{"id":39641,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/employment-agreement-the-ryland-group-inc-and-r-chad-dreier3.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"employment-agreement-the-ryland-group-inc-and-r-chad-dreier3","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/employment-agreement-the-ryland-group-inc-and-r-chad-dreier3.html","title":{"rendered":"Employment Agreement &#8211; The Ryland Group Inc. and R. Chad Dreier"},"content":{"rendered":"<pre>                           EMPLOYMENT AGREEMENT\n\n     EMPLOYMENT AGREEMENT dated as of the 31st day of December 1994, by and \nbetween The Ryland Group, Inc., a Maryland corporation (the 'Company'), and  \nR. Chad Dreier (the 'Executive').\n\n                        W  I  T  N  E  S  S  E  T  H:\n\n     The Executive is presently employed by the Company in the capacity of its \nChairman of the Board, President and Chief Executive Officer and possesses \nconsiderable experience and an intimate knowledge of the business and affairs \nof the Company, its policies, methods, personnel and operations.  The Company \nrecognizes that the Executive's contributions have been substantial and \nmeritorious and that the Executive has demonstrated unique qualifications to \nact in an executive capacity for the Company.  The Company is desirous of \nassuring the continued employment of the Executive and the Executive is \ndesirous of having such assurance.\n\n     NOW THEREFORE, in consideration of the foregoing and of the mutual     \ncovenants and agreements of the parties set forth in this Agreement, and of \nother good and valuable consideration the receipt and sufficiency of which are \nhereby acknowledged, the parties hereto, intending to be legally bound, agree \nas follows: \n\n1.   TERM OF EMPLOYMENT.  The Company hereby agrees to employ the Executive \nand the Executive hereby agrees to continue to serve the Company, in \naccordance with the terms and conditions set forth herein, for an initial \nperiod of three (3) years, commencing as of January 1, 1995 (the 'Effective \nDate'); subject, however, to earlier termination as expressly provided herein.  \nThe initial three (3) year period of employment automatically shall be \nextended for one (1) additional year at the end of the initial three (3) year \nterm, and then again after each successive year thereafter. However, either \nparty may terminate this Agreement at the end of the initial three (3) year \nperiod, or at the end of any successive one (1) year term thereafter, by \ngiving the other party written notice of intent not to renew, delivered at \nleast one hundred eighty (180) days prior to the end of such initial period or \nsuccessive term.  In the event such notice of intent not to renew is properly \ndelivered, this Agreement, along with all corresponding rights, duties and \ncovenants, automatically shall expire at the end of the initialperiod or \nsuccessive term then in progress (except as otherwise provided in Section 6 \nand 9 hereof).\n\nRegardless of the above, if at any time during the initial period of \nemployment, or successive term, a Change in Control of the Company occurs (as \ndefined in Section 7 hereof), then the term of this Agreement thereafter shall \nbe the longer of: (a) two (2) years beyond the month in which the effective \ndate of such Change in Control occurs; or (b) the term as otherwise provided \nby this Section 1.\n\n2.   POSITION AND RESPONSIBILITIES.  During the term of this Agreement, the  \nExecutive shall serve as the President and Chief Executive Officer of the \nCompany and, if so elected, as a member of the Company's Board of Directors \nand Chairman of the Board. In his capacity as President and Chief Executive \nOfficer of the Company, the Executive shall be the Company's highest ranking \nexecutive officer and shall have full authority and responsibility, subject to \nthe control of the Board of Directors of the Company, for formulating and \nadministering the plans and policies of the Company. The Executive shall have \nthe same status, privileges and responsibilities normally inherent in such \ncapacities in corporations of similar size and character.\n\n3.   PERFORMANCE OF DUTIES.  During the term of this Agreement, the Executive \nagrees to devote substantially his full time, attention and energies \nto the Company's business and will not engage in consulting work or any \ntrade or business for his own account or for or on behalf of any other \nperson, firm or corporation which competes or, in a material way, \nconflicts or interferes with the performance of his duties hereunder.\nSubject to Section 9.1 herein, the Executive may serve as a director of \nother companies so long as such service does not interfere with the per-\nformance of his duties to the Company.\n\n4.   COMPENSATION.  As remuneration for all services to be rendered by the \nExecutive during the term of this Agreement, and as consideration for \ncomplying with the covenants herein, the Company shall pay and provide to the \nExecutive the following: \n\n\n\n\n4.1  BASE SALARY.  The Company shall pay the Executive a Base Salary in an \namount which shall be established from time to time by the Board of Directors \nof the Company, provided that such Base Salary shall not be less than six \nhundred thousand dollars ($600,000) per year. This Base Salary shall be paid \nto the Executive in installments throughout the year consistent with the \nnormal payroll practices of the Company.  