Exhibit 10.2

 

REDDY ICE HOLDINGS, INC.

 

NON-QUALIFIED STOCK OPTION NOTICE

Grant No.: [     ]

 

This Notice evidences the award of non-qualified stock options (each, an
“Option” or collectively, the “Options”) that have been granted to you,
[               ], subject to and conditioned upon your agreement to the terms
of the attached Non-Qualified Stock Option Agreement (the “Agreement”).  The
Options entitle you to purchase shares of common stock, par value $0.01 per
share (“Common Stock”), of Reddy Ice Holdings, Inc., a Delaware corporation (the
“Company”), under the Reddy Ice Holdings, Inc. 2005 Long Term Incentive and
Share Award Plan, as amended (the “Plan”).  The number of shares you may
purchase and the exercise price at which you may purchase them are specified
below.  This Notice constitutes part of and is subject to the terms and
provisions of the Agreement and the Plan, which are incorporated by reference
herein.  You must return an executed copy of this Notice to the Company within
30 days of the date hereof.  If you fail to do so, the Options will be null and
void.

 

Grant Date: April 14, 2009

No. of Shares: [              ]

 

 

Expiration Date: The Options expire at 5:00 P.M. Eastern Time on the last
business day coincident with or prior to the 7th anniversary of the Grant Date
(the “Expiration Date”), unless fully exercised or terminated earlier.

 

Exercisability Schedule:  Subject to the terms and conditions described in the
Agreement, the Options shall be exercisable as follows:

 

(1)                                  One-third of the Options become exercisable
on January 1, 2010 (“First Exercisability Date”);

(2)                                  One-third of the Options become exercisable
on January 1, 2011 (“Second Exercisability Date”);

(3)                                  One-third of the Options become exercisable
on January 1, 2012 (“Third Exercisability Date”) (each an “Exercisability
Date”).

 

On each exercisability date, an equal number of Options from each pricing
tranche will become exercisable.

 

Acceleration Event: If, before all Options have become exercisable, your Service
with the Company terminates as a result of your Disability or your termination
by the Company without Cause, then, as of such termination, you shall be deemed
to have continued Service for an additional [  ] months for purposes of
exercisability under Section 2(a) of the Agreement and any Options which would
have become exercisable within such period shall become immediately
exercisable.  The exercise price of such Options shall be equal to the exercise
price at the next succeeding Exercisability Date.

 

Acceleration Event Upon Death:  If, before all Options become exercisable, your
Service with the Company terminates as a result of your death, then as of such
termination a number of Options will become exercisable equal to (i) the total
number of Options that would become exercisable upon the next Exercisability
Date multiplied by (ii) a fraction, the numerator of which is the total number
of days measured from the last Exercisability Date to the date that your Service
terminates and the denominator of which is 365.  The exercise price of such
Options shall be equal to the exercise price at the next succeeding
Exercisability Date.

 

The extent to which the Options are exercisable as of a particular date is
rounded down to the nearest whole share.  However, exercisability is rounded up
to 100% on January 1, 2012.

 

Exercise Price: The Options have been granted in three pricing tranches, each
with a different Exercise Price, as set forth below:

 

(1) One-third of the Options have an Exercise Price equal to 100% of the Fair
Market Value per share of the Common Stock on the Grant Date (i.e. $1.53);

(2) One-third of the Options have an Exercise Price equal to 150% of the Fair
Market Value per share of the Common Stock on the Grant Date (i.e. $2.30);

(3) One-third of the Options have an Exercise Price equal to 200% of the Fair
Market Value per share of the Common Stock on the Grant Date (i.e. $3.06).

 

 

REDDY ICE HOLDINGS, INC.

 

 

 

By:

 

 

Date:

 

 

I acknowledge that I have carefully read the attached Agreement and the
prospectus for the Plan and agree to be bound by all of the provisions set forth
in these documents.

