HNI CORP — Proxy Solicitation & Information Statement 2007

Nov 16, 2007

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HNI Corporation 408 East Second Street, Muscatine, Iowa 52761, Tel 563 272 7400, Fax 563 272 7347, www.hnicorp.com

November 16, 2007

| Mr.
Timothy A.
Geishecker VIA
EDGAR AND FEDERAL EXPRESS Senior Counsel U.S. Securities and Exchange Commission Division
of Corporation Finance Mail
Stop 4651 100
F Street, N.E. Washington,
D.C. 20549 |
| --- |
| Re:
HNI Corporation Definitive Schedule 14A Filed on March 23, 2007 File No. 001-14225 |
| Dear
Mr. Geishecker: |
| Reference
is made to your letter dated September 26, 2007 regarding comments
by the
staff of the Division of Corporation Finance (the "Staff") of the
Securities and Exchange Commission (the "Commission") with respect
to the
above-captioned filing of HNI Corporation (the "Corporation," "we,"
"us,"
or "our"). This letter responds to each comment of that
letter. For ease of reference, the numbered paragraphs below
correspond to the numbered paragraphs in that letter. The Staff
comments appear in bold and italics and the responses of HNI Corporation
follow immediately thereafter. |
| Director
Nominations, page 9 |
| 1. Please explain the function(s) your third-party
executive search firms perform. Refer to Item 407(c)(2)(viii)
of Regulation
S-K. |
| The
Corporation respectfully acknowledges the Staff's comment and will
explain
in all future filings, as applicable, the function(s) of any third-party
executive search firms utilized by the Corporation. Such search
firms, when utilized by the Corporation, identify potential nominees
for
new or vacated seats on the Corporation's Board of Directors (the
"Board")
based on the Corporation's established criteria for director
candidates discussed on page 9 of the Corporation's 2007 Proxy Statement
(the "Proxy
Statement"). |

| Mr.
Timothy A. Geishecker Securities
and Exchange Commission Page
2 November
16, 2007 |
| --- |
| Review,
Approval or Ratification of Transactions with Related Persons, page
23 |
| 2. Please
include a statement of whether your policies and procedures with
respect
to transactions with related persons are in writing, and, if not,
describe
how such policies are evidenced. Refer to Item 404(b) of
Regulation S-K. In addition, please explain the dates of the
transactions mentioned in "Certain Relationships and Related Transactions"
on page 23 and whether or not you had policies and procedures with
respect
to transactions with related persons in
effect. |
| The
Board adopted a written policy for the review, approval and ratification
of transactions with related persons (the "Policy") on February 14,
2007
and will disclose in all future filings that the Policy, which is
described on page 23 of the Proxy Statement, is a written
policy. With
respect to the first relationship described under the caption "Certain
Relationships and Related Transactions" on page 24 of the Proxy Statement,
the Corporation entered into (1) the credit facility under which
Bank of
America, N.A. ("BofA") is a primary lender and syndication agent
on
January 28, 2005 and (2) an engagement letter with Banc of America
Securities LLC ("Banc LLC") on February 10, 2006, under which Banc
LLC
acted as the sole book runner and placement agent in connection with
the
Corporation's private offering, issue and sale of senior debt
securities. As noted on page 25 of the Proxy Statement, the
Corporation did not become aware that Columbia Wanger Asset Management,
L.P. ("Columbia"), an affiliate of both BofA and Banc LLC, had become
a
five percent owner of the Corporation's common stock until Columbia
filed
its Schedule 13G on February 15, 2006, after the consummation of
each of
the foregoing transactions. While the Policy itself was not in
place at the time of the foregoing transactions, the Corporation
did have
various other written policies and procedures in place for addressing
transactions with related persons. Because the Corporation was
unaware at the time of the transactions with BofA and Banc LLC that
Columbia was a 5 percent owner of the Corporation's common stock,
no
review of the transactions occurred. In any event, all of the
Corporation's transactions with BofA and Banc LLC were arms' length
transactions, and Columbia's stock ownership was not a contributing
factor
in determining the terms and conditions thereof. With
respect to the second relationship described under the caption "Certain
Relationships and Related Transactions" on page 24 of the Proxy Statement,
the Corporation's operating subsidiary has (1) leased space in the
property in question since at least 2000 pursuant to a month-to-month
lease (the "First |

