UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE TO

TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) or 13(e)(1)

OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

DESIGNER BRANDS INC.

(Name of Subject Company (Issuer) and Filing Person (Offeror))

 

 

Common Stock, no par value

(Title of Class of Securities)

250565108

(CUSIP Number of Class of Securities)

 

 

Designer Brands Inc.

Attention: Michelle Krall, Esq.

Senior Vice President, General Counsel & Corporate Secretary

Designer Brands Inc.

810 DSW Drive

Columbus, Ohio 43219

(614) 237-7100

(Name, address and telephone number of person authorized to receive notices and communications on behalf of filing person)

 

 

Copy to:

Erin E. Martin, Esq.

Celia A. Soehner, Esq.

Morgan, Lewis & Bockius LLP

101 Park Avenue

New York, New York 10178

(212) 309-6000

 

 

 

☐ 

Check the box if filing relates solely to preliminary communications made before the commencement of a tender offer.

Check the appropriate boxes below to designate any transactions to which the statement relates:

 

 

third-tender offer subject to Rule 14d-1. party

 

 

issuer tender offer subject to Rule 13e-4.

 

 

going-transaction subject to Rule 13e-3. private

 

 

amendment to Schedule 13D under Rule 13d-2.

Check the following box if the filing is a final amendment reporting the results of the tender offer:  ☐

 

 

 


Introductory Statement

This Tender Offer Statement on Schedule TO relates to the offer by Designer Brands Inc., an Ohio corporation (“DBI” or the “Company”), to purchase up to $100 million in value of shares of its Class A Common Shares, without par value (the “Shares”), at a price not greater than $8.00 nor less than $7.00 per Share, as set forth in the Offer to Purchase (defined below), to the seller in cash, less any applicable withholding taxes and without interest. The Company’s offer is being made upon the terms and subject to the conditions set forth in the Offer to Purchase, dated June 8, 2023 (together with any amendments or supplements thereto, the “Offer to Purchase”), the related Letter of Transmittal (together with any amendments or supplements thereto, the “Letter of Transmittal”) and other related materials as may be amended or supplemented from time to time (collectively, with the Offer to Purchase and the Letter of Transmittal, the “Tender Offer”). This Schedule TO is intended to satisfy the reporting requirements of Rule 13e-4(c)(2) under the Securities Exchange Act of 1934, as amended.

The information contained in the Offer to Purchase and the related Letter of Transmittal is incorporated herein by reference in response to Item 1 through Item 9 and Item 11 of this Schedule TO.

 

Item 1.

Summary Term Sheet.

The information under the heading “Summary Term Sheet” of the Offer to Purchase, a copy of which is filed with this Schedule TO as
Exhibit (a)(1)(A), is incorporated herein by reference.

 

Item 2.

Subject Company Information.

 

  (a)

Name and Address: The name of the issuer is Designer Brands Inc. The address and telephone number of the Company’s principal executive offices are: 810 DSW Drive, Columbus, Ohio 43219. The information set forth in “Section 10 — Certain Information Concerning Us” of the Offer to Purchase is incorporated herein by reference.

 

  (b)

Securities: The information set forth in the section of the Offer to Purchase captioned “Introduction” and in “Section 12 — Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares” of the Offer to Purchase is incorporated herein by reference.

 

  (c)

Trading Market and Price: The information set forth in the section of the Offer to Purchase captioned “Introduction” and “Section 8 — Price Range of Shares; Dividends” of the Offer to Purchase is incorporated herein by reference.

 

Item 3.

Identity and Background of Filing Person.

 

  (a)

Name and Address: The name of the filing person is Designer Brands Inc., an Ohio corporation. The address and telephone number of the Company’s principal executive office is 810 DSW Drive, Columbus, Ohio 43219, and the telephone number is (614) 237-7100. The information set forth in “Section 10 — Certain Information Concerning Us” and “Section 12 — Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares” of the Offer to Purchase and in Schedule I to the Offer to Purchase is incorporated herein by reference.


Item 4.

Terms of the Transaction.

 

  (a)

Material Terms: The information set forth in the sections of the Offer to Purchase captioned “Introduction,” “Summary Term Sheet,” “Section 1 — Number of Shares; Price; Proration,” “Section 2 — Purpose of the Offer; Certain Effects of the Offer; Plans and Proposals,” “Section 3 — Procedures for Tendering Shares,” “Section 4 — Withdrawal Rights,” “Section 5 — Purchase of Shares and Payment of Purchase Price,” “Section 6 — Conditional Tender of Shares,” “Section 7 — Conditions of the Offer,” “Section 9 — Source and Amount of Funds,” “Section 10 — Certain Information Concerning Us,” “Section 12 — Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares,” “Section 14 — United States Federal Income Tax Consequences,” “Section 15 —Extension of the Offer; Termination; Amendment” and “Section 17 — Miscellaneous” are incorporated herein by reference. There will be no material differences in the rights of security holders as a result of this transaction.

 

  (b)

Purchases: The information set forth in “Section 12 — Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares” of the Offer to Purchase is incorporated herein by reference.

 

Item 5.

Past Contracts, Transactions, Negotiations and Agreements.

 

  (a)

Agreement Involving the Subject Company’s Securities: The information under the headings “Section 8 — Price Range of Shares; Dividends” and “Section 12 — Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares” of the Offer to Purchase are incorporated herein by reference.

 

Item 6.

Purposes of the Transaction and Plans or Proposals.

 

  (a)

Purposes: The information set forth in the section of the Offer to Purchase captioned “Summary Term Sheet” and in “Section 2 — Purpose of the Offer; Certain Effects of the Offer; Plans and Proposals” of the Offer to Purchase is incorporated herein by reference.

 

  (b)

Use of the Securities Acquired: The information set forth in “Section 2 — Purpose of the Offer; Certain Effects of the Offer; Plans and Proposals” of the Offer to Purchase is incorporated herein by reference.

 

  (c)

Plans: The information set forth in “Section 2 — Purpose of the Offer; Certain Effects of the Offer; Plans and Proposals,” “Section 8 — Price Range of Shares; Dividends,” and “Section 12 — Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares” of the Offer to Purchase is incorporated herein by reference.

 

Item 7.

Source and Amount of Funds or Other Consideration.

 

  (a)

Source of Funds: The information set forth in the section of the Offer to Purchase captioned “Summary Term Sheet” and in “Section 9 — Source and Amount of Funds” of the Offer to Purchase is incorporated herein by reference.

 

  (b)

Conditions: The information set forth in the section of the Offer to Purchase captioned “Summary Term Sheet” and in “Section 9 — Source and Amount of Funds” of the Offer to Purchase is incorporated herein by reference.

 

  (c)

Borrowed Funds: The information set forth in the section of the Offer to Purchase captioned “Summary Term Sheet” and in “Section 9 — Source and Amount of Funds” of the Offer to Purchase is incorporated herein by reference.


Item 8.

Interest in Securities of the Subject Company.

 

  (a)

Securities Ownership: The information set forth in “Section 12 — Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares” in the Offer to Purchase is incorporated herein by reference.

 

  (b)

Securities Transactions: The information set forth in “Section 12 — Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares” in the Offer to Purchase is incorporated herein by reference.

 

Item 9.

Persons/Assets, Retained, Employed, Compensated or Used.

 

  (a)

Solicitation or Recommendations: The information set forth in “Summary Term Sheet” and “Section 16 — Fees and Expenses” in the Offer to Purchase is incorporated herein by reference.

 

Item 10.

Financial Statements.

 

  (a)-(b)

The information set forth in “Section 11 — Financial Statements and Information” of the Offer to Purchase is incorporated herein by reference.

 

Item 11.

Additional Information.

 

  (a)

The information set forth in “Section 2 — Purpose of the Offer; Certain Effects of the Offer; Plans and Proposals,” “Section 12 — Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares” and “Section 13 — Certain Legal Matters; Regulatory Approvals” of the Offer to Purchase is incorporated herein by reference.

 

  (b)

Other Material Information: The information in the Offer to Purchase and the Letter of Transmittal, copies of which are filed with this Schedule TO as Exhibits (a)(1)(A) and (a)(1)(B), respectively, is incorporated herein by reference.


Item 12.

Exhibits.

 

Exhibit

No

  

Description

(a)(1)(A)*

   Offer to Purchase, dated June 8, 2023.

(a)(1)(B)*

   Letter of Transmittal.

(a)(1)(C)*

   Notice of Guaranteed Delivery.

(a)(1)(D)*

   Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees, dated June 8, 2023.

(a)(1)(E)*

   Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees, dated June 8, 2023.

(a)(1)(F)*

   Summary Advertisement, dated as of June 8, 2023.

(a)(2)

   Annual Report on Form 10-K for the fiscal year ended January 28, 2023 filed on March 16, 2023.

(a)(3)

   Quarterly Report on Form 10-Q for the quarter ended April  28, 2023 filed on June 8, 2023.

(a)(4)

   Not applicable.

(a)(5)

   Press release announcing the intention to commence the Tender Offer, dated June 8, 2023 (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on June 8, 2023.

(a)(6)*

   Press release announcing the commencement of the Tender Offer, dated June 8, 2023.

(d)(1)

   DSW Inc. 2005 Equity Incentive Plan (incorporated by reference to Appendix A to the Company’s Definitive Proxy Statement on Schedule 14A filed on April 30, 2014).

(d)(2)

   DSW Inc. 2014 Long-Term Incentive Plan (incorporated by reference to Appendix C to the Company’s Definitive Proxy Statement on Schedule 14A filed on April 30, 2014).

(d)(3)

   First Amendment to DSW Inc. 2014 Long-Term Incentive Plan, dated January  31, 2018 (incorporated by reference to Exhibit 10.3.1 to the Company’s Annual Report on Form 10-K filed on March 26, 2019).

(d)(4)

   Designer Brands Inc. 2014 Long-Term Incentive Plan (as Amended and Restated) (incorporated by reference to Exhibit 99.1 to the Company’s Registration Statement on Form S-8 filed on July 14, 2020).

(d)(5)

   Form of Restricted Stock Units Award Agreement (incorporated by reference to Exhibit 10.3.2 to the Company’s Annual Report on Form 10-K filed on May 1, 2020).

(d)(6)

   Form of Non-Employee Director Stock Unit Award (incorporated by reference to Exhibit 10.3.3 to the Company’s Annual Report on Form 10-K filed on May 1, 2020).

(d)(7)

   Form of Nonqualified Stock Option Award Agreement (incorporated by reference to Exhibit 10.3.4 to the Company’s Annual Report on Form 10-K filed on May 1, 2020).

(d)(8)

   Form of Performance-Based Restricted Stock Units Award Agreement (incorporated by reference to Exhibit 10.3.5 to the Company’s Annual Report on Form 10-K filed on May 1, 2020).

(d)(9)

   Form of Performance Share Agreement (incorporated by reference to Exhibit 10.3.8 to the Company’s Annual Report on Form 10-K filed on March 16, 2023).

(d)(10)

   Form of Director Stock Unit (incorporated by reference to Exhibit 10.3.9 to the Company’s Annual Report on Form 10-K filed on March 16, 2023).

(d)(11)

   Designer Brands Inc. Cash Incentive Plan (incorporated by reference to Exhibit 10.4 to the Company’s Annual Report on Form 10-K filed on March 16, 2023).


Exhibit

No

  

Description

(d)(12)

   Employment Agreement, dated March  27, 2009, between William L. Jordan and DSW Inc. (incorporated by reference to Exhibit 10.61 to the Company’s Annual Report on Form 10-K filed on April 1, 2009).

(d)(13)

   First Amendment to Employment Agreement, dated November  9, 2015, between William L. Jordan and DSW Inc. (incorporated by reference to Exhibit 10.29.1 to the Company’s Annual Report on Form 10-K filed on March 24, 2016).

(d)(14)

   Standard Executive Severance Agreement, dated July  20, 2016, between Jared Poff and DSW Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on September 1, 2016).

(d)(15)

   Standard Executive Severance Agreement, dated April  9, 2020, between Mary Turner and Designer Brands Inc. (incorporated by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K filed on May 1, 2020).

(d)(16)

   Standard Executive Severance Agreement, dated April  9, 2020, between James Weinberg and Designer Brands Inc. (incorporated by reference to Exhibit 10.11 to the Company’s Annual Report on Form 10-K filed on March 16, 2023).

(d)(17)

   Amended Executive Severance Agreement, dated January  4, 2023, between David H. Howe and Designer Brands, Inc. (incorporated by reference to Exhibit 10.15 to the Company’s Annual Report on Form 10-K filed on March 16, 2023).

(g)

   None.

(h)

   None.

107*

   Calculation of Filing Fees.

 

*

Filed herewith

 

Item 13.

Information Required by Schedule 13E-3.

Not applicable.


SIGNATURE

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

  Designer Brands Inc.
By:  

/s/ Jared A. Poff

  Jared A. Poff
  Executive Vice President and Chief Financial Officer

Date: June 8, 2023

Table of Contents

Exhibit (a)(1)(A)

OFFER TO PURCHASE

BY

DESIGNER BRANDS INC.

Up to $100 Million of its Class A Common Shares, without par value,

at a Cash Purchase Price Not More than $8.00 per Share Nor Less than $7.00 per Share

CUSIP: 250565108

 

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, AT THE END OF THE DAY, NEW YORK CITY TIME, ON JULY 7, 2023, UNLESS THE OFFER IS EXTENDED OR TERMINATED (SUCH DATE AND TIME, AS THEY MAY BE EXTENDED, THE “EXPIRATION DATE”). THE OFFER IS SUBJECT TO THE SATISFACTION OR WAIVER OF CERTAIN CONDITIONS AS SET FORTH UNDER THE HEADING “THE OFFER-CONDITIONS OF THE OFFER,” INCLUDING THE FINANCING CONDITION (AS DEFINED HEREIN).

Designer Brands Inc., an Ohio corporation (“DBI,” the “Company,” “we,” “us or “our”), is offering to purchase up to $100 million in aggregate purchase price of our issued and outstanding Class A Common Shares, without par value (each, a “Share and collectively, the “Shares”), at a price calculated as described herein that is not greater than $8.00 nor less than $7.00 per Share to the seller in cash, less any applicable withholding taxes and without interest, upon the terms and subject to the conditions described in this Offer to Purchase (together with any amendments or supplements thereto, the “Offer to Purchase”), in the related Letter of Transmittal (together with any amendments or supplements thereto, the “Letter of Transmittal”) and in other related materials as may be amended or supplemented from time to time (collectively, with this Offer to Purchase and Letter of Transmittal, the “Offer”).

Upon the terms and subject to the conditions of the Offer, including the Financing Condition (as defined below), we will determine a single per Share price that we will pay for Shares properly tendered and not properly withdrawn from the Offer, taking into account the total number of Shares properly tendered and the prices specified, or deemed specified, by tendering shareholders. We will select this single per Share price (the “Purchase Price”) as the lowest single purchase price (in increments of $0.05), not greater than $8.00 nor less than $7.00 per Share, that would allow us to purchase the maximum number of Shares for an aggregate purchase price not to exceed $100 million, or all Shares properly tendered and not properly withdrawn in the event that less than $100 million in aggregate purchase price of Shares are properly tendered and not properly withdrawn. All Shares purchased in the Offer will be purchased at the Purchase Price, including Shares tendered at a price lower than the Purchase Price, subject to “Odd Lot” priority, proration and the conditional tender provisions described in this Offer to Purchase.

Upon the terms and subject to the conditions of the Offer, if, based on the Purchase Price, Shares having an aggregate value of $100 million or less are properly tendered and not properly withdrawn, we will purchase all Shares properly tendered at or below the Purchase Price and not properly withdrawn prior to the Expiration Date (as defined below). All Shares acquired, if any, in the Offer will be acquired at the Purchase Price, including those Shares tendered at a price lower than the Purchase Price. Only Shares properly tendered at prices at or below the Purchase Price, and not properly withdrawn, will be purchased; however, because of “Odd Lot” priority, proration, and the conditional tender provisions described in this Offer to Purchase, we may not purchase all of the Shares tendered at or below the Purchase Price if Shares having an aggregate purchase price in excess of $100 million are properly tendered (and not properly withdrawn) at or below the Purchase Price. Shares not purchased in the Offer will be returned to the tendering shareholders promptly after the Expiration Date.

We reserve the right, in our sole discretion, to change the per Share purchase price range and to increase or decrease the number of Shares sought in the Offer, subject to applicable law. In accordance with the rules of the Securities and Exchange Commission (the “SEC”), if more than $100 million in aggregate purchase price of

 

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Shares is tendered in the Offer at or below the Purchase Price, we may increase the number of Shares accepted for payment in the Offer by no more than 2% of the outstanding Shares without extending the Expiration Date. See Sections 1 and 15.

As of June 5, 2023, we had 58,073,011 issued and outstanding Shares and 7,732,733 issued and outstanding shares of Class B Common Shares, without par value (“Class B Common Shares”). Assuming that the Offer is fully subscribed, if the Purchase Price is determined to be $7.00 per Share, the minimum Purchase Price pursuant to the Offer, the approximate number of Shares that would be purchased pursuant to the Offer is 14,285,714. Assuming that the Offer is fully subscribed, if the Purchase Price is determined to be $8.00 per Share, the maximum Purchase Price pursuant to the Offer, the approximate number of Shares that would be purchased pursuant to the Offer is 12,500,000.

THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS, INCLUDING THE FINANCING CONDITION. SEE SECTION 7.

The Shares are listed and traded on the New York Stock Exchange (“NYSE”) under the trading symbol “DBI”. On June 7, 2023, the last full trading day prior to the commencement of the Offer, the last reported sale price of the Shares was $7.21 per Share, which is above the $7.00 per Share lower end of the price range for the Offer. Accordingly, an election to accept the Purchase Price determined in the Offer may lower the Purchase Price to a price below such closing price and could be below the reported closing price on the Expiration Date. Shareholders are urged to obtain current market quotations for the Shares before deciding whether and at what purchase price or purchase prices to tender their Shares. See Section 8.

OUR BOARD OF DIRECTORS (THE “BOARD OF DIRECTORS” OR THE “BOARD”) HAS AUTHORIZED US TO MAKE THE OFFER. HOWEVER, NONE OF THE COMPANY, THE MEMBERS OF OUR BOARD OF DIRECTORS, BOFA SECURITIES, INC. AND BMO CAPITAL MARKETS CORP., THE DEALER MANAGERS FOR THE OFFERING (COLLECTIVELY, THE “DEALER MANAGERS”), GEORGESON LLC, THE INFORMATION AGENT FOR THE OFFER (THE “INFORMATION AGENT”), OR COMPUTERSHARE TRUST COMPANY, N.A., THE DEPOSITARY FOR THE OFFER (THE “DEPOSITARY”), MAKES ANY RECOMMENDATION TO YOU AS TO WHETHER YOU SHOULD TENDER OR REFRAIN FROM TENDERING YOUR SHARES OR AS TO THE PURCHASE PRICE OR PURCHASE PRICES AT WHICH YOU MAY CHOOSE TO TENDER YOUR SHARES. NEITHER WE NOR ANY MEMBER OF OUR BOARD OF DIRECTORS, THE DEALER MANAGERS, THE INFORMATION AGENT OR THE DEPOSITARY HAS AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION WITH RESPECT TO THE OFFER. YOU MUST MAKE YOUR OWN DECISION AS TO WHETHER TO TENDER YOUR SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PURCHASE PRICE OR PURCHASE PRICES AT WHICH YOU WILL TENDER THEM. WE RECOMMEND THAT YOU CONSULT YOUR OWN FINANCIAL, LEGAL AND TAX ADVISORS, AND READ CAREFULLY AND EVALUATE THE INFORMATION IN THIS OFFER TO PURCHASE AND IN THE LETTER OF TRANSMITTAL, INCLUDING OUR REASONS FOR MAKING THE OFFER, BEFORE TAKING ANY ACTION WITH RESPECT TO THE OFFER. SEE SECTION 2.

THE OFFER HAS NOT BEEN APPROVED BY THE SEC OR ANY STATE SECURITIES COMMISSION NOR HAS THE SEC OR ANY STATE SECURITIES COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF THE OFFER OR UPON THE ACCURACY OF THE INFORMATION CONTAINED IN THIS OFFER TO PURCHASE AND ANY RELATED DOCUMENTS, AND ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL AND MAY BE A CRIMINAL OFFENSE.

If you have questions or need assistance, you should contact the Information Agent or the Dealer Managers at their respective addresses and telephone numbers set forth on the back cover of this Offer to Purchase. If you require additional copies of this Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery or other related materials, you should contact the Information Agent.

 

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The Dealer Managers for the Offer are:

 

BofA Securities, Inc.    BMO Capital Markets Corp.

Offer to Purchase dated June 8, 2023

IMPORTANT

If you want to tender all or part of your Shares, you must do one of the following before the Offer expires at 12:00 Midnight, at the end of the day, New York City time, on July 7, 2023 (unless the Offer is extended):

 

   

if your Shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, contact the nominee and request that the nominee tender your Shares for you. Beneficial owners should be aware that their broker, dealer, commercial bank, trust company or other nominee may establish its own earlier deadlines for participation in the Offer. Accordingly, beneficial owners wishing to participate in the Offer should contact their broker, dealer, commercial bank, trust company or other nominee as soon as possible in order to determine the times by which such owner must take action in order to participate in the Offer;

 

   

if you hold certificates or book-entry Shares registered in your own name, complete and sign a Letter of Transmittal according to its instructions, and deliver it, together with any required signature guarantees, any certificates for your Shares and any other documents required by the Letter of Transmittal, to Computershare Trust Company, N.A., the depositary for the Offer (the “Depositary”), at the address appearing on the back cover page of this Offer to Purchase;

 

   

if you are an institution participating in The Depository Trust Company, which we call the “Book-Entry Transfer Facility in this Offer to Purchase, tender your Shares according to the procedure for book-entry transfer described in Section 3.

 

   

We are not offering, as part of the Offer, to purchase any vested stock options outstanding under the 2005 DSW Inc. Equity Plan (the “2005 Equity Plan”) or the Designer Brands Inc. 2014 Long-Term Incentive Plan (as amended and restated, the “LTI Plan”) (collectively, the “Equity Incentive Plans”) that have not been exercised, and tenders of such stock options will not be accepted. If you are a holder of vested but unexercised stock options outstanding under the Equity Incentive Plans, you may, subject to the requirements of the applicable Equity Incentive Plan and your award agreement, exercise such options and tender some or all of the Shares issued pursuant to such exercise in the Offer. You must complete the exercise of such vested options sufficiently in advance of the Expiration Date in order to provide adequate time to validly tender any such Shares in the Offer. Exercises of options cannot be revoked even if some or all of the Shares received upon the exercise thereof and tendered in the Offer are not purchased pursuant to the Offer for any reason.

 

   

We are not offering, as part of the Offer, to purchase restricted stock units outstanding under any Equity Incentive Plan that have not vested or that are subject to restrictions as of the Expiration Date, and tenders of such unvested restricted stock units will not be accepted. If you are a holder of restricted stock units outstanding under any Equity Incentive Plan, you may only tender the Shares underlying such awards if they have vested and you have received the underlying Shares free of restrictions on the transfer of such Shares prior to the Expiration Date.

If you wish to tender your Shares, but (a) the certificates for your Shares are not immediately available or cannot be delivered to the Depositary by the Expiration Date, (b) you cannot comply with the procedure for book-entry transfer by the Expiration Date, or (c) your other required documents cannot be delivered to the Depositary by the Expiration Date, you can still tender your Shares if you comply with the guaranteed delivery procedures described in Section 3.

If you wish to maximize the chance that your Shares will be purchased in the Offer, you should check the box in the section of the Letter of Transmittal captioned “Shares Tendered At Price Determined Pursuant to the Offer.”

 

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If you agree to accept the Purchase Price determined in the Offer, your Shares will be deemed to be tendered at $7.00 per Share, which is the low end of the price range in the Offer. You should understand that this election may lower the Purchase Price paid to you for your Shares and could result in your Shares being purchased at $7.00 per Share, which is the low end of the price range in the Offer, less any applicable fees or withholding taxes and without interest.

We are not making the Offer to, and will not accept any tendered shares from, holders of Shares in any jurisdiction or in any circumstances where it would be illegal to do so, provided that we will comply with the requirements of Rule 13e-4(f)(8) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). However, we may, at our discretion, take any actions necessary for us to make the Offer to holders of Shares in any such jurisdiction. In any jurisdiction where the securities or blue sky laws require the Offer to be made by a licensed broker or dealer, the Offer is being made on our behalf by the Dealer Manager or one or more registered brokers or dealers, which are licensed under the laws of such jurisdiction.

You may contact the Information Agent, the Dealer Managers or your broker, dealer, commercial bank, trust company or other nominee for assistance. The contact information for the Information Agent and the Dealer Managers is set forth on the back cover of this Offer to Purchase.

 

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OUR BOARD OF DIRECTORS HAS AUTHORIZED US TO MAKE THE OFFER. HOWEVER, NONE OF THE COMPANY, THE MEMBERS OF OUR BOARD OF DIRECTORS, THE DEALER MANAGERS, THE INFORMATION AGENT OR THE DEPOSITARY HAS MADE ANY RECOMMENDATION AS TO WHETHER YOU SHOULD TENDER OR REFRAIN FROM TENDERING YOUR SHARES OR AS TO THE PURCHASE PRICE OR PURCHASE PRICES AT WHICH YOU MAY CHOOSE TO TENDER YOUR SHARES. NONE OF THE COMPANY, THE MEMBERS OF OUR BOARD OF DIRECTORS, THE DEALER MANAGERS, THE INFORMATION AGENT OR THE DEPOSITARY HAS AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR BEHALF AS TO WHETHER YOU SHOULD TENDER OR REFRAIN FROM TENDERING YOUR SHARES OR AS TO THE PURCHASE PRICE OR PURCHASE PRICES AT WHICH YOU MAY CHOOSE TO TENDER YOUR SHARES. NONE OF THE COMPANY, THE MEMBERS OF OUR BOARD OF DIRECTORS, THE DEALER MANAGERS, THE INFORMATION AGENT OR THE DEPOSITARY HAS AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL. YOU SHOULD NOT RELY ON ANY RECOMMENDATION, OR ANY SUCH REPRESENTATION OR INFORMATION, AS HAVING BEEN AUTHORIZED BY US, ANY MEMBER OF OUR BOARD OF DIRECTORS, THE DEALER MANAGERS, THE INFORMATION AGENT OR THE DEPOSITARY.

THE STATEMENTS MADE IN THIS OFFER TO PURCHASE ARE MADE AS OF THE DATE ON THE COVER PAGE, AND THE STATEMENTS INCORPORATED BY REFERENCE ARE MADE AS OF THE DATE OF THE DOCUMENTS INCORPORATED BY REFERENCE. THE DELIVERY OF THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL SHALL NOT UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR INCORPORATED BY REFERENCE IS CORRECT AS OF A LATER DATE OR THAT THERE HAS NOT BEEN ANY CHANGE IN SUCH INFORMATION OR IN OUR AFFAIRS SINCE SUCH DATES.

The Dealer Managers are acting exclusively for the Company and no one else in connection with this Offer to Purchase and the Offer and will not regard any other person (whether or not a recipient of this Offer to Purchase) as its client in relation to this Offer to Purchase or the Offer and accordingly will not be responsible to anyone other than the Company for providing the protections afforded to its clients, or for providing advice in connection with the Offer, the contents of this Offer to Purchase or any other transaction, arrangement or other matter referred to in this Offer to Purchase as relevant. Neither the Dealer Managers nor any persons associated or affiliated with the Dealer Managers accepts any responsibility whatsoever or makes any warranty or representation, express or implied, in relation to the contents of this Offer to Purchase, including its accuracy, completeness or verification, or for any other statement made or purported to be made by or on behalf of it, the Company or the Company’s directors in connection with the Company and/or the Offer, and the Dealer Managers accordingly disclaim, to the fullest extent permitted by law, any and all liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above) which they might otherwise be found to have in respect of this Offer to Purchase or any such statement.

 

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TABLE OF CONTENTS

 

       Page  

1.

  Number of Shares; Price; Proration.      19  

2.

  Purpose of the Offer; Certain Effects of the Offer; Plans and Proposals      22  

3.

  Procedures for Tendering Shares      24  

4.

  Withdrawal Rights      30  

5.

  Purchase of Shares and Payment of Purchase Price      31  

6.

  Conditional Tender of Shares      32  

7.

  Conditions of the Offer      32  

8.

  Price Range of Shares; Dividends      35  

9.

  Source and Amount of Funds      36  

10.

  Certain Information Concerning Us      36  

11.

  Financial Statements and Information      37  

12.

  Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares      38  

13.

  Certain Legal Matters; Regulatory Approvals      47  

14.

  United States Federal Income Tax Consequences      47  

15.

  Extension of the Offer; Termination; Amendment      54  

16.

  Fees and Expenses      55  

17.

  Miscellaneous      56  

 

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SUMMARY TERM SHEET

We are providing this summary term sheet for your convenience. The information contained in this Summary Term Sheet is a summary only and is not meant to be a substitute for the more detailed description and information contained in the remainder of this Offer to Purchase, the accompanying Letter of Transmittal and other related materials as may be amended or supplemented from time to time. To understand the Offer fully and for a more complete description of the terms of the Offer, we urge you to read carefully this Offer to Purchase, the Letter of Transmittal and the other related materials that constitute part of the Offer in their entirety. We have included references to the sections of this Offer to Purchase where you will find a more complete description of the topics in this summary.

Who is offering to purchase my Shares?

The issuer of the Shares, Designer Brands Inc., an Ohio corporation, is offering to purchase your Shares. See Section 1.

What is DBI offering to purchase?

We are offering to purchase up to $100 million of our Shares based on the Purchase Price. See Section 1.

In accordance with the rules of the SEC, if more than $100 million in aggregate purchase price of Shares is tendered in the Offer at or below the Purchase Price, we may increase the number of Shares accepted for payment in the Offer by no more than 2% of the outstanding Shares without extending the Expiration Date. See Section 1.

What is the purpose of the Offer?

We believe that the repurchase of Shares pursuant to the Offer will allow us to return value to our shareholders and that a prompt deployment of the majority of the anticipated proceeds from our proposed new term loan for this purpose is a prudent use of our financial resources. The Offer provides a mechanism for completing a sizeable repurchase of Shares more rapidly than would be possible through open market repurchases.

The modified Dutch auction tender offer set forth in this Offer to Purchase provides our Class A shareholders with the opportunity to tender all or a portion of their Shares and thereby receive a return of some or all of their investment in the Company, if they so elect.

The Offer also provides our shareholders with an efficient way to sell their Shares without incurring brokerage fees or commissions associated with open market sales; however, shareholders who hold Shares through nominees are urged to consult their nominees to determine whether transaction costs may apply.

If we complete the Offer, shareholders who do not participate in the Offer will automatically increase their relative percentage ownership interest in the Company and its future operations at no additional cost to them. These shareholders will also bear the attendant risks and rewards associated with owning the equity securities of the Company. See Section 2.

How many Shares will we purchase in the Offer?

Upon the terms and subject to the conditions of the Offer, we will purchase up to $100 million of Shares based on the Purchase Price in the Offer or a lower amount depending on the number of Shares properly tendered and not properly withdrawn pursuant to the Offer. Because the Purchase Price will be determined after the Expiration Date, the exact number of Shares that will be purchased will not be known until after that time. We will select the lowest single purchase price, not greater than $8.00 nor less than $7.00 per Share, that will allow us to purchase

 

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the maximum number of Shares for an aggregate purchase price not exceeding $100 million. All Shares purchased in the Offer will be purchased at the Purchase Price, including Shares tendered at a price lower than the Purchase Price, subject to “Odd Lot” priority, proration and the conditional tender provisions described in this Offer to Purchase.

As of June 5, 2023, we had 58,073,011 issued and outstanding Shares and 7,732,733 issued and outstanding shares of Class B Common Shares. Shares of Class B Common Shares may be converted into Shares at a one-to-one ratio. At the minimum Purchase Price of $7.00 per Share, we would purchase 14,285,714 Shares if the Offer is fully subscribed, which would represent approximately 25% of our outstanding Shares, or approximately 22% of our outstanding Shares (assuming conversion of all shares of Class B Common Shares), as of June 5, 2023. At the maximum Purchase Price of $8.00 per Share, we would purchase 12,500,000 Shares if the Offer is fully subscribed, which would represent approximately 22% of our outstanding Shares, or approximately 19% of our outstanding Shares (assuming conversion of all shares of Class B Common Shares), as of June 5, 2023. If the Offer is fully subscribed at the minimum Purchase Price, we would have approximately 43,787,297 Shares outstanding immediately following the purchase of Shares tendered in the Offer. If the Offer is fully subscribed at the maximum Purchase Price, we would have approximately 45,573,011 Shares outstanding immediately following the purchase of Shares tendered in the Offer. The actual number of Shares outstanding immediately following completion of the Offer will depend on the number of Shares tendered and purchased in the Offer, as well as the Purchase Price for such Shares. As of June 5, 2023, an aggregate of approximately 5,195,133 Shares remained available for future awards under the Equity Incentive Plans, and approximately 9,916,281 Shares were subject to currently outstanding options and other share-based awards (assuming payout at 100% for awards with open performance periods). See Section 12.

We reserve the right to purchase additional Shares in the Offer, subject to applicable law. See Section 1. In accordance with the rules of the SEC, if more than $100 million purchase price of Shares is tendered in the Offer at or below the Purchase Price, we may increase the number of Shares accepted for payment in the Offer by no more than 2% of the outstanding Shares without extending the Expiration Date. See Section 1.

The Offer is not conditioned on any minimum number of Shares being tendered; however, the Offer is subject to certain other conditions, including the Financing Condition. See Section 7.

What will be the purchase price for the Shares and what will be the form of payment?

We are conducting the Offer through a procedure commonly called a modified “Dutch auction.” This procedure allows you to select the price, within a price range specified by us, at which you are willing to tender your Shares. The price range for the Offer is $7.00 to $8.00 per Share. We will select the single lowest purchase price (in increments of $0.05), not greater than $8.00 nor less than $7.00 per Share, that will allow us to purchase up to $100 million in value of Shares at such price, based on the number of Shares tendered, or, if fewer Shares are properly tendered, all Shares that are properly tendered and not properly withdrawn. We will purchase all Shares at the Purchase Price, even if you have selected a purchase price lower than the Purchase Price, but we will not purchase any Shares tendered at a price above the Purchase Price. However, because of the “Odd Lot” priority, proration and conditional tender provisions described in this Offer to Purchase, it is possible that not all of the Shares tendered at or below the Purchase Price will be purchased if Shares having an aggregate purchase price in excess of $100 million are properly tendered at or below the Purchase Price and not properly withdrawn.

If you wish to maximize your chances of having your Shares purchased in the Offer, you should check the box in the subsection entitled “Shares Tendered At Price Determined Pursuant to the Offer” (in the section captioned “Price Per Share At Which Shares Are Being Tendered”) in the Letter of Transmittal, which will indicate that you will accept the Purchase Price as determined by us in accordance with the terms and subject to the conditions of the Offer. If you agree to accept the Purchase Price, your Shares will be deemed to have been tendered at the minimum price of $7.00 per Share. You should understand that this election may have the effect of

 

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lowering the Purchase Price and could result in your Shares being purchased at $7.00 per Share, which is the low end of the price range in the Offer, less any applicable withholding taxes and without interest, a price that is below the last reported sale price of the Shares on the NYSE on June 7, 2023, the last full trading day prior to the commencement of the Offer, which was $7.21 per Share, and could be below the last reported sale price of the Shares on the NYSE on the Expiration Date. Accordingly, an election to accept the Purchase Price determined in the Offer may lower the Purchase Price to a price below such closing price and could be below the reported closing price on the Expiration Date. Under no circumstances will we pay interest on the Purchase Price, even if there is a delay in making payment. See the Introduction, Section 1 and Section 3.

We will publicly announce the Purchase Price promptly after we have determined it. On the terms and subject to the conditions of the Offer (including the “Odd Lot” priority, proration and conditional tender provisions), as promptly as practicable following the Expiration Date, we will pay the Purchase Price in cash, less any applicable withholding taxes and without interest, to all holders of Shares who have properly tendered (and have not properly withdrawn) their Shares that have been accepted for payment at prices equal to or less than the Purchase Price. See Section 1.

Shareholders are urged to obtain current market quotations for the Shares before deciding whether and at what price or prices to tender their Shares. See Section 8.

How will we fund the purchase of the Shares?

The maximum value of Shares purchased in the Offer will be $100 million. We expect that the maximum aggregate cost of this purchase, including all fees and expenses applicable to the Offer, to be approximately $102 million. We expect to use the net proceeds from the Financing Arrangement (as defined below) to finance the purchase of the Shares. At the time of this Offer, we do not have any alternative financing or plans in the event the Financing Arrangement does not provide the funds necessary to finance our payments of the Shares. Our obligation to consummate the Offer is subject in all respects to the Financing Condition. See “Are there any conditions to the Offer?” below. Subject to Rule 14e-1(c) under the Exchange Act, if the Financing Condition (as defined herein) is not satisfied, we will not be required to accept for purchase, or to pay for, any Shares. See Section 9.

