A majority of Standard Pacific Homes' stockholders voted Tuesday, Dec. 11, to allow the company to double the number of common shares it can issue from 100 million to 200 million. More than 90% of the company's shareholders approved the proxy.
The Irvine, Calif.-based company asked for the approval, saying it is running short of shares available for general corporate purposes and that it has no current plans for the new shares. The company said 72.8 million of the 100 million shares it was authorized to issue without shareholder approval were already outstanding, and another 20.4 million shares are reserved to be issued as part of the company's equity incentive plans and in case the buyers of $100 million in recently issued convertible bonds convert them into stock. That left roughly 6.8 million shares available for future needs.
"Our board believes that the number of shares of Standard Pacific common stock presently available for future issuance under our certificate is insufficient to provide the board with the flexibility in issuing shares for general corporate purposes," the company stated in its proposal, which was filed with the Securities and Exchange Commission on Oct. 25.
It said the extra shares might be needed for a number of corporate purposes including potential equity and convertible debt financings, acquisitions, equity incentives for employees, payments of stock dividends, or stock splits. But, "We do not have any current plans or intentions with respect to issuances of the additional authorized shares," the SEC document said.
In addition, some extra ready-to-issue shares might be come in handy to discourage a takeover attempt. They would be necessary in case the board should decide to enact a poison pill provision.
"However, our board does not intend or view the proposed increase in authorized common stock as an anti-takeover measure and is not proposing the increase in response to any attempt or plan to obtain control of the company," the proposal said.