SEC Company Response from HAIN CELESTIAL GROUP (HAIN) — Mar 6, 2009
HAIN CELESTIAL GROUP INC
Date: March 6, 2009 · CIK: 0000910406 · Accession: 0001193125-09-047744
AI Filing Summary & Sentiment
Referenced dates: February 20, 2009
Letter
United States Securities and Form 10-K for the Fiscal Year Ended June 30, 2008 Filed August 29, 2008, as Amended October 28, 2008 Schedule 14A filed February 18, 2009 U.S. SEC File No. 0-22818
Dear Ms. Parker:
This letter is submitted on behalf of The Hain Celestial Group, Inc. (the “Company”) in response to the comments that you provided on behalf of the staff of the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission (the “SEC”) in your letter (the “Comment Letter”) dated February 20, 2009, to Ira J. Lamel, Executive Vice President and Chief Financial Officer of the Company. The responses to the Staff’s comments are set forth below, with each paragraph numbered to correspond to the numbered comments set forth in the Comment Letter. For your convenience, your comments have been reproduced in italics below, together with the responses. Capitalized terms used and not defined herein have the meanings given to such terms in the Company’s filing.
Form 10-K for the Fiscal Year Ended June 30, 2008
Off-Balance Sheet Arrangements
1. Please revise to clarify whether you have any off-balance sheet arrangements as to which disclosure is required by Item 303(a)(4) of Regulation S-K. If none, please so state.
At the time of the filing of the Form 10-K for the fiscal year ended June 30, 2008, the Company did not have any off-balance sheet arrangements as to which disclosure was
Ms. Anne Nguyen Parker
United States Securities and
Exchange Commission
March 6, 2009
Page
required by Item 303(a)(4) of Regulation S-K. Assuming this is still the case at the end of the current fiscal year, the Company plans to include the following statement in its Form 10-K for the fiscal year ending June 30, 2009: “At June 30, 2009, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K that have had or are likely to have a material current or future effect on our financial statements.”
Form 10-K/A Filed October 28, 2008
Equity Compensation Plan Information, page 16
2. In view of our comments 3 and 7 below, please advise us as to whether revisions need to be made to your Equity Compensation Plan Information disclosure.
The Company respectfully submits that no revisions are required with respect to the Equity Compensation Plan Information table set forth on page 16 of the Form 10-K/A filed on October 28, 2008, as all equity grants referred to in comments 3 and 7 were made pursuant to equity compensation plans approved by the Company’s stockholders.
Schedule 14A filed February 18, 2009
Compensation of Directors, page 12
3. We note your statement that “On April 1, 2008, the Compensation Committee recommended, and the Board of Directors approved, a grant of 2,500 shares of restricted common stock to each of the non-employee directors.” We also note your statement on the next page in Proposal No. 2 that “We are asking our stockholders to approve the amendment and restatement of our 2000 Director Stock Options Plan (the ‘2000 Plan’) to permit the issuance of restricted shares, restricted share units and dividend equivalents from the 2000 Plan. Currently, the 2000 Plan only permits the issuance of stock options.” If the existing equity compensation plan for non-employee directors only permits grants of restricted stock options, please explain how, and under what plan, grants of restricted stock were made on April 1, 2008 to each of the non-employee directors.
On April 1, 2008, the Company granted each of the non-employee directors 2,500 shares of restricted stock pursuant to the Amended and Restated 2002 Long-Term Incentive and Stock Award Plan (the “2002 Plan”), which permits equity grants to non-employee directors of the Company in addition to the Company’s employees and the employees of its subsidiaries and affiliates and any consultants. The forms of Restricted Stock Agreement filed as Exhibits 10.3 and 10.5 to the Form 8-K filed by the Company on April 7, 2008, reflect the fact that these shares were issued under the 2002 Plan.
Ms. Anne Nguyen Parker
United States Securities and
Exchange Commission
March 6, 2009
Page
Annual Cash Incentives, page
4. You disclose in general terms the nature of the performance goals for the fiscal year and the points assigned for each goal. You provide more detail with regard to the category “Financial Measures,’ which appears to represent 50% of the aggregate bonus opportunity. However, you provide less detail for the categories “Strategic Direction” and “Leadership,” which appear to represent 30% and 20% respectively, of the aggregate bonus opportunity. Also, it is unclear from your disclosure what the performance goals are (especially with regard to “Strategic Direction” and “Leadership”) and how the calculations are made to determine the amounts actually paid. For example:
The Company proposes to file an amendment to the proxy statement containing revisions to the “Annual Cash Incentives” section based on each of the questions posed in Section 4 of the Comment Letter. A copy of the revised section marked against the version contained in the Schedule 14A filed on February 18, 2009 is attached hereto as Exhibit A. Additional responses to the questions in Section 4 are below.
