8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

April 29, 2005
Date of Report
(Date of earliest event reported)

THE RYLAND GROUP, INC.

(Exact Name of Registrant as Specified in Charter)

Maryland
(State or Other Jurisdiction of Incorporation) 001-08029
(Commission File Number) 52-0849948
(IRS Employer Identification No.)

24025 Park Sorrento, Suite 400, Calabasas, California 91302
(Address of Principal Executive Offices)          (ZIP Code)

Registrant’s telephone number, including area code: (818) 223-7500

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

[   ]    Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[   ]    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[   ]    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[   ]    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement

Pursuant to the terms of The Ryland Group, Inc. 2005 Equity Incentive Plan, the Registrant is permitted to issue stock options and restricted stock units, and pursuant to The Ryland Group, Inc. 2004 Non-Employee Director Equity Plan, the Registrant is permitted to issue stock options. A copy of the forms of these agreements that the Registrant intends to use are attached hereto as Exhibits 10.1 through 10.3.

Item 9.01 Financial Statements and Exhibits

(c)   Exhibits

Exhibit Number		Description
	10.1	Non-Qualified Stock Option Agreement pursuant to The Ryland Group, Inc. 2005 Equity Incentive Plan
	10.2	Stock Unit Agreement pursuant to The Ryland Group, Inc. 2005 Equity Incentive Plan
	10.3	The Ryland Group, Inc. 2004 Non-Employee Director Equity Plan Stock Option Agreement

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	THE RYLAND GROUP, INC.
Date: April 29, 2005	By:	/s/ Timothy J. Geckle
		Timothy J. Geckle
		Senior Vice President, General Counsel and Secretary

EXHIBIT INDEX

Exhibit Number	Description
10.1	Non-Qualified Stock Option Agreement pursuant to The Ryland Group, Inc. 2005 Equity Incentive Plan
10.2	Stock Unit Agreement pursuant to The Ryland Group, Inc. 2005 Equity Incentive Plan
10.3	The Ryland Group, Inc. 2004 Non-Employee Director Equity Plan Stock Option Agreement

EX-10.1

EXHIBIT 10.1

Non-Qualified Stock Option Agreement
pursuant to
The Ryland Group, Inc.
2005 Equity Incentive Plan

AGREEMENT, dated ____________, 200___, between THE RYLAND GROUP, INC. (the “Corporation”) and ____________ (the “Optionee”).

WHEREAS, pursuant to The Ryland Group, Inc. 2005 Equity Incentive Plan (the “Plan”), the Board of Directors wishes to provide participation in the appreciated equity value of the Corporation by providing the Optionee with a grant of non-qualified stock options related to Ryland Common Stock (“Common Stock”), and thereby increase the Optionee’s proprietary interest in the success of the Corporation; and

WHEREAS, the Optionee desires to accept said grant in accordance with the terms and provisions of the Plan and this Agreement.

NOW THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the Corporation and the Optionee agree as follows:

1. Grant of Option

Subject to the terms and conditions set forth herein, the Corporation hereby grants to the Optionee during the period ending at the close of business five years from the date hereof (the “Option Period”), the option to purchase (the “Option”) from the Corporation at a price of $______ per share up to but not exceeding in the aggregate ______ shares of the Corporation’s Common Stock. THE OPTION GRANTED UNDER THIS AGREEMENT SHALL NOT BE TREATED AS AN “INCENTIVE STOCK OPTION” WITHIN THE MEANING OF SECTION 422 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.

2. Exercise of Option

The Option granted in paragraph 1 may be exercised in whole or in part in accordance with the following vesting schedule.
The aggregate number of shares of Common Stock optioned by this Agreement shall be divided into three installments.

     The first installment for ______ shares may be exercised in whole or in part beginning _________, 200___.

     The second installment for ______ shares may be exercised in whole or in part beginning _________, 200___.

     The third installment for ______ shares may be exercised in whole or in part beginning _________, 200___.

In case an installment is not immediately exercisable, the Board of Directors or the Compensation Committee of the Board may in its discretion accelerate the time at which the installment may be exercised. To the extent not exercised, installments shall accumulate and be exercisable by the Optionee during the Option Period. Continued accrual of installments shall cease immediately upon termination of employment for any reason whatsoever, subject to acceleration by the Board of Directors or the Compensation Committee.

3. Method of Exercising Option and Payment of Exercise Price

The Option shall be exercised by delivery of a written Notice of Exercise stating the number of shares the Optionee desires to purchase. The form of Notice of Exercise is attached to this Agreement as Exhibit A. Notice(s) should be delivered to Valerie Zook, The Ryland Group, Inc., 24025 Park Sorrento, Suite 400, Calabasas, CA 91302; Telephone No. (818) 223-7558; Facsimile No. (818) 223-7675.

