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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. 14)
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 7 Pages
The Exhibit Index is located on Page 5
<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. 14. 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 10. ADDITIONAL INFORMATION
Item 10(e) is hereby amended to add the following:
(e) On April 6, 1995, the Company Defendants filed with the
District Court an Amended Answer and Amended Counterclaim (the
"Second Answer and Amended Counterclaim") denying the material
allegations of the Third Amended Complaint, restating Counts I
through IX of the Answer and Amended Counterclaim, and adding
five additional counts to their counterclaim.
Count X of the Second Answer and Amended Counterclaim
alleges that the Luxottica Plaintiffs made false and misleading
statements in two letters to the Company's shareholders, one of
which accompanied the 831 Proxy Statement and one of which
accompanied the definitive Solicitation Statement dated March 28,
1995 of Parent and the Purchaser soliciting agent designations to
call the Special Meeting (the "Solicitation Statement"). In
these letters to shareholders, the Luxottica Plaintiffs urged
shareholders of the Company to "keep the pressure on" the
Company's Board of Directors to negotiate in good faith and to
encourage the Board to negotiate in good faith. The Company
alleges that these statements were false and misleading because
at the time they were made, as noted in the Solicitation
Statement, counsel to the Luxottica Plaintiffs and counsel to the
Company were discussing a form of confidentiality agreement. The
Luxottica Plaintiffs intend to deny the allegations that the
statements in the shareholder letters were false and misleading.
At the time the statements were made the Luxottica Plaintiffs'
efforts to obtain confidential information, which had already
been given to other parties, were being frustrated by the inability
of the parties to agree on a confidentiality agreement, principally
due to the Company's insistence that the confidentiality agreement
contain a two-year standstill provision applicable to Parent and
its affiliates. There were no negotiations between the Luxottica
Plaintiffs and the Company taking place on any transaction with
the Company. Therefore, it was not in any way false or misleading
for the Luxottica Plaintiffs to urge the Company's shareholders
to encourage the Company's Board of Directors to negotiate in good
faith with the Luxottica Plaintiffs.
Count XI of the Second Answer and Amended Counterclaim
alleges that the Solicitation Statement is false and misleading
because it provides information on the price of the Shares prior
to the commencement of the Offer but does not state that the
Shares traded at $24 per Share as recently as the Company's
fiscal quarter ended October 29, 1994 and have traded at prices
more than $2 in excess of the $24 per share Offer price since the
commencement of the Offer. The Luxottica Plaintiffs intend to
deny the allegations that their statements about the price of the
Shares were false and misleading. The statements were true, and
the Company Defendants do not deny this fact. Moreover, the $24
per Share trading price in the quarter ended October 29, 1994 was
disclosed in the Offer to Purchase of Parent and the Purchaser
previously delivered to the Company's shareholders. Further,
such $24 per Share price was reached shortly after the public
announcement of a proposal by Nine West for a transaction with
the Company, and the price declined shortly thereafter when the
Company's Board of Directors rejected the proposal. The other
information about the price of the Company's Shares is publicly
available to holders of Shares, and the Luxottica Plaintiffs were
not required to include it in the Solicitation Statement.
2
<PAGE>
Count XII of the Second Answer and Amended Counterclaim
relates to the Solicitation Statement and is similar to Count VII
which relates to the 831 Proxy Statement. Count XII alleges that
Schedule III to the Solicitation Statement (the "Solicitation
Schedule III") contains a false and misleading description of the
Company's Shares owned by Mellon and its subsidiaries. In
particular, the Company alleges that the manner in which the
Luxottica Plaintiffs described the ownership of these Shares could
lead an investor to reasonably conclude that Mellon and its
subsidiaries own 16,158,000 (34.85%), rather than 4,678,000 (10.09%),
of the Shares, which the Company asserts are the correct number of
Shares and percentages. The Luxottica Plaintiffs intend to deny
that the Solicitation Schedule III is false and misleading. The
designation "c/o Mellon Bank" specifically appears after the
three Mellon subsidiaries mentioned in the Solicitation Schedule
III. Moreover, to the extent that the Solicitation Schedule III could
be read to suggest that Mellon and its subsidiaries own
more than 10.09% of the Shares, the Luxottica Plaintiffs relied
in good faith on a description of the ownership of the Shares set
forth in Amendment No. 3 to the Schedule 13G filed by Mellon on
March 8, 1995. The Schedule 13G is a publicly filed document and
was the sole source of the Luxottica Plaintiffs' information, which
as stated in the Solicitation Schedule III, was derived from the
Schedule 13G.
Count XIII of the Second Answer and Amended Counterclaim
alleges that the form of agent designation for the Solicitation
Statement is misleading because while the Solicitation Statement
states that the Luxottica Plaintiffs may elect to make additional
proposals at the Special Meeting, the form of agent designation
does not clearly state that additional proposals may be made.
The Luxottica Plaintiffs intend to deny that the form of agent
designation is misleading since it clearly contemplates that
other matters may come before the Special Meeting. Any other
matter proposed by the Luxottica Plaintiffs would be identified
in the proxy material for the Special Meeting and the Company's
shareholders would have the right to vote on it. As the
Solicitation Statement clearly states on its cover, the agent
designations will not confer any rights to vote on matters
brought before the Special Meeting and, if the Special Meeting is
called, separate proxy materials will be sent with respect to
such matters.
