WALTHAM, Mass., Oct. 28 /PRNewswire/ -- Mac-Gray Corporation (NYSE: TUC), the nation's premier provider of laundry facilities management services to multi-unit housing locations, today announced the results of a recent Board of Directors' meeting where the Board addressed several corporate governance items.
At the 2010 Annual Meeting, stockholders overwhelmingly approved an amendment to the Company's certificate of incorporation to enable the Board of Directors to implement a majority voting standard for uncontested director elections. The Annual Meeting also included two non-binding shareholder proposals, which narrowly passed -- the first requesting declassification of the Board of Directors and the second seeking to redeem all rights outstanding under the Company's Shareholder Rights Agreement.
"Our Board continues to be firmly committed to good corporate governance," said Chairman Thomas J. Bullock. "We will continue to review our governance practices in order to best serve the interests of all of Mac-Gray's shareholders."
At its recent meeting, Mac-Gray's Board, which is wholly composed of independent directors, unanimously agreed to:
- Amend the Company's bylaws to effect the change from plurality to majority voting in uncontested elections and adopt a director resignation policy to address holdover directors. Any resignation would be contingent upon acceptance by the Board of Directors. Plurality voting would continue to apply in contested elections.
"Our decision to adopt the majority voting standard for uncontested elections is consistent with the non-binding recommendation supported by stockholders at our Annual Meeting," said Chairman Bullock. "We have also implemented a resignation policy to avoid the instability due to a 'failed election,' where a nominee fails to receive a majority of the votes cast. We believe it is in the best interests of shareholders to avoid disruption at the Board level brought on by an uncontested director's failure to receive a majority."
- Retain the classified structure of Mac-Gray's Board.
"Given Mac-Gray's size as well as our business model, we believe that a classified Board structure provides a valuable source of stability for the Company," said Chairman Bullock. "A classified Board does not diminish shareholders' right to vote for Board nominees, but in addition to stability it also promotes an important continuity of knowledge which ensures that critical decisions are made by directors with an appropriate level of experience with the Company. Mac-Gray's business model is built on long-term analysis, long-term investments, and long-term contracts, and decisions related to the Company's strategy and direction should reflect those realities. In addition, our structure is consistent with the half of the companies in the S&P Small Cap 600 that have classified Boards."
- Retain its current Shareholder Rights Plan.
"The Board firmly believes that having a Shareholders' Rights Plan protects stockholder interests and ensures fair treatment in the event of a hostile takeover attempt," said Chairman Bullock. "The Plan ensures that the Board will have sufficient time to consider any and all strategic alternatives to such a coercive action. The Board believes the Plan allows the Board to negotiate more effectively with any potential acquirers, thereby protecting the interests of all the stockholders."
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 88,000 laundry rooms located in 43 states and the District of Columbia. Mac-Gray also sells and services commercial laundry equipment to retail laundromats and other customers through its product sales division. To learn more about Mac-Gray, visit the Company's website at www.macgray.com.
SOURCE Mac-Gray Corporation