<PAGE>
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:
[_] Confidential, for Use of the
[_] Preliminary Proxy Statement Commission Only (as Permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-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:
Notes:
<PAGE>
STANDARD PACIFIC CORP.
15326 Alton Parkway
Irvine, California 92618-2338
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 18, 2000
The 2000 Annual Meeting of Stockholders of Standard Pacific Corp. (the
"Company") will be held at the Wyndham Garden Hotel, 3350 Avenue of the Arts,
Costa Mesa, California 92626, on May 18, 2000 at 10:30 A.M., local time, for
the following purposes:
(1) To elect three directors constituting Class III 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;
(3) To consider the approval of the Company's 2000 Stock Incentive Plan;
and
(4) To transact such other business as may properly come before the meeting
and any postponement or adjournment thereof.
The close of business on March 23, 2000 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 31, 2000
<PAGE>
PROXY STATEMENT
STANDARD PACIFIC CORP.
15326 Alton Parkway
Irvine, California 92618-2338
ANNUAL MEETING OF STOCKHOLDERS
MAY 18, 2000
GENERAL INFORMATION
This proxy statement is being mailed on or about March 31, 2000 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
Thursday, May 18, 2000, at the Wyndham Garden Hotel, located at 3350 Avenue of
the Arts, Costa Mesa, California 92626, at 10:30 A.M., local time, and at any
and all postponements and adjournments thereof.
The entire cost of 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 $7,500 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 23, 2000 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 III
directors of the Company designated hereinafter as nominees (see "Election of
Directors" at page 3 of this proxy statement); (ii) for approval of the
Company's Amended Management Incentive Bonus Plan (see "Amended Management
Incentive Bonus Plan" at page 5 of this proxy statement), and (iii) for
approval of the Company's 2000 Stock Incentive Plan (see "2000 Stock Incentive
Plan" at page 8 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, 2000, the Company had outstanding a total of 28,969,580
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.
<PAGE>
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. 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
<PAGE>
Proposal No. 1
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes, each of the classes
having three directors (subject to vacancies) and only one class being elected
each year. In 2000, three directors are to be elected for a term of three
years or until the election and qualification of their respective successors.
The Board of Directors has nominated the following persons for election as
directors: Ronald R. Foell, Michael C. Cortney and Jeffrey V. Peterson. Mr.
Foell has been a director since 1967 and was President of the Company from
1969 until October 1996. Neither Mr. Cortney nor Mr. Peterson currently serves
on the Board of Directors.
The information set forth below as to each nominee has been furnished by the
nominee:
<TABLE>
<CAPTION>
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
-------------------------- --- --------- ------- ----------------------------
<C> <C> <C> <C> <S>
Ronald R. Foell(1)........ 71 Class III 2003 Director since 1967 and
President of the Company
from 1969 until October
1996.
Michael C. Cortney........ 52 Class III 2003 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 serves as
President of the Company's
Northern California
homebuilding division, a
position he has held since
1985. Mr. Cortney joined
the Company in 1982.
Jeffrey V. Peterson....... 54 Class III 2003 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 Audit Committee of the Board of Directors.
Directors will be elected by a plurality of the votes of the shares present
and entitled to vote at the Annual Meeting (assuming the presence of a
quorum). 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 following table sets forth certain pertinent information with respect to
the other directors of the Company.
<CAPTION>
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
-------------------------- --- --------- ------- ----------------------------
<C> <C> <C> <C> <S>
Arthur E. Svendsen(3)..... 76 Class I 2001 Director and Chairman of the
Board of the Company
Chairman of the Board since 1961. Mr. Svendsen
served as Chief Executive
Officer of the Company from
1961 until December 1999.
Dr. James L. Doti(2) (3).. 53 Class I 2001 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. 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.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Period Served as Director or
Executive
Officer of the Company and Other
Name and Present Business
Position, Class of Term Experience During the Past Five
if any, with the Company Age Director Expires Years
------------------------ --- -------- ------- --------------------------------
<C> <C> <C> <C> <S>
Keith D. Koeller(1)..... 43 Class I 2001 Director since May 1995. Since
1986, Mr. Koeller has served as
a Partner of the law firm of
Mower, Koeller, Nebeker,
Carlson & Haluck.
Stephen J. Scarborough.. 51 Class II 2002 Director since May 1996 and
Chief Executive Officer since
Chief Executive Officer January 2000. Mr. Scarborough
and President 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(1).... 59 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 Arthur
Andersen LLP. He is also
currently a director of White
Cap Industries, a retailer of
specialty tools and materials
to professional contractors.
Larry McNabb(2)......... 51 Class II 2002 Director since May 1999.
President of Vicor Financial
Services, an information
technologies consulting and
engineering firm, since April
1998, and Chief Executive
Officer of Primary Payment
Systems, a payments risk
management company, since
August 1997. From August 1996
until March 1998, Mr. McNabb
was also 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.
</TABLE>
- --------
(1) Member of the Audit Committee of the Board of Directors.
(2)Member of the Compensation Committee of the Board of Directors.
(3)Member of the Nominating Committee of the Board of Directors.
4
<PAGE>
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 the Company's Chairman, Chief Executive Officer and President,
and Executive Vice-President will 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 2000 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, the Company's Chairman and Chief Executive Officer, Arthur E.
Svendsen, and the Company's President, Stephen J. Scarborough, each
participated in the bonus plan. Effective January 1, 2000, Mr. Svendsen
retired from his position as Chief Executive Officer and was succeeded by Mr.
Scarborough as Chief Executive Officer and President. In addition, in January
2000, Mr. Michael C. Cortney was appointed Executive Vice-President of the
Company. Mr. Cortney also continues to serve as President of the Company's
Northern California Division. As a result of these changes in the management
of the Company, the Compensation Committee amended and restated the bonus plan
to add the participation of the Executive Vice-President and adjust the
participation levels of Messrs. Svendsen and Scarborough. The aggregate
payments under the Plan shall remain substantially constant at 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 six 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.
5
<PAGE>
Description of the Plan
The Company's Chairman, Chief Executive Officer and President, and Executive
Vice-President will be eligible to participate in the Amended Bonus Plan.
Continued participation will be based on a person's continued service to the
Company in one or more of the foregoing positions. The resignation of any
participant will not effect the eligibility or participation percentages of
the remaining participants. After the annual audit of the Company's financial
statements has been completed as of the end of each year in which the Amended
Bonus Plan is in place for one or more of these executive officers, the
executive officers 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 calculated pursuant to the formulas set out below. 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.
Standard Pacific Corp.
Management Incentive Bonus Plan
Participation
<TABLE>
<CAPTION>
Prior Bonus Plan Amended Bonus Plan
- ------------------------------------------------- ----------------------------------------------
Bonus Payment
Bonus Payment Percentage of
Percentage of Pretax Pretax Operating
Position Operating Results(1) Position Results(1)
-------- -------------------- -------- ----------------
<S> <C> <C> <C>
Chairman and Chief
Executive Officer......... 1.5% Chairman................... 0.5%
Chief Executive Officer and
President.................. 2.5% President................. 2.25%
Executive Vice President... 1.25%
---------------- ----------------
4.0% 4.0%
================ ================
</TABLE>
- --------
(1) Prior to the amendment of the Plan, the participation of the President was
based on the pretax operating results of the homebuilding and corporate
segments of the Company. To reflect the disposition of the non-
homebuilding segments of the Company's business, the participation
percentages of the executives in the Amended Bonus Plan are based on the
consolidated pretax operating results of the Company as a whole.
The amendments to the bonus plan are not intended to increase the aggregate
compensation payable to the participants under the Plan. The participation
percentages allocated to Messrs. Svendsen and Scarborough in their new
positions have been decreased in an amount equal to the participation
percentage allocated to Mr. Cortney in the new position of Executive Vice
President. The decrease in Mr. Svendsen's participation percentage reflects
his reduced responsibilities following his retirement as Chief Executive
Officer. Mr. Scarborough's participation percentage was decreased to keep the
Plan's aggregate participation percentage equal to 4% of pretax operating
results. The grant of a participation percentage to Mr. Cortney reflects his
increased involvement in corporate matters, including greater responsibility
for formulating and implementing the Company's growth strategy. Mr. Cortney
will not continue to receive separate compensation with respect to the
Northern California operations of the Company. Each formula provides that
participation will be based upon the consolidated pretax operating results of
the Company as a whole as reflected in the Company's audited financial
statements. The Compensation Committee retains the discretion to terminate the
bonus plan for one or more of the specified executive officers or to otherwise
amend the bonus plan on a prospective basis at its discretion. The
Compensation Committee must certify in writing that the amount of any payment
to an executive officer is the amount provided for under the applicable
formulas.
6
<PAGE>
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. However, the following chart
compares the amount of cash bonuses which were paid to the Chairman and Chief
Executive Officer and the President for 1999 prior to the amendment and
restatement of the Plan with the cash bonuses which would have been paid to
the Chairman, the Chief Executive Officer and President, and the Executive
Vice-President of the Company for 1999 had the Amended Bonus Plan been in
place for that year.
Standard Pacific Corp.
Management Incentive Bonus Plan
Pro Forma Plan Benefits
<TABLE>
<CAPTION>
Amended Bonus Plan
Prior Bonus Plan Pro Forma Payments for
Actual Payments for 1999 1999
------------------------ ------------------------
Formula Formula
Name and Position Percentage(1) Payments Percentage(1) Payments
- ----------------- ------------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
Arthur E. Svendsen
Chairman and Chief
Executive
Officer in 1999, Chairman
in 2000.................... 1.5% $1,722,502 0.5% $ 574,074
Stephen J. Scarborough
President in 1999,
Chief Executive Officer and
President in 2000.......... 2.5% $2,851,582 2.25% $2,583,461
Michael C. Cortney
Executive Vice President in
2000....................... -- -- 1.25% $1,435,185
---- ---------- ----- ----------
Participant Group (2 persons
actual, 3 persons pro
forma)..................... 4.0% $4,574,084 4.0% $4,592,720
==== ========== ===== ==========
</TABLE>
- --------
(1) Prior to the amendment of the Plan, the participation of the President was
based on the pretax operating results of the homebuilding and corporate
segments of the Company. To reflect the disposition of the non-
homebuilding segments of the Company's business, the participation
percentages of the executives in the Amended Bonus Plan are based on the
consolidated pretax operating results of the Company as a whole.