Count XIV of the Second Answer and Amended Counterclaim alleges
that the Solicitation Statement is false and misleading because
it states (i) that the date for determining shareholders of the
Company entitled to call the Special Meeting is the date that
the meeting is called (the "Call Date") rather than a record date
determined by the Company's Board of Directors after the Company
"determines preliminary" that at least 50% of the Company's
shareholders have attempted to call the Special Meeting and (ii)
that revocations of agent designations will not affect actions
taken prior to such revocation. The Luxottica Plaintiffs intend
to deny that the date for determining Company shareholders
entitled to call the Special Meeting is any date other than the
Call Date because Ohio law and the Company's regulations clearly
and unambiguously afford to the holders of 50% of its Shares the
right to call the Special Meeting, without reference to any
requirement that the calling shareholders continue to hold their
Shares after the Call Date. The Luxottica Plaintiffs also
intend to deny that revocations of agent designations would
affect actions taken prior to such revocation because the
revocation of the authority of an agent does not retroactively
invalidate actions previously taken by the agent within the scope
of his authority.
The foregoing description of the Answer and Amended
Counterclaim is qualified in its entirety by reference to the
Second Answer and Amended Counterclaim filed as Exhibit (g)(13)
hereto.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS
Item 11 is hereby amended and supplemented by adding the following exhibit:
<TABLE>
<S> <C>
(g)(13) --Amended Answer of 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 to Third Amended Complaint and Amended Counterclaim of Defendant
The United States Shoe Corporation Against Plantiffs for Preliminary and Permanent
Injunction for Misstatements and Omissions in SEC Filings and Tender Offer
Materials, filed on April 6, 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>
3
<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: April 11, 1995 By: /s/ Claudio Del Vecchio
..............................
Claudio Del Vecchio
Managing Director
LUXOTTICA ACQUISITION CORP.
Dated: April 11, 1995 By: /s/ Claudio Del Vecchio
..............................
Claudio Del Vecchio
President
4
<PAGE>
EXHIBIT INDEX
<TABLE><CAPTION>
EXHIBIT PAGE
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<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 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>
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* Previously filed.
5
<PAGE>
<TABLE><CAPTION>
EXHIBIT PAGE
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<S> <C> <C>
(a)(22) --Text of Press Release issued by Parent, dated March 30, 1995.............. *
(a)(23) --Text of Press Release issued by Parent, dated March 30, 1995.............. *
(a)(24) --Letter to the Shareholders of The United States Shoe Corporation dated
March 28, 1995, to accompany the Definitive Proxy Statement dated March
25, 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, as filed with the Securities and Exchange Commission on March 29,
1995 and incorporated herein by reference.
(a)(25) --Text of Press Release issued by Parent, dated March 31, 1995.............. *
(a)(26) --Text of Press Release issued by Parent, dated April 2, 1995............... *
(a)(27) --Text of Press Release issued by Parent, dated April 4, 1995 .............. *
(b)(1) --Commitment Letter, dated March 2, 1995, from Credit Suisse................ *
(c)(1) --Proposed Confidentiality Agreement among Parent, the Purchaser and
the Company dated March 30, 1995 delivered by Parent's Counsel to
the Company on March 31, 1995............................................. *
(c)(2) --Executed Confidentiality Agreement among Parent, the Purchaser
and the Company dated March 31, 1995 ..................................... *
(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 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 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>
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* Previously filed.
6
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT PAGE
- ------- ----
<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)......... *
(g)(12) --Answer of 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 Amended 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 30, 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)(13) --Amended Answer of 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 to Third Amended Complaint and Amended Counterclaim of Defendant
The United States Shoe Corporation Against Plantiffs for Preliminary and Permanent
Injunction for Misstatements and Omissions in SEC Filings and Tender Offer
Materials, filed on April 6, 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>
7
Exhibit (g)(13)
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. : AMENDED ANSWER OF
: DEFENDANTS THE UNITED STATES
The United States Shoe Corporation,: SHOE CORPORATION, JOSEPH H.
et al., : ANDERER, PHILIP E. BEEKMAN,
: GILBERT HAHN, JR., ROGER L.
Defendants, : HOWE, BANNUS B. HUDSON,
: LORRENCE KELLAR, ALBERT M.
: KRONICK, THOMAS LACO,
: CHARLES S. MECHEM, JR., JOHN
: L. ROY AND PHYLLIS S. SEWELL
: TO THIRD AMENDED COMPLAINT
: AND AMENDED COUNTERCLAIM
: OF DEFENDANT THE UNITED
: STATES SHOE CORPORATION
: AGAINST PLAINTIFFS FOR
: PRELIMINARY AND PERMANENT
: INJUNCTION FOR MISSTATEMENTS
: AND OMISSIONS IN SEC FILINGS
: AND TENDER OFFER MATERIALS
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FIRST DEFENSE
-------------
1. The following is an Answer to the Third 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,
Phillip 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
<PAGE>
Amended Counterclaims by U. S. Shoe against Plaintiffs for violations of the
federal securities laws applicable to tender offers. The Counterclaim begins on
page seventeen.
2. The U. S. Shoe Defendants admit so much of paragraph one of the Third
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.
-2-
<PAGE>
7. The U. S. Shoe Defendants admit the averments of paragraph six of the
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 to Counts One and Two of the Complaint, and deny
all other averments of paragraph twelve of the Complaint.
-3-
<PAGE>
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 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
-4-
<PAGE>
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 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.
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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 Complaint.
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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.
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.
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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 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.
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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.
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.
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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 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.
