Employment Agreement - The Ryland Group Inc. and Michael D. Mangan


                             AMENDED AND RESTATED
                             EMPLOYMENT AGREEMENT




This EMPLOYMENT AGREEMENT is made, entered into, and is effective as of this 
18th day of September 1995 (the 'Effective Date'), by and between The Ryland 
Group, Inc., a Maryland corporation (the 'Company'), and Michael D. Mangan 
(the 'Executive'), as amended and restated as of January 28, 1997.

WHEREAS, the Company desires to retain the employment of the Executive as the 
Company's Chief Financial Officer,  and the Executive desires to serve the 
Company in such capacity; and

WHEREAS, the parties hereto desire to set forth their agreement with respect 
to the terms and provisions of the Executive's employment with the Company as 
the Company's Chief Financial Officer.

NOW THEREFORE, in consideration of the foregoing and of the mutual covenants 
and agreements of the parties set forth in this Agreement, and of other good 
and valuable consideration the receipt and sufficiency of which are hereby 
acknowledged, the parties hereto, intending to be legally bound, agree as 
follows:

ARTICLE 1. TERM OF EMPLOYMENT

The Company hereby agrees to employ the Executive and the Executive hereby 
agrees to continue to serve the Company, in accordance with the terms and 
conditions set forth herein, for an initial period of three (3) years, 
commencing as of the Effective Date of this Agreement, as indicated above; 
subject, however, to earlier termination as expressly provided herein.

The initial three (3) year period of employment automatically shall be 
extended for one (1) additional year at the end of the initial three (3) year 
term, and then again after each successive year thereafter. However, either 
party may terminate this Agreement at the end of the initial three (3) year 
period, or at the end of any successive one (1) year term thereafter, by 
giving the other party written notice of intent not to renew, delivered at 
least three (3) months prior to the end of such initial period or successive 
term.

In the event such notice of intent not to renew is properly delivered, this 
Agreement, along with all corresponding rights, duties, and covenants, 
automatically shall expire at the end of the initial period or successive term 
then in progress.

However, regardless of the above, if at any time during the initial period of 
employment, or successive term, a Change of Control of the Company occurs (as 
defined in Article 7 herein), then the term of this Agreement shall be three 
(3) years beyond the month in which the effective date of such Change of 
Control occurs.

ARTICLE 2. POSITION AND RESPONSIBILITIES

During the term of this Agreement, the Executive agrees to serve as Chief 
Financial Officer of the Company and as a member of the Company's Board of 
Directors if so elected. In his capacity as Chief Financial Officer of the 
Company, the Executive shall report directly to the Company's Chief Executive 
Officer, and shall have primary responsibility for formulating financial 
policy and plans and providing overall direction for the accounting, tax, 
insurance, budget, credit, treasury and information systems functions of the 
Company.  The Executive shall have the same status, privileges, and 
responsibilities normally inherent in such capacities in corporations of 
similar size and character.

ARTICLE 3. STANDARD OF CARE

During the term of this Agreement, the Executive agrees to devote 
substantially his full time, attention, and energies to the Company's business 
and shall not be engaged in any other business activity, whether or not such 
business activity is pursued for gain, profit, or other pecuniary advantage. 
However, subject to Section 8.1 herein, the Executive may serve as a director 
of other companies so long as such service is not injurious to the Company. 
The Executive covenants, warrants, and represents that he shall:

(a)     Devote his full and best efforts to the fulfillment of his employment 
obligations; and

(b)     Exercise the highest degree of loyalty and the highest standards of 
conduct in the performance of his duties.

This Article 3 shall not be construed as preventing the Executive from 
investing assets in such form or manner as will not require his services in 
the daily operations of the affairs of the companies in which such investments 
are made.

