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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT
PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
THE UNITED STATES SHOE CORPORATION
(Name of Subject Company)
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LUXOTTICA GROUP S.p.A.
LUXOTTICA ACQUISITION CORP.
(Bidders)
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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.
/ / 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: N/A
Form or Registration No.: N/A
Filing Party: N/A
Date Filed: N/A
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Page 1 of 8 Pages
The Exhibit Index is located on Page 8
<PAGE>
CUSIP NO.912605102 14D-1 PAGE 2 OF 8 PAGES
1. Names of Reporting Persons
S.S. or I.R.S. Identification No. of Above Person
Luxottica Group S.p.A.
2. Check the Appropriate Box if a Member of a Group (a) / /
(b) / /
3. SEC Use Only
4. Source of Funds
BK
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(e) or 2(f) / /
6. Citizenship or Place of Organization
Republic of Italy
7. Aggregate Amount Beneficially Owned By Each Reporting Person
36,475 shares
8. Check Box if the Aggregate Amount in Row (7)
Excludes Certain Shares /X/
9. Percent of Class Represented By Amount in Row (7)*
10. Type of Reporting Person
CO
* Less than 1%.
<PAGE>
CUSIP NO.912605102 14D-1 PAGE 3 OF 8 PAGES
1. Names of Reporting Persons
S.S. or I.R.S. Identification No. of Above Person
Luxottica Acquisition Corp.*
2. Check the Appropriate Box if a Member of a Group (a) / /
(b) / /
3. SEC Use Only
4. Source of Funds
BK, AF
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(e) or 2(f) / /
6. Citizenship or Place of Organization
Delaware
7. Aggregate Amount Beneficially Owned By Each Reporting Person
36,475 shares
8. Check Box if the Aggregate Amount in Row (7)
Excludes Certain Shares /X/
9. Percent of Class Represented By Amount in Row (7)**
10. Type of Reporting Person
CO
* I.R.S. Identification Number Applied For
** Less than 1%.
<PAGE>
TENDER OFFER
This Tender Offer Statement on Schedule 14D-1 relates to the offer by
Luxottica Acquisition Corp., a Delaware corporation (the "Purchaser") and an
indirect wholly owned subsidiary of Luxottica Group S.p.A., a corporation
organized under the laws of the Republic of Italy ("Parent"), to purchase all
outstanding Common Shares, without par value (the "Shares"), of The United
States Shoe Corporation (the "Company"), including the associated Preference
Share Purchase Rights (the "Rights"), issued pursuant to the Rights Agreement,
dated as of March 31, 1986, as amended by the First Amendment to Rights
Agreement, dated as of March 23, 1988, between the Company and Morgan
Shareholder Services Trust Company (as successor to Morgan Guaranty Trust
Company of New York), as Rights Agent, at a price of $24.00 per Share (and
associated Right), net to the seller in cash, without interest thereon, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
March 3, 1995 (the "Offer to Purchase"), and in the related Letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2),
respectively (which collectively constitute the "Offer").
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is The United States Shoe Corporation,
an Ohio corporation, and the address of its principal executive offices is One
Eastwood Drive, Cincinnati, Ohio 45227.
(b) The exact title of the class of equity securities being sought in the
Offer is Common Shares, without par value, including the associated Rights, of
the Company. The information set forth in the Introduction to the Offer to
Purchase is incorporated herein by reference.
(c) The information set forth in Section 6 ("Price Range of the Shares;
Dividends") of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d), (g) This Statement is filed by the Purchaser and Parent. The
information set forth in the Introduction and Section 8 ("Certain Information
Concerning the Purchaser and Parent") of, and Schedule I to, the Offer to
Purchase is incorporated herein by reference.
(e)-(f) Neither the Purchaser nor Parent nor, to their knowledge, any of the
persons listed in Schedule I to the Offer to Purchase, has during the last five
years (i) been convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors) or (ii) been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting activities subject to, federal or state
securities laws or finding any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) The information set forth in Section 8 ("Certain Information Concerning
the Purchaser and Parent") of the Offer to Purchase is incorporated herein by
reference.
(b) The information set forth in Section 10 ("Background of the Offer;
Contacts with the Company") of the Offer to Purchase is incorporated herein by
reference. Except as set forth therein, since February 2, 1992 there have been
no contacts, negotiations or transactions required to be set forth in this item.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in Section 9 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
<PAGE>
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(e) The information set forth in the Introduction, Section 8 ("Certain
Information Concerning the Purchaser and Parent"), Section 9 ("Source and Amount
of Funds"), Section 10 ("Background of the Offer; Contacts with the Company")
and Section 11 ("Purpose of the Offer; Plans for the Company; Other Matters
Relating to the Offer and the Proposed Merger") of the Offer to Purchase is
incorporated herein by reference. Except as set forth therein, there are no
plans or proposals required to be set forth in this item.
(f)-(g) The information set forth in Section 13 ("Effect of the Offer on the
Market for the Shares; Stock Exchange Listing; Exchange Act Registration; Margin
Regulations") of the Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Introduction, Section 8 ("Certain
Information Concerning the Purchaser and Parent"), Section 10 ("Background of
the Offer; Contacts with the Company") and Section 11 ("Purpose of the Offer;
Plans for the Company; Other Matters Relating to the Offer and the Merger") of
the Offer to Purchase is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction, Section 8 ("Certain
Information Concerning the Purchaser and Parent"), Section 11 ("Purpose of the
Offer; Plans for the Company; Other Matters Relating to the Offer and the
Merger") and Section 16 ("Certain Fees and Expenses") of the Offer to Purchase
is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction, Section 9 ("Source and Amount
of Funds") and Section 16 ("Certain Fees and Expenses") of the Offer to Purchase
is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information in Section 8 ("Certain Information Concerning the Purchaser
and Parent") of the Offer to Purchase is incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) None.
(b)-(c) The information set forth in Section 15 ("Certain Legal Matters;
Required Regulatory Approvals") of the Offer to Purchase is incorporated herein
by reference.
(d) The information set forth in Section 9 ("Source and Amount of Funds"),
Section 13 ("Effect of the Offer on the Market for the Shares; Stock Exchange
Listing; Exchange Act Registration; Margin Regulations") and Section 15
("Certain Legal Matters; Required Regulatory Approvals") of the Offer to
Purchase is incorporated herein by reference.
(e) The information set forth in Section 15 ("Certain Legal Matters;
Required Regulatory Approvals") of the Offer to Purchase is incorporated herein
by reference.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2),
respectively, is incorporated herein by reference.
2
<PAGE>
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<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.
(b)(1) --Commitment Letter, dated March 2, 1995, from Credit Suisse.
(c) --Not applicable.
(d) --Not applicable.
(e) --Not applicable.
(f) --Not applicable.
(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.
</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: March 3, 1995 By: /s/ CLAUDIO DEL VECCHIO
.............................
Claudio Del Vecchio
Managing Director
LUXOTTICA ACQUISITION CORP.
Dated: March 3, 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................
(b)(1) --Commitment Letter, dated March 2, 1995, from Credit Suisse.................
(g)(1) --Complaint Seeking Declaratory and Injunctive Relief filed in the United
States District Court for the Southern District of Ohio, Eastern Division,
on March 3, 1995, relating to the Ohio Take-Over Act, the Preference Share
Purchase Rights and the impairment of the voting rights of certain shares
under Sections 1701.01(CC)(2) and 1701.831 of the Ohio Revised Code........
</TABLE>
5
Offer to Purchase for Cash
All Outstanding Common Shares
(Including the Associated Preference Share Purchase Rights)
of
THE UNITED STATES SHOE CORPORATION
at
$24.00 NET PER SHARE
by
LUXOTTICA ACQUISITION CORP.
an indirect wholly owned subsidiary of
LUXOTTICA GROUP S.P.A.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON THURSDAY, MARCH 30, 1995,
UNLESS THE OFFER IS EXTENDED.
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THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES WHICH, WHEN ADDED TO THE SHARES BENEFICIALLY OWNED BY LUXOTTICA
ACQUISITION CORP. (THE "PURCHASER") AND ITS AFFILIATES, CONSTITUTES AT LEAST
TWO-THIRDS OF THE SHARES OUTSTANDING ON A FULLY DILUTED BASIS ON THE DATE OF
PURCHASE, (2) THE ACQUISITION OF SHARES PURSUANT TO THE OFFER BEING
AUTHORIZED BY THE SHAREHOLDERS OF THE COMPANY PURSUANT TO THE OHIO CONTROL
SHARE ACQUISITION LAW, SECTION 1701.831 OF THE OHIO REVISED CODE
("SECTION 831"), OR THE PURCHASER BEING SATISFIED, IN ITS SOLE
DISCRETION, THAT SECTION 831 IS INVALID OR INAPPLICABLE TO THE
ACQUISITION OF SHARES PURSUANT TO THE OFFER, (3) THE PREFERENCE SHARE
PURCHASE RIGHTS ("RIGHTS") HAVING BEEN REDEEMED BY THE BOARD OF
DIRECTORS OF THE COMPANY OR THE PURCHASER BEING SATISFIED, IN ITS SOLE
DISCRETION, THAT THE RIGHTS HAVE BEEN INVALIDATED OR ARE OTHERWISE
INAPPLICABLE TO THE OFFER AND THE PROPOSED MERGER DESCRIBED HEREIN,
(4) THE PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT
AFTER CONSUMMATION OF THE OFFER THE RESTRICTIONS CONTAINED IN THE
OHIO BUSINESS COMBINATION LAW, CHAPTER 1704 OF THE OHIO REVISED
CODE, WILL NOT APPLY TO THE PROPOSED MERGER, AND (5) THE
PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE
PURCHASER HAS OBTAINED SUFFICIENT FINANCING TO ENABLE IT TO
CONSUMMATE THE OFFER AND THE PROPOSED MERGER. THE OFFER IS
ALSO SUBJECT TO OTHER TERMS AND CONDITIONS CONTAINED IN THIS
OFFER TO PURCHASE. SEE SECTION 14.
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IMPORTANT
Any shareholder desiring to tender all or any portion of such shareholder's
Shares (and the associated Rights) should either (a) complete and sign the
Letter of Transmittal (or a facsimile thereof) in accordance with the
instructions in the Letter of Transmittal and mail or deliver it together with
the certificate(s) representing tendered Shares and, if separate, the
certificate(s) representing the associated Rights, and any other required
documents, to the Depositary or tender such Shares (and Rights, if applicable)
pursuant to the procedure for book-entry transfer set forth in Section 3 or (b)
request such shareholder's broker, dealer, commercial bank, trust company or
other nominee to effect the transaction for such shareholder. A shareholder
whose Shares and, if applicable, Rights are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact such
broker, dealer, commercial bank, trust company or other nominee if such
shareholder desires to tender such Shares and, if applicable, Rights. Unless and
until the Purchaser declares that the Rights Condition (as defined herein) is
satisfied, shareholders will be required to tender one Right for each Share
tendered in order to effect a valid tender of such Share.
A shareholder who desires to tender such shareholder's Shares and associated
Rights and whose certificates representing such Shares (or Rights, if
applicable) are not immediately available or who cannot comply with the
procedures for book-entry transfer on a timely basis may tender such Shares (and
Rights, if applicable) by following the procedures for guaranteed delivery set
forth in Section 3.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
set forth on the back cover of this Offer to Purchase. Additional copies of this
Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery
and other related materials may be obtained from the Information Agent or from
brokers, dealers, commercial banks and trust companies.
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The Dealer Manager for the Offer is:
CS FIRST BOSTON CORPORATION
March 3, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE><CAPTION>
PAGE
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<C> <S> <C>
INTRODUCTION............................................................................ 3
THE TENDER OFFER........................................................................ 8
1. Terms of the Offer................................................................ 8
2. Acceptance for Payment and Payment for Shares..................................... 9
3. Procedures for Accepting the Offer and Tendering Shares and Rights................ 10
4. Withdrawal Rights................................................................. 14
5. Certain Federal Income Tax Consequences........................................... 15
6. Price Range of the Shares; Dividends.............................................. 16
7. Certain Information Concerning the Company........................................ 16
8. Certain Information Concerning the Purchaser and Parent........................... 19
9. Source and Amount of Funds........................................................ 22
10. Background of the Offer; Contacts with the Company................................ 24
11. Purpose of the Offer; Plans for the Company; Other Matters Relating to the Offer
and the Proposed Merger......................................................... 25
12. Dividends and Distributions....................................................... 31
13. Effect of the Offer on the Market for the Shares; Stock Exchange Listing; Exchange
Act Registration; Margin Regulations.............................................. 31
14. Certain Conditions of the Offer................................................... 33
15. Certain Legal Matters; Required Regulatory Approvals.............................. 37
16. Certain Fees and Expenses......................................................... 43
17. Miscellaneous..................................................................... 44
Schedule I--Information Concerning the Directors and Executive Officers of Parent and
the Purchaser......................................................................... I-1
</TABLE>
2
<PAGE>
To All Holders of Common Shares
(Including the Associated Preference Share
Purchase Rights) of The United States Shoe Corporation:
INTRODUCTION
Luxottica Acquisition Corp., a Delaware corporation (the "Purchaser") and an
indirect wholly owned subsidiary of Luxottica Group S.p.A., a corporation
organized under the laws of the Republic of Italy ("Parent"), hereby offers to
purchase all outstanding Common Shares, without par value (the "Shares"), of The
United States Shoe Corporation, an Ohio corporation (the "Company"), and (unless
and until the Purchaser declares that the Rights Condition, as defined below, is
satisfied) the associated preference share purchase rights (the "Rights") issued
pursuant to the Rights Agreement, dated as of March 31, 1986, as amended by the
First Amendment to Rights Agreement, dated as of March 23, 1988 (the "Rights
Agreement"), between the Company and Morgan Shareholder Services Trust Company
(as successor to Morgan Guaranty Trust Company of New York), as Rights Agent, at
a price of $24.00 per Share (and associated Right), net to the seller in cash,
without interest thereon (the "Offer Price"), upon the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which, as amended from time to time, together constitute the
"Offer"). Unless the context otherwise requires, all references to Shares shall
include the Rights. All references to the Rights shall include all benefits that
may inure to holders of the Rights pursuant to the Rights Agreement.
Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares pursuant to the
Offer. The Purchaser will pay all charges and expenses of CS First Boston
Corporation, as Dealer Manager (in such capacity, the "Dealer Manager"),
Chemical Bank, as Depositary (the "Depositary"), and MacKenzie Partners, Inc.,
as Information Agent (the "Information Agent"), incurred in connection with the
Offer. See Section 16.
The purpose of the Offer is to acquire control of, and the entire equity
interest in, the Company. Parent currently intends, as soon as practicable
following consummation of the Offer, to propose and seek to have the Company
consummate a merger or similar business combination with the Purchaser or
another direct or indirect wholly owned subsidiary of Parent (the "Proposed
Merger"), pursuant to which each then outstanding Share (other than Shares owned
by the Purchaser or Parent, Shares held in the treasury of the Company and
Shares owned by dissenting shareholders who perfect any available dissenters'
rights under the Ohio Revised Code (the "ORC")), would be converted into the
right to receive an amount in cash equal to the price per Share paid pursuant to
the Offer. See Sections 10 and 11.
During telephone calls in December, 1994 and a meeting in January, 1995,
Parent and its financial advisor indicated to senior management of the Company
and its financial advisor that Parent was interested in exploring the
acquisition of the Company by means of an all cash merger transaction involving
the payment to the Company's shareholders of a price representing a substantial
premium above the then current market value of the Shares, and that Parent and
its representatives wished to engage in negotiations with the Company and its
representatives in order to effectuate such a transaction. The respective
financial advisors of Parent and Company also held several meetings and
telephone calls during such period in which Parent's financial advisor
reiterated the merger proposal. Parent and its financial advisor also advised
the Company and its financial advisor that Parent wished to be given access to
non-public information concerning the Company's businesses in order to permit
Parent to offer a fully-valued cash merger proposal. In the course of these
discussions, Parent received from the Company a proposed confidentiality
agreement that would have provided for delivery of such non-public information
to Parent, but Parent and the Company did not reach agreement on its terms.
After concluding that further attempts to enter into a mutually satisfactory
confidentiality agreement
3
<PAGE>
with the Company would be unsuccessful, Parent and the Purchaser determined to
make a proposal directly to the Company's shareholders. Accordingly, Parent and
the Purchaser commenced the Offer. See Section 10.
Parent intends to continue to seek to negotiate with the Company with
respect to the acquisition of the Company by Parent. If such negotiations result
in a definitive merger agreement between the Company and Parent, certain
material terms of the Offer may change. Accordingly, such negotiations could
result in, among other things, termination of the Offer (see Section 14) and
submission of a different acquisition proposal to the Company's shareholders for
their approval.
In order to increase the likelihood that the Company and the Purchaser enter
into the Proposed Merger, Parent and the Purchaser have taken preliminary steps
to commence a solicitation of appointments of designated agents ("agent
designations") to call a special meeting of the Company's shareholders (the
"Special Meeting") at which, among other things, Parent and the Purchaser will
propose that the holders of Shares (i) remove all of the incumbent directors of
the Company, (ii) elect the nominees of the Purchaser as directors to fill the
vacancies created thereby and (iii) if the Control Share Condition (as defined
below) shall not have theretofore been satisfied, amend the Regulations of the
Company to provide that the Ohio control share acquisition law, Section 1701.831
of the ORC ("Section 831"), does not apply to the purchase of the Shares
pursuant to the Offer. The nominees of the Purchaser will, if elected at the
Special Meeting, and subject to their fiduciary duties, be committed to ensuring
that the Offer and the Proposed Merger are approved by the Company's Board of
Directors.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES WHICH, WHEN ADDED TO THE SHARES BENEFICIALLY OWNED BY THE PURCHASER AND
ITS AFFILIATES, CONSTITUTES AT LEAST TWO-THIRDS OF THE SHARES OUTSTANDING ON A
FULLY DILUTED BASIS ON THE DATE OF PURCHASE (THE "MINIMUM CONDITION"), (2) THE
ACQUISITION OF SHARES PURSUANT TO THE OFFER BEING AUTHORIZED BY THE SHAREHOLDERS
OF THE COMPANY PURSUANT TO SECTION 831 OR THE PURCHASER BEING SATISFIED, IN ITS
SOLE DISCRETION, THAT SECTION 831 IS INVALID OR INAPPLICABLE TO THE ACQUISITION
OF SHARES PURSUANT TO THE OFFER (THE "CONTROL SHARE CONDITION"), (3) THE RIGHTS
HAVING BEEN REDEEMED BY THE BOARD OF DIRECTORS OF THE COMPANY OR THE PURCHASER
BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE RIGHTS HAVE BEEN INVALIDATED
OR ARE OTHERWISE INAPPLICABLE TO THE OFFER AND THE PROPOSED MERGER (THE "RIGHTS
CONDITION"), (4) THE PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT
AFTER CONSUMMATION OF THE OFFER THE RESTRICTIONS CONTAINED IN THE OHIO BUSINESS
COMBINATION LAW, CHAPTER 1704 OF THE ORC, WILL NOT APPLY TO THE PROPOSED MERGER
(THE "BUSINESS COMBINATION CONDITION"), AND (5) THE PURCHASER BEING SATISFIED,
IN ITS SOLE DISCRETION, THAT THE PURCHASER HAS OBTAINED SUFFICIENT FINANCING TO
ENABLE IT TO CONSUMMATE THE OFFER AND THE PROPOSED MERGER (THE "FINANCING
CONDITION").
THE OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES OR AGENT
DESIGNATIONS FOR ANY MEETING OF THE COMPANY'S SHAREHOLDERS. ANY SUCH
SOLICITATION WILL BE MADE ONLY PURSUANT TO PROXY MATERIALS COMPLYING WITH THE
REQUIREMENTS OF SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
(THE "EXCHANGE ACT"), AND THE RULES AND REGULATIONS THEREUNDER.
Minimum Condition. Consummation of the Offer is conditioned upon there being
validly tendered and not withdrawn prior to the expiration of the Offer a number
of Shares which, when added to the Shares beneficially owned by the Purchaser
and its affiliates, constitutes at least two-thirds of the Shares outstanding on
a fully diluted basis on the date of purchase. For purposes of this Offer, "on a
fully diluted basis" means, as of any date, the number of Shares outstanding,
together with Shares that the
4
<PAGE>
Company is then required to issue pursuant to obligations outstanding at that
date under employee stock option or other benefit plans or otherwise (assuming
all such options are presently exercisable).
According to the Company's Quarterly Report on Form 10-Q for the quarter
ended October 29, 1994 (the "Company 10-Q"), filed with the Securities and
Exchange Commission (the "Commission") pursuant to the Exchange Act, as of
October 29, 1994, there were 46,341,660 Shares outstanding. According to the
Company's Annual Report on Form 10-K for the fiscal year ended January 29, 1994
(the "Company 10-K"), filed with the Commission pursuant to the Exchange Act,
there were options to purchase 3,727,267 Shares outstanding at January 29, 1994.
Accordingly, based on this information there are 50,068,927 Shares outstanding
on a fully diluted basis, assuming (i) that no Shares were issued (other than
those reserved on January 29, 1994 for options then outstanding) or acquired by
the Company after October 29, 1994, (ii) the exercise of all of the options
outstanding as of January 29, 1994, and (iii) as of the date of purchase there
are no other obligations to issue Shares. Based on the foregoing, the Minimum
Condition would be satisfied if at least 33,379,285 Shares are validly tendered
pursuant to the Offer and not withdrawn.
Control Share Condition. Consummation of the Offer is conditioned upon the
acquisition of Shares pursuant to the Offer by the Purchaser being authorized by
the shareholders of the Company pursuant to Section 831 at a special meeting of
shareholders of the Company (the "Section 831 Meeting") duly and validly called
and held in accordance with Section 831, or the Purchaser being satisfied, in
its sole discretion, that Section 831 is invalid or inapplicable to the
acquisition of Shares pursuant to the Offer.
Under Section 831, unless a corporation's articles or regulations otherwise
provide, any "control share acquisition" of an "issuing public corporation"
(such as the Company) may be made only with the prior authorization of its
shareholders in accordance with Section 831. Neither the Company's Articles nor
its Regulations currently contains a provision by which the Company "opts out"
of Section 831. However, Parent and the Purchaser intend to solicit from the
Company's shareholders sufficient agent designations for the call of a Special
Meeting at which, among other things, Parent and the Purchaser will propose
that, if the Control Share Condition shall not have theretofore been satisfied,
the Regulations of the Company be amended to provide that Section 831 does not
apply to the purchase of the Shares pursuant to the Offer.
Unless and until such time as the Company's Articles or Regulations are
amended to include such an "opt out" provision, Section 831 requires shareholder
approval of any proposed "control share acquisition" of the Company. A "control
share acquisition" is the acquisition, directly or indirectly, by any person of
control in respect of shares that entitles such person to exercise or direct the
exercise of twenty percent (20%) or more of the voting power in the election of
directors. A control share acquisition must be approved in advance (i) by the
holders of at least a majority of the voting power of the corporation in the
election of directors represented at a Section 831 Meeting at which a quorum is
present and (ii) by the holders of a majority of such voting power excluding the
voting shares owned by the acquiring shareholder and certain other "Interested
Shares" (as defined in Section 15, below). Section 831 provides that a quorum
shall be deemed to be present at the Section 831 Meeting if at least a majority
of the Shares, and a majority of the Shares excluding those that are "Interested
Shares," are represented at such meeting in person or by proxy.
Under Section 831, the Company must call the Section 831 Meeting to consider
the authorization of an acquisition of Shares covered by Section 831 no later
than ten (10) days, and it must be held no later than fifty (50) days, following
its receipt of an "acquiring person statement" from the acquiring person.
However, the acquiring person may request, at the time of delivery of the
acquiring person statement, that the Section 831 Meeting not be held sooner than
thirty (30) days after receipt by the Company of such statement.
Without waiving their right to challenge the validity of all or any part of
Section 831 or to seek an amendment to the Company's Regulations opting out of
Section 831, and reserving their right to take
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actions inconsistent with the applicability of Section 831, Parent and the
Purchaser delivered to the Company on March 3, 1995 an acquiring person
statement relating to the Offer. Parent and the Purchaser have requested that
the Section 831 Meeting not be held for at least thirty (30) days after the
receipt of the acquiring person statement by the Company. Accordingly, the
Section 831 Meeting must be held no earlier than April 2, 1995 and no later than
April 22, 1995. In addition, Parent and the Purchaser brought an action for
declaratory and other relief against the Company on March 3, 1995 in the United
States District Court for the Southern District of Ohio, Eastern Division,
seeking, among other things, an order declaring that the provisions of Section
831 and Section 1701.01(CC)(2) of the ORC that impair the voting rights of the
Disqualified Shares (as defined in Section 15, below) at the Section 831 Meeting
are unconstitutional or otherwise invalid as such provisions may be applied to
the Offer. See Section 15.
Although Parent and the Purchaser have taken the foregoing actions pursuant
to Section 831 with respect to the matters to be considered at the Section 831
Meeting and have described their purposes and plans with respect thereto in this
Offer to Purchase in order to comply with the requirements of Section 14(d)(1)
of the Exchange Act, Parent and the Purchaser are not, as of the date hereof,
soliciting proxies with respect to the proposed approval of the acquisition of
Shares pursuant to the Offer at the Section 831 Meeting. Parent and the
Purchaser presently intend, however, to solicit proxies from the shareholders of
the Company with respect to the Section 831 Meeting (unless the Purchaser is
satisfied that the provisions of Section 831 are invalid or are not applicable
to the acquisition of Shares pursuant to the Offer).
Rights Condition. Consummation of the Offer is conditioned upon the Rights
having been redeemed by the board of directors of the Company or the Purchaser
being satisfied, in its sole discretion, that the Rights have been invalidated
or are otherwise inapplicable to the Offer and to the Proposed Merger (the
"Rights Condition"). The Rights were issued pursuant to the Rights Agreement, as
amended by the First Amendment to Rights Agreement, dated as of March 23, 1988
(the "First Amendment"). The First Amendment is set forth as an exhibit to the
Company's Current Report on Form 8-K, dated March 23, 1988. The Rights (as they
existed prior to the First Amendment) are described in the Company's
Registration Statement on Form 8-A, dated April 9, 1986 (as amended by Amendment
No. 1 on Form 8, dated June 5, 1986). All references to the Rights and the
Rights Agreement, and their respective terms and conditions, in this Offer to
Purchase, are based solely on the description of the Rights in such Registration
Statement, as modified by the terms of the First Amendment, and such description
is summarized in Section 11.
The Rights Agreement provides that at any time prior to 5:00 p.m. New York
City Time on the earlier of the (i) the time any person becomes an Acquiring
Person (as defined in Section 11) or (ii) April 14, 1996, the Board of Directors
of the Company may redeem all (but not less than all) of the Rights in whole or
in part for $0.05 per Right (as adjusted for any stock split, stock dividend or
similar transaction).
Until the Distribution Date (as defined in Section 11) (a) the Rights will
be evidenced by certificates for Shares (the "Share Certificates") registered in
the names of the holders thereof and not by separate certificates representing
the Rights (the "Rights Certificates") and (b) the Rights will be transferable
only in connection with the transfer of Shares. The Rights Agreement provides
that, as soon as practicable after the Distribution Date, Rights Certificates
will be distributed to record holders of Shares as of the close of business on
the Distribution Date and such Rights Certificates alone will evidence the
Rights.
Based upon publicly available information, the Purchaser believes that as of
March 3, 1995, the Rights were not exercisable, that Rights Certificates had not
been issued and that the Rights were evidenced by the Share Certificates. The
Purchaser believes that, as a result of the Offer, the Distribution Date will be
March 13, 1995, unless prior to such date the Company's Board of Directors
redeems the Rights or amends the Rights Agreement to delay the Distribution
Date.
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Parent and the Purchaser are hereby requesting that the Company's Board of
Directors redeem the Rights. In addition, Parent and the Purchaser brought an
action for declaratory and other relief against the Company and the members of
its Board of Directors on March 3, 1995 in the United States District Court for
the Southern District of Ohio, Eastern Division, seeking, among other things, an
order declaring that the incumbent Directors of the Company have breached their
fiduciary duties by issuing the Rights and by failing to redeem the Rights or
failing to determine that the Rights are inapplicable to the Offer and to the
Proposed Merger. See Section 15. However, in the event that the Board of
Directors of the Company shall fail to redeem the Rights or determine that the
Rights are inapplicable to the Offer prior to the intended date of the
consummation of the Offer, or the order sought in such litigation is not
obtained, the Purchaser expects its nominees to the Company's Board of
Directors, if elected at the Special Meeting, and subject to their fiduciary
duties, either to redeem the Rights or take such other appropriate action as
shall result in the satisfaction of the Rights Condition.
Business Combination Condition. Consummation of the Offer is conditioned
upon the Purchaser being satisfied, in its sole discretion, that after
consummation of the Offer the restrictions contained in Chapter 1704 of the ORC
(the "Ohio Business Combination Law") will not apply to the Proposed Merger (the
"Business Combination Condition").
The Ohio Business Combination Law prohibits certain business combinations
(each, a "Chapter 1704 Transaction"), such as the Proposed Merger, between an
issuing public corporation (such as the Company) and any "Interested
Shareholder" (defined generally as any person that, directly or indirectly, is
entitled to exercise or direct the exercise of ten percent (10%) or more of the
outstanding voting power of a corporation in the election of directors) for a
period of three years after the date the person becomes an Interested
Shareholder. After such three year period, a Chapter 1704 Transaction between an
issuing public corporation and such Interested Shareholder is prohibited unless
either certain "fair price" provisions are complied with or the Chapter 1704
Transaction is approved by certain supermajority shareholder votes. The Ohio
Business Combination Law restrictions do not apply to a Chapter 1704 Transaction
with an Interested Shareholder if either the acquisition of the corporation's
shares that would cause the Interested Shareholder to become an Interested
Shareholder, or the Chapter 1704 Transaction, is approved by a resolution of the
board of directors of the corporation adopted prior to the date on which the
Interested Shareholder became an Interested Shareholder. See Section 15.
Parent and the Purchaser are hereby requesting that the Company's Board of
Directors adopt a resolution providing that the Ohio Business Combination Law is
not applicable to the acquisition of Shares pursuant to the Offer or the
Proposed Merger. In addition, in the event that the Company's Board of Directors
fails to adopt such a resolution prior to the intended date of the consummation
of the Offer, the Purchaser expects its nominees to the Company's Board of
Directors, if elected at the Special Meeting, and subject to their fiduciary
duties, to adopt such a resolution, or to take such other appropriate action as
shall result in the satisfaction of the Business Combination Condition.
The Financing Condition. The Offer is conditioned upon the Purchaser being
satisfied, in its sole discretion, that the Purchaser has obtained sufficient
financing to enable it to consummate the Offer and the Proposed Merger (the
"Financing Condition"). See Section 9 for a description of the plans of the
Purchaser for financing the Offer and the Proposed Merger.
Certain other conditions to the Offer are described in Section 14. The
Purchaser expressly reserves the right, in its sole discretion, to waive any one
or more of the conditions to the Offer. See Sections 11, 14 and 15.
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THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
THE TENDER OFFER
1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), the Purchaser will accept for payment and thereby purchase all
Shares validly tendered on or prior to the Expiration Date (as hereinafter
defined) and not withdrawn in accordance with the procedures set forth in
Section 4. The term "Expiration Date" means 12:00 Midnight, New York City time,
on Thursday, March 30, 1995, unless and until the Purchaser, in its sole
discretion, shall have extended the period of time for which the Offer is open,
in which event the term "Expiration Date" shall mean the latest time and date at
which the Offer, as so extended by the Purchaser, shall expire.
The Purchaser expressly reserves the right, in its sole discretion, at any
time and from time to time, to extend the period during which the Offer is open
for any reason, including the occurrence of any of the conditions specified in
Section 14, by giving oral or written notice of such extension to the
Depositary. During any such extension, all Shares previously tendered and not
withdrawn will remain subject to the Offer, subject to the right of a tendering
shareholder to withdraw such shareholder's Shares. See Section 4.
Subject to the applicable regulations of the Commission, the Purchaser also
expressly reserves the right, in its sole discretion, at any time or from time
to time to (i) delay acceptance for payment of, or, regardless of whether such
Shares were theretofore accepted for payment, payment for, any Shares pending
receipt of any regulatory or governmental approvals specified in Section 15 or
in order to comply in whole or in part with any other applicable law, (ii)
terminate the Offer and not accept for payment any Shares upon the occurrence of
any of the conditions specified in Section 14 and (iii) waive any condition or
otherwise amend the Offer in any respect, by giving oral or written notice of
such extension, delay, termination, waiver or amendment to the Depositary and by
making a public announcement thereof. The Purchaser acknowledges (i) that Rule
14e-1(c) under the Exchange Act requires the Purchaser to pay the consideration
offered or return the Shares tendered promptly after the termination or
withdrawal of the Offer and (ii) that the Purchaser may not delay acceptance for
payment of, or payment for (except as provided in clause (i) of the preceding
sentence), any Shares upon the occurrence of any of the conditions specified in
Section 14 without extending the period of time during which the Offer is open.
Any such extension, delay, termination, waiver or amendment will be followed
as promptly as practicable by public announcement thereof, and such
announcement, in the case of an extension, will be made no later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date. Without limiting the manner in which the Purchaser may choose
to make any public announcement, subject to applicable law (including Rules
14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act, which require that material
changes be promptly disseminated to holders of Shares), the Purchaser shall have
no obligation to publish, advertise or otherwise communicate any such public
announcement other than by issuing a release to the Dow Jones News Service.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, the Purchaser will extend the Offer to the extent required by Rules
14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The minimum period during
which an offer must remain open following material changes in the terms of the
offer, other than a change in price, a change in percentage of securities sought
or a change in any dealer's soliciting fee, will depend upon the facts and
circumstances, including the materiality of the changes. With respect to a
change in price, a change in percentage of securities sought or a change in any
dealer's soliciting fee, a
8
<PAGE>
minimum ten-business day period from the date of such change is generally
required to allow for adequate dissemination to shareholders. Accordingly, if
prior to the Expiration Date, the Purchaser should decrease the number of Shares
being sought, or increase or decrease the consideration offered pursuant to the
Offer, and if the Offer is scheduled to expire at any time earlier than the
period ending on the tenth business day from and including the date that notice
of such increase or decrease is first published, sent or given to holders of
Shares, the Offer will be extended at least until the expiration of such ten
business day period. For purposes of the Offer a "business day" means any day
other than a Saturday, Sunday or a federal holiday and consists of the time
period from 12:01 a.m. through 12:00 Midnight, New York City time.
A request is being made to the Company pursuant to Rule 14d-5 of the
Exchange Act for the use of the Company's shareholder list, its list of holders
of Rights, if any, and security position listings for the purpose of
disseminating the Offer to holders of Shares. Upon compliance by the Company
with such request, this Offer to Purchase and the related Letter of Transmittal
and, if required, other relevant materials will be mailed to record holders of
Shares and Rights and will be furnished to brokers, dealers, commercial banks,
trust companies and similar persons whose names, or the names of whose nominees,
appear on the shareholder list and list of holders of Rights or, if applicable,
who are listed as participants in a clearing agency's security position listing
for subsequent transmittal to beneficial owners of Shares and Rights.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), the Purchaser will purchase, by accepting for payment, and will pay
for all Shares validly tendered and not properly withdrawn prior to the
Expiration Date, promptly after the later to occur of (i) the Expiration Date
and (ii) the satisfaction or waiver of the conditions of the Offer set forth in
Section 14. Any determination concerning the satisfaction or waiver, if any, of
such conditions shall be within the sole discretion of the Purchaser. See
Section 14. Subject to applicable rules of the Commission, the Purchaser
expressly reserves the right, in its sole discretion, to delay acceptance for
payment of, or payment for, Shares in order to comply in whole or in part with
any applicable law, including receipt of any regulatory or governmental
approval. See Section 15.
For information with respect to approvals required prior to the consummation
of the Offer under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), the Investment Canada Act, and certain other regulatory
approvals, see Section 15.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (a) Share
Certificates evidencing such Shares and, if applicable, Rights Certificates
evidencing the Rights, or timely confirmation (a "Book-Entry Confirmation") of
the book-entry transfer of such Shares and, if applicable, Rights, into the
Depositary's account at The Depository Trust Company, the Midwest Securities
Trust Company or the Philadelphia Depository Trust Company (each a "Book-Entry
Transfer Facility" and collectively, the "Book-Entry Transfer Facilities"),
pursuant to the procedures set forth in Section 3, (b) the Letter of Transmittal
(or facsimile thereof) properly completed and duly executed, with any required
signature guarantees, or an Agent's Message (as defined below) and (c) any other
documents required by the Letter of Transmittal.
The term "Agent's Message" means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares, that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
9
<PAGE>
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn as, if
and when the Purchaser gives oral or written notice to the Depositary of the
Purchaser's acceptance of such Shares for payment pursuant to the Offer. In all
cases, upon the terms and subject to the conditions of the Offer, payment for
Shares purchased pursuant to the Offer will be made by deposit of the purchase
price therefor with the Depositary, which will act as agent for tendering
shareholders for the purpose of receiving payment from the Purchaser and
transmitting payment to validly tendering shareholders. Under no circumstances
will interest on the purchase price for Shares be paid by the Purchaser by
reason of any delay in making such payment. Upon the deposit of funds with the
Depositary for the purpose of making payments to tendering shareholders, the
Purchaser's obligation to make such payment shall be satisfied and tendering
shareholders must thereafter look solely to the Depositary for payment of
amounts owed to them by reason of the purchase of Shares pursuant to the Offer.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if Share Certificates are submitted representing more Shares than are
tendered, Share Certificates representing unpurchased or untendered Shares will
be returned, without expense to the tendering shareholder (or, in the case of
Shares delivered by book-entry transfer into the Depositary's account at a
Book-Entry Transfer Facility pursuant to the procedures set forth in Section 3,
such Shares will be credited to an account maintained within such Book-Entry
Transfer Facility), as promptly as practicable following the expiration,
termination or withdrawal of the Offer. In the event separate Rights
Certificates are issued, similar action will be taken with respect to
unpurchased and untendered Rights.
If, prior to the Expiration Date, the Purchaser shall increase the
consideration offered to holders of Shares pursuant to the Offer, such increased
consideration shall be paid to all holders of Shares that are purchased pursuant
to the Offer, whether or not such Shares were tendered prior to such increase in
consideration.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to one or more of Parent's subsidiaries or affiliates the
right to purchase Shares tendered pursuant to the Offer, but any such transfer
or assignment will not relieve the Purchaser of its obligations under the Offer
or prejudice the rights of tendering shareholders to receive payment for Shares
validly tendered and accepted for payment pursuant to the Offer.
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES AND RIGHTS.
Valid Tender of Shares and Rights
Except as set forth below, for Shares and (prior to the Distribution Date)
Rights to be validly tendered pursuant to the Offer, the Letter of Transmittal
(or facsimile thereof), properly completed and duly executed, together with any
required signature guarantees, or an Agent's Message in connection with a
book-entry transfer of Shares, and any other documents required by the Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase on or prior to the Expiration
Date and either (i) Share Certificates representing tendered Shares and Rights
must be received by the Depositary or such Shares and Rights must be tendered
pursuant to the procedure for book-entry transfer set forth below, and a
Book-Entry Confirmation must be received by the Depositary, in each case on or
prior to the Expiration Date, or (ii) the tendering shareholders must comply
with the guaranteed delivery procedures set forth below.
If the Purchaser declares that the Rights Condition is satisfied, the
Purchaser will not require delivery of Rights. Unless and until the Purchaser
declares that the Rights Condition is satisfied, holders of Shares will be
required to tender one Right for each Share tendered in order to effect a valid
tender of such Share.
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Separate Delivery of Rights Certificates
If the Distribution Date occurs and Rights Certificates are distributed by
the Company to holders of Shares prior to the time a holder's Shares are
tendered pursuant to the Offer, Rights Certificates representing a number of
Rights equal to the number of Shares tendered must be delivered to the
Depositary or, if available, a Book-Entry Confirmation received by the
Depositary with respect thereto, in order for Rights to be validly tendered. If
the Distribution Date occurs and the Rights Certificates are not distributed
prior to the time Shares are tendered pursuant to the Offer, Rights may be
tendered prior to a shareholder receiving the Rights Certificates by use of the
guaranteed delivery procedure described below. A tender of Shares constitutes an
agreement by the tendering shareholder to deliver Rights Certificates
representing a number of Rights equal to the number of Shares tendered pursuant
to the Offer to the Depositary within five business days after the date Rights
Certificates are distributed. The Purchaser reserves the right to require that
it receive Rights Certificates, or a Book-Entry Confirmation, if available, with
respect to such Rights, prior to accepting the related Shares for payment
pursuant to the Offer.
THE METHOD OF DELIVERY OF SHARES, RIGHTS, THE LETTER OF TRANSMITTAL AND ANY
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
SHAREHOLDER AND THE DELIVERY OF SUCH ITEMS WILL BE DEEMED MADE ONLY WHEN
ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL
WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Book-Entry Transfer
The Depositary will establish accounts with respect to the Shares at each of
the Book-Entry Transfer Facilities for purposes of the Offer within two business
days after the date of this Offer to Purchase. Any financial institution that is
a participant in the system of any Book-Entry Transfer Facility may make
book-entry transfer of Shares by causing such Book-Entry Transfer Facility to
transfer such Shares into the Depositary's account at such Book-Entry Transfer
Facility in accordance with such Book-Entry Transfer Facility's procedures for
such transfer. However, although delivery of Shares may be effected through
book-entry transfer into the Depositary's account at a Book-Entry Transfer
Facility, the Letter of Transmittal (or facsimile thereof), properly completed
and duly executed, with any required signature guarantees, or an Agent's Message
with a book-entry transfer of Shares, and any other required documents must, in
any case, be transmitted to and received by, the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase on or prior to
the Expiration Date, or the tendering shareholder must comply with the
guaranteed delivery procedure set forth below.