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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 that
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 seventy-one
of the Complaint.
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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.
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83. The U. S. Shoe Defendants incorporate their Answer and Defenses to the
averments of paragraph eighty-two of the Complaint.
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.
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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.
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.
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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.
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.
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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 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.
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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.
123. The U. S. Shoe Defendants deny the averments of paragraph 122 of the
Complaint.
124. The U. S. Shoe Defendants incorporate their Answer and Defenses to the
averments of paragraph 123 of the Complaint.
125. The U. S. Shoe Defendants admit so much of the first sentence of
paragraph 124 as may aver that in December, 1994 and January, 1995, Luxottica
and its financial advisors gave certain indications to U. S. Shoe and its
financial advisor that Luxottica Group was interested in conducting certain
discussions of Luxottica's interest to purchase U. S. Shoe and in particular the
Optical Group, and deny all other averments of the first sentence of paragraph
124. The U. S. Shoe Defendants admit the averments of the second sentence of
paragraph 124 of the Complaint.
126. The U. S. Shoe Defendants are without knowledge or information
sufficient to form a belief as to the averments of the first clause of the first
sentence of paragraph 125, and admit the averments of the second clause. The
U. S. Shoe Defendants deny the averments of the second sentence of paragraph 125
of the Complaint and incorporate in response the material
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set forth in U. S. Shoe's Schedule 14D-9, filed with the Securities and Exchange
Commission, as amended by the First and Second Amendments thereto, copies of
which are attached as Exhibits A, B and C (herein collectively referred to as
the "14D-9.")
127. The U. S. Shoe Defendants admit so much of paragraph 126 as may aver
that U. S. Shoe issued certain press releases, say that the press releases speak
for themselves, incorporate the 14D-9, and deny all other averments of paragraph
126 of the Complaint.
128. The U. S. Shoe Defendants admit so much of the first sentence of
paragraph 127 as may aver that U. S. Shoe issued certain press releases, say
said press releases speak for themselves, incorporate the 14D-9, and deny all
other averments of the first sentence of paragraph 127. The U. S. Shoe
Defendants deny the averments of the second sentence of paragraph 127 of the
Complaint.
129. The U. S. Shoe Defendants deny the averments of paragraph 128 of the
Complaint.
130. In answer to paragraph 129, the U. S. Shoe Defendants say that Ohio
Rev. Code Sec.1701.59 speaks for itself, and deny all other averments of
paragraph 129 of the Complaint.
131. The U. S. Shoe Defendants admit the averments of paragraph 130 of the
Complaint.
132. The U. S. Shoe Defendants admit the averments of paragraph 131 of the
Complaint.
133. The U. S. Shoe Defendants admit the averments of paragraph 132 of the
Complaint.
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134. The U. S. Shoe Defendants admit the averments of paragraph 133 of the
Complaint.
135. The U. S. Shoe Defendants admit the averments of paragraph 134 of the
Complaint.
136. The U. S. Shoe Defendants deny the averments of paragraph 135 of the
Complaint.
137. The U. S. Shoe Defendants deny the averments of paragraph 136 of the
Complaint.
138. The U. S. Shoe Defendants incorporate their Answer and Defenses to the
averments of paragraph 137 of the Complaint.
139. In answer to paragraph 138, the U. S. Shoe Defendants say Ohio R.C.
Sec.1701.76 speaks for itself, and deny all other averments of paragraph 138 of
the Complaint.
140. The U. S. Shoe Defendants deny the averments of paragraph 139 of the
Complaint.
141. The U. S. Shoe Defendants deny the averments of paragraph 140 of the
Complaint.
142. The U. S. Shoe Defendants admit the averments of paragraph 141 of the
Complaint, and refer to paragraph 3.2 of the Nine West Agreement for the context
of "corporating proceedings" for the purpose of these averments.
143. The U. S. Shoe Defendants deny the averments of paragraph 142 of the
Complaint.
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144. The U. S. Shoe Defendants deny the averments of paragraph 143 of the
Complaint.
145. The U. S. Shoe Defendants incorporate their Answer and Defenses to the
averments of paragraph 144 of the Complaint.
146. The U. S. Shoe Defendants admit that the quoted section of the
averments of paragraph 145 of the Complaint correctly recite a portion of the
Article Third of U. S. Shoe's Articles of Incorporation, and incorporate the
entire Article Third as a full and correct recitation of what it contains.
147. In answer to paragraph 146, the U. S. Shoe Defendants say Ohio Rev.
Code Sec.Sec.1701.69(B)(3) and 1701.71(B)(7) speak for themselves, and deny all
other averments of paragraph 146 of the Complaint.
148. The U. S. Shoe Defendants deny the averments of paragraph 147 of the
Complaint.
149. The U. S. Shoe Defendants admit the averments of paragraph 148 of the
Complaint, except that certain "corporate proceedings" may be necessary to close
the transaction.
150. The U. S. Shoe Defendants deny the averments of paragraph 149 of the
Complaint.
151. The U. S. Shoe Defendants deny the averments of paragraph 150 of the
Complaint.
152. The U. S. Shoe Defendants incorporate their Answer and Defenses to the
averments of paragraph 151 of the Complaint.
153. The U. S. Shoe Defendants admit the averments of the first sentence of
paragraph 152, say that the Williams Act and the rules and regulations
promulgated thereunder speak for
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themselves, incorporate the 14D-9, and deny all other averments of paragraph 152
of the Complaint.
