Exhibit 10.44

 

TODHUNTER INTERNATIONAL, INC.

222 Lakeview Avenue, Suite 1500

West Palm Beach, FL 33401

 

ENDORSEMENT SPLIT-DOLLAR AGREEMENT

 

THIS ENDORSEMENT SPLIT-DOLLAR AGREEMENT (this “Agreement”) is entered into this
20th day of February 2004, by and between Todhunter International, Inc., a
Delaware corporation (the “Corporation”) and Ousik Yu (the “Executive”).

 

WITNESSETH:

 

WHEREAS, the Executive is employed by the Corporation; and

 

WHEREAS, the Corporation recognizes the valuable services performed by the
Executive and wishes to encourage his continued employment; and

 

WHEREAS, the Corporation is desirous of providing protection for the
beneficiaries of Executive in the event of his untimely death; and

 

WHEREAS, The Corporation has applied for, and is the owner of Life Insurance
Policy Number 10034392 (the “Policy”) in the specified face amount of $600,000
from the Lincoln National Life Insurance Company (the “Insurer”); and

 

WHEREAS, it is understood and agreed that this Agreement is to be considered
effective as of the date on which the Policy was issued by the Insurer or the
date of execution of this Agreement whichever is later.

 

NOW THEREFORE, in consideration of the premises and of the mutual promises
herein contained, the parties hereto agree as follows:

 

1.                                      Ownership Rights In The Policy.

 

A.                                   The Corporation shall have all of the
ownership rights, options and privileges permitted by the Policy except those
expressly granted to the Executive by the terms of this Agreement.

 

B.                                     The Corporation has the right to borrow
or to pledge the cash surrender value of the Policy to the extent of its
interest specified in Paragraph 1.C., and as permitted by the terms of the
Policy. The Corporation’s interest in the cash surrender value of the Policy at
any time during the Executive’s lifetime, or at death, shall be adjusted to
reflect any indebtedness on or secured by the Policy which is attributable to
borrowing by or on behalf of the Corporation (including any interest due on such
indebtedness).

 

C.                                     The Corporation shall have the right to
designate itself as beneficiary of the Policy, to the extent of the difference
between the total death benefit paid under the life insurance contract and the
amount designated in Paragraph 1.D., below, provided such amount is reduced by
any indebtedness (on or secured by the Policy) which is attributable to
borrowing by or on behalf of the Corporation (including any interest due on such
indebtedness) and/or any withdrawals by or on behalf of the Corporation.

 

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D.                                    The Corporation hereby endorses to the
Executive policy death benefits in the amount of $600,000 which shall be payable
to the Executive’s estate if the Executive dies while this Agreement is in
force.  The Corporation and the Executive’s estate may select a settlement
option as provided in the Policy at the time of distribution.

 

E.                                      The Corporation may not take any action
with respect to the Policy that will impair any right or interest of the
Executive in the Policy.

 

2.                                      Premium Payments.  On or before the due
date of each Policy premium, or within the grace period provided therein, the
Corporation shall pay the full amount to the Insurer.

 

3.                                      Division of Death Proceeds of Policy. 
In the event that the Executive shall die while this Agreement is in force, the
Corporation shall be entitled to receive from the Policy proceeds an amount
equal to the Corporation’s interest in the Policy, as determined under Paragraph
1.C. of this Agreement. The portion of the Policy proceeds which is in excess of
the amount paid to the Corporation shall be paid to the Executive’s estate in
accordance with the terms of the Policy and Paragraph 1.D. of this Agreement.

 

4.                                      Waiver of Premium.  Upon the unanimous
agreement of the Corporation and the Executive, the Corporation shall apply to
the Insurer for a supplemental agreement providing for the waiver of policy
premiums in the event of the Executive’s disability. The Corporation shall pay
any additional premium attributable to such an agreement.

 

5.                                      Choice of Dividend Options.  To the
extent the Insurer declares dividends on the Policy, the Corporation shall have
the right to choose the option or combination of options it desires from among
those offered by the Insurer. The Corporation shall notify the Insurer of its
choice.

 

6.                                      Termination of Agreement.

 

A.                                   This Agreement shall be cancelled and shall
terminate upon the termination of the Executive’s employment with the
Corporation for any reason other than the Executive’s disability as defined in
Paragraph 3 of the Salary Continuation Plan Agreement between the Corporation
and the Executive dated February 20, 2004 (the “Salary Continuation Plan
Agreement”).   Upon such termination, the Executive shall have a 60-day option
to pay the Corporation an amount equal to the Corporation’s interest in the
Policy under Paragraph 1.C. in return for the Corporation’s release of any claim
to the policy. If, within the 60-day period following the cancellation of this
Agreement, the Executive fails to exercise said option, then the Executive shall
be deemed to have relinquished all rights in the Policy and the Corporation will
be free to surrender or take any other action with respect to the Policy as it
may desire. If the Executive fails to pay the Corporation within the 60-day
option period, the Executive agrees upon request of the Corporation to execute
any and all instruments that may be required to transfer all right, title, and
interest in the Policy to the Corporation.

