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Exhibit 10

AMENDED AND RESTATED
EMPLOYMENT AGREEMENT

(Amended and Restated as of April 20, 2005)

AMENDED AND RESTATED EMPLOYMENT AGREEMENT originally dated as of the 1^st day of July 2002, by and between The Ryland Group, Inc., a Maryland corporation (the “Company”), and R. Chad Dreier (the “Executive”).

In consideration of the mutual covenants and agreements of the parties set forth in this Agreement, and other good and valuable consideration the receipt and sufficiency of which are acknowledged, the parties agree as follows:

1. Amendment and Restatement of Employment Agreement. This Employment Agreement effective July 1, 2002 between the Company and the Executive is amended and restated as of April 20, 2005.

2. Term of Employment. The Company agrees to employ the Executive until December 30, 2010. This Agreement shall automatically renew for a one (1) year renewal period on December 30, 2010, or for a one (1) year renewal period at the end of each renewal period until terminated in accordance with the terms of this Agreement. Either party may terminate this Agreement on December 30, 2010, or at the end of each one (1) year renewal period by giving the other party written notice of termination delivered at least one hundred eighty (180) days prior to December 30, 2010, or the end of any renewal period.

3. Position and Responsibilities. The Executive shall serve as the Chairman of the Board of Directors, President and Chief Executive Officer of the Company. In his capacity as Chairman of the Board, President and Chief Executive Officer, the Executive shall be the Company’s highest ranking executive officer and shall have full authority and responsibility for formulating and administering the plans and policies of the Company subject to the control of the Board of Directors.

4. Performance of Duties. The Executive shall devote his full time attention and energies to the Company’s business and will not engage in consulting work or any business for his own account or for any person, firm or corporation. The Executive may serve as a director of other companies so long as this service does not interfere with the performance of his duties with the Company.

5. Compensation. For all services to be rendered by the Executive during the term of this Agreement, the Company shall pay and provide to the Executive:

5.1 Base Salary. The Company shall pay the Executive a Base Salary in the fixed amount of one million dollars ($1,000,000) per year for the term of this Employment Agreement. This Base Salary is paid in installments consistent with the normal payroll practices of the Company.

5.2 Annual Bonus. The Executive is eligible to receive, pursuant to the terms of the Company’s Senior Executive Performance Plan, an annual cash bonus (the “Bonus”) in respect of each fiscal year during the term of this Agreement equal to two percent (2%) of the Company’s consolidated earnings before taxes and extraordinary items as adjusted by the Compensation Committee to eliminate the effect of bonus and incentive

compensation, changes in accounting methods and nonrecurring or unusual expenses or charges. The Bonus shall be payable to the Executive in cash within sixty (60) days after the end of each fiscal year during the term of this Agreement.

5.3 Incentive Plans. The Executive shall participate in the TRG Incentive Plan and shall have an individual target performance award thereunder equal to one hundred fifty percent (150%) of the Executive’s Base Salary. The Executive shall participate in any additional incentive award programs available to executive officers of the Company. This participation is on a basis which is commensurate with the Executive’s position with the Company.

5.4 Other Benefits. The Executive is entitled to receive other employee benefits, such as disability, group life, sickness, accident and health insurance programs, executive life insurance programs and other perquisites that are available to executive officers of the Company. This participation is on a basis which is commensurate with the Executive’s position with the Company.

5.5 Stock Units.

(a) Prior Grant of Stock Units (July 2002)

Pursuant to the terms and conditions of The Ryland Group, Inc. 2002 Equity Incentive Plan (the 2002 Plan), the Company previously granted to the Executive an award of 470,000 Stock Units (adjusted to reflect the Company’s two-for-one stock split effective November 30, 2004).

Subject to Subsection (c) below, the Stock Units become vested and payable in accordance with the following vesting schedule:


			VESTING DATE
	2003

	94,000 Stock Units plus an amount equal to 2003 federal and state income and medicare taxes assuming the highest marginal tax rate.		May 1, 2003 unless the Company’s return on equity (ROE) for the period of July 1, 2002 through December 31, 2002 is less than sixty percent (60%) of the ten (10) year median return on equity of the industrial companies within the Fortune 500 for the ten (10) year period ending with the 2001 calendar year in which event this installment of the Stock Unit grant is forfeited.
	2004

	94,000 Stock Units plus an amount equal to 2004 federal and state income and medicare taxes assuming the highest marginal tax rate.		February 15, 2004 unless the Company’s ROE for the year ended December 31, 2003 is less than sixty percent (60%) of the ten (10) year median return on equity of the industrial companies within the Fortune 500 for the ten (10) year period ending with the 2002 calendar year in which event this installment of the Stock Unit grant is forfeited.


			VESTING DATE
	2005

	94,000 Stock Units plus an amount equal to 2005 federal and state income and medicare taxes assuming the highest marginal tax rate.		February 15, 2005 unless the Company’s ROE for the year ended December 31, 2004 is less than sixty percent (60%) of the ten (10) year median return on equity of the industrial companies within the Fortune 500 for the ten (10) year period ending with the 2003 calendar year in which event this installment of the Stock Unit grant is forfeited.
	2006

	94,000 Stock Units plus an amount equal to 2006 federal and state income and medicare taxes assuming the highest marginal tax rate.		March 1, 2006 unless the Company’s ROE for the year ended December 31, 2005 is less than sixty percent (60%) of the ten (10) year median return on equity of the industrial companies within the Fortune 500 for the ten (10) year period ending with the 2004 calendar year in which event this installment of the Stock Unit grant is forfeited.
	2007

	94,000 Stock Units plus an amount equal to 2007 federal and state income and medicare taxes assuming the highest marginal tax rate.		March 1, 2007 unless the Company’s ROE for the year ended December 31, 2006 is less than sixty percent (60%) of the ten (10) year median return on equity of the industrial companies within the Fortune 500 for the ten (10) year period ending with the 2005 calendar year in which event this installment of the Stock Unit grant is forfeited.

The Company’s ROE for the fiscal years used in the determination of the “Vesting Dates” above is the Company’s consolidated net earnings after taxes and extraordinary items and before the payment of dividends on the Company’s common stock divided by the Company’s beginning common stockholder’s equity during such fiscal year period, all of which is determined under generally accepted accounting principles on a basis consistent with the Company’s audited consolidated financial statements.

(b) Current Grant of Stock Units.

Upon approval of the 2005 Equity Incentive Plan (the 2005 Plan) by the stockholders of the Company at the Annual Meeting of Stockholders on April 20, 2005 and pursuant to the terms and conditions of the 2005 Plan, the Company grants to the Executive an award of 120,000 Stock Units.

Subject to Subsection (c) below, the Stock Units become vested and payable in accordance with the following vesting schedule:


			VESTING
	2008

	40,000 Stock Units plus an amount equal to 2008 federal and state income and medicare taxes assuming the highest marginal tax rate.		March 1, 2008 unless the Company’s ROE for the year ended December 31, 2007 is less than sixty percent (60%) of the ten (10) year median return on equity of the industrial companies within the Fortune 500 for the ten (10) year period ending with the 2006 calendar year in which event this installment of the Stock Unit grant is forfeited.
	2009

	40,000 Stock Units plus an amount equal to 2009 federal and state income and medicare taxes assuming the highest marginal tax rate.		March 1, 2009 unless the Company’s ROE for the year ended December 31, 2008 is less than sixty percent (60%) of the ten (10) year median return on equity of the industrial companies within the Fortune 500 for the ten (10) year period ending with the 2007 calendar year in which event this installment of the Stock Unit grant is forfeited.
	2010

	40,000 Stock Units plus an amount equal to 2010 federal and state income and medicare taxes assuming the highest marginal tax rate.		March 1, 2010 unless the Company’s ROE for the year ended December 31, 2009 is less than sixty percent (60%) of the ten (10) year median return on equity of the industrial companies within the Fortune 500 for the ten (10) year period ending with the 2008 calendar year in which event this installment of the Stock Unit grant is forfeited.

If the Executive terminates employment with the Company voluntarily or because of death, Disability, retirement or for Cause (as defined in Section 5) prior to any vesting date, all unvested Stock Units are immediately forfeited and cancelled. Notwithstanding the foregoing, all unvested Stock Units shall vest and be paid by the Company to the Executive upon the occurrence of a Change of Control (as

defined in Section 7.2(a) below) or a termination by the Company without Cause (as stated in Section 6.4).

(d) Payment of Stock Units.

Upon each vesting date on which the Executive is employed by the Company, the number of Stock Units which become vested on such date shall be paid to the Executive in an equal number of shares of Common Stock of the Company and, upon payment, such Stock Units are automatically fully paid and cancelled.

(e) Dividend Equivalents.

As of each 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.

(f) Delivery of Stock Certificates.

The stock certificate for shares of Common Stock issued to the Executive in payment of any vested Stock Unit shall be delivered to the Executive on the applicable vesting date.

(g) 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 Company until the Stock Units vest and shares of Common Stock are actually issued to the Executive.

(h) Adjustments.

The number of Stock Units shall be appropriately adjusted, as determined by the Board of Directors or Compensation Committee of the Board of Directors pursuant to the 2002 Plan or the 2005 Plan, in the event of any stock split, combination or similar transaction.

(i) 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 shall be subject to the terms and conditions of the 2002 Plan or the 2005 Plan, whichever is applicable and which are incorporated herein by this reference.

5.6 Supplemental Executive Retirement Plan. The Executive shall receive the benefit payable under the Dreier Supplemental Executive Retirement Plan (SERP) entered into and effective as of July 1, 2002 between the Company and the Executive in the amount and form and pursuant to the terms and conditions set forth in the SERP. The Company has established a grantor “rabbi” trust (the “SERP Trust”), having a commercial trustee, and to which the Company has deposited an amount of cash equal to $6,943,982.