ARTICLE 4. COMPENSATION

As remuneration for all services to be rendered by the Executive during the 
term of this Agreement, and as consideration for complying with the covenants 
herein, the Company shall pay and provide to the Executive the following:

4.1      Base Salary. The Company shall pay the Executive a Base Salary in an 
amount which shall be established from time to time by the Board of Directors 
of the Company or the Board's designee provided; however, that such Base 
Salary shall not be less than $312,000 per year. This Base Salary shall be 
paid to the Executive in equal biweekly installments throughout the year, 
consistent with the normal payroll practices of the Company.

     The Executive's Base Salary shall be reviewed at least annually during 
the term of this Agreement to ascertain whether, in the judgment of the Board 
or the Board's designee, such Base Salary should be increased, based primarily 
on the performance of the Executive during the year and on the then current 
rate of inflation. If so increased, the Base Salary as stated above shall, 
likewise, be increased for all purposes of this Agreement.

4.2     Annual Bonus. The Executive's targeted cash bonus under the Company's 
annual bonus program (the 'Bonus') shall not be less than 75 percent of the 
Executive's Base Salary.   Except as otherwise provided in Article 6 and 7 
hereof, any Bonus earned under the program shall be payable to the Executive 
in cash within sixty (60) days after the end of each fiscal year of the 
Company during the term of this Agreement, commencing with the fiscal year 
ending December 31, 1995.

4.3     Incentive Programs. The Executive shall participate in such stock 
option, incentive, and performance award programs as are made available 
generally to executives of the Company. With respect to any such program, the 
Company shall provide the Executive with the opportunity to earn an award at a 
level which is commensurate with the opportunity typically offered to 
executives having the same or similar duties and responsibilities as the 
Executive at companies similar in size and in character to the Company; 
provided, however, that the Executive's opportunity shall be at least equal to 
the highest level provided to any Senior Vice President of the Company.

4.4     Retirement Benefits. The Company shall provide to the Executive 
participation in all Company qualified defined benefit and defined 
contribution retirement plans (if any), subject to the eligibility and 
participation requirements of such plans.

4.5     Employee Benefits. The Company shall provide to the Executive all 
benefits to which other executives and employees of the Company are entitled 
to receive, as commensurate with the Executive's position, subject to the 
eligibility requirements and other provisions of such arrangements. Such 
benefits shall include, but not be limited to, split-dollar and group term 
life insurance, comprehensive health and major medical insurance, dental and 
short-term and long-term disability.

4.6     Perquisites. The Company shall provide to the Executive, at the 
Company's cost, all perquisites to which other similarly situated executives 
of the Company are entitled to receive and such other perquisites which are 
suitable to the character of Executive's position with the Company and 
adequate for the performance of his duties hereunder. Without limiting the 
generality of the foregoing, the Company shall provide to the Executive a 
Personal Health and Services Allowance having a total annual value at least 
equal to five percent (5%) of the Executive's Base Salary.

4.7     Right to Change Plans. By reason of Sections 4.3, 4.4, 4.5, and 4.6 
herein, the Company shall not be obligated to institute, maintain, or refrain 
from changing, amending, or discontinuing any benefit plan, program, or 
perquisite, so long as such changes are similarly applicable to executive 
employees generally.

ARTICLE 5. EXPENSES

The Company shall pay, or reimburse the Executive, for all ordinary and 
necessary expenses, in a reasonable amount, which the Executive incurs in 
performing his duties under this Agreement including, but not limited to, 
travel, entertainment, professional dues and subscriptions, and all dues, 
fees, and expenses associated with membership in various professional, 
business, and civic associations and societies of which the Executive's 
participation is in the best interest of the Company.

