View:
Harsco
Corporation
350
Poplar Church Road
Camp
Hill, PA 17011 USA
Mail:
P.O. Box 8888
Camp
Hill, PA 17001-8888 USA
Telephone:
717.763.7064
Fax:
717.763.6424
Web:
www.harsco.com
February
20, 2008
VIA
EDGAR
Division
of Corporation Finance
Securities
and Exchange Commission
100 F
Street, N.E.
Washington,
DC 20549
Attention:
Jay Ingram, Attorney Advisor
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Re:
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Harsco
Corp.
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Definitive
14A
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Filed
on March 20, 2007
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File Number
001-03970
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Dear Mr.
Ingram:
Harsco
Corporation, a Delaware corporation (“we,”
“us”
or the “Company”),
is submitting this letter in response to the second comment letter from the
staff (the “Staff”) of
the Securities and Exchange Commission (the “Commission”)
dated January 15, 2008 (the “Comment
Letter”) with respect to the Company’s definitive proxy statement on
Schedule 14A filed on March 20, 2007 (the “2007 proxy
statement”). Please be advised that Salvatore D. Fazzolari was
named Chief Executive Officer of the Company, effective January 1,
2008.
Below is
the Company’s responses to the comment in the Comment Letter. For the
convenience of the Staff, we have repeated the Staff’s comment before the
response.
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1.
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Please
provide additional analysis justifying the omission of the EVA performance
objectives for 2007, 2008 and 2009 under the annual cash incentive program
and the earnings per share and operating cash flow targets for 2007 and
2008 and EVA performance targets for 2009 under the long-term equity
compensation program. Provide us with specific illustrative
examples of the manner in which competitors could use the information to
obtain each of the competitive advantages cited in your
response.
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Securities and Exchange Commission
February 20,
2008
Page 2
Response
Introduction
We continue to believe that disclosure
of the specific performance targets that we have previously established
for
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economic
value added improvement (“EVA®”)
performance for 2007, 2008 and 2009 under our annual cash incentive
program (the “Annual EVA
Targets”), and
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EVA
performance for the years ending December 31, 2007, 2008 and 2009 under
our long-term equity compensation program (the “Long-Term
EVA Target” and, together with the Annual EVA Targets, the “Performance
Targets”),
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would
cause us competitive harm. If we disclose the Performance Targets,
our competitors will have a way to extrapolate strategic information from the
Performance Targets, and use this strategic information to create competitive
advantages for themselves that will cause us competitive
harm. Additionally, our customers would be able to extrapolate
certain information from our Performance Targets that would allow them to
determine strategic information about our business and, in turn, gain a
competitive advantage over us in negotiations.
The remainder of this response letter
provides specific illustrative examples of the manner in which we believe our
competitors could extrapolate strategic information from the Performance Targets
and use this strategic information to create competitive advantages for
themselves. In reliance on Instruction 4 to Regulation S-K Item
402(b), under the circumstances described above and in the remainder of this
response letter, we continue to believe that we are justified in excluding the
Performance Targets from future filings to the extent they relate to performance
periods that are not yet complete. Additionally, we do not believe
that disclosure of specific performance targets for performance periods that are
not yet complete (and stretch one, two or three years into the future) is
material to an understanding of how and why we paid our named executive officers
the types and amounts of compensation that we did for the most recent one, two
or three completed fiscal years, which is what we believe is required of us
under Regulation S-K Item 402(b)(v). Finally, we strongly believe
that the competitive harm that we would experience as a result of disclosing
these future performance targets far outweighs any potential benefit to
investors from reviewing such targets.
The Company advises the Staff that the
Company’s competitive harm analysis being provided in response to this comment,
including the Company’s specific illustrative examples of the manner in which it
believes its competitors could use the information to obtain competitive
advantage and inflict competitive harm, is being provided supplementally under
separate cover. By separate letter, the Company has requested
confidential treatment of its competitive harm analysis and specific
illustrative examples pursuant to the provisions of 17 C.F.R. §
200.83.
Securities and Exchange Commission
February 20,
2008
Page 3
Long-Term EPS/Cash Flow
Targets
Background. As
also described in our 2007 proxy statement and in our response to the original
comment letter received on September 26, 2007, we provide our named executive
officers with annual RSU grants under what we refer to as our long-term equity
compensation program. Under this program, the actual number of shares
eventually issued to a named executive officer depends on our achievement of
specific performance targets established for the company as a
whole. However, the Company made a decision in the early part of 2007
to move away from EPS and cash flow performance measures following the 2008
calendar year.
Analysis. Upon
further review, as a result of our move away from EPS and cash flow targets as
measures of performance, and in light of the fact that we have given guidance to
the Street with regard to our 2008 EPS and cash flow numbers, we have determined
that the competitive harm argument is less compelling in this case and that
disclosure of these numbers will not cause us the same level of competitive harm
that disclosure of our EVA targets would, especially since guidance with regard
to the same is publicly available. As a result, we have made a
decision to withdraw our competitive harm argument with respect to these
goals. Our arguments and analysis with regard to the Long-Term EVA
Target are already set forth above.
The Company anticipates disclosing its
2008 EPS and cash flow targets in future proxy statements, including the 2008
proxy statement.
Materiality
Finally, as an additional but related
argument, we believe that disclosure of specific performance targets for
performance periods that are not yet complete (and stretch one, two or three
years into the future) is not material to an understanding of how and why we
paid our named executive officers the types and amounts of compensation that we
did for the most recent one, two or three completed fiscal years, which is what
is required of us under Regulation S-K Item 402(b)(v). This future
information would not provide our shareholders with any additional material
insight (beyond what we already provide in our proxy statements) into our
compensation arrangements or the reasons how and why we paid the types and
amounts of compensation that we did during the last one, two or three completed
fiscal years. For example, where we are able to set different target
amounts for EVA from year-to-year, an EVA target of $30.00 for 2009 might have
no material relationship or relevance for our EVA target of $40.00 for 2007,
especially if we undertake major changes in our strategic planning and business
between 2007 and
Securities and Exchange Commission
February 20,
2008
Page 4
2009. Additionally,
as described above, this type of disclosure could in fact cause us material
competitive harm.
* * *
The
Company acknowledges that:
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it
is responsible for the adequacy and accuracy of the disclosure in its 2007
definitive proxy statement;
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Staff
comments or changes to disclosure in response to comments do not foreclose
the Commission from taking any action with respect to its 2007 definitive
proxy statement; and
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the
Company may not assert Staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities law
of the United States.
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If you
have any questions regarding these matters, please do not hesitate to contact
the undersigned.
Sincerely,
/s/ Mark
E. Kimmel
Mark E.
Kimmel
Senior
Vice President, General
Counsel,
Chief Administrative
Officer
and Corporate Secretary