Document:

EXHIBIT 10.2

 

FORM AGREEMENT

 

AMENDED AND
RESTATED

SEVERANCE AGREEMENT

 

This SEVERANCE AGREEMENT (the “Agreement”),
made and entered into as of the        day of
              ,
20     (the “Effective Date”),
between Reddy Ice Corporation, a Nevada corporation (the “Company”),
and
                        ,
an individual residing at the address set forth on Exhibit A
attached hereto (the “Executive”).

 

WHEREAS, the Company is a wholly-owned subsidiary of
Reddy Ice Holdings, Inc., a Delaware corporation (the “Parent”); and

 

WHEREAS,
the Company and Executive previously entered into a Severance Agreement dated
as of
                    
(the “Prior Agreement”); and

 

WHEREAS,
the parties acknowledge and agree that this Agreement shall replace and
supersede the Prior Agreement in its entirety; and

 

WHEREAS,
the Company and the Executive desire to enter into this Agreement in order to
continue to provide certain benefits to the Executive in the event of Executive’s
severance from employment.

 

NOW, THEREFORE, in consideration of the foregoing
and the mutual covenants herein contained and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:

 

1.                                       Termination of Employment. 
In the event the Executive’s employment terminates for the reasons set
forth in this Section 1, the Executive shall only be entitled to the
payments provided for in Section 2.

 

1.1                                 Termination upon Death. 
The Executive’s employment shall terminate as of the date of the
Executive’s death.

 

1.2                                 Termination
upon Disability.  If the
Executive becomes Disabled, the Company may terminate the Executive’s
employment by written notice to the Executive, in which event the Executive’s
employment shall terminate ten (10) days after the date upon which the
Company has given notice to the Executive of its intention to terminate the
Executive’s employment.

 

1.3                                 Termination
by the Company for Cause.  The
Company may terminate the Executive’s employment at any time for “Cause” by
written notice to the Executive.  For
purposes of this Agreement, “Cause” shall mean any of the following: if the
Executive (i) is convicted of, or pleads guilty to, a felony or a crime
involving moral turpitude, (ii) engages in independently verified,
continuing and unremedied substance abuse involving drugs or alcohol, (iii) performs
an action or fails to take an action that, in the reasonable judgment of a
majority of the disinterested members of the Board, constitutes willful
dishonesty, larceny, fraud or gross negligence by the Executive in the
performance of the Executive’s duties to the Company, or makes a knowing or
reckless misrepresentation (including by omission of any material adverse 

 

 

information) to
shareholders, directors or officers of the Parent, (iv) willfully and
repeatedly fails, after ten (10) business days notice, to materially
follow the written policies of the Company or instructions of the Board or (v) materially
breaches any agreement to which the Executive and the Company or any of its
Subsidiaries are a party, or materially breaches any written policy, rule or
regulation adopted by the Company or any of its Subsidiaries relating to
compliance with securities laws or other laws, rules or regulations and
such breach is not cured by the Executive or waived in writing by the Company
within thirty (30) days after written notice of such breach to the Executive.

 

1.4                                 Termination
by the Company without Cause.  The Company may terminate the Executive’s
employment at any time, without Cause, upon thirty (30) days’ written notice
from the Company to the Executive.

 

1.5                                 Termination
by the Executive without Good Reason.  The Executive may terminate the Executive’s
employment at any time, without Good Reason (i.e.,
the Executive’s voluntary termination), upon thirty (30) days’ written notice
from the Executive to the Company

 

1.6                                 Termination
by the Executive for Good Reason.  The Executive may terminate the Executive’s
employment for Good Reason upon thirty (30) days’ written notice from the
Executive to the Company.

 

2.                                       Severance
Payments.

 

2.1                                 Severance
Payments Upon Termination for Disability, by the Company without Cause or by
the Executive for Good Reason.  If the Executive’s employment is terminated
with the Company pursuant to Sections 1.2, 1.4 or 1.6 hereof prior to a Change
in Control, the Executive shall be entitled to a  severance
payment equal to        of
the Executive’s annual Base Salary then in effect, which shall be paid in a
lump sum within 30 days after the Executive’s termination of employment plus
the Prorated Bonus (as defined below), without offset for other earnings or
benefits, and the Executive’s equity grants shall be deemed vested to the
extent the grant agreements issued to the Executive under the Company’s
long-term incentive plan provide for vesting in such circumstances; provided,
however, that if such termination occurs within 24 months after a Change in
Control, the
Executive shall be entitled to the following:

 

2.1.1                        a severance payment equal to
       times the Executive’s Base Salary then in
effect, which shall be paid in a lump sum
within 30 days after the Executive’s termination of employment;

 

2.1.2                        continued participation in the Company’s health and
welfare plans for a period of eighteen (18) months (coincident with COBRA
continuation coverage) for himself and his dependents to the extent such
continued participation is permitted by the terms of such plans provided
that (i) he shall pay the premiums for such benefits at rates assessed for
active employees, (ii) nothing contained herein shall require the Company to
maintain any group benefit plans for its employees or prevent the Company from
modifying its group benefit plans or contribution level for its employees and (iii) nothing
contained herein shall require the Company to secure new benefit plans to
provide any such benefits;

 

2

 

2.1.3                        a pro rata portion of the Executive’s performance
bonus for the year in which the Executive’s termination of employment occurs
(prorated for the portion of such year in which Executive was an active
employee of the Company); provided that such prorated bonus shall only
be payable if and to the extent that the performance criteria for such bonus
are satisfied and provided further that such prorated bonus shall be
payable at the time bonuses for active employees in respect of such year are
paid, but, in any event, during the calendar year immediately following the
calendar year to which the bonus relates (the “Prorated Bonus”); and

 

2.1.4                        immediate and full vesting of any non-performance
based options to purchase shares of the Company’s stock, restricted stock of
the Company or equity grants outstanding as of the date of the Executive’s
termination.