ARTICLE 6. EMPLOYMENT TERMINATIONS

6.1     Termination Due to Retirement or Death. In the event the Executive's 
employment is terminated while this Agreement is in force by reason of 
Retirement (as defined under the then established rules of the Company's tax-
qualified retirement plan) or death, the Executive's benefits shall be 
determined in accordance with the Company's retirement, survivor's benefits, 
insurance, and other applicable programs of the Company then in effect. Upon 
the effective date of such termination, the Company's obligation under this 
Agreement to pay and provide to the Executive the elements of pay described in 
Article 4 herein shall immediately expire, except to the extent that the 
benefits described in Sections 4.4 and 4.5 continue after Retirement under the 
terms of the benefit plans and programs which apply generally to the Company's 
executives, and except that the Executive shall receive all other rights and 
benefits that he is vested in pursuant to other plans and programs of the 
Company. In addition, the Company shall pay to the Executive (or the 
Executive's beneficiaries, or estate, as applicable), a pro rata share of his 
Bonus for the fiscal year in which employment termination occurs, based on the 
results of the Company for such fiscal year. This pro rata Bonus amount shall 
be determined by multiplying the Bonus which otherwise would apply for such 
full fiscal year by a fraction, the numerator of which is the number of days 
in such fiscal year prior to the date of employment termination and the 
denominator of which is the total number of days in such fiscal year. The pro 
rata Bonus shall be paid within sixty (60) days of the end of such fiscal 
year.

6.2     Termination Due to Disability. In the event that the Executive becomes 
Disabled (as defined below) during the term of this Agreement and is, 
therefore, unable to perform his duties herein for more than one hundred 
twenty (120) total calendar days during any period of twelve (12) consecutive 
months, or in the event of the Board's reasonable expectation that the 
Executive's Disability will exist for more than a period of one hundred twenty 
(120) calendar days, the Company shall have the right to terminate the 
Executive's active employment as provided in this Agreement. However, the 
Board shall deliver written notice to the Executive of the Company's intent to 
terminate for Disability at least thirty (30) calendar days prior to the 
effective date of such termination.

     A termination for Disability shall become effective upon the end of the 
thirty (30) day notice period. Upon such effective date, the Company's 
obligation to pay and provide to the Executive the elements of pay described 
in Article 4 herein shall immediately expire, except to the extent that the 
benefits described in Sections 4.4 and 4.5 continue after Disability under the 
terms of the benefit plans and programs which apply generally to the Company's 
executives, and except that the Executive shall receive all rights and 
benefits that he is vested in pursuant to other plans and programs of the 
Company. In addition, the Company shall pay to the Executive a pro rata share 
of his Bonus for the fiscal year in which employment termination occurs, based 
on the results for such fiscal year, determined as provided in Section 6.1 
herein. The pro rata Bonus shall be paid within sixty (60) days of the end of 
such fiscal year.

     The term 'Disability' shall mean, for all purposes of this Agreement, the 
incapacity of the Executive, due to injury, illness, disease, or bodily or 
mental infirmity, to engage in the performance of substantially all of the 
usual duties of employment with the Company as contemplated by Article 2 
herein, such Disability to be determined by the Board of Directors of the 
Company upon receipt and in reliance on competent medical advice from one (1) 
or more individuals, selected by the Board, who are qualified to give such 
professional medical advice.

     It is expressly understood that the Disability of the Executive for a 
period of one hundred twenty (120) calendar days or less in the aggregate 
during any period of twelve (12) consecutive months, in the absence of any 
reasonable expectation that his Disability will exist for more than such a 
period of time, shall not constitute a failure by him to perform his duties 
hereunder and shall not be deemed a breach or default and the Executive shall 
receive full compensation for any such period of Disability or for any other 
temporary illness or incapacity during the term of this Agreement.

6.3     Voluntary Termination by the Executive. The Executive may terminate 
this Agreement at any time by giving the Board of Directors of the Company 
written notice of intent to terminate, delivered at least ninety (90) calendar 
days prior to the effective date of such termination.

     Upon the effective date of such termination, following the expiration of 
the ninety (90) day notice period, the Company shall pay the Executive his 
full Base Salary, at the rate then in effect as provided in Section 4.1 
herein, through the effective date of termination, plus all other benefits to 
which the Executive has a vested right to at that time (for this purpose, the 
Executive shall not be paid any Bonus with respect to the fiscal year in which 
voluntary termination under this Section 6.3 occurs). In the event that the 
terms and provisions of Section 6.6 or Article 7 herein do not apply to such 
termination, the Company and the Executive thereafter shall have no further 
obligations under this Agreement. However, in the event the terms and 
provisions of Section 6.6 or Article 7 herein apply, the payments and benefits 
set forth therein shall apply.

