The Audit Committee represents the board of directors in discharging its responsibilities relating to the accounting, reporting, and financial practices of the Company and its subsidiaries.


This charter sets forth the authority and responsibility of the Audit Committee of the Board of Directors of Standard Pacific Corp. (the "Company").

The primary purposes of the Audit Committee are to:
- assist the Board of Directors in fulfilling its oversight responsibilities to the stockholders of the Company relating to:
-- the integrity of the Company's financial statements, including disclosure controls and procedures;
-- the Company's compliance with legal and regulatory requirements;
-- the independent auditor's qualifications and independence; and
-- the performance of the Company's internal audit function and internal controls and the Company's independent auditors; and
- prepare the report that Securities and Exchange Commission ("SEC") rules require to be included in Company's annual proxy statement.

The Audit 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 SEC, the New York Stock Exchange ("NYSE") or other regulatory authority, or by applicable law, the Audit Committee shall have and may exercise all the powers and authority of the Board of Directors reasonably necessary or advisable for the Audit Committee to effectuate its purposes and perform its responsibilities as set forth in this Section I and Section V of this Charter.

The Audit Committee will be appointed annually to serve at the pleasure of the Board of Directors and will be comprised of not less than three Directors. The Board of Directors shall designate one member of the Audit Committee to be Chair. Vacancies in the Audit Committee may be filled at any meeting of the Board of Directors.
Each member of the Audit Committee shall be independent and free from any relationship that, in the opinion of the Board of Directors, would interfere with the exercise of independent judgment as a member of the Audit Committee. For purposes of determining Director independence, the term "independent" shall mean a Director who meets the definition of "independence" for members of an audit committee set forth in the Listed Company Manual of the NYSE and Section 10(A)(m)(3) of the Securities Exchange Act of 1934, as amended. All members of the Audit Committee shall have a working familiarity with basic finance and accounting practices, and at least one member of the Audit Committee shall be a "financial expert," as defined in rules promulgated by the SEC. Audit Committee members are encouraged to enhance their familiarity with finance and accounting by participating in educational programs conducted by the Company or outside services.
No member of the Audit Committee shall serve simultaneously on the audit committee of more than three public companies (including the Company).

The Audit Committee shall meet at least four times annually, or more frequently as circumstances dictate. Regular meetings of the Audit Committee may be held without call or notice at such times and places as the Audit Committee from time to time may fix. Special meetings of the Audit Committee may be called by the Chairman of the Audit Committee or by the Secretary of the Company when requested to do so by any two members of the Audit Committee or by the Company's independent or internal auditors. Notice shall be given in the same manner as notice of special meetings of the Board of Directors. Any action required or permitted to be taken at any meeting of the Audit Committee may be taken without a meeting if consent in writing is given thereto by all members of the Audit Committee and such consent is filed with the minutes.
Minutes of the meetings of the Audit 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 Audit Committee. These minutes shall be made available to the members of the Board of Directors from time to time for their information.

A majority of the members of the Audit Committee, but no fewer than two persons, shall constitute a quorum for the transaction of business at any meeting of the Audit Committee. Any action of the Audit 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.

To fulfill its responsibilities and duties the Audit Committee shall:

Meet and Review Documents/Reports
1. Review and, as appropriate, update this Charter at least annually.
2. Review and discuss with management and the independent auditors the Company's annual and quarterly financial statements and annual and quarterly reports on Forms 10-K and 10 Q, respectively, prior to filing each such report, including the Company's disclosures under "Management's Discussion and Analysis of Financial Condition and Results of Operations" and any certification, report, opinion or review rendered by the independent auditors with respect thereto.
3. Discuss the general types of information to be disclosed, and the type of presentation to be made, in the Company's earnings press releases and in the financial information and earnings guidance, if any, provided to analysts and rating agencies.
4. Meet separately, periodically, with management, the internal auditors (or other personnel responsible for the internal audit function) and with independent auditors.
5. Report to the Board of Directors following meetings of the Audit Committee.

