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<SEC-DOCUMENT>0000950123-09-041587.txt : 20091211
<SEC-HEADER>0000950123-09-041587.hdr.sgml : 20091211
<ACCEPTANCE-DATETIME>20090908142447
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950123-09-041587
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20090908

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			KORN FERRY INTERNATIONAL
		CENTRAL INDEX KEY:			0000056679
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-EMPLOYMENT AGENCIES [7361]
		IRS NUMBER:				952623879
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0430

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		1900 AVENUE OF THE STARS
		STREET 2:		SUITE 2600
		CITY:			LOS ANGELES
		STATE:			CA
		ZIP:			90067
		BUSINESS PHONE:		3105521834

	MAIL ADDRESS:	
		STREET 1:		1900 AVENUE OF THE STARS
		STREET 2:		SUITE 2600
		CITY:			LOS ANGELES
		STATE:			CA
		ZIP:			90067
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
<HTML>
<HEAD>
<TITLE>corresp</TITLE>
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<BODY bgcolor="#FFFFFF">
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>&#091;KORN/FERRY INTERNATIONAL LETTERHEAD&#093;</B>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">September&nbsp;4, 2009
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ms.&nbsp;Linda van Doorn<BR>
Senior Assistant Chief Accountant<BR>
Division of Corporation Finance<BR>
Securities and Exchange Commission<BR>
100 F Street, N.E.<BR>
Washington, D.C. 20549

</DIV>

<DIV align="left" style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>RE:&nbsp;&nbsp;&nbsp;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Korn/Ferry International<BR>
Form&nbsp;10-K for the fiscal year ended April&nbsp;30, 2009<BR>
Filed June&nbsp;29, 2009<BR>
Form&nbsp;14A Filed August&nbsp;7, 2009<BR>
File No.&nbsp;1-14505</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Dear Ms. van Doorn:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This letter responds to your letter dated August&nbsp;24, 2009, regarding Korn/Ferry
International&#146;s (the &#147;Company&#148;) annual report on Form 10-K (the &#147;Form 10-K&#148;) for the fiscal year
ended April&nbsp;30, 2009 (filed June&nbsp;29, 2009) and the Company&#146;s proxy statement (the &#147;Proxy
Statement&#148;) on Schedule&nbsp;14A relating to the Company&#146;s 2009 Annual Meeting of Stockholders (filed on
August&nbsp;7, 2009). A copy of this was also faxed to Bill Demarest at 703.813.6984, whose name was on
the original fax we received. Each of your comments from the August&nbsp;24, 2009 letter is set forth
below, followed by our related response.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Form&nbsp;10-K</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Item&nbsp;1A. Risk Factors, page 9</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Global economic developments and the conditions in the geographic regions, page 10</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>1.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Given the current state of the economy and the abundance of available talent
seeking employment, please revise this risk factor or add a new risk factor describing
the likelihood that companies will, as a cost-saving measure, choose to rely on their
own human resources departments rather than hire third-party search firms to find
talent.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Per the Staff&#146;s comment, the Company will revise the &#147;Global economic developments&#148; risk
factor to read as follows (underlined words represent revisions) in its next periodic filing, and
all future filings as appropriate.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B><I>Global economic developments and the conditions in the geographic regions and the
industries from which we derive a significant portion of</I></B>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ms.&nbsp;Linda van Doorn<BR>
September&nbsp;4, 2009<BR>
Page: 2<BR>
&nbsp;

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B><I>our fee revenue could negatively affect our business, financial condition and
results of operations.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Demand for our services is affected by global economic conditions and the general
level of economic activity in the geographic regions and industries in which we
operate. When conditions in the global economy, including the credit markets,
deteriorate, or economic activity slows, many companies hire fewer permanent
employees <U>and some companies, as a cost-saving measure, choose to rely on
their own human resources departments rather than third-party search firms to find
talent</U><I>. </I>The geographic regions and industries in which we operate have
recently deteriorated significantly and may remain depressed for the foreseeable
future. If the national or global economy or credit market conditions in general
do not improve or deteriorate further in the future, the demand for our services
could continue to weaken, resulting in lower cash flows and a negative effect on
our business, financial condition and results of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Item&nbsp;15. Exhibits and Financial Statement Schedules, page 36</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We note your disclosure on page 28 about your agreement with one of your
investment securities firms regarding your auction rate security holdings. Please
tell us why you have not filed this agreement as an exhibit to your report.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After reviewing and considering the repurchase agreement (the &#147;ARS Agreement&#148;) relating to the
Company&#146;s auction rate securities (&#147;ARS&#148;), management determined that the ARS Agreement was not
material to the Company from either a quantitative or qualitative perspective. As a result, the
Company concluded there was no obligation to file the ARS Agreement as an exhibit pursuant to Item
601(b)(10) of Regulation&nbsp;S-K or otherwise.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In evaluating the materiality of the ARS Agreement, management considered a number of factors,
including, among others, the relevance of the ARS when considered against the Company&#146;s strong
liquidity position. In this regard, management noted that as of April&nbsp;30, 2009, the Company held
approximately $12.4&nbsp;million par value of ARS, whereas as of the same date, the Company had
approximately $330.3&nbsp;million in cash, cash equivalents and marketable securities, no outstanding
indebtedness and approximately $45&nbsp;million of borrowing capacity available under its credit
facility. The Company&#146;s ARS thus represented only approximately 3.8% of its cash, cash equivalents
and marketable securities (and only 3.3% of its current assets) as of April&nbsp;30, 2009. Management
also considered the fact that the Company was not relying on the proceeds from the ARS to fund its
operations, in part because the Company continues to generate sufficient cash flow to funds its
operations. Further, the Company did not enter into the ARS Agreement because of a near term need
for liquidity. Finally, management continues to believe that the credit quality of the ARS remains
high due to the creditworthiness of the issuers of the ARS.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ms.&nbsp;Linda van Doorn<BR>
September&nbsp;4, 2009<BR>
Page: 3<BR>
&nbsp;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We note in particular that, notwithstanding the materiality determination described above, the
Company continues to include disclosure regarding the existence, amount, collectability, maturity
and status of its ARS (including disclosure with respect to the ARS Agreement) in the Company&#146;s
periodic reports because management believes that information may be useful to investors. This
disclosure included by the Company was intended to enhance the ability of investors to understand
the ARS, and was not intended to be read as an acknowledgment that the ARS or the ARS Agreement
were themselves material to the Company.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>3.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Refer to the Stock and Asset Purchase Agreement dated August&nbsp;8, 2006, which
is included as Exhibit&nbsp;10.32 to the </B><B>Form 10-K</B><B>. We note that the agreement, as filed,
omits schedules and exhibits to the agreement. Item&nbsp;</B><B>601(b)(10)</B><B> of Regulation&nbsp;S-K
requires you to file all material contracts in their entirety. Please file the
complete agreement with your next quarterly report or tell us why you believe this
information is no longer material to investors.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company believes the body of the Stock and Asset Purchase Agreement dated as of August&nbsp;8,
2006 (the &#147;2006 Purchase Agreement&#148;) and filed as Exhibit&nbsp;10.32 to the Form 10-K includes all of
the material terms of the related transaction.<SUP style="font-size: 85%; vertical-align: text-top">1</SUP> The body of the 2006 Purchase Agreement includes:
(i)&nbsp;the mechanics for the purchase and sale of the assets and businesses, (ii)&nbsp;the calculation of
the purchase price (including the mechanics for determining any post-closing purchase price
adjustments), (iii)&nbsp;representations regarding the shares and assets that were sold to the Company
as well as each of the parties to the 2006 Purchase Agreement, (iv)&nbsp;the conditions to the
obligations of each of the parties to the 2006 Purchase Agreement and (v)&nbsp;the indemnification
obligations of each of the parties to the 2006 Purchase Agreement. The omitted schedules provide
only immaterial supplemental information that underlies the representations, warranties and
covenants set forth in the body of the agreement, including bank accounts, permits, closing date
indebtedness, required consents, and brokers. These details do not meaningfully add to the total
mix of information already disclosed regarding the 2006 Purchase Agreement and as such, the Company
believes such information is not material to an understanding of the 2006 Purchase Agreement or the
transactions contemplated thereby.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company included Exhibit&nbsp;A to the 2006 Purchase Agreement with its Exhibit&nbsp;10.32 filing
because the Company considered the definition of the terms contained in the 2006 Purchase Agreement
to be important to an understanding of that agreement&#146;s provisions. The Company did not, however,
include Exhibits B through F with the 2006
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">1</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>The Company recognizes that it filed the 2006 Purchase Agreement
pursuant to Item&nbsp;601(b)(10) of Regulation&nbsp;S-K (which does not contain a proviso
for the exclusion of schedules and exhibits) but respectfully notes to the
Staff that the 2006 Purchase Agreement could have been filed pursuant to Item
601(b)(2) of Regulation&nbsp;S-K (which does contain such a proviso) instead. The
Company will be more cognizant of this distinction in future filings.</TD>
</TR>

</TABLE>


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ms.&nbsp;Linda van Doorn<BR>
September&nbsp;4, 2009<BR>
Page: 4<BR>
&nbsp;

