Salary increase

On June 13, 2007, the Federación Argentina de Empleados de Comercio y Servicios (FAECYS) (the Argentine Federation of Commercial and Services Employees), the Unión de Entidades Comerciales Argentinas (UDECA) (the Argentine Union of Business Companies), the Confederación Argentina de la Mediana Empresa (CAME) (the Argentine Confederation of Medium Sized Companies) and the Cámara Argentina de Comercio (CAC) (the Argentine Chamber of Commerce) executed an agreement setting a 23% phased salary increase for all commercial employees included within the scope of Collective Bargaining Agreement No. 130/175 (the “CBA”). Section two of the agreement was amended on June 21 to make reference to section 100 of the CBA and to clarify the terms of payment of the semiannual bonus.

This increase is calculated upon the basis of the compensation received by employees as at the date thereof, including additional and permanent payments and tickets and/or any equivalents and/or any additional fixed customary payments. The following variable items are excluded from the basis of calculation of the cited percentage:

(i)                 fees,

(ii)                 overtime,

(iii)                attendance bonuses under Section 40 of the CBA,

(iv)                individual or collective bonus payments that are not fixed and permanent, and

(v)                 non-remunerative items.

1.    Payment of the increase

The agreed increase will not be cumulative and will include the attendance bonus under Section 40 of the CBA. It will be paid as follows:

(i)          12% as from June 2007;

(ii)          6% as from September 2007;

(iii)          5% as from November 2007;

(iv)          together with the December 2007 payment, each employee will receive a one-off non-remunerative amount equal to 50% of the 23% figure payable to such employee, pro rated to reflect the time worked.

2.    Nature of the increase

The agreed increase will be considered non-remunerative and will be referred to separately in the pay stub as “agreement dated June 2007”.

Notwithstanding its non-remunerative nature, the corresponding Health Insurance (Obra Social de Empleados de Comercio) payments and contributions will be paid based on this amount as well as the workers’ contribution established in section 100 (restated as of June 21, 1991 by the CBA, on the nominal amount). It should be noted that section 100 of the CBA refers to the 2.5% union contribution to be withheld by employers from the aggregate compensation of the employees included within the scope of the CBA.

As from April 2008, the aggregate increase will be considered remunerative, based on its nominal amount and not taking into account, for this purpose only, the non-remunerative attendance bonus mentioned in the preceding section.

3.    Compensation

The increase applicable to each case shall compensate any increase, up to the amount thereof, granted by employers after January 2007 up to the date of the agreement, on account of this collective bargaining negotiation or otherwise.

4.    Effectiveness

The agreement is effective from June 1, 2007 to August 31, 2008 subject to the prior approval of the Ministry of Labor and Social Security.