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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT
PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 8)
THE UNITED STATES SHOE CORPORATION
(Name of Subject Company)
--------------
LUXOTTICA GROUP S.P.A.
LUXOTTICA ACQUISITION CORP.
(Bidders)
--------------
COMMON SHARES, WITHOUT PAR VALUE
(INCLUDING THE ASSOCIATED PREFERENCE SHARE PURCHASE RIGHTS)
(Title of Class of Securities)
912605102
(CUSIP Number of Class of Securities)
CLAUDIO DEL VECCHIO
44 HARBOR PARK DRIVE
PORT WASHINGTON, NEW YORK 11050
(516) 484-3800
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Bidders)
WITH A COPY TO:
JONATHAN GOLDSTEIN
WINSTON & STRAWN
175 WATER STREET
NEW YORK, NEW YORK 10038
(212) 269-2500
CALCULATION OF FILING FEE
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TRANSACTION VALUATION* $1,201,654,248 AMOUNT OF FILING FEE** $240,330.85
--------------------------------------------------------------------------------
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* Pursuant to, and as provided by, Rule 0-11(d), this amount is based upon the
purchase of 50,068,927 Common Shares of the Subject Company and the
associated Rights at $24.00 cash per share, which is equal to the sum of (i)
the number of Shares outstanding as reported in the Quarterly Report on Form
10-Q of the Subject Company for the quarter ended October 29, 1994 and (ii)
the number of Shares subject to outstanding options as reported in the Annual
Report on Form 10-K of the Subject Company for the fiscal year ended January
29, 1994.
** 1/50 of 1% of Transaction Valuation.
X Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and
identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form or
Schedule and the date of its filing.
Amount Previously Paid: $240,330.85
Form or Registration No.: Schedule 14D-1
Filing Party: Luxottica Group S.p.A.; Luxottica Acquisition Corp.
Date Filed: March 3, 1995
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Page 1 of 8 Pages
The Exhibit Index is located on Page 6
<PAGE>
Luxottica Group S.p.A. and Luxottica Acquisition Corp. hereby amend and
supplement their Tender Offer Statement on Schedule 14D-1, filed on March 3,
1995, (as amended, the "Schedule 14D-1"), with respect to the Offer to Purchase
all of the outstanding Common Shares, without par value, of The United States
Shoe Corporation, including the associated preference share purchase rights,
as set forth in this Amendment No. 8. Unless otherwise indicated, all
capitalized terms used but not defined herein shall have the meanings assigned
to such terms in the Schedule 14D-1.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY
Item 3(b) is hereby amended to add the following:
On March 23, 1995, Bannus B. Hudson, President and Chief Executive Officer
of the Company, sent a letter to Claudio Del Vecchio, a Managing Director of
Parent, stating: "If Luxottica is interested in pursuing a transaction
in which the value received by shareholders of U.S. Shoe would
be enhanced, we would be prepared to explore that with you. As with all other
interested parties, we would be prepared to share with Luxottica certain
non-public information on the condition that Luxottica executes and delivers
an appropriate confidentiality agreement."
On March 24, 1995, the Company's counsel delivered to Parent's counsel a
form of confidentiality agreement that continues to be unacceptable to Parent
because of the restrictions it would impose on Parent's conduct of the Offer,
the solicitation of agent designations relating to the Special Meeting, the
solicitation of proxies for the Section 831 Approval and, generally, Parent's
right to communicate with the Company and its shareholders.
ITEM 10. ADDITIONAL INFORMATION
Item 10 is hereby amended to add the following:
(e) On March 22, 1995, the Company and the other defendants in the Ohio
Litigation filed with the District Court an Answer and Counterclaim (the
"Answer and Counterclaim") for preliminary and permanent injunction denying
the material allegations in the Second Amended Complaint filed by the
Luxottica Plaintiffs (the "Second Amended Complaint") and alleging, among
other things, that the Schedule 14D-1 and the Offer to Purchase contain false
and misleading statements and non-disclosures that violate the Exchange Act
in the following respects, among others, (i) that these documents fail to
disclose alleged purposes of the Offer to cause Lenscrafters, Inc., a
wholly-owned subsidiary of the Company, to shift its sourcing of merchandise
from the Far East to European suppliers, including Parent, and prevent
Lenscrafters, Inc. from obtaining a certain market share in North America,
(ii) that the Schedule 14D-1 and the Offer to Purchase fail to adequately
disclose the corporate organization of Parent and its subsidiaries, including
the Purchaser, and that Avant-Garde Optics, Inc. may acquire certain Shares
purchased by the Purchaser pursuant to the Offer, (iii) that the Schedule
14D-1 fails to disclose the identity of Mr. Leonardo Del Vecchio, the Chairman
of the Board and Chief Executive Officer of Parent, as a "controlling person"
of Parent within the meaning of the Exchange Act, (iv) that the Schedule 14D-1
and the Offer to Purchase fail to disclose material facts pertaining to the
proposed financing for the Offer, including the identity of the actual
borrower under the Facility, the risk that the Financing contemplated by the
Facility may be challenged for noncompliance with the margin regulations
promulgated by the Board of Governors of the Federal Reserve System (the
"Board of Governors"), the amount of funds that may be borrowed under the
2
<PAGE>
Revolving Credit Facility to purchase Shares and the fact that the
documentation evidencing the Facility is subject to the approval of Credit
Suisse, (v) that the Schedule 14D-1 erroneously indicates that the Company's
agreement with Nine West regarding the disposition of the Company's footwear
division appears to be conditioned on financing and (vii) that the Offer to
Purchase fails to disclose that the Facility is subject to, and may not
satisfy, the requirements of Regulation U of the Board of Governors that limit
the amount of credit allowable for the purchase of "margin stock". The Answer
and Counterclaim further alleges that Parent's public announcements that it
established record dates for the Special Meeting and the execution of agent
designations were false and misleading and that Parent and the Purchaser
violated certain provisions of the Ohio Take-Over Act by failing to provide
certain information to the shareholders of the Company concerning, among other
things, the organization and operation of Parent and the Purchaser and any
plans or proposals of Parent and the Purchaser to liquidate the Company, sell
its assets or take certain actions with respect to the Company's employee
benefit plans or work force. The foregoing description of the Answer and
Counterclaim is qualified in its entirety by reference to the Answer and
Counterclaim filed as Exhibit (g)(7) hereto. The Luxottica Plaintiffs intend
to deny the material allegations set forth in the Answer and Counterclaim.
On March 22, 1995, the District Court issued an order denying the motion
of the Luxottica Plaintiffs to require the Company to obtain and produce a list
(the "NOBO list") of beneficial owners of Shares who do not object to the
disclosure of their name and address by the registered owner of such Shares to
the Company for the limited purpose of soliciting direct communication on
corporate matters. The order further provides, however, that in the event the
Company obtains a NOBO list it will so notify the Luxottica Plaintiffs and
allow such parties to inspect and copy such list. The foregoing description
of the order is qualified in its entirety by reference to the order of the
District Court filed as Exhibit (g)(8) hereto.
On March 23, 1995, the District Court issued an order permanently
enjoining the Luxottica Plaintiffs from making any public statement, including
any direct statement to shareholders of the Company, representing that such
parties have the ability to set either alone, separately or in conjunction
with one another and Claudio and Debra Del Vecchio, any record date in
connection with any meeting of the shareholders of the Company or any record
date for soliciting consents or agent designations for the purpose of calling
any special meeting of the Company's shareholders. The foregoing description
of the order is qualified in its entirety by reference to the order of the
District Court filed as Exhibit (g)(9) hereto.
On March 23, 1995, the District Court issued an order denying
the Company's motion to enjoin the Luxottica Plaintiffs from using the list of
shareholders of the Company previously provided to Avant-Garde Optics, Inc. in
connection with the proxy solicitations relating to the Section 831 Meeting and
the Special Meeting. The foregoing description of the order is qualified in its
entirety by reference to the order of the District Court filed as
Exhibit (g)(10) hereto.
On March 24, 1995, the Luxottica Plaintiffs filed a motion with the
District Court for leave to file a Third Amended Complaint (the "Third Amended
Complaint") that renews the allegations made in the Second Amended Complaint
and further seeks an order declaring that (i) the incumbent directors of the
Company have breached their fiduciary duties by failing to negotiate with
Parent and the Purchaser and taking certain actions with respect to the
Company's compensation and retirement plans and arrangements designed to
entrench existing management and increase the cost of acquiring the Shares,
(ii) the incumbent directors of the Company have violated Section 1701.76 of
the ORC by failing to hold a shareholder vote with respect to the proposed
sale of the Company's footwear operations to Nine West and the Company's
announced intention to sell or otherwise dispose of substantially all of
its remaining assets, (iii) the proposed sale of the Company's footwear
operations to Nine West may not be consummated without a vote of the
shareholders adopting an amendment to the Company's Articles and (iv) certain
disclosures made by the Company following the commencement of the Offer,
including disclosures in the Solicitation/Recommendation Statement on
Schedule 14D-9 filed by the Company with the Commission on March 16, 1995
(the "Schedule 14D-9") contain false and misleading statements that violate
the Exchange Act in certain respects, including, among others, the failure of
the Schedule 14D-9 to describe the estimated after-tax proceeds of the
proposed sale to Nine West and the manner in which such proceeds will be used
by the Company, the fact that certain schedules to the Company's agreement
with Nine West are omitted from the Schedule 14D-9 and the failure of the
Schedule 14D-9 to adequately disclose the Company's plans to auction off the
Company's businesses. The motion for leave to file a Third Amended Complaint
was granted by the District Court on March 27, 1995. The foregoing description
of the motion for leave to file a Third Amended Complaint is qualified in its
entirety by reference to the Third Amended Complaint filed as Exhibit (g)(11)
hereto.
3
<PAGE>
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS
Item 11 is hereby amended and supplemented by adding the following exhibits:
<TABLE>
<S> <C>
(a)(21) --Text of Press Release issued by Parent, dated March 24, 1995
(g)(7) --Answer of Defendents The United States Shoe Corporation, Joseph H. Anderer,
Philip E. Beekman, Gilbert Hahn, Jr., Roger L. Howe, Bannus B. Hudson, Lorrence
Kellar, Albert M. Kronick, Thomas Laco, Charles S. Mechem, Jr., John L. Roy
and Phyllis S. Sewell, and Counterclaim of Defendant The United States Shoe
Corporation Against Plantiffs for Preliminary and Permanent Injunction for
False and Misleading Statements in SEC Filings and Tender Offer Materials,
filed on March 22, 1995 by The United States Shoe Corporation and Named
Defendants in the United States District Court for the Southern District of
Ohio, Eastern Division, in the action entitled Luxottica Group S.p.A., et al.
------------------------------
v. The United States Shoe Corporation, et al. (C-2-95-244)
------------------------------------------
(g)(8) --Order issued on March 22, 1995 by the United States District Court for the
Southern District of Ohio, Eastern Division, in the action entitled Luxottica
---------
Group S.p.A., et al. v. The United States Shoe Corporation, et al. (C-2-95-244)
------------------- ------------------------------------------
(g)(9) --Order issued on March 23, 1995 by the United States District Court for the Southern
District of Ohio, Eastern Division, in the action entitled Luxottica Group S.p.A., et al.
------------------------------
v. The United States Shoe Corporation, et al. (C-2-95-244)
------------------------------------------
(g)(10) --Order issued on March 23, 1995 by the United States District Court for the Southern
District of Ohio, Eastern Division, in the action entitled Luxottica Group S.p.A., et al.
------------------------------
v. The United States Shoe Corporation, et al. (C-2-95-244)
------------------------------------------
(g)(11) --Motion for Leave to File a Third Amended Complaint filed on
March 24, 1995 by Luxottica Group S.p.A., Luxottica Acquisition
Corp. and Avant-Garde Optics, Inc. in the United States District
Court for the Southern District of Ohio, Eastern Division, in the
action entitled Luxottica Group S.p.A., et al. v. The United States
------------------------------ -----------------
Shoe Corporation, et. al. (C-2-95-244).
-------------------------
</TABLE>
------------
* Previously filed.
4
<PAGE>
SIGNATURES
After due inquiry and to the best of my knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.
LUXOTTICA GROUP S.P.A.
Dated: March 27, 1995 By: /s/ Claudio Del Vecchio
..............................
Claudio Del Vecchio
Managing Director
LUXOTTICA ACQUISITION CORP.
Dated: March 27, 1995 By: /s/ Claudio Del Vecchio
..............................
Claudio Del Vecchio
President
5
<PAGE>
EXHIBIT INDEX
<TABLE><CAPTION>
EXHIBIT PAGE
------- ----
<S> <C> <C>
(a)(1) --Offer to Purchase, dated March 3, 1995.................................... *
(a)(2) --Letter of Transmittal..................................................... *
(a)(3) --Notice of Guaranteed Delivery............................................. *
(a)(4) --Letter from the Dealer Manager to Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees........................................ *
(a)(5) --Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.............................................. *
(a)(6) --Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9....................................................... *
(a)(7) --Summary Advertisement as published in The Wall Street Journal on March 3,
1995...................................................................... *
(a)(8) --Text of Press Release issued by Parent, dated March 3, 1995............... *
(a)(9) --Preliminary Proxy Statement dated March 6, 1995 of Luxottica Group S.p.A.
and Luxottica Acquisition Corp. for the Special Meeting of Shareholders
under Section 1701.831 of the Ohio Revised Code of The United States Shoe
Corporation, together with the form of Proxy relating thereto, as filed
with the Securities and Exchange Commission on March 6, 1995 and
incorporated herein by reference.
(a)(10) --Preliminary Solicitation Statement dated March 7, 1995 of Luxottica Group
S.p.A. and Luxottica Acquisition Corp. to call a Special Meeting of
Shareholders of The United States Shoe Corporation, together with the form
of Appointment of Designated Agents relating thereto, as filed with the
Securities and Exchange Commission on March 7, 1995 and incorporated
herein by reference.
(a)(11) --Text of Press Release issued by Parent, dated March 9, 1995............... *
(a)(12) --Acquiring Person Statement of Parent and the Purchaser, dated March 3,
1995, pursuant to Section 1701.831 of the Ohio Revised Code, filed with
the Securities and Exchange Commission on March 10, 1995 as definitive
additional material pursuant to Section 14(a) of the Securities Exchange
Act of 1934, as amended, and incorporated herein by reference.
(a)(13) --Text of Press Release issued by Parent, dated March 10, 1995.............. *
(a)(14) --Text of Press Release issued by Parent, dated March 10, 1995.............. *
(a)(15) --Text of Press Release issued by Parent, dated March 14, 1995.............. *
(a)(16) --Text of Press Release issued by Parent, dated March 16, 1995.............. *
(a)(17) --Text of Press Release issued by Parent, dated March 17, 1995.............. *
(a)(18) --Text of Press Release issued by Parent, dated March 20, 1995.............. *
(a)(19) --Text of Press Release issued by Parent, dated March 21, 1995.............. *
(a)(20) --Definitive Proxy Statement dated March 21, 1995 of Luxottica Group
S.p.A. and Luxottica Acquisition Corp. for the Special Meeting of
Shareholders under Section 1701.831 of the Ohio Revised Code of The
United States Shoe Corporation, together with the form of Proxy
relating thereto, as filed with the Securities and Exchange Commission
on March 21, 1995 and incorporated herein by reference.
(a)(21) --Text of Press Release issued by Parent, dated March 24, 1995
</TABLE>
------------
* Previously filed.
6
<PAGE>
EXHIBIT INDEX
<TABLE><CAPTION>
EXHIBIT PAGE
------- ----
<S> <C> <C>
(b)(1) --Commitment Letter, dated March 2, 1995, from Credit Suisse................ *
(g)(1) --Complaint Seeking Declaratory and Injunctive Relief filed in the United
States District Court for the Southern District of Ohio, Eastern Division,
on March 3, 1995, relating to the Ohio Take-Over Act, the Preference Share
Purchase Rights and the impairment of the voting rights of certain Shares
under Sections 1701.01(CC)(2) and 1701.831 of the Ohio Revised Code....... *
(g)(2) --First Amended Verified Complaint seeking Declaratory and Injunctive Relief
filed by Luxottica Group S.p.A., Luxottica Acquisition Corp. and
Avant-Garde Optics, Inc. in the United States District Court for the
Southern District of Ohio, Eastern Division, on March 6, 1995, relating to
the Ohio Take-Over Act, the Preference Share Purchase Rights and the
impairment of the voting rights of certain Shares under Sections
1701.01(CC)(2) and 1701.831 of the Ohio Revised Code...................... *
(g)(3) --Motion for Leave to File a Second Amended Complaint filed on
March 10, 1995 by Luxottica Group S.p.A., Luxottica Acquisition
Corp. and Avant-Garde Optics, Inc. in the United States District
Court for the Southern District of Ohio, Eastern Division, in the
action entitled Luxottica Group S.p.A., et al. v. The United States
------------------------------ -----------------
Shoe Corporation, et. al. (C-2-95-244).................................... *
-------------------------
(g)(4) --Second Amended Verified Complaint seeking Declaratory and Injunctive Relief
filed by Luxottica Group S.p.A., Luxottica Acquisition Corp. and
Avant-Garde Optics, Inc. in the United States District Court for the
Southern District of Ohio, Eastern Division, on March 10, 1995, relating to
the Ohio Take-Over Act, the Preference Share Purchase Rights and the
impairment of the voting rights of certain Shares under Sections
1701.01(CC)(2) and 1701.831 of the Ohio Revised Code...................... *
(g)(5) --Motion of Plaintiff Avant-Garde Optics, Inc. for a Hearing and Order
to Show Cause filed on March 10, 1995 by Avant-Garde Optics, Inc. in
the United States District Court for the Southern District of Ohio,
Eastern Division, in the action entitled Luxottica Group S.p.A., et
-------------------------
al. v. The United States Shoe Corporation, et. al. (C-2-95-244)........... *
--- -------------------------------------------
(g)(6) --Opinion and Order issued on March 16, 1995 by the United States
District Court for the Southern District of Ohio, Eastern Division,
in the action entitled Luxottica Group S.p.A., et al. v. The United
------------------------------ ----------
States Shoe Corporation, et al. (C-2-95-244).............................. *
-------------------------------
(g)(7) --Answer of Defendents The United States Shoe Corporation, Joseph H.
Anderer, Philip E. Beekman, Gilbert Hahn, Jr., Roger L. Howe,
Bannus B. Hudson, Lorrence Kellar, Albert M. Kronick, Thomas Laco,
Charles S. Mechem, Jr., John L. Roy and Phyllis S. Sewell, and
Counterclaim of Defendant The United States Shoe Corporation Against
Plantiffs for Preliminary and Permanent Injunction for False and
Misleading Statements in SEC Filings and Tender Offer Materials,
filed on March 22, 1995 by The United States Shoe Corporation and
Named Defendants in the United States District Court for the
Southern District of Ohio, Eastern Division, in the action entitled
Luxottica Group S.p.A., et al. v. The United States Shoe
------------------------------ ----------------------
Corporation, et al. (C-2-95-244)..........................................
-------------------
</TABLE>
------------
* Previously filed.
7
<PAGE>
<TABLE><CAPTION>
<S> <C> <C>
(g)(8) --Order issued on March 22, 1995 by the United States District
Court for the Southern District of Ohio, Eastern Division, in
the action entitled Luxottica Group S.p.A., et al. v. The United
------------------------------ ----------
States Shoe Corporation, et al. (C-2-95-244)..............................
-------------------------------
(g)(9) --Order issued on March 23, 1995 by the United States District
Court for the Southern District of Ohio, Eastern Division, in
the action entitled Luxottica Group S.p.A., et al. v. The
----------------------------- ---
United States Shoe Corporation, et al. (C-2-95-244).......................
--------------------------------------
(g)(10) --Order issued on March 23, 1995 by the United States District
Court for the Southern District of Ohio, Eastern Division, in
the action entitled Luxottica Group S.p.A., et al. v. The
----------------------------- ---
United States Shoe Corporation, et al. (C-2-95-244).......................
--------------------------------------
(g)(11) --Motion for Leave to File a Third Amended Complaint filed on
March 24, 1995 by Luxottica Group S.p.A., Luxottica Acquisition
Corp. and Avant-Garde Optics, Inc. in the United States District
Court for the Southern District of Ohio, Eastern Division, in the
action entitled Luxottica Group S.p.A., et al. v. The United States
------------------------------ -----------------
Shoe Corporation, et. al. (C-2-95-244)....................................
-------------------------
</TABLE>
------------
* Previously filed.
8
FOR IMMEDIATE RELEASE
For more information, contact
Mark Harnett (MacKenzie Partners, Inc. Information Agent)
at 212-929-5877 or
Felicia Vonella (Dewe Rogerson Inc.) at 212-688-6840
LUXOTTICA GROUP CONFIRMS - CONTRARY TO PRESS REPORTS - THAT ITS
---------------------------------------------------------------
OFFER AND PROXY PROCEDURES CONTINUE
-----------------------------------
(New York, USA and Milan Italy, March 24, 1995) -- Luxottica
Group S.p.A. (NYSE:LUX) today confirmed that, contrary to press
reports earlier today, its cash tender offer for all outstanding
shares of The United States Shoe Corporation and its proxy
solicitation procedures are continuing. Luxottica noted, in
particular, that:
1. The 831 control share acquisition meeting date is April 21,
1995.
2. The record date for the 831 meeting is March 21, 1995.
3. Luxottica is using the shareholder list materials delivered
to it by US Shoe to solicit proxies for the 831 meeting and
calls for the additional special meeting of US Shoe
shareholders for the consideration of the removal of all
incumbent US Shoe directors and the election of Luxottica's
nominees to replace them. As announced, Luxottica has
commenced delivery of definitive proxy materials for the 831
meeting for a vote in favor of authorizing Luxottica's
purchase of US Shoe shares pursuant to its offer, but no
holder will be obligated as a result of such vote to tender
shares in the offer.
4. Although there is no specific record date for determining US
Shoe shareholders entitled to sign Luxottica's "agent
designations" for the call of the second special meeting,
Luxottica will continuously solicit execution of the "agent
designations" providing for the call of such meeting.
Luxottica noted that these procedures are fully consistent with
all orders issued by U.S. District Court Judge James Graham of
the Southern District of Ohio in the pending litigation between
Luxottica and US Shoe.
Luxottica Group S.p.A., based in Italy, is a world leader in the
design, manufacture and marketing of high quality eyeglass
frames and sunglasses in the mid and premium price categories.