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Purchase Agreement because the Company considered them to be immaterial ancillary documents
that either addressed administrative matters related to the seller&#146;s business or matters the
Company would have not independently considered material. These exhibits included a schedule of
shares owned by the shareholders of the seller (immaterial to investors because the Company
purchased 100% of the outstanding equity of Lominger Consulting, Inc. and Lominger Limited, Inc.),
a form of employment and consulting agreement (immaterial to investors because it was entered into
with a former executive of the Lominger entities who was never a named executive officer or even an
officer of the Company); a form of the noncompetition agreement entered into by the sellers (the
terms of which were clearly immaterial to investors); and the form of company counsel opinion
(immaterial to investors because it would have provided no information with respect to the terms of
the transaction).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In light of the foregoing, the Company determined and continues to believe that the material
terms of the 2006 Purchase Agreement were contained in the body of the 2006 Purchase Agreement and
that the omitted schedules and exhibits did not and do not contain information necessary for an
investor&#146;s understanding of the transactions contemplated thereby.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company also notes to the Staff that the Company did not independently consider the
transactions contemplated by the 2006 Purchase Agreement to be quantitatively material to the
Company as a whole; however, the Company chose to disclose the completion of the transaction on
Form 8-K (and file the 2006 Purchase Agreement as an amendment to its next periodic report) in any
case as the acquisition was the first for the Company in several years, and the Company believed
that this information may have been useful to investors.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ms.&nbsp;Linda van Doorn<BR>
September&nbsp;4, 2009<BR>
Page: 5<BR>
&nbsp;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Note 1. Organization and Summary of Significant Accounting Policies </B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Accounting Adjustment, page F-13</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>4.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Your disclosure indicates that the correction of the error did not have a
material impact in the current period. However, it appears that there is
approximately a 20% effect on net loss and a 100% effect on operating income. Please
clarify to us how you determined that the effects on your current year consolidated
statements of operations are not material.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Staff Accounting Bulletin 99 (&#147;SAB 99&#148;) directs that a registrant assess both the quantitative
and qualitative aspects of an error in assessing its materiality to the financial statements. The
quantitative review focuses on the numerical &#147;magnitude&#148; of the error (e.g., its percentage impact
on the relevant reported metric). The qualitative review focuses on the facts and circumstances
surrounding the reporting of the error.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Immediately after discovering that the Company had recorded certain compensation and benefits
expenses twice, the Company performed a SAB 99 analysis and, pursuant to this analysis, management
determined that the effect of the errors (and the correction of the errors) was not quantitatively
material under either the rollover method or the iron curtain method (the Company analyzed the
error under both approaches pursuant to Staff Accounting Bulletin 108). When evaluating the error
under the rollover method, the Company found (i)&nbsp;the impact on operating income was 1.2% or less in
every quarter from fiscal 2005 through fiscal 2008, and was less than 0.7% in each fiscal year from
fiscal 2005 to fiscal 2008, (ii)&nbsp;the impact on stockholders&#146; equity in any one quarter from fiscal
2005 to fiscal 2008 was less than 0.05% (and less than 0.13% in any fiscal year) and (iii)&nbsp;the
impact on earnings per share was less than approximately one half of one cent in any one quarter
and less than one and one half cent per year in fiscal 2005 to 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management also concluded that the correction of the errors was not material to the Company&#146;s
consolidated financial statements under the iron curtain method. The correction of the error in
the fourth quarter of fiscal 2009 using the iron curtain method reduced operating losses by
approximately $3.7&nbsp;million where the Company otherwise would have recorded an operating loss of
$33.9&nbsp;million, a difference of 10.91%. While this is greater than a 5% difference, SAB 99 cautions
that exclusive reliance on a 5% (or any other percentage or numerical) threshold has no basis in
the accounting literature or the law. As such, this quantitative difference does not itself make
the errors material and should, instead, be viewed in relation to the total mix of information
available. When analyzed along with the rollover impacts described above and the qualitative
factors discussed below, management does not believe that the adjustment to the fourth quarter of
fiscal 2009 using the iron curtain was material to the consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Staff noted that the correction of the errors resulted in approximately a 20% effect on
net loss and a 100% effect on operating income in fiscal 2009. While the
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ms.&nbsp;Linda van Doorn<BR>
September&nbsp;4, 2009<BR>
Page: 6<BR>
&nbsp;

