scarborough8k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported): June 10, 2009
STANDARD
PACIFIC CORP.
(Exact
Name of Registrant as Specified in Charter)
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Delaware
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1-10959
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33-0475989
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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26
Technology Drive
Irvine,
California
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92618
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (949) 789-1600
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the Registrant under any of the following
provisions:
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
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ITEM 5.02
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DEPARTURE
OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF
PRINCIPAL OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN
OFFICERS
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The
Company entered into a Settlement Agreement with Stephen J. Scarborough, its
former, Chairman, Chief Executive Officer and President, which became effective
June 10, 2009. The settlement agreement concludes the dispute between the
Company and Mr. Scarborough regarding Mr. Scarborough’s employment related
claims for over $23 million in damages from the Company. In exchange for a
mutual release, the payment of Mr. Scarborough’s attorney’s fees, the additional
payment of $1 million dollars, and the extension of the vesting period on
280,000 stock options granted on February 7, 2008 from April 4, 2010 to December
31, 2013, Mr. Scarborough agreed to dismiss with prejudice all of his claims
against the Company.
A copy of
the settlement agreement is attached hereto as Exhibit 10.1 and is incorporated
herein by reference.
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ITEM 9.01
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FINANCIAL
STATEMENTS AND EXHIBITS
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(d)
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Exhibits
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10.1
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Stephen
J. Scarborough Settlement Agreement
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date:
June 11, 2009
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STANDARD
PACIFIC CORP.
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By:
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/s/ John
M. Stephens
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John
M. Stephens
Senior
Vice President & Chief Financial Officer
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EXHIBIT
INDEX
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EXHIBIT
NUMBER
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DESCRIPTION
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10.1
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Stephen
J. Scarborough Settlement Agreement
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SETTLEMENT AGREEMENT AND
MUTUAL GENERAL RELEASE
This
Settlement Agreement and Mutual General Release (hereinafter "Agreement") is
made and entered into by and between Stephen J. Scarborough ("Scarborough") and
Standard Pacific Corp. ("Standard Pacific").
WHEREAS,
Scarborough was employed by Standard Pacific until his resignation of employment
on March 20, 2008;
WHEREAS,
on March 25, 2008 Scarborough signed a Retirement Agreement which included,
among other things, a release of all claims against Standard Pacific and
others;
WHEREAS,
on May 27, 2008, Standard Pacific publicly announced that on May 26, 2008, it
had entered into an Investment Agreement with MP CA Homes, LLC
("MatlinPatterson"), pursuant to which MatlinPatterson ultimately became
beneficial owner of 49% of the voting stock of Standard Pacific;
WHEREAS,
Scarborough has alleged that he was fraudulently induced to sign the Retirement
Agreement, thus rendering it void;
WHEREAS,
Scarborough has claimed that he is entitled to benefits under his
December 1, 2006 Change in Control Agreement;
WHEREAS,
Scarborough filed a Statement of Claim with the Judicial Arbitration and
Mediation Service (JAMS), which is entitled "Stephen J. Scarborough v.
Standard Pacific Corporation" and is designated as Reference
No. 1200041249. The Statement of Claim includes the
above-referenced claims as well as a reservation of rights to assert an age
discrimination claim;
WHEREAS,
a hearing on the Statement of Claim was held before Arbitrator William Masterson
on May 4-8, 2009;
WHEREAS,
Scarborough and Standard Pacific are in the process of preparing post-hearing
briefs to submit to the Arbitrator in anticipation of his decision.
NOW,
THEREFORE, in consideration of the premises and promises herein contained, IT IS
AGREED AS FOLLOWS:
1. The
parties are entering into this Agreement for the sole purpose of avoiding the
time and expense involved in the continued litigation of this matter; and this
Agreement shall not in any way be construed as an admission by either party of
the merit of any of the contentions of the other party asserted in the course of
the arbitration proceeding. In addition, this Agreement shall not in
any way be construed as an admission by Standard Pacific that it has acted
wrongfully with respect to Scarborough or any other person, or that Scarborough
has any rights whatsoever against Standard Pacific, its predecessors, affiliates
or related entities or any of their current or former officers, directors,
employees or agents, and Standard Pacific specifically disclaims any liability
to or wrongful acts against Scarborough or any other person, on the part of
itself, or any of its current or former officers, directors, employees or
agents.