Luxottica's products, which are designed and manufactured in
four facilities
<PAGE>
Luxottica Group Confirms That Offer and Proxy Continue
Page Two
located in Italy and include over 1,700 styles available in a
wide array of colors and sizes, are sold through wholly-owned
subsidiaries in the USA, Canada, Italy, France, Spain, Portugal,
Sweden, Germany, United Kingdom, Brazil, Switzerland and Mexico,
through 51%-owned distributors in Belgium, Netherlands, and
Finland, through a 50% joint venture in Japan, through a 75%
controlled company in Austria and through a 75.5% controlled
company in Greece. Luxottica Group's total sales from 1994 were
US$504.3 million and net income was US$77.5 million. Luxottica's
US operations in fiscal year 1994, accounted for 39.5% of
Luxottica's total consolidated sales.
Luxottica Group S.p.A. listed its American Depositary Shares on
the New York Stock Exchange in January 1990. The Company's
shares are traded only in the U.S. on the NYSE.
# # #
Exhibit (g)(7)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
Luxottica Group S.p.A., et al., : Civil Action C2-95-244
:
Plaintiffs, : Judge Graham
:
vs. : ANSWER OF DEFENDANTS THE
: UNITED STATES SHOE
The United States Shoe : CORPORATION, JOSEPH H.
Corporation, et al., : ANDERER, PHILIP E. BEEKMAN,
: GILBERT HAHN, JR., ROGER
Defendants, : L. HOWE, BANNUS B. HUDSON,
: LORRENCE KELLAR, ALBERT M.
: KRONICK, THOMAS LACO,
: CHARLES S. MECHEM, JR.,
: JOHN L. ROY AND PHYLLIS S.
: SEWELL, AND COUNTERCLAIM
: OF DEFENDANT THE UNITED
: STATES SHOE CORPORATION
: AGAINST PLAINTIFFS FOR
: PRELIMINARY AND PERMANENT
: INJUNCTION FOR FALSE AND
: MISLEADING STATEMENTS IN
: SEC FILINGS AND TENDER
: OFFER MATERIALS
------------------------------------------------------------------
FIRST DEFENSE
-------------
1. The following is an Answer to the Second Amended
Complaint filed by Plaintiffs Luxottica Group S.p.A.
("Luxottica"), Luxottica Acquisition Corp. ("Luxottica
Acquisition") and Avant Garde Optics, Inc. (Avant-Garde") by
Defendants The United States Shoe Corporation ("U. S. Shoe"),
Joseph H. Anderer, Philip E. Beekman, Gilbert Hahn, Jr., Roger L.
Howe, Bannus B. Hudson, Lorrence Kellar, Albert M. Kronick, Thomas
Laco, Charles S. Mechem, Jr., John L. Roy and Phyllis S. Sewell
(together, "U.S. Shoe Defendants"), and Counterclaims by U. S.
Shoe against Plaintiffs for violations of the federal securities
laws applicable to tender offers. The
<PAGE>
Counterclaim is stated beginning on page seventeen.
2. The U. S. Shoe Defendants admit so much of paragraph one
of the Second Amended Complaint ("Complaint") of Luxottica Group
S.p.A (Luxottica"), Luxottica Acquisition Corp. ("Luxottica
Acquisition") and Avant-Garde Optics, Inc. ("Avant-Garde")
(Luxottica, Luxottica Acquisition and Avant-Garde are referred to
together as "Plaintiffs") as may aver that Plaintiffs seek the
relief described in paragraph one, deny that Plaintiffs are
entitled to such relief and deny all other averments of paragraph
one of the Complaint.
3. The U. S. Shoe Defendants admit so much of paragraph two
of the Complaint as may aver that Plaintiffs seek the relief
described in paragraph two, deny that Plaintiffs are entitled to
such relief and deny all other averments of paragraph two of the
Complaint.
4. The U. S. Shoe Defendants are without knowledge or
information sufficient to form a belief as to the averments of
paragraph three of the Complaint.
5. The U. S. Shoe Defendants are without knowledge or
information sufficient to form a belief as to the first sentence
and the first clause of the second sentence of paragraph four of
the Complaint. The U. S. Shoe Defendants admit so much of the
second clause of the second sentence of paragraph four as may aver
that Avant-Garde is a shareholder of U. S. Shoe, and are without
knowledge or information sufficient to form a belief as to all
other averments of the second clause. The U. S. Shoe Defendants
admit the averments of the third sentence of paragraph four of the
Complaint.
6. The U. S. Shoe Defendants admit the averments of
paragraph five of the Complaint.
7. The U. S. Shoe Defendants admit the averments of
paragraph six of the
2
<PAGE>
Complaint.
8. The U. S. Shoe Defendants admit the averments of the
first sentence of paragraph seven of the Complaint. In answer to
the remaining averments of paragraph seven, the U. S. Shoe
Defendants say the Ohio Revised Code speaks for itself, and deny
all other averments of paragraph seven of the Complaint.
9. The U. S. Shoe Defendants admit the averments of
paragraph eight of the Complaint.
10. The U. S. Shoe Defendants admit the averments of
paragraph nine of the Complaint.
11. The U. S. Shoe Defendants admit so much of paragraph ten
as may aver that Plaintiffs made certain averments under the
Constitution, laws and regulations of the United States, deny that
Plaintiffs are entitled to relief under the Constitution, laws or
regulations of the United States, and deny all other averments of
paragraph ten of the Complaint.
12. In answer to paragraph eleven, the U. S. Shoe Defendants
admit that this Court has subject matter jurisdiction over certain
of Plaintiffs averments pursuant to 28 U.S.C. Sec. 1331 (federal
question), and deny all other averments of paragraph eleven of the
Complaint.
13. The U. S. Shoe Defendants admit so much of paragraph
twelve as avers that venue is proper in this judicial district
pursuant to 28 U.S.C. Sec. 1391(b) and (c), and that venue in this
division is proper pursuant to Rule 3.3(c) of the S.D. Ohio L.R as
3
<PAGE>
to Counts One and Two of the Complaint, and deny all other
averments of paragraph twelve of the Complaint.
14. The U. S. Shoe Defendants deny the averments of
paragraph thirteen of the Complaint.
15. The U. S. Shoe Defendants admit the averments of
paragraph fourteen of the Complaint, except that Luxottica's
stated motivation for seeking non-public information is denied
16. The U. S. Shoe Defendants are without knowledge or
information sufficient to form a belief as to the averments of
paragraph fifteen of the Complaint.
17. The U. S. Shoe Defendants admit so much of paragraph
sixteen as may aver that Plaintiffs commenced, on March 3, 1995, a
tender offer (the "Tender Offer") for all of the outstanding
common shares of U. S. Shoe at a price of $24 per share, and are
without knowledge or information sufficient to form a belief as to
all other averments of paragraph sixteen of the Complaint.
18. The U. S. Shoe Defendants admit the averments of the
first, second and fifth sentences of paragraph seventeen. The U.S.
Shoe Defendants deny the averments of the third and fourth
sentences of paragraph seventeen. The U. S. Shoe Defendants are
without knowledge or information sufficient to form a belief as to
all other averments of paragraph seventeen of the Complaint.
19. The U. S. Shoe Defendants deny the averments of the
first sentence of paragraph eighteen. The U. S. Shoe Defendants
admit the averments of the second sentence of paragraph eighteen,
except the U S. Shoe Defendants deny that the Offer to Purchase
sets forth the
4
<PAGE>
material terms of the Tender Offer. The U. S. Shoe Defendants
admit so much of the third and fourth sentences of paragraph
eighteen as may aver that Plaintiffs are filing certain documents
with the Division, and have delivered an Acquiring Person
Statement to U. S. Shoe, and are without knowledge or information
sufficient to form a belief as to all other averments of the third
and fourth sentences of paragraph eighteen of the Complaint.
20. In answer to paragraph nineteen, the U. S. Shoe
Defendants say the Williams Act and rules promulgated thereunder
speak for themselves, and deny all other averments of paragraph
nineteen of the Complaint.
21. In answer to paragraph twenty, the U. S. Shoe Defendants
say the Williams Act and rules promulgated thereunder speak for
themselves, and deny all other averments of paragraph twenty of
the Complaint.
22. In answer to paragraph twenty-one, the U. S. Shoe
Defendants say the Williams Act and rules promulgated thereunder
speak for themselves, and deny all other averments of paragraph
twenty-one of the Complaint.
23. In answer to paragraph twenty-two, the U. S. Shoe
Defendants say the Williams Act and rules promulgated thereunder
speak for themselves, and deny all other averments of paragraph
twenty-two of the Complaint.
24. In answer to paragraph twenty-three, the U. S. Shoe
Defendants say the Williams Act and rules promulgated thereunder
speak for themselves, and deny all other averments of paragraph
5
<PAGE>
twenty-three of the Complaint.
25. In answer to paragraph twenty-four, the U. S. Shoe
Defendants say the Ohio Takeover Act speaks for itself, and deny
all other averments of paragraph twenty-four of the Complaint.
26. In answer to paragraph twenty-five, the U. S. Shoe
Defendants say the Ohio Takeover Act speaks for itself, and deny
all other averments of paragraph twenty-five of the Complaint.
27. In answer to paragraph twenty-six, the U. S. Shoe
Defendants say the Ohio Takeover Act speaks for itself, and deny
all other averments of paragraph twenty-six of the Complaint.
28. The U. S. Shoe Defendants deny the averments of
paragraph twenty-seven of the Complaint.
29. In answer to paragraph twenty-eight, the U. S. Shoe
Defendants say the Ohio Takeover Act speaks for itself, and deny
all other averments of paragraph twenty-eight of the Complaint.
30. In answer to paragraph twenty-nine, the U. S. Shoe
Defendants say the Ohio Takeover Act speaks for itself, and deny
all other averments of paragraph twenty-nine of the Complaint.
31. In answer to paragraph thirty, the U. S. Shoe Defendants
say the Ohio Takeover Act speaks for itself, and deny all other
averments of paragraph thirty of the Complaint.
32. The U. S. Shoe Defendants deny the averments of paragraph
thirty-one of the Complaint.
33. In answer to paragraph thirty-two, the U. S. Shoe
Defendants say the Ohio Control Share Acquisition Act speaks for
itself, and deny all other averments of paragraph thirty-two of
the
6
<PAGE>
Complaint.
34. In answer to paragraph thirty-three, the U. S. Shoe
Defendants say the Ohio Control Share Acquisition Act speaks for
itself, and deny all other averments of paragraph thirty-three of
the Complaint.
35. In answer to paragraph thirty-four, the U. S. Shoe
Defendants say the Ohio Control Share Acquisition Act speaks for
itself, and deny all other averments of paragraph thirty-four of
the Complaint.
36. The U. S. Shoe Defendants deny the averments of
paragraph thirty-five of the Complaint.
37. In answer to paragraph thirty-six, the U. S. Shoe
Defendants say Ohio Rev. Code Sec. 1701.01(CC)(2) speaks for itself,
and no further answer is required.
38. The U. S. Shoe Defendants deny the averments of
paragraph thirty-seven of the Complaint.
39. The U. S. Shoe Defendants admit the averments of the
first, second and third sentences of paragraph thirty-eight, and
are without knowledge or information sufficient to form a belief
as to the averments of the fourth and fifth sentences of paragraph
thirty-eight. The U. S. Shoe Defendants deny all other averments
of paragraph thirty-eight of the Complaint.
40. In answer to paragraph thirty-nine, the U. S. Shoe
Defendants say the Exchange Act and regulations promulgated
thereunder speak for themselves, and deny all other averments of
paragraph thirty-nine of the Complaint.
7
<PAGE>
41. In answer to paragraph forty, the U. S. Shoe Defendants
say the Exchange Act and regulations promulgated thereunder speak
for themselves, and deny all other averments of paragraph forty of
the Complaint.
42. The U. S. Shoe Defendants deny the averments of
paragraph forty-one of the Complaint.
43. In answer to paragraph forty-two, the U. S. Shoe
Defendants say the Williams Act and the regulations thereunder
speak for themselves, admit that U. S. Shoe and Luxottica
Acquisition are subject to the Williams Act, and deny all other
averments of paragraph forty-two of the Complaint.
44. The U. S. Shoe Defendants deny the averments of
paragraph forty-three of the Complaint.
45. In answer to paragraph forty-four, the U. S. Shoe
Defendants say the Ohio Revised Code speaks for itself, and deny
all other averments of paragraph forty-four.
46. The U. S. Shoe Defendants admit so much of paragraph
forty-five as may aver that U. S. Shoe adopted a plan providing
for the issuance of Preference Shares Purchase Rights (the
"Rights") on March 31, 1986, implemented such rights on April 14,
1986, and deny all other averments of paragraph forty-five of the
Complaint.
47. The U. S. Shoe Defendants admit so much of paragraph
forty-six as may aver that on March 23, 1988, U. S. Shoe amended
the Preference Shares Purchase Rights Agreement (the "Rights
Agreement"), say that U.S. Shoe further amended the Rights
Agreement on June 1, 1993, and deny all other averments of
paragraph forty-six
8
<PAGE>
of the Complaint.
48. In answer to paragraph forty-seven, the U. S. Shoe
Defendants say that the Rights Agreement, as amended, speaks for
itself, and deny all other averments of paragraph forty-seven.
49. In answer to paragraph forty-eight, the U. S. Shoe
Defendants say that the Rights Agreement, as amended, speaks for
itself, and deny all other averments of paragraph forty-eight.
50. The U. S. Shoe Defendants admit the averments of the
first sentence of paragraph forty-nine, and is without knowledge
or information sufficient to form a belief as to all other
averments of paragraph forty-nine of the Complaint.
51. In answer to paragraph fifty, the U. S. Shoe Defendants
say that the Rights Agreement, as amended, speaks for itself, and
deny all other averments of paragraph fifty of the Complaint.
52. In answer to paragraph fifty-one, the U. S. Shoe
Defendants say that the Rights Agreement, as amended, speaks for
itself, and deny all other averments of paragraph fifty-one of the
Complaint.
53. In answer to paragraph fifty-two, the U. S. Shoe
Defendants say that the Rights Agreement, as amended, speaks for
itself, and deny all other averments of paragraph fifty-two of the
Complaint.
54. In answer to paragraph fifty-three, the U. S. Shoe
Defendants say that the Rights Agreement, as amended, speaks for
itself, and deny all other averments of paragraph fifty-three of
the Complaint.
9
<PAGE>
55. In answer to paragraph fifty-four, the U. S. Shoe
Defendants say that the Rights Agreement, as amended, speaks for
itself, and deny all other averments of paragraph fifty-four of
the Complaint.
56. In answer to paragraph fifty-five, the U. S. Shoe
Defendants say that the Rights Agreement, as amended, speaks for
itself, and deny all other averments of paragraph fifty-five of
the Complaint.
57. In answer to paragraph fifty-six, the U. S. Shoe
Defendants say that the Rights Agreement, as amended, speaks for
itself, and deny all other averments of paragraph fifty-six of the
Complaint.
58. In answer to paragraph fifty-seven, the U. S. Shoe
Defendants say that the Rights Agreement, as amended, speaks for
itself, and deny all other averments of paragraph fifty-seven of
the Complaint.
59. In answer to paragraph fifty-eight, the U. S. Shoe
Defendants say that the Rights Agreement, as amended, speaks for
itself, and deny all other averments of paragraph fifty-eight of
the Complaint.
60. The U. S. Shoe Defendants deny the averments of
paragraph fifty-nine of the Complaint.
61. In answer to paragraph sixty, the U. S. Shoe Defendants
say that the Rights Agreement, as amended, speaks for itself, and
deny all other averments of paragraph sixty of the Complaint.
62. The U. S. Shoe Defendants deny the averments of
paragraph
10
<PAGE>
sixty-one of the Complaint.
63. The U. S. Shoe Defendants admit the averments of the
first three sentences of paragraph sixty-two, and deny all other
averments of paragraph sixty-two of the Complaint.
64. In answer to paragraph sixty-three, the U. S. Shoe
Defendants say that the Rights speak for themselves, and deny all
other averments of paragraph sixty-three of the Complaint.
65. In answer to paragraph sixty-four, the U. S. Shoe
Defendants say that the Rights Agreement, as amended, speaks for
itself, and deny all other averments of paragraph sixty-four of
the Complaint.
66. The U. S. Shoe Defendants deny the averments of
paragraph sixty-five of the Complaint.
67. In answer to paragraph sixty-six, the U. S. Shoe
Defendants say the Rights Agreement speaks for itself, and deny
all other averments of paragraph sixty-six of the Complaint.
68. The U. S. Shoe Defendants deny the averments of
paragraph sixty-seven of the Complaint.
69. The U. S. Shoe Defendants incorporate their Answer and
Defenses to the averments of paragraph sixty-eight of the
Complaint.
70. In answer to paragraph sixty-nine of the Complaint, the
U. S. Shoe Defendants say the United States Constitution speaks
for itself, and deny all other averments of paragraph sixty-nine.
71. The U. S. Shoe Defendants admit the averments of
paragraph seventy of the Complaint.
72. The U. S. Shoe Defendants deny the averments of
paragraph
11
<PAGE>
seventy-one of the Complaint.
73. The U. S. Shoe Defendants deny the averments of
paragraph seventy-two of the Complaint.
74. The U. S. Shoe Defendants deny the averments of
paragraph seventy-three of the Complaint.
75. The U. S. Shoe Defendants incorporate their Answer and
Defenses to the averments of paragraph seventy-four of the
Complaint.
76. In answer to paragraph seventy-five, the U. S. Shoe
Defendants say the United States Constitution speaks for itself,
and deny all other averments of paragraph seventy-five of the
Complaint.
77. The U. S. Shoe Defendants deny the averments of
paragraph seventy-six of the Complaint.
78. The U. S. Shoe Defendants deny the averments of
paragraph seventy-seven of the Complaint.
79. The U. S. Shoe Defendants deny the averments of
paragraph seventy-eight of the Complaint.
80. The U. S. Shoe Defendants incorporate their Answer and
Defenses to the averments of paragraph seventy-nine of the
Complaint.
81. The U. S. Shoe Defendants deny the averments of
paragraph eighty of the Complaint.
82. The U. S. Shoe Defendants deny the averments of
paragraph eighty-one of the Complaint.
83. The U. S. Shoe Defendants incorporate their Answer and
Defenses to the averments of paragraph eighty-two of the
Complaint.
12
<PAGE>
84. The U. S. Shoe Defendants deny the averments of
paragraph eighty-three of the Complaint.
85. The U. S. Shoe Defendants deny the averments of
paragraph eighty-four of the Complaint.
86. The U. S. Shoe Defendants deny the averments of
paragraph eighty-five of the Complaint.
87. The U. S. Shoe Defendants incorporate their Answer and
Defenses to the averments of paragraph eighty-six of the
Complaint.
88. In answer to paragraph eighty-seven of the Complaint,
the U. S. Shoe Defendants say its Amended Articles of
Incorporation speak for themselves, and deny all other averments
of paragraph eighty-seven of the Complaint.
89. The U. S. Shoe Defendants admit so much of paragraph
eighty-eight as may aver that the shares are a property right of
the shareholders, and deny all other averments of paragraph
eighty-eight of the Complaint.
90. The U. S. Shoe Defendants deny the averments of
paragraph eighty-nine of the Complaint.
91. In answer to paragraph ninety, the U. S. Shoe Defendants
say the United States Constitution and the Ohio Constitution speak
for themselves, and deny all other averments of paragraph ninety
of the Complaint.
92. The U. S. Shoe Defendants deny the averments of
paragraph ninety-one of the Complaint.
93. The U. S. Shoe Defendants deny the averments of
paragraph ninety-two of the Complaint.
13
<PAGE>
94. The U. S. Shoe Defendants incorporate their Answer and
Defenses to the averments of paragraph ninety-three of the
Complaint.
95. In answer to paragraph ninety-four, the U. S. Shoe
Defendants say the Rights Agreement, as amended, speaks for
itself, and deny all other averments of paragraph ninety-four.
96. The U. S. Shoe Defendants admit the first clause of
paragraph ninety-five, and deny all other averments of paragraph
ninety-five of the Complaint.
97. The U. S. Shoe Defendants admit the first clause of
paragraph ninety-six, and deny all other averments of paragraph
ninety-six of the Complaint.
98. The U. S. Shoe Defendants deny the averments of
paragraph ninety-seven of the Complaint.
99. The U. S. Shoe Defendants deny the averments of
paragraph ninety-eight of the Complaint.
100. The U. S. Shoe Defendants incorporate their Answer and
Defenses to the averments of paragraph ninety-nine of the
Complaint.
101. The U. S. Shoe Defendants deny the averments of
paragraph 100 of the Complaint.
102. The U. S. Shoe Defendants deny the averments of
paragraph 101 of the Complaint.
103. The U. S. Shoe Defendants admit so much of paragraph 102
as may aver that its Board of Directors has not redeemed the
Rights, and are without knowledge or information sufficient to
form a belief as to all other averments of paragraph 102 of the
Complaint.
14
<PAGE>
104. The U. S. Shoe Defendants deny the averments of
paragraph 103 of the Complaint.
105. The U. S. Shoe Defendants deny the averments of
paragraph 104 of the Complaint.
106. The U. S. Shoe Defendants incorporate their Answer and
Defenses to the averments of paragraph 105 of the Complaint.
107. In answer to paragraph 106, the U. S. Shoe Defendants
say the Rights Agreement, as amended, speaks for itself, and deny
all other averments of paragraph 106 of the Complaint.
108. The U. S. Shoe Defendants deny the averments of
paragraph 107 of the Complaint.
109. The U. S. Shoe Defendants admit the averments of
paragraph 108 of the Complaint.
110. The U. S. Shoe Defendants deny the averments of
paragraph 109 of The Complaint.
111. The U. S. Shoe Defendants deny the averments of
paragraph 110 of the Complaint.
112. The U. S. Shoe Defendants incorporate their Answer and
Defenses to the averments of paragraph 111 of the Complaint.
113. The U. S. Shoe Defendants admit the averments of
paragraph 112 of the Complaint, at least as of March 16, 1995
114. In answer to paragraph 113, the U. S. Shoe Defendants
admit that Avant-Garde delivered a letter dated March 7, 1995, to
U. S. Shoe, say that the letter speaks for itself, and deny all
other averments of paragraph 113 of the Complaint.
115. The U. S. Shoe Defendants admit that U. S. Shoe sent a
15
<PAGE>
letter to Avant-Garde dated March 10, 1995, say that the letter
speaks for itself, and deny all other averments of paragraph 114
of the Complaint.
116. The U. S. Shoe Defendants deny the averments of
paragraph 115 of the Complaint.
