Larry Spirgel, Assistant Director
Kyle Moffatt, Accountant Branch Chief
Michael Henderson, Staff Accountant
Celeste Murphy, Legal Branch Chief
Scott Hodgdon, Attorney-Advisor

Harmonic Inc.
Form 10-K for the year ended December 31, 2008
Filed March 12, 2009
File No. 1-000-25826

We respectfully advise the Staff that the purchased assembled workforce assets that we acquired for $60,000 during our third quarter ended September 26, 2008, were part of an asset acquisition, not a business combination, because the assets acquired did not qualify as a business as defined in EITF 98-3. Therefore, we believe that the Financial Accounting Standards Board’s considerations in paragraph B169 of SFAS 141 are not applicable to the assembled workforce assets as they were not part of a business combination. We acknowledge that our disclosure of intangible assets which included, among other assets, an assembled workforce, could be confusing. Accordingly, in our 2009 Annual Report on Form 10-K, we propose to state that purchased intangible assets from business combinations and asset acquisitions include customer base, maintenance agreements, core technology, developed technology, assembled workforce, trademark and tradename, and supply agreements.

We respectfully acknowledge the Staff’s comment, and hereby advise the Staff that we will, in future filings of annual reports on Form 10-K or proxy statements that contain a Compensation Discussion and Analysis section, (i) include disclosure regarding company performance targets used under an annual incentive plan, or (ii) provide a more comprehensive analysis as to why disclosure of each company-level performance target for the last fiscal year would cause us competitive harm.

We respectfully advise the Staff that we have disclosed the vesting dates for outstanding options as of December 31, 2008 in the table on page 25 by providing a footnote for the entire table which states: “Under our Stock Option Plans, these options vest 25% upon completion of 12 months service and 1/48 per month thereafter and expire after seven years or ten years from date of grant, contingent upon continued employment.”

We respectfully advise the Staff that we will include separate footnotes disclosing the vesting schedule for each option grant set forth in the “Outstanding Equity Awards at Fiscal Year-End Table” in future filings of annual reports on Form 10-K or proxy statements that contain a Compensation Discussion and Analysis section. For the Staff’s reference, the following table summarizes the stock options outstanding as of December 31, 2008 for each of our named executive officers, and provides information related to the vesting schedule of each such option in accordance with the preceding sentence:

Patrick J. Harshman

 

 

 

 

 

 

 

 

 

 

 

Robin N. Dickson

 

 

 

 

 

 

 

 

 

Matthew Aden

 

Nimrod Ben-Natan

 

 

 

 

 

 

 

 

Neven Haltmayer

 

 

 

 

Unless otherwise indicated, all options granted to named executive officers vest over a four-year period, at a rate of 25% upon completion of 12 months service from the vesting commencement date and 1/48 per month thereafter, contingent upon continued employment.

The shares subject to this option have fully vested.

As of December 31, 2008, 56,666 shares subject to this option were vested, and an additional 1,667 shares subject to this option will vest monthly until all shares subject to this option become vested.

As of December 31, 2008, 96,875 shares subject to this option were vested, and an additional 3,125 shares subject to this option will vest monthly until all shares subject to this option become vested.

As of December 31, 2008, 83,333 shares subject to this option were vested, and an additional 4,167 shares subject to this option will vest monthly until all shares subject to this option become vested.

As of December 31, 2008, 43,465 shares subject to this option were vested, and an additional 1,014 shares subject to this option will vest monthly until all shares subject to this option become vested.

As of December 31, 2008, none of the shares subject to this option were vested. 50,000 shares subject to this option will vest on May 15, 2009, and an additional 4,167 shares will vest monthly thereafter until all shares subject to this option become vested.

As of December 31, 2008, 35,419 shares subject to this option were vested, and an additional 1,042 shares subject to this option will vest monthly until all shares subject to this option become vested.

As of December 31, 2008, 29,166 shares subject to this option were vested, and an additional 1,458 shares subject to this option will vest monthly until all shares subject to this option become vested.

As of December 31, 2008, 44,791 shares subject to this option were vested, and an additional 1,042 shares subject to this option will vest monthly until all shares subject to this option become vested.

As of December 31, 2008, none of the shares subject to this option were vested. 25,000 shares subject to this option will vest on May 15, 2009, and an additional 2,083 shares will vest monthly thereafter until all shares subject to this option become vested.

As of December 31, 2008, 29,166 shares subject to this option were vested, and an additional 2,083 shares subject to this option will vest monthly until all shares subject to this option become vested.

As of December 31, 2008, none of the shares subject to this option were vested. 15,000 shares subject to this option will vest on May 15, 2009, and an additional 1,250 shares will vest monthly thereafter until all shares subject to this option become vested.

As of December 31, 2008, 6,420 shares subject to this option were vested, and an additional 377 shares subject to this option will vest monthly until all shares subject to this option become vested.

As of December 31, 2008, 29,166 shares subject to this option were vested, and an additional 1,458 shares subject to this option will vest monthly until all shares subject to this option become vested.

As of December 31, 2008, 3,500 shares subject to this option were vested, and an additional 99 shares subject to this option will vest monthly until all shares subject to this option become vested.

As of December 31, 2008, none of the shares subject to this option were vested. 25,000 shares subject to this option will vest on May 15, 2009, and an additional 2,083 shares will vest monthly thereafter until all shares subject to this option become vested.

As of December 31, 2008, 31,875 shares subject to this option were vested, and an additional 938 shares subject to this option will vest monthly until all shares subject to this option become vested.

As of December 31, 2008, 29,166 shares subject to this option were vested, and an additional 1,458 shares subject to this option will vest monthly until all shares subject to this option become vested.

As of December 31, 2008, 9,854 shares subject to this option were vested, and an additional 229 shares subject to this option will vest monthly until all shares subject to this option become vested.

As of December 31, 2008, none of the shares subject to this option were vested. 25,000 shares subject to this option will vest on May 15, 2009, and an additional 2,083 shares will vest monthly thereafter until all shares subject to this option become vested.

Robin N. Dickson, Chief Financial Officer, Harmonic Inc.
Terry Roelands, Corporate Controller, Harmonic Inc.
Robert G. Day, Esq., Wilson Sonsini Goodrich & Rosati, P.C.
Rezwan D. Pavri, Esq., Wilson Sonsini Goodrich & Rosati, P.C.