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Universal Forest Products, Inc. Correspondence to SEC 10/5/09

UNIVERSAL FOREST
PRODUCTS, INC. LETTERHEAD

October 5, 2009

Mr. Terence O’Brien

Branch Chief

Division of Corporate Finance

U.S. Securities and Exchange Commission

Washington, DC 20549-0510

Re:
Universal
Forest Products, Inc.

Form 10-K for the fiscal year ended December 27, 2008

Filed February 25, 2009

File No. 0-22684

Dear Mr. O’Brien:

        This
letter responds to your comment letter, dated September 16, 2009, regarding the referenced
filings. The comments from your letter are set forth in bold font below and are followed
by our response.

Form 10-K for the year
ended December 27, 2008

Signatures, page 17

          1.

          We note that your principal executive officer and your principal financial
          officer have signed the  annual report on Form 10-K on behalf of the
          registrant, but they do not appear to have signed  individually in their
          respective capacities as your principal executive officer and principal
          financial  officer. In addition, your annual report on Form 10-K has not
          been signed by anyone in the capacity of  principal accounting officer.
          If you do not have an officer who holds the titles of controller or
          principal accounting officer, the person who has responsibility for these
          functions (e.g., your chief  financial officer) should sign the annual
          report and be designated on the signature page as your  principal
          accounting officer. In future filings, please ensure that your filings are
          properly  executed. Please refer to General Instruction D(2)(a) of Form
          10-K and the signature page section of  Form 10-K.

        Response:
Mr. Michael Cole, the Company’s principal financial officer, also serves as the
Company’s principal accounting officer. In future filings, the Company will identify
Mr. Cole’s role as principal accounting officer. In addition, the Company will
clarify, in future filings, that the principal executive officer and principal financial
officer are signing in their respective capacities, as individuals.

Mr. Terrence O’Brien

October 5, 2009
Page 2

Exhibit Index, page E-1

2.
We
note that you have omitted the schedules and exhibits to the following exhibits:

•
Exhibit
(i)(4) (Series 2004-A, Credit Agreement dated December 20, 2004);

•
Exhibit
(i)(5) (First Amendment dated February 12, 2007 relating to Series 2004-A, Credit
Agreement dated December 20, 2004);

•
Exhibit
(j)(2) (Series 2002-A, Senior Note Agreement dated December 18, 2002).

As there
does not appear to be a valid basis for omitting these schedules and exhibits, please
file them with your next periodic report or, if you prefer, you may use a current report
on Form 8-K instead.

        Response:
The schedules and exhibits to the above-referenced exhibits will be filed with the
Company's next quarterly report on Form 10-Q.

Annual Report

          3.

          We understand from the transcript of the second quarter 2009 conference call
          that management tracks the  performance of its plants, whereby if a plant
          is costing the Company cash, the Company puts them on  notice and if
          there are no improvements, the plant will be closed. Section 501.12.b.3 of the
          FRC and  Item 303(a)(3)(ii) of Regulation S-K requires the disclosure of
          known trends, uncertainties or other  factors that will result in, or are
          reasonably likely to result in, any material impairment charges in
          future periods. Such disclosure should identify the negative factors that may
          impact asset  recoverability. Since these plants are apparently
          experiencing a negative cash position, in future  filings please disclose
          in MD&A the carrying value of the assets associated with these plants that
          are  “on notice” so readers can understand the assets at risk.

        Response:
The Company acknowledges its obligations to disclose known trends, uncertainties and other
factors that will result in, or are reasonably likely to result in, any material
impairment charges in future periods. As such, in future filings, the Company will
disclose any material, negative factors that may impact asset recoverability, and to the
extent any of its facilities are placed on notice for likely future closure, the carrying
value of the assets associated with those facilities.

A. Summary of
Significant Accounting Policies, page 28

          4.

          We note the Exhibit 21 and your disclosure herein that you consolidate 50%
          owned entities over which you  exercise control. Please quantify for us
          the impact that such consolidation has on total assets, total
          liabilities and revenues for the periods presented.