 

Enclosures:

Non-Qualified Stock Option Agreement,
Prospectus for the Reddy Ice Holdings, Inc. 2005

OPTIONEE

 

Long Term Incentive and
Share Award Plan

 

 

Exercise Form

Date:

 

 

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Grant No.: [     ]

 

NON-QUALIFIED STOCK OPTION AGREEMENT
UNDER THE REDDY ICE HOLDINGS, INC.
2005 LONG TERM INCENTIVE AND SHARE AWARD PLAN

 

1.                                       Terminology.  Unless otherwise provided
in this Agreement, capitalized words used herein are defined in the correlating
Stock Option Notice, the Glossary at the end of the Agreement, or the Plan.

 

2.                                       Exercise of Options.

 

(a)                                  Exercisability.  The Options will become
exercisable in accordance with the Exercisability Schedule set forth in the
Stock Option Notice, so long as you are in the Service of the Company from the
Grant Date through the applicable exercisability dates.  None of the Options
will become exercisable after your Service with the Company ceases, unless the
Stock Option Notice provides otherwise with respect to exercisability that
arises as a result of your cessation of Service.

 

(b)                                 Right to Exercise.  You may exercise the
Options, to the extent exercisable, at any time on or before 5:00 P.M. Eastern
Time on the Expiration Date or the earlier termination of the Options, unless
otherwise provided under applicable law.  Notwithstanding the foregoing, if at
any time the Committee determines that the delivery of Shares under the Plan or
this Agreement is or may be unlawful under the laws of any applicable
jurisdiction, or federal, state or non-U.S. securities laws, the right to
exercise the Options or receive Shares pursuant to the Options shall be
suspended until the Committee determines that such delivery is lawful. 
Section 3 below describes certain limitations on exercise of the Options that
apply in the event of your death or termination of Service.  The Options may be
exercised only in multiples of whole Shares and may not be exercised at any one
time as to fewer than one hundred Shares (or such lesser number of Shares as to
which the Options are then exercisable).  No fractional Shares will be issued
under the Options.

 

(c)                                  Exercise Procedure.  In order to exercise
the Options, you must provide the following items to the Secretary of the
Company or his or her delegate before the expiration or termination of the
Options:

 

(i)                                     notice, in such manner and form as the
Committee may require from time to time, specifying the number of Shares to be
purchased under the Options; and

 

(ii)                                  full payment of the Exercise Price for the
Shares or properly executed, irrevocable instructions, in such manner and form
as the Committee may require from time to time, to effectuate a broker-assisted
cashless exercise, each in accordance with Section 2(d) of this Agreement.

 

An exercise will not be effective until the Secretary of the Company or his or
her delegate receives all of the foregoing items, and such exercise otherwise is
permitted under and complies with all applicable federal, state and non-U.S.
securities laws.

 

(d)                                 Method of Payment.  You may pay the Exercise
Price by:

 

(i)                                     delivery of cash, certified or cashier’s
check, money order or other cash equivalent acceptable to the Committee in its
discretion;

 

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(ii)                                  a broker-assisted cashless exercise in
accordance with Regulation T of the Board of Governors of the Federal Reserve
System through a brokerage firm approved by the Committee;

 

(iii)                               subject to such limits as the Committee may
impose from time to time, tender (via actual delivery or attestation) to the
Company of other shares of Common Stock of the Company which have a Fair Market
Value on the date of tender equal to the Exercise Price;

 

(iv)                              subject to such limits as the Committee may
impose from time to time, net settlement;

 

(v)                                 any other method approved by the Committee;
or

 

(vi)                              any combination of the foregoing.

 

(e)                                  Issuance of Shares upon Exercise.  The
Company shall issue to you the Shares underlying the Options you exercise as
soon as practicable after the exercise date, subject to the Company’s receipt of
the aggregate exercise price and the requisite withholding taxes, if any.  Upon
issuance of such Shares, the Company may deliver, subject to the provisions of
Section 7 below, such Shares on your behalf electronically to the Company’s
designated stock plan administrator or such other broker-dealer as the Company
may choose at its sole discretion, within reason, or may retain such Shares in
uncertificated book-entry form.  Any share certificates delivered will, unless
the Shares are registered or an exemption from registration is available under
applicable federal and state law, bear a legend restricting transferability of
such Shares.

