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Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
M.D.C. HOLDINGS, INC.
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(Exact Name of issuer as specified in its charter)
DELAWARE 84-0622967
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(State of Incorporation) (I.R.S. Employer Identification No.)
3600 S. Yosemite Street, Suite 900, Denver, Colorado 80237
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(Address of Principal Executive Offices) (Zip Code)
M.D.C. HOLDINGS, INC. 401(k) SAVINGS PLAN
(Full Title of the Plan)
Daniel S. Japha, Esq.
Secretary and General Counsel - Corporate
M.D.C. Holdings, Inc.
3600 S. Yosemite Street
Suite 900
Denver, Colorado 80237
(303) 773-1100
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(Name, address and telephone
number of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
Title of Maximum Aggregate Proposed Maximum Proposed Amount of
Securities to be No. of Shares to Offering Price Maximum Aggregate Registration
Registered be Registered Per Share(1) Offering Price (1) Fee
- ---------------- ----------------- ---------------- ------------------ ------------
<S> <C> <C> <C> <C>
Common Stock,
$.01 Par Value 1,500,000(2) $8.625 $12,750,000 $3,920.45
</TABLE>
(1) The shares registered hereunder are to be offered at an offering price not
presently determinable. Pursuant to Rule 457(c), the offering price is
estimated solely for the purposes of calculating the registration fee and is
based on the average of the high and low prices of the Company's common stock
reported on the New York Stock Exchange on February 19, 1997.
(2) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration also covers an indeterminate number of shares to be offered or sold
pursuant to the employee benefit plan described above.
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This document constitutes part
of a prospectus covering securities
that have been registered under
the Securities Act of 1933.
M.D.C. HOLDINGS, INC. 401(k) SAVINGS PLAN
Prospectus
February 21, 1997
GENERAL PLAN INFORMATION
This Prospectus contains information about the M.D.C. Holdings, Inc. 401(k)
Savings Plan (the "Plan"). A Registration Statement on Form S-8 with respect to
the securities covered hereby has been filed by M.D.C. Holdings, Inc. (the
"Company") under the Securities Act of 1933. This Prospectus covers the
issuance, purchase and sale of shares of common stock, $.01 par value, of the
Company ("MDC Stock") under the Plan. The purposes of the Plan are to enable
eligible employees to share in the risks and potential rewards of owning the
Company's stock and to gain a measure of economic security for retirement.
Capitalized terms used but not defined herein shall have the meanings given
to such terms in the Plan. While an effort has been made to describe the
complicated provisions of the Plan accurately, if any conflict exists between
this Prospectus and the Plan documents, the official Plan documents will always
be followed in the actual determination of an employee's benefits.
The Plan is a qualified plan subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") and Sections 401(a), 401(k) and
401(m) of the Internal Revenue Code of 1986, as amended (the "Code").
ELIGIBLE EMPLOYEES
To be eligible to participate in the Plan, a person must be 21 years of
age and have 12 months of service (in which such person worked at least 1,000
hours). Persons not eligible to participate in the Plan are (1) employees
covered by any collective bargaining agreement with the Company; (2) persons
who are not citizens or resident aliens of the United States and who receive
no earned income within the meaning of Section 911(d)(2) of the Code from the
Company that constitutes income from sources within the United States within
the meaning of Section 861(a)(3) of the Code, or (3) any leased employee
within the meaning of Section 414(n) of the Code.
An eligible employee may participate in the Plan as of any January 1,
April 1, July 1 or October 1 following the date on which the person becomes
an eligible employee. An eligible employee may join the Plan by filing an
enrollment form,
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including a Salary Deferral Agreement provided by the Plan Administrator that:
- directs that a permitted portion of the Participant's Compensation
shall be allocated as a contribution under the Plan;
- designates an amount of the Participant's Before-Tax Contribution, if
any; and
- specifies how employee contributions and employer contributions, if
any, should be invested.
The employee may name beneficiaries to receive benefits payable upon the
death of the employee. The employee must receive the consent of the employee's
surviving spouse to designate any beneficiary other than, or in addition to, the
spouse. If no beneficiary is named, the Participant's surviving spouse will
receive all benefits payable under the Plan.