5.7 Supplemental Executive Retirement Plan II. In order to comply with the American Jobs Creation Act and Section 409A of the Internal Revenue Code of 1986, the Company created the Supplemental Executive Retirement Plan II effective January 1, 2005 (SERP II) which is attached as Exhibit A to this Agreement. The Executive shall receive the benefit payable under SERP II in the amount and form and pursuant to the terms and

conditions set forth in SERP II. The Company shall continue to use the SERP Trust for the purpose of informally funding both the SERP and SERP II. In addition to the amounts deposited into the SERP Trust described in Section 5.6 above, the Company shall deposit an amount of cash equal to $3,471,991 per year for the six (6) year period commencing January 1, 2005. Immediately before the date of a Change of Control (as defined in Section 7.2(a)), the Company shall deposit in the SERP Trust such amount of cash sufficient to cause the total amount of the cash held in the SERP Trust to equal the present value of the combined SERP and SERP II Benefits (as defined in the respective plans) calculated using an eight percent (8%) discount rate.

5.8 Executive Retirement Health Insurance Program. The Executive shall be provided with an Executive Retirement Health Insurance Program for the Executive and the Executive’s spouse at the time that the Executive is eligible to receive his Vested SERP Benefit (as defined in the SERP) as provided within the SERP. This Program shall be provided to the Executive and the Executive’s Spouse for a period of fifteen (15) years. This Executive Retirement Health Insurance Program is at the expense of the Company and shall be equivalent to and provide the same coverage and benefits as the Company’s executive health insurance program in which the Executive participated prior to the time of eligibility to receive his Vested SERP Benefit or prior to Retirement as defined in the SERP.

6. Employment Termination.

6.1 Termination Due to Retirement or Death. In the event the Executive’s employment is terminated by reason of Retirement (as defined below) or death, the Executive’s benefits shall be determined in accordance with the Company’s Retirement, SERP or SERP II survivor’s benefits, insurance or other applicable program then in effect. Upon the effective date of termination of employment by reason of Retirement or death, the Company’s obligation to pay and provide the compensation described in Section 5 shall expire, except to the extent the benefits described in Section 5 continue after Retirement or death. In addition, the Company shall pay to the Executive or the Executive’s beneficiaries or estate a pro rata share of the Bonus for the year in which the termination occurs based on the results of the Company for that fiscal year. This pro rata Bonus shall be determined by multiplying the Bonus for the applicable fiscal year by a fraction, the numerator of which is the number of days in such fiscal year prior to the date of termination and the denominator of which is the total number of days in such fiscal year. The pro rata Bonus shall be paid within sixty (60) days of the end of the applicable fiscal year, unless Section 6.9 is applicable to this payment. “Retirement” is defined as voluntary or involuntary termination of employment for any reason other than death.

6.2 Termination Due to Disability. In the event the Executive becomes Disabled (as defined below) and is unable to perform his duties for more than one hundred twenty (120) days during any period of twelve (12) months or, in the reasonable determination of the Board of Directors, the Executive’s Disability (as defined below) will exist for more than one hundred twenty (120) days, the Company has the right to terminate the Executive’s employment and the Company’s obligation to pay and provide the compensation described in Section 5 shall expire, except to the extent the benefits described in Section 5 continue after Disability. In addition, the Company shall pay to the Executive a pro rata share of the Bonus for the year in which the termination occurs based on the results of the Company for that fiscal year determined as provided in Section 6.1. The pro rata Bonus shall be paid within sixty (60) days of the end of the applicable fiscal year, unless Section 6.9 is applicable to this payment.

The term “Disabled” or “Disability” means the incapacity of the Executive, due to injury, illness, disease or bodily or mental infirmity, to engage in the performance of his duties with the Company. A Disability is determined by the Board of Directors upon receipt of and in reliance on competent medical advice from one or more individuals selected by the Board who are qualified to give professional medical advice.

6.3 Voluntary Termination by the Executive. The Executive may terminate this Agreement at any time by giving the Board of Directors written notice of intent to terminate delivered at least ninety (90) days prior to the effective date of such termination. Upon the expiration of this ninety (90) day period, the termination by the Executive shall become effective. The Company shall pay the Executive his Base Salary through the effective date of termination plus all benefits to which the Executive has a vested right at that time. The Executive shall not receive a Bonus for the fiscal year in which voluntary termination occurs.

6.4 Termination by the Company Without Cause. The Board of Directors may terminate the Executive’s employment for reasons other than death, Disability, Retirement or for Cause (as defined in Section 6.5) by notifying the Executive in writing at least sixty (60) days prior to the effective date of termination. Upon the expiration of this sixty (60) day period, the termination by the Company is effective. Within thirty (30) days after the date of termination, unless Section 6.9 is applicable to this payment, the Company shall pay to the Executive a lump sum cash payment equal to the greater of (a) the aggregate amount of Base Salary as then in effect, payable for the remaining term of this Agreement, or (b) the aggregate amount of twenty-four (24) months of the Base Salary as in effect prior to the date of notice of termination, and shall provide to the Executive a continuation of his health and welfare benefits for the greater of (a) the remaining term of this Agreement or (b) twenty-four (24) months. If the Company is unable to provide health and welfare benefits as required by this Section 6.4, the Company shall provide equivalent benefits to the Executive or pay to the Executive a lump sum cash payment equal to the value of the benefits which the Company is unable to provide. The Company shall also pay the Executive a Bonus for the year in which termination occurs equal to the Bonus paid or payable in respect of the fiscal year prior to the year in which termination occurs multiplied by the number of fiscal years within the remaining term of this Agreement (including the fiscal year in which the termination occurs). This Bonus payment shall be paid within thirty (30) days after the date of termination, unless Section 6.9 is applicable to this payment. The Company shall also pay the Executive all benefits to which the Executive has a vested right at the time of termination as well as the SERP Benefit and SERP II Benefit. The Executive shall be fully vested in the grant of Stock Units pursuant to Section 5.5 of this Agreement, and shall be fully vested in any prior year awards that remain unvested or any awards made for the fiscal year in which termination occurs under the TRG Incentive Plan or any successor plan. All vested awards under any equity incentive or other incentive programs shall be paid notwithstanding any provision of the governing plan or program calling for forfeiture of benefits upon termination. If for any reason the Company is unable to comply with the preceding sentence, the Company shall pay the Executive a lump-sum cash payment equal to the value of the benefits or awards it is unable to vest, pay or give credit for.

6.5 Termination for Cause. The Board of Directors may terminate the Executive’s employment at any time for “Cause.” “Cause” is determined by the Board of Directors and is defined as the Executive’s (i) willful and continued failure to perform the material duties of his position after receiving notice of such failure and being given reasonable opportunity to cure such failure; (ii) willful misconduct which is demonstrably and materially injurious to the Company; or (iii) conviction of a felony. No act or failure to

act on the part of the Executive shall be considered “willful” unless it is done or omitted to be done in bad faith or without reasonable belief that the action or omission was in the best interest of the Company. In the event this Agreement is terminated by the Board of Directors for Cause, the Company shall pay the Executive his Base Salary through the date of termination and the Executive shall forfeit all rights and benefits he is entitled to receive under this Agreement including any right to a Bonus for the fiscal year in which the termination occurs, but excluding any benefits in which he has a vested right at that time to receive including any vested benefits or rights under the SERP or SERP II.

6.6 Termination for Good Reason. The Executive may terminate this Agreement for Good Reason (as defined below) by giving the Board of Directors thirty (30) days written notice of intent to terminate, which notice sets forth the facts and circumstances for the termination. Upon the expiration of this thirty (30) day period, the termination by the Executive is effective and the Company shall pay the Executive the compensation and benefits provided for and payable in accordance with and as set forth in Section 6.4.

“Good Reason” means, without the Executive’s written consent, the occurrence of any of the following:

(a) The assignment of the Executive to duties materially inconsistent with, or a reduction or alteration in the nature or status of, the Executive’s authorities, duties, responsibilities or status as an executive officer of the Company from those in effect during the preceding year;

(b) The Company requires the Executive to be based at a location which is more than fifty (50) miles from the Executive’s then current primary residence;

(c) A reduction by the Company in the Executive’s Base Salary, formula under which the Bonus is determined or other benefits provided in accordance with this Agreement; or

(d) The failure of the Company to obtain an agreement from any successor to the Company to perform this Agreement.

6.7 Change of Control Period. If the Board of Directors terminates the Executive’s employment pursuant to Section 6.4 during a Change of Control Period (as defined below) or the Executive terminates his employment pursuant to Section 6.6 during a Change of Control Period (as defined below) and the Change of Control occurs, then the Executive shall, in lieu of the rights set forth in Section 6.4 or Section 6.6, as applicable, receive the payments and benefits that are provided to the Executive pursuant to Section 7 upon a Change of Control (as defined in Section 7). A “Change of Control Period” shall mean the period of time commencing with the date on which the Company becomes aware of or enters into any discussions or negotiations that could involve a Change of Control or a proposed transaction which could result in a Change of Control, and ending on the first to occur of: (a) the effective date of the Change of Control, or (b) the date on which the proposed Change of Control is no longer discussed or proposed and is determined not to occur or be consummated or effected.

6.8 Termination After Change of Control. The Executive and the Company each may terminate this Agreement on, or at any time within six (6) months after, the effective date of a Change of Control by giving the other party written notice of intent to terminate delivered at least thirty (30) days prior to the effective date of such termination. Upon the expiration of this thirty (30) day period, the termination shall become effective. The Company shall pay the Executive his Base Salary through the effective date of termination plus all benefits to which the Executive has a vested right at that time. The

Executive shall not receive a Bonus for the fiscal year in which such a termination occurs.

6.9 Delay of Payment Pursuant to Section 409A. Should any of the payments made to the Executive in accordance with Section 6 of this Agreement be determined to be payments from a nonqualified deferred compensation plan, as defined by Section 409A of the Internal Revenue Code of 1986 as amended (the “Code”), these payments will be made no earlier than the date that is six (6) months from the Executive’s date of termination or, if Section 6.7 applies and if earlier, the effective date of a Change of Control.

