EXHIBIT 10.26


 


EMPLOYMENT AGREEMENT


This
EMPLOYMENT AGREEMENT is made as of February 28, 2005, effective as of February
28, 2005, (this “Agreement”) by and between Centennial Specialty Foods
Corporation, a Delaware corporation (the “Company”), and Douglas L. Evans (“Executive”).


RECITALS


In order
to induce Executive to serve as the Chief Financial Officer of the Company and
the Company’s subsidiary, Stokes Canning Company, the Company desires to
provide Executive with compensation and other benefits on the terms and
conditions set forth in this Agreement.


Executive
is willing to accept such employment and perform services for the Company, on
the terms and conditions hereinafter set forth.


It is
therefore hereby agreed by and between the parties as follows:


1.
Employment.


1.1
Position. Subject to the terms and conditions of this Agreement, the Company
agrees to employ Executive during the Term (as defined herein) as its Chief
Financial Officer. In his capacity as the Chief Financial Officer of the
Company, Executive shall report to the Chief Executive Officer the (the “CEO”)
and the Board of Directors of the Company (the “Board”) and shall have the
powers, responsibilities and authorities of chief financial officers of
corporations of the size, type and nature of the Company, as it exists from
time to time, and as are assigned by the CEO and the Board consistent with
Executive’s position. In his capacity as Chief Financial Officer of the Company’s
subsidiary, Stokes Canning Company, Executive shall report to the Chief
Executive Officer and Board of Directors of Stokes Canning Company and shall
have the powers, responsibilities and authorities of chief financial officers
of corporations of the size, type and nature of Stokes Canning Company, as it
exists from time to time, and as are assigned by the CEO and the Board of
Directors of Stokes Canning Company consistent with Executive’s position. At
the request of the Company, Executive will serve as an officer and/or director
of any of the Company’s other subsidiaries for no additional compensation.


1.2
Duties. Subject to the terms and conditions of this Agreement, Executive hereby
agrees to be employed as the Chief Financial Officer of the Company and Stokes
Canning Company and agrees to devote such working time and efforts (except for
permitted vacation periods and reasonable periods of illness and other
incapacity), to the best of his ability, experience and talent, to the
performance of services, duties and responsibilities in connection therewith so
that such performance shall be his primary business activity. Executive shall
perform such duties and exercise such powers with respect to the activities of
the Company, commensurate with his positions, as the Chief Financial Officer of
the Company, as the CEO and the Board shall from time to time reasonably
delegate to him.


1.3 Other
Service. Nothing in this Agreement shall preclude Executive from serving on
boards of directors of other companies or trade organizations and participating
in charitable, community or religious activities that do not substantially
interfere with his duties and responsibilities hereunder or conflict with the
interest of the Company.


1.4
Office. Executive’s primary office will be located in the Company’s office
facility located in Centennial, Colorado or any other location reasonably
acceptable to Executive.


 


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2. Term.


2.1 Term
of Employment. Executive’s term of employment under this Agreement shall
commence as of the Effective Date (as defined below), and, subject to the terms
hereof, shall terminate on the earlier of (i) the third anniversary of the
Effective Date, or (ii) termination of Executive’s employment pursuant to this
Agreement (the “Term”); provided, however, that any termination of employment
by Executive (other than for death or Permanent Disability) or by the Company
may only be made upon 90 days prior written notice to the other party hereto.
Executive shall resign from any and all positions, including board memberships,
held by him with the Company or any subsidiary of the Company upon any
termination of employment.


2.2
Effective Date. This Agreement shall be effective February 28, 2005 (the “Effective
Date”).


3.
Compensation.


3.1
Salary. The Company shall pay Executive a base salary (“Base Salary”) at the
rate of $110,000 per annum commencing on the beginning of Executive’s term of
employment hereunder. Base Salary shall be payable in accordance with the
ordinary payroll practices of the Company. The Compensation Committee of the Board
will review Executive’s salary at least annually and may increase (but not
reduce) Executive’s Base Salary in its sole discretion. Once increased, such
Base Salary shall not be reduced and, as so increased, shall constitute “Base
Salary” hereunder.


