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    secondresponseform10k2009.htm

August 14, 2009

United States Securities and Exchange Commission

100 F Street, NE

Washington, D.C.   20549-6010

Attn:  Celeste M. Murphy, Legal Branch Chief

RE:           AZZ incorporated

File No. 001-2777

Form 10-K for the Year Ended February 28, 2009

AZZ incorporated (the “Company” or “AZZ”) provides the following response to the comment letter dated July 31, 2009, of the Staff of the Securities and Exchange Commission (the “Letter”) concerning the Company’s Form 10-K for the year ended February 28, 2009 (the “Form 10-K”).

AZZ has the following responses to the comment letter received from the Staff.

Information Incorporated Into Part III by Reference to Proxy Statement

Executive Compensation, page 13

Compensation Discussion and Analysis, page 13

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We note your response and proposed disclosure in regards to comment three in our letter dated July 2, 2009. However, we continue to believe that you should provide a more robust disclosure of how and why the Committee chose to award the amounts reported in the Summary Compensation Table. For example, in the penultimate paragraph of the section titled “Performance-Based Incentive Compensation” on page A-5
of your proposed disclosure, you state the following:

“The Committee has determined that, based upon the actual fiscal year results for fiscal year 2009 and their respective performances during this year and, in the case of Mr. Dingus, the annual evaluation of Mr. Dingus for fiscal year 2009 conducted by the Committee in consultation with the full board, Messrs. Dingus and Perry have fulfilled
their respective maximum performance levels for diluted earnings per share and have met or exceeded their target performance levels for their respective qualitative goals. Accordingly, both officers received 200% of the target cash award attributable to diluted earnings per share and 125% of the target cash award attributable to their respective qualitative goals.”

Revise to disclose how Messrs. Dingus and Perry fulfilled their respective performance levels for diluted earnings per share and “met or exceeded” their respective target performance levels for their respective qualitative goals. Simply stating that these two officers satisfied the performance levels and qualitative goals does
not provide meaningful analysis. Also, explain how the Committee arrived at a 200% award, as it is not clear from your disclosure how this percentage level was calculated. Revise to

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provide similar analyses with respect to the awards made to your other named executive officers.

By way of further example, in the “Long-Term Incentive Compensation” subsection on page A-6 of your proposed disclosure, you provide a list of factors that the Committee considers when determining the size of stock appreciation rights grants. Your revised disclosure should detail how the Committee analyzed these factors when choosing
the amounts actually awarded to the named executive officers.

RESPONSE:  AZZ directs the Staff’s attention to the Compliance and Disclosure Interpretations released by the Commission with respect to Regulation S-K, last updated as of May 19, 2009 (the “CD&I”).  In particular, please note that, in its response to question 118.04 in the CD&I,
the Commission states that “there is no requirement that a company provide quantitative targets for what are inherently subjective or qualitative assessments – for example, how effectively the CEO demonstrated leadership.”

AZZ has duly noted the Staff’s comments and the guidance provided by the Commission in the CD&I.  In response to the Staff’s comments contained in the Letter, AZZ will file a Form 10-K/A for the fiscal year ended February 28, 2009 (the “Form 10-K/A”), which will include the disclosure
set forth in Exhibit A attached hereto.  See the following paragraphs and tables of Exhibit A:  the fourth full paragraph on page 3, the sixth full paragraph on page 3, the “Fiscal 2009 Diluted Earnings per Share Levels” table on page 5, the second full paragraph on page 6, the third full paragraph on page 6 and the second full paragraph on page
7.  Two additional copies of Exhibit A, one marked to show changes made in response to the Letter and one marked to show cumulative changes, have been included to assist the Staff in reviewing AZZ’s proposed changes.

2.

In your proposed disclosure in response to comment four in our letter dated July 2, 2009, you state that, while the company does not set compensation components to meet specific benchmarks, the Committee does consider market data when determining the overall compensation of the company's named executive officers. In this regard, revise to describe the findings from your market data analysis and then what decisions were
made and what compensation changes were considered/implemented and why.

