<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 10)
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THE UNITED STATES SHOE CORPORATION
(Name of Subject Company)
THE UNITED STATES SHOE CORPORATION
(Name of Person(s) Filing Statement)
COMMON SHARES, WITHOUT PAR VALUE
(AND ASSOCIATED PREFERENCE SHARE PURCHASE RIGHTS)
(Title of Class of Securities)
912605102
(CUSIP Number of Class of Securities)
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James J. Crowe, Esq.
Vice President, Secretary and General Counsel
The United States Shoe Corporation
One Eastwood Drive
Cincinnati, Ohio 45227-1197
(513) 527-7000
(Name, address and telephone number of person authorized to receive
notice and communications on behalf of the person(s) filing)
With a copy to:
William F. Henze II, Esq.
Jones, Day, Reavis & Pogue
599 Lexington Avenue
New York, New York 10022
(212) 326-3939
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This Amendment No. 10 amends and supplements the Solicitation/
Recommendation Statement on Schedule 14D-9 filed on March 16, 1995, as
previously amended (the "Schedule 14D-9"), by The United States Shoe
Corporation (the "Company"), with respect to the tender offer by Luxottica
Acquisition Corp., an indirect wholly-owned subsidiary of Luxottica Group
S.p.A., to purchase all outstanding common shares, without par value, of the
Company, including associated preference share purchase rights, at a price of
$28 per share (and associated right), upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated March 3, 1995, as amended
and supplemented, and in the related Letter of Transmittal, as amended and
supplemented (the "Luxottica Offer"), as set forth in this Amendment No. 10.
All capitalized terms not otherwise defined herein shall have the meanings
assigned thereto in the Schedule 14D-9.
ITEM 3. IDENTITY AND BACKGROUND.
Item 3(b)(2) of the Schedule 14D-9 is hereby amended and supplemented
by adding at the end thereof the following:
On April 26, 1995, Avant-Garde, LAC and the Company entered
into an Amendment to the Merger Agreement (the "Amendment to Merger
Agreement"), pursuant to which the parties agreed (i) not to dismiss
certain counts in the Ohio Litigation in order to retain an injunction
prohibiting application of ORC Section 1701.01(cc)(2), to the extent
it would be applied to impair the voting rights of certain holders of
the Common Shares in connection with the vote required by the Control
Share Acquisition Act to permit the acquisition of Common Shares
pursuant to the Luxottica Offer, and (ii) to reduce the time period
following the 831 Meeting that the Luxottica Offer may remain open.
The foregoing description of the Amendment to Merger Agreement is
qualified in its entirety by reference to the text of the Amendment to
Merger Agreement, a copy of which is filed as Exhibit 46 hereto and is
incorporated herein by reference.
Annex I is restated in its entirety as attached hereto in
order to correct the citizenship of Mr. Giannola.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.
Item 6(a) of the Schedule 14D-9 is hereby amended and supplemented by
adding at the end thereof the following:
and except for the exercise on March 31, 1995 by Philip E. Beekman, a
director of the Company, of options to purchase each of 1,333 Common
Shares at an exercise price of $12.56 per Common Share and 666 Common
Shares at an exercise price of $9.063 per Common Share, and the sale
on March 27, 1995 of 1,752 Common Shares at a price of $26.25 per
Common Share by K. Brent Somers to cover taxes resulting from the
vesting of restricted Common Shares.
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ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
Item 8 of the Schedule 14D-9 is hereby amended and supplemented by
adding at the end thereof the following:
Control Share Acquisition Act Meeting. On April 26, 1995, the
Company and Luxottica Group issued a joint press release (the "April
26 Press Release") announcing, among other things, that the special
meeting of the Company's shareholders held pursuant to the Control
Share Acquisition Act scheduled for May 5, 1995 will be adjourned to
10:00 a.m. on Thursday, May 11, 1995, and that the distribution of
the Company's revised definitive proxy materials relating to such
special meeting (the "Company's April 27 Control Share Proxy
Materials") will commence on April 27, 1995. Copies of the April 26
Press Release and the Company's April 27 Control Share Proxy Materials
are filed as Exhibits 47 and 48, respectively, hereto and are
incorporated herein by reference.
Litigation. The Luxottica Action. On April 25, 1995,
Luxottica Group, LAC, Avant-Garde, the Company and the Company's
Directors filed with the District Court a Stipulation of Dismissal of
Certain Claims (the "April 25 Stipulation of Dismissal"). A copy of
the April 25 Stipulation of Dismissal is filed as Exhibit 49 hereto
and is incorporated herein by reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
The following Exhibits are filed herewith:
Exhibit 46 - The Amendment to Merger Agreement.
Exhibit 47 - The April 26 Press Release.
Exhibit 48 - The Company's April 27 Control Share Proxy Materials.
Exhibit 49 - The April 25 Stipulation of Dismissal.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: April 27, 1995
THE UNITED STATES SHOE CORPORATION
By: /s/ Bannus B. Hudson
---------------------------------------------
Name: Bannus B. Hudson
Title: President and Chief Executive Officer
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ANNEX I
AVANT-GARDE DESIGNEES TO THE BOARD OF DIRECTORS
The following table sets forth the name, age, citizenship and principal
occupation or employment at the present time and during the past five years of
each person Avant-Garde Optics, Inc. intends to designate to be elected or
appointed as directors of the Company pursuant to the Merger Agreement. Unless
otherwise noted, each such person is a citizen of the Republic of Italy.
Luxottica S.p.A. is a wholly owned subsidiary of Luxottica Group S.p.A.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT, MATERIAL OCCUPATIONS,
OFFICES OR EMPLOYMENTS HELD
NAME DURING PAST FIVE YEARS AND AGE
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<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.
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. Mr. Boxer is 33 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.
Vito Giannola........................ Mr. Giannola has been Controller of Avant-Garde
Optics, Inc. since January 1990 and was Assistant
Controller of Avant-Garde Optics, Inc. since 1986. Mr.
