EMPLOYMENT AGREEMENT
AGREEMENT, dated as of October 1, 1997, by and between M.D.C.
Holdings, Inc. (the "Company"), and Xxxxx X. Xxxxx (the "Executive").
WHEREAS, the Executive has served the Company in various capacities
for over twenty-five years;
WHEREAS, the Company desires to assure itself of the services of the
Executive for the period provided in this Agreement; and
WHEREAS, the Executive is willing to serve in the employ of the
Company for such period upon the terms and conditions hereinafter provided;
NOW, THEREFORE, in consideration of Executive's past, present and
future performance of services for the Company and in consideration of the
mutual promises and agreements hereinafter set forth, the Company and the
Executive agree as follows:
1. EMPLOYMENT AND DUTIES. The Company shall employ the Executive,
and the Executive shall be employed by the Company, as Chairman of the Board,
President and Chief Executive Officer, at the Company's headquarters in Denver,
Colorado (or such other location as the Executive and Company may agree) for the
term of this Agreement. In this capacity, the Executive shall perform such
services, consistent with his office, as from time to time shall be assigned to
him by the Board of Directors of the Company, devoting such time and effort to
manage, operate and direct the activities of the Company and perform all of the
functions of the offices held by him, as directed by the Board of Directors from
time-to-time; provided however that the Executive may also engage in other
activities (except activities which are in direct conflict with the business of
the Company) consistent with his prior practices while employed by the Company,
so long as such activities do not adversely affect the performance by the
Executive of his duties and responsibilities hereunder.
2. TERM. The term of the Executive's employment hereunder shall
begin on October 1, 1997 and shall continue through September 30, 2002 (the
"Initial Term"); provided, however, that the term of employment shall be
automatically extended beyond the Initial Term for successive two-year periods
(each, an "Additional Term") unless the Company or the Executive shall give
written notice to the other party hereto of its or his intent to terminate this
Agreement at the end of the then current Term, such notice to be given at least
six months prior to the expiration of the Initial Term or any extension thereof
(the Initial Term and any and all Additional Terms are hereinafter collectively
referred to as the "Employment Term").
3. COMPENSATION AND BENEFITS.
(a) BASE SALARY. During each calendar year of the Employment
Term, the Company shall pay the Executive a base salary at a rate of not less
than $600,000 per year
(the "Base Salary"), payable in substantially equal semi-monthly installments.
Not less frequently than annually, Executive will be eligible for periodic
increases in Base Salary under the Company's normal policies and procedures for
executive salary increases which currently provide for annual reviews of
executive salaries. Executive's Base Salary for any year may not be reduced
below the Executive's Base Salary for the prior year without the consent of both
Executive and the Company; provided, however, that in the event that the base
salaries of all Senior Executive Officers of the Company (as hereinafter
defined) are reduced below their base salaries for the current or prior year,
the Executive's Base Salary shall be proportionately reduced without his
consent. For purposes of this Agreement, the "Senior Executive Officers" of the
Company shall be the ten officers of the Company having the highest annual base
salaries.
(b) ANNUAL INCENTIVE COMPENSATION. For calendar year 1997 and
the remainder of the Employment Term, Executive will participate in the
Company's Executive Officer Performance Based Compensation Plan as it may be
amended, and any successor or supplementary incentive compensation plans
established by the Company (the "Performance Plans") and shall be entitled to
incentive payments as provided thereunder and as otherwise provided by the
Company. The payments the Executive is entitled to receive under the
Performance Plans and this Section 3(b) shall be referred to herein as the
"Annual Incentive Compensation" for the year to which they are attributable,
regardless of the year in which they are paid.
(c) LONG-TERM INCENTIVE COMPENSATION. The Executive shall
participate in the Company's Employee Equity Incentive Plan, as it may be
amended, and any successor or supplementary compensation and incentive plans or
programs established by the Company (the "Equity Plans").
