defc14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant o
Filed by a Party other than the Registrant þ
Check the appropriate box:
| o |
|
Preliminary Proxy Statement |
| |
| o |
|
Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| |
| þ |
|
Definitive Proxy Statement |
| |
| o |
|
Definitive Additional Materials |
| |
| o |
|
Soliciting Material Pursuant to § 240.14a-12 |
Mac-Gray Corporation
(Name of Registrant as Specified in Its Charter)
TUC Investor Value Creation Group, LLC
Kovpak II, LLC
Richard Drexler
Michael J. Soenen
Benjamin Kovler
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Copy to:
Neal Aizenstein
Morgan, Lewis & Bockius LLP
77 West Wacker Drive
Chicago, Illinois 60601
(312) 324-1751
Payment of Filing Fee (Check the appropriate box):
| þ |
|
No Fee Required. |
| |
| o |
|
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
| |
(1) |
|
Title of each class of securities to which transaction applies: |
| |
| |
|
|
|
| |
| |
(2) |
|
Aggregate number of securities to which transaction applies: |
| |
| |
|
|
|
| |
| |
(3) |
|
Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and
state how it was determined): |
| |
| |
|
|
|
| |
| |
(4) |
|
Proposed maximum aggregate value of transaction: |
| |
| |
|
|
|
| |
| |
(5) |
|
Total fee paid: |
| |
| |
|
|
|
| o |
|
Fee paid previously with preliminary materials: |
| |
| o |
|
Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing. |
| |
(1) |
|
Amount previously paid: |
| |
| |
|
|
|
| |
| |
(2) |
|
Form, Schedule or Registration Statement No.: |
| |
| |
|
|
|
| |
| |
(3) |
|
Filing Party: |
| |
| |
|
|
|
| |
| |
(4) |
|
Date Filed: |
| |
| |
|
|
|
TUC
Investor Value Creation Group, LLC
April 21,
2011
Dear Fellow Stockholder of Mac-Gray Corporation:
This Proxy Statement contains important information concerning
the 2011 Annual Meeting of Stockholders (the “Annual
Meeting”) of Mac-Gray Corporation
(“Mac-Gray”) — please read it carefully. TUC
Investor Value Creation Group, LLC and certain of its affiliates
and associates (collectively, the “TUC IVC Group”) are
the beneficial owners of an aggregate of 389,553 shares of
common stock of Mac-Gray, representing approximately 2.75% of
the outstanding shares of common stock. We have been a
stockholder of Mac-Gray for more than ten years (over
4,000 days) and we believe that the Board of Directors
of Mac-Gray (the “Board”) has imposed and maintained
corporate governance policies that are not in the best interests
of Mac-Gray’s stockholders. We are therefore soliciting
your proxy to vote at the Annual Meeting on the following
matters:
(1) to elect Richard Drexler, Michael J. Soenen and
Benjamin Kovler, our three nominees, to serve as Class II
directors in opposition to Mac-Gray’s three incumbent
Class II directors whose terms expire at the Annual Meeting;
(2) to consider and vote upon an amendment to the 2009
Mac-Gray Corporation Stock Option and Incentive Plan to increase
the number of shares of Mac-Gray common stock authorized for
issuance under such plan from 2,300,000 shares to
4,100,000 shares;
(3) to consider and vote upon, if properly presented at the
Annual Meeting, a stockholder proposal regarding the
reorganization of the Board of Directors into one class;
(4) to consider and vote upon, on a non-binding, advisory
basis, a resolution approving the overall compensation of
Mac-Gray’s named executive officers, as described in the
Compensation Discussion and Analysis, executive compensation
tables and accompanying narrative disclosures in Mac-Gray’s
proxy statement;
(5) to consider and vote upon, on a non-binding, advisory
basis, the frequency at which Mac-Gray should include an
advisory vote on the compensation of Mac-Gray’s named
executive officers;
(6) to ratify the selection of PricewaterhouseCoopers LLP
as Mac-Gray’s independent registered public accounting firm
for the fiscal year ended December 31, 2011;
and to transact any other business that may properly come before
the Annual Meeting or any adjournments or postponements of such
meeting.
We are not seeking control of the Board of Directors at the
Annual Meeting and our nominees if elected would constitute a
minority of the Board. We are seeking stockholder representation
in the boardroom so that our nominees can work with other
current members of the Board and Mac-Gray’s senior
management to improve Mac-Gray’s corporate governance
policies and create stockholder value.
If you have already voted for the incumbent management slate and
on the other matters listed above, you have every right to
change your vote by submitting a later dated proxy.
WE URGE STOCKHOLDERS TO SUBMIT THE ENCLOSED GOLD PROXY
CARD TO HAVE THEIR SHARES VOTED FOR THE ELECTION OF
RICHARD DREXLER, MICHAEL J. SOENEN AND BENJAMIN KOVLER, FOR
PROPOSAL 3, AGAINST PROPOSAL 4 AND, WITH
RESPECT TO PROPOSAL 5, TO HAVE A STOCKHOLDER VOTE ON
EXECUTIVE COMPENSATION EVERY YEAR. WE MAKE NO RECOMMENDATION
WITH RESPECT TO PROPOSALS 2 AND 6.
WE URGE YOU TO SIGN, DATE AND RETURN THE ENCLOSED GOLD PROXY
CARD OR FOLLOW THE INSTRUCTIONS ON THE GOLD PROXY CARD TO
SUBMIT YOUR PROXY BY TELEPHONE OR INTERNET TODAY.
Thank you for your support,
Benjamin Kovler, Managing Member
TUC Investor Value Creation Group, LLC
2011
ANNUAL MEETING OF STOCKHOLDERS
OF
MAC-GRAY CORPORATION
PROXY
STATEMENT
of
TUC INVESTOR VALUE CREATION GROUP, LLC
KOVPAK II, LLC
RICHARD DREXLER
MICHAEL J. SOENEN
BENJAMIN KOVLER
To Our Fellow Mac-Gray Stockholders:
This Proxy Statement and the accompanying GOLD proxy card are
being furnished to stockholders of Mac-Gray Corporation
(“Mac-Gray” or the “Company”) in connection
with the solicitation of proxies by TUC Investor Value Creation
Group, LLC and certain of its affiliates and associates
(collectively, the “TUC IVC Group,” “we” or
“us”), to be used at the 2011 Annual Meeting of
Stockholders of Mac-Gray which is scheduled to be held at
9:00 A.M., local time, on Wednesday, May 18, 2011, at
the Goodwin Procter LLP Conference Center, Second Floor,
Exchange Place, 53 State Street, Boston, Massachusetts 02109,
and at any adjournments or postponements thereof (the
“Annual Meeting”). This Proxy Statement and the GOLD
proxy card are first being furnished to Mac-Gray’s
stockholders on or about April 22, 2011.
We believe that the Board of Directors of Mac-Gray (the
“Board”) has imposed and maintained corporate
governance policies that are not in the best interests of
Mac-Gray’s stockholders. We are not seeking control of the
Board of Directors and our nominees, if elected, would
constitute a minority of the Board. We are seeking stockholder
representation in the boardroom so that our nominees can work
with other current members of the Board and Mac-Gray’s
senior management to improve Mac-Gray’s corporate
governance policies and enhance stockholder value. We are
therefore soliciting your proxy to vote at the Annual Meeting on
the following matters:
Proposal 1: to elect Richard Drexler,
Michael J. Soenen and Benjamin Kovler, our three nominees
(collectively, our “Nominees”), to serve as
Class II directors in opposition to Mac-Gray’s three
incumbent Class II directors whose terms expire at the
Annual Meeting;
Proposal 2: to consider and vote upon an
amendment to the 2009 Mac-Gray Corporation Stock Option and
Incentive Plan to increase the number of shares of Mac-Gray
common stock authorized for issuance under such plan from
2,300,000 shares to 4,100,000 shares;
Proposal 3: to consider and vote upon, if
properly presented at the Annual Meeting, a stockholder proposal
regarding the reorganization of the Board of Directors into one
class;
Proposal 4: to consider and vote upon, on
a non-binding, advisory basis, a resolution approving the
overall compensation of Mac-Gray’s named executive
officers, as described in the Compensation Discussion and
Analysis, executive compensation tables and accompanying
narrative disclosures in
Mac-Gray’s
proxy statement;
Proposal 5: to consider and vote upon, on
a non-binding, advisory basis, the frequency at which Mac-Gray
should include an advisory vote on the compensation of Mac-Gray
named executive officers;
Proposal 6: to ratify the selection of
PricewaterhouseCoopers LLP as Mac-Gray’s independent
registered public accounting firm for the fiscal year ended
December 31, 2011;
and to transact any other business that may properly come before
the Annual Meeting or any adjournments or postponements of such
meeting.
This Proxy Statement is soliciting proxies to elect Richard
Drexler, Michael J. Soenen and Benjamin Kovler. The participants
in our solicitation intend to vote all of their shares of common
stock in favor of our Nominees and will not vote their shares in
favor of any of Mac-Gray’s nominees.
RICHARD DREXLER, MICHAEL J. SOENEN AND BENJAMIN KOVLER ARE
COMMITTED TO ACTING IN THE BEST INTEREST OF ALL STOCKHOLDERS OF
MAC-GRAY. THIS SOLICITATION IS BEING MADE BY THE TUC IVC GROUP
AND NOT ON BEHALF OF THE BOARD OF DIRECTORS OR MANAGEMENT OF
MAC-GRAY. WE URGE STOCKHOLDERS TO SUBMIT THE ENCLOSED GOLD
PROXY CARD TO HAVE THEIR SHARES VOTED FOR THE
ELECTION OF RICHARD DREXLER, MICHAEL J. SOENEN AND BENJAMIN
KOVLER, FOR PROPOSAL 3, AGAINST
PROPOSAL 4 AND, WITH RESPECT TO PROPOSAL 5, TO
HAVE A STOCKHOLDER VOTE ON EXECUTIVE COMPENSATION EVERY YEAR. WE
MAKE NO RECOMMENDATION WITH RESPECT TO PROPOSALS 2 AND 6.
Each of our Nominees has consented to being named in this Proxy
Statement and, if elected, to serve as director. Our Nominees
and each of the other Participants (as defined below) have no
interest in Mac-Gray other than through the beneficial ownership
(if any) of shares of common stock, par value $0.01 per share,
of Mac-Gray or other securities (if any) of Mac-Gray as
disclosed herein.
IMPORTANT
According to Mac-Gray’s Amended and Restated By-Laws (the
“Bylaws”) and applicable law, the election of our
Nominees at the Annual Meeting requires a plurality of the votes
properly cast on the election of directors by the holders of
Mac-Gray’s common stock. Proposals 2, 3, 4 and 6 each
require the affirmative vote of a majority of the votes properly
cast for and against such proposals at a meeting at which a
quorum is present. Proposal 5 requires the affirmative vote
a majority of the votes properly cast for or against such
proposal at a meeting at which a quorum is present, but if no
alternative receives a majority of the votes properly cast, the
alternative that receives a plurality of the votes properly cast
shall be treated as the option recommended by the stockholders.
As a result, your vote is extremely important. We urge you to
sign, date and return the enclosed GOLD proxy card or follow the
instructions on the GOLD proxy card to submit a proxy by
telephone or Internet to vote FOR the election of Richard
Drexler, Michael J. Soenen and Benjamin Kovler, FOR
Proposal 3, AGAINST Proposal 4 and, with respect to
Proposal 5, to have a stockholder vote on executive
compensation every year. We make no recommendation with respect
to Proposals 2 and 6.
WE URGE YOU NOT TO SIGN ANY PROXY CARD SENT TO YOU BY MAC-GRAY.
IF YOU HAVE ALREADY DONE SO, YOU MAY REVOKE THAT PROXY BY
DELIVERING A LATER-DATED GOLD PROXY CARD IN THE ENCLOSED
POSTAGE-PAID ENVELOPE, BY FOLLOWING THE INSTRUCTIONS ON THE
GOLD PROXY CARD TO SUBMIT A PROXY BY TELEPHONE OR INTERNET OR BY
VOTING IN PERSON AT THE ANNUAL MEETING. ONLY YOUR LATEST DATED
PROXY FOR THE ANNUAL MEETING WILL COUNT AT THE ANNUAL MEETING.
IF YOU HOLD YOUR STOCK IN STREET-NAME, YOU SHOULD COMPLETE THE
GOLD VOTING INSTRUCTION FORM THAT YOU ARE PROVIDED BY
YOUR BROKER, BANK, CUSTODIAN OR OTHER NOMINEE AND RETURN IT AS
REQUESTED OR FOLLOW THE INSTRUCTIONS FOR SUBMITTING A PROXY
BY TELEPHONE OR THROUGH THE INTERNET PRINTED ON THE FORM. SEE
“QUESTIONS AND ANSWERS ABOUT THIS PROXY SOLICITATION,
VOTING AND PROXY PROCEDURES” BELOW.
2
If you have questions or need assistance voting your shares,
contact:
Innisfree
M&A Incorporated
501 Madison Avenue, 20th Floor
New York, NY 10022
Stockholders Call Toll-Free at:
(888) 750-5834
Banks and Brokers Call Collect at:
(212) 750-5833
According to the proxy statement of Mac-Gray for the Annual
Meeting, filed with the Securities and Exchange Commission
(“Mac-Gray’s Proxy Statement”), only holders of
record of Mac-Gray’s common stock, par value $0.01 per
share, as of the close of business on April 4, 2011 (the
“Record Date”) are entitled to notice of, and to vote
at, the Annual Meeting and any adjournments or postponements
thereof. According to Mac-Gray’s Proxy Statement, as of the
Record Date, there were outstanding 14,216,590 shares of
common stock of Mac-Gray. Stockholders of record at the close of
business on the Record Date will be entitled to one vote at the
Annual Meeting for each share of common stock of Mac-Gray held
on the Record Date.
As of the Record Date, the Participants beneficially owned an
aggregate 328,853 of shares of common stock of Mac-Gray,
representing approximately 2.3% of the outstanding shares of
common stock. The Participants intend to vote such shares FOR
the election of Richard Drexler, Michael J. Soenen and Benjamin
Kovler, FOR Proposal 3, AGAINST Proposal 4 and, with
respect to Proposal 5, to have a stockholder vote on
executive compensation every year. We make no recommendation
with respect to Proposals 2 and 6.
WE URGE YOU TO VOTE YOUR SHARES AT THE ANNUAL MEETING
FOR THE ELECTION OF RICHARD DREXLER, MICHAEL J. SOENEN
AND BENJAMIN KOVLER, FOR PROPOSAL 3, AGAINST
PROPOSAL 4 AND, WITH RESPECT TO PROPOSAL 5, TO
HAVE A STOCKHOLDER VOTE ON EXECUTIVE COMPENSATION EVERY YEAR BY
SUBMITTING THE ENCLOSED GOLD PROXY CARD TODAY. WE MAKE NO
RECOMMENDATION WITH RESPECT TO PROPOSALS 2 AND 6. PLEASE
SIGN, DATE AND RETURN THE GOLD PROXY CARD IN THE
POSTAGE-PAID ENVELOPE PROVIDED OR FOLLOW THE
INSTRUCTIONS ON THE GOLD PROXY CARD TO SUBMIT A PROXY BY
TELEPHONE OR INTERNET.