 

2.2                                 Severance
Payments and Vesting Upon Termination for Cause, Death or by the Executive
Without Good Reason.  If the
Executive’s employment with the Company is terminated pursuant to Sections 1.1,
1.3 or 1.5 hereof, the Executive shall receive only all previously earned,
accrued and unpaid Base Salary and benefits from the Company and its employee
benefit plans, including any such benefits under pension, disability and life
insurance plans, policies (including vacation policies) and programs applicable
to the Company and the Executive’s equity grants shall be deemed vested to the
extent the grant agreements issued to the Executive under the Company’s
long-term incentive plan provide for vesting in such circumstances.

 

2.3                                 Section 280G.  The Executive shall bear all expense of, and be solely
responsible for, all federal, state, local or foreign taxes due with respect to
any payment received hereunder, including, without limitation, any excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended
(the “Code”); provided, however, that any payment or benefit received or to be
received by the Executive in connection with a Change in Control or the
termination of the Executive’s employment (whether payable pursuant to the
terms of this Agreement (“Contract Payments”) or any other plan, arrangements
or agreement with the Company or any affiliate (collectively with the Contract
Payments, the “Total Payments”) shall be reduced to the extent necessary so
that no portion thereof shall be subject to the excise tax imposed by Section 4999
of the Code but only if, by reason of such reduction, the net after-tax benefit
received by the Executive shall exceed the net after-tax benefit that would be
received by the Executive if no such reduction was made.

 

For purposes of this Section 2.3, “net after-tax
benefit” shall mean (i) the total of all payments and the value of all
benefits which the Executive receives or is then entitled to receive from the
Company that would constitute “excess parachute payments” within the meaning of
Section 280G of the Code, less (ii) the amount of all federal, state
and local income taxes payable with respect to the foregoing calculated at the
maximum marginal income tax rate for each year in which the foregoing shall be
paid to the Executive (based on the rate in effect for such year as set forth
in the Code as in effect at the time of the first payment of the foregoing),
less (iii) the amount of excise taxes imposed with respect to the payments
and benefits described in (i) above by Section 4999 of the Code.

 

The foregoing determination shall be made by a
nationally recognized accounting firm (the “Accounting Firm”) selected by the
Company and reasonably acceptable to the Executive.  

 

3

 

The
Accounting Firm shall submit its determination and detailed supporting
calculations to both the Executive and the Company within fifteen (15) days
after receipt of a notice from either the Company or the Executive that the
Executive may receive payments which may be “parachute payments.”  If the Accounting Firm determines that a
reduction is required by this Section 2.3, the cash portion of the Total
Payments shall be reduced to the extent necessary so that no portion of the
Total Payments shall be subject to the excise tax imposed by Section 4999
of the Code, and the Company shall pay such reduced amount to the
Executive.  If the Accounting Firm
determines that none of the Total Payments, after taking into account any
reduction required by this Section 2.3, constitutes a “parachute payment”
within the meaning of Section 280G of the Code, it will, at the same time
as it makes such determination, furnish the Executive and the Company an
opinion that Executive has substantial authority not to report any excise tax
under Section 4999 of the Code on his federal income tax return.

 

The Executive and the Company shall each provide the
Accounting Firm access to and copies of any books, records, and documents in
the possession of the Executive or the Company, as the case may be, reasonably
requested by the Accounting Firm, and otherwise cooperate with the Accounting
Firm in connection with the preparation and issuance of the determinations and
calculations contemplated by this Section 2.3.  The fees and
expenses of the Accounting Firm for its services in connection with the
determinations and calculations contemplated by this Section 2.3  shall be borne by the Company.

 

2.3                                 Section 409A Compliance.

 

(i)                                 2.3.1       General Compliance.  This
Agreement is intended to be exempt from, or otherwise comply with, Section 409A
of the Internal Revenue Code of 1986, as amended, and the regulations and other
guidance issued thereunder (collectively referred to herein as “Code Section 409A”).  The Company shall undertake to administer,
interpret, and construe this Agreement in a manner that does not result in the
imposition on the Executive of any additional tax, penalty, or interest under Section 409A
of the Code.  The Company and Executive
agree that they will execute any and all amendments to this Agreement as they
mutually agree in good faith may be necessary to ensure compliance with the
provisions of Code Section 409A; however, the Company does not guarantee
any particular tax effect to Executive under this Agreement, and shall not be
liable to Executive for any payment made under this Agreement at the direction
or consent of Executive, which is determined to result in an additional tax,
penalty or interest under Code Section 409A, nor for reporting in good
faith any payment made under this Agreement as an amount includible in gross
income under Code Section 409A. 
Notwithstanding anything in this Agreement to the contrary, if a payment
obligation arises on account of Executive’s separation from service while
Executive is a “specified employee,” as described in Code Section 409A,
and as determined by the Company in accordance with its procedures, by which
determination Executive shall be bound, any payment of “deferred compensation”
as defined under Code Section 409A, after giving effect to the exemptions
available under Code Section 409A, shall be made on the first business day
of the seventh month following the date of Executive’s separation from service,
or, if earlier, within fifteen (15) days after the appointment of the personal
representative or executor of Executive’s estate following the Executive’s
death.  With respect to any reimbursement
of expenses of, or any provision of in-kind benefits to, the 

 

4

 

Executive, as
specified under this Agreement, such reimbursement of expenses or provision of
in-kind benefits shall be subject to the following conditions: (1) the
expenses eligible for reimbursement or the amount of in-kind benefits provided
in one taxable year shall not affect the expenses eligible for reimbursement or
the amount of in-kind benefits provided in any other taxable year, except for
any medical reimbursement arrangement providing for the reimbursement of
expenses referred to in Section 105(b) of the Code; (2) the
reimbursement of an eligible expense shall be made no later than the end of the
year after the year in which such expense was incurred; and (3) the right
to reimbursement or in-kind benefits shall not be subject to liquidation or
exchange for another benefit.

