Document:

exv10w1

Exhibit 10.1

Glacier Water Services, Inc.

Stock Compensation Program

Including

Amendments 1-9

 

 

GLACIER WATER SERVICES, INC.

STOCK COMPENSATION PROGRAM

     1. Purpose. This Glacier Water Services, Inc. Stock Compensation Program (the “Program”) is
intended to secure for Glacier Water Services, Inc. (the “Company”) and its Subsidiaries and its
stockholders the benefits arising from ownership of the Company’s common stock (the “Common
Stock”) by those selected key individuals of the Company and its Subsidiaries who will be
responsible for the future growth of such corporations. The Program is designed to
help attract and retain superior personnel for
positions of substantial responsibility with the Company and
its Subsidiaries, and to provide key individuals with an additional incentive to
contribute to the success of the corporations.

     2. Elements of the Program. In order to maintain flexibility in the
award of stock benefits, the Program is composed of two parts. Part I is the 1994 Employee Stock
Option Plan (the “Plan”) under which are granted incentive and non-qualified stock options. Part
II is the 1994 Non-Employee Directors Stock Option Plan (the “Non-Employee Plan”) under which
Non-Employee Directors are granted non-qualified stock options. The Plan and the Non-Employee Plan
are collectively referred to herein as the “Plans.”

     3. Applicability of General Provisions. Unless any Plan specifically indicates to the
contrary, both Plans shall be subject to the General Provisions of the Program set forth below.

     4. Administration of the Plans. The Plans shall be administered, construed, governed,
and amended in accordance with their respective terms, provided, however, in no case shall
any action be taken by any member of the Committee if such action would result in the loss of
“disinterested administrator” status, within the meaning of Rule 16b-3, as promulgated by the SEC
(as defined below) under Section 16(b) of the Securities Exchange Act of 1934 (the
“Exchange Act”), or any successor rule or regulation thereto, as such Rule is amended or applied
from time to time (the “SEC Rule l6b-3”), of any director who is a member of the Committee (as
defined below).

     5. Definitions. For purposes of the Program, the following terms shall have the
meanings set forth below:

     (a) “Agreement” or “Option Agreement” means a written agreement between the Company and a
Participant or an Eligible Director setting forth the terms and conditions of an Option grant.

 

 

     (b) “Annual Meeting” means the annual meeting of the Company’s stockholders for
any fiscal year as determined by the Company’s By-Laws.

     (c) “Board” means the Board of Directors of the Company as constituted from time to
time.

     (d) “Cause” means (i) the willful and continued failure of a Participant to perform his or
her duties other than such failure resulting from the Participant’s incapacity due to physical or
mental illness or injury, (ii) the conviction of the Participant of a felony, (iii) the willful
engaging by the Participant in misconduct which is materially injurious to the Company or (iv)
the willful commission by the Participant of any fraud on the Company.

     (e) “Change of Control” shall mean:

          (i) The acquisition by an individual, entity or group (within the meaning of
Section 13(d) (3) or 14(d) (2) of the Exchange Act), other than the Company, Kayne, Anderson
Investment Management, Inc., any group (as heretofore defined) of which any of them is a member,
any affiliate of any of the foregoing or any person who on the effective date of this Plan is an
officer or director of the Company, of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of more than 50% of either (A) the shares of the Common
Stock, or (B) the combined voting power of the voting securities of the Company entitled to vote
generally in the election of directors (the “Voting Securities”); provided, however, that the
following acquisitions shall not constitute a Change of Control: (x) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary,
or (y) any acquisition by any corporation if, immediately following such acquisition, more than
50% of the outstanding shares of common stock of such corporation and the combined voting power of
the then outstanding voting securities of such corporation (entitled to vote generally in the
election of directors), is beneficially owned, directly or indirectly, by all or substantially all
of the individuals and entities who, immediately prior to such acquisition, were the
beneficial owners of the Common Stock and the Voting Securities in substantially the same
proportions, respectively, as their ownership, immediately prior to such acquisition, of the
Common Stock and Voting Securities; or

          (ii) Approval by the shareholders of the Company of a reorganization, merger or consolidation,
other than a reorganization, merger or consolidation with respect to which all or
substantially all of the individuals and entities who were the

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beneficial owners,
immediately prior to such reorganization, merger or consolidation, of the Common Stock and
Voting Securities beneficially own, directly or indirectly, immediately after such
reorganization, merger or consolidation more than 50% of the then outstanding common stock and
voting securities (entitled to vote generally in the election of directors) of the corporation
resulting from such reorganization, merger or consolidation in substantially the same
proportions as their respective ownership, immediately prior to such reorganization, merger or
consolidation, of the Common Stock and the Voting Securities; or

          (iii) Approval by the shareholders of the Company of (A) a complete liquidation or
substantial dissolution of the Company, or (B)
the sale or other disposition of all or substantially all of the assets of the Company,
other than to a Subsidiary, wholly-owned, directly or indirectly, by the Company.

     (f) “Closing Price” means on, or with respect to, any given date, the closing per share
market trading prices for the Common Stock as reported on the consolidated transaction
reporting system for the American Stock Exchange (the “AMEX”) or, if the Cosmos
Stock is not then listed on the AMEX, on any other domestic exchange on which the
stock is listed or, if the Common Stock is not so listed, the average of the closing bid and
asked prices quoted in the NASDAQ system or, if the Common Stock shall not be quoted on the
NASDAQ system, the average of the closing bid and asked prices in the domestic over-the-counter
market as reported by the National Quotation Bureau, Incorporated, or any similar successor
organization for such date(s), or, if the Common Stock was not traded on such date, on the next
preceding day on which the Common Stock traded.

     (g) “Code” means the Internal Revenue Code of 1986, as in effect and as amended from time
to time, or any successor statute thereto, together with any rules, regulations and
interpretations promulgated thereunder or with respect thereto.

     (h) “Committee” mean’s the committee of the Board established to administer the Plan, as
described in Article 1 of the General Provisions of the Program.

     (i) “Common Stock” means the common stock, par value $.01 per share, of the Company or any
security of the Company issued in substitution or exchange therefor.

     (j) “Company” means Glacier Water Services, Inc., a Delaware corporation, or any successor corporation to Glacier Water Services, Inc.

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     (k) “Disability” means with respect to a Participant disability as defined in the
Participant’s then effective employment agreement, or if the Participant is not then a party
to an effective employment agreement with the Company which defines disability, “Disability”
means disability as determined by the Committee in accordance with standards and procedures
similar to those under the Company’s long-term disability plan, if any. If disability is not
defined in either an employment agreement or a long-term disability program, or in any case
with respect to an Eligible Director, “Disability” means any physical or mental disability
which is determined to be total and permanent by a physician selected in good faith by the
Company.

     (l) “Eligible Director” means any Non-Employee Director of the Company who
becomes a member of the Board.

     (m) “Exchange Act” means the Securities Exchange Act of 1934, as in effect and as
amended from time to time, or any successor statute thereto, together with any rules,
regulations and interpretations promulgated thereunder.

     (n) “Fair Market Value” means on, or with respect to, any given date(s), the average of
the highest and lowest per share market trading prices for the Common Stock, as reported on
the consolidated transaction reporting system for the American Stock
Exchange (the “AMEX”) or,
if the Common Stock is not then listed on the AMEX, on any other domestic exchange on which
the stock is listed or, if the Common Stock is not so listed, the average of the
representative bid and asked prices quoted in the NASDAQ system or,
if the Common Stock shall
not be quoted on the NASDAQ system, the average of the high and low bid
and asked prices in the domestic over-the-counter market as reported by the National Quotation
Bureau, Incorporated, or any similar successor organization for such date(s), or, if the
Common Stock was not traded on such date, on the next preceding day on which the Common Stock
is traded.

     (o) “Grant
Date” means the date of any Annual Meeting in respect of which an Annual
Grant is made to an Eligible Director.

     (p) “Incentive Stock Option” means an option granted pursuant to Section 3 of Part I
which is intended to be, and meets the requirements of, an “incentive stock option” under
Section 422 of the Code.

     (q) “Non-Employee Director” means any director of the Company who is not, and who has not
been for at least one year preceding the commencement of his or her membership on the Board,

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an employee of the Company, or any parent or subsidiary companies of the Company.

     (r) “Non-Employee Plan” or “Part II” means the Glacier Water Services, Inc. 1994
Non-Employee Directors Stock Option Plan, as set forth herein and as in effect and as amended
from time to time (together with any rules, regulations and guidelines promulgated thereunder).

     (s) “Non-Qualified Stock Option” means any option granted pursuant to the provisions of
the Program which is not, and is designated as not being, an Incentive Stock Option.

     (t) “Participant” means any individual selected to receive an award under Part I.

     (u) “Plan” or “Part I” means the Glacier Water Services, Inc. 1994 Employee Stock Option
Plan, as set forth herein and as in effect and as amended from time to time (together with any
rules, regulations and guidelines promulgated thereunder).

     (v) “Program Guidelines” means the guidelines for granting and administering Options
established pursuant to Article 1(c) of the General Provisions of the Program.

     (w) “SEC” means the Securities and Exchange Commission, or any successor
governmental agency.

     (x) “Stock Options” or “Options” means Incentive Stock Options and Non-Qualified Stock
Options (whether granted under Part I or Part II) , collectively, provided,
however, that the Provisions of Part I and Part II apply only to Options granted under
Part I and Part II, respectively.

     (y) “Subsidiary” means any corporation (other than the Company) in an unbroken chain of
corporations, including and beginning with the Company, if each of such corporations, other
than the last corporation in the unbroken chain, owns, directly
or indirectly, more than fifty percent of the voting stock of one of the other corporations in
such chain.

GENERAL PROVISIONS OF THE PROGRAM

     Article 1. Administration. The Program shall be administered by a Committee
appointed by the Board to administer the Program.

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     (a) Committee Membership. The Committee shall consist of not less than two
“disinterested” directors within the meaning of SEC Rule 16b-3. The Board may from time to
time remove members from the Committee, fill vacancies on the Committee and may select one of
the members of the Committee as the Committee’s chairman.

     (b) Plan Administration. Except with respect to Option grants under the
Non-Employee Plan, the Committee shall have full and final authority in its discretion to
interpret the provisions of the Program and to decide all questions of fact arising in its
application; to determine the individuals to whom Options shall be granted under the Program;
to determine the type of Option to be granted and the amount, size, timing,
and terms of each such Option; and to make all other determinations necessary or
advisable for the effective administration of the Program. The Committee may designate
persons other than members of the Committee to carry out the day-to-day ministerial
administration of the Program and may seek independent advice and counsel from such
professional advisors as it deems necessary; provided that the Committee may not delegate its
authority regarding the selection of Participants and granting of Options under Part I. The
Committee shall report all actions taken by it to the Board.

     (c) Program Guidelines. Without limiting the foregoing, Option grants shall be
determined and administered pursuant to Program Guidelines, not inconsistent with the
provisions of the Program, established from time to time by the Committee. Program
Guidelines shall be designed to further the purpose of the Program and to ensure the
administration of an effective and competitive incentive program based on the Company’s
needs and requirements from time to time.

     (d) Limitation of Liability. Neither the Board nor the Committee, nor any member of
either or other employees designated to help administer the Program,
shall be liable for any
act, omission, interpretation, construction or determination made in good faith in connection
with the Program and the members of the Board and the committee and such other employees shall
be entitled to indemnification and reimbursement by the Company in respect of any claim, loss,
damage or expense (including without limitation attorneys’ fees) arising or resulting
therefrom to the fullest extent permitted by law and/or any directors and officers liability
insurance coverage which may be in effect from time to time.

     Article 2.
Common Shares Subject to Options. The maximum aggregate number of shares of
Common Stock with respect to which Options may be granted from time to time under the
Plan

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is 8,00,000 shares, subject to adjustment as provided in Article 5
of the General Provisions of the Program. The maximum aggregate number of shares of
Common Stock with respect to which Options may be, granted from time to time under the
Non-Employee Plan is 5,00,000 shares, subject to adjustment as provided in Article 5 of the General
Provisions of the Program. The Common Stock issued under the Program may be either previously
authorized but unissued shares or treasury shares acquired by the Company. In the event that
any Option expires, lapses, is forfeited, is settled in cash in lieu of Common Stock or
otherwise terminates, any shares of Common Stock allocable to the terminated portion of such
Option may again be made subject to an Option under the Program; provided, however, if an
individual hag received  the benefits of ownership with respect to
the securities underlying any option granted under the Plan or the Non-employee
Plan, including without limitation, the right to receive dividends, such shares may not again
be made subject to an Option under the Program.

