SEC Company Response from Mativ Holdings, Inc. (MATV) (CIK 0001000623) (MATV) — Oct 5, 2010
Mativ Holdings, Inc. (MATV) (CIK 0001000623)
Date: Oct. 5, 2010 · CIK: 0001000623 · Accession: 0001144204-10-052475
AI Filing Summary & Sentiment
File numbers found in text: 001-13948
Referenced dates: May 27, 2010
Letter
United States Securities and Exchange Commission Comment Letter from the Securities and Exchange Commission dated September 21, 2010 Form 10-K for the Fiscal Year ended December 31, 2009 filed March 8, 2010 Definitive Proxy Statement on Schedule 14A filed March 8, 2010 File No. 001-13948
Re:
Dear Mr. Reynolds:
Attached is the response of Schweitzer-Mauduit International, Inc. (the “Company” or “registrant” or “SWM”) to the Securities and Exchange Commission's (the “Commission” or “Staff”) comments on the above identified disclosure documents filed by the Company. We have attempted to fully respond and to provide information that would assist in more fully understanding our disclosures. The terms “we,” “us” and “our” in the responses refer to the Company.
The Company's responses to the Commission's comments follow in the same order set forth in your September 21, 2010 letter.
Form 10-K for the Fiscal Year Ended December 31, 2009
Management’s Discussion and Analysis of Financial Condition and Results of Operations, page
Results of Operations, page
Year Ended December 31, 2009 Compared with the Year Ended December 31, 2008, page 30
Net Sales, page
1.
We note your response to comment two of our letter dated May 27, 2010. Please describe to us the extent of the services being provided by certain employees at the Malaucène facility at December 31, 2009 and continuing into fiscal 2010 that you considered run-off operations, and tell us if these services are still being provided.
As of December 31, 2009, employees at the Malaucène facilities consisted of 26 union representatives who were negotiating terms of severance benefits for themselves and others, including several active, non-union employees. The active employees consisted of the plant manager as well as other employees performing functions such as sales and shipment of remaining inventories and equipment, processing invoices and accounting transactions, securing the buildings and properties, administering payroll and organizing and attending union meetings. Such functions continued during the first and second quarters of fiscal 2010 and during a portion of the third quarter of fiscal 2010. These remaining non-union employees were severed or transferred to other Company subsidiaries during the third quarter of fiscal 2010, and actions were filed to dismiss union representatives that are protected by French social regulations from dismissal. The union representatives remain while we await approval of our actions to dismiss them, but they are no longer performing any services for the Company. As such, the Company has concluded that run-off operations have now ceased in the third quarter, and we are preparing to present Malaucène as a discontinued operation as of September 30, 2010 in our third quarter 2010 Form 10-Q.
2.
We note in your response to comment two of our letter dated May 27, 2010 that the Malaucène mill should not be reported as discontinued operations as of December 31, 2009 since the assets had not been disposed of by abandonment. We also note on page 25 that you closed the finished tipping mill in Malaucène, France in the fourth quarter of 2009, and in Ex 99.1 to your May 5, 2010 Form 8-K that your Malaucène facility is no longer operating. Please explain to us how you considered FASB ASC 360-10-35-47 as it appears to us that this facility ceases to be used based on your public disclosures.
Production at the Malaucène mill ceased during the fourth quarter of 2009. The disclosures in both the Form 10-K on page 25 and in Ex 99.1 to the May 5, 2010 Form 8-K referred to the shut-down of the mill’s production lines. FASB ASC 205-20 defines a component of an entity as “operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity.” While the mill’s production lines had been shut down, other assets within the component continued to be used into the third quarter of 2010. Ancillary or run-off operations at Malaucène’s facilities discussed in response to comment number one above continued into the third quarter of fiscal 2010. In addition, the office facilities continued to be used as of December 31, 2009, and into the third quarter of 2010; therefore, we did not meet the requirements of FASB ASC 360-10-35-47, which states that an asset can be considered disposed of when it ceases to be used. We have met those requirements during the third quarter of 2010 and will present Malaucène as a discontinued operation in our third quarter 2010 Form 10-Q.
We also considered the transition guidance in EITF Topic No. D-104, “Clarification of Transition Guidance in Paragraph 51 of FASB Statement No. 144” which states when “a component of an entity will be abandoned through the liquidation or run-off of operations, that component should not be reported as a discontinued operation in accordance with ASC 205-20 until all operations, including run-off operations, cease.” Accordingly, since ancillary operations continued and the office facilities continued to be used, we concluded that Malaucène did not meet the criteria to be considered disposed of through abandonment at December 31, 2009, March 31, 2010 or June 30, 2010 and therefore did not meet the criteria to be reported as discontinued operations.
