain circumstances only in limited amounts; and

(d) that he or she will not transfer any of the Optioned Shares
acquired by him or her except pursuant to a registration statement filed
pursuant to the Securities Act or an exemption therefrom.

11. STOCK LEGEND. In order to assure compliance with the
restrictions upon transfer contained in this Agreement, the certificates
representing the Optioned Shares when issued, and each certificate issued in
exchange for or upon transfer of any of the Optioned Shares, shall, unless and
until the Optioned

-4-

<PAGE>

Shares shall have been registered under the Securities Act or be exempt from
registration thereunder, be stamped or otherwise imprinted with a legend in
substantially the following form:

"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. THE SHARES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE PLEDGED, HYPOTHECATED, SOLD OR TRANSFERRED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES
UNDER THE SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SAID ACT."

In addition, the Optionee hereby agrees that the Company may issue appropriate
stop transfer orders to the Company's transfer agents with respect to the
Optioned Shares.

12. EXERCISE OF OPTION. Subject to the terms and conditions of this
Agreement, the Option may be exercised by written notice to the Company, at its
principal executive office, which is now located at 100 Field Point Road,
Greenwich, Connecticut 06830, Attention: Secretary. Such notice shall state
the election to exercise the Option and the number of Optioned Shares with
respect to which the Option is being exercised, and shall be signed by the
person or persons so exercising the Option. Payment of the Exercise Price for
the Optioned Shares to be purchased shall be made (i) in cash or by official
bank or certified check payable to the Company, (ii) by delivery of stock
certificates (in negotiable form) representing shares of Common Stock that have
been owned of record by the Optionee for at least six months prior to the date
of exercise and that have a fair market value on the date of exercise
(determined in the manner set forth in Section 6 of the Plan as if the exercise
date were the Pricing Date (as defined therein)) equal to the product of (A) the
number of Optioned Shares which are being purchased pursuant to the exercise of
such Option, multiplied by (B) the applicable Exercise Price, (iii) (A) by
arrangements which are acceptable to the Committee whereby the Optionee delivers
irrevocable instructions to a broker to promptly deliver to the Company the
amount of sale proceeds from the sale of the Optioned Shares as is necessary to
pay the Exercise Price and, unless otherwise allowed by the Committee, any
applicable tax withholding obligation or (B) in compliance with any other
cashless exercise program authorized by the Company for use in connection with
the Plan at the time of such exercise, or (iv) by a combination of the methods
set forth in the foregoing clauses (i), (ii) and (iii) . The Company shall
issue and deliver a certificate or certificates representing such Optioned
Shares as soon as practicable (but in no event more than 30 days) after such
notice and payment are received or at such time, place and manner as may be
agreed upon by the Company and the person or persons exercising the Option. The
certificate or certificates representing the Optioned Shares as to which the

-5-

<PAGE>

Option shall have been so exercised shall be registered in the name of the
person or persons so exercising the Option, shall have placed thereon the
legend, if any, required by Section 11 and shall be delivered as aforesaid to or
upon the written order of the person or persons exercising the Option. In the
event that the Option shall be exercised pursuant to Section 7 by any person or
persons other than the Optionee, such notice shall be accompanied by appropriate
proof of the right of such person or persons to exercise the Option. All
Optioned Shares that shall be purchased upon the exercise of the Option as
provided herein shall be fully paid and nonassessable.

13. RESTRICTIONS ON ISSUE OF SHARES. Anything contained in this
Agreement to the contrary notwithstanding, the Company may delay the issuance of
Optioned Shares covered by the exercise of the Option and the delivery of a
certificate for such Optioned Shares until one of the following conditions shall
be satisfied:

(i) Optioned Shares with respect to which the Option has been
exercised are at the time of the issue or transfer of such Optioned Shares
effectively registered under applicable federal securities laws now in
force or hereafter amended; or

(ii) counsel for the Company shall have given an opinion, which
opinion shall not be unreasonably conditioned or withheld, that such
Optioned Shares are exempt from the registration under applicable federal
securities laws now in force or hereafter amended.

