SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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
[X] Definitive Proxy Statement Commission Only (as Permitted by
Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Under Rule 14a-12
STANDARD PACIFIC CORP.
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(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):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
STANDARD PACIFIC CORP.
15326 Alton Parkway
Irvine, California 92618-2338
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 16, 2001
The 2001 Annual Meeting of Stockholders of Standard Pacific Corp. (the
"Company") will be held at the Four Seasons Hotel, 690 Newport Center Drive,
Newport Beach, California 92660, on May 16, 2001 at 11:00 A.M., local time,
for the following purposes:
(1) To elect three directors, constituting Class I of the Board of
Directors, to hold office for a three-year term;
(2) To consider the approval of the Company's Amended Management Incentive
Bonus Plan; and
(3) To transact such other business as may properly come before the meeting
and any postponement or adjournment thereof.
The close of business on March 22, 2001 has been fixed by the Board of
Directors as the record date for the determination of stockholders entitled to
receive notice of and to vote at the Annual Meeting and any and all
postponements and adjournments thereof.
In order to constitute a quorum for the conduct of business at the Annual
Meeting, it is necessary that holders of a majority of all outstanding shares
of common stock be present in person or be represented by proxy. Your
attention is invited to the accompanying proxy statement. To assure your
representation at the Annual Meeting, please date, sign and mail the enclosed
proxy for which a return envelope is provided. Stockholders may also vote by
telephone or the Internet, 24 hours a day, 7 days a week. Please follow the
instructions printed on the enclosed proxy card. Stockholders who attend the
Annual Meeting may vote in person even though they have previously mailed
their proxy or voted via telephone or the Internet.
By Order of the Board of Directors
CLAY A. HALVORSEN
Secretary
Irvine, California
March 30, 2001
TABLE OF CONTENTS
Page
----
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
PROXY STATEMENT............................................................ 1
GENERAL INFORMATION........................................................ 1
RECORD DATE AND VOTING..................................................... 1
PROPOSAL NO. 1: ELECTION OF DIRECTORS...................................... 3
PROPOSAL NO. 2: AMENDED MANAGEMENT INCENTIVE BONUS PLAN.................... 6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT............. 9
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD............................. 10
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION................ 11
EXECUTIVE COMPENSATION..................................................... 12
CERTAIN TRANSACTIONS....................................................... 14
REPORT OF THE COMPENSATION COMMITTEE....................................... 15
REPORT OF THE AUDIT COMMITTEE.............................................. 18
COMPANY PERFORMANCE........................................................ 19
INFORMATION CONCERNING AUDITORS............................................ 20
STOCKHOLDER PROPOSALS FOR THE 2002 ANNUAL MEETING OF STOCKHOLDERS.......... 20
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.................... 20
FORM 10-K ANNUAL REPORT.................................................... 21
OTHER MATTERS.............................................................. 21
APPENDIX A: CHARTER OF AUDIT COMMITTEE..................................... A-1
PROXY STATEMENT
STANDARD PACIFIC CORP.
15326 Alton Parkway
Irvine, California 92618-2338
ANNUAL MEETING OF STOCKHOLDERS
MAY 16, 2001
GENERAL INFORMATION
This proxy statement is being mailed on or about March 30, 2001 in
connection with the solicitation on behalf of the Board of Directors of
Standard Pacific Corp., a Delaware corporation (the "Company"), of proxies for
use at the Annual Meeting of Stockholders of the Company to be held on
Wednesday, May 16, 2001, at the Four Seasons Hotel, 690 Newport Center Drive,
Newport Beach, California 92660, at 11:00 A.M., local time, and at any and all
postponements and adjournments thereof.
The entire cost of this solicitation of proxies will be borne by the
Company, including expenses in connection with preparing, assembling and
mailing the proxy solicitation materials and all papers accompanying them. 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
material to beneficial owners. In addition to solicitation by mail, certain
officers, directors and regular employees of the Company, who will receive no
extra compensation for their services, may solicit proxies by telephone,
facsimile, e-mail or personally. The Company has engaged ChaseMellon
Consulting Services, L.L.C. to assist in the solicitation of proxies. The fee
for such services will be approximately $5,500 plus reasonable expenses.
RECORD DATE AND VOTING
All voting rights are vested exclusively in the holders of the Company's
common stock, par value $.01 per share. Only stockholders of record as of the
close of business on March 22, 2001 are entitled to receive notice of and to
vote at the 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 (i) in favor of the election of the Class I
directors of the Company designated hereinafter as nominees (see "Election of
Directors" at page 3 of this proxy statement) and (ii) for approval of the
Company's Amended and Restated Management Incentive Bonus Plan (see "Amended
Management Incentive Bonus Plan" at page 6 of this proxy statement). 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 meeting and casting his or her vote in
person. A stockholder's last vote will be the vote that is counted.
As of March 1, 2001, the Company had outstanding a total of 30,192,157
shares of common stock, each share of which is entitled to one vote. The
presence, either in person or by proxy, of persons entitled to vote a majority
of the outstanding common stock is necessary to constitute a quorum for the
transaction of business at the Annual Meeting.
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 as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum and as votes against any matter submitted to the stockholders for a
vote. Abstentions will have no effect on the election of directors, however,
such election being by a plurality vote.
The election inspectors will treat broker non-votes as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum. However, for purposes of determining the outcome of any matter as to
which the 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 such
matter.
Stockholders can vote by telephone by calling toll free 1-877-779-8683 from
the U. S. or Canada (outside the U. S. or Canada 1-201-536-8073) or via the
Internet at http://www.eproxyvote.com/spf at anytime before the Annual Meeting
on May 16, 2001. Telephone and Internet voting is available 24 hours a day, 7
days a week. Telephone and Internet voting information is provided on the
proxy card. Control numbers, located immediately above the electronic voting
instructions on the proxy cards, are designed to verify stockholders'
identities and allow them to vote their shares and confirm that their voting
instructions have been properly recorded.
2
Proposal No. 1
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes, with each of the
classes having three directors (subject to vacancies) and only one class being
elected each year. In 2001, three directors are to be elected as Class I
directors for a term of three years or until the election and qualification of
their respective successors. The current Class I directors (whose terms expire
on the date of the Annual Meeting) are Arthur E. Svendsen, Dr. James L. Doti
and Keith D. Koeller.
Mr. Svendsen, who has served as the Chairman of the Board of the Company
since 1961, has announced his retirement from the Board of Directors effective
as of the date of the Annual Meeting. Stephen J. Scarborough, the Chief
Executive Officer of the Company, will assume the additional position of
Chairman of the Board upon Mr. Svendsen's retirement. Mr. Svendsen will assume
the advisory role of Chairman Emeritus of the Company.
Nominees for Election
The Board of Directors has nominated the following persons for election as
Class I directors: Dr. James L. Doti, Keith D. Koeller and Andrew H. Parnes.
Dr. Doti and Mr. Koeller have served as directors of the Company since 1995.
Mr. Parnes does not currently serve on the Board of Directors.
The information set forth below as to each nominee has been furnished by
the nominee:
Period Served as Director
or Executive
Officer of the Company
and Other Business
Name and Present Position, Class of Term Experience During the
if any, with the Company Age Director Expires Past Five Years
-------------------------- --- -------- ------- -------------------------
Dr. James L. Doti(1)(2)........ 54 Class I 2004 Director since May 1995.
President of Chapman
University since 1991 and
professor of economics
since 1974. Dr. Doti
founded the University's
Center for Economic
Research in 1978 and was
appointed the Donald Bren
Distinguished Professor
of Business and Economics
in 1999. He is also a
director of First
American Financial
Corporation, a financial
services company,
Fleetwood Enterprises,
Inc., a producer of
manufactured housing and
recreational vehicles,
and Remedy Temp., Inc., a
provider of temporary
staffing services.