Giannola is a citizen of the United States of America.
Mr. Giannola is 31 years old.
</TABLE>
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EXHIBIT INDEX
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Exhibit 46 - The Amendment to Merger Agreement.
Exhibit 47 - The April 26 Press Release.
Exhibit 48 - The Company's April 27 Control Share Proxy Materials.
Exhibit 49 - The April 25 Stipulation of Dismissal.
<PAGE> 1
EXHIBIT 46
AMENDMENT TO AGREEMENT AND PLAN OF MERGER
AMENDMENT, dated as of April 26, 1995 (this "Amendment"), by
and among AVANT-GARDE OPTICS, INC., a New York corporation ("Parent"),
LUXOTTICA ACQUISITION CORP., a Delaware corporation and a wholly owned
subsidiary of Parent ("Purchaser"), and THE UNITED STATES SHOE CORPORATION, an
Ohio corporation (the "Company").
RECITALS
WHEREAS, Parent, Purchaser and the Company are parties to the
Agreement and Plan of Merger, dated as of April 21, 1995 (the "Agreement"); and
WHEREAS, Parent, Purchaser and the Company wish to amend the
Agreement pursuant to Section 7.3 thereof as set forth below.
NOW, THEREFORE, Parent, Purchaser and the Company hereby agree
as follows:
1. Defined Terms. Capitalized terms used but not defined
herein will have the respective meanings assigned to them in the Agreement.
2. Amendments. (a) Section 1.1(a)(iii)(B)(y) of the
Agreement is hereby amended and restated in its entirety as follows:
"(y) 5:00 p.m. New York time on the date of the 831 Meeting
(as hereinafter defined), or, in the event that prior to such
time the inspector of election at the 831 Meeting shall not
have finally officially certified the results of voting at the
831 Meeting, 3:00 p.m. New York time on the next business day
following the date of the 831 Meeting."
(b) Section 5.12 of the Agreement is hereby amended and
restated in its entirety as follows:
"5.12 Disposition of Litigation. Each of Parent, Purchaser
and the Company agree, promptly, and in no event later than
two business days after the amendment to the Offer
contemplated hereby (unless this Agreement has been earlier
terminated), to use its best efforts (a) to obtain a dismissal
without prejudice of Counts One, Two, Six, Seven, Eight, Nine,
Ten, Eleven, Twelve, Thirteen and Fourteen alleged by
Luxottica Group, Parent and Purchaser, and all claims alleged
in the counterclaims asserted by the Company and the members
<PAGE> 2
of the Company's Board of Directors, in Luxottica Group
S.p.A., et al. v. The United States Shoe Corporation, et al.,
Civil Action No. C-2-95-244 (the "Ohio Litigation"), and (b)
to cause Counts Three, Four and Five alleged by Luxottica
Group, Parent and Purchaser in the Ohio Litigation to remain
pending until Purchaser accepts for payment the Common Shares
(and the associated Rights) tendered pursuant to the Offer,
and, promptly after such time, to obtain a dismissal without
prejudice of such Counts, in all cases with each party bearing
its own costs and attorneys' fees therefor."
3. Effect Upon Agreement. Except as otherwise expressly set
forth herein, all terms and conditions of the Agreement will remain in full
force and effect. Upon the effectiveness of this Amendment, each reference in
the Agreement to "this Agreement", "hereunder", "herein", "hereof", "hereto",
"hereinafter" or of like import will mean and be a reference to the Agreement
as amended hereby and each reference to the Agreement in any other document,
instrument or agreement executed and/or delivered in connection with the
Agreement will mean and be a reference to the Agreement as amended hereby.
4. Applicable Law. This Amendment will be governed by and
construed in accordance with the laws of the State of Ohio applicable to
contracts made and to be performed in that State.
5. Interpretation. The descriptive headings contained herein
are for convenience and reference only and will not affect in any way the
meaning or interpretation of this Amendment.
6. Counterparts. This Amendment may be executed in any
number of counterparts, each of which will be deemed to be an original but all
of which together will constitute but one agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment as of the date first above written.
AVANT-GARDE OPTICS, INC.
By: /s/ Michael A. Boxer
---------------------------
Name: Michael A. Boxer
LUXOTTICA ACQUISITION CORP.
By: /s/ Michael A. Boxer
---------------------------
Name: Michael A. Boxer
THE UNITED STATES SHOE
CORPORATION
By: /s/ K. Brent Somers
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Name: K. Brent Somers
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EXHIBIT 47
FOR IMMEDIATE RELEASE
For more information, contact:
Robert M. Burton, Director of Corporate Communications, The U.S. Shoe
Corporation, 513-527-7471 Mark Harnett, MacKenzie Partners, Inc., Information
Agent, 212-929-5748 Felicia Vonella, Dewe Rogerson Inc., at 212-688-6840,
212-517-6049
U.S. SHOE CORPORATION AND LUXOTTICA GROUP WILL ADJOURN
SPECIAL MEETING TO MAY 11, 1995 -- LUXOTTICA GROUP EXTENDS
TENDER OFFER TO 5:00 P.M. ON MAY 11, 1995
(Milan, Italy and Cincinnati, Ohio, April 26, 1995) -- Luxottica Group S.p.A.
(NYSE:LUX) and The United States Shoe Corporation (NYSE:USR) today announced
that distribution of definitive proxy materials relating to the special meeting
of shareholders of US Shoe to approve Luxottica's proposed acquisition of U.S.
Shoe under Ohio law will commence tomorrow, April 27, 1995. Luxottica and U.S.
Shoe also announced that, in order to permit distribution of such proxy
materials in accordance with applicable rules of the Securities and Exchange
Commission, the special meeting, currently scheduled for May 5, 1995, will be
adjourned to 10:00 a.m. on Thursday, May 11, 1995 at U.S. Shoe's corporate
headquarters, One Eastwood Drive, Cincinnati, Ohio. Shareholders of record at
the close of business on Tuesday, March 21, 1995 will continue to be entitled
to vote at the adjourned meeting.