It is intended that all exercises of the Option shall be effective.
Accordingly, the Company shall use its best efforts to bring about compliance
with the above conditions within a reasonable time.

14. TAXES. The Optionee or such other person exercising the Option
in accordance herewith shall pay any and all taxes related to the exercise of
the Option, as such taxes become due. If requested by the Company, the Optionee
shall present evidence of such payment to the Company.

15. AGREEMENT SUBJECT TO PLAN. The Option granted hereby is subject
to the detailed provisions with respect thereto set forth in the Plan. Anything
contained herein to the contrary notwithstanding, in the event of a conflict
between any provision hereof and the provisions of the Plan, the provisions of
the Plan shall in all respects control.

16. NO WAIVER. No waiver of any breach or condition of this
Agreement shall be deemed to be a waiver of any other or subsequent breach or
condition, whether of like or different nature.

-6-

<PAGE>

17. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to
contracts made and to be performed wholly therein.

18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

19. ENTIRE AGREEMENT. This Agreement and the Plan constitute the
entire agreement between the parties with respect to the subject matter hereof,
and supersede all previously written or oral negotiations, commitments,
representations and agreements with respect thereto.

20. AMENDMENTS. This Agreement may not be modified, amended,
terminated or in any way changed, except by an agreement in writing signed by
the parties hereto.

-7-

<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Stock Option
Agreement as of the date first written above.

BLYTH INDUSTRIES, INC.

By:
---------------------------
Name:
Title:

OPTIONEE:

------------------------------
Name:
-------------------------

<PAGE>

EXHIBIT 10.1

CANDLE CORPORATION WORLDWIDE, INC.
FOURTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

Harris Trust and Savings Bank
Chicago, Illinois

Bank of America Illinois (formerly known as Continental Bank N.A.)
Chicago, Illinois

Ladies and Gentlemen:

We refer to the Amended and Restated Credit Agreement dated as of
January 31, 1994 currently in effect between you and us as amended by that
certain First Amendment dated as of March 28, 1994, that certain Second
Amendment dated as of September 13, 1994 and that certain Third Amendment dated
as of August 24, 1995 (such Credit Agreement as so amended being hereinafter
referred to as the "CREDIT AGREEMENT"). Capitalized terms used without
definition below shall have the same meanings herein as they have in the Credit
Agreement.

The Parent and the Borrowers hereby apply to you (the "LENDERS") to reduce
certain rates and fees relating to the Revolving Credit, to amend certain of the
financial covenants contained in the Credit Agreement and to make certain other
amendments to the borrowing arrangements between you and us.

Accordingly, this letter shall serve as an agreement between the Lenders,
the Parent and the Borrowers amending the Credit Agreement as hereinafter set
forth.

1. PRICING.

Upon the effectiveness of this Amendment as hereinafter set forth, the
Applicable LIBOR Margin shall be 0.40% until next adjusted in accordance with
the definition of such term. Accordingly, upon such effectiveness, the first
sentence of the definition of the term "APPLICABLE LIBOR MARGIN" appearing in
Section 5 of the Credit Agreement shall be amended and as so amended shall be
restated in its entirety to read as follows:

"APPLICABLE LIBOR MARGIN" MEANS 0.40%.

2. OTHER AMENDMENTS.

Upon the effectiveness of this Amendment as hereinafter set forth, the
Credit Agreement shall be and hereby is further amended as follows:

(a) REDUCED COMMITMENT FEE. The first sentence of subsection (a) of
Section 3.1 of the Credit Agreement shall be amended and as so amended
shall be restated in its entirety to read as follows:

<PAGE>

"FOR THE PERIOD FROM THE DATE HEREOF TO AND INCLUDING THE
REVOLVING CREDIT TERMINATION DATE, THE COMPANY SHALL PAY TO THE AGENT
FOR THE ACCOUNT OF THE LENDERS A COMMITMENT FEE AT THE RATE OF 1/8 OF
1% PER ANNUM (COMPUTED ON THE BASIS OF A YEAR OF 360 DAYS AND THE
ACTUAL NUMBER OF DAYS ELAPSED) ON THE AVERAGE DAILY UNUSED PORTION OF
THE REVOLVING CREDIT COMMITMENTS AVAILABLE HEREUNDER."