| Mr.
Timothy A. Geishecker Securities
and Exchange Commission Page
3 November
16, 2007 |
| --- |
| Lease")
and (2) leased additional space in the property commencing June 1,
2006
pursuant to a one (1) year lease (the "Second Lease," together with
the
First Lease, the "Leases"). Terrence L. and Loretta B. Mealy
(collectively, "Mealy") acquired indirect ownership of the property
subject to the Leases after the Corporation entered into the First
Lease. Accordingly, the Policy did not apply to the First Lease
transaction at the time it was entered into. The Corporation
did not become aware that Mealy had acquired indirect ownership of
the
property subject to the Leases until after the Corporation had entered
into the Second Lease. While the Policy itself was not in place
at the time of the Second Lease transaction, the Corporation did
have
various other written policies and procedures in place for addressing
transactions with related persons. Because the Corporation was
unaware at the time of the Second Lease transaction that Mealy was
a 5
percent owner of the Corporation's common stock, no review of the
transaction occurred. In any event, all of the Corporation's
transactions with Mealy were arms' length transactions, and Mealy's
stock
ownership was not a contributing factor in determining the terms
and
conditions thereof. |
| Compensation
Discussion and Analysis, page 25 |
| 3. The
precise nature of your benchmarking activities is not
clear. Please identify the companies the Committee evaluated
during its review of the market position of your executive compensation
practices, including those whose information is included in the
information supplied by the compensation consultants. If you
have benchmarked different elements of your compensation against
different
benchmarking groups, please identify the companies that comprise
each
group. Refer to Item 402(b)(2)(xiv) of Regulation S
K. Disclose the actual percentiles for total compensation, and
each benchmarked element of compensation, in 2006. To the
extent actual compensation was outside a targeted percentile range,
please
explain why. |
| The
Corporation respectfully acknowledges the Staff's comment and will
include
additional disclosure in all future filings, as applicable, regarding
(1)
the market surveys that the Board evaluated during its review of
the
market position of the Corporation's executive compensation practices,
including those for which information is supplied by any compensation
consultants, (2) how total compensation compared to the market data,
(3)
each benchmarked element of compensation and (4) the reasons actual
compensation, if any, was outside a targeted
range. |

| Mr.
Timothy A. Geishecker Securities
and Exchange Commission Page
4 November
16, 2007 | |
| --- | --- |
| The
Compensation Committee annually reviews base salaries paid to the
Corporation's executives using the following commercially available
survey
reports: | |
| · | Towers
Perrin Human Resources Services ("Towers Perrin") Compensation Data
Bank –
Executive Compensation Database – 2006 Single Regression
Report |
| · | Mercer
Human Resource Consulting ("Mercer") – 2006 US Mercer Benchmark Database –
Executive Survey; and |
| · | Watson
Wyatt Data Services ("Watson Wyatt") – 2006/2007 Comp Calculator – Top
Management Compensation. |
| The
survey reports made available by Towers Perrin, Mercer and Watson
Wyatt
cover a significant number of companies over a broad range of
industries. Accordingly, it is not practical to disclose all of
the individual companies incorporated within these
surveys. However, in future filings, the Corporation will
include additional information about each of the market surveys and
the
types of information analyzed by the Committee in connection with
its
review of these surveys. For
purposes of the Compensation Committee's review, market data from
the
three surveys noted above is combined and averaged to balance data
outliers and increase reliability. No particular industry peer
group is selected for competitive review because the Corporation
competes
for executives within industries other than the office furniture
and
hearth products industries. The Compensation Committee believes
that the size of the business and scope of the named executive officer's
responsibility are the most important benchmarking factors for attracting
and retaining named executive officers. Accordingly, as
indicated on page 26 of the Proxy Statement, the Corporation utilizes
a
regression model across various industries correlating business revenue
and compensation. The
Corporation's executive compensation strategy is to target total
compensation, including base salary, short-term incentives and long-term
incentives, as a whole at approximately 100 percent of the market
median. In its future filings, as applicable, the Corporation
will disclose whether the total compensation, or any specific element
of
compensation, falls outside of our targeted range or percentage and,
if
so, why the compensation falls outside of such range. | |
| · | Base
salary levels for each of the named executive officers are set based
on
market survey data. The base salary midpoint is set at 90
percent of the market median and is derived from the three surveys
noted
above. In most cases, base salary is set between 80 and 120
percent of the midpoint. |