Mr. Terrence O’Brien

October 5, 2009

Page 3

        Response:
Set forth below is the impact on the Company from the consolidation of 50% owned entities,
over which the Company has control, on the Company’s total assets, total liabilities
and revenues for the periods presented:

(in thousands)

     2006
     2007
     2008

     Total assets

     $  27,212

     $  20,570

     Total liabilities

     $  10,312

     $  11,172

     Revenues
     $  75,269

     $  76,224

     $  71,494

Definitive Proxy
Statement Filed March 6, 2009

Executive Compensation,
page 15

Compensation Discussion and
Analysis, page 15

Compensation Program
Components, page 16

Base Salaries, page 16

          5.

          We note that you use survey data about compensation practices at other
          companies in connection with the  process of setting compensation for
          your named executive officers. This process appears to constitute
          benchmarking for purposes of Item 402(b)(2)(xiv) of Regulation S-K. With a
          view toward future  disclosure, please tell us what impact the survey
          data had on your compensation decisions for the most  recently completed
          fiscal year. In doing so, please clarify the extent to which your compensation
           decisions are derived from or based on a comparison to peer companies,
          being sure to identify the peer  companies by name, or otherwise describe
          your methodologies for utilizing comparative information when
          implementing your compensation policies or making specific compensation
          awards. To the extent any  specific elements of compensation are ties to
          a benchmark, please identify the benchmark and discuss  where your actual
          payments and awards fell with respect to the benchmark, and to the extent that
          actual  compensation deviated from the benchmark, please provide an
          explanation of the reasons for this  deviation. Please refer to Item
          402(b)(2)(xiv) of Regulation S-K and Question 118.05 of the Compliance
          and Disclosure Interpretations of the staff of the Division of Corporation
          Finance concerning Item 402  of Regulation S-K, which can be found on our
          website.

        Response:
Historically, the Company has utilized third-party data on compensation practices and base
pay scales solely for purposes of clarifying that the Company’s base compensation is
generally competitive. To date, the committee has not used that information for purposes
of either establishing base salaries or ultimately justifying the eventual establishment
of base salaries. In future filings, the Company will clarify its reliance upon such third
party information and data, including the elimination of that data as a “factor”
in determining base salaries. To the extent the committee’s compensation practices
change in the future, and the use of the peer group survey data impacts its compensation
decisions, such benchmarking information will be provided.

Mr. Terrence O’Brien

October 5, 2009
Page 4

          6.

          We note that the compensation committee increased Mr. Webster’s salary
          by 24.5%. This percentage  increase fell well outside the 3% to 5% range
          of percentage salary increases the compensation committee  gave to your
          other named executive officers. With a view toward future disclosure, please
          tell us why  the compensation committee increased Mr. Webster’s
          salary by a significantly greater percentage than the  other named
          executive officers. In this regard, we note that Mr. Webster became president of
          your  company on January 1, 2009. If his salary increase was linked to
          that appointment, you should address  this connection. Your compensation
          discussion and analysis should be sufficiently precise to identify
          material differences in compensation policies with respect to individual
          named executive officers.  Please see Section II.B.1. of Commission
          Release No. 33-8732A. When policies or decisions for a named  executive
          officer are materially different from those applied to your other officers,
          please discuss and  analyze these policies or decisions on an
          individualized basis.

        Response:
You are correct that the increase in Mr. Webster’s compensation was attributable to
his promotion to President of the Company on January 1, 2009, as referenced in the proxy
statement. In future filings, the Company will disclose this inter-relationship and if
applicable, will disclose circumstances in which policies or decisions for the Named
Executive Officer are materially different from those applied to other of the
Company’s officers.

Incentive Compensation,
page 17

          7.

          We note that you have not disclosed the return on investment performance
          targets applicable to your  performance bonus plan awards. As each of
          your named executive officers appears to have earned a cash  award under
          this plan, these targets are material to an understanding of your compensation
          policies and  decisions for your named executive officers and should be
          disclosed. Please tell us what the targets  were and provide us with a
          materially complete analysis as to why you have not publically disclosed the
           targets. In this regard, we direct your attention to Instruction 4 to
          Item 402(b) of Regulation S-K and  note that you should address in detail
          both the materiality to investors of the undisclosed information  and the
          likelihood that the disclosure of this information would cause substantial harm
          to your  competitive position. Finally, please note that we may have
          additional comments on whether you have met  the standards for treating
          the information confidentially. Please refer to Instruction 4 to Item 402(b)
           of Regulation S-K and Question 118.04 of the Compliance and Disclosure
          Interpretations of the staff of  the Division of Corporation Finance
          concerning Item 402 of Regulation S-K, which can be found on our
          website.