RESPONSE:  AZZ has duly noted the Staff’s comments and in the Form 10-K/A will include the disclosure set forth in Exhibit A attached hereto.  See the following paragraphs of Exhibit
A:  the first full paragraph on page 2 and the fifth full paragraph on page 2.

3.

In your proposed disclosure in response to comment four in our letter dated July 2, 2009, you state that compensation is determined, in part, by an analysis of internal pay equity. Please revise to describe the findings from your internal pay equity analysis and then what decisions were made and what compensation changes were considered/implemented and why.

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RESPONSE:  AZZ has duly noted the Staff’s comments and in the Form 10-K/A will include the disclosure set forth in Exhibit A attached hereto.  See the following paragraphs of Exhibit
A:  the second and fifth full paragraphs on page 2.

Annual Incentive Compensation, page 15

4.

We note your response to comment five in our letter dated July 2, 2009. In this regard, you state that disclosing certain quantitative goals would cause you competitive harm because these targets are based on the company's strategic plan, which typically includes contemplated transactions (including proposed strategic acquisitions of other companies) that may not have been disclosed to the public by the time that any
particular fiscal year has ended. In light of the fact that these performance targets relate to a completed fiscal year and actual segment results have been disclosed, in your response letter please further explain how disclosing these targets would cause you substantial competitive harm. Provide specific examples from last year if necessary. Along with any other information you deem appropriate, please discuss the following in your analysis:

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An explanation of how the performance targets set forth in your strategic plan differ from the target projections that are released to the public. For example, we note that an 8-K filed on June 30, 2009 contained annual internal revenue projections for 2010 as well as actual results for 2008 and 2009 (see slide seven of your presentation filed as exhibit 99.1).

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An explanation of how disclosure of these targets would cause substantial competitive harm in light of the fact that you disclose each segment's historical annual internal revenue, operating income, and return on assets in footnote 11 “Operating Segments” of your Form 10-K for the year ended February 28, 2009.

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An analysis of how your strategic plan impacts the diluted earnings per share target set by the board, and whether your diluted earnings per share target is also based, in part, upon the company's completion of strategic transactions.

RESPONSE:  AZZ has duly noted the Staff’s comments and in the Form 10-K/A will include the disclosure set forth in Exhibit A attached hereto.  See the following paragraphs of Exhibit A:  the fifth full paragraph on page 3, the first full paragraph on page 4, the second full paragraph
on page 4, the first full paragraph on page 5, the “Fiscal 2009 Target Levels for Various Other Performance Objectives” table on page 5 and the third full paragraph on page 6.

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AZZ acknowledges that the Company is responsible for the adequacy and accuracy of the disclosure in its filing. AZZ acknowledges that the Staff’s comments or changes to disclosure in response to the Staff’s comments do not foreclose the Commission from taking any action with respect to the filing. AZZ also acknowledges that the
Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

Very truly yours,

/s/ Dana L. Perry

Dana L. Perry

Senior Vice President, Finance

And Chief Financial Officer

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Exhibit A

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Compensation Program Overview

The Compensation Committee (the “Committee”) of the Board has responsibility for establishing, implementing and continually monitoring adherence to the Company’s compensation philosophy. The Committee ensures that the total compensation paid to the Company’s management team is fair, reasonable and competitive.
Generally, the types of compensation and benefits provided to members of the management team, including the named executive officers, are similar to those provided to other executive officers.

The individuals who served as the Company’s Chief Executive Officer and Chief Financial Officer during fiscal 2009, as well as the other individuals included in the Summary Compensation Table on page 18 of the Company’s proxy statement for its 2009 Annual Meeting (the “Proxy Statement”), are referred to as the “named
executive officers” throughout this Form 10-K/A.

Compensation Philosophy and Objectives

The Committee believes that the most effective executive compensation program is one that is designed to reward the achievement of specific annual, long-term and strategic goals by the Company and which aligns executives’ interests with those of the shareholders by rewarding performance to achieve goals set by the Company, with the
ultimate objective of improving shareholder value. The Committee evaluates both performance and compensation to ensure that the Company maintains its ability to attract and retain superior employees in key positions and that compensation provided to key employees remains competitive relative to the compensation paid to similarly situated executives of publicly traded companies with similar characteristics. To that end, the Committee believes executive compensation packages provided by the Company to its executives,
including the named executive officers, should include both cash and equity-based compensation that reward performance as measured against established goals.

