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David A. Bell
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Email dbell@fenwick.com |
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Direct Dial (650) 335-7130 |
February 1, 2008
VIA EDGAR AND OVERNIGHT COURIER
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
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Attention:
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Barbara C. Jacobs |
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David L. Orlic |
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David W. Edgar |
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Christine E. Davis |
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Division of Corporation Finance |
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Re:
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ArcSight, Inc. |
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Amendment No. 5 to Registration Statement on Form S-1 |
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File No. 333-145974 |
Dear Ms. Jacobs:
On behalf of ArcSight, Inc. (the Company), we respond to the comments of the staff (the
Staff) of the U.S. Securities and Exchange Commission (the Commission) to Amendment No. 5 to
the Registration Statement on Form S-1 (Registration No. 333-145974) originally filed by the
Company with the Commission on September 11, 2007 (the Registration Statement) contained in your
letter dated January 24, 2008. The numbered paragraphs below correspond to the numbered comments
in that letter; the Staffs comments are presented in bold italics.
The Company is also supplementally providing the Staff with certain additional information as
Exhibit A to the copy of this letter that is being transmitted by overnight courier. The
Company requests, pursuant to Rule 418(b) promulgated under the Securities Act of 1933, as amended
(Rule 418(b)), that the Staff return Exhibit A to the Company once the Staff has
completed its review.
Prospectus Summary. Page 1
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We note that you have revised upward the market data figures from IDC appearing in the last
full paragraph on page 1. Please tell us whether these revised figures are from reports
issued by IDC subsequent to those which you have already furnished to us supplementally. If
so, please provide the dates of the underlying reports, as well as copies of the reports
themselves, marked to show where in the reports these new figures appear. Also, please tell us
whether any subsequent reports were prepared for you. |
The Company confirms that the revised figures are from a report issued by International Data
Corporation, a market research firm, subsequent to those reports which the Company has already
U.S. Securities and Exchange Commission
February 1, 2008
Page 2 of 3
furnished to the Staff supplementally. The new report, titled Worldwide Compliance
Infrastructure 2007-2011 Forecast: Compliant Information Infrastructure, Data Privacy, and IT Risk
and Compliance Management Underpin Spending, is dated November 2007. The referenced report was
not prepared for or at the request of the Company.
The Company has supplementally provided to the Staff a copy of the above referenced report,
marked to show where in the reports the new figures appear, as Exhibit A to the copy of
this letter that is being transmitted by overnight courier. The Company requests, pursuant to Rule
418(b), that the Staff return to it the materials to which reference is made in this response once
the Staff has completed its review.
Principal and Selling Stockholders. page 109
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You have added disclosure regarding selling stockholders. With respect to each selling
stockholder entity that is not subject to the reporting requirements of Section 13(a) or 15(d)
of the Exchange Act, please disclose the natural person or persons who exercise the voting and
dispositive powers with respect to the shares to be offered for resale. |
The Company respectfully advises the Staff that the disclosures for selling stockholders
Berggruen Holdings North America Ltd. and entities affiliated with Alex Daly disclose the natural
persons who exercise the voting and dispositive powers with respect to the shares to be offered for
resale. Further, as discussed with the Staff, Sumitomo Corporation is a publicly traded
corporation and consequently, disclosure of the natural person(s) that hold voting or dispositive
power is not included in the prospectus. Finally, with respect to the remaining selling
stockholders, entities affiliated with In-Q-Tel (In-Q-Tel), the Company intends to include the
names of the Investment Committee of the In-Q-Tel Board of Trustees that holds voting and
dispositive power for In-Q-Tel in the final prospectus that it will file following effectiveness
pursuant to Rule 424(b) or any substantive pre-effective amendment the Company files.
Part II. Information not Required in Prospectus
Item 15. Recent Sales of Unregistered Securities. page II-2
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On January 16, 2008, you filed a Form D relating to a Rule 506 offering of Series B Preferred
Stock Warrants. Please tell us more about this offering and direct us to the relevant
disclosure in this item. |
The Company advises the Staff that the issuance of Series B Preferred Stock warrants
referenced in the Form D filed January 16, 2008 was completed in May 2006. The issuance is
described in Item 15 of the Registration Statement (at sub-item #4). As discussed there, the
issuance was to nine sophisticated accredited investors and was exempt from the registration
requirements of the Securities Act of 1933 pursuant to Section 4(2) thereof and/or Regulation D.
However, the Company recently determined that it had inadvertently failed to file the Form D
relating to the offering of Series B Preferred Stock warrants, and consequently made the filing for
completeness.
As discussed with the Staff, counsel for a plaintiff in a litigation filed against the Company
(Plaintiffs Counsel) contacted counsel for the lead underwriters, the Staff, and ultimately the
undersigned. In his various communications, Plaintiffs
Counsel expressed his personal views regarding the section of the Companys Registration Statement entitled Legal Proceedings. As
discussed, after due consideration, the Company determined that the litigation brought by
Plaintiffs Counsel is not
U.S. Securities and Exchange Commission
February 1, 2008
Page 3 of 3
material for purposes of Item 103 of Regulation S-K. While the
aggregate amount of the damages sought in this action does not fit within the safe harbor provided
by Instruction 2 to Item 103 of Regulation S-K, the Company has evaluated whether the litigation is
material considering both quantitative and qualitative factors. This evaluation included a
consideration of numerous factors, including but not limited to: the relative strengths and
weaknesses of the claims asserted; the likelihood of success of the pending motion to dismiss the
complaint for lack of jurisdiction and lack of proper service; the various defenses available to
the Company; the extent to which plaintiff is likely or unlikely to prevail in his claims; and the
extent to which plaintiff is likely or unlikely to recover all or some part of his alleged damages.
Based on our consideration of these quantitative and qualitative factors, the Company concluded
that the litigation is not material. The Company also notes to the Staff that counsel to the lead
underwriters has conducted customary due diligence regarding this litigation, including refreshing
their due diligence subsequent to the contact from Plaintiffs Counsel.
Should the Staff have additional questions or comments regarding the foregoing, please do not
hesitate to contact the undersigned at (650) 335-7130 or, in his absence, Daniel J. Winnike, Esq.
at (650) 335-7657.
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Sincerely,
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/s/ David A. Bell
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David A. Bell, Esq. |
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Enclosures:
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Exhibit A (Referenced Analyst Report) |
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cc:
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Robert W. Shaw, Chief Executive Officer |
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Stewart Grierson, Chief Financial Officer |
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Trâm T. Phi, Esq., Vice President and General Counsel |
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ArcSight, Inc. |
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Daniel J. Winnike, Esq. |
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Fenwick & West LLP |
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Bruce K. Dallas, Esq. |
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Davis Polk & Wardwell |