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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
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Filed
by the Registrant x
Filed
by a Party other than the Registrant ¨
Check
the appropriate box:
¨ Preliminary
Proxy Statement
¨ Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
x Definitive
Proxy Statement
¨ Definitive
Additional Materials
¨ Soliciting
Material Pursuant to § 240.14a-12
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STANDARD
PACIFIC CORP.
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(Name
of Registrant as Specified In Its Charter)
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(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Payment
of Filing Fee (Check the appropriate box):
xNo fee
required.
¨ Fee computed
on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title
of each class of securities to which transaction
applies:
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(2) Aggregate
number of securities to which transaction applies:
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(3)
Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was
determined):
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(4) Proposed
maximum aggregate value of transaction:
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(5) Total
fee paid:
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¨ Fee paid
previously with preliminary materials.
¨ Check box if
any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid previously.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
(1) Amount
Previously Paid:
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(2) Form,
Schedule or Registration Statement No.:
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(3) Filing
Party:
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(4) Date
Filed:
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STANDARD
PACIFIC CORP.
26
Technology Drive
Irvine,
California 92618-2338
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD ON MAY 13, 2009
The 2009
Annual Meeting of Stockholders of Standard Pacific Corp. will be held at 26
Technology Drive, Irvine, CA 92618, on Wednesday, May 13, 2009 at 10:30
a.m., local time, for the following purposes:
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(1)
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To
elect seven directors to hold office for a one-year term and until their
successors are duly elected and
qualified;
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(2)
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To
consider a stockholder proposal regarding the adoption of a majority
voting standard for the election of its
directors;
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(3)
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To
consider a stockholder proposal regarding the adoption of quantitative
goals to reduce greenhouse gas
emissions;
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(4)
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To
ratify the appointment of Ernst & Young LLP as our independent
registered public accounting firm;
and
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(5)
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To
transact such other business as may properly come before the Annual
Meeting and any postponement or adjournment
thereof.
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These
items of business are more fully described in the proxy statement accompanying
this Notice.
The
Board of Directors recommends stockholders vote FOR proposals (1) and (4) and
AGAINST proposals (2) and (3).
The Board
of Directors has fixed the close of business on March 16, 2009 as the record
date for the determination of stockholders entitled to receive notice of and to
vote at the meeting and any postponements or adjournments of the meeting. The
presence, either in person or by proxy, of persons entitled to vote a majority
of the voting power of our capital stock that is entitled to vote at the meeting
is necessary to constitute a quorum for the transaction of business at the
meeting. To ensure that your vote is recorded, please provide your voting
instructions as soon as possible, even if you plan to attend the meeting
in person. We encourage you to vote via the Internet or by telephone.
If you requested a printed set of proxy materials, you also have the option of
voting by completing, signing, dating and returning the proxy card that
accompanied the printed materials. Submitting your vote via the
Internet or by telephone or proxy card will not affect your right to vote in
person if you decide to attend the annual meeting.
We are
pleased to take advantage of new rules that allow companies to furnish their
proxy materials via the Internet. As a result, we are mailing to our
stockholders a notice of Internet availability of proxy materials instead of a
paper copy of our proxy statement and our 2008 annual report to stockholders.
The notice of Internet availability of proxy materials contains instructions on
how to access those documents via the Internet. The notice of Internet
availability of proxy materials also contains instructions on how to request a
paper copy of our proxy materials, including our proxy statement, our 2008
annual report to stockholders and a form of proxy card or voting instruction
card, as applicable. We believe that this new process will reduce the costs of
printing and distributing our proxy materials and also provides other
benefits.
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By
Order of the Board of Directors
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JOHN
P. BABEL
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Secretary
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Irvine,
California
April 2,
2009
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Page
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NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
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STANDARD
PACIFIC CORP.
26
Technology Drive
Irvine,
California 92618-2338
ANNUAL
MEETING OF STOCKHOLDERS
TO
BE HELD ON MAY 13, 2009
This
proxy statement contains information related to our annual meeting of
stockholders to be held Wednesday, May 13, 2009, beginning at 10:30 a.m.,
local time, at our headquarters, located at 26 Technology Drive, Irvine CA
92618, and at any and all postponements and adjournments thereof (the “Annual
Meeting”). Your proxy for the meeting is being solicited by the
Standard Pacific Corp. Board of Directors. This proxy statement will
be available on the Internet, and the notice of Internet availability of proxy
materials is first being mailed to stockholders beginning on or about April 2,
2009.
The
entire cost of this solicitation of proxies will be borne by the Company,
including expenses in connection with preparing, assembling and mailing the
notice of Internet availability of proxy materials. The Company may reimburse
brokers or persons holding stock in their names or in the names of their
nominees for their expenses in sending proxies and proxy materials to beneficial
owners who request paper copies. Certain officers, directors and regular
employees of the Company, who will receive no extra compensation for their
services, may solicit proxies by mail, telephone, facsimile, e-mail or
personally.
In accordance
with the rules and regulations adopted by the SEC, we have elected to provide
access to our proxy materials to our stockholders via the Internet.
Accordingly, a notice of Internet availability of proxy materials has been
mailed to our stockholders. Stockholders that received the notice of Internet
availability of proxy materials have the ability to access the proxy materials
at www.proxyvote.com
or request that a printed set of the proxy materials be sent
to them, by following the instructions set forth on the notice of Internet
availability of proxy materials. Some banks, brokers and other nominee
record holders may be participating in the practice of “householding” proxy
materials. This means that only one copy of our proxy materials or notice
of Internet availability of proxy materials, as applicable, may have been sent
to multiple stockholders in your household. We will promptly deliver a
separate notice of Internet availability of proxy materials and, if applicable,
a separate proxy statement and annual report, to you if you make a request by
following the instructions set forth on the notice of Internet availability of
proxy materials.
As of
March 16, 2009 (the “Record Date”), the Company had outstanding a total of
100,624,350 shares of Company common stock (the “Common Stock”) and 450,829
shares of Series B Junior Participating Convertible Preferred Stock (the “Series
B Preferred Stock” and, collectively with the Common Stock, the
“Shares”). Holders of the Shares are entitled to receive notice of
and to vote at the Annual Meeting. The Shares vote together on all
matters upon which the holders of Common Stock are entitled to vote, with
holders of the Common Stock entitled to 51% of the total voting power of the
Shares and holders of the Series B Preferred Stock entitled to 49% of the total
voting power of the Shares. The presence, either in person or by proxy, of
persons entitled to vote a majority of the voting power of the Shares is
necessary to constitute a quorum for the transaction of business at the Annual
Meeting.
The
persons named in the accompanying proxy card will vote Shares represented by all
valid proxies in accordance with the instructions contained thereon. In the
absence of instructions, Shares represented by properly completed proxies will
be voted:
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FOR
the election of the directors of the Company designated herein as nominees
(see “Election of Directors” at page 8 of this proxy statement), except
that shares of Series B Preferred Stock will be voted in the same
proportion as shares of Common Stock
vote;
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AGAINST
approval of a stockholder proposal regarding the adoption of a majority
voting standard for the election of the Company’s Board of Directors (see
“Stockholder Proposal Concerning Majority Voting for the Election of the
Board of Directors,” including “Management’s Statement in Opposition to
Proposal No. 2” at page 11 of this proxy
statement);
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AGAINST
approval of a stockholder proposal regarding the adoption of quantitative
goals for the reduction of greenhouse gas emissions (see “Stockholder
Proposal Concerning the Adoption of Quantitive Greenhouse Gas Emissions
Goals,” including “Management’s Statement in Opposition to Proposal
No. 3” at page 13 of this proxy statement);
and
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FOR
ratification of the appointment of Ernst & Young LLP as the
Company’s independent registered public accounting firm (see “Ratification
of the Appointment of Ernst & Young LLP as the Company’s
Independent Registered Public Accounting Firm” at page 16 of this proxy
statement).
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Any
stockholder may revoke his or her proxy at any time prior to its use by writing
to the Secretary of the Company, by voting again via mail, telephone or the
Internet, or by attending the Annual Meeting and casting his or her vote in
person. A stockholder’s last timely vote will be the vote that is
counted.
Votes
cast by proxy or in person at the Annual Meeting will be counted by the persons
appointed by the Company to act as election inspectors for the meeting. The
election inspectors will treat abstentions and broker non-votes as Shares that
are present and entitled to vote for purposes of determining the presence of a
quorum. For purposes of determining the outcome of any matter as to which a
broker or nominee has physically indicated on the proxy or indicated
electronically that it does not have discretionary authority to vote, those
Shares will be treated as not present and not entitled to vote with respect to
that matter (even though those Shares are considered entitled to vote for quorum
purposes and may be entitled to vote on other matters). Under such
circumstances, the broker non-vote will have no effect on the outcome of the
vote on such proposal.
Stockholders
can provide voting instructions by telephone by calling toll free
1-800-579-1639 from
the U.S. or Canada, or via the Internet at www.proxyvote.com at
any time before 11:59 p.m. Eastern Time on May 12, 2009. Telephone and
Internet voting access is available 24 hours a day, 7 days a week until 11:59
p.m. Eastern Time on May 12, 2009. Please have your notice and
proxy control number in hand when you telephone or visit the
website.
Committees
of the Board of Directors
During
fiscal year 2008, the Board of Directors had standing Audit, Compensation,
Nominating and Corporate Governance, and Executive Committees. The current
membership of each committee is as follows, with the chairman of the committee
listed first.
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Audit
Committee
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Compensation
Committee
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Nominating
and Corporate
Governance
Committee
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Executive
Committee
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Douglas
C. Jacobs
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Larry
D. McNabb
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Ronald
R. Foell
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Kenneth
L. Campbell
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Larry
D. McNabb
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J.
Wayne Merck
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James
L. Doti
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Ronald
R. Foell
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Bruce
A. Choate
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F.
Patt Schiewitz
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Douglas
C. Jacobs
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Larry
D. McNabb
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J.
Wayne Merck
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Douglas
C. Jacobs
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Audit
Committee: The Audit Committee, which held ten
meetings during 2008, represents the Board of Directors in discharging its
responsibilities relating to the accounting, reporting, and financial practices
of the Company and its subsidiaries. Under the Audit Committee’s charter, the
committee is required to meet at least four times per year or more frequently as
circumstances dictate. The Audit Committee has general responsibility
for:
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overseeing
the internal controls and accounting and audit activities of the Company
and its subsidiaries;
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reviewing
prior to filing with management and the Company’s independent auditors the
Company’s annual financial statements and Annual Report on Form
10-K;
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reviewing
prior to filing with management and the Company’s independent auditors the
Company’s quarterly financial statements and Quarterly Reports on Form
10-Q;
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appointing
the Company’s independent auditors;
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pre-approving
all audit engagement fees and terms and all non-audit engagements with the
Company’s independent auditors;
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reviewing
the independence and effectiveness of the Company’s independent auditors,
and their significant relationships with the
Company;
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approving
the hiring by the Company of any current employee of the Company’s
independent auditors or any former employee employed by the independent
auditors within the prior one-year
period;
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approving
major changes to the Company’s internal auditing and accounting principles
and practices;
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overseeing
the integrity of the Company’s financial reporting processes, adequacy of
the Company’s internal controls and the fullness and accuracy of the
Company’s financial statements;
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reviewing
the Company’s guidelines and policies with respect to risk assessment and
risk management;
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establishing,
reviewing and updating a Code of Ethical Conduct and ensuring that
management has established a system to enforce this
code;
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reviewing
legal compliance matters;
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discussing
the general types of information to be disclosed and presentation of
earnings press releases;
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reviewing
and updating the written Audit Committee charter at least annually;
and
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performing
any other actions that the Board of Directors deems
appropriate.
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The Audit
Committee has been established in accordance with SEC rules and regulations, and
all the members of the Audit Committee are independent directors as independence
for audit committee members is defined in the New York Stock Exchange (“NYSE”)
listing standards. In addition, the Board of Directors has determined that
Douglas C. Jacobs qualifies as an “audit committee financial expert” within the
meaning of applicable SEC rules and regulations.
Compensation
Committee: The Compensation Committee, which held
twelve meetings during 2008, represents the Board of Directors in discharging
its responsibilities relating to the oversight of compensation paid to Company
employees, directors and executives. All of the members of the Compensation
Committee are independent directors as defined under the NYSE listing standards.
Under the Compensation Committee’s charter, the committee is required to meet at
least four times per year or more frequently as circumstances dictate. The
Compensation Committee has general responsibility for:
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establishing
the Company’s compensation philosophy, objectives and
policies;
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reviewing,
establishing and approving compensation programs and levels of
compensation for the Company’s executive officers, including equity based
compensation awards;
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reviewing,
establishing and approving compensation programs and levels of
compensation for members of the Board of
Directors;
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administration
of stock incentive plans (including the selection of employees to receive
awards and the determination of the terms and conditions of such
awards);
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annually
reviewing and appraising the performance of the Company’s Chief Executive
Officer and providing developmental feedback to the Chief Executive
Officer and, when appropriate, to the other executive officers of the
Company;
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making
recommendations to the Board of Directors on management succession
relating to the selection of the Chief Executive Officer and other
executive officer positions; and
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establishing
and reviewing compliance with director and executive officer stock
ownership guidelines.
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In
determining executive compensation, the Compensation Committee may take into
consideration the research and recommendations provided by an independent
consultant engaged directly by the Committee, as well as recommendations made by
the Company’s Chief Executive Officer. This process is described in greater
detail in the “Compensation Discussion and Analysis” section which begins at
page 18 of this proxy statement. The Compensation Committee generally
does not delegate authority granted the committee by its charter.
Nominating and Corporate Governance
Committee: The Nominating and Corporate Governance
Committee held five meetings during 2008. All of the members of the committee
are independent directors as defined under the NYSE listing standards. The
Nominating and Corporate Governance Committee’s charter requires that the
committee meet at least once per year, or more frequently as circumstances
dictate, and that it will have general responsibility for:
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reviewing
and recommending candidates to fill vacancies on the Board of
Directors;
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recommending
the slate of directors to be nominated by the Board of Directors for
election by the stockholders at the annual meeting of
stockholders;
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recommending
to the Board of Directors the composition of board
committees;
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developing
and implementing the Company’s Corporate Governance
Guidelines;
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monitoring
a process to assess effectiveness of the Board of
Directors;
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making
recommendations on executive succession;
and
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considering
properly submitted stockholder proposals, including proposals that
nominate candidates for membership on the Board of
Directors.
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The
Nominating and Corporate Governance Committee utilizes a variety of methods for
identifying nominees for director, including considering potential director
candidates who come to the committee’s attention through current officers,
directors, professional search firms, stockholders or other persons. In
addition, pursuant to the terms of a stockholder agreement (the “Stockholder
Agreement”) (described in more detail beginning on page 6 of this proxy
statement under the heading “Transactions With Related Persons”) between the
Company and the Company’s largest stockholder, MP CA Homes, LLC
(“MatlinPatterson”), MatlinPatterson is entitled to designate up to one less
than a majority of the total number of directors as nominees for Board of
Directors membership. The Nominating and Corporate Governance
Committee is required to nominate each such person designated by MatlinPatterson
if the committee determines that such nominees possess the characteristics
required by the Company’s governance standards, provided, that, the committee is
not obligated to nominate any MatlinPatterson nominee if such nominee is an
officer or director of:
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any
company that competes to any significant extent with the business of the
Company or its subsidiaries in the geographic areas in which they
operate;
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another
company that has a class of equity securities registered with the SEC and
that is engaged in substantial homebuilding or land development activities
within the United States; or
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a
company that does not have a class of equity securities registered with
the SEC and that has annual revenues (in its most recently completed
fiscal year) from homebuilding and land development activities within the
United States of more than $200
million.
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Once a
potential nominee has been identified, the committee evaluates whether the
nominee has the appropriate skills and characteristics required to become a
director in light of the then current make-up of the Board of Directors. This
assessment includes an evaluation of the nominee’s judgment and skills, such as
depth of understanding of the Company’s industry, financial sophistication,
leadership, and objectivity, all in the context of the perceived needs of the
Board of Directors at that point in time. In addition to the foregoing, the
Company’s Corporate Governance Guidelines provide that each member of the Board
of Directors should have the following minimum characteristics:
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the
highest character and integrity;
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an
ability and desire to make independent and thoughtful analytical
inquiries;
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meaningful
experience at a strategy/policy setting
level;
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outstanding
ability to work well with others;
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sufficient
time available to carry out the significant responsibilities of a member
of the Board of Directors; and
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freedom
from any conflict of interest (other than employment by the Company in the
case of an inside director) that would interfere with his or her
independent judgment and proper performance of responsibilities as a
member of the Board of Directors.
