Exhibit 10.3


 


	
  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 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:

  	
   

  



 

















 


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 


 


2

















 


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)                                    “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.


 


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


 


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


 


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


 


(j)                                     “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 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: