**Exhibit 10.34**

 

**TODHUNTER INTERNATIONAL, INC.**

**222 Lakeview Avenue, Suite 1500**

**West Palm Beach, FL 33401**

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**SALARY CONTINUATION PLAN AGREEMENT**

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**THIS SALARY CONTINUATION PLAN AGREEMENT** (this “Agreement” or the “Plan”) is enteredinto this **20th day of February 2004,** between TodhunterInternational, Inc., a Delaware corporation (hereinafter referred to as the“Corporation”), and **D. Chris Mitchell** (the “Executive”).

 

**WITNESSETH**:

 

**WHEREAS**,the Executive is employed by the Corporation; and

 

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

 

**WHEREAS**,the Executive wishes to be assured that (i) he will be entitled to a certainamount of additional compensation for some definite period of time from andafter his retirement from active service with the Corporation or othertermination of his employment; (ii) he will be entitled to a disability benefitin the event of his disability; and (iii) his estate will be entitled to adeath benefit after the Executive’s death if such death occurs during theExecutive’s employment with the Corporation; and

 

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

 

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

 

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

 

**1.****            ****Retirement Benefit**.

 

A.            From and after termination of the Executive’semployment, after the attainment of age 65, other than by reason of his death,the Corporation shall thereafter pay the Executive the sum of **$65,000.00**per annum for a period of fifteen (15) years, payable in equal monthlyinstallments, commencing with the first day of the month following suchtermination. Retirement prior to age 65 with the consent of the Corporationshall result in a retirement benefit based on a fraction, the denominator ofwhich is anticipated years of service to age 65 from **June 9, 1998** and thenumerator of which is actual years of service from such date.  The fraction so derived shall be applied tothe above stated retirement benefit resulting in the reduced early retirementbenefit.

 

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

 

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

 

**3.****            ****Disability Benefit**.  In theevent that the Executive becomes “permanently and totally disabled,” within themeaning 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 theCorporation, the Corporation shall pay the Executive a disability benefit insubstantially equal installments over a period of sixty (60) months. The amountof such monthly disability benefit shall be equal to 1/60 of the annualretirement benefit which would be payable to the Executive under Paragraph 1 ofthis Agreement, multiplied by the number of complete consecutive twelve monthperiods beginning on **June 9, 1998**, provided however thatsuch disability income benefit is not to exceed 100% of the retirement benefitstated in Paragraph 1 above. Such monthly payments shall commence within thirty(30) days following the Corporation’s determination of disability. In the eventof 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 ofpayments shall continue to be paid by the Corporation to the Executive’sestate.

 

**4.****            ****Acceleration of Benefit Payments**. Notwithstanding the provisions set forth in Paragraphs 1 or 3 of thisAgreement, the Corporation may elect to accelerate the payment of any amountslisted in such Paragraphs and make payment in a lump sum equal to the netpresent value of such payments discounted at an interest rate equal to thethirty (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 fullsatisfaction of the Corporation’s obligations under Paragraph 1 or 3 of thisAgreement, as the case may be.

 

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

 

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industry,relating to the manufacturing or national marketing of any brand of distilledspirits, anywhere in the United States or such other country or countries inwhich the Corporation or any of its Subsidiaries (as defined below) activelyengages 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 aspart of an affiliated group), or otherwise of any person, corporation or entityengaging in any capacity in such segment of the liquor industry anywhere in theTerritory;  (iii) call upon any clientor clients of the Corporation or any of its Subsidiaries for the purpose ofselling or soliciting for any person, corporation or entity, other than any ofthe Corporation or its Subsidiaries, sales of any products, processes, or servicesin any capacity in such segment of the liquor industry within theTerritory;  (iv) divert, solicit or takeaway any such client or clients of the Corporation or any of its Subsidiariesfor the purpose of selling any products or services in any capacity in suchsegment of the liquor industry; and service any contracts or accounts relatingto any products or services in any capacity in such segment of the liquorindustry for any person, corporation or entity other than the Corporation orany of its Subsidiaries; or  (v) induce,influence, combine or conspire with, or attempt to induce, influence, combineor conspire with, any of the officers or employees of the Corporation or any ofits Subsidiaries to terminate his or her employment with or to compete againstthe Corporation or any of its Subsidiaries in any capacity in such segment ofthe liquor industry.  The Executiveshall not at any time disclose any confidential or trade secret of theCorporation or any of its Subsidiaries or any client of the Corporation or anyof its Subsidiaries, or utilize such confidential information or trade secretfor the Executive’s own benefit, or for the benefit of third parties.  The term “confidential information or tradesecret of the Corporation or any client of the Corporation” does not includeany information which becomes generally available to the public other than bybreach of this provision.  The Executivemay disclose confidential information where such disclosure is required byapplicable law or court process (but only after giving the Corporation writtennotice 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 Corporationowns, directly or indirectly, ten percent (10%) or more of the outstandingequity interests as of the Date of Termination.

