<PAGE>
As filed with the Securities and Exchange Commission on July 1, 1994
Registration No. ______________
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
M.D.C. HOLDINGS, INC.
--------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 84-0622967
- -------------------------------- --------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
3600 South Yosemite Street, Suite 900, Denver, Colorado 80237
-------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
M.D.C. HOLDINGS, INC. EMPLOYEE EQUITY INCENTIVE PLAN
M.D.C. HOLDINGS, INC. DIRECTOR EQUITY INCENTIVE PLAN
AND
CERTAIN NON-STATUTORY STOCK OPTIONS
-----------------------------------
(Full Title of the Plan)
Spencer I. Browne, President
M.D.C. Holdings, Inc.
3600 South Yosemite Street, Suite 900
Denver, Colorado 80237
-------------------------------------------
(Name and address of agent for service)
(303)773-1100
---------------------------------------------------------------
(Telephone number, including area code, of agent for service)
Copy to:
Daniel S. Japha, Esq. Paris G. Reece III
General Counsel - Corporate Vice President and
M.D.C. Holdings, Inc. Chief Financial Officer
3600 South Yosemite Street M.D.C. Holdings, Inc.
Suite 900 3600 South Yosemite Street
Denver, Colorado 80237 Suite 900
Denver, Colorado 80237
----------------------------
The Exhibit Index may be found on Page 32 of the sequentially
numbered copy of this Registration Statement.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum
Title of Amount Offering Aggregate Amount of
Securities to to be Price Per Offering Registration
be Registered Registered Share (1) Price (1) Fee
- ------------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C>
Common Stock 2,904,000 $5.6875 $16,516,500 $5,161.41
$0.01 par value(2) Shares
- --------------------------------------------------------------------------------
Common Stock 250,000 $5.6875 $ 1,421,875 $ 444.34
$0.01 par value(3) Shares
- --------------------------------------------------------------------------------
Total 3,154,000 XXX $17,938,375 $5,605.75
Shares
- --------------------------------------------------------------------------------
<FN>
(1) The calculation of the registration fee is based upon the average of the
closing high and low sales prices of M.D.C. Holdings, Inc.'s (the
"Company") common stock as quoted by the New York Stock Exchange on June
24, 1994.
(2) Issuable upon exercise of Incentive Stock Options and Non-Statutory Options
pursuant to the Company's Employee Equity Incentive Plan and Director
Equity Incentive Plan.
(3) Issuable upon exercise of a Non-Qualified Stock Option pursuant to the
Non-Qualified Stock Option Agreement, as amended.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
PROSPECTUS
M.D.C. HOLDINGS, INC.
COMMON STOCK, $.01 PAR VALUE
1,445,000 Shares of Common Stock
Acquired Under the M.D.C. Holdings, Inc.
Employee Equity Incentive Plan, the
M.D.C. Holdings, Inc. Director Equity Incentive Plan
and Certain Non-Statutory Stock Options
This Prospectus relates to the resale by certain employees, officers and
directors (hereafter sometimes referred to collectively as the "Selling
Stockholders" and individually as a "Selling Stockholder") of M.D.C. Holdings,
Inc., a Delaware corporation (the "Company"), of shares of the Company's Common
Stock, $.01 par value, acquired, or which may be acquired in the future,
pursuant to the Company's Employee Equity Incentive Plan and Director Equity
Incentive Plan or pursuant to a Non-Statutory Stock Option granted in connection
with the employment of a consultant who is currently an employee of the Company
(the "Shares"). The Company will not receive any proceeds from the sale of the
Shares by the Selling Stockholders.
The Common Stock of the Company is traded on the New York Stock Exchange
("NYSE") and the Pacific Stock Exchange ("PSE") where prices are reported under
the symbol "MDC." On June 24, 1994, the last reported sale price for the Common
Stock on the NYSE was $5.875 per share.
All expenses relating to the distribution of the shares are to be borne by
the Company, other than commissions, concessions and discounts of underwriters,
dealers or agents of the Selling Stockholders.
See "Risk Factors" for a description of certain risks involved in the
purchase of the Shares.
---------------
1
<PAGE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------
The Selling Stockholders directly or through agents, dealers or
underwriters may sell the Shares from time to time on terms to be determined at
the time of sale. The aggregate proceeds to the Selling Stockholders from the
sale of the Shares sold by them pursuant to this Prospectus will be the purchase
price of such Shares less any commissions. See "Plan of Distribution." Each of
the Selling Stockholders reserves the sole right to accept or to reject, in
whole or in part, any proposed purchase of its Shares.
The Selling Stockholders, and any underwriters, dealers or agents that
participate with the Selling Stockholders in the distribution of the Shares, may
be deemed to be "underwriters" within the meaning of the Securities Act of 1933,
as amended (the "Securities Act") , and any commissions received by them and any
profit on the resale of the Shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act. See "Plan of
Distribution" for indemnification arrangements between the Company and the
Selling Stockholders.
---------------
The date of this Prospectus is July 1, 1994
2
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-8 under the Securities Act,
with respect to the Shares offered hereby. For the purposes hereof, the term
"Registration Statement" means the original Registration Statement and any and
all amendments thereto. This Prospectus does not contain all of the information
set forth in the Registration Statement and the schedules and exhibits thereto,
to which reference hereby is made. Each statement made in this Prospectus
concerning a document filed as an exhibit to the Registration Statement is
qualified in its entirety by reference to such exhibit for a complete statement
of its provisions.
The Company is subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information with
the Commission. Such reports, proxy statements and other information can be
inspected, without charge, at the public reference facilities of the Commission
at its principal office at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, and at its regional office at 500 W. Madison Street,
Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center, 13th Floor, New
York, New York 10007. Any interested party may obtain copies of such materials
at prescribed rates from the Public Reference Section of the Commission at its
principal office at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549. In addition, such material can be inspected at the
offices of the New York Stock Exchange, 20 Broad Street, New York, New York and
the Pacific Stock Exchange, 115 Sansome Street, Suite 1104, San Francisco,
California.
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND FINANCIAL STATEMENTS (INCLUDING THE NOTES THERETO) APPEARING
ELSEWHERE OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS. REFERENCES HEREIN TO
"MDC" OR THE "COMPANY," UNLESS OTHERWISE INDICATED, REFER TO M.D.C. HOLDINGS,
INC. AND ITS SUBSIDIARIES.
3
<PAGE>
THE COMPANY
The Company is a national home builder with major operations in Colorado,
northern Virginia and suburban Maryland (collectively "Mid-Atlantic")and
northern California, and smaller operations in Arizona, Nevada and southern
California. Principally through HomeAmerican Mortgage Corporation
("HomeAmerican"), a wholly-owned subsidiary, the Company originates mortgage
loans for its home buyers and for others. HomeAmerican also purchases loans
originated by unaffiliated loan correspondents. To a substantially lesser
extent, the Company owns and manages portfolios of mortgage-related assets.
In its home building segment, the Company's strategy is to build quality
homes at affordable prices. The Company, as the general contractor, supervises
the development and construction of all of its projects and employs
subcontractors for site development and home construction. The Company
emphasizes the building of single-family homes generally for the first-time and
move-up buyer. Homes are constructed according to basic designs based on
customer preferences in the location in which they are built. Single-family
homes are built and sold by the Company's subsidiaries using the name Richmond
American Homes and Richmond Homes.
HomeAmerican is a Federal Housing Administration, Veterans Administration,
Federal National Mortgage Association and Federal Home Loan Mortgage Corporation
authorized mortgage loan originator. Substantially all of the mortgage loans
originated by HomeAmerican are sold to private investors. HomeAmerican initially
retains the right to service these mortgage loans selling the servicing at a
later date, usually in bulk.
The Company's asset management operations (collectively, the "asset
management segment"), among other things, enable MDC to (i) manage the day-to-
day operations of two national securities exchange-listed real estate investment
trusts; (ii) own interests ("CMO" Ownership Interests") in issuances of
collateralized mortgage obligations ("CMO bonds"); and (iii) own interests in
various other investments. The Company currently does not expect to acquire
additional CMO Ownership Interests in the future, except to the extent
attractive opportunities may be identified. As a result, future income from the
asset management segment primarily will be dependent on management fees.
4
<PAGE>
The Company is a Delaware corporation originally incorporated in Colorado
in 1972. The principal executive offices of the Company are located at 3600
South Yosemite Street, Suite 900, Denver, Colorado 80237, and its telephone
number is (303)773-1100.
RISK FACTORS
See "Rick Factors" for a discussion of certain risks involved in the
purchase of the Shares.
THE OFFERING
Shares offered hereby .... Up to 1,445,000 shares of the Company's Common
Stock, $.01 par value per share.
Trading .................. The Common Stock of the Company is traded on the
NYSE and the PSE where prices are reported under
the symbol "MDC."
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
March 31, Year Ended December 31,
------------------ ---------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues . . . . . . . $168,693 $115,885 $652,076 $511,568 $422,232 $512,695 $724,075
Income (loss)
from continuing
operations . . . . . . 3,806 915 10,056 4,765 (12,903) (11,954) (90,091)
Income (loss) from
continuing operations
per primary common
share. . . . . . . . . $ .19 $ .04 $ .45 $ .22 $ (.62) $ (.63) $ (5.66)
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
March 31, December 31,
-----------------------------------------------------------
1994 1993 1992 1991 1990 1989
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets . . . . . . . $733,224 $776,866 $858,944 $1,316,793 $1,477,146 $1,663,726
Total Debt(1). . . . . . . 329,570 345,676 325,835 350,776 411,291 515,179
Stockholders' equity . . . 178,270 175,854 164,182 160,488 157,261 150,474
- -------------
<FN>
(1) Excludes CMO bond indebtedness.
</TABLE>
RISK FACTORS
Prospective investors should carefully consider the following factors in
addition to the other information set forth in this Prospectus before making an
investment in the Shares offered hereby.
LEVERAGE
The home building industry is capital intensive. The Company finances a
substantial portion of its land acquisition and residential construction
activities through the incurrence by its subsidiaries of secured indebtedness
and, as a result, the Company is highly leveraged. As of March 31, 1994, the
Company's total indebtedness (excluding CMO bond indebtedness) was $329,570,000
and the Company's debt-to-equity ratio was approximately 1.85 to 1. In addition,
agreements governing certain indebtedness permit the Company to incur
significant additional indebtedness. Although the Company expects to generate
sufficient cash flow from operations to meet its debt service obligations, the
ability of the Company to meet its obligations will depend upon the future
performance of the Company and will be subject to financial, business and other
factors affecting the business and operations of the Company, including general
economic conditions.
HOLDING COMPANY ISSUER
Most of the operations of the Company are conducted through, and most of
the Company's assets are held by, its subsidiaries,
6
<PAGE>
and, therefore, the Company is dependent on the cash flow of its subsidiaries to
meet its debt obligations. Except to the extent the Company may itself be a
creditor with recognized claims against its subsidiaries, all claims of
creditors and holders of preferred stock of the subsidiaries will have priority
with respect to the assets of such subsidiaries over the claims of creditors and
equity holders of the Company. At March 31, 1994, the Company's subsidiaries had
$181,268,000 aggregate principal amount of indebtedness and liquidation
preference of preferred stock outstanding. Instruments governing certain
indebtedness of the Company's subsidiaries contain restrictions on transfer of
funds from such subsidiaries to the Company.
THE HOME BUILDING INDUSTRY
The home building industry is affected significantly by changes in economic
conditions, the supply of homes, changes in governmental regulation (including
uncertainties involving the entitlement process in the improvement of
undeveloped land), increases in real estate taxes, energy costs and costs of
materials and labor, the availability and cost of suitable land, environmental
factors, weather and the availability of financing at rates and on terms
acceptable to home builders and home buyers. Beginning in 1992 through October
1993, home mortgage interest rates declined to their lowest levels in 25 years
to an average of 6.7% on a 30-year, fixed-rate mortgage. From October 1993 to
May 1994, these rates have increased to as high as 9%. Increases in mortgage
interest rates adversely affect the Company's home building and mortgage lending
segments. Higher mortgage interest rates (i) may reduce the demand for homes and
home mortgages; and (ii) generally will reduce home mortgage refinancing
activity. With the recent increases in mortgage interest rates relative to
levels in 1993, the Company, consistent with the rest of the industry in
general, has experienced a major decline in refinancing activity in its mortgage
lending operations. These events have affected adversely the spot mortgage loan
originations and the amount of mortgage loans purchased through correspondents
by the Company's mortgage lending segment, although increased originations from
the Company's home building operations have offset to a significant degree these
declines. The Company is unable to predict the extent to which current or future
increases in mortgage interest rates will adversely affect the Company's
operating activities and results of operations.