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
AND SCARBOROUGH 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 and
Scarborough are participants in the Amended Bonus Plan, and have been and will
be eligible to receive compensation thereunder. Accordingly, they have
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 and voting at the Annual Meeting is
necessary to approve the Amended Bonus Plan.
7
<PAGE>
Proposal No. 3
2000 STOCK INCENTIVE PLAN
As of March 1, 2000, an aggregate of 64,775 shares of common stock remained
available under the Company's existing 1997 Employee Stock Incentive Plan and
1991 Employee Stock Incentive Plan for the grant of stock options or stock
appreciation rights, for sale as restricted stock or for issuance pursuant to
other stock-based incentives. The Board of Directors believes that such number
of shares is insufficient to allow the Company to continue to make substantial
use of stock-based incentives to attract, retain and motivate qualified
employees and non-employee directors. In order to increase the aggregate
number of shares available for stock-based incentives, the Board adopted the
2000 Stock Incentive Plan (the "2000 Plan") on January 25, 2000 and is
submitting it to the stockholders for their approval at the Annual Meeting.
The following is a description of the material features of the 2000 Plan.
The description does not purport to be complete and is qualified in its
entirety by reference to the full text of the 2000 Plan which is attached to
this proxy statement as Appendix A and incorporated herein by reference.
Stockholders are encouraged to read the text of the 2000 Plan in its entirety.
Description of Plan
Plan Purpose. The purpose of the 2000 Plan is to enable the Company and its
subsidiaries to attract, retain and motivate their directors, officers and
other key employees, and to further align the interests of such persons with
those of the stockholders of the Company by providing for or increasing the
proprietary interest of such persons in the Company.
Eligible Participants. Any person who is an employee or prospective employee
of the Company or any of its subsidiaries and any non-employee director of the
Company is eligible to be considered for the grant of awards under the 2000
Plan.
Awards. The 2000 Plan authorizes the administrator of the plan to grant an
award to eligible participants in the form of an option, an incentive bonus or
incentive stock. An award may consist of one such form or two or more of them
in tandem or in the alternative.
Stock Options. The Committee may grant an option to purchase common stock
of the Company, either from time to time in the discretion of the Committee
or automatically upon the occurrence of specified events, including,
without limitation, the achievement of performance goals, or the
satisfaction of an event or condition within the control of the recipient
of the award or within the control of others. The options may be incentive
stock options that qualify under Section 422 of the Internal Revenue Code
("Incentive Stock Options") or nonstatutory stock options ("Nonqualified
Stock Options").
The purchase price per share of common stock subject to an option granted
under the 2000 Plan shall generally equal or exceed 100% of the fair market
value of such common stock on the date the option is granted, except that
(a) the exercise price of an option may be higher or lower in the case of
options granted to an employee of a company acquired by the Company in
assumption and substitution of options held by such employee at the time
such company is acquired ("Substitution Options"), (b) in the event an
eligible person is required to pay or forego the receipt of any cash amount
in consideration of receipt of an option, the exercise price plus such cash
amount shall equal or exceed 100% of the fair market value of such stock on
the date the option is granted, and (c) in the case of Incentive Stock
Options, the purchase price per share of common stock subject to each
option granted under the plan shall equal or exceed 110% of the fair market
value of such shares on the date the option is granted, for options granted
to an individual who, at the time the option is granted to such individual
under the plan, owns more than 10% of the combined voting power of all
classes of stock of the Company.
8
<PAGE>
The term of each option granted under the plan, including any Incentive
Stock Options, will be 10 years from the date of its grant, unless the
administrator provides for a shorter period. Options granted under the plan
shall vest as determined by the administrator, provided however, that no
option other than non-employee director options and Substitution Options
shall first become exercisable within one (1) year from the date of grant.
The exercise price of an option shall be paid in the form of one of more
of the following, as the administrator shall determine: (i) cash or
certified or cashiers' check, (ii) shares of capital stock of the Company,
(iii) other property deemed acceptable by the administrator, (iv) a
reduction in the number of shares or other property otherwise issuable
pursuant to such option or (v) any combination of the above.
Incentive Bonus. Each incentive bonus award will confer upon the
participant the opportunity to earn a future payment tied to the level of
achievement with respect to one or more performance criteria established
for a specified performance period. The maximum amount payable pursuant to
an incentive bonus award granted under the 2000 Plan for any fiscal year to
any participant that is intended to satisfy the requirements for
"performance based compensation" under Code Section 162(m) shall not exceed
$5,000,000.
Incentive Stock. Incentive stock is an award or issuance of shares of
common stock of the Company the grant, issuance, retention, vesting and/or
transferability of which is subject during specified periods of time to
such conditions (including continued employment or performance conditions)
and terms as the administrator of the plan deems appropriate. The vesting
shall be tied to certain performance criteria or time employed, which shall
be over a period of not less than one year. The administrator shall
determine the price, if any, at which shares of incentive stock shall be
sold or awarded to a participant which may be below the fair market value
of such shares at the date of grant or issuance.
Available Shares. The maximum number of shares of Company common stock that
may be issued pursuant to awards granted under the 2000 Plan is 1,000,000
(subject to adjustments to prevent dilution) plus the number of shares subject
to awards that are cancelled, expire or forfeited under the Company's 1991
Employee Stock Incentive Plan and 1997 Stock Incentive Plan after the
expiration date of such plans, provided that no more than 15% of such shares
may be issued pursuant to all incentive stock awards granted under the plan.
Tax Code Limitations. For so long as grants under the plan are to be treated
as "performance-based compensation" under Code Section 162(m) the aggregate
number of shares subject to options granted under the plan during any calendar
year to any one eligible person shall not exceed 300,000, and the aggregate
number of shares issued or issuable under all awards granted under the plan,
other than options, during any calendar year to any one eligible person shall
not exceed 150,000, subject to antidilution adjustments that will not affect
the status of any award intended to qualify as "performance based
compensation" under Code Section 162(m). The aggregate fair market value (as
of the date of grant) of shares for which one or more options granted by the
Company to any one eligible person under the plan, or any other plan of the
Company, may for the first time become exercisable as Incentive Stock Options
during any one calendar year shall not exceed the maximum value permitted
under Code Section 422, and the aggregate number of shares that may be issued
pursuant to the exercise of Incentive Stock Options granted under the plan
shall not exceed 1,000,000, which number shall be subject to antidilution
adjustment to the extent that such adjustment will not affect the status of
any option intended to qualify as an Incentive Stock Option under Code Section
422.
Plan Administration. The 2000 Plan will be administered by a committee of
the Board of Directors consisting of two or more directors, each of whom is
(i) a "Non-Employee Director" within the meaning of Rule 16b-3 promulgated
under the Securities Exchange Act, and (ii) is an "Outside Director" within
the meaning of Section 162(m) of the Internal Revenue Code, provided however,
that with respect to any award that is not intended to satisfy the conditions
of Rule 16b-3 under the Securities Exchange Act or Section 162(m)(4)(c) of the
Internal Revenue Code, the committee may appoint one or more separate
committees composed of one or more directors of the Company (who may but need
not be members of the Compensation Committee of the Company) and may delegate
to any such subcommittees the authority to grant awards under the plan to
eligible
9
<PAGE>
persons, to determine all terms of such awards, and to administer the plan or
any aspect of it. The administrator has full and final authority to select the
participants to receive awards and to grant such awards. Subject to the
provisions of the 2000 Plan, the administrator has a wide degree of
flexibility in determining the terms and conditions of awards and the number
of shares to be issued pursuant thereto. The Board may amend, alter or
discontinue the 2000 Plan or any agreement or other document evidencing an
award made under the plan, but, except as provided pursuant to the anti-
dilution adjustment provisions of the plan, no such amendment shall, without
the approval of the stockholders of the Company:
(a) increase the maximum number of shares of common stock for which awards
may be granted;
(b) increase the maximum awards that may be granted during any calendar
year to any one eligible person;
(c) reduce the price at which options may be granted below the price
provided for in the plan;
(d) reduce the exercise price of outstanding options;
(e) extend the term of the plan;
(f) change the class of persons eligible to participate in the plan; or
(g) increase the number of shares that are eligible for non-option awards.
Change of Control. The administrator may provide, either at the time an
award is granted or thereafter, that a change in control of the Company (as
defined in the Plan) shall have such effect as specified by the administrator,
or no effect, as the administrator in its discretion provides.
Federal Income Tax Treatment. The following is a brief description of the
federal income tax treatment that will generally apply to awards made under
the 2000 Plan, based on federal income tax laws in effect on the date hereof.
The exact federal income tax treatment of awards will depend on the specific
nature of any such award.
Incentive Stock Options. Stock Options granted under the 2000 Plan may
qualify as Incentive Stock Options within the meaning of Section 422 of the
Code. If an optionee exercises an Incentive Stock Option in accordance with
its terms and does not dispose of the shares acquired within two years from
the date of the grant of the Incentive Stock Option nor within one year
from the date of exercise (the "Required Holding Periods"), an optionee
generally will not be subject to regular federal income tax liability and
the Company will not be entitled to any deduction, on either the grant or
the exercise of an Incentive Stock Option. An optionee's basis in the
shares acquired upon exercise will be the amount paid upon exercise.
