Exhibit 10.32

 

TODHUNTER INTERNATIONAL, INC.

222 Lakeview Avenue, Suite 1500

West Palm Beach, FL 33401

 

SALARY CONTINUATION PLAN AGREEMENT

 

THIS SALARY CONTINUATION PLAN AGREEMENT (this “Agreement” or the “Plan”) is
entered into this 20th day of February 2004, between Todhunter International,
Inc., a Delaware corporation (hereinafter referred to as the “Corporation”), and
Thomas A. Valdes (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 Executive wishes to be assured that (i) he will be entitled to a
certain amount of additional compensation for some definite period of time from
and after his retirement from active service with the Corporation or other
termination of his employment; (ii) he will be entitled to a disability benefit
in the event of his disability; and (iii) his estate will be entitled to a death
benefit after the Executive’s death if such death occurs during the Executive’s
employment with the Corporation; and

 

WHEREAS, the parties hereto wish to provide the terms and conditions upon which
the Corporation shall pay such retirement benefit, disability benefit or death
benefit; and

 

WHEREAS, the parties hereto intend that this Agreement be considered an
un-funded arrangement, maintained primarily to provide deferred compensation
benefits for the Executive, a member of a select group of management or highly
compensated Executives of the Corporation, for purposes of the Employee
Retirement Security Act of 1974, as amended (“ERISA”);

 

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

 

1.                                      Retirement Benefit.

 

A.                                   From and after termination of the
Executive’s employment, after the attainment of age 65, other than by reason of
his death, the Corporation shall thereafter pay the Executive the sum of
$76,517.00 per annum for a period of fifteen (15) years, payable in equal
monthly installments, commencing with the first day of the month following such
termination. Retirement prior to age 65 with the consent of the Corporation
shall result in a retirement benefit based on a fraction, the denominator of
which is anticipated years of service to age 65 from June 9, 1998 and the
numerator of which is actual years of service from such date.  The fraction so
derived shall be applied to the above stated retirement benefit resulting in the
reduced early retirement benefit.

 

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B.                                     In the event of the Executive’s death
after termination of his employment, but prior to the expiration of said fifteen
(15) year period, the Corporation shall continue to make said payments during
the remainder of said fifteen (15) year period to the Executive’s estate.

 

2.                                      Death Benefit.  The Executive and the
Corporation have entered into an Endorsement Split-Dollar Agreement dated
February 20, 2004 that provides for the payment of certain death benefits to the
Executive’s estate if the Executive dies while such Endorsement Split-Dollar
Agreement is in force.  It is the intent of the Corporation and the Executive
that: (A) in all events the Endorsement Split-Dollar Agreement will be cancelled
and no death benefit will be paid to the Executive’s estate once the executive
becomes entitled to receive the retirement benefit payments set forth in
Paragraph 1.A; and (B) the Executive will be entitled to receive the death
benefits set forth in Endorsement Split-Dollar Agreement only if he dies while
such agreement is in force, that is during the Executive’s employment with the
Corporation or after a Change in Control provided the Executive has not become
entitled to receive the retirement benefit payments set forth in Paragraph 1.A.

 

3.                                      Disability Benefit.  In the event that
the Executive becomes “permanently and totally disabled,” within the meaning of
§ 22 (e)(3) of the Internal Revenue Code of 1986, as amended (the “Code”), as
determined by the Corporation, while in the employ of the Corporation, the
Corporation shall pay the Executive a disability benefit in substantially equal
installments over a period of sixty (60) months. The amount of such monthly
disability benefit shall be equal to 1/60 of the annual retirement benefit which
would be payable to the Executive under Paragraph 1 of this Agreement,
multiplied by the number of complete consecutive twelve month periods beginning
on June 9, 1998, provided however that such disability income benefit is not to
exceed 100% of the retirement benefit stated in Paragraph 1 above. Such monthly
payments shall commence within thirty (30) days following the Corporation’s
determination of disability. In the event of the death of the Executive after
monthly payments under this paragraph have commenced, but before expiration of
the sixty (60) month period, the unpaid balance of payments shall continue to be
paid by the Corporation to the Executive’s estate.

 

4.                                      Acceleration of Benefit Payments. 
Notwithstanding the provisions set forth in Paragraphs 1 or 3 of this Agreement,
the Corporation may elect to accelerate the payment of any amounts listed in
such Paragraphs and make payment in a lump sum equal to the net present value of
such payments discounted at an interest rate equal to the thirty (30) year U.S.
Treasury Bill rate at the time of such proposed payment, without the consent of
the Executive or the Executive’s estate, in full satisfaction of the
Corporation’s obligations under Paragraph 1 or 3 of this Agreement, as the case
may be.

