THE J. M. SMUCKER COMPANY

STRAWBERRY LANE

ORRVILLE, OHIO 44667-0280

 

July 14, 2008

 

 

Dear Shareholder:

 

You are cordially invited to attend The J. M. Smucker Company’s Annual Meeting of Shareholders at 11:00 a.m., Eastern Daylight Time, on Thursday, August 21, 2008, in Fisher Auditorium at the Ohio Agricultural Research and Development Center, 1680 Madison Avenue, Wooster, Ohio 44691. A Notice of the Annual Meeting and the proxy statement follow. Please review this material for information concerning the business to be conducted at the annual meeting and the nominees for election as Directors.

 

If you were a shareholder of record as of the close of business on June 23, 2008, you will also find enclosed a proxy card or cards and an envelope in which to return the card(s). Your vote is very important. Whether or not you plan to attend the annual meeting, please complete, sign, date, and return your enclosed proxy card(s), or vote over the telephone, if applicable, or the Internet, at your earliest convenience. This will ensure representation of your common shares at the annual meeting if you are unable to attend. You may, of course, withdraw your proxy and change your vote prior to or at the annual meeting by following the steps described in the proxy statement. For more information concerning voting by proxy, please see the section of the proxy statement entitled “Questions and Answers About the Annual Meeting and Voting.”

 

Sincerely,

 

 

 

THE J. M. SMUCKER COMPANY

 

STRAWBERRY LANE

ORRVILLE, OHIO 44667-0280

 

NOTICE OF 2008 ANNUAL MEETING OF SHAREHOLDERS

 

 

Vice President, General Counsel and Secretary

 

Orrville, Ohio, July 14, 2008

 

 

THE J. M. SMUCKER COMPANY

 

PROXY STATEMENT

FOR THE ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON AUGUST 21, 2008

 

TABLE OF CONTENTS

 

THE J. M. SMUCKER COMPANY

 

STRAWBERRY LANE

ORRVILLE, OHIO 44667-0280

 

PROXY STATEMENT

FOR THE ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON AUGUST 21, 2008

 

 

The J. M. Smucker Company (the “Company”) is furnishing this document to you in connection with the solicitation by the Board of Directors of the Company (the “Board”) of the enclosed form of proxy for its August 21, 2008 annual meeting. In addition to solicitation by mail, the Company may solicit proxies in person, by telephone, facsimile, or e-mail. Also, the Company has engaged a professional proxy solicitation firm, D.F. King & Co., Inc., to assist it in soliciting proxies. The Company will pay a fee of approximately $7,000, plus expenses, for its services and will bear all costs of the proxy solicitation.

 

The Company pays for the preparation and mailing of the Notice of Annual Meeting and proxy statement, and the Company has also made arrangements with brokerage firms and other custodians, nominees, and fiduciaries for the forwarding of this proxy statement and other annual meeting materials to the beneficial owners of its common shares at its expense. This proxy statement is dated July 14, 2008, and is first being mailed to the Company’s shareholders on or about July 14, 2008.

 

 

What is a proxy?

 

A proxy is your legal designation of another person (“proxy”) to vote the common shares you own. By completing and returning the enclosed proxy card(s), which identifies the individuals or trustees authorized to act as your proxy, you are giving each of those individuals authority to vote your common shares as you indicate on the proxy card(s).

 

Why did I receive more than one proxy card?

 

You will receive multiple proxy cards if you hold your common shares in different ways (e.g., trusts, custodial accounts, joint tenancy) or in multiple accounts. If your common shares are held by a broker or bank (i.e., in “street name”), you will receive your proxy card and other voting information from your broker, bank, trust or other nominee and should return your proxy card to them pursuant to their directions. You should complete, sign, date, and return your proxy card(s), or vote by telephone, if applicable, or by using the Internet as described in each proxy card you receive.

 

What is the record date and what does it mean?

 

The Board established June 23, 2008 as the record date for the annual meeting of shareholders to be held on August 21, 2008. Shareholders who own common shares of the Company at the close of business on the record date are entitled to notice of and to vote at the annual meeting.

 

What is the difference between a “registered shareholder” and a “street name shareholder”?

 

These terms describe how your common shares are held. If your common shares are registered directly in your name with Computershare Investor Services, LLC (“Computershare”), the Company’s transfer agent, you

are a “registered shareholder.” If your common shares are held in the name of a brokerage, bank, trust, or other nominee as a custodian, you are a “street name shareholder.”

 

How many common shares are entitled to vote at the annual meeting?

 

As of the record date, there were 54,767,534 common shares outstanding and entitled to vote at the annual meeting.

 

How many votes must be present to hold the annual meeting?

 

A majority of the Company’s outstanding common shares as of the June 23, 2008 record date must be present in person or by proxy in order for the Company to hold the annual meeting. This majority of outstanding common shares is referred to as a quorum. For purposes of determining whether a quorum is present, each common share is deemed to entitle the holder to one vote per share. Properly signed proxies that are marked “abstain” are known as “abstentions.” Properly signed proxies that are held in street name and not voted on one or more of the items before the annual meeting, but are otherwise voted on at least one item, are known as “broker non-votes.”

 

Both abstentions and broker non-votes are counted as present for the purpose of determining the presence of a quorum. Abstentions are also counted as shares present and entitled to be voted. Broker non-votes, however, are not counted as shares present and entitled to be voted with respect to the matter on which the broker has expressly not voted. Abstentions and broker non-votes will not affect the outcome of Proposal 1. With regard to Proposal 2, abstentions and broker non-votes will have the same effect as votes against the proposal.

 

Who will count the votes?

 

A representative from Computershare will determine if a quorum is present and tabulate the votes and serve as the Company’s inspector of election at the annual meeting.

 

What vote is required to approve each proposal?

 

Proposal 1:  The three candidates receiving the greatest number of votes, based upon one vote for each common share owned as of the record date, will be elected. Votes withheld in respect of any candidate in the election of Directors will have no impact on the election.

 

Proposal 2:  The affirmative vote of the holders of at least a majority of the total voting power of the Company, based upon one vote for each common share owned as of the record date, is necessary to ratify the Audit Committee’s appointment of the Independent Registered Public Accounting Firm (the “Independent Auditors”).

 

How do I vote my common shares?

 

If you are a registered shareholder, you can vote your proxy in one of the following manners:

 

 

Please refer to the specific instructions set forth on the enclosed proxy card(s).