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If a
stockholder believes that he or she has identified an appropriate candidate
willing to serve on the Company’s Board of Directors, that stockholder should
submit the nomination for consideration to the Nominating and Corporate
Governance Committee in accordance with the Company’s bylaws. The Nominating and
Corporate Governance Committee will review properly submitted stockholder
nominations in the same manner as it evaluates all other nominees.
The
Company’s bylaws provide that nominations for the election of directors may be
made by any stockholder entitled to vote in the election of directors; provided,
however, that a stockholder may nominate a person for election as a director at
a meeting of the stockholders only if written notice of such stockholder’s
intent to make such nomination has been given to the Company’s Corporate
Secretary at the Company’s principal executive offices not later than 90 days in
advance of such meeting or, if later, the seventh day following the first public
announcement of the date of such meeting. Each notice must set forth, among
other things set forth in the Company’s bylaws: (i) the name and address of
the stockholder who intends to make the nomination and of the person or persons
to be nominated; (ii) a representation that the stockholder is a holder of
record of stock of the Company entitled to vote at such meeting and intends to
appear in person or by proxy at the meeting and nominate the person or persons
specified in the notice; (iii) a description of all arrangements or
understandings between the stockholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder; (iv) such other information
regarding each nominee proposed by such stockholder as would be required to be
included in a proxy statement filed pursuant to the proxy rules of the United
States Securities and Exchange Commission; and (v) the consent of each
nominee to serve as a director of the Company if so elected.
Executive
Committee: The Executive Committee, which held one
meeting during 2008 and acted regularly by written consent,
represents the Board of Directors in discharging all of its responsibilities
between board meetings, and may generally exercise all of the powers of the
Board of Directors, except those powers expressly reserved by applicable law to
the Board of Directors, in the management and direction of the business and
conduct of the affairs of the Company, subject to any specific directions given
by the Board of Directors.
Board
of Directors Meetings and Attendance
During
2008, the Company’s Board of Directors held fourteen meetings in addition to the
committee meetings discussed above. Each of the directors attended at least 75%
of the total number of meetings of the Board of Directors and committees on
which he then served. In addition, the Company’s non-management directors held
four formal quarterly meetings without the presence of management (executive
sessions), as well as a number of additional informal meetings without the
presence of management, from time to time, as determined necessary by the Lead
Independent Director.
Directors
are encouraged to attend annual meetings of the Company’s stockholders. The 2008
annual meeting of stockholders was attended by all of our incumbent
directors.
Communications
with the Board of Directors
Stockholders
and other interested parties may communicate with the Company’s Board of
Directors, including its Lead Independent Director, by sending written
communications to the attention of the Corporate Secretary at the Company’s
principal executive offices listed on page 36 of this proxy statement. All
stockholder communications received by the Company are compiled by the Corporate
Secretary and forwarded to the Lead Independent Director, Committee Chairman, or
other directors as appropriate.
Corporate
Governance Guidelines and Director Independence
Our
Corporate Governance Guidelines provide a framework for the Company’s corporate
governance initiatives and cover topics including, director independence,
selection and composition of the Board of Directors and its committees, director
compensation and performance of the Board of Directors. The Nominating and
Corporate Governance Committee is responsible for, among other matters,
overseeing and reviewing the guidelines and reporting and recommending to the
Board of Directors any changes thereto.
The
Corporate Governance Guidelines provide that a majority of the members of the
Company’s Board of Directors must meet the criteria for independence as required
by the NYSE listing standards. As set forth in the Corporate Governance
Guidelines, a director will be independent only if the Board of Directors
determines, after consideration of all relevant facts and circumstances, that
such director is a person who is free from any relationship that would interfere
with the exercise of independent judgment as a member of the Board of Directors.
In making that determination, the Board of Directors has adopted the categorical
standards relating to director independence set forth in Section 303A.02(b)
of the NYSE listing standards.
The Board
of Directors has determined that each of its current members (except for Ken
Campbell, David J. Matlin, and Jeffrey V. Peterson) meet the aforementioned
independence standards. Mr. Campbell and Mr. Matlin do not meet the
aforementioned independence standards because they are employed by
MatlinPatterson Global Advisers LLC, an affiliate of MatlinPatterson, which was
paid an advisory fee of $6.1 million by the Company in connection with the
initial closing of MatlinPatterson’s investment transaction with the
Company. Mr. Peterson does not meet the aforementioned independence
standards because he served as Chairman, Chief Executive Officer and President
of the Company for a portion of 2008.
Lead
Independent Director
The
Company’s Corporate Governance Guidelines provide that the Chairman of the Board
of Directors will serve as the Lead Independent Director; provided, however,
that if the Chairman of the Board of Directors is not independent, the Chairman
of the Nominating and Corporate Governance Committee will serve as the Lead
Independent Director. Our current Chairman of the Board of Directors, Ronald R.
Foell, is independent and serves as our Lead Independent Director. Our Lead
Independent Director is the presiding director at all executive sessions of the
non-management directors.
Code
of Business Conduct and Ethics
The
Company has adopted a Code of Business Conduct and Ethics that applies to all of
the Company’s employees, including its senior financial and executive officers,
as well as the Company’s directors. The Company will disclose any material
waivers of, or amendments to, any provision of the Code of Business Conduct and
Ethics that applies to the Company’s directors and senior financial and
executive officers on its website, www.standardpacifichomes.com through the
“Investor Relations” link under the headings “Corporate Governance” and “Code of
Business Conduct and Ethics” or in a current report on Form 8-K, as
required.
In
addition, the Company has adopted a whistleblower procedure pursuant to which
employees have access to our Board of Directors and senior management to raise
any concerns about unethical business practices and other Company related
concerns in confidence.
Access
to Corporate Governance Documentation and Other Information Available on Our
Website
The
Company’s Corporate Governance Guidelines, Code of Business Conduct and Ethics,
and the charters for each of the Audit, Compensation, Nominating and Corporate
Governance, and Executive Committees are accessible via the Company’s website at
www.standardpacifichomes.com through the “Investor Relations” link under the
heading, “Corporate Governance.” In addition, the procedure for stockholders to
communicate with the Board of Directors is also set forth on our website through
the “Investor Relations” link. You may also request a copy of any of the
foregoing documents, at no cost to you, by writing or calling the Corporate
Secretary at the Company’s principal executive offices. The address and
telephone number of the Company’s principal executive offices are listed on page
36 of this proxy statement.
Transactions
with Related Persons
Our Code
of Business Conduct and Ethics and our Employment of Relatives Policy govern
transactions between the Company and our directors, executive officers, and
their immediate family members. The Code of Business Conduct and Ethics provides
that no director, executive officer, or any of their immediate family members
may, directly or indirectly, sell, buy, lease, or otherwise provide or receive
any goods, property or services from the Company without the approval of our
Lead Independent Director. Our Employment of Relatives Policy provides that the
approval of our Lead Independent Director must be obtained prior to the Company
or any subsidiary hiring, transferring or promoting a relative of a director or
executive officer. These policies do not set forth any categorical standards
that the Lead Independent Director is required to follow when determining
whether to grant or deny approval. Rather, we rely on the good judgment and
common sense of our Lead Independent Director to determine in each instance
whether the proposed transaction is consistent with the principles underlying
our policies.
While the
Company does not have a general policy regarding transactions between the
Company and beneficial owners of five percent or more of the Shares, the terms
of the Stockholder Agreement between the Company and MatlinPatterson (which, as
of the Record Date, held 49% of the voting power of the Shares) provide a
framework pursuant to which the Company’s transactions with MatlinPatterson will
be analyzed. The Stockholder Agreement provides that proposed
transactions with MatlinPatterson or its affiliates, other than certain
acquisition proposals that require the approval of stockholders, will be
required to be pre-approved by a majority of the non-management independent
members of the Board of Directors.
To our
knowledge, during 2008 there were no transactions between the Company and any of
our directors, executive officers, five percent or greater beneficial owners of
Shares, or any of the immediate family members of any of the foregoing persons
that would be required to be reported in this proxy statement, other than as
described immediately below.
MatlinPatterson
Transaction.
On
June 27, 2008, we consummated the initial closing of a transaction with
MatlinPatterson under the Investment Agreement dated May 26, 2008 as
amended (the “Investment Agreement”), pursuant to which MatlinPatterson
(i) purchased 381,250 shares of Senior Preferred Stock for approximately
$381 million, which, upon receipt of stockholder approval on August 18, 2008,
was converted into Series B Preferred Stock, and (ii) exchanged certain
outstanding notes for a warrant that may be exercised to purchase 272,670 shares
of Series B Preferred Stock at a common stock equivalent exercise price of $4.10
per share. MatlinPatterson Global Advisers LLC, an affiliate of
MatlinPatterson, was paid an advisory fee of $6.1 million by the Company in
connection with this initial closing. In addition, as required by the
Investment Agreement, on September 3, 2008, MatlinPatterson was required to
purchase, in the form of Series B Preferred Stock, the common stock equivalent
of the approximately 23 million remaining shares not purchased in the Company’s
50 million share common stock rights offering. On September 3, 2008,
MatlinPatterson purchased such shares, as 69,579 shares of Series B Preferred
Stock, for $69,579,000.
At the
initial closing, the Company and MatlinPatterson also entered into the
Stockholder Agreement, which currently provides as follows:
Board Representation. For so
long as MatlinPatterson owns at least 10% of the total voting power of the
Company, it will be entitled to designate such number of directors to serve on
the Company’s Board of Directors as would be proportionate to the total voting
power beneficially owned by MatlinPatterson and its affiliates, provided that
the number of directors appointed by MatlinPatterson shall never exceed one
person less than a majority of the directors then serving on the Company’s Board
of Directors. To the extent MatlinPatterson and its affiliates decrease their
holdings of Shares of the Company, the Company has the right to request the
resignation of directors designated by MatlinPatterson to maintain such
appointments in proportion to MatlinPatterson’s holdings of Shares.
Corporate Opportunities. As
long as MatlinPatterson, its director designees and their affiliates comply with
the confidentiality obligations in the Stockholders Agreement, the Company has
agreed to renounce certain corporate and investment opportunities that may come
to the attention of MatlinPatterson, its director designees and their
affiliates. Such provisions do not apply to opportunities that come to the
attention of such persons or entities as a result of their position with the
Company or that of their affiliates with the Company or to opportunities offered
to any person who is an officer of the Company.
Pre-Approval. Certain
proposed transactions with MatlinPatterson will be required to be pre-approved
by a majority of the non-management independent directors of the Company’s Board
of Directors.
Amendments to Certain Documents.
The Company has agreed not to amend its certificate of incorporation or
bylaws in any manner inconsistent with the Stockholders Agreement or to make
certain amendments to the Company’s stockholder rights plan.
Standstill and Transfer
Restrictions. MatlinPatterson has agreed to certain standstill provisions
and restrictions on its and its affiliates’ ability to transfer the Series B
Preferred Stock, including a prohibition providing that prior to September 3,
2010, no transfers may be made except for certain transfers to permitted
affiliates that agree to be bound by the Stockholders Agreement. After the
expiration of such period, transfers may be made in certain limited
instances.
Registration Rights.
MatlinPatterson is entitled to demand and piggyback registration
rights.
Mr.
Campbell, the Company’s Chief Executive Officer and a member of the Company’s
Board of Directors, and Mr. Matlin, a member of the Company’s Board of
Directors, are each partners of MatlinPatterson Global Advisers LLC, an
affiliate of MatlinPatterson.
ELECTION
OF DIRECTORS
Our Board
of Directors currently consists of a single class of ten members that are
elected annually. In March 2009 the Nominating and Corporate
Governance Committee recommended, and the Board of Directors elected, to reduce
the Board of Directors to a single class of seven members elected annually as of
the Annual Meeting. The Nominating and Corporate Governance Committee
recommended, and the Board of Directors nominated, seven of the Company’s ten
current directors to stand for election at the Annual Meeting. If
elected, each nominee will serve until the 2010 annual meeting of stockholders
or until the election and qualification of his respective
successor.
Pursuant
to the terms of the Stockholder Agreement between the Company and
MatlinPatterson, MatlinPatterson is entitled to designate up to one less than a
majority of the total number of directors as nominees for board
membership. The Company is required to nominate each director
designated by MatlinPatterson, if the Nominating and Corporate Governance
Committee determines that such nominees possess the characteristics required by
the Company’s governance standards, and to have the Board of Directors recommend
that stockholders vote for the election of each MatlinPatterson designated
director. MatlinPatterson has designated two persons, David J. Matlin and
Kenneth L. Campbell, as director nominees.
MatlinPatterson
is also required to use its reasonable best efforts to elect to the Board of
Directors the independent directors nominated by the Nominating and Corporate
Governance Committee. However, pursuant to the Stockholder Agreement,
MatlinPatterson is required to vote for or against such nominees in the same
proportion as all of the Company’s stockholders (other than MatlinPatterson and
its affiliates) vote.
The
qualifications of each director nominee are described below under the heading
“Nominees for Election.”
THE BOARD OF DIRECTORS RECOMMENDS
THAT STOCKHOLDERS VOTE FOR THE ELECTION OF EACH OF THE NOMINEES
FOR DIRECTOR. Assuming the presence of a quorum, directors will be
elected by a plurality of the vote of the Shares present and entitled to vote at
the Annual Meeting. Abstentions and broker non-votes will have no effect on the
election of directors because such election is by a plurality
vote. Shares held by MatlinPatterson and its affiliates will be voted
for or against such nominees in the same proportion as all of the Company’s
other stockholders vote. Unless instructed otherwise in the proxy, the persons
named on the enclosed proxy card will vote all proxies received by them in favor
of election of the seven nominees described below. The Board of Directors does
not contemplate that any of its proposed nominees will become unavailable for
any reason, but if such unavailability should occur before the Annual Meeting,
proxies will be voted for another nominee selected by the Board of
Directors.
Nominees
for Election
The Board
of Directors has nominated Kenneth L. Campbell, Bruce A. Choate, James L. Doti,
Ronald R. Foell, Douglas C. Jacobs, David J. Matlin, and F. Patt Schiewitz for
election as directors at the Annual Meeting. The information set forth below as
to each nominee has been furnished by the nominee.
|
|
||||
|
Name
and Present Position,
if
any, with the Company
|
Age
|
Period
Served as Director or Executive
Officer
of the Company and Other Business
Experience During
the Past Five Years
|
||
|
Kenneth
L. Campbell(4)
|
52
|
Director
since July 2008, Chief Executive Officer and President since December
2008. Partner of MatlinPatterson Global Advisers LLC, a private
equity firm, since 2007. From May 2006 to May 2007, Mr. Campbell
served as Chief Executive Officer and Director of Ormet Corporation, a
U.S. producer of aluminum. Prior to that, Mr. Campbell served as
Chief Financial Officer of RailWorks Corporation, a provider of track and
transit systems construction and maintenance services, from December 2003
to May 2006. Before joining MatlinPatterson, Mr. Campbell spent a
period of over twenty years serving in various restructuring roles at
companies with significant operational and/or financial
difficulties.
|
||
|
Bruce
A. Choate(1)
|
61
|
Director
since May 2007. Since December 2002, Mr. Choate has served as
Chief Executive Officer, President and Director of Watson Land Company, a
privately-held real estate investment trust (“REIT”) located in Carson,
California. Prior to December 2002, Mr. Choate served since
1991 as Watson Land Company’s Chief Financial Officer. Mr.
Choate also serves on the Board of Directors of AvalonBay Communities,
Inc., a publicly traded apartment REIT, and is the Chairman of AvalonBay’s
investment and finance committee.
|
||
|
James
L. Doti(2)
|
61
|
Director
since May 1995. President of Chapman University since 1991 and
the Donald Bren Distinguished Chair of Business and
Economics. Dr. Doti is also a Director of First American
Corporation, a title insurance and financial services company, and
Fleetwood Enterprises, Inc., a producer of manufactured housing and
recreational vehicles.
|
||
|
Ronald
R. Foell(2)(4)
|
79
|
Director
since 1967, Chairman of the Board of Directors since December
2008. Mr. Foell served as President of the Company from 1969
until October 1996. Since October 1996 Mr. Foell has been a
private investor.
|
||
|
Douglas
C. Jacobs(1)(2)(4)
|
67
|
Director
since May 1998. Executive Vice President - Finance and Chief
Financial Officer of Brooklyn NY Holdings LLC, a privately held investment
advisory company established to manage the assets of a family and a family
trust, including the Cleveland Browns, a professional football team, since
January 1, 2006. Prior to that, Executive Vice President -
Finance, Chief Financial Officer and Treasurer of the Cleveland Browns
from March 2001 to December 2005. Prior to that Mr. Jacobs,
among other things, served as a Partner of the accounting firm of Arthur
Andersen LLP. Mr. Jacobs is also a Director of Stoneridge,
Inc., a designer and manufacturer of electronic systems for motor
vehicles, and a member of its audit committee.
|
||
|
David
J. Matlin
|
47
|
Director
since July 2008. Chief Executive Officer of MatlinPatterson Global
Advisers LLC, a private equity firm, since 2002. Prior to July 2002,
Mr. Matlin was a Managing Director at Credit Suisse First Boston, and head
of its Distressed Securities Group since its formation in 1994.