7. Change of Control.

7.1 Change of Control. The following payments and benefits will be provided to the Executive by the Company (in addition to any compensation or benefits to which the Executive may be entitled under any other agreement, plan or arrangement with the Company) in the event and effective and payable as of a Change of Control of the Company:

(a) Lump Sum Cash Payment. On the date that the Change of Control occurs, the Company or any successor corporation or affiliate of the successor corporation will pay the Executive an amount equal to the Executive’s unpaid Base Salary for the remainder of the year in which the Change of Control occurs and a pro rata Bonus through the date of the Change of Control determined in accordance with Section 6.1 but based on the results of the year preceding the year in which the Change of Control occurs. Also, on or before the date of the Change of Control, the Company or any successor corporation or affiliate of the successor corporation will pay the Executive a lump sum cash payment equal to three (3) times the highest Annual Compensation (as defined below) for any of the three (3) calendar years immediately preceding the date of the Change of Control.

(b) Accelerated Vesting and Supplemental Payments. All rights, awards and benefits of the Executive provided pursuant to this Agreement, the 2002 Plan or the 2005 Plan, the TRG Incentive Plan or other incentive plan, Stock Units granted pursuant to this Agreement, any deferred compensation plans (including the Retirement Savings Opportunity Plan, Executive and Director Deferred Compensation Plan and any successor or replacement plans) and any incentive, bonus, stock option, equity incentive, restricted stock, insurance or executive insurance program, relocation program, or other benefit plans of the Company, including any successor or replacement plans for any of the foregoing plans, in which the Executive participates prior to the Change of Control shall immediately vest in full and the Executive shall receive the amount of these rights, awards and benefits in a cash lump sum payment or other form of compensation as provided in accordance with the applicable benefit, document or plan within thirty (30) days of the date of the Change of Control unless Section 6.9 is applicable to this payment. To the extent that any of the plans of the Company would not under applicable law permit accelerated vesting, the Executive will be paid supplementally or receive equivalent payments by the Company in the amount of additional benefits or payments that would be payable if full vesting had taken place under these plans as of the date of the Change of Control. All supplemental payments are provided on an unfunded basis, are not intended to meet the qualification requirements of Section 401 of the Code, and shall be payable solely from the general assets of the Company or any successor corporation or affiliate of the successor corporation.

(c) Insurance and Other Special Benefits. The Executive’s participation in the life, accident and health insurance, employee welfare benefit plans (as defined in the Employee Retirement Income Security Act of 1974), any supplemental early retirement plan other than the SERP or SERP II, executive insurance programs, personal health services allowance, health or social club benefits, and any other fringe benefits (the “Benefits”) provided to the Executive prior to the Change of Control shall be continued or equivalent benefits provided by the Company or any successor corporation or affiliate of the

successor corporation (the “Responsible Company”) at no cost to the Executive for a period of three (3) years from the date of the Change of Control. If for any reason the Responsible Company is unable to continue the Benefits as required by the preceding sentence, the Responsible Company shall pay to the Executive a lump sum cash payment equal to the value of the Benefits which the Responsible Company is unable to provide.

(d) Relocation Assistance. Should the Executive move his residence in order to pursue professional or career opportunities within two (2) years after the date of the Change of Control, he will be reimbursed by the Responsible Company for any expenses incurred in that relocation, including taxes payable on the reimbursement, as well as any reduction in value from the original purchase price of the Executive’s residence and complete reimbursement for improvements to the Executive’s residence that occurred after the date of the Executive’s purchase of the residence. Benefits under this paragraph will include assistance in and payment of all costs and commissions related to selling the Executive’s home, the payment of all moving costs, as well as all other assistance and benefits which are provided by the Company under its relocation plan as in effect prior to the Change of Control.

(e) Stock Rights. All stock options, stock units, stock appreciation rights, stock purchase rights, restricted stock rights and any similar rights which the Executive holds shall become fully vested and be exercisable on the date of the Change of Control.

(f) Outplacement Assistance. The Executive shall be reimbursed by the Responsible Company for the cost of all outplacement services obtained by the Executive within the two (2) year period after the date of the Change of Control provided the total reimbursement shall be limited to an amount equal to fifteen percent (15%) of the Executive’s Base Salary for the calendar year immediately preceding the date of the Change of Control. Alternatively, the Executive, upon request, will receive, in lieu of the foregoing reimbursement, a cash payment equal to ten percent (10%) of the Executive’s Base Salary for the calendar year immediately preceding the date of the Change of Control.

7.2 Definitions.

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

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

(ii) Any one person or more than one person acting as a group acquires, or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or group, beneficial ownership of thirty-five percent (35%) or more of the total voting power of the Company’s then outstanding voting securities;

(iii) A majority of the members of the Company’s Board of Directors is replaced during any twelve (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

(iv) Any one person or more than one person acting as a group acquires, or has acquired during the twelve (12) month period ending on

the date of the most recent acquisition by such person or group, assets of the Company that have a total gross fair market value of forty percent (40%) or more of the total gross fair market value of all of the assets of the Company immediately prior to the initiation of the acquisition.

(b) “Annual Compensation” shall mean the sum of the Base Salary paid and earned, the Bonus paid or earned, even though paid in a subsequent year, to the Executive, vested and unvested, and all amounts and the cash value of any restricted stock credited or paid to the Executive, vested and unvested, under any incentive compensation or other benefit or compensation plans of the Company in which the Executive participates, during a calendar year (including the TRG Incentive Plan, the 2002 Plan or the 2005 Plan or any successor or replacement plans).

7.3 Certain Additional Payments.

(a) Gross-Up Payment Amount.

Notwithstanding anything in this Agreement to the contrary, in the event it shall be determined that any payment or distribution by the Company to or for the benefit of the Executive, whether paid, payable, distributed or distributable pursuant to this Agreement or otherwise (a “Payment”) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) (or any successor provision) or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are collectively referred to in this Agreement as the “Excise Tax”), then the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after the payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax, imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the payment. Additionally, should the Executive be subject to additional tax and interest imposed by Section 409A of the Code, then the Executive shall be entitled to receive a Gross-Up Payment in an amount such that after the payment by the Executive of all such taxes and interest including any taxes and interest imposed on the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to any tax or interest imposed by Section 409A of the Code.

(b) Determinations.

Subject to the provisions of Section 7.3(c), all determinations required to be made under this Section 7.3, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by a nationally recognized certified public accounting firm designated by the Executive (the "Accounting Firm”), which shall provide detailed supporting calculations both to the Company and the Executive within fifteen (15) business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is requested by the Company. Any Gross-Up Payment, as determined pursuant to this Section 7.3, shall be paid by the Company to the Executive within five (5) days of the receipt of the Accounting Firm’s determination. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any determination by the Accounting Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999 and Section 409A of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments that will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 7.3(c) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive.

The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten (10) business days after the Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the thirty (30) day period following the date on which the Executive gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall:

(i) give the Company any information reasonably requested by the Company relating to such claim,

(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company,

(iii) cooperate with the Company in good faith in order effectively to contest such claim, and

(iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section, the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(d) Refunds.

If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 7.3(c), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company’s complying with the requirements of such Section) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 7.3(c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

8. Proprietary Information.

8.1 Disclosure of Information. The Executive recognizes that he has access to and knowledge of certain confidential and proprietary information of the Company which is essential to the performance of his duties under this Agreement. The Executive will not, during or after the term of his employment by the Company, in whole or in part, disclose such information to any person, firm, corporation, association or other entity for any reason or purpose whatsoever, nor shall he make use of any such information for his own purposes.

8.2 Covenants Regarding Other Employees. During the term of this Agreement and for twenty-four (24) months following the expiration or termination of this Agreement as a result of notice of nonrenewal by the Executive pursuant to Section 2 or following the effective date of a termination of this Agreement by the Executive pursuant to Section 6.3, the Executive agrees not to attempt to induce any employee of the Company to terminate his or her employment with the Company, accept employment with any competitor of the Company, or interfere in a similar manner with the business of the Company.

8.3 Specific Performance. The parties recognize that the Company will have no adequate remedy at law for breach of the requirements of this Section 8 and, in the event of such breach, the Company and the Executive agree that, in addition to the right to seek monetary damages, the Company will be entitled to a decree of specific performance, mandamus, or other appropriate remedy to enforce performance of these requirements.

9. Indemnification. The Company covenants and agrees to indemnify and hold harmless the Executive fully, completely and absolutely against any and all actions, suits, proceedings, claims, demands, judgments, costs, expenses (including reasonable attorney’s fees), losses and damages resulting from the Executive’s good faith performance of his duties under this Agreement subject to the requirements and limitations imposed by the Company’s Articles of Incorporation and By-Laws and applicable law.

10. Assignment.

10.1 Assignment by Company. This Agreement may be assigned or transferred to, and shall be binding upon and inure to the benefit of, any successor of the Company, provided the assignee successor of the Company or affiliate of a successor is jointly and severally bound by and obligated with respect to all of the terms, conditions, obligations,

rights, liabilities and responsibilities set forth in this Agreement, and any successor or affiliate of a successor shall be deemed substituted for all purposes of the “Company” under the terms of this Agreement. As used in this Agreement, the term “successor” shall mean any person, firm, corporation or business entity or affiliate of the foregoing which at any time, whether by merger, purchase or otherwise acquires all or substantially all of the assets or the business of the Company. Notwithstanding such assignment, the Company shall remain jointly and severally liable for all obligations hereunder.

10.2 Assignment by Executive. The services to be provided by the Executive to the Company are personal to the Executive and the Executive’s duties may not be assigned by the Executive. This Agreement shall, however, inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive dies while any amounts payable to the Executive remain outstanding, all such amounts shall be paid to the Executive’s designee, estate or beneficiaries.

11. Dispute Resolution. Either the Executive or the Company 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 (3) arbitrators sitting in a location agreed to by the Company and the Executive within fifty (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 Company of all expenses of such litigation or arbitration, including any legal fees and expenses and any costs and disbursements.