 

If you are a street name shareholder, your broker, bank, trustee or other nominee will provide you with materials and instructions for voting your common shares.

Can I change my vote after I have mailed in my proxy card(s)?

 

Yes, if you are a registered shareholder, you may revoke your proxy in any one of the following ways:

 

 

Your mere presence at the annual meeting will not revoke your proxy. You must take affirmative action in order to revoke your proxy.

 

If you are a street name shareholder, you must contact your broker, bank, trust or other nominee in order to revoke your proxy. If you wish to vote in person at the annual meeting, you must contact your broker and request a document called a “legal proxy.” You must bring this legal proxy obtained from your broker, bank, trust or other nominee to the annual meeting in order to vote in person.

 

What are the Board’s recommendations on how I should vote my common shares?

 

The Board recommends that you vote your common shares as follows:

 

Proposal 1 — FOR the election of the three Board nominees with terms expiring at the 2011 Annual Meeting of Shareholders.

 

Proposal 2 — FOR the ratification of the Audit Committee’s appointment of Ernst & Young LLP as the Independent Registered Public Accounting Firm of the Company for the 2009 fiscal year.

 

Who may attend the annual meeting?

 

All shareholders are eligible to attend the annual meeting; however, only those shareholders of record at the close of business on June 23, 2008 are entitled to vote at the annual meeting.

 

Do I need an admission ticket to attend the annual meeting?

 

Tickets are not required to attend the annual meeting. If you are a registered shareholder, properly mark your proxy card to indicate that you will be attending the annual meeting. If you hold your shares in nominee or you are a street name shareholder, you are required to bring evidence of share ownership to the annual meeting (e.g., account statement, broker verification).

 

What type of accommodations can the Company make at the annual meeting for people with disabilities?

 

The Company can provide reasonable assistance to help you participate in its annual meeting if you notify the Corporate Secretary about your disability and how you plan to attend. Please call or write the Corporate Secretary at least two weeks before the annual meeting at 330-684-3838 or Strawberry Lane, Orrville, Ohio 44667.

 

Does the Company have cumulative voting?

 

Under Ohio law, all of the common shares may be voted cumulatively in the election of Directors if a shareholder of record wishing to exercise cumulative voting rights provides written notice to the Company’s President, one of its Vice Presidents, or the Corporate Secretary at least 48 hours before the time of the annual meeting. The notice must state that the shareholder desires that the voting at the election be cumulative. Also, an announcement of the Company’s receipt of the shareholder’s intent to exercise cumulative voting rights

must be made when the annual meeting is convened by the Chairman or the Corporate Secretary or by or on behalf of the shareholder giving the notice. Under cumulative voting, the number of votes to which each shareholder otherwise is entitled is multiplied by the number of Directors to be elected, and the shareholder then may cast that aggregate number of votes all for one nominee, or may divide them out among the nominees as the shareholder deems appropriate.

 

The Company intends to vote all proxies solicited whether or not there is cumulative voting at the annual meeting. In the event that there is cumulative voting, unless a shareholder provides contrary instructions on his, her or its proxy card, all votes represented by proxy cards will be divided evenly among the nominees named in this document, unless it appears that voting in that way would not be effective to elect all of those nominees. In that case, the votes represented by proxies will be cast as recommended by the Board at the annual meeting so as to maximize the number of nominees elected.

 

Unless instructed otherwise, the proxies intend to vote FOR the election of Vincent C. Byrd, R. Douglas Cowan, and Elizabeth Valk Long, as Directors, each for a term of three years. Messrs. Vincent C. Byrd and R. Douglas Cowan, and Ms. Elizabeth Valk Long, comprise the class of Directors whose term of office expires this year and whose members are standing for re-election at the 2008 annual meeting.

 

In the event of the death or inability to act of any of the nominees for Directors, the proxy, with respect to such nominee or nominees, will be voted for such other person or persons as the Board may recommend. The Company has no reason to believe that the persons listed as nominees for Directors will be unable to serve.

 

The members of the Board, including those who are nominees for election, with information as to each of them based on data furnished to the Company by these persons as of June 30, 2008, are as follows:

 

Nominees For Election as Directors Whose Proposed Terms Would Expire at the 2011 Annual Meeting

 

 

 

 

Corporate Governance Guidelines

 

The Company’s corporate governance guidelines are designed to formalize the Board’s role and to confirm its independence from management and its role of aligning management and Board interests with the interests of shareholders. The corporate governance guidelines provide in pertinent part that:

 

 

The Company’s corporate governance guidelines are posted on its website at www.smuckers.com and a copy will be provided free of charge to any shareholder submitting a written request to the Corporate Secretary, The J. M. Smucker Company, Strawberry Lane, Orrville, Ohio 44667.

 

Shareholder Recommendations for Director Nominees

 

The Nominating and Corporate Governance Committee is responsible for identifying and recommending qualified candidates to the Board for nomination. The Committee considers all suggestions for membership on the Board, including nominations made by the Company’s shareholders. Shareholders’ nominations for Directors must be made in writing, include the nominee’s written consent to the nomination and detailed background information sufficient for the Committee to evaluate the nominee’s qualifications. Nominations should be submitted to the Corporate Secretary, The J. M. Smucker Company, Strawberry Lane, Orrville, Ohio 44667. The Corporate Secretary will then forward nominations to the Chair of the Nominating and Corporate Governance Committee. All recommendations must include qualifications which meet, at a minimum, the following criteria:

 

 

When filling a vacancy on the Board, the Nominating and Corporate Governance Committee will consider such additional factors as it deems appropriate. The Company does not currently pay fees to any third party to assist in identifying and evaluating candidates for the Board.

Director Independence

 

The Company requires that a majority of its Directors be “independent” as defined by the rules of the NYSE and the SEC. The Company may, in the future, amend its corporate governance guidelines to establish such additional criteria as the Board determines to be appropriate. The Board makes a determination as to the independence of each Director on an annual basis. The Board has determined that all of the following seven nonemployee Directors are independent Directors: R. Douglas Cowan, Kathryn W. Dindo, Paul J. Dolan, Nancy Lopez Knight, Elizabeth Valk Long, Gary A. Oatey, and William H. Steinbrink.

 

In general, “independent” means that a Director has no material relationship with the Company or any of its subsidiaries. The existence of a material relationship is determined upon a review of all relevant facts and circumstances and generally is a relationship that might reasonably be expected to compromise the Director’s ability to maintain his or her independence from management of the Company.

