Mac-Gray Corporation's Board of Directors Issues Letter to Shareholders
Urges Shareholders to Vote their WHITE Proxy Card for the Two Highly Qualified
Independent Directors the Board has Nominated for Re-election
WALTHAM, Mass., April 30, 2013
WALTHAM, Mass., April 30, 2013 /PRNewswire/ -- The Board of Directors of
Mac-Gray Corporation (NYSE: TUC), the nation's premier provider of laundry
facilities management services to multi-family housing, today issued the
following letter to shareholders urging them to vote their WHITE proxy card
for the two highly qualified independent directors the Board has nominated for
re-election. The full text reads as follows:
April 30, 2013
In conjunction with Mac-Gray Corporation's 2013 Annual Meeting of Shareholders
on May 30, 2013, you are being asked to vote on candidates for election to
your Board of Directors. On behalf of your entire Board, we strongly urge you
to vote for the two highly qualified independent directors the Board has
nominated for re-election.
PLEASE VOTE THE ENCLOSED WHITE PROXY CARD TODAY!
A dissident shareholder, Moab Capital Partners, has nominated its own
candidates for election to your Board at the upcoming Annual Meeting.
We strongly urge you to reject this dissident slate. The Mac-Gray Board
consists solely of independent directors who are highly qualified for their
roles and fully dedicated to enhancing the Company's value for its
shareholders. As a group, your Board is highly attuned to change and fresh
ideas, with two new members having joined as directors in the past 18 months.
One of these individuals, Paul R. Daoust, was nominated by your Board and is a
recognized leader in human resources, operations and supply chain management.
The other new director, Bruce A. Percelay, chairs a Boston-based real estate
investment and development firm and was proposed for appointment to the Board
last year by Moab.
MAC-GRAY'S CURRENT BOARD HAS ENHANCED THE COMPANY'S CORPORATE GOVERNANCE
FRAMEWORK IN RESPONSE TO SHAREHOLDER INPUT
As a direct result of conversations with Mac-Gray's shareholders, your Board
recently implemented important changes in the Company's corporate governance
framework. At a special meeting on April 5, 2013, your Board terminated the
Company's Shareholder Rights Plan and recommended to shareholders an amendment
to the Company's charter which would reduce the vote required to amend the
Company's By-laws from 75% to a majority of the shares present at a
MAC-GRAY'S CURRENT BOARD HAS DELIVERED SUBSTANTIAL SHAREHOLDER VALUE
Mac-Gray's corporate performance reflects your Board's commitment to
transparency and strong governance, as well as your management team's
dedication to returning value to Mac-Gray's shareholders. Despite challenging
market conditions, the Company's financial position was significantly improved
in 2012 through the combination of debt reduction, redemption of its 7.625%
senior notes, a new, more favorable credit facility and ongoing cost control
Reflecting Mac-Gray's improved financial stability, your Board recently
approved a 45% increase in your dividend, making this Mac-Gray's third
consecutive year of double-digit dividend growth. At the same time, the
Company reduced annual interest expense by more than 30% and delivered a 50%
increase in adjusted net income. Looking ahead, in light of the opportunities
to increase revenue through organic growth and acquisitions, your Board and
management team are enthusiastic about the long-term outlook for Mac-Gray's
Clearly these are challenging times for the U.S. economy and Mac-Gray is not
immune to these challenges. Your directors, including the incumbents nominated
by the Board for re-election this year, fully understand these challenges.
Working closely with the Mac-Gray management team, the Board's nominees are
deeply immersed in an ongoing effort to ensure the Company's growth and
success. Moab's nominees lack both this level of understanding and this depth
of experience with Mac-Gray and its industry.