Mr. Timothy A. Geishecker Securities and Exchange Commission Page 5 November 16, 2007

| · | Annual
incentive targets under the HNI Corporation Executive Bonus Plan
(the
"Bonus Plan") for each of the named executive officers are established
slightly above the market median for annual incentive compensation
to
offset the fact that the midpoint of the base salary range is set
slightly
below the market median, to emphasize pay-for-performance and to
encourage
the achievement of personal and financial goals. |
| --- | --- |
| · | Total
long-term incentive targets for each of the named executive officers
are
generally set at the market median in an effort to bring total
compensation to 100 percent of the market median. The
components of long-term incentive compensation include stock options
granted under the HNI Corporation 2007 Stock-Based Compensation Plan
(the
"Stock Plan") and awards under the HNI Corporation Long-Term Performance
Plan (the "Performance Plan"). |

| The
Compensation Committee believes that the market level of incentive
compensation remains relatively constant over time and, accordingly,
retains an independent consultant every three to five years to conduct
a
thorough, competitive analysis of the Corporation's total executive
compensation program. Mercer most recently conducted this
analysis in late 2004 (the "Mercer Study"), and the Compensation
Committee
has utilized this analysis to establish annual and long-term incentive
target percentages for 2005 and 2006. Management closely
monitors the annual market movement of annual and long-term incentive
compensation using the same benchmarking approach as described above
for
base salary. |
| --- |
| 4. Throughout
this section and as to each compensation element, please provide
an
analysis of how you arrived at and why you paid each of the particular
levels and forms of compensation for 2006. Although you briefly
mention that you give some weight to the compensation paid by your
industry peers, your disclosure also indicates that you base compensation
on individual and company performance. Your disclosure,
however, lacks sufficient quantitative or qualitative discussion
of the
analyses underlying the Committee's decisions to make specific
compensation awards. As one example, there is minimal, if any,
disclosure relating to how you determined the actual payouts made
under
the Bonus or Performance Plans. Similarly, with respect to 2006
option awards, you state that the targeted dollar value of stock
option
awards ranges between 25 and 150 percent of an executive's base salary
but
you provide little analysis of the factors the Committee considered
in
determining the payouts described in the fifth full paragraph on
page
28. Please explain and place in context how you determined
particular payout levels. Refer to Item 402(b)(1)(v) of
Regulation S-K. |

| Mr.
Timothy A. Geishecker Securities
and Exchange Commission Page 6 November
16, 2007 | |
| --- | --- |
| The
Corporation respectfully acknowledges the Staff's comment and will
include, to the extent we have not otherwise sought confidential
treatment
in our request that is being submitted to the Staff on a supplemental
basis (as further described in our response to Comment 7 below),
additional disclosure in all future filings, as applicable, regarding
how
and why the Corporation paid each of the particular levels and forms
of
compensation, including the following: | |
| · | how
and why base salary percentages are determined for named executive
officers, including additional discussion of the Compensation Committee's
use of market surveys for benchmarking; |
| · | how
and why the Compensation Committee determined payouts of annual incentive
awards under the Bonus Plan, including additional detail regarding
the
nature of financial (i.e., economic profit) performance goals and
individual strategic objectives and the Compensation Committee's
analysis
with respect thereto; |
| · | how
and why the Compensation Committee determined payouts under the
Performance Plan — for example, explaining how the achievement of certain
target levels of "cumulative economic profit" triggers specific awards
under the Performance Plan; and |
| · | how
and why the Compensation Committee determined the targeted dollar
value of
stock option award ranges, including a description of how the Compensation
Committee utilizes a specific mathematical formula and market survey
data. |
| The
Corporation also intends to disclose how compensation opportunities
for
each of its named executive officers compare to executives with comparable
roles and responsibilities at organizations of comparable size, based
on
the information in the market surveys described in our response to
Comment
3 above. In addition, as discussed in more detail in our
response to Comment 3 above, if compensation falls outside our targeted
range for any specific element of compensation, we intend to explain
why. If material, we also intend to discuss any consideration
the Compensation Committee gives to internal pay equity in setting
compensation for our named executive officers. | |