3
TABLE OF
CONTENTS
| |
|
|
|
|
|
|
|
Page
|
|
|
|
BACKGROUND TO THE SOLICITATION
|
|
|
5
|
|
|
QUESTIONS AND ANSWERS ABOUT THIS PROXY SOLICITATION, VOTING AND
PROXY PROCEDURES
|
|
|
6
|
|
|
PROPOSAL 1 — ELECTION OF DIRECTORS —
VOTE FOR THE ELECTION OF RICHARD DREXLER, MICHAEL J. SOENEN AND
BENJAMIN KOVLER
|
|
|
10
|
|
|
PROPOSAL 2 — AMENDMENT TO THE 2009 MAC-GRAY
CORPORATION STOCK OPTION AND INCENTIVE PLAN
|
|
|
13
|
|
|
PROPOSAL 3 — STOCKHOLDER PROPOSAL ENTITLED:
“SHAREHOLDER PROPOSAL TO DECLASSIFY THE BOARD OF
DIRECTORS”
|
|
|
14
|
|
|
PROPOSAL 4 — NON-BINDING, ADVISORY VOTE ON THE
COMPENSATION OF MAC-GRAY’S NAMED EXECUTIVE OFFICERS
|
|
|
16
|
|
|
PROPOSAL 5 — NON-BINDING, ADVISORY VOTE ON THE
FREQUENCY OF THE STOCKHOLDER VOTE ON EXECUTIVE COMPENSATION
|
|
|
17
|
|
|
PROPOSAL 6 — RATIFICATION OF THE SELECTION OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
|
|
17
|
|
|
OTHER PROPOSALS
|
|
|
17
|
|
|
PARTICIPANTS IN SOLICITATION OF PROXIES
|
|
|
17
|
|
|
COST AND METHOD OF SOLICITATION
|
|
|
18
|
|
|
STOCKHOLDER PROPOSALS
|
|
|
19
|
|
|
ADDITIONAL INFORMATION
|
|
|
20
|
|
|
ANNEX A — SUMMARY OF PURCHASES AND SALES OF
SECURITIES OF MAC-GRAY
|
|
|
A-1
|
|
|
ANNEX B — PRINCIPAL AND MANAGEMENT STOCKHOLDERS
|
|
|
B-1
|
|
4
BACKGROUND
TO THE SOLICITATION
We first purchased shares of Mac-Gray in June, 1999 and
currently beneficially own 389,553 shares, representing
approximately 2.75% of Mac-Gray’s outstanding shares of
common stock. We have been stockholders for more than ten years.
Kovpak II, LLC submitted a stockholder proposal at the 2010
annual meeting of Mac-Gray stockholders urging the Mac-Gray
Board of Directors to take all necessary steps to redeem
promptly all outstanding preferred stock purchase rights issued
under Mac-Gray’s Shareholders Rights Agreement. This
proposal was approved by the affirmative vote of a majority of
the votes cast at the meeting.
On February 24, 2011, Kovpak II, LLC and Benjamin Kovler
sent a notice of nomination letter to
Mac-Gray
stating their intention to seek to nominate Richard Drexler,
Michael J. Soenen and Benjamin Kovler for election to the Board
as Class II directors at the Annual Meeting. This notice
was delivered to the Company prior to the February 25, 2011
deadline, as set forth in Mac-Gray’s proxy statement for
the 2010 annual meeting of stockholders, for the submission of
director nominations by stockholders at the Annual Meeting in
accordance with Mac-Gray’s By-Laws. This notice complied
with the information requirements relating to director
nominations by stockholders at the Annual Meeting in accordance
with Mac-Gray’s By-Laws, including: (a) the name and
address of the stockholder giving the notice, as they appear on
Mac-Gray’s books, and the names and addresses of any other
stockholders nominating directors; (b) as to each proposing
stockholder, certain information regarding such
stockholder’s beneficial ownership of, and arrangements
related to, Mac-Gray securities; (c) a description of all
arrangements or understandings by and among any of the
stockholders proposing such director nominees; and (d) all
information relating to such director nominees that is required
pursuant to Regulation 14A and the Securities and Exchange
Act of 1934, as amended (including such director nominees’
written consent to being named in the proxy statement as a
nominee and to serving as a director if elected).
Benjamin Kovler is the Managing Member of the TUC Investor Valve
Creation Group, LLC and has served as Chief Investment Officer
of Kovpak II, LLC since June, 2009. Each of Benjamin Kovler and
Richard Drexler served on the Board of Directors of Trausch Inc.
(the lending U.S. company in the re-manufactured
refrigerated display case industry) from 2004 to 2010. Our
Nominees will not receive any compensation from any of the
Participants for their services as directors of Mac-Gray. There
are no arrangements for understandings between the other
Participants in our solicitation and any of our Nominees
pursuant to which the nomination of our Nominees described
herein is to be made, other than the consent by each of our
Nominees to be named in this Proxy Statement and to serve as a
director of Mac-Gray if elected as such at the Annual Meeting.
On April 8, 2011, we filed a preliminary proxy statement
with the Securities and Exchange Commission pursuant to
Rule 14a-6
under the Securities Exchange Act of 1934, as amended. On
April 18, 2011, we filed a revised preliminary proxy
statement with the Securities and Exchange Commission.
5
QUESTIONS
AND ANSWERS ABOUT THIS PROXY SOLICITATION,
VOTING AND PROXY PROCEDURES
Who is
making this Solicitation?
The participants in this solicitation consist of TUC Investor
Value Creation Group, LLC, an Illinois limited liability
company, Kovpak II, LLC, a Delaware Illinois limited liability
company, Richard Drexler, Michael J. Soenen and Benjamin Kovler
(collectively, the “Participants”). This solicitation
is not being made by the Board of Directors or management of
Mac-Gray.
What
matters am I being asked to vote on?
We are soliciting your proxy to vote as follows on the following
matters at the Annual Meeting of Stockholders:
Proposal 1 —
Election of Directors
We are soliciting your proxy to vote “FOR” the
election of Richard Drexler, Michael J. Soenen and Benjamin
Kovler to serve as Class II directors on the Board of
Directors of Mac-Gray, each to hold office until Mac-Gray’s
annual meeting of stockholders to be held in 2014 and until such
director’s successor is duly elected and qualified, in
opposition to Mac-Gray’s three incumbent directors whose
terms expire at the Annual Meeting.
If you submit the GOLD proxy card and make no indication with
respect to the election of directors, your proxy will be voted
“FOR” Richard Drexler, Michael J. Soenen and
Benjamin Kovler.
Proposal 2 —
Amendment to the 2009 Mac-Gray Corporation Stock Option and
Incentive Plan
We are soliciting your proxy to vote on Mac-Gray’s proposal
to approve the amendment to the 2009 Mac-Gray Corporation Stock
Option and Incentive Plan. We make no recommendation with
respect to how you should vote on Proposal 2.
If you submit the GOLD proxy card and make no indication with
respect to Proposal 2, your proxy will be voted
“FOR” Proposal 2.
Proposal 3 —
Stockholder Proposal — Shareholder Proposal to
Declassify the Board of Directors
We are soliciting your proxy to vote “FOR” a
stockholder proposal regarding the reorganization of the Board
of Directors into one class.
If you submit GOLD proxy card and make no indication with
respect to Proposal 3, your proxy will be voted
“FOR” Proposal 3.
Proposal 4 —
Non-Binding, Advisory Vote on the Compensation of
Mac-Gray’s Named Executive Officers
We are soliciting your proxy to vote “AGAINST”
Mac-Gray’s non-binding, advisory vote on the compensation
of Mac-Gray’s Named Executive Officers.
If you submit the GOLD proxy card and make no indication with
respect to Proposal 4, your proxy will be voted
“AGAINST” Proposal 4.
Proposal 5 —
Non-binding, Advisory Vote on the Frequency of the Stockholder
Vote on Executive Compensation
We are soliciting your proxy to vote to have a stockholder vote
on executive compensation every year.
If you submit the GOLD proxy card and make no indication with
respect to Proposal 5, your proxy will be voted to
recommend having executive compensation voting every year.
6
Proposal 6 —
Ratification of the Election of Independent Registered Public
Accounting Firm
We are soliciting your proposal to vote on Mac-Gray’s
proposal to ratify the selection of PricewaterhouseCoopers LLC
as Mac-Gray’s independent registered public accounting firm
for the fiscal year ended December 31, 2011. We make no
recommendation with respect to how you should vote on
Proposal 6.
If you submit the GOLD proxy card and make no indication with
respect to Proposal 6, your proxy will be voted
“FOR” Proposal 6.
In addition, if you sign and return the accompanying GOLD proxy
card or use the GOLD proxy card to vote by telephone or
Internet, the proxy holders are authorized to vote in their
discretion upon such other matters which the Participants do not
know, a reasonable time before the solicitation, are to be
presented at the Annual Meeting or any adjournments or
postponements thereof.
What is
the recommendation of the TUC IVC Group as to how I should
vote?
We recommend you submit the GOLD proxy card to have your shares
voted at the Annual Meeting FOR the election to the Mac-Gray
Board of Directors of Richard Drexler, Michael J. Soenen and
Benjamin Kovler, FOR Proposal 3, AGAINST Proposal 4
and, with respect to Proposal 5, to have a stockholder vote
on executive compensation every year. We make no recommendation
with respect to Proposals 2 and 6.
What do I
need to do now?
This Proxy Statement contains important information about
Mac-Gray, our Nominees, Proposals 2, 3, 4, 5 and 6, the
Participants and our solicitation. We urge you to read this
Proxy Statement carefully, including its annexes. After
carefully reading and considering the information set forth in
this Proxy Statement, please submit the GOLD proxy card to have
your shares of common stock held on the Record Date voted at the
Annual Meeting, or provide proper voting instructions with
respect to such shares to your broker, bank, custodian or other
nominee, as soon as possible so that your common stock will be
represented and voted at the Annual Meeting.
Who is
entitled to vote at the Annual Meeting?
According to Mac-Gray’s Proxy Statement, Bylaws and
applicable law, holders of shares of Mac-Gray’s common
stock at the close of business on the Record Date are entitled
to notice of, and to vote at, the Annual Meeting. Each share of
common stock outstanding on the Record Date is entitled to one
vote on each matter presented at the Annual Meeting.
Only holders of record as of the close of business on the Record
Date will be entitled to vote. If you were a stockholder of
record on the Record Date, you will retain your voting rights at
the Annual Meeting even if you sell such shares after the Record
Date. Accordingly, it is important that you vote the shares held
by you on the Record Date, or grant a proxy to vote such shares
on the GOLD proxy card, even if you sell such shares after the
Record Date.
How do I
vote my shares if I am a stockholder of record?
As explained in the detailed instructions on your GOLD proxy
card, if you are a stockholder of record, you may submit your
proxy by telephone or on the Internet, by mail or in person at
the Annual Meeting. To submit a proxy by telephone or Internet,
follow the instructions on the enclosed GOLD proxy card. To
submit your proxy by mail, sign, date and return the enclosed
GOLD proxy card in the enclosed postage-paid envelope.
Alternatively, you can attend the Annual Meeting and vote in
person. Written ballots will be distributed to stockholders who
wish to vote in person at the Annual Meeting. To ensure that
your shares are voted, we recommend that you submit the enclosed
GOLD proxy card even if you plan to attend the Annual Meeting in
person.
7
How do I
vote shares that I hold through a broker, bank, custodian or
other nominee?
If you hold shares through someone else, such as a broker, bank,
custodian or other nominee (also known as holding shares in
“Street-name”), you will receive voting material from
that firm. Please complete the GOLD voting instruction form and
return it as requested by your custodian. You may also be able
to return your instructions by Internet or telephone —
please see the voting form for instructions on how to access
those voting methods.
If you hold your shares in Street-name, you will not be able to
vote in person at the Annual Meeting unless you have previously
requested and obtained a “legal proxy” from your
broker, bank, custodian or other nominee and present it at the
Annual Meeting.
What do I
do if I receive a White proxy card from Mac-Gray?
We urge you not to return any White proxy card that
Mac-Gray’s Board of Directors may send you. If you submit a
proxy to us by signing and returning the enclosed GOLD proxy
card or by following the instruction on the GOLD proxy card to
submit a proxy by telephone or Internet, returning a later-dated
White card will have the effect of revoking your earlier proxy.
Only your latest-dated proxy will be counted at the Annual
Meeting.
If you have already sent a White proxy card to Mac-Gray for the
matters to be voted on, you may revoke it and have your shares
voted at the Annual Meeting “FOR” the election
of Richard Drexler, Michael J. Soenen and Benjamin Kovler,
“FOR” Proposal 3,
“AGAINST” Proposal 4 and, with respect to
Proposal 5, to have a stockholder vote on executive
compensation every year by signing, dating and returning the
enclosed GOLD proxy card or by following the instructions on the
GOLD proxy card to submit a proxy by telephone or Internet. ONLY
YOUR LATEST DATED PROXY FOR THE ANNUAL MEETING WILL COUNT AT THE
ANNUAL MEETING.
What
happens if I fail to instruct my broker, bank, custodian or
other nominee?
If you hold your shares in Street-name through a broker, bank or
other custodian, only the broker, bank, custodian or other
nominee can vote your shares. In order to ensure that your
shares are voted at the Annual Meeting, you must give specific
instructions regarding how to vote your shares.
If you do not give specific instructions regarding how to vote
your shares, the broker, bank, custodian or other nominee may
not exercise their discretion to vote your shares with respect
to the election of directors or any of the Proposals. As a
result, we strongly urge you to give specific instruction
regarding how to vote your shares by completing the GOLD voting
instruction form provided to you by your custodian and returning
it as requested by the firm.
What
happens if I return a signed proxy without voting
instructions?
All valid proxies received prior to the Annual Meeting will be
voted. If you specify a choice with respect to any item by
marking the appropriate box on the proxy card, your shares will
be voted in accordance with that specification.
If you executed your GOLD proxy but failed to provide specific
instructions on how to vote, your common stock will be voted
(i) FOR the election of each of Richard Drexler, Michael J.
Soenen and Benjamin Kovler, (ii) FOR Proposals 2, 3
and 6, (iii) AGAINST Proposal 4, (iv) with
respect to Proposal 5, to have a stockholder vote on
executive compensation every year and (v) in the proxy
holder’s discretion as to other matters which the
Participants do not know, a reasonable time before the
solicitation, are to be presented at the Annual Meeting.
What is
the quorum for the Annual Meeting?