(b) TERMINATION DATE EXTENSION. The definition of Revolving Credit
Termination Date appearing in Section 5 of the Credit Agreement shall be
amended and as so amended and restated shall read as follows:

""REVOLVING CREDIT TERMINATION DATE" MEANS (X) JULY 21,
1998, OR (y) IF EARLIER, SUCH EARLIER DATE ON WHICH THE REVOLVING
CREDIT COMMITMENTS ARE TERMINATED IN WHOLE PURSUANT TO SECTIONS 3.4,
9.2 OR 9.3 HEREOF, OR (z) IF LATER, SUCH LATER DATE TO WHICH THE
REVOLVING CREDIT COMMITMENTS ARE EXTENDED PURSUANT TO SECTION 11.14
HEREOF."

(c) TOTAL FUNDED DEBT DEFINED. A definition of "TOTAL FUNDED DEBT"
shall be inserted into Section 5 of the Credit Agreement in its appropriate
alphabetical position and shall read as follows:

"TOTAL FUNDED DEBT" means, at any time the same is to be
determined, the aggregate of all Indebtedness of the Parent and its
Subsidiaries at such time, PLUS all Indebtedness of any other Person
which is directly or indirectly guaranteed by the Parent or any of its
Subsidiaries or which the Parent or any of its Subsidiaries has agreed
(contingently or otherwise) to purchase or otherwise acquire or in
respect of which the Parent or any of its Subsidiaries has otherwise
assured a creditor against loss.

(d) LEVERAGE RATIO REMOVED. Section 8.7 of the Credit Agreement
shall be amended and as so amended shall be restated in their entirety to
read as follows:

"SECTION 8.7. [INTENTIONALLY OMITTED]."

(e) TANGIBLE NET WORTH. Section 8.8 of the Credit Agreement shall be
amended and as so amended shall be restated in its entirety to read as
follows:

"SECTION 8.8. ADJUSTED TANGIBLE NET WORTH. THE PARENT
WILL, AS OF THE LAST DAY OF EACH FISCAL QUARTER OF THE PARENT,
MAINTAIN ADJUSTED TANGIBLE NET WORTH AT NOT LESS THAN THE MINIMUM
REQUIRED AMOUNT. FOR PURPOSES OF THIS SECTION 8.8, THE TERM "MINIMUM
REQUIRED AMOUNT" SHALL MEAN $120,000,000 PLUS (BUT ONLY IF POSITIVE)
FIFTY PERCENT (50%) OF NET INCOME FOR THE PERIOD (TAKEN AS A SINGLE
ACCOUNTING PERIOD) FROM AND INCLUDING JANUARY 31, 1996 THROUGH THE
DATE OF SUCH DETERMINATION."

(f) NEW DEBT TO EARNINGS RATIO. Section 8.9 of the Credit Agreement
is hereby amended and as so amended and restated shall read as follows:

-2-

<PAGE>

"SECTION 8.9. DEBT TO EARNINGS RATIO. THE PARENT SHALL
NOT, AS OF THE LAST DAY OF EACH FISCAL QUARTER OF THE PARENT, PERMIT
THE RATIO OF TOTAL FUNDED DEBT FOR THE FOUR FISCAL QUARTERS OF THE
PARENT THEN ENDED TO EBITDA OF THE PARENT FOR THE SAME FOUR FISCAL
QUARTERS THEN ENDED (THE "DEBT TO EARNINGS RATIO") TO BE MORE THAN
1.00 TO 1.00."