MAC-GRAY ASKS THAT YOU SUPPORT YOUR BOARD IN DELIVERING GREATER SHAREHOLDER
VALUE BY RE-ELECTING ITS NOMINEES
Your Board is asking you to help continue Mac-Gray's momentum by re-electing
the following directors at the 2013 Annual Meeting:
oDavid W. Bryan – director since March 2004 – is the former CEO of
Capsized, an Internet specialty retailer, and former CEO of Avedis
Zildjian Company, a leading manufacturer of musical instruments. Prior to
those roles, he spent 12 years in senior executive positions at Sara Lee
Corporation, a Fortune 50 consumer products company. He chairs our
Compensation Committee and has served as a director of the Avedis Zildjian
Company and Electrolux Corporation. Mr. Bryan received his B.A. from Colby
College and an MBA from Columbia University. He brings to the Board
considerable experience in executive management at both public and private
companies, including sales and marketing, strategic planning, new business
and corporate development.
oMary Ann Tocio – director since November 2006 – is President, Chief
Operating Officer and a director of Bright Horizons Family Solutions Inc.,
the world's largest provider of employer-supported childcare, early
education and work/life solutions. Prior to Bright Horizons, she spent
more than 20 years in the health care industry. Ms. Tocio is a director of
Harvard Pilgrim Healthcare, Inc. where she serves as Vice-Chair of the
board and also serves on its finance committee and nominating and
governance committee. She previously served on the board of directors of
Zany Brainy, Inc., a NASDAQ company and specialty retailer of high quality
educational toys and books. Ms. Tocio received her MBA from Simmons
College School of Management. She brings to the Board executive leadership
experience and extensive operational management expertise in service
industries for both public and private companies. The Bright Horizons
experience is particularly valuable to Mac-Gray, with that company's
similar decentralized, locally branch based structure.
MAC-GRAY STRONGLY URGES YOU TO REJECT THE DISSIDENT'S SLATE OF NOMINEES
oMoab: Long-Term Investor or Day Trader? While Moab promotes itself as a
shareholder who has "consistently grown" its position in the Company, its
trading history in Mac-Gray's stock raises questions about this statement.
Despite Moab's public statements, Moab's stock ownership actually
decreased by over 38,000 shares during the fourth quarter of 2012.
Moreover, during the last six months of 2012, Moab and its affiliated
entities executed 51 sales transactions and an additional 24 buy
transactions. On nine days in 2012, Moab and its affiliated entities
executed buy and sell transactions on the very same day. Is this the
trading record of a long-term shareholder or a day trader?
oAre Moab's Interests Aligned with other Shareholders? Given the 75 trades
executed by Moab and its affiliated entities in the last six months of
2012 alone, we believe it is fair to ask what Moab's true motivation is.
Is it to grow the long-term value of the stock or to make a quick
short-term profit on the shares? In its proxy materials, Moab states that
"Moab may change its views about or its investment positions in Mac-Gray
at any time, for any reason or no reason." Moab's trading history clearly
supports this statement. Are Moab's interests really aligned with other
shareholders or is it simply looking to flip its stock for a quick profit?
oMac-Gray Proposed Adding One of Moab's Candidates to Our Board and He
Declined. In 2011, your Board interviewed one of the Moab candidates,
James E. Hyman, and offered him a position on the Board and he declined
for personal reasons. As we have discussed with shareholders, we remain
open to considering adding Mr. Hyman to the Board and avoiding this costly
and disruptive proxy fight. However, Moab is insistent on pushing ahead
with its proxy contest, no matter what the consequences or costs are to
Mac-Gray and our shareholders.
oStewart MacDonald Is Mac-Gray's Largest Shareholder. Our Chief Executive
Officer, Stewart MacDonald, is Mac-Gray's largest shareholder,
beneficially owning more than 1.9 million shares. Except for transactions
in connection with exercising options and units under Mac-Gray's
compensation plans, Stewart MacDonald has not sold a single share of
Mac-Gray stock in over five years. No person has more to gain or lose from
the Company's future success than Stewart MacDonald. And, as your fellow
shareholder, Stewart MacDonald will be supporting, and urges you to
support, your Board's nominees.
Your Board respects the views and opinions of all Mac-Gray shareholders,
including Moab. As mentioned above, members of the Board have engaged in
productive dialogue with its shareholders–dialogue that has resulted in
significant governance changes for the Company.
If you receive a color proxy card from the Moab group, we kindly ask you to
disregard and discard it.
