ANNUAL REPORT 2004 - Luxottica Group
ANNUAL REPORT 2004 - Luxottica Group
ANNUAL REPORT 2004 - Luxottica Group
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CONTRIBUTIONS<br />
U.S. Holdings expects to contribute US$ 27.8 million<br />
(Euro 20.5 million at the December 31, <strong>2004</strong> noon<br />
buying rate) to its pension plan in 2005.<br />
OTHER BENEFITS<br />
U.S. Holdings provides certain post-employment<br />
medical, disability and life insurance benefits. As of<br />
December 31, 2003 and <strong>2004</strong>, the accrued liability<br />
related to this obligation was immaterial.<br />
U.S. Holdings sponsors a tax incentive savings plan<br />
covering all full-time employees. U.S. Holdings makes<br />
quarterly contributions in cash to the plan based on a<br />
percentage of employees’ contributions. Additionally,<br />
U.S. Holdings may make an annual discretionary<br />
contribution to the plan which may be made in<br />
<strong>Luxottica</strong> <strong>Group</strong> S.p.A.’s American Depositary<br />
Receipts (“ADRs”) or cash.<br />
Aggregate contributions made to the tax incentive<br />
savings plan by U.S. Holdings were US$ 6.7 million<br />
(Euro 6 million) and US$ 8.3 million (Euro 6.7 million)<br />
for fiscal years 2003 and <strong>2004</strong>, respectively.<br />
With the acquisition of Cole, U.S. Holdings through<br />
one of its wholly-owned subsidiaries, now sponsors<br />
the following additional other benefit plans which cover<br />
certain present and past employees of the Cole<br />
companies acquired:<br />
- Cole provides post-employment benefits under<br />
individual agreements for continuation of health<br />
care benefits and life insurance coverage to former<br />
employees after employment but before retirement.<br />
As of December 31, <strong>2004</strong>, the accrued liability<br />
related to this benefit was US$ 1.6 million (Euro 1.2<br />
million) and is included in the accrued employee<br />
benefits on the consolidated balance sheet.<br />
- Cole has defined contribution plans covering all<br />
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<br />
full-time employees in the U.S. and Puerto Rico.<br />
Eligible employees may contribute a percentage of<br />
their compensation to the plan. In the United<br />
States, Cole provides for a mandatory company<br />
match in cash of 25% of the first 4% of employee<br />
contributions. Additionally, the Company may make<br />
an annual discretionary contribution to the plan in<br />
cash. In Puerto Rico, the plan provides for a<br />
mandatory match of 50% of the first 6% of<br />
employee contributions. Contributions to both<br />
plans are required to be made once a year. U.S.<br />
Holdings’ matching contributions, net of forfeitures,<br />
of Euro 0.9 million were made in early 2005 and<br />
accrued for as of December 31, <strong>2004</strong>.<br />
- Cole established and maintains the Cole National<br />
<strong>Group</strong>, Inc. Supplemental Retirement Benefit Plan,<br />
which provides supplemental retirement benefits<br />
for certain highly compensated and management<br />
employees who were previously designated by the<br />
former Board of Directors of Cole as participants.<br />
This is an unfunded non-contributory defined<br />
contribution plan. Each participant’s account is<br />
credited with a percentage of the participant’s<br />
base salary and interest earned on the average<br />
balance during the year. The plan liability of Euro<br />
1.5 million at December 31, <strong>2004</strong> is included in<br />
accrued employee benefits on the consolidated<br />
balance sheet.<br />
- Cole maintained a deferred compensation plan for<br />
executives and other senior management which<br />
allowed for the deferral of a portion of their<br />
compensation. A total of US$ 3.2 million (Euro 2.3<br />
million) was paid to the participants in the fourth<br />
quarter of <strong>2004</strong> in accordance with the change in<br />
control provisions of this plan. There is no<br />
remaining liability for this plan on the consolidated<br />
balance sheet at December 31, <strong>2004</strong>.<br />
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