 

The Board considers the issue of materiality from the standpoint of the persons or organizations with which the Director has an affiliation, as well as from the standpoint of the Director.

 

The following standards will be applied by the Board in determining whether individual Directors qualify as “independent” under the rules of the NYSE. References to the Company include its consolidated subsidiaries.

 

 

In its review and application of the criteria used to determine independence, the Board considered the fact that the Company does business with organizations directly or indirectly affiliated with Ms. Dindo and Messrs. Dolan and Cowan, and affirmatively determined that the amounts paid to the entities affiliated with these individuals do not meet the threshold which would create an issue under the standards for determining independence.

 

The value of the services and electricity purchased from FirstEnergy Corp., from where Ms. Dindo officially retired in 2007, and its affiliates in fiscal year 2008 was approximately $1,934,000 and does not exceed the greater of $1,000,000 or 2% of FirstEnergy Corp.’s consolidated gross revenues.

 

The value of advertising and promotional activities sponsored with the Cleveland Indians’ organization, of which Mr. Dolan is president and part owner, in fiscal year 2008 was approximately $295,000 and does not exceed the greater of $1,000,000 or 2% of the Cleveland Indians’ consolidated gross revenues.

 

The value of the services purchased from The Davey Tree Expert Company, of which Mr. Cowan is chairman, in fiscal year 2008 was less than $2,000 and does not exceed the greater of $1,000,000 or 2% of The Davey Tree Expert Company’s consolidated gross revenues.

 

Communications with the Board

 

Interested parties who wish to communicate with members of the Board as a group, with nonemployee Directors as a group, or with individual Directors, may do so by writing to Board Members c/o Corporate Secretary, The J. M. Smucker Company, Strawberry Lane, Orrville, Ohio 44667. The Directors have requested that the Corporate Secretary act as their agent in processing any communications received. All communications that relate to matters that are within the scope of responsibilities of the Board and its Committees will be forwarded to the appropriate Directors. Communications relating to matters within the responsibility of one of the Committees of the Board will be forwarded to the Chair of the appropriate Committee. Communications relating to ordinary business matters are not within the scope of the Board’s responsibility and will be forwarded to the appropriate officer at the Company. Solicitations, advertising materials, and frivolous or inappropriate communications will not be forwarded.

 

Policy on Ethics and Conduct

 

Ethics is one of the Company’s Basic Beliefs and is fundamental to the Company’s business. The Company emphasizes that ethical conduct is vital to ensure successful, sustained business relationships.

 

The Company’s Policy on Ethics and Conduct applies to all employees and Directors of the Company, its subsidiaries, and its affiliates. The policy details specifics concerning the manner in which employees and Directors are expected to conduct themselves and imposes on each person the responsibility for making ethical choices.

 

Any changes to this policy and any waivers of this policy for or on behalf of any Director, executive officer, or senior financial officer of the Company must be approved by the Board, or by a Committee of the Board, to which authority to issue such waivers has been delegated by the Board. Any such waivers will be promptly disclosed to the public, as required by applicable law. Waivers of this policy for any other employee may be made only by an authorized officer of the Company. Waivers of the Policy on Ethics and Conduct will be disclosed on the Company’s website at www.smuckers.com.

 

The Policy on Ethics and Conduct is posted on the Company’s website at www.smuckers.com and a copy will be provided free of charge to any shareholder submitting a written request to the Corporate Secretary, The J. M. Smucker Company, Strawberry Lane, Orrville, Ohio 44667.

 

The Board has established means for employees to report violations of the policy either to their manager or supervisor, or to the General Counsel. Reports to the General Counsel may be made in writing, by telephone, or in person, and may be submitted anonymously through the Company’s toll-free telephone hotline.

 

Board Meetings

 

During fiscal year 2008, there were ten meetings of the Board. All Directors are required to, and did, attend at least 75% of the total number of Board and Committee meetings for which they were eligible. The Company has not adopted a formal policy requiring Directors to attend the annual meeting of shareholders, but all Directors attended the 2007 annual meeting. The Board has a Nominating and Corporate Governance Committee, an Executive Compensation Committee, and an Audit Committee.

 

All of the Committees are comprised entirely of independent Directors in accordance with the NYSE listing standards. Charters for each Committee are posted on the Company’s website at www.smuckers.com and a copy will be provided free of charge to any shareholder submitting a written request to the Corporate Secretary, The J. M. Smucker Company, Strawberry Lane, Orrville, Ohio 44667. The table below shows current members of each of the Committees.

 

 

Director Compensation

 

Directors who are employees of the Company receive no compensation for their services as a Director. The Company uses a combination of cash and stock-based compensation to attract and retain nonemployee Directors to serve on the Board. At its January 2008 meeting, the Executive Compensation Committee and the Board approved an increase in the compensation to be paid to its nonemployee Directors. This increase in compensation paid to nonemployee Directors became effective May 1, 2008, and was based on a review of director compensation conducted by the Company’s outside compensation consultant, Towers Perrin, which was presented to the Executive Compensation Committee at its January 2008 meeting. This review of director compensation was performed concurrently with the Company’s biannual range review of executive compensation. At its January 2008 meeting, the Chair of the Executive Compensation Committee requested that Towers Perrin begin reviewing director compensation on an annual basis in order to maintain more current information on director compensation trends.

 

The compensation to be paid to the Company’s nonemployee Directors, which became effective May 1, 2008, is as follows:

 

Fiscal Year 2009 (May 1, 2008 to April 30, 2009)

 

The annual grant of deferred stock units having a value of $80,000 will be issued out of The J. M. Smucker Company 2006 Equity Compensation Plan (the “2006 Plan”). The 2006 Plan was approved by shareholders at the 2006 annual meeting. This annual deferred stock unit award replaced the annual award of deferred stock units having a value of $60,000. The deferred stock units vest immediately upon grant and are entitled to dividends in an amount paid to all shareholders. These dividends are reinvested in additional deferred stock units.

 

During fiscal year 2009, nonemployee Directors may elect to receive a portion of their annual retainer and committee fees in the form of deferred stock units. Fees will be deferred under the Nonemployee Director Deferred Compensation Plan, which was adopted by the Board effective January 1, 2007 (the “Nonemployee Director Deferred Compensation Plan”). All deferred stock units, together with dividends credited on those deferred stock units, will be paid out in the form of common shares subsequent to termination of service as a nonemployee Director.

