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STOCKHOLDERS' EQUITY:
 3 Months Ended
Mar. 31, 2013
STOCKHOLDERS' EQUITY:  
STOCKHOLDERS' EQUITY:

NOTE 12 — STOCKHOLDERS´EQUITY:

 

Treasury Stock:

 

Activity in treasury stock in the three-month period ended March 31, 2013 and 2012 is as follows (in millions):

 

 

 

2013

 

2012

 

Southern Copper common shares

 

 

 

 

 

Balance as of January 1,

 

$

729.8

 

$

734.1

 

Purchase of shares

 

 

 

 

 

Stock dividend

 

—

 

(151.4

)

Balance as of March 31,

 

729.8

 

582.7

 

 

 

 

 

 

 

Parent Company (Grupo Mexico) common shares

 

 

 

 

 

Balance as of January 1,

 

189.0

 

163.7

 

Other activity, including dividend, interest and currency translation effect

 

12.4

 

13.7

 

Balance as of March 31,

 

201.4

 

177.4

 

 

 

 

 

 

 

Treasury stock balance as of March 31,

 

$

931.2

 

$

760.1

 

 

On February 28, 2012, the Company paid a stock dividend of 0.0107 shares of common stock per share of SCC common stock.  The stock dividend was paid with shares of common stock held in treasury by SCC. Shares held in treasury on the record date were not entitled to receive cash or stock dividend.

 

Southern Copper Common Shares:

 

At March 31, 2013 and 2012, there were in treasury 39,045,536 and 34,617,600 SCC’s common shares, respectively.

 

Parent Company common shares:

 

At March 31, 2013 and 2012 there were in treasury 76,394,108 and 83,717,588 of Grupo Mexico’s common shares, respectively.

 

Employee Stock Purchase Plan:

 

In January 2007, the Company offered to eligible employees a stock purchase plan (the “Employee Stock Purchase Plan”) through a trust that acquires shares of Grupo Mexico stock for sale to its employees, employees of subsidiaries, and certain affiliated companies.  The purchase price is established at the approximate fair market value on the grant date.  Every two years employees will be able to acquire title to 50% of the shares paid in the previous two years.  The employees will pay for shares purchased through monthly payroll deductions over the eight year period of the plan.  At the end of the eight year period, the Company will grant the participant a bonus of 1 share for every 10 shares purchased by the employee.

 

If Grupo Mexico pays dividends on shares during the eight year period, the participants will be entitled to receive the dividend in cash for all shares that have been fully purchased and paid as of the date that the dividend is paid.  If the participant has only partially paid for shares, the entitled dividends will be used to reduce the remaining liability owed for purchased shares.

 

In the case of voluntary resignation of the employee, the Company will pay to the employee the fair market sales price at the date of resignation of the fully paid shares, net of costs and taxes.  When the fair market sales value of the shares is higher than the purchase price, the Company will apply a deduction over the amount to be paid to the employee based on the following schedule:

 

If the resignation occurs during:

 

% Deducted

 

1st year after the grant date

 

90

%

2nd year after the grant date

 

80

%

3rd year after the grant date

 

70

%

4th year after the grant date

 

60

%

5th year after the grant date

 

50

%

6th year after the grant date

 

40

%

7th year after the grant date

 

20

%

 

In the case of involuntary termination of the employee, the Company will pay to the employee the fair market sales price at the date of termination of employment of the fully paid shares, net of costs and taxes.  When the fair market value of the shares is higher than the purchase price, the Company will apply a deduction over the amount to be paid to the employee based on the following schedule:

 

If the termination occurs during:

 

% Deducted

 

1st year after the grant date

 

100

%

2nd year after the grant date

 

95

%

3rd year after the grant date

 

90

%

4th year after the grant date

 

80

%

5th year after the grant date

 

70

%

6th year after the grant date

 

60

%

7th year after the grant date

 

50

%

 

In case of retirement or death of the employee, the Company will render the buyer or his legal beneficiary, the fair market sales value as of the date of retirement or death of the shares effectively paid, net of costs and taxes.

 

The stock based compensation expense for the first quarter 2013 and 2012,  under the Employee Stock Purchase Plan and the unrecognized compensation expense as of March 31, 2013 and 2012 under this plan were as follows (in million):

 

 

 

2013

 

2012

 

 

 

 

 

 

 

Stock based compensation expense

 

$

0.5

 

$

0.5

 

Unrecognized compensation expense

 

$

3.7

 

$

5.9

 

 

The unrecognized compensation expense under this plan is expected to be recognized over the remaining one year and nine month period.

 

The following table presents the stock award activity of the Employee Stock Purchase Plan for the three months ended March 31, 2013 and 2012:

 

 

 

Shares

 

Unit Weighted Average
Grant Date Fair Value

 

Outstanding shares at January 1, 2013

 

6,955,572

 

$

1.16

 

Granted

 

—

 

—

 

Exercised

 

(2,349,157

)

$

1.16

 

Forfeited

 

(29,639

)

$

1.16

 

Outstanding shares at March 31, 2013

 

4,576,776

 

$

1.16

 

 

 

 

 

 

 

Outstanding shares at January 1, 2012

 

7,270,341

 

$

1.16

 

Granted

 

—

 

—

 

Exercised

 

(36,303

)

$

1.16

 

Forfeited

 

(90,204

)

$

1.16

 

Outstanding shares at March 31, 2012

 

7,143,834

 

$

1.16

 

 

During 2010, the Company offered to eligible employees a new stock purchase plan (the “New Employee Stock Purchase Plan”) through a trust that acquires series B shares of Grupo Mexico stock for sale to its employees, employees of subsidiaries, and certain affiliated companies.  The purchase price was established at 26.51 Mexican pesos (approximately $2.05) for the initial subscription.  The terms of the New Employee Stock Purchase Plan are similar to the terms of the Employee Stock Purchase Plan.

 

The stock based compensation expense for the first quarter 2013 and 2012, under the New Employee Stock Purchase Plan and the unrecognized compensation expense as of March 31, 2013 and 2012 under this plan were as follows (in million):

 

 

 

2013

 

2012

 

Stock based compensation expense

 

$

0.1

 

$

0.1

 

Unrecognized compensation expense

 

$

3.0

 

$

3.7

 

 

The unrecognized compensation expense under this plan is expected to be recognized over the remaining five year and nine month period.

 

The following table presents the stock award activity of the New Employee Stock Purchase Plan for the three months ended March 31, 2013:

 

 

 

Shares

 

Unit Weighted Average
Grant Date Fair Value

 

 

 

 

 

 

 

Outstanding shares at January 1, 2013

 

2,944,742

 

$

2.05

 

Granted

 

—

 

—

 

Exercised

 

—

 

—

 

Forfeited

 

(22,638

)

$

2.05

 

Outstanding shares at March 31, 2013

 

2,922,104

 

$

2.05

 

 

 

 

 

 

 

Outstanding shares at January 1, 2012

 

3,807,146

 

$

2.05

 

Granted

 

—

 

—

 

Exercised

 

(636,945

)

$

2.05

 

Forfeited

 

(51,675

)

$

2.05

 

Outstanding shares at March 31, 2012

 

3,118,526

 

$

2.05