The Rylan Group, Inc. - Exhibit 10.13



 





Exhibit 10.13




The Ryland Group, Inc.

Dreier Supplemental Executive Retirement Plan




Effective July 1, 2002





 








 



The Ryland Group, Inc.

Dreier Supplemental Executive Retirement Plan




TABLE OF CONTENTS




	 	 	 	 	 	 
	 	 	 	Page
	 	 	 	

	ARTICLE 1 Definitions
	 	 	1	 
	ARTICLE 2 Vesting
	 	 	3	 
	 	2.1 Vesting in Benefits
	 	 	3	 
	ARTICLE 3 Benefits
	 	 	3	 
	 	3.1 Eligibility for Benefits
	 	 	3	 
	 	3.2 Death Benefit
	 	 	3	 
	 	3.3 Forms of Payment; Elections
	 	 	4	 
	 	3.4 Withdrawal Election
	 	 	4	 
	 	3.5 Committee Discretion
	 	 	4	 
	 	3.6 Withholding and Payroll Taxes
	 	 	4	 
	ARTICLE 4 Termination, Amendment or Modification of the Agreement
	 	 	5	 
	 	4.1 Termination or Amendment
	 	 	5	 
	 	4.2 Termination of Agreement
	 	 	5	 
	ARTICLE 5 Other Benefits and Agreements
	 	 	5	 
	 	5.1 Coordination with Other Benefits
	 	 	5	 
	ARTICLE 6 Administration of this Agreement
	 	 	5	 
	 	6.1 Committee Duties
	 	 	5	 
	 	6.2 Administration Upon Change In Control
	 	 	5	 
	 	6.3 Agents
	 	 	6	 
	 	6.4 Binding Effect of Decisions
	 	 	6	 
	 	6.5 Indemnity of Committee
	 	 	6	 
	 	6.6 Company Information
	 	 	6	 
	ARTICLE 7 Claims Procedures
	 	 	6	 
	 	7.1 Presentation of Claim
	 	 	6	 
	 	7.2 Notification of Decision
	 	 	7	 
	 	7.3 Review of a Denied Claim
	 	 	7	 
	 	7.4 Decision on Review
	 	 	7	 
	 	7.5 Legal Action
	 	 	8	 
	 	7.6 Named Fiduciary
	 	 	8	 
	ARTICLE 8 Beneficiary Designation
	 	 	8	 







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The Ryland Group, Inc.

Dreier Supplemental Executive Retirement Plan




	 	 	 	 	 	 
	 	 	 	 	 	 
	 	8.1 Beneficiary
	 	 	8	 
	 	8.2 Beneficiary Designation; Change; Spousal Consent
	 	 	8	 
	 	8.3 Acknowledgement
	 	 	8	 
	 	8.4 No Beneficiary Designation
	 	 	8	 
	 	8.5 Doubt as to Beneficiary
	 	 	9	 
	 	8.6 Discharge of Obligations
	 	 	9	 
	ARTICLE 9 Trust
	 	 	9	 
	 	9.1 Establishment of the Trust
	 	 	9	 
	 	9.2 Interrelationship of the Agreement and the Trust
	 	 	9	 
	 	9.3 Deposits to the Trust
	 	 	9	 
	ARTICLE 10 Miscellaneous
	 	 	9	 
	 	10.1 Status of Agreement
	 	 	9	 
	 	10.2 Unsecured General Creditor
	 	 	10	 
	 	10.3 Company’s Liability
	 	 	10	 
	 	10.4 Nonassignability
	 	 	10	 
	 	10.5 Furnishing Information
	 	 	10	 
	 	10.6 Terms
	 	 	10	 
	 	10.7 Captions
	 	 	10	 
	 	10.8 Governing Law
	 	 	10	 
	 	10.9 Validity
	 	 	10	 
	 	10.10 Notice
	 	 	10	 
	 	10.11 Successors
	 	 	11	 
	 	10.12 Spouse’s Interest
	 	 	11	 
	 	10.13 Incompetent
	 	 	11	 
	 	10.14 Court Order
	 	 	11	 
	 	10.15 Distribution in the Event of Taxation
	 	 	11	 
	 	10.16 Legal Fees To Enforce Rights After Change in Control
	 	 	12	 







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The Ryland Group, Inc.

Dreier Supplemental Executive Retirement Plan




THE RYLAND GROUP, INC.

DREIER SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN




     THIS DREIER SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (this “Agreement”) is
entered into as of July 1, 2002 between the Ryland Group, Inc. (the “Company”)
and R. Chad Dreier (the “Participant”).