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Company determined that the correction of the errors was not material under the iron curtain
method, the Company recognizes that the correction of the error using the iron curtain method in
fiscal 2009 (as opposed to the fourth quarter) creates some differences in operating income that
appear to be large on a percentage basis; however, this is solely because the Company had a
break-even year in large part caused by the global economic downturn over the final six months of
fiscal 2009. While operating income (or loss) in each quarter of fiscal 2009 was approximately
equal to or in excess of $20&nbsp;million (with the exception of the third quarter, in which there was
an operating loss of $11.3&nbsp;million), operating income in fiscal 2009 was approximately $54,000
(prior to giving effect to the correction of the errors), so even a very small numerical change
would have created a large percentage change. In this regard management notes that if the
application of the iron curtain method resulted in a change of $54,000 in operating income, the
percentage impact on operating income would have been 100%, which the Company would similarly
determine not to be material to the consolidated financial statements. To this end, the Company
also points out that Todd Hardiman, SEC Associate Chief Accountant, Division of Corporation
Finance, noted in a 2007 speech that &#147;a large error can be immaterial&#148; and that &#147;&#091;w&#093;ith this
renewed focus, accountants started asking: if qualitative factors can cause small errors to be
material, can qualitative factors cause large errors to be not material? With the benefit of
hindsight, it&#146;s pretty clear that the answer is yes.&#148;<SUP style="font-size: 85%; vertical-align: text-top">2</SUP> Mr.&nbsp;Hardiman also stated in a 2006 speech
that one example of where a large error could be immaterial is in a break-even year.<SUP style="font-size: 85%; vertical-align: text-top">3</SUP> Management
determined and continues to believe that the situation contemplated by Mr.&nbsp;Hardiman is what
occurred in fiscal 2009, and therefore its materiality analysis should not be affected by the fact
that the Company had a break-even year in fiscal 2009. Because the denominator in fiscal 2009
operating income was so small (prior to giving effect to the correction of the errors), the
percentage results were significantly skewed, making what in reality is an immaterial adjustment
appear large on a percentage basis. By way of example, if the error were viewed in terms of the
Company&#146;s past operating income numbers it would clearly not be quantitatively material. A $3.7
million adjustment to operating income in any of the Company&#146;s past three fiscal years when the
Company&#146;s operating income was $91.9&nbsp;million, $82.3&nbsp;million and $76.2&nbsp;million, would only be a
percentage difference of 4.0%, 4.5% and 4.9%, respectively on an iron curtain basis. Further, in
the first half of fiscal 2009, the Company had operating income of $45.2&nbsp;million. Had the
Company&#146;s operations not been significantly impacted by the global economic downturn, and assuming
the Company&#146;s performance during the second half of the fiscal year continued as it had in the
first half of the fiscal year (creating a fiscal 2009 operating income of $90.4&nbsp;million, which is
in line with previous years), the
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">2</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Todd E. Hardiman (SEC Associate Chief Accountant, Division of
Corporation Finance), Remarks Before the 2007 AICPA National Conference on
Current SEC and PCAOB Developments (December&nbsp;11, 2007).</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">3</SUP></TD>
    <TD>&nbsp;</TD>
    <TD><I>See </I>Todd E. Hardiman, Remarks before the 2006 AICPA National
Conference on Current SEC and PCAOB Developments (Dec. 12, 2006) (noting that
one example where a large error could be immaterial is in a break-even year).</TD>
</TR>

</TABLE>


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<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ms.&nbsp;Linda van Doorn<BR>
September&nbsp;4, 2009<BR>
Page: 7<BR>
&nbsp;