 

During the period from May 1, 2007, through April 30, 2008, nonemployee Directors were eligible to receive the following compensation:

 

Fiscal Year 2008 (May 1, 2007 to April 30, 2008)

 

 

During fiscal year 2008, nonemployee Directors could have elected to receive a portion of their annual retainer and committee fees in the form of deferred stock units. Fees were deferred under the Nonemployee Director Deferred Compensation Plan. All deferred stock units, together with dividends credited on those deferred stock units, are paid out in the form of common shares subsequent to termination of service as a nonemployee Director.

 

The Board has not established minimum amounts of share ownership required to be held by nonemployee Directors. The Company has long maintained that the ownership of the Company’s common shares will be a matter of conscience for each Director and encourages each Director to own a reasonable number of the Company’s common shares.

 

The following table reflects compensation earned by Directors in fiscal year 2008.

 

2008 Director Compensation

 

 

 

 

 

Executive Sessions and Presiding Director

 

In its fiscal year 2008, the Board held three regularly scheduled executive sessions in which only the independent Directors were present. As provided in the Company’s corporate governance guidelines, these meetings were chaired by Ms. Long, the Chair of the Executive Compensation Committee. In fiscal year 2009, the Chair of the Audit Committee will chair the executive sessions. In fiscal year 2010, the Chair of the Nominating and Corporate Governance Committee will chair the executive sessions. Executive sessions of the Board are held in conjunction with regularly scheduled meetings of the Board. There is no executive session held on the day of the annual meeting, unless specifically requested by a Director.

 

Nominating and Corporate Governance Committee

 

The Nominating and Corporate Governance Committee has three members and met three times during fiscal year 2008. The principal functions of this Committee include:

 

 

 

The Nominating and Corporate Governance Committee charter is posted on the Company’s website at www.smuckers.com and is available free of charge to any shareholder submitting a written request to the Corporate Secretary, The J. M. Smucker Company, Strawberry Lane, Orrville, Ohio 44667. The Nominating and Corporate Governance Committee believes this charter is an accurate and adequate statement of the Committee’s responsibilities and the Committee reviews this charter on an annual basis to confirm that it continues to be an accurate and adequate statement of such responsibilities.

 

Executive Compensation Committee

 

The Executive Compensation Committee has three members and met four times during fiscal year 2008. The principal functions of this Committee include:

 

 

The Executive Compensation Committee operates under a written charter, which is attached as Annex A to this proxy statement and is posted on the Company’s website at www.smuckers.com. A copy will be provided free of charge to any shareholder submitting a written request to the Corporate Secretary, The J. M. Smucker Company, Strawberry Lane, Orrville, Ohio 44667. The Executive Compensation Committee believes the charter is an accurate and adequate statement of the Committee’s responsibilities. The Committee reviews this charter on an annual basis to confirm that it continues to be an accurate statement of such responsibilities. More information about the Executive Compensation Committee and related topics is provided in the Compensation Discussion and Analysis beginning on page 19.

 

Audit Committee

 

The Audit Committee has three members and met eight times during fiscal year 2008, including three telephonic meetings to review the Company’s quarterly filings on Form 10-Q. The principal functions of this Committee include:

 

 

 

As part of her responsibilities, the Chair of the Audit Committee met quarterly with the Company’s management and Independent Auditors to review earnings release information.

 

In addition, the Audit Committee reviewed the financial literacy of each of its members, as required by the listing standards of the NYSE, and determined that each of its members meet the criteria established by the NYSE. The Audit Committee also reviewed the definition of an “audit committee financial expert” as set forth in the Sarbanes-Oxley Act of 2002 and determined that two of its members, Kathryn W. Dindo and R. Douglas Cowan, satisfy the criteria of an audit committee financial expert under this Act. The Board adopted a resolution at its April 2008 meeting designating Ms. Dindo and Mr. Cowan as “financial experts,” within the meaning of the Sarbanes-Oxley Act of 2002.

 

A more detailed report of the Audit Committee is set forth below under the heading “Report of the Audit Committee.” The Audit Committee operates under a written charter, which is posted on the Company’s website at www.smuckers.com and is available free of charge to any shareholder submitting a written request to the Corporate Secretary, The J. M. Smucker Company, Strawberry Lane, Orrville, Ohio 44667. The Audit Committee believes the charter is an accurate and adequate statement of the Audit Committee’s responsibilities. The Audit Committee reviews this charter on an annual basis to confirm that it continues to be an accurate and adequate statement of such responsibilities.

 

The Audit Committee is composed of three independent Directors, each of whom satisfies the independence requirement of Rule 10A-3 under the Securities Exchange Act of 1934. The Audit Committee serves as the primary communication link between the Board as the representative of the shareholders, the Company’s Independent Auditors, Ernst & Young LLP, and the Company’s internal auditors. The Company’s management has the primary responsibility for financial statements and the reporting process, including the systems of internal control.

 

In fulfilling its responsibilities during the fiscal year, the Audit Committee reviewed with management the financial statements and related disclosures included in the Company’s quarterly reports on Form 10-Q, and the audited financial statements and related financial statement disclosures included in its Annual Report on Form 10-K for the fiscal year ended April 30, 2008. Also, the Audit Committee reviewed with the Independent Auditors their judgments as to both the quality and the acceptability of the Company’s accounting policies. The Audit Committee’s review with the Independent Auditors included a discussion of other matters required under U.S. Generally Accepted Auditing Standards, including those matters required by the Statement on Auditing Standards No. 61, Communication With Audit Committees, and by the Sarbanes-Oxley Act of 2002.

 

The Audit Committee received the written disclosures from the Independent Auditors required by the Independence Standards Board Statement No. 1, and has discussed those disclosures with the Independent Auditors. The Audit Committee also has considered the compatibility of non-audit services with the Independent Auditors’ independence.

 

The Audit Committee discussed with the Company’s internal auditors and Independent Auditors the overall scope and plans for their respective audits and reviewed the Company’s plans for compliance with the management certification requirements pursuant to Section 404 of the Sarbanes-Oxley Act of 2002. The Audit Committee met with the internal auditors and Independent Auditors to discuss the results of the auditors’ examinations, their evaluation of the Company’s internal controls, including a review of the disclosure control process, as well as the overall quality of the Company’s financial reporting. The Audit Committee, or the Committee Chair, also preapproved services provided by Ernst & Young LLP during fiscal year 2008.