In accordance with the rules of the SEC, we may increase the number of Shares accepted for payment in the Offer by no more than 2% of the outstanding Shares without extending the Expiration Date. See Section 1.

How long do I have to tender my Shares?

You may tender your Shares until the Offer expires. The Offer will expire at 12:00 Midnight, at the end of the day, New York City time, on July 7, 2023, unless we extend or terminate the Offer. The term Expiration Date refers to the specific time and date on which the Offer expires. See Section 1. We may choose to extend the Offer at any time and for any reason, subject to applicable laws. We cannot assure you, however, that we will extend the Offer or, if we extend it, for how long. See Section 1 and Section 15.

Beneficial owners holding their Shares through a broker, dealer, commercial bank, trust company or other nominee should be aware that their broker, dealer, commercial bank, trust company or other nominee may establish its own earlier deadlines for you to instruct it to accept the Offer on your behalf. Accordingly, beneficial owners wishing to participate in the Offer should contact their broker, dealer, commercial bank, trust company or other nominee as soon as possible in order to determine the times by which such owner must take action in order to participate in the Offer. We urge you to contact the broker, dealer, commercial bank, trust company or other nominee that holds your Shares to find out its deadline. See Section 3.

 

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Can the Offer be extended, amended or terminated, and if so, under what circumstances?

Yes. We can extend or amend the Offer in our sole discretion at any time, subject to applicable laws. If we extend the Expiration Date for the Offer, we will delay the acceptance of any Shares that have been tendered. See Section 15. We can also terminate the Offer under certain circumstances, as provided in this Offer to Purchase, and subject to applicable law. See Section 7.

How will I be notified if you extend the Offer or amend the terms of the Offer?

If we extend the Offer, we will issue a press release not later than 9:00 a.m., New York City time, on the first (1st) business day after the previously scheduled Expiration Date. If we extend the Offer, you may withdraw your Shares until the Expiration Date, as extended. We will announce any amendment to the terms of the Offer by making a public announcement of the amendment and filing our Issuer Tender Offer Statement on Schedule TO (the “Schedule TO”). See Section 15.

Are there any conditions to the Offer?

Yes. Our obligation to accept for payment and pay for your tendered Shares depends upon a number of conditions, including the Financing Condition (as defined below) that must be satisfied in our reasonable judgment or waived on or prior to the Expiration Date, including but not limited to:

 

   

the consummation by the Company of the proposed new term loan in an aggregate principal of $135.0 million (the “Financing Arrangement”) subsequent to the date hereof and on or prior to the Expiration Date, on terms and conditions reasonably satisfactory to us (the “Financing Condition”). There can be no assurance the Financing Arrangement will be available, and thus no assurance that the Financing Condition will be satisfied. See Section 9;

 

   

no legal action shall have been threatened, pending or taken that might adversely affect the Offer;

 

   

no general suspension of trading in, or limitation on prices for, securities on any United States national securities exchange or in the over-the-counter market, declaration of a banking moratorium or any suspension of payments in respect of banks in the United States shall have occurred;

 

   

no decrease of more than 10% in the sale price of the Shares on the NYSE or in the general level of market prices for equity securities in the United States of the New York Stock Exchange Index, the Dow Jones Industrial Average, the Nasdaq Global Market Composite Index or Standard & Poor’s Composite Index of 500 Industrial Companies, in each case measured as of the close of trading and from the close of trading on June 7, 2023, the last full trading day prior to the commencement of the Offer, shall have occurred;

 

   

no commencement of a war, armed hostilities or other similar national or international calamity, including, but not limited to, an act of terrorism, directly or indirectly involving the United States, on or after June 7, 2023 shall have occurred nor shall any material escalation of any war or armed hostilities which had commenced prior to June 7, 2023 have occurred;

 

   

no limitation, whether or not mandatory, by any governmental, regulatory or administrative agency or authority on, or any event that, in our reasonable judgment, could materially affect, the extension of credit by banks or other lending institutions in the United States shall have occurred;

 

   

no change in the general political, market, economic or financial conditions, domestically or internationally, that is reasonably likely to materially and adversely affect our business or the trading in the Shares shall have occurred or, in the case of any of the foregoing existing at the time of the commencement of the Offer, shall have materially accelerated or worsened;

 

   

no person shall have proposed, announced or taken certain actions that could lead to the acquisition of us or a change of control transaction;

 

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no change or changes in our or our subsidiaries’ business, condition (financial or otherwise), properties, assets, income, operations or prospects shall have occurred or shall have been threatened on or after June 7, 2023 that, in our reasonable judgment, has or could have a material adverse effect on us or any of our subsidiaries or that could materially adversely affect the benefits of the Offer to us;

 

   

any approval, permit, authorization, favorable review or consent of any governmental entity required to be obtained in connection with the Offer shall have been obtained on terms satisfactory to us in our reasonable discretion; and

 

   

we shall not have determined that as a result of the consummation of the Offer and the purchase of Shares that there will be a reasonable likelihood that the Shares either (i) will be held of record by fewer than 300 persons or (ii) will be delisted from the NYSE or be eligible for deregistration under the Exchange Act.

For a more detailed discussion of these and other conditions to the Offer, please see Section 7.

The Offer is not conditioned on any minimum number of Shares being tendered.

How do I tender my Shares?

If you want to tender all or part of your Shares, you must do one of the following by the Expiration Date:

 

   

if your Shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, contact the nominee and request that the nominee tender your Shares for you. Beneficial owners should be aware that their broker, dealer, commercial bank, trust company or other nominee may establish its own earlier deadlines for participation in the Offer. Accordingly, beneficial owners wishing to participate in the Offer should contact their broker, dealer, commercial bank, trust company or other nominee as soon as possible in order to determine the times by which such owner must take action in order to participate in the Offer;

 

   

if you hold certificates or book-entry Shares registered in your own name, complete and sign a Letter of Transmittal according to its instructions, and deliver it, together with any required signature guarantees, the certificates for your Shares and any other documents required by the Letter of Transmittal, to Computershare Trust Company, N.A., the Depositary for the Offer, at the address appearing on the back cover page of this Offer to Purchase;

 

   

if you are a Book-Entry Transfer Facility, tender your Shares according to the procedure for book-entry transfer described in Section 3;

 

   

we are not offering, as part of the Offer, to purchase any vested stock options outstanding under any Equity Incentive Plan that have not been exercised, and tenders of such stock options will not be accepted. If you are a holder of vested but unexercised stock options outstanding under any Equity Incentive Plan, you may, subject to the requirements of the applicable Equity Incentive Plan and your award agreement, exercise such options and tender some or all of the Shares issued pursuant to such exercise in the Offer. Such holders must complete the exercise of such vested options sufficiently in advance of the Expiration Date in order to provide adequate time to validly tender any such Shares in the Offer. Exercises of options cannot be revoked even if some or all of the Shares received upon the exercise thereof and tendered in the Offer are not purchased pursuant to the Offer for any reason; or

 

   

we are not offering, as part of the Offer, to purchase restricted stock units outstanding under any Equity Incentive Plan that have not vested or that are subject to restrictions as of the Expiration Date, and tenders of such unvested restricted stock units will not be accepted. If you are a holder of restricted stock units outstanding under an Equity Incentive Plan, you may only tender the Shares underlying such awards if they have vested and you have received the underlying Shares free of restrictions on the transfer of such Shares prior to the Expiration Date.

 

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If you wish to tender your Shares, but (a) the certificates for your Shares are not immediately available or cannot be delivered to the Depositary by the Expiration Date, (b) you cannot comply with the procedure for book-entry transfer by the Expiration Date, or (c) your other required documents cannot be delivered to the Depositary by the Expiration Date, you can still tender your Shares if you comply with the guaranteed delivery procedures described in Section 3.

We are not making the Offer to, and will not accept any tendered shares from, holders of Shares in any jurisdiction or in any circumstances where it would be illegal to do so, provided that we will comply with the requirements of Rule 13e-4(f)(8) promulgated under the Exchange Act. However, we may, at our discretion, take any actions necessary for us to make the Offer to holders of Shares in any such jurisdiction. In any jurisdiction where the securities or blue sky laws require the Offer to be made by a licensed broker or dealer, the Offer is being made on our behalf by the Dealer Managers or one or more registered brokers or dealers, which are licensed under the laws of such jurisdiction.

You may contact the Information Agent, the Dealer Managers or your broker, dealer, commercial bank, trust company or other nominee for assistance. The contact information for the Information Agent and the Dealer Managers is set forth on the back cover of this Offer to Purchase. See Section 3 and the Instructions to the Letter of Transmittal.

If you are in any doubt as to the action you should take, it is recommended that you seek your own personal financial advice from your stockbroker, bank manager, lawyer, accountant or other independent professional financial adviser immediately.

Once I have tendered Shares in the Offer, may I withdraw my tendered Shares?

Yes. You may withdraw any Shares you have tendered at any time prior to the Expiration Date. If, following the Expiration Date, we have not accepted for payment the Shares you have tendered to us, you may also withdraw such previously tendered Shares at any time after 12:00 Midnight, at the end of the day, New York City time, on August 4, 2023. See Section 4.

How do I withdraw Shares I previously tendered?

If you are a registered holder of Shares, to properly withdraw your Shares, you must deliver on a timely basis a written notice of your withdrawal to the Depositary at one of the addresses appearing on the back cover of this Offer to Purchase. Your notice of withdrawal must specify your name, the number of Shares to be withdrawn and the name of the registered holder of the Shares. Some additional requirements apply if the certificates for Shares to be withdrawn have been delivered to the Depositary or if your Shares have been tendered under the procedure for book-entry transfer set forth in Section 3. If you hold Shares through a broker, dealer, commercial bank, trust company or similar institution, you should consult that institution on the procedures you must comply with and the time by which such procedures must be completed in order for that institution to provide a written notice of withdrawal. See Section 4.

May I tender only a portion of the Shares that I hold?

Yes. You do not have to tender all or any minimum amount of the Shares that you own to participate in the Offer. However, to qualify for the priority in case of proration, an Odd Lot Holder (as defined below) must tender all Shares owned by any such Odd Lot Holder, as described in Section 1. In addition, if as a result of proration the Company accepts conditional tenders by random lot, a holder making a conditional tender must have tendered all of its shares to qualify for such random selection.

 

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In what order will you purchase the tendered Shares?

If the terms and conditions of the Offer have been satisfied or waived and $100 million in aggregate purchase price of Shares or less is properly tendered and not properly withdrawn prior to the Expiration Date, we will buy all Shares properly tendered at prices at or below the Purchase Price and not properly withdrawn.

If the conditions to the Offer have been satisfied or waived and more than $100 million in aggregate purchase price of Shares has been properly tendered and not properly withdrawn prior to the Expiration Date, we will purchase Shares on the following basis:

 

   

first, we will purchase Odd Lots (as defined in Section 1) of fewer than 100 Shares at the Purchase Price from shareholders who properly tender all of their Shares at or below the Purchase Price and who do not properly withdraw them before the Expiration Date. Tenders of less than all of the Shares owned, beneficially or of record, by such Odd Lot Holder (as defined in Section 1) will not qualify for this preference;

 

   

second, after purchasing all Odd Lots that were properly tendered at or below the Purchase Price, subject to the conditional tender provisions described in Section 6 (whereby a holder may specify a minimum number of such holder’s Shares that must be purchased if any such Shares are purchased), we will purchase all Shares properly tendered at or below the Purchase Price on a pro rata basis with appropriate adjustment to avoid purchases of fractional Shares; and

 

   

third, only if necessary to permit us to purchase $100 million in aggregate purchase price of Shares (or such greater amount as we may elect to purchase, subject to applicable law), we will purchase Shares conditionally tendered (for which the condition was not initially satisfied) at or below the Purchase Price, by random lot, to the extent feasible. To be eligible for purchase by random lot, shareholders whose Shares are conditionally tendered must have tendered all of their Shares at or below the Purchase Price.

Therefore, because of “Odd Lot” priority, proration and conditional tender provisions described above, we may not purchase all of the Shares that you tender even if you tender them at or below the Purchase Price if Shares having an aggregate purchase price in excess of $100 million are properly tendered (and not properly withdrawn) at or below the Purchase Price. See Section 1 and Section 6.

Has the Company or its Board of Directors adopted a position on the Offer?

Our Board of Directors has authorized us to make the Offer. However, none of the Company, the members of our Board of Directors, the Dealer Managers, the Depositary or the Information Agent makes any recommendation to you as to whether you should tender or refrain from tendering your Shares or as to the purchase price or purchase prices at which you may choose to tender your Shares. We cannot predict how the Shares will trade after the Expiration Date, and it is possible that the price of our Shares will trade above the Purchase Price after the Expiration Date. You must make your own decision as to whether to tender your Shares and, if so, how many Shares to tender and the purchase price or purchase prices at which you will tender them. We recommend that you carefully read the information in this Offer to Purchase, the Letter of Transmittal and the other related materials that constitute part of the Offer, including our reasons for making the Offer, before taking any action with respect to the Offer. See Section 2. In addition, you should discuss whether to tender your Shares with your broker or other financial, legal or tax advisors.

If I decide not to tender, how will the Offer affect my Shares?

Shareholders who decide not to tender will own a greater percentage interest in the outstanding Shares following the consummation of the Offer. See Section 2.

 

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Following the Offer, will you continue as a public company?

Yes. The Shares will continue to be listed on the NYSE and we will continue to be subject to the periodic reporting requirements of the Exchange Act. See Section 2.

When and how will you pay me for the Shares I tender?

If your Shares are accepted for purchase in the Offer, we will pay the Purchase Price to you, in cash, less applicable withholding taxes and without interest, promptly after the Expiration Date. We will announce the preliminary results of the Offer, including price and preliminary information about any expected proration, on the next business day following the Expiration Date. We do not expect, however, to announce the final results of any proration or the Purchase Price and to begin paying for tendered Shares until after the Expiration Date and the guaranteed delivery period. We will pay for the Shares accepted for purchase by depositing the aggregate purchase price with the Depositary promptly after the Expiration Date. The Depositary will act as your agent and will transmit to you the payment for all of your Shares accepted for payment. See Section 1 and Section 5.

If I am a holder of vested but unexercised stock options outstanding under an Equity Incentive Plan, how do I participate in the Offer?

We are not offering, as part of the Offer, to purchase any vested stock options outstanding under any Equity Incentive Plan that have not been exercised, and tenders of such stock options will not be accepted. If you are a holder of vested but unexercised stock options outstanding under an Equity Incentive Plan, you may, subject to the requirements of the applicable Equity Incentive Plan and your award agreement, exercise such options and tender some or all of the Shares issued pursuant to such exercise in the Offer. You must complete the exercise of such vested options sufficiently in advance of the Expiration Date in order to provide adequate time to validly tender any such Shares in the Offer. Exercises of options cannot be revoked even if some or all of the Shares received upon the exercise thereof and tendered in the Offer are not purchased pursuant to the Offer for any reason. See Section 3.

If I am a holder of restricted stock units, how do I participate in the Offer?

We are not offering, as part of the Offer, to purchase restricted stock units outstanding under any Equity Incentive Plan that have not vested or that are subject to restrictions as of the Expiration Date, and tenders of such unvested restricted stock units will not be accepted. If you are a holder of restricted stock units outstanding under an Equity Incentive Plan, you may only tender the Shares underlying such awards if they have vested and you have received the underlying Shares free of restrictions on the transfer of such Shares prior to the Expiration Date. See Section 3.

What is the last reported sale price of my Shares?

The Shares are listed and traded on the NYSE under the symbol “DBI.” On June 7, 2023 the last full trading day before the commencement of the Offer, the last reported sale price of the Shares on the NYSE was $7.21 per Share, which is above the $7.00 per Share lower end of the price range for the Offer. Accordingly, an election to accept the Purchase Price determined in the Offer may lower the Purchase Price to a price below such closing price and could be below the reported closing price on the Expiration Date. You are urged to obtain current market quotations for the Shares before deciding whether and at what purchase price or purchase prices to tender your Shares. See Section 8.

Will I have to pay brokerage commissions if I tender my Shares?

If you are a registered shareholder and you tender your Shares directly to the Depositary, you will not incur any brokerage commissions. If you hold Shares through a broker, dealer, commercial bank, trust company or other nominee, we urge you to consult your broker, dealer, commercial bank, trust company or other nominee to determine whether any transaction costs are applicable. See the Introduction and Section 3.

 

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Will I have to pay share transfer tax if I tender my Shares?

If you instruct the Depositary in the Letter of Transmittal to make the payment for tendered Shares to the registered holder of such Shares, you will not incur any share transfer tax. If you give special instructions to the Depositary in connection with your tender of Shares, or if tendered certificates for Shares are registered in the name of someone other than the person signing the Letter of Transmittal, then share transfer taxes may apply. See Section 5.

What are the U.S. federal income tax consequences if I tender my Shares?

Generally, if you are a U.S. Holder (as defined in Section 14), your receipt of cash from us in exchange for the Shares you tender will be a taxable transaction for U.S. federal income tax purposes. The cash you receive for your tendered Shares will generally be treated for U.S. federal income tax purposes either as consideration received in respect of a sale or exchange of the Shares purchased by us or as a distribution from us in respect of Shares. See Section 14 for a more detailed discussion of the tax treatment of the Offer. We urge you to consult your tax advisor as to the particular tax consequences to you of the Offer. If you are a Non-U.S. Holder (as defined in Section 14), because it is unclear whether the cash you receive in connection with the Offer will be treated (i) as proceeds of a sale or exchange or (ii) as a distribution, the Depositary or other applicable withholding agent may treat such payment as a dividend distribution for withholding purposes. Accordingly, if you are a Non-U.S. Holder, you may be subject to withholding on payments to you at a rate of 30% of the gross proceeds paid, unless you establish an entitlement to a reduced or zero rate of withholding by timely completing, under penalties of perjury, the applicable Form W-8. See Section 14 for a more detailed discussion of the tax treatment of the Offer. Non-U.S. Holders are urged to consult their tax advisors regarding the application of U.S. federal income tax withholding and backup withholding, including eligibility for a withholding tax reduction or exemption and the refund procedure.

What is the accounting treatment of the Offer?

The accounting for our purchase of Shares in the Offer will result in a reduction of our total equity in an amount equal to the aggregate purchase price of the Shares we purchase plus the fees and any estimated excise taxes due, a corresponding reduction in cash and cash equivalents and a reduction in the weighted average number of outstanding Shares for the purposes of calculating earnings per Share in an amount equal to the weighted average number of Shares that we repurchase pursuant to the Offer. See Section 2.

Does the Company intend to repurchase any Shares other than pursuant to the Offer during or after the Offer?

Rule 13e-4(f) under the Exchange Act prohibits us from purchasing any Shares, other than in the Offer, until at least ten business days have elapsed after the Expiration Date. Accordingly, any additional purchases outside the Offer may not be consummated until at least ten business days have elapsed after the Expiration Date.

What will happen to the Company’s existing repurchase program?

On August 17, 2017, our Board of Directors authorized the repurchase of an additional $500 million Shares under our share repurchase program, which was added to the $33.5 million remaining from the previous authorization. As of June 5, 2023, $187.4 million of Shares remained available for repurchase under the program, and the Offer is being conducted as part of the repurchase program.

Beginning on the eleventh business day after the Expiration Date, we may make Share repurchases from time to time on the open market and/or in private transactions, including accelerated share repurchase transactions. Whether we make additional repurchases will depend on many factors, including, without limitation, the number of Shares, if any, that we purchase in this Offer, our business and financial performance and situation, the business and market conditions at the time, including the price of the Shares, and such other factors as we may

 

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consider relevant. Any of these repurchases may be on the same terms or on terms that are more or less favorable to the selling stockholders in those transactions than the terms of the Offer.

Whom should I contact with questions about the Offer?

The Information Agent or the Dealer Managers can help answer your questions. The Information Agent is Georgeson LLC and the Dealer Managers are BofA Securities, Inc. and BMO Capital Markets Corp. Their contact information is set forth below.

The Information Agent for the Offer is:

Georgeson LLC

1290 Avenue of the Americas, 9th Floor

New York, NY 10104

Shareholders, Banks and Brokers

Call Toll-Free: 1 (888) 206-5896

The Dealer Managers for the Offer are:

BofA Securities, Inc.

One Bryant Park, 8th Floor

New York, New York 10036

Call Toll-Free: (888) 803-9655

BMO Capital Markets Corp.

151 W 42nd Street, 32nd Floor

New York, New York 10036

Call: (212) 702-1101

CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

This Offer to Purchase and other documents we file with the SEC that are incorporated by reference in this Offer to Purchase contain “forward-looking statements.” Forward-looking statements can be identified by words such as “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “may,” “will,” “might,” “should,” “could,” “would,” “seek,” “pursue,” and “anticipate” or the negative or other variation of these or similar words or may include discussions of strategy or risks and uncertainties. We describe certain risks, uncertainties and assumptions that could affect the outcome or results of operations in the “Risk Factors” section of (i) our Annual Report on Form 10-K for the fiscal year ended January 28, 2023 and (ii) any subsequently filed Annual Report on Form 10-K, Quarterly Report on Form 10-Q, and Current Report on Form 8-K.

Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Therefore, we caution you against relying on any of these forward-looking statements.

For further information on factors that could cause actual results to materially differ from expectations, please see the Company’s publicly available SEC filings, including the Company’s Form 10-K for the fiscal year ended January 28, 2023, filed with the SEC on March 16, 2023 and Form 10-Q for the fiscal period ended April 29, 2023, filed with the SEC on June 8, 2023. The Company does not update any of its forward-looking statements except as required by law.

 

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INTRODUCTION

To the holders of our Shares:

We are offering to purchase up to $100 million in aggregate purchase price of our Shares at a price calculated as described herein that is a price not greater than $8.00 nor less than $7.00 per Share to the seller in cash, less any applicable withholding taxes and without interest, upon the terms and subject to the conditions described in this Offer to Purchase, in the related Letter of Transmittal and in other related materials as may be amended or supplemented from time to time.

Upon the terms and subject to the conditions of the Offer, we will determine a single per Share price that we will pay for Shares properly tendered and not properly withdrawn from the Offer, taking into account the total number of Shares properly tendered and the prices specified, or deemed specified, by tendering shareholders. This Purchase Price will be the lowest single purchase price (in increments of $0.05), not greater than $8.00 nor less than $7.00 per Share, that would allow us to purchase the maximum number of Shares for an aggregate purchase price not exceeding $100 million, or all Shares properly tendered and not properly withdrawn in the event that less than $100 million in aggregate purchase price of Shares is properly tendered and not properly withdrawn.

We may not purchase all of the Shares tendered at or below the Purchase Price because of proration, “Odd Lot” priority and conditional tender provisions described in this Offer to Purchase.

Upon the terms and subject to the conditions of the Offer, if $100 million in aggregate purchase price of Shares or less is properly tendered and not properly withdrawn, we will purchase all Shares properly tendered at or below the Purchase Price and not properly withdrawn prior to the Expiration Date. Shares not purchased in the Offer, including Shares tendered at prices in excess of the Purchase Price and Shares not purchased because of proration or conditional tender, will be returned to the tendering shareholders promptly after the Expiration Date. See Section 1.

We reserve the right, in our sole discretion, to change the per Share purchase price range and to increase or decrease the number of Shares sought in the Offer, subject to applicable law. In accordance with the rules of the SEC, if more than $100 million in aggregate purchase price of Shares is tendered in the Offer at or below the Purchase Price, we may increase the number of Shares accepted for payment in the Offer by no more than 2% of the outstanding Shares without extending the Expiration Date. See Section 1.

If you are a holder of vested but unexercised stock options outstanding under an Equity Incentive Plan, you may, subject to the requirements of the applicable Equity Incentive Plan and your award agreement, exercise such options and tender some or all of the Shares issued pursuant to such exercise in the Offer. You must complete the exercise of such vested options sufficiently in advance of the Expiration Date in order to provide adequate time to validly tender any such Shares in the Offer. Exercises of options cannot be revoked even if some or all of the Shares received upon the exercise thereof and tendered in the Offer are not purchased pursuant to the Offer for any reason. If you are a holder of restricted stock units outstanding under an Equity Incentive Plan, you may only tender the Shares underlying such awards if they have vested and you have received the underlying Shares free of restrictions on the transfer of such Shares prior to the Expiration Date.

THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO THE FINANCING CONDITION AND CERTAIN OTHER CONDITIONS. SEE SECTION 7.

OUR BOARD OF DIRECTORS HAS AUTHORIZED US TO MAKE THE OFFER. HOWEVER, NONE OF THE COMPANY, THE MEMBERS OF OUR BOARD OF DIRECTORS, THE DEALER MANAGERS, THE INFORMATION AGENT OR THE DEPOSITARY, MAKES ANY

 

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RECOMMENDATION TO YOU AS TO WHETHER YOU SHOULD TENDER OR REFRAIN FROM TENDERING YOUR SHARES OR AS TO THE PURCHASE PRICE OR PURCHASE PRICES AT WHICH YOU MAY CHOOSE TO TENDER YOUR SHARES. NEITHER WE NOR ANY MEMBER OF OUR BOARD OF DIRECTORS, THE DEALER MANAGERS, THE INFORMATION AGENT OR THE DEPOSITARY HAS AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION WITH RESPECT TO THE OFFER. YOU MUST MAKE YOUR OWN DECISION AS TO WHETHER TO TENDER YOUR SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PURCHASE PRICE OR PURCHASE PRICES AT WHICH YOU WILL TENDER THEM. WE RECOMMEND THAT YOU CONSULT YOUR OWN FINANCIAL, LEGAL AND TAX ADVISORS, AND READ CAREFULLY AND EVALUATE THE INFORMATION IN THIS OFFER TO PURCHASE AND IN THE LETTER OF TRANSMITTAL, INCLUDING OUR REASONS FOR MAKING THE OFFER, BEFORE TAKING ANY ACTION WITH RESPECT TO THE OFFER. SEE SECTION 2.

We will pay all reasonable out-of-pocket fees and expenses incurred in connection with the Offer by the Dealer Managers, the Information Agent and the Depositary. See Section 16.

As of June 5, 2023, we had 58,073,011 issued and outstanding Shares and 7,732,733 issued and outstanding shares of Class B Common Shares. Shares of Class B Common Shares may be converted into Shares at a one-to-one ratio. At the minimum Purchase Price of $7.00 per Share, we would purchase 14,285,714 Shares if the Offer is fully subscribed, which would represent approximately 25% of our outstanding Shares, or 22% of our outstanding Shares (assuming conversion of all shares of Class B Common Shares), as of June 5, 2023. At the maximum Purchase Price of $8.00 per Share, we would purchase 12,500,000 Shares if the Offer is fully subscribed, which would represent approximately 22% of our outstanding Shares, or 19% of our outstanding Shares (assuming conversion of all shares of Class B Common Shares), as of June 5, 2023. If the Offer is fully subscribed at the minimum Purchase Price, we would have approximately 43,787,297 Shares outstanding immediately following the purchase of Shares tendered in the Offer. If the Offer is fully subscribed at the maximum Purchase Price, we would have approximately 45,573,011 Shares outstanding immediately following the purchase of Shares tendered in the Offer. The actual number of Shares outstanding immediately following completion of the Offer will depend on the number of Shares tendered and purchased in the Offer, as well as the Purchase Price for such Shares. As of June 5, 2023, an aggregate of approximately 5,195,133 Shares remained available for future awards under the Equity Incentive Plans, and approximately 9,916,281 Shares were subject to currently outstanding options and other share-based awards (assuming payout at 100% for awards with open performance periods). See Section 12.

The Shares are listed and traded on the NYSE under the symbol “DBI.” On June 7, 2023, the last full trading day prior to the commencement of the Offer, the last reported sale price of the Shares was $7.21 per Share, which is above the $7.00 per Share lower end of the price range for the Offer. Accordingly, an election to accept the Purchase Price determined in the Offer may lower the Purchase Price to a price below such closing price and could be below the reported closing price on the Expiration Date. Shareholders are urged to obtain current market quotations for the Shares before deciding whether and at what purchase price or purchase prices to tender their Shares. See Section 8 and Section 12.

We are not making the Offer to, and will not accept any tendered shares from, holders of Shares in any jurisdiction or in any circumstances where it would be illegal to do so, provided that we will comply with the requirements of Rule 13e-4(f)(8) promulgated under the Exchange Act. However, we may, at our discretion, take any actions necessary for us to make the Offer to holders of Shares in any such jurisdiction. In any jurisdiction where the securities or blue sky laws require the Offer to be made by a licensed broker or dealer, the Offer is being made on our behalf by the Dealer Managers or one or more registered brokers or dealers, which are licensed under the laws of such jurisdiction.

The address of the Company’s principal executive office is 810 DSW Drive, Columbus, Ohio 43219 and the telephone number of the Company’s principal executive office is (614) 237-7100.

 

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THE OFFER

 

1.

Number of Shares; Price; Proration.

Upon the terms and subject to the conditions of the Offer, including the Financing Condition, we will purchase $100 million in aggregate purchase price of Shares, or all Shares properly tendered and not properly withdrawn in the event that less than $100 million in aggregate purchase price of Shares is properly tendered and not properly withdrawn. Upon the terms and subject to the conditions of the Offer, if $100 million in aggregate purchase price of Shares or less is properly tendered at or below the Purchase Price and not properly withdrawn prior to the Expiration Date, we will purchase all Shares properly tendered and not properly withdrawn.

The term “Expiration Date means 12:00 Midnight, at the end of the day, New York City time, on July 7, 2023 unless and until we, in our sole discretion, shall have extended the period of time during which the Offer will remain open, in which event the term “Expiration Date” shall refer to the latest time and date at which the Offer, as so extended by us, shall expire or unless we terminate the Offer. The term Expiration Date refers to the specific time and date on which the Offer expires. See Section 15 for a description of our right to extend, delay, terminate or amend the Offer.

In accordance with Instruction 5 of the Letter of Transmittal, shareholders desiring to tender Shares must either (i) specify that they are willing to sell their Shares to us at the Purchase Price (which could result in the tendering shareholder receiving a purchase price per Share as low as $7.00, the low end of the price range in the Offer, less any applicable withholding taxes and without interest) or (ii) specify the price or prices, not greater than $8.00 nor less than $7.00 per Share, at which they are willing to sell their Shares to us pursuant to the Offer. In the event that a shareholder specifies such a purchase price or purchase prices that exceeds the Purchase Price, the Company will not purchase the Shares of such shareholder. Prices may be specified in multiples of $0.05. Promptly following the Expiration Date, we will determine the Purchase Price that we will pay for Shares properly tendered and not properly withdrawn, taking into account the number of Shares tendered and the prices specified, or deemed specified, by tendering shareholders. The Purchase Price will be a single per Share price, equal to the lowest single purchase price, not greater than $8.00 nor less than $7.00 per Share, that would allow us to purchase the maximum number of Shares for an aggregate purchase price not exceeding $100 million, or all Shares properly tendered and not properly withdrawn in the event that less than $100 million in aggregate purchase price of Shares is properly tendered and not properly withdrawn.

Subject to completion of the Financing Condition, we will pay the Purchase Price, in cash, for all Shares purchased in the Offer, less any applicable withholding taxes and without interest, promptly after the Expiration Date. We will not purchase any Shares at a price in excess of the Purchase Price.

If you specify that you are willing to sell your Shares to us at the Purchase Price (which could result in you receiving a purchase price per Share as low as $7.00, the low end of the price range in the Offer, less any applicable withholding taxes and without interest), your Shares will be deemed to be tendered at $7.00 per Share, which is the low end of the price range in the Offer, for purposes of determining the Purchase Price. You should understand that this election may effectively lower the Purchase Price and could result in your Shares being purchased at $7.00 per Share, which is the low end of the price range in the Offer, less any applicable withholding taxes and without interest, a price that is below the last reported sale price of the Shares on the NYSE on June 7, 2023, the last full trading day prior to the commencement of the Offer, which was $7.21 per Share, and could be below the last reported sale price of the Shares on the NYSE on the Expiration Date. Accordingly, an election to accept the Purchase Price determined in the Offer may lower the final Purchase Price to a price below such closing price and could be below the reported closing price on the Expiration Date. Shareholders are urged to obtain current market quotations for the Shares.

Throughout the Offer, certain information relating to the trading price of our Shares will be available via the Information Agent at the address and telephone number set forth on the back cover page of this Offer to

 

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Purchase. We will announce the Purchase Price by press release as promptly as practicable after it has been determined. Such press release will also be filed as an amendment to our Schedule TO that we have filed with the SEC relating to the Offer. We do not expect, however, to announce the final results of any proration or the Purchase Price and to begin paying for tendered Shares until after the Expiration Date and the guaranteed delivery period.

We will only purchase Shares properly tendered at prices at or below the Purchase Price and not properly withdrawn. However, because of proration, “Odd Lot” priority and the conditional tender provisions described in this Offer to Purchase, we may not purchase all of the Shares tendered at or below the Purchase Price if Shares having an aggregate purchase price in excess of $100 million are properly tendered (and not properly withdrawn) at or below the Purchase Price. We will return all Shares tendered and not purchased pursuant to the Offer, including Shares tendered at prices in excess of the Purchase Price and Shares not purchased because of proration or conditional tenders, to the tendering shareholder at our expense promptly following the Expiration Date and the guaranteed delivery period.

By following the Instructions to the Letter of Transmittal, shareholders can specify different minimum purchase prices for specified portions of their Shares, but a separate Letter of Transmittal must be submitted for Shares tendered at each price. Shareholders can also specify the order in which the specified portions will be purchased in the event that, as a result of proration or otherwise, some but not all of the tendered Shares are purchased pursuant to the Offer. In the event a shareholder does not designate such order and fewer than all Shares are purchased due to proration, the Depositary will select the order of Shares purchased.

We expressly reserve the right, in our sole discretion, to change the per Share purchase price range and to increase or decrease the number of Shares sought in the Offer, subject to applicable law. In accordance with the rules of the SEC, if more than $100 million in aggregate purchase price of Shares is tendered in the Offer at or below the Purchase Price, we may increase the number of Shares accepted for payment in the Offer by no more than 2% of the outstanding Shares without extending the Expiration Date. However, if we purchase an additional number of Shares in excess of 2% of the outstanding Shares, decrease the maximum aggregate purchase price of Shares we may purchase in the Offer or change the range of purchase prices at which shareholders may tender their Shares, we will amend and extend the Offer to the extent required by applicable law. See Section 15.

In the event of an over-subscription of the Offer as described below, Shares tendered at or below the Purchase Price prior to the Expiration Date will be subject to proration, except for Odd Lots as described below. The withdrawal rights also expire on the Expiration Date.

THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS, INCLUDING A FINANCING CONDITION. SEE SECTION 7.

Priority of Purchases

If the terms and conditions of the Offer have been satisfied or waived and $100 million in aggregate purchase price of Shares or less is properly tendered and not properly withdrawn prior to the Expiration Date, we will buy all Shares properly tendered at prices at or below the Purchase Price and not properly withdrawn.

If the conditions to the Offer have been satisfied or waived and more than $100 million in aggregate purchase price of Shares has been properly tendered and not properly withdrawn prior to the Expiration Date, we will purchase properly tendered Shares on the basis set forth below:

 

   

first, we will purchase Odd Lots (as defined below) of fewer than 100 Shares at the Purchase Price from shareholders who properly tender all of their Shares at or below the Purchase Price and who do not properly withdraw them before the Expiration Date. Tenders of less than all of the Shares owned, beneficially or of record, by such Odd Lot Holders (as defined below) will not qualify for this preference;

 

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second, after purchasing all Odd Lots that were properly tendered at or below the Purchase Price, subject to the conditional tender provisions described in Section 6 (whereby a holder may specify a minimum number of such holder’s Shares that must be purchased if any such Shares are purchased), we will purchase all Shares properly tendered at or below the Purchase Price on a pro rata basis with appropriate adjustment to avoid purchases of fractional Shares; and

 

   

third, only if necessary to permit us to purchase $100 million in aggregate purchase price of Shares (or such greater amount as we may elect to purchase, subject to applicable law), we will purchase Shares conditionally tendered (for which the condition was not initially satisfied) at or below the Purchase Price, by random lot, to the extent feasible. To be eligible for purchase by random lot, shareholders whose Shares are conditionally tendered must have tendered all of their Shares at or below the Purchase Price.

As a result of the foregoing priorities applicable to the purchase of Shares tendered, it is possible that fewer than all Shares tendered by a shareholder will be purchased or that, if a tender is conditioned upon the purchase of a specified number of Shares, none of those Shares will be purchased even though those Shares were tendered at prices at or below the Purchase Price.

As we noted above, we may elect to purchase more than $100 million in aggregate purchase price of Shares in the Offer, subject to applicable law. If we do so, the preceding provisions will apply to the greater number of Shares.

Odd Lots

The term “Odd Lots” means all Shares tendered by any person (such person, an “Odd Lot Holder”) who owned, beneficially or of record, an aggregate of fewer than 100 Shares and certifies such fact in the appropriate place on the Letter of Transmittal and, if applicable, on the Notice of Guaranteed Delivery. This preference is not available to partial tenders or beneficial or record holders of 100 or more Shares, even if such holders have separate accounts or certificates representing fewer than 100 Shares. Odd Lots will be accepted for payment at the same time as other tendered Shares.