3.2
Annual Bonus. In addition to his Base Salary, Executive shall, commencing with
the 2004 year and continuing each year (or fiscal year, if the Company shall
use or adopt a fiscal year differing from the calendar year) hereafter, be
afforded an opportunity to earn an annual cash bonus (the “Bonus”) during the
Term. The amount of such Bonus shall be determined in the sole discretion of
the Compensation Committee of the Board. In determining Executive’s Bonus, the
Compensation Committee will consider the actual and projected performance of
the Company, the Executive’s contribution to such performance, the compensation
paid to chief financial officers of other companies in the food industry that
are similar in size and profitability to the Company, and other factors that
the Compensation Committee shall in its sole judgment consider to bear on the
Bonus.


4.
Employee Benefits.


4.1
Employee Benefit Programs, Plans and Practices. Once the Company adopts or
establishes any employee pension and welfare benefit programs, plans and
practices (to the extent permitted under any employee benefit plan) that are
made available to its senior executives, the Executive shall have the right to
participate in such programs to the same extent, and on the same terms, as
other senior executives of the Company.


4.2
Vacation. While employed hereunder, Executive shall be entitled to no less than
20 business days paid vacation in each calendar year, which shall be taken at
such times as are consistent with Executive’s responsibilities hereunder.


5.
Expenses. Executive is authorized to incur reasonable expenses in carrying out
his duties and responsibilities under this Agreement. The Company will
reimburse Executive for such expenses upon presentation by Executive from time
to time of appropriately itemized and approved (consistent with the Company’s
policy) accounts of such expenditures.


6.
Termination of Employment.


6.1
Termination Without Cause. Except as provided in Section 6.3, if Executive’s
employment is terminated by the Company (other than for Permanent Disability,
death or Cause), Executive shall receive such payments, if any, under
applicable plans or programs, including but not limited to those referred to in
Section 4.1 hereof, to which he is entitled Pursuant to the terms of such plans
or programs, and any unpaid payments of Base Salary previously


 


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earned,
and accrued vacation and expenses incurred for which Executive is entitled to
reimbursement hereunder. If Executive is terminated under this Section 6.1,
Executive shall also be entitled to receive:


(a) severance equal to six months’ of
Executive’s Base Salary paid as normal payroll over the six months following
the effective date of such termination of employment; and


(b) continued
coverage for a 12-month period under any employee medical, health and life
insurance plans in accordance with the respective terms thereof applicable to
active employees (other than the requirement of continued employment);
provided, however, that payments and benefits due hereunder shall be reduced by
any amounts owed by Executive to the Company.


In no
event shall Executive be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to Executive under any of
the provisions of this Agreement and such amounts shall not be reduced whether
or not Executive obtains other employment.


6.2
Termination For Good Reason. Except as provided in Section 6.3, if Executive
resigns for Good Reason (as defined below), Executive shall receive such
payments, if any, under applicable plans or programs, including but not limited
to those referred to in Section 4.1 hereof, to which he is entitled pursuant to
the terms of such plans or programs, and any unpaid payments of Base Salary
previously earned, and accrued vacation and expenses incurred for which
Executive is entitled to reimbursement hereunder. If Executive resigns under
this Section 6.2, Executive shall also be entitled to receive:


(a) an
amount (the “Section 6.2 Termination Amount”) in lieu of any other cash
compensation beyond that provided in the immediately preceding sentence, which
amount shall be equal to the Executive’s Base Salary for a 12 month period
payable in a lump sum within 30 days following such termination of employment;
provided that if such resignation occurs within 90 days prior to calendar year
end, Executive shall have the option to defer payment, without interest, of the
Section 6.2 Termination Amount to January 1 of the next year; and


(b)
continued coverage for a 18-month period under any employee medical, health and
life insurance plans in accordance with the respective terms thereof applicable
to active employees (other than the requirement of continued employment);
provided, however, that payments and benefits due hereunder shall be reduced by
any amounts owed by the Executive to the Company.


