Employee Benefit Plans

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

Employee Benefit Plans

(14) Employee Benefit Plans

Defined Contribution Plan

Effective July 2002, the Company established a voluntary savings and defined contribution plan (the “Plan”) under Section 401(k) of the Internal Revenue Code. This Plan covers all U.S. employees meeting certain eligibility requirements and allows participants to contribute a portion of their annual compensation. Employees are 100% vested in their own contributions. For the years ended December 31, 2011, 2010, and 2009, the Company did not make any contributions to the Plan.

Effective July 1, 2007, the Company, in accordance with the labor pension system in Taiwan, contributes 6% of salaries to individual pension accounts managed by the Bureau of Labor Insurance. The Plan covers all Taiwan employees that elect the new pension system and all employees hired after July 1, 2005. For the years ended December 31, 2011, 2010, and 2009, the Company contributed $127,000, $148,000, and $127,000, respectively.

Defined Benefit Plan

The Company has a defined benefit plan covering employees in Taiwan. The Company accounts for its defined benefit plan in accordance with the authoritative guidance issued by the FASB on retirement benefits, which requires the Company to recognize the funded status of its defined benefit plan in the accompanying consolidated balance sheet, with the corresponding adjustment to accumulated other comprehensive income, net of tax.

At December 31, 2011 and 2010, $184,567, and $252,458, respectively, is included in accumulated other comprehensive income for amounts that have not yet been recognized in net periodic pension cost. These amounts include the following: unrecognized transition obligation of $39,359 and $47,231 at December 31, 2011 and 2010, respectively, and unrecognized actuarial losses of $145,208 and $205,227 at December 31, 2011 and 2010, respectively. During 2011, the total amount recorded in other comprehensive income related to the pension plan was $67,891 (net of tax), which consisted of an actuarial loss of $60,019 and the recognition of $7,872 of transition obligations recognized during 2011 as a component of net periodic pension cost. The transition obligation and actuarial loss included in accumulated other comprehensive loss and expected to be recognized in net periodic pension cost for the year ended December 31, 2011, is $5,811 and $7,665 respectively.

Pension information for the years ended December 31, 2011 and 2010, is as follows:

	2011		2010
Accumulated benefit obligation	$	185,673	$	226,051
Changes in projected benefit obligation:
Projected benefit obligation at beginning of year		416,897		318,752
Interest cost		8,207		7,329
Actuarial loss (gain)		-45,170		46,358
Benefits paid		—		—
Service cost		5,041		4,302
Currency translation and other		-18,817		40,156
Projected benefit obligation at end of year	$	366,158	$	416,897

Changes in plan assets:

Fair value of plan assets at beginning of year	$	83,591	$	62,414
Actual return on plan assets		741		934
Benefits paid		—		—
Employer contributions		12,737		12,225
Currency translation and other		-4,418		8,018
Fair value of plan assets at end of year	$	92,651	$	83,591

Funded status	$	273,507	$	333,306
Components of net periodic pension cost:
Interest cost	$	8,207	$	7,329
Expected return on plan assets		-1,646		-1,435
Amortization of net loss		13,477		11,516
Service cost		5,041		4,302
Net periodic pension cost	$	25,079		21,712

The Company makes contributions to the plan so that minimum contribution requirements, as determined by government regulations, are met. Company contributions of approximately $13,000 are expected to be made during 2012. Benefit payments of approximately $221,000 are expected to be paid in 2016 through 2021.

The Company utilized the following assumptions in computing the benefit obligation at December 31, 2011 and 2010 as follows:

	31-Dec-11			31-Dec-10
Discount Rate		2.00	%		2.00	%
Rate of increase in compensation levels		3.30	%		3.00	%
Expected long-term rate of return on plan assets		2.00	%		2.00	%