**EXHIBIT 10.26**

 

**EMPLOYMENT AGREEMENT**

ThisEMPLOYMENT AGREEMENT is made as of February 28, 2005, effective as of February28, 2005, (this “Agreement”) by and between Centennial Specialty FoodsCorporation, a Delaware corporation (the “Company”), and Douglas L. Evans (“Executive”).

**RECITALS**

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

Executiveis willing to accept such employment and perform services for the Company, onthe terms and conditions hereinafter set forth.

It istherefore hereby agreed by and between the parties as follows:

1.Employment.

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

1.2Duties. Subject to the terms and conditions of this Agreement, Executive herebyagrees to be employed as the Chief Financial Officer of the Company and StokesCanning Company and agrees to devote such working time and efforts (except forpermitted vacation periods and reasonable periods of illness and otherincapacity), to the best of his ability, experience and talent, to theperformance of services, duties and responsibilities in connection therewith sothat such performance shall be his primary business activity. Executive shallperform such duties and exercise such powers with respect to the activities ofthe Company, commensurate with his positions, as the Chief Financial Officer ofthe Company, as the CEO and the Board shall from time to time reasonablydelegate to him.

1.3 OtherService. Nothing in this Agreement shall preclude Executive from serving onboards of directors of other companies or trade organizations and participatingin charitable, community or religious activities that do not substantiallyinterfere with his duties and responsibilities hereunder or conflict with theinterest of the Company.

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

 

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2. Term.

2.1 Termof Employment. Executive’s term of employment under this Agreement shallcommence as of the Effective Date (as defined below), and, subject to the termshereof, shall terminate on the earlier of (i) the third anniversary of theEffective Date, or (ii) termination of Executive’s employment pursuant to thisAgreement (the “Term”); provided, however, that any termination of employmentby Executive (other than for death or Permanent Disability) or by the Companymay 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 anytermination of employment.

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

3.Compensation.

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

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

4.Employee Benefits.

4.1Employee Benefit Programs, Plans and Practices. Once the Company adopts orestablishes any employee pension and welfare benefit programs, plans andpractices (to the extent permitted under any employee benefit plan) that aremade available to its senior executives, the Executive shall have the right toparticipate in such programs to the same extent, and on the same terms, asother senior executives of the Company.

4.2Vacation. While employed hereunder, Executive shall be entitled to no less than20 business days paid vacation in each calendar year, which shall be taken atsuch times as are consistent with Executive’s responsibilities hereunder.

5.Expenses. Executive is authorized to incur reasonable expenses in carrying outhis duties and responsibilities under this Agreement. The Company willreimburse Executive for such expenses upon presentation by Executive from timeto time of appropriately itemized and approved (consistent with the Company’spolicy) accounts of such expenditures.

6.Termination of Employment.

6.1Termination Without Cause. Except as provided in Section 6.3, if Executive’semployment is terminated by the Company (other than for Permanent Disability,death or Cause), Executive shall receive such payments, if any, underapplicable plans or programs, including but not limited to those referred to inSection 4.1 hereof, to which he is entitled Pursuant to the terms of such plansor 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 toreimbursement hereunder. If Executive is terminated under this Section 6.1,Executive shall also be entitled to receive:

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

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

In noevent shall Executive be obligated to seek other employment or take any otheraction by way of mitigation of the amounts payable to Executive under any ofthe provisions of this Agreement and such amounts shall not be reduced whetheror not Executive obtains other employment.

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

(a) anamount (the “Section 6.2 Termination Amount”) in lieu of any other cashcompensation beyond that provided in the immediately preceding sentence, whichamount shall be equal to the Executive’s Base Salary for a 12 month periodpayable in a lump sum within 30 days following such termination of employment;provided that if such resignation occurs within 90 days prior to calendar yearend, Executive shall have the option to defer payment, without interest, of theSection 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 andlife insurance plans in accordance with the respective terms thereof applicableto active employees (other than the requirement of continued employment);provided, however, that payments and benefits due hereunder shall be reduced byany amounts owed by the Executive to the Company.