According to Mac-Gray’s Bylaws and applicable law, a
majority of shares of common stock of Mac-Gray entitled to vote,
present in person or represented by proxy at the Annual Meeting
shall constitute a quorum. “Withhold authority” votes,
“abstentions” and “broker non-votes” will be
counted as present and entitled to
8
vote for purposes of determining a quorum. A “withhold
authority” vote is a stockholder’s vote to withhold
authority to cast a vote “for” the election of one or
more director nominees. An “abstention” represents an
affirmative choice to decline to vote on a proposal other than
the election of directors. A “broker non-vote” occurs
when a nominee holding shares for a beneficial owner does not
vote on a particular proposal because the nominee does not have
discretionary voting power under applicable law with respect to
that proposal and has not received instructions with respect to
that proposal from the beneficial owner. There will not be any
broker non-votes with respect to the election of directors and
Proposals 2, 3, 4, 5 and 6.
What is
the vote required to approve matters at the Annual Meeting? What
is the effect of abstentions and broker non-votes?
According to Mac-Gray’s Bylaws and applicable law,
directors at the Annual Meeting are elected by a plurality of
the votes properly cast on the election of directors.
Proposals 2, 3, 4 and 6 each require the affirmative vote
of a majority of the votes properly cast for and against such
proposals at a meeting at which a quorum is present. For
Proposal 5, the frequency of executive compensation votes,
the alternative that receives a plurality of the votes properly
cast is required for approval, but if no alternative receives a
majority of the votes properly cast, the alternative that
receives a plurality of the votes properly cast shall be treated
as the option recommended by the stockholders. For
Proposal 2, abstentions and broker non-votes are treated as
a vote against the proposal. For Proposals 3, 4, 5 and 6,
abstentions and broker non-votes are not included in the number
of votes cast for and against the proposal and therefore have no
effect on the vote on such proposal. For Proposal 2, in
accordance with New York Stock Exchange (“NYSE”)
rules, broker non-votes may affect the approval of such proposal
to the extent broker non-votes cause less than a majority of the
outstanding shares to be voted on such proposal. Abstentions are
applicable to all proposals other than the proposal for election
of directors. Neither abstentions nor broker non-votes will be
counted for approval of any proposal.
Who may
attend and vote at the Annual Meeting?
All Mac-Gray stockholders of record as of the Record Date may
attend and vote at the Annual Meeting. If you hold your stock in
Street-name, you may attend and vote in person at the Annual
Meeting only if you obtain a “legal proxy” from your
broker, bank, custodian or other nominee.
Should I
submit a proxy even if I plan to attend the Annual
Meeting?
Whether or not you plan to attend the Annual Meeting, we urge
you to submit promptly the GOLD proxy card to ensure that your
shares are voted. Returning the enclosed GOLD proxy card by mail
or following the instructions on the GOLD proxy card to submit a
proxy by telephone or Internet will not affect your right to
attend the Annual Meeting and vote in person.
How do I
revoke a proxy?
If you are a stockholder of record, you may revoke or change
your proxy instructions at any time prior to the vote at the
Annual Meeting by:
|
|
|
| |
•
|
submitting a properly executed, subsequently dated GOLD proxy
card that will revoke all prior proxy cards, including any White
proxy cards which you may have submitted to Mac-Gray;
|
| |
| |
•
|
attending the Annual Meeting and withdrawing your proxy by
voting in person (although attendance at the Annual Meeting will
not in and of itself constitute revocation of a proxy); or
|
| |
| |
•
|
delivering written notice of revocation to the Secretary of
Mac-Gray at 404 Wyman Street, Suite 400, Waltham, MA 02451,
Attention: Linda Serafini, Secretary.
|
Although a revocation is effective if delivered to Mac-Gray, the
TUC IVC Group requests that a copy of any revocation be mailed
to TUC Investor Value Creation Group, LLC,
c/o Innisfree
M&A Incorporated, FDR Station, P.O. Box 5155, New
York, NY
10150-5155,
so that the TUC IVC Group will be aware of all revocations.
9
If you hold your stock in Street-name, and you submit proxy
instructions, you may later revoke your proxy instructions by
informing the holder of record in accordance with that
holder’s procedures. If you hold your stock in Street-name,
you may also attend and vote in person at the Annual Meeting,
but only if you obtain a “legal proxy” from your
broker, bank, custodian or other nominee.
IF YOU PREVIOUSLY SIGNED AND RETURNED A WHITE PROXY CARD TO
MAC-GRAY, WE URGE YOU TO REVOKE IT BY (1) SIGNING, DATING
AND RETURNING THE GOLD PROXY CARD OR FOLLOWING THE
INSTRUCTIONS ON THE GOLD PROXY CARD TO SUBMIT A PROXY BY
TELEPHONE OR INTERNET, (2) ATTENDING THE ANNUAL MEETING AND
VOTING IN PERSON OR (3) DELIVERING A WRITTEN NOTICE OF
REVOCATION TO THE SECRETARY OF MAC-GRAY WITH A COPY DELIVERED TO
THE TUC IVC GROUP. ONLY YOUR LATEST DATED PROXY FOR THE ANNUAL
MEETING WILL COUNT AT THE ANNUAL MEETING.
IF YOU HOLD YOUR STOCK IN STREET-NAME AND YOU PREVIOUSLY
RETURNED A PROXY CARD TO YOUR BROKER, BANK, CUSTODIAN OR OTHER
NOMINEE, WE URGE YOU TO REVOKE IT BY (1) INFORMING THE
HOLDER OF RECORD IN ACCORDANCE WITH THAT HOLDER’S
PROCEDURES OR (2) OBTAINING A “LEGAL PROXY” FROM
YOUR BROKER, BANK, CUSTODIAN OR OTHER NOMINEE AND ATTENDING THE
ANNUAL MEETING AND VOTING IN PERSON.
Who can
help answer my questions?
If you would like additional copies of this document, would like
to ask any additional questions or need assistance voting your
GOLD proxy card, please contact our proxy solicitor:
Innisfree
M&A Incorporated
501 Madison Avenue, 20th Floor
New York, NY 10022
Stockholders Call Toll-Free at:
(888) 750-5834
Banks and Brokers Call Collect at:
(212) 750-5833
PROPOSAL 1 —
ELECTION OF DIRECTORS — VOTE FOR THE ELECTION OF
RICHARD DREXLER, MICHAEL J. SOENEN AND BENJAMIN KOVLER
According to Mac-Gray’s Proxy Statement, the Board of
Directors of Mac-Gray is currently composed of eight directors
divided into three classes serving three-year terms, with one
class of directors elected by stockholders annually. According
to Mac-Gray’s Proxy Statement, three Class II
directors’ terms will expire at the Annual Meeting.
We are seeking your support at the Annual Meeting to elect
Richard Drexler, Michael J. Soenen and Benjamin Kovler as
Class II directors in opposition to the three incumbent
Class II directors of Mac-Gray. If elected, Richard
Drexler, Michael J. Soenen and Benjamin Kovler will constitute a
minority of the members of the Board. Each of Richard Drexler,
Michael J. Soenen and Benjamin Kovler is independent from
Mac-Gray in accordance with the Securities and Exchange
Commission (“SEC”) and New York Stock Exchange rules
regarding director independence. Each of our Nominees has
consented to serve as a director of Mac-Gray, if elected, and to
be named in this Proxy Statement as a nominee for election to
the Board of Directors of
Mac-Gray.
Our Nominees, if elected, would serve a three-year term as
Class II directors and hold office until the 2014 annual
meeting of stockholders and until a successor has been duly
elected and qualified. Background information about each of our
Nominees is set forth below.
Our
Nominees
Set forth below are the name, age, business address, present
principal occupation and employment and material occupations,
positions, offices, or employments for at least the last ten
years of each of our Nominees. This information has been
furnished to the TUC Investor Value Creation Group, LLC by our
Nominees.
10
Richard Drexler, age 63, has served as the Chairman
of the Board of Directors and CEO of Quality Products, Inc., a
public company involved in manufacturing, since October, 2002.
From 1969 to 2006, Mr. Drexler served in various executive
positions at Allied Products Corporation, an industrial
manufacturing company, including President and CEO from 1986 to
1993 and Chairman, President and CEO from 1993 to 2006. From
October 2000 to May 2006, Allied Products Corporation operated
under Chapter 11 bankruptcy until the sale of its
significant division. All outstanding debt was repaid.
Mr. Drexler currently serves on the Board of Directors of
Quality Products, Inc., Pro-Gard LLC and Restoration Cleaners
LLC and formerly served on the Board of Directors of Allied
Products Corporation, ABC Rail, Trausch Inc. (the leading
U.S. company in the re-manufactured refrigerated display
case industry) and Kenrich Holdings Inc. We believe that
Mr. Drexler’s experience and qualifications as a CEO
of manufacturing businesses, independent investor and director
of publicly-traded corporations would make him a valuable member
of Mac-Gray’s Board of Directors.
Michael J. Soenen, age 40, is a private investor.
Mr. Soenen served as the Chairman of the Board of
Directors, President and Chief Executive Officer of FTD Group,
Inc. a leading provider of floral and specialty gift products
and services to consumers and retail florists from 2004 to
December, 2008. Prior to his position as Chief Executive
Officer, Mr. Soenen served as President and Chief Operating
Officer of FTD, Inc. from
2002-2004,
President and CEO of FTD.com from
1999-2002,
and Vice President of Marketing of FTD, Inc. from
1997-1999.
Mr. Soenen also held positions at Perry Corp. and Salomon
Brothers Inc. Mr. Soenen also serves on the board of
directors of OptionsXpress, Inc. and formerly served on the
boards of Rewards Network, Inc. and Youbet, Inc. He received a
Bachelor of Arts from Kalamazoo College. We believe that
Mr. Soenen’s experience and qualifications a CEO and
director of retail businesses, independent investor and director
of publicly-traded corporations would make him a valuable member
of Mac-Gray’s Board of Directors.
Benjamin Kovler, age 32, has served as Chief
Investment Officer of Kovpak II, LLC since June, 2009.
Mr. Kovler has served as Director of Research of JK
Management, Inc. since June, 2005. From September, 2002 to June,
2005 Mr. Kovler served as the Upper Division Math
Teacher at Saint Mark’s School. Mr. Kovler served as
an Associate at Swander Pace & Company, a strategic
consulting firm, from September, 2000 to September, 2002.
Mr. Kovler formerly served on the Board of Directors of
Trausch, Inc. (the leading U.S. company in the
re-manufacturing refrigerated display case industry) from 2004
to 2010. We believe that Mr. Kovler’s experience and
qualifications as an investor in Mac-Gray for over ten years and
independent investor would make him a valuable member of
Mac-Gray’s Board of Directors.
Our Nominees will not receive any compensation from any of the
Participants for their services as directors of Mac-Gray. None
of the Nominees has received any compensation from Mac-Gray
during
Mac-Gray’s
last completed fiscal year. Other than as stated herein, there
are no arrangements or understandings between the other
Participants in our solicitation and any of our Nominees or any
other person or persons pursuant to which the nomination of our
Nominees described herein is to be made, other than the consent
by each of our Nominees to be named in this Proxy Statement and
to serve as a director of Mac-Gray if elected as such at the
Annual Meeting. Neither of our Nominees nor any of their
associates is a party adverse to
Mac-Gray or
any of its subsidiaries or has a material interest adverse to
Mac-Gray or any of its subsidiaries in any material pending
legal proceedings.
Pursuant to Mac-Gray’s Bylaws and applicable law, if
Mac-Gray advances the date of the Annual Meeting by more than
30 days before, or delays the date of the Annual Meeting by
more than 60 days after, the first anniversary of
Mac-Gray’s 2010 annual meeting of stockholders, then the
Participants reserve the right to nominate additional or
substitute nominees and to propose other business to be
considered by the stockholders at the Annual Meeting, provided,
however, that such addition or substitution of new nominees or
proposals of other business would require, pursuant to
applicable law, that we provide additional proxy materials
(including a supplement to this Proxy Statement and a revised
proxy card) regarding the new nominees or other business to the
stockholders of Mac-Gray and that we provide notice to Mac-Gray
of our intent to propose new nominees or other business in
accordance with the advance notice provisions in Mac-Gray’s
Bylaws.
11
Our
Reasons for Supporting Our Nominees
We have been a stockholder of Mac-Gray for more than ten years
(over 4,000 days). We currently beneficially own
389,553 shares of Mac-Gray common shares, representing
approximately 2.75% of Mac-Gray’s outstanding shares of
common stock (based upon the 14,192,689 shares of common
stock reported to be issued and outstanding in Mac-Gray’s
annual report on
Form 10-K
for the fiscal year ended December 31, 2010 (the
“Mac-Gray 2010
Form 10-K”)
as of March 8, 2011). As significant stockholders of
Mac-Gray, we have one simple goal — to create
stockholder value for all stockholders.
We believe that our Nominees are highly qualified and
experienced and will bring to the Mac-Gray Board of Directors a
firm commitment to, and a very high respect for, corporate
governance and positioning
Mac-Gray for
increasing returns to stockholders. Our Nominees have the
stockholder orientation and focus and financial and operational
expertise to improve oversight of management, hold management
accountable and enhance corporate governance. Each of our
Nominees understands the role a board of directors is to set the
direction for the management of a company and hold management
accountable for executing on board-approved strategic plans. If
elected, our Nominees will be strong advocates for changes
necessary to position Mac-Gray for future growth and enhanced
stockholder value.
We are not seeking control of the Mac-Gray Board of Directors.
Our Nominees, if elected, will constitute a minority of the
members of the Board. We are seeking stockholder representation
in the boardroom so that our Nominees can work with other
current members of the Board and Mac-Gray’s senior
management to improve Mac-Gray’s corporate governance
policies and create stockholder value.
OUR
NOMINEES ARE COMMITTED TO CREATING VALUE FOR ALL
STOCKHOLDERS
We are interested in enhancing the value of the Mac-Gray common
stock for the benefit of all stockholders. Neither the TUC IVC
Group nor any of our Nominees has any current affiliation or
commercial dealings with Mac-Gray, its management or any member
of the Mac-Gray.
Our Nominees, if elected, will advocate for the exploration of
all alternatives to create stockholder value and a comprehensive
strategic review of opportunities available to Mac-Gray. These
alternatives and opportunities may relate to operating
strategies, capital allocation strategies, dividend payment
rate, potential acquisitions and the potential sale of Mac-Gray.
Our Nominees do not have pre-determined, specific plans with
respect to the alternatives and opportunities. Instead, our
Nominees, if elected, will review information available to
directors with fresh viewpoints and work with
Mac-Gray’s other directors to implement strategic
alternatives designed to create stockholder value.
As discussed above, our Nominees will, if elected, constitute a
minority of the Board of Directors and will not be able to adopt
any measures without the support of at least some members of the
current Board. Accordingly, our Nominees should be expected to
articulate ideas relating to Mac-Gray’s strategy to
create stockholder value with the rest of the Mac-Gray Board
members.