Greater detail is provided for the “Financial Measures” category with respect to its threshold, target and maximum goals as this category is based on pre-determined quantitative goals, while the “Strategic Direction” and “Leadership” categories may be more qualitative or subjective in nature. In determining the actual amounts to be paid, particularly under these latter categories, the Compensation Committee has discretion to consider the quality of the effort and the results achieved.
•
You do not explain the relationship between performance at the “Threshold,” “Target” and “Maximum” levels for each “Stated Goal” and the number of “Points” that are awarded for such “Stated Goal.”
The “threshold” goal is generally the lowest performance rating that would result in the NEO receiving any incentive compensation for that element for that year, and generally results in a commensurately lower payment (typically 50% of the target points). However, the Compensation Committee, in its discretion, may award some points for performance below the threshold goal. The “target” goal is the performance rating that would result in the NEO receiving 100% of the target points and, consequently, 100% of the incentive compensation assigned to that element for that year. A total score of 1,000 points is intended to translate to a bonus of 100% of annual base salary. The “maximum” goal is the performance rating that would
Ms. Anne Nguyen Parker
United States Securities and
Exchange Commission
March 6, 2009
Page
result in the NEO receiving the maximum award of incentive compensation permitted under the applicable annual cash incentive plan. Since Mr. Simon is able to earn an award of up to 200% of his annual base salary, he is able to earn up to 2,000 points if he achieves the maximum goal for all performance measures stated in his annual cash incentive plan. For Mr. Simon, the maximum points for a particular goal typically equals twice the target points (the target points typically are the same as the maximum points for Messrs. Lamel and Carroll, since they are able to earn an award of up to 100% of their annual base salary); however, the Compensation Committee retains the discretion to award more than the maximum points for any particular goal (subject to the NEO’s overall incentive payment cap, as described in the following sentence). The maximum aggregate incentive payment our CEO may receive is capped at 200% of his annual base salary, as provided in his employment agreement, and Messrs. Lamel and Carroll are each capped at 100% of their annual base salary.
The revised “Annual Cash Incentives” section included as Exhibit A hereto includes additional disclosure in response to this comment.
•
It is unclear what the amounts in the columns captioned “Threshold,” “Target,” and “Maximum” on page 38 represent; are these financial results for fiscal year 2008 in comparison to fiscal year 2007?
These amounts represent the year over year improvement of such financial measures using fiscal year 2007 as the base year.
The table referred to in this comment has been modified in the revised “Annual Cash Incentives” section included as Exhibit A hereto in order to clarify this disclosure.
•
Under “Financial Measures” in the table on page 38, what is the meaning of “FY09 Plan”: Deliver a Plan for the next fiscal year with improvements as indicated?”
Each year the Company prepares an operating plan for the following fiscal year. Since such plan is prepared in the current fiscal year, the Compensation Committee believes this is a meaningful goal for the NEOs and expects that such plan include specific increases in revenue and earnings per share over the actual results for the then-current year. The plan delivered for the next fiscal year (in this case, FY09) is then considered by the Compensation Committee in setting certain financial goals for the annual incentive plan for that next fiscal year.
•
The table on page 38 appears to indicate that the maximum number of “Points” available may be 1,000, and yet on page 39, Mr. Simon appears to have been awarded 1,306 points.
Ms. Anne Nguyen Parker
United States Securities and
Exchange Commission
March 6, 2009
Page
As discussed on page 37 of the proxy statement and in the 2008 Grants of Plan-Based Awards table on page 45 of the proxy statement, Mr. Simon has the ability to earn up to 200% of his base salary, which enables him to achieve up to 2,000 points. The 1,000 points stated on the table on page 38 represents the target number of points and would equate to Mr. Simon receiving 100% of his base salary as his annual cash incentive.
The revised “Annual Cash Incentives” section included as Exhibit A hereto includes additional disclosure to further clarify.
•
With regard to actual performance, you do not disclose the named executive officers’ performance with regard to each “Stated Goal,” instead providing only an “Overall Annual Incentive Plan Score,” the calculation of which you do not explain.
