Exhibit
10.1


FORM OF
EMPLOYMENT AGREEMENT


THIS EMPLOYMENT AGREEMENT
(this “Agreement”) is entered into as of March        ,
2007, between Mac-Gray Corporation,
a Delaware corporation with
principal offices located at 404 Wyman Street, Waltham, MA, and                            (the
“Executive”).


WHEREAS, the parties desire
to enter into this Agreement setting forth the terms and conditions for the
employment relationship of the Executive with Mac-Gray Corporation or a wholly
owned subsidiary of Mac-Gray Corporation (the “Company”).


NOW, THEREFORE, it is AGREED as follows:


1.             Employment.  The Executive is hereby employed as [                                            ]
of the Company, for a period commencing on the date hereof, and continuing subject to the termination
provisions herein.   As [             ] of the Company, the Executive
shall render executive, policy, and other management services to the Company of
the type customarily performed by persons serving in such capacities.


2.             Location of
Services.  During the term of this
agreement, the Executive shall perform services at the Company’s various
offices, but shall be principally located at the Offices of the Company
currently located in Waltham, MA.


3.             Salary.  The Company shall pay the Executive an annual
salary equal to         [$                 ],
with such increases as may be determined by the Company in its discretion (“Base
Salary”). The Base Salary of the Executive shall not be decreased at any time
during the term of this Agreement from the amount then in effect, unless the
Executive otherwise agrees in writing. The Base Salary shall be payable to the
Executive not less frequently than monthly.


4.             Bonuses.  The Executive shall be eligible to earn an
annual cash bonus pursuant to the terms of the Company’s Senior Executive
Incentive Plan, as modified from time to time (the “Cash Plan”).  As of the date hereof, the Cash Plan provides
that the Executive is eligible to earn an annual cash bonus under the Cash Plan
equal to [        ]% of his Base Salary.


5.             Participation in Employee
Benefit Plans.  In addition to
the benefits noted below, the Executive shall be entitled to participate, on
the same basis as other executive employees of the Company, in any stock
option, stock purchase, pension, thrift, profit-sharing, group life insurance,
medical coverage, education, or other retirement or employee pension or welfare
plan or benefits that











the Company has
adopted or may adopt for the benefit of its employees.  The Executive shall be entitled to participate
in any fringe benefits, which are now or may be or become applicable to the
Company’s executive employees generally.


6.             Reimbursement of
Business Expenses.  The Company shall
reimburse the Executive for all reasonable expenses incurred by him in performing
services during the Executive’s employment, in accordance with the Company’s
policies and procedures for its senior executive officers, as in effect from
time to time.


7.             Standards.  The Executive shall perform the Executive’s
duties and responsibilities under this Agreement in accordance with such
reasonable standards as may be established from time to time by the Company or
its Chief Executive Officer.  The
reasonableness of such standards shall be measured against standards for
executive performance generally prevailing in the Company’s industry.


8.             Voluntary Absences; Vacations.  The Executive shall be entitled to annual
paid vacation in accordance with the vacation pay schedule applicable to the
Executive.  This paid vacation shall be
subject to the Company’s policies concerning paid vacation.  The Executive, with the approval of the CEO,
shall schedule the timing of paid vacations in a reasonable manner.


9.             Disability.  If the Executive shall be disabled so as to
be unable to perform the essential functions of the Executive’s then existing
position or positions under this Agreement with or without reasonable
accommodation, the Chief Executive Officer may remove the Executive from any
responsibilities and/or reassign the Executive to another position with the
Company during the period of such disability. 
Notwithstanding any such removal or reassignment, the Executive shall
continue to receive the Executive’s full Salary (less any disability pay or
sick pay benefits to which the Executive may be entitled under the Company’s
policies) and benefits under Section 5 of this Agreement (except to the extent
that the Executive may be ineligible for one or more such benefits under
applicable plan terms) for up to eighteen (18) months, and the Executive’s employment
may be terminated by the Company at any time thereafter.  If any question shall arise as to whether
during any period the Executive is disabled so as to be unable to perform the
essential functions of the Executive’s then existing position or positions with
or without reasonable accommodation, the Executive may, and at the request of
the Company shall, submit to the Company a certification in reasonable detail
by a physician selected by the Company to whom the Executive or the Executive’s
guardian has no reasonable objection as to whether the Executive is so disabled
or how long such disability is expected to continue, and such certification
shall for the purposes of this Agreement be conclusive of the issue.  The Executive shall cooperate with any reasonable
request of the physician in connection with such



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certification.  If such question shall arise and the
Executive shall fail to submit such certification, the Company’s determination
of such issue shall be binding on the Executive.  Nothing in this Section 9 shall be construed
to waive the Executive’s rights, if any, under existing law including, without
limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. §2601 et seq. and the Americans with
Disabilities Act, 42 U.S.C. §12101 et seq.