YOU DESERVE A BOARD THAT LISTENS TO THE VIEWS OF, AND IS
ACCOUNTABLE TO, YOU, ITS STOCKHOLDERS
Over the past several years, the Mac-Gray stockholders have
attempted to communicate their concerns about Mac-Gray’s
corporate governance and the lack of accountability of the
Mac-Gray Board. At the 2010 annual meeting of Mac-Gray
stockholders, a Mac-Gray stockholder submitted a proposal to
declassify the Mac-Gray Board of Directors. This proposal was
approved by the affirmative vote a majority of the votes cast at
the meeting. In addition, Kovpak II, LLC submitted a
stockholder proposal at the 2010 annual meeting of Mac-Gray
stockholders urging the Mac-Gray Board of Directors to take all
necessary steps to redeem promptly all outstanding preferred
stock purchase rights issued under Mac-Gray’s Shareholder
Rights Agreement. This proposal was also approved by the
affirmative vote of a majority of the votes cast at the
meeting. Despite the vote of Mac-Gray stockholders on these
proposals, the Mac-Gray Board to date has not declassified the
Board or redeemed the rights.
12
Our Nominees’ greatest loyalty will be to the stockholders
of Mac-Gray. Our Nominees, if elected, will support the
declassification of Mac-Gray’s Board, the redemption of the
rights under Mac-Gray’s Shareholder Right Agreement and
other changes that are generally regarded as “best
practices” and would improve corporate governance at
Mac-Gray and the accountability of the Mac-Gray Board.
WE BELIEVE THAT IT IS TIME FOR CHANGE
Two of the three Mac-Gray incumbent directors whose term expires
at the Annual Meeting (Thomas E. Bullock and Alastair G.
Robertson) serve on the Governance and Nominating Committee of
the Mac-Gray Board. According to Mac-Gray’s Proxy
Statement, this Committee assists the Board in finding and
nominating qualified people for election to the Board, assessing
and evaluating the Board’s effectiveness and establishing,
implementing and overseeing Mac-Gray’s governance programs
and policies.
The third Mac-Gray incumbent director whose term expires at the
Annual Meeting, William F. Meagher, Jr., has attained the
mandatory retirement age of 70 required under Mac-Gray’s
Corporate Governance Guidelines. However, just as the Mac-Gray
Board of Directors did with Mr. Edward G. McCauley (the
third member of the Governance and Nominating Committee) last
year, the Mac-Gray Board has approved an exception to the
mandatory retirement age for Mr. Meagher.
We believe that it is time for change on the Mac-Gray Board and
that it would benefit from the fresh viewpoints and new energy
that our Nominees would bring to the Mac-Gray Board. With no
prior decisions to justify, our Nominees will not hesitate to
propose, if warranted, changes in the way that business and
policies have been conducted in the past. Our Nominees will ask
tough questions and work tirelessly with the other members of
the Mac-Gray Board to take steps to improve corporate governance
and create stockholder value.
WE STRONGLY URGE YOU TO VOTE FOR THE ELECTION OF RICHARD
DREXLER, MICHAEL J. SOENEN AND BENJAMIN KOVLER IN OPPOSITION TO
MAC-GRAY’S THREE INCUMBENT DIRECTORS WHOSE TERMS EXPIRE AT
THE ANNUAL MEETING.
PROPOSAL 2 —
AMENDMENT TO THE 2009 MAC-GRAY CORPORATION STOCK
OPTION AND INCENTIVE PLAN
At the Annual Meeting, according to Mac-Gray’s Proxy
Statement, stockholders of Mac-Gray will be asked to vote to
approve the amendment to the 2009 Mac-Gray Corporation Stock
Option and Incentive Plan (the “2009 Plan”). For more
information regarding this proposal, please see the related
disclosure in
Mac-Gray’s
Proxy Statement.
We make no recommendation with respect to how you should vote on
this Proposal. However, for the reasons discussed below, our
Nominees, if elected, would work with other members of the Board
to make sure that Mac-Gray’s stock-based incentive programs
balance the need for employee incentives with the potential
overall dilution to stockholders.
We believe that the stock-based incentive programs play an
important role in Mac-Gray’s ability to attract, retain and
motivate highly qualified employees. When used appropriately,
equity incentives can be an effective tool in aligning employee
and stockholder interests and motivating and providing effective
incentives to employees. Unfortunately, we are concerned that
the Mac-Gray Board (particularly in the last several years) has
not appropriately balanced the benefits of equity grants with
the overall dilution to stockholders resulting from such grants.
The Mac-Gray Board first submitted the 2009 Plan for stockholder
approval on May 8, 2009 at
Mac-Gray’s
2009 annual meeting of stockholders. The 2009 Plan provided for
a maximum of 1,500,000 shares of common stock to be issued
thereunder. This constituted approximately 11.1% of the
13,443,303 shares of common stock reported to be
outstanding as of March 26, 2009 in Mac-Gray’s proxy
statement for the 2009 annual meeting of stockholders.
The very next year, on May 26, 2010, the Mac-Gray Board
submitted for stockholder approval an amendment to the 2009 Plan
to increase the number of shares of common stock authorized or
issuance under
13
the Plan from 1,500,000 to 2,300,000. This 800,000 share
increase constituted approximately 5.8% of the
13,780,386 shares of common stock reported to be
outstanding on April 7, 2010 in Mac-Gray’s proxy
statement for the 2010 annual meeting of stockholders. In the
proxy statement, Mac-Gray disclosed that the additional shares
would be for new hires, directors and existing employees during
2010 and 2011.
Now, for the second year in a row, the Mac-Gray Board is asking
stockholders to approve an increase in the number of shares of
common stock available for issuance under the 2009 Plan. This
time Mac-Gray’s Board is seeking approval for another
1,800,000 shares from 2,300,000 shares to
4,100,000 shares. This 1,800,000 share increase would
constitute approximately 12.7% of the 14,216,590 shares of
common stock reported to be outstanding as of April 4, 2011
in Mac-Gray’s Proxy Statement. Mac-Gray’s Board now
says that these increased shares would be for grants during
2011, 2012 and 2013.
The need for additional shares for equity grants in 2011 is
contrary to Mac-Gray’s statement in last year’s proxy
statement that last year’s 800,000 shares increase
would be used for new hires, directors and existing employees
during 2010 and 2011. According to footnote 16 in the
consolidated financial statements included in Mac-Gray’s
2010
Form 10-K,
as of December 31, 2010, 938,761 shares remain
available for issuance (of which 299,520 shares of common
stock have been committed to future restricted stock awards for
which performance criteria have not been established). We
believe that the Board should explain why the shares remaining
as reported in Mac-Gray’s 2010
Form 10-K
are not sufficient to cover equity grants until next year’s
annual meeting of stockholders. This is particularly true since
Mac-Gray’s
revenues and number of employees decreased as of
December 31, 2010 compared to December 31, 2009.
Our Nominees, if elected to the Board, will seek to make sure
that the Board properly structures stock-based incentive
programs that balance the need for employee incentives with the
potential overall dilution to stockholders. This involves
monitoring the number of equity awards made each year, as well
as structuring such awards with appropriate time and performance
vesting criteria. Specific adjustments to Mac-Gray’s
stock-based incentive programs to be recommended by our
Nominees, if elected, will be based on our Nominees’ review
of relevant information available to directors, including
reports by compensation consultants, and discussions with other
Mac-Gray directors.
PROPOSAL 3 —
STOCKHOLDER PROPOSAL ENTITLED:
“SHAREHOLDER PROPOSAL TO DECLASSIFY THE BOARD OF
DIRECTORS”
Mac-Gray has received a stockholder proposal from Darlington
Partners, L.P. (“Darlington”), 300 Drakes Landing
Road, Suite 250, Greenbrae, CA 94904. Darlington has
requested that Mac-Gray include the following proposal and
supporting statement in its proxy statement for the Annual
Meeting, and if properly presented this proposal will be voted
on at the Annual Meeting. The stockholder proposal is quoted
verbatim in italics below.
Stockholder
Proposal
“RESOLVED, that the stockholders of Mac-Gray Corporation
(the “Company”) request that the board of directors,
in compliance with applicable law, take the steps necessary to
reorganize the board of directors into one class subject to
election each year. The implementation of this proposal should
not affect the unexpired terms of directors elected to the board
at or prior to the 2011 annual meeting.
Our
Reasons for Urging a Vote FOR this Proposal
We believe accountability of the board of directors to the
Company’s shareholders is of paramount importance. This
proposal seeks to reorganize the Company’s board of
directors so that each director will stand before the
shareholders for re-election each year. We hope to eliminate the
Company’s so-called “classified board,” whereby
the directors are divided into three classes, each serving a
three-year term. Under the current structure, shareholders can
only vote on a portion of the board of directors at any given
time.
If this proposal passes, shareholders might have the
opportunity to register their views at each annual
meeting — on the performance of the board as a whole
and of each director as an individual. We believe that
14
such annual accountability will serve to keep directors
closely focused on the performance of top executives and on
increasing shareholder value.
A similar non-binding proposal to declassify the board
received majority support from shareholders at the
Company’s 2010 annual meeting, but the board chose to
ignore that vote and retain a classified board. That
declassification proposal also received endorsements from three
of the leading independent proxy advisory firms, including
Institutional Shareholder Services (“ISS”), which
stated in its recommendation report that: “Managements
argue that staggered boards provide continuity and stability,
but empirical evidence has suggested that such a structure is
not in shareholders’ best interests from a financial
perspective... The ability to elect directors is the single most
important use of the shareholder franchise, and all directors
should be accountable on an annual basis. A classified board can
entrench management and effectively preclude most takeover
bids...”
We believe evidence shows that the trend in corporate
governance is moving toward declassified boards for large and
small companies alike. Shareholder proposals urging annual
elections of all directors received, on average, greater than
58% of the vote in each of the past four years, according to the
ISS 2009 and 2010 Postseason Reports. In addition, numerous
large- and small-cap companies have voluntarily declassified
their boards in recent years. These include such respected
companies as: Boston Scientific Corporation, EMC Corporation,
Staples Inc. and Whirlpool Corporation.
We believe the Company should be a leader in corporate
governance policy. If the Company were to take the steps
necessary to declassify its board of directors, it would be a
strong statement that this Company is committed to good
corporate governance.
We urge you to join us in voting to declassify the election
of directors, as a powerful tool to improve director
accountability and financial performance. We urge you to vote
FOR this proposal.”
Our
Reasons for Urging a Vote FOR this Proposal
We believe that the election of directors is the primary avenue
for stockholders to influence corporate governance and to hold
management accountable for its implementation of those policies.
We believe that annual elections of the entire board promote
accountability. They also foster communications between
investors and their elected representatives, directors.
The Mac-Gray Board is divided into three classes with each
director serving a three-year term. Eliminating the classified
board would require each director to stand for election annually
and would give stockholders an opportunity to register their
views on the performance of the board collectively and on each
director individually every year.
We believe that the annual election of directors is one of the
best methods available to stockholders to ensure that Mac-Gray
will be managed in a manner that is in their interests. At
Mac-Gray’s 2010 annual meeting, a majority of
Mac-Gray’s stockholders supported a similar non-binding
proposal to declassify the board. Unfortunately, despite the
vote of Mac-Gray’s stockholders, the Mac-Gray Board has
chosen to retain a classified board.
We believe that the refusal of Mac-Gray’s Board to
declassify the board is contrary to a trend in corporate
governance for public companies that is moving toward
declassified boards. Shareholder proposals urging annual
elections of all directors received, on average, greater than
58% of the vote in each of the past four years, according to the
Institutional Shareholder Services 2009 and 2010 Post Season
Reports.
Accordingly, we urge you to vote FOR the declassification
of Mac-Gray’s Board in order to improve director
accountability.
Our Nominees, if elected, will support the declassification of
the Mac-Gray Board.
WE STRONGLY URGE YOU TO VOTE FOR PROPOSAL 3.
15
PROPOSAL 4 —
NON-BINDING, ADVISORY VOTE ON THE COMPENSATION OF
MAC-GRAY’S NAMED EXECUTIVE OFFICERS
At the Annual Meeting, according to Mac-Gray’s Proxy
Statement, stockholders of Mac-Gray will be asked to vote on a
non-binding, advisory basis on the compensation of
Mac-Gray’s Named Executive Officers. For more information
regarding this proposal, please see the related disclosure in
Mac-Gray’s Proxy Statement.
Our
Reasons for Urging a Vote AGAINST this Proposal
We have several concerns with Mac-Gray’s executive
compensation program. These concerns include:
|
|
|
| |
•
|
as discussed under PROPOSAL 2 above, our concern that the
Mac-Gray Board does not appropriately balance the benefits of
equity grants with the overall dilution to stockholders
resulting from such grants;
|
| |
| |
•
|
our belief that the Mac-Gray Board does not establish target
levels for financial and strategic objectives that result in
payments
and/or
vesting at appropriate levels of achievements (we note that
Mac-Gray’s Proxy Statement discloses that, with respect to
Mac-Gray’s Named Executive Officers, (i) restricted
stock units subject to vesting for the current year vested 100%,
(ii) the restricted stock unit excess annual grant for
fiscal year 2009 vested at the 100% level and (iii) the
restricted stock unit excess award grant for fiscal year 2010
vested at the 75% level); and
|
| |
| |
•
|
as discussed below, not only does Mac-Gray have employment
agreements with its Named Executive Officers, but it also has
severance agreements with each Named Executive Officer which
provide for severance payments in the event of termination of
employment following a change in control of
Mac-Gray.
|
As discussed above, each of Mac-Gray’s Named Executive
Officers has a Severance Agreement with Mac-Gray. According to
Mac-Gray’s Proxy Statement, the terms of the Severance
Agreements provide that if the executive officer’s
employment is terminated within twenty-four (24) months
following a “change in control” (as defined in the
Severance Agreement) of Mac-Gray (i) by Mac-Gray for any
reason (other than termination by Mac-Gray for cause or by
reason of death or disability) or (ii) by the executive
officer for “good reason” (as defined in the Severance
Agreement), then the executive officer will receive:
|
|
|
| |
•
|
a lump sum severance payment equal to two (2) times (2.99
for the CEO) the sum of (i) the executive officer’s
average annual base salary over the three (3) fiscal years
immediately prior to the terminating event (or the executive
officer’s annual base salary in effect immediately prior to
the change in control, if higher) and (ii) the executive
officer’s average annual short-term incentive compensation
over the three (3) fiscal years immediately prior to the
change in control (or the executive officer’s annual bonus
for the last fiscal year immediately prior to the change in
control, if higher);
|
| |
| |
•
|
continuation of certain benefits, including, without limitation,
health, dental and life insurance on the same terms and
conditions as though the executive officer had remained an
active employee, for the
24-month (or
36-month for
the CEO) severance period; and
|
| |
| |
•
|
payment by Mac-Gray of all reasonable legal and arbitration fees
and expenses incurred by the executive officer in obtaining or
enforcing any right or benefit provided by the Severance
Agreement, except in cases involving frivolous or bad faith
litigation.
|
We understand that providing reasonable severance benefits to a
limited number of senior executives after a change of control is
an appropriate element of an executive compensation program.
