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Luxottica CEO Guerra Steps Down, Company Adopts Co-CEO Model

Italian eyewear company Luxottica Group S.p.A (LUX) said Monday that Andrea Guerra has stepped down as chief executive officer of the company after serving for almost ten years at the helm.

According to media reports, Guerra has stepped down following differences with the company's founder and chairman, Leonardo Del Vecchio.

Luxottica, the owner of the popular Ray-Ban and Oakley sunglass brands, said it has now introduced a new management structure based on a co-CEO model that will allow it to "take advantage of opportunities in a competitive global market of growing complexity and changing competitive dynamics". The new structure will see the founder take on a more active role at the company.

Luxottica said that in a meeting on September 1, its board of directors decided that Guerra will be paid a redundancy incentive payment of 10 million euros, in addition to a severance pay.

Guerra will also be paid 592,294 euros as part of a settlement and novation agreement in consideration for him waiving any claim or right in any case connected to the employment and administration relationships with Luxottica and their resolution.

Luxottica said that for a period of two years from the termination of his employment, Guerra will be prohibited from soliciting employees and associates of Luxottica or other entities within the group. He shall also abide by a non-competition agreement that refers to the company's main competitors.

In consideration of these obligations and their ongoing fulfillment, Guerra shall be due for gross overall remuneration of 800,000 euros. Guerra will sell back his 813,500 shares in the company to the controlling shareholder of the company in an off-market transaction for 41.50 euros per share.

Luxottica noted that in its co-CEO model, one CEO will be focused on Markets, while the other CEO will be dedicated to Corporate Functions.

The company named Enrico Cavatorta, current General Manager and CFO of the Group, as CEO of Corporate Functions. He was also named as Interim CEO of Markets, pending the appointment of a permanent executive to this position.
Luxottica said that the search process for a CEO of Markets is on-going.

Operations, led by Massimo Vian, will temporarily report to Chairman Del Vecchio. The company will create an executive committee, led by the chairman, to support the efficient management of the Group during this new phase.

Cavatorta has been a director of Luxottica since 2003 and general manager since March 2011. He has also been the company's CFO since he joined the Group in 1999.

Cavatorta is a director of the company's principal subsidiaries, including Luxottica U.S. Holdings Corp., OPSM Group Pty Ltd., Luxottica Retail North America Inc. and Oakley Inc. He is also a member of the Board of Directors of Salmoiraghi & Viganò S.p.A.

Prior to joining Luxottica, Cavatorta was employed with Piaggio S.p.A., most recently as Group Controller, responsible for planning and control.

In late March 2014, search engine giant Google, Inc. (GOOG, GOOGL) entered into a strategic partnership with Luxottica to develop innovative wearable smart eye devices for Google Glass. Under the deal, the two companies will collaborate to design, develop and distribute a new breed of web-connected eyewear for Google Glass.

Google Glass is a wearable computer with an optical head-mounted display that is being developed by Google. It displays information in a smartphone-like hands-free format that can communicate with the Internet via natural language voice commands.

LUX closed Friday's trading at $52.98, up $0.57 or 1.09 percent on a volume of 93,476 shares.

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