8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

June 8, 2009

MAC-GRAY CORPORATION

(Exact Name of Registrant as Specified in Charter)

Delaware	1-13495	04-3361982
(State or Other Jurisdiction	(Commission File Number)	(IRS Employer
of Incorporation)		Identification No.)

404 Wyman Street, Suite 400, Waltham, Massachusetts 02451

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (781) 487-7600

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01.  Entry into a Material Definitive Agreement.

On June 8, 2009, the Board of Directors of Mac-Gray Corporation (the “Company”) renewed its shareholder rights plan, as set forth in the Shareholder Rights Agreement, dated June 8, 2009, between the Company and American Stock Transfer & Trust Company, LLC, as Rights Agent (the “Rights Agreement”).  The following description of the terms of the Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement which is attached hereto as an exhibit and is incorporated herein by reference.

Pursuant to the terms of the Rights Agreement, the Board of Directors declared a dividend distribution of one Preferred Stock Purchase Right (a “Right”) for each outstanding share of common stock, par value $0.01 per share, of the Company (the “Common Stock”) to stockholders of record as of the close of business on June 15, 2009 (the “Record Date”).  In addition, one Right will automatically attach to each share of Common Stock issued between the Record Date and the Distribution Date (as hereinafter defined).  Each Right entitles the registered holder thereof to purchase from the Company a unit consisting of one ten-thousandth of a share (a “Unit”) of Series A Junior Participating Cumulative Preferred Stock, par value $0.01 per share, of the Company (the “Preferred Stock”) at a cash exercise price of $45.00 per Unit (the “Exercise Price”), subject to adjustment, under certain conditions specified in the Rights Agreement and summarized below.

Initially, the Rights are not exercisable and are attached to and trade with all shares of Common Stock outstanding as of, and issued subsequent to, the Record Date.  The Rights will separate from the Common Stock and will become exercisable upon the earlier of (i) the close of business on the tenth calendar day following the first public announcement that a person or group of affiliated or associated persons (an “Acquiring Person”) has acquired beneficial ownership of 15% or more of the outstanding shares of Common Stock, other than as a result of repurchases of stock by the Company or certain inadvertent actions by a stockholder (the date of said announcement being referred to as the “Stock Acquisition Date”), or (ii) the close of business on the tenth business day (or such later day as the Board of Directors may determine) following the commencement of a tender offer or exchange offer that could result upon its consummation in a person or group becoming the beneficial owner of 15% or more of the outstanding shares of Common Stock (the earlier of such dates being herein referred to as the “Distribution Date”).

Notwithstanding the foregoing, with respect to any person who beneficially owns (for purposes of the Rights Agreement) 15% or more of the outstanding shares of Common Stock as of 10:35 a.m. Boston, Massachusetts time, on June 9, 2009 (such person being referred to in the Rights Agreement as a “Grandfathered Person”), the Distribution Date will not occur unless such Grandfathered Person has acquired beneficial ownership of shares of Common Stock representing an additional 3.0% of the outstanding shares of Common Stock.

In the event that a Stock Acquisition Date occurs, proper provision will be made so that each holder of a Right (other than an Acquiring Person or its associates or affiliates, whose Rights shall become null and void) will thereafter have the right to receive upon exercise, in lieu of a number of Units of Preferred Stock, that number of shares of Common Stock of the

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Company (or, in certain circumstances, including if there are insufficient shares of Common Stock to permit the exercise in full of the Rights, Units of Preferred Stock, other securities, cash or property, or any combination of the foregoing) having a market value of two times the Exercise Price of the Right (such right being referred to as the “Subscription Right”).  In the event that, at any time following the Stock Acquisition Date, (i) the Company consolidates with, or merges with and into, any other person, and the Company is not the continuing or surviving corporation, (ii) any person consolidates with the Company, or merges with and into the Company and the Company is the continuing or surviving corporation of such merger and, in connection with such merger, all or part of the shares of Common Stock are changed into or exchanged for stock or other securities of any other person or cash or any other property, or (iii) 50% or more of the Company’s assets or earning power is sold, mortgaged or otherwise transferred, each holder of a Right (other than an Acquiring Person or its associates or affiliates, whose Rights shall become null and void) will thereafter have the right to receive, upon exercise, common stock of the acquiring company having a market value equal to two times the Exercise Price of the Right (such right being referred to as the “Merger Right”).  The holder of a Right will continue to have the Merger Right whether or not such holder has exercised the Subscription Right.  Rights that are or were beneficially owned by an Acquiring Person may (under certain circumstances specified in the Rights Agreement) become null and void.

