Exhibit 10.7
SEVERANCE
AGREEMENT
This SEVERANCE AGREEMENT (the
“ Agreement ”), made and entered into as of the
14th day of April, 2009 (the “ Effective Date”)
, between Reddy Ice Corporation, a Nevada corporation (the “
Company ”), and
[ ], an
individual residing at the address set forth on
Exhibit A attached hereto (the “ Executive
”).
WHEREAS, the Company is a
wholly-owned subsidiary of Reddy Ice Holdings, Inc., a
Delaware corporation (the “ Parent” );
and
WHEREAS, the Company and Executive
previously entered into an Employment Agreement dated as of
[ ] (the
“Prior Agreement”) ; and
WHEREAS, the parties acknowledge and
agree that this Agreement shall replace and supersede the Prior
Agreement in its entirety; and
WHEREAS, the Company and the
Executive desire to enter into this Agreement in order to continue
to provide certain benefits to the Executive in the event of
Executive’s severance from employment.
NOW, THEREFORE, in consideration of
the foregoing and the mutual covenants herein contained and for
other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto, intending to be
legally bound, agree as follows:
1.
Termination of Employment . In the event the
Executive’s employment terminates for the reasons set forth
in this Section 1, the Executive shall only be entitled to the
payments provided for in Section 2.
1.1
Termination upon Death . The Executive’s
employment shall terminate as of the date of the Executive’s
death.
1.2
Termination upon Disability . If the Executive becomes
Disabled, the Company may terminate the Executive’s
employment by written notice to the Executive, in which event the
Executive’s employment shall terminate ten (10) days
after the date upon which the Company has given notice to the
Executive of its intention to terminate the Executive’s
employment.
1.3
Termination by the Company for Cause . The Company may
terminate the Executive’s employment at any time for
“Cause” by written notice to the Executive. For
purposes of this Agreement, “Cause” shall mean any of
the following: if the Executive (i) is convicted of, or pleads
guilty to, a felony or a crime involving moral turpitude,
(ii) engages in independently verified, continuing and
unremedied substance abuse involving drugs or alcohol,
(iii) performs an action or fails to take an action that, in
the reasonable judgment of a majority of the disinterested members
of the Board, constitutes willful dishonesty, larceny, fraud or
gross negligence by the Executive in the performance of the
Executive’s duties to the Company, or
makes a knowing or reckless misrepresentation
(including by omission of any material adverse information) to
shareholders, directors or officers of the Parent,
(iv) willfully and repeatedly fails, after ten
(10) business days notice, to materially follow the written
policies of the Company or instructions of the Board or
(v) materially breaches any agreement to which the Executive
and the Company or any of its Subsidiaries are a party, or
materially breaches any written policy, rule or regulation
adopted by the Company or any of its Subsidiaries relating to
compliance with securities laws or other laws, rules or
regulations and such breach is not cured by the Executive or waived
in writing by the Company within thirty (30) days after written
notice of such breach to the Executive.
1.4
Termination by the Company without Cause . The Company
may terminate the Executive’s employment at any time, without
Cause, upon thirty (30) days’ written notice from the Company
to the Executive.
1.5
Termination by the Executive without Cause . The
Executive may terminate the Executive’s employment at any
time, without cause ( i.e ., the Executive’s voluntary
termination), upon thirty (30) days’ written notice from the
Executive to the Company.
1.6
Termination by the Executive for Good Reason . The
Executive may terminate the Executive’s employment for Good
Reason upon thirty (30) days’ written notice from the
Executive to the Company.
2.
Severance Payments .
2.1
Severance Payments Upon Termination for Disability, by the
Company without Cause or by the Executive for Good Reason
. If the Executive’s employment is terminated with the
Company pursuant to Sections 1.2, 1.4 or 1.6 hereof, the Executive
shall be entitled to a severance payment equal to [ ]
% of the Executive’s annual Base Salary then in
effect, which shall be paid within 30 days of the Executive’s
termination of employment, without offset for other
earnings.
2.2
Severance Payments Upon Termination for Cause, Death or by the
Executive Without Cause . If the Executive’s
employment with the Company is terminated is terminated pursuant to
Sections 1.1, 1.3 or 1.5 hereof, the Executive shall receive only
all previously earned, accrued and unpaid Base Salary and benefits
from the Company and its employee benefit plans, including any such
benefits under pension, disability and life insurance plans,
policies (including vacation policies) and programs applicable to
the Company
2.3
Section 409A Compliance.
2.3.1
General Compliance. This Agreement is intended to be
exempt from, or otherwise comply with, Section 409A of the
Internal Revenue Code of 1986, as amended, and the regulations and
other guidance issued thereunder (collectively referred to herein
as “Code Section 409A”). The Company and
Executive agree that they will execute any and all amendments to
this Agreement as they mutually agree in good faith may be
necessary to ensure compliance with the provisions of Code
Section 409A; however, the Company does not guarantee any
particular tax effect to Executive under this Agreement, and shall
not be liable to Executive for any payment made under this
Agreement at the direction or consent of Executive,
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which is determined to result in an additional
tax, penalty or interest under Code Section 409A, nor for
reporting in good faith any payment made under this Agreement as an
amount includible in gross income under Code
Section 409A. Notwithstanding anything in this Agreement
to the contrary, if a payment obligation arises on account of
Executive’s separation from service while Executive is a
“specified employee,” as described in Code
Section 409A, and as determined by the Company in accordance
with its procedures, by which determination Executive shall be
bound, any payment of “deferred compensation” as
defined under Code Section 409A, after giving effect to the
exemptions available under Code Section 409A, shall be made on
the first business day of the seventh month following the date of
Executive’s separation from service, or, if earlier, within
fifteen (15) days after the appointment of the personal
representative or executor of Executive’s estate following
the Executive’s death.
