Investment
Office
P.O. Box
2749
Sacramento,
CA 95812-2749
Telecommunications
Device for the Deaf - (916) 795-3240
Telephone: (916) 795-2731; Fax (916) 795-2842
April 10,
2008
Dear
Shareowner of Standard Pacific Corporation:
VOTE FOR PROPOSAL #3 TO
DECLASSIFY STANDARD PACIFIC’S BOARD
I am
writing to you on behalf of the California Public Employees’ Retirement System
(CalPERS). CalPERS is the largest public pension system in the U.S.,
with approximately $240 billion in assets. CalPERS is a significant long-term
shareowner of Standard Pacific Corporation owning approximately 386,296 shares.
We seek your support on Proposal #3, a non-binding proposal asking Standard
Pacific to take the steps necessary to declassify the board of directors at the
Company’s May 14, 2008 annual meeting.
STANDARD PACIFIC’S ABYSMAL
1, 3, & 5 YEAR UNDERPERFORMANCE
Standard
Pacific was named to CalPERS’ 2008 Focus List due to poor stock performance and
a sub-par governance structure. The table below clearly demonstrates Standard
Pacific’s underperformance relative to the Russell 3000 Index and its industry
peer index over the 1, 3, and 5 year periods ending March 31, 2008:
|
Time period
ending
3/31/2008
|
Standard
Pacific Corp
(SPF)
|
Russell 3000
Index
|
Relative
Return
SPF to Russell
3000 Index
|
Homebuilding
Russell
Industry
Peer Index
|
Relative
Return
SPF to Russell
Peer
Index
|
|
5 years
|
-60.76%
|
76.77%
|
-137.53%
|
22.20%
|
-83.0%
|
|
3 years
|
-86.32%
|
19.45%
|
-105.78%
|
-54.96%
|
-31.36%
|
|
1 year
|
-76.58%
|
-6.06%
|
-70.52%
|
-37.09%
|
-39.49%
|
Source: FactSet
STANDARD PACIFIC BOARD
EXTREMELY ENTRENCHED
|
|
·
|
Standard
Pacific refuses to seek shareholder approval to remove its classified
board.
|
|
|
·
|
Standard
Pacific refuses to seek shareholder approval to remove 80% supermajority
voting requirements in the bylaws and articles of
incorporation.
|
|
|
·
|
Standard
Pacific refuses to implement a majority voting standard for director
elections.
|
|
|
·
|
Standard
Pacific has a poison pill that is not approved by
shareowners.
|
|
|
·
|
Shareowners
may not remove directors without
cause.
|
|
|
·
|
Shareowners
may not call special meetings or act by written
consent.
|
IMPROVED GOVERNANCE
PRACTICES LEAD TO IMPROVED FINANCIAL PERFORMANCE
As a long
term shareowner, CalPERS is very concerned with the Company’s accountability to
its shareowners and its commitment to good corporate governance. We
believe such accountability as evidenced by governance practices is closely
related to financial performance.
|
|
·
|
Harvard
Professor Lucian Bebchuk and associates published a study in September
20041 which found that companies with
staggered boards, poison pills, supermajority voting requirements and
golden parachutes deliver less shareholder value than those companies that
do not have such measures in place. Standard Pacific currently employs
each of these value destroying anti-takeover
measures.
|
VOTE FOR PROPOSAL #3, ANNUAL
ELECTION OF ALL DIRECTORS
We urge
you to vote FOR
proposal #3, a non-binding request that Standard Pacific take the steps
necessary to declassify the board and provide for the annual election of
directors.
Sincerely,
Dennis
Johnson, CFA
Senior
Portfolio Manager
Please
refer to the proxy statement for more information or call Garland Associates,
Inc. who is assisting us with this effort at (561) 366-1165 if you have any
questions or need assistance in voting your shares.
PLEASE NOTE: The cost of this
solicitation is being borne entirely by CalPERS and is being done through the
use of the mail and telephone communication. CalPERS is not asking for your
proxy card. Please do not send us your proxy card but return it to
Standard Pacific Corporation.
|
|
1
Lucian Bebchuk, Alma Cohen &
Allen Ferrell, “What Matters in Corporate Governance?” Harvard Law School,
Discussion Paper No. 491 (09/2004, revised 03/2005).
California
Public Employees’ Retirement System
Lincoln
Plaza East - 400 Q Street, Suite E4800 - Sacramento,
CA 95811