RECITALS




	A.	 	The Participant is the Chief Executive Officer of the Company, and the
Company desires to have the continued services and counsel of the
Participant.





	B.	 	The purpose of this Agreement is to provide specified benefits to the
Participant as more fully described below.





AGREEMENT



NOW THEREFORE, it is mutually agreed as follows:




ARTICLE 1

Definitions




     For purposes hereof, unless otherwise clearly apparent from the context,
the following phrases or terms shall have the following indicated meanings:




	 	 	 
	1.1	 	
“Beneficiary” shall mean one or more persons, trusts, estates or other
entities, designated, in accordance with Article 8, that are entitled to
receive the Participant’s benefits under this Agreement upon the
Participant’s death.
	 	 	 
	1.2	 	
“Beneficiary Designation Form” shall mean the form established from time
to time by the Committee that the Participant completes, signs and returns
to the Committee to designate a Beneficiary.
	 	 	 
	1.3	 	
“Change in Control” shall mean the first to occur of any of the following
events:






	 	(a)	 	The acquisition by any person, other than the Company or any
employee benefit plan of the Company, of beneficial ownership of 20%
or more of the combined voting power of the Company’s then
outstanding voting securities;







	 	(b)	 	The first purchase under a tender offer or exchange offer,
other than an offer by the Company or any employee benefit plans of
the Company, pursuant to which shares of common stock have been
purchased;






	 	(c)	 	During any period of two consecutive years, individuals who at
the beginning of such period constitute the Board of Directors of the
Company cease for any reason to constitute at least a majority
thereof, unless the election or nomination for the election by
stockholders of the Company of each new director was approved by a
vote of at least two-






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The Ryland Group, Inc.

Dreier Supplemental Executive Retirement Plan





	 		 	thirds of the directors then still in office who were directors at
the beginning of such period; or






	 	(d)	 	Approval by stockholders of the Company of a merger,
consolidation, liquidation or dissolution of the Company, or the sale
of all or substantially all of the assets of the Company.






	 	 	 
	1.4	 	
“Claimant” shall have the meaning set forth in Section 7.1.
	 	 	 
	1.5	 	
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.
	 	 	 
	1.6	 	
“Committee” shall mean the committee described in Article 7.
	 	 	 
	1.7	 	
“Company” shall mean The Ryland Group, Inc., a Maryland corporation.
	 	 	 
	1.8	 	
“Compensation Committee” shall mean the Compensation Committee of the
Board of Directors of the Company.
	 	 	 
	1.9	 	
“Death Benefit” shall mean the Participant’s unpaid Vested SERP Benefit
(i) payable in equal annual installments over the remaining number of
years and in the same amounts as such benefit would have been paid to the
Participant had the Participant survived, or (ii) the present value
equivalent of such benefit stream payable in a lump sum, calculated using
an 8% discount rate.
	 	 	 
	1.10	 	
“Election Form” shall mean the form upon which the Participant elects the
manner of distribution of his SERP Benefit and Death Benefit, and shall be
made in such form as the Committee may require, including thereon a power
of attorney from the Participant’s community property spouse, if any,
authorizing the Participant to act on behalf of such spouse in making the
election and agreeing to be irrevocably bound by any such act with respect
to any community property interest under this Agreement.
	 	 	 
	1.11	 	
“ERISA” shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
	 	 	 
	1.12	 	
“Retirement” shall mean the voluntary or involuntary termination of the
Participant’s employment with the Company for any reason other than death.
	 	 	 
	1.13	 	
“SERP Benefit” shall mean a benefit in the amount of (i) $2,400,000 per
annum, payable in annual installments for a period of 15 years, or (ii)
the present value equivalent of such benefit stream payable in a lump sum,
calculated using an 8% discount rate.
	 	 	 
	1.14	 	
“Termination of Employment Without Cause” shall mean an involuntary
termination of the Participant’s employment with the Company other than by
reason of the Participant’s (i) willful and continued failure to perform
the material duties of his position after receiving notice of such failure
and being given reasonable opportunity to cure such failure; (ii) willful
misconduct which is demonstrably and materially injurious to the Company;
or (iii) conviction of a felony. No act or failure to act on the part of
the Participant shall be considered “willful” unless it is done or omitted
to be done in bad faith or without reasonable belief that the action or
omission was in the best interest of the Company.







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The Ryland Group, Inc.