7
<PAGE>
The housing industry is cyclical and significantly is affected by
prevailing economic conditions. The Company's business and earnings are
dependent in large part on its Colorado and Mid-Atlantic markets. The Colorado
market was affected adversely beginning in 1986 through 1991 by weaknesses in
the state economy as well as by weaknesses in the housing industry in this
market. The Company experienced an increase in the number of new contracts for
the purchase of homes in Colorado beginning in 1991 which has continued through
March 31, 1994. There can be no assurance that the Company will be able to
maintain or increase this level of new sales contracts or deliver an increasing
number of homes in the future in its Colorado market. From late 1988 through
1990, the Company's Mid-Atlantic market was affected adversely by weaknesses in
the housing industry in this market. The Company experienced an increase in the
number of new contracts for the purchase of homes in its Mid-Atlantic market in
1991 which has continued through March 31, 1994, primarily due to (i) moderate
growth in the region's economy; (ii) an increase in the total number of
subdivisions in which the Company is operating; and (iii) the reduction in
mortgage interest rates which began in 1991 and continued through October 1993.
There can be no assurance that the Company will be able to maintain or increase
this level of new sales contracts or deliver an increasing number of homes in
the future in its Mid-Atlantic market.
The adoption, in August 1989, of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 ("FIRREA"), as well as the national
"credit crunch" that commenced in mid-1989, and the enactment in August 1991 of
the Federal Deposit Insurance Corporation Improvements Act of 1991, affected
adversely the ability of home builders to acquire and develop land into finished
sites for homes. FIRREA, among other things, has reduced the amount of resources
thrifts allocate to acquisition, development and construction loans, which has
affected, and in the future may affect, adversely the Company's ability to
acquire and develop new properties and develop its current land inventory into
finished sites suitable for the construction of homes.
REGULATORY AND ENVIRONMENTAL FACTORS
The Company is subject to continuing compliance with various federal, state
and local statutes, ordinances, rules and regulations, including, among others,
environmental, zoning and
8
<PAGE>
land use ordinances, building, plumbing and electrical codes, contractors'
licensing laws and health and safety regulations and laws. Various localities in
which the Company operates have imposed (or may in the future impose) fees on
developers to fund, among other things, schools, road improvements and low and
moderate income housing.
From time to time, various municipalities in which the Company operates,
particularly in California and Nevada, restrict or place moratoriums on the
availability of water and sewer taps. Additionally, certain jurisdictions in
which the Company operates (particularly in California) have proposed or enacted
growth initiatives restricting the number of building permits available in any
given year. Although no assurance can be given as to future conditions or future
governmental action, in general, the Company believes that it has, or under
existing agreements and regulations ultimately can obtain, an adequate number of
water and sewer taps and building permits for its inventory of land and land
held for development. The Company's general policy is to acquire finished
building sites and land for development only in areas which have, or will have
upon completion of development, the availability of building permits, access to
utilities and other municipal service facilities necessary for anticipated
development requirements. Generally, the zoning of land is suitable for its
intended use when acquired.
The home building operations of the Company also are affected by
environmental considerations pertaining to, among other things, availability of
water, municipal sewage treatment capacity, land use, hazardous waste disposal,
naturally occurring radioactive materials, building materials, population
density and preservation of the natural terrain and vegetation (collectively,
"Environmental Laws"). The particular Environmental Laws which apply to any
given home building project vary greatly according to the site's location,
environment conditions and present and former uses. These Environmental Laws may
result in delays, may cause the Company to incur substantial compliance and
other costs and may prohibit or severely restrict home building activity in
certain environmentally-sensitive regions or areas.
COMPETITION
The real estate industry is fragmented and highly competitive.
9
<PAGE>
In each of its markets, the Company competes with numerous home builders,
subdivision developers and land development companies (a number of which build
nationwide). Home builders not only compete for customers, but also for, among
other things, desirable financing, raw materials and skilled labor. In a number
of its markets, the Company competes with home builders that are substantially
larger and have greater financial resources than the Company. Competition for
home sales is based, among other factors, on price, style, financing provided to
prospective purchasers, location, quality, warranty service and general
reputation in the community.
The mortgage industry is fragmented and highly competitive. In each of the
areas in which it originates loans, HomeAmerican competes with numerous banks,
thrifts and mortgage bankers, many of which are larger and have greater
financial resources than HomeAmerican. Competition is based, among other
factors, on pricing, loan terms and underwriting criteria.
AFFILIATED TRANSACTIONS
The Company has entered into several transactions with affiliates,
including Larry A. Mizel, the Company's Chairman of the Board of Directors and
Chief Executive Officer, David D. Mandarich, Executive Vice President-Real
Estate and a director of the Company, and other members of the Board of
Directors. Material transactions between the Company and its officers and
directors are subject to review by the Company's Board of Directors. Such review
includes a review of the fairness of the transaction or an independent
appraisal.
THRIFT INVESTIGATIONS
The Company understands that investigations are being conducted by Federal
grand juries and other government agencies in various states with regard to the
failures of a number of thrifts with which MDC had business transactions during
the period 1983 through mid-1988. The Company and its affiliates have received
and responded to subpoenas requesting documents and information in connection
with certain investigations and may in the future receive additional inquiries
or subpoenas. No indictments or charges have been brought against the Company or
any of its officials by any grand jury investigating the failure of any
10
<PAGE>
savings and loan institutions. Although the Company believes there is no basis
for the imposition against the Company or its officials of criminal or civil
liability in connection therewith, were any indictment or charge to be brought
against the Company, there could be a material adverse effect upon the Company's
financial position and liquidity.
TAX MATTERS
M.D.C. Holdings, Inc. and its wholly-owned subsidiaries file a consolidated
federal income tax return (the "MDC Consolidated Return"). Richmond Homes, Inc.
I ("Richmond Homes") and its subsidiaries filed (or will file) separate
consolidated federal income tax returns (the "Richmond Homes Consolidated
Returns") from its inception (December 28, 1989) through the date Richmond Homes
was merged into a wholly-owned subsidiary of MDC (February 2, 1994).
The Internal Revenue Service (the "IRS") has completed its examination of
the MDC Consolidated Returns for the years 1984 through 1987 and has proposed
certain adjustments to the taxable income reflected in such returns. A
substantial portion of the proposed adjustments concern the characterization of
$22,000,000 in gains on sales of property held for investment, which were
reported as capital gains. Certain of the other proposed adjustments would shift
the recognition of certain items of income and expense from one year to another
("Timing Adjustments"). To the extent taxable income is increased by proposed
Timing Adjustments, taxable income may be reduced by a corresponding amount in
other years, nevertheless the Company would incur an interest charge as a result
of such adjustment. The Company currently is protesting many of these proposed
adjustments through the IRS appeals process and believes that the amount of
these adjustments will be reduced as a result. In the opinion of management,
adequate provision has been made for the additional income taxes and interest
which may arise as a result of the proposed adjustments.
The IRS currently is examining the MDC Consolidated Returns for the years
1988 through 1990 and the Richmond Homes Consolidated Returns for the years 1989
and 1990. No reports have been issued by the IRS in connection with these
examinations. In the opinion of management, adequate provision has been made for
additional income taxes and interest which may result from these examinations.
11
<PAGE>
SELLING STOCKHOLDERS
1,445,000 of the shares of Common Stock covered by this Prospectus are
being offered by the Selling Stockholders identified in the table below. Such
shares have been, or may be acquired, by the Selling Stockholders pursuant to
the exercise of options granted under the Company's Employee Equity Incentive
Plan (the "Employee Plan") or the Company's Director Equity Incentive Plan (the
"Director Plan"); the Employee Plan and the Director Plan are sometimes
hereafter collectively referred to as the "Plans") or the exercise of a certain
Non-Statutory Stock Option (the "Non-Statutory Option"). For further information
with respect to the Plans and the Non-Statutory Option, see the Registration
Statement of the Company (the "Registration Statement") of which this Prospectus
is a part. The following table sets forth certain information, as of June 24,
1994, with respect to the Selling Stockholders and the shares of Common Stock
offered hereby:
<TABLE>
<CAPTION>
Shares owned Amount to To be
Name and prior to this be offered owned after
position with the Company offering (1) hereunder this offering(4)
- ------------------------- ------------- ---------- --------------------
Percent
Shares of class
------ --------
<S> <C> <C> <C> <C>
Larry A. Mizel, Chairman of 4,173,602 350,000 3,823,602 20.1%
the Board of Directors
and Chief Executive Officer (2)
Spencer I. Brown, President 625,599 350,000 275,599 1.4%
and Chief Operating Officer
and Director
David D. Mandarich, Executive 1,415,738 600,000 815,738 4.3%
Vice President, Real Estate
and a Director (3)
Steven J. Borick, Director 75,000 25,000 50,000 *
Gilbert Goldstein, Director 190,151 25,000 165,151 *
William B. Kemper, Director 85,000 25,000 60,000 *
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Shares owned Amount to To be
Name and prior to this be offered owned after
position with the Company offering (1) hereunder this offering(4)
- ------------------------- ------------- ---------- --------------------
<S> <C> <C> <C>
Arthur R. Lehl, -0- 10,000 *
Chief Information Officer
Daniel S. Japha, General -0- 20,000 *
Counsel-Corporate
Jack W. Davidson, -0- 20,000 *
Executive Vice President
Northern California Division
Richmond American Homes of
California, Inc.
Robert T. Shiota -0- 20,000 *
Vice President/Division
Manager (Southern California Div.)
Richmond American Homes of
California, Inc.
- ---------------------
<FN>
* Represents less than one percent of the outstanding shares of Common Stock.
(1) Includes shares of Common Stock which may be purchased upon the exercise of
all currently exercisable options and those exercisable within 60 days of
the date of this Prospectus.
(2) Includes 5,000 shares held jointly by Mr. Mizel's wife and her brother and
sister, 1,115 shares owned by Mr. Mizel's minor children and 405,314 shares
of Common Stock with respect to which Mr. Mizel may be considered the
"beneficial owner," as defined under the Exchange Act, because he is a
beneficiary of certain trusts which own all of the outstanding stock of
CVentures, Inc., a corporation which controls the voting of these shares of
Common Stock. Mr. Mizel is a director and officer of CVentures, Inc. Also
includes 194,032 shares of Common Stock owned by certain trusts for the
benefit of Mr. Mizel and certain members of his immediate family, over
which shares Mr. Mizel does not exercise voting control, although he
</TABLE>
13
<PAGE>
<TABLE>
<C> <S>
has a limited power of appointment allowing him to direct the trustee to
gift all or a portion of such shares to any person other than himself,
members of his family or a creditor. Mr. Mizel disclaims beneficial
ownership of the 194,032 shares.
(3) David D. Mandarich was elected as Executive Vice President-Real Estate of
the Company in April 1993 and appointed a director of the Company in March
1994. From April 1989 to April 1993, Mr. Mandarich served as a consultant
to the Company. Includes 250,000 shares that were issued in connection with
the Consulting Agreement dated April 6, 1989.
(4) Assumes the sale of all shares offered hereby.
</TABLE>
PLAN OF DISTRIBUTION
The Company is unaware of any plan of distribution of any of the Selling
Stockholders with respect to the resale of the shares of Common Stock offered
hereby, but believes that those shares may from time to time be offered for sale
either directly by the Selling Stockholders or by their pledgees, donees,
transferees, or other successors in interest. Such sales may be made on the New
York Stock Exchange ("NYSE") or the Pacific Stock Exchange, Incorporated
("PSE"), in the over-the-counter market, or in privately negotiated
transactions. Sales of such shares on the NYSE, PSE or in the over-the-counter
market may be by means of one or more of the following: (a) a block trade in
which a broker or dealer will attempt to sell the shares as agent but may
position and resell a portion of the block as principal to facilitate the
transaction; (b) purchases by a dealer as principal and resale by such dealer
for its account pursuant to this Prospectus; (c) distribution on the NYSE or PSE
in accordance with the rules of the NYSE or PSE; and (d) ordinary brokerage
transactions and transactions in which the broker solicits purchasers. In
effecting sales, brokers or dealers engaged by the Selling Stockholders may
arrange for other brokers or dealers to participate. In addition, any securities
covered by this Prospectus which qualify for sale pursuant to Rule 144 may be
sold under Rule 144 rather than pursuant to this Prospectus.
The Selling Stockholders may pay commissions or allow discounts to any
brokers or dealers participating in the resale of the shares offered hereby,
which commissions or discounts will be
14
<PAGE>
at the customary rates of such brokers for similar transactions. Those shares
will be sold at market prices prevailing at the time of sale or at negotiated
prices. As of the date of this Prospectus, the Company is not aware of any
agreements, arrangements or understandings which have been entered into between
any of the Selling Stockholders and any broker or dealer with respect to the
sale of any of the shares of Common Stock to be offered hereby. In effecting
such sales, each Selling Stockholder and brokers through whom such securities
are sold may be deemed to be "underwriters" as that term is defined in Section
2(11)of the Securities Act of 1933, as amended, and any discounts, concessions
or commissions received by any such person may be deemed to be underwriting
discounts or commissions under the Act.
Upon the Company being notified by a Selling Stockholder that any material
arrangement has been entered into with an underwriter, broker or dealer for the
sale of shares through a secondary distribution or a purchase by an underwriter,
broker or dealer, a supplemented prospectus will be filed, if required,
disclosing such of the following information as the Company believes
appropriate: (i) the name of each such Selling Stockholder and of the
participating underwriter, broker or dealer; (ii) the number of shares involved;
(iii) the price at which such shares were sold; (iv) the commissions paid or
discounts or concessions allowed to such underwriter, broker or dealer and (v)
other facts material to the transaction.