     Article 3. Eligibility and Participation. Officers, employees, advisors or
consultants of the Company or its Subsidiaries
shall be eligible for selection by the Committee to participate in Part I. However,
Incentive Stock Options may be granted under the Plan only to a person who is an employee of
the Company or its Subsidiaries. An employee may be granted Nonqualified Stock Options under
the Program; provided, however, that the grant of Nonqualified Stock Options and
Incentive Stock Options to an employee shall be the grant of separate options and each
Nonqualified Stock Option and each Incentive Stock Option shall be specifically designated as
such in accordance with applicable provisions of the Code. Only Non-Employee
Directors are eligible to receive grants under Part II and such directors may only receive
grants under Part II.

     Article 4. Effective Date and Term of the Program. The Program shall be
effective upon its adoption by the Board, subject to the approval of the Program by the
Company’s shareholders in accordance with SEC Rule 16b-3 and Sections 162(m) and 422 of the
Code. The Program shall remain in effect until all Options granted thereunder have been
satisfied by the issuance of Common Stock or the payment of cash (unless sooner terminated
under Article 6 of these General Provisions).

     Article 5. Adjustments. If the outstanding shares of Common Stock are increased,
decreased, changed into, or exchanged for a different number or kind of shares or securities
through merger, consolidation, combination, exchange of shares, other reorganization,
recapitalization, reclassification, stock dividend, stock split or reverse stock split, an
appropriate and proportionate adjustment shall be made in the maximum number and

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kind of shares as to which Options may be granted under this Program. A corresponding
adjustment changing the number and kind of shares allocated to unexercised Options or portions
thereof, which shall have been granted prior to any such change, shall likewise be made. Any
such adjustment in outstanding Options shall be made without change in the aggregate purchase
price applicable to the unexercised portion of the Option, but with a corresponding adjustment
in the price for each share or other unit of any security covered by the Option.

     Article 6. Termination and Amendment of the Program. In general, the Program shall
terminate 10 years from the date such program is adopted by the Board of Directors, or the date
such program is approved by the stockholders, whichever is earlier, or shall terminate at such
earlier time as the Board of Directors may so determine. No options shall be granted under the
Program after that date. Subject to the limitation contained in Article 7 of these General
Provisions, the Committee may at any time amend or revise the terms of the Program, including
the form and substance of the Option Agreements to be used hereunder;
provided, however,
that the terms and provisions of the Program which determine the eligibility of Non-Employee
Directors to receive grants under Part II and the amount, price and timing of the formula grants
under such Part II shall not be amended more than once every six months, other than to comport
with changes in the Internal Revenue Code of 1986, as amended (the “Code”) , the Employee
Retirement Income Security Act of 1974, as amended, or the rules thereunder; provided,
further, however, that without approval by the stockholders of the Company representing
a majority of the shares entitled to vote thereon (as described in Article 4 of these General
Provisions) no amendment or revision shall (a) except as provided in Article 5 of these General
Provisions, materially increase the maximum number of shares that may he issued under this
Program; (b) change the minimum purchase price for shares under Section 3 of Part I and/or
Section 2 of Part II; (c) increase the maximum term established under, the Plans for any Option;
(d) materially modify the requirements as to eligibility for participation in the Program; (e)
change the term of the Program described in Article 4 of these General Provisions; or (f)
materially increase the benefits accruing to participants under the Program. In addition, no
such amendment or revision shall be effective if it would disqualify the Program from the
exemptions provided by SEC Rule 16b-3.

     Article 7. Prior Rights and Obligations. No amendment, suspension, or termination
of the Program shall, without the consent of the individual who has received an Option, alter or
impair any of that person’s rights or obligations under any Option granted under the Program
prior to that amendment, suspension, or, termination.

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     Article 8. Privileges of Stock Ownership. Notwithstanding the exercise of any
Option granted pursuant to the terms of this Program, no individual shall have any of the
rights or privileges of a stockholder of the Company in respect of any shares of stock
issuable upon the exercise of his or her Option until certificates representing the shares
have been issued and delivered. No shares shall be required to be issued and delivered upon
exercise of any Option unless and until all of the requirements of law and of all regulatory
agencies having jurisdiction over the issuance and delivery of the securities have been
fully complied with.

     Article 9. Reservation of Shares of Common Stock. The Company, during the term
of this Program, will at all times reserve and keep available such number of shares of Common
stock as shall be sufficient to satisfy the requirements of the Program. In addition, the
Company will from time to time, as is necessary to accomplish the purposes of this Program,
seek or obtain from any regulatory agency having jurisdiction any requisite authority in
order to issue and sell shares of Common Stock hereunder. The inability of the Company to
obtain from any regulatory agency having jurisdiction the authority deemed by the Company’s
counsel to be necessary to the lawful issuance and sale of any shares of its stock hereunder
shall relieve the Company of any liability in respect of the nonissuance or sale of the stock
as to which the requisite authority shall not have been obtained.

     Article 10. Tax Withholding. The Company shall have the right to deduct from any payment
or settlement under the . Program, including, without limitation, the exercise of any Option,
or the delivery, transfer or vesting of any Common Stock, any federal, state, local or other
taxes of any kind which the Committee, in its sole discretion, deems necessary to be withheld
to comply with the and/or any other applicable law, rule or regulation. If the Committee in
its sole discretion, permits shares of Common Stock to be used to satisfy any such tax
withholding, such Common Stock shall be valued based on the Fair Market Value of such stock
as of the date the tax withholding is required to be made, such date to be determined by the
Committee. The Committee may establish rules limiting the use of Common Stock to meet
withholding requirements by Participants and Eligible Directors who are subject to Section 16
of the Exchange Act.

     Article 11. SEC Compliance. With respect to persons subject to Section 16 of the
Exchange Act, transactions under the Program are intended to comply with all applicable
conditions of SEC Rule 16b-3. To the extent any provision of the Program or any action of the
Committee fails to comply with such rule, it shall be deemed null and void, to the extent
permitted by law and

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deemed advisable by the Committee. If a person subject to Section 16 of the Exchange Act
exercises his or her rights under an Option grant under the Program before six months have
passed from the date of the grant, the Company shall hold in its custody any resulting stock
certificate until six months has passed from the date of the grant provided,
however, that upon the occurrence of any Change of Control all such stock certificates
which have been withheld shall immediately be delivered to such person.

     Article 12. Governing Law. The Plan and all actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of Delaware (without
reference to the principles of conflict of laws thereof), except to the extent preempted by
federal law which shall govern to that extent. Any titles and headings herein are for reference
purposes only, and in no way shall limit, define or otherwise affect the meaning, construction
or interpretation of any provisions of the Program.

     Article 13. Listing, Registration and Other Legal Compliance. No Options
or shares of Coupon Stock shall be required to be granted or issued under the Program unless
legal counsel for the Company shall be satisfied that such issuance or grant will be in
compliance with all applicable federal and state securities laws and regulations and any other
applicable laws or regulations. The Committee may require, as a condition of any payment or
share issuance, that such agreements, undertakings, representations, certificates, and/or
information as the Committee may deem necessary or advisable, be executed or provided to the
Company to assure compliance with all such applicable laws or regulations. Certificates for
shares of Common Stock delivered under the Program may be subject to such stock transfer orders
and such other restrictions as the Committee may deem advisable under
the rules, regulations, or
other requirements of the SEC, or any stock exchange upon which the Common Stock is then
listed, and any applicable federal or state securities law. In addition, if, at any time
specified herein (or in any Option Agreement or otherwise) for, (i) the granting of any Option
or the making of any determination, (ii) the issuance or other distribution of Common Stock, or
(iii) the payment of amounts to or through any Participant or Eligible Director with respect to
any Option, any law, rule, regulation or other requirement of any governmental authority or
agency shall require either the Company, any Subsidiary or any Participant or Eligible Director
(or any estate, designated beneficiary or other legal representative thereof) to take any
action in connection therewith, the granting of such Option, the
making of such determination,
the issuance or distribution of Common Stock or such payment, as the case may be, shall be deferred
until such required action is taken.

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     Article 14. Transfer of Options. Options granted under the Program and any Option
Agreement, and any rights or interests herein or therein, shall not be assigned, transferred,
sold, exchanged, or otherwise disposed of in any way at any time by any Participant or Eligible
Director (or any beneficiary (ies) of any Participant or Eligible Director), other than by
testamentary disposition by the Participant or Eligible Director or intestate succession. Any
such Option, Option Agreement, rights or interests shall not be pledged, encumbered or otherwise
hypothecated in any way at any time by any Participant or Eligible Director (or any beneficiary
(ies) of any Participant or Eligible Director). Any such Option, Option Agreement, rights or
interests shall not be subject to execution, attachment or similar legal process. Any attempt to
sell, exchange, transfer, assign, pledge, encumber, or otherwise dispose of or hypothecate in
any way any such Options, rights or interests, or the levy of any execution, attachment or
similar legal process thereon, contrary to the terms of this Program shall be null and void and
without legal force or effect.

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PART I

GLACIER WATER SERVICES, INC.

1994 EMPLOYEE STOCK OPTION PLAN

     1. Purpose. The purpose of the Glacier Water Services, Inc. 1994 Employee Stock Option
Plan (the “Plan”) is to further the interests of the Company, its subsidiaries and its
shareholders by enabling the Company’s Board of Directors to award stock options to officers,
employees, advisors and consultants of the Company or its Subsidiaries. It is intended that the
Plan will help secure, retain, and motivate employees of the highest calibre and potential.

     2. Form of Options. Options may be granted from time to time under the
Plan and pursuant to established Program Guidelines in the form of Incentive Stock Options or
Non-Qualified Stock Options. Option grants shall be evidenced by written Option Agreements.

     3. Stock Options. Options for the purchase of Common Stock of the Company shall be
evidenced by Agreements in such form and not inconsistent with the Plan as the Committee shall
approve from time to time, which Agreements shall contain in substance the
following terms and conditions:

     (a) Type of Option. Options granted under the Plan may be in the form of Incentive Stock
Options or Non-Qualified Stock Options, and each Option Agreement shall identify the type of
Option represented thereby.

     (b) Option
Price. The exercise price per share of the Common Stock subject to an Option
shall be determined by the Committee, including without limitation, a determination based on a
formula determined by the Committee; provided, however, that the exercise price of
an Incentive Stock Option shall be determined in accordance with Subsection (h), of this
Section 3 and, provided, further that no exercise price shall be less than the par
value of the Common Stock.

     (c) Exercise Term. Each Option Agreement shall state the period or periods of time within
which the Option may be exercised, in whole or in part, which shall be such period or periods
of time as may be determined by the Committee, provided that no Option shall be exercisable prior
to six months. or after ten years from the date of grant thereof. The Committee may, in its discretion ,
provide in the Agreement circumstances under which the Option shall become immediately exercisable, and may,

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notwithstanding the foregoing, accelerate the exercise of any outstanding Option at any
time.

     (d) Notice. Upon becoming exercisable, the exercisable portion of an Option may
be exercised in whole or in part at any time and from time to time before termination
of such Option, by giving written notice, signed by the person exercising the Option, to the
Secretary of the Company stating the number of shares of Common Stock in respect of which the
Option is being exercised, accompanied by payment in full of the aggregate option exercise price
for the shares of Common Stock to be acquired. The date both such
notice and payment are received
by the office of the Secretary of the Company shall be the date of exercise of the Option as to
such number of shares of Common Stock. No Option may be exercised at any time in respect of a
fractional share.

     (e) Payment for Shares. The purchase price of the shares with respect to which an Option is
exercised shall be payable in full at the time of exercise in cash, by certified check, bank draft
or money order payable to the order of the Company or, if permitted by the Committee and
applicable law, by delivery of, alone or in conjunction with a partial cash or instrument payment
(i) shares of Common Stock already owned by the Participant for at least six (6) months, or, (ii)
some other form of payment acceptable to the Committee The Committee may also permit Participants
to simultaneously exercise Options and sell the shares of Common Stock thereby acquired, pursuant
to a “cashless exercise” arrangement or program, selected by and approved in all
respects in advance by the Committee. Payment instruments shall be received by the Company subject
to collection.