117. The U. S. Shoe Defendants deny the averments of
paragraph 116 of the Complaint.
118. In answer to paragraph 117, the U. S. Shoe Defendants
say the written request that Luxottica and Luxottica Acquisition
delivered to U. S. Shoe attached as Exhibit B to the Complaint
speaks for itself, and deny all other averments of paragraph 117.
119. In answer to paragraph 118, the U. S. Shoe Defendants
say that Luxottica Group, Luxottica Acquisition, Avant-Garde and
certain other shareholders submitted a written request to U. S.
Shoe, attached as Exhibit C to the Complaint, say such written
request speaks for itself, and deny all other averments of
paragraph 118 of the Complaint.
120. The U. S. Shoe Defendants admit the averments of
paragraph 119 of the Complaint, and say that later that same day,
March 10, 1995, the directors of U. S. Shoe fixed the close of
business on March 21, 1995, as the record date for the 831 Special
Meeting.
121. The U. S. Shoe Defendants deny the averments of
paragraph 120 of the Complaint.
122. In answer to paragraph 121, the U. S. Shoe Defendants
admit that Plaintiffs seek a declaration by the Court, and deny
all other averments of paragraph 121.
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<PAGE>
123. The U. S. Shoe Defendants deny the averments of
paragraph 122 of the Complaint.
124. The U. S. Shoe Defendants deny the averments of
paragraph 123 of the Complaint.
125. The U. S. Shoe Defendants deny the averments of
paragraph 124 of the Complaint.
126. The U. S. Shoe Defendants deny all other averments not
specifically admitted herein.
SECOND DEFENSE
--------------
127. Plaintiffs are not entitled to equitable relief, on the
grounds of unclean hands, because Luxottica and Luxottica
Acquisition have made misstatements and omissions of material fact
in the Offer and their Schedule 14D-l, as described below.
THIRD DEFENSE
-------------
128. Plaintiffs, or one or more of them, may lack standing to
assert claims.
COUNTERCLAIMS OF U. S. SHOE
---------------------------
JURISDICTION
------------
129. U. S. Shoe asserts the following Counterclaims against
Plaintiffs. As detailed below, the Plaintiffs are violating the
disclosure requirements of the federal securities laws that apply
to tender offers, and should be enjoined from continuing the
Luxottica tender offer until full and fair disclosure is made to
the investing public, as required by the federal securities laws.
130. This Court has subject matter jurisdiction over Counts I
through VII of U. S. Shoe's Counterclaim pursuant to the
provisions
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of Section 27 of the Securities Exchange Act of 1934 ("Exchange
Act"), 15 U.S.C. Sec. 78aa, and 28 U. S. C. Sec. 1331 (a). These
claims arise under Sec.Sec. 14 (d) and (e) of the Exchange Act,
15 U.S.C. Sec. 78n, and the rules and regulations promulgated
thereunder.
131. This Court has subject matter jurisdiction over Counts
VII and VIII of U. S. Shoe's Counterclaim for violations of Ohio
Rev. Code Sec. 1707.041 pursuant to the principles of pendant
jurisdiction.
132. Venue for U. S. Shoe's Counterclaim is proper in this
judicial district because Plaintiffs conduct business in this
district, and the claims stated herein arose in this district.
133. The acts of Plaintiffs alleged herein occurred in and
have a substantial effect on interstate commerce.
FACTS COMMON TO ALL COUNTERCLAIMS
134. On or about March 3, 1995 Luxottica and Luxottica
Acquisition, an indirect wholly-owned Delaware subsidiary of
Luxottica, commenced a takeover bid (the "Tender Offer") for all
the issued and outstanding common shares of U. S. Shoe (the
"Shares"). The Tender Offer is described in an Offer to Purchase
dated March 3, 1995 (the "Offer"). If consummated, the Tender
Offer will result in the acquisition of U. S. Shoe by Luxottica,
Luxottica Acquisition, or some subsidiary or affiliate of one or
both of them. Shares are currently being tendered and, by its
terms, the Tender Offer will expire at 12:00 midnight, EST,
March 30, 1995.
135. The Shares are a class of equity securities registered
on the New York and Pacific Stock Exchanges.
136. Luxottica and Luxottica Acquisition have filed a
Schedule
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14D-1, as amended, (the "14D-1"), under Section 14(d) of the
Exchange Act, with the Securities and Exchange Commission ("SEC")
with respect to the Tender Offer. The 14D-1 contains, among other
exhibits, the Offer, purportedly setting forth the material terms
of the Tender Offer.
137. 17 CFR Sec. 240.14d-100 (Schedule 14D-1) requires Luxottica
and Luxottica Acquisition to disclose certain information, which
the SEC has determined to be material.
138. By letter dated March 2, 1995 (such letter, including
the accompanying term sheet (the "Term Sheet"), is referred to as
the "Commitment Letter"), Credit Suisse's New York branch ("Credit
Suisse") issued a "commitment" to an unidentified "Borrower" to
provide, subject to the terms and conditions set forth in the
Commitment Letter, a term loan facility in the amount of US$1.0
billion (the "Term Loan Facility") and a revolving credit facility
in the amount of US$450 million (the "Revolving Credit Facility",
which together are referred to collectively as the "Credit
Facility").
139. The Offer indicates that after the purchase of the
Shares under the Tender Offer, Luxottica Acquisition will effect a
merger pursuant to which Luxottica Acquisition will be merged with
and into U. S. Shoe (the "Merger") and, as a result of the Merger,
U. S. Shoe will become an indirect wholly-owned subsidiary of
Luxottica.
140. The Commitment Letter indicates that the "Borrower" for
purposes of the Commitment Letter, and the borrower under the
Credit Facility, will be another newly-formed indirect
wholly-owned
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Delaware subsidiary of Luxottica (the "Borrower").
141. The Commitment Letter indicates that the Borrower will
make a cash contribution of the loan proceeds under the Term Loan
Facility to Avant-Garde, an operating company based in Port
Washington, New York, and an existing direct wholly-owned
subsidiary of Luxottica, which will in turn contribute such amount
as a cash contribution to Luxottica Acquisition.
142. The Commitment Letter indicates that the loans under the
Credit Facility will be used to finance the acquisition of the
Shares pursuant to the Tender Offer. The Term Sheet indicates
that only the loans under the Term Loan Facility (the "Term
Loans") are to be utilized by Luxottica Acquisition to finance the
Tender Offer and the Merger and to pay fees and expenses in
connection therewith.
143. The Term Sheet indicates that the loans under the
Revolving Credit Facility are to be utilized:
"for the Borrower's and its subsidiaries'
general corporate and working capital
requirements, provided that a portion (to be
determined), and only such portion, of the
Revolving Credit Facility may be utilized for
the same purposes as the Term Loans and to
refinance no more than $140 million of
existing indebtedness of [U. S. Shoe] after
giving effect to the Merger."
144. The Commitment Letter indicates that all amounts owing
under the Credit Facility (and all obligations under the
guarantees
20
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referred to below) will be secured by pledges of the capital stock
of the Borrower and its subsidiary Avant-Garde, as well as by "all
capital stock and notes owned by the Borrower and its subsidiaries
(including all shares purchased in the Tender Offer and all shares
of Capital Stock of Target [U. S. Shoe] after the merger)."
145. The Commitment Letter indicates that the Credit Facility
will be guaranteed by Luxottica, Luxottica S.p.A. and La
Meccanoptica Leonardo S.p.A., which are subsidiaries of Luxottica,
by all subsidiaries of the Borrower and by all other U.S.
subsidiaries of Luxottica. The Commitment Letter also indicates
that the collateral security for the Credit Facility will include
all notes and capital stock owned by all other U.S. subsidiaries
of Luxottica and security interests in substantially all other
assets owned by the Borrower and its subsidiaries and by all other
U.S. subsidiaries of Luxottica. Finally, the Commitment Letter
indicates that the Credit Facility will also be secured by a
negative pledge of substantially all assets of Luxottica and its
subsidiaries, including the capital stock of Luxottica's non-U.S.
subsidiaries.
146. By its terms, the Commitment Letter is made contingent
upon the fulfillment of a number of conditions, including that all
loans and other financing to the Borrower shall be in full
compliance with all requirements of Regulations G, T, U and X
(together "the Board Regulations") of the Board of Governors of
the Federal Reserve System (the "Board").
147. In Amendment No. 4 to the 14D-l ("Fourth Amendment")
filed by Luxottica and Luxottica Acquisition on March 16, 1995,
Luxottica
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and Luxottica Acquisition state: "Credit Suisse is prepared to
fund their commitment on the expiration date of our offer." This
statement contradicts the terms and conditions stated in the
Commitment Letter, because certain of such terms and conditions
could not be met as of March 16, 1995, as described below.
148. In the Fourth Amendment, Luxottica and Luxottica
Acquisition state that U. S. Shoe's agreement for the sale of the
Footwear Group to Nine West Group, Inc. ("Nine West") "appears to
be conditioned on financing."
149. U. S. Shoe's agreement with Nine West is not conditioned
on financing.
150. Luxottica manufactures and sells eyeglass frames
worldwide. Upon information and belief, in 1994, Luxottica sold
approximately $504 million of eyeglass frames (12.8 million pairs)
worldwide. Upon information and belief, approximately 40% of
Luxottica's sales of eyeglass frames are made in the United
States. Luxottica sells eyeglass frames primarily to independent
eyeglass vendors and also to chains such as Sunglass Hut, Pearle
and Vision Works.
151. Through its LensCrafters subsidiary, U. S. Shoe
operates the largest chain of optical superstore retail outlets in
the United States and Canada, with 530 outlets in the United
States and 59 outlets in Canada.
152. In fiscal 1994, LensCrafters purchased eyeglass flames
from approximately thirty-three frame manufacturers.
Traditionally, LensCrafters has purchased a relatively modest
volume of frames from
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Luxottica. For instance, in 1994 LensCrafters purchased
approximately $5,524,000 in frames from Luxottica, representing
approximately 7% of U. S. Shoe's total fiscal 1994 eyeglass frame
purchases. Upon information and belief, Luxottica has initiated
its acquisition as set forth below in order to force LensCrafters
to purchase frames from Luxottica, which frames LensCrafters would
otherwise purchase from competitors of Luxottica
153. Upon information and belief, Leonardo Del Vecchio, an
Italian citizen ("Mr. Del Vecchio"), owns 36% of Luxottica
directly. Upon information and belief, he controls the voting
rights to Luxottica's shares held by La Leonardo Finanziaria, an
Italian company ("Finanziaria"), which owns approximately 35% of
Luxottica. Upon information and belief, he controls an aggregate
of approximately 71% of Luxottica's shares.
154. Upon information and belief, Mr. Del Vecchio is quoted
as stating that one of the reasons for the Tender Offer was that
LensCrafters was sourcing a considerable amount of merchandise
from the Far East, thereby indicating that Mr. Del Vecchio intends
to shift LensCrafters purchasing toward European suppliers,
including Luxottica. (Financial Times, March 10, 1995).
---------------
155. Upon information and belief, Mr. Del Vecchio is quoted
as stating that another purpose of the Tender Offer is defensive,
in an attempt to prevent LensCrafters and Pearle Vision from
attaining a 50% North American market share. (Financial Times,
-----------------
March 10, 1995).
156. Upon information and belief, the Italian press has
reported that Mr. Del Vecchio, the wealthiest taxpayer in Italy,
is
23
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personally worth two trillion lira (about $1.2 billion dollars).
(Il Mondo, January 23, 1995.)
--------
COUNT I
Violation of Sec.14 of the Exchange Act - Purpose of Tender Offer
--------------------------------------------------------------
157. U. S. Shoe incorporates by reference each allegation
contained above as if restated in full herein.
158. Schedule 14D-l, Item 5, requires Luxottica and Luxottica
Acquisition to disclose the purpose of the Tender Offer.
159. As stated above, Mr. Del Vecchio, who is a controlling
person of Luxottica and Luxottica Acquisition, has stated to the
foreign press purposes for the Tender Offer that are not disclosed
in the Offer or the l4D- 1.
160. The 14D-l is materially misleading regarding the purpose
of the Tender Offer, because it does not disclose the true
purposes for the Tender Offer.
161. The 14D-l violates Sec.Sec.14 (d) and (e) of the Exchange
Act, 15 U. S. C. Sec. 78 n, and the rules and regulations
promulgated thereunder.
COUNT II
Violation of Sec.14 of the Exchange Act - Tender Offer Structure
-------------------------------------------------------------
162. U. S. Shoe incorporates by reference each allegation
contained above as if related in full herein.
163. Schedule 14D-l requires identification of the "Bidder"
on whose behalf a tender offer is made.
164. Schedule 14D-l defines "Bidder" as "any person or entity
on whose behalf a tender offer is made."
24
<PAGE>
165. In view of Luxottica's complicated corporate structure,
the reference in the Offer to Luxottica Acquisition as an
"indirect" wholly-owned subsidiary of Luxottica is inadequate
disclosure of the identity of the Bidder, because it fails to
identify any other persons or entities in the chain of ownership
and/or control of Luxottica and Luxottica Acquisition.
166. The Offer fails to provide adequate disclosure of the
identity of the acquiring persons or entities in the Tender Offer,
and therefore fails to disclose adequately the identity of the
Bidder. The Offer describes Luxottica Acquisition as ". . . an
indirect wholly-owned subsidiary of Luxottica Group, S.p.A."
According to the Commitment Letter, however, "a newly-formed
indirect wholly-owned subsidiary of Luxottica Group S.p.A.
("Luxottica Group"), which subsidiary ("Newco 1") shall be
incorporated under the laws of Delaware, intends to acquire,
through another newly-formed indirect wholly-owned Delaware
subsidiary of Luxottica Group ("Bidco"), the issued and
outstanding, shares of common stock . . . . [of U. S. Shoe].
Neither the identity nor the existence of "Newco 1" is disclosed
in the Offer.
167. The Commitment Letter indicates that Avant-Garde is to
acquire the Shares purchased pursuant to the Tender Offer by
Luxottica Acquisition. The Offer fails to disclose this material
fact.
168. The Offer violates Sec.Sec.14 (d) and (e) of the Exchange
Act, 15 U. S. C. Sec. 78 n, and the rules and regulations
promulgated thereunder.
25
<PAGE>
COUNT III
---------
Violation of Sec.14 of the Exchange Act - Control of Bidder
--------------------------------------------------------
169. U. S. Shoe incorporates by reference each allegation
contained above as if restated in full herein.
170. Schedule 14D-l, Item 10(f), requires Luxottica and
Luxortica Acquisition to disclose "[s]uch additional information,
if any, [as] may be necessary to make the required statements, in
the light of the circumstances under which they were made, not
materially misleading."
171. Schedule 14D-1, General Instruction C, requires
Luxottica and Luxottica Acquisition to provide information
regarding "each person controlling such corporation." Luxottica
has failed to disclose the identity of Mr. Del Vecchio (and
perhaps other persons), and material information about him, as a
controlling person of Luxottica in violation of Schedule 14D-l.
172. The 14D-l violates Sec. Sec. 14 (d) and (e) of the
Exchange Act, 15 U. S. C. Sec. 78 n, and the rules and
regulations promulgated thereunder.
COUNT IV
Violation of Sec.14 of the Exchange Act - Description of Financing
---------------------------------------------------------------
173. U. S. Shoe incorporates by reference each allegation
contained above as if restated in full herein.
174. Schedule 14D-1, Item 5, requires Luxottica to describe
the financing of the Tender Offer.
175. The 14D-1 fails to meet the requirements of Schedule
14D-l and is misleading, because it fails to disclose material
facts
26
<PAGE>
pertaining to the financing of the Tender Offer in, among others,
the following respects:
(a) The convoluted financial and other relationships
among the undisclosed Borrower, Avant-Garde, Luxottica and
Luxottica Acquisition, as described above, are not disclosed
in the Offer itself. Upon information and belief, such
relationships have no purpose other than to mask the fact
that the Credit Facility is being extended for the purpose of
purchasing "margin stock" in violation of the Board
Regulations.
(b) The identity of the actual Borrower of the Credit
Suisse financing is never identified in the Offer, in
violation of Item 4(b)(1) of Schedule 14D-1. The Offer is
misleading, because it implies that the Borrower is actually
Luxortica Acquisition Corp., rather than "Newco 1" or some
other Luxottica subsidiary.
(c) The Offer states that the ". . . Offer is
conditioned upon the Purchaser being satisfied . . . that the
Purchaser [Luxottica Acquisition] has obtained sufficient
financing to enable it to consummate the Offer. . . .", and
directs the reader to Section 9 for a description of the
financing. The Offer is again conditioned at Sections 9 and
14 upon sufficient financing being obtained by Luxottica
Acquisition.
(d) The Commitment Letter contradicts the Offer, as
described above.
(e) The Terms and Conditions in "Condition Precedent to
27
<PAGE>
the Closing Date," Section A (xiv), states that all loans
under the Credit Facility must be in full compliance with all
requirements of the Board Regulations before the financing
may be completed, but such limitation is not explicitly
stated in the Offer, which fails to disclose adequately the
risk that the financing may be challenged for noncompliance
with the Board Regulations, as described below.
(f) The Offer fails to disclose how much of the
Revolving Credit Facility may be used to purchase the Shares.
(g) The Commitment Letter indicates that the financing
is subject to Credit Suisse's approval of key loan
documentation in its sole discretion. The Offer does not
adequately disclose that the financing is subject to the sole
discretion of Credit Suisse.
(j) The Fourth Amendment falsely states that "Credit
Suisse is prepared to fund their commitment on the expiration
date of our offer. . . .", whereas the commitment of Credit
Suisse is subject to terms and conditions that could not
possibly be satisfied as of March 16, 1995.
176. The 14D-1 violates Sec. Sec. 14 (d) and (e) of the
Exchange Act, 15 U. S. C. Sec. 78 n, and the rules and
regulations promulgated thereunder.
COUNT V
Violation Sec. 14 of Exchange Act - Misstatement About
---------------------------------------------------
U. S. Shoe's Agreement
----------------------
177. U. S. Shoe incorporates by reference each allegation
28
<PAGE>
contained above as if restated in full herein.
178. The Fourth Amendment falsely states that U. S. Shoe's
agreement with Nine West "appears to be conditioned on financing .
. ", whereas in truth and in fact, it is not conditioned on
financing.
179. The 14D-1 violates Sec. Sec. 14 (d) and (e) of the
Exchange Act, 15 U. S. C. Sec. 78 n, and the rules and regulations
promulgated thereunder.
COUNT VI
Violation of Sec. 14 of Exchange Act - Regulation U
------------------------------------------------
180. U. S. Shoe incorporates by reference each allegation
contained above as if restated in full herein.
181. The 14D-1 and the Offer contain untrue statements of
material fact and omit to state material facts necessary to make
statements made, in light of the circumstances in which they were
made, not misleading, in violation of Section 14(d) of the
Exchange Act as follows:
(a) The Offer fails to disclose a violation of the Board
Regulations, which prohibit any bank from extending any
"purpose credit" to Luxottica Acquisition for the purchase of
U. S. Shoe Shares, on the terms described in the Commitment
Letter.
(b) The Offer fails to disclose that the financing
institution providing purpose credit as defined by the Board
Regulations is a branch of a foreign bank located within the
United States.
29
<PAGE>
(c) The Offer fails to disclose that the Credit
Facility to be used to purchase the Shares is credit for the
"purpose, whether immediate, incidental or ultimate, of
buying or carrying margin stock" and therefore subject to the
requirements of the Board Regulations.
(d) The Offer fails to disclose that all credit
extended by a bank for the purpose of purchasing "any equity
security registered or having unlisted trading privileges on
a national securities exchange," which includes the Shares,
must conform to the requirements of the Board Regulations
limiting the amount of credit available for the purchase of
such "margin stock."
(e) The Offer fails to disclose that, as a loan subject
to the Board Regulations, the Credit Facility must meet
certain collateralization requirements, including but
not limited to the requirement that Credit Suisse may
not make the Credit Facility available to the Borrower
for the purpose of acquiring the Shares in reliance upon
more than fifty percent (50%) of the value of the Shares
as collateral for the loan.
(f) The Offer fails to disclose that there appears to
be insufficient value in the nonstock collateral securing the
$1.450 billion loan for Credit Suisse to make available to
the Borrower all or a portion of the Credit Facility without
violating the Board Regulations.
(g) The Offer fails to disclose the possible effect of
30
<PAGE>
future changes in value of the Italian lira on valuation of
Luxottica's nonstock assets and the Borrower's ability to
comply with the Board Regulations.
182. The 14D-1 violates Sec.Sec.14 (d) and (e) of the Exchange
Act, 15 U. S. C. Sec. 78 n, and the rules and regulations
promulgated thereunder.
COUNT VII
183. U. S. Shoe incorporates by reference each allegation
contained above as if restated in full herein.
184. On or about March 10, 1995, Luxottica issued a press
release announcing that it and certain shareholders of U.S. Shoe
had set March 17, 1995 as the record date for a special meeting of
U.S. Shoe shareholders under Ohio's Control Share Acquisition Act
and the record date for the call by certain U.S. Shoe shareholders
of a special meeting to remove all of the incumbent U.S. Shoe
directors.
185. On or about March 14, 1995, Luxottica announced that it
had rescinded the record dates set for March 17, 1995, and was
setting record dates for both meetings as of March 21, 1995.
Luxottica further announced that March 21 would be the record date
for determining U.S. Shoe shareholders entitled to execute "Agent
Designations" for the call of the second special meeting to oust
the board of directors.
186. The right to set record dates is reserved to the Board
of Directors of U.S. Shoe under the Ohio Revised Code, and
Plaintiffs have no power to set any record date for any special
meeting of U.S. Shoe.
31
<PAGE>
187. The Ohio Revised Code does not provide for the setting
of any record date for the execution of "Agent Designations" for
the purpose of calling special meetings of U.S. Shoe shareholders.
188. Luxottica's public announcements that it has established
record dates for special meetings of U.S. Shoe shareholders and
for the execution of "Agent Designations" are false and misleading
statements of material fact, intended to mislead and confuse
shareholders of U. S. Shoe. These public announcements violate
Ohio Rev. Code Sec. 1707.042 and Sec. Sec. 14 (e) of the
Exchange Act, 15 U.S.C. Sec. 78n, and the rules and regulations
promulgated thereunder. U.S. Shoe and its shareholders will suffer
irreparable harm as a result of such false and misleading
statements absent an injunction.
COUNT VIII
Violations of Ohio Rev. Code Sec. 1707.041
---------------------------------------
189. U. S. Shoe incorporates by reference each allegation
contained above as if restated in fall herein.