If the Distribution Date occurs, the Depositary will also make a request to
establish an account with respect to the Rights at each of the Book-Entry
Transfer Facilities, but no assurance can be given that book-entry transfer of
Rights will be available. If the book-entry transfer of Rights is available, the
foregoing book-entry transfer procedures will also apply to Rights. Otherwise,
if Rights Certificates have been issued, a tendering shareholder will be
required to tender Rights by means of physical delivery to the Depositary of
Rights Certificates (in which event references in this Offer to Purchase to
Book-Entry Confirmations with respect to Rights will be inapplicable).
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH
SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
Signature Guarantees
Signatures on all Letters of Transmittal must be guaranteed by a firm which
is a bank, broker, dealer, credit union, savings association or other entity
which is a member in good standing of the Securities Transfer Medallion Program
(collectively, "Eligible Institutions"), unless the Shares and
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Rights tendered thereby are tendered (i) by a registered holder of Shares and
Rights who has not completed either the box labeled "Special Payment
Instructions" or the box labeled "Special Delivery Instructions" on the Letter
of Transmittal or (ii) for the account of an Eligible Institution. See
Instruction 1 of the Letter of Transmittal.
If the Share Certificates or Rights Certificates are registered in the name
of a person other than the signer of the Letter of Transmittal, or if payment is
to be issued or returned to a person other than the registered holder, then the
tendered certificates must be endorsed or accompanied by appropriate stock
powers, signed exactly as the name or names of the registered holder or holders
appear on the certificate(s), with the signature(s) on the certificate(s) or
stock power(s) guaranteed by an Eligible Institution as provided in the Letter
of Transmittal. See Instructions 1 and 5 of the Letter of Transmittal.
If the Share Certificates and Rights Certificates are forwarded separately
to the Depositary, a properly completed and duly executed Letter of Transmittal
(or facsimile thereof) must accompany each such delivery.
Guaranteed Delivery
If a shareholder desires to tender pursuant to the Offer and such
shareholder's Share Certificates or Rights Certificates are not immediately
available (including because Rights Certificates have not yet been distributed
by the Company) or time will not permit all required documents to reach the
Depositary on or prior to the Expiration Date, or the procedure for book-entry
transfer cannot be completed on a timely basis, such Shares or Rights may
nevertheless be tendered if all of the following guaranteed delivery procedures
are satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser herewith, is
received by the Depositary, as provided below, on or prior to the Expiration
Date; and
(iii) the Share Certificates or Rights Certificates (or a Book-Entry
Confirmation) representing all tendered Shares or Rights, in proper form for
transfer together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), with any required signature guarantees
(or, in the case of a book-entry transfer, an Agent's Message) and any other
documents required by the Letter of Transmittal are received by the
Depositary within (a) in the case of Shares, five (5) New York Stock
Exchange, Inc. ("NYSE") trading days after the date of execution of such
Notice of Guaranteed Delivery or (b) in the case of Rights, a period ending
on the later of (i) five (5) NYSE trading days after the date of execution
of such Notice of Guaranteed Delivery or (ii) five (5) NYSE trading days
after the date Rights Certificates are distributed to shareholders by the
Rights Agent.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile transmission or mail to the Depositary and must include a signature
guarantee by an Eligible Institution in the form set forth in such Notice of
Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will, in all cases, be made only after timely
receipt by the Depositary of (i) Share Certificates for, or of Book-Entry
Confirmation with respect to, such Shares, and if the Distribution Date has
occurred, Rights Certificates for, or a Book-Entry Confirmation, if available,
with respect to, the associated Rights (unless the Purchaser elects to make
payment for such Shares pending receipt of the Share Certificates for, or a
Book-Entry Confirmation with respect to such Rights as described above), (ii) a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) (or, in the case
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of a book-entry transfer, an Agent's Message) and (iii) any other documents
required by the Letter of Transmittal. Accordingly, payment might not be made to
all tendering shareholders at the same time, and will depend upon when Share
Certificates (or Rights Certificates) or Book-Entry Confirmations of such Shares
(or Rights, if available) are received into the Depositary's account at a
Book-Entry Transfer Facility.
If the Rights Condition is satisfied, the guaranteed delivery procedure with
respect to Rights Certificates and the requirement for the tender of Rights will
no longer apply.
Back-up Federal Tax Withholding
Under the federal income tax laws, the Depositary will be required to
withhold thirty-one percent (31%) of the amount of any payments made to certain
shareholders pursuant to the Offer. To prevent back-up federal income tax
withholdings on payments made to certain shareholders with respect to the
purchase price of Shares purchased pursuant to the Offer, each such shareholder
must provide the Depositary with such shareholder's correct taxpayer
identification number and certify that such shareholder is not subject to
back-up federal income tax withholding by completing the Substitute Form W-9
included in the Letter of Transmittal. See Instruction 10 of the Letter of
Transmittal.
Appointment as Proxy
By executing the Letter of Transmittal, a tendering shareholder irrevocably
appoints designees of the Purchaser, and each of them, as such shareholder's
attorney-in-fact and proxy, with full power of substitution, in the manner set
forth in the Letter of Transmittal, to the full extent of such shareholder's
rights with respect to the Shares and Rights tendered by such shareholder and
accepted for payment and paid for by the Purchaser and with respect to any and
all other Shares or Rights and other securities or rights issued or issuable in
respect of such Shares and Rights on or after the date of this Offer to
Purchase. All such proxies shall be considered coupled with an interest in the
tendered Shares and Rights. Such appointment will be effective when, and only to
the extent that, the Purchaser pays for such Shares and Rights by depositing the
purchase price therefor with the Depositary. Upon such payment, all prior powers
of attorneys and proxies given by such shareholder with respect to such Shares,
Rights and such other securities or rights will be revoked, without further
action, and no subsequent powers of attorney and proxies may be given by such
shareholder (and, if given, will not be deemed effective). The designees of the
Purchaser will, with respect to the Shares and Rights for which such appointment
is effective, be empowered to exercise all voting and other rights of such
shareholders as they in their sole discretion may deem proper at any annual or
special meeting of the Company's shareholders, or any adjournment or
postponement thereof. The Purchaser reserves the right to require that, in order
for Shares and Rights to be deemed validly tendered, immediately upon the
payment for such Shares and Rights, the Purchaser or its designee must be able
to exercise full voting rights with respect to such Shares, Rights and other
securities, including voting at any meeting of shareholders.
Determination of Validity
All questions as to the form of documents and validity, eligibility
(including time of receipt) and acceptance for payment of any tender of Shares
or Rights will be determined by the Purchaser, in its sole discretion, whose
determination shall be final and binding on all parties. The Purchaser reserves
the absolute right to reject any or all tenders, determined by it not to be in
proper form or the acceptance of or payment for which may, in the opinion of the
Purchaser's counsel, be unlawful. The Purchaser also reserves the absolute right
to waive, in its sole discretion, any of the conditions of the Offer or any
defect or irregularity in any tender of Shares or Rights of any particular
shareholder whether or not similar defects or irregularities are waived in the
case of other shareholders.
13
<PAGE>
The Purchaser's interpretation of the terms and conditions of the Offer
(including the Letter of Transmittal and the instructions thereto) will be final
and binding. No tender of Shares will be deemed to have been validly made until
all defects and irregularities have been cured or waived. None of the Purchaser,
Parent, any of their affiliates or assigns, if any, the Dealer Manager, the
Depositary, the Information Agent or any other person will be under any duty to
give any notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification.
The Purchaser's acceptance for payment of Shares, and, if applicable, Rights
tendered pursuant to any of the procedures described above, will constitute a
binding agreement between the tendering shareholder and the Purchaser upon the
terms and subject to the conditions of the Offer.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Shares and Rights
made pursuant to the Offer are irrevocable. Shares and Rights tendered pursuant
to the Offer may be withdrawn at any time on or prior to the Expiration Date
and, unless theretofore accepted for payment as provided herein, may also be
withdrawn at any time after May 1, 1995 or at such later time as may apply if
the Offer is extended. A withdrawal of Shares will also constitute a withdrawal
of the associated Rights. Rights may not be withdrawn unless the associated
Shares are also withdrawn.
If, for any reason whatsoever, acceptance for payment of any Shares and
Rights tendered pursuant to the Offer is delayed, or the Purchaser is unable to
accept for payment or pay for Shares and Rights tendered pursuant to the Offer,
then, without prejudice to the Purchaser's rights set forth herein, the
Depositary may, nevertheless, on behalf of the Purchaser retain tendered Shares
and Rights and such Shares and Rights may not be withdrawn except to the extent
that the tendering shareholder is entitled to and duly exercises withdrawal
rights as described in this Section 4. Any such delay will be by an extension of
the Offer to the extent required by law.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the backcover of this Offer to Purchase. Any
such notice of withdrawal must specify the name of the person who tendered the
Shares and Rights to be withdrawn, the number of Shares and Rights to be
withdrawn, and (if Share Certificates and/or Rights Certificates have been
tendered) the name of the registered holder of the Shares and Rights as set
forth in the Share Certificate and Rights Certificate, if different from that of
the person who tendered such Shares and Rights. If Share Certificates and Rights
Certificates have been delivered or otherwise identified to the Depositary, then
prior to the physical release of such certificates, the tendering shareholder
must submit the serial numbers shown on the particular certificates evidencing
the Shares and Rights to be withdrawn and the signature on the notice of
withdrawal must be guaranteed by an Eligible Institution, except in the case of
Shares and Rights tendered for the account of the Eligible Institution. If
Shares and Rights have been tendered pursuant to the procedures for book-entry
transfer set forth in Section 3, the notice of withdrawal must specify the name
and number of the account at the appropriate Book-Entry Transfer Facility to be
credited with the withdrawn Shares and Rights, in which case a notice of
withdrawal will be effective if delivered to the Depositary by any method of
delivery described in the first sentence of this paragraph. Withdrawals of
Shares and Rights may not be rescinded. Any Shares and Rights properly withdrawn
will be deemed not validly tendered for purposes of the Offer, but may be
retendered at any subsequent time prior to the Expiration Date by following any
of the procedures described in Section 3.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination shall be final and binding. None of the
Purchaser, Parent, any of their affiliates or assigns, if any, the Dealer
Manager, the Depositary, the Information Agent or any other person will be under
any duty to give any notification of
14
<PAGE>
any defects or irregularities in any notice of withdrawal or incur any liability
for failure to give any such notification.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
THE SUMMARY OF TAX CONSEQUENCES SET FORTH BELOW IS FOR GENERAL
INFORMATION ONLY AND IS BASED ON THE LAW AS CURRENTLY IN EFFECT. THE TAX
TREATMENT OF EACH SHAREHOLDER WILL DEPEND IN PART UPON SUCH SHAREHOLDER'S
PARTICULAR SITUATION. SPECIAL TAX CONSEQUENCES NOT DESCRIBED HEREIN MAY BE
APPLICABLE TO PARTICULAR CLASSES OF TAXPAYERS, SUCH AS FINANCIAL INSTITUTIONS,
BROKER-DEALERS, PERSONS WHO ARE NOT CITIZENS OR RESIDENTS OF THE UNITED STATES
AND SHAREHOLDERS WHO ACQUIRED THEIR SHARES THROUGH THE EXERCISE OF ANY EMPLOYEE
STOCK OPTION OR OTHERWISE AS COMPENSATION. ALL SHAREHOLDERS SHOULD CONSULT WITH
THEIR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES OF THE OFFER AND
THE PROPOSED MERGER TO THEM, INCLUDING THE APPLICABILITY AND EFFECT OF ANY
STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS.
The receipt of cash pursuant to the Offer or the Proposed Merger will be a
taxable transaction for federal income tax purposes under the Internal Revenue
Code of 1986, as amended (the "Code"), and may also be a taxable transaction
under applicable state, local or foreign income or other tax laws. Generally,
for federal income tax purposes a tendering shareholder will recognize gain or
loss in an amount equal to the difference between the cash received and the
shareholder's adjusted tax basis in the Shares (together with the Rights)
tendered by the shareholder and purchased pursuant to the Offer or the Proposed
Merger, as the case may be. Gain or loss will be calculated for each block of
Shares and Rights tendered and purchased pursuant to the Offer. For federal
income tax purposes, such gain or loss will be a capital gain or loss if the
Shares are a capital asset in the hands of the shareholder, and a long-term
capital gain or loss if the shareholder's holding period is more than one year
as of the date of the sale of the Shares or the effective date of the Proposed
Merger, as the case may be.
If the sale of the Shares and Rights pursuant to the Offer or in the
Proposed Merger occurs after the Distribution Date and the Rights Condition has
not been satisfied, the cash received must be allocated between the Shares and
Rights in proportion to their respective fair market values and the tax
treatment described in the preceding paragraph will apply separately with
respect to the Shares and the Rights. The holding period of the Rights should
include the holding period of the Shares with respect to which the Rights were
distributed.
For federal income tax purposes, it is unclear whether amounts received with
respect to the redemption of the Rights by the Company should be treated as
additional consideration for the Shares or as a dividend or other ordinary
income or a long-term or short-term capital gain.
15
<PAGE>
6. PRICE RANGE OF THE SHARES; DIVIDENDS.
According to the Company 10-K, the Shares are listed and traded principally
on the NYSE and the Pacific Stock Exchange (the "PSE"). The Shares are traded on
such exchanges under the symbol "USR". The following table sets forth, for the
periods indicated, the reported high and low closing sale prices for the Shares
on the NYSE Composite Tape and the amount of cash dividends paid per Share, all
as reported in published financial sources.
<TABLE><CAPTION>
CASH
HIGH LOW DIVIDENDS
------------- ------------- ---------
<S> <C> <C> <C>
FISCAL YEAR ENDED JANUARY 29, 1994
First Quarter.................................. $ 12 1/2 $ 10 1/8 $0.13
Second Quarter................................. 10 8 3/4 0.08
Third Quarter.................................. 11 1/4 8 7/8 0.08
Fourth Quarter................................. 15 1/2 10 7/8 0.08
FISCAL YEAR ENDED JANUARY 28, 1995
First Quarter.................................. $ 18 1/4 $ 12 $0.08
Second Quarter................................. 20 17 7/8 0.08
Third Quarter.................................. 24 17 1/2 0.08
Fourth Quarter................................. 20 3/8 15 1/4 0.08
FISCAL YEAR ENDING FEBRUARY 2, 1996
First Quarter (through March 2, 1995).......... $ 21 $ 18 5/8 N/A
</TABLE>
On March 2, 1995, the last full day of trading prior to the issuance of a
press release by Parent announcing the commencement of the Offer, the reported
closing price on the NYSE Composite Tape for the Shares was $18 3/4 per Share,
according to published sources.
SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
A shareholder will be entitled to retain (without any reduction in the
purchase price per Share) any regular quarterly cash dividend, not in excess of
$0.08 per Share, having a customary and usual record date (provided that such
date is prior to the Purchaser purchasing and becoming a record holder of such
Shares), regardless of when such shareholder tenders Shares pursuant to the
Offer.
According to the Company 10-K, the Rights are listed on the NYSE. As of the
date of this Offer to Purchase, the Rights are attached to the Shares and are
not traded separately. As a result, the sale prices per Share set forth above
are also the high and low sale prices per Share and associated Right during such
periods. Upon the occurrence of the Distribution Date, the Rights are to detach,
and may trade separately, from the Shares. See Section 11. As a result of the
commencement of the Offer on March 3, 1995, the Distribution Date may be as
early as March 13, 1995. If the Distribution Date occurs and the Rights begin to
trade separately from the Shares, shareholders are also urged to obtain a
current market quotation for the Rights.
7. CERTAIN INFORMATION CONCERNING THE COMPANY.
The information concerning the Company contained in this Offer to Purchase,
including financial information, has been taken from or based upon publicly
available documents and records on file with the Commission and other public
sources. Neither Parent, the Purchaser nor the Dealer Manager assumes any
responsibility for the accuracy or completeness of the information concerning
the Company contained in such documents and records or for any failure by the
Company to disclose events which may have occurred or may affect the
significance or accuracy of any such information but which are unknown to
Parent, the Purchaser or the Dealer Manager.
16
<PAGE>
According to the Company 10-K, the Company is an Ohio corporation and its
principal executive offices are located at One Eastwood Drive, Cincinnati, Ohio
45227.
According to the Company 10-K, the Company is a specialty retailing company
operating 2,237 retail outlets and leased departments in the United States,
Puerto Rico and Canada. The Company's specialty retailing businesses focus on
three major product segments: women's apparel, optical and footwear. The Company
also manufactures, imports and wholesales prominent footwear brands, primarily
for women.
According to a press release issued by the Company on December 16, 1994, the
Company was engaged in negotiations with Nine West Group Inc. ("Nine West")
relating to the possible sale of the footwear division for consideration
consisting of cash in the amount of $600 million and certain seven year warrants
to purchase an aggregate of 1.85 million shares of common stock of Nine West, at
the rate of one warrant for each 25 outstanding Shares of the Company. The
Company stated in such press release that no definitive agreement had been
entered providing for such sale and that the transaction was subject to due
diligence by Nine West, approval by the board of directors of the Company and
Nine West obtaining financing for the transaction.
On February 17, 1995, the Company issued a press release stating that
negotiations with Nine West relating to the sale of the Company's footwear
division had been terminated. According to the press release, the termination
occurred after Nine West informed the Company that it was unable to complete a
definitive agreement on the terms previously announced. In the press release Mr.
Bannus Hudson, the Chief Executive Officer and President of the Company said:
"The company is actively exploring other transaction options. Given the
current strength of our optical and footwear divisions, and the length of
time we now project will be required to achieve our objectives in the
apparel division, our Board of Directors has retained James D. Wolfensohn
Incorporated to evaluate strategic alternatives, including potential
business separation strategies and the company has initiated preliminary
discussions with counterparties."
In a separate press release issued on February 17, 1995, Nine West stated
that as a result of its due diligence review of the Company's footwear division,
it could not justify payment of the previously proposed purchase price. Nine
West further stated that it had advised the Company that it was prepared to
acquire the Company's footwear division for $525 million plus warrants to
purchase 3.78 million shares of the common stock of Nine West, but that the
Company had rejected such proposal.
Parent and the Purchaser have no knowledge of any subsequent public
announcement or press release issued by the Company related to the previously
proposed transaction with Nine West.
17
<PAGE>
Set forth below is certain selected historical consolidated financial
information relating to the Company and its subsidiaries which has been
excerpted or derived from the audited financial information of the Company
contained in the Company 10-K or incorporated by reference therein from the
Company's Annual Report to Shareholders for the fiscal year ended January 29,
1994 (the "Company Annual Report") and the unaudited interim consolidated
financial information of the Company contained in the Company 10-Q. More
comprehensive financial information is included in the Company Annual Report,
the Company 10-Q and other documents filed by the Company with the Commission.
The financial information that follows is qualified in its entirety by reference
to such reports and other documents, including the financial statements and
related notes contained therein. Such reports and other documents may be
inspected and copies may be obtained from the offices of the Commission, the
NYSE or the PSE in the manner set forth below.
THE UNITED STATES SHOE CORPORATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE><CAPTION>
FISCAL YEAR ENDED NINE MONTHS ENDED
--------------------------------------- -------------------------
FEBRUARY 1, JANUARY 30, JANUARY 29, OCTOBER 30, OCTOBER 29,
1992 1993 1994 1993 1994
----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales............................ $ 2,725,767 $ 2,650,684 $ 2,626,136 $ 1,957,105 $ 1,914,189
Earnings (loss) before provision
(credit) for income taxes and
cumulative effect of accounting
change............................... 67,753 7,660 (22,620) (34,436) 42,815
Earnings (loss) before cumulative
effect of accounting change.......... 39,974 4,368 (15,834) (24,105) 24,405
Cumulative effect, for years ended
prior to February 3, 1991, of
accounting change related to non-
pension postretirement benefits,
net of tax effect of $5,721........ (8,771) -- -- -- --
Net earnings (loss).................. 31,203 4,368 (15,834) (24,105) 24,405
PER SHARE INFORMATION:
Earnings (loss) before cumulative
effect of accounting change.......... 0.88 0.10 (0.35) (0.53) 0.53
Cumulative effect of accounting
change............................... (0.19) -- -- -- --
Net earnings (loss) per Share........ 0.69 0.10 (0.35) (0.53) 0.53
Cash dividends declared.............. 0.52 0.52 0.37 0.29 0.24
</TABLE>
<TABLE><CAPTION>
AT AT AT
JANUARY 30, 1993 JANUARY 29, 1994 OCTOBER 29, 1994
---------------- ---------------- ----------------
(UNAUDITED)
<S> <C> <C> <C>
BALANCE SHEET DATA:
Property, plant and equipment, net............ $ 406,125 $ 360,557 $ 333,522
Total assets.................................. 1,171,020 1,079,052 1,124,422
Current liabilities........................... 432,468 346,639(1) 465,509
Long-term debt and capital lease
obligations................................... 191,744 189,761 88,896
Total shareholders' investment................ 488,523 461,696 481,846
</TABLE>
- ------------
(1) Revised as set forth in the Company 10-Q.
On February 2, 1995, the Company issued a press release stating that
comparable-store sales at its retailing operations for the four weeks ended
January 28, 1995 rose 1.19%, sales at stores open at least a year increased 1.4%
for the fiscal year ended January 28, 1995; and total retail sales fell 0.3% to
approximately $2.15 billion for such fiscal year. In such press release, Mr.
Bannus Hudson, the Chief Executive Officer and President of the Company stated:
"January sales performance was particularly
18
<PAGE>
poor in Casual Corner and Petite Sophisticate, which represent the majority of
our apparel operations, and continue the very disappointing performance of the
past several months."
On March 1, 1995, the Company announced that its LensCrafters, Inc.
subsidiary had entered into an agreement to acquire Opti-World, Inc., a
privately held company operating 59 "superoptical" stores located primarily in
the southeastern United States.
On March 2, 1995, the Company issued a press release stating that comparable
store sales at its retailing operations for the four weeks ended February 25,
1995 decreased 2.3%. Total retail sales of the Company's women's apparel,
optical and footwear retailing operations were $142.1 million compared with
$139.4 million in the same period a year ago, an increase of 1.9%. Comparable
sales of the women's apparel retailing stores for February decreased 9.8%, while
the optical division's comparable domestic store sales increased 8.0%. In
addition, the press release indicated that comparable stores sales of the
Company's footwear retailing group in February decreased 5.2% from the same
period last year. Also, on March 2, 1995, according to a Dow Jones News report,
Mr. Bannus Hudson, Chief Executive Officer and President of the Company stated
that, for the fiscal year ended January 28, 1995, the Company expects to report
earnings of $0.29 to $0.34 per Share but that the Company expects a fourth
quarter loss of $0.18 to $0.23 per Share.
The Company is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is required to file periodic reports,
proxy statements and other information with the Commission relating to its
business, financial condition and other matters. Certain information concerning
the Company's directors and officers, their remuneration, stock options granted
to them, the principal holders of the Company's securities, any material
interests of such persons in transactions with the Company and other matters is
required to be disclosed in proxy statements and annual reports distributed to
the Company's shareholders and filed with the Commission. These reports, proxy
statements and other information should be available for inspection at the
Commission's public reference facilities at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and should also be available for
inspection and copying at prescribed rates at the following regional offices of
the Commission: Seven World Trade Center, New York, New York 10048 and Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and copies
may be obtained by mail at prescribed rates, from the principal office of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Reports, proxy
statements and other information concerning the Company are also available for
inspection at the NYSE, 20 Broad Street, New York, New York 10005 and the PSE,
115 Sansome Street, 2nd Floor, San Francisco, California 94104.
8. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT.
The Purchaser. The Purchaser is a newly incorporated Delaware corporation
organized in connection with the Offer and the Proposed Merger and has not
carried on any activities other than in connection with the Offer and the
Proposed Merger. The principal offices of the Purchaser are located at 1209
Orange Street, Wilmington, Delaware 19801, c/o The Corporation Trust Company.
The Purchaser is an indirect wholly owned subsidiary of Parent. Due to the fact
that the Purchaser is newly formed and has minimal assets and capitalization, no
meaningful financial information regarding the Purchaser is available.
Parent. Parent is a corporation organized under the laws of the Republic of
Italy and its principal executive offices are located at Via Valcozzena 10,
32021 Agordo (Belluno), Italy.
Parent is a world leader in the design, manufacture and marketing of high
quality eyeglass frames in the mid and premium price categories. Parent's
products, which are designed and manufactured in Italy, include over 1,700
styles available in a wide array of colors and sizes in both traditional and
designer lines. The traditional product lines are sold worldwide under the brand
names Avant-Garde, BerDel, Luxottica, SFeroflex, Mirari and Florence V Vogue.
19
<PAGE>
Parent's products are sold through wholly owned distributors in the United
States, Canada, Italy, France, Spain, Portugal, Sweden, Germany, the United
Kingdom, Brazil, Switzerland and Mexico; 75.5%- and 75%-owned distributors in
Greece and Austria, respectively; 51%-owned distributors in Belgium, the
Netherlands and Finland; and a 50%-owned joint venture in Japan. Parent has
entered into license agreements with eight designers and one retail department
store chain that enable it to manufacture and distribute eyeglass frames and
sunglasses in various geographic markets under the names Giorgio Armani, Emporio
Armani, Genny, Byblos, Valentino, Oliver, Giugiaro, Yves Saint Laurent, Sergio
Tacchini and Brooks Brothers. Parent also designs, manufactures and distributes
sunglasses and, in the third quarter of 1994, acquired a majority interest in an
Italian company that manufactures and distributes sport eyewear and other
products for the skiing and cycling markets.
Parent's Ordinary Shares, par value Lire 1,000 per share, are not listed or
traded on any non-United States stock exchange. American Depositary Shares
("ADSs"), each of which represents the right to receive one Ordinary Share, were
admitted for trading on the NYSE on January 24, 1990. ADSs are evidenced by
American Depositary Receipts ("ADRs") issuable by The Bank of New York, as
Depositary, pursuant to a Deposit Agreement. As of the record date of March 18,
1994 for Parent's 1994 annual shareholders meeting which was held on April 26,
1994 in Milan, Italy, there were 10,349,598 ADSs outstanding in the United
States, representing approximately 23% of the total number of outstanding
Ordinary Shares. As of such date, there were 119 registered holders of ADRs, 113
of whom were located in the United States.
The name, business address, citizenship, present principal occupation and
employment history of each of the directors and executive officers of the
Purchaser and Parent are set forth in Schedule I to this Offer to Purchase.
Parent is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is required to file periodic reports
and other information with the Commission relating to its business, financial
condition and other matters. Certain information, as of particular dates,
concerning Parent's business, principal physical properties, capital structure,
material pending legal proceedings, operating results, financial condition,
directors and officers, their remuneration, stock options granted to them, the
principal holders of Parent's securities, any material interests of such persons
in transactions with Parent and other matters is required to be disclosed in
annual reports and filed with the Commission. Such reports, proxy statements and
other information may be inspected and copied at the Commission's public
reference facilities in the same manner as set forth with respect to the Company
in Section 7. In addition, such information is also available for inspection at
the NYSE, 20 Broad Street, New York, New York 10005.
Set forth below is a summary of certain consolidated financial information
with respect to Parent and its subsidiaries for its fiscal year ended December
31, 1994, excerpted or derived from financial statements prepared by Parent and
audited by its independent public accountants for the fiscal year ended December
31, 1994, and for its fiscal years ended December 31, 1993 and 1992, excerpted
from financial statements presented in Parent's Annual Report on Form 20-F for
the fiscal year ended December 31, 1993 filed with the Commission (the "Parent
20-F"). More comprehensive information is included in the Parent 20-F, and the
financial information that follows is qualified in its entirety by reference
thereto and all of the financial statements and related notes contained therein,
which are hereby incorporated by reference. The Parent 20-F may be inspected at
the Commission's offices, and copies thereof may be obtained upon payment of the
Commission's customary charges in the manner set forth in Section 7.
Except as otherwise noted, the financial information set forth below is
stated in Italian Lire, the currency of the country in which the Parent and
certain of its subsidiaries are incorporated and operate. The translation of
Italian Lire amounts as of December 31, 1994, and for the period then ended,
into U.S. Dollar amounts is included solely for the convenience of readers. Such
amounts have been converted at the rate of 1,622.00 Lire per U.S. Dollar, the
New York City noon buying rate for cable transfers in foreign currencies as
certified for customs purposes by the Federal Reserve Bank of New York, at
December 31, 1994. Such translation should not be construed as a representation
that the Italian Lire amounts could be converted into U.S. Dollars at that or
any other rate.
20
<PAGE>
LUXOTTICA GROUP S.P.A.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
<TABLE><CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------
1992 1993 1994 1994
------- ------- ------- --------------------------
(IN MILLIONS OF LIRE(1)) (IN THOUSANDS OF
U.S. DOLLARS(1))
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales................................ 523,055 659,216 812,708 $501,053
Income from operations................... 129,145 180,450 229,414 141,439
Net income............................... 67,010 91,914 124,829 76,960
PER SHARE AND ADS INFORMATION:
Earnings per share....................... 1,488 2,062 2,800 1.73
Earnings per ADS......................... 1,488 2,062 2,800 1.73
<CAPTION>
AT DECEMBER 31,
-----------------------------------------------------------
1992 1993 1994 1994
------- ------- ------- --------------------------
(IN MILLIONS OF LIRE) (IN THOUSANDS OF
U.S. DOLLARS)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Property, plant and equipment, net....... 122,335 139,449 139,094 $ 85,755
Total assets............................. 478,618 571,567 709,771 437,590
Current liabilities...................... 157,632 163,419 211,838 130,603
Long-term debt........................... 20,450 14,181 13,816 8,518
Total shareholders' equity............... 259,207 344,202 431,284 265,896
</TABLE>
- ------------
(1) Except per share and per ADS amounts.
Parent's financial statements are presented in accordance with accounting
practices established by the Italian Accounting Profession and, in their
absence, by the International Accounting Standards Committee ("Italian GAAP"),
which practices are described in the notes to the financial statements contained
in the Parent 20-F. As described more fully in such notes, Italian GAAP differs
in certain respects from generally accepted accounting principles in the United
States ("U.S. GAAP"). The principal differences between Italian GAAP and U.S.
GAAP, as applied to the calculation of the net income and total shareholders'
equity of Parent, are summarized below.
Asset Revaluation. Under Italian GAAP asset revaluations are permitted.
Except in connection with purchase accounting, revaluations of assets are not
permitted under U.S. GAAP and, accordingly, the excess of the written up value
over original cost less aggregate depreciation must be deducted from
shareholders' equity. In addition, a tax imposed in connection with an asset
revaluation effected by Parent in 1992 was deducted directly against
shareholders' equity under Italian GAAP. Under U.S. GAAP, the amount of such tax
would be recorded as a charge to the current tax provision and a benefit for
deferred taxes in 1992.
Government Grants. Under Italian GAAP, certain grants received by Parent
from the Italian government for technological excellence were recorded as an
increase in retained earnings. Under U.S. GAAP, such grants would be reflected
as other income, net of tax.
Earnings Per Share. Unlike U.S. GAAP, Italian GAAP does not require
disclosure of earnings per share. The earnings per share of Parent shown above
have been calculated based on net income determined in accordance with Italian
GAAP and the weighted average number of shares outstanding during the respective
periods presented.
21
<PAGE>
Except as set forth elsewhere in this Offer to Purchase: (i) neither the
Purchaser nor Parent nor, to the knowledge of the Purchaser and Parent, any of
the persons listed in Schedule I hereto or any associate or majority-owned
subsidiary or any pension, profit-sharing or similar plan of the Purchaser,
Parent or any of the persons so listed, beneficially owns or has a right to
acquire any Shares or any other equity securities of the Company; (ii) neither
the Purchaser nor Parent nor, to the knowledge of the Purchaser and Parent, any
of the persons or entities referred to in clause (i) above or any of their
executive officers, directors or subsidiaries has effected any transaction in
the Shares or any other equity securities of the Company during the past 60
days; (iii) neither the Purchaser nor Parent nor, to the knowledge of the
Purchaser or Parent, any of the persons listed in Schedule I hereto has any
contract, arrangement, understanding or relationships with any other person with
respect to any securities of the Company, including, but not limited, the
transfer or voting thereof, joint ventures, loan or option arrangements, puts or
calls, guarantees of loans, guarantees against loss or the giving or withholding
of proxies, consents or authorizations; (iv) since February 2, 1992, there have
been no transactions which would require reporting under the rules and
regulations of the Commission between the Purchaser, Parent or any of their
respective subsidiaries or, to the knowledge of the Purchaser and Parent, any of
the persons listed in Schedule I hereto, on the one hand, and the Company or any
of its executive officers, directors or affiliates, on the other hand; and (v)
since February 2, 1992, there have been no contacts, negotiations or
transactions between the Purchaser, Parent or any of their respective
subsidiaries or, to the knowledge of the Purchaser, Parent, any of the persons
listed in Schedule I hereto, on the one hand, and the Company or its
subsidiaries or affiliates, on the other hand, concerning a merger,
consolidation or acquisition, tender offer or other acquisition of securities,
an election of directors or a sale or other transfer of a material amount of
assets of the Company. From time to time Parent and certain of its directors and
officers and their respective affiliates and associates have engaged in ordinary
business transactions with the Company and expect to engage in such transactions
with the Company in the future.
Avant-Garde Optics, Inc., a New York corporation and wholly owned subsidiary
of Parent, owns 31,375 Shares; Mr. Claudio Del Vecchio, the Executive Vice
President of Avant-Garde Optics, Inc. and a Managing Director of Parent, owns as
joint tenant with his wife, 5,100 Shares; the Avant-Garde Optics, Inc. Employee
Profit Sharing Plan owns 6,700 Shares; and the Avant-Garde Optics, Inc. Employee
Pension Plan owns 1,500 Shares. All of such Shares were purchased through open
market transactions executed on the NYSE and, based on information contained in
the Company 10-Q, represent in the aggregate less than 1% of all outstanding
Shares. The Purchaser and Parent disclaim beneficial ownership of all Shares
owned by either the Avant-Garde Optics, Inc. Employee Profit Sharing Plan or the
Avant-Garde Optics, Inc. Employee Pension Plan.
9. SOURCE AND AMOUNT OF FUNDS.
The consummation of the Offer is conditioned upon, among other things, the
Purchaser being satisfied, in its sole discretion, that the Purchaser has
obtained sufficient financing to enable it to consummate the Offer and the
Proposed Merger. See Section 14.
The Purchaser estimates that approximately $1.2 billion will be required to
acquire all of the Shares pursuant to the Offer and the Proposed Merger. The
Purchaser expects to obtain these funds from capital contributions and/or loans
from affiliates of Parent. Such funds, in turn, are expected to be obtained from
borrowings under a credit facility to be established with a syndicate of
financial institutions consisting of a $1.0 billion term loan facility (the
"Term Loan Facility") and a $450 million revolving credit facility (the
"Revolving Credit Facility" and collectively with the Term Loan Facility, the
"Facility").
Parent has obtained a commitment letter dated March 2, 1995 (the "Commitment
Letter") from Credit Suisse committing Credit Suisse to provide the Facility.
The commitment and agreements of Credit Suisse under the Commitment Letter are
subject to customary conditions, including, among other things, (i) the absence
of any material adverse change in the market for syndicated facilities
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similar in nature to the Facility and the absence of any material disruption of
or a material adverse change in financial, banking or capital markets generally,
(ii) the absence of a material adverse change with respect to Parent or the
Company and (iii) the negotiation, execution and delivery of definitive
documentation with respect to the Facility. The commitment of Credit Suisse with
respect to the Facility will terminate on July 3, 1995 if definitive
documentation evidencing the Facility has not been entered into prior to such
date and the Offer shall not have been consummated.
The Facility will be guaranteed by Parent, certain of Parent's direct and
indirect foreign subsidiaries and all of Parent's direct and indirect domestic
subsidiaries. The Facility and such guarantees will be secured by a pledge of
all of the capital stock of Parent's indirect and direct domestic subsidiaries
and a grant of a security interest in substantially all of the assets of
Parent's indirect and direct domestic subsidiaries.
Borrowings pursuant to the Facility will bear interest, at the election of
the borrower thereunder, at (i) the London Interbank Offered Rate plus 2.0% or
(ii) the Base Rate (defined as the higher of (x) Credit Suisse's prime rate and
(y) the Federal Reserve reported certificate of deposit rate plus .5%) plus
1.0%; provided that such interest rates shall be subject to adjustment based on
certain financial ratios and other criteria. A letter of credit fee of 2.0% per
annum (subject to adjustment based on certain financial ratios and other
criteria) will be payable in respect of the aggregate outstanding stated amount
of all letters of credit issued under the Facility.
Generally, amounts under the Revolving Credit Facility may be borrowed,
repaid and reborrowed from time to time. Amounts repaid under the Term Loan
Facility may not be reborrowed. Loans under the Term Loan Facility will amortize
quarterly in installments of $25 million or $30 million, except that an
installment of $425 million will be payable on or prior to the end of the
eighteenth month following the initial funding of the Facility. The entire
unpaid balance under the Facility will be payable on the sixth anniversary of
the closing of the Offer.
The definitive documentation with respect to the Facility will contain
customary representations and warranties, covenants, conditions and events of
default. Such covenants will include, among other things, financial covenants
relating to maintenance of ratios of indebtedness to operating profit and of
operating profit to interest expense and restrictions on indebtedness,
guarantees, acquisitions, capital expenditures, investments, loans and advances,
liens, dividends and other stock payments, asset sales and issuances of stock.
In connection with such convenants, it is also expected that Parent and the
Purchaser will agree not to modify or waive in any respect material to the
lenders under the Facility any material term or condition of the Offer or the
Proposed Merger except with the consent of Credit Suisse and lenders holding a
majority in aggregate principal amount of the aggregate commitments under the
Facility.
Parent has agreed to pay to Credit Suisse financing, agent's administration
and other fees that Parent believes to be customary for transactions of this
type. In addition, the Facility will provide for a commitment fee of .5% per
annum (subject to reduction in the event Parent satisfies certain financial
ratios) on the unused portion of the Facility from the date of the initial
funding under the Facility until the termination of the Facility.
The foregoing description of the Commitment Letter is qualified in its
entirety by reference to the text of the Commitment Letter filed as an exhibit
to the Schedule 14D-1, a copy of which may be obtained from the offices of the
Commission in the manner set forth in Section 7 (except that such information
will not be available at the regional offices of the Commission).
It is anticipated that the indebtedness incurred through borrowings under
the Facility will be repaid from funds generated internally by Parent and its
subsidiaries (including, if the Proposed Merger, if consummated, funds generated
by the Company) and from other sources which may include the proceeds of asset
dispositions and/or the private or public sale of debt or equity securities. No
final decisions have been made concerning the method Parent will employ to cause
the repayment of such
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indebtedness. Such decisions will be made based on Parent's review from time to
time of the advisability of particular actions, as well as on prevailing
interest rates and financial and other economic conditions.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.
During telephone calls in December, 1994 and a meeting in January, 1995,
Parent and its financial advisor indicated to senior management of the Company
and its financial advisor that Parent was interested in exploring the
acquisition of the Company by means of an all cash merger transaction involving
the payment to the Company's shareholders of a price representing a substantial
premium above the then current market value of the Shares, and that Parent and
its representatives wished to engage in negotiations with the Company and its
representatives in order to effectuate such a transaction. The respective
financial advisors of Parent and Company also held several meetings and
telephone calls during such period in which Parent's financial advisors
reiterated the merger proposal. Parent and its financial advisor also advised
the Company and its financial advisor that Parent wished to be given access to
non-public information concerning the Company's businesses in order to permit
Parent to offer a fully-valued cash merger proposal. In the course of these
discussions, Parent received from the Company a proposed confidentiality
agreement that would have provided for delivery of such non-public information
to Parent, but Parent and the Company did not reach agreement on its terms.
After concluding that further attempts to enter into a mutually satisfactory
confidentiality agreement with the Company would be unsuccessful, Parent and the
Purchaser determined to make their proposal directly to the Company's
shareholders. Accordingly, Parent and the Purchaser commenced the Offer.
Parent and its financial advisor have had, during the last few months,
informal conversations with parties that may be interested in purchasing the
footwear and women's apparel divisions of the Company. Although Parent has not
adopted any firm plans, it presently intends to sell or otherwise dispose of the
Company's footwear and women's apparel divisions subject to its obtaining access
to, and conducting a detailed review of, such operations. See Section 11.
On March 3, 1995, Mr. Claudio Del Vecchio delivered the following letter to
Mr. Bannus Hudson, the President and Chief Executive Officer of the Company:
Mr. Bannus B. Hudson
President and Chief Executive Officer
The United States Shoe Corporation
One Eastwood Drive
Cincinnati, Ohio 45227
Dear Ban:
As you well know, we have expressed to you on a number of occasions our
strong interest in acquiring The United States Shoe Corporation ("US Shoe").
