Shareholders' Equity

12 Months Ended

Sep. 03, 2016

Shareholders' Equity [Abstract]

Shareholders' Equity

9. SHAREHOLDERS’ EQUITY

Treasury Stock Purchases

In July 2016, the Company commenced a tender offer to purchase for cash up to $300,000 in value of shares of its Class A common stock through a “modified Dutch auction” tender offer at a price per share of not less than $66.00 and not greater than $72.50 (the “Tender Offer”). In addition, the Company entered into a stock purchase agreement with the holders of the Company’s Class B common stock (the “Class B Holders”) to purchase (the “Stock Purchase”) from the Class B Holders a pro rata number of shares at the price per share to be paid by the Company in the Tender Offer, such that the Class B Holders’ percentage ownership and voting power in the Company would remain substantially the same as prior to the Tender Offer.  The Class B Holders also agreed not to participate in the Tender Offer.  

In August 2016, the Company completed the Tender Offer and purchased 3,821 shares of the Company’s Class A common stock that were validly tendered and not validly withdrawn at a price of $72.50 per share. The Company also completed the Stock Purchase of an aggregate of 1,152 shares of its Class A common stock from the Class B Holders at a purchase price of $72.50 per share.  In total, as a result of the Tender Offer and Stock Purchase, the Company purchased 4,973 shares at a price of $72.50 per share for an aggregate cost of $360,566, excluding fees and expenses.  The Company incurred costs of $1,587 in connection with the Tender Offer and Stock Purchase resulting in a total cost of $362,153, or $72.82 per share for the shares repurchased, which were recorded to treasury stock.  The Company retired all 4,973 shares purchased as a result of the Tender Offer and Stock Purchase.

During fiscal 1999, the Board of Directors established the MSC Stock Repurchase Plan (the “Repurchase Plan”). In 2011, the Board of Directors reaffirmed and replenished the Repurchase Plan so that the total number of shares of Class A common stock authorized for future repurchase was 5,000 shares. As of September 3, 2016, the maximum number of shares that may yet be repurchased under the Repurchase Plan was 1,444 shares. The Repurchase Plan allows the Company to repurchase shares at any time and in any increments it deems appropriate in accordance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended. During fiscal 2016 and 2015, the Company repurchased 5,344 shares and 444 shares, respectively, of its Class A common stock for $384,111 and $33,414, respectively. 72 and 112 of these shares were repurchased by the Company to satisfy the Company’s associates’ tax withholding liability associated with its share-based compensation program during fiscal 2016 and 2015, respectively. Shares of the Company’s common stock purchased pursuant to the Tender Offer and the Stock Purchase, as well as shares purchased tosatisfy the Company’s associates’ tax withholding liabilityassociated with its share-based compensation program did not reduce the number of shares that may be repurchased under the Repurchase Plan.

The Company reissued 64 and 63 shares of treasury stock during fiscal2016  and 2015, respectively, to fund the Associate Stock Purchase Plan (See Note 10).

Common Stock

Each holder of the Company’s Class A common stock is entitled to one vote for each share held of record on the applicable record date on all matters presented to a vote of shareholders, including the election of directors. The holders of Class B common stock are entitled to ten votes per share on the applicable record date and are entitled to vote, together with the holders of the Class A common stock, on all matters which are subject to shareholder approval. Holders of Class A common stock and Class B common stock have no cumulative voting rights or preemptive rights to purchase or subscribe for any stock or other securities and there are no redemption or sinking fund provisions with respect to such stock.

The holders of the Company’s Class B common stock have the right to convert their shares of Class B common stock into shares of Class A common stock at their election and on a one-to-one basis, and all shares of Class B common stock convert into shares of Class A common stock on a one to-one basis upon the sale or transfer of such shares of Class B common stock to any person who is not a member of the Jacobson or Gershwind families or any trust not established principally for members of the Jacobson or Gershwind families or to any person who is not an executor, administrator or personal representative of an estate of a member of the Jacobson or Gershwind families.

Preferred Stock

The Company has authorized 5,000 shares of preferred stock. The Company’s Board of Directors has the authority to issue the shares of preferred stock. Shares of preferred stock may have priority over the Company’s Class A common stock and Class B common stock with respect to dividend or liquidation rights, or both. As of September 3, 2016, there were no shares of preferred stock issued or outstanding.  

Cash Dividend

In 2003, the Board of Directors instituted a policy of regular quarterly cash dividends to shareholders. This policy is reviewed regularly by the Board of Directors.

On October 27, 2016, the Board of Directors declared a quarterly cash dividend of $0.45  per share, payable on November 29, 2016 to shareholders of record at the close of business on November 15, 2016. The dividend will result in a payout of approximately $25,461 based on the number of shares outstanding at October 17, 2016.