Dreier Supplemental Executive Retirement Plan




	 	 	 
	1.15	 	
“Trust” shall mean the trust established pursuant to that certain Master
Trust Agreement, dated as of November 1, 2002, between the Company and the
trustee named therein, as amended from time to time.






	 	 	 
	1.16	 	
“Vested SERP Benefit” shall mean the Participant’s SERP Benefit
multiplied by the applicable vesting percentage set forth in Article 2 of
this Agreement.






ARTICLE 2

Vesting




	 	 	 
	2.1	 	
Vesting in Benefits






	 	(a)	 	General. The Participant shall vest in his SERP Benefit
according to the following vesting schedule, provided that he is
continuously employed with the Company from July 1, 2002, through the
specified date of vesting:






	 	 	 	 	 
	Date of Vesting	 	Vesting Percentage
	
	 	

	December 30, 2002
	 	 	0	%
	December 30, 2003
	 	 	20	%
	December 30, 2004
	 	 	40	%
	December 30, 2005
	 	 	60	%
	December 30, 2006
	 	 	80	%
	December 30, 2007
	 	 	100	%






	 	(b)	 	Special. Notwithstanding anything to the contrary in this
Section 2.1, the Participant shall immediately become 100% vested (if
he is not already vested in accordance with the above vesting
schedule) in the SERP Benefit upon the occurrence of a Change in
Control or if he experiences a Termination of Employment Without
Cause.






ARTICLE 3

Benefits




	 	 	 
	3.1	 	
Eligibility for Benefits






	 	(a)	 	SERP Benefit. Upon Retirement, the Participant shall be
eligible to receive his Vested SERP Benefit.






	 	(b)	 	Commencement of SERP Benefit. The payment of the Participant’s
Vested SERP Benefit shall commence within sixty (60) days of the
later of (i) January 1, 2008, or (ii) the date of the Participant’s
Retirement.






	 	 	 
	3.2	 	
Death Benefit







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The Ryland Group, Inc.

Dreier Supplemental Executive Retirement Plan




	 	(a)	 	Death Benefit. In the event of the Participant’s death before
Retirement, or after Retirement but before the Participant’s Vested
SERP Benefit has been paid in full, the Participant’s Beneficiary
shall receive a Death Benefit.






	 	(b)	 	Commencement of Death Benefit. The Death Benefit shall be paid
to the Participant’s Beneficiary no later than sixty (60) days after
the date on which the Committee is provided with proof that is
satisfactory to the Committee of the Participant’s death.






	 	 	 
	3.3	 	
Forms of Payment; Elections. The Participant shall elect on an Election
Form to have his (i) SERP Benefit paid in a lump sum or in equal annual
installments for fifteen (15) years, and (ii) Death Benefit paid in a lump
sum or in equal annual installments over the remaining number of years and
in the same amounts as such benefit would have been paid to the
Participant had the Participant survived. The Participant may change his
initial elections or any subsequent elections by submitting new Election
Forms to the Committee, provided that any such Election Forms are
submitted to and accepted by the Committee in its sole discretion at least
one (1) year prior to the date on which the payment of the applicable
benefit commences. The Election Forms most recently accepted by the
Committee shall govern the payout of the Participant’s SERP Benefit and
Death Benefit. If the Participant does not make an election with respect
to the form of payment of his SERP Benefit or if his initial election is
not submitted in a taxable year prior to the taxable year in which the
date of his Retirement falls, then such benefits shall be payable in
fifteen (15) equal annual installments. Similarly, if the Participant
does not make an election with respect to the form of payment of his Death
Benefit, then such benefits shall be paid in a lump sum.






	 	 	 
	3.4	 	
Withdrawal Election. On or after the date that payments commence under
this Agreement, the Participant, or his Beneficiary, as the case may be,
may elect to receive all or a percentage of the Participant’s remaining
unpaid Vested SERP Benefit payments or Death Benefit payments, in a lump
sum, less a penalty as described below. The lump sum payment shall be
equal to (i) the present value of the applicable percentage of the
Participant’s remaining unpaid Vested SERP Benefit payments or Death
Benefit payments, calculated using an 8% discount rate, less (ii) a
penalty equal to 10% of the amount computed under clause (i) (the net
amount shall be referred to as the “Benefit Amount”). The Participant, or
his Beneficiary, shall make this election by giving the Committee advance
written notice of the election in a form determined from time to time by
the Committee. The Participant, or his Beneficiary, shall be paid the
Benefit Amount within sixty (60) days of the election date. In the event
that a Participant elects to receive less than 100% of his remaining
unpaid Vested SERP Benefit payments or Death Benefit payments as a
distribution under this Section, any remaining annual installments payable
pursuant to Article 3 shall be adjusted accordingly.






