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

Sunglass Hut Shareholder Lawsuit

In May and June 2001, certain former stockholders of Sunglass Hut International, Inc. (“SGHI”) commenced actions in the U.S. District Court for the Eastern District of New York against the Company and its acquisition subsidiary formed to acquire SGHI on behalf of a purported class of former SGHI stockholders.  These actions were subsequently consolidated into a single amended consolidated class action complaint, which alleged, among other claims, that the defendants violated certain provisions of U.S. securities laws and the rules thereunder, in connection with the acquisition of SGHI in a tender offer and second-step merger.  The plaintiffs’ principal claim was that certain payments to James Hauslein, the former Chairman of SGHI, under a consulting, non-disclosure and non-competition agreement (the “Agreement”) violated the “Best Price Rule” promulgated by the U.S. Securities and Exchange Commission by resulting in a payment for Mr. Hauslein’s SGHI shares and his support of the tender offer that was higher than the price paid to SGHI’s shareholders in the tender offer.  The plaintiffs also alleged that the Company and Mr. Leonardo Del Vecchio, the Company’s Chairman, violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.  The plaintiffs sought, among other remedies, the payment of such higher consideration to all tendering shareholders, other than Luxottica Group S.p.A. and its affiliates.

The Company and the other defendants filed a motion to dismiss the complaint in its entirety, which, on November 26, 2003, the Court granted in part and denied in part.  The Court granted the Company’s motion to dismiss plaintiffs’ claims under Section 10(b) and Rule 10b-5, but denied the Company’s motion to dismiss plaintiffs’ Best Price Rule claim, as well as the claim that the Company aided and abetted Mr. Hauslein’s breach of his fiduciary duties.  In so ruling, the Court noted that it was obligated, for the purpose of rendering its decision on the motion to dismiss, to treat all of the plaintiffs’ allegations in the complaint as true.  On June 8, 2004, the consolidated complaint was further amended to add Mr. Leonardo Del Vecchio, the Company’s Chairman, as a defendant to the aiding and abetting claim.  Plaintiffs also added a new claim against Mr. Del Vecchio under Section 20(a) of the Securities Exchange Act.

On August 31, 2005, the Company agreed with the plaintiffs, without acknowledging any wrongdoing, to a full and final settlement and release (the “Settlement”) of all claims against the Company, its acquisition subsidiary and Mr. Del Vecchio. The Settlement, which called for a payment of Euro 11.6 million (or U.S.$14.5 million), was included in 2005 operations on our consolidated financial statements and has been

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approved by the Court and fully implemented by the parties, with final judgment entered dismissing the case with prejudice. Costs associated with the SGHI litigation incurred for the years ended December 31, 2004 and 2005 were approximately Euro 3.2 million and Euro 5.8 million, respectively.

In May and June 2001, certain former stockholders of Sunglass Hut International, Inc. (“SGHI”) commenced actions in the U.S. District Court for the Eastern District of New York against the Company and its acquisition subsidiary formed to acquire SGHI on behalf of a purported class of former SGHI stockholders. These actions were subsequently consolidated into a single amended consolidated class action complaint, which alleged, among other claims, that the defendants violated certain provisions of U.S. securities laws and the rules thereunder, in connection with the acquisition of SGHI in a tender offer and second-step merger. The plaintiffs’ principal claim was that certain payments to James Hauslein, the former Chairman of SGHI, under a consulting, non-disclosure and non-competition agreement (the “Agreement”) violated the “Best Price Rule” promulgated by the U.S. Securities and Exchange Commission by resulting in a payment for Mr. Hauslein’s SGHI shares and his support of the tender offer that was higher than the price paid to SGHI’s shareholders in the tender offer. The plaintiffs also alleged that the Company and Mr. Leonardo Del Vecchio, the Company’s Chairman, violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The plaintiffs sought, among other remedies, the payment of such higher consideration to all tendering shareholders, other than Luxottica Group S.p.A. and its affiliates.

