COMPENSATION COMMITTEE

The Compensation Committee represents the board of directors in discharging its responsibilities relating to the oversight of compensation paid to Company employees and executives.


CHARTER

This charter sets forth the authority and responsibility of the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Standard Pacific Corp. (the “Company”).

I. PURPOSES AND AUTHORITY
The Committee shall provide assistance to the Board of Directors in fulfilling its responsibilities to achieve the Company’s business purposes and to maximize the long-term total return to stockholders by ensuring that officers, directors and employees are compensated in accordance with the Company’s compensation philosophy, objectives and policies. The Committee shall review and approve compensation and benefits policies, strategies and pay levels necessary to support corporate objectives. The Committee may:
- Utilize Company staff to assist on projects from time to time;
- Consult with the CEO and other members of senior management as it determines necessary;
- Engage the assistance of outside consultants to assist in determining and establishing compensation policies; and
- Authorize independent studies of corporate compensation and benefits of comparable companies.

The Committee will primarily fulfill these responsibilities by carrying out the activities listed below in Section V of this charter. Subject to any restrictions or limitations on the delegation of power and authority imposed by the rules or regulations promulgated by the Securities and Exchange Commission, the New York Stock Exchange, or other regulatory authority, or by applicable law, the Committee shall have and may exercise all the powers and authority of the Board reasonably necessary or advisable for the Committee to effectuate its purposes and perform its responsibilities as set forth in this Section I and Section V of this charter.

II. COMPOSITION
The Committee shall be appointed annually to serve at the pleasure of the Board and will be comprised of not less than three members of the Board who are “independent directors” for purposes of New York Stock Exchange rules, Section 162(m) of the Internal Revenue Code and Securities Exchange Commission Rule 16b-3. The Board shall designate one member of the Committee to serve as Chairman. Vacancies in the Committee may be filled at any meeting of the Board.

III. MEETINGS
The Committee shall meet at least four times per year, or more frequently as circumstances dictate. Regular meetings of the Committee may be held without call or notice at such times and places as the Committee from time to time may fix. Special meetings of the Committee may be called by the Chairman of the Committee or by the Secretary of the Company when requested to do so by any two members of the Committee. Notice shall be given in the same manner as notice of special meetings of the Board.

Meetings may include participation by Company management and independent compensation consultants as determined necessary by the Committee.

Any action required or permitted to be taken at any meeting of the Committee may be taken without a meeting if consent in writing is given thereto by all members of the Committee and such consent is filed with the minutes.

Minutes of the meetings of the Committee will be prepared promptly by the Secretary of the Company or a delegate. The Secretary shall cause to be kept in the minute books of the Company the minutes of the meetings of the Committee. These minutes shall be made available to the members of the Board from time to time for their information.

IV. QUORUM
A majority of the members of the Committee, but no fewer than two persons, shall constitute a quorum for the transaction of business at any meeting of the Committee. Any action of the Committee to be effective must be authorized by the affirmative vote of a majority of the members thereof present and in any event shall require not less than two affirmative votes.

V. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties the Committee shall:

1. Assist the Company in defining an executive total compensation policy that:
- Supports the Company’s overall strategy and objectives
- Attracts and retains key executives
- Links total compensation to financial performance and the attainment of strategic objectives
- Provides competitive total compensation opportunities at a reasonable cost while enhancing the ability to fulfill the Company’s objectives.

2. Act on behalf of the Board of Directors in:
- Setting compensation policy
- Administering compensation plans
- Making decisions on the compensation of key company executives (including the review and approval of merit/other compensation budgets and payouts under incentive plans.)

3. Review and approve the following with respect to the CEO and other Executive Officers:
- Annual base salary levels
- Annual incentive opportunity levels
- Perquisites
- Employment agreements (when and if appropriate)
- Benefits and supplemental benefits.
4. Annually appraise the performance of the CEO and provide developmental feedback to the CEO and, when appropriate, to other Executive Officers of the Company.

5. Annually evaluate CEO and, when appropriate, other Executive Officers compensation levels and payouts against:
- Pre-established measurable performance goals and objectives
- An appropriate comparator group.

6. Review and comment on the Company’s strategic and financial plans to determine their relationship to the compensation program.

7. Review and approve new compensation plans that are consistent with compensation policy and monitor the appropriateness and effectives of such plans.

8. Draw clear lines of authority, responsibility and coordination between the Committee and other Board committees, as appropriate and necessary.

9. Review the management succession program and coordinate closely with the Nominating and Corporate Governance Committee on succession planning.

10. Recommend pay levels for Board Members including retainers, fees, benefits and perquisites for vote by the full Board.

11. In coordination with the Audit and other committees, review and approve in advance the contents of SEC and other regulatory filings relating to compensation matters (including preparation of the proxy statement’s Compensation Committee Report and disclosure of compensation elements in the annual report).

12. Ensure the total compensation program and practices of the Company are designed with full consideration of all tax, accounting, legal and regulatory requirements (including 162(m)) and are of the highest quality.

13. Keep abreast of current developments in executive compensation and employee compensation practices outside the Company.

14. Report to the Board following meetings of the Committee and perform any other activities consistent with this charter, the Company’s Certificate of Incorporation and Bylaws and governing law as the Committee or the Board deems necessary or appropriate.