Provided an optionee holds the shares as a capital asset at the time of
sale or other disposition of the shares, an optionee's gain or loss, if
any, recognized on the sale or other disposition will be capital gain or
loss. The amount of an optionee's gain or loss will be the difference
between the amount realized on the disposition of the shares and the
optionee's basis in the shares.
If, however, an optionee disposes of the acquired shares at any time
prior to the expiration of the Required Holding Periods, then (subject to
certain exceptions), the optionee will recognize ordinary income at the
time of such disposition which will equal the excess, if any, of the lesser
of (i) the amount realized on such disposition or (ii) the fair market
value of the shares on the date of exercise, over the optionee's basis in
the shares. The Company generally will be entitled to a deduction in an
amount equal to the amount of ordinary income recognized by an optionee.
Any gain in excess of such ordinary income amount will be a short-term or
long-term capital gain, depending on the optionee's holding period. If an
optionee disposes of such shares for less than the optionee's basis in the
shares, the difference between the amount realized and the optionee's basis
will be short-term or long-term capital loss, depending upon the holding
period of the shares.
10
<PAGE>
Nonqualified Stock Option. In general, there are no tax consequences to
the optionee or to the Company on the grant of a Nonqualified Stock Option,
including non-employee director options. On exercise, however, the optionee
generally will recognize ordinary income equal to the excess of the fair
market value of the shares as of the exercise date over the purchase price
paid for such shares, and the Company will be entitled to a deduction equal
to the amount of ordinary income recognized by the optionee. Provided the
shares received under a Nonqualified Stock Option are held as a capital
asset, upon the subsequent disposition of the shares the optionee will
recognize capital gain or loss in an amount equal to the difference between
the proceeds received upon disposition and his or her basis for the shares.
The basis will be equal to the sum of the price paid for the shares and the
amount of income realized upon exercise of the option. Any capital gain or
loss to the optionee will be characterized as long-term or short-term,
depending upon the holding period of the shares.
Restricted Stock. Unless the recipient makes an election under Section
83(b) of the Code (an "83(b) Election") within 30 days after the receipt of
restricted stock, the recipient is not taxed and the Company is not
entitled to a deduction until the restriction lapses, and at that time the
recipient will recognize ordinary income equal to the difference between
the then fair market value of the common stock and the amount, if any, paid
by the recipient for the common stock, and the recipient's tax basis in the
common stock will be equal to the then fair market value of the common
stock. If the recipient makes a timely 83(b) Election, the recipient will
recognize ordinary income at the time of the election equal to the
difference between the fair market value of the restricted stock on the
date of grant and the amount, if any, paid by the recipient for the common
stock, and the recipient's tax basis in the common stock will equal the
fair market value of the common stock on the grant date. Any subsequent
sale of the common stock by the recipient generally will, depending upon
the length of the holding period beginning just after the date the
restriction on the common stock lapses or where an 83(b) Election is made
just after the grant date, be treated as long or short term capital gain or
loss equal to the difference between the sale price, the recipient's tax
basis, and the recipient's tax basis or sale price. The Company generally
will be entitled to a deduction in an amount equal to the ordinary income
recognized by the recipient.
Other Awards. In addition to the types of awards described above, the
2000 Plan authorizes certain other awards that may include payments in
cash, Company common stock, or a combination of cash and common stock. The
tax consequences of such awards will depend upon the specific terms of such
awards. Generally, however, a participant who receives an award payable in
cash will recognize ordinary income with respect to such award at the
earliest time at which the participant has an unrestricted right to receive
the amount of the cash payment, and the Company will be entitled to a
corresponding deduction. In general, the sale or grant of stock to a
participant under the 2000 Plan will be a taxable event at the time of the
sale or grant if such stock at that time is not subject to a substantial
risk of forfeiture or is transferable within the meaning of Section 83 of
the Code in the hands of the participant. (For such purposes, stock is
ordinarily considered to be transferable if it can be transferred to
another person who takes the stock free of any substantial risk of
forfeiture.) In such case, the participant will recognize ordinary income,
and the Company will be entitled to a deduction, equal to the excess of the
fair market value of such stock on the date of the sale or grant over the
amount, if any, paid for such stock. Stock that at the time of receipt by a
participant is subject to a substantial risk of forfeiture and that is not
transferable within the meaning of Code Section 83 generally will be taxed
under the rules applicable to Restricted Stock as described above.
Miscellaneous Tax Issues. The terms of awards granted under the 2000 Plan
may provide for accelerated vesting or payment of an award in connection
with a change in ownership or control of the Company. In that event and
depending upon the individual circumstances of the recipient, certain
amounts with respect to such awards may constitute "excess parachute
payments" under the "golden parachute" provisions of the Code. Pursuant to
these provisions, a participant will be subject to a 20% excise tax on any
"excess parachute payments" and the Company will be denied any deduction
with respect to such payment. Under current tax legislation and Treasury
regulations, including Section 162(m) of the Internal Revenue Code,
compensation paid to certain executive officers in excess of $1,000,000 in
any fiscal year
11
<PAGE>
will not be deductible to the Company for federal income tax purposes
unless such compensation qualifies as "performance-based compensation" or
is otherwise exempt from such limits on deductibility. Options, stock
grants and other payments are excluded from this rule if they qualify as
performance-based compensation. Awards granted under the 2000 Plan are
intended by the Company to satisfy the requirements for deductibility under
Section 162(m), however, they may not so qualify given ambiguities and
uncertainties as to the application and interpretation of Section 162(m)
and the Treasury regulations issued thereunder.
The Company will generally be required to withhold applicable taxes with
respect to any ordinary income recognized by a participant in connection
with awards made under the Plan. Whether or not such withholding is
required, the Company will make such information reports to the Internal
Revenue Service as may be required with respect to any income (whether or
not that of an employee) attributable to transactions involving awards.
Termination. The Plan will terminate in 2010 unless the Board terminates it
sooner.
Participation in the 2000 Plan is in the discretion of the administrator.
Accordingly, future participation by executive officers and other employees
under the 2000 Plan is not determinable.
Board Recommendation
The Board of Directors believes that it is in the best interests of the
Company and its stockholders to adopt the 2000 Plan in order to attract,
retain and motivate qualified employees and nonemployee directors. THE BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE APPROVAL OF
THE 2000 STOCK INCENTIVE PLAN. Proxies solicited by the Board of Directors
will be voted in favor of the 2000 Plan unless stockholders specify otherwise
in the proxy. The affirmative vote of the holders of a majority of the shares
represented and voting at the Annual Meeting is necessary to approve the 2000
Plan.
12
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth certain information as of March 1, 2000
regarding ownership of the Company's shares of common stock by (i) each
nominee for director, (ii) each director and named executive officer, (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:
<TABLE>
<CAPTION>
Percent of
Amount and Nature of Outstanding
Name of Beneficial Owner Beneficial Ownership Shares
- ------------------------ -------------------- -----------
<S> <C> <C>
Arthur E. Svendsen(1)........................ 2,800,000 9.7%
Stephen J. Scarborough(2).................... 367,000 1.3%
Michael C. Cortney(3)........................ 148,000 *
Andrew H. Parnes(4).......................... 80,470 *
Clay A. Halvorsen(5)......................... 20,001 *
Dr. James L. Doti(6)......................... 12,000 *
Ronald R. Foell(7)........................... 445,124 1.5%
Douglas C. Jacobs(8)......................... 7,000 *
Keith D. Koeller(9).......................... 9,000 *
Larry McNabb................................. 2,000 *
Robert J. St. Lawrence(10)................... 9,814 *
Jeffrey V. Peterson.......................... 0 *
Donald H. Spengler(11)....................... 1,066,635 3.7%
Directors and Executive Officers As a Group
(13 persons)................................ 4,993,579 17.3%
Dimensional Fund Advisors Inc.(12)........... 2,268,772 7.8%
</TABLE>
- --------
* Less than one percent
(1) 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.
(2) Includes 303,000 shares subject to options held by Mr. Scarborough which
are exercisable within 60 days.
(3) Includes 70,500 shares subject to options held by Mr. Cortney which are
exercisable within 60 days.
(4) Includes 75,990 shares subject to options held by Mr. Parnes which are
exercisable within 60 days.
(5) Includes 20,001 shares subject to options held by Mr. Halvorsen which are
exercisable within 60 days.
(6) Includes 9,000 shares subject to options held by Mr. Doti which are
exercisable within 60 days.
(7) Includes 9,000 shares subject to options held by Mr. Foell which are
exercisable within 60 days.
(8) Includes 7,000 shares subject to options held by Mr. Jacobs which are
exercisable within 60 days.
(9) Includes 9,000 shares subject to options held by Mr. Koeller which are
exercisable within 60 days.
(10) Includes 9,000 shares subject to options held by Mr. St. Lawrence which
are exercisable within 60 days.
(11) Includes 9,000 shares subject to options held by Mr. Spengler which are
exercisable within 60 days.
(12) 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.
13
<PAGE>
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
Committees of the Board of Directors and Attendance
During fiscal year 1999, the Board of Directors had standing Audit,
Compensation and Nominating Committees.
Audit Committee: The functions of the Audit Committee are to recommend to
the Board of Directors the selection of the Company's independent auditors and
to review and approve the scope of the audit, the results of the audit and the
fees charged for audits. The committee held two meetings during 1999.
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 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 1999.
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 meeting 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 did not hold any meetings during 1999 (but acted by
unanimous written consent to recommend the slate of directors to be nominated
by the Board for election at the Annual Meeting).
Board of Directors Meetings and Compensation
During 1999, the Company's Board of Directors held five meetings in addition
to the committee meetings discussed above. Each of the directors, other than
Mr. Spengler, attended at least 75% of the total number of meetings of the
Board of Directors and committees on which he served.
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 $1,500 if he or she is the
chairman of a committee.