154. In answer to paragraph 153, the U. S. Shoe Defendants say that the
Williams Act and the rules and regulations promulgated thereunder speak for
themselves, and deny all other averments of paragraph 153 of the Complaint.
155. In answer to paragraph 154, the U. S. Shoe Defendants say that the
Williams Act and the rules and regulations promulgated thereunder speak for
themselves, and deny all other averments of paragraph 154 of the Complaint.
156. The U. S. Shoe Defendants incorporate in response the 14D-9 and deny
all other or inconsistent averments of paragraph 155 of the Complaint.
157. The U. S. Shoe Defendants deny the averments of paragraph 156 of the
Complaint.
158. The U. S. Shoe Defendants deny the averments of paragraph 157 of the
Complaint.
159. The U. S. Shoe Defendants deny the averments of paragraph 158 of the
Complaint.
160. The U. S. Shoe Defendants deny the averments of paragraph 159 of the
Complaint.
161. The U. S. Shoe Defendants deny the averments of paragraph 160 of the
Complaint.
162. The U. S. Shoe Defendants deny all other averments not specifically
admitted herein.
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SECOND DEFENSE
--------------
163. 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-1, as described below.
THIRD DEFENSE
-------------
164. Plaintiffs, or one or more of them, lack standing to assert the claims
alleged in Counts Six through Eight and Eleven through Thirteen of the Third
Amended Complaint, and may lack standing to assert other claims alleged.
FOURTH DEFENSE
--------------
165. The Complaint fails to state a claim, in whole or in part, upon which
relief may be granted.
COUNTERCLAIMS OF U. S. SHOE
---------------------------
JURISDICTION
------------
166. 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 and their solicitation of "Agent
Designations" until full and fair disclosure is made to the investing public, as
required by the federal securities laws and the Ohio Take-Over Act.
167. This Court has subject matter jurisdiction over Counts I through VII
and X through XIV of U. S. Shoe's Counterclaim pursuant to the provisions 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
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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.
168. This Court has subject matter jurisdiction over Counts VIII and IX of
U. S. Shoe's Counterclaim for violations of Ohio Rev. Code Sec.Sec. 1707.041
pursuant to the principles of diversity and pendant jurisdiction.
169. 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.
170. The acts of Plaintiffs alleged herein occurred in and have a
substantial effect on interstate commerce.
FACTS COMMON TO ALL COUNTERCLAIMS
---------------------------------
171. 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. Some shares have been tendered
and, by its terms, the Tender Offer will expire at 12:00 midnight, EST, April
13, 1995.
172. The Shares are a class of equity securities registered on the New York
and Pacific Stock Exchanges.
173. Luxottica and Luxottica Acquisition have filed a Schedule 14D-1, as
amended, (the "14D-1"), under Section 14(d) of the Exchange Act, with the
Securities and Exchange
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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.
174. 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.
175. 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").
176. 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.
177. 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 Delaware subsidiary of Luxottica (the
"Borrower").
178. 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.
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179. 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.
180. 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."
181. The Commitment Letter indicates that all amounts owing under the
Credit Facility (and all obligations under the guarantees 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)."
182. 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
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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.
183. 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").
184. In Amendment No. 4 to the 14D-1 ("Fourth Amendment") filed by
Luxottica and Luxottica Acquisition on March 16, 1995, Luxottica 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.
185. 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."
186. U.S. Shoe's agreement with Nine West is not conditioned on
financing.
187. 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.
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<PAGE>
188. 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.
189. In fiscal 1994, LensCrafters purchased eyeglass frames from
approximately thirty-three frame manufactures. Traditionally, LensCrafters has
purchased a relatively modest volume of frames from 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.
190. 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 a 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.
191. 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).
---------------
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<PAGE>
192. 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).
- ----------------------------------
193. Upon information and belief, the Italian press has reported that
Mr. Del Vecchio, the wealthiest taxpayer in Italy, is 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
------------------------------------------------------------------
194. U.S. Shoe incorporates by reference each allegation contained
above as if restated in full herein.
195. Schedule 14D-1, Item 5, requires Luxottica and Luxottica
Acquisition to disclose the purpose of the Tender Offer.
196. 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 14D-1.
197. The 14D-1 is materially misleading regarding the purpose of the
Tender Offer, because it does not disclose the true purposes for the Tender
Offer.
198. The 14D-1 violates Sec.Sec. 14(d) and (e) of the Exchange Act, 15
U.S.C Sec. 78n, and the rules and regulations promulgated thereunder.
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<PAGE>
199. U.S. Shoe will suffer irreparable injury unless Plaintiffs'
violations described above are enjoined.
200. U.S. Shoe does not have a adequate remedy at law for Plaintiffs'
violations described above.
COUNT II
--------
Violation of Sec. 14 of the Exchange Act - Tender Offer Structure
-----------------------------------------------------------------
201. U.S. Shoe incorporates by reference each allegation contained
above as if restated in full herein.
202. Schedule 14D-1 requires identification of the "Bidder" on whose
behalf a tender offer is made.
203. Schedule 14D-1 defines "Bidder" as "any person or entity on whose
behalf a tender offer is made."
204. 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.
205. 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
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<PAGE>
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.
206. 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.
207. The Offer violates Sec.Sec. 14(d) and (e) of the Exchange Act, 15
U.S.C. Sec. 78n, and the rules and regulations promulgated thereunder.
208. U.S. Shoe will suffer irreparable injury unless Plaintiffs'
violations described above are enjoined.