CONTRIBUTIONS
A Participant may contribute any whole percentage, of not more than 15% of
the Participant's Compensation per pay period as a Before-Tax Contribution,
subject to certain limitations set forth in the Plan. The sum of Before-Tax
Contributions to the Plan or another plan with a deferred arrangement may not
exceed $9,500.00 in calendar year 1997. This amount may be adjusted by the
Secretary of the Treasury pursuant to Section 402(g) of the Code.
Effective as of the first day of January, April, July or October, a
Participant may elect to change the Participant's rate of Before-Tax
Contributions. An election to change the Participant's rate of Contributions
shall be effective with the first day of the payroll period beginning coincident
with or after the applicable date. An employee must give the Plan Administrator
15 days' advance notice before a change in the rate of Contribution is to be
effective in accordance with such advance notice requirements as may be
established from time to time by the Plan Administrator. A Participant may
elect to suspend all Before-Tax Contributions at any time by notifying the Plan
Administrator. Such suspension period may extend indefinitely. Contributions
may be resumed on the January 1, April 1, July 1 or October 1 following the
expiration of the suspension period.
The Company may make a Discretionary Matching Contribution based on the
amount contributed by the employee as an Elective Deferral Contribution.
However, the amount of contribution may vary from year to year. The Company may
make all or a portion of Discretionary Matching Contributions in the form of
shares of MDC common stock. In order for an employee to participate in the
Discretionary Matching Contribution, the employee must be a Participant in the
Plan on the last day of the Plan
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year.
The Plan Administrator may authorize the Trustee to accept "rollover
contributions" from eligible employees. A direct rollover is a voluntary,
direct transfer of assets to the Plan from another qualified retirement plan
that is nontaxable under the Code. Contributions from a retirement plan
established by a former employer may be rolled over to a Participant's account
under the Plan either directly or through an individual retirement account,
subject to certain limitations established in the Plan.
Participants will receive quarterly reports describing the activity in
their accounts for the preceding quarter as well as their account balances at
the end of each quarter. In addition, after initiating a transaction on the
Company's AnswerLine, Participant's will receive a transaction confirmation
statement.
INVESTMENT OF FUNDS
Contributions to the Plan may be invested by a Participant in whole
percentages in any one or more of the following:
MDC Common Stock Fund
Guaranteed Long Term Account
Guaranteed Short Term Account
Balanced Fund Account
Stock Market Index Account
Income and Growth Account
Growth Opportunities Account
A Participant may change the Participant's investment directions for
contributions and any employer contributions at any time by contacting the
Company's AnswerLine. A change in investment directions shall be effective
immediately following the investment direction change.
The Company's AnswerLine Service allows a Participant to make changes to
retirement investments, obtain information on a Participant's Account and model
and request a loan. The AnswerLine Service permits the Participant to change
the way future contributions are invested, transfer dollars already in the
Participant's Account among available investment funds and obtain immediate
access to information about a retirement savings account. In addition, a
Participant may use the AnswerLine to initiate a loan transaction by creating
various loan repayment models based on the amount to be borrowed and the term of
the loan. Written confirmation of each transaction will be transmitted directly
to the Participant once the transaction has been processed.
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TAX EFFECTS
INTRODUCTION
The following summary of the principal federal income tax consequences of
participation in the Plan for the typical Participant is based on the pertinent
provisions of the Code, the applicable Treasury Regulations ("Regulations"), and
judicial and administrative interpretations of the Code and Regulations. Each
Participant should be aware that the Code, Regulations and such interpretations
are subject to change and that such changes may be applied retroactively. The
following is a discussion of the major federal income tax consequences of
participation in the Plan for the typical Plan Participant. The discussion does
not cover foreign, state, local or other tax consequences of participation in
the Plan. Moreover, the tax effects of participation in the Plan may vary
depending on the facts and circumstances pertaining to each Participant. Each
Participant should consult the Participant's own tax advisor concerning the tax
consequences of participation in the Plan to the Participant.
CONTRIBUTIONS TO THE PLAN
A Participant's Before-Tax Contributions ordinarily will not be taxed
immediately as ordinary income so long as the Plan remains qualified under
Sections 401(a) and 401(k) of the Code. However, a Participant's Before-Tax
Contribution will be subject to Social Security taxes. In addition, if a
portion of a Participant's Before-Tax Contributions are distributed to the
Participant from the Plan to satisfy the discrimination requirements of Code
Sections 401(k) or 401(m), or to satisfy the limits of Code Sections 415 or
402(g), such amounts will be currently taxable to the Participant. The 10%
penalty tax (described below) will not apply to such corrective distributions.