The Company and the other defendants filed a motion to dismiss the complaint in its entirety, which, on November 26, 2003, the Court granted in part and denied in part. The Court granted the Company’s motion to dismiss plaintiffs’ claims under Section 10(b) and Rule 10b-5, but denied the Company’s motion to dismiss plaintiffs’ Best Price Rule claim, as well as the claim that the Company aided and abetted Mr. Hauslein’s breach of his fiduciary duties. In so ruling, the Court noted that it was obligated, for the purpose of rendering its decision on the motion to dismiss, to treat all of the plaintiffs’ allegations in the complaint as true. On June 8, 2004, the consolidated complaint was further amended to add Mr. Leonardo Del Vecchio, the Company’s Chairman, as a defendant to the aiding and abetting claim. Plaintiffs also added a new claim against Mr. Del Vecchio under Section 20(a) of the Securities Exchange Act.

On August 31, 2005, the Company agreed with the plaintiffs, without acknowledging any wrongdoing, to a full and final settlement and release (the “Settlement”) of all claims against the Company, its acquisition subsidiary and Mr. Del Vecchio. The Settlement, which called for a payment of Euro 11.6 million (or US$ 14.5 million), was included in 2005 operations on our consolidated financial statements and has been approved by the Court and fully implemented by the parties, with final judgment entered dismissing the case with prejudice. Costs associated with the SGHI litigation incurred for the years ended December 31, 2004 and 2005 were approximately Euro 3.2 million and Euro 5.8 million, respectively.

Sunglass Hut Shareholder Lawsuit

In May and June 2001, certain former stockholders of Sunglass Hut commenced actions in the U.S. District Court for the Eastern District of New York against Luxottica Group S.p.A., and  its acquisition subsidiary formed to acquire Sunglass Hut on behalf of a purported class of former Sunglass Hut stockholders. These actions were subsequently consolidated into a single amended consolidated class action complaint which alleged, among other claims, that the defendants violated certain provisions of U.S. securities laws and rules thereunder, in connection with the acquisition of Sunglass Hut in a tender offer and second-step merger. The plaintiffs’ principal claim was that certain payments to James Hauslein, the former chairman of Sunglass Hut, under a consulting, non-disclosure and non-competition agreement (the “Agreement”) violated the “best price rule” promulgated by the SEC by resulting in a payment for Mr. Hauslein’s Sunglass Hut shares and his support of the tender offer that was higher than that paid to Sunglass Hut’s stockholders in the tender offer. The plaintiffs also alleged that the Company and Mr. Leonardo Del Vecchio, our Chairman, violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The plaintiffs sought, among other remedies, the payment of such higher consideration to all tendering shareholders, other than Luxottica Group S.p.A. and its affiliates.

Luxottica Group S.p.A. and the other defendants filed a motion to dismiss the complaint in its entirety which, on November 26, 2003, the Court granted in part and denied in part. The Court granted Luxottica Group S.p.A.’s motion to dismiss plaintiffs’ claim under Section 10(b)  and Rule 10b-5, but denied our motion to dismiss plaintiffs’ best price rule claim, as well as the claim that we aided and abetted Mr. Hauslein’s breaches of his fiduciary duties. In so ruling the Court noted that it was obligated, for the purpose of rendering its decision on the motion to dismiss, to treat all of the plaintiffs’ allegations in the complaint as true. On June 8, 2004, the consolidated complaint was further amended to add Mr. Leonardo Del Vecchio, our Chairman, as a defendant in respect of the two remaining claims.

On August 31, 2005, we agreed with the plaintiffs to a full and final settlement and release (the “Settlement”) of all claims against the Company, our acquisition subsidiary and Mr. Del Vecchio. The Settlement, for a payment of Euro 11.6 million (or US$ 14.5 million), was approved by the Court and final judgment has been entered dismissing the case with prejudice.

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Sunglass Hut Shareholder Lawsuit

In May 2001, certain former stockholders of Sunglass Hut International, Inc., or Sunglass Hut, commenced an action in the U.S. District Court for the Eastern District of New York against Luxottica Group S.p.A., its acquisition subsidiary formed to acquire Sunglass Hut and certain other defendants, on behalf of a purported class of former Sunglass Hut stockholders. The action alleges in the original and in the amended complaint filed later, among other claims, that the defendants violated certain provisions of U.S. securities laws and rules thereunder, in connection with the acquisition of Sunglass Hut in a tender offer and second-step merger, by reason of entering into a consulting, non-disclosure and non-competition agreement prior to the commencement of the tender offer with the former chairman of Sunglass Hut, which purportedly involved paying consideration to such person for his Sunglass Hut shares and his support of the tender offer that was higher than that paid to Sunglass Hut’s

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