209. U.S. Shoe does not have a adequate remedy at law for Plaintiffs'
violations described above.
COUNT III
---------
Violations of Sec. 14 of the Exchange Act - Control of Bidder
-------------------------------------------------------------
210. U.S. Shoe incorporates by reference each allegation above as if
restated in full herein.
211. Schedule 14D-1, Item 10(f), requires Luxottica and Luxottica
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."
212. Schedule 14D-1, General Instruction C, requires Luxottica and
Luxottica Acquisition to provide information regarding "each person controlling
such corporation."
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<PAGE>
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-1.
213. The 14D-1 violates Sec.Sec. (d) and (e) of the Exchange Act, 15
U. S. C Sec. 78 n, and the rules and regulations promulgated thereunder.
214. U. S. Shoe will suffer irreparable injury unless Plaintiffs'
violations described above are enjoined.
215. U. S. Shoe does not have a adequate remedy at law for
Plaintiffs' violations described above.
COUNT IV
--------
Violation of Sec. 14 of the Exchange Act - Description of Financing
------------------------------------------------------------------
216. U. S. Shoe incorporated by reference each allegation contained
above as if restated in full herein.
217. Schedule 14D-1, Item 5, requires Luxottica to describe the
financing of the Tender Offer.
218. The 14D-1 fails to meet the requirements of Schedule 14D-1 and is
misleading, because it fails to disclose material facts 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
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<PAGE>
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 Luxottica Acquisition Corp., rather than "Newco 1"
or some other Luxottica subsidiary.
(c) The Offer states that "... 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 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.
-32-
<PAGE>
(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.
(h) 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.
219. The 14D-1 violates Sec.Sec. 14(d) and (e) of the Exchange Act, 15
U.S.C. Sec. 78n, and the rules and regulations promulgated thereunder.
220. U.S. Shoe will suffer irreparable injury unless Plaintiffs'
violations described above are enjoined.
221. U.S. Shoe does not have a adequate remedy at law for Plaintiffs'
violations described above.
COUNT V
-------
Violation Sec. 14 of Exchange Act - Misstatement About U.S. Shoe's Agreement
----------------------------------------------------------------------------
222. U.S. Shoe incorporates by reference each allegation contained
above as if restated in full herein.
223. 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.
224. The 14D-1 violates Sec.Sec. 14(d) and (e) of the Exchange Act, 15
U.S.C Sec. 78n, and the rules and regulations promulgated thereunder.
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<PAGE>
225. U.S. Shoe will suffer irreparable injury unless Plaintiffs'
violations described above are enjoined.
226. U.S. Shoe does not have a adequate remedy at law for Plaintiffs'
violations described above.
COUNT VI
--------
Violations of Sec. 14 of Exchange Act - Regulation U
----------------------------------------------------
227. U.S. Shoe incorporates by reference each allegation contained
above as if restated in full herein.
228. 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.
(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.
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<PAGE>
(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
or the Credit Facility without violating the Board Regulations.
(g) The Offer fails to disclose the possible effect of
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.
229. The 14D-1 violates Sec.Sec. 14 (d) and (e) of the Exchange Act,
15 U.S.C. Sec. 78n, and the rules and regulations promulgated thereunder.
230. U.S. Shoe will suffer irreparable injury unless Plaintiffs'
violations described above are enjoined.
-35-
<PAGE>
231. U.S. Shoe does not have a adequate remedy at law for Plaintiffs'
violations described above.
COUNT VII
---------
232. U.S. Shoe incorporates by reference each allegation contained
above as if restated in full herein.
233. On or about March 21, 1995, Luxottica and Luxottica Acquisition
filed proxy materials including a definitive a Proxy Statement with the
Securities and Exchange commission pursuant to Sec. 14(a) of the Exchange Act
(the "Proxy Statement").
234. In Schedule III of the Proxy Statement, Luxottica and Luxottica
Acquisition state that Mellon Bank Corporation is the owner of 4,678,000 common
shares of U.S. Shoe, representing 10.09% of all the outstanding common shares,
that Boston Group Holdings c/o Mellon Bank Corporation, is the owner of
4,307,000 common shares, representing 9.29% of all the outstanding common
shares, and that the Boston Company Asset Management , Inc., c/o Mellon
Bank Corporation, is the owner of 2,866,000 common shared, representing 6.18% of
all the outstanding common shares.
235. From the statement described above, a reasonable investor could
reasonably conclude that Mellon Bank Corporation and its subsidiaries own
16,158,000 common shares, representing 34.85 of the common shares, and that
Mellon Bank Corporation and its subsidiaries therefore have the power to control
the acceptance or rejection of the Tender Offer.
-36-
<PAGE>
236. The common share ownership of Mellon Bank Corporation and its
subsidiaries is a material fact.
237. In the Proxy Statement, Luxottica and Luxottica Acquisition
attribute the information about the share ownership of Mellon Bank Corporation
and its subsidiaries reported in the Proxy Statement to Amendment No. 3 to a
Form 13G filed by Mellon Bank Corporation on March 8, 1995 (the "Schedule 13G").
238. The 13G reports that the total common shares owned by Mellon Bank
Corporation and its subsidiaries is 4,676,000, representing 10.09% of all the
outstanding common shares.