 

B.                                     Notwithstanding Paragraph 6.A., in the
event the Executive dies during his employment with the Corporation, this
Agreement shall be cancelled and shall terminate upon the payment of the death
proceeds of the Policy to the Executive’s estate in accordance with Paragraph
1.D. and Paragraph 3 of this Agreement.

 

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7.                                      Termination of this Agreement in
Connection with a Change in Control.

 

A.                                   Notwithstanding anything in this Agreement
to the contrary, unless the Executive is terminated “for cause,” as defined in
Paragraph 10.C. of this Agreement, the Corporation may not terminate this
Agreement without the consent of the Executive during the period beginning nine
(9) months before a Change in Control (as defined below); provided however, this
Agreement shall be cancelled and shall terminate once the Executive become
entitled to receive payment of the retirement benefit in accordance with
Paragraph 1 of the Salary Continuation Plan Agreement.

 

B.                                     For the purpose of this Agreement, a
“Change of Control” shall mean any of the following events:

 

(i)                                     The acquisition by any person, entity or
“group” required to file a Schedule 13D or Schedule 14D-1 promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) (excluding, for
this purpose, any of the following that acquires beneficial ownership of voting
securities of the Corporation, including shares acquired pursuant to the
exercise of options or warrants, or conversion of preferred stock outstanding as
of the date hereof: (a) CL Financial, Ltd., Angostura Ltd., or any of their
affiliates; (b) the Corporation, its affiliates or subsidiaries; (c) V&S Vin &
Spirit AB, its affiliates or subsidiaries, solely in connection with a
transaction with the Corporation, its affiliates or subsidiaries approved by the
Board of Directors; or (d) any employee benefit plan of the Corporation, or its
affiliates or subsidiaries), of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of over 40% (in one or more
transactions, in the aggregate) of either the then outstanding shares of common
stock or the combined voting power of the Corporation’s then outstanding voting
securities entitled to vote generally in the election of directors; or

 

(ii)                                  An election or appointment to the Board of
Directors by virtue of which the individuals who immediately prior thereto
constituted the Board of Directors (the “Incumbent Board”) no longer constitute
at least a majority of the Board of Directors (other than an election or
appointment of a director or directors precipitated by CL Financial, Ltd.,
Angostura Ltd., V&S Vin & Spirit AB, or any of their affiliates, or by the Board
of Directors if at that time at least a majority are individuals who are
directors on the date hereof), provided that any person who becomes a director
subsequent to the date hereof whose election, or nomination for election by the
Corporation’s stockholders, was approved by a vote of at least a majority of the
Incumbent Board (other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the Directors of Employer, as such
terms are used in Rule 14a-1 promulgated under the Exchange Act) shall be, for
purposes of this Agreement, considered as though such person were a member of
the Incumbent Board; or

 

(iii)                               Approval by the stockholders of the
Corporation of: (a) a reorganization, merger or consolidation by reason of which
persons who were the stockholders of the Corporation immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own more
than fifty percent (50%) of the combined voting power entitled to vote generally
in the election of directors of the reorganized, merged or consolidated
company’s then outstanding voting securities; or (b) a liquidation or
dissolution of the Corporation or the sale of all or substantially all of the
assets of the Corporation, whether such assets are held directly or indirectly
(excluding the currently proposed joint ventures with affiliates of CL
Financial, Ltd. and/or V&S Vin & Spirit AB, if such transactions constitute a
sale of substantially all of the assets of Employer).

 

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C.                                     The definition of “for cause” termination
shall be the same as set forth in the employment agreement between the Executive
and the Corporation in effect as of the date of this Agreement.  In the event
there is no employment agreement between the Executive and the Corporation on
the date of this Agreement, “cause” for termination shall mean that (a) the
Executive is convicted of a felony which, in the sole determination of the Board
of Directors, would have a material adverse effect on the Executive’s ability to
perform his duties hereunder or on the business or reputation of the
Corporation; (b) the Executive has exhibited gross misconduct resulting in
material harm to the Corporation, its business or reputation; (c) the Executive
has willfully misappropriated the Corporation’s assets or has otherwise
willfully defrauded the Corporation, including without limitation by fraud,
theft, embezzlement, or breach of a fiduciary duty involving personal profit. 
For purposes of this paragraph, no act or failure to act on the Executive’s part
shall be considered “willful” unless done, or omitted to be done, by him not in
good faith and without reasonable belief that his action or omission was in the
best interests of the Corporation.

 

8.                                      Amendment.  This Agreement may be
amended at any time and from time to time, by a written instrument signed by the
Corporation and the Executive.