 

2.3.2                        Separation
from Service.  “Termination of
employment,” “resignation,” or words of similar import, as used in this
Agreement means, for purposes of any payments under this Agreement that are
payments of deferred compensation subject to Section 409A of the Code, the
Executive’s “separation from service” as defined in Section 409A of the
Code.

 

3.                                       Non-Solicitation and
Confidentiality Agreement

 

The Executive hereby confirms and acknowledges that the Executive is
subject to the provisions set forth in the Employee Non-Disclosure, Assignment,
Non-Competition, and Non-Solicitation Agreement attached hereto as Exhibit B
(the “Non-Disclosure Agreement”).  The
provisions of this Agreement shall apply where there is a conflict between this
Agreement and the Non-Disclosure Agreement.

 

4.                                       Other
Provisions.

 

4.1                                 Notices.  Notice under this Agreement shall be in
writing and shall be deemed given when received by the party to be notified (a) when
given in person, (b) on the first day after delivery to Federal Express or
other overnight courier, postage prepaid and (c) upon transmission by
telecopier with confirmation by United States mail, in each case at the address
for the intended recipient as set forth below:

 

(i)                                     if to
the Company, to:

 

Reddy Ice Corporation

8750 North Central Expressway, Suite 1800

Dallas, Texas 75231

Telecopier:  (214) 528-1532

Attention:    Chairman of the Board

 

with a copy (which shall not
constitute notice) to:

 

DLA Piper LLP (US)

1251 Avenue of the Americas

5

 

New York, New York 10020

Attention:    Roger Meltzer, Esq.

 

(ii)                                if to the
Executive, to the Executive at the address set forth on Exhibit A
attached hereto or to the telecopier number set forth below:

 

Telecopier: 
(214) 528-1532

 

4.2                                 Entire
Agreement.  This
Agreement (and the Exhibits attached hereto including the Non-Disclosure
Agreement) contains the entire agreement between the parties with respect to
the specific subject matter hereof and replaces and supersedes any and all
prior employment contracts and other related agreements, written or oral, with
respect thereto, as well as any and all entitlements which have accrued as of
the date of this Agreement that the Executive may otherwise have with or derive
from the Company.  This Agreement should
be read in conjunction with any agreements providing for compensation to the
Executive pursuant to the Company’s long-term incentive plans and any
indemnification agreements between the Company and the Executive or
indemnification policies or rights under any of the Company’s corporate
charter, bylaws or other documents, and any policies of insurance which provide
coverage for any defense of the Executive or coverage for the Executive, all of
which are incorporated herein for the benefit of the Executive.

 

4.3                                 Waivers
and Amendments.  This
Agreement may be amended, modified, superseded, canceled, renewed or extended,
and the terms and conditions hereof may be waived, only by a written instrument
signed by the parties or, in the case of a waiver, by the party waiving
compliance.  No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any party of any right,
power or privilege hereunder, nor any single or partial exercise of any right,
power or privilege hereunder, preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder.

 

4.4                                 Governing
Law.  This Agreement shall be
governed by, and construed in accordance with and subject to, the laws of the
State of Texas, without giving effect to the principles of conflicts of law.

 

4.5                                 Arbitration.  Any dispute or controversy arising out of or
in connection with this Agreement or the Executive’s employment or the
termination thereof, including, but not limited to, any claim of discrimination
under federal or state law, shall be subject to and settled exclusively by
binding arbitration in Dallas, Texas, in accordance with the rules of the
American Arbitration Association then in effect.  Judgment may be entered on the arbitrators’
award in any court having jurisdiction and reasonable attorneys’ fees and shall
be awarded to the prevailing party.  The
arbitrators shall determine the allocation of the costs and expenses arising in
connection with any arbitration proceeding pursuant to this Section 4.5
based on the arbitrators’ assessment of the merits of the positions of the
parties.

 

6

 

4.6                                 Binding
Effect; Benefit.  This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and any heirs, successors and assigns. 
Nothing in this Agreement, expressed or implied, is intended to confer
on any person other than the parties hereto or such heirs, successors and
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Agreement.

 

4.7                                 Assignment.  This Agreement, and the Executive’s rights
and obligations hereunder, may not be assigned by the Executive; provided, however, that such rights and obligations shall be
enforceable by the Executive’s legal representatives, heirs and other
successors in interest.  The Company
shall assign this Agreement and its rights, together with its obligations,
hereunder in connection with any sale, transfer or other disposition of all or
substantially all of its assets or business, whether direct or indirect, by
purchase, merger, consolidation or otherwise.

 

4.8                                 Number
and Gender.  As used
herein, the singular shall include the plural and vice versa and words used in
one gender shall include all others as appropriate.

 

4.9                                 Withholding
of Taxes.  The Company
may withhold from any compensation or benefits payable under this Agreement all
federal, state, city and other taxes as shall be required pursuant to any law
or governmental regulation or ruling.