The revised “Annual Cash Incentives” section included as Exhibit A hereto includes additional disclosure in response to this comment.
You do not explain the meaning of the column on page 39 captioned “Target Award as a Percentage of Base Salary.”
The 2008 Grants of Plan-Based Awards table on page 45 of the proxy statement indicates that each NEO has a target equal to 100% of his base salary. The table referred to in this comment has been modified in the revised “Annual Cash Incentives” section included as Exhibit A hereto in order to clarify this disclosure.
•
You do not explain the calculation of the column on page 39 captioned “Award under Annual Incentive Plan.” For example, does the 100% under the column “Target Award as a Percentage of Base Salary” indicate that the dollar amount under “Award under Annual Incentive Plan” should equal the base salary? In this regard, we note that, as disclosed in the Summary Compensation Table, Mr. Simon’s salary is not $1,730,000 and Mr. Lamel’s salary is not $435,000.
As discussed on page 37 of the proxy statement, each point awarded is assigned a dollar value. Mr. Simon’s base salary for the 2008 fiscal year was $1,325,000, thus the value of each of his points (calculated by dividing his base salary by his 1,000 target points) is $1,325. Mr. Simon’s annual incentive award (before taking the voluntary reduction into account) was equal to the number of points scored (1,306) multiplied by the value per point ($1,325) for a total of $1,730,000 (after rounding). Similarly, Mr. Lamel’s pre-reduction annual incentive award was calculated by multiplying his incentive plan score of 829 by his value per point of $525 (derived by dividing his $525,000 base salary by his 1,000 target points) for a total of $435,000
Ms. Anne Nguyen Parker
United States Securities and
Exchange Commission
March 6, 2009
Page
(after rounding). The table referred to in this comment has been revised in the revised “Annual Cash Incentives” section included as Exhibit A hereto in order to clarify this disclosure.
Please revise to disclose all qualitative and quantitative performance goals established and explain in detail how these are used to calculate the bonus that is actually paid. See Items 402(b)(2)(v)-(vi) and Instruction 2 to Item 402(b) or Regulation S-K. To the extent that you believe that disclosure of the goals would result in competitive harm such that you believe that they could be excluded properly under Instruction 4 to Item 402(b) of Regulation S-K, please provide on a supplemental basis a detailed explanation supporting your conclusion. Please also note that to the extent disclosure of the qualitative or quantitative performance-related goals would cause competitive harm, you are required to discuss how difficult it was or will be to achieve the goals. Please see Instruction to Item 402(b) of Regulation S-K.
Please also explain in greater detail each named executive officer’s performance against each of the “Stated Goals,” the calculation of the “Points” and the calculation of the payouts.
The revised “Annual Cash Incentives” section included as Exhibit A hereto includes additional disclosure in response to this comment.
5. We note your statement on page 39 that “Mr. Speiller’s bonus for fiscal year 2008 has not yet been determined,” and similar disclosure in footnote (5) to the Summary Compensation Table on page 44. Please provide disclosure regarding the determination of his bonus as soon as it becomes available, and please explain why the bonus amount has still not been determined, even though more than seven months have passed since June 30, 2008 (the end of your fiscal year 2008).
The Company intends to file a Form 8-K disclosing the details of Mr. Speiller’s bonus if and when such bonus is determined. Mr. Speiller was not appointed an executive officer until the fourth quarter of fiscal year 2008 and, therefore, his bonus for fiscal year 2008 is being determined with all other non-executive employee bonuses. The Company is in the process of determining such bonuses, if any.
Long-Term Incentive Program – Grant to Mr. Simon, page 40
6. We note your statement that “the Board……determined that Mr. Simon should receive $12 million total value in a mix of equity grants and cash. This amount represented the Black-Scholes value of the options Mr. Simon would have held on April 1, 2008, had he been granted options on the schedule contemplated in his employment agreement.” Please revise to add additional information as to the assumptions that were used for
Ms. Anne Nguyen Parker
United States Securities and
Exchange Commission
March 6, 2009
Page
purposes of this Black-Scholes valuation. Also, please disclose the exercise prices that would have applied to the stock options if they had been granted on the dates specified under the employment agreement.