 

9.                                      Binding Effect.  All of the terms and
provisions of this Agreement shall be binding upon, inure to the benefit of, and
be enforceable by the parties and their respective administrators, personal
representatives, legal representatives, heirs, successors and permitted assigns,
whether so expressed or not.

 

10.                               Notices.  Any notice, consent or demand
required or permitted to be given under the provisions of this Agreement shall
be in writing, and shall be signed by the party giving or making the same.  If
such notice, consent or demand is mailed to a party hereto, it shall be sent by
United States certified mail, postage prepaid, addressed to such party’s last
known address as shown on the records of the Corporation. The date of such
mailing shall be deemed the date of notice, consent or demand.

 

11.                               Insurer Not a Party to Agreement.  The Insurer
shall not be deemed a party to this Agreement. Payment or other performance of
its contractual obligations in accordance with the Policy provisions shall fully
discharge the Insurer from any and all liability.

 

12.                               Named Fiduciary.  The Corporation is hereby
designated the “Named Fiduciary” as such term is defined in the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”).  As Named
Fiduciary, the Corporation shall be responsible for the management and
administration of the terms of this Agreement. The Corporation’s Board of
Directors may delegate to others the management and operating responsibilities
of the plan including the employment of advisors and may exercise any other
powers necessary for the discharge of its duties to the extent not in conflict
with the provisions of ERISA.

 

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13.                               Claim Procedure.

 

A.                                   If the Executive or his personal
representative believes that he is being denied a benefit to which he is
entitled under this Agreement (hereinafter referred to as a “Claimant”), such
Claimant may file a written request for such benefit with the Corporation
setting forth his claim.  The request must be addressed to the President of the
Corporation at its then principal place of business.

 

B.                                     The Corporation shall reply to the
Claimant’s claim within ninety (90) days of receiving the claim.  If the claim
is denied in whole or in part, the Corporation shall adopt a written opinion,
using language calculated to be understood by the Claimant, setting forth:

 

(i)                                     The specific reason or reasons for such
denial;

 

(ii)                                  The specific reference to pertinent
provisions of this Agreement on which such denial is based;

 

(iii)                               A description of any additional material or
information necessary for the Claimant to perfect his claim and an explanation
why such material or such information is necessary;

 

(iv)                              Appropriate information as to the steps to be
taken if the Claimant wishes to submit the claim for review; and

 

(v)                                 The time limits for requesting a review
under subsection C. and for review under subsection D. hereof.

 

C.                                     Within sixty (60) days after the receipt
by the Claimant of the written opinion described above, the Claimant may request
in writing that the Secretary of the Corporation review the determination of the
Corporation. Such request must be addressed to the Secretary of the Corporation,
at its then principal place of business. The Claimant or his duly authorized
representative may, but need not, review the pertinent documents and submit
issues and comments in writing for consideration by the Corporation. If the
Claimant does not request a review of the Corporation’s determination by the
Secretary of the Corporation within such sixty (60) day period, he shall be
barred and estopped from challenging the Corporation’s determination.

 

D.                                    Within sixty (60) days after the
Secretary’s receipt of a request for review, he will review the Corporation’s
determination. After considering all materials presented by the Claimant, the
Secretary will render a written opinion, written in a manner calculated to be
understood by the Claimant, setting forth the specific reasons for the decision
and containing specific references to the pertinent provisions of this Agreement
on which the decision is based. If special circumstances require that the sixty
(60) day time period be extended, the Secretary will so notify the Claimant and
will render the decision as soon as possible, but no later than one hundred
twenty (120) days after receipt of the request for review.

 

14.                               Governing Law.  This Agreement and all
transactions contemplated by this Agreement shall be governed by, and construed
and enforced in accordance with, the internal laws of the State of Florida
without regard to principles of conflicts of laws.

 

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15.                               Jurisdiction and Venue.  The parties
acknowledge that a substantial portion of the negotiations, anticipated
performance and execution of this Agreement occurred or shall occur in Palm
Beach County, Florida.  Any civil action or legal proceeding arising out of or
relating to this Agreement shall be brought in the courts of record of the State
of Florida in Palm Beach County or the United States District Court, Southern
District of Florida.  Each party consents to the jurisdiction of such Florida
court in any such civil action or legal proceeding and waives any objection to
the laying of venue of any such civil action or legal proceeding in such Florida
court.  Service of any court paper may be effected on such party by mail, as
provided in this Agreement, or in such other manner as may be provided under
applicable laws, rules of procedure or local rules.

 

IN WITNESS WHEREOF, the parties hereto have set their hands on the day and year
first hereinabove written.

 

 

TODHUNTER INTERNATIONAL, INC.

 

 

 

By:

/s/  Jay S. Maltby

,Chairman & CEO

 

 

 

 

 

 

EXECUTIVE

 

 

 

 

By:

/s/ Ousik Yu, Sr.

Vice President – R&D Manufacturing

 

 

Florida Distillers Company

 

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