SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
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14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Materials Pursuant to sec.240.14a-11(c) or sec.240.14a-12
THE RYLAND GROUP, INC.
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(Name of Registrant as Specified in Charter)
THE RYLAND GROUP, INC.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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THE RYLAND GROUP, INC.
21800 Burbank Boulevard, Suite 300
Woodland Hills, California 91367
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders:
Notice is given that the Annual Meeting of Stockholders of The Ryland
Group, Inc. will be held at The Ritz-Carlton, 4375 Admiralty Way, Marina del
Rey, California, on April 26, 2000, at 9:00 a.m., Pacific Time, for the
following purposes:
1. To elect eight Directors to serve until the next Annual Meeting of
Stockholders and until their successors are elected and shall qualify.
2. To approve the 2000 Non-Employee Director Equity Plan.
3. To act upon other business properly brought before the meeting.
Stockholders of record at the close of business on February 17, 2000, are
entitled to vote at the meeting or any adjournment thereof. Please date and sign
the enclosed proxy and return it in the accompanying postage-paid return
envelope. You may revoke your proxy at any time prior to its exercise by filing
with the Secretary of the Corporation an instrument of revocation or a duly
executed proxy bearing a later date. Your proxy may also be revoked by attending
the meeting and voting in person.
By Order of the Board of Directors
Timothy J. Geckle
Secretary
March 15, 2000
PROXY STATEMENT
The enclosed proxy is being solicited by The Ryland Group, Inc. (the
"Corporation") for use at the Annual Meeting of Stockholders on April 26, 2000.
This Proxy Statement and proxy are first being distributed to stockholders on
approximately March 15, 2000. The Annual Report of the Corporation for the year
ended December 31, 1999, including financial statements and accompanying notes,
is enclosed with this Proxy Statement. A proxy may be revoked by a stockholder
at any time prior to its exercise by filing with the Secretary of the
Corporation an instrument of revocation or a duly executed proxy bearing a later
date. It may also be revoked by attendance at the meeting and election to vote
in person.
The election of Directors requires a plurality of the votes cast with a quorum
present. For the election of Directors, abstentions and broker non-votes are not
votes cast and have no effect on the plurality vote required.
The approval of the 2000 Non-Employee Director Equity Plan requires the
affirmative vote of a majority of the votes cast in person or by proxy with a
quorum present. Abstentions and broker non-votes will not be considered votes
cast for the foregoing purpose.
The Corporation will utilize the services of ChaseMellon Consulting Services in
the solicitation of proxies for this Annual Meeting of Stockholders. The
Corporation may also solicit proxies by mail, personal interview or telephone by
officers and other management employees of the Corporation, who will receive no
additional compensation for their services. The cost of solicitation of proxies
is borne by the Corporation. Arrangements will be made by the Corporation for
the forwarding to beneficial owners, at the Corporation's expense, of soliciting
materials by brokerage firms and others.
Only stockholders of record at the close of business on February 17, 2000, are
entitled to vote at the meeting or any adjournment thereof. The only outstanding
securities of the Corporation entitled to vote at the meeting are shares of
Common Stock and shares of ESOP Series A Convertible Preferred Stock. The
holders of Preferred Stock vote together with the holders of Common Stock as one
class. There were 13,555,560 shares of Common Stock outstanding as of the close
of business on February 17, 2000. There were 341,206 shares of Preferred Stock
outstanding as of the close of business on February 17, 2000. Neither Common
Stock nor Preferred Stock has cumulative voting rights. Holders of Common Stock
and Preferred Stock are entitled to one vote per share on all matters.
- 1 -
ELECTION OF DIRECTORS
All Directors (eight in number) are proposed for election to hold office until
the next Annual Meeting of Stockholders and until the election and qualification
of their successors. The proxies solicited, unless directed to the contrary,
will be voted FOR the eight persons named below.
Management has no reason to believe that any nominee is unable or unwilling to
serve as a Director; but if that should occur for any reason, the proxy holders
reserve the right to vote for another person of their choice.
Name, Age and
Year in which
First Elected
a Director Principal Occupation for Five Prior Years and Other Information
- ------------- ---------------------------------------------------------------
R. Chad Dreier Chairman of the Board of Directors, President and Chief Executive Officer of
52 (1993) the Corporation.
Leslie M. Frecon President, L Frecon Enterprises; Senior Vice President, Corporate Finance, of
46 (1998) General Mills Corporation, until 1998; Director of The Resource Companies.
William L. Jews President and Chief Executive Officer of CareFirst, Inc.; President and Chief
48 (1994) Executive Officer of Blue Cross Blue Shield of Maryland, Inc., until 1998;
Director of Crown Central Petroleum Corp., Federal Reserve Bank of Richmond
and MuniMae.
William G. Kagler Chairman of the Executive Committee and Director of Skyline Chili, Inc.,
67 (1985) until 1995; Director of Fifth Third Bankcorp and Union Central Life Insurance Co.
Robert E. Mellor President, Chief Executive Officer and Director of Building Materials Holding
56 (1999) Corporation; Of Counsel, Gibson, Dunn and Crutcher, LLP (Law Firm) until 1997;
Director of Coeur d'Alene Mines Corporation.
Charlotte St. Martin Executive Vice President of Loews Hotels; President and Chief Executive Officer
54 (1996) of Loews Anatole Hotel, until 1995; Director of Gibson Greetings, Inc.
Paul J. Varello Chairman and Chief Executive Officer of American Ref-Fuel Company; Director of
56 (1999) Integrated Waste Services Association.
John O. Wilson Chairman, Investment Policy Committee, SDR Capital Management Group, San
61 (1987) Francisco; Senior Fellow, Berkeley Roundtable on International Economics (BRIE),
University of California-Berkeley; Executive Vice
President and Chief Economist of Bank of America
Corporation, until 1998; Director of Calpine
Corporation, California Council on Science and
Technology and Public Policy Institute of California.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR EACH OF THE
NOMINEES LISTED ABOVE. THE ELECTION OF THE NOMINEES REQUIRES A PLURALITY OF THE
VOTES CAST WITH A QUORUM PRESENT.
- 2 -
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
To the knowledge of the Corporation, the only beneficial owners of more than 5
percent of the outstanding shares of Common Stock, as of February 17, 2000, are
as follows:
Amount and Nature
Name and Address of Beneficial Ownership Percent of Class
- ----------------------- ----------------------- ----------------
The Prudential Insurance 1,474,825 (1) 10.9
Company of America
751 Broad Street
Newark, NJ 07102-3777
Dimensional Fund Advisors 936,164 (2) 6.9
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
(1) According to Schedule 13G dated January 31, 2000, filed with the Securities
and Exchange Commission, 6,800 of these shares are owned with sole voting
and sole dispositive power, and 1,468,025 of these shares are owned with
shared voting and shared dispositive power.
(2) According to Schedule 13G dated February 4, 2000, filed with the Securities
and Exchange Commission, all of these shares are owned with sole voting and
sole dispositive power.