The Rights may be redeemed in whole, but not in part, at a price of $0.001 per Right (payable in cash, Common Stock or other consideration deemed appropriate by the Board of Directors) by the Board of Directors only until the earlier of (i) the time at which any person becomes an Acquiring Person or (ii) the expiration date of the Rights Agreement.  Immediately upon the action of the Board of Directors ordering redemption of the Rights, the Rights will terminate and thereafter the only right of the holders of Rights will be to receive the redemption price.

The Rights Agreement also contains a “TIDE” provision, which requires an independent committee of the Board of Directors of the Company to review at least once every three years whether maintaining the Rights Agreement continues to be in the best interests of the Company’s stockholders.

The Rights Agreement may be amended by the Board of Directors in its sole discretion until the time at which any person becomes an Acquiring Person.  After such time the Board of Directors may, subject to certain limitations set forth in the Rights Agreement, amend the Rights Agreement only to cure any ambiguity, defect or inconsistency, to shorten or lengthen any time period, or to make changes that do not adversely affect the interests of Rights holders (excluding the interests of an Acquiring Person or its associates or affiliates).  In addition, the Board of Directors may at any time prior to the time at which any person becomes an Acquiring Person, amend the Rights Agreement to lower the threshold at which a person becomes an Acquiring Person to not less than the greater of (i) the sum of 0.001% and the largest percentage of the outstanding Common Stock then owned by any person and (ii) 10%.

Until a Right is exercised, the holder will have no rights as a stockholder of the Company (beyond those as an existing stockholder), including the right to vote or to receive dividends.  While the distribution of the Rights will not be taxable to stockholders or to the Company,

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stockholders may, depending upon the circumstances, recognize taxable income in the event that the Rights become exercisable for Units, other securities of the Company, other consideration or for common stock of an acquiring company.

The Rights are not exercisable until the Distribution Date and will expire at the close of business on June 15, 2019, unless previously redeemed or exchanged by the Company.

Item 3.03.  Material Modification to Rights of Security Holders.

Please see the disclosure set forth under Item 1.01, which is incorporated by reference into this Item 3.03.

Item 8.01.   Other Events.

On June 9, 2009, the Company issued a press release announcing the adoption of the Rights Agreement and an update on various corporate governance matters.  Please see the disclosure set forth under Item 1.01, which is incorporated by reference into this Item 8.01.   A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.

Item 9.01.  Financial Statements and Exhibits.

(d)Exhibits.

4.1	Shareholder Rights Agreement, dated as of June 8, 2009, between Mac-Gray Corporation and American Stock Transfer & Trust Company, LLC, as Rights Agent, filed as an exhibit to the Company’s Registration Statement on Form 8-A on June 10, 2009 and incorporated herein by reference.
99.1	Press Release issued by Mac-Gray Corporation dated June 9, 2009.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MAC-GRAY CORPORATION
Date:  June 10, 2009	By:	/s/ Michael J. Shea
		Name:	Michael J. Shea
		Title:	Executive Vice President and Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description
4.1	Shareholder Rights Agreement, dated as of June 8, 2009, Mac-Gray Corporation and American Stock Transfer & Trust Company, LLC, as Rights Agent, filed as an exhibit to the Company’s Registration Statement on Form 8-A on June 10, 2009 and incorporated herein by reference.
99.1	Press Release issued by Mac-Gray Corporation dated June 9, 2009.

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EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Mac-Gray Corporation Announces the Appointment of

Thomas E. Bullock as Chairman of the Board

Company Provides Corporate Governance Update

WALTHAM, MA, June 9, 2009 —Mac-Gray Corporation (NYSE: TUC), the nation’s premier provider of laundry facilities management services to multi-unit housing locations, today announced that its Board of Directors has elected Thomas E. Bullock as independent Chairman of the Board, succeeding CEO Stewart G. MacDonald, who had served in that role since 1992. Bullock’s election was confirmed yesterday during the first Board of Directors meeting since the 2009 Annual Meeting of Stockholders.

“I’m honored that my colleagues have expressed their confidence in me with this decision and I look forward to serving in this Board leadership role,” said Bullock.  Bullock, a Mac-Gray director since November 2000, serves on the Company’s Executive and Governance and Nominating Committees. He also serves on the board of directors of Transfair USA, a fair-trade certification company.  From 1997 to 2000, Bullock was President and CEO of Ocean Spray Cranberries, Inc., a global manufacturer and distributor of fruit juice and fruit products, where he worked in various senior positions for more than two decades.