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">percentage impact of the error on an iron curtain basis would have been only 4.1% in fiscal
2009. The Company does not believe the $3.7&nbsp;million error became material based on an iron curtain
analysis solely because (a)&nbsp;income from operations from the first half of fiscal 2009 were offset
by operating losses in the second half of fiscal 2009 and (b)&nbsp;the Company corrected the errors in
fiscal 2009, as opposed to any other recent fiscal year.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The same analysis applies with respect to the Company&#146;s net income calculations when analyzed
on an iron curtain basis, as the Company&#146;s net income was similarly significantly impacted by the
global economic downturn. For example, the $2.3&nbsp;million adjustment, net of taxes, to net income in
any of the past three years when the Company&#146;s net income was $66.2&nbsp;million, $55.5&nbsp;million and
$59.4&nbsp;million, respectively, would only be a percentage difference of 3.5%, 4.1% and 3.9%,
respectively on an iron curtain basis. Clearly, the $2.3&nbsp;million adjustment would not have been
quantitatively material on an iron curtain basis if it were applied to any of these fiscal years.
Further, in the first half of fiscal 2009, the Company had net income of $29.5&nbsp;million. Had the
Company&#146;s net income not been significantly impacted by the global economic downturn, and assuming
the Company&#146;s performance during the second half of the fiscal year continued as it had in the
first half of the fiscal year (creating fiscal 2009 net income of $59.0&nbsp;million, which is in line
with previous years), the percentage impact of the error would have been only 3.9% on an iron
curtain basis in fiscal 2009. Again, the Company does not believe the $2.3&nbsp;million adjustment, net
of taxes, became material on an iron curtain basis solely because (a)&nbsp;net income from the first
half of fiscal 2009 was offset by net losses in the second half of fiscal 2009 and (b)&nbsp;the Company
corrected the errors in fiscal 2009, as opposed to any other recent fiscal year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s qualitative materiality assessment also supports the conclusion that the errors
and the correction of the errors were not material. SAB 99 states that an error is material if,
&#147;in the light of surrounding circumstances, the magnitude of the item is such that it is probable
that the judgment of a reasonable person relying upon the report would have been changed or
influenced by the inclusion or correction of the item.&#148; Thus, registrants must evaluate whether
qualitative factors cause errors of quantitatively small amounts to be material to the financial
statements taken as a whole. The Advisory Committee on Improvements to Financial Reporting
(&#147;ACIFR&#148;) also states the converse: that qualitative factors can decrease the importance of an
error to reasonable investors.<SUP style="font-size: 85%; vertical-align: text-top">4</SUP>
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">4</SUP></TD>
    <TD>&nbsp;</TD>
    <TD><I>See </I>ACIFR Final Report, August&nbsp;1, 2008, at 80-82 available at
<U>http://www.sec.gov/about/offices/oca/acifr/acifr-finalreport.pdf</U>; <I>see
also </I>John W. White (Director, SEC Division of Corporation Finance), Corporation
Finance in 2008 &#150; A Focus on Financial Reporting, January&nbsp;23, 2008 (noting that
the ACIFR believes that &#147;the evaluation of errors should be made on a &#145;sliding
scale,&#146; recognizing that qualitative factors can lead to a determination that a
quantitatively significant error may not be material (just as qualitative
factors can be used to lead to a conclusion that a quantitatively small error
is material&#148;).</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ms.&nbsp;Linda van Doorn<BR>
September&nbsp;4, 2009<BR>
Page: 8<BR>
&nbsp;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Among the qualitative factors to be considered under SAB 99 is whether the error of the item
masks a change in earnings or trends and whether errors hide a failure to meet analysts&#146; consensus
expectations for the enterprise. In considering these factors, SAB 99 directs that &#147;the factual
context in which the user of financial statements would view the financial statement item&#148; is an
important consideration in assessing the total mix of information that a reasonable person can be
expected to rely on. Here, the errors did not impact the trend in operating income or net income
and did not impact the Company&#146;s estimates or projections. The impact was relatively uniform
across all periods and would not be considered material to any period by a reasonable user of the
consolidated financial statements. As noted above, the impact on stockholders&#146; equity in any one
quarter from fiscal 2005 to fiscal 2008 was less than 0.05% (and less than 0.013% in any fiscal
year) and the impact on earnings per share was less than approximately one half of one cent in any
one quarter and less than one and one half cents per year in fiscal 2005 through 2008. Metrics
used by analysts and investors to evaluate the Company&#146;s financial position were either not
impacted at all, such as the Company&#146;s revenue, or were not materially impacted, as is the case
with operating income or net income. The impact of the errors was also on the largest line item of
the Company&#146;s income statement (compensation and benefit expense), so it did not materially impact
any one line item in the income statement. Further, the Company&#146;s liquidity was not
significantly impacted by the correction (and was positively impacted). Liquidity increased by
approximately $4&nbsp;million, but when compared to cash, cash equivalents and marketable securities of
$326&nbsp;million (prior to giving effect to the correction of the errors) at April&nbsp;30, 2009, the impact
was 1.2%.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company also does not believe that a correction that reduced the amount of operating loss
by $3.7&nbsp;million for amounts that accumulated over the past eight years was seen as material by
analysts or other reasonable users of the consolidated financial statements who evaluate the
results of the business. In support of this point, the Company notes that on June&nbsp;26, 2009, the
trading day before the Company publicly amended its fourth quarter fiscal 2009 results of
operations, the Company&#146;s stock price closed at $10.86 on the New York Stock Exchange. The Company
publicly amended its fourth quarter fiscal 2009 results of operations on June&nbsp;29, 2009 before the
market opened, and on that date, the Company&#146;s stock price closed at $10.64, a trading change from
June&nbsp;26 that should not be viewed as indicative of the occurrence of a material event (especially
one that had a positive effect on the Company&#146;s liquidity). Even more telling is that the
Company&#146;s trading volume on June&nbsp;29 was only 282,300, well below the Company&#146;s average daily
trading volume in the month of June (of 402,586), and the seventh lightest trading day that month.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Another qualitative factor to be considered is whether the corrections will affect compliance
with loan covenants or other contractual requirements. Although the Company did not have any
borrowings outstanding, the errors did not have any negative impact on the Company&#146;s debt covenants
under its credit facilities.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ms.&nbsp;Linda van Doorn<BR>
September&nbsp;4, 2009<BR>
Page: 9<BR>
&nbsp;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SAB 99 makes clear that neither intentional errors nor illegal acts are necessarily material,
yet states that intent may be probative of the importance that the registrant&#146;s management assigns
to the misstated item and, therefore, of the importance that investors may assign to the item by
inference. Here, there was no evidence of any intent to manage earnings or to commit an illegal
act in relation to the errors, the errors were unintentional and there was no evidence of fraud.
There was no misappropriation of cash or Company assets related to the errors. Finally, accounting
for all other benefit arrangements (including two very similar to the arrangements adjusted for)
were accounted for properly.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company believes that the disclosure it made regarding the errors clearly disclosed the
nature and reason for the correction so users of the financial statements could easily determine or
discern: (i)&nbsp;that the correction was not an ongoing part of operations; (ii)&nbsp;the actual earnings
capacity of the Company; and (iii)&nbsp;that the past trend in earnings was not impacted by the error.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In light of each of the considerations set forth above, the Company determined that the
correction of the error was not material to the consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Definitive Proxy Statement</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Compensation Discussion and Analysis, page 21</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Elements of Compensation, page 23</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>5.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Please expand your discussion of compensation awards to explain specifically
why each named executive officer received the base salary, annual incentive and
long-term incentive awards that he or she did. For example, your discussion of base
salary should explain specifically how each factor, such as the competitive data and
general knowledge of the market, was used to determine individual base salaries and
why you decided to award base salaries based on those respective factors.
Furthermore, to the extent that base salary was not competitive, or alternatively, was
significantly higher, in relation to the data compiled, please explain why you
determined to award it regardless. Please refer to </B><B>Item 402(b)</B><B> of</B><U> </U><B>Regulation
S-K for guidance. Please tell us how you plan to comply and provide similar
disclosure in future filings.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In future filings, we will describe more specifically why each named executive officer
received the base salary, annual incentive and long-term incentive awards that he or she did. In
addition to the data disclosed in the Company&#146;s Proxy Statement, we will supplement our disclosures
regarding each of the compensation elements, as described below as applicable in the proxy
statements relating to future fiscal years.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ms.&nbsp;Linda van Doorn<BR>
September&nbsp;4, 2009<BR>
Page: 10<BR>
&nbsp;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Elements of Total Compensation Table</U>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Element</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Primary Objective</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Key Considerations for FY 2009</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Base Salary
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Provide sufficient
fixed cash income
for retention and
recruiting.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Based upon the Company&#146;s
strong performance in fiscal
2008, and also taking into
consideration competitive
data, the Compensation and
Personnel Committee increased
Mr.&nbsp;Burnison&#146;s salary from
$575,000 to $675,000
effective July&nbsp;1, 2008. In
light of the current economic
environment, however, Mr.
Burnison requested, and the
Board has agreed to, a
temporary salary reduction
effective as of July&nbsp;1, 2009
pursuant to which Mr.
Burnison&#146;s salary was ratably
reduced by $75,000.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">There were no changes to the
base salaries of the
Company&#146;s other named
executive officers during
fiscal 2009 as the
Compensation and Personnel
Committee determined based on
competitive data and general
market knowledge that the
base salary levels of the
other named executive
officers were appropriate.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Annual Bonuses
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Motivate named
executive officers
to meet one-year
performance and
strategic goals.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">As described in more detail
on page 23 of the Proxy
Statement under &#147;Annual
Bonuses&#148; the Compensation and
Personnel Committee
determines annual bonus
amounts based upon a number
of factors including
performance goals, strategic
objectives, competitive data,
individual performance, and
the terms of employment
contracts. The various
factors are not given
specific weights; the
Compensation and Personnel
Committee retains discretion
to consider items as it deems
appropriate. While the
Compensation and Personnel
Committee does not target a
particular position relative
to its peer group, in
determining the annual bonus
awards for each named
executive officer the
Compensation and Personnel
Committee does consider the
range of annual incentives
that the peer group provides
to similarly situated
executives and intends that
annual bonuses provided to
each named executive officer
fall within that range.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">See our response to Comments
# 6 and #7 for additional
detail regarding the
performance goals and
strategic objectives for FY
2009. See page 23 of the
Proxy Statement under &#147;Annual
Bonuses&#148; for disclosure
regarding the actual bonuses
paid to each named executive
officer for FY 2009.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Long-term Incentives
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Align NEO interests
with those of
stockholder and
encourage
achievement of
long-term goals.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The Compensation and
Personnel Committee
determines long-term
incentive award amounts based
upon a number of factors
including competitive data,
total overall compensation
provided to each named
executive officer, company
performance, historic grants,
and the terms of employment
agreements, if applicable.
The various factors are not
given specific weights; the
Compensation and Personnel
Committee retains discretion
to consider items as it deems
appropriate. While the
Compensation and Personnel
Committee does not target a</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ms.&nbsp;Linda van Doorn<BR>
September&nbsp;4, 2009<BR>
Page: 11<BR>
&nbsp;