12. Miscellaneous.

12.1 Entire Agreement. This Agreement supersedes any prior agreements or understandings, oral or written, between the Executive and the Company with respect to the subject matter hereof, including the Amended and Restated Employment Agreement dated as of April 21, 1999 and July 1, 2002, and constitutes the entire agreement of the parties with respect thereto.

12.2 Modification. This Agreement shall not be varied, altered, modified, cancelled, changed or in any way amended except by mutual agreement of the parties in a written instrument executed by the parties or their legal representatives.

12.3 Severability. In the event that any provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason, the remaining provisions of this Agreement shall be unaffected and shall remain in full force and effect.

12.4 Tax Withholding. The Company may withhold all Federal, state, city or other taxes required pursuant to any law or governmental regulation or ruling.

12.5 Beneficiaries. The Executive may designate one or more persons or entities as the primary and/or contingent beneficiaries of any amounts to be received under this Agreement. Such designation must be in a signed writing acceptable to the Board of Directors, the Company or designees of the Board or Company. The Executive may change such designation at any time.

12.6 Board Committee. Any action taken or determination made by the Board of Directors under this Agreement may be taken or made by the Compensation Committee or any other Committee of the Board of Directors.

12.7 Governing Law. To the extent not preempted by Federal law, the provisions of this Agreement shall be construed and enforced in accordance with the laws of the State of Maryland.

12.8 Notice. Any notices, requests, demands or other communications required by or provided for in this Agreement shall be sufficient if in writing and sent by registered or certified mail to the Executive at the last address he has filed in writing with the Company or, in the case of the Company, at its principal office.

IN WITNESS WHEREOF, the Executive and the Company have executed this Agreement as of the date first above written.


THE RYLAND GROUP, INC.		EXECUTIVE:

By:	/s/ Robert E. Mellor	/s/ R. Chad Dreier

	Robert E. Mellor, Chairman	R. Chad Dreier
	Compensation Committee of the Board of Directors

By:	/s/ Robert J. Cunnion III

	Robert J. Cunnion III, Senior Vice President

Attest:	/s/ Timothy J. Geckle

	Timothy J. Geckle, Secretary

The Ryland Group, Inc.
Dreier Supplemental Executive Retirement Plan II

TABLE OF CONTENTS


			Page
ARTICLE 1		Definitions		3
ARTICLE 2		Vesting		5
	2.1	Vesting in Benefits		5
ARTICLE 3		Benefits		6
	3.1	Eligibility for Benefits		6
	3.2	Death Benefit		6
	3.3	Forms of Payment; Elections		7
	3.4	Withholding and Payroll Taxes		7
ARTICLE 4		Termination, Amendment or Modification of the Agreement		7
	4.1	Termination or Amendment		7
	4.2	Termination of Agreement		7
ARTICLE 5		Other Benefits and Agreements		8
	5.1	Coordination with Other Benefits		8
ARTICLE 6		Administration of this Agreement		8
	6.1	Committee Duties		8
	6.2	Administration Upon Change In Control		8
	6.3	Agents		9
	6.4	Binding Effect of Decisions		9
	6.5	Indemnity of Committee		9
	6.6	Company Information		9
ARTICLE 7		Claims Procedures		9
	7.1	Presentation of Claim		9
	7.2	Notification of Decision		9
	7.3	Review of a Denied Claim		10
	7.4	Decision on Review		10
	7.5	Legal Action		11
	7.6	Named Fiduciary		11
ARTICLE 8		Beneficiary Designation		11
	8.1	Beneficiary		11
	8.2	Beneficiary Designation; Change; Spousal Consent		11

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The Ryland Group, Inc.
Dreier Supplemental Executive Retirement Plan II


			Page
	8.3	Acknowledgement		11
	8.4	No Beneficiary Designation		11
	8.5	Doubt as to Beneficiary		12
	8.6	Discharge of Obligations		12
ARTICLE 9		Trust		12
	9.1	Establishment of the Trust		12
	9.2	Interrelationship of the Agreement and the Trust		12
	9.3	Deposits to the Trust		12
ARTICLE 10		Miscellaneous		13
	10.1	Status of Agreement		13
	10.2	Unsecured General Creditor		13
	10.3	Company’s Liability		13
	10.4	Nonassignability		13
	10.5	Furnishing Information		13
	10.6	Terms		13
	10.7	Captions		13
	10.8	Governing Law		14
	10.9	Validity		14
	10.10	Notice		14
	10.11	Successors		14
	10.12	Spouse’s Interest		14
	10.13	Incompetent		14
	10.14	Court Order		14
	10.15	Distribution in the Event of Taxation		15
	10.16	Legal Fees To Enforce Rights After Change in Control		15

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The Ryland Group, Inc.
Dreier Supplemental Executive Retirement Plan II

THE RYLAND GROUP, INC.
DREIER SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN II

THIS DREIER SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN II (this “Agreement”) is entered into as of January 1, 2005 between the Ryland Group, Inc. (the “Company”) and R. Chad Dreier (the “Participant”).

RECITALS

A. The Participant is the Chief Executive Officer of the Company, and the Company desires to have the continued services and counsel of the Participant.

B. The purpose of this Agreement is to provide specified benefits to the Participant as more fully described below.

AGREEMENT

NOW THEREFORE, it is mutually agreed as follows:

ARTICLE 1
Definitions

For purposes hereof, unless otherwise clearly apparent from the context, the following phrases or terms shall have the following indicated meanings:

1.1   “Beneficiary” shall mean one or more persons, trusts, estates or other entities, designated, in accordance with Article 8, that are entitled to receive the Participant’s benefits under this Agreement upon the Participant’s death.

1.2   “Beneficiary Designation Form” shall mean the form established from time to time by the Committee that the Participant completes, signs and returns to the Committee to designate a Beneficiary.

1.3   “Change in Control” shall mean the first to occur of any of the following events:

(a) The acquisition by any person other than the Company or any employee benefit plan of the Company, 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 Company’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 Company’s then outstanding voting securities;

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The Ryland Group, Inc.
Dreier Supplemental Executive Retirement Plan II

(c) A majority of the members of the Company’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 Company 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 Company immediately prior to the initiation of the acquisition.

1.4   “Claimant” shall have the meaning set forth in Section 7.1.

1.5   “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

1.6   “Committee” shall mean the committee described in Article 6.

1.7   “Company” shall mean The Ryland Group, Inc., a Maryland corporation.

1.8   “Compensation Committee” shall mean the Compensation Committee of the Board of Directors of the Company.

1.9   “Death Benefit” shall mean the Participant’s unpaid Vested SERP II Benefit (i) payable in equal annual installments over the remaining number of years and in the same amounts as such benefit would have been paid to the Participant had the Participant survived, or (ii) the present value equivalent of such benefit stream payable in a lump sum, calculated using an 8% discount rate and an end of the year payment convention for the purpose of calculating the lump sum payment.

1.10   “Election Form” shall mean the form upon which the Participant elects the manner of distribution of his SERP II Benefit and Death Benefit, and shall be made in such form as the Committee may require, including thereon a power of attorney from the Participant’s community property spouse, if any, authorizing the Participant to act on behalf of such spouse in making the election and agreeing to be irrevocably bound by any such act with respect to any community property interest under this Agreement.

1.11   “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time.

1.12   “Retirement” shall mean the Participant’s voluntary or involuntary separation of service from the Company for any reason other than death.

1.13   “SERP I” shall mean the Dreier Supplemental Executive Retirement Plan entered as of July 1, 2002 between the Company and the Participant.

1.14   “SERP Benefit” shall have the meaning set forth in Section 1.13 of the SERP I.

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The Ryland Group, Inc.
Dreier Supplemental Executive Retirement Plan II

1.15   “SERP II Benefit” shall mean a benefit in the amount that is the sum of subparagraphs (a) and (b) below:

    (a)(i) an amount per annum that when added to the SERP Benefit equals $2,400,000 per annum, payable in annual installments for a period of fifteen (15) years, or (ii) the present value of the benefit stream in this Section 1.15 (a)(i) payable in a lump sum, calculated using an 8% discount rate and an end of the year payment convention for the purpose of calculating the lump sum payment.

    (b)(i) $1,440,000 per annum, payable in annual installments for a period of fifteen (15) years, or (ii) the present value of the benefit stream in this Section 1.15(b)(i) payable in a lump sum, calculated using an 8% discount rate and an end of the year payment convention for the purpose of calculating the lump sum payment.

1.16   “Termination of Employment Without Cause” shall mean the Participant’s involuntary separation of service with the Company other than by reason of the Participant’s (i) willful and continued failure to perform the material duties of his position after receiving notice of such failure and being given reasonable opportunity to cure such failure; (ii) willful misconduct which is demonstrably and materially injurious to the Company; or (iii) conviction of a felony. No act or failure to act on the part of the Participant shall be considered “willful” unless it is done or omitted to be done in bad faith or without reasonable belief that the action or omission was in the best interest of the Company.

1.17   “Trust” shall mean the trust established pursuant to that certain Master Trust Agreement, dated as of June 27, 2002, between the Company and the trustee named therein, as amended from time to time.

1.18   “Vested SERP II Benefit” shall mean the Participant’s SERP II Benefit multiplied by the applicable vesting percentage set forth in Article 2 of this Agreement.

ARTICLE 2
Vesting

2.1 Vesting in Benefits.

(a) General. The Participant shall vest in his SERP II Benefit according to the following vesting schedules, provided that the Participant is continuously employed with the Company through the specified date of vesting:

(i) With respect to the SERP II Benefit set forth in Section 1.15 (a):

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The Ryland Group, Inc.
Dreier Supplemental Executive Retirement Plan II


Date of Vesting		Vesting Percentage
As of December 30, 2004		40%
December 30, 2005		60%
December 30, 2006		80%
December 30, 2007		100%

(ii) With respect to the SERP II Benefit set forth in Section 1.15(b):


Date of Vesting		Vesting Percentage
December 30, 2005 through December 30, 2007		0%
December 30, 2008		33 1/3%
December 30, 2009		66 2/3%
December 30, 2010		100%

(b) Accelerated Vesting. Notwithstanding anything to the contrary in this Section 2.1, the Participant shall immediately become 100% vested in the SERP II Benefit upon the occurrence of a Change in Control or a Termination of Employment Without Cause.