| Mr.
Timothy A. Geishecker Securities
and Exchange Commission Page
7 November
16, 2007 |
| --- |
| 5. Please
provide clear disclosure that addresses how each compensation component
and your decisions regarding these elements fit into your overall
compensation objectives and their impact regarding other
elements. See Item 402(b)(1)(vi) of Regulation
S-K. It is not clear whether you review each element of
compensation independently or whether you consider each element
collectively with the other elements of your compensation program
when
establishing the various forms and levels of
compensation. Please provide sufficient quantitative or
qualitative disclosure as appropriate of the analyses underlying
how
decisions regarding one type of award motivate the Committee to award
or
consider other forms of compensation. Explain and place in
context how you considered each element of compensation and why
determinations with respect to one element may or may not have influenced
the Committee's decisions with respect to other allocated
awards. |
| The
Corporation explains why each element is considered and how the various
targets are established beginning on page 25 of the Proxy Statement
under
the caption "Elements of Compensation Program." Nevertheless,
the Corporation respectfully acknowledges the Staff's comment and
will
include additional disclosure in all future filings, as applicable,
regarding how each compensation component fits into the Corporation's
overall compensation objectives and will explain and place in context
how
each element of compensation was considered and why determinations
with
respect to one element may or may not have influenced the Compensation
Committee's decisions with respect to other allocated
awards. The
elements of total compensation for the Corporation include base salary,
annual incentive compensation under the Bonus Plan, long-term incentive
compensation under the Performance Plan and stock options under the
Stock
Plan. The Corporation believes that total compensation is
paramount and, together with the market surveys and the Mercer Study
described in the Corporation's response to Comment 3 above, considers
all
three elements of executive compensation in determining the targets
or
amounts for each. In future filings, the Corporation will
provide additional quantitative or qualitative disclosure, as appropriate,
of the analyses underlying how decisions regarding one type of award
motivate the Compensation Committee to award or consider other forms
of
compensation. |
| 6. Please
discuss how you determine when to award compensation, particularly
equity-based compensation. Please refer to Item 402(b)(2)(iv)
of Regulation S-K. |

| Mr.
Timothy A. Geishecker Securities
and Exchange Commission Page
8 November
16, 2007 |
| --- |
| The
Corporation respectfully acknowledges the Staff's comment and will
include
additional disclosure in all future filings, as applicable, regarding
how
the Corporation determines when to award compensation, particularly
equity-based compensation. |
| Under
the Bonus Plan and the Performance Plan, the Board must make all
incentive
awards, whether in the form of cash or stock, in February of the
year
following the end of the fiscal year for which the incentive awards
are
earned. The Board typically holds a meeting the second full week of
February when the prior fiscal year's results are available to facilitate
the determination of both the Bonus Plan and the Performance Plan
awards
for each of the name executive officers. For
administrative convenience and because year-end results are first
available at that time, the Board typically awards stock options
under the
Stock Plan only once per year at the Board's February
meeting. However, stock options or Performance Plan awards may
be awarded throughout the year for a new hire, a significant promotion
or
other special circumstances at either another regularly scheduled
Board
meeting or by written consent. In 2006, all stock options for
the named executive officers were awarded at the Board's February
meeting. |
| 7. Please
disclose the specific items of corporate and individual performance
you
use to determine incentive amounts and discuss how you structure
your
incentive awards around these performance goals and
objectives. See Item 402(b)(2)(v) of Regulation
S-K. Refer to the performance objectives relating to annual
incentive compensation under the Bonus Plan and awards made under
the
Performance Plan. To the extent you believe that disclosure of
these targets is not required because it would result in competitive
harm
such that you may omit the disclosure under Instruction 4 to Item
402(b)
of Regulation S K, please provide a detailed supplemental analysis
supporting your conclusion and provide appropriate disclosure pursuant
to
Instruction 4. In discussing how difficult it would be for the
named executive officers or how likely it will be for you to achieve
the
undisclosed target levels or other factors, please provide as much
detail
as necessary without disclosing information that poses a reasonable
risk
of competitive harm. |
| The
Corporation respectfully acknowledges the Staff's comment and, to
the
extent it has not otherwise sought confidential treatment in the
request
that is being submitted to the Staff on a supplemental basis, will
include
additional disclosure in all future filings, as applicable, regarding
the
specific items of corporate and individual performance it used to
determine incentive amounts and will discuss how it structures its
incentive awards around these performance goals and
objectives. |