The Company does not believe that the Shares offered will materially affect
the Company's ability to raise further capital.
DESCRIPTION OF COMMON STOCK
The Company has authorized 100,000,000 shares of common stock, $.01 par
value (the "Common Stock").
COMMON STOCK
At June 24, 1994, 19,020,000 shares of the Common Stock were issued and
outstanding. Holders of shares of Common Stock are entitled to one vote for each
share held of record on matters submitted to a vote of stockholders. Holders of
shares of the Common Stock do not have cumulative voting rights in the election
15
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of directors to the Company's Board of Directors, which is divided into three
classes, with members of each class serving a three-year term.
A vote by the holders of a majority of shares of the Common Stock present
at a meeting at which a quorum is present is necessary to take action, except
for certain extraordinary matters which require the approval of the holders of
80% of the outstanding shares of voting stock. In addition, certain Business
Combinations (as defined in the Company's Certificate of Incorporation, as
amended (the "Certificate") but generally, a merger or consolidation of the
Company with any holder (directly or indirectly) of more than 10% of the
outstanding shares of voting stock of the Company (an "Interested Stockholder")
or certain related parties; the sale or other disposition by the Company of any
assets or securities to an Interested Stockholder involving assets or securities
having a value of $15,000,000 or more than 15% of the book value of the total
assets or 15% of the stockholders' equity of the Company; the adoption of any
plan or proposal for the liquidation or dissolution of the Company or for any
amendment to the Company's Bylaws; or any reclassification of securities,
recapitalization, merger with a subsidiary or ther transaction which has the
effect of increasing an Interested Stockholder's roportionate ownership of the
capital stock of the Company) involving the Company and an Interested
Stockholder must be approved by the holders of 80% of the shares of outstanding
voting stock, unless approved by a majority of Continuing Directors (as
defined in the Certificate) or unless certain minimum price and procedural
requirements are met. In the case of any Business Combination involving payments
to holders of shares of the Common Stock, the fair market value per share of
such payments would have to be at least equal to the highest value determined
under the following alternatives: (i) the highest price per share of the Common
Stock paid by or on behalf of the Interested Stockholder during the two years
prior to the public announcement of the proposed Business Combination (the
"Announcement Date") or in the transaction in which it became an Interested
Stockholder, whichever is higher; and (ii) the fair market value per share of
the Common Stock on the Announcement Date or on the date on which the Interested
Stockholder became an Interested Stockholder, whichever is higher. "Fair market
value" is defined in the Certificate to mean, in the case of exchange-listed or
NASDAQ-quoted stock, the highest closing price or closing
16
<PAGE>
bid in the 30 days preceding the date in question, and, in the case of other
property, the fair market value as determined by a majority of the Continuing
Directors.
Subject to the preferences applicable to any then outstanding shares of
preferred stock of the Company, holders of shares of Common Stock are entitled
to dividends when and as declared by the Board of Directors of the Company from
funds legally available therefor and are entitled, in the event of liquidation,
to share ratably in all assets remaining after payment of liabilities. The
shares of Common Stock are neither redeemable nor convertible, and the holders
thereof have no preemptive or subscription rights to purchase any securities of
the Company. All issued and outstanding shares of Common Stock are validly
issued, fully paid and nonassessable.
LEGAL MATTERS
Certain matters with respect to the legality of the issuance of the Shares
offered hereby will be passed upon for the Company by Daniel S. Japha, Esq.,
General Counsel-Corporate.
EXPERTS
The financial statements incorporated in this Prospectus by reference to
the Annual Report on Form 10-K for the year ended December 31, 1993, have been
so incorporated in reliance on the report of Price Waterhouse, independent
accounts, given on the authority of said firm as experts in auditing and
accounting.
With respect to the unaudited condensed consolidated balance sheet of
M.D.C. Holdings, Inc. and subsidiaries as of March 31, 1994, and the related
condensed consolidated statements of income and of cash flows for the three-
month periods ended March 31, 1994 and 1993 incorporated by reference in this
Prospectus, Price Waterhouse has not carried out any significant or additional
audit tests beyond those which would have been necessary if their report had not
been included. Accordingly, the degree of reliance on their report on such
information should be restricted in light of the limited nature of the review
procedures applied. Price Waterhouse is not subject to the liability provisions
of section 11 of the Securities Act of 1933 for their report on the unaudited
consolidate financial information because that report is not a
17
<PAGE>
"report" or a "part" of the registration statement prepared or certified by
Price Waterhouse within the meaning of section 7 and 11 of the Act.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
This Prospectus incorporates by reference documents which are not presented
herein or delivered herewith. Copies of any such documents filed by the Company,
including exhibits to such documents, are available upon request, and without
charge, from M.D.C. Holdings, Inc., 3600 South Yosemite Street, Suite 900,
Denver, Colorado 80237, Attention: Daniel S. Japha, Esq. General Counsel-
Corporate (telephone (303)773-1100).
The following documents, which have been filed by the Company with the
Commission, are hereby incorporated by reference in this Prospectus excluding
those portions not deemed filed:
(i) Annual Report on Form 10-K for the fiscal year ended December 31,
1993;
(ii) Form 10-K/A-1 dated April 13, 1994 amending the Annual Report on
Form 10-K for the fiscal year ended December 31, 1993;
(iii) Quarterly Report on Form 10-Q dated May 16, 1994 for the three
months ended March 31, 1994;
(iv) Current Report on Form 8-K dated January 11, 1994;
(v) Current Report on Form 8-K dated March 23, 1994;
(vi) Proxy Statement dated May 25, 1994 relating to the 1994 Annual
Meeting of Stockholders, as supplemented June 6, 1994.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Shares shall be deemed to be incorporated
by reference into this Prospectus and to be a part hereof from the respective
dates of filing of such documents, excluding those portions of such documents
not deemed filed. Any statement contained in a document
18
<PAGE>
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein, or in any subsequently filed document that also is
or is modified to be incorporated by reference herein, modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Delaware law and MDC's Bylaws permit indemnification of MDC's officers,
directors and controlling persons against certain liabilities (including
liabilities under the Securities Act) they may incur in such capacities. In
general, directors may be indemnified against expenses, fines, settlements or
judgments arising in connection with a legal proceeding if the actions resulting
in such liabilities: (i) were taken in good faith; (ii) were reasonably believed
to be in or not opposed to the Company's best interest; and (iii) with respect
to any criminal action, the person to be indemnified had no reasonable grounds
to believe the actions were unlawful. In the event an officer, director or
controlling person is successful in defending a proceeding, indemnification of
expenses is required. Unless the person seeking indemnification is successful on
the merits, indemnification may ordinarily be granted only upon a determination
by members of the Board who are not parties to the proceeding, by independent
legal counsel, or by vote of stockholders that the applicable standard of
conduct was met or if a determination is made by the Delaware Court of Chancery
or the court in which the action or suit was brought that the person is
reasonably entitled to indemnity. Delaware law also provides that a Company may
indemnify any officers, directors or controlling persons to a greater extent
than described above, if provided for under any bylaw, resolution of
stockholders, or disinterested directors, or otherwise. Insofar as
indemnification for liabilities arising under the Act may be permitted to
directors, officers and persons controlling the Company pursuant to the
foregoing provisions, the Company has been informed that in the opinion of the
Commission, such indemnification is against public policy as expressed in the
Act, and is therefore unenforceable.
19
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Registrant with the
Securities and Exchange Commission, are hereby incorporated by reference into
this Registration Statement.
(a) Annual Report on Form 10-K for the fiscal year ended December 31,
1993.
(b) Form 10-K/A-1 dated April 13, 1994 amending the Annual Report on Form
10-K for the fiscal year ended December 31, 1993.
(c) Quarterly Report on Form 10-Q for the quarter ended March 31, 1994.
(d) Proxy Statement dated May 25, 1994 relating to the 1994 Annual Meeting
of Stockholders, as supplemented June 6, 1994.
(e) The description of the Registrant's $.01 par value common stock is
contained in the Form 8-A dated July 22, 1986.
All documents subsequently filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the filing
of a post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold, except
those portions of such documents not deemed filed, shall be deemed to be
incorporated by reference into this Registration Statement and shall be a part
hereof from the date of such filing.
Item 4. DESCRIPTION OF SECURITIES
No information is required to be furnished hereunder because the
Registrant's common stock is registered under Section 12 of the Securities
Exchange Act of 1934.
2
<PAGE>
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The opinion as to the legality of the securities being registered of Daniel
S. Japha, Esq. who is employed full time by the Registrant as General Counsel-
Corporate, is filed as an exhibit to this Registration Statement. Mr. Japha has
no substantial interest in the Registrant as defined in instructions to Item 509
of Regulation S-K.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Eighth of the Registrant's Certificate of Incorporation and Article
VIII of the Registrant's bylaws provide for mandatory indemnification of
directors and officers to the fullest extent permitted by Delaware law. A
summary of the circumstances in which such indemnification is provided for is
contained below, but that description is qualified in its entirety by reference
to Article Eighth of the Registrant's Certificate of Incorporation, Article VIII
of the Registrant's By-Laws and the relevant section of the Delaware General
Corporation Law.
Section 145 of the Delaware General Corporation Law, in general, provides
that a corporation may indemnify any director, officer, employee or agent of a
corporation against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement, actually and reasonably incurred in a proceeding
(including any civil, criminal, administrative or investigative proceeding other
than an action by or in the right of the corporation) to which the person was a
party by reason of such status. Such indemnity may be provided if the person's
actions resulting in the liabilities: (i) were taken in good faith; (ii) were
reasonably believed to have been in or not opposed to the corporation's best
interest; and (iii) with respect to any criminal action, the person had no
reasonable cause to believe the actions were unlawful. Unless ordered by a
court, indemnification generally may be awarded only after a determination of
independent members of the Board of Directors or a committee thereof, by
independent legal counsel or by vote of the stockholders that the applicable
standard of conduct was met by the individual to be indemnified.
3
<PAGE>
Indemnification in connection with a proceeding by or in the right of the
corporation in which the director, officer, employee or agent is successful is
permitted only with respect to expenses, including attorneys' fees actually and
reasonably incurred in connection with the defense. In such actions, the person
to be indemnified must have acted in good faith, in a manner believed to have
been in or not opposed to the corporation's best interest and must not have been
adjudged liable to the corporation unless and only to the extent that the Court
of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper. Indemnification is otherwise prohibited in
connection with a proceeding brought on behalf of the corporation, or in
connection with any proceeding charging improper personal benefit to the
director in which the director is adjudged liable for receipt of an improper
personal benefit.
Section 145 further provides that to the extent a director, officer,
employee or agent is wholly successful on the merits or otherwise in defense of
any proceeding to which he was a party, he is entitled to receive
indemnification against expenses, (including attorneys' fees) actually and
reasonably incurred in connection with the proceeding.
Delaware law authorizes a corporation to reimburse or pay reasonable
expenses incurred by a director, officer, employee or agent in connection with a
proceeding, in advance of a final disposition of the matter. Such advances of
expenses are permitted if the person furnishes to the corporation a written
agreement to repay such advances if it is determined that he is not entitled to
be indemnified by the corporation.
The statutory section cited above further specifies that any provisions for
indemnification or advances for expenses does not exclude other rights under the
corporation's Certificate of Incorporation, Bylaws, resolutions of its
stockholders or disinterested directors, or otherwise. These indemnification
provisions continue for a person who has ceased to be a director, officer,
employee or agent of the corporation and inure to the benefit of the heirs,
executors and administrators of such persons.
4
<PAGE>
The statutory provision cited above also grants the power to a corporation
to purchase and maintain insurance policies which protect any director,
officers, employee or agent against any liability asserted against or incurred
by them in such capacity arising out of his status as such. Such policies may
provide for indemnification whether or not the corporation would otherwise have
the power to provide for it. No such policies providing protection against
liabilities imposed under the securities laws have been obtained by the
Registrant.
The Delaware General Corporation Law and Article Eighth of the Registrant's
Certificate of Incorporation, under certain circumstances provide that the
Registrant's directors will not be personally liable to the Registrant for
monetary damages for breach of fiduciary duty. A summary of the circumstances in
which such exoneration is provided is contained below, but that description is
qualified in its entirety by reference to Article Eighth of the Registrant's
Certificate of Incorporation and the relevant Sections of the Delaware General
Corporation Law.
In general, the Delaware General Corporation Law provides that any director
of a corporation shall not be personally liable to the corporation or its
stockholders for damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the
corporation to its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the director derived any personal benefit. If the Delaware General
Corporation Law is amended to further eliminate or limit the personal liability
of directors after adoption by a corporation of this provision, then the
liability of a director of a corporation shall be eliminated or limited to the
fullest extent permitted by the amended Delaware General Corporation Law.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
5
<PAGE>
Item 8. EXHIBITS
EXHIBIT NO. DESCRIPTION
4.1 M.D.C. Holdings, Inc. Employee Equity Incentive Plan
(incorporated herein by reference to Exhibit A of the
Company's Proxy Statement dated May 14, 1993 relating to the
1993 Annual Meeting of Stockholders)*
4.2 M.D.C. Holdings, Inc. Director Equity Incentive Plan
(incorporated herein by reference to Exhibit B of the
Company's Proxy Statement dated May 14, 1993 relating to the
1993 Annual Meeting of Stockholders)*
4.3(a) Form of Employee Incentive Stock Option
4.3(b) Form of Employee Non-Statutory Option
4.3(c) Form of Director Non-Statutory Option
4.4 Form of Consulting Agreement between David D. Mandarich and
the Registrant dated as of April 6, 1989 (incorporated by
reference to Exhibit 10.19(c) to the Company's Annual Report
on Form 10-K for the year ended December 31, 1988)*
4.5 Non-Qualified Stock Option Agreement, as
amended
5 Opinion of Daniel S. Japha, Esq. as to legality of
securities being registered
23.1 Consent of Price Waterhouse, Certified Public Accountants
23.2 Consent of Daniel S. Japha, Esq. (filed as part of Exhibit 5
above)
- -----------
* Incorporated herein by reference.
