Document:

Exhibit 10.1

 

THE
RYLAND GROUP, INC.

SENIOR
EXECUTIVE PERFORMANCE PLAN

 

Purpose

 

The purpose of the Senior Executive Performance Plan (the “Plan”) is to set
forth the terms on which annual bonuses will be paid to participating senior
executives of The Ryland Group, Inc. and its subsidiaries (collectively
the “Corporation”).  The Plan is intended
to permit the Corporation to deduct fully annual bonuses paid to senior
executives in determining its federal income taxes in accordance with Section 162(m) of
the Internal Revenue Code of 1986, as amended (“Section 162(m)”), and is
effective as of its date of approval.

 

Administration

 

The Plan has been approved by and shall be administered by the Compensation
Committee of the Board of Directors of the Corporation or a subcommittee of the
Compensation Committee composed of two or more “outside directors” as defined
in Section 162(m) and the regulations thereunder (the “Committee”).  The Committee shall interpret the Plan and
shall have the authority and duties set forth in the Plan.

 

Covered Officers

 

The Plan applies each fiscal year to those officers of the Corporation
whose compensation would be subject to the limitations of Section 162(m) or
the regulations thereunder for that year and such other officers of the Corporation
as the Committee shall determine (each, a “Covered Officer”).

 

Bonuses

 

Each Covered Officer who is employed by the Corporation during a fiscal
year while this Plan is in effect will be eligible to receive a bonus equal to
a stated percentage of either the Corporation’s or one or more business unit’s
earnings before taxes and extraordinary items as reflected in, or, in the case
of a business unit, as determined for purposes of preparing, the audited
consolidated financial statements of the Corporation for such fiscal year, as
adjusted to eliminate the effect of bonus and incentive compensation, corporate
overhead, changes in accounting methods and other non-recurring or unusual
expenses or charges as reflected in the Corporation’s financial statements,
and/or based upon net cash provided by operating activites as reflected in the
Corporation’s financial statements all as determined by the Compensation
Committee.  The maximum bonus payable
under the Plan to any one Covered Officer in any year shall not exceed three
percent of the Corporation’s earnings before taxes and extraordinary items, as
adjusted to eliminate the effect of bonus and incentive compensation, corporate
overhead, changes in accounting methods and other non-recurring or unusual
expenses or charges as reflected in the Corporation’s financial statements, all
as determined by the Compensation Committee. 
The Committee may reduce or eliminate bonuses for any reason in its sole
discretion, but may not increase the amount of bonus payable to any Covered
Officer for a given year after the formula for that year has been established.

 

 

The Committee will determine and set forth in writing, not later than 90
days after the commencement of each fiscal year, (i) each Covered Officer
who will participate in the Plan for that year, (ii) the determination of
the amount or percentage of earnings before taxes and extraordinary items or
the amount or percentage of net cash provided by operating activities used to
determine any payment with respect to each participating Covered Officer, based
on the performance of the Corporation, as a whole, or of a particular business
unit(s) with respect to each participating Covered Officer, and (iii) any
other objective terms and conditions that must be satisfied for the Covered
Officer to become eligible to receive payment of the annual bonus.

 

No bonus shall be paid pursuant to this Plan for any year until the
performance goals and any other material terms of bonus eligibility are
satisfied.  The Committee will certify in
writing that the performance goals have been met.  Annual bonuses payable pursuant to the Plan
shall be paid in cash in the two and a half month period following the end of
the year in which the bonus is earned and vested.

 

Miscellaneous

 

No Covered Officer may assign the right to receive any benefit under the
Plan.  The Committee may approve payment
of any amount which a disabled or deceased Covered Officer would have earned
under the Plan to the Covered Officer’s spouse or estate.

 

The Plan shall be submitted to the Corporation’s stockholders for approval
in accordance with Section 162(m).

 

The Committee may amend or change the Plan at any time and in any manner,
and may terminate the Plan at any time without obligation for payment of
bonuses to Covered Officers for the year in which termination occurs.  The Plan may not be amended or changed
without stockholder approval if the amendment or change would limit the
deductibility of bonuses paid pursuant to the Plan under Section 162(m).

 

2Exhibit 10.2

 

THE RYLAND GROUP, INC.