 

**6.****            ****No Trust Created**.  Nothingcontained in this Agreement, and no action taken pursuant to its provisions byeither party hereto, shall create, nor be construed to create, a trust of anykind or a fiduciary relationship between the Corporation and the Executive orany other person.

 

**7.****            ****Unsecured General Creditor Statusof the Executive**.

 

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

 

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B.            In the event that, in its discretion, theCorporation purchases an insurance policy or policies insuring the life of theExecutive (or any other property) to allow the Corporation to recover the costof providing the benefits, in whole or in part, hereunder, neither theExecutive, his personal representative, legal representative, successors andpermitted assigns, nor any other person have nor acquire any rights whatsoevertherein or in the proceeds therefrom, except as set forth in the Endorsement Split-DollarAgreement between the Corporation and the Executive dated **February 20, 2004**.  The Corporation shall be the sole owner andbeneficiary of any such policy or policies and, as such, shall possess and, mayexercise all incidents of ownership therein.  No such policy, policies, or other property shall be held in trusteither for the Executive or any other person or as collateral security for anyobligation of the Corporation hereunder.

 

**8.****            ****No Contract of Employment**.  Nothingcontained herein shall be construed to be a contract of employment for any termof years, nor as conferring upon the Executive the right to continue to beemployed by the Corporation, in any capacity.

 

**9.****            ****Termination of Agreement**.  ThisAgreement shall be cancelled and shall terminate upon the termination of theExecutive’s employment with the Corporation for any reason other than thereasons described in paragraphs 1, 2, or 3 of this Agreement.

 

**10.****         ****Termination of Agreement inConnection with a Change in Control**.

 

A.            Notwithstanding anything in this Agreement to thecontrary, unless the Executive is terminated “for cause,” as defined inParagraph 10.C. of this Agreement, the Corporation may not terminate thisAgreement 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 ofControl” shall mean any of the following events:

 

(i)            Theacquisition by any person, entity or “group” required to file a Schedule 13D orSchedule 14D-1 promulgated under the Securities Exchange Act of 1934, asamended (the “Exchange Act”) (excluding, for this purpose, any of the followingthat acquires beneficial ownership of voting securities of the Corporation,including shares acquired pursuant to the exercise of options or warrants, orconversion of preferred stock outstanding as of the date hereof: (a) CLFinancial, Ltd., Angostura Ltd., or any of their affiliates; (b) theCorporation, its affiliates or subsidiaries; (d) V&S Vin & Spirit AB,its affiliates or subsidiaries, solely in connection with a transaction withthe Corporation, its affiliates or subsidiaries approved by the Board ofDirectors; or (d) any employee benefit plan of the Corporation, or itsaffiliates or subsidiaries), of beneficial ownership (within the meaning ofRule 13d-3 promulgated under the Exchange Act) of over 40% (in one or moretransactions, in the aggregate) of either the then outstanding shares of commonstock or the combined voting power of the Corporation’s then outstanding votingsecurities entitled to vote generally in the election of directors; or

 

(ii)           An election orappointment to the Board of Directors by virtue of which the individuals whoimmediately prior thereto constituted the Board of Directors (the “IncumbentBoard”) no longer constitute at least a majority of the Board of Directors(other than an election or appointment of a director or directors precipitatedby CL Financial, Ltd., Angostura Ltd., V&S Vin & Spirit AB, or any oftheir affiliates, or by the

 

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Board of Directors ifat that time at least a majority are individuals who are directors on the datehereof), provided that any person who becomes a director subsequent to the datehereof whose election, or nomination for election by the Corporation’sstockholders, was approved by a vote of at least a majority of the IncumbentBoard (other than an election or nomination of an individual whose initialassumption of office is in connection with an actual or threatened electioncontest relating to the election of the Directors of Employer, as such termsare used in Rule 14a-1 promulgated under the Exchange Act) shall be, forpurposes of this Agreement, considered as though such person were a member ofthe Incumbent Board; or

 

(iii)          Approval by thestockholders of the Corporation of: (a) a reorganization, merger orconsolidation by reason of which persons who were the stockholders of theCorporation immediately prior to such reorganization, merger or consolidationdo not, immediately thereafter, own more than fifty percent (50%) of thecombined voting power entitled to vote generally in the election of directorsof the reorganized, merged or consolidated company’s then outstanding votingsecurities; or (b) a liquidation or dissolution of the Corporation or the saleof all or substantially all of the assets of the Corporation, whether suchassets are held directly or indirectly (excluding the currently proposed jointventures with affiliates of CL Financial, Ltd. and/or V&S Vin & SpiritAB, if such transactions constitute a sale of substantially all of the assetsof Employer).