During 1999, each non-management director of the Company received a grant of
options to purchase 2,000 shares of common stock of the Company. Mr. McNabb
received a grant of options to purchase 5,000 shares of common stock of the
Company upon his selection to the Board in May 1999. Each option vests one
year after the date of grant and is exercisable at the fair market value of
the common stock on the date of grant.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee for the 1999 calendar year consisted of
the following members of the Board of Directors: Chairman, Dr. James L. Doti;
Larry McNabb; and Donald H. Spengler. Mr. Doti, elected to the Board in 1995,
is President of Chapman University and a professor of economics. Mr. McNabb,
elected to the Board in 1999, is the President of Vicor Financial Services and
Chief Executive Officer of Primary Payment Systems. Mr. Spengler, elected to
the Board in 1962, is a private investor.
14
<PAGE>
EXECUTIVE COMPENSATION
The following table summarizes the total compensation of the Company's named
executive officers for 1999, as well as the total compensation paid to each
such individual for the two previous years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation(A) Awards
---------------------- ------------------
Securities All Other
Name and Principal Salary Bonus(B) Underlying Options Compensation (C)
Position Year ($) ($) (#) ($)
------------------ ---- ------- --------- ------------------ ----------------
<S> <C> <C> <C> <C> <C>
Arthur E. Svendsen...... 1999 402,400 1,722,502 -- 5,200
Chairman of the Board
(D) 1998 402,400 1,175,281 -- 5,200
1997 356,190 682,208 -- 5,200
Stephen J. Scarborough.. 1999 403,600 2,851,582 75,000 5,500
Chief Executive Officer 1998 403,600 1,975,289 195,000 5,500
and President (D) 1997 256,378 1,006,474 100,000 5,500
Andrew H. Parnes........ 1999 239,200 300,000 30,000 5,500
Vice-President-Finance, 1998 204,200 210,000 72,000 5,500
Treasurer and Chief
Financial Officer 1997 166,654 120,000 30,000 5,500
Clay A. Halvorsen....... 1999 229,200 150,000 30,000 5,500
Vice-President, 1998 204,200 100,000 70,000 5,500
General Counsel and
Secretary (E)
</TABLE>
- --------
(A) The amount of perquisites and other personal benefits received by each of
the 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 Company contributions to the Company's 401(k) retirement plan
which amounted to $5,000 per year. The balance of this amount, after
deducting the Company's 401(k) contributions, represents premiums on life
insurance coverage paid by the Company.
(D) Effective January 1, 2000, Mr. Svendsen resigned from his position as
Chief Executive Officer and was succeeded by Mr. Scarborough as Chief
Executive Officer.
(E) Mr. Halvorsen joined the Company in January 1998.
15
<PAGE>
The following table summarizes option grants to the Company's named
executive officers for fiscal year 1999 and the potential realizable value at
certain assumed rates of stock price appreciation for the option term:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
--------------------------------------------
Number of Potential Realizable Value
Securities % of Total at Assumed Annual Rate
Underlying Options Exercise of Stock Price Appreciation
Options Granted to or Base for Option Term(D)
Granted Employees in Price Expiration ---------------------------
Name (#)(A,B) Fiscal Year ($/Sh)(C) Date 5%($) 10%($)
---- ---------- ------------ --------- ---------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Arthur E. Svendsen...... -- -- -- -- -- --
Stephen J. Scarborough.. 75,000 23.1% 11.3125 2009 533,578 1,352,191
Andrew H. Parnes........ 30,000 9.3% 11.3125 2009 213,431 540,876
Clay A. Halvorsen....... 30,000 9.3% 11.3125 2009 213,431 540,876
</TABLE>
- -------
(A) All options vest and become exercisable one year from the date of the
grant.
(B) All options were granted for a term of 10 years, subject to earlier
termination in certain events related to termination of employment. Under
the terms of the Company's 1997 Stock Incentive Plan and 1991 Employee
Stock Incentive Plan, the compensation committee retains discretion,
subject to plan limits, to modify the terms of outstanding options and to
re-price the options.
(C) The options were granted at the closing market price for the Company's
common stock as reported in The Wall Street Journal for the date of
grant. The exercise price and tax withholding obligations, if any, may be
paid by delivery of already owned shares or by offset of the underlying
shares, subject to certain conditions.
(D) Potential gains are net of the option exercise price, but before taxes
associated with exercise.
FISCAL YEAR-END OPTIONS OUTSTANDING
The following table shows the number of unexercised options previously
granted to the named executive officers which were exercisable and
unexercisable at December 31, 1999. No options were exercised by the named
executive officers during 1999.
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options
December 31, 1999(#) at December 31, 1999($)
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
---- ---------------------- -----------------------
<S> <C> <C>
Arthur E. Svendsen......... -- --
Stephen J. Scarborough..... 265,500/402,500 $797,000/$531,250
Andrew H. Parnes........... 64,990/101,000 $107,555/$ 1,250
Clay A. Halvorsen.......... 10,001/89,999 $ 0/$ 0
</TABLE>
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
16
<PAGE>
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
Arthur E. Svendsen, the Chairman of the Board of the Company, has leased to
the Company approximately 24,000 square feet of office and manufacturing space
located in Costa Mesa, California. Pursuant to this lease, the Company made
rental payments of approximately $84,000 to Mr. Svendsen for the 1999 calendar
year.
17
<PAGE>
THE FOLLOWING REPORT OF THE COMPENSATION COMMITTEE AND THE PERFORMANCE GRAPH
THAT APPEARS IMMEDIATELY AFTER SUCH REPORT 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 for the 1999 calendar year, 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 Chief Executive Officer and President, Messrs.
Svendsen and Scarborough, respectively, during the 1999 calendar year, is
contingent upon the pretax operating results of the Company or of one or more
of its business units 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: (i)
base salary, (ii) annual bonus based on the results of operations of the
Company and its operating subsidiaries, and (iii) 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, including those used in the comparison graph on page
20, 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 of those positions. The Compensation Committee believes the
contingent portion of the executives' compensation in the form of the annual
bonus based generally on the Company's operations or a business unit's pretax
operating results for the year is an important component of compensation for
the Chief Executive Officer and 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 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, and in all circumstances, limit executive
compensation to that deductible under Section 162(m) of the Internal Revenue
Code. For 1999, 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.
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.
18
<PAGE>
Annual Salary and Incentive Compensation Program
In reviewing the incentive compensation levels of the Chief Executive
Officer and the Company's three other executive officers during 1999, 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 (pursuant to the Bonus Plan) for the Chief Executive
Officer and Executive Vice President.
CEO and President Compensation
Base Salary
Mr. Svendsen and Scarborough each earned a base salary (excluding their car
allowances) for 1999 of $400,000. In light of Mr. Scarborough's appointment as
successor Chief Executive Officer upon Mr. Svendsen's retirement, and based on
the Committee's subjective evaluation of the executives' performance, duties
and responsibilities, Mr. Svendsen's base salary for 2000 was set at $400,000
and Mr. Scarborough's base salary was set at $475,000.
Bonus Plan
Under the Company's bonus formula for Mr. Svendsen set forth in the Bonus
Plan as in effect for 1999, Mr. Svendsen receives a bonus equal to 1.5% of the
consolidated pretax operating results of the Company as a whole. Pursuant to
the formula, there is no maximum bonus which may be earned by Mr. Svendsen.
Under this formula, which has been in place since 1978, Mr. Svendsen was
awarded a bonus of $1,722,502 for 1999.
Under the Company's bonus formula for Mr. Scarborough set forth in the Bonus
Plan as in effect for 1999, Mr. Scarborough receives a bonus equal to 2.5% of
the pretax operating results of the homebuilding and corporate segments of the
Company. Pursuant to the formula, Mr. Scarborough earned a bonus of $2,851,582
for 1999.
Other Executive Compensation
The salaries of Mr. Parnes and Mr. Halvorsen for 2000 were set at $255,000
and $245,000, respectively. The Bonus Plan excludes the positions of Vice
President--Finance and Vice President, General Counsel and Secretary. The
Compensation Committee prefers to award a discretionary bonus to these
executives. Mr. Parnes and Mr. Halvorsen received discretionary bonuses of
$300,000 and $150,000, respectively, for 1999.
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 shareholders. 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, 1999, Messrs. Scarborough, Parnes and Halvorsen
were granted options to purchase 75,000, 30,000 and 30,000 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
Donald H. Spengler
December 13, 1999
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COMPANY PERFORMANCE
The following graph shows a five-year comparison of cumulative total returns
to stockholders for the Company, the Standard & Poor's 500 Composite Stock
Index and the Dow Jones Industry Group--Home Construction. The graph assumes
reinvestment of all dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL STOCKHOLDERS' RETURN AMONG STANDARD
PACIFIC CORP., STANDARD & POOR'S 500 COMPOSITE STOCK INDEX AND DOW JONES
INDUSTRY GROUP-HOME CONSTRUCTION
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
Standard Pacific Corp...... $100 $102 $ 98 $259 $234 $188
Dow Jones Industry
Construction Group Home... $100 $150 $150 $216 $234 $159
S&P 500.................... $100 $138 $169 $226 $290 $351
The above graph is based upon common stock and index prices calculated as of
December 31 for each of the last five fiscal year-end periods. The Company's
December 31, 1999 closing common stock price was $11.00 per share. As of March
20, 2000, the Company's common stock closed at $10.50 per share. The stock
price performance of Standard Pacific Corp. common stock depicted in the graph
above represents past performance only and is not indicative of future
performance.
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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. 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 LLP will be present at the 2000 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.