239. In Item 4 "Ownership" of the Schedule 13G, it is stated.
The amount beneficially owned includes, where appropriate
securities not outstanding which are subject to options,
warrants, rights or conversion privileges that are exercisable
within 60 days. The filing of this Schedule 13G shall not be
construed as an admission that Mellon Bank Corporation, or its
direct or indirect subsidiaries, including Mellon Bank, N.A., are
for the purposes of Section 13(d) or 13(g) of the Act, the
beneficial owners of any securities covered by this Schedule 13G.
240. In Item 6 of the 13G, it is stated:
All of the securities are beneficially owned by Mellon Bank or
its direct and indirect subsidiaries in their various fiduciary
capacities. As a result, another entity in every instance is
entitled to dividends or proceeds of sale. The number of
individual accounts holding an interest of 5% or more is 0.
241. The description of the common share ownership of Mellon Bank
Corporation and its subsidiaries in the Proxy Statement is false
and misleading, in violation of Sec. 14(e) of the Exchange Act,
and the rules and regulations promulgated thereunder.
242. U.S. Shoe will suffer irreparable injury unless Plaintiffs'
violations described above are enjoined.
-37-
<PAGE>
243. U.S. Shoe does not have a adequate remedy at law for Plaintiffs'
violations described above.
COUNT VIII
----------
244. U.S. Shoe incorporates by reference each allegation contained
above as is restated in full herein.
245. 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.
246. 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.
247. 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.
248. 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.
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<PAGE>
249. Luxottica's public announcements that is 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. 14(e) of the
Exchange Act, 15 U.S.C. Sec. 78n, and the rules and regulations promulgated
thereunder.
250. U.S. Shoe will suffer irreparable injury unless Plaintiffs'
violations described above are enjoined.
251. U.S. Shoe does not have a adequate remedy at law for Plaintiffs'
violations described above.
COUNT IX
--------
Violations of Ohio Rev. Code Sec. 1707.041
-----------------------------------------
252. U.S. Shoe incorporates by reference each allegation contained
above as if restated in full herein.
253. 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, or make any other changes
to its business structure, management or personnel, or policies of employment.
254. Ohio Rev. Code Sec. 1707.041 also requires that Luxottica and
Luxottica Acquisition send of deliver to all offerees in Ohio complete
information on the organization and operations
-39-
<PAGE>
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 Acquisitions 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.
255. Luxottica and Luxottica Acquisition 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.
256. U.S. Shoe will suffer irreparable injury unless Plaintiffs'
violations described above are enjoined.
257. U.S. Shoe does not have a adequate remedy at law for Plaintiffs'
violations described above.
COUNT X
-------
Violation of Sec. 14 of Exchange Act - False and Misleading Statements
----------------------------------------------------------------------
in Proxy Materials Regarding Luxottica's Negotiations with U.S. Shoe
--------------------------------------------------------------------
-40-
<PAGE>
258. U.S. Shoe incorporates by reference each allegation contained
above as if restated in full herein.
259. The federal proxy rules provide, in part, as follows:
"No solicitation subject to this regulation shall be made by
means of any proxy statement, form of proxy, notice of meeting or
other communication, written or oral, containing any statement
which, at the time and in the light of the circumstances under
which it is made, is false or misleading with respect to any
material fact, or which omits to state any material fact
necessary in order to make the statements therein not false or
misleading or necessary to correct any statement in any earlier
communication with respect to the solicitation of a proxy for the
same meeting or subject matter which has become false or
misleading."
17 C.F.R. Sec. 240.14a 9(a).
260. In two letters from Claudio Del Vecchio, to U.S. Shoe
shareholders, Mr. Del Vecchio made misleading statements about the willingness
of the U.S. Shoe Board of Directors and management to negotiate in good faith
with Luxottica. In a letter from Mr. Del Vecchio to U.S. Shoe shareholders
dated March 28, 1995, which accompanies Luxottica's proxy materials regarding
the meeting under Ohio Rev. Code Sec. 1701.831 (the "831 Letter"), Mr. Del
Vecchio made the following false and misleading statements.
KEEP THE PRESSURE ON THE U.S. SHOE BOARD TO
NEGOTIATE IN GOOD FAITH WITH LUXOTTICA!
. . . .
IF YOU WANT U.S. SHOE TO NEGOTIATE WITH
LUXOTTICA IN GOOD FAITH VOTE TODAY FOR THE "831
PROPOSAL" ON THE BLUE CARD.
SEND A CLEAR MESSAGE TO U.S. SHOE MANAGEMENT
TO STOP STALLING AND NEGOTIATE THE BEST DEAL
FOR SHAREHOLDERS RATHER THAN GOLDEN
PARACHUTES FOR THEMSELVES.
-41-
<PAGE>
261. In a second letter to U.S. Shoe shareholders dated March 28,
1995, which is to accompany Luxottica's solicitation of Agent Designations
for the call of a special meeting of U.S. Shoe shareholders (the "Agent
Designation Solicitation Letter"), Mr. Del Vecchio makes the following
misleading statements:
KEEP THE PRESSURE ON THE U.S. SHOE BOARD TO NEGOTIATE
IN GOOD FAITH WITH LUXOTTICA. SIGN AND RETURN THE GOLD
CARD.
262. These statements are misleading in the context in which they are
made, because they imply that the U.S. Shoe Board and management are not
negotiating in good faith with Luxottica, and that U.S. Shoe management is
stalling and failing to negotiate the best deal for shareholders. These
statements contradict an accurate statement of the facts surrounding the
negotiations between Luxottica and U.S. Shoe, which appears at page eight
of Luxottica's Solicitation Statement as follows:
On March 23, 1995, Bannus B. Hudson of U.S. Shoe sent a
letter to Claudio Del Vecchio of Luxottica 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, U.S. Shoe's counsel
delivered to Luxottica's counsel a revised form of
confidentiality agreement. As of the date hereof, U.S.