Proration

If proration of tendered Shares is required, we will determine the proration for each shareholder tendering Shares, if any, promptly following the Expiration Date. Proration for each shareholder tendering Shares (excluding Odd Lot Holders) will be based on the ratio of the number of Shares properly tendered and not properly withdrawn by such shareholder to the total number of Shares properly tendered and not properly withdrawn by all shareholders (excluding Odd Lot Holders) at or below the Purchase Price, subject to the provisions governing conditional tenders described in Section 6, any adjustment to avoid the purchase of fractional Shares and the terms and conditions of the Offer. Due to the difficulty in determining the number of Shares properly tendered and not properly withdrawn, the conditional tender procedure described in Section 6 and the guaranteed delivery procedure described in Section 3, we expect that we will not be able to announce the final proration for each shareholder or commence payment for any Shares purchased pursuant to the Offer until after the Expiration Date and the guaranteed delivery period. The preliminary results of any proration will be announced by press release as promptly as practicable after the Expiration Date.

As described in Section 14, the number of Shares that we will purchase from a shareholder pursuant to the Offer may affect the U.S. federal income tax consequences to the shareholder of the purchase and, therefore, may be relevant to a shareholder’s decision whether to tender Shares. The Letter of Transmittal affords each shareholder who tenders Shares registered in such shareholder’s name directly to the Depositary the opportunity to designate the order of priority in which Shares tendered are to be purchased in the event of proration as well as the ability to condition such tender on a minimum number of Shares being purchased.

This Offer to Purchase and the Letter of Transmittal will be mailed to record holders of the Shares and will be furnished to brokers, dealers, commercial banks, trust companies and other nominees and similar persons whose

 

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names, or whose nominees’ names, appear on our shareholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing for subsequent transmittal to beneficial owners of Shares.

 

2.

Purpose of the Offer; Certain Effects of the Offer; Plans and Proposals

Purpose of the Offer

We believe that the repurchase of Shares pursuant to the Offer will allow us to return value to our shareholders and that a prompt deployment of the majority of the anticipated proceeds from our proposed new term loan for this purpose is a prudent use of our financial resources. The Offer provides a mechanism for completing a sizeable repurchase of Shares more rapidly than would be possible through open market repurchases. The modified Dutch auction tender offer set forth in this Offer to Purchase provides our shareholders with the opportunity to tender all or a portion of their Shares and thereby receive a return of some or all of their investment in the Company, if they so elect. The Offer also provides our shareholders who are the registered owners of their Shares with an efficient way to sell their Shares without incurring brokerage fees or commissions associated with open market sales. Where Shares are tendered by the registered owner of those Shares directly to the Depositary, the sale of those Shares in the Offer will permit the tendering shareholder to avoid the usual transaction costs associated with open market transactions.

However, shareholders who hold Shares through nominees are urged to consult their nominees to determine whether transaction costs may apply. In addition, Odd Lot Holders who hold Shares registered in their names and tender their Shares directly to the Depositary, and whose Shares are purchased in the Offer, will avoid any applicable Odd Lot discounts that might be payable on sales of their Shares in transactions on the NYSE.

Certain Effects of the Offer

Shareholders who do not tender their Shares in the Offer and shareholders who otherwise retain an equity interest in the Company as a result of a partial tender of Shares or proration will continue to be owners of the Company. As a result, if we complete the Offer, those shareholders will realize an automatic increase in their relative ownership interest in the Company and also will bear the attendant risks associated with owning our equity securities. Shareholders may be able to sell non-tendered Shares in the future at a net price significantly higher or lower than the Purchase Price pursuant to the Offer. We can give no assurance as to the price at which a shareholder may be able to sell its Shares in the future.

The Offer will reduce our “public float” (the number of Shares owned by non-affiliated shareholders and available for trading in the securities markets) and is likely to reduce the number of our shareholders. The Company’s executive officers and directors, including Jay L. Schottenstein, the Executive Chairman of our Board of Directors, have informed us that they do not intend to tender Shares in the Offer. As a result, the Offer will increase the proportional holdings of our executive officers, our directors and Mr. Schottenstein and members of Mr. Schottenstein’s family (the “Schottenstein Affiliates”). After expiration or termination of the Offer, our directors and executive officers may sell their Shares subject to applicable law and applicable policies and practices of the Company, from time to time in open market transactions at prices that may be more or less favorable than the Purchase Price to be paid to holders of our Shares pursuant to the Offer. See Section 12.

Each outstanding Share is entitled to one vote with respect to each matter to be voted on at the meeting and each outstanding Class B Common Share is entitled to eight votes with respect to each matter to be voted on at the meeting. Shares and Class B Common Shares vote together as a single class with respect to all matters submitted to a vote of shareholders. The completion of the Offer will not result in a change of control of the Company.

We are controlled by the Schottenstein Affiliates and the Offer may further increase their aggregate proportionate share of the outstanding Shares and Class B Common Shares (currently 23% as calculated pursuant to Exchange Act Rule 13d-3) upon the completion of the Offer.

 

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Based on the published guidelines the NYSE and the conditions of the Offer, we believe that our purchase of up to 14,285,714 Shares pursuant to the Offer will not result in delisting of the remaining Shares on the NYSE. The Shares are registered under the Exchange Act, which requires, among other things, that we furnish certain information to our shareholders and the SEC and comply with the SEC’s proxy rules in connection with meetings of our shareholders. We believe that our purchase of Shares pursuant to the Offer will not result in the Shares becoming eligible for termination of registration under the Exchange Act. The Offer is conditioned upon, among other things, our having determined that the consummation of the Offer will not cause the Shares to be delisted from NYSE or to be eligible for deregistration under the Exchange Act. See Section 7.

Shares we acquire pursuant to the Offer will be retained as treasury shares by us (unless and until our Board of Directors determines to retire or reissue such Shares). Such Shares will be held in treasury with the status of authorized Shares and will be available for us to reissue without further shareholder action for all purposes except as prohibited or limited by applicable law or the rules of NYSE. Other than in connection with the exercise or vesting of equity incentive grants under the Company’s Equity Incentive Plans, we have no current plans for the reissuance of Shares purchased pursuant to the Offer but reserve the right to do so without notice.

The accounting for the purchase of Shares pursuant to the Offer will result in a reduction of our shareholders’ equity in an amount equal to the aggregate purchase price of the Shares we purchase plus the fees and any estimated excise taxes due related to the Offer and a corresponding reduction in total cash.

Plans and Proposals

Except as disclosed or incorporated by reference in this Offer to Purchase, DBI currently has no plans, proposals or negotiations underway that relate to or would result in:

 

   

any extraordinary transaction, such as a material merger, reorganization or liquidation, involving DBI or any of its subsidiaries;

 

   

any purchase, sale or transfer of a material amount of assets of DBI or any of its subsidiaries;

 

   

any material change in the present dividend rate or policy, or indebtedness or capitalization of DBI;

 

   

any change in the present Board of Directors or management of DBI, including, but not limited to, any plans or proposals to change the number or the term of directors or to fill any existing vacancies on the Board or to change any material term of the employment contract of any executive officer;

 

   

any other material change in DBI’s corporate structure or business;

 

   

any class of equity securities of DBI becoming eligible for termination of registration under Section 12(g) of the Exchange Act or ceasing to be authorized for listing on NYSE;

 

   

the suspension of DBI’s obligation to file reports under Section 15(d) of the Exchange Act;

 

   

the acquisition by any person of additional securities of DBI, or the disposition by any person of securities of DBI, other than purchases and dispositions related to the exercise of outstanding options to purchase Shares and the vesting of restricted stock units granted to certain employees (including directors and executive officers); or

 

   

any changes in DBI’s Certificate of Incorporation or Bylaws, in each case as currently in effect, or other governing instruments or other actions that could impede the acquisition of control of DBI.

While we have no definitive plans or proposals regarding any of the foregoing as of the date of this Offer to Purchase (except as in the documents incorporated by reference herein or as disclosed in this Offer to Purchase, including this Section 2), our management continually assesses and reassesses options for returning value to our shareholders, including by making quarterly dividends, possible acquisitions, divestitures, joint ventures, restructurings, and other extraordinary corporate transactions and other matters. We reserve the right to change

 

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our plans and intentions at any time after the date of this Offer to Purchase, subject to our obligation to update this Offer to Purchase to reflect material changes in the information contained herein. Shareholders tendering Shares in the Offer may run the risk of foregoing the benefit of any appreciation in the market price of the Shares resulting from such potential future events.

OUR BOARD OF DIRECTORS HAS AUTHORIZED US TO MAKE THE OFFER. HOWEVER, NONE OF THE COMPANY, THE MEMBERS OF OUR BOARD OF DIRECTORS, THE DEALER MANAGERS, THE INFORMATION AGENT OR THE DEPOSITARY MAKES ANY RECOMMENDATION TO YOU AS TO WHETHER YOU SHOULD TENDER OR REFRAIN FROM TENDERING YOUR SHARES OR AS TO THE PURCHASE PRICE OR PURCHASE PRICES AT WHICH YOU MAY CHOOSE TO TENDER YOUR SHARES. NEITHER WE NOR ANY MEMBER OF OUR BOARD OF DIRECTORS, THE DEALER MANAGERS, THE INFORMATION AGENT OR THE DEPOSITARY HAS AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION TO YOU AS TO WHETHER YOU SHOULD TENDER OR REFRAIN FROM TENDERING YOUR SHARES OR AS TO THE PURCHASE PRICE OR PURCHASE PRICES AT WHICH YOU MAY CHOOSE TO TENDER YOUR SHARES. YOU MUST MAKE YOUR OWN DECISION AS TO WHETHER TO TENDER YOUR SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PURCHASE PRICE OR PURCHASE PRICES AT WHICH YOU WILL TENDER THEM. IN DOING SO, YOU SHOULD CONSULT YOUR OWN FINANCIAL, LEGAL AND TAX ADVISORS, AND READ CAREFULLY AND EVALUATE THE INFORMATION IN THIS OFFER TO PURCHASE AND IN THE LETTER OF TRANSMITTAL, INCLUDING OUR REASONS FOR MAKING THE OFFER.

 

3.

Procedures for Tendering Shares

Proper Tender of Shares

For Shares to be properly tendered pursuant to the Offer, the certificates for such Shares (or confirmation of receipt of such Shares pursuant to the procedure for book-entry transfer set forth below), together with a properly completed and duly executed Letter of Transmittal, including any required signature guarantees, or an “Agent’s Message” (as defined below), and any other documents required by the Letter of Transmittal, must be received before the Expiration Date by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase. Beneficial owners should be aware that their broker, dealer, commercial bank, trust company or other nominee may establish its own earlier deadlines for participation in the Offer on their behalf. Accordingly, beneficial owners wishing to participate in the Offer should contact their broker, dealer, commercial bank, trust company or other nominee as soon as possible in order to determine the times by which such owner must take action in order to participate in the Offer.

In the alternative, the tendering shareholder must, before the Expiration Date, comply with the guaranteed delivery procedure described below.

In accordance with Instruction 7 of the Letter of Transmittal, each shareholder desiring to tender Shares in the Offer must complete the section captioned “Price Per Share At Which Shares Are Being Tendered” by either (i) checking the box in the subsection entitled “Shares Tendered At Price Determined Pursuant to The Offer,” which will indicate that you will accept the Purchase Price as determined by us in accordance with the terms of and subject to the conditions of the Offer, or (ii) checking one of the boxes in the subsection entitled “Shares Tendered At Price Determined By Shareholder,” indicating the price at which Shares are being tendered.

Shareholders who desire to tender Shares at more than one price must complete a separate Letter of Transmittal for each price at which Shares are tendered, provided that the same Shares cannot be tendered (unless such Shares were properly withdrawn in accordance with Section 4) at more than one price. To tender Shares properly, one and only one box must be checked in the section captioned “Price Per Share At Which Shares Are Being Tendered” in the Letter of Transmittal.

 

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If you wish to maximize your chances of having your Shares purchased in the Offer, you should check the box in the subsection entitled “Shares Tendered At Price Determined Pursuant to The Offer” (in the section captioned “Price Per Share At Which Shares Are Being Tendered”) in the Letter of Transmittal, which will indicate that you will accept the Purchase Price as determined by us in accordance with the terms of and subject to the conditions of the Offer. If you agree to accept the Purchase Price, your Shares will be deemed to have been tendered at $7.00 per Share, which is the low end of the price range in the Offer. You should understand that this election may have the effect of lowering the Purchase Price and could result in the tendered Shares being purchased at $7.00 per Share, which is the low end of the price range in the Offer, less any applicable withholding taxes and without interest. If tendering shareholders wish to indicate a specific price (in multiples of $0.05) at which their Shares are being tendered, they must check the appropriate box in the subsection entitled “Shares Tendered At Price Determined By Shareholder” in the section captioned “Price Per Share At Which Shares Are Being Tendered” in the Letter of Transmittal. Tendering shareholders should be aware that this election could mean that none of their Shares will be purchased if they check a box other than the box representing the price at or below the Purchase Price.

Shareholders holding their Shares through a broker, dealer, commercial bank, trust company or other nominee must contact the nominee in order to tender their Shares. Shareholders who hold Shares through nominees are urged to consult their nominees to determine whether transaction costs may apply if shareholders tender Shares through the nominees and not directly to the Depositary.

Shareholders may tender Shares subject to the condition that all, or a specified minimum number of Shares, be purchased. Any shareholder desiring to make such a conditional tender should so indicate in the box entitled “Conditional Tender” in the Letter of Transmittal. It is the tendering shareholder’s responsibility to determine the minimum number of Shares to be purchased. Shareholders should consult their own financial, legal and tax advisors with respect to the effect of proration of the Offer and the advisability of making a conditional tender. See Section 6 and Section 14.

Signature Guarantees and Method of Delivery

No signature guarantee is required if:

 

   

the Letter of Transmittal is signed by the registered holder of the Shares (which term, for purposes of this Section 3, will include any participant in the Book-Entry Transfer Facility whose name appears on a security position listing as the owner of the Shares) tendered and such holder has not completed either the section entitled “Special Payment Instructions” or the section entitled “Special Delivery Instructions” in the Letter of Transmittal, or

 

   

Shares are tendered for the account of a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of the Securities Transfer Agents Medallion Program or an “eligible guarantor institution,” as the term is defined in Exchange Act Rule 17Ad-15 (an “Eligible Institution”). See Instruction 1 of the Letter of Transmittal.

If a certificate for Shares is registered in the name of a person other than the person executing the Letter of Transmittal, or if payment is to be made, or new certificates for Shares not purchased or tendered are to be issued, to a person other than the registered holder, then the certificate must be endorsed or accompanied by an appropriate stock power, signed in either case exactly as the name of the registered holder appears on the certificate, with the signature guaranteed by an Eligible Institution.

Payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of:

 

   

one of (a) certificates for the Shares or (b) a timely confirmation of the book-entry transfer of the Shares into the Depositary’s account at the Book-Entry Transfer Facility as described below;

 

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one of (a) a properly completed and duly executed Letter of Transmittal, including any required signature guarantees or (b) an Agent’s Message (as defined below) in the case of a book-entry transfer; and

 

   

any other documents required by the Letter of Transmittal.

Odd Lot Holders who tender all of their Shares must also complete the section captioned “Odd Lots” in the Letter of Transmittal and, if applicable, in the Notice of Guaranteed Delivery to qualify for the priority treatment available to Odd Lot Holders as set forth in Section 1.

The method of delivery of all documents, including certificates for Shares, the Letter of Transmittal and any other required documents, is at the sole election and risk of the tendering shareholder. If delivery is by mail, then registered mail with return receipt requested, properly insured, is recommended. Shares will be deemed delivered only when actually received by the Depositary (including, in the case of a book-entry transfer, by book-entry confirmation). In all cases, sufficient time should be allowed to ensure timely delivery.

All deliveries in connection with the Offer, including a Letter of Transmittal and certificates for Shares, must be made to the Depositary and not to us, the Dealer Managers, the Information Agent or the Book-Entry Transfer Facility. ANY DOCUMENTS DELIVERED TO US, THE DEALER MANAGERS, THE INFORMATION AGENT OR THE BOOK-ENTRY TRANSFER FACILITY WILL NOT BE FORWARDED TO THE DEPOSITARY AND WILL NOT BE DEEMED TO BE PROPERLY TENDERED.

Book-Entry Delivery

The Depositary will establish an account with respect to the Shares for purposes of the Offer at the Book-Entry Transfer Facility within two (2) business days after the date of this Offer to Purchase, and any financial institution that is a participant in the Book-Entry Transfer Facility’s system may make book-entry delivery of the Shares by means of a book-entry transfer by causing the Book-Entry Transfer Facility to transfer Shares into the Depositary’s account in accordance with the Book-Entry Transfer Facility’s procedures for transfer. Although delivery of Shares may be effected through a book-entry transfer into the Depositary’s account at the Book-Entry Transfer Facility, a properly completed and duly executed Letter of Transmittal, including any required signature guarantees, or an Agent’s Message, and any other required documents must, in any case, be transmitted to and received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase before the Expiration Date, or the tendering shareholder must comply with the guaranteed delivery procedure described below. Delivery of the Letter of Transmittal and any other required documents to the Book-Entry Transfer Facility does not constitute delivery to the Depositary.

The term “Agent’s Message means a message transmitted by the Book-Entry Transfer Facility to, and received by, the Depositary, which states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Shares that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that we may enforce such agreement against the participant.

Guaranteed Delivery

If you wish to tender Shares in the Offer and your certificates for Shares are not immediately available or the procedures for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach the Depositary prior to the Expiration Date, your tender may be effected if all the following conditions are met:

 

   

your tender is made by or through an Eligible Institution;

 

   

a properly completed and duly executed Notice of Guaranteed Delivery in the form we have provided is received by the Depositary, as provided below, prior to the Expiration Date; and

 

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the Depositary receives at the address listed on the back cover of this Offer to Purchase, within the period of two (2) trading days after the date of execution of that Notice of Guaranteed Delivery, either: (i) the certificates representing the Shares being tendered, in the proper form for transfer, together with all other required documents and a Letter of Transmittal, which has been properly completed and duly executed and includes all signature guarantees required, or (ii) confirmation of book-entry transfer of the Shares into the Depositary’s account at the Book-Entry Transfer Facility, together with all other required documents and either a Letter of Transmittal, which has been properly completed and duly executed and includes all signature guarantees required, or an Agent’s Message.

A Notice of Guaranteed Delivery must be delivered to the Depositary by overnight courier, email transmission (at canoticeofguarantee@computershare.com) or mail before the Expiration Date and must include a guarantee by an Eligible Institution in the form set forth in the Notice of Guaranteed Delivery.

The Notice of Guaranteed Delivery form is filed as an exhibit to the Schedule TO. Copies of the form may also be obtained from the Information Agent who may be contacted at any of its telephone numbers listed on the back cover of this Offer to Purchase.

If you hold Shares through a broker, dealer, commercial bank, trust company or similar institution, that institution must tender your Shares on your behalf. The Book-Entry Transfer Facility is expected to remain open until 5:00 p.m., New York City time, on the Expiration Date and institutions may be able to process tenders for our Shares through the Book-Entry Transfer Facility during that time (although there is no assurance that this will be the case). Once the Book-Entry Transfer Facility has closed, participants in the Book-Entry Transfer Facility whose name appears on the Book-Entry Transfer Facility security position listing as the owner of Shares will still be able to tender their Shares by delivering a Notice of Guaranteed Delivery to the Depositary via email (at canoticeofguarantee@computershare.com). If you hold Shares through a broker, dealer, commercial bank, trust company or similar institution, that institution must submit any Notice of Guaranteed Delivery on your behalf. It will generally not be possible to direct such an institution to submit a Notice of Guaranteed Delivery once that institution has closed for the day. You should consult with such institution on the procedures that must be complied with and the time by which such procedures must be completed to ensure that the institution has ample time to submit a Notice of Guaranteed Delivery on your behalf prior to 12:00 Midnight, at the end of the day, New York City time, on the Expiration Date. In addition, any such institution, if it is not an Eligible Institution, will need to obtain a medallion guarantee from an Eligible Institution in the form set forth in the applicable Notice of Guaranteed Delivery in connection with the delivery of those Shares.

As described above under “Guaranteed Delivery,” once the Notice of Guaranteed Delivery is delivered, which must occur prior to 12:00 Midnight, at the end of the day, New York City time, on the Expiration Date, you or your institution will have two (2) trading days following such delivery to meet the conditions described above in order to effect the tender of your Shares. Therefore, the earliest your tender could be effected is at 8:00 a.m., New York City time, on the next trading day when the Book-Entry Transfer Facility reopens, assuming all such conditions have been met. The form of Notice of Guaranteed Delivery can be obtained from the Information Agent at the address set forth on the back cover of this Offer to Purchase.

Stock Options

Options to purchase Shares cannot be tendered in the Offer. If you hold vested but unexercised options, you may exercise such options in accordance with the terms of our Equity Incentive Plans and other equity compensation plans and the Company’s policies and practices, and tender the Shares received upon such exercise in accordance with the Offer.

Exercises of options cannot be revoked even if some or all of the Shares received upon the exercise thereof and tendered in the Offer are not purchased pursuant to the Offer for any reason. You should evaluate this Offer to Purchase carefully to determine if participation would be advantageous to you based on your stock option

 

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exercise prices and the expiration dates of your options, the range of tender prices and the provisions for pro rata purchases by the Company described in Section 1.

We strongly encourage option holders to discuss the Offer with their tax advisor, financial advisor and/or broker.

Please be advised that it is the option holder’s responsibility to tender Shares in the Offer to the extent such holder wants to participate and it may be difficult to secure delivery of Shares issued pursuant to vested stock options in a time period sufficient to allow tender of those Shares prior to the Expiration Date. Accordingly, we suggest that you exercise your vested options and satisfy the exercise price for such Shares in accordance with the terms of the related stock option plan and option agreement and Company policies and practices at least four business days prior to the Expiration Date (which, unless the Offer is extended, means you should exercise your vested stock options and satisfy the related exercise price no later than 4:00 p.m., New York City time, on June 30, 2023).

Restricted Stock Units

Holders of restricted stock units under our share-based compensation plans may not tender the Shares underlying such restricted stock units in the Offer unless and until the restrictions on the restricted stock units have lapsed and such units are vested and settled in Shares. If Shares have been issued to you in respect of vested restricted stock units, you may tender some or all of such Shares in the Offer. See “Proper Tender of Shares” above.

Return of Unpurchased Shares

If any properly tendered Shares are not purchased pursuant to the Offer or are properly withdrawn before the Expiration Date upon the terms and subject to the conditions of the Offer, or if less than all Shares evidenced by a shareholder’s certificate(s) are tendered, we will credit the certificates to book-entry for unpurchased Shares promptly after the expiration or termination of the Offer or, in the case of Shares tendered by book-entry transfer at the Book-Entry Transfer Facility, the Shares will be credited to the appropriate account maintained by the tendering shareholder at the Book-Entry Transfer Facility, in each case without expense to the shareholder.

Determination of Validity; Rejection of Shares; Waiver of Defects; No Obligation to Give Notice of Defects

All questions as to the number of Shares to be accepted, the Purchase Price to be paid for Shares to be accepted and the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by us, in our sole discretion, and our determination will be final and binding on all parties absent a finding to the contrary by a court of competent jurisdiction. We reserve the absolute right to reject any or all tenders of any Shares that we determine are not in proper form or the acceptance for payment of or payment for which may, in the opinion of our counsel, be unlawful. We also reserve the absolute right to waive any of the conditions of the Offer on or prior to the Expiration Date, or any defect or irregularity in any tender with respect to any particular Shares or any particular shareholder (whether or not we waive similar defects or irregularities in the case of other shareholders), and our interpretation of the terms of the Offer will be final and binding on all parties absent a finding to the contrary by a court of competent jurisdiction. In the event a condition is waived with respect to any particular shareholder, the same condition will be waived with respect to all shareholders. No tender of Shares will be deemed to have been properly made until all defects or irregularities have been cured by the tendering shareholder or waived by us. We will not be liable for failure to waive any condition of the Offer, or any defect or irregularity in any tender of Shares. None of the Company, the Dealer Managers, the Depositary, the Information Agent or any other person will be obligated to give notice of any defects or irregularities in tenders, nor will any of the foregoing incur any liability for failure to give any such notification.

 

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Tendering Shareholder’s Representation and Warranty; Our Acceptance Constitutes an Agreement

It is a violation of Exchange Act Rule 14e-4 for a person acting alone or in concert with others, directly or indirectly, to tender Shares for that person’s own account unless, at the time of tender and at the end of the period during which Shares are accepted by lot (including any extensions of such period), the person so tendering (i) has a “net long position” equal to or greater than the amount of Shares tendered in (a) Shares or (b) other securities convertible into or exchangeable or exercisable for Shares and, upon acceptance of the tender, will acquire the Shares by conversion, exchange or exercise and (ii) will deliver or cause to be delivered the Shares in accordance with the terms of the Offer. Rule 14e-4 also provides a similar restriction applicable to a tender on behalf of another person.

A tender of Shares in accordance with any of the procedures described above will constitute the tendering shareholder’s acceptance of the terms and conditions of the Offer, as well as the tendering shareholder’s representation and warranty to us that (i) the shareholder has a “net long position,” within the meaning of Rule 14e-4 promulgated under the Exchange Act, in the Shares or equivalent securities at least equal to the Shares being tendered, and (ii) the tender of Shares complies with Rule 14e-4. Our acceptance for payment of Shares tendered pursuant to the Offer will constitute a binding agreement between the tendering shareholder and us on the terms and subject to the conditions of the Offer, which agreement will be governed by, and construed in accordance with, the laws of the State of Delaware.

A tender of Shares made pursuant to any method of delivery set forth herein will also constitute a representation and warranty to us that the tendering shareholder has full power and authority to tender, sell, assign and transfer the Shares tendered, and that, when the same are accepted for purchase by us, we will acquire good, marketable and unencumbered title thereto, free and clear of all security interests, liens, restrictions, claims, encumbrances and other obligations relating to the sale or transfer of the Shares, and the same will not be subject to any adverse claim or right.

Any such tendering shareholder will, on request by the Depositary or us, execute and deliver any additional documents deemed by the Depositary or us to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered, all in accordance with the terms of the Offer.

All authority conferred or agreed to be conferred by delivery of the Letter of Transmittal shall be binding on the successors, assigns, heirs, personal representatives, executors, administrators and other legal representatives of the tendering shareholder and shall not be affected by, and shall survive, the death or incapacity of such tendering shareholder.

Lost or Destroyed Certificates

If any certificate representing Shares has been lost or destroyed, the shareholder should promptly notify the Depositary at the phone number or address set forth on the back cover page of this Offer to Purchase. The shareholder will then be instructed as to the steps that must be taken in order to replace the certificate(s) or to submit an affidavit of lost or destroyed certificate(s) and agreement of indemnity. The Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost or destroyed certificates have been followed. Shareholders are requested to contact the Depositary immediately in order to permit timely processing of this documentation.

Certificates for Shares, together with a properly completed Letter of Transmittal and any other documents required by the Letter of Transmittal, must be delivered to the Depositary and not to us, the Dealer Managers or the Information Agent. Any certificates delivered to us, the Dealer Managers or the Information Agent will not be forwarded to the Depositary and will not be deemed to be properly tendered.

 

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4.

Withdrawal Rights

Except as otherwise provided in this Section 4, tenders of Shares pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may be withdrawn at any time before the Expiration Date. If, following the Expiration Date, we have not accepted for payment the Shares you have tendered to us by 12:00 Midnight, at the end of the day, New York City time, on August 4, 2023, you may also withdraw your Shares at any time thereafter.

If you are a registered holder of Shares, for a withdrawal to be effective, a notice of withdrawal, in written form, must be received in a timely manner by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase. Any notice of withdrawal must specify the name of the tendering shareholder, the number of Shares to be withdrawn and the name of the registered holder of the Shares. If certificates for Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, before the release of the certificates, the tendering shareholder must also submit the serial numbers shown on the particular certificates for Shares to be withdrawn and the signature(s) on the written notice of withdrawal must be guaranteed by an Eligible Institution (except in the case of Shares tendered for the account of an Eligible Institution). If Shares have been tendered pursuant to the procedure for book-entry transfer described in Section 3, the notice of withdrawal also must specify the name and the number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares and must otherwise comply with the Book-Entry Transfer Facility’s procedures. If a shareholder has used more than one Letter of Transmittal or has otherwise tendered Shares in more than one group of Shares, the shareholder may withdraw Shares using either separate written notices of withdrawal or a combined written notice of withdrawal, so long as the information specified above is included.

If you hold Shares through a broker, dealer, commercial bank, trust company or similar institution, you should consult that institution on the procedures you must comply with and the time by which such procedures must be completed in order for that institution to provide a written notice of withdrawal.

We will determine all questions as to the form and validity, including the time of receipt, of any notice of withdrawal, in our sole discretion, which determination will be final and binding on all parties absent a finding to the contrary by a court of competent jurisdiction. Neither we nor the Dealer Managers, the Depositary, the Information Agent or any other person will be obligated to give notice of any defects or irregularities in any notice of withdrawal, nor will any of the foregoing incur liability for failure to give any such notification. Withdrawals may not be rescinded, and any Shares properly withdrawn will be deemed not properly tendered for purposes of the Offer. However, withdrawn Shares may be re-tendered before the Expiration Date by again following one of the procedures described in Section 3.

If we extend the Offer, are delayed in our purchase of Shares or are unable to purchase Shares pursuant to the Offer for any reason, then, without prejudice to our rights pursuant to the Offer, the Depositary may, subject to applicable law, retain tendered Shares on our behalf, and the Shares may not be withdrawn except to the extent tendering shareholders are entitled to withdrawal rights as described in this Section 4. Our reservation of the right to delay payment for Shares that we have accepted for payment is limited by Exchange Act Rule 13e-4(f)(5), which requires that we must pay the consideration offered or return the Shares tendered promptly after termination or withdrawal of the Offer.

If you hold Shares through a broker, dealer, commercial bank, trust company or similar institution, any notice of withdrawal must be delivered by that institution on your behalf. The Book-Entry Transfer Facility is expected to remain open until 5:00 p.m., New York City time, on the Expiration Date and institutions may be able to process withdrawals of Shares through the Book-Entry Transfer Facility during that time (although there can be no assurance that this will be the case). Once the Book-Entry Transfer Facility has closed, if you beneficially own Shares that were previously delivered through the Book-Entry Transfer Facility, then in order to properly withdraw your Shares the institution through which your Shares are held must deliver via email a written notice of withdrawal to the Depositary at canoticeofguarantee@computershare.com prior to 12:00 Midnight,

 

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at the end of the day, New York City time, on the Expiration Date. It will generally not be possible to direct such an institution to submit a written notice of withdrawal once that institution has closed for the day. You should consult with such institution on the procedures that must be complied with and the time by which such procedures must be completed to ensure that the institution has ample time to submit a written notice of withdrawal on your behalf prior to 12:00 Midnight, at the end of the day, New York City time, on the Expiration Date. Such notice of withdrawal must be in the form of the Book-Entry Transfer Facility’s notice of withdrawal, must specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares and must otherwise comply with the Book-Entry Transfer Facility’s procedures. Shares can be properly withdrawn only if the Depositary receives a written notice of withdrawal directly from the relevant institution that tendered the Shares through the Book-Entry Transfer Facility.

 

5.

Purchase of Shares and Payment of Purchase Price

Upon the terms and subject to the conditions of the Offer, promptly following the Expiration Date, we will:

 

   

determine the Purchase Price, taking into account the number of Shares so tendered and the prices specified, or deemed specified, by tendering shareholders, and

 

   

accept for payment up to $100 million in aggregate purchase price of Shares (or such greater number as we may elect to purchase, subject to applicable law). We may increase the number of Shares accepted for payment in the Offer by no more than 2% of the outstanding Shares without extending the Expiration Date.

For purposes of the Offer, we will be deemed to have accepted for payment (and therefore be deemed to have purchased), subject to proration, “Odd Lot” priority and conditional tender provisions of the Offer, Shares that are properly tendered at or below the Purchase Price and not properly withdrawn only when, as and if we give oral or written notice to the Depositary of our acceptance of the Shares for payment pursuant to the Offer.

Upon the terms and subject to the conditions of the Offer, including the full satisfaction of the Financing Condition, we will accept for payment and pay the Purchase Price per Share for all of the Shares accepted for payment in accordance with the Offer promptly after the Expiration Date. In all cases, payment for Shares properly tendered and accepted for payment in accordance with the Offer will be made promptly, subject to possible delay due to proration, but only after timely receipt by the Depositary of:

 

   

certificates for Shares or a timely confirmation of a book-entry transfer of Shares into the Depositary’s account at the Book-Entry Transfer Facility;

 

   

a properly completed and duly executed Letter of Transmittal or an Agent’s Message in the case of book-entry transfer; and

 

   

any other documents required.

We will pay for Shares purchased pursuant to the Offer by depositing the aggregate purchase price for the Shares with the Depositary, which will act as agent for tendering shareholders for the purpose of receiving payment from us and transmitting payment to the tendering shareholders. In the event of proration, we will determine the preliminary proration factor promptly after the Expiration Date. However, we do not expect to be able to announce the final results of any proration and commence payment for Shares purchased until after the Expiration Date and the guaranteed delivery period. Certificates for all Shares tendered and not purchased, including all Shares tendered at prices in excess of the Purchase Price and Shares not purchased due to proration or conditional tenders, will be credited to book-entry with the Depositary, and, in the case of Shares tendered by book-entry transfer, will be credited to the account maintained with the Book-Entry Transfer Facility by the participant who delivered the Shares, to the tendering shareholder promptly after the expiration or termination of the Offer at our expense.

 

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Under no circumstances will interest be paid on the Purchase Price for the Shares, regardless of any delay in making payment. In addition, if certain events occur, we may not be obligated to purchase Shares pursuant to the Offer. See Section 7.

We will pay all share transfer taxes, if any, payable on the transfer to us of Shares purchased pursuant to the Offer; provided, however, that if payment of the Purchase Price is to be made to, or (in the circumstances permitted by the Offer) if unpurchased Shares are to be registered in the name of, any person other than the registered holder, or if tendered certificates are registered in the name of any person other than the person signing the Letter of Transmittal, the amount of all share transfer taxes, if any (whether imposed on the registered holder or the other person), payable on account of the transfer to that person are the responsibility of the shareholder and evidence satisfactory to us of the payment of the share transfer taxes, or exemption from payment of the share transfer taxes, may need to be submitted. See Instruction 6 of the Letter of Transmittal.

 

6.

Conditional Tender of Shares

In the event of an over-subscription of the Offer, Shares tendered at or below the Purchase Price prior to the Expiration Date will be subject to proration (subject to the exception for Odd Lot Holders). See Section 1. As discussed in Section 14, the number of Shares to be purchased from a particular shareholder may affect the tax treatment of the purchase to the shareholder and the shareholder’s decision whether to tender.

Accordingly, a shareholder may tender Shares subject to the condition that a specified minimum number of the shareholder’s Shares tendered pursuant to a Letter of Transmittal must be purchased if any Shares tendered are purchased. Any shareholder desiring to make a conditional tender must so indicate in the box entitled “Conditional Tender” in the Letter of Transmittal, and, if applicable, in the Notice of Guaranteed Delivery. We urge each shareholder to consult with his or her own financial, legal or tax advisor with respect to the advisability of making a conditional tender.

Any tendering shareholder wishing to make a conditional tender must calculate and appropriately indicate the minimum number of Shares that must be purchased from that shareholder if any are to be purchased. After the Offer expires, if the number of Shares properly tendered and not properly withdrawn pursuant to the Offer at a price equal to or less than the Purchase Price and pursuant to the “Shares Tendered At Price Determined Pursuant to the Offer” alternative is greater than $100 million in aggregate purchase price (or such greater number as we may elect to purchase, subject to applicable law) so that we must prorate our acceptance of and payment for tendered Shares, we will calculate a preliminary proration percentage based upon all Shares properly tendered, conditionally or unconditionally (including Shares of Odd Lot Holders). If the effect of this preliminary proration would be to reduce the number of Shares to be purchased from any shareholder below the minimum number specified, the conditional tender will automatically be regarded as withdrawn (except as provided in the next paragraph). All Shares tendered by a shareholder subject to a conditional tender pursuant to the Letter of Transmittal and regarded as withdrawn as a result of proration will be returned promptly after the Expiration Date.

After giving effect to these withdrawals, we will accept the remaining Shares properly tendered, conditionally or unconditionally, at or below the Purchase Price on a pro rata basis, if necessary. If conditional tenders would otherwise be regarded as withdrawn and would cause the total number of Shares to be purchased to fall below $100 million in aggregate purchase price (or such greater number as we may elect to purchase, subject to applicable law) then, to the extent feasible, we will select for purchase, by random lot, enough of the conditional tenders that would otherwise have been deemed withdrawn to permit us to purchase such number of Shares.

 

7.