A Participant will not be taxed immediately on the Company's contributions
to the Plan on the Participant's behalf or on dividends or other income received
by the Trustee under the Plan that are credited to the Participant's Accounts so
long as the Plan remains qualified under Section 401(a) of the Code. However,
as described below, the Participant will be taxed on these amounts when they are
actually distributed to the Participant.
WITHDRAWAL FROM BEFORE-TAX CONTRIBUTION ACCOUNTS OR ROLLOVER CONTRIBUTION
ACCOUNTS
While employed by the Company, an employee has limited access to the
amounts held in the Participant's Plan Account. If a Participant withdraws
amounts from the Participant's Before-Tax Contribution Account or Rollover
Contribution Account (as set forth in the Plan documents), the Participant will
be taxed on the amount withdrawn. As a general rule, the Participant must
include in the Participant's gross income in the year of withdrawal an amount
equal to the amount of cash withdrawn plus
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the fair market value of the shares of MDC Stock, if any, withdrawn.
However, if a Participant takes a "lump sum distribution," as defined in
Code Section 402, from these accounts, the Participant must include in the
Participant's gross income in the year of the distribution an amount equal to
the amount of cash withdrawn plus the basis in the shares of MDC Stock
distributed. The Participant may elect to include in the Participant's gross
income in the year of the distribution the fair market value of the MDC Stock
distributed instead of the Plan's basis in the MDC Stock. The Participant's
basis in the MDC Stock is equal to the amount included in the Participant's
gross income that is attributable to the MDC Stock.
The amount included in the Participant's gross income will be taxed as
ordinary income. If the Participant has not attained the age of 59 1/2 when
the Participant makes the withdrawal, the Participant may also be subject to a
10% penalty tax. See "Penalty Tax on Early Distributions" below.
The basis of any shares of MDC Stock withdrawn (except for MDC Stock
withdrawn in a lump sum distribution), for purposes of determining gain or loss
on a later taxable disposition of the shares, is equal to the fair market value
of the shares distributed (divided by the number of shares distributed to
determine the per share basis).
The Participant's holding period will begin on the day following the date
the Trustee gives the transfer agent irrevocable instructions to reissue the
shares in the Participant's name.
PENALTY TAX
If the Participant has not attained age 59 1/2 when the Participant makes
the withdrawal, the Participant may also be subject to a 10% penalty tax. See
"Penalty Tax on Early Distributions" below.
DISTRIBUTIONS PRIOR TO AGE 59 1/2
If a Participant's employment is terminated by retirement, death,
resignation or other termination of employment, cash and shares of MDC Stock
distributed prior to the recipient's attaining age 59 1/2 will be taxed as
described above under "Withdrawal from Before-Tax Contribution Accounts or
Rollover Contribution Accounts." Certain distributions received prior to age
59 1/2 may also be subject to a 10% penalty tax. See "Penalty Tax on Early
Distributions" below. If the distribution qualifies for "rollover" treatment
(described below), the Participant may roll over the amounts distributed to an
individual retirement arrangement ("IRA") or other qualified retirement plan and
defer the income tax until the amounts are distributed from the IRA or other
qualified plan.
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DISTRIBUTIONS AFTER ATTAINMENT OF AGE 59 1/2
If a Participant's employment with the Company is terminated on account
of retirement, death, resignation or other termination of employment and the
Participant receives a distribution of the entire amount in all of the
Participant's accounts after the Participant attains age 59 1/2, or if the
Participant receives a distribution of the entire amount in all of the
Participant's accounts after the Participant attains age 59 1/2 whether or not
the Participant has died, retired, became disabled, or otherwise terminated
employment with the Company, amounts distributed that qualify as "lump sum
distributions" may be eligible for special five-year forward averaging
treatment, if the Participant so elects and if the Participant has participated
in the Plan for at least five taxable years prior to the year of the
distribution. If the Participant's Accounts were transferred directly from
another qualified plan to this Plan, the Participant's years of participation in
the other plan count toward satisfying the five-year requirement. A Participant
may make only one such election in the Participant's lifetime. The Small
Business Job Protection Act of 1996 (the "1996 Act") provides for the repeal of
the five-year forward averaging provisions with respect to tax years beginning
after December 31, 1999.