(d) RETIREMENT BENEFIT. The Company shall pay the Executive a
retirement benefit ("Retirement Benefit") as hereinafter defined in
consideration of the Executive's past, present and future services to the
Company. Except as otherwise expressly provided in Section 4, the Retirement
Benefit shall be paid in monthly installments commencing on the first day of the
month following the last day of the Employment Term (the "Commencement Date")
and shall continue for the duration of Executive's lifetime. The monthly
installments shall be based upon an annual amount determined as follows: the
Retirement Benefit for each year shall be equal to seventy percent (70%) of the
Executive's highest Base Salary during the final three (3) years of the
Employment Term. Notwithstanding the preceding or any other provision of this
Agreement to the contrary, the Retirement Benefit shall be payable only if the
Executive continues to be employed hereunder through September 30, 1999 or if
the Executive's employment is terminated hereunder on or prior to September 30,
1999 due to (1) the Executive's election to terminate his employment pursuant to
Section 4(d)(ii) hereof, (2) the Executive's death or his becoming Totally
Disabled (as defined in Section 4(a)(i) hereof) or (3) a termination by the
Company without Cause (as defined in Section 4(b) hereof).
(e) MEDICAL INSURANCE BENEFITS. During the Employment Term and
for the duration of Executive's lifetime after the Commencement Date, the date
Executive becomes Totally Disabled, the date of Executive's termination without
Cause or Executive's election to
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terminate his employment pursuant to Section 4(d)(ii) hereof, as the case may
be, the Company shall pay for and make available medical insurance coverage for
Executive for the duration of Executive's life. The medical insurance coverage
shall provide coverage and benefits that are at least comparable to that
provided to actively employed Senior Executive Officers of the Company. After
the Executive is eligible for Medicare and the Company becomes a secondary payor
(or its equivalent) pursuant to Medicare or other applicable law, the Company
shall provide and pay for secondary medical insurance coverage so that the
combined primary and secondary coverage is equivalent to that provided to
actively employed Senior Executive Officers of the Company. In addition such
medical insurance shall provide comparable coverage for: (i) Executive's spouse
for the duration of Executive's life and if she survives him for an additional
twenty-four months after Executive's death; and (ii) each of Executive's
children until such child is no longer a "dependent" of the Executive, as
defined in Section 152 of the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code"); provided, however, that the medical coverage under
this Section 3(e) for the Executive's spouse and children shall in no event
extend beyond five years after the commencement of the Executive's Retirement
Benefit.
(f) EXPENSE REIMBURSEMENT. The Company promptly shall pay, or
reimburse the Executive for, all ordinary and necessary business expenses
incurred by him in the performance of his duties hereunder including, but not
limited to, expenses and dues associated with Executive's involvement with
professional, industry, community, civic and charitable organizations, provided
that the Executive properly accounts for all such expenses in accordance with
Company policy.
(g) M.D.C. EXECUTIVE OPTION PURCHASE PROGRAM. From time to
time, Executive may borrow, and the Company shall lend to Executive on the terms
provided pursuant to the M.D.C. Holdings, Inc. Executive Option Purchase
Program, up to an aggregate of $1,000,000 for the purpose of (i) exercising
options to purchase the Company's stock, and (ii) payment of any taxes payable
by Executive arising from the exercise of such options. The Executive Option
Purchase Program shall be extended beyond the expiration of the Employment Term,
if necessary, to permit Executive to borrow funds for the purpose of exercising
any unexpired options and paying taxes arising from the exercise of such
options.
(h) OTHER BENEFITS PLANS, FRINGE BENEFITS AND VACATIONS. The
Executive shall be eligible to participate in each of the Company's present
employee benefit plans, policies or arrangements and any such plans, policies or
arrangements that the Company may maintain or establish during the Employment
Term and receive all fringe benefits and vacations for which his position makes
him eligible in accordance with the Company's policies and the terms and
provisions of such plans, policies or arrangements including, but not limited
to, the following:
(i) The Company shall provide the Executive with a car
allowance of $1,000 per month.
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(ii) The Company shall reimburse the Executive up to
$10,000 per year for the expenses associated with the Executive's financial
planning and/or tax preparation services provided by independent outside
advisors or accountants.
(iii) The Company shall reimburse Executive for monthly
dues and assessments paid by Executive for one (1) golf or country club
designated by Executive, it being understood that Executive owns such
membership. Direct expenses associated with business functions at such club
will be reimbursed in accordance with the Company's standard procedures.
(iv) The Company shall reimburse Executive for physical
examinations to be conducted by a qualified medical physician of Executive's
choice, to a maximum amount of $3,000 annually.
(v) The Company shall provide to the Executive (whether
through insurance or otherwise) long-term disability benefits in an amount such
that the after-tax amount per year received by the Executive shall be equal to
the after-tax amount of the Executive's Base Salary in effect for the year in
which the Executive becomes disabled. Such disability benefit shall be payable
monthly, until the earlier of (1) the end of the Executive's disability or (2)
the Commencement Date of the Executive's Retirement Benefit.