(g) NO SPECIFIC RESTRICTION ON DEBT. Section 8.11 of the Credit
Agreement shall be and hereby is deleted in its entirety.

(h) AI. The parties hereto acknowledge and agree that AI Inc. is no
longer a party to the Credit Agreement by virtue of its merger into
Aromatic Industries, Inc. in February of 1994, with Aromatic being the
corporation surviving such merger.

3. CONDITIONS PRECEDENT. The effectiveness of this Amendment is subject
to the satisfaction of all of the following conditions precedent:

(a) The Parent, the Borrowers and the Lenders shall have executed
this Amendment.

(b) Legal matters incident to the execution and delivery of this
Amendment shall be satisfactory to the Lenders and their counsel.

(c) The Parent and each Borrower shall be in compliance with the
terms of the Credit Agreement as amended hereby and no Default or Event of
Default shall have occurred or be continuing.

(d) The Agent shall have received copies (executed or certified, as
may be appropriate) of all legal documents or proceedings taken in
connection with the execution and delivery of this Amendment to the extent
the Lenders or their counsel may reasonably request.

4. REPRESENTATIONS REAFFIRMED. In order to induce the Lenders to execute
and deliver this Agreement, the Parent and each Borrower hereby represent to the
Lenders that as of the date hereof and as of the time that this Amendment
becomes effective, each of the representations and warranties set forth in
Section 6 of the Credit Agreement are and shall be true and correct (except that
the representations contained in Section 6.4 shall be deemed to refer to the
most recent financial statements of the Borrower delivered to the Lenders
pursuant to Section 8.5 of the Credit Agreement) and no Event of Default or
Default shall have occurred or be continuing. The Guarantors confirm their
Guaranties remain in full force and effect.

5. MISCELLANEOUS. This Amendment may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which when so executed shall be an original but all of which shall constitute
one and the same instrument. Except as specifically amended and modified
hereby, all of the terms and conditions of the Credit Agreement shall stand and
remain unchanged and in full force and effect. No reference to this Amendment
need be made in any note, instrument or other document making reference to the
Credit Agreement, any reference to the Credit Agreement in any such note,
instrument

-3-

<PAGE>

or other document to be deemed to be a reference to the Credit Agreement as
amended hereby. The Company confirms its agreement to pay the reasonable fees
and disbursements of Messrs. Chapman and Cutler, counsel to the Agent, and
Messrs. Mayer, Brown & Platt, counsel to Bank of America Illinois, in each case
in connection with the preparation, execution and delivery of this Amendment and
the transactions and documents contemplated hereby. This instrument shall be
construed and governed by and in accordance with the laws of the State of
Illinois (without regard to principles of conflicts of laws).

-4-

<PAGE>

Dated as of this 18th day of July, 1996.

CANDLE CORPORATION WORLDWIDE, INC.
BLYTH INDUSTRIES, INC.
CANDLE CORPORATION OF AMERICA
PARTYLITE GIFTS, INC.
AROMATIC INDUSTRIES, INC.

By /s/ Howard E. Rose
--------------------------------
Howard E. Rose
Vice President of Each

PARTYLITE GIFTS LIMITED, CANADA

By /s/ Howard E. Rose
--------------------------------
Its Vice President
-------------------------------

CANDLE CORPORATION OF AMERICA
HONGKONG LIMITED

By /s/ Howard E. Rose
--------------------------------
Its Vice President
-------------------------------

PARTYLITE IRELAND, LTD.

By /s/ Howard E. Rose
--------------------------------
Its Vice President
-------------------------------

PARTYLITE GMBH

By /s/ Howard E. Rose
--------------------------------
Its Vice President
-------------------------------

-5-

<PAGE>

Accepted and agreed to as of the date last above written.

