**Exhibit10.37**

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**TODHUNTER INTERNATIONAL,INC.**

**222 Lakeview Avenue, Suite1500**

**West Palm Beach, FL 33401**

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**SALARY CONTINUATION PLANAGREEMENT**

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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 **Ousik Yu**(the “Executive”).

 

**WITNESSETH**:

 

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

 

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

 

**WHEREAS**, the Executive wishes to be assured that (i) he will be entitled to acertain amount of additional compensation for some definite period of time fromand after 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 whichthe Corporation shall pay such retirement benefit, disability benefit or deathbenefit; and

 

**WHEREAS**, the parties hereto intend that this Agreement be considered anun-funded arrangement, maintained primarily to provide deferred compensationbenefits for the Executive, a member of a select group of management or highlycompensated Executives of the Corporation, for purposes of the EmployeeRetirement Security Act 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’s employment,after the attainment of age 65, other than by reason of his death, theCorporation shall thereafter pay the Executive the sum of **$65,000.00** per annumfor 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 ina retirement benefit based on a fraction, the denominator of which isanticipated 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 after terminationof his employment, but prior to the expiration of said fifteen (15) yearperiod, the Corporation shall continue to make said payments during theremainder of said fifteen (15) year period to the Executive’s estate.

 

**2.             Death Benefit**.  The Executive and the Corporation haveentered into an Endorsement Split-Dollar Agreement dated **February 20, 2004** thatprovides for the payment of certain death benefits to the Executive’s estate ifthe Executive dies while such Endorsement Split-Dollar Agreement is inforce.  It is the intent of theCorporation and the Executive that: (A) in all events the EndorsementSplit-Dollar Agreement will be cancelled and no death benefit will be paid to theExecutive’s estate once the executive becomes entitled to receive theretirement benefit payments set forth in Paragraph 1.A; and (B) the Executivewill be entitled to receive the death benefits set forth in EndorsementSplit-Dollar Agreement only if he dies while such agreement is in force, thatis during the Executive’s employment with the Corporation or after a Change inControl provided the Executive has not become entitled to receive theretirement 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 theInternal Revenue Code of 1986, as amended (the “Code”), as determined by theCorporation, while in the employ of the Corporation, the Corporation shall paythe Executive a disability benefit in substantially equal installments over aperiod of sixty (60) months. The amount of such monthly disability benefitshall be equal to 1/60 of the annual retirement benefit which would be payableto the Executive under Paragraph 1 of this Agreement, multiplied by the numberof complete consecutive twelve month periods beginning on **June 9, 1998**, providedhowever that such disability income benefit is not to exceed 100% of theretirement benefit stated in Paragraph 1 above. Such monthly payments shallcommence within thirty (30) days following the Corporation’s determination ofdisability. In the event of the death of the Executive after monthly paymentsunder this paragraph have commenced, but before expiration of the sixty (60)month period, the unpaid balance of payments shall continue to be paid by theCorporation to the Executive’s estate.

 

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

 

**5.            ****Forfeiture of Rights andBenefits**.  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 nationalmarketing of any brand of distilled spirits, anywhere in the United States orsuch other country or countries in which the Corporation or any of itsSubsidiaries (as defined below) actively engages in its trade or business as ofthe Date of Termination (“Territory”); (ii) become associated as a manager, supervisor, employee,consultant, advisor, control shareholder (either individually or as part of anaffiliated group), or otherwise of any person, corporation or entity engagingin 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, orservices in 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**.  Nothing contained in this Agreement, and noaction taken pursuant to its provisions by either party hereto, shall create,nor be construed to create, a trust of any kind or a fiduciary relationshipbetween the Corporation and the Executive or any other person.

 

**7.             Unsecured General Creditor Status of theExecutive**.

 

A.            The payments to the Executive or his estate shall be madefrom 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, the Corporationpurchases an insurance policy or policies insuring the life of the Executive(or any other property) to allow the Corporation to recover the cost ofproviding the benefits, in whole or in part, hereunder, neither the Executive,his personal representative, legal representative, successors and permittedassigns, nor any other person have nor acquire any rights whatsoever therein orin 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**.  Nothing contained herein shall be construed tobe a contract of employment for any term of years, nor as conferring upon theExecutive the right to continue to be employed by the Corporation, in anycapacity.

 

**9.             Termination of Agreement**.  This Agreement shall be cancelled and shallterminate upon the termination of the Executive’s employment with theCorporation for any reason other than the reasons described in paragraphs 1, 2,or 3 of this Agreement.