ARTICLE 3
Benefits

3.1 Eligibility for Benefits.

(a) SERP II Benefit. Upon the first to occur of a Change in Control or Retirement, the Participant is eligible to receive his Vested SERP II Benefit.

(b) Commencement of Payment of the SERP II Benefit. The payment of the Participant’s Vested SERP II Benefit shall commence on the earlier of the date of a Change in Control or six (6) months after the date of the Participant’s Retirement.

3.2 Death Benefit.

(a) Death Benefit. In the event of the Participant’s death before Retirement, or after Retirement but before the Participant’s Vested SERP II Benefit has been paid in full, the Participant’s Beneficiary shall receive a Death Benefit.

(b) Commencement of Death Benefit. The Death Benefit shall commence or be paid in full, depending on the Participant’s Election Form, to the Participant’s Beneficiary no later than sixty (60) days after the date on which the Committee is provided with proof that is satisfactory to the Committee of the Participant’s death.

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The Ryland Group, Inc.
Dreier Supplemental Executive Retirement Plan II

3.3 Forms of Payment; Elections. The Participant shall elect on an Election Form to have his (i) SERP II Benefit paid in a lump sum or in equal annual installments for fifteen (15) years, and (ii) Death Benefit paid in a lump sum or in equal annual installments over the remaining number of years and in the same amounts as such benefit would have been paid to the Participant had the Participant survived. The Participant may change his initial elections once during calendar year 2005 by submitting a new Election Form to the Committee by December 31, 2005. Thereafter, a new election can be made once if the Participant elected a lump sum payment in his prior election, he submits the new election on an Election Form to the Committee and that election meets the following requirements: (i) the election cannot take effect until at least twelve (12) months after the date on which the election is made, (ii) in the case of the SERP II Benefit only, the payment with respect to which such election is made must be deferred for a period of five (5) years from the date such payment would otherwise have been made, (iii) the election is for equal annual installments for fifteen (15) years, and (iv) the election is accepted by the Committee in its sole discretion. The Election Forms most recently accepted by the Committee shall govern the payout of the Participant’s SERP II Benefit and Death Benefit. If the Participant does not make an election with respect to the form of payment of his SERP II Benefit, then such benefit shall be paid in a lump sum. Similarly, if the Participant does not make an election with respect to the form of payment of his Death Benefit, then such benefit shall be paid in a lump sum.

3.4 Withholding and Payroll Taxes. The Company shall withhold from any and all benefits made under this Article 3, all federal, state and local income, employment and other taxes required to be withheld by the Company in connection with the benefits hereunder.

ARTICLE 4
Termination, Amendment or Modification of the Agreement

4.1 Termination or Amendment. This Agreement may be terminated or amended only by a written agreement executed by the Company and the Participant.

4.2 Termination of Agreement. Unless otherwise modified pursuant to Section 4.1 above, this Agreement shall terminate upon the full payment of the Participant’s Vested SERP II Benefit or Death Benefit in accordance with Article 3.

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The Ryland Group, Inc.
Dreier Supplemental Executive Retirement Plan II

ARTICLE 5
Other Benefits and Agreements

5.1 Coordination with Other Benefits. The benefits provided for the Participant under this Agreement are in addition to any other benefits available to such Participant under any other plan or program for employees of the Company. This Agreement shall supplement and shall not supersede, modify or amend any other such plan or program except as may otherwise be expressly provided.

ARTICLE 6
Administration of the Agreement

6.1 Committee Duties. This Agreement shall be administered by a Committee, which shall consist of the Compensation Committee, or such committee as the Compensation Committee shall appoint. The Committee shall have the discretion and authority to (i) make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Agreement, (ii) make benefit entitlement determinations, and (iii) decide or resolve any and all questions including interpretations of this Agreement, as may arise in connection with the Agreement.

6.2 Administration Upon Change In Control. For purposes of this Agreement, the Committee shall be the “Administrator” at all times prior to the occurrence of a Change in Control. Upon and after the occurrence of a Change in Control, the “Administrator” shall be an independent third party selected by the Compensation Committee of the Board of Directors of the Company, as such committee was constituted prior to the Change in Control. The Administrator shall have the discretionary power to determine all questions arising in connection with the administration of the Agreement and the interpretation of the Agreement and Trust including, but not limited to benefit entitlement determinations; provided, however, upon and after the occurrence of a Change in Control, the Administrator shall have no power to direct the investment of Trust assets or select any investment manager or custodial firm for the Trust. Upon and after the occurrence of a Change in Control, the Company must: (1) pay all reasonable administrative expenses and fees of the Administrator; (2) indemnify the Administrator against any costs, expenses and liabilities including, without limitation, attorney’s fees and expenses arising in connection with the performance of the Administrator hereunder, except with respect to matters resulting from the gross negligence or willful misconduct of the Administrator or its employees or agents; and (3) supply full and timely information to the Administrator on all matters relating to the Agreement, the Trust, the Participant and his Beneficiaries, the Participant’s benefits under this Agreement, the date and circumstances of the Participant’s termination of employment or death, and such other pertinent information as the Administrator may reasonably require. Upon and after a Change in Control, the Administrator may be terminated (and a replacement appointed) only with the approval of the Compensation Committee of the Board of Directors of the Company, as such committee was constituted prior to a Change in Control. Upon and after a Change in Control, the Administrator may not be terminated by the Company. If the Administrator resigns or is removed and no successor is appointed and approved by the Compensation Committee of

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The Ryland Group, Inc.
Dreier Supplemental Executive Retirement Plan II

    the Board of Directors of the Company, as such committee was constituted prior to a Change in Control, the Participant may apply to a court of competent jurisdiction for appointment of a successor third-party administrator.

6.3   Agents. In the administration of this Agreement, the Committee may employ agents and delegate to them such administrative duties as it sees fit, (including acting through a duly appointed representative), and may from time to time consult with counsel who may be counsel to the Company.

6.4   Binding Effect of Decisions. The decision or action of the Committee with respect to any question arising out of or in connection with the administration, interpretation and application of the Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Agreement.

6.5   Indemnity of Committee. The Company shall indemnify and hold harmless the members of the Committee against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Agreement, except in the case of willful misconduct by the Committee or any of its members.

6.6   Company Information. To enable the Committee to perform its functions, the Company shall supply full and timely information to the Committee on all matters relating to the compensation of the Participant, the date and circumstances of the Participant’s termination of employment or death, and such other pertinent information as the Committee may reasonably require.

ARTICLE 7
Claims Procedures

7.1 Presentation of Claim. The Participant or his Beneficiary (such Participant or Beneficiary being referred to below as a “Claimant”) may deliver to the Committee a written claim for a determination with respect to the amounts distributable to such Claimant pursuant to this Agreement. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within sixty (60) days after such notice was received by the Claimant. All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant.

7.2 Notification of Decision. The Committee shall consider a Claimant’s claim within a reasonable time, but no later than ninety (90) days after receiving the claim. If the Committee determines that special circumstances require an extension of time for processing the claim, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial ninety (90) day period. In no event shall such extension exceed a period of ninety (90) days from the end of the initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Committee expects to render the benefit determination. The Committee shall notify the Claimant in writing:

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The Ryland Group, Inc.
Dreier Supplemental Executive Retirement Plan II

(a) that the Claimant’s requested determination has been made, and that the claim has been allowed in full; or

(b) that the Committee has reached a conclusion contrary, in whole or in part, to the Claimant’s requested determination, and such notice must set forth in a manner calculated to be understood by the Claimant:

(i)   the specific reason(s) for the denial of the claim, or any part of it;

(ii)   specific reference(s) to pertinent provisions of the Agreement upon which such denial was based;

(iii)   a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary;

(iv)   an explanation of the claim review procedure set forth in Section 7.3 below; and

(v)   a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.

7.3 Review of a Denied Claim. On or before sixty (60) days after receiving a notice from the Committee that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s duly authorized representative) may file with the Committee a written request for a review of the denial of the claim. The Claimant (or the Claimant’s duly authorized representative):

(a)   may, upon request and free of charge, have reasonable access to, and copies of, all documents, records and other information relevant to the claim for benefits;

(b)   may submit written comments or other documents; and/or

(c)   may request a hearing, which the Committee, in its sole discretion, may grant.

7.4 Decision on Review. The Committee shall render its decision on review promptly, and no later than sixty (60) days after the Committee receives the Claimant’s written request for a review of the denial of the claim. If the Committee determines that special circumstances require an extension of time for processing the claim, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial sixty (60) day period. In no event shall such extension exceed a period of sixty (60) days from the end of the initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Committee expects to render the benefit determination. In rendering its decision, the Committee shall take into account all comments, documents, records and other information submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. The decision must be written in a manner calculated to be understood by the Claimant, and it must contain:

(a) specific reasons for the decision;

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The Ryland Group, Inc.
Dreier Supplemental Executive Retirement Plan II

(b)   specific reference(s) to the pertinent Agreement provisions upon which the decision was based;

(c)   a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimant’s claim for benefits; and

(d)   a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a).

7.5 Legal Action. A Claimant’s compliance with the foregoing provisions of this Article 7 is a mandatory prerequisite to a Claimant’s right to commence any legal action with respect to any claim for benefits under this Agreement.

7.6 Named Fiduciary. The Committee shall be the named fiduciary, within the meaning of ERISA, with respect to this Agreement solely for purposes of this Article 7.