HARRIS TRUST AND SAVINGS BANK,
individually and as Agent

By /s/ Mary Lou Bartlett
-------------------------------
Its Vice President

BANK OF AMERICA ILLINOIS

By /s/ Marcia Clausen
--------------------------------
Its Vice President

-6-

<PAGE>

EXHIBIT 11

BLYTH INDUSTRIES, INC.
COMPUTATIONS OF EARNINGS PER COMMON SHARE

I. Six months ended July 31: 1996 1995
-------------------------
<S> <C> <C>
Average number of shares outstanding during the period 30,716,205 28,259,818
Common equivalent shares:
Shares issuable under outstanding options which are dilutive 569,200 438,800
Shares which could have been purchased based upon the
market value for the period 237,633 304,920
-------------------------
331,567 133,880

Weighted average number of common
and common equivalent shares outstanding 31,047,772 28,393,698

Net earnings $13,856,000 $7,715,000

Earnings per common and common equivalent share $0.45 $0.27

II. Three months ended July 31: 1996 1995
--------------------------

Average number of shares outstanding during the period 30,722,256 28,294,954
Common equivalent shares:
Shares issuable under outstanding options which are dilutive 569,200 438,800
Shares which could have been purchased based upon the
market value for the period 219,452 265,802
--------------------------
349,748 172,998
Weighted average number of common
and common equivalent shares outstanding 31,072,004 28,467,952

Net earnings $6,608,000 $3,609,000

Earnings per common and common equivalent share $0.21 $0.13
</TABLE>

<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheet at July 31, 1996 and the Consolidated Statement
of Earnings, Stockholders' Equity and Cash Flows for the six months ended
July 31, 1996, and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-START> FEB-01-1996
<PERIOD-END> JUL-31-1996
<CASH> 3,627
<SECURITIES> 12,457
<RECEIVABLES> 29,541
<ALLOWANCES> 695
<INVENTORY> 102,951
<CURRENT-ASSETS> 148,685
<PP&E> 95,672
<DEPRECIATION> 24,627
<TOTAL-ASSETS> 237,740
<CURRENT-LIABILITIES> 47,234
<BONDS> 0
0
0
<COMMON> 615
<OTHER-SE> 157,045
<TOTAL-LIABILITY-AND-EQUITY> 237,740
<SALES> 206,828
<TOTAL-REVENUES> 206,828
<CGS> 92,669
<TOTAL-COSTS> 92,669
<OTHER-EXPENSES> 90,264
<LOSS-PROVISION> 371
<INTEREST-EXPENSE> 1,063
<INCOME-PRETAX> 23,266
<INCOME-TAX> 9,380
<INCOME-CONTINUING> 13,886
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,856
<EPS-PRIMARY> 0.45
<EPS-DILUTED> 0.45

</TABLE>

<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains amended summary financial information extracted from
the Consolidated Balance Sheet at April 30, 1996 and the Consolidated
Statement of Earnings, Stockholders' Equity and Cash Flows for the three
months ended April 30, 1996, and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-START> FEB-01-1996
<PERIOD-END> APR-30-1996
<CASH> 10,464
<SECURITIES> 34,110
<RECEIVABLES> 28,567
<ALLOWANCES> 712
<INVENTORY> 84,907
<CURRENT-ASSETS> 158,565
<PP&E> 86,524
<DEPRECIATION> 22,830
<TOTAL-ASSETS> 240,215
<CURRENT-LIABILITIES> 56,394
<BONDS> 0
0
0
<COMMON> 614
<OTHER-SE> 150,175
<TOTAL-LIABILITY-AND-EQUITY> 240,215
<SALES> 106,338
<TOTAL-REVENUES> 106,338
<CGS> 47,863
<TOTAL-COSTS> 47,863
<OTHER-EXPENSES> 46,103
<LOSS-PROVISION> 180
<INTEREST-EXPENSE> 534
<INCOME-PRETAX> 12,147
<INCOME-TAX> 4,897
<INCOME-CONTINUING> 7,250
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,248
<EPS-PRIMARY> 0.23
<EPS-DILUTED> 0.23

</TABLE>