</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Element</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Primary Objective</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Key Considerations for FY 2009</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">particular position relative
to its peer group, in
determining the long-term
incentive awards for each
named executive officer the
Compensation and Personnel
Committee does consider the
range of long-term incentives
that the peer group provides
to similarly situated
executives and intends that
long-term incentives provided
to each named executive
officer fall within that
range.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Historically and in FY 2009
Messrs.&nbsp;Burnison and Giusto
received annual equity grants
equal to 2x their base
salary, paid 50% in
performance shares and 50% in
time-based restricted stock,
which amount falls within the
range of long-term incentives
provided by the peer group
companies. The Compensation
and Personnel Committee
determined that this is the
appropriate level of equity
grant to motivate Messrs.
Burnison and Giusto to meet
the Company&#146;s long-term
goals.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">In fiscal 2009, the
Compensation and Personnel
Committee granted time-based
restricted stock to Mr.
McNabb, primarily to bring
Mr.&nbsp;McNabb&#146;s total
compensation within the range
paid by peer companies for
executive officers in Mr.
McNabb&#146;s position, and also
based upon strong business
unit performance in fiscal
2008.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The Compensation and
Personnel Committee
determined not to make an
equity grant to Ms.&nbsp;Dutra
during fiscal 2009, primarily
because Ms.&nbsp;Dutra received an
equity grant in connection
with her hire in January
2008.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The Compensation and
Personnel Committee did not
make an equity grant to Mr.
Reilly during fiscal 2009
because the terms of Mr.
Reilly&#146;s employment as
Executive Chairman did not
include equity grants.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Annual Bonuses, page 23</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>6.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We note that you determine annual bonuses based on financial goals, such as
revenue, operating income or earnings per share growth. You have not, however,
provided a quantitative discussion of all the terms of the necessary targets to be
achieved. Please disclose the specific targets used to determine the
performance-based compensation or provide a supplemental analysis as to why it is
appropriate to omit these targets pursuant to Instruction 4 of </B><B>Item 402(b)</B><B> of
Regulation&nbsp;S-K.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As described on page 23 of the Proxy Statement under &#147;Annual Bonuses&#148;, the Compensation and
Personnel Committee determines annual bonus amounts based upon a number of factors including
Company performance relative to performance goals established for the fiscal year. The performance
goals for fiscal 2009 were revenues of $767&nbsp;million and earnings per share of $1.18. Actual
results for fiscal 2009 were revenues of $638&nbsp;million and loss per share of $0.23. The
Compensation and Personnel Committee
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ms.&nbsp;Linda van Doorn<BR>
September&nbsp;4, 2009<BR>
Page: 12<BR>
&nbsp;