	 	 	 
	3.5	 	
Committee Discretion. Upon the request of the Participant, the
Committee, in its sole discretion and consistent with its established
procedures and rules, may consider other forms of benefit payments, or the
timing of benefit payments, as it deems necessary and prudent under the
circumstances.






	 	 	 
	3.6	 	
Withholding and Payroll Taxes. The Company shall withhold from any and
all benefits made under this Article 3, all federal, state and local
income, employment and other taxes required to







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The Ryland Group, Inc.

Dreier Supplemental Executive Retirement Plan




	 	 	 
	 	 	
be withheld by the Company
in connection with the benefits hereunder, in amounts to be determined in
the sole discretion of the Company.






ARTICLE 4

Termination, Amendment or Modification of the Agreement




	 	 	 
	4.1	 	
Termination or Amendment. This Agreement may be terminated or amended
only by a written agreement executed by the Company and the Participant.






	 	 	 
	4.2	 	
Termination of Agreement. Unless otherwise modified pursuant to Section
4.1 above, this Agreement shall terminate upon the full payment of the
Participant’s Vested SERP Benefit or Death Benefit in accordance with
Article 3.






ARTICLE 5

Other Benefits and Agreements




	 	 	 
	5.1	 	
Coordination with Other Benefits. The benefits provided for the
Participant under this Agreement are in addition to any other benefits
available to such Participant under any other plan or program for
employees of the Company. This Agreement shall supplement and shall not
supersede, modify or amend any other such plan or program except as may
otherwise be expressly provided.






ARTICLE 6

Administration of the Agreement




	 	 	 
	6.1	 	
Committee Duties. This Agreement shall be administered by a Committee,
which shall consist of the Compensation Committee, or such committee as
the Compensation Committee shall appoint. The Committee shall have the
discretion and authority to (i) make, amend, interpret and enforce all
appropriate rules and regulations for the administration of this
Agreement, (ii) make benefit entitlement determinations, and (iii) decide
or resolve any and all questions including interpretations of this
Agreement, as may arise in connection with the Agreement.






	 	 	 
	6.2	 	
Administration Upon Change In Control. For purposes of this Agreement,
the Committee shall be the “Administrator” at all times prior to the
occurrence of a Change in Control. Upon and after the occurrence of a
Change in Control, the “Administrator” shall be an independent third party
selected by the Compensation Committee of the Board of Directors of the
Company, as such committee was constituted prior to the Change in Control.
The Administrator shall have the discretionary power to determine all
questions arising in
connection with the administration of the Agreement and the interpretation
of the Agreement and Trust including, but not limited to benefit
entitlement determinations; provided, however, upon and after the
occurrence of a Change in Control, the Administrator shall have no power
to direct the investment of Trust assets or select any investment manager
or custodial firm for the Trust. Upon and after the occurrence of a
Change in Control, the Company must: (1) pay all reasonable administrative
expenses and fees of the Administrator; (2) indemnify the Administrator
against any costs, expenses and liabilities including, without limitation,
attorney’s fees and expenses arising in connection with







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The Ryland Group, Inc.

Dreier Supplemental Executive Retirement Plan




	 	 	 
	 	 	
the performance of
the Administrator hereunder, except with respect to matters resulting from
the gross negligence or willful misconduct of the Administrator or its
employees or agents; and (3) supply full and timely information to the
Administrator on all matters relating to the Agreement, the Trust, the
Participant and his Beneficiaries, the Participant’s benefits under this
Agreement, the date and circumstances of the Participant’s termination of
employment or death, and such other pertinent information as the
Administrator may reasonably require. Upon and after a Change in Control,
the Administrator may be terminated (and a replacement appointed) only
with the approval of the Compensation Committee of the Board of Directors
of the Company, as such committee was constituted prior to a Change in
Control. Upon and after a Change in Control, the Administrator may not be
terminated by the Company. If the Administrator resigns or is removed and
no successor is appointed and approved by the Compensation Committee of
the Board of Directors of the Company, as such committee was constituted
prior to a Change in Control, the Participant may apply to a court of
competent jurisdiction for appointment of a successor third-party
administrator.






