Document:

Exhibit 10.11

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of the 17th day of March 2010, by and between CARDINAL FINANCIAL CORPORATION (“Cardinal”) and Alice P. Frazier (“you” and all similar references) (collectively, the “parties”).

 

INTRODUCTION

 

WHEREAS, Cardinal has retained you to provide services in an executive capacity; and

 

WHEREAS, the parties desire to memorialize the terms and conditions of your continuing employment.

 

NOW THEREFORE, in consideration of the promises and obligations by and between the parties under this Agreement, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

TERMS

 

1.     Position, Title, Compensation and Benefits.

 

a.     Your position, title, compensation and benefits are outlined in the offer letter dated February 20, 2009, attached hereto.

 

b.     Your initial base salary will be at the annualized rate set forth in your offer letter, less required and authorized withholding and deductions, payable in installments in accordance with Cardinal’s normal payroll practices. You will be eligible for an annual merit increase, performance bonus, and stock option grants on the same basis as other similarly situated Cardinal Executive Officers and subject to the terms of any applicable compensation, bonus and stock plans.

 

c.     You will be eligible to participate on the same basis as similarly situated Executive Officers in the Company’s benefit plans, including its 401(k) Plan and medical benefit plans in effect from time to time during your employment. All matters of eligibility for coverage or benefits under any benefit plan will be determined in accordance with the provisions of such plan. Cardinal may change, alter, or terminate any benefit plan in its sole discretion. Your employment will also be subject to Cardinal’s personnel policies and procedures as they may be interpreted, adopted, revised or deleted from time to time in the Company’s sole discretion.

 

2.     Contract Term. The term of this Agreement shall commence on March 17, 2010 and shall continue from that date for three (3) years unless terminated prior thereto by either Cardinal or you as provided in Section 4. If the parties do not wish to renew this Agreement when it expires at the end of the initial or any renewal hereof as hereinafter provided or if either of the parties wishes to renew this Agreement on different terms than those contained herein, Cardinal or you shall give written notice of such intent to the other party at least six (6) months prior to the expiration date. In the absence of such notice, this Agreement shall be renewed on the same terms and conditions contained herein for one year from the date of expiration. Notwithstanding the aforementioned terms of this section, this agreement shall terminate on March 30, 2015. The parties expressly agree that designation of a term and renewal provisions in this Agreement does not in any way limit the right of the parties to terminate this Agreement at any time as hereinafter provided. References herein to the term of this Agreement shall refer both to the initial term and any successive term as the context requires.

 

3.     Prohibition on Competition.

 

a.     During the term of this Agreement, and for a period of twelve (12) months from the date you are terminated for Cause or your voluntary termination, you shall not render or perform competing banking and/or financial services within twenty-five (25) miles from your office or Cardinal’s corporate headquarters. This provision shall not be construed to prevent you from obtaining employment in the banking and/or financial services industries provided your new endeavor does not violate the above-stated prohibition.

 

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b.     Covenant Not to Solicit Clients or Prospective Clients. During the term of this Agreement, and for a period of twelve (12) months from the date you are terminated for Cause or your voluntary termination, you agree not to contact any Client or Prospective Client of Cardinal with whom you have had any contact on behalf of Cardinal to perform or render banking and/or financial services. This provision shall not be construed to prevent you from contacting clients with whom you have not had any contact during the term of this Agreement.

 

c.     Restriction on the Solicitation of Cardinal’s Employees. During the term of this Agreement and for a period of twelve (12) months from the date you are terminated for Cause or your voluntary termination, you agree not to attempt to induce any Cardinal employee to terminate his or her employment, or to seek or accept any employment with any other business entity that performs banking and/or financial services.

 

(i)    For the purpose of this Agreement, “Client” means any entity for which Cardinal has performed banking and/or financial services within the twelve months from your termination date. “Prospective Client” means any entity that is not a Client but with respect to whom, within twelve (12) months from your termination date, you conducted, prepared, submitted (or assisted or supervised such conduct) any client development work product or marketing efforts on behalf of Cardinal.