6.4     Involuntary Termination by the Company Without Cause.  Other than 
during a Change of Control Period (as defined in Section 7.2), the Board may 
terminate the Executive's employment, as provided under this Agreement, at any 
time, for reasons other than death, Disability, Retirement, or for Cause, by 
notifying the Executive in writing of the Company's intent to terminate, at 
least thirty (30) calendar days prior the effective date of such termination. 

     Unless the provisions of Section 7 apply, upon the effective date of such 
termination, following the expiration of the thirty (30) day notice period, 
the Company shall pay to the Executive a lump-sum cash payment equal to the 
greater of: (a) the Base Salary then in effect for the remaining term of this 
Agreement; or (b) eighteen (18) full months of the Base Salary in effect as of 
the effective date of termination. In addition, the Company shall provide the 
Executive a continuation of his health and welfare benefits for the longer of: 
(x) the remaining term of the Agreement; or (y) eighteen (18) full months at 
the employee rates then in effect.  If for any reason the Company is unable to 
continue health and welfare benefits as required by the preceding sentence, 
the Company shall either provide equivalent benefits to the Executive or pay 
to the Executive a lump-sum cash payment equal to the value of the benefits 
which the Company is unable to provide.  Continuation of health benefits under 
this Section 6.4 will count against, and will not extend, the period during 
which benefits are required to be continued under COBRA.

     In addition, the Company shall make a prorated payment of the Executive's 
targeted Bonus for the fiscal year in which termination occurs, calculated 
based upon the performance of the Company through the end of the month 
immediately preceding the effective date of the termination. Payment of the 
Bonus shall be made in cash, in one lump sum, at the same time payment of Base 
Salary is made pursuant to this Section 6.4. Further, the Company shall pay 
the Executive all other benefits to which the Executive has a vested right at 
the time, according to the provisions of each governing plan or program. The 
Company and the Executive thereafter shall have no further obligations under 
this Agreement.

     For purposes of this Section 6.4: (i) with respect to the fiscal year in 
which termination occurs, the Executive shall be fully vested in any prior 
year awards that remain unvested or awards made for the fiscal year in which 
termination occurs under the TRG Incentive Plan or any successor plan, and 
(ii) all vested awards under any incentive programs shall be paid 
notwithstanding any provision of the governing plan or program calling for 
forfeiture of benefits upon termination.  If for any reason the Company is 
unable to comply with the preceding sentence, the Company shall pay the 
Executive a lump-sum cash payment equal to the value of the benefits or awards 
it is unable to vest, pay or give credit for.

     If the Executive's employment is terminated for any of the reasons set 
forth in Article 7 herein, the Executive shall be entitled to receive the 
benefits provided in Article 7 herein.

6.5     Termination For Cause. Nothing in this Agreement shall be construed to 
prevent the Board from terminating the Executive's employment under this 
Agreement for 'Cause.'

     'Cause' shall be determined by the Board in the exercise of good faith 
and reasonable judgment; and shall be defined as the conviction of the 
Executive for the commission of an act of fraud, embezzlement, theft, or other 
criminal act constituting a felony under U.S. laws involving moral turpitude; 
or the gross neglect of the Executive in the performance of any and all 
material covenants under this Agreement, for reasons other than the 
Executive's death, Disability, or Retirement. The Company's Board of 
Directors, by majority vote, shall make the determination of whether Cause 
exists, after providing the Executive with notice of the reasons the Board 
believes Cause may exist, and after giving the Executive the opportunity to 
respond to the allegation that Cause exists.

     In the event this Agreement is terminated by the Board for Cause, the 
Company shall pay the Executive his Base Salary through the effective date of 
the employment termination and the Executive shall immediately thereafter 
forfeit all rights and benefits (other than vested benefits) he would 
otherwise have been entitled to receive under this Agreement. The Company and 
the Executive thereafter shall have no further obligations under this 
Agreement.