A "lump sum distribution" is a distribution within one taxable year to the
recipient of the balance to the credit of the Participant that becomes payable
on account of death, retirement, other termination of employment or after the
Participant attains age 59 1/2.
The "net unrealized appreciation" on all shares of MDC Stock distributed in
a lump sum distribution is not taxed at the time of distribution; however,
subject to the Treasury Regulations, the recipient may elect to include the "net
unrealized appreciation" in gross income at the time of the distribution. The
basis of the shares is equal to the fair market value of the shares less the net
unrealized appreciation that is excluded from income. The holding period begins
on the day after the date the Trustee delivers irrevocable instructions to the
transfer agent to reissue the shares in the name of the Participant.
Any "net unrealized depreciation" is not recognized at the time of
distribution, but will be recognized at the time the shares are disposed of in a
taxable transaction. There will be "net unrealized depreciation" if the Plan
Trustee's cost basis of all shares of MDC Stock exceeds the fair market value of
all shares of MDC Stock. The basis of shares purchased with the Company's
contributions and with dividends on the MDC Stock is equal to the fair market
value of such shares. The holding period begins on the day after the date the
Trustee delivers irrevocable instructions to the transfer agent to reissue the
shares in the name of the Participant.
If the distribution is not a lump sum distribution, the Participant will be
subject to
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tax as described above under "Withdrawal from Before-Tax Contributions or
Rollover Contribution Accounts."
SPECIAL TEN-YEAR AVERAGING ELECTION
The Tax Reform Act of 1986 (the "Act") repealed special ten-year forward
averaging treatment and capital gains treatment (phased out between 1987 and
1992) for lump sum distributions. However, the Act provides that if a
Participant has attained age 50 before January 1, 1986, the Participant, upon
receipt of a lump sum distribution (as defined above), may elect to have the
distribution taxed using ten-year averaging (computed at the 1986 income tax
rates). In the alternative, the Participant may elect to have the distribution
taxed using five-year averaging (using the rates in effect for the year in which
the distribution is received). A Participant (who has attained age 50 prior to
January 1, 1986) may make this election without regard to whether the
Participant has attained age 59 1/2. However, only one such election may be
made in the Participant's lifetime, and if the Participant chooses to avail
himself/herself of the special ten-year averaging election, the Participant may
not use five-year averaging for any distribution received after attaining age
59 1/2. As described under "Distributions After Attainment of Age 59 1/2," the
five-year forward averaging provisions have been repealed with respect to
distributions occurring in tax years beginning after 1999.
PENALTY TAX ON EARLY DISTRIBUTIONS
The Code imposes an additional tax on amounts withdrawn or distributed
before the Participant attains age 59 1/2. The additional tax is equal to 10%
of the taxable portion of the amount distributed. If the Participant elects to
"roll over" all or any part of the taxable amount of a distribution that
qualifies for rollover treatment, the additional 10% tax will not apply to the
portion rolled over. There are several exceptions to the 10% penalty tax, which
include the following: (1) amounts paid to a beneficiary or the estate of a
Participant on or after the death of the Participant; (2) amounts paid on
account of the Participant's having become disabled; (3) amounts paid on account
of separation from Service after attainment of age 55; (4) amounts equal to the
amount allowable as a medical expense deduction for the Participant; (5) amounts
paid to an alternate payee under a qualified domestic relations order; and (6)
amounts attributable to excess Before-Tax Contributions.
PENALTY TAX ON EXCESS DISTRIBUTIONS
The Code imposes a 15% excise tax on "excess distributions." An "excess
distribution" is a distribution in any calendar year (from qualified plans and
from IRAs) that exceeds $112,500 (indexed annually for inflation) or $150,000,
whichever is greater. For 1996, the indexed amount is $155,000. If the
Participant qualifies for and elects lump sum treatment, the limit for the lump
sum distribution is five times the
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annual amount listed above (e.g., for 1996 five times $155,000 equals
$775,000). Certain amounts, such as amounts that are not included in gross
income by reason of a rollover contribution, are excluded in computing the
amount of the distribution. If the Participant elected that the 15% tax not
apply to the present value of the Participant's Account balance on August 1,
1986, the annual distribution limitation will be at least $112,500 (as
indexed for inflation). The 1996 Act has suspended the 15% excise tax on
"excess distributions" with respect to such distributions that are made
during calendar year 1997, 1998 and 1999.