     (f) Rights
Upon Termination of Employment. In the event that a Participant ceases to be an
employee of the Company or its Subsidiaries upon retirement or for any reason other than death,
Disability or termination by the Company for Cause, the Participant shall have the right to
exercise an Option during its term within a period of ninety days after such termination to the
extent that the Option was exercisable at the time employment was terminated, or within such
other period, and subject to such terms and conditions, as may be prescribed by the Committee. In
the event that a Participant ceases to be an employee of the Company or its Subsidiaries due to
death or Disability, such Participant’s Options shall immediately and fully vest and the
Participant or his or her successor shall have the right to exercise any such Option during its
term within a period of one year after such termination, or within such other period, and subject
to such terms and conditions, as may be prescribed by the Committee. In the event of a
Participant’s termination by the

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Company for Cause, all unexercised Options shall be forfeited and canceled.

     (g) Non-transferability. Each Option is not transferable other than by testamentary
disposition or the laws of intestate succession, and during the lifetime of the
Participant is exercisable only by him or her.

     (h) incentive Stock Options. In the case of an Incentive Stock Option, each Option
Agreement shall contain such other terms, conditions and provisions as the Committee
determines necessary or desirable in order to qualify such Option as a tax-favored Option
(within the meaning of Section 422 of the Code, or any amendment thereof, substitute
therefore, or regulation thereunder, including without limitation, the following: (i) the
aggregate Fair Market Value (determined as of the time the Option is granted) of the Common
Stock with respect to which the Incentive Stock Options are exercisable by any individual for
the first time in any calendar year (under all plans of the Company and its Subsidiaries)
shall not exceed $100,000; (ii) the exercise price of an incentive Stock Option shall not be
less than one hundred percent, of the Fair Market Value of the Common Stock on the date of
grant of the Option; and, (iii) no incentive Stock Options shall be granted to any individual if at the
time such Option is granted the individual owns stock possessing more than ten percent of the
total combined voting power of all classes of stock of the Company or its Subsidiaries unless
at the time such Option is granted the exercise price is at least 110 percent of the Fair
Market Value of the Common Stock subject to such Option and such Incentive Stock Option by
its terms is not exercisable after five years from the date of grant.

     4. Designation of Beneficiary. Each Participant to whom an Option has
been granted under the Plan may designate a beneficiary or beneficiaries to exercise any
option or to receive any payment which under the terms of the Plan and the relevant Option
Agreement may become exercisable or payable on or after the
Participant’s death. At any time,
and from time to time, any such designation may be changed or canceled by the Participant
without the consent of any such beneficiary. Any such designation, change or cancellation must
be on a form provided for that purpose by the Committee and shall not be effective until
received by the Company. If no beneficiary has been designated, or if the designated
beneficiaries have predeceased the Participant, the beneficiary shall be the Participant’s
estate. If the Participant designates more than one beneficiary, any payments under the Plan
to such beneficiaries shall be made in equal shares unless the Participant has expressly
designated otherwise.

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     5. Recapitalization Adjustments. All Options granted pursuant to the terms of the Plan shall be
adjusted in the manner prescribed by Article 5 of the General Provisions of
the Program.

     6. Certain Mergers.

     (a) The
Company as Surviving Corporation. If the Company enters into or is involved in any
merger, reorganization or other business combination with any person or entity (such merger,
reorganization or other business combination to be referred to herein as a “Merger Event”) and as
a result of any such Merger Event, the Company will be or is the surviving corporation, a
Participant shall be entitled, as of the date of the execution of the agreement evidencing the
Merger Event (the “Execution Date”) and with respect to
both exercisable and non-exercisable
Options (but only to the extent not previously exercised), to receive substitute stock options in
respect of the shares of the surviving corporation on such terms and conditions, as to the number
of shares, pricing and otherwise, which shall substantially preserve the value, rights and
benefits of any affected Option granted hereunder as of the date of
the consummation of the Merger
Event. Notwithstanding anything to the contrary in this Section, if any Merger Event occurs, the
Company shall have the right, but not the obligation, to pay to each affected Participant an
amount in cash or certified check equal to the excess of the Fair Market Value of the Common Stock
underlying any affected unexercised Options as of the Execution Date (whether then exercisable or
not) over the aggregate exercise price of such unexercised Options.

     (b) The
Company Not the Surviving Corporation. In the case of a Merger Event in which the
Company will not be, or is not, the surviving corporation, and the Company determines not to make
the cash or certified check payment described in Section 6(a) of the Plan, the Company shall compel and obligate, as a condition of the
consummation of the Merger Event, the surviving or resulting corporation and/or the other party
to the Merger Event, as necessary, or any parent, Subsidiary or acquiring corporation thereof, to
grant, with respect to both exercisable and non-exercisable Options (but only to the extent not
previously exercised), substitute options in respect of the shares of common or other capital
stock of such surviving or resulting corporation on such terms and conditions, as to the number
of shares, pricing and otherwise, as shall substantially preserve the value, rights and benefits
of any affected Options previously granted hereunder as of the date of this consummation of the
Merger Event.

     (c) Cancellation
of Pervious Awards. upon receipt by an affected Participant of any such
cash, certified check, or

-15-

 

substitute options as a result of any such Merger Event, such Participant’s affected
Options for which such cash, certified check or substitute options was received shall be
thereupon canceled without the need for obtaining the consent of any such affected
Participant.

     (d) Administration. The foregoing adjustments and the manner of application of
the foregoing provisions, including, without limitation, the issuance of any substitute stock
options, shall be determined in good faith by the Committee in its sole discretion. Any such
adjustment may provide for the elimination of fractional shares.

     7. Change of Control.

     (a) Acceleration of Awards. Anything in the Program to the contrary
notwithstanding, if a Change of Control of the Company occurs, all Options then unexercised
and outstanding shall become fully vested and exercisable as of the date of the Change of
Control. The immediately preceding sentence shall apply to only those Participants (A) who
are employed by the Company and/or one of its subsidiaries as of the date of the Change of
Control, or (B) to whom Section 7(c) below is applicable.

     (b) Payment After Change of Control. Notwithstanding anything to the contrary
in the Plan, within thirty (30) days after a Change of Control under subsection (i) of the
definition of Change of Control, the holders of any Options shall have the right, but not the
obligation, to elect, within ten (10) business days after the Participant has actual or
constructive knowledge of the occurrence of such Change of Control, to require the Company to
purchase such Options from the Participant for an aggregate amount equal to the then aggregate
Fair Market Value of the Common Stock underlying such Options tendered, less the aggregate
exercise price of such tendered Options.

     (c) Termination as a Result of a Change of Control. Anything in the Plan to
the contrary notwithstanding, if a Change of Control occurs and if the Participant’s employment
is terminated before such Change of Control and it is reasonably demonstrated by the
Participant that such employment termination (i) was at the request, directly or indirectly, of
a third party who has taken steps reasonably calculated to effect the Change of Control, or
(ii) otherwise arose in connection with or in anticipation of the Change of Control, then for
purposes of this Section 7, the Change of Control shall be deemed to have occurred
immediately prior to such Participant’s employment termination (for all purposes
other than those set forth in Section 7(b) of the Plan).

-16-

 

     8. Right to Terminate Employment. Neither the adoption of the Plan, the
granting of any Option, nor the execution of any Option Agreement, shall confer upon any
employee of the Company or any Subsidiary any right to continued employment with the Company or
any Subsidiary, as the case may be, nor shall it interfere in any way with the right, if any, of
the Company or any Subsidiary to terminate the employment of any employee at any time for any
reason.

     9. Unfunded Plan. The Plan shall be unfunded and the Company shall not be
required to segregate any assets in connection with any Options granted
under the Plan. Any liability of the Company to any person with respect to any
Option granted under the Plan or any Option Agreement shall be based solely upon the contractual
obligations that may fee created as a result of the Plan or any such Option grant or Option
Agreement. No such obligation of the Company shall be deemed to secured by any pledge of,
encumbrance on, or other interest in, any property or asset of the Company or any Subsidiary.
Nothing contained in the Plan or any Option Agreement shall be construed as creating in respect
of any Participant (or beneficiary thereof or any other person) any equity or other interest of
any kind in any assets of the Company or any Subsidiary or creating a trust or a fiduciary
relationship of any kind between the Company, any Subsidiary and/or any such Participant, any
beneficiary thereof or any other person.

     10. Other Plans. Participation in
this Plan shall not affect a Participant’s eligibility to
participate in any other compensation or benefit plan of
the Company or its Subsidiaries and any Options granted
pursuant to this Plan shall not be used in determining
any benefits or payments provided under any other plan
unless specifically provided to the contrary.

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PART II

GLACIER WATER SERVICES, INC.

1994 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN

     1. Purpose. The purpose of the Glacier Water Services, Inc. 1994 Non-Employee Directors
Stock Option Plan (the “Non- Employee Plan”) is to promote the interests of the Company and its
stockholders by strengthening the Company’s ability to attract and retain the services of
experienced and knowledgeable Non-Employee Directors through formula grants and Deferred Elections of non-qualified
stock options to acquire the Company’s Common Stock, par value of $.01 per share. In
addition, such grants will encourage the closer alignment of the interests of such directors
with those of the Company’s stockholders.

     2. Non-Qualified Stock Option Grants.

     (a) Nature of Options. All Options granted under the Non-Employee Plan shall
be nonstatutory options and are not intended to qualify under Section 422 of the Code as
“incentive stock options.”

     (b) Annual Grant. An annual Option to acquire 1,500 shares of Common Stock
(as adjusted pursuant to Article 5 of the General Provisions of the Program) shall be granted
(an “Annual Grant”) automatically each year, the first such grant to be made, subject to
shareholder approval, on April 12, 1994 and subsequent grants to be made on the first business
day of January of each year, to each Eligible Director.

     (c) Exercise Price. The option exercise price per Option Share for an Annual
Grant shall be the Closing Price of the Common Stock on the first trading day (that is, a day on
which the American Stock Exchange or any other exchange or association on or through
which the stock is traded is open for trading and during which at least one share of Common
Stock is traded) preceding the Grant Date.

     (d) Notice. Upon becoming exercisable in accordance with Section 3 of the
Non-Employee Plan, the exercisable portion of an Option may be exercised in whole or in part at
any time and from time to time during the Option Period (as defined in Section 2 (f) of the
Non-Employee Plan) by giving written notice, signed by the person exercising the Option, to the
Secretary of the Company stating the number of shares of Common Stock in respect of which the
Option is being exercised, accompanied by payment in full of the aggregate option exercise price
for the shares of Common Stock to be acquired. The date both such notice

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and payment are received by the office of the Secretary of the Company shall be the date of
exercise of the Option as to such number of shares of Common Stock. No Option may be exercised
at any time in respect of a fractional share.

     (e) Payment. Payment of the aggregate option exercise price may be made in cash
or by certified or cashier’s check,
bank draft or money order payable to the order of the Company or, if permitted by the Committee
and applicable law, by delivery of, alone or in conjunction with a partial cash or instrument
payment (i) shares of Common Stock already owned by the Eligible Director for at least six (6)
months and having a fair market value equal to all or a portion of the option exercise price at
the time of such exercise, or (ii) some other form of payment acceptable to the Committee. The
Committee may also permit Eligible Directors to simultaneously exercise Options and sell the shares of Common Stock thereby acquired, pursuant to a “cashless exercise”
arrangement or program, selected by and approved in all respects in advance by the
Committee.

     (f) Option Period. Each Option shall expire ten years after its Grant Date (the
“Option Period”) unless terminated earlier in accordance with Section 2 (g) of this
Part II.

     (g) Rights Upon Termination of Board Membership. In the event that an Eligible
Director ceases to be a Director of the Company or its Subsidiaries upon retirement or for any
reason other than death, Disability or removal from the Board for Cause, the
Eligible Director shall have the right to exercise an Option during its term within a period of
ninety days after such termination to the extent that the Option was exercisable at the time
such Eligible Director ceased to be a member of the Board. In the event that an Eligible
Director ceases to be a Director of the Company or its Subsidiaries due to death or Disability,
such Eligible Director’s Options shall immediately and fully vest and the Eligible Director or
his or her successor shall have the right to exercise any such Option during its term within a
period of one year after such Eligible Director ceased to be a member of the Board. In the event
of an Eligible Director’s removal from the Board for Cause, all unexercised Options shall be
forfeited and cancelled.

