8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 24, 2006

The Yankee Candle Company, Inc.

(Exact Name of Company as Specified in Charter)

Massachusetts	001-15023	04 259 1416
(State or Other Juris- diction of Incorporation	(Commission File Number)	(IRS Employer Identification No.)

16 Yankee Candle Way South Deerfield, Massachusetts	01373
(Address of Principal Executive Offices)	(Zip Code)

Company’s telephone number, including area code: (413) 665-8306

(Former Name or Former Address, if Changed Since Last Report)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Company under any of the following provisions (see General Instruction A.2. below):

     ¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

     ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

     ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

     ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 1.01. Entry into a Material Definitive Agreement.
	Item 9.01 Financial Statements and Exhibits
SIGNATURE
EXHIBIT INDEX
Ex-99.1 Management Incentive Plan for the 2006 Fiscal Year
Ex-99.2 2006 Director Compensation Plan

Item 1.01. Entry into a Material Definitive Agreement.

Management Incentive Plan for the 2006 Fiscal Year

     On February 24, 2006, the Compensation Committee of the Board of Directors (the “Compensation Committee”) of The Yankee Candle Company, Inc. (the “Company”) adopted the Company’s Management Incentive Plan for the 2006 Fiscal Year (the “2006 Plan”). The Company’s internal Salary Committee will administer the 2006 Plan and will determine those employees eligible to participate, which may include the Company’s executive officers. At the beginning of the fiscal year, the Salary Committee (or, with respect to the Company’s executive officers, the Compensation Committee) assigns each participant an incentive award target, expressed as a percentage of the participant’s base salary, based on the participant’s job classification, responsibilities and market practice. The amount of the incentive award target actually paid to a participant will be determined following the end of fiscal 2006, based on three factors:

• the Company’s diluted earnings per share for fiscal 2006, as compared to the target established by the Compensation Committee;

• the segment profit of the participant’s assigned business unit (i.e., the Company’s Retail or Wholesale Division), if applicable, as compared to the target established by the Compensation Committee; and

• an assessment of the participant’s performance with respect to his or her individual performance objectives as established by the Salary Committee (or, with respect to the Company’s executive officers, by the Compensation Committee).

     No bonus is paid under the terms of the Plan if either diluted earnings per share or, with respect to a participant assigned to a business unit, the applicable business unit profitability falls below the minimum thresholds set by the Compensation Committee, regardless of the Company’s or the individual’s performance with respect to the other two factors.

     The 2006 incentive award targets for the Company’s “named executive officers” (as defined under SEC rules) based on 2005 compensation, as a percentage of each such officer’s salary, are:

	Incentive Award
Name	Target
Craig W. Rydin		100	%
Harlan M. Kent		75	%
Bruce Besanko		55	%
Stephen Farley		50	%
Paul J. Hill		50	%

     A copy of the 2006 Plan is filed as an exhibit to this Current Report on Form 8-K and the above summary is qualified by reference to the 2006 Plan.

2006 Director Compensation Plan

     On February 24, 2006, the Compensation Committee approved and adopted the 2006 Director Compensation Plan (the “2006 Director Plan”). Under the 2006 Director Plan, non-employee directors will be paid, subject to the terms of the 2006 Director Plan, (i) a retainer of $30,000 per annum, (ii) a fee equal to $2,250 for each meeting of the Board which the eligible director personally attended, and $1,125 for each meeting of the Board in which the eligible director participated by telephone, and (iii) a fee equal to $1,250 for each committee meeting in which the eligible director participates, if attending in person, and $625 if the eligible director participated by telephone. The Chair of the Audit Committee will receive an additional $4,000 retainer in recognition of such service, while the Chairs of the Compensation and Nominating and Governance Committees will receive $2,000 each.

     In addition to the foregoing cash compensation, the 2006 Director Plan provides for each non-employee director to receive (i) upon initial election, an option to purchase 20,000 shares of the Company’s common stock, and (ii) annually, an option to purchase 1,250 shares of the Company’s common stock for each regularly scheduled Board meeting attended by such director during the previous calendar year, up to a maximum of 5,000 shares per year, provided that the first such grant will not be made until 2007 based on attendance at Board meetings during 2006. Such options will be granted pursuant to a shareholder-approved stock incentive plan of the Company, will have an exercise price equal to the closing price of the Company’s common stock on the New York Stock Exchange on the date immediately preceding the date of grant and will vest as to 25% of the underlying shares on each anniversary of the date of grant.

     The 2006 Director Plan will remain in effect until amended or replaced.