The annual Base Salary shall be \nreviewed at least annually following the Effective Date of this Agreement to \nascertain whether, in the judgment of the Board of Directors, such Base Salary \nshould be increased, based on the performance of the Executive during the \nyear, inflation and other factors deemed appropriate by the Board of \nDirectors.  If so increased, the Base Salary as stated above shall, likewise, \nbe increased for all purposes of this Agreement. \n\n4.2  ANNUAL BONUS.  In addition to his Base Salary, the Executive shall be \neligible to receive an annual cash bonus (the 'Bonus') in respect of each \nfiscal year during the term of this Agreement equal to three-quarters of one \npercent (0.75%) of the Ordinary Course Pre-Tax Income.  For purposes of this \nAgreement, 'Ordinary Course Pre-Tax Income' shall mean the consolidated pre-\ntax income of the Company and its subsidiaries as reflected in the audited \nconsolidated financial statements of the Company, as adjusted in good faith by \nthe Compensation Committee to eliminate the effect of nonrecurring gains and \nlosses and other items not reflective of the ongoing ordinary course of \nbusiness operating performance of the Company and its subsidiaries.\n\nThe Bonus shall be payable to the Executive in cash within sixty (60) days \nafter the end of each fiscal year during the term of the Agreement, commencing \nwith the fiscal year ending December 31, 1995.\n\n4.3  INCENTIVE PLANS.  The Executive shall be eligible to participate in such \nprofit-sharing, stock option, Bonus, incentive and performance award programs \nas are made available generally to executive officers of the Company, such \nparticipation to be on a basis which is commensurate with the Executive's \nposition with the Company (and in any event a level of participation at least \nas favorable as that provided to executives with junior authority or duties).\n\n4.4  OTHER BENEFITS.  The Executive shall be entitled to receive employee \nbenefits, including, without limitation, pension, disability, group life, \nsickness, accident and health insurance programs and split-dollar life \ninsurance programs, and perquisites as are made available generally to \nexecutive officers of the Company, such participation to be on a basis which \nis commensurate with the Executive's position within the Company (and in any \nevent a level of participation at least as favorable as that provided to \nexecutives with junior authority or duties).\n\n4.5  RIGHT TO CHANGE PLANS.  By reason of Sections 4.3 and 4.4 herein, the      \nCompany shall not be obligated to institute, maintain, or refrain from \nchanging, amending, or discontinuing any benefit plan, program, or perquisite, \nso long as such changes are similarly applicable to executive employees \ngenerally. \n\n5.   EXPENSES.  The Company shall pay, or reimburse the Executive, for all \nordinary and necessary expenses, in a reasonable amount, which the Executive \nincurs in performing his duties under this Agreement, including, but not \nlimited to, travel, entertainment, professional dues and subscriptions, and \nall dues, fees, and expenses associated with membership in various \nprofessional, business, and civic associations and societies of which the \nExecutive's participation is in the best interest of the Company. \n\n6.   EMPLOYMENT TERMINATIONS.\n\n6.1  TERMINATION DUE TO RETIREMENT OR DEATH.  In the event the Executive's \nemployment is terminated while this Agreement is in force by reason of \nRetirement (as defined under the then established rules of the Company's \nretirement plans), or death, the Executive's benefits shall be determined in \naccordance with the Company's retirement, survivor's benefits, insurance, and \nother applicable programs of the Company then in effect. Upon the effective \ndate of such termination, the Company's obligation under this Agreement to pay \nand provide to the Executive the elements of pay described in Sections 4.1, \n4.2, 4.3 and 4.4 shall immediately expire, except to the extent that the \nbenefits described in Section 4.4 continue after Retirement under the terms of \nthe benefit plans and programs which apply generally to the Company's \nexecutives and except that the Executive shall receive all other rights and \nbenefits that he is vested in pursuant to other plans and programs of the \nCompany. In addition, the Company shall pay to the Executive (or the \nExecutive's beneficiaries, or estate, as applicable), a pro rata share of his \nBonus for the fiscal year in which employment termination occurs, based on the \nresults of the Company for such fiscal year. This pro rata Bonus amount shall \nbe determined by multiplying the Bonus which otherwise would apply or such \nfull fiscal year by a fraction, the numerator of which is the number of days \nin such fiscal year prior to the date of employment termination and the \ndenominator of which is the total number of days in such fiscal year. The pro \nrata Bonus shall be paid within sixty (60) days of the end of such fiscal \nyear.\n\n\n\n\n6.2  TERMINATION DUE TO DISABILITY.  In the event that the Executive becomes \nDisabled (as defined below) during the term of this Agreement and is, \ntherefore, unable to perform his duties herein for more than one hundred \ntwenty (120) total calendar days during any period of twelve (12) consecutive \nmonths, or in the event of the Board's reasonable expectation that the \nExecutive's Disability will exist for more than a period of one hundred twenty \n(120) calendar days, the Company shall have the right to terminate the \nExecutive's active employment as provided in this Agreement. However, the \nBoard shall deliver written notice to the Executive of the Company's intent to \nterminate for Disability at least thirty (30) calendar days prior to the \neffective date of such termination.  A termination for Disability shall become \neffective upon the end of the thirty (30) day notice period. Upon such \neffective date, the Company's obligation to pay and provide to the Executive \nthe elements of pay described in Sections 4.1, 4.2, 4.3 and 4.4 shall \nimmediately expire, except to the extent that the benefits described in \nSection 4.4 continue after Disability or Retirement under the terms of the \nbenefit plans and programs which apply generally to the Company's executives \nand except that the Executive shall receive all rights and benefits that he is \nvested in pursuant to other plans and programs of the Company. In addition, \nthe Company shall pay to the Executive a pro rata share of his Bonus for the \nfiscal year in which employment termination occurs, based on the results for \nsuch fiscal year, determined as provided in Section 6.1.  The pro rata Bonus \nshall be paid within sixty (60) days of the end of such fiscal year.\n\nThe term 'Disability' shall mean, for all purposes of this Agreement, the \nincapacity of the Executive, due to injury, illness, disease, or bodily or \nmental infirmity, to engage in the performance of substantially all of the \nusual duties of employment with the Company as contemplated by Section 2 \nherein, such Disability to be determined by the Board of Directors of the \nCompany upon receipt and in reliance on competent medical advice from one (1) \nor more individuals, selected by the Board, who are qualified to give such \nprofessional medical advice.It is expressly understood that the Disability of \nthe Executive for a period of one hundred twenty (120) calendar days or less \nin the aggregate during any period of twelve (12) consecutive months, in the \nabsence of any reasonable expectation that his Disability will exist for more \nthan such a period of time, shall not constitute a failure by him to perform \nhis duties hereunder and shall not be deemed a breach or default and the \nExecutive shall receive full compensation for any such period of Disability or \nfor any other temporary illness or incapacity during the term of this \nAgreement.\n\n6.3  VOLUNTARY TERMINATION BY THE EXECUTIVE.  The Executive may terminate this \nAgreement at any time by giving the Board of Directors of the Company written \nnotice of intent to terminate, delivered at least ninety (90) days prior to \nthe effective date of such termination.Upon the expiration of the ninety (90) \nday notice period, the termination by the Executive shall become effective.  \nThe Company shall pay the Executive his Base Salary, at the rate then in \neffect as provided in Section 4.1 herein, through the effective date of \ntermination, plus all other benefits to which the Executive has a vested right \nto at that time (for this purpose, the Executive shall not be paid any Bonus \nwith respect to the fiscal year in which voluntary termination under this \nSection 6.3 occurs).  The Company and the Executive shall have no further \nobligations under this Agreement after the effective date of such termination, \nexcept as set forth in Sections 9 or 10 hereof.\n\n6.4  INVOLUNTARY TERMINATION BY THE COMPANY WITHOUT CAUSE.  The Board may \nterminate the Executive's employment, as provided under this Agreement, at any \ntime, for reasons other than death, Disability, Retirement, or for Cause (as \ndefined in Section 6.5 hereof), by notifying the Executive in writing of the \nCompany's intent to terminate, at least thirty (30) calendar days prior the \neffective date of such termination.Upon the expiration of the thirty (30) day \nnotice period the termination by the Company shall become effective, and the \nCompany shall pay and provide to the Executive the benefits set forth in this \nSection 6.4 (plus, in the event of termination by the Company during a Change \nof Control Period, any additional benefits required by Section 7.1 hereof).\n\nUpon a termination of the Executive's employment by the Company pursuant to \nthis Section 6.4 at any time other than during a Change of Control Period, the \nCompany shall pay to the Executive, within thirty (30) days after the \neffective date of such termination, a lump sum cash payment equal to the \ngreater of: (a) the Base Salary then in effect for the remaining term of this \nAgreement (assuming no additional extensions of this Agreement's term beyond \nthat in effect as of the effective date of termination); or (b) eighteen (18) \nfull months of his Base Salary in effect as of the effective date of \ntermination, and shall thereafter provide to the Executive a continuation of \nhis health and welfare benefits for a period equal to the greater of such \nremaining term or eighteen (18) months, as applicable.  If for any reason the \nCompany is unable to continue health and welfare benefits as required by the \npreceding sentence, the Company shall either provide equivalent benefits to \nthe Executive or pay to the Executive a lump sum cash payment equal to the \nvalue of the benefits which the Company is unable to provide.  Continuation of \nhealth benefits under this Section 6.4 will count against, and will not \nextend, the period during which benefits are required to be continued under \nCOBRA.