In a series of telephone calls and meetings beginning in December 1994, we,
along with our financial advisor CS First Boston Corporation ("CS First
Boston"), advised you and other members of senior management of US Shoe and
its financial advisor that Luxottica Group S.p.A. ("Luxottica") was
interested in exploring the acquisition of US Shoe by means of an all cash
merger transaction involving the payment to your shareholders of a price
representing a substantial premium above the then current market value of US
Shoe's common shares. In the course of these conversations, we, along with
CS First Boston, requested access to non-public information concerning US
Shoe so that we could insure that our proposed cash offer would be
fully-valued. In response to our request, US Shoe attempted to procure a
standstill agreement that would preclude Luxottica from proposing an offer
directly to your shareholders for a minimum of two years. We consider
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this response to be inconsistent with both our objectives and the best
interests of your shareholders.
We are disappointed by US Shoe's failure to respond satisfactorily to
our proposal to negotiate a merger transaction and our request for access to
non-public information. While we would have preferred to negotiate a
transaction with you, we feel that we have no choice but to present a
proposal directly to your shareholders. Accordingly, Luxottica and Luxottica
Acquisition Corp., an indirect wholly-owned subsidiary of Luxottica, are
today commencing a tender offer for all the outstanding common shares (and
the associated preference share purchase rights) of US Shoe at a price of
$24.00 net per share in cash. It is our intention to acquire any shares not
purchased in the tender offer for the same cash consideration pursuant to a
merger. As described in our offering materials, we have received commitments
for all funds necessary to effect the offer.
We believe that an all cash price of $24.00 net per share for all shares
presents an extremely attractive opportunity to US Shoe's shareholders. Over
the past twelve months, US Shoe's common shares have traded as low as $13.50
per share. Our offer represents more than a 75% premium over that price and
a 28% premium over yesterday's reported closing price on the NYSE Composite
Tape.
In light of the attractive terms of our offer, we request that US Shoe's
Board of Directors make appropriate determinations so that the preference
share purchase rights and the restrictions provided in the Ohio Business
Combination Law are rendered inapplicable to our offer and the proposed
merger.
It is our hope that we can proceed toward a transaction with a minimum
of delay. Accordingly, we are prepared to begin immediate negotiations of a
definitive merger agreement containing mutually agreeable terms and
conditions for an acquisition transaction at a price of $24.00 net per
share.
Sincerely yours,
/s/ Claudio Del Vecchio
Claudio Del Vecchio
Managing Director
Parent intends to continue to seek to negotiate with the Company with
respect to the acquisition of the Company by Parent or one of its affiliates,
whether pursuant to the Offer and Proposed Merger or otherwise. If such
negotiations occur and result in a definitive merger agreement between Parent
and/or one of its affiliates and the Company, certain material terms of the
Offer may change. Accordingly, such negotiations could result in, among other
things, amendment or termination of the Offer (see Section 14) and a submission
of a different acquisition proposal to the Company's shareholders for their
approval.
11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY; OTHER MATTERS RELATING TO THE
OFFER AND THE PROPOSED MERGER.
Purpose of the Offer
The purpose of the Offer and the Proposed Merger is to enable Parent to
acquire control of, and the entire equity interest in, the Company. The Offer,
as the first step in the acquisition of the Company, is intended to facilitate
the acquisition of all Shares. The Purchaser currently intends, as soon as
practicable following completion of the Offer, to seek to consummate the
Proposed Merger. The purpose of the Proposed Merger is to acquire all Shares not
tendered and purchased pursuant to the Offer or
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otherwise. Pursuant to the Proposed Merger, each Share (other than Shares owned
by the Purchaser or Parent, Shares held in the treasury of the Company, and
Shares owned by shareholders who perfect any available dissenters' rights under
Ohio law) would be converted into the right to receive an amount in cash equal
to the price per Share paid by the Purchaser pursuant to the Offer. Although it
is the Purchaser's current intention to propose and seek to enter into a
definitive merger agreement with the Company with respect to the Proposed Merger
and to consummate the Proposed Merger as promptly as practicable, there can be
no assurance that the Proposed Merger will be consummated or, if consummated, of
the timing thereof. Consummation of the Proposed Merger will require the
adoption of a resolution by the Company's board of directors approving the
Proposed Merger and the affirmative vote of the holders of two-thirds of the
Shares. Alternatively, if the Purchaser purchases ninety (90%) percent or more
of the Shares, the Proposed Merger could be consummated without the approval of
the shareholders through a Short-Form Merger (described below under "The
Proposed Merger").
In order to increase the likelihood that the Company and the Purchaser enter
into the Proposed Merger, Parent and the Purchaser have taken preliminary steps
to commence a solicitation of agent designations for the calling of the Special
Meeting at which, among other things, Parent and the Purchaser will propose that
the holders of Shares (i) remove all of the incumbent directors of the Company,
(ii) elect the nominees of the Purchaser as directors to fill the vacancies
created thereby and (iii) if the Control Share Condition shall not have
theretofore been satisfied, amend the Regulations of the Company to provide that
Section 831 does not apply to the purchase of Shares pursuant to the Offer. The
nominees of the Purchaser will, if elected at the Special Meeting, and subject
to their fiduciary duties, be committed to ensuring that the Offer and the
Proposed Merger are approved by the Company's Board of Directors.
In addition, the Purchaser presently intends to solicit proxies from the
shareholders of the Company with respect to the Section 831 Meeting (unless the
Purchaser is satisfied that the provisions of Section 831 are invalid or are not
applicable to the acquisition of Shares pursuant to the Offer).
THIS OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES OR AGENT
DESIGNATIONS FOR ANY MEETING OF THE COMPANY'S SHAREHOLDERS. ANY SUCH
SOLICITATION WILL BE MADE ONLY PURSUANT TO PROXY OR OTHER MATERIALS COMPLYING
WITH THE REQUIREMENTS OF SECTION 14(A) OF THE EXCHANGE ACT AND THE RULES AND
REGULATIONS THEREUNDER.
Plans for the Company
In connection with the Offer, Parent and the Purchaser have reviewed, and
will continue to review, on the basis of publicly available information, various
possible business strategies that they might consider in the event that the
Purchaser acquires control of the Company, whether pursuant to this Offer, the
Proposed Merger or otherwise. If and to the extent that the Purchaser acquires
control of the Company or otherwise obtains access to the books and records of
the Company, Parent and Purchaser intend to conduct a detailed review of the
Company and its assets, corporate structure, dividend policy, capitalization,
operations, properties, policies, management and personnel and consider and
determine what, if any, changes would be desirable in light of the circumstances
which then exist. Such strategies could include, among other things, changes in
the Company's business, corporate structure, Articles of Incorporation,
Regulations, capitalization, management or dividend policy. In addition, Parent
and its financial advisor have had, during the last few months, informal
conversations with parties that might be interested in purchasing the footwear
and women's apparel divisions of the Company. Although Parent has not adopted
any firm plans, it presently intends to sell or otherwise dispose of the
Company's footwear and women's apparel divisions subject to its obtaining access
to, and conducting a detailed review of, such operations.
In connection with its preliminary review, Parent has determined that, upon
its acquisition of control of the Company, it will consider implementing a new
advertising policy for the Company's optical division, principally by applying
the funds in its advertising budget to messages to consumers
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which focus on the need for professional eyecare, the need for quality eyewear,
the importance of eyewear fashion and function and the need for protective
sunwear.
Except as described in this Offer to Purchase, Parent and the Purchaser have
no present plans or proposals that would result in an extraordinary corporate
transaction, such as a merger, consolidation, reorganization, liquidation,
relocation of any operations of the Company, closing of any plant or facility of
the Company, or sale or transfer of a material amount of assets, involving the
Company or any of its subsidiaries, or any material changes in the Company's
present capitalization, dividend policy, employee benefit plans, corporate
structure or business or any material changes or reductions in the composition
of its management or personnel.
The Proposed Merger
In general, under the ORC, a merger of an Ohio corporation and a Delaware
corporation, such as the Proposed Merger, requires the adoption of a resolution
by the board of directors of the Ohio corporation approving such merger and the
approval by the shareholders of the Ohio corporation by the affirmative vote of
two-thirds of all votes entitled to be cast on such matter, as well as
compliance with the laws of the State of Delaware in respect of such merger.
However, Article Seven of the Company's Articles ("Article Seven") requires,
that in addition to any vote required by law and unless certain provisions are
satisfied ("Fair Price Provisions"), certain "Business Combinations" (as defined
in Article Seven), including a merger between the Company and an "Interested
Shareholder" (generally, a beneficial owner of ten percent (10%) or more of the
outstanding voting shares of the Company), either be (i) approved by at least
eighty percent (80%) of all outstanding voting shares (including shares held by
the Interested Shareholder and its affiliates) or (ii) approved by a majority of
Continuing Directors (as defined in Article Seven). It is currently anticipated
that consummation of the Proposed Merger will comply with the Fair Price
Provisions of Article Seven.
Accordingly, if the Purchaser acquires more than two-thirds of the
outstanding Shares pursuant to the Offer, the Purchaser would have the voting
power to approve the Proposed Merger without the affirmative vote of any other
shareholders and could effect the Proposed Merger by so voting and by action of
the Boards of Directors of the Purchaser and the Company (subject to the
requirements of the Ohio Business Combination Law and the Ohio Control Share Act
described below). This will be the case if the Minimum Condition is satisfied.
Further, the ORC provides that a ninety (90%) percent or more owned Ohio
subsidiary may be the surviving corporation of a merger with its parent
corporation upon a majority vote of each corporation's entire board of
directors, without action or vote by the shareholders of either corporation (a
"Short-Form Merger"). Accordingly, if the Purchaser owns ninety (90%) percent or
more of the outstanding Shares after consummation of the Offer, a Short-Form
Merger could be effected by action of the Boards of Directors of the Purchaser
and the Company without the approval of the Company's shareholders.
In order to increase the likelihood that the Board of Directors of the
Company approves the Proposed Merger (whether or not the Proposed Merger can be
effected as a Short-Form Merger), Parent and the Purchaser have taken
preliminary steps to commence a solicitation of agent designations for the
calling of the Special Meeting at which, among other things, Parent and the
Purchaser will propose that the holders of Shares remove all of the incumbent
directors of the Company and elect the nominees of the Purchaser as directors to
fill the vacancies created thereby. The nominees of the Purchaser will, if
elected at the Special Meeting, and subject to their fiduciary duties, be
committed to ensuring that the Proposed Merger is approved by the Company's
Board of Directors.
Dissenters' Rights
Each shareholder of record (as of the dated fixed for determining
shareholders entitled to notice of the meeting of shareholders of the Company at
which the Proposed Merger is to be submitted or, if the Proposed Merger is not
subject to a vote of shareholders, the date on which an agreement of merger
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<PAGE>
with respect to the Proposed Merger is adopted by the Board of Directors of the
Company) will have the right to receive fair cash value for such shareholder's
Shares if such shareholder objects to the Proposed Merger and otherwise properly
exercises such shareholder's dissenters' rights and the Proposed Merger is
consummated. If the right to receive fair cash value is applicable and the
statutory procedures for exercising or perfecting dissenters' rights are
complied with in accordance with the ORC, then a judicial determination will be
made as to the fair cash value required to be paid to the objecting shareholders
for their Shares. Any such judicial termination of fair cash value would be
based on the amount that a willing seller, under no compulsion to sell, would be
willing to accept, and a willing buyer, under no compulsion to purchase, would
be willing to pay (excluding any appreciation or depreciation in the market
value resulting from the Proposed Merger), and the value so determined could be
more or less than the price per share to be paid in the Offer or the Proposed
Merger.
From the time written demand for payment of the fair cash value is given
until either the termination of the rights and obligations arising from such
demand or the purchase of the Shares related thereto by the Company, all rights
accruing to the objecting shareholder, including voting and dividend or
distribution rights, will be suspended. If any dividend or distribution is paid
on Shares during the suspension, an amount equal to the dividend or distribution
which would have been payable on the Shares, but for such suspension, shall be
paid to the holder of record of the Shares as a credit against the fair cash
value of the Shares. If the right to receive the fair cash value is terminated
otherwise than by the purchase of the Shares by the Company, all rights will be
restored to the objecting shareholder and any distribution that would have been
made to the holder of record of the Shares, but for the suspension, will be made
at the time of such termination.
The foregoing summary of the rights of objecting shareholders does not
purport to be a complete statement of the procedures to be followed by
shareholders desiring to exercise their dissenters' rights. The preservation and
exercise of dissenters' rights are conditioned on strict adherence to the
applicable provisions of the ORC.
The Rights
According to the Company's Registration Statement on Form 8-A dated April 9,
1986 (as amended by Amendment No. 1 on Form 8, dated June 5, 1986), on March 31,
1986 the Board of Directors of the Company adopted a Rights Agreement, pursuant
to which it declared a dividend of one right for each outstanding Share to
shareholders of record at the close of business on April 14, 1986. The Rights
Agreement was subsequently amended by the First Amendment (as used in this Offer
to Purchase, "Rights Plan" shall refer to the Rights Plan dated as of March 31,
1986, as amended by the First Amendment). Based upon publicly available
information, the Purchaser believes that the Rights are not exercisable at this
time, Rights Certificates have not been issued and the Rights are evidenced by
the Share Certificates. The Rights will not become exercisable or transferable
or be distributed apart from the Shares until the earlier of (i) the first date
of public announcement by the Company or by an "Acquiring Person" (as defined
below) that a person has become an Acquiring Person (the "Shares Acquisition
Date") or (ii) 5:00 p.m. New York City time on the tenth day (or such later date
as may be determined by a majority of the Company's "Continuing Directors" (as
defined below) then in office) following the commencement of, or the first
public announcement of the intent to commence, a tender or exchange offer by any
person (other than the Company, any subsidiary of the Company, any employee
benefit plan of the Company or of any subsidiary of the Company, or any person
or entity organized, appointed or established by the Company for or pursuant to
the terms of any such plan), if upon consummation thereof, such person would be
the beneficial owner of thirty percent (30%) or more of the outstanding Shares
(the earlier of such dates being referred to herein as the "Distribution Date").
The Purchaser believes that the Distribution Date will be March 13, 1995, unless
prior to such date the Company's board of directors redeems the Rights, amends
the Rights Agreement to delay the Distribution Date or determines that the
Rights are inapplicable to the Offer.
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An "Acquiring Person" means any person who or which, together with all
affiliates or associates of such person, shall be the beneficial owner of twenty
percent (20%) or more of the Shares then outstanding, but does not include the
Company, any subsidiary of the Company, any employee benefit plan of the Company
or of any subsidiary of the Company or any person or entity organized, appointed
or established by the Company for or pursuant to the terms of any such plan. A
"Continuing Director" means (i) any member of the Board of Directors of the
Company, while such person is a member of the board, who is not an Acquiring
Person, or an affiliate or associate of an Acquiring Person, or a representative
of an Acquiring Person or of any such affiliate or associate, and who was a
member of the board prior to the date of the Rights Agreement, or (ii) any
person who subsequently becomes a member of the board, while such person is a
member of the board, who is not an Acquiring Person, or an affiliate or
associate of an Acquiring Person, or a representative of an Acquiring Person or
of any such affiliate or associate, if such person's nomination for election or
election to the board is recommended or approved by a majority of the Continuing
Directors.
Under the terms of the Rights Agreement, when the Rights are distributed and
become exercisable, each such Right will entitle the registered holder of such
Right to purchase from the Company one one-hundredth of a share of Series A
Preference Share, without par value, of the Company (the "Preference Shares") at
a price of $200 per one one-hundredth of a share (the "Purchase Price"), subject
to adjustment in certain circumstances.
The Rights Agreement also provides that, except pursuant to a Permitted
Offer (as defined below), if any person, alone or with its affiliates and
associates, becomes an Acquiring Person, then each holder of a Right (other than
the Acquiring Person and its affiliates and associates) has a right for a
specified period to purchase, upon exercise of the Right at the then current
Purchase Price and in lieu of the Preference Shares, common shares having a
market value of two times the Purchase Price. In addition, upon the occurrence
of certain other events (including a merger in which the Shares are exchanged or
50% or more of the Company's assets or earning power is sold or transferred),
the Rights would entitle the holder to purchase common stock in the acquiring
entity at half its market value, except in connection with such events which
follow a Permitted Offer. A "Permitted Offer" means the acquisition of
beneficial ownership of twenty percent (20%) or more of the outstanding common
shares by an Acquiring Person if such acquisition is made pursuant to a tender
or exchange offer for all outstanding Shares at a price and on terms determined
by at least a majority of the members of the Board of Directors, who are not
officers of the Company, to be in the best interests of the Company and its
shareholders.
The Rights Agreement further provides that at any time prior to 5:00 p.m.
New York City time on the earlier of (i) the time any person becomes an
Acquiring Person or (ii) April 14, 1996 (the "Final Expiration Date"), the Board
of Directors of the Company may, at its option, redeem all (but not less than
all) of the Rights at a price of $0.05 per Right (as adjusted for any stock
split, stock dividend or similar transaction) (the "Redemption Price"). The
Board of Directors of the Company may also redeem all (but not less than all) of
the Rights at the Redemption Price if, following the occurrence of the Shares
Acquisition Date but prior to (i) the Company engaging in a merger or other
business combination transaction in which the Company is not the surviving
corporation, (ii) the Company engaging in a merger or other business combination
transaction with another person in which the Company is the surviving
corporation, but in which its common shares are changed or exchanged, or (iii)
fifty percent (50%) or more of the Company's assets or earning power being sold
or transferred, either (x) all holders of Shares are treated alike and an
Acquiring Person is not involved in any transaction described in clauses (i),
(ii) or (iii) of this sentence or (y) following the expiration period for the
Rights, the Acquiring Person is not the beneficial owner of twenty percent (20%)
or more of the Shares and, at the time of such redemption, there are no other
Acquiring Persons.
Additionally, the Rights Agreement provides that the Rights will expire upon
the consummation of a transaction described in clauses (i) and (ii) in the
preceding paragraph if (a) such transaction is consummated with a person or
group who acquired Shares pursuant to a Permitted Offer (or a wholly
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owned subsidiary of such person or group); (b) the price per share of Shares
offered in such transaction is not less than the price per share of Shares paid
to all holders of Shares whose Shares were purchased pursuant to such Permitted
Offer; and (c) the form of the consideration being offered to the remaining
holders of Shares pursuant to such transaction is the same as the form of
consideration paid pursuant to such Permitted Offer.
Parent and the Purchaser are requesting that the Company's Board of
Directors redeem the Rights. In addition, Parent and the Purchaser brought an
action for declaratory and other relief against the Company and the members of
its Board of Directors on March 3, 1995 in the United States District Court for
the Southern District of Ohio, Eastern Division, seeking, among other things, an
order declaring that the incumbent directors of the Company have breached their
fiduciary duties by issuing the Rights and by failing to redeem the Rights or
failing to determine that the Rights are inapplicable to the Offer and to the
Proposed Merger. See Section 15. However, in the event that the Board of
Directors of the Company shall fail to redeem the Rights or fail to determine
that the Rights are inapplicable to the Offer prior to the intended date of the
consummation of the Offer, or the order sought in such litigation is not
obtained, the Purchaser expects its nominees to the Company's Board of
Directors, if elected at the Special Meeting, and subject to their fiduciary
duties, either to redeem the Rights or take such other appropriate action as
shall result in the satisfaction of the Rights Condition.
Unless the Rights are redeemed or otherwise become inapplicable,
shareholders will be required to tender one Right for each Share tendered in
order to effect a valid tender of such Share in accordance with the procedures
set forth in Section 3. If Rights Certificates are not issued, a tender of
Shares will also constitute a tender of the associated Rights. See Sections 1
and 3.
THE PURCHASER CURRENTLY CONTEMPLATES THAT SHARES WILL NOT BE ACCEPTED FOR
PAYMENT PURSUANT TO THE OFFER UNTIL THE RIGHTS HAVE BEEN REDEEMED BY THE BOARD
OF DIRECTORS OF THE COMPANY UNLESS THE PURCHASER, IN ITS SOLE DISCRETION, IS
SATISFIED THAT THE RIGHTS HAVE BEEN INVALIDATED OR ARE OTHERWISE INAPPLICABLE TO
THE OFFER AND THE PROPOSED MERGER. SEE SECTION 14.
"Going Private" Transactions
The Commission has adopted Rule 13e-3 under the Exchange Act which is
applicable to certain "going private" transactions and which may under certain
circumstances be applicable to the Proposed Merger. However, Rule 13e-3 would be
inapplicable if (i) the Shares are deregistered under the Exchange Act prior to
the Proposed Merger or other business combination or (ii) the Proposed Merger or
other business combination is consummated within one year after the purchase of
the Shares pursuant to the Offer and the amount paid per Share in the Proposed
Merger or other business combination is at least equal to the amount paid per
Share in the Offer. If applicable, Rule 13e-3 requires, among other things, that
certain financial information concerning the fairness of the proposed
transaction and the consideration offered to minority shareholders in such
transaction be filed with the Commission and disclosed to shareholders prior to
the consummation of the transaction.
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12. DIVIDENDS AND DISTRIBUTIONS.
If, on or after March 3, 1995, the Company should (a) split, combine or
otherwise change the Shares or its capitalization, (b) acquire Shares or
otherwise cause a reduction in the number of Shares or (c) issue or sell
additional Shares (other than the issuance of Shares reserved for issuance as of
January 29, 1994 under option and employee stock purchase plans in accordance
with their terms as publicly disclosed prior to March 3, 1995) or any shares of
any other class of capital stock, other voting securities or any securities
convertible into or exchangeable for, or rights, warrants or options,
conditional or otherwise, to acquire, any of the foregoing, or (d) shall
disclose that it has taken such action, then, without prejudice to the
Purchaser's rights under Section 14, the Purchaser, in its sole discretion, may
make such adjustments in the purchase price and other terms of the Offer and the
Proposed Merger as it deems appropriate to reflect such split, combination or
other change, including, without limitation, in the number or type of securities
offered to be purchased, the amounts payable therefor and the fees payable
hereunder.
If Shares are purchased pursuant to the Offer and, on or after March 3,
1995, the Company should declare or pay any dividend on the Shares (other than
regular quarterly cash dividends, not in excess of $0.08 per Share, having a
customary and usual record date) or any distribution (including, without
limitation, the issuance of additional Shares pursuant to a stock dividend or
stock split, the issuance of other securities or the issuance of rights (other
than the separation of the Rights from the Shares) for the purchase of any
securities) with respect to the Shares or Rights (other than the Redemption
Price) that is payable or distributable to shareholders of record on a date
prior to the transfer into the name of Purchaser or its nominees or transferees
on the Company's stock transfer records of the Shares and Rights purchased
pursuant to the Offer (except that if the Rights are redeemed by the Company's
Board of Directors, tendering shareholders who are holders of record as of the
applicable record date will be entitled to receive and retain the Redemption
Price), then, without prejudice to the Purchaser's rights under Section 14, (a)
the purchase price per Share payable by the Purchaser pursuant to the Offer
shall be reduced by the amount of any such cash dividend or cash distribution
and (b) any such noncash dividend, distribution, issuance, proceeds or rights
will be received by the tendering shareholders for the account of the Purchaser
and will be required to be promptly remitted and transferred by each tendering
shareholder to the Depositary for the account of the Purchaser, accompanied by
appropriate documentation of transfer, or (ii) at the direction of the
Purchaser, be exercised for the benefit of the Purchaser, in which case the
proceeds of such exercise will promptly be remitted to the Purchaser. Pending
such remittance and subject to the applicable law, the Purchaser will be
entitled to all rights and privileges as owner of any such noncash dividend,
distribution, issuance, proceeds or right and may withhold the entire purchase
price or deduct from the purchase price the amount or value thereof, as
determined by the Purchaser in its sole discretion.
13. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK EXCHANGE LISTING;
EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS.
Effect of the Offer on the Market for the Shares
The purchase of Shares pursuant to the Offer will reduce the number of
Shares that might otherwise trade publicly and, depending upon the number of
Shares so purchased, could adversely affect the liquidity and market value of
the remaining Shares held by the public. The purchase of Shares pursuant to the
Offer can also be expected to reduce the number of holders of Shares.
Stock Exchange Listing
Depending on the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the requirements for continued listing on the NYSE or
the PSE. According to the Company 10-K, there were 11,792 holders of record of
Shares as of March 18, 1994. According to the NYSE's published guidelines, the
NYSE would consider delisting the Shares if, among other things, the number of
holders of 100 Shares or more were reduced to less than 1,200, the number of
Shares publicly held
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(excluding those held by officers and directors of the Company, members of their
immediate families and persons owning ten percent (10%) or more of the Shares
outstanding ("Excluded Holdings")) were reduced to less than 600,000 or the
aggregate market value of publicly held Shares (exclusive of Excluded Holdings)
were reduced to less than $5,000,000. The PSE has similar guidelines based on
the number of holders and the number and market value of publicly held Shares.
If, as a result of the purchase of Shares pursuant to the Offer or otherwise,
the Shares no longer meet the requirements of the NYSE or the PSE for continued
listing and/or trading and such trading of the Shares were discontinued, the
market for the Shares could be adversely affected.
In the event that the Shares were no longer listed or traded on the NYSE or
the PSE, it is possible that the Shares would trade on another securities
exchange or in the over-the-counter market and that price quotations would be
reported by such exchange, through the National Association of Securities
Dealers Automated Quotation System ("NASDAQ"), or other sources. Such trading
and the availability of such quotations would, however, depend upon the number
of shareholders and/or the aggregate market value of the Shares remaining at
such time, the interest in maintaining a market in the Shares on the part of
securities firms, the possible termination of registration of the Shares under
the Exchange Act as described below, and other factors. The Purchaser cannot
predict whether the reduction in the number of Shares that might otherwise trade
publicly would have an adverse or beneficial effect on the market price for, or
marketability of, the Shares or whether it would cause future market prices to
be greater or less than the Offer Price.
Exchange Act Registration
The Shares are currently registered under the Exchange Act. The purchase of
the Shares pursuant to the Offer may result in the Shares becoming eligible for
deregistration under the Exchange Act. Registration of the Shares may be
terminated upon application of the Company to the Commission if the Shares are
not listed on a "national securities exchange" and there are fewer than 300
record holders of Shares. Termination of registration of the Shares under the
Exchange Act would substantially reduce the information required to be furnished
by the Company to its shareholders and the Commission and would make certain
provisions of the Exchange Act, such as the short-swing profit recovery
provisions of Section 16(b) and the requirements of furnishing a proxy statement
in connection with shareholders' meetings pursuant to Section 14(a), no longer
applicable to the Company. If the Shares are no longer registered under the
Exchange Act, the requirements of Rule 13e-3 under the Exchange Act with respect
to "going private" transactions would no longer be applicable to the Company.
Furthermore, the ability of "affiliates" of the Company and persons holding
"restricted securities" of the Company to dispose of such securities pursuant to
Rule 144 promulgated under the Securities Act of 1933, as amended, may be
impaired or eliminated. If, as a result of the purchase of Shares pursuant to
the Offer, the Company is no longer required to maintain registration of the
Shares under the Exchange Act, the Purchaser intends to cause the Company to
apply for termination of such registration. See Section 11.
Based on publicly available information, as of the date of this Offer to
Purchase, the Rights are registered under the Exchange Act and are listed on the
NYSE, but are attached to the Shares and are not separately transferable. Upon
the occurrence of the Distribution Date, the Rights are to detach, and may trade
separately. The Rights Agreement provides that Parent's commencement of the
Offer may result in the occurrence of a Distribution Date as early as March 13,
1995. See Section 11. If the Distribution Date occurs and the Rights separate
from the Shares, the foregoing discussion with respect to the effect of the
Offer on the market for the Shares, stock exchange listings and Exchange Act
registration would apply to the Rights in a similar manner.
If registration of the Shares is not terminated prior to the Proposed
Merger, then the Shares will be delisted from all stock exchanges and the
registration of the Shares under the Exchange Act will be terminated following
the consummation of the Proposed Merger. In addition, if registration of the
Shares under the Exchange Act were terminated, the Shares would no longer be
eligible for NASDAQ reporting.
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Margin Regulations
The Shares are presently "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve Board"),
which has the effect, among other things, of allowing brokers to extend credit
on the collateral of such Shares for the purpose of buying, carrying or trading
in securities ("Purpose Loans"). Depending on factors such as the number of
record holders of the Shares and the number and market value of publicly held
Shares, following the purchase of Shares pursuant to the Offer, the Shares might
no longer constitute "margin securities" for purposes of the Federal Reserve
Board's margin regulations and, therefore, could no longer be used as collateral
for Purpose Loans. In addition, if registration of the Shares under the Exchange
Act were terminated, the Shares would no longer constitute "margin securities".
14. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, and in addition to, and
not in limitation of, the Purchaser's right to extend or amend the Offer at any
time in its sole discretion, the Purchaser shall not be required to accept for
payment or, subject to any applicable rules and regulations of the Commission,
including Rule 14e-1(c) under the Exchange Act (relating to the Purchaser's
obligation to pay for or return tendered Shares promptly after termination or
withdrawal of the Offer), to pay for any Shares tendered and may postpone the
acceptance for payment or, subject to the restriction referred to above, payment
for any Shares tendered, and may amend or terminate the Offer (whether or not
any Shares have theretofore been accepted for payment) if, in the sole judgment
of the Purchaser, (i) at or before the Expiration Date any one or more of the
Minimum Condition, the Rights Condition, the Business Combination Condition, the
Control Share Condition or the Financing Condition shall not have been
satisfied; or (ii) at any time on or after March 3, 1995, and before acceptance
for payment of, or payment for, such Shares any of the following events shall
occur or shall be deemed by Parent or the Purchaser to have occurred:
(a) there shall have been threatened, instituted or pending any action,
proceeding, application or counterclaim by or before any court or
government, regulatory or administrative agency, authority or tribunal,
domestic, foreign or supranational (other than actions, proceedings,
applications or counterclaims filed or initiated by Parent or the
Purchaser), which (i) seeks to challenge the acquisition by the Purchaser of
the Shares or Rights, restrain, prohibit or delay the making or consummation
of the Offer or the Proposed Merger or any other merger or business
combination involving the Purchaser or any of its affiliates and the Company
or any of its subsidiaries, prohibit the performance of any of the contracts
or other agreements entered into by Parent or any of its affiliates in
connection with the acquisition of the Company, or obtain any damages in
connection with any of the foregoing, (ii) seeks to make the purchase of, or
payment for, some or all of the Shares or Rights pursuant to the Offer, the
Proposed Merger or otherwise, illegal, (iii) seeks to impose limitations on
the ability of the Purchaser, Parent or the Company or any of their
respective affiliates or subsidiaries effectively to acquire or hold, or
requiring the Purchaser, Parent or the Company or any of their respective
affiliates or subsidiaries to continue to conduct, own or operate all or any
portion of their businesses and assets as heretofore conducted, owned or
operated, (iv) seeks to impose or may result in material limitations on the
ability of the Purchaser or Parent or their affiliates to exercise full
rights of ownership of the Shares purchased by them, including, but not
limited to, the right to vote the Shares purchased by them on all matters
properly presented to the shareholders of the Company, or the right to vote
any shares of capital stock of any subsidiary directly or indirectly owned
by the Company, (v) may result in a material diminution in the benefits
expected to be derived by the Purchaser and Parent as a result of the
transactions contemplated by the Offer, (vi) seeks to impose voting,
procedural, price or other requirements in addition to those under the ORC
and federal securities laws (each as in effect on the date of this Offer to
Purchase) or any material condition to the Offer that is unacceptable to the
Purchaser or Parent, (vii) challenges or adversely affects the financing of
the Offer or the Proposed Merger or (viii) in the sole judgment of the
Purchaser, may materially adversely affect the business,
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properties, assets, liabilities, capitalization, shareholders' equity,
condition (financial or other), operations, licenses or franchises, results
of operations or prospects of the Company or any of its subsidiaries, joint
ventures or partnerships or the value of the Shares to the Purchaser; or
(b) other than the application of any waiting periods under the HSR Act
or Canada's Competition Act, and the necessity for approvals and other
actions by any domestic, foreign or supranational, governmental,
administrative or regulatory agency, authority or tribunal described in
paragraph (k) below, there shall have been proposed, sought, promulgated,
enacted, entered, enforced or deemed applicable to the Offer or the Proposed
Merger by any domestic, foreign or supranational, governmental,
administrative or regulatory agency, authority or tribunal, any statute,
rule, regulation, judgement, decree, order or injunction that might,
directly or indirectly, result in any of the consequences referred to in
clauses (i) through (viii) of paragraph (a) above; or
(c) any change (or any condition, event or development involving a
prospective change) shall have occurred or be threatened in the business,
properties, assets, liabilities, capitalization, shareholders' equity,
condition (financial or otherwise), operations, licenses or franchises,
results of operations or prospects of the Company or any of its
subsidiaries, or in general economic or financial market conditions in the
United States or abroad, which are or may be materially adverse to the
Company or any of its subsidiaries or its shareholders, or the market price
of or trading in, the Shares, or the Purchaser shall have become aware of
any facts which are or may be materially adverse with respect to the value
of the Company or any of its subsidiaries or the value of the Shares to the
Purchaser and Parent or any of their affiliates; or
(d) there shall have occurred: (i) any general suspension of trading in,
or limitation on prices for, securities on any national securities exchange
or in the over-the-counter market in the United States, (ii) the declaration
of a banking moratorium or any suspension of payments in respect of banks in
the United States or Italy, (iii) any material adverse change (or any
existing or threatened condition, event or development involving a
prospective material adverse change) in United States or Italian or any
other currency exchange rates or a suspension of, or a limitation on,
Italian or other markets therefor, (iv) the commencement of a war, armed
hostilities or other international or national calamity directly or
indirectly involving the United States or Italy, (v) any limitations
(whether or not mandatory) imposed by any governmental authority on, or any
event which might have material adverse significance with respect to, the
nature or extension of credit or further extension of credit by banks or
other lending institutions, (vi) any significant adverse change in
securities or financial markets in the United States or abroad, including,
without limitation, a decline of at least fifteen (15%) percent in either
the Dow Jones Average of Industrial Stocks or the Standard & Poor's 500
Index from that existing at the close of business on March 2, 1995, or (vii)
in the case of any of the foregoing existing as of the date hereof, a
material acceleration or worsening thereof; or
(e) the Company or any of its subsidiaries shall have (i) issued,
distributed, pledged or sold, or authorized, proposed or announced the
issuance, distributing, pledge or sale of (A) any shares of capital stock of
any class (including, without limitation, the Shares), or securities
convertible into or exchangeable for any such shares, or any rights (other
than the Rights), warrants, or options to acquire any such shares or
convertible or exchangeable securities, other than the issuance of Shares
reserved for issuance on January 29, 1994 pursuant to the exercise of then
outstanding stock options or the Employee Stock Purchase Plan of the Company
(in each case in accordance with the publicly disclosed terms thereof on
such date) or (B) any other securities in respect of, in lieu of, or in
substitution for, Shares outstanding on March 2, 1995, (ii) purchased or
otherwise acquired or caused a reduction in, or proposed or offered to
purchase or otherwise acquire, any Shares or other securities of the Company
(except for redemption of the Rights in accordance with the terms of the
Rights Agreement), (iii) declared or paid any dividend or distribution on
any shares of capital stock (other than a distribution of the Rights
Certificates in accordance with the terms of the Rights Agreement or regular
cash quarterly dividends not in excess of $0.08 per Share, having
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customary and usual record and payment dates and, in the event the Rights
are redeemed, the Redemption Price), or issued, or authorized, recommended
or proposed the issuance of, or any other distribution in respect of, any
share of capital stock, whether payable in cash, securities or other
property, or altered or proposed to alter any material term of any
outstanding security, (iv) issued, distributed or sold, or authorized or
proposed the issuance, distribution or sale of any debt securities or any
securities convertible into or exchangeable for debt securities or any
rights, warrants or options entitling the holder thereof to purchase or
otherwise acquire any debt securities, or incurred, or authorized or
proposed the incurrence of, any debt other than in the ordinary course of
business and consistent with past practice, or any debt containing
burdensome covenants, (v) authorized, recommended, proposed or publicly
announced its intention to enter into or cause (A) any merger (other than
the Proposed Merger), consolidation, liquidation, dissolution, business
combination, joint venture, acquisition of assets or securities (other than
a redemption of the Rights) or disposition of assets or securities other
than in the ordinary course of business or in respect of which the Company
has made a public announcement prior to March 3, 1995, (B) any material
change in its capitalization, (C) any release or relinquishment of any
material contract rights or (D) any comparable event not in the ordinary
course of business, (vi) taken any material action to implement any such
transaction previously authorized, recommended, proposed or publicly
announced, that in the Purchaser's sole opinion could adversely affect
either the value of the Company or any of its subsidiaries, joint ventures
or partnerships or the value of the Shares to the Purchaser, (vii)
authorized, recommended or proposed or announced its intention to authorize,
recommend or propose any transaction which could adversely affect the value
of the Shares, (viii) proposed, adopted or authorized any amendment (other
than any amendment which delays the Distribution Date or which provides that
Section 831 is inapplicable to the Company) to its Charter or Regulations or
similar organizational documents or the Rights Agreement or (ix) agreed in
writing or otherwise to take any of the foregoing actions, or the Purchaser
or Parent shall have learned about any such action which shall not have been
previously publicly disclosed by the Company; or
(f) a tender or exchange offer for some portion or all of any
outstanding securities of the Company or any of its subsidiaries (including
the Shares or Rights) shall have been publicly proposed to be made or shall
have been made by another person (including the Company or any of its
subsidiaries or affiliates), or it shall have been publicly disclosed or the
Purchaser or Parent shall have learned that (i) any person, entity or
"group" (as defined in Section 13(d)(3) of the Exchange Act) shall have
acquired or proposed to acquire more than five percent (5%) of any class or
series of capital stock of the Company (including the Shares or Rights) or
its subsidiaries or shall have been granted any option or right to acquire
more than five percent (5%) of any class or series of capital stock of the
Company (including the Shares or Rights) or its subsidiaries other than
through acquisition for bona fide arbitrage purposes only or except as
disclosed on a Schedule 13D or 13G on file with the Commission prior to
March 3, 1995 or shall have acquired or proposed to acquire additional
shares of any class or series of capital stock of the Company (including the
Shares or Rights) or its subsidiaries constituting more than one percent
(1%) of such class or series or shall have been granted any option or right
to acquire more than one percent (1%) of such class or series of capital
stock of the Company (including the Shares or Rights) or its subsidiaries,
(ii) any group shall have been formed which beneficially owns more than five
percent (5%) of any class or series of capital stock of the Company
(including the Shares or Rights) or its subsidiaries, (iii) any person,
entity or group shall have entered into a definitive agreement or any
agreement in principle or made a proposal with respect to a tender offer or
exchange offer for the Shares or Rights or a merger, consolidation or other
business combination with or involving the Company or its subsidiaries, or
(iv) any person, entity or group shall have filed a Premerger Notification
and Report Form under the HSR Act in order to, or made a public announcement
reflecting an intent to, acquire the Company or assets or securities of the
Company or its subsidiaries; or
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(g) (i) the Company, the Purchaser and Parent shall have reached an
agreement or understanding that the Offer be terminated or amended or the
payment for Shares be postponed, or (ii) the Purchaser, Parent or any of its
affiliates shall have entered into a definitive agreement or announced an
agreement in principle with respect to the Proposed Merger or any other
business combination with the Company or any of its affiliates or the
purchaser of any material portion of the securities or assets of the Company
or any of its subsidiaries; or
(h) the Company or any of its subsidiaries shall have entered into any
employment, severance or similar agreement, arrangement or plan with or for
the benefit of any of its employees or entered into or amended any
agreements, arrangement or plans so as to provide for increased or
accelerated payment or funding of the benefits to any such employees as a
result of or in connection with the transactions contemplated by the Offer
or otherwise amended any such agreement, arrangement or plan to make the
same more favorable to any such employee, or the Purchaser or Parent shall
have learned about any such action which shall not have been previously
publicly disclosed by the Company; or
(i) the Purchaser or Parent shall become aware (i) that any material
contractual right of the Company or any of its subsidiaries shall be
impaired or otherwise adversely affected or that any material amount of
indebtedness of the Company or any of its subsidiaries shall become
accelerated or otherwise become due or become subject to acceleration prior
to its stated due date, in any case with or without notice or the lapse of
time or both, as a result of or in connection with the transactions
contemplated by the Offer or the Proposed Merger or (ii) or any covenant,
term or condition in any of the Company's or any of its subsidiaries'
instruments of agreements that has or may have (whether considered alone or
in the aggregate with other covenants, terms or conditions) a material
adverse effect on (x) the business, properties, assets, liabilities,
capitalization, shareholders' equity, condition (financial or otherwise),
operations, licenses or franchises, results of operations or prospects of
the Company or any of its subsidiaries (including, but not limited to, any
event of default that may ensue as a result of the consummation of the Offer
or the acquisition of control of the Company or any of its subsidiaries) or
(y) the value of the Shares in the hands of Parent, the Purchaser or any
other affiliate of Parent or (z) the consummation by the Purchaser or any of
its affiliates of the Proposed Merger or any other business combination
involving the Company; or
(j) except as may be required law, the Company or any of its
subsidiaries shall have taken any action to terminate or amend any employee
benefit plan (as defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended) of the Company or any of its subsidiaries
or the Purchaser shall have learned of any such action or possible action
which shall not have been previously publicly disclosed by the Company; or
(k) any waiting periods under the HSR Act applicable to the purchase of
the Shares pursuant to the Offer shall not have expired or been terminated,
any waiting periods under Canada's Competition Act applicable to the
purchase of the Shares pursuant to the Offer shall not have expired or been
terminated, or any other approval, permit, authorization, consent or other
action of any domestic (federal or state), foreign or supranational
governmental, administrative or regulatory agency, authority or tribunal
(including those described in Section 15) shall not have been obtained on
terms satisfactory to Parent in its sole discretion.