 

4.     Termination of Employment Relationship. Your employment relationship with Cardinal may be terminated by either party subject to the notice provision addressed below.

 

a.     Cardinal may terminate your employment for Cause effective immediately upon written notice. In the event that Cardinal terminates your employment for Cause, you will be entitled to earned and unpaid base salary and payment for any earned and unused vacation days through the last date of your employment.

 

For the purpose of this Agreement, “Cause” means any of the following conduct by you: (i) embezzlement, misappropriation of corporate funds or other material acts of dishonesty; (ii) commission or conviction of any felony or entry of a plea of guilty or nolo contendere to any felony; (iii) material failure to adhere to Cardinal’s corporate codes, policies or procedures; (iv) insubordination or any act of gross misconduct; or (v) of any applicable regulatory authority revokes the necessary approvals for you to serve as an Executive with Cardinal.

 

b.     Cardinal may terminate this agreement for any reason with thirty (30) days prior notice, pursuant to Section 10 below, to the other party.

 

(i)    In the event your employment is terminated pursuant to this section 4.b, then provided that you execute a general release in favor of Cardinal, in a form acceptable to Cardinal (the “Release”),  and subject to Section 4.b.(ii) (the date that the Release becomes effective and may no longer be revoked by you is referred to as the “Release Date”),  then: (i) Cardinal shall pay to you an amount equal to your base salary for a period of twelve (12) months from the Release Date (such applicable period is referred to as the “Severance Period”),  less applicable withholdings and deductions, on Cardinal’s regular payroll dates; and (ii) if you are participating in Cardinal’s group health insurance plans on the effective date of termination, and you timely elect and remain eligible for continued coverage under COBRA, or, if applicable, state insurance laws, Cardinal shall pay that portion of your COBRA premiums that Cardinal was paying prior to the effective date of termination for the Severance Period or for the continuation period for which you are eligible, whichever is shorter. Cardinal’s COBRA premium payment obligation will end immediately if you obtain health care insurance from any other source during the Severance Period. Notwithstanding item (i) of this subsection, above, to the extent required because you are a “specified employee” for purposes of section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), on the date of your termination, the payments described in such item (i) will commence on the first day of the month following the six-month anniversary of your date of termination, with the first payment to include amounts required to be delayed under this sentence. Interest shall accrue from the date amounts would have been paid absent the required delay, at the Prime Rate of Interest in effect on your date of termination and as reported in the Wall Street Journal. The six month delay described in this section shall only apply to the extent the exemption from Code Section 409A for certain amounts payable solely on an involuntary separation from service is not available. The exemption is available if amounts payable do not exceed two times the lesser of (a) your annual rate of pay for the year prior to the year of the separation from service or (b) the 401(a)(17) limit for the year of the separation from service.

 

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(ii)   You shall not receive any of the benefits pursuant to Section 4.b.(i) unless you execute the Release within the consideration period specified therein and until the Release becomes effective and can no longer be revoked by you under its terms. Your ability to receive benefits pursuant to Section 4.b(i) is further conditioned upon your: returning all Cardinal property; complying with your post termination obligations under this Agreement; and complying with the Release including without limitation any non-disparagement and confidentiality provisions contained therein.

 

(iii)  The benefits provided to you pursuant to this Section 4.b are in lieu of, and not in addition to, any benefits to which you may otherwise be entitled under any Cardinal severance plan, policy or program.

 

c.     You may voluntarily terminate your employment with Cardinal upon thirty (30) days prior written notice directed to Cardinal’s Chairman, President and Chief Executive Officer (“CEO”). The Chairman, President and CEO, in his sole capacity may waive this notice requirement.

 

d.     In the event of your death, your employment will terminate as of the date of death. If your employment is terminated by reason of your death, then Cardinal shall pay your accrued salary through the date of termination and thereafter have no further obligation to pay compensation to you. The entitlement of any of your beneficiaries to benefits under any Cardinal benefit plan shall be determined in accordance with applicable law and the provisions of such plan.

