A string of former Standard Pacific Homes executives, including former CEO Stephen J. Scarborough, have taken issue with the terms of their terminations during the company's massive downsizing over the past year.
Scarborough, along with former Standard Pacific senior vice president Jari Kartozian, filed arbitration complaints saying they weren't given what they were due. Two other executives recently settled complaints about their severance packages.
In an arbitration claim in California, Scarborough alleges he is owed $23 million in benefits in connection with his termination in March 2008. It was billed by management at the time as a retirement.
In his claim, Scarborough alleges that by not paying him approximately $23 million in benefits in connection with his termination a year ago, Standard Pacific violated the terms of his change of control agreement with the company, the company said in a filing with the U.S. Securities and Exchange Commission last fall.
Scarborough also alleges that the termination of his employment was wrongful and that he was "fraudulently induced" to sign the termination agreement.
"The company believes these claims are without merit and has filed a response to the complaint, denying all of the material allegations and setting forth a number of affirmative defenses," the SEC filing says.
Kartozian, who also initiated an arbitration hearing, claims she is owed $1.2 million in connection with her termination in May 2008. She claims that her employment agreements were also not honored and that she was the victim of age discrimination. She, too, claims she was fraudulently induced to sign the agreement.
Standard Pacific issued the same response to Kartozian's claim as it did for Scarborough's that it is without merit.
Two other executives, Andrew H. Parnes, who was executive vice president and CFO before his resignation, and Clay A. Halvorsen, former executive vice president, general counsel, and secretary, recently settled their termination disputes with Standard Pacific.
The pair, who resigned just a few weeks ago, settled for 57% of the maximum amount they could have claimed they were owed under their 2008 bonus and change in control agreements, the company said.
Parnes' settlement includes a lump-sum payment of $2.4 million, reimbursement for up to 24 months of COBRA insurance payments, up to 90 days to exercise any vested stock options, and $60,577 in unpaid vacation time. He also gets to keep the company BlackBerry, but he has to pay for the service himself.
Halvorsen's settlement is the same except his lump-sum payment is for $1.55 million, and his unpaid vacation time adds up to $50,770.
When Scarborough left last March, his severance included a "lump-sum severance payment" of $1.25 million in lieu of any salary, bonus, or equity and other compensation for 2008.
In addition, his 42,000 shares of restricted stock, which would not have vested until 2009 and 2010, were immediately vested as were 280,000 stock options that would not have vested until 2010 and 2011.
Also, the company agreed to pay his COBRA insurance premiums through February 2011, pay him $109,611.19 in unused vacation time, release him from certain claims, and not disparage him. He, too, got to keep his cell phone.