 

**10.          Termination of Agreement in Connection with aChange 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 of Control”shall mean any of the following events:

 

(i)            The acquisition by anyperson, entity or “group” required to file a Schedule 13D or Schedule 14D-1promulgated under the Securities Exchange Act of 1934, as amended (the“Exchange Act”) (excluding, for this purpose, any of the following thatacquires 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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Boardof Directors if at that time at least a majority are individuals who aredirectors on the date hereof), provided that any person who becomes a directorsubsequent to the date hereof whose election, or nomination for election by theCorporation’s stockholders, was approved by a vote of at least a majority ofthe Incumbent Board (other than an election or nomination of an individualwhose initial assumption of office is in connection with an actual orthreatened election contest relating to the election of the Directors ofEmployer, as such terms are used in Rule 14a-1 promulgated under the ExchangeAct) shall be, for purposes of this Agreement, considered as though such personwere a member of the Incumbent Board; or

 

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

 

C.            The definition of “for cause” termination shall be thesame as set forth in theemployment agreement between the Executive and the Corporation in effect as ofthe date of this Agreement.  In theevent there is no employment agreement between the Executive and theCorporation on the date of this Agreement, “cause” for termination shall mean that (a) the Executive is convicted of a felony which, in the soledetermination of the Board of Directors, would have a material adverse effecton Executive’s ability to perform his duties hereunder or on the business orreputation of the Corporation; (b) the Executive has exhibited gross misconductresulting in material harm to the Corporation, its business or reputation; (c)the Executive has willfully misappropriated the Corporation’s assets or hasotherwise willfully defrauded the Corporation, including without limitation byfraud, theft, embezzlement, or breach of a fiduciary duty involving personalprofit.  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 reasonable beliefthat his action or omission was in the best interests of the Corporation.

 

**11.          Named Fiduciary**.  The Corporation is hereby designated the “Named Fiduciary” assuch term is defined in ERISA.  As NamedFiduciary, the Corporation shall be responsible for the management andadministration of the terms of this Agreement. The Corporation’s Board ofDirectors may delegate to others the management and operating responsibilitiesof the plan including the employment of advisors and may exercise any otherpowers necessary for the discharge of its duties to the extent not in conflictwith the provisions of ERISA.

 

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**12.          Claims Procedure**.

 

A.            If the Executive or his beneficiary believes that he isbeing 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 of thisAgreement on which such denial is based;

 

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

 

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

 

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

 

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

 

D.            Within sixty (60) days after the Secretary’s receipt of arequest for review, he will review the Corporation’s determination. Afterconsidering all materials presented by the Claimant, the Secretary will rendera written opinion, written in a manner calculated to be understood by theClaimant, setting forth the specific reasons for the decision and containingspecific references to the pertinent provisions of this Agreement on which thedecision is based. If special circumstances require that the sixty (60) daytime period be extended, the Secretary will so notify the Claimant and willrender 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 amountspayable hereunder, which are expressly declared to be unassignable andnon-transferable. Any such attempted assignment or transfer shall be void andshall terminate this Agreement; the Corporation shall thereupon have no furtherliability hereunder. No amount payable hereunder shall, prior to actual paymentthereof, be subject to seizure by any creditor of the Executive for the paymentof any debt, judgment or other obligation, by a proceeding at law or in equity.

 

**14.          Amendment**.  This Agreement may be amended at any timeand from time to time, by a written instrument signed by the Corporation andthe Executive.

 

**15.          Binding Effect**.  All of the terms and provisions of thisAgreement shall be binding upon, inure to the benefit of, and be enforceable bythe parties and their respective administrators, personal representatives,legal representatives, heirs, successors and permitted assigns, whether soexpressed or not.

 

**16.          Notices**.  Any notice, consent or demand required orpermitted to be given under the provisions of this Agreement shall be inwriting, and shall be signed by the party giving or making the same.  If such notice, consent or demand is mailedto a party hereto, it shall be sent by United States certified mail, postageprepaid, addressed to such party’s last known address as shown on the recordsof the Corporation. The date of such mailing shall be deemed the date ofnotice, consent or demand.

 

**17.          Governing Law**.  This Agreement and all transactionscontemplated by this Agreement shall be governed by, and construed and enforcedin accordance with, the internal laws of the State of Florida without regard toprinciples of conflicts of laws.

 

**18.          Jurisdiction and Venue**.  The parties acknowledge that a substantialportion of the negotiations, anticipated performance and execution of thisAgreement occurred or shall occur in Palm Beach County, Florida.  Any civil action or legal proceeding arisingout of or relating to this Agreement shall be brought in the courts of recordof the State of Florida in Palm Beach County or the United States DistrictCourt, Southern District of Florida. Each party consents to the jurisdiction of such Florida court in anysuch civil action or legal proceeding and waives any objection to the laying ofvenue of any such civil action or legal proceeding in such Florida court.  Service of any court paper may be effectedon such party by mail, as provided in this Agreement, or in such other manneras 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 firsthereinabove written.

 

**TODHUNTERINTERNATIONAL, INC.**

** **
| By:                            | /s/ Jay S. Maltby     | , Chairman, CEO &  President                      |   |
|--------------------------------|-----------------------|-------------------------------------------------------|--------|
|                           |                  |
|                           |                  |
| **EXECUTIVE:**                 |                  |
|                           |                  |
| **By:**                        | **/s/ Ousik Yu, Sr.** | ** Vice President – R&D Manufacturing** |   |
| **Florida Distillers Company** |                  |

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