Keith D. Koeller(3)............ 44 Class I 2004 Director since May 1995.
Since 1986, Mr. Koeller
has served as a Partner
of the law firm of Mower,
Koeller, Nebeker, Carlson
& Haluck.
Andrew H. Parnes............... 42 Class I 2004 Senior Vice President-
Senior Vice President-Finance, Finance of the Company
Chief Financial Officer and since January 2001 and
Treasurer Vice President-Finance
prior to this and since
January 1997. In
addition, Mr. Parnes has
served as Chief Financial
Officer of the Company
since July 1996 and as
its Treasurer since
January 1991. From
December 1989 until July
1996, Mr. Parnes served
as the Company's
Controller.
- --------
(1) Member of the Compensation Committee of the Board of Directors.
(2) Member of the Nominating Committee of the Board of Directors.
(3) Member of the Audit Committee of the Board of Directors.
3
Assuming the presence of a quorum, directors will be elected by a plurality
of the votes of the shares present and entitled to vote at the Annual Meeting.
Because directors are elected by plurality, abstentions and broker non-votes
will be entirely excluded from the vote and will have no effect on the
outcome. Unless instructed otherwise, the persons named on the accompanying
form of proxy will vote all proxies received by them in favor of election of
the three nominees named above. The Board of Directors of the Company does not
contemplate that any of its proposed nominees listed above 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.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION
OF EACH OF THE NOMINEES FOR CLASS I DIRECTOR.
Other Directors
The following table sets forth certain pertinent information with respect
to the other directors of the Company. The information as to each director has
been furnished by the director.
Period Served as Director or
Executive
Officer of the Company and
Other Business
Name and Present Position, Class of Term Experience During the Past
if any, with the Company Age Director Expires Five Years
-------------------------- --- -------- ------- ----------------------------
Stephen J. 52 Class II 2002 Director since May 1996 and
Scarborough(2)(4)......... Chief Executive Officer
Chief Executive Officer since January 2000. Mr.
and President Scarborough also serves as
President of the Company, a
position he has held since
October 1996. From January
1996 until October 1996, Mr.
Scarborough served as
Executive Vice President of
the Company. Prior to this
and since 1981, Mr.
Scarborough was President of
the Company's Orange County,
California homebuilding
division.
Douglas C. Jacobs(2)(3).... 60 Class II 2002 Director since May 1998.
Vice President of Finance
and Treasurer of the
Cleveland Browns, a
professional football team,
since February 1999.
Mr. Jacobs served as the
Executive Vice President of
Gucci Timepieces (America)
Inc. from December 1997 to
January 1999 and as
President of the Severin
Group (dba Gucci Timepieces)
from April 1996 to November
1997. Prior to April 1996,
Mr. Jacobs was a Partner of
the accounting firm of
Arthur Andersen LLP.
Larry McNabb(1)............ 52 Class II 2002 Director since May 1999.
President and Chief
Executive Officer of Vicor,
Inc., an e-business provider
of advanced accounts
receivable solutions, since
December 2000. From April
1998 until December 2000,
Mr. McNabb served as the
President of Vicor Financial
Services, a division of
Vicor, Inc. From August 1997
until December 2000, Mr.
McNabb also served as Chief
Executive Officer of Primary
Payment Systems, a payments
risk management company.
From August 1996 until March
1998, Mr. McNabb was an
independent consultant to
the financial industry.
Prior to this time, and for
a period of eleven years, he
served Bank of America in
various capacities,
including as Group Executive
Vice President in charge of
global payments from January
1995 to August 1996 and as
Chief Executive Officer of
Bank of America Texas from
October 1992 to January
1995.
4
Period Served as Director
or Executive
Officer of the Company and
Other Business
Name and Present Position, Class of Term Experience During the Past
if any, with the Company Age Director Expires Five Years
-------------------------- --- --------- ------- ---------------------------
Michael C. Cortney......... 53 Class III 2003 Director since May 2000 and
Executive Vice President Executive Vice President of
the Company since January
2000. Mr. Cortney served as
Senior Vice President of
the Company from January
1998 until December 1999.
Mr. Cortney also served as
President of the Company's
Northern California
homebuilding division from
1985 until August 2000. Mr.
Cortney joined the Company
in 1982.
Ronald R. Foell(3)(4)...... 72 Class III 2003 Director since 1967 and
President of the Company
from 1969 until October
1996.
Jeffrey V. Peterson(1)..... 55 Class III 2003 Director since May 2000.
Managing Director of Trust
Company of the West since
1992. From 1987 until 1992,
Mr. Peterson was Managing
Director of Investment
Banking for Kidder Peabody
& Co. Prior to this time,
Mr. Peterson was an
Associate Director at Bear,
Stearns & Co.
- --------
(1) Member of the Compensation Committee of the Board of Directors.
(2) Member of the Nominating Committee of the Board of Directors.
(3) Member of the Audit Committee of the Board of Directors.
(4) Member of the Executive Committee of the Board of Directors.
5
Proposal No. 2
AMENDED MANAGEMENT INCENTIVE BONUS PLAN
At the Annual Meeting, stockholders will be asked to approve the Company's
Amended and Restated Management Incentive Bonus Plan (the "Amended Bonus
Plan") in which certain of the Company's executive officers will be eligible
to participate. The Amended Bonus Plan is being submitted for stockholder
approval to ensure the continued deductibility to the Company of certain cash
compensation to be paid under the Plan with respect to the 2001 calendar year
and in subsequent years to the participating executive officers as more fully
described below. The Amended Bonus Plan has been approved by the Compensation
Committee of the Board of Directors.
Prior to the amendment and restatement of the bonus plan by the
Compensation Committee, payments under the plan were made to the Company's
Chairman, Arthur E. Svendsen, the Company's President and Chief Executive
Officer, Stephen J. Scarborough, and the Company's Executive Vice President,
Michael C. Cortney based upon a fixed participation level for each of the
participants. The Compensation Committee amended and restated the bonus plan
to provide the committee the flexibility to each year select the participants
in the plan, from among the eligible participants, and the participation
levels of each participant. The committee believes the Amended Bonus Plan will
enable it to adjust the participation for any given year to better reflect the
expected contribution to the Company's financial performance of each
participant in that year. Under the Amended Bonus Plan, persons appointed to
any of the following positions will each be eligible, at the discretion of the
Compensation Committee, to participate in the bonus plan: the Company's
Chairman, Chief Executive Officer, President or any Vice President. Under the
Amended Bonus Plan the aggregate payments made to the selected participants
for any fiscal year shall continue, as under the prior plan, to be no more
than 4% of the consolidated pretax operating results of the Company.
Application of Tax Rules to Officer Compensation
Under current tax legislation and Treasury regulations, including Section
162(m) of the Internal Revenue Code (the "Tax Rules"), compensation paid to
certain executive officers in excess of $1,000,000 in any fiscal year will not
be deductible to the Company for federal income tax purposes unless such
compensation qualifies as "performance-based compensation" (as defined in the
Tax Rules) or is otherwise exempt from such limits on deductibility. The
applicable conditions which must be satisfied in order to qualify for the
performance-based compensation exception include, among others, a requirement
that the stockholders of the Company approve the material terms of the
performance goals under which the compensation is to be paid prior to payment.
The Amended Bonus Plan effected by the Compensation Committee requires such
approval. Since 1978, the first year the bonus plan was used for the Chief
Executive Officer, there have been seven years in which one or more of the
participants was paid compensation in excess of $1,000,000 under the terms of
the bonus plan.