 

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2008. The Audit Committee authorized the appointment of Ernst & Young LLP as the Company’s Independent Auditors for the 2009 fiscal year.

 

AUDIT COMMITTEE

 

Kathryn W. Dindo, Chair

R. Douglas Cowan

Elizabeth Valk Long

 

The following table summarizes the aggregate fees, including out of pocket expenses, billed by Ernst & Young LLP for the years ended April 30, 2008 and 2007:

 

 

 

 

The Audit Committee charter, as well as the policies and procedures adopted by the Audit Committee, require that all audit and permitted non-audit services provided by the Independent Auditors be preapproved by the Audit Committee. These services may include audit services, audit-related services, tax services and, in limited circumstances, other services. The Audit Committee’s preapproval identifies the particular type of service and is subject to a specific engagement authorization.

 

Should it be necessary to engage the Independent Auditors for additional, permitted services between scheduled Committee meetings, the Chair of the Audit Committee has been delegated the authority to approve up to $200,000 for additional services for a specific engagement. The Committee Chair then reports such preapproval at the next meeting of the Audit Committee. The approval policies and procedures of the Committee do not include delegation of the Audit Committee’s responsibility to the Company’s management.

 

All of the services described above were approved by the Audit Committee or the Committee Chair before Ernst & Young LLP was engaged to render the services or otherwise in accordance with the approval process adopted by the Audit Committee.

 

The Company’s Policy on Ethics and Conduct has established procedures for confidential, anonymous complaints by employees and from third parties received by the Company regarding accounting, internal accounting controls or auditing matters. The Policy on Ethics and Conduct is posted on the Company’s website at www.smuckers.com, and is available free of charge to any shareholder submitting a written request to the Corporate Secretary, The J. M. Smucker Company, Strawberry Lane, Orrville, Ohio 44667.

 

The Audit Committee has appointed Ernst & Young LLP as the Company’s Independent Registered Public Accounting Firm for the fiscal year ending April 30, 2009. The Audit Committee has requested that the shareholders ratify this decision. Ernst & Young LLP has served as the Company’s Independent Auditors since 1955.

 

A representative of Ernst & Young LLP will be present at the annual meeting with an opportunity to make a statement if so desired and to respond to appropriate questions with respect to that firm’s examination of the Company’s financial statements and records for the fiscal year ended April 30, 2008.

 

Although shareholder ratification is not required under the laws of the State of Ohio, we are submitting the appointment of Ernst & Young LLP to the Company’s shareholders for ratification at the annual meeting as a matter of good corporate practice and in order to provide a means by which shareholders may communicate their opinion to the Audit Committee.

 

 

 

Compensation Discussion and Analysis

 

The Company’s Executive Compensation Committee regularly reviews the Company’s compensation philosophy and objectives. The Executive Compensation Committee is also responsible for reviewing and approving compensation for the Company’s executive officers on an annual basis. A description of the Executive Compensation Committee’s responsibilities is set forth in detail in its charter which may be accessed on the Company’s website at www.smuckers.com.

 

Set forth below is a detailed discussion of the Company’s compensation program for its executive officers organized as follows:

 

 

 

The Company’s compensation philosophy is that compensation for all employees, including its executive officers should be:

 

 

The Company has designed its compensation programs to reflect each of these elements. The performance-based incentives, (comprised of corporate performance, individual performance and, in some cases, the performance of the business and operations units), seek to reward both short-term, or annual, as well as long-term results and to align the interests of the Company’s executive officers and other participants with the interests of the Company’s shareholders.

 

 

Company executive officers receive a compensation package which consists of the following components:

 

Cash Components

 

 

Equity Component

 

 

Health Benefits and Pension Benefits

 

 

Other Benefits

 

 

 

The Company believes the compensation paid to executive officers must be competitive enough to attract and retain qualified individuals and must be fair and equitable. The Company also believes that there are certain non-financial, intangible elements of the overall compensation program which provide a positive work environment and have value for the Company’s employees. The commitment to one another as valued employees and the adherence to the Company’s Basic Beliefs of Quality, People, Ethics, Growth, and Independence are reflected in how we conduct ourselves and the pride we take in a job well done.

 

In an effort to provide competitive, yet fair and equitable base salaries, salary ranges are determined using published and widely available salary market data from a broad cross-section of companies. The market data used by the Executive Compensation Committee to support compensation decisions for the Company’s officers include market data for hundreds of companies that participate in three major executive compensation surveys. The Company does not select specific peer companies for this purpose. The three survey databases used for the most recent pay analysis conducted by Towers Perrin include the 2007 U.S. CDB General Industry Executive Database (“Towers Perrin”); the 2007/2008 Survey Report on Top Management Compensation (“Watson Wyatt”); and the 2007 Mercer Benchmark Database — Executive Survey Report (“Mercer”) (collectively, the “Compensation Study”). The information for all companies reporting data for a specific job from the Towers Perrin and Mercer surveys, and for all non-durable goods companies from the Watson Wyatt survey is used when the Executive Compensation Committee reviews compensation. This data is then size-adjusted to reflect the Company’s revenue and, where appropriate, the size of a specific business area.

 

Salary ranges are determined in the same manner for each salaried employee of the Company, including each executive officer. The actual base salary paid to each executive officer is designed to fall within the range established by the Company and to also reflect the experience of the executive officer and the scope of his or her responsibility.

 

With respect to the Co-CEOs, two job classifications are used to arrive at an appropriate salary range; that of a chief executive officer position, and a chief operating officer position. The data for these two positions is averaged for use by the Executive Compensation Committee in making decisions about the pay for the Co-CEOs.

Positions for all salaried employees, including the officers, are assigned to salary grades with corresponding salary ranges. Decisions regarding salary grades (as well as target MIP opportunities and Restricted Stock Award opportunities as a percentage of base salary) are generally made every two years. The Executive Compensation Committee targets all compensation relative to a range (plus or minus 15%) around the 50^th percentile of the market data (“Initial Target Range”) to determine the applicable salary grade. Next, the Executive Compensation Committee reviews each officer’s specific role, responsibilities and experience. The Executive Compensation Committee also reviews considerations of internal pay equity among the members of the officer group, considering such factors as experience, leadership responsibility within the officer group, and roles and responsibilities with the Company, including the size of the business group managed by the officer. Internal equity considerations result in both upward and downward changes from the market median data.