The Corporation's Retirement Savings Opportunity Plan is the beneficial owner of
341,206 shares of ESOP Series A Convertible Preferred Stock representing 100
percent of the outstanding shares of Preferred Stock of the Corporation. All of
these shares are owned with shared voting and shared dispositive power. The
address of the Retirement Savings Opportunity Plan is c/o Vanguard Fiduciary
Trust Company, 100 Vanguard Boulevard, Malvern, PA 19355.
The following table sets forth, as of February 17, 2000, the number of shares of
Common Stock of the Corporation beneficially owned by the Directors of the
Corporation, nominees for Director, each of the executive officers named in the
Summary Compensation Table, and by the Directors and executive officers as a
group:
Number of Shares
Name Beneficially Owned (1)
- ------------------ ----------------------
R. Chad Dreier 525,484
Leslie M. Frecon 2,870
William L. Jews 8,080
William G. Kagler 18,180
Robert E. Mellor 1,901
Charlotte St. Martin 5,078
Paul J. Varello 36
John O. Wilson 12,203
John M. Garrity 63,727
Frank J. Scardina 77,070
Daniel G. Schreiner 15,101
Kipling W. Scott 74,515
Michael D. Mangan (2) 115,229
Directors and executive officers
as a group (15 persons) 1,003,655
(1) With the exception of Mr. Dreier, no other Director, nominee or executive
officer beneficially owns more than 1 percent of the Corporation's
outstanding Common Stock. Mr. Dreier beneficially owns 3.9 percent of the
outstanding Common Stock of the Corporation. Directors, nominees and
executive officers as a group beneficially own 7.4 percent of the
outstanding Common Stock of the Corporation. All of the shares in the table
are owned individually with sole voting and sole dispositive power.
Includes shares subject to stock options which may be exercised within 60
days of February 17, 2000, as follows: Mr. Dreier, 400,000 shares; Ms.
Frecon, 2,000 shares; Mr. Jews, 6,000 shares; Mr. Kagler, 7,100 shares; Ms.
St. Martin, 4,000 shares; Mr. Wilson, 7,100 shares; Mr. Garrity, 59,750
shares; Mr. Scardina, 70,950 shares; Mr. Schreiner, 14,850 shares; Mr.
Scott, 70,350 shares; Mr. Mangan, 109,750 shares and Directors and
executive officers as a group, 830,600 shares.
Includes shares subject to restricted stock units for Mr. Dreier, 75,000.
Does not include shares of ESOP Series A Convertible Preferred Stock which
have been allocated to participants' accounts under the Corporation's
Retirement Savings Opportunity Plan as follows: Mr. Dreier, 733 shares; Mr.
Garrity, 610 shares; Mr. Scardina, 735 shares; Mr. Scott, 604 shares; Mr.
Mangan, 686 shares and executive officers as a group, 5,937 shares.
(2) Mr. Mangan left the Corporation and resigned as Executive Vice President and
Chief Financial Officer in September 1999.
- 3 -
INFORMATION CONCERNING THE BOARD OF DIRECTORS
During 1999, the Board of Directors held seven meetings. All Directors attended
at least 75 percent of the meetings of the Board of Directors and of the
committees of the Board of Directors on which they served during 1999 with the
exception of Mr. Jews. The Board of Directors of the Corporation has Audit,
Compensation, Finance and Nominating and Governance Committees.
The Audit Committee of the Board of Directors is composed of Directors Frecon
and Mellor. The Audit Committee reviews the Corporation's financial statements
and reports, the audit services provided by the Corporation's independent public
accountants and the reports of the Corporation's internal auditors. During 1999,
four meetings of the Audit Committee were held.
The Compensation Committee of the Board of Directors determines or recommends
the amount and form of compensation awarded and paid to executive officers and
key employees of the Corporation as well as awards and distributions under the
Corporation's compensation plans. Directors Jews, Kagler, Mellor and St. Martin
serve as its members. During 1999, the Compensation Committee held five
meetings.
The Finance Committee of the Board of Directors is composed of Directors Frecon,
Mellor and Wilson. The Finance Committee reviews and monitors the financial
plans and capital structure of the Corporation. There were three meetings of the
Finance Committee during 1999.
The Nominating and Governance Committee recommends to the Board of Directors
candidates to fill vacancies on the Board and makes recommendations about the
composition of the Board's committees. Directors Jews, Kagler and St. Martin are
the members of the Nominating and Governance Committee, which held two meetings
during 1999. The Nominating and Governance Committee will consider nominees
suggested by stockholders for election to the Board of Directors.
Recommendations by stockholders are forwarded to the Secretary of the
Corporation and should identify the nominee by name and provide information
about the nominee's background and experience.
COMPENSATION OF DIRECTORS
Each Director who is not an employee receives an annual fee of $45,000; half of
this amount is paid in cash and half is paid in the Corporation's Common Stock.
Each non-employee Director is paid an additional $1,500 in cash for each meeting
attended of the Board of Directors and of committees of the Board of Directors,
with the exception of the Committee Chairperson who is paid $2,000 in cash. A
Director may elect to have all or any part of the fees deferred under the
Corporation's Executive and Director Deferred Compensation Plan. Under this
Plan, amounts elected to be deferred are not included in a Director's gross
income for income tax purposes until actually distributed to the Director.
Directors who are employees of the Corporation do not receive additional
compensation for service on the Board of Directors. During 1999, the Corporation
donated $20,000 to charitable organizations on behalf of and as designated by
each individual Director.
The Corporation maintains a Non-Employee Director Equity Plan pursuant to which
non-employee Directors receive stock options. On December 31, 1999, the
Corporation granted each non-employee Director an option to purchase 1,000
shares of Common Stock at an exercise price of $23.0625 per share with the
exception of Directors Mellor and Varello who received their initial option to
purchase 2,000 shares of Common Stock at an exercise price of $23.0625 per
share. The exercise price was the market price of the Common Stock on the date
of grant. Stock options fully vest and become exercisable six months after the
date of grant. Options are not exercisable after 10 years from the date of grant
or three years after the date of termination of service on the Board of
Directors.
- 4 -
1999 COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is comprised of four independent, non-employee
directors. The Compensation Committee approves the design of, assesses the
effectiveness of, and administers executive compensation programs in support of
stockholder interests. The Compensation Committee also reviews and approves all
salary arrangements and other compensation for executive officers, including the
Chief Executive Officer, evaluates executive performance and considers related
matters.
The Corporation's mission is to become a leader in the homebuilding industry,
optimize the strength of its mortgage operations and maximize stockholder value.
To accomplish these objectives, the Corporation is pursuing a comprehensive
business strategy that emphasizes earnings per share and return on stockholders'
equity. The Compensation Committee is committed to implementing a compensation
program which furthers the Corporation's mission. This program adheres to the
following compensation policies which are intended to facilitate the achievement
of the Corporation's business strategies:
o All executive officers', including the Chief Executive Officer's,
compensation programs should emphasize the relationship between pay
and performance by including variable, at-risk compensation that is
dependent upon the level of success in meeting specified financial and
operational goals.
o A portion of total compensation should be comprised of equity-based
pay opportunities. Encouraging a personal proprietary interest
provides a close identification with the Corporation and aligns
executive officers' interests with those of stockholders. This policy
promotes a continuing focus on building profitability and stockholder
value.
o Compensation opportunities should enhance the Corporation's ability to
attract, retain and encourage the development of exceptionally
knowledgeable and experienced executives upon whom the successful
operation and management of the Corporation depend.
