Exhibit 10.5


 


RESTRICTED STOCK UNIT AGREEMENT


 


UNDER THE
MAC-GRAY CORPORATION

2005 STOCK OPTION AND INCENTIVE PLAN


 


	
  Name of Grantee:

  	
   

  
	
  No. of Restricted Stock Units Granted:

  	
   

  
	
  Grant Date:

  	
   

  
	
  Final Acceptance 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 a deferred stock award consisting of the number of
Restricted Stock Units listed above (an “Award”) to the Grantee named above.  Each Restricted Stock Unit shall relate to
one share of Common Stock, par value $0.01 per share (the “Stock”) of the
Company specified above, subject to the restrictions and conditions set forth
herein and in the Plan.


 


1.             Acceptance of Award. 
The Grantee shall have no rights with respect to this Award unless he or
she shall have accepted this Award prior to the close of business on the Final
Acceptance Date specified above by signing and delivering to the Company a copy
of this Award Agreement.  Any
consideration due to the Company on the issuance of the Award has been deemed
to be satisfied by past services rendered by the Grantee to the Company.


 


2.             Restrictions on Transfer of Award.


 


(a)           The Award may not be
sold, transferred, pledged, assigned or otherwise encumbered or disposed of by
the Grantee until (i) the Restricted Stock Units have vested as provided
in Section 3 of this Agreement and (ii) shares of Stock have been
issued to the Grantee.


 


(b)           If the Grantee’s
employment with the Company and its Subsidiaries is voluntarily or
involuntarily terminated for any reason prior to the satisfaction of the
vesting conditions set forth in Section 3 below, any Restricted Shares
that have not vested as of such date shall automatically and without notice terminate,
be forfeited and be and become null and void, and neither the Grantee nor any
of his or her successors, heirs, assigns, or personal representatives will
thereafter have any further rights or interests in such unvested Restricted
Stock Units.


 


3.             Vesting of Restricted Stock Units. 
The restrictions and conditions in Section 2 of this Agreement
shall lapse on up to one third (1/3) of the Restricted Stock Units following
each of the Company’s three succeeding fiscal years commencing with the fiscal year
in which this Award was granted (each, a “Fiscal Year”) on the date (the “Vesting
Date”) on which the Committee makes a determination that the Company has
achieved the Performance Measure (as defined below) target amount established
by the Committee for such Fiscal Year, provided that the Grantee is an employee
of the Company or a Subsidiary on such Vesting Date.  The actual number of Restricted Stock Units
that will vest on a particular Vesting Date will depend on the percentage of
the Performance Measure target amount the Company achieved for the previous
Fiscal Year based on the following percentage thresholds:


 





















 


	
  If this % of the Performance
  Measure is achieved

  (without rounding):

  	
   

  	
  This % of one third (1/3) of
  the restricted stock units will 

  become vested on the Vesting Date:

  
	
  Less than 101%

  	
   

  	
  0.00%

  
	
  101%

  	
   

  	
  10%

  
	
  102%

  	
   

  	
  20%

  
	
  103%

  	
   

  	
  30%

  
	
  104%

  	
   

  	
  40%

  
	
  105%

  	
   

  	
  50%

  
	
  106%

  	
   

  	
  60%

  
	
  107%

  	
   

  	
  70%

  
	
  108%

  	
   

  	
  80%

  
	
  109%

  	
   

  	
  90%

  
	
  110%

  	
   

  	
  100%

  



 


For purposes of this Section 3, the “Performance Measure” shall
mean, for any Fiscal Year, the quotient obtained by dividing (x) the
difference between (a) the Company’s earnings before interest, taxes,
depreciation and amortization (EBITDA) for such Fiscal Year, less (b) the
Company’s interest expense and capital expenditures for such Fiscal Year, by (y) the
weighted average number of shares of Stock outstanding for such Fiscal Year
determined on a diluted basis using the treasury stock method, all as
determined by reference to the Company’s audited financial statements for such
Fiscal Year.  The Committee shall review
the Company’s audited financial statements promptly after their preparation
each year to determine the percentage of the Performance Measure target amount
that was achieved for purposes of this Section 3.