The foregoing conditions are for the sole benefit of the Purchaser, Parent
and their affiliates and may be asserted by the Purchaser or Parent, in their
sole discretion, regardless of the circumstances (including, without limitation,
any action or inaction by the Purchaser or Parent or their affiliates) giving
rise to any such condition or may be waived by the Purchaser or Parent in whole
or in part from time to time in their sole discretion. The failure by the
Purchaser or Parent at any time to exercise any of the foregoing rights shall
not be deemed a waiver of any such right and each such right shall be deemed an
ongoing right and may be asserted at any time and from time to time. Any
determination by the Purchaser or Parent concerning any of the events described
in this Section 14 shall be final and binding.
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15. CERTAIN LEGAL MATTERS; REQUIRED REGULATORY APPROVALS.
General. Except as set forth in this Offer to Purchase, based on a review of
publicly available filings by the Company with the Commission and other publicly
available information regarding the Company, the Purchaser and Parent are not
aware of any licenses or regulatory permits that appear to be material to the
business of the Company and is subsidiaries, taken as a whole, and that might be
adversely affected by the Purchaser's acquisition of Shares (and the indirect
acquisition of the stock of the Company's subsidiaries) as contemplated herein,
or any filings, approvals or other actions by or with any domestic, foreign or
supranational governmental authority or administrative or regulatory agency that
would be required prior to the acquisition of Shares (or the indirect
acquisition of the stock of the Company's subsidiaries) by the Purchaser
pursuant to the Offer as contemplated herein. Should any such approval or other
action be required, there can be no assurance that any such additional approval
or action, if needed, would be obtained without substantial conditions or that
adverse consequences might not result to the Company's business, or that certain
parts of the Company's or Parent's business might not have to be disposed of or
held separate or other substantial conditions complied with in order to obtain
such approval. The Purchaser's obligation to purchase and pay for Shares is
subject to certain conditions, including conditions with respect to litigation
and governmental actions. See Section 14 for certain conditions to the Offer
including with respect to litigation and governmental actions.
Ohio Business Combination Law. The Ohio Business Combination Law provides
that an issuing public corporation shall not engage in certain business
combinations (including mergers) with an "Interested Shareholder" (generally, a
person entitled to control ten percent (10%) or more of the outstanding voting
shares of the issuing public corporation in the election of directors) for a
period of three years following the date such person became an Interested
Shareholder (the "three year date"). This restriction does not apply if prior to
the date such person became an Interested Shareholder, the board of directors of
the corporation approved either the business combination or the transaction
which resulted in the Interested Shareholder becoming an Interested Shareholder.
The Ohio Business Combination Law further provides that after the expiration of
the three year date, an issuing public corporation may not engage in a business
combination (including a merger) unless: (i) prior to the date a person became
an Interested Shareholder, the directors of the corporation had approved the
purchase of shares by the Interested Shareholder; (ii) the business combination
is approved by both (x) at least two-thirds of all shareholders and (y) at least
a majority of the disinterested shareholders; and (iii) the consideration used
in such business combination, both in price and form, meets certain tests to
insure that such consideration is at least equal to each of (x) the amount paid,
or to be received, by the Interested Shareholder, (y) the fair market value on
the date a person becomes an Interested Shareholder and (z) the fair market
value on the announcement date of the business combination.
Parent and the Purchaser are requesting that the Company's Board of
Directors adopt a resolution providing that the Ohio Business Combination Law is
not applicable to the acquisition of Shares pursuant to the Offer or the
Proposed Merger. In order to increase the likelihood that the Board of Directors
adopts a resolution providing that the Ohio Business Combination Law is not
applicable to the acquisition of Shares pursuant to the Offer and the Proposed
Merger, Parent and the Purchaser have taken preliminary steps to commence a
solicitation of agent designations for the calling of the Special Meeting at
which, among other things, Parent and the Purchaser will propose that the
holders of Shares remove all of the incumbent directors of the Company and elect
the nominees of the Purchaser as directors to fill the vacancies created
thereby. The nominees of the Purchaser will, if elected at the Special Meeting,
and subject to their fiduciary duties, be committed to ensuring that a
resolution is adopted providing that the Ohio Business Combination Law is not
applicable to the acquisition of Shares pursuant to the Offer and the Proposed
Merger.
THE PURCHASER CURRENTLY CONTEMPLATES THAT SHARES WILL NOT BE ACCEPTED FOR
PAYMENT PURSUANT TO THE OFFER UNTIL THE BOARD OF DIRECTORS
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OF THE COMPANY HAS ADOPTED A RESOLUTION PROVIDING THAT THE OHIO BUSINESS
COMBINATION LAW IS NOT APPLICABLE TO THE ACQUISITION OF SHARES PURSUANT TO THE
OFFER OR THE PROPOSED MERGER, UNLESS THE PURCHASER, IN ITS SOLE DISCRETION, IS
SATISFIED THAT AFTER CONSUMMATION OF THE OFFER THE RESTRICTIONS CONTAINED IN THE
OHIO BUSINESS COMBINATION LAW WILL NOT APPLY TO THE PROPOSED MERGER.
Ohio Control Share Acquisition Law. Section 831 provides that unless the
articles of incorporation or the regulations of an issuing public corporation
provide otherwise, any control share acquisition of such corporation shall be
made only with the prior authorization of the shareholders. An "issuing public
corporation" is a corporation organized for profit under the laws of Ohio, with
fifty (50) or more shareholders, that has its principal place of business,
principal executive offices or substantial assets in Ohio, and as to which there
is no close corporation agreement in existence.
A "control share acquisition" means the acquisition, directly or indirectly,
by any person of shares of an issuing public corporation that, when added to all
other shares of the issuing public corporation in respect of which such person
may exercise or direct the exercise of voting power would entitle such person,
immediately after such acquisition, directly or indirectly, alone or with
others, to control any of the following ranges of the voting power of such
issuing public corporation in the election of directors: (a) one-fifth or more
but less than one-third of such voting power; (b) one-third or more but less
than a majority of such voting power; or (c) a majority or more of such voting
power. An acquisition of shares of an issuing public corporation, however, does
not constitute a control share acquisition if, among other things, the
acquisition is consummated pursuant to a merger or consolidation effected in
compliance with Sections 1701.78 or 1701.83 of the ORC if the issuing public
corporation is the surviving or new corporation in the merger or consolidation
or is the acquiring corporation in the combination or majority share
acquisition.
Any person who proposes to make a control share acquisition must deliver an
"acquiring person statement" to the issuing public corporation, which statement
shall include: (a) the identity of the acquiring person; (b) a statement that
the acquiring person statement is being delivered pursuant to Section 831; (c)
the number of shares of the issuing public corporation owned, directly or
indirectly, by such acquiring person; (d) the range of voting power in the
election of directors under which the proposed acquisition would, if
consummated, fall (i.e., in excess of 20%, 33-1/3% or 50%); (e) a description of
the terms of the proposed acquisition; and (f) representations of the acquiring
person that the acquisition will not be contrary to the law and that such
acquiring person has the financial capacity to make the proposed acquisition
(including the facts upon which such representations are based).
Within ten (10) days of receipt of a qualifying acquiring person statement,
the directors of the issuing public corporation must call a special shareholders
meeting to vote on the proposed acquisition. Unless the acquiring person
otherwise agrees, the meeting must be held within fifty (50) days of receipt of
such statement. However, the acquiring person may, and Parent and the Purchaser
did, request, at the time of delivery of the acquiring person statement, that
the meeting not be held sooner than thirty (30) days after the receipt of such
statement. The special meeting cannot be held later than certain other special
meetings of shareholders called by the corporation in compliance with the ORC
after receipt of a qualifying acquiring person statement.
The issuing public corporation is required to send a notice of the special
meeting as promptly as reasonably practicable to all shareholders of record as
of the record date set for such meeting, together with a copy of the acquiring
person statement and a statement of the issuing public corporation, authorized
by its directors, of its position or recommendation, or that it is taking no
position, with respect to the proposed control share acquisition.
The acquiring person may make the proposed control share acquisition only if
(a) at a meeting at which a quorum is present, a majority of the voting power
entitled to vote in the election of directors
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represented (in person or by proxy) at such meeting and a majority of such
voting power excluding "Interested Shares," authorize the control share
acquisition and (b) such acquisition is consummated, in accordance with the
terms so authorized, within 360 days following such authorization. "Interested
Shares" means shares as to which any of the following may exercise or direct the
exercise of voting power in the election of directors: (i) an acquiring person;
(ii) an officer elected or appointed by the directors of the issuing public
corporation; or (iii) any employee of the issuing public corporation who is also
a director of such corporation. "Interested Shares" also means shares of the
issuing public corporation acquired, directly or indirectly, by any person or
group for valuable consideration during the period beginning with the date of
the first public disclosure of a proposed control share acquisition of the
issuing public corporation or any proposed merger, consolidation or other
transaction which would result in a change in control of the corporation or all
or substantially all of its assets, and ending on the date of any special
meeting of the corporation's shareholders held thereafter pursuant to Section
831 for the purpose of voting on a control share acquisition proposed by an
acquiring person, if either of the following apply: (i) the aggregate
consideration paid or otherwise given by the person who acquired the shares, and
any other persons acting in concert with it, for all shares exceeds $250,000 or
(ii) the number of shares acquired by the person who acquired the shares, and
any other persons acting in concert with it, exceeds 1/2 of 1% of the
outstanding shares of the corporation entitled to vote in the election of
directors (such Interested Shares are referred to herein as "Disqualified
Shares").
Dissenters' rights are not available to shareholders of an issuing public
corporation in connection with the authorization of a control share acquisition.
Without waiving their right to challenge the validity of all or any part of
Section 831 or to seek an amendment to the Company's Regulations opting out of
Section 831, and reserving their right to take actions inconsistent with the
applicability of Section 831, Parent and the Purchaser delivered to the Company
on March 3, 1995 an acquiring person statement relating to the Offer. Pursuant
to Section 831, Parent and the Purchaser have requested that the Section 831
Meeting not be held for at least thirty (30) days after receipt of the acquiring
person statement. Accordingly, the Section 831 Meeting must be held no earlier
than April 2, 1995 and no later than April 22, 1995. Parent and the Purchaser
brought an action for declaratory and other relief against the Company on March
3, 1995 in the United States District Court for the Southern District of Ohio,
Eastern Division, seeking, among other things, an order declaring that the
provisions of Section 831 which impair the voting rights of the Disqualified
Shares at the Section 831 Meeting are unconstitutional or otherwise invalid as
such provisions may be applied to the Offer.
THE PURCHASER CURRENTLY CONTEMPLATES THAT SHARES WILL NOT BE ACCEPTED FOR
PAYMENT PURSUANT TO THE OFFER UNTIL THE ACQUISITION BY THE PURCHASER OF SHARES
PURSUANT TO THE OFFER IS AUTHORIZED BY THE SHAREHOLDERS OF THE COMPANY AT THE
SECTION 831 MEETING, UNLESS THE PURCHASER, IN ITS SOLE DISCRETION, IS SATISFIED
THAT THE PROVISIONS OF SECTION 831 ARE INVALID OR INAPPLICABLE TO SUCH
ACQUISITION. SEE SECTION 14.
State Takeover Laws. A number of states (including Ohio, where the Company
is incorporated and headquartered) have adopted takeover laws and regulations
which purport, to varying degrees, to be applicable to attempts to acquire
securities of corporations which are incorporated in such states or which have
substantial assets, security holders, principal executive offices or principal
places of business therein. The Company and certain of its subsidiaries conduct
business in a number of states throughout the United States, some of which have
enacted takeover statutes. The Purchaser does not know whether any or all of
these statutes will by their terms apply to the Offer. To the extent that
certain provisions of certain of these state takeover statutes purport to apply
to the Offer, the Purchaser believes that such laws conflict with federal law
and constitute an unconstitutional burden on interstate commerce. In 1982, the
Supreme Court of the United States, in Edgar v. Mite Corp., invalidated on
constitutional grounds the Illinois Business Takeovers Statue, which as a matter
of state securities law, made
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takeovers of corporations meeting certain requirements more difficult, and the
reasoning in such decision is likely to apply to certain other state takeover
statutes. In 1987, however, in CTS Corp. v Dynamics Corp. of America, the
Supreme Court of the United States held that the State of Indiana could, as a
matter of corporate law and, in particular, those aspects of corporate law
concerning corporate governance, constitutionally disqualify a potential
acquiror from voting on the affairs of a target corporation without the prior
approval of the remaining stockholders, provided that such laws were applicable
only under certain conditions. Subsequently, in TLX Acquisition Corp. v Telex
Corp., a Federal district court in Oklahoma ruled that the Oklahoma statutes
were unconstitutional insofar as they apply to corporations incorporated outside
Oklahoma in that they would subject such corporations to inconsistent
regulations. Similarly, in Tyson Foods, Inc. v McReynolds, a Federal district
court in Tennessee ruled that four Tennessee takeover statutes were
unconstitutional as applied to corporations incorporated outside Tennessee. This
decision was affirmed by the United States Court of Appeals for the Sixth
Circuit. In December, 1988, a Federal district court in Florida held in Grand
Metropolitan PLC v. Butterworth that the provisions of the Florida Affiliated
Transactions Act and the Florida Control Share Acquisition Act were
unconstitutional as applied to corporations incorporated outside of Florida.
Except as described herein, the Purchaser has not attempted to comply with
any state takeover statutes in connection with the Offer. The Purchaser reserves
the right to challenge the validity or applicability of any state law allegedly
applicable to the Offer and nothing in this Offer to Purchase nor any action
taken in connection herewith is intended as a waiver of that right. In the event
that any state takeover statute is found applicable to the Offer, the Purchaser
might be unable to accept for payment or purchase Shares tendered pursuant to
the Offer or be delayed in continuing or consummating the Offer. In such case,
the Purchaser may not be obligated to accept for purchase or pay for any Shares
tendered. See Section 14.
Ohio Take-Over Act. Sections 1707.041, 1707.042, 1707.23 and 1707.26 of the
Ohio Revised Code (collectively, the "Ohio Take-Over Act") regulate tender
offers. The Ohio Take-Over Act applies to the purchase of or offer to purchase
any equity security of a subject company from a resident of Ohio if, after the
purchase, the offeror would directly or indirectly be the beneficial owner of
more than ten percent (10%) of any class of issued and outstanding equity
securities of the Company (a "control bid"). A subject company includes an
issuer, such as the Company, that either has its principal place of business or
principal executive offices located in Ohio or owns or controls assets located
in Ohio that have a fair market value of at least one million dollars, and that
has more than one thousand beneficial or record equity security holders who
reside in Ohio. A subject company, however, need not be incorporated in Ohio.
Notwithstanding the definition of subject company contained in the Ohio Take-
Over Act, the Ohio Division of Securities (the "Ohio Division"), by rule or an
adjudicatory proceeding, may make a determination that an issuer does not
constitute a subject company if appropriate review of control bids involving the
issuer is to be made by any regulatory authority of another jurisdiction. The
Ohio Division has not adopted any rules under this provision.
The Ohio Take-Over Act prohibits an offeror from making a control bid for
securities of a subject company pursuant to a tender offer until the offeror has
filed specified information with the Ohio Division. In addition, the offeror is
required to deliver a copy of such information to the subject company not later
than the offeror's filing with the Ohio Division and to send or deliver such
information and the material terms of the proposed offer to all offerees in Ohio
as soon as practicable after the offeror's filing with the Ohio Division.
Within three calendar days of such filing, the Ohio Division may by order
summarily suspend the continuation of the control bid if it determines that the
offeror has not provided all of the specified information or that the control
bid materials provided to offerees do not provide full disclosure of all
material information concerning the control bid. If the Ohio Division summarily
suspends a control bid, it must schedule and hold a hearing within ten calendar
days of the date on which the suspension is
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imposed and must make its determination within three calendar days after the
hearing has been completed but no later than sixteen calendar days after the
date on which the suspension is imposed. The Ohio Division may maintain its
suspension of the continuation of the control bid if, based upon the hearing, it
determines that all of the information required to be provided by the Ohio
Take-Over Act has not been provided by the offeror, that the control bid
materials provided to offerees do not provide full disclosure of all material
information concerning the control bid, or that the control bid is in material
violation of any provision of the Ohio securities laws. If, after the hearing,
the Ohio Division maintains the suspension, the offeror has the right to correct
the disclosure and other deficiencies identified by the Ohio Division and to
reinstitute the control bid by filing new or amended information pursuant to the
Ohio Take-Over Act.
The Purchaser and Parent are not aware of any judicial decision with respect
to the constitutionality of the Ohio Take-Over Act, as amended in April, 1990.
On March 3, 1995, Parent and the Purchaser commenced an action in the United
States District Court for the Southern District of Ohio, Eastern Division,
against the Company, the Commissioner of Securities of the Ohio Division of
Securities and the Director of Commerce of the Ohio Department of Commerce. The
complaint seeks, among other things, a declaration that the Ohio Take-Over Act,
as amended in April, 1990, is unconstitutional as applied to the Offer, and
temporary, preliminary and permanent injunctive relief against its enforcement.
Nevertheless, without prejudice to its position that the Ohio Take-Over Act is
unconstitutional or conceding its applicability, on March 3, 1995, Parent and
the Purchaser submitted a copy of the Schedule 14D-1 relating to the Offer to
the Ohio Division. If injunctive relief is not obtained against the enforcement
of the Ohio Take-Over Act and the Ohio Division takes action under the Ohio
Take-Over Act, then the Purchaser may not be obligated to accept for payment or
pay for Shares tendered pursuant to the Offer or may, among other things,
terminate the Offer or amend the terms and conditions of the Offer. See Section
14.
Other Pending Litigation Claims. The action commenced by Parent and the
Purchaser in the United States District Court for the Southern District of Ohio,
Eastern Division, also seeks, among other things, an order declaring that the
incumbent directors of the Company have breached their fiduciary duties by
issuing the Rights and by failing to redeem the Rights or failing to determine
that the Rights are inapplicable to the Offer and to the Proposed Merger.
Antitrust. Under the HSR Act, and the rules and regulations that have been
promulgated thereunder by the Federal Trade Commission (the "FTC"), certain
acquisition transactions may not be consummated until certain information and
documentary material has been furnished for review by the Antitrust Division of
the Department of Justice (the "Antitrust Division") and the FTC and certain
waiting period requirements have been satisfied. The acquisition of shares
pursuant to the Offer is, and the Proposed Merger may be, subject to such
requirements. Parent is filing on March 3, 1995, a Premerger Notification and
Report Form with the Antitrust Division and the FTC in connection with the
purchase of Shares pursuant to the Offer and the Proposed Merger.
Under the provisions of the HSR Act applicable to the Offer, the purchase of
Shares pursuant to the Offer may not be consummated until the expiration of a
fifteen calendar day waiting period following the filing by Parent, unless such
waiting period is earlier terminated by the FTC and the Antitrust Division.
Accordingly, the waiting period under the HSR Act which is applicable to the
Offer will expire at 11:59 p.m., New York City time, on March 18, 1995, unless
earlier terminated by the Antitrust Division and the FTC or Parent or the
Purchaser receives a request for additional information or documentary material
from the Antitrust Division or the FTC prior thereto. If either the FTC or the
Antitrust Division were to request additional information or documentary
material from Parent, the waiting period would expire at 11:59 p.m., New York
City time, on the tenth calendar day after the date of substantial compliance
with such request. Thereafter, the waiting period could be extended only by
court order or with the consent of Parent. The additional ten calendar day
waiting period may be terminated sooner by the FTC and the Antitrust Division.
Although the Company is required to file
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certain information and documentary material with the Antitrust Division and the
FTC in connection with the Offer, neither the Company's failure to make such
filings nor a request from the Antitrust Division or the FTC for additional
information or documentary material made to the Company will extend the waiting
period.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the acquisition of Shares by the
Purchaser pursuant to the Offer and the Proposed Merger. At any time before or
after the Purchaser's purchase of Shares, the Antitrust Division or the FTC may
scrutinize the legality under the antitrust laws of the acquisition of Shares by
the Purchaser pursuant to the Offer and the Proposed Merger. At any time before
or after the Purchaser's purchase of Shares, the Antitrust Division or the FTC
could take such actions under the antitrust laws as either deems necessary or
desirable in the public interest, including seeking to enjoin the purchase of
Shares pursuant to the Offer, the divestiture of Shares purchased thereunder or
the divestiture of substantial assets of the Company or Parent. Private parties
as well as state attorneys general may also bring legal actions under the
antitrust laws under certain circumstance. See Section 14.
Based upon an examination of publicly available information relating to the
businesses in which the Company is engaged, the Purchaser and Parent believe
that the acquisition of Shares pursuant to the Offer and the Proposed Merger
would not violate the antitrust laws. The Purchaser and Parent believe that
retention of all their respective operations should be permitted under the
antitrust laws. Nevertheless, there can be no assurance that a challenge to the
Offer on antitrust grounds will not be made or, if such challenge is made, what
the result will be. See Section 14.
Investment Canada Act. According to the Company 10-K, the Company conducts
certain operations in Canada. The Investment Canada Act (the "ICA") requires
that notice of the acquisition of "control" (as defined in the ICA) by
"non-Canadians" (as defined in the ICA) of any "Canadian business" (as defined
in the ICA) be furnished to Investment Canada, a Canadian governmental agency,
and that certain of these investments be reviewed and approved by the Minister
responsible for the ICA (the "Minister") as an investment that is "likely to be
of net benefit" to Canada based upon criteria set forth in the ICA. An indirect
acquisition of control of a Canadian business, controlled by a WTO investor (as
defined in the ICA), is reviewable only if the Canadian business engages in the
production of uranium and owns an interest in producing uranium property in
Canada, provides any financial service (as defined in the ICA), provides any
transportation service (as may be defined by the regulations to the ICA) or is a
cultural business (as defined in the ICA) or if the value of the assets of the
entity carrying on the Canadian business and of all other entities in Canada,
the control of which is acquired, directly or indirectly, is equal to or greater
than an amount determined by the Minister under the ICA (for 1995 Cdn.$160
million) and is more than fifty per cent of the value of the assets of all
entities the control of which is acquired, directly or indirectly, in the
transaction. The value of the assets of an entity is determined in the manner
prescribed by the ICA. An indirect acquisition is the acquisition of control of
a Canadian business through the acquisition of control of its parent outside
Canada. Under the ICA, the acquisition of a majority of the voting shares of a
corporation is deemed to be an acquisition of control.
Public filings indicate that the Company is a WTO investor and that the
acquisition of the Canadian businesses of the Company would not be reviewable
under the ICA. If this proves to be incorrect, the acquisition of Shares by the
Purchaser pursuant to the Offer may constitute a reviewable acquisition of a
"Canadian business" within the meaning of the ICA. In such event, if, within 45
days of the application being filed (which period can be extended for an
additional 30 days, and in practice, beyond such time), the Minister is not
satisfied that the acquisition is likely to be of "net benefit" to Canada, the
Purchaser could be required under the ICA to divest itself of control of the
Company's Canadian businesses.
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The Purchaser intends to file the required notice under the ICA and, if
necessary, seek the approval of the Minister with respect to the acquisition of
the Canadian businesses as a consequence of the acquisition of Shares pursuant
to the Offer and Proposed Merger.
Canadian Pre-Merger Notification Requirements. Certain provisions of
Canada's Competition Act require pre-notification to the Director of
Investigation and Research (the "Canadian Director") of significant corporate
transactions, such as the acquisition of a large percentage of the stock of a
public company which has Canadian operations, or a merger or consolidation
involving such an entity. Pre-notification is generally required with respect to
a transaction in which the parties to the transaction and their affiliates have
assets in Canada, or annual gross revenues from sales in, from or into Canada,
in excess of Cdn.$400 million and which involves the direct or indirect
acquisition of an operating business, the value of the assets of which, or the
annual gross revenues from sales in or from Canada generated from the assets of
which, exceed Cdn.$35 million. If a transaction is subject to the
pre-notification requirements, notice must be given at least seven days prior to
the completion of the transaction. In the event that the Canadian Director
requires the filing of further information the waiting period can be extended
for an additional twenty-one day period from the time the additional information
is filed and, in practice, with mutual consent even beyond such twenty-one day
period. The Canadian Director may waive the waiting period. After the applicable
waiting period expires or is waived, the transaction may be completed. If the
Canadian Director determines that the transaction would have the effect or
likely effect of substantially lessening or preventing competition in a market,
the Canadian Director may apply to the Competition Tribunal, a special purpose
Canadian tribunal, to, among other things, require the disposition of the
Canadian assets acquired in such transaction or prevent the acquisition thereof
by the Purchaser. The Purchaser intends to file any required notice with respect
to the Offer and the Proposed Merger with the Canadian Director and, to the
extent necessary, observe the applicable waiting period.
Other Foreign Approvals. According to the Company 10-K, the Company also
owns property and conducts business in a number of other foreign countries and
jurisdictions. In connection with the acquisition of the Shares pursuant to the
Offer, the laws of certain of those foreign countries and jurisdictions may
require the filing of information with, or the obtaining of the approval of,
governmental authorities in such countries and jurisdictions. The governments in
such countries and jurisdictions might attempt to impose additional conditions
on the Company's operations conducted in such countries and jurisdictions as a
result of the acquisition of the Shares pursuant to the Offer or the Proposed
Merger. There can be no assurance that the Purchaser will be able to cause the
Company or its subsidiaries to satisfy or comply with such laws or that
compliance or non-compliance will not have adverse consequences for the Company
or any subsidiary after purchase of the Shares pursuant to the Offer or the
Proposed Merger.
16. CERTAIN FEES AND EXPENSES.
CS First Boston Corporation ("CS First Boston") is acting as Dealer Manager
in connection with the Offer and as Parent's exclusive financial advisor with
respect to the proposed acquisition of the Company and certain financial
advisory services in connection with potential divestitures that may occur
thereafter. Parent has agreed to pay CS First Boston a financial advisory fee of
$250,000 (the "Advisory Fee"); a negotiation fee of $750,000 (the "Negotiation
Fee"), payable upon presentation to the Company of a written proposal to effect
the acquisition of the Company by Parent or the commencement of substantive
negotiations in connection with such acquisition; an implementation fee of
$1,000,000 (the "Implementation Fee"), payable upon the earlier of the
commencement of the Offer, the mailing to the Company's shareholders of a
shareholder proxy statement or the date Parent's intention to pursue the
acquisition of the Company becomes a matter of public knowledge; and an
acquisition fee of $10,000,000 (the "Acquisition Fee") payable (i) in the case
of a tender offer, upon the acquisition by Parent of two-thirds (or, in certain
cases, 50%) or more of the Shares or (ii) in the case of a merger, acquisition
or transfer to Parent of all or substantially all of the Company's assets, or
other
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form of acquisition or investment transaction or the acquisition of the
Company's optical business, upon the closing of the transaction. The payment of
each of the Advisory Fee, the Negotiation Fee and the Implementation Fee shall
be credited against the Acquisition Fee. Parent has also agreed to reimburse CS
First Boston (in its capacity as Dealer Manager and financial advisor) for all
out-of-pocket expenses incurred by CS First Boston, including the fees and
expenses of its counsel, and to indemnify CS First Boston against certain
liabilities and expenses in connection with its engagement, including certain
liabilities under the federal securities laws.
Parent has agreed to provide CS First Boston with the first opportunity to
act as exclusive financial advisor, sole arranger, sole underwriter or sole
placement agent for any offering or placement of debt or equity securities which
relate to the acquisition of the Company or its assets by Parent or its
affiliates.
CS First Boston has from time to time rendered, and continues to render,
various investment banking and other advisory services to Parent and its
affiliates for which it is paid its customary fees. In the ordinary course of
business, CS First Boston and its affiliates may actively trade in securities of
the Company for their own account and for the account of their customers, and,
accordingly, may at any time hold a long or short position in such securities.
CS First Boston is an affiliate of Credit Suisse. Credit Suisse has committed to
provide the Facility. See Section 9.
MacKenzie Partners, Inc. has been retained by the Purchaser as Information
Agent in connection with the Offer. The Information Agent may contact holders of
Shares by mail, telephone, telex, telegraph and personal interview and may
request brokers, dealers and other nominee shareholders to forward material
relating to the Offer to beneficial owners. Customary compensation will be paid
for all such services in addition to reimbursement of reasonable out-of-pocket
expenses. The Purchaser has agreed to indemnify the Information Agent against
certain liabilities and expenses, including liabilities under the federal
securities laws.
In addition, Chemical Bank has been retained as the Depositary. The
Depositary has not been retained to make solicitations or recommendations in its
role as depositary. The Depositary will receive reasonable and customary
compensation for its services in connection with the Offer, will be reimbursed
for its reasonable out-of-pocket expenses and will be indemnified against
certain liabilities and expenses in connection therewith.
Except as set forth above, the Purchaser will not pay any fees or
commissions to any broker, dealer or other person (other than the Dealer
Manager) for soliciting tenders of Shares and Rights pursuant to the Offer.
Brokers, dealers, commercial banks and trust companies and other nominees will,
upon request, be reimbursed by the Purchaser for customary clerical and mailing
expenses incurred by them in forwarding materials to their customers.
17. MISCELLANEOUS.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares residing in any jurisdiction in which the making of
the Offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. However, the Purchaser
may, in its discretion, take such actions as it may deem necessary to make the
Offer in any jurisdiction and extend the Offer to holders of Shares in such
jurisdiction. Parent or the Purchaser will apply to the securities regulatory
authorities in Canada for relief from any applicable requirements of securities
legislation and policies in the Canadian provinces. If such relief is not
granted in a province, the Offer will be deemed not to have been made to holders
of Shares in such province nor will tenders be accepted from or on behalf of
such holders.
In any jurisdiction where the securities, blue sky or other laws require the
Offer to be made by a licensed broker or dealer, the Offer will be deemed to be
made on behalf of the Purchaser by the Dealer
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Manager or one or more registered brokers or dealers that are licensed under the
laws of such jurisdiction.
Parent and the Purchaser have filed with the Commission a Tender Offer
Statement on Schedule 14D-1, together with exhibits, pursuant to Rule 14d-3 of
the General Rules and Regulations under the Exchange Act, furnishing certain
additional information with respect to the Offer, and may file amendments
thereto. Such Schedule 14D-1 and any amendments thereto, including exhibits, may
be examined and copies may be obtained from the office of the Commission in the
same manner as described in Section 7 with respect to information concerning the
Company, except that they will not be available at the regional offices of the
Commission.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR PARENT NOT CONTAINED IN THIS OFFER
TO PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, ANY SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
NEITHER THE DELIVERY OF THE OFFER TO PURCHASE NOR ANY PURCHASE PURSUANT TO THE
OFFER, SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF PARENT, THE PURCHASER OR THE COMPANY SINCE THE
DATE AS OF WHICH INFORMATION IS FURNISHED OR THE DATE OF THIS OFFER TO PURCHASE.
LUXOTTICA ACQUISITION CORP.
March 3, 1995
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SCHEDULE I
INFORMATION CONCERNING THE
DIRECTORS AND EXECUTIVE OFFICERS
OF PARENT AND THE PURCHASER
The following table sets forth the name, age, business address, citizenship
and principal occupation or employment at the present time and during the past
five years of each director and executive officer of Parent and the Purchaser.
Unless otherwise noted, each such person is a citizen of the Republic of Italy.
In addition, unless otherwise noted, each such person's business address is
Luxottica Group S.p.A., Via Valcozzena, 10 32021 Agordo (Belluno), Italy.
Directors are indicated with an asterisk. Luxottica S.p.A. and La Meccanoptica
Leonardo S.p.A. ("La Meccanoptica") are wholly owned subsidiaries of Luxottica
Group S.p.A. principally responsible for the design and manufacture of Luxottica
Group S.p.A.'s product line.
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT
<TABLE><CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT, MATERIAL OCCUPATIONS,
OFFICES OR EMPLOYMENTS HELD
NAME DURING PAST FIVE YEARS AND AGE.
- ------------------------------------ -----------------------------------------------------
<S> <C>
Leonardo Del Vecchio*............... Mr. Del Vecchio founded Luxottica Group S.p.A.'s
operations in 1961, has been Chairman of the Board
since 1981 and Chief Executive Officer of Luxottica
Group S.p.A. and its predecessors since 1961. Mr. Del
Vecchio is 60 years old.
Luigi Francavilla*.................. Mr. Francavilla has been a Managing Director and
Chief Operating Officer of Luxottica Group S.p.A.
since 1981 and a Managing Director of Luxottica
S.p.A. since 1977. He also serves as a Director of
several subsidiaries of Luxottica Group S.p.A. Mr.
Francavilla is 58 years old.
Claudio Del Vecchio*................ Mr. Del Vecchio has been a Director of Luxottica
Group S.p.A. since 1981 and in 1994 was appointed as
a Managing Director. Since 1982, he has been the
Executive Vice President of Avant-Garde Optics, Inc.,
Luxottica Group S.p.A.'s United States distributor.
During 1990, he was the Executive Vice President of
Luxottica Group S.p.A. He also serves as a Director
of other subsidiaries of Luxottica Group S.p.A.
Claudio Del Vecchio is the son of Leonardo Del
Vecchio. Mr. Del Vecchio is 38 years old.
Roberto Chemello*................... Mr. Chemello has been a Managing Director of
Luxottica Group S.p.A. since 1985 and serves as
Chairman or as a Director of several of its
subsidiaries. He is also the Chief Financial Officer
of Luxottica Group S.p.A. Mr. Chemello is 41 years
old.
</TABLE>
I-1
<PAGE>
<TABLE><CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT, MATERIAL OCCUPATIONS,
OFFICES OR EMPLOYMENTS HELD
NAME DURING PAST FIVE YEARS AND AGE.
- ------------------------------------ -----------------------------------------------------
<S> <C>
Lucio Rondelli*..................... Mr. Rondelli is the Chairman of G.T.B. Spa (the
company which operates the computerized trading
system of the Italian Stock Exchange); ARCA Spa (a
private mutual fund manager); ARCA Merchant Spa (a
merchant bank); and CENTRO SIM (a private brokerage
company). From April 1969 until 1991 he was Chief
Executive Officer and Managing Director of Credito
Italiano. In 1994, Mr. Rondelli became the Chairman
of the Board of Directors of Credito Italiano. Mr.
Rondelli is 71 years old.
Tancredi Bianchi*................... Mr. Bianchi has been Professor of Credit and Banking
at the Bocconi University since 1978. He is Chairman
of the Italian Banking Association, the Italian
Banking Union Association, and the National
Association of Ordinary Credit Institutions of the
Central Institute of Banks and Bankers. He is
Chairman of Banca Provincia Napoli and Vice President
of Banco San Marco. In addition, Mr. Bianchi is a
member of the Boards of Directors of Credito Emiliano
and Cementerie Monselice. Mr. Bianchi is 67 years
old.
Armando De Pellegrin................ Mr. De Pellegrin has been Technical General Manager
of Luxottica S.p.A. since 1971. Mr. De Pellegrin is
59 years old.
Giancarlo Bertazzo.................. Mr. Bertazzo has been Production General Manager of
La Meccanoptica since 1984. Mr. Bertazzo is 47 years
old.
Giuseppe Vignato.................... Mr. Vignato has been Administrative General Manager
of Luxottica Group S.p.A. since 1987. Mr. Vignato is
43 years old.
Enrico Pizzoni...................... Mr. Pizzoni has been Manager of Export Sales of
Luxottica S.p.A. since 1982. Mr. Pizzoni is a
son-in-law of Mr. Leonardo Del Vecchio. Mr. Pizzoni
is 43 years old.
Umberto Soccal...................... Mr. Soccal joined Luxottica Group S.p.A. in 1988 as
Manager of Information Systems. Mr. Soccal is 45
years old.
Henry Sand.......................... Mr. Sand has been Senior Vice President--Sales and
Marketing of Avant-Garde Optics, Inc. since March
1991 and was Marketing and Special Projects Director
of Avant-Garde Optics, Inc. since 1982. Mr. Sand is a
citizen of the United States of America whose
business address is Avant-Garde Optics, Inc., 44
Harbor Park Drive, Port Washington, New York 11050.
Mr. Sand is 47 years old.
Julien Millet....................... Mr. Millet has been Vice President--Operations of
Avant-Garde Optics, Inc. since March 1991 and was
Operations Director of Avant-Garde Optics, Inc. since
1968. Mr. Millet is a citizen of the United States of
America whose business address is Avant-Garde Optics,
Inc., 44 Harbor Park Drive, Port Washington, New York
11050. Mr. Millet is 58 years old.
</TABLE>
I-2
<PAGE>
<TABLE><CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT, MATERIAL OCCUPATIONS,
OFFICES OR EMPLOYMENTS HELD
NAME DURING PAST FIVE YEARS AND AGE.
- ------------------------------------ -----------------------------------------------------
<S> <C>
Susi Belli.......................... Ms. Belli has been Marketing Manager of Luxottica
Group S.p.A. since March 1993. Since 1990 she has
been Manager of Investor Relations and Public
Relations of Luxottica Group S.p.A. Ms. Belli is 33
years old.
Michael A. Boxer.................... Mr. Boxer has been General Counsel and Director of
Business Affairs of Avant-Garde Optics, Inc. since
August 1993. Before joining Avant-Garde Optics, Inc.
Mr. Boxer was an attorney with the law firm of
Winston & Strawn since 1986. Mr. Boxer is a citizen
of the United States of America whose business
address is Avant-Garde Optics, Inc., 44 Harbor Park
Drive, Port Washington, New York 11050. Mr. Boxer is
33 years old.
</TABLE>
DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER
<TABLE><CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT, MATERIAL OCCUPATIONS,
OFFICES OR EMPLOYMENTS HELD
NAME DURING PAST FIVE YEARS AND AGE
- ------------------------------------ -----------------------------------------------------
<S> <C>
Leonardo Del Vecchio*............... Mr. Del Vecchio has been Chairman of the Board and
Chief Executive Officer of Luxottica Acquisition
Corp. since March 1995. He founded Luxottica Group
S.p.A.'s operations in 1961, has been Chairman of the
Board since 1981 and Chief Executive Officer of
Luxottica Group S.p.A. and its predecessors since
1961. Mr. Del Vecchio is 60 years old.
Claudio Del Vecchio*................ Mr. Del Vecchio has been a Director and President and
Secretary of Luxottica Acquisition Corp. since March
1995. He has been a Director of Luxottica Group
S.p.A. since 1981 and in 1994 was appointed as a
Managing Director. Since 1982, he has been the
Executive Vice President of Avant-Garde Optics, Inc.,
Luxottica Group S.p.A.'s United States distributor.
During 1990, he was the Executive Vice President of
Luxottica Group S.p.A. He also serves as a Director
of other subsidiaries of Luxottica Group S.p.A.
Claudio Del Vecchio is the son of Leonardo Del
Vecchio. Mr. Del Vecchio is 38 years old.
Michael A. Boxer.................... Mr. Boxer has been General Counsel and Assistant
Secretary of Luxottica Acquisition Corp. since March
1995. He has been General Counsel and Director of
Business Affairs of Avant-Garde Optics, Inc. since
August 1993. Before joining Avant-Garde Optics, Inc.
Mr. Boxer was an attorney with the law firm of
Winston & Strawn since 1986. Mr. Boxer is a citizen
of the United States of America whose business
address is Avant-Garde Optics, Inc., 44 Harbor Park
Drive, Port Washington, New York 11050. Mr. Boxer is
33 years old.
</TABLE>
I-3
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
signed, will be accepted. The Letter of Transmittal, certificates for the Shares
and any other required documents should be sent by each shareholder of the
Company or his broker, dealer, commercial bank, trust company or other nominee
to the Depositary as follows:
The Depositary for the Offer is:
CHEMICAL BANK
<TABLE><CAPTION>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand or Overnight Courier:
Chemical Bank (For Eligible Institutions Only) Chemical Bank
Reorganization Department (212) 629-8015 55 Water Street
P.O. Box 3085 or Second Floor-Room 234
G.P.O. Station (212) 629-8016 New York, New York 10041
New York, New York 10116-3055 Confirm by Telephone: Attention:
(212) 946-7137 Reorganization Department
</TABLE>
--------------
Any questions or requests for assistance or additional copies of the Offer
to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may
be directed to the Information Agent or the Dealer Manager at their respective
telephone numbers and locations listed below. You may also contact your broker,
dealer, commercial bank or trust company or other nominee for assistance
concerning the Offer.