 

e.     Subject to applicable state and federal law, Cardinal shall at all times have the right, upon written notice to you, to terminate this Agreement based on your Disability (as defined below). Termination by Cardinal of your employment based on “Disability” shall mean termination because you are unable due to a physical or mental condition to perform the essential functions of your position with or without reasonable accommodation for six (6) months in the aggregate during any twelve (12) month period or based on the written certification by two licensed physicians of the likely continuation of such condition for such period. This definition shall be interpreted and applied consistent with the Americans with Disabilities Act, the Family and Medical Leave Act, and other applicable law. In the event your employment is terminated based on your Disability, Cardinal shall pay your accrued salary through the date of termination and thereafter have no further obligation to pay compensation to you. The entitlement of any of your beneficiaries to benefits under any Cardinal benefit plan shall be determined in accordance with applicable law and the provisions of such plan.

 

f.      Regardless of the basis of your termination of employment, you agree to provide all assistance requested by Cardinal in transitioning your duties, responsibilities client and other Cardinal relationships to other Cardinal personnel, both during your employment and after your termination or resignation. The level of services requested following termination will remain below the level that would result in a postponement of your “separation from service,” within the meaning of Treasury Regulations under Code section 409A, beyond the date of your termination of employment.

 

5.     Chance in Control. Notwithstanding the terms and conditions set forth in Section 4 of this Agreement, in the event of a Change in Control (as defined below) Cardinal agrees on behalf of itself and any successor to continue your employment pursuant to this Agreement for a period of twelve (12) months following the Change in Control and to enter into an agreement with you within the twelve month period to continue your employment thereafter. In the event Cardinal or any successor to Cardinal fails to continue your employment for the full twelve (12) month period, then, in lieu of the benefits, if any, to which you would otherwise be entitled under Section 5, provided you execute a general release in favor of Cardinal, in a form acceptable to Cardinal: (i) within thirty (30) days of the effective date of the release, Cardinal shall pay you an amount equal to your base salary for the remainder of the twelve (12) months period plus two (2) times of your base salary for a period of twelve months, less required and authorized withholdings and deductions, on Cardinal’s regular payroll dates, and (ii) if you are participating in Cardinal’s group health insurance plans on the effective date of termination, and you timely elect and remain eligible for continued coverage under COBRA, or, if applicable, state insurance laws, Cardinal shall pay that portion of your COBRA premiums that Cardinal was paying prior to the effective date of termination for the Severance Period or for the continuation period for which you are eligible, whichever is shorter. Cardinal’s COBRA premium payment obligation will end immediately if you obtain health care insurance from any other source during the Severance Period. In the event Cardinal continues your employment for the full twelve (12) month period but you and Cardinal fail to reach an agreement for your continued employment thereafter, then, in lieu of the benefits, if any, to which you would otherwise be entitled

 

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under Section 5, provided you execute a general release in favor of Cardinal, in a form acceptable to Cardinal: within thirty (30) days of the effective date of the release, Cardinal shall make a lump sum payment to you in an amount equal to two (2) times your base salary. Notwithstanding the foregoing, to the extent required because you are a “specified employee” for purposes of section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), on the date of your termination, the payments described above in this section 5 will commence on the first day of the month following the six-month anniversary of the your date of termination, with the first payment to include amounts required to be delayed under this sentence. Interest shall accrue on the initial payment from the date amounts would have been paid absent the required delay, at the Prime Rate of Interest in effect on the date of termination and as reported in the Wall Street Journal. The six month delay described in this section shall only apply to the extent the exemption from Code Section 409A for certain amounts payable solely on an involuntary separation from service is not available. The exemption is available if amounts payable do not exceed two times the lesser of (a) your annual rate of pay for the year prior to the year of the separation from service or (b) the 401(a)(17) limit for the year of the separation from service