6
<PAGE>
Item 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(i) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include
any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change
to such information in the registration statement.
(ii) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(iii) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director,
7
<PAGE>
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
8
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Denver, State of Colorado, on July , 1994.
M.D.C. Holdings, Inc.
By:________________________________
Larry A. Mizel,
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers and/or
directors of M.D.C. Holdings, Inc., by virtue of their signatures appearing
below, hereby constitute and appoint Larry A. Mizel, Spencer I. Browne and Paris
G. Reece III, or any one of them, with full power of substitution, as attorney-
in-fact in their names, places and steads to execute any and all amendments to
this Registration Statement on Form S-8 in capacities set forth opposite their
names on the signature page thereof and hereby ratify all that said attorney-in-
fact may do by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
____________________ Chairman of the ___________, 1994
Larry A. Mizel Board of Directors
and Chief Executive
Officer
9
<PAGE>
____________________ President and Chief ___________, 1994
Spencer I. Browne Operating Officer
____________________ Executive Vice ___________, 1994
David D. Mandarich President - Real
Estate and Director
____________________ Vice President, ___________, 1994
Paris G. Reece III Secretary, Treas-
urer and Chief
Financial Officer
(principal finan-
cial and account-
ing officer)
____________________ Director ___________, 1994
Steven J. Borick
____________________ Director ___________, 1994
Gilbert Goldstein
____________________ Director ___________, 1994
William B. Kemper
____________________ Director ___________,1994
Herbert T. Buchwald
10
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
4.1 M.D.C. Holdings, Inc. Employee Equity Incentive Plan
(incorporated herein by reference to Exhibit A of the
Company's Proxy Statement dated May 14, 1993 relating to the
1993 Annual Meeting of Stockholders)*
4.2 M.D.C. Holdings, Inc. Director Equity Incentive Plan
(incorporated herein by reference to Exhibit B of the
Company's Proxy Statement dated May 14, 1993 relating to the
1993 Annual Meeting of Stockholders)*
4.3(a) Form of Employee Incentive Stock Option
4.3(b) Form of Employee Non-Statutory Option
4.3(c) Form of Director Non-Statutory Option
4.4 Form of Consulting Agreement between David D. Mandarich and
the Registrant dated as of April 6, 1989 (incorporated by
reference to Exhibit 10.19(c) to the Company's Annual Report
on Form 10-K for the year ended December 31, 1988)*
4.5 Non-Qualified Stock Option Agreement, as amended
5 Opinion of Daniel S. Japha, Esq. as to legality of
securities being registered
23.1 Consent of Price Waterhouse, Certified Public Accountants
23.2 Consent of Daniel S. Japha, Esq. (filed as part of Exhibit 5
above)
- ------------
* Incorporated herein by reference.
<PAGE>
EXHIBIT
4.3(a)
Form of Employee Incentive Stock Option
<PAGE>
M.D.C. HOLDINGS, INC.
EMPLOYEE EQUITY INCENTIVE PLAN
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT is made on and as of ______________________, 19___ (the
"Date of Grant") between M.D.C. HOLDINGS, INC., a Delaware corporation (the
"Company"), and _______________________ (the "Participant") pursuant to the
provisions of the Company's Employee Equity Incentive Plan (the "Plan"). The
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall have
the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates. Capitalized terms not
otherwise defined in this Agreement shall have the meaning specified in the
Plan.
SECTION 1.1 - OPTION
"Option" shall mean the incentive stock option to purchase Common Stock,
$.01 par value (the "Common Stock"), of the Company granted under this
Agreement.
SECTION 1.2 - TERMINATION OF EMPLOYMENT
"Termination of Employment" shall mean the time when the employee-employer
relationship between the Participant and the Company or a Subsidiary is
terminated for any reason, with or without cause, including, but not by way of
limitation, a termination by resignation, discharge, death or retirement but
excluding terminations where there is a simultaneous re-employment by the
Company or a Subsidiary.
<PAGE>
ARTICLE II
GRANT OF OPTION
SECTION 2.1 - GRANT OF OPTION
For good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, on the date hereof, the Company irrevocably grants to the
Participant the option to purchase any part or all of an aggregate of
____________________ shares of its Common Stock upon the terms and conditions
set forth in this Agreement.
SECTION 2.2 - PURCHASE PRICE
The purchase price of the shares of Common Stock covered by the Option
shall be $__________ per share without commission or other charge.
SECTION 2.3 - NO RIGHT TO CONTINUED EMPLOYMENT
Nothing in this Agreement or in the Plan shall confer upon the Participant
any right to continue in the employ of the Company or any Subsidiary or shall
interfere with or restrict in any way the rights of the Company and its
Subsidiaries, which are hereby expressly reserved, to discharge the Participant
at any time for any reason whatsoever, with or without good cause.
SECTION 2.4 - ADJUSTMENTS IN OPTION
In the event that the outstanding shares of the Common Stock subject to the
Option are changed into or exchanged for a different number or kind of shares of
the Company or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, stock split-up, stock
dividend, combination of shares, rights offering, issuance of warrants or
otherwise, the Committee shall make a reasonable, appropriate and equitable
adjustment in the number and kind of shares as to which the Option, or portions
thereof then unexercised, shall be exercisable, to the end that after such event
the Participant's proportionate interest shall be maintained as before the
occurrence of such event. Such adjustment in the Option shall be made without
change in the total price applicable to the Option or the unexercised portion of
the Option (except for any change in the aggregate price resulting from rounding
off of share quantities or prices) and with any necessary corresponding adjust-
ment in the price per share of the shares of Common Stock covered by the Option.
Any such adjustment made by the Committee shall be final and binding upon the
Participant, the Company and all other interested persons.
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<PAGE>
ARTICLE III
PERIOD OF EXERCISABILITY
SECTION 3.1 - COMMENCEMENT OF EXERCISABILITY
(a) The Option shall not become exercisable in whole or in part prior to
the expiration of the six-month period commencing after the Date of Grant.
(b) Subject to the other provisions of this Section 3.1, the Option
granted hereunder shall be exercisable in whole or in part as follows:
(i) 33 1/3% of the shares covered by the Option on __________, 199_;
(ii) an additional 33 1/3% of the shares covered by the Option
on __________, 199_; (iii) and the remaining 33 1/3% of the shares covered
by the Option on _________, 199_.
(c) Notwithstanding any other provisions of this Section 3.1, the Option
shall not be exercisable unless the holder thereof shall have been an Employee
of the Company or a Subsidiary for a period of at least six months prior to such
exercise; provided, however, that a Participant need not be an Employee at the
time of exercise.
SECTION 3.2 - DURATION OF EXERCISABILITY
The installments provided for in Section 3.1 are cumulative. Each such
installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.
SECTION 3.3 - EXPIRATION OF OPTION
The Option may not be exercised to any extent by anyone after the first to
occur of the following events:
(a) The expiration of three months from the date of the Participant's
Termination of Employment for any reason other than the Participant's death
or Disability; or
(b) The expiration of one year from the date of the Participant's
Termination of Employment by reason of the Participant's death or
Disability; or
(c) The expiration of six years from the Date of Grant; or
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<PAGE>
(d) The date of the Participant's Termination of Employment if such
Termination of Employment was for cause as reasonably determined by the
Board.
SECTION 3.4 - ACCELERATION OF EXERCISABILITY
(a) Notwithstanding Sections 2.4, 3.1(b) and 3.1(c) but subject to
Sections 3.1(a), 3.4(c) and 3.4(d), the Option, or any portion thereof,
granted under this Agreement that is not yet exercisable shall become
exercisable immediately prior to the occurrence of a merger or
consolidation of the Company with or into another corporation, the
acquisition by another corporation or person of all or substantially all of
the Company's assets or 80% or more of the Company's then outstanding
voting stock or the liquidation or dissolution of the Company (each, a
"Transaction"). At least ten days prior to the effective date of such
Transaction, the Company shall give the Participant holding the Option
notice of such event if the Option has not been fully exercised. During
this ten-day period, the Participant electing to exercise his or her
Options shall comply with all of the requirements of Sections 4.3 and 4.4
of this Agreement. In the event that such Transaction becomes effective,
the Option so exercised shall be deemed to have been exercised immediately
prior to the effective date of such Transaction. In the event that such
Transaction fails to transpire, the Participant's election under this
paragraph shall be of no effect and the Participant's Option shall remain
subject to the restrictions to which it was originally subject.
(b) In the event that a Transaction occurs, the Option, or any
portion thereof, that is not exercised prior to the occurrence of a
Transaction shall be cancelled, and the Participant holding such cancelled
Option shall receive in exchange therefor a cash payment equal to the
greater of (i) the Fair Market Value (as determined under Section 1.13 of
the Plan) of a share of Common Stock measured on the date immediately prior
to such Transaction less the per share exercise price set forth in the
Participant's Option, multiplied by the number of shares of Common Stock
purchasable under the Option; or (ii) the fair market value, as determined
by the Board in its reasonable discretion, of the cash, securities or other
consideration into which a share of Common Stock is to be exchanged
pursuant to the Transaction, less the exercise price set forth in the
Participant's Option, multiplied by the number of shares of Common Stock
purchasable under the Option.
(c) Notwithstanding the foregoing, Options that are not exercisable
on the date of a Transaction shall only become exercisable as described in
subsection (a) hereof or cancelled and settled for cash or other
consideration as described in subsection (b) hereof to the extent that such
exercise and issuance of shares of Common Stock or payment with respect to
the Participant continues to be deductible by the Company pursuant to
Section 280G of the Code. All determinations in applying this Section 3.4
shall be made by the Board in its reasonable discretion, and all such
determinations shall be final and binding on the Participant, the Company
and any interested party.
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(d) Notwithstanding the foregoing, no such acceleration of
exercisability described in subsection (a) hereof or cancellation and
settlement described in subsection (b) hereof shall take place if:
(i) The Participant's Option becomes unexercisable under
Section 3.3; or
(ii) In connection with a Transaction, provision is made for an
assumption of the Participant's Option or a substitution therefor of a
new Option by the resulting or acquiring corporation or a parent or
subsidiary of such corporation under similar terms and conditions as
reflected in this Agreement.
ARTICLE IV
EXERCISE OF OPTION
SECTION 4.1 - PERSON ELIGIBLE TO EXERCISE
During the lifetime of the Participant, only the Participant may exercise
the Option or any portion thereof. After the death of the Participant, any
exercisable portion of the Option may, prior to the time when such portion
expires or becomes unexercisable under Sections 3.3 or 3.4, be exercised by his
personal representative or by any person empowered to do so under the deceased
Participant's will or under the then applicable laws of descent and
distribution.
SECTION 4.2 - PARTIAL EXERCISE
Any exercisable portion of the Option or the entire Option, if then wholly
exercisable, may be exercised in whole or in part at any time prior to the time
when the Option or portion thereof becomes unexercisable under Sections 3.3 or
3.4; provided, however, that each partial exercise shall be for not less than
100 shares (or the minimum installment set forth in Section 3.1, if a smaller
number of shares) and shall be for whole shares only.
SECTION 4.3 - MANNER OF EXERCISE
The Option, or any exercisable portion thereof, may be exercised solely by
delivery to the Director of Stockholder Relations of all of the following prior
to the time when the Option or such portion becomes unexercisable under Sections
3.3 or 3.4:
(a) Notice in writing signed by the Participant or other person then
entitled to exercise the Option or portion, stating that the Option or
portion is exercised, such notice complying with all applicable rules
established by the Committee and in such form as determined by the
Secretary of the Company; and
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(b) (i) Full payment (by check) for the shares with respect to which
the Option or portion is thereby exercised; or
(ii) Full payment by delivery to the Company of shares of the
Common Stock owned by the Participant duly endorsed for transfer to the
Company by the Participant or other person entitled to exercise the Option
or portion thereof, with a Fair Market Value on the date of delivery equal
to the purchase price of the shares with respect to which such Option or
portion thereof is thereby exercised; or
(iii) Full payment in any other form approved by the Committee,
consistent with applicable law and the Plan; or
(iv) Any combination of the consideration provided in the
foregoing subsections (i), (ii) and (iii); and
(c) In the event the Option or portion thereof shall be exercised
pursuant to Section 4.1 by any person or persons other than the
Participant, appropriate proof of the right of such person or persons to
exercise the Option or portion thereof.