Description of the Plan
Any person appointed by the Board to the position of Chairman, Chief
Executive Officer, President or Vice President will be eligible, at the
discretion of the Compensation Committee, to participate in the Amended Bonus
Plan. No later than 90 days after the beginning of each fiscal year, the
Compensation Committee shall determine the participants for that year and the
participation levels for such participants. Once set, these parameters may not
then be changed for that fiscal year, except as permitted, if at all, by the
Treasury Regulations issued pursuant to Section 162(m) of the Code. The
participation level for each participant shall be the percentage of
consolidated pretax operating income of the Company that the Compensation
Committee shall determine shall be paid to such participant, which percentage
shall not exceed 4% for any individual participant, nor 4% for all
participants in the aggregate. The Compensation Committee is not required to
allocate the full 4% among the selected plan participants, and for 2001 the
aggregate allocation to plan participants will be 3.75% of pretax operating
income. Participation in the plan will be based on a participant's continued
service to the Company throughout the year in one or more of the eligible
positions. The termination of employment of any participant will not effect
the
6
eligibility or participation levels of the remaining participants. After the
annual audit of the Company's financial statements has been completed as of
the end of the year, each participant shall be entitled to receive from the
Company a cash bonus for services provided during the course of the
immediately preceding fiscal year in an amount equal to (1) their
participation level for that year multiplied by (2) the consolidated pretax
operating income of the Company as set forth in the Company's audited
financial statements. No bonus payments, or any portion thereof, under the
Amended Bonus Plan shall be paid to any executive officer who is not an
employee of the Company as of the last day of any calendar year. Furthermore,
the Amended Bonus Plan is not, nor is to be construed as, a guarantee of
employment for any set term or period of time.
The Compensation Committee retains the discretion to terminate eligibility
in the bonus plan for one or more of the specified executive officer positions
or to otherwise amend the bonus plan on a prospective basis at its discretion.
The Compensation Committee must certify in writing prior to payment that the
amount of any payment to an executive officer is the amount provided for under
the applicable annual formulas.
Comparison of Benefits under Prior and Amended Plan
The specific future benefits to be paid to eligible participants under the
Amended Bonus Plan are not determinable in advance because of their dependency
on future operating results of the Company and the participation and
participation levels for each eligible participant as determined by the
Compensation Committee. However, for fiscal 2001, subject to approval by the
stockholders of the Amended Bonus Plan, the Compensation Committee has
selected Stephen J. Scarborough, the Chief Executive Officer and President,
for participation at a level of 2.25% and Michael C. Cortney, the Executive
Vice President, for participation at a level of 1.5%. As a result of his
retirement, Mr. Svendsen will no longer participate in the plan. The following
chart compares the amount of cash bonuses paid to the Chairman, the Chief
Executive Officer and President, and the Executive Vice President for 2000,
prior to the amendment and restatement of the plan, with the cash bonuses that
would have been paid to the Chief Executive Officer and President and the
Executive Vice President of the Company for 2000 had the Amended Bonus Plan
been in place for that year, but using the participation and participation
levels as set by the Compensation Committee for 2001.
7
Standard Pacific Corp.
Management Incentive Bonus Plan
Pro Forma Plan Benefits
Prior Bonus Plan Amended Bonus Plan
Actual Payments for Pro Forma
2000 Payments for 2000
--------------------- ---------------------
Formula Formula
Name and Position Percentage Payments Percentage Payments
----------------- ---------- ---------- ---------- ----------
Arthur E. Svendsen
Chairman........................ 0.5% $ 830,736 0% --
Stephen J. Scarborough
Chief Executive Officer and
President...................... 2.25% $3,738,334 2.25% $3,747,321
Michael C. Cortney
Executive Vice President........ 1.25% $2,076,845 1.5% $2,498,214
---- ---------- ---- ----------
Participant Group (3 persons
actual, 2 persons pro forma)..... 4.0% $6,645,915 3.75% $6,245,535
==== ========== ==== ==========
Board Recommendation
The Board of Directors believes that the bonus plan has, over its many
years, promoted, and will continue to promote, the interests of the Company
and its stockholders and continue to enable the Company to attract, retain and
motivate persons important to the Company's success through the achievement of
improved financial performance. THE BOARD OF DIRECTORS (WITH MESSRS. SVENDSEN,
SCARBOROUGH AND CORTNEY ABSTAINING) RECOMMENDS THAT STOCKHOLDERS VOTE IN FAVOR
OF THE PROPOSAL TO APPROVE THE AMENDED BONUS PLAN WHICH WILL PRESERVE THE TAX
DEDUCTION TO THE COMPANY OF PAYMENTS MADE UNDER THE PLAN. Messrs. Svendsen,
Scarborough and Cortney are eligible participants in the Amended Bonus Plan,
and, in particular, Messrs. Scarborough and Cortney are eligible to receive
compensation thereunder for fiscal 2001. Accordingly, each of these three
directors has abstained from such recommendation. Proxies solicited by the
Board of Directors will be voted in favor of the Amended Bonus Plan unless
stockholders specify otherwise in the proxy. The affirmative vote of the
holders of a majority of the shares represented at the Annual Meeting and
entitled to vote on the proposal is necessary to approve the Amended Bonus
Plan. An abstention will have the same effect as a vote against the proposal.
Broker non-votes are not considered shares entitled to vote and therefore will
not affect the proposal's approval.
8
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of March 1, 2001
(except as noted otherwise) regarding ownership of the Company's shares of
common stock by (i) each nominee for director, (ii) each director and each
executive officer of the Company named in the Summary Compensation Table,
(iii) all directors and executive officers as a group, and (iv) the beneficial
owners of more than 5% of the Company's common stock based upon information
received from such persons:
Amount and Percent of
Nature of Outstanding
Name of Beneficial Owner Beneficial Ownership(1) Shares **
------------------------ ----------------------- -----------
Arthur E. Svendsen(2)..................... 2,800,000 9.3%
Stephen J. Scarborough(3)................. 542,000 1.8%
Michael C. Cortney(4)..................... 210,500 *
Andrew H. Parnes(5)....................... 121,260 *
Clay A. Halvorsen(6)...................... 70,000 *
Dr. James L. Doti(7)...................... 14,000 *
Ronald R. Foell(8)........................ 347,124 1.1%
Douglas C. Jacobs(9)...................... 9,000 *
Keith D. Koeller(10)...................... 6,000 *
Larry McNabb(11).......................... 9,000 *
Jeffrey V. Peterson....................... 0 *
Directors and Executive Officers As a
Group (12 persons)(12)................... 4,152,349 13.4%
Dimensional Fund Advisors Inc.(13)........ 2,295,472 7.6%
- --------
* Less than one percent
** Applicable percentage of ownership is based on 30,192,157 shares of the
Company's common stock outstanding on March 1, 2001.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. Unless otherwise noted, and subject
to applicable community property laws, each individual has sole voting
and investment power with respect to the shares indicated. Shares of
common stock subject to options currently exercisable or exercisable
within 60 days after March 1, 2001, are deemed outstanding for computing
the share amount and the percentage ownership of the person holding such
stock options, but are not deemed outstanding for computing the
percentage of any other person.
(2) Does not include 30,000 shares held beneficially and of record by Martha
Ann Svendsen, Mr. Svendsen's wife, and 25,000 shares held beneficially
and of record by trusts established for Mr. Svendsen's grandchildren. The
business address of Mr. Svendsen is 15326 Alton Parkway, Irvine,
California 92618-2338.
(3) Includes 473,000 shares subject to options held by Mr. Scarborough which
are exercisable within 60 days.
