LensCrafters 2009 Annual Report Download - page 103

Download and view the complete annual report

Please find page 103 of the 2009 LensCrafters annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 128

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS | 101 <
Pearle Vision stores in California, including violations of California laws governing relationships among op-
ticians, optical retailers, manufacturers of frames and lenses, and optometrists, and other unlawful or unfair
business practices. The parties entered into a settlement agreement, which provides for a store voucher
at Pearle Vision or LensCrafters for each class member and the payment of attorneys’ fees and costs. On
December 19, 2008, the court granted fi nal approval of the settlement and entered fi nal judgment. The
settlement became fi nal on March 17, 2009.
Amounts paid to settle this litigation and related costs incurred for the years ended December 31, 2009,
2008 and 2007 were not material.
Oakley Shareholder Lawsuit
On June 26, 2007, the Pipefi tters Local No. 636 Defi ned Benefi t Plan fi led a class action complaint, on
behalf of itself and all other shareholders of Oakley, Inc. ("Oakley"), against Oakley and its Board of Direc-
tors in California Superior Court, County of Orange. The complaint alleged, among other things, that the
defendants violated their fi duciary duties to shareholders by approving Oakley’s merger with Luxottica and
claimed that the price per share fi xed by the merger agreement was inadequate and unfair. The defendants
fi led demurrers to the complaint, which the Court granted without prejudice. On September 14, 2007, the
plaintiff fi led an amended complaint containing the same allegations as the initial complaint and adding
purported claims for breach of the duty of candor. Because the Company believed the allegations were
without merit, on October 9, 2007, the defendants fi led a demurrer to the amended complaint. Rather than
respond to that demurrer, the plaintiff admitted that its claims were moot and on January 4, 2008 fi led a
motion for attorneys’ fees and expenses. The hearing for this motion took place on April 17, 2008.
On May 29, 2008, the Court issued a ruling denying the plaintiff’s motion for attorneys’ fees and expenses
in its entirety. The court did not rule on the defendants’ demurrer to the amended complaint. On July 11,
2008, the Court entered an order dismissing the action with prejudice and denying the plaintiff’s motion for
attorneys’ fees and expenses. The plaintiff appealed the Court’s May 29, 2008 ruling and the July 11, 2008
order. On January 11, 2010, the appellate court affi rmed the trial court’s decision in all respects. The plaintiff
has fi led a petition with the California Supreme Court requesting review of the appellate court’s decision.
Costs associated with this litigation incurred for the years ended December 31, 2009, 2008 and 2007 were
not material. Management believes that no estimate of the range of possible losses, if any, can be made
at this time.
Fair Credit Reporting Act Litigation
In January 2007, a complaint was fi led against Oakley and certain of its subsidiaries in the United States
District Court for the Central District of California, alleging wilful violations of the Fair and Accurate Credit
Transactions Act related to the inclusion of credit card expiration dates on sales receipts. The plaintiff
brought suit on behalf of a class of Oakley’s customers. Oakley denied any liability, and later entered into a
settlement arrangement with the plaintiff that resulted in a complete release in favor of the Oakley defend-
ants, with no cash payment to the class members but rather an agreement by Oakley to issue vouchers
for the purchase of products at Oakley retail stores during a limited period of time. The settlement also
provided for the payment of attorneys’ fees and claim administration costs by the Oakley defendants.
An order approving this settlement was entered on November 24, 2008. The settlement became fi nal on
January 15, 2009.
Amounts paid to settle this litigation and related costs incurred for the years ended December 31, 2009,
2008 and 2007, were not material.