“GoodReason” 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 takenin bad faith and which is remedied within twenty (20) days after receipt ofwritten notice thereof given by Executive; or the assignment to Executive ofany duties inconsistent with Executive’s position (including status orreporting requirements), authority, or material responsibilities, or theremoval of Executive’s authority or material responsibilities, excluding forthis purpose an action not taken in bad faith and which is remedied by theCompany within twenty (20) days after receipt of notice thereof given byExecutive, (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 hissole discretion, excluding a transfer to the Phoenix, Arizona metropolitan areaor within the Denver, Colorado metropolitan area, (iv) a material breach ofthis Agreement by the Company which is not remedied within twenty (20) daysafter receipt of written notice thereof given by Executive, (v) Executive isnot the Chief Financial Officer of Stokes Canning Company, or (vi) Executive isnot the Chief Financial Officer of the Company.

6.3Termination During a Non-Negotiated Change of Control. Notwithstanding Section6.1 or 6.2, if within three months prior to or one year after a Non-NegotiatedChange of Control (as defined below), Executive’s employment is terminated bythe Company (other than for Permanent Disability, death or Cause) or theExecutive resigns for Good Reason, Executive shall receive such payments, ifany, under applicable plans or programs, including but not limited to thosereferred to in Section 4.1 hereof, to which he is entitled pursuant to theterms of such plans or programs, and any unpaid payments of Base Salarypreviously earned and accrued vacation and expenses incurred for whichExecutive is entitled to reimbursement hereunder. If Executive is terminated orresigns under this Section 6.3, Executive shall also be entitled to receive:

 

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

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

ANon-Negotiated Change of Control shall be deemed to have occurred upon both ofthe following occurring after the date of the Company’s initial publicoffering, subject in each case to the requirement that the Board of Directorsof the Company shall have failed and/or refused to approve the Change ofControl transaction and, regardless of such failure or refusal, a Change inControl occurs, defined as: (A) any individual, entity, or group (within themeaning 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 ororganization controlled by such person (collectively, the “Lewis Affiliates”),beneficially owns (within the meaning of Rule 13d-3 promulgated under theExchange Act) or acquires 20% or more of the combined voting power of thethen-outstanding voting securities of the Company entitled to vote generally inthe election of directors (“Voting Power”); and (B) such beneficial ownership(as so defined) by such individual, entity or group of more than 20% of theVoting Power then exceeds the beneficial ownership (as so defined) by the LewisAffiliates of the Voting Power.

6.4Permanent Disability. If Executive is unable to engage in the activitiesrequired by Executive’s job by reason of any medically determined physical ormental impairment which has lasted or can be expected to last for a continuousperiod of not less than six (6) consecutive months (“Permanent Disability”),the Company or Executive may terminate Executive’s employment on written noticethereof, and Executive shall receive or commence receiving, as soon aspracticable accrued but unpaid Base Salary and such payments under applicableplans or programs, including but not limited to those referred to in Sections4.1, 4.2 and 5 hereof, to which he is entitled pursuant to the terms of suchplans or programs. The Company shall obtain a disability insurance policy in anamount that shall entitle Executive to be paid a minimum of 15 months’ BaseSalary if Executive is found to have a Permanent Disability. If the Company hasno such policy in effect at the time Executive is determined to have aPermanent Disability, the Company shall pay Executive’s Base Salary for a 15month period following such determination. The benefits described above arepayable to Executive only in the event Executive is employed by the Company atthe time the Permanent Disability arises.