However, like many investors in public companies generally, we
are concerned with the cost of severance agreements (commonly
referred to as “golden parachutes”), especially those
that provide payments exceeding 200% of salary and bonus. Our
Nominees, if elected, will review relevant information available
to directors, including reports by compensation consultants, and
work with the other Mac-Gray directors so that any severance
arrangements entered into the future are at appropriate market
levels to attract and retain executives.
16
Accordingly, we urge you to vote AGAINST the compensation
of Mac-Gray’s Named Executive Officers.
Our Nominees, if elected to the Board, will seek to make sure
that the Board properly establishes and implements an
appropriate executive compensation program, including
appropriate equity grants as discussed under Proposal 2
above and appropriate severance benefits as discussed in this
Proposal 4.
WE STRONGLY URGE YOU TO VOTE AGAINST PROPOSAL 4.
PROPOSAL 5 —
NON-BINDING, ADVISORY VOTE ON THE FREQUENCY OF THE
STOCKHOLDER VOTE ON EXECUTIVE COMPENSATION
At the Annual Meeting, according to Mac-Gray’s Proxy
Statement, stockholders of Mac-Gray will be asked to on a
non-binding, advisory vote on the frequency of the stockholder
vote on executive compensation. For more information regarding
this proposal, please see the related disclosure in
Mac-Gray’s Proxy Statement.
Our
Reasons for Urging a Vote in Favor of Annual Votes on
Compensation
The Mac-Gray Board is recommending in the Mac-Gray Proxy
Statement that a non-binding, advisory vote on executive
compensation be held every two years.
We believe that an annual stockholder vote on executive
compensation is necessary to promote accountability and foster
appropriate communications between stockholders and directors.
As set forth under PROPOSAL 4 above, we have concerns about
Mac-Gray’s executive compensation program. Although the
Mac-Gray Board has to date not listened to the Mac-Gray’s
stockholders vote on certain matters such as declassifying the
Board of Directors or redeeming rights under its Shareholder
Rights Agreement (each of which was approved by a majority vote
of Mac-Gray stockholders at last year’s annual meeting), we
believe that an annual vote will allow stockholders to register
their views on executive compensation so that Mac-Gray’s
Board can take those views into account when implementing
Mac-Gray’s executive compensation policies.
Accordingly, we urge you to vote in favor of having executive
compensation voting every year.
WE STRONGLY URGE YOU TO VOTE IN FAVOR OF HAVING EXECUTIVE
COMPENSATION VOTING EVERY YEAR.
PROPOSAL 6 —
RATIFICATION OF THE SELECTION OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
At the Annual Meeting, according to Mac-Gray’s Proxy
Statement, stockholders of Mac-Gray will be asked to ratify the
election of PriceWaterhouseCoopers LLC as Mac-Gray’s
independent registered public accounting firm for the fiscal
year ended December 31, 2011. We make no recommendation
with respect to how you should vote on this proposal.
OTHER
PROPOSALS
We know of no other business to be presented at the Annual
Meeting. If any other matters should properly come before the
Annual Meeting, it is intended that the persons named on the
enclosed GOLD proxy card will vote that proxy on such other
matters in accordance with their discretion.
PARTICIPANTS
IN SOLICITATION OF PROXIES
The participants in our solicitation of proxies from
stockholders of Mac-Gray are TUC Investor Value Creation Group,
LLC, an Illinois limited liability company (the “TUC IVC
Group”), Kovpak II, LLC, a Delaware limited liability
company (“Kovpak”), Benjamin Kovler, Richard Drexler
and Michael Soenen. Mr. Kovler is the managing member of
the TUC IVC Group and the Chief Investment Officer of Kovpak.
17
Mr. Drexler is the Chairman of the Board and Chief
Executive Officer of Quality Products, Inc., a public company
involved in manufacturing. Mr. Soenen is a private investor.
The principal business address of TUC Investor Value Creation
Group, LLC, Kovpak II, LLC and Mr. Kovler is
875 N. Michigan, Suite 3400, Chicago, IL 60611.
The principal business address of Mr. Drexler is
711 N. McKinley Road, Suite 6, Lake Forest, IL
60045. The principal business address of Mr. Soenen is 1631
The Strand, Hermosa Beach, California 90254.
As of the date hereof, the TUC IVC Group is deemed to indirectly
beneficially own 389,553 shares of common stock of
Mac-Gray, representing approximately 2.75% of Mac-Gray’s
outstanding shares (based upon the 14,216,590 shares stated
to be outstanding as of the Record Date according to
Mac-Gray’s Proxy Statement). Mr. Kovler, by virtue of
his relationship to the TUC IVC Group and Kovpak, may be deemed
to indirectly beneficially own the shares which each of the TUC
IVC Group and Kovpak is deemed to beneficially own.
Mr. Kovler disclaims beneficial ownership with respect to
such shares except to the extent of his pecuniary interests
therein. Each of the TUC IVC Group, Kovpak and Mr. Kovler
has shared voting power and shared investment power with regard
to the 389,553 shares which the TUC IVC Group is deemed to
beneficially own. Each of Mr. Drexler and Mr. Soenen
does not own, and has never owned, beneficially or of record,
any shares of capital stock of Mac-Gray.
For information regarding purchase and sales of securities of
Mac-Gray by the Participants, including our Nominees, please see
Annex A attached hereto.
Other than as stated in this Proxy Statement or in any of the
Annexes attached hereto, (i) during the last 10 years,
no Participant has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors);
(ii) no Participant directly or indirectly beneficially
owns any securities of Mac-Gray; (iii) no Participant owns
any securities of Mac-Gray which are owned of record but not
beneficially; (iv) no Participant has purchased or sold any
securities of Mac-Gray during the past two years; (v) no
part of the purchase price or market value of the securities of
Mac-Gray owned by any Participant is represented by funds
borrowed or otherwise obtained for the purpose of acquiring or
holding such securities; (vi) no Participant is, or within
the past year was, a party to any contract, arrangement or
understanding with any persons with respect to any securities of
Mac-Gray, including, but not limited to, joint ventures, loan or
option arrangements, puts or calls, guarantees against loss or
guarantees of profits, divisions of losses or profits, or the
giving or withholding of proxies; (vii) no associate of any
Participant owns beneficially, directly or indirectly, any
securities of Mac-Gray; (viii) no Participant owns
beneficially, directly or indirectly, any securities of any
parent or subsidiary of Mac-Gray; (ix) no Participant nor
any of their associates was a party to any transaction, or
series of similar transactions, since the beginning of
Mac-Gray’s last fiscal year, or is a party to any currently
proposed transaction, or series of similar transactions, to
which Mac-Gray or any of its subsidiaries was or is a party, in
which the amount involved exceeds $120,000; (x) no
Participant nor any of their associates has any arrangement or
understanding with any person with respect to any future
employment by Mac-Gray or its affiliates, or with respect to any
future transactions to which Mac-Gray or any of its affiliates
will or may be a party; and (xi) no person, including each
Participant, who is a party to an arrangement or understanding
pursuant to which our Nominees are proposed to be elected, has a
substantial interest, direct or indirect, by security holdings
or otherwise, in any matter to be acted on at the Annual
Meeting, other than an interest, if any, as a stockholder of
Mac-Gray.
COST AND
METHOD OF SOLICITATION
Solicitation of proxies pursuant to this Proxy Statement shall
be made by the Participants. The TUC IVC Group will bear the
cost of our solicitation.
The TUC IVC Group has entered into an agreement with Innisfree
M&A Incorporated (“Innisfree”) for solicitation
and advisory services in connection with our solicitation, for
which Innisfree is to receive a fee not to exceed $75,000 plus
reimbursement for its reasonable
out-of-pocket
expenses. The TUC IVC Group has agreed to indemnify Innisfree
against certain liabilities and expenses, including certain
liabilities under the federal securities laws. Insofar as
indemnification for liabilities arising under the federal
securities laws may
18
be permitted to Innisfree pursuant to the foregoing provisions,
we have been informed, that in the opinion of the SEC, such
indemnification is against public policy and is therefore
unenforceable. Proxies may be solicited by mail, courier
services, Internet, advertising, telephone or telecopier or in
person. It is anticipated that Innisfree will employ
approximately 40 persons to solicit proxies from Mac-Gray
stockholders for the Annual Meeting. The Participants have not
employed, and they will not employ, any employees to solicit
proxies from Mac-Gray stockholders for the Annual Meeting. The
total expenditures in furtherance of, or in connection with, our
solicitation of proxies is estimated to be $250,000 in total.
These expenses include fees and expenses for attorneys, proxy
solicitors, printing, postage, filing expenses and other costs
incidental to our solicitation. Of this estimated amount,
approximately $100,000 has been spent to date. The actual costs
and expenses could be materially different than the estimated
amounts and, in particular, could be substantially higher if for
any reason litigation is instituted in connection with the
matters related to this proxy solicitation.
The TUC IVC Group intends to seek reimbursement for the costs
and expenses associated with the proxy solicitation in the event
that any of the Nominees are elected, but does not intend to
submit the issue of reimbursement to a vote of security holders.
STOCKHOLDER
PROPOSALS
According to Mac-Gray’s Proxy Statement, any stockholder
proposals submitted pursuant to Exchange Act
Rule 14a-8
for presentation at Mac-Gray’s 2011 annual meeting must be
received by Mac-Gray on or before December 20, 2011 to be
eligible for inclusion in Mac-Gray’s proxy statement and
form of proxy to be distributed by the Board in connection with
that meeting. Any such proposal should be mailed to: Secretary,
Mac-Gray Corporation, 404 Wyman Street, Suite 400, Waltham,
MA 02451.
According to Mac-Gray’s Proxy Statement, any stockholder
proposals (including recommendations of nominees for election to
the Board) intended to be presented at the Company’s 2011
annual meeting, other than a stockholder proposal submitted
pursuant to Exchange Act
Rule 14a-8,
must be received in writing at the principal executive office of
Mac-Gray not later than February 18, 2012 and not earlier
than January 19, 2012, together with all supporting
documentation required by Mac-Gray’s Bylaws. Proxies
solicited by the Board will confer discretionary voting
authority with respect to these proposals, subject to SEC rules
governing the exercise of this authority.
19
ADDITIONAL
INFORMATION
According to Mac-Gray’s Proxy Statement, the mailing
address of the principal executive offices of
Mac-Gray is
404 Wyman Street, Suite 400, Waltham, MA 02415.
Please see Annex B for information regarding persons who
beneficially own more than 5% of Mac-Gray’s shares and the
ownership of Mac-Gray shares by the directors and management of
Mac-Gray.
As noted in relevant places in this Proxy Statement, certain of
the information concerning Mac-Gray contained in this Proxy
Statement and the Annexes attached hereto has been taken from,
or is based upon, Mac-Gray’s publicly available
information, including Mac-Gray’s Proxy Statement. This
information consists of the sections in this Proxy Statement
entitled: “Proposal Two — Amendment to the
2009 Mac-Gray Corporation Stock Option and Incentive Plan,”
“Proposal 3 — Stockholder
Proposal Entitled: Shareholder Proposal to Reclassify the
Board of Directors,” “Proposal 4 —
Non-Binding, Advisory Vote on the Compensation of
Mac-Gray’s Named Executive Offices,”
“Proposal 5 — Non-Binding, Advisory Vote on
the Frequency of the Stockholder Vote on Executive
Compensation,” Proposal 6 — Ratification of
the Selection of Independent Registered Public Accounting
Firm,” and “Annex B,” as well as additional
information in this Proxy Statement which is specifically
designated as being taken from, or based upon, Mac-Gray’s
Proxy Statement. This information is included in this Proxy
Statement because it is our understanding that the staff of the
Division of Corporation Finance of the SEC interprets the proxy
rules under the Exchange Act to require that such information be
included in this Proxy Statement. The TUC IVC Group was not
involved in the preparation of Mac-Gray’s Proxy Statement,
and has not independently verified any of the statements
contained Mac-Gray’s Proxy Statement or any of its other
filings with the SEC.
TUC INVESTOR VALUE CREATION GROUP, LLC
KOVPAK II, LLC
RICHARD DREXLER
MICHAEL J. SOENEN
BENJAMIN KOVLER
Date: April 21, 2011
20
ANNEX A —
SUMMARY OF PURCHASES AND
SALES OF SECURITIES OF MAC-GRAY
The following list indicates the date of each purchase and sale
of common stock of Mac-Gray, made by the Participants, as well
as the quantity of shares and aggregate U.S. dollar amount
in each such purchase and sale. Mr. Kovler may be deemed to
indirectly beneficially own the shares of common stock purchased
or sold by the TUC Investor Value Creation Group, LLC, Kovpak
II, LLC and the Blum-Kovler Foundation in the list below.
