LensCrafters 2007 Annual Report Download - page 156

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NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS | 155 <
Effective upon the acquisition of Oakley on November 14, 2007, the Company also sponsors a tax
incentive savings plan for all United States Oakley associates with at least six months of service.
This plan is funded by employee contributions with the Company matching a portion of the
employee contribution. Company contributions to the plan for the period November 14, 2007
through December 31, 2007 were Euro 0.1 million.
The Company sponsors the following additional other benefit plans, which cover certain present
and past employees of the Cole companies acquired:
• Cole provides, under individual agreements, postemployment benefits for continuation of health
care benefits and life insurance coverage to former employees after employment. As of
December 31, 2007 and 2006, the accrued liability related to these benefits was Euro 1.0 million
and Euro 1.2 million, respectively, and is included in the other long term liabilities on the
consolidated balance sheet.
• Cole also maintains a defined contribution plan covering all full-time employees in Puerto Rico.
The employees in Puerto Rico who have in the past participated in the Company’s tax incentive
savings plan were transferred into the Cole plan effective January 1, 2006. Additionally, effective
January 1, 2006, the plan was amended to provide for a match of 100% of the first three
percent of employee contributions. In 2007 and 2006, the Company made quarterly
contributions in cash to the plan based on a percentage of employees’ contributions. The
matching contributions to such plan for the fiscal years 2007 and 2006 were immaterial.
• Cole established and maintains the Cole National Group, Inc. Supplemental Retirement Benefit
Plan, which provides supplemental retirement benefits for certain highly compensated and
management employees who were previously designated by the former Board of Directors of
Cole as participants. This is an unfunded non-contributory defined contribution plan. Each
participant’s account is credited with interest earned on the average balance during the year.
This plan was frozen as to future salary credits on the effective date of the Cole acquisition in
2004. The plan liability of Euro 1.0 million and Euro 1.3 million at December 31, 2007 and 2006,
respectively, is included in other long term liabilities on the consolidated balance sheets.
Other defined contribution plan. The Company continues to participate in superannuation plans in
Australia and Hong Kong. The plans provide benefits on a defined contribution basis for
employees on retirement, resignation, disablement or death. Contributions to defined contribution
superannuation plans are recognized as an expense as the contributions are paid or become
payable to the fund. Contributions are accrued based on legislated rates and annual
compensation.
Certain employees of the Company located outside the United States are covered by state
sponsored post-employment benefit plans. These plans are generally funded in conformity with the
applicable local government regulations and amounts are expensed as contributions accrue. The
aggregate liability to the Company for these foreign post-employment benefit plans as of December
31, 2007 and 2006, was immaterial.
Health benefit plans. The Company partially subsidizes health care benefits for eligible retirees.
Employees generally become eligible for retiree health care benefits when they retire from active
service between the ages of 55 and 65. Benefits are discontinued at age 65.
As of the Cole acquisition, the Company has a liability for a postretirement benefit plan maintained
by Cole in connection with its acquisition of Pearle in 1996. This plan was closed to new participants
at the time of Cole’s acquisition of Pearle. Under this plan, the eligible former employees are
provided life insurance and certain health care benefits which are partially subsidized by Cole.
Medical benefits under this plan can be maintained past the age of 65.
Amounts recognized in the consolidated balance sheets as of December 31, 2007 and 2006,
consist of the following: