LensCrafters 2012 Annual Report Download - page 255

| 169 >CONSOLIDATED FINANCIAL STATEMENTS - NOTES
Other proceedings
The Company and its subsidiaries are defendants 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.
LICENSING AGREEMENTS
The Group executed an exclusive worldwide license for the production and distribution of
Brooks Brothers brand eyewear. The brand is held by Brooks Brothers Group, Inc. (“BBG”),
which is owned and controlled by a director of the Company, Claudio Del Vecchio. The
license expires on December 31, 2014 but is renewable until December 31, 2019. Royalties
paid under this agreement to BBG were Euro0.7 million in 2012 and Euro0.6 million in
2011.
SERVICE REVENUES
During the years ended December 31, 2012 and 2011, US Holdings performed consulting
and advisory services relating to risk management and insurance for Brooks Brothers
Group, Inc. Amounts received for the services provided for those years were Euro 0.1
million and Euro0.1 million, respectively. Management believes that the compensation
received for these services was fair to the Company.
PURCHASE OF REAL ESTATE
On November 7, 2011, the Company acquired a building next to its registered office in
Milan for a purchase price of Euro21.4 million from Partimmo S.r.l., a company indirectly
controlled by the Company’s Chairman of the Board of Directors. The purchase price is
in line with the fair market value of the building based on a valuation prepared by an
independent expert appointed by the Board’s Internal Control Committee. The Company
recorded this asset at cost. As of December 31, 2011, approximately Euro2.9 million of
improvements were made to the building, a portion of which (equal to approximately
Euro0.4 million plus VAT) was paid by the Company to Partimmo S.r.l. as a reimbursement
of part of the renovation costs.
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.àr.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,
29. RELATED PARTY
TRANSACTIONS