The Information Agent for the Offer is:
[LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
CALL TOLL-FREE (800) 322-2885
The Dealer Manager for the Offer is:
CS First Boston Corporation
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
(212) 909-2000 (Call Collect)
LETTER OF TRANSMITTAL
TO TENDER COMMON SHARES
(INCLUDING THE ASSOCIATED PREFERENCE SHARE PURCHASE RIGHTS)
OF
THE UNITED STATES SHOE CORPORATION
at
$24.00 NET PER SHARE
Pursuant to the Offer to Purchase dated March 3, 1995
by
LUXOTTICA ACQUISITION CORP.
an indirect wholly owned subsidiary
of
LUXOTTICA GROUP S.P.A.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON THURSDAY, MARCH 30, 1995,
UNLESS THE OFFER IS EXTENDED
The Depositary for the Offer is:
CHEMICAL BANK
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand or Overnight Courier:
Chemical Bank (For Eligible Institutions only) Chemical Bank
Reorganization Department (212) 629-8015 55 Water Street
P.O. Box 3085 or Second Floor-Room 234
G.P.O. Station (212) 629-8016 New York, New York 10041
New York, New York 10116-3055 Confirm by Telephone: Attention:
(212) 946-7137 Reorganization Department
</TABLE>
<PAGE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used either if certificates evidencing
Shares and/or Rights (each as defined below) are to be forwarded herewith or,
unless an Agent's Message (as defined in the Offer to Purchase) is utilized, if
delivery of Shares and/or Rights is to be made by book-entry transfer to the
account maintained by the Depositary at The Depository Trust Company, the
Midwest Securities Trust Company or the Philadelphia Depository Trust Company
(each, a "Book-Entry Transfer Facility" and, collectively, the "Book-Entry
Transfer Facilities") pursuant to the procedures set forth in Section 3 of the
Offer to Purchase dated March 3, 1995 (the "Offer to Purchase"). Shareholders
who tender Shares or Rights by book-entry transfer are referred to herein as
"Book-Entry Shareholders."
IF THE PURCHASER DECLARES THAT THE RIGHTS CONDITION (AS DEFINED IN THE OFFER
TO PURCHASE) IS SATISFIED, THE PURCHASER WILL NOT REQUIRE DELIVERY OF THE
RIGHTS. UNLESS AND UNTIL THE PURCHASER DECLARES THAT THE RIGHTS CONDITION IS
SATISFIED, HOLDERS OF SHARES WILL BE REQUIRED TO TENDER ONE RIGHT FOR EACH SHARE
TENDERED TO EFFECT A VALID TENDER OF SUCH SHARE. If the Distribution Date (as
defined in the Offer to Purchase) has not occurred prior to the time Shares are
tendered pursuant to the Offer (as defined below), a tender of Shares will also
constitute a tender of the associated Rights. See Section 3 of the Offer to
Purchase. If the Distribution Date has occurred, and certificates representing
Rights (the "Rights Certificates") have been distributed to holders of Shares,
such holders of Shares will be required to tender Rights Certificates
representing a number of Rights equal to the number of Shares being tendered in
order to effect a valid tender of such Shares.
Holders of Shares and Rights whose certificates for such Shares (the "Share
Certificates") and, if applicable, Rights Certificates, are not immediately
available or who cannot deliver their Share Certificates or, if applicable,
their Rights Certificates, and all other required documents to the Depositary on
or prior to the Expiration Date (as defined in Section 1 of the Offer to
Purchase) or who cannot deliver confirmation of the book-entry transfer of their
Shares into the Depositary's account at a Book-Entry Transfer Facility
("Book-Entry Confirmation") on or prior to the Expiration Date, must tender
their Shares and Rights according to the guaranteed delivery procedures set
forth in Section 3 of the Offer to Purchase. See Instruction 2 of this Letter of
Transmittal. Delivery of documents to a Book-Entry Transfer Facility does not
constitute delivery to the Depositary.
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:____________________________________________
Check Box of Book-Entry Transfer Facility:
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account Number____________________________________________________________
Transaction Code Number___________________________________________________
<PAGE>
/ / CHECK HERE IF TENDERED RIGHTS ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:____________________________________________
Check Box of Book-Entry Transfer Facility:
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account Number____________________________________________________________
Transaction Code Number___________________________________________________
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Owner(s):___________________________________________
Window Ticket Number (if any):____________________________________________
Date of Execution of Notice of Guaranteed Delivery:_______________________
Name of Institution that Guaranteed Delivery:_____________________________
If Delivered by Book-Entry Transfer, Check Box of Book-Entry Transfer
Facility:
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account Number____________________________________________________________
Transaction Code Number___________________________________________________
<PAGE>
/ / CHECK HERE IF TENDERED RIGHTS ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Owner(s):___________________________________________
Window Ticket Number (if any):____________________________________________
Date of Execution of Notice of Guaranteed Delivery:_______________________
Name of Institution that Guaranteed Delivery:_____________________________
If Delivered by Book-Entry Transfer, Check Box of Book-Entry Transfer
Facility:
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account Number____________________________________________________________
Transaction Code Number___________________________________________________
<TABLE><CAPTION>
DESCRIPTION OF SHARES TENDERED
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
(PLEASE FILL IN, IF BLANK) (ATTACH ADDITIONAL LIST, IF NECESSARY)
TOTAL NUMBER
OF SHARES
SHARE REPRESENTED BY NUMBER OF
CERTIFICATE SHARE SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
<S> <C> <C> <C>
Total Shares
</TABLE>
* Need not be completed by Book-Entry Shareholders.
** Unless otherwise indicated, it will be assumed that all Shares being
delivered to the Depositary are being tendered. See Instruction 4.
<PAGE>
<TABLE><CAPTION>
DESCRIPTION OF RIGHTS TENDERED
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) RIGHTS CERTIFICATE(S) AND RIGHT(S) TENDERED*
(PLEASE FILL IN, IF BLANK) (ATTACH ADDITIONAL LIST, IF NECESSARY)
TOTAL NUMBER
OF RIGHTS
RIGHTS REPRESENTED BY NUMBER OF
CERTIFICATES RIGHTS RIGHTS
NUMBER(S)** CERTIFICATE(S)** TENDERED***
<S> <C> <C> <C>
Total Rights
</TABLE>
* If the tendered Rights are represented by separate Rights Certificates,
complete the certificate numbers of such Rights Certificates.
Shareholders tendering Rights which are not represented by separate
certificates will need to submit an additional Letter of Transmittal if
Rights Certificates are received.
** Need not be completed by Book-Entry Shareholders.
*** Unless otherwise indicated, it will be assumed that all Rights being
delivered to the Depositary are being tendered. See Instruction 4.
-----------------------
The names and addresses of the registered holders should be printed, if not
already printed above, exactly as they appear on the certificates representing
Shares and/or Rights tendered hereby. The certificates and number of Shares
and/or Rights that the undersigned wishes to tender should be indicated in the
appropriate boxes.
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ CAREFULLY THE ACCOMPANYING INSTRUCTIONS.
Ladies and Gentlemen:
The undersigned hereby tenders to Luxottica Acquisition Corp. (the
"Purchaser"), a Delaware corporation and an indirect wholly owned subsidiary of
Luxottica Group S.p.A., a corporation organized under the laws of the Republic
of Italy, the above described Common Shares, without par value (the "Shares"),
of The United States Shoe Corporation, an Ohio corporation (the "Company"),
including (unless and until the Purchaser declares that the Rights Condition (as
defined in the Offer to Purchase) is satisfied) the associated preference share
purchase rights (the "Rights") issued pursuant to the Rights Agreement, dated as
of March 31, 1986, as amended by the First Amendment to Rights Agreement, dated
as of March 23, 1988 (the "Rights Agreement"), between the Company and Morgan
Shareholder Services Trust Company (as successor to Morgan Guaranty Trust
Company of New York), as Rights Agent, pursuant to the Purchaser's offer to
purchase all of the outstanding Shares of the Company at a price of $24.00 per
Share (and associated Right), net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions set forth in the Offer to
Purchase, dated March 3, 1995 (the "Offer to Purchase"), receipt of which is
hereby acknowledged, and this Letter of Transmittal (which, as amended from time
to time, together constitute the "Offer"). The Purchaser reserves the right to
transfer or assign in whole or from time to time in part, to one or more of its
affiliates the right to purchase Shares (and associated Rights) tendered
pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of, or payment for,
Shares and/or Rights tendered herewith in accordance with the terms and subject
to the conditions of the Offer (including, if the Offer is extended or amended,
the terms or conditions of any such extension or amendment), the undersigned
hereby sells, assigns and transfers to, or upon the order of, the Purchaser all
right, title and interest in and to all of the Shares and/or Rights that are
being tendered hereby and any and all dividends (other than regular quarterly
cash dividends, not in excess of $0.08 per Share, having a customary and usual
record date prior to the Purchaser purchasing and becoming a record holder of
such Shares), distributions, other Shares, rights (including the Rights) or
other securities issued or issuable in respect thereof on or after March 3, 1995
and payable or distributable to the undersigned on a date prior to the transfer
to the name of the Purchaser or nominee or transferee of the Purchaser on the
Company's stock transfer records of the Shares tendered herewith (except that if
the Rights are redeemed by the Board of Directors in accordance with the terms
of the Rights Agreement, tendering Shareholders who are holders of record as of
the applicable record date will be entitled to receive and retain the redemption
price of $0.05 per Right in accordance with the Rights Agreement) (a
"Distribution"), and constitutes and appoints the Depositary the true and lawful
agent and attorney-in-fact of the undersigned with respect to such Shares and/or
Rights (and any Distributions), with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an interest), to
(a) deliver Share Certificates and Rights Certificates (and any Distributions),
or transfer ownership of such Shares and Rights (and any Distributions) on the
account books maintained by a Book-Entry Transfer Facility, together, in any
such case with all accompanying evidences of transfer and authenticity to, or
upon the order of, the Purchaser upon receipt by the Depositary, as the
undersigned's agent, of the purchase price (adjusted, if appropriate, as
provided in the Offer to Purchase), (b) present such Shares and/or Rights (and
any Distributions) for transfer on the books of the Company and (c) receive all
benefits and otherwise exercise all rights of beneficial ownership of such
Shares and/or Rights (and any Distributions), all in accordance with the terms
and subject to the conditions of the Offer.
<PAGE>
The undersigned understands that unless the Rights are redeemed prior to the
expiration of the Offer, Shareholders will be required to tender one Right for
each Share tendered in order to effect a valid tender of such Share. The
undersigned understands that if the Distribution Date (as defined in the Offer
to Purchase) has occurred and Rights Certificates have been distributed to
holders of Shares prior to the time Shares are tendered herewith, Rights
Certificates representing a number of Rights equal to the number of Shares being
tendered herewith must be delivered to the Depositary or, if available, a
Book-Entry Confirmation (as defined in Instruction 2) must be received by the
Depositary with respect thereto in order for the Shares tendered herewith to be
validly tendered. If the Distribution Date has occurred and Rights Certificates
have not been distributed prior to the time Shares are tendered herewith, the
undersigned agrees to deliver Rights Certificates representing a number of
Rights equal to the number of Shares tendered herewith to the Depositary within
five business days after the date such Rights Certificates are distributed. The
undersigned understands that if the Rights Condition is not satisfied, the
Purchaser reserves the right to require that the Depositary receive Rights
Certificates, or a Book-Entry Confirmation, if available, with respect to such
Rights if Rights Certificates have been distributed to holders of Shares prior
to accepting Shares for payment. In that event, payment for Shares tendered and
accepted for payment pursuant to the Offer will be made only after timely
receipt by the Depositary of, among other things, such Rights Certificates, if
Rights Certificates have been distributed to holders of Shares.
The undersigned hereby irrevocably appoints each designee of the Purchaser
as the attorney-in-fact and proxy of the undersigned, with full power of
substitution, to the full extent of the undersigned's rights with respect to all
Shares and Rights tendered hereby and accepted for payment and paid for by the
Purchaser (and any Distributions) to vote in such manner as each such attorney
and proxy or his or her substitute shall in his or her sole discretion deem
proper, and otherwise act (including without limitation pursuant to written
consent) with respect to all the Shares and Rights tendered hereby which have
been accepted for payment by the Purchaser prior to the time of such vote or
action, which the undersigned is entitled to vote at any meeting of shareholders
(whether annual or special and whether or not an adjourned meeting) of the
Company, or otherwise. All such proxies shall be considered coupled with an
interest in the Shares and Rights tendered herewith. Such appointment will be
effective when, and only to the extent that, the Purchaser pays for such Shares
and Rights by depositing the purchase price therefor with the Depositary. Upon
such acceptance for payment, all prior powers of attorney and proxies given by
the undersigned with respect to such Shares, Rights and such other securities or
rights will be revoked, without further action, and no subsequent powers of
attorneys and proxies may be given (and, if given, will be deemed ineffective).
The Purchaser reserves the right to require, in addition to satisfaction of the
Control Share Condition (as defined in the Offer to Purchase), that, in order
for Shares and Rights to be deemed validly tendered, immediately upon the
payment of such Shares and Rights, the Purchaser or its designee must be able to
exercise full voting and all other rights which inure to a record and beneficial
holder with respect to such Shares, Rights and other securities, including
voting at any meeting of shareholders then scheduled.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares and Rights
tendered hereby (and any Distributions) and that, when the same are accepted for
payment and paid for by the Purchaser, the Purchaser will acquire good,
marketable and unencumbered title thereto, free and clear of all liens,
restrictions, charges and encumbrances, and that the Shares and Rights tendered
hereby (and any Distributions) will not be subject to any adverse claim. The
undersigned, upon request, will execute and deliver any additional documents
deemed by the Depositary or the Purchaser to be necessary or desirable to
complete the sale, assignment and transfer of Shares and Rights tendered hereby
(and any Distributions). In addition, the undersigned shall promptly remit and
transfer to the Depositary for the account of the Purchaser any and all other
Distributions in respect of the Shares and Rights tendered hereby, accompanied
by appropriate documentation of transfer, and, pending such remittance or
appropriate assurance thereof, the Purchaser shall be, subject to applicable
law, entitled to all rights and privileges as owner of any such Distributions,
and may withhold the entire purchase price of Shares and Rights tendered hereby,
or deduct from such purchase price the amount or value thereof as determined by
the Purchaser in its sole discretion.
All authority herein conferred or agreed to be conferred in this Letter of
Transmittal shall not be affected by, and shall survive, the death or incapacity
of the undersigned, and any obligation of the undersigned hereunder shall be
binding upon the successors, assigns, heirs, executors, administrators, trustees
in bankruptcy, personal and legal representatives of the undersigned. Except as
stated in the Offer to Purchase, this tender is irrevocable provided that Shares
and Rights tendered pursuant to the Offer may be withdrawn at any time prior to
their acceptance for payment.
The undersigned understands that tenders of Shares and Rights pursuant to
any one of the procedures described in Section 3 of the Offer to Purchase and
the instructions hereto will constitute a binding agreement between the
undersigned and the Purchaser upon the terms and subject to the conditions of
the Offer. The undersigned recognizes that under certain circumstances set forth
in the Offer to Purchase, the Purchaser may not be required to accept for
payment any of the Shares and Rights tendered hereby.
<PAGE>
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any Share
Certificates or Rights Certificates not tendered or not accepted for payment in
the name(s) of the registered holder(s) appearing under "Description of Shares
Tendered" and "Description of Rights Tendered," respectively. Similarly, unless
otherwise indicated under "Special Delivery Instructions," please mail the check
for the purchase price and/or return Share Certificates or Rights Certificates
not tendered or not accepted for payment (and accompanying documents, as
appropriate) to the address(es) of the registered holder(s) appearing under
"Description of Shares Tendered" and "Description of Rights Tendered,"
respectively. In the event that both the Special Payment Instructions and the
Special Delivery Instructions are completed, please issue the check for the
purchase price and/or return any Share Certificates or Rights Certificates not
tendered or not accepted for payment in the name of, and deliver such check
and/or return Share Certificates or Rights Certificates to, the person(s) so
indicated. Shareholders delivering Shares or Rights by book-entry transfer may
request that any Shares or Rights not accepted for payment be returned by
crediting such account maintained at a Book-Entry Transfer Facility as such
shareholder may designate by making an appropriate entry under "Special Payment
Instructions." The undersigned recognizes that the Purchaser has no obligation
pursuant to the Special Payment Instructions to transfer any Shares and Rights
from the name of the registered holder thereof if the Purchaser does not accept
for payment any of the Shares and Rights, respectively tendered hereby.
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6, AND 7)
To be completed ONLY if Share Certificates and/or Rights Certificates
not tendered or not purchased and/or the check for the purchase price of
Shares and/or Rights purchased are to be issued in the name of someone other
than the undersigned, or if Shares and/or Rights delivered by book-entry
transfer which are not purchased are to be returned by credit to an account
maintained at a Book-Entry Transfer Facility other than that designated
above.
Issue check and/or certificates to:
Name ____________________________________________
(PLEASE PRINT)
Address _________________________________________
_________________________________________________
(ZIP CODE)
_________________________________________________
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
/ / Credit unpurchased Shares and/or Rights delivered by book-entry transfer
to the Book-Entry Transfer Facility account set forth below.
Check appropriate box:
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
___________________________________________
(ACCOUNT NUMBER)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6, AND 7)
To be completed ONLY if Share Certificates and/or Rights Certificates
not tendered or not purchased and/or the check for the purchase price of
Shares and/or Rights purchased are to be sent to someone other than the
undersigned, or to the undersigned at an address other than that shown
above.
Mail check and/or certificates to:
Name ____________________________________________
(PLEASE PRINT)
Address _________________________________________
_________________________________________________
(ZIP CODE)
_________________________________________________
<PAGE>
SIGN HERE
(COMPLETE SUBSTITUTE FORM W-9 ON REVERSE)
_____________________________________________________________________
_____________________________________________________________________
SIGNATURE(S) OF HOLDER(S)
Dated: , 1995
(Must be signed by registered holder(s) exactly as name(s) appear(s) on the
Share Certificate(s) or Rights Certificate(s) or on a security position listing
or by person(s) authorized to become registered holder(s) by certificates and
documents transmitted herewith. If signature is by trustees, executors,
administrators, guardians, attorneys-in-fact, agents, officers of corporations
or others acting in a fiduciary or representative capacity, please provide the
following information. See Instruction 5.)
Name(s) _____________________________________________________________
(PLEASE PRINT)
Capacity (full title) ___________________________________________________
(SEE INSTRUCTION 5)
Address _____________________________________________________________
_____________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number _____________________________________
Tax Identification or
Social Security No. ___________________________________________________
(COMPLETE SUBSTITUTE FORM W-9 ON REVERSE)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature _________________________________________________
Name _______________________________________________________________
(PLEASE PRINT)
Title ________________________________________________________________
Name of Firm _______________________________________________________
Address _____________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number _____________________________________
Dated: , 1995
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. Except as otherwise provided below, signatures
on this Letter of Transmittal must be guaranteed by a firm which is a bank,
broker, dealer, credit union, savings association or other entity which is a
member in good standing of the Securities Transfer Medallion Program (each of
the foregoing being referred to as an "Eligible Institution"), unless the Shares
and/or Rights tendered hereby are tendered (i) by the registered holder of such
Shares and Rights (which term, for purposes of this document, shall include any
participant in a Book-Entry Transfer Facility whose name appears on a security
position listing as the owner of Shares or Rights) who has completed neither the
box entitled "Special Payment Instructions" nor the box entitled "Special
Delivery Instructions" herein or (ii) for the account of an Eligible
Institution. See Instruction 5. If the Share Certificates or Rights Certificates
are registered in the name of a person other than the signer of this Letter of
Transmittal, or if payment is to be made to, or Share Certificates or Rights
Certificates for unpurchased Shares or Rights are to be issued or returned to, a
person other than the registered owner, then the tendered certificates must be
endorsed or accompanied by duly executed stock powers, in either case signed
exactly as the name or names of the registered owner or owners appear on the
certificates, with the signatures on the certificates or stock powers guaranteed
by an Eligible Institution as provided herein. See Instruction 5.
2. Requirements of Tender. This Letter of Transmittal is to be completed by
shareholders either if Share Certificates or Rights Certificates are to be
forwarded herewith or if tenders are to be made pursuant to the procedures for
tender by book-entry transfer set forth in Section 3 of the Offer to Purchase.
Share Certificates, or timely confirmation (a "Book-Entry Confirmation") of a
book-entry transfer of such Shares into the Depositary's account at a Book-Entry
Transfer Facility, as well as this Letter of Transmittal (or a facsimile
hereof), properly completed and duly executed, with any required signature
guarantees or an Agent's Message, in the case of a book-entry delivery, and any
other documents required by this Letter of Transmittal, must be received by the
Depositary at one of its addresses set forth herein prior to the Expiration Date
and, unless and until the Purchaser declares that the Rights Condition (as
defined in the Offer to Purchase) is satisfied, Rights Certificates or timely
confirmation of a book-entry transfer of Rights into the Depositary's account at
a Book-Entry Transfer Facility, if available (together with, if Rights are
forwarded separately from Shares, a properly completed and duly executed Letter
of Transmittal (or a facsimile hereof) with any required signature guarantee, or
an Agent's Message in the case of a book-entry delivery, and any other documents
required by this Letter of Transmittal), must be received by the Depositary at
one of its addresses set forth herein prior to the Expiration Date or, if later,
within five business days after the date such Rights Certificates are
distributed. Shareholders whose Share Certificates or Rights Certificates are
not immediately available (including because Rights Certificates have not yet
been distributed by the Company) or who cannot deliver their Share Certificates
or Rights Certificates and all other required documents to the Depositary prior
to the Expiration Date or who cannot complete the procedures for delivery by
book-entry transfer on a timely basis may tender their Shares and Rights by
properly completing and duly executing a Notice of Guaranteed Delivery pursuant
to the guaranteed delivery procedures set forth in Section 3 of the Offer to
Purchase. Pursuant to such procedure: (i) such tender must be made by or through
an Eligible Institution, (ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form made available by the Purchaser,
must be received by the Depositary prior to the Expiration Date, and (iii) the
Share Certificates or Rights Certificates (or a Book-Entry Confirmation)
representing all tendered Shares or Rights, in proper form for transfer,
together with a Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed,with any required signature guarantees and any other
documents required by this Letter of Transmittal, must be received by the
Depositary (a) in the case of Shares within five New York Stock Exchange, Inc.
("NYSE") trading days after the date of execution of such Notice of Guaranteed
Delivery or (b) in the case of Rights, within a period ending on the later of
(i) five NYSE trading days after the date of execution of such Notice of
Guaranteed Delivery or (ii) five NYSE trading days after Rights Certificates are
distributed to shareholders by the Rights Agent, all as provided in Section 3 of
the Offer to Purchase. If Share Certificates and Rights Certificates are
forwarded separately to the Depositary, a properly completed and duly executed
Letter of Transmittal (or facsimile thereof) must accompany each such delivery.
The term "Agent's Message" means a message, transmitted by a Book-Entry Transfer
Facility to, and received by, the Depositary and forming a part of a Book-Entry
Confirmation, which states that such Book-Entry Transfer Facility has received
an express acknowledgment from the participant in such Book-Entry Transfer
Facility tendering the Shares, that such participant has received and agrees to
be bound by the terms of the Letter of Transmittal and that the Purchaser may
enforce such agreement against the participant.
<PAGE>
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES
AND, IF APPLICABLE, RIGHTS CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS,
INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION
AND RISK OF THE TENDERING SHAREHOLDER, AND, EXCEPT AS OTHERWISE PROVIDED IN THIS
INSTRUCTION 2, THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY
THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares or Rights will be purchased. All tendering shareholders, by
execution of this Letter of Transmittal (or a manually signed facsimile hereof),
waive any right to receive any notice of the acceptance of their Shares and
Rights for payment.
3. Inadequate Space. If the space provided herein under "Description of
Shares Tendered" or "Description of Rights Tendered" is inadequate, the
certificate numbers and/or the number of Shares and, if applicable, Rights
should be listed on a separate signed schedule and attached hereto.
4. Partial Tenders. (Not applicable to Book-Entry Shareholders.) If fewer
than all the Shares or Rights evidenced by any certificate submitted are to be
tendered, fill in the number of Shares or Rights which are to be tendered in the
box entitled "Description of Shares Tendered" and "Description of Rights
Tendered" respectively. In such case, new certificate(s) for the remainder of
the Shares or Rights that were evidenced by your old certificate(s) will be sent
to you, unless otherwise provided in the appropriate box on this Letter of
Transmittal, as soon as practicable after the Expiration Date. All Shares and
Rights represented by certificates delivered to the Depositary will be deemed to
have been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal, Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
and Rights tendered hereby, the signature(s) must correspond exactly with the
name(s) as written on the face of the certificate(s) without alteration,
enlargement or any change whatsoever.
If any of the Shares or Rights tendered hereby are owned of record by two or
more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares or Rights are registered in different names on
several certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal or any certificates or stock powers are signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory to
the Purchaser of such person's authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares or Rights listed and transmitted hereby, no endorsement of certificates
or separate stock powers are required unless payment is to be made to, or Share
and/or Rights Certificates not tendered or purchased are to be issued to, a
person other than the registered owner(s). Signatures on such certificates or
stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Shares and Rights listed, the certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appears on the certificates.
Signatures on such certificates or stock powers must be guaranteed by an
Eligible Institution.
6. Stock Transfer Taxes. Except as set forth in this Instruction 6, the
Purchaser will pay or cause to be paid all stock transfer taxes with respect to
the transfer and sale of purchased Share Certificates or Rights Certificates to
it or its order pursuant to the Offer. If, however, payment of the purchase
price is to be made to, or if Share Certificates or Rights Certificates not
tendered or purchased are to be registered in the name of, any person other than
the registered holder, or if tendered certificates are registered in the name of
any person other than the person(s) signing this Letter of Transmittal, the
amount of any stock transfer taxes (whether imposed on the registered holder(s)
or such other person) payable on account of the transfer to such person will be
deducted from the purchase price unless satisfactory evidence of the payment of
such taxes or exemption therefrom is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
<PAGE>
7. Special Payment and Delivery Instructions. If a check and/or Share
Certificates or Rights Certificates for unpurchased Shares or Rights are to be
issued in the name of a person other than the signer of this Letter of
Transmittal or if a check is to be sent and/or Share Certificates or Rights
Certificates are to be returned to someone other than the signer of this Letter
of Transmittal or to an address other than that shown above, the appropriate
boxes on this Letter of Transmittal should be completed. Shareholders tendering
Shares or Rights by book-entry transfer may request that Shares or Rights not
purchased be credited to such account maintained at a Book-Entry Transfer
Facility as such shareholder may designate hereon. If no such instructions are
given, such Shares and Rights not purchased will be returned by crediting the
account at the Book-Entry Transfer Facility designated above.
8. Requests for Assistance or Additional Copies. Requests for assistance
may be directed to the Dealer Manager or the Information Agent at the addresses
set forth below. Additional copies of the Offer to Purchase, this Letter of
Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
obtained at the Purchaser's expense from the Dealer Manager or the Information
Agent at the addresses set forth below or from your broker, dealer, commercial
bank or trust company.
9. Waiver of Conditions. The conditions of the Offer may be waived by the
Purchaser, in whole or in part, at any time and from time to time, in the
Purchaser's sole discretion in the case of any Shares or Rights tendered.
10. Substitute Form W-9. Each tendering shareholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on
Substitute From W-9, which is provided under "Important Tax Information" below,
and to certify whether the shareholder is subject to backup withholding of
Federal income tax. If a tendering shareholder is subject to backup withholding,
the shareholder must cross out item (2) of the Certification box of the
Substitute Form W-9. Failure to provide the information on the Substitute Form
W-9 may subject the tendering shareholder to 31% Federal income tax withholding
with respect to any cash payments received pursuant to the Offer and Proposed
Merger. If the tendering shareholder has not been issued a TIN and has applied
for a number or intends to apply for a number in the near future, he or she
should write "Applied For" in the space provided for the TIN in Part I, and sign
and date the Substitute Form W-9. If "Applied For" is written in Part I and the
Depositary is not provided with a TIN within 60 days, the Depositary will
withhold 31% on all payments of the purchase price until a TIN is provided to
the Depositary.
11. Lost, Destroyed or Stolen Certificates. If any certificate(s)
representing Shares or Rights has been lost, destroyed or stolen, the
shareholder should promptly notify the Depositary. The shareholder will then be
instructed as to the steps that must be taken in order to replace the
certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost or destroyed certificates have
been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED, TOGETHER WITH CERTIFICATES OR CONFIRMATION OF
BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS OR THE NOTICE OF GUARANTEED
DELIVERY, MUST BE RECEIVED BY THE DEPOSITARY AT ONE OF ITS ADDRESSES SET FORTH
HEREIN PRIOR TO THE EXPIRATION DATE.
<PAGE>
IMPORTANT TAX INFORMATION
Under Federal income tax law, a shareholder whose tendered Shares or Rights
are accepted for payment is required to provide the Depositary with such
shareholder's correct TIN on Substitute Form W-9 below. If such Shareholder is
an individual the TIN is his social security number. If a tendering shareholder
is subject to backup withholding, he must cross out item (2) of the
Certification box on the Substitute Form W-9. If the Depositary is not provided
with the correct TIN, the shareholder may be subject to a $50 penalty imposed by
the Internal Revenue Service. In addition, payments that are made to such
shareholder with respect to Shares or Rights purchased pursuant to the Offer may
be subject to backup withholding.
Certain shareholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, that shareholder must submit to the Depositary a properly completed
Internal Revenue Service Form W-8, signed under penalties of perjury, attesting
to that individual's exempt status. Such statements may be obtained from the
Depositary. Exempt shareholders, other than foreign individuals, should furnish
their TIN, write "Exempt" on the face of the Substitute Form W-9 below, and
sign, date and return the Substitute Form W-9 to the Depositary. See the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 for additional instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the shareholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a shareholder
with respect to Shares or Rights purchased pursuant to the Offer, the
shareholder is required to notify the Depositary of his correct TIN by
completing the form below certifying that the TIN provided on the Substitute
Form W-9 is correct (or that such shareholder is awaiting a TIN) and that (1)
such shareholder has not been notified by the Internal Revenue Service that he
is subject to backup withholding as a result of failure to report all interest
or dividends or (2) the Internal Revenue Service has notified the shareholder
that he is no longer subject to backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The shareholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares or
Rights tendered hereby. If the Shares and Rights are registered in more than one
name or are not in the name of the actual owner, consult the enclosed Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional guidance on which number to report. If the tendering shareholder has
not been issued a TIN and has applied for a number or intends to apply for a
number in the near future, he should write "Applied For" in the space provided
for in the TIN in Part I, and sign and date the Substitute Form W-9. If "Applied
For" is written in Part I and the Depositary is not provided with a TIN within
60 days, the Depositary will withhold 31% on all payments of the purchase price
until a TIN is provided to the Depositary.
<PAGE>
PAYER'S NAME: CHEMICAL BANK
PART I--PLEASE PROVIDE PART III
YOUR TIN IN THE BOX
SUBSTITUTE AT THE RIGHT AND CERTIFY ___________________________
FORM W-9 BY SIGNING AND DATING Social Security Number
BELOW.
OR
___________________________
Employer Identification
Number
(If awaiting TIN write
"Applied For")
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
PAYER'S REQUEST FOR TAXPAYER
IDENTIFICATION NUMBER (TIN)
PART II--For Payees Exempt From Backup Withholding, see
the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 and
complete as instructed therein.
CERTIFICATION--Under penalties of perjury, I certify
that:
(1) The number shown on this form is my correct Taxpayer
Identification Number (or I am waiting for a number
to be issued to me), and
(2) I am not subject to backup withholding either
because I have not been notified by the Internal
Revenue Service (the "IRS") that I am subject to
backup withholding as a result of failure to report
all interest or dividends, or the IRS has notified
me that I am no longer subject to backup
withholding.
CERTIFICATION INSTRUCTIONS--You must cross out item (2)
above if you have been notified by the IRS that you are
subject to backup withholding because of underreporting
Interest or dividends on your tax return. However, if
after being notified by the IRS that you were subject to
backup withholding you received another notification
from the IRS that you are no longer subject to backup
withholding, do not cross out item (2). (Also see
instructions in the enclosed Guidelines).
SIGNATURE DATE , 1995
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE
THE FOLLOWING CERTIFICATE IF YOU WROTE "APPLIED FOR" IN PART III OF THE
SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(2) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number by the
time of payment, 31% of all payments pursuant to the Offer made to me
thereafter will be withheld until I provide a number.
- ----------------------------------------------- ----------------------
Signature Date
- -----------------------------------------------
Name (Please Print)
<PAGE>
Questions and requests for assistance or additional copies of the Offer to
Purchase, the Letter of Transmittal and other tender offer materials may be
directed to the Information Agent or the Dealer Manager as set forth below:
The Information Agent for the Offer is:
[LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
Call Toll Free (800) 322-2885
The Dealer Manager for the Offer is:
CS FIRST BOSTON CORPORATION
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
(212) 909-2000 (Call Collect)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF COMMON SHARES
(INCLUDING THE ASSOCIATED PREFERENCE SHARE PURCHASE RIGHTS)
OF
THE UNITED STATES SHOE CORPORATION
TO
LUXOTTICA ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY
OF
LUXOTTICA GROUP S.P.A.
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or one substantially in the form hereof,
must be used to accept the Offer (as defined below) if (i) certificates
representing Common Shares, without par value (the "Shares"), of The United
States Shoe Corporation, an Ohio corporation (the "Company"), and certificates
for the associated preference share purchase rights (the "Rights") issued
pursuant to the Rights Agreement, dated as of March 31, 1986, as amended by the
First Amendment to Rights Agreement, dated as of March 23, 1988, between the
Company and Morgan Shareholder Services Trust Company (as successor to Morgan
Guaranty Trust Company of New York), as Rights Agent, are not immediately
available (including because certificates for Rights have not yet been
distributed by the Company) or (ii) time will not permit all required documents
to reach Chemical Bank, as Depositary (the "Depositary"), prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase (as defined
below)) or (iii) the procedure for delivery by book-entry transfer cannot be
completed on a timely basis. This Notice of Guaranteed Delivery may be delivered
by hand or mail or transmitted by telegram or facsimile transmission to the
Depositary. See Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
CHEMICAL BANK
<TABLE><CAPTION>
<S> <C> <C>
By Facsimile Transmission: By Hand or Overnight Courier:
By Mail: (For Eligible Institutions only) Chemical Bank
Chemical Bank (212) 629-8015 55 Water Street
Reorganization Department or Second Floor-Room 234
P.O. Box 3085 (212) 629-8016 New York, New York 10041
G.P.O. Station Confirm by Telephone: Attention:
New York, New York 10116-3055 (212) 946-7137 Reorganization Department
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE>
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Luxottica Acquisition Corp., a Delaware
corporation and an indirect wholly owned subsidiary of Luxottica Group S.p.A., a
corporation organized under the laws of the Republic of Italy, upon the terms
and subject to the conditions set forth in the Offer to Purchase dated March 3,
1995 and the related Letter of Transmittal (which together constitute the
"Offer"), receipt of which is hereby acknowledged, the number of Shares and
Rights indicated below pursuant to the guaranteed delivery procedures set forth
in Section 3 of the Offer to Purchase.
Number of Shares:
Number of Rights:
Account Number:
Certificate No(s). (if available)
- -------------------------------------------
Check ONE box if Share(s) or Right(s) will be tendered by book-entry transfer:
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account Number __________________________
Dated ______________________________ , 1995
Name(s) of Record Holder(s)
- -------------------------------------------
PLEASE TYPE OR PRINT
Address(es)________________________________
___________________________________________
ZIP CODE
Area Code and Tel. No. ___________________
Signature(s) _______________________________
___________________________________________
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the
Securities Transfer Medallion Program, hereby (a) represents that the tender
of Shares and/or Rights effected hereby complies with Rule 14e-4 under the
Securities Exchange Act of 1934, as amended, and (b) guarantees delivery to
the Depositary, at one of its addresses set forth above, of certificates
representing the Shares and/or Rights tendered hereby in proper form for
transfer, or confirmation of book-entry transfer of such Shares and/or
Rights into the Depositary's accounts at The Depository Trust Company, the
Midwest Securities Trust Company or the Philadelphia Depository Trust
Company, in each case with delivery of a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), and any other
required documents, within (a) in the case of Shares, five New York Stock
Exchange, Inc. ("NYSE") trading days after the date hereof, or (b) in the
case of Rights, a period ending on the later of (i) five NYSE trading days
after the date hereof or (ii) five NYSE trading days after the date
certificates for Rights are distributed to holders of Shares by the Rights
Agent.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares and/or Rights to the Depositary within the time
period shown herein. Failure to do so could result in a financial loss to
such Eligible Institution.
<TABLE>
<S> <C>
Name of Firm Authorized Signature
Address Title
Zip Code Please Type or Print
Area Code and Tel. No. Date , 1995
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES OR RIGHTS WITH THIS NOTICE.
CERTIFICATES FOR SHARES AND RIGHTS SHOULD BE SENT WITH YOUR LETTER OF
TRANSMITTAL.
[CSFB SHIPMARK] CS First Boston
Corporation
Park Avenue Plaza
New York, New York
10055
Tel: (212) 909-2000
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING COMMON SHARES
(INCLUDING THE ASSOCIATED PREFERENCE SHARE PURCHASE RIGHTS)
OF
THE UNITED STATES SHOE CORPORATION
AT
$24.00 NET PER SHARE
BY
LUXOTTICA ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY
OF
LUXOTTICA GROUP S.P.A.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON THURSDAY, MARCH 30, 1995,
UNLESS THE OFFER IS EXTENDED.
March 3, 1995
To Brokers, Dealers, Commercial Banks,
Trust Companies And Other Nominees:
We have been appointed by Luxottica Acquisition Corp., a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of Luxottica Group
S.p.A., a corporation organized under the laws of the Republic of Italy
("Parent"), to act as Dealer Manager in connection with the Purchaser's offer to
purchase all outstanding common shares, without par value (the "Shares"), of The
United States Shoe Corporation, an Ohio corporation (the "Company"), including
(unless and until the Purchaser declares that the Rights Condition (as defined
in the Offer to Purchase referenced below) is satisfied) the associated
preference share purchase rights (the "Rights") issued pursuant to the Rights
Agreement, dated as of March 31, 1986, as amended by the First Amendment to
Rights Agreement, dated as of March 23, 1988, between the Company and Morgan
Shareholder Services Trust Company (as successor to Morgan Guaranty Trust
Company of New York) as Rights Agent at a purchase price of $24.00 per Share,
net to the seller in cash, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated March 3, 1995, and the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
constitute the "Offer") enclosed herewith.
If the Purchaser declares that the Rights Condition is satisfied, the
Purchaser will not require delivery of Rights. Unless and until the Purchaser
declares that the Rights Condition is satisfied, holders of Shares will be
required to tender one Right for each Share tendered to effect a valid tender of
such Share. If the Shares and Rights have not separated prior to the time Shares
are tendered pursuant to the Offer, a tender of Shares will constitute a tender
of the Rights. If such separation occurs and Rights Certificates (as defined in
the Offer to Purchase) have been distributed to holders of Shares prior to the
date of tender pursuant to the Offer, Rights Certificates representing a number
of Rights equal to the number of Shares being tendered must be delivered to
<PAGE>
the Depositary in order for such Shares to be validly tendered. If Shares and
Rights are to separate but Rights Certificates are not distributed prior to the
date of tender pursuant to the Offer, Rights may be tendered prior to a
shareholder receiving Rights Certificates by use of the guaranteed delivery
procedures described in the Offer to Purchase. In any case, a tender of Shares
constitutes an agreement by the tendering shareholder to deliver Rights
Certificates representing a number of Rights equal to the number of Shares
tendered pursuant to the Offer to the Depositary within five business days after
the date the Rights Certificates are distributed. The Purchaser reserves the
right to require that the Depositary receive such Rights Certificates prior to
accepting the Shares for payment if Rights Certificates have been distributed to
holders of shares at such time.
Holders of Shares and Rights whose certificates evidencing Shares and, if
applicable, Rights, are not immediately available (including if Rights
Certificates have not yet been distributed) or who cannot deliver confirmation
of the book-entry transfer of their Shares into the Depositary's account at a
Book-Entry Transfer Facility (as defined in the Offer to Purchase) and all other
documents required hereby to the Depositary on or prior to the Expiration Date
(as defined in the Offer to Purchase) must tender their Shares and Rights
according to the guaranteed delivery procedures set forth in Section 3 of the
Offer to Purchase. See Instruction 2 of the Letter of Transmittal. Delivery of
documents to a Book-Entry Transfer Facility does not constitute delivery to the
Depositary.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE A NUMBER OF SHARES
WHICH, WHEN ADDED TO THE SHARES BENEFICIALLY OWNED BY THE PURCHASER AND ITS
AFFILIATES, CONSTITUTES AT LEAST TWO-THIRDS OF ALL OUTSTANDING SHARES ON A
FULLY DILUTED BASIS.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, or who hold
Shares registered in their own names, we are enclosing the following documents:
1. Offer to Purchase;
2. Letter of Transmittal to be used by holders of Shares in accepting the
Offer and tendering Shares;
3. A letter which may be sent to your clients for whose account you hold
Shares registered in your name or in the name of your nominees, with
space provided for obtaining such clients' instructions with regard to
the Offer;
4. Notice of Guaranteed Delivery to be used to accept the Offer if
certificates for Shares are not immediately available or time will not
permit all required documents to reach the Depositary by the
Expiration Date or if the procedure for book-entry transfer cannot be
completed on a timely basis;
5. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9; and
6. Return envelope addressed to the Depositary.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), the Purchaser will accept for payment and pay for all of the Shares
(and, if applicable, the Rights) which are validly tendered prior to the
Expiration Date and not theretofore properly withdrawn when, as and if the
Purchaser gives oral or written notice to the Depositary of the Purchaser's
acceptance of such Shares and Rights for payment pursuant to the Offer. Payment
for Shares and Rights purchased pursuant to the Offer will in all cases be made
only after timely receipt by the Depositary of certificates for such Shares,
and, if applicable, certificates for the Rights or timely confirmation of a
book-entry transfer of such Shares and/or Rights into the Depositary's account
at The Depository Trust Company, the Midwest Securities Company or the
Philadelphia Depository Trust Company, pursuant to the procedures described in
Section 3 of the Offer to Purchase, a properly completed and duly executed
Letter of Transmittal (or manually signed facsimile thereof) or an Agent's
Message in connection with a book-entry transfer, and all other documents
required by the Letter of Transmittal.