ARTICLE 8
Beneficiary Designation

8.1   Beneficiary. The Participant shall have the right, at any time, to designate his Beneficiary(ies) (both primary as well as contingent) to receive any benefits payable under the Agreement to a beneficiary upon the Participant’s death. The Beneficiary designated under this Agreement may be the same as or different from the Beneficiary designation under any other plan of the Company in which the Participant participates. If the Participant does not make a Beneficiary designation under this Plan, the most recent beneficiary designation made and accepted by the Committee under SERP I shall apply for purposes of this Plan.

8.2   Beneficiary Designation; Change; Spousal Consent. The Participant shall designate his Beneficiary by completing and signing the Beneficiary Designation Form, and returning it to the Committee or its designated agent. The Participant shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Committee’s rules and procedures, as in effect from time to time. If the Participant names someone other than his or her spouse as a Beneficiary and if the Committee requires that spousal consent be obtained with respect to the Participant, a spousal consent, in the form designated by the Committee, must be signed by the Participant’s spouse and returned to the Committee. Upon the acceptance by the Committee of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled. The Committee shall be entitled to rely on the last Beneficiary Designation Form filed by the Participant and accepted by the Committee prior to his death.

8.3   Acknowledgment. No designation or change in designation of a Beneficiary shall be effective until received, accepted and acknowledged in writing by the Committee or its designated agent.

8.4   No Beneficiary Designation. If the Participant fails to designate a Beneficiary as provided in Sections 8.2 and 8.3 above or, if all designated Beneficiaries predecease the Participant or die prior to complete distribution of the Participant’s benefits, then the Participant’s spouse shall be the

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The Ryland Group, Inc.
Dreier Supplemental Executive Retirement Plan II

    designated Beneficiary. If the Participant has no surviving spouse, the benefits remaining under the Agreement shall be payable to the executor or personal representative of the Participant’s estate.

8.5   Doubt as to Beneficiary. If the Committee has any doubt as to the proper Beneficiary to receive payments pursuant to this Agreement, the Committee shall have the right, exercisable in its discretion, to cause the Company to withhold such payments until this matter is resolved to the Committee’s satisfaction.

8.6   Discharge of Obligations. The payment of benefits under this Agreement to a Beneficiary shall fully and completely discharge the Company and the Committee from all further obligations under this Agreement with respect to the Participant, and this Agreement shall terminate upon such full payment of benefits.

ARTICLE 9
Trust

9.1   Establishment of the Trust. In order to provide assets from which to fulfill the obligations to the Participant and his beneficiaries under the Agreement, the Company shall update the existing Trust to include this Plan. The Company may, in its discretion, contribute cash or other property, including securities issued by the Company, to provide for the benefit payments under the Agreement.

9.2   Interrelationship of the Agreement and the Trust. The provisions of this Agreement shall govern the rights of the Participant to receive distributions. The provisions of the Trust shall govern the rights of the Company, the Participant and the creditors of the Company to the assets transferred to the Trust. The Company shall at all times remain liable to carry out its obligations under the Agreement. The Company’s obligations under the Agreement may be satisfied with Trust assets distributed pursuant to the terms of the Trust, and any such distribution shall reduce the Company’s obligations under this Agreement.

9.3   Deposits to the Trust. The Company shall deposit into the Trust an amount of cash or, in its discretion, other assets, including if desirable securities issued by the Company, equal to $3,471,991 per annum for the six (6) year period commencing January 1, 2005. Immediately before the date of a Change in Control, the Company shall deposit into the Trust such amount of cash and other assets, if any, sufficient in amount to cause the total value of the assets held in such Trust at that time, excluding the SERP Benefit, to equal the present value of the entire SERP II Benefit set forth in both Section 1.15(a) and Section 1.15(b) calculated using an 8% discount rate and the Participant as 100% vested.

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The Ryland Group, Inc.
Dreier Supplemental Executive Retirement Plan II

ARTICLE 10
Miscellaneous

10.1   Status of Agreement. This Agreement is intended to be a plan that is not qualified within the meaning of Code Section 401(a) and that is “unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees” within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1). In addition, the Plan is intended to comply with Code Sections 409A(a)(1) to (4) and (b)(1) to (2). The Plan shall be administered and interpreted in a manner consistent with those foregoing intents.

10.2   Unsecured General Creditor. The Participant and his Beneficiaries, successors and assigns shall have no legal or equitable rights, interests or claims in any property or assets of the Company. Any and all of the Company’s assets shall be, and remain, the general, unpledged unrestricted assets of the Company.

10.3   Company’s Liability. The Company’s liability for the payment of benefits shall be defined only by this Agreement, as entered into between the Company and the Participant.

10.4   Nonassignability. Neither the Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey in advance of actual receipt, the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are, expressly declared to be, unassignable and non-transferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by the Participant or any other person, nor be transferable by operation of law in the event of the Participant’s or any other person’s bankruptcy or insolvency.

10.5   Furnishing Information. The Participant or his Beneficiary will cooperate with the Committee by furnishing any and all information requested by the Committee and take such other actions as may be requested in order to facilitate the administration of this Agreement and the payments of benefits hereunder, including but not limited to taking such physical examinations as the Committee may deem necessary.

10.6   Terms. Whenever any words are used herein in the masculine, they shall be construed as though they were in the feminine in all cases where they would so apply; and wherever any words are used herein in the singular or in the plural, they shall be construed as though they were used in the plural or the singular, as the case may be, in all cases where they would so apply.

10.7   Captions. The captions of the articles, sections and paragraphs of this Agreement are for convenience only and shall not control or affect the meaning or construction of any of its provisions.

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The Ryland Group, Inc.
Dreier Supplemental Executive Retirement Plan II

10.8   Governing Law. Subject to ERISA, the provisions of this Agreement shall be construed and interpreted according to the internal laws of the State of Maryland without regard to its conflict of laws principles.

10.9   Validity. In case any provision of this Agreement shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Agreement shall be construed and enforced as if such illegal and invalid provision had never been inserted herein.

10.10   Notice. Any notice or filing required or permitted to be given to the Committee under this Agreement shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below:

SERP Committee
The Ryland Group, Inc.
24025 Park Sorrento
Suite 400
Calabasas, California 91302

    Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.

    Any notice or filing required or permitted to be given to the Participant under this Agreement shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Participant.

10.11   Successors. The provisions of this Agreement shall bind and inure to the benefit of the Company and its successors and assigns and the Participant and his Beneficiary.

10.12   Spouse’s Interest. The interest in the benefits hereunder of a spouse of the Participant who has predeceased the Participant shall automatically pass to the Participant and shall not be transferable by such spouse in any manner, including but not limited to such spouse’s will, nor shall such interest pass under the laws of intestate succession.

10.13   Incompetent. If the Committee determines in its discretion that a benefit under this Agreement is to be paid to a minor, a person declared incompetent or to a person incapable of handling the disposition of that person’s property, the Committee may direct payment of such benefit to the guardian, legal representative or person having the care and custody of such minor, incompetent or incapable person. The Committee may require proof of minority, incompetency, incapacity or guardianship, as it may deem appropriate prior to distribution of the benefit. Any payment of a benefit shall be a payment for the account of the Participant and the Participant’s Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Agreement for such payment amount.

10.14   Court Order. The Committee is authorized to make any payments directed by court order in any action in which the Committee has been named as a party. Notwithstanding the foregoing, the Committee shall interpret this provision in a manner that is consistent with Code Section

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The Ryland Group, Inc.
Dreier Supplemental Executive Retirement Plan II

409A and other applicable tax law, including but not limited to guidance issued after the effective date of this Plan.

10.15 Distribution in the Event of Taxation.

(a) In General. If, for any reason, all or any portion of the Participant’s benefit under this Agreement becomes taxable to the Participant prior to receipt, the Participant may petition the Committee for a distribution of that portion of his or her benefit that has become taxable. Upon the grant of such a petition, which grant shall not be unreasonably withheld, the Company shall distribute to the Participant immediately available funds in an amount equal to the taxable portion of his or her benefit (which amount shall not exceed the Participant’s unpaid Vested SERP II Benefit under the Agreement). If the petition is granted, the tax liability distribution shall be made within ninety (90) days of the date when the Participant’s petition is granted. Such a distribution shall affect and reduce the benefits to be paid under this Agreement. Notwithstanding the foregoing, the Committee shall interpret this provision in a manner that is consistent with Code Section 409A and other applicable tax law, including but not limited to guidance issued after the effective date of this Plan.

(b) Trust. If the Trust terminates in accordance with its terms and benefits are distributed from the Trust to the Participant or his Beneficiary in accordance therewith, the Participant’s benefits under this Agreement shall be reduced to the extent of such distributions.

10.16 Legal Fees To Enforce Rights After Change in Control. The Company is aware that upon the occurrence of a Change in Control, the Board or the board of directors of the Company (which might then be composed of new members) or a shareholder of the Company or of any successor corporation or affiliate of a successor corporation might then cause or attempt to cause the Company or such successor to refuse to comply with its obligations under the Agreement and might cause or attempt to cause the Company to institute, or may institute, litigation seeking to deny the Participant the benefits intended under the Agreement. In these circumstances, the purpose of the Agreement could be frustrated. Accordingly, if, following a Change in Control, it should appear to the Participant that the Company or any successor corporation has failed to comply with any of its obligations under the Agreement or any agreement thereunder or, if the Company or any other person takes any action to declare the Agreement void or unenforceable or institutes any litigation or other legal action designed to deny, diminish or to recover from the Participant the benefits intended to be provided, then the Company irrevocably authorizes such Participant to retain counsel of his choice at the expense of the Company to represent such Participant in connection with the initiation or defense of any litigation or other legal action, whether by or against the Company or any director, officer, shareholder, other person or entity affiliated with the Company or any successor corporation or affiliate of a successor corporation thereto in any jurisdiction.

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


Exhibit Number		Description
	10	Amended and Restated Employment Agreement


	THE RYLAND GROUP, INC.
Date: May 4, 2005	By:	/s/ Timothy J. Geckle
		Timothy J. Geckle
		Senior Vice President, General Counsel and Secretary

A.	The Participant is the Chief Executive Officer of the Company, and the Company desires to have the continued services and counsel of the Participant.

