Exhibit 10.5

 

FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT
FOR NON-EMPLOYEE DIRECTORS

 

UNDER THE MAC-GRAY CORPORATION
2005 STOCK OPTION AND INCENTIVE PLAN

 

Name of Optionee:    
                                                                       

No. of Option Shares:    
                                                                  

Option Exercise Price per Share:     
                                                          

Grant Date:                 
                                                                       

Expiration Date:              
                                                                  

 

Pursuant to the Mac-Gray Corporation 2005 Stock Option and Incentive Plan (the
“Plan”) as amended through the date hereof, Mac-Gray Corporation (the “Company”)
hereby grants to the Optionee named above, who is a Director of the Company but
is not an employee of the Company, an option (the “Stock Option”) to purchase on
or prior to the Expiration Date specified above all or part of the number of
shares of Common Stock, par value $0.01 per share (the “Stock”) of the Company
specified above at the Option Exercise Price per Share specified above subject
to the terms and conditions set forth herein and in the Plan.

 

1.             EXERCISABILITY SCHEDULE.  NO PORTION OF THIS STOCK OPTION MAY BE
EXERCISED UNTIL SUCH PORTION SHALL HAVE BECOME EXERCISABLE.  EXCEPT AS SET FORTH
BELOW, AND SUBJECT TO THE DISCRETION OF THE ADMINISTRATOR (AS DEFINED IN
SECTION 2 OF THE PLAN) TO ACCELERATE THE EXERCISABILITY SCHEDULE HEREUNDER, THIS
STOCK OPTION SHALL BE EXERCISABLE WITH RESPECT TO THE FOLLOWING NUMBER OF OPTION
SHARES ON THE DATES INDICATED:

 

Number of
Option Shares Exercisable

 

Exercisability Date

 

 

 

 

 

 

 

(      

)%

 

 

 

 

 

 

 

 

 

 

(      

)%

 

 

 

 

 

 

 

 

 

 

(      

)%

 

 

 

 

 

 

 

 

 

 

(      

)%

 

 

 

 

 

 

 

 

(      

)%

 

 

 

 

In the event of the termination of the Optionee’s service as a Director of the
Company because of death, this Stock Option shall become immediately exercisable
in full, whether or not exercisable at such time.  Once exercisable, this Stock
Option shall continue to be exercisable at any time or times prior to the close
of business on the Expiration Date, subject to the provisions hereof and of the
Plan.

 

 

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2.             MANNER OF EXERCISE.

 

(A)           THE OPTIONEE MAY EXERCISE THIS STOCK OPTION ONLY IN THE FOLLOWING
MANNER:  FROM TIME TO TIME ON OR PRIOR TO THE EXPIRATION DATE OF THIS STOCK
OPTION, THE OPTIONEE MAY GIVE WRITTEN NOTICE TO THE ADMINISTRATOR OF HIS OR HER
ELECTION TO PURCHASE SOME OR ALL OF THE OPTION SHARES PURCHASABLE AT THE TIME OF
SUCH NOTICE.  THIS NOTICE SHALL SPECIFY THE NUMBER OF OPTION SHARES TO BE
PURCHASED.

 

Payment of the purchase price for the Option Shares may be made by one or more
of the following methods:  (i) in cash, by certified or bank check or other
instrument acceptable to the Administrator; (ii) through the delivery (or
attestation to the ownership) of shares of Stock that have been purchased by the
Optionee on the open market or that have been beneficially owned by the Optionee
and are not then subject to restrictions under any Company plan; (iii) by the
Optionee delivering to the Company a properly executed exercise notice together
with irrevocable instructions to a broker to promptly deliver to the Company
cash or a check payable and acceptable to the Company to pay the option purchase
price, provided that in the event the Optionee chooses to pay the option
purchase price as so provided, the Optionee and the broker shall comply with
such procedures and enter into such agreements of indemnity and other agreements
as the Administrator shall prescribe as a condition of such payment procedure;
or (iv) a combination of (i), (ii) and (iii) above.  Payment instruments will be
received subject to collection.