Shoe's counsel and Luxottica's counsel are discussing
this form of confidentiality agreement.
263. Mr. Del Vecchio's letter to U.S. Shoe shareholders violate Sec.
14(a) of the Exchange Act, 15 U.S.C. Sec 78n, and the rules and regulations
promulgated thereunder.
264. U.S. Shoe will suffer irreparable injury unless Plaintiffs'
violations described above are enjoined.
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<PAGE>
265. U.S. Shoe does not have an adequate remedy at law for Plaintiffs'
violations described above.
COUNT XI
--------
Violation of Sec. 14 of Exchange Act - Failure to Disclose Recent Market
------------------------------------------------------------------------
Price for U.S. Shoe Shares in Proxy Materials
---------------------------------------------
266. U.S. Shoe incorporates by reference each allegation contained
above as if restated in full herein.
267. In the definitive proxy statement filed with the SEC on March 29,
1995, Luxottica provides an incomplete description of recent market prices
for U.S. Shoe shares while urging shareholders to return Agent Designations
if they are in favor of receiving the opportunity to sell their shares to
Luxottica for $24 in cash. Luxottica states that "[o]ver the past twelve
months the Shares have traded as low as $13.50 per Share. The Offer
represents more than a 75% premium over that price and a 28% premium over
the reported closing price for the shares on the NYSE composite tape on
March 2, 1995, the day before the Offer was first publicly disclosed."
Solicitation Statement at p. 2.
268. In its definitive proxy statement, Luxottica fails to disclose
that U.S. Shoe shares traded at $24 per share as recently as the third
quarter of the fiscal year ending January 28, 1995, and have traded more
recently at prices more than $2 per share in excess of Luxottica's $24 per
share offer. In the absence of this information, Luxottica's statements
regarding recent market prices for U.S. Shoe stock are materially
misleading and in violation of Sec. 14(e) of the Exchange Act, and the
rules and regulations promulgated thereunder.
-43-
<PAGE>
269. U.S. Shoe will suffer irreparable injury unless Plaintiffs'
violations described above are enjoined.
270. U.S. Shoe does not have an adequate remedy at law for Plaintiffs'
violations described above.
COUNT XII
---------
Violation of Sec. 14 of Exchange Act -
---------------------------------------
False and Misleading Statements in Proxy Materials
---------------------------------------------------
Regarding the Number of Shares Owned by Mellon Bank Corporation
---------------------------------------------------------------
271. U.S. Shoe incorporates by reference each allegation contained
above as though rewritten.
272. In Schedule III to its Solicitation Statement, Luxottica reports
that Mellon Bank Corporation is the owner of 4,678,000 common shares,
representing 10.09% of all outstanding common shares, that Boston Group
Holdings, c/o Mellon Bank Corporation, is the owner of 4,307,000 common
shares, representing 9.29% of all the outstanding common shares, that The
Boston Company, Inc., c/o Mellon Bank, is the owner of 4,307,000 common
shares, representing 9.29% of all the outstanding common shares, and that
The Boston Company Asset Management, Inc., c/o Mellon Bank Corporation, is
the owner of 2,866,000 common shares, representing 6.18% of all the
outstanding common shares.
273. As the result of this statement, it appears to the reader of
Luxottica's Solicitation Statement that Mellon Bank and its subsidiaries
are beneficial owners of 16,185,000 common shares of U.S. Shoe,
representing 34.85% of the outstanding common shares, and that Mellon Bank
and its subsidiaries therefore may have significant power to control the
acceptance or
-44-
<PAGE>
rejection of 831 Solicitation and the Tender Offer itself. In fact, Mellon
Bank and its subsidiaries together own 10.09% of the outstanding common
shares.
274. The Schedule III to the Solicitation Statement violates Sec 14(a)
of the Exchange Act, 15 U.S.C. Sec. 78, and the rules and regulations
promulgated thereunder.
275. U.S. Shoe will suffer irreparable injury unless Plaintiffs'
violations described above are enjoined.
276. U.S. Shoe does not have an adequate remedy at law for Plaintiffs'
violations described above.
COUNT XIII
----------
Violation of Sec. 14 of Exchange Act - Misleading
-------------------------------------------------
Statements in Agent Designation Form as to
-------------------------------------------
the Purposes of the Special Meeting
-----------------------------------
277. U.S. Shoe incorporates by reference each allegation contained
above as if restated in full herein.
278. Luxottica's Agent Designation Form states that the Agent
Designations are being solicited for the purpose of calling a special
meeting of U.S. Shoe shareholders at which the shareholders will consider
and vote upon (1) a proposal to remove all incumbent directors of U.S. Shoe
and elect new directors, (2) a proposal to amend the Regulations of U.S.
Shoe to provide that Ohio Rev. Code Sec. 1701.831 does not apply to control
share acquisitions unless the shareholders approve the control share
acquisition by Luxottica or Luxottica is otherwise satisfied that the
statute is invalid or does not apply to Luxottica's Tender Offer, and (3)
"any other matter that properly comes before the Special Meeting" (emphasis
---------------------------------------------------------------
added).
