Exhibit 10.25

RETIREMENT AGREEMENT

This Retirement Agreement (this “Agreement”) is entered into on January 17, 2007
by and between Standard Pacific Corp., a Delaware corporation (the “Company”),
and Michael C. Cortney (“Executive”).

WHEREAS, Executive has been a valued employee of the Company for twenty-four
years, most recently serving as President and as a Director of the Company;

WHEREAS, Executive intends to retire from the Company and resign as an employee,
President, and member of the Board of Directors of the Company;

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 resigns as an employee, President, and member of
the Board of Directors of the Company, effective as of March 15, 2007 (the
“Effective Date”). Effective as of the Effective Date, Executive also hereby
resigns 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) Confirmation of 2006 Bonus Payment. Pursuant to and in accordance with the
terms of the Company’s Management Incentive Bonus Plan, Executive is to be paid
an incentive bonus for calendar year 2006 equal to 1.5% of the consolidated
pretax operating income of the Company, payable 80% in cash and 20% in Company
common stock. Any transfer restriction imposed by the Company on the shares
issued as part of this bonus will lapse upon Executive’s retirement. The bonus
will be paid no later than twenty (20) days after the Audit Committee of the
Board of Directors of the Company approves the Company’s year-end financial
statements for calendar year 2006.

(b) Acceleration of Restricted Stock Vesting. One-third of the February 16, 2006
restricted stock grant (25,000 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 25,000 remaining unvested shares shall
immediately vest and all restrictions on resale of such shares imposed by the
Company shall lapse.

(c) Acceleration of Selected Stock Option Vesting. Options to acquire an
aggregate of 40,000 shares of Company common stock were issued to Executive on
April 27, 2004. 13,332 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.

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(d) Extension of Vested Option Exercise Period. Under the terms of Executive’s
stock option agreements with the Company, Executive will have 90 days following
his retirement on the Effective Date to exercise vested options. Notwithstanding
the foregoing, as of the Effective Date, the Company will extend the time period
for Executive to exercise all options vested as of the Effective Date, including
options vested pursuant to Section 2(c), above, to the close of business on
December 31, 2007; provided, however, that options to acquire 17,136 shares of
stock of the Company that were the subject of an option grant to Executive on
January 14, 2002 shall not be extended and shall remain subject to the original
terms of the option grant. Vested options unexercised as of the close of
business on December 31, 2007 shall terminate. 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.

(e) Continuation of Financial Planning Benefit. Executive shall be entitled to
continuation of the Company’s AYCO financial planning benefit through
December 31, 2007.

(f) 2007 Compensation. During the period of his employment during 2007,
Executive shall be paid a base salary of $33,333 per semi-monthly pay period.
This salary shall be paid in arrears in accordance with the Company’s normal
payroll process. Executive shall not receive any bonus, equity compensation or
other compensation for 2007.

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 and rights
under the Company’s deferred compensation plans) 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 December 31, 2006, this amount totaled $92,307.60.

(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, 2007. The Company shall provide reimbursement
within 30 days of receipt of Executive's properly documented business expenses.

(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

 

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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 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 to a
valid subpoena or other judicial process.

ii. The Company agrees that the members of its Board of Directors and Executive
Officers (as such term is defined for Section 16 purposes under the Securities
Exchange Act of 1934) will not disparage Executive to third parties. Nothing in
this provision shall be construed to prevent any person from giving truthful
testimony pursuant to a valid subpoena or other judicial process.

(c) Non-Solicitation. Without the prior written consent of the Company, for a
period of two (2) years following the Effective Date, Executive shall not,
directly or indirectly, entice or solicit or seek to induce or influence any
person who is an employee or consultant of the Company or any of its affiliates,
to leave their employment or engagement with the Company or any of its
affiliates.

(d) Equitable Relief. Executive agrees that Executive’s violation, or threatened
violation, of Sections 4(a), 4(b) and 4(c) would cause irreparable damage to the
Company and its affiliates, and that therefore the Company shall be entitled to
an injunction prohibiting Executive from any such violation or threatened
violation.

5. Release.

(a) Except as prohibited by law, Executive, on behalf of himself and his
successors and assigns, and the Company do hereby forever release, discharge and
acquit each other, including the Company's subsidiaries, divisions, affiliates,
and their respective predecessors in interest, members, partners, principals,
shareholders, directors, officers, agents, employees, and representatives, and
the successors and assigns of each of them (each a "Company Released

 

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Party"), from any and all charges, complaints, claims, demands, obligations,
promises, agreements, damages, actions, causes of action, suits, rights, costs,
losses, debts, expenses (including attorneys' fees and costs), liabilities, and
indebtedness, of every type, kind, nature, description or character, whether
known or unknown, suspected or unsuspected, liquidated or unliquidated, arising
from, under or related to, Executive’s employment, retention or other
relationships with the Company or its affiliates, the termination of that
employment, retention or those relationships, and any event, act or omission
arising on or before the date of this Agreement including, but not limited to,
(1) any claim for salary, bonus, severance pay, or other compensation, or
(2) any claim for non-vested benefits under any employee benefit plan, whether
or not heretofore brought before any state or federal court or before any state
or federal agency or other governmental entity (the "Released Matters"). The
Released Matters shall not include any claims for any of the following:
(i) indemnification as an officer, employee or agent under applicable law,
charter document or the October 22 Indemnification Agreement, (ii) the parties'
rights under this Agreement, (iii) Executive's right to vested benefits under
any stock option agreement or 401(k) plan, or (iv) Executive's right to workers’
compensation or unemployment benefits.