	 	 	 
	6.3	 	
Agents. In the administration of this Agreement, the Committee may
employ agents and delegate to them such administrative duties as it sees
fit, (including acting through a duly appointed representative), and may
from time to time consult with counsel who may be counsel to the Company.






	 	 	 
	6.4	 	
Binding Effect of Decisions. The decision or action of the Committee
with respect to any question arising out of or in connection with the
administration, interpretation and application of the Agreement and the
rules and regulations promulgated hereunder shall be final and conclusive
and binding upon all persons having any interest in the Agreement.






	 	 	 
	6.5	 	
Indemnity of Committee. The Company shall indemnify and hold harmless
the members of the Committee against any and all claims, losses, damages,
expenses or liabilities arising from any action or failure to act with
respect to this Agreement, except in the case of willful misconduct by the
Committee or any of its members.






	 	 	 
	6.6	 	
Company Information. To enable the Committee to perform its functions,
the Company shall supply full and timely information to the Committee on
all matters relating to the compensation of the Participant, the date and
circumstances of the Participant’s termination of employment or death, and
such other pertinent information as the Committee may reasonably require.






ARTICLE 7

Claims Procedures




	 	 	 
	7.1	 	
Presentation of Claim. The Participant or his Beneficiary (such
Participant or Beneficiary being referred to below as a “Claimant”) may
deliver to the Committee a written claim for a determination with respect
to the amounts distributable to such Claimant pursuant to this Agreement.
If such a claim relates to the contents of a notice received by the
Claimant, the claim must be made within sixty (60) days after such notice
was received by the Claimant. All other claims must be made within 180
days of the date on which the event that caused the claim to arise
occurred. The claim must state with particularity the determination
desired by the Claimant.







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The Ryland Group, Inc.

Dreier Supplemental Executive Retirement Plan




	 	 	 
	7.2	 	
Notification of Decision. The Committee shall consider a Claimant’s
claim within a reasonable time, but no later than ninety (90) days after
receiving the claim. If the Committee determines that special
circumstances require an extension of time for processing the claim,
written notice of the extension shall be furnished to the Claimant prior
to the termination of the initial ninety (90) day period. In no event
shall such extension exceed a period of ninety (90) days from the end of
the initial period. The extension notice shall indicate the special
circumstances requiring an extension of time and the date by which the
Committee expects to render the benefit determination. The Committee
shall notify the Claimant in writing:






	 	(a)	 	that the Claimant’s requested determination has been made, and
that the claim has been allowed in full; or






	 	(b)	 	that the Committee has reached a conclusion contrary, in whole
or in part, to the Claimant’s requested determination, and such
notice must set forth in a manner calculated to be understood by the
Claimant:






	 	(i)	 	the specific reason(s) for the denial of the claim,
or any part of it;






	 	(ii)	 	specific reference(s) to pertinent provisions of
the Agreement upon which such denial was based;






	 	(iii)	 	a description of any additional material or
information necessary for the Claimant to perfect the claim,
and an explanation of why such material or information is
necessary;






	 	(iv)	 	an explanation of the claim review procedure set
forth in Section 7.3 below; and






	 	(v)	 	a statement of the Claimant’s right to bring a
civil action under ERISA Section 502(a) following an adverse
benefit determination on review.






	 	 	 
	7.3	 	
Review of a Denied Claim. On or before sixty (60) days after receiving a
notice from the Committee that a claim has been denied, in whole or in
part, a Claimant (or the Claimant’s duly authorized representative) may
file with the Committee a written request for a review of the denial of
the claim. The Claimant (or the Claimant’s duly authorized
representative):






	 	(a)	 	may, upon request and free of charge, have reasonable access
to, and copies of, all documents, records and other information
relevant to the claim for benefits;






	 	(b)	 	may submit written comments or other documents; and/or






	 	(c)	 	may request a hearing, which the Committee, in its sole
discretion, may grant.






	 	 	 
	7.4	 	
Decision on Review. The Committee shall render its decision on review
promptly, and no later than sixty (60) days after the Committee receives
the Claimant’s written request for a review of the denial of the claim.
If the Committee determines that special circumstances require an
extension of time for processing the claim, written notice of the
extension shall be furnished to the Claimant prior to the termination of
the initial sixty (60) day period. In no event shall such extension
exceed a period of sixty (60) days from the end of the initial period.
The extension notice shall indicate the special circumstances requiring an
extension of time and the date by which the Committee expects to render
the benefit determination. In rendering its decision, the







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The Ryland Group, Inc.