\n\n\n\n\nIn addition, the Company shall make a prorated payment of the Executive's \nBonus for the fiscal year in which termination occurs, calculated based upon \nthe performance of the Company through the end of the month immediately \npreceding the effective date of the termination.  Payment of the Bonus shall \nbe made in cash, in one lump sum, at the same time payment of Base Salary is \nmade pursuant to this Section 6.4. Further, the Company shall pay the \nExecutive all other benefits to which the Executive has a vested right at the \ntime, according to the provisions of each governing plan or program. The \nCompany and the Executive thereafter shall have no further obligations under \nthis Agreement after the effective date of termination, except as set forth in \nSections 7, 9 or 10 hereof.\n\n6.5  TERMINATION FOR CAUSE.  Nothing in this Agreement shall be construed to \nprevent the Board from terminating the Executive's employment under this \nAgreement for 'Cause.'\n\n'Cause' shall be determined by the Board in the exercise of good faith and \nreasonable judgment, and shall be defined as fraud, embezzlement, theft, or \nother criminal act constituting a felony under U.S. laws, or the failure of \nthe Executive to perform any material covenants under this Agreement, for \nreasons other than the Executive's death, Disability or Retirement.  In the \nevent this Agreement is terminated by the Board for Cause, the Company shall \npay the Executive his Base Salary through the effective date of the employment \ntermination and the Executive shall immediately thereafter forfeit all rights \nand benefits (other than vested benefits) he would otherwise have been \nentitled to receive under this Agreement, including any right to a Bonus for \nthe fiscal year in which the termination occurs.  The Company and the \nExecutive thereafter shall have no further obligations under this Agreement, \nexcept as set forth in Sections 9 or 10 hereof. \n\n6.6  TERMINATION FOR GOOD REASON.  At any time during the term of this \nAgreement, the Executive may terminate this Agreement for Good Reason (as \ndefined below) by giving the Board of Directors of the Company thirty (30) \ncalendar days written notice of intent to terminate, which notice sets forth \nin reasonable detail the facts and circumstances claimed to provide a basis \nfor such termination.  Upon the expiration of the thirty (30) day notice \nperiod, the Good Reason termination shall become effective, and the Company \nshall pay and provide to the Executive the benefits set forth in this \nSection 6.6 (plus in the event of termination for Good Reason during a Change \nof Control Period, any additional benefits required by Section 7.1 hereof). \n\nGood Reason shall mean, without the Executive's express written consent, the \noccurrence of any one or more of the following: \n\n(a)  The assignment of the Executive to duties materially inconsistent with \nthe Executive's authorities, duties, responsibilities and status (including \noffices, titles, and reporting requirements) as an officer of the Company, or \na reduction or alteration in the nature or status of the Executive's \nauthorities, duties, or responsibilities from those in effect during the \nimmediately preceding fiscal year, other than an insubstantial and inadvertent \nact that is remedied by the Company promptly after receipt of notice thereof \ngiven by the Executive; \n\n(b)  Without the Executive's consent, the Company's requiring the Executive to \nbe based at a location which is at least fifty (50) miles further from the \nExecutive's current primary residence than is such residence from the \nCompany's current headquarters, except for required travel on the Company's \nbusiness; \n\n(c)  A reduction by the Company in the Executive's Base Salary as in effect on \nthe Effective Date, as provided in Section 4.1 herein, or as the same shall be \nincreased from time to time;\n\n(d)  The failure of the Company to obtain a satisfactory agreement from any \nsuccessor to the Company to assume and agree to perform this Agreement, as \ncontemplated in Section 11.1 herein. \n\nUpon a termination of the Executive's employment for Good Reason at any time \nother than during a Change of Control Period, the Executive shall be entitled \nto receive the same payments and benefits as he is entitled to receive \nfollowing an involuntary termination of his employment by the Company without \nCause, as specified in Section 6.4 herein. The payment of Base Salary and pro \nrata Bonus shall be made to the Executive within thirty (30) calendar days \nfollowing the effective date of employment termination. Upon a termination for \nGood Reason during a Change of Control Period the Executive shall be entitled \nto receive the payments and benefits set forth in Section 7.1 herein in lieu \nof those set forth in this Section 6.6. \n\nThe Executive's right to terminate employment for Good Reason shall not be \naffected by the Executive's incapacity due to physical or mental illness. The \nExecutive's continued employment shall not constitute consent to, or a waiver \nof rights with respect to, any circumstance constituting Good Reason herein. \n\n6.7  NON-RENEWAL BY COMPANY.  Upon any termination of this Agreement as a \nresult of a notice of non-renewal by the Company pursuant to Section 1 hereof, \nupon the effective date of such termination, the Company shall pay to the \nExecutive a lump sum cash payment equal to twelve (12) full months Base Salary \nthen in effect and shall continue the Executive's health and welfare benefits \nfor twelve (12) full months.  