Luxottica Group S.p.A. today also announced that its indirect wholly owned
subsidiary, Luxottica Acquisition Corp., had extended the expiration of its
tender offer to acquire all outstanding common shares (including associated
preference share purchase rights) of U.S. Shoe at a price of $28.00 net per
share to 5:00 p.m., New York City Time, on Thursday, May 11, 1995. Luxottica
explained that such extension was in accordance with is previously announced
merger agreement with U.S. Shoe, noting that consummation of its outstanding
tender offer remained subject to, among other things, the acquisition being
authorized by U.S. Shoe's shareholders at the special meeting scheduled for May
11, 1995.
According to a preliminary count by Chemical Bank, the depositary, as of the
close of business on April 25, 1995 approximately 1,727,700 common shares of
U.S. Shoe had been tendered by shareholders.
# # #
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EXHIBIT 48
THE UNITED STATES SHOE CORPORATION
ONE EASTWOOD DRIVE CINCINNATI, OHIO 45227
APRIL 26, 1995
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders:
A special meeting of shareholders of The United States Shoe Corporation
(the "Corporation"), called pursuant to the requirements of Section 1701.831 of
the Ohio Revised Code, was convened on Friday, April 21, 1995 at 10:00 A.M. at
The Phoenix, 812 Race Street, Cincinnati, Ohio 45202, and was adjourned until
Friday, May 5, 1995 at 1:00 P.M. or until such later date as necessary to permit
dissemination of supplemental proxy materials to the Corporation's shareholders
(the "Special Meeting"). As announced at the April 21 session of the Special
Meeting, the reconvened Special Meeting will be held at the offices of the
Corporation, One Eastwood Drive, Cincinnati, Ohio 45227. At the May 5 session,
the Special Meeting again will be adjourned until Thursday, May 11, 1995 at
10:00 A.M. and the meeting as reconvened at that time again will be held at the
principal offices of the Corporation. The Special Meeting will be held solely
for the following purposes:
1. To consider and vote upon the authorization required by Section
1701.831 of the Ohio Revised Code to permit the proposed control share
acquisition by Luxottica Group S.p.A. and Luxottica Acquisition Corp. of
the Corporation's outstanding common shares (and the associated preference
share purchase rights) for $28.00 per common share.
2. To consider and vote upon such other matters as may properly come
before the Special Meeting.
Shareholders of record at the close of business on March 21, 1995 are
entitled to vote at the Special Meeting and at any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
AUTHORIZATION OF LUXOTTICA'S CONTROL SHARE ACQUISITION.
James J. Crowe,
Secretary
IMPORTANT
Your prompt dating, signing and returning of the enclosed PINK proxy card
in the enclosed envelope would be appreciated. If you attend the Special
Meeting, you may nevertheless vote in person should you desire. The return of
proxies is important, regardless of the number of shares owned.
<PAGE> 2
SUPPLEMENTAL PROXY STATEMENT
OF
THE UNITED STATES SHOE CORPORATION
FOR THE SPECIAL MEETING OF SHAREHOLDERS
UNDER SECTION 1701.831
OF THE OHIO REVISED CODE
A special meeting of shareholders (the "Special Meeting") of The United
States Shoe Corporation (the "Corporation") was convened on Friday, April 21,
1995 at 10:00 A.M. at The Phoenix, 812 Race Street, Cincinnati, Ohio 45202 in
connection with the tender offer commenced on March 3, 1995 by Luxottica
Acquisition Corp., a Delaware corporation ("LAC") and an indirect wholly-owned
subsidiary of Luxottica Group S.p.A., a corporation organized under the laws of
the Republic of Italy ("Luxottica"), to purchase all of the Corporation's
outstanding common shares without par value (and the associated preference share
purchase rights) (collectively, the "Common Shares") for a purchase price of
$24.00 per Common 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"). On April 21, 1995, Luxottica and the
Corporation agreed to adjourn the Special Meeting until May 5, 1995 or such
later date as is necessary to disseminate proxy materials to the Corporation's
shareholders describing the definitive Agreement and Plan of Merger, dated as of
April 21, 1995 (the "Merger Agreement"), by and among the Corporation, LAC and
Avant-Garde Optics, Inc., a New York corporation, the parent corporation of LAC
and a wholly-owned subsidiary of Luxottica ("Avant-Garde"), pursuant to which
Luxottica and LAC agreed to amend the Offer to provide for, among other things,
a purchase price of $28.00 per Common Share and the elimination of any financing
contingency (the "Revised Offer"). At the May 5 session, the Special Meeting
again will be adjourned until Thursday, May 11, 1995 at 10:00 A.M. and the
meeting as reconvened at that time again will be held at the principal offices
of the Corporation.
The enclosed proxy is solicited by the Board of Directors of the
Corporation (the "Board of Directors") for use at the Special Meeting and at any
adjournment thereof. This Supplemental Proxy Statement is being mailed to
shareholders on or about April 27, 1995. THIS SUPPLEMENTAL PROXY STATEMENT AND
ACCOMPANYING PINK PROXY CARD (THE "SUPPLEMENTAL PROXY MATERIALS") AMEND AND
MODIFY, AND SHOULD BE READ IN CONJUNCTION WITH, THE CORPORATION'S PROXY
STATEMENT DATED MARCH 28, 1995 (THE "831 PROXY STATEMENT") THAT WAS MAILED TO
THE CORPORATION'S SHAREHOLDERS ON OR ABOUT MARCH 28, 1995.