     (h) Assignment. The right of any Eligible Director to exercise an Option granted under
the Non-Employee Plan shall, during the lifetime of such Eligible Director, be exercisable only by
such Eligible Director and shall not be assignable or transferable by such Eligible Director other
than by testamentary disposition or intestate succession.

-19-

 

          (i) Shareholder Rights. Neither the Eligible Director, nor an Eligible Director’s
successor or successors in interest, shall have any rights as a stockholder of the Company with
respect to any shares of Common Stock subject to an Option granted to any such Eligible Director
until the date of issuance of a stock certificate in respect of such shares. Neither the
Non-Employee Plan, nor the granting of an Option, nor any other action taken pursuant to the
Non-Employee Plan shall constitute or be evidence of any agreement or understanding, express or
implied, that an Eligible Director has a right to continue as a director of the Company for any
period of time or at any particular rate of remuneration.

          3. Vesting. Subject to Section 2 (f) of the Non-Employee Plan, an Option shall
become exercisable in respect of the aggregate number of underlying shares of Common Stock,
determined as of the Grant Date, according to the following schedule:

	 	(a)	 	one-fourth on the first anniversary of the Grant Date;
	 
	 	(b)	 	an additional one-fourth on the second anniversary of the
Grant Date;
	 
	 	(c)	 	an additional one-fourth on the third anniversary of the
Grant Date; and
	 
	 	(d)	 	the remaining one-fourth on the fourth anniversary of the
Grant Date.

          4. Board Authority. The existence of the Non-Employee Plan, any Option Agreement
and/or the formula grants made hereunder shall not limit, affect or restrict in any way the right
or power of the Board or the shareholders of the Company to make or authorize (a) any adjustment,
recapitalization, reorganization or other change in the Company’s or any Subsidiary’s
capital structure or its business, (b) any merger, consolidation or change in the ownership of the
Company or any Subsidiary, (c) any issue of bonds, debentures, capital, preferred or prior
preference stocks ahead of or affecting the Company’s or any Subsidiary’s capital stock or the
rights thereof, (d) any dissolution or liquidation of the Company or any Subsidiary, (e) any sale
or transfer of all or any part of the Company’s or any Subsidiary’s assets or business, or (f) any
other corporate act or proceeding by the Company or any Subsidiary. An Eligible Director, any
beneficiary(ies) of any such Eligible Director and/or any other person shall not have
any claim against any member of the Board or any committee thereof, the Company or any Subsidiary,
or any employees, officers or

-20-

 

agents of the Company or any Subsidiary, as a result of any such action.

          5. Recapitalization Adjustments. All Options granted pursuant to the terms of the
Non-Employee Plan shall be adjusted in the manner described in Article 5 of the General Provisions
of the Program.

          6. Certain Mergers.

          (a) The Company as Surviving Corporation. If the Company enters into or is involved
in any merger, reorganization or other business combination with any person or entity (such
merger, reorganization or other business combination to be referred to herein as a “Merger
Event”) and as a result of any such Merger Event, the Company will be or is the surviving
corporation, an Eligible Director shall be entitled, as of the date of the execution of the
agreement evidencing the Merger Event (the “Execution Date”) and with respect to both
exercisable and non-exercisable Options (but only to the extent not previously exercised), to
receive substitute stock options in respect of the shares of the surviving corporation on such
terms and conditions, as to the number of shares, pricing and otherwise, which shall
substantially preserve the value, rights and benefits of any affected Option granted hereunder
as of the date of the consummation of the Merger Event. Notwithstanding anything to the contrary
in this Section, if any Merger Event occurs, the Company shall have the right, but not the
obligation, to pay to each affected Eligible Director an amount in cash or certified cheek equal
to the excess of the Fair Market Value of the Common Stock underlying any affected unexercised
Options as of the Execution Date (whether then exercisable or not) over the aggregate exercise
price of such unexercised Options; provided, however, that if the Company chooses to
make such a payment to any Eligible Director, it must make such a payment to all Eligible
Directors.

          (b) The Company Not the Surviving Corporation. In the case of a Merger Event in which the
Company will not be, or is not, the surviving corporation, and the Company determines not to
make the cash or certified cheek payment described in Section 6 (a) of the Non-Employee Plan,
the Company shall compel and obligate, as a condition of the consummation of the Merger Event,
the surviving or resulting corporation and/or the other party to the Merger Event, as necessary,
or any parent, Subsidiary or acquiring corporation thereof, to grant, with respect to
both exercisable and non-exercisable Options (but only to the extent not previously exercised),
substitute options in respect of the shares of common or other capital stock of such surviving
or resulting corporation on such terms and conditions,

-21-

 

as to the number of shares, pricing
and otherwise, as shall substantially preserve the value, rights and benefits of any affected
Options previously granted hereunder as of the date of the consummation of the Merger Event.

          (c) Cancellation of Previous Awards. Upon receipt by
an affected Eligible Director of any such cash, certified check, or substitute options as a
result of any such Merger Event, such Eligible Directors’ affected Options for which such cash,
certified check or substitute options was received shall be thereupon canceled without the need
for obtaining the consent of any such affected Eligible Director.

          7. Change of Control.

          (a) Acceleration of Awards. Anything in the Program to the contrary notwithstanding, if a
Change of Control of the Company occurs, all Options then unexercised and outstanding shall become
fully vested and exercisable as of the date of the Change of Control. The immediately preceding
sentence shall apply to only those Eligible Directors (A) who are directory of the Company and/or
one of its Subsidiaries as of the date of the Change of Control, or (B) to whom Section 7(c) below
is applicable.

          (b) Payment
After Change of Control. Notwithstanding anything to the contrary in the Plan,
within thirty (30) days after a Change of Control under subjection (i) of the definition of
Change of Control any Eligible Director who holds Options shall have
the rights, but not the
obligation, to elect, within ten (10) business days after the Eligible Director has actual or
constructive knowledge of the occurrence of such Change of Control, to require the Company to
purchase such Options from the Eligible Director for an aggregate amount equal to the then
aggregate Fair Market Value of the Common Stock underlying such Options tendered, less the
aggregate exercise price of such tendered Options.

          (c) Termination as a Result of a Change of Control. Anything in the Plan to the contrary
notwithstanding, if a Change of Control occurs and if the Eligible Director’s membership on the
Board is terminated before such Change of Control and it is reasonably demonstrated by the
Eligible Director that such termination (i) was at the request, directly or indirectly, of a third
party who has taken steps reasonably calculated to effect the Change of Control, or (ii) otherwise
arose in connection with or in anticipation of the Change of Control, then for purposes of this
Section 7, the Change of Control shall be deemed to have occurred immediately prior to such
Eligible Director’s removal

-22-

 

from the Board (for all purposes other than those set forth in Section 7(b) of the
Non-Employee Plan).

          8. Miscellaneous.

          (a) Option Agreements. Each Eligible Director shall enter into an Option Agreement with the
Company in a form specified by the Company, Each such Eligible Director shall agree therein to
the restrictions, terms and conditions set forth in such Option Agreement and/or the
Non-Employee Plan.

          (b) Beneficiaries. Each Eligible Director may designate a beneficiary or beneficiaries
to receive any payment which under the terms of the Non-Employee Plan and the
relevant Option Agreement may become payable on or after the Eligible Director’s death.
At any time, and from time to time, any such designation may be changed or canceled by the
Eligible Director without the consent of any such beneficiary. Any such designation, change or
cancellation must be on a form provided for that purpose by the Company and shall not be
effective until received by the Company. If no beneficiary has been designated by a deceased Eligible
Director, or if the, designated beneficiaries have predeceased the Eligible Director, the
beneficiary shall be the Eligible Director’s estate. If the Eligible Director
designates more than one beneficiary, any payments under the Non-Employee Plan to such
beneficiaries shall be made in equal shares unless the Eligible Director has expressly
designated otherwise, in which case the payments shall be made in the shares designated by the
Eligible Director.

-23-

 

IN WITNESS WHEREOF, this Program is adopted by Glacier Water services, Inc. on this
____ day of ____________, 1994,

	 	 	 	 	 
	 	GLACIER WATER SERVICES, INC.
 	 
	 	By:  	 	 
	 	 	Title: 	 	 
	 

-24-

 

FIRST AMENDMENT TO GLACIER WATER SERVICES. INC.

1994 STOCK COMPENSATION PROGRAM

l. Purpose

     The purpose of this First Amendment to Glacier Water Services, Inc. 1994 Stock
Compensation Program (this “Amendment”) is to include provisions pursuant to which
non-employee members of the Board of Directors of Glacier Water Services, Inc. may elect to
receive stock options in lieu of cash director fees and to increase the maximum number of
shares issuable under the Program.

2. Definitions

     (a) Terms used in this Amendment and not defined herein shall have the meanings ascribed
to them in the Glacier Water Services, Inc. 1994 Stock Compensation Program (the
“Program”).

     (b) Paragraph 5 of the Program is amended by adding the following as a now Paragraph 5(b):

	 	 	 	“Amendment No. 1” means amendment No. 1 to the Program as
adopted by the stockholders of the Company on June 6,
1995.

     (c) Former Paragraphs 5(b) through (j) of the Program are renumbered Paragraphs 5(c)
through (k).

     (d) Paragraph 5 of the Program is further amended by addling the following as a Paragraph
5(1):

	 	 	 	“Deferral Election” means the election to receive Deferral
Election Stock Options (i) under Part I, by a director of the
Company who does not constitute an Eligible Director under the
non-Employee Plan or (ii) under Part II, by an Eligible Director.

     (e) Paragraph 5 of the Program is further
amended by adding the following as a new Paragraph
5(m):

	 	 	 	“Deferral Election Stock Option” shall means and refer to any
Option granted to a director of the Company pursuant to a
Deferral Election.

     (f) Former Paragraphs 5(k)
through (n) of the Program are renumbered Paragraphs 5(n) through
(q).

     (g) Former Paragraph 5(o) of
the Program is renumbered paragraph 5(r); such Paragraph
5(r) is amended by deleting the words “of any Annual Meeting” and adding the words “or a
Deferral Election Stock Option” after the words “in respect of which an Annual Grant.”

     (h) Former Paragraph 5(p) of
the Program is renumbered Paragraph 5(s).

 

 

     (i) Paragraph 5
of the Program is further amended by adding the following as a new Paragraph 5(t):

          “Initial
Election Date” means, for each member of the Board of Directors, the later too
occur of (i) the date Amendment No. 1 is adopted by the Board of Directors, or (ii)
date of such member’s initial election or appointment to the Board of Directors.

     (j) Former
Paragraphs 5(q) through (s) of the Program are renumbered
paragraphs 5(u) through
(w).

     (k) Former
Paragraph 5(f) of the Program is renumbered Paragraph 5(x); such Paragraph 5(x)
is amended by adding the words “or entitled to elect” after the words “Participate means any
individual selected.”

     (l) Former Paragraphs 5(u)
through (w) are renumbered 5(y) through (aa).

     (m) Former Paragraph 5(x)
is renumbered Paragraph 5(ab); such Paragraph 5(ab) is amended by
adding the words “including without limitation Deferral Election Stock Options” after the words
“whether granted under Part I or Part II.”

     (n) Former Paragraph 5(y) is
renumbered Paragraph 5(ac).

3. Administration

     Article 1(b) of the Program is
amended by adding the words “and Deferral Election Stock
Options” after the words “Except with respect to Option grants under the
Non-Employee Plan” in the first sentence thereof.

4. Common Shares Subject to Options

     Article 2 of the Program is amended by deleting the number “117,250” and replacing it with
the number “175,000” in the first sentence thereof; and by deleting the number “25,000” and
replacing it with the number “100,000” in the second sentence thereof.

5. Eligibility and Participation

     Article 3 of the Program is
amended by adding the words “and directors who do not
constitute Eligible Directors shall be eligible to receive Deferral Election Stock Options under
Part I” at the end of the first sentence thereof.

