Document:

Exhibit 10.3

 

FORM OF NON-QUALIFIED
STOCK OPTION AGREEMENT

FOR COMPANY EMPLOYEES

 

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 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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (      %)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (      %)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (      %)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (      %)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (      %)

  	
   

  	
   

  

 

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.

 

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 any
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 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.

 

 

2

 

3.             Termination of Employment. 
If the Optionee’s employment by the Company or a Subsidiary (as defined
in the Plan) is terminated, the period within which to exercise the Stock Option
may be subject to earlier termination as set forth below.

 

(a)           Termination Due to Death.  If the Optionee’s employment terminates by
reason of death, any Stock Option held by the Optionee shall become fully
exercisable and may thereafter be exercised by the Optionee’s legal
representative or legatee for a period of 12 months from the date of death or
until the Expiration Date, if earlier.

 

(b)           Termination Due to Disability.  If the Optionee’s employment terminates by
reason of disability (as determined by the Administrator), any Stock Option
held by the Optionee shall become fully exercisable and may thereafter be
exercised by the Optionee for a period of 12 months from the date of
termination or until the Expiration Date, if earlier.  The death of the Optionee during the 12-month
period provided in this Section 3(b) shall extend such period for another
12 months from the date of death or until the Expiration Date, if earlier.

 

(c)           Termination for Cause.  If the Optionee’s employment terminates for
Cause, any Stock Option held by the Optionee shall terminate immediately 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.

 

(d)           Other Termination.  If the Optionee’s employment terminates for
any reason other than death, disability or Cause, and unless otherwise
determined by the Administrator, any Stock Option held by the Optionee may be
exercised, to the extent exercisable on the date of termination, for a period
of three months from the date of termination or until the Expiration Date, if
earlier.  Any Stock Option that is not exercisable
at such time shall terminate immediately and be of no further force or effect.

 

The Administrator’s
determination of the reason for termination of the Optionee’s employment shall
be conclusive and binding on the Optionee and his or her representatives or
legatees.

 

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.

 

 

3

 

6.             Tax Withholding. 
The Optionee shall, not later than the date as of which the exercise of
this Stock Option 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
Optionee may elect to have the minimum required 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) transferring to the Company, a number of shares of
Stock with an aggregate Fair Market Value that would satisfy the withholding
amount due.

 

7.             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 of employment by the
Company or any Subsidiary.

 

 

	
   

  	
  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:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

 

4Exhibit 10.4

 

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.

 

 

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

 

2

 

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 six 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.

 

3

 

(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:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

 

4

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