     A copy of the 2006 Director Plan is filed as an exhibit to this Current Report on Form 8-K and the above summary is qualified by reference to the 2006 Director Plan.

Item 9.01 Financial Statements and Exhibits

     (d) Exhibits

99.1	Management Incentive Plan for the 2006 Fiscal Year
99.2	2006 Director Compensation Plan

SIGNATURE

     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 hereunto duly authorized.

	THE YANKEE CANDLE COMPANY, INC.
Date: March 2, 2006	By:	/s/ James A. Perley
		James A. Perley
		Senior Vice President, General Counsel

EXHIBIT INDEX

Exhibit No.	Description
99.1	Management Incentive Plan for the 2006 Fiscal Year.
99.2	2006 Director Compensation Plan

EX-99.1

Exhibit 99.1
2006 Management Incentive Plan

The Yankee Candle Company, Inc.
MANAGEMENT INCENTIVE PLAN
For the 2006 Fiscal Year
For Participants of the Executive Compensation Plan

Overview

The Yankee Candle Company, Inc. (“Yankee” or the “Company”) believes in providing financial incentives to management employees who have significant responsibility for sales, profit and operations. Pursuant to this philosophy, Yankee has established a Management Incentive Plan (“The Plan”) for the 2006 fiscal year in order to meet the following objectives:

• Maintain a competitive total compensation program which motivates and rewards high levels of performance.

• Recognize and reward efforts and contributions made to the Company’s success.

• Recognize and reward the achievement of team and/or individual goals.

• Recognize and reward the achievement of the Company’s overall goals.

Administration

The Plan is administered by the Company’s Salary Committee. Any amendment, exception, interpretation, etc. must be approved in writing by the Salary Committee and the Compensation Committee of the Board of Directors. The current Salary Committee members are:

Chairman and Chief Executive Officer
Senior Vice President and Chief Financial Officer
Senior Vice President, Human Resources
Director, Benefits and Compensation

The Plan and Company financial objective(s) are established at the beginning of the fiscal year and provided to participants after approval by the Compensation Committee of the Board of Directors in its sole discretion. Key Performance Objectives, if any, are established by the Salary Committee, in its sole discretion.

Each participant will have an assigned incentive award target equal to a specific percentage of salary during the fiscal year. For this purpose, salary is defined as actual base pay paid by the Company to the participant during the fiscal year. Each participant will be informed of his or her percentage, which is generally assigned based on the individual’s job classification,

responsibilities and market practice, but is in all instances subject to the discretion of the Salary Committee.

Incentive payments will be calculated based on actual results achieved compared to objective(s) for fiscal 2006. The Company intends that incentive payments for fiscal 2006 will be paid by March 15, 2007.

Being a participant in the Plan is not a contract for, nor offer of employment for any particular time period, nor any other agreement on the part of management of the Company for such employment and shall in no event alter the “at will” nature of employment with the Company.

The Plan is subject to applicable Government and economic controls in effect during its operation; therefore, payments may be subject to limitations.

Yankee reserves the right to amend, modify and/or discontinue The Plan in whole or in part at any time and for any reason with or without notice to the participants.

Eligibility

The Salary Committee is responsible in its sole discretion for identifying and approving positions eligible to participate. Eligibility is subject to the following additional criteria:

• Active employment in an eligible position during fiscal 2006; and the employee must be actively employed by the Company through the last day of fiscal 2006.

• Employees who transfer into or out of an eligible position during the fiscal year will receive a prorated incentive award based on the number of days of active employment in an eligible position.

• Employees who are hired into an eligible position during the fiscal year will receive a prorated incentive award based on the number of days of active employment in the eligible position.

• Employees who cease employment due to death or permanent disability will receive a prorated incentive award based on the number of days of active employment in an eligible position.

• Incentive awards are not vested. Notwithstanding anything to the contrary contained herein, employees whose employment is terminated, voluntarily or involuntarily, for any reason other than permanent disability or death prior to the end of the fiscal year are not eligible to receive an award.

• Employees whose employment is terminated “for cause” prior to payment of the 2006 fiscal year incentive are not eligible. For purposes of this plan, the term “Cause” shall include any of the following events:

(a) Gross negligence, willful failure to perform or willful malfeasance in performance of the employee’s duties and responsibilities, including those referenced hereunder;

(b)	Conviction of a felony or of a lesser crime involving moral turpitude or acts of dishonesty;
(c)	Breach of a fiduciary duty of loyalty to the Company or the diversion by the employee of any corporate assets, commitments, service or opportunities for his or her personal gain;
(d)	Fraud, misrepresentation, theft or embezzlement of Company assets or the intentional violation of law or Company policy;
(e)	Insubordination or willful failure to follow reasonable instructions from supervisors; or
(f)	Other conduct that is materially harmful to the business, interests or reputation of the Company.