Dreier Supplemental Executive Retirement Plan




	 	 	 
	 	 	
Committee shall
take into account all comments, documents, records and other information
submitted by the Claimant relating to the claim, without regard to whether
such information was submitted or considered in the initial benefit
determination. The decision must be written in a manner calculated to be
understood by the Claimant, and it must contain:






	 	(a)	 	specific reasons for the decision;






	 	(b)	 	specific reference(s) to the pertinent Agreement provisions
upon which the decision was based;






	 	(c)	 	a statement that the Claimant is entitled to receive, upon
request and free of charge, reasonable access to and copies of, all
documents, records and other information relevant (as defined in
applicable ERISA regulations) to the Claimant’s claim for benefits;
and






	 	(d)	 	a statement of the Claimant’s right to bring a civil action
under ERISA Section 502(a).






	 	 	 
	7.5	 	
Legal Action. A Claimant’s compliance with the foregoing provisions of
this Article 7 is a mandatory prerequisite to a Claimant’s right to
commence any legal action with respect to any claim for benefits under
this Agreement.






	 	 	 
	7.6	 	
Named Fiduciary. The Committee shall be the named fiduciary, within the
meaning of ERISA, with respect to this Agreement solely for purposes of
this Article 7.






ARTICLE 8

Beneficiary Designation




	 	 	 
	8.1	 	
Beneficiary. The Participant shall have the right, at any time, to
designate his Beneficiary(ies) (both primary as well as contingent) to
receive any benefits payable under the Agreement to a beneficiary upon the
Participant’s death. The Beneficiary designated under this Agreement may
be the same as or different from the Beneficiary designation under any
other plan of the Company in which the Participant participates.






	 	 	 
	8.2	 	
Beneficiary Designation; Change; Spousal Consent. The Participant shall
designate his Beneficiary by completing and signing the Beneficiary
Designation Form, and returning it to the Committee or its designated
agent. The Participant shall have the right to change a Beneficiary by
completing, signing and otherwise complying with the terms of the
Beneficiary Designation Form and the Committee’s rules and procedures, as
in effect from time to time. If the Participant names someone other than
his or her spouse as a Beneficiary and if the Committee requires that
spousal consent be obtained with respect to the Participant, a spousal
consent, in the form designated by the Committee, must be signed by the
Participant’s spouse and returned to the Committee. Upon the acceptance
by the Committee of a new Beneficiary Designation Form, all Beneficiary
designations previously filed shall be cancelled. The Committee shall be
entitled to rely on the last Beneficiary Designation Form filed by the
Participant and accepted by the Committee prior to his death.






	 	 	 
	8.3	 	
Acknowledgment. No designation or change in designation of a Beneficiary
shall be effective until received, accepted and acknowledged in writing by
the Committee or its designated agent.






	 	 	 
	8.4	 	
No Beneficiary Designation. If the Participant fails to designate a
Beneficiary as provided in Sections 8.2 and 8.3 above or, if all
designated Beneficiaries predecease the Participant or die prior







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The Ryland Group, Inc.

Dreier Supplemental Executive Retirement Plan




	 	 	 
		 	
to
complete distribution of the Participant’s benefits, then the
Participant’s spouse shall be the designated Beneficiary. If the
Participant has no surviving spouse, the benefits remaining under the
Agreement shall be payable to the executor or personal representative of
the Participant’s estate.






	 	 	 
	8.5	 	
Doubt as to Beneficiary. If the Committee has any doubt as to the proper
Beneficiary to receive payments pursuant to this Agreement, the Committee
shall have the right, exercisable in its discretion, to cause the Company
to withhold such payments until this matter is resolved to the Committee’s
satisfaction.






	 	 	 
	8.6	 	
Discharge of Obligations. The payment of benefits under this Agreement
to a Beneficiary shall fully and completely discharge the Company and the
Committee from all further obligations under this Agreement with respect
to the Participant, and this Agreement shall terminate upon such full
payment of benefits.






ARTICLE 9

Trust




	 	 	 
	9.1	 	
Establishment of the Trust. In order to provide assets from which to
fulfill the obligations to the Participant and his beneficiaries under the
Agreement, the Company shall establish a Trust by a trust agreement with a
third party, the trustee, to which the Company may, in its discretion,
contribute cash or other property, including securities issued by the
Company, to provide for the benefit payments under the Agreement.