 

4.10                           Definitions.  For purposes of this Agreement:

 

(i)                                     “Base  Salary” shall mean means Executive’s annual base salary,
which is
$              
as of the date of this Agreement, as such amount may be changed and in effect
from time to time.  Notwithstanding the
foregoing, Base Salary shall be determined without regard to any change that
would constitute Good Reason.

 

(ii)                                  “Change in Control” shall mean  the
earliest to occur of any of the following events on or before the third
anniversary of the Effective Date:  a (a) Change
in Ownership of the Company, (b) Change in Board Membership, (c) Change
in the Ownership of Assets of the Company, or (d) a Merger, Consolidation,
or Reorganization as described herein:

 

(a)                                  A Change in
Ownership of the Company shall occur on the date that any one Person
or Persons Acting as a Group acquires ownership of (or has acquired ownership
during the 12 month period ending on the date of the most recent acquisition by
such Person) more than 30% of the total voting power of the capital stock of
the Company (except with respect to the occurrence of a Merger, Consolidation,
or Reorganization as provided for in paragraph (d) below).

 

(b)                                 A Change in Board Membership
shall occur on the date a majority of members of the Company’s Board
is replaced during any 12-month period by directors whose appointment or
election is not endorsed by a majority of the members of the Company’s Board
before the date of the appointment or election.

 

(c)                                  A Change in the Ownership of Assets of the Company shall occur
on the date that any one Person acquires, or Persons Acting as a Group acquire
(or has or have acquired during the 12-month period ending on the date of the
most 

 

7

 

recent acquisition by such
Person or Persons), assets from the Company that have a total gross fair market
value more than 50% of the total gross fair market value of all of the assets
of the Company immediately before such acquisition or acquisitions.  For this purpose, gross fair market value
means the value of the assets of the Company, or the value of the assets being
disposed of, determined without regard to any liabilities associated with such
assets.

 

(d)                                 A Merger,
Consolidation, or Reorganization shall occur on the date of any
merger, consolidation or reorganization involving Company immediately after
which Persons Acting as a Group who hold more than a majority of the total
voting power of the capital stock represented by outstanding voting securities
of the surviving entity are not Persons who held outstanding voting securities
of Company immediately prior to such transaction.

 

The following rules of
construction apply in interpreting the definition of Change in Control:

 

(A)                              A Person means 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, other than employee benefit plans sponsored or
maintained by the Company and by entities controlled by the Company or an
underwriter of the capital stock of the Company in a registered public
offering.

 

(B)                                Persons will be
considered to be Persons Acting as a Group (or Group) if they are owners of a
corporation that enters into a merger, consolidation, purchase or acquisition
of stock, or similar business transaction with the corporation.  If a Person owns stock in both corporations
that enter into a merger, consolidation, purchase or acquisition of stock, or
similar transaction, such shareholder is considered to be acting as a Group
with other shareholders only with respect to the ownership in that corporation
before the transaction giving rise to the change and not with respect to the
ownership interest in the other corporation. 
Persons will not be considered to be acting as a Group solely because
they purchase assets of the same corporation at the same time or purchase or
own stock of the same corporation at the same time, or as a result of the same
public offering.

 

(C)                                A Change in
Control shall not include a transfer to a related person.

 

(D)                               For purposes of
this paragraph, Code section 318(a) applies to determine stock
ownership.  Stock underlying a vested
option is considered owned by the individual who holds the vested option (and
the stock underlying an unvested option is not considered owned by the
individual who holds the unvested option). 
For purposes of the preceding sentence, however, if a vested option is
exercisable for stock that is not substantially vested (as defined by Treasury
Regulation §1.83-3(b) and (j)), the stock underlying the option is not
treated as owned by the individual who holds the option.

 

8

 

(ii)                                  “Disabled” or “Disability”
shall mean, with respect to the Executive, (a) the occurrence of a period
of 90 consecutive days or 180 out of 360 consecutive days during which the
Executive is unable to perform the Executive’s duties due to a mental or
physical impairment or (b) a determination of disability due to mental or
physical impairment by an agreed upon medical practitioner selected by the
Company and the Executive, that it is reasonably likely that an impairment
exists with respect to the Executive which will, with the passage of time,
satisfy clause (a). If the Company and the Executive are unable to agree upon a
medical practitioner, each shall select a medical practitioner and such
practitioners shall jointly select another medical practitioner who shall
determine whether or not there is a disability. 
If the two practitioners chosen by the Company and the Executive are
unable to agree upon the third practitioner, the American Arbitration
Association in Dallas, Texas shall select a medical practitioner.

 

(iii)                               “Good Reason” shall mean a separation from service (with the
meaning of Treasury Regulation Section 1.409A-1(h)) within 1 year
following the initial existence of one or more of the following conditions
arising without Executive’s consent:  (1)
a material diminution in Executive’s Base Salary; (2) a material diminution
in Executive’s title, authority, or responsibility; (3) relocation of Executive
to an office more than 50 miles from Executive’s office on the Employment Date;
or (4) a material breach by the Company of this Agreement.  Before terminating employment for Good
Reason, Executive must provide notice of the existence of the condition within
90 days following the initial existence of such condition.  Company shall have a period of thirty 30 days
after receipt of such notice to correct the situation (and thus prevent
Executive’s termination for Good Reason). 
Upon the expiration of the thirty (30) day period without cure by the
Company, Executive shall be entitled to terminate for Good Reason.

 

4.11                           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

 

4.12                           Headings.  The headings in this Agreement are for
reference purposes only and shall not in any way affect the meaning or interpretation
of this Agreement.