“Good
Reason” shall be defined as (i) a reduction in Executive’s Base Salary,  (ii) a diminution of Executive’s titles,
offices, positions or authority, excluding for this purpose an action not taken
in bad faith and which is remedied within twenty (20) days after receipt of
written notice thereof given by Executive; or the assignment to Executive of
any duties inconsistent with Executive’s position (including status or
reporting requirements), authority, or material responsibilities, or the
removal of Executive’s authority or material responsibilities, excluding for
this purpose an action not taken in bad faith and which is remedied by the
Company within twenty (20) days after receipt of notice thereof given by
Executive, (iii) a transfer of Executive’s primary workplace by more than fifty
(50) miles from the current workplace unless agreed to by the Executive in his
sole discretion, excluding a transfer to the Phoenix, Arizona metropolitan area
or within the Denver, Colorado metropolitan area, (iv) a material breach of
this Agreement by the Company which is not remedied within twenty (20) days
after receipt of written notice thereof given by Executive, (v) Executive is
not the Chief Financial Officer of Stokes Canning Company, or (vi) Executive is
not the Chief Financial Officer of the Company.


6.3
Termination During a Non-Negotiated Change of Control. Notwithstanding Section
6.1 or 6.2, if within three months prior to or one year after a Non-Negotiated
Change of Control (as defined below), Executive’s employment is terminated by
the Company (other than for Permanent Disability, death or Cause) or the
Executive resigns for Good Reason, Executive shall receive such payments, if
any, under applicable plans or programs, including but not limited to those
referred to in Section 4.1 hereof, to which he is entitled pursuant to the
terms of such plans or programs, and any unpaid payments of Base Salary
previously earned and accrued vacation and expenses incurred for which
Executive is entitled to reimbursement hereunder. If Executive is terminated or
resigns under this Section 6.3, Executive shall also be entitled to receive:


 


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(a) an amount (the “Section 6.3 Termination
Amount”) in lieu of any other cash compensation beyond that provided in the
immediately preceding sentence, which amount shall be equal to two and ninety
nine one hundredths (2.99) times Executive’s annual Base Salary; provided that
if such termination or resignation occurs within 90 days prior to calendar year
end, Executive shall have the option to defer payment, without interest, of the
Section 6.3 Termination Amount to January 1 of the next year; and


(b) continued
coverage for a 30-month period under any employee medical, health and life
insurance plans in accordance with the respective terms thereof applicable to
active employees (other than the requirement of continued employment);
provided, however, that payments and benefits due hereunder shall be reduced by
any amounts owed by the Executive to the Company.


A
Non-Negotiated Change of Control shall be deemed to have occurred upon both of
the following occurring after the date of the Company’s initial public
offering, subject in each case to the requirement that the Board of Directors
of the Company shall have failed and/or refused to approve the Change of
Control transaction and, regardless of such failure or refusal, a Change in
Control occurs, defined as: (A) any individual, entity, or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)), other than James E. Lewis or any entity or
organization controlled by such person (collectively, the “Lewis Affiliates”),
beneficially owns (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) or acquires 20% or more of the combined voting power of the
then-outstanding voting securities of the Company entitled to vote generally in
the election of directors (“Voting Power”); and (B) such beneficial ownership
(as so defined) by such individual, entity or group of more than 20% of the
Voting Power then exceeds the beneficial ownership (as so defined) by the Lewis
Affiliates of the Voting Power.


6.4
Permanent Disability. If Executive is unable to engage in the activities
required by Executive’s job by reason of any medically determined physical or
mental impairment which has lasted or can be expected to last for a continuous
period of not less than six (6) consecutive months (“Permanent Disability”),
the Company or Executive may terminate Executive’s employment on written notice
thereof, and Executive shall receive or commence receiving, as soon as
practicable accrued but unpaid Base Salary and such payments under applicable
plans or programs, including but not limited to those referred to in Sections
4.1, 4.2 and 5 hereof, to which he is entitled pursuant to the terms of such
plans or programs. The Company shall obtain a disability insurance policy in an
amount that shall entitle Executive to be paid a minimum of 15 months’ Base
Salary if Executive is found to have a Permanent Disability. If the Company has
no such policy in effect at the time Executive is determined to have a
Permanent Disability, the Company shall pay Executive’s Base Salary for a 15
month period following such determination. The benefits described above are
payable to Executive only in the event Executive is employed by the Company at
the time the Permanent Disability arises.