6.5Death. In the event of Executive’s death during the Term, Executive’s estate ordesignated beneficiaries shall receive or commence receiving, as soon aspracticable, accrued but unpaid Base Salary and such payments under applicableplans or programs, including but not limited to those referred to in Sections4.1, 4.2 and 5 hereof, to which Executive’s estate or designated beneficiariesare entitled pursuant to the terms of such plans or programs. The Company shallobtain a life insurance policy on the life of the Executive as to which theCompany shall pay the premiums and as to which the Executive shall have theright to determine the beneficiary. The benefits payable under such policyshall be equal to a minimum of 18 months’ Base Salary being paid to theExecutive at the time of his death. If the Company has no such policy in effectat the time Executive dies, the Company shall pay Executive’s Base Salary tothe Executive’s estate for an 18 month period following Executive’s death. Theforegoing benefits are payable only so long as the Executive’s death occurswhile he is employed by the Company.

6.6Termination for Cause; Resignation by Executive.

(a) TheCompany shall have the right to terminate the employment of Executive forCause. In the event that Executive’s employment is terminated by the Companyfor Cause or by Executive for any reason (other than by Executive for GoodReason or as a result of the Executive’s Permanent Disability or death) duringthe Term, Executive shall not be entitled to the payment of any compensationotherwise included under this Agreement. After the termination of Executive’semployment under this Section 6.6, the obligations of the Company under this

 

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Agreementto make any further payments, or provide any benefits specified herein, toExecutive shall thereupon cease and terminate.

(b) Asused herein, the term “Cause” shall be limited to any of the following from andafter the date hereof: (i) any willful breach of any material written policy ofthe Company that results in material and demonstrable liability or loss to theCompany; (ii) the engaging by Executive in conduct involving moral turpitudethat causes material and demonstrable injury, monetarily or otherwise, to theCompany, including, but not limited to, misappropriation or conversion ofassets of the Company (other than immaterial assets); (iii) the charging ofExecutive with, or conviction of or entry of a plea of nolo contendere to, afelony; or (iv) a material breach of this Agreement by engaging in action inviolation of the restrictive covenants in this Agreement. No act or failure toact 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 omissionwas in the best interest of the Company.

7.Indemnification. To the fullest extent permitted by the indemnificationprovisions of the certificate of incorporation and bylaws of the Company ineffect as of the date of this Agreement and the indemnification provisions ofthe corporation statute of the jurisdiction of the Company’s incorporation ineffect from time to time (collectively, the “Indemnification Provisions”), andin each case subject to the conditions hereof, the Company shall (i) indemnifyExecutive, as a director and/or officer of the Company or a subsidiary of theCompany or a trustee or fiduciary of an employee benefit plan of the Company ora subsidiary of the Company, or, if Executive shall be serving in such capacityat the Company’s written request, as a director or officer of any othercorporation (other than a subsidiary of the Company) or as a trustee orfiduciary of an employee benefit plan not sponsored by the Company or asubsidiary of the Company, against all liabilities and reasonable expenses thatmay be incurred by Executive in any threatened, pending, or completed action,suit or proceeding, whether civil, criminal or administrative, or investigativeand whether formal or informal, because Executive is or was a director orofficer of the Company, a director or officer of such other corporation or atrustee or fiduciary of such employee benefit plan, and against which Executivemay be indemnified by the Company, and (ii) pay for or reimburse the reasonableexpenses incurred by Executive in the defense of any proceeding to whichExecutive is a party because Executive is or was a director or officer of theCompany, a director or officer of such other corporation or a trustee orfiduciary of such employee benefit plan. The rights of Executive under theIndemnification Provisions shall survive the termination of the employment ofExecutive by the Company.

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

**To the Company:**

CentennialSpecialty Foods Corporation

10700E. Geddes Ave., Suite 170Centennial, Colorado 80112

Attn:Secretary

withcopies to:

Reid A. Godbolt,Esq. Jones & Keller, P.C.

1625Broadway, Suite 1600

Denver,Colorado 80202

 

 

**To Executive:**

**Mr. Douglas L. Evans**

 

Any such notice or communication shall bedelivered by hand or by courier or sent certified or registered mail, returnreceipt requested, postage prepaid, addressed as above (or to such otheraddress as such party may designate in a notice duty delivered as describedabove), and the third business day after the actual date of mailing shallconstitute the time at which notice was given.