| |
|
|
|
|
|
|
|
|
|
|
|
Quantity of
|
|
U.S. Dollar
|
|
Trade Date
|
|
Shares
|
|
Amount
|
|
|
|
TUC Investor Value Creation Group, LLC
|
|
Purchases:
|
|
|
|
|
|
|
|
|
|
3/2/2011
|
|
|
500.00
|
|
|
$
|
7,487.90
|
|
|
3/28/2011
|
|
|
3,000.00
|
|
|
$
|
46,691.40
|
|
|
4/5/2011
|
|
|
3,000.00
|
|
|
$
|
49,123.20
|
|
|
4/6/2011
|
|
|
1,700.00
|
|
|
$
|
28,180.05
|
|
|
4/7/2011
|
|
|
3,000.00
|
|
|
$
|
49,869.00
|
|
|
4/8/2011
|
|
|
25,000.00
|
|
|
$
|
411,747.50
|
|
|
4/12/2011
|
|
|
5,000.00
|
|
|
$
|
79,995.00
|
|
|
4/13/2011
|
|
|
6,000.00
|
|
|
$
|
96,081.00
|
|
|
4/14/2011
|
|
|
4,000.00
|
|
|
$
|
63,677.20
|
|
|
4/15/2011
|
|
|
5,000.00
|
|
|
$
|
79,941.00
|
|
|
4/18/2011
|
|
|
3,000.00
|
|
|
$
|
47,637.90
|
|
|
4/19/2011
|
|
|
2,000.00
|
|
|
$
|
31,818.40
|
|
|
4/20/2011
|
|
|
1,000.00
|
|
|
$
|
15,998.90
|
|
|
|
|
Benjamin Kovler
|
|
Purchases:
|
|
|
|
|
|
|
|
|
|
6/30/1999
|
|
|
300.00
|
|
|
$
|
2,606.25
|
|
|
12/19/2008
|
|
|
500.00
|
|
|
$
|
3,600.00
|
|
|
1/27/2009
|
|
|
100.00
|
|
|
$
|
658.00
|
|
|
2/5/2009
|
|
|
5.00
|
|
|
$
|
31.50
|
|
|
2/9/2009
|
|
|
400.00
|
|
|
$
|
2,540.00
|
|
|
2/20/2009
|
|
|
400.00
|
|
|
$
|
2,440.00
|
|
|
3/10/2009
|
|
|
500.00
|
|
|
$
|
2,750.00
|
|
|
3/11/2009
|
|
|
500.00
|
|
|
$
|
2,700.00
|
|
|
3/12/2009
|
|
|
400.00
|
|
|
$
|
2,100.00
|
|
|
4/9/2009
|
|
|
700.00
|
|
|
$
|
3,570.00
|
|
|
4/9/2009
|
|
|
350.00
|
|
|
$
|
1,785.00
|
|
|
4/14/2009
|
|
|
500.00
|
|
|
$
|
2,535.00
|
|
|
4/15/2009
|
|
|
2,000.00
|
|
|
$
|
10,200.00
|
|
|
4/15/2009
|
|
|
2,000.00
|
|
|
$
|
10,200.00
|
|
|
4/15/2009
|
|
|
500.00
|
|
|
$
|
2,540.00
|
|
|
4/16/2009
|
|
|
500.00
|
|
|
$
|
2,510.00
|
|
|
4/20/2009
|
|
|
700.00
|
|
|
$
|
3,953.00
|
|
|
4/22/2009
|
|
|
200.00
|
|
|
$
|
1,160.00
|
|
|
5/6/2009
|
|
|
8,000.00
|
|
|
$
|
64,534.40
|
|
|
5/7/2009
|
|
|
4,200.00
|
|
|
$
|
37,040.22
|
|
A-1
| |
|
|
|
|
|
|
|
|
|
|
|
Quantity of
|
|
U.S. Dollar
|
|
Trade Date
|
|
Shares
|
|
Amount
|
|
|
|
5/18/2009
|
|
|
2,648.00
|
|
|
$
|
24,534.51
|
|
|
5/20/2009
|
|
|
200.00
|
|
|
$
|
1,940.00
|
|
|
5/20/2009
|
|
|
600.00
|
|
|
$
|
5,819.99
|
|
|
6/8/2009
|
|
|
2,500.00
|
|
|
$
|
25,672.50
|
|
|
6/9/2009
|
|
|
500.00
|
|
|
$
|
5,373.00
|
|
|
6/22/2009
|
|
|
1,000.00
|
|
|
$
|
12,505.00
|
|
|
6/22/2009
|
|
|
1,000.00
|
|
|
$
|
12,505.00
|
|
|
9/4/2009
|
|
|
1,000.00
|
|
|
$
|
9,895.00
|
|
|
9/8/2009
|
|
|
2,700.00
|
|
|
$
|
26,829.90
|
|
|
9/9/2009
|
|
|
42.00
|
|
|
$
|
409.92
|
|
|
9/10/2009
|
|
|
4,900.00
|
|
|
$
|
48,316.94
|
|
|
9/11/2009
|
|
|
300.00
|
|
|
$
|
2,940.00
|
|
|
2/28/2011
|
|
|
3,000.00
|
|
|
$
|
47,623.20
|
|
|
3/1/2011
|
|
|
1,058.00
|
|
|
$
|
16,881.55
|
|
|
3/3/2011
|
|
|
4,000.00
|
|
|
$
|
63,410.40
|
|
|
3/3/2011
|
|
|
500.00
|
|
|
$
|
7,850.00
|
|
|
3/4/2011
|
|
|
1,500.00
|
|
|
$
|
23,491.80
|
|
|
3/4/2011
|
|
|
1,500.00
|
|
|
$
|
23,249.40
|
|
|
3/7/2011
|
|
|
1,000.00
|
|
|
$
|
15,669.30
|
|
|
3/7/2011
|
|
|
39.00
|
|
|
$
|
612.50
|
|
|
3/7/2011
|
|
|
39.00
|
|
|
$
|
612.69
|
|
|
3/8/2011
|
|
|
200.00
|
|
|
$
|
3,144.00
|
|
|
3/9/2011
|
|
|
3,300.00
|
|
|
$
|
52,437.00
|
|
|
3/10/2011
|
|
|
2,000.00
|
|
|
$
|
29,681.20
|
|
|
3/10/2011
|
|
|
4,000.00
|
|
|
$
|
59,536.00
|
|
|
3/10/2011
|
|
|
500.00
|
|
|
$
|
7,495.00
|
|
|
3/11/2011
|
|
|
1,000.00
|
|
|
$
|
15,064.70
|
|
|
3/11/2011
|
|
|
2,000.00
|
|
|
$
|
28,500.00
|
|
|
3/11/2011
|
|
|
100.00
|
|
|
$
|
1,482.99
|
|
|
3/11/2011
|
|
|
750.00
|
|
|
$
|
11,279.25
|
|
|
3/11/2011
|
|
|
400.00
|
|
|
$
|
5,987.96
|
|
|
3/11/2011
|
|
|
436.00
|
|
|
$
|
6,335.04
|
|
|
3/11/2011
|
|
|
564.00
|
|
|
$
|
8,194.92
|
|
|
3/11/2011
|
|
|
400.00
|
|
|
$
|
5,983.96
|
|
|
3/11/2011
|
|
|
100.00
|
|
|
$
|
1,497.00
|
|
|
3/16/2011
|
|
|
100.00
|
|
|
$
|
1,415.00
|
|
|
3/17/2011
|
|
|
400.00
|
|
|
$
|
5,724.00
|
|
|
3/18/2011
|
|
|
731.00
|
|
|
$
|
10,623.33
|
|
|
3/21/2011
|
|
|
100.00
|
|
|
$
|
1,481.00
|
|
|
3/21/2011
|
|
|
400.00
|
|
|
$
|
5,932.00
|
|
|
4/5/2011
|
|
|
200.00
|
|
|
$
|
3,276.00
|
|
|
Sales:
|
|
|
|
|
|
|
|
|
|
2/8/2007
|
|
|
(200.00
|
)
|
|
$
|
2,720.00
|
|
|
2/9/2007
|
|
|
(100.00
|
)
|
|
$
|
1,360.00
|
|
A-2
| |
|
|
|
|
|
|
|
|
|
|
|
Quantity of
|
|
U.S. Dollar
|
|
Trade Date
|
|
Shares
|
|
Amount
|
|
|
|
6/26/2009
|
|
|
(1,000.00
|
)
|
|
$
|
13,750.00
|
|
|
7/8/2009
|
|
|
(800.00
|
)
|
|
$
|
9,632.00
|
|
|
7/23/2009
|
|
|
(500.00
|
)
|
|
$
|
6,450.00
|
|
|
7/23/2009
|
|
|
(1,000.00
|
)
|
|
$
|
12,650.00
|
|
|
7/23/2009
|
|
|
(500.00
|
)
|
|
$
|
6,550.00
|
|
|
9/22/2009
|
|
|
(200.00
|
)
|
|
$
|
2,404.00
|
|
|
2/18/2010
|
|
|
(200.00
|
)
|
|
$
|
2,058.00
|
|
|
2/19/2010
|
|
|
(700.00
|
)
|
|
$
|
7,133.00
|
|
|
2/25/2010
|
|
|
(600.00
|
)
|
|
$
|
6,246.00
|
|
|
3/8/2010
|
|
|
(1,000.00
|
)
|
|
$
|
10,600.00
|
|
|
3/15/2010
|
|
|
(1,000.00
|
)
|
|
$
|
11,000.00
|
|
|
3/29/2010
|
|
|
(936.00
|
)
|
|
$
|
10,492.56
|
|
|
3/30/2010
|
|
|
(200.00
|
)
|
|
$
|
2,248.00
|
|
|
4/5/2010
|
|
|
(900.00
|
)
|
|
$
|
10,251.00
|
|
|
4/6/2010
|
|
|
(900.00
|
)
|
|
$
|
10,818.00
|
|
|
4/7/2010
|
|
|
(100.00
|
)
|
|
$
|
1,216.00
|
|
|
4/29/2010
|
|
|
(200.00
|
)
|
|
$
|
2,458.00
|
|
|
5/12/2010
|
|
|
(176.00
|
)
|
|
$
|
2,191.20
|
|
|
9/13/2010
|
|
|
(1,000.00
|
)
|
|
$
|
12,200.00
|
|
|
9/20/2010
|
|
|
(40.00
|
)
|
|
$
|
500.00
|
|
|
10/6/2010
|
|
|
(500.00
|
)
|
|
$
|
6,250.00
|
|
|
11/4/2010
|
|
|
(1,000.00
|
)
|
|
$
|
12,500.00
|
|
|
11/4/2010
|
|
|
(1,000.00
|
)
|
|
$
|
12,834.28
|
|
|
11/4/2010
|
|
|
(1,000.00
|
)
|
|
$
|
12,834.28
|
|
|
11/22/2010
|
|
|
(100.00
|
)
|
|
$
|
1,388.00
|
|
|
11/24/2010
|
|
|
(300.00
|
)
|
|
$
|
4,212.00
|
|
|
11/29/2010
|
|
|
(400.00
|
)
|
|
$
|
5,740.00
|
|
|
12/7/2010
|
|
|
(400.00
|
)
|
|
$
|
6,252.04
|
|
|
12/7/2010
|
|
|
(100.00
|
)
|
|
$
|
1,508.01
|
|
|
12/7/2010
|
|
|
(300.00
|
)
|
|
$
|
4,521.00
|
|
|
12/9/2010
|
|
|
(500.00
|
)
|
|
$
|
7,625.05
|
|
|
12/9/2010
|
|
|
(9.00
|
)
|
|
$
|
141.66
|
|
|
12/14/2010
|
|
|
(200.00
|
)
|
|
$
|
2,854.02
|
|
|
12/14/2010
|
|
|
(200.00
|
)
|
|
$
|
2,854.00
|
|
|
12/17/2010
|
|
|
(350.00
|
)
|
|
$
|
5,456.54
|
|
|
|
|
Blum-Kovler Foundation
|
|
Purchases:
|
|
|
|
|
|
|
|
|
|
6/6/2001
|
|
|
54,700.00
|
|
|
$
|
188,715.00
|
|
|
4/20/2009
|
|
|
150.00
|
|
|
$
|
820.01
|
|
|
5/5/2009
|
|
|
1,000.00
|
|
|
$
|
7,173.00
|
|
|
5/15/2009
|
|
|
3,182.00
|
|
|
$
|
28,075.42
|
|
|
5/26/2009
|
|
|
200.00
|
|
|
$
|
1,800.00
|
|
|
5/27/2009
|
|
|
5,000.00
|
|
|
$
|
45,000.00
|
|
A-3
| |
|
|
|
|
|
|
|
|
|
|
|
Quantity of
|
|
U.S. Dollar
|
|
Trade Date
|
|
Shares
|
|
Amount
|
|
|
|
5/28/2009
|
|
|
2,500.00
|
|
|
$
|
22,375.00
|
|
|
5/29/2009
|
|
|
400.00
|
|
|
$
|
3,564.00
|
|
|
3/21/2011
|
|
|
2,500.00
|
|
|
$
|
37,439.50
|
|
|
3/22/2011
|
|
|
8,800.00
|
|
|
$
|
133,416.80
|
|
|
3/23/2011
|
|
|
2,700.00
|
|
|
$
|
40,777.02
|
|
|
3/24/2011
|
|
|
2,000.00
|
|
|
$
|
30,484.00
|
|
|
4/5/2011
|
|
|
5,000.00
|
|
|
$
|
81,872.00
|
|
|
Sales:
|
|
|
|
|
|
|
|
|
|
11/5/2010
|
|
|
(300.00
|
)
|
|
$
|
3,920.01
|
|
|
11/8/2010
|
|
|
(100.00
|
)
|
|
$
|
1,313.00
|
|
|
11/9/2010
|
|
|
(6,732.00
|
)
|
|
$
|
87,566.49
|
|
|
|
|
Kovpak II, LLC
|
|
Purchases:
|
|
|
|
|
|
|
|
|
|
4/27/2001
|
|
|
2,000.00
|
|
|
$
|
7,300.00
|
|
|
5/31/2001
|
|
|
100,000.00
|
|
|
$
|
350,000.00
|
|
|
5/31/2001
|
|
|
25,000.00
|
|
|
$
|
92,500.00
|
|
|
3/13/2009
|
|
|
4,000.00
|
|
|
$
|
20,996.80
|
|
|
3/24/2009
|
|
|
100.00
|
|
|
$
|
500.00
|
|
|
3/26/2009
|
|
|
900.00
|
|
|
$
|
4,500.00
|
|
|
3/26/2009
|
|
|
300.00
|
|
|
$
|
1,500.00
|
|
|
3/26/2009
|
|
|
100.00
|
|
|
$
|
505.00
|
|
|
3/26/2009
|
|
|
1,000.00
|
|
|
$
|
5,150.00
|
|
|
3/26/2009
|
|
|
100.00
|
|
|
$
|
521.00
|
|
|
3/26/2009
|
|
|
1,000.00
|
|
|
$
|
5,250.00
|
|
|
3/31/2009
|
|
|
500.00
|
|
|
$
|
2,500.00
|
|
|
4/2/2009
|
|
|
104.00
|
|
|
$
|
528.32
|
|
|
4/2/2009
|
|
|
21.00
|
|
|
$
|
106.05
|
|
|
4/2/2009
|
|
|
200.00
|
|
|
$
|
1,016.00
|
|
|
4/2/2009
|
|
|
96.00
|
|
|
$
|
487.68
|
|
|
4/2/2009
|
|
|
100.00
|
|
|
$
|
515.00
|
|
|
4/3/2009
|
|
|
700.00
|
|
|
$
|
3,633.00
|
|
|
4/3/2009
|
|
|
200.00
|
|
|
$
|
1,020.00
|
|
|
4/7/2009
|
|
|
100.00
|
|
|
$
|
517.00
|
|
|
4/7/2009
|
|
|
200.00
|
|
|
$
|
1,030.00
|
|
|
4/7/2009
|
|
|
200.00
|
|
|
$
|
1,038.00
|
|
|
4/7/2009
|
|
|
100.00
|
|
|
|
515.00
|
|
|
4/7/2009
|
|
|
100.00
|
|
|
|
515.00
|
|
|
4/7/2009
|
|
|
200.00
|
|
|
|
1,028.00
|
|
|
4/8/2009
|
|
|
1,800.00
|
|
|
|
9,207.00
|
|
|
4/9/2009
|
|
|
3,000.00
|
|
|
$
|
15,311.00
|
|
|
4/13/2009
|
|
|
300.00
|
|
|
$
|
1,515.00
|
|
|
4/14/2009
|
|
|
5,000.00
|
|
|
$
|
25,428.50
|
|
|
4/14/2009
|
|
|
300.00
|
|
|
$
|
1,524.00
|
|
A-4
| |
|
|
|
|
|
|
|
|
|
|
|
Quantity of
|
|
U.S. Dollar
|
|
Trade Date
|
|
Shares
|
|
Amount
|
|
|
|
4/15/2009
|
|
|
10,000.00
|
|
|
$
|
50,000.00
|
|
|
4/15/2009
|
|
|
100.00
|
|
|
$
|
495.00
|
|
|
4/16/2009
|
|
|
3,500.00
|
|
|
$
|
17,635.80
|
|
|
4/16/2009
|
|
|
1,900.00
|
|
|
$
|
9,543.00
|
|
|
4/27/2009
|
|
|
100.00
|
|
|
$
|
688.00
|
|
|
4/27/2009
|
|
|
200.00
|
|
|
$
|
1,390.00
|
|
|
4/27/2009
|
|
|
200.00
|
|
|
$
|
1,390.00
|
|
|
4/28/2009
|
|
|
300.00
|
|
|
$
|
2,043.00
|
|
|
5/11/2009
|
|
|
2,000.00
|
|
|
$
|
18,000.00
|
|
|
5/12/2009
|
|
|
1,500.00
|
|
|
$
|
13,500.00
|
|
|
3/1/2011
|
|
|
2,500.00
|
|
|
$
|
40,185.00
|
|
|
3/2/2011
|
|
|
643.00
|
|
|
$
|
10,055.86
|
|
|
3/4/2011
|
|
|
5,800.00
|
|
|
$
|
90,834.96
|
|
|
3/7/2011
|
|
|
4,000.00
|
|
|
$
|
62,677.20
|
|
|
3/10/2011
|
|
|
10,000.00
|
|
|
$
|
148,406.00
|
|
|
3/10/2011
|
|
|
2,400.00
|
|
|
$
|
35,617.44
|
|
|
3/14/2011
|
|
|
1,800.00
|
|
|
$
|
25,979.58
|
|
|
3/18/2011
|
|
|
10,000.00
|
|
|
$
|
145,326.00
|
|
|
4/07/2011
|
|
|
9,700.00
|
|
|
$
|
161,243.10
|
|
|
Sales:
|
|
|
|
|
|
|
|
|
|
7/27/2006
|
|
|
(3,000.00
|
)
|
|
$
|
33,789.90
|
|
|
11/22/2006
|
|
|
(200.00
|
)
|
|
$
|
2,205.00
|
|
|
2/08/2007
|
|
|
(2,000.00
|
)
|
|
$
|
27,200.00
|
|
|
8/07/2007
|
|
|
(600.00
|
)
|
|
$
|
9,750.00
|
|
|
4/23/2009
|
|
|
(4,100.00
|
)
|
|
$
|
29,725.00
|
|
|
6/19/2009
|
|
|
(200.00
|
)
|
|
$
|
2,584.00
|
|
|
5/11/2010
|
|
|
(1,000.00
|
)
|
|
$
|
12,331.00
|
|
|
9/21/2010
|
|
|
(1,000.00
|
)
|
|
$
|
12,260.00
|
|
|
9/24/2010
|
|
|
(1,000.00
|
)
|
|
$
|
12,310.00
|
|
|
11/8/2010
|
|
|
(826.00
|
)
|
|
$
|
10,804.08
|
|
|
11/9/2010
|
|
|
(4,900.00
|
)
|
|
$
|
63,736.75
|
|
|
12/9/2010
|
|
|
(536.00
|
)
|
|
$
|
8,157.92
|
|
|
12/17/2010
|
|
|
(500.00
|
)
|
|
$
|
7,840.00
|
|
A-5
ANNEX B —
PRINCIPAL AND MANAGEMENT STOCKHOLDERS
The following table sets forth certain information with respect
to the beneficial ownership of
Mac-Gray’s
Common Stock as of April 4, 2011 by (i) each person
known by Mac-Gray to own beneficially five percent (5%) or more
of the outstanding shares of
Mac-Gray’s
Common Stock, (ii) each director of
Mac-Gray,
the CEO and each of the NEOs, and (iii) all directors and
executive officers of
Mac-Gray as
a group. Except as otherwise indicated,
Mac-Gray
believes that the beneficial owners of
Mac-Gray’s
Common Stock listed below, based on information furnished by
such owners, have sole investment and voting power with respect
to such shares, subject to community property laws where
applicable.