(vi) The Company shall, to the fullest extent permitted by
Section 145 of the General Corporation Law of the State of Delaware, as the same
may be amended and supplemented, or by any successor thereto, indemnify the
Executive from and against any and all of the expenses, liabilities or other
matters referred to in or covered by said Section. The Company shall advance
expenses to the fullest extent permitted by said Section. The Company shall
cover the Executive under such insurance policies as the Company may procure for
executive liability and indemnification insurance, to the same extent and
providing limits of liability, deductibles and exclusions as may be provided for
the Company's Senior Executive Officers and outside directors. These covenants
shall survive termination of this Agreement for any reason for a period of five
years from the date of such termination.
(vii) Each calendar year during the Employment Term, but
without carryover from year to year (regardless of the Company's general
vacation policy), Executive shall be entitled to vacation of not less than six
weeks.
The Company shall not terminate or change, in such a way as
to affect adversely the Executive's rights or reduce his benefits under any
Company benefit plan, policy or arrangement now in effect or which may hereafter
be established and in which the Executive is eligible to participate, including,
without limitation, the Executive Officer Performance Based Compensation Plan,
the Company's Equity Plans, the Retirement Benefit, life insurance, medical and
disability plans, unless such plan, policy or arrangement is similarly
terminated or changed with respect to all of the Company's other Senior
Executive Officers who are covered under such plan, policy or arrangement or who
have a similar plan, policy or arrangement with the Company; provided, however,
that the Company may not in any event reduce or terminate the Retirement Benefit
or change the Retirement Benefit in such a way as to adversely affect the
Executive's rights.
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4. TERMINATION.
(a) DEATH AND DISABILITY.
(i) The Executive's employment hereunder and the
Employment Term shall terminate upon his death or upon his becoming Totally
Disabled. For purposes of this Agreement, the Executive shall be "Totally
Disabled" if he is physically or mentally incapacitated so as to render him
incapable of performing his usual and customary duties as an executive for more
than 150 consecutive days. The Executive's receipt of Social Security
disability benefits shall be deemed conclusive evidence of Total Disability for
purposes of this Agreement; provided, however, that in the absence of his
receipt of such Social Security benefits, the Board of Directors of the Company
may, in its reasonable discretion, but based upon appropriate medical evidence,
determine that the Executive is Totally Disabled.
(ii) In the event of the Executive's death (while Totally
Disabled or otherwise) after his Retirement Benefit has commenced to be paid,
the Company shall continue to pay such Retirement Benefit to his Beneficiary
until five years after such commencement. If the Executive's Retirement Benefit
pursuant to Section 3(d) hereof has not commenced to be paid on the date of his
death, such benefit shall commence to be paid to his Beneficiary on the first
day of the month next following his date of death, as if such payments had
commenced at his Commencement Date and shall continue for five years after his
date of death. For purposes of this Agreement, the Executive's "Beneficiary"
shall be deemed to be his spouse; if his spouse predeceases him (or if he is not
married at the time of his death), his Beneficiary shall be deemed to be his
estate.
(iii) If Executive dies or becomes Totally Disabled
during the Employment Term, the Executive or his estate, as the case may be,
shall be entitled to receive all benefits earned under the Performance Plans
and Equity Plans as and for so long as provided in such plans.
(b) FOR CAUSE. The Executive's employment hereunder may be
terminated for Cause. For purposes of this Agreement, the term "Cause" shall
mean: (i) the Executive's willful refusal to perform material duties reasonably
required or requested of him hereunder (other than as a result of total or
partial incapacity due to physical or mental illness) by the Board of Directors
for 30 days after having received written notice of such refusal from the Board
of Directors and having failed to commence to perform such duties within such
period, (ii) the Executive's commission of material acts of fraud, dishonesty or
misrepresentation in the performance of his duties hereunder, (iii) any final,
non-appealable conviction of Executive for an act or acts on the Executive's
part constituting a felony under the laws of the United States or any state
thereof which results or was intended to result directly or indirectly in gain
or personal enrichment by Executive at the expense of the Company, or (iv) any
material uncured breach of the provisions of Sections 5(a) and 5(b) hereof which
continues for 30 days after the Executive has received written notice of such
breach. If the Executive's employment is terminated for Cause, Executive shall
be entitled only to the amount of his Base Salary earned through the date
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of termination, and shall not be entitled to any other amounts or benefits
hereunder, including, but not limited to, his Retirement Benefit, incentive
compensation, or medical insurance.