| Mr.
Timothy A. Geishecker Securities
and Exchange Commission Page 9 November
16, 2007 |
| --- |
| The
Corporation believes that it would experience competitive harm as
a result
of disclosure of (1) its economic profit performance targets, for
both
prior years and future years, related to the Corporation as a whole
and
its operating segments under the Performance Plan and to the Corporation
as a whole and its operating subsidiaries under the Bonus Plan, (2)
its
named executive officers' individual strategic objectives, for both
prior
years and future years, under the Bonus Plan and (3) the achievement
percentages of its named executive officers related to the individual
strategic objectives under the Bonus Plan (the "Confidential
Targets"). Accordingly, the Corporation is submitting on a
supplemental basis pursuant to Rule 83, simultaneously with its response
to your letter, a detailed analysis supporting the Corporation's
conclusion that the disclosure of the Confidential Targets would
cause the
Corporation competitive harm. The Corporation will describe in
its supplemental material and will disclose in all future filings,
as
applicable, how likely it will be for the named executive officers
to
achieve the Confidential Targets. |
| 8. Although
you provide a description of how company performance affects compensation,
there is minimal analysis of the effect individual performance has
on
compensation awards despite disclosure that indicates you make
compensation-related decisions in connection with non-quantitative
achievements. Your disclosure attempts to place in context the
target awards for the executives but it is not clear what these target
goals are or how they impact specific compensation
amounts. Please provide appropriate detail and analysis of how
individual performance contributed to actual 2006 compensation for
the
named executive officers. For example, disclose and discuss in
greater detail the achievement of the financial and operational goals
within a named executive officer's individual area of
responsibility. See Item 402(b)(2)(vii) of Regulation
S-K. |
| The
Corporation respectfully acknowledges the Staff's comment and will
include
additional disclosure and analysis in all future filings, as applicable,
regarding how individual performance contributed to actual 2006
compensation for the named executive officers, how the individual
strategic objectives are weighted and how they impact specific
compensation amounts. The Corporation notes, however, as
discussed in its response to Comment 7, which has been submitted
to the
Staff supplemental on a confidential basis, that disclosure of individual
strategic objectives would result in competitive harm to the
Corporation. Accordingly, individual strategic objectives will
not be specifically disclosed in future filings. |

| Mr.
Timothy A. Geishecker Securities
and Exchange Commission Page 10 November
16, 2007 |
| --- |
| For
each named executive officer, individual performance directly impacts
40
percent of the current year's annual incentive award under the
Bonus Plan
and is a factor in determining base salary. In addition,
the Corporation believes that individual performance indirectly
impacts
the Corporation's attainment of its financial performance
goals. |
| If
a named executive officer fails to achieve any of his or her individual
strategic objectives, the portion (40 percent) of the named executive
officer's annual incentive award under the Bonus Plan that is based
solely
on achievement of individual strategic objectives will be
reduced. Moreover, the failure to achieve these individual
objectives is considered, together with other factors discussed on
pages
25 and 28 of the Proxy Statement and in the Corporation's response
to
Comment 4 above, by the Board in establishing the officer's base
salary
for the following fiscal year. Due to the importance of each of
the named executive officers to the financial performance of the
Corporation, the Compensation Committee believes that a low level
of
achievement by a named executive officer on his or her individual
strategic objectives could, in some years, impact the Corporation's
financial performance and decrease the portion (60 percent) of the
officer's annual incentive award that is based solely on the Corporation's
financial performance. The
Corporation will, to the extent we have not otherwise sought confidential
treatment in our request that is being submitted to the Staff on
a
supplemental basis, disclose in future filings, as applicable,
additional
information regarding the achievement of financial and operational
goals
within each named executive officer's individual area of responsibility,
and how the achievement of individual strategic objectives contributed
to
actual compensation for each of the named executive
officers. |
| 9. Refer
to the disclosure relating to the survey data you obtained from three
leading compensation firms, the retention of Mercer Human Resource
Consulting, and the use of a consultant for the Compensation Committee
and
the Board. Please provide a complete description of each of
these consultant's roles with the company. Include a concise
and complete description of the nature and scope of the assignments
of the
consultants and discuss how their roles and responsibilities differ
depending on whether they have been engaged by management, the Committee,
or the Board and describe the interaction, if any, between the various
groups. See Item 407(e)(3)(iii) of Regulation
S-K. |

