Exhibit 10.27

 

AMENDMENT NO. 1

 

TO

 

SENIOR EXECUTIVE SEVERANCE AGREEMENT.

 

The Ryland Group, Inc. (the “Company”) and                              (the
“Executive”) wish to amend the Severance Agreement originally dated as of
                                       to comply with the final Regulations
issued under Internal Revenue Code section 409A.

 

Accordingly, the Agreement is amended as follows, effective [enter original
effective date of Agreement, if after 1/1/05]:

 

1.                                       Section 1.1 is amended by replacing the
phrase “On or before the Executive’s last day of employment with the
Corporation” with the phrase “On the date of the Executive’s Separation from
Service with the Corporation” in both places where it appears.

 

2.             Section 1.2 is amended in its entirety, as follows:

 

“1.2                           Accelerated Vesting.  All rights, awards and
benefits of the Executive provided pursuant to the TRG Incentive Plan and any
other incentive or bonus plans of the Corporation in which the Executive
participates prior to the Change of Control shall immediately vest in full and
the Executive shall receive a distribution of the amount of these rights, awards
and in accordance with the applicable benefit, document or plan.”

 

3.             Section 1.3 is amended in its entirety, as follows:

 

“1.3                           Insurance and Other Special Benefits.  The
Executive’s participation in the life, medical, dental, vision, AD&D,
prescription drug, long-term disability and executive medical reimbursement
programs provided to the Executive prior to the Change of Control (collectively,
the “Benefits”) shall be continued or equivalent benefits provided by the
Corporation or any successor corporation or affiliate of such successor
corporation (the “Responsible Corporation”), at the Responsible Corporation’s
expense, for a period of two (2) years from the date of the Executive’s
Separation from Service.  Additionally, on the date of Separation from Service,
the Responsible Corporation shall pay to the Executive a lump sum cash payment
equal to the value of coverage under the Company’s executive life insurance
program, personal health services allowance and health club benefit program for
a period of two years.  Notwithstanding anything herein to the contrary, in no
event shall the aggregate present value of the Benefits and single lump sum cash
payment to be provided under this Section 1.3, as determined as of the date of
the Executive’s Separation from Service in the discretion of the Responsible
Corporation applying reasonable assumptions, exceed an amount (the “Benefits
Threshold”) equal to ninety-nine hundredths (0.99) times the highest Annual
Compensation (as hereinafter defined) for any of the three (3) calendar

 

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years immediately preceding the date of Separation from Service.  In the event
that the aggregate present value of the Benefits and single lump sum cash
payment to be provided under this Section 1.3 would, but for the preceding
sentence, exceed the Benefits Threshold, the Benefits and single lump sum cash
payment shall be reduced or forgone to comply with the limitation set forth in
the preceding sentence by first reducing the single lump sum cash payment and
then reducing the Benefits provided.”

 

4.                                       The first sentence of Section 1.4 is
amended by adding the word “reasonable” before the phrase “expenses incurred in
that relocation”.

 

5.             Section 1.5 is amended in its entirety, as follows:

 

“1.5                           Stock Rights.  All stock options, stock
appreciation rights, stock purchase rights, restricted stock, restricted stock
units, performance shares, performance units, and any similar rights which the
Executive holds shall become fully vested and, to the extent permitted by, or
exempt from, Code section 409A, exercisable on the date of Separation from
Service.”

 

6.                                       The first sentence of Section 1.6 is
amended by adding the word “reasonable” before the phrase “outplacement services
obtained by the Executive”.

 

7.             Section 1.7(iii) is amended in its entirety, as follows:

 

“(iii)                         A “Separation from Service” shall take place in
the event that the Executive’s employment is terminated (a) by the Corporation
without Cause (as hereinafter defined) or (b) by the Executive with Good Reason
(as hereinafter defined).  The Executive’s employment is terminated as of the
date the Corporation and the Executive reasonably anticipate that no further
services will be performed or that the level of bona fide services the Executive
will perform will permanently decrease to no more than 20% of the average level
of bona fide services performed over the immediately preceding 36-month period
(or the full period of services to the Corporation if the Executive has been
providing services to the Corporation for less than 36 months).”

 

8.                                       The phrase “Termination of Employment”
shall be replaced with the phrase “Separation from Service” in each place where
it appears in the Agreement.

 

9.                                       Section 1.8 is amended by adding the
following language to the end of that Section:

 

“Any payment under this Section shall be made to the Executive by the end of the
calendar year following the calendar year in which the Executive remits the
related taxes.”

 

10.                                 Section 2.1 is amended by adding the
following language to the end of that Section:

 

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“The Executive shall be entitled to reimbursement of the fees and expenses
described under this Section during the period commencing on the date of
Separation from Service and ending on death.  Any reimbursement of fees and
expenses under this Section shall be made on or before the last day of the year
following the year in which the expense is incurred.  The amount of fees and
expenses eligible for reimbursement during a year shall not affect the expenses
eligible for reimbursement in any other year.”

 

11.                                 Section 2.2 is amended by adding the
following language to the end of that Section:

 

“The Executive shall be entitled to reimbursement of the fees and expenses
described under this Section during the period commencing on the date of
Separation from Service and ending on death.  Any reimbursement of fees and
expenses under this Section shall be made on or before the last day of the year
following the year in which the expense is incurred.  The amount of fees and
expenses eligible for reimbursement during a year shall not affect the expenses
eligible for reimbursement in any other year.”

 

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

 

 

THE RYLAND GROUP, INC.

 

EXECUTIVE:

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

R. Chad Dreier, Chairman

 

[Executive]

 

 

and Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

Attest:

 

 

 

 

Timothy J. Geckle,

 

 

 

Secretary

 

 

 

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