Long Term Retention Plan

9 Months Ended

Sep. 30, 2011

Long Term Retention Plan [Abstract]

Long Term Retention Plan

9. Long Term Retention Plan

On August 8, 2008, the Board of Directors approved an employee retention program that will be payable 50% in cash and 50% in shares, in addition to the annual salary and bonus of certain executives. Payments will be made in the first quarter on annual basis according to the following vesting schedule:

• Year 1 (2008): 17%

• Year 2 (2009): 22%

• Year 3 (2010): 27%

• Year 4 (2011): 34%

The shares granted for the 2008 LTRP were valued at the grant-date fair market value PF $36.8 per share. As of September 30, 2011, the Company paid the 66% related to the years one to three of the 2008 LTRP.

For the three-month period ended September 30, 2011, the related accrued compensation was $28,034 corresponding $11,127 to the share portion of the award credited to Additional Paid-in Capital and $16,907 to the cash portion included in the Balance Sheet as Payroll and social security payable. For the nine-month period ended September 30, 2011, the related accrued compensation expense was $70,417 corresponding $38,120 to the share portion of the award credited to Additional Paid-in Capital and $32,297 to the cash portion included in the Balance Sheet as Payroll and social security payable.

For the three-month period ended September 30, 2010, the related accrued compensation expense was $46,523 corresponding $14,504 to the share portion of the award credited to Additional Paid-in Capital and $32,019 to the cash portion included in the Balance Sheet as Payroll and social security payable.

For the nine-month period ended September 30, 2010, the related accrued compensation expenses was $182,142 corresponding $78,516 to the share portion of the award credited to Additional Paid-in Capital and $103,626 to the cash portion included in the Balance Sheet as Social security payable.

On July 15, 2009, June 25, 2010 and August 1, 2011, the Board of Directors, upon the recommendation of the compensation Committee approved the 2009, the 2010 and the 2011 employee retention programs (“the 2009, 2010 and 2011 LTRP”). The 2011 LTRP was approved by the Compensation Committee on June 27, 2011. The awards under the 2009, 2010 and 2011 LTRP are fully payable in cash in addition to the annual salary and bonus of each employee.

The 2009, 2010 and 2011 LTRP will be paid in 8 equal annual quotas (12.5% each) commencing on March 31, 2010, March 31, 2011 and March 31, 2012, respectively. Each quota is calculated as follows:

• 6.25% of the amount is calculated in nominal terms (“the nominal basis share”),

• 6.25% is adjusted by multiplying the nominal amount by the average closing stock price for the last 60 trading days of the year previous to the payment date and divided by the average closing stock price for the last 60 trading days of 2008, 2009 and 2010 for the 2009, 2010 and 2011 LTRP, respectively. The average closing stock price for the 2009, 2010 and 2011 LTRP amounted to $13.81, $45.75 and $65.41, respectively (“the variable share”).

The 2008, 2009, 2010 and 2011 LTRP have performance and/or eligibility conditions to be achieved at each year end and also require the employee to stay in the Company at the payment date.

The 2008 LTRP compensation cost and the variable share compensation cost of the 2009, 2010 and 2011 LTRP are recognized in accordance with the graded-vesting attribution method and are accrued up to each payment date. The 2009, 2010 and 2011 LTRP nominal basis share are recognized in straight line bases using the equal annual accrual method.

The following tables summarize the LTRP accrued compensation expense for the three- and nine-month periods ended September 30, 2011 and 2010:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2011			2010		2011		2010
LTRP 2009	$	(138,721	)	$	673,842	$	870,504	$	1,382,883
LTRP 2010		46,942			598,709		864,413		1,258,700
LTRP 2011		287,697			—		1,049,182		—