Please sign, date and return the enclosed WHITE proxy card by mailing it in
the enclosed pre-addressed, stamped envelope, or follow the instructions on
the enclosed WHITE proxy card to vote by Internet or telephone.
Your vote is important to us. Regardless of how many Mac-Gray shares you may
own, we encourage you to make your shares count. If you have any questions or
need any assistance voting your shares, please contact MacKenzie Partners,
Inc., which is assisting the Company in this matter, toll-free at (800)
322-2885 or email@example.com.
On behalf of Mac-Gray's Board of Directors, we thank you for your continued
support and confidence in us. We remain committed to rewarding your trust and
continuing to build value for all shareholders.
/s/ Thomas E. Bullock
Thomas E. Bullock
Chairman of the Board
About Mac-Gray Corporation
Founded in 1927, Mac-Gray derives its revenue principally through the
contracting of debit-card and coin-operated laundry facilities in multi-unit
housing facilities, such as apartment buildings, college and university
residence halls, condominiums and public housing complexes. Mac-Gray manages
laundry rooms located in 43 states and the District of Columbia. Mac-Gray also
sells and services commercial laundry equipment to retail laundromats and
other customers through its product sales division. To learn more about
Mac-Gray, visit the Company's website at www.macgray.com.
Important Shareholder Information
The Company will hold its 2013 Annual Meeting of Stockholders on May 30, 2013.
On April 29, 2013, the Company filed with the U.S. Securities and Exchange
Commission (the "SEC") and mailed to its shareholders a definitive proxy
statement in connection with the Annual Meeting and the solicitation of
proxies (the "2013 Proxy Statement"). The 2013 Proxy Statement contains
important information about Mac-Gray, the Annual Meeting and related matters.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE 2013 PROXY STATEMENT AND
ANY OTHER RELEVANT SOLICITATION MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE
THESE DOCUMENTS CONTAIN IMPORTANT INFORMATION.
The 2013 Proxy Statement and other relevant solicitation materials (when they
become available), and any and all documents filed by the Company with the
SEC, may be obtained by investors and security holders free of charge at the
SEC's web site at www.sec.gov. In addition, Mac-Gray's filings with the SEC,
including the 2013 Proxy Statement and other relevant solicitation materials
(when they become available), may be obtained, without charge, from Mac-Gray
by directing a request to the Company at 404 Wyman Street, Suite 400, Waltham,
Massachusetts 02451, Attention: Secretary. Such materials are also available
Mac-Gray and its directors and executive officers are deemed to be
participants in the solicitation of proxies from Mac-Gray's shareholders in
connection with the Annual Meeting. Information regarding Mac-Gray's directors
and executive officers, including a description of their direct and indirect
interests by security holdings, is contained in the 2013 Proxy Statement and
in Mac-Gray's 2012 Annual Report on Form 10-K filed with the SEC on March 15,
2013 (the "2012 Annual Report").
This letter contains statements that are "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended and
Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements include, but are not limited to, statements
regarding Mac-Gray's upcoming 2013 Annual Meeting; Mac-Gray's corporate
governance measures and other statements regarding the future operation,
direction and success of the Company's business. Certain factors which could
cause actual results to differ materially from the forward-looking statements
include, but are not limited to, general economic conditions, changes in
multi-housing vacancy rates, Mac-Gray's ability to renew long-term customer
contracts, and those risks set forth in the 2012 Annual Report under "Risk
Factors" and in other reports subsequently filed with the SEC. Mac-Gray
undertakes no obligation to update any forward-looking statements, which speak
only as of the date of this letter.
If you have any questions, require assistance with voting your WHITE proxy
card, or need additional copies of the proxy materials, please contact:
MacKenzie Partners, Inc.
105 Madison Avenue
New York, NY 10016
(212) 929-5500 (Call Collect)
TOLL-FREE (800) 322-2885
Michael J. Shea Scott Solomon
Chief Financial Officer Vice President
Mac-Gray Corporation Sharon Merrill
Email: firstname.lastname@example.org Email: email@example.com
SOURCE Mac-Gray Corporation
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