The Purchaser will not pay any fees or commissions to any broker or dealer
or other person (other than the Dealer Manager) in connection with the
solicitation of tenders of Shares and Rights pursuant to the Offer. The
Purchaser will, however, upon request, reimburse you for reasonable and
necessary costs and expenses incurred by you in forwarding the enclosed
materials to your clients.
<PAGE>
The Purchaser will pay or cause to be paid any transfer taxes payable on the
transfer of Shares and Rights to it, except as otherwise provided in Instruction
6 of the enclosed Letter of Transmittal.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, MARCH 30, 1995, UNLESS THE OFFER IS
EXTENDED.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees and any other required documents, should be sent to the
Depositary, and certificates representing the tendered Shares and/or Rights
should be delivered or such Shares and/or Rights should be tendered by
book-entry transfer, all in accordance with the Instructions set forth in the
Letter of Transmittal and the Offer to Purchase.
If holders of Shares and/or Rights wish to tender, but it is impracticable
for them to forward their certificates or other required documents prior to the
expiration of the Offer, a tender may be effected by following the guaranteed
delivery procedures specified under Section 3 of the Offer to Purchase.
Any inquiries you may have with respect to the Offer should be addressed to
the Dealer Manager or the Information Agent at their respective addresses and
telephone numbers set forth on the back cover page of the Offer to Purchase.
Additional copies of the enclosed materials may be obtained from the
undersigned, at CS First Boston Corporation, telephone (212) 909-2000 (Collect)
or by calling the Information Agent, MacKenzie Partners, Inc., at (212) 929-5500
(Collect).
Very truly yours,
CS FIRST BOSTON CORPORATION
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY PERSON AS AN AGENT OF PARENT, THE PURCHASER, THE DEALER MANAGER, THE
INFORMATION AGENT OR THE DEPOSITARY, OR ANY AFFILIATE OF ANY OF THE FOREGOING,
OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT
ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS
ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING COMMON SHARES
(INCLUDING THE ASSOCIATED PREFERENCE SHARE PURCHASE RIGHTS)
OF
THE UNITED STATES SHOE CORPORATION
AT
$24.00 NET PER SHARE
BY
LUXOTTICA ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY
OF
LUXOTTICA GROUP S.P.A.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON THURSDAY, MARCH 30, 1995,
UNLESS THE OFFER IS EXTENDED.
March 3, 1995
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated March 3, 1995
(the "Offer to Purchase"), and a Letter of Transmittal (which, together with any
amendments or supplements thereto, constitute the "Offer") relating to an offer
by Luxottica Acquisition Corp., a Delaware corporation (the "Purchaser") and a
wholly owned subsidiary of Luxottica Group S.p.A., a corporation organized under
the laws of the Republic of Italy, to purchase all outstanding common shares,
without par value (the "Shares"), of The United States Shoe Corporation, an Ohio
corporation (the "Company"), including (unless and until the Purchaser declares
that the Rights Condition (as defined in the Offer to Purchase) is satisfied)
the associated preference share purchase rights (the "Rights") issued pursuant
to the Rights Agreement, dated as of March 31, 1986, as amended by the First
Amendment to Rights Agreement, dated as of March 23, 1988, between the Company
and Morgan Shareholder Services Trust Company (as successor to Morgan Guaranty
Trust Company of New York) as Rights Agent at a purchase price of $24.00 per
Share, net to the seller in cash without interest, upon the terms and subject to
the conditions set forth in the Offer.
If the Purchaser declares that the Rights Condition is satisfied, the
Purchaser will not require delivery of Rights. Unless and until the Purchaser
declares that the Rights Condition is satisfied, holders of Shares will be
required to tender one Right for each Share tendered to effect a valid tender of
such Share. If the Shares and Rights have not separated prior to the time Shares
are tendered pursuant to the Offer, a tender of Shares will constitute a tender
of the Rights. If such separation occurs and Rights Certificates (as defined in
the Offer to Purchase) have been distributed to holders of Shares prior to the
date of tender pursuant to the Offer, Rights Certificates representing a number
of Rights equal to the number of Shares being tendered must be delivered to the
Depositary in order for such Shares to be validly tendered. If Shares and Rights
are to separate but Rights Certificates are not distributed prior to the date of
tender pursuant to the Offer, Rights may be tendered prior to a shareholder
receiving Rights Certificates by use of the guaranteed delivery procedures
described in the Offer to Purchase. In any
<PAGE>
case, a tender of Shares constitutes an agreement by the tendering shareholder
to deliver Rights Certificates representing a number of Rights equal to the
number of Shares tendered pursuant to the Offer to the Depositary within five
business days after the date the Rights Certificates are distributed. The
Purchaser reserves the right to require that the Depositary receive such Rights
Certificates prior to accepting the Shares for payment if Rights Certificates
have been distributed to holders of shares at such time.
Holders of Shares and Rights whose certificates evidencing Shares and, if
applicable, Rights, are not immediately available (including if Rights
Certificates have not yet been distributed) or who cannot deliver confirmation
of the book-entry transfer of their Shares into the Depositary's account at a
Book-Entry Transfer Facility (as defined in the Offer to Purchase) and all other
documents required hereby to the Depositary on or prior to the Expiration Date
(as defined in the Offer to Purchase) must tender their Shares and Rights
according to the guaranteed delivery procedures set forth in Section 3 of the
Offer to Purchase. See Instruction 2 of the Letter of Transmittal. Delivery of
documents to a Book-Entry Transfer Facility does not constitute delivery to the
Depositary.
A tender of such Shares and Rights can be made only by us as the holder of
record and pursuant to your instructions. THE LETTER OF TRANSMITTAL IS FURNISHED
TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES OR
RIGHTS HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish us to tender any or all of
such Shares and Rights held by us for your account, pursuant to the terms and
conditions set forth in the Offer.
Your attention is invited to the following:
1. The tender price is $24.00 per Share, net to you in cash without
interest.
2. The Offer and withdrawal rights expire at 12:00 Midnight, New York
City time, on Thursday, March 30, 1995, unless the Offer is extended.
3. The Offer is being made for all outstanding Shares.
4. The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the Expiration Date a number of
Shares which, when added to the Shares beneficially owned by the
Purchaser and its affiliates, constitutes at least two-thirds of all
outstanding Shares on a fully diluted basis.
5. Shareholders who tender Shares and/or Rights will not be obligated to
pay brokerage commissions, solicitation fees or, except as set forth
in Instruction 6 of the Letter of Transmittal, transfer taxes on the
purchase of Shares and/or Rights by the Purchaser pursuant to the
Offer.
The Purchaser is not aware of any state where the making of the Offer is
prohibited by administrative or judicial action pursuant to any valid state
statute. If the Purchaser becomes aware of any valid state statute prohibiting
the making of the Offer or the acceptance of Shares or Rights pursuant thereto,
the Purchaser will make a good faith effort to comply with any such state
statute. If, after such good faith effort, the Purchaser cannot comply with any
such state statute, the Offer will not be made to (nor will tenders be accepted
from or on behalf of) the holders of Shares or Rights in such state. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer will be deemed to be made on
behalf of the Purchaser by the Dealer Manager or one or more registered brokers
or dealers licensed under the laws of such jurisdiction.
If you wish to have us tender any or all of your Shares and Rights, please
complete, sign and return to us the form set forth on the opposite page. An
envelope to return your instructions to us is enclosed. Your instructions to us
should be forwarded in ample time to permit us to submit a tender on your behalf
prior to the expiration of the Offer. If you authorize the tender of your Shares
and Rights, all such Shares and Rights will be tendered unless otherwise
specified on the instruction form set forth on the opposite page.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER
TO PURCHASE FOR CASH ALL OUTSTANDING COMMON SHARES
(INCLUDING THE ASSOCIATED PREFERENCE SHARE PURCHASE RIGHTS)
OF THE UNITED STATES SHOE CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase dated March 3, 1995 and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, constitute the "Offer")
relating to the offer by Luxottica Acquisition Corp., a Delaware corporation, to
purchase all outstanding common shares, without par value (the "Shares"), of The
United States Shoe Corporation, an Ohio corporation (the "Company"), including
(unless and until the Purchaser declares that the Rights Condition is satisfied)
the associated preference share purchase rights (the "Rights") issued pursuant
to the Rights Agreement, dated as of March 31, 1986, as amended by the First
Amendment to Rights Agreement, dated as of March 23, 1988, between the Company
and Morgan Shareholder Services Trust Company (as successor to Morgan Guaranty
Trust Company of New York) as Rights Agent, at a purchase price of $24.00 per
Share, net to the seller in cash without interest.
This will instruct you to tender to the Purchaser the number of Shares and
Rights indicated below (or if no number is indicated below, all Shares and
Rights) held by you for the account of the undersigned, upon the terms and
subject to the conditions set forth in the Offer.
Number of Shares and Rights SIGN HERE
to be Tendered:* ______________________________
______________________________
_____ SHARES AND RIGHTS Signature(s)
Account Number:___________________ ______________________________
Dated:__________________, 1995 ______________________________
______________________________
______________________________
Please print name(s) and
address(es) here
______________________________
Area Code and Telephone Number
______________________________
Tax Identification or
Social Security Number(s)
- ------------
* Unless otherwise indicated, it will be assumed that all of your Shares and
Rights held by us for your account are to be tendered.
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens; i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
- ------------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE
SOCIAL SECURITY
NUMBER OF--
- ------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals The actual owner of
(joint account) the account or, if
combined funds, any
one of the
individuals(1)
3. Husband and wife (joint The actual owner of
account) the account or, if
joint funds, either
person(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if the
account) minor is the only
contributor, the
minor(1)
6. Account in the name of The ward, minor, or
guardian or committee incompetent person(3)
for a designated ward,
minor or incompetent
person
7. a. The usual revocable The grantor-trustee(1)
savings trust
account (grantor is
also trustee)
b. So-called trust The actual owner(1)
account that is not a
legal or valid trust
under State law
8. Sole proprietorship The owner(4)
account
- ------------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE EMPLOYER
IDENTIFICATION
NUMBER OF--
- ------------------------------------------------------
9. A valid trust, estate, The legal entity (Do
or pension trust not furnish the
identifying number of
the personal
representative or
trustee unless the
legal entity itself is
not designated in the
account title.)(5)
10. Corporate account The corporation
11. Religious charitable, The organization
or educational
organization account
12. Partnership account The partnership
held in the name of the
business
13. Association, club, or The organization
other tax-exempt
organization
14. A broker or registered The broker or nominee
nominee
15. Account with the The public entity
Department of
Agriculture in the name
of a public entity
(such as a State or
local government,
school district, or
prison) that receives
agricultural program
payments
- ------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEE EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a), or an individual
retirement plan.
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or any
agency or instrumentality thereof.
. An international organization or any agency, or instrumentality thereof.
. A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a).
. An exempt charitable remainder trust, or a nonexempt trust described in
section 4947(a)(1).
. An entity registered at all times under the Investment Company Act of 1940.
. A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee
Payments of interest to generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid in
the course of the payer's trade or business and you have not provided your
correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
. Payments described in section 6049(b)(5) to non-resident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Payments made to a nominee
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER, IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. The IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file a tax return. Beginning January 1, 1984, payers must generally
withhold 20% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
under-payment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares. The Offer is made solely by the Offer to Purchase
dated March 3, 1995 and the related Letter of Transmittal and is being
made to all holders of Shares. The Offer is not being made to (nor will
tenders be accepted from or on behalf of) holders of Shares in any
jurisdiction in which the making of the Offer or the acceptance thereof
would not be in compliance with the laws of such jurisdiction. In
those jurisdictions where securities, blue sky or other laws require
the Offer to be made by a licensed broker or dealer, the Offer shall
be deemed to be made on behalf of Luxottica Acquisition Corp. by
CS First Boston Corporation ("CS First Boston") or one or more
registered brokers or dealers licensed under the laws of such
jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Common Shares
(Including the Associated Preference Share Purchase Rights)
of
The United States Shoe Corporation
at
$24.00 Net Per Share
by
Luxottica Acquisition Corp.
an indirect wholly owned subsidiary of
Luxottica Group S.p.A.
Luxottica Acquisition Corp., a Delaware corporation (the "Purchaser") and
an indirect wholly owned subsidiary of Luxottica Group S.p.A., a corporation
organized under the laws of the Republic of Italy ("Parent"), hereby offers to
purchase all outstanding Common Shares, without par value (the "Shares"), of
The United States Shoe Corporation, an Ohio corporation (the "Company"), and
the associated Rights (as defined in the Offer to Purchase), at a price of
$24.00 per Share, net to the seller in cash, without interest thereon, upon
the terms and subject to the conditions set forth in the Offer to Purchase
dated March 3, 1995 (the "Offer to Purchase") and in the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
constitute the "Offer").
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON THURSDAY, MARCH 30, 1995,
UNLESS THE OFFER IS EXTENDED.
The Offer is conditioned upon, among other things, (1) there being
validly tendered and not withdrawn prior to the expiration of the Offer a
number of Shares which, when added to the Shares beneficially owned by the
Purchaser and its affiliates, constitutes at least two-thirds of the Shares
outstanding on a fully diluted basis on the date of purchase, (2) the
acquisition of Shares pursuant to the Offer being authorized by the
shareholders of the Company pursuant to the Ohio Control Share Acquisition
Law, Section 1701.831 of the Ohio Revised Code ("Section 831"), or the
Purchaser being satisfied, in its sole discretion, that Section 831 is invalid
or inapplicable to the acquisition of Shares pursuant to the Offer, (3) the
Preference Share Purchase Rights (the "Rights") having been redeemed by the
Board of Directors of the Company or the Purchaser being satisfied, in its sole
discretion, that the Rights have been invalidated or are otherwise inapplicable
to the Offer and the Proposed Merger (as described below) (the "Rights
Condition"), (4) the Purchaser being satisfied, in its sole discretion, that
after consummation of the Offer the restrictions contained in the Ohio Business
Combination Law, Chapter 1704 of the Ohio Revised Code, will not apply to the
Proposed Merger, and (5) the Purchaser being satisfied, in its sole discretion,
that the Purchaser has obtained sufficient financing to enable it to
consummate the Offer and the Proposed Merger.
The purpose of the Offer is to acquire control of and the entire equity
interest in, the Company. Parent currently intends, as soon as practicable
following consummation of the Offer, to propose and seek to have the Company
consummate a merger or similar business combination with the Purchaser or
another direct or indirect wholly owned subsidiary of Parent (the "Proposed
Merger"), pursuant to which each then outstanding Share (other than Shares
owned by the Purchaser or Parent, Shares held in the treasury of the Company
and Shares owned by dissenting shareholders who perfect any available
dissenters' rights under the Ohio Revised Code), would be converted into the
right to receive an amount in cash equal to the price per Share paid pursuant
to the Offer.
The Purchaser expressly reserves the right, in its sole judgment, at any
time or from time to time and regardless of whether any of the events set forth
in Section 14 of the Offer to Purchase shall have been determined by the
Purchaser to have occurred, (i) to extend the period of time during which the
Offer is open and thereby delay acceptance for payment of and the payment for,
any Shares, by giving oral or written notice of such extension to the Depositary
(as defined in the Offer to Purchase) and (ii) to amend the Offer in any
respect by giving oral or written notice of such amendment to the Depositary.
Any such extension, amendment or termination will be followed as promptly as
practicable by public announcement thereof, such announcement in the case of
an extension to be issued not later than 9:00 A.M., New York City time, on the
next business day after the previously scheduled Expiration Date (as defined
in the Offer to Purchase). During any such extension, all Shares previously
tendered and not withdrawn will remain subject to the Offer, subject to the
right of a tendering shareholder to withdraw such shareholder's Shares.
If the Purchaser declares that the Rights Condition is satisfied, the
Purchaser will not require delivery of Rights. Unless and until the Purchaser
declares that the Rights Condition is satisfied, holders of Shares will be
required to tender one Right for each Share tendered to effect a valid tender
of such Share. If the Shares and Rights have not separated prior to the time
Shares are tendered pursuant to the Offer, a tender of Shares will constitute
a tender of the Rights. If such separation occurs and the certificates
representing Rights ("Rights Certificates") are distributed by the Company to
holders of Shares prior to the time a holder's Shares are tendered pursuant to
the Offer, in order for Rights (and the corresponding Shares) to be validly
tendered, Rights Certificates representing a number of Rights equal to the
number of Shares tendered must be delivered to the Depositary or, if book-entry
delivery is available with respect to Rights, a book-entry confirmation must
be received by the Depositary with respect thereto. If Shares and Rights are
to separate but Rights Certificates are not distributed prior to the time
Shares are tendered pursuant to the Offer, Rights may be tendered prior to
a shareholder receiving Rights Certificates by use of the guaranteed delivery
procedures described in the Offer to Purchase and below. In any case, a tender
of Shares constitutes an agreement by the tendering shareholder to deliver
Rights Certificates representing a number of Rights equal to the number of
Shares tendered pursuant to the offer to the Depositary within five (5)
business days after the date Rights Certificates are distributed. The Purchaser
reserves the right to require that the Depositary receive Rights Certificates,
or a book-entry confirmation, if available, with respect to such Rights prior
to accepting the corresponding Shares for payment pursuant to the Offer if
Rights Certificates have been distributed to holders of Shares at such time.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares and Rights validly tendered and not
withdrawn as, if and when the Purchaser gives oral or written notice to the
Depositary of the Purchaser's acceptance of such Shares and Rights for payment
pursuant to the Offer. In all cases, upon the terms and subject to the
conditions of the Offer, payment for Shares and Rights purchased pursuant to
the Offer will be made by deposit of the purchase price therefor with the
Depositary, which will act as agent for tendering shareholders for the purpose
of receiving payment from the Purchaser and transmitting payment to validly
tendering shareholders. Under no circumstances will interest on the purchase
price for Shares and Rights be paid by the Purchaser by reason of any delay in
making such payment. In all cases, payment for Shares and Rights purchased
pursuant to the Offer will be made only after timely receipt by the Depositary
of (a) certificates for such Shares ("Certificates") or a book-entry
confirmation of the book-entry transfer of such Shares into the Depositary's
account at The Depository Trust Company, the Midwest Securities Trust Company
or the Philadelphia Depository Trust Company (each a "Book-Entry Transfer
Facility" and, collectively, the "Book-Entry Transfer Facilities"), pursuant
to the procedures set forth in the Offer to Purchase, and, if the Distribution
Date (as defined in the Offer to Purchase) has occurred, certificates for the
associated Rights (or confirmation of a book-entry transfer of such Rights, if
available with respect to the Rights), (b) the Letter of Transmittal (or
facsimile thereof) properly completed and duly executed, with any required
signature guarantees, or an Agent's Message (as defined in the Offer to
Purchase) in connection with a book-entry transfer, and (c) any other
documents required by the Letter of Transmittal.
If, for any reason whatsoever, acceptance or payment of any Shares
tendered pursuant to the Offer is delayed, or if the Purchaser is unable to
accept for payment or pay for Shares tendered pursuant to the Offer, then,
without prejudice to the Purchaser's rights set forth in the Offer to Purchase,
the Depositary may, nevertheless, on behalf of the Purchaser, retain tendered
Shares and such Shares may not be withdrawn except to the extent that the
tendering shareholder is entitled to and duly exercises withdrawal rights as
described in the Offer to Purchase. Any such delay will be an extension of the
Offer to the extent required by law.
If certain events occur, the Purchaser will not be obligated to accept for
payment or pay for any Shares tendered pursuant to the Offer. If any tendered
Shares are not purchased pursuant to the Offer for any reason or are not paid
for because of invalid tender, or if Certificates are submitted representing
more Shares than are tendered, Certificates representing unpurchased or
untendered Shares or Rights will be returned, without expense to the tendering
shareholder (or, in the case of Shares or Rights delivered by book-entry
transfer into the Depositary's account at a Book-Entry Transfer Facility
pursuant to the procedures set forth in Section 3 of the Offer to Purchase,
such Shares or Rights will be credited to an account maintained within such
Book-Entry Transfer Facility), as soon as practicable following the expiration,
termination or withdrawal of the Offer.
Except as otherwise provided in Section 4 of the Offer to Purchase,
tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered
pursuant to the Offer may be withdrawn any time prior to 12:00 Midnight, New
York City time, on Thursday, March 30, 1995 (or if the Purchaser shall have
extended the period of time for which the Offer is open, at the latest time
and date at which the Offer, as so extended by the Purchaser, shall expire)
and unless theretofore accepted for payment and paid for by the Purchaser
pursuant to the Offer, may also be withdrawn at any time after May 1, 1995. In
order for a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of the Offer to Purchase. Any
notice of withdrawal must specify the name of the person who tendered the
Shares and Rights to be withdrawn, the number of Shares and Rights to be
withdrawn and, if Certificates for Shares or Rights have been tendered, the
name of the registered holder of the Shares and Rights as set forth in the
tendered Certificate, if different from that of the person who tendered such
Shares and Rights. If Certificates for Shares or Rights have been delivered or
otherwise identified to the Depositary, then prior to the physical release
of such Certificates, the tendering shareholder must submit the serial numbers
shown on the particular Certificates evidencing the Shares or Rights to be
withdrawn and the signature on the notice of withdrawal must be guaranteed by
a firm which is a bank, broker, dealer, credit union, savings association or
other entity that is a member in good standing of the Securities Transfer
Agent's Medallion Program (an "Eligible Institution"), unless such Shares or
Rights have been tendered for the account of an Eligible Institution. If Shares
and Rights have been tendered pursuant to the procedures for book-entry
transfer set forth in Section 3 of the Offer to Purchase, the notice of
withdrawal must specify the name and number of the account at the appropriate
Book-Entry Transfer Facility to be credited with the withdrawn Shares and
Rights, in which case a notice of withdrawal will be effective if delivered to
the Depositary by any method of delivery described in the Offer to Purchase.
Withdrawals of Shares and Rights may not be rescinded. Any Shares and Rights
properly withdrawn will be deemed not validly tendered for purposes of the
Offer, but may be retendered at any subsequent time prior to the Expiration
Date by following any of the procedures described in Section 3 of the Offer to
Purchase. The Purchaser, in its sole judgment, will determine all questions as
to the form and validity (including time of receipt) of notices of withdrawal
and such determination will be final and binding.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
A request is being made to the Company for use of the Company's
shareholder lists and security position listing for the purpose of disseminating
the Offer to holders of Shares and Rights. Upon compliance by the Company with
such request, the Offer to Purchase, the related Letter of Transmittal and
other relevant materials will be mailed to record holders of Shares and will
be furnished to brokers, dealers, commercial banks, trust companies and
similar persons whose names, or the names of whose nominees, appear on the
shareholder list, or, if applicable, who are listed as participants in a
clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares and Rights.
The Offer to Purchase and the related Letter of Transmittal contain
important information which should be read carefully before any decision is
made with respect to the Offer.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone
numbers set forth below. Requests for copies of the Offer to Purchase, the
Letter of Transmittal and other related material may be directed to the
Information Agent, the Dealer Manager or to brokers, dealers, commercial banks
or trust companies.
The Information Agent for the Offer is:
MacKenzie
Partners, Inc.
156 Fifth Avenue
New York, NY 10010
(212) 929-5500 (Call Collect)
or
Call Toll-Free (800) 322-2885
The Dealer Manager for the Offer is:
CS First Boston
Park Avenue Plaza
55 East 52nd Street
New York, NY 10055
(212) 909-2000 (call Collect)
March 3, 1995
FOR IMMEDIATE RELEASE:
Joint Release of Luxottica Group S.p.A. and Luxottica Acquisition
Corp.
FOR FURTHER INFORMATION:
Call Susi Belli (Luxottica Group Investor Relations Manager)
c/o Dewe Rogerson at (212) 688-6840 or
Mark Harnett (MacKenzie Partners, Inc., Information Agent) at
(212) 929-5877
LUXOTTICA GROUP S.p.A. COMMENCES TENDER OFFER FOR THE
COMMON SHARES OF THE UNITED STATES SHOE CORPORATION
---------------------------------------------------
New York, USA and Milan, Italy, March 3, 1995 -- Luxottica Group
S.p.A. and Luxottica Acquisition Corp., an indirect wholly owned
subsidiary of Luxottica Group S.p.A. (NYSE: LUX), announced today
that they had commenced a tender offer (the "Offer") to acquire
all outstanding common shares, and associated preference share
purchase rights, of The United States Shoe Corporation (NYSE:
USR) at a price of $24.00 net per share. The Offer will expire
at Midnight, New York City Time, on Thursday, March 30, 1995,
unless extended. Luxottica Group S.p.A. intends, as promptly as
practicable following consummation of the Offer, to consummate a
merger or other similar business combination with The United
States Shoe Corporation.
According to its most recent Quarterly Report, The United States
Shoe Corporation ("US Shoe"), headquartered in Cincinnati, Ohio,
is a specialty retailing company operating 2,333 retail outlets
and leased departments in the United States, Puerto Rico and
Canada. Its specialty retailing business consists of optical,
footwear and women's apparel divisions. US Shoe's optical
division, Lenscrafters, is the largest group of optical
superstores in North America with 530 domestic optical retailing
stores and leased departments and 59 stores in Canada at January
31, 1995. For the twelve months ended January 31, 1995,
Lenscrafters reported revenues of $706 million, an increase of
13.3% from the same period last year.
The purpose of the Offer is to acquire the entire equity interest
in US Shoe. Although Luxottica Group S.p.A. has not adopted any
firm plans, it presently intends to sell or otherwise dispose of
US Shoe's footwear and women's apparel divisions, subject to its
obtaining access to, and conducting a detailed review of, such
operations.
The terms of the Offer are contained in an offer to purchase and
related letter of transmittal, copies of which are being filed
today with the Securities and Exchange Commission. The Offer is
conditioned, among other things, on (i) there being validly
tendered a number of shares which, when added to the shares
<PAGE>
beneficially owned by Luxottica Acquisition Corp. and its
affiliates, will constitute at least two-thirds of the US Shoe
shares outstanding, (ii) the acquisition of shares pursuant to
the Offer being authorized by the shareholders of US Shoe, or
Luxottica Acquisition Corp. being satisfied that the control
share acquisition provisions of the Ohio Revised Code will be
invalid or inapplicable to the acquisition of shares pursuant to
the Offer, (iii) the Board of Directors of US Shoe having
redeemed the Corporation's preference share purchase rights or
Luxottica Acquisition Corp. being satisfied that the preference
share purchase rights have been invalidated or will otherwise be
inapplicable to the Offer and any proposed merger, (iv) Luxottica
Acquisition Corp. being satisfied that after consummation of the
Offer, the business combination provisions of the Ohio Revised
Code will be inapplicable to any proposed merger and (v)
Luxottica Acquisition Corp. having obtained sufficient financing
to consummate the Offer and any proposed merger.
Luxottica Acquisition Corp. has been organized in connection with
the Offer and has not carried on any activities other than in
connection with the Offer.
Luxottica Group S.p.A. announced that it has obtained a
commitment from Credit Suisse to provide a $1.45 billion credit
facility which will be used to finance the Offer and for working
capital purposes.
Luxottica Acquisition Corp. today also announced that Claudio Del
Vecchio, Managing Director of Luxottica Group S.p.A., is
delivering the following letter this morning to Bannus Hudson,
Chief Executive Officer and President of US Shoe:
Mr. Bannus B. Hudson
President and Chief Executive Officer
The United States Shoe Corporation
One Eastwood Drive
Cincinnati, Ohio 45227
Dear Ban:
As you well know, we have expressed to you on a number of
occasions our strong interest in acquiring The United States
Shoe Corporation ("US Shoe"). In a series of telephone
calls and meetings beginning in December 1994, we, along
with our financial advisor CS First Boston Corporation ("CS
First Boston"), advised you and other members of senior
management of US Shoe and its financial advisor that
Luxottica Group S.p.A. ("Luxottica") was interested in
exploring the acquisition of US Shoe by means of an all cash
merger transaction involving the payment to your
shareholders of a price representing a substantial premium
above the then current market value of US Shoe's common
shares. In the course of these conversations, we, along
<PAGE>
with CS First Boston, requested access to non-public
information concerning US Shoe so that we could insure that
our proposed cash offer would be fully-valued. In response
to our request, US Shoe attempted to procure a standstill
agreement that would preclude Luxottica from proposing an
offer directly to your shareholders for a minimum of two
years. We consider this response to be inconsistent with
both our objectives and the best interests of your
shareholders.
We are disappointed by US Shoe's failure to respond
satisfactorily to our proposal to negotiate a merger
transaction and our request for access to non-public
information. While we would have preferred to negotiate a
transaction with you, we feel that we have no choice but to
present a proposal directly to your shareholders.
Accordingly, Luxottica and Luxottica Acquisition Corp., an
indirect wholly-owned subsidiary of Luxottica, are today
commencing a tender offer for all the outstanding common
shares (and the associated preference share purchase rights)
of US Shoe at a price of $24.00 net per share in cash. It
is our intention to acquire any shares not purchased in the
tender offer for the same cash consideration pursuant to a
merger. As described in our offering materials, we have
received commitments for all funds necessary to effect the
offer.
We believe that an all cash price of $24.00 net per share
for all shares presents an extremely attractive opportunity
to US Shoe's shareholders. Over the past twelve months, US
Shoe's common shares have traded as low as $13.50 per share.
Our offer represents more than a 75% premium over that price
and a 28% premium over yesterday's reported closing price on
the NYSE Composite Tape.
In light of the attractive terms of our offer, we request
that US Shoe's Board of Directors make appropriate
determinations so that the preference share purchase rights
and the restrictions provided in the Ohio Business
Combination Law are rendered inapplicable to our offer and
the proposed merger.
It is our hope that we can proceed toward a transaction with
a minimum of delay. Accordingly, we are prepared to begin
immediate negotiations of a definitive merger agreement
containing mutually agreeable terms and conditions for an
acquisition transaction at a price of $24.00 net per share.
Sincerely yours,
Claudio Del Vecchio
Managing Director
<PAGE>
Luxottica Group S.p.A., based in Italy, is a world leader in the
design, manufacture and marketing of high quality eyeglass frames
and sunglasses in the mid and premium price categories.
Luxottica's products, which are designed and manufactured in four
facilities located in Italy and include over 1,700 styles
available in a wide array of colors and sizes, are sold through
wholly-owned subsidiaries in the USA, Canada, Italy, France,
Spain, Portugal, Sweden, Germany, United Kingdom, Brazil,
Switzerland and Mexico, through 51%-owned distributors in
Belgium, Netherlands, and Finland, through a 50% joint venture in
Japan, through a 75% controlled company in Austria and through a
75.5% controlled company in Greece. Luxottica's US operations in
fiscal year 1994, accounted for 39.5% of Luxottica's total
consolidated sales.
Luxottica Group S.p.A., listed its American Depositary Shares on
the New York Stock Exchange in January 1990. The Company's
shares are traded only on the NYSE. In fiscal year 1994, the
Company reported revenues of $504.3 million, up 20.2% and
consolidated net income of $77.5 million, an increase of 32.4%
over the comparable 1993 period.
CS First Boston Corporation is acting as Dealer Manager for the
Offer and as Luxottica's exclusive financial advisor with respect
to the proposed acquisition of Luxottica. MacKenzie Partners,
Inc. is acting as Information Agent for the Offer.
Exhibit (b)(1)
[Letterhead of Credit Suisse]
March 2, 1995
Luxottica Group S.p.A.
Via Valcozzena 10
32021 Agordo (Belluno)
Italy
Attention: Roberto Chemello
Chief Financial Officer
re Senior Secured Financing
----------------------------
Gentlemen:
You have advised Credit Suisse ("CS") that (x) a
newly-formed indirect wholly-owned subsidiary of Luxottica
Group S.p.A. ("Luxottica Group"), which subsidiary ("Newco
1") shall be incorporated under the laws of Delaware,
intends to acquire, through another newly-formed indirect
wholly-owned Delaware subsidiary of Luxottica Group
("Bidco"), the issued and outstanding shares of common
stock (the "Shares") (calculated on a fully-diluted basis)
of a company previously identified to us and incorporated
under the laws of Ohio ("Target") by means of a takeover
bid (the "Tender Offer") and (y) as soon as practicable
after the purchase of the Shares under the Tender Offer,
Bidco shall effect a merger pursuant to which Bidco will be
merged with and into Target (the "Merger"), and as a result
of the Merger, Target shall become an indirect wholly-owned
subsidiary of Luxottica Group. The Tender Offer and the
Merger are referred to herein as the "Acquisition." CS
understands that (i) Avant-Garde Optics, Inc. ("Avant-
Garde"), currently a direct wholly-owned subsidiary of
Luxottica Group, will prior to (or concurrently with) the
consummation of the Tender Offer become an approximately
99.9% subsidiary of Newco 1, with the remaining equity
interest in Avant-Garde of approximately .1% to be owned by
Luxottica Group and (ii) Bidco's direct parent company will
be Avant-Garde.
CS further understands that senior secured bank
financing (the "Senior Secured Financing") is required by
Newco 1 in connection with the Acquisition, and that such
Senior Secured Financing will be in the form of (i) a term
loan facility in the
<PAGE>
amount of U.S. $1.0 billion (the "Term Loan Facility") and
(ii) a revolving credit facility in the amount of U.S. $450
million (the "Revolving Credit Facility" and, together with
the Term Loan Facility, the "Credit Facility"). A summary
of certain of the terms and conditions of the Credit
Facility are set forth in the attached Summary of Certain
Terms and Conditions (the "Term Sheet").
CS also understands that the proceeds from the
Credit Facility shall be used to finance the acquisition of
Shares pursuant to the Tender Offer, to refinance existing
indebtedness of Target after giving effect to the Merger,
to pay consideration in connection with the Merger, to pay
related fees and expenses in connection with the
Acquisition and to provide for the working capital and
general corporate needs of Newco 1 and its subsidiaries.
CS further understands that the Credit Facility will be (i)
guaranteed on a joint and several basis by Luxottica Group,
Luxottica S.p.A. and La Meccanoptica Leonardo S.p.A. (the
"Luxottica Guarantors"), (ii) guaranteed on a joint and
several basis by all subsidiaries of Newco 1, (iii)
guaranteed on a joint and several basis by all other U.S.
subsidiaries of Luxottica Group and (iv) secured by (x)
100% of the capital stock of Newco 1 and Avant-Garde and
(y) substantially all of the assets of Newco 1 and its
subsidiaries.
CS is pleased to advise you of its commitment to
provide, subject to the terms and conditions contained in
this letter and in the Term Sheet, 100% of the Credit
Facility. In connection with the Senior Secured Financing,
CS shall act as sole administrative agent. CS reserves the
right, prior to or after execution of the definitive credit
documentation for the Credit Facility, to syndicate all or
part of its commitments to one or more financial
institutions or other "accredited investors" (as defined in
Regulation D of the Securities Act of 1933, as amended)
(collectively, the "Lenders" and each a "Lender") that will
become parties to such definitive credit documentation
pursuant to a syndication to be managed by CS. You agree
actively to assist CS in achieving a syndication that is
satisfactory to CS and to you. Such syndication will be
accomplished by a variety of means, including direct
contact during the syndication between your senior
management and advisors and the proposed Lenders. Without
limiting our commitment as set forth above, your assistance
in connection with the syndication will also include, if CS
so requests, your restructuring, in a manner mutually
acceptable to CS and you, the component facilities of the
Senior Secured Financing if, in our judgment, such
restructuring would result in a successful syndication,
provided that in no event will the aggregate amount of the
Credit Facility be reduced or the aggregate pricing be
increased. To assist CS in its syndication efforts, you
hereby agree (i) to provide and cause your advisors to
provide CS and the other Lenders upon request with all
reasonable information deemed necessary by us to complete
syndication, including but not limited to, information and
evaluations prepared by you, (ii) to assist CS upon request
in the preparation of an Information Memorandum to be used
in connection with the syndication of the Senior Secured
Financing, including making available your officers from
time to time to attend and make presentations regarding the
business and prospects of Luxottica Group and its
subsidiaries and Target and its subsidiaries, as
-2-
<PAGE>
appropriate, at a meeting or meetings of Lenders or
prospective Lenders and (iii) to use your reasonable
efforts to ensure that the syndication benefits from your
existing bank relationships.
As you are aware, we have reviewed certain
historical and projected pro forma financial statements of
Luxottica Group and its subsidiaries prior to giving effect
to the Acquisition, and of Newco 1 and its subsidiaries
after giving effect to the Acquisition and are satisfied
with the results thereof. If additional information comes
to our attention which we reasonably believe is materially
negative information with respect to the business,
property, assets, operations, liabilities, condition
(financial or otherwise) or prospects of the Acquisition,
Luxottica Group and its subsidiaries or Target and its
subsidiaries, we may, in our sole discretion, suggest
alternative financing amounts or structures that assure
adequate protection for the Lenders or decline to provide
or participate in the proposed financing.
CS's commitments in respect of the Senior Secured
Financing are also expressly subject to (i) the absence of
any material adverse change after the date hereof in the
market for syndicated facilities similar in nature to the
Senior Secured Financing and the absence of any material
disruption of or a material adverse change in financial,
banking or capital markets generally, in each case as
determined by us in our sole discretion, (ii) the absence,
prior to and during the syndication of the Credit Facility,
of any competing bank credit facilities of Luxottica Group
and its subsidiaries being arranged, offered or placed in
connection with the Acquisition and (iii) your not
commencing the Tender Offer until CS shall have notified
you in writing that the Information Memorandum referred to
above is finalized.
You hereby represent and covenant that (i) all
information, other than the Projections (as defined below),
which has been or is hereafter made available to CS or the
other Lenders by you or any of your representatives in
connection with the transactions contemplated hereby (the
"Information") is and will be complete and correct in all
material respects and does not and will not contain any
untrue statement of a material fact or omit to state a
material fact necessary to make the statements contained
therein not materially misleading (it being understood by
CS that any representation by you as to any information
relating to Target and its subsidiaries is made to your
best knowledge and is based solely on publicly available
information) and (ii) all financial projections concerning
Luxottica Group and its subsidiaries and Target and its
subsidiaries that have been or are hereafter made available
to CS or the other Lenders by you in connection with the
transactions contemplated hereby (the "Projections") have
been or will be prepared in good faith based upon
reasonable assumptions. You agree to supplement the
Information and the Projections from time to time until the
closing date of the Tender Offer so that the representation
and warranty in the preceding sentence is true and correct
on such closing date. You acknowledge that in arranging
and syndicating the Senior Secured Financing, CS will be
-3-
<PAGE>
using and relying on the Information and Projections
without independent verification thereof. In issuing this
commitment and undertaking, as the case may be, CS is
relying on the accuracy of the information furnished by you
or on your behalf.
Whether or not the transactions contemplated by
this letter are consummated, you hereby agree to indemnify
and hold harmless CS and each of the other Lenders, each
affiliate thereof (including CS First Boston Corporation)
and each director, officer, employee, agent or
representative thereof (each an "indemnified person") in
connection with any losses, claims, damages, liabilities or
other expenses to which such indemnified persons may become
subject, insofar as such losses, claims, damages,
liabilities (or actions or other proceedings commenced or
threatened in respect thereof) or other expenses arise out
of or in any way relate to or result from the Acquisition,
this letter, or the extension of the Senior Secured
Financing contemplated by this letter, or in any way arise
from any use or intended use of this letter or the proceeds
of any of the Senior Secured Financing contemplated by this
letter, and you agree to reimburse each indemnified person
for any legal or other expenses incurred in connection with
investigating, defending or participating in any such loss,
claim, damage, liability or action or other proceeding
(whether or not such indemnified person is a party to any
action or proceeding out of which indemnified expenses
arise), provided that you shall have no obligation
hereunder to indemnify any indemnified person for any loss,
claim, damage, liability or expense which resulted primar-
ily from the gross negligence or willful misconduct of such
indemnified person. This letter is furnished for your
benefit, and may not be relied upon by any other person or
entity. Neither CS nor any other Lender shall be respon-
sible or liable to you or any other person for
consequential damages which may be alleged as a result of
this letter.
In addition, whether or not the transactions
contemplated by this letter are consummated, you hereby
agree to pay upon request but not prior to the earlier of
(i) any termination of the commitments under this letter
and (ii) the Closing Date, all out-of-pocket costs and
expenses (including the reasonable fees and expenses of
U.S., Italian and such other local counsel as may be
retained by CS in connection with the transactions
contemplated hereby) incurred by CS and its affiliates in
connection with the preparation, execution and delivery of
this letter and the Credit Facility and our due diligence
and syndication efforts in connection therewith (which
costs and expenses shall include, but not be limited to,
printing, distribution, transportation, computer,
duplication, audit, insurance, third party consultants
(which, if retained, shall be done in consultation with
you), bank meetings, UCC, judgment, tax lien and similar
searches and recording and filing fees).