Conditions of the Offer

The Offer is not conditioned on any minimum number of Shares being tendered; however, the Offer is subject to certain other conditions, including the Financing Condition. Notwithstanding any other provision of the Offer, we

 

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will not be required to accept for payment, purchase or pay for any Shares tendered, and we may terminate or amend the Offer or may postpone the acceptance for payment of or the payment for Shares tendered, subject to Rule 13e-4(f)(5) under the Exchange Act, which requires that we must pay the consideration offered or return the Shares tendered promptly after termination or withdrawal of the Offer, if, at any time on or after the commencement of the Offer and prior to the Expiration Date, any of the following events have occurred (or are determined by us to have occurred) that, in our reasonable judgment and regardless of the circumstances giving rise to the event or events (including any action or inaction by us), makes it inadvisable to proceed with the Offer or with acceptance for payment or payment for the Shares in the Offer:

 

   

we do not complete or consummate the Financing Arrangement, or are unable to draw down the funds for any purchase of Shares pursuant to the Offer, including the related fees and expenses, at a time subsequent to the date hereof but prior to the Expiration Date, on terms and conditions reasonably satisfactory to us or do not otherwise satisfy the Financing Condition;

 

   

there has been any action threatened, pending or taken, including any settlement, or any approval withheld, or any statute, rule, regulation, judgment, order or injunction threatened, invoked, proposed, sought, promulgated, enacted, entered, amended, enforced or deemed to be applicable to the Offer or us or any of our subsidiaries, including any settlement, by any court, government or governmental, regulatory or administrative authority, agency or tribunal, domestic, foreign or supranational, that, in our reasonable judgment, seeks to or could directly or indirectly:

 

   

make illegal, or delay or otherwise directly or indirectly restrain, prohibit or otherwise affect the consummation of the Offer, the acquisition of some or all of the Shares pursuant to the Offer or otherwise relates in any manner to the Offer;

 

   

make the acceptance for payment of, or payment for, some or all of the Shares illegal or otherwise restrict or prohibit consummation of the Offer;

 

   

delay or restrict our ability, or render us unable, to accept for payment or pay for some or all of the Shares to be purchased pursuant to the Offer;

 

   

materially and adversely affect our or our subsidiaries’ business, condition (financial or otherwise), income, operations or prospects, taken as a whole, or otherwise materially impair our ability to purchase some or all of the Shares pursuant to the Offer;

 

   

there has occurred any of the following:

 

   

any general suspension of trading in, or limitation on prices for, securities on any United States national securities exchange or in the over-the-counter market;

 

   

the declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, whether or not mandatory;

 

   

a decrease of more than 10% in the sale price of the Shares on the NYSE or in the general level of market prices for equity securities in the United States of the New York Stock Exchange Index, the Dow Jones Industrial Average, the Nasdaq Global Market Composite Index or Standard & Poor’s Composite Index of 500 Industrial Companies, in each case measured as of the close of trading and from the close of trading on June 7, 2023, the last full trading day prior to the commencement of the Offer;

 

   

the commencement of a war, armed hostilities or other similar national or international calamity, including, but not limited to, an act of terrorism, directly or indirectly involving the United States, on or after June 7, 2023;

 

   

any material escalation of any war or armed hostilities which had commenced prior to June 7, 2023;

 

   

any limitation, whether or not mandatory, by any governmental, regulatory or administrative agency or authority on, or any event that, in our reasonable judgment, could materially affect, the extension of credit by banks or other lending institutions in the United States;

 

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any change in the general political, market, economic or financial conditions, domestically or internationally, that is reasonably likely to materially and adversely affect our business or the trading in the Shares; or

 

   

in the case of any of the foregoing existing at the time of the commencement of the Offer, a material acceleration or worsening thereof;

 

   

a tender or exchange offer for any or all of the Shares (other than the Offer), or any material merger, acquisition, business combination or other similar transaction with or involving us or any subsidiary, has been proposed, announced or made by any person or has been publicly disclosed;

 

   

we learn that:

 

   

any entity, “group” (as that term is used in Section 13(d)(3) of the Exchange Act) or person has acquired or proposes to acquire beneficial ownership of more than 5% of the outstanding Shares, whether through the acquisition of stock, the formation of a group, the grant of any option or right, or otherwise (other than as and to the extent disclosed in a Schedule 13D or Schedule 13G filed with the SEC prior to June 7, 2023);

 

   

any entity, group or person who has filed a Schedule 13D or Schedule 13G with the SEC prior to June 7, 2023 has acquired or proposes to acquire, whether through the acquisition of stock, the formation of a group, the grant of any option or right, or otherwise (other than by virtue of the Offer made hereby), beneficial ownership of an additional 2% or more of the outstanding Shares;

 

   

any change in law or in the official interpretation or administration of law, or relevant position or policy of a governmental authority with respect to any laws, applicable to the Offer;

 

   

any person, entity or group has filed a Notification and Report Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, reflecting an intent to acquire us or any of the Shares, or has made a public announcement reflecting an intent to acquire us or any of our subsidiaries or any of our or their respective assets or securities;

 

   

any change or changes have occurred or are threatened in our or our subsidiaries’ business, condition (financial or otherwise), properties, assets, income, operations or prospects that, in our reasonable judgment, has or could have a material adverse effect on us or any of our subsidiaries or that could materially adversely affect the benefits of the Offer to us;

 

   

any approval, permit, authorization, favorable review or consent of any governmental entity required to be obtained in connection with the Offer shall not have been obtained on terms satisfactory to us in our reasonable discretion; or

 

   

we determine that as a result of the consummation of the Offer and the purchase of Shares that there will be a reasonable likelihood that the Shares either (i) will be held of record by fewer than 300 persons or (ii) will be delisted from the NYSE or be eligible for deregistration under the Exchange Act.

If any of the conditions referred to above is not satisfied, we may:

 

   

terminate the Offer and return all tendered Shares to the tendering shareholders;

 

   

extend the Offer and, subject to withdrawal rights as set forth in Section 4, retain all of the tendered Shares until the expiration of the Offer as so extended;

 

   

waive the condition and, subject to any requirement to extend the period of time during which the Offer is open, purchase all of the Shares properly tendered and not properly withdrawn prior to the Expiration Date; or

 

   

delay acceptance of, or payment for Shares, subject to applicable law, until satisfaction or waiver of the conditions to the Offer.

 

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The conditions referred to above are for our sole benefit and may be asserted by us regardless of the circumstances giving rise to any such condition, and may be waived by us, in whole or in part, at any time and from time to time in our reasonable discretion on or prior to the Expiration Date, subject to applicable laws. Our failure at any time to exercise any of the foregoing rights will not be deemed a waiver of any right, and each such right will be deemed an ongoing right that may be asserted at any time and from time to time until the Offer shall have expired or been terminated. However, once the Offer has expired, then all of the conditions to the Offer must have been satisfied or waived. In certain circumstances, if we waive any of the conditions described above, we may be required to extend the Expiration Date. Any determination by us concerning the events described above will be final and binding on all parties. See Section 15.

 

8.

Price Range of Shares; Dividends

The Shares are listed and traded on the NYSE under the trading symbol “DBI.” The following table sets forth, for the fiscal quarters indicated, the high and low composite per Share prices of the Shares on the NYSE and the cash dividends per Share declared:

Fiscal Year 2021 (year ended January 29, 2022)

 

     High      Low      Cash
Dividends
Declared
 

First Quarter

   $ 18.76      $ 11.40      $ —    

Second Quarter

   $ 20.48      $ 13.28      $ —    

Third Quarter

   $ 16.48      $ 11.76      $ —    

Fourth Quarter

   $ 17.42      $ 11.80      $ —    

Fiscal Year 2022 (year ended January 28, 2023)

 

     High      Low      Cash
Dividends
Declared
 

First Quarter

   $ 15.58      $ 11.24      $ 0.05  

Second Quarter

   $ 16.09      $ 12.39      $ 0.05  

Third Quarter

   $ 19.38      $ 14.08      $ 0.05  

Fourth Quarter

   $ 16.39      $ 8.90      $ 0.05  

Fiscal Year Ending January 28, 2024

 

     High      Low      Cash
Dividends
Declared
 

First Quarter

   $ 11.24      $ 7.93      $ 0.05  

The payment of any future dividends is at the discretion of the Company’s Board of Directors and is based on its future earnings, cash flow, financial condition, capital requirements, financial covenants, changes in taxation laws, general economic condition, and any other relevant factors. It is anticipated that dividends will be declared on a quarterly basis.

On June 7, 2023, the last full trading day before the commencement of the Offer, the last closing sale price of the Shares on the NYSE was $7.21 per Share, which is above the $7.00 per Share lower end of the price range for the Offer. Accordingly, an election to accept the Purchase Price determined in the Offer may lower the Purchase Price to a price below such closing price and could be below the reported closing price on the Expiration Date. Shareholders are urged to obtain current market quotations for the Shares.

 

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9.

Source and Amount of Funds

Assuming the Offer is fully subscribed, we expect the aggregate purchase price for the Shares, together with related fees and expenses, to be approximately $102 million. We plan to fund any purchase of Shares pursuant to the Offer, including the related fees and expenses, through cash from the Financing Arrangement, which will consist of borrowings under the proposed term loan described below. This Offer is subject to the Financing Condition, meaning that if the Company is unable to obtain the Financing Arrangement, resulting in our receipt of at least $135 million of available borrowing capacity under the Proposed Term Loan (as defined below), the Offer will not be consummated.

We are currently negotiating the terms of a new delayed draw term loan in an amount of up to $135 million (the “Proposed Term Loan”), which we also refer to as the Financing Arrangement. Once closed, we would be permitted to draw the full amount of the Proposed Term Loan at closing or within ninety (90) days thereafter. We expect to close the Proposed Term Loan in the near term, although negotiations remain ongoing. The closing of the Proposed Term Loan is subject to standard closing conditions for financing of this nature, including finalization of definitive loan documentation and delivery of customary closing deliverables. The Proposed Term Loan is not subject to a commitment letter from the proposed administrative agent or any proposed lender.

 

10.

Certain Information Concerning Us

General

Designer Brands Inc., originally founded as DSW Inc., is one of the world’s largest designers, producers, and retailers of footwear and accessories. We operate in three reportable segments: the U.S. Retail segment, the Canada Retail segment, and the Brand Portfolio segment. The U.S. Retail segment operates the DSW Designer Shoe Warehouse (“DSW”) banner through its direct-to-consumer U.S. stores and e-commerce site. The Canada Retail segment operates The Shoe Company and DSW banners through its direct-to-consumer Canada stores and e-commerce sites. Together, the U.S. Retail and Canada Retail segments are referred to as the “retail segments.” The Brand Portfolio segment earns revenue from the wholesale of products to retailers and international distributors, commissions for serving retailers as the design and buying agent for products under private labels, and the sale of branded products through our direct-to-consumer e-commerce sites at www.vincecamuto.com and www.topoathletic.com. Information contained on or accessible through such website is not a part of this document, and the inclusion of the website address in this document is an inactive textual reference only.

Our principal executive offices are located at 810 DSW Drive, Columbus, Ohio 43219. The telephone number for the Company’s principal executive offices is (614) 237-7100.

Availability of Reports and Other Information

We are subject to the informational filing requirements of the Exchange Act, which obligate us to file reports, statements and other information with the SEC relating to our business, financial condition and other matters. Information, as of particular dates, concerning our directors and officers, their remuneration, options granted to them, the principal holders of our securities and any material interest of these persons in transactions with us is required to be disclosed in proxy statements distributed to our shareholders and filed with the SEC. As required by Exchange Act Rule 13e-4(c)(2), we have also filed with the SEC the Schedule TO, which includes additional information relating to the Offer.

These reports, statements and other information, including the Schedule TO, all of the exhibits to it, and documents incorporated by reference, are available to the public on or accessible through the SEC’s site at https://www.sec.gov. This website address is not intended to function as a hyperlink, and the information contained on or accessible through the SEC’s website is not incorporated by reference in this Offer to Purchase and it should not be considered to be a part of this Offer to Purchase.

 

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Incorporation by Reference

The rules of the SEC allow us to “incorporate by reference” information into this document, which means that we can disclose important information to you by referring you to another document filed separately with the SEC.

The following documents contain important information about us and we incorporate them and any future filings made by us with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act by reference (other than any portions of the respective filings that were furnished to, rather than filed with, the SEC under applicable SEC rules) until termination of this Offer:

 

   

Our Annual Report on Form 10-K for the fiscal year ended January 28, 2023, filed with the SEC on March 16, 2023;

 

   

Our Quarterly Report on Form 10-Q for the quarterly period ended April 29, 2023, filed with the SEC on June 8, 2023;

 

   

Our Current Reports on Form 8-K filed on March 3, 2023, March 16, 2023 (solely with respect to Item 8.01 thereof) and April 27, 2023 (excluding any information that is furnished and not “filed” for purposes of Section 18 of the Exchange Act); and

 

   

Our Definitive Proxy Statement on Schedule 14A filed with the SEC on April 28, 2023.

Any statement contained in any document incorporated by reference into this Offer to Purchase shall be deemed to be modified or superseded to the extent that an inconsistent statement is made in this Offer to Purchase or any subsequently filed document. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Offer to Purchase.

You can obtain any of the documents incorporated by reference in this document from us or from the SEC’s website at the address described above. Documents incorporated by reference are available from us without charge, excluding any exhibits to those documents, at our principal executive offices located at the following address:

Corporate Secretary

Designer Brands Inc.

810 DSW Drive

Columbus, Ohio 43219

(614) 237-7100

Please be sure to include your complete name and address in your request. If you request any incorporated documents, we will promptly mail them to you by first class mail, or another equally prompt means. You may also find additional information by visiting our website at www.designerbrands.com. Information on our website does not form part of the Offer and is not incorporated by reference in this Offer to Purchase.

 

11.

Financial Statements and Information

We incorporate by reference the financial statements and notes thereto included in Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended January 28, 2023. In addition, we incorporate by reference the unaudited financial information included in Part I, Item 1 of our Quarterly Report filed on Form 10-Q for the quarter ended April 29, 2023. You should refer to Section 10 for instructions on how you can obtain copies of our SEC filings, including filings that contain our financial statements.

 

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12.

Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares

As of June 5, 2023, there were 58,073,011 Shares issued and outstanding and 7,732,733 Class B Common Shares issued and outstanding. In addition, as of June 5, 2023, we had an aggregate of 5,195,133 Shares reserved for issuance under our equity compensation plans.

Our directors and executive officers are entitled to participate in the Offer on the same basis as all other shareholders. However, all our directors and executive officers have advised us that they do not intend to tender any of their Shares (including Shares that could be issued in exchange for Class B Common Shares or Shares that could be issued upon the exercise of vested options). Assuming the completion of the Offer, the relative ownership interest of our directors and executive officers in the Company will increase. Our directors and executive officers may, subject to applicable law and applicable policies of the Company, sell their shares from time to time in open-market and/or other transactions at prices that may be more or less favorable than the Purchase Price to be paid to our shareholders pursuant to the Offer.

A list of our directors and executive officers as of June 5, 2023, is attached to this Offer to Purchase as Schedule I.

Beneficial Ownership of Directors and Executive Officers

The following table sets forth information with respect to the beneficial ownership of our Shares and Class B Common Shares as of June 5, 2023 by:

 

   

each of our named executive officers;

 

   

each of our directors; and

 

   

all of our current directors and executive officers as a group.

The amounts and percentages of Common Shares beneficially owned are reported on the basis of the regulations of the SEC governing the determination of beneficial ownership of securities. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or to direct the voting of such security, or investment power, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has the right to acquire beneficial ownership within sixty (60) days, including those shares of our Shares issuable upon exchange of our Class B Common Shares. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities.

Except as otherwise noted, the address of each person listed in the tables below is c/o Corporate Secretary, 810 DSW Drive, Columbus, Ohio 43219.

 

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The percentage of ownership is calculated using the number of shares outstanding as of June 5, 2023, which consisted of 58,073,011 Shares and 7,732,733 Class B Common Shares.

 

     Number of Shares
Beneficially Owned(1)(2)
     Percentage of
Shares
Beneficially
Owned(3)
    Percentage of
Combined
Voting
Power of All
Classes of
Common Shares
 
Name    Class A      Class B      Class A     Class B     Class B  

Peter S. Cobb

     65,987        —          *       —         *  

Elaine J. Eisenman

     139,628        —          *       —         *  

Deborah L. Ferrée

     1,284,425        —          2.2     —         1.1

Douglas M. Howe

     229,959        —          *       —         *  

William L. Jordan

     555,488        —          1.0     —         *  

Joanna T. Lau

     108,132        —          *       —         *  

Jared A. Poff

     240,509        —          *       —         *  

Jay L. Schottenstein(4)

     14,552,709        7,720,154        22.0     99.8     57.0

Joseph A. Schottenstein(5)

     1,433,759        —          2.5     —         1.2

Harvey L. Sonnenberg

     71,001        —          *       —         *  

Allan J. Tanenbaum(6)

     200,053        —          *       —         *  

Joanne Zaiac

     54,119        —          *       —         *  

Rich A. Paul

     7,118        —          *       —         *  

Tami J. Fersko

     7,118        —          *       —         *  

All directors and executive officers as a group (16 persons)**

     17,942,360        7,720,154        26.3     99.8     58.9

 

*

Represents less than 1% of outstanding Common Shares.

**

Includes shares held by Mary Turner and James S. Weinberg who are not named in the table.

(1)

Each Class B Common Share of the Company is exchangeable into one Share.

(2)

Except as otherwise noted, the persons named in this table have sole power to vote and dispose of the shares listed. This table includes Shares identified in the following table as to which the named person has the right to acquire beneficial ownership upon the options exercisable and restricted stock units vesting within sixty (60) days of June 5, 2023, and upon the payment of vested deferred share units on a one-for-one basis upon retirement from the Board within sixty (60) days of June 5, 2023:

 

Beneficial Owner

   Stock Options Exercisable
within 60 days of
June 5, 2023
     Share Units Vesting
within 60 days of
June 5, 2023
 

Peter S. Cobb

     —          65,987  

Elaine J. Eisenman

     —          124,059  

Deborah L. Ferrée

     843,725        —    

Douglas M. Howe

     —          135,221  

William L. Jordan

     284,910        —    

Joanna T. Lau

     —          49,888  

Jared A. Poff

     65,118        —    

Jay L. Schottenstein

     483,375        —    

Joseph A. Schottenstein

     —          —    

Harvey L. Sonnenberg

     —          60,436  

Allan J. Tanenbaum

     —          150,088  

Joanne Zaiac

     —          5,559  

Rich Paul

     —          —    

Tami Fersko

     —          —    

All directors and executive officers as a group (16 persons)**

     1,744,583        591,238  

 

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(3)

The percentage is based upon 58,073,011 Shares and 7,732,733 Class B Common Shares outstanding on June 5, 2023, plus the number of shares a person has the right to acquire within 60 days of June 5, 2023.

(4)

Please see footnote (2) to the table above under “Security Ownership of Certain Beneficial Owners” for additional information about Mr. Schottenstein’s beneficial ownership.

(5)

Includes 1,273,099 shares held by Schottenstein Realty LLC, of which Mr. Schottenstein is an Executive Vice President and has shared power to vote and dispose of such shares, and 31,050 shares held by various family trusts of which Mr. Schottenstein is co-trustee and has shared power to vote and dispose of such shares.

(6)

Mr. Tanenbaum pledged 27,746 shares as security for a line of credit in fiscal 2016.

The foregoing information with respect to beneficial ownership is based upon information furnished by each director or executive officer, or information contained in filings made with the SEC.

Security Ownership of Certain Beneficial Owners

The following table shows the number of shares beneficially owned by the persons known to the Company to own beneficially more than 5% of the shares. It is based on information indicated in the footnotes to the table below.

 

     Percentage of Shares
Beneficially Owned
    Percentage of Shares
Beneficially Owned
    Percentage of
Combined Voting Power
of All Classes of
Common Shares
 
Name and Address of Beneficial Owner    Class A     Class B(1)     Class A     Class B  

Jay L. Schottenstein

     14,552,709 (2)      7,720,154 (2)      22.0     99.8     57.0

4300 East Fifth Avenue

          

Columbus, OH 43219

          

Schottenstein RVI, LLC

     7,928,117 (2)      7,298,593 (2)      12.0     94.4     49.2

4300 East Fifth Avenue

          

Columbus, OH 43219

          

BlackRock, Inc.

     8,422,753 (3)      —         14.5     —         7.0

55 East 52nd Street

          

New York, NY 10055

          

The Vanguard Group

     5,827,126 (4)      —         10.0     —         4.9

100 Vanguard Boulevard

          

Malvern, PA 19355

          

 

(1)

Each Class B Common Share of the Company is exchangeable into one Share.

(2)

Mr. Schottenstein beneficially owns 14,552,709 Shares of the Company in the aggregate. This includes (i) 26,100 Shares held by the Jerome Schottenstein Fund A Revocable Trust, of which Mr. Schottenstein acts as co-trustee and has shared power to vote and dispose of such shares; (ii) 997,328 Shares held by the Jay Schottenstein Revocable Trust 2009, of which Mr. Schottenstein acts as co-trustee and has shared power to vote and dispose of such shares; (iii) 63,754 shares held by the Lori Schottenstein 1984 Subchapter S Trust, of which Mr. Schottenstein is co-trustee and has shared power to vote and dispose of such shares; (iv) 56,814 Shares held by the Saul Schottenstein Subchapter S Trust #4, of which Mr. Schottenstein is trustee and has sole power to vote and dispose of such shares; (v) 40,000 Shares held by the Geraldine Schottenstein Trust UAD 07/01/1998 Amended & Restated 08/14/2008, of which Mr. Schottenstein is co-trustee and has shared power to vote and dispose of such shares; (vi) 236,528 Shares held by Schottenstein SEI, LLC (“SSEI”) (Mr. Schottenstein is manager of SSEI); (vii) 1,273,099 Shares held by Schottenstein Realty LLC, of which Mr. Schottenstein is a member by virtue of various family trusts, a director, Chairman and Chief Executive Officer and has shared power to vote and dispose of such shares; (viii) 483,375 Shares that Mr. Schottenstein has a right to purchase within 60 days of March 31, 2023; (ix) 629,524 Shares held by Schottenstein RVI, LLC (“Schottenstein RVI”) (Mr. Schottenstein is manager of Schottenstein RVI); (x) 1,161,436 Shares held by Susan S. Diamond, her spouse, and certain of her lineal

 

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  descendants and affiliates (the “Diamond Affiliates”), of which Mr. Schottenstein has sole voting power, but does not have dispositive power, with respect to such shares, pursuant to a voting agreement; and (xi) 1,864,597 Shares held by Jubilee Limited Partnership of which Mr. Schottenstein acts as trustee of trusts that hold the shares of the general partner of Jubilee Limited Partners and has sole power to vote dispose of such shares.

Also included in the aggregate number of Shares that Mr. Schottenstein beneficially owns are the following Class B Common Shares that may be converted into Class A Common Shares on a one-for-one basis at any time: (i) 71,905 Class B Common Shares held by the Jay Schottenstein Revocable Trust 2009; (ii) 349,656 Class B Common Shares held by SSEI; and (iii) 7,298,593 Class B Common Shares held by Schottenstein RVI.

(3)

Based solely upon information contained in Amendment No. 1 to Schedule 13G filed with the SEC on January 26, 2023, as of December 31, 2022, BlackRock, Inc. has sole voting power over 8,336,450 shares, shared voting power over 0 shares, sole dispositive power over 8,422,753 shares, and shared dispositive power over 0 shares.

(4)

Based solely upon information contained in Amendment No. 14 to Schedule 13G filed with the SEC on February 9, 2023, as of December 30, 2022, The Vanguard Group, an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, has sole voting power over 0 shares, shared voting power over 89,595 shares, sole dispositive power over 5,690,066 shares, and shared dispositive power over 137,060 shares.

The information with respect to beneficial ownership is based upon information furnished by the shareholder or information contained in filings made with the SEC.

Recent Securities Transactions

No transactions with respect to Shares have been effected during the 60 days prior to the date of this Offer to Purchase by the Company or, to the Company’s knowledge after making reasonable inquiry, by any of its directors, executive officers or subsidiaries, with the exception of the following:

Transactions by Directors and Executive Officers

 

Date of Transaction

   Identity of Person    Number
of Shares
   Price
Per Share
  

Nature of the
Transaction

04/14/2023

Closing Price (Closing price for Shares was $8.89)

   Peter Cobb    370 Stock Units    $0.00    Grant, award or other acquisition pursuant to Rule 16b-3(d)

04/14/2023

Closing Price (Closing price for Shares was $8.89)

   Elain J. Eisenman    696 Stock Units    $0.00    Grant, award or other acquisition pursuant to Rule 16b-3(d)

04/14/2023

Closing Price (Closing price for Shares was $8.89)

   Joanna T. Lau    281 Stock Units    $0.00    Grant, award or other acquisition pursuant to Rule 16b-3(d)

04/14/2023

Closing Price (Closing price for Shares was $8.89)

   Harvey L. Sonnenberg    341 Stock Units    $0.00    Grant, award or other acquisition pursuant to Rule 16b-3(d)

04/14/2023

Closing Price (Closing price for Shares was $8.89)

   Joanne Zaiac    31 Stock Units    $0.00    Grant, award or other acquisition pursuant to Rule 16b-3(d)

04/14/2023

Closing Price (Closing price for Shares was $8.89)

   Allan J. Tanenbaum    843 Stock Units    $0.00    Grant, award or other acquisition pursuant to Rule 16b-3(d)

04/14/2023

Closing Price (Closing price for Shares was $8.89)

   Deborah L. Ferrée    3,872 Dividend
Equivalent Rights
   $0.00    Grant, award or other acquisition pursuant to Rule 16b-3(d)

04/14/2023

Closing Price (Closing price for Shares was $8.89)

   Mark Haley    441 Dividend
Equivalent Rights
   $0.00    Grant, award or other acquisition pursuant to Rule 16b-3(d)

 

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Date of Transaction

   Identity of Person    Number
of Shares
   Price
Per Share
  

Nature of the
Transaction

04/14/2023

Closing Price (Closing price for Shares was $8.89)

   Douglas M. Howe    4,547 Dividend
Equivalent Rights
   $0.00    Grant, award or other acquisition pursuant to Rule 16b-3(d)

04/14/2023

Closing Price (Closing price for Shares was $8.89)

   William L. Jordan    2,197 Dividend
Equivalent Rights
   $0.00    Grant, award or other acquisition pursuant to Rule 16b-3(d)

04/14/2023

Closing Price (Closing price for Shares was $8.89)

   Jared A. Poff    1,633 Dividend
Equivalent Rights
   $0.00    Grant, award or other acquisition pursuant to Rule 16b-3(d)

04/14/2023

Closing Price (Closing price for Shares was $8.89)

   Jay L. Schottenstein    4,070 Dividend
Equivalent Rights
   $0.00    Grant, award or other acquisition pursuant to Rule 16b-3(d)

04/14/2023

Closing Price (Closing price for Shares was $8.89)

   Mary Turner    480 Dividend
Equivalent Rights
   $0.00    Grant, award or other acquisition pursuant to Rule 16b-3(d)

04/14/2023

Closing Price (Closing price for Shares was $8.89)

   James S. Weinberg    1,411 Dividend
Equivalent Rights
   $0.00    Grant, award or other acquisition pursuant to Rule 16b-3(d)

04/28/2023

Closing Price (Closing price for Shares was $8.19)

   Joseph A. Schottenstein    2,747 Class A

Common Shares

   $0.00    Grant, award or other acquisition pursuant to Rule 16b-3(d)

Share Repurchase Program

On August 17, 2017, our Board of Directors authorized the repurchase of an additional $500 million Shares under our share repurchase program, which was added to the $33.5 million remaining from the previous authorization. As of June 5, 2023, $187.4 million of Shares remained available for repurchase under the program, and the Offer is being conducted as part of the repurchase program.

Beginning on the eleventh (11th) business day after the Expiration Date, we may make Share repurchases from time to time on the open market and/or in private transactions, including accelerated share repurchase transactions. Whether we make additional repurchases will depend on many factors, including, without limitation, the number of Shares, if any, that we purchase in this Offer, our business and financial performance and situation, the business and market conditions at the time, including the price of the Shares, and such other factors as we may consider relevant. Any of these repurchases may be on the same terms or on terms that are more or less favorable to the selling stockholders in those transactions than the terms of the Offer.

Share-Based Compensation Plans

Currently, the Company has two equity incentive plans in place under which awards are outstanding: the 2005 Equity Plan and the LTI Plan, which was first approved by shareholders in 2014 and amended and restated in 2020. The Company’s long-term incentive compensation utilizes the following types of restricted stock unit (“RSU”) award grants to achieve these goals, with each award weighted equally (i.e., 50%):

 

   

Performance-based RSUs; and

 

   

Time-based RSUs.

Performance-based RSUs are designed to reward executive officers in proportion to the Company’s financial performance based on the predetermined performance measure during the one-year performance period. Following the conclusion of the one-year performance period, the performance-based RSUs are also subject to a subsequent two-year time-based vesting feature, such that performance-based RSUs cliff vest on the third anniversary of the grant date. Accordingly, the performance-based RSUs vest 100% on the third anniversary of the grant date subject to and based upon the achievement of the performance goal during the one-year

 

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performance period. If threshold performance is not achieved during the performance period, the performance-based RSUs are forfeited in their entirety.

Time-based RSUs provide retention value because they generally vest 100% on the third anniversary of the grant date. Since the stock unit value is tied directly to the market value of the Company’s Shares, and not exclusively to an increase in the market value of the Company’s Shares, they provide retention value even when the stock price is stable or declining.

Non-Employee Director Compensation

The Company’s current director compensation policy provides that each non-employee director receives:

 

Annual Cash Retainer

   $ 90,000  

Annual Equity Retainer

   $ 150,000  

Audit Committee Member Retainer(1)

   $ 20,000  

Human Capital and Compensation Committee Member Retainer(1)

   $ 15,000  

Nominating and Corporate Governance Committee Member Retainer(1)

   $ 15,000  

Technology Committee Member Retainer(1)

   $ 15,000  

Audit Committee Chair Retainer(2)

   $ 40,000  

Human Capital and Compensation Committee Chair Retainer(2)

   $  35,000  

Nominating and Corporate Governance Committee Chair Retainer(2)

   $ 30,000  

Technology Committee Chair Retainer(2)

   $ 30,000  

 

(1)

Additional annual retainer for committee service for each committee on which such director serves (provided that the committee chairs do not receive such additional retainer).

(2)

The chairs of the Audit Committee, the Committee, Nominating and Corporate Governance Committee, and Technology Committee each receive an additional $40,000, $35,000, $30,000, and $30,000, respectively, in cash or stock (as they may elect) per year.

The annual retainers are paid as follows:

 

   

The annual cash retainer and the additional annual retainer for committee service are payable in quarterly installments on the last day of each fiscal quarter; and

 

   

The annual equity retainer is granted on the date of each annual meeting of the shareholders for the purpose of electing directors, determined by dividing the amount of the retainer by the per-share closing price of our Shares on the grant date.

In addition, the Company pays attorneys’ fees related to the preparation and filing of director stock ownership forms with the SEC.

Standard Executive Agreements with Named Executive Officers

Mr. Poff, Ms. Ferrée, and Mr. Howe have standard executive agreements with the Company that provide for payments and benefits following termination of their employment without “cause.” The agreement with Ms. Ferrée also includes payments and benefits if she terminates employment for “good reason.”

Generally, pursuant to the Company’s NEOs’ standard executive agreements (other than Mr. Schottenstein, who does not have an employment agreement), if the Company involuntarily terminates the NEO’s employment

 

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without “cause,” and in the case of Ms. Ferrée, if she terminates her employment for “good reason,” each NEO (other than Mr. Schottenstein) is entitled to receive the following:

 

   

salary continuation for a 12-month period (18 months in the case of Mr. Howe) based on the executive’s salary as of the date of termination;

 

   

a pro-rata share of any annual cash incentive bonus paid for performance in the fiscal year in which the termination occurs;

 

   

one year (18 months in the case of Mr. Rawlins and, effective as of April 1, 2023, in the case of Mr. Howe) of accelerated vesting with respect to outstanding stock options and performance-based and time-based RSUs; and

 

   

reimbursement for the cost of maintaining continuing health coverage under Consolidated Omnibus Budget Reconciliation Act (“COBRA”) for a period of no more than 12 months following the date of termination (18 months in the case of Ms. Ferrée and Mr. Howe), less the amount the executive is expected to pay as a regular employee premium for such coverage.

Also, pursuant to the Designer Brands Inc. 2005 Cash Incentive Compensation Plan (as amended and restated, the “ICP”), if employment terminates as a result of death or disability, the NEO is entitled to receive a pro-rata share of any annual cash incentive bonus paid for performance in the fiscal year in which the termination occurs, but only if the performance criteria applicable to that performance period are met at the end of that performance period.

Equity Plans

Pursuant to our 2005 Equity Plan, any applicable award agreement executed in accordance therewith, and applicable award agreements executed in accordance with the LTI Plan, prior to January 1, 2018, termination by reason of death, disability, or retirement (defined as termination after reaching age 65 and completing at least five years of employment) entitles each NEO to receive accelerated vesting with respect to all equity awards that are not vested as of the date of termination. For awards granted on or after January 1, 2018, there is no automatic right to full vesting of awards upon a participant’s retirement under the LTI Plan.

The LTI Plan provides for accelerated vesting of equity awards granted thereunder upon certain qualifying employment terminations following a change in control. In the event of a change in control (as defined in the LTI Plan) and to the extent that outstanding awards are not assumed by a successor entity or replaced with a replacement award: (i) all options and stock appreciation rights will immediately vest and become exercisable; (ii) the restrictions on all RSUs will lapse and all time-based RSUs will vest immediately; and (iii) all performance-based RSUs will immediately vest and be considered earned and paid in full “at target” as if the applicable performance goal had been achieved. Additionally, the Committee may provide in the applicable award agreement that if within two years of a change in control a plan participant is involuntarily terminated by the Company for reasons other than cause or good reason, then (i), (ii), and (iii) above shall occur. The Committee, as constituted before a change in control, may also provide for the cancellation of an award for an amount of cash equal to the difference between the exercise price and the then fair market value of the Shares had such award been currently exercisable, make any adjustment deemed appropriate to reflect the change in control, or cause an outstanding award to be assumed by the successor entity after the change in control.

Stock Ownership Guidelines

The Company has implemented a stock ownership guideline for the CEO. Under this guideline, the CEO is encouraged to hold shares of the Company’s stock with a value at least equal to one (1) times the CEO’s annual base salary, to be achieved within three years of becoming CEO. Counting only directly-owned, fully-vested shares, Mr. Rawlins owned shares representing more than five times the ownership guideline as of January 28, 2023. Mr. Howe, who succeeded Mr. Rawlins as the Company’s CEO effective as of April 1, 2023, does not yet

 

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own shares in excess of the ownership guidelines, but has three years from the date of his promotion to CEO to satisfy the stock ownership guidelines.

Board members have an ownership guideline of five times their annual cash retainer (excluding committee fees) to be achieved within five years of joining the Board. The following forms of equity interests count towards the stock ownership requirement: (i) shares purchased on the open market; (ii) shares obtained through stock option exercise; (iii) shares held as deferred stock units; (iv) shares held in benefit plans; (v) shares held in trust for the economic benefit of the director, his or her spouse, or his or her dependent children; (vi) shares owned jointly or separately by the director’s spouse or dependent children; and (vii) unvested restricted stock units. Unexercised stock options do not count. As of January 23, 2023, all Board members have either met the ownership guidelines or are still within the five-year compliance time frame.

Transactions with Executive Officers, Directors and Other Related Persons

As of March 31, 2023, Jay L. Schottenstein, the Executive Chairman of the Company, beneficially owned approximately 14,552,709 Shares in the aggregate. Included in the aggregate number of Shares that Mr. Schottenstein beneficially owned as of that date are approximately 7,720,154 Class B Common Shares that may be converted into Shares on a one-for-one basis at any time. Mr. Schottenstein serves as chairman of Schottenstein Stores Corporation (“SSC”) and other affiliated entities of SSC. For fiscal 2022, we paid approximately $12,087 million in total fees, rents, and expenses to SSC and its affiliates.

In the ordinary course of business, we have entered into a number of agreements with SSC and its affiliates relating to our business and our relationship with these companies, the material terms of which are described below. We believe that each of the agreements entered into with these entities is on terms at least as favorable to us as could be obtained in an arm’s-length transaction with an unaffiliated third party. Second Avenue Capital Partners, an operating division of SB360 Capital Partners (“SB360”), may receive a customary referral fee in connection with the Financing Arrangement. SB360 is an affiliate of SSC.

In the event that we desire to enter into any agreements with SSC or any of our directors, officers, or other affiliates in the future, in accordance with Ohio law, any contract, action, or other transaction between or affecting us and one of our directors or officers or between or affecting us and any entity in which one or more of our directors or officers is a director, trustee, or officer or has a financial or personal interest, will either (i) be approved by the shareholders, a majority of the disinterested members of our Board, or a committee of our Board that authorizes such contracts, action, or other transactions or (ii) be fair to us as of the time our directors, a committee of our directors, or our shareholders approve the contract, action, or transaction. In addition, any transactions with directors, officers, or other affiliates will be subject to requirements of the Sarbanes-Oxley Act of 2002 and other SEC rules and regulations, as well as to our written related person transactions policy described above.