STOCKHOLDER PROPOSALS
FOR THE 2001 ANNUAL MEETING OF STOCKHOLDERS
Any eligible stockholder of the Company wishing to have a proposal
considered for inclusion in the Company's 2001 proxy solicitation materials
must set forth such proposal in writing and file it with the Secretary of the
Company on or before December 1, 2000. 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 2001
proxy solicitation materials. A stockholder is eligible to present proposals
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 2001 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
The Company is unaware of any report required under Section 16(a) of the
Securities Exchange Act of 1934, during or with respect to the fiscal year
ended December 31, 1999, that was not filed on a timely basis.
FORM 10-K ANNUAL REPORT
Additionally, 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, 1999 (the "1999
Form 10-K") without the exhibits thereto. The Company will provide, without
charge, a copy of its 1999 Form 10-K, or a copy of the exhibits to its 1999
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
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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 31, 2000
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Appendix A
2000 STOCK INCENTIVE PLAN
OF
STANDARD PACIFIC CORP.
SECTION 1. PURPOSE OF PLAN
The purpose of this 2000 Stock Incentive Plan (this "Plan") of Standard
Pacific Corp., a Delaware corporation (the "Company"), is to enable the
Company and its subsidiaries to attract, retain and motivate its directors,
officers and other employees, and to further align the interests of such
persons with those of the stockholders of the Company by providing for or
increasing the proprietary interest of such persons in the Company.
SECTION 2. ADMINISTRATION OF PLAN
2.1 Composition of Committee. This Plan shall be administered by a committee
of the Board of Directors consisting of two or more directors, each of whom
is: (i) a "Non-Employee Director" within the meaning of Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
such rule may be amended from time to time, and (ii) an "Outside Director" as
defined in the regulations adopted under Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), as such Code provision is
amended from time to time (the "Committee"), as appointed from time to time by
the Board of Directors. The Board of Directors shall fill vacancies on, and
from time to time may remove or add members to, the Committee. The Committee
shall act pursuant to a majority vote or unanimous written consent. The Board
of Directors, in its discretion, may exercise any authority of the Committee
under this Plan in lieu of the Committee's exercise thereof. Notwithstanding
the foregoing, with respect to any Award (as defined in Section 5.1) that is
not intended to satisfy the conditions of Rule 16b-3 under the Exchange Act or
Section 162(m)(4)(C) of the Code, the Committee may appoint one or more
separate committees (any such committee, a "Subcommittee") composed of one or
more directors of the Company (who may but need not be members of the
Committee) and may delegate to any such Subcommittee(s) the authority to grant
Awards under the Plan to Eligible Persons (as defined in Section 4), to
determine all terms of such Awards, and/or to administer the Plan or any
aspect of it. Any action by any such Subcommittee within the scope of such
delegation shall be deemed for all purposes to have been taken by the
Committee. The Committee may designate the Secretary of the Company or other
Company employees to assist the Committee in the administration of the Plan,
and may grant authority to such persons to execute agreements or other
documents evidencing Awards made under this Plan or other documents entered
into under this Plan on behalf of the Committee or the Company.
2.2 Powers of the Committee. Subject to the express provisions of this Plan,
the Committee shall be authorized and empowered to do all things necessary or
desirable, in its discretion, in connection with the administration of this
Plan, including, without limitation, the following:
(a) to prescribe, amend and rescind rules and regulations relating to
this Plan and to define terms not otherwise defined herein; provided that,
unless the Committee shall specify otherwise, for purposes of this Plan (i)
the term "fair market value" shall mean, as of any date, the closing price
for a Share (as defined in Section 3.1) reported for that date by the New
York Stock Exchange (or such other stock exchange or quotation system on
which Shares are then listed or quoted) or, if no Shares are traded on the
New York Stock Exchange (or such other stock exchange or quotation system)
on the date in question, then the closing price for the next preceding date
for which Shares are traded on the New York Stock Exchange (or such other
stock exchange or quotation system); and (ii) the term "Company" shall mean
the Company and its subsidiaries and affiliates, unless the context
otherwise requires;
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(b) to determine which persons are Eligible Persons, to which of such
Eligible Persons, if any, Awards shall be granted hereunder and the timing
of any such Awards, and to grant Awards;
(c) to determine the number of Shares subject to Awards and the exercise
or purchase price of such Shares;
(d) to establish and verify the extent of satisfaction of any performance
goals applicable to Awards;
(e) to prescribe and amend the terms of the agreements or other documents
evidencing Awards made under this Plan (which need not be identical);
(f) to determine whether, and the extent to which, adjustments are
required pursuant to Section 10;
(g) to interpret and construe this Plan, any rules and regulations under
this Plan and the terms and conditions of any Award granted hereunder, and
to make exceptions to any such provisions in good faith and for the benefit
of the Company; and
(h) to make all other determinations deemed necessary or advisable for
the administration of this Plan.
2.3 Determinations of the Committee. All decisions, determinations and
interpretations by the Committee regarding this Plan shall be final and
binding on all Eligible Persons and Participants (as defined in Section 4).
The Committee shall consider such factors as it deems relevant to making such
decisions, determinations and interpretations including, without limitation,
the recommendations or advice of any director, officer or employee of the
Company and such attorneys, consultants and accountants as it may select.
SECTION 3. STOCK SUBJECT TO PLAN
3.1 Aggregate Limits. The aggregate number of shares of the Company's common
stock, $.01 par value per share ("Shares"), issued pursuant to all Awards
granted under this Plan shall not exceed 1,000,000 plus the number of shares
subject to awards that are cancelled, expire or forfeited under the Company's
1991 Employee Stock Incentive Plan and 1997 Stock Incentive Plan after the
expiration date of such plans; provided that no more than 15% of such Shares
may be issued pursuant to all Incentive Stock Awards (as defined in Section
5.1) granted under this Plan. Such limits shall be subject to adjustment as
provided in Section 10. The Shares issued pursuant to this Plan may be Shares
that either were reacquired by the Company, including Shares purchased in the
open market, or authorized but unissued Shares.
3.2 Tax Code Limits. The aggregate number of Shares subject to Options
granted under this Plan during any calendar year to any one Eligible Person
shall not exceed 300,000. The aggregate number of Shares issued or issuable
under all Awards granted under this Plan, other than Options, during any
calendar year to any one Eligible Person shall not exceed 150,000.
Notwithstanding anything to the contrary in this Plan, the foregoing Share
limitations shall be subject to adjustment under Section 10 only to the extent
that such adjustment will not affect the status of any Award intended to
qualify as "performance based compensation" under Code Section 162(m). The
foregoing limitations shall not apply to the extent that they are no longer
required in order for compensation in connection with grants under this Plan
to be treated as "performance-based compensation" under Code Section 162(m).
The aggregate fair market value (as of the date of grant) of Shares for which
one or more Options granted by the Company to any one Eligible Person under
this Plan, or any other plan of the Company, may for the first time become
exercisable as ISOs during any one calendar year shall not exceed the maximum
value permitted under Code Section 422, and the number of Shares that may be
issued pursuant to the exercise of ISOs granted under this Plan shall not
exceed 1,000,000, which number shall be calculated and adjusted pursuant to
Section 3.3 and Section 10 only to the extent that such calculation or
adjustment will not affect the status of any option intended to qualify as an
ISO under Code Section 422.
3.3 Issuance of Shares. For purposes of Section 3.1, the aggregate number of
Shares issued under this Plan at any time shall equal only the number of
Shares actually issued upon exercise or settlement of an Award and shall not
include Shares subject to Awards that have been canceled, expired or forfeited
or Shares subject to Awards that have been delivered to the Company in payment
or satisfaction of the purchase price, exercise price or tax withholding
obligation of an Award.
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SECTION 4. PERSONS ELIGIBLE UNDER PLAN
Any person who is an employee or prospective employee of the Company or of
any of its subsidiaries or affiliates and any director of the Company who is
not an employee shall be eligible to be considered for the grant of Awards
hereunder (an "Eligible Person"). A "Participant" is any current or former
Eligible Person to whom an Award has been made and any person (including any
estate) to whom an Award has been assigned or transferred pursuant to Section
9.1.
SECTION 5. PLAN AWARDS
5.1 Award Types. The Committee, on behalf of the Company, is authorized
under this Plan to enter into certain types of written arrangements with
Eligible Persons and to confer certain benefits on them. The following
arrangements or benefits are authorized under this Plan if their terms and
conditions are not inconsistent with the provisions of this Plan: Options,
Incentive Bonuses and Incentive Stock. Such arrangements and benefits are
sometimes referred to herein as "Awards." The authorized types of arrangements
and benefits for which Awards may be granted are defined as follows:
(a) Options: An option is a right granted under Section 6 (an "Option")
to purchase a number of Shares at such exercise price, at such times, and
on such other terms and conditions as are specified in the agreement or
terms and conditions or other document evidencing the Award (the "Option
Document"). Options intended to qualify as Incentive Stock Options ("ISOs")
pursuant to Code Section 422 and Options not intended to qualify as ISOs
("Nonqualified Options") may be granted under Section 6.
(b) Incentive Bonus: An incentive bonus is a bonus opportunity awarded
under Section 7 (an "Incentive Bonus") pursuant to which a Participant may
become entitled to receive an amount based on satisfaction of such
performance criteria as are specified in the agreement or other document
evidencing the Award (the "Incentive Bonus Document").
(c) Incentive Stock: Incentive stock is an award or issuance of Shares
made under Section 8 ("Incentive Stock"), the grant, issuance, retention,
vesting and/or transferability of which is subject during specified periods
of time to such conditions (including continued employment or performance
conditions) and terms as are expressed in the agreement or other document
evidencing the Award (the "Incentive Stock Document").
5.2 Grants of Awards. An Award may consist of one such arrangement or
benefit or two or more of them in tandem or in the alternative.
SECTION 6. OPTIONS
The Committee may grant an Option or provide for the grant of an Option,
either from time to time in the discretion of the Committee or automatically
upon the occurrence of specified events, including, without limitation, the
achievement of performance goals, the satisfaction of an event or condition
within the control of the recipient of the Award or within the control of
others.