Schedule 14A, filed March 8,
3.
We note the draft disclosure provided to us on September 10, 2010 related to prior comment seven from our letter dated May 27, 2010. Please revise the relevant footnotes to your Summary Compensation and Grants of Plan Based Awards tables to indicate that you are presenting the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. Also, please advise us how you considered Instruction 3 to Item 402(c)(2)(v).
We will add references in future filings to FASB ASC Topic 718 in each of the relevant footnotes to the Summary Compensation and Grants of Plan Based Awards tables as set forth in the proforma tables attached to this response.
A two-year incentive compensation award opportunity under the Restricted Stock Plan for years 2009 - 2010 was granted in February 2009 resulting in a situation where the award opportunity was granted and at least one year’s performance against that opportunity was earned in the same year. Actual performance against 2009 objectives and the associated award earned in 2009 (but confirmed in 2010) were known as of the date we filed our 2010 proxy statement and that award was “banked” through the issuance of restricted shares with a one-year delay in vesting. However, that banked award was not calculated and finally determined until after December 31, 2009 when full-year results were audited and the banked award remains subject to a condition of continued employment that will not be fully satisfied until March 2011. Under these circumstances, a technical reading of Instruction 3 to Item 402(c) (2)(v) and (vi) would require disclosure of only a projection of the earn-out considered to be most probable as of the Grant Date and the disclosure would not reflect the actual award earned in 2009, even though the actual award earned was known as of the date of filing the proxy statement. Nor would the actual award earned and calculated be disclosed to shareholders in any of the other compensation tables until we file our next proxy statement in March 2011. We interpreted the principle underlying the required disclosure to be the disclosure of the actual award earned in 2009, and we reported that information in Column (e) of the Summary Compensation Table. We also reported an estimate of the probable award earn-out for year 2010 in the Grants of Plan Based Awards Table as providing the most timely and meaningful information to shareholders.
In light of the Staff’s comment number 3 and comment number 4 to our revised proforma tables, we will in any similar circumstance in the future report in Column (e) of the Summary Compensation Table and Column (l) of the Grants of Plan Based Awards table the projected award earn-out value deemed most probable as of the Grant Date calculated in accordance with FASB ASC Topic 718, as reflected in the proforma Summary Compensation table and Grants of Plan Based Awards table attached hereto as Exhibit 1 and Exhibit 2, respectively.
4.
In reviewing your proposed disclosure it was unclear to us why the total amounts reported under Grant Date Fair Market Value of Stock Awards in your Grants of Plan Based Awards tables were inconsistent with the amounts disclosed under Stock Awards in the 2009 Summary Compensation table. Please revise or advise.
Column (e) in the Summary Compensation table reflected the amount of the award earned in 2009 based on actual performance against 2009 objectives, which award was subject only to the condition of further employment through March 2011. Column (l) of the Grants of Plan Based Awards table reflected the award earn-out deemed to be most probable for year 2010 as of the Grant Date calculated in accordance with FASB ASC Topic 718. The reasons why we took this approach in the proforma tables provided on September 10, 2010 are explained in our response to comment 3. In light of the Staff’s comments, we will revise our future disclosures to disclose the award earn-out deemed most probable as of the Grant Date for all years of an award cycle calculated in accordance with FASB ASC Topic 718 in both Column (e) of the Summary Compensation Table and Column (l) of the Grants of Plan Based Awards table, as set forth in the proforma tables attached hereto.
* * * * *
We are hopeful that this letter resolves the Staff’s concerns with regard to these comments. If it does not, we would appreciate the opportunity to discuss the comments with you. Please call me at (770) 569-4278 to arrange for a mutually convenient time to discuss the Company’s response and any additional questions that the Commission may have.
Sincerely,
/s/ John
W. Rumely, Jr.
Show Raw Text
CORRESP
1
filename1.htm
Unassociated Document
October
5,
2010 Via
Edgar
Mr. John
Reynolds
Assistant
Director
United
States Securities and Exchange Commission
450th Fifth
Street
Washington,
D.C. 20549-0405
Re:
Schweitzer-Mauduit
International, Inc.
Comment Letter from the Securities and
Exchange Commission dated September 21, 2010
Form 10-K for the Fiscal Year ended
December 31, 2009 filed March 8, 2010
Definitive Proxy Statement on Schedule
14A filed March 8, 2010
File No. 001-13948
Dear Mr.