ROLLOVERS AND INCOME TAX WITHHOLDING
Although the amount that is distributed from the Plan is included in
taxable income for the year of the distribution, if the distribution is a
"rollover-eligible distribution" (discussed below), the recipient can postpone
paying income tax on the distribution by making a "rollover" to an individual
retirement account ("IRA") or another employer plan that accepts rollovers. A
Participant who wishes to make a direct rollover must provide the Trustee with
the name of the IRA trustee or custodian (or the name of the employer plan and
the trustee for the employer plan) and other information the Trustee will need
to make the direct rollover. The Trustee will either transfer the funds to the
IRA or employer plan or will give the Participant a check payable to the IRA
trustee or custodian or the trustee for the employer plan. If all of any part
of the distribution is directly rolled over, the Participant will not pay tax on
the part of the distribution that was rolled over until the amount is paid from
the IRA or employer plan.
If the amount is paid directly to the recipient, the Trustee is required by
federal law to withhold federal income tax at the rate of 20% from any amount
that is not directly rolled over. The recipient may roll over the amount paid
to an IRA or employer plan within 60 days after receipt. The amount rolled over
will not be subject to tax until it is paid from the IRA or the employer plan.
The recipient can also roll over an amount equal to the 20% that was withheld.
If the amount equal to the 20% withheld is not rolled over, that amount will be
subject to income tax and, if the recipient is younger than 59 1/2 at the time
of the distribution, it may be subject to the 10% penalty tax.
ROLLOVER ELIGIBLE DISTRIBUTIONS
Most distributions from the Plan, including hardship withdrawals, may be
rolled over. However, a few distributions may not be rolled over, including the
following:
- installments paid over a life or lives or over a single life
expectancy or joint life expectancies;
- installments paid over a period of ten years or longer;
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- the amount that the Plan must distribute to the Participant after he
reaches age 70 1/2; or
- amounts that have already been subject to federal income tax (such as
defaulted loans that were repaid).
The Plan is required to withhold 20% from amounts paid directly only if the
amount can be rolled over. For example, if the amounts paid are in five annual
installments, the Plan must withhold 20% from each annual installment unless the
installment is directly rolled over to an IRA or employer plan. On the other
hand, if the distribution is paid in 10 annual installments, 20% withholding is
not required and the recipient can choose to have no federal income tax withheld
from the payments.
For taxable distributions from qualified plans that are not eligible to be
rolled over, the Code requires that federal income tax be withheld unless the
Participant elects otherwise. Each recipient of a distribution must be given
notice of the withholding requirement and the opportunity to have the Plan
transfer the rollover-eligible part of the distribution to an IRA or other
qualified plan and to elect out of withholding for the non-rollover-eligible
portion of the distribution. Shares of MDC Stock that are distributed from the
Plan will not be withheld, but any cash distributed is subject
to withholding. In certain circumstances, all of the cash may be withheld (if
the recipient does not elect otherwise) to satisfy the withholding obligation
with respect to the entire distribution.
Participant's will be given additional information concerning rollovers and
withholding when they request a withdrawal or become eligible to receive a
distribution from the Plan.
SALE OF MDC STOCK DISTRIBUTED FROM THE PLAN
Upon a subsequent taxable disposition of the shares of MDC Stock, long-term
capital gain will be recognized to the extent that the gain actually realized
does not exceed any net unrealized appreciation that was excluded from income
when the shares were distributed. Any gain realized in excess of the net
unrealized appreciation will be taxed as long-term or short-term capital gain
depending upon the Participant's holding period for the shares.
QUALIFIED STATUS
The Company has received a determination letter dated August 2, 1995 from
the Internal Revenue Service that the Plan in form is a qualified plan under
Section 401(a) of the Code. So long as the Plan remains qualified, the Company
can deduct contributions made to the Plan regardless of whether such amounts are
vested in the Participants.