Management Agreement

On November 1, 2012, we entered into a management agreement (the “Management Agreement”) with Schottenstein Property Group, LLC (“SPG”), an affiliate of SSC, pursuant to which SPG engages third parties to provide management, operation, repair, maintenance, replacement, and supervision services (the “Services”) for DBI’s corporate headquarters and Columbus distribution center, which are contiguous to property owned by SPG. SPG previously managed the properties prior to the Company’s purchase on November 1, 2012. The Company does not pay compensation to SPG under the Management Agreement, but the Company reimburses SPG for certain costs incurred in connection with the Services. Under this agreement, we incurred approximately $.05 million of expense for fiscal 2022. Mr. Joseph Schottenstein, a member of the Board, is an executive officer of SPG.

 

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Leases and Subleases

Fulfillment Center. In fiscal 2007, we entered into a lease for a fulfillment center for dsw.com adjacent to our existing home office in Columbus, Ohio, and this agreement was amended in fiscal 2016. The landlord is an affiliate of SSC. Under the amended lease, the term expired in September 2022. Following expiration of the amended lease, we entered into two new leases for two sections within the building, which are being used as a fixture warehouse and a photo studio. Under the original amended lease agreement, we incurred approximately $1.8 million of expense for fiscal 2022, and under the two new leases we incurred an additional $0.1 million of expense, resulting in a total $1.9 million of expense for fiscal 2022 (includes rent, real estate taxes, insurance, and common area maintenance). Additionally, following expiration of the amended lease, we paid approximately $0.9 million to the landlord for disposal costs related to equipment owned by the Company remaining in the fulfillment center.

Utilities. In connection with our lease for the fulfillment center (described above), we incurred approximately $0.8 million of expense related to the payment of utilities to the landlord in fiscal 2022. The landlord of this facility is an affiliate of SSC.

DSW stores. As of January 28, 2023, we leased or subleased 15 DSW stores from affiliates of SSC. We incurred approximately $6.8 million of rent and approximately $1.4 million of other expense (real estate taxes, maintenance, and insurance) related to these leases for fiscal 2022. In addition to these charges, for each lease, we also pay percentage rent equal to approximately 2% annually of gross sales that exceed specified breakpoints that increase as the minimum rent increases. These leases have terms expiring between October 2023 and November 2029 and generally have two or three renewal options of five years each.

Agreement for Media Services

We receive media services for our stores from Retail Entertainment Design (“RED”), an affiliate of SSC. The agreement provides for media services such as digital music, video services, and other related services. For fiscal 2022, we paid approximately $0.4 million to RED.

Consulting/Professional Services Agreement

We receive consulting/professional services from Charles Spicer, Inc., an affiliate of SSC. The consulting/professional services include, among other things, strategic planning, financial matters, risk analysis and management, mergers, acquisitions, business development, and general corporate, operational, and organizational matters. For fiscal 2022, we paid approximately $0.3 million to Charles Spicer, Inc.

Corporate Services Agreement with SSC

We receive services from SSC pursuant to a Corporate Services Agreement between us and SSC. The agreement sets forth the costs of shared services, including specified legal, travel expense, and administrative services. For fiscal 2022, our allocated portion of the amount we paid to SSC was approximately $0.3 million.

General

Except as otherwise described or incorporated by reference in this Offer to Purchase, the Schedule TO or Company’s most recent proxy statement, and except for the stock-based compensation plans, which are described in Note 6 to the financial statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2023, which descriptions are incorporated herein by reference, and the agreements described above, none of the Company nor, to the best of the Company’s knowledge, any of its affiliates, directors, or executive officers, is a party to any contract, arrangement, understanding, or relationship with any other person relating, directly or indirectly, to the Offer or with respect to any securities of the Company, including, but not

 

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limited to, any contract, arrangement, understanding, or relationship concerning the transfer or the voting of securities, joint ventures, loan or option arrangements, puts or calls, guaranties of loans, guaranties against loss or the giving or withholding of proxies, consents, or authorizations.

The foregoing descriptions of agreements and arrangements involving the Shares are qualified in their entirety by reference to the text of the respective agreements and arrangements, copies of which have been filed with the SEC.

 

13.

Certain Legal Matters; Regulatory Approvals

We are not aware of any license or regulatory permit that is reasonably likely to be material to our business that might be adversely affected by our acquisition of Shares as contemplated in the Offer or of any approval or other action by any government or governmental, administrative or regulatory authority or agency, domestic, foreign or supranational, that would be required for our acquisition or ownership of Shares as contemplated by the Offer. Should any approval or other action be required, we presently contemplate that we will seek that approval or other action, but we have no current intention to delay the purchase of Shares tendered pursuant to the Offer pending the outcome of any such matter, subject to our right to decline to purchase Shares if any of the conditions in Section 7 have occurred or are deemed by us to have occurred or have not been waived. We cannot predict whether we would be required to delay the acceptance for payment of or payment for Shares tendered pursuant to the Offer pending the outcome of any such matter. We cannot assure you that any approval or other action, if needed, would be obtained or would be obtained without substantial cost or conditions or that the failure to obtain the approval or other action might not result in adverse consequences to our business and financial condition. If certain types of adverse actions are taken with respect to the matters discussed above, or certain approvals, consents, licenses or permits identified above are not obtained, we can decline to accept for payment or pay for any Shares tendered. See Section 7.

 

14.

United States Federal Income Tax Consequences

The following discussion is a summary of certain U.S. federal income tax considerations of participating in the Offer for “U.S. Holders” or “Non-U.S. Holders” (each as defined below). This discussion is based upon the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), Treasury regulations promulgated thereunder, administrative rulings and judicial decisions, all as of the date hereof, which are subject to change, potentially with retroactive effect. This discussion is not binding on the United States Internal Revenue Service (“IRS”). We have not sought any ruling from the IRS with respect to the statements made and the conclusions reached in the following summary, and there can be no assurance that the IRS will agree with such statements and conclusions.

This discussion is for general information only and does not address all tax considerations applicable to an investor’s particular circumstances or to investors that may be subject to special tax rules, including, without limitation:

 

   

insurance companies;

 

   

tax-exempt organizations;

 

   

brokers or dealers in securities or commodities;

 

   

traders in securities that make mark-to-market elections with respect to their securities holdings;

 

   

banks or other financial institutions;

 

   

real estate investment trusts;

 

   

regulated investment companies;

 

   

retirement plans;

 

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“controlled foreign corporations,” “passive foreign investment companies,” and corporations that accumulate earnings to avoid U.S. federal income tax;

 

   

“qualified foreign pension funds” as defined in Section 897(l)(2) of the Code and entities all of the interests of which are held by qualified foreign pension funds;

 

   

grantor trusts;

 

   

U.S. Holders whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;

 

   

“S” corporations, partnerships or other pass-through entities and investors in such entities;

 

   

employee benefit plans;

 

   

U.S. expatriates or former citizens or residents of the United States;

 

   

personal holding companies;

 

   

persons that hold or have held (directly, indirectly or constructively) more than 5% of our Shares;

 

   

persons that hold Shares as part of a hedge, straddle, conversion, constructive sale or other integrated transaction;

 

   

persons for whom the sale of Shares pursuant to the Offer would constitute a “wash sale” for U.S. federal income tax purposes;

 

   

directors, employees, former employees or other persons who received our Shares pursuant to the exercise of any employee stock option or otherwise as compensation; or

 

   

persons subject to special tax accounting rules as a result of any item of gross income with respect to Shares being taken into account in an applicable financial statement.

In addition, this discussion does not address any tax consequences arising from the Medicare tax on net investment income, the sale of Shares acquired pursuant to any employee benefit plans or the alternative minimum tax. This discussion also does not address the tax considerations arising under any state or local or non-U.S. laws, or under U.S. federal estate or gift tax laws. This summary assumes that shareholders hold the Shares as “capital assets” for U.S. federal income tax purposes (generally, property held for investment).

This summary also does not address the tax consequences of transactions effectuated before, after, or concurrently with the Offer (whether or not any such transactions are consummated in connection with the Offer), including, without limitation, any transaction in which Shares are involved, or the tax consequences to holders of any other interest in the Company, including options or similar rights to acquire Shares.

In addition, this discussion does not address the tax treatment of partnerships or other entities or arrangements that are pass-through entities for U.S. federal income tax purposes or persons that hold Shares through partnerships or other pass-through entities or arrangements. Accordingly, partnerships or other pass-through entities or arrangements that hold Shares and partners in or owners of such partnerships or pass-through entities or arrangements should consult their tax advisors.

As used herein, the term “U.S. Holder means a beneficial owner of Shares that is for U.S. federal income tax purposes:

 

   

an individual who is a citizen or resident of the United States;

 

   

a corporation, or any other entity taxable as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States, any state thereof, or the District of Columbia;

 

   

an estate, the income of which is subject to U.S. federal income tax regardless of its source; or

 

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a trust if (1) a court within the United States is able to exercise primary supervision over its administration and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) the trust has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

As used herein, a “Non-U.S. Holder is a beneficial holder of Shares (other than a partnership or any other entity or arrangement that is treated as a pass-through entity for U.S. federal income tax purposes) that is not a U.S. Holder.

Investors are urged to consult their tax advisors regarding the particular tax consequences to them of participating in the Offer, including the applicability and effects of U.S. federal estate or gift tax rules or the laws of any U.S. state or local or any non-U.S. or other taxing jurisdiction or any applicable tax treaty.

Non-Tendering Shareholders

The Offer generally should not result in any direct U.S. federal income tax consequences to shareholders that do not tender any Shares in the Offer.

Tender of Shares by U.S. Holders Pursuant to the Offer

Characterization of the Purchase—Distribution vs. Sale Treatment. The exchange of Shares for cash pursuant to the Offer will be a taxable transaction for U.S. federal income tax purposes. A U.S. Holder that participates in the Offer will, depending on such U.S. Holder’s particular circumstances, be treated as either as recognizing gain or loss from the disposition of the Shares or as receiving a distribution from us as described in more detail below.

Under the stock redemption rules of Section 302 of the Code, a U.S. Holder will recognize gain or loss on an exchange of Shares for cash pursuant to the Offer if the exchange: (a) results in a “complete termination” of all such U.S. Holder’s equity interest in the Company, (b) results in a “substantially disproportionate” redemption with respect to such U.S. Holder, or (c) is “not essentially equivalent to a dividend” with respect to the U.S. Holder (together, the “Section 302 tests”).

In applying the Section 302 tests, a U.S. Holder must take into account stock that such U.S. Holder actually owns as well as stock the U.S. Holder constructively owns under certain attribution rules set forth in Section 318 of the Code, pursuant to which the U.S. Holder will be treated as owning Shares owned by certain family members (except that in the case of a “complete termination” a U.S. Holder may waive, under certain circumstances, attribution from family members) and related entities and Shares that the U.S. Holder has the right to acquire by exercise of an option. U.S. Holders should consult their tax advisors with respect to the operation of these constructive ownership rules.

An exchange of Shares for cash generally will result in a “complete termination” with respect to a U.S. Holder if either (a) all of the Shares actually and constructively owned by the U.S. Holder are exchanged for cash pursuant to the Offer or (b) all of the Shares actually owned by the U.S. Holder are exchanged for cash pursuant to the Offer and the U.S. Holder is eligible to waive, and effectively waives, the attribution of all Shares constructively owned by the U.S. Holder in accordance with the procedures described in Section 302(c)(2) of the Code. Generally, a U.S. Holder can only waive attribution of Shares owned by certain family members. A U.S. Holder may also satisfy the “complete termination” test if, in the same transaction, some of its Shares are exchanged for cash pursuant to the Offer and all of the remainder of its Shares are sold or otherwise transferred to a third party so that after the transaction the U.S. Holder no longer owns (actually or constructively) any Shares. U.S. Holders wishing to satisfy the “complete termination” test through waiver of attribution in accordance with the procedures described in Section 302(c)(2) of the Code should consult their tax advisors concerning the mechanics and desirability of such a waiver.

An exchange of Shares for cash will generally be a “substantially disproportionate” redemption with respect to a U.S. Holder if, among other things, (i) the percentage of voting stock owned (directly and by attribution) by such

 

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U.S. Holder in the Company immediately after the exchange (and other exchanges made pursuant to the Offer) is less than 80% of the same percentage owned (directly and by attribution) by such U.S. Holder in the Company immediately before the exchange (and other exchanges made pursuant to the Offer) and (ii) the percentage of the then-outstanding common stock (voting or nonvoting) owned (directly and by attribution) by such U.S. Holder in the Company immediately after the exchange (and other exchanges made pursuant to the Offer) is less than 80% of the same percentage owned (directly and by attribution) by such U.S. Holder in the Company immediately before the exchange (and other exchanges made pursuant to the Offer). U.S. Holders are urged to consult their tax advisors regarding the application of the “substantially disproportionate” test in their particular circumstances.

If an exchange of Shares for cash fails to satisfy the “complete termination” and “substantially disproportionate” tests, the U.S. Holder nonetheless may satisfy the “not essentially equivalent to a dividend” test. An exchange of Shares for cash will generally satisfy the “not essentially equivalent to a dividend” test if it results in a “meaningful reduction” of the U.S. Holder’s equity interest in the Company. An exchange of Shares for cash that results in any reduction of the proportionate equity interest in the Company held by a U.S. Holder with a relative equity interest that is minimal (taking into account the constructive ownership rules above) and who does not exercise any control over or participate in the Company’s management should generally be treated as “not essentially equivalent to a dividend.” U.S. Holders are urged to consult their tax advisors regarding the application of the Section 302 tests in their particular circumstances.

We cannot predict whether any particular U.S. Holder will be subject to sale or exchange treatment, on the one hand, or distribution treatment, on the other hand. Contemporaneous dispositions or acquisitions of Shares (pursuant to the Offer or otherwise, including market sales and purchases) by a U.S. Holder or related individuals or entities may be deemed to be part of a single integrated transaction and may be taken into account in determining whether the Section 302 tests have been satisfied. Each U.S. Holder should be aware that because proration may occur in the Offer, even if all the Shares actually and constructively owned by a U.S. Holder are tendered pursuant to the Offer, fewer than all of such Shares may be purchased by us. Consequently, we cannot assure you that a sufficient number of any particular U.S. Holder’s Shares will be purchased to ensure that this purchase will be treated as a sale or exchange, rather than as a distribution, for U.S. federal income tax purposes pursuant to the rules discussed herein. A tendering U.S. Holder may choose to submit a “conditional tender” under the procedures described in Section 6, which allows the U.S. Holder to tender Shares subject to the condition that a specified minimum number of the U.S. Holder’s Shares must be purchased by us if any such Shares so tendered are purchased. Further, if other shareholders sell a greater percentage of their Shares pursuant to the Offer than a particular U.S. Holder, the U.S. Holder’s proportionate interest in the Company may increase immediately following the Offer even if that U.S. Holder sells shares for cash pursuant to the Offer and does not (actually or constructively) acquire any other common stock of the Company, and such increase would cause the U.S. Holder not to meet any of the Section 302 tests.

Sale or Exchange Treatment. If a U.S. Holder is treated under the Section 302 tests as recognizing gain or loss from the “sale or exchange” of the Shares for cash, such gain or loss will be equal to the difference, if any, between the amount of cash received and such U.S. Holder’s tax basis in the Shares exchanged therefor. Generally, a U.S. Holder’s tax basis in the Shares will be equal to the cost of the Shares to the U.S. Holder reduced (but not below zero) by any previous returns of capital. Any gain or loss will be capital gain or loss and will be long-term capital gain or loss if the holding period of the Shares exceeds one (1) year as of the date of the exchange. Long-term capital gain is currently subject to a reduced rate of tax for non-corporate U.S. Holders (including individuals). The deductibility of capital losses is subject to limitations. A U.S. Holder must calculate gain or loss separately for each block of Shares (generally, Shares acquired at the same cost in a single transaction). A U.S. Holder may be able to designate which blocks of Shares it wishes to tender in the Offer and the order in which different blocks will be purchased in the event that less than all of its Shares are accepted for purchase. U.S. Holders that own separate blocks of Shares should consult their tax advisor with respect to these rules.

 

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Distribution Treatment. If a U.S. Holder is not treated under the Section 302 tests as recognizing gain or loss from the “sale or exchange” of Shares for cash pursuant to the Offer, the entire amount of cash received by such U.S. Holder pursuant to the Offer will be treated as a distribution by the Company with respect to the U.S. Holder’s Shares. The amount of any distribution will be treated as a dividend to the extent of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles) allocable to such Shares. Distributions in excess of our current and accumulated earnings and profits will be treated first as a non-taxable return of capital, thereby reducing the U.S. Holder’s adjusted tax basis (but not below zero) in the Shares and thereafter as either long-term or short-term capital gain, as applicable. Any remaining tax basis in the Shares tendered will be transferred to any remaining Shares held by such U.S. Holder (and may be lost if the U.S. Holder does not retain any Shares after the Offer).

To the extent that cash received in exchange for Shares is treated as a dividend to a corporate U.S. Holder, (i) it generally will be eligible for a dividends-received deduction (subject to certain requirements and limitations) and (ii) it may be subject to the “extraordinary dividend” provisions of Section 1059 of the Code. Generally, an “extraordinary dividend” is a dividend with respect to a Share that is equal to or in excess of 10% of a shareholder’s adjusted tax basis (or fair market value upon the shareholder’s election) in such Share. In addition, extraordinary dividends include dividends received within a one-year period that, in the aggregate, exceed 20% of the shareholder’s adjusted tax basis (or fair market value upon the shareholder’s election). Corporate U.S. Holders should consult their tax advisors concerning the availability of the dividends-received deduction and the application of the “extraordinary dividend” provisions of the Code in their particular circumstances.

The determination of whether a corporation has current or accumulated earnings or profits is complex and the legal standards to be applied are subject to uncertainties and ambiguities. Additionally, whether a corporation has current earnings and profits can be determined only at the end of the taxable year. Accordingly, if the sale of Shares pursuant to the Offer is treated as a distribution rather than a sale or exchange under Section 302 of the Code, the extent to which such sale will be treated as a dividend is unclear.

Tender of Shares by Non-U.S. Holders Pursuant to the Offer

Sale or Exchange Treatment. Subject to the discussion below under “Withholding for Non-U.S. Holders,” if a Non-U.S. Holder’s sale of Shares for cash pursuant to the Offer is treated as a “sale or exchange” under the Section 302 tests described above under “Tender of Shares by U.S. Holders Pursuant to the Offer—Characterization of the Purchase—Distribution vs. Sale Treatment,” any gain realized by such Non-U.S. Holder on the sale generally will not be subject to U.S. federal income tax unless: (i) that gain is effectively connected with the conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a U.S. permanent establishment) of the Non-U.S. Holder or (ii) the Non-U.S. Holder is a non-resident alien individual who is physically present in the United States for 183 days or more in the taxable year of that disposition, and certain other conditions are met.

A Non-U.S. Holder described in clause (i) of the preceding paragraph will generally be required to pay U.S. federal income tax on the net gain derived from the disposition in the same manner as if such Non-U.S. Holder were a U.S. Holder, and if such Non-U.S. Holder is a foreign corporation, an additional branch profits tax at a rate equal to 30% (or such lower rate as may be specified by an applicable income tax treaty) may apply to any effectively connected earnings and profits, subject to certain adjustments. A Non-U.S. Holder described in clause (ii) of the preceding paragraph will generally be subject to U.S. federal income tax at a rate of 30% (or such lower rate as may be specified by an applicable income tax treaty) on the gain derived from the disposition, which may be offset by U.S. source capital losses even though the Non-U.S. Holder is not considered a resident of the United States, provided the Non-U.S. Holder has timely filed U.S. federal income tax returns with respect to such losses.

Distribution Treatment. If a Non-U.S. Holder is not treated under the Section 302 tests as recognizing gain or loss on a “sale or exchange” of Shares for cash, the entire amount of cash received by such Non-U.S. Holder

 

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pursuant to the Offer (including any amount withheld, as discussed below) will be treated as a distribution by us with respect to the Non-U.S. Holder’s Shares. The treatment for U.S. federal income tax purposes of such distribution as a dividend, non-taxable return of capital, or gain from the sale or exchange of Shares will be determined in the manner described above under “Tender of Shares by U.S. Holders Pursuant to the Offer—Distribution Treatment.”

Except as described in the following paragraphs, to the extent that amounts received by the Non-U.S. Holder are treated as dividends, such dividends will be subject to U.S. federal withholding tax at a rate of 30% (or a lower rate specified in an applicable income tax treaty). As discussed below under “Withholding for Non-U.S. Holders,” all payments made pursuant to the Offer to Non-U.S. Holders may be presumed to be dividends for withholding purposes. A Non-U.S. Holder who wishes to claim the benefit of a reduced rate of U.S. withholding tax under an applicable treaty for dividends that are not effectively connected with the conduct of a U.S. trade or business must furnish to the applicable withholding agent a properly executed IRS Form W-8BEN or IRS Form W-8BEN-E (or applicable successor form) certifying, under penalties of perjury, that such Non-U.S. Holder is not a U.S. person and such holder’s qualification for the reduced rate. Special certification and other requirements apply to certain Non-U.S. Holders that hold Shares through certain non-U.S. intermediaries or are pass-through entities rather than corporations or individuals. If a Non-U.S. Holder is eligible for a reduced rate of U.S. withholding tax pursuant to an applicable income tax treaty, such Non-U.S. Holder may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS. Non-U.S. Holders are urged to consult their tax advisors regarding their entitlement to, and the procedure for obtaining, benefits under an applicable income tax treaty.

Any amounts treated as dividends that are effectively connected with the conduct of a trade or business by the Non-U.S. Holder within the United States (and, if required by an applicable income tax treaty, are attributable to a U.S. permanent establishment) generally are not subject to U.S. federal withholding tax. Instead, unless an applicable income tax treaty provides otherwise, the Non-U.S. Holder generally will be subject to U.S. federal income tax on those dividends in the same manner applicable to U.S. Holders, described above. In addition, a Non-U.S. Holder that is a foreign corporation may be subject to a branch profits tax at a 30% rate (or a lower rate if so specified by an applicable income tax treaty) on any effectively connected earnings and profits, subject to certain adjustments. To claim the exemption from withholding for income that is effectively connected with a U.S. trade or business, the Non-U.S. Holder must furnish to the applicable withholding agent a properly executed IRS Form W-8ECI (or applicable successor form) certifying, under penalties of perjury, that such Non-U.S. Holder is not a U.S. person and the dividends are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States and includible in the Non-U.S. Holder’s gross income.

Withholding For Non-U.S. Holders. Because, as described above, it is unclear and fact-dependent whether the cash received by a particular Non-U.S. Holder in connection with the Offer will be treated (i) as proceeds of a sale or exchange or (ii) as a distribution, the Depositary or other applicable withholding agent may treat any such payment as a dividend distribution for withholding purposes. Accordingly, payments to Non-U.S. Holders may be subject to withholding at a rate of 30% of the gross proceeds paid, unless the Non-U.S. Holder establishes an entitlement to a reduced or zero rate of withholding by timely completing, under penalties of perjury, the applicable IRS Form W-8 as discussed above. To the extent Non-U.S. Holders tender Shares held in a United States brokerage account or otherwise through a United States broker, dealer, commercial bank, trust company, or other nominee, such Non-U.S. Holders should consult such United States broker or other nominee and their tax advisors to determine the particular withholding procedures that will be applicable to them.

A Non-U.S. Holder may be eligible to obtain a refund of all or a portion of any U.S. federal tax withheld if such shareholder meets the “complete termination,” “substantially disproportionate” or “not essentially equivalent to a dividend” tests described above under “Tender of Shares by U.S. Holders Pursuant to the Offer—Characterization of the Purchase—Distribution vs. Sale Treatment” or if the shareholder is entitled to a reduced or zero rate of withholding pursuant to any applicable income tax treaty and a higher rate was withheld.

 

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Non-U.S. Holders are urged to consult their tax advisors regarding the U.S. federal income tax consequences of participation in the Offer, including the application of U.S. federal income tax withholding rules, eligibility for a reduction of or an exemption from withholding tax, and the procedure for obtaining any available refund, as well as the applicability and effect of state, local, foreign and other tax laws.

FATCA

Under Sections 1471 through 1474 of the Code, commonly referred to as “FATCA,” and related administrative guidance, a U.S. federal withholding tax of 30% generally will be imposed on dividends that are paid to “foreign financial institutions” and “non-financial foreign entities” (as specifically defined under these rules), whether such institutions or entities hold Shares as beneficial owners or intermediaries, unless specified requirements are met or an exemption applies. Because, as discussed above, the Depositary or other applicable withholding agent may treat amounts paid to Non-U.S. Holders in the Offer as dividends for U.S. federal income tax purposes, such amounts may also be subject to withholding under FATCA if such requirements are not met. In such case, any withholding under FATCA may be credited against, and therefore reduce, any 30% withholding tax on dividend distributions as discussed above. Non-U.S. Holders should consult with their tax advisors regarding the possible implications of these rules on their disposition of Shares pursuant to the Offer.

Backup Withholding and Information Reporting

Payments made to shareholders in the Offer may be reported to the IRS. In addition, under the U.S. federal income tax laws, backup withholding at the statutory rate (currently 24%) may apply to the amount paid to certain shareholders (who are not “exempt” recipients) pursuant to the Offer. To prevent such backup U.S. federal income tax withholding, each shareholder who is a U.S. Holder and who does not otherwise establish an exemption from backup withholding must notify the Depositary or other applicable withholding agent of the shareholder’s taxpayer identification number (employer identification number or social security number) and provide to the Depositary or applicable withholding agent certain other information by completing, under penalties of perjury, an IRS Form W-9, a copy of which is included in the Letter of Transmittal.

Certain “exempt” recipients (including, among others, most corporations and certain Non-U.S. Holders) are not subject to these backup withholding requirements. For a Non-U.S. Holder to qualify for such exemption, such Non-U.S. Holder must submit to the applicable withholding agent a statement (generally, an IRS Form W-8BEN or W-8BEN-E or other applicable IRS Form W-8), signed under penalties of perjury, attesting to such Non-U.S. Holder’s non-U.S. status. A copy of the appropriate IRS Form W-8 may be obtained from the Depositary or from the IRS website (www.irs.gov). A disregarded domestic entity that has a foreign owner must use the appropriate IRS Form W-8, and not the IRS Form W-9. Backup withholding generally will not apply to amounts paid to Non-U.S. Holders that are subject to the U.S. federal withholding tax discussed above under “Tender of Shares by Non-U.S. Holders Pursuant to the Offer—Withholding for Non-U.S. Holders.”

Backup withholding is not an additional tax. Taxpayers may use amounts withheld as a credit against their U.S. federal income tax liability or may claim a refund of such amounts if they timely provide certain required information to the IRS.

Shareholders should consult their tax advisors regarding the application of backup withholding to their particular circumstances and the availability of, and procedure for obtaining, an exemption from backup withholding.

The above discussion is not intended to constitute a complete analysis of all tax consequences relating to participating in the Offer. You should consult your tax advisor concerning the tax consequences applicable in your particular situation.

THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. YOU ARE URGED TO CONSULT YOUR TAX ADVISOR TO

 

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DETERMINE THE PARTICULAR TAX CONSEQUENCES TO YOU OF THE OFFER, INCLUDING THE APPLICABILITY AND EFFECT OF STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND TREATIES.

 

15.

Extension of the Offer; Termination; Amendment

We expressly reserve the right to extend the period of time the Offer is open and delay acceptance of, and payment for, any Shares by giving oral or written notice of such extension to the Depositary and making a public announcement of such extension. During any such extension, all Shares previously tendered and not properly withdrawn will remain subject to the Offer and to the rights of a tendering shareholder to withdraw such shareholder’s Shares.

We also expressly reserve the right, in our sole discretion, not to accept for payment and not to pay for any Shares not previously accepted for payment or paid for, subject to applicable law, to postpone payment for Shares or terminate the Offer upon the occurrence of any of the conditions specified in Section 7 by giving oral or written notice of the termination or postponement to the Depositary and making a public announcement of the termination or postponement. Our reservation of the right to delay payment for Shares that we have accepted for payment is limited by Exchange Act Rule 13e-4(f)(5), which requires that we must pay the consideration offered or return the Shares tendered promptly after termination or withdrawal of the Offer.

Subject to compliance with applicable law, we further reserve the right, in our reasonable discretion, and regardless of whether any of the events set forth in Section 7 have occurred or are deemed by us to have occurred, to amend the Offer in any respect, including, without limitation, by changing the per Share purchase price range or by increasing or decreasing the number of Shares sought in the Offer. Amendments to the Offer may be made at any time and from time to time by public announcement of the amendment. In the case of an extension, the amendment shall be issued no later than 9:00 a.m., New York City time, on the next business day after the last previously scheduled or announced Expiration Date. Any public announcement made pursuant to the Offer will be disseminated promptly to shareholders in a manner reasonably designed to inform shareholders of the change. Without limiting the manner in which we may choose to make a public announcement, except as required by applicable law, we will have no obligation to publish, advertise or otherwise communicate any public announcement other than by issuing a press release to the PR Newswire or comparable service.

If we materially change the terms of the Offer or the information concerning the Offer, or if we waive a material condition of the Offer, we will extend the Offer to the extent required by Exchange Act Rule 13e-4(e)(3) and 13e-4(f)(1). This rule and related releases and interpretations of the SEC provide that the minimum period during which an Offer must remain open following material changes in the terms of the Offer or information concerning the Offer (other than a change in price or a change in percentage of securities sought) will depend on the facts and circumstances, including the relative materiality of the terms or information. If:

 

   

we increase or decrease the price range to be paid for Shares or increase or decrease the number of Shares sought in the Offer (but, in the event of an increase, only if we increase the number of Shares sought by more than 2% of the outstanding Shares), and

 

   

the Offer is scheduled to expire at any time earlier than the expiration of a period ending on the tenth (10th) business day from, and including, the date that notice of such an increase or decrease is first published, sent or given to security holders in the manner specified in this Section 15, then, in each case, the Offer will be extended until the expiration of the period of at least ten (10) business days from, and including, the date of such notice. For purposes of the Offer, a “business day means any day other than a Saturday, Sunday or Federal holiday and consists of the time period from 12:01 A.M. through 12:00 Midnight, at the end of the day, New York City time.

In accordance with the rules of the SEC, if more than $100 million in aggregate purchase price of Shares is tendered in the Offer at or below the Purchase Price, we may increase the number of Shares accepted for

 

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payment in the Offer by no more than 2% of the outstanding Shares without extending the Expiration Date. See Section 1.

 

16.

Fees and Expenses

We have retained BofA Securities, Inc. and BMO Capital Markets Corp. to act as Dealer Managers in connection with the Offer. The Dealer Managers may communicate with brokers, dealers, commercial banks, trust companies, nominees and other holders with respect to the Offer. The Dealer Managers will receive a reasonable and customary fee for these services. We have also agreed to reimburse the Dealer Managers for certain reasonable out-of-pocket expenses incurred in connection with the Offer, including fees and expenses of counsel, and to indemnify the Dealer Managers against liabilities in connection with the Offer, including liabilities under the federal securities laws. Centerview Partners LLC served as a financial advisor in connection with the transaction and will receive a reasonable and customary fee for its services.

The Dealer Managers and their respective its affiliates have provided, and may in the future provide, various investment banking, commercial banking and other services to us for which they have received, or we expect they will receive, customary compensation from us. In particular, certain affiliates of BofA Securities, Inc. and BMO Capital Markets Corp. are agents or lenders under our current senior secured asset-based revolving credit facility (the “ABL Revolver”). While we will not utilize the ABL Revolver as a source of funds for the Offer, we will be required to amend the ABL Revolver in order to enter into the proposed new term loan, and the respective administrative agents under the ABL Revolver and the proposed term loan will be required to enter into an intercreditor agreement in connection therewith, which we also refer to as the Financing Arrangement. We plan to fund any purchase of Shares pursuant to the Offer, including the related fees and expenses, through cash from the Financing Arrangement. See Section 9.

The Dealer Managers and their respective affiliates are securities firms each engaged in securities trading and brokerage activities and that provide investment banking and financial advisory services. Accordingly, in their ordinary course of business, including in their trading and brokerage operations and in a fiduciary capacity, the Dealer Managers and their respective affiliates may hold positions, both long and short, for their own accounts and for those of their customers, in our securities. The Dealer Managers may from time to time hold Shares in their proprietary accounts, and, to the extent they own Shares in these accounts at the time of the Offer, the Dealer Managers may tender the Shares pursuant to the Offer.

We have retained Georgeson LLC to act as Information Agent and Computershare Trust Company, N.A. to act as Depositary in connection with the Offer. The Information Agent may contact holders of Shares by mail, telephone, email and personal interviews and may request brokers, dealers, commercial banks, trust companies and other nominee shareholders to forward materials relating to the Offer to beneficial owners. The Information Agent and the Depositary will each receive reasonable and customary compensation for their respective services, will be reimbursed by us for reasonable out-of-pocket expenses and will be indemnified against certain liabilities in connection with the Offer.

We will not pay any fees or commissions to brokers, dealers, commercial banks, trust companies or other nominees (other than fees to the Dealer Managers and the Information Agent as described above) for soliciting tenders of Shares pursuant to the Offer. Shareholders holding Shares through brokers, dealers, commercial banks, trust companies or other nominees are urged to consult the brokers, dealers, commercial banks, trust companies or other nominees to determine whether transaction costs may apply if shareholders tender Shares through the brokers, dealers, commercial banks, trust companies or other nominees and not directly to the Depositary. We will, however, upon request, reimburse brokers, dealers, commercial banks, trust companies or other nominees for customary mailing and handling expenses incurred by them in forwarding this Offer to Purchase, the Letter of Transmittal and related materials to the beneficial owners of Shares held by them as a nominee or in a fiduciary capacity. No broker, dealer, commercial bank, trust company or other nominee has been authorized to act as our agent or the agent of the Dealer Managers, the Information Agent or the Depositary for purposes of the Offer. We

 

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will pay or cause to be paid all share transfer taxes, if any, on our purchase of Shares except as otherwise provided in Section 5 hereof and Instruction 6 in the Letter of Transmittal.

None of the Dealer Managers, the Information Agent or the Depositary assumes any responsibility for the accuracy or completeness of the information concerning the Company, its affiliates or the Offer contained or referred to in this Offer to Purchase or for any failure by the Company or its affiliates to disclose events that may have occurred and may affect the significance or accuracy of such information.

None of the Dealer Managers, the Information Agent or the Depositary makes any recommendation to you as to whether you should tender or refrain from tendering Shares or as to any price at which you may tender Shares. None of the Dealer Managers, the Information Agent or the Depository have provided any legal, accounting, regulatory or tax advice to us or with respect to the Offer.

On August 16, 2022, the Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) was signed into law, which legislation, among other things, imposes a 1% excise tax on the fair market value of stock repurchased by a publicly-traded domestic corporation beginning in 2023, with certain exceptions (the “Excise Tax”). The Excise Tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. For purposes of calculating the Excise Tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. Because we are an Ohio corporation and our stock trades on the NYSE, we are a “covered corporation” within the meaning of the Inflation Reduction Act, and while not free from doubt, it is anticipated that the Excise Tax will apply to our purchase of shares pursuant to the Offer and any other redemptions of our shares that occur during the same taxable year. The Excise Tax will not, however, apply to a repurchase or redemption of our shares that is treated as a dividend for U.S. federal income tax purposes. As discussed in Section 14, whether our purchase of shares from a shareholder pursuant to the Offer will be treated as a sale or exchange or as a distribution to the shareholder (which may be treated as a dividend) for U.S. federal income tax purposes will depend upon the shareholder’s particular facts and circumstances. To what extent the Company will be subject to the Excise Tax in connection with the Offer will depend on a number of factors, including the characterization of our repurchase of the shares for U.S. federal income tax purposes and the content of regulations and other guidance currently being written by the U.S. Department of Treasury. We expect to pay any Excise Tax with respect to the Offer when due.

 

17.

Miscellaneous

We are not aware of any jurisdiction where the making of the Offer is not in compliance with applicable law. If we become aware of any jurisdiction where the making of the Offer or the acceptance of Shares pursuant to the Offer is not in compliance with any applicable law, we will make a good faith effort to comply with the applicable law. If, after a good faith effort, we cannot comply with the applicable law, the Offer will not be made to, nor will tenders be accepted from or on behalf of, the holders of Shares residing in that jurisdiction, provided that we will comply with the requirements of Rule 13e-4(f)(8) promulgated under the Exchange Act. In any jurisdiction where the securities or blue sky laws require the Offer to be made by a licensed broker or dealer, the Offer is being made on our behalf by the Dealer Managers or one of more registered brokers or dealers, which are licensed under the laws of such jurisdiction.

Pursuant to Exchange Act Rule 13e-4, we have filed with the SEC the Schedule TO, which contains additional information relating to the Offer. The Schedule TO, including the exhibits and any amendments thereto, may be examined, and copies may be obtained, at the same places and in the same manner set forth in Section 10 with respect to information concerning our company.

You should rely only on the information contained in this document or to which we have referred you. We have not authorized anyone to make any recommendation on our behalf as to whether you should tender or refrain from tendering your Shares in the Offer or regarding the price or prices at which you should tender your Shares.