At the Special Meeting, shareholders of the Corporation will consider and
vote upon the authorization required by Section 1701.831 of the Ohio Revised
Code ("Section 831") to permit the proposed "control share acquisition" by
Luxottica and LAC of all the Common Shares of the Corporation (the "Control
Share Acquisition"). Section 831 requires that, prior to any person acquiring
any interest in Common Shares that would entitle such person directly or
indirectly to control 20% or more of the voting power of the Corporation in the
election of its directors, such person obtain the authorization of the
shareholders of the Corporation. The Corporation's Board of Directors has
unanimously determined that the Revised Offer is fair and in the best interests
of the Corporation and its shareholders. ACCORDINGLY, THE BOARD OF DIRECTORS HAS
UNANIMOUSLY RECOMMENDED THAT THE SHAREHOLDERS APPROVE THE REVISED OFFER AND HAS
RECOMMENDED A VOTE FOR AUTHORIZATION OF THE CONTROL SHARE ACQUISITION.
On March 21, 1995, the record date for the determination of shareholders
entitled to vote at the Special Meeting and any adjournments thereof (the
"Record Date"), there were 45,561,785 Common Shares outstanding. Subject to
limitations imposed upon certain "interested shares" by Section 831 (and
described in more detail in the Corporation's 831 Proxy Statement), each Common
Share is entitled to one vote on the matters to be presented at the Special
Meeting.
To authorize the Control Share Acquisition, Section 831 requires (i) the
presence of a quorum at the Special Meeting, (ii) the affirmative vote of the
holders of a majority of the Common Shares present in person or by proxy at the
Special Meeting and (iii) the affirmative vote of the holders of a majority of
such Common
<PAGE> 3
Shares excluding Common Shares that are "interested shares" (as such term is
defined in Ohio Revised Code Section 1701.01(CC)(1) and described below).
Section 831 provides that a quorum shall be deemed to be present at the Special
Meeting if a majority of the Common Shares, and a majority of the
"disinterested" Common Shares, are represented in person or by proxy at the
Special Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR AUTHORIZATION OF
THE CONTROL SHARE ACQUISITION PURSUANT TO THE REVISED OFFER. Promptly complete,
date, sign and return the accompanying PINK proxy card. A shareholder giving a
proxy in the accompanying form retains the power to revoke it by making a later
appointment or by giving notice of revocation to the Corporation's proxy
tabulator, State Street Bank and Trust Company, Corporate Services Department,
P.O. Box 592, Boston, Massachusetts 02102. Attendance at the Special Meeting
does not in itself revoke the appointment; however, it may be revoked by giving
notice of revocation in open meeting. Your Common Shares can also be voted FOR
the authorization by completing, signing, dating and returning Luxottica's and
LAC's PINK proxy card.
If you have any questions or need assistance in voting, please contact D.F.
King & Co., Inc. at 1-800-628-8528.
THE MERGER AND THE REVISED OFFER
On March 3, 1995, Luxottica and LAC commenced a tender offer to acquire all
the outstanding Common Shares of the Corporation for a purchase 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. On April 21, 1995, the
Corporation, Avant-Garde and LAC entered into the Merger Agreement. Under the
terms and conditions of the Merger Agreement, LAC has agreed, subject to certain
conditions, to amend the Offer to reflect the increase to $28.00 per Common
Share in the purchase price offered, to eliminate any financing contingency, to
extend the Offer, and to amend the Offer to reflect certain other provisions of
the Merger Agreement. Pursuant to the Merger Agreement, after completion of the
Revised Offer, LAC (or one or more corporations directly or indirectly
wholly-owned by Luxottica) will be merged with the Corporation (the "Merger").
Each then outstanding Common Share (other than Common Shares owned by LAC,
Luxottica, Avant-Garde or any other direct or indirect subsidiary of
Avant-Garde, Common Shares held in the treasury of the Corporation, Common
Shares held by subsidiaries of the Corporation and Common Shares owned by
dissenting shareholders who perfect any available dissenters' rights under the
Ohio Revised Code (the "Revised Code")), would be converted into the right to
receive $28.00 net per Common Share in cash without interest thereon.
Pursuant to a Guaranty (the "Guaranty"), dated as of April 21, 1995,
Luxottica, as primary obligor and not merely as a surety, has irrevocably,
absolutely and unconditionally guaranteed the payment and performance
obligations of Avant-Garde and LAC under the Merger Agreement and other
specified offer documents to the Corporation, to each other person, if any, to
whom a payment or performance obligation is due under the Merger Agreement and
to certain indemnified parties.
The Merger Agreement, the Merger and the Guaranty are discussed in more
detail in the Corporation's Amendment No. 9 to Schedule 14D-9 which was filed
with the Securities and Exchange Commission (the "SEC") on April 24, 1995 and
which is incorporated herein by reference, and in the revised Offer to Purchase,
which have been mailed separately to the Corporation's shareholders. A copy of
Amendment No. 9 and the exhibits thereto may be obtained without charge upon
written or oral request directed to the Secretary, The United States Shoe
Corporation, One Eastwood Drive, Cincinnati, Ohio 45227, (513) 527-7000. Such
information will be provided by first class mail within one business day of
receipt of the request. Copies of the Schedule 14D-9 and any amendments thereto
also may be obtained from the SEC, upon payment of the SEC's customary charges,
by writing to its principal office at 450 Fifth Street, N.W., Judiciary Plaza,
Room 1034, Washington, DC 20549. Such material is also available for inspection
and copying at the principal office of the Commission at the address set forth
immediately above, at the Commission's regional offices at Seven World Trade
Center, 13th Floor, New York, New York 10048 and Citicorp Center, 500 West
Madison, Suite 1400, Chicago, Illinois 60661, at the office of the New York
Stock Exchange, 20 Broad Street, New York,
2
<PAGE> 4
NY 10005, and at the offices of the Pacific Stock Exchange, 115 Sansome Street,
2nd Floor, San Francisco, CA 94104.
