DreamWorks Animation SKG Inc. said Tuesday that Microsoft Corp. co-founder Paul Allen plans to sell up to 12 million shares of the company’s stock.

The Glendale company, which created the “Shrek” franchise, said Allen’s investment vehicle, Vulcan Inc., would sell 10 million to 12 million of its shares in a registered public offering through brokerages Goldman Sachs & Co. and Bear Stearns & Co and will sell $150 million-worth back to DreamWorks. Allen is also stepping down form the studio’s board.

The sales will leave Allen with about 6 million to 7 million shares, or about 7 percent of the company, which is below the required holding needed for him to retain a seat on the board of directors. This is all part of an agreement struck when DreamWorks went public in 2004. At one point, Allen owned about 20 percent of the 104 million shares in DreamWorks.

Allen originally invested $700 million and has been slowly divesting his DreamWorks stake. Allen sold 12 million shares in November. The original investment has paid off for Allen, reports said.

Shares in DreamWorks were down $1.82 or 5.5 percent to $32.15 in afternoon trading Tuesday on the New York Stock Exchange.