SECTION 4.4 - CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES
(a) The Common Stock shall not be issued in respect of the Option
granted hereunder unless the exercise of the Option and the issuance and
delivery of shares of Common Stock pursuant thereto shall comply with all
relevant provisions of law, including the law of the Company's state of
incorporation, the Securities Act, the Exchange Act, the rules and
regulations thereunder and the requirements of any stock exchange upon
which the Common Stock may then be listed, and shall be further subject to
the approval of the Company's counsel with respect to such compliance.
(b) The Plan, this Agreement and the grant and exercise of the Option
to purchase shares of Common Stock hereunder, and the Company's obligation
to sell and deliver shares upon the exercise of rights to purchase shares,
shall be subject to all applicable federal and state laws, rules and
regulations, and to such approvals by any regulatory or governmental agency
which may, in the written opinion of counsel for the Company, be required.
SECTION 4.5 - RIGHTS AS STOCKHOLDER
The holder of the Option shall not be, nor have any of the rights or
privileges of, a stockholder of the Company in respect of any shares purchasable
upon the exercise of any part of the Option unless and until certificates
representing such shares shall have been issued by the Company to the holder.
6
<PAGE>
ARTICLE V
OTHER PROVISIONS
SECTION 5.1 - ADMINISTRATION
The Committee shall have the power to interpret the Plan and this Agreement
and to adopt such rules for the administration, interpretation and application
of the Plan as are consistent therewith and to interpret, amend or revoke any
such rules. All actions taken and all interpretations and determinations made
by the Committee reasonably and in good faith shall be final and binding upon
the Participant, the Company and all other interested persons. No member of the
Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Option, and
all members of the Committee shall be fully protected by the Company with
respect to any such action, determination or interpretation. In its absolute
discretion, the Board may at any time and from time to time exercise any and all
rights and duties of the Committee under the Plan and this Agreement, excepting
those rights and duties that may only be performed by a Committee of
Disinterested Directors under Rule 16b-3 of the Exchange Act.
SECTION 5.2 - OPTION SUBJECT TO TERMS OF PLAN
This Option Agreement and the rights of the Participant hereunder are
subject to all the terms and conditions of the Plan, as the same may be amended
from time to time, as well as to such rules and regulations as the Committee may
adopt for administration of the Plan. Any inconsistency between this Option
Agreement and the Plan shall be resolved in favor of the Plan.
SECTION 5.3 - OPTION NOT TRANSFERABLE
Neither the Option nor any interest or right therein or part thereof shall
be subject to the debts, contracts or engagements of the Participant or his
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that this Section 5.3
shall not prevent transfers by will or by the applicable laws of descent and
distribution.
SECTION 5.4 - NOTICES
Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of its Director of Stockholder
Relations, and any notice to be given to the Participant shall be addressed to
the Participant at the address given beneath his
7
<PAGE>
signature hereto. By a notice given pursuant to this Section 5.4, either party
may hereafter designate a different address for notices to be given to him. Any
notice which is required to be given to the Participant shall, if the
Participant is then deceased, be given to the Participant's personal
representative if such representative has previously informed the Company of his
status and address by written notice under this Section 5.4. Any notice shall
be deemed duly given when (i) enclosed in a properly sealed envelope or wrapper
addressed as aforesaid, deposited (with postage prepaid) in a post office or
branch post office regularly maintained by the United States Postal Service,
(ii) upon deposit with a private overnight delivery service guaranteeing next
day service, or (iii) upon receipt of a facsimile indicating confirmation of
receipt.
SECTION 5.5 - TAX WITHHOLDING
The Company shall be entitled to require payment or deduction from other
compensation payable to the Participant of any sums required by federal, state
or local tax law to be withheld with respect to the grant or exercise of the
Option or any portion thereof. The Participant may elect to have the Company
withhold shares of Common Stock (or allow the return of shares of Common Stock)
having a Fair Market Value equal to the sums required to be withheld. If the
Participant elects to advance such sums directly, written notice of that
election shall be delivered on or prior to such exercise and, whether pursuant
to such election or pursuant to a requirement imposed by the Company, payment by
check of such sums for taxes shall be delivered within two days after the date
of exercise. If the Participant elects to have the Company withhold shares of
Common Stock (or allow the return of shares of Common Stock) having a Fair
Market Value equal to the sums required to be withheld, the value of the shares
of Common Stock to be withheld (or returned as the case may be) will be equal to
the Fair Market Value of such shares on the date that the amount of tax to be
withheld is to be determined (the "Tax Date"). An election by the Participant
to have shares of Common Stock withheld for this purpose will be subject to the
following restrictions: (1) the election must be made on or prior to the Tax
Date; (2) the election must be irrevocable; (3) the election shall be subject to
the disapproval of the Committee; and (4) if the Participant is an officer of
the Company within the meaning of Section 16 of the Exchange Act, the election
shall be subject to such additional restrictions as the Committee may impose in
an effort to secure the benefits of any regulations thereunder. The Committee
shall not be obligated to issue shares to the Participant upon exercise of the
Option or portion thereof until such payment has been received or shares have
been so withheld, unless withholding (or offset against a cash payment) as of or
prior to the date of such exercise is sufficient to cover all such sums due or
which may be due with respect to such exercise.
SECTION 5.6 - LOANS
The Committee may, in its discretion, extend one or more loans to the
Participant in connection with the exercise or receipt of outstanding Options
granted under this Plan. The terms and conditions of any such loan shall be set
by the Committee and may include, in the Committee's discretion, loans that are
secured, unsecured, recourse or nonrecourse.
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<PAGE>
SECTION 5.7 - COMPLIANCE WITH RULE 16b-3
With respect to persons subject to Section 16 of the Exchange Act,
transactions under this Agreement are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the
extent any provision of the Plan, this Agreement or action by the Committee
fails to so comply, it shall be deemed null and void, to the extent permitted by
law and deemed advisable by the Committee.
SECTION 5.8 - TITLES
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.
Section 5.9 - CONSTRUCTION
This Agreement shall be administered, interpreted and enforced under the
laws of the State of Delaware.
IN WITNESS WHEREOF, the parties have caused this Option Agreement to be
executed to be effective as of the Date of Grant.
M.D.C. HOLDINGS, INC.
By:_________________________________
Name:__________________________
Title:_________________________
____________________________________
Employee's Signature
____________________________________
Print Name
____________________________________
____________________________________
Home Address
____________________________________
Social Security Number
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<PAGE>
EXHIBIT
4.3(b)
Form of Employee Non-Statutory Option
<PAGE>
M.D.C. HOLDINGS, INC.
EMPLOYEE EQUITY INCENTIVE PLAN
NON-STATUTORY OPTION AGREEMENT
THIS AGREEMENT is made on and as of ____________________, 19___ (the "Date
of Grant") between M.D.C. HOLDINGS, INC., a Delaware corporation (the
"Company"), and _______________________ (the "Participant") pursuant to the
provisions of the Company's Employee Equity Incentive Plan (the "Plan"). The
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall have
the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates. Capitalized terms not
otherwise defined in this Agreement shall have the meaning specified in the
Plan.
SECTION 1.1 - OPTION
"Option" shall mean the non-statutory option to purchase Common Stock, $.01
par value (the "Common Stock"), of the Company granted under this Agreement.
SECTION 1.2 - TERMINATION OF EMPLOYMENT
"Termination of Employment" shall mean the time when the employee-employer
relationship between the Participant and the Company or a Subsidiary is
terminated for any reason, with or without cause, including, but not by way of
limitation, a termination by resignation, discharge, death or retirement but
excluding terminations where there is a simultaneous re-employment by the
Company or a Subsidiary.
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ARTICLE II
GRANT OF OPTION
SECTION 2.1 - GRANT OF OPTION
For good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, on the date hereof, the Company irrevocably grants to the
Participant the option to purchase any part or all of an aggregate of
____________________ shares of its Common Stock upon the terms and conditions
set forth in this Agreement.
SECTION 2.2 - PURCHASE PRICE
The purchase price of the shares of Common Stock covered by the Option
shall be $__________ per share without commission or other charge.
SECTION 2.3 - NO RIGHT TO CONTINUED EMPLOYMENT
Nothing in this Agreement or in the Plan shall confer upon the Participant
any right to continue in the employ of the Company or any Subsidiary or shall
interfere with or restrict in any way the rights of the Company and its
Subsidiaries, which are hereby expressly reserved, to discharge the Participant
at any time for any reason whatsoever, with or without good cause.
SECTION 2.4 - ADJUSTMENTS IN OPTION
In the event that the outstanding shares of the Common Stock subject to the
Option are changed into or exchanged for a different number or kind of shares of
the Company or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, stock split-up, stock
dividend, combination of shares, rights offering, issuance of warrants or
otherwise, the Committee shall make a reasonable, appropriate and equitable
adjustment in the number and kind of shares as to which the Option, or portions
thereof then unexercised, shall be exercisable, to the end that after such event
the Participant's proportionate interest shall be maintained as before the
occurrence of such event. Such adjustment in the Option shall be made without
change in the total price applicable to the Option or the unexercised portion of
the Option (except for any change in the aggregate price resulting from rounding
off of share quantities or prices) and with any necessary corresponding
adjustment in the price per share of the shares of Common Stock covered by the
Option. Any such adjustment made by the Committee shall be final and binding
upon the Participant, the Company and all other interested persons.
2
<PAGE>
ARTICLE III
PERIOD OF EXERCISABILITY
SECTION 3.1 - COMMENCEMENT OF EXERCISABILITY
(a) The Option shall not become exercisable in whole or in part prior to
the expiration of the six-month period commencing after the Date of Grant.
(b) Subject to the other provisions of this Section 3.1, the Option
granted hereunder shall be exercisable in whole or in part as follows:
(i) 33 1/3% of the shares covered by the Option on ________, 199_;
(ii) an additional 33 1/3% of the shares covered by the Option
on _________, 199_; and (iii) the remaining 33 1/3% of the shares covered
by the Option on ________, 199_.
(c) Notwithstanding any other provisions of this Section 3.1, the Option
shall not be exercisable unless the holder thereof shall have been an Employee
of the Company or a Subsidiary for a period of at least six months prior to such
exercise; provided, however, that a Participant need not be an Employee at the
time of exercise.
SECTION 3.2 - DURATION OF EXERCISABILITY
The installments provided for in Section 3.1 are cumulative. Each such
installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.
SECTION 3.3 - EXPIRATION OF OPTION
The Option may not be exercised to any extent by anyone after the first to
occur of the following events:
(a) The expiration of one year from the date of the Participant's
Termination of Employment by reason of the Participant's death or
Disability; or
(b) The expiration of six years from the Date of Grant in the case
an Employee who is not an officer or director; or
(c) The expiration of five years from the Date of Grant in the case
of an Employee who is an officer or director; or
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<PAGE>
(d) The date of the Participant's Termination of Employment if such
Termination of Employment was for cause as reasonably determined by the
Board.
SECTION 3.4 - ACCELERATION OF EXERCISABILITY
(a) Notwithstanding Sections 2.4, 3.1(b) and 3.1(c) but subject to
Sections 3.1(a), 3.4(c) and 3.4(d), the Option, or any portion thereof,
granted under this Agreement that is not yet exercisable shall become
exercisable immediately prior to the occurrence of a merger or
consolidation of the Company with or into another corporation, the
acquisition by another corporation or person of all or substantially all of
the Company's assets or 80% or more of the Company's then outstanding
voting stock or the liquidation or dissolution of the Company (each, a
"Transaction"). At least ten days prior to the effective date of such
Transaction, the Company shall give the Participant holding the Option
notice of such event if the Option has not been fully exercised. During
this ten-day period, the Participant electing to exercise his or her
Options shall comply with all of the requirements of Sections 4.3 and 4.4
of this Agreement. In the event that such Transaction becomes effective,
the Option so exercised shall be deemed to have been exercised immediately
prior to the effective date of such Transaction. In the event that such
Transaction fails to transpire, the Participant's election under this
paragraph shall be of no effect and the Participant's Option shall remain
subject to the restrictions to which it was originally subject.
(b) In the event that a Transaction occurs, the Option, or any
portion thereof, that is not exercised prior to the occurrence of a
Transaction shall be cancelled, and the Participant holding such cancelled
Option shall receive in exchange therefor a cash payment equal to the
greater of (i) the Fair Market Value (as determined under Section 1.13 of
the Plan) of a share of Common Stock measured on the date immediately prior
to such Transaction less the per share exercise price set forth in the
Participant's Option, multiplied by the number of shares of Common Stock
purchasable under the Option; or (ii) the fair market value, as determined
by the Board in its reasonable discretion, of the cash, securities or other
consideration into which a share of Common Stock is to be exchanged
pursuant to the Transaction, less the exercise price set forth in the
Participant's Option, multiplied by the number of shares of Common Stock
purchasable under the Option.
(c) Notwithstanding the foregoing, Options that are not exercisable
on the date of a Transaction shall only become exercisable as described in
subsection (a) hereof or cancelled and settled for cash or other
consideration as described in subsection (b) hereof to the extent that such
exercise and issuance of shares of Common Stock or payment with respect to
the Participant continues to be deductible by the Company pursuant to
Section 280G of the Code. All determinations in applying this Section 3.4
shall be made by the Board in its reasonable discretion, and all such
determinations shall be final and binding on the Participant, the Company
and any interested party.