RESPONSE OF THE BOARD OF DIRECTORS
At meetings of the Board of Directors held on April 17, 1995 and on April
21, 1995 (the latter meeting, the "April 21 Meeting"), the Board of Directors
met with its financial and legal advisers to reconsider the Offer as amended and
proposed to be amended pursuant to the terms of drafts of the Merger Agreement
and Guaranty presented to the Board of Directors on April 21, 1995, including
the increase from $24.00 to $28.00 in the price offered per Common Share and the
elimination of certain conditions, including the financing condition, and the
amendment and restatement of other conditions to the Offer. Based on the
proposed terms of the draft Merger Agreement and Guaranty and after receiving
advice from the Corporation's financial adviser, James D. Wolfensohn
Incorporated ("Wolfensohn") and from the Corporation's legal advisers, the Board
of Directors unanimously determined that the Revised Offer and the Merger
Agreement are fair to, and in the best interests of, the Corporation and its
shareholders and recommended acceptance of the Revised Offer, the tender of
Common Shares pursuant to the Revised Offer and approval and adoption of the
Merger Agreement by the holders of Common Shares.
In reaching its determination and recommendations at its meetings on April
17 and April 21, the Board of Directors reviewed in detail the terms of the
Revised Offer and the proposed Merger Agreement and deliberated extensively with
its financial and legal advisers with respect to the foregoing and the various
alternative transactions potentially available to the Corporation. At the end of
the April 21 Meeting, by unanimous vote the Board of Directors (i) approved the
transactions contemplated by the Merger Agreement in a manner satisfying the
fair price requirements contained in paragraph 2(A) of Article Seventh of the
Articles of Incorporation of the Corporation, (ii) determined that the Revised
Offer and the Merger are fair to and in the best interests of the Corporation
and its shareholders, (iii) approved the Revised Offer, the Merger Agreement and
the Merger, (iv) recommended that the holders of Common Shares authorize the
purchase of Common Shares by LAC for purposes of Section 831, (v) recommended
acceptance of the Revised Offer, the tender of Common Shares pursuant to the
Revised Offer and approval and adoption of the Merger Agreement and the Merger
by the holders of Common Shares, (vi) took all actions which are necessary on
the part of its Board of Directors as contemplated by Section 1704.02(A) of the
Revised Code in order to make Chapter 1704 of the Revised Code inapplicable to
the Merger, and (vii) determined that the Revised Offer is a Permitted Offer (as
defined in the Rights Agreement, dated as of March 31, 1986, and subsequently
amended (the "Rights Agreement")) for purposes of the Rights Agreement (the
foregoing actions of the Board of Directors being collectively referred to as
the "Recommendation"); provided that the Recommendation, in whole or in part
(other than the parts referred to in clauses (i), (vi) and (vii) above, which
were effected by irrevocable action), may be withdrawn, modified or amended if
and to the extent legally required for the discharge by the Corporation's
directors of their fiduciary duties as advised by independent legal counsel, who
may be the Corporation's regularly engaged independent legal counsel (a
"Director Duty"). In addition, the Board of Directors resolved that, for
purposes of the Rights Agreement, none of (A) the execution or delivery of the
Merger Agreement, (B) the purchase of Common Shares pursuant to the Offer or (C)
the Merger will cause the Distribution Date, as defined in the Rights Agreement,
to occur.
In taking such actions, the Board of Directors took into account numerous
factors, including, but not limited to:
(A) Prior discussions and analyses and updated analyses of the
business, financial condition and prospects of the Corporation and of its
Women's Specialty Retailing Group and Optical Group and comparisons of the
$28.00 per Common Share price to the sum of (1) the after-tax consideration
to be received upon the closing of the sale of the Footwear Group to Nine
West Group Inc., and (2) public market trading prices and prices paid for
acquisitions of companies considered to be relevant, and to historical
trading prices of the Common Shares;
(B) The terms and conditions of the Revised Offer, the Merger
Agreement and the Guaranty, including without limitation, the elimination
of the financing condition from the Revised Offer;
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<PAGE> 5
(C) The presentation by Wolfensohn and its written opinion to the
effect that, based upon and subject to the information contained therein,
as of April 21, 1995, the consideration to be received by the holders of
Common Shares pursuant to the Revised Offer and the Merger is fair to such
holders from a financial point of view;
(D) An update on the status of discussions with third parties
exploring potential alternative transactions involving the purchase of
parts or all of the Corporation or its businesses; and
(E) The facts that, although at the time of the April 21 Meeting other
parties were continuing to explore with the Corporation potential
alternative transactions and, pursuant to the terms of the Merger
Agreement, following execution of the Merger Agreement the Corporation
would be required to terminate such discussions, including discussions
regarding the sale of the Women's Specialty Retailing Group, (1) none of
such parties had, prior to the time of the April 21 Meeting, made a firm
proposal and there could be no assurance that any would or, if any firm
proposal were made, whether the terms and conditions thereof would provide
superior value to the Corporation's shareholders than the value provided to
the shareholders by the Revised Offer, and (2) the Merger Agreement (x)
permits the Corporation to furnish information to, or enter into
discussions or negotiations with, any person or entity that makes an
unsolicited proposal to acquire the Corporation pursuant to a merger,
consolidation, share exchange, business combination, sale of all or
substantially all the assets, tender or exchange offer or other similar
transaction if a Director Duty requires it to do so (subject to obtaining
an executed confidentiality agreement on terms not more favorable to such
person or entity than the terms contained in the Corporation's
confidentiality agreement with Luxottica and LAC); (y) permits the
Corporation to terminate the Merger Agreement if the Board of Directors
shall have (I) withdrawn its Recommendation, or (II) determined to
recommend to holders of Common Shares or approve a competing transaction,
in either such case in the exercise of its Director Duty (subject in the
latter case to the obligation of the Corporation to notify Avant-Garde and
LAC promptly of any determination by its Board of Directors to recommend
such a competing transaction to the holders of the Common Shares or to
approve such competing transaction, which notice must in any such event be
given not less than 24 hours prior to the Company's termination of the
Merger Agreement); and (z) does not require the Corporation to make any
payment to Luxottica or any of its affiliates in the event the Merger
Agreement is terminated for any reason.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR
THE AUTHORIZATION OF THE CONTROL SHARE ACQUISITION.