| Mr.
Timothy A. Geishecker Securities
and Exchange Commission Page 11 November
16, 2007 |
| --- |
| The
Corporation respectfully acknowledges the Staff's comment and will
include
additional disclosure in all future filings, as applicable, regarding
the
nature and scope of the assignments of consultants, including how
their
roles and responsibilities differ depending on who engaged
them. As
indicated in the response to Comment 3 above, compensation survey
data was
purchased from Watson Wyatt, Towers Perrin and Mercer. No
consultants were retained in connection with the Corporation's acquisition
of this survey data. The Corporation utilized the data from the
purchased surveys to calculate targeted amounts of base salary for
the
named executive officers based on the regression model discussed
in the
response to Comment 3 above. The
Compensation Committee hired Mercer for two executive compensation
projects in 2006. The first project was to review the
Corporation's existing change in control arrangements, as discussed
in our
response to Comment 11 below. The second project was to review
the Corporation's draft Compensation Discussion and Analysis for
inclusion
in the Proxy Statement. Mercer reviewed various drafts and
provided feedback and comments to the Compensation Committee and
the
Corporation's management during the course of its review. In
conjunction with its review of the Corporation's Compensation Discussion
and Analysis, Mercer also assisted the Compensation Committee and
management in calculating the potential payments for each of the
named
executive officers upon termination from employment or change in
control
of the Corporation. |
| Outstanding
Equity Awards at Fiscal Year-End 2006, page
37 |
| 10. You
include only the last column for stock awards but omit the prior
three
columns. Please explain the absence or include the required
disclosure as appropriate. Refer to Item 402(f) of Regulation S
K. |
| The
three omitted stock award columns require disclosure of the number
of
unvested shares or units of stock, the market value of such unvested
shares or units and the number of unearned, unvested shares, units
or
other rights awarded under an equity incentive plan. The
Corporation has never issued stock awards to any of the named executive
officers except pursuant to the Performance Plan. The awards
under the Performance Plan are reflected in the final column of the
Outstanding Equity Awards at Fiscal Year-End 2006 table on page 37
of the
Proxy Statement. These awards represent the 50 percent of the |

| Mr.
Timothy A. Geishecker Securities
and Exchange Commission Page
12 November
16, 2007 |
| --- |
| Performance
Plan award granted in 2006 for the 2006-2008 performance period that,
upon
vesting, will be settled in stock. Accordingly, these awards
are classified as stock awards pursuant to an equity incentive
plan. As described on pages 27 and 28 of the Proxy Statement
under the caption "Long-Term Incentives – Performance Plan" and page 33 of
the Proxy Statement under the caption "Summary Compensation Table
for
Fiscal 2006," the Corporation is unable to determine the number of
shares
of stock underlying the portion of the Performance Plan award payable
in
stock until such time as the award vests and is actually
paid. Consequently, the award was reflected in the table at its
targeted dollar value, and no shares were set aside on the date of
grant. Notwithstanding the foregoing, in future filings, as
applicable, the Corporation will include a column disclosing the
number of
unearned shares that have not vested, based upon the closing price
of the
Corporation's common stock as of the end of the fiscal
year. |
| Potential
Payments Upon Termination or Change in Control, page
39 |
| 11. Please
describe and explain how the appropriate payment and benefit levels
are
determined under the various circumstances that trigger payments
or
provision of benefits under the various change of control
arrangements. Also, in the Compensation Discussion and
Analysis, discuss how these arrangements fit into your overall
compensation objectives and affect the decisions you made regarding
other
compensation elements and the rationale for decisions made in connection
with these arrangements. See paragraphs (b)(1)(v) and (j)(3) of
Item 402 of Regulation
S-K. |
| The
Corporation respectfully acknowledges the Staff's comment and will
include
additional explanation in all future filings, as applicable, of its
change
in control arrangements with the named executive officers, together
with
an explanation of how such arrangements fit into the Corporation's
overall
compensation objectives and affect the decisions the Corporation
made
regarding other compensation elements. The
Compensation Committee's rationale for the Corporation's change in
control
arrangements is a desire by the Compensation Committee to strike
an
appropriate balance between executive and shareholder interests,
preserve
productivity, avoid disruption and limit distraction during a period
when
we are, or are rumored to be, involved in a change in control
transaction. The Compensation Committee wants executives to be
able to objectively evaluate any change in control proposal presented
to
the Corporation without being so advantaged by the potential change
in
control that he or she would overstate the value of the potential
transaction. Likewise, the Compensation Committee intends to
ease the consequences of an unexpected termination of employment
so that |