In calculating the Black-Scholes value for each grant of 300,000 options that Mr. Simon should have received on July 1, 2005, July 1, 2006 and July 1, 2007, the following assumptions were used for each calculation: expected life of the options of 7.3 years, 8.3 years and 6.3 years, respectively; the exercise p
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CORRESP 1 filename1.htm Correspondence DLA Piper LLP (US) 1251 Avenue of the Americas, 27th Floor New York, New York 10020-1104 www.dlapiper.com Sidney Burke sidney.burke@dlapiper.com T 212.335.4509 F 212.884.8729 VIA FAX (202.772.9368) AND EDGAR March 6, 2009 Ms. Anne Nguyen Parker United States Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 20549 Re: The Hain Celestial Group, Inc. Form 10-K for the Fiscal Year Ended June 30, 2008 Filed August 29, 2008, as Amended October 28, 2008 Schedule 14A filed February 18, 2009 U.S. SEC File No. 0-22818 Dear Ms. Parker: This letter is submitted on behalf of The Hain Celestial Group, Inc. (the “Company”) in response to the comments that you provided on behalf of the staff of the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission (the “SEC”) in your letter (the “Comment Letter”) dated February 20, 2009, to Ira J. Lamel, Executive Vice President and Chief Financial Officer of the Company. The responses to the Staff’s comments are set forth below, with each paragraph numbered to correspond to the numbered comments set forth in the Comment Letter. For your convenience, your comments have been reproduced in italics below, together with the responses. Capitalized terms used and not defined herein have the meanings given to such terms in the Company’s filing. Form 10-K for the Fiscal Year Ended June 30, 2008 Off-Balance Sheet Arrangements 1. Please revise to clarify whether you have any off-balance sheet arrangements as to which disclosure is required by Item 303(a)(4) of Regulation S-K. If none, please so state. At the time of the filing of the Form 10-K for the fiscal year ended June 30, 2008, the Company did not have any off-balance sheet arrangements as to which disclosure was Ms. Anne Nguyen Parker United States Securities and Exchange Commission March 6, 2009 Page 2 required by Item 303(a)(4) of Regulation S-K. Assuming this is still the case at the end of the current fiscal year, the Company plans to include the following statement in its Form 10-K for the fiscal year ending June 30, 2009: “At June 30, 2009, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K that have had or are likely to have a material current or future effect on our financial statements.” Form 10-K/A Filed October 28, 2008 Equity Compensation Plan Information, page 16 2. In view of our comments 3 and 7 below, please advise us as to whether revisions need to be made to your Equity Compensation Plan Information disclosure. The Company respectfully submits that no revisions are required with respect to the Equity Compensation Plan Information table set forth on page 16 of the Form 10-K/A filed on October 28, 2008, as all equity grants referred to in comments 3 and 7 were made pursuant to equity compensation plans approved by the Company’s stockholders. Schedule 14A filed February 18, 2009 Compensation of Directors, page 12 3. We note your statement that “On April 1, 2008, the Compensation Committee recommended, and the Board of Directors approved, a grant of 2,500 shares of restricted common stock to each of the non-employee directors.” We also note your statement on the next page in Proposal No. 2 that “We are asking our stockholders to approve the amendment and restatement of our 2000 Director Stock Options Plan (the ‘2000 Plan’) to permit the issuance of restricted shares, restricted share units and dividend equivalents from the 2000 Plan. Currently, the 2000 Plan only permits the issuance of stock options.” If the existing equity compensation plan for non-employee directors only permits grants of restricted stock options, please explain how, and under what plan, grants of restricted stock were made on April 1, 2008 to each of the non-employee directors. On April 1, 2008, the Company granted each of the non-employee directors 2,500 shares of restricted stock pursuant to the Amended and Restated 2002 Long-Term Incentive and Stock Award Plan (the “2002 Plan”), which permits equity grants to non-employee directors of the Company in addition to the Company’s employees and the employees of its subsidiaries and affiliates and any consultants. The forms of Restricted Stock Agreement filed as Exhibits 10.3 and 10.5 to the Form 8-K filed by the Company on April 7, 2008, reflect the fact that these shares were issued under the 2002 Plan. Ms. Anne Nguyen Parker United States Securities and Exchange Commission March 6, 2009 Page 3 Annual Cash Incentives, page 36 4. You disclose in general terms the nature of the performance goals for the fiscal year and the points assigned for each goal. You provide more detail with regard to the category “Financial Measures,’ which appears to represent 50% of the aggregate bonus opportunity. However, you provide less detail for the categories “Strategic Direction” and “Leadership,” which appear to represent 30% and 20% respectively, of the aggregate bonus opportunity. Also, it is unclear from your disclosure what the performance goals are (especially