B.	The purpose of this Agreement is to provide specified benefits to the Participant as more fully described below.

1.1	“Beneficiary” shall mean one or more persons, trusts, estates or other entities, designated, in accordance with Article 8, that are entitled to receive the Participant’s benefits under this Agreement upon the Participant’s death.

1.2	“Beneficiary Designation Form” shall mean the form established from time to time by the Committee that the Participant completes, signs and returns to the Committee to designate a Beneficiary.

1.3	“Change in Control” shall mean the first to occur of any of the following events:

	(a)	The acquisition by any person other than the Company or any employee benefit plan of the Company, 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 Company’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 Company’s then outstanding voting securities;

	(c)	A majority of the members of the Company’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 Company 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 Company immediately prior to the initiation of the acquisition.

1.4	“Claimant” shall have the meaning set forth in Section 7.1.

1.5	“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

1.6	“Committee” shall mean the committee described in Article 6.

1.7	“Company” shall mean The Ryland Group, Inc., a Maryland corporation.

1.8	“Compensation Committee” shall mean the Compensation Committee of the Board of Directors of the Company.

1.9	“Death Benefit” shall mean the Participant’s unpaid Vested SERP II Benefit (i) payable in equal annual installments over the remaining number of years and in the same amounts as such benefit would have been paid to the Participant had the Participant survived, or (ii) the present value equivalent of such benefit stream payable in a lump sum, calculated using an 8% discount rate and an end of the year payment convention for the purpose of calculating the lump sum payment.

1.10	“Election Form” shall mean the form upon which the Participant elects the manner of distribution of his SERP II Benefit and Death Benefit, and shall be made in such form as the Committee may require, including thereon a power of attorney from the Participant’s community property spouse, if any, authorizing the Participant to act on behalf of such spouse in making the election and agreeing to be irrevocably bound by any such act with respect to any community property interest under this Agreement.

1.11	“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time.

1.12	“Retirement” shall mean the Participant’s voluntary or involuntary separation of service from the Company for any reason other than death.

1.13	“SERP I” shall mean the Dreier Supplemental Executive Retirement Plan entered as of July 1, 2002 between the Company and the Participant.

1.14	“SERP Benefit” shall have the meaning set forth in Section 1.13 of the SERP I.

1.15	“SERP II Benefit” shall mean a benefit in the amount that is the sum of subparagraphs (a) and (b) below:

	(a)(i) an amount per annum that when added to the SERP Benefit equals $2,400,000 per annum, payable in annual installments for a period of fifteen (15) years, or (ii) the present value of the benefit stream in this Section 1.15 (a)(i) payable in a lump sum, calculated using an 8% discount rate and an end of the year payment convention for the purpose of calculating the lump sum payment.

	(b)(i) $1,440,000 per annum, payable in annual installments for a period of fifteen (15) years, or (ii) the present value of the benefit stream in this Section 1.15(b)(i) payable in a lump sum, calculated using an 8% discount rate and an end of the year payment convention for the purpose of calculating the lump sum payment.

1.16	“Termination of Employment Without Cause” shall mean the Participant’s involuntary separation of service with the Company other than by reason of the Participant’s (i) willful and continued failure to perform the material duties of his position after receiving notice of such failure and being given reasonable opportunity to cure such failure; (ii) willful misconduct which is demonstrably and materially injurious to the Company; or (iii) conviction of a felony. No act or failure to act on the part of the Participant shall be considered “willful” unless it is done or omitted to be done in bad faith or without reasonable belief that the action or omission was in the best interest of the Company.

1.17	“Trust” shall mean the trust established pursuant to that certain Master Trust Agreement, dated as of June 27, 2002, between the Company and the trustee named therein, as amended from time to time.

1.18	“Vested SERP II Benefit” shall mean the Participant’s SERP II Benefit multiplied by the applicable vesting percentage set forth in Article 2 of this Agreement.

	(a)	SERP II Benefit. Upon the first to occur of a Change in Control or Retirement, the Participant is eligible to receive his Vested SERP II Benefit.

	(b)	Commencement of Payment of the SERP II Benefit. The payment of the Participant’s Vested SERP II Benefit shall commence on the earlier of the date of a Change in Control or six (6) months after the date of the Participant’s Retirement.

	(a)	Death Benefit. In the event of the Participant’s death before Retirement, or after Retirement but before the Participant’s Vested SERP II Benefit has been paid in full, the Participant’s Beneficiary shall receive a Death Benefit.

	(b)	Commencement of Death Benefit. The Death Benefit shall commence or be paid in full, depending on the Participant’s Election Form, to the Participant’s Beneficiary no later than sixty (60) days after the date on which the Committee is provided with proof that is satisfactory to the Committee of the Participant’s death.

3.3	Forms of Payment; Elections. The Participant shall elect on an Election Form to have his (i) SERP II Benefit paid in a lump sum or in equal annual installments for fifteen (15) years, and (ii) Death Benefit paid in a lump sum or in equal annual installments over the remaining number of years and in the same amounts as such benefit would have been paid to the Participant had the Participant survived. The Participant may change his initial elections once during calendar year 2005 by submitting a new Election Form to the Committee by December 31, 2005. Thereafter, a new election can be made once if the Participant elected a lump sum payment in his prior election, he submits the new election on an Election Form to the Committee and that election meets the following requirements: (i) the election cannot take effect until at least twelve (12) months after the date on which the election is made, (ii) in the case of the SERP II Benefit only, the payment with respect to which such election is made must be deferred for a period of five (5) years from the date such payment would otherwise have been made, (iii) the election is for equal annual installments for fifteen (15) years, and (iv) the election is accepted by the Committee in its sole discretion. The Election Forms most recently accepted by the Committee shall govern the payout of the Participant’s SERP II Benefit and Death Benefit. If the Participant does not make an election with respect to the form of payment of his SERP II Benefit, then such benefit shall be paid in a lump sum. Similarly, if the Participant does not make an election with respect to the form of payment of his Death Benefit, then such benefit shall be paid in a lump sum.

3.4	Withholding and Payroll Taxes. The Company shall withhold from any and all benefits made under this Article 3, all federal, state and local income, employment and other taxes required to be withheld by the Company in connection with the benefits hereunder.

4.1	Termination or Amendment. This Agreement may be terminated or amended only by a written agreement executed by the Company and the Participant.

4.2	Termination of Agreement. Unless otherwise modified pursuant to Section 4.1 above, this Agreement shall terminate upon the full payment of the Participant’s Vested SERP II Benefit or Death Benefit in accordance with Article 3.

6.1	Committee Duties. This Agreement shall be administered by a Committee, which shall consist of the Compensation Committee, or such committee as the Compensation Committee shall appoint. The Committee shall have the discretion and authority to (i) make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Agreement, (ii) make benefit entitlement determinations, and (iii) decide or resolve any and all questions including interpretations of this Agreement, as may arise in connection with the Agreement.

6.2	Administration Upon Change In Control. For purposes of this Agreement, the Committee shall be the “Administrator” at all times prior to the occurrence of a Change in Control. Upon and after the occurrence of a Change in Control, the “Administrator” shall be an independent third party selected by the Compensation Committee of the Board of Directors of the Company, as such committee was constituted prior to the Change in Control. The Administrator shall have the discretionary power to determine all questions arising in connection with the administration of the Agreement and the interpretation of the Agreement and Trust including, but not limited to benefit entitlement determinations; provided, however, upon and after the occurrence of a Change in Control, the Administrator shall have no power to direct the investment of Trust assets or select any investment manager or custodial firm for the Trust. Upon and after the occurrence of a Change in Control, the Company must: (1) pay all reasonable administrative expenses and fees of the Administrator; (2) indemnify the Administrator against any costs, expenses and liabilities including, without limitation, attorney’s fees and expenses arising in connection with the performance of the Administrator hereunder, except with respect to matters resulting from the gross negligence or willful misconduct of the Administrator or its employees or agents; and (3) supply full and timely information to the Administrator on all matters relating to the Agreement, the Trust, the Participant and his Beneficiaries, the Participant’s benefits under this Agreement, the date and circumstances of the Participant’s termination of employment or death, and such other pertinent information as the Administrator may reasonably require. Upon and after a Change in Control, the Administrator may be terminated (and a replacement appointed) only with the approval of the Compensation Committee of the Board of Directors of the Company, as such committee was constituted prior to a Change in Control. Upon and after a Change in Control, the Administrator may not be terminated by the Company. If the Administrator resigns or is removed and no successor is appointed and approved by the Compensation Committee of

	the Board of Directors of the Company, as such committee was constituted prior to a Change in Control, the Participant may apply to a court of competent jurisdiction for appointment of a successor third-party administrator.

6.3	Agents. In the administration of this Agreement, the Committee may employ agents and delegate to them such administrative duties as it sees fit, (including acting through a duly appointed representative), and may from time to time consult with counsel who may be counsel to the Company.

6.4	Binding Effect of Decisions. The decision or action of the Committee with respect to any question arising out of or in connection with the administration, interpretation and application of the Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Agreement.

6.5	Indemnity of Committee. The Company shall indemnify and hold harmless the members of the Committee against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Agreement, except in the case of willful misconduct by the Committee or any of its members.

6.6	Company Information. To enable the Committee to perform its functions, the Company shall supply full and timely information to the Committee on all matters relating to the compensation of the Participant, the date and circumstances of the Participant’s termination of employment or death, and such other pertinent information as the Committee may reasonably require.

7.1	Presentation of Claim. The Participant or his Beneficiary (such Participant or Beneficiary being referred to below as a “Claimant”) may deliver to the Committee a written claim for a determination with respect to the amounts distributable to such Claimant pursuant to this Agreement. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within sixty (60) days after such notice was received by the Claimant. All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant.