Components of Compensation
The Compensation Committee relates total compensation levels for the
Corporation's Chief Executive Officer and other executive officers to the
compensation paid to executives of a peer group of companies. This peer group is
comprised of large national homebuilding companies, which include many of the
same companies which comprise the Dow/Home Construction Index in the Performance
Graph included in this Proxy Statement. However, the Compensation Committee
believes that the Corporation's competitors for executive talent also include
other companies not included in this Index. Therefore, the Committee also
reviews general industry survey data on companies of comparable revenue size and
reviews and approves the selection of companies used for compensation comparison
purposes.
The key elements of the Corporation's executive compensation program are base
salary, annual incentives and long-term incentive compensation. These key
elements are addressed separately below. In determining each component of
compensation, the Compensation Committee considers all elements of an
executive's total compensation package.
Base Salary
The Compensation Committee regularly reviews each executive's base salary. Base
salaries are targeted at median competitive levels and are adjusted by the
Compensation Committee to recognize varying levels of responsibility, experience
and breadth of knowledge, internal equity issues, as well as external pay
practices. Increases to base salaries are driven primarily by individual
performance. Individual performance is evaluated based on the Compensation
Committee's judgement of sustained levels of individual contribution to the
Corporation.
In accordance with his employment agreement dated April 21, 1999, Mr. Dreier,
Chairman of the Board of Directors, President and Chief Executive Officer of the
Corporation, receives a base salary of $750,000.
- 5 -
Annual Incentives
The annual incentive program promotes the Corporation's pay-for-performance
philosophy by providing the Chief Executive Officer and other executive officers
with direct financial incentives in the form of annual cash bonuses to achieve
corporate, business unit and, in some cases, individual performance goals.
Annual bonus opportunities allow the Corporation to communicate specific goals
that are of primary importance during the coming year and to motivate executives
to achieve these goals.
Bonus opportunities are set at median competitive levels for the peer group of
companies. The various bonus plans are designed to incent and reward
above-average performance from the executives and their business units.
Under the terms of his employment agreement, dated April 21, 1999, Mr. Dreier is
eligible for an annual cash bonus equal to 1.0 percent of the consolidated
pretax income of the Corporation, plus 1.5 percent of the amount of consolidated
pretax income that exceeds the prior fiscal year's amount, as adjusted by the
Compensation Committee to eliminate the effect of unusual items. In accordance
with his employment agreement, Mr. Dreier received an annual cash bonus of
$1,314,350 for 1999.
Eligible executives on the corporate staff are assigned target bonus levels
ranging from 25 to 60 percent of base salary. Bonuses are earned based on the
extent to which pretax income goals established at the beginning of the year are
achieved. Executives in the Corporation's homebuilding and mortgage operations
receive bonuses based on a percentage of the pretax earnings of their business
units, with no minimum or maximum bonus amounts.
Long-Term Incentives
In keeping with the Corporation's commitment to provide a total compensation
package which includes at-risk components, long-term incentive compensation
comprises a significant portion of the value of an executive's total
compensation package.
When awarding long-term incentives, the Compensation Committee considers an
executive's level of responsibility, prior compensation experience, historical
award data, individual performance criteria and the compensation practices at
peer group companies. Long-term incentives are in the form of stock options,
restricted stock units and cash.
Stock Options
Stock options are granted at an option price which is the fair market value of
the Common Stock on the date of grant. Accordingly, stock options have value
only if the stock price appreciates. This design focuses executives on the
creation of stockholder value over the long term. The size of the award can be
adjusted based on individual factors and historical award data.
On April 21, 1999, Mr. Dreier received options to purchase 200,000 shares of the
Common Stock of the Corporation at an exercise price of $25.50 per share. This
option grant was determined based on the median competitive levels for chief
executive officers of peer group companies.
TRG Incentive Plan
The TRG Incentive Plan provides for awards based on the Corporation's financial
performance during the year. Each year, the Compensation Committee establishes
maximum award levels for each executive officer based on a percentage of the
executive's base salary. Executives can earn cash or common stock awards based
on the extent to which pre-established financial goals are achieved by the
Corporation. Awards are payable in cash or common stock with vesting occurring
over three years.
The Compensation Committee believes that the TRG Incentive Plan provides
executives with an immediate link to the interest of stockholders, focuses them
on company-wide performance and provides incentives that are longer-term than
annual bonuses but less remote than retirement benefits. The Compensation
Committee believes that the TRG Incentive Plan will enhance the Corporation's
ability to maintain a stable executive team focused on the Corporation's
long-term success.
- 6 -
For 1999, the Compensation Committee designated return on stockholders' equity
as the performance measure for the TRG Incentive Plan. Based on the
Corporation's performance in 1999, which exceeded the targeted return on equity,
the Compensation Committee determined the TRG Incentive Plan awards for 1999
would be paid at 153.75 percent of the target award value.
A target award value for 1999 of 120 percent of base salary was established by
the Compensation Committee for Mr. Dreier. Based on the Corporation's
performance in 1999, which exceeded the targeted return on equity performance
measure, Mr. Dreier received a TRG Incentive Plan award of $1,383,750.
Retirement Plans
The Corporation does not sponsor a defined benefit retirement plan but does
provide executives with the ability to accumulate retirement assets through
defined contribution plans. Executive officers participate in the Corporation's
Retirement Savings Opportunity Plan up to the statutory limits. Because of these
statutory limits, the Corporation also offers executive officers the ability to
defer additional pay and receive corresponding company-matching contributions
through the Executive and Director Deferred Compensation Plan.
For 1999, earnings credited to deferrals under the Executive and Director
Deferred Compensation Plan were based on the nine investment choices offered
pursuant to the Plan.
Policy with Respect to the $1 Million Deduction Limit
It is the policy of the Compensation Committee to continually evaluate the
qualification of compensation for exclusion from the $1 million limitation on
corporate tax deductions under Internal Revenue Code Section 162(m) as well as
other sections of the Internal Revenue Code, while maintaining flexibility to
take actions which it deems to be in the interest of the Corporation and its
stockholders which may not qualify for tax deductibility.
Conclusion
The Compensation Committee believes these executive compensation policies and
programs serve the interests of stockholders and the Corporation effectively.
The various compensation vehicles offered are appropriately balanced to provide
increased motivation for executives to contribute to the Corporation's overall
future success, thereby enhancing the value of the Corporation for the
stockholders' benefit.
The Compensation Committee will continue to monitor the effectiveness of the
Corporation's total compensation program to meet the current and future needs of
the Corporation.
