Standard Pacific Homes president and CEO Kenneth L. Campbell has made a commitment to stick with the company for a while.
He has resigned from his job as a partner at MatlinPatterson Global Advisors, the private equity fund that infused the builder with $580 million in capital last summer. His New York City apartment is for sale. His wife is looking for a new home in California, Standard Pacific's home state. And he's getting a paycheck from Standard Pacific as of June 1.
"I think this business is going to do quite well--and I always go for the easiest path to success, so prospects here must be good," Campbell joked, responding by e-mail to a question about his new employment agreement filed Monday with the U.S. Securities and Exchange Commission.
More seriously, Campbell added that the move marks a more extensive investment by MatlinPatterson in the company
"This is MP's biggest investment, and they are likely to increase it," he wrote. "We felt that it would be best for me to continue to devote my time to this since it is such a big part of their total portfolio."
It's not an unusual arrangement for MatlinPatterson, he said. "The last two companies that I turned around for them I did as an employee of the companies."
Campbell, 50, has spent more than 20 years in restructuring roles at companies with significant operational and/or financial difficulties. He parachuted into the hot seat at the Irvine, Calif.-based company in December, replacing Jeffrey V. Peterson, who stepped up from the company's board of directors into the CEO position in March 2008 after the retirement of longtime CEO Stephen J. Scarborough.
Campbell immediately began a major restructuring of the company, making massive cuts to staff and replacing higher-paid, more-experienced executives with less-expensive, eager younger ones, saying the company needed to shrink itself to fit the much smaller home building market.
Until Monday, the outspoken executive was paid by MatlinPatterson for his work. Standard Pacific only picked up his business expenses. But now Campbell has a contract through the end of 2012 with an annual base salary of $850,000 a year. As are other executives, he's got health and welfare benefits and access to future executive bonus programs.
The agreement provides for a sign-on award of $1.7 million payable in two installments, one at the end of 2009 and the other at the end of 2010 if he's still employed by the company then.
There are stock options for up to 6 million shares as well. He may purchase 1 million at fair market price June 1 (the stock closed at $2.44 a share); 2 million equal to the greater of fair market value on June 1 and $3.05; and 3 million shares with an exercise price at equal to the greater of $4.10 on that date.
One-quarter of each tranch will vest on issuance with a quarter more vesting on June 1, 2010, 2011, and 2012, if he is still an employee on those dates.