Document:

Exhibit 10.11

 

EXHIBIT 10.11

THE RYLAND GROUP, INC.

PERFORMANCE AWARD PROGRAM

Established Pursuant to

THE RYLAND GROUP, INC. 2002 EQUITY INCENTIVE PLAN

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 2002 Equity Incentive Plan (the
“Incentive Plan”), establishes this Performance Award Program (“Award Program”)
effective as of July 1, 2002.

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

1

 

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.
The Committee, in its discretion, may decrease the amount of any performance
award that is, or is to be, earned, but may not increase such amount for a
Performance Period after the performance objectives for that Performance Period
have been established.

Distribution of Performance Awards

Within 120 days 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. Performance awards shall be granted or
vested and distributed 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 Ryland Group, Inc. 2002
Equity 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).

The stock units awarded (together with the tax gross-up payments due in
connection therewith) pursuant to the employment agreement dated as of July 1,
2002, between the Corporation and R. Chad Dreier 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. After this Award Program has been approved by the
Corporation’s stockholders, 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).

2Exhibit 10.12

 

EXHIBIT 10.12

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)”).

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, 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 3 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 percentage of earnings before
taxes and extraordinary items that will be payable with respect to each
participating Covered Officer, (iii) whether such percentage of earnings shall
be determined 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 (iv) any other objective terms and conditions that must be satisfied for
the Covered Officer to become eligible to receive payment of the annual bonus.

1

 

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. Annual
bonuses payable pursuant to the Plan shall be paid in cash.

Miscellaneous

The annual bonus payable for the 2003 fiscal year and each year thereafter
pursuant to the employment agreement of Mr. R. Chad Dreier, Chairman, Chief
Executive Officer and President of the Corporation, dated as of July 1, 2002,
is payable in accordance with the terms of this Plan.

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. After the Plan has
been approved by the Corporation’s stockholders, 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).

2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00051-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00051-of-00352.parquet"}]]