6.5
Death. In the event of Executive’s death during the Term, Executive’s estate or
designated beneficiaries shall receive or commence receiving, as soon as
practicable, accrued but unpaid Base Salary and such payments under applicable
plans or programs, including but not limited to those referred to in Sections
4.1, 4.2 and 5 hereof, to which Executive’s estate or designated beneficiaries
are entitled pursuant to the terms of such plans or programs. The Company shall
obtain a life insurance policy on the life of the Executive as to which the
Company shall pay the premiums and as to which the Executive shall have the
right to determine the beneficiary. The benefits payable under such policy
shall be equal to a minimum of 18 months’ Base Salary being paid to the
Executive at the time of his death. If the Company has no such policy in effect
at the time Executive dies, the Company shall pay Executive’s Base Salary to
the Executive’s estate for an 18 month period following Executive’s death. The
foregoing benefits are payable only so long as the Executive’s death occurs
while he is employed by the Company.


6.6
Termination for Cause; Resignation by Executive.


(a) The
Company shall have the right to terminate the employment of Executive for
Cause. In the event that Executive’s employment is terminated by the Company
for Cause or by Executive for any reason (other than by Executive for Good
Reason or as a result of the Executive’s Permanent Disability or death) during
the Term, Executive shall not be entitled to the payment of any compensation
otherwise included under this Agreement. After the termination of Executive’s
employment under this Section 6.6, the obligations of the Company under this


 


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Agreement
to make any further payments, or provide any benefits specified herein, to
Executive shall thereupon cease and terminate.


(b) As
used herein, the term “Cause” shall be limited to any of the following from and
after the date hereof: (i) any willful breach of any material written policy of
the Company that results in material and demonstrable liability or loss to the
Company; (ii) the engaging by Executive in conduct involving moral turpitude
that causes material and demonstrable injury, monetarily or otherwise, to the
Company, including, but not limited to, misappropriation or conversion of
assets of the Company (other than immaterial assets); (iii) the charging of
Executive with, or conviction of or entry of a plea of nolo contendere to, a
felony; or (iv) a material breach of this Agreement by engaging in action in
violation of the restrictive covenants in this Agreement. No act or failure to
act by the Executive shall be deemed “willful” if done, or omitted to be done,
by him in good faith and with the reasonable belief that his action or omission
was in the best interest of the Company.


7.
Indemnification. To the fullest extent permitted by the indemnification
provisions of the certificate of incorporation and bylaws of the Company in
effect as of the date of this Agreement and the indemnification provisions of
the corporation statute of the jurisdiction of the Company’s incorporation in
effect from time to time (collectively, the “Indemnification Provisions”), and
in each case subject to the conditions hereof, the Company shall (i) indemnify
Executive, as a director and/or officer of the Company or a subsidiary of the
Company or a trustee or fiduciary of an employee benefit plan of the Company or
a subsidiary of the Company, or, if Executive shall be serving in such capacity
at the Company’s written request, as a director or officer of any other
corporation (other than a subsidiary of the Company) or as a trustee or
fiduciary of an employee benefit plan not sponsored by the Company or a
subsidiary of the Company, against all liabilities and reasonable expenses that
may be incurred by Executive in any threatened, pending, or completed action,
suit or proceeding, whether civil, criminal or administrative, or investigative
and whether formal or informal, because Executive is or was a director or
officer of the Company, a director or officer of such other corporation or a
trustee or fiduciary of such employee benefit plan, and against which Executive
may be indemnified by the Company, and (ii) pay for or reimburse the reasonable
expenses incurred by Executive in the defense of any proceeding to which
Executive is a party because Executive is or was a director or officer of the
Company, a director or officer of such other corporation or a trustee or
fiduciary of such employee benefit plan. The rights of Executive under the
Indemnification Provisions shall survive the termination of the employment of
Executive by the Company.


8.
Notices. All notices or communications hereunder shall be in writing, addressed
as follows:


To the Company:


Centennial
Specialty Foods Corporation


10700
E. Geddes Ave., Suite 170

Centennial, Colorado 80112


Attn:
Secretary


with
copies to:


Reid A. Godbolt,
Esq. 

Jones & Keller, P.C.