 

3.                                       Termination of Service.

 

(a)                                  Termination of Unexercisable Options.  If
your Service with the Company ceases for any reason, the Options that are then
unexercisable, after giving effect to any exercise acceleration provisions set
forth on the Stock Option Notice, will terminate immediately upon such
cessation.

 

(b)                                 Exercise Period Following Termination of
Service.  If your Service with the Company ceases for any reason other than
discharge for Cause, the Options that are then exercisable, after giving effect
to any exercise acceleration provisions set forth on the Stock Option Notice,
will terminate upon the earliest of:

 

(i)                                     the expiration of 12 months following
such cessation; or

 

(ii)                                  the Expiration Date.

 

In the event of your death, the exercisable Options may be exercised by your
executor, personal representative, or the person(s) to whom the Options are
transferred by will or the laws of descent and distribution.

 

(c)                                  Misconduct.  If your Service with the
Company terminates for Cause, the Options that are then exercisable (without
giving any effect to any exercise acceleration provisions set forth on the Stock
Option Notice), will terminate upon the earliest of:

 

(i)                                     the expiration of 30 days after your
termination; or

 

(ii)                                  the Expiration Date.

 

(d)                                 Change in Status.  In the event that your
Service is with a business, trade or entity that, after the Grant Date, ceases
for any reason to be part or an Affiliate of the Company, your Service will be
deemed to have terminated for purposes of this Section 3 upon

 

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such cessation if your Service does not continue uninterrupted immediately
thereafter with the Company or an Affiliate of the Company.

 

5.                                       Nontransferability of Options.  These
Options and, before exercise, the underlying Shares are nontransferable
otherwise than by will or the laws of descent and distribution and, during your
lifetime, the Options may be exercised only by you or, during the period you are
under a legal disability, by your guardian or legal representative.  Except as
provided above, the Options and, before exercise, the underlying Shares may not
be assigned, transferred, pledged, hypothecated, subjected to any “put
equivalent position,” “call equivalent position” (as each preceding term is
defined by Rule 16(a)-1 under the Securities Exchange Act of 1934), or short
position, or disposed of in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment or similar process.

 

6.                                       Nonqualified Nature of the Options. 
The Options are not intended to qualify as incentive stock options within the
meaning of Code section 422, and this Agreement shall be so construed.  You
hereby acknowledge that, upon exercise of the Options, you will recognize
compensation income in an amount equal to the excess of the then Fair Market
Value of the Shares over the Exercise Price and must comply with the provisions
of Section 7 of this Agreement with respect to any tax withholding obligations
that arise as a result of such exercise.

 

7.                                       Withholding of Taxes.  At the time the
Options are exercised, in whole or in part, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll or any
other payment of any kind due to you and otherwise agree to make adequate
provision for non-U.S., federal, state and local taxes required by law to be
withheld, if any, which arise in connection with the Options.  The Company may
require you to make a cash payment to cover any withholding tax obligation as a
condition of exercise of the Options or issuance of share certificates
representing Shares.

 

The Committee may, in its sole discretion, permit you to satisfy, in whole or in
part, any withholding tax obligation which may arise in connection with the
Options either by electing to have the Company withhold from the Shares to be
issued upon exercise that number of Shares, or by electing to deliver to the
Company already-owned shares, in either case having a Fair Market Value not in
excess of the amount necessary to satisfy the statutory minimum withholding
amount due.

 

8.                                       Adjustments.  The Committee may make
various adjustments to your Options, including adjustments to the number and
type of securities subject to the Options and the Exercise Price, in accordance
with the terms of the Plan.  In the event of any transaction resulting in a
Change in Control (as defined in the Plan) of the Company, the outstanding
Options will terminate upon the effective time of such Change in Control unless
provision is made in connection with the transaction for the continuation or
assumption of such Options by, or for the substitution of the equivalent awards
of, the surviving or successor entity or a parent thereof.  In the event of such
termination, you will be permitted, immediately before the Change in Control, to
exercise or convert all portions of such Options that are then exercisable or
which become exercisable upon or prior to the effective time of the Change in
Control.