 

a.     For the purpose of this Agreement, “Change in Control” means a merger or consolidation in which (i) Cardinal is a constituent party, or (ii) a Company Subsidiary is a constituent party and Cardinal issues shares of its capital stock pursuant to such merger or consolidation, except any such merger or consolidation involving Cardinal or a Company Subsidiary in which the holders of capital stock of Cardinal immediately prior to such merger or consolidation continue to hold immediately following such merger or consolidation more than fifty (50) percent by voting power of the capital stock of or ownership interest in (A) the surviving or resulting entity or (B) if the surviving or resulting entity is a wholly owned subsidiary of another entity immediately following such merger or consolidation, the parent entity of such surviving or resulting entity. “Change in Control” may also mean the sale, in a single transaction or series of related transactions, (i) by Cardinal of all or substantially all the assets of Cardinal (except where such sale is to a wholly owned subsidiary of the Company), or (ii) by the stockholders of Cardinal of more than fifty (50) percent by voting power of the then-outstanding capital stock of Cardinal. Finally, a “Change of Control” may constitute the occurrence of any agreement, happening or device, which has substantially the same effect on the control of Cardinal as any of the foregoing.

 

b.     In the event that the aggregate of all payments or benefits made or provided to, or that may be made or provided to, you under this Agreement and under all other plans, programs and arrangements of Cardinal (the “Aggregate Payment”)  would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”),  then such payments and benefits shall be equal to the Reduced Amount. The “Reduced Amount” shall be the largest portion of the payments and benefits that would result in no portion of the payments and benefits being subject to the Excise Tax. Cardinal shall determine the procedures and manner of making the calculation required above, and the method to order the reduction of the Aggregate Payment (i.e., whether equity or cash payments get reduced first). You and Cardinal shall cooperate with each other in connection with any proceeding or claim relating to the existence or amount of liability for Excise Tax.

 

6.     Assignment and Survival. The rights and obligations of Cardinal under this Agreement shall inure to the benefit of, and shall be binding upon, the successors and assigns of Cardinal. Your rights and obligations are personal, and may not be assigned or delegated without the Company’s proper written consent. The Agreement shall continue despite any liquidation or dissolution of Cardinal.

 

7.     Severability.  If any provision of this Agreement is held invalid or unenforceable for any reason, the invalidity shall not nullify the validity of the remaining provisions of this Agreement. If any provision of this Agreement is determined by a court or arbitration tribunal to be overly broad in duration, geographical coverage or scope, or unenforceable for any other reason, such provision will be narrowed so that it will be enforced as much as permitted by law.

 

8.     Choice of Law. This Agreement shall be governed by the laws of the Commonwealth of Virginia. You and Cardinal consent to the jurisdiction and venue of any state or federal court in the Commonwealth of Virginia and agree that any permitted lawsuit may be brought to such courts or other court of competent jurisdiction. Each party hereby waives, releases and agrees not to assert, and agrees to cause its affiliates to waive, release and not assert, any rights such party or its affiliates may have under any foreign law or regulation that would be inconsistent with the terms of this Agreement as governed by Virginia law.

 

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9.     Waiver. Any party’s waiver of any other party’s breach of any provision of this Agreement shall not waive any other right or any future breaches of the same or any other provision.

 

10.  Notices. Any notices, requests, demands or other communications provided for in this Agreement shall be in writing and shall be given either manually or by registered or certified mail. Either party may, by written notice to the other party, change their address for receipt of such notice.

 

If to the Company:

Bernard H. Clineburg

Chairman and CEO

Cardinal Financial Corporation

8270 Greensboro Drive

Suite 500

McLean, VA 22102

 

If to the Employee: Home address on file

 

11.  Entire Agreement. This Agreement is the entire agreement between you and Cardinal regarding these matters and supersedes any verbal and written agreements on such matters. This Agreement may be modified only by written agreement signed by you and the CEO or his or her express designee. All Section headings are for convenience only and do not modify or restrict any of this Agreement’s terms.

 

12.  Counterparts. For convenience of the parties, this Agreement may be executed in one or more counterparts, each of which shall be deemed an original for all purposes.