(c) WITHOUT CAUSE. If the Executive's employment hereunder is
terminated without Cause (which shall include, without limitation, the Company's
election not to renew this Agreement pursuant to Section 2 hereof, the Company's
termination of the Performance Plans or the Company's amendment of the
Performance Plans to provide for payments to Executive in any calendar year
which are less than the amount calculated in accordance with Article III of the
Executive Officer Performance Plan adopted by the Company's shareholders on June
24, 1994, unless such termination or amendment similarly applies to all Senior
Executive Officers of the Company) as soon as practicable (but not later than 30
days) after such termination, he shall receive a lump sum cash payment equal to
the sum of: (i) if such termination occurs during the Employment Term, an
amount equal to the aggregate Base Salary earned by him during the three years
prior to such termination; and (ii) if such termination occurs during the
Employment Term, an amount equal to one hundred percent (100%) of the Annual
Incentive Compensation which the Executive was paid pursuant to Section 3(b)
hereof for the year prior to that in which such termination occurs. In
addition, the Company shall pay Executive the Retirement Benefit payable in
accordance with Section 3(d), commencing on the date of termination and the
vesting of all options, dividend equivalents and other rights granted to
Executive under the Equity Incentive Plans and any other Company plans shall be
accelerated so as to permit Executive fully to exercise all outstanding options
and rights, if any, granted to Executive during the Employment Term pursuant to
such plans. The Company shall also provide Executive and his spouse and
dependents the medical insurance benefits described in Section 3(c).
(d) CHANGE IN CONTROL.
(i) If a Change in Control Event (as defined in Appendix A
hereto) occurs, all options, dividend equivalents and other rights granted to
Executive under the Equity Incentive Plans and any other Company plans shall be
accelerated and shall become exercisable immediately prior to the occurrence of
the transaction giving rise to the Change in Control Event at Executive's
election, so as to permit Executive fully to exercise all outstanding options
and rights. In the event that such transaction fails to be consummated,
Executive's election pursuant hereto shall be of no effect and Executive's
options shall remain subject to the restrictions to which they were originally
subject.
(ii) If a Change in Control Event or a Material Change (as
defined in Appendix A hereto) occurs, the Executive shall, if he so elects by
written notice to the Company within two years after such Change in Control
Event or Material Change, be entitled to terminate his employment, if not
already terminated by the Company. In the event of either the Executive's
election hereunder to terminate his employment due to such Change in Control
Event or Material Change, or a termination of employment by the Company without
Cause upon or within two years following a Change in Control Event, then (A) the
Executive shall receive the amounts set forth in Section 4(c) above, and in
either case, as if the Company had terminated his employment without Cause; (B)
the Executive shall be entitled to the accelerated vesting of all
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options and rights as provided in paragraph 4(d)(i) above and, at Executive's
election, in the event the Change in Control Event involves a two-tier tender
offer, the Company will pay Executive the difference between the exercise
price of the otherwise unvested options and the price offered in the first
tier, or adjust the option terms to provide Executive new options with an
equivalent value; and (C) with respect to the Retirement Benefit, either (1)
the Company shall establish an irrevocable grantor trust (hereinafter
referred to as the "Rabbi Trust"), in conformance with the model trust set
forth in IRS Revenue Procedure 92-64, with a national bank serving as
trustee, and shall contribute to the Rabbi Trust an amount equal to the
actuarial present value (determined on the basis of the applicable mortality
table and applicable interest rate as specified in Section 417(e)(3) of the
Internal Revenue Code as of the effective date of the Executive's termination
date) of the Retirement Benefit payments payable to the Executive under
Section 3(d), commencing on his termination date, or (2) the Company shall,
if it so elects, pay to the Executive, in a lump sum cash payment, the amount
that otherwise would be required to be contributed to the Rabbi Trust, and
any such lump sum cash payment to the Executive shall be in complete
discharge of the Company's obligation with respect to the Executive's
Retirement Benefit. Such contribution to the Rabbi Trust or such lump sum
cash payment to the Executive, as the case may be, shall be made within 30
days after the Executive's election hereunder to terminate his employment or his
termination by the Company without Cause. If the Rabbi Trust is established,
all fees and expenses of the trustee of the Rabbi Trust, and any and all taxes
incurred on the income of the Rabbi Trust's assets, shall be paid by the
Company and shall not be charged against or paid by the Rabbi Trust.
