Document:

Exhibit 10.1

 

STOCK UNIT
AGREEMENT

pursuant
to

THE RYLAND
GROUP, INC.

2005 EQUITY
INCENTIVE PLAN

 

This STOCK UNIT AGREEMENT (the “Agreement”),
is dated as of                 ,
200  , by and between The Ryland Group, Inc. (the “Corporation”),
and                                   
(the “Executive”).

 

NOW, THEREFORE, the Corporation and the
Executive agree as follows:

 

1.                                       Grant
of Stock Units.

 

The Corporation grants to the Executive an
Award of             Stock
Units pursuant to Section 6 of the 2005 Equity Incentive Plan (the “Plan”)
unless the Corporation’s return on equity (ROE) for the year ended December 31,
200  is less than 60% of the 10-year median ROE of the Fortune 500
industrial companies for the 10-year period ending with the 200  
calendar year, in which event the stock unit grant is forfeited.

 

The Corporation’s ROE is the Corporation’s consolidated net earnings
after taxes and extraordinary items and before the payment of dividends on the
Corporation’s common stock divided by the Corporation’s beginning stockholders’
equity during such fiscal year period, all of which is determined under
generally accepted accounting principles on a basis consistent with the
Corporation’s audited consolidated financial statements.

 

2.                                       Vesting
of Stock Units.

 

The Stock Units granted in paragraph 1 of
this Agreement become vested and payable in accordance with the following
vesting schedule:

 

	
  VESTING DATE

  	
   

  	
  VESTING

  
	
   

  	
   

  	
   

  
	
  May 1, 20  

  	
   

  	
  Stock Units

  	
   

  
	
  May 1, 20  

  	
   

  	
  Stock Units

  	
   

  
	
  May 1, 20  

  	
   

  	
   Stock Units

  	
   

  

 

If the Executive terminates employment with the Corporation for any
reason prior to any Vesting Date, all non-vested Stock Units are immediately
forfeited and cancelled. Notwithstanding the foregoing, all unvested Stock
Units shall vest and be paid by the Corporation to the Executive in accordance
with paragraph 3 below upon the occurrence of a Change of Control (as defined
below).

 

A “Change of Control” shall take place on the date of the earlier to
occur of any of the following events:

 

a.                                       The
acquisition by any person other than the Corporation or any employee benefit
plan of the Corporation, or more than one person acting as a group, together
with stock

 

 

held by such person or group, of beneficial
ownership of more than 50% of the total fair market value or total voting power
of the Corporation’s then outstanding voting securities;

 

b.                                      Any one person or
more than one person acting as a group acquires, or has acquired during the
12-month period ending on the date of the most recent acquisition by such
person or group, beneficial ownership of 35% or more of the total voting power
of the Corporation’s then outstanding voting securities;

 

c.                                       A
majority of the members of the Corporation’s Board of Directors is replaced
during any 12-month period by Directors whose appointment or election is not
endorsed or approved by a majority of the members of the Board of Directors who
were members of the Board of Directors prior to the initiation of the
replacement; or

 

d.                                      Any one person or
more than one person acting as a group acquires, or has acquired during the
12-month period ending on the date of the most recent acquisition by such
person or group, assets of the Corporation that have a total gross fair market
value of 40% or more of the total gross fair market value of all of the assets
of the Corporation immediately prior to the initiation of the acquisition.

 

3.                                       Payment
of Stock Units.

 

Upon the vesting of Stock Units
in accordance with this Agreement, the number of Stock Units which become
vested (the “Vested Number of Stock Units”) are paid to the Executive in a
number of shares of Common Stock of the Corporation equal to 50% of the Vested
Number of Stock Units and a cash amount equal to the Fair Market Value (as
defined in the Plan) of the remaining unpaid amount of 50% of the Vested Number
of Stock Units. Upon payment, the vested and paid Stock Units are automatically
deemed fully paid and cancelled.

 

4.                                       Cash Dividend
Equivalents.

 

On each cash dividend payment date with
respect to Common Stock, the Executive shall receive a cash dividend equivalent
payment equal to the product of (i) the per-share cash dividend amount
payable with respect to each share of Common Stock on that date and (ii) the
total number of Stock Units which have not been vested, paid or cancelled as of
the record date corresponding to such dividend payment date.

 

5.                                       Delivery of
Stock Certificates and Cash.

 

The stock
certificate for shares of Common Stock and cash issued to the Executive in
payment of any vested Stock Units shall be delivered to the Executive on the
applicable Vesting Date.

 

6.                                       Tax Matters.

 

If any taxes, including income taxes or
withholding taxes, result or become due and payable as a result of the Stock
Units, including the grant, vesting and payment of the Stock Units to the
Executive, the Executive agrees that the Corporation may withhold, as
applicable, any federal, state or local taxes at such time and upon such terms
and conditions as required by law or determined by the Corporation.