 

Additionally, to ensure that total direct compensation, including base salary, annual incentives and long term incentives, paid to executive officers is fair based on role, performance, tenure in position and overall tenure with the Company, the Company, with assistance from Towers Perrin, regularly benchmarks all elements of its compensation program using the Compensation Study.

 

The Company uses the Initial Target Range as a goal for assessing the pay for each salaried employee, including the Co-CEOs, Chief Financial Officer and the three other most highly compensated executive officers (“Named Executive Officers” or “NEOs”). The most recent Compensation Study indicated that compensation for the NEOs compared to the market as follows:

 

Base salary:

 

 

Target total cash compensation (base salary plus the target opportunity under the MIP):

 

 

Target total direct compensation (total cash compensation plus the target value of performance Restricted Stock Awards):

 

 

When approving compensation for executive officers, the Executive Compensation Committee also considers:

 

 

Each April, the Executive Compensation Committee requests that management submit salary recommendations for executive officers, other than for the Co-CEOs, using all of the considerations outlined above. These recommendations generally result in salary increases for the executive officers that are, on average, aligned with the Company’s salary increase budget for other salaried employees. The Executive

Compensation Committee reviews all of these performance considerations with no single factor necessarily weighted more heavily than another. As noted above, management does not submit a recommendation regarding salary increases for the Co-CEOs.

 

In setting and approving fiscal year 2008 compensation for the Co-CEOs, the Executive Compensation Committee holds the Co-CEOs responsible for ensuring that each of the objectives set forth above are achieved and each is assessed in their respective roles in regards to:

 

 

At the Executive Compensation Committee’s April 2008 meeting, the Executive Compensation Committee with input from the Nominating and Corporate Governance Committee, concluded that the Co-CEOs continue to meet and exceed these performance measures. The Executive Compensation Committee considered these factors when determining the base salary and MIP awards for the Co-CEOs.

 

As noted in the Summary Compensation Table on page 31 of the proxy, the Company’s Co-CEOs received identical base salaries, MIP awards, and Restricted Stock Awards. The differences in amounts reported as compensation for these individuals reflect the different impact of their respective stock-based awards under SFAS 123R, and the differences between the two executives’ credited years of service under The J. M. Smucker Company Employees’ Retirement Plan (the “Qualified Plan”) and The J. M. Smucker Company Top Management Supplemental Retirement Benefit Plan, a non-qualified supplemental retirement plan (the “SERP”).

 

The Executive Compensation Committee has retained Towers Perrin as an outside consultant to assist the Executive Compensation Committee, as requested, to fulfill various aspects of its charter. Towers Perrin reports directly to the Executive Compensation Committee and also participates in executive sessions with the Executive Compensation Committee, without members of the Company’s management present. The Co-CEOs, the Director of Human Resources, and the Corporate Secretary also attend the non-executive portions of the Executive Compensation Committee meetings. Pursuant to its governance model, the Executive Compensation Committee makes all decisions concerning pay and benefits for the Company’s officers, and the Executive Compensation Committee relies on Towers Perrin for advice, data and market information regarding executive compensation. During fiscal year 2008, Towers Perrin regularly attended Executive Compensation Committee meetings and assisted the Executive Compensation Committee with:

 

 

The Executive Compensation Committee has authorized Towers Perrin staff members working on the Executive Compensation Committee’s behalf to interact with Company management, as needed, to obtain or confirm information for presentation to the Executive Compensation Committee. Further, the Executive

Compensation Committee is kept apprised of other work performed by Towers Perrin on behalf of the Company. In fiscal year 2008, this additional work for the Company included calculation of restricted stock grants, review of proxy materials, review of plans for compliance with 409A, range review for salaried positions other than NEOs, retirement plan design, the SERP redesign, and development of compensation and retirement benefits communication material.

 

 

The Company’s MIP is performance-based and is designed to reward key managers, including executive officers, for their contribution to the Company based on clear, measurable criteria.

 

After the end of each fiscal year, the Executive Compensation Committee reviews management’s recommendations for MIP bonuses (other than a recommendation for the Co-CEOs for whom management makes no recommendation). The Executive Compensation Committee evaluates the following criteria and information in approving MIP awards for executive officers:

 

 

“Target awards” for executive officers under the MIP are also approved by the Executive Compensation Committee and represent a percentage of each executive officer’s base salary. The appropriate MIP target award percentage for each executive officer is reviewed regularly by the Executive Compensation Committee with input from Towers Perrin. The most recent Compensation Study indicated the MIP target award percentages were generally at the median of the survey group. Executive officers’ MIP target awards range from 30% to 80% of base salary depending on the responsibilities and experience of the executive officer. For fiscal year 2008, the most an executive officer is eligible to receive in any one fiscal year is twice the MIP target award (i.e., between 60% to 160% of base salary).

 

Participants in the MIP receive a percentage of their target award based on the Company, business unit, or plant operation performance as shown in the following table:

 

In the event performance is between the ranges set forth in the matrix above, the Executive Compensation Committee determines the percentage of the award that is earned by mathematical interpolation and for each increase of 1% above the target performance level, the percentage of target award earned will increase by 10%.

 

Additionally, if an executive officer is part of a specific business area or plant operation, 50% of the MIP target award is generally tied to the performance of the business area or plant operation. The individual performance component of the Company’s MIP involves subjective evaluation by the Executive Compensation Committee of the executive officers based on the following criteria:

 

 

A chart illustrating this allocation is as follows:

 

 

The MIP awards for the Co-CEOs are based on the same corporate performance standards as used for other corporate participants in the MIP; however, no recommendation is made by management concerning the individual awards for the Co-CEOs. The MIP awards for each of the Co-CEOs are determined by the Executive Compensation Committee based on its evaluation of the criteria outlined above.