The Optionee shall pay the exercise price in the following ways:

     (a) cash payment (by certified check, bank draft or money order payable to the order of the Corporation);

     (b) if approved by the Corporation, cash payment may be made from the proceeds of an immediate sale of Common Stock receivable upon the exercise of the Option; or

     (c) if approved by the Corporation, delivery of Common Stock (including executed stock powers attached thereto).

The payment of the exercise price shall be delivered to Valerie Zook together with the Notice of Exercise.

The Corporation shall, subject to the receipt of withholding tax, issue to the Optionee the stock certificate for the number of shares of Common Stock with respect to which the Option is exercised.

The value of shares of Common Stock used as payment for the exercise of an Option shall be the closing price of such shares on the New York Stock Exchange on the date of exercise of an Option or if no longer listed on such exchange, as otherwise determined by the Corporation, the Board of Directors or the Compensation Committee of the Board.

4. Certain Tax Matters

Optionee agrees that the Corporation may withhold any federal, state or local taxes upon exercise of an Option, at such time and upon such terms and conditions as required by law or determined by the Corporation.

5. Termination

The Option granted hereby shall terminate upon the happening of the earliest of the following events:

     (a) The expiration of five years from the date of this Agreement;

     (b) The expiration of 90 days after the date of termination of the Optionee’s employment, except in the case of death, disability or retirement. During this period, the Optionee shall have the right to exercise the Option to the extent it is exercisable on the termination date.

     (c) The expiration of three years after the date of death of the Optionee if death occurs while the Optionee is in the employ of the Corporation. During this period, the Optionee’s estate, personal representative or beneficiary shall have the right to exercise the Option to the extent it is exercisable on the date of death.

     (d) The expiration of three years after the date the Optionee’s employment is terminated due to disability or retirement. During this period, the Optionee shall have the right to exercise the Option to the extent it is exercisable on the date of termination due to disability or retirement.

The Board of Directors or the Compensation Committee of the Board shall have absolute discretion to determine whether any other termination of Optionee’s employment is to be considered as retirement for the purposes of this Agreement and whether an authorized leave of absence or otherwise shall constitute a termination of employment for the purposes of this Agreement. Any determination made by the Board of Directors or the Compensation Committee of the Board with respect to any matter referred to in this paragraph 5 shall be final and conclusive on all persons affected thereby.

6. Assignability

The Option is not assignable or transferable except by will or the laws of descent and distribution. The Option is exercisable during the Optionee’s lifetime only by the Optionee or the Optionee’s guardian or legal representative.

7. Rights as a Stockholder

The Optionee shall have no rights as a stockholder with respect to any shares covered by the Option until the date of issuance of the shares to the Optionee, and the Corporation has receipt of payment for the full exercise price of the Option shares. No adjustment will be made for dividends, distributions or other rights for which the record date is prior to the date of issuance of the shares of Common Stock related to the exercise of an Option.

8. Merger, Consolidation or Share Exchange

After any merger, consolidation or share exchange in which the Corporation is the surviving or resulting corporation, the Optionee shall be entitled, upon the exercise of an Option, to receive the number and class of shares of stock or other consideration to which the Optionee would have been entitled, if, immediately prior to such merger, consolidation or share exchange, the Optionee had exercised the Option in accordance with and subject to the terms of this Agreement. If the Corporation is not the surviving or resulting corporation in any merger, consolidation or share exchange, the surviving or resulting corporation shall tender stock options to purchase its shares on terms and conditions that substantially preserve the rights and benefits under this Option.

9. No Employment Agreement

Nothing in this Agreement or in the Plan shall confer any right to continued employment with the Corporation or its subsidiaries nor restrict the termination of the employment relationship with the Optionee at any time.

10. Employee’s Agreement

Notwithstanding any other provision of this Agreement, Optionee agrees that Optionee will not exercise any Option and the Corporation shall not be obligated to deliver any shares of Common Stock or make any cash payment if counsel to the Corporation determines such exercise, delivery or payment would violate any law or regulation of any governmental authority or agreement to which the Corporation is subject.

11. Resolution of Disputes

Any dispute or disagreement which shall arise under, or as a result of, or pursuant to, this Agreement shall be determined by the Board of Directors of the Corporation or the Compensation Committee of the Board of Directors in its absolute discretion, and any determination by the Board of Directors or the Compensation Committee under or pursuant to this Agreement and any interpretation by the Board of Directors or the Compensation Committee of the terms of this Agreement or the Plan shall be final, binding and conclusive on all persons affected thereby.