Prior to joining CSFB, Mr. Matlin was Managing Director of distressed
securities and a founding partner of Merrion Group, L.P., a successor to
Scully Brothers & Foss L.P. (1988-1994). Mr. Matlin is also a
Director of Goss Graphics, Global Aero Logistics, Thornburg Mortgage, Inc.
and serves as an Advisory Board member of Wharton Private Equity Partners
(WPEP).
|
||
|
F.
Patt Schiewitz(3)
|
58
|
Director
since May 2007 and a private investor since March 2007. Mr.
Schiewitz served as a Managing Director - Investment Banking at JP Morgan
Securities, Inc. from 2004 to March 2007, leading JP Morgan’s National
Homebuilding Team. Prior to that, from 1991 to 2004, Mr.
Schiewitz led the National Homebuilding Team at Bank One and First Chicago
NBD.
|
__________________________
9
|
(1)
|
Member
of the Audit Committee of the Board of
Directors.
|
|
(2)
|
Member
of the Nominating and Corporate Governance Committee of the Board of
Directors.
|
|
(3)
|
Member
of the Compensation Committee of the Board of
Directors.
|
|
(4)
|
Member
of the Executive Committee of the Board of
Directors.
|
STOCKHOLDER
PROPOSAL CONCERNING MAJORITY VOTING FOR THE ELECTION OF THE BOARD OF
DIRECTORS
The
Company has received a stockholder proposal from Amalgamated Bank’s LongView
SmallCap 600 Index Fund, located at 275 Seventh Avenue, New York, NY 10001. The
proponent has requested that the Company include the following proposal in its
Proxy Statement for the 2009 Annual Meeting of Stockholders and, if properly
presented, this proposal will be voted on at the Annual Meeting. The proponent
has advised us that it beneficially owns approximately 53,502 shares of Common
Stock. The stockholder proposal is quoted verbatim in italics
below.
THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE AGAINST PROPOSAL NO.
2.
Proposal
No. 2—MAJORITY VOTING STOCKHOLDER PROPOSAL
RESOLVED:
That the shareholders of Standard Pacific Corp. (the "Company") hereby request
that the board of directors amend the Company's governing documents and take
such other steps as may be necessary to provide that at each shareholder meeting
where there is an uncontested election for the board of directors, a director
shall be elected by a majority of the votes cast with respect to that director,
with any incumbent director who fails to achieve such a majority vote obliged to
tender his or her resignation and the board obliged to decide and state publicly
within 90 days whether it has accepted that resignation.
Supporting
Statement
Standard
Pacific Corp. uses a "plurality vote" standard to elect directors. What this
means is that in an uncontested election, there is no way for shareholders to
vote against an individual candidate; shareholders can merely "withhold" support
for that candidate, who will be elected anyway. In effect, plurality voting
allows a candidate to be elected even if a substantial majority of shares are
not affirmatively voted in favor of that candidate.
This
proposal asks the Board to adopt a "majority vote" policy for electing
directors. This would mean that nominees for the board must receive a majority
of the votes cast in order to be elected or re-elected to the board, i.e., the
number of votes cast "for" a nominee must exceed the number of votes cast
"against" a nominee. If the only options are to vote ""yes" or to "withhold"
support, then a "withhold" vote would count as a vote "against" the
nominee.
In
our view, an effective majority vote policy should also require incumbent
directors who fail to win re-election to resign from the board. Without such a
provision, the failure of a candidate to achieve a majority might be viewed as
creating a vacancy, and state law may allow an incumbent to fill that "vacancy"
until his or her successor is chosen.
Allowing
a director to hold onto his or her seat in that situation undercuts the goal of
majority voting, which is why resignations are required at companies that adopt
majority voting and why in that situation a board must decide and announce
within 90 days whether it will accept the resignation.
Majority
voting has been adopted by a majority of the Company's peers in the S&P 500
index. In our view, such a "majority vote" standard in director elections would
give shareholders a more meaningful role in the director election process. We
believe that Standard Pacific Corp. should make appropriate changes to its
governing documents to empower shareholders here.
We
urge your support for
this important director election reform.
Management’s
Statement in Opposition to Proposal No. 2
Overview.
The Company’s
directors are currently elected by a “plurality” vote, which means that, with
respect to the number of available Board seats, the nominees who receive the
greatest number of votes are elected. Many large public companies
incorporated in Delaware (the Company’s state of incorporation) and elsewhere
use a plurality voting standard. Under plurality voting, our
stockholders have a history of electing strong and independent
Boards. Proposal 2 asks the Company’s Board to amend the Company’s
bylaws to change this standard in uncontested elections to a majority vote
standard. The Board believes the plurality vote standard, which is the default
standard under Delaware law, continues to be the best standard for electing
directors.
Recognized
Excellence in Corporate Governance and Robust Director Nominee Identification
Process.
The
Company has demonstrated excellence in corporate governance. As measured by
RiskMetrics (formerly Institutional Shareholder Services), in its “Corporate
Governance Quotient” evaluation, as of February 2, 2009, the Company’s corporate
governance was better than that of 73.7% of the S&P 600 and 85.6% of the
companies in its industry group (Consumer Durables and Apparel). The
strong corporate governance processes that the Company already has in place,
among other things, are designed to identify and propose director nominees who
will serve the best interests of the Company and its
stockholders. Director nominees are evaluated and recommended
for election by the Board’s Nominating and Corporate Governance Committee, which
is comprised solely of independent directors. The Company’s Corporate
Governance Guidelines set forth criteria for the committee to follow when
identifying and proposing potential director nominees. These
criteria, as well as the committee’s procedures for considering and evaluating
potential director nominees identified by stockholders, are described under the
heading “Nominating and Corporate Governance Committee” beginning on page 4 of
this proxy statement.
Applying
the Proposed Majority Voting Standard to the Company’s Historical Elections of
Directors Would Not Modify the Outcome of a Single Election.
The Board
believes this proposal is unnecessary given our ’stockholders’ historic voting
record in favor of the Board’s director nominees. Reflecting the strength of the
Company’s current voting process, the Board’s director nominees have always
received a majority vote. There has never been a stockholder meeting at which a
majority vote standard would have impacted the outcome of the
election.
Adopting
the Proposed Majority Voting Standard May Not Achieve its Desired
Intent.
The Board
believes this proposal may not achieve its desired intent. While the concept of
majority voting for the election of directors may initially appear
straightforward and democratic, the Board believes the majority vote standard
recommended by this proposal may not achieve the proponent’s goal of electing
directors by a majority vote and removing those directors who do not receive a
majority vote. For example, if a non-incumbent nominee in an
uncontested election fails to receive a majority vote for election, the result
will be a vacancy on the Board that will be filled by the remaining members of
the Board, not stockholders. Alternatively, if an incumbent director
in an uncontested election fails to receive a majority vote for re-election,
under Delaware law and the Company’s bylaws, that director, although not elected
by the stockholders, nonetheless remains on the Board indefinitely as a
“holdover” until (i) the election of a successor at a subsequent stockholder
meeting, or (ii) the director’s resignation. A resignation results in either a
smaller Board or in a vacancy being filled by the Board, not the
stockholders. The Board does not believe that these results are
beneficial to stockholders, nor do they improve accountability. In
fact, such vacancies could result in the Company’s failure to meet the NYSE’s
continuing listing requirements relating to the independence and financial
literacy of directors or SEC requirements relating to audit committee financial
experts.
Adopting
the Proposed Majority Voting Standard in Combination with a Proposed NYSE Rule
Change May Give Unintended Power to “Single-Issue” Minority
Stockholders.
Under
current NYSE rules, a stockholder that holds shares through a broker (or other
custodian) is asked to provide instructions to the broker as to how to vote the
shares; however, in the event instructions are not provided, the broker is
provided the discretion to vote the shares on the account holder’s
behalf. Under a proposed NYSE rule, brokers would no longer be able
to vote shares for which they have not received voting instructions.
Historically, a significant number of stockholders have failed to provide voting
instructions to their brokers. Therefore, if the proposed NYSE rule change is
approved in its current form, it is likely that fewer votes would be cast in the
Company’s elections of directors. If this proposed NYSE rule change is combined
with the proposed majority vote proposal (which provides that directors are to
be elected by the majority of the votes actually cast in the election), a
single-issue activist would theoretically need to mobilize only a minority of
the Company’s stockholders to achieve “NO” votes from a majority of the votes
cast. The Board believes it is undesirable to provide a minority of
the Company’s stockholders the power to cause the actual failure of director
elections.
Under
the Company’s Current Plurality Voting Standard the Board Seriously Evaluates
the Rationale Behind “Withhold Vote” Campaigns.
The
Company’s current plurality vote standard allows stockholders to register
dissatisfaction by means of a “withhold” vote for one or more directors. The
Board understands the importance of examining the rationale for “withhold”
campaigns and will seriously evaluate whether it needs to make changes when a
director or group of directors receives a significant number of “withhold”
votes.
Active
Participation in a Well-Designed Process for the Election of Directors Is
Important to the Company.
Active
stockholder participation in a well-designed process for the election of
directors is important to the Company. In fact, the Board responded to
stockholder action regarding the election of directors in 2008 when it approved
an amendment to the Company’s charter to eliminate a classified Board structure.
Prior to such time, directors were elected for a three-year term. As a result of
the Board’s responsive action, all directors are now subject to election or
re-election by the stockholders each year.
Board
Recommendation
For the
reasons stated above, the Board believes that its current policies with regard
to the identification and election of directors ensure that the Company will
continue to be served by a strong and independent Board and that modifying its
current plurality voting standard is not in the best interests of the Company
and its stockholders.
THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE AGAINST THE APPROVAL OF
PROPOSAL NO. 2.
Assuming
the presence of a quorum at the Annual Meeting, under Delaware law, the
affirmative vote of the holders of a majority of the Shares represented and
entitled to vote on the proposal is necessary for its approval. As a result,
abstentions will be treated as votes against the proposal, whereas broker
non-votes will have no effect on the outcome of the vote. Unless instructed
otherwise in the proxy, the persons named on the accompanying form of proxy will
vote all proxies against the proposal. Please
note that if the proposal passes, the Company may consider whether it is
appropriate to take the requested action, but it will not be legally obligated
to do so.
STOCKHOLDER
PROPOSAL CONCERNING THE ADOPTION OF QUANTITATIVE GREENHOUSE GAS EMISSIONS
GOALS
The
Company has received a stockholder proposal from The Nathan Cummings Foundation
(“NCF”), located at 475 Tenth Avenue, 14th Floor, New York, New York 10018. NCF
has requested that the Company include the following proposal in its Proxy
Statement for the 2009 Annual Meeting of Stockholders, and if properly presented
this proposal will be voted on at the Annual Meeting. NCF has advised us that it
beneficially owns approximately 170 shares of the Common Stock. This stockholder
proposal has been co-sponsored by the General Board of Pension and Health
Benefits of The United Methodist Church, located at 1201 Davis Street, Evanston,
Illinois 60201-4118, which has advised us that it beneficially owns 36,830
shares of Common Stock. The stockholder proposal is quoted verbatim in italics
below.
THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE AGAINST PROPOSAL NO.
3.
Proposal
No. 3—GREENHOUSE GAS RESOLUTION
The
Intergovernmental Panel on Climate Change (IPCC) recently concluded that warming
of the climate system is unequivocal and that human activity is the main cause.
Debate surrounding climate change now focuses not on whether a problem exists
but rather on the best means for abatement and adaptation.
The
rise in average global temperatures resulting from climate change is expected to
have significant adverse impacts. According to Business Week, many scientists
agree that the warmer temperatures resulting from climate change are causing
more powerful storms and perhaps intensifying extreme weather events including
droughts and wild fires. Thermal expansion and melting ice sheets are expected
to lead to rising sea levels, with significant implications for coastal
communities. Rising temperatures will also impact fresh water supplies.
California’s Department of Water Resources, for instance, has stated that,
“Adapting California’s water management systems to climate change presents one
of the most significant challenges for the 21st
century.”
Climate
change also has important economic implications. The Stern Review, often cited
as the most comprehensive overview of the economics of climate change, estimated
that the cumulative economic impacts of climate change could be equivalent to a
loss of up to 20% of average world-wide consumption if action is not taken
quickly. A more general pronouncement in the IPCC’s report, Climate Change 2007:
Impacts, Adaptation and Vulnerability, observed that “Taken as a whole, the
range of published evidence indicates that the net damage costs of climate
change are likely to be significant and to increase over time.”
According
to the Washington Post, “Buildings are the largest source of the greenhouse-gas
emissions that are causing global warming, and in the United States, half of
building-related emissions are from houses.” The EPA estimates that the
residential end-use sector accounted for 21% of CO2 emissions from fossil fuel
combustion in 2005.
With
residential end-use accounting for such a high proportion of GHG emissions
stemming from fossil fuel combustion, a number of recent studies have focused on
energy efficiency improvements in residential dwellings as a potential source of
emission reductions. One recent study in The McKinsey Quarterly found that
nearly a quarter of cost-effective GHG abatement potential involves
efficiency-enhancing measures geared at reducing demand in the buildings and
transportation sectors. A second McKinsey study concluded that the residential
sector represents the single-largest opportunity to raise energy productivity,
noting that, “The adoption of available technologies (including high-efficiency
building shells, compact fluorescent lighting, and high-efficiency water
heating) would cut… end-use demand for energy by 32 QBTUs in 2020, equivalent to
5 percent of global end-user demand in that year.”
RESOLVED:
Shareholders
request that the Board of Directors adopt quantitative goals, based on available
technologies, for reducing total greenhouse gas emissions from the Company’s
products and operations and report to shareholders by December 31, 2009, on
its plans to achieve these goals. Such a report will omit proprietary
information and be prepared at reasonable cost.
Management’s
Statement in Opposition to Proposal No. 3
Overview.
The
Company is committed to remaining an environmentally responsible builder and to
supporting the National Association of Home Builders’ (“NAHB”) green building
initiative. While energy efficiency is a significant consideration in the design
of each of our homes, the Board believes that the Company’s adoption of
quantitative goals to reduce total greenhouse gas emissions will require a
complex and expensive technical analysis and will ultimately place the Company
at a competitive disadvantage when competing to sell homes against other
homebuilders that have not adopted such goals and with the resale home
market.
Company
Commitment to Environmental Responsibility.
The
Company is committed to being an environmentally responsible builder. As a
member of the local communities in which we build, and as a national
homebuilder, we strive to “do the right thing” while maximizing the value we
deliver to our homebuyers. We recognize the potential positive role the
homebuilding industry can play in many environmental matters, including the
reduction of greenhouse gas emissions, and are committed to working with the
NAHB to support the development and implementation of the NAHB’s green building
initiative.
We have
long recognized the benefits of improving the efficiency of our homes. On a
project-by-project basis, our division managers continually strive to improve
the efficiency of our designs and regularly evaluate the relative costs and
benefits of incorporating various energy efficient technologies into our
projects. To that end, many of our developments offer:
|
·
|
Energy
Star rated appliances;
|
|
·
|
energy
efficient heating and air conditioning
systems;
|
|
·
|
programmable
digital thermostats (which can reduce energy
consumption);
|
|
·
|
energy
efficient low-e dual-glazed
windows;
|
|
·
|
high-efficiency
water heaters;
|
|
·
|
fully-insulated
exterior walls and exterior ceilings at living areas;
and
|
|
·
|
efficient
time and temperature controlled recirculating hot water
systems.
|
The
Stockholder Proposal Requires an Unwise Use of Limited Company Resources and
Will Result in Competitive Disadvantage.