6.6     Termination by Executive for Good Reason. At any time during the term 
of this Agreement, the Executive may terminate this Agreement for Good Reason 
(as defined below) by giving the Board of Directors of the Company thirty (30) 
calendar days written notice of intent to terminate, which notice sets forth 
in reasonable detail the facts and circumstances claimed to provide a basis 
for such termination.

     Upon the expiration of the thirty (30) day notice period, the Good Reason 
termination shall become effective, and the Company shall pay and provide to 
the Executive the benefits set forth in this Section 6.6 unless the provisions 
of Section 7 apply.

     Good Reason shall mean, without the Executive's express written consent, 
the occurrence of any one or more of the following:

(a)     The assignment of the Executive to duties materially inconsistent with 
the Executive's authorities, duties, responsibilities, and status (including 
offices, titles, and reporting requirements) as an officer of the Company, or 
a reduction or alteration in the nature or status of the Executive's 
authorities, duties, or responsibilities from those in effect during the 
immediately preceding fiscal year, other than an insubstantial and inadvertent 
act that is remedied by the Company promptly after receipt of notice thereof 
given by the Executive;

(b)     Without the Executive's consent, the Company's requiring the Executive 
to be based at a location which is at least fifty (50) miles further from the 
Executive's primary residence as of the Effective Date than is such residence 
from the Company's current headquarters, except for required travel on the 
Company's business to an extent substantially consistent with the Executive's 
business obligations as of the Effective Date;

(c)     A failure by the Company to meet any obligation under Article 4 
herein, except as provided in Section 4.7 herein.

(d)     The failure of the Company to obtain a satisfactory agreement from any 
successor to the Company to assume and agree to perform this Agreement, as 
contemplated in Section 10.1 herein.

     Upon a termination of the Executive's employment for Good Reason at any 
time, the Executive shall be entitled to receive the same payments and 
benefits as he is entitled to receive following an involuntary termination of 
his employment by the Company without Cause, as specified in Section 6.4 
herein unless the provisions of Section 7 apply. The payment of Base Salary 
and pro rata Bonus shall be made to the Executive within thirty (30) calendar 
days following the effective date of employment termination.

     The Executive's right to terminate employment for Good Reason shall not 
be affected by the Executive's incapacity due to physical or mental illness. 
The Executive's continued employment shall not constitute consent to, or a 
waiver of rights with respect to, any circumstance constituting Good Reason 
herein.

6.7     Nonrenewal by Company. Upon any termination of this Agreement as a 
result of a notice of nonrenewal by the Company pursuant to Article 1 hereof, 
upon the effective date of such termination, the Company shall pay to the 
Executive a lump-sum cash payment equal to twelve (12) full months' Base 
Salary then in effect and shall continue the Executive's health and welfare 
benefits for twelve (12) full months at the employee rates then in effect.  If 
for any reason the Company is unable to continue health and welfare benefits 
as required by the preceding sentence, the Company shall either provide 
equivalent benefits to the Executive or pay to the Executive a lump-sum cash 
payment equal to the value of the benefits which the Company is unable to 
provide. Continuation of health benefits under this Section 6.7 will count 
against, and will not extend, the period during which benefits are required to 
be continued under COBRA.  In addition, the Company shall pay the Executive's 
Bonus for the final year within sixty (60) days after the effective date of 
the termination of this Agreement.

ARTICLE 7. CHANGE OF CONTROL

7.1     Termination in Connection With a Change of Control.   In lieu of the 
compensation and benefits provided in Sections 4 or 6, which will be 
superseded and replaced by the provisions of this Section 7, the following 
payments and benefits will be provided to the Executive by the Company in the 
event of a Termination of Employment (as defined below) during a Change of 
Control Period (as defined below) of the Company:

(a)     Lump Sum Cash Payment.   On or before the Executive's last day of 
employment with the Company, the Company will pay the Executive an amount 
equal to the Executive's unpaid Base Salary for the year in which the 
Termination of Employment occurs and a pro rata Bonus through the date of 
Termination of Employment determined in accordance with Section 6.1.  Also, on 
or before the  Executive's last day of employment with the Company, the 
Company will pay the Executive a lump sum cash payment equal to three (3) 
times the highest Annual Compensation (as defined below) paid to the Executive 
in any of the three (3) calendar years immediately preceding the date of 
Termination of Employment.

(b)     Accelerated Vesting and Supplemental Payments.   All rights, awards 
and benefits of the Executive in the TRG Incentive Plan or other incentive 
plan, the deferred compensation plans (including the Retirement and Stock 
Ownership Plan, Executive and Director Deferred Compensation Plan and any 
successor or replacements plans) and any stock option or other benefit plans 
of the Company in which the Executive participates shall immediately vest in 
full and the Executive shall be paid in a lump sum as soon as practicable 
after the date of Termination of Employment.  To the extent that any of the 
plans of the Company would not under applicable law permit accelerated 
vesting, the Executive will be paid supplementally by the Company the amount 
of additional benefits payable if  full vesting had taken place as of the date 
of Termination of Employment.  All supplemental payments are provided on an 
unfunded basis, are not intended to meet the qualification requirements of 
Section 401 of the Internal Revenue Code, and shall be payable solely from the 
general assets of the Company.

(c)     Insurance and Other Special Benefits.   The Executive's participation 
in the life, accident and health insurance, employee welfare benefit plans (as 
defined in the Employee Retirement Income Security Act of  1974) and other 
fringe benefits (the 'Benefits') provided to the Executive prior to the Change 
of Control or the Termination of Employment shall be continued or equivalent 
benefits provided by the Company at no cost to the Executive for a period of 
two (2) years from the date of the Executive's Termination of Employment.  If 
for any reason the Company is unable to continue the Benefits as required by 
the preceding sentence, the Company shall pay to the Executive a lump sum cash 
payment equal to the value of the Benefits which the Company is unable to 
provide.  

(d)     Relocation Assistance.   Should the Executive move his residence in 
order to pursue other business opportunities within two (2) years after the 
date of the Executive's Termination of Employment, he will be reimbursed for 
any expenses incurred in that relocation, including taxes payable on the 
reimbursement, which are not reimbursed by another employer.  Benefits under 
this paragraph will include assistance in selling the Executive's home and all 
other assistance and benefits which are provided by the Company under its 
relocation plan as in effect immediately prior to the Change of Control Period 
or the Termination of Employment.

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

(f)     Outplacement Assistance.   The Executive shall be reimbursed by the 
Company for the cost of all outplacement services obtained by the Executive 
within the two (2) year period after the date of Termination of Employment 
provided the total reimbursement shall be limited to an amount equal to 
fifteen percent (15%) of the Executive's Annual Compensation for the calendar 
year immediately preceding the date of Termination of Employment.

7.2     Definitions.

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

(i)     The acquisition by any person, other than the Company or any employee 
benefit plan of the Company, of beneficial ownership of  20% or more of the 
combined voting power of the Company's then outstanding voting securities;

(ii)     The first purchase under a tender offer or exchange offer, other than 
an offer by the Company or any employee benefit plans of the Company, pursuant 
to which shares of common stock have been purchased; 

(iii)     During any period of two consecutive years, individuals who at the 
beginning of such period constitute the Board of Directors of the Company 
cease for any reason to constitute at least a majority thereof, unless the 
election or the nomination for the election by stockholders of the Company of 
each new director was approved by a vote of at least two-thirds of the 
directors then still in office who were directors at the beginning of the 
period; or

(iv)     Approval by stockholders of the Company of a merger, consolidation, 
liquidation or dissolution of the Company, or the sale of all or substantially 
all of the assets of the Company.

(b)     'Annual Compensation' shall mean the sum of the Base Salary and the 
Bonus paid to the Executive and all vested amounts credited to the Executive 
under any incentive compensation or other benefit plans of the Company in 
which the Executive participates during the applicable calendar year.