If for any reason the Company is unable to \ncontinue health and welfare benefits as required by the preceding sentence, \nthe Company shall either provide equivalent benefits to the Executive or pay \nto the Executive a lump sum cash payment equal to the value of the benefits\n\n\n\n\nthe Company is unable to provide.  Continuation of health benefits under this \nSection 6.4 will count against, and will not extend, the period during which \nbenefits are required to be continued under COBRA.In addition, the Company \nshall pay the Executive's Bonus for the finalyear within sixty (60) days after \nthe effective date of the termination of this Agreement in accordance with the \nprovisions of Section 4.2 hereof.\n\n7.   CHANGE IN CONTROL.\n\n7.1  Employment Terminations in Connection with a Change in Control. In the \nevent of a Qualifying Termination (as defined below) during a Change of \nControl Period, the Company shall pay to the Executive and provide him with \nbenefits in lieu of the benefits which otherwise would have been payable under \nthis Agreement such that the total benefits payable to the Executive shall be \nas follows: \n\n(a)  A lump sum amount equal to three (3) times the highest rate of the \nExecutive's annualized Base Salary rate in effect at any time up to and \nincluding the effective date of termination; \n\n(b)  A lump sum amount equal to three (3) times the higher of the Executive's \nBonus for the last fiscal year prior to the Change in Control or the average \nannual Bonus paid to the Executive for the last three (3) fiscal years prior \nto the Change in Control;\n\n(c)  An amount equal to the Executive's unpaid Base Salary and pro rata Bonus \nthrough the effective date of termination, determined as provided in Section \n6.4; and (d)  A continuation of health and welfare benefits for three (3) full \nyears from the effective date of termination.  If for any reason the Company \nis unable to continue health and welfare benefits as required by the preceding \nsentence, the Company shall either provide equivalent benefits to the \nExecutive or pay to the Executive a lump sum cash payment equal to the value \nof the benefits which the Company is unable to provide.  Continuation of \nhealth benefits under this Section 6.4 will count against, and will not \nextend, the period during which benefits are required to be continued under \nCOBRA.  The continuation of these welfare benefits may be discontinued by the \nCompany prior to the end of the three (3) year period in the event the \nExecutive has available substantially similar benefits from a subsequent \nemployer, as determined by the Company's Board of Directors. \n\nFor purposes of this Section 7, a Qualifying Termination shall mean any \ntermination of the Executive's employment other than:(1) by the Company for \nCause; (2) by reason of death, Disability or Retirement; or (3) by the \nExecutive without Good Reason.  Payment of any lump sum amounts pursuant to \nthis Section 7.1 will be made within sixty (60) days after the effective date \nof the termination of the Executive's Employment\n\n7.2  DEFINITION OF 'CHANGE IN CONTROL'.  A Change in Control of the Company \nshall be deemed to have occurred as of the first day any one or more of the \nfollowing conditions shall have been satisfied: \n\n(a)  Any Person (as defined in Section 3(a)(9) of the Securities Exchange Act \nof 1934) (other than those Persons in control of the Company as of the \nEffective Date, and other than a trustee or other fiduciary holding securities \nunder an employee benefit plan of the Company, or a corporation owned directly \nor indirectly by the stockholders of the Company in substantially the same \nproportions as their ownership of stock of the Company), becomes the \nBeneficial Owner (as defined in Rule 13d-3 of the General Rules and \nRegulations under the Securities Exchange Act of 1934), directly or \nindirectly, of securities of the Company representing over thirty percent \n(30%) of the combined voting power of the Company's common stock then \noutstanding; or \n\n(b)  During any period of two (2) consecutive years (not including any period \nprior to the Effective Date), individuals who at the beginning of such period \nconstitute the Board of Directors (and any new Director, whose election was \napproved or recommended by a vote of at least two-thirds (2\/3) of the \nDirectors then still in office who either were Directors at the beginning of \nthe period or whose election or nomination for election was so approved), \ncease for any reason to constitute a majority thereof; or \n\n(c)  The stockholders of the Company approve: (i) a plan of complete \nliquidation of the Company; or (ii) an agreement for the sale or disposition \nof all or substantially all the Company's assets (except as provided in \n(iii)); or (iii) a merger, consolidation, share exchange or reorganization of \nthe Company with or involving any other corporation, other than a merger, \nconsolidation, share exchange or reorganization that would result in the \nowners of common stock having more than fifty percent (50%) of the combined \nvoting power of the common stock of the Company outstanding immediately prior \nthereto, continuing to have (either by such stock remaining outstanding or by \nbeing converted into common stock of another entity or entities), more than \nfifty percent (50%) of the combined voting power of the common stock which is \noutstanding immediately after such merger, consolidation, share exchange or \nreorganization. \n\n\n\n\nHowever, in no event shall a Change in Control be deemed to have occurred, \nwith respect to the Executive, if the Executive is part of a purchasing group \nwhich consummates the Change in Control transaction. The Executive shall be \ndeemed 'part of a purchasing group' for purposes of the preceding sentence if \nthe Executive is an equity participant in the purchasing company or group \n(except for: (i) passive ownership of less than two percent (2%) of the stock \nof the purchasing company; or (ii) ownership of equity participation in the \npurchasing company or group which is otherwise not significant, as determined \nprior to the Change in Control by a majority of the nonemployee continuing \nDirectors).