 

The making of a book entry in the Optionee’s name by the Company’s transfer
agent representing the Option Shares will be contingent upon the Company’s
receipt from the Optionee of full payment for the Option Shares, as set forth
above and any agreement, statement or other evidence that the Company may
require to satisfy itself that the issuance of Stock to be purchased pursuant to
the exercise of Stock Options under the Plan and any subsequent resale of the
shares of Stock will be in compliance with applicable laws and regulations.  In
the event the Optionee chooses to pay the purchase price by previously-owned
shares of Stock through the attestation method, the number of shares of Stock
transferred to the Optionee upon the exercise of the Stock Option shall be net
of the Shares attested to.

 

(B)           A BOOK ENTRY FOR SHARES OF STOCK PURCHASED UPON EXERCISE OF THIS
STOCK OPTION SHALL BE MADE BY THE COMPANY’S TRANSFER AGENT IN THE NAME OF THE
OPTIONEE UPON COMPLIANCE TO THE SATISFACTION OF THE ADMINISTRATOR WITH ALL
REQUIREMENTS UNDER APPLICABLE LAWS OR REGULATIONS IN CONNECTION WITH SUCH
ISSUANCE AND WITH THE REQUIREMENTS HEREOF AND OF THE PLAN.  THE DETERMINATION OF
THE ADMINISTRATOR AS TO SUCH COMPLIANCE SHALL BE FINAL AND BINDING ON THE
OPTIONEE.  THE OPTIONEE SHALL NOT BE DEEMED TO BE THE HOLDER OF, OR TO HAVE ANY
OF THE RIGHTS OF A HOLDER WITH RESPECT TO, ANY SHARES OF STOCK SUBJECT TO THIS
STOCK OPTION UNLESS AND UNTIL THIS STOCK OPTION SHALL HAVE BEEN EXERCISED
PURSUANT TO THE TERMS HEREOF, THE COMPANY SHALL HAVE ISSUED THE SHARES TO THE
OPTIONEE, AND THE OPTIONEE’S NAME SHALL HAVE BEEN ENTERED AS THE STOCKHOLDER OF
RECORD ON THE BOOKS OF THE COMPANY.  THEREUPON, THE OPTIONEE SHALL HAVE FULL
VOTING, DIVIDEND AND OTHER OWNERSHIP RIGHTS WITH RESPECT TO SUCH SHARES OF
STOCK.

 

(C)           THE MINIMUM NUMBER OF SHARES WITH RESPECT TO WHICH THIS STOCK
OPTION MAY BE EXERCISED AT ANY ONE TIME SHALL BE 100 SHARES, UNLESS THE NUMBER
OF SHARES WITH RESPECT TO

 

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WHICH THIS STOCK OPTION IS BEING EXERCISED IS THE TOTAL NUMBER OF SHARES SUBJECT
TO EXERCISE UNDER THIS STOCK OPTION AT THE TIME.

 

(D)           NOTWITHSTANDING ANY OTHER PROVISION HEREOF OR OF THE PLAN, NO
PORTION OF THIS STOCK OPTION SHALL BE EXERCISABLE AFTER THE EXPIRATION DATE
HEREOF.

 

3.             TERMINATION AS DIRECTOR. IF THE OPTIONEE CEASES TO BE A DIRECTOR
OF THE COMPANY, THE PERIOD WITHIN WHICH TO EXERCISE THE STOCK OPTION MAY BE
SUBJECT TO EARLIER TERMINATION AS SET FORTH BELOW.

 

(A)           TERMINATION FOR CAUSE.  IF THE OPTIONEE CEASES TO BE A DIRECTOR
FOR CAUSE, ANY STOCK OPTION HELD BY THE OPTIONEE SHALL IMMEDIATELY TERMINATE AND
BE OF NO FURTHER FORCE AND EFFECT.  FOR PURPOSES HEREOF, “CAUSE” SHALL MEAN A
VOTE BY THE BOARD RESOLVING THAT THE OPTIONEE SHALL BE DISMISSED AS A RESULT OF
(I) ANY MATERIAL BREACH BY THE OPTIONEE OF ANY AGREEMENT BETWEEN THE OPTIONEE
AND THE COMPANY; (II) THE CONVICTION OF OR PLEA OF NOLO CONTENDERE BY THE
OPTIONEE TO A FELONY OR A CRIME INVOLVING MORAL TURPITUDE; OR (III) ANY MATERIAL
MISCONDUCT OR WILLFUL AND DELIBERATE NON-PERFORMANCE (OTHER THAN BY REASON OF
DISABILITY) BY THE OPTIONEE OF THE OPTIONEE’S DUTIES TO THE COMPANY.

