Roy R.
Centrella, Vice President/Controller/Chief Accounting Officer
December
12, 2008
H.
Christopher Owings
Assistant
Director
Division
of Corporation Finance
United
States Securities and Exchange Commission
Mail Stop
3561
Washington,
D.C. 20549-7010
|
Re:
|
Southwest
Gas Corporation
|
|
Form
10-K for the year ended December 31, 2007
|
|
|
Filed
February 29, 2008
|
|
|
Definitive
Proxy Statement on Schedule 14A
|
|
|
Filed
March 28, 2008
|
|
|
File
No. 001-07850
|
Dear Mr.
Owings:
Southwest
Gas Corporation (the “Company”) is
submitting this letter in response to comments received from the Staff of the
Securities and Exchange Commission (the “SEC”) by letter dated
December 5, 2008. The numbering of the paragraphs below corresponds
to the numbering of the Staff’s letter, the text of which we have incorporated
into this response letter for convenience.
Definitive Proxy Statement
on Schedule 14A
Compensation Discussion and
Analysis, page 16
General
|
1.
|
We
reviewed your response to comment 18 in our letter dated August 14, 2008
as well as Appendix 18A and 18B to your letter dated November 18,
2008. With respect to Appendix 18A, we note your disclosure
that you “set salaries and overall compensation … at amounts that
approximate the 50th
percentile of the amounts paid by the focus group companies discussed
above.” To the extent that the 50th
percentile for the national focus group and the regional focus group are
not the same, please disclose how the committee evaluates and uses the
information from the national focus group and the regional focus group to
set salaries and overall compensation for your named executive
officers. In the case of salaries, please also disclose the
names of the “peer companies” referenced under the heading salaries on
page 18 of the proxy. If the
reference
|
5241 Spring Mountain Road / Las Vegas, Nevada
89150-0002
P.O. Box 98510 / Las Vegas, Nevada 89193-8510 /
(702) 876-7083
www.swgas.com
H.
Christopher Owings
United
States Securities and Exchange Commission
December
12, 2008
Page 2
of 2
to “peer
companies” should instead be to “focus groups,” please also revise your
disclosure under the heading “Salary” to clarify this point.
Response:
We
supplementally advise the Staff that the 50th
percentile for both the national focus group and the regional focus group have
approximated the same amount. If, in the future, this is not the
case, we will include appropriate disclosure in the proxy regarding the
committee’s evaluation and use of such information in setting salaries and
overall compensation for our named executive officers.
The
reference to “peer companies” referenced under the heading “Salaries” on page 18
of the proxy should instead be “focus groups.” We will revise this
disclosure in future filings.
|
2.
|
We
reviewed your response to comment 19 in our letter dated August 14, 2008
as well as Appendix 19B to your letter dated November 18,
2008. Please revise your disclosure to include the grant date
fair value for the actual number of performance shares
granted.
|
|
|
Response:
|
We have
modified the “Grants of Plan-Based Awards” table on Appendix 2A attached
hereto to include the grant date fair value for the actual number of performance
shares granted in January 2008 pursuant to the applicable awards made in
2007.
* *
*
In
connection with our responses to your comments, the Company acknowledges that
the Company is responsible for the adequacy and accuracy of the disclosure in
the filings; staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action with respect to
the filings; and the Company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the federal
securities laws of the United States.
Sincerely,
/s/ Roy R. Centrella
sw
Appendix
2A
Grants
of Plan-Based Awards (2007)
The
following table sets forth information regarding each grant of an award made
under any of our Incentive Plans to our named executive officers during the
fiscal year ended December 31, 2007.