\n\n7.3  CHANGE OF CONTROL PERIOD.  'Change in Control Period' shall mean the \nperiod of time commencing with the date on which the Company becomes aware of \nthe Change in Control or becomes aware of a proposed transaction which \nreasonably could be expected to result in a change in control and ending on \nthe first to occur of  two (2) years after the effective date of the Change in \nControl or the date on which the proposed transaction no longer is reasonably \nexpected to occur.\n\n7.4  LIMITATION ON CHANGE IN CONTROL BENEFITS.  In the event that any of the \namounts payable to the Executive by the Company pursuant to the provisions of \nSection 7.1 of this Agreement or otherwise would, if made, be nondeductible \nfor Federal income tax purposes under Section 280G of the Internal Revenue \nCode of 1986, as amended (after application of Section 280G(b)(4)), the amount \npayable by the Company shall be reduced by the minimum amount necessary to \ncause the Executive to receive no payments which would be nondeductible by the \nCompany for Federal income tax purposes under Section 280G of the Code.  For \npurposes of determining whether or not payments under Section 7.1 or otherwise \nwould in fact be nondeductible to the Company under Code Section 280G, the \nfollowing principles and guidelines are agreed to, and, absent contrary mutual \nagreement, shall be followed:  (i) all payments under or in respect of \nsupplemental retirement plans, and stock option, bonus and other incentive \ncompensation plans are intended to represent reasonable compensation for \npersonal services performed by the Executive through the date of termination \nof the Executive's employment, (ii) if there is an issue as to whether any \npayments being made to the Executive constitute 'parachute payments' under \nSection 280G of the Code,and the Company and the Executive cannot agree upon \nthe amount thereof within thirty (30) days after the effective date of the \ntermination of the Executive's employment, the Executive and the Company \nshall, within forty-five (45) days after the effective date of the termination \nof Executive's employment, mutually agree upon and appoint a third party \narbitrator who shall analyze the issue giving recognition to the foregoing \nintentions and shall issue a report within thirty (30) days of the appointment \nstating the arbitrator's best estimate of the amount of 'parachute payments' \nunder Code Section 280G, if any, and the report of such arbitrator shall be \nconclusive and binding on the parties,(iii) the third party arbitrator \nselected shall be a nationally recognized accounting firm or a management \nconsulting firm specializing in the area of executive compensation, who shall \nbe entitled to engage independent legal counsel for advice with respect to \nlegal matters in connection with the report, (iv) if the parties cannot agree \nupon a third party arbitrator within the specified forty-five (45) day time \nperiod, an arbitrator shall be selected and appointed by the Chief Judge of \nthe United States District Court for the District of Maryland and (v) the \ncosts and expenses of the arbitrator, including counsel's fees, shall be borne \nby the Company.The Executive and the Company agree that each will in all cases \nfile tax returns on a basis consistent with any conclusions reached with \nrespect to the deductibility of amounts under Code Section 280G, and will \ndefend such position to the extent practicable in the event a contrary \nposition is taken by the Internal Revenue Service.  The Executive shall be \nentitled to reimbursement of counsel fees in connection with any such defense \nas provided in Section 12.1 hereof.\n\nIn the event of any reduction of payments made or to be made to the Executive \npursuant to Section 7.1 or otherwise as a result of this Section 7.4, the \nExecutive shall be entitled to select the amount and form of compensation to \nbe reduced or eliminated.\n\n7.5  SUBSEQUENT IMPOSITION OF EXCISE TAX.  If, notwithstanding compliance with \nthe provisions of Section 7.4 herein, it is ultimately determined by a court \nor pursuant to a final determination by the Internal Revenue Service that any \nportion of the payments to the Executive is considered to be an 'excess \nparachute payment,' subject to the excise tax under Section 4999 of the Code, \nwhich was not contemplated to be an 'excess parachute payment' at the time of \npayment (so as to accurately determine whether a limitation should have been \napplied to the payments to maximize the net benefit to the Executive, as \nprovided in Section 7.4 hereof), the Executive shall be entitled to receive a \nlump sum cash payment sufficient to place the Executive in the same net after-\ntax position, computed by using the 'Special Tax Rate' as such term is defined \nbelow, that the Executive would have been in had such payment not been subject \nto such excise tax, and had the Executive not incurred any interest charges or \npenalties with respect to the imposition of such excise tax. For purposes of \nthis Agreement, the 'Special Tax Rate' shall be the highest effective Federal \nand state marginal tax rates applicable to the Executive in the year in which \nthe payment contemplated under this Section 7.5 is  made. \n\n8.   