 

 

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

10.Assignment. This contract shall be binding upon and inure to the benefit of theheirs and representatives of Executive and the assigns, and successors of theCompany, but neither this Agreement nor any rights or obligations hereundershall be assignable or otherwise subject to hypothecation by Executive (exceptby 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 bymerger, purchase or otherwise) to all or substantially all of the stock, assetsor businesses of the Company, if such successor expressly agrees to assume theobligations of the Company hereunder.

11.Amendment. This Agreement may only be amended by written agreement of theparties 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 thebusiness of the Company or any of its affiliates, except (i) while employed bythe Company, in the business of and for the benefit of the Company, or (ii) asrequired by law. For purposes of this Section 12(a), “Confidential Information”shall mean non-public information concerning the financial data, strategicbusiness plans, product development (or other proprietary product or recipedata), customer lists, marketing, acquisition and divestiture plans and othernon-public, proprietary and confidential information of the Company, itssubsidiaries, its affiliates, retained marketing firms or retailing orfoodservice customers (the “Restricted Group”) or suppliers (including, withoutlimitation, any co-pack operator) or vendors that, in any case, is nototherwise available to the public (other than by Executive’s breach of theterms 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 Companyfor the Good Reason event described in clause (v) of the definition of “GoodReason”), Executive agrees that, without the prior written consent of theCompany, (A) he will not, directly or indirectly, either as principal, manager,agent, consultant, officer, stockholder, partner, investor, lender or employeeor in any other capacity, carry on, be engaged in, or have any financialinterest in, any business in Competition (as defined in Section 12(c)) with thebusiness of the Restricted Group and (B) he shall not, on his own behalf or on behalfof any person, firm or company, directly or indirectly, solicit or hire for thebenefit of anyone, other than the Restricted Group, any person who is, or wasat any time during the six (6) months immediately preceding the time of thesolicitation or hiring by Executive employed by the Restricted Group (otherthan Executive’s secretary or other administrative employee who worked directlyfor him).

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

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

 

 

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an injunction against Executive from anycourt having jurisdiction over the matter restraining any further violation ofthis Agreement by Executive and cease making any payments otherwise required bythis Agreement; provided, however, that in the event a court of competentjurisdiction, which recognizes the validity of the provisions of this Section12, finds Executive not to be in violation of the provisions of this Section12, then the Company shall pay to Executive, in a lump sum, within ten days ofsuch determination, all amounts that would have been payable to Executivehereunder through the date of such determination and continue making any otherpayments due with respect to periods of time subsequent to such determinationin accordance with the provisions of this Agreement.

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

14.Section 6.3 Termination Amount Adjustment.

(a)Notwithstanding anything contained in this Agreement to the contrary, in theevent that any payment (within the meaning of Section 280G(b)(2) of theInternal Revenue Code of 1986, as amended (the “Code”)), or distribution to orfor the benefit of the Executive, whether paid or payable or distributed ordistributable pursuant to the terms of this Agreement or otherwise inconnection 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 ofthe Code or any interest or penalties are incurred by the Executive withrespect to such excise tax (such excise tax, interest and penaltiescollectively referred to as the “Excise Tax”), then the Executive shall beentitled to receive an additional payment (a “Gross-Up Payment”) in an amount,such that after payment by the Executive of all such taxes (including anyinterest or penalties imposed with respect to such taxes) including any ExciseTax imposed upon the Gross-Up Payment, equal to the Excise Tax imposed upon thePayments; provided, that the Executive shall not be entitled to receive anyadditional payment relating to any interest or penalties attributable to anyaction or commission by the Executive in bad faith.