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">considered performance against the performance goals in determining annual bonus amounts for
FY 2009, but also recognized that the Company faced extremely challenging macroeconomic conditions
during FY 2009. As described on page 23 of the Proxy Statement under &#147;Annual Bonuses&#148; and our
response to Comment #5 above, performance with respect to these performance goals was not the only
factor considered in determining annual bonuses for FY 2009 and the various factors used to
determine annual bonuses are not given specific weights.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In future filings we will provide disclosure similar to that contained in the foregoing
paragraph and in our response to Comment #5 above to the extent such information is material to an
investor&#146;s understanding of how annual bonus awards are determined.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>7.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Refer to the comment above. We also note that part of this compensation is
based upon qualitative performance factors, such as brand awareness and customer
satisfaction, among others. Please note that qualitative goals generally need to be
presented to conform to the requirements of Item&nbsp;</B><B>402(b)(2)(v)</B><B>. Please revise your
disclosure to specifically describe how each qualitative performance factor was
analyzed in determining each named executive officers&#146; respective bonus. Please
provide this disclosure to us supplementally and confirm that you will similar
disclosure in future filings.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As described on page 23 of the Proxy Statement under &#147;Annual Bonuses&#148;, the Compensation and
Personnel Committee determines annual bonus amounts based upon a number of factors including the
Company&#146;s performance against strategic objectives established for the fiscal year. The strategic
objectives for FY 2009 consisted of maintaining the Company&#146;s position with regard to recruitment
and retention of executives and key employees, increasing the productivity of consultants,
diversification of Company revenues, maintaining and expanding brand awareness and increasing
client satisfaction. In light of the extraordinary economic conditions prevailing at mid-year,
objectives to drive major organization and cost restructuring were implemented in addition to the
above. These objectives related to the implementation of downsizing and cost-reduction initiatives
while generating positive cash flow. Strong performance against these objectives is considered
difficult to achieve, and, despite this, the Company performed very strongly against the strategic
objectives in fiscal 2009. As described on page 23 of the Proxy Statement under &#147;Annual Bonuses&#148;
and our response to Comment #5 above, performance with respect to these strategic objectives was
not the only factor considered in determining annual bonuses for FY 2009 and the various factors
used to determine annual bonuses are not given specific weights.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In future filings we will provide disclosure similar to that contained in the foregoing
paragraph and in our response to Comments # 5 and 6 above to the extent such information is
material to an investors understanding of how annual bonus awards are determined.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ms.&nbsp;Linda van Doorn<BR>
September&nbsp;4, 2009<BR>
Page: 13<BR>
&nbsp;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Long-term Incentives, page 24 </B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>8.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>In future filings, with respect to long-term incentive awards, please provide
a more detailed analysis of how the company determined the actual awards. Please
disclose the actual factors considered in making the equity awards for each named
executive officer. For example, please explain with specificity how you determined
the amounts of restricted stock awards to be granted to Messrs.&nbsp;Burnison, Giusto and
McNabb. Furthermore, as noted above, please disclose the specific performance targets
used to determine these performance related rewards. Provide this disclosure in
future filings and tell us how you plan to comply.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Please see our response to Comment #5, above. With respect to performance-related awards, as
described on page 24 of the Proxy Statement under &#147;Long-term Incentives&#148;, performance shares vest
based upon the Company&#146;s total shareholder return (the &#147;TSR&#148;) over the three-year performance
period relative to the peer group of companies listed on page 22 of the Proxy Statement. The table
included on page 24 of the Proxy Statement sets forth the percentage of performance shares that
would vest at the end of the three-year performance period based on the Company&#146;s relative ranking
with respect to TSR performance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In future filings we will provide disclosure similar to that contained in the foregoing
paragraph and in our response to Comment # 5 above to the extent such information is material to an
investors understanding of how long-term incentive awards are determined.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>9.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Refer to the table on page 24. In future filings, please revise to clarify,
if true, that the &#147;relative ranking&#148; refers to the company&#146;s TSR relative to that of
other peer group members. If the &#147;relative ranking&#148; has a different meaning, please
explain.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Relative ranking&#148; when used on page 24 of the Proxy Statement refers to the Company&#146;s TSR
over the three-year performance period relative to the TSR of each of the peer group companies over
the same three-year performance period. We will clarify this disclosure in future filings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Fiscal Year 2009, 2008 and 2007 Summary Compensation Table, page 27</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>10.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We refer you to Securities Act Release 33-8732A. Your disclosure should
be</B><U> </U><B>sufficiently precise to identify material differences in compensation
policies with respect to individual executive officers. Please explain the reasons
for the differences in the amounts of compensation awarded to the named executive
officers. For example, we note that Ms.&nbsp;Ana Dutra and Mr.&nbsp;Gary Burnison received
stock</B>
</TD>
</TR>
</TABLE>
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ms.&nbsp;Linda van Doorn<BR>
September&nbsp;4, 2009<BR>
Page: 14<BR>
&nbsp;