OHIO CONTROL SHARE ACQUISITION LAW
A description of the Ohio Control Share Acquisition Law was included in the
Corporation's 831 Proxy Statement previously delivered to shareholders.
Shareholders should review the 831 Proxy Statement for additional information
concerning the provisions of the Ohio Control Share Acquisition Law.
AUTHORIZATION BY THE SHAREHOLDERS OF THE CONTROL SHARE ACQUISITION IS
INDEPENDENT OF ANY DECISION BY SHAREHOLDERS WHETHER OR NOT TO TENDER THEIR
COMMON SHARES PURSUANT TO THE REVISED OFFER. Consummation of the Revised Offer,
and the Merger described in the Revised Offer, however, are conditioned, among
other things, upon shareholder authorization of the Control Share Acquisition
pursuant to Section 831 or LAC's satisfaction, in its sole discretion, that the
provisions of Section 831 are invalid or inapplicable. Therefore shareholders
wishing to receive $28.00 per Common Share should vote to facilitate the Revised
Offer by authorizing the Control Share Acquisition.
CERTAIN VOTING PROCEDURES AT THE SPECIAL MEETING
If the Corporation's form of proxy is signed and returned without
specifying a choice, the Common Shares represented thereby will be voted FOR
authorization of the Control Share Acquisition. If a shareholder abstains from
voting on the Control Share Acquisition (marking "abstain" on the form of
proxy), those
4
<PAGE> 6
Common Shares will be considered as being present at the Special Meeting for
quorum purposes, but the abstention will have the practical effect of a "no"
vote. If a broker indicates on the form of proxy that it does not have
discretionary authority as to certain Common Shares to vote on the Control Share
Acquisition, those Common Shares will be considered as being present at the
Special Meeting for quorum purposes but not entitled to vote with respect to
such matter, and therefore will also have the practical effect of a "no" vote.
Each employee participating in The United States Shoe Corporation Tax
Incentive Savings Plan is entitled to instruct The Charles Schwab Trust Company,
as Trustee, how to vote all Common Shares credited to the employee's accounts
under the plan. The form of proxy will serve as voting instructions to the
Trustee from such participants. Common Shares held in the plan for which voting
instructions are not received by the Trustee from plan participants will be
voted by the Trustee in the same proportion as Common Shares for which the
Trustee does receive instructions.
Proxies representing Common Shares held of record will include Common
Shares allocated to participants under the Dividend Reinvestment Plan for
shareholders of the Corporation and will serve as voting instructions to the
Trustee, as described above, if the registrations are the same. Separate
mailings will be made for different registrations.
SHAREHOLDERS WHO HAVE PREVIOUSLY VOTED AGAINST AUTHORIZATION OF THE CONTROL
SHARE ACQUISITION BY PROPERLY SIGNING, DATING AND MAILING THE CORPORATION'S
WHITE PROXY CARD ARE URGED TO REVOKE SUCH PROXIES AND TO VOTE FOR AUTHORIZATION
OF THE CONTROL SHARE ACQUISITION BY SIGNING, DATING AND RETURNING THE ENCLOSED
PINK PROXY CARD.
Under the Corporation's confidential shareholder voting policy, proxies,
ballots and vote tabulations that identify the particular vote of a shareholder
are kept confidential except (i) to allow the independent inspector of election
to certify the results of the vote; (ii) as necessary to meet applicable legal
requirements, including the pursuit or defense of judicial actions; or (iii) in
the event of a proxy or consent solicitation in opposition to the Board of
Directors and management of the Corporation. Both the tabulator and the
inspector of election are independent of the Corporation, its directors,
officers and employees. Because the Corporation, LAC, Luxottica and Avant-Garde
are all soliciting proxies in favor of the Control Share Acquisition, the
confidential shareholder voting policy will apply absent the occurrence of an
event triggering an exception described in (i) or (ii) above.
SOLICITATION OF PROXIES
In addition to solicitation by mail, directors, officers and regular
employees of the Corporation may solicit proxies in person, by telephone or by
telecopier, none of whom will receive additional compensation for such
solicitations. The Corporation also has retained D.F. King & Co. to assist it in
connection with the solicitation, at an estimated fee of $50,000, plus
reimbursement of out-of-pocket expenses. In addition, the Corporation has
retained Abernathy MacGregor Scanlon as public relations adviser to assist the
Corporation with its communications to shareholders in connection with this
solicitation. The Corporation has agreed to pay Abernathy MacGregor Scanlon its
reasonable and customary compensation for its services. The following officers
or employees of Wolfensohn, the Corporation's financial adviser (599 Lexington
Avenue, New York, New York 10022), may also solicit proxies: Glen S. Lewy; H.
Marshall Sonenshine; and D.G. Kim. The costs of solicitation will be borne by
the Corporation.
OTHER MATTERS
No other matter is to be considered at the Special Meeting. However, if any
other procedural matter properly comes before the Special Meeting, the form of
proxy also confers authority to the persons named in the accompanying proxy to
vote the Common Shares to which the proxy relates on such matter at their
discretion.
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<PAGE> 7
Luxottica's and LAC's Acquiring Person Statement, the Offer and the
Supplement to the Offer to Purchase dated April 24, 1995 contain important
information and should be read by shareholders before any decision is made with
respect to voting on authorization of the Control Share Acquisition.
Only holders of record of Common Shares as of the close of business on the
Record Date are entitled to vote at the Special Meeting or any adjournment
thereof. Shareholders of record on the Record Date will retain their voting
rights for the Special Meeting even if the Common Shares to which such voting
rights relate have been sold after the Record Date or have been, or are,
tendered pursuant to the Revised Offer, whether before or after the Record Date.
The tender of Common Shares pursuant to the Revised Offer does not constitute
the grant to LAC or Luxottica of a proxy or any voting rights with respect to
the tendered Common Shares until such time as such Common Shares are accepted
for payment by LAC.