Outplacement Assistance.  Following a Qualifying Termination (as defined \nin Section 7.1 herein) the Executive shall be reimbursed by the Company for \nthe costs of all outplacement services obtained by the Executive within the \ntwo (2) year period after the effective date of termination; provided, \nhowever, that the total reimbursement shall be limited to an amount equal to \nfifteen percent (15%) of the Executive's Base Salary as of the effective date \nof termination. \n\n\n\n\n9.  NONCOMPETITION\n\n9.1  PROHIBITION ON COMPETITION.  Without the prior written consent of the \nCompany, during the term of this Agreement, and for twenty-four (24) months \nfollowing termination of this Agreement by the Company for Cause or expiration \nor termination of this Agreement as a result of notice of the Executive to the \nCompany pursuant to Section 1 or Section 6.3 hereof (the 'Restrictive Period') \nof this Agreement, the Executive shall not, as a stockholder, partner, \nemployee or an officer, engage directly or indirectly in any business or \nenterprise which is 'in competition' with the Company or its successors or \nassigns. For purposes of this Agreement, a business or enterprise will be \ndeemed to be 'in competition' if it is engaged in any significant business \nactivity of the Company or its subsidiaries within the continental United \nStates. \n\nHowever, the Executive shall be allowed to purchase and hold for investment \nless than two percent (2%) of the shares of any corporation whose shares are \nregularly traded on a national securities exchange or in the over-the-counter \nmarket. \n\n9.2  DISCLOSURE OF INFORMATION.  The Executive recognizes that he has access \nto and knowledge of certain confidential and proprietary information of the \nCompany which is essential to the performance of his duties under this \nAgreement. The Executive will not, during or after the term of his employment \nby the Company, in whole or in part, disclose such information to any person, \nfirm, corporation, association, or other entity for any reason or purpose \nwhatsoever, nor shall he make use of any such information for his own \npurposes. \n\n9.3  COVENANTS REGARDING OTHER EMPLOYEES.  During the term of this Agreement, \nand during the Restrictive Period, the Executive agrees not to attempt to \ninduce any employee of the Company to terminate his or her employment with the \nCompany, accept employment with any competitor of the Company, or to interfere \nin a similar manner with the business of the Company. \n\n9.4  SPECIFIC PERFORMANCE.  The parties recognize that the Company will have \nno adequate remedy at law for breach by the Executive of the requirements of \nthis Section 9 and, in the event of such breach, the Company and the Executive \nhereby agree that, in addition to the right to seek monetary damages, the \nCompany will be entitled to a decree of specific performance, mandamus, or \nother appropriate remedy to enforce performance of such requirements. \n\n10.  INDEMNIFICATION.  The Company hereby covenants and agrees to indemnify \nand hold harmless the Executive fully, completely, and absolutely against and \nin respect to any and all actions, suits, proceedings, claims, demands, \njudgments, costs, expenses (including attorney's fees), losses, and damages \nresulting from the Executive's good faith performance of his duties and \nobligations under the terms of this agreement, subject to compliance with any \napplicable requirements and limitations improved by the Company's Articles of \nIncorporation and By-Laws as in effect on the date hereof and applicable law.\n\n\nSECTION II.  ASSIGNMENT\n\n11.1 ASSIGNMENT BY COMPANY.  This Agreement may and shall be assigned or \ntransferred to, and shall be binding upon and shall inure to the benefit of, \nany successor of the Company, and any such successor shall be deemed \nsubstituted for all purposes of the 'Company' under the terms of this \nAgreement. As used in this Agreement, the term 'successor' shall mean any \nperson, firm, corporation, or business entity which at any time, whether by \nmerger, purchase, or otherwise,acquires all or substantially all of the assets \nor the business of the Company. Notwithstanding such assignment, the Company \nshall remain, with such successor, jointly and severally liable for all its \nobligations hereunder. \n\nFailure of the Company to obtain the agreement of any successor to be bound by \nthe terms of this Agreement prior to the effectiveness of any such succession \nshall be a breach of this Agreement, and shall immediately entitle the \nExecutive to compensation from the Company in the same amount and on the same \nterms as the Executive would be entitled in the event of a termination of \nemployment for Good Reason during a Change in Control Period, as provided in \nSection 7 herein.Except as herein provided, this Agreement may not otherwise \nbe assigned by the Company. \n\n11.2 ASSIGNMENT BY EXECUTIVE.  