6. Termination and Amendment of the Program

     Article 6 of the Program is amended by adding the words “and Deferral Elections” after the
words to receive grants under Part II and the amount, price and timing of the formula
grants” in the third sentence thereof.

-2-

 

PART I: GLACIER WATER SERVICES, INC. 1994 EMPLOYEE STOCK OPTION PLAN (THE “PLAN”)

7. Purpose

     Paragraph 1 of the Plan is amended by adding the words “and enabling directors of the
Company who do not constitute Eligible Directors to elect to receive Deferral Election Stock
Options” at the end of the first sentence thereof.

8. Form of Options

     Paragraph 2 of the Plan is amended by adding the following sentence after the first
sentence thereof: “Deferral Election Stock Options shall be granted hereunder in the same manner
set forth in Section 2(b) of the Non-Employee Plan as if the Participant Director were an
Eligible Director.”

9. Stock Option

     (a) Paragraph 3(b) of the Plan is amended by adding the following sentence at the
end thereof: “Notwithstanding the forgoing, the exercise price of Deferral Election Stock Options granted
hereunder shall be determined in the same manner set forth in Section 2(c) of the Non-Employee
Plan.”

     (b) Paragraph 3(c) of the Plan is amended by adding the following sentence at the end
thereof: “Notwithstanding the foregoing, the periods of time within which Deferral Election
Stock Options granted hereunder shall become exercisable shall be determined in the same manner
set forth in Section 3 of the Non-Employee Plan.”

     (c) Paragraph 3(f) of the Plan is amended by adding the following sentence at the end
thereof: “This Section 3(f) shall not apply to Deferral Election Stock Options,
which will be subject instead to the last paragraph of Section 3 of the Non-Employee Plan.”

10. Change of Control

     Paragraph 7(c) of the Plan is amended by adding the words “or directorship” after the
words “if a Change of Control occurs and if the Participant’s employment” in the first sentence
thereof: by adding the words “or directorship” after the words “reasonably demonstrated by the
Participant that such employment” in the first sentence thereof; and by adding the words “or
directorship” after the words “deeded to have occurred immediately prior to such
Participant’s employment” in the last sentence thereof.

PART II: GLACIER WATER SERVICES, INC. 1994 NON-EMPLOYEE DIRECTORS STOCK
OPTION PLAN (THE “NON-EMPLOYEE PLAN”)

11. Purpose

     Paragraph 1 of the Non-Employee Plan is amended by adding the words “and Deferral
Elections” after the words “retain the services of experienced and knowledgeable Non-Employee
Director through formula grants” in the first sentence thereof.

-3-

 

12. Non-Qualified Stock Option Grants

     (a) Paragraph 2(b) of the Non-Employee Plan is amended by adding the words “and Deferral
Election Stock Options” after the words “Annual Grant”
in the heading to Paragraph 2(b);
and by inserting the following at the end thereof:

          “Each
Eligible Director may make an irrevocable election (a “Deferral Election”) each year,
at least six months prior to the Company’s next scheduled annual meeting of stockholders (or for
directors whose Initial Election Date shall fall within the period of six months prior to the
next scheduled annual meeting, on such Initial Election Date), to receive, in lieu of all or
any portion of the compensation to which such Eligible Director would otherwise be entitled to
receive as a member of the Board of Directors (other than reimbursement for expenses) for the
period from the next scheduled annual meeting to the day prior to the following annual meeting,
Deferral Election Stock Options in accordance with the formula set forth below;
provided, however, that a director may make his first Deferral Election on, or
at any time prior to, such director’s Initial Election Date. The Deferral Election Stock Options
shall be granted on the day of the annual meeting in each year for which a Deferral Election
has been made. The number of Deferral Election Stock Options granted to an Eligible Director
shall be an amount whose value, as determined by an independent valuation expert, retained by
the Committee, is equivalent on the Grant Date to the cash compensation which the Eligible
Director would otherwise have been entitled to receive for such year. No Eligible
Director shall be entitled to receive Deferral Election Stock Options having a value greater
than the amount of the annual cash compensation that such director would have been entitled to
receive for such year as of the date of the adoption of Amendment No. 1, unless, in the event
that such cash compensation is increased subsequent to the date of the adoption of Amendment No.
1, such increase has been approved by a majority of
stockholders of the Company. Each Deferral Election shall be set forth in a written notice
delivered to the Secretary of the Company. A Deferral Election may be terminated or modified by
written notice to the Secretary of the Company, in which case such termination or modification
shall become effective six months after the receipt of such notice by the Company.

          (b) Paragraph 2(c) of the Non-Employee Plan is amended by adding the words “or a Deferral
Election Stock Option” after the words “Option exercise price per Option Share for an Annual
Grant.

          (c) Paragraph 2(g) of the Non-Employee Plan is amended by adding the following
sentence at the end thereof: “This Section 2(g) shall not apply to Deferral Election Stock
Options which shall be subject instead to the last paragraph of
Section 3 of this Part II.”

13. Vesting

     Paragraph 3 of the Non-Employee Plan is amended by adding the words “(other than Deferral
Election Stock Options)” after the words “Subject to Section 2(f) of the Non-Employee Plan, an
Option” in the first sentence thereof; and by inserting the
following at the end thereof:

          “Deferral Election Stock Options shall become exercisable in respect of the aggregate number
of underlying shares of Common Stock, determined as of the Grant
Date, on the first anniversary of
the Grant Date (or such longer period as the Committee may set); provided that Deferral Election
Stock Options shall become immediately exercisable upon a director’s death, Disability or upon a
Change of Control. If a director’s membership on the Board ends
for any reason other than death.
Disability, or a Change of Control, then the number of Deferral Election Stock Options granted for
the year in which the membership ends shall be reduced to reflect the amount of
compensation actually earned by the Director in that year and the remaining Deferral Election
Stock Options granted in that year shall become immediately exercisable. Once any Deferral Election
Stock Options become exercisable, they shall remain exercisable for the lesser of (i) 10 years
after the Grant Date or (ii) one year after the director’s membership on the Board ends for any
reason.”

-4-

 

	14.	 	Board Authority

     Paragraph 4
of the Non-Employee Plan is amended by adding the words “and Deferral Elections”
after the words “The existence of the Non-Employee Plan, any Option Agreement and/or the
formula grants” in the first sentence thereof.

	15.	 	Date of the Amendment and Approval of Shareholders

     This First Amendment is dated April 27, 1995, which is the date upon which the Board of
Directors adopted this Amendment. This Amendment is subject to the approval by affirmative vote of
the holders of a majority of the shares present, either in person or by proxy, and entitled to vote
at, a duly held meeting of the shareholders at which a quorum is present representing a majority of
all outstanding shareholders either in person or by proxy. If such shareholder approval is not
obtained, no Deferral Election Stock Options may be granted to directors until such shareholder
approval is obtained and all elections previously made by any directors shall be automatically
canceled.

- 5 -

 

SECOND AMENDMENT TO THE GLACIER WATER SERVICES, INC.

1994 STOCK COMPENSATION PROGRAM

     1. Purpose. The purpose of this Second Amendment to the Glacier Water Services, Inc.
1994 Stock Compensation Program (this “Amendment”) is to
modify certain provisions pursuant to which members of the Board of Directors of Glacier Water
Services, Inc. may elect to receive Deferral Election Stock Options in lieu of cash director
fees.

     2. Definition. Terms used in this Amendment and not defined herein shall have the
meanings ascribed to them in the Glacier Water Services, Inc. 1994 Stock Compensation Program.

     3. Vesting.
The last sentence of Paragraph 3 of the 1994 Non-Employee Directors
Stock Option Plan is amended by deleting the text
“10 years” and replacing it with the text
“five (5) years.”

     4. Date
of the Amendment. This Second Amendment is dated 9/17,1996 and
shall be effective for all Deferral Election Stock Options granted prior to the date
hereof or granted hereafter.

	 	 	In WITNESS WHEREOF, the Company has caused this Amendment to be executed this
17th day of September, 1996.

	 	 	 	 	 
	 	GLACIER WATER SERVICES, INC.

 	 
	 	By:  	/s/
Brenda K. Foster
 	 
	 	 	Name:  	Brenda K. Foster 	 
	 	 	Title:  	Corporate Secretary 	 

 

 

	 	 	 	 	 

SECOND AMENDMENT TO THE GLACIER WATER SERVICES, INC.

1994 STOCK COMPENSATION PROGRAM

     1. Purpose. The purpose of this Second Amendment to the Glacier Water Services, Inc.
1994 Stock Compensation Program (this “Amendment”) is to modify certain provisions pursuant to which members of the Board of Directors of Glacier Water Services, Inc.
may elect to receive Deferral Election Stock Options in lieu of cash director fees.

     2. Definitions. Terms used in this Amendment and not defined herein shall have
the meanings ascribed to them in the Glacier Water Services, Inc. 1994 Stock
Compensation Program.

     3. Vesting. The last sentence of Paragraph 3 of the 1994 Non-Employee Directors
Stock Option Plan is amended by deleting the text “10 years” and replacing it with the text
“five (5) years.”

     4. Date
of the Amendment. This Second Amendment is dated _______,1996 and shall be
effective for all Deferral Election Stock Options granted prior to the date hereof or granted
hereafter.

     In WITNESS WHEREOF, the Company has caused this Amendment to
be executed this 19th day of September, 1996.

	 	 	 	 	 
	 	GLACIER WATER SERVICES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

Exhibit 1

THIRD AMENDMENT TO GLACIER WATER SERVICES, INC

1994 STOCK COMPENSATION PROGRAM

     1. Purpose. The purpose of this Third Amendment to Glacier Water Services, Inc.
1994 Stock Compensation Program (this “Third Amendment”) is to increase the maximum number of
shares of common stock issuable under the Program.

     2. Definitions. Terms used in this Amendment and not defined herein
shall have the meanings ascribed to them in the Glacier Water Services, Inc. 1994
Stock Compensation Program (the “Program”).

     3. Common Shares Subject to Options. Article 2 of the Program is
amended by deleting the number “175,000” and replacing it with the number
“275,000” in the first sentence thereof. Such number pertains to the maximum
number of options for common stock to be granted under the 1994 Employee Stock
Option Plan (Part I of the Program).

     4. Date of the Amendment and Approval of Shareholders. This Third
Amendment is dated
February        , 1997, which is the date upon which the Board of
Directors adopted this Amendment. This Amendment is subject to the approval by
affirmative vote of the holders of a majority of the shares present, either in
person or by proxy, and entitled to vote at a duly held meeting of the
shareholders at which a quorum is present representing a majority of all
outstanding shareholders either in person or by proxy. If such shareholder
approval is not obtained, this Third Amendment shall have no further effect and
any options granted in reliance of shareholder approval hereof shall be
automatically cancelled.

 

 

Exhibit 1

FIVE AMENDMENT TO GLACIER WATER SERVICES, INC.

1994 STOCK COMPENSATION PROGRAM

     1. Purpose. The purpose of this Fourth Amendment (this “Fourth Amendment”) to
Glacier Water Services, Inc. (the “Company”) 1994 Stock Compensation Program (the
“Program”) is to (i) amend the Program to remove the requirement that the shareholders of the
Company approve certain amendments delineated in Article 6 of the Program, in accordance with
the modifications made to Rule 16b-3, effective as of August 15, 1996, promulgated under the
Securities Exchange Act of 1934, as amended, and (ii) to amend Part II of the Program, the 1994
Non-Employee Directors Plan (the “Plan”), to allow the Compensation Committee of the Board of
Directors of the Company to set the vesting and exercise schedule for Non-Employee Directors
upon termination of Board of Directors membership for any reason other than for Cause.

     2. Definitions. Terms used in this Amendment and not defined herein shall
have the meanings ascribed to them in the Program.

