Luxottica Group, S.p.A. (LUX)

Shareholder Litigation Regarding Merger with Oakley

On June 26, 2007, the Pipefitters Local No. 636 Defined Benefit Plan, a shareholder of Oakley, sued Oakley and its Board of Directors in California Superior Court for Orange County.  The suit alleges breach of fiduciary duties by Oakley's directors, and challenges the fairness of the process implemented by Oakley and its Board in deciding to support Luxottica's acquisition of that company.  The suit does not seek money damages, but rather seeks an injunction barring Oakley and its Board from moving forward with the transaction unless and until Oakley “adopts and implements a fair sales process.’’  Luxottica is not named as a defendant.  Luxottica believes this suit is without merit and intends to vigorously defend the fairness of the transaction.

It is the opinion of management that the outcome of existing claims against us will not have a material adverse effect on our consolidated financial position or results of operations. However, the outcome of these litigation claims is inherently uncertain, and there can be no assurance that one or more of these actions, if adversely determined, will not have a material adverse effect on our business, results of operations and financial condition. In addition, we may be subject to material claims, judgments or proceedings in the future which, if adversely determined, may have a material adverse effect on our business, results of operations and financial condition. See Item 3—“Key Information—Risk Factors—If we become subject to adverse judgments or determinations in legal proceedings to which we are, or may become a party, our future profitability could suffer through a reduction of sales or increased costs.”

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