| |
|
|
|
|
|
|
|
|
|
|
|
Shares Beneficially
|
|
Percentage of Shares
|
|
Name of Beneficial Owner(1)
|
|
Owned(2)
|
|
Beneficially Owned
|
|
|
|
Stewart G. MacDonald, Jr.(3)(4)(5)
|
|
|
2,247,560
|
|
|
|
15.81
|
%
|
|
Cynthia V. Doggett(3)(6)
|
|
|
2,247,560
|
|
|
|
15.81
|
%
|
|
River Road Asset Management, LLC(7)
|
|
|
1,732,654
|
|
|
|
12.19
|
%
|
|
Peter C. Bennett, R. Robert Woodburn, Jr.(3)(4)(8)
|
|
|
1,222,276
|
|
|
|
8.60
|
%
|
|
Polaris Capital Management, Inc.(9)
|
|
|
1,194,526
|
|
|
|
8.40
|
%
|
|
Dimensional Fund Advisors LP(10)
|
|
|
1,157,507
|
|
|
|
8.14
|
%
|
|
Daniel W. MacDonald(3)(4)(11)
|
|
|
1,147,700
|
|
|
|
8.07
|
%
|
|
Sandra E. MacDonald(3)(4)(12)
|
|
|
995,746
|
|
|
|
7.00
|
%
|
|
Richard G. MacDonald(3)(13)
|
|
|
995,746
|
|
|
|
7.00
|
%
|
|
Rutabaga Capital Management(14)
|
|
|
740,767
|
|
|
|
5.21
|
%
|
|
Coliseum Capital Management
|
|
|
727,901
|
|
|
|
5.12
|
%
|
|
Gilbert M. Roddy, Jr.(3)(15)
|
|
|
301,047
|
|
|
|
2.12
|
%
|
|
Michael J. Shea(16)
|
|
|
267,169
|
|
|
|
1.88
|
%
|
|
Neil F. MacLellan, III(16)
|
|
|
229,701
|
|
|
|
1.62
|
%
|
|
Robert J. Tuttle(16)
|
|
|
138,568
|
|
|
|
*
|
|
|
Philip Emma(16)
|
|
|
118,574
|
|
|
|
*
|
|
|
Thomas E. Bullock(16)
|
|
|
103,186
|
|
|
|
*
|
|
|
Edward F. McCauley(16)
|
|
|
69,919
|
|
|
|
*
|
|
|
Christopher T. Jenny(16)
|
|
|
61,796
|
|
|
|
*
|
|
|
David W. Bryan(16)
|
|
|
59,092
|
|
|
|
*
|
|
|
Mary Ann Tocio(16)
|
|
|
55,042
|
|
|
|
*
|
|
|
William F. Meagher, Jr.(16)
|
|
|
32,567
|
|
|
|
*
|
|
|
Alastair G. Robertson(16)
|
|
|
26,306
|
|
|
|
*
|
|
|
Bruce C. Ginsberg(16)
|
|
|
16,739
|
|
|
|
*
|
|
|
All executive officers and directors as a group
(15 persons)(18)
|
|
|
3,554,524
|
|
|
|
25.00
|
%
|
|
|
|
|
(1) |
|
Unless otherwise indicated by footnote, the mailing address for
each stockholder and director is
c/o Mac-Gray
Corporation, 404 Wyman Street, Suite 400, Waltham, MA 02451. |
|
|
|
|
(2) |
|
Beneficial ownership is determined in accordance with the rules
of the SEC. In computing the number and percentage of shares of
Mac-Gray’s
Common Stock beneficially owned by a person, shares of
Mac-Gray’s
Common Stock subject to options held by that person that are
currently exercisable or exercisable within 60 days of
April 4, 2011 are deemed outstanding for computing the
percentage ownership of the person holding such options but are
not deemed to be outstanding for purposes of computing the
percentage for any other person. As of April 4, 2011, a
total of 14,216,590 shares of
Mac-Gray’s
Common Stock were issued and outstanding. |
B-1
|
|
|
|
(3) |
|
Mac-Gray and
certain stockholders of
Mac-Gray,
including: Stewart G. MacDonald, Jr., Sandra E. MacDonald,
Daniel W. MacDonald, The Evelyn C. MacDonald Family Trust f/b/o
Stewart G. MacDonald, Jr., The Evelyn C. MacDonald Family Trust
f/b/o Sandra E. MacDonald, The Evelyn C. MacDonald Family Trust
f/b/o of Daniel W. MacDonald (each of these
sub-trusts
under the The Evelyn C. MacDonald Family Trust is referred to
herein as a
“Sub-Trust,”
and collectively, the
“Sub-Trusts”),
The Stewart G. MacDonald, Jr. 1984 Trust (the “SGM
Trust”), The Daniel W. MacDonald Revocable Living Trust,
the New Century Trust, the Richard G. MacDonald 2004 GST
Non-Exempt Irrevocable Trust dated April 23, 2004 (the
“RGM Non-Exempt Trust”), the Richard G. MacDonald 2004
GST Exempt Irrevocable Trust dated April 23, 2004 (the
“RGM Exempt Trust”), The Whitney E. MacDonald GST
Trust-1997, The Jonathan S. MacDonald GST Trust-1997, The Robert
C. MacDonald GST Trust-1997, Cynthia V. Doggett and certain
other holders (who hold in the aggregate a de minimis
fraction of the issued and outstanding Common Stock of
Mac-Gray)
are parties to a Stockholders’ Agreement dated
June 26, 1997 (the “Stockholders’
Agreement”). The Stockholders’ Agreement gives the
parties thereto rights of first offer to purchase shares offered
for sale by another stockholder who is a party thereto, as well
as providing
Mac-Gray
with rights of second offer to purchase such shares. As a result
of the Stockholders’ Agreement, each of the parties thereto
may be deemed to beneficially own all of the shares of
Mac-Gray’s
Common Stock owned by the other parties thereto, although such
beneficial ownership is not reflected in the table of shares
beneficially owned. |
|
|
|
|
(4) |
|
A total of 1,222,276 shares are held in trust pursuant to
The Evelyn C. MacDonald Family Trusts (the “ECM
Trust”), the grantor of which is Ms. E. MacDonald. The
independent trustees (the “Independent Trustees”) of
the ECM Trust are Peter C. Bennett
(“Mr. Bennett”) and R. Robert Woodburn, Jr.
(“Mr. Woodburn”). In addition, each of
Mr. S. MacDonald, Ms. S. MacDonald and Mr. D.
MacDonald are trustees of the individual
Sub-Trust
under the ECM Trust of which such individual is a beneficiary.
Of the 1,222,276 shares held by the ECM Trust,
566,667 shares are held in a
Sub-Trust
for the benefit of Mr. S. MacDonald, 88,942 shares are
held in a
Sub-Trust
for the benefit of Ms. S. MacDonald, and
566,667 shares are held in a
Sub-Trust
for the benefit of Mr. D. MacDonald. The Independent
Trustees have voting power over the shares held by the ECM Trust
and the
Sub-Trusts,
and may be deemed to have beneficial ownership of such shares.
The three trustees of each
Sub-Trust
(including each of Mr. S. MacDonald, Ms. S. MacDonald
and Mr. D. MacDonald as to their own respective
Sub-Trust)
generally have the shared power to dispose of the shares
attributed to such
Sub-Trust
and, therefore, may be deemed to have beneficial ownership of
the shares held by such
Sub-Trust. |
|
|
|
|
(5) |
|
Includes (i) 626,608 shares held by the SGM Trust, of
which Mr. S. MacDonald serves as co-trustee and is sole
beneficiary, (ii) 301,047 shares held by the New
Century Trust, of which Mr. S. MacDonald is the grantor,
(iii) 566,667 shares held by the ECM Trust for the
benefit of Mr. S. MacDonald, of which Mr. S. MacDonald
serves as co-trustee and is the beneficiary,
(iv) 140,334 shares held by the wife of Mr. S.
MacDonald, (v) 146,702 shares held by the minor
children of Mr. S. MacDonald, (vi) 142,840 shares
held by Mr. S. MacDonald directly and
(vii) 323,362 shares issuable upon exercise of stock
options currently exercisable or exercisable within 60 days
of April 4, 2011 held by Mr. S. MacDonald. Mr. S.
MacDonald may replace the shares held by the New Century Trust
at any time with property of equivalent value and, therefore,
may be deemed to beneficially own all such shares. Mr. S.
MacDonald disclaims beneficial ownership of the shares described
in (ii), (iv) and (v) of this footnote. |
|
|
|
|
(6) |
|
Includes (i) 626,608 shares held by the SGM Trust, of
which Ms. Doggett serves as co-trustee with her husband,
Mr. S. MacDonald, who is also sole beneficiary,
(ii) 301,047 shares held by the New Century Trust, of
which Ms. Doggett serves as co-trustee,
(iii) 566,667 shares held by the ECM Trust for the
benefit of Mr. S. MacDonald, who serves as co-trustee and
is the beneficiary, (iv) 140,334 shares held by
Ms. Doggett directly, (v) 146,702 shares held by
Ms. Doggett’s minor children,
(vi) 142,840 shares held by Ms. Doggett’s
husband (Mr. S. MacDonald), and
(vii) 323,362 shares issuable upon exercise of stock
options currently exercisable or exercisable within 60 days
of April 4, 2011 held by Ms. Doggett’s husband
(Mr. S. MacDonald). The shares held in the New Century
Trust may be replaced at any time by the grantor, Mr. S.
MacDonald, with property of equivalent value. The SGM Trust is
revocable by the grantor, Mr. S. MacDonald.
Ms. Doggett disclaims beneficial ownership of all of the
shares described in this footnote except for the shares she
holds directly. |
B-2
|
|
|
|
(7) |
|
Information is based on a Schedule 13D/A filed with the SEC
on March 4, 2011 by River Road Asset Management, LLC
(“River Road”), which is located at 462 South Fourth
Street, Suite 1600, Louisville, Kentucky 40202. Of the
1,732,654 shares beneficially owned, River Road has sole
voting power over 1,281,164 shares. |
|
|
|
|
(8) |
|
Includes 1,222,276 shares held by the ECM Trust for which
Mr. Bennett and Mr. Woodburn serve as co-trustees and
share voting and dispositive power. Mr. Bennett and
Mr. Woodburn disclaim beneficial ownership of the shares
held by the ECM Trust. Mr. Bennett’s mailing address
is 111 Cushing Street, Hingham, Massachusetts 02043.
