``````````````````` February 11, 2005
Mail Stop 0305
Hilary A. Rapkin, Esq.
Vice President and General Counsel
Wright Express Corporation
97 Darling Avenue
South Portland, Maine 04106
Re: Wright Express Corporation
Form S-1, Amendment Nos. 3 and 4, filed February 1 and
February
10, 2005
File No. 333-120679
Dear Ms. Rapkin:
We have reviewed your amended filing and have the following
comments. Where indicated, we think you should revise your
document
in response to these comments. If you disagree, we will consider
your explanation as to why our comment is inapplicable or a
revision
is unnecessary. Please be as detailed as necessary in your
explanation. In some of our comments, we may ask you to provide
us
with supplemental information so we may better understand your
disclosure. After reviewing this information, we may or may not
raise additional comments.
The purpose of our review process is to assist you in your
compliance with the applicable disclosure requirements and to
enhance
the overall disclosure in your filing. We look forward to working
with you in these respects and welcome any questions you may have
about our comments or any other aspect of our review. Feel free
to
call us at the telephone numbers listed at the end of this letter.
Relationship with Cendant, page 5
1. We note from disclosure here, and elsewhere throughout the
document, that the non-cash portion of the special dividend to
Cendant will be $25.1 million. However, Note (9) to the unaudited
pro forma combined financial statements on page 36 states that the
non-cash portion of the special dividend will be $42.7 million.
Please clarify this apparent discrepancy.
Use of proceeds, page 26
2. We note from the liquidity sources section of the summary on
page
4 that you will use $50 million of the revolving credit facility
to
fund a portion of the special dividend, and $33.8 million of the
revolving credit facility to support letters of credit. We
suggest
you include this more specific information here, to give the
reader a
better understanding of how much of the proceeds may go to
repaying
borrowings under your new revolving credit facility.
3. Furthermore, to the extent you expect to use net proceeds `to
repay borrowings under your new revolving credit facility, please
also revise to comply with Item 504, Instruction no. 4 of
Regulation
S-K.
`
Capitalization, page 27
4. We note your response to comment 3 that you do not believe that
the business purpose for the special dividend needs to be
separately
disclosed in the "Capitalization" section or in the notes to the
pro
forma financial statements. We also note that you have revised
your
disclosure in several other sections of the filing to state that
the
purpose of the dividend is to benefit Cendant in connection with
its
disposition of its entire ownership interest in them and that the
purpose is not aligned with the interests of the stockholders
following the offering. We continue to believe that you should
include a disclosure as to the purpose of the dividend in the
"capitalization" section as well as the notes to the pro forma
financial statements. Please revise these sections of your filing
to
indicate that the purpose of the dividend is to benefit Cendant in
connection with its disposition of its interest in the company.
Unaudited pro forma combined balance sheet, page 33
5. Please clarify in the notes to the pro forma balance sheet why
stockholders` equity will only decline by $226,119 if the company
expects to pay a special dividend to Cendant of $312.7 million as
indicated in footnote (9).
6. Please revise footnote (8) to disclose the maximum impact on
your
earnings per share in the event that all of the Cendant stock
options
and restricted stock units discussed in footnote (8) are converted
into the company`s stock options and restricted stock units.
Also,
consider providing a sensitivity analysis which discusses the
impact
in the event that only a portion of the Cendant stock options and
restricted stock units are converted into the company`s stock
options
and restricted stock units.
Notes to Unaudited Pro forma Combined Financial Statements, page
34
7. We note your response to comment 6 and acknowledge our phone
conversation on January 31, 2005 regarding the appropriateness of
your adjustments to the pro forma statements of operations.
However,
we believe that the description of the pro forma adjustment for
additional employees, as written in note (1) on page 34, does not
explain why management believes the adjustment is factually
supportable. Please revise this disclosure to include the
information communicated to us on the phone as well as included in
your response to our prior comment, such as the written job
descriptions, approved salaries and active interviewing through a
recruiting firm for the newly established positions.
8. We note that your response to comment 8 includes the amount of
financing fees, the period of amortization and the basis points
used
to determine the amount. Please revise your disclosure to include
the method of amortization for the financing fees.
2005 Equity and incentive plan, page 84
9. We note the discussion in the second paragraph on page 85
regarding the amount of compensation expense that the Company
plans
to recognize in connection the issuance of restricted stock units
relating to 313,000 share of common stock in connection with the
offering of $1.6 million. We also note the discussion in the third
paragraph on page 85 regarding the aggregate compensation expense
of
approximately $5.4 million which the Company expects to recognize
during 2005 in connection with the exchange of Cendant restricted
stock options and units for the Company`s restricted stock units
and
options. Please revise MD&A to discuss the restricted stock units
and options that the Company plans to issue in connection with the
planned public offering, and to disclose the amount of expense
that
the Company expects to recognize during 2005 as a result of
issuing
these restricted stock units and options.
10. Also, please explain why the amount of expected 2005 expense,
discussed on page 85, of $1.6 million exceeds the amount reflected
in
pro forma adjustment (1) on page 34 and in footnote (1) on page 49
of
$.8 million. If the $1.6 million relates to the 313,000 shares
being
issued in connection with the offering, as it appears on page 85,
we
do not understand why that amount is not included in the pro forma
statements. We may have further comment upon receipt of your
response.
Employment agreements
11. We note the disclosure added on page 89 regarding the
employment
agreements with certain executive officers that will become
effective
subject to and upon completion of the offering. Please confirm to
us
and clarify in footnote (1) on page 34, that adjustment (1) to
your
pro forma statement of income on page 32 includes the effect of
these
revised employment agreements.
Note 18. Subsequent Event, page F-30
12. We note your response to comment 13 and the revised note to
the
financial statements which includes disclosure of the various
transactions that will occur concurrent with or immediately
following
the public offering. However, we do not believe that the detail
included in Note 18 is sufficient. Note 18 should be revised to
include certain additional disclosures regarding the terms of the
various transactions. For example:
- - Disclose the restrictions on the Company`s ability to pay
dividends
imposed by the new credit facility.
- - Quantify the dividend requirements associated with the Series A
non-voting convertible preferred stock.
13. We note the disclosure in Note 18 indicating that the Company
paid a dividend of $25,090 to PHH, a wholly owned subsidiary of
Cendant on January 25, 2005. Please revise the pro forma balance
sheets included on pages F-3 and 33 of the registration statement
to
give effect to this dividend payment in accordance with the
guidance
outlined in SAB Topic 1:B:3. The notes to the Company`s pro forma
financial information and its audited financial statements will
also
need to be revised to explain the treatment used in the pro forma
balance sheets with respect to this dividend payment.
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As appropriate, please amend the registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that
* Should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* The action of the Commission or the staff, acting pursuant to
delegated authority in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
* The company may not assert this action as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Claire Lamoureux, Staff Accountant, at (202)
824-5663 or Linda Cvrkel, Branch Chief, at (202) 942-1936 if you
have
questions regarding comments on the financial statements and
related
matters. Please contact Johanna Vega Losert, Attorney-Advisor, at
(202) 942-2931 or the undersigned at (202) 942-2936 with any other
questions.
Regards,
Sara W. Dunton
Branch Chief
cc: via facsimile (917) 777-2103
Gregory A. Fernicola
Joshua Goldstein
Skadden Arps Slate Meagher & Flom LLP
Four Times Square
New York, New York
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Wright Express Corporation Form S-1
February 11, 2005
Page 2