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<PAGE>
(d) Notwithstanding the foregoing, no such acceleration of
exercisability described in subsection (a) hereof or cancellation and
settlement described in subsection (b) hereof shall take place if:
(i) The Participant's Option becomes unexercisable under
Section 3.3; or
(ii) In connection with a Transaction, provision is made for an
assumption of the Participant's Option or a substitution therefor of a
new Option by the resulting or acquiring corporation or a parent or
subsidiary of such corporation under similar terms and conditions as
reflected in this Agreement.
ARTICLE IV
EXERCISE OF OPTION
SECTION 4.1 - PERSON ELIGIBLE TO EXERCISE
During the lifetime of the Participant, only the Participant may exercise
the Option or any portion thereof. After the death of the Participant, any
exercisable portion of the Option may, prior to the time when such portion
expires or becomes unexercisable under Sections 3.3 or 3.4, be exercised by his
personal representative or by any person empowered to do so under the deceased
Participant's will or under the then applicable laws of descent and
distribution.
SECTION 4.2 - PARTIAL EXERCISE
Any exercisable portion of the Option or the entire Option, if then wholly
exercisable, may be exercised in whole or in part at any time prior to the time
when the Option or portion thereof becomes unexercisable under Sections 3.3 or
3.4; provided, however, that each partial exercise shall be for not less than
100 shares (or the minimum installment set forth in Section 3.1, if a smaller
number of shares) and shall be for whole shares only.
SECTION 4.3 - MANNER OF EXERCISE
The Option, or any exercisable portion thereof, may be exercised solely by
delivery to the Director of Stockholder Relations of all of the following prior
to the time when the Option or such portion becomes unexercisable under Sections
3.3 or 3.4:
(a) Notice in writing signed by the Participant or other person then
entitled to exercise the Option or portion, stating that the Option or
portion is exercised, such notice complying with all applicable rules
established by the Committee and in such form as determined by the
Secretary of the Company; and
5
<PAGE>
(b) (i) Full payment (by check) for the shares with respect to
which the Option or portion is thereby exercised; or
(ii) Full payment by delivery to the Company of shares of the
Common Stock owned by the Participant duly endorsed for transfer to the
Company by the Participant or other person entitled to exercise the Option
or portion thereof, with a Fair Market Value on the date of delivery equal
to the purchase price of the shares with respect to which such Option or
portion thereof is thereby exercised; or
(iii) Full payment in any other form approved by the Committee,
consistent with applicable law and the Plan; or
(iv) Any combination of the consideration provided in the
foregoing subsections (i), (ii) and (iii); and
(c) In the event the Option or portion thereof shall be exercised
pursuant to Section 4.1 by any person or persons other than the
Participant, appropriate proof of the right of such person or persons to
exercise the Option or portion thereof.
SECTION 4.4 - CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES
(a) The Common Stock shall not be issued in respect of the Option
granted hereunder unless the exercise of the Option and the issuance and
delivery of shares of Common Stock pursuant thereto shall comply with all
relevant provisions of law, including the law of the Company's state of
incorporation, the Securities Act, the Exchange Act, the rules and
regulations thereunder and the requirements of any stock exchange upon
which the Common Stock may then be listed, and shall be further subject to
the approval of the Company's counsel with respect to such compliance.
(b) The Plan, this Agreement and the grant and exercise of the Option
to purchase shares of Common Stock hereunder, and the Company's obligation
to sell and deliver shares upon the exercise of rights to purchase shares,
shall be subject to all applicable federal and state laws, rules and
regulations, and to such approvals by any regulatory or governmental agency
which may, in the written opinion of counsel for the Company, be required.
SECTION 4.5 - RIGHTS AS STOCKHOLDER
The holder of the Option shall not be, nor have any of the rights or
privileges of, a stockholder of the Company in respect of any shares purchasable
upon the exercise of any part of the Option unless and until certificates
representing such shares shall have been issued by the Company to the holder.
6
<PAGE>
ARTICLE V
OTHER PROVISIONS
SECTION 5.1 - ADMINISTRATION
The Committee shall have the power to interpret the Plan and this Agreement
and to adopt such rules for the administration, interpretation and application
of the Plan as are consistent therewith and to interpret, amend or revoke any
such rules. All actions taken and all interpretations and determinations made by
the Committee reasonably and in good faith shall be final and binding upon the
Participant, the Company and all other interested persons. No member of the
Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Option, and
all members of the Committee shall be fully protected by the Company with
respect to any such action, determination or interpretation. In its absolute
discretion, the Board may at any time and from time to time exercise any and all
rights and duties of the Committee under the Plan and this Agreement, excepting
those rights and duties that may only be performed by a Committee of
Disinterested Directors under Rule 16b-3 of the Exchange Act.
SECTION 5.2 - OPTION SUBJECT TO TERMS OF PLAN
This Option Agreement and the rights of the Participant hereunder are
subject to all the terms and conditions of the Plan, as the same may be amended
from time to time, as well as to such rules and regulations as the Committee may
adopt for administration of the Plan. Any inconsistency between this Option
Agreement and the Plan shall be resolved in favor of the Plan.
SECTION 5.3 - OPTION NOT TRANSFERABLE
Neither the Option nor any interest or right therein or part thereof shall
be subject to the debts, contracts or engagements of the Participant or his
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that this Section 5.3
shall not prevent transfers by will or by the applicable laws of descent and
distribution.
SECTION 5.4 - NOTICES
Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of its Director of Stockholder
Relations, and any notice to be given to the Participant shall be addressed to
the Participant at the address given beneath his
7
<PAGE>
signature hereto. By a notice given pursuant to this Section 5.4, either party
may hereafter designate a different address for notices to be given to him. Any
notice which is required to be given to the Participant shall, if the
Participant is then deceased, be given to the Participant's personal
representative if such representative has previously informed the Company of his
status and address by written notice under this Section 5.4. Any notice shall be
deemed duly given when (i) enclosed in a properly sealed envelope or wrapper
addressed as aforesaid, deposited (with postage prepaid) in a post office or
branch post office regularly maintained by the United States Postal Service,
(ii) upon deposit with a private overnight delivery service guaranteeing next
day service, or (iii) upon receipt of a facsimile indicating confirmation of
receipt.
SECTION 5.5 - TAX WITHHOLDING
The Company shall be entitled to require payment or deduction from other
compensation payable to the Participant of any sums required by federal, state
or local tax law to be withheld with respect to the grant or exercise of the
Option or any portion thereof. The Participant may elect to have the Company
withhold shares of Common Stock (or allow the return of shares of Common Stock)
having a Fair Market Value equal to the sums required to be withheld. If the
Participant elects to advance such sums directly, written notice of that
election shall be delivered on or prior to such exercise and, whether pursuant
to such election or pursuant to a requirement imposed by the Company, payment by
check of such sums for taxes shall be delivered within two days after the date
of exercise. If the Participant elects to have the Company withhold shares of
Common Stock (or allow the return of shares of Common Stock) having a Fair
Market Value equal to the sums required to be withheld, the value of the shares
of Common Stock to be withheld (or returned as the case may be) will be equal to
the Fair Market Value of such shares on the date that the amount of tax to be
withheld is to be determined (the "Tax Date"). An election by the Participant to
have shares of Common Stock withheld for this purpose will be subject to the
following restrictions: (1) the election must be made on or prior to the Tax
Date; (2) the election must be irrevocable; (3) the election shall be subject to
the disapproval of the Committee; and (4) if the Participant is an officer of
the Company within the meaning of Section 16 of the Exchange Act, the election
shall be subject to such additional restrictions as the Committee may impose in
an effort to secure the benefits of any regulations thereunder. The Committee
shall not be obligated to issue shares to the Participant upon exercise of the
Option or portion thereof until such payment has been received or shares have
been so withheld, unless withholding (or offset against a cash payment) as of or
prior to the date of such exercise is sufficient to cover all such sums due or
which may be due with respect to such exercise.
SECTION 5.6 - LOANS
The Committee may, in its discretion, extend one or more loans to the
Participant in connection with the exercise or receipt of outstanding Options
granted under this Plan. The terms and conditions of any such loan shall be set
by the Committee and may include, in the Committee's discretion, loans that are
secured, unsecured, recourse or nonrecourse.
8
<PAGE>
SECTION 5.7 - COMPLIANCE WITH RULE 16b-3
With respect to persons subject to Section 16 of the Exchange Act,
transactions under this Agreement are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent
any provision of the Plan, this Agreement or action by the Committee fails to so
comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Committee.
SECTION 5.8 - TITLES
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.
SECTION 5.9 - CONSTRUCTION
This Agreement shall be administered, interpreted and enforced under the
laws of the State of Delaware.
IN WITNESS WHEREOF, the parties have caused this Option Agreement to be
executed to be effective as of the Date of Grant.
M.D.C. HOLDINGS, INC.
By:_______________________________
Name:__________________________
Title:_________________________
__________________________________
Employee's Signature
__________________________________
Print Name
__________________________________
__________________________________
Home Address
__________________________________
Social Security Number
9
<PAGE>
EXHIBIT
4.3(c)
Form of Director Non-Statutory Option
<PAGE>
M.D.C. HOLDINGS, INC.
DIRECTOR EQUITY INCENTIVE PLAN
NON-STATUTORY OPTION AGREEMENT
THIS AGREEMENT is made on and as of ______________, 19___ (the "Date of
Grant") between M.D.C. HOLDINGS, INC., a Delaware corporation (the "Company"),
and _______________________ (the "Eligible Director") pursuant to the provisions
of the Company's Director Equity Incentive Plan (the "Plan"). The parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall have
the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates. Capitalized terms not
otherwise defined in this Agreement shall have the meaning specified in the
Plan.
SECTION 1.1 - OPTION
"Option" shall mean the non-statutory option to purchase Common Stock, $.01
par value (the "Common Stock"), of the Company granted under this Agreement.
SECTION 1.2 - TERMINATION OF DIRECTORSHIP
"Termination of Directorship" shall mean the time when the Eligible
Director ceases to be a Director of the Company for any reason, with or without
cause, including, but not by way of limitation, a termination by resignation,
removal, death, retirement or failure to be re-elected by the Company's
stockholders.
ARTICLE II
GRANT OF OPTION
SECTION 2.1 - GRANT OF OPTION
In consideration of good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, on the date hereof, the Company
irrevocably grants to the Eligible Director
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the option to purchase any part or all of an aggregate of ______ shares of its
Common Stock upon the terms and conditions set forth in this Agreement.
SECTION 2.2 - PURCHASE PRICE
The purchase price of the shares of Common Stock covered by the Option
shall be $__________ per share without commission or other charge. (1)
SECTION 2.3 - NO RIGHT TO CONTINUED MEMBERSHIP ON THE BOARD
Nothing in this Agreement or in the Plan shall confer upon the Eligible
Director any right to continue as a Director of the Company or shall interfere
with or restrict in any way the rights of the Company and its stockholders,
which are hereby expressly reserved, to remove the Eligible Director at any time
for any reason whatsoever, with or without good cause.
SECTION 2.4 - ADJUSTMENTS IN OPTION
In the event that the outstanding shares of the Common Stock subject to the
Option are changed into or exchanged for a different number or kind of shares of
the Company or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, stock split-up, stock
dividend, combination of shares, rights offering, issuance of warrants or
otherwise, the Committee shall make an appropriate and equitable adjustment in
the number and kind of shares as to which all outstanding Options, or portions
thereof then unexercised, shall be exercisable, to the end that after such event
the optionee's proportionate interest shall be maintained as before the
occurrence of such event. Such adjustment in an outstanding Option shall be
made without change in the total price applicable to the Option or the
unexercised portion of the Option (except for any change in the aggregate price
resulting from rounding off of share quantities or prices) and with any
necessary corresponding adjustment in the Purchase Price per share.
ARTICLE III
PERIOD OF EXERCISABILITY
SECTION 3.1 - COMMENCEMENT OF EXERCISABILITY
The Option shall become exercisable six months after the Date of Grant.
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(1) The purchase price shall be 100% of the Fair Market Value of a share of
Common Stock on the Date of Grant.
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SECTION 3.2 - EXPIRATION OF OPTION
The Option may not be exercised to any extent by anyone after the first to
occur of the following events:
(a) The expiration of five years from the Date of Grant; or
(b) The expiration of one year from the date of the Director's
Termination of Directorship by reason of the Director's death; or
(c) The date of the Director's Termination of Directorship if such
Termination of Directorship was for cause as determined by the Board.
SECTION 3.3 - ACCELERATION OF EXERCISABILITY
(a) Notwithstanding the provisions in Section 7.3 of the Plan, but
subject to Sections 3.1, 3.3(c) and 3.3(d) hereof, the Option, or any
portion thereof, granted under this Agreement that is not yet exercisable
shall become exercisable immediately prior to the occurrence of a merger or
consolidation of the Company with or into another corporation, the
acquisition by another corporation or person of all or substantially all of
the Company's assets or 80% or more of the Company's then outstanding
voting stock or the liquidation or dissolution of the Company (each, a
"Transaction"). At least ten days prior to the effective date of such
Transaction, the Company shall give the Eligible Director holding the
Option notice of such event if the Option has not been fully exercised.