Mr. Woodburn’s mailing address is
c/o Edwards
Angell Palmer & Dodge LLP, 111 Huntington Avenue,
Boston, MA 02199. |
|
|
|
|
(9) |
|
Information is based on a Schedule 13G/A filed with the SEC
on January 31, 2011 by Polaris Capital Management, LLC
(“Polaris”), which is located at 125 Summer Street,
Suite 1470, Boston, Massachusetts 02110. Of the
1,194,526 shares beneficially owned, Polaris has sole
investment discretion with respect to 1,194,526 shares and
sole voting authority over 1,178,185 of such shares. |
| |
|
(10) |
|
Information is based on a Schedule 13G/A filed with the SEC
on February 11, 2011 by Dimensional Fund Advisors LP
(“Dimensional”). Dimensional, located at Palisades
West, Building One, 6300 Bee Cave Road, Austin, Texas 78746, is
an investment advisor registered under Section 203 of the
Investment Advisors Act of 1940. Dimensional furnishes
investment advice to four investment companies registered under
the Investment Company Act of 1940, and serves as investment
manager to certain other commingled group trusts and separate
accounts (the “Funds”). In its role as investment
adviser,
sub-adviser
and/or
manager, neither Dimensional or its subsidiaries possesses
voting and/or investment power over the securities reported
herein that are owned by the Funds, and may be deemed to be the
beneficial owner of the shares of the securities reported herein
held by the Funds. Of the 1,157,507 shares beneficially
owned, Dimensional has sole voting power over
1,139,577 shares, sole dispositive power over all shares
beneficially owned and shared voting and dispositive power over
none of such shares. All securities reported herein are owned by
the Funds. Dimensional disclaims beneficial ownership of such
securities. |
| |
|
(11) |
|
Includes (i) 566,667 shares held by the ECM Trust for
the benefit of Daniel W. MacDonald, of which Mr. D.
MacDonald serves as co-trustee and is the beneficiary, and
(ii) 581,033 shares held by The Daniel W. MacDonald
Revocable Living Trust, of which Mr. D. MacDonald serves as
the sole trustee. |
|
|
|
|
(12) |
|
Includes (i) 103,965 shares held by The Whitney E.
MacDonald GST Trust-1997, (ii) 103,965 shares held by
The Jonathan S. MacDonald GST Trust-1997,
(iii) 103,965 shares held by The Robert C. MacDonald
GST Trust-1997, (iv) 88,942 shares held by the ECM
Trust for the benefit of Ms. S. MacDonald, of which
Ms. S. MacDonald serves as co-trustee and is the
beneficiary, (v) 86,725 shares held by the RGM
Non-Exempt Trust, of which Richard G. MacDonald is the settlor
with the right to replace shares at any time with property of
equal value, (vi) 203,611 shares held by the RGM
Exempt Trust, of which Richard G. MacDonald is the settlor with
the right to replace shares at any time with property of equal
value, and (vii) 304,573 shares held by Ms. S.
MacDonald directly. Richard G. MacDonald (“Mr. R.
MacDonald”) is the sole trustee of each of the
aforementioned trusts (other than the ECM Trust, the RGM
Non-Exempt Trust and the RGM Exempt Trust) and may be deemed to
beneficially own all of such shares. The shares held by each of
The Whitney E. MacDonald GST Trust-1997, The Jonathan S.
MacDonald GST Trust-1997 and The Robert C. MacDonald GST
Trust-1997 (collectively, the “GST Trusts”), may be
replaced at any time by Ms. S. MacDonald, the grantor of
such trusts, with property of equivalent value and, therefore,
Ms. S. MacDonald may be deemed to beneficially own all such
shares. Ms. S. MacDonald disclaims beneficial ownership of
the shares held by the GST Trusts. |
|
|
|
|
(13) |
|
Includes (i) 103,965 shares held by The Whitney E.
MacDonald GST Trust-1997, (ii) 103,965 shares held by
The Jonathan S. MacDonald GST Trust-1997,
(iii) 103,965 shares held by The Robert C. MacDonald
GST Trust-1997, (iv) 88,942 shares held by the ECM
Trust for the benefit of Ms. S. MacDonald, the wife of
Mr. R. MacDonald, and of which Mr. R. MacDonald’s
wife serves as co-trustee, (v) 86,725 shares held by
the RGM Non-Exempt Trust, of which Mr. R. MacDonald is the
settlor with the right to replace shares at any time with
property of equal value, (vi) 203,611 shares held by
the RGM Exempt Trust, of which Mr. R. MacDonald is the
settlor with the right to replace shares at any time with
property of equal value, and (vii) 304,573 shares held
directly by Mr. R. MacDonald’s wife (Ms. S.
MacDonald). The shares held |
B-3
|
|
|
|
|
|
by each of the GST may be replaced at any time by Ms. S.
MacDonald, the grantor of such trusts, with property of
equivalent value and, therefore, Ms. S. MacDonald may be
deemed to beneficially own all such shares. Mr. R.
MacDonald is the sole trustee of each of the aforementioned
trusts (other than the ECM Trust, the RGM Non-Exempt Trust and
the RGM Exempt Trust) and may be deemed to beneficially own all
of the shares held by such trusts. Mr. R. MacDonald
disclaims beneficial ownership of all of the shares described in
this footnote. |
| |
|
(14) |
|
Information is based on a Schedule 13G/A filed with the SEC
on February 3, 2011 by Rutabaga Capital Management
(“Rutabaga”). Rutabaga, located at 64 Board Street,
Third Floor, Boston, Massachusetts 02109, is an investment
advisor in accordance with Section 240.13d-1(b)(1)(ii)(E). Of
the 740,767 shares beneficially owned, Rutabaga claims sole
voting power over 631,667 shares, shared voting power over
109,100 shares and sole power to dispose of all such shares. |
|
|
|
|
(15) |
|
Information is based on a Schedule 13G filed with the SEC
on March 30, 2011 by Coliseum Capital Management, LLC
(“CCM”), Coliseum Capital, LLC (“CC”),
Coliseum Capital Partners, L.P. (“CCP”), Blackwell
Partners, LLC (“Blackwell”), Adam Gray
(“Gray”) and Christopher Shackelton
(“Shackelton” and collectively, the “Coliseum
Reporting Persons”). The address of the Coliseum Reporting
Persons (other than Blackwell) is 767 Third Avenue,
35th Floor, New York, NY 10017 and the address of Blackwell
is
c/o DUMAC,
LLC, 406 Blackwell Street, Suite 300, Durham, NC 27701. The
Coliseum Reporting Persons may be deemed to be members of a
group with respect to the shares owned of record by CCP and
Blackwell. CCP is the record owner of 403,370 shares and
Blackwell is the record owner of 324,531 shares. Of the
727,901 shares beneficially owned by the Coliseum Reporting
Persons, CCM, Gray and Shackelton have shared voting and
dispositive power over all shares beneficially owned, CC and CCP
have shared voting and dispositive power over
403,370 shares beneficially owned, and Blackwell has shared
voting and dispositive power over 324,531 shares
beneficially owned. |
|
|
|
|
(16) |
|
All shares are held by the New Century Trust, of which
Mr. Roddy serves as co-trustee. The shares held by the New
Century Trust may be replaced at any time by Mr. S.
MacDonald, the grantor, with property of equivalent value.
Mr. Roddy disclaims beneficial ownership of all shares held
by the New Century Trust. Mr. Roddy’s mailing address
is
c/o Loring,
Wolcott & Coolidge, 230 Congress Street, Boston,
Massachusetts 02110. |
|
|
|
|
(17) |
|
Includes shares issuable upon the exercise of options which are
currently exercisable or exercisable within 60 days of
April 4, 2011 as follows: Mr. Shea
179,665 shares, Mr. MacLellan 134,062 shares;
Mr. Tuttle 110,767 shares; Mr. Emma
91,994 shares; Mr. Bullock 58,254 shares;
Mr. McCauley 50,254 shares; Mr. Jenny
50,254 shares; Mr. Bryan 37,754 shares;
Ms. Tocio 42,754 shares; Mr. Meagher
17,716 shares; Mr. Robertson 20,038 shares; and
Mr. Ginsberg 5,000 shares. |
|
|
|
|
(18) |
|
Includes 1,221,393 shares issuable upon the exercise of
stock options which are currently exercisable or exercisable
within 60 days of April 4, 2011. |
B-4
PLEASE VOTE TODAY!
SEE REVERSE SIDE
FOR THREE EASY WAYS TO VOTE.
▼ TO VOTE BY MAIL, PLEASE DETACH PROXY CARD HERE, AND SIGN, DATE AND RETURN IN THE POSTAGE-PAID ENVELOPE PROVIDED ▼
MAC-GRAY CORPORATION
2011 ANNUAL MEETING OF STOCKHOLDERS
THIS
PROXY IS SOLICITED BY TUC INVESTOR VALUE CREATION GROUP, LLC,
KOVPAK II, LLC, RICHARD DREXLER,
MICHAEL J. SOENEN AND
BENJAMIN KOVLER (COLLECTIVELY, THE “PARTICIPANTS”).
| |
|
|
|
|
G
O
L
D
|
|
The undersigned, revoking all proxies previously given, hereby appoints and constitutes Richard Drexler and
Benjamin Kovler, or any of them, as attorneys and proxies, with full power of substitution and resubstitution, to
represent the undersigned at the Annual Meeting of Stockholders of Mac-Gray Corporation (“Mac-Gray”) to be held on
May 18, 2011 at 9:00 a.m. local time, at the Goodwin Procter LLP Conference Center, Second Floor, Exchange Place,
53 State Street, Boston, Massachusetts, and at any adjournments or postponements thereof, to vote all shares of
common stock of Mac-Gray held or owned by the undersigned as directed below, and in their discretion upon such
other matters which the Participants do not know, a reasonable time
before the solicitation, are to be presented at the meeting. |
|
|
|
|
P
R
O
X
Y
|
|
Upon proper execution of this proxy, all shares of common stock of Mac-Gray held or owned by the undersigned will be
voted in the manner directed herein by the undersigned stockholder. IF NO DIRECTION IS MADE WITH RESPECT
TO THE ELECTION OF A DIRECTOR OR A PROPOSAL, ALL SUCH SHARES WILL BE VOTED AS
FOLLOWS WITH RESPECT TO ANY SUCH DIRECTOR OR PROPOSAL: (I) “FOR” RICHARD DREXLER, MICHAEL J. SOENEN AND BENJAMIN
KOVLER, (II) “FOR” PROPOSAL 2, 3, AND 6 (III)
“AGAINST” PROPOSAL 4 AND (IV) WITH RESPECT TO PROPOSAL 5, TO HAVE A
STOCKHOLDER VOTE ON EXECUTIVE COMPENSATION EVERY YEAR. |
YOUR VOTE IS VERY IMPORTANT – PLEASE SUBMIT YOUR PROXY TODAY.
(CONTINUED AND TO BE SIGNED AND DATED ON THE REVERSE SIDE.)
YOUR VOTE IS IMPORTANT
Please take a moment now to vote your shares of Mac-Gray Corporation
Common Stock for the upcoming Annual Meeting of Stockholders.
PLEASE REVIEW THE PROXY STATEMENT AND VOTE TODAY IN ONE OF THREE WAYS:
|
|
| 1. |
|
Vote by Telephone—Please call toll-free in the
U.S. or Canada at 1-866-388-1536, on a
touch-tone phone. If outside the U.S. or Canada, call 1-215-521-4790. Please follow the simple
instructions. You will be required to provide the unique control number printed below. |
|
|
OR
| 2. |
|
Vote by Internet—Please access https://www.proxyvotenow.com/tuc, and follow the simple
instructions. Please note you must type an “s” after http. You will be required to provide the
unique control number printed below. |
You may vote by telephone or Internet 24 hours a day, 7 days a week. Your telephone or
Internet vote authorizes the named proxies to vote your shares in the same manner as if you had
marked, signed and returned a proxy card.
OR
| 3. |
|
Vote by Mail—If you do not wish to vote by telephone or over the Internet, please complete,
sign, date and return the proxy card in the envelope provided, or mail to: TUC Investor Value
Creation Group, c/o Innisfree M&A Incorporated, FDR Station, P.O. Box 5155, New York, NY
10150-5155 |
▼ TO VOTE BY MAIL, PLEASE DETACH PROXY CARD HERE, AND SIGN, DATE AND RETURN IN THE POSTAGE-PAID ENVELOPE PROVIDED ▼
| |
|
|
|
ý
|
|
Please mark your
vote as in this
example |
WE RECOMMEND A VOTE FOR THE ELECTION OF RICHARD DREXLER, MICHAEL J. SOENEN AND BENJAMIN
KOVLER, FOR PROPOSAL 3, AGAINST PROPOSAL 4 AND, WITH RESPECT TO PROPOSAL 5, TO HAVE A STOCKHOLDER
VOTE ON EXECUTIVE COMPENSATION EVERY YEAR. WE MAKE NO RECOMMENDATION AS TO PROPOSALS 2 AND 6.
|
|
|
| PROPOSAL 1— To elect: 1 Richard Drexler, 2 Michael J. Soenen and 3
Benjamin Kovler to the Board of Directors. |
| |
|
|
|
|
| FOR |
|
WITHHOLD |
|
FOR ALL, WITH |
| ALL |
|
FROM ALL |
|
EXCEPTIONS |
o
|
|
o
|
|
o |
INSTRUCTIONS: To withhold authority to vote for any individual
Nominee(s) mark the “FOR ALL, WITH EXCEPTIONS” box and write the
number of the excepted nominee(s) in the space below.
| |
|
|
|
|
|
|
|
| PROPOSAL 2— |
|
To approve an amendment to the 2009 Mac-Gray Corporation Stock Option and Incentive Plan to
increase the number of shares of Mac-Gray’s common stock authorized for issuance under such plan
from 2,300,000 to 4,100,000 shares. |
|
|
|
|
|
|
|
|
|
o FOR
|
|
o AGAINST
|
|
o ABSTAIN |
|
|
|
|
|
|
|
| PROPOSAL 3— |
|
Stockholder proposal requesting declassification of the Board of Directors. |
|
|
|
|
|
|
|
|
|
o FOR
|
|
o AGAINST
|
|
o ABSTAIN |
|
|
|
|
|
|
|
| PROPOSAL 4— |
|
To approve the overall compensation of Mac-Gray’s named executive officers. |
|
|
|
|
|
|
|
|
|
o FOR
|
|
o AGAINST
|
|
o ABSTAIN |
|
|
|
|
|
|
|
| PROPOSAL 5— |
|
To recommend the frequency of executive compensation voting. |
|
|
|
|
|
|
|
o 3 YEARS
|
|
o 2 YEARS
|
|
o 1 YEAR
|
|
o ABSTAIN |
|
|
|
|
|
|
|
PROPOSAL 6— To approve Mac-Gray’s independent registered public accounting firm. |
|
|
|
|
|
|
|
|
|
o FOR
|
|
o AGAINST
|
|
o ABSTAIN |
| |
|
|
|
|
|
Dated:
, 2011 |
|
|
|
|
|
|
|
|
Signature(s) |
|
|
|
|
|
|
|
|
Signature (if held jointly) |
|
|
|
|
|
|
|
|
Title(s), if any |
|
|
|
|
|
|
|
Please sign exactly as your name(s)
appear(s) hereon. If shares are issued in
the name of two or more persons, all such
persons should sign the proxy. A proxy
executed by a corporation or other company
should be signed in its name by its
authorized officers. Executors,
administrators, trustees and partners
should indicate their positions when
signing. |
|
|