	 	 	 
	9.2	 	
Interrelationship of the Agreement and the Trust. The provisions of this
Agreement shall govern the rights of the Participant to receive
distributions. The provisions of
the Trust shall govern the rights of the Company, the Participant and the
creditors of the Company to the assets transferred to the Trust. The
Company shall at all times remain liable to carry out its obligations
under the Agreement. The Company’s obligations under the Agreement may be
satisfied with Trust assets distributed pursuant to the terms of the
Trust, and any such distribution shall reduce the Company’s obligations
under this Agreement.






	 	 	 
	9.3	 	
Deposits to the Trust. The Company shall deposit into the Trust an amount
of cash or, in its discretion, other assets, including if desirable
securities issued by the Company, equal to $3.4 million per annum for the
five (5) year period commencing January 1, 2003. Immediately before the
closing of any transaction constituting a Change of Control, the Company
shall deposit into the Trust such amount of cash and other assets, if any,
sufficient in amount to cause the total value of the assets held in such
Trust at that time to equal the present value of the SERP Benefit
calculated using an 8% discount rate.






ARTICLE 10

Miscellaneous




	 	 	 
	10.1	 	
Status of Agreement. This Agreement is intended to be a plan that is
not qualified within the meaning of Code Section 401(a) and that is
“unfunded and is maintained by an employer primarily for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees” within the meaning of ERISA Sections 201(2),
301(a)(3) and







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The Ryland Group, Inc.

Dreier Supplemental Executive Retirement Plan




	 	 	 
	 	 	
401(a)(1). This Agreement shall be administered and
interpreted to the extent possible in a manner consistent with that
intent.






	 	 	 
	10.2	 	
Unsecured General Creditor. The Participant and his Beneficiaries,
successors and assigns shall have no legal or equitable rights, interests
or claims in any property or assets of the Company. Any and all of the
Company’s assets shall be, and remain, the general, unpledged unrestricted
assets of the Company.






	 	 	 
	10.3	 	
Company’s Liability. The Company’s liability for the payment of benefits
shall be defined only by this Agreement, as entered into between the
Company and the Participant.






	 	 	 
	10.4	 	
Nonassignability. Neither the Participant nor any other person shall
have any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage or otherwise encumber, transfer, hypothecate or convey in advance
of actual receipt, the amounts, if any, payable hereunder, or any part
thereof, which are, and all rights to which are, expressly declared to be,
unassignable and non-transferable. No part of the amounts payable shall,
prior to actual payment, be subject to seizure or sequestration for the
payment of any debts, judgments, alimony or separate maintenance owed by
the Participant or any other person, nor be transferable by operation of
law in the event of the Participant’s or any other person’s bankruptcy or
insolvency.






	 	 	 
	10.5	 	
Furnishing Information. The Participant or his Beneficiary will
cooperate with the Committee by furnishing any and all information
requested by the Committee and take such other actions as may be requested
in order to facilitate the administration of this Agreement and the
payments of benefits hereunder, including but not limited to taking such
physical examinations as the Committee may deem necessary.






	 	 	 
	10.6	 	
Terms. Whenever any words are used herein in the masculine, they shall
be construed as though they were in the feminine in all cases where they
would so apply; and wherever any words are used herein in the singular or
in the plural, they shall be construed as though they were used in the
plural or the singular, as the case may be, in all cases where they would
so apply.






	 	 	 
	10.7	 	
Captions. The captions of the articles, sections and paragraphs of this
Agreement are for convenience only and shall not control or affect the
meaning or construction of any of its provisions.






	 	 	 
	10.8	 	
Governing Law. Subject to ERISA, the provisions of this Agreement shall
be construed and interpreted according to the internal laws of the State
of Maryland without regard to its conflict of laws principles.






	 	 	 
	10.9	 	
Validity. In case any provision of this Agreement shall be illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Agreement shall be construed and enforced
as if such illegal and invalid provision had never been inserted herein.






	 	 	 
	10.10	 	
Notice. Any notice or filing required or permitted to be given to the
Committee under this Agreement shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address
below:






	 
	SERP Committee
	The Ryland Group, Inc.







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The Ryland Group, Inc.

Dreier Supplemental Executive Retirement Plan




	 
	24025 Park Sorrento
	Suite 400
	Calabasas, California 91302






	 	 	 
	 	 	
Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the
receipt for registration or certification.






	 	 	 
	 	 	
Any notice or filing required or permitted to be given to the Participant
under this Agreement shall be sufficient if in writing and hand-delivered,
or sent by mail, to the last known address of the Participant.






	 	 	 
	10.11	 	
Successors. The provisions of this Agreement shall bind and inure to
the benefit of the Company and its successors and assigns and the
Participant and his Beneficiary.