 

C.            The definition of “for cause” termination shall bethe same as set forth in the employment agreementbetween the Executive and the Corporation in effect as of the date of thisAgreement.  In the event there is noemployment agreement between the Executive and the Corporation on the date ofthis Agreement, “cause” for termination shall mean that (a) theExecutive is convicted of a felony which, in the sole determination of theBoard of Directors, would have a material adverse effect on Executive’s abilityto perform his duties hereunder or on the business or reputation of theCorporation; (b) the Executive has exhibited gross misconduct resulting inmaterial harm to the Corporation, its business or reputation; (c) the Executivehas willfully misappropriated the Corporation’s assets or has otherwisewillfully 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 orfailure to act on the Executive’s part shall be considered “willful” unlessdone, or omitted to be done, by him not in good faith and without reasonablebelief that his action or omission was in the best interests of theCorporation.

 

**11.****         ****Named Fiduciary**.  TheCorporation is hereby designated the “Named Fiduciary” as such term is definedin ERISA.  As Named Fiduciary, theCorporation shall be responsible for the management and administration of theterms of this Agreement. The Corporation’s Board of Directors may delegate toothers the management and operating responsibilities of the plan including theemployment of advisors and may exercise any other powers necessary for thedischarge of its duties to the extent not in conflict with the provisions ofERISA.

 

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**12.****         ****Claims Procedure**.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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**13.****         ****Non-Assignability of Benefits**.  TheExecutive may not transfer, assign, anticipate, hypothecate or otherwiseencumber any part or all of the amounts payable hereunder, which are expresslydeclared to be unassignable and non-transferable. Any such attempted assignmentor transfer shall be void and shall terminate this Agreement; the Corporationshall thereupon have no further liability hereunder. No amount payablehereunder shall, prior to actual payment thereof, be subject to seizure by anycreditor of the Executive for the payment of any debt, judgment or otherobligation, by a proceeding at law or in equity.

 

**14.****         ****Amendment**.  This Agreementmay be amended at any time and from time to time, by a written instrumentsigned by the Corporation and the Executive.

 

**15.****         ****Binding Effect**.  All ofthe terms and provisions of this Agreement shall be binding upon, inure to thebenefit of, and be enforceable by the parties and their respectiveadministrators, personal representatives, legal representatives, heirs,successors and permitted assigns, whether so expressed or not.

 

**16.****         ****Notices**.  Anynotice, consent or demand required or permitted to be given under theprovisions of this Agreement shall be in writing, and shall be signed by theparty giving or making the same.  Ifsuch notice, consent or demand is mailed to a party hereto, it shall be sent byUnited States certified mail, postage prepaid, addressed to such party’s lastknown address as shown on the records of the Corporation. The date of suchmailing shall be deemed the date of notice, consent or demand.

 

**17.****         ****Governing Law**.  ThisAgreement and all transactions contemplated by this Agreement shall be governedby, and construed and enforced in accordance with, the internal laws of theState of Florida without regard to principles of conflicts of laws.

 

**18.****         ****Jurisdiction and Venue**.  Theparties acknowledge that a substantial portion of the negotiations, anticipatedperformance and execution of this Agreement occurred or shall occur in PalmBeach County, Florida.  Any civil actionor legal proceeding arising out of or relating to this Agreement shall be broughtin the courts of record of the State of Florida in Palm Beach County or theUnited States District Court, Southern District of Florida.  Each party consents to the jurisdiction ofsuch Florida court in any such civil action or legal proceeding and waives anyobjection to the laying of venue of any such civil action or legal proceedingin such Florida court.  Service of anycourt paper may be effected on such party by mail, as provided in thisAgreement, 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 onthe day and year first hereinabove written.

 

 

**TODHUNTER INTERNATIONAL, INC.**

 
| By: | /s/ Jay S. Maltby | , Chairman, CEO &  President |
|-----|-------------------|---------------------------------------|

 

 

**EXECUTIVE:**

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| By: | /s/ D. Chris Mitchell |  – Sr. Vice President, Sales |
|-----|-----------------------|----------------------------------------|

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