with regard to “Strategic Direction” and “Leadership”) and how the calculations are made to determine the amounts actually paid. For example: The Company proposes to file an amendment to the proxy statement containing revisions to the “Annual Cash Incentives” section based on each of the questions posed in Section 4 of the Comment Letter. A copy of the revised section marked against the version contained in the Schedule 14A filed on February 18, 2009 is attached hereto as Exhibit A. Additional responses to the questions in Section 4 are below. Greater detail is provided for the “Financial Measures” category with respect to its threshold, target and maximum goals as this category is based on pre-determined quantitative goals, while the “Strategic Direction” and “Leadership” categories may be more qualitative or subjective in nature. In determining the actual amounts to be paid, particularly under these latter categories, the Compensation Committee has discretion to consider the quality of the effort and the results achieved. • You do not explain the relationship between performance at the “Threshold,” “Target” and “Maximum” levels for each “Stated Goal” and the number of “Points” that are awarded for such “Stated Goal.” The “threshold” goal is generally the lowest performance rating that would result in the NEO receiving any incentive compensation for that element for that year, and generally results in a commensurately lower payment (typically 50% of the target points). However, the Compensation Committee, in its discretion, may award some points for performance below the threshold goal. The “target” goal is the performance rating that would result in the NEO receiving 100% of the target points and, consequently, 100% of the incentive compensation assigned to that element for that year. A total score of 1,000 points is intended to translate to a bonus of 100% of annual base salary. The “maximum” goal is the performance rating that would Ms. Anne Nguyen Parker United States Securities and Exchange Commission March 6, 2009 Page 4 result in the NEO receiving the maximum award of incentive compensation permitted under the applicable annual cash incentive plan. Since Mr. Simon is able to earn an award of up to 200% of his annual base salary, he is able to earn up to 2,000 points if he achieves the maximum goal for all performance measures stated in his annual cash incentive plan. For Mr. Simon, the maximum points for a particular goal typically equals twice the target points (the target points typically are the same as the maximum points for Messrs. Lamel and Carroll, since they are able to earn an award of up to 100% of their annual base salary); however, the Compensation Committee retains the discretion to award more than the maximum points for any particular goal (subject to the NEO’s overall incentive payment cap, as described in the following sentence). The maximum aggregate incentive payment our CEO may receive is capped at 200% of his annual base salary, as provided in his employment agreement, and Messrs. Lamel and Carroll are each capped at 100% of their annual base salary. The revised “Annual Cash Incentives” section included as Exhibit A hereto includes additional disclosure in response to this comment. • It is unclear what the amounts in the columns captioned “Threshold,” “Target,” and “Maximum” on page 38 represent; are these financial results for fiscal year 2008 in comparison to fiscal year 2007? These amounts represent the year over year improvement of such financial measures using fiscal year 2007 as the base year. The table referred to in this comment has been modified in the revised “Annual Cash Incentives” section included as Exhibit A hereto in order to clarify this disclosure. • Under “Financial Measures” in the table on page 38, what is the meaning of “FY09 Plan”: Deliver a Plan for the next fiscal year with improvements as indicated?” Each year the Company prepares an operating plan for the following fiscal year. Since such plan is prepared in the current fiscal year, the Compensation Committee believes this is a meaningful goal for the NEOs and expects that such plan include specific increases in revenue and earnings per share over the actual results for the then-current year. The plan delivered for the next fiscal year (in this case, FY09) is then considered by the Compensation Committee in setting certain financial goals for the annual incentive plan for that next fiscal year. • The table on page 38 appears to indicate that the maximum number of “Points” available may be 1,000, and yet on page 39, Mr. Simon appears to have been awarded 1,306 points. Ms. Anne Nguyen Parker United States Securities and Exchange Commission March 6, 2009 Page 5 As discussed on page 37 of the proxy statement and in the 2008 Grants of Plan-Based Awards table on page 45 of the proxy statement, Mr. Simon has the ability to earn up to 200% of his base salary, which enables him to achieve up to 2,000 points. The 1,000 points stated on the table on page 38 represents the target number of points and would equate to Mr. Simon receiving 100% of his base salary as his annual cash incentive. The revised “Annual Cash Incentives” section included as Exhibit A hereto includes additional disclosure to further clarify. • With regard to actual performance, you do not disclose