The
stockholder proposal requests that the Board adopt quantitative goals for
reducing total greenhouse gas emissions, and report to stockholders on its plans
to achieve these goals. Adoption of this proposal would require the Company to
hire outside experts to conduct numerous and complex analyses of each of our
product types at each of our 169 current projects (and of each new proposed
project type and product). These analyses would necessarily
include:
|
·
|
preparation
of a report on the current level of greenhouse gas emissions from each
project and each product type at each
project;
|
|
·
|
preparation
of a survey of available building technologies that indicates the amount
of greenhouse gas emissions that would result from the use of each such
technology (taking into account the unique conditions present at each of
our 169 current project sites);
|
|
·
|
an
analysis of the many federal, state and local rules and regulations
applicable to each of our projects to determine which technologies would
be permitted by local building codes and other regulations to be utilized
at each project site;
|
|
·
|
preparation
of a report recommending the technologies to be utilized at each project
site and analyzing the impact on building costs related to the use of such
technologies;
|
|
·
|
preparation
of a market study for each project site indicating whether the local
homebuyer would be willing to bear the likely increase in home price
resulting from use of any new
technology;
|
|
·
|
preparation
of a report, in light of the above reports, indicating the quantitative
amount by which the Company would reduce greenhouse gas emissions as a
result of adopting the recommended technologies;
and
|
|
·
|
preparation
of a final report to stockholders indicating the quantitative goals
adopted by the Board and presenting a final plan to implement those
goals.
|
While the
analyses themselves would be complex and expensive, the adoption of quantitative
goals to reduce the Company’s greenhouse gas emissions would place the Company
at a competitive disadvantage. During the current market downturn, we have
increasingly been forced to reduce sales prices and increase incentives to
compete with the growing supply of homes offered for sale by other homebuilders
and on the resale market. Adoption of the technologies necessary to achieve
quantitative goals to reduce greenhouse gas emissions would necessarily result
in increases to our costs to build homes, costs that we would need to pass on to
the homebuyer. If we were forced to increase our home prices, we would be placed
at a competitive disadvantage to other homebuilders who have not adopted such
goals and with homes for sale on the resale market.
Board
Recommendation
While
energy efficiency is a significant consideration in the design of each of our
homes, the Board believes that the Company’s adoption of quantitative goals to
reduce total greenhouse gas emissions will require a complex and expensive
technical analysis and will ultimately place the Company at a competitive
disadvantage when competing to sell homes against other homebuilders that have
not adopted such goals and with the resale home market.
THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE AGAINST THE APPROVAL OF
PROPOSAL NO. 3.
Assuming
the presence of a quorum at the Annual Meeting, under Delaware law, the
affirmative vote of the holders of a majority of the Shares represented and
entitled to vote on the proposal is necessary for its approval. As a result,
abstentions will be treated as votes against the proposal, whereas broker
non-votes will have no effect on the outcome of the vote. Unless instructed
otherwise in the proxy, the persons named on the accompanying form of proxy will
vote all proxies against the proposal. Please
note that if the proposal passes, the Company may consider whether it is
appropriate to take the requested action, but it will not be legally obligated
to do so.
RATIFICATION
OF THE APPOINTMENT OF ERNST & YOUNG LLP
AS
THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit
Committee has appointed Ernst & Young LLP as the Company’s independent
registered public accounting firm for 2009, and the Board of Directors and the
Audit Committee recommend that the stockholders ratify this
appointment.
Stockholder
ratification of the selection of Ernst & Young LLP as the Company’s
independent registered public accounting firm for 2009 is not required. However,
the Board of Directors and the Audit Committee are submitting the matter to
stockholders for ratification as a matter of good corporate practice. If
stockholders fail to ratify the appointment of Ernst & Young LLP as the
Company’s independent registered public accounting firm for 2009, the Audit
Committee will consider the appointment of another independent registered public
accounting firm. Even if the selection of Ernst & Young LLP is
ratified, the Audit Committee may terminate the appointment of Ernst &
Young LLP as our independent registered public accounting firm without the
approval of stockholders whenever the Audit Committee deems such termination
appropriate.
Ernst &
Young LLP served as our independent registered public accounting firm during
2008 and has served as our independent public accountants since 2002.
Representatives of Ernst & Young LLP are expected to attend the Annual
Meeting and will be available to respond to appropriate questions, and to make a
statement if they wish to do so. Amounts paid by us to Ernst & Young
LLP for audit and non-audit services rendered in 2008 and 2007 are disclosed on
page 34.
Board
Recommendation
THE
BOARD OF DIRECTORS AND THE AUDIT COMMITTEE RECOMMEND THAT STOCKHOLDERS VOTE
FOR RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY’S INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR 2009.
Assuming
the presence of a quorum at the Annual Meeting, under Delaware law, the
affirmative vote of a majority of the Shares represented and entitled to vote on
the proposal is necessary for its approval. As a result, abstentions will be
treated as votes against the proposal, whereas broker non-votes will have no
effect on the outcome of the vote. Unless instructed otherwise in the proxy, the
persons named in the accompanying form of proxy will vote all proxies for the
proposal.
Each
October, the Compensation Committee reviews the Company’s non-management
director compensation program with the goal of maintaining a program that
comports with market norms and that aligns the interests of non-management
directors with those of stockholders. This review includes an examination of
publicly available information regarding compensation paid to non-management
directors at the other publicly traded homebuilders in the peer group examined
by the Board of Directors when determining executive officer compensation (Toll
Brothers, Hovnanian Enterprises, Beazer Homes USA, MDC Holdings, Ryland Group
and Meritage Homes) and, from time to time, a discussion with an outside
compensation consultant (although no such discussions were held in
2009).
In 2008,
each non-management director was eligible to receive total annual compensation
valued at $180,000, consisting of an annual cash retainer of $80,000 and an
annual grant of Common Stock valued at $100,000. The Compensation Committee has
decided to continue this program for 2009. The Compensation Committee
believes the total amount of compensation is consistent with market norms and
that the mix between cash and stock strikes the appropriate balance between
providing non-management directors with a significant portion of their
compensation in stock to better align their interests with our other
stockholders, while providing them sufficient cash to fund income taxes
associated with their receipt of the stock.
The
annual cash retainer is paid in four equal installments on
February 15, May 15, August 15 and November 15.
The annual stock grant is paid in quarterly installments in shares of Common
Stock that are priced at the closing price of Common Stock on each of
March 31, June 30, September 30 and December 31.
The stock is fully vested on the date of grant. As a reflection of a greater
workload, our Lead Independent Director receives an additional $20,000 annual
cash retainer, payable quarterly in the same manner and at the same time as the
general cash retainer paid to all non-management directors. Upon election or
appointment to the Board of Directors, each new non-management director receives
a grant of 5,000 shares of restricted stock which vests in full one year after
the date of grant.
2008
NON-EMPLOYEE DIRECTOR COMPENSATION
|
Name
|
Fees Earned
or
Paid in
Cash($)
|
Stock
Awards(s)
(2)(3)
|
Total($)
|
|||||||||
|
(a)
|
(b)
|
(c)
|
(h)
|
|||||||||
|
Bruce
A. Choate
|
$ | 80,000 | $ | 135,350 | $ | 215,350 | ||||||
|
James
L. Doti
|
$ | 80,000 | $ | 128,280 | $ | 208,280 | ||||||
|
Ronald
R. Foell
|
$ | 95,000 | $ | 128,280 | $ | 223,280 | ||||||
|
Douglas
C. Jacobs
|
$ | 80,000 | $ | 131,815 | $ | 211,815 | ||||||
|
David
J. Matlin(1)
|
$ | 40,000 | $ | — | $ | 40,000 | ||||||
|
Larry
D. McNabb
|
$ | 80,000 | $ | 131,815 | $ | 211,815 | ||||||
|
J.
Wayne Merck
|
$ | 80,000 | $ | 135,350 | $ | 215,350 | ||||||
|
F.
Patt Schiewitz
|
$ | 80,000 | $ | 135,833 | $ | 215,833 | ||||||
___________________________________
|
(1)
|
Mr.
Matlin has elected to decline all equity compensation that he would
otherwise be entitled to receive as a member of the Board and is also
required to assign all cash compensation he receives to
MatlinPatterson.
|
|
(2)
|
The
amount we have reflected in this column includes compensation cost
recognized in the Company’s financial statements with respect to awards
granted in previous fiscal years and the current fiscal year, calculated
in accordance with FAS 123R. The grant date fair value of each award
granted in 2008 to Messrs. Choate, Doti, Foell, Jacobs, McNabb, Merck and
Schiewitz was $100,000 each. The methodology and assumptions used to
calculate the valuation of the stock awards granted to non-management
directors are set forth in Note l7, “Stock Incentive Plans,” to our
consolidated financial statements contained in our Annual Report on Form
10-K for the year ended December 31,
2008.
|
|
(3)
|
No
stock options were granted to our non-employee directors in 2008. As of
December 31, 2008, Messrs. Foell, Jacobs and McNabb held options to
purchase 34,000, 34,000, and 30,000 shares of Common Stock,
respectively.
|
Non-Employee Director Stock Ownership
Guidelines
The Board
of Directors has adopted Non-Employee Director Stock Ownership Guidelines for
the purpose of further aligning the interests and actions of the Company’s
directors with the interests of the Company’s other stockholders. Under the
guidelines, each non-employee member of the Company’s Board of Directors, other
than directors who are employees of any of our 10% or greater stockholders or
their affiliates, is required to own 20,000 shares of our Common Stock. Each
such director is required to reach full compliance with the guidelines within
three years of the date he or she becomes a director. As of December 31,
2008, all of the Company’s directors subject to the guidelines exceeded them.
The Director Stock Ownership Guidelines are accessible via the Company’s website
at www.standardpacifichomes.com through the “Investor Relations” link under the
heading, “Corporate Governance.”
Larry D.
McNabb (Chairman), J. Wayne Merck, Jeffrey V. Peterson, and F. Patt Schiewitz
all served as members of the Company’s Compensation Committee during 2008. There
are no Compensation Committee interlocks between the Company and other entities
involving the Company’s executive officers and directors.
Compensation
Philosophy and Objectives
The
overall objectives of our executive compensation program are to (1) attract
and retain key executives, (2) support our business strategy through a “pay
for performance” philosophy, by providing incentives to our executives to
achieve the Company’s strategic and financial goals, which are designed to
ultimately enhance the value of the Shares, and (3) align the long-term
interests of our executives with those of our other stockholders.
Core
Principles. Consistent with these objectives, the
Compensation Committee of the Board of Directors (the “Committee”) has developed
its compensation program for executive officers, including the Company’s named
executive officers, on the following core principles:
|
·
|
The
Company’s executives should receive a base salary that is generally
competitive with those paid by other publicly held homebuilding companies
with consideration given to the executives’ experience, duties,
responsibilities and prior contribution to the
Company.
|
|
·
|
Annual
incentive opportunities should represent a significant portion of total
compensation for executives and should provide for variations in operating
and individual performance.
|
|
·
|
Stock
options should be used so that our executives have a financial interest in
the creation of long-term stockholder value and to encourage ownership of
the Company’s equity by our executives. In addition, our executives should
be encouraged to maintain a requisite level of stock ownership. These
components directly align the executives’ interests and rewards with the
risks and opportunities of the Company’s other stockholders, by exposing
the executives to meaningful downside risk and upside
potential.
|
|
·
|
The
overall level of total compensation for executives should be reasonable in
relation to and competitive with the compensation paid to similarly
situated executives at other publicly-traded homebuilding companies,
subject to variation for factors such as the individual executive’s
experience, duties, responsibilities and prior contribution to the
Company.
|
Compensation
Allocation. While the above represent the
Committee’s core principles over the long term, the Committee has no
pre-established policy or target for the allocation between these elements of
compensation. In the short term, in light of market conditions and
the Company’s current financial condition, the Committee has decided to
de-emphasize annual incentive opportunities, focusing instead on longer term
compensation designed to incentivize the Company’s executives to remain
employees of the Company through the current downturn.
Section 162(m). The
Committee generally attempts to structure executive compensation in a manner so
as to minimize the impact of Section 162(m) of the Internal Revenue Code.
Under Section 162(m), a company may not deduct non-performance based
compensation in excess of $1,000,000 paid to a named executive officer. The
Committee believes that it is generally in the Company’s best interests for its
executives’ compensation to meet the requirements of
Section 162(m). Accordingly, the Committee has taken appropriate
actions, to the extent it believes feasible, to preserve the deductibility of
annual incentive and long-term performance awards. However, notwithstanding this
general policy, the Committee also believes that there may be circumstances in
which the Company’s interests are best served by maintaining flexibility in the
way compensation is provided, whether or not compensation is fully deductible
under Section 162(m).
Procedure
for Setting Executive Compensation
The
Committee is responsible for all aspects of executive compensation, including,
among other things:
|
·
|
establishing
the Company’s compensation philosophy, objectives and
policies;
|
|
·
|
reviewing
and approving all elements and levels of the compensation and benefits of
the Company’s executive officers;
|
|
·
|
annually
appraising the performance of the Chief Executive Officer and providing
developmental feedback to the Chief Executive Officer and, when
appropriate, to the other executive officers of the Company;
and
|
|
·
|
administering
the Company’s compensation plans, including its stock incentive
plans.
|
Each of
the members of the Committee is an independent director.
From time
to time the Committee has retained a compensation consultant to provide the
Committee with benchmarking data, input on best practices and other developments
in compensation, and to otherwise assist the Committee with its duties. In 2008,
the Committee engaged Towers Perrin to assist the Committee in re-evaluating the
Company’s peer group for compensation comparisons and to analyze short and
long-term trends in compensation practices within this peer group. Following
this analysis, at the recommendation of Towers Perrin, the Company redefined its
peer group to include Toll Brothers, Hovnanian Enterprises, Beazer Homes USA,
MDC Holdings, Ryland Group and Meritage Homes. While the Committee reviewed peer
group compensation data during 2008, this data did not have a meaningful impact
on the 2009 compensation plans established for our executives.
The
Committee generally meets on a quarterly basis, at year-end in a special
meeting, and from time to time at additional special meetings on an as-needed
basis. While the Company’s Chief Executive Officer generally attends Committee
meetings, the Committee also meets in executive session without management, from
time to time as it deems appropriate. Compensation matters are also discussed at
executive sessions of the full board, where both Committee members and other
independent members of the Board of Directors are present without
management.
The
Committee makes compensation decisions for all of the Company’s executive
officers, including the named executive officers. While the Committee evaluates
performance, compensation levels and compensation program structure throughout
the year, the Committee generally meets in December of each year to begin the
process of setting salary and annual incentives for the following year. This
process is generally completed in January or February once actual financial
results are known. This timing allows the Committee to consider prior
performance and to satisfy the requirements of Section 162(m) necessary to
achieve tax deductibility of performance based bonus payments, while maximizing
the incentive effect of any bonuses tied to annual performance. During the year,
the Committee may also grant long-term incentives, which historically have been
in the form of equity awards, if it determines that these are advisable to
reward or motivate employees.
The
Company’s Chief Executive Officer annually reviews each executive officer’s
performance with the Committee and makes recommendations to the Committee with
respect to the appropriate base salary and bonus program for each executive
officer. The Company’s Chief Executive Officer also makes recommendations for
equity awards to the executive officers. The Committee takes these proposals
into consideration, among other matters, when making compensation
decisions.
Compensation
Components
Base Salaries. Base salaries
for the named executive officers are established based on the scope of their
responsibilities and relevant experience and prior contribution to the Company,
taking into account compensation for similarly situated executives paid by peer
companies in the public homebuilding group. The Committee believes base salaries
should be adequate to attract and retain management, and to also provide a
reasonable base level of compensation for years in which no, or a reduced, bonus
may be earned.
Annual Bonuses. In
the short term, in light of market conditions and the Company’s current
financial condition, the Committee has decided to de-emphasize annual incentive
opportunities, including annual cash bonuses, focusing instead on longer term
compensation designed to incentivize the Company’s executives to remain
employees of the Company through the current downturn.
Equity
Compensation. Equity awards are used by the Committee as a
form of long-term compensation and to encourage executive ownership of the
Common Stock to further the Company’s emphasis on pay for performance and to
help align executives’ interests with those of the Company’s other shareholders.
In addition, because the equity compensation generally vests over an extended
timeframe, this compensation component encourages the Company’s executive
officers to remain with the Company for long and productive careers, maximizing
the value to the Company of their years of experience.
Perquisites and Other Benefits.
The Committee believes that the Company’s named executive officers should
participate in the same benefit programs as the Company’s other
employees. To that end, the Committee elected to discontinue the
deferred compensation plan and financial planning benefits it provided to the
Company’s named executive officers in 2008 and prior years. Consistent with this
philosophy, the named executive officers participate in the Company’s employee
benefit plans on the same terms as other employees. These plans include medical
and dental insurance, life insurance, disability coverage and the 401(k)
Plan.