 

[Signature
Page Follows]

 

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IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first above written.

 

 

	
  The Company:

  	
   

  
	
   

  	
  REDDY
  ICE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:
  

  	
   

  
	
   

  	
   

  	
  Title:
  

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Executive:EXHIBIT
10.3

 

FORM AGREEMENT

 

AMENDED AND
RESTATED

SEVERANCE
AGREEMENT

 

This SEVERANCE AGREEMENT (the “Agreement”),
made and entered into as of the        day of
             ,
20     (the “Effective Date”),
between Reddy Ice Corporation, a Nevada corporation (the “Company”),
and
                        ,
an individual residing at the address set forth on Exhibit A
attached hereto (the “Executive”).

 

WHEREAS, the Company is a wholly-owned subsidiary of
Reddy Ice Holdings, Inc., a Delaware corporation (the “Parent”); and

 

WHEREAS,
the Company and Executive previously entered into a Severance Agreement dated
as of
                      
(the “Prior Agreement”); and

 

WHEREAS,
the parties acknowledge and agree that this Agreement shall replace and
supersede the Prior Agreement in its entirety; and

 

WHEREAS,
the Company and the Executive desire to enter into this Agreement in order to
continue to provide certain benefits to the Executive in the event of Executive’s
severance from employment.

 

NOW, THEREFORE, in consideration of the foregoing
and the mutual covenants herein contained and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:

 

1.                                       Termination of Employment. 
In the event the Executive’s employment terminates for the reasons set
forth in this Section 1, the Executive shall only be entitled to the
payments provided for in Section 2.

 

1.1                                 Termination upon Death. 
The Executive’s employment shall terminate as of the date of the
Executive’s death.

 

1.2                                 Termination
upon Disability.  If the
Executive becomes Disabled, the Company may terminate the Executive’s
employment by written notice to the Executive, in which event the Executive’s
employment shall terminate ten (10) days after the date upon which the
Company has given notice to the Executive of its intention to terminate the
Executive’s employment.

 

1.3                                 Termination
by the Company for Cause.  The
Company may terminate the Executive’s employment at any time for “Cause” by
written notice to the Executive.  For
purposes of this Agreement, “Cause” shall mean any of the following: if the
Executive (i) is convicted of, or pleads guilty to, a felony or a crime
involving moral turpitude, (ii) engages in independently verified,
continuing and unremedied substance abuse involving drugs or alcohol, (iii) performs
an action or fails to take an action that, in the reasonable judgment of a
majority of the disinterested members of the Board, constitutes willful
dishonesty, larceny, fraud or gross negligence by the Executive in the
performance of the Executive’s duties to the Company, or 

 

 

makes a knowing or reckless
misrepresentation (including by omission of any material adverse information)
to shareholders, directors or officers of the Parent, (iv) willfully and
repeatedly fails, after ten (10) business days notice, to materially
follow the written policies of the Company or instructions of the Board or (v) materially
breaches any agreement to which the Executive and the Company or any of its
Subsidiaries are a party, or materially breaches any written policy, rule or
regulation adopted by the Company or any of its Subsidiaries relating to
compliance with securities laws or other laws, rules or regulations and
such breach is not cured by the Executive or waived in writing by the Company
within thirty (30) days after written notice of such breach to the Executive.

 

1.4                                 Termination
by the Company without Cause.  The Company may terminate the Executive’s
employment at any time, without Cause, upon thirty (30) days’ written notice
from the Company to the Executive.

 

1.5                                 Termination
by the Executive without Good Reason.  The Executive may terminate the Executive’s
employment at any time, without Good Reason (i.e.,
the Executive’s voluntary termination), upon thirty (30) days’ written notice
from the Executive to the Company.

 

1.6                                 Termination
by the Executive for Good Reason.  The Executive may terminate the Executive’s
employment for Good Reason upon thirty (30) days’ written notice from the
Executive to the Company.

 

2.                                       Severance
Payments.

 

2.1                                 Severance Payments Upon
Termination for Disability or by the Company without Cause or by the Executive
for Good Reason after a Change in Control.  If the
Executive’s employment with the Company is terminated pursuant to Sections 1.2
or 1.4 (but not Section 1.6) prior to a Change in Control, the Executive shall be entitled to a  severance payment equal to
       of the Executive’s annual Base Salary then
in effect, which shall be paid in a lump sum within 30 days after the Executive’s
termination of employment, without offset for other earnings plus the Prorated
Bonus (as defined below); provided, however  that if a termination pursuant to Sections
1.2, 1.4 or 1.6 occurs within 24 months after a Change in Control,  the Executive shall be entitled to the following:

 

2.1.1                        a severance payment equal to
       times the Executive’s Base Salary then in
effect which shall be paid in a lump sum within 30 days after the Executive’s
termination of employment;

 

2.1.2                        continued participation in the Company’s
health and welfare plans for a period of eighteen (18) months (coincident with
COBRA continuation coverage) for himself and his dependents to the extent such
continued participation is permitted by the terms of such plans provided
that (i) he shall pay the premiums for such benefits at rates assessed for
active employees, (ii) nothing contained herein shall require the Company
to maintain any group benefit plans for its employees or prevent the Company
from modifying its group benefit plans or contribution level for its employees
and (iii) nothing contained herein shall require the Company to secure new
benefit plans to provide any such benefits;

 

2

 

2.1.3                        a pro rata portion of the Executive’s
performance bonus for the year in which the Executive’s termination of
employment occurs (prorated for the portion of such year in which Executive was
an active employee of the Company); provided that such prorated bonus
shall only be payable if and to the extent that the performance criteria for
such bonus are satisfied and provided further that such prorated bonus
shall be payable at the time bonuses for active employees in respect of such
year are paid; but, in any event, during the calendar year immediately
following the calendar year to which the bonus relates (the “Prorated Bonus”);
and

 

2.1.4                        immediate and full vesting of any
non-performance based options to purchase shares of the Company’s stock, restricted
stock of the Company or equity grants outstanding as of the date of the
Executive’s termination.