 

13.  Code Section 409A. Any benefit, payment or other right provided by this Agreement shall be provided and made in a manner, and at such time, and in such form, as complies with the applicable requirements of Code section 409A to avoid a plan failure described in Code section 409A(a)(1), including without limitation, deferring payment until the occurrence of a specified payment event described in Code section 409A(a)(2). Notwithstanding any other provision hereof or document pertaining hereto, this Agreement shall be so construed and interpreted.

 

The parties state that they have read, understood and agree to be bound by this Agreement and that they have had the opportunity to seek the advice of legal counsel before signing it and have either sought such counsel or have voluntarily decided not to do so:

 

 

	
CARDINAL FINANCIAL CORPORATION
    	
 
    	
EMPLOYEE
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Bernard H. Clineberg
    	
 
    	
/s/ Alice P. Frazier
    
	
 
    	
Bernard H. Clineberg
    	
 
    	
(Signature)
    
	
 
    	
 
    	
 
    	
 
    
	
Its:
    	
Chairman & CEO
    	
 
    	
Alice P. Frazier
    
	
 
    	
(Title)
    	
 
    	
(Print Employee’s Full   Name)
    
	
 
    	
 
    	
 
    	
 
    
	
Dated:
    	
3-17-10
    	
 
    	
Dated:
    	
3-17-10
    
						

 

5Exhibit 10.45

 

MAC-GRAY CORPORATION

 

2001 EMPLOYEE STOCK PURCHASE PLAN
 (Amended and Restated January 1, 2011)

 

The purpose of the Mac-Gray Corporation 2001 Employee Stock Purchase Plan (“the Plan”) is to provide eligible employees of Mac-Gray Corporation (the “Company”) and certain of its subsidiaries with opportunities to purchase shares of the Company’s common stock, par value $.01 per share (the “Common Stock”).  Five Hundred Thousand (500,000) shares of Common Stock in the aggregate have been approved and reserved for this purpose.  The Plan is intended to constitute an “employee stock purchase plan” within the meaning of Section 423(b) of the Internal Revenue Code of 1986, as amended (the “Code”), and shall be interpreted in accordance with that intent.

 

1.                                       ADMINISTRATION.  The Plan will be administered by the person or persons (the “Administrator”) appointed by the Company’s Board of Directors (the “Board”) for such purpose.  The Administrator has authority to make rules and regulations for the administration of the Plan, and its interpretations and decisions with regard thereto shall be final and conclusive.  No member of the Board or individual exercising administrative authority with respect to the Plan shall be liable for any action or determination made in good faith with respect to the Plan or any option granted hereunder.

 

2.                                       OFFERINGS.  The Company will make one or more offerings to eligible employees to purchase Common Stock under the Plan (“Offerings”).  Unless otherwise determined by the Administrator, an Offering will begin on the first business day occurring on or after each January 1 and July 1 and will end on the last business day occurring on or before the following June 30 and December 31, respectively.  The Administrator may, in its discretion, designate a different period for any Offering, provided that no Offering shall exceed 27 months in duration or overlap any other Offering.

 

3.                                       ELIGIBILITY.  All employees of the Company (including employees who are also directors of the Company) and all employees of each Designated Subsidiary (as defined in Section 12) are eligible to participate in any one or more of the Offerings under the Plan, provided that as of the first day of the applicable Offering (the “Offering Date”) they are customarily employed by the Company or a Designated Subsidiary for more than 20 hours a week and for five months or more a year.

 

4.                                       PARTICIPATION.  An employee eligible on any Offering Date may participate in such Offering by submitting an enrollment form to his appropriate payroll location at least 15 business days before the Offering Date (or by such other deadline as shall be established for the Offering).  The form will (a) state a whole percentage to be deducted from his Compensation (as defined in Section 12) per pay period, (b) authorize the purchase of Common Stock for him in each Offering in accordance with the terms of the Plan and (c) specify the exact name or names

 

 

in which shares of Common Stock purchased for him are to be issued pursuant to Section 10.  An employee who does not enroll in accordance with these procedures will be deemed to have waived his right to participate.  Unless an employee files a new enrollment form or withdraws from the Plan, his deductions and purchases will continue at the same percentage of Compensation for future Offerings, provided he remains eligible.  Notwithstanding the foregoing, participation in the Plan will neither be permitted nor be denied contrary to the requirements of the Code.