 

2

 

7.                                       Rights
of Executive With Respect to Stock Units.

 

The Executive shall have no rights as a
stockholder with respect to any Stock Unit or any share of Common Stock to be
issued with respect to any Stock Unit until the date of vesting and payment. The
Executive’s rights with respect to Stock Units shall be the rights of a general
unsecured creditor of the Corporation until the Stock Units vest and shares of
Common Stock are actually issued to the Executive.

 

8.                                       Adjustments.

 

The number of Stock Units shall automatically
adjust in accordance with, and be consistent with, the terms of any stock
dividend, stock split, combination or similar transaction.

 

9.                                       Dispute Resolution.

 

Either the Executive or the Corporation may elect
to have any good faith dispute or controversy arising under or in connection
with this Agreement settled by arbitration by providing written notice of such
election to the other party specifying the nature of the dispute to be
arbitrated. If arbitration is selected, such proceeding shall be conducted
before a panel of three arbitrators sitting in a location agreed to by the
Corporation and the Executive within 50 miles from the location of the
Executive’s principal place of employment in accordance with the rules of
the American Arbitration Association. Judgment may be entered on the award
of or decision made by the arbitrators in any court having competent
jurisdiction. To the extent that the Executive prevails in any litigation or
arbitration seeking to enforce the provisions of this Agreement, the Executive
is entitled to reimbursement by the Corporation of all expenses of such
litigation or arbitration, including any legal fees and expenses and any costs
and disbursements.

 

10.                                 Stock Units Subject
to Terms and Conditions of the Plan.

 

The Stock Units and all shares of Common
Stock issued with respect to Stock Units are subject to the terms and
conditions of the Plan, which are incorporated herein by this reference. This
Agreement is subject to the terms of the Plan, and wherever any conflict may arise
between the terms of this Agreement and the terms of the Plan, the terms of the
Plan shall control.

 

The Corporation agrees by
offering this grant of Stock Units and the Executive agrees by acceptance of
this grant of Stock Units that the terms, conditions and provisions of this
Agreement and the Plan shall determine the rights and obligations of the
Corporation and the Executive in connection with this grant of Stock Units.

 

	
   

  	
  THE RYLAND GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   R.
  Chad Dreier

  
	
   

  	
   

  	
   Chairman,
  President and Chief Executive Officer

  

 

3Exhibit 10.2

 

Amended and
Restated

STOCK UNIT
AGREEMENT

pursuant
to

THE RYLAND
GROUP, INC.

2005 EQUITY
INCENTIVE PLAN

 

This Amended and Restated STOCK UNIT
AGREEMENT (the “Agreement”), is dated as of April 20, 2006, by and between
The Ryland Group, Inc. (the “Corporation”), and                      
(the “Executive”), and amends and restates in its entirety the Stock Unit
Agreement, dated as of May 1, 2005, between the Corporation and the
Executive.

 

NOW, THEREFORE, the Corporation and the
Executive agree as follows:

 

1.                                       Grant
of Stock Units.

 

The Corporation grants to the Executive an
Award of           Stock
Units pursuant to Section 6 of the 2005 Equity Incentive Plan (the “Plan”)
unless the Corporation’s return on equity (ROE) for the year ended December 31,
2005 is less than 60% of the 10-year median ROE of the Fortune 500 industrial
companies for the 10-year period ending with the 2004 calendar year, in which
event the stock unit grant is forfeited.

 

The Corporation’s ROE is the Corporation’s consolidated net earnings
after taxes and extraordinary items and before the payment of dividends on the
Corporation’s common stock divided by the Corporation’s beginning stockholders’
equity during such fiscal year period, all of which is determined under
generally accepted accounting principles on a basis consistent with the
Corporation’s audited consolidated financial statements.

 

2.                                       Vesting
of Stock Units.

 

The Stock Units granted in paragraph 1 of
this Agreement become vested and payable in accordance with the following
vesting schedule:

 

	
  VESTING DATE

  	
   

  	
  VESTING

  
	
   

  	
   

  	
   

  
	
  May 1, 2006

  	
   

  	
  Stock Units

  
	
  May 1, 2007

  	
   

  	
  Stock Units

  
	
  May 1, 2008

  	
   

  	
  Stock Units

  

 

If the Executive terminates employment with the Corporation for any
reason prior to any Vesting Date, all non-vested Stock Units are immediately
forfeited and cancelled. Notwithstanding the foregoing, all unvested Stock
Units shall vest and be paid by the Corporation to the Executive in accordance
with paragraph 3 below upon the occurrence of a Change of Control (as defined below).