     3. Amendment of the Program. Article 6 of the Program is hereby deleted in
its entirety and replaced by the following:

“Article 6. Termination and Amendment of the Program. In general, the
Program shall terminate 10 years from the date such program is adopted by the
Board of Directors, or the date such program is approved by the stockholders,
whichever is earlier, or shall terminate at such earlier time as the Board of
Directors may so determine. No options shall be granted under the Program after
that date. Subject to the limitation contained in Article 7 of these General
Previsions, the Committee may at any time amend or revise the terms of the
Program, including the form and substance of the Option Agreements to be used
hereunder; provided, however, that the terms and provisions of
the Program which determine the eligibility of Non-Employee Directors to receive
grants under Part II and the amount, price end timing of the formula grants
under such Part II shall not be amended more than once every six months, other
than to comport with changes in the Internal Revenue Code of 1986, as amended
(the “Code”), the Employee Retirement Income Security Act of 1974, as amended,
or the rules thereunder; provided, further, however, that
without approval by the stockholders of the Company representing a majority of
the shares entitled to vote thereon (as described in Article 4 of these General
Provisions) no amendment or revision shall, except as provided in Article 5 of
these General Provisions, materially increase the maximum number of shares that
may be issued under this Program. In addition, no such amendment or revision
shall be effective it would disqualify the Program from the exemptions provided
by SEC Rule l6b-3.”

     4. Amendment of the Plan. Section 2(g) of the Plan is hereby replaced in its
entirety and replaced with the following:

     “(g) Rights Upon Termination of Board Membership. In the event that an
Eligible Director ceases to be a Director of the Company or its Subsidiaries
upon retirement or for any reason other than death, Disability or removal from
the Board for Cause, the Eligible Director shall have the right to exercise an
Option during its term within a period of ninety days after such termination to
the extent that the Option was exercisable at the time such Eligible Director
ceased to be a member of the Board. In the event that an Eligible Director
ceases to be a Director of the Company or its Subsidiaries due to death or
Disability, such Eligible Director’s Options shall immediately and fully vest
and the Eligible Director or his or her successor shall have the right to
exercise any such Option during its term within a period of one year after such
Eligible Director ceased to be a member of the Board. Notwithstanding the
foregoing, however, the Committee may, as its discretion based on the specific
facts surrounding the departure of an Eligible Director

 

 

from the Board, set an alternative vesting and exercise schedule for Options
issued to such Eligible Director so long as such Eligible Director’s departure
from the Board was for any reason other than for
Cause. In the event of an Eligible Director’s removal from the Board for Cause,
all unexercised Options shall be forfeited and cancelled.”

     5. Date of the Amendment. This Fourth Amendment is effective as of March 31,1997, which is
the date upon which the Board of Directors adopted this Amendment.

-2-

 

Exhibit A

FOURTH AMENDMENT TO GLACIER WATER SERVICES, INC.

1994 STOCK COMPENSATION PROGRAM

     1. Purpose. The purpose of this fourth Amendment to Glacier Water Services, Inc.
1994 Stock Compensation Program (this “Fourth Amendment”) is to increase the maximum number of
shares of common stock issuable under the Program.

     2. Definitions. Terms used in this Amendment and not defined herein shall have the
meanings ascribed to them in the Glacier Water Services, Inc. 1994 Stock Compensation Program
(the “Program”).

     3. Common Shares Subject to Options. Article 2 of the Program is amended by
deleting the number “275,000” and replacing it with the number “525,000” in the first sentence
thereof. Such number pertains to the maximum number of options for common stock to be granted
under Part I of the 1994 Stock Compensation Program. Article of the Program is amended by
deleting the number “150,000” and replacing it with the number
“180,000” in the second sentence thereof. Such number pertains to the maximum number of options
for common stock to be granted under Part II of the 1994 Stock Compensation Program.

     4. Date of the Amendment and Approval of Shareholders. This Fourth Amendment
is effective as of April 14, 1998, and is subject to the approval by affirmative vote of the holders of a
majority of the shares present, either in person or by
proxy, and entitled to vote at a duly held meeting of the
shareholders at which a quorum is present representing a
majority of all outstanding shareholders either in person
or by proxy. If such shareholder approval is not obtained,
this Fourth Amendment shall have no further effect and any
options granted in reliance of shareholder approval hereof
shall be automatically
cancelled.

 

 

Exhibit 1

SIXTH AMENDMENT TO GLACIER WATER SERVICES, INC.

1994 STOCK COMPENSATION PROGRAM

1. Purpose.

     The purpose of this Sixth Amendment to Glacier Water Services, Inc. 1994 Stock
Compensation Program (the “Sixth Amendment”) is to increase the maximum number of
shares of common stock under the Program.

2. Definitions.

     Terms used in this Amendment and not defined herein shall have the meaning ascribed to
them in the Glacier Water Services, Inc. 1994 Stock Compensation Program (the “Program”).

3. Common Shares Subject to Options.

     Article 2 of the Program is amended by deleting the number “525,000” and replacing it
with the number “650,000” in the first sentence thereof. Such number pertains to the
maximum number of options for common stock to be granted under Part I of the 1994
Stock Compensation Program.

     Article 2 of the Program is amended by deleting the number “180,000” and replacing it
with the number “300,000” in the second sentence thereof, such number pertains to the maximum
number of options for common stock to be granted under Part II of the 1994 Stock Compensation
Program.

4. Date of the Amendment and Approval of Shareholders.

     This Sixth Amendment is effective as of March 21, 2000, and is subject to the approval
by affirmative vote of the holders of a majority of the shares present, either in person or
by proxy, and entitled to vote at a duly held meeting of the shareholders at which a quorum is
present representing a majority of all outstanding shareholders either in person or by proxy.
If such shareholder approval is not obtained, this Sixth Amendment shall have no further
effect and any options granted in reliance of shareholder approval hereof shall be
automatically canceled.

16

 

Exhibit II

SEVENTH AMENDMENT TO GLACIER WATER SERVICES, INC.

1994 STOCK COMPENSATION PROGRAM

1. Purpose.

     The purpose of this Seventh Amendment to Glacier Water Services, Inc. 1994 Stock
Compensation Program (the “Seventh Amendment”) is to increase the maximum number of shares of
common stock under the Program.

2. Definitions.

     Terms used in this Amendment and not defined herein shall have the meaning ascribed to them
in the Glacier Water Services, Inc. 1994 Stock Compensation Program (the “Program”).

3. Common Shares Subject to Options.

     Article 2 of the Program is amended by deleting the number “650,000” and replacing it with the
number “800,000” in the first sentence thereof. Such number pertains to the maximum number of
options for common stock to be granted under Part I of the 1994 Stock Compensation Program.

     Article 2 of the Program is amended by deleting the number “300,000” and replacing it with the
number “500,000” in the second sentence thereof. Such number pertains to the maximum number of
options for common stock to be granted under Part II of the 1994 Stock Compensation Program.

4. Date of the Amendment and Approval of Shareholders.

     This Seventh Amendment is effective as of March 15, 2001, and is subject to the approval by
affirmative vote of the holders of a majority of the shares present, either in person or by proxy,
and entitled to vote at a duly held meeting of the shareholders at which a quorum is present
representing a majority of all outstanding shareholders either in person or by proxy. If such
shareholder approval is not obtained, this Seventh Amendment shall have no further effect and any
options granted in reliance of shareholder approval hereof shall be automatically canceled.

22

 

Eighth Amendment to the Glacier Water Services, Inc.

1994 Stock Compensation Program

     1. Purpose. The purpose of this Eighth Amendment to the Glacier Water Services,
Inc. 1994 Stock Compensation Program (this “Amendment”) is to modify certain provisions pursuant to
which members of the Board of Directors of Glacier Water Services, Inc. may be granted options in
accordance with the 1994 Non-Employee Directors Stock Option Plan (the “Plan”).

     2. Definitions. Terms used in this Amendment and not defined herein shall have the
meanings ascribed to them in the Glacier Water Services, Inc. 1994 Stock Compensation Program.

     3. Grants.

     (a) The Plan is hereby amended by deleting each reference to the term “Deferral Elections”,
including, without limitation, in the first sentence of Paragraph 1 of Part II of the Plan, and
inserting, in its place, the term “Supplemental Grants”.

     (b) Section 2(b) of Part II of the Plan is hereby amended and restated in its entirety to read
as follows: “An annual Option to acquire 1,500 shares of Common Stock (as adjusted pursuant to
Article 5 of the General Provisions of the Program) shall be granted (an “Annual Grant”)
automatically each year, the first such grant to be made, subject to shareholder approval, on April
12, 1994 and subsequent grants to be made on the first business day of January of each year, to
each Eligible Director. A supplemental Option to acquire the number of shares of Common Stock
determined as set forth below (as adjusted pursuant to Article 5 of the General Provisions of the
Program) shall be granted (a “Supplemental Grant”) automatically each year, the first such grant to
be made on the day of the next annual meeting and subsequent grants to be made on each succeeding
annual meeting, to each Eligible Director. The number of Options granted to an Eligible Director
under a Supplemental Grant shall be the lesser of (i) a number whose value, as determined by an
independent valuation expert, retained by the Committee, is equivalent on the Grant Date to Twenty
Five Thousand Dollars ($25,000.00) in the case of Directors and One Hundred Seven Thousand Dollars
($107,000.00) in the case of the Chairman of the Board of Directors, and (ii) a number determined
by the Committee on an annual basis.”

 

 

     (c) The Plan is hereby amended by deleting each reference to the term “Deferral Election Stock
Option”, including, without limitation, in the first sentence of Paragraph 2(c) of Part II of the
Plan, the last sentence of Paragraph 2(g) of Part II of the Plan and the first, second, third and
fourth sentences of Paragraph 3 of Part II of the Plan, and inserting, in its place, the term
“supplemental Option”.

     4. Date of the Amendment. This Eighth Amendment is dated the 1st day of May 2002 and
shall be effective for all supplemental Options granted prior to the date hereof or granted
hereafter.

     IN WITNESS WHEREOF, the Company has caused this Amendment to be executed this 1st day of May
2002.

	 	 	 	 	 
	 	Glacier Water Services, Inc.

 	 
	 	By:  	 	 
	 	 	Name:  	W.D. Walters 	 
	 	 	Title:  	Secretary 	 

 

 

	 	 	 	 	 

Exhibit I

NINTH AMENDMENT TO GLACIER WATER SERVICES, INC.

1994 STOCK COMPENSATION PROGRAM

1. Purpose.

     The purpose of this Ninth Amendment to Glacier Water Services, Inc. 1994 Stock Compensation
Program (the “Ninth Amendment”) is to increase the maximum number of shares of common stock under
the Program

2. Definitions.

     Terms used in this Amendment and not defined herein shall have the meaning ascribed to them in
the Glacier Water Services, Inc. 1994 Stock Compensation Program (the “Program”).

3. Common Shares Subject to Options.

     Article 2 of the Program is amended by deleting the number “500,000” and replacing it with the
number “600,000” in the second sentence thereof. Such number pertains to the maximum number of
options for common stock to be granted under Part II of the 1994 Stock Compensation Program

4. Date of the Amendment and Approval of Shareholders.

     This Ninth Amendment is effective as of July 11, 2002, and is subject to the approval by
affirmative vote of the holders of a majority of the shares present, either in person or by proxy,
and entitled to vote at a duly held meeting of the shareholders at which a quorum is present
representing a majority of all outstanding shareholders either in person or by proxy. If such
shareholder approval is not obtained, this Ninth Amendment shall have no further effect and any
options granted in reliance of shareholder approval hereof shall be automatically canceled.

 

 

     If a stockholder wants to nominate a person for election to the Board other than a director
nominated by the Nominating Committee, notice of the proposed nomination must be provided to the
Secretary of the Company in the time period set forth in the previous paragraph in the case of the
2003 annual meeting and, in the case of a special meeting called for the purpose of electing
directors, by the close of business on the tenth day following the day on which public disclosure
of the date of the special meeting is made.

FORWARD LOOKING STATEMENTS

     This Proxy Statement contains “forward-looking” information, as that term is defined by the
federal securities laws, about our financial condition, results of operations and business. You can
find many of these statements by looking for words such as “may”, “will”, “expect”, “anticipate”,
“believe”, “estimate”, and similar words used in this Proxy Statement. The forward-looking
statements in this Proxy Statement are intended to be subject to the safe harbor protection
provided by the federal securities laws.

     These forward-looking statements are subject to numerous assumptions, risks and uncertainties
(including trade relations and competition that may cause our actual results to be materially
different from any future results expressed or implied in those statements).

     Because the statements are subject to risks and uncertainties, actual results may differ
materially from those expressed or implied by the forward-looking statements. We caution readers
not to place undue reliance on these statements, which speak only as of the date of this Proxy
Statement.