6.1 Option Document. Each Option Document shall contain provisions regarding
(a) the number of Shares that may be issued upon exercise of the Option, (b)
the purchase price of the Shares and the means of payment for the Shares, (c)
the term of the Option, (d) such terms and conditions of exercisability as may
be determined from time to time by the Committee, (e) restrictions on the
transfer of the Option and forfeiture provisions and (f) such further terms
and conditions, in each case not inconsistent with this Plan as may be
determined from time to time by the Committee. Option Documents evidencing
ISOs shall contain such terms and conditions as may be necessary to qualify,
to the extent determined desirable by the Committee, with the applicable
provisions of Section 422 of the Code.
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6.2 Option Price. The purchase price per share of the Shares subject to each
Option granted under this Plan shall equal or exceed 100% of the fair market
value of such Shares on the date the Option is granted, except that (a) the
exercise price of an Option may be higher or lower in the case of Options
granted to an employee of a company acquired by the Company in assumption and
substitution of options held by such employee at the time such company is
acquired ("Substitution Options"), (b) if an Eligible Person is required to
pay or forego the receipt of any cash amount in consideration of receipt of an
Option, the exercise price plus such cash amount shall equal or exceed 100% of
the fair market value of such Stock on the date the Option is granted, and (c)
in the case of ISO grants, the purchase price per share of the Shares subject
to each Option granted under this Plan shall equal or exceed 110% of the fair
market value of such Shares on the date the Option is granted, for Options
granted to an individual who, at the time the Option is granted to such
individual under this Plan, owns more than 10% of the combined voting power of
all classes of stock of the Company.
6.3 Option Term. The term of each Option granted under this Plan, including
any ISOs, shall be 10 years from the date of its grant, unless the Committee
provides for a shorter period.
6.4 Option Vesting. Options granted under this Plan shall be exercisable at
such time and in such installments during the period prior to the expiration
of the Option's term as determined by the Committee, except that no Option
other than non-employee director options and Substitution Options shall first
become exercisable within one (1) year from its date of grant, other than upon
death or disability of the Eligible Person or upon a Change of Control (as
defined in Section 11.2). The Committee shall have the right to make the
timing of the ability to exercise any Option granted under this Plan subject
to such performance requirements as deemed appropriate by the Committee.
Subject to the limitation set forth in the first sentence of this Section 6.4,
at any time after the grant of an Option the Committee may reduce or eliminate
any restrictions surrounding any Participant's right to exercise all or part
of the Option
6.5 Termination of Employment or Service. Subject to Section 11, upon a
termination of a Participant's employment prior to (i) the full vesting of an
Option, the unvested portion of the Option shall be forfeited, unless the
Committee in its discretion determines otherwise and (ii) any unexercised
Options shall be subject to such procedures as the Committee may establish.
6.6 Payment of Exercise Price. The exercise price of an Option shall be paid
in the form of one of more of the following, as the Committee shall specify,
either through the terms of the Option Document or at the time of exercise of
an Option: (a) cash or certified or cashiers' check, (b) shares of capital
stock of the Company that have been held by the Participant for such period of
time as the Committee may specify, (c) other property deemed acceptable by the
Committee, (d) a reduction in the number of Shares or other property otherwise
issuable pursuant to such Option or (e) any combination of (a) through (d).
6.7 No Option Repricing. Without the approval of stockholders, the Company
shall not reprice any Options. For purposes of this Plan, the term "reprice"
shall mean lowering the exercise price of previously awarded Options within
the meaning of Item 402(i) under Securities and Exchange Commission Regulation
S-K (including canceling previously awarded Options and regranting them with a
lower exercise price).
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SECTION 7. INCENTIVE BONUSES
Each Incentive Bonus Award will confer upon the Participant the opportunity
to earn a future payment tied to the level of achievement with respect to one
or more performance criteria established for a specified performance period.
7.1 Incentive Bonus Document. Each Incentive Bonus Document shall contain
provisions regarding (a) the target and maximum amount payable to the
Participant as an Incentive Bonus, (b) the performance criteria and level of
achievement versus the criteria that shall determine the amount of such
payment, (c) the term of the performance period as to which performance shall
be measured for determining the amount of any payment, (d) the timing of any
payment earned by virtue of performance, (e) restrictions on the alienation or
transfer of the Incentive Bonus prior to actual payment, (f) forfeiture
provisions and (g) such further terms and conditions, in each case not
inconsistent with this Plan as may be determined from time to time by the
Committee. The maximum amount payable as an Incentive Bonus may be a multiple
of the target amount payable, but the maximum amount payable pursuant to that
portion of an Incentive Bonus Award granted under this Plan for any fiscal
year to any Participant that is intended to satisfy the requirements for
"performance based compensation" under Code Section 162(m) shall not exceed
$5,000,000.
7.2 Performance Criteria. The Committee shall establish the performance
criteria and level of achievement versus these criteria that shall determine
the target and maximum amount payable under an Incentive Bonus Award, which
criteria may be based on financial performance and/or personal performance
evaluations. The Committee may specify the percentage of the target Incentive
Bonus that is intended to satisfy the requirements for "performance-based
compensation" under Code Section 162(m). Notwithstanding anything to the
contrary herein, the performance criteria for any portion of an Incentive
Bonus that is intended by the Committee to satisfy the requirements for
"performance-based compensation" under Code Section 162(m) shall be a measure
based on one or more Qualifying Performance Criteria (as defined in Section
9.2) selected by the Committee and specified at the time the Incentive Bonus
Award is granted. The Committee shall certify the extent to which any
Qualifying Performance Criteria has been satisfied, and the amount payable as
a result thereof, prior to payment of any Incentive Bonus that is intended to
satisfy the requirements for "performance-based compensation" under Code
Section 162(m).
7.3 Timing and Form of Payment. The Committee shall determine the timing of
payment of any Incentive Bonus. The Committee may provide for or, subject to
such terms and conditions as the Committee may specify, may permit a
Participant to elect for the payment of any Incentive Bonus to be deferred to
a specified date or event.
7.4 Discretionary Adjustments. Notwithstanding satisfaction of any
performance goals, the amount paid under an Incentive Bonus Award on account
of either financial performance or personal performance evaluations may be
reduced by the Committee on the basis of such further considerations as the
Committee shall determine.
7.5 Termination of Employment. Subject to Section 11, upon a termination of
employment by a Participant prior to the vesting of or the lapsing of
restrictions on Incentive Bonuses, the Incentive Bonus Awards granted to such
Participant shall be forfeited, unless the Committee in its discretion
determines otherwise.
SECTION 8. INCENTIVE STOCK
Incentive Stock is an award or issuance of Shares the grant, issuance,
retention, vesting and/or transferability of which is subject during specified
periods of time to such conditions (including continued employment and/or
performance conditions) and terms as the Committee deems appropriate.
8.1 Incentive Stock Document. Each Incentive Stock Document shall contain
provisions regarding (a) the number of Shares subject to such Award or a
formula for determining such, (b) the performance criteria, if any, and level
of achievement versus these criteria that shall determine the number of Shares
granted, issued,
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retainable and/or vested, (c) the period, if any, as to which performance
shall be measured for determining achievement of performance or, if not
subject to performance criteria, the period of continued employment upon which
vesting of the Shares is subject, which period in any case (except in the
event of death or disability of the Participant or upon a Change of Control)
shall be not less than one year, (d) forfeiture, (e) transferability and
(f) such further terms and conditions not inconsistent with this Plan as may
be determined from time to time by the Committee.
8.2 Sale Price. Subject to the requirements of applicable law, the Committee
shall determine the price, if any, at which Shares of Incentive Stock shall be
sold or awarded to an Eligible Person, which may vary from time to time and
among Eligible Persons and which may be below the fair market value of such
Shares at the date of grant or issuance.
8.3 Performance Criteria. The grant, issuance, retention and/or vesting of
each Share of Incentive Stock may but need not be subject to such performance
criteria and level of achievement versus these criteria as the Committee shall
determine, which criteria may be based on financial performance and/or
personal performance evaluations. Notwithstanding anything to the contrary
herein, the performance criteria for any Incentive Stock that is intended to
satisfy the requirements for "performance-based compensation" under Code
Section 162(m) shall be a measure based on one or more Qualifying Performance
Criteria selected by the Committee and specified at the time the Incentive
Stock Award is granted. To the extent necessary to qualify as performance-
based compensation under Code Section 162(m), the Committee shall certify the
extent to which any Qualifying Performance Criteria has been satisfied, and
the amount payable as a result thereof, prior to issuance or vesting, as
applicable, of any Incentive Stock that is intended to satisfy the
requirements for performance-based compensation.
8.4 Discretionary Adjustments. Notwithstanding satisfaction of any
performance goals, the number of Shares granted, issued, retainable and/or
vested under an Incentive Stock Award on account of either financial
performance or personal performance evaluations may be reduced by the
Committee on the basis of such further considerations as the Committee shall
determine.
8.5 Termination of Employment. Subject to Section 11, upon a termination of
employment by a Participant prior to the vesting of or the lapsing of
restrictions on Incentive Stock, the unvested Incentive Stock Awards granted
to such Participant shall be forfeited, unless the Committee in its discretion
determines otherwise.