 

5.                                       EMPLOYEE CONTRIBUTIONS.  Each eligible employee may authorize payroll deductions at a minimum of one percent (1%) up to a maximum of fifteen percent (15%) of his Compensation for each pay period.  The Company will maintain book accounts showing the amount of payroll deductions made by each participating employee for each Offering.  No interest will accrue or be paid on payroll deductions.

 

6.                                       DEDUCTION CHANGES.  Except as may be determined by the Administrator in advance of an Offering, an employee may discontinue his participation in the Plan as provided in Section 7, or, on one occasion only during an Offering Period, may decrease, but may not increase, the rate of his payroll deduction during the Offering Period (subject to the limitations of Section 5) by filing a new enrollment form.  The change in rate shall be effective at the earliest practicable time, as determined by the Administrator, but not before the first pay period after making the change.  The Administrator may, in advance of any Offering, establish additional rules permitting an employee to increase, decrease or terminate his payroll deduction during an Offering.

 

7.                                       WITHDRAWAL.  An employee may withdraw from participation in the Plan by delivering a written notice of withdrawal to his appropriate payroll location.  The employee’s withdrawal will be effective as of the next business day.  Following an employee’s withdrawal, the Company will promptly refund to him his entire account balance under the Plan (after payment for any Common Stock purchased before the effective date of withdrawal).  Partial withdrawals are not permitted.  The employee may not begin participation again during the remainder of the Offering, but may enroll in a subsequent Offering in accordance with Section 4.

 

8.                                       GRANT OF OPTIONS.  On each Offering Date, the Company will grant to each eligible employee who is then a participant in the Plan an option (“Option”) to purchase on the last day of such Offering (the “Exercise Date”), at the Option Price hereinafter provided for, (a) a number of shares of Common Stock determined by dividing such employee’s accumulated payroll deductions on such Exercise Date by the lower of (i) 92.5% of the Fair Market Value of the Common Stock on the Offering Date, or (ii) 92.5% of the Fair Market Value of the Common Stock on the Exercise Date, or (b) 2,500 shares or such other maximum number of shares as shall have been established by the Administrator in advance of the Offering; provided, however, that such Option shall be subject to the limitations set forth below.  The purchase price for each share purchased under each Option (the “Option Price”) will be 92.5% of the Fair Market Value of the Common Stock on the Offering Date or the Exercise Date, whichever is less.

 

Notwithstanding the foregoing, no employee may be granted an option hereunder if such employee, immediately after the option was granted, would be treated as owning stock possessing five percent (5%) or more of the total combined voting power or value of all classes

 

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of stock of the Company or any Parent or Subsidiary (as defined in Section 12).  For purposes of the preceding sentence, the attribution rules of Section 424(d) of the Code shall apply in determining the stock ownership of an employee, and all stock which the employee has a contractual right to purchase shall be treated as stock owned by the employee.  In addition, no employee may be granted an Option which permits his rights to purchase stock under the Plan, and any other employee stock purchase plan of the Company and its Parents and Subsidiaries, to accrue at a rate which exceeds $25,000 of fair market value of such stock (determined on the Offering Date) for each calendar year in which the Option is outstanding at any time.  The purpose of the limitation in the preceding sentence is to comply with Section 423(b)(8) of the Code and shall be applied taking Options into account in the order in which they were granted.

 

9.                                       EXERCISE OF OPTION AND PURCHASE OF SHARES.  Each employee who continues to be a participant in the Plan on the Exercise Date shall be deemed to have exercised his Option on such date and shall acquire from the Company such number of whole shares of Common Stock reserved for the purpose of the Plan as his accumulated payroll deductions on such date will purchase at the Option Price, subject to any other limitations contained in the Plan.  Any amount remaining in an employee’s account at the end of an Offering solely by reason of the inability to purchase a fractional share will be carried forward to the next Offering; any other balance remaining in an employee’s account at the end of an Offering will be refunded to the employee promptly.