279. On page six of the Solicitation Statement, Luxottica states that
it "may elect to cause additional Special Meeting Proposals to be
identified in the notice of, and in the proxy
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materials for, the Special Meeting." In effect, this language purports to
give Luxottica broad discretion to choose additional purposes for the
special meeting which were unknown to the shareholders executing the Agent
Designations, and unanticipated by them from reading the language of the
Agent Designation Form and the remainder of the proxy materials.
280. The statements in the Agent Designation Form are misleading in
violation of Sec. 14(a) of the Exchange Act, 15 U.S.C. Sec 78n, and the rules
and regulations promulgated thereunder.
281. U.S. Shoe will suffer irreparable injury unless Plaintiffs'
violations described above are enjoined.
282. U.S. Shoe does not have an adequate remedy at law for Plaintiffs'
violations described above.
COUNT XIV
---------
Violation of Sec. 14 of Exchange Act - Misleading Statement
-----------------------------------------------------------
in Agent Designation Materials Concerning Who Can
--------------------------------------------------
Call and Vote at a Special Meeting
----------------------------------
283. U.S. Shoe incorporates each allegation stated above as if
restated in full herein.
284. Luxottica's Solicitation Statement for Agent Designations at page
4 states in part:
Luxottica and Purchaser are soliciting Agent
Designations pursuant to this Solicitation Statement
without a Record Date, and the Designated Agents will
call the Special Meeting pursuant to Agent Designations
executed by persons who remain shareholders of record
on the date of such call.
285. The statement that persons who are shareholders of record "on the
date of such call" will constitute those shareholders who are entitled to
make such call is incorrect as a matter of law.
286. Section 1701.40(A)(3) of the Ohio Revised Code provides that
meetings of shareholders may be called by "persons who hold twenty five
percent of all shares outstanding and entitled
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to vote thereat, unless the articles or the regulations specify for such
purposes a smaller or larger proportion but not in excess of fifty
percent...."
287. Pursuant to the authority contained in Section 1701.40(A)(3), Ohio
Revised Code, U. S. Shoe's Regulations specify a larger proportion, namely fifty
percent of the outstanding voting power of the corporation.
288. Whether a person holding shares outstanding is "entitled to vote
thereat" and thereby entitled to participate in the call of a meeting is
determined as of the record date to be set for such a meeting, pursuant to
Section 1701.45, Ohio Revised Code.
289. The proper procedure to be followed in the event that a call for a
meeting is received by the Company, is for it to determine preliminarily
whether as of the date the call is received by the Company, those persons
making such call constitute fifty per cent of the common shares outstanding.
290. If this is determined in the affirmative, then the Directors may
set a record date pursuant to Section 1701.45(A), and the President or
Secretary would set a meeting date pursuant to Section 1701.41(B), Ohio
Revised Code.
291. When the identity of the shareholders as of the record date
established for the meeting is determined, the Company then determines
whether those persons making the call constitute fifty per cent of the
shareholders as of such record date. If so, notice of the meeting would be
sent to all shareholders of record as of the record date. If not, the call
would not be valid and no meeting would be held.
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<PAGE>
292. In connection with the solicitation of Agent Designations, it is
false and misleading to state that "call date" shareholders rather than
"record date" shareholders determine who is entitled to vote at a special
meeting or to make a valid call of a meeting.
293. Luxottica's Solicitation Statement for Agent Designations at page 3
states in part:
Any revocation of an Agent Designation will not effect
(sic) any action taken by the Designated Agents
pursuant to the Agent Designation prior to such
revocation.
294. The statement "any revocation of an Agent Designation will not
effect (sic) any action taken by the Designated Agents pursuant to the
Agent Designation prior to such revocation" is incorrect as a matter of
law.
295. The Agent Designation is governed by Section 1701.48, Ohio
Revised Code, which deals with appointments of proxies. In providing that
persons appointing a proxy may revoke a revocable appointment by a later
revocation received by the corporation, Division (D) excludes from the
operative effect of the revocation only "any vote previously taken."
Division (D) does not exclude from the operative effect of the revocation
any action taken by the proxy with regard to the call of a meeting.
296. In connection with the solicitation of Agent Designations, it is
false and misleading to state that any revocation of an Agent Designation
will not affect (sic) any action taken by the Designated Agents pursuant to
the Agent Designation prior to such revocation.
297. U.S. Shoe will suffer irreparable injury unless Plaintiffs'
violations described above are enjoined.
298. U.S. Shoe does not have an adequate remedy at law for Plaintiffs'
violations described above.
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<PAGE>
WHEREFORE, Defendants demand judgment that the Complaint be 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.Sec. 1707.041 and 1707.042;
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 and Ohio Rev. Code
Sec.Sec. 1701.041 and 1707.042;
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.Sec. 1701.041 and
1707.042 and to withdraw the false and misleading Offer,
Form 14D-1 and Form 041;
IV That Plaintiffs and all other persons acting for or on their
behalf be ordered to cease and desist from violating the
Exchange Act, be
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ordered to withdraw their false and misleading Solicitation
of Agent Designations, be ordered to issue corrective
statements in the event that they choose to attempt a new
Solicitation of Agent Designations and be ordered to cancel
and withdraw any Agent Designations which have been obtained
pursuant to the Solicitation of Agent Designations;
and
V For all other relief, legal and equitable, to which it is
entitled.
/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
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
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CERTIFICATE OF SERVICE
----------------------
This is to certify that a copy of the foregoing has been sent by fax
and express 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 6th day of April, 1995.
/s/ Joseph Dehner
-----------------------
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