2. By
this Agreement, Standard Pacific and Scarborough each acknowledges the validity
of the Retirement Agreement, including the mutual releases of claims set forth
therein. In the event of any conflict between the terms of this
Agreement and the Retirement Agreement, the terms of this Agreement will
prevail.
3. Immediately
upon the signing of this Agreement, the parties will notify JAMS and the
Arbitrator of their settlement. Following expiration of the
revocation period in Paragraph 20 below and the payment of the amounts in
Paragraph 4 below, Scarborough shall immediately deliver to JAMS a Request for
Dismissal with prejudice of all claims currently pending.
4. Standard
Pacific agrees that when its counsel of record receives the fully executed
original of this Agreement, then within five (5) business days after the
expiration of the revocation period in Paragraph 20 below, it shall
transmit to Scarborough's attorney two checks in full and complete settlement of
any and all claims Scarborough may have against (1) Standard Pacific and
its predecessors, (2) all current and former employees, directors and
agents of Standard Pacific and its predecessors; (3) all current and former
corporate entities affiliated with or related to Standard Pacific and its
predecessors (including without limitation MatlinPatterson and its affiliates),
and (4) all current and former employees, directors and agents of said
affiliated or related entities. The first check, in the amount of One
Million Dollars ($1,000,000), shall be made payable to Stephen J. Scarborough
and shall be for Scarborough's alleged damages, and the second check for
attorneys' fees and costs up to a maximum amount of One Million Seven Hundred
Fifty Thousand Dollars ($1,750,000) (subject to verification of these amounts
from Scarborough's attorneys) shall be made payable to Irell & Manella
LLP. Standard Pacific will issue an IRS Form 1099 with respect to
both payments.
Standard
Pacific also hereby agrees to extend the time period in which Scarborough may
exercise 280,000 stock options (which were granted on February 7, 2008 pursuant
to the 2000 Stock Option Plan) up to and including December 31,
2013. All other stock options not previously exercised will be
immediately cancelled upon execution of this Agreement.
5. Scarborough
recognizes and agrees that Standard Pacific has not made any withholding, be it
income tax and/or social security, with respect to the above-mentioned payments,
nor has it made a determination and/or opinion regarding such potential
withholdings nor as to applicability of same. Scarborough agrees to
assume absolute and complete responsibility and to indemnify Standard Pacific
for any liability regarding such withholdings, be it local, federal or of any
sort, that may be assessed upon the payments described in the above paragraph,
or due to Standard Pacific's failure to make any withholding, including, but not
limited to, interest, extra charges and/or penalties.
6. (a) Scarborough
represents that he has not filed any complaints, charges or lawsuits against
Standard Pacific and its predecessors or against (1) any current or former
employee, director or agent of Standard Pacific, (2) any current or former
affiliate or related entity of Standard Pacific and its predecessors (including
without limitation MatlinPatterson and its affiliates), or (3) the current
or former employees, directors or agents of said affiliates or related entities
with any governmental agency or any court, other than JAMS Reference No.
1200041249; that he will withdraw and dismiss with prejudice this and any other
complaints filed with any agency or court; that he will not file any complaint,
charge or lawsuit against any of these entities or persons at any time hereafter
for any event occurring prior to the date of this Agreement; and that if any
agency or court assumes jurisdiction of any such complaint, charge or lawsuit
against any of these entities or persons on behalf of Scarborough, he will
request that the matter be dismissed with prejudice.
(b) Standard
Pacific, on its own behalf, and on behalf of its affiliated or related entities
(but not including MatlinPatterson and its affiliates other than Standard
Pacific) represents that they have not filed any complaints, charges or lawsuits
against Scarborough with any governmental agency or any court; that they will
withdraw and dismiss with prejudice any such complaints filed with any agency or
court if they are found to exist; that they will not file any complaint, charge
or lawsuit against Scarborough at any time hereafter for any event occurring
prior to the date of this Agreement; and that if any agency or court assumes
jurisdiction of any such complaint, charge or lawsuit against Scarborough on
behalf of any of these entities, they will request that the matter be dismissed
with prejudice.