Proxies representing any Common Shares held in the names of a brokerage
firm, bank, bank nominee or other institution on the Record Date can be executed
only upon receipt of specific instructions by such brokerage firm, bank, bank
nominee or other institution. Accordingly, please contact the person responsible
for your account and instruct that person to execute the PINK proxy card with
respect to Common Shares you own beneficially.
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN, DATE AND MAIL THE
ACCOMPANYING PINK PROXY CARD PROMPTLY. BY COMPLETING, DATING, SIGNING AND
MAILING THE ACCOMPANYING PINK PROXY CARD, ANY PROXY PREVIOUSLY SIGNED BY YOU
WITH RESPECT TO THE CONTROL SHARE ACQUISITION WILL BE AUTOMATICALLY REVOKED.
UNLESS PROPERLY REVOKED, ANY PREVIOUSLY EXECUTED WHITE PROXY YOU HAVE RETURNED
WILL BE VOTED ACCORDING TO YOUR EARLIER INSTRUCTIONS. REMEMBER, THE BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL AUTHORIZING THE
CONTROL SHARE ACQUISITION.
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<PAGE> 8
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL SHAREHOLDERS
The following table sets forth information, as of April 20, 1995 (unless a
different date is specified in the notes to the table), with respect to (a) each
person known by the Board of Directors of the Corporation to be the beneficial
owner of more than 5% of the Corporation's outstanding Common Shares, (b) each
current director of the Corporation, (c) each of the Named Officers (as defined
in Item 402(a)(3) of Regulation S-K) and (d) all directors and executive
officers of the Corporation as a group:
<TABLE>
<CAPTION>
AMOUNT AND NATURE SHARES SUBJECT TO
OF BENEFICIAL OPTIONS EXERCISABLE PERCENT OF
SHAREHOLDER OWNERSHIP (A) WITHIN 60 DAYS CLASS(B)
- ---------------------------------------------- ----------------- ------------------- ----------
<S> <C> <C> <C>
Mellon Bank Corporation....................... 4,678,000(c) 10.1%
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
The Prudential Insurance Company of America... 3,168,000(d) 6.8%
Prudential Plaza
Newark, New Jersey 07102
Sasco Capital, Incorporated................... 2,971,200(e) 6.4%
10 Sasco Hill Road
Fairfield, Connecticut 06430
Leon G. Cooperman............................. 2,678,100(f) 5.8%
c/o Omega Capital Partners
88 Pine Street
New York, New York 10005
Joseph H. Anderer............................. 28,308 13,999 *
Philip E. Beekman............................. 4,999 2,000 *
David M. Browne............................... 103,910(g)(h)(i) 87,750 *
Gilbert Hahn, Jr.............................. 28,999 25,999 *
Noel E. Hord.................................. 61,219(g)(i) 31,250 *
Roger L. Howe................................. 18,999 3,999 *
Bannus B. Hudson.............................. 242,778(g)(i) 187,000 *
Lorrence T. Kellar............................ 21,005 13,999 *
Albert M. Kronick............................. 41,999(h) 22,000 *
Thomas Laco................................... 48,799(h) 5,999 *
Charles S. Mechem, Jr......................... 36,500 24,000 *
John L. Roy................................... 37,999 25,999 *
Michael M. Searles............................ 67,175(i) 56,250 *
Phyllis S. Sewell............................. 11,999 5,999 *
K. Brent Somers............................... 71,810(h)(i) 60,000 *
All directors and executive officers as a
group (20 persons).......................... 1,004,804(g)(h)(i) 728,683 2.1%
</TABLE>
* Percent of class is less than 1%
- -------------------------
(a) The Securities and Exchange Commission has defined "beneficial owner" of a
security to include any person who has or shares voting power or investment
power with respect to any such security or who has the right to acquire
beneficial ownership of any such security within 60 days. Unless otherwise
indicated, (i) the amounts owned reflect direct beneficial ownership, and
(ii) the person indicated has sole voting
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<PAGE> 9
and investment power. Amounts shown include the number of Common Shares
subject to outstanding options under the Corporation's stock option plans
that are exercisable within 60 days.
(b) The percentages shown are calculated on the basis that outstanding shares
include Common Shares subject to outstanding options under the Corporation's
stock option plans that are exercisable by directors and officers within 60
days.
(c) Mellon Bank Corporation, on behalf of itself and its direct or indirect
subsidiaries, Boston Safe Deposit and Trust Company, Mellon Bank, N.A.,
Mellon Capital Management Corporation, The Boston Company Advisors, Inc.,
The Boston Company Asset Management, Inc. and The Dreyfus Corporation, has
reported (in Amendment No. 3 to a Schedule 13G dated March 8, 1995 and filed
with the Securities and Exchange Commission) that as of that date it had
sole voting power with respect to 3,562,000 Common Shares, shared voting
power with respect to 20,000 Common Shares, sole dispositive power with
respect to 3,919,000 Common Shares and shared dispositive power with respect
to 759,000 Common Shares.
(d) The Prudential Insurance Company of America has reported (in a Schedule 13G
dated February 2, 1995 and filed with the Securities and Exchange
Commission) that as of December 31, 1994 it had sole voting power and sole
dispositive power with respect to 265,600 Common Shares and shared voting
power and shared dispositive power with respect to 2,902,400 Common Shares.
(e) Sasco Capital, Incorporated has reported (in a Schedule 13G dated February
3, 1995 and filed with the Securities and Exchange Commission) that as of
that date it had sole voting power with respect to 1,519,300 Common Shares
and beneficial ownership to direct disposition with respect to 2,971,200
Common Shares.
(f) Leon G. Cooperman of Omega Capital Partners, L.P., Omega Institutional
Partners, L.P., Omega Overseas Partners, Ltd., Omega Overseas Partners II,
Ltd., and Omega Advisors, Inc., has reported (in a Schedule 13D dated March
6, 1995 and filed with the Securities and Exchange Commission) that as of
that date he had sole voting power and sole dispositive power with respect
to 2,014,300 Common Shares and shared voting power and shared dispositive
power with respect to 663,800 Common Shares.