Compensation Committee of the Board of Directors
William L. Jews
William G. Kagler
Robert E. Mellor
Charlotte St. Martin
- 7 -
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
----------------------------------- -----------------------
Awards
------------------------
Other Restricted Securities
Annual Stock Underlying All Other
Name and Principal Position Year Salary Bonus(c) Compensation(d) Awards(e) Options Compensation (f)
- ------------------------------------------------------------------------------------------------------
Mr. Dreier - Chairman of 1999 $750,000 $1,775,554 $155,475 $1,147,500 200,000 $1,141,505
the Board of Directors, 1998 $700,000 $1,119,773 $ 10,147 $ 281,185 0 $ 361,898
President and Chief 1997 $655,000 $ 586,943 $ 7,291 $ 701,646 190,000 $ 199,642
Executive Officer of The
Ryland Group, Inc.
Mr. Garrity - Senior Vice 1999 $240,385 $788,780 $ 0 $ 0 20,000 $ 216,223
President of The Ryland 1998 $230,000 $483,485 $ 0 $ 64,651 35,000 $ 95,688
Group, Inc.; President of 1997 $220,000 $271,994 $ 0 $ 28,741 15,000 $ 47,401
the South Region of
Ryland Homes
Mr. Scardina - Senior Vice 1999 $260,385 $551,622 $ 0 $ 0 20,000 $ 245,705
President of The Ryland 1998 $250,000 $713,618 $ 0 $ 70,282 35,000 $ 95,165
Group, Inc.; President 1997 $240,000 $393,747 $ 0 $ 31,349 15,000 $ 54,097
of the West Region of
Ryland Homes
Mr. Schreiner - Senior 1999 $220,385 $418,492 $ 17,462 $ 0 15,000 $ 227,904
Vice President of The 1998 $130,769 $200,759 $ 15,158 $ 25,728 30,000 $ 62,416
Ryland Group, Inc.;
President of Ryland
Mortgage Company (a)
Mr. Scott - Senior Vice 1999 $240,385 $741,738 $ 0 $ 0 20,000 $ 215,013
President of The Ryland 1998 $230,000 $480,624 $ 0 $ 64,651 35,000 $ 92,719
Group Inc.; President 1997 $209,231 $224,193 $ 16,960 $ 26,132 15,000 $ 93,895
of the North Region of
Ryland Homes
Mr. Mangan - Former 1999 $339,989 $764,210 $ 0 $ 0 20,000 $ 43,120
Executive Vice President 1998 $325,000 $409,106 $ 0 $ 104,441 35,000 $ 141,490
and Chief Financial 1997 $312,000 $280,590 $ 0 $ 46,577 20,000 $ 78,119
Officer of The Ryland
Group, Inc. (b)
(a) Mr. Schreiner joined the Corporation and was elected President of Ryland
Mortgage Company in May, 1998.
(b) Mr. Mangan left the Corporation and resigned as Executive Vice President
and Chief Financial Officer in September 1999.
(c) Includes bonuses for 1999, 1998, and 1997, which were paid in 2000, 1999,
and 1998, respectively.
Includes for 1999, 1998 and 1997, the dollar value of the initial vested
portion of cash and restricted stock unit awards under the TRG Incentive
Plan as follows: Mr. Dreier 1999 - $461,204, 1998 - $281,133, 1997 -
$122,253; Mr. Garrity 1999 - $86,091, 1998 - $64,675, 1997 - $28,737; Mr.
Scardina 1999 - $93,266, 1998 - $70,288, 1997 - $31,358; Mr. Schreiner 1999
- $78,917, 1998 - $25,759; Mr. Scott 1999 - $86,091, 1998 - $64,675, 1997 -
$26,132, and Mr. Mangan 1999 - $418,200, 1998 - $104,418, 1997 - $46,590.
(d) Includes the gross-up adjustment for taxes on relocation reimbursements as
follows: Mr. Dreier 1999 - $86,421, Mr. Schreiner 1999 - $17,462; 1998 -
$15,158; and Mr. Scott 1997 - $16,960. Also includes Medicaid taxes and
gross-up adjustments paid to Mr. Dreier for vested restricted stock units
as follows: 1999 - $8,751; 1998 - $10,147; 1997 - $7,291; and the personal
health and services allowance and medical and fitness reimbursement paid to
Mr. Dreier in 1999 of $60,303.
(e) Amounts for 1998 and 1997 include restricted stock units awarded under the
TRG Incentive Plan. The value of the restricted stock units for 1998 is
based on the $28.875 closing price of the Corporation's Common Stock on the
determination date of December 31, 1998. The value of the restricted stock
units for 1997 is based on the $23.50 closing price of the Corporation's
Common Stock on the determination date of December 31, 1997. The restricted
stock units or the cash value of the restricted stock units awarded under
the TRG Incentive Plan vest one-third per year over three years. Holders of
restricted stock units are entitled to quarterly dividend equivalent
payments if the Corporation pays dividends on its Common Stock.
Mr. Dreier was awarded 45,000 restricted stock units by the Corporation in
1999. The value of the restricted stock units, which is included as 1999
compensation, was based upon the $25.50 closing price of the Corporation's
Common Stock on the date of grant. The units vest, and shares of Common
Stock are delivered to Mr. Dreier in three annual installments of 15,000
shares on February 15, 2001, 2002, and 2003. Mr. Dreier is entitled to all
regular quarterly dividend equivalent payments on the restricted stock
units in the amount and to the extent dividends are paid by the Corporation
on its Common Stock.
Mr. Dreier was awarded 45,000 restricted stock units by the Corporation in
1997. The value of the restricted stock units, which is included as 1997
compensation, was based upon the $12.875 closing price of the Corporation's
Common Stock on the date of grant. The units vest, and shares of Common
Stock are delivered to Mr. Dreier in two annual installments of 15,000 and
30,000 shares on November 1, 1999, and November 1, 2000, respectively. Mr.
Dreier is entitled to all regular quarterly dividend equivalent payments on
the restricted stock units in the amount and to the extent dividends are
paid by the Corporation on its Common Stock.
At December 31, 1999, the number and value of restricted stock units held
by Mr. Dreier was 75,000 units at a value of $1,729,500.
(f) Includes the Corporation's contributions to the Retirement Savings
Opportunity Plan and the Executive and Director Deferred Compensation Plan:
Mr. Dreier 1999 - $95,434, 1998 - $71,497, 1997 - $51,178; Mr. Garrity 1999
- $39,552, 1998 - $28,949, 1997 - $17,831; Mr. Scardina 1999 - $54,223,
1998 - $22,638, 1997 - $21,977; Mr. Schreiner 1999 - $23,723, 1998 -
$7,846; Mr. Scott 1999 - $39,380, 1998 - $26,238, 1997 - $20,240; and Mr.