7. As
a material inducement to Standard Pacific to enter into this Agreement, for a
period expiring on March 20, 2010, Scarborough agrees to cooperate with Standard
Pacific in seeking to enhance its business relationships with developers,
landowners and other home building companies. This provision is in no
way intended to restrict or inhibit Scarborough's right to compete, directly or
indirectly, with Standard Pacific, and the parties acknowledge that Scarborough
retains his right to compete. Further, this provision does not create
any employer-employee, independent contractor, agency or other affiliation
between Scarborough and Standard Pacific. Scarborough further
represents and agrees that he will not directly or indirectly aid or assist
(either financially or otherwise) any other person in bringing a claim or
lawsuit against Standard Pacific. The foregoing provision shall not
preclude Scarborough from testifying truthfully and/or from responding to a
subpoena or other legal process.
8. (a)
Scarborough represents and agrees that he fully understands his right to discuss
all aspects of this Agreement with his attorneys, that he has availed himself of
this right, that he has carefully read and fully understands all of the
provisions of this Agreement, and that he is voluntarily entering into this
Agreement.
(b) Standard Pacific
represents and agrees that it fully understands its right to discuss all aspects
of this Agreement with its attorneys, that it has availed itself of this right,
that it has carefully read and fully understands all of the provisions of this
Agreement, and that it is voluntarily entering into this
Agreement.
9. As
a material inducement to enter into this Agreement, Scarborough and Standard
Pacific (on its own behalf, and on behalf of its affiliated or related entities,
but not including MatlinPatterson and its affiliates other than Standard
Pacific), hereby irrevocably and unconditionally release, acquit and forever
discharge each other and, as applicable, their current and former subsidiaries,
affiliates, divisions, successors, predecessors, related corporate entities,
assigns, owners, stockholders, insurers, partners and all of their current and
former directors, officers, employees, agents, representatives, attorneys and
all persons acting by, through, under or in concert with any of them
(collectively "Releasees"), from any and all charges, complaints, claims,
liabilities, obligations, promises, agreements, damages, actions, causes of
action, suits, rights, demands, costs, losses, debts and expenses (including
attorneys' fees and costs) actually incurred of any nature whatsoever, known or
unknown, suspected or unsuspected ("Claim" or "Claims") which they now have, own
or hold, or claim to have, own or hold, or which they at any time heretofore
had, owned or held, or claimed to have had, owned or held, or which they at any
time hereafter may have, own or hold, or claim to have, own or hold, against
each other or any of the Releasees relating to any event, act or omission that
has occurred as of the date of this Agreement. This release (as well
as Scarborough's covenants in Paragraph 6(a) above) shall not apply to
Scarborough's rights under the 2000 Stock Option Plan as referenced in
Paragraph 4 above, and to those certain exempted claims numbered (i), (ii),
(iv), (v) and (vi) and referenced in Paragraph 5(a) of the Retirement
Agreement and each party's rights pursuant to this Agreement.
10. As
a further material inducement to enter into this Agreement, Standard Pacific and
Scarborough hereby agree to indemnify and hold each other, and each and all of
the Releasees, harmless from and against any and all losses, costs, damages, or
expenses, including, without limitation, attorneys' fees, arising out of their
breach of this Agreement or the fact that any representation they made herein
was false when made.
11. The
parties expressly waive and relinquish all rights and benefits afforded by
Section 1542 of the Civil Code of the State of California, and do so
understanding and acknowledging the significance and consequence of such
specific waiver of Section 1542. Section 1542 of the Civil
Code of the State of California states as follows:
"A
general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor."
Thus,
notwithstanding the provisions of Section 1542, and for the purpose of
implementing a full and complete release and discharge of Scarborough and the
Releasees, the parties expressly acknowledge that this Agreement is intended to
include in its effect, without limitation, all Claims which they do not know or
suspect to exist in their favor at the time of execution hereof, and that this
Agreement contemplates the extinguishment of any such Claim or
Claims.