1625
Broadway, Suite 1600


Denver,
Colorado 80202


 


 


To Executive:


Mr. Douglas L. Evans


 


Any such notice or communication shall be
delivered by hand or by courier or sent certified or registered mail, return
receipt requested, postage prepaid, addressed as above (or to such other
address as such party may designate in a notice duty delivered as described
above), and the third business day after the actual date of mailing shall
constitute the time at which notice was given.


 


 


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9.
Separability; Legal Fees. If any provision of this Agreement shall be declared
to be invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof which shall
remain in full force and effect. The non-prevailing party shall bear the costs
of any legal fees and other fees and expenses which may be incurred by the
prevailing party in respect of enforcing its respective rights under this
Agreement except as otherwise provided herein.


10.
Assignment. This contract shall be binding upon and inure to the benefit of the
heirs and representatives of Executive and the assigns, and successors of the
Company, but neither this Agreement nor any rights or obligations hereunder
shall be assignable or otherwise subject to hypothecation by Executive (except
by will or by operation of the laws of intestate succession) or by the Company,
except that the Company may assign this Agreement to any successor (whether by
merger, purchase or otherwise) to all or substantially all of the stock, assets
or businesses of the Company, if such successor expressly agrees to assume the
obligations of the Company hereunder.


11.
Amendment. This Agreement may only be amended by written agreement of the
parties hereto.


12.
Nondisclosure of Confidential Information: Non-Competition.


(a)
Executive shall not, without the prior written consent of the Company, use,
divulge, disclose or make accessible to any other person, firm, partnership,
corporation or other entity any Confidential Information pertaining to the
business of the Company or any of its affiliates, except (i) while employed by
the Company, in the business of and for the benefit of the Company, or (ii) as
required by law. For purposes of this Section 12(a), “Confidential Information”
shall mean non-public information concerning the financial data, strategic
business plans, product development (or other proprietary product or recipe
data), customer lists, marketing, acquisition and divestiture plans and other
non-public, proprietary and confidential information of the Company, its
subsidiaries, its affiliates, retained marketing firms or retailing or
foodservice customers (the “Restricted Group”) or suppliers (including, without
limitation, any co-pack operator) or vendors that, in any case, is not
otherwise available to the public (other than by Executive’s breach of the
terms hereof).


(b)
During the period of his employment hereunder and for one year thereafter
(except in the case where Executive terminates his employment with the Company
for the Good Reason event described in clause (v) of the definition of “Good
Reason”), Executive agrees that, without the prior written consent of the
Company, (A) he will not, directly or indirectly, either as principal, manager,
agent, consultant, officer, stockholder, partner, investor, lender or employee
or in any other capacity, carry on, be engaged in, or have any financial
interest in, any business in Competition (as defined in Section 12(c)) with the
business of the Restricted Group and (B) he shall not, on his own behalf or on behalf
of any person, firm or company, directly or indirectly, solicit or hire for the
benefit of anyone, other than the Restricted Group, any person who is, or was
at any time during the six (6) months immediately preceding the time of the
solicitation or hiring by Executive employed by the Restricted Group (other
than Executive’s secretary or other administrative employee who worked directly
for him).


(c) For
purposes of this Section 12, a business shall be deemed to be in “Competition”
with the Restricted Group if it manufactures, sells or distributes ethnic
Southwestern or Mexican foods or sauces through retail locations within ten
(10) miles of any manufacturing, co-packing or retail location in which the
Company’s ethnic Southwestern foods or sauces are sold, manufactured or
co-packed by a member of the Restricted Group. Nothing in this Section 12 shall
be construed so as to preclude Executive from investing in a publicly or
privately held company, provided Executive’s beneficial ownership of any class
of such company’s securities does not exceed 4% of the outstanding securities
of such class.