Reynolds:
Attached
is the response of Schweitzer-Mauduit International, Inc. (the “Company” or
“registrant” or “SWM”) to the Securities and Exchange Commission's (the
“Commission” or “Staff”) comments on the above identified disclosure documents
filed by the Company. We have attempted to fully respond and to provide
information that would assist in more fully understanding our
disclosures. The terms “we,” “us” and “our” in the responses refer to
the Company.
The
Company's responses to the Commission's comments follow in the same order set
forth in your September 21, 2010 letter.
Form 10-K for the Fiscal
Year Ended December 31, 2009
Management’s Discussion and
Analysis of Financial Condition and Results of Operations, page
25
Results of Operations, page
30
Year Ended December 31, 2009
Compared with the Year Ended December 31, 2008, page 30
Net Sales, page
30
1.
We
note your response to comment two of our letter dated May 27, 2010. Please
describe to us the extent of the services being provided by certain
employees at the Malaucène facility at December 31, 2009 and continuing
into fiscal 2010 that you considered run-off operations, and tell us if
these services are still being
provided.
As of
December 31, 2009, employees at the Malaucène facilities consisted of 26 union
representatives who were negotiating terms of severance benefits for themselves
and others, including several active, non-union employees. The active
employees consisted of the plant manager as well as other employees performing
functions such as sales and shipment of remaining inventories and equipment,
processing invoices and accounting transactions, securing the buildings and
properties, administering payroll and organizing and attending union
meetings. Such functions continued during the first and second
quarters of fiscal 2010 and during a portion of the third quarter of fiscal
2010. These remaining non-union employees were severed or transferred
to other Company subsidiaries during the third quarter of fiscal 2010, and
actions were filed to dismiss union representatives that are protected by French
social regulations from dismissal. The union representatives remain
while we await approval of our actions to dismiss them, but they are no longer
performing any services for the Company. As such, the Company has
concluded that run-off operations have now ceased in the third quarter, and we
are preparing to present Malaucène as a discontinued operation as of September
30, 2010 in our third quarter 2010 Form 10-Q.
2.
We
note in your response to comment two of our letter dated May 27, 2010 that
the Malaucène mill should not be reported as discontinued operations as of
December 31, 2009 since the assets had not been disposed of by
abandonment. We also note on page 25 that you closed the finished tipping
mill in Malaucène, France in the fourth quarter of 2009, and in Ex 99.1 to
your May 5, 2010 Form 8-K that your Malaucène facility is no longer
operating. Please explain to us how you considered FASB ASC 360-10-35-47
as it appears to us that this facility ceases to be used based on your
public disclosures.
Production
at the Malaucène mill ceased during the fourth quarter of 2009. The
disclosures in both the Form 10-K on page 25 and in Ex 99.1 to the May 5, 2010
Form 8-K referred to the shut-down of the mill’s production lines. FASB ASC
205-20 defines a component of an entity as “operations and cash flows that can
be clearly distinguished, operationally and for financial reporting purposes,
from the rest of the entity.” While the mill’s production lines had been shut
down, other assets within the component continued to be used into the third
quarter of 2010. Ancillary or run-off operations at Malaucène’s facilities
discussed in response to comment number one above continued into the third
quarter of fiscal 2010. In addition, the office facilities continued
to be used as of December 31, 2009, and into the third quarter of 2010;
therefore, we did not meet the requirements of FASB ASC 360-10-35-47, which
states that an asset can be considered disposed of when it ceases to be
used. We have met those requirements during the third quarter of 2010
and will present Malaucène as a discontinued operation in our third quarter 2010
Form 10-Q.
We also
considered the transition guidance in EITF Topic No. D-104, “Clarification of
Transition Guidance in Paragraph 51 of FASB Statement No. 144” which states when
“a component of an entity will be abandoned through the liquidation or run-off
of operations, that component should not be reported as a discontinued operation
in accordance with ASC 205-20 until all operations, including run-off
operations, cease.” Accordingly, since ancillary operations continued and the
office facilities continued to be used, we concluded that Malaucène did not meet
the criteria to be considered disposed of through abandonment at December 31,
2009, March 31, 2010 or June 30, 2010 and therefore did not meet the criteria to
be reported as discontinued operations.
Schedule 14A, filed March 8,
2010
3.
We
note the draft disclosure provided to us on September 10, 2010 related to
prior comment seven from our letter dated May 27, 2010. Please revise the
relevant footnotes to your Summary Compensation and Grants of Plan Based
Awards tables to indicate that you are presenting the aggregate grant date
fair value computed in accordance with FASB ASC Topic
718. Also, please advise us how you considered Instruction 3 to
Item 402(c)(2)(v).
We will
add references in future filings to FASB ASC Topic 718 in each of the relevant
footnotes to the Summary Compensation and Grants of Plan Based Awards tables as
set forth in the proforma tables attached to this response.