(b) Aninitial determination shall be made by an accounting firm mutually agreeable tothe Company and the Executive and, if not agreed to within ten days after thedate of termination, a national independent accounting firm selected by theExecutive (the “Accounting Firm”) as to whether a Gross-Up Payment is requiredpursuant to this Paragraph 14 and the amount of such Gross-Up Payment. Topermit the Accounting Firm to make the initial determination, the Company shallfurnish the Accounting Firm with all information reasonably required for suchfirm to complete such determination as soon as practicable after the date oftermination, but in no event more than twenty-five (25) days thereafter. Allfees, costs and expenses (including, but not limited to, the cost of retainingexperts) of the Accounting Firm shall be borne by the Company and the Companyshall pay such fees, costs and expenses as they become due. The Accounting Firmshall provide detailed supporting calculations, reasonably acceptable both tothe Company and the Executive within thirty (30) days of the date oftermination, if applicable, or such other time as requested by the Company orby the Executive (provided the Executive reasonably believes that any of thePayments may be subject to the Excise Tax). The Gross-Up Payment, if any, asdetermined pursuant to this Paragraph 14 shall be paid by the Company to theExecutive within five (5) business days of the receipt of the Accounting Firm’sdetermination. If the Accounting Firm determines that no Excise Tax is payableby the Executive with respect to a Payment or Payments, it shall furnish theExecutive with an opinion reasonably satisfactory to the Executive that noExcise Tax will be imposed with respect to any such Payment or Payments. Anysuch initial determination by the Accounting Firm of the Gross-Up Payment shallbe binding upon the Company and the Executive subject to the application of thisParagraph 14.

(c) As aresult of the uncertainty in the application of Sections 4999 and 280G of theCode, it is possible that a Gross-Up Payment (or a portion thereof) will bepaid which should not have been paid (an “Overpayment”) or a Gross-Up Payment ora 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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taxliability of the Executive (whether in respect of the then current taxable yearof the Executive or in respect of any prior taxable year of the Executive) willbe increased by reason of the imposition of the Excise Tax on a Payment orPayments with respect to which the Company has failed to make a sufficientGross-Up Payment. An Overpayment shall be deemed to have occurred upon a “FinalDetermination” (as hereinafter defined) that the Excise Tax shall not beimposed (or shall be reduced) upon a Payment or Payments with respect to whichthe Executive had previously received a Gross-Up Payment. A Final Determinationshall be deemed to have occurred when (i) in the case of an Overpayment, theExecutive has received from the applicable government tax liability authority arefund of tax or other reduction in his tax liability imposed as a result of aPayment or, in the case of an Underpayment, the Executive receives notice froma competent governmental taxing authority that his tax liability imposed as a resultof a Payment will be increased, and (ii) in the case of an Overpayment or anUnderpayment, upon either (x) the date a determination is made by, or anagreement is entered into with, the applicable governmental taxing authoritywhich finally and conclusively binds the Executive and such taxing authority,or in the event that a claim is brought before a court of competentjurisdiction, the date upon which a final determination has been made by suchcourt and either all appeals have been taken and finally resolved or the timefor all appeals have been taken and finally resolved or the time for allappeals has expired, or (y) the statute of limitations with respect to theExecutive’s applicable tax return has expired. If an Underpayment occurs, theExecutive shall promptly notify the Company and the Company shall promptly payto the Executive an additional Gross-Up Payment equal to the amount of theUnderpayment plus an interest and penalties imposed on the Underpayment (otherthan interest and penalties attributable to any action or omission by theExecutive in bad faith). If an Overpayment occurs, the amount of theOverpayment shall be treated as a loan by the Company to the Executive andExecutive shall, within ten (10) business days of the occurrence of suchoverpayment, pay the Company the amount of the Overpayment, with interestcomputed in the same manner as for an Underpayment.