 

2.2                                 Severance Payments Upon
Termination for Cause, Death or by the Executive without Good Reason or with
Good Reason Prior to a Change in Control.  If the
Executive’s employment with the Company is terminated pursuant to Sections 1.1,
1.3, 1.5 or 1.6 prior to a Change in Control, the Executive shall receive only
all previously earned, accrued and unpaid Base Salary and benefits from the
Company and its employee benefit plans, including any such benefits under
pension, disability and life insurance plans, policies (including vacation
policies) and programs applicable to the Company.

 

2.3                                 Section 280G.  The Executive shall bear all expense of, and be
solely responsible for, all federal, state, local or foreign taxes due with
respect to any payment received hereunder, including, without limitation, any
excise tax imposed by Section 4999 of the Internal Revenue Code of 1986,
as amended (the “Code”); provided, however, that any payment or benefit
received or to be received by the Executive in connection with a Change in
Control or the termination of the Executive’s employment (whether payable
pursuant to the terms of this Agreement (“Contract Payments”) or any other
plan, arrangements or agreement with the Company or any affiliate (collectively
with the Contract Payments, the “Total Payments”) shall be reduced to the
extent necessary so that no portion thereof shall be subject to the excise tax
imposed by Section 4999 of the Code but only if, by reason of such
reduction, the net after-tax benefit received by the Executive shall exceed the
net after-tax benefit that would be received by the Executive if no such
reduction was made.

 

For
purposes of this Section 2.3, “net after-tax benefit” shall mean (i) the
total of all payments and the value of all benefits which the Executive
receives or is then entitled to receive from the Company that would constitute “excess
parachute payments” within the meaning of Section 280G of the Code, less (ii) the
amount of all federal, state and local income taxes payable with respect to the
foregoing calculated at the maximum marginal income tax rate for each year in
which the foregoing shall be paid to the Executive (based on the rate in effect
for such year as set forth in the Code as in effect at the time of the first
payment of the foregoing), less (iii) the amount of excise taxes imposed
with respect to the payments and benefits described in (i) above by Section 4999
of the Code.

 

The
foregoing determination shall be made by a nationally recognized accounting
firm (the “Accounting Firm”) selected by the Company and reasonably acceptable
to the Executive.  The Accounting Firm
shall submit its determination and detailed supporting calculations to both

 

3

 

the
Executive and the Company within fifteen (15) days after receipt of a notice
from either the Company or the Executive that the Executive may receive
payments which may be “parachute payments.” 
If the Accounting Firm determines that a reduction is required by this Section 2.3,
the cash portion of the Total Payments shall be reduced to the extent necessary
so that no portion of the Total Payments shall be subject to the excise tax imposed
by Section 4999 of the Code, and the Company shall pay such reduced amount
to the Executive.  If the Accounting Firm
determines that none of the Total Payments, after taking into account any
reduction required by this Section 2.3, constitutes a “parachute payment”
within the meaning of Section 280G of the Code, it will, at the same time
as it makes such determination, furnish the Executive and the Company an
opinion that Executive has substantial authority not to report any excise tax
under Section 4999 of the Code on his federal income tax return.

 

The
Executive and the Company shall each provide the Accounting Firm access to and
copies of any books, records, and documents in the possession of the Executive
or the Company, as the case may be, reasonably requested by the Accounting
Firm, and otherwise cooperate with the Accounting Firm in connection with the
preparation and issuance of the determinations and calculations contemplated by
this Section 2.3 .  The fees and expenses of the Accounting Firm
for its services in connection with the determinations and calculations
contemplated by this Section 2.3 
shall be borne by the Company.

 

2.3                                 Section 409A Compliance.

 

(i)                                     2.3.1                        General
Compliance.  This Agreement
is intended to be exempt from, or otherwise comply with, Section 409A of
the Internal Revenue Code of 1986, as amended, and the regulations and other
guidance issued thereunder (collectively referred to herein as “Code Section 409A”).  The Company shall undertake to administer,
interpret, and construe this Agreement in a manner that does not result in the
imposition on the Executive of any additional tax, penalty, or interest under Section 409A
of the Code.  The Company and Executive
agree that they will execute any and all amendments to this Agreement as they
mutually agree in good faith may be necessary to ensure compliance with the
provisions of Code Section 409A; however, the Company does not guarantee
any particular tax effect to Executive under this Agreement, and shall not be
liable to Executive for any payment made under this Agreement at the direction
or consent of Executive, which is determined to result in an additional tax,
penalty or interest under Code Section 409A, nor for reporting in good
faith any payment made under this Agreement as an amount includible in gross
income under Code Section 409A. 
Notwithstanding anything in this Agreement to the contrary, if a payment
obligation arises on account of Executive’s separation from service while
Executive is a “specified employee,” as described in Code Section 409A,
and as determined by the Company in accordance with its procedures, by which
determination Executive shall be bound, any payment of “deferred compensation”
as defined under Code Section 409A, after giving effect to the exemptions
available under Code Section 409A, shall be made on the first business day
of the seventh month following the date of Executive’s separation from service,
or, if earlier, within fifteen (15) days after the appointment of the personal
representative or executor of Executive’s estate following the Executive’s
death.  With respect to any reimbursement
of expenses of, or any provision of in-kind benefits to, the Executive, as
specified under this Agreement, such reimbursement of expenses or provision of
in-kind benefits shall be subject to the following conditions: (1) the
expenses eligible for 

 

4

 

reimbursement
or the amount of in-kind benefits provided in one taxable year shall not affect
the expenses eligible for reimbursement or the amount of in-kind benefits
provided in any other taxable year, except for any medical reimbursement
arrangement providing for the reimbursement of expenses referred to in Section 105(b) of
the Code; (2) the reimbursement of an eligible expense shall be made no
later than the end of the year after the year in which such expense was
incurred; and (3) the right to reimbursement or in-kind benefits shall not
be subject to liquidation or exchange for another benefit.

