SEC Comment Letter for CABOT CORP (CBT) (CIK 0000016040) (CBT) — Mar 17, 2010
CABOT CORP (CBT) (CIK 0000016040)
Date: March 17, 2010 · CIK: 0000016040 · Accession: 0000000000-10-014688
AI Filing Summary & Sentiment
Reasoning
Referenced dates: February 8, 2010
Letter
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4631 DIVISION OF CORPORATION FINANCE Mail Stop 4631 March 17, 2010 Mr. Eduardo E. Cordeiro Executive Vice President and Chief Financial Officer Cabot Corporation Two Seaport Lane, Suite 1300 Boston, MA 02210 RE: Form 10-K for the year ended September 30, 2009 Form 10-Q for the peri od ended December 31, 2009 Schedule 14A filed on January 28, 2010 File No. 1-5667
Dear Mr. Cordeiro: We have reviewed your response letter dated February 8, 2010 and have the following additional comments. If you disagree with a comment, we will consider your explanation as to why our comment is inappl icable or a revision is unnecessary. Please be as detailed as necessary in your explanat ion. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. After reviewing this information, we may or may not raise additional comments. Please understand that the purpose of our re view process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing. We look forward to working with you in these respects. We welcome any questions you may have about our comments or on any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
FORM 10-Q FOR THE PERIOD ENDED DECEMBER 31, 2009
Note N – Foreign Currency Losses and Subsequent Events, page 26
1. You disclose that you will be required to apply highly-inflationary accounting to your Venezuelan operations and that you antic ipate this will result in a one time gain of less than $10 million during the second quarter of fiscal 2010. Please provide us with a comprehensive explan ation of how you intend to account for the change in functional currency, including how you arrived at the estimated gain of $10 million. Please also address the imp act of your accounting to any deferred tax assets and translation adjustments previously recorded related to these operations. Refer to ASC 830-10-45.
Mr. Eduardo E. Cordeiro Cabot Corporation March 17, 2010 Page 2 of 3 DEFINITIVE PROXY STATEMENT ON SCHEDULE 14A
FILED ON JANUARY 28, 2010
Executive Compensation, page 22
Short-Term Incentive Compensation, page 26 Short-Term Incentive Compensation Payouts, page 29
2. You disclose that 30% of the short- term incentive compensation is based on achievement of individual performance objectives; however, you do not disclose what these individual objectives ar e, and how the compensation committee evaluated each named executive officer’s individual performance in reaching their respective individual goa ls. This is particularly important when no payouts were payable on the basis of corporate perfo rmance. In accordance with Item 402(b)(2)(vii) of Regulation S-K, in future filings please desc ribe the individual goals and performance objectives for each named executive officer. If a named executive officer’s personal performance is measured against pre-established personal goals or individual objectives, pleas e disclose the objectives and describe how performance or non-performance impacted the committee’s decision to award the personal objective compone nt of the short-term incentive compensation. Please note that to the extent that the committee’s decisions regarding a named executive officer’s i ndividual performance were based upon a subjective evaluation, please ensure to di sclose each named executive officer’s personal objectives by also identifying the specific contributions made by each executive and contextualize those achiev ements for purposes of demonstrating how they resulted in specific compen sation decisions. Although quantitative targets for subjective or qualitative a ssessments may not be required, you should provide insight of how qualitative inputs are transl ated into objective pay determinations.
Long-Term Incentive Compensation Awards, page 30
3. You state that the value of the stock option award “was based on the value of each officer’s targeted long-term incentive award for 2009”; however, you do not disclose what that target value was. In future filings please discuss how the committee will determine the total value of the newly structured long-term incentive compensation (we note your discussion on page 27). For each named executive, your disclosure should provide substantive analysis and insight into why the compensation committee determin ed that the levels of equity compensation were appropriate in light of the factors cons idered in deriving those payouts.
Mr. Eduardo E. Cordeiro Cabot Corporation March 17, 2010 Page 3 of 3 Grant of Plan-Based Awards Table, page 36
4. Please tell us how you are reporting the values in the “Threshold” column under the “Estimated Future Payouts Under N on-Equity Incentive Awards” heading considering your disclosure in the thir d paragraph of your “Short-Term Incentive Compensation” discussion on page 26 where you state that if threshold performance is achieved, 50% of the target bonus opportunity is payable, assuming that the threshold adjusted EB ITDA is achieved. Please refer to Item 402(d)(2)(iii) of Regulation S-K.
* * * * Please respond to these comments within 10 business days, or tell us when you will provide us with a response. Please provi de us with a response letter that keys your responses to our comments and provides a ny requested information. Detailed letters greatly facilitate our review. Please file your supplemental response on EDGAR as a correspondence file. Please understand that we may have additional comments after reviewing your responses to our comments. You may contact Era Anagnosti, Staff A ttorney, at (202) 551-3369 or, in her absence, Craig Slivka, Special Counsel, at (202) 551-3729 if you have any questions regarding legal or disclosure matters. Pleas e contact Jeffrey Gordon, Staff Accountant, at (202) 551-3866 or, in his absence, Nudrat Sa lik, Staff Accountant, at (202) 551-3692 if you have questions regarding comments on the fi nancial statements and related matters.
