8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

April 18, 2006

Date of Report
(Date of earliest event reported)

THE RYLAND GROUP, INC.

(Exact Name of Registrant as Specified in Charter)

Maryland	1-8029		52-0849948
(State or Other Jurisdiction of Incorporation)	(Commission File Number)		(IRS Employer Identification No.)
24025 Park Sorrento, Suite 400, Calabasas, California  91302
(Address of Principal Executive Offices)		(ZIP Code)

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

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

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

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

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

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

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

Item 1.01 Entry into a Material Definitive Agreement

Pursuant to the terms of The Ryland Group, Inc. 2005 Equity Incentive Plan, the Registrant is permitted to issue restricted stock units. Copies of the forms of the agreements that the Registrant intends to use are attached hereto. Attached as Exhibit 10.1 is a form of future agreements to be entered into for senior executives and Exhibit 10.2 is a form of an amended and restated agreement to be entered into amending senior executives’ 2005 restricted stock unit grants.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit Number	Description
10.1	Stock Unit Agreement pursuant to The Ryland Group, Inc. 2005 Equity Incentive Plan
10.2	Amended and Restated Stock Unit Agreement pursuant to The Ryland Group, Inc. 2005 Equity Incentive Plan

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SIGNATURES

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

	THE RYLAND GROUP, INC.
Date: April 18, 2006	By:	/s/ Timothy J. Geckle
		Timothy J. Geckle
		Senior Vice President, General
		Counsel and Secretary

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EXHIBIT INDEX

Exhibit Number	Description
10.1	Stock Unit Agreement pursuant to The Ryland Group, Inc. 2005 Equity Incentive Plan
10.2	Amended and Restated Stock Unit Agreement pursuant to The Ryland Group, Inc. 2005 Equity Incentive Plan

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EX-10.1

Exhibit 10.1

STOCK UNIT AGREEMENT

pursuant to

THE RYLAND GROUP, INC.

2005 EQUITY INCENTIVE PLAN

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

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

1.Grant of Stock Units.

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

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

2.Vesting of Stock Units.

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

VESTING DATE	VESTING
May 1, 20	Stock Units
May 1, 20	Stock Units
May 1, 20	Stock Units

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

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

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

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

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

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

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

3.Payment of Stock Units.

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

4.Cash Dividend Equivalents.

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

5.Delivery of Stock Certificates and Cash.

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

6.Tax Matters.

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

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7.Rights of Executive With Respect to Stock Units.

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

8.Adjustments.

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

9.Dispute Resolution.

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

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

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

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

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

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EX-10.2

Exhibit 10.2

Amended and Restated

STOCK UNIT AGREEMENT

pursuant to

THE RYLAND GROUP, INC.

2005 EQUITY INCENTIVE PLAN

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

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

1.Grant of Stock Units.

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

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

2.Vesting of Stock Units.

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

VESTING DATE	VESTING
May 1, 2006	Stock Units
May 1, 2007	Stock Units
May 1, 2008	Stock Units

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

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

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

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

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

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

3.Payment of Stock Units.

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

4.Cash Dividend Equivalents.

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

5.Delivery of Stock Certificates and Cash.

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

6.Tax Matters.

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

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7.Rights of Executive With Respect to Stock Units.

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

8.Adjustments.

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

9.Dispute Resolution.

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

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

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

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

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

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