2008
and 2009 Named Executive Officer Compensation
CEO
Compensation. Kenneth L. Campbell has elected not to receive
compensation in connection with his engagement as our President and Chief
Executive Officer. While Mr. Campbell will indirectly benefit from
the Company’s performance through his ownership interest in an affiliate of our
largest stockholder, MatlinPatterson, Mr. Campbell does not receive any
additional remuneration from MatlinPatterson or its affiliates for serving as
the Company’s President and Chief Executive Officer or as a member of its Board
of Directors. The Company does reimburse Mr. Campbell for travel,
temporary living, and other reasonable business expenses related to his
engagement as our President and Chief Executive Officer.
Base Salaries. In
light of the challenging market conditions currently facing the Company and the
homebuilding industry generally, the Committee decided to maintain the freeze on
executive officer base salaries it began in 2006 (subject to adjustments for
promotions). As a result, the base salaries of the named executive officers who
are continuing employment with the Company in 2009 are as
follows: Mr. Campbell $0, Mr. Stowell $750,000 and Mr. Dickson
$365,000.
Annual Bonuses. In
light of market conditions and the Company’s current financial condition, the
Committee decided to de-emphasize annual incentive opportunities. The
Committee has determined that it will not establish formula annual bonus
programs for its executive officers in 2009, but rather will retain the
flexibility to pay them discretionary bonuses as it determines is appropriate,
taking into account the Company’s financial condition and the executive’s
performance.
For 2008,
Mr. Stowell waived his annual bonus in light of the Company’s financial
performance and current market conditions. Mr. Scarborough and Mr. Krah, who
separated from the Company in March and July 2008, respectively, did not receive
a bonus for 2008. Mr. Peterson, who separated from the Company in
December 2008, received a cash bonus of $3,000,000 in recognition of the
significant role he played in helping the Company to close the MatlinPatterson
transaction and the related common stock rights offering, which resulted in a
total equity infusion into the Company of approximately $662 million. Mr. Parnes
and Mr. Halvorsen separated from the Company in February 2009. As
part of a comprehensive settlement of various employment related claims each had
brought against the Company, including claims pursuant to change in control
agreements and for 2008 bonuses, the Company and each of Mr. Parnes and Mr.
Halvorsen entered into settlement agreements providing for aggregate payments to
Mr. Parnes and Mr. Halvorsen of $2.4 million and $1.55 million,
respectively. Of these total amounts, $571,000 and $560,000,
respectively, were attributable to the settlement of claims brought for 2008
bonuses. Mr. Campbell did not receive a bonus for
2008. As of the filing of this proxy statement, the amount of 2008
annual bonus payable to Mr. Dickson, if any, had not yet been
determined.
Performance Share Awards. The
Committee decided to discontinue the executive officer performance share award
program in 2009, electing instead to provide equity awards to executives through
the use of stock options. The Committee believes that stock options, which vest
over a longer time horizon, provide a greater long term incentive to executives
than performance share awards, which historically were tied to the achievement
of annual performance metrics.
For 2008,
each of the named executive officers received a performance share
award. As a result of the Company’s transaction with MatlinPatterson,
the change-in-control provision in these awards was triggered in August 2008,
entitling each executive to receive the targeted number of shares for his award,
irrespective of whether the performance thresholds that were otherwise required
to be satisfied to receive such awards were met. Therefore, each of
the named executive officers who was an employee of the Company as of such date
received their targeted number of shares: Mr. Parnes 40,000,
Mr. Stowell 50,000, Mr. Dickson 20,000 and Mr. Halvorsen
20,000.
Stock Options. In
light of market conditions and the Company’s current financial condition, the
Committee decided to place a greater emphasis on longer term compensation,
including stock options, for 2009, believing that such longer term compensation
will incentivize the Company’s executives to remain employees of the Company
through the current downturn. Accordingly, in March 2009 the Company
granted stock options to each of its key employees, including Mr. Stowell
and Mr. Dickson, who received 1,000,000 and 500,000 options,
respectively. These options have an exercise price of $0.67 (fair
market value on the effective date of grant), vesting one-quarter on the date of
grant, with an additional one-quarter vesting on each of the first three
anniversaries of the date of grant; provided that 50% of the unvested portion of
the options will immediately vest upon a change in control. These
options have a seven-year term.
In August
2008, the Company also granted stock options to each of its key employees,
including Mr. Peterson, Mr. Stowell, Mr. Parnes, Mr. Halvorsen
and Mr. Dickson, who received 3,800,000, 1,400,000, 900,000, 750,000, and
400,000 options, respectively. These options have an exercise
price of $3.10 (fair market value on the effective date of grant), vest in four
equal installments on the first four anniversaries of the date of grant, and
have a seven-year term. The Committee made this grant to better align
the interests of our management with those of our stockholders, including
MatlinPatterson and those stockholders that participated in the Company’s rights
offering, all of which purchased our equity at a per Common Stock price of $3.05
per share.
In
February 2008, the Company granted stock options to each of its executive
officers, including Mr. Scarborough, Mr. Stowell, Mr. Parnes,
Mr. Halvorsen, Mr. Krah and Mr. Dickson, who received 280,000,
200,000, 100,000, 50,000, 50,000 and 50,000 options, respectively. These
options, which have an exercise price of $4.02 (fair market value on the
effective date of grant) and a seven-year term, were designed to better align
the interests of the Company’s executive officers with those of our other
stockholders. In connection with Mr. Scarborough’s retirement
from the Company (discussed below) all of his 280,000 options vested in March
2008. Mr. Krah’s 50,000 options were unvested as of the date of
the termination of his employment and were cancelled. As a result of
the Company’s transaction with MatlinPatterson, on August 18, 2008 the
change-in-control provision in these awards was triggered and all of the
unvested options held by Messrs. Parnes, Stowell, Halvorsen and Dickson
vested.
Employment
Related Agreements
COO Employment Agreement. In
light of, among other things, current market conditions, the uncertainty created
by the ongoing restructuring of the Company’s operations, and the Committee’s
desire to terminate the Change in Control agreement to which Mr. Stowell is a
party, the Committee decided it was appropriate to provide our Chief Operating
Officer with a two-year employment agreement. This employment
agreement outlines Mr. Stowell’s duties, sets forth his base salary ($750,000),
eligibility for Company health and welfare benefits, and provides for the
potential of a discretionary annual bonus and a $2.5 million retention
bonus. The retention bonus will be payable after December 31, 2010,
assuming Mr. Stowell remains an employee of the Company through such date;
provided, however, that he will be entitled to receive the retention bonus at an
earlier date if his employment with the Company is terminated without cause or
if he terminates his employment for good reason. In addition,
following December 31, 2009, the Compensation Committee, in the exercise of its
discretion, may pay Mr. Stowell up to twenty-five percent of the retention bonus
in advance of when it would otherwise be paid. This employment
agreement supersedes and replaces the change-in-control agreement Mr. Stowell
entered into with the Company on December 1, 2006.
Change-in-Control
Agreements. Prior to 2008, the Company’s practice was to enter
into change-in-control agreements will all of its executive
officers. These agreements were designed to provide a degree of
protection to each executive officer in the event that his or her employment was
terminated or significantly modified following, or in contemplation of, a change
in control. The agreements reflected the Committee’s belief that the interests
of stockholders would be best served if the interests of the Company’s executive
officers were aligned with those of the other stockholders, and that providing
change-in-control benefits should eliminate or at least reduce the reluctance of
executive management to pursue potential change-in-control transactions that may
be in the best interests of stockholders.
On August
18, 2008, our stockholders approved the conversion of the senior preferred stock
held by MatlinPatterson to Series B Preferred Stock, resulting in
MatlinPatterson’s ownership of 49% of the Shares’ voting power. The
Committee determined that, in light of MatlinPatterson’s concentrated ownership
and the resulting ability of parties interested in pursuing change-in-control
transactions to contact MatlinPatterson directly if Company management were to
rebuff a potential suitor, it was no longer necessary to provide the Company’s
executives with additional motivation to explore change-in-control
transactions.
The
existing change-in-control agreements provide that following a change in
control, severance benefits are payable if the Company terminates the employment
of an executive without cause or the executive terminates his or her employment
for good reason (generally consisting of adverse changes in responsibilities,
compensation, benefits or location of work place) within two years after a
change in control or prior to and in connection with, or in anticipation of,
such a change. Subject to a payment cap designed to keep the severance benefits
payable to each executive officer below the “excess parachute payments”
threshold under Section 280G of the Internal Revenue Code, the severance
benefits generally consist of (1) a lump sum payment equal to two times the
executive officer’s annual base salary and two times his or her average annual
bonus and incentive compensation determined over the three prior years; and
(2) continuation for two years of the Company life, health and disability
insurance (without an exclusion for pre-existing conditions), car allowance and
any cash-in-lieu payments. In addition, the agreements provide that all
outstanding unvested equity awards immediately vest as of the date of a change
in control.
Each of
the Company’s named executive officers (other than Mr. Campbell and
Mr. Peterson) was a party to a change-in-control agreement with the
Company. In connection with his retirement in March 2008,
Mr. Scarborough entered into an agreement with the Company that
extinguished any rights he might have under his change-in-control
agreement. Notwithstanding this fact, on September 9, 2008, Mr.
Scarborough initiated an arbitration proceeding alleging he remained entitled to
a payment under the change-in-control agreement. This proceeding is
ongoing and is described in more detail below. In connection with his
separation from the Company in July 2008, Mr. Krah entered into an
agreement with the Company that extinguished any rights he might have under his
change-in-control agreement. In February 2009, in connection with the
settlement of various employment related claims, also described in more detail
below, Mr. Parnes and Mr. Halvorsen relinquished any rights they might
have under their change-in-control agreements. In March 2009, Mr.
Stowell entered into two-year employment agreement with the Company that
superseded and replaced his change-in-control agreement. Mr.
Stowell’s two-year employment agreement is described in more detail
above.
The
“Estimated Current Value of Change-in-Control Benefits” table at page 30 of this
proxy statement provides an estimate of the total cash payment and other value
that would have been received by each named executive officer who was serving in
such capacity at December 31, 2008, assuming that the Company had become
obligated to pay him severance as of such date under the agreement in place as
of such date.
Retirement
and Separation Agreements
Stephen
J. Scarborough Retirement Agreement
Effective
March 20, 2008, Stephen J. Scarborough retired from his position as Chairman of
the Board of Directors, Chief Executive Officer and President of the Company. In
connection with his retirement, the Company entered into a retirement agreement
with Mr. Scarborough. The terms of the retirement agreement include Mr.
Scarborough’s agreement not to disclose confidential Company information,
disparage the Company, or solicit Company employees for two years, as well as
his release of certain claims he might have against the Company. In exchange,
the Company agreed to (i) pay Mr. Scarborough a lump sum severance payment of
$1,250,000 (one year’s base salary), (ii) pay COBRA premiums through February
2011, (iii) accelerate the vesting of 42,000 shares of restricted stock that
would have vested in two equal tranches on February 19, 2009 and 2010 and
280,000 stock options that would have vested in three equal tranches on February
7, 2009, 2010 and 2011, (iv) allow Mr. Scarborough until April 1, 2010 to
exercise any vested but unexercised stock options, (v) continue financial
planning services provided to Mr. Scarborough through June 30, 2009, (vi) not
disparage Mr. Scarborough and (vii) release him from certain
claims.
On
September 9, 2008, Mr. Scarborough initiated an arbitration proceeding before
JAMS in Orange County, California alleging that by not paying him benefits of
approximately $23 million in connection with the termination of his employment
in March 2008, the Company violated the terms of his Change in Control Agreement
with the Company. Mr. Scarborough further alleges that the termination of his
employment was wrongful and that his claims are not barred by the retirement
agreement described above inasmuch as he asserts that he was fraudulently
induced to sign that agreement. The Company believes these claims are without
merit and has filed a response to the complaint, denying all of the material
allegations and setting forth a number of affirmative defenses. The arbitration
is currently set for May 4-8, 2009.
Jeffrey
V. Peterson Separation Agreement
Effective
December 17, 2008, Mr. Peterson resigned from his position as Chairman of the
Board of Directors, Chief Executive Officer and President of the Company. Mr.
Peterson agreed to continue as a member of the Company’s Board of
Directors. In connection with his resignation and in recognition of the
significant role he played in helping the Company to close the MatlinPatterson
transaction and the related common stock rights offering, which resulted in a
total equity infusion into the Company of approximately $662 million, the
Company entered into a separation agreement with Mr. Peterson which replaced in
its entirety the September 2008 severance agreement between Mr. Peterson and the
Company. The separation agreement provides Mr. Peterson with (i) a lump sum
bonus payment of $3,000,000, (ii) the continuation of the vesting of one-quarter
of the stock options granted to Mr. Peterson on August 22, 2008, and (iii) the
extension of the period during which Mr. Peterson may exercise those options to
August 22, 2013. The separation agreement also contains, among other
things, non-disclosure, non-disparagement, non-solicitation, and general release
provisions and cancels all other bonus, severance and employment related
agreements between the Company and Mr. Peterson.
Douglas
C. Krah Separation Agreement
As part
of the Company’s ongoing cost reduction initiatives, the Company decided to
consolidate its Northern California and Southern California regions into one
region in July 2008. In connection with this consolidation, Mr.
Krah’s regional president position was eliminated and Mr. Krah’s employment with
the Company was terminated. In connection with his separation from
employment, the Company entered into a separation agreement with Mr. Krah that
included Mr. Krah’s agreement not to disclose confidential Company information,
to release the Company from certain claims, and to provide transition services
through December 31, 2008. In exchange, the Company agreed to pay Mr.
Krah a lump sum severance payment of $1,500,000, accelerate the vesting of
15,118 shares of unvested restricted stock relating to previously earned
performance share awards and pay COBRA premiums through December 31,
2009.
Andrew
H. Parnes Separation Agreement
In
connection with the settlement of various employment related claims, including
claims for payment of a 2008 bonus and pursuant to a change-in-control agreement
between the Company and the executive, Mr. Parnes resigned from his position
with the Company effective February 24, 2009. The terms of the
separation agreement between the Company and Mr. Parnes, which became effective
on March 6, 2009, provide, among other things, that in exchange for a settlement
of claims between the parties, Mr. Parnes will receive a lump sum payment of
$2.4 million and reimbursement of up to 24 months of COBRA/Cal-COBRA
payments. Mr. Parnes was also provided a period of 90 days to
exercise any vested stock options. The $2.4 million payment to Mr.
Parnes represents approximately 57% of the maximum amount that could be asserted
as due under his 2008 bonus arrangement and change-in-control
agreement. Of this total amount, $571,000 was attributable to the
settlement of his claim for a 2008 bonus.
Clay
A. Halvorsen Separation Agreement
In
connection with the settlement of various employment related claims, including
claims for payment of a 2008 bonus and pursuant to a change-in-control agreement
between the Company and the executive, Mr. Halvorsen resigned from his position
with the Company effective February 20, 2009. The terms of the
separation agreement between the Company and Mr. Halvorsen, which became
effective on March 5, 2009, provide, among other things, that in exchange for a
settlement of claims between the parties, Mr. Halvorsen will receive a lump sum
payment of $1.55 million and reimbursement of up to 24 months of COBRA/Cal-COBRA
payments. Mr. Halvorsen was also provided a period of 90 days to
exercise any vested stock options. The $1.55 million payment to Mr.
Halvorsen represents approximately 57% of the maximum amount that could be
asserted as due under his 2008 bonus arrangement and change-in-control
agreement. Of this total amount, $560,000 was attributable to the
settlement of his claim for a 2008 bonus.
Other
Compensation Related Plans and Policies.
Deferred Compensation
Plans. All employees, including the named executive officers,
may participate in the Company’s 401(k) Retirement and Savings Plan (the “401(k)
Plan”). Each employee may elect to make before-tax contributions up to the
current tax limits. The Company matches employee contributions up to $5,000 per
employee per year. The Company provides this plan to help its employees save a
portion of their cash compensation for retirement in a tax efficient
environment. Except for the deferred compensation plans described below, the
Company has not maintained separate or supplemental retirement plans for
executives or key employees.
Through
October 27, 2008, the Company maintained a deferred compensation program which,
until December 12, 2007, provided executives, directors, and other eligible
key employees the opportunity to defer compensation that would otherwise be paid
to such individuals on a current basis. On December 12, 2007, the Company
modified the program to prohibit future deferrals and to make accelerated
distributions in 2008 to certain plan participants. These amendments were
designed to eliminate any incentive the program may have created for employees
to terminate their employment in order to receive accelerated plan
distributions. Other than for directors, former employees, and certain officers
who qualified for retirement under the program for whom payments were not
accelerated, distributions of participant cash balances were made in January and
July 2008. Deferred restricted stock and other deferred equity awards under the
plans were not distributed on an accelerated basis.