Sincerely,
Rufus Decker
Accounting Branch Chief
Show Raw Text
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-4631
DIVISION OF
CORPORATION FINANCE
Mail Stop 4631
March 17, 2010
Mr. Eduardo E. Cordeiro Executive Vice President and Chief Financial Officer Cabot Corporation Two Seaport Lane, Suite 1300 Boston, MA 02210
RE: Form 10-K for the year ended September 30, 2009
Form 10-Q for the peri od ended December 31, 2009
Schedule 14A filed on January 28, 2010
File No. 1-5667
Dear Mr. Cordeiro:
We have reviewed your response letter dated February 8, 2010 and have the
following additional comments. If you disagree with a comment, we will consider your explanation as to why our comment is inappl icable or a revision is unnecessary. Please
be as detailed as necessary in your explanat ion. In some of our comments, we may ask
you to provide us with information so we may better understand your disclosure. After
reviewing this information, we may or may not raise additional comments.
Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure requirements and to enhance the overall
disclosure in your filing. We look forward to working with you in these respects. We
welcome any questions you may have about our comments or on any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
FORM 10-Q FOR THE PERIOD ENDED DECEMBER 31, 2009
Note N – Foreign Currency Losses and Subsequent Events, page 26
1. You disclose that you will be required to apply highly-inflationary accounting to
your Venezuelan operations and that you antic ipate this will result in a one time
gain of less than $10 million during the second quarter of fiscal 2010. Please
provide us with a comprehensive explan ation of how you intend to account for the
change in functional currency, including how you arrived at the estimated gain of
$10 million. Please also address the imp act of your accounting to any deferred
tax assets and translation adjustments previously recorded related to these
operations. Refer to ASC 830-10-45.
Mr. Eduardo E. Cordeiro
Cabot Corporation
March 17, 2010 Page 2 of 3
DEFINITIVE PROXY STATEMENT ON SCHEDULE 14A
FILED ON JANUARY 28, 2010
Executive Compensation, page 22
Short-Term Incentive Compensation, page 26
Short-Term Incentive Compensation Payouts, page 29
2. You disclose that 30% of the short- term incentive compensation is based on
achievement of individual performance objectives; however, you do not disclose
what these individual objectives ar e, and how the compensation committee
evaluated each named executive officer’s individual performance in reaching their respective individual goa ls. This is particularly important when no payouts were
payable on the basis of corporate perfo rmance. In accordance with Item
402(b)(2)(vii) of Regulation S-K, in future filings please desc ribe the individual
goals and performance objectives for each named executive officer. If a named executive officer’s personal performance is measured against pre-established personal goals or individual objectives, pleas e disclose the objectives and describe
how performance or non-performance impacted the committee’s decision to award the personal objective compone nt of the short-term incentive
compensation. Please note that to the extent that the committee’s decisions
regarding a named executive officer’s i ndividual performance were based upon a
subjective evaluation, please ensure to di sclose each named executive officer’s
personal objectives by also identifying the specific contributions made by each
executive and contextualize those achiev ements for purposes of demonstrating
how they resulted in specific compen sation decisions. Although quantitative
targets for subjective or qualitative a ssessments may not be required, you should
provide insight of how qualitative inputs are transl ated into objective pay
determinations.
Long-Term Incentive Compensation Awards, page 30
3. You state that the value of the stock option award “was based on the value of each
officer’s targeted long-term incentive award for 2009”; however, you do not disclose what that target value was. In future filings please discuss how the
committee will determine the total value of the newly structured long-term
incentive compensation (we note your discussion on page 27). For each named executive, your disclosure should provide substantive analysis and insight into
why the compensation committee determin ed that the levels of equity
compensation were appropriate in light of the factors cons idered in deriving those
payouts.
Mr. Eduardo E. Cordeiro
Cabot Corporation March 17, 2010 Page 3 of 3 Grant of Plan-Based Awards Table, page 36
4. Please tell us how you are reporting the values in the “Threshold” column under
the “Estimated Future Payouts Under N on-Equity Incentive Awards” heading
considering your disclosure in the thir d paragraph of your “Short-Term Incentive
Compensation” discussion on page 26 where you state that if threshold performance is achieved, 50% of the target bonus opportunity is payable,
assuming that the threshold adjusted EB ITDA is achieved. Please refer to Item
402(d)(2)(iii) of Regulation S-K.
* * * *
Please respond to these comments within 10 business days, or tell us when you
will provide us with a response. Please provi de us with a response letter that keys your
responses to our comments and provides a ny requested information. Detailed letters
greatly facilitate our review. Please file your supplemental response on EDGAR as a correspondence file. Please understand that we may have additional comments after reviewing your responses to our comments.
You may contact Era Anagnosti, Staff A ttorney, at (202) 551-3369 or, in her
absence, Craig Slivka, Special Counsel, at (202) 551-3729 if you have any questions
regarding legal or disclosure matters. Pleas e contact Jeffrey Gordon, Staff Accountant, at
(202) 551-3866 or, in his absence, Nudrat Sa lik, Staff Accountant, at (202) 551-3692 if
you have questions regarding comments on the fi nancial statements and related matters.
Sincerely,
Rufus Decker
Accounting Branch Chief