 

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We have not authorized anyone to provide you with information or to make any representation on our behalf in connection with the Offer other than those contained in this Offer to Purchase and the related Letter of Transmittal. If given or made, you should not rely on that information or representation as having been authorized by us, any member of our Board of Directors, the Dealer Managers, the Depositary or the Information Agent.

OUR BOARD OF DIRECTORS HAS AUTHORIZED US TO MAKE THE OFFER. HOWEVER, NONE OF THE COMPANY, THE MEMBERS OF OUR BOARD OF DIRECTORS, THE DEALER MANAGERS, THE INFORMATION AGENT OR THE DEPOSITARY HAS MADE ANY RECOMMENDATION AS TO WHETHER YOU SHOULD TENDER OR REFRAIN FROM TENDERING YOUR SHARES OR AS TO THE PURCHASE PRICE OR PURCHASE PRICES AT WHICH YOU MAY CHOOSE TO TENDER YOUR SHARES. NONE OF THE COMPANY, THE MEMBERS OF OUR BOARD OF DIRECTORS, THE DEALER MANAGERS, THE INFORMATION AGENT OR THE DEPOSITARY HAS AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR BEHALF AS TO WHETHER YOU SHOULD TENDER OR REFRAIN FROM TENDERING YOUR SHARES OR AS TO THE PURCHASE PRICE OR PURCHASE PRICES AT WHICH YOU MAY CHOOSE TO TENDER YOUR SHARES. NONE OF THE COMPANY, THE MEMBERS OF OUR BOARD OF DIRECTORS, THE DEALER MANAGERS, THE INFORMATION AGENT OR THE DEPOSITARY HAS AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL. YOU SHOULD NOT RELY ON ANY RECOMMENDATION, OR ANY SUCH REPRESENTATION OR INFORMATION, AS HAVING BEEN AUTHORIZED BY US, ANY MEMBER OF OUR BOARD OF DIRECTORS, THE DEALER MANAGERS, THE INFORMATION AGENT OR THE DEPOSITARY.

Designer Brands Inc.

June 8, 2023

 

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SCHEDULE I

DIRECTORS AND EXECUTIVE OFFICERS OF DESIGNER BRANDS INC.

The following table sets forth the names and positions of the directors and executive officers of Designer Brands Inc. The address of each of our directors and executive officers is care of Designer Brands Inc., 810 DSW Drive, Columbus, Ohio 43219 (telephone number: (614) 237-7100).

 

Name    Position(s)

Douglas M. Howe

   Chief Executive Officer and Director

Deborah L. Ferrée

   Chief Product Officer and Vice Chair

William L. Jordan

   President of the Company and President, Camuto LLC

Jared A. Poff

   Executive Vice President, Chief Financial Officer and Chief Administrative Officer

Mary Turner

   Executive Vice President and President of Designer Brands Canada, Inc.

James Weinberg

   Executive Vice President and Executive Vice President, Chief Merchandising Officer of DSW Shoe Warehouse, Inc.

Jay L. Schottenstein

   Executive Chairman

Peter S. Cobb

   Director

Elaine J. Eisenman

   Director

Tami J. Fersko

   Director

Joanna T. Lau

   Director

Richard A. Paul

   Director

Joseph A. Schottenstein

   Director

Harvey L. Sonnenberg

   Director

Allan J. Tanenbaum

   Director

Joanne Zaiac

   Director

The Letter of Transmittal and certificates for Shares, and any other required documents should be sent or delivered by each shareholder or the shareholder’s broker, dealer, commercial bank, trust company or nominee to the Depositary at one of its addresses set forth below. To confirm delivery of Shares, shareholders are directed to contact the Depositary. Shareholders submitting certificates representing Shares to be tendered must deliver such certificates together with the Letter of Transmittal and any other required documents by mail or overnight courier. Facsimile copies of Share certificates will not be accepted.

 

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The Depositary for the Offer is:

Computershare Trust Company, N.A.

 

First Class, Registered or
Certified Mail:

 

For Delivery of Notice of
Guaranteed Delivery via Email
for Eligible Institutions ONLY:

 

By Express or Overnight Delivery:

Computershare Trust Company, N.A.

c/o Voluntary Corporate Actions

PO Box 43011

Providence, RI 02940-3011

 

CANOTICEOFGUARANTEE

@computershare.com

 

Computershare Trust Company, N.A.

c/o Voluntary Corporate Actions

150 Royall Street, Suite V

Canton, MA 02021

DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.

Any questions or requests for assistance may be directed to the Information Agent or the Dealer Managers at their respective telephone numbers and addresses set forth below. Requests for additional copies of this Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery or related documents may be directed to the Information Agent at its telephone number or address set forth below. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer.

The Information Agent for the Offer is:

Georgeson LLC

1290 Avenue of the Americas, 9th Floor

New York, NY 10104

Call Toll-Free: (888) 206-5896

The Dealer Managers for the Offer are:

BofA Securities, Inc.

One Bryant Park, 8th Floor

New York, New York 10036

Call Toll-Free: (888) 803-9655

BMO Capital Markets Corp.

151 W 42nd Street, 32nd Floor

New York, New York 10036

Call: (212) 702-1101

 

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Exhibit (a)(1)(B)

LETTER OF TRANSMITTAL

To Tender

Class A Common Shares (CUSIP Number 250565108)

of

DESIGNER BRANDS INC.

Pursuant to the Offer to Purchase

Dated June 8, 2023

of up to $100 million of its Class A Common Shares

at a Cash Purchase Price not more than $8.00

nor less than $7.00 per Share.

 

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, AT THE END OF THE DAY, NEW YORK CITY TIME, ON July 7, 2023, UNLESS THE OFFER IS EXTENDED OR TERMINATED (SUCH DATE AND TIME, AS THEY MAY BE EXTENDED, THE “EXPIRATION DATE”).

The Depositary for the Offer is:

Computershare Trust Company, N.A.

 

By First Class, Registered or Certified Mail:
Computershare Trust Company, N.A.

c/o Voluntary Corporate Actions

PO Box 43011

Providence, RI 02940-3011

  

By Express or Overnight Delivery:
Computershare Trust Company, N.A.

c/o Voluntary Corporate Actions

150 Royall Street, Suite V

Canton, MA 02021

YOU SHOULD READ CAREFULLY THIS LETTER OF TRANSMITTAL, INCLUDING THE ACCOMPANYING INSTRUCTIONS, BEFORE YOU COMPLETE IT. FOR THIS LETTER OF TRANSMITTAL TO BE VALIDLY DELIVERED, IT MUST BE RECEIVED BY THE DEPOSITARY AT ONE OF THE ABOVE ADDRESSES BEFORE OUR OFFER EXPIRES (IN ADDITION TO THE OTHER REQUIREMENTS DETAILED IN THIS LETTER OF TRANSMITTAL AND ITS INSTRUCTIONS). DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN THOSE SHOWN ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. DELIVERIES TO THE COMPANY, THE INFORMATION AGENT, THE DEALER MANAGERS OR THE DEPOSITORY TRUST COMPANY (“DTC”) WILL NOT BE FORWARDED TO THE DEPOSITARY AND WILL NOT CONSTITUTE A VALID DELIVERY.


DESCRIPTION OF SHARES TENDERED (See Instructions 3 and 4)

Name(s) and Address(es)

of Registered Holder(s)

(If blank, please fill in

exactly as name(s)

appear(s) on share

certificate(s)

  Shares Tendered
     (Please fill in. Attach separate schedule if needed—See Instruction 3)
     Certificated Shares**  

Book-Entry Shares

and DRS Shares

    Certificate No(s)*   Total number of

Shares Represented

by Certificate(s)*

  Number of Shares

Tendered**

  Number of Shares

Tendered***

                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
       TOTAL SHARES            
*

Need not be completed if Shares are delivered by book-entry transfer by your broker to DTC.

**

Unless otherwise indicated, it will be assumed that all Shares represented by any certificates delivered to the Depositary are being tendered. See Instruction 4.

***

If your Shares are held in Direct Registration (“DRS”) at Computershare indicate the amount of Shares you are tendering in the column Number of Shares Tendered.


READ THE INSTRUCTIONS CAREFULLY BEFORE

COMPLETING THIS LETTER OF TRANSMITTAL.

 

 

Indicate below the order (by certificate number) in which Shares are to be purchased in the event of proration (attach additional signed list if necessary). If you do not designate an order and if less than all Shares tendered are purchased due to proration, Shares will be selected for purchase by the Depositary. See Instruction 15.

1st:                    2nd:                    3rd:                
4th:                   

5th:                

      

This Letter of Transmittal (together with any amendments and supplements thereto, this “Letter of Transmittal”) is to be used either if certificates for Class A Common Shares, without par value (each, a “Share,” and collectively, the “Shares”), of Designer Brands Inc. (the “Company,” “we,” “us” or “our”) being tendered are to be forwarded with this Letter of Transmittal or, unless an Agent’s Message (defined below) is utilized, if delivery of Shares is to be made by book-entry transfer to an account maintained by Computershare Trust Company, N.A., the depositary for the Offer (the “Depositary”), at The Depository Trust Company (“DTC,” which is referred to as the “Book-Entry Transfer Facility,” pursuant to the procedures set forth in Section 3 of the Offer to Purchase dated June 8, 2023 (together with any amendments or supplements thereto, the “Offer to Purchase,” and together with this Letter of Transmittal and other related materials, as each may be amended or supplemented from time to time, the “Offer”).

Tendering shareholders must deliver either the certificates for, or timely confirmation of book-entry transfer in accordance with the procedures described in Section 3 of the Offer to Purchase with respect to, their Shares and all other documents required by this Letter of Transmittal to the Depositary by 12:00 Midnight, at the end of the day, New York City time, on July 7, 2023 unless we extend or terminate the Offer (such date and time, as they may be extended, the “Expiration Date”). The term Expiration Date refers to the specific time and date on which the Offer expires.

Tendering shareholders whose certificates for Shares are not immediately available or who cannot deliver either the certificates for, or timely confirmation of book-entry in accordance with the procedures described in Section 3 of the Offer to Purchase with respect to, their Shares and all other documents required by this Letter of Transmittal to the Depositary by the Expiration Date must tender their Shares in accordance with the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. All capitalized terms not otherwise defined herein have the meaning ascribed to them in the Offer to Purchase.

A shareholder owning beneficially or of record an aggregate of fewer than 100 Shares and who tenders all such Shares and satisfies the other requirements set forth in Instruction 8, may have all such Shares purchased before proration, if any, of the purchase of other Shares pursuant to the Offer.

Your attention is directed to the following:

 

  1.

If you want to retain all your Shares, do not take any action.

 

  2.

If you wish to maximize the chance that your Shares will be purchased by us, you should check the box in the section of this Letter of Transmittal captioned “Shares Tendered at a Price Determined Pursuant to the Offer”. If you agree to accept the purchase price determined pursuant to the Offer, your Shares will be deemed to be tendered at the minimum price of $7.00 per share. You should understand that this election will indicate that you will accept the Purchase Price as determined by us in accordance with the terms and subject to the conditions of the Offer, and this election may have the effect of lowering the Purchase Price and could result in your tendered Shares being purchased at $7.00 per Share, which is the low end of the price range in the Offer, less any applicable withholding taxes and without interest, a price that is below the last reported sale price of the Shares on the NYSE on June 7, 2023, the last full trading day prior to the commencement of the Offer, which was $7.21 per Share, and could be below the last reported sale price of the Shares on the NYSE on the Expiration Date.


  3.

If you wish to select a specific price at which you will be tendering your Shares, you should select one of the boxes in the section captioned “Shares Tendered at a Price Determined by Shareholder” below and complete the other portions of this Letter of Transmittal as appropriate.

We urge shareholders who hold Shares through a broker, dealer, commercial bank, trust company or other nominee to consult their nominee to determine whether transaction costs are applicable if they tender Shares through their nominee and not directly to the Depositary.

QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE OFFER TO PURCHASE OR THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE INFORMATION AGENT OR THE DEALER MANAGERS AT THEIR RESPECTIVE ADDRESSES OR TELEPHONE NUMBERS SET FORTH AT THE END OF THIS LETTER OF TRANSMITTAL.

PLEASE READ CAREFULLY THE INSTRUCTIONS SET FORTH BELOW BEFORE COMPLETING THIS LETTER OF TRANSMITTAL.

 

   CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH DTC AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN DTC MAY DELIVER ORDINARY SHARES BY BOOK-ENTRY TRANSFER):
    

 

Name of Tendering Institution:

 

DTC Participant Number:

 

Account Number:

 

Transaction Code Number:

 

Delivered by book-entry transfer:

 


PRICE PER SHARE AT WHICH SHARES ARE BEING TENDERED

(See Instruction 7)

CHECK ONLY THE BOX UNDER 1 OR 2 BELOW.

IF BOTH BOXES UNDER 1 OR 2 ARE CHECKED OR IF NEITHER OF THE BOXES UNDER 1 OR 2 ARE CHECKED, THERE IS NO VALID TENDER OF SHARES.

 

1.

SHARES TENDERED AT A PRICE DETERMINED PURSUANT TO THE OFFER

 

 

By checking this box INSTEAD OF ONE OF THE BOXES UNDER 2 BELOW, the undersigned hereby tenders Shares and is willing to accept the purchase price determined pursuant to the Offer. This action will maximize the chance of having the Company purchase all of the Shares tendered by the undersigned (subject to the possibility of proration). The undersigned understands that this election could result in the tendered shares being purchased at the minimum price of $7.00 per Share.

- OR -

 

2.

SHARES TENDERED AT A PRICE DETERMINED BY SHAREHOLDER

By checking ONE of the boxes below INSTEAD OF THE BOX UNDER 1 ABOVE, the undersigned hereby tenders Shares at the price checked in the corresponding box in the section below captioned “Price per Share at which Shares are Being Tendered.” This action could result in none of the Shares being purchased if the purchase price for the Shares is less than the price checked. If the purchase price for the Shares is equal to or greater than the price checked, then the Shares purchased by the Company will be purchased at the purchase price. All Shares so purchased by the Company will be purchased at the same price regardless of whether the shareholder tendered at a lower price. A shareholder who wishes to tender Shares at more than one price must complete a separate Letter of Transmittal for each price at which Shares are being tendered. The same Shares cannot be tendered (unless such Shares were previously withdrawn in accordance with the terms of the Offer) at more than one price.

PRICE PER SHARE AT WHICH SHARES ARE BEING TENDERED.

CHECK ONLY ONE BOX BELOW: IF MORE THAN ONE BOX BELOW IS CHECKED OR IF NO BOX BELOW IS CHECKED, THERE IS NO VALID TENDER OF SHARES.

 

☐ $7.00    ☐ $7.05    ☐ $7.10    ☐ $7.15    ☐ $7.20
☐ $7.25    ☐ $7.30    ☐ $7.35    ☐ $7.40    ☐ $7.45
☐ $7.50    ☐ $7.55    ☐ $7.60    ☐ $7.65    ☐ $7.70
☐ $7.75    ☐ $7.80    ☐ $7.85    ☐ $7.90    ☐ $7.95
☐ $8.00            


ODD LOTS

(See Instruction 8)

As described in “The Offer” of the Offer to Purchase, under certain conditions, a shareholder owning beneficially or of record an aggregate of fewer than 100 Shares, and who tenders all such Shares and satisfies the other requirements set forth in the Offer to Purchase, may have his or her Shares accepted for payment before any proration of other tendered Shares. This preference is not available to partial tenders, or to beneficial or record holders of an aggregate of 100 or more Shares, even if these holders have separate accounts representing fewer than 100 Shares. Accordingly, this section is to be completed only if Shares are being tendered by or on behalf of a person owning, beneficially or of record, an aggregate of fewer than 100 Shares. The undersigned either (check one box):

 

 

owns, whether beneficially or of record, an aggregate of fewer than 100 Shares and is tendering all such Shares; or

 

 

is a broker, dealer, commercial bank, trust company, or other nominee that (a) is tendering for the beneficial owner(s), Shares with respect to which it is the record holder, and (b) believes, based upon representations made to it by the beneficial owner(s), that each such person is the beneficial owner of an aggregate of fewer than 100 Shares and is tendering all such Shares.

In addition, the undersigned is tendering all such Shares either (check one box):

 

 

at the purchase price, as the same will be determined by the Company in accordance with the terms of the Offer (persons checking this box should not check any box in the section captioned “Price per Share at which Shares are Being Tendered”); or

 

 

at the price per Share indicated above in the section captioned “Price per Share at which Shares are Being Tendered.”


CONDITIONAL TENDER

(See Instruction 12)

As described in Section 6 of the Offer to Purchase, a tendering shareholder may condition his or her tender of Shares upon the Company purchasing all or a specified minimum number of the Shares tendered. Unless at least the minimum number of Shares you indicate below is purchased by the Company pursuant to the terms of the Offer, none of the Shares tendered by you will be purchased. IT IS THE TENDERING SHAREHOLDER’S RESPONSIBILITY TO CALCULATE THE MINIMUM NUMBER OF SHARES THAT MUST BE PURCHASED FROM THE SHAREHOLDER IN ORDER FOR THE SHAREHOLDER TO QUALIFY FOR SALE OR EXCHANGE (RATHER THAN DISTRIBUTION) TREATMENT FOR U.S. FEDERAL INCOME TAX PURPOSES. SHAREHOLDERS ARE URGED TO CONSULT WITH THEIR TAX ADVISORS BEFORE COMPLETING THIS SECTION. NO ASSURANCES CAN BE PROVIDED THAT A CONDITIONAL TENDER WILL ACHIEVE THE INTENDED U.S. FEDERAL INCOME TAX RESULT FOR ANY SHAREHOLDER TENDERING SHARES. Unless this box has been checked and a minimum specified, your tender will be deemed unconditional.

 

 

The minimum number of Shares that must be purchased from me, if any are purchased from me, is: _____ Shares.

If, because of proration, the minimum number of Shares designated will not be purchased, the Company may accept conditional tenders by random lot, if necessary. However, to be eligible for purchase by random lot, the tendering shareholder must have tendered all of his or her Shares and checked this box:

 

 

The tendered Shares represent all Shares held by the undersigned.


NOTE: SIGNATURES MUST BE PROVIDED BELOW

PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

Ladies and Gentlemen:

The undersigned hereby tenders to Designer Brands Inc., an Ohio corporation (the “Company”), the above-described Shares, without par value, of the Company (the “Shares”), at the price indicated in this Letter of Transmittal, in cash, less any applicable withholding taxes and without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase dated June 8, 2023 (the “Offer to Purchase”), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which together, as they may be amended or supplemented from time to time, constitute the “Offer”).

Subject to, and effective upon, acceptance for payment for the Shares tendered herewith in accordance with the terms of the Offer (including, if the Offer is extended or amended, the terms or conditions of any such extension or amendment), the undersigned hereby sells, assigns and transfers to or upon the order of the Company all right, title and interest in and to all the Shares tendered hereby, or orders the registration of such Shares delivered by book-entry transfer, that are purchased pursuant to the Offer and hereby irrevocably constitutes and appoints the Company, the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to:

 

  (a)

deliver certificates for such tendered Shares or transfer ownership of such Shares on the account books maintained by The Depository Trust Company (“DTC”), together, in any such case, with all accompanying evidence of transfer and authenticity, to or upon the order of the Company, upon receipt by Computershare Trust Company, N.A. (the “Depositary”) of the Purchase Price (as defined below) with respect to such Shares;

 

  (b)

present instructions for cancellation and transfer of such Shares on the Company’s books; and

 

  (c)

receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares, all in accordance with the terms of the Offer.

The undersigned hereby represents and warrants that:

 

  (a)

the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered and that, when the same are accepted for payment by the Company, the Company will acquire good, marketable and unencumbered title thereto, free and clear of all security interests, liens, restrictions, claims, charges, encumbrances and other obligations relating to the sale or transfer of the Shares;

 

  (b)

the undersigned will, on request by the Depositary or the Company, execute and deliver any additional documents deemed by the Depositary or the Company to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered, all in accordance with the terms of the Offer; and

 

  (c)

the undersigned understands that tendering Shares pursuant to any one of the procedures described in “Procedures for Tendering and Withdrawing Shares” in the Offer to Purchase and in the instructions hereto will constitute the undersigned’s acceptance of the terms and conditions of the Offer, including the undersigned’s representation and warranty that: (i) the undersigned has a “net long position” in Shares at least equal to the Shares tendered within the meaning of Rule 14e- 4 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and (ii) such tender of Shares complies with Rule 14e-4 under the Exchange Act.

The undersigned understands that the purchase price will be the lowest price per Share (in increments of $0.05) not more than $8.00 per Share nor less than $7.00 per Share (such price per Share or such other price that may be set forth in an amendment to the Offer referred to as the “Purchase Price”) selected by the Company that will allow the Company to purchase the value of Shares sought in the Offer or, if a lesser value is properly tendered, all Shares that are properly tendered and not properly withdrawn (subject to the Company’s right to purchase additional Shares as described in the Offer to Purchase), in cash, less any applicable withholding taxes


and without interest, upon the terms and subject to the conditions of the Offer, including the proration provisions thereof, and that the Company will promptly return all other Shares, including Shares not purchased because of proration.

The undersigned understands that tenders of Shares pursuant to any one of the procedures described in “Procedures for Tendering Shares” of the Offer to Purchase and in the instructions hereto will constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Offer.

The undersigned recognizes that, under certain circumstances set forth in the Offer to Purchase, the Company may terminate or amend the Offer or may not be required to accept for payment any of the Shares tendered herewith or may accept for payment fewer than all the Shares tendered herewith in accordance with the priority and proration provisions described in “Number of Shares; Price; Proration” of the Offer to Purchase.

All authority conferred or agreed to be conferred in this Letter of Transmittal shall survive the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Except as stated in the Offer, this tender is irrevocable.

Unless otherwise indicated under “Special Payment Instructions”, please issue the check for the aggregate Purchase Price in the name(s) of the registered holder(s) appearing under “Description of Shares Tendered.” Similarly, unless otherwise indicated under “Special Delivery Instructions,” please mail the check for the aggregate Purchase Price to the address(es) of the registered holder(s) appearing under “Description of Shares Tendered.” In the event that both the “Special Delivery Instructions” and the “Special Payment Instructions” are completed, please issue the check for the aggregate Purchase Price in the name(s) of, and deliver said check to, the person or persons so indicated. In the case of book-entry delivery of Shares, please credit the account maintained at DTC with any Shares not accepted for payment. The undersigned recognizes that the Company has no obligation pursuant to the “Special Payment Instructions” to transfer any Shares from the name(s) of the registered holder(s) thereof if the Company does not accept for payment any of the Shares so tendered.


PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

 

 

SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 4 and 9)

             

 

SPECIAL PAYMENT INSTRUCTIONS

(See Instructions 1, 4, 5, 6, 8 and 9)

    

 

To be completed ONLY if the check for the aggregate Purchase Price of Shares purchased is to be mailed to someone other than the undersigned or to the undersigned at an address other than that shown below the undersigned’s signature.

 

Mail check to:

       

 

To be completed ONLY if the check for the aggregate Purchase Price of Shares purchased is to be issued in the name of someone other than the undersigned.

 

Issue any check to:

   

Name

 

 

       

Name

 

 

   
    (Please Print)           (Please Print)    

Address

 

     

       

Address

 

     

   

    

 

       

    

 

   

    

 

       

    

 

   
(Please Include Zip Code)         (Please Include Zip Code)    
            

    

 

   
                   

(Taxpayer Identification or Social Security Number)

 

   


 

SIGN HERE

(See Instructions 1 and 5)

(Please complete Form W-9 below or appropriate Form W-8, as applicable)
By signing below, the undersigned expressly agrees to the terms and
conditions set forth above.

 

Signature(s) of Owner(s)

 

Signature(s) of Owner(s)

 

Name(s)

 

(Please Print)

 

Capacity (full title)

 

Address

 

(Include Zip Code)

 

Area Code and Telephone Number

 

Taxpayer Identification or Social Security Number

 
(See Instruction 11)
 

Dated

 

(Must be signed by registered holder(s) exactly as name(s) appear(s) on share certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, agent, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title. See Instruction 5.)


 

GUARANTEE OF SIGNATURE(S)

(See Instructions 1 and 5)

 

Authorized Signature

 

Name(s)

 

(Please Print)

 

Title

 

Name of Firm

 

Address

 

(Include Zip Code)

 

Area Code and Telephone Number

 

Dated


IMPORTANT TAX INFORMATION

THE U.S. FEDERAL INCOME TAX DISCUSSION SET FORTH BELOW IS INCLUDED FOR GENERAL INFORMATION ONLY. PARTICIPATION IN THE OFFER IS GENERALLY A TAXABLE TRANSACTION. ALL SHAREHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE OFFER AND ARE ALSO URGED TO REVIEW SECTION 14 OF THE OFFER TO PURCHASE.

Under U.S. federal income tax law, a shareholder whose tendered Shares are accepted for payment is required to provide the Depositary or other applicable withholding agent with such shareholder’s correct taxpayer identification number (“TIN”) on a properly completed Internal Revenue Service (“IRS”) Form W-9 (“Form W-9”), which accompanies this Letter of Transmittal. In addition, payments that are made to such shareholder or other payee with respect to Shares purchased pursuant to the Offer may be subject to 24% backup withholding.

Certain shareholders (including, among others, most corporations and certain foreign persons) are not subject to these backup withholding and reporting requirements. In order for a foreign person to qualify as an exempt recipient, the shareholder must submit an IRS Form W-8BEN or IRS Form W-8BEN-E or any other applicable IRS Form W-8 (or applicable successor form), signed under penalties of perjury, attesting to that person’s exempt status. An IRS Form W-8BEN or IRS Form W-8BEN-E (or any other IRS Form W-8) can be obtained from the Depositary or from the IRS website (www.irs.gov). See the instructions to the enclosed Form W-9 for additional information.

A SHAREHOLDER SHOULD CONSULT HIS, HER OR ITS TAX ADVISOR AS TO HIS, HER OR ITS QUALIFICATION FOR EXEMPTION FROM THE BACKUP WITHHOLDING REQUIREMENTS AND THE PROCEDURE FOR OBTAINING AN EXEMPTION.

If backup withholding applies to any payments, the Depositary or other applicable withholding agent is required to withhold 24% of any such payments to be made to the shareholder or other payee. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If backup withholding results in an overpayment of taxes, a refund may be obtained from the IRS, provided that the required information is timely given to the IRS.

The shareholder is required to give the Depositary or other applicable withholding agent the TIN (e.g., social security number or employer identification number) of the record owner of the Shares. If the Shares are registered in more than one name or are not registered in the name of the actual owner, consult the instructions to the accompanying Form W-9 for additional guidance on which number to report.


INSTRUCTIONS

Forming Part of the Terms and Conditions of the Offer

 

1.

Guarantee of Signatures. Signatures on this Letter of Transmittal must be guaranteed by a firm which is a member of the Securities Transfer Agent Medallion Program, the New York Stock Exchange Medallion Signature Program or the Stock Exchange Medallion Program (each, an “Eligible Institution”), except in cases where Shares are tendered (i) by a registered holder (which term, for purposes of this Letter of Transmittal, will include any participant in DTC whose name appears on a security position listing as the owner of the Shares) of Shares who has not completed either the box entitled “Special Payment Instructions” or the box entitled “Special Delivery Instructions” on this Letter of Transmittal or (ii) for the account of an Eligible Institution. Shareholders may also need to have any certificates they deliver endorsed or accompanied by a stock power, and the signatures on these documents also may need to be guaranteed. See Instruction 5.

 

2.

Requirements of Tender. This Letter of Transmittal is to be completed by shareholder either if certificates are to be forwarded herewith or, unless an Agent’s Message (as defined below) is utilized, if delivery of Shares is to be made pursuant to the procedures for book-entry transfer set forth in “Procedures for Tendering Shares” of the Offer to Purchase. For a shareholder to validly tender Shares pursuant to the Offer, (i) this Letter of Transmittal, properly completed and duly executed, and the certificate(s) representing the tendered Shares, together with any required signature guarantees, and any other required documents, must be received by the Depositary at its address set forth on the back of this Letter of Transmittal prior to the Expiration Date, (ii) this Letter of Transmittal, properly completed and duly executed, together with any required Agent’s Message and any other required documents, must be received by the Depositary at its address set forth on the back of this Letter of Transmittal prior to the Expiration Date and Shares must be delivered pursuant to the procedures for book-entry transfer set forth in this Letter of Transmittal (and a book-entry confirmation must be received by the Depositary) prior to the Expiration Date or (iii) the shareholder must comply with the guaranteed delivery procedures set forth below and in “Procedures for Tendering Shares” of the Offer to Purchase.

Tenders of Shares made pursuant to the Offer may be withdrawn at any time prior to the Expiration Date. If the Company extends the Offer beyond that time, tendered Shares may be withdrawn at any time until the extended Expiration Date. If, following the Expiration Date, the Company has not accepted for payment Shares that a shareholder has properly tendered to the Company by 12:00 Midnight, at the end of the day, New York City time, on August 4, 2023, such shareholder may also withdraw its Shares at any time thereafter. To withdraw tendered Shares, shareholders must deliver a written notice of withdrawal to the Depositary within the prescribed time period at the address set forth in this Letter of Transmittal.

Any notice of withdrawal must specify the name of the tendering shareholder, the number of Shares to be withdrawn, and the name of the registered holder of such Shares. In addition, if the certificates for Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, before the release of the certificates, the tendering shareholder must also submit the serial numbers shown on the particular certificates for Shares to be withdrawn and the signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution (except in the case of Shares tendered by an Eligible Institution). If Shares have been tendered pursuant to the procedures for book-entry transfer, the notice of withdrawal also must specify the name and the number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares and otherwise comply with the procedures of that facility. Withdrawals may not be rescinded and any Shares withdrawn will not be properly tendered for purposes of the Offer unless the withdrawn Shares are properly re-tendered prior to the Expiration Date by following the procedures described above.

The method of delivery of all documents, including this Letter of Transmittal and any other required documents, is at the option and risk of the tendering shareholder and delivery will be deemed made only when actually received by the Depositary (including, in the case of a book-entry transfer, by book-entry confirmation). If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery to the Depositary prior to the Expiration Date.


Except as specifically provided by the Offer to Purchase, no alternative, conditional or contingent tenders will be accepted, and no fractional Shares will be purchased. By executing this Letter of Transmittal, each tendering shareholder waives any right to receive any notice of the acceptance of such shareholder’s tender.

 

3.

Inadequate Space. If the space provided in the box entitled “Description of Shares Tendered” is inadequate, the number of Shares should be listed on a separate signed schedule and attached to this Letter of Transmittal.

 

4.

Partial Tenders (Not Applicable to Shareholders Who Tender by Book-Entry Transfer). If fewer than all of the Shares represented by any certificate submitted to the Depositary are to be tendered, fill in the number of Shares that are to be tendered in the box entitled “Description of Shares Tendered.” In any such case, new certificate(s) for the remainder of the Shares that were evidenced by the old certificate(s) will be sent to the registered holder(s), unless otherwise provided in the appropriate box on this Letter of Transmittal, as soon as practicable after the acceptance for payment of, and payment for, Shares tendered herewith. All Shares represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated.

 

5.

Signatures on Letter of Transmittal, Share Powers and Endorsements.

 

  1.

If this Letter of Transmittal is signed by the registered holder(s) of Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the certificate(s) or security position without any change or alteration whatsoever.

 

  2.

If any of the Shares tendered hereby are owned of record by two or more joint owners, all such persons must sign this Letter of Transmittal.

 

  3.

If any Shares tendered hereby are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of certificates.

 

  4.

If this Letter of Transmittal or any certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, he or she should so indicate when signing and submit proper evidence satisfactory to the Company of his or her authority to so act.

 

  5.

If this Letter of Transmittal is signed by the registered owner(s) of Shares tendered hereby, no endorsements of certificates or separate stock powers are required unless payment of the purchase price is to be made, or certificates for Shares not tendered or accepted for payment are to be issued, to a person other than the registered owner(s). Signatures on any such certificates or stock powers must be guaranteed by an Eligible Institution.

 

  6.

If this Letter of Transmittal is signed by a person other than the registered owner(s) of Shares tendered hereby, the certificate(s) representing such Shares must be properly endorsed for transfer or accompanied by appropriate stock powers, in either case, signed exactly as the name(s) of the registered owner(s) appear(s) on the certificates(s). The signature(s) on any such certificate(s) or stock power(s) must be guaranteed by an Eligible Institution.

 

6.

Share Transfer Taxes. The Company will pay any share transfer taxes with respect to the transfer and sale of Shares to it or its order pursuant to the Offer. If, however, payment of the aggregate Purchase Price is to be made to, or Shares not tendered or accepted for purchase are to be registered in the name of, any person other than the registered holder, or if tendered certificates are registered in the name of any person other than the person signing this Letter of Transmittal, the amount of any share transfer taxes (whether imposed on the registered holder or such other person) payable on account of the transfer to such person will be the responsibility of the holder and satisfactory evidence of payment of such taxes or exemption therefrom may be required.

 

7.

Indication of Price at which Shares are Being Tendered. If you want to tender your Shares you must properly complete the pricing section of this Letter of Transmittal, which is called “Price per Share at which Shares are Being Tendered.” You must check either the box under “1. Shares Tendered at a Price Determined Pursuant to the Offer” or the box under “2. Shares Tendered at a Price Determined by the


  Shareholder.” If both of such boxes are checked, or if neither of such boxes is checked, there is no valid tender of Shares. If you check the box under “2. Shares Tendered at a Price Determined by the Shareholder,” you must additionally check one box in the section captioned “Price per Share at which Shares are Being Tendered” corresponding to the price at which you want to tender your Shares; if more than one of such boxes is checked or if none of such boxes is checked, there is no valid tender of Shares. If you want to tender portions of your Shares at more than one price, you must complete a separate Letter of Transmittal for each price at which you tender Shares. However, the same Shares cannot be tendered at more than one price, unless such Shares were previously withdrawn as provided in “Procedures for Tendering and Withdrawing Shares” of the Offer to Purchase. By checking the box under “1. Shares Tendered at a Price Determined Pursuant to the Offer” instead of the box under “2. Shares Tendered at a Price Determined by the Shareholder,” you are tendering Shares and are willing to accept the Purchase Price selected by the Company in accordance with the terms of the Offer. You should understand that checking the box under “1. Shares Tendered at a Price Determined Pursuant to the Offer” may lower the Purchase Price paid for all purchased Shares in the Offer and could result in the tendered Shares being purchased at the minimum price of $7.00.

 

8.

Odd Lots. As described in “Summary Term Sheet” and “The Offer” of the Offer to Purchase, in the event that Shares representing more than $100 million in aggregate purchase price are properly tendered at or below the Purchase Price and not properly withdrawn before the Expiration Date (or such greater value as the Company may elect to purchase pursuant to the Offer, subject to applicable law), the Company, upon the terms and subject to the conditions of the Offer, will accept Shares for purchase first from all Shares properly tendered at or below the Purchase Price and not properly withdrawn before the Expiration Date by any shareholder who owns beneficially or of record an aggregate of fewer than 100 Shares and who tendered all Shares beneficially owned by such person (partial tenders of Shares will not qualify for this preference) and completed the box captioned “Odd Lots” in this Letter of Transmittal and, if applicable, on the Notice of Guaranteed Delivery. This preference will not be available unless the box above entitled “Odd Lots” is completed.

 

9.

Irregularities. All questions as to the price to be paid for the Shares to be accepted and the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by the Company in its reasonable discretion, which determination shall be final and binding on all parties. The Company reserves the absolute right to reject any and all tenders reasonably determined by it not to be in proper form or the acceptance for payment of which may, in the opinion of its counsel, be unlawful. The Company also reserves the absolute right to waive any condition of the Offer (except as provided in “Conditions to the Offer” of the Offer to Purchase) or any defect or irregularity in the tender of any particular Shares or any particular shareholder, whether or not similar defects or irregularities are waived in the case of other shareholders, and the Company’s reasonable interpretation of the terms and conditions of the Offer (including these instructions) will be final and binding on all persons. No tender of Shares will be deemed to have been properly made until all defects and irregularities have been cured or waived to the satisfaction of the Company. The Company will not be liable for failure to waive any condition of the Offer, or any defect or irregularity in any tender of Shares. Neither the Company, nor any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. The Company’s reasonable interpretation of the terms of and conditions to the Offer, including this Letter of Transmittal and the instructions hereto, will be final and binding on all persons participating in the Offer. Any determination by the Company as to the validity, form, eligibility and acceptance of Shares for payment, or any interpretation by the Company as to the terms and conditions of the Offer, is subject to applicable law and, if challenged by shareholders in a lawsuit, to the judgment of a court of competent jurisdiction.

 

10.

Special Payment and Delivery Instructions. If the check for the aggregate Purchase Price of any Shares purchased is to be issued to, or any Shares not tendered or not purchased are to be returned in the name of, a person other than the person(s) signing this Letter of Transmittal or if the check is to be mailed to someone other than the person(s) signing this Letter of Transmittal or to the person(s) signing this Letter of Transmittal at an address other than that shown in the box entitled “Descriptions of Shares Tendered,” the boxes entitled “Special Payment Instructions” and/or “Special Delivery Instructions” on this Letter of Transmittal should be completed.


11.