(iii) Notwithstanding anything to the contrary herein, if
the aggregate amounts payable pursuant to subparagraph (ii) of this paragraph
(d), either alone or together with any other payments which the Executive has
the right to receive either directly or indirectly from the Company or any of
its affiliates, would be subject to an excise tax as an "excess parachute
payment" under Section 4999 of the Internal Revenue Code, the Executive hereby
agrees that such aggregate amounts payable hereunder shall be paid in annual
installments over the shortest period of time over which such aggregate amounts
may be paid and not be treated as "excess parachute payments" under Section
4999. All determinations called for in this subparagraph (iii) shall be made
by Price Waterhouse, L.L.P. or such other independent public accounting firm
with a national reputation as shall be selected by the Company. The Company
shall bear all costs associated with obtaining such determinations.
5. COVENANTS.
(a) CONFIDENTIALITY. The Executive agrees that, during or at
any time after the Employment Term, he shall not divulge, furnish or make
accessible to any person, corporation, partnership, trust or other organization
or entity, any information, trade secrets, technical data or know-how relating
to the business, business practices, methods, attorney-client communications,
pending or contemplated acquisitions or other transactions, products, processes,
equipment or any confidential or secret aspect of the business of the Company
without the prior written consent of the Company, unless such information shall
have become public knowledge or shall have become known generally to competitors
of the Company through sources other than the Executive.
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(b) COMPETITIVE ACTIVITY. Until the end of the Employment Term,
and for a period of eighteen months beginning on (1) the last day of the
Employment Term or (2) a termination of the Executive's employment by the
Company for Cause, the Executive shall not, without the written consent of the
Board of Directors of the Company, directly or indirectly, knowingly engage or
be interested in (as owner, partner, shareholder, employee, director, officer,
agent, consultant or otherwise), with or without compensation, any business
whose principal activities are in competition with any substantial line of
business actively being conducted by the Company during the Employment Term and
such eighteen month period. Nothing herein, however, shall prohibit the
Executive from acquiring or holding not more than ten percent (10%) of any class
of publicly-traded securities of any such business.
(c) REMEDY FOR BREACH. The Executive acknowledges that the
provisions of this Section 5 are reasonable and necessary for the protection of
the Company and that the Company will be irrevocably damaged if such covenants
are not specifically enforced. Accordingly, the Executive agrees that, in
addition to any other relief to which the Company may be entitled, the Company
shall be entitled to seek and obtain injunctive relief (without the requirement
of any bond) from a court of competent jurisdiction for the purposes of
restraining the Executive from any actual or threatened breach of such
covenants.
6. MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
agreements made and to be performed in that State.
(b) NOTICES. Any notice, consent or other communication made or
given in connection with this Agreement shall be in writing and shall be deemed
to have been duly given when delivered by United States registered or certified
mail, return receipt requested, to the parties at the following addresses or at
such other address as a party may specify by notice to the other.
TO THE EXECUTIVE:
Xxxxx X. Xxxxx
c/o M.D.C. Holdings, Inc.
0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
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with a copy to
Xxxxx X. Xxxxx
0 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
TO THE COMPANY:
M.D.C. Holdings, Inc.
0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxx, General Counsel
(c) ENTIRE AGREEMENT; AMENDMENT. This Agreement shall supersede
any and all existing agreements between the Executive and the Company or any of
its affiliates or subsidiaries relating to the terms of his employment. It may
not be amended except by a written agreement signed by both parties.
(d) WAIVER. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver thereof or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.
(e) ASSIGNMENT. Except as otherwise provided in this paragraph,
this Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective heirs, representatives, successors and assigns.
This Agreement shall not be assignable by the Executive, and shall be assignable
by the Company only to any corporation or other entity resulting from the
reorganization, merger or consolidation of the Company with any other
corporation or entity or any corporation or entity to which the Company may sell
all or substantially all of its assets, and it must be so assigned by the
Company to, and accepted as binding upon it, by such other corporation or entity
in connection with any such reorganization, merger, consolidation or sale.
(f) LITIGATION COSTS. In the event that the Executive shall
successfully prosecute a proceeding to enforce any provision of this Agreement,
in addition to any other relief awarded the Executive in such action, the
parties agree that the decision rendered shall award the Executive all of his
attorneys' fees, disbursements and other costs incurred by the Executive in
prosecuting such case.