 

9.                                       Non-Guarantee of Employment or Service
Relationship.  Nothing in the Plan or this Agreement will alter your at-will or
other employment status or other service relationship with the Company, nor be
construed as a contract of employment or service relationship between you and
the Company, or as a contractual right for you to continue in the employ of, or
in a service relationship with, the Company for any period of time, or as a
limitation of the right of the Company to discharge you at any time with or
without Cause or notice and whether or not such discharge results in the failure
of any of the Options to become exercisable or any other adverse effect on your
interests under the Plan.

 

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10.                                 No Rights as a Stockholder.  You shall not
have any of the rights of a stockholder with respect to the Shares until such
Shares have been issued to you upon the due exercise of the Options.  No
adjustment will be made for dividends or distributions or other rights for which
the record date is prior to the date such Shares are issued.

 

11.                                 The Company’s Rights.  The existence of the
Options shall not affect in any way the right or power of the Company or its
stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company’s capital structure or its
business, or any merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or other stocks with preference ahead of or convertible
into, or otherwise affecting the Common Stock or the rights thereof, or the
dissolution or liquidation of the Company, or any sale or transfer of all or any
part of the Company’s assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise.

 

12.                                 Entire Agreement.  This Agreement, together
with the correlating Stock Option Notice and the Plan, contain the entire
agreement between you and the Company with respect to the Options.  Any oral or
written agreements, representations, warranties, written inducements, or other
communications made prior to the execution of this Agreement with respect to the
Options shall be void and ineffective for all purposes.

 

13.                                 Amendment.  This Agreement may be amended
from time to time by the Committee in its discretion; provided, however, that
this Agreement may not be modified in a manner that would have a materially
adverse effect on the Options or Shares as determined in the discretion of the
Committee, except as provided in the Plan or in a written document signed by you
and the Company.

 

14.                                 Conformity with Plan.  This Agreement is
intended to conform in all respects with, and is subject to all applicable
provisions of, the Plan.  Any conflict between the terms of this Agreement and
the Plan shall be resolved in accordance with the terms of the Plan.  In the
event of any ambiguity in this Agreement or any matters as to which this
Agreement is silent, the Plan shall govern.  A copy of the Plan is available
upon request to the Secretary of the Company.

 

15.                                 Section 409A.  This Agreement and the
Options granted hereunder are intended to comply with, or otherwise be exempt
from, Section 409A of the Code.  Nothing in the Plan or this Agreement shall be
construed as including any feature for the deferral of compensation other than
the deferral of recognition of income until the exercise of the Options.  Should
any provision of the Plan or this Agreement be found not to comply with, or
otherwise be exempt from, the provisions of Section 409A of the Code, it may be
modified and given effect, in the sole discretion of the Committee and without
requiring your consent, in such manner as the Committee determines to be
necessary or appropriate to comply with, or to effectuate an exemption from,
Section 409A of the Code.  The foregoing, however, shall not be construed as a
guarantee by the Company of any particular tax effect to you.

 

16.                                 Electronic Delivery of Documents.  By your
signing this Agreement, you (i) consent to the electronic delivery of this
Agreement, all information with respect to the Plan and the Shares and any
reports of the Company provided generally to the Company’s stockholders;
(ii) acknowledge that you may receive from the Company a paper copy of any
documents delivered electronically at no cost to you by contacting the Company
by telephone or in writing; (iii) further acknowledge that you may revoke your
consent to the electronic delivery of documents at any time by notifying the
Company of such revoked consent by telephone, postal service or electronic mail;
and (iv) further acknowledge that you understand that you are not required to
consent to electronic delivery of documents.