(g) Includes restricted Common Shares granted under The United States Shoe
Corporation 1988 Employee Incentive Plan, which total 10,000, 2,985 and
20,000 for Messrs. Hudson, Browne and Hord, respectively, and 32,985 for all
directors and executive officers as a group.
(h) Includes Common Shares in which the reporting person disclaims beneficial
ownership. Messrs. Browne, Kronick and Somers disclaim beneficial ownership
of 33 Common Shares, 2,000 Common Shares and 200 Common Shares,
respectively; such Common Shares are owned by their spouses. Mr. Laco
disclaims beneficial ownership of 2,800 Common Shares; such Common Shares
are held in trust for family members. Directors and executive officers as a
group disclaim beneficial ownership of 5,033 Common Shares.
(i) Includes restricted Common Shares granted in fiscal 1995 under The United
States Shoe Corporation Total Return to Shareholders Plan, which total
9,836, 4,054, 4,469, 4,925 and 2,935, for Messrs. Hudson, Browne, Hord,
Searles and Somers, respectively, and 27,952 for all directors and executive
officers as a group.
By Order of the Board of Directors,
James J. Crowe,
Secretary
Cincinnati, Ohio
April 26, 1995
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<PAGE> 10
- --------------------------------------------------------------------------------
THE UNITED STATES SHOE CORPORATION
PROXY -- SPECIAL MEETING OF SHAREHOLDERS, MAY 11, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder appoints Lorrence T. Kellar, John L. Roy
and Phyllis S. Sewell and each of them, as attorneys, with full power
of substitution, to vote all shares in THE UNITED STATES SHOE
CORPORATION that the undersigned is entitled to vote at the special
meeting of the Corporation's shareholders called to order on April 21,
1995 at The Phoenix, 812 Race Street, Cincinnati, Ohio 45202, and
adjourned until May 5, 1995 at the offices of the Corporation, One
Eastwood Drive, Cincinnati, Ohio 45227, to be adjourned again until
May 11, 1995 at 10:00 A.M. at the offices of the Corporation, One
Eastwood Drive, Cincinnati, Ohio 45227, and at any further
adjournments thereof, upon the matters indicated on the reverse side
hereof and fully described in the Corporation's supplemental proxy
statement dated April 26, 1995 as well as upon any other matter
properly coming before the meeting.
This form of proxy also constitutes instructions to The Charles Schwab
Trust Company, as trustee, to vote all shares, if any, held by such
trustee which are credited to the undersigned under The United States
Shoe Corporation Salaried Employee Tax Incentive Savings Plan.
(Continued, and to be dated and signed on the reverse side)
- --------------------------------------------------------------------------------
<PAGE> 11
- --------------------------------------------------------------------------------
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF
NO DIRECTION IS SPECIFIED, WILL BE VOTED FOR THE AUTHORIZATION
REQUIRED BY SECTION 1701.831 OF THE OHIO REVISED CODE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1.
1. To authorize as required by Section 1701.831 of the Ohio Revised
Code the proposed control share acquisition by Luxottica
Acquisition Corp.
/ /FOR / /AGAINST / /ABSTAIN
2. In their discretion, to act upon such other procedural matters as
may properly come before the meeting.
PLEASE SIGN NAME(S) EXACTLY AS
YOUR NAME APPEARS HEREON. IF
SIGNING AS ATTORNEY,
ADMINISTRATOR, EXECUTOR,
GUARDIAN OR TRUSTEE, PLEASE GIVE
TITLE AS SUCH. IF A CORPORATION,
THIS SIGNATURE SHOULD BE THAT OF
AN AUTHORIZED OFFICER WHO SHOULD
STATE HIS OR HER TITLE. IF A
PARTNERSHIP, SIGN PARTNERSHIP
NAME BY AUTHORIZED PERSON.
Date:
--------------------------------,
1995
--------------------------------
Signature
--------------------------------
Signature if held jointly
PLEASE MARK, SIGN AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENVELOPE
PROVIDED.
- ---------------------------------------------------------------------------
<PAGE> 1
EXHIBIT 49
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
LUXOTTICA GROUP S.p.A., et al., :
:
Plaintiffs, :
: Civil Action No. C-2-95-244
v. :
: Judge James L. Graham
THE UNITED STATES SHOE :
CORPORATION, et al., :
:
Defendants. :
STIPULATION OF DISMISSAL OF CERTAIN CLAIMS
Plaintiffs Luxottica Group S.p.A., Luxottica Acquisition Corp., and
Avant-Garde Optics, Inc., defendants The U.S. Shoe Corporation, Joseph H.
Anderer, Philip E. Beekman, Gilbert Hahn, Jr., Roger L. Howe, Bannus B. Hudson,
Lorrence Kellar, Albert M. Kronick, Thomas Laco, Charles S. Mechem, Jr., John
L. Roy, and Phyllis S. Sewell (collectively the "U.S. Shoe Defendants"), and
defendants Mark Holderman, Donna Owens, and the State of Ohio (collectively the
"State of Ohio Defendants"), by and through their undersigned counsel, hereby
stipulate and agree as follows:
1. Counts One, Two, Six, Seven, Eight, Nine, Ten, Eleven,
Twelve, Thirteen, and Fourteen as alleged in plaintiffs' Third Amended
Complaint are hereby voluntarily dismissed without prejudice.
<PAGE> 2
2. All claims alleged in the counterclaims asserted by the U.S.
Shoe Defendants are hereby voluntarily dismissed without prejudice.
3. Counts Three, Four, and Five as alleged in plaintiffs' Third
Amended Complaint shall remain pending before this Court until plaintiffs'
Tender Offer for U.S. Shoe is consummated, at which time those Counts will be
dismissed without prejudice.
AGREED:
/s/Thomas B. Ridgley
/s/Joseph J. Dehner
/s/David A. Malkoff
-2-