     The cautionary statements set forth above should be considered in connection with any
subsequent written or oral forward-looking statements that we or persons acting on our behalf may
issue. We do not undertake any obligation to review or confirm analysts’ expectations or estimates
or to release publicly any revisions to any forward-looking statements to reflect events or
circumstances after the date of this report or to reflect the occurrence of unanticipated events.

	 	 	 	 	 
	 	By Order of the Board of Directors

 	 
	 	/s/ W. David Walters
 	 
	 	W. David Walters 	 
	 	Senior Vice President,

Chief Financial Officer and Secretary 	 
	 

Dated: June 11, 2002exv10w2

Exhibit 10.2

INDEMNIFICATION AGREEMENT

     THIS AGREEMENT (the “Agreement”) is made and entered into as of ____________, 20___ between
Glacier Water Services, Inc. a Delaware corporation (“the Company”), and _________________
(“Indemnitee”).

     WITNESSETH THAT:

     WHEREAS, Indemnitee performs a valuable service for the Company; and

     WHEREAS, the Amended and Restated Certificate of Incorporation of the Company (the “Charter”)
providing for the indemnification of the officers and directors of the Company to the maximum
extent authorized by Section 145 of the Delaware General Corporation Law, as amended (“Law”); and

     WHEREAS, the Charter and the Law, by their nonexclusive nature, permit contracts between the
Company and the officers or directors of the Company with respect to indemnification of such
officers or directors; and

     WHEREAS, in accordance with the authorization as provided by the Law, the Company may purchase
and maintain a policy or policies of directors’ and officers’ liability insurance (“D & O
Insurance”), covering certain liabilities which may be incurred by its officers or directors in the
performance of their obligations to the Company; and

     WHEREAS, in order to induce Indemnitee to continue to serve as an officer or director of the
Company, the Company has determined and agreed to enter into this contract with Indemnitee;

     NOW, THEREFORE, in consideration of Indemnitee’s service as an officer or director after the
date hereof, the parties hereto agree as follows:

     1. Indemnity of Indemnitee. The Company hereby agrees to hold harmless and indemnify
Indemnitee to the full extent authorized or permitted by the provisions of the Law, as such may be
amended from time to time, and of the Charter, as such may be amended. In furtherance of the
foregoing indemnification, and without limiting the generality thereof:

          (a) Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee
shall be entitled to the rights of indemnification provided in this Section 1(a) if, by reason of
his Corporate Status (as hereinafter defined), he is, or is threatened to be made, a party to or
participant in any Proceeding (as hereinafter defined) other than a Proceeding by or in the right
of the Company. Pursuant to this Section 1(a), Indemnitee shall be indemnified against all
Expenses (as hereinafter defined), judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by him, or on his behalf, in connection with such Proceeding or
any claim, issue or matter therein, if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company, and with respect to any
criminal Proceeding, had no reasonable cause to believe his conduct was unlawful.

1

 

          (b) Proceedings by or in the Right of the Company. Indemnitee shall be entitled to
the rights of indemnification provided in this Section 1(b) if, by reason of his Corporate Status,
he is, or is threatened to be made, a party to or participant in any Proceeding brought by or in
the right of the Company. Pursuant to this Section 1(b), Indemnitee shall be indemnified against
all Expenses actually and reasonably incurred by him, or on his behalf, in connection with such
Proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the Company; provided, however, if applicable law so provides, no
indemnification against such Expenses shall be made in respect of any claim, issue or matter in
such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company unless
and to the extent that the Court of Chancery of the State of Delaware shall determine that such
indemnification may be made.

          (c) Indemnification for Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason
of his Corporate Status, a party to and is successful, on the merits or otherwise, in any
Proceeding, he shall be indemnified to the maximum extent permitted by law against all Expenses
actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is
not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one
or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify
Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in
connection with each successfully resolved claim, issue or matter. For purposes of this Section
and without limitation, the termination of any claim, issue or matter in such a Proceeding by
dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim,
issue or matter.

     2. Additional Indemnity. In addition to, and without regard to any limitations on,
the indemnification provided for in Section 1 of this Agreement, the Company shall and hereby does
indemnify and hold harmless Indemnitee against all Expenses, judgments, penalties, fines and
amounts paid in settlement actually and reasonably incurred by him or on his behalf if, by reason
of his Corporate Status, he is, or is threatened to be made, a party to or participant in any
Proceeding (including a Proceeding by or in the right of the Company), including, without
limitation, all liability arising out of the negligence or active or passive wrongdoing of
Indemnitee. The only limitation that shall exist upon the Company’s obligations pursuant to this
Agreement shall be that the Company shall not be obligated to make any payment to Indemnitee that
is finally determined (under the procedures, and subject to the presumptions, set forth in Sections
6 and 7 hereof) to be unlawful under Delaware law.

     3. Contribution in the Event of Joint Liability.

          (a) Whether or not the indemnification provided in Sections 1 and 2 hereof is available, in
respect of any threatened, pending or completed action, suit or proceeding in which the Company is
jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the
Company shall pay, in the first instance, the entire amount of any judgment or settlement of such
action, suit or proceeding without requiring Indemnitee to contribute to such payment and the
Company hereby waives and relinquishes any right of contribution it may have against Indemnitee.
The Company shall not enter into any settlement of any action, suit or proceeding in which the
Company is jointly liable with Indemnitee (or would be if joined in such

2

 

action, suit or proceeding) unless such settlement provides for a full and final release of
all claims asserted against Indemnitee.

          (b) Without diminishing or impairing the obligations of the Company set forth in the preceding
subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any portion
of any judgment or settlement in any threatened, pending or completed action, suit or proceeding in
which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or
proceeding), the Company shall contribute to the amount of expenses (including attorneys’ fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or
payable by Indemnitee in proportion to the relative benefits received by the Company and ail
officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with
Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and
Indemnitee, on the other hand, from the transaction from which such action, suit or proceeding
arose; provided, however, that the proportion determined on the basis of relative benefit may, to
the extent necessary to conform to law, be further adjusted by reference to the relative fault of
the Company and all officers, directors or employees of the Company other than Indemnitee who are
jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the
one hand, and Indemnitee, on the other hand, in connection with the events that resulted in such
expenses, judgments, fines or settlement amounts, as well as any other equitable considerations
which the Law may require to be considered. The relative fault of the Company and all officers,
directors or employees of the Company, other than Indemnitee, who are jointly liable with
Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and
Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree
to which their actions were motivated by intent to gain personal profit or advantage, the degree to
which their liability is primary or secondary and the degree to which their conduct is active or
passive.

          (c) The Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims
of contribution which may be brought by officers, directors or employees of the Company, other than
Indemnitee, who may be jointly liable with Indemnitee.

     4. Indemnification for Expenses of a Witness. Notwithstanding any other provision of
this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness in
any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses
actually and reasonably incurred by him or on his behalf in connection therewith.

     5. Advancement of Expenses. Notwithstanding any other provision of this Agreement,
the Company shall advance all Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding by reason of Indemnitee’s Corporate Status within thirty (30) days after the receipt
by the Company of a statement or statements from Indemnitee requesting such advance or advances
from time to time, whether prior to or after final disposition of such Proceeding. Such statement
or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be
preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any Expenses
advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified
against such Expenses. Any advances and undertakings to repay pursuant to this Section 5 shall be
unsecured and interest free.

3

 

     Notwithstanding the foregoing, the obligation of the Company to advance Expenses pursuant to
this Section 5 shall be subject to the condition that, if, when and to the extent that the Company
determines that Indemnitee would not be permitted to be indemnified under applicable law, the
Company shall be entitled to be reimbursed, within thirty (30) days of such determination, by
Indemnitee (who hereby agrees to reimburse the Company) for all such amounts theretofore paid;
provided, however, that if Indemnitee has commenced or thereafter commences legal proceedings in a
court of competent jurisdiction to secure a determination that Indemnitee should be indemnified
under applicable law, any determination made by the Company that Indemnitee would not be permitted
to be indemnified under applicable law shall not be binding and Indemnitee shall not be required to
reimburse the Company for any advance of Expenses until a final judicial determination is made with
respect thereto (and as to which all rights of appeal therefrom have been exhausted or lapsed).

     6. Procedures and Presumptions for Determination of Entitlement to Indemnification.
It is the intent of this Agreement to secure for Indemnitee rights of indemnity that are as
favorable as may be permitted under the Law and public policy of the State of Delaware.
Accordingly, the parties agree that the following procedures and presumptions shall apply in the
event of any question as to whether Indemnitee is entitled to indemnification under this Agreement:

          (a) To obtain indemnification (including, but not limited to, the advancement of Expenses and
contribution by the Company) under this Agreement, Indemnitee shall submit to the Company a written
request, including therein or therewith such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine whether and to what extent
Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board of Directors in writing that
Indemnitee has requested indemnification.

          (b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of
Section 6(a) hereof, a determination, if required by applicable law, with respect to Indemnitee’s
entitlement thereto shall be made in the specific case by one of the following three methods, which
shall be at the election of the Board of Directors: (1) by a majority vote of the disinterested
directors, even though less than a quorum, (2) by independent legal counsel in a written opinion or
(3) by the stockholders.

          (c) If the determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 6(b) hereof, the Independent Counsel shall be selected as provided in
this Section 6(c). The Independent Counsel shall be selected by the Board of Directors.
Indemnitee or the Company, as the case may be, may, within 10 days after such written notice of
selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a
written objection to such selection; provided, however, that such objection may be asserted only on
the ground that the Independent Counsel so selected does not meet the requirements of “Independent
Counsel” as defined in Section 13 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. Absent a proper and timely objection, the
person so selected shall act as Independent Counsel. If a written objection is made and
substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and
until such objection is withdrawn or a court has determined that

4

 

such objection is without merit. If, within 20 days after submission by Indemnitee of a
written request for indemnification pursuant to Section 6(a) hereof, no Independent Counsel shall
have been selected and not objected to, either the Company or Indemnitee may petition the Court of
Chancery of the State of Delaware or other court of competent jurisdiction for resolution of any
objection which shall have been made by the Company or Indemnitee to the other’s selection of
Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the
court or by such other person as the court shall designate, and the person with respect to whom all
objections are so resolved or the person so appointed shall act as Independent Counsel under
Section 6(b) hereof. The Company shall pay any and all reasonable fees and expenses of Independent
Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 6(b)
hereof, and the Company shall pay all reasonable fees and expenses incident to the procedures of
this Section 6(c), regardless of the manner in which such Independent Counsel was selected or
appointed.

          (d) In making a determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the
burden of proof and the burden of persuasion by clear and convincing evidence.

          (e) Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on
the records or books of account of the Enterprise, including financial statements, or on
information supplied to Indemnitee by the officers of the Enterprise (as hereinafter defined) in
the course of their duties, or on the advice of legal counsel for the Enterprise or on information
or records given or reports made to the Enterprise by an independent certified public accountant or
by an appraiser or other expert selected with reasonable care by the Enterprise. In addition, the
knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the
Enterprise shall not be imputed to Indemnitee for purposes of determining the right to
indemnification under this Agreement. Whether or not the foregoing provisions of this Section 6(e)
are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best interests of the
Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden
of persuasion by clear and convincing evidence.

          (f) If the person, persons or entity empowered or selected under Section 6 to determine
whether Indemnitee is entitled to indemnification shall not have made a determination within sixty
(60) days after receipt by the Company of the request therefor, the requisite determination of
entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled
to such indemnification absent (i) a misstatement by Indemnitee of a material fact, or an omission
of a material fact necessary to make Indemnitee’s statement not materially misleading, in
connection with the request for indemnification, or (ii) a prohibition of such indemnification
under applicable law; provided, however, that such 60-day period may be extended for a reasonable
time, not to exceed an additional thirty (30) days, if the person, persons or entity making such
determination with respect to entitlement to indemnification in good faith requires such additional
time to obtain or evaluate documentation and/or information relating thereto; and provided,
further, that the foregoing provisions of this Section 6(f) shall not apply if the determination of
entitlement to indemnification is to be made by the stockholders

5

 

pursuant to Section 6(b) of this Agreement and if (A) within fifteen (15) days after receipt
by the Company of the request for such determination, the Board of Directors or the Disinterested
Directors, if appropriate, resolve to submit such determination to the stockholders for their
consideration at an annual meeting thereof to be held within seventy-five (75) days after such
receipt and such determination is made thereat, or (B) a special meeting of stockholders is called
within fifteen (15) days after such receipt for the purpose of making such determination, such
meeting is held for such purpose within sixty (60) days after having been so called and such
determination is made thereat.

