Exhibit 10.23
THE YANKEE CANDLE COMPANY,
INC.
AMENDED AND
RESTATED
EXECUTIVE DEFERRED COMPENSATION
PLAN
Amended and Restated
as of December 23, 2008
THE YANKEE CANDLE COMPANY,
INC.
EXECUTIVE DEFERRED COMPENSATION
PLAN
ARTICLE I - PURPOSE; EFFECTIVE
DATE
1.1 Purpose . The
purpose of this YANKEE CANDLE COMPANY AMENDED AND RESTATED
EXECUTIVE DEFERRED COMPENSATION PLAN (hereinafter, the
“Plan”) is to permit a select group of management or
highly compensated employees of The Yankee Candle Company, Inc.
(and its selected subsidiaries and/or affiliates) to defer the
receipt of income which would otherwise become payable to them. It
is intended that this Plan, by providing these eligible employees
an opportunity to defer the receipt of income, will assist in the
retaining and attracting individuals of exceptional ability and by
providing an additional opportunity to save for retirement beyond
Code limitations imposed on qualified retirement plans. This Plan
is intended to be “unfunded” for purposes of the
Employee Retirement Income Security Act of 1974, as amended
(“ERISA”).
1.2 Effective Date .
This Plan was originally adopted by the Company effective as of
October 1, 1996 and amended on our about May 28, 2004 and
again on January 1, 2005. The Plan, as amended and restated
herein, shall be effective as of December ,
2008 (the “Effective Date”). It is the intent that all
of the amounts deferred and benefits provided under this Plan will
comply with the terms of Section 409A of the Code and
interpretive guidance issued thereunder.
1.3 Unfunded Plan .
This Plan is an unfunded top-hat plan maintained primarily to
provide deferred compensation benefits for a “select group of
management or highly-compensated employees” within the
meaning of Sections 201, 301, and 401 of ERISA, and therefore is
exempt from the provisions of Parts 2, 3 and 4 of Title I of
ERISA.
ARTICLE II -
DEFINITIONS
For the purpose of this Plan, the
following terms shall have the meanings indicated, unless the
context clearly indicates otherwise:
2.1 Account(s) .
“Account(s)” means the notional account or accounts
maintained on the books of the Company used solely to calculate the
amount payable to each Participant under this Plan and shall not
constitute a separate fund of assets. Account(s) shall be deemed to
exist from the time amounts are first credited to such Account(s)
until such time that the entire Account balance has been
distributed in accordance with this Plan. The Accounts available
for each Participant shall be identified as:
(a) Deferral Account; and
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(b) Company Matching Contribution
Account.
2.2 Beneficiary .
“Beneficiary” means the person, persons or entity as
designated by the Participant, entitled under Article VI to receive
any Plan benefits payable after the Participant’s
death.
2.3 Board .
“Board” means the Board of Directors of the
Company.
2.4 Change of Control
. “Change of Control” means:
(a) a change in the ownership or
effective control of the Company, or in the ownership of a
substantial portion of the assets of the Company, as defined and
determined under Section 409A(a)(2)(A)(v) of the Code and
Treasury Regulation Section 1.409A-3(i)(5). Without in any way
limiting the scope of the preceding sentence, a Change of Control
shall be deemed to occur on the date upon which one of the
following events occurs:
i. any one person (as such term is
used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), or more than
one person acting as a group (as determined under Treasury
Regulation Section 1.409A-3(i)(5)(v)(B)), acquires ownership
of stock of the Company that, together with stock held by such
person or group, constitutes more than 50% of either the total fair
market value or total voting power of the stock of the Company.
However, if any one person, or more than one person acting as a
group, is considered to own more than 50% of the total fair market
value or total voting power of the stock of the Company, the
acquisition of additional control of the Company by the same person
or persons is not considered to cause a change of control of the
Company); or
ii. any one person (as such term is
used in the Exchange Act), or more than one person acting as a
group (as determined under Treasury Regulation
Section 1.409A-3(i)(5)(v)(B)), acquires (or has acquired
during the 12-month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of the
Company possessing 35% or more of the total voting power of the
Company. However, if any one person, or more than one person acting
as a group, is considered to own more than 35% of the total voting
power of the stock of the Company, the acquisition of additional
control of the Company by the same person or person is not
considered to cause a change in control of the Company);
or
iii. a majority of members of the
Board is replaced during any 12-month period by directors whose
appointment or election is not endorsed by a majority of the
members of the Board prior to the date of the appointment or
election; or
any one person (as such term is used
in the Exchange Act), or more than one person acting as a group (as
determined under Treasury Regulation
Section 1.409A-3(i)(5)(v)(B)), acquires (or has acquired
during the 12-month period ending on the date of the most recent
acquisition by such person or persons) assets from the Company that
have a total gross fair market value equal to or more than 40% of
the total gross fair market value of all of the assets of the
Company immediately prior to such acquisition or acquisitions. For
this purpose, gross fair market value means the value of the assets
of the Company, or the value of the assets being disposed of,
determined without regard to any liabilities associated with such
assets.
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2.5 Code .
“Code” means the Internal Revenue Code of 1986, as
amended, and any successor thereto.
2.6 Company .
“Company” means The Yankee Candle Company, Inc., a
Massachusetts corporation, and any directly or indirectly
affiliated subsidiary corporations.
2.7 Compensation .
“Compensation” means wages as defined in
Section 3401(a) of the Code and all other payments of
compensation to a Participant by the Company (in the course of the
Company’s trade or business) for which the Participant is
required to furnish the Participant a written statement under
Section 6041(d) and 6051(a)(3) of the Code, excluding
reimbursements or other expense allowances, fringe benefits (cash
and non-cash), moving expenses, deferred compensation and welfare
benefits, but including amounts that are not includable in the
gross income of the Participant under a salary reduction agreement
by reason of the application of Section 125, 402(a)(8),
402(h), or 403(b) of the Code. Compensation must be determined
without regard to any rules under Section 3401(a) of the Code
that limit the remuneration included in wages based on the nature
or location of the employment or the services performed.
Compensation shall generally be based on the amount that would have
been actually paid to the Participant during the Plan Year but for
an election under Article III.
2.8 Compensation
Committee . “Compensation Committee or
Committee” means the Compensation Committee appointed by the
Board to administer the Plan pursuant to Article VII. Further, the
Compensation Committee may designate a sub-Committee to administer
the Plan.
2.9 Deferral Election
. “Deferral Election” means an irrevocable written
commitment made by a Participant to defer a portion of his/her
Compensation as set forth in Article III, and as permitted by the
Committee in its sole discretion. The Deferral Election shall apply
to each payment of Compensation and/or Performance-Based
Compensation payable to a Participant. Such designation shall be
made in the form of a whole percentage or an exact stated dollar
amount. Such Deferral Election shall be made on an Election Form
within the period of time set forth in Sections 3.2 and 3.3
herein.
2.10 Deferral Period .
“Deferral Period” means each calendar year, except that
if a Participant first becomes eligible after the beginning of a
calendar year, the initial Deferral Period shall be the 30-day
period commencing on the date the Participant first becomes
eligible to participate in this Plan, provided that the initial
deferral election may apply only to compensation for services
performed after the date of the election. For purposes of deferrals
related to Participant’s annual bonus or other
Performance-Based Compensation, “Deferral Period” shall
mean the Company’s fiscal year.
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2.11 Determination
Date . “Determination Date” means each business
day.
2.12 Disability .
“Disability” means the Participant is: (i) unable
to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a
continuous period of not less than 12 months, or (ii) by
reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving
income replacement or other disability benefits for a period of not
less than 3 months under an accident and health plan covering
employees of the participant’s employer.
2.13 Employee .
“Employee” means any employee of the
Company.
2.14 ERISA .
“ERISA” means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
2.15 Financial
Hardship . “Financial Hardship” means the
occurrence of any of the following events:
(a) a severe financial hardship to
the Participant resulting from an illness of accident of the
Participant, the Participant’s spouse, a Beneficiary, of the
Participant’s dependent (as defined in Section 152 of
the Code, without regard to Sections 152(b)(1), (b)(2), and
((d)(1)(B);
(b) loss of the Participant’s
property due to casualty (including the need to rebuild a home
following damage to a home not otherwise covered by insurance, for
example, not as a result of a natural disaster); or
(c) other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond
the control of the Participant, which may include, if applicable,
(x) the imminent foreclosure of or eviction from the
Participant’s primary residence, (y) the need to pay for
medical expenses or funeral expenses of the Participant’s
spouse, a Beneficiary, or the Participant’s dependent (as
defined in Section 152 of the Code without regard to
Section 152 (b)(1), (b)(2), and (d)(1)(B). Except as otherwise
provided in this clause (iii), the purchase of a home and the
payment of college tuition are not Financial Hardship.
The determination of whether a
Financial Hardship exists shall be subject to and determined by the
Committee after addressing the facts and circumstances of each
case, as required by Treasury Regulation
Section 1.409A-3(i)(3)(i).
2.16 Interest .
“Interest” means the amount credited to or charged
against a Participant’s Account(s) on each Determination
Date, which shall be based on the Valuation Funds chosen by the
Participant as provided in Section 2.24, below and in a manner
consistent with Section 4.3, below. Such credits or charges to
a Participant’s Account may be either positive or negative to
reflect the increase or decrease in value of the Account in
accordance with the provisions of this Plan.
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2.17 Company Matching
Contribution . “Company Matching Contribution”
means the annual contribution made by the Company to the eligible
Participant’s Company Matching Contribution Account as
provided for in Section 4.4, below.
2.18 Performance-Based
Compensation. “Performance-Based Compensation”
means Compensation the amount of which, or the entitlement to which
is contingent on the satisfaction of pre-established organizational
or individual performance criteria that relate to a particular
Performance Period and are not certain to be met at the time the
Deferral Election is made.
2.19 Performance Period
. “Performance Period” means a continuous period of
service with the Company comprising one entire Plan Year with
respect to which Performance-Based Compensation is
earned.