The services to be provided by the Executive to \nthe Company hereunder are personal to the Executive, and the Executive's \nduties may not be assigned by the Executive; provided, however that this \nAgreement shall inure to the benefit of and be enforceable by the Executive's \npersonal or legal representatives, executors, and administrators, successors, \nheirs, distributees, devisees, and legatees. If the Executive dies while any \namounts payable to the Executive hereunder remain outstanding, all such \namounts, unless otherwise provided herein, shall be paid in accordance with \nthe terms of this Agreement to the Executive's devisee, legatee, or other \ndesignee or, in the absence of such designee, to the Executive's  estate. \n\n\n\n\n\n12.  DISPUTE RESOLUTION AND NOTICE.\n\n12.1 Dispute Resolution.  Either the Executive or the Company may elect to \nhave any good faith dispute or controversy arising under or in connection with \nthis Agreement settled by arbitration, by providing written notice of such \nelection to the other party hereto, specifying the nature of the dispute to be \narbitrated, provided that if the other party objects to the use of arbitration \nwithin thirty (30) days of the receipt of such notice, the dispute may only be \nsettled by litigation unless otherwise agreed.\n\nIf arbitration is selected, such proceeding shall be conducted before a panel \nof three (3) arbitrators sitting in a location agreed to by the Company and \nthe Executive within fifty (50) miles from the location of the Executive's \nprincipal place of employment, in accordance with the rules of the American \nArbitration Association\/then in effect. Judgment may be entered on the award \nof the arbitrators in any court having competent jurisdiction.To the extent \nthat the Executive prevails in any litigation or arbitration seeking to \nenforce the provisions of this Agreement, the Executive shall be entitled to \nreimbursement by the Company of all expenses of such litigation or \narbitration, including the reasonabl fees and expenses of the legal \nrepresentative for the Executive, and necessary costs and disbursements \nincurred as a result of such dispute or legal proceeding, .\n\n12.2 NOTICE.  Any notices, requests, demands, or other communications provided \nfor by this Agreement shall be sufficient if in writing and if sent by \nregistered or certified mail to the Executive at the last address he has filed \nin writing with the Company or, in the case of the Company, at its principal \noffices. \n\n13.  MISCELLANEOUS\n\n13.1 ENTIRE AGREEMENT.  This Agreement supersedes any prior agreements or \nunderstandings, oral or written, between the parties hereto, or between the \nExecutive and the Company, with respect to the subject matter hereof, and \nconstitutes the entire agreement of the parties with respect thereto. \n\n13.2 MODIFICATION.  This Agreement shall not be varied, altered, modified, \ncanceled, changed, or in any way amended except by mutual agreement of the \nparties in a written instrument executed by the parties hereto or their legal \nrepresentatives. \n\n13.3 SEVERABILITY.  In the event that any provision or portion of this \nAgreement shall be determined to be invalid or unenforceable for any reason, \nthe remaining provisions of this Agreement shall be unaffected thereby and \nshall remain in full force and effect. \n\n13.4 TAX WITHHOLDING.  The Company may withhold from any benefits payable \nunder this Agreement all Federal, state, city, or other taxes as may be \nrequired pursuant to any law or governmental regulation or ruling. \n\n13.5 BENEFICIARIES.  The Executive may designate one or more persons or \nentities as the primary and\/or contingent beneficiaries of any amounts to be \nreceived under this Agreement. Such designation must be in the form of a \nsigned writing acceptable to the Board or the Board's designee. The Executive \nmay make or change such designation at any time. \n\n13.6 BOARD COMMITTEE.  Any action to be taken, or determination to be made, by \nthe Board of Directors under this Agreement may be taken or made by the \nCompensation Committee or any other Committee authorized by the Board of \nDirectors to act on its behalf.\n\n13.7 GOVERNING LAW.  To the extent not preempted by Federal law, the \nprovisions of this Agreement shall be construed and enforced in accordance \nwith the laws of the State of Maryland. \n\n\nIN WITNESS WHEREOF, the Executive and the Company have executed this Agreement \nas of the date first above written. \n\nThe Ryland Group, Inc.                            Executive:\n\n\nBy:                                          \\s\\ R.Chad Dreier\n       --------------------                  --------------------              \n                                             R. Chad Dreier\n\nAttest:--------------------\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8733],"corporate_contracts_industries":[9480],"corporate_contracts_types":[9539,9544],"class_list":["post-39641","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-ryland-group","corporate_contracts_industries-construction__contractors","corporate_contracts_types-compensation","corporate_contracts_types-compensation__employment"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/39641","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=39641"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=39641"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=39641"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=39641"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}