Mangan 1999 - $38,681, 1998 - $34,325, 1997 - $26,092; earnings on the
Executive and Director Deferred Compensation Plan: Mr. Dreier 1997 -
$23,056 and Mr. Mangan 1997 - $4,614; the value of term life insurance paid
under the Corporation's split dollar life insurance plan: Mr. Dreier 1999 -
$11,986, 1998 - $4,009, 1997 - $1,905; Mr. Garrity 1999 - $2,747, 1998 -
$834, 1997 - $563; Mr. Scardina 1999 - $3,057, 1998 - $885, 1997 - $532;
Mr. Schreiner 1999 - $678, 1998 - $102; Mr. Scott 1999 - $1,740, 1998 -
$689, 1997 - $283; and Mr. Mangan 1999 - $1,667, 1998 - $738, 1997 - $354;
deferred cash and earnings under the TRG Incentive Plan: Mr. Dreier 1999 -
$929,970, 1998 - $286,392, 1997 - $123,503; Mr. Garrity 1999 - $173,924,
1998 - $65,905, 1997 - $29,007; Mr. Scardina 1999 - $188,425, 1998 -
$71,642, 1997 - $31,588; Mr. Schreiner 1999 - $158,406, 1998 - $25,765; Mr.
Scott 1999 - $173,893, 1998 - $65,792, 1997 - $26,332; and Mr. Mangan 1999
- $2,772, 1998 - $106,427, 1997 - $47,059; and reimbursements for
relocation expenses: Mr. Dreier 1999 - $104,115; Mr. Schreiner 1999 -
$45,097, 1998 - $28,702; and Mr. Scott 1997 - $47,040.
- 8 -
EMPLOYMENT AGREEMENTS
On April 21, 1999, the Corporation entered into an employment agreement with Mr.
Dreier for a period of four years beginning April 21, 1999. The agreement
provides for one-year extensions subject to a right of termination upon notice
at least 180 days prior to the end of the agreement's term. Under the agreement,
Mr. Dreier will receive a base salary of $750,000 per year and is eligible for
an annual cash bonus equal to 1.0 percent of the adjusted consolidated pretax
income of the Corporation plus 1.5 percent of the amount of adjusted
consolidated pretax income of the Corporation that exceeds the prior fiscal
year's amount. Mr. Dreier also received a stock option grant for 200,000 shares
of the Corporation's Common Stock at an exercise price of $25.50 per share. Mr.
Dreier was granted 45,000 restricted stock units that vest and are paid in the
amount of 15,000 shares of Common Stock on each of February 15, 2001, February
15, 2002 and February 15, 2003. If Mr. Dreier's employment is terminated without
"cause," Mr. Dreier receives salary and benefits for the remaining term of the
agreement or 24 months, whichever is greater, a bonus payment for the year of
termination and a payment of all vested benefits and awards. In the event of a
termination of Mr. Dreier's employment within three years of a
"change-in-control" of the Corporation, he receives a cash payment equal to
three times his highest annual salary and bonus, accelerated vesting under
benefit and equity plans of the Corporation, two years of continued receipt of
his current benefits as well as relocation and outplacement assistance.
The Corporation has senior executive severance agreements pursuant to which,
upon termination of employment within three years of a "change-in-control" of
the Corporation, certain executive officers, including Messrs. Garrity,
Scardina, Schreiner and Scott, receive a cash payment equal to two times the
highest annual compensation paid during the three years prior to termination,
accelerated vesting under benefit plans of the Corporation, and relocation and
outplacement assistance.
- 9 -
STOCK OPTION GRANTS IN 1999
Number of Percent of Potential Realizable Value at
Securities Total Options Assumed Annual Rates of Stock Price
Underlying Granted to Exercise Appreciation for 10-Year Option Term
Options Employees Price Expiration -----------------------------
Name Granted (a) in 1999 ($/Share) Date 5% 10%
- ------------- ------- ---------- ---------- ----------- ----------- -----------
Mr. Dreier 200,000 29.0 $25.50 04/21/09 $3,207,363 $ 8,128,087
Mr. Garrity 20,000 2.9 $23.88 02/05/09 $ 300,297 $ 761,012
Mr. Scardina 20,000 2.9 $23.88 02/05/09 $ 300,297 $ 761,012
Mr. Schreiner 15,000 2.2 $23.88 02/05/09 $ 225,223 $ 570,759
Mr. Scott 20,000 2.9 $23.88 02/05/09 $ 300,297 $ 761,012
Mr. Mangan 20,000 2.9 $23.88 02/05/09 $ 300,297 $ 761,012
(a) These stock options are exercisable at a rate of 33, 33 and 34 percent per
year beginning on the first anniversary of the date of grant.
AGGREGATED STOCK OPTION EXERCISES IN 1999
AND YEAR-END STOCK OPTION VALUES
Number of Securities Underlying Value of Unexercised In-the-
Unexercised Options at Year End Money Options at Year End
Shares Acquired Value ---------------------------- ---------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ------------- ------------- --------- ---------- ----------- ---------- --------
Mr. Dreier 0 $0 336,400 263,600 $2,433,075 $645,675
Mr. Garrity 0 $0 41,450 48,550 $ 257,169 $ 48,769
Mr. Scardina 0 $0 52,650 48,550 $ 312,719 $ 48,769
Mr. Schreiner 0 $0 9,900 35,100 $ 16,397 $ 33,291
Mr. Scott 0 $0 52,050 48,550 $ 276,206 $ 48,769
Mr. Mangan 0 $0 89,750 50,250 $ 690,288 $ 65,025
- 10 -
COMPARISON OF CUMULATIVE TOTAL STOCKHOLDER RETURN ON COMMON STOCK
(Stock Price Appreciation Plus Dividends)
This chart graphs the Corporation's performance in the form of cumulative
total return to stockholders during the previous five years in comparison to the
Standard and Poor's 500 Index and the Dow/Home Construction Index. The Dow/Home
construction Index includes the following companies: Pulte Corporation; Centex
Corporation; Clayton Homes, Inc.; Kaufman and Broad Home Corporation; Champion
Enterprises, Inc.; Lennar Corporation; Walter Industries, Inc.; D.R. Horton and
Toll Brothers, Inc.
[Performance Graph Appears Here]
In the printed version of the document, a line graph appears which depicts the
following plot points:
12/94 12/95 12/96 12/97 12/98 12/99
The Ryland Group, Inc. 100 97 98 175 216 174
S and P 500 100 138 169 226 290 351
Dow/Home Construction Index 100 149 143 221 235 149
(a) Assumes that the value of the common stock of the Corporation and the
Indices were $100 on January 1, 1995, and that all dividends were
reinvested.
- 11 -
PROPOSAL TO APPROVE THE RYLAND GROUP, INC.
2000 NON-EMPLOYEE DIRECTOR EQUITY PLAN
The Board of Directors proposes that the stockholders of the Corporation approve
the Corporation's adoption of The Ryland Group, Inc. 2000 Non-Employee Director
Equity Plan. If approved, shares of the Corporation's Common Stock will be made
available for purchase under the Plan by eligible Directors. The following is a
fair and complete summary of the Plan as proposed for approval. This summary is
qualified in its entirety by reference to the full text of the Plan which
appears as Exhibit A to this Proxy Statement.
Summary of Plan Terms
Purpose and Types of Awards: The Plan's purpose is to advance the interests of
the Corporation and its stockholders by encouraging increased Common Stock
ownership of the Corporation by its Directors. The Plan provides for automatic
grants of nonstatutory stock options to Directors on December 31st of each year.