(g) SEVERABILITY. If any provision of this Agreement is invalid
or unenforceable, the balance of the Agreement shall remain in effect, and if
any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement,
including Appendix A hereto, as evidence of their adoption this 21st day of
October, 1997.
M.D.C. HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxx XX
-----------------------------------
Name: Xxxxx X. Xxxxx XX
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Title: Senior Vice President
---------------------------------
EXECUTIVE
/s/ Xxxxx X. Xxxxx
---------------------------------------
Name: Xxxxx X. Xxxxx
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APPENDIX A
This Appendix A is attached to and shall form a part of the Employment
Agreement (the "Agreement"), dated as of October 1, 1997, by and between M.D.C.
HOLDINGS, INC. (the "Company"), and XXXXX X. XXXXX (the "Executive").
(a) For purposes of the Agreement, a "Change in Control Event" shall occur
if:
(i) a report on Schedule 13D is filed with the Securities and
Exchange Commission pursuant to Section 13(d) of the Securities Exchange Act of
1934 (the "Exchange Act") disclosing that any person (within the meaning of
Section 13(d) of the Exchange Act), other than the Company (or one of its
subsidiaries) or any employee benefit plan sponsored by the Company (or one of
its subsidiaries), or any director of the Company as of the date of the
Agreement or affiliate of such director, is the beneficial owner, directly or
indirectly, of twenty percent (20%) or more of the combined voting power of the
then-outstanding securities of the Company;
(ii) any person (within the meaning of Section 13(d) of the Exchange
Act), other than the Company (or one of its subsidiaries) or any employee
benefit plan sponsored by the Company (or one of its subsidiaries), or any
director of the Company as of the date of the Agreement or affiliate of such
director, shall purchase securities pursuant to a tender offer or exchange offer
to acquire any common stock of the Company (or securities convertible into
common stock) for cash, securities or any other consideration, provided that
after consummation of the offer, the person in question is the beneficial owner
(as such term is defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of twenty percent (20%) or more of the combined voting power of the
then outstanding securities of the Company (as determined under paragraph (d) of
Rule 13d-3 under the Exchange Act, in the case of rights to acquire common
stock);
(iii) the stockholders of the Company shall approve: (A) any
consolidation or merger of the Company (1) in which the Company is not the
continuing or surviving corporation; or (2) pursuant to which shares of common
stock of the Company would be converted into cash, securities or other property;
or: (B) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all the assets of the
Company; or
(iv) there shall have been a change in a majority of the members of
the Board of Directors of the Company within a twelve month period, unless the
election or nomination for election by the Company's stockholders of each new
director during such twelve month period was approved by the vote of two-thirds
of the directors then still in office who were directors at the beginning of
such twelve month period.
(b) For purposes of the Agreement, a "Material Change" shall occur if:
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(i) the Company makes any change in the Executive's functions,
duties or responsibilities from the positions that the Executive occupied on
October 1, 1997 or, if the Agreement has been renewed or extended, the date
of the last renewal or extension, but only if such change would cause:
(A) the Executive to report to anyone other than the Board of
Directors of the Company,
(B) the Executive to no longer be the Chairman of the Board,
President and Chief Executive Officer of the Company or its successor,
(C) even if the Executive maintains the positions of Chairman
of the Board, President and Chief Executive Officer, his responsibilities to
be reduced (without his written permission) from those in effect on October
1, 1997 or the date of the last renewal or extension of the Agreement, as
applicable, or
(D) the Executive's position with the Company to become one of
lesser importance or scope;
(ii) the Company assigns or reassigns the Executive (without his
written permission) to another place of employment;
(iii) the Company reduces the Executive's Base Salary, annual or
long-term incentive compensation or the manner in which such compensation is
determined, or retirement benefits, unless such reduction similarly applies to
all Senior Executive Officers of the Company, as defined in the Agreement, or
the Company breaches the terms of the Agreement; provided, however, that nothing
in this clause (iii) shall be construed to permit the Company to reduce the
Executive's Retirement Benefit, as defined in the Agreement, in any event, and
regardless of whether such reduction would similarly apply to all Senior
Executive Officers of the Company; or
(iv) a purchaser of all or substantially all of the Company's assets
or any successor or assignee of the Company fails to assume the Agreement.
M.D.C. HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxx XX
-----------------------------------
Name: Xxxxx X. Xxxxx XX
----------------------------------
Title: Senior Vice President
---------------------------------
EXECUTIVE
/s/ Xxxxx X. Xxxxx
---------------------------------------
Name: Xxxxx X. Xxxxx
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