Fiscal 2006 Provisions

The Compensation Committee will establish the Company’s performance objectives, including the diluted earnings per share and business unit segment profit objectives, at the beginning of the fiscal year in its discretion. All references to “diluted earnings per share” shall refer to diluted earnings per share for the 2006 fiscal year as reported by the Company without giving effect to any impact on such diluted earnings per share resulting from any repurchase by the Company in 2006 of any shares of its common stock. All references to “business unit segment profit” shall mean the segment profit (profit of the applicable business unit before allocation of General and Administrative expenses) as reported by the Company with respect to the Retail and Wholesale business units.

For fiscal 2006, your incentive award will be tied to the following performance categories:

• The Company’s diluted earnings per share for fiscal 2006 (the “Company Portion”).

• Your assigned business unit segment profit, if applicable (the “Business Unit Portion”).

• An assessment of your individual performance and key performance objective(s) (the “Individual Portion”)

1.	The Company Portion: Attainment of Diluted Earnings Per Share Objective
	Performance under the Company Portion of the incentive objective will determine an initial award level under the Plan. This initial award level will vary between 0 and 200% of a participant’s target award, based upon a performance range and a range of corresponding award levels pre-approved by the Compensation Committee.
	If actual results for the Company Portion of the incentive objective fall below the pre-approved diluted earnings per share minimum threshold as established by the Compensation Committee with respect to fiscal 2006 the initial award and final award will be zero for all participants, and no other performance factors will be considered.

2.	The Business Unit Portion (Segment Profit Performance Modifier, if applicable):
	The initial award level determined under the Company Portion may be modified based on performance under the Business Unit Portion of the incentive objective. The initial award level will be multiplied by a factor based on the actual business unit segment profit attained by the Company for fiscal 2006. This factor will range from .25 to 1.50 based upon a performance range and range of corresponding modifiers pre-approved by the Compensation Committee.
	If actual segment profit falls below the pre-approved segment profit minimum threshold as established by the Compensation Committee with respect to fiscal 2006, the modifier factor will be zero, and participants will therefore earn no bonus for the year.
3.	The Individual Portion (Individual Performance and Key Performance Objective Modifier):
	The award level determined as a result of the Company Portion of the incentive objective, modified by the Segment Profit Performance factor, if applicable, may be further modified based on individual performance. An assessment of the participant’s Key Performance Objectives combined with an overall assessment of the participant’s individual contributions and performance will result in a factor, ranging from -50% to + 25% that will be used to multiply the award determined above in order to calculate the participant’s Final Incentive Award for fiscal 2006. The Individual Performance and Key Performance Objective Modifier will be determined by the Salary Committee of Yankee Candle, with input from the participant’s Department Head.

The Compensation Committee and/or Salary Committee has discretion to modify all or any portion of any award as it deems necessary or appropriate.

EX-99.2

Exhibit 99.2
2006 Director Compensation Plan

THE YANKEE CANDLE COMPANY, INC.
2006 Director Compensation Plan
(Non-Employee Directors Only)

Equity

     Initial

Upon initial election to the Board, a Director is awarded an option to purchase 20,000 shares of Yankee common stock.

Option price per share – New York Stock Exchange closing price on date preceding date of grant

Vesting – 25% per year on anniversary date of grant

     Annual

An eligible Director is awarded an option to purchase 1,250 shares of Yankee common stock for each regularly scheduled Board meeting that such Director attended during the previous calendar year, up to a maximum of 5,000 shares. Such awards shall be made by the Compensation Committee of the Board following the Company’s announcement of its earnings for the prior fiscal year.

Cash

Base: $30,000 payable in four equal installments of $7,500 to be paid quarterly

Additional:	$2,250 for Board meeting attended in person or
	$1,125 for each Board meeting attended by phone

Committees: Committee members are paid $1,250 for each committee meeting in which the committee member participates, if attending in person, or $625 if attending by phone.

The Audit Committee chair is paid an additional $4,000/year in four equal installments of $1,000 to be paid quarterly. The Compensation Committee chair and the Nominating and Governance Committee chair are paid an additional $2,000/year in four equal installments of $500 to be paid quarterly.