2.3.2
Separation from Service. “Termination of
employment,” “resignation,” or words of similar
import, as used in this Agreement means, for purposes of any
payments under this Agreement that are payments of deferred
compensation subject to Section 409A of the Code, the
Executive’s “separation from service” as defined
in Section 409A of the Code.
3.
Non-Solicitation and Confidentiality Agreement
The Executive hereby confirms and
acknowledges that the Executive is subject to the provisions set
forth in the Employee Non-Disclosure, Assignment, Non-Competition,
and Non-Solicitation Agreement attached hereto as
Exhibit B (the “Non-Disclosure
Agreement”). The provisions of this Agreement shall
apply where there is a conflict between this Agreement and the
Non-Disclosure Agreement.
4.
Other Provisions .
4.1
Notices . Notice under this Agreement shall be in
writing and shall be deemed given when received by the party to be
notified (a) when given in person, (b) on the first day
after delivery to Federal Express or other overnight courier,
postage prepaid and (c) upon transmission by telecopier with
confirmation by United States mail, in each case at the address for
the intended recipient as set forth below:
(i)
if to the Company, to:
Reddy Ice Corporation
8750 North Central Expressway, Suite 1800
Dallas, Texas 75231
Telecopier: (214) 528-1532
Attention: Chairman of the Board
with a copy (which shall not
constitute notice) to:
DLA Piper LLP (US)
1251 Avenue of the Americas
3
New York, New York 10020
Attention:
Roger Meltzer, Esq.
(ii)
if to the Executive, to the Executive at the address set forth on
Exhibit A attached hereto or to the telecopier number
set forth below:
Telecopier: (214)
528-1532
4.2
Entire Agreement . This Agreement (and the Exhibits
attached hereto including the Non-Disclosure Agreement) contains
the entire agreement between the parties with respect to the
specific subject matter hereof and replaces and supersedes any and
all prior employment contracts and other related agreements,
written or oral, with respect thereto, as well as any and all
entitlements which have accrued as of the date of this Agreement
that the Executive may otherwise have with or derive from the
Company. This Agreement should be read in conjunction with
any agreements providing for compensation to the Executive pursuant
to the Company’s long-term incentive plans and any
indemnification agreements between the Company and the
Executive.
4.3
Waivers and Amendments . This Agreement may be
amended, modified, superseded, canceled, renewed or extended, and
the terms and conditions hereof may be waived, only by a written
instrument signed by the parties or, in the case of a waiver, by
the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any waiver on the part of
any party of any right, power or privilege hereunder, nor any
single or partial exercise of any right, power or privilege
hereunder, preclude any other or further exercise thereof or the
exercise of any other right, power or privilege
hereunder.
4.4
Governing Law . This Agreement shall be governed by,
and construed in accordance with and subject to, the laws of the
State of Texas, without giving effect to the principles of
conflicts of law.
4.5
Arbitration . Any dispute or controversy arising out
of or in connection with this Agreement or the Executive’s
employment or the termination thereof, including, but not limited
to, any claim of discrimination under federal or state law, shall
be subject to and settled exclusively by binding arbitration in
Dallas, Texas, in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be
entered on the arbitrators’ award in any court having
jurisdiction and reasonable attorneys’ fees and shall be
awarded to the prevailing party. The arbitrators shall
determine the allocation of the costs and expenses arising in
connection with any arbitration proceeding pursuant to this
Section 4.5 based on the arbitrators’ assessment of the
merits of the positions of the parties.
4.6
Binding Effect; Benefit . This Agreement shall inure
to the benefit of and be binding upon the parties hereto and any
heirs, successors and assigns. Nothing in this Agreement,
expressed or implied, is intended to confer on any person other
than the parties hereto or such heirs, successors and assigns, any
rights, remedies, obligations or liabilities under or by reason of
this Agreement.
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4.7
Assignment . This Agreement, and the Executive’s
rights and obligations hereunder, may not be assigned by the
Executive; provided, however , that such rights and
obligations shall be enforceable by the Executive’s legal
representatives, heirs and other successors in interest. The
Company shall assign this Agreement and its rights, together with
its obligations, hereunder in connection with any sale, transfer or
other disposition of all or substantially all of its assets or
business, whether direct or indirect, by purchase, merger,
consolidation or otherwise.
4.8
Number and Gender . As used herein, the singular shall
include the plural and vice versa and words used in one gender
shall include all others as appropriate.
4.9
Withholding of Taxes . The Company may withhold from
any compensation or benefits payable under this Agreement all
federal, state, city and other taxes as shall be required pursuant
to any law or governmental regulation or ruling.
4.10
Definitions . For purposes of this
Agreement:
(i)
“ Base Salary” shall mean means
Executive’s annual base salary, which is
[ ] as of the date
of this Agreement, as such amount may be changed and in effect from
time to time. Notwithstanding the foregoing, Base Salary
shall be determined without regard to any change that would
constitute Good Reason.
(ii)
“ Disabled ” or “ Disability
” shall mean, with respect to the Executive, (a) the
occurrence of a period of 90 consecutive days or 180 out of 360
consecutive days during which the Executive is unable to perform
the Executive’s duties due to a mental or physical impairment
or (b) a determination of disability due to mental or physical
impairment by an agreed upon medical practitioner selected by the
Company and the Executive, that it is reasonably likely that an
impairment exists with respect to the Executive which will, with
the passage of time, satisfy clause (a). If the Company and the
Executive are unable to agree upon a medical practitioner, each
shall select a medical practitioner and such practitioners shall
jointly select another medica