 

10.                                 ISSUANCE OF CERTIFICATES.  Certificates representing shares of Common Stock purchased under the Plan may be issued only in the name of the employee, in the name of the employee and another person of legal age as joint tenants with rights of survivorship, or in the name of a broker authorized by the employee to be his, or their, nominee for such purpose.

 

11.                                 REPURCHASE OPTION.  In the event that an employee (or a former employee) desires to sell or otherwise transfer the shares of Common Stock purchased under the Plan within six months of the Exercise Date on which such shares were purchased (the “Locked-Up Shares”), the employee (or former employee) shall give written notice to the Company of the employee’s (or former employee’s) intention to make such sale or transfer.  At any time within 10 days after the receipt of such notice by the Company, the Company may elect to repurchase the Locked-Up Shares for a price per share equal to the lesser of (i) the purchase price per share paid by the employee (or former employee) for the Locked-Up Shares under the Plan, or (ii) the Fair Market Value of the Common Stock on the date of such repurchase.  In the event the Company or its assigns do not elect to exercise such repurchase right within such 10 day period, the employee (or former employee) may sell or transfer the Locked-Up Shares.

 

12.                                 DEFINITIONS.

 

The term “Compensation” means the amount of total cash compensation, prior to salary reduction pursuant to either Section 125 or 401(k) of the Code, but excluding allowances and reimbursements for expenses such as relocation allowances or travel expenses, income or gains on the exercise of Company stock options, and similar items.

 

The term “Designated Subsidiary” means any present or future Subsidiary (as defined below) that has been designated by the Board to participate in the Plan.  The Board may so

 

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designate any Subsidiary, or revoke any such designation, at any time and from time to time, either before or after the Plan is approved by the stockholders.

 

The term “Fair Market Value of the Common Stock” on any given date means the closing price of the Common Stock as reported on the New York Stock Exchange.

 

The term “Parent” means a “parent corporation” with respect to the Company, as defined in Section 424(e) of the Code.

 

The term “Subsidiary” means a “subsidiary corporation” with respect to the Company, as defined in Section 424(f) of the Code.

 

13.                                 RIGHTS ON TERMINATION OF EMPLOYMENT.  If a participating employee’s employment terminates before the Exercise Date for any Offering for any reason, no payroll deduction will be taken from any pay due and owing to the employee and the balance in his account will be paid to him or, in the case of his death, to his designated beneficiary as if he had withdrawn from the Plan under Section 7.

 

An employee will be deemed to have terminated employment, for this purpose, if the corporation that employs him, having been a Designated Subsidiary, ceases to be a Subsidiary, or if the employee is transferred to any corporation other than the Company or a Designated Subsidiary.  An employee will not be deemed to have terminated employment, for this purpose, if the employee is on an approved leave of absence for military service or sickness, or for any other purpose approved by the Company, if the employee’s right to re-employment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence was granted or if the Administrator otherwise so provides in writing.

 

14.                                 SPECIAL RULES.  Notwithstanding anything herein to the contrary, the Administrator may adopt special rules applicable to the employees of a particular Designated Subsidiary, whenever the Administrator determines that such rules are necessary or appropriate for the implementation of the Plan in a jurisdiction where such Designated Subsidiary has employees; provided that such rules are consistent with the requirements of Section 423(b) of the Code.  Such special rules may include (by way of example, but not by way of limitation) the establishment of a method for employees of a given Designated Subsidiary to fund the purchase of shares other than by payroll deduction, if the payroll deduction method is prohibited by local law or is otherwise impracticable.  Any special rules established pursuant to this Section 14 shall, to the extent possible, result in the employees subject to such rules having substantially the same rights as other participants in the Plan.  Any grant of Options to employees of a Designated Subsidiary under this Section 14 shall be viewed as a separate offering under Section 423 of the Code.

 

15.                                 OPTIONEES NOT STOCKHOLDERS.  Neither the granting of an Option to an employee nor the deductions from his pay shall constitute such employee a holder of the shares of Common Stock covered by an Option under the Plan until such shares have been purchased by and issued to him.

