designer brands inc.; rule 14a-8 no-action letter...1932 madison avenue, #1111 [email protected]...

February 10, 2020

nm DESIGNER BRANDS

By email to [email protected]

U.S. Securities and Exchange Commission Division of Corporation Finance Office of Chief Counsel 100 F Street, N.E. Washington, D.C. 20549

Re: Designer Brands Inc. - Withdrawal of No-Action Request, Dated February 7, 2020 Regarding the Potential Shareholder Proposal of Pro Cap NYC LLC

Ladies and Gentlemen:

I am writing on behalf of Designer Brands Inc., an Ohio corporation (the "Company"), in reference to the letter, dated February 7, 2020 (the "No Action Request"), pursuant to which the Company requested that the Staff of the Division of Corporation Finance (the "Staff') of the Securities and Exchange Commission concur with the Company's view that the potential shareholder proposal and supporting statement (the "Proposal") submitted by Pro Cap NYC LLC (the "Proponent") may be excluded from the proxy materials to be distributed by the Company in connection with its 2020 annual meeting of shareholders.

Attached hereto as Exhibit A is an e-mail communication, dated February 7, 2020 (the "Proponent's Withdrawal Communication"), from the Proponent stating that the Proponent "never meant to convey the idea that [they] were submitting a Shareholder Proposal." In reliance upon the Proponent's Withdrawal Communication, the Company hereby withdraws the No-Action Request on the basis that the Proposal is not a shareholder "proposal" within the meaning of Rule 14a-8(a) of the Securities Exchange Act of 1934.

If you have any questions with respect to this matter, please contact me at 614-872-1473 or email me at [email protected].

Sincerely,

Michelle Krall Senior Vice President, General Counsel, Chief Compliance Officer and Secretary

Designer Brands I 810 DSW Drive I Columbus, Ohio 43219 DSW Designer Shoe Warehouse I The Shoe Company I Shoe Warehouse I Affiliated Business Group I Camuto Group

www.DesignerBrands.com

U.S. Securities and Exchange Commission Division of Corporation Finance Office of Chief Counsel February 10, 2020 of3

cc: Herbert A. Denton Pro Cap NYC LLC 1932 Madison Avenue, #1111 [email protected]



U.S. Securities and Exchange Commission Division of Corporation Finance Office of Chief Counsel February 10, 2020 of 3

EXHIBIT A

Proponent's Withdrawal Communication

See attached.



Sarah Rhodes

From: Sent: To: Cc: Subject:

Sarah

Bert Denton <[email protected]> Friday, February 07, 2020 4:57 PM Sarah Rhodes Michelle Krall; Christina McIntyre Re: Designer Brands Inc. - Correspondence

EXTERNAL SENDER

Many thanks for your response; however, we never meant to convey the idea that we were submitting a Shareholder Proposal. We only meant to afford the Directors the opportunity to seize the lead to de-classify the Board in 2020 rather than leaving us to our druthers in 2021 to take the lead away from the Board in this regard.

We have contacted three of your Company's top shareholders with 30.58% of the votes along with Institutional Shareholder Services. This means it does not require much imagine to see a Shareholder Proposal would be a slam-dunk.

We have let the Indexers know that we will WITH HOLD our vote for the Class of 2020 to indicate our position as directly as possible without forming a Form 13-0 Group or soliciting any proxies.

It is up to the Board to understand that this 30% is permanent and growing voting bloc; that it represents the 'swing vote' in any proxy contest; and, most importantly, these three Index Funds will not vote to change the majority of your Board in favor of a 'corporate raider,' a shareholder activist; or a corporate adventurer. Larry Fink is running $7 trillion and does not care if your Company's share price goes up or down as it does not move BlackRock's needle one bit. Mr. Fink does care to the nth degree not to be hauled down to Washington in front of Congress a la Zuckerberg (running $7 trillion is an attention getter there.).

We will send you a Ten Point Letter that details the above.

Finally, we sincerely hope that our point hits home and, that in all the other areas of your respective directors accomplished lives, they adopted "Best Practices' and may do so once again as fiduciaries for the shareholders especially as this issue will not go away.

Bert

From: Sarah Rhodes <[email protected]> Sent: Friday, February 7, 2020 4:10 PM To: Bert Denton Cc: Michelle Krall; Christina McIntyre Subject: FW: Designer Brands Inc. - Correspondence

Good afternoon:

1

Please see attached and below for correspondence sent to the SEC in connection with the letter sent by you referenced in the attached. The attached is also being sent to you via FedEx.