 

A “Change of Control” shall take place on the date of the earlier to
occur of any of the following events:

 

 

a.                                       The
acquisition by any person other than the Corporation or any employee benefit
plan of the Corporation, or more than one person acting as a group, together
with stock held by such person or group, of beneficial ownership of more than
50% of the total fair market value or total voting power of the Corporation’s
then outstanding voting securities;

 

b.                                      Any one person or
more than one person acting as a group acquires, or has acquired during the
12-month period ending on the date of the most recent acquisition by such
person or group, beneficial ownership of 35% or more of the total voting power
of the Corporation’s then outstanding voting securities;

 

c.                                       A
majority of the members of the Corporation’s Board of Directors is replaced
during any 12-month period by Directors whose appointment or election is not
endorsed or approved by a majority of the members of the Board of Directors who
were members of the Board of Directors prior to the initiation of the
replacement; or

 

d.                                      Any one person or
more than one person acting as a group acquires, or has acquired during the
12-month period ending on the date of the most recent acquisition by such person
or group, assets of the Corporation that have a total gross fair market value
of 40% or more of the total gross fair market value of all of the assets of the
Corporation immediately prior to the initiation of the acquisition.

 

3.                                       Payment
of Stock Units.

 

Upon the vesting of Stock Units
in accordance with this Agreement, the number of Stock Units which become
vested (the “Vested Number of Stock Units”) are paid to the Executive in a
number of shares of Common Stock of the Corporation equal to 50% of the Vested
Number of Stock Units and a cash amount equal to the Fair Market Value (as
defined in the Plan) of the remaining unpaid amount of 50% of the Vested Number
of Stock Units. Upon payment, the vested and paid Stock Units are automatically
deemed fully paid and cancelled.

 

4.                                       Cash Dividend
Equivalents.

 

On each cash dividend payment date with
respect to Common Stock, the Executive shall receive a cash dividend equivalent
payment equal to the product of (i) the per-share cash dividend amount
payable with respect to each share of Common Stock on that date and (ii) the
total number of Stock Units which have not been vested, paid or cancelled as of
the record date corresponding to such dividend payment date.

 

5.                                       Delivery of
Stock Certificates and Cash.

 

The stock
certificate for shares of Common Stock and cash issued to the Executive in
payment of any vested Stock Units shall be delivered to the Executive on the
applicable Vesting Date.

 

6.                                       Tax Matters.

 

If any taxes, including income taxes or
withholding taxes, result or become due and payable as a result of the Stock
Units, including the grant, vesting and payment of the Stock Units to the
Executive, the Executive agrees that the Corporation may withhold, as
applicable, any federal, state or local taxes at such time and upon such terms
and conditions as required by law or determined by the Corporation.

 

2

 

7.                                       Rights of
Executive With Respect to Stock Units.

 

The Executive shall have no rights as a
stockholder with respect to any Stock Unit or any share of Common Stock to be
issued with respect to any Stock Unit until the date of vesting and payment. The
Executive’s rights with respect to Stock Units shall be the rights of a general
unsecured creditor of the Corporation until the Stock Units vest and are paid
in cash and shares of Common Stock issued to the Executive.

 

8.                                       Adjustments.

 

The number of Stock Units shall automatically
adjust in accordance with, and be consistent with, the terms of any stock
dividend, stock split, combination or similar transaction.

 

9.                                       Dispute Resolution.

 

Either the Executive or the Corporation may elect
to have any good faith dispute or controversy arising under or in connection
with this Agreement settled by arbitration by providing written notice of such
election to the other party specifying the nature of the dispute to be
arbitrated. If arbitration is selected, such proceeding shall be conducted
before a panel of three arbitrators sitting in a location agreed to by the
Corporation and the Executive within 50 miles from the location of the
Executive’s principal place of employment in accordance with the rules of
the American Arbitration Association. Judgment may be entered on the award
of or decision made by the arbitrators in any court having competent
jurisdiction. To the extent that the Executive prevails in any litigation or
arbitration seeking to enforce the provisions of this Agreement, the Executive
is entitled to reimbursement by the Corporation of all expenses of such litigation
or arbitration, including any legal fees and expenses and any costs and
disbursements.

 

10.                                 Stock Units Subject
to Terms and Conditions of the Plan.

 

The Stock Units and all shares of Common
Stock issued with respect to Stock Units are subject to the terms and
conditions of the Plan, which are incorporated herein by this reference. This
Agreement is subject to the terms of the Plan, and wherever any conflict may arise
between the terms of this Agreement and the terms of the Plan, the terms of the
Plan shall control.

 

The Corporation agrees by
offering this grant of Stock Units and the Executive agrees by acceptance of
this grant of Stock Units that the terms, conditions and provisions of this
Agreement and the Plan shall determine the rights and obligations of the
Corporation and the Executive in connection with this grant of Stock Units.

 

	
   

  	
  THE RYLAND GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   R.
  Chad Dreier

  
	
   

  	
   

  	
   Chairman,
  President and Chief Executive Officer

  

 

3

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