(b) Executive and the Company acknowledge and agree that the releases made
herein constitute final and complete releases of Executive and the Company
Released Parties with respect to all Released Matters, and that by signing this
Agreement, Executive and the Company are forever giving up the right to sue or
attempt to recover money, damages or any other relief from each other and the
Company Released Parties for all claims they have or may have with respect to
the Released Matters (even if any such claim is unforeseen as of the date
hereof).

(c) Executive and the Company represent and warrant that they understand
California Civil Code Section 1542, which provides as follows:

"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."

Executive and the Company, being aware of Section 1542, hereby expressly waive
any and all rights they may have thereunder as well as under any other statute
or common law principles of similar effect under the laws of any state or the
United States. This Agreement shall act as a release of all claims that may
arise from the Released Matters, whether such claims are currently known or
unknown, foreseen or unforeseen including, without limitation, any claims for
damages resulting from the acts or omissions which occurred on or before the
date of this Agreement.

Thus, notwithstanding the provisions of Section 1542, and for the purpose of
implementing a full and complete release and discharge of Executive and the
Company Released Parties, Executive and the Company expressly acknowledge that
this Agreement is intended to include in its effect, without limitation, all
Released Matters which they do not know or suspect to exist in their favor at
the time of execution hereof, and that this Agreement contemplates the
extinguishment of all such Released Matters.

 

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6. No Claims. Executive represents and warrants that he has not instituted any
complaints, charges, lawsuits or other proceedings against any Company Released
Parties with any governmental agency, court, arbitration agency or tribunal.
Executive further agrees that he will not, directly or indirectly, (i) file,
bring, cause to be brought, join or participate in, or provide any assistance in
connection with any complaint, charge, lawsuit or other proceeding or action
against any Company Released Parties at any time hereafter for any Released
Matters, or (ii) defend any action, proceeding or suit in whole or in part on
the grounds that any or all of the terms or provisions of this Agreement are
illegal, invalid, not binding, unenforceable or against public policy, except
that this Section 6 shall not apply to the right to file a charge or complaint
with the Equal Employment Opportunity Commission.

7. Advice of Counsel. Executive represents and agrees that he fully understands
his right to discuss, and that the Company has advised you to discuss, all
aspects of this Agreement with his private attorney, that he has carefully read
and fully understands all the provisions of the Agreement, that he understands
its final and binding effect, that he is competent to sign this Agreement, and
that he is voluntarily entering into this Agreement.

8. Acknowledgment. Executive represents and agrees that in executing this
Agreement he is relying solely upon his own judgment, belief and knowledge, and
the advice and recommendations of any independently selected counsel, concerning
the nature, extent and duration of his rights and claims. Executive acknowledges
that no other individual has made any promise, representation or warranty,
express or implied, not contained in this Agreement, to induce Executive to
execute this Agreement. Executive further acknowledges that he is not executing
this Agreement in reliance on any promise, representation, or warranty not
contained in this Agreement.

9. Cooperation in Litigation. Executive agrees to cooperate with and assist the
Company in any litigation or alternative dispute resolution process which may
arise between the Company and third parties with respect to matters in which
Executive was involved while employed at the Company. The Company will reimburse
Executive for his time (at the rate of $5,000 per 8 hour day) and reasonable
costs and expenses for any cooperation or assistance provided at the request of
the Company.

10. Miscellaneous

(a) Binding on Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of the Company and shall inure
to the benefit of and be binding upon Executive’s heirs, executors,
administrators, successors and assigns.

(b) Arbitration. Executive and the Company acknowledge and agree that any
dispute regarding the application, interpretation or breach of this Agreement
will be subject to final and binding arbitration before a single arbitrator who
is a retired judge with JAMS/Endispute and in accordance with JAMS/Endispute’s
rules for the resolution of employment disputes. Attorneys'

 

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fees, costs and damages (where appropriate) shall be awarded to the prevailing
party in any dispute, and any resolution, opinion or order of the arbitrator may
be entered as a judgment of a court of competent jurisdiction. This Agreement
shall be admissible in any proceeding to enforce its terms.

(c) Severability. Should any provision of this Agreement be found, held,
declared, determined, or deemed by any arbitrator or court of competent
jurisdiction to be void, illegal, invalid or unenforceable under any applicable
statute or controlling law, the legality, validity, and enforceability of the
remaining provisions will not be affected and the illegal, invalid, or
unenforceable provision will be deemed not to be a part of the Agreement.

(d) Governing Law. This Agreement shall be construed and interpreted in
accordance with California law.

(e) Entire Agreement. This Agreement contains the entire agreement and
understanding between Executive and the Company regarding the matters set forth
herein and replaces all prior agreements, arrangements and understandings,
written or oral (except for Executive’s rights and obligations under any stock
option agreement or the Indemnification Agreement dated October 22 with the
Company) and neither Executive nor the Company shall be bound or liable for any
representation, promise or inducement not contained in this Agreement. This
Agreement cannot be amended, modified, supplemented, or altered, except by
written amendment or supplement signed by Executive and the Company.

(f) Counterparts. This Agreement may be executed in counterparts, including
facsimile counterparts, each of which shall be deemed to be an original, but all
of which shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Agreement by facsimile transmission
shall be effective delivery of a manually executed counterpart to this
Agreement.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

 

THE COMPANY

STANDARD PACIFIC CORP.,

a Delaware corporation

By:

 

/s/ Stephen J. Scarborough

Name:

  Stephen J. Scarborough

Title:

  Chief Executive Officer

EXECUTIVE

By:

 

/s/ Michael C. Cortney

  Michael C. Cortney, an individual

 

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