CNJ Cole National

Cole National Corporation Announces Amendment to Merger Agreement with Luxottica Group at Increased Price Per Share -- Luxottica raises merger price from $22.50 to a minimum of $26.00 per share CLEVELAND, July 15 /PRNewswire-FirstCall/ -- Cole National Corporation (NYSE:CNJ), today announced that it has entered into an amendment to its merger agreement with Luxottica Group S.p.A. (NYSE:LUX) with the unanimous approval of their Boards of Directors. Under the amendment, the original $22.50 per share cash merger consideration to be paid by Luxottica has been increased to a minimum of $26.00 per share. In addition, if Cole National stockholders approve the Luxottica merger at the annual meeting, which will be adjourned to July 22, 2004, the merger price will be further increased to $27.50 per share in cash, plus an additional amount equal to 4% per annum from the date of stockholder approval through the closing date of the merger. If Cole National does not receive votes from a majority of the outstanding shares to approve the Luxottica merger by July 22, 2004, the higher price would still be payable so long as stockholder approval is obtained at a further adjourned meeting that is held not later than July 29, 2004. Based upon the $27.50 price, the total purchase price of the outstanding Cole National shares and related equity rights is approximately $495 million, plus 4% per annum from the date of stockholder approval through the date of closing. Luxottica Group has advised Cole National that it will fund the payment of the purchase price and transaction costs from Luxottica's cash flow from operations and existing credit facilities. The amendment to the merger agreement also strengthens Luxottica Group's commitment to use its best efforts to avoid or eliminate impediments under any antitrust laws asserted by any governmental entity with respect to the merger. Under the original merger agreement, Luxottica's commitment was qualified such that it was not required to divest businesses or assets accounting for more than $110 million in consolidated net revenue of Cole National alone or of Cole National and Luxottica combined or more than $55 million in consolidated net revenue of Luxottica alone. The amendment to the merger agreement eliminates that qualification. In addition, the amendment to the merger agreement strengthens Cole National's commitment to the Luxottica merger, by narrowing the circumstances under which Cole National could terminate the Luxottica merger agreement in order to accept a competing offer, including that Cole National will no longer have such right after stockholder approval of the Luxottica merger agreement. The amendment does not preclude Cole National from considering a superior proposal prior to stockholder approval of the amended Luxottica merger agreement. To provide Cole National stockholders additional time to consider the recent developments and their impact on the proposed merger with Luxottica Group, Cole National intends to hold the election of directors at the previously scheduled annual meeting on July 20, 2004, and then, prior to the consideration of the Luxottica merger, adjourn the meeting to 4 p.m. local time, on Thursday, July 22, 2004, at The Charles Hotel, One Bennett St., Cambridge, Massachusetts 02138. Cole National stated that its Board of Directors has unanimously confirmed its recommendation that Cole National stockholders approve the Luxottica merger agreement, as amended, at the reconvened meeting on July 22. Stockholders of record of Cole National as of May 21, 2004 will be entitled to vote on the Luxottica merger at the reconvened meeting on July 22, or any adjournment thereof. The Luxottica merger agreement, as amended, is subject to approval by Cole National stockholders, receipt of regulatory approvals and other customary conditions. As Luxottica Group publicly announced earlier this week, Luxottica Group and Cole National expect to complete their required submissions to the Federal Trade Commission (FTC) in connection with its antitrust review by the end of this week. In addition, as previously announced, the parties have committed to the FTC not to close the transaction before September 30, 2004, without its consent. In connection with its approval of the amendment to the Luxottica merger agreement, the Cole National Board of Directors considered, among other things, the price, financing arrangements, timing and uncertainties associated with the previously announced proposal from Moulin International Holdings Limited submitted on July 12, 2004 to acquire Cole National at a price of $25.00 per share in cash. Following the submission of a similar proposal from Moulin on April 15, 2004 (as well as during the two months following Moulin's submission of its initial acquisition proposal on November 17, 2003), Cole National had provided access to confidential information to Moulin, HAL and their financing sources and their respective advisors, and engaged in discussions and negotiations with Moulin with respect to its proposed transaction. On May 12, 2004, Cole National was informed by Moulin that one of Moulin's financing sources was not prepared to provide senior debt financing on the terms originally proposed. The revised Moulin proposal contemplates financing to be provided by the sale of certain Cole National assets to HAL Holding N.V. and debt financing pursuant to financing commitments that are subject to customary conditions but no further due diligence. Moulin's proposal is subject to the termination of the merger agreement with Luxottica Group, completion and execution of definitive agreements with Moulin, approval by Cole National's and Moulin International's stockholders, receipt of regulatory approvals and other customary conditions. Additional information relating to Moulin's most recent proposal and the factors considered by the Cole National Board of Directors in its approval of the amendment to the Luxottica merger agreement are set forth in the supplement to Cole National's proxy statement that will be filed later today with the Securities and Exchange Commission and mailed to all Cole National stockholders of record on May 21, 2004. About Cole National Cole National Corporation's vision business, together with Pearle franchisees, has 2,178 locations in the U.S., Canada, Puerto Rico and the Virgin Islands and includes Cole Managed Vision, one of the largest managed vision care benefit providers with multiple provider panels and nearly 20,000 practitioners. Cole's personalized gift business, Things Remembered, serves customers through 727 locations nationwide, catalogs, and the Internet at http://www.thingsremembered.com/. Cole also has a 21% interest in Pearle Europe, which has 1,496 optical stores in Austria, Belgium, Denmark, Estonia, Finland, Germany, Italy, Kuwait, Norway, the Netherlands, Poland, Portugal and Sweden. Safe Harbor Statement Certain statements in this press release may constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Such statements involve risks, uncertainties and other factors that could cause actual results to differ materially from those which are anticipated. Such risks and uncertainties include, but are not limited to, risks that the Luxottica merger will not be completed, risks that stockholder approval may not be obtained for the Luxottica merger, legislative or regulatory developments that could have the effect of delaying or preventing the Luxottica merger, fluctuations in exchange rates, economic and weather factors affecting consumer spending, the ability to successfully introduce and market new products, the ability to effectively integrate recently acquired businesses, the ability to successfully launch initiatives to increase sales and reduce costs, the availability of correction alternatives to prescription eyeglasses, as well as other political, economic and technological factors and other risks referred to in their filings with the Securities and Exchange Commission. These forward-looking statements are made as of the date hereof, and Luxottica and Cole National do not assume any obligation to update them. Cole National Corporation or Kekst and Company Joseph Gaglioti Victoria Weld/Ruth Pachman 330-486-3100 212-521-4800 DATASOURCE: Cole National Corporation CONTACT: Cole National Corporation: Joseph Gaglioti, +1-330-486-3100; or Kekst and Company: Victoria Weld or Ruth Pachman, +1-212-521-4800 Web site: http://www.thingsremembered.com/

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