CS reserves the right to employ the services of
its affiliates (including CS First Boston Corporation) in
providing the services contemplated by this letter and to
allocate, in whole or in part, to such affiliates certain
fees payable to CS in such manner as CS and its affiliates
may agree in their sole discretion. You acknowledge that
CS may share with any of its affiliates, and such
affiliates may share with CS, any information relating
-4-
<PAGE>
to Luxottica Group and its affiliates and subsidiaries or
Target and its affiliates and subsidiaries (including,
without limitation, any non-public customer information
regarding the creditworthiness of such entities) or the
Acquisition, subject to CS's customary treatment of
customer confidential information. You should also be
aware that CS or its respective affiliates may be providing
financing or other services to parties whose interests may
conflict with yours. However, be assured that, consistent
with its long-standing policies to hold in confidence the
affairs of our customers, CS and its affiliates will not
furnish information obtained from you to any of our other
customers.
The provisions of the immediately preceding three
paragraphs shall survive any termination of this letter.
CS's willingness to provide the Senior Secured
Financing as set forth above will terminate on July 3,
1995, if definitive documentation evidencing the Senior
Secured Financing, satisfactory in form and substance to
CS, shall not have been entered into prior to such date and
the Tender Offer shall not have been consummated. You
shall have the right, at any time upon written notice to
CS, to terminate the commitments of CS under this letter.
You are not authorized to disclose this letter or
its contents to any other person or entity other than your
legal and financial advisors in connection with your
evaluation of this letter until such time as you have
accepted this letter and the accompanying fee letter as
provided in the immediately succeeding paragraph. You
agree that this letter is for your confidential use only
and will not be disclosed by you to any person or entity
other than your accountants, attorneys and other advisors,
and then only in connection with the Credit Facility and on
a confidential basis, except that, following your
acceptance of this letter, you may make public disclosure
of the existence and amount of CS's commitment, you may
file a copy of this letter in any public record in which it
is required by law to be filed and you may make such other
public disclosures of the terms and conditions hereof as
you are required by law, in the opinion of your counsel, to
make.
This letter and the rights and obligations of the
parties hereunder shall be construed in accordance with and
governed by the law of the State of New York. You hereby
irrevocably waive all right to trial by jury of any
actions, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to
this letter, the transactions contemplated hereby or the
actions of CS in negotiation, performance or enforcement
hereof. If you are in agreement with the foregoing, please
sign and return to us (including by way of facsimile) the
enclosed copy of this letter, together with a copy of the
fee letter enclosed herewith and any amounts then payable
thereunder, no later than 11:59 P.M. (New York time) on
March 6, 1995. If you decide not to take the foregoing
actions, you are to return all copies of this letter and
such fee letter to CS as promptly as
-5-
<PAGE>
possible and in such event you are not authorized to
disclose this letter or the contents thereof to any other
party (except as may be required by applicable law or an
order of a court of competent jurisdiction).
Very truly yours,
CREDIT SUISSE
By /s/ Chris T. Horgan
---------------------------
Title: Associate
By /s/ J. Hamilton Crawford
---------------------------
Title: Associate
Agreed to and Accepted this
day of March 1995
---
LUXOTTICA GROUP S.p.A.
By /s/ Claudio Del Vecchio
-----------------------
Title: Managing Director
-6-
<PAGE>
SUMMARY OF CERTAIN TERMS
AND CONDITIONS*
---------------------------------
I. Description of the Credit Facility
----------------------------------
A. Description of the Term Loan Facility
-------------------------------------
Amount: $1.0 billion.
Maturity: The sixth anniversary of the date of
initial borrowing under the Senior
Secured Financing, which date shall be
the date on which the Tender Offer is
consummated (the "Closing Date"). The
loans under the Term Loan Facility
("Term Loans") shall amortize quarterly
on the dates, and in the amounts, set
forth below:
Date Amount
---- ------
12/31/95 $25 million
3/31/96 $25 million
6/30/96 $25 million
9/30/96 $25 million
12/31/96 $25 million
3/31/97 $25 million
6/30/97 $25 million
9/30/97 $25 million
12/31/97 $25 million
3/31/98 $25 million
6/30/98 $25 million
9/30/98 $25 million
12/31/98 $25 million
3/31/99 $25 million
6/30/99 $30 million
9/30/99 $30 million
12/31/99 $30 million
3/31/2000 $25 million
--------------------
* All capitalized terms used herein but not defined herein
shall have the meanings provided in the Commitment Letter
to which this summary is attached.
<PAGE>
6/30/2000 $25 million
9/30/2000 $25 million
12/31/2000 $25 million
3/31/2001 $25 million
6/30/2001 $10 million
On a date (to be selected by the Borrower,
such date, the "Additional Amortization Date")
within 18 months following the Closing Date
(or if no such date is selected, on the 18th
month anniversary of the Closing Date), the
Borrower also shall be required to repay an
additional $425 million of Term Loans.
In the event that less than $1.0
billion of Term Loans are incurred, the
amortization payments set forth
above (including as an amortization payment,
for all purposes herein the payment required
on the Additional Amortization Date) will be
reduced on a pro rata basis.
--- ----
Use of Proceeds: Term Loans shall be contributed as
a cash equity contribution by the
Borrower (as defined below) to
Avant-Garde, which in turn shall
immediately contribute such amount
as a cash equity contribution to
Bidco and shall only be utilized
by Bidco (i) to finance the
Acquisition and (ii) to pay fees
and expenses incurred in con-
nection with the Acquisition.
Availability: Term Loans may only be incurred on
(i) the Closing Date and (ii) the
date that the Merger is
consummated. No amount of Term
Loans once repaid may be rebor-
rowed.
B. Description of the Revolving Credit Facility
--------------------------------------------
Amount: $450 million. A portion (to be
determined) of the Revolving Credit
Facility may be utilized to issue
commercial and standby letters of
credit (collectively, the "Letters of
Credit") to support specified
obligations of the Borrower and its
subsidiaries reasonably acceptable to
the Administrative Agent. The
Revolving Credit Facility will provide
protective provisions for the Lender
issuing the Letters of Credit and
making the Swingline Loans (as defined
below) in the event that any other
Lender cannot meet its obligations
thereunder as a result of such Lender
being taken over by any regulatory
authority or agency.
CS, in its individual capacity, shall,
if requested by the Borrower, make
loans (the "Swingline Loans", and
together with the Revolving Loans (as
defined below) and the Term Loans, the
"Loans") provided that such Swingline
Loans (i) shall be maintained at all
times as Base Rate Loans (as
-2-
<PAGE>
described below), (ii) shall not
exceed in the aggregate at any time
outstanding an amount to be determined
and (iii) may only be incurred if there
is sufficient availability under the
Revolving Credit Facility at such time
(with Swingline Loans being treated as
an incurrence of Revolving Loans for
purposes of determining availability
pursuant to the Revolving Credit
Facility, but not for purposes of cal-
culating Commitment Fees as described
below). The Credit Facility shall
contain mechanisms which allow CS to
require that the Lenders, in proportion
to their respective commitments, fund
borrowings of Revolving Loans to
refinance any outstanding Swingline
Loans, regardless of whether any
conditions to borrowing could then be
met.
Maturity: The sixth anniversary of the Closing
Date, with all Loans made under the
Revolving Credit Facility (the
"Revolving Loans"), including all
Swingline Loans, to be repaid in full
on such date and all Letters of Credit
to expire on or before such date.
Use of Proceeds: The proceeds of Revolving Loans
and Swingline Loans shall 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
Term Loans and to refinance no
more than approximately $140
million of existing indebtedness
of Target after giving effect to
the Merger.
Availability: Revolving Loans and Swingline
Loans may be borrowed, repaid and
reborrowed on and after the
Closing Date, provided that (i)
--------
Revolving Loans and Swingline
Loans may only be incurred after
the Term Loan Facility has been
(or concurrently is being) fully
utilized, (ii) Revolving Loans and
Swingline Loans incurred for
purposes other than to finance the
purchase of Shares pursuant to the
Tender Offer and to pay fees and
expenses incurred in connection
with the Acquisition may only be
incurred after (or concurrently
with) the consummation of the
Merger and (iii) for a period of
30 consecutive days (to be
determined) during each twelve
month period after the Closing
Date no more than a
-3-
<PAGE>
certain amount (to be determined) of
Revolving Loans and Swingline Loans may
be outstanding.
Drawdowns: Drawdowns of Revolving Loans will
be available in minimum amounts of
$10 million with additional
increments of $1 million.
Drawdowns of Swingline Loans will
be available in minimum amounts of
$1 million. Swingline Loans may be
drawn down on same day notice,
Revolving Loans maintained as Base
Rate Loans may be drawn down on
one business day's prior notice,
Revolving Loans maintained as
Eurodollar Loans may be drawn down
on three business days' prior
notice and Letters of Credit may
be issued on five business days'
prior notice (or such shorter
period of time as may be
acceptable to the issuing Lender).
II. Terms Applicable to the
Term Loan Facility and the
Revolving Credit Facility
----------------------------
Borrower: Newco 1 (the "Borrower").
Administrative Credit Suisse ("CS").
Agent:
Lenders: A syndicate of lenders (the "Lenders")
formed by CS.
Guaranties: Luxottica Group and the other
Luxottica Guarantors, all direct
and indirect subsidiaries of the
Borrower and all other U.S.
subsidiaries of Luxottica Group
(each a "Guarantor" and,
collectively, the "Guarantors")
shall be required to provide an
unconditional guaranty of all
amounts owing under the Credit
Facility (the "Guaranties"),
subject to exceptions satisfactory
to the Administrative Agent.
The Guaranties shall contain terms and
conditions satisfactory to the
Administrative Agent, including, in the
case of Luxottica Group and the other
Luxottica Guarantors, a negative pledge
(with appropriate exceptions to be
determined). The Guaranty given by
each Luxottica
-4-
<PAGE>
Guarantor shall provide that (i) in the
case of a payment default under the
Credit Facility, an acceleration based
upon a payment default or a bankruptcy
or insolvency of such Luxottica
Guarantor or the Borrower, the Lenders
may immediately call on such Guaranty
and (ii) in all other cases, the
Lenders may call on such Guaranty only
after making formal written demand (to
the extent such demand is permitted to
be made under applicable law) on the
Borrower and all U.S. Guarantors and
such demand has not been fully complied
with within a specified number of days.
Security: All amounts owing under the Credit
Facility (and all obligations under the
Guaranties) will be secured by (x) a
first priority perfected pledge of (A)
all capital stock of the Borrower and
Avant-Garde and (B) 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 after
the Merger) as well as all notes and
capital stock owned by all other U.S.
subsidiaries of Luxottica Group and (y)
a first priority perfected security
interest in substantially all other
assets (including receivables,
contracts, contract rights, securities,
patents, trademarks, other intellectual
property, inventory, equipment and real
estate (other than leasehold
interests)) owned by the Borrower and
its subsidiaries and by all other U.S.
subsidiaries of Luxottica Group,
subject (in each case) to exceptions
satisfactory to the Administrative
Agent. The Credit Facility will also
be secured by a negative pledge on
substantially all assets of Luxottica
Group and its subsidiaries, including
the capital stock of Luxottica Group's
non-U.S. subsidiaries.
All documentation evidencing the
security required pursuant to the
immediately preceding paragraph shall
be in form and substance satisfactory
to the Administrative Agent, and shall
effectively create first priority
security interests in the property
purported to be covered thereby, with
such exceptions as are acceptable to
the Administrative Agent in its sole
discretion.
Interest Rates: At the option of the
Borrower, Loans under the
Credit Facility may be
maintained from time to time
as (x) Base
-5-
<PAGE>
Rate Loans which shall bear interest at
the Applicable Margin in excess of the
Base Rate in effect from time to time
or (y) except for Swingline Loans,
Eurodollar Loans which shall bear
interest at the Applicable Margin in
excess of the Eurodollar Rate as
determined by three reference Lenders
for the respective interest period.
"Base Rate" shall mean the higher of
(x) 1/2 of 1% in excess of the Federal
Reserve reported certificate of deposit
rate and (y) the rate that the
Administrative Agent announces from
time to time as its base rate, as in
effect from time to time.
"Applicable Margin" for the Loans shall
mean a percentage per annum equal to
(x) in the case of Base Rate Loans,
1.00% and (y) in the case of Eurodollar
Loans, 2.00%, provided that the
foregoing percentages shall be subject
to an adjustment (upward or downward)
(as has been agreed to) during such
times as (i) the ratio of Total Debt to
EBITDA (to be defined) and the ratio of
EBITDA to Interest Expense (to be
defined) achieve certain thresholds as
has been agreed to and (ii) no default
or event of default under the Credit
Facility exists.
Interest periods of 1, 2, 3, 6 and,
subject to availability by all Lenders,
9 and 12 months shall be available in
the case of Eurodollar Loans.
The Credit Facility shall include the
standard protective provisions for such
matters as defaulting banks, capital
adequacy, increased costs, reserves,
funding losses, illegality and with-
holding taxes.
Interest in respect of Base Rate Loans
shall be payable quarterly in arrears
on the last business day of each
calendar quarter. Interest in respect
of Eurodollar Loans shall be payable in
arrears at the end of the applicable
interest period and every three months
in the case of interest periods in
excess of three months. Interest will
also be payable at the time of repay-
ment of any Loans and at maturity. All
interest on Base Rate Loans and
commitment fee and other fee
calculations shall be based on a
365/366-day year and actual
-6-
<PAGE>
days elapsed. All interest on
Eurodollar Loans shall be based on a
360-day year and actual days elapsed.
Default Interest: Overdue principal, interest and
other amounts shall bear interest
at a rate per annum equal to the
greater of (i) the rate which is
2% in excess of the rate otherwise
applicable to Base Rate Loans from
time to time and (ii) the rate
which is 2% in excess of the rate
then borne by such borrowings.
Such interest shall be payable on
demand.
Voluntary Voluntary prepayments may be made
Prepayments: at any time without premium or penalty,
provided that voluntary prepayments of
Eurodollar Loans made on a date
other than the last day of an interest
period applicable thereto shall be
subject to customary breakage costs.
Voluntary prepayments of Term Loans
shall be applied to reduce future
scheduled amortization payments on a
pro rata basis (based on the amount of
--- ----
remaining amortization payments).
Mandatory Repay- Mandatory repayments of Term
ments: Loans to be required from (a) 100% of
the net proceeds from asset sales by
Luxottica Group and its subsidiaries
(including the Borrower and its
subsidiaries) (other than certain
ordinary course of business exceptions
to be mutually agreed upon), (b)
100% of the net proceeds from issuances
of debt (with appropriate exceptions to
be mutually agreed upon) by Luxottica
Group and its subsidiaries (including the
Borrower and its subsidiaries), (c) 100%
of the net proceeds from equity
issuances or capital contributions by
(or to) Luxottica Group and its
subsidiaries (including the Borrower and
its subsidiaries) (with appropriate
exceptions to be mutually agreed upon),
(d) 75% of annual excess cash flow of
Luxottica Group and its subsidiaries
(including the Borrower and its
subsidiaries) (the definition of which
will be mutually agreed upon) and (e)
100% of the net proceeds from insurance
recovery events by Luxottica Group and
its subsidiaries (including the Borrower
and its subsidiaries) (subject to certain
rights of replacement). The percentage
set forth in clause (d) above will be
subject to reduction based on financial
performance and certain other criteria
(all in a manner to be mutually agreed
upon).
-7-
<PAGE>
All mandatory repayments of Term Loans
will be applied to reduce future
scheduled amortization payments on a
pro rata basis (based on the amount of
--- ----
remaining amortization payments),
provided that the net sale proceeds
from the sale of the Footwear Division
and the Apparel Division, to the extent
that such sales occur on or before
the Additional Amortization Date,
will be first applied to the
amortization payment due on the Additional
Amortization Date. After the Term Loans
have been repaid in full, the amounts
referred to in clauses (a)-(e) above shall
apply to permanently reduce the commitments
under the Revolving Credit Facility.
In addition, in the event that the
Merger does not occur within 120 days
following the Closing Date, the
Borrower shall be required to repay all
outstanding Loans and all commitments
shall terminate.
Commitment Fees: 1/2 of 1% per annum of the
unutilized total commitments under
the Credit Facility, as in effect
from time to time, commencing on
the Closing Date to and including
the termination of the Credit
Facility, payable quarterly in
arrears and upon the termination
of the Credit Facility, provided
that the Commitment Fee shall be
subject to a reduction (as has
been agreed to) based on the same
criteria as the Applicable Margins
are subject to reduction.
Letter of Credit The equivalent of the Applicable
Fees: Margin (as in effect from
time to time) for Eurodollar Loans
on the aggregate outstanding
stated amount of Letters of
Credit.
Administrative The Administrative Agent and the
Agent/Lender Fees: Lenders shall receive such
fees as have been separately agreed upon.
Conditions Those conditions precedent which
Precedent: are usual and customary for these types
of facilities, and such additional
conditions precedent as are appropriate
under the circumstances, including, but
not limited to:
A. To the
Closing Date
------------ (i) The Tender Offer
documentation (collectively,
the "Tender Offer Materials")
shall be in form and
-8-
<PAGE>
substance satisfactory to the
Administrative Agent and the
Required Lenders (as hereinafter
defined) (including, without
limitation, as to the price per
share paid pursuant to both the
Tender Offer and the Merger,
minimum share tender condition,
revocation (or action equivalent
thereto) of Target's shareholders'
rights program, if any, and any
other conditions contained in the
offer to purchase) and shall be in
full force and effect, all
material conditions precedent
thereunder to the consummation of
the Tender Offer shall have been
satisfied (and not waived), and
any amendment to the Tender Offer
Materials shall be satisfactory in
form and substance to the
Administrative Agent and the
Required Lenders. The Tender
Offer shall have been consummated
after the receipt of all necessary
governmental, regulatory and third
party approvals and Bidco shall
have purchased a sufficient number
of Shares of the Target to effect
the Merger without any affirmative
vote or approval of any other
person or entity. Any state anti-
takeover law, if any, regulating
the Acquisition shall have been
complied with or shall have been
determined by the Administrative
Agent and the Required Lenders to
be invalid or inapplicable to the
Tender Offer and the Merger. At
the time of the consummation of
the Tender Offer, neither the Ohio
fair price provisions nor the
provisions of Target's charter
shall require a higher price be
paid for each Share in the Merger
than in the Tender Offer if as a result
thereof the aggregate cost to effect the
Acquisition (including fees and expenses
payable in connection therewith, but
excluding amounts needed to refinance
existing indebtedness of Target) would
exceed an amount equal to the sum of
$1.0 billion plus the amount by which
the amount of the Revolving Credit
Facility permitted to be utilized
pursuant to the proviso under "Use of
Proceeds" in Part B. above exceeds $140
million.
(ii) If a merger agreement with respect
to the Acquisition shall have been
entered into, such merger
agreement shall be satisfactory in
form and substance to the
Administrative Agent and the
Required Lenders and shall be in
full force and effect. Any
consent of the shareholders of the
Borrower or Bidco which may be
required to authorize the Merger
shall be obtained.
(iii) After giving effect to the
consummation of the Tender
Offer and the repayment of no
more than
-9-
<PAGE>
approximately $140 million of
existing indebtedness of Target,
Luxottica Group and its
subsidiaries (including the
Borrower and its subsidiaries)
shall have no indebtedness other
than (x) under the Credit
Facility, (y) no more than
approximately $50 million of
existing indebtedness of Luxottica
Group and its non-U.S.
subsidiaries and (z) such other
indebtedness as may be acceptable
to the Administrative Agent and
the Required Lenders.
(iv) The Borrower shall own directly
approximately 99.9% of the capital
stock of Avant-Garde, with such
ownership to be accomplished
pursuant to a transaction in form
and substance satisfactory to the
Administrative Agent and the
Required Lenders.
(v) The documentation evidencing the
Credit Facility (the "Credit
Documents") shall have been
executed and delivered reflecting
the terms and conditions set forth
in this Summary of Certain Terms
and Conditions and shall otherwise
be in form and substance
satisfactory to the Administrative
Agent and the Required Lenders and
all conditions to the making of
the Loans set forth therein shall
have been satisfied or waived on
or prior to the date of funding.
(vi) No litigation by any entity
(private or governmental) shall be
pending with respect to the
Acquisition, the Senior Secured
Financing or any documentation
executed in connection therewith
or which the Administrative Agent
or the Lenders representing at
least a majority of the aggregate
amount of the commitments (the
"Required Lenders") shall
reasonably determine could have a
materially adverse effect on the
business, assets, liabilities,
condition (financial or otherwise)
or prospects of Luxottica Group
and its subsidiaries, the Borrower
and its subsidiaries or Target and
its subsidiaries.
-10-
<PAGE>
(vii) All necessary governmental,
regulatory and third party
approvals in connection with
the Tender Offer, the
transactions contemplated by
the Credit Facility and
otherwise referred to herein
shall have been obtained and
remain in effect, and all
applicable waiting periods
shall have expired without
any action being taken by any
competent authority which
restrains, prevents, or
imposes materially adverse
conditions upon, the consum-
mation of the Tender Offer or
the Merger or the incurrence
of Loans. Additionally,
there shall not exist any
judgment, order, injunction
or other restraint
prohibiting or imposing
materially adverse conditions
upon, or materially delaying,
or making economically
unfeasible, the purchase of
Shares pursuant to the Tender
Offer or the consummation of
the Acquisition.
(viii) All costs, fees, expenses
(including, without
limitation, legal fees and
expenses) and other
compensation contemplated
hereby payable to the
Administrative Agent and the
Lenders shall have been paid
to the extent due.
(ix) Since the date hereof, nothing
shall have occurred, nor shall the
Administrative Agent or the
Lenders become aware of any facts
not previously known, which the
Administrative Agent or the
Required Lenders shall determine
could reasonably be expected to
have a material adverse effect on
the business, operations,
property, assets, liabilities,
conditions (financial or
otherwise) or prospects of
Luxottica Group and its
subsidiaries, the Borrower and its
subsidiaries or Target and its
subsidiaries.
(x) During the period from the date
hereof through the Closing Date,
Luxottica Group and its
subsidiaries shall have operated
their respective businesses in the
ordinary course and Target and its
subsidiaries shall have operated
their respective businesses in the
ordinary course and shall not have
sold any substantial part of any
of the three main operating
-11-
<PAGE>
divisions other than the sale of
the Footwear Division and the
Apparel Division of Target on
terms acceptable to the
Administrative Agent and the
Required Lenders.
(xi) The Administrative Agent and the
Lenders shall have received legal
opinions from counsel, and in form
and substance and covering
matters, acceptable to the
Administrative Agent and the
Required Lenders, including local
opinions of counsel as to the
enforceability of the Guaranties
and security interests under the
relevant jurisdictions. The
Administrative Agent and the
Lenders shall have received a
third party solvency opinion or,
to the extent agreed to by the
Administrative Agent, a
certificate of Luxottica Group's
chief financial officer, with
respect to the Borrower and the
Guarantors taken as a whole
acceptable to the Administrative
Agent and the Required Lenders.
The Administrative Agent also
shall have received (i) if
required by law, real estate
appraisals, which appraisals shall
comply with all applicable
regulatory standards and otherwise
shall be in form and substance
satisfactory to the Administrative
Agent and the Required Lenders and
(ii) environmental and hazardous
substance analyses in scope, and
in form and substance,
satisfactory to the Administrative
Agent and the Required Lenders.
(xii) The corporate and capital
structure of Luxottica Group
and its subsidiaries,
including the Borrower and
its subsidiaries and Target
and its subsidiaries, and all
organizational documents of
such entities and all
material agreements related
to such corporate and capital
structure, shall be
satisfactory to the
Administrative Agent and the
Required Lenders.
(xiii) The Guaranties required above
under the heading "Guaran-
ties" shall have been
executed and delivered and
the security interests
required as described above
under the heading "Security"
shall have been granted and
perfected.
-12-
<PAGE>
(xiv) All Loans and other financing
to the Borrower shall be in
full compliance with all
requirements of Regulations
G, T, U and X of the Board of
Governors of the Federal
Reserve System.
B. Conditions to Absence of material adverse
All Loans change, absence of default or
event of default under the Senior
Secured Financing, continued
accuracy of representations and
warranties and receipt of such
documentation (including, without
limitation, opinions of counsel)
as shall be required by the
Administrative Agent.
Representations
and Warranties: Those representations and
warranties which are usual and
customary for these types of
facilities, and such additional
representations and warranties as
are appropriate under the
circumstances (with such
representations to be applicable
to the Borrower and its
subsidiaries and Luxottica Group
and its subsidiaries), including,
but not limited to:
(i) Corporate existence.
(ii) Corporate power and
authority/enforceability.
(iii) No violation of law or
organizational documents or
material contracts.
(iv) No material litigation.
(v) Correctness of specified financial
statements and other financial
information and no material
adverse change.
(vi) No required governmental or third
party approvals (except as have
been obtained and which are in
full force and effect).
(vii) Use of proceeds/compliance
with margin regulations.
(viii) Material environmental
matters.
(ix) Perfected security interests.
-13-
<PAGE>
(x) Payment of taxes.
(xi) Not an investment company or
public utility holding company.
(xii) Solvency.
(xiii) Compliance with laws
(including ERISA).
Covenants: Those covenants usual and
customary for these types of
facilities, and such additional
covenants as are appropriate under
the circumstances (with the
covenants to be applicable to the
Borrower and its subsidiaries and
Luxottica Group and its
subsidiaries) (with customary
exceptions to be agreed upon).
Although the covenants have not
yet been specifically determined,
we anticipate that the covenants
shall in any event include:
(i) Limitations on other indebtedness
(with appropriate baskets to be
agreed upon).
(ii) Limitations on mergers, acquisi-
tions, joint ventures, partner-
ships and acquisitions and
dispositions of assets, it being
understood that Target may sell
its Footwear Division and Apparel
Division on terms acceptable to
the Required Lenders.
(iii) Limitations on sale-leaseback
transactions and lease pay-
ments.
(iv) Limitations on dividends (with
appropriate baskets to be agreed
upon).
(v) Limitations on voluntary
prepayments of other indebtedness
and amendments thereto, and
amendments to organizational
documents.
(vi) Limitations on transactions with
affiliates and formation of U.S.
subsidiaries.
-14-
<PAGE>
(vii) Limitations on investments
(with appropriate baskets to
be agreed upon, but in any
event, existing investments
shall be permitted).
(viii) Maintenance of existence and
properties.
(ix) Limitations on liens.
(x) Various financial covenants
customary for a transaction of
this type including a maximum
Debt/EBITDA, a minimum
EBITDA/Interest Expense and a
minimum EBITDA/Fixed Charges.
(xi) Limitations on capital
expenditures as follows:
Footwear Apparel Optical
Division Division Division**
-------- -------- --------
1995 (i.e., 1995 (i.e., 1995 (i.e.,
---- ---- ----
Closing Closing Closing
Date Date through Date
through $14 12/31/95) $35 through $60
12/31/95) million and each million 12/31/95) million
and each calendar 1996 and
calendar year each
year thereafter calendar $65
thereafter year million
and
thereafter
(xii) Adequate insurance coverage.
(xiii) ERISA covenants.
(xiv) If the Footwear Division of
Target is not sold within 120
days following the Closing
Date, the obtaining of
interest rate protection
satisfactory to the
Administrative Agent within
45 days following such 120th
day with respect to a
notional amount (to be
--------------------
** Includes both the Optical Division of Target and the
existing business of Luxottica Group and its subsidiaries.
-15-
<PAGE>
determined) of Term Loans for a
period through 12/31/96.
(xv) Financial reporting and visitation
and inspection rights.
(xvi) Compliance with laws.
including environmental and
ERISA.
(xvii) Payment of taxes.
(xviii) Lines of business.
Events of Default: Those events of default usual and
customary for these types of
facilities, and such additional
events of default as are
appropriate under the
circumstances (with the events of
default to be applicable to the
Borrower and its subsidiaries and
Luxottica Group and its
subsidiaries), including but not
limited to:
(i) Failure to pay principal and,
subject to appropriate grace
periods, interest, fees and other
amounts under the Credit Documents
when due.
(ii) Violation of covenants under the
Credit Documents (with grace
periods, where appropriate).
(iii) Representations and
warranties not true and
correct in any material
respect.
(iv) Cross payment defaults, cross non-
payment defaults permitting
acceleration and cross
acceleration to indebtedness in
each case in excess of a certain
dollar threshold.
(v) Judgment defaults (not paid or
fully paid or covered by
insurance) in excess of a certain
dollar threshold.
(vi) Bankruptcy and insolvency.
(vii) Change of ownership or
control.
-16-
<PAGE>
(viii) ERISA.
Assignments and The Borrower may not assign its
Participations: rights or obligations under
the Senior Secured Financing without the
prior written consent of the Lenders. Any
Lender may assign, and may sell parti-
cipations in, its rights and obligations
under the Senior Secured Financing, subject
(x) in the case of participations, to
customary restrictions on the voting rights
of the participants and (y) in the case of
assignments, to such limitations as may be
established by the Administrative Agent,
including the consent of the Administrative
Agent, the payment of a fee equal to $3,500
to the Administrative Agent by the assignor
or assignee Lender (other than in connection
with an assignment to another existing
Lender, an existing Lender's affiliate or to
a Federal Reserve Bank) and a minimum
assignment amount of $5 million (other than
in connection with an assignment to another
existing Lender, an existing Lender's
affiliate or to a Federal Reserve Bank).
The Senior Secured Financing shall provide
for a mechanism which will allow for each
assignee to become a direct signatory to the
Senior Secured Financing and will relieve
the assigning Lender of its obligations with
respect to the assigned portion of its
commitment.
Governing Law;
Documentation: The rights and obligations of the
parties under the Credit Documents
shall be construed in accordance with
and governed by the law of the State of
New York. The Borrower and the
Guarantors will submit to the non-
exclusive jurisdiction and venue of the
federal and state courts of the State
of New York and will waive their right
to a trial by jury.
Indemnification: The Credit Documents will contain
customary indemnities for the
Lenders (other than as a result of
a Lender's gross negligence or
willful misconduct).
-17-
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
LUXOTTICA GROUP S.p.A., :
Via Valcozzena 10, :
32021 Agordo :
(Belluno) Italy, :
:
and :
:
LUXOTTICA ACQUISITION CORP., :
1209 Orange Street :
Wilmington, Delaware 19801 :
c/o Corporation Trust Company, :
:
Plaintiffs, :
:
v. : Civil Action No.____________
:
THE UNITED STATES SHOE :
CORPORATION, :
One Eastwood Drive :
Cincinnati, Ohio 45227, :
:
and :
:
JOSEPH H. ANDERER, :
c/o The United States Shoe :
Corporation :
One Eastwood Drive :
Cincinnati, Ohio 45227, :
:
and :
:
PHILIP E. BEEKMAN, :
5402 E. Galbraith :
Cincinnati, Ohio 45236, :
:
and :
:
GILBERT HAHN, JR., :
c/o The United States Shoe :
Corporation :
One Eastwood Drive :
Cincinnati, Ohio 45227, :
<PAGE>
and :
:
ROGER L. HOWE, :
6450 Given Road :
Indian Hills, Ohio 45243, :
:
:
and :
:
BANNUS B. HUDSON, :
1136 Fort View Place :
Cincinnati, Ohio 45202-1713, :
:
and :
:
LORRENCE KELLAR, :
2167 Grandin Road :
Cincinnati, Ohio 45208-3359, :
:
and :
:
ALBERT M. KRONICK, :
35 Prospect Park S.W. :
Brooklyn, New York 11215-5902, :
:
and :
:
THOMAS LACO, :
9075 Cunningham Road :
Cincinnati, Ohio 45243-1503, :
:
and :
:
CHARLES S. MECHEM, JR., :
6225 Redbirdhollow Lane :
Cincinnati, Ohio 45243-3352, :
:
and :
:
JOHN L. ROY, :
5089 Signal Hill Lane :
Cincinnati, Ohio 45244, :
:
and :
2
<PAGE>
PHYLLIS S. SEWELL, :
c/o The United States Shoe :
Corporation :
One Eastwood Drive :
Cincinnati, Ohio 45227, :
:
and :
:
MARK HOLDERMAN, :
Commissioner of Securities :
Ohio Division of Securities :
South High Street :
Columbus, Ohio 43266-0548, :
:
and :
:
DONNA OWENS, :
Director of Commerce :
Department of Commerce :
of the State of Ohio :
South High Street :
Columbus, Ohio 43266-0548, :
:
and :
:
STATE OF OHIO, :
c/o Betty D. Montgomery :
Attorney General of Ohio :
State Office Tower :
East Broad Street :
Columbus, Ohio 43215, :
:
Defendants. :
VERIFIED COMPLAINT FOR TEMPORARY RESTRAINING
ORDER AND FOR PRELIMINARY AND PERMANENT
INJUNCTIVE RELIEF AND DECLARATORY JUDGMENT
------------------------------------------
Plaintiffs, by their undersigned attorneys, as and for
their complaint herein, aver upon knowledge as to themselves and
upon information and belief as to all other matters as follows:
3
<PAGE>
NATURE OF THIS ACTION
1. Plaintiffs seek (a) temporary, preliminary and
permanent injunctive relief, pursuant to Rule 65, Fed. R. Civ.
P., against the enforcement of the Ohio Take-Over Act, Ohio Rev.
Code Sec. Sec. 1707.041, 1707.042, 1707.23 and 1707.26 (the
"Take-Over Act"), which purports to regulate nationwide tender offers
governed by federal law; (b) preliminary and permanent injunctive
relief prohibiting application of certain provisions of the Ohio
Control Share Acquisition Act set forth in Division (E)(1) of
Ohio Rev. Code Sec. 1701.831 (the "Control Share Acquisition Act"),
by virtue of Ohio Rev. Code Sec. 1701.01(CC)(2), by defendants to
impair the voting rights of holders of certain of U.S. Shoe's
Common Shares; and (c) preliminary and permanent injunctive
relief prohibiting U.S. Shoe and its directors from taking any
steps to enforce or amend the Preference Share Purchase Rights
Agreement, commonly referred to as the "Poison Pill Plan" [except
to redeem the rights issued thereunder (the "Rights")] and
directing U.S. Shoe and its directors to redeem all Rights issued
pursuant to U.S. Shoe's Poison Pill Plan, as defined hereinafter.
2. Plaintiffs seek a declaratory judgment pursuant to
28 U.S.C. Sec. 2201 and Rule 57, Fed. R. Civ. P., declaring that (a)
the Take-Over Act is unconstitutional to the extent it is sought
to be applied to the proposed acquisition by Plaintiffs of all of
the outstanding Common Shares of U.S. Shoe; (b) the Control Share
Acquisition Act is unconstitutional to the extent it is sought to
be applied to impair the voting rights of holders of U.S. Shoe's
Common Shares described in Ohio Rev. Code Sec. 1701.01(CC)(2); and
(c) U.S. Shoe's Poison Pill Plan and the Rights issued thereunder
are invalid, unlawful, null and void.
4
<PAGE>
PARTIES
-------
3. Plaintiff, Luxottica Group S.p.A. ("Luxottica
Group"), is a corporation organized under the laws of the
Republic of Italy with its principal place of business in
Belluno, Italy. Luxottica Group and Luxottica Acquisition Corp.
("Luxottica Acquisition"), a Delaware corporation and a wholly-
owned subsidiary of Luxottica Group, are announcing and
commencing a nationwide cash tender offer for all of the
outstanding Common Shares of U.S. Shoe.
4. Defendant The United States Shoe Corporation
("U.S. Shoe") is an Ohio corporation with its principal executive
offices in Cincinnati, Ohio.
5. Defendants Anderer, Beekman, Hahn, Howe, Hudson,
Kellar, Kronick, Laco, Mechem, Roy and Sewell are directors of
U.S. Shoe (the "Directors"), and each is a citizen of states
other than Delaware.
5
<PAGE>
6. Defendant Mark Holderman (the "Commissioner") is a
citizen and resident of Ohio and is the Commissioner of the Di-
vision of Securities, Department of Commerce of the State of Ohio
(the "Division"). Pursuant to Ohio Rev. Code Sec. 1707.46, the
Division is charged with the enforcement of all laws and rules
enacted to regulate the sale of securities. In the enforcement
of those laws, the Commissioner is empowered, inter alia, to
----- ----
conduct hearings and investigations (Ohio Rev. Code Sec.Sec.
1707.041, 1707.23), issue cease and desist orders (Ohio Rev. Code
Sec. 1707.23) and seek court-ordered injunctive relief (Ohio Rev.
Code Sec.Sec. 1707.23, 1707.26). Further, the Commissioner is
empowered, pursuant to Ohio Rev. Code Sec. 1707.23(E) and (H),
to enforce certain criminal provisions and may refer certain
enforcement matters to the Attorney General and the Prosecuting
Attorney.
7. Defendant Donna Owens is a citizen and resident of
Ohio and is the Director of Commerce, Ohio Department of
Commerce. The Department of Commerce has authority to enforce
provisions of the Take-Over Act.
8. The State of Ohio is being made a defendant herein
by and through Betty D. Montgomery, the Attorney General of Ohio.
JURISDICTION AND VENUE
----------------------
9. This action arises under (a) Sections 14(a),
14(d), 14(e) and 28 of the Securities Exchange Act of 1934 (the
"Exchange Act"), 15 U.S.C. Sec.Sec. 78(a), 78n(d), 78n(e) and
78bb, and the rules and regulations promulgated thereunder by
the Securities and Exchange Commission (the "SEC"), 17 C.F.R.
Sec.Sec. 240.14d-1 et seq.; and (b) the Commerce Clause, Article
--- ----
I, Section 8, Clause 3, the Impairment of Contracts Clause,
Article I, Section 10, the Supremacy Clause, Article VI, Clause 2
and the due process clause of the Fourteenth Amendment of the
United
6
<PAGE>
States Constitution and 42 U.S.C. Sec. 1983.
10. This Court has subject matter jurisdiction over
this action pursuant to (a) Section 27 of the Exchange Act,
15 U.S.C. Sec. 78aa; (b) 28 U.S.C. Sec. 1331(a)(federal question);
(c) 28 U.S.C. Sec. 1332 (diversity of citizenship); (d) 28 U.S.C.
Sec.1337(a) (commerce and antitrust regulation); and (e) 28 U.S.C.
Sec. 1343(a) (deprivation of constitutional rights). Plaintiff
and defendants are of diverse citizenship, and the amount in
controversy, exclusive of interest and costs, exceeds $50,000.
Further, this Court has pendent jurisdiction over the state law
claims.
11. Venue is proper in this judicial district pursuant
to 28 U.S.C. Sec. 1391(b) and (c) because all of the defendants
reside in or are subject to personal jurisdiction in this
district and the claims asserted herein arise from events and/or
omissions in this District; and pursuant to Section 27 of the
Exchange Act, 15 U.S.C. Sec. 78aa, because acts or transactions
constituting violations of the Exchange Act have occurred or are
threatened to occur in this District, and the defendants are in,
inhabit or transact business in this district. Venue in this
division is proper pursuant to Rule 3.3(c) of the S.D. Ohio L.R.
because defendants Holderman and Owens reside, and the cause of
action arose, in this division.
THE TENDER OFFER
----------------
12. In telephone calls in December, 1994 and a meeting
in January, 1995, Luxottica Group advised senior management of
U.S. Shoe that Luxottica Group proposed to acquire U.S. Shoe by
means of an all cash merger involving payment to U.S. Shoe's
shareholders of a substantial premium above the then current
market value of U.S. Shoe's Common Shares, and wished to engage
in negotiations to effectuate such a transaction. The financial
advisors of Luxottica Group and U.S. Shoe also held several
meetings during this period in which Luxottica Group's financial
7
<PAGE>
advisors reiterated the merger proposal.
13. Luxottica Group advised U.S. Shoe that it wished
access to non-public information about U.S. Shoe's businesses to
offer a fully-valued cash merger proposal. However, U.S. Shoe
and Plaintiffs were unable to agree on the terms of a standstill.
14. In light of U.S. Shoe's response to Luxottica
Group's friendly overtures, Luxottica Group decided to make an
offer directly to U.S. Shoe's shareholders.
15. Accordingly, Plaintiffs are commencing, on March
3, 1995, a cash tender offer (the "Tender Offer") for all of the
outstanding shares of U.S. Shoe at a price of $24.00 per share.
16. The Tender Offer represents a substantial
transaction in interstate commerce totaling more than
$1,201,654,248. The Tender Offer is being made to all of U.S.
Shoe's shareholders, who are widely dispersed throughout the
United States, with the majority located outside the State of
Ohio. The offer is fair, reasonable and adequate. Further, it
is not coercive. It is for all shares. If the Tender Offer
is successful, Plaintiffs intend, as soon as practicable, to
consummate a merger and to acquire at the same price all
remaining shares not tendered in the Tender Offer.
17. The Tender Offer complies in all respects with the
detailed substantive and disclosure requirements of federal law,
which comprehensively regulate nationwide tender offers,
including, among other things, the Exchange Act and certain
amendments thereto (the "Williams Act"), and rules and
regulations promulgated by the SEC pursuant to Congressional
authorization. Plaintiffs are filing a Schedule 14D-1 with the
SEC with respect to the Tender Offer which contains, among other
exhibits, an Offer to Purchase setting forth the material terms
8
<PAGE>
of the Tender Offer. Plaintiffs are also filing a Form 041
together with the aforesaid Schedule 14D-1, the Offer to Purchase
and all other exhibits thereto, with the Division, without
prejudice to Plaintiffs' position that the Take-Over Act is
unconstitutional or inapplicable to the Tender Offer. In
addition, Plaintiffs are delivering an Acquiring Person Statement
to U.S. Shoe pursuant to the Control Share Acquisition Act,
without prejudice to Plaintiffs' position that the Control Share
Acquisition Act is unconstitutional to the extent it is applied
to impair certain voting rights.