          (g) Indemnitee shall cooperate with the person, persons or entity making such determination
with respect to Indemnitee’s entitlement to indemnification, including providing to such person,
persons or entity upon reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee
and reasonably necessary to such determination. Any Independent Counsel, member of the Board of
Directors or stockholder of the Company shall act reasonably and in good faith in making a
determination regarding the Indemnitee’s entitlement to indemnification under this Agreement. Any
costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so
cooperating with the person, persons or entity making such determination shall be borne by the
Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and
the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

          (h) The Company acknowledges that a settlement or other disposition short of final judgment
may be successful if it permits a party to avoid expense, delay, distraction, disruption and
uncertainty. In the event that any action, claim or proceeding to which Indemnitee is a party is
resolved in any manner other than by adverse judgment against Indemnitee (including, without
limitation, settlement of such action, claim or proceeding with or without payment of money or
other consideration) it shall be presumed that Indemnitee has been successful on the merits or
otherwise in such action, suit or proceeding. Anyone seeking to overcome this presumption shall
have the burden of proof and the burden of persuasion by clear and convincing evidence.

     7. Remedies of Indemnitee.

          (a) In the event that (i) a determination is made pursuant to Section 6 of this Agreement that
Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is
not timely made pursuant to Section 5 of this Agreement, (iii) no determination of entitlement to
indemnification is made pursuant to Section 6(b) of this Agreement within 90 days after receipt by
the Company of the request for indemnification, (iv) payment of indemnification is not made
pursuant to this Agreement within ten (10) days after receipt by the Company of a written request
therefor or (v) payment of indemnification is not made within ten (10) days after a determination
has been made that Indemnitee is entitled to indemnification or such determination is deemed to
have been made pursuant to Section 6 of this Agreement, Indemnitee shall be entitled to an
adjudication in an appropriate court of the State of Delaware, or in any other court of competent
jurisdiction, of his entitlement to such indemnification. Indemnitee shall commence such
proceeding seeking an adjudication within 180 days following the date on which Indemnitee first has
the right to commence such

6

 

proceeding pursuant to this Section 7(a). The Company shall not oppose Indemnitee’s right to
seek any such adjudication.

          (b) In the event that a determination shall have been made pursuant to Section 6(b) of this
Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding commenced
pursuant to this Section 7 shall be conducted in all respects as a de novo trial on the merits, and
Indemnitee shall not be prejudiced by reason of the adverse determination under Section 6(b).

          (c) If a determination shall have been made pursuant to Section 6(b) of this Agreement that
Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any
judicial proceeding commenced pursuant to this Section 7, absent a prohibition of such
indemnification under applicable law.

          (d) In the event that Indemnitee, pursuant to this Section 7, seeks a judicial adjudication of
his rights under, or to recover damages for breach of, this Agreement, or to recover under any
directors’ and officers’ liability insurance policies maintained by the Company, the Company shall
pay on his behalf, in advance, any and all expenses (of the types described in the definition of
Expenses in Section 13 of this Agreement) actually and reasonably incurred by him in such judicial
adjudication, regardless of whether Indemnitee ultimately is determined to be entitled to such
indemnification, advancement of expenses or insurance recovery.

          (e) The Company shall be precluded from asserting in any judicial proceeding commenced
pursuant to this Section 7 that the procedures and presumptions of this Agreement are not valid,
binding and enforceable and shall stipulate in any such court that the Company is bound by all the
provisions of this Agreement.

     8. Non-Exclusivity; Survival of Rights; Insurance; Subrogation.

          (a) The rights of indemnification as provided by this Agreement shall not be deemed exclusive
of any other rights to which Indemnitee may at any time be entitled under applicable law, the
Charter, the bylaws of the Company, any agreement, a vote of stockholders, a resolution of
directors or otherwise. No amendment, alteration or repeal of this Agreement or of any provision
hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any
action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment,
alteration or repeal. To the extent that a change in the Law, whether by statute or judicial
decision, permits greater indemnification than would be afforded currently under the Charter and
this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this
Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is
intended to be exclusive of any other right or remedy, and every other right and remedy shall be
cumulative and in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other
right or remedy.

7

 

          (b) To the extent that the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, employees, or agents or fiduciaries of the Company or
of any other corporation, partnership, joint venture, trust, employee benefit plan or other
Enterprise that such person serves at the request of the Company, Indemnitee shall be covered by
such policy or policies in accordance with its or their terms to the maximum extent of the coverage
available for any director, officer, employee, agent or fiduciary under such policy or policies.

          (c) In the event of any payment under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers
required and take all action necessary to secure such rights, including execution of such documents
as are necessary to enable the Company to bring suit to enforce such rights.

          (d) The Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually
received such payment under any insurance policy, contract, agreement or otherwise. In the event
the Company makes any indemnification payments to the Indemnitee and the Indemnitee is subsequently
reimbursed from the proceeds of insurance, the Indemnitee shall promptly refund such
indemnification payments to the Company to the extent of such insurance reimbursement.

          (e) The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is
or was serving at the request of the Company as a director, officer, employee or agent of any other
corporation, partnership, joint venture, trust, employee benefit plan or other Enterprise shall be
reduced by any amount Indemnitee has actually received as indemnification or advancement of
expenses from such other corporation, partnership, joint venture, trust, employee benefit plan or
other Enterprise.

     9. Exception to Right of Indemnification. Notwithstanding any other provision of this
Agreement, Indemnitee shall not be entitled to indemnification under this Agreement with respect to
any Proceeding brought by Indemnitee, or any claim therein, unless (a) the bringing of such
Proceeding or making of such claim shall have been approved by the Board of Directors of the
Company or (b) such Proceeding is being brought by Indemnitee to assert, interpret or enforce his
rights under this Agreement. Notwithstanding any provision in this Agreement, the Company shall
not be obligated under this Agreement to make any indemnity in connection with any claim made
against Indemnitee for an accounting of profits made from the purchase and sale (or sale and
purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of
the Securities Exchange Act of 1934, as amended, or similar provisions of state statutory law or
common law.

     10. Duration of Agreement. All agreements and obligations of the Company contained
herein shall continue during the period Indemnitee is an officer or director of the Company (or is
or was serving at the request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other Enterprise) and shall continue thereafter
so long as Indemnitee shall be subject to any Proceeding (or any proceeding commenced under Section
7 hereof) by reason of his Corporate Status, whether or not he is

8

 

acting or serving in any such capacity at the time any liability or expense is incurred for
which indemnification can be provided under this Agreement.

     11. Security. To the extent requested by Indemnitee and approved by the Board of
Directors of the Company, the Company may at any time and from time to time provide security to
Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit,
funded trust or other collateral. Any such security, once provided to Indemnitee, may not be
revoked or released without the prior written consent of the Indemnitee.

     12. Enforcement.

          (a) The Company expressly confirms and agrees that it has entered into this Agreement and
assumes the obligations imposed on it hereby in order to induce Indemnitee to serve as an officer
or director of the Company, and the Company acknowledges that Indemnitee is relying upon this
Agreement in serving as an officer or director of the Company.

          (b) This Agreement constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and understandings, oral, written and
implied, between the parties hereto with respect to the subject matter hereof.

     13. Definitions. For purposes of this Agreement:

          (a) “Corporate Status” describes the status of a person who is or was a director, officer,
employee, agent or fiduciary of the Company or of any other corporation, partnership, joint
venture, trust, employee benefit plan or other Enterprise that such person is or was serving at the
express written request of the Company.

          (b) “Disinterested Director” means a director of the Company who is not and was not a party to
the Proceeding in respect of which indemnification is sought by Indemnitee.

          (c) “Enterprise” shall mean the Company and any other corporation, partnership, joint venture,
trust, employee benefit plan or other Enterprise that Indemnitee is or was serving at the express
written request of the Company as a director, officer, employee, agent or fiduciary.

          (d) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees and all other disbursements or
expenses of the types customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, participating, or being or preparing to be a witness in a
Proceeding.

          (e) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in
matters of corporation law and neither presently is, nor in the past five years has been, retained
to represent: (i) the Company or Indemnitee in any matter material either such party (other than
with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under
similar indemnification agreements), or (ii) any other party to the

9

 

Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term “Independent Counsel” shall not include any person who, under the applicable
standards of professional conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under
this Agreement. The Company agrees to pay the reasonable fees of the Independent Counsel referred
to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and
damages arising out of or relating to this Agreement or its engagement pursuant hereto.

          (f) “Proceeding” includes any threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other
actual, threatened or completed proceeding, whether brought by or in the right of the Company or
otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is
or will be involved as a party or otherwise, by reason of the fact that Indemnitee is or was an
officer or director of the Company, by reason of any action taken by him or of any inaction on his
part while acting as an officer or director of the Company, or by reason of the fact that he is or
was serving at the request of the Company as a director, officer, employee, agent or fiduciary of
another corporation, partnership, joint venture, trust or other Enterprise; in each case whether or
not he is acting or serving in any such capacity at the time any liability or expense is incurred
for which indemnification can be provided under this Agreement; including one pending on or before
the date of this Agreement, but excluding one initiated by an Indemnitee pursuant to Section 7 of
this Agreement to enforce his rights under this Agreement.

     14. Severability. If any provision or provisions of this Agreement shall be held by a
court of competent jurisdiction to be invalid, void, illegal or otherwise unenforceable for any
reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of
this Agreement (including without limitation, each portion of any section of this Agreement
containing any such provision held to be invalid, illegal or unenforceable that is not itself
invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall
remain enforceable to the fullest extent permitted by law; and (b) to the fullest extent possible,
the provisions of this Agreement (including, without limitation, each portion of any section of
this Agreement containing any such provision held to be invalid, illegal or unenforceable that is
not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent
manifested thereby. Without limiting the generality of the foregoing, this Agreement is intended
to confer upon Indemnitee indemnification rights to the fullest extent permitted by applicable
laws. In the event any provision hereof conflicts with any applicable law, such provision shall be
deemed modified, consistent with the aforementioned intent, to the extent necessary to resolve such
conflict.

     15. Modification and Waiver. No supplement, modification, termination or amendment of
this Agreement shall be binding unless executed in writing by both of the parties hereto. No
waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.

     16. Notice By Indemnitee. Indemnitee agrees promptly to notify the Company in writing
upon being served with or otherwise receiving any summons, citation, subpoena,

10

 

complaint, indictment, information or other document relating to any Proceeding or matter
which may be subject to indemnification covered hereunder. The failure to so notify the Company
shall not relieve the Company of any obligation which it may have to Indemnitee under this
Agreement or otherwise unless and only to the extent that such failure or delay materially
prejudices the Company.

     17. Notices. All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have been duly given if (i) delivered by hand and received by
the party to whom said notice or other communication shall have been directed, or (ii) mailed by
certified or registered mail with postage prepaid, on the third business day after the date on
which it is so mailed:

          (a) If to Indemnitee, to the address set forth below Indemnitee signature hereto.

If to the Company, to:

Glacier Water Services, Inc.

1385 Park Center Drive

Vista, CA 92081-8338

or to such other address as may have been furnished to Indemnitee by the Company or to the Company
by Indemnitee, as the case may be.

     18. Identical Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original but all of which
together shall constitute one and the same Agreement. Only one such counterpart signed by the
party against whom enforceability is sought needs to be produced to evidence the existence of this
Agreement.

     19. Headings. The headings of the paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.

     20. Governing Law. The parties agree that this Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware without application of
the conflict of laws principles thereof.

     21. Gender. Use of the masculine pronoun shall be deemed to include usage of the
feminine pronoun where appropriate.

[Remainder of Page Intentionally Left Blank]

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and
year first above written.

	 	 	 	 	 	 	 

	 	 	COMPANY	 	 
	 
	 	 	 	 	 	 
	 	 	GLACIER WATER SERVICES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	INDEMNITEE	 	 
	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 

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