SEC Form SC 13D/A filed by MSC Industrial Direct Company Inc. (Amendment)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 1)*

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ☐

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

Explanatory Note

This Amendment No. 1 (the “Amendment”) amends the Schedule 13D filed on February 6, 2023 (the “Original Schedule 13D”) by Mitchell Jacobson, Erik Gershwind, Stacey L. Bennett and Marjorie Gershwind Fiverson (each person or entity, a “Reporting Person” and, collectively the “Reporting Persons”) with the U.S. Securities and Exchange Commission (the “SEC”).

This Amendment does not restate disclosures in the Original Schedule 13D that are not being amended, and should be read in conjunction with the Original Schedule 13D. Except as set forth herein, the Original Schedule 13D is unmodified. All capitalized terms used herein which are not defined herein have the meanings given to such terms in the Original Schedule 13D.

Item 4. Purpose of Transaction.

Item 4 is hereby amended and supplemented as follows:

On June 21, 2023, the Issuer announced that it had reached an agreement with the holders of its Class B Common Stock to reclassify the Issuer’s common stock to eliminate its Class B Common Stock, convert the outstanding shares of Class B Common Stock to shares of Class A Common Stock and eliminate the Issuer’s current dual-class structure (collectively, the “Reclassification”). In support of the Reclassification, the Issuer entered into a Reclassification Agreement, dated June 20, 2023 (the “Reclassification Agreement”), with the Reporting Persons.

The Reclassification Agreement provides that, following the satisfaction of the conditions thereto, the Issuer will amend and restate its Restated 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 the Issuer’s Class A Common Stock, par value $0.001 per share (“Class A Common Stock”). The A&R Charter also will change the voting standard relating to (i) approval of mergers, asset sales, dissolution and certain other significant transactions from a standard of two-thirds of the votes of all the 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 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) 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) approval of the Voting Standard Amendment by a 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 Issuer’s registration statement on Form S-4 to be filed with the SEC in connection with the Reclassification, (iv) approval by the New York Stock Exchange 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 compliance with each party’s obligations under the Reclassification Agreement, in each case subject to customary materiality qualifiers.

Subject to specified exceptions, the Reporting Persons who exercise voting rights with respect to Class A Common Stock and Class B Common Stock have irrevocably and unconditionally agreed to vote all of their shares of Class A Common Stock and Class B Common Stock, representing all of the issued and outstanding Class B Common Stock and approximately 66% of the combined voting power of the issued and outstanding Class A Common Stock and Class B Common Stock when voting together as a single class, in favor of the A&R Charter and the Voting Standard Amendment.

The Reclassification Agreement contains certain termination rights, including the right of either party to terminate for specified breaches of the other party (subject to a cure period), the requisite shareholder approvals not being obtained or if the Reclassification does not occur on or prior to March 20, 2024.

The Reclassification Agreement also sets forth the arrangements between the Issuer and the Reporting Persons relating to certain governance matters.

Following the Effective Time, the Reporting Persons, will have the right (so long as there have not been certain breaches of the Reclassification Agreement) to designate two individuals that the Issuer’s board of directors (the “Board”) will nominate for election to the Board so long as the Reporting Persons collectively beneficially own at least 10% of the total issued and outstanding shares of Class A Common Stock, it being understood that one of the two individuals nominated to the Board shall be Mr. Erik Gershwind for so long as Mr. Gershwind serves as the Issuer’s Chief Executive Officer. The initial Reporting Persons nominees shall be Mr. Mitchell Jacobson and Mr. Erik Gershwind. So long as the Reporting Persons collectively beneficially own, or are the owners of record of, less than 10% but 5% or more of the total issued and outstanding shares of Class A Common Stock following the Effective Time, they will have the right (so long as there have not been certain breaches of the Reclassification Agreement) to designate one individual that the Board will nominate for election to the Board, which such individual shall be Mr. Erik Gershwind for so long as Mr. Gershwind serves as the Issuer’s Chief Executive Officer.