(d) Executive and the Company agree that this
covenant not to compete is a reasonable covenant under the circumstances, and
further agree that if in the opinion of any court of competent jurisdiction
such restraint is not reasonable in any respect, such court shall have the
right, power and authority to excise or modify such provision or provisions of
this covenant as to the court shall appear not reasonable and to enforce the
remainder of the covenant as so amended. Executive agrees that any breach of
the covenants contained in this Section 12 would irreparably injure the
Company. Accordingly, Executive agrees that the Company may, in addition to
pursuing any other remedies it may have in equity, obtain


 


 


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an injunction against Executive from any
court having jurisdiction over the matter restraining any further violation of
this Agreement by Executive and cease making any payments otherwise required by
this Agreement; provided, however, that in the event a court of competent
jurisdiction, which recognizes the validity of the provisions of this Section
12, finds Executive not to be in violation of the provisions of this Section
12, then the Company shall pay to Executive, in a lump sum, within ten days of
such determination, all amounts that would have been payable to Executive
hereunder through the date of such determination and continue making any other
payments due with respect to periods of time subsequent to such determination
in accordance with the provisions of this Agreement.


13.
Change of Control Expenses. In the event the Executive is required to hire
counsel to negotiate on his behalf in connection with his termination or
resignation from the Company upon the occurrence of a Change of Control, or in
order to enforce the rights and obligations of the Company as provided herein,
the Company shall reimburse to the Executive all reasonable attorneys’ fees
which may be expended by the Executive in seeking to enforce the terms hereof.
Such reimbursement shall be paid every 30 days after the Executive provides
copies of invoices from the Executive’s counsel to the Company. Such invoices
may be redacted to preserve the attorney-client privilege, client
confidentiality or work product.


14.
Section 6.3 Termination Amount Adjustment.


(a)
Notwithstanding anything contained in this Agreement to the contrary, in the
event that any payment (within the meaning of Section 280G(b)(2) of the
Internal Revenue Code of 1986, as amended (the “Code”)), or distribution to or
for the benefit of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise in
connection with, or arising out of, his employment with the Company (a “Payment”
or “Payments”), would be subject to the excise tax imposed by Section 4999 of
the Code or any interest or penalties are incurred by the Executive with
respect to such excise tax (such excise tax, interest and penalties
collectively referred to as the “Excise Tax”), then the Executive shall be
entitled to receive an additional payment (a “Gross-Up Payment”) in an amount,
such that after payment by the Executive of all such taxes (including any
interest or penalties imposed with respect to such taxes) including any Excise
Tax imposed upon the Gross-Up Payment, equal to the Excise Tax imposed upon the
Payments; provided, that the Executive shall not be entitled to receive any
additional payment relating to any interest or penalties attributable to any
action or commission by the Executive in bad faith.


(b) An
initial determination shall be made by an accounting firm mutually agreeable to
the Company and the Executive and, if not agreed to within ten days after the
date of termination, a national independent accounting firm selected by the
Executive (the “Accounting Firm”) as to whether a Gross-Up Payment is required
pursuant to this Paragraph 14 and the amount of such Gross-Up Payment. To
permit the Accounting Firm to make the initial determination, the Company shall
furnish the Accounting Firm with all information reasonably required for such
firm to complete such determination as soon as practicable after the date of
termination, but in no event more than twenty-five (25) days thereafter. All
fees, costs and expenses (including, but not limited to, the cost of retaining
experts) of the Accounting Firm shall be borne by the Company and the Company
shall pay such fees, costs and expenses as they become due. The Accounting Firm
shall provide detailed supporting calculations, reasonably acceptable both to
the Company and the Executive within thirty (30) days of the date of
termination, if applicable, or such other time as requested by the Company or
by the Executive (provided the Executive reasonably believes that any of the
Payments may be subject to the Excise Tax). The Gross-Up Payment, if any, as
determined pursuant to this Paragraph 14 shall be paid by the Company to the
Executive within five (5) business days of the receipt of the Accounting Firm’s
determination. If the Accounting Firm determines that no Excise Tax is payable
by the Executive with respect to a Payment or Payments, it shall furnish the
Executive with an opinion reasonably satisfactory to the Executive that no
Excise Tax will be imposed with respect to any such Payment or Payments. Any
such initial determination by the Accounting Firm of the Gross-Up Payment shall
be binding upon the Company and the Executive subject to the application of this
Paragraph 14.