the named executive officers’ performance with regard to each “Stated Goal,” instead providing only an “Overall Annual Incentive Plan Score,” the calculation of which you do not explain. The revised “Annual Cash Incentives” section included as Exhibit A hereto includes additional disclosure in response to this comment. You do not explain the meaning of the column on page 39 captioned “Target Award as a Percentage of Base Salary.” The 2008 Grants of Plan-Based Awards table on page 45 of the proxy statement indicates that each NEO has a target equal to 100% of his base salary. The table referred to in this comment has been modified in the revised “Annual Cash Incentives” section included as Exhibit A hereto in order to clarify this disclosure. • You do not explain the calculation of the column on page 39 captioned “Award under Annual Incentive Plan.” For example, does the 100% under the column “Target Award as a Percentage of Base Salary” indicate that the dollar amount under “Award under Annual Incentive Plan” should equal the base salary? In this regard, we note that, as disclosed in the Summary Compensation Table, Mr. Simon’s salary is not $1,730,000 and Mr. Lamel’s salary is not $435,000. As discussed on page 37 of the proxy statement, each point awarded is assigned a dollar value. Mr. Simon’s base salary for the 2008 fiscal year was $1,325,000, thus the value of each of his points (calculated by dividing his base salary by his 1,000 target points) is $1,325. Mr. Simon’s annual incentive award (before taking the voluntary reduction into account) was equal to the number of points scored (1,306) multiplied by the value per point ($1,325) for a total of $1,730,000 (after rounding). Similarly, Mr. Lamel’s pre-reduction annual incentive award was calculated by multiplying his incentive plan score of 829 by his value per point of $525 (derived by dividing his $525,000 base salary by his 1,000 target points) for a total of $435,000 Ms. Anne Nguyen Parker United States Securities and Exchange Commission March 6, 2009 Page 6 (after rounding). The table referred to in this comment has been revised in the revised “Annual Cash Incentives” section included as Exhibit A hereto in order to clarify this disclosure. Please revise to disclose all qualitative and quantitative performance goals established and explain in detail how these are used to calculate the bonus that is actually paid. See Items 402(b)(2)(v)-(vi) and Instruction 2 to Item 402(b) or Regulation S-K. To the extent that you believe that disclosure of the goals would result in competitive harm such that you believe that they could be excluded properly under Instruction 4 to Item 402(b) of Regulation S-K, please provide on a supplemental basis a detailed explanation supporting your conclusion. Please also note that to the extent disclosure of the qualitative or quantitative performance-related goals would cause competitive harm, you are required to discuss how difficult it was or will be to achieve the goals. Please see Instruction to Item 402(b) of Regulation S-K. Please also explain in greater detail each named executive officer’s performance against each of the “Stated Goals,” the calculation of the “Points” and the calculation of the payouts. The revised “Annual Cash Incentives” section included as Exhibit A hereto includes additional disclosure in response to this comment. 5. We note your statement on page 39 that “Mr. Speiller’s bonus for fiscal year 2008 has not yet been determined,” and similar disclosure in footnote (5) to the Summary Compensation Table on page 44. Please provide disclosure regarding the determination of his bonus as soon as it becomes available, and please explain why the bonus amount has still not been determined, even though more than seven months have passed since June 30, 2008 (the end of your fiscal year 2008). The Company intends to file a Form 8-K disclosing the details of Mr. Speiller’s bonus if and when such bonus is determined. Mr. Speiller was not appointed an executive officer until the fourth quarter of fiscal year 2008 and, therefore, his bonus for fiscal year 2008 is being determined with all other non-executive employee bonuses. The Company is in the process of determining such bonuses, if any. Long-Term Incentive Program – Grant to Mr. Simon, page 40 6. We note your statement that “the Board……determined that Mr. Simon should receive $12 million total value in a mix of equity grants and cash. This amount represented the Black-Scholes value of the options Mr. Simon would have held on April 1, 2008, had he been granted options on the schedule contemplated in his employment agreement.” Please revise to add additional information as to the assumptions that were used for Ms. Anne Nguyen Parker United States Securities and Exchange Commission March 6, 2009 Page 7 purposes of this Black-Scholes valuation. Also, please disclose the exercise prices that would have applied to the stock options if they had been granted on the dates specified under the employment agreement. In calculating the Black-Scholes value for each grant of 300,000 options that Mr. Simon should have received on July 1, 2005, July 1, 2006 and July 1, 2007, the following assumptions were used for each calculation: expected life of the options of 7.3 years, 8.3 years and 6.3 years, respectively; the exercise p