Set forth below is an example of the calculation of an MIP award for a corporate participant:

 

Example: Executive officer with corporate responsibilities, an annual base salary of $200,000, and a MIP target award of 50% of base salary, would receive the following MIP awards based on achievement of target performance for all categories as shown below:

 

 

Specifically, with respect to fiscal year 2008, the Executive Compensation Committee approved the corporate non-GAAP earnings per share goal of $2.99. In order to receive 100% of the target opportunity under the corporate component of the MIP, the Company had to achieve non-GAAP earnings per share of $2.99. For its fiscal year 2008 the Company achieved non-GAAP earnings per share of $3.15, representing 105% of the target amount. As a result of exceeding the earnings target, the corporate performance portion of the awards was paid at 150% of the target award for all participants. The MIP for fiscal year 2008 is as shown in the following table:

 

Management Incentive Plan
Corporate Performance Goals for
Fiscal Year 2008

 

 

For fiscal year 2008, all of the executive officers included in the Summary Compensation Table were participants in MIP and the weighting of the Target Award for each executive officer is set forth in the table below:

 

Management Incentive Plan
Weighting of Target Award
For NEOs
Fiscal Year 2008

 

Although the Company does not generally provide specific guidance on its earnings estimates, it has consistently maintained that it expects earnings per share to grow at a long-term average of 8% per year. The Company believes that the established performance targets required participants, including executive officers, to perform at a high level in order to achieve the 1999 through 2008 target performance levels. During this ten-year period, the Company achieved performance in excess of the target level seven times, achieved the maximum performance level once, and failed to achieve the target performance twice. During the same time period, the Company’s annual compounded earnings per share growth rate was approximately 10%. Generally, the Executive Compensation Committee sets the minimum, target and maximum levels such that the relative difficulty of achieving the target level is consistent from year to year.

 

 

The Company’s long-term, performance-based compensation is stock based and is designed to align the interests of management with the interests of the Company’s shareholders. The goals of the Company’s long-term incentive compensation program are to:

 

 

Restricted Stock Awards are issued under the 2006 Plan. The Company grants restricted stock units (in lieu of restricted shares) to certain participants who reside outside the U.S., in order to comply with local laws and to provide favorable tax treatment to the foreign recipients. Discussion in this Compensation Discussion and Analysis relating to restricted shares also applies to the limited awards of restricted stock units granted outside the U.S.

 

The essential features of the Restricted Stock Awards are as follows:

 

 

 

 

Restricted Stock Awards, rounded to the nearest five shares, are reviewed and approved by the Executive Compensation Committee in June based on the previous fiscal year’s performance. Participants must be employed by the Company at the time of the Restricted Stock Award to receive shares. For all executive officers, except the Co-CEOs, the Company initially determines the dollar value of the restricted shares that has been earned and such determination is approved by the Executive Compensation Committee. The stock price used to determine the number of shares to be awarded is based on the average of the closing stock prices for the final five trading days during fiscal year 2008 and the first five trading days in fiscal year 2009.

 

In order to qualify the Restricted Stock Awards made to the Co-CEOs as performance-based awards under Section 162(m) of the Internal Revenue Code (the “IRC”), the Company grants performance units to the Co-CEOs in June of each year, which are paid in the form of restricted shares (like the other executive officers) at the end of the fiscal year in which they were granted, assuming the applicable performance standards relating to earnings per share were met. For grants made in fiscal year 2009, the Company will grant performance units to the Co-CEOs, which will also be payable in Restricted Stock Awards to the extent that performance goals are achieved. Management makes no recommendation regarding long-term incentive awards for the Co-CEOs, but the Executive Compensation Committee, after considering input from Towers Perrin, makes grants to the Co-CEOs based on the same performance standards as used for the other participants.

 

Following the end of fiscal year 2008, the Executive Compensation Committee determined the number of performance units that were earned. The performance units were paid in the form of shares of restricted stock, which restricted shares for the Co-CEOs were issued out of shares available under the 2006 Plan. The performance units (each worth $1) were converted to a number of restricted shares based on the average stock price for the final five trading days during fiscal year 2008 and the first five trading days in fiscal year 2009. The restricted shares earned were granted to the Co-CEOs pursuant to the same terms as the restricted shares granted to the other executive officers and are subject to a four-year vesting period. However, as with other participants, once either of the Co-CEOs reaches the age of 60 and has a minimum of 10 years of service with the Company, his restricted shares will vest immediately. Based on age and length of service, the restricted shares granted to Timothy P. Smucker and Richard K. Smucker vested upon grant. Specifically, with respect to fiscal year 2008, the Company achieved 105% of its non-GAAP earnings per share performance level resulting in a Restricted Stock Award of 112.5% of the Restricted Stock Award target.

 

 

The Company provides executive officers with health and welfare plans upon substantially the same terms as available to most other salaried employees of the Company and its domestic subsidiaries. These benefit plans include medical, dental, life, and disability insurance coverage.

 

Company executive officers participate in the Employee Stock Ownership Plan (the “ESOP”), the Qualified Plan, and The J. M. Smucker Company Employee Savings Plan (the “401(k) Plan”). Participation in these plans is an important component of the overall compensation package for all Company employees, including its executive officers. Substantially all of the Company’s U.S. non-represented employees are eligible to participate in these plans, each upon the terms set forth in the specific plan applicable to each participant.

 

ESOP

 

The Company makes a contribution of approximately 2% of base salary to eligible employees through the ESOP.

 

401(k) Plan

 

On January 1, 2008, the Company adopted changes to the 401(k) Plan whereby the 401(k) Plan became the primary Company-provided retirement plan for certain eligible employees. The 401(k) Plan provides a 50% match on employees’ contributions of up to 6% of pay (maximum Company match of 3% of pay) for employees age 40 and over as of December 31, 2007, and a 100% match on employees’ contributions of up to 6% of pay for employees under the age of 40 as of December 31, 2007 or those becoming new participants, regardless of age, on or after January 1, 2008.

 

Qualified Plan

 

On January 1, 2008, the Company adopted changes to the Qualified Plan whereby benefits stopped increasing for employees under the age of 40 as of December 31, 2007, with benefits remaining unchanged for employees age 40 and over as of December 31, 2007. The Qualified Plan is a qualified defined benefit plan which provides a pension benefit based upon years of service with the Company and upon final average pay (average base salary compensation for the five most highly compensated consecutive years of employment). Benefits under the Qualified Plan are 1% of final average pay times the participant’s years of service with the Company.

 

SERP

 

In addition to retirement benefits under the Qualified Plan, certain executive officers of the Company, including the NEOs, also participate in the SERP, entitling them to certain supplemental benefits upon their retirement. Benefits under the SERP, which are based upon years of service, are 55% (reduced for years of service less than 25) of the average of base salary, holiday bonus, and MIP bonus for the five most highly compensated, consecutive years of employment, less any benefits received under the Qualified Plan and Social Security.