The Reclassification Agreement imposes certain (a) limitations on the transfer of the shares of common stock held by the Reporting Persons during an initial 2-year period following the execution of the Reclassification Agreement subject to certain exceptions; (b) standstill limitations following the execution of the Reclassification Agreement and during the Standstill Period (as defined in the Reclassification Agreement) that include, among others, limitations on acquisitions of Issuer securities, making proposals for a merger or similar transaction and seeking to control or influence the business or policies of the Issuer subject to certain exceptions; and (c) voting restrictions that require the Reporting Persons, following the Effective Time, to vote all shares of Class A Common Stock they beneficially own that are in excess of 15% of the issued and outstanding shares of Class A Common Stock in proportion to the votes cast by the other holders of Class A Common Stock. The Reclassification Agreement provides that, in connection with the closing of the Reclassification, the Issuer and the Reporting Persons will enter into a registration rights agreement (the “Registration Rights Agreement”) pursuant to which the Reporting Persons will be provided certain rights relating to the registration of their common stock. At the Effective Time, the Board will also (i) amend and restate the bylaws of the Issuer (the “A&R Bylaws”) to implement certain conforming changes in connection with the A&R Charter and to implement certain other changes to update the bylaws in accordance with best corporate practices and (ii) amend and restate the Board Corporate Governance Guidelines of the Issuer (the “Corporate Governance Guidelines”) and the charter of the Nominating and Corporate Governance Committee of the Board (the “NCG Committee Charter”) to incorporate the nomination procedures provided for in the Reclassification Agreement and to reflect modernizing, clarifying, and conforming changes in connection with the A&R Charter and A&R Bylaws.

In addition to the provisions stated above, the Reclassification Agreement contains customary representations, warranties and covenants of each of the parties thereto for a transaction of this type. The Issuer informed the Reporting Persons that it anticipates completing the Reclassification during the second half of 2023.

The description of the Reclassification Agreement set forth under this Item 4 and the full text of the Reclassification Agreement are each incorporated herein by reference. The Reclassification Agreement is being filed hereto as Exhibit 99.1.

Item 5. Interest in Securities of the Issuer.

Item 5 is hereby amended and restated to read in its entirety as follows:

See Item 4 and the cover page for each Reporting Person, which are incorporated by reference herein.

References to percentage ownership of the Class A Common Stock in this Schedule 13D are based on (i) 47,257,675 shares of Class A Common Stock outstanding as of March 15, 2023, as reported by the Issuer in its publicly filed Quarterly Report on Form 10-Q for the quarterly period ended March 4, 2023 and (ii) 8,654,010 shares of Class A Common Stock issuable to the Reporting Persons upon conversion of 8,654,010 shares of Class B Common Stock. The Class A Common Stock has one vote per share and the Class B Common Stock has 10 votes per share.

(a)-(b) The aggregate number and percentage of shares of Class A Common Stock beneficially owned by each Reporting Person and, for each Reporting Person, the number of shares as to which there is sole power to vote or to direct the vote, shared power to vote or to direct the vote, sole power to dispose or to direct the disposition, or shared power to dispose or to direct the disposition are set forth on rows 7 through 11 and row 13 of the cover pages of this Schedule 13D and are incorporated by reference herein.

In connection with the letter described in Item 4, the Reporting Persons may be deemed to constitute a “group” for the purposes of Section 13(d) of the Exchange Act and the rules thereunder, and may be deemed to collectively beneficially own 10,096,667 shares of Class A Common Stock (representing approximately 18.1% of the Class A Common Stock), comprising (i) 1,442,657 shares of Class A Common Stock and (ii) 8,654,010 shares of Class A Common Stock issuable upon conversion of 8,654,010 shares of Class B Common Stock held by the Reporting Persons. Each of the Reporting Persons expressly disclaims that they constitute a “group” for the purposes of Section 13(d) of the Exchange Act and the rules thereunder.

(c) The Reporting Persons have not effected any transactions in the Class A Common Stock during the 60 days prior to the filing of this Schedule 13D, except as described in this Schedule 13D.

(d) Except as otherwise set forth herein and to the best knowledge of the Reporting Persons, no person is known to have the right to receive or the power to direct the receipt of dividends from or the proceeds from the sale of shares of Class A Common Stock held by the Reporting Persons other than each of the Reporting Persons.

(e) Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

Item 6 is hereby amended and supplemented as follows:

The description of the Reclassification Agreement set forth under Item 4 and the full text of the Reclassification Agreement are each incorporated herein by reference. The Reclassification Agreement is being filed hereto as Exhibit 99.1.

Item 7. Material to Be Filed as Exhibits.

Item 7 is hereby supplemented by adding the following:

SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: June 21, 2023