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Exhibit
10.1
RETIREMENT
AGREEMENT
This Retirement Agreement
(this “ Agreement ”) is entered into effective
as of March 20, 2008 by and between Standard Pacific Corp., a
Delaware corporation (the “ Company ”), and
Stephen J. Scarborough (“ Executive
”).
WHEREAS, Executive has been a
valued employee of the Company for over twenty-seven years, most
recently serving as Chairman of the Board of Directors, Chief
Executive Officer and President of the Company;
WHEREAS, Executive is
retiring from the Company and is resigning from his director,
officer and employee positions with the Company and each of its
subsidiaries and other affiliates;
NOW, THEREFORE, in
consideration of the foregoing premises and the covenants contained
in this Agreement, the Company and Executive agree as
follows:
1. Retirement.
Executive hereby confirms his resignation and retirement as an
employee, Chief Executive Officer, President, and Chairman of the
Board of Directors of the Company, effective as of March 20,
2008 (the “ Effective Date ”). Effective as of
the Effective Date, Executive also hereby confirms his resignation
and retirement from all positions held as an employee, officer, or
director of any subsidiary or affiliate of the Company.
2. Consideration. In
return for the release described below and Executive’s other
promises contained herein, the Company agrees as
follows:
(a) Acceleration of
Restricted Stock Vesting. Two-thirds of the
February 19, 2008 restricted stock grant (42,000 shares) made
to Executive in accordance with the Company’s Performance
Share Award Program will not have vested as of the Effective Date.
The Performance Share Award agreement between the Company and
Executive provides that Executive must be continuously employed by
the Company through the vesting date in order for the shares to
vest and shares that do not vest will automatically be cancelled.
Notwithstanding the foregoing, as of the Effective Date, all of
Executive’s 42,000 remaining unvested shares shall
immediately vest and all restrictions on resale of such shares
imposed by the Company shall lapse.
(b) Acceleration of
Selected Stock Option Vesting. Options to acquire an
aggregate of 280,000 shares of Company common stock were issued to
Executive on February 7, 2008. All of these options will not
have vested as of the Effective Date (the “Unvested
Options”). The applicable stock option agreements between the
Company and Executive provide that Executive must be continuously
employed by the Company through the vesting date in order for the
Unvested Options to vest and options that do not vest will be
automatically cancelled. Notwithstanding the foregoing, as of the
Effective Date, the Unvested Options shall immediately
vest.
(c) Extension of Vested
Option Exercise Period. Under the terms of
Executive’s stock option agreements with the Company,
Executive will have 90 days following the Effective Date to
exercise vested options. Notwithstanding the foregoing, as of the
Effective Date, the
Company shall extend the time period for
Executive to exercise all options vested as of the Effective Date,
including options vested pursuant to Section 2(b) ,
above, to the close of business on April 1, 2010, unless such
options expire on an earlier date, in which case, the time period
for the exercise of such options shall be extended only to such
earlier expiration date. Vested options that are not subject to an
earlier expiration date unexercised as of the close of business on
April 1, 2010 shall terminate. Vested options subject to an
expiration date earlier than April 1, 2010 unexercised as of
such earlier expiration date shall terminate on such earlier
expiration date. Executive understands and acknowledges that
options originally issued as incentive stock options may lose the
ability to qualify as incentive stock options as a result of this
extension of the option exercise period.
(d) Continuation of
Financial Planning Benefit. Executive shall be entitled to
continuation of the Company’s AYCO financial planning benefit
through June 30, 2009.
(e) Severance.
Executive shall receive a single lump sum severance payment of
$1,250,000. This payment shall be made to Executive within six
(6) days of the Effective Date. Except as provided in this
Agreement, Executive acknowledges that he is not entitled to, and
shall not receive, any salary, bonus, equity compensation or other
compensation for 2008.
(f) COBRA/Cal-COBRA
Payments . The Company shall reimburse Executive for his
monthly COBRA/Cal-COBRA medical payments for a period of thirty-six
months following the effective date (March 31, 2011) provided he
exercises his right to continue his medical insurance pursuant to
COBRA/Cal-COBRA.
3. Benefits; Company
Property; Vacation; Expenses.
(a) Termination of
Benefits. All perquisites and employee benefits and
Executive’s participation in all employee benefit programs of
the Company which are not described herein (other than
Executive’s rights under COBRA/Cal-COBRA, rights under the
Company’s deferred compensation plans and the Company’s
401(K) plan) will terminate effective on the Effective
Date.
(b) Return of Company
Property. On the Effective Date, Executive’s
privileges under all Company credit cards will cease and Executive
will be obligated to return to the Company all property of the
Company, except that Executive shall be entitled to retain his
cellular telephone.
(c) Payout of Accrued
Unused Vacation Time. On the Effective Date, Executive
shall be entitled to receive payment of Executive’s accrued
unused vacation. As of March 20, 2008, this amount totaled
$109,611.19.
(d) Reimbursement of
Business Expenses. Executive shall be entitled to receive
reimbursement for all properly documented business expenses
incurred prior to the Effective Date. Executive agrees to submit
proper documentation of all such expenses no later than
April 30, 2008. The Company shall provide reimbursement within
30 days of receipt of Executive’s properly documented
business expenses.
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(e) Withholding and
Taxes. All amounts required to be paid by the Company
hereunder shall be subject to any and all applicable withholdings,
including any withholdings for any related federal, state or local
taxes. Executive shall be responsible for any and all income taxes
or other taxes incurred by Executive as a result of his receipt of
any compensation received from the Company pursuant to the terms of
this Agreement.
4. Nondisclosure;
Non-Disparagement; Non-Solicitation.
(a)
Nondisclosure. Executive acknowledges that in the
course of his employment with the Company, certain factual and
strategic information specifically related to the Company and its
affiliates has been disclosed to him in confidence (“
Company Information ”). Executive agrees to keep such
Company Information confidential, not to make use of such
information on his own behalf or for any other purpose, and to
return all tangible forms of such information to the Company no
later than ten (10) days following the Effective
Date.
(b)
Non-Disparagement .
i. Executive shall not
disparage the Company, its officers, directors, employees, agents,
subsidiaries, or affiliates, or publish, republish, comment upon,
or otherwise disseminate: (A) any claims made by him against
the Company; (B) any other comments suggesting or otherwise
accusing the Company or its agents or employees of any act of
discrimination, misconduct, other negative behavior or any breach
of any agreements. Nothing in this provision shall be construed to
prevent Executive from giving truthful testimony
pursuant
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