SECTION 9. OTHER PROVISIONS APPLICABLE TO AWARDS
9.1 Transferability. Unless the agreement or other document evidencing an
Award (or an amendment thereto authorized by the Committee) expressly states
that the Award is transferable as provided hereunder, no Award granted under
this Plan, nor any interest in such Award, may be sold, assigned, conveyed,
gifted, pledged, hypothecated or otherwise transferred in any manner other
than by will or the laws of descent and distribution. The Committee may grant
an Award or amend an outstanding Award to provide that the Award is
transferable or assignable to a member or members of the Participant's
"immediate family," as such term is defined in Rule 16a-1(e) under the
Exchange Act, or to a trust for the benefit solely of a member or members of
the Participant's immediate family, or to a partnership or other entity whose
only owners are members of the Participant's immediate family, provided that
following any such transfer or assignment the Award will remain subject to
substantially the same terms applicable to the Award while held by the
Participant, as modified as the Committee shall determine appropriate, and the
transferee shall execute an agreement agreeing to be bound by such terms.
9.2 Qualifying Performance Criteria. For purposes of this Plan, the term
"Qualifying Performance Criteria" shall mean any one or more of the following
performance criteria, either individually, alternatively or in any
combination, applied to either the Company as a whole or to a business unit or
subsidiary, either individually, alternatively or in any combination, and
measured over a specified time period, on an absolute basis or relative to a
pre-established target, to previous years' results or to a designated
comparison group, in each
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case as specified by the Committee in the Award: (a) cash flow, (b) earnings
per share, (c) earnings before any one or more of interest, taxes and
amortization, (d) return on equity, (e) total stockholder return, (f) return
on capital, (g) return on assets or net assets, (h) revenue, (i) income or net
income, (j) operating income or net operating income, (k) operating profit or
net operating profit, (l) operating margin or profit margin, (m) return on
operating revenue, (n) market share, (o) overhead or other expense reduction,
or (p) any other similar performance criteria. Prior to the grant of an Award,
the Committee shall determine whether or not it shall appropriately adjust any
evaluation of performance under the applicable Qualifying Performance Criteria
with respect to that Award to exclude any of the following events that occurs
during a performance period: (i) asset write-downs, (ii) litigation or claim
judgments or settlements, (iii) the effect of changes in tax law, accounting
principles or other such laws or provisions affecting reported results, (iv)
accruals for reorganization and restructuring programs and (v) any
extraordinary non-recurring items as described in Accounting Principles Board
Opinion No. 30 and/or in management's discussion and analysis of financial
condition and results of operations appearing in the Company's annual report
to stockholders for the applicable year.
9.3 Dividends. Unless otherwise provided by the Committee, no adjustment
shall be made in Shares issuable under Awards on account of cash dividends
that may be paid or other rights that may be issued to the holders of Shares
prior to their issuance under any Award. The Committee shall specify whether
dividends or dividend equivalent amounts shall be paid to any Participant with
respect to the Shares subject to any Award that on the record date for such
dividends have not vested or been issued or that are subject to any
restrictions or conditions.
9.4 Documents Evidencing Awards. The Committee shall, subject to applicable
law, determine the date an Award is deemed to be granted, which for purposes
of this Plan shall not be affected by the fact that an Award is contingent on
subsequent stockholder approval of this Plan. The Committee or, except to the
extent prohibited under applicable law, its delegate(s) may establish the
terms of agreements or other documents evidencing Awards under this Plan and
may, but need not, require as a condition to any such agreement's or
document's effectiveness that such agreement or document be executed by the
Participant and that such Participant agree to such further terms and
conditions as specified in such agreement or document. The grant of an Award
under this Plan shall not confer any rights upon the Participant holding such
Award other than such terms, and subject to such conditions, as are specified
in this Plan as being applicable to such type of Award (or to all Awards) or
as are expressly set forth in the agreement or other document evidencing such
Award.
9.5 Tandem Stock or Cash Rights. Either at the time an Award is granted or
by subsequent action, the Committee may, but need not, provide that an Award
shall contain as a term thereof, a right, either in tandem with the other
rights under the Award or as an alternative thereto, of the Participant to
receive, without payment to the Company, a number of Shares, cash or a
combination thereof, the amount of which is determined by reference to the
value of the Award.
9.6 Financing. The Committee may in its discretion provide financing to a
Participant in a principal amount sufficient to pay the purchase price of any
Award and/or to pay the amount of taxes required by law to be withheld with
respect to any Award. Any such loan shall be subject to all applicable legal
requirements and restrictions pertinent thereto, including without limitation,
Regulation G promulgated by the Federal Reserve Board. Neither the prior
financing of another Participant, nor the grant of an Award to a Participant,
shall obligate the Company or the Committee to provide any financing
whatsoever in connection with such grant.
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SECTION 10. CHANGES IN CAPITAL STRUCTURE
10.1 Corporate Actions Unimpaired. The existence of outstanding Awards shall
not affect in any way the right or power of the Company or its stockholders to
make or authorize any or all adjustments, recapitalizations, reorganizations,
exchanges, or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issuance of
common stock or other securities or subscription rights thereto, or any
issuance of bonds, debentures, preferred or prior preference stock ahead of or
affecting the common stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise. Further, except as herein expressly provided,
(i) the issuance by the Company of shares of stock of any class (including any
class of securities convertible into shares of stock of any class) for cash,
property, labor or services, upon direct sale, upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or obligations of
the Company convertible into such shares or other securities, (ii) the payment
of a dividend in property other than common stock, or (iii) the occurrence of
any similar transaction, and in any case whether or not for fair value, shall
not affect, and no adjustment by reason thereof shall be made with respect to,
the number of shares of common stock subject to Awards theretofore granted or
the purchase price per Share, unless the Committee shall determine in its
discretion that an adjustment is necessary.
10.2 Adjustments Upon Certain Events. If the outstanding shares of common
stock or other securities of the Company, or both, for which the Award is then
exercisable or as to which the Award is to be settled shall at any time be
changed or exchanged by declaration of a stock dividend, stock split,
combination of shares, recapitalization, or reorganization, the Committee may,
and if such event occurs after a Change in Control, the Committee shall,
appropriately and equitably adjust the number and kind of shares of common
stock or other securities which are subject to the Plan (including limitations
pursuant to the terms of the Plan) or subject to any Awards theretofore
granted, and the exercise or settlement prices of such Awards, provided,
however, that such adjustment shall be made only to the extent that such will
not affect the status of any Award intended to qualify as an ISO or as
"performance based compensation" under Section 162(m) of the Code. If the
Company recapitalizes or otherwise changes its capital structure, or merges,
consolidates, sells all of its assets or dissolves (each of the foregoing a
"Fundamental Change"), then thereafter upon any exercise of an Option
theretofore granted, the Participant shall be entitled to purchase under such
Option, in lieu of the number of shares of common stock as to which such
Option shall then be exercisable, the number and class of shares of stock and
securities to which the Participant would have been entitled pursuant to the
terms of the Fundamental Change if, immediately prior to such Fundamental
Change, the Participant had been the holder of record of the number of Shares
as to which such Option is then exercisable. No fractional interests shall be
issued under this Plan resulting from any adjustments.
SECTION 11. CHANGE OF CONTROL
11.1 Definitions. Unless the Committee provides otherwise,
For purposes of the Plan and Awards granted under the Plan, the term "Change
of Control" shall mean:
(i) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) or group of persons acting in concert (other than the Company
or any subsidiary thereof or any employee benefit plan of the Company or
any subsidiary thereof, or any underwriter in connection with a firm
commitment public offering of the Company's capital stock) becomes the
"beneficial owner" (as such term is defined in Rule 13d-3 of the Exchange
Act except that a person shall also be deemed the beneficial owner of all
securities which such person may have a right to acquire, whether or not
such right is presently exercisable), directly or indirectly, of securities
of the Company representing thirty percent (30%) or more of the combined
voting power of the Company's then outstanding securities ordinarily having
the right to vote in the election of directors ("voting stock");
(ii) during any period subsequent to the effective date of this Plan, a
majority of the members of the Board shall not for any reason be the
individuals who at the beginning of such period constitute the Board
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<PAGE>
or those persons who are nominated as new directors by a majority of the
current directors or their successors who have been so nominated;
(iii) there shall be consummated any merger, consolidation (including a
series of mergers or consolidations), or any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all,
or substantially all, of the assets of the Company (meaning assets
representing fifty percent (50%) or more of the net tangible assets of the
Company or generating fifty percent (50%) or more of the Company's
operating cash flow, in each case measured over the Company's last four
full fiscal quarters), or any other similar business combination or
transaction, but excluding any business combination or transaction which
would result in the voting stock of the Company immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting stock of the surviving entity) more than seventy
percent (70%) of the combined voting power of the voting stock of the
Company (or such surviving entity) outstanding immediately after giving
effect to such business combination or transaction;
(iv) the adoption of any plan or proposal for the liquidation or
dissolution of the Company;
(v) the occurrence of any other event that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A of the
Exchange Act as in effect on the date hereof; or
(vi) any other event specified by the Committee, regardless of whether at
the time an Award is granted or thereafter.