 

{Glossary begins on next page}

 

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GLOSSARY

 

(a)                                  “Affiliate” means any entity, whether now
or hereafter existing, which controls, is controlled by, or is under common
control with, Reddy Ice Holdings, Inc.  For this purpose, “control” means
ownership of 50% or more of the total combined voting power or value of all
classes of stock or interests of the entity.

 

(b)                                 “Cause” shall mean the circumstances set
forth in an applicable severance or employment agreement (the “Severance
Agreement”) or, in the absence of such an agreement, if you (i) are convicted
of, or plead guilty to, a felony or a crime involving moral turpitude,
(ii) engage in independently verified, continuing and unremedied substance abuse
involving drugs or alcohol, (iii) perform an action or fail 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
you in the performance of your duties to the Company, or make a knowing or
reckless misrepresentation (including by omission of any material adverse
information) to shareholders, directors or officers of Reddy Ice Holdings, Inc.,
(iv) willfully and repeatedly fail, after 10 business days’ notice, to
materially follow the written policies of the Company or instructions of the
Board or (v) materially breach any agreement to which you and the Company or any
of its Affiliates are a party, or materially breach any written policy, rule or
regulation adopted by the Company or any of its Affiliates relating to
compliance with securities laws or other laws, rules or regulations and such
breach is not cured by you or waived in writing by the Company within 30 days
after written notice of such breach to you.

 

(c)                                  “Change in Control” has the meaning
ascribed to that term under the Plan.

 

(d)                                 “Code” means the Internal Revenue Code of
1986, as amended.

 

(e)                                  “Company” includes Reddy Ice Holdings, Inc.
and its Affiliates, except where the context otherwise requires.  For purposes
of determining whether a Change in Control has occurred, Company shall mean only
Reddy Ice Holdings, Inc.

 

(f)                                    “Disability” has the meaning ascribed to
such term in the Severance Agreement.

 

(g)                                 “Fair Market Value” of a share of Common
Stock generally means either the closing price or the average of the high and
low sale price per share of Common Stock on the relevant date, as determined in
the Committee’s discretion, as reported by the principal market or exchange upon
which the Common Stock is listed or admitted for trade.  Refer to the Plan for a
detailed definition of Fair Market Value, including how Fair Market Value is
determined in the event that no sale of Common Stock is reported on the relevant
date.

 

(h)                                 “Service” means your employment or other
service relationship with the Company.

 

(i)                                     “Shares” mean the shares of Common Stock
underlying the Options.

 

(j)                                     “Stock Option Notice” means the written
notice evidencing the award of the Options that correlates with and makes up a
part of this Agreement.

 

(k)                                  “You”; “Your”.  “You” or “your” means the
recipient of the award of Options as reflected on the Stock Option Notice. 
Whenever the Agreement refers to “you” under circumstances where the provision
should logically be construed, as determined by the Committee, to apply to your
estate, personal representative, or beneficiary to whom the Options

 

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may be transferred by will or by the laws of descent and distribution, the word
“you” shall be deemed to include such person.

 

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EXERCISE FORM

 

Office of the Corporate Secretary

Reddy Ice Holdings, Inc.

8750 North Central Expressway Suite 1800

Dallas TX, 75231

 

RE:                              2005 Long Term Incentive and Share Award Plan

 

Gentlemen:

 

I hereby exercise the Options granted to me on April 14, 2009 by Reddy Ice
Holdings, Inc. (the “Company”), subject to all the terms and provisions of the
applicable grant agreement and of the Reddy Ice Holdings, Inc. 2005 Long Term
Incentive and Share Award Plan (the “Plan”), and notify you of my desire to
purchase                          shares of Common Stock of the Company at a
price of $           per share,                          shares of Common Stock
of the Company at a price of $           per share, and                         
shares of Common Stock of the Company at a price of $           per share,
pursuant to the exercise of said Options.

 

Total Amount Enclosed:  $            

 

 

Date:

 

 

 

 

 

(Optionee)

 

 

 

 

 

 

 

 

Received by REDDY ICE HOLDINGS, INC. on

 

 

 

, 

 

 

 

 

 

 

 

 

By:

 

 

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