A
two-year incentive compensation award opportunity under the Restricted Stock
Plan for years 2009 - 2010 was granted in February 2009 resulting in a situation
where the award opportunity was granted and at least one year’s performance
against that opportunity was earned in the same year. Actual
performance against 2009 objectives and the associated award earned in 2009 (but
confirmed in 2010) were known as of the date we filed our 2010 proxy statement
and that award was “banked” through the issuance of restricted shares with a
one-year delay in vesting. However, that banked award was not calculated and
finally determined until after December 31, 2009 when full-year results were
audited and the banked award remains subject to a condition of continued
employment that will not be fully satisfied until March 2011. Under
these circumstances, a technical reading of Instruction 3 to Item 402(c) (2)(v)
and (vi) would require disclosure of only a projection of the earn-out
considered to be most probable as of the Grant Date and the disclosure would not
reflect the actual award earned in 2009, even though the actual award earned was
known as of the date of filing the proxy statement. Nor would the actual award
earned and calculated be disclosed to shareholders in any of the other
compensation tables until we file our next proxy statement in March
2011. We interpreted the principle underlying the required disclosure
to be the disclosure of the actual award earned in 2009, and we reported that
information in Column (e) of the Summary Compensation Table. We also
reported an estimate of the probable award earn-out for year 2010 in the Grants
of Plan Based Awards Table as providing the most timely and meaningful
information to shareholders.
In light
of the Staff’s comment number 3 and comment number 4 to our revised proforma
tables, we will in any similar circumstance in the future report in
Column (e) of the Summary Compensation Table and Column (l) of the Grants of
Plan Based Awards table the projected award earn-out value deemed most probable
as of the Grant Date calculated in accordance with FASB ASC Topic 718, as
reflected in the proforma Summary Compensation table and Grants of Plan Based
Awards table attached hereto as Exhibit 1 and Exhibit 2,
respectively.
4.
In
reviewing your proposed disclosure it was unclear to us why the total
amounts reported under Grant Date Fair Market Value of Stock Awards in
your Grants of Plan Based Awards tables were inconsistent with the amounts
disclosed under Stock Awards in the 2009 Summary Compensation table.
Please revise or advise.
Column
(e) in the Summary Compensation table reflected the amount of the award earned
in 2009 based on actual performance against 2009 objectives, which award was
subject only to the condition of further employment through March 2011. Column
(l) of the Grants of Plan Based Awards table reflected the award earn-out deemed
to be most probable for year 2010 as of the Grant Date calculated in accordance
with FASB ASC Topic 718. The reasons why we took this approach in the
proforma tables provided on September 10, 2010 are explained in our response to
comment 3. In light of the Staff’s comments, we will revise our
future disclosures to disclose the award earn-out deemed most probable as of the
Grant Date for all years of an award cycle calculated in accordance with FASB
ASC Topic 718 in both Column (e) of the Summary Compensation Table and Column
(l) of the Grants of Plan Based Awards table, as set forth in the proforma
tables attached hereto.
* * * * *
We are
hopeful that this letter resolves the Staff’s concerns with regard to these
comments. If it does not, we would appreciate the opportunity to
discuss the comments with you. Please call me at (770) 569-4278 to
arrange for a mutually convenient time to discuss the Company’s response and any
additional questions that the Commission may have.
Sincerely,
/s/ John
W. Rumely, Jr.
John W.
Rumely, Jr.
Secretary
and General Counsel
Exhibit
1
Summary
Compensation
The
executive compensation information reported in the Summary Compensation Table
set forth below is for services rendered to the Company and its subsidiaries
commencing on January 1, 2009 and ending on December 31, 2009, the
last day of the Company’s 2009 fiscal year. All compensation earned in the 2009
fiscal year is reported in that year without regard to when actually paid by the
Company or deferred by the recipient and therefore not technically received by
the recipient in the 2009 fiscal year.
2009
Summary Compensation Table
Name
and
Principal
Position(a)
Year(b)
Salary
($)(c)
Bonus
($)(d)
Stock
Awards
($)(e)(1)
Non-Equity
Incentive
Plan
Compensation
($)(g)
Change
in
Pension
Value
and
Nonqualified
Deferred
Compensation
Earnings
($)(h)
All
Other
Compensation
($)(i)
Total
($)(j)
Frédéric
P. Villoutreix
2009
685,000
35,863
2,329,000
988,969
0
38,187
5,343,450
Chief
Executive Officer(2)
2008
488,501
36,860
0
69,565
0
284,433
879,359
2007
439,410
36,618
682,235
225,967
0
286,062
1,670,292
Pet