The Plan will replace the 1992 Non-Employee Director Equity Plan (the
"Predecessor Plan"). If the stockholders approve the Plan, the Corporation will
not grant any more options under the Predecessor Plan.
Shares Available Under the Plan: The Plan authorizes the issuance of 275,000
shares of Common Stock, plus the remaining 28,300 shares that will be carried
over from the Predecessor Plan. Appropriate adjustments will be made to this
limit to reflect any stock dividend, extraordinary cash dividend, creation of a
class of equity securities, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, business combination, warrants or rights
offering to purchase Common Stock at a price below market price, or other
similar change affecting the Corporation's Common Stock. Such adjustments will
be made in the maximum number and kind of shares subject to the Plan,
outstanding stock options and subsequent grants of stock options, and in the
exercise price of outstanding stock options. The shares available for purchase
under the Plan will come from authorized but unissued shares of Common Stock.
Administration: The Plan will be administered by the Compensation Committee of
the Board of Directors. The Compensation Committee has the authority to construe
the Plan, determine all questions arising under the Plan, and adopt and amend
rules and regulations for the administration of the Plan. The Compensation
Committee, however, has no discretion with respect to the eligibility or
selection of Directors to receive stock options, or the timing and exercise
price of the options. Decisions of the Compensation Committee on the
administration of the Plan are final and conclusive.
Eligibility to Participate: All members of the Board of Directors who are not
employees of the Corporation will participate in the Plan. As of March 15, 2000,
seven Directors are eligible to participate in the Plan.
Stock Option Grants: If the stockholders approve the Plan, then on December 31,
2000, and on each December 31st thereafter during the term of the Plan, each
non-employee Director first elected to the Board of Directors during that
calendar year will receive an option to purchase 10,000 shares of Common Stock,
and each other non-employee Director will receive an option to purchase 5,000
shares of Common Stock. The stock options will fully vest and become exercisable
six months after their grant date. Once vested, stock options are exercisable at
any time prior to the tenth anniversary of their grant date unless the Director
terminates service on the Board of Directors for any reason. Upon termination of
service from the Board of Directors, all stock options become fully vested,
immediately exercisable and expire three years after the date of termination
regardless of their stated expiration dates.
Exercise Price: The exercise price of all stock options granted under the Plan
will be equal to the market price of the Common Stock on the grant date. On
February 22, 2000, the last reported sale price per share of Common Stock, as
quoted on the New York Stock Exchange, was $17.125. The option exercise price
may be paid in the following ways: (1) in cash or check; (2) in shares of Common
Stock of the Corporation (including shares issued upon exercise of the stock
option); (3) by a broker-assisted cashless exercise; or (4) by any combination
of the foregoing methods.
Amendment and Termination: The Compensation Committee may amend, suspend or
terminate the Plan or any portion of it at any time without further action of
the stockholders except to the extent required by applicable law or the New York
Stock Exchange. If not sooner terminated by the Compensation Committee, the Plan
will terminate on January 1, 2010.
Plan Benefits
The following table provides information regarding stock options that will be
granted under the Plan on December 31, 2000, assuming all nominees for Director
are approved by the stockholders and are serving on the Board of Directors on
that date.
NEW PLAN BENEFITS TABLE
Plan Name: 2000 Non-Employee Director Equity Plan
Number of
Shares of
Common Stock
Value ($) Underlying
------------------------- Outstanding
Name and Position 5% (1) 10% (1) Options (2)
- ---------------------------- ----------- ------------ -------------------
Named Executive Officers
(not eligible under Plan) n/a n/a n/a
Executive Group
(not eligible under Plan) n/a n/a n/a
Non-Executive Director Group $376,944 $955,249 35,000
Non-Executive Officer Employee
Group (not eligible under Plan) n/a n/a n/a
(1) The fair value of the option grants is estimated using the potential
realizable value at assumed annual rates of price appreciation for 10-year
option term, assuming, for purpose of illustration only, that the options
are granted on February 22, 2000, at the last reported sale price on that
date of $17.125, as quoted on the New York Stock Exchange. Options are
granted at fair market value on date of grant.
(2) Assumes a grant of options to acquire 5,000 shares of Common Stock to each
of the Corporations seven eligible Directors.
Tax Aspects of Plan
The stock options granted under the Plan will be nonstatutory stock options not
intended to qualify under Internal Revenue Code section 422. There are no tax
consequences to the Corporation or the Director when the stock options are
granted. A Director who exercises a nonstatutory stock option with cash will
realize compensation taxable as ordinary income in an amount equal to the
difference between the exercise price paid and the fair market value of the
Common Stock purchased on the exercise date. The Corporation will be entitled to
a deduction from income in the same amount in the fiscal year in which the
exercise occurs. The Director's basis in the purchased shares will be the fair
market value of the Common Stock on the date income is realized. When the
Director disposes of the shares, he or she will recognize capital gain or loss,
either long-term or short-term, depending on how long the shares are held before
disposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR APPROVAL OF THE
2000 NON-EMPLOYEE DIRECTOR EQUITY PLAN. APPROVAL OF THE PLAN REQUIRES THE
AFFIRMATIVE VOTE OF A MAJORITY OF THE VOTES CAST WITH A QUORUM PRESENT.
- 13 -
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based upon the Corporation's review of Forms 3, 4 and 5, as well as any
amendments submitted to the Corporation during 1999 for any person subject to
Section 16 of the Securities Exchange Act of 1934 (The Exchange Act), there were
no persons who failed to file on a timely basis during 1999 reports required by
Section 16(a) of The Exchange Act.
STOCKHOLDERS' PROPOSALS
Proposals of stockholders intended to be presented at the next Annual Meeting of
Stockholders of the Corporation must be received by the Corporation on or before
November 15, 2000, and must comply with the applicable rules of the Securities
and Exchange Commission in order to be included in the Corporation's Proxy
Statement and proxy relating to the 2001 Annual Meeting of Stockholders. In
addition, under the Corporation's bylaws, in order for a shareholder proposal or
director nomination to come before the Annual Meeting of Stockholders, proposals
and nominations, made in accordance with the bylaws of the Corporation, require
appropriate notice to the Corporation of the proposal or nomination not less
than 75 days prior to the date of the Annual Stockholders' Meeting. If less than
100 days' notice of the date of the Annual Stockholders' Meeting is given by the
Corporation, then the Corporation must receive the notice of nomination or the
proposal not later than the close of business on the 10th day following the date
the Corporation first mailed the notice or made public disclosure of the
meeting. In this regard, notice is given that the 2001 Annual Meeting of
Stockholders is expected to be held on the third Wednesday of April in 2001, or
on or before the 30th day thereafter, as determined by the Board of Directors in
accordance with the Corporation's bylaws.
OTHER MATTERS
If any other business should come before the meeting, the proxy holders will
vote according to their discretion.
- 14 -
EXHIBIT A
THE RYLAND GROUP, INC.
