LensCrafters 2008 Annual Report Download - page 92

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> 90 |ANNUAL REPORT 2008
performance targets as defined by the plan will not be achieved. Accordingly no compensation expense
plan has been recorded in 2008 for this plan.
The fair value of the stock options granted was estimated at the date of grant using a binomial lattice
model. The following table presents the weighted - average assumptions used in the valuation and the
resulting weighted average fair value per option granted:
2008 2007 2006
PSP Plan I Plan II
(a) (b)
Dividend yield 1.65% - 1.33% 1.33%
Risk-free interest rate 3.96% - 3.88% 3.89%
Expected option life (years) 2.10 - 5.36 5.53
Expected volatility 30.41% - 26.63% 26.63%
Weighted average fair value (Euro) 17.67 - 6.15 5.8
(a) Stock Performance Plan issued in July 2006 for a total of 9,500,000 options granted
(b) Stock Performance Plan issued in July 2006 for a total of 3,500,000 options granted
As of December 31, 2008 there was Euro 14.8 million of total unrecognized compensation cost related to
non-vested share-based compensation arrangements; that cost is expected to be recognized over a
period of 5 years.
Cash received from option exercises under all share-based arrangements and actual tax benefits realized
for the tax deductions from option exercises are disclosed in the consolidated statements of shareholders’
equity.
12. SHAREHOLDERS’ EQUITY
In May 2008 and June 2007, the Company’s Annual Shareholders Meetings approved cash dividends of
Euro 223.6 million and Euro 191.1 million, respectively. These amounts became payable in May 2008 and
June 2007, respectively. Italian law requires that five percent of net income be retained as a legal reserve
until this reserve is equal to one-fifth of the issued share capital. As such, this legal reserve is not available
for dividends to the shareholders. Legal reserves of the Italian entities included in retained earnings were
Euro 5.6 million and Euro 5.5 million at December 31, 2008 and 2007, respectively.
Luxottica Group’s legal reserve roll-forward for fiscal period 2006-2008 is detailed as follows (thousands of
Euro):
January 1, 2006 5,477
Increase in fiscal year 2006 36
December 31, 2006 5,513
Increase in fiscal year 2007 23
December 31, 2007 5,536
Increase in fiscal year 2008 18
December 31, 2008 5,554