| Mr.
Timothy A. Geishecker Securities
and Exchange Commission Page
13 November
16, 2007 |
| --- |
| offers
that are in the best interests of the
Corporation and its shareholders are given careful and thoughtful
review. In establishing the payment and benefit levels for each
of the named executive officers under their individual change in
control
employment agreements, the Compensation Committee evaluated several
different options and selected the option that best met the objectives
outlined above. The selected option was also consistent with
market practices. In future filings, as applicable, the
Corporation will discuss in further detail the option that was selected
and why it was selected. While
cognizant of their terms, the Compensation Committee does not currently
view the change in control arrangements as an element of current
compensation, and such arrangements do not necessarily affect the
Compensation Committee's annual decisions with respect to the compensation
elements of our compensation program. |
| Director
Compensation, page 41 |
| 12. For
each director, disclose by footnote the aggregate number of stock
awards
outstanding at fiscal year end. Also disclose the grant date
fair value of the stock awards to directors. Refer to the
Instruction to Item 402(k)(2)(iii) and
(iv). |
| The
Corporation respectfully acknowledges the Staff's comment and will
disclose by footnote in all future filings, as applicable, the aggregate
number of stock awards outstanding at fiscal year end. As of
December 30, 2006, the aggregate number of stock awards, which consist
solely of grants of the Corporation's common stock, outstanding for
each
of the Corporation's Directors was as follows: Ms. Bell – 0
shares; Mr. Calado – 2,000 shares; Mr. Christensen – 5,100 shares; Ms.
Francis – 5,700 shares; Mr. Halbrook – 2,000 shares; Mr. Jenkins – 1,000
shares; Mr. Martin – 4,500 shares; Mr. Porcellato – 2,000 shares; Mr.
Scalzo – 2,900 shares; Ms. Smith – 5,100 shares; Mr. Stern – 6,300 shares;
Mr. Waters – 3,700 shares; and Mr. Stanley – 6,400 shares. The
grant date fair value of the stock awards to the Corporation's Directors
during fiscal 2006 is presented in footnote 2 to the Director Compensation
table set forth on page 42 of the Proxy Statement. The
Corporation will continue to include such information in all future
filings, as applicable. ** |

| Mr.
Timothy A. Geishecker Securities
and Exchange Commission Page
14 November
16, 2007 |
| --- |
| We
appreciate the Staff's efforts to assist us in complying with applicable
disclosure requirements and enhancing our overall executive compensation
disclosure. As requested in your comment letter, we hereby
acknowledge that: |

| · | the
Corporation is responsible for the adequacy and accuracy of the disclosure
in the filing; |
| --- | --- |
| · | Staff
comments or changes to disclosure in response to comments do not foreclose
the Commission from taking any action with respect to the filing;
and |
| · | the
Corporation may not assert Staff comments as a defense in any proceeding
initiated by the Commission of any person under the federal securities
laws of the United States. |
| Please
do not hesitate to contact the undersigned if you have any questions
or
requests for additional information in connection with our
responses. Sincerely, Jeffrey
D. Lorenger Vice
President, General Counsel and
Secretary | |