(4) Includes 133,000 shares subject to options held by Mr. Cortney which are
exercisable within 60 days.
(5) Includes 117,500 shares subject to options held by Mr. Parnes which are
exercisable within 60 days.
(6) Includes 70,000 shares subject to options held by Mr. Halvorsen which are
exercisable within 60 days.
(7) Includes 11,000 shares subject to options held by Dr. Doti which are
exercisable within 60 days.
(8) Includes 11,000 shares subject to options held by Mr. Foell which are
exercisable within 60 days.
(9) Includes 9,000 shares subject to options held by Mr. Jacobs which are
exercisable within 60 days.
(10) Includes 6,000 shares subject to options held by Mr. Koeller which are
exercisable within 60 days.
(11) Includes 7,000 shares subject to options held by Mr. McNabb which are
exercisable within 60 days.
(12) Includes 858,000 shares subject to options which are exercisable within
60 days.
(13) The shares are owned by various investment advisory clients of
Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor located at 1299 Ocean Avenue, 11th Floor, Santa Monica,
California 90401, which possesses voting and/or investment power over the
securities. Dimensional disclaims beneficial ownership of the shares.
This information is based on a Schedule 13G filed by Dimensional on
February 2, 2001.
9
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
Committees of the Board of Directors
During fiscal year 2000, the Board of Directors had standing Audit,
Compensation, Nominating and Executive Committees. The current membership of
each committee is as follows, with the chairman of the committee listed first.
Audit Committee Compensation Committee Nominating Committee Executive Committee
- --------------- ---------------------- -------------------- -------------------
Ronald R. Foell Dr. James L. Doti Stephen J. Scarborough Arthur E. Svendsen
Douglas C. Jacobs Larry McNabb Dr. James L. Doti Ronald R. Foell
Keith D. Koeller Jeffrey V. Petersen Douglas C. Jacobs Stephen J. Scarborough
Audit Committee: The Audit Committee represents the Board in discharging
its responsibilities relating to the accounting, reporting, and financial
practices of the Company and its subsidiaries, and has general responsibility
for overseeing the system of internal controls and accounting and audit
activities of the Company and its subsidiaries. The duties of the Audit
Committee include (1) reviewing and updating the written Audit Committee
charter on an annual basis, (2) reviewing prior to filing the Company's annual
financial statements and Annual Report on Form 10-K with management and the
Company's independent accountants, (3) reviewing with management and the
independent accountants the quarterly financial statements and Quarterly
Reports on Form 10-Q prior to filing, (4) recommending the selection of the
accountants and approving the fees to be paid to the accountants, (5)
reviewing the independence and effectiveness of the Company's independent
accountants, and their significant relationships with the Company, (6)
overseeing the integrity of the Company's financial reporting processes and
considering and approving changes to these processes, (7) establishing,
reviewing and updating a Code of Ethical Conduct and ensuring that management
has established a system to enforce this Code, (8) reviewing legal compliance
matters, and (9) performing any other actions that the Board of Directors
deems appropriate. The Audit Committee held five meetings during 2000.
Compensation Committee: The main functions of the Compensation Committee
are to review and recommend compensation levels of persons designated as
executive officers by the Board of Directors and to review and recommend stock
options and other related matters pertaining to the executive officers.
Additionally, the committee administers the Company's Management Incentive
Bonus Plan and stock incentive plans and, subject to the provisions of the
plans, selects the employees to receive awards and determines the terms and
conditions of such awards. The Compensation Committee held one meeting during
2000.
Nominating Committee: The main functions of the Nominating Committee are to
review and recommend candidates to fill vacancies on the Board of Directors,
to recommend the slate of directors to be nominated by the Board for election
by the stockholders at the annual meetings of stockholders and to review and
make recommendations to the Board on management succession relating to the
selection of the Chief Executive Officer and other executive officer
positions. The Nominating Committee will consider proposals for nomination
from stockholders that are made in writing to the Secretary, that are timely
and that contain sufficient background information concerning the nominee to
enable proper judgment to be made as to his or her qualifications. The
Nominating Committee held one meeting during 2000.
Executive Committee: The main functions of the Executive Committee are to
exercise, between meetings of the Board of Directors, all of the powers of the
Board, except those powers expressly reserved by applicable law to the Board,
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.
Board of Directors Meetings, Compensation and Attendance
During 2000, the Company's Board of Directors held five 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 served.
10
Non-management directors of the Company receive an annual fee of $20,000
payable in quarterly installments and receive $1,000 for each Board meeting
and annual stockholders meeting attended. In addition, each non-management
director who is a member of a committee of the Board of Directors receives
$1,000 for each committee meeting attended or $1,500 if he or she is the
chairman of a committee.
During 2000, each non-management director of the Company received a grant
of options to purchase 2,000 shares of common stock of the Company. Mr.
Peterson received a grant of options to purchase 5,000 shares of common stock
of the Company upon his selection to the Board in May 2000. Each option vests
one year after the date of grant and is exercisable at the fair market value
of the common stock on the date of grant.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee for the 2000 calendar year consisted
of the following members of the Board of Directors: Chairman, Dr. James L.
Doti; Larry McNabb; and Jeffrey V. Peterson. Dr. Doti, elected to the Board in
1995, is President of Chapman University and a professor of economics. Mr.
McNabb, elected to the Board in 1999, is the President and Chief Executive
Officer of Vicor, Inc. Mr. Peterson, elected to the Board in 2000, is a
Managing Director of Trust Company of the West.
11
EXECUTIVE COMPENSATION
The following table summarizes the total compensation of the Company's
named executive officers for 2000, as well as the total compensation paid to
each such individual for the two previous years (or such shorter period that
such individual served as an executive officer of the Company).
SUMMARY COMPENSATION TABLE
Long Term
Compensation
Annual Compensation(A) Awards
---------------------- ------------------
Securities All Other
Salary Bonus(B) Underlying Options Compensation(C)
Name and Principal Position Year ($) ($) (#) ($)
--------------------------- ---- ------- --------- ------------------ ---------------
Arthur E. Svendsen............ 2000 402,400 830,736 -- 5,200
Chairman of the Board(D) 1999 402,400 1,722,502 -- 5,200
1998 402,400 1,175,281 -- 5,200
Stephen J. Scarborough........ 2000 478,600 3,738,334 50,000 5,400
Chief Executive Officer 1999 403,600 2,851,582 75,000 5,500
and President(D) 1998 403,600 1,975,289 195,000 5,500
Michael C. Cortney............ 2000 331,000 2,076,845 40,000 5,400
Executive Vice President(E)
Andrew H. Parnes.............. 2000 259,200 450,000 15,000 5,400
Senior Vice President-Finance, 1999 239,200 300,000 30,000 5,500
Treasurer and Chief Financial 1998 204,200 210,000 72,000 5,500
Officer
Clay A. Halvorsen............. 2000 249,200 245,000 15,000 5,400
Senior Vice President, 1999 229,200 150,000 30,000 5,500
General Counsel and Secretary 1998 204,200 100,000 70,000 5,500
- --------
(A) The amount of perquisites and other personal benefits received by each of
the named executive officers for the years indicated did not exceed the
lesser of $50,000 or 10 percent of the individual's total of annual salary
and bonus for the year, which represents the threshold reporting
requirement.
(B) Bonuses represent amounts earned for each year but paid in the subsequent
year.
(C) Includes the Company contributions to the Company's 401(k) retirement plan
which amounted to $5,000 per year. The balance of this amount, after
deducting the Company's 401(k) contributions, represents premiums on life
insurance coverage paid by the Company.
