LensCrafters 2007 Annual Report Download - page 136

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS | 135 <
name is owned by Retail Brand Alliance, Inc. (“RBA”), which is owned and controlled by a Director
of the Company. The license agreement expires in 2009. Royalties paid to RBA for such agreement
were Euro 0.9 million, Euro 1.3 million and Euro 0.5 million in fiscal years 2007, 2006 and 2005
respectively.
In July 2004, the Company signed a worldwide exclusive license agreement to manufacture and
distribute ophthalmic products under the name of Adrienne Vittadini. The Adrienne Vittadini trade
name was owned by RBA until November 2006 when the license was sold by RBA to a party
unrelated to the Company. For fiscal years 2006 and 2005 royalties paid to RBA for such agreement
were Euro 1.0 million and Euro 0.9 million.
As of December 31, 2007 the balance of accounts receivable and payable related to RBA (including
service revenues described in the next paragraph) amount to Euro 0.0 million and Euro 0.4 million,
respectively (Euro 0.1 million and Euro 0.7 million, as of December 31, 2006).
Service revenues. During fiscal years 2007, 2006 and 2005, subsidiaries of Luxottica U.S.
Holdings Corp. (“US Holdings”) performed certain services for RBA. Amounts received for the
services provided were Euro 0.2 million, Euro 0.7 million and Euro 0.6 million, in fiscal 2007, 2006
and 2005, respectively.
Stock incentive plan. On September 14, 2004, the Company announced that its majority
shareholder, Mr. Leonardo Del Vecchio, had allocated shares held through La Leonardo Finanziaria
S.r.l. (subsequently merged into Delfin S.a.r.l.), a holding company of the Del Vecchio family,
representing at that time 2.11% (or 9.6 million shares) of the Company’s authorized and issued
share capital, to a stock option plan for top management of the Company. The stock options to be
issued under the stock option plan vested upon the meeting of certain economic objectives as of
June 30, 2006 and, as such, the holders of these options became entitled to exercise such options
beginning on that date until their termination in 2014. In 2007, 400,000 options from this grant were
exercised.
Transactions with former chairman of Oakley. Certain of the Company’s Oakley associates
perform services for a company owned by the former chairman of Oakley. Total billings for services
rendered by Oakley were Euro 0.4 million since the acquisition date. The agreement governing the
provision of these services can be terminated at any time with a 30 day written notice. In addition,
Oakley may incur other costs on behalf of the former chairman and such company that are
reimbursed after such amounts are paid by Oakley or with a prepaid deposit. As of December 31,
2007, the aggregate amount due from the former chairman and such company was approximately
Euro 0.1 million.
Oakley leases an aircraft from a different corporation owned by the former chairman of Oakley which
expires January 31, 2009, subject to automatic annual extensions unless Oakley, in its discretion,
terminates the agreement as of such date or any subsequent expiration date. The annual lease
payment is approximately Euro 0.1 million and the Company bears all costs and expenses of
operating and maintaining the aircraft. Oakley entered into time sharing agreements with the former
chairman and various other entities controlled by him whereby the Company is reimbursed for costs
of the aircraft when utilized by the former chairman or such other entities.
As of December 31, 2007 total receivables and payables from/to other related parties not
considered in the above reported paragraphs amount to Euro 0.9 million and Euro 0.7 million,
respectively (Euro 1.3 million and Euro 0.2 million as of December 31, 2006). These amounts mainly
refer to commercial transactions with the companies Type 20 S.r.l. and Optica Limited.