EXHIBIT 10.4
Standard Pacific
Corp.
Performance Share Award
Agreement
This Performance Share Award
Agreement (this “ Agreement ”) has been entered
into as of this
day of
200 by and between Standard Pacific Corp. (the
“ Corporation ”) and «Full_Name» (the
“ Executive ”). All capitalized terms in this
Agreement shall have the meaning assigned to them in this Agreement
or in the Standard Pacific Corp.
Plan (the “ Plan ”).
1. Award . On
, 200 , the
Compensation Committee (the “ Compensation Committee
”) of the Corporation’s Board of Directors (the “
Board ”) or the Board granted the Executive a
performance award (the “ Award ”) under
Section 8 of the Plan. Pursuant to the terms of the Award,
the Corporation shall issue the Executive shares of common stock of
the Corporation (the “ Common Stock ”) based on
a comparison of the Corporation’s return on equity to a
target established by the Compensation Committee. The target number
of shares of Common Stock to be issued pursuant to the Award is
«Award» shares (the “ Target ”). No
more than «Max» shares (the “ Maximum
”) of Common Stock may be issued pursuant to the
Award.
2. Shares Issued Pursuant to
the Award .
(a) The number of shares of Common
Stock that shall be issued pursuant to the Award (the “
Performance Shares ”) shall be determined based on the
Corporation’s actual Return on Equity (as defined in Section
2(c)) for the 200_ fiscal year (the “ Actual Return on
Equity ”) as compared to its targeted Return on Equity
(the “ Targeted Return on Equity ”). The
Targeted Return on Equity shall be established by the Compensation
Committee before the end of the first quarter of the 200_ fiscal
year and shall be communicated to the Executive in writing. The
Actual Return on Equity shall be calculated promptly after the
Audit Committee of the Board approves the financial statements for
the 200_ fiscal year (the “ Determination Date
”). If the Actual Return on Equity is 100% of the Targeted
Return on Equity, the Executive may be issued the Target number of
Performance Shares. For each 1% the Actual Return on Equity is
either above or below the Targeted Return on Equity (i.e., Actual
Return on Equity divided by Targeted Return on Equity), the number
of Performance Shares that the Executive may be issued pursuant to
the Award shall be increased or reduced by 1.5%; provided, however,
that (i) in no event will more than the Maximum number of
Performance Shares be issued and (ii) if the Actual Return on
Equity is equal to or less than 70% of the Targeted Return on
Equity, no Performance Shares will be issued.
(b) In the event a Change of Control
occurs after
, 200_ but
prior to the Determination Date, the Executive shall immediately be
issued that number of Performance Shares equal to the Target number
of Performance Shares. Notwithstanding anything contained in
Section 2(c) , these Shares will be fully vested upon
issuance.
(c) Except in the case a Change of
Control occurs prior to the Determination Date, the Compensation
Committee has the authority to reduce the number of Performance
Shares issued pursuant to this Award by up to 25% of the Target
number of Performance Shares based upon the Compensation
Committee’s subjective evaluation of the effectiveness of the
Corporation’s management during the 200_ fiscal year. Any
adjustment must be made within ten business days of the
Determination Date. The number of shares of
Common Stock issued pursuant to the
Award following all determinations and adjustments, if any, shall
be referred to as the “ Shares .” The Shares
shall automatically be issued on the eleventh business day
following the Determination Date (the “ Issue Date
”) and shall be held in escrow by the Corporation until such
Shares vest; provided, however, that no Shares will be issued if
Executive has not been continuously employed by the Corporation
from the date of the Award to the Issue Date.
(d) “ Return on Equity
” shall mean consolidated net income divided by average
stockholders equity, each calculated in accordance with generally
accepted accounting principles and consistent with the
Corporation’s audited financial statements. Average
stockholders equity shall mean (i) the sum of stockholders equity
at the beginning of the calendar year plus stockholders equity at
the end of each calendar quarter during the calendar year (ii)
divided by five.
3. Vesting of Shares .
One third of the Shares shall be vested immediately upon issuance.
Upon each of the next two anniversaries of the Issue Date, one
third of the Shares shall vest provided that the Executive has been
continuously employed by the Corporation since the Issue Date.
Shares that do not vest shall automatically be cancelled.
Notwithstanding anything contained in this Agreement to the
contrary, in the event a Change of Control occurs following the
Determination Date but prior to the Issue Date, the Shares shall
immediately be issued to the Executive and in the event a Change of
Control occurs following the Determination Date, the Shares shall
immediately vest in full.
4. Restrictions on
Resale . Except as contemplated by Section 6 , the
Executive may not transfer the Shares until the earlier of (a)
, 200_ [
three years after grant date ] or (b) the date the
Executive’s employment with the Corporation terminates for
any reason or no reason. The Corporation may impose the following
restrictions, conditions and limitations to the timing and manner
of any resales by the Executive or other subsequent transfers by
the Executive of any Shares: (i) restrictions under an insider
trading policy, (ii) restrictions designed to delay and/or
coordinate the timing and manner of sales by the Executive and
other security holders and (iii) restrictions as to the use of a
specified brokerage firm for such resales or other transfers.
The Executive hereby acknowledges that, to the extent he or she
is an “affiliate” of the Corporation (as that term is
defined in Rule 144 promulgated under the Securities Act of 1933,
as amended) or to the extent that the Shares have not been
registered under the Securities Act of 1933, as amended, or
applicable state securities laws, the Shares are subject to, and
the certificates representing the Shares shall be legended to
reflect, certain trading restrictions under applicable securities
laws (including particularly the Securities and Exchange
Commission’s Rule 144), and the Executive hereby agrees to
comply with all such restrictions and to execute such documents or
take such other actions as the Corporation may require in
connection with such restrictions including, without limitation,
obtaining a legal opinion, in a form satisfactory to the
Corporation, that such Shares will not be transferred other than in
compliance with all applicable securities laws and
regulations.
2
5. Escrow of the Shares
.
(a) Shares Held by
Corporation . Except as contemplated by Section 6
, following the issuance of the Shares as contemplated by
Section 2(c) , the Shares will be held by the Corporation or
its agent pending release following expiration of the restrictions
on resale set forth in Section 4 . The Corporation may
cancel all or any portion of the Shares without further action by
Executive if the Shares are forfeited or otherwise required to be
transferred back to the Corporation pursuant to the terms of this
Agreement.
(b) Release of Shares from
Escrow . The Corporation will release the Shares to Executive
as such Shares become free of the restrictions on resale set forth
in Section 4 ; provided, that, Executive has paid to the
Corporation an amount sufficient (or the Corporation has
repurchased a sufficient number of Shares) to satisfy any taxes or
other amounts required by any governmental entity to be withheld
and paid over to such governmental entity for Executive’s
account.
6. Tax Elections and
Withholding .
(a) Acknowledgment. Executive
acknowledges that he or she (i) has received tax advice
fr