(c)     A 'Termination of Employment' shall take place in the event that (a) 
the Executive's employment is terminated for any reason other than as a 
consequence of death, disability or normal retirement, (b) the Executive is 
assigned any duties or responsibilities that are inconsistent in any respect 
with his position, duties, responsibilities or status prior to a Change of 
Control Period, (c) the Company requires the Executive to be based at a 
location which is more than fifty (50) miles from the Executive's then current 
primary residence, (d) the Executive's Base Salary is reduced, (e) the 
Executive experiences in any year a reduction in the ratio of his incentive 
compensation, bonus or other such payments to his base compensation which is 
greater than the average reduction in the ratio of incentive compensation, 
bonus or other such payments to base compensation experienced by all of the 
Company's or the successor company's executive officers, or (f) the Company 
gives the Executive notice of an intent not to renew or does not renew the 
term of this Agreement at any time during a Change of Control Period.

(d)     A 'Change of Control Period' shall mean the period of time commencing 
with the date of a Change of Control or on which the Company becomes aware of 
or enters into any discussions or negotiations that could involve a Change of 
Control or a proposed transaction which could result in a Change of Control, 
and ending on the first to occur of: (a) three (3) years after the effective 
date of the Change of Control, or (b) the date on which the proposed Change of 
Control is no longer discussed or expected to occur.

7.3     Subsequent Imposition of Excise Tax.  If it is ultimately determined 
by a court or pursuant to a final determination by the Internal Revenue 
Service that any portion of the payments to the Executive is considered to be 
an 'excess parachute payment', subject to the excise tax under Section 4999 of 
the Code, the Executive shall be entitled to receive a lump sum cash payment 
sufficient to place the Executive in the same net after-tax position, computed 
by using the 'Special Tax Rate' as such term is defined below, that the 
Executive would have been in had such payment not been subject to such excise 
tax, and had the Executive not incurred any interest charges or penalties with 
respect to the imposition of such excise tax.  For purposes of this Agreement, 
the 'Special Tax Rate' shall be the highest effective Federal and state 
marginal tax rates applicable to the Executive in the year in which the 
payment contemplated under this Section 7.3 is made. 

ARTICLE 8. NONCOMPETITION

8.1     Prohibition on Competition. Without the prior written consent of the 
Company: (a) during the term of this Agreement; (b) for twenty-four (24) 
months following the expiration or termination of this Agreement as a result 
of Notice of Nonrenewal by the Executive pursuant to Article 1; and (c) for 
twenty-four (24) months following the effective date of a termination of this 
Agreement by the Executive pursuant to Section 6.3, the Executive shall not 
serve as an employee or officer of any business or enterprise which is both: 
(1) engaged in the domestic home-building business; and (2) is ranked in the 
top ten, based on annual revenues, of all domestic homebuilders.

     However, the Executive shall be allowed to purchase and hold for 
investment less than three percent (3%) of the shares of any corporation whose 
shares are regularly traded on a national securities exchange or in the over-
the-counter market.

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

8.3     Covenants Regarding Other Employees. During the term of this 
Agreement, and for a period of twenty-four (24) months following the 
expiration of this Agreement, the Executive agrees not to attempt to induce 
any employee of the Company to terminate his or her employment with the 
Company, accept employment with any competitor of the Company, or to interfere 
in a similar manner with the business of the Company.

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

ARTICLE 9. INDEMNIFICATION

The Company hereby covenants and agrees to indemnify and hold harmless the 
Executive fully, completely, and absolutely against and in respect to any and 
all actions, suits, proceedings, claims, demands, judgments, costs, expenses 
(including attorney's fees), losses, and damages resulting from the 
Executive's good faith performance of his duties and obligations under the 
terms of this Agreement.  Nothing herein shall limit or reduce any rights of 
indemnification to which the Executive might be entitled under the charter or 
by-laws of the Company or otherwise.