During this ten-day period, the Director electing to exercise his or her
Options shall comply with all of the requirements of Sections 4.3 and 4.4
of this Agreement. In the event that such Transaction becomes effective,
the Option so exercised shall be deemed to have been exercised immediately
prior to the effective date of such Transaction. In the event that such
Transaction fails to transpire, the Director's election under this
paragraph shall be of no effect and the Director's Option shall remain
subject to the restrictions to which it was originally subject.
(b) In the event that a Transaction occurs, the Option, or any
portion thereof, that is not exercised prior to the occurrence of a
Transaction shall be cancelled, and the Director holding such cancelled
Option shall receive in exchange therefor a cash payment equal to the
greater of (i) the Fair Market Value (as determined under Section 1.9 of
the Plan) of a share of Common Stock measured on the date immediately prior
to such Transaction less the per share exercise price set forth in the
Director's Option, multiplied by the number of shares of Common Stock
purchasable under the Option; or (ii) the fair market value, as determined
by the Board, of the cash, securities or other consideration into which a
share of Common Stock is to be exchanged pursuant to the Transaction, less
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the exercise price set forth in the Director's Option, multiplied by the
number of shares of Common Stock purchasable under the Option.
(c) Notwithstanding the foregoing, Options that are not exercisable
on the date of a Transaction shall only become exercisable as described in
subsection (a) hereof or cancelled and settled for cash or other
consideration as described in subsection (b) hereof to the extent that such
exercise and issuance of shares of Common Stock or payment with respect to
the Director continues to be deductible by the Company pursuant to
Section 280G of the Code. All determinations in applying this Section 3.3
shall be made by the Board, and all such determinations shall be final and
binding on the Director, the Company and any interested party.
(d) Notwithstanding the foregoing, no such acceleration of
exercisability described in subsection (a) hereof or cancellation and
settlement described in subsection (b) hereof shall take place if:
(i) The Director's Option becomes unexercisable under
Section 3.2; or
(ii) In connection with a Transaction, provision is made for an
assumption of the Director's Option or a substitution therefor of a
new Option by the resulting or acquiring corporation or a parent or
subsidiary of such corporation under similar terms and conditions as
reflected in this Agreement.
ARTICLE IV
EXERCISE OF OPTION
SECTION 4.1 - PERSON ELIGIBLE TO EXERCISE
During the lifetime of the Eligible Director, only he may exercise the
Option or any portion thereof. After the death of the Eligible Director, any
exercisable portion of the Option may, prior to the time when such portion
expires or becomes unexercisable under Sections 3.2 or 3.3, be exercised by his
personal representative or by any person empowered to do so under the deceased
Eligible Director's will or under the then applicable laws of descent and
distribution.
SECTION 4.2 - PARTIAL EXERCISE
Any exercisable portion of the Option or the entire Option, if then wholly
exercisable, may be exercised in whole or in part at any time prior to the time
when the Option or portion thereof becomes unexercisable under Sections 3.2 or
3.3; provided, however, that each partial exercise shall be for not less than
100 shares and shall be for whole shares only.
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SECTION 4.3 - MANNER OF EXERCISE
The Option, or any exercisable portion thereof, may be exercised solely by
delivery to the Director of Stockholder Relations of all of the following prior
to the time when the Option or such portion becomes unexercisable under Sections
3.2 or 3.3:
(a) Notice in writing signed by the Eligible Director or other person
then entitled to exercise the Option or portion, stating that the Option or
portion thereof is exercised, such notice complying with all applicable
rules established by the Committee and in such form as determined by the
Secretary of the Company; and
(b) (i) Full payment (by check) for the shares with respect to which
the Option or portion is thereby exercised; or
(ii) Subject to the Committee's consent, full payment by
delivery to the Company of shares of the Common Stock owned by the Eligible
Director duly endorsed for transfer to the Company by the Eligible Director
or other person entitled to exercise the Option or portion thereof, with a
Fair Market Value on the date of delivery equal to the Option price of the
shares with respect to which such Option or portion thereof is thereby
exercised; or
(iii) Any combination of the consideration provided in the
foregoing subsections (i) and (ii); and
(c) In the event the Option or portion thereof shall be exercised
pursuant to Section 4.1 by any person or persons other than the Eligible
Director, appropriate proof of the right of such person or persons to
exercise the Option or portion thereof.
SECTION 4.4 - CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES
(a) The Common Stock shall not be issued in respect of the Option
granted hereunder unless the exercise of the Option and the issuance and
delivery of shares of Common Stock pursuant thereto shall comply with all
relevant provisions of law, including the law of the Company's state of
incorporation, the Securities Act, the Exchange Act, the rules and
regulations thereunder and the requirements of any stock exchange upon
which the Common Stock may then be listed, and shall be further subject to
the approval of the Company's counsel with respect to such compliance.
(b) The Plan, this Agreement and the grant and exercise of the Option
to purchase shares of Common Stock hereunder, and the Company's obligation
to sell and deliver shares upon the exercise of rights to purchase shares,
shall be subject to all applicable federal and state laws, rules and
regulations, and to such approvals by any
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regulatory or governmental agency which may, in the opinion of counsel for
the Company, be required.
SECTION 4.5 - RIGHTS AS STOCKHOLDER
The holder of the Option shall not be, or have any of the rights or
privileges of, a stockholder of the Company in respect of any shares purchasable
upon the exercise of any part of the Option unless and until certificates
representing such shares shall have been issued by the Company to the holder.
ARTICLE V
OTHER PROVISIONS
SECTION 5.1 - ADMINISTRATION
The Committee shall have the power to interpret the Plan and this Agreement
and to adopt such rules for the administration, interpretation and application
of the Plan as are consistent therewith and to interpret, amend or revoke any
such rules. All actions taken and all interpretations and determinations made
by the Committee in good faith shall be final and binding upon the Eligible
Director, the Company and all other interested persons. No member of the
Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Option, and
all members of the Committee shall be fully protected by the Company with
respect to any such action, determination or interpretation. In its absolute
discretion, the Board may at any time and from time to time exercise any and all
rights and duties of the Committee under the Plan and this Agreement.
SECTION 5.2 - OPTION SUBJECT TO TERMS OF PLAN
This Option Agreement and the rights of the Eligible Director hereunder are
subject to all the terms and conditions of the Plan, as the same may be amended
from time to time, as well as to such rules and regulations as the Committee may
adopt for administration of the Plan. In the event of any inconsistency between
this Option Agreement and the Plan, the Plan shall control.
SECTION 5.3 - OPTION NOT TRANSFERABLE
Neither the Option nor any interest or right therein or part thereof shall
be subject to the debts, contracts or engagements of the Eligible Director or
his successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect;
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provided, however, that this Section 5.3 shall not prevent transfers by will or
by the applicable laws of descent and distribution.
SECTION 5.4 - NOTICES
Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of its Director of Stockholder
Relations, and any notice to be given to the Eligible Director shall be
addressed to the director at the address on the signature page hereto. By a
notice given pursuant to this Section 5.4, either party may hereafter designate
a different address for notices. Any notice which is required to be given to
the Eligible Director shall, if the Eligible Director is then deceased, be given
to the Eligible Director's personal representative if such representative has
previously informed the Company of his status and address by written notice
under this Section 5.4. Any notice shall be deemed duly given when enclosed in
a properly sealed envelope or wrapper addressed as aforesaid, deposited (with
postage prepaid) in a post office or branch post office regularly maintained by
the United States Postal Service.
SECTION 5.5 - TAX WITHHOLDING
The Company shall be entitled to require payment or deduction from other
compensation payable to the Eligible Director of any sums required by federal,
state or local tax law to be withheld with respect to the Option or any portion
thereof. The Eligible Director may elect to have the Company withhold shares of
Common Stock (or allow the return of shares of Common Stock) having a Fair
Market Value equal to the sums required to be withheld. If the Eligible
Director elects to advance such sums directly, written notice of that election
shall be delivered on or prior to such exercise and, whether pursuant to such
election or pursuant to a requirement imposed by the Company, payment by check
of such sums for taxes shall be delivered within two days after the date of
exercise. If the Eligible Director elects to have the Company withhold shares
of Common Stock (or allow the return of shares of Common Stock) having a Fair
Market Value equal to the sums required to be withheld, the value of the shares
of Common Stock to be withheld (or returned as the case may be) will be equal to
the Fair Market Value of such shares on the date that the amount of tax to be
withheld is to be determined (the "Tax Date"). An election by the Eligible
Director to have shares of Common Stock withheld for this purpose will be
subject to the following restrictions: (1) the election must be made on or
prior to the Tax Date; (2) the election must be irrevocable; (3) the election
shall be subject to the disapproval of the Committee; and (4) the election shall
be subject to such additional restrictions as the Committee may impose in an
effort to secure the benefits of any regulations under Section 16 of the
Exchange Act. The Committee shall not be obligated to issue shares to the
Eligible Director upon exercise of the Option or portion thereof until such
payment has been received or shares have been so withheld, unless withholding
(or offset against a cash payment) as of or prior to the date of such exercise
is sufficient to cover all such sums due or which may be due with respect to
such exercise.
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SECTION 5.6 - COMPLIANCE WITH RULE 16b-3
With respect to persons subject to Section 16 of the Exchange Act,
transactions under this Agreement are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the
extent any provision of the Plan, this Agreement or action by the Committee
fails to so comply, it shall be deemed null and void, to the extent permitted by
law, and deemed advisable by the Committee.
SECTION 5.7 - TITLES
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.
SECTION 5.8 - CONSTRUCTION
This Agreement shall be administered, interpreted and enforced under the
laws of the State of Delaware.
IN WITNESS WHEREOF, the parties have caused this Option Agreement to be
executed as of the Date of Grant.
M.D.C. HOLDINGS, INC.
By: ________________________________________
Name: __________________________________
Title: _________________________________
Director's Signature
(Print Name)
Address
Taxpayer Identification Number
or Social Security Number
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EXHIBIT
4.5
Non-Qualified Stock Option Agreement, as amended
<PAGE>
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION AGREEMENT (the "Agreement") is made as of
the 4th day of February, 1991, between M.D.C. Holdings, Inc., a Delaware
corporation (the "Corporation") which, unless the context otherwise requires,
shall include the Corporation and its subsidiaries), and David D. Mandarich (the
"Consultant").
In accordance with its 1983 Non-Qualified Stock Option Plan, as amended
(the "Plan"), the Corporation desires to provide the Consultant, in connection
with the services of the Consultant, with an opportunity to acquire shares of
the Corporation's Common Stock, $.01 par value (the "Common Stock"), on
favorable terms and thereby increase the Consultant's proprietary interest in
the continued progress and success of the business of the Corporation.
NOW, THEREFORE, in consideration of the mutual covenants herein set forth
and other good and valuable consideration, the receipt and sufficiency of which
hereby is acknowledged, the Corporation and the Consultant agree as follows:
1. CONFIRMATION OF GRANT OF OPTION. Pursuant to a determination of the
Board of Directors of the Corporation (the "Board") made as of February 4, 1991
(the "Date of Grant"), the Corporation, subject to the terms of the Plan and of
this Agreement, confirms that the Consultant has been granted on the Date of
Grant, as a matter of a separate
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inducement and agreement and in addition to, and not in lieu of, salary or other
compensation for services, the right to purchase (the "Option") an aggregate of
250,000 shares of Common Stock on the terms and conditions herein set forth,
subject to adjustment as provided in Section 8 of this Agreement.
2. PURCHASE PRICE. The purchase price of the shares of Common Stock
covered by this Option will be $.8125 per share (the "Option Price"), which was
the fair market value of share of Common Stock on the Date of Grant. The
Option Price is subject to adjustment as provided in Section 8 of this
Agreement.
3. EXERCISE OF OPTION. Except, as provided in Sections 6, 7 and 8 of this
Agreement, this Option may be exercised as to 1/3 of the number of shares of
Common Stock covered hereby commencing on August 5, 1991, as to an additional
1/3 of such number of shares on February 4, 1992 and as to the remaining 1/3 of
the number of such shares of Common Stock on February 4, 1993; provided that
this Option shall not be exercisable (i) after the expiration of the term of
this Option; and (ii) unless the Consultant, at the time of exercise, shall have
been employed by the Corporation for a period of a minimum of three months.
This Option may be exercised only as to whole shares.
This Option may be exercised, as provided in this Section 3, by notice
and payment to the Corporation as provided in Sections 10 and 11 of this
Agreement.
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4. TERM OF OPTION. The term of this Option will be a period of five years
from the Date of Grant, subject to earlier termination or cancellation as
provided in this Agreement.
The holder of this Option will not have any right to dividends or any
other right of a stockholder with respect to the shares of Common Stock subject
to this Option until such shares shall have been issued to the Consultant upon
the exercise of this Option and the consummation of the purchase of such shares
(as evidenced by the records of the transfer agent of the Corporation);
provided that the date of issue shall not be earlier than the Closing Date (as
defined in Section 10 of this Agreement).