10.           Termination of Employment.


(a)           At-Will Employment.  The 
CEO or the Board of Directors may terminate the Executive’s employment
at-will, meaning that the Company or the Executive may terminate the Executive’s
employment at any time, with or without cause or notice, subject to payment of
the compensation described below.


(b)           Termination by the
Company for Cause.  The Executive’s
employment under this Agreement may be terminated for Cause without further
liability on the part of the Company effective immediately.  Only the following shall constitute “Cause”
for such termination:


(i)         fraud
or material misappropriation with respect to the business or assets of the
Company;


(ii)        conduct
that constitutes disloyalty to the Company and which materially harms the Company
or conduct that constitutes breach of fiduciary duty involving personal profit;


(iii)       gross negligence, willful misconduct or
insubordination of the Executive with respect to the Company or any affiliate
of the Company;


(iv)       conviction
of a felony or misdemeanor involving moral turpitude or fraud;


(v)        the
use of drugs or alcohol which interferes materially with the Executive’s
performance of his duties; or


(vi)       material
breach by the Executive of any of the Executive’s obligations under this
Agreement.


(c)           Termination by the
Executive for Good Reason.  The
Executive’s employment under this Agreement may be terminated by the Executive “for
Good Reason” by written notice to the Chief Executive Officer at least thirty
(30) days prior to such termination. 
Only the following shall constitute “Good Reason” for such termination:



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(i)         a
reduction of the Executive’s salary other than a reduction that (A) is based on
the Company’s financial performance and (B) is similar to the reduction made to
the salaries provided to all or most other senior executives of the Company;


(ii)        a
significant change in the Executive’s responsibilities and/or duties which
constitutes a demotion;


(iii)       the relocation of the offices at which the
Executive is principally employed to a location more than 50 miles from such
offices, which relocation is not approved by the Executive; or


(iv)       the
Company’s failure to pay compensation specified in this Agreement, which, after
thirty (30) days notice, is not cured by the Company.


(d)           Termination by the
Company Without Cause.  Subject to
the payment of the Severance Amount pursuant to Section 11(b), the Executive’s
employment under this Agreement may be terminated by the Company without cause
upon written notice to the Executive.


(e)           Death.  The Executive’s employment with the Company
shall terminate effective immediately upon the Executive’s death.


11.           Compensation
Upon Termination.


(a)           Termination Generally.  If
the Executive’s employment with the Company is terminated for any reason, the
Company shall pay or provide to the Executive (or to his authorized
representative or estate) any earned but unpaid base salary, incentive
compensation earned but not yet paid, unpaid expense reimbursements, accrued
but unused vacation and any vested benefits the Executive may have under any
employee benefit plan of the Company (the “Accrued Benefit”).


(b)           Termination by the
Company Without Cause or by the Executive for Good Reason.  In
the event of termination of the Executive’s employment with the Company pursuant
to Section 10(c) or 10(d) above and subject to the Executive’s agreement to a
release of any and all legal claims in a form satisfactory to the Company, the
Executive shall continue to receive (1) for eighteen (18) months commencing on
the date of such termination (the “Severance Period”), full Base Salary, (2) a
one time lump sum payment in an amount equal to the Executive’s average annual
bonus over the three (3) fiscal years immediately prior to termination (or the
Executive’s annual bonus for the last fiscal year immediately



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prior to
termination, if higher) payable by March 15 of the year following termination,
(3) all other benefits and compensation that the Executive would have been
entitled to under this Agreement in the absence of termination of employment
during the Severance Period (except to the extent that the Executive may be
ineligible for one or more such benefits under applicable plan terms or law),
and, (4) if the Executive elects to continue group health plan benefits to the
extent authorized by and consistent with 29 U.S.C. § 1161 et seq.
(commonly known as “COBRA”), payment by the Company of the full COBRA premium
during the Severance Period so long as the Executive remains eligible for COBRA
coverage (collectively, the “Severance Amount”).


(c)           Termination by the
Company With Cause or by the Executive Without Good Reason.  The Executive shall have no right to receive
compensation or other benefits from the Company for any period after
termination for cause by the Company or termination by the Executive other than
termination with Good Reason, except for any vested retirement benefits to
which the Executive may be entitled under any qualified employee pension plan
maintained by the Company and any deferred compensation to which the Executive
may be entitled.