(D) Effective January 1, 2000, Mr. Svendsen resigned from his position as
Chief Executive Officer and was succeeded by Mr. Scarborough as Chief
Executive Officer.
(E) Mr. Cortney became an executive officer of the Company in January 2000.
12
The following table summarizes option grants to the Company's named
executive officers for fiscal year 2000 and the potential realizable value at
certain assumed rates of stock price appreciation for the option term:
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
--------------------------------------------
Number of Potential Realizable Value
Securities % of Total at Assumed Annual Rate
Underlying Options Exercise of Stock Price Appreciation
Options Granted to or Base for Option Term(D)
Granted Employees in Price Expiration ---------------------------
Name (#)(A)(B) Fiscal Year ($/Sh)(C) Date 5%($) 10%($)
---- ---------- ------------ --------- ---------- ---------------------------
Arthur E. Svendsen...... -- -- -- -- -- --
Stephen J. Scarborough.. 50,000 9.0% 23.375 2010 735,021 1,862,687
Michael C. Cortney...... 40,000 7.2% 23.375 2010 558,016 1,490,149
Andrew H. Parnes........ 15,000 2.7% 23.375 2010 220,506 558,806
Clay A. Halvorsen....... 15,000 2.7% 23.375 2010 220,506 558,806
- --------
(A) All options vest and become exercisable in increments of 33 1/3% per year
beginning December 13, 2001.
(B) All options were granted for a term of 10 years, subject to earlier
termination in certain events related to termination of employment. All of
the options were granted under the Company's 1997 Stock Incentive Plan,
except for 27,600 options granted to Mr. Scarborough under the 2000 Stock
Incentive Plan and 11,750 options granted to Mr. Halvorsen under the 1991
Employee Stock Incentive Plan. Under the terms of the plans, the
compensation committee retains discretion, subject to plan limits, to
modify certain of the terms of outstanding options, except that the
committee may not re-price options granted under the 2000 Stock Incentive
Plan.
(C) The options were granted at the closing market price for the Company's
common stock on the date of grant. The exercise price may be paid by
delivery of already owned shares or, with the consent of the Company, by
offset of the underlying shares.
(D) Potential gains are net of the option exercise price, but before taxes
associated with exercise.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTIONS OUTSTANDING
The following table shows option exercises during 2000 and the number of
unexercised options previously granted to the named executive officers which
were exercisable and unexercisable at December 31, 2000.
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options at
December 31, 2000(#) December 31, 2000($)(1)
Shares Acquired Value ------------------------- -------------------------
Name on Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- --------------- ----------- ----------- ------------- ----------- -------------
Arthur E. Svendsen...... -- -- -- -- -- --
Stephen J. Scarborough.. -- -- 473,000 245,000 6,325,063 2,676,250
Michael C. Cortney...... -- -- 133,000 100,000 1,567,750 682,500
Andrew H. Parnes........ 7,240 87,333 117,500 52,500 1,380,938 426,563
Clay A. Halvorsen....... -- -- 60,001 54,999 603,131 404,994
- --------
(1) At December 29, 2000, the last trading day of December 2000, the closing
price of the Company's common stock was $23.38.
13
Employment Agreements
None of the current named executive officers of the Company is a party to
an employment contract. The officers of the Company are elected annually and
serve at the discretion of the Board of Directors.
Change in Control Agreements
Each of the named executive officers other than Mr. Svendsen is party to an
agreement with the Company providing for payment of severance benefits to the
employee in the event of termination of his employment in connection with a
change of control of the Company. The severance benefits are payable if the
Company terminates the employment of the employee without cause or the
employee voluntarily terminates his employment for good reason (generally
consisting of adverse changes in responsibilities, compensation, benefits or
location of work place) within two years after a change of control or prior to
and in connection with, or in anticipation of, such a change.
The severance benefits generally consist of (i) a lump sum payment equal to
two times the employee's annual base salary and two times his or her average
annual bonus and incentive compensation determined over the three prior years;
(ii) acceleration of the date when outstanding stock options become
exercisable; and (iii) 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. As Chief Executive Officer,
Mr. Scarborough's agreement provides for payments equal to three times his
base salary and average annual bonus, and the continuation of benefits for
three years. The benefits will be increased to the extent the employee has to
pay taxes associated with "excess parachute payments" under the Internal
Revenue Code, such that the net amount received by the employee is equal to
the total payments he or she would have received had the tax not been
incurred.
CERTAIN TRANSACTIONS
In 2000, Andrew H. Parnes, the Company's Senior Vice President-Finance,
Chief Financial Officer and Treasurer purchased a new home from the Company
and Michael C. Cortney, the Company's Executive Vice President, entered into a
sales contract to purchase a new home from the Company. In each transaction,
the purchase price for the home was the market price that would be paid by
unaffiliated persons. In connection with the purchases, each executive officer
purchased generally available upgrades at the Company's cost, pursuant to a
program available to all employees of the Company.
Mr. Koeller is a partner with the law firm of Mower, Koeller, Nebeker,
Carlson & Haluck. The Company retained the law firm of Mower, Koeller,
Nebeker, Carlson & Haluck to provide legal services to the Company during
2000, and anticipates that it will continue to retain the law firm to provide
legal services in 2001 as well.
14
The following reports of the Compensation Committee and Audit Committee and
the performance graph that appears immediately after such reports shall not be
deemed to be soliciting material or to be filed with the Securities and
Exchange Commission under the Securities Act of 1933 or the Securities
Exchange Act of 1934 or incorporated by reference in any document so filed.
REPORT OF THE COMPENSATION COMMITTEE
To: The Board of Directors
As members of the Compensation Committee we are responsible for reviewing
and recommending compensation levels of persons designated as executive
officers by the Board of Directors and reviewing and recommending stock option
grants and other related compensation matters pertaining to the executive
officers.
Overall Executive Compensation Philosophy
The compensation philosophy of the Company, which is endorsed by the
Compensation Committee, is that a substantial portion of the annual
compensation of each executive officer should be based upon the performance of
the Company and a subjective evaluation of the contribution to that
performance made by each executive officer. The performance related component
of the compensation of the Chairman of the Board, Chief Executive Officer and
President, and Executive Vice President, Messrs. Svendsen, Scarborough and
Cortney, respectively, during the 2000 calendar year, was contingent upon the
pre-tax operating results of the Company pursuant to the Company's Management
Incentive Bonus Plan (the "Bonus Plan").
The Compensation Committee further believes executive compensation should
attract and retain key employees and provide incentives to assist the Company
in achieving strategic and financial goals which should ultimately enhance the
value of the Company's stock.
In that regard, executive compensation consists of three components: (1)
base salary, (2) annual bonus based on the consolidated pre-tax results of
operations of the Company, and (3) longer-term incentives through the award of
stock options under the Company's stock option plans.
In general, when compared to other publicly-held companies in the
homebuilding industry, the Compensation Committee believes that executives
should receive a base salary that is generally competitive with those paid by
publicly-held companies with consideration given to the executives'
experience, duties and responsibilities. The Compensation Committee believes
the contingent portion of the executives' compensation in the form of the
annual bonus based on the Company's consolidated operations for the year is an
important component of compensation for the Chairman of the Board, Chief
Executive Officer and President, and Executive Vice President.