Request for Assistance or Additional Copies. Requests for assistance or additional copies of the Offer to Purchase, this Letter of Transmittal or the Notice of Guaranteed Delivery may be directed to the Information Agent at its address, telephone numbers or email address set forth below.

 

12.

Conditional Tenders. As described in Sections 1 and 6 of the Offer to Purchase, shareholders may condition their tenders on all or a minimum number of their tendered Shares being purchased. If you wish to make a conditional tender, you must indicate this in the box captioned “Conditional Tender” in this Letter of Transmittal and, if applicable, in the Notice of Guaranteed Delivery. In the box in this Letter of Transmittal and, if applicable, in the Notice of Guaranteed Delivery, you must calculate and appropriately indicate the minimum number of Shares that must be purchased from you if any are to be purchased from you.

As discussed in Sections 1 and 6 of the Offer to Purchase, proration may affect whether the Company accepts conditional tenders and may result in Shares tendered pursuant to a conditional tender being deemed withdrawn if the required minimum number of Shares would not be purchased. If, because of proration, the minimum number of Shares that you designate will not be purchased, the Company may accept conditional tenders by random lot, if necessary. However, to be eligible for purchase by random lot, you must have tendered all your Shares and checked the box so indicating. Upon selection by lot, if any, the Company will limit its purchase in each case to the designated minimum number of Shares.

All tendered Shares will be deemed unconditionally tendered unless the “Conditional Tender” box is completed.

The conditional tender alternative is made available so that a shareholder may seek to structure the purchase of Shares pursuant to the Offer in such a manner that the purchase will be treated as a sale of such Shares by the shareholder, rather than a distribution to the shareholder, for U.S. federal income tax purposes. It is the tendering shareholder’s responsibility to calculate the minimum number of Shares that must be purchased from the shareholder in order for the shareholder to qualify for sale rather than distribution treatment. Each shareholder is urged to consult his or her tax advisor. See Section 14 of the Offer to Purchase.

 

13.

Lost, Destroyed or Stolen Certificates. If any certificate representing Shares has been lost, destroyed or stolen, the shareholder should promptly notify Computershare, as the transfer agent, at the toll-free number 1-877-581-5548. The shareholder will then be instructed by Computershare as to the steps that must be taken in order to replace the certificate. This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, destroyed or stolen certificates have been followed.

 

14.

Form W-9. Except as provided above under “Important Tax Information”, each tendering shareholder is required to provide the Depositary or other applicable withholding agent with a correct TIN on Form W-9, which accompanies this Letter of Transmittal. Failure to provide the information on the Form W-9 may subject the tendering shareholder to a 24% federal backup withholding tax imposed on the payments made to the shareholder or other payee with respect to Shares purchased pursuant to the Offer.

 

15.

Non-U.S. Holder Withholding. Even if a Non-U.S. Holder (as defined in Section 14 of the Offer to Purchase) has provided the required certification to avoid backup withholding, the Depositary or other applicable withholding agent may withhold U.S. federal income taxes equal to 30% of the gross payments payable to a Non-U.S. Holder or his or her agent unless the Depositary or other applicable withholding agent determines that a reduced rate of withholding is available pursuant to a tax treaty or that an exemption from withholding is applicable because such gross proceeds are effectively connected with the conduct of a trade or business within the United States. In order to obtain a reduced rate of withholding pursuant to a tax treaty, a Non-U.S. Holder must deliver to the Depositary or other applicable withholding agent, before the payment is made, a properly completed and executed IRS Form W-8BEN (for individuals) or IRS Form W-8BEN-E (for entities) (or, in each case, an applicable successor form). In order to obtain an exemption from withholding on the grounds that the gross proceeds paid pursuant to the Offer are effectively connected with the conduct of a trade or business within the United States, a Non-U.S. Holder must deliver to the Depositary or other applicable withholding agent, before the payment is made, a properly completed and executed IRS Form W-8ECI (or applicable successor form). A Non-U.S. Holder may be eligible to obtain a refund of all or a portion of any tax withheld if such holder satisfies certain requirements (see Section 14 of the Offer to Purchase) or is otherwise able to establish that no tax or a reduced amount of tax is due. Backup withholding generally will not apply to amounts subject to the 30% or a treaty-reduced rate of withholding.


  Non-U.S. Holders are urged to consult their tax advisors regarding the application of federal income tax withholding, including eligibility for a withholding tax reduction or exemption, and the refund procedure.

In addition, a Non-U.S. Holder (other than an individual) may be subject to a 30% withholding tax under Chapter 4 of the Internal Revenue Code of 1986, as amended, commonly referred to as “FATCA,” unless such Non-U.S. Holder establishes an exemption from such withholding tax under FATCA, typically on IRS Form W-8BEN-E. If the Depositary withholds any amounts under FATCA, such amounts will be credited against any withholding due for U.S. federal income tax.

The Letter of Transmittal, certificates for Shares and any other required documents should be sent or delivered by each shareholder of the Company or such shareholder’s broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of its addresses set forth below.


The Depositary for the Offer is:

Computershare Trust Company, N.A.

 

By First Class, Registered or Certified Mail:    By Express or Overnight Delivery:

Computershare Trust Company, N.A.

c/o Voluntary Corporate Actions

PO Box 43011

Providence, RI 02940-3011

  

Computershare Trust Company, N.A.

c/o Voluntary Corporate Actions

150 Royall Street, Suite V

Canton, MA 02021

DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID BINDING DELIVERY TO THE DEPOSITARY.

Any questions or requests for assistance or for additional copies of this Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed Delivery may be directed to the Information Agent. Shareholders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer.

The Dealer Managers for the Offer are:

BofA Securities, Inc.

One Bryant Park, 8th Floor

New York, New York 10036

Call Toll-Free: (888) 803-9655

BMO Capital Markets Corp.

151 W. 42nd Street, 32nd Floor

New York, New York 10036

Call: (212) 702-1101

The Information Agent for the Offer is:

Georgeson LLC

1290 Avenue of the Americas, 9th Floor

New York, NY 10104

Shareholders, Banks and Brokers

Call Toll-Free: (888) 206-5896

Exhibit (a)(1)(C)

NOTICE OF GUARANTEED DELIVERY

To Tender Shares of Class A Common Shares of

Designer Brands Inc.

Pursuant to its Offer to Purchase

Dated June 8, 2023

Up to $100 million of Class A Common Shares

at a cash Purchase Price not more than

$8.00 nor less than $7.00 per Share

 

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, AT THE END OF THE DAY, NEW YORK CITY TIME, ON JULY 7, 2023, UNLESS THE OFFER IS EXTENDED OR TERMINATED (SUCH DATE AND TIME, AS THEY MAY BE EXTENDED, THE “EXPIRATION DATE”).

This Notice of Guaranteed Delivery, or a form substantially equivalent hereto, must be used to accept the Offer (as defined below) if you want to tender your Shares but:

 

   

certificates for your Shares (as defined below) are not immediately available or cannot be delivered to the Depositary by the Expiration Date;

 

   

you cannot comply with the procedure for book-entry transfer by the Expiration Date (set forth in Section 3 of the Offer to Purchase); or

 

   

your other required documents cannot be delivered to the Depositary by the Expiration Date,

in which case, you can still tender your Shares if you comply with the guaranteed delivery procedure described in Section 3 of the Offer to Purchase, dated June 8, 2023 (together with any amendments or supplements thereto, the “Offer to Purchase”).

This Notice of Guaranteed Delivery, properly completed and duly executed, may be delivered to the Depositary by mail, overnight courier or email in accordance with the procedures set forth in the Offer to Purchase prior to the Expiration Date. See Section 3 of the Offer to Purchase.

The Depositary for the Offer is:

Computershare Trust Company, N.A.

 

By First Class, Registered or Certified Mail:
Computershare Trust Company, N.A.

c/o Voluntary Corporate Actions

PO Box 43011

Providence, RI 02940-3011

 

By E-mail Transmission:
For Eligible Institutions Only:
CANOTICEOFGUARANTEE

@computershare.com

 

By Express or Overnight Delivery:

Computershare Trust Company, N.A.

c/o Voluntary Corporate Actions

150 Royall Street, Suite V

Canton, MA 02021

For this Notice of Guaranteed Delivery to be validly delivered, it must be received by the Depositary at the above address, or by email, prior to the Expiration Date. Delivery of this instrument to an address other than as set forth above will not constitute a valid delivery. Deliveries to the Company, BofA Securities, Inc. and BMO Capital Markets Corp., the Dealer Managers for the Offer, or Georgeson LLC, the Information Agent, will not be forwarded to the Depositary and therefore will not constitute valid delivery. Deliveries to The Depository Trust Company will not constitute valid delivery to the Depositary.

This Notice of Guaranteed Delivery is not to be used to guarantee signatures. If a signature on the Letter of Transmittal is required to be guaranteed by an Eligible Institution under the instructions to the Letter of Transmittal, the signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal.


Ladies and Gentlemen:

The undersigned hereby tenders to Designer Brands Inc., an Ohio corporation (the “Company”), upon the terms and subject to the conditions set forth in its Offer to Purchase, dated June 8, 2023 (together with any amendments or supplements thereto, the “Offer to Purchase”), the related Letter of Transmittal (together with any amendments or supplements thereto, the “Letter of Transmittal”) and other related materials as may be amended or supplemented from time to time (collectively, with the Offer to Purchase and the Letter of Transmittal, the “Offer”), receipt of which is hereby acknowledged by the undersigned, the number of shares of Class A Common Shares of the Company, without par value (each, a “Share,” and collectively, the “Shares”), listed below pursuant to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. Capitalized terms used herein and not defined herein shall have the meanings given to them in the Offer to Purchase. Participants should notify the Depositary prior to covering through the submission of a physical security directly to the Depositary based on a guaranteed delivery that was submitted via The Depository Trust Company’s PTOP platform.

Number of Shares to be tendered:                 Shares.

NOTE: SIGNATURES MUST BE PROVIDED WHERE INDICATED BELOW

PRICE PER SHARE AT WHICH SHARES ARE BEING TENDERED

(See Instruction 7 to the Letter of Transmittal)

THE UNDERSIGNED IS TENDERING SHARES AS FOLLOWS (CHECK ONLY ONE BOX UNDER

(1) OR (2) BELOW):

(1) SHARES TENDERED AT A PRICE DETERMINED PURSUANT TO THE OFFER

BY CHECKING THE BOX BELOW INSTEAD OF ONE OF THE BOXES UNDER “Shares Tendered At Price Determined By The Shareholder,” the undersigned hereby tenders Shares at the Purchase Price (as defined in the Offer to Purchase) as shall be determined by the Company in accordance with the terms of and subject to the conditions of the Offer.

☐    The undersigned wishes to maximize its chances of having the Company purchase all of the Shares the undersigned is tendering (subject to the possibility of proration). Accordingly, by checking this box instead of one of the price boxes below, the undersigned hereby tenders its Shares at, and is willing to accept, the Purchase Price as determined by the Company in accordance with the terms and subject to the conditions of the Offer. The undersigned understands that checking this box will result in its Shares being deemed to have been tendered at $7.00 per Share, which is the low end of the price range in the Offer, for purposes of determining the Purchase Price. The undersigned also understands that this may have the effect of lowering the Purchase Price and could result in the undersigned receiving a per Share price as low as $7.00, which is below the last reported sale price for the Shares on June 7, 2023, the last full trading day prior to the public announcement of the Offer, which was $7.21.

OR

(2) SHARES TENDERED AT A PRICE DETERMINED BY THE SHAREHOLDER

BY CHECKING ONE OF THE FOLLOWING BOXES INSTEAD OF THE BOX UNDER “Shares Tendered At Price Determined Pursuant to The Offer,” the undersigned hereby tenders Shares at the price per Share checked. The undersigned understands that this action could result in the Company purchasing none of the Shares tendered

 

2


hereby if you select a box other than the box representing a price at or below the Purchase Price as determined by the Company in accordance with the terms and subject to the conditions of the Offer.

 

☐  $7.00     ☐  $7.05       ☐  $7.10       ☐  $7.15  
☐  $7.20     ☐  $7.25       ☐  $7.30       ☐  $7.35  
☐  $7.40     ☐  $7.45       ☐  $7.50       ☐  $7.55  
☐  $7.60     ☐  $7.65       ☐  $7.70       ☐  $7.75  
☐  $7.80     ☐  $7.85       ☐  $7.90       ☐  $7.95  
☐  $8.00      

CHECK ONLY ONE BOX UNDER (1) OR (2) ABOVE. IF MORE THAN ONE BOX IS CHECKED ABOVE, OR IF NO BOX IS CHECKED, THERE IS NO VALID TENDER OF SHARES.

A SHAREHOLDER DESIRING TO TENDER SHARES AT MORE THAN ONE PRICE MUST COMPLETE A SEPARATE INSTRUCTION FORM FOR EACH PRICE AT WHICH SHARES ARE TENDERED. THE SAME SHARES CANNOT BE TENDERED AT MORE THAN ONE PRICE UNLESS PREVIOUSLY PROPERLY WITHDRAWN AS PROVIDED IN SECTION 4 OF THE OFFER TO PURCHASE.

ODD LOTS

(See Instruction 8 of the Letter of Transmittal)

As described in Section 1 of the Offer to Purchase, under certain conditions, shareholders holding fewer than 100 Shares may have their Shares accepted for payment before any proration of other tendered Shares. This preference is not available to partial tenders, or to beneficial or record holders of an aggregate of 100 or more Shares, even if such holders have separate accounts or certificates representing fewer than 100 Shares.

Accordingly, this section is to be completed ONLY if Shares are being tendered by or on behalf of a person owning, beneficially or of record, an aggregate of fewer than 100 Shares. The undersigned certifies that it either (check one box):

 

owns, beneficially or of record, an aggregate of fewer than 100 Shares and is tendering all such Shares; or

 

is a broker, dealer, commercial bank, trust company or other nominee that (i) is tendering, on behalf of the beneficial owner(s), Shares with respect to which it is the record holder and (ii) believes, based upon representations made to it by the beneficial owner(s) of such Shares, that each such person is the beneficial owner of an aggregate of fewer than 100 Shares and is tendering all such Shares.

CONDITIONAL TENDER

(See Instruction 12 of the Letter of Transmittal)

A shareholder may tender Shares subject to the condition that a specified minimum number of the shareholder’s Shares tendered pursuant to the Letter of Transmittal must be purchased if any Shares tendered are purchased, all as described in the Offer to Purchase and particularly in Section 6 thereof. Unless at least that minimum number of Shares indicated below is purchased by the Company pursuant to the terms of the Offer, none of the Shares tendered by you will be purchased. It is the tendering shareholder’s responsibility to calculate that minimum number of Shares that must be purchased if any are purchased, and the Company urges shareholders to consult their own financial or tax advisors before completing this section. Unless this box has been checked and a minimum specified, the tender will be deemed unconditional.

 

The minimum number of Shares that must be purchased, if any are purchased, is:                 Shares.

 

3


If, because of proration, the minimum number of Shares designated will not be purchased, the Company may accept conditional tenders by random lot, if necessary. However, to be eligible for purchase by random lot, the tendering shareholder must have tendered all of his or her Shares and checked this box:

 

The tendered Shares represent all Shares held by the undersigned.

PLEASE SIGN ON THIS PAGE

 

Name(s) of Record Holder(s):  

 

(Please Print)

Signature(s)  

 

Address(es)  

 

(Include Zip Code)

Area code and telephone number:  

 

☐   If delivery will be by book-entry transfer, check this box.

Name of tendering institution:  

 

Account number:  

 

 

4


GUARANTEE

(NOT TO BE USED FOR SIGNATURE GUARANTEE)

The undersigned, a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of the Securities Transfer Association Medallion Signature Guarantee Program, or an “eligible guarantor institution” (as such term is defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (an “Eligible Institution”), hereby guarantees: (i) that the above-named person(s) “own(s)” and has or have a net long position in the Shares being tendered within the meaning of Rule 14e-4 promulgated under the Exchange Act, (ii) that such tender of Shares complies with Rule 14e-4 and (iii) it will deliver to the Depositary (at one of its addresses set forth above) certificate(s) for the Shares tendered hereby, in proper form for transfer, or a confirmation of the book-entry transfer of the Shares into the Depositary’s account at The Depository Trust Company together with a properly completed and duly executed Letter of Transmittal (or a manually signed email thereof) or an Agent’s Message (as defined in the Offer to Purchase) and any other required documents, within two (2) trading days (as defined in the Letter of Transmittal) after the date of receipt by the Depositary of this Notice of Guaranteed Delivery.

The Eligible Institution that completes this form must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal and certificates for Shares to the Depositary within the time period shown herein. Failure to do so could result in financial loss to such Eligible Institution. Participants should notify the Depositary prior to covering through the submission of a physical security directly to the Depositary based on a guaranteed delivery that was submitted via The Depository Trust Company’s PTOP platform.

 

     

Name of Eligible Institutions Guaranteeing Delivery)

  

     

(Authorized Signature)

     

Address

  

     

Name (Print Name)

     

Zip Code

  

     

Title

     

(Area Code) Telephone No.

  

     

Dated:                , 2023

This form is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an Eligible Institution under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal.

NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS FORM. YOUR SHARE CERTIFICATES MUST BE SENT WITH THE LETTER OF TRANSMITTAL UNLESS DELIVERY OF THE SHARES IS MADE BY BOOK-ENTRY TRANSFER.

 

5

Exhibit (a)(1)(D)

Offer to Purchase for Cash

by

Designer Brands Inc.

Up to $100 Million of its Class A Common Shares

At a Cash Purchase Price Not More than $8.00 per Share Nor Less than $7.00 per Share

 

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, AT THE END OF THE DAY, NEW YORK CITY TIME, ON JULY 7, 2023, UNLESS THE OFFER IS EXTENDED OR TERMINATED (SUCH DATE AND TIME, AS THEY MAY BE EXTENDED, THE “EXPIRATION DATE”).

June 8, 2023

To Brokers, Dealers, Banks, Trust Companies and Other Nominees:

Designer Brands Inc., an Ohio corporation (the “Company”), has appointed us to act as Dealer Managers in connection with its offer to purchase for cash up to $100 million in aggregate purchase price of its issued and outstanding shares of Class A Common Shares, without par value (each, a “Share,” and collectively, the “Shares”), at a price calculated as described herein and in the Offer to Purchase (as defined below) that is a price not greater than $8.00 nor less than $7.00 per Share to the seller in cash, less any applicable withholding taxes and without interest, upon the terms and subject to the conditions described in the Offer to Purchase, dated June 8, 2023 (together with any amendments or supplements thereto, the “Offer to Purchase”), the related Letter of Transmittal (together with any amendments or supplements thereto, the “Letter of Transmittal”) and other related materials as may be amended or supplemented from time to time (collectively, with the Offer to Purchase and the Letter to Transmittal, the “Offer”).

The Company will, upon the terms and subject to the conditions of the Offer, determine a single per Share price that it will pay for Shares properly tendered and not properly withdrawn from the Offer, taking into account the total number of Shares properly tendered and the prices specified, or deemed specified, by tendering shareholders. We will select this single per Share price (the “Purchase Price”) as the lowest single purchase price (in increments of $0.05), not greater than $8.00 nor less than $7.00 per Share, that would allow the Company to purchase the maximum number of Shares for an aggregate purchase price not to exceed $100 million, or all Shares properly tendered and not properly withdrawn in the event that less than $100 million in aggregate purchase price of Shares is properly tendered and not properly withdrawn. All Shares purchased in the Offer will be purchased at the Purchase Price, including Shares tendered at a price lower than the Purchase Price subject to “Odd Lot” priority, proration and the conditional tender provisions described in the Offer to Purchase.

The Offer is not conditioned on any minimum number of Shares being tendered. The Offer is, however, subject to certain other conditions as set forth in the Offer to Purchase, including a financing contingency that must be consummated by the Company in order to fund the Offer.

Capitalized terms used herein and not defined herein shall have the meanings given to them in the Offer to Purchase. The description of the Offer in this letter is only a summary and is qualified by the terms and conditions of the Offer set forth in the Offer to Purchase, the Letter of Transmittal and other related materials.

The Company will not purchase any Shares tendered at prices in excess of the Purchase Price. The term “Expiration Date” refers to the specific time and date on which the Offer expires. Upon the terms and subject to the conditions of the Offer, if $100 million in aggregate purchase price of Shares or less is properly tendered and not properly withdrawn, the Company will purchase all Shares properly tendered at or below the Purchase Price and not properly withdrawn prior to the Expiration Date. Only Shares properly tendered at prices at or below the Purchase Price, and not properly withdrawn, will be purchased in the Offer in accordance with the terms and subject to the conditions of the Offer (including the “Odd Lot” priority, proration and conditional


tender provisions described in the Offer to Purchase). Under no circumstances will interest be paid on the Purchase Price for the Shares regardless of any delay in making such payment. All Shares acquired in the Offer, if any, will be acquired at the Purchase Price, including those Shares tendered at a price lower than the Purchase Price. The Company reserves the right, in its sole discretion, to change the per Share purchase price range and to increase or decrease the number of Shares sought in the Offer, subject to applicable law. In accordance with the rules of the Securities and Exchange Commission, if more than $100 million in aggregate purchase price of Shares is tendered in the Offer at or below the Purchase Price, the Company may increase the number of Shares accepted for payment in the Offer by no more than 2% of the outstanding Shares without extending the Expiration Date.

The Company expressly reserves the right, in its sole discretion, to (i) upon the occurrence of any of certain conditions to the Offer more specifically described in the Offer to Purchase, (a) terminate the Offer and return all tendered Shares to the tendering shareholders, (b) extend the Offer and, subject to the withdrawal rights set forth in the Offer to Purchase, retain all of the tendered Shares until the expiration of the Offer as so extended, (c) waive a condition to the Offer and, subject to any requirement to extend the period of time during which the Offer is open, purchase all of the Shares properly tendered and not properly withdrawn prior to the Expiration Date or (d) delay acceptance for payment of or payment for Shares, subject to applicable law, until satisfaction or waiver of such condition, or (ii) amend the Offer in any respect, subject to applicable law.

If the conditions to the Offer have been satisfied or waived and more than $100 million in aggregate purchase price of Shares has been properly tendered and not properly withdrawn prior to the Expiration Date, the Company will purchase Shares on the following basis:

 

   

first, the Company will purchase all Odd Lots of fewer than 100 Shares at the Purchase Price from shareholders who properly tender all of their Shares at or below the Purchase Price and who do not properly withdraw them before the Expiration Date. Tenders of less than all of the Shares owned, beneficially or of record, by such Odd Lot Holder will not qualify for this preference;

 

   

second, after purchasing all Odd Lots that were properly tendered at or below the Purchase Price, subject to the conditional tender provisions described in the Offer to Purchase (whereby a holder may specify the minimum number of such holder’s Shares that must be purchased if any such Shares are purchased), the Company will purchase all Shares properly tendered at or below the Purchase Price on a pro rata basis with appropriate adjustment to avoid purchases of fractional Shares; and

 

   

third, only if necessary to permit the Company to purchase $100 million in aggregate purchase price of Shares (or such greater amount the Company may elect to purchase, subject to applicable law), the Company will purchase Shares conditionally tendered (for which the condition was not initially satisfied) at or below the Purchase Price, by random lot, to the extent feasible. To be eligible for purchase by random lot, shareholders whose Shares are conditionally tendered must have tendered all of their Shares at or below the Purchase Price.

As a result of the foregoing priorities applicable to the purchase of Shares properly tendered, it is possible that fewer than all Shares tendered by a shareholder will be purchased or that, if a tender is conditioned upon the purchase of a specified number of Shares, none of those Shares will be purchased even though those Shares were properly tendered at prices at or below the Purchase Price and not properly withdrawn. Shares not purchased in the Offer, including Shares tendered at prices in excess of the Purchase Price and Shares not purchased because of conditional tender, will be returned to the tendering shareholders at the Company’s expense promptly after the Expiration Date. See Section 1, Section 3 and Section 5 of the Offer to Purchase.

The Offer is not conditioned on any minimum number of Shares being tendered and it is not subject to a financing condition. However, the Offer is subject to certain other conditions. See Section 7 of the Offer to Purchase.

 

2


For your information and for forwarding to those of your clients for whom you hold Shares registered in your name or in the name of your nominee, we are enclosing the following documents:

 

  1.

The Offer to Purchase;

 

  2.

The Letter of Transmittal for your use and for the information of your clients, including an IRS Form W-9;

 

  3.

Notice of Guaranteed Delivery to be used to accept the Offer if the Share certificates and all other required documents cannot be delivered to the Depositary, or if the procedure for book-entry transfer cannot be completed, before the Expiration Date, as described in Section 3 of the Offer to Purchase;

 

  4.

A letter to clients that you may send to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee, with space provided for obtaining such clients’ instructions with regard to the Offer; and

 

  5.

A return envelope addressed to Computershare Trust Company, N.A., as Depositary for the Offer.

The Company’s Board of Directors has authorized the Company to make the Offer. However, none of the Company, the members of its Board of Directors, BofA Securities, Inc. and BMO Capital Markets Corp., the dealer managers for the Offer (the “Dealer Managers”), Computershare Trust Company, N.A., the depositary for the Offer (the “Depositary”), or Georgeson LLC, the information agent for the Offer (the “Information Agent”), makes any recommendation to any shareholder as to whether to tender or refrain from tendering any Shares or as to the price or prices at which shareholders may choose to tender their Shares. None of the Company, the members of its Board of Directors, the Dealer Managers, the Depositary or the Information Agent has authorized any person to make any recommendation to you as to whether you should tender or refrain from tendering your Shares or as to the purchase price or purchase prices at which you may choose to tender your Shares. Shareholders should carefully evaluate all information in the Offer to Purchase and the Letter of Transmittal, and should consult their own financial and tax advisors. Shareholders must decide whether to tender or refrain from tendering their Shares and, if deciding to tender, how many Shares to tender and the price or prices at which they wish to tender. In doing so, a shareholder should read carefully the information in the Offer to Purchase and the Letter of Transmittal before making any decision with respect to the Offer.

YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE 12:00 MIDNIGHT, AT THE END OF THE DAY, NEW YORK CITY TIME, ON JULY 7, 2023, UNLESS THE OFFER IS EXTENDED.

For Shares to be tendered properly pursuant to the Offer, one of the following must occur: (i) the certificates for such Shares, or confirmation of receipt of such Shares pursuant to the procedure for book-entry transfer set forth in Section 3 of the Offer to Purchase, together with (a) a properly completed and duly executed Letter of Transmittal, including any required signature guarantees and any documents required by the Letter of Transmittal, or (b) an Agent’s Message (as defined in Section 3 of the Offer to Purchase) in the case of a book-entry transfer, must be received before the Expiration Date by the Depositary at one of its addresses set forth on the back cover of the Offer to Purchase or (ii) shareholders whose certificates for Shares are not immediately available or who cannot deliver their certificates and all other required documents to the Depositary, or cannot complete the procedures for book-entry transfer prior to the Expiration Date, must properly complete and duly execute the Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase.

The Company will not pay any fees or commissions to brokers, dealers, commercial banks or trust companies or other nominees (other than fees to the Dealer Managers and the Information Agent, as described in Section 16 of the Offer to Purchase) for soliciting tenders of Shares pursuant to the Offer. The Company will, however, upon

 

3


request, reimburse brokers, dealers (including, if applicable, the Dealer Managers), commercial banks, trust companies or other nominees for customary mailing and handling expenses incurred by them in forwarding the Offer and related materials to the beneficial owners of Shares held by them as a nominee or in a fiduciary capacity. No broker, dealer, commercial bank or trust company has been authorized to act as the agent of the Company, the Dealer Managers, the Information Agent or the Depositary for purposes of the Offer. The Company will pay or cause to be paid all share transfer taxes, if any, on its purchase of the Shares except as otherwise provided in the Offer to Purchase or Instruction 6 in the Letter of Transmittal.

Any inquiries you may have with respect to the Offer may be addressed to the Dealer Managers at its address and telephone number listed below.

Additional copies of the Offer to Purchase, the Letter of Transmittal and other related materials may also be obtained from the Information Agent for the Offer collect at (888) 206-5896.

Very truly yours,

BOFA SECURITIES, INC.

BMO CAPITAL MARKETS CORP.

NOTHING CONTAINED IN THIS DOCUMENT OR IN THE ENCLOSED DOCUMENTS WILL MAKE YOU OR ANY OTHER PERSON AN AGENT OF THE COMPANY, THE DEALER MANAGERS, THE INFORMATION AGENT OR THE DEPOSITARY OR ANY AFFILIATE OF ANY OF THE FOREGOING, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED AND THE STATEMENTS CONTAINED IN THOSE DOCUMENTS.

The Dealer Managers for the Offer are:

 

BofA Securities, Inc.    BMO Capital Markets Corp.
One Bryant Park, 8th Floor    151 W. 42nd Street, 32nd Floor
New York, New York, 10036    New York, New York 10036
Call Toll-Free: (888) 803-9655   

Call: (212) 702-1101

 

4

Exhibit (a)(1)(E)

Offer to Purchase for Cash

by

Designer Brands Inc.

Up to $100 Million of its Class A Common Shares

At a Cash Purchase Price Not More than $8.00 per Share Nor Less than $7.00 per Share

 

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, AT THE END OF THE DAY, NEW YORK CITY TIME, ON JULY 7, 2023, UNLESS THE OFFER IS EXTENDED OR TERMINATED (SUCH DATE AND TIME, AS THEY MAY BE EXTENDED, THE “EXPIRATION DATE”).

June 8, 2023

To Our Clients:

Enclosed for your consideration are the Offer to Purchase, dated June 8, 2023 (together with any amendments or supplements thereto, the “Offer to Purchase”), the related Letter of Transmittal (together with any amendments or supplements thereto, the “Letter of Transmittal”) and other related materials (together with any amendments or supplements thereto, the Offer to Purchase and the Letter of Transmittal, the “Offer”) in connection with the offer by Designer Brands Inc., an Ohio corporation (the “Company,” “we,” “us” or “our”), to purchase for cash up to $100 million in aggregate purchase price of its issued and outstanding shares of Class A Common Shares, without par value (each, a “Share,” and collectively, the “Shares”), at a price calculated as described herein and in the Offer to Purchase that is a price not greater than $8.00 nor less than $7.00 per Share to the seller in cash, less any applicable withholding taxes and without interest, upon the terms and subject to the conditions of the Offer.

The Company will, upon the terms and subject to the conditions of the Offer, determine a single per Share price that it will pay for Shares properly tendered and not properly withdrawn from the Offer, taking into account the total number of Shares properly tendered and the prices specified, or deemed specified (as described in the attached Instruction Form), by tendering shareholders. We will select this single per Share price (the “Purchase Price”) as the lowest single purchase price (in increments of $0.05), not greater than $8.00 nor less than $7.00 per Share, that would allow the Company to purchase the maximum number of Shares for an aggregate purchase price not to exceed $100 million, or all Shares properly tendered and not properly withdrawn in the event that less than $100 million in aggregate purchase price of Shares is properly tendered and not properly withdrawn. All Shares purchased in the Offer will be purchased at the Purchase Price, including Shares tendered at a price lower than the Purchase Price subject to “Odd Lot” priority, proration and the conditional tender provisions described in the Offer to Purchase.

The Offer is not conditioned on any minimum number of Shares being tendered. The Offer is, however, subject to certain other conditions as set forth in the Offer to Purchase, including a financing contingency that must be consummated by the Company in order to fund the Offer.

Capitalized terms used herein and not defined herein shall have the meanings given to them in the Offer to Purchase. The description of the Offer in this letter is only a summary and is qualified by the terms and conditions of the Offer set forth in the Offer to Purchase, the Letter of Transmittal and other related materials.

The Company will not purchase any Shares tendered at prices in excess of the Purchase Price. The term “Expiration Date” refers to the specific time and date on which the Offer expires. Upon the terms and subject to the conditions of the Offer, if $100 million in aggregate purchase price of Shares or less is properly tendered and not properly withdrawn, the Company will purchase all Shares properly tendered at or below the Purchase Price and not properly withdrawn prior to the Expiration Date. Only Shares properly tendered at prices at or below the Purchase Price, and not properly withdrawn, will be purchased in the Offer in accordance with the terms and subject to the conditions of the Offer (including the “Odd Lot” priority, proration and conditional


tender provisions described in the Offer to Purchase). Under no circumstances will interest be paid on the Purchase Price for the Shares regardless of any delay in making such payment. All Shares acquired in the Offer, if any, will be acquired at the Purchase Price, including those Shares tendered at a price lower than the Purchase Price. The Company reserves the right, in its sole discretion, to change the per Share purchase price range and to increase or decrease the number of Shares sought in the Offer, subject to applicable law. In accordance with the rules of the Securities and Exchange Commission, if more than $100 million in aggregate purchase price of Shares is tendered in the Offer at or below the Purchase Price, the Company may increase the number of Shares accepted for payment in the Offer by no more than 2% of the outstanding Shares without extending the Expiration Date.

The Company expressly reserves the right, in its sole discretion, to (i) upon the occurrence of any of certain conditions to the Offer more specifically described in the Offer to Purchase, (a) terminate the Offer and return all tendered Shares to the tendering shareholders, (b) extend the Offer and, subject to the withdrawal rights set forth in Section 4 of the Offer to Purchase, retain all of the tendered Shares until the expiration of the Offer as so extended, (c) waive a condition to the Offer and, subject to any requirement to extend the period of time during which the Offer is open, purchase all of the Shares properly tendered and not properly withdrawn prior to the Expiration Date or (d) delay acceptance for payment of or payment for Shares, subject to applicable law, until satisfaction or waiver of such condition, or (ii) amend the Offer in any respect, subject to applicable law.

If the conditions to the Offer have been satisfied or waived and more than $100 million in aggregate purchase price of Shares has been properly tendered and not properly withdrawn prior to the Expiration Date, the Company will purchase Shares on the following basis:

 

   

first, the Company will purchase all Odd Lots of fewer than 100 Shares at the Purchase Price from shareholders who properly tender all of their Shares at or below the Purchase Price and who do not properly withdraw them before the Expiration Date. Tenders of less than all of the Shares owned, beneficially or of record, by such Odd Lot Holder will not qualify for this preference;

 

   

second, after purchasing all Odd Lots that were properly tendered at or below the Purchase Price, subject to the conditional tender provisions described in the Offer to Purchase (whereby a holder may specify the minimum number of such holder’s Shares that must be purchased if any such Shares are purchased), the Company will purchase all Shares properly tendered at or below the Purchase Price on a pro rata basis with appropriate adjustment to avoid purchases of fractional Shares; and

 

   

third, only if necessary to permit the Company to purchase $100 million in aggregate purchase price of Shares (or such greater amount the Company may elect to purchase, subject to applicable law), the Company will purchase Shares conditionally tendered (for which the condition was not initially satisfied) at or below the Purchase Price, by random lot, to the extent feasible. To be eligible for purchase by random lot, shareholders whose Shares are conditionally tendered must have tendered all of their Shares at or below the Purchase Price.

As a result of the foregoing priorities applicable to the purchase of Shares properly tendered, it is possible that fewer than all Shares that you tendered will be purchased or that, if a tender is conditioned upon the purchase of a specified number of Shares, none of those Shares that you tendered will be purchased even though those Shares were properly tendered at prices at or below the Purchase Price and not properly withdrawn. Shares not purchased in the Offer, including Shares tendered at prices in excess of the Purchase Price and Shares not purchased because of proration or conditional tender, will be returned to you at the Company’s expense promptly after the Expiration Date. See Section 1, Section 3 and Section 5 of the Offer to Purchase.

The Offer is not conditioned on any minimum number of Shares being tendered and it is not subject to a financing condition. However, the Offer is subject to certain other conditions. See Section 7 of the Offer to Purchase.

 

2


We are the owner of record of Shares held for your account. As such, we are the only ones who can tender your Shares, and we can tender your Shares only pursuant to your instructions.

WE ARE SENDING YOU THE LETTER OF TRANSMITTAL AND OTHER TENDER OFFER MATERIALS FOR YOUR INFORMATION ONLY; YOU CANNOT USE IT OR ANY OTHER MATERIALS TO TENDER SHARES WE HOLD FOR YOUR ACCOUNT.

Please instruct us as to whether you wish us to tender any or all of the Shares we hold for your account in accordance with the terms and subject to the conditions of the Offer.

Please note the following:

 

  1.

You may tender your Shares at a price or prices not greater than $8.00 nor less than $7.00 per Share, as indicated in the attached Instruction Form, to be paid to you in cash, less any applicable withholding taxes and without interest, or you may instruct us to tender your Shares at the Purchase Price determined by the Company in accordance with the terms and subject to the conditions of the Offer.

 

  2.

You should consult with your broker or other financial or tax advisors on the possibility of designating the priority in which your Shares will be purchased in the event of proration.

 

  3.

The Offer and withdrawal rights will expire at 12:00 Midnight, at the end of the day, New York City time, on July 7, 2023, unless the Company extends or terminates the Offer in accordance with the terms and subject to the conditions of the Offer, subject to applicable law.

 

  4.

Assuming that the Offer is fully subscribed, if the Purchase Price is determined to be $7.00 per Share, the minimum Purchase Price under the Offer, the approximate number of Shares that would be purchased under the Offer is 14,285,714. Assuming that the Offer is fully subscribed, if the Purchase Price is determined to be $8.00 per Share, the maximum Purchase Price under the Offer, the approximate number of Shares that would be purchased under the Offer is 12,500,000.