(d)           Termination
Associated with a Change of Control. 
The Executive acknowledges that an Executive Severance Agreement was
executed between the parties dated February 14, 2002 (the “Executive Severance
Agreement”).  Upon any termination of the
Executive by the Company without cause or by the Executive with Good Reason
under this Agreement, which simultaneously triggers Severance Payments under
the Executive Severance Agreement, the Executive shall receive the Severance
Payments specified under the Executive Severance Agreement, and shall not
receive the Severance Amount under this Agreement.  Under no circumstance shall the Executive
receive both the Severance Amount under this Agreement and Severance Payments
under the Executive Severance Agreement.


12.           Restrictive Covenants.


(a)           During the employment
of the Executive under this Agreement and for a period of eighteen (18) months
after termination of such employment for any reason, the Executive shall not at
any time (i) compete on his own behalf, or on behalf of any other person or
entity, with the Company or any of its affiliates within all territories in
which the Company does business with respect to the business of the Company or
any of its affiliates as such business shall be conducted on the date hereof or
during the employment of the Executive under this Agreement; (ii) solicit or induce,
on his own behalf or on behalf of any other person or entity, any employee of
the Company or any of its affiliates to leave the employ of the Company or any
of its affiliates; or (iii) solicit or induce, on his own behalf or on



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behalf of any
other person or entity, any customer of the Company or any of its affiliates to
reduce its business with the Company or any of its affiliates.


(b)           The Executive shall not
at any time during or subsequent to his employment by the Company, on his own
behalf or on behalf of any other person or entity, disclose any proprietary
information of the Company or any of its affiliates to any other person or
entity other than on behalf of the Company or in conducting its business, and
the Executive shall not use any such proprietary information for his own
personal advantage or make such proprietary information available to others for
use, unless such information shall have come into the public domain other than
through unauthorized disclosure.


(c)           The ownership by the
Executive of not more than 5% of a corporation, partnership or other enterprise
shall not constitute a violation hereof.


(d)           If any portion of this
Section 12 is found by a court of competent jurisdiction to be invalid or
unenforceable, but would be valid and enforceable if modified, this
Section 12 shall apply with such modifications necessary to make this
Section 12 valid and enforceable. 
Any portion of this Section 12 not required to be so modified shall
remain in full force and effect and not be affected thereby.  The Executive agrees that the Company shall
have the right of specific performance in the event of a breach by the
Executive of this Section 12.


13.           Integration.  This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements between the parties, except the Executive
Severance Agreement, which is hereby incorporated into this Agreement in its
entirety, with respect to any related subject matter.


14.           Assignments.  No party may assign or delegate any rights or
obligations hereunder without first obtaining the written consent of the other
party hereto; provided that the Executive agrees that the Company shall assign
its rights under this Agreement without the consent of the Executive in the
event that the Company shall effect a reorganization, consolidation with or
merge into any other corporation, partnership, organization or other entity, or
transfer all or substantially all of its properties or assets to any other
corporation, partnership, organization or other entity.  This Agreement shall be binding on any
successor corporation, partnership, organization or other entity.


15.           Extent of Service.  The Executive shall not, during the term of
this Agreement, have any other paid employment other than with a subsidiary of
the Company, except with the prior approval of the Board of Directors; provided



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that nothing in
this Agreement shall be construed as preventing the Executive from:


(a)        investing
the Executive’s assets in any company or other entity in such form or manner as
shall not require any material activities on the Executive’s part in connection
with the operations or affairs of the companies or other entities in which such
investments are made; or


(b)        
engaging in religious, charitable or other community or non-profit activities
that do not impair the Executive’s ability to fulfill the Executive’s duties
and responsibilities under this Agreement.


16.           Amendments or Additions.  No amendments or additions to this Agreement
shall be binding unless in writing and signed by all parties hereto.


17.           Waiver.  No waiver of any provision hereof shall be
effective unless made in writing and signed by the waiving party.  The failure of any party to require the
performance of any term or obligation of this Agreement, or the waiver by any
party of any breach of this Agreement, shall not prevent any subsequent
enforcement of such term or obligation or be deemed a waiver of any subsequent
breach.


18.           Section Headings.  The section headings used in this Agreement
are included solely for convenience and shall not affect, or be used in
connection with, the interpretation of this Agreement.


19.           Severability.  The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.


20.           Governing Law.  This Agreement shall be governed by the laws
of the Commonwealth of Massachusetts (other than the choice of law rules
thereof).


IN WITNESS WHEREOF, this Agreement has
been executed as a sealed instrument by the Company, by its duly authorized
officer, and by the Executive.


	
  

  	
  Mac-Gray Corporation

  
	
   

  	
   

  
	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Executive

  
	
   

  	
   

  
	
   

  	
   

  



 



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