PERFORMANCE AWARD PROGRAM

 

Established Pursuant to

THE RYLAND GROUP, INC. 2007 EQUITY INCENTIVE
PLAN

AND ITS SUCCESSOR PLANS

 

Establishment

 

The Compensation Committee of the Board of
Directors of The Ryland Group, Inc. (the “Corporation”), pursuant to its
power and authority to establish programs for granting awards under the
Corporation’s 2007 Equity Incentive Plan and its successor plans, as amended
from time to time, including, if approved by stockholders, the 2008 Equity
Incentive Plan (the “Incentive Plan”), establishes this Performance Award
Program, as amended and restated (the “Award Program”) effective as of its date
of approval.

 

Purpose and Type of Awards

 

The purpose of the Award Program is to provide
for the granting of performance awards, in the form of common stock of the
Corporation or stock units (as defined in the Incentive Plan), either alone or
in combination with cash, as long-term incentives for participants to strive to
influence the financial growth and success of the Corporation in a positive
manner.  Performance awards may be
granted upon achievement of specified performance objectives or which vest
and/or become distributable upon such achievement.  Shares of common stock and stock units
granted in connection with performance awards under this Award Program shall be
issued under the Incentive Plan.

 

Administration

 

The Award Program shall be administered by the
Compensation Committee of the Board of Directors of the Corporation or a
subcommittee of the Compensation Committee composed of two or more “outside
directors” as defined in Section 162(m) of the Internal Revenue Code
and the regulations thereunder (the “Committee”).  The Committee shall interpret the Award
Program and shall have the authority and duties set forth in the Award
Program.  All determinations by the
Committee shall be final and conclusive.

 

Eligibility

 

The Committee shall select the individuals who
shall participate in and receive grants of performance awards under the Award
Program.  All executive officers of the
Corporation and its affiliated entities are 
eligible to participate.

 

 

Granting of Performance Awards

 

The Committee shall determine the specific
performance objectives and the period over which such performance objectives
will be measured (the “Performance Period”) in connection with each performance
award granted under the Award Program.

 

The Committee will determine and set forth in
writing, not later than 90 days after the commencement of each Performance
Period and in no event later than the point in time when 25 percent of the
Performance Period has elapsed or the outcome of the performance
objectives  is no longer substantially
uncertain: (i) the officer or officers who will participate in the Award
Program for that Performance Period, (ii) the nature and the amount (or
the objective formula for determining the amount) of the performance award that
will be earned if specified performance objectives are met, (iii) the
applicable performance objectives, and (iv) any other objective terms and
conditions that must be satisfied by the officer in order to earn the
performance award.  The performance
objectives are objective financial targets based upon the Corporation’s return
on stockholders’ equity and/or net cash provided by operating activities as
reflected in the Corporation’s financial statements.  The Committee, in its discretion, may
decrease the amount of any performance award that is, or is to be, earned, but
may not increase any performance award for a Performance Period after the
performance objectives for that Performance Period have been established.

 

Distribution of Performance
Awards

 

After the end of each Performance Period, the
Committee shall determine whether, or the extent to which, the performance objectives
and other terms and conditions have been met, and will certify in writing that
the performance goals have been met prior to payment.  Performance awards shall be granted or vested
in accordance with the formula and terms and conditions approved by the
Committee at the beginning of the applicable Performance Period.

 

Miscellaneous

 

This Award Program is established pursuant to
the Incentive Plan, the terms of which are incorporated herein by
reference.  In the event of any conflict
between the Award Program and the Incentive Plan, the terms of the Incentive
Plan shall govern.

 

No single participant shall be eligible to
receive more than 260,000 shares of common stock and/or stock units, in any
combination, with respect to a Performance Period.  The maximum cash amount payable as a
performance award in combination with any performance award distributable in
common stock or stock units is the cash amount equal to the federal and state
income and Medicare taxes, assuming highest marginal tax rates, associated with
the distribution of the related common stock or stock units.

 

This Award Program shall be submitted to the
Corporation’s stockholders for approval in accordance with Internal Revenue
Code Section 162(m).

 

2

 

 

Stock units awarded (together with tax gross-up
payments due in connection therewith) pursuant to an employment or other
agreement between the Corporation and its Chief Executive Officer are granted
pursuant to this Award Program.

 

No participant may assign the right to receive
any performance award under this Award Program. 
The Committee may approve distribution of any performance award which a
disabled or deceased participant would have earned under this Award Program to
the participant’s spouse or estate.

 

The Committee may amend or change this Award
Program at any time and in any manner, and may terminate this Award Program at
any time without obligation for payment of performance awards to participants
for the Performance Period in which termination occurs.  This Award Program may not be amended or
changed without stockholder approval if the amendment or change would limit the
deductibility of performance awards paid or distributed pursuant to the Award
Program under Internal Revenue Code Section 162(m).

 

3

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