 

5.                                      Forfeiture of Rights and Benefits.  All
rights and benefits under this Agreement shall be forfeited if the Executive
violates the prohibitions set forth in the employment agreement between the
Executive and the Corporation in effect as of the date of this Agreement
relating to the disclosure of confidential information or the restriction of
competition with the Corporation.  In the event there is no employment agreement
between the Executive and the Corporation on the date of this Agreement, all
rights and benefits under this Agreement shall be forfeited if the Executive
engages in any of the following proscribed activities during the two (2) year
period beginning upon the occurrence of any event described in Paragraph 1 or 3
(the “Date of Termination”).  Executive will not, directly or indirectly: (i)
engage in any trade or business in the liquor

 

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industry, relating to the manufacturing or national marketing of any brand of
distilled spirits, anywhere in the United States or such other country or
countries in which the Corporation or any of its Subsidiaries (as defined below)
actively engages in its trade or business as of the Date of Termination
(“Territory”);  (ii) become associated as a manager, supervisor, employee,
consultant, advisor, control shareholder (either individually or as part of an
affiliated group), or otherwise of any person, corporation or entity engaging in
any capacity in such segment of the liquor industry anywhere in the Territory; 
(iii) call upon any client or clients of the Corporation or any of its
Subsidiaries for the purpose of selling or soliciting for any person,
corporation or entity, other than any of the Corporation or its Subsidiaries,
sales of any products, processes, or services in any capacity in such segment of
the liquor industry within the Territory;  (iv) divert, solicit or take away any
such client or clients of the Corporation or any of its Subsidiaries for the
purpose of selling any products or services in any capacity in such segment of
the liquor industry; and service any contracts or accounts relating to any
products or services in any capacity in such segment of the liquor industry for
any person, corporation or entity other than the Corporation or any of its
Subsidiaries; or  (v) induce, influence, combine or conspire with, or attempt to
induce, influence, combine or conspire with, any of the officers or employees of
the Corporation or any of its Subsidiaries to terminate his or her employment
with or to compete against the Corporation or any of its Subsidiaries in any
capacity in such segment of the liquor industry.  The Executive shall not at any
time disclose any confidential or trade secret of the Corporation or any of its
Subsidiaries or any client of the Corporation or any of its Subsidiaries, or
utilize such confidential information or trade secret for the Executive’s own
benefit, or for the benefit of third parties.  The term “confidential
information or trade secret of the Corporation or any client of the Corporation”
does not include any information which becomes generally available to the public
other than by breach of this provision.  The Executive may disclose confidential
information where such disclosure is required by applicable law or court process
(but only after giving the Corporation written notice so that the Corporation
may attempt to obtain a protective order).  For purposes of this paragraph, the
term “Subsidiaries” shall mean and include any entities in which the Corporation
owns, directly or indirectly, ten percent (10%) or more of the outstanding
equity interests as of the Date of Termination.

 

6.                                      No Trust Created.  Nothing contained in
this Agreement, and no action taken pursuant to its provisions by either party
hereto, shall create, nor be construed to create, a trust of any kind or a
fiduciary relationship between the Corporation and the Executive or any other
person.

 

7.                                      Unsecured General Creditor Status of the
Executive.

 

A.                                   The payments to the Executive or his estate
shall be made from assets which shall continue, for all purposes, to be a part
of the general, unrestricted assets of the Corporation.  No person shall have
nor acquire any interest in any such assets by virtue of the provisions of this
Agreement.  The Corporation’s obligation hereunder shall be an unfunded and
unsecured promise to pay money in the future.  To the extent that the Executive
or any person acquires a right to receive payments from the Corporation under
the provisions hereof, such right shall be no greater than the right of any
unsecured general creditor of the Corporation.  No such person shall have nor
require any legal or equitable right, interest or claim in or to any property or
assets of the Corporation.

 

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B.                                     In the event that, in its discretion, the
Corporation purchases an insurance policy or policies insuring the life of the
Executive (or any other property) to allow the Corporation to recover the cost
of providing the benefits, in whole or in part, hereunder, neither the
Executive, his personal representative, legal representative, successors and
permitted assigns, nor any other person have nor acquire any rights whatsoever
therein or in the proceeds therefrom, except as set forth in the Endorsement
Split-Dollar Agreement between the Corporation and the Executive dated
February 20, 2004.  The Corporation shall be the sole owner and beneficiary of
any such policy or policies and, as such, shall possess and, may exercise all
incidents of ownership therein.  No such policy, policies, or other property
shall be held in trust either for the Executive or any other person or as
collateral security for any obligation of the Corporation hereunder.

 

8.                                      No Contract of Employment.  Nothing
contained herein shall be construed to be a contract of employment for any term
of years, nor as conferring upon the Executive the right to continue to be
employed by the Corporation, in any capacity.

 

9.                                      Termination of Agreement.  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
reasons described in paragraphs 1, 2, or 3 of this Agreement.

 

10.                               Termination of 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).

 

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; (d) 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

 

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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).

 

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 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.

 

11.                               Named Fiduciary.  The Corporation is hereby
designated the “Named Fiduciary” as such term is defined in 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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12.                               Claims Procedure.

 

A.                                   If the Executive or his beneficiary
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 subparagraph C. and for review under subparagraph 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 the Corporation’s 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.

 

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13.                               Non-Assignability of Benefits.  The Executive
may not transfer, assign, anticipate, hypothecate or otherwise encumber any part
or all of the amounts payable hereunder, which are expressly declared to be
unassignable and non-transferable. Any such attempted assignment or transfer
shall be void and shall terminate this Agreement; the Corporation shall
thereupon have no further liability hereunder. No amount payable hereunder
shall, prior to actual payment thereof, be subject to seizure by any creditor of
the Executive for the payment of any debt, judgment or other obligation, by a
proceeding at law or in equity.

 

14.                               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.

 

15.                               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.

 

16.                               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.

 

17.                               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.

 

18.                               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.

 

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N 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 & President

 

 

 

 

EXECUTIVE:

 

 

By:

/s/ Thomas A. Valdes

, Executive Vice President - Todhunter International, Inc.

 

 

President – Cruzan Ltd.

 

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