12. Amendments

The Board of Directors of the Corporation or the Compensation Committee of the Board of Directors shall have the right, in its absolute discretion, to alter or amend this Agreement in any manner, and any alteration or amendment of this Agreement by the Board of Directors or the Compensation Committee shall, upon adoption thereof by the Board of Directors or the Compensation Committee, become and be binding and conclusive on all

persons affected thereby without requirement of consent or other action with respect thereto. The Corporation shall give written notice to the Optionee of any alteration or amendment of this Agreement by the Board or the Compensation Committee as promptly as practical after the adoption thereof.

13. Construction

This Agreement has been entered into in accordance with the terms of the Plan, and wherever a conflict may arise between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control.

The Optionee hereby agrees by acceptance of the Option that the terms, conditions and provisions of this Agreement and the Plan shall determine the rights and obligations of the Corporation and the Optionee in connection with the Option.

THE RYLAND GROUP, INC.
 
 

By:  

EX-10.2

EXHIBIT 10.2

STOCK UNIT AGREEMENT
pursuant to
THE RYLAND GROUP, INC.
2005 EQUITY INCENTIVE PLAN

     AGREEMENT, dated ____________, 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, 20__ 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
	______ Stock Units
	______ Stock Units
	______ 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 are paid to the Executive in an equal number of shares of Common Stock of the Corporation and, 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.

          The stock certificate for shares of Common Stock 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.

     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

2

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

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EX-10.3

EXHIBIT 10.3

The Ryland Group, Inc.
2004 Non-Employee Director Equity Plan
Stock Option Agreement

     AGREEMENT, dated this ______ day of _________, 200__, between THE RYLAND GROUP, INC. (the “Corporation”) and ____________ (the “Director”).

1.   Grant of Option

     Subject to the terms and conditions set forth herein and in the 2004 Non-Employee Director Equity Plan (the “Plan”), the Corporation grants to the Director during the period beginning on the date of this Agreement and ending at the close of business on ____________, 20__ (the “Option Period”), the option to purchase (the “Option”) from the Corporation at a price of $______ per share up to but not exceeding in the aggregate ___shares of the Corporation’s common stock. The Option is a non-statutory stock option not intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended.

2.   Exercise of Option

     The Option granted in Paragraph 1 may be exercised in whole or in part beginning _________, 200__.

3.   Method of Exercising Option and Payment of Exercise Price

     The Option shall be exercised by delivery of a written Notice of Exercise stating the number of shares the Director desires to purchase. The form of Notice of Exercise is attached to this Agreement as Exhibit A. Notice(s) should be delivered to Val Zook, The Ryland Group, Inc., 24025 Park Sorrento, Suite 400, Calabasas, California 91302; Telephone No. (818) 223-7558; Facsimile No. (818) 223-7675.

     The Director shall pay the exercise price in the following ways:

(a)	Cash or check payable to the order of the Corporation;
(b)	Delivery of common stock (including executed stock powers attached thereto);
(c)	Broker-assisted cashless exercise in accordance with Regulation T of the Board of Governors of the Federal Reserve System through a brokerage firm approved by the Committee; or
(d)	Any combination of the foregoing methods.

     The value of shares of common stock used as payment for the exercise of an Option shall be the closing price of such shares on the New York Stock Exchange on the date of exercise of an Option.

4.   Termination

     The Option shall terminate upon the happening of the following events:

(a)	The expiration of 10 years from the date of this Agreement; or
(b)	The expiration of three years after the date of termination of the Director’s service on the Board of Directors.

5.   Assignability

     The Option is not assignable or transferable except by will or the laws of descent and distribution. The Option is exercisable during the Director’s lifetime only by the Director or the Director’s guardian or legal representative.

6.   Rights as a Stockholder

     The Director shall have no rights as a stockholder with respect to any shares covered by the Option until the date of issuance of the shares to the Director and then only from the date of the stock certificate. No adjustment will be made for dividends, distributions or other rights for which the record date is prior to the date of the stock certificate for the shares of common stock related to the exercise of an Option.

7.   Director’s Agreement

     Notwithstanding any other provision of this Agreement, the Director agrees that Director will not exercise any Option, and the Corporation shall not be obligated to deliver any shares of common stock or make any cash payment, if counsel to the Corporation determines such exercise, delivery or payment would violate any law or regulation or agreement to which the Corporation is subject.

8.   Construction

     This Agreement has been entered into in accordance with the terms of the Plan, and the terms of the Plan shall control and govern at all times the terms and conditions of this Option. The Director agrees by acceptance of the Option that the terms, conditions and provisions of this Agreement and the Plan shall determine the rights and obligations of the Corporation and the Director in connection with the Option.

THE RYLAND GROUP, INC.
By:
	R. Chad Dreier
	Chairman, President and Chief Executive Officer