On August
18, 2008, in connection with the Company’s receipt of stockholder approval to
convert the non-voting senior preferred stock held by MatlinPatterson to Series
B Preferred Stock, a change in control occurred for purposes of the deferred
compensation program. In accordance with the program’s terms, the
Company was obligated to distribute all remaining cash and stock held in
participant accounts following the change in control. Following this
distribution, because there were no remaining assets in participant accounts and
because future deferrals were prohibited under the program, the Compensation
Committee formally terminated the program effective October 27,
2008.
Executive Stock Ownership
Guidelines. The Compensation Committee and the Board of Directors have
adopted Executive Stock Ownership Guidelines for the purpose of further aligning
the interests and actions of the executives with the interests of the Company’s
stockholders. Under the guidelines, each of the Chief Executive Officer and
President, Chief Operating Officer, Chief Financial Officer, General Counsel,
Regional Presidents, and other executive officers are required to own 200,000,
100,000, 75,000, 50,000, 40,000 and 25,000 shares, respectively, of Common
Stock. Each such executive officer is required to reach full compliance with the
guidelines within three years of the date he or she takes office. As
of December 31, 2008, each of the Company’s named executive officers
exceeded the guideline applicable to him or her. The guidelines do
not apply to Mr. Campbell or any other employee of MatlinPatterson. The
Executive Stock Ownership Guidelines are accessible via the Company’s website at
www.standardpacifichomes.com through the “Investor Relations” link under the
heading, “Corporate Governance,” In order to avoid creating conflicts between an
executive’s interests and those of other stockholders, our Insider Trading
Policy prohibits all covered persons, including executives, from engaging in
hedging the economic risk of owning their shares.
Summary
Compensation Table
The
following table summarizes the compensation of the Company’s named executive
officers for 2006, 2007 and 2008.
SUMMARY
COMPENSATION TABLE
|
Name
& Principal Position
|
Year
|
Salary
($)
|
Bonus
($)(1)
|
Stock
Awards
($)(2)
|
Option
Awards
($)(2)
|
Non-Equity
Incentive
Plan
Compensation
($)(1)
|
All
Other
Compensation
($)(3)
|
Total
($)
|
|||||||||
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
|||||||||
|
Kenneth
L. Campbell(4)
(President
and Chief Executive Officer)
|
2008
|
—
|
—
|
—
|
—
|
—
|
40,000
|
40,000
|
|||||||||
|
Scott
Stowell
(Chief
Operating Officer)
|
2008
2007
2006
|
750,000
611,736
365,000
|
(5)
400,000
1,810,380
|
535,071
536,613
646,263
|
662,459
407,405
112,539
|
(5)
—
—
|
33,675
27,790
31,999
|
1,981,205
1,983,544
2,966,181
|
|||||||||
|
Bruce
F. Dickson
(Southeast
Regional President)
|
2008
2007
2006
|
365,000
365,000
365,000
|
(6)
300,000
39,032
|
548,993
528,835
425,836
|
183,698
407,405
101,130
|
(6)
—
1,640,719
|
34,035
28,748
40,216
|
1,131,726
1,629,718
2,611,933
|
|||||||||
|
Jeffrey
V. Peterson(7)
(Former
President and Chief Executive Officer)
|
2008
|
634,983
|
3,000,000
|
35,350
|
62,938
|
—
|
60,224
|
3,793,495
|
|||||||||
|
Stephen
J. Scarborough(8)
(Former
Chief Executive Officer)
|
2008
2007
2006
|
212,996
950,000
950,000
|
—
—
—
|
666,855
2,039,493
3,509,813
|
1,291,230
3,316,762
621,890
|
—
—
3,487,207
|
1,388,419
27,970
39,090
|
3,559,500
6,334,225
8,608,000
|
|||||||||
|
Andrew
H. Parnes(9)
(Former
Executive Vice President and Chief Financial Officer)
|
2008
2007
2006
|
525,000
525,000
525,000
|
(9)
375,000
465,000
|
711,260
481,190
515,592
|
378,414
501,243
163,693
|
(9)
1,250,000
1,000,000
|
33,775
27,632
31,981
|
2,219,449
3,160,065
2,701,266
|
(9)
|
||||||||
|
Clay
A. Halvorsen(10)
(Former
Executive Vice President and General Counsel)
|
2008
2007
2006
|
440,000
440,000
440,000
|
(10)
560,000
660,000
|
387,674
403,375
515,592
|
240,792
413,886
163,963
|
—
—
—
|
33,531
27,466
31,710
|
1,661,997
1,844,727
1,811,265
|
(10)
|
||||||||
|
Douglas
C. Krah(11)
(Former
Northern California Regional President)
|
2008
2007
2006
|
197,708
365,000
365,000
|
—
600,000
—
|
178,260
717,567
804,597
|
13,236
407,405
101,130
|
—
—
—
|
1,566,591
28,539
32,542
|
1,955,795
2,118,511
1,303,269
|
|||||||||
_________________
|
(1)
|
Annual
bonus and non-equity incentive plan compensation is generally paid in
February or March for the prior year’s performance. These amounts are
described in more detail in the “Compensation Discussion and Analysis”
section under the heading “2008 and 2009 Named Executive Officer
Compensation - Annual Bonuses” beginning at page 18 of this proxy
statement.
|
|
(2)
|
Includes
compensation cost recognized in the Company’s financial statements with
respect to awards granted in previous fiscal years and the current fiscal
year, calculated in accordance with FAS 123R, disregarding adjustments for
forfeitures. The methodology and assumptions used to calculate the
valuations of the stock awards and option awards granted to named
executive officers are set forth in Note 17, “Stock Incentive Plans,” to
our consolidated financial statements contained in our Annual Report on
Form 10-K for the year ended December 31,
2008.
|
|
(3)
|
Includes
premiums on life, long-term disability, and travel and accident insurance
coverage paid by the Company, the value of flex credits provided to each
executive to be applied against the cost of the executive’s participation
in the Company’s cafeteria benefit plans, $9,179 of personal financial
planning services provided to each executive, including a $12,782 tax
“gross-up” paid to each executive to cover income taxes levied against
such executive as a result of the Company’s provision of such personal
financial planning services, dividends paid on the unvested portion of
each executive’s restricted stock awards, the Company’s contribution to
the executive’s 401(k) Plan account, and a car allowance. In addition,
severance payments of $1,250,000 paid to Mr. Scarborough and $1,500,000
paid to Mr. Krah during 2008, as well as $25,000 paid to Mr. Peterson for
his service as a non-employee director during 2008, are included in this
column. Except as noted above, none of the amounts described in
this footnote exceeds $10,000.
|
|
(4)
|
Mr.
Campbell was elected President and Chief Executive Officer on December 18,
2008. Mr. Campbell, a partner at an affiliate of our largest
investor, MatlinPatterson, has waived his rights to receive compensation
from the Company. The $40,000 set forth in column (h)
represents cash fees paid to Mr. Campbell for his service as a
non-employee director prior to December 2008. Mr. Campbell was
required by the terms of his agreement with MatlinPatterson to remit these
cash fees to MatlinPatterson.
|
|
(5)
|
In
light of the Company’s 2008 performance, Mr. Stowell waived his right to
receive a bonus for 2008.
|
|
(6)
|
As
of the date of this proxy statement, the amount of bonus, if any, due to
Mr. Dickson for 2008 had not been determined. We expect that
this determination will be completed by April 30, 2009 and that we will
file a Report on Form 8-K disclosing such amount, if any, promptly
following such determination.
|
|
(7)
|
Mr.
Peterson resigned from his position as Chairman, Chief Executive Officer
and President on December 18, 2008. As part of his separation
from employment with the Company Mr. Peterson received a $3,000,000
bonus. Mr. Peterson’s separation agreement is described in more
detail in the “Compensation Discussion and Analysis” section under the
heading “Retirement and Separation Agreements.” The $35,350 set
forth in column (e) represents the vesting in 2008 of restricted stock
awards issued to Mr. Peterson in 2007 for his service as a non-employee
director.
|
|
(8)
|
Mr.
Scarborough retired from his position as Chairman, Chief Executive Officer
and President on March 20, 2008. In connection with his
separation from employment with the Company Mr. Scarborough received a
cash severance payment of $1,250,000. Mr. Scarborough’s
retirement agreement is described in more detail in the “Compensation
Discussion and Analysis” section under the heading “Retirement and
Separation Agreements.” Under the Company’s Management
Incentive Bonus Plan for 2006, Mr. Scarborough was paid an incentive bonus
equal to 2.25% of the 2006 consolidated pretax income of the Company. 80%
of this incentive bonus was paid in cash and reflected in column (g) and
20% was paid in Common Stock and reflected in column (e). The Common
Stock, valued at $871,781, was fully vested as of the date of issuance but
was non-transferable for a one-year
period.
|
|
(9)
|
In
February 2009, Mr. Parnes resigned from his position with the
Company. As part of a comprehensive settlement of various
employment related claims Mr. Parnes had brought against the Company,
including claims pursuant to a change in control agreement and claim for a
2008 bonus, the Company and Mr. Parnes entered into a
settlement agreement providing for an aggregate payment to Mr. Parnes of
$2.4 million. Of this total amount, $571,000 was attributable
to the settlement of a claim for a 2008 bonus. This amount is
included in the “Total” column. Additional details regarding
Mr. Parnes’ separation agreement are provided in the “Compensation
Discussion and Analysis” section under the heading “Retirement and
Separation Agreements.”
|
|
(10)
|
In
February 2009, Mr. Halvorsen resigned from his position with the
Company. As part of a comprehensive settlement of various
employment related claims Mr. Halvorsen had brought against the Company,
including claims pursuant to a change in control agreement and claim for a
2008 bonus, the Company and Mr. Halvorsen entered into a settlement
agreement providing for an aggregate payment to Mr. Halvorsen of $1.55
million. Of this total amount, $560,000 was attributable to the
settlement of a claim for a 2008 bonus. This amount is included
in the “Total” column. Additional details regarding Mr.
Halvorson’s separation agreement are provided in the “Compensation
Discussion and Analysis” section under the heading “Retirement and
Separation Agreements.”
|
|
(11)
|
In
July 2008, the Company decided to consolidate its Northern and Southern
California regions. As a result, Mr. Krah’s position was
eliminated. In connection with his separation from the Company,
Mr. Krah received a cash severance payment
of $1,500,000. Additional details regarding Mr.
Krah’s separation agreement are provided in the “Compensation Discussion
and Analysis” section under the heading “Retirement and
Separation Agreements.”
|
Grants of Plan-Based Awards.
The following table sets forth information concerning awards granted under the
Company’s equity and non-equity incentive plans for 2008 to each of the
Company’s named executive officers.
GRANTS
OF PLAN-BASED AWARDS FOR 2008
|
Estimated
Possible Payouts Under
Non-Equity
Incentive Plan Awards
|
Estimated
Possible Payouts Under Equity
Incentive
Plan Awards
|
Exercise
or Base Price of Option Awards
|
Grant
Date Fair Value of Stock and Option Awards(10)
|
|||||||||||||||
|
Name
|
Grant
Date
|
Threshold
|
Target
|
Maximum
|
Threshold
|
Target
|
Maximum
|
|||||||||||
|
($)
|
($)
|
($)
|
(#)
|
(#)
|
(#)
|
($/Sh)
|
($)
|
|||||||||||
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(k)
|
(l)
|
|||||||||
|
Kenneth
L. Campbell
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||
|
Jeffrey
V. Peterson(1)
|
8/22/08
|
—
|
—
|
—
|
—
|
3,800,000
|
(6)
|
—
|
3.10
|
6,612,000
|
||||||||
|
Stephen
J. Scarborough(2)
|
2/7/08
|
—
|
—
|
—
|
—
|
280,000
|
—
|
4.02
|
560,000
|
|||||||||
|
3/6/08
|
—
|
—
|
—
|
70,200
|
90,000
|
—
|
—
|
344,700
|
||||||||||
|
Andrew
H. Parnes(3)
|
1/30/08
|
98,438
|
393,750
|
393,750
|
—
|
—
|
—
|
—
|
—
|
|||||||||
|
2/7/08
|
—
|
—
|
—
|
—
|
100,000
|
(4)
|
—
|
4.02
|
200,000
|
|||||||||
|
3/6/08
|
—
|
—
|
—
|
31,200
|
40,000
|
(5)
|
—
|
—
|
153,200
|
|||||||||
|
8/22/08
|
—
|
—
|
—
|
—
|
900,000
|
(6)
|
—
|
3.10
|
1,566,000
|
|||||||||
|
Scott
D. Stowell(7)
|
1/30/08
|
168,750
|
1,125,000
|
1,125,000
|
—
|
—
|
—
|
—
|
—
|
|||||||||
|
2/7/08
|
—
|
—
|
—
|
—
|
200,000
|
(4)
|
—
|
4.02
|
400,000
|
|||||||||
|
3/6/08
|
—
|
—
|
—
|
39,000
|
50,000
|
(5)
|
—
|
—
|
191,500
|
|||||||||
|
8/22/08
|
—
|
—
|
—
|
—
|
1,400,000
|
(6)
|
—
|
3.10
|
2,436,000
|
|||||||||
|
Clay
A. Halvorsen
|
2/7/08
|
—
|
—
|
—
|
—
|
50,000
|
(4)
|
—
|
4.02
|
100,000
|
||||||||
|
3/6/08
|
—
|
—
|
—
|
15,600
|
20,000
|
(5)
|
—
|
—
|
76,600
|
|||||||||
|
8/22/08
|
—
|
—
|
—
|
—
|
750,000
|
(6)
|
—
|
3.10
|
1,305,000
|
|||||||||
|
Douglas
C. Krah(8)
|
2/7/08
|
—
|
—
|
—
|
—
|
50,000
|
—
|
4.02
|
100,000
|
|||||||||
|
3/6/08
|
—
|
—
|
—
|
15,600
|
20,000
|
—
|
—
|
76,600
|
||||||||||
|
Bruce
F. Dickson(9)
|
1/30/08
|
82,125
|
547,500
|
547,500
|
—
|
—
|
—
|
—
|
—
|
|||||||||
|
2/7/08
|
—
|
—
|
—
|
—
|
50,000
|
(4)
|
—
|
4.02
|
100,000
|
|||||||||
|
3/6/08
|
—
|
—
|
—
|
15,600
|
20,000
|
(5)
|
—
|
—
|
76,600
|
|||||||||
|
8/22/08
|
—
|
—
|
—
|
—
|
400,000
|
(6)
|
—
|
3.10
|
696,000
|
|||||||||
___________________
|
(1)
|
Mr.
Peterson resigned from his position as Chairman, Chief Executive Officer
and President on December 18, 2008. In connection with his
termination, 2,850,000 of the 3,800,000 unvested stock options terminated
as of the date of his resignation. The 950,000 remaining stock
options vest on May 13, 2009.
|
|
(2)
|
Mr.
Scarborough retired from his position as Chairman, Chief Executive Officer
and President on March 20, 2008. In connection with his
termination, the 280,000 unvested stock options listed in column (g)
immediately vested. The 90,000 target shares listed in column
(g) terminated as of the date of his
retirement.
|
|
(3)
|
For
Mr. Parnes, payment of the target amount is contingent 50% upon the
Company’s achievement of 4,895 net new orders during 2008 and 50% on the
Company’s achievement of an inventory and joint venture investment level
of $1.93 billion as of December 31,
2008.
|
|
(4)
|
Each
option has a fair market value exercise price as of its date of grant and
a seven-year term. On August 18, 2008, in connection with
stockholder approval of the conversion of the non-voting senior preferred
stock held by MatlinPatterson to Series B Preferred Stock, a change in
control occurred for purposes of this equity award and vesting
was accelerated on August 18, 2008.
|
|
(5)
|
On
August 18, 2008, in connection with stockholder approval of the conversion
of the non-voting senior preferred stock held by MatlinPatterson to Series
B Preferred Stock, a change in control occurred for purposes
of this equity award and vesting was accelerated on August 18,
2008.
|
|
(6)
|
Each
option (i) has a fair market value exercise price as of its date of grant,
(ii) has a seven-year term, and (iii) vests in four equal
installments. In connection with the termination of their
employment, Mr. Parnes and Mr. Halvorsen’s options were
terminated.
|
|
(7)
|
For
Mr. Stowell, payment of the target amount is contingent 40% upon the
Company’s achievement of 4,895 net new orders during 2008, 30% on the
Company’s achievement of an inventory and joint venture investment level
of $1.93 billion as of December 31, 2008 and 30% upon the Company’s
achievement of $1.5 billion in revenues during
2008.
|
|
(8)
|
Mr.