 

2.3.2                        Separation
from Service.  “Termination of
employment,” “resignation,” or words of similar import, as used in this
Agreement means, for purposes of any payments under this Agreement that are
payments of deferred compensation subject to Section 409A of the Code, the
Executive’s “separation from service” as defined in Section 409A of the
Code.

 

3.                                       Non-Solicitation and
Confidentiality Agreement

 

The
Executive hereby confirms and acknowledges that the Executive is subject to the
provisions set forth in the Employee Non-Disclosure, Assignment,
Non-Competition, and Non-Solicitation Agreement attached hereto as Exhibit B
(the “Non-Disclosure Agreement”).  The
provisions of this Agreement shall apply where there is a conflict between this
Agreement and the Non-Disclosure Agreement.

 

4.                                       Other
Provisions.

 

4.1                                 Notices.  Notice under this Agreement shall be in
writing and shall be deemed given when received by the party to be notified (a) when
given in person, (b) on the first day after delivery to Federal Express or
other overnight courier, postage prepaid and (c) upon transmission by
telecopier with confirmation by United States mail, in each case at the address
for the intended recipient as set forth below:

 

(i)                                   if to
the Company, to:

 

Reddy Ice Corporation

8750 North Central Expressway, Suite 1800

Dallas, Texas 75231

Telecopier:  (214) 528-1532

Attention:  Chairman of the Board

 

with a copy (which shall not
constitute notice) to:

 

DLA Piper LLP (US)

1251 Avenue of the Americas

New York, New York 10020

Attention:                                         Roger Meltzer, Esq.

 

5

 

(ii)                                if to the
Executive, to the Executive at the address set forth on Exhibit A
attached hereto or to the telecopier number set forth below:

 

Telecopier:  (214) 528-1532

 

4.2                                 Entire
Agreement.  This Agreement
(and the Exhibits attached hereto including the Non-Disclosure Agreement)
contains the entire agreement between the parties with respect to the specific
subject matter hereof and replaces and supersedes any and all prior employment
contracts and other related agreements, written or oral, with respect thereto,
as well as any and all entitlements which have accrued as of the date of this
Agreement that the Executive may otherwise have with or derive from the
Company.  This Agreement should be read
in conjunction with any agreements providing for compensation to the Executive
pursuant to the Company’s long-term incentive plans and any indemnification
agreements between the Company and the Executive.

 

4.3                                 Waivers
and Amendments.  This
Agreement may be amended, modified, superseded, canceled, renewed or extended,
and the terms and conditions hereof may be waived, only by a written instrument
signed by the parties or, in the case of a waiver, by the party waiving
compliance.  No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any party of any right,
power or privilege hereunder, nor any single or partial exercise of any right,
power or privilege hereunder, preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder.

 

4.4                                 Governing
Law.  This Agreement shall be
governed by, and construed in accordance with and subject to, the laws of the
State of Texas, without giving effect to the principles of conflicts of law.

 

4.5                                 Arbitration.  Any dispute or controversy arising out of or
in connection with this Agreement or the Executive’s employment or the
termination thereof, including, but not limited to, any claim of discrimination
under federal or state law, shall be subject to and settled exclusively by
binding arbitration in Dallas, Texas, in accordance with the rules of the
American Arbitration Association then in effect.  Judgment may be entered on the arbitrators’
award in any court having jurisdiction and reasonable attorneys’ fees and shall
be awarded to the prevailing party.  The
arbitrators shall determine the allocation of the costs and expenses arising in
connection with any arbitration proceeding pursuant to this Section 4.5
based on the arbitrators’ assessment of the merits of the positions of the
parties.

 

4.6                                 Binding
Effect; Benefit.  This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and any heirs, successors and assigns. 
Nothing in this Agreement, expressed or implied, is intended to confer
on any person other than the parties hereto or such heirs, successors and
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Agreement.

 

4.7                                 Assignment.  This Agreement, and the Executive’s rights
and obligations hereunder, may not be assigned by the Executive; provided, however, that such rights and 

 

6

 

obligations shall be
enforceable by the Executive’s legal representatives, heirs and other
successors in interest.  The Company
shall assign this Agreement and its rights, together with its obligations,
hereunder in connection with any sale, transfer or other disposition of all or
substantially all of its assets or business, whether direct or indirect, by
purchase, merger, consolidation or otherwise.

 

4.8                                 Number
and Gender.  As used
herein, the singular shall include the plural and vice versa and words used in
one gender shall include all others as appropriate.

 

4.9                                 Withholding
of Taxes.  The Company
may withhold from any compensation or benefits payable under this Agreement all
federal, state, city and other taxes as shall be required pursuant to any law
or governmental regulation or ruling.