“The Board is unanimously in favor of Stewart being renamed to the Board,” said Bullock.  “This is also what most of our investors have said they want because he is the Company’s largest shareholder. We made our preferences known at our meeting, but he has made it clear that he does not wish to do so at this time. He believes he has an obligation as CEO to first focus on clients, suppliers, employees, and other strategic partners, to deal with the damage brought on the Company by the recent proxy contest, and that this is currently his highest priority. He remains open to rejoining the Board at a later time, when this work is done to his satisfaction. Stewart’s strategic vision has brought Mac-Gray to not only its current preeminence in the industry, but also to the financial strength from which we can address the future. It is his determination that the best course for strengthening the Company is by him being able to focus only on his CEO responsibilities for a period of time, and we fully support that decision.”

During yesterday’s meeting the Board also unanimously approved the following actions:

·Determined to seek stockholder approval at the 2010 Annual Meeting of Stockholders to amendthe Company’s charter to permit the Board to adopt a majority voting standard for the election of directors in uncontested elections. If the measure passes at the 2010 Annual Meeting, the Board would act to amend the Company’s Bylaws to effect the change from plurality to majority voting in uncontested elections and would also adopt a director resignation policy to address holdover directors. Should the measure fail, the Board plans to consider adoption of a director resignation policy that would require directors in an

uncontested election that receive less than a majority of votes to tender their resignation to the Board, which would then decide whether to accept it. In all cases plurality voting would continue to apply in contested elections.

“Our decision to propose a majority voting standard for uncontested elections is consistent with the non-binding recommendation supported by stockholders at our Annual Meeting last month,” said Chairman Bullock.  “We plan to implement post-election procedures to avoid the instability due to a “failed election,” where a nominee fails to receive a majority of the votes cast. Disruption and uncertainty at the Board level undermine the interests of all our key constituencies: customers, suppliers, employees, shareholders, and strategic partners.”

·Retained the classified structure of Mac-Gray’s Board after stockholders rejected a non-binding recommendation to declassify the Board at the Annual Meeting of Stockholders on May 8, 2009.

“We believe that a classified Board provides stability and continuity on the Board and allows decisions to be made by directors who have an appropriate level of experience with the Company,” Chairman Bullock stated. “Our decision is also consistent with companies of our size - more than half of the companies in the S&P Small Cap 600 have classified Boards.”

·Adopted a new Shareholder Rights Agreement to replace the prior agreement that was originally adopted in 1999 and was set to expire on June 15, 2009.

“The Board believes that a Shareholders’ Rights Plan continues to enhance its ability to protect stockholder interests and ensures that stockholders receive fair treatment in the event of any coercive takeover attempt,” said Chairman Bullock. “The Plan is intended to provide the Board with sufficient time to consider any and all alternatives to such an action. The Board believes the Plan protects the interests of all stockholders.”

In connection with the renewal of the Shareholder Rights Plan, the Board of Directors declared a dividend distribution of one preferred stock purchase right for each outstanding share of Mac-Gray common stock to stockholders of record as of the close of business on June 15, 2009.  Initially, these rights will not be exercisable and will trade with shares of Mac-Gray’s common stock.  The rights generally will become exercisable if a person (an “acquiring person”) acquires 15% or more of Mac-Gray’s common stock or commences a tender offer that could result in that person owning 15% or more of Mac-Gray’s common stock.  If a person becomes an “acquiring person,” each holder of a right (other than the acquiring person) would be entitled to purchase, at the then-current exercise price, such number of shares of preferred stock which are equivalent to shares of Mac-Gray’s common stock having a value of twice the exercise price of the right.  If Mac-Gray is acquired in a merger or other business combination transaction after any such event, each holder of a right would then be entitled to purchase, at the then-current exercise price, shares of the acquiring company’s common stock having a value of twice the exercise price of the right.

·Elected Alastair Robertson as Chair of the Governance and Nominating Committee, and Bruce Ginsberg as a member of the Audit Committee.

About Mac-Gray Corporation

Founded in 1927, Mac-Gray derives its revenue principally through the contracting of debit-card- and coin-operated laundry facilities in multi-unit housing facilities such as apartment buildings, college and university residence halls, condominiums and public housing complexes. Mac-Gray manages approximately 80,000 laundry rooms located in 43 states and the District of Columbia.

Mac-Gray also sells, services and leases commercial laundry equipment to commercial laundromats and institutions through its product sales division. This division also includes Mac-Gray’s MicroFridge® business, where Mac-Gray sells its proprietary MicroFridge® line of products, which are combination refrigerators/freezers/microwave ovens utilizing innovative Safe Plug circuitry. MicroFridge® and Maytag products bear the ENERGY STAR® designation. To learn more about Mac-Gray, visit the Company’s website at http://www.macgray.com.

Contacts:

Michael J. Shea	Jim Buckley
Chief Financial Officer	Executive Vice President
Mac-Gray Corporation	Sharon Merrill Associates, Inc.
781-487-7610	617-542-5300
Email: mshea@macgray.com	Email: jbuckley@investorrelations.com