Krah’s employment with the Company was terminated on July 15,
2008. In connection with his separation from the Company, Mr.
Krah’s right to receive the target shares listed in column (g)
terminated.
|
|
(9)
|
For
Mr. Dickson, payment of the target amount is contingent 40% upon his
region's achievement of 1,820 net new orders during 2008, 30% on
his region's achievement of an inventory and joint venture investment
level of $415 million as of December 31, 2008 and 30% upon his
region's achievement of $440 million in revenues during
2008.
|
|
(10)
|
For
a description of the methodology and assumptions used to calculate the
grant date fair value of the stock awards and option awards granted,
please see Note 17, “Stock Incentive Plans,” to our consolidated financial
statements contained in our Annual Report on Form 10-K for the year ended
December 31, 2008.
|
Outstanding Equity Awards. The
following table provides a summary of equity awards granted to each of the
Company’s named executive officers that were outstanding as of December 31,
2008.
OUTSTANDING
EQUITY AWARDS AT DECEMBER 31, 2008(1)
|
Option
Awards
|
Stock
Awards
|
||||||||||||||
|
Number
of Securities Underlying Unexercised Options (#)
|
Number
of Securities Underlying Unexercised Options (#)
|
Equity
Incentive
Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options
|
Option
Exercise
Price
|
Option
Expiration
|
Number
of
Shares
or Units
of
Stock
That
Have
Not
Vested
|
Market
Value
of
Shares
or
Units
of
Stock
That Have
Not
Vested
|
|||||||||
|
Name
|
Exercisable
|
Unexercisable
|
(#)
|
($)
|
Date
|
(#)
|
($)
|
||||||||
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
||||||||
|
Kenneth
L. Campbell
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||
|
Jeffrey
V. Peterson
|
10,000
|
—
|
—
|
5.2188
|
05/18/2010
|
—
|
—
|
||||||||
|
4,000
|
—
|
—
|
11.6875
|
12/13/2010
|
—
|
—
|
|||||||||
|
2,000
|
—
|
—
|
8.2500
|
04/24/2011
|
—
|
—
|
|||||||||
|
4,000
|
—
|
—
|
11.6700
|
01/14/2012
|
—
|
—
|
|||||||||
|
4,000
|
—
|
—
|
11.0000
|
11/12/2012
|
—
|
—
|
|||||||||
|
4,000
|
—
|
—
|
14.8200
|
04/24/2013
|
—
|
—
|
|||||||||
|
8,000
|
—
|
—
|
27.5850
|
04/27/2014
|
—
|
—
|
|||||||||
|
—
|
950,000(2)
|
—
|
3.1000
|
08/22/2015
|
—
|
—
|
|||||||||
|
Stephen
J. Scarborough(3)
|
150,000
|
—
|
—
|
5.6563
|
12/13/2009
|
—
|
—
|
||||||||
|
100,000
|
—
|
—
|
11.6875
|
04/01/2010
|
—
|
—
|
|||||||||
|
100,000
|
—
|
—
|
8.2500
|
04/01/2010
|
—
|
—
|
|||||||||
|
82,864
|
—
|
—
|
11.6700
|
04/01/2010
|
—
|
—
|
|||||||||
|
90,000
|
—
|
—
|
11.0000
|
04/01/2010
|
—
|
—
|
|||||||||
|
80,000
|
—
|
—
|
16.7050
|
04/01/2010
|
—
|
—
|
|||||||||
|
60,000
|
—
|
—
|
27.5850
|
04/01/2010
|
—
|
—
|
|||||||||
|
280,000
|
—
|
—
|
4.0200
|
04/01/2010
|
—
|
—
|
|||||||||
|
Andrew
H. Parnes(4)
|
20,000
|
—
|
—
|
11.6875
|
12/13/2010
|
—
|
—
|
||||||||
|
32,000
|
—
|
—
|
8.2500
|
04/24/2011
|
—
|
—
|
|||||||||
|
30,000
|
—
|
—
|
11.6700
|
01/14/2012
|
—
|
—
|
|||||||||
|
30,000
|
—
|
—
|
11.0000
|
11/12/2012
|
—
|
—
|
|||||||||
|
40,000
|
—
|
—
|
16.7050
|
07/24/2013
|
—
|
—
|
|||||||||
|
20,000
|
—
|
—
|
27.5850
|
04/27/2014
|
—
|
—
|
|||||||||
|
25,000
|
—
|
—
|
37.0300
|
02/03/2011
|
—
|
—
|
|||||||||
|
40,000
|
—
|
—
|
29.8400
|
02/06/2014
|
—
|
—
|
|||||||||
|
100,000
|
—
|
—
|
4.0200
|
02/07/2015
|
—
|
—
|
|||||||||
|
—
|
900,000
|
—
|
3.1000
|
08/22/2015
|
—
|
—
|
|||||||||
|
Scott
D. Stowell
|
30,000
|
—
|
—
|
11.6875
|
12/13/2010
|
—
|
—
|
||||||||
|
30,000
|
—
|
—
|
8.2500
|
04/24/2011
|
—
|
—
|
|||||||||
|
19,600
|
—
|
—
|
11.6700
|
01/14/2012
|
—
|
—
|
|||||||||
|
30,000
|
—
|
—
|
11.0000
|
11/12/2012
|
—
|
—
|
|||||||||
|
18,000
|
—
|
—
|
16.7050
|
07/24/2013
|
—
|
—
|
|||||||||
|
15,000
|
—
|
—
|
27.5850
|
04/27/2014
|
—
|
—
|
|||||||||
|
25,000
|
—
|
—
|
37.0300
|
02/03/2011
|
—
|
—
|
|||||||||
|
25,000
|
—
|
—
|
29.8400
|
02/06/2014
|
—
|
—
|
|||||||||
|
200,000
|
—
|
—
|
4.0200
|
02/07/2015
|
—
|
—
|
|||||||||
|
—
|
1,400,000
|
—
|
3.1000
|
08/22/2015
|
—
|
—
|
|||||||||
|
Clay
A. Halvorsen(4)
|
6,136
|
—
|
—
|
11.6700
|
01/14/2012
|
—
|
—
|
||||||||
|
10,000
|
—
|
—
|
11.0000
|
11/12/2012
|
—
|
—
|
|||||||||
|
40,000
|
—
|
—
|
16.7050
|
07/24/2013
|
—
|
—
|
|||||||||
|
20,000
|
—
|
—
|
27.5850
|
04/27/2014
|
—
|
—
|
|||||||||
|
25,000
|
—
|
—
|
37.0300
|
02/03/2011
|
—
|
—
|
|||||||||
|
25,000
|
—
|
—
|
29.8400
|
02/06/2014
|
—
|
—
|
|||||||||
|
50,000
|
—
|
—
|
4.0200
|
02/07/2015
|
—
|
—
|
|||||||||
|
—
|
750,000
|
—
|
3.1000
|
08/22/2015
|
—
|
—
|
|||||||||
|
Bruce
F. Dickson
|
5,932
|
—
|
—
|
16.7050
|
07/24/2013
|
—
|
—
|
||||||||
|
15,000
|
—
|
—
|
27.5850
|
04/27/2014
|
—
|
—
|
|||||||||
|
25,000
|
—
|
—
|
37.0300
|
02/03/2011
|
—
|
—
|
|||||||||
|
25,000
|
—
|
—
|
29.8400
|
02/06/2014
|
—
|
—
|
|||||||||
|
50,000
|
—
|
—
|
4.0200
|
02/07/2015
|
—
|
—
|
|||||||||
|
—
|
400,000
|
—
|
3.1000
|
08/22/2015
|
—
|
—
|
|||||||||
________________________
|
(1)
|
On
August 18, 2008, in connection with the Company’s receipt of stockholder
approval to convert the senior preferred stock held by MatlinPatterson to
Series B Preferred Stock, a change in control occurred for the purposes of
the Company’s outstanding equity awards. As a result of this
change in control, the vesting of all equity awards that were outstanding
as of August 18, 2008 was
accelerated.
|
|
(2)
|
Mr.
Peterson resigned from his position with the Company in December
2008. Pursuant to the terms of his separation agreement, these
950,000 options will vest on May 13, 2009 and shall remain exercisable
until August 22, 2013.
|
|
(3)
|
Mr.
Scarborough resigned from his position with the Company in March
2008. Pursuant to the terms of his separation agreement, Mr.
Scarborough has until the earlier of the expiration date of the option or
April 1, 2010 to exercise his vested exercisable
options.
|
|
(4)
|
Mr.
Parnes and Mr. Halvorsen resigned from their positions with the Company in
February 2009. All unexercisable options terminated on such
date. Each has a period of ninety days following such date to
exercise his vested exercisable
options.
|
Option Exercises and
Stock Vested. The following table sets
forth on an aggregated basis for each of the Company’s named executive officers,
the number and value of shares of Common Stock acquired upon exercise of stock
options, and the number and value of shares of Common Stock acquired upon
vesting of restricted stock during 2008.
2008
OPTION EXERCISES AND STOCK VESTED(1)
|
Options
Awards
|
Stock
Awards
|
||||||||
|
Number
of Shares Acquired
on
Exercise
|
Value
Realized
on
Exercise
|
Number
of
Shares
Acquired
on
Vesting
|
Value
Realized
on Vesting
|
||||||
|
Name
|
(#)
|
($)
|
(#)
|
($)
|
|||||
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
|||||
|
Kenneth
L. Campbell
|
—
|
—
|
—
|
—
|
|||||
|
Jeffrey
V. Peterson
|
—
|
—
|
5,000
|
18,850
|
|||||
|
Stephen
J. Scarborough
|
—
|
—
|
194,569
|
(2)
|
677,380
|
||||
|
Andrew
H. Parnes
|
—
|
—
|
84,816
|
(2)
|
268,776
|
||||
|
Scott
D. Stowell
|
—
|
—
|
93,814
|
(2)
|
295,152
|
||||
|
Clay
A. Halvorsen
|
—
|
—
|
59,302
|
(2)
|
184,058
|
||||
|
Douglas
C. Krah
|
—
|
—
|
37,236
|
137,288
|
|||||
|
Bruce
F. Dickson
|
—
|
—
|
50,567
|
167,588
|
|||||
______________
|
(1)
|
On
August 18, 2008, in connection with the Company’s receipt of stockholder
approval to convert the senior preferred stock held by MatlinPatterson to
Series B Preferred Stock, a change in control occurred for the purposes of
the Company’s outstanding equity awards. As a result of this
change in control, the vesting of all equity awards that were outstanding
as of August 18, 2008 was
accelerated.
|
|
(2)
|
Amounts
include receipt of 131,569 shares by Mr. Scarborough, 12,650 shares by Mr.
Parnes, 25,302 shares by Mr. Stowell, and 25,302 shares by Mr. Halvorsen
that were previously deferred at the election of the executive pursuant to
the terms of the Company’s 2005 Deferred Compensation
Plan. These shares were distributed in the third quarter of
2008 in connection with the termination of the 2005 Deferred Compensation
Plan.
|
Deferred
Compensation. The Company had two non-qualified deferred
compensation plans pursuant to which the named executive officers, directors,
and other eligible employees were permitted to defer a portion of their
compensation. The first plan was closed to new contributions on
December 31, 2004. The second plan was closed to new contributions
beginning January 1, 2008. Final distributions under both plans were made in the
third quarter of 2008 and the plans were terminated. The table below provides an
aggregated summary of 2008 earnings and withdrawals under the two plans for each
of the named executive officers.
2008
NON-QUALIFIED DEFERRED COMPENSATION
|
Name
|
Executive
Contributions
in
Last FY ($)
|
Aggregate
Earnings
in
Last
FY ($)(1)
|
Aggregate
Withdrawals/
Distributions
($)
|
Aggregate
Balance
at
Last FYE
($)
|
||||
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
||||
|
Kenneth
L. Campbell
|
—
|
—
|
—
|
—
|
||||
|
Jeffrey
V. Peterson
|
—
|
($42,664)
|
$367,216
|
—
|
||||
|
Stephen
J. Scarborough
|
—
|
($73,855)
|
$1,320,121
|
—
|
||||
|
Andrew
H. Parnes
|
—
|
($1,771)
|
$1,409,590 |
—
|
||||
|
Scott
D. Stowell
|
—
|
$18,201
|
$2,840,163 |
—
|
||||
|
Clay
A. Halvorsen
|
—
|
($154,974)
|
$1,700,050 |
—
|
||||
|
Douglas
C. Krah
|
—
|
—
|
— |
—
|
||||
|
Bruce
F. Dickson
|
—
|
—
|
— |
—
|
______________
|
(1)
|
The
amounts listed in this column are not required to be reported as
compensation earned during the last fiscal year in the “Summary
Compensation Table” at page 25 of this proxy statement because no portion
of these earnings is a preferred return funded in whole or in part by the
Company.
|
Estimated Value of Change-In-Control
Benefits. The following table provides an estimate of the
total cash payment and other value that would have been received by each named
executive officer who was an employee of the Company on December 31, 2008
assuming that the Company had become obligated to pay such officer severance as
of such date.
ESTIMATED
CURRENT VALUE OF CHANGE-IN-CONTROL BENEFITS AS OF DECEMBER 31,
2008(1)
|
Name
|
Severance
Amount
|
Miscellaneous
Benefits
|
Total
Change-in-Control
Benefit
|
||||||||
|
Scott
D. Stowell(2)
|
$ | 3,473,087 | $ | 88,927 | $ | 3,562,014 | |||||
|
Andrew
H. Parnes(3)
|
$ | 3,515,750 | $ | 105,978 | $ | 3,621,728 | |||||
|
Clay
A. Halvorsen(3)
|
$ | 2,078,667 | $ | 102,578 | $ | 2,181,245 | |||||
|
Bruce
F. Dickson
|
$ | 2,289,101 | $ | 102,412 | $ | 2,391,513 | |||||
|
Total
(Named Executive Officers)
|
$ | 11,356,605 | $ | 399,895 | $ | 11,756,500 | |||||
____________
|
(1)
|
A
detailed description of the Company’s Change-in-Control program as of
December 31, 2008 is contained under the heading “Employment Related
Agreements” beginning on page 21 of this proxy
statement.
|
|
(2)
|
The
change-in-control agreement to which Mr. Stowell was subject was
terminated in March 2009 in connection with his entry into a two-year
employment agreement with the Company. The employment agreement
provides that Mr. Stowell will receive a payment of $2.5 million if his
employment is terminated by the Company without cause or by the executive
for good reason on or prior to December 31, 2010. Please see
page 22 of this proxy statement for a more detailed discussion of this
employment arrangement.
|
|
(3)
|
Mr.
Parnes and Mr. Halvorsen resigned from their positions with the Company in
February 2009 and entered into separation agreements providing for
payments of $2.4 million and $1.55 million, respectively, in exchange for
a release of various employment claims against the Company, including
claims for a change-in-control
payment.
|
The
following reports of the Compensation Committee and Audit Committee shall not be
deemed to be soliciting material or to be filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, or incorporated by reference in any document
so filed, except to the extent that the Company specifically incorporates such
report by reference therein.
The
Compensation Committee has reviewed and discussed with management the contents
of the “Compensation Discussion and Analysis” section that begins at page 18 of
this proxy statement. Based on this review and discussion, the Compensation
Committee recommended to the Board of Directors that the Compensation Discussion
and Analysis be included in this proxy statement.
COMPENSATION
COMMITTEE
Larry D.
McNabb
J. Wayne
Merck
F. Patt
Schiewitz
April 2, 2009
To: The
Board of Directors
The Audit
Committee oversees the Company’s financial reporting process on behalf of the
Board of Directors. The Company’s management has the primary responsibility for
the financial statements, for maintaining effective internal control over
financial reporting, and for assessing the effectiveness of internal control
over financial reporting. In fulfilling its oversight responsibilities, the
Audit Committee reviewed and discussed the audited consolidated financial
statements in the Annual Report on Form 10-K with Company management, including
a discussion of the quality, not just the acceptability, of the accounting
principles; the reasonableness of significant judgments; and the clarity of
disclosures in the financial statements.
The Audit
Committee reviewed with the independent registered public accounting firm, which
is responsible for expressing an opinion on the conformity of those audited
consolidated financial statements with U.S. generally accepted accounting
principles, its judgments as to the quality, not just the acceptability, of the
Company’s accounting principles and such other matters it is required to discuss
with the independent registered public accounting firm by Statement on Auditing
Standards No. 61, as amended, “Communication with Audit Committees,” other
standards of the Public Company Accounting Oversight Board (United States),
rules of the Securities and Exchange Commission, and other applicable
regulations. In addition, the Audit Committee has discussed with the independent
registered public accounting firm the firm’s independence from Company
management and the Company, including the matters in the letter from the firm
required by applicable requirements of the Public Company Accounting Oversight
Board and considered the compatibility of non-audit services with the
independent registered public accounting firm’s independence.
