exv4w2






Exhibit 4.2




THE RYLAND GROUP, INC.




ARTICLES SUPPLEMENTARY




     The Ryland Group, Inc., a Maryland corporation (the “Corporation”), hereby certifies to the
Maryland State Department of Assessments and Taxation that:



     FIRST:  Pursuant to authority expressly vested in the Board of Directors of the Corporation by
Section 2-208 of the Maryland General Corporation Law and Article SIXTH of the charter of the
Corporation, the Board of Directors has duly reclassified 10,000 shares of unissued common stock,
par value $1.00 per share (the “Common Stock”), of the Corporation into 10,000 shares of preferred
stock, par value $1.00 per share (the “Preferred Stock”).



     SECOND:  The reclassification increases the number of shares classified as Preferred Stock
from no shares immediately prior to the reclassification to 10,000 shares immediately after the
reclassification. The reclassification decreases the number of shares classified as Common Stock
from 200,000,000 shares immediately prior to the reclassification to 199,990,000 shares immediately
after the reclassification.



     THIRD: Pursuant to authority expressly vested in the Board of Directors of the Corporation by
Article SIXTH of the Charter of the Corporation, the Board of Directors has duly designated the
10,000 shares of the Preferred Stock as Series A Junior Participating Preferred Stock, par value
$1.00 per share, of the Corporation and has provided for the issuance of such series.



     FOURTH:  The terms of the Series A Junior Participating Preferred Stock as set by the Board of
Directors, including preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, or terms or conditions of redemption, are as follows:




	1.	 	The shares of such series will be designated as Series A Junior Participating
Preferred Stock (the “Series A Preferred Stock”) and the number of shares
constituting the Series A Preferred Stock is 10,000. Such number of shares may
be increased or decreased by resolution of the Board; provided, however, that no
decrease will reduce the number of shares of Series A Preferred Stock to a
number less than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Corporation and convertible into Series A Preferred Stock.






	2.	 	(a)    Subject to the rights of the holders of any shares of any series of
Preferred Stock ranking prior to the Series A Preferred Stock with respect to
dividends, the holders of shares of Series A Preferred Stock, in preference to
the holders of Common Stock, and of any other junior stock, will be entitled to
receive, when, as and if declared by the Board out of funds legally available
for the purpose, dividends payable in cash (except as otherwise provided below)
on such dates as are from time to time established for the payment of dividends
on the Common Stock (each such date being referred to herein as a “Dividend
Payment Date”), commencing on the first Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A Preferred Stock (the
“First Dividend Payment Date”), in an amount per share (rounded to the nearest
cent) equal to, subject to the provision for adjustment hereinafter set forth,
the greater of (i) $1 and (ii) ten thousand (10,000) times the aggregate per
share amount of all cash dividends, and ten thousand (10,000) times the
aggregate per share amount (payable in kind) of all non-cash dividends, other
than a dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise), declared
on the Common Stock since the immediately preceding Dividend Payment Date or,
with respect to the First Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock.




 









 












	 	 	In the event that the
Corporation at any time (i) declares a dividend on the outstanding shares of
Common Stock payable in shares of Common Stock, (ii) subdivides the outstanding
shares of Common Stock, (iii) combines the outstanding shares of Common Stock
into a smaller number of shares or (iv) issues any shares of its capital stock
in a reclassification of the outstanding shares of Common Stock (including any
such reclassification in connection with a consolidation or merger in which the
Corporation is the continuing or surviving corporation), then, in each such case
and regardless of whether any shares of Series A Preferred Stock are then issued
or outstanding, the amount to which holders of shares of Series A Preferred
Stock would otherwise be entitled immediately prior to such event pursuant to
this paragraph 2(a) will be correspondingly adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.





(b)    The Corporation will declare a dividend on the Series A Preferred Stock as
provided in paragraph 2(a) immediately after it declares a dividend on the
Common Stock (other than a dividend payable in shares of Common Stock). Each
such dividend on the Series A Preferred Stock will be payable immediately
prior to the time at which the related dividend on the Common Stock is
payable.




(c)    Dividends will accrue, and be cumulative, on outstanding shares of Series
A Preferred Stock from the Dividend Payment Date next preceding the date of
issue of such shares, unless (i) the date of issue of such shares is prior to
the record date for the First Dividend Payment Date, in which case dividends
on such shares will accrue from the date of the first issuance of a share of
Series A Preferred Stock or (ii) the date of issue is a Dividend Payment Date
or is a date after the record date for the determination of holders of shares
of Series A Preferred Stock entitled to receive a dividend and before such
Dividend Payment Date, in either of which events such dividends will accrue,
and be cumulative, from such Dividend Payment Date. Accrued but unpaid
dividends will cumulate from the applicable Dividend Payment Date but will not
bear interest. Dividends paid on the shares of Series A Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares will be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding.





 









 








The Board of Directors may fix
a record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date will be not more than 60 calendar days prior to the
date fixed for the payment thereof.







	3.	 	The holders of shares of Series A Preferred Stock shall have the following
voting rights:





(a)    Subject to the provision for adjustment hereinafter set forth and except
as otherwise provided in the Articles of Incorporation, as amended, or
required by law, each share of Series A Preferred Stock shall entitle the
holder thereof to 10,000 votes, on all matters upon which the holders of the
Common Stock of the Corporation are entitled to vote. In the event the
Corporation shall at any time after the Record Date declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to which holders
of shares of Series A Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.




(b)    Except as otherwise provided herein, in the Articles of Incorporation, as
amended, or in any other Articles Supplementary creating a series of Preferred
Stock or any similar stock, and except as otherwise required by law, the
holders of shares of Series A Preferred Stock and the holders of shares of
Common Stock and any other capital stock of the Corporation having general
voting rights shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation.