GRANTS
OF PLAN-BASED AWARDS (2007)
|
Name
|
|
Estimated
Possible Payouts Under
Non-Equity Incentive Plan Awards
|
Estimated Possible Payouts Under
Equity
Incentive Plan Awards
|
|||||||||||
|
Award
Type
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Threshold
(#)
|
Target
(#)
|
Maximum
(#)
|
||||||||
|
Jeffrey
W. Shaw
|
|
MIP(1)
RSUP(2)
|
$193,200
—
|
$276,000
—
|
$386,400
—
|
9,886
4,954
|
14,123
9,908
|
19,773
14,862
|
||||||
|
George
C. Biehl
|
|
MIP(1)
RSUP(2)
|
$90,972
—
|
$129,960
—
|
$181,944
—
|
4,655
1,655
|
6,650
3,311
|
9,310
4,967
|
||||||
|
James
P. Kane
|
MIP(1)
RSUP(2)
|
$109,200
—
|
$156,000
—
|
$218,400
—
|
5,588
2,146
|
7,983
4,293
|
11,176
6,440
|
|||||||
|
Thomas
R. Sheets
|
|
MIP(1)
RSUP(2)
|
$56,910
—
|
$81,300
—
|
$113,820
—
|
2,912
994
|
4,160
1,988
|
5,824
2,983
|
||||||
|
Dudley
J. Sondeno
|
MIP(1)
RSUP(2)
|
$56,070
—
|
$80,100
—
|
$112,140
—
|
2,869
979
|
4,099
1,959
|
5,738
2,939
|
|||||||
_________________________
(1)
Represents the annual award opportunities granted under the MIP for the
2007 fiscal year, 40% of which is paid in cash and 60% of which is paid in
performance shares. The actual number of performance shares is
determined in the succeeding year, by dividing the applicable “Threshold,”
“Target” and “Maximum” amounts by a share price that is determined by the
five-day average price of the Company’s common stock ending on January 8,
2008. For the 2007 MIP awards, this five-day average was
$29.312. The award amount under the MIP is based upon the Company
achieving a percentage of the target levels under the MIP, as described under
“Compensation Discussion and Analysis – Elements of Compensation –
Performance-Based Compensation.” “Threshold” represents achieving at
least 70% of all five of the established target levels under the MIP, and
equals 70% of the named executive officer’s incentive opportunity under the MIP;
“target” represents achieving 100% of all five of the established target levels
under the MIP, and equals 100% of the named executive officer’s incentive
opportunity under the MIP; and “maximum” represents achieving 140% or more of
all five of the established target levels under the MIP, and equals 140% of the
named executive officer’s incentive opportunity under the
MIP. If less than all five of the target levels are achieved,
then the “Threshold,” “Target” and “Maximum” amounts will be proportionally
reduced by an amount equal to the percentage of targets that were
achieved. The MIP awards vest three years after the date the actual
awards are determined. Since Messrs. Biehl, Kane, Sheets, and Sondeno
are over age 55 and are able to retire under the Incentive Plans, the awards
will fully vest at their termination of employment. The grant date
fair value of the actual number of performance shares granted on January 22,
2008 pursuant to the applicable MIP annual award for the 2007 fiscal year,
computed in accordance with FAS 123R, was $361,771 for Mr. Shaw, $170,367 for
Mr. Biehl, $204,484 for Mr. Kane, $106,575 for Mr. Sheets and $104,994 for Mr.
Sondeno.
(2) Represents
the annual award opportunities granted under the RSUP for the 2007 fiscal
year. The actual number of performance shares is determined in the
succeeding year, by dividing the applicable “Threshold,” “Target” and “Maximum”
amounts by the closing share price on the date of determination of the
award. For the 2007 RSUP awards, the date of determination was
January 22, 2008 and the closing price for the Company’s common stock on that
date was $27.25. The award amount under the RSUP is based upon the
average MIP payout percentage for the three years immediately preceding the RSUP
award
determination
date, as described under “Compensation Discussion and Analysis – Elements of
Compensation – Performance-Based Compensation.” “Threshold”
represents a MIP average payout percentage of at least 90%, and equals 50% of
the named executive officer’s incentive opportunity under the RSUP; “target”
represents a MIP average payout percentage of at least 100%, and equals 100% of
the named executive officer’s incentive opportunity under the RSUP; and
“maximum” represents a MIP average payout percentage of at least 120%, and
equals 150% of the named executive officer’s incentive opportunity under the
RSUP. No award will be earned under the RSUP unless the MIP average
payout percentage is at least 90%. A percentage of the RSUP awards
vest each year over the three years following the date of determination of the
actual award amount. Since Messrs. Biehl, Kane, Sheets, and Sondeno
are over age 55 and are able to retire under the Incentive Plans, the awards
will fully vest at their termination of employment. The grant date
fair value of the actual number of performance shares granted on January 22,
2008 pursuant to the applicable RSUP annual award for the 2007 fiscal year,
computed in accordance with FAS 123R, was $216,000 for Mr. Shaw, $72,200 for Mr.
Biehl, $93,600 for Mr. Kane, $43,360 for Mr. Sheets and $42,720 for Mr.
Sondeno.