Shareholders' Equity

9 Months Ended

Jun. 03, 2023

Stockholders' Equity Note [Abstract]

Shareholders' Equity

Shareholders’ Equity

Common Stock Repurchases and Treasury Stock

On June 29, 2021, the Board of Directors of the Company (the “Board”) terminated the MSC Stock Repurchase Plan, which was established during fiscal year 1999, and authorized a new share repurchase program (the “Share Repurchase Program”) to purchase up to 5,000 shares of Class A Common Stock. There is no expiration date for the Share Repurchase Program. As of June 3, 2023, the maximum number of shares of Class A Common Stock that may yet be repurchased under the Share Repurchase Program was 4,369 shares. The Share Repurchase Program allows the Company to repurchase shares at any time and in any increments it deems appropriate in accordance with Rule 10b-18 under the Exchange Act.

During the thirteen- and thirty-nine-week periods ended June 3, 2023, the Company repurchased one share and 386 shares, respectively, of Class A Common Stock for $65 and $31,072, respectively. From these totals, 331 shares were immediately retired for the thirty-nine-week period ended June 3, 2023 and one share and 55 shares were repurchased by the Company to satisfy the Company’s associates’ tax withholding liability associated with its stock-based compensation program and are reflected at cost as treasury stock in the unaudited Condensed Consolidated Financial Statements for the thirteen- and thirty-nine-week periods ended June 3, 2023, respectively. During the thirteen- and thirty-nine-week periods ended May 28, 2022, the Company repurchased two shares and 59 shares, respectively, of Class A Common Stock for $131 and $4,944, respectively. All of these shares were repurchased by the Company to satisfy the Company’s associates’ tax withholding liability associated with its stock-based compensation program and are reflected at cost as treasury stock in the unaudited Condensed Consolidated Financial Statements for the thirteen- and thirty-nine-week periods ended May 28, 2022.

The Company reissued 14 shares and 45 shares of treasury stock during the thirteen- and thirty-nine-week periods ended June 3, 2023, respectively, and reissued 15 shares and 45 shares of treasury stock during the thirteen- and thirty-nine-week periods ended May 28, 2022, respectively, to fund the MSC Industrial Direct Co., Inc. Amended and Restated Associate Stock Purchase Plan.

Dividends on Common Stock

The Company paid aggregate regular cash dividends of $2.37 per share totaling $132,484 for the thirty-nine weeks ended June 3, 2023. For the thirty-nine weeks ended May 28, 2022, the Company paid aggregate regular cash dividends of $2.25 per share totaling $125,532.

On June 21, 2023, the Board declared a regular cash dividend of $0.79 per share, payable on July 25, 2023, to shareholders of record at the close of business on July 11, 2023. The dividend is expected to result in aggregate payments of $44,281, based on the number of shares outstanding at June 15, 2023.

Reclassification Proposal

On January 31, 2023, the Board received a proposal (the “Proposal”) from the Company’s controlling shareholders, the Jacobson/Gershwind family, to exchange each of their shares of Class B Common Stock for shares of Class A Common Stock, reclassify the Class B Common Stock and the Class A Common Stock into a single class of common stock and eliminate the current dual-class share structure (the “Reclassification”). The Board formed a Special Committee composed entirely of independent and disinterested directors to evaluate the Proposal, which was advised by independent financial and legal advisors.

On June 21, 2023, the Company announced that it had reached an agreement with the Jacobson/Gershwind family with respect to the Reclassification, in support of which, the Company entered into a Reclassification Agreement, dated as of June 20, 2023 (the “Reclassification Agreement”), with the holders of the Class B Common Stock listed therein.

The Reclassification Agreement provides that, following the satisfaction of the conditions to closing set forth in the Reclassification Agreement, the Company will amend and restate its Certificate of Incorporation (the “A&R Charter”). Upon the A&R Charter being duly filed with the New York Secretary of State (the “Effective Time”), among other things, each share of Class B Common Stock issued and outstanding immediately prior to the Effective Time will be exchanged for 1.225 shares of Class A Common Stock. The A&R Charter also will change the voting standard relating to (i) the approval of mergers, asset sales, share exchanges, dissolution and certain other significant transactions from a standard of two-thirds of the votes of all outstanding shares entitled to vote thereon to a majority of the votes of all outstanding shares entitled to vote thereon (the “Voting Standard Amendment”) and (ii) the election of directors in uncontested elections from the current plurality of the votes cast standard to a majority of the votes cast standard. Under the A&R Charter, contested elections of directors will be determined by a plurality of the votes cast standard.

The closing of the Reclassification is subject to customary conditions, including, (i) the approval of the A&R Charter by the affirmative vote of (a) a majority of the issued and outstanding shares of Class A Common Stock and Class B Common Stock entitled to vote thereon, voting together as a single class, (b) a majority of the issued and outstanding shares of Class B Common Stock entitled to vote thereon, and (c) a majority of the issued and outstanding shares of Class A Common Stock held by the Unaffiliated Class A Holders (as defined in the Reclassification Agreement), (ii) the approval of the Voting Standard Amendment by the affirmative vote of two-thirds of the issued and outstanding shares of Class A Common Stock and Class B Common Stock entitled to vote thereon, voting together as a single class, (iii) the effectiveness of the Company’s registration statement on Form S-4 to be filed with the SEC in connection with the Reclassification, (iv) the approval by the NYSE of the listing of the shares of Class A Common Stock into which the Class B Common Stock will be reclassified, exchanged and converted into, subject to official notice of issuance; and (v) the accuracy of the representations and warranties of each party set forth in the Reclassification Agreement and the compliance with each party’s obligations under the Reclassification Agreement, in each case subject to customary materiality qualifiers. In connection with the Reclassification Agreement, the holders of the Class B Common Stock have executed an irrevocable proxy, pursuant to which, they have agreed to vote all of the shares of Class B Common Stock and Class A Common Stock held by such holders in favor of the Reclassification and the transactions contemplated by the Reclassification Agreement.