 

In October 2007, The Executive Compensation Committee adopted The J. M. Smucker Company Defined Contribution Supplemental Executive Retirement Plan, which became effective on May 1, 2008, for certain executive officers not participating in the SERP (the “New SERP”). The New SERP will entitle participants to certain supplemental benefits upon their retirement, based upon an annual contribution by the Company equal to 7% of the sum of the participant’s base salary, holiday bonus, and MIP bonus, along with an interest credit made each year commencing on April 30, 2009. Participants in the New SERP will be eligible for benefits upon the attainment of age 55 and 10 years of service with the Company. The NEOs are not participants in the New SERP, but will continue to participate in the SERP.

 

Deferred Compensation Plan

 

Executive officers may elect to defer up to 50% of salary and up to 100% of the MIP award in The J. M. Smucker Company Voluntary Deferred Compensation Plan (the “Deferred Compensation Plan”). The amounts

deferred are credited to notional accounts selected by the executive that mirror the investment alternatives available in the 401(k) Plan. At the time a deferral election is made, participants elect to receive payout of the deferred amounts upon termination of employment in the form of a lump sum or equal annual installments ranging from 2 to 10 years.

 

The SERP, the New SERP, and the Deferred Compensation Plan are non-qualified deferred compensation plans and, as such, are subject to the rules of Section 409A of the IRC, which restrict the timing of distributions.

 

 

The executive officers, like all salaried and hourly non-represented employees of the Company, receive an annual holiday bonus equal to 2% of their base salary.

 

Executive officers are provided certain personal benefits not generally available to all employees. The Executive Compensation Committee believes these additional benefits are reasonable and enable the Company to attract and retain outstanding employees for key positions. These benefits include financial and tax planning assistance, reimbursement for specified club dues and expenses, executive physicals, participation in the SERP or the New SERP, and the Deferred Compensation Plan. Additionally, the Executive Compensation Committee and the Board have strongly encouraged the Co-CEOs and their families to use corporate aircraft for all air travel for security purposes. The value of personal travel on the corporate aircraft is calculated in accordance with applicable regulations under the IRC and is included in the Co-CEOs’ taxable income for the year. The value of these personal benefits for the NEOs, to the extent the aggregate value exceeded $10,000 for fiscal year 2008, is included in the Summary Compensation Table.

 

The Executive Compensation Committee reviews, on an annual basis, the types of perquisites and other benefits provided executive officers, as well as the dollar value of each perquisites paid to executive officers.

 

 

Employment Agreements

 

The Company does not have employment agreements, golden parachute agreements, or change of control agreements with any employee. Should there be a change in control of the Company, all outstanding equity awards (other than the performance units for the Co-CEOs described above) will immediately vest. The definition of change of control for purposes of accelerating the vesting of Restricted Stock Awards is set forth in the 2006 Plan and the 1998 Equity and Performance Incentive Plan (the “1998 Plan”).

 

Consulting Agreements

 

The Co-CEOs have entered into Consulting Agreements with the Company. These agreements are designed to recognize the value of the Smucker family involvement in the business and to preserve this value for a period following the termination of employment of either of the Co-CEOs. The consulting agreements generally require each of the Co-CEOs to maintain his public representation of the Company for three years following the termination of full-time employment with the Company. The Board also believes that it is crucial to the strength of the Smucker’s brand that neither Timothy P. Smucker nor Richard K. Smucker undertake activities after the end of his employment with the Company that might be to the competitive disadvantage of the Company.

 

In December 2005, Richard G. Jirsa retired as a Vice President of the Company after 30 years of service. At the time of his retirement, Mr. Jirsa entered into a Consulting Agreement with the Company pursuant to which he agreed to provide consulting services to the Company, as requested, for a period of two years.

 

In August 2006, Fred A. Duncan retired as a Senior Vice President of the Company after 28 years of service. At the time of his retirement, Mr. Duncan entered into a Consulting Agreement with the Company pursuant to which he agreed to provide consulting services to the Company, as requested, for a period of one year.

In June 2007, John D. Milliken retired as a Vice President of the Company after 34 years of service. At the time of his retirement, Mr. Milliken entered into a Consulting Agreement with the Company pursuant to which he agreed to provide consulting services to the Company, as requested, for a period of one year.

 

In July 2007, Richard F. Troyak retired as Vice President, Operations of the Company after 29 years of service. At the time of his retirement, Mr. Troyak entered into a Consulting Agreement with the Company pursuant to which he agreed to provide consulting services to the Company, as requested, for a period of one year.

 

In December 2007, Robert E. Ellis retired as Vice President, Human Resources of the Company after 29 years of service. At the time of his retirement, Mr. Ellis entered into a Consulting Agreement with the Company pursuant to which he agreed to provide consulting services to the Company, as requested, for a period of one year.

 

 

The Executive Compensation Committee has considered the potential impact on the Company’s compensation plans of the $1,000,000 cap on deductible compensation under Section 162(m) of the IRC. Compensation that qualifies as performance-based compensation is exempt from the cap on deductible compensation. To date, Timothy P. Smucker, Richard K. Smucker, and Vincent C. Byrd have been paid compensation in excess of $1,000,000 that could be subject to the Section 162(m) limitation. The Executive Compensation Committee is committed to establishing executive compensation programs that will maximize, as much as possible, the deductibility of compensation paid to executive officers. To the extent, however, that the Executive Compensation Committee from time to time believes it to be consistent with its compensation philosophy and in the best interests of the Company and its shareholders to award compensation that is not fully deductible, it may choose to do so.

 

During fiscal year 2008, the Executive Compensation Committee continued to monitor the regulatory developments under Section 409A of the IRC, which was enacted as part of the American Jobs Creation Act of 2004. Section 409A imposes additional limitations on non-qualified deferred compensation plans and subjects those plans to additional conditions. Certain aspects of the benefit programs may be revised in fiscal year 2009 for compliance with, or exemption from, the requirements of Section 409A.

 

The following table provides information concerning the compensation of the Company’s NEOs for fiscal years 2008 and, if required, 2007. Please read the Compensation Discussion and Analysis in conjunction with reviewing this table.

 

 

 

 

The Company used incremental costs, including costs related to fuel, landing fees, crew meals and other miscellaneous costs, in valuing personal use of corporate aircraft in fiscal year 2008.

 

     Personal Use of Aircraft