190. Ohio Rev. Code Sec. 1707.041 in substance requires that
Luxottica and Luxottica Acquisition send or deliver to all
offerees in Ohio a statement of any plans or proposals they may
have to liquidate U. S. Shoe, sell its assets, effect a merger or
consolidation of it, establish, terminate, convert, or amend
employee benefit plans, close any plant or facility of U. S. Shoe
or any of its subsidiaries or affiliates, change or reduce the
work force of U. S. Shoe or any of its subsidiaries or affiliates,
or make any other major changes to its business structure,
management or personnel, or policies of employment.
32
<PAGE>
191. Ohio Rev. Code Sec. 1707.041 also requires that Luxottica
and Luxottica Acquisition send or deliver to all offerees in Ohio
complete information on the organization and operations of
Luxottica and Luxottica Acquisition, including a description of
each class of their stock and of their long term debt, financial
statements for the current period and for the three most recent
annual accounting periods, a brief description of the location and
general character of the principal physical properties of
Luxottica and Luxottica Acquisition and their subsidiaries, a
description of pending legal proceedings other than routine
litigation to which Luxottica or Luxottica Acquisition are parties
or of which any of their property is the subject, a brief
description of the business done and projected by Luxottica and
Luxottica and their subsidiaries and the general development of
such business over the last three years, the names of all
directors and executive officers together with biographical
summaries of each for the preceding three years to date, and the
approximate amount of any material interest, direct or indirect,
of any of the directors or officers in any material transactions
during the past three years, or in any proposed transactions, to
which Luxottica or Luxottica Acquisition or any of their
subsidiaries are parties.
192. Luxottica and Luxottica have violated the provisions of
Ohio Rev. Code Sec. 1707.041 described above, and have not mailed or
delivered the required information to shareholders of U. S. Shoe
in Ohio.
WHEREFORE, Defendants demand judgment that the Complaint be
33
<PAGE>
dismissed, at Plaintiffs' costs, and for all other relief, legal
and equitable, to which they are entitled.
On its Counterclaim, U. S. Shoe demands judgment:
I That the acquisition of the Shares by Luxottica
and/or Luxottica Acquisition be judged to be in
violation of Sec.14(d)-(e) of the Securities
Exchange Act of 1934, as amended, Regulation 14D of
the Securities and Exchange Commission under
Sec.Sec.14(d)-(e), and Ohio Rev. Code Sec.1707.041;
II That Plaintiffs and all other persons acting for or
on their behalf be preliminarily and permanently
enjoined from consummating the Tender Offer or any
other transaction to gain control of U. S. Shoe
and/or the effect of which would be to merge,
consolidate or in any other way combine the
business of U. S. Shoe with those of Plaintiffs,
until such time as Plaintiffs have complied with
Sec.Sec.14(d) and (e) of the Exchange Act, 15 U.S.C.
Sec. 78n, and the rules and regulations promulgated
thereunder;
III That Plaintiffs and all other persons acting for or
on their behalf be ordered to cease and desist from
violating the Exchange Act and Ohio Rev. Code
Sec. 1701.041 and to withdraw the false and
misleading Offer, Form 14D-1 and Form 041; and
IV For all other relief, legal and equitable, to which
it is entitled.
34
<PAGE>
/s/ Joseph J. Dehner
------------------------------
Joseph J. Dehner (0011321)
Trial Attorney for U. S. Shoe
Defendants
2500 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
(513) 651-6800
35
<PAGE>
OF COUNSEL:
Michael Yarbrough
Curtis A. Hansen
FROST & JACOBS
One Columbus
10 West Broad Street
Columbus, Ohio 43215-3467
(614) 464-1211
Frederick J. McGavran
Grant S. Cowan
D. Scott Gurney
Adam P. Hall
FROST & JACOBS
2500 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
(513) 651-6800
CERTIFICATE OF SERVICE
----------------------
This is to certify that a copy of the foregoing has been sent
by hand delivery to Thomas B. Ridgley, Esq., Vorys, Sater, Seymour
and Pease, 52 East Gay Street, Columbus, Ohio 43216-1008 and
Daniel A. Malkoff, Assistant Attorney General, 26th Floor, 30 East
Broad Street, Columbus, Ohio 43266-0410 on this 22nd day of March,
1995.
/s/ Curtis A. Hansen
----------------------------
36
<PAGE>
Plaintiff's Exhibit A
AVANT-GARDE OPTICS, INC.
44 Harbor Park Drive
Port Washington, New York 10050
March 7, 1995
Via Hand Delivery
-----------------
The United States Shoe Corporation
One Eastwood Drive
Cincinnati, OH 45227
Attention: Bannus B. Hudson and James J. Crowe, Esq.
Re: Demand for Shareholder Records Pursuant to
Ohio Revised Code Sec. 1701.37
------------------------------
Dear Sirs:
Avant-Garde Optics, Inc. ("Shareholder") is the record
owner of 31,375 outstanding common shares, without par value,
including the associated preference share purchase rights of The
United States Shoe Corporation, an Ohio corporation (the
"Company").
Shareholder hereby demands the right (in person, by
agent or attorney) to inspect and make copies or extracts of the
following, during usual business hours:
(A) A complete record of shareholders of the Company,
certified by its transfer agent, showing the name and address of
each shareholder and the number of shares and associated rights
registered in the name of each shareholder, as of (i) the most
recent date available and (ii) the record date to be fixed
pursuant to the letter addressed to the Company included as
Exhibit A hereto, for the determination of Company shareholders
entitled to execute certain agent designations as set forth in
said Exhibit A, and (iii) the record date to be fixed for the
special meeting of Company shareholders to be held pursuant to
Section 1701.831 of the Ohio Revised Code (the "ORC") by reason
of the delivery to the Company by Luxottica Acquisition Corp. and
Luxottica Group S.p.A. of an "Acquiring Person Statement" [as
defined in Section 1701.01(BB) of the ORC] on March 3, 1995, the
fixing of which record date has been requested pursuant to the
letter addressed to the Company and included as Exhibit B hereto
(said two record dates, collectively, the "Record Dates").
(B) Separate magnetic computer tape records of the
shareholders of the Company as of the most recent date available
and as of each of the Record Dates, showing the name and address
of and the number of shares and associated rights held by each
shareholder, such computer processing data as are necessary to
make use of each such magnetic tape, and a printout of each such
magnetic computer tape for verification purposes.
<PAGE>
The United States Shoe Corporation
March 7, 1995
Page 2
(C) All transfer sheets showing changes in each record
of shareholders of the Company referred to in paragraph (A) above
which are in or come into the possession or control of the
Company or its transfer agent after the dates of each such record
until the conclusion of the Tender Offer referred to below.
(D) All information in the Company's possession or
control, or which can reasonably be obtained from nominees of any
central certificate depository system, concerning the number and
identity of the actual beneficial owners of shares of the
Company, including a breakdown of any shareholders in the name of
Cede & Co., Kray & Co., Philadep, DLJ, and other similar
nominees.
(E) Lists as of the dates of each record of
shareholders referred to in paragraph (A) above of all
shareholders owning 1,000 or more shares arranged in descending
order.
(F) Weekly or daily participant listings.
(G) A list or lists and a magnetic computer tape
containing names, addresses, and number of shares of non-
objecting beneficial owners of shares.
(H) A "stop" list or lists relating to shares of the
Company.
(I) A list or lists and a magnetic computer tape
containing the names, addresses, and number of shares
attributable to participants in any employee share ownership or
comparable plan of the Company in which the voting of shares held
by such plan is made, directly or indirectly, by the participants
in said plan, together with a list or lists and a magnetic
computer tape of participants in any dividend reinvestment or
purchase plan of the Company.
Shareholder demands that modifications, additions to or
deletions from any and all information referred to in paragraphs
(A) through (I) above from the date of any such information to
and including the conclusion of the Tender Offer commenced
March 3, 1995 by Luxottica Acquisition Corp. be immediately
furnished to Shareholder statute. The purpose of this demand is
to facilitate communications with other shareholders of the
Company regarding the affairs of the Company and matters relating
to their interests as shareholders, including (i) Luxottica
Acquisition Corp.'s cash tender offer for all outstanding shares
of the Company, (ii) communications with other shareholders
regarding a meeting thereof under 1701.831 of the Ohio Revised
Code, and (iii) communications with other shareholders regarding
solicitations of requests, consents and/or proxies in respect of
special meetings of the shareholders of the Company.
<PAGE>
The United States Shoe Corporation
March 7, 1995
Page 3
Shareholder will bear the reasonable costs of the
Company in connection with the production of the records
requested and will promptly reimburse the Company for any such
costs incurred.
Shareholder hereby designates and authorizes Winston &
Strawn and Vorys, Sater, Seymour and Pease, their partners and
employees and any other persons designated by them or by
Shareholder, acting singly or in any combination, to conduct the
requested inspection, extracting and copying.
Please advise Jonathan Goldstein, Esq. of Winston &
Strawn, 175 Water Street, New York, New York 10038, (212) 858-
6714 when and where the requested information will be available
to Shareholder. If Mr. Goldstein does not hear from you by 1:00
P.M. E.S.T., March 10, 1995, Shareholder will conclude that the
Company has refused this demand and other proper steps will be
taken to confirm and enforce Shareholder's right to the requested
records.
Please acknowledge receipt of this letter by signing
and dating the enclosed copy of this letter in the place
indicated below and returning it to the waiting representative of
Vorys, Sater, Seymour and Pease.
Very truly yours,
AVANT-GARDE OPTICS, INC.
By: /s/ Michael A. Boxer
-------------------------------
Name: Michael A. Boxer
Title: General Counsel and
Director of Business
Affairs
<PAGE>
The United States Shoe Corporation
March 7, 1995
Page 4
Receipt acknowledged by:
The United States Shoe Corporation
By: /s/ James J. Crowe
-----------------------------
Name: J. J. Crowe
---------------------------
Title: Secretary
---------------------------
Date: 3/8/95
---------------------------
<PAGE>
Plaintiff's Exhibit B
Luxottica Group S.p.A. Luxottica Acquisition Corp.
Via Valcozzena 10 1209 Orange Street
32021 Agordo (Belluno), Wilmington, Delaware 19801
Italy c/o The Corporation Trust Company
March 7, 1995
VIA HAND DELIVERY
-----------------
The United States Shoe Corporation
Attn:Mr. Bannus Hudson and
the Board of Directors
One Eastwood Drive
Cincinnati, OH 45227
Re: Record Date for Special Meeting
Under Ohio Revised Code Sec. 1701.831
-------------------------------------
Ladies and Gentlemen:
Luxottica Acquisition Corp. ("Purchaser") and Luxottica
Group S.p.A. ("Luxottica") have commenced a tender offer for all
outstanding Common Shares, without par value, and associated
preference share purchase rights of The United States Shoe
Corporation (such rights together with such Common Shares, the
"Shares") for $24.00 net per Share in cash, subject to the terms
and conditions described in Purchaser's Offer to Purchase dated
March 3, 1995, and the related Letter of Transmittal, as the same
may be amended from time to time (the "Offer"). In connection
with the Offer and as required by Section 1701.831 ("Section
831") of the Ohio Revised Code (the "ORC"), Purchaser and
Luxottica have delivered to The United States Shoe Corporation
("U.S. Shoe") an "Acquiring Person Statement" (as defined in
Section 1701.01(BB) of the ORC) on March 3, 1995.
Accordingly, Divisions (C) and (D) of Section 831,
taken together, require that (i) on or before March 13, 1995, the
Board of Directors of U.S. Shoe call a special meeting of its
shareholders (the "Special Meeting") for the purpose of voting on
Purchaser's proposed acquisition of shares pursuant to the Offer
and (ii) notice of the Special Meeting be given as promptly as
reasonably practicable by U.S. Shoe to all shareholders of record
as of the record date set for the Special Meeting.
<PAGE>
The United States Shoe Corporation
March 7, 1995
Page 2
Purchaser and Luxottica hereby request that the Board
of Directors of U.S. Shoe fix, within the period ending 12:00
Noon E.S.T., on Friday, March 10, 1995, a record date for the
determination of shareholders of U.S. Shoe entitled to notice of
and to vote at the Special Meeting. Purchaser and Luxottica
further request that the Board of Directors of U.S. Shoe fix the
close of business on Friday, March 17, 1995, as the Record Date,
believing that to be a reasonable choice for the Record Date,
selected in good faith.
Please advise our counsel, Jonathan Goldstein, Esq. of
Winston & Strawn, 175 Water Street, New York, New York 10038,
telephone number 212-269-2500, telecopier number 212-858-4700, on
or before 1:00 p.m. E.S.T., on March 10, 1995, of the action
taken by the Board of Directors of U.S. Shoe in response to this
request.
Luxottica Group S.p.A.
By: /s/ Claudio Del Vecchio
-------------------------------
Claudio Del Vecchio
Managing Director
Luxottica Acquisition Corp.
By: /s/ Claudio Del Vecchio
-------------------------------
Claudio Del Vecchio
President
<PAGE>
Plaintiff's Exhibit C
Luxottica Acquisition Corp. Luxottica Group S.p.A.
1209 Orange Street Via Valcozzena 10
Wilmington, Delaware 19801 32021 Agordo (Belluno), Italy
c/o The Corporation Trust Company
Avant-Garde Optics, Inc.
44 Harbor Park Drive
Port Washington, New York 11050
VIA HAND DELIVERY
-----------------
The United States Shoe Corporation March 7, 1995
Attn:Mr. Bannus Hudson and
the Board of Directors
One Eastwood Drive
Cincinnati, OH 45227
Re: Record Date for Shareholders' Appointment of
Designated Agents to Call a Special Meeting
--------------------------------------------
Ladies and Gentlemen:
Luxottica Acquisition Corp. ("Purchaser") and Luxottica
Group S.p.A. ("Luxottica") have commenced a tender offer for all
outstanding Common Shares, without par value, and associated
preference share purchase rights of The United States Shoe
Corporation (such rights together with such Common Shares, the
"Shares") for $24.00 net per Share in cash, subject to the terms
and conditions described in Purchaser's Offer to Purchase, dated
March 3, 1995, and the related Letter of Transmittal, as the same
may be amended from time to time (the "Offer"). In connection
with the Offer, Purchaser and Luxottica intend to solicit and
obtain from holders of the Shares certain agent designations (the
"Agent Designations") sufficient to authorize the call of a
special meeting of such shareholders and related actions.
Claudio Del Vecchio, Debra Del Vecchio, and Avant-Garde
Optics, Inc. (the "Shareholders") are the owners of Shares.
Claudio Del Vecchio and Avant-Garde Optics, Inc. are affiliates
of Purchaser and Luxottica. Debra Del Vecchio is the wife of
Claudio Del Vecchio. At the request of Purchaser and Luxottica,
and in order to initiate the obtaining of the Agent Designations,
the Shareholders have taken action to execute Agent Designations
and have delivered the same to Purchasers and Luxottica.
<PAGE>
The United States Shoe Corporation
March 7, 1995
Page 2
The Shareholders, together with Purchaser and
Luxottica, hereby request that the directors of The United States
Shoe Corporation (the "Company") fix, within the period ending at
12:00 o'clock Noon, E.S.T., on Friday, March 10, 1995, a record
date for the determination of holders of the Shares entitled to
execute Agent Designations (the "Record Date"). The
Shareholders, together with Purchaser and Luxottica, further
request that the directors of the Company fix the close of
business on March 17, 1995, as the Record Date, believing that to
be a reasonable choice for the Record Date, selected in good
faith.
The Shareholders, Purchaser and Luxottica request the
favor of your advice, on or before 1:00 P.M., E.S.T., on Friday,
March 10, 1995, as to the date fixed by the directors of the
Company as the Record Date, which advice should be directed to
Michael A. Boxer, Esq., General Counsel to Avant-Garde Optics,
Inc., by facsimile transmission to him at (516) 484-9010. If the
requested advice as to the Record Date is not so received by
Mr. Boxer by such time, the Shareholders, Purchaser and Luxottica
will assume that the Record Date has not been fixed by the
directors of the Company.
Very truly yours,
/s/ Claudio Del Vecchio Luxottica Group S.p.A.
----------------------------- Luxottica Acquisition Corp., and
Claudio Del Vecchio, Avant-Garde Optics, Inc.
an Individual
/s/ Debra Del Vecchio By: /s/ Claudio Del Vecchio
------------------------ ---------------------------
Debra Del Vecchio Claudio Del Vecchio, their
an Individual authorized representative
Exhibit (g)(8)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
Luxottica Group S.p.A., et al.,
Plaintiffs,
vs. Case No. C2-95-244
JUDGE GRAHAM
The United States Shoe
Corporation, et al.,
Defendants.
ORDER
-----
This matter is before the Court on the motion of plaintiff
Avant-Garde Optics, Inc. ("Avant-Garde") for a hearing and an
order requiring the defendant United States Shoe Corporation
("U.S. Shoe") to show cause why an order should not be entered
directing it to provide shareholder records.
Avant-Garde is a subsidiary corporation of Luxottica Group
S.p.A. and a record shareholder of U.S. Shoe. On March 7, 1995,
Avant-Garde delivered a written demand to U.S. Shoe to inspect
and copy shareholder records. On March 10, 1995, U.S. Shoe
responded by refusing plaintiff's request for access to
shareholder records on the ground, among others, that
plaintiff's request must comply with the proxy rules of the
Securities and Exchange Commission ("SEC"). Subsequently, on
March 16, 1995, Avant-Garde and U.S. Shoe entered into an
agreement regarding each of plaintiff's requests in its letter of
March 7th with the exception of part "G" of that letter.
(Hearing, March 16, 1995). Part "G" of plaintiff's letter
<PAGE>
requests that U.S. Shoe provide "a list or lists and a magnetic
computer tape containing names, addresses, and number of shares
of non-objecting beneficial owners of shares." (Plaintiff's
exhibit A). In an oral hearing before this Court, defendant
stated that it did not possess this information and plaintiff
does not dispute this fact. (Hearing, March 16, 1995).
In general, a corporation's shareholder records will not
reflect the names or addresses of the beneficial owners but will
instead list the names of nominees used by depository firms. The
Depository Trust Co. uses "Cede & Co." as the name of the nominee
for shares it holds for brokerage firms or financial
institutions, who in turn have purchased shares on behalf their
customers (beneficial owners). See Sadler v. NCR Corporation,
--- --------------------------
928 F.2d 48, 50 (2nd Cir. 1991). Thus, the name Cede & Co.
appearing on the corporate stock ledge is "thrice removed from
the true beneficial owner." RB Associates of New Jersey v.
---------------------------------
Gillette Company, Civ. A. No. 9711, 1988 WL 27731, (Del. Ch.
-----------------
1988). The list of non-objecting beneficial owners ("NOBO list")
contains the names of those shareholders who do not object to the
disclosure of their name and address by the registered owner of
the stock to the corporation itself for the limited purpose of
facilitating direct communication on corporate matters. Id.
--
Under SEC regulations, brokers and other record holders of stock
in street name must compile a NOBO list at a corporation's
request within five business days. 17 C.F.R Sec.240.14b-1
(b)(3)(i) (1994); Sadler, 928 F.2d at 50.
------
2
<PAGE>
A shareholder's right to inspect and copy the shareholder
records of an Ohio corporation is governed by Ohio Revised Code
Sec.1701.37. This statute provides:
(C) Any shareholder of the corporation, upon written
demand stating the specific purpose. . . shall have the
right to examine in person or by agent or attorney at
any reasonable time and for any reasonable and proper
purpose. . . records of shareholders. . . if any, on
------- --
file with the corporation, and to make copies or
---------------------------
extracts thereof. (Emphasis added)
R.C. Sec.1701.37(C).
Avant-Garde has stated that its purpose for requesting the
NOBO list is:
to "facilitate communications with other shareholders
of the Company regarding the affairs of the Company and
matters relating to their interests as shareholders,
including (i) Luxottica Acquisition Corp.'s cash tender
offer. . . (ii) communications with other shareholders
regarding a meeting. . . under Sec.1701.831. . . and
(iii) communications with other shareholders regarding
solicitations of requests, consents and/or proxies."
(Plaintiff's exhibit A). Plaintiff argues that R.C. Sec.1701.37
imposes an obligation upon defendant to produce the NOBO list of
U.S. Shoe shareholders. To support this contention, plaintiff
relies on the Second Circuit's decision in Sadler v. NCR
---------------
Corporation, supra, which held that an out-of-state corporation
----------- -----
may be required to compile and produce a NOBO list. The New York
statute at issue in that case permitted a resident, who is a
record stockholder of a foreign corporation doing business in New
York, to require the corporation to produce a record of the names
and addresses of all shareholders, the number and class of shares
held by each and the date when they respectively became the
owners of record. Sadler 928 F.2d at 50-51; N.Y. CLS Bus. Corp.
------
3
<PAGE>
Sec.1315. The court based its holding on a finding that New York
courts had liberally construed this statute to facilitate
communication among shareholders on issues concerning corporate
matters. Id at 52
--
Since plaintiff's request in its letter of March 7th is
based upon R.C. Sec.1701.37, Ohio law is controlling in this case.
Unlike the courts in New York, Ohio courts have not ruled on the
question of whether R.C. Sec.1701.37 should be liberally or narrowly
construed. Thus, this Court must predict how the state's highest
court would resolve this issue. See Cenergy Corp. v. Bryson Oil
--- ---------------------------
& Gas P.L.C., 662 F. Supp. 1144, 1145 (D.Nev. 1987) (court
-------------
refused to compel corporation to compile and produce shareholder
information not in its possession). The plain language of the
Ohio statute states that a shareholder may inspect and make
copies of shareholder records "if any, on file with the
corporation." It contains language not present in the New York
statute, which suggests that its drafters intended it to be
narrowly construed not to require a corporation to provide
information it does not have in its possession. In RB Associates
-------------
v. Gillette, supra, Chancellor Allen, in a thorough analysis of
------------ -----
this subject, stated:
Once an issuer has acquired that additional
information. . . it has an obligation to disclose it to
a shareholder as part of the production of a stock
list. But where it has not done so, the ideal of
equality of access to information concerning identity
of shareholders ought not, in my opinion, go so far as
to compel the directors to exercise a judgment to
obtain NOBO lists when the corporation itself has no
need for them and thus no intention to obtain them.
This Court agrees. As previously stated, U.S. Shoe does not
possess the NOBO list requested by plaintiff. If U.S. Shoe
4
<PAGE>
possessed the NOBO list, Avant-Garde would have the right to
examine it under the terms of the Ohio statute since it would
then be "records of shareholders. . . on file with the
corporation." However, since defendant does not possess it, this
Court, like the courts in RB Associates and Cenergy, will not
------------- -------
compel U.S. Shoe to compile and produce this information.