To the extent readily determinable, and as one of the factors in its
consideration of compensation matters, the Compensation Committee considers
the anticipated tax treatment to the Company and to the executives of various
payments and benefits. Some types of compensation payments and their
deductibility (e.g. the difference between the option exercise price and
market price of the Company's stock on the date of exercise of non-qualified
options) depend upon the timing of an executive's vesting or exercise of
previously granted rights. Further, interpretations of and changes in the tax
laws and other factors beyond the Compensation Committee's control also affect
the deductibility of compensation. For these and other reasons, the
Compensation Committee will not necessarily limit executive compensation to
that deductible under Section 162(m) of the Internal Revenue Code. For 2000,
the salaries and bonuses paid to the executive officers were fully deductible
by the Company. The Compensation Committee will consider various alternatives
to preserve the deductibility of compensation payments and benefits to the
extent reasonably practicable and to the extent consistent with its other
compensation objectives.
15
The Company and the Compensation Committee currently do not endorse
employment contracts and, therefore, none of the current executive officers of
the Company is a party to an employment contract.
Annual Salary and Incentive Compensation Program
In reviewing the incentive compensation levels of the Chief Executive
Officer and the Company's four other named executive officers during 2000, the
Compensation Committee has taken note of management's ability to achieve
certain strategic goals, identify and acquire parcels of land in key markets,
develop and design homes which respond to current market conditions, augment
and extend the maturity of the Company's bank credit facility, raise capital
from the public securities markets, and give overall management and strategic
direction to the Company's operations, all of which contribute to the
Company's prospects for the future.
In consideration of the Compensation Committee's policy of providing a
significant portion of executive officers' total compensation, when measured
over a longer term basis spanning a business cycle, through annual bonuses to
provide them with incentives to achieve the Company's financial and
operational goals and thereby increase stockholder value, the Compensation
Committee recommended and the Board of Directors approved the following base
salaries and bonuses for the named executive officers.
Chairman of the Board, Chief Executive Officer and President, and Executive
Vice President
Base Salary
Messrs. Svendsen, Scarborough and Cortney earned base salaries of $400,000,
$475,000 and $325,000, respectively, for 2000. Based on the Committee's
subjective evaluation of the executives' duties, responsibilities and
performance, Mr. Svendsen's base salary for 2001 was set at $400,000, Mr.
Scarborough's base salary for 2001 was set at $600,000 and Mr. Cortney's base
salary for 2001 was set at $420,000.
Bonus Plan
Under the Company's bonus formula for Mr. Svendsen set forth in the Bonus
Plan as in effect for 2000, Mr. Svendsen received a bonus equal to 0.5% of the
consolidated pre-tax operating results of the Company as a whole. Under this
formula, Mr. Svendsen was awarded a bonus of $830,736 for 2000. Under the
Bonus Plan, there is no maximum bonus which may be earned by any of the
executives covered by the Plan.
Under the Company's bonus formula for Mr. Scarborough set forth in the
Bonus Plan as in effect for 2000, Mr. Scarborough received a bonus equal to
2.25% of the consolidated pre-tax operating results of the Company as a whole.
Pursuant to the formula, Mr. Scarborough earned a bonus of $3,738,334 for
2000.
Under the Company's bonus formula for Mr. Cortney set forth in the Bonus
Plan as in effect for 2000, Mr. Cortney received a bonus equal to 1.25% of the
consolidated pre-tax operating results of the Company as a whole. Pursuant to
the formula, Mr. Cortney earned a bonus of $2,076,845 for 2000.
Other Named Executives
The salaries of Mr. Parnes and Mr. Halvorsen for 2001 were set at $315,000
and $270,000, respectively. The Compensation Committee prefers to award a
discretionary bonus to these executives, and as a result they do not
participate in the Bonus Plan. Mr. Parnes and Mr. Halvorsen received
discretionary bonuses of $450,000 and $245,000, respectively, for 2000.
16
Stock Option Plans
The Company does not offer a long-term cash incentive plan. To reward
executives on a long-term basis, stock options have been granted to provide an
important part of the equity link to stockholders. Options are granted at the
market value of the Company's stock on the date of grant and only have value
if the Company's stock price rises.
Mr. Svendsen has never been granted options under any of the Company's
stock option plans. In December, 2000, Messrs. Scarborough, Cortney, Parnes
and Halvorsen were granted options to purchase 50,000, 40,000, 15,000 and
15,000 shares of common stock, respectively. All of the foregoing option
grants were made at exercise prices equal to the common stock's closing price
on the date of the grant.
COMPENSATION COMMITTEE
James L. Doti
Larry McNabb
Jeffrey V. Peterson
December 13, 2000
17
REPORT OF THE AUDIT COMMITTEE
To: The Board of Directors
As members of the Audit Committee for the 2000 calendar year, we are
responsible for representing the Board of Directors in discharging its
responsibilities relating to the accounting, reporting, and financial
practices of the Company and its subsidiaries, and have general responsibility
for overseeing the system of internal controls and accounting and audit
activities of the Company and its subsidiaries. The Board of Directors has
determined that each member of the Audit Committee is an independent director
as defined under the rules of the New York Stock Exchange. The Board of
Directors adopted on May 18, 2000 the written Audit Committee Charter attached
to this proxy statement as Appendix A.
The Audit Committee has reviewed and discussed with management and the
independent auditors the annual audited financial statements of the Company
and Annual Report on Form 10-K and the quarterly financial statements and
Quarterly Reports on Form 10-Q. Management has the primary responsibility for
the financial statements and the reporting process of the Company. Arthur
Andersen LLP, the Company's independent auditors, are responsible for
expressing an opinion on the conformity of the Company's audited financial
statements to generally accepted accounting principles.
The Audit Committee has discussed with Arthur Andersen the matters required
to be discussed by Statements on Auditing Standards No. 61 (Communication with
Audit Committees). In addition, Arthur Andersen has provided to the Audit
Committee the written disclosures and the letter required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit
Committees) and the committee discussed with Arthur Andersen their
independence from the Company and its management. The Audit Committee also
considered whether Arthur Andersen's provision of non-audit services to the
Company is compatible with Arthur Andersen's independence.
Based on the review and discussions referred to above, the Audit Committee
recommended to the Board of Directors, and the Executive Committee of the
Board of Directors approved, that the audited financial statements be included
in the Company's Annual Report on Form 10-K for the year ended December 31,
2000, for filing with the Securities and Exchange Commission.
March 20, 2001
AUDIT COMMITTEE
Ronald R. Foell
Douglas C. Jacobs
Keith D. Koeller
18
COMPANY PERFORMANCE
The following graph shows a five-year comparison of cumulative total returns
to stockholders for the Company, with the Standard & Poor's 500 Composite Stock
Index and the Dow Jones Industry Group--Home Construction Index. The graph
assumes reinvestment of all dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL STOCKHOLDERS' RETURN
AMONG STANDARD PACIFIC CORP., THE STANDARD & POOR'S 500 COMPOSITE STOCK INDEX
AND THE DOW JONES INDUSTRY GROUP-HOME CONSTRUCTION INDEX
Standard
Measurement Period Pacific S&P
(Fiscal Year Covered) Corporation 500 Index Peer Group
- ------------------- ----------- ---------- ----------
Measurement Pt-1995 $100 $100 $100
FYE 1996 $ 97 $123 $100
FYE 1997 $255 $164 $144
FYE 1998 $233 $211 $156
FYE 1999 $184 $255 $105
FYE 2000 $402 $232 $164
The above graph is based upon common stock and index prices calculated as of
year end for each of the last five calendar years. The Company's December 29,
2000 common stock closing price was $23.38 per share. On March 20, 2001, the
Company's common stock closed at $22.06 per share. The stock price performance
of the Company's common stock depicted in the graph above represents past
performance only and is not necessarily indicative of future performance.
19
INFORMATION CONCERNING AUDITORS
Arthur Andersen LLP, Independent Public Accountants, have been the auditors
for the financial statements of the Company for each year since the year ended
December 31, 1968. As in prior years, a meeting of the Audit Committee will be
held during the year, at which time a recommendation will be made as to the
selection of the Company's auditors for the current fiscal year.