Role of Executive Officers in Compensation Decisions

The Committee makes all compensation decisions including equity awards for the management team (which includes the named executive officers).

The Chief Executive Officer annually reviews the performance of each member of the management team (other than his own, which is reviewed by the Committee). The conclusions reached and recommendations based on these reviews, including with respect to salary adjustments and annual award amounts, are presented to the Committee. The Committee
can exercise its discretion in modifying any recommended adjustments or awards to executives made by the Chief Executive Officer.

Setting Executive Compensation

Based on the foregoing objectives, the Committee has structured the Company’s annual and long-term incentive-based cash and non-cash executive compensation to motivate executives to achieve the business goals set by the Company and reward the executives for achieving such goals. In furtherance of this, the Committee has the authority
under its charter to periodically engage an outside human resources consulting firm to conduct a review of its total compensation program for the Chief Executive Officer as well as for other key executives. The human resources consulting firm provides the Committee with relevant market data and alternatives to consider when making compensation decisions for the Chief Executive Officer and on the recommendations being made by the Company’s Chief Executive Officer for executives other than
the Chief Executive Officer.  In fiscal 2009, the Committee engaged Hewitt Associates to perform an executive compensation review for purposes of advising the Committee with respect to executive compensation for fiscal 2010.

EX A - 1

In making compensation decisions, the Committee compares each element of total compensation against a group of publicly-traded manufacturing companies. This group of companies, which is periodically reviewed and updated by the Committee, consists of companies against which the Committee believes the Company competes for talent and
for shareholder investment.  In fiscal 2009, this group of companies included Universal Stainless & Alloy Products, Friedman Industries Inc., Morton Industrial Group Inc., Preformed Line Products Co., Catalina Lighting Inc., Webco Industries Inc., Global Power Equipment Group, Juno Lighting Inc., LSI Industries Inc., NN Inc., Haynes International Inc., WHX Corp., Northwest Pipe Company, Keystone Consolidated Industries Inc., Niagara Corp., Lamson & Sessions Co., Neenah Foundry Co. and Roanoke
Electric Steel Corp.  Though the Committee considers this market data on the compensation practices of these companies in determining the overall compensation of the Company’s named executive officers (including in determining base salary ranges, as described below), it does not set compensation components to meet specific benchmarks (e.g., targeting salaries “above the median” or equity compensation “at the 75th percentile”).
Based on this market data analysis, the Committee concluded that the compensation levels for the Company’s named executive officers fell within the range of the observed market compensation levels.

Compensation is determined based upon market data on the compensation of similarly situated executives of such companies, internal pay equity (including the executive’s accountability and impact on Company operations) and the individual’s experience level and performance. In considering internal pay equity, the Committee has
no formula or established ratios for setting one executive’s total compensation versus the compensation of another executive officer. Rather, the Committee subjectively evaluates the relative importance of each named executive officer’s role to the Company as a whole, which results in certain executives receiving more total compensation than others (e.g., the Company’s Chief Executive Officer is paid more than its Chief Financial Officer).

Factors that may result in a deviation from the market data are an individual’s experience level, the job responsibilities of the position and the relative responsibility of the position compared to that of others within the Company. The Committee may also consider how the Company has performed relative to the group of companies
listed above.

The Committee strives to develop compensation packages for our executives made up of a balanced combination of base salary, annual incentive awards, and long term compensation. The overall compensation of our executive officers, including the employment agreements with our Chief Executive Officer and Chief Financial Officer, utilizes a
combination of these forms of compensation. In setting executives’ compensation, our Committee reviews the total remuneration that each respective officer potentially could receive over the next several years under scenarios contemplating the executive’s continued employment or retirement during the period.

While the Committee uses a variety of factors in making compensation decisions for the Company’s named executive officers, the Committee does not use any particular weighting or formula to determine executive compensation. Rather, the Committee subjectively evaluates all of the factors noted in the discussion