 


If on any Vesting Date all or some of the Restricted Stock Units do not
vest because the conditions of this Section 3 are not fully satisfied,
then such unvested Restricted Stock Units shall automatically and without
notice terminate, be forfeited and become null and void, and neither the
Grantee nor any of his or her successors, heirs, assigns, or personal
representatives will thereafter have any further rights or interests in such
forfeited Restricted Stock Units.


 


4.             Dividend Equivalents.


 


(a)           If
on any date the Company shall pay any dividend on shares of Stock of the
Company, the number of Restricted Stock Units credited to the Grantee shall, as
of such date, be increased by an amount determined by the following formula:


 


W = (X multiplied by Y) divided by Z, where:


 


W = the number of additional Restricted Stock Units to be credited to
the Grantee on such dividend payment date;


 


X = the aggregate number of Restricted Stock Units (whether vested or
unvested) credited to the Grantee as of the record date of the dividend;


 


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Y = the cash dividend per share amount; and


 


Z = the Fair Market Value per share of Stock (as determined under the
Plan) on the dividend payment date.


 


(b)           In
the case of a dividend paid on Stock in the form of Stock, including without
limitation a distribution of Stock by reason of a stock dividend, stock split
or otherwise, the number of Restricted Stock Units credited to the Grantee
shall be increased by a number equal to the product of (i) the aggregate
number of Restricted Stock Units that have been awarded to the Grantee through
the related dividend record date, and (ii) the number of shares of Stock
(including any fraction thereof) payable as dividend on one share of
Stock.  Any additional Restricted Stock
Units shall be subject to the vesting and restrictions of this Agreement in the
same manner and for so long as the Restricted Stock Units granted pursuant to
this Agreement to which they relate remain subject to such vesting and
restrictions, and shall be promptly forfeited to the Company if and when such
Restricted Stock Units are so forfeited.


 


5.             Receipt of Shares of Stock.


 


(a)           As
soon as practicable following each vesting date, the Company shall issue to the
Grantee a certificate representing the number of shares of Stock equal to the
aggregate number of Restricted Stock Units credited to the Grantee that have
vested pursuant to Section 3 of this Agreement on such date and the
Grantee shall thereafter have all the rights of a stockholder of the Company
with respect to such shares, including voting and dividend rights, and such
shares of Stock shall not be restricted by the provisions hereof.


 


(b)           Upon
a Sale Event, the Company shall issue to the Grantee the number of shares of
Stock equal to the aggregate number of Restricted Stock Units credited to the
Grantee on such date in full satisfaction of such Restricted Stock Units;
provided, however, that in the event the Company is involved in a transaction
in which shares of Stock will be exchanged for cash or other consideration, the
Grantee shall receive cash or other consideration equal in value to the
aggregate number of Restricted Stock Units credited to the Grantee on the date
of the Sale Event.


 


6.             Incorporation of Plan. 
Notwithstanding anything herein to the contrary, this Agreement 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.


 


7.             Tax Withholding. 
The Grantee shall, not later than the date as of which the receipt of
this Award becomes a taxable event for Federal income tax purposes, pay to the
Company or make arrangements satisfactory to the Administrator for payment of
any Federal, state, and local taxes required by law to be withheld on account
of such taxable event.  The Grantee may
elect to have such minimum tax withholding obligation satisfied, in whole or in
part, by (i) authorizing the Company to withhold from shares of Stock to
be issued, or (ii) 


 


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transferring to
the Company, a number of shares of Stock with an aggregate Fair Market Value
that would satisfy the withholding amount due.


 


8.             No Obligation to Continue Employment. 
Neither the Company nor any Subsidiary is obligated by or as a result of
the Plan or this Agreement to continue the Grantee in employment and neither
the Plan nor this Agreement shall interfere in any way with the right of the
Company or any Subsidiary to terminate the employment of the Grantee at any
time.


 


9.             Notices.  Notices hereunder shall be mailed or
delivered to the Company at its principal place of business and shall be mailed
or delivered to the Grantee at the address on file with the Company or, in
either case, at such other address as one party may subsequently furnish to the
other party in writing.


 


 


	
   

  	
  MAC-GRAY CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name;
  Stewart G. MacDonald

  
	
   

  	
   

  	
  Title:
  Chief Executive Officer

  



 


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


 


	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Grantee’s Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Grantee’s name and address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
				



 


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