Independent Auditors
6. Appoint the firm of independent certified public accountants to serve as the Company's independent auditors, which firm shall report directly to the Audit Committee, and retain or terminate, when appropriate, such firm. In addition, if the Audit Committee determines it to be in the best interests of the Company, retain a different firm of certified accountants to conduct all or any portion of the Company’s internal audit function. The Audit Committee shall be directly responsible for the appointment, compensation and oversight of the independent auditors and the internal auditors.
7. Obtain and review at least annually a report by the independent auditors describing: (a) the firm's internal quality control procedures; (b) any material issues raised by the most recent internal quality control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues; and (c) all relationships between the independent auditors and the Company, including services performed for the Company and fees charged to the Company, and all other relationships that may adversely affect the independence of the auditors.
8. Consider, at least annually, the independence of the independent auditors, including all relationships between the Company and the independent auditors and whether such auditors' performance of permissible non-audit services is compatible with the auditors' independence.
9. Pre-approve all audit engagement fees and terms and all non-audit engagements with the independent auditors. The Audit Committee shall have sole authority to carry out the responsibilities set forth in this Paragraph 9.
10. Review with the independent auditors the degree to which leased employees were used in the performance of the independent accounts services. 11. Approve the hiring by the Company of any current employee of the independent auditors or any former employee of the independent auditors employed by the independent auditors within the prior one-year period; provided that, in no event shall the Audit Committee approve the hiring by the Company of a chief executive officer, controller, chief financial officer, chief accounting officer or any person that would serve in an equivalent position for the Company if such person was employed by the independent auditors and participated in the audit of the Company during the one-year period preceding the date of the initiation of the most recent audit.

Financial Reporting Processes
12. In consultation with the independent auditors, management and the internal auditors, review the integrity of the Company's financial reporting processes, both internal and external, and the fullness and accuracy of the Company's financial statements.
13. Review the adequacy of the Company's internal controls.
14. Consider the independent auditors' judgments about the quality and appropriateness of the Company's accounting principles as applied to financial reporting.
15. Consider and approve, if appropriate, major changes to the Company's internal auditing and accounting principles and practices as suggested by the independent auditors or management.
16. Establish regular and separate systems of reporting to the Audit Committee by management and the independent auditors regarding any significant judgments made in management's preparation of the financial statements and the view of each as to the appropriateness of such judgments.
17. Review with the independent auditors any problems or difficulties encountered during the course of the audit work, including any restrictions on the scope of work or access to requested information, any significant disagreements between the independent auditors and management, and management's response to such problems or difficulties.
18. Review with the independent auditors and management the extent to which changes or improvements in financial or accounting practices, as approved by the Audit Committee, have been implemented.
19. Establish procedures, pursuant to rules or regulations that may be issued from time to time by the SEC and/or the NYSE, for handling complaints regarding accounting, internal accounting controls and auditing matters, including procedures for confidential, anonymous submission of legitimate concerns by employees regarding accounting and auditing matters.

Risk Assessment
20. Discuss the Company's guidelines and policies with respect to risk assessment and risk management.

Ethical and Legal Compliance
21. Establish, review and update periodically a Code of Ethical Conduct and ensure that management has established a system to enforce this Code.
22. Review with the Company's counsel, legal compliance matters including securities laws compliance.
23. Review with the Company's counsel, any legal matter that could have a significant impact on the Company's financial statements.
24. Obtain such advice and assistance from outside legal, accounting or other advisors as deemed appropriate by the Audit Committee in its sole discretion. The Audit Committee is specifically empowered to retain these advisors without seeking approval from the Board of Directors.

25. Review and discuss the adequacy of the Company's disclosure controls and procedures.
26. Conduct an annual performance evaluation of the Audit Committee in accordance with, and as required by, rules that may be issued by the NYSE from time to time.
27. Perform any other activities consistent with this Charter, the Company's Certificate of Incorporation and Bylaws, and governing law as the Audit Committee or the Board of Directors deems necessary or appropriate.