2.20 Participant .
“Participant” means any individual who is eligible,
pursuant to Section 3.1, below, to participate in this Plan,
and who has elected to defer Compensation under this Plan in
accordance with Article III, below. Such individual shall remain a
Participant in this Plan for the period of deferral, or credit, and
until such time as all benefits payable under this Plan have been
paid in accordance with the provisions hereof.
2.21 Plan .
“Plan” has the meaning ascribed to it in
Section 1.1, above.
2.22 Plan Year .
“Plan Year” means the calendar year.
2.23 Termination of
Employment . A “Termination of Employment”
occurs where the Participant ceases performing any bona fide
services for the Company, irrespective of whether the Participant
is receiving or scheduled to receive salary continuation,
severance, employee benefits or similar payments or benefits
following the cessation of services.
2.24 Valuation Funds .
“Valuation Funds” means one or more of the hypothetical
investment funds or indices managed by an investment manager that
are selected by the Committee. These Valuation Funds are used
solely to calculate the Interest that is credited to each
Participant’s Account(s) in accordance with Article IV,
below, and does not represent, nor should it be interpreted to
convey any beneficial interest or ownership on the part of the
Participant in any asset or other property of the Company.
Participants may allocate their Account(s) between Valuation Funds.
Exhibit A attached hereto sets forth the available Valuation Funds
which may be amended from time to time in the sole and absolute
discretion of the Committee.
ARTICLE III - ELIGIBILITY AND
PARTICIPATION
3.1 Eligibility and
Participation .
(a) Eligibility .
Employees holding the following positions with the Company and who
are a member of the Company’s Senior Leadership Team, and any
named Employees designated by the Committee by special vote as
eligible or ineligible, are eligible to participate in the
Plan:
(i) Chief Executive
Officer;
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(ii) President;
(iii) Senior Vice President;
and
(iv) Vice President.
(For avoidance of doubt, Directors
who qualify as highly compensated employees are not eligible to
participate in the Plan and have never been eligible to participate
in the Plan at any time.)
(b) Participation . An
individual’s participation in the Plan shall be effective
upon the first day of the month following notification to the
individual by the Committee or its designee of his/her eligibility
to participate; provided the individual has completed and submitted
an Enrollment Form and Allocation Form, as both are defined below
in Section 3.3, to the Committee no later than fifteen
(15) days prior to the beginning of the Deferral Period;
otherwise, the individual shall become a Participant in the Plan as
of the first day of the Plan Year for which he or she has filed the
aforementioned forms.
3.2 First-Year
Participation . When
an individual first becomes eligible to participate in this Plan, a
Deferral Election may be submitted to the Committee within thirty
(30) days after the Committee notifies the individual of
eligibility to participate. Such Deferral Election will be
effective only with regard to Compensation earned and payable
following submission of the Deferral Election to the
Committee.
3.3 Form of Deferral
Election . A
Participant may irrevocably elect to make a Deferral Election no
later than December 31 of the Plan Year prior to the beginning
of the Deferral Period by submitting the enrollment form permitted
by the Committee (the “Enrollment Form”). A Deferral
Election with respect to any bonus or Performance-Based
Compensation which is based on services performed over a period of
at least twelve (12) months shall be made no later than six
(6) months prior to the end of such performance period,
provided that: (i) the election to defer is made before the
compensation has become readily ascertainable and (ii) the
Participant was employed at the time the performance criteria were
established. The Deferral Election shall specify the
following:
(a) Deferral Amounts .
A Deferral Election shall be made with respect to each payment of
Compensation payable by the Company to a Participant during the
Deferral Period. The Participant shall set forth the amount of his
or her salary to be deferred as a whole percentage amount of
Compensation, and with respect to the deferral of bonus
Compensation or Performance-Based Compensation, a stated dollar
amount or a whole percentage amount above a stated dollar
amount.
(b) Allocation to Valuation
Funds . The Participant shall specify in a separate form
(known as the “Allocation Form”) filed with the
Committee, the Participant’s initial allocation of the
amounts deferred into his or her Account(s) among the various
available Valuation Funds.
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(c) Maximum Deferral .
The maximum amount of Compensation that may be deferred shall be no
more than one hundred percent (100%) of base salary and one
hundred percent (100%) of annual bonus or Performance-Based
Compensation.
3.4 Period of
Commitment . Any Deferral Election made by a Participant
with respect to Compensation shall remain in effect for the next
succeeding Deferral Period, and shall remain in effect for all
future Deferral Periods unless revoked or amended in writing by the
Participant and delivered to the Committee no later than fifteen
(15) days prior to the beginning of a subsequent Deferral
Period, except that if a Participant suffers a Disability or
terminates employment with Company prior to the end of the Deferral
Period, the Deferral Period shall end as of the date of Disability
or Termination of Employment. Furthermore, a Deferral Election may
be temporarily revoked by operation of Section 5.3,
below.
3.5 Modification of Deferral
Election . Except as provided in Sections 3.4, above, and
5.3 below, a Deferral Election shall be irrevocable by the
Participant during a Deferral Period.
3.6 Change in Status .
If the Committee determines that a Participant’s employment
performance is no longer at a level that warrants reward through
participation in this Plan, but does not terminate the
Participant’s em
