SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
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/ / Preliminary Proxy Statement
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14a-6(e)(2))
/X/ 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)
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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
/s/ Timothy J. Geckle
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
for a fee of $5,000 plus expenses. 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 the Corporation.
52 (1993)
Leslie M. Frecon President, L Frecon Enterprises; Senior Vice President, Corporate Finance, of General Mills
46 (1998) Inc., until 1998; Director of The Resource Companies.
William L. Jews President and Chief Executive Officer of CareFirst, Inc.; President and Chief Executive
48 (1994) 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., until 1995; Retired
67 (1985) President of The Kroger Company; 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 Chief Operating Officer, Investment Policy Committee, SDR Capital Management
61 (1987) Group, San 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 of 75,000
shares.
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 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. 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 for each Director 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 within 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 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 that is equal to or less than the
prior year's amount, plus 1.5 percent of the amount of consolidated pretax
income that exceeds the prior 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 that the TRG Incentive Plan awards for
1999 were 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 to receive corresponding company-matching contributions
through the Executive and Director Deferred Compensation 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 the 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 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 extending until December 31, 2003. 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 that is equal to or less than the prior year's amount,
plus 1.5 percent of the amount of adjusted consolidated pretax income of the
Corporation that exceeds the prior 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 $25.50 per share. Mr. Dreier was granted 45,000 restricted
stock units that vest and are paid in the amount of 15,000 shares of Common
Stock on each of February 15, 2001, February 15, 2002 and February 15, 2003. If
Mr. Dreier's employment is terminated without "cause," Mr. Dreier receives
salary and benefits for the remaining term of the agreement or 24 months,
whichever is greater, a bonus payment for the year of termination, and a payment
of all vested benefits and awards. In the event of a termination of Mr. Dreier's
employment within three years of a "change-in-control" of the Corporation, he
receives a cash payment equal to three times his highest annual salary and
bonus, accelerated vesting under benefit and equity plans of the Corporation,
two years of continued receipt of his current benefits as well as relocation and
outplacement assistance.
The Corporation has senior executive severance agreements pursuant to
which, upon termination of employment within three years of a
"change-in-control" of the Corporation, certain executive officers, including
Messrs. Garrity, Scardina, Schreiner and Scott, receive a cash payment equal to
two times the highest annual compensation paid during the three years prior to
termination, accelerated vesting under benefit and equity plans of the
Corporation, and relocation and outplacement assistance.
9
STOCK OPTION GRANTS IN 1999
Percent Potential Realizable Value
Number of of Total at Assumed Annual Rates of
Securities Options Stock Price Appreciation for
Underlying Granted to Exercise 10-Year Option Term
Options Employees Price Expiration -------------------------
Name Granted (a) in 1999 ($/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 Unexercised Value of Unexercised In-the-
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,
Inc.; 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
Standard and Poor's 500 Index 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
March 1, 2000, the last reported sale price per share of Common Stock, as quoted
on the New York Stock Exchange, was $17.375. The option exercise price may be
paid in the following ways: (1) in cash or check; (2) in shares of Common Stock
of the Corporation (including shares issued upon exercise of the stock option);
(3) by a broker-assisted cashless exercise; or (4) by any combination of the
foregoing methods.
12
Amendment and Termination: The Compensation Committee may amend, suspend or
terminate the Plan or any portion of it at any time without further action of
the stockholders except to the extent required by applicable law or the New York
Stock Exchange. If not sooner terminated by the Compensation Committee, the Plan
will terminate on January 1, 2010.
Plan Benefits
The following table provides information regarding stock options that will
be granted under the Plan on December 31, 2000, assuming all nominees for
Director are approved by the stockholders and are serving on the Board of
Directors on that date.
NEW PLAN BENEFITS TABLE
Plan Name: 2000 Non-Employee Director Equity Plan
Number of Shares
of Common
Stock Underlying
Outstanding
Name and Position Value ($) Options
- ----------------- --------- -------
Named Executive Officers (not eligible under Plan) n/a n/a
Executive Group (not eligible under Plan) n/a n/a
Non-Executive Director Group n/a (1) 35,000 (2)
Non-Executive Officer Employee Group (not eligible under Plan) n/a n/a
- ----------------
(1) Not applicable since value of benefits or amounts is indeterminate.
(2) Assumes a grant of options to acquire 5,000 shares of Common Stock to each
of the seven eligible Non-Executive 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 its conflict of laws principles.
17
RETIREMENT SAVINGS OPPORTUNITY PLAN
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 instructs Vanguard
Fidelity Trust Company, the Trustee, to vote all shares which the undersigned is
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, FOR the approval of the 2000 Non-Employee
Director Equity Plan and, in the discretion of the proxies, upon other 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 the discretion of the proxies, upon other business properly brought
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 constitutes and appoints R. CHAD DREIER,
Chairman, President and Chief Executive Officer of the Corporation, 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 is 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, FOR the approval of the 2000 Non-Employee
Director Equity Plan and, in the discretion of the proxies, upon other 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 the discretion of the proxies, upon other business properly brought
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.