Representatives of Arthur Andersen will be present at the 2001 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.
In addition to retaining Arthur Andersen to audit the consolidated
financial statements for 2000, the Company and its subsidiaries retained
Arthur Andersen to provide various consulting services in 2000. The aggregate
fees billed for professional services by Arthur Andersen in 2000 for these
various services were:
Audit fees: Fees of $168,000 were billed for professional services rendered
to the Company and its subsidiaries for the audit of the Company's financial
statements for fiscal 2000 and review of the financial statements included in
the Company's Forms 10-Q for fiscal 2000.
Financial information systems design and implementation fees: No services
were rendered by Arthur Andersen in connection with financial information
systems design and implementation, and as a result no fees were billed with
respect to such matters.
All other fees: Fees of $236,790 were billed for other services, including
tax services, services related to mergers and acquisitions, and services
related to public securities offerings.
The Audit Committee considered the provision of the services listed above
by Arthur Andersen and determined that the provision of such services was
compatible with maintaining the independence of Arthur Andersen.
STOCKHOLDER PROPOSALS FOR THE 2002 ANNUAL MEETING OF STOCKHOLDERS
Any eligible stockholder of the Company wishing to have a proposal
considered for inclusion in the Company's 2002 proxy solicitation materials
must set forth such proposal in writing and file it with the Secretary of the
Company on or before November 30, 2001. The Board of Directors of the Company
will review new proposals from eligible stockholders which it receives by that
date and will determine whether such proposals will be included in its 2002
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 securities entitled to be voted
at the 2002 Annual Meeting 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.
According to the Bylaws of the Company, in order for a stockholder proposal
to be properly brought before any meeting of the stockholders, the stockholder
must give notice of the proposal in writing to the Secretary of the Company
not less than ninety days in advance of the meeting or, if later, the seventh
day following the first public announcement of the date of the meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
To the Company's knowledge, all of the reports required under Section 16(a)
of the Securities Exchange Act of 1934, during or with respect to the fiscal
year ended December 31, 2000, were filed on a timely basis, except as follows:
a Form 4 reporting the exercise of 5,000 stock options and the sale of the
shares received upon the exercise thereof by Keith D. Koeller on November 7,
2000; and an amended Form 3 filed by Jari L. Kartozian on January 10, 2001
correcting a Form 3 filed on January 25, 2000.
20
FORM 10-K ANNUAL REPORT
Along with this proxy statement, the Company has provided each stockholder
entitled to vote, a copy of its Annual Report to Stockholders and Annual
Report on Form 10-K for the year ended December 31, 2000 (the "2000 Form 10-
K") without the exhibits thereto. The Company will provide, without charge, a
copy of its 2000 Form 10-K, or a copy of the exhibits to its 2000 Form 10-K,
upon the written or oral request of any stockholder or beneficial owner of
common stock. Requests should be directed to the following address:
Clay A. Halvorsen
Secretary
Standard Pacific Corp.
15326 Alton Parkway
Irvine, California 92618-2338
(949) 789-1600
OTHER MATTERS
At the time of the preparation of this proxy statement, the Board of
Directors of the Company was not aware of any other matters which 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
Clay A. Halvorsen
Secretary
Irvine, California
March 30, 2001
21
Appendix A
Adopted May 18, 2000
STANDARD PACIFIC CORP.
CHARTER OF AUDIT COMMITTEE
This charter sets forth the authority and responsibility of the Audit
Committee of the Board of the Directors of Standard Pacific Corp. (the
"Company").
I. PURPOSE AND AUTHORITY
The primary purpose of the Audit Committee is to assist the Board of Directors
in fulfilling its responsibilities to the shareholders of the Company by:
. Overseeing that management has maintained the reliability and integrity
of the accounting policies and financial reporting and disclosure
practices of the Company;
. Overseeing that management has established and maintained processes to
assure that an adequate system of internal control is functioning within
the Company; and
. Overseeing that management has established and maintained processes to
assure compliance by the Company with all applicable laws, regulations
and Company policy.
The Audit Committee will primarily fulfill these responsibilities by carrying
out the activities listed below in Section V of this Charter. Subject to any
restrictions or limitations on the delegation of power and authority imposed
by the provisions of the Delaware General Corporation Law and the Company's
Certificate of Incorporation and Bylaws, the Audit Committee shall have and
may exercise all the powers and authority of the Board of Directors reasonably
necessary or advisable for the Committee to effectuate its purpose and perform
its responsibilities as set forth in this Section I and Section V of this
Charter.
II. COMPOSITION
The Audit Committee will be appointed annually to serve at the pleasure of the
Board of Directors and will be comprised of not less than three Directors. The
Board of Directors shall designate one member of the Committee to be Chair.
Vacancies in the Audit Committee may be filled at any meeting of the Board of
Directors.
Each member of the Audit Committee shall be independent and free from any
relationship that, in the opinion of the Board, would interfere with the
exercise of independent judgment as a member of the Committee. All members of
the Committee shall have a working familiarity with basic finance and
accounting practices, and at least one member of the Committee shall have
accounting or related financial management expertise. Committee members may
enhance their familiarity with finance and accounting by participating in
educational programs conducted by the Company or outside services.
III. MEETINGS
The Audit Committee shall meet at least four times annually, or more
frequently as circumstances dictate. Regular meetings of the Audit Committee
may be held without call or notice at such times and places as the Audit
Committee from time to time may fix. Special meetings of the Audit Committee
may be called by the Chairman of the Audit Committee or by the Secretary of
the Company when requested to do so by any two members of the Audit Committee
or by the Company's independent accountants. Notice shall be given in the same
manner as notice of special meetings of the Board of Directors.
Any action required or permitted to be taken at any meeting of the Audit
Committee may be taken without a meeting if consent in writing is given
thereto by all members of the Audit Committee and such consent is filed with
the minutes.
A-1
Minutes of the meetings of the Audit Committee will be prepared promptly by
the Secretary of the Company or a delegate. The Secretary shall cause to be
kept in the minute books of the Company the minutes of the meetings of the
Audit Committee. These minutes shall be presented to the members of the Board
of Directors from time to time for their information.
IV. QUORUM
A majority of the members of the Audit Committee, but no fewer than two
persons, shall constitute a quorum for the transaction of business at any
meeting of the Audit Committee. Any action of the Audit Committee to be
effective must be authorized by the affirmative vote of a majority of the
members thereof present and in any event shall require not less than two
affirmative votes.
V. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties the Audit Committee shall:
Meet and Review Documents/Reports
1. Review and update this Charter periodically, and not less than annually,
as conditions warrant.
2. Review with financial management and the independent accountants the
Company's annual financial statements and Annual Report on Form 10-K prior
to its filing, including any certification, report, opinion or review
rendered by the independent accountants with respect thereto.
3. Review with financial management and the independent accountants each
Quarterly Report on Form 10-Q of the Company prior to its filing. This
review may be performed by the Chair or any other member of the Audit
Committee to whom this responsibility has been delegated by the Chair or
the Committee.
4. Report through the Chair to the Board of Directors following meetings of
the Audit Committee.
Independent Accountants
5. Recommend to the Board of Directors the selection of the independent
accountants, considering independence and effectiveness, and approve the
fees and other compensation to be paid to the independent accountants.
6. On an annual basis, the Committee shall review and discuss with the
accountants all significant relationships the accountants have with the
Company to determine the accountants' independence.
7. Review the performance of the independent accountants and recommend to the
Board any discharge of the independent accountants when circumstances
warrant. The independent accountants shall be ultimately accountable to
the Audit Committee and the Board of Directors.
