LensCrafters 2003 Annual Report Download - page 58

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Plan assets were invested in equity securities, U.S. Government obligations, other fixed income securities and
money market funds.
Supplemental Retirement Plan - A U.S. subsidiary of the Company maintains an unfunded supplemental
retirement plan for participants of its pension plan to provide benefits in excess of amounts permitted under the
provisions of prevailing tax law. The pension liability associated with this plan is accrued using the same actuarial
methods and assumptions as those used for the subsidiary’s pension plan noted above, and such amounts are not
material to the consolidated financial statements.
Health Benefit Plans - A U.S. subsidiary of the Company partially subsidizes health care benefits for eligible
retirees. Included in other long-term liabilities on December 31, 2002, and 2003, is approximately 1.6 million and 
1.5 million of accrued benefits, respectively.
Other Benefits - A U.S. subsidiary of the Company provides certain post-employment medical and life insurance
benefits. The Company’s accrued liability related to this obligation as of December 31, 2002, and 2003, was 1.3
million and 0.9 million, respectively.
Savings Plan - The Company also sponsors a tax incentive savings plan covering all employees. U.S. Holdings
makes quarterly contributions in cash to the plan based on a percentage of employee contributions. Additionally, the
Company may make an annual discretionary contribution to the plan, which may be made in the Company’s American
Depositary Receipts (ADRs) or cash. Aggregate contributions made to the tax incentive savings plan by the Company
for the years ended December 31, 2001, 2002, and 2003, were 9.1 million, 6.4 million and 5.3 million,
respectively.
10 STOCK OPTION AND INCENTIVE PLANS
Stock Option Plan - Beginning in April 1998, certain officers and other key employee of the Company and its
subsidiaries were granted stock options of Luxottica Group under the Company’s stock option plan. The stock
options were granted at a price equal to the market value of the shares at the date of grant. These options become
exercisable in three equal annual installments from the date of grant and expire on or before January 31, 2012.
As Luxottica Group has elected to apply APB Opinion No. 25, no compensation expense was recognized
because the option exercise price was equal to the fair market value on the date of grant.
The following table summarizes key information pertaining to the Company’s defined benefit plan as of September
30, 2002, and 2003, the plan’s measurement date (thousands of Euro):
2002 2003
Change in benefits obligation:
•Benefit obligation, beginning of year 194,634 201,572
•Translation differences (29,365) (33,795)
•Service cost 10,518 10,599
•Interest cost 12,168 10,796
• Actuarial loss 20,219 9,025
•Benefits paid (6,602) (6,365)
Benefit obligation, end of year 201,572 191,832
Change in plan assets
•Fair value of plan assets, beginning of year 180,860 132,550
•Translation differences (27,323) (22,223)
•Actual return (loss) in plan assets (14,385) 16,730
•Employer contribution - 2,382
•Benefits paid (6,602) (6,365)
Fair value of plan assets, end of year 132,550 123,074
Funded status (69,022) (68,758)
Unrecognized net actuarial gain 56,644 51,138
Unrecognized prior service cost 3,439 2,303
Accrued benefit costs (8,939) (15,317)
Amounts recognized in the consolidated
balance sheets consist of the following:
Liabilities:
• Accrued pension cost 8,939 15,317
• Additional minimum liability 41,565 35,160
Liabilities - Other long-term liabilities 50,504 50,477
Asset - Intangible Asset 3,439 2,303
Equity - Other comprehensive income 38,126 32,587
Weighted average assumptions as of September 30:
• Discount rate 6.50% 6.00%
• Expected return on assets 9.00% 8.75%
• Rate of compensation increase 5.50% 4.75%