(c) As a
result of the uncertainty in the application of Sections 4999 and 280G of the
Code, it is possible that a Gross-Up Payment (or a portion thereof) will be
paid which should not have been paid (an “Overpayment”) or a Gross-Up Payment or
a portion thereof which should have been paid will not have been paid (an “Underpayment”).
An Underpayment shall be deemed to have occurred upon a “Final Determination”
(as hereinafter defined) that the


 


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tax
liability of the Executive (whether in respect of the then current taxable year
of the Executive or in respect of any prior taxable year of the Executive) will
be increased by reason of the imposition of the Excise Tax on a Payment or
Payments with respect to which the Company has failed to make a sufficient
Gross-Up Payment. An Overpayment shall be deemed to have occurred upon a “Final
Determination” (as hereinafter defined) that the Excise Tax shall not be
imposed (or shall be reduced) upon a Payment or Payments with respect to which
the Executive had previously received a Gross-Up Payment. A Final Determination
shall be deemed to have occurred when (i) in the case of an Overpayment, the
Executive has received from the applicable government tax liability authority a
refund of tax or other reduction in his tax liability imposed as a result of a
Payment or, in the case of an Underpayment, the Executive receives notice from
a competent governmental taxing authority that his tax liability imposed as a result
of a Payment will be increased, and (ii) in the case of an Overpayment or an
Underpayment, upon either (x) the date a determination is made by, or an
agreement is entered into with, the applicable governmental taxing authority
which finally and conclusively binds the Executive and such taxing authority,
or in the event that a claim is brought before a court of competent
jurisdiction, the date upon which a final determination has been made by such
court and either all appeals have been taken and finally resolved or the time
for all appeals have been taken and finally resolved or the time for all
appeals has expired, or (y) the statute of limitations with respect to the
Executive’s applicable tax return has expired. If an Underpayment occurs, the
Executive shall promptly notify the Company and the Company shall promptly pay
to the Executive an additional Gross-Up Payment equal to the amount of the
Underpayment plus an interest and penalties imposed on the Underpayment (other
than interest and penalties attributable to any action or omission by the
Executive in bad faith). If an Overpayment occurs, the amount of the
Overpayment shall be treated as a loan by the Company to the Executive and
Executive shall, within ten (10) business days of the occurrence of such
overpayment, pay the Company the amount of the Overpayment, with interest
computed in the same manner as for an Underpayment.


(d)
Notwithstanding anything contained in this Agreement to the contrary, in the
event it is determined that an Excise Tax will be imposed on any Payment or
Payments, the Company shall pay to the applicable governmental taxing
authorities as Excise Tax withholding, the amount of the Excise Tax that the
Company has actually withheld from the Payment or Payments.


15.
Inventions Assignment. During the Term, the Executive shall promptly disclose,
and hereby grant and assign to the Company for its sole use and benefit any and
all recipes, inventions, improvements, technical information and suggestions
reasonably relating to the business of the Company or any of its subsidiaries
(collectively, the “Inventions”) which the Executive may develop or acquire
during the Term (whether or not during usual working hours), together with all
trademarks, service marks, patent applications, letters patent, copyrights and
reissues thereof that may at any time be granted for or with respect to the
Inventions. In connection therewith, (a) the Executive shall, at the expense of
the Company (including a reasonable payment based on the Executive’s last per diem
earnings with the Company) for the time involved if the Executive is not then
in the Company’s or any of its subsidiaries’ employ, promptly execute and
deliver such applications, assignments, descriptions and other instruments as
may be necessary or proper in the opinion of the Company to vest title to the
Inventions and any patent applications, patents, copyrights, reissues or other
proprietary rights related thereto in the Company and to enable it to obtain
and maintain the entire right and title thereto throughout the world, and (b)
the Executive shall render to the Company, at its expense (including a
reasonable payment based on the Executive’s last per diem earnings with the
Company) for the time involved if the Executive is not then in the Company’s or
any of its subsidiaries’ employ, such reasonable assistance as the Company may
require in the prosecution of applications for said patents, copyrights,
reissues or other proprietary rights, in the prosecution or defense of
interferences which may be declared involving any said applications, patents,
copyrights or other proprietary rights and in any litigation in which the
Company or any of its subsidiaries may be involved relating to the Inventions.


