Luxottica Group, S.p.A. (LUX)

US Holdings sponsors a tax incentive savings plan covering all full-time employees. US Holdings makes quarterly contributions in cash to the plan based on a percentage of employees’ contributions. Additionally, US Holdings may make an annual discretionary contribution to the plan which may be made in the form of Luxottica Group’s American Depository Receipts (“ADRs”) or cash.

Aggregate contributions made to the tax incentive savings plan by US Holdings were US Dollar 8.3 million (Euro 6.7 million) and US Dollar 11.5 million (Euro 9.2 million) for fiscal years 2004 and 2005, respectively.

Effective January 1, 2006, the Cole defined contribution plan was merged into the US Holdings tax incentive savings plan.

With the acquisition of Cole, US Holdings, through one of its wholly owned subsidiaries, now sponsors the following additional other benefit plans which cover certain present and past employees of the Cole companies acquired:

·                  Cole provides post-employment benefits under individual agreements for continuation of health care benefits and life insurance coverage to former employees after employment but before retirement. As of December 31, 2004 and 2005, the accrued liability related to this benefit was US Dollar 1.6 million (Euro 1.2 million) and US Dollar 2.4 million (Euro 2.0 million), respectively, and is included in accrued employee benefits on the consolidated balance sheet. The increase in the liability in 2005 is largely attributable to a change in the claims cost table used by the plan’s actuary in calculating the future liability. This change was made because the Company’s medical plans in which the participants are enrolled for 2006 generally provide better medical benefits than the previous plans.

·                  Cole has qualified defined contribution plans covering all full-time employees in the U.S. Eligible employees may contribute a percentage of their compensation to the plan. Cole provides for a mandatory company match in cash of 25 percent of the first 4 percent of employee contributions. The Company may make an annual discretionary contribution to the plan in cash. US Holdings’ matching contributions of approximately Euro 0.9 million will be made in early 2006 and Euro 0.9 million was contributed in 2005.

·                  Cole also maintains a defined contribution plan covering all full-time employees in Puerto Rico. This plan provides a mandatory match of 50 percent of the first six percent of employee contributions. Company contributions to this plan were made weekly throughout 2004 and 2005. The employees in Puerto Rico who participated in the Company’s tax incentive savings plan in the past were transferred into the Cole plan effective January 1, 2006. Additionally, the plan was amended to provide for a match of 100 percent of the first three percent of employee contributions.

·                  Cole established and maintains the Cole National Group, Inc. Supplemental Retirement Benefit Plan, which provides supplemental retirement benefits for certain highly compensated and management employees who were previously designated by the former Board of Directors of Cole as participants. This is an unfunded non-contributory defined contribution plan. Each participant’s account is credited with a percentage of the participant’s base salary and interest earned on the average balance during the year. This plan was frozen as to future salary credits on the effective date of the Cole acquisition in 2004. The plan liability of Euro 1.6 million and Euro 1.7 million at

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December 31, 2004 and 2005, respectively, is included in accrued employee benefits on the consolidated balance sheet.

·                  Cole maintained a deferred compensation plan for executives and other senior management which allowed for the deferral of a portion of their compensation. A total of US Dollar 3.2 million (Euro 2.3 million) was paid to the participants in the fourth quarter of 2004 in accordance with the change in control provisions of this plan. There is no remaining liability for this plan on the consolidated balance sheet at December 31, 2004.

U.S. Holdings sponsors a tax incentive savings plan covering all full-time employees. U.S. Holdings makes quarterly contributions in cash to the plan based on a percentage of employees’ contributions. Additionally, U.S. Holdings may make an annual discretionary contribution to the plan which may be made in Luxottica Group S.p.A.’s American Depository Recipts (“ADRs”) or cash.

Aggregate contributions made to the tax incentive savings plan by U.S. Holdings were US Dollar 6.7 million (Euro 6.0 million) and US Dollar 8.3 million (Euro 6.7 million) for fiscal years 2003 and 2004, respectively.

With the acquisition of Cole, U.S. Holdings through one of its wholly-owned subsidiaries, now sponsors the following additional other benefit plans which cover certain present and past employees of the Cole companies acquired:

•              Cole provides post employment benefits under individual agreements for continuation of health care benefits and life insurance coverage to former employees after employment but before retirement. As of December 31, 2004, the accrued liability related to this benefit was US Dollar 1.6 million (Euro 1.2 million) and is included in the accrued employee benefits on the consolidated balance sheet.

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