Accordingly, this Court concludes that in the event that
defendant obtains a copy of the NOBO list requested in part "G"
of plaintiff's March 7th letter, it shall notify the plaintiff
promptly and shall permit the plaintiff to inspect and copy it.
Otherwise, plaintiff's motion to require defendant to procure and
produce a NOBO list is denied.
It is so ORDERED.
/s/ James L. Graham
_________________________________
JAMES L. GRAHAM
United States District Court
DATE: March 22, 1995
5
Exhibit (g)(9)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
Luxottica Group S.p.A., et al.,
Plaintiffs,
vs. Case No. C2-95-244
JUDGE GRAHAM
The United States Shoe
Corporation, et al.,
Defendants.
ORDER
-----
This matter came before the Court on March 23, 1995 for a hearing on
Defendant The United States Shoe Corporation's Motion for a Preliminary and
Permanent Injunction Enjoining Plaintiffs from Distributing False and
Misleading Information Regarding Plaintiffs' Ability to Set Record Dates
for Meetings of U.S. Shoe Shareholders and "Agent Designations" for Calling
Meetings. Upon consideration of the filings of Plaintiffs and Defendants,
and the arguments presented by counsel at the hearing, and for the reasons
stated upon the record of said hearing, the Court hereby finds that U.S.
Shoe's Motion is well taken and should be granted.
Accordingly, Plaintiffs are hereby permanently enjoined from making
any public statement, any direct statement to U.S. Shoe shareholders,
and/or any statement in any proxy or tender offer materials to be delivered
to U.S. Shoe shareholders which represents that Plaintiffs have the ability
to set or have set, either separately or in conjunction with one another
and Claudio and Debra Del Vecchio, any record date in connection with any
meeting of the shareholders of U.S. Shoe and/or any record date for
soliciting consents and/or "Agent Designations" for the purpose of calling
any special meeting of U.S. Shoe shareholders.
It is so ORDERED.
/s/ James L. Graham
----------------------------
JAMES L. GRAHAM
United States District Judge
DATE: March 23, 1995
Exhibit (g)(10)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
Luxottica Group S.p.A, et al.,
Plaintiffs,
vs. Case No. C2-95-244
JUDGE GRAHAM
The United States Shoe
Corporation, et al.,
Defendants.
ORDER
-----
This Court held a hearing on March 23, 1995 on defendant United States
Shoe Corporation's motion for a preliminary and permanent injunction enjoining
plaintiffs from improper use of the shareholder lists provided to Avant-Garde
Optics, Inc. pursuant to R.C. Sec.1701.37. For the reasons stated on the record,
the Court denies defendant's motion for injunctive relief.
It is so ORDERED.
/s/ JAMES L. GRAHAM
-------------------------
JAMES L. GRAHAM
United States District Judge
DATE: March 23, 1995
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
LUXOTTICA GROUP S.p.A., et. al., :
-------
Plaintiffs, :
v. : Civil Action No. C-2-95-244
THE UNITED STATES SHOE : Judge James L. Graham
CORPORATION, et. al.,
-------
:
Defendants.
:
PLAINTIFFS' MOTION FOR LEAVE
TO FILE A THIRD AMENDED COMPLAINT
---------------------------------
Plaintiffs Luxottica Group S.p.A., Luxottica Acquisition
Corp., and Avant-Garde Optics, Inc. move this Court, pursuant to
Fed. R. Civ. P. 15(d), to supplement their Complaint by adding
four claims which have arisen since this action was filed. Leave
to supplement should be granted because these claims arose within
the past 10 days and there has been no delay in asserting the
claims. A memorandum in support of this motion and a copy of the
Third Amended Complaint are attached hereto.
/s/ Thomas B. Ridgley
____________________________
Thomas B. Ridgley (0000910)
Trial Attorney
VORYS, SATER, SEYMOUR AND PEASE
52 East Gay Street
P.O. Box 1008
Columbus, Ohio 43216-1008
(614) 464-6229
Attorneys for Plaintiffs
<PAGE>
OF COUNSEL:
WINSTON & STRAWN
Anthony J. D'Auria
175 Water Street
New York, New York 10038
(212) 269-2500
VORYS, SATER, SEYMOUR AND PEASE
Laura G. Kuykendall (0012591)
52 East Gay Street
P.O. Box 1008
Columbus, Ohio 43216-1008
(614) 464-6400
<PAGE>
MEMORANDUM IN SUPPORT OF PLAINTIFFS' MOTION
FOR LEAVE TO FILE A THIRD AMENDED COMPLAINT
-------------------------------------------
On March 3, 1995, plaintiffs commenced a cash Tender Offer
for all shares of The United States Shoe Corporation ("U.S.
Shoe"). This action also was filed on that same date.
Plaintiffs now seek leave to add four new claims which have
arisen since this action was filed.
First, since March 3, U.S. Shoe's Board of Directors has
contacted and negotiated with various parties about transactions
involving different parts of U.S. Shoe's business. On March 16,
U.S. Shoe announced that it had agreed to sell the footwear
operations to Nine West Group, Inc. ("Nine West"), and further
announced that it is engaged in discussions with other parties
regarding its other businesses for the stated purpose of
"enhancing value in the near term" as part of an "initiative to
maximize shareholder value." U.S. Shoe's Directors have refused,
however, to negotiate with plaintiffs without impossing unreasonable
conditions, even though plaintiffs are the only entities which have
publicly announced an interest in purchasing U.S. Shoe in its entirety.
Plaintiffs submit that this course of conduct violates the directors'
duties under Ohio law.
Second, U.S. Shoe's announcement of the agreement and
proposed transaction with Nine West, and its intent to pursue
sale of other parts of the company, make it clear that the
directors are seeking to sell all or substantially all of U.S.
Shoe's assets. The Nine West transaction, and any other
transactions undertaken pursuant to this plan, thus are subject
to the shareholder approval under Ohio law. U.S. Shoe's
<PAGE>
directors have failed to seek and obtain shareholder
authorization, however, in violation of R.C. Sec.1701.76.
Third, the sale of U.S. Shoe's footwear operations is
contrary to the purpose set forth in U.S. Shoe's Articles of
Incorporation, thus requiring that the shareholders amend the
Articles to change the statement of corporate purpose. U.S. Shoe
directors also have failed to seek and obtain such a vote, in
violation of R.C. Sec.Sec.1701.69(B)(3) and 1701.71(B)(7).
Fourth, on March 16, U.S. Shoe filed a Schedule 14D-9 which
omits to state material facts concerning the Nine West agreement
and proposed transaction, which fails to disclose that a
shareholder vote is required to authorize that agreement and
proposed transaction, which fails to attach schedules necessary
to a full and complete understanding of that agreement and
proposed transaction, and which fails to adequately describe the
U.S. Shoe Board of Directors' plan to enhance value in the near
term. U.S. Shoe's Schedule 14D-9 therefore violates Section 14(e)
of the Williams Act, 15 U.S.C. Sec.78n(e).
The Sixth Circuit has held that leave to amend under Fed. R.
Civ. P. 15(a) or to supplement under Fed R. Civ. P. 15(d) should
be freely given. Federal Deposit Ins. Corp. v. Bates, 42 F.3d
-----------------------------------
369, 373 (6th Cir. 1994); Marks v. Shell Ohio Co., 830 F.2d 68,
-----------------------
69 (6th Cir. 1987). Leave may be denied only when there is both
an unjustifiable delay in asserting the claim and a "significant
showing of prejudice" caused by the delay. Moore v. City of
----------------
Paducah, 790 F.2d 557, 562 (6th Cir. 1986). Here, the events
-------
which gave rise to the new claims -- the announcement of the Nine
<PAGE>
West agreement and proposed transaction, the announcement of
efforts to sell other parts of the company, the continuing
refusal to negotiate with plaintiffs, and the filing of the
Schedule 14D-9 -- all occurred on or after March 16, 1995, less
than 10 days ago. The original complaint was filed less than
three weeks ago. In short, there has been no delay and no undue
prejudice to U.S. Shoe, and leave to supplement therefore should
be granted.
Respectfully submitted,
/s/ Thomas B. Ridgley
____________________________
Thomas B. Ridgley (0000910)
Trial Attorney
VORYS, SATER, SEYMOUR AND PEASE
52 East Gay Street
P.O. Box 1008
Columbus, Ohio 43216-1008
(614) 464-6229
Attorneys for Plaintiffs
OF COUNSEL:
WINSTON & STRAWN
Anthony J. D'Auria
175 Water Street
New York, New York 10038
(212) 269-2500
VORYS, SATER, SEYMOUR AND PEASE
Laura G. Kuykendall (0012591)
52 East Gay Street
P.O. Box 1008
Columbus, Ohio 43216-1008
(614) 464-6400
<PAGE>
CERTIFICATE OF SERVICE
----------------------
The undersigned hereby certifies that a copy of the
foregoing Motion for Leave to File a Third Amended Complaint was
served, by hand delivery, upon Michael K. Yarbrough, Esq., Frost
& Jacobs, One Columbus, Suite 1000, 10 West Broad Street,
Columbus, Ohio 43215-1467, and by overnight mail upon Joseph
Dehner, Esq., Frost & Jacobs, 2500 PNC Center, 201 East Fifth
Street, Cincinnati, Ohio 45201, Counsel for the defendants The
United States Shoe Corporation, Joseph H. Anderer, Philip E.
Beekman, Gilbert Hahn, Jr., Roger L. Howe, Bannus B. Hudson,
Lorrence Kellar, Albert M. Kronick, Thomas Laco, Charles S.
Mechem, Jr., John L. Roy, and Phyllis S. Sewell; and by hand
delivery upon Daniel Malkoff, Esq., Assistant Attorney General,
State Office Tower, 26th Floor, Columbus, Ohio 43215, Counsel
for defendants Mark Holderman, Donna Owens, and State of Ohio,
this 24th day of March, 1995.
/s/ Thomas B. Ridgley
____________________________
Thomas B. Ridgley
<PAGE>
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
LUXOTTICA GROUP S.p.A., :
Via Valcozzena 10 :
32021 Agordo :
(Belluno) Italy, :
:
and :
:
LUXOTTICA ACQUISITION CORP., :
1209 Orange Street :
Wilmington, Delaware 19801 :
c/o Corporation Trust Company, :
:
and :
:
AVANT-GARDE OPTICS, INC., :
44 Harbor Park Drive :
Port Washington, New York 11050, :
:
Plaintiffs, :
:
v. :Civil Action No. C-2-95-244
: Judge Graham
THE UNITED STATES SHOE :
CORPORATION, :
One Eastwood Drive :
Cincinnati, Ohio 45227, :
:
and :
:
JOSEPH H. ANDERER, :
c/o The United States Shoe Corporation :
One Eastwood Drive :
Cincinnati, Ohio 45227, :
:
and :
:
PHILIP E. BEEKMAN, :
5402 East Galbraith :
Cincinnati, Ohio 45236, :
:
<PAGE>
and :
:
GILBERT HAHN, JR., :
c/o The United States Shoe Corporation :
One Eastwood Drive :
Cincinnati, Ohio 45227, :
:
and :
:
ROGER L. HOWE, :
6450 Given Road :
Indian Hills, Ohio 45243, :
:
and :
:
BANNUS B. HUDSON, :
1136 Fort View Place :
Cincinnati, Ohio 45202-1713, :
:
and :
:
LORRENCE KELLAR, :
2167 Grandin Road :
Cincinnati, Ohio 45208-3359, :
:
and :
:
ALBERT M. KRONICK, :
35 Prospect Park S.W. :
Brooklyn, New York 11215-5902, :
:
and :
:
THOMAS LACO, :
9075 Cunningham Road :
Cincinnati, Ohio 45243-1503, :
:
and :
:
CHARLES S. MECHEM, JR., :
6225 Redbirdhollow Lane :
Cincinnati, Ohio 45243-3352, :
:
and :
:
-2-
<PAGE>
JOHN L. ROY, :
5089 Signal Hill Lane :
Cincinnati, Ohio 45244, :
:
and :
:
PHYLLIS S. SEWELL, :
c/o The United States Shoe Corporation :
One Eastwood Drive :
Cincinnati, Ohio 45227, :
:
and :
:
MARK HOLDERMAN, :
Commissioner of Securities :
Ohio Division of Securities :
South High Street :
Columbus, Ohio 43266-0548, :
:
and :
:
DONNA OWENS, :
Director of Commerce :
Department of Commerce :
of the State of Ohio :
South High Street :
Columbus, Ohio 43266-0548, :
:
and :
:
STATE OF OHIO, :
c/o Betty D. Montgomery :
Attorney General of Ohio :
State Office Tower :
East Broad Street :
Columbus, Ohio 43215, :
:
Defendants. :
-3-
<PAGE>
THIRD AMENDED
VERIFIED COMPLAINT FOR TEMPORARY RESTRAINING
ORDER AND FOR PRELIMINARY AND PERMANENT
INJUNCTIVE RELIEF AND DECLARATORY JUDGMENT
------------------------------------------
Plaintiffs, by their undersigned attorneys, as and for
their Third Amended complaint herein, aver upon knowledge as to
themselves and upon information and belief as to all other
matters as follows:
NATURE OF THIS ACTION
---------------------
1. Plaintiffs seek (a) temporary, preliminary and
permanent injunctive relief, pursuant to Rule 65, Fed. R. Civ.
P., against the enforcement of the Ohio Take-Over Act, Ohio Rev.
Code Sec.Sec. 1707.041, 1707.042, 1707.23 and 1707.26 (the "Take-
Over Act"), which purports to regulate nationwide tender offers
governed by federal law; (b) preliminary and permanent injunctive
relief prohibiting application of certain provisions of the Ohio
Control Share Acquisition Act set forth in Division (E)(1) of
Ohio Rev. Code Sec. 1701.831 (the "Control Share Acquisition
Act"), by virtue of Ohio Rev. Code Sec. 1701.01(CC)(2), by
defendants to impair the voting rights of holders of certain of
U.S. Shoe's Common Shares; (c) preliminary and permanent
injunctive relief prohibiting U.S. Shoe and its directors from
taking any steps to enforce or amend the Preference Share
Purchase Rights Agreement, commonly referred to as the "Poison
Pill Plan" [except to redeem the rights issued thereunder (the
"Rights")] and directing U.S. Shoe and its directors to redeem
all Rights issued pursuant to U.S. Shoe's Poison Pill Plan, as
defined hereinafter; (d) preliminary and permanent injunctive
relief ordering U.S. Shoe to permit Avant-Garde, or its
designated representative, to examine the shareholder records of
U.S. Shoe; (e) preliminary and permanent injunctive relief
requiring U.S. Shoe's directors to negotiate with plaintiffs and
enjoining U.S. Shoe's directors from implementing certain benefit
plans revised or adopted since December, 1994; (f) preliminary
and permanent injunctive relief prohibiting U.S. Shoe and its
directors from consummating the proposed sale of footwear
operations to Nine West Group Inc. without a shareholder vote
and shareholder approval of on amendment to U.S. Shoe's Articles
of Incorporation; and (g) preliminary and permanent injunctive
relief requiring U.S. Shoe to amend its Schedule 14D-9 to make
certain misleading statements therein not misleading.
-4-
<PAGE>
2. Plaintiffs seek a declaratory judgment
pursuant to 28 U.S.C. Sec. 2201 and Rule 57, Fed. R. Civ. P.,
declaring that (a) the Take-Over Act is unconstitutional to the
extent it is sought to be applied to the proposed acquisition by
Plaintiffs of all of the outstanding Common Shares of U.S. Shoe;
(b) the Control Share Acquisition Act is unconstitutional to the
extent it is sought to be applied to impair the voting rights of
holders of U.S. Shoe's Common Shares described in Ohio Rev. Code
Sec. 1701.01(CC)(2); (c) U.S. Shoe's Poison Pill Plan and the
Rights issued thereunder are invalid, unlawful, null and void;
(d) Avant-Garde has a right to examine and copy the
shareholder records of U.S. Shoe, and to obtain the information
sought by the March 7, 1995 demand letter that Avant-Garde sent
to U.S. Shoe; (e) U.S. Shoe's directors have breached their
fiduciary duties; (f) the proposed sale of the footwear division
to Nine West Group Inc. and the sale of other assets by U.S.
Shoe to other parties cannot be consummated without shareholder
authorization and shareholder approval of appropriate amendments
to U.S. Shoe's Articles of Incorporation; and (g) the Schedule
14D-9 filed by U.S. Shoes violates 15 U.S.C. Sec. 78n(e)
PARTIES
-------
3. Plaintiff Luxottica Group S.p.A. ("Luxottica Group")
is a corporation organized under the laws of the Republic of
Italy with its principal place of business in Belluno, Italy.
Luxottica Group and Luxottica Acquisition Corp. ("Luxottica
Acquisition"), a Delaware corporation and an indirect wholly-
owned subsidiary of Luxottica Group, announced and commenced a
nationwide cash tender offer for all of the outstanding Common
Shares of U.S. Shoe ("hereinafter collectively referred to as
"Offeror Plaintiffs").
4. Plaintiff Avant-Garde Optics, Inc. ("Avant-Garde") is
a corporation organized under the laws of New York with its
principal place of business in New York. Avant-Garde is a wholly
owned subsidiary of Luxottica Group, and has been a shareholder
of U.S. Shoe since November 7, 1994. Avant-Garde is a Plaintiff
as to Counts Six through Ten.
5. Defendant The United States Shoe Corporation ("U.S.
Shoe") is an Ohio corporation with its principal executive
offices in Cincinnati, Ohio.
-5-
<PAGE>
6. Defendants Anderer, Beekman, Hahn, Howe,
Hudson, Kellar, Kronick, Laco, Mechem, Roy and Sewell are
directors of U.S. Shoe (the "Directors"), and each is a citizen
of states other than Delaware.
7. Defendant Mark Holderman (the "Commissioner")
is a citizen and resident of Ohio and is the Commissioner of the
Division of Securities, Department of Commerce of the State of
Ohio (the "Division"). Pursuant to Ohio Rev. Code Sec. 1707.46,
the Division is charged with the enforcement of all laws and
rules enacted to regulate the sale of securities. In the
enforcement of those laws, the Commissioner is empowered, inter
-----
alia, to conduct hearings and investigations (Ohio Rev. Code
----
Sec.Sec. 1707.041, 1707.23), issue cease and desist orders (Ohio
Rev. Code Sec. 1707.23) and seek court-ordered injunctive relief
(Ohio Rev. Code Sec.Sec. 1707.23, 1707.26). Further, the
Commissioner is empowered, pursuant to Ohio Rev. Code Sec.
1707.23(E) and (H), to enforce certain criminal provisions and
may refer certain enforcement matters to the Attorney General and
the Prosecuting Attorney.
8. Defendant Donna Owens is a citizen and
resident of Ohio and is the Director of Commerce, Ohio Department
of Commerce. The Department of Commerce has authority to enforce
provisions of the Take-Over Act.
9. The State of Ohio is being made a defendant herein by
and through Betty D. Montgomery, the Attorney General of Ohio.
-6-
<PAGE>
JURISDICTION AND VENUE
----------------------
10. This action arises under (a) Sections 14(a), 14(d),
14(e) and 28 of the Securities Exchange Act of 1934 (the
"Exchange Act"), 15 U.S.C. Sec.Sec. 78(a), 78n(d), 78n(e) and
78bb, and the rules and regulations promulgated thereunder by the
Securities and Exchange Commission (the "SEC"), 17 C.F.R.
Sec.Sec. 240.14d-1 et seq.; and (b) the Commerce Clause, Article
-- ----
I, Section 8, Clause 3, the Impairment of Contracts Clause,
Article I, Section 10, the Supremacy Clause, Article VI, Clause 2
and the due process clause of the Fourteenth Amendment of the
United States Constitution and 42 U.S.C. Sec. 1983.
11. This Court has subject matter jurisdiction over this
action pursuant to (a) Section 27 of the Exchange Act, 15 U.S.C.
Sec. 78aa; (b) 28 U.S.C. Sec. 1331(a) (federal question); (c) 28
U.S.C. Sec. 1332 (diversity of citizenship); (d) 28 U.S.C. Sec.
1337(a) (commerce and antitrust regulation); (e) 28 U.S.C. Sec.
1343(a) (deprivation of constitutional rights); and (f) 28 U.S.C.
1367 (supplemental jurisdiction). Plaintiffs and defendants are
of diverse citizenship, and the amount in controversy, exclusive
of interest and costs, exceeds $50,000. Further, this Court has
pendent jurisdiction over the state law claims.
12. Venue is proper in this judicial district pursuant
to 28 U.S.C. Sec. 1391(b) and (c) because all of the defendants
reside in or are subject to personal jurisdiction in this
district and the claims asserted herein arise from events and/or
omissions in this District; and pursuant to Section 27 of the
Exchange Act, 15 U.S.C. Sec. 78aa, because acts or transactions
constituting violations of the Exchange Act have occurred or are
threatened to occur in this District, and the defendants are in,
inhabit or transact business in this district. Venue in this
division
-7-
<PAGE>
is proper pursuant to Rule 3.3(c) of the S.D. Ohio L.R. because
defendants Holderman and Owens reside, and the cause of action
arose, in this division.
THE TENDER OFFER
----------------
13. In telephone calls in December, 1994 and a meeting
in January, 1995, Luxottica Group advised senior management of
U.S. Shoe that Luxottica Group proposed to acquire U.S. Shoe by
means of an all cash merger involving payment to U.S. Shoe's
shareholders of a substantial premium above the then current
market value of U.S. Shoe's Common Shares, and wished to engage
in negotiations to effectuate such a transaction. The financial
advisors of Luxottica Group and U.S. Shoe also held several
meetings during this period in which Luxottica Group's financial
advisors reiterated the merger proposal.
14. Luxottica Group advised U.S. Shoe that it wished
access to non-public information about U.S. Shoe's businesses to
offer a fully-valued cash merger proposal. However, U.S. Shoe
and Plaintiffs were unable to agree on the terms of a standstill.
15. In light of U.S. Shoe's response to Luxottica
Group s friendly overtures, Luxottica Group decided to make an
offer directly to U.S. Shoe's shareholders.
16. Accordingly, Offeror Plaintiffs commenced, on March
3, 1995, a cash tender offer (the "Tender Offer") for all of the
outstanding shares of U.S. Shoe at a price of $24 per share.