Thank you, Sarah Rhodes

Sarah Rhodes I Assistant Corporate Counsel Designer Brands 810 DSW Drive I Columbus, OH I 43219 614.872.1658 I www.designerbrands.com

CONFIDENTIALITY NOTICE: This email message is intended only for the person or entity to which it is intended to be addressed and may contain confidential and/or privileged material. Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, please contact the sender by reply email and destroy all copies of the original message.

From: Sarah Rhodes Sent: Friday, February 07, 2020 4:08 PM To: [email protected] Cc: Michelle Krall <[email protected]>; Christina McIntyre <[email protected]> Subject: Designer Brands Inc. - Correspondence

Good afternoon:

Please find attached correspondence from Designer Brands Inc. The attached letter is also simultaneously being sent via FedEx.

If you have any questions or require additional information, please contact Michelle Krall at 614-872-1473 or [email protected].

Thank you, Sarah Rhodes

Sarah Rhodes I Assistant Corporate Counsel Designer Brands 810 DSW Drive I Columbus, OH I 43219 614.872.1658 I www.designerbrands.com

CONFIDENTIALITY NOTICE: This email message is intended only for the person or entity to which it is intended to be addressed and may contain confidential and/or privileged material. Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, please contact the sender by reply email and destroy all copies of the original message.

2

February 7, 2020

DESIGNER BRANDS

By email to [email protected]

U.S. Securities and Exchange Commission Division of Corporation Finance Office of Chief Counsel 100 F Street, N.E. Washington, D.C. 20549

Re: Designer Brands Inc. - Potential Shareholder Proposal Submitted by Pro Cap NYCLLC

Ladies and Gentlemen:

I am writing on behalf of Designer Brands Inc., an Ohio corporation (the "Company"), pursuant to Rules 14a-8(e)(2), 14a-8(f) and 14a-8(j)(l) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), to request that the Staff of the Division of Corporation Finance (the "Staff') of the Securities and Exchange Commission concur with our view that, for the reasons stated below, the Company may exclude the potential shareholder proposal and supporting statement (the "Proposal") submitted by Pro Cap NYC LLC (the "Proponent") from the proxy materials to be distributed by the Company in connection with its 2020 annual meeting of shareholders (the "2020 proxy materials"). The Company also requests a waiver of the 80-day filing requirement set forth in Rule 14a-8(j) for good cause.

In accordance with Staff Legal Bulletin No. 14D (November 7, 2008), this letter is being submitted by email to [email protected]. A copy of this letter also is being sent by email to the Proponent as notice of the Company's intent to omit the Proposal from the Company's 2020 proxy materials.

THE PROPOSAL

The Proposal states:

"Request to Declassify

In reviewing Designer Brands Inc.' s corporate governance, we bring to your attention its classified Board By-Law. This practice still remains among just 1135 of the companies in the Russel 3000 Index. However, the recognized arbiter of such materials, Institutional Shareholder Services ("ISS"), does not consider a classified Board By-Law among the



U.S. Securities and Exchange Commission Division of Corporation Finance Office of Chief Counsel February 7, 2020 Page 2 of7

'best practices' in corporate governance. In tum, this is reflected negatively in Designer Brand Inc.' s Corporate Governance score of 9 from ISS.

Accordingly, we respectfully request that Designer Brands Inc.'s Board review and consider changing this By-Law, so that all directors are elected annually by the shareholders; this is our sole agenda.

De-Classification Rationale

► Enhance its ISS governance score towards 'best practices'. ► Increase the Board's accountability to its largely sophisticated shareholder base.

Please note that ISS, which advises institutional investors and, in many cases, votes the shares controlled by institutional investors, does not normally vote off a majority of a Board in favor of a dissident shareholder's alternative slate. In other words, Designer Brands Inc. already has, expect in extraordinary circumstances, a classified Board."

The Proposal was dated December 5, 2019, postmarked on January 27, 2020, and received by the Company on February 3, 2020. A copy of the Proponent's submission, including the Proposal, is attached hereto as Exhibit A.




BASIS FOR EXCLCUSION

The Company believes the Proposal may be excluded from the 2020 proxy materials pursuant to Rule 14a-8(e)(2) because the Proposal was received at the Company's principal executive offices after the deadline for submitting shareholder proposals to the Company.

ANALYSIS

I. Because the Proposal was received at the Company's principal executive offices on February 3, 2020, approximately 51 days after the December 14, 2019 deadline to submit shareholder proposals, the Proposal may be excluded from the Company's 2020 proxy materials under Rule 14a-8(e)(2).