Financial Reporting Processes
8. In consultation with the independent accountants, review the integrity of
the Company's financial reporting processes, both internal and external.
9. Periodically consult with the independent accountants out of the presence
of management about internal controls and the fullness and accuracy of the
Company's financial statements.
10. Consider the independent accountants' judgments about the quality and
appropriateness of the Company's accounting principles as applied to
financial reporting.
11. Consider and approve, if appropriate, major changes to the Company's
internal auditing and accounting principles and practices as suggested by
the independent accountants or management.
A-2
12. Establish regular and separate systems of reporting to the Audit Committee
by management and the independent accountants regarding any significant
judgments made in management's preparation of the financial statements and
the view of each as to the appropriateness of such judgments.
13. Following completion of the annual audit, review separately with
management and the independent accountants any significant difficulties
encountered during the course of the audit, including any restrictions on
the scope of work or access to required information.
14. Review any significant disagreement among management and the independent
accountants in connection with the preparation of the financial
statements.
15. Review with the independent accountants and management the extent to which
changes or improvements in financial or accounting practices, as approved
by the Audit Committee, have been implemented.
Ethical and Legal Compliance
16. Establish, review and update periodically a Code of Ethical Conduct and
ensure that management has established a system to enforce this Code.
17. Review with the Company's counsel, legal compliance matters including
securities laws compliance.
18. Review with the Company's counsel, any legal matter that could have a
significant impact on the Company's financial statements.
General
19. Perform any other activities consistent with this Charter, the Company's
Certificate of Incorporation and Bylaws, and governing law as the
Committee or the Board of Directors deems necessary or appropriate.
A-3
The Annual Meeting of Stockholders of
Standard Pacific Corp.
will be held at the
Four Seasons Hotel
690 Newport Center Drive
Newport Beach, California 92660
on
May 16 2001
at 11:00 A.M., Local Time
DIRECTIONS:
FROM LOS ANGELES: Take the 405 Freeway South to Jamboree Road and turn right.
Proceed to San Joaquin Hills Road and turn left. Turn right onto Santa Cruz
Drive. Turn left immediately into the hotel.
FROM SAN DIEGO: Take the 5 Freeway North until the 405 Freeway junction. Take
the 405 Freeway North to Jamboree Road and turn left. Proceed to San Joaquin
Hills Road and turn left. Turn right onto Santa Cruz Drive. Turn left
immediately into the hotel.
FROM JOHN WAYNE AIRPORT: Follow the airport signs to MacArthur Boulevard and
turn right. Proceed to Jamboree Road and turn right. Turn left onto San
Joaquin Hills Road. Turn right onto Santa Cruz Drive. Turn left immediately
into the hotel.
[MAP APPEARS HERE]
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PROXY
STANDARD PACIFIC CORP.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE COMPANY FOR THE ANNUAL MEETING MAY 16, 2001
The undersigned, a stockholder of STANDARD PACIFIC CORP., a Delaware corporation
(the "Company"), acknowledges receipt of a copy of the Notice of Annual Meeting
of Stockholders, the accompanying Proxy Statement, the Annual Report to
Stockholders and the Company's Annual Report on Form 10-K for the year ended
December 31, 2000; and, revoking any proxy previously given, hereby constitutes
and appoints Stephen J. Scarborough, Andrew H. Parnes and Clay A. Halvorsen, and
each of them, his, her or its true and lawful agents and proxies with full power
of substitution in each, to vote the shares of Common Stock of the Company
standing in the name of the undersigned at the Annual Meeting of Stockholders of
the Company to be held at the Four Seasons Hotel, 690 Newport Center Drive,
Newport Beach, California, on Wednesday, May 16, 2001, at 11:00 A.M., local
time, and at any adjournment thereof, on all matters coming before such meeting
as set forth on the reverse hereof.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE
OR
VOTE BY INTERNET OR TELEPHONE.
-----------
SEE REVERSE
SIDE
-----------
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v FOLD AND DETACH HERE v
The Annual Meeting of Stockholders of
Standard Pacific Corp.
Will be held at:
Four Seasons Hotel
690 Newport Center Drive
Newport Beach, California 92660
May 16, 2001
11:00 A.M., Local Time
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- --------------------------------------------------------------------------------
[X] Please mark your
votes as in this
example.
-----------------------------------------------------------------------
Unless otherwise specified, this proxy will be voted FOR the
election of each nominee for director and FOR each other
proposal of the Company listed below.
-----------------------------------------------------------------------
FOR all Nominees listed WITHHOLD authority
(except as marked to the to vote for all
contrary below) nominees Nominees:
01. Dr. James L.
Doti
1. Election 02. Keith D.
of Three [_] [_] Koeller
Directors. 03. Andrew H.
Parnes
To withhold authority to vote for any nominee(s), write the name(s) of
such nominee(s) in the space provided below.
____________________________________________
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FOR AGAINST WITHHOLD
2. Approval of the Company's Amended
and Restated Management [_] [_] [_]
Incentive Bonus Plan.
3. In their discretion, to transact
such other business as may properly
come before the meeting.
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Please check this box if you plan to attend the Annual Meeting. [_]
This proxy must be signed exactly as the stockholder name appears hereon.
Executors, administrators, trustees, etc. should give their full title,
as such. If the stockholder is a corporation, a duly authorized officer
should sign on behalf of the corporation and should indicate his or her
title.
_________________________________________________________________________
_________________________________________________________________________
SIGNATURE(S) DATE
- --------------------------------------------------------------------------------
v FOLD AND DETACH HERE v
[LOGO OF STANDARD PACIFIC]
PROXY VOTING INSTRUCTION CARD
Dear Stockholder:
Your vote is important. Please consider the issues discussed in the proxy
statement and cast your vote by:
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Completing, dating, signing and mailing the proxy card in the postage
paid envelope included with the proxy statement.
- --------------------------------------------------------------------------------
If the envelope is missing send the proxy card to Standard Pacific Corp.,
c/o First Chicago Trust, a division of EquiServe, P.O. Box 8626, Edison,
New Jersey 08818-9133.
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Calling toll-free 1-877-779-8683 from the U.S. or Canada (outside U.S. or
Canada, call 1-201-536-8073) on a touch tone telephone.
- --------------------------------------------------------------------------------
You will hear these instructions.
> Enter the last four digits from your social security number.
> Enter the control number from the box above, just below the
perforation.
> You will then have two options:
OPTION 1: To vote as the Board of Directors recommends on all
proposals; or
OPTION 2: To vote on each proposal separately.
> Your vote will be repeated to you and you will be asked to
confirm it.
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Logging on to the Internet and typing: http://www.eproxyvote.com/spf
- --------------------------------------------------------------------------------
> Have your proxy card ready and follow the instructions.
Your telephone or Internet vote authorizes the proxies named on the reverse of
this card to vote your shares to the same extent as if you marked, signed,
dated and returned the proxy card. If you choose to vote your shares by
telephone or Internet, there is no need to mail back your proxy card. You can
submit your proxy by telephone or Internet anytime before the Annual Meeting on
May 16, 2001 at 11:00 a.m. California time. You will need the voter Control
Number printed above to vote by telephone or Internet. You should indicate if
you plan to attend the meeting in the box provided if you submit by mail or when
prompted if you use the telephone or Internet method.
If you receive more than one set of proxy materials from the Company, please act
promptly on each set you receive because each represents separate shares. If you
return multiple cards by mail, you may use the same return envelope. If you use
the Internet or telephone to grant a proxy, each card will have a separate voter
control number and must be voted separately.
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