ARTICLE 10. ASSIGNMENT

10.1     Assignment by Company. This Agreement may and shall be assigned or 
transferred to, and shall be binding upon and shall inure to the benefit of, 
any successor of the Company, and any such successor shall be deemed 
substituted for all purposes of the 'Company' under the terms of this 
Agreement. As used in this Agreement, the term 'successor' shall mean any 
person, firm, corporation, or business entity which at any time, whether by 
merger, purchase, or otherwise, acquires all or substantially all of the 
assets or the business of the Company. Notwithstanding such assignment, the 
Company shall remain, with such successor, jointly and severally liable for 
all its obligations hereunder.

     Failure of the Company to obtain the agreement of any successor to be 
bound by the terms of this Agreement prior to the effectiveness of any such 
succession shall be a breach of this Agreement, and shall immediately entitle 
the Executive to compensation from the Company in the same amount and on the 
same terms as provided in Article 7 hereof.

     Except as herein provided, this Agreement may not otherwise be assigned 
by the Company.

10.2     Assignment by Executive. The services to be provided by the Executive 
to the Company hereunder are personal to the Executive, and the Executive's 
duties may not be assigned by the Executive; provided, however that this 
Agreement shall inure to the benefit of and be enforceable by the Executive's 
personal or legal representatives, executors, and administrators, successors, 
heirs, distributees, devisees, and legatees. If the Executive dies while any 
amounts payable to the Executive hereunder remain outstanding, all such 
amounts, unless otherwise provided herein, shall be paid in accordance with 
the terms of this Agreement to the Executive's devisee, legatee, or other 
designee or, in the absence of such designee, to the Executive's estate.

ARTICLE 11. DISPUTE RESOLUTION AND NOTICE

11.1     Dispute Resolution. The Executive shall have the right and option to 
elect to have any good faith dispute or controversy arising under or in 
connection with this Agreement settled by litigation or by arbitration.

     If arbitration is selected, such proceeding shall be conducted before a 
panel of three (3) arbitrators sitting in a location selected by the Executive 
within fifty (50) miles from the location of his principal place of 
employment, in accordance with the rules of the American Arbitration 
Association then in effect. Judgment may be entered on the award of the 
arbitrators in any court having competent jurisdiction.

     All expenses of such litigation or arbitration, including the reasonable 
fees and expenses of the legal representative for the Executive, and necessary 
costs and disbursements incurred as a result of such dispute or legal 
proceeding, and any prejudgment interest, shall be borne by the Company.

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

ARTICLE 12. MISCELLANEOUS

12.1     Entire Agreement. This Agreement supersedes any prior agreements or 
understandings, oral or written, between the parties hereto, or between the 
Executive and the Company, with respect to the subject matter hereof, and 
constitutes the entire agreement of the parties with respect thereto.

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

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

12.4     Counterparts. This Agreement may be executed in one (1) or more 
counterparts, each of which shall be deemed to be an original, but all of 
which together will constitute one and the same Agreement.

12.5     Tax Withholding. The Company may withhold from any benefits payable 
under this Agreement all Federal, state, city, or other taxes as may be 
required pursuant to any law or governmental regulation or ruling.

12.6     Beneficiaries. The Executive may designate one or more persons or 
entities as the primary and/or contingent beneficiaries of any amounts to be 
received under this Agreement. Such designation must be in the form of a 
signed writing acceptable to the Board or the Board's designee. The Executive 
may make or change such designation at any time.

ARTICLE 13. GOVERNING LAW

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

IN WITNESS WHEREOF, the Executive and the Company have executed this Agreement 
as of September 18, 1995 and as amended and restated as of January 28, 1997.



THE RYLAND GROUP, INC.                              EXECUTIVE:


By:  /s/ R. Chad Dreier                             /s/ Michael D. Mangan
     ------------------                             ---------------------
     R. Chad Dreier, Chairman                       Michael D. Mangan
     of the Board of Directors, President
     and Chief Executive Officer


Attest:     /s/ Timothy J. Geckle
            ---------------------
            Timothy J. Geckle, Secretary