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&nbsp;</B></TD>
    <TD width="1%"><B>&nbsp;</B></TD>
    <TD><B>awards that were significantly higher than the amount received by the other named
executive officers. Please supplementally tell us how you plan to comply and
confirm that you will revise your disclosure accordingly in future filings.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Please see our response to Comment #5, above. We believe the expanded discussion of the
determination of base salaries, annual incentives and long-term incentives is sufficiently precise
to identify material differences in compensation policies with respect to individually named
executive officers. Other than as described in our response to Comment #5 above or in the event of
a new hire or termination of employment of a named executive officer during a fiscal year, the
Compensation and Personnel Committee follows the same policies for determining compensation for
each of our named executive officers. Further, we believe that the &#147;Fiscal Year 2009, 2008 and
2007 Summary Compensation Table&#148; complies with the requirements of Item 402(c) of Regulation&nbsp;S-K.
Nonetheless, we note that the values in the stock awards column on page 27 of the Proxy Statement
represent stock awards over various years; not just awards for fiscal 2009. Thus, the differences
among values disclosed for the named executive officers is reflective of compensation decisions
made over a series of years based on the policies described in the Proxy Statement and our response
to Comment #5 above. Ms.&nbsp;Dutra&#146;s stock award expense for fiscal 2009 is reflective primarily of
the grants she received in connection with her initial hire during fiscal 2008. Mr.&nbsp;Burnison&#146;s
stock award expense is reflective primarily of his position and relative authority, responsibility
and compensation as CEO of the Company. We will comply with the requirements of Securities Act
Release 33-8732A in future filings by way of fulsome disclosures regarding the determination of
base salaries, annual bonuses, long-term incentives and other items the Company deems material.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ms.&nbsp;Linda van Doorn<BR>
September&nbsp;4, 2009<BR>
Page: 15<BR>
&nbsp;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Per the Staff&#146;s request, we hereby acknowledge that
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Company is responsible for the adequacy and accuracy of the disclosure in the
filings;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We appreciate the Staff&#146;s responsiveness with respect to the Company&#146;s filings and look
forward to resolving any concerns the Staff may have. If you have any questions, please contact me
at (310)&nbsp;843-4164 or Ari Lanin of Gibson, Dunn and Crutcher at (310)&nbsp;552-8581.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Sincerely,<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 0px solid #000000" align="left">/s/ Michael A. DiGregorio
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Michael A. DiGregorio&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Executive Vice President and Chief Financial
Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


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</DIV>




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