Mr. Terrence O’Brien

October 5, 2009
Page 5

        Response:
The Company does not use specific return on investment (“ROI”) performance
targets for the purpose of determining actual bonus payments. Rather, the Company utilizes
an ROI threshold and maximum, .01% and 25.5% respectively, for the purpose of determining
the size of the Company’s bonus pools for plant, region, division and corporate
performance. Within the range of ROI results, in increments of 1/2% to 1% of ROI (as
defined and described in the Company’s proxy statement), between the threshold and
maximum, the Company contributes a percentage of pre-bonus operating profit (as defined
and described in the proxy statement) to the bonus pools. The amount of the contribution,
expressed as a percentage of pre-bonus operating profit, varies among the Company’s
plants, regions and divisions, and ranges from a low of 2.3% of pre-bonus operating profit
to a high of 25.0% of pre-bonus operating profit.

        As
explained in the Company’s proxy statement, at the beginning of each year, each plan
participant is allocated a percentage of the bonus pool for his or her respective plant,
region or division. This percentage, multiplied by the applicable bonus pool, determines
the eventual bonus payment.

        The
Company believes that it has appropriately described and disclosed the factors that drive
incentive compensation, such as the manner of determining ROI and pre-bonus operating
profit. The Company will, however, in future filings, provide further details on this
methodology, as described above, including threshold and maximum ROI and minimum and
maximum percentage contributions of pre-bonus operating profit.

          8.

          With a view toward future disclosure, please provide us with a materially
          complete discussion and  analysis of how you determined the amounts of
          the 2008 cash awards for each named executive officer  under your
          performance bonus plan. You should provide sufficient detail and explanation to
          enable us to  understand how you determined the amount shown in the
          “Non-Equity Incentive Plan Compensation” column of  the summary
          compensation table. In this regard, it may be helpful to include an illustration
          to  demonstrate the operation of the formula used to determine the size
          of a payout under your incentive  plan.

        Response:
Consistent with the response to Question No. 7 above, the Company will, in future filings,
provide additional information with respect to the means by which amounts earned under the
Company’s Performance Bonus Plan was determined for each Named Executive Officer. The
disclosure will include the percent of pre-bonus operating profit contributed to the
relevant bonus pool as well as each officer’s respective participation in the aggregate bonus
pool. Further, the Company will include a chart, in the following format, to disclose and
explain the determination of bonuses earned by the Named Executives under the
Company’s Performance Bonus Plan:

Mr. Terrence O’Brien

October 5, 2009
Page 6

     Named Executive
     Percent of Pre-Bonus Operating
Profit Contributed to Applicable Pool
     Allocation of

Participation in
Aggregate Company
Bonus Pools (%)
     Performance Bonus
($)

     A

     B

     C

     D

     E

Long-Term Stock
Incentive Plan, page 20

          9.

          With a view toward future disclosure, please provide us with a materially
          complete discussion and  analysis of why you made the January 15, 2008
          conditional stock grants to your named executive officers.

        Response:
The Compensation Committee of the Company’s Board of Directors elected to make the
relatively nominal conditional stock grants to eligible employees primarily to enhance the
Company’s employee retention efforts due to decreases in overall incentive
compensation. The Company will disclose, in future filings, its rationale for any future
grants.

Summary Compensation
Table, page 20

          10.

          Please tell us why you have not included in the “Stock Awards”
          column the February 8, 2008 grants of  conditional stock to your named
          executive officers, as discussed on page 18 and disclosed in the grants
          of plan-based awards table.

        Response:
The Company recognized $3,337 in compensation expense for each Named Executive in fiscal
2008, attributable to the conditional stock grants. The failure to include these amounts
was an oversight, in part due to the nominal amount of the expense, and will be included
in the Company’s summary compensation table in future filings.

ACKNOWLEDGEMENT

We acknowledge the following:

•
The
Company is responsible for the adequacy and accurac