 

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16.                                 RIGHTS NOT TRANSFERABLE.  Rights under the Plan are not transferable by a participating employee other than by will or the laws of descent and distribution, and are exercisable during the employee’s lifetime only by the employee.

 

17.                                 APPLICATION OF FUNDS.  All funds received or held by the Company under the Plan may be combined with other corporate funds and may be used for any corporate purpose.

 

18.                                 ADJUSTMENT IN CASE OF CHANGES AFFECTING COMMON STOCK.  In the event of a subdivision of outstanding shares of Common Stock, or the payment of a dividend in Common Stock, the number of shares approved for the Plan, and the share limitation set forth in Section 8, shall be increased proportionately, and such other adjustment shall be made as may be deemed equitable by the Administrator.  In the event of any other change affecting the Common Stock, such adjustment shall be made as may be deemed equitable by the Administrator to give proper effect to such event.

 

19.                                 AMENDMENT OF THE PLAN.  The Board may at any time, and from time to time, amend the Plan in any respect, except that without the approval, within 12 months of such Board action, by the stockholders, no amendment shall be made increasing the number of shares approved for the Plan or making any other change that would require stockholder approval in order for the Plan, as amended, to qualify as an “employee stock purchase plan” under Section 423(b) of the Code.

 

20.                                 INSUFFICIENT SHARES.  If the total number of shares of Common Stock that would otherwise be purchased on any Exercise Date plus the number of shares purchased under previous Offerings under the Plan exceeds the maximum number of shares issuable under the Plan, the shares then available shall be apportioned among participants in proportion to the amount of payroll deductions accumulated on behalf of each participant that would otherwise be used to purchase Common Stock on such Exercise Date.

 

21.                                 TERMINATION OF THE PLAN.  The Plan may be terminated at any time by the Board.  Upon termination of the Plan, all amounts in the accounts of participating employees shall be promptly refunded.

 

22.                                 GOVERNMENTAL REGULATIONS.  The Company’s obligation to sell and deliver Common Stock under the Plan is subject to obtaining all governmental approvals required in connection with the authorization, issuance, or sale of such stock.

 

The Plan shall be governed by Delaware law except to the extent that such law is preempted by federal law.

 

23.                                 ISSUANCE OF SHARES.  Shares may be issued upon exercise of an Option from authorized but unissued Common Stock, from shares held in the treasury of the Company, or from any other proper source.

 

24.                                 TAX WITHHOLDING.  Participation in the Plan is subject to any minimum required tax withholding on income of the participant in connection with the Plan.  Each employee agrees, by entering the Plan, that the Company and its Subsidiaries shall have the right

 

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to deduct any such taxes from any payment of any kind otherwise due to the employee, including shares issuable under the Plan.

 

25.                                 NOTIFICATION UPON SALE OF SHARES.  Each employee agrees, by entering the Plan, to give the Company prompt notice of any disposition of shares purchased under the Plan where such disposition occurs within two years after the date of grant of the Option pursuant to which such shares were purchased.

 

26.                                 EFFECTIVE DATE AND APPROVAL OF SHAREHOLDERS.  The amended and restated Plan shall take effect on January 1, 2011.

 

	
 
    	
MAC-GRAY   CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Stewart Gray MacDonald, Jr.
    
	
 
    	
 
    	
Name:   Stewart Gray MacDonald, Jr.
    
	
 
    	
 
    	
Title:   Chief Executive Officer
    

 

Originally Adopted by Board of Directors:  April 10, 2001

Originally Adopted by Shareholders:  At the May 23, 2001 Annual Meeting of Stockholders Amendment and Restatement approved by the Board of Directors:  March 5, 2008

Amendment and Restatement approved by the Shareholders:  At the May 22, 2008 Annual Meeting of Stockholders

Second Amendment and Restatement approved by the Board of Directors:  December 11, 2009 (Shareholder approval not required)

Third Amendment and Restatement approved by the Board of Directors:  December 14, 2010 (Shareholder approval not required)

 

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