2000 NON-EMPLOYEE DIRECTOR EQUITY PLAN
Section 1. PURPOSE
The purpose of The Ryland Group, Inc., 2000 Non-Employee Director Equity Plan
(the "Plan") is to advance the interests of the Corporation and its stockholders
by encouraging increased Common Stock ownership by members of the Board of
Directors.
Section 2. DEFINITIONS
"Board" means the Board of Directors of the Corporation.
"Committee" means the Compensation Committee of the Board or such other
committee of the Board that is designated by the Compensation Committee or the
Board from time to time to administer the Plan.
"Common Stock" means the Common Stock, $1.00 par value, of the Corporation.
"Corporation" means The Ryland Group, Inc.
"Employee" means any officer or employee of the Corporation or of its
subsidiaries.
"Market Price" means the last reported sale price of the Common Stock on the New
York Stock Exchange; or, if the Common Stock is not listed on the New York Stock
Exchange, the closing price on such other exchange on which the Common Stock is
traded; or, if quoted on the Nasdaq National Market System or other
over-the-counter market, the last reported sales price on the Nasdaq National
Market System or other over-the-counter market; or, if the Common Stock is not
publicly traded, such price as shall be determined by the Committee to be the
fair market value.
"Non-Employee Director" or "Participant" means a member of the Board who is not
at the time also an Employee.
"Stock Options" mean stock options granted under the Plan which are nonstatutory
stock options not intended to qualify under Section 422 of the Internal Revenue
Code of 1986, as amended.
Section 3. SHARES OF COMMON STOCK SUBJECT TO THE PLAN
(a) Subject to adjustment as provided in Section 3(b) below, the maximum
aggregate number of shares of Common Stock that may be issued under the Plan
shall be equal to the sum of: (i) 275,000 shares, plus (ii) any shares of Common
Stock available for future awards under the 1992 Non-Employee Director Equity
Plan as of the date on which the Plan is approved by the stockholders of the
Corporation. The Common Stock issued under the Plan will come from authorized
but unissued shares of Common Stock, and the Corporation will set aside and
reserve for issuance under the Plan said number of shares.
(b) In the event of any stock dividend, extraordinary cash dividend, creation of
a class of equity securities, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination, exchange of shares, warrants or
rights offering to purchase Common Stock at a price below Market Price or
similar change affecting the Common Stock, appropriate adjustment shall be made
in the maximum number and kind of shares subject to the Plan, outstanding Stock
Options and subsequent grants of Stock Options and in the exercise price of
outstanding Stock Options.
Section 4. ADMINISTRATION OF THE PLAN
Stock Option grants under the Plan are automatic as provided in Section 6. The
Plan is administered by the Committee. The Committee shall have the powers
vested in it by the terms of the Plan. The Committee shall, subject to the
provisions of the Plan, have the power to construe the Plan, to determine all
questions arising thereunder and to adopt and amend rules and regulations for
the administration of the Plan. Notwithstanding the foregoing, the Committee
shall have no discretion with respect to the eligibility or selection of
Participants, and the timing or exercise price of Stock Options. Any decisions
of the Committee on the administration of the Plan shall be final and
conclusive.
- 15 -
Section 5. PARTICIPATION IN THE PLAN
All Non-Employee Directors shall participate in the Plan.
Section 6. DETERMINATION OF STOCK OPTIONS
Each Stock Option granted under the Plan shall be evidenced by a written
instrument in such form as the Committee may approve and shall be subject to the
following terms and conditions:
(a) On December 31, 2000, and on each December 31 thereafter during the term of
the Plan, each Non-Employee Director first elected to the Board during the
calendar year that includes such date shall receive an option to purchase 10,000
shares of Common Stock and each other Non-Employee Director on such date shall
receive an option to purchase 5,000 shares of Common Stock.
(b) The purchase price for the Common Stock subject to Stock Options shall be
the Market Price of the Common Stock on the date of grant.
(c) Stock Options shall fully vest and become exercisable six months from the
date of grant. Vested Stock Options shall be exercisable at any time prior to
the expiration of 10 years from the date of grant, subject to Section 6(d) of
the Plan.
(d) In the event service on the Board by a Participant terminates for any
reason, all of the Participant's Stock Options shall fully vest and become
immediately exercisable and will expire three years after the date of
termination regardless of their stated expiration dates. The rights of a
Participant in a Stock Option may be exercised by the Participant's guardian or
legal representative in the case of disability and by the Participant's estate
or a beneficiary designated by the Participant in the case of death.
(e) The purchase price for the Common Stock subject to a Stock Option may be
paid (i) in cash or by check, (ii) in shares of Common Stock of the Corporation
including shares issued upon exercise of the Stock Option, (iii) by a
broker-assisted cashless exercise in accordance with Regulation T of the Board
of Governors of the Federal Reserve System through a brokerage firm approved by
the Committee, or (iv) by any combination of the foregoing methods. The value of
shares of Common Stock delivered in payment of the purchase price shall be their
Market Price as of the date of exercise.
(f) Each Participant shall pay to the Corporation, or make arrangements
satisfactory to the Committee for the payment of, any federal, state or local
taxes of any kind required by law to be withheld with respect to the receipt of
shares of Common Stock pursuant to the exercise of a Stock Option. Such tax
obligations may be paid in whole or in part, but in no event in excess of the
amount necessary to satisfy the statutory minimum withholding amount due, in
shares of Common Stock, including shares issued upon exercise of the Stock
Option, valued at Market Price on the date of delivery.
Section 7. STOCKHOLDER RIGHTS
Non-Employee Directors shall not be deemed for any purpose to be or have rights
as stockholders of the Corporation with respect to any shares of Common Stock
except as and when such shares are issued and then only from the date of the
certificate thereof. No adjustment shall be made for dividends, distributions or
other rights for which the record date precedes the date of such stock
certificate.
Section 8. CONTINUATION OF DIRECTOR OR OTHER STATUS
Nothing in the Plan or in any instrument executed pursuant to the Plan or any
action taken pursuant to the Plan shall be construed as creating or constituting
evidence of any agreement or understanding, express or implied, that the
Corporation will retain a Non-Employee Director as a Director or in any other
capacity for any period of time or at a particular retainer or other rate of
compensation, as conferring upon any Participant any legal or other right to
continue as a Director or in any other capacity, or as limiting, interfering
with or otherwise affecting the provisions of the Corporation's charter, bylaws
or the Maryland General Corporation Law relating to the removal of Directors.