FEDERAL REGULATION OF THE TENDER OFFER
--------------------------------------
18. In 1968, Congress enacted the Williams Act
amendments to the Exchange Act and thereby established a uniform
national system, administered by the SEC, for regulation of
interstate tender offers. The provisions of the Williams Act,
and the rules promulgated thereunder by the SEC, represent a
comprehensive Congressional scheme which regulates nationwide
tender offers.
19. In enacting the Williams Act, Congress recognized
that tender offers serve legitimate and beneficial economic
functions by, among other things, providing investors with an
opportunity to sell their shares at an advantageous premium over
the prevailing market prices and providing shareholders with all
information material to their respective decisions whether or not
to tender their shares.
20. The Williams Act reflects the intent of Congress
that interstate tender offers for shares of public corporations
should succeed or fail solely at the hands of the free and
informed investment judgment of the individual shareholders of
such corporations. The Williams Act is designed neither to deter
9
<PAGE>
nor to encourage tender offers, but rather to establish
evenhanded regulation, favoring neither the tender offeror nor
incumbent management of the corporation whose securities are
being sought. The goals of the Williams Act are shareholder
protection and strict neutrality in the contest for corporate
control between management of the target company and the tender
offeror.
21. The Williams Act protects investors by requiring
that tender offerors provide shareholders with certain
information which Congress has determined to be material to an
informed investment judgment as to whether an individual
shareholder should hold, sell or trade his securities and by
requiring that tender offerors observe specified timetable
requirements in connection with all tender offers for securities
registered under the Exchange Act.
22. Pursuant to its authority under Section 23(a)(1)
and other provisions of the Exchange Act, the SEC has promulgated
rules and regulations in furtherance of the comprehensive
Congressional scheme set forth in the Williams Act and in other
provisions of the Exchange Act. Federal law establishes a
specific regulatory scheme and timetable which apply to the
Tender Offer. The Williams Act does not contain any provisions
that would substantially delay or restrict a tender offer, or
permit administrative review respecting the fairness of its
substantive terms or the effectiveness of tender offer
disclosures.
THE OHIO TAKE-OVER ACT
----------------------
23. The Take-Over Act, Ohio Rev. Code Sec. 1701.041,
was originally enacted in 1969 and amended in 1990. It purports
to regulate interstate tender offers.
24. Under the Take-Over Act, a "control bid" is
defined to include an offer to acquire equity securities of a
corporation incorporated inside or outside Ohio with its
principal place of business or principal executive office in Ohio
10
<PAGE>
or with substantial assets within Ohio if there are a certain
specified number of Ohio shareholders. Ohio Rev. Code Sec.
Sec. 1707.01(V)(1); 1707.01(Z)(1).
25. While the Take-Over Act requires disclosure which
is, in part, duplicative of that required under federal law, the
information filed with the Division and to be delivered to the
subject company and Ohio offerees must also include information
which need not be disclosed in a Schedule 14D-1 filed with the
SEC pursuant to the Williams Act, such as:
(a) information regarding plans or
proposals of the offeror to make
changes in employee plans or
workforce or to close plants or
facilities. Sec.1707.041(A)(2)(d).
(b) complete information on the
organization and operations of
offeror, including
(i) a description of the offeror's
outstanding capital stock and
long-term debt,
(ii) financial statements of the
offeror for the current period
and three most recent annual
accounting periods,
(iii) a description of the loca-
tion and general character of
offeror's principal physical
properties,
(iv) a description of pending legal
proceedings other than routine
litigation,
(v) a description of the business
done and projected by the
offeror and the general
development of offeror's
business over the past three
years, and
11
<PAGE>
(vi) the amount of any material
interest, direct or indirect,
of any of offeror's officers
or directors in any material
transaction during the past
three years, or any proposed
transactions, to which the
offeror was or is to be a
party. Sec. 1707.041(A)(2)(g).
(c) "[s]uch other and further
documents, exhibits, data, and
information as may be required by
regulations of the division of
securities, or as may be necessary
to make fair, full and effective
disclosure to offerees of all in-
formation material to a decision to
accept or reject the offer." Sec.
1707.041(A)(2)(h).
26. The Take-Over Act impermissibly imposes burdens
upon offerors, such as Luxottica Acquisition, in conflict with
the Williams Act, 15 U.S.C. Sec. 78n(d), (e) (to which the Tender
Offer is subject), and the regulations promulgated thereunder, to
the extent that the Take-Over Act requires that offerors provide
to the company being acquired, the Division and Ohio offerees,
materials which include, among other things, information with
respect to the financial condition and history of the offerors;
plans relating to employees; and a general open-ended requirement
for additional information, beyond the requirements of the
Williams Act. Ohio Rev. Code Sec. 1707.041(A)(2).
27. The Take-Over Act allows the Division, by rule or
in an adjudicatory proceeding, to determine that an issuer is not
a "subject company" if "appropriate review" of the control bid
will be made by a regulatory authority of another jurisdiction.
Ohio Rev. Code Sec. 1707.01(Z)(2).
12
<PAGE>
28. The Division may "summarily suspend the
continuation of the control bid." Further, the Division may
effectively block the Tender Offer from going forward if, after a
hearing, it determines that "all of the information required to
be provided . . . has not been provided by the offeror, that the
control bid materials provided to offerees do not provide full
disclosure to offerees of all material information concerning the
control bid, or that the control bid is in material violation of
any provision of this chapter . . ." Ohio Rev. Code Sec.
1707.041(A)(4).
29. The contemplated "suspension" of Plaintiffs'
control bid, both summarily and after hearing, would have the
practical effect of impeding, and possibly halting, the Tender
Offer throughout the nation. Reinstitution of the offer can be
accomplished only by filing "new or amended information" to
correct "disclosure and other deficiencies." Ohio Rev. Code Sec.
1707.041(A)(4).
30. These provisions are in direct contravention of
the Williams Act, which does not contemplate any substantive
administrative review of the "effectiveness" of tender offer
disclosures or of "other deficiencies". These provisions also
conflict with the explicit timetable of the Williams Act.
THE CONTROL SHARE ACQUISITION ACT
---------------------------------
31. Ohio Rev. Code Sec. 1701.831 regulates the making
of "control share acquisitions" as defined in Ohio Rev. Code Sec.
1701.01(Z)(1). Plaintiffs' Tender Offer to acquire all of the
shares of U.S. Shoe for cash proposes a control share
acquisition. Within ten days of receipt of an Acquiring Person
Statement delivered to U.S. Shoe pursuant to Ohio Rev. Code
Sec. 1701.831(B), defendant Directors of U.S. Shoe must call a
special meeting (the "831 Special Meeting") of shareholders to
vote on the proposed control share acquisition.
32. Under Ohio Rev. Code Sec. 1701.831, the Tender
Offer can only be consummated if the shareholders of U.S. Shoe
approve
13
<PAGE>
the proposed control share acquisition by the affirmative vote of
a majority of the voting power of U.S. Shoe in the election of
directors represented at the 831 Special Meeting in person or by
proxy and a majority of the portion of such voting power
excluding the voting power of "interested shares" [as defined in
Ohio Rev. Code Sec. 1701.01(CC)]. A quorum must be present at
the 831 Special Meeting and will be deemed present if a majority
of the voting power of U.S. Shoe in the election of directors and
majority of such voting power excluding "interested shares" are
represented at the meeting in person or by proxy.
33. According to Ohio Rev. Code Sec. 1701.832 the
procedures in Sec. 1701.831 are to provide ". . . evenhanded
protection of offerors and shareholders from fraudulent and
manipulative transactions arising in connection with control
acquisitions." "Evenhanded protection" requires that the share-
holder vote in Sec. 1701.831 must treat offerors and incumbent
management evenhandedly and must be bona fide and achievable. If
the vote cannot be calculated, or cannot be calculated in a
timely manner, the voting requirements are a blatant sham
designed to enable entrenched management to avoid a shareholder
referendum on the Tender Offer and kill fair, all-cash, non-
manipulative tender offers or stymie them indefinitely.
34. Ohio Rev. Code Sec. 1701.01(CC)(2), a 1990 amend-
ment, presents insurmountable barriers to any and all control
share acquisitions of the shares of widely held public companies,
such as U.S. Shoe, by creating a class of "interested shares"
which, as a practical matter, is impossible to determine.
35. Ohio Rev. Code Sec. 1701.01(CC)(2) provides:
"Interested shares" also means any shares of
------------------------------------------
an issuing public corporation acquired,
---------
directly or indirectly, by any person from
-----------------------
the holder or holders thereof for a valuable
consideration during the period beginning
------------------------------
with the date of the first public disclosure
---------------------------------------------
of a proposed control share acquisition of
---------------------------------------------
14
<PAGE>
the issuing public corporation or any
---------------------------------------------
proposed merger, consolidation, or other
---------------------------------------------
transaction which would result in a change in
---------------------------------------------
control of the corporation or all or
-------
substantially all of its assets, and ending
------
on the date of any special meeting of the
-------------------------------------
corporation's shareholders held thereafter
pursuant to section 1701.831 [1701.83.1] of
-----------------------------
the Revised Code, for the purpose of voting
on a control share acquisition proposed by
any acquiring person if either of the
----------
following apply:
(a) The aggregate consideration paid or
-------------------------------
given by the person who acquired the shares,
--------------------------------------
and any other persons acting in concert with
-------------------------------
him, for all such shares exceeds two hundred
-------------------
fifty thousand dollars;
----------------------
(b) The number of shares acquired by the
-----------------------------------
person who acquired the shares, and any other
------ ---------
persons acting in concert with him, exceeds
-------------------------- -------
one-half of one per cent of the outstanding
-------------------------
shares of the corporation entitled to vote in
the election of directors. (Emphasis added).
36. Any shares of U.S. Shoe that are "interested
shares" under Ohio Rev. Code Sec. 1701.01(CC)(2) cannot be
determined from the shareholder records of U.S. Shoe required to
be maintained under Ohio Rev. Code Sec. 1701.37 because such re-
cords disclose the names and addresses of record holders only,
who may or may not also be the beneficial owners of such shares.
Even as to those record holders who are also beneficial owners,
the records do not contain the information necessary to determine
whether the shares are "interested shares" under the provisions
of Ohio Rev. Code Sec. 1701.01(CC)(2).
37. It is estimated that at least 80% of U.S. Shoe's
outstanding shares are held by clearing agencies and by brokers
and banks as record holders for the beneficial owners using
"street" or nominee names. Such brokers, banks and clearing
agencies hold shares for many beneficial owners, including
arbitrageurs. Arbitrageurs buy and sell significant amounts of
15
<PAGE>
shares of widely held public companies, like U.S. Shoe, after
tender offer announcements. They frequently do not consent to
disclosure of their names, addresses and holdings. Neither U.S.
Shoe nor Luxottica Acquisition can compel the record share-
holders to disclose the name, address or holdings of the
numerous non-consenting beneficial owners of shares, the prices
paid by them for shares, when such shares were purchased or
whether they are "acting in concert" with any other person, and
yet this unavailable information must be obtained in order to
identify the class of "interested shares" created by Ohio Rev.
Code Sec. 1701.01(CC)(2). Thus, this provision presents insur-
mountable difficulties in tallying "interested shares" and,
accordingly, shares that are not "interested." Moreover, it is
---
a practical impossibility to determine whether there is a
quorum or to determine the vote on the proposed control share
acquisition, which makes it impossible to comply with the
statutory requirement of obtaining approval of the Tender Offer
by separate majorities of the holders of "interested shares" and
the other shares of U.S. Shoe.
38. Section 14 of the Exchange Act and the regulations
promulgated thereunder (the "Proxy Rules") regulate the
solicitation of proxies and related matters with respect to
public companies such as U.S. Shoe.
39. Rules 14b-1(b)(3) and 14b-2(b)(4) of the Proxy
Rules require clearing agencies, securities brokers and banks
holding record ownership of stock for beneficial owners to
provide a public company such as U.S. Shoe, upon request of the
company, with the names, addresses and securities positions,
compiled as of a date no earlier than five business days after
such request is received, of its customers who are beneficial
owners of the company's securities and "who have not objected to
------------------------
disclosure of such 'information'." Thus, the Proxy Rules
-----------------------------------
recognize the right of a beneficial owner to keep his identity
confidential. In addition, the Proxy Rules create no right or
ability to compel disclosure by a beneficial owner of the price
16
<PAGE>
paid by him for securities, the time of the purchases, the
identity of sellers or whether he is acting in concert with any
other person, all of which must be obtained to determine whether
---
shares of U.S. Shoe are "interested shares" under Ohio Rev. Code
Sec. 1701.01(CC)(2). Therefore, Sec. 1701.01(CC)(2) conflicts
with and is preempted by the Proxy Rules.
40. While some of this information could be obtained
from reports required to be filed by 5% shareholders under
Section 13 of the Exchange Act, Sec. 1701.01(CC)(2) applies to
a person holding as few as one-half of one percent of the
outstanding U.S. Shoe shares, so that Section 13 filings would
provide incomplete and non-dispositive information in determining
which U.S. Shoe shares are "interested shares." Thus, Sec.
1701.01(CC)(2) is also in conflict with the disclosure scheme of
Section 13 of the Exchange Act.
41. The Williams Act, and the regulations thereunder,
establish procedural rules to govern tender offers. U.S. Shoe
and Luxottica Acquisition are subject to the Williams Act. The
Williams Act strikes a careful balance between the interests of
offerors and target companies, and any state statute that upsets
this balance is preempted.
42. Ohio Rev. Code Sec. 1701.831(E)(1), by virtue of
Ohio Rev. Code Sec. 1701.01(CC)(2), operates to favor entrenched
management against offerors to the detriment of shareholders by
excluding, from one of the votes required under Sec. 1701.831,
certain shares of U.S. Shoe trading after the Tender Offer
announcement. It does not protect independent shareholders
against the contending parties and does not ensure collective
deliberation about the merits of tender offers; rather, it
deprives holders of independently-owned shares of U.S. Shoe of
their rightful voice in corporate affairs. Ohio Rev. Code Sec.
1701.01(CC)(2) excludes certain shares owned independently of
U.S. Shoe's management and Luxottica Acquisition from a crucial
vote and makes it impossible to determine whether a requisite
shareholder vote has been obtained. Thus, it impedes the
operation of the special shareholder's meeting intended to give
to the offeror the opportunity to present its offer to the
shareholders and to shareholders the opportunity to decide for
17
<PAGE>
themselves whether a change in control should occur. Therefore,
Ohio Rev. Code Sec. 1701.01(CC)(2) frustrates the purposes of
the Williams Act. Ohio Rev. Code Sec. 1701.01(CC)(2) also does
not treat shares which trade after the first announcement of a
tender offer equally, thereby discriminating against Luxottica
Acquisition's Tender Offer in favor of any later competing offer
made by U.S. Shoe's management or a "white knight" friendly to
management. Shares purchased after the announcement of Luxottica
Acquisition's Tender Offer are "interested shares" as to such
Tender Offer but would not be "interested shares" as to any other
---
offer if such shares are purchased prior to the announcement of
the second offer. The "evenhanded" approach mandated by Ohio
Rev. Code Sec. 1701.832 and the Williams Act is frustrated by a
scheme which favors entrenched management to the detriment of
U.S. Shoe's shareholders.
43. The Ohio General Assembly demonstrated awareness
that the amendment of Ohio Rev. Code Sec. 1701.01, adding
division (CC)(2), was constitutionally dubious by specifically
adding a severability clause solely for that division, to apply
"if any part of this division is held to be illegal or invalid in
application . . ." Ohio Rev. Code Sec. 1701.01(CC)(3).
THE POISON PILL PLAN
--------------------
44. U.S. Shoe's Poison Pill Plan (denominated as the
"Preference Shares Purchase Rights") was initially adopted by
U.S. Shoe's Board of Directors on March 31, 1986, without
shareholder approval. On April 14, 1986, U.S. Shoe implemented
the Poison Pill Plan by distributing a dividend of one preference
share purchase right (i.e., a Right) for each outstanding share
----
of U.S. Shoe.
18
<PAGE>
45. On March 23, 1988, U.S. Shoe amended its Poison
Pill Plan, again acting without shareholder approval.
46. U.S. Shoe's Poison Pill Plan, both as initially
adopted and as amended, is designed to impose substantial
economic penalties on any entity, like Luxottica Acquisition,
that attempts to acquire U.S. Shoe in a transaction not approved
by U.S. Shoe's Board of Directors. Thus, the Poison Pill Plan
affords U.S. Shoe's Board the power effectively to prevent U.S.
Shoe's shareholders from receiving the benefits of plaintiffs
Tender Offer regardless of its merit or the desires of U.S.
Shoe's shareholders to sell their shares pursuant thereto.
47. U.S. Shoe's Poison Pill Plan, however, empowers
U.S. Shoe's Directors to redeem the Rights and remove the threat
of overwhelming dilution that they carry. U.S. Shoe's Board may
at its discretion redeem the Rights at the nominal price of five
cents ($0.05) per Right at any time on or prior to the time a
person together with its affiliates and associates, becomes the
beneficial owner of 20 percent or more of U.S. Shoe's outstanding
shares (an "Acquiring Person").
48. In its Offer to Purchase, Luxottica Acquisition
requested that U.S. Shoe's Board of Directors redeem the Rights.
Luxottica Acquisition believes that U.S. Shoe's Board will refuse
to redeem the Rights.
49. U.S. Shoe uses and maintains the Rights solely in
order to employ the "flip-over" and "flip-in" features of these
Rights, described hereinafter, which are designed to deter tender
offerors, like Luxottica Acquisition, whose offers have not been
19
<PAGE>
approved by U.S. Shoe's Board of Directors.
50. As amended, U.S. Shoe's Rights may only be
transferred together with U.S. Shoe's Common Shares until the
"Distribution Date" which shall occur on the earlier of the day
on which a public announcement of the fact that a person has
become an Acquiring Person is made by U.S. Shoe or such Acquiring
Person (the "Share Acquisition Date") or the close of business on
the tenth day (or such later date as a majority of U.S. Shoe's
"Continuing" Directors may determine) following the commencement
of, or first public announcement of an intention to make, a
tender or exchange offer which, if successful, would result in a
30 percent or more ownership interest of U.S. Shoe's outstanding
Common Shares.
51. According to U.S. Shoe's Poison Pill Plan, after
the Distribution Date, the Rights may be transferred separately
from the Common Shares to which they were initially attached.
From and after the Distribution Date, but prior to the triggering
of the "flip-over" or "flip-in" provisions of the Rights,
described below, each Right entitles its holders to purchase from
U.S. Shoe one one-hundredth (1/100th) of a Series A Preference
Share at an exercise price of $200.
52. The $200 exercise price of the Rights vastly
exceeds the economic value of the units of designated preference
shares into which they are initially convertible. This disparity
between the exercise price and the value of the fractional
preference share to be received makes it clear that the Rights
were never intended to be used to purchase the designated
preference shares.
53. The exercise price for such fractional preference
share is more than 10 times the market price at which the shares
of U.S. Shoe traded immediately prior to announcement of the
Tender Offer and is significantly higher than any price at which
the Board of Directors could reasonably believe the preference
shares might trade prior to the expiration of the Rights in 1996.
20
<PAGE>
It is thus inconceivable that a Right would in fact ever be
exercised to acquire the fractional preference shares.
54. According to U.S. Shoe's Poison Pill Plan, after
the Rights become exercisable and, unless the Rights are sooner
redeemed, in the event that U.S. Shoe were to be acquired in a
merger or other business combination or more than 50 percent of
the assets or earning power of U.S. Shoe and its subsidiaries
were sold or transferred, the "flip-over" provision of the Poison
Pill is triggered. In that event, the Poison Pill Plan provides
that each Right shall entitle its holder to purchase such number
of shares of the acquiring company's common stock having a market
value at the time of such transaction of two times the exercise
--- -----
price of the Right. In other words, when the Rights "flip-over"
into rights to purchase stock of the acquiring company, the
Rights holders may purchase shares of that company at half-price.
For example, a Right holder could purchase $100 worth of the
acquiring company's shares for only $50. This "flip-over"
feature of the Poison Pill Plan threatens a devastating
impairment of any potential acquirer's capital structure and, if
enforceable, makes tender offers impossible if not approved by
U.S. Shoe's directors.
55. The Poison Pill Plan has certain anti-takeover
effects in that the Rights will cause substantial dilution to the
ownership rights of any person who attempts to acquire U.S. Shoe
on terms not approved by U.S. Shoe's Board of Directors. This
dilution would impose substantial economic penalties on
plaintiff's or any other person who attempts to take control of
U.S. Shoe in a transaction not approved by U.S. Shoe's Board of
Directors.
56. Now in the face of Luxottica Acquisition's all
cash, all shares, premium, noncoercive Tender Offer, U.S. Shoe's
Board of Directors likely will continue to refuse to redeem the
21
<PAGE>
Rights despite plaintiffs demand that they do so. U.S. Shoe's
Board of Directors is employing the Poison Pill Plan to obstruct
plaintiffs valuable offer, to deny to U.S. Shoe's shareholders
any meaningful opportunity to decide for themselves whether to
tender their shares, and to entrench the incumbent Board.
57. The purported purpose of the Poison Pill Plan was
to protect the interests of U.S. Shoe's shareholders. Luxottica
Acquisition's all cash, all shares premium Tender Offer provides
for fair and equal treatment of all U.S. Shoe shareholders and is
not coercive. Consequently, U.S. Shoe's Poison Pill has no valid
application to Luxottica Acquisition's Tender Offer.
58. U.S. Shoe's Board of Directors has a fiduciary
duty to redeem the Rights to allow Luxottica Acquisition's Tender
Offer to proceed. Unless the Poison Pill is redeemed, U.S.
Shoe's shareholders may be denied the opportunity to exercise
their right to decide for themselves whether to accept the
benefits of plaintiffs' Tender Offer.
59. According to U.S. Shoe's Poison Pill Plan, U.S.
Shoe's Poison Pill further provides that after the Rights become
exercisable and the "flip-in" provision of the Poison Pill is
triggered, each Rights Holder (other than the Acquiring Person)
becomes entitled to purchase Common Shares of U.S. Shoe having a
market value of two times the exercise price of the Right. In
other words, when the Rights "flip-in," the Rights Holders may
purchase Common Shares of U.S. Shoe at one-half of their fair
market value at the time of the transaction. Because the
Acquiring Person's Rights are rendered void when the Rights "flip
in," this feature of the Poison Pill discriminates against the
Acquiring Person by diluting and devaluing the Acquiring Person's
22
<PAGE>
holdings in U.S. Shoe. Moreover, the Plan provides that in lieu
of issuing Common Shares, U.S. Shoe may, if a majority of the
continuing Directors determines that such action is necessary or
appropriate and not contrary to the interests of the holders of
the Rights, elect to issue or pay, upon the exercise of the
Rights, cash, property, or other securities, or any combination
thereof having a fair market value equal to the value of the
Common Shares which otherwise would have been issued.
60. The option to purchase one one-hundredth of a
Series A Preference Share in the event of a flip-in is an
illusory option, because the "flip-in" triggers a right to
purchase Common Shares, not fractional preference shares.
Because the Poison Pill Plan effectively grants options to
purchase Common Shares in the event of a "flip-in," it is invalid
under Ohio Rev. Code Sec. 1701.16 because U.S. Shoe does not have
sufficient authorized but unissued Common Shares to satisfy the
exercise of the Rights in such event and because the Poison Pill
Plan was never approved by U.S. Shoe shareholders.
61. U.S. Shoe's Amended Articles of Incorporation
currently authorize the issuance of 60,000,000 Common Shares.
According to U.S. Shoe's most recent Form 10-Q, the number of
Common Shares outstanding at October 29, 1994, was 46,341,660; in
addition, there were options to purchase 3,727,267 Common Shares.
Thus, on a fully diluted basis, there were only 9,931,073 Common
Shares available for issuance under the Poison Pill Plan as of
October 29, 1994. If the flip-in were triggered by Luxottica
Acquisition's Tender Offer, there are insufficient Common Shares
to satisfy the exercise of the Rights.
62. Since there are insufficient authorized but
unissued or treasury Common Shares to satisfy the exercise of the
Rights, the Rights are not options to purchase shares, but are in
actuality a right to receive a dividend in cash, property or
securities pursuant to Ohio Rev. Code Sec. 1701.33.
63. Under the terms of the Poison Pill Plan, shares
held by a holder of 20 percent or more of U.S. Shoe's outstanding
23
<PAGE>
Common Shares (and those who purchase from him) are
discriminatorily excluded from the dividend. Such a
discriminatory dividend is unlawful under Ohio Rev. Code
Sec. 1701.33.
64. Furthermore, the amount of the dividend U.S. Shoe
would be required to pay under the circumstances described, above
and beyond the proceeds to it from the payment by the Right
holders of the exercise price, would be in such an amount that it
(a) would exceed U.S. Shoe's surplus and render it insolvent, and
would therefore be unlawful under Ohio Rev. Code Sec. Sec.
1701.33(A) and 1701.33(C), (b) would likely violate U.S. Shoe's
existing debt covenants, (c) would render U.S. Shoe's directors
personally liable for repayment of the unlawful amounts under
Ohio Rev. Code Sec. 1701.95(A)(1), and (d) would constitute an
unlawful disposition of substantially all of U.S. Shoe's assets
under Ohio Rev. Code Sec. 1701.76 or a voluntary dissolution
under Ohio Rev. Code Sec. 1701.86, without the requisite approval
of the shareholders.
CLAIMS FOR RELIEF
-----------------
The Take-Over Act Violates the Commerce
Clause of the United States Constitution
----------------------------------------
(COUNT ONE)
65. Plaintiffs repeat and reallege the averments set
forth in paragraphs 1-64 of this Complaint as if fully rewritten
herein.
66. The Commerce Clause of the United States
Constitution provides that: "Congress shall have power . . . to
regulate commerce . . . among the several states." U.S. Const.
Art. I, Sec. 8, cl. 3.
67. Shareholders of U.S. Shoe reside throughout the
United States and the Tender Offer will take place in interstate
commerce.
24
<PAGE>
68. The Take-Over Act imposes a substantial, adverse,
and direct burden on interstate commerce because, among other
things, the Take-Over Act:
(a) grants to the Division power to
suspend the Tender Offer in the
State of Ohio which would
effectively prevent plaintiffs from
going forward with the Tender Offer
nationwide;
(b) imposes disclosure requirements
which exceed those required under
federal law;
(c) deprives Plaintiffs of the
federally-protected right to buy
securities from willing sellers
throughout the United States free
of state law impediments;
(d) exerts a powerful constraint upon
transactions in securities between
willing buyers and willing sellers
throughout the United States;
(e) impedes the infusion of billions of
dollars into interstate commerce by
means of tender offers and
interferes with efficient
allocation of economic resources;
and
(f) creates unnecessary, duplicative
and wasteful expenses for companies
engaged in interstate commerce and
upon persons wishing to use the
national securities exchanges.
69. The Take-Over Act is invalid and unconstitutional
because it places a substantial burden on interstate commerce
which outweighs any putative local benefits, in violation of the
Commerce Clause, Art. I, Sec. 8, cl. 3, of the United States
Constitution.
70. Plaintiffs have no adequate remedy at law.
25
<PAGE>
The Take-Over Act Violates the Supremacy
Clause of the United States Constitution
and Section 28 of the Exchange Act
----------------------------------
(COUNT TWO)
71. Plaintiffs repeat and reallege the averments set
forth in paragraphs 1-70 of this Complaint as if fully rewritten
herein.
72. The Supremacy Clause, U.S. Const. Art. VI, cl. 2,
provides, in pertinent part:
This Constitution, and the Laws of the United
States which shall be made in Pursuance
thereof . . . shall be the supreme Law of the
Land; and Judges in every State shall be
bound thereby, any Thing in the Constitution
or Laws of any State to the Contrary
notwithstanding.
73. The Take-Over Act frustrates the objectives of,
and is in direct conflict with, the Exchange Act and the rules
and regulations promulgated thereunder in at least the following
respects:
(a) The Take-Over Act imposes
disclosure requirements in addition
to those required by federal law;
(b) the Division may prohibit a tender
offer from proceeding and thereby
frustrate the federal scheme which
provides for each shareholder to
decide whether to accept a tender
offer;
(c) the Take-Over Act represents an
attempt to assert the legislative
power of the State of Ohio over a
subject matter over which the
federal government has developed a
comprehensive body of law; and
(d) the Take-Over Act creates the
potential for unseemly conflict
between federal and state
proceedings by permitting a state
official to halt a nationwide
tender offer based upon his
examination of materials which meet
applicable federal law.
26
<PAGE>
74. By establishing policies, standards and procedures
that conflict with and are obstacles to the objectives of
Congress expressed in the Exchange Act and rules and regulations
promulgated thereunder, the Take-Over Act is invalid and
unconstitutional as applied to the Tender Offer under the
Supremacy Clause of the United States Constitution, Article VI,
Clause 2, which accords supremacy to federal law over conflicting
state law, and violates and is preempted by Section 28(a) of the
Exchange Act, 15 U.S.C. Sec. 78bb, which prohibits and preempts
state regulation that conflicts with the provisions of the
Exchange Act and the rules and regulations thereunder.
75. Plaintiffs have no adequate remedy at law.
The Control Share Acquisition Act,
by virtue of
Ohio Rev. Code Sec. 1701.01(CC)(2),
Violates the Supremacy Clause of the
United States Constitution and Section 28
of the Exchange Act
-------------------
(COUNT THREE)
76. Plaintiffs repeat and reallege the averments set
forth in paragraphs 1-75 of this complaint as if fully rewritten
herein.
77. The provisions of the Control Share Acquisition
Act impairing the voting rights of the holders of certain of U.S.
Shoe's shares frustrate the objectives, and are in direct
conflict with, the Exchange Act and the rules and regulations
promulgated thereunder, in at least the following respects:
(a) Effectively imposing proxy
requirements inconsistent with
those imposed by federal law;
27
<PAGE>
(b) Constituting an attempt to
assert the legislative power
of the State of Ohio over a
subject matter over which the
federal government has devel-
oped a comprehensive body of
law; and
(c) Functioning as a bar to
national tender offers by
impeding the ability to
conduct the control share
acquisition meeting so that
shareholders can decide
whether a change of control
should occur, by making it
impossible to identify
"interested shares," and
therefore making it impossible
to determine and obtain the
vote required by Ohio Rev.
Code Sec. 1701.831(E)(1).
78. By establishing policies, standards and procedures
that conflict with and are obstacles to the objectives of
Congress expressed in the Exchange Act and the rules and
regulations promulgated thereunder, Ohio Rev. Code Sec.
1701.831(E)(1), by virtue of Ohio Rev. Code Sec. 1701.01(CC)(2),
is invalid and unconstitutional as applied to the Tender Offer
under the Supremacy Clause of the United States Constitution,
Article VI, Clause 2, which accords supremacy to federal law over
conflicting state law, and violates and is preempted by Section
28(a) of the Exchange Act, 15 U.S.C. Sec. 78bb, which prohibits
and preempts state regulation that conflicts with the provisions
of the Exchange Act and the rules and regulations thereunder.
The Control Share Acquisition Act,
by virtue of
Ohio Rev. Code Sec. 1701.01(CC)(2),
Creates an Unlawful Burden
on Interstate Commerce
----------------------
(COUNT FOUR)
79. Plaintiffs repeat and reallege the averments set
forth in paragraphs 1-78 of this Complaint as if fully rewritten
herein.
28
<PAGE>
80. The Control Share Acquisition Act, by virtue of
Ohio Rev. Code Sec. 1701.01(CC)(2), was intended to discourage
trading in securities of target companies after the announcement
of a tender offer by limiting the voting rights of certain
purchasers. It was intended to disrupt the national secondary
market in securities, a market generally regulated by federal,
not state law. The provision effectively discourages the
purchase of shares of widely held public companies after
announcement of a tender offer.
81. The Control Share Acquisition Act, by virtue of
Ohio Rev. Code Sec. 1701.01(CC)(2), is invalid, unconstitutional,
null and void because it places a substantial burden on
interstate commerce that outweighs any putative local benefits,
in violation of the Commerce Clause, art. I, Sec. 8, cl. 3 of the
United States Constitution.
82. Plaintiffs have no adequate remedy at law.
The Control Share Acquisition Act,
by virtue of
Ohio Rev. Code Sec. 1701.01(CC)(2),
Violates the Due Process and
Obligations of Contract Clauses of the
United States and Ohio Constitutions
------------------------------------
(COUNT FIVE)
83. Plaintiffs repeat and reallege the averments set
forth in paragraphs 1-82 of this Complaint as if fully rewritten
herein.
84. Article Fourth of U.S. Shoe's Amended Articles of
Incorporation provides that "(a)ll shares of any particular
series shall rank equally and be identical in all respects . . ."
29
<PAGE>
and that "(e)ach outstanding Common Share . . . shall entitle the
holder thereof to one vote on each matter properly submitted to
the shareholders for their vote, consent, waiver, release
or other action, subject to the provisions of law from time to
time in effect with respect to cumulative voting."
85. The express terms of the shares set forth in U.S.
Shoe's Amended Articles of Incorporation, particularly the right
to vote, constitute a contract between U.S. Shoe and its
shareholders and a property right of shareholders.
86. Ohio Rev. Code Sec. 1701.01(CC)(2) impairs the
voting rights of certain shares in violation of Article Fourth
and the contractual and property rights of U.S. Shoe shareholders.
87. Section 10, Article I of the United States
Constitution, and Section 28, Article II of the Ohio Constitution
prohibit the Ohio General Assembly from passing any "laws
impairing the obligation of contracts."
88. The Control Share Acquisition Act, by virtue of
Ohio Rev. Code Sec. 1701.01(CC)(2), violates Section 10, Article
I of the United States Constitution, Section 28, Article II of
the Ohio Constitution by impairing the obligations of U.S. Shoe's
contract with its shareholders, and the due process clause of the
Fourteenth Amendment to the United States Constitution by
depriving U.S. Shoe's shareholders of property interests without
due process of law.
89. Plaintiffs have no adequate remedy at law.
The Poison Pill Plan Violates
Ohio Rev. Code Chapter 1701
---------------------------
(COUNT SIX)
90. Plaintiffs repeat and reallege the averments set
forth in paragraphs 1-89 of this Complaint as if fully rewritten
herein.
30
<PAGE>
91. The Rights created by the Poison Pill Plan are
rights to receive a dividend in cash, property or securities
pursuant to Ohio Rev. Code Sec. 1701.33.
92. The Poison Pill Plan excludes shares held by a
holder of 20% or more of U.S. Shoe's outstanding Common Shares
from the dividend created, and therefore the Poison Pill Plan
violates Ohio Rev. Code Sec. 1701.33.
93. The Poison Pill Plan grants options to purchase
Common Shares in the event of a flip-in, and is invalid because
U.S. Shoe does not have sufficient authorized but unissued Common
Shares to satisfy exercise of the Rights, in violation of Ohio
Rev. Code Sec. 1701.16.
94. The amount of dividend U.S. Shoe would be required
to pay under the Poison Pill Plan would create an unlawful
disposition of all of U.S. Shoe's assets in violation of Ohio
Rev. Code Sec. 1701.76 or a voluntary dissolution of U.S. Shoe
without requisite shareholder approval in violation of Ohio Rev.
Code Sec. 1701.86.
95. Plaintiffs have no adequate remedy at law.
Failure by U.S. Shoe's Directors to Redeem
its Poison Pill Violates their Fiduciary Duties
-----------------------------------------------
(COUNT SEVEN)
96. Plaintiffs repeat and reallege the averments set
forth in paragraphs 1-95 of this Complaint as if fully rewritten
herein.
97. Luxottica Acquisition's Tender Offer offers a
substantial premium to U.S. Shoe's stockholders for their stock,
31
<PAGE>
and contains no threat or coercion of any kind to U.S. Shoe or to
U.S. Shoe's stockholders. The Tender Offer treats all U.S. Shoe
shareholders equally and allows them to decide for themselves
whether to accept the benefits of the premium offer.
98. The purported purpose of the Poison Pill Plan is
to protect U.S. Shoe's shareholders. Luxottica Acquisition's all
cash, all shares premium offer does not imperil U.S. Shoe's
shareholders in any way. Thus, the Poison Pill Plan cannot
legitimately be used to block the Tender Offer and, accordingly,
U.S. Shoe's Board of Directors have fiduciary duties under Ohio
law to redeem the Rights to allow the Tender Offer to proceed.
99. U.S. Shoe's Board of Directors has refused and
likely will continue to refuse to redeem the Poison Pill Plan as
necessary to allow Plaintiffs' premium Tender Offer to proceed to
completion.
100. U.S. Shoe's refusal to redeem the Rights denies
U.S. Shoe's shareholders the right freely to consider the Tender
Offer on its merits and to accept the Tender Offer if they choose
to do so.
101. Plaintiffs have no adequate remedy at law.
IRREPARABLE INJURY
------------------
102. Unless temporary, preliminary and permanent
injunctive relief is granted, plaintiffs and U.S. Shoe's
shareholders will be irreparably harmed in at least the following
respects:
(a) Luxottica Acquisition faces
the difficulty of proceeding nationwide,
if there is a "summary suspension" in
Ohio, and the inability to consummate
the Tender Offer if the Division denies
permission to proceed with the Tender
Offer because it will be effectively
unable to purchase nationwide;
(b) the confusion, delay, or
litigation resulting from any attempt to
enforce the Take-Over Act will adversely
affect plaintiffs' ability to purchase
shares pursuant to the Tender Offer
32
<PAGE>
nationwide, and could be used by U.S.
Shoe's management to frustrate the
Tender Offer and deprive U.S. Shoe
shareholders of the opportunity to
choose whether or not to tender their
shares;
(c) U.S. Shoe shareholders may be
discouraged from accepting the Tender
Offer because of uncertainty surrounding
the Take-Over Act;
(d) U.S. Shoe's shareholders will
be further subjected to corporate
governance inconsistent with their own
best interests and Luxottica Acquisition
may be unable to comply with the illegal
vote required by the Control Share
Acquisition Act;
(e) U.S. Shoe's shareholders may
be deprived of an opportunity to receive
the benefits of plaintiffs' all cash
premium offer; and
(f) Luxottica Acquisition's ability
to consummate the Tender Offer may be
impeded as a result of U.S. Shoe's
failure to redeem the Rights.
103. Unless temporary, preliminary and permanent
injunctive relief is granted, shareholders of U.S. Shoe who
reside throughout the United States, including those residing in
the State of Ohio, may be deprived of their right freely to
consider and avail themselves of the Tender Offer and to sell
their shares to Luxottica Acquisition at the substantial premium
over market prices offered pursuant to the Tender Offer.
WHEREFORE, plaintiffs pray that this Court:
(i) declare and adjudge that the Take-Over Act is
unconstitutional as applied to the Tender Offer;
(ii) temporarily, preliminary and permanently enjoin
defendants, their respective assigns and successors, their
directors, officers, agents, employees, attorneys, servants and
shareholders and all persons in active concert or participation
with them, from taking any actions to enforce or apply the Take-
33
<PAGE>
Over Act to the Tender Offer;
(iii) declare and adjudge that Ohio Rev. Code Sec.
1701.831(E)(1), by virtue of Ohio Rev. Code Sec. 1701.01(CC)(2),
is unconstitutional as applied to the Tender Offer;
(iv) preliminarily and permanently enjoin defendants
from classifying or treating any U.S. Shoe shares as "interested
shares" pursuant to Ohio Rev. Code Sec. 1701.01(CC)(2) for pur-
poses of conducting the vote on the proposed control share acqui-
sition under Ohio Rev. Code Sec. 1701.831(E)(1);
(v) declare and adjudge that the U.S. Shoe's Poison
Pill is illegal, null and void;
(vi) declare and adjudge that U.S. Shoe's Board of
Directors is in breach of their fiduciary duties under Ohio law
for refusing to redeem the Rights;
(vii) preliminarily and permanently enjoin U.S.
Shoe and its Board of Directors from taking any steps to enforce
or amend the Poison Pill (except to redeem the Rights);
(viii) preliminarily and permanently order U.S. Shoe
and its Board of Directors to redeem the Rights;
(ix) award plaintiffs its costs and disbursements in
this action, including reasonable attorney's fees; and
34
<PAGE>
(x) grant such other and further relief as the Court
may deem just and proper.
Respectfully submitted,
________________________________
Thomas B. Ridgley (0000910)
Trial Attorney
VORYS, SATER, SEYMOUR AND PEASE
52 East Gay Street
P.O. Box 1008
Columbus, Ohio 43216-1008
(614) 464-6229
Attorneys for Plaintiffs
OF COUNSEL:
WINSTON & STRAWN
Anthony J. D'Auria
175 Water Street
New York, New York 10038
(212) 269-2500
VORYS, SATER, SEYMOUR AND PEASE
Laura G. Kuykendall (0012591)
52 East Gay Street
P.O. Box 1008
Columbus, Ohio 43216-1008
(614) 464-6400
35
<PAGE>
VERIFICATION
------------
MICHAEL A. BOXER, Assistant Secretary and General
Counsel of Luxottica Acquisition Corp., hereby declares, under
penalty of perjury, that he has read the foregoing Complaint
and that the allegations contained are true to the best of his
knowledge, information and belief.
________________________________
Subscribed and sworn to
before me this ____ day
of ____________, 1995.
______________________________
NOTARY PUBLIC
36