17. The Tender Offer represents a substantial
transaction in interstate commerce totaling more than
$1,201,654,248. The Tender Offer is being made to all of U.S.
Shoe's shareholders, who are widely dispersed throughout the
United States, with the majority located outside the State of
Ohio. The offer is fair, reasonable and adequate. Further, it
is not coercive. It is for all shares. If the Tender Offer is
successful, Offeror Plaintiffs intend, as soon as practicable, to
consummate a merger and to acquire at the same price all
remaining shares not tendered in the Tender Offer.
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<PAGE>
18. The Tender Offer complies in all respects
with the detailed substantive and disclosure requirements of
federal law, which comprehensively regulate nationwide tender
offers, including, among other things, the Exchange Act and
certain amendments thereto (the "Williams Act"), and rules and
regulations promulgated by the SEC pursuant to Congressional
authorization. Offeror Plaintiffs are filing a Schedule 14D-1
with the SEC with respect to the Tender Offer which contains,
among other exhibits, an Offer to Purchase setting forth the
material terms of the Tender Offer. Offeror Plaintiffs are also
filing a Form 041 together with the aforesaid Schedule 14D-1, the
Offer to Purchase and all other exhibits thereto, with the
Division, without prejudice to Offeror Plaintiffs position that
the Take-Over Act is unconstitutional or inapplicable to the
Tender Offer. In addition, Offeror Plaintiffs are delivering an
Acquiring Person Statement to U.S. Shoe pursuant to the Control
Share Acquisition Act, without prejudice to Offeror Plaintiffs
position that the Control Share Acquisition Act is
unconstitutional to the extent it is applied to impair certain
voting rights.
FEDERAL REGULATION OF THE TENDER OFFER
--------------------------------------
19. In 1968, Congress enacted the Williams Act
amendments to the Exchange Act and thereby established a uniform
national system, administered by the SEC, for regulation of
interstate tender offers. The provisions of the Williams Act,
and the rules promulgated thereunder by the SEC, represent a
comprehensive Congressional scheme which regulates nationwide
tender offers.
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<PAGE>
20. In enacting the Williams Act, Congress
recognized that tender offers serve legitimate and beneficial
economic functions by, among other things, providing investors
with an opportunity to sell their shares at an advantageous
premium over the prevailing market prices and providing
shareholders with all information material to their respective
decisions whether or not to tender their shares.
21. The Williams Act reflects the intent of Congress
that interstate tender offers for shares of public corporations
should succeed or fail solely at the hands of the free and
informed investment judgment of the individual shareholders of
such corporations. The Williams Act is designed neither to deter
nor to encourage tender offers, but rather to establish
evenhanded regulation, favoring neither the tender offeror nor
incumbent management of the corporation whose securities are
being sought. The goals of the Williams Act are shareholder
protection and strict neutrality in the contest for corporate
control between management of the target company and the tender
offeror.
22. The Williams Act protects investors by requiring
that tender offerors provide shareholders with certain
information which Congress has determined to be material to an
informed investment judgment as to whether an individual
shareholder should hold, sell or trade his securities and by
requiring that tender offerors observe specified timetable
requirements in connection with all tender offers for securities
registered under the Exchange Act.
23. Pursuant to its authority under Section 23(a)(1) and
other provisions of the Exchange Act, the SEC has promulgated
rules and regulations in furtherance of the comprehensive
Congressional scheme set forth in the Williams Act and in other
provisions of the Exchange Act. Federal law establishes a
specific regulatory scheme and timetable which apply to the
Tender Offer. The Williams Act does not contain any provisions
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<PAGE>
that would substantially delay or restrict a tender offer, or
permit administrative review respecting the fairness of its
substantive terms or the effectiveness of tender offer
disclosures.
THE OHIO TAKE-OVER ACT
----------------------
24. The Take-Over Act, Ohio Rev. Code Sec. 1701.041, was
originally enacted in 1969 and amended in 1990. It purports to
regulate interstate tender offers.
25. Under the Take-Over Act, a "control bid" is defined
to include an offer to acquire equity securities of a corporation
incorporated inside or outside Ohio with its principal place of
business or principal executive office in Ohio or with
substantial assets within Ohio if there are a certain specified
number of Ohio shareholders. Ohio Rev. Code Sec.Sec.
1707.01(V)(1); 1707.01(Z)(1).
26. While the Take-Over Act requires disclosure which
is, in part, duplicative of that required under federal law, the
information filed with the Division and to be delivered to the
subject company and Ohio offerees must also include information
which need not be disclosed in a Schedule 14D-1 filed with the
SEC pursuant to the Williams Act, such as:
(a) information regarding plans or
proposals of the offeror to make
changes in employee plans or
workforce or to close plants or
facilities. Sec.1707.041(A)(2)(d).
(b) complete information on the
organization and operations of
offeror, including
(i) a description of the offeror's
outstanding capital stock and
long-term debt,
(ii) financial statements of the
offeror for the current period
and three most recent annual
accounting periods,
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(iii) a description of the
location and general character
of offeror's principal
physical properties,
(iv) a description of pending legal
proceedings other than routine
litigation,
(v) a description of the business
done and projected by the
offeror and the general
development of offeror's
business over the past three
years, and
(vi) the amount of any material
interest, direct or indirect,
of any of offeror's officers
or directors in any material
transaction during the past
three years, or any proposed
transactions, to which the
offeror was or is to be a
party. Sec. 1707.041(A)(2)(g).
(c) "[s]uch other and further
documents, exhibits, data, and
information as may be required by
regulations of the division of
securities, or as may be necessary
to make fair, full and effective
disclosure to offerees of all
information material to a decision
to accept or reject the offer."
Sec. 1707.041(A)(2)(h).
27. The Take-Over Act impermissibly imposes burdens upon
offerors, such as Luxottica Acquisition, in conflict with the
Williams Act, 15 U.S.C. Sec. 78n(d), (e) (to which the Tender
Offer is subject), and the regulations promulgated thereunder, to
the extent that the Take-Over Act requires that offerors provide
to the company being acquired, the Division and Ohio offerees,
materials which include, among other things, information with
respect to the financial condition and history of the offerors;
plans relating to employees; and a general open-ended requirement
for additional information, beyond the requirements of the
Williams Act. Ohio Rev. Code Sec. 1707.041(A)(2).
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<PAGE>
28. The Take-Over Act allows the Division, by rule or in
an adjudicatory proceeding, to determine that an issuer is not a
"subject company" if "appropriate review" of the control bid will
be made by a regulatory authority of another jurisdiction. Ohio
Rev. Code Sec. 1707.01(Z)(2).
29. The Division may "summarily suspend the continuation
of the control bid." Further, the Division may effectively block
the Tender Offer from going forward if, after a hearing, it
determines that "all of the information required to be provided .
. . has not been provided by the offeror, that the control bid
materials provided to offerees do not provide full disclosure to
offerees of all material information concerning the control bid,
or that the control bid is in material violation of any provision
of this chapter . . ." Ohio Rev. Code Sec. 1707.041(A)(4).
30. The contemplated "suspension" of Offeror Plaintiffs
control bid, both summarily and after hearing, would have the
practical effect of impeding, and possibly halting, the Tender
Offer throughout the nation. Reinstitution of the offer can be
accomplished only by filing "new or amended information" to
correct "disclosure and other deficiencies." Ohio Rev. Code Sec.
1707.041(A)(4).
31. These provisions are in direct contravention of the
Williams Act, which does not contemplate any substantive
administrative review of the "effectiveness" of tender offer
disclosures or of "other deficiencies". These provisions also
conflict with the explicit timetable of the Williams Act.
THE CONTROL SHARE ACQUISITION ACT
---------------------------------
32. Ohio Rev. Code Sec. 1701.831 regulates the making of
"control share acquisitions" as defined in Ohio Rev. Code Sec.
1701.01(Z)(1). Offeror Plaintiffs Tender Offer to
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<PAGE>
acquire all of the shares of U.S. Shoe for cash proposes a
control share acquisition. Within ten days of receipt of an
Acquiring Person Statement delivered to U.S. Shoe pursuant to
Ohio Rev. Code Sec. 1701.831(B), defendant Directors of U.S. Shoe
must call a special meeting (the "831 Special Meeting") of
shareholders to vote on the proposed control share acquisition.
33. Under Ohio Rev. Code Sec. 1701.831, the Tender Offer
can only be consummated if the shareholders of U.S. Shoe approve
the proposed control share acquisition by the affirmative vote of
a majority of the voting power of U.S. Shoe in the election of
directors represented at the 831 Special Meeting in person or by
proxy and a majority of the portion of such voting power
excluding the voting power of "interested shares" [as defined in
Ohio Rev. Code Sec. 1701.01(CC)]. A quorum must be present at
the 831 Special Meeting and will be deemed present if a majority
of the voting power of U.S. Shoe in the election of directors and
a majority of such voting power excluding "interested shares" are
represented at the meeting in person or by proxy.
34. According to Ohio Rev. Code Sec. 1701.832 the
procedures in Sec. 1701.831 are to provide ". . . evenhanded
protection of offerors and shareholders from fraudulent and
manipulative transactions arising in connection with control
acquisitions." "Evenhanded protection" requires that the
shareholder vote in Sec. 1701.831 must treat offerors and
incumbent management evenhandedly and must be bona fide and
achievable. If the vote cannot be calculated, or cannot be
calculated in a timely manner, the voting requirements are a
blatant sham designed to enable entrenched management to avoid a
shareholder referendum on the Tender Offer and kill fair, all-
cash, non-manipulative tender offers or stymie them indefinitely.
35. Ohio Rev. Code Sec. 1701.01(CC)(2), a 1990
amendment, presents insurmountable barriers to any and all
control share acquisitions of the shares of widely held
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<PAGE>
public companies, such as U.S. Shoe, by creating a class of
"interested shares" which, as a practical matter, is impossible
to determine.
36.Ohio Rev. Code Sec. 1701.01(CC)(2) provides:
"Interested shares" also means any shares of
-----------------------------------------
an issuing public corporation acquired,
---------
directly or indirectly, by any person from
-----------------------
the holder or holders thereof for a valuable
consideration during the period beginning
------------------------------
with the date of the first public disclosure
---------------------------------------------
of a proposed control share acquisition of
---------------------------------------------
the issuing public corporation or any
---------------------------------------------
proposed merger, consolidation, or other
---------------------------------------------
transaction which would result in a change in
---------------------------------------------
control of the corporation or all or
-------
substantially all of its assets, and ending
------
on the date of any special meeting of the
-------------------------------------
corporation's shareholders held thereafter
pursuant to section 1701.831 [1701.83.1] of
-----------------------------
the Revised Code, for the purpose of voting
on a control share acquisition proposed by
any acquiring person if either of the
----------
following apply:
(a) The aggregate consideration paid or
-------------------------------
given by the person who acquired the shares,
--------------------------------------
and any other persons acting in concert with
--------------------------------
him, for all such shares exceeds two hundred
--------------------
fifty thousand dollars;
----------------------
(b) The number of shares acquired by the
-----------------------------------
person who acquired the shares, and any other
------ ---------
persons acting in concert with him, exceeds
-------------------------- -------
one-half of one per cent of the outstanding
-------------------------
shares of the corporation entitled to vote in
the election of directors. (Emphasis added).
37. Any shares of U.S. Shoe that are "interested shares"
under Ohio Rev. Code Sec. 1701.01(CC)(2) cannot be determined
from the shareholder records of U.S. Shoe required to be
maintained under Ohio Rev. Code Sec. 1701.37 because such records
disclose the names and addresses of record holders only, who may
or may not also be the beneficial owners of such shares. Even as
to those record holders who are also beneficial owners, the
records do not contain the information necessary to determine
whether the shares are "interested shares" under the provisions
of Ohio Rev. Code Sec. 1701.01(CC)(2).
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<PAGE>
38. It is estimated that at least 80% of U.S. Shoe's
outstanding shares are held by clearing agencies and by brokers
and banks as record holders for the beneficial owners using
"street" or nominee names. Such brokers, banks and clearing
agencies hold shares for many beneficial owners, including
arbitrageurs. Arbitrageurs buy and sell significant amounts of
shares of widely held public companies, like U.S. Shoe, after
tender offer announcements. They frequently do not consent to
disclosure of their names, addresses and holdings. Neither U.S.
Shoe nor Luxottica Acquisition can compel the record shareholders
to disclose the name, address or holdings of the numerous non-
consenting beneficial owners of shares, the prices paid by them
for shares, when such shares were purchased or whether they are
"acting in concert" with any other person, and yet this
unavailable information must be obtained in order to identify the
class of "interested shares" created by Ohio Rev. Code
Sec. 1701.01(CC)(2). Thus, this provision presents
insurmountable difficulties in tallying "interested shares" and,
accordingly, shares that are not "interested." Moreover, it is a
---
practical impossibility to determine whether there is a quorum or
to determine the vote on the proposed control share acquisition,
which makes it impossible to comply with the statutory
requirement of obtaining approval of the Tender Offer by separate
majorities of the holders of "interested shares" and the other
shares of U.S. Shoe.
39. Section 14 of the Exchange Act and the regulations
promulgated thereunder (the "Proxy Rules") regulate the
solicitation of proxies and related matters with respect to
public companies such as U.S. Shoe.
40. Rules 14b-1(b)(3) and 14b-2(b)(4) of the Proxy Rules
require clearing agencies, securities brokers and banks holding
record ownership of stock for beneficial owners to provide a
public company such as U.S. Shoe, upon request of the company,
with the names, addresses and securities positions, compiled as
of a date no earlier than five business days after
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<PAGE>
such request is received, of its customers who are beneficial
owners of the company's securities and "who have not objected to
------------------------
disclosure of such 'information'." Thus, the Proxy Rules
-----------------------------------
recognize the right of a beneficial owner to keep his identity
confidential. In addition, the Proxy Rules create no right or
ability to compel disclosure by a beneficial owner of the price
paid by him for securities, the time of the purchases, the
identity of sellers or whether he is acting in concert with any
other person, all of which must be obtained to determine whether
---
shares of U.S. Shoe are "interested shares" under Ohio Rev. Code
Sec. 1701.01(CC)(2). Therefore, Sec. 1701.01(CC)(2) conflicts
with and is preempted by the Proxy Rules.
41. While some of this information could be obtained
from reports required to be filed by 5% shareholders under
Section 13 of the Exchange Act, Sec. 1701.01(CC)(2) applies to a
person holding as few as one-half of one percent of the
outstanding U.S. Shoe shares, so that Section 13 filings would
provide incomplete and non-dispositive information in determining
which U.S. Shoe shares are "interested shares." Thus, Sec.
1701.01(CC)(2) is also in conflict with the disclosure scheme of
Section 13 of the Exchange Act.
42. The Williams Act, and the regulations thereunder,
establish procedural rules to govern tender offers. U.S. Shoe
and Luxottica Acquisition are subject to the Williams Act. The
Williams Act strikes a careful balance between the interests of
offerors and target companies, and any state statute that upsets
this balance is preempted.
43. Ohio Rev. Code Sec. 1701.831(E)(1), by virtue of
Ohio Rev. Code Sec. 1701.01(CC)(2), operates to favor entrenched
management against offerors to the detriment of shareholders by
excluding, from one of the votes required under Sec. 1701.831,
certain shares of U.S. Shoe trading after the Tender Offer
announcement. It does not protect independent shareholders
against the contending parties and does not ensure collective
deliberation about the
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<PAGE>
merits of tender offers; rather, it deprives holders of
independently-owned shares of U.S. Shoe of their rightful voice
in corporate affairs. Ohio Rev. Code Sec. 1701.01(CC)(2)
excludes certain shares owned independently of U.S. Shoe's
management and Luxottica Acquisition from a crucial vote and
makes it impossible to determine whether a requisite shareholder
vote has been obtained. Thus, it impedes the operation of the
special shareholder's meeting intended to give to the offeror the
opportunity to present its offer to the shareholders and to
shareholders the opportunity to decide for themselves whether a
change in control should occur. Therefore, Ohio Rev. Code Sec.
1701.01(CC)(2) frustrates the purposes of the Williams Act. Ohio
Rev. Code Sec. 1701.01(CC)(2) also does not treat shares which
trade after the first announcement of a tender offer equally,
thereby discriminating against Luxottica Acquisition's Tender
Offer in favor of any later competing offer made by U.S. Shoe's
management or a "white knight" friendly to management. Shares
purchased after the announcement of Luxottica Acquisition's
Tender Offer are "interested shares" as to such Tender Offer but
would not be "interested shares" as to any other offer if such
---
shares are purchased prior to the announcement of the second
offer. The "evenhanded" approach mandated by Ohio Rev. Code
Sec. 1701.832 and the Williams Act is frustrated by a scheme
which favors entrenched management to the detriment of U.S.
Shoe's shareholders.
44. The Ohio General Assembly demonstrated awareness
that the amendment of Ohio Rev. Code Sec. 1701.01, adding
division (CC)(2), was constitutionally dubious by specifically
adding a severability clause solely for that division, to apply
"if any part of this division is held to be illegal or invalid in
application . . .." Ohio Rev. Code Sec. 1701.01(CC)(3).
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<PAGE>
THE POISON PILL PLAN
--------------------
45. U.S. Shoe's Poison Pill Plan (denominated as the
"Preference Shares Purchase Rights") was initially adopted by
U.S. Shoe's Board of Directors on March 31, 1986, without
shareholder approval. On April 14, 1986, U.S. Shoe implemented
the Poison Pill Plan by distributing a dividend of one preference
share purchase right (i.e., a Right) for each outstanding share
----
of U.S. Shoe.
46. On March 23, 1988, U.S. Shoe amended its Poison Pill
Plan, again acting without shareholder approval.
47. U.S. Shoe's Poison Pill Plan, both as initially
adopted and as amended, is designed to impose substantial
economic penalties on any entity, like Luxottica Acquisition,
that attempts to acquire U.S. Shoe in a transaction not approved
by U.S. Shoe's Board of Directors. Thus, the Poison Pill Plan
affords U.S. Shoe's Board the power effectively to prevent U.S.
Shoe's shareholders from receiving the benefits of Offeror
Plaintiffs Tender Offer regardless of its merit or the desires
of U.S. Shoe's shareholders to sell their shares pursuant
thereto.
48. U.S. Shoe's Poison Pill Plan, however, empowers U.S.
Shoe's Directors to redeem the Rights and remove the threat of
overwhelming dilution that they carry. U.S. Shoe's Board may at
its discretion redeem the Rights at the nominal price of five
cents ($0.05) per Right at any time on or prior to the time a
person together with its affiliates and associates, becomes the
beneficial owner of 20 percent or more of U.S. Shoe's outstanding
shares (an "Acquiring Person").
49. In its Offer to Purchase, Luxottica Acquisition
requested that U.S. Shoe's Board of Directors redeem the Rights.
Luxottica Acquisition believes that U.S. Shoe's Board will refuse
to redeem the Rights.
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<PAGE>
50. U.S. Shoe uses and maintains the Rights solely in
order to employ the "flip-over" and "flip-in" features of these
Rights, described hereinafter, which are designed to deter tender
offerors, like Luxottica Acquisition, whose offers have not been
approved by U.S. Shoe's Board of Directors.
51. As amended, U.S. Shoe's Rights may only be
transferred together with U.S. Shoe's Common Shares until the
"Distribution Date" which shall occur on the earlier of the day
on which a public announcement of the fact that a person has
become an Acquiring Person is made by U.S. Shoe or such Acquiring
Person (the "Share Acquisition Date") or the close of business on
the tenth day (or such later date as a majority of U.S. Shoe's
"Continuing" Directors may determine) following the commencement
of, or first public announcement of an intention to make, a
tender or exchange offer which, if successful, would result in a
30 percent or more ownership interest of U.S. Shoe's outstanding
Common Shares.
52. According to U.S. Shoe's Poison Pill Plan, after the
Distribution Date, the Rights may be transferred separately from
the Common Shares to which they were initially attached. From
and after the Distribution Date, but prior to the triggering of
the "flip-over" or "flip-in" provisions of the Rights, described
below, each Right entitles its holders to purchase from U.S. Shoe
one one-hundredth (1/100th) of a Series A Preference Share at an
exercise price of $200.
53. The $200 exercise price of the Rights vastly exceeds
the economic value of the units of designated preference shares
into which they are initially convertible. This disparity
between the exercise price and the value of the fractional
preference share to be received makes it clear that the Rights
were never intended to be used to purchase the designated
preference shares.
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<PAGE>
54. The exercise price for such fractional preference
share is more than 10 times the market price at which the shares
of U.S. Shoe traded immediately prior to announcement of the
Tender Offer and is significantly higher than any price at which
the Board of Directors could reasonably believe the preference
shares might trade prior to the expiration of the Rights in 1996.
It is thus inconceivable that a Right would in fact ever be
exercised to acquire the fractional preference shares.
55. According to U.S. Shoe's Poison Pill Plan, after the
Rights become exercisable and, unless the Rights are sooner
redeemed, in the event that U.S. Shoe were to be acquired in a
merger or other business combination or more than 50 percent of
the assets or earning power of U.S. Shoe and its subsidiaries
were sold or transferred, the "flip-over" provision of the Poison
Pill is triggered. In that event, the Poison Pill Plan provides
that each Right shall entitle its holder to purchase such number
of shares of the acquiring company's common stock having a market
value at the time of such transaction of two times the exercise
--- -----
price of the Right. In other words, when the Rights "flip over"
into rights to purchase stock of the acquiring company, the
Rights holders may purchase shares of that company at half-price.
For example, a Right holder could purchase $100 worth of the
acquiring company's shares for only $50. This "flip-over"
feature of the Poison Pill Plan threatens a devastating
impairment of any potential acquirer's capital structure and, if
enforceable, makes tender offers impossible if not approved by
U.S. Shoe's directors.
56. The Poison Pill Plan has certain anti-takeover
effects in that the Rights will cause substantial dilution to the
ownership rights of any person who attempts to acquire U.S. Shoe
on terms not approved by U.S. Shoe's Board of Directors. This
dilution would impose
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<PAGE>
substantial economic penalties on Offeror Plaintiffs or any other
person who attempts to take control of U.S. Shoe in a transaction
not approved by U.S. Shoe's Board of Directors.
57. Now in the face of Luxottica Acquisition's all cash,
all shares, premium, noncoercive Tender Offer, U.S. Shoe's Board
of Directors likely will continue to refuse to redeem the Rights
despite Offeror Plaintiffs demand that they do so. U.S. Shoe's
Board of Directors is employing the Poison Pill Plan to obstruct
Offeror Plaintiffs valuable offer, to deny to U.S. Shoe's
shareholders any meaningful opportunity to decide for themselves
whether to tender their shares, and to entrench the incumbent
Board.