The Company may exclude the Proposal under Rule 14a-8(e)(2) of the Exchange Act because the Company did not receive the Proposal at its principal executive offices before the deadline has passed for submitting shareholder proposals to the Company. Rule 14a-8(e) provides that a proposal submitted with respect to a company's regularly scheduled annual meeting "must be received at the company's principal executive offices not less than 120 calendar days before the date of the company's proxy statement released to shareholders in connection with the previous year's annual meeting." Rule 14a-8(f) permits a company to exclude a shareholder proposal that does not comply with the rule's procedural requirements, including if a proponent fails to submit a proposal by a company's properly determined deadline.

The proxy statement for the Company's 2019 annual meeting was released to shareholders on April 12, 2019. In accordance with the 120-calendar day rule, the deadline for submitting shareholder proposals for inclusion in the 2020 proxy materials was determined to be December 14, 2019, and that date was specified in the proxy statement for the Company's 2019 annual meeting. Although the Proposal is dated December 5, 2019, it was postmarked January 27, 2019 and was not received at the Company's principal executive offices until February 3, 2020, which is 51 days after the deadline. The Staff has repeatedly concurred that a proposal may be excluded in its entirety under Rule 14a-8(e)(2) when it is received after the applicable deadline for submitting a shareholder proposal. See, e.g., Caterpillar Inc. (Apr. 4, 2019); Comcast Corporation (Apr. 4, 2019); HollyFrontier Corporation (Feb. 11, 2019); DTE Energy Company (Dec. 18. 2018); Sprint Corporation (Aug. 1, 2018); PepsiCo Inc. (Jan. 3, 2014); Newell Rubbermaid Inc. (Jan. 24, 2012).

The December 14, 2019 deadline was calculated in accordance with Rule 14a-8(e)(2) and Staff Legal Bulletin No. 14 (July 13, 2001) ("SLB 14"), which provides that a shareholder proposal deadline should be calculated by starting with the release date disclosed in the previous year's proxy statement, increase the year by one and count back 120 days. In accordance with this calculation method, December 14, 2019 is 120 days before the anniversary of the release date disclosed in the Company's 2019 proxy statement.




The exception to Rule 14-8(e)(2) for meetings that have been changed by more than 30 days from the date of the prior year's meeting does not apply in this instance. The Company's 2019 annual meeting of shareholders was held on May 23, 2019, and the 2020 meeting is scheduled for June 9, 2020. Because the 2020 annual meeting has not been changed by more than 30 days from the date of the 2019 annual meeting, the December 14, 2019 deadline for shareholder proposals set forth in the Company's 2019 proxy statement remains effective.

In accordance with Rule 14a-8(f)(l) and Section C.6.c of Staff Legal Bulletin No. 14 (July 12, 2001), the Company has not provided the Proponent with notice of the Proposal's deficiency because the deficiency cannot be remedied. As stated in Rule 14a-8(f)(l), a company need not provide ... notice of a deficiency if the deficiency cannot be remedied, such as if the [proponent] fail[s] to submit a proposal by the company's properly determined deadline. Accordingly, the Company is not required to provide notice under Rule 14a-8(f)(l) in order for the Proposal to be excluded under Rule 14a-8(e)(2).

The Company therefore requests that the Staff concur that the Proposal may properly be excluded from the 2020 proxy materials because it was not received at the Company's principal executive offices within the timeframe required by Rule 14a-8(e)(2).

II. Because the Proposal was not timely received by the Company prior to the deadline for submission of shareholder proposals, the Company respectfully requests that the Staff waive the SO-day filing requirement set forth in Rule 14a-S(j) for good cause.

The Company further requests that the Staff waive the 80-day filing requirement set forth in Rule 14a-8(j), which requires that, if a company "intends to exclude a proposal from its proxy materials, it must file its reasons with the Commission no later than 80 calendar days before it files its definite proxy statement and form of proxy with the Commission." However, Rule 14a-8(j)(l) allows the Staff, in its discretion, to permit a company to make its submission later than 80 days before the filing of its definitive proxy statement if the company demonstrates good cause for missing the deadline.

The Company plans to file its definitive proxy statement on or about April 24, 2020, which would result in a deadline of February 4, 2020 to submit its reasons for excluding the Proposal. As stated above, the Company did not receive the Proposal until February 3, 2020, a mere one day prior to the filing deadline under Rule 14a-8(j). However, the Staff has consistently found good cause to waive the 80-day requirement where the untimely submission of a proposal prevents a company from satisfying the 80-day provision. See Staff Legal Bulletin No. 14B (Sept. 15, 2004) (indicating that the "most common basis for the company's showing of good cause is that the proposal was not submitted timely and the company did not receive the proposal until after the 80-day deadline had passed"); see also American Express Co. (Mar. 14, 2014), Sterling Financial Corp. (Mar. 27, 2013), Barnes & Noble Inc. (June 3, 2008), DTE Energy Co. (Mar. 24, 2008), Alcoa Inc. (Feb 25, 2008), General Electric Co. (Mar. 7, 2006), and General Electric Co. (Feb. 10, 2005) (each waiving the 80-day requirement when the proposal was received by the company after the submission deadline).




