LensCrafters 2010 Annual Report Download - page 176

ANNUAL REPORT 2010> 174 |
filed a motion to dismiss for lack of personal jurisdiction in October 2008. The court did not address that motion. The case
was transferred to the Western District of Texas, Austin Division, in January 2009, pursuant to the defendants’ motion to
transfer venue. On January 11, 2010, plaintiffs filed a motion requesting that the court permit the case to proceed as a class
action on behalf of all optometrists who sublease from LensCrafters in Texas.
On February 8, 2010, the parties reached an agreement to settle the litigation on confidential terms. On March 8, 2010,
the court dismissed the case with prejudice. The effect of this settlement on the Group’s future operations and cash flow
is not material.
Costs associated with the litigation for the years ended December 31, 2010 and 2009, were not material. The effect of this
settlement on the Company’s future operations and cash flow is not material.
French competition authority investigation
Our French subsidiary Luxottica France S.A.S., together with other major competitors in the French eyewear industry, has
been the subject of an anti–competition investigation conducted by the French Competition Authority relating to pricing
practices in such industry. The investigation has concluded and, to date, no formal action has yet been taken by the French
Competition Authority. As a consequence, it is not possible to estimate or provide a range of potential liability that may
be involved in this matter. The outcome of any such action, which the Company intends to vigorously defend, is inherently
uncertain, and there can be no assurance that such action, if adversely determined, will not have a material adverse effect
on our business, results of operations and financial condition.
Other proceedings
The Company is a defendant in various other lawsuits arising in the ordinary course of business. It is the opinion of the
management of the Company that it has meritorious defenses against all such outstanding claims, which the Company will
vigorously pursue, and that the outcome of such claims, individually or in the aggregate, will not have a material adverse
effect on the Company’s consolidated financial position or results of operations.
27. RELATED PARTY TRANSACTIONS
Licensing agreements
The Group executed an exclusive worldwide license for the production and distribution of Brooks Brothers brand eyewear.
The brand is held by Retail Brand Alliance, Inc. (“RBA”), which is owned and controlled by a director of the Company,
Claudio Del Vecchio. The original license expired in 2009 and was renewed for an additional five years on March 31, 2010.
For further details about this renewal, please refer to Note 2 – “Significant events during the year ended December 31,
2010” of the Management Report on the Consolidated Financial Statements as of December 31, 2010. The Group paid
royalties under the license to RBA of Euro 0.8 million in 2010 and Euro 0.3 million in 2009.
Incentive stock option plans
On September 14, 2004, the Company announced that its primary stockholder, Leonardo Del Vecchio, had allocated 2.11
percent of the shares of the Company – equal to 9.6 million shares, owned by him through the company La Leonardo
Finanziaria S.r.l. and currently owned through Delfin S.à r.l., a financial company owned by the Del Vecchio family, to
a stock option plan for the senior management of the Company. The options became exercisable on June 30, 2006
following the meeting of certain economic objectives and, as such, the holders of these options became entitled to
exercise such options beginning on that date until their termination in 2014. During 2010, 1.2 million options from this
grant were exercised. As of December 31, 2010, 8.1 million options were outstanding.