(c)    Except as set forth herein, or as otherwise provided by law, holders of
Series A Preferred Stock shall have no special voting rights and their consent
shall not be required (except to the extent they are entitled to vote with
holders of Common Stock as set forth herein) for taking any corporate action.




 









 









	4.	 	(a)    Whenever dividends or other dividends or distributions payable on the
Series A Preferred Stock are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of Series
A Preferred Stock outstanding have been paid in full, the Corporation will not:





(i)    Declare or pay dividends, or make any other distributions, on any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) (“Junior Stock”) to the shares
of Series A Preferred Stock;




(ii)    Declare or pay dividends, or make any other distributions, on any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) (“Parity Stock”) with the shares of Series A Preferred Stock, except dividends paid ratably on
the shares of Series A Preferred Stock and all such Parity Stock on
which dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled;




(iii)    Redeem, purchase or otherwise acquire for consideration shares of any Junior Stock; provided, however, that the Corporation may at
any time redeem, purchase or otherwise acquire shares of any such Junior Stock in exchange for shares of any other Junior Stock of the
Corporation; or




(iv)    Redeem, purchase or otherwise acquire for consideration any shares of Series A Preferred Stock, or any shares of Parity Stock,
except in accordance with a purchase offer made in writing or by
publication (as determined by the Board) to all holders of such shares
upon such terms as the Board, after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series and classes, may determine in good faith will result
in fair and equitable treatment among the respective series or
classes.




(b)    The Corporation will not permit any majority-owned subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph 4(a),
purchase or otherwise acquire such shares at such time and in such manner.





	5.	 	Any shares of Series A Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever will be retired and canceled promptly after
the acquisition thereof. All such shares will upon their cancellation become
authorized but unissued shares of Common Stock.




 









 












	6.	 	Upon any liquidation, dissolution or winding up of the Corporation, no
distribution will be made (a) to the holders of shares of Junior Stock unless,
prior thereto, the holders of shares of Series A Preferred Stock have received
an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment; provided, however, that
the holders of shares of Series A Preferred Stock will be entitled to receive an
aggregate amount per share, subject to the provision for adjustment hereinafter
set forth, equal to a minimum per share liquidation payment of $10,000 but will
be entitled to an aggregate per share liquidation payment of 10,000 times the
payment made per share of Common Stock or (b) to the holders of shares of Parity
Stock, except distributions made ratably on the shares of Series A Preferred
Stock and all such Parity Stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution or
winding up. In the event the Corporation at any time (i) declares a dividend on
the outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivides the outstanding shares of Common Stock, (iii) combines the
outstanding shares of Common Stock into a smaller number of shares or (iv)
issues any shares of its capital stock in a reclassification of the outstanding shares of Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Corporation is the continuing or surviving
corporation), then, in each such case and regardless of whether any shares of
Series A Preferred Stock are then issued or outstanding, the aggregate amount to
which each holder of shares of Series A Preferred Stock would otherwise be
entitled immediately prior to such event pursuant to this paragraph 6 will be
correspondingly adjusted by multiplying such amount by a fraction, the numerator
of which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.






	7.	 	In the event that the Corporation enters into any consolidation, merger,
statutory share exchange, combination or other transaction in which the shares
of Common Stock are exchanged for or changed into other stock or securities,
cash and/or any other property, then, in each such case, each share of Series A
Preferred Stock will at the same time be similarly exchanged for or changed into
an amount per share, subject to the provision for adjustment hereinafter set
forth, equal to ten thousand (10,000) times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation at any time (a) declares a dividend on the
outstanding shares of Common Stock payable in shares of Common Stock, (b)
subdivides the outstanding shares of Common Stock, (c) combines the outstanding shares of Common Stock in a smaller number of shares or (d) issues any shares of
its capital stock in a reclassification of the outstanding shares of Common
Stock (including any such reclassification in connection with a consolidation or
merger in which the Corporation is the continuing or surviving corporation),
then, in each such case and regardless of whether any shares of Series A
Preferred Stock are then issued or outstanding, the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Series A
Preferred Stock will be correspondingly adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.




 









 












	8.	 	The shares of Series A Preferred Stock are not redeemable.






	9.	 	The Series A Preferred Stock rank, with respect to the payment of dividends and
the distribution of assets, junior to all other series of the Corporation’s
Preferred Stock, unless the terms of such series shall so provide.






	10.	 	Series A Preferred Stock may be issued in fractions of a share that shall
entitle the holder, in proportion to such holder’s fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series A Preferred Stock.





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     IN WITNESS WHEREOF, The Ryland Group, Inc., has caused these presents to be signed in its name
and on its behalf by its Senior Vice President and witnessed by its Assistant Secretary on December
22, 2008.







	 	 	 	 	 
	WITNESS:		THE RYLAND GROUP, INC.
	 
	 
	By:  	/s/ Andrea L. Riordan	 	By:  	/s/ Timothy J. Geckle
	 	Name:  Andrea L. Riordan	 	 	Name:  Timothy J. Geckle
	 	Title:  Assistant Secretary	 	 	Title:  Senior Vice President and General Counsel 	 




     THE UNDERSIGNED, Timothy J. Geckle, Senior Vice President and General Counsel of The Ryland
Group, Inc., who executed on behalf of the Corporation the foregoing Articles Supplementary of
which this Certificate is made a part, hereby acknowledges in the name and on behalf of said
Corporation the foregoing Articles Supplementary to be the corporate act of said Corporation and
hereby certifies that the matters and facts set forth herein with respect to the authorization and
approval thereof are true in all material respects under the penalties of perjury.



	 	 	 	 	 
	 	 	 
	 	                                         /s/ Timothy J. Geckle
 	 
	 	Timothy J. Geckle