	 	 	 
	10.12	 	
Spouse’s Interest. The interest in the benefits hereunder of a spouse
of the Participant who has predeceased the Participant shall automatically
pass to the Participant and shall not be transferable by such spouse in
any manner,
including but not limited to such spouse’s will, nor shall such interest
pass under the laws of intestate succession.






	 	 	 
	10.13	 	
Incompetent. If the Committee determines in its discretion that a
benefit under this Agreement is to be paid to a minor, a person declared
incompetent or to a person incapable of handling the disposition of that
person’s property, the Committee may direct payment of such benefit to the
guardian, legal representative or person having the care and custody of
such minor, incompetent or incapable person. The Committee may require
proof of minority, incompetency, incapacity or guardianship, as it may
deem appropriate prior to distribution of the benefit. Any payment of a
benefit shall be a payment for the account of the Participant and the
Participant’s Beneficiary, as the case may be, and shall be a complete
discharge of any liability under the Agreement for such payment amount.






	 	 	 
	10.14	 	
Court Order. The Committee is authorized to make any payments directed
by court order in any action in which the Committee has been named as a
party.






	 	 	 
	10.15	 	
Distribution in the Event of Taxation






	 	(a)	 	In General. If, for any reason, all or any portion of the
Participant’s benefit under this Agreement becomes taxable to the
Participant prior to receipt, the Participant may petition the
Committee for a distribution of that portion of his or her benefit
that has become taxable. Upon the grant of such a petition, which
grant shall not be unreasonably withheld, the Company shall
distribute to the Participant immediately available funds in an
amount equal to the taxable portion of his or her benefit (which
amount shall not exceed the Participant’s unpaid Vested SERP Benefit
under the Agreement). If the petition is granted, the tax liability
distribution shall be made within ninety (90) days of the date when
the Participant’s petition is granted. Such a distribution shall
affect and reduce the benefits to be paid under this Agreement.







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The Ryland Group, Inc.

Dreier Supplemental Executive Retirement Plan



	 	(b)	 	Trust. If the Trust terminates in accordance with its terms
and benefits are distributed from the Trust to the Participant or his
Beneficiary in accordance therewith, the Participant’s benefits under
this Agreement shall be reduced to the extent of such distributions.






	 	 	 
	10.16	 	
Legal Fees To Enforce Rights After Change in Control. The Company is
aware that upon the occurrence of a Change in Control, the Board or the
board of directors of the Company (which might then be composed of new
members) or a shareholder of the Company or of any successor corporation
or affiliate of a successor corporation might then cause or attempt to
cause the Company or such successor to refuse to comply with its
obligations under the Agreement and might cause or attempt to cause the
Company to institute, or may institute, litigation seeking to deny the
Participant the benefits intended under the Agreement. In these
circumstances, the purpose of the Agreement could be frustrated.
Accordingly, if, following a Change in Control, it should appear
to the Participant that the Company or any successor corporation has
failed to comply with any of its obligations under the Agreement or any
agreement thereunder or, if the Company or any other person takes any
action to declare the Agreement void or unenforceable or institutes any
litigation or other legal action designed to deny, diminish or to recover
from the Participant the benefits intended to be provided, then the
Company irrevocably authorizes such Participant to retain counsel of his
choice at the expense of the Company to represent such Participant in
connection with the initiation or defense of any litigation or other legal
action, whether by or against the Company or any director, officer,
shareholder, other person or entity affiliated with the Company or any
successor corporation or affiliate of a successor corporation thereto in
any jurisdiction.







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The Ryland Group, Inc.

Dreier Supplemental Executive Retirement Plan



IN WITNESS WHEREOF, the parties have executed this Agreement effective as of
the date and year indicated below.




	 	 	 	 	 
	 	 	“Company”

The Ryland Group, Inc., a Maryland corporation
	 	 	 	 	 
	 	 	
By:  /s/ Robert J. Cunnion, III	 	 
	 	 	

	 	 	Robert J. Cunnion, III
	 	 	Senior Vice President
	 	 	 
	 	 	
Attest:  /s/ Timothy J. Geckle	 
	 	 	

	 	 	Timothy J. Geckle
	 	 	Secretary
	 	 	 
	 	 	
Date: July 1, 2002
	 	 	

	 	 	“Participant”

R. Chad Dreier
	 	 	/s/ R. Chad Dreier
	 	 	

	 	 	
Date: July 1, 2002
	 	 	









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