58. The purported purpose of the Poison Pill Plan was to
protect the interests of U.S. Shoe's shareholders. Luxottica
Acquisition's all cash, all shares premium Tender Offer provides
for fair and equal treatment of all U.S. Shoe'shareholders and is
not coercive. Consequently, U.S. Shoe's Poison Pill has no valid
application to Luxottica Acquisition's Tender Offer.
59. U.S. Shoe's Board of Directors has a fiduciary duty
to redeem the Rights to allow Luxottica Acquisition's Tender
Offer to proceed. Unless the Poison Pill is redeemed, U.S.
Shoe's shareholders may be denied the opportunity to exercise
their right to decide for themselves whether to accept the
benefits of Offeror Plaintiffs' Tender Offer.
60. According to U.S. Shoe's Poison Pill Plan, U.S.
Shoe's Poison Pill further provides that after the Rights become
exercisable and the "flip-in" provision of the Poison Pill is
triggered, each Rights Holder (other than the Acquiring Person)
becomes entitled to purchase Common Shares of U.S. Shoe having a
market value of two times the exercise price of the Right. In
other words, when the Rights "flip-in," the Rights Holders may
purchase Common Shares of U.S. Shoe at one-half of their fair
market value at the time of the transaction. Because the
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<PAGE>
Acquiring Person's Rights are rendered void when the Rights "flip
in", this feature of the Poison Pill discriminates against the
Acquiring Person by diluting and devaluing the Acquiring Person's
holdings in U.S. Shoe. Moreover, the Plan provides that in lieu
of issuing Common Shares, U.S. Shoe may, if a majority of the
continuing Directors determines that such action is necessary or
appropriate and not contrary to the interests of the holders of
the Rights, elect to issue or pay, upon the exercise of the
Rights, cash, property, or other securities, or any combination
thereof having a fair market value equal to the value of the
Common Shares which otherwise would have been issued.
61. The option to purchase one one-hundredth of a Series
A Preference Share in the event of a flip-in is an illusory
option, because the "flip-in" triggers a right to purchase Common
Shares, not fractional preference shares. Because the Poison
Pill Plan effectively grants options to purchase Common Shares in
the event of a "flip-in," it is invalid under Ohio Rev. Code
Sec. 1701.16 because U.S. Shoe does not have sufficient
authorized but unissued Common Shares to satisfy the exercise of
the Rights in such event and because the Poison Pill Plan was
never approved by U.S. Shoe shareholders.
62. U.S. Shoe's Amended Articles of Incorporation
currently authorize the issuance of 60,000,000 Common Shares.
According to U.S. Shoe's most recent Form 10-Q, the number of
Common Shares outstanding at October 29, 1994, was 46,341,660; in
addition, there were options to purchase 3,727,267 Common Shares.
Thus, on a fully diluted basis, there were only 9,931,073 Common
Shares available for issuance under the Poison Pill Plan as of
October 29, 1994. If the flip-in were triggered by Luxottica
Acquisition's Tender Offer, there are insufficient Common Shares
to satisfy the exercise of the Rights.
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<PAGE>
63. Since there are insufficient authorized but unissued
or treasury Common Shares to satisfy the exercise of the Rights,
the Rights are not options to purchase shares, but are in
actuality a right to receive a dividend in cash, property or
securities pursuant to Ohio Rev. Code Sec. 1701.33.
64. Under the terms of the Poison Pill Plan, shares held
by a holder of 20 percent or more of U.S. Shoe's outstanding
Common Shares (and those who purchase from him) are
discriminatorily excluded from the dividend. Such a
discriminatory dividend is unlawful under Ohio Rev. Code Sec.
1701.33.
65. Furthermore, the amount of the dividend U.S. Shoe
would be required to pay under the circumstances described, above
and beyond the proceeds to it from the payment by the Right
holders of the exercise price, would be in such an amount that it
(a) would exceed U.S. Shoe's surplus and render it insolvent, and
would therefore be unlawful under Ohio Rev. Code Sec.Sec.
1701.33(A) and 1701.33(C), (b) would likely violate U.S. Shoe's
existing debt covenants, (c) would render U.S. Shoe's directors
personally liable for repayment of the unlawful amounts under
Ohio Rev. Code Sec. 1701.95(A)(1), and (d) would constitute an
unlawful disposition of substantially all of U.S. Shoe's assets
under Ohio Rev. Code Sec. 1701.76 or a voluntary dissolution
under Ohio Rev. Code Sec. 1701.86, without the requisite approval
of the shareholders.
66. Under the terms of the Poison Pill Plan, the Plan
does not apply to "a tender or exchange offer for all outstanding
Common Shares at a price and on terms determined by a majority of
the members of the Board of Directors, who are not officers of
the Corporation, to be in the best interest of the Corporation
and its shareholders (other than the Person or any Affiliate or
Associate thereof on whose behalf the offer is being made.")
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67. The Directors of U.S. Shoe who are not officers of
the corporation should promptly determine that the cash tender
offer for all outstanding shares commenced by Luxottica
Acquisition is in the best interest of the corporation and its
shareholders, so that the Poison Pill Plan does not apply to
Luxottica Acquisition's Tender Offer. The failure to approve the
Tender Offer and render the Poison Pill Plan inapplicable would
constitute a breach of fiduciary duty, and may deny U.S. Shoe's
shareholders the opportunity to exercise their right to decide
for themselves whether to accept the benefits of Offeror
Plaintiffs Tender Offer.
CLAIMS FOR RELIEF
-----------------
The Take-Over Act Violates the Commerce
Clause of the United States Constitution
----------------------------------------
(COUNT ONE)
68. Plaintiffs repeat and reallege the averments set
forth in paragraphs 1-67 of this Complaint as if fully rewritten
herein.
69. The Commerce Clause of the United States
Constitution provides that: "Congress shall have power . . . to
regulate commerce . . . among the several states." U.S. Const.
Art. I, Sec. 8, cl. 3.
70. Shareholders of U.S. Shoe reside throughout the
United States and the Tender Offer will take place in interstate
commerce.
71. The Take-Over Act imposes a substantial, adverse,
and direct burden on interstate commerce because, among other
things, the Take-Over Act:
(a) grants to the Division power to
suspend the Tender Offer in the
State of Ohio which would
effectively prevent plaintiffs from
going forward with the Tender Offer
nationwide;
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(b) imposes disclosure requirements
which exceed those required under
federal law;
(c) deprives Plaintiffs of the
federally-protected right to buy
securities from willing sellers
throughout the United States free
of state law impediments;
(d) exerts a powerful constraint upon
transactions in securities between
willing buyers and willing sellers
throughout the United States;
(e) impedes the infusion of billions of
dollars into interstate commerce by
means of tender offers and
interferes with efficient
allocation of economic resources;
and
(f) creates unnecessary, duplicative
and wasteful expenses for companies
engaged in interstate commerce and
upon persons wishing to use the
national securities exchanges.
72. The Take-Over Act is invalid and unconstitutional
because it places a substantial burden on interstate commerce
which outweighs any putative local benefits, in violation of the
Commerce Clause, Art. I, Sec. 8, cl. 3, of the United States
Constitution.
73. Plaintiffs have no adequate remedy at law.
The Take-Over Act Violates the Supremacy
Clause of the United States Constitution
and Section 28 of the Exchange Act
----------------------------------
(COUNT TWO)
74. Plaintiffs repeat and reallege the averments set
forth in paragraphs 1-73 of this Complaint as if fully rewritten
herein.
75. The Supremacy Clause, U.S. Const. Art. VI, cl. 2,
provides, in pertinent part:
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This Constitution, and the Laws of the United
States which shall be made in Pursuance
thereof . . . shall be the supreme Law of the
Land; and Judges in every State shall be
bound thereby, any Thing in the Constitution
or Laws of any State to the Contrary
notwithstanding.
76. The Take-Over Act frustrates the objectives of, and
is in direct conflict with, the Exchange Act and the rules and
regulations promulgated thereunder in at least the following
respects:
(a) The Take-Over Act imposes
disclosure requirements in addition
to those required by federal law;
(b) the Division may prohibit a tender
offer from proceeding and thereby
frustrate the federal scheme which
provides for each shareholder to
decide whether to accept a tender
offer;
(c) the Take-Over Act represents an
attempt to assert the legislative
power of the State of Ohio over a
subject matter over which the
federal government has developed a
comprehensive body of law; and
(d) the Take-Over Act creates the
potential for unseemly conflict
between federal and state
proceedings by permitting a state
official to halt a nationwide
tender offer based upon his
examination of materials which meet
applicable federal law.
77. By establishing policies, standards and procedures
that conflict with and are obstacles to the objectives of
Congress expressed in the Exchange Act and rules and regulations
promulgated thereunder, the Take-Over Act is invalid and
unconstitutional as applied to the Tender Offer under the
Supremacy Clause of the United States Constitution, Article VI,
Clause 2, which accords supremacy to federal law over conflicting
state law, and violates and is preempted by Section 28(a) of the
Exchange Act, 15 U.S.C. Sec. 78bb, which prohibits and
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preempts state regulation that conflicts with the provisions of
the Exchange Act and the rules and regulations thereunder.
78. Plaintiffs have no adequate remedy at law.
The Control Share Acquisition Act,
by virtue of
Ohio Rev. Code Sec. 1701.01(CC)(2),
Violates the Supremacy Clause of the
United States Constitution and Section 28
of the Exchange Act
-------------------
(COUNT THREE)
79. Plaintiffs repeat and reallege the averments set
forth in paragraphs 1-78 of this complaint as if fully rewritten
herein.
80. The provisions of the Control Share Acquisition Act
impairing the voting rights of the holders of certain of U.S.
Shoe's shares frustrate the objectives, and are in direct
conflict with, the Exchange Act and the rules and regulations
promulgated thereunder, in at least the following respects:
(a) Effectively imposing proxy
requirements inconsistent with
those imposed by federal law;
(b) Constituting an attempt to
assert the legislative power
of the State of Ohio over a
subject matter over which the
federal government has
developed a comprehensive body
of law; and
(b) Functioning as a bar to
national tender offers by
impeding the ability to
conduct the control share
acquisition meeting so that
shareholders can decide
whether a change of control
should occur, by making it
impossible to identify
"interested shares," and
therefore making it impossible
to determine and obtain the
vote required by Ohio Rev.
Code Sec. 1701.831(E)(1).
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81. By establishing policies, standards and procedures
that conflict with and are obstacles to the objectives of
Congress expressed in the Exchange Act and the rules and
regulations promulgated thereunder, Ohio Rev. Code
Sec. 1701.831(E)(1), by virtue of Ohio Rev. Code Sec.
1701.01(CC)(2), is invalid and unconstitutional as applied to the
Tender Offer under the Supremacy Clause of the United States
Constitution, Article VI, Clause 2, which accords supremacy to
federal law over conflicting state law, and violates and is
preempted by Section 28(a) of the Exchange Act, 15 U.S.C. Sec.
78bb, which prohibits and preempts state regulation that
conflicts with the provisions of the Exchange Act and the rules
and regulations thereunder.
The Control Share Acquisition Act,
by virtue of
Ohio Rev. Code Sec. 1701.01(CC)(2),
Creates an Unlawful Burden
on Interstate Commerce
----------------------
(COUNT FOUR)
82. Plaintiffs repeat and reallege the averments set
forth in paragraphs 1-81 of this Complaint as if fully rewritten
herein.
83. The Control Share Acquisition Act, by virtue of Ohio
Rev. Code Sec. 1701.01(CC)(2), was intended to discourage trading
in securities of target companies after the announcement of a
tender offer by limiting the voting rights of certain purchasers.
It was intended to disrupt the national secondary market in
securities, a market generally regulated by federal, not state
law. The provision effectively discourages the purchase of
shares of widely held public companies after announcement of a
tender offer.
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84. The Control Share Acquisition Act, by virtue of Ohio
Rev. Code Sec. 1701.01(CC)(2), is invalid, unconstitutional, null
and void because it places a substantial burden on interstate
commerce that outweighs any putative local benefits, in violation
of the Commerce Clause, art. I, Sec. 8, cl. 3 of the United
States Constitution.
85. Plaintiffs have no adequate remedy at law.
The Control Share Acquisition Act,
by virtue of
Ohio Rev. Code Sec. 1701.01(CC)(2),
Violates the Due Process and
Obligations of Contract Clauses of the
United States and Ohio Constitutions
------------------------------------
(COUNT FIVE)
86. Plaintiffs repeat and reallege the averments set
forth in paragraphs 1-85 of this Complaint as if fully rewritten
herein.
87. Article Fourth of U.S. Shoe's Amended Articles of
Incorporation provides that "(a)ll shares of any particular
series shall rank equally and be identical in all respects . . ."
and that "(e)ach outstanding Common Share . . . shall entitle the
holder thereof to one vote on each matter properly submitted to
the shareholders for their vote, consent, waiver, release or
other action, subject to the provisions of law from time to time
in effect with respect to cumulative voting."
88. The express terms of the shares set forth in U.S.
Shoe's Amended Articles of Incorporation, particularly the right
to vote, constitute a contract between U.S. Shoe and its
shareholders and a property right of shareholders.
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89. Ohio Rev. Code Sec. 1701.01(CC)(2) impairs the
voting rights of certain shares in violation of Article Fourth
and the contractual and property rights of U.S. Shoe
shareholders.
90. Section 10, Article I of the United States
Constitution, and Section 28, Article II of the Ohio Constitution
prohibit the Ohio General Assembly from passing any "laws
impairing the obligation of contracts."
91. The Control Share Acquisition Act, by virtue of Ohio
Rev. Code Sec. 1701.01(CC)(2), violates Section 10, Article I of
the United States Constitution, Section 28, Article II of the
Ohio Constitution by impairing the obligations of U.S. Shoe's
contract with its shareholders, and the due process clause of the
Fourteenth Amendment to the United States Constitution by
depriving U.S. Shoe's shareholders of property interests without
due process of law.
92. Plaintiffs have no adequate remedy at law.
The Poison Pill Plan Violates
Ohio Rev. Code Chapter 1701
---------------------------
(COUNT SIX)
93. Plaintiffs repeat and reallege the averments set
forth in paragraphs 1-92 of this Complaint as if fully rewritten
herein.
94. The Rights created by the Poison Pill Plan are
rights to receive a dividend in cash, property or securities
pursuant to Ohio Rev. Code Sec. 1701.33.
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95. The Poison Pill Plan excludes shares held by a
holder of 20% or more of U.S. Shoe's outstanding Common Shares
from the dividend created, and therefore the Poison Pill Plan
violates Ohio Rev. Code Sec. 1701.33.
96. The Poison Pill Plan grants options to purchase
Common Shares in the event of a flip-in, and is invalid because
U.S. Shoe does not have sufficient authorized but unissued Common
Shares to satisfy exercise of the Rights, in violation of Ohio
Rev. Code Sec. 1701.16.
97. The amount of dividend U.S. Shoe would be required
to pay under the Poison Pill Plan would create an unlawful
disposition of all of U.S. Shoe's assets in violation of Ohio
Rev. Code Sec. 1701.76 or a voluntary dissolution of U.S. Shoe
without requisite shareholder approval in violation of Ohio Rev.
Code Sec. 1701.86.
98. Plaintiffs have no adequate remedy at law.
Failure by U.S. Shoe's Directors to Redeem
its Poison Pill Violates their Fiduciary Duties
-----------------------------------------------
(COUNT SEVEN)
99. Plaintiffs repeat and reallege the averments set
forth in paragraphs 1-98 of this Complaint as if fully rewritten
herein.
100. Luxottica Acquisition's Tender Offer offers a
substantial premium to U.S. Shoe's stockholders for their stock,
and contains no threat or coercion of any kind to U.S. Shoe or to
U.S. Shoe's stockholders. The Tender Offer treats all U.S. Shoe
shareholders equally and allows them to decide for themselves
whether to accept the benefits of the premium offer.
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101. The purported purpose of the Poison Pill Plan is to
protect U.S. Shoe's shareholders. Luxottica Acquisition's all
cash, all shares premium offer does not imperil U.S. Shoe's
shareholders in any way. Thus, the Poison Pill Plan cannot
legitimately be used to block the Tender Offer and, accordingly,
U.S. Shoe's Board of Directors have fiduciary duties under Ohio
law to redeem the Rights to allow the Tender Offer to proceed.
102. U.S. Shoe's Board of Directors has refused and
likely will continue to refuse to redeem the Poison Pill Plan as
necessary to allow Plaintiffs premium Tender Offer to proceed to
completion.
103. U.S. Shoe's refusal to redeem the Rights denies
U.S. Shoe's shareholders the right freely to consider the Tender
Offer on its merits and to accept the Tender Offer if they choose
to do so.
104. Plaintiffs have no adequate remedy at law.
Failure by U.S. Shoe's Directors Who Are Not
Officers of U.S. Shoe To Approve
The Tender Offer Violates Their Fiduciary Duties
------------------------------------------------
(COUNT EIGHT)
105. Plaintiffs repeat and reallege the averments set
forth in paragraphs 1-104 of this Complaint as if fully rewritten
herein.
106. Under the terms of the Poison Pill Plan, the Plan
does not apply to a tender offer if a majority of the directors
of U.S. Shoe who are not officers of the Corporation determine
that the offer is in the best interest of the Corporation and its
shareholders.
107. Luxottica Acquisition's Tender Offer offers a
substantial premium to U.S. Shoe's shareholders for their stock,
and contains no threat or coercion of any kind to U.S. Shoe or to
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U.S. Shoe's shareholders. The Tender Offer treats all U.S. Shoe
shareholders equally and allows them to decide for themselves
whether to accept the benefits of the premium offer.
Accordingly, the Tender Offer is in the best interest of U.S.
Shoe and its shareholders, and U.S. Shoe's Directors who are not
officers have a fiduciary duty to approve the Tender Offer and
thereby render the Poison Pill Plan inapplicable to the Tender
Offer.
108. The members of U.S. Shoe's Board of Directors who
are not officers of the Corporation have failed to determine that
the Tender Offer is in the best interest of the Corporation and
its shareholders.
109. The failure of the members of U.S. Shoe's Board of
Directors who are not officers of the Corporation to approve the
Tender Offer and thus render the Poison Pill Plan inapplicable
denies U.S. Shoe's shareholders the right freely to consider the
Tender Offer on its merits and to accept the Tender Offer if they
choose to do so.
110. Plaintiffs have no adequate remedy at law.
Failure by U.S. Shoe
to Permit Shareholder
Avant-Garde To Inspect
Shareholder Records After
It Made A Proper Demand
-----------------------
(COUNT NINE)
111. Plaintiffs repeat and reallege the averments set
forth in paragraphs 1-110 of the Complaint as if fully rewritten
herein.
112. Plaintiff Avant-Garde is the record owner of at
least 31,375 shares of the stock of U.S. Shoe.
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113. On March 7, 1995, Avant-Garde delivered to U.S.
Shoe a written demand, pursuant to Revised Code Sec. 1701.37, to
inspect and make copies or extracts of the corporate records of
shareholders of U.S. Shoe with the purpose to facilitate
communications with other shareholders of the Company regarding
the affairs of the Company and matters relating to their
interests as shareholders, including Luxottica Acquisition
Corp.'s tender offer and solicitations of requests, consents
and/or proxies for special meetings, as set forth in the demand
letter, which is attached as Exhibit A to the Third Amended
Complaint. The letter demanded a response by 1:00 p.m.,
March 10, 1995 or Avant-Garde would conclude that the demand had
been refused.
114. On March 10, 1995, U.S. Shoe informed Avant-Garde
that it would not permit inspection and copying of its corporate
records of shareholders by Avant-Garde.
115. By refusing Avant-Garde's proper demand to inspect
and copy its shareholder records, and by unlawfully impeding
Avant-Garde's access to the records, U.S. Shoe has violated Ohio
R.C. Sec. 1701.37(C).
116. Plaintiff Avant-Garde has no adequate remedy at
law.
Failure By U.S. Shoe
To Set Record Dates
-------------------
(COUNT TEN)
117. On March 7, 1995, Luxottica Group and Luxottica
Acquisition submitted a written request to U.S. Shoe that its
Board of Directors fix, by 12:00 o'clock noon E.S.T. on Friday,
March 10, 1995, a record date for the 831 Special Meeting. The
directors of U.S. Shoe were further requested to fix March 17,
1995, as such record date. A copy of the request letter is
attached as Exhibit B and is incorporated herein.
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118. On March 7, 1995, Luxottica Group, Luxottica
Acquisition, Avant-Garde, and certain other shareholders,
submitted a written request to U.S. Shoe that its Board of
Directors fix, by 12:00 o'clock noon E.S.T. on Friday, March 10,
1995, a record date for the determination of the holders of
common shares of U.S. Shoe entitled to execute agent designations
("Agent Designations") for the purpose of calling a special
meeting of U.S. Shoe shareholders to, among other things, remove
all of the incumbent U.S. Shoe directors and elect Plaintiffs'
nominees as the new directors and to take related actions. The
directors of U.S. Shoe were further requested to fix March 17,
1995, as such record date. A copy of the request letter is
attached as Exhibit C and is incorporated herein.
119. The directors of U.S. Shoe did not respond to the
request to fix the record date for the 831 Special Meeting and
refused to fix the record date for the determination of
shareholders entitled to execute Agent Designations by 12:00 noon
E.S.T. on Friday, March 10, 1995.
120. Because U.S. Shoe failed to respond to this request
to fix a record date for the determination of shareholders
entitled to notice and to vote at the 831 Special Meeting, and
because U.S. Shoe refused to fix a record date for the
determination of holders of shares entitled to execute Agent
Designations, Plaintiffs and other shareholders have set the
close of business, March 17, 1995, as the record dates for the
831 Special Meeting and the solicitation of Agent Designations.
U.S. Shoe and its Directors have failed or refused to take the
requested actions in order to impede consideration of the Tender
Offer by U.S. Shoe shareholders.
121. Plaintiffs seek a declaration by the Court that the
close of business, March 17, 1995, is the valid and effective
record date for the 831 Special Meeting and the valid and
effective record date for the solicitation of Agent Designations.
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122. Plaintiffs have no adequate remedy at law.
Actions by U.S. Shoe Directors
In Responding to Plaintiffs' Acquisition Proposals
Violate Their Fiduciary Duties
------------------------------
(COUNT ELEVEN)
123. Plaintiffs repeat and reallege the averments
set forth in paragraphs 1-122 of this Complaint as if fully
rewritten herein.