 

  5.

If you hold an aggregate of fewer than 100 Shares, and you instruct us to tender on your behalf all such Shares before the Expiration Date at or below the Purchase Price and check the box captioned “Odd Lots” on the attached Instruction Form, the Company will accept all such Shares for purchase before proration, if any, of the purchase of other Shares properly tendered at or below the Purchase Price and not properly withdrawn pursuant to the Offer.

 

  6.

If you wish to make your tender conditional upon the purchase of all Shares that you tender or upon the Company’s purchase of a specified minimum number of the Shares that you tender, you may elect to do so and thereby avoid possible proration of your tender. The Company’s purchase of Shares from all tenders at or below the Purchase Price that are so conditioned will be determined by random lot to the extent feasible, and to be eligible for purchase by random lot, any shareholder whose Shares are conditionally tendered must have tendered all of its Shares. To elect such a condition, complete the box entitled “Conditional Tender” in the attached Instruction Form.

 

  7.

If you wish to tender portions of your Shares at different prices, you must complete a separate Instruction Form for each price at which you wish to tender each such portion of your Shares. We will submit a separate Letter of Transmittal on your behalf for each price you will accept for each portion of Shares tendered.

 

  8.

Tendering shareholders who are tendering Shares registered in their name and who are tendering such Shares directly to the Depositary will not be obligated to pay any brokerage commissions or fees to the Company or to the Dealer Managers or, except as set forth in the Offer to Purchase and the Letter of Transmittal, share transfer taxes on the Company’s purchase of Shares under the Offer.

 

3


  9.

None of the Company or any members of its Board of Directors, the Dealer Managers, the Information Agent or the Depositary makes any recommendation to you as to whether to tender or refrain from tendering your Shares or as to any price at which you might tender your Shares. You must make your own decision as to whether to tender your Shares and, if so, how many Shares to tender and at what price or prices to tender. You should carefully read the information in the Offer to Purchase and in the related Letter of Transmittal, including the purposes and effects of the Offer, prior to making any decision with respect to the Offer.

YOUR PROMPT ACTION IS REQUESTED. YOUR INSTRUCTION FORM SHOULD BE FORWARDED TO US WITH AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF BEFORE THE EXPIRATION DATE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, AT THE END OF THE DAY, NEW YORK CITY TIME, ON JULY 7, 2023, UNLESS THE OFFER IS EXTENDED OR TERMINATED.

If you wish to have us tender any or all of your Shares, please so instruct us by completing, executing, detaching and returning the attached Instruction Form to us. If you authorize us to tender your Shares, we will tender all such Shares unless you specify otherwise on the attached Instruction Form.

The Offer is being made solely pursuant to the Offer to Purchase and the related Letter of Transmittal and is being made to all record holders of the Shares. The Offer is not being made to, and tenders will not be accepted from or on behalf of, holders of Shares in any jurisdiction or in any circumstances where it would be illegal to do so, provided that the Company will comply with the requirements of Rule 13e-4(f)(8) promulgated under the Securities Exchange Act of 1934, as amended. However, the Company may, at its discretion, take any action necessary for it to make the Offer to holders of Shares in any such jurisdiction. In any jurisdiction where the securities or blue sky laws require the Offer to be made by a licensed broker or dealer, the Offer is being made on the Company’s behalf by the Dealer Managers or one or more registered brokers or dealers, which are licensed under the laws of such jurisdiction.

 

4


INSTRUCTION FORM

The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated June 8, 2023 (together with any amendments or supplements thereto, the “Offer to Purchase”), the related Letter of Transmittal (together with any amendments or supplements thereto, the “Letter of Transmittal”) and other related materials (together with any amendments or supplements thereto, the Offer to Purchase and the Letter of Transmittal, the “Offer”) in connection with the offer by Designer Brands Inc., an Ohio corporation (the “Company”), to purchase up to $100 million in aggregate purchase price of its issued and outstanding shares of Class A Common Shares, without par value (each, a “Share,” and collectively, the “Shares”), at a price calculated as described herein and in the Offer to Purchase that is a price not greater than $8.00 nor less than $7.00 per Share to the seller in cash, less any applicable withholding taxes and without interest, upon the terms and subject to the conditions of the Offer. Capitalized terms used herein and not defined herein shall have the meanings given to them in the Offer to Purchase.

The undersigned hereby instruct(s) you to tender to the Company the number of Shares indicated below, or, if no number is specified, all Shares you hold for the account of the undersigned, at the price per Share indicated below, upon the terms and subject to the conditions of the Offer.

Aggregate Number Of Shares To Be Tendered

By You For The Account Of The Undersigned:                     Shares*.

 

*

Unless otherwise indicated, it will be assumed that all Shares held by us for your account are to be tendered.

PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED

(See Instruction 7 of the Letter of Transmittal)

THE UNDERSIGNED IS TENDERING SHARES AS FOLLOWS

(CHECK ONLY ONE BOX UNDER (1) OR (2) BELOW):

 

(1)

SHARES TENDERED AT PRICE DETERMINED PURSUANT TO THE OFFER

BY CHECKING THE BOX BELOW INSTEAD OF ONE OF THE BOXES UNDER “Shares Tendered At Price Determined By The Shareholder,” the undersigned hereby tenders Shares at the Purchase Price as shall be determined by the Company in accordance with the terms and subject to the conditions of the Offer.

 

   

The undersigned wishes to maximize its chances of having the Company purchase all of the Shares the undersigned is tendering (subject to the possibility of proration). Accordingly, by checking this box instead of one of the price boxes below, the undersigned hereby tenders its Shares at, and is willing to accept, the Purchase Price as determined by the Company in accordance with the terms and subject to the conditions of the Offer. The undersigned understands that checking this box will result in its Shares being deemed to have been tendered at $7.00 per Share, which is the low end of the price range in the Offer, for purposes of determining the Purchase Price. The undersigned also understands that this may have the effect of lowering the Purchase Price and could result in the undersigned receiving a per Share price as low as $7.00, which is the low end of the price range in the Offer, less any applicable withholding taxes and without interest.

 

(2)

SHARES TENDERED AT PRICE DETERMINED BY THE SHAREHOLDER

BY CHECKING ONE OF THE FOLLOWING BOXES INSTEAD OF THE BOX UNDER “Shares Tendered At Price Determined Pursuant to The Offer,” the undersigned hereby tenders Shares at the price per Share checked. The undersigned understands that this action could result in the Company purchasing none of the Shares tendered

 

5


hereby if you select a box other than the box representing a price at or below the Purchase Price as determined by the Company in accordance with the terms and subject to the conditions of the Offer.

 

☐ $7.00    ☐ $7.05    ☐ $7.10    ☐ $7.15
☐ $7.20    ☐ $7.25    ☐ $7.30    ☐ $7.35
☐ $7.40    ☐ $7.45    ☐ $7.50    ☐ $7.55
☐ $7.60    ☐ $7.65    ☐ $7.70    ☐ $7.75
☐ $7.80    ☐ $7.85    ☐ $7.90    ☐ $7.95
☐ $8.00         

CHECK ONLY ONE BOX UNDER (1) OR (2) ABOVE. IF MORE THAN ONE BOX IS CHECKED ABOVE, OR IF NO BOX IS CHECKED, THERE IS NO VALID TENDER OF SHARES.

A SHAREHOLDER DESIRING TO TENDER SHARES AT MORE THAN ONE PRICE MUST COMPLETE A SEPARATE INSTRUCTION FORM FOR EACH PRICE AT WHICH SHARES ARE TENDERED. THE SAME SHARES CANNOT BE TENDERED AT MORE THAN ONE PRICE UNLESS PREVIOUSLY PROPERLY WITHDRAWN AS PROVIDED IN SECTION 4 OF THE OFFER TO PURCHASE.

ODD LOTS

(See Instruction 8 of the Letter of Transmittal)

As described in Section 1 of the Offer to Purchase, under certain conditions, shareholders holding fewer than 100 Shares may have their Shares accepted for payment before any proration of other tendered Shares. This preference is not available to partial tenders, or to beneficial or record holders of an aggregate of 100 or more Shares, even if such holders have separate accounts or certificates representing fewer than 100 Shares.

Accordingly, this section is to be completed ONLY if Shares are being tendered by or on behalf of a person owning, beneficially or of record, an aggregate of fewer than 100 Shares. The undersigned certifies that it either (check one box):

 

   

owns, beneficially or of record, an aggregate of fewer than 100 Shares and is tendering all such Shares; or

 

   

is a broker, dealer, commercial bank, trust company or other nominee that (i) is tendering, on behalf of the beneficial owner(s), Shares with respect to which it is the record holder and (ii) believes, based upon representations made to it by the beneficial owner(s) of such Shares, that each such person is the beneficial owner of an aggregate of fewer than 100 Shares and is tendering all such Shares.

CONDITIONAL TENDER

(See Instruction 12 of the Letter of Transmittal)

A shareholder may tender Shares subject to the condition that a specified minimum number of the shareholder’s Shares tendered pursuant to the Letter of Transmittal must be purchased if any Shares tendered are purchased, all as described in the Offer to Purchase and particularly in Section 6 thereof. Unless at least that minimum number of Shares indicated below is purchased by the Company pursuant to the terms of the Offer, none of the Shares tendered by you will be purchased. It is the tendering shareholder’s responsibility to calculate that minimum number of Shares that must be purchased if any are purchased, and the Company urges shareholders to consult their own financial or tax advisors before completing this section. Unless this box has been checked and a minimum specified, the tender will be deemed unconditional.

 

   

The minimum number of Shares that must be purchased, if any are purchased, is:                  Shares.

 

6


If, because of proration, the minimum number of Shares designated will not be purchased, the Company may accept conditional tenders by random lot, if necessary. However, to be eligible for purchase by random lot, the tendering shareholder must have tendered all of his or her Shares and checked this box:

 

   

The tendered Shares represent all Shares held by the undersigned.

The method of delivery of this document is at the election and risk of the tendering shareholder. If delivery is by mail, then registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.

The Company’s Board of Directors has authorized the Company to make the Offer. However, none of the Company, any of the members of its Board of Directors, the Dealer Managers, the Information Agent or the Depositary makes any recommendation to shareholders as to whether they should tender or refrain from tendering their Shares or as to the purchase price or purchase prices at which any shareholder may choose to tender Shares. None of the Company, any of the members of its Board of Directors, the Dealer Managers, the Information Agent or the Depositary has authorized any person to make any recommendation to you as to whether you should tender or refrain from tendering your Shares or as to the purchase price or purchase prices at which you may choose to tender your Shares. Shareholders should carefully evaluate all information in the Offer to Purchase and in the Letter of Transmittal, consult their own financial and tax advisors and make their own decisions about whether to tender or refrain from tendering your Shares and, if deciding to tender, how many Shares to tender and the purchase price or purchase prices at which to tender.

SIGNATURE

 

Signature(s)  

 

 

Name(s)  

 

(Please Print)

 

Taxpayer Identification or Social Security No.:   

 

(Please Print)

 

Address(es)  

 

(Include Zip Code)

 

Phone Number (including Area Code)  

 

 

Date:  

 

 

7

Exhibit (a)(1)(F)

This announcement is neither an offer to purchase nor a solicitation of an offer to sell shares of Class A Common Shares of Designer Brands Inc. The Offer (as defined below) is made solely by the Offer to Purchase, dated June 8, 2023, and the related Letter of Transmittal, and any amendments or supplements thereto. The Offer is not being made to, nor will tenders be accepted from or on behalf of holders of shares of Class A Common Shares in any jurisdiction or in any circumstances in which the making or acceptance of offers to sell shares of Common Stock would not be in compliance with applicable law, provided that Designer Brands Inc. will comply with the requirements of Rule 13e-4(f)(8) promulgated under the Securities Exchange Act of 1934, as amended. In any jurisdiction where the securities or blue sky laws require the Offer be made by a licensed broker or dealer, the Offer shall be deemed made on behalf of Designer Brands Inc., by the Dealer Managers (as defined below) or one or more registered brokers or dealers, which are licensed under the laws of such jurisdiction.

Notice of Offer to Purchase for Cash

by

Designer Brands Inc.

Up to $100 Million of its Class A Common Shares at a Cash Purchase Price Not More than $8.00

per Share Nor Less than $7.00 per Share

Designer Brands Inc., an Ohio corporation (the “Company”), is offering to purchase up to $100 million in aggregate purchase price of its issued and outstanding shares of Class A Common Shares, without par value (each, a “Share,” and collectively, the “Shares”), at a price calculated as described herein and in the Offer to Purchase (as defined below) that is not greater than $8.00 nor less than $7.00 per Share to the seller in cash, less any applicable withholding taxes and without interest, upon the terms and subject to the conditions described in the Offer to Purchase (together with any amendments or supplements thereto, the “Offer to Purchase”), in the related Letter of Transmittal (together with any amendments or supplements thereto, the “Letter of Transmittal”) and in other related materials as may be amended or supplemented from time to time (collectively, with the Offer to Purchase and the Letter of Transmittal, the “Offer”). The description of the Offer herein is only a summary and is qualified by the terms and conditions of the Offer set forth in the Offer to Purchase, the Letter of Transmittal and other related materials.

 

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, AT THE END OF THE DAY, NEW YORK CITY TIME, ON JULY 7, 2023, UNLESS THE OFFER IS EXTENDED OR TERMINATED (SUCH DATE AND TIME, AS THEY MAY BE EXTENDED, THE “EXPIRATION DATE”).

The Offer is not conditioned on any minimum number of Shares being tendered. The Offer is, however, subject to certain other conditions as set forth in the Offer to Purchase, including a financing contingency that must be consummated by the Company in order to fund the Offer.

Upon the terms and subject to the conditions of the Offer, which will be conducted through a modified “Dutch auction” process, the Company will determine a single per Share price that it will pay for Shares properly tendered and not properly withdrawn from the Offer, taking into account the total number of Shares properly tendered and the prices specified, or deemed specified, by tendering shareholders. The Company will select the single per Share price (the “Purchase Price”) as the lowest single purchase price (in increments of $0.05), not greater than $8.00 nor less than $7.00 per Share, that would allow it to purchase the maximum number of Shares for an aggregate purchase price not to exceed $100 million, or all Shares properly tendered and not properly withdrawn in the event that less than $100 million in aggregate purchase price of Shares is properly tendered and not properly withdrawn. All Shares purchased in the Offer will be purchased at the Purchase Price,

including those Shares tendered at a price lower than the Purchase Price, subject to “Odd Lot” priority, proration and the conditional tender provisions described in the Offer to Purchase. Only Shares properly tendered at prices at or below the Purchase Price, and not properly withdrawn, will be purchased; however, because of “Odd Lot” priority, proration and the conditional tender provisions described in the Offer to Purchase, the Company may not


purchase all of the Shares tendered at or below the Purchase Price if Shares having an aggregate purchase price in excess of $100 million are properly tendered (and not properly withdrawn) at or below the Purchase Price. Shares not purchased in the Offer will be returned to the tendering shareholders promptly after the Expiration Date.

If any properly tendered Shares are not purchased under the Offer or are properly withdrawn before the Expiration Date, or if less than all Shares evidenced by a shareholder’s certificate(s) are tendered, the Company will credit the certificates to book-entry for unpurchased Shares promptly after the expiration or termination of the Offer or, in the case of Shares tendered by book-entry transfer at The Depository Trust Company (the “Book-Entry Transfer Facility”), the Shares will be credited to the appropriate account maintained by the tendering shareholder at the Book-Entry Transfer Facility, in each case without expense to the shareholder. The Company reserves the right, in its sole discretion, to change the per Share purchase price range and to increase or decrease the number of Shares sought in the Offer, subject to applicable law.

In accordance with the rules of the Securities and Exchange Commission (the “SEC”), if more than $100 million in aggregate purchase price of Shares are tendered in the Offer at or below the Purchase Price, the Company may increase the number of Shares accepted for payment in the Offer by no more than 2% of the outstanding Shares without extending the Expiration Date.

As of June 5, 2023, the Company had 58,073,011 issued and outstanding Shares and 7,732,733 issued and outstanding shares of Class B Common Shares, without par value. Assuming that the Offer is fully subscribed, if the Purchase Price is determined to be $7.00 per Share, the minimum Purchase Price pursuant to the Offer, the approximate number of Shares that would be purchased pursuant to the Offer is 14,285,714. Assuming that the Offer is fully subscribed, if the Purchase Price is determined to be $8.00 per Share, the maximum Purchase Price pursuant to the Offer, the approximate number of Shares that would be purchased pursuant to the Offer is 12,500,000. The Shares are listed and traded on the New York Stock Exchange (“NYSE”) under the trading symbol “DBI.” On June 7, 2023, the last reported sale price of the Shares on the NYSE was $7.21 per Share, which is above the $7.00 per Share lower end of the price range for the Offer. Accordingly, an election to accept the Purchase Price determined in the Offer may lower the Purchase Price to a price below such closing price and could be below the reported closing price on the Expiration Date. Shareholders are urged to obtain current market quotations for the Shares before deciding whether and at what purchase price or purchase prices to tender their Shares.

The Company expressly reserves the right, in its sole discretion, at any time and from time to time and subject to applicable laws, to extend the period of time during which the Offer is open and thereby delay acceptance for payment of, and payment for, any Shares by giving oral or written notice of such extension to Computershare Trust Company, N.A., the depositary for the Offer (the “Depositary”), and making a public announcement of such extension not later than 9:00 a.m., New York City time, on the next business day after the previously scheduled or announced Expiration Date. The Offer will expire at 12:00 midnight, at the end of the day, New York City time, on July 7, 2023, unless the Offer is terminated or the Company exercises its right to extend the period of time during which the Offer will remain open. Beneficial owners should be aware that their broker, dealer, commercial bank, trust company or other nominee may establish its own earlier deadlines for them to instruct it to accept the Offer on their behalf. Accordingly, beneficial owners wishing to participate in the Offer should contact their broker, dealer, commercial bank, trust company or other nominee as soon as possible in order to determine the times by which such owners must take action in order to participate in the Offer.

In accordance with the instructions to the Letter of Transmittal, shareholders desiring to tender Shares must specify the price or prices, not greater than $8.00 nor less than $7.00 per Share, at which they are willing to sell their Shares to the Company in the Offer. Alternatively, shareholders desiring to tender Shares can choose not to specify a price and, instead, specify that they are willing to sell their Shares at the Purchase Price (which could result in such tendering shareholders receiving a purchase price per Share as low as $7.00, the low end of the price range in the Offer, less any applicable withholding taxes and without interest). See the Offer to Purchase for recent sales prices for the Shares.

 

2


Shareholders wishing to tender Shares must follow the procedures set forth in the Offer to Purchase and in the Letter of Transmittal. Generally, for Shares to be properly tendered pursuant to the Offer, the certificates for such Shares (or confirmation of receipt of such Shares pursuant to the procedure for book-entry transfer set forth in the Offer to Purchase), together with a properly completed and duly executed Letter of Transmittal, including any required signature guarantees, or an “Agent’s Message” (as defined in the Offer to Purchase), and any other documents required by the Letter of Transmittal, must be received before the Expiration Date by the Depositary at its address set forth on the back cover of the Offer to Purchase.

If the conditions to the Offer have been satisfied or waived and more than $100 million in aggregate purchase price of Shares has been properly tendered and not properly withdrawn prior to the Expiration Date, the Company will purchase properly tendered Shares on the following basis:

 

   

first, all Odd Lots (as defined in the Offer to Purchase) of fewer than 100 Shares at the Purchase Price from shareholders who properly tender all of their Shares at or below the Purchase Price and who do not properly withdraw them before the Expiration Date. Tenders of less than all of the Shares owned, beneficially or of record, by such Odd Lot Holder (as defined in the Offer to Purchase) will not qualify for this preference;

 

   

second, after purchasing all the Odd Lots that were properly tendered at or below the Purchase Price, subject to the conditional tender provisions (whereby a holder may specify a minimum number of such holder’s Shares that must be purchased if any such Shares are purchased), the Company will purchase all Shares properly tendered at or below the Purchase Price on a pro rata basis with appropriate adjustment to avoid purchases of fractional Shares; and

 

   

third, only if necessary to permit the Company to purchase $100 million in aggregate purchase price of Shares (or such greater amount as the Company may elect to purchase, subject to applicable law), the Company will purchase Shares conditionally tendered (for which the condition was not initially satisfied) at or below the Purchase Price, by random lot, to the extent feasible. To be eligible for purchase by random lot, shareholders whose Shares are conditionally tendered must have tendered all of their Shares at or below the Purchase Price. Random lot would be facilitated by the Company.

For purposes of the Offer, the Company will be deemed to have accepted for payment (and therefore be deemed to have purchased), subject to proration, “Odd Lot” priority and the conditional tender provisions of the Offer, Shares that are properly tendered at or below the Purchase Price and not properly withdrawn only when, as and if the Company gives oral or written notice to the Depositary of its acceptance of the Shares for payment pursuant to the Offer.

Upon the terms and subject to the conditions of the Offer, promptly after the Expiration Date, the Company will accept for payment and pay the Purchase Price per share for all Shares accepted for payment pursuant to the Offer. In all cases, payment for Shares properly tendered and accepted for payment in accordance with the Offer will be made promptly, subject to possible delay due to proration, but only after timely receipt by the Depositary of: (i) certificates for Shares or a timely confirmation of a book-entry transfer of Shares into the Depositary’s account at the Book-Entry Transfer Facility; (ii) a properly completed and duly executed Letter of Transmittal, including any required signature guarantee, or an Agent’s Message in the case of a book-entry transfer; and (iii) any other documents required.

Due to the difficulty in determining the number of Shares properly tendered and not properly withdrawn, and because of the conditional tender procedure and the guaranteed delivery procedure described in the Offer to Purchase, the Company expects that it will not be able to announce the final proration for each shareholder or to commence payment for any Shares purchased pursuant to the Offer until after the Expiration Date and the guaranteed delivery period. The preliminary results of any proration will be announced by press release as promptly as practicable after the Expiration Date.

 

3


Tenders of Shares pursuant to the Offer may be withdrawn at any time before the Expiration Date and, unless such Shares have been accepted for payment, shareholders may also withdraw their previously tendered Shares at any time until 12:00 Midnight, at the end of the day, New York City time, on July 7, 2023. For a withdrawal to be effective, a written notice of withdrawal must be received in a timely manner by the Depositary at its address listed on the back cover of the Offer to Purchase. Any such notice of withdrawal must specify the name of the tendering shareholder, the number of Shares to be withdrawn and the name of the registered holder of the Shares. If certificates for Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, before the release of the certificates, the tendering shareholder must also submit the serial numbers shown on the particular certificates for Shares to be withdrawn and the signature(s) on the written notice of withdrawal must be guaranteed by an Eligible Institution (as defined in the Offer to Purchase), except in the case of Shares tendered for the account of an Eligible Institution. If a shareholder has used more than one Letter of Transmittal or has otherwise tendered Shares in more than one group of Shares, the shareholder may withdraw Shares using either separate written notices of withdrawal or a combined written notice of withdrawal, so long as the information specified above is included. If Shares have been tendered pursuant to the procedures for book-entry transfer described in the Offer to Purchase, the written notice of withdrawal must also specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares and otherwise comply with the Book-Entry Transfer Facility’s procedures.

The Company will decide, in its sole discretion, all questions as to the form and validity, including time of receipt, of notices of withdrawal, and each such decision will be final and binding on all parties absent a finding to the contrary by a court of competent jurisdiction. None of the Company, its Board of Directors, BofA Securities, Inc. and BMO Capital Markets Corp. (collectively, the “Dealer Managers”), Computershare Trust Company, N.A., as the Depositary, Georgeson LLC, as the information agent (the “Information Agent”), or any other person will be under any duty to give notification of any defects or irregularities in tenders or any notice of withdrawal, nor will any of the foregoing incur any liability for failure to give any such notification.

The Company believes that the repurchase of Shares pursuant to the Offer is a prudent use of its financial resources that will allow the Company to return value to the Company’s shareholders and that a prompt deployment of its investable cash for this purpose is in the best interests of its shareholders. The Offer provides a mechanism for completing the Company’s sizeable repurchase of Shares more rapidly than would be possible through open market repurchases.

The modified Dutch auction tender offer set forth in the Offer to Purchase provides the Company’s shareholders with the opportunity to tender all or a portion of their Shares and thereby receive a return of some or all of their investment in the Company, if they so elect. The Offer also provides the Company’s shareholders who are the registered owners of their Shares with an efficient way to sell their Shares without incurring brokerage fees or commissions associated with open market sales. Where Shares are tendered by the registered owner of those Shares directly to the Depositary, the sale of those Shares in the Offer will permit the tendering shareholder to avoid the usual transaction costs associated with open market transactions. However, shareholders who hold Shares through nominees are urged to consult their nominees to determine whether transaction costs may apply. If the Company completes the Offer, shareholders who do not participate in the Offer will automatically increase their relative percentage ownership interest in the Company and its future operations at no additional cost to them. These shareholders will also bear the attendant risks and rewards associated with owning equity securities of the Company.

Generally, if you are a U.S. Holder (as defined in the Offer to Purchase), your receipt of cash from the Company in exchange for the Shares that you tender will be a taxable transaction for U.S. federal income tax purposes. The cash you receive for your tendered Shares will generally be treated for U.S. federal income tax purposes either as consideration received in respect of a sale or exchange of the Shares purchased by the Company or as a distribution from the Company in respect of Shares. See the Offer to Purchase for a more detailed discussion of the tax treatment of the Offer. The Company urges you to consult your own tax advisor as to the particular tax consequences to you of the Offer.

 

4


If you are a Non-U.S. Holder (as defined in the Offer to Purchase), because it is unclear whether the cash you receive in connection with the Offer will be treated (i) as proceeds of a sale or exchange or (ii) as a distribution, the Depositary or other applicable withholding agent may treat such payment as a dividend distribution for withholding purposes. Accordingly, if you are a Non-U.S. Holder, you may be subject to withholding on payments to you at a rate of 30% of the gross proceeds paid, unless you establish an entitlement to a reduced or zero rate of withholding by timely completing, under penalties of perjury, the applicable Form W-8. See the Offer to Purchase for a more detailed discussion of the tax treatment of the Offer. The Company urges you to consult your own tax advisor as to the particular tax consequences to you of the Offer.

The Company’s Board of Directors has authorized the Company to make the Offer. However, none of the Company, the members of its Board of Directors, the Dealer Managers, the Depositary or the Information Agent makes any recommendation to any shareholder as to whether to tender or refrain from tendering Shares or as to the purchase price or purchase prices at which any shareholder may choose to tender Shares. None of the Company, the members of its Board of Directors, the Dealer Managers, the Depositary or the Information Agent has authorized any person to make any recommendation as to whether any shareholder should tender or refrain from tendering Shares or as to the purchase price or purchase prices at which any shareholder may choose to tender Shares. Shareholders should carefully evaluate all information in the Offer to Purchase and in the Letter of Transmittal and should consult their own financial, legal and tax advisors. Shareholders must make their own decision as to whether to tender their Shares and, if so, how many Shares to tender and the purchase price or purchase prices at which they will tender them. In doing so, a shareholder should read carefully the information in the Offer to Purchase and in the Letter of Transmittal before making any decision with respect to the Offer.

The payment of dividends or distributions in the future will be subject to the requirements of the laws of the State of Ohio and the discretion of our Board of Directors. Any dividend payment must be approved by the Board of Directors. The declaration of any future cash dividends and, if declared, the amount of any such dividends, will depend upon general business conditions, our financial condition, our earnings and cash flow, our capital requirements, financial covenants and other contractual restrictions on the payment of dividends or distributions. There can be no assurance that any dividends or distributions will be declared or paid in the future.

The information required to be disclosed by Rule 13e-4(d)(1) of the Securities Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is incorporated herein by reference. The Company is also filing with the SEC an Issuer Tender Offer Statement on Schedule TO, which includes additional information relating to the Offer.

Copies of the Offer to Purchase and the Letter of Transmittal are being mailed to record holders of Shares, including brokers, dealers, commercial banks and trust companies whose names, or the names of whose nominees, appear on the Company’s shareholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing for subsequent transmittal to beneficial owners of Shares. The Offer is explained in detail in those materials.

Questions or requests for assistance may be directed to the Information Agent or the Dealer Managers at their respective addresses and telephone numbers set forth below. Copies of the Offer to Purchase, the Letter of Transmittal and other related materials will be furnished promptly by the Information Agent at the Company’s expense. Shareholders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer.

 

5


The Depositary for the Offer is:

Computershare Trust Company, N.A.

The Information Agent for the Offer is:

Georgeson LLC

1290 Avenue of the Americas, 9th Floor

New York, NY 10104

Call Toll Free: (888) 206-5896

The Dealer Managers for the Offer are:

 

BofA Securities, Inc.

One Bryant Park, 8th Floor
New York, New York 10036
Call Toll-Free: (888) 803-9655

 

BMO Capital Markets Corp.

151 W 42nd Street, 32nd Floor
New York, New York 10036

Call: (212) 702-1101

June 8, 2023

 

6

Exhibit (a)(6)

Designer Brands Inc. Announces Commencement of Tender Offer to Repurchase Up to $100 Million of its Class A Common Shares

COLUMBUS, Ohio, June 8, 2023—Designer Brands Inc. (NYSE: DBI) (the “Company” and “Designer Brands”), one of the world’s largest designers, producers, and retailers of footwear and accessories, today announced that it has commenced a modified “Dutch Auction” tender offer to repurchase up to $100 million in value of shares of its Class A common shares at a price of not less than $7.00 per share and not more than $8.00 per share, less any applicable withholding taxes and without interest. The number of shares proposed to be purchased in the tender offer (at a minimum purchase price of $7.00 per share) represents approximately 25% of the Company’s currently outstanding Class A common shares. The closing price per share of the Company’s Class A common shares on the New York Stock Exchange on Wednesday, June 7, 2023, the last full trading day prior to the commencement of the tender offer, was $7.21 per share. The tender offer is being made in accordance with the terms and subject to the conditions described in the offer to purchase, the related letter of transmittal and other related tender offer materials, as each may be amended or supplemented from time to time. Designer Brands intends to enter into a term loan agreement for $135 million to be used principally to fund the tender offer (the “Financing Contingency”), with the remaining availability to be used for general corporate purposes.

The tender offer will expire on Friday, July 7, 2023 at 12:00 Midnight, at the end of the day, New York City time, unless the tender offer is extended or terminated by the Company. Tenders of shares must be made prior to the expiration of the tender offer and may be withdrawn at any time prior to the expiration of the tender offer, in each case in accordance with the procedures described in the offer to purchase, the related letter of transmittal and other related tender offer materials that are being distributed to shareholders.

On the terms and subject to the conditions of the tender offer, holders of Class A common shares will have the opportunity to tender some or all of their Class A common shares at a price or any number of prices contained within the price range established by the Company. Based on the number of shares duly tendered and the prices specified by the tendering shareholders, the Company will determine the lowest price per share within the range that will enable it to buy up to $100 million of its Class A common shares or a lower amount if the offer is not fully subscribed. If shareholders properly tender Class A common shares greater than $100 million in value at the price determined, the Company will purchase Class A common shares tendered by those shareholders on a pro rata basis, subject to the “odd lot” and conditional tender offer provisions described in the offer to purchase. In accordance with the rules of the Securities and Exchange Commission, the Company also reserves the right to purchase up to an additional 2% of its outstanding Class A common shares pursuant to and without amending or extending the tender offer.

All Class A common shares accepted for payment will be purchased at the same purchase price, regardless of whether any shareholder tendered such shares at a lower price within the range. Holders of Class A common shares will receive the purchase price in cash, less any applicable withholding taxes and without interest, for shares properly tendered (and not withdrawn) promptly after the expiration of the tender offer. All shares tendered at prices above the purchase price will not be purchased and will be returned promptly to the tendering shareholders. The tender offer is not contingent on any minimum number of shares being tendered. However, the tender offer is subject to a number of other conditions specified in the offer to purchase, including the Financing Contingency. The Company’s executive officers and directors, including Jay L. Schottenstein, the Executive Chairman of our Board of Directors, have informed the Company that they do not intend to tender shares in the offer.


BofA Securities, Inc. and BMO Capital Markets Corp. will serve as the dealer managers for the tender offer. Questions concerning the tender offer may be directed to BofA Securities, Inc. at (888) 803-9655 or BMO Capital Markets Corp. at (212) 702-1101. Georgeson LLC will serve as information agent for the tender offer and Computershare Trust Company, N.A. will serve as depositary for the tender offer. For more information about the tender offer, please contact Georgeson LLC at (888) 206-5896.

Neither Designer Brands’ management, nor any of its Board, executive officers, the Dealer Managers, the Information Agent or the depositary is making any recommendation to shareholders as to whether to tender or refrain from tendering their shares in the tender offer. Shareholders must decide how many shares they will tender, if any, and the price within the stated range at which they will tender their shares. Shareholders should consult their financial and tax advisors in making this decision.

HOLDERS OF CLASS A COMMON SHARES OF DESIGNER BRANDS ARE URGED TO READ THE TENDER OFFER STATEMENT (INCLUDING THE OFFER TO PURCHASE, LETTER OF TRANSMITTAL AND RELATED TENDER OFFER DOCUMENTS) WHEN IT BECOMES AVAILABLE AND ANY OTHER DOCUMENTS FILED BY DESIGNER BRANDS WITH THE SECURITIES AND EXCHANGE COMMISSION BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION CONCERNING THE TERMS OF THE TENDER OFFER.

Holders of Class A common shares will be able to obtain the tender offer materials free of charge on the Company’s website at investors.designerbrands.com or the Securities and Exchange Commission’s website at www.sec.gov. In addition, holders of Class A common shares may request copies of the Tender Offer Statement, the Offer to Purchase, related Letter of Transmittal and other filed tender offer documents free of charge by contacting Georgeson LLC, the Information Agent for the tender offer, by telephone toll-free at (866) 391-6921 or in writing to 1290 Avenue of the Americas, 9th Floor New York, NY 10104.

About Designer Brands

Designer Brands is one of the world’s largest designers, producers, and retailers of the most recognizable footwear brands and accessories, transforming and defining the footwear industry by inspiring self-expression across every facet of its enterprise. Through its portfolio of world-class owned brands, led by the industry-setting Vince Camuto brand, Designer Brands delivers on-trend footwear and accessories through its robust direct-to-consumer omni-channel infrastructure, featuring a billion-dollar digital commerce business and nearly 640 stores across the U.S. and Canada. Its retailing operations under the DSW Designer Shoe Warehouse and The Shoe Company banners deliver current, in-line footwear and accessories from most of the largest national brands in the industry and hold leading market share positions in key product categories across Women’s, Men’s and Kid’s in the U.S. and Canada. Designer Brands also distributes its owned brands through select wholesale relationships while leveraging its design and sourcing expertise to build private label product for national retailers. Designer Brands is also committed to being a difference maker in the world, taking steps forward to advance diversity, equity, and inclusion in the footwear industry and supporting our global community and the health of our planet through donating more than six million pairs of shoes to the global non-profit Soles4Souls. More information can be found at www.designerbrands.com.


Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

Certain statements in this press release, other than statements of historical fact, constitute forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may include, without limitation, statements about the tender offer, including the value of Class A common shares to be offered to purchase in the tender offer, the ability to consummate the expected $135 million term loan agreement under acceptable terms, and whether the tender offer is actually consummated. You can identify these forward-looking statements by the use of forward-looking words such as “outlook,” “could,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “would,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” or the negative version of those words or other comparable words. These statements are based on the Company’s current views and expectations and involve known and unknown risks, uncertainties, and other factors, including those included in the Company’s latest Annual Report on Form 10-K or other reports filed or made with the Securities and Exchange Commission, that may cause actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. All forward-looking statements speak only as of the time when made. The Company undertakes no obligation to update or revise the forward-looking statements included in this press release to reflect any future events or circumstances.

Exhibit 107

Calculation of Filing Fees Table

SCHEDULE TO

(Form Type)

Designer Brands Inc.

(Exact Name of Registrant as Specified in its Charter)

Table 1 - Transaction Valuation

 

       
    

    Transaction    

Valuation

 

Fee

    Rate    

 

Amount of    

Filing Fee

       

Fees to Be Paid

  $100,000,000 (1)   0.0001102   $11,020.00 (2)
       

Fees Previously Paid

       
       

Total Transaction Valuation

  $100,000,000 (1)      
       

Total Fees Due for Filing

      $11,020.00
       

Total Fees Previously Paid

      $—
       

Total Fee Offsets

      $—
       

Net Fee Due

          $11,020.00

 

  (1)

Estimated solely for purposes of calculating the amount of the filing fee. The calculation of the Transaction Valuation assumes that an aggregate value of $100,000,000 will be acquired pursuant to this offer.

  (2)

The amount of the filing fee, calculated in accordance with Rule 0-11(b) of the Securities Exchange Act of 1934, as amended, equals $110.20 per $1,000,000 of the aggregate amount of the Transaction Valuation (or 0.01102% of the aggregate Transaction Valuation). The Transaction Valuation set forth above was calculated for the sole purpose of determining the filing fee and should not be used for any other purpose.