11.2 Effect of Change of Control. The Committee may provide, either at the
time an Award is granted or thereafter, that a Change in Control shall have
such effect as specified by the Committee, or no effect, as the Committee in
its discretion may provide. Without limiting the foregoing, the Committee may
but need not provide, either at the time an Award is granted or thereafter,
that if a Change in Control occurs, then effective as of a date selected by
the Committee, the Committee (which for purposes of the Changes in Control
described in (i), (ii) and (iii) above shall be the Committee as constituted
prior to the occurrence of such Change in Control) acting in its discretion
without the consent or approval of any Participant, may effect one or more of
the following alternatives or combination of alternatives with respect to all
outstanding Awards (which alternatives may be conditional on the occurrence of
such of the Changes in Control specified above and which may vary among
individual Participants):
(i) in the case of a Change in Control specified in clause (iii) of
Section 11.1, accelerate the time at which Options then outstanding may
vest or be exercised in full for a limited period of time on or before a
specified date (which will permit the Participant to participate with the
common stock received upon exercise of such Option in the event of a Change
in Control specified in clause (iii) of Section 11.1) fixed by the
Committee, after which specified date all unexercised Options and all
rights of Participants thereunder shall terminate,
(ii) accelerate the time at which Options then outstanding may be
exercised so that such Options may be exercised in full for their then
remaining term,
(iii) accelerate the vesting of Incentive Stock Awards, or
(iv) require the mandatory surrender to the Company of outstanding
Options or unvested Incentive Stock held by such Participant (irrespective
of whether such Options are then exercisable under the provisions of the
Plan) as of a date, before or not later than 60 days after such Change in
Control, specified by the Committee, and in such event the Committee shall
thereupon cancel such Options and unvested Incentive Stock and the Company
shall pay to each Participant an amount of cash equal to the excess of the
fair market value of the aggregate shares subject to such Option over the
aggregate Option exercise price of such shares or the fair market value of
the aggregate unvested shares of Incentive Stock, as applicable;
provided, however, the Committee shall not select an alternative (unless
consented to by the Participant) that would result in the Participant's owing
any money by virtue of operation of Section 16(b) of the Exchange Act. If all
such alternatives have such a result, the Committee shall take such action,
which is hereby authorized, to
31
<PAGE>
put such Participant in as close to the same position as such Participant
would have been in had the selected alternative been made but without
resulting in any payment by such Participant pursuant to Section 16(b) of the
Exchange Act. Notwithstanding the foregoing, with the consent of the
Participant, the Committee may in lieu of the foregoing make such provision
with respect of any Change in Control as it deems appropriate.
SECTION 12. TAXES
12.1 Withholding Requirements. The Committee may make such provisions or
impose such conditions as it may deem appropriate for the withholding or
payment by a Participant of any taxes that the Committee determines are
required in connection with any Award granted under this Plan, and a
Participant's rights in any Award are subject to satisfaction of such
conditions.
12.2 Payment of Withholding Taxes. Notwithstanding the terms of Section
12.1, the Committee may provide in the agreement or other document evidencing
an Award or otherwise that all or any portion of the taxes required to be
withheld by the Company or, if permitted by the Committee, desired to be paid
by the Participant, in connection with the exercise of a Nonqualified Option
or the exercise, vesting, settlement or transfer of any other Award shall be
paid or, at the election of the Participant, may be paid by the Company by
withholding shares of the Company's common stock otherwise issuable or subject
to such Award, or by the Participant delivering previously owned shares of the
Company's common stock, in each case having a fair market value equal to the
amount required or elected to be withheld or paid. Any such election is
subject to such conditions or procedures as may be established by the
Committee and may be subject to disapproval by the Committee.
SECTION 13. AMENDMENTS OR TERMINATION
(a) The Board may amend, alter or discontinue this Plan or any agreement or
other document evidencing an Award made under this Plan but, except as
provided pursuant to the anti-dilution adjustment provisions of Section 10.2,
no such amendment shall, without the approval of the stockholders of the
Company:
(i) increase the maximum number of shares of common stock of the Company
for which Awards may be granted under this Plan;
(ii) increase the Awards that may be granted under this Plan during any
calendar year to any one Eligible Person;
(iii) reduce the price at which Options may be granted below the price
provided for in Section 6.2;
(iv) reduce the exercise price of outstanding Options;
(v) extend the term of this Plan;
(vi) change the class of persons eligible to be Participants; or
(vii) increase the number of shares that are eligible for non-Option
Awards.
(b) The Board or Committee may amend, alter or discontinue this Plan or any
agreement or other document evidencing an Award made under this Plan but,
except as provided pursuant to the anti-dilution adjustment provisions of
Section 10.2, no such amendment shall impair the rights of any Participant
under an Award, without the consent of the Participant, provided however, that
no such consent shall be required if the Board or the Committee determines in
its discretion and prior to the date of any Change in Control that such
amendment or alteration is not reasonably likely to diminish the benefits
thereunder or that any diminution has been adequately compensated for.
32
<PAGE>
SECTION 14. COMPLIANCE WITH OTHER LAWS AND REGULATIONS
This Plan, the grant and exercise of Awards thereunder, and the obligation
of the Company to sell, issue or deliver Shares under any Awards, shall be
subject to all applicable federal, state and foreign laws, rules and
regulations and to such approvals by any governmental or regulatory agency as
may be required. The Company shall not be required to register in a
Participant's name or deliver any Shares prior to the completion of any
registration or qualification of such Shares under any federal, state or
foreign law or any ruling or regulation of any government body which the
Committee shall determine to be necessary or advisable. This Plan is intended
to constitute an unfunded arrangement for a select group of management or
other key employees and directors.
No Option shall be exercisable unless a registration statement with respect
to the Option is effective or the Company has determined that such
registration is unnecessary. Unless the Awards and Shares covered by this Plan
have been registered under the Securities Act of 1933, as amended, or the
Company has determined that such registration is unnecessary, each person
receiving an Award and/or Shares pursuant to any Award may be required by the
Company to give a representation in writing that such person is acquiring such
Shares for his or her own account for investment and not with a view to, or
for sale in connection with, the distribution of any part thereof.
SECTION 15. NO RIGHT TO COMPANY EMPLOYMENT
Nothing in this Plan or as a result of any Award granted pursuant to this
Plan shall confer on any individual any right to continue in the employ of the
Company or its affiliates or interfere in any way with the right of the
Company or its affiliates to terminate an individual's employment at any time.
The agreements or other documents evidencing Awards may contain such
provisions as the Committee may approve with reference to the effect of
approved leaves of absence.
SECTION 16. LIABILITY OF COMPANY
The Company and any affiliate of the Company which is in existence or
hereafter comes into existence shall not be liable to a Participant, an
Eligible Person or other persons as to:
(a) the non-issuance or sale of Shares as to which the Company has been
unable to obtain from any government or regulatory body having jurisdiction
the authority deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder; and
(b) any tax consequence expected, but not realized, by any Participant,
Eligible Person or other person due to the receipt, exercise or settlement
of any Option or other Award granted hereunder.
SECTION 17. EFFECTIVENESS AND EXPIRATION OF PLAN
This Plan shall be effective on the date the Company's stockholders adopt
this Plan; provided that if such approval by the stockholders of the Company
is not forthcoming, all Awards previously granted under this Plan shall be
void. No Awards shall be granted pursuant to this Plan more than 10 years
after the effective date of this Plan.
SECTION 18. NON-EXCLUSIVITY OF PLAN
Neither the adoption of this Plan by the Board nor the submission of this
Plan to the stockholders of the Company for approval shall be construed as
creating any limitations on the power of the Board or the Committee to adopt
such other incentive arrangements as either may deem desirable, including
without limitation, the granting of restricted stock or stock options
otherwise than under this Plan, and such arrangements may be either generally
applicable or applicable only in specific cases.
33
<PAGE>
SECTION 19. GOVERNING LAW
This Plan and any agreements or other documents hereunder shall be
interpreted and construed in accordance with the laws of the State of Delaware
and applicable federal law. The Committee may provide that any dispute as to
any Award shall be presented and determined in such forum as the Committee may
specify, including through binding arbitration. Any reference in this Plan or
in the agreement or other document evidencing any Award to a provision of law
or to a rule or regulation shall be deemed to include any successor law, rule
or regulation of similar effect or applicability.
34
<PAGE>
The Annual Meeting of Stockholders of
Standard Pacific Corp.
will be held at
Wyndham Garden Hotel
3350 Avenue of the Arts
Costa Mesa, CA 92626
on
May 18, 2000
10:30 A.M., Local Time
FROM LOS ANGELES: Take the 405 South exit Bristol St., turn left. Turn right
onto Anton Blvd. Proceed to Avenue of the Arts and turn left.
FROM SAN DIEGO: Take the 405 North exit Bristol St., turn right. Turn right
onto Anton Blvd. Proceed to Avenue of the Arts and turn left.
FROM JOHN WAYNE AIRPORT: Upon exiting the airport, turn left on MacArthur
Blvd. Turn left onto Main Street. Turn left onto Sunflower Avenue. Proceed to
Avenue of the Arts and turn left.
[MAP OF ANNUAL MEETING LOCATION APPEARS HERE]
<PAGE>
[X] Please mark your votes as in this example.
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
Unless otherwise specified, this proxy will be voted FOR each proposal of the Company listed below.
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FOR all Nominees listed (except WITHHOLD authority to vote
as marked to the contrary below) for all nominees Nominees:
01. Ronald R. Foell
1. Election of 02. Michael C. Cortney
Three Directors. [_] [_] 03. Jeffrey V. Peterson
To withhold authority to vote for any nominee(s), write the name(s) of such nominee(s) in the space provided below.
- -------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
FOR AGAINST WITHHOLD
2. Approval of the Company's Amended and Restated
Management Incentive Bonus Plan. [_] [_] [_]
3. Approval of the Company's 2000 Stock Incentive Plan [_] [_] [_]
4. In their discretion, to transact such other business as
may properly come before the meeting. [_] [_] [_]
</TABLE>
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 APPEARS HERE]
Proxy Voting Instruction Card
Dear Stockholder:
Your vote is important. Please consider the issues discussed in the proxy
statement and cast your vote by:
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.
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.
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 18,
2000. 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.
STANDARD PACIFIC CORP.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE COMPANY FOR THE ANNUAL MEETING MAY 18, 2000
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, 1999; and, revoking any proxy previously given, hereby constitutes
and appoints Arthur E. Svendsen, Stephen J. Scarborough and Andrew H. Parnes,
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 Wyndham Garden Hotel, 3350 Avenue of the Arts,
Costa Mesa, California, on Thursday, May 18, 2000, at 10:30 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
v FOLD AND DETACH HERE v
The Annual Meeting of Stockholders of
Standard Pacific Corp.
Will be held at:
Wyndham Garden Hotel
3350 Avenue of the Arts
Costa Mesa, California
May 18, 2000
10:30 A.M., Local Time