124. In December, 1994 and January, 1995,
Luxottica Group and its financial advisor indicated to U.S.
Shoe's management and its financial advisor that Luxottica Group
was interested in exploring the acquisition of U.S. Shoe by means
of an all cash transaction at a price representing a substantial
premium above the then-current market value of U.S. Shoe's shares
and that Luxottica Group and its representatives wanted to engage
in negotiations with respect to such a transaction. Luxottica
Group and U.S. Shoe were unable to agree upon the terms of a
confidentiality agreement with respect to such discussions,
however.
125. After concluding that a mutually satisfactory
confidentiality agreement could not be reached, Luxottica
Acquisition commenced the Tender Offer on March 3, 1995. Since
that time, the Board of Directors of U.S. Shoe has engaged in a
process of contacting and negotiating with various parties
regarding potential transactions involving the sale of U.S.
Shoe's various businesses.
126. On March 16, 1995, U.S. Shoe issued a press
release stating that it had reached agreement with Nine West
Group Inc. ("Nine West") for the acquisition of U.S. Shoe's
footwear operations. That transaction is subject to certain
conditions but is supposed to close within 60 days. U.S. Shoe's
Board of Directors also reported that it has engaged, and is
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continuing to engage, in discussions with other parties regarding
its other businesses, for the stated purpose of "enhancing value
in the near term" as part of an "ongoing initiative to maximize
shareholder value." These press releases are tantamount to a
public announcement and declaration that U.S. Shoe's directors
have commenced an auction of all of U.S. Shoe's assets and are
soliciting offers from any and all prospective buyers.
127. On March 16, 1995, U.S. Shoe's Board of
Directors also announced that it had determined that Luxottica
Acquisition's Tender Offer is inadequate and that it recommends
that shareholders not tender their shares in response to that
Tender Offer. Prior to that announcement, U.S. Shoe's Board of
Directors had failed to negotiate with Luxottica Group and
Luxottica Acquisition, notwithstanding the fact that Luxottica
Acquisition was the only company which had publicly announced an
interest in purchasing U.S. Shoe in its entirety and had made a
non-coercive, cash Tender Offer for all shares of U.S. Shoe.
128. To date, U.S. Shoe's Board of Directors has
refused to negotiate with Luxottica Group and Luxottica
Acquisition, without imposing unreasonable conditions.
129. Pursuant to Ohio R.C. Sec. 1701.59, U.S.
Shoe's directors are required to consider the interests of U.S.
Shoe's shareholders in evaluating the Tender Offer and
alternative transactions. The refusal of U.S. Shoe's
directors to negotiate with Luxottica Group and Luxottica
Acquisition constitutes a violation of the duties imposed upon
directors pursuant to Ohio R.C. Sec. 1701.59. While U.S. Shoe's
directors have announced plans to sell U.S. Shoe's businesses for
the stated purpose of enhancing and maximizing shareholder value
in the near term and are soliciting offers from other buyers,
they have not negotiated with Luxottica Group and Luxottica
Acquisition. Therefore, U.S. Shoe's directors have acted
unreasonably and in violation of the duties of care, loyalty and
candor owed by them to U.S. Shoe's shareholders.
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130. Effective January 1, 1995, U.S. Shoe adopted
certain amendments to its Pension Plan regarding the calculation
of benefit accruals and certain amendments to its Tax Incentive
Savings Plan regarding changes in U.S. Shoe's matching
contributions.
131. On February 1, 1995, the Compensation
Committee of U.S. Shoe's Board of Directors approved a bonus of
$200,000 to Noel Hord to be paid if the sale of U.S. Shoe's
footwear operations to Nine West is consummated.
132. As of February 2, 1995, U.S. Shoe entered
into Special Bonus Agreements with certain executives of U.S.
Shoe providing for the payment of a special bonus upon
termination of employment on or before February 1, 1997, other
than for cause (as defined in the agreements).
133. On February 2, 1995, U.S. Shoe's directors
approved the adoption of a new retirement plan for its outside
directors with five or more years of service providing for a
quarterly benefit, commencing at age 72 and payable for life,
equal to the retainer he or she receives as a director
immediately prior to retirement.
134. On February 1, 1995, U.S. Shoe's directors
adopted the Economic Bridge Program providing benefits to a broad-
based group of its full-time employees in the event of termination of
employment prior to a change in control, and increased benefits
after a change in control of U.S. Shoe.
135. The foregoing actions, each of which had the
effect of providing or increasing benefits for U.S. Shoe's
directors, management, and employees, were adopted by U.S. Shoe
and its directors in response to the acquisition proposal made by
Luxottica Group. Such actions were taken for the purpose of
entrenching management and increasing the cost of acquiring all of
U.S. Shoe's outstanding shares in an all cash, fully funded,
non-coercive Tender
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Offer, and operate to the detriment of U.S. Shoe's shareholders.
Such actions of U.S. Shoe's directors violated the directors'
fiduciary duties to U.S. Shoe shareholders.
136. Plaintiffs have no adequate remedy at law.
U.S. Shoe's Directors Have Violated R.C. Sec. 1701.76 By
Failing To Hold A Shareholder Vote On Sale Of Corporate Assets
--------------------------------------------------------------
(COUNT TWELVE)
137. Plaintiffs repeat and reallege the averments set
forth in paragraphs 1-136 of this Complaint as if fully
rewritten herein.
138. An Ohio corporation such as U.S. Shoe has no
authority to sell all, or substantially all, of its assets,
except as provided by statute. Pursuant to Ohio R.C. Sec.
1701.76, a sale, transfer of all, or substantially all, of U.S.
Shoe's assets, with or without goodwill, and not in the usual and
regular course of its business, must be authorized by an
affirmative vote of U.S. Shoe's shareholders.
139. U.S. Shoe's agreement and proposed transaction with
Nine West would substantially affect the existence and purpose of
U.S. Shoe as a corporate entity and would fundamentally change
the nature of the shareholders investment in U.S. Shoe.
Therefore, the agreement and proposed transaction with Nine West
must be approved by U.S. Shoe's shareholders.
140. The announcements of U.S. Shoe concerning its
remaining assets reveal a plan and intention to sell or otherwise
dispose of all or substantially all of U.S. Shoe's remaining
assets through one or more additional transactions. Such
transactions would substantially affect the existence and purpose
of U.S. Shoe as a corporate entity and would fundamentally change
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the nature of the shareholders' investment in U.S. Shoe.
Therefore, the plan of U.S. Shoe and each such transaction must
be approved by U.S. Shoe's shareholders.
141. In its agreement with Nine West, U.S. Shoe
represents and warrants that the completion of the sale
transaction has been duly authorized by its Board of Directors
and that no further corporate proceedings on the part of U.S.
Shoe are needed to authorize the agreement or to consummate the
transactions contemplated by the agreement. This statement
indicates that U.S. Shoe's directors do not intend to seek
shareholder authorization of any sale transactions.
142. U.S. Shoe's failure to seek and obtain shareholder
authorization of the Nine West agreement and proposed
transaction, and U.S. Shoe's failure to seek and obtain
shareholder approval of the Board of Directors plan to sell or
otherwise dispose of all or substantially all of U.S. Shoe's
other assets through one or more additional transactions,
violates Ohio R.C. Sec. 1701.76.
143. Plaintiffs have no adequate remedy at law.
The Proposed Sale Of The Footwear Operations Violates U.S. Shoe's
Articles Of Incorporation And Cannot Be Consummated Without
An Amendment To Its Articles Adopted By Shareholder Vote
--------------------------------------------------------
(COUNT THIRTEEN)
144. Plaintiffs repeat and reallege the averments set
forth in paragraphs 1-143 of this Complaint as if fully
rewritten herein.
145. Article Third of U.S. Shoe's Amended Articles of
Incorporation states that U.S. Shoe is formed for the following
express purpose, among others:
To manufacture, buy, sell, trade and otherwise
deal in footwear and apparel of all kinds and
other merchandise whether or not kindred thereto;
to own, lease, operate and conduct factories,
stores and agencies for the manufacture, sale and
distribution of footwear and apparel of all kinds
and other merchandise; and to do all things
incidental to the business of manufacturing,
buying, selling, trading and dealing in footwear
and apparel of all kinds and other merchandise
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146. Pursuant to Ohio R.C. Sec. 1701.69(B)(3) and Sec.
1701.71(B)(7), an Ohio corporation may only change a purpose set
forth in its Articles of Incorporation by an amendment to the
Articles adopted by shareholder vote.
147. U.S. Shoe's agreement and proposed transaction with
Nine West is contrary to the purpose set forth in its Articles of
Incorporation, since it would result in U.S. Shoe no longer being
engaged in the manufacture, sale and distribution of footwear.
Completion of the Nine West transaction would substantially
affect the purpose of U.S. Shoe as a corporate entity.
Accordingly, the Nine West transaction requires that the
shareholders amend the Articles of Incorporation to change the
statement of corporate purpose.
148. In its agreement with Nine West, U.S. Shoe
represents and warrants that the completion of the sale
transaction has been duly authorized by its Board of Directors
and that no further corporate proceedings on the part of U.S.
Shoe are needed to authorize the agreement or to consummate the
transactions contemplated by the agreement.
149. U.S. Shoe's failure to seek and obtain shareholder
approval of an amendment to the Articles of Incorporation to
change U.S. Shoe's corporate purpose violates Ohio R.C. Sec.
1701.69(B)(3) and Sec. 1701.71(B)(7).
150. Plaintiffs have no adequate remedy at law.
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Disclosures By U.S. Shoe Following The Tender Offer
Violate The Williams Act, 15 U.S.C. Sec. 78n
--------------------------------------------
(COUNT FOURTEEN)
151. Plaintiffs repeat and reallege the averments set
forth in paragraphs 1-150 of this Complaint as if fully
rewritten herein.
152. On March 16, 1995, U.S. Shoe filed a Schedule 14D-9
with the Securities and Exchange Commission, pursuant to Section
14(d)(4) of the Williams Act, 15 U.S.C. Sec. 78n(d)(4). The
Schedule 14D-9 is required to be filed by a company which is the
subject of a tender offer and is intended to set forth the
company's recommendation to its shareholders concerning the
acceptance or rejection of the tender offer, as well as factual
information relating to that recommendation.
153. Item 7 of Schedule 14D-9 requires U.S. Shoe to
provide certain information concerning negotiations or
transactions undertaken by U.S. Shoe in response to the Tender
Offer which relate to, or which would result in, an extraordinary
transaction such as a merger or reorganization, a sale or
transfer of a material amount of assets, a tender offer for or
other acquisition of securities by U.S. Shoe, or any material
change in capitalization or dividend policy.
154. Section 14(e) of the Williams Act, 15 U.S.C.
Sec.78n(e), makes it unlawful for any person to make any untrue
statement of a material fact or to omit to state any material
fact necessary in order to make the statements made, in the light
of the circumstances in which they were made, not misleading, or
to engage in any fraudulent, deceptive, or manipulative acts or
practices, in connection with any tender offer or in connection
with any solicitation of security holders in opposition to or in
favor of any tender offer.
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155. The Schedule 14D-9 filed by U.S. Shoe purports to
describe the agreement and proposed transaction with Nine West
for the acquisition of U.S. Shoe's footwear operations, but omits
to state material facts concerning that agreement and proposed
transaction. Among other omissions, the Schedule 14D-9 fails to
identify the estimated after-tax proceeds of the transaction, and
also fails to describe how any after-tax proceeds from that
transaction will be used by U.S. Shoe. The Schedule 14D-9 also
is omissive in that it fails to disclose that a shareholder vote
will be required to authorize the agreement and proposed
transaction with Nine West.
156. In addition, while a copy of the agreement with
Nine West is attached as an exhibit to the Schedule 14D-9, the
exhibit is incomplete because material schedules to the agreement
were not filed. Among other material matters, the omitted
schedules purportedly describe the assets being sold, the
liabilities being retained by U.S. Shoe, and the liabilities
being assumed by Nine West. The schedules are necessary to a
full and complete understanding of the Nine West agreement and
proposed transaction, and the omission of such schedules makes
the description of the agreement and proposed transaction
incomplete and misleading.
157. The Schedule 14D-9 filed by U.S. Shoe also is
omissive in that it fails to adequately describe the directors
plan to auction off U.S. Shoe's businesses. The 14D-9 is also
omissive in that it fails to disclose that a shareholder vote
will be required to auction off U.S. Shoe's businesses.
U.S. Shoe refers to its plans to enhance and maximize shareholder
value in the near term as a basis for rejecting the Tender Offer,
but fails to disclose information which is material to shareholders
in evaluating the recommendation of the Board of Directors with
respect to the Tender Offer and the directors' purported plan to
maximize shareholder value in the near term.
158. Plaintiffs have no adequate remedy at law.
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IRREPARABLE INJURY
------------------
159. Unless temporary, preliminary and permanent
injunctive relief is granted, plaintiffs and U.S. Shoe's
shareholders will be irreparably harmed in at least the following
respects:
(a) Luxottica Acquisition faces
the difficulty of proceeding nationwide,
if there is a "summary suspension" in
Ohio, and the inability to consummate
the Tender Offer if the Division denies
permission to proceed with the Tender
Offer because it will be effectively
unable to purchase nationwide;
(b) the confusion, delay, or
litigation resulting from any attempt to
enforce the Take-Over Act will adversely
affect Offeror Plaintiffs' ability to
purchase shares pursuant to the Tender
Offer nationwide, and could be used by
U.S. Shoe's management to frustrate the
Tender Offer and deprive U.S. Shoe
shareholders of the opportunity to
choose whether or not to tender their
shares;
(c) U.S. Shoe shareholders may be
discouraged from accepting the Tender
Offer because of uncertainty surrounding
the Take-Over Act;
(d) U.S. Shoe's shareholders will
be further subjected to corporate
governance inconsistent with their own
best interests and Luxottica Acquisition
may be unable to comply with the illegal
vote required by the Control Share
Acquisition Act;
(e) U.S. Shoe's shareholders may
be deprived of an opportunity to receive
the benefits of Offeror Plaintiffs' all
cash premium offer;
(f) Luxottica Acquisition's
ability to consummate the Tender Offer
may be impeded as a result of U.S.
Shoe's failure to redeem the Rights or
the failure of the members of U.S.
Shoe's Board of Directors who are not
officers to approve the Tender Offer and
thereby render the Poison Pill Plan
inapplicable;
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(g) U.S. Shoe's shareholders will
not have the opportunity to communicate
with Avant-Garde about the affairs of
U.S. Shoe and the Luxottica Acquisition
offer because U.S. Shoe unlawfully
restricted Avant-Garde's access to U.S.
Shoe's shareholder records;
(h) U.S. Shoe's shareholders will be
deprived of their statutory right to approve
the agreement and proposed transaction
with Nine West and the plan to sell other
assets of U.S. Shoe;
(i) U.S. Shoe's shareholders will be denied
their statutory right to approve a change in
corporate purpose as set forth in U.S. Shoe's
Articles of Incorporation; and
(j) U.S. Shoe's shareholders will be subject
to misleading and materially omissive disclosures
by U.S. Shoe.
160. Unless temporary, preliminary and permanent
injunctive relief is granted, shareholders of U.S. Shoe who
reside throughout the United States, including those residing in
the State of Ohio, may be deprived of their right freely to
consider and avail themselves of the Tender Offer and to sell
their shares to Luxottica Acquisition at the substantial premium
over market prices offered pursuant to the Tender Offer.
WHEREFORE, plaintiffs pray that this Court:
(i) declare and adjudge that the Take-Over Act is
unconstitutional as applied to the Tender Offer;
(ii) temporarily, preliminary and permanently enjoin
defendants, their respective assigns and successors, their
directors, officers, agents, employees, attorneys, servants and
shareholders and all persons in active concert or participation
with them, from taking any actions to enforce or apply the Take-
Over Act to the Tender Offer;
(iii) declare and adjudge that Ohio Rev. Code
Sec. 1701.831(E)(1), by virtue of Ohio Rev. Code Sec.
1701.01(CC)(2), is unconstitutional as applied to the Tender
Offer;
(iv) preliminarily and permanently enjoin defendants
from classifying or treating any U.S. Shoe shares as "interested
shares" pursuant to Ohio Rev. Code Sec. 1701.01(CC)(2) for
purposes of conducting the vote on the proposed control share
acquisition under Ohio Rev. Code Sec. 1701.831(E)(1);
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(v) declare and adjudge that the U.S. Shoe's Poison
Pill is illegal, null and void;
(vi) declare and adjudge that U.S. Shoe's Board of
Directors is in breach of their fiduciary duties under Ohio law
for refusing to redeem the Rights;
(vii) declare and adjudge that the members of U.S.
Shoe's Board of Directors who are not officers of the Corporation
are in breach of their fiduciary duties under Ohio law for
failing to approve the Tender Offer and thereby rendering the
Poison Pill Plan inapplicable;
(viii) preliminarily and permanently enjoin U.S.
Shoe and its Board of Directors from taking any steps to enforce
or amend the Poison Pill (except to redeem the Rights);
(ix) preliminarily and permanently order U.S. Shoe and
its Board of Directors to redeem the Rights;
(x) preliminarily and permanently order the members of
U.S. Shoe's Board of Directors who are not officers of the
Corporation to approve the Tender Offer and thereby render the
Poison Pill Plan inapplicable;
(xi) preliminary and permanently order U.S. Shoe and
its Board of Directors to permit Avant-Garde, or its designated
representative, to examine and copy the Shareholder records and
to provide the records on the media requested in the March 7,
1995 Demand Letter from Avant-Garde to U.S. Shoe;
(xii) declare and adjudge that close of business,
March 17, 1995, is the valid and effective record date for the
831 Special Meeting and the valid and effective record date for
the solicitation of Agent Designations;
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<PAGE>
(xiii) declare and adjudge that U.S. Shoe's
directors are in breach of their fiduciary duties under Ohio law
for refusing to negotiate with Luxottica Group and Luxottica
Acquisition;
(xiv) preliminarily and permanently order U.S. Shoe
and its directors to negotiate with Luxottica Group and Luxottica
Acquisition;
(xv) declare and adjudge that U.S. Shoe's directors are
in breach of their fiduciary duties under Ohio law for adopting
certain new and revised benefit plans for directors, officers and
employees;
(xvi) preliminarily and permanently enjoin U.S.
Shoe and its directors from implementing certain benefit plans
revised or adopted since December 1994;
(xvii) declare and adjudge that the proposed sale of
the footwear operations of U.S. Shoe to Nine West and the sale of
other assets by U.S. Shoe to other parties cannot be consummated
unless authorized by a vote of shareholders pursuant to Ohio R.
C. Sec. 1701.76;
(xviii) preliminarily and permanently enjoin U.S.
Shoe and its directors from consummating the proposed sale to
Nine West and the sale of other assets by U.S. Shoe without
shareholder authorization pursuant to Ohio R.C. Sec. 1701.76;
(xix) declare and adjudge that the proposed sale of
the footwear operations of U.S. Shoe to Nine West violates
Article Third of the Amended Articles of Incorporation of U.S.
Shoe;
(xx) preliminarily and permanently enjoin U.S. Shoe and
its directors from consummating the proposed sale to Nine West
until and unless U.S. Shoe's shareholders adopt an amendment to
U.S. Shoe's Articles of Incorporation to change the statement of
corporate purpose, pursuant to Ohio R.C. Sec. 1701.69 and Sec.
1701.71;
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(xxi) declare and adjudge that the Schedule 14D-9
filed by U.S. Shoe violates the Williams Act, 15 U.S.C. Sec.
78n(e);
(xxii) preliminarily and permanently order U.S. Shoe
to amend its Schedule 14D-9 in order to make the various
statements made therein, respecting the Nine West transaction,
the directors' recommendation respecting the Tender Offer and the
directors' purported plan to maximize shareholder value in the
near term, not misleading;
(xxiii) award plaintiffs their costs and
disbursements in this action, including reasonable attorney's
fees; and
(xxiv) grant such other and further relief as the
Court may deem just and proper.
/s/ Thomas B. Ridgley
________________________________
Thomas B. Ridgley (0000910)
Trial Attorney
VORYS, SATER, SEYMOUR AND PEASE
52 East Gay Street
P.O. Box 1008
Columbus, Ohio 43216-1008
(614) 464-6229
Attorneys for Plaintiffs
OF COUNSEL:
WINSTON & STRAWN
Anthony J. D Auria
175 Water Street
New York, New York 10038
(212) 269-2500
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VORYS, SATER, SEYMOUR AND PEASE
Laura G. Kuykendall (0012591)
52 East Gay Street
P.O. Box 1008
Columbus, Ohio 43216-1008
(614) 464-6400
VERIFICATION
------------
Michael A. Boxer, Assistant Secretary and General
Counsel of Luxottica Acquisition Corp., hereby declares, under
penalty of perjury, that he has read the foregoing Third Amended
Complaint and that the allegations contained therein are true to
the best of his knowledge, information and belief.
/s/ Michael A. Boxer
_________________________________________
Michael A. Boxer
Subscribed and sworn to
before me this 23rd day
of March, 1995.
/s/ John V.V. Bryan, JR.
_____________________________
Notary Public
John V.V. Bryan, JR.
Notary Public, State of New York
No. 4993411
Qualified in Nassau County
Certificate filed in New York County
Commission Expires March 16, 1996
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CERTIFICATE OF SERVICE
----------------------
The undersigned hereby certifies that a copy of the
foregoing Third Amended Verified Complaint for Temporary
Restraining Order and for Preliminary and Permanent Injunctive
Relief and Declaratory Judgment was served, by hand delivery,
upon Michael K. Yarbrough, Esq., Frost & Jacobs, One Columbus,
Suite 1000, 10 West Broad Street, Columbus, Ohio 43215-1467; and
by overnight mail upon Joseph Dehner, Esq., Frost & Jacobs,
2500 PNC Center, 201 East Fifth Street, Cincinnati, Ohio a45201,
Counsel for the defendants The United States Shoe Corporation,
Joseph H. Anderer, Philip E. Beekman, Gilbert Hahn, Jr., Roger L.
Howe, Bannus B. Hudson, Lorrence Kellar, Albert M. Kronick,
Thomas Laco, Charles S. Mechem, Jr., John L. Roy, and Phyllis S.
Sewell; and by hand delivery upon Daniel Molkoff, Esq., Assistant
Attorney General, State Office Tower, 26th Floor, Columbus,
Ohio 43215, Counsel for defendants Mark Holderman, Donna Owens,
and State of Ohio, this 24th day of March, 1995.
/s/ David A. Westrup
___________________________________________
David A. Westrup
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