Accordingly, because the Proposal was not received until February 3, 2020, one day prior to the 80-day filing deadline, the Company was not able to file its reasons for exclusion until after the deadline had passed. The Company has filed this no-action request with its reasons for exclusion as quickly as possible under the circumstances and within four days of its receipt the Proposal. Therefore, the Company believes that it has good cause for its inability to meet the 80-day requirement, and the Company respectfully requests that the Staff waive the 80-day requirement with respect to this letter.




CONCLUSION

The Company believes the Proposal may be omitted in its entirely from the Company's 2020 proxy materials pursuant to Rule 14a-8(e)(2) because the Proponent failed to timely submit the Proposal. Additionally, the 80-calendar day requirement imposed by Rule 14a-8(j)(l) should be waived in this instance because the Proposal was not received until one day prior to the filing deadline.

Accordingly, the Company respectfully requests the concurrence of the Staff that it will not recommend enforcement action against the Company if the Company excludes the Proposal in its entirely from its 2020 proxy materials.

If you have any questions with respect to this matter, please contact me at 614-872-1473 or email me at [email protected].

Sincerely,

Michelle Krall Senior Vice President, General Counsel, Chief Compliance Officer and Secretary

cc: Herbert A. Denton Pro Cap NYC LLC 1932 Madison Avenue, #1111 [email protected]




EXHIBIT A

Proposal

See attached.



Ms. Carolee Lee Designer Brands Inc. c/ o Corporate Secretary 810 DSW Drive Columbus, Ohio 43219

Dear Ms. Carolee Lee,

Pro Cap NYC Uc 1392 Madison Avenue #111

New York, NY 10029 +1 • 347 • 215• 1406

December 5th • 2019

RE: Corporate Governance Best Practices

Request to Declassify

In reviewing Designer Brands lnc.'s corporate governance, we bring to your attention its classified Board By-Law. This practice still remains among just 1135 of the companies in the Russell 3000 Index. However, the recognized arbiter of such matters, Institutional Shareholder Services ("ISS"), does not consider a classified Board By-Law among the 'best practices· in corporate governance. In turn, this is reflected negatively in Designer Brands Inc. 's Corporate Governance score of 9 from 155.

Accordingly, we respectfully request that Designer Brands Inc. 's Board review and consider changing this By-Law, so that all directors are elected annually by the shareholders; this is our sole agenda.

De-Classification Rationale

> Enhance its ISS governance score towards best practices·.

> Increase the Board's accountability to its largely sophisticated shareholder base.

Please note that 1S5, which advises institutional investors and, in many cases, votes the shares controlled by institutional investors, does not normally vote off a majority of a Board in favor of a dissident shareholder's alternative slate. In other words, Designer Brands Inc. already has, except in extraordinary circumstances, a classified Board.

Background of Pro Cap NYC lie ("Pro Cap")

Pro Cap is my third career iteration of applying corporate governance on behalf of shareholders ~ previously head of Jefferies Group's M&A Department and then President of Providence Capital, Inc. (1985 Present.) I have personally led dozens of proxy contests as well as precursors including Time Warner, USX-Marathon, COMSAT, Lockheed and Campbell Soup on behalf of shareholders from CalPERS to the Dorrance family to Carl Icahn.

The most relevant experience was successfully causing seven out of seven companies to redeem, rescind, or modify their respective 'poison pills' in 2002. Now, just 16 poison pills exist (See ISS's article "Will Bert Kill the Pill?)

Moreover, I have served on ten Boards of Directors and witnessed the alacrity of my fellow directors to enhance governance practices in all ten companies. Consequently, J am encouraged to believe that upon review and due consideration Designer Brands Inc. 's Board will declassify itself prior to its 2020 Annual Meeting of Shareholders.

Thank you.

Sincerely,

Herbert A. Denton President Pro Cap NYC llc [email protected]

Cc: B. McNew, Cooch and Taylor P.A.

·, '-

Pro Cap NYC lie 1392 Madison Avenue #111 New York, NY 10029

Ma.c::an.lMIM Designer Brands Inc. c/o Corporate Secretary 810 DSW Drive Columbus, Ohio 43219

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