16.
Assistance in Litigation. At the request and expense of the Company (including
a reasonable payment based on the Executive’s last per diem earnings with the
Company) for the time involved if the Executive is not then in the Company’s or
any of its subsidiaries’ employ or receiving severance payments from the
Company or any of its subsidiaries pursuant to Section 8(c)(ii)) and upon
reasonable notice, the Executive shall, at all times during and for a period of
five years after the Employment Period, furnish such information and assistance
to the Company as it may reasonably require in connection with any issue, claim
or litigation in which the Company or any of its subsidiaries may be involved
(other than any such issue, claim or litigation with respect to which the
Executive is a party adverse to the Company). During such period, the Executive
shall provide such assistance at those times and


 


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places as
may be reasonably requested by the Company and not unreasonably inconvenient to
the Executive. The Executive shall not, pursuant to this Section 16 or Section
15 hereof, be required to provide such assistance under this Section 16 or
Section 15 hereof for more than three consecutive days or for an aggregate of
15 days or more in any consecutive six-month period.


17.
Provisions Concerning Acceleration of Option Vesting. Unless otherwise provided
in the Company’s stock option plans then in effect, upon the occurrence of a
Non-Negotiated Change of Control the vesting period of any options then held by
the Executive shall automatically be accelerated unless the option grant
agreement issued to the Executive by the Compensation Committee of the Board of
Directors or the entire Board of Directors of the Company specifically
prohibits accelerated vesting. Any vesting periods applicable to options held
by the Executive will automatically be accelerated if, after occurrence of a
Non-Negotiated Change of Control, the duties or responsibilities, working
facilities or benefits provided to the Executive prior to the date of such
Non-Negotiated Change of Control are in any manner materially diminished. In
the event the Company terminates this agreement without cause, the vesting
periods for any options then held by the Executive shall be accelerated and the
Executive shall be provided a two-year period in which to exercise such
accelerated options.


18.
Beneficiaries: References. Executive shall be entitled to select (and change,
to the extent permitted under any applicable law) a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder
following Executive’s death, and may change such election, in either case by
giving the Company written notice thereof. In the event of Executive’s death or
a judicial determination of his incompetence, reference in this Agreement to
Executive shall be deemed, where appropriate, to refer to his beneficiary,
estate or other legal representative, and the Company shall pay amounts payable
under this Agreement, unless otherwise provided herein, in accordance with the
terms of this Agreement, to Executive’s personal or legal representatives,
executors, administrators, heirs, distributees, devisees, legatees or estate,
as the case may be. Any reference to the masculine gender in this Agreement
shall include, where appropriate, the feminine.


19.
Survival. The respective rights and obligations of the parties hereunder shall
survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations. The provisions of this
Section 14 are in addition to the survivorship provisions of any other section
of this Agreement.


20.
Governing Law. This Agreement shall be construed, interpreted and governed in
accordance with the laws of the State of Colorado, without reference to rules
relating to conflicts of law.


21.
Effect on Prior Agreements. Except for any amendments to this Agreement agreed
to by the parties in writing from and after the date hereof, this Agreement
contains the entire understanding between the parties hereto and supersedes in
all respects any prior or other agreement or understanding between the Company
or any affiliate of the Company and Executive.


22.
Withholding. The Company shall be entitled to withhold from payment any amount
of withholding required by law.




23. Counterparts. This Agreement may be executed in two or more counterparts,
each of which will be deemed an original.


24.
Mutual Waiver of Jury Trial. BECAUSE DISPUTES ARISING IN CONNECTION WITH
COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE LAWS TO APPLY
(RATHER THAN ARBITRATION RULES) AND THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR
PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS
AGREEMENT OR ANY DOCUMENTS RELATED HERETO.


 


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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
set forth in the first paragraph.


 


 


CENTENNIAL SPECIALTY FOODS CORPORATION


 


 




	
  By: 

  	
  /s/ JEFFREY R. NIEDER

  
	
  Name:

  	
  Jeffrey R. Nieder 

  
	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  






 


EXECUTIVE 


 


 


	
   

  	
  /s/ DOUGLAS L. EVANS

  
	
  Name:

  	
  Douglas L. Evans

  
	
   

  	
   

  
	
   

  	
   

  



 


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