- 16 -
Section 9. COMPLIANCE WITH GOVERNMENT REGULATIONS
Neither the Plan nor the Corporation shall be obligated to issue any shares of
Common Stock pursuant to the Plan at any time unless and until all applicable
requirements imposed by any federal and state securities and other laws, rules,
and regulations, by any regulatory agencies, or by any stock exchanges upon
which the Common Stock may be listed have been fully met. As a condition
precedent to any issuance of shares of Common Stock and delivery of certificates
evidencing such shares pursuant to the Plan, the Committee may require a
Participant to take any such action and to make any such covenants, agreements
and representations as the Committee, in its discretion deems necessary or
advisable to ensure compliance with such requirements. The Corporation shall in
no event be obligated to register the shares of Common Stock issued or issuable
under the Plan pursuant to the Securities Act of 1933, as now or hereafter
amended, or to qualify or register such shares under any securities laws of any
state upon their issuance under the Plan or at any time thereafter, or to take
any other action in order to cause the issuance and delivery of such shares
under the Plan or any subsequent offer, sale or other transfer of such shares to
comply with any such law, regulation or requirement. Participants are
responsible for complying with all applicable federal and state securities and
other laws, rules and regulations in connection with any offer, sale or other
transfer of the shares of Common Stock issued under the Plan or any interest
therein including, without limitation, compliance with the registration
requirements of the Securities Act of 1933 (unless an exemption therefrom is
available), or with the provisions of Rule 144 promulgated thereunder, if
available, or any successor provisions.
Section 10. TRANSFERABILITY OF RIGHTS
Except as otherwise determined by the Committee, no Participant shall have the
right to assign any Stock Option or any other right or interest under the Plan,
contingent or otherwise, or to cause or permit any encumbrance, pledge or charge
of any nature to be imposed on any such Stock Option or any such right or
interest, other than by will or the laws of descent and distribution. Unless
otherwise determined by the Committee in accord with the provisions of the
immediately preceding sentence, Stock Options shall be exercisable during the
Participant's lifetime only by the Participant or the Participant's guardian or
legal representative.
Section 11. EFFECTIVE DATE OF PLAN
The Plan is effective as of the date on which the Plan is approved by the
stockholders of the Corporation. Prior to such approval, Awards may be made
under the Plan expressly subject to such approval but any such Awards shall be
void and ineffective if the Plan is not approved by the stockholders.
Section 12. APPLICABILITY TO OTHER PLANS
After and subject to stockholder approval of this Plan, no further awards shall
be granted under the Corporation's 1992 Non-Employee Director Equity Plan.
Outstanding awards under the 1992 Non-Employee Director Equity Plan shall remain
in effect pursuant to the terms of the agreements governing such awards and
shall continue to be governed by the 1992 Non-Employee Director Equity Plan to
the extent applicable.
Section 13. AMENDMENT AND TERMINATION OF THE PLAN
The Committee may amend, suspend or terminate the Plan or any portion thereof at
any time as it determines appropriate, without further action by the
Corporation's stockholders except to the extent required by applicable law or by
any stock exchanges upon which the Common Stock may be listed. If not sooner
terminated by the Committee, the Plan shall terminate on January 1, 2010.
Termination of the Plan will not affect the rights and obligations arising under
Stock Options theretofore granted and then in effect.
Section 14. GOVERNING LAW
The validity, construction and effect of the Plan, of written instruments
entered into pursuant to the Plan, and of any rules, regulations, determinations
or decisions made by the Committee relating to the Plan or such written
instruments, and the rights of any and all persons having or claiming to have
any interest therein or thereunder, shall be determined exclusively in
accordance with applicable federal laws and the laws of the State of Maryland,
without regard to
- 17 -
PARTICIPANT INSTRUCTION CARD
THE RYLAND GROUP, INC.
Participant Proxy Solicited on Behalf of the Board of Directors
Annual Meeting of Stockholders - April 26, 2000
The undersigned participant in The Ryland Group, Inc. Retirement Savings
Opportunity Plan acknowledges receipt of the Proxy Statement and Notice of
Annual Meeting of Stockholders, dated March 15, 2000, and hereby instructs
Vanguard Fidelity Trust Company, the Trustee, to vote all shares which the
undersigned may be entitled to vote at the Annual Meeting of Stockholders of the
Corporation to be held at The Ritz-Carlton, 4375 Admiralty Way, Marina del Rey,
California, on Wednesday, April 26, 2000 at 9:00 a.m., Pacific Time, and at any
adjournments thereof.
(Continued and signed on reverse side)
The shares represented by this instruction card, when properly executed, will be
voted in accordance with the instructions herein. In the absence of specific
instructions, this proxy will be voted FOR the nominees listed below, and in the
discretion of the proxies upon other business properly brought before the
meeting.
Please mark your votes as indicated in this example. /X/
1. ELECTION OF DIRECTORS FOR all WITHHOLD AUTHORITY
nominees for all nominees
/ / / /
Nominees: Mr. Dreier, Ms. Frecon, Mr. Jews, Mr. Kagler
Mr. Mellor, Ms. St. Martin, Mr. Varello, Mr. Wilson
Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
2. Approval of 2000 Non-Employee Director Equity Plan For Against Abstain
[ ] [ ] [ ]
3. In their discretion upon other business as may properly come before the
meeting.
Please sign, date and return this proxy promptly in the enclosed postage paid
envelope.
Signature ___________________ Signature ___________________ Date _______
NOTE: Please sign your name exactly as it appears hereon. If stock is registered
in more than one name, each joint owner must sign. When signing as attorney,
executor, administrator, guardian or corporate officer, please give your full
title as such.
THE RYLAND GROUP, INC.
Proxy Solicited on Behalf of the Board of Directors
Annual Meeting of Stockholders - April 26, 2000
The undersigned stockholder of The Ryland Group, Inc. (the "Corporation")
acknowledges receipt of the Proxy Statement and Notice of Annual Meeting of
Stockholders, dated March 15, 2000, and hereby constitutes and appoints R. CHAD
DREIER, Chairman of the Board of Directors, and TIMOTHY J. GECKLE, Secretary of
the Corporation and each of them, as true and lawful proxies with full power of
substitution, to vote all shares which the undersigned may be entitled to vote
at the Annual Meeting of Stockholders of the Corporation to be held at The Ritz-
Carlton, 4375 Admiralty Way, Marina del Rey, California, on Wednesday, April 26,
2000, at 9:00 a.m., Pacific Time, and at any adjournments thereof.
(Continued and signed on reverse side)
This proxy, when properly executed, will be voted in accordance with the
instructions herein. In the absence of specific instructions, this proxy will be
voted FOR the nominees listed below, and in the discretion of the proxies upon
the business properly brought before the meeting.
Please mark your votes as indicted in this example /X/
1. ELECTION OF DIRECTORS FOR all WITHHOLD AUTHORITY
nominees for all nominees
/ / / /
Nominees: Mr. Dreier, Ms. Frecon, Mr. Jews, Mr. Kagler
Mr. Mellor, Ms. St. Martin, Mr. Varello, Mr. Wilson
Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.
- - - - - - - - - - - - - - - - - - - - - - - - -
2. Approval of 2000 Non-Employee Director Equity Plan For Against Abstain
[ ] [ ] [ ]
3. In their discretion upon other business as may properly come before the
meeting.
Please sign, date and return this proxy promptly in the enclosed postage paid
envelope.
Signature ___________________ Signature ___________________ Date_________
NOTE: Please sign your name exactly as it appears hereon. If stock is registered
in more than one name, each joint owner must sign. When signing as attorney,
executor, administrator, guardian or corporate officer, please give your full
title as such.