 

(B)           TERMINATION BY REASON OF DEATH.  IF THE OPTIONEE CEASES TO BE A
DIRECTOR BY REASON OF DEATH, ANY STOCK OPTION HELD BY THE OPTIONEE MAY BE
EXERCISED BY HIS OR HER LEGAL REPRESENTATIVE OR LEGATEE FOR A PERIOD OF 12
MONTHS FROM THE DATE OF DEATH OR UNTIL THE EXPIRATION DATE, IF EARLIER.

 

(C)           OTHER TERMINATION.  IF THE OPTIONEE CEASES TO BE A DIRECTOR FOR
ANY REASON OTHER THAN CAUSE OR DEATH, ANY STOCK OPTION HELD BY THE OPTIONEE MAY
BE EXERCISED FOR A PERIOD OF 12 MONTHS FROM THE DATE OF TERMINATION OR UNTIL THE
EXPIRATION DATE, IF EARLIER.

 

4.             INCORPORATION OF PLAN.  NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, THIS STOCK OPTION SHALL BE SUBJECT TO AND GOVERNED BY ALL THE TERMS
AND CONDITIONS OF THE PLAN, INCLUDING THE POWERS OF THE ADMINISTRATOR SET FORTH
IN SECTION 2(B) OF THE PLAN.  CAPITALIZED TERMS IN THIS AGREEMENT SHALL HAVE THE
MEANING SPECIFIED IN THE PLAN, UNLESS A DIFFERENT MEANING IS SPECIFIED HEREIN.

 

5.             TRANSFERABILITY.  THIS AGREEMENT IS PERSONAL TO THE OPTIONEE, IS
NON-ASSIGNABLE AND IS NOT TRANSFERABLE IN ANY MANNER, BY OPERATION OF LAW OR
OTHERWISE, OTHER THAN BY WILL OR THE LAWS OF DESCENT AND DISTRIBUTION.  THIS
STOCK OPTION IS EXERCISABLE, DURING THE OPTIONEE’S LIFETIME, ONLY BY THE
OPTIONEE, AND THEREAFTER, ONLY BY THE OPTIONEE’S LEGAL REPRESENTATIVE OR
LEGATEE.

 

6.             MISCELLANEOUS.

 

(A)           NOTICE HEREUNDER SHALL BE GIVEN TO THE COMPANY AT ITS PRINCIPAL
PLACE OF BUSINESS, AND SHALL BE GIVEN TO THE OPTIONEE AT THE ADDRESS SET FORTH
BELOW, OR IN EITHER CASE AT SUCH OTHER ADDRESS AS ONE PARTY MAY SUBSEQUENTLY
FURNISH TO THE OTHER PARTY IN WRITING.

 

(B)           THIS STOCK OPTION DOES NOT CONFER UPON THE OPTIONEE ANY RIGHTS
WITH RESPECT TO CONTINUANCE AS A DIRECTOR.

 

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(C)           PURSUANT TO THE PLAN, THE COMMITTEE MAY AT ANY TIME AMEND OR
CANCEL ANY OUTSTANDING PORTION OF THIS STOCK OPTION, BUT NO SUCH ACTION MAY BE
TAKEN WHICH ADVERSELY AFFECTS THE OPTIONEE’S RIGHTS UNDER THIS AGREEMENT WITHOUT
THE OPTIONEE’S CONSENT.

 

 

MAC-GRAY CORPORATION

 

 

 

 

 

 

 

By:

 

 

 

 

 

Title:

 

 

 

The foregoing Agreement is hereby accepted and the terms and conditions thereof
hereby agreed to by the undersigned.

 

 

 

Dated:

 

 

 

 

Optionee’s Signature

 

 

 

 

 

Optionee’s name and address:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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