12. The
parties represent that they have not heretofore assigned or transferred, or
purported to assign or transfer, to any person or entity, any Claim or any
portion thereof, or interest therein, and agree to indemnify, defend and hold
each other and Releasees harmless from and against any and all Claims, based on
or arising out of any such assignment or transfer, or purported assignment or
transfer of any Claims or any portion thereof or interest therein.
13. The
parties represent and acknowledge that in executing this Agreement they are not
relying and have not relied upon any representation or statement not set forth
herein made by the other party to this Agreement, the Releasees, or any of their
agents, representatives, or attorneys with regard to the subject matter, basis
or effect of this Agreement or otherwise.
14. This
Agreement shall be binding upon each of the parties and their respective heirs,
administrators, representatives, executors, successors and assigns, and shall
inure to the benefit of the Releasees and each of them, and to their heirs,
administrators, representatives, executors, successors and assigns.
15. This
Agreement is made and entered into in the State of California and shall in all
respects be interpreted, enforced and governed under the laws of said
State. The language of all parts of this Agreement shall in all cases
be construed as a whole, according to its fair meaning, and not strictly for or
against any of the parties. It is agreed that this Agreement shall be
construed with the understanding that both parties were responsible for drafting
it.
16. Should
any of the provisions of this Agreement be declared or be determined to be
illegal or invalid, the validity of the remaining parts, terms or provisions
shall not be affected thereby and said illegal or invalid part, term or
provision shall be deemed not to be a part of this Agreement.
17. This
Agreement sets forth the entire agreement between the parties hereto and, except
for the Retirement Agreement, fully supersedes any and all prior agreements or
understandings between the parties hereto pertaining to the subject matter
hereof. This Agreement may not be amended or modified except by
virtue of a writing signed by both parties. Any waiver of one or more
provisions of the Agreement shall not constitute a waiver of any of the
remaining provisions hereto.
18. The
parties represent that they have full and complete authority to enter into this
Agreement, including, without limitation, authority to make the representations,
agree to the covenants, and grant the releases contained herein, and that no
further approval, ratification or consent of any other person(s) or entity(ies)
is necessary in order for this Agreement to be fully binding and enforceable
according to its terms.
19. Except
as expressly provided in Paragraph 4 above, the parties agree to be solely
responsible for their respective attorneys' fees and costs incurred in the
litigation of this matter. However, in the event it becomes necessary
for any party to file a legal action to interpret or enforce this Agreement,
then the prevailing party shall be entitled to reasonable legal fees, reasonable
expert fees and costs.
20. Pursuant
to the Older Workers' Benefit Protection Act, Scarborough waives any all rights
and/or claims he may have under the Age Discrimination in Employment
Act. Accordingly, Scarborough shall have 21 days from receipt of this
Agreement to consider signing it, he shall have 7 days following signing of the
Agreement to revoke it in writing, and this Agreement shall not be enforceable
until the revocation period has expired. Any such written revocation
shall be sent to William D. Claster, 3161 Michelson Drive, Irvine,
California 92612-4412, Fax No. (949) 475-4629.
PLEASE
READ CAREFULLY. THIS SETTLEMENT AGREEMENT AND GENERAL RELEASE
INCLUDES A RELEASE OF ALL KNOWN OR UNKNOWN CLAIMS.
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Executed
at Newport Beach, California this 3rd day of June,
2009.
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/s/
Stephen J. Scarborough
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STEPHEN
J. SCARBOROUGH
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Executed
at Irvine, California this 2nd day of June, 2009.
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STANDARD
PACIFIC CORP.
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By:
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/s/
Kenneth L. Campbell
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Kenneth
L. Campbell
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President
& Chief Executive Officer
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APPROVED AS TO
FORM:
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June
3, 2009
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IRELL
& MANELLA LLP
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By:
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/s/
Evan C. Borges
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Evan
C. Borges
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Attorney
for Stephen J. Scarborough
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June
3, 2009
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GIBSON,
DUNN & CRUTCHER LLP
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By:
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/s/
William D. Claster
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William
D. Claster
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Attorney
for Standard Pacific Corp.
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