7.2	Notification of Decision. The Committee shall consider a Claimant’s claim within a reasonable time, but no later than ninety (90) days after receiving the claim. If the Committee determines that special circumstances require an extension of time for processing the claim, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial ninety (90) day period. In no event shall such extension exceed a period of ninety (90) days from the end of the initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Committee expects to render the benefit determination. The Committee shall notify the Claimant in writing:

	(a)	that the Claimant’s requested determination has been made, and that the claim has been allowed in full; or

	(b)	that the Committee has reached a conclusion contrary, in whole or in part, to the Claimant’s requested determination, and such notice must set forth in a manner calculated to be understood by the Claimant:

	(i)	the specific reason(s) for the denial of the claim, or any part of it;

	(ii)	specific reference(s) to pertinent provisions of the Agreement upon which such denial was based;

	(iii)	a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary;

	(iv)	an explanation of the claim review procedure set forth in Section 7.3 below; and

	(v)	a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.

	(a)	may, upon request and free of charge, have reasonable access to, and copies of, all documents, records and other information relevant to the claim for benefits;

	(b)	may submit written comments or other documents; and/or

	(c)	may request a hearing, which the Committee, in its sole discretion, may grant.

	(b)	specific reference(s) to the pertinent Agreement provisions upon which the decision was based;

	(c)	a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimant’s claim for benefits; and

	(d)	a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a).

7.5	Legal Action. A Claimant’s compliance with the foregoing provisions of this Article 7 is a mandatory prerequisite to a Claimant’s right to commence any legal action with respect to any claim for benefits under this Agreement.

7.6	Named Fiduciary. The Committee shall be the named fiduciary, within the meaning of ERISA, with respect to this Agreement solely for purposes of this Article 7.

8.1	Beneficiary. The Participant shall have the right, at any time, to designate his Beneficiary(ies) (both primary as well as contingent) to receive any benefits payable under the Agreement to a beneficiary upon the Participant’s death. The Beneficiary designated under this Agreement may be the same as or different from the Beneficiary designation under any other plan of the Company in which the Participant participates. If the Participant does not make a Beneficiary designation under this Plan, the most recent beneficiary designation made and accepted by the Committee under SERP I shall apply for purposes of this Plan.

8.2	Beneficiary Designation; Change; Spousal Consent. The Participant shall designate his Beneficiary by completing and signing the Beneficiary Designation Form, and returning it to the Committee or its designated agent. The Participant shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Committee’s rules and procedures, as in effect from time to time. If the Participant names someone other than his or her spouse as a Beneficiary and if the Committee requires that spousal consent be obtained with respect to the Participant, a spousal consent, in the form designated by the Committee, must be signed by the Participant’s spouse and returned to the Committee. Upon the acceptance by the Committee of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled. The Committee shall be entitled to rely on the last Beneficiary Designation Form filed by the Participant and accepted by the Committee prior to his death.

8.3	Acknowledgment. No designation or change in designation of a Beneficiary shall be effective until received, accepted and acknowledged in writing by the Committee or its designated agent.

8.4	No Beneficiary Designation. If the Participant fails to designate a Beneficiary as provided in Sections 8.2 and 8.3 above or, if all designated Beneficiaries predecease the Participant or die prior to complete distribution of the Participant’s benefits, then the Participant’s spouse shall be the

	designated Beneficiary. If the Participant has no surviving spouse, the benefits remaining under the Agreement shall be payable to the executor or personal representative of the Participant’s estate.

8.5	Doubt as to Beneficiary. If the Committee has any doubt as to the proper Beneficiary to receive payments pursuant to this Agreement, the Committee shall have the right, exercisable in its discretion, to cause the Company to withhold such payments until this matter is resolved to the Committee’s satisfaction.

8.6	Discharge of Obligations. The payment of benefits under this Agreement to a Beneficiary shall fully and completely discharge the Company and the Committee from all further obligations under this Agreement with respect to the Participant, and this Agreement shall terminate upon such full payment of benefits.

9.1	Establishment of the Trust. In order to provide assets from which to fulfill the obligations to the Participant and his beneficiaries under the Agreement, the Company shall update the existing Trust to include this Plan. The Company may, in its discretion, contribute cash or other property, including securities issued by the Company, to provide for the benefit payments under the Agreement.

9.2	Interrelationship of the Agreement and the Trust. The provisions of this Agreement shall govern the rights of the Participant to receive distributions. The provisions of the Trust shall govern the rights of the Company, the Participant and the creditors of the Company to the assets transferred to the Trust. The Company shall at all times remain liable to carry out its obligations under the Agreement. The Company’s obligations under the Agreement may be satisfied with Trust assets distributed pursuant to the terms of the Trust, and any such distribution shall reduce the Company’s obligations under this Agreement.

9.3	Deposits to the Trust. The Company shall deposit into the Trust an amount of cash or, in its discretion, other assets, including if desirable securities issued by the Company, equal to $3,471,991 per annum for the six (6) year period commencing January 1, 2005. Immediately before the date of a Change in Control, the Company shall deposit into the Trust such amount of cash and other assets, if any, sufficient in amount to cause the total value of the assets held in such Trust at that time, excluding the SERP Benefit, to equal the present value of the entire SERP II Benefit set forth in both Section 1.15(a) and Section 1.15(b) calculated using an 8% discount rate and the Participant as 100% vested.

10.1	Status of Agreement. This Agreement is intended to be a plan that is not qualified within the meaning of Code Section 401(a) and that is “unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees” within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1). In addition, the Plan is intended to comply with Code Sections 409A(a)(1) to (4) and (b)(1) to (2). The Plan shall be administered and interpreted in a manner consistent with those foregoing intents.

10.2	Unsecured General Creditor. The Participant and his Beneficiaries, successors and assigns shall have no legal or equitable rights, interests or claims in any property or assets of the Company. Any and all of the Company’s assets shall be, and remain, the general, unpledged unrestricted assets of the Company.

10.3	Company’s Liability. The Company’s liability for the payment of benefits shall be defined only by this Agreement, as entered into between the Company and the Participant.

10.4	Nonassignability. Neither the Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey in advance of actual receipt, the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are, expressly declared to be, unassignable and non-transferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by the Participant or any other person, nor be transferable by operation of law in the event of the Participant’s or any other person’s bankruptcy or insolvency.

10.5	Furnishing Information. The Participant or his Beneficiary will cooperate with the Committee by furnishing any and all information requested by the Committee and take such other actions as may be requested in order to facilitate the administration of this Agreement and the payments of benefits hereunder, including but not limited to taking such physical examinations as the Committee may deem necessary.

10.6	Terms. Whenever any words are used herein in the masculine, they shall be construed as though they were in the feminine in all cases where they would so apply; and wherever any words are used herein in the singular or in the plural, they shall be construed as though they were used in the plural or the singular, as the case may be, in all cases where they would so apply.

10.7	Captions. The captions of the articles, sections and paragraphs of this Agreement are for convenience only and shall not control or affect the meaning or construction of any of its provisions.

10.8	Governing Law. Subject to ERISA, the provisions of this Agreement shall be construed and interpreted according to the internal laws of the State of Maryland without regard to its conflict of laws principles.

10.9	Validity. In case any provision of this Agreement shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Agreement shall be construed and enforced as if such illegal and invalid provision had never been inserted herein.

10.10	Notice. Any notice or filing required or permitted to be given to the Committee under this Agreement shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below:

	Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.

	Any notice or filing required or permitted to be given to the Participant under this Agreement shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Participant.

10.11	Successors. The provisions of this Agreement shall bind and inure to the benefit of the Company and its successors and assigns and the Participant and his Beneficiary.

10.12	Spouse’s Interest. The interest in the benefits hereunder of a spouse of the Participant who has predeceased the Participant shall automatically pass to the Participant and shall not be transferable by such spouse in any manner, including but not limited to such spouse’s will, nor shall such interest pass under the laws of intestate succession.

10.13	Incompetent. If the Committee determines in its discretion that a benefit under this Agreement is to be paid to a minor, a person declared incompetent or to a person incapable of handling the disposition of that person’s property, the Committee may direct payment of such benefit to the guardian, legal representative or person having the care and custody of such minor, incompetent or incapable person. The Committee may require proof of minority, incompetency, incapacity or guardianship, as it may deem appropriate prior to distribution of the benefit. Any payment of a benefit shall be a payment for the account of the Participant and the Participant’s Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Agreement for such payment amount.

10.14	Court Order. The Committee is authorized to make any payments directed by court order in any action in which the Committee has been named as a party. Notwithstanding the foregoing, the Committee shall interpret this provision in a manner that is consistent with Code Section

	(a)	In General. If, for any reason, all or any portion of the Participant’s benefit under this Agreement becomes taxable to the Participant prior to receipt, the Participant may petition the Committee for a distribution of that portion of his or her benefit that has become taxable. Upon the grant of such a petition, which grant shall not be unreasonably withheld, the Company shall distribute to the Participant immediately available funds in an amount equal to the taxable portion of his or her benefit (which amount shall not exceed the Participant’s unpaid Vested SERP II Benefit under the Agreement). If the petition is granted, the tax liability distribution shall be made within ninety (90) days of the date when the Participant’s petition is granted. Such a distribution shall affect and reduce the benefits to be paid under this Agreement. Notwithstanding the foregoing, the Committee shall interpret this provision in a manner that is consistent with Code Section 409A and other applicable tax law, including but not limited to guidance issued after the effective date of this Plan.

	(b)	Trust. If the Trust terminates in accordance with its terms and benefits are distributed from the Trust to the Participant or his Beneficiary in accordance therewith, the Participant’s benefits under this Agreement shall be reduced to the extent of such distributions.


		“Company” The Ryland Group, Inc., a Maryland corporation

		By:		/s/ Robert J. Cunnion, III

				Robert J. Cunnion, III
				Senior Vice President

		Attest:		/s/ Timothy J. Geckle

				Timothy J. Geckle Secretary

		Date:		April 20, 2005


		“Participant” R. Chad Dreier

		/s/ R. Chad Dreier


		Date:		April 20, 2005