 

4.10                           Definitions.  For purposes of this Agreement:

 

(i)                                     “Base  Salary” shall mean means Executive’s annual base salary,
which is
$                  
as of the date of this Agreement, as such amount may be changed and in effect
from time to time.  Notwithstanding the
foregoing, Base Salary shall be determined without regard to any change that
would constitute Good Reason.

 

(ii)                                  “Change in
Control” shall mean  the earliest
to occur of any of the following events on or before the third anniversary of
the Effective Date:  a (a) Change in
Ownership of the Company, (b) Change in Board Membership, (c) Change
in the Ownership of Assets of the Company, or (d) a Merger, Consolidation,
or Reorganization as described herein:

 

(a)                                  A Change in
Ownership of the Company shall occur on the date that any one Person
or Persons Acting as a Group acquires ownership of (or has acquired ownership
during the 12 month period ending on the date of the most recent acquisition by
such Person) more than 30% of the total voting power of the capital stock of
the Company (except with respect to the occurrence of a Merger, Consolidation,
or Reorganization as provided for in paragraph (d) below).

 

(b)                                 A Change in Board Membership
shall occur on the date a majority of members of the Company’s Board
is replaced during any 12-month period by directors whose appointment or
election is not endorsed by a majority of the members of the Company’s Board
before the date of the appointment or election.

 

(c)                                  A Change in the Ownership of Assets of the Company shall occur
on the date that any one Person acquires, or Persons Acting as a Group acquire
(or has or have acquired during the 12-month period ending on the date of the
most recent acquisition by such Person or Persons), assets from the Company
that have a total gross fair market value more than 50% of the total gross fair
market value of all of the assets of the Company immediately before such
acquisition or acquisitions.  For this
purpose, gross fair market value means the value of the assets of the Company,
or the value of the assets being disposed of, determined without regard to any
liabilities associated with such assets.

 

(d)                                 A Merger,
Consolidation, or Reorganization shall occur on the date of any
merger, consolidation or reorganization involving Company

 

7

 

immediately
after which Persons Acting as a Group who hold more than a majority of the
total voting power of the capital stock represented by outstanding voting
securities of the surviving entity are not Persons who held outstanding voting
securities of Company immediately prior to such transaction.

 

The following rules of
construction apply in interpreting the definition of Change in Control:

 

(A)                              A Person means 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, other than employee benefit plans sponsored or maintained
by the Company and by entities controlled by the Company or an underwriter of
the capital stock of the Company in a registered public offering.

 

(B)                                Persons will be
considered to be Persons Acting as a Group (or Group) if they are owners of a
corporation that enters into a merger, consolidation, purchase or acquisition
of stock, or similar business transaction with the corporation.  If a Person owns stock in both corporations
that enter into a merger, consolidation, purchase or acquisition of stock, or
similar transaction, such shareholder is considered to be acting as a Group
with other shareholders only with respect to the ownership in that corporation
before the transaction giving rise to the change and not with respect to the
ownership interest in the other corporation. 
Persons will not be considered to be acting as a Group solely because
they purchase assets of the same corporation at the same time or purchase or
own stock of the same corporation at the same time, or as a result of the same
public offering.

 

(C)                                A Change in
Control shall not include a transfer to a related person.

 

(D)                               For purposes of this paragraph,
Code section 318(a) applies to determine stock ownership.  Stock underlying a vested option is
considered owned by the individual who holds the vested option (and the stock
underlying an unvested option is not considered owned by the individual who
holds the unvested option).  For purposes
of the preceding sentence, however, if a vested option is exercisable for stock
that is not substantially vested (as defined by Treasury Regulation §1.83-3(b) and
(j)), the stock underlying the option is not treated as owned by the individual
who holds the option.

 

(ii)                                  “Disabled” or “Disability”
shall mean, with respect to the Executive, (a) the occurrence of a period
of 90 consecutive days or 180 out of 360 consecutive days during which the
Executive is unable to perform the Executive’s duties due to a mental or
physical impairment or (b) a determination of disability due to mental or
physical impairment by an agreed upon medical practitioner selected by the
Company and the Executive, that it is reasonably likely that an impairment
exists with respect to the Executive which will, with the passage of time,
satisfy clause (a). If the Company and the Executive are unable to agree upon a
medical practitioner, each shall select a medical practitioner and such practitioners
shall jointly select another medical 

 

8

 

practitioner who shall
determine whether or not there is a disability. 
If the two practitioners chosen by the Company and the Executive are
unable to agree upon the third practitioner, the American Arbitration
Association in Dallas, Texas shall select a medical practitioner.

 

(iii)                               “Good Reason” shall mean a separation from service (with the
meaning of Treasury Regulation Section 1.409A-1(h)) within 1 year following
the initial existence of one or more of the following conditions arising
without Executive’s consent:  (1) a
material diminution in Executive’s Base Salary; (2) a material diminution
in Executive’s title, authority, or responsibility; (3) relocation of
Executive to an office more than 50 miles from Executive’s office on the
Employment Date; or (4) a material breach by the Company of this
Agreement.  Before terminating employment
for Good Reason, Executive must provide notice of the existence of the condition
within 90 days following the initial existence of such condition.  Company shall have a period of thirty 30 days
after receipt of such notice to correct the situation (and thus prevent
Executive’s termination for Good Reason). 
Upon the expiration of the thirty (30) day period without cure by the
Company, Executive shall be entitled to terminate for Good Reason.

 

4.11                           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which together
shall constitute one and the same instrument.

 

4.12                           Headings.  The headings in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.

 

[Signature
Page Follows]

 

9

 

IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first above written.

 

 

	
  The Company:

  	
   

  
	
   

  	
  REDDY
  ICE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Executive:

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