(d)Notwithstanding anything contained in this Agreement to the contrary, in theevent it is determined that an Excise Tax will be imposed on any Payment orPayments, the Company shall pay to the applicable governmental taxingauthorities as Excise Tax withholding, the amount of the Excise Tax that theCompany 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 andall recipes, inventions, improvements, technical information and suggestionsreasonably relating to the business of the Company or any of its subsidiaries(collectively, the “Inventions”) which the Executive may develop or acquireduring the Term (whether or not during usual working hours), together with alltrademarks, service marks, patent applications, letters patent, copyrights andreissues thereof that may at any time be granted for or with respect to theInventions. In connection therewith, (a) the Executive shall, at the expense ofthe Company (including a reasonable payment based on the Executive’s last per diemearnings with the Company) for the time involved if the Executive is not thenin the Company’s or any of its subsidiaries’ employ, promptly execute anddeliver such applications, assignments, descriptions and other instruments asmay be necessary or proper in the opinion of the Company to vest title to theInventions and any patent applications, patents, copyrights, reissues or otherproprietary rights related thereto in the Company and to enable it to obtainand maintain the entire right and title thereto throughout the world, and (b)the Executive shall render to the Company, at its expense (including areasonable payment based on the Executive’s last per diem earnings with theCompany) for the time involved if the Executive is not then in the Company’s orany of its subsidiaries’ employ, such reasonable assistance as the Company mayrequire in the prosecution of applications for said patents, copyrights,reissues or other proprietary rights, in the prosecution or defense ofinterferences which may be declared involving any said applications, patents,copyrights or other proprietary rights and in any litigation in which theCompany or any of its subsidiaries may be involved relating to the Inventions.

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

 

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places asmay be reasonably requested by the Company and not unreasonably inconvenient tothe Executive. The Executive shall not, pursuant to this Section 16 or Section15 hereof, be required to provide such assistance under this Section 16 orSection 15 hereof for more than three consecutive days or for an aggregate of15 days or more in any consecutive six-month period.

17.Provisions Concerning Acceleration of Option Vesting. Unless otherwise providedin the Company’s stock option plans then in effect, upon the occurrence of aNon-Negotiated Change of Control the vesting period of any options then held bythe Executive shall automatically be accelerated unless the option grantagreement issued to the Executive by the Compensation Committee of the Board ofDirectors or the entire Board of Directors of the Company specificallyprohibits accelerated vesting. Any vesting periods applicable to options heldby the Executive will automatically be accelerated if, after occurrence of aNon-Negotiated Change of Control, the duties or responsibilities, workingfacilities or benefits provided to the Executive prior to the date of suchNon-Negotiated Change of Control are in any manner materially diminished. Inthe event the Company terminates this agreement without cause, the vestingperiods for any options then held by the Executive shall be accelerated and theExecutive shall be provided a two-year period in which to exercise suchaccelerated options.

18.Beneficiaries: References. Executive shall be entitled to select (and change,to the extent permitted under any applicable law) a beneficiary orbeneficiaries to receive any compensation or benefit payable hereunderfollowing Executive’s death, and may change such election, in either case bygiving the Company written notice thereof. In the event of Executive’s death ora judicial determination of his incompetence, reference in this Agreement toExecutive shall be deemed, where appropriate, to refer to his beneficiary,estate or other legal representative, and the Company shall pay amounts payableunder this Agreement, unless otherwise provided herein, in accordance with theterms 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 Agreementshall include, where appropriate, the feminine.

19.Survival. The respective rights and obligations of the parties hereunder shallsurvive any termination of this Agreement to the extent necessary to theintended preservation of such rights and obligations. The provisions of thisSection 14 are in addition to the survivorship provisions of any other sectionof this Agreement.

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

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

22.Withholding. The Company shall be entitled to withhold from payment any amountof 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 WITHCOMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY ANEXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE LAWS TO APPLY(RATHER THAN ARBITRATION RULES) AND THE PARTIES DESIRE THAT THEIR DISPUTES BERESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THEBEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THEPARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT ORPROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THISAGREEMENT OR ANY DOCUMENTS RELATED HERETO.

 

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INWITNESS WHEREOF, the parties hereto have executed this Agreement as of the dateset 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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