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This excerpt taken from the LUX 6-K filed May 25, 2007. 10. EMPLOYEE BENEFITSLiability for termination indemnities - As required by Italian labor legislation, the benefit accrued by an employee for service to date is payable immediately upon separation. Accordingly, the undiscounted value of that benefit payable exceeds the actuarial present value of that benefit because payment is estimated to occur at the employee’s expected termination date. The Company measures the vested benefit obligation at the actuarial present value of the vested benefits to which the employee would be entitled if all employees were to resign or be terminated as of the balance sheet date. Each year, the Company adjusts its accrual based upon headcount, changes in compensation level and inflation. This liability is not funded. There are also some termination indemnities in other countries which are provided through payroll tax and other social contributions in accordance with local statutory requirements. The related charge to earnings for the years ended December 31, 2004, 2005 and 2006 aggregated Euro 10.4 million, Euro 12.0 million and Euro 12.9 million, respectively. |
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