The Audit
Committee also reviewed and discussed management’s report on its assessment of
the effectiveness of the Company’s internal control over financial reporting and
the independent registered public accounting firm’s report on management’s
assessment and the effectiveness of the Company’s internal control over
financial reporting.
The Audit
Committee discussed with the Company’s internal auditors and independent
registered public accounting firm the overall scope and plans for their
respective audits. The Audit Committee meets with the independent registered
public accounting firm, with and without management present, to discuss the
results of their examinations; their evaluations of the Company’s internal
control, including internal control over financial reporting; and the overall
quality of the Company’s financial reporting.
In
reliance on the reviews and discussions referred to above, the Audit Committee
recommended to the Board of Directors that the audited consolidated financial
statements and management’s assessment of the effectiveness of the Company’s
internal control over financial reporting be included in the Annual Report on
Form 10-K for the year ended December 31, 2008 filed by the Company with
the Securities and Exchange Commission.
AUDIT
COMMITTEE
Douglas
C. Jacobs
Larry D.
McNabb
Bruce A.
Choate
April 2,
2009
Ernst &
Young LLP was retained to audit the Company’s consolidated financial statements
for 2008 and to provide various other services to the Company and its
subsidiaries. In addition, as part of its annual process, the Audit Committee
will consider the appointment of Ernst & Young as the Company’s
auditors for fiscal year 2009. Representatives of Ernst & Young will be
present at the 2009 Annual Meeting and they will be given an opportunity to make
a statement if they desire to do so and will be available to respond to any
appropriate questions from stockholders.
Audit
Fees and All Other Fees
The
following table sets forth the fees paid or accrued by the Company for the audit
and other services provided by Ernst & Young for fiscal years ended
December 31, 2008 and 2007.
|
Fiscal
Year Ended
December
31,
|
|||||||
|
2008
|
2007
|
||||||
|
Audit
Fees(1)
|
$ | 1,176,815 | $ | 1,140,550 | |||
|
Audit-related
Fees(2)
|
2,500 | 2,465 | |||||
|
Tax
Fees(3)
|
77,278 | — | |||||
|
All
Other Fees
|
— | — | |||||
|
Total(4)
|
$ | 1,256,593 | $ | 1,143,015 | |||
____________________________
|
(1)
|
Includes
fees and expenses related to fiscal year audits and interim reviews of the
Company and its financial services subsidiary, Standard Pacific Mortgage,
Inc., services rendered in connection with public securities offerings,
and fees incurred in connection with auditing the Company’s internal
control over financial reporting, as required by Section 404 of the
Sarbanes-Oxley Act of 2002. Does not include $106,500 and $180,740 in fees
and expenses related to fiscal year audits of unconsolidated joint
ventures with respect to which the Company, directly or indirectly, is the
managing member for the fiscal years ended December 31, 2008 and
2007, respectively.
|
|
(2)
|
Includes
fees related to an online subscription to Ernst & Young’s
internal accounting literature
database.
|
|
(3)
|
Includes
fees related to research with respect to various tax
issues.
|
|
(4)
|
All
fees listed above were approved by the Audit Committee and accordingly
there was no reliance on a waiver from pre-approval under Rule
2-01(c)(7)(i)(C).
|
Audit
Committee Pre-Approval of Audit and Permissible Non-Audit Services
The Audit
Committee is responsible for pre-approving all audit and permissible non-audit
services provided by the independent auditor. For audit services, each year the
independent auditor provides the Audit Committee with an engagement letter
outlining the scope of the audit and review services proposed to be performed
during the year and the cost for performing such services, which must be
formally approved by the Audit Committee before such services
commence.
Each
year, management submits to the Audit Committee a list of audit-related and
non-audit services with respect to which the independent auditor may be engaged.
When assessing whether it is appropriate to engage the independent auditor to
perform such services, the Audit Committee considers, among other things,
whether such services are consistent with the auditor’s independence. For those
services approved by the Audit Committee, the committee also establishes an
aggregate cap on fees associated with such services. In addition, at each
regular meeting of the Audit Committee management reports to the committee
details of audit related and non-audit related services that were rendered by
the independent auditor since the prior meeting.
In order
to expedite the handling of unexpected matters, the Audit Committee has
authorized its Chairman to approve audit and non-audit services that do not fall
within the pre-approved list. If the Chairman approves such services, he reports
the action taken to the committee at its next regular meeting. All audit,
audit-related and permissible non-audit services provided by the Company’s
independent auditors to the Company for the fiscal year ended December 31,
2008 were approved or pre-approved in accordance with the foregoing policy. In
addition, the Audit Committee considered the provision of the services listed in
the table above by Ernst & Young and determined that the provision of
such services was compatible with maintaining the independence of
Ernst & Young.
The
following table sets forth certain information as of March 10, 2009 (except
as noted otherwise) regarding ownership of the Company’s Shares by (1) each
director of the Company, (2) each executive officer of the Company named in the
summary compensation table, (3) all directors and executive officers of the
Company as a group, and (4) each person known by the Company to be the
beneficial owner of more than 5% of any class of the Company’s Shares. This
table is based on information supplied to the Company by the Company’s executive
officers and directors and on Schedule 13Gs filed with the Securities and
Exchange Commission. Except as noted below, the address of the named
beneficial owner is c/o Standard Pacific Corp., 26 Technology Drive, Irvine,
California 92618-2338.
|
Common
Stock
|
Senior
Preferred Stock
|
|||||||
|
Name
of Beneficial Owner
|
Shares(1)
|
Percent
of Class **
|
Shares
|
Percent
of
Class
|
||||
|
Directors
and Executive Officers
|
||||||||
|
Kenneth
L. Campbell
|
(2)
|
(2)
|
723,499(2)
|
100%
|
||||
|
Scott
D. Stowell
|
526,313
|
*
|
0
|
—
|
||||
|
Bruce
F. Dickson
|
180,998
|
*
|
0
|
—
|
||||
|
Bruce
A. Choate
|
41,677
|
*
|
0
|
—
|
||||
|
Dr. James L.
Doti
|
67,577
|
*
|
0
|
—
|
||||
|
Ronald
R. Foell
|
404,925
|
*
|
0
|
—
|
||||
|
Douglas
C. Jacobs
|
84,223
|
*
|
0
|
—
|
||||
|
David
J. Matlin
|
(3)
|
(3)
|
723,499(3)
|
100%
|
||||
|
Larry
D. McNabb
|
94,049
|
*
|
0
|
—
|
||||
|
J.
Wayne Merck
|
41,677
|
*
|
0
|
—
|
||||
|
F.
Patt Schiewitz
|
41,677
|
*
|
0
|
—
|
||||
|
Directors
and Executive Officers as a Group (15 persons)
|
1,860,251
|
1.9
|
0
|
—
|
||||
|
Former Executive
Officers(8)
|
||||||||
|
Stephen
J. Scarborough
|
2,158,646
|
2.2
|
0
|
—
|
||||
|
Jeffrey
V. Peterson
|
58,453
|
*
|
0
|
—
|
||||
|
Andrew
H. Parnes
|
462,249
|
*
|
0
|
—
|
||||
|
Clay
A. Halvorsen
|
234,719
|
*
|
0
|
—
|
||||
|
Douglas
C. Krah
|
58,111
|
*
|
0
|
—
|
||||
|
5%
Beneficial Owners
|
||||||||
|
MP
CA Homes, LLC(4)
|
(4)
|
(4)
|
723,499(4)
|
100%
|
||||
|
Barclays
Global Investors, NA(5)
|
10,620,504
|
10.6
|
0
|
—
|
||||
|
Renaissance
Technologies, LLC(6)
|
5,515,800
|
5.5
|
0
|
—
|
||||
|
The
Vanguard Group, Inc.(7)
|
5,058,035
|
5.0
|
0
|
—
|
||||
|
____________________________
|
|
*
|
Less
than one percent.
|
|
**
|
Applicable
percentage of ownership is based on 100,624,350 shares of the Common Stock
outstanding as of March 10, 2009. To the Company’s knowledge, none of such
shares have been pledged as security by any of the Company’s directors or
executive officers, except that Mr. Choate pledged 22,632 shares as
security for a short-term loan.
|
|
(1)
|
The
total number of shares listed in the “Shares” column for each named
executive officer and director includes the following number of shares
subject to options held by such named executive officer or director which
are exercisable within 60 days after March 10, 2009: Mr. Campbell 0,
Mr. Stowell 392,600, Mr. Dickson 120,932, Mr. Choate 0,
Dr. Doti 0, Mr. Foell 30,000, Mr. Jacobs 30,000, Mr. Matlin
0, Mr. McNabb 30,000, Mr. Merck 0, Mr. Schiewitz 0, and all
directors and executive officers as a group 889,932. As of
March 10, 2009, all of these options were
underwater.
|
|
(2)
|
As
a result of his ownership interest in, and employment with, an affiliate
of MP CA Homes, LLC, Mr. Campbell may be deemed to be the beneficial owner
of all of the shares of Series B Preferred Stock held by MP CA Homes,
LLC. Please see footnote 4
below.
|
|
(3)
|
As
a result of his ownership of 50% of the ownership interests of
MatlinPatterson LLC, an affiliate of MatlinPatterson, Mr. Matlin may be
deemed to be the beneficial owner of all of the shares of Series B
Preferred Stock held by MatlinPatterson. Please see footnote 4
below.
|
|
(4)
|
MP
CA Homes, LLC (identified as MatlinPatterson throughout the rest of this
proxy statement), an affiliate of MatlinPatterson Global Advisers LLC,
beneficially owns, and is the record holder of, 723,499 shares of Series B
Preferred Stock comprised of 450,829 shares of Series B Preferred Stock
and a warrant to acquire 272,670 shares of Series B Preferred Stock, with
respect to which it has sole dispositive power. The address of MP CA
Homes, LLC is 520 Madison Avenue, 35th
Floor, New York, NY 10022-4213. The Series B Preferred Stock currently
represents 49% of the total voting power of the Shares of the Company. The
Series B Preferred Stock will vote with the Common Stock on an
as-converted basis, provided that the votes attributable to such shares of
Series B Preferred Stock with respect to any holder of Series B Preferred
Stock cannot exceed 49% of the total voting power of the Shares of the
Company. The Series B Preferred Stock is initially convertible into up to
237,212,786 shares of Common Stock; however, MP CA Homes, LLC is not
entitled to convert the Series B Preferred Stock into Common Stock unless
after such conversion it would hold no more than 49% of the voting power
of the Shares of the Company. Upon a voluntary or involuntary liquidation,
dissolution or winding up of the Company, the holders of Series B
Preferred Stock will receive the amount payable if the Series B Preferred
Stock had been converted into Common Stock immediately prior to the
liquidating distribution. For such purposes, the as-converted number for
the Series B Preferred Stock would be 237,212,786 shares of Common Stock,
or 70.3% of the outstanding Common
Stock.
|
|
(5)
|
Barclays
Global Investors, NA beneficially owns 10,620,504 shares of Common Stock,
9,089,992 shares over which it has sole voting power and 10,620,504 shares
over which it has sole dispositive power. The address of Barclays Global
Investors, NA is 400 Howard Street, San Francisco, CA 94105. This
information is based on a Schedule 13G/A filed by Barclays Global
Investors, NA with the Securities and Exchange Commission on February 6,
2009.
|
|
(6)
|
Renaissance
Technologies, LLC beneficially owns 5,515,800 shares of Common Stock,
5,488,200 shares over which it has sole voting power and 5,514,800 shares
over which it has sole dispositive power. The address of
Renaissance Technologies, LLC is 800 Third Avenue, New York, NY
10022. This information is based on a Schedule 13G filed by
Renaissance Technologies, LLC with the Securities and Exchange Commission
on February 12, 2009.
|
|
(7)
|
The
Vanguard Group, Inc. beneficially owns 5,058,035 shares of Common Stock
over which it has sole dispositive power and 169,972 shares over which it
has sole voting power. The address of The Vanguard Group, Inc.
is 100 Vanguard Blvd., Malvern, PA 19355. This information is
based on a Schedule 13G filed by The Vanguard Group, Inc.
with the Securities and Exchange Commission on February 13,
2009.
|
|
(8)
|
The
shares listed for each of Messrs. Scarborough, Peterson, Parnes, Halvorsen
and Krah are estimates based on the shares of Common Stock reported as
owned (or subject to option) by them prior to the dates of their
separations from the Company.
|
Any
eligible stockholder of the Company wishing to have a proposal considered for
inclusion in the Company’s 2010 proxy solicitation materials, including director
nominations, must set forth such proposal in writing and submit it to the
Company’s Corporate Secretary on or before December 3, 2010. The
Board of Directors will review proposals from eligible stockholders if they are
received by December 3, 2010 and will determine whether such proposals will
be included in the Company’s 2010 proxy solicitation materials. A
stockholder is eligible to present proposals to the Board of Directors if he or
she is the record or beneficial owner of at least one percent, or $2,000 in
market value, of Company securities entitled to be voted at the 2010 annual
meeting of stockholders and has held such securities for at least one year, and
he or she continues to own such securities through the date on which the meeting
is held. Proposals must be submitted in accordance with the Company’s bylaws and
comply with Securities and Exchange Commission regulations promulgated pursuant
to Rule 14a-8 of the Exchange Act of 1934, as amended. If a stockholder desires
to have a proposal presented at the Company’s 2010 annual meeting of
stockholders and the proposal is not intended to be included in the Company’s
related 2010 proxy solicitation materials, the stockholder must give advance
notice to the Company in accordance with the Company’s bylaws. According to the
bylaws of the Company, in order for a stockholder proposal to be properly
brought before any meeting of stockholders, the stockholder must give notice of
the proposal in writing to the Company’s Corporate Secretary at the Company’s
principal executive offices not less than 90 days in advance of the meeting or,
if later, the seventh day following the first public announcement of the date of
the meeting. All stockholder proposals must include the information required by
the Company’s bylaws. Stockholders may contact the Company’s Corporate Secretary
at the address set forth on the next page of this proxy statement for a copy of
the bylaw provisions that set forth the requirements for making stockholder
proposals and nominating director candidates.
To the
Company’s knowledge, based solely on its review of the copies of reports filed
pursuant to Section 16(a) of the Securities Exchange Act of 1934 that were
required to be furnished to us, all of the reports required under
Section 16(a), during or with respect to the fiscal year ended
December 31, 2008, were filed on a timely basis, except:
|
·
|
a
Form 4 for each of Mr. Stowell and Mr. Krah related to the Company’s
repurchase of 1,524 shares from each of them to satisfy tax withholding
obligations associated with the vesting of a restricted stock
award;
|
|
·
|
a
Form 4 for Mr. Scarborough related to the Company’s repurchase of 19,719
shares from him to satisfy tax withholding obligations associated with the
vesting of a restricted stock award;
and
|
|
·
|
a
Form 4 for Mr. McNabb related to our August 2008 common stock rights
offering.
|
Along
with this proxy statement, the Company has made available to each stockholder
entitled to vote, a copy of its Annual Report to Stockholders and Annual Report
on Form 10-K. The Company incorporates herein the information set forth in
Item 10 of our Form 10-K relating to the executive officers of the Company.
The Company will provide,
without charge, a copy of its Annual Report on Form 10-K for the year ended
December 31, 2008 (without the exhibits thereto) and/or a copy of the
exhibits to its 2008 Form 10-K, upon the written or oral request of any
stockholder or beneficial owner of its common stock. Requests should be directed
to the following address:
John
P. Babel
Corporate
Secretary
Standard
Pacific Corp.
26
Technology Drive
Irvine,
California 92618-2338
(949)
789-1600
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON MAY 13, 2009
The
Notice of Internet Availability of Proxy Materials and this proxy statement and
Annual Report on Form 10-K for the year ended December 31, 2008 are available at
www.proxyvote.com.
At the
time of the preparation of this proxy statement, the Board of Directors of the
Company was not aware of any other matters that would be presented for action at
the Annual Meeting. Should any other matters properly come before the meeting,
action may be taken thereon pursuant to the proxies in the form enclosed, which
confer discretionary authority on the persons named therein or their substitutes
with respect to such matters.
|
By
Order of the Board of Directors
|
|
|
/s/ John
P. Babel
|
|
|
John
P. Babel
Secretary
|
Irvine,
California
April 2,
2009