5. NON-TRANSFERABILITY OF OPTION. This Option may be exercised during the
lifetime of the Consultant only by the Consultant. Without limiting the
generality of the foregoing, this Option may not be assigned, transferred or
otherwise disposed of, or pledged or hypothecated in any manner (whether by
operation of law or otherwise), and shall not be subject to execution,
attachment or other process. Any assignment, transfer, pledge, hypothecation or
other disposition of this Option or any attempt to make any such levy of
execution, attachment or other process will cause this Option to terminate
immediately, if the Board, in its sole discretion, so elects at any time
thereafter. Written notice of such election by the Board will be given to the
Consultant or to the person then entitled to exercise this
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Option; provided that any such termination of this Option under the provisions
of this Section 5 will not prejudice any rights or remedies which the
Corporation may have under this Agreement or otherwise.
6. EXERCISE UPON CESSATION OF EMPLOYMENT. If the Consultant ceases to be
an employee, officer or director of, or a consultant to the Corporation for any
reason whatsoever (except as provided in Section 7 of this Agreement), this
Option nonetheless may be exercised at any time prior to the termination of this
Option, unless the Consultant is terminated or dismissed for cause, in which
case this Option shall terminate immediately.
The termination of this Option by reason of cessation of services to
the Corporation shall be without prejudice to any right or remedy which the
Corporation may have against the holder.
7. EXERCISE UPON DEATH OR DISABILITY. If the Consultant dies, the
Consultant's executor, administrator, personal representative or other person
entitled by law to the Consultant's rights may exercise this Option (to the
extent exercisable on the date of death) at any time within one year after
death (but in no event after the Option expires).
If the Consultant becomes disabled within the meaning of Section
105(d)(4) of the Code, and this Option has not yet expired, the Consultant may
exercise this Option (in full) at any time within one year after leaving the
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employment of the Corporation (but in no event after this Option expires).
8. ADJUSTMENTS. In the event of a stock dividend, stock split-up, share
combination, exchange of shares, recapitalization, merger, consolidation,
acquisition or disposition of property or shares, reorganization, liquidation or
other similar changes or transactions, of or by the Corporation, the Board shall
make (or shall undertake to have the Board of Directors of any corporation which
merges with, or acquires the stock or assets of, the Corporation make) such
adjustment of the number and class of shares then covered by this Option, or of
the Option Price, or both as it, in its sole judgment, shall deem appropriate to
give proper effect to such event; provided that no such adjustment shall be made
so as to constitute a modification, extension or renewal of this Option within
the meaning of that term as set forth in Section 425(h) of the Internal Revenue
Code of 1986, as amended (the "Code"), or so as to prevent the Corporation or
any other corporation or a subsidiary thereof from being a corporation issuing
or assuming this Option in a transaction to which Section 425(a) of the Code
applies.
9. REGISTRATION. If the Corporation in its sole discretion so elects, it
may register the Common Stock purchasable upon the exercise of this Option under
the Securities Act of 1933, as amended (the "Securities Act"). In the absence of
such an election, the Consultant understands
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that neither this Option nor the shares of Common Stock subject thereto and
issuable upon the exercise thereof will be registered under the Securities Act
and, therefore, will be "restricted securities" as that term is defined in Rule
144 under the Securities Act and the certificates issued to evidence the shares
purchased under this Option will bear a legend, substantially as set forth in
Section 15 of this Agreement, restricting the transfer thereof. The Consultant
hereby represents that this Option is being acquired, and the shares of Common
Stock which will be acquired pursuant to the exercise of this Option will be
acquired by the Consultant for investment.
10. METHOD OF EXERCISE OF OPTION. Subject to the terms and conditions of
this Agreement, this Option will be exercisable by notice and payment to the
Corporation in accordance with the procedure set forth in this Section 10. Each
such notice shall:
(a) state the election of the Consultant to exercise this Option and
the number of whole shares of Common Stock in respect of which it is being
exercised;
(b) contain a representation and agreement as to the Consultant's
investment intent with respect to such shares in a form satisfactory to the
Corporation's counsel, unless a current Prospectus meeting the requirements of
Section 10(a)(3) of the Securities Act is in effect for the shares of Common
Stock being purchased pursuant to the exercise of this Option; and
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(c) be signed by the person or persons entitled to exercise this
Option, and if this Option is being exercised other than by the Consultant, be
accompanied by proof, satisfactory to counsel for the Corporation, of the right
of such person or persons to exercise this Option.
Upon receipt of such notice, the Corporation will specify, by written
notice to the person or persons exercising this Option, a date and time (the
"Closing Date") and place for payment of the full purchase price of such shares.
The Closing Date will not be more than 15 days after the date of notice of
exercise is received by the Corporation unless another date is agreed upon by
the Corporation and the persons exercising this Option or is required upon
advice of counsel for the Corporation in order to meet the requirements of
Section 12 of this Agreement.
Payment of the purchase price for the shares of Common Stock with
respect to which this Option shall be exercised will be made by such person or
persons at the place specified by the Corporation on or before the Closing Date
by delivering to the Corporation a certified or bank cashier's check payable to
the order of the Corporation. This Option will be deemed to have been exercised
with respect to any particular shares of Common Stock if, and only if, the
preceding provisions of this Section 10 and the provisions of Section 12 of this
Agreement shall have been complied with, in which event this Option will be
deemed to have been exercised on the Closing Date. Notwithstanding anything in
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this Agreement to the contrary, any notice of exercise given pursuant to the
provisions of this Section 10 will be void and of no effect if all the
preceding provisions of this Section 10 and the provisions of Section 12 of
this Agreement shall not have been complied with. The certificate or
certificates for the shares of Common Stock as to which this Option shall be
exercised may be registered only in the name of the Consultant (or if the
Consultant so requests in the notice exercising this Option, jointly in the name
of the Consultant and with a member of the Consultant's family, with right of
survivorship) and will be delivered on the Closing Date to the Consultant at the
place specified for the closing, but only upon compliance with all of the
provisions of this Agreement.
11. NOTICES. Each notice relating to this Agreement must be in writing
and delivered in person or by certified mail to the proper address. All notices
to the Corporation shall be addressed to it at its office at 3600 South Yosemite
Street, Suite 900, Denver, Colorado 80237, Attention: Corporate Secretary. All
notices to the Consultant or other person or persons then entitled to exercise
this Option shall be addressed to the Consultant or such other person or persons
at the Consultant's address below specified. Anyone to whom a notice may be
given under this Agreement may designate a new address by notice to that effect.
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12. APPROVAL OF COUNSEL. The exercise of this Option and the issuance and
delivery of shares of Common Stock pursuant to such exercise shall be subject to
approval by the Corporation's counsel of all legal matters in connection
therewith, including compliance with the requirements of the Securities Act and
the Securities Exchange Act of 1934 and the rules and regulations, respectively,
thereunder, and the requirements of any stock exchange upon which the Common
Stock may then be listed.
13. RESERVATION OF SHARES. The Corporation, at all times during the term
of this Option, shall reserve and keep available such number of shares of the
class of stock then subject to this Option as will be sufficient to satisfy the
requirements of this Agreement.
14. LIMITATION OF ACTION. The Consultant acknowledges that every right
of action accruing to the Consultant and arising out of or in connection with
the Plan or this Agreement against the Corporation, irrespective of the place
where an action may be brought, will cease and be barred by the expiration of
three years from the date of the act or omission in respect of which such right
of action is alleged to have arisen.
15. RESALE OF COMMON STOCK. In the absence of an effective Prospectus
meeting the requirements of Section 10(a)(3) under the Securities Act, upon
any sale or transfer of the Common Stock purchased pursuant to the exercise of
this Option, the Consultant shall deliver to the Corporation
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an opinion of counsel satisfactory to the Corporation to the effect that the
sale or transfer of the Common Stock does not violate any provision of the
Securities Act or the Securities Exchange Act of 1934, and the certificates
for the shares issued upon exercise of this Option will bear, in that event,
the following legend:
The shares represented by this Certificate have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are
"restricted securities" as that term is defined in Rule 144 under the Act.
The shares may not be offered for sale, sold or otherwise transferred
except pursuant to an effective registration statement under the Act or
pursuant to an exemption from registration under the Act, the availability
of which is to be established to the satisfaction of the Company.
16. BENEFITS OF AGREEMENT. This Agreement will inure to the benefit of,
and be binding upon, each successor and assign of the Corporation. All
obligations imposed upon the Consultant and all rights granted to the
Corporation under this Agreement will be binding upon the Consultant's heirs,
legal representatives and successors.
17. GOVERNMENTAL AND OTHER REGULATIONS. The exercise of this Option and
the Corporation's obligation to sell and deliver shares upon the exercise of
rights to purchase shares is subject to all applicable federal and state laws,
rules and regulations, and to such approvals by any regulatory or governmental
agency which, in the opinion of counsel for the Corporation, may be required.
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IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed in its name by its President or Vice President and its corporate seal
to be hereunto affixed and attested by its Secretary or one of its Assistant
Secretaries and the Consultant has hereunto set such Consultant's hand and seal,
all as of the date first above written.
M.D.C. HOLDINGS, INC.
By: /s/ Spencer I. Browne
[SEAL] ----------------------
Spencer I. Browne,
President and Chief
Operating Officer
/s/ Paris G. Reece III
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Paris G. Reece III,
Secretary
-------------------------
(Signature)
-------------------------
-------------------------
(Address of Consultant)
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AMENDMENT TO NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AMENDMENT (the "Amendment") to Non-Qualified Stock Option Agreement
(the "Agreement") is made as of the 17th day of June 1994 between M.D.C.
Holdings, Inc., a Delaware corporation (the "Corporation") which, unless the
context otherwise requires, shall include the Corporation and its subsidiaries,
and David D. Mandarich ("Mandarich").
Unless defined herein, capitalized terms used in this Amendment shall have
the same meanings ascribed to those terms in the Agreement, a copy of which is
attached hereto.
The Agreement recites that Mandarich was granted 250,000 Options in
accordance with the Company's 1983 Stock Option Plan (the "Plan").
Notwithstanding that recital, the Options were not granted pursuant to the Plan
but rather were granted pursuant to the Agreement and the Consulting Agreement
dated April 6, 1989 between the Corporation and Mandarich (the "Consulting
Agreement").
NOW THEREFORE, in consideration of the mutual covenants herein set forth
and other good and valuable consideration the receipt and sufficiency of which
hereby are acknowledged, the Corporation and Mandarich agree as follows:
1. Notwithstanding anything in the Agreement to the contrary, the Options
were not granted pursuant to the Plan; rather, the Options were
granted pursuant to the Agreement and the Consulting Agreement.
2. Notwithstanding Section 1. of this Amendment, if necessary to
determine the parties' rights, duties and obligations pursuant to the
Agreement, the Corporation and Mandarich agree that the terms of the
Plan may be referred to as if the Options had been issued in
accordance with the Plan.
3. In the event of a conflict between this Amendment and the Agreement,
the terms of this Amendment shall control. Except as amended hereby,
all terms, conditions and provisions of the Agreement shall remain in
full force and effect.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed in its name by its president or vice president and its corporate seal
to be hereunto affixed and attested by its secretary or one of its assistant
secretaries and Mandarich has hereunto set his hand, all to be effective as of
the date first above written.
M.D.C. Holdings, Inc.
By:________________________________
Spencer I. Browne
President and Chief Operating Officer
<PAGE>
SEAL:
________________________________
Paris G. Reece III
Secretary
________________________________
David D. Mandarich
<PAGE>
EXHIBIT
5
Opinion of Daniel S. Japha, Esq. as to
legality of securities being registered
<PAGE>
July 1, 1994
M.D.C. Holdings, Inc.
3600 South Yosemite Street, Suite 900
Denver, CO 80237
Ladies and Gentlemen:
M.D.C. Holdings, Inc. (the "Company") has filed with the Securities and
Exchange Commission a Registration Statement (the "Registration Statement") on
Form S-8 (No. 33- ___), which relates to the registration of 3,154,000 Shares of
the $.01 par value, stock of the Company (the "Shares") which may be issued to
employees, officers and directors of the Company and its subsidiaries in
accordance with the Company's Employee Equity Incentive Plan (the "Employee
Plan"), the Company's Director Equity Incentive Plan (the "Director Plan") and
in accordance with a Non-Statutory Stock Option (the "Non-Statutory Option")
granted by the Company.
I have examined such corporate records of the Company and such other
documents as I have deemed appropriate to render this opinion.
Based on the foregoing, I am of the opinion that the Shares, when sold and
issued as contemplated in the Registration Statement and pursuant to the
Employee Plan, Director Plan or the Non-Statutory Option, will be legally issued
(subject to compliance with applicable federal and state securities laws), fully
paid and non-assessable.
I hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement.
Yours very truly,
Daniel S. Japha
General Counsel-Corporate
DSJ/df
<PAGE>
EXHIBIT
23.1
Consent of Price Waterhouse, Certified Public Accountants
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of M.D.C. Holdings, Inc. of our report dated February 10,
1994, which appears on page F-2 of M.D.C. Holdings Inc.'s Annual Report on Form
10-K for the year ended December 31, 1993.
/s/ Price Waterhouse
PRICE WATERHOUSE
Los Angeles, California
June 27, 1994