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WITHDRAWALS FROM THE PLAN
While employed by the Company, an employee has limited access to the money
in his Plan account. Unless the employee rolls over a withdrawal, it will
generally be subject to federal income tax, and possibly a penalty tax if the
employee is under the age of 59 1/2, as more fully described above in the Tax
Effects section of this Prospectus. No more frequently than once in any 12
month period, a Participant may elect to withdraw cash from his account by
following the procedures for making withdrawals as prescribed by the Plan
Administrator, or by filing the appropriate form with the Plan Administrator. A
Participant may not replace any amounts withdrawn. The amounts are determined
in accordance with the following options:
Rollover Account Withdrawals - A Participant may withdraw all or any
portion of the amount allocated to the Participant's Rollover Account. A
Rollover Account withdrawal shall not affect a Participant's ability to
make or be eligible to receive other Contributions.
Over Age 59 1/2 Withdrawals - A Participant who is employed by the Company
and who has attained the age of 59 1/2 may withdraw all or any portion of
the following fully vested accounts:
Elective Deferral Contributions, including earnings
Rollover Contributions, including earnings
Discretionary Matching Contributions, including earnings
Discretionary Contributions, including earnings
An over age 59 1/2 withdrawal shall not affect a Participant's ability to
make or be eligible to receive other Contributions. Subject to the above rules,
withdrawals of shares of MDC Stock may be in the form of cash or shares.
HARDSHIP WITHDRAWAL
A Participant may withdraw all or any amount from the vested portion of the
Participant's Account no more than once in any 12 month period, notwithstanding
any other withdrawal, upon a demonstration of serious financial hardship to the
satisfaction of the Plan Administrator. Any contributions made by the Company
designated as Qualified Nonelective Contributions and/or Qualified Matching
Contributions and earnings thereon may not be withdrawn on the basis of
hardship. Upon making a hardship withdrawal, the Participant may not make
additional Before-Tax Contributions, for a period of 12 months after the date
the withdrawal payment is made. The amount of the hardship withdrawal may not
exceed the amount required to meet the Participant's immediate financial need.
Hardship is defined as circumstances resulting from an immediate and heavy
financial need attributable to:
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- Nonreimbursable medical expenses for the employee, spouse or
dependents;
- The cost of nonreimbursable tuition, room and board and books for
post-secondary or preparatory school education for the employee,
spouse or dependents;
- The cost of purchasing a primary residence (excluding mortgage
payments);
- The payment of amounts necessary for the Participant to prevent losing
his or her principal residence through eviction or foreclosure of the
mortgage; and
- Any other circumstance specifically permitted under Code Section
401(k)(2)(B)(l)(IV).
In addition, Participants experiencing a serious financial hardship may
request an in-service withdrawal of their Elective Deferral Contributions from
the Participant's Account. In order to obtain such a withdrawal, the
Participant must demonstrate to the Plan Administrator that the amount requested
is necessary to satisfy the serious financial hardship. The Plan provides two
alternative methods for making this demonstration. See the Plan documents for
these methods.
LOANS
Any Participant who is an active employee may apply for a loan from the
vested interest in the Participant's Account. The maximum amount a Participant
may borrow, subject to the limitations set forth below, is 50% of the
Participant's entire vested interest. A Participant may have only one
outstanding loan from the Plan. The minimum loan amount is $1,000 and the loan
cannot exceed $50,000 minus any loan amounts repaid in the last 12 months. The
Plan Administrator will determine what the appropriate interest rate will be at
any given time by following procedures that consider interest rates issued by
lending institutions under similar circumstances and the rates will remain fixed
for the term of the loan.
A Participant must repay the loan with interest pursuant to a monthly
repayment schedule by means of payroll deduction. The maximum term for a loan
is five years unless the proceeds of the loan are used to purchase the
Participant's principal residence, in which case, the term may be longer. Upon
termination of employment by a Participant for any reason, the entire
outstanding loan balance will become immediately due and payable. Any amount
not repaid will be treated as a distribution to the Participant. A loan is
treated as in default if scheduled loan payments are not made
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when due or within a 30-day grace period. Once the default has become final,
the entire unpaid principal and interest of the loan will be reported to the
Internal Revenue Service as taxable income in the year of default.
DISTRIBUTIONS UPON TERMINATION
In the event of termination of employment of a Participant for reasons
other than death, if requested in writing by a Participant, the vested portion
of the Participant's interest will be valued as soon as practicable following
receipt of the request for distribution and will be distributed in the form of
cash, an annuity, or a combination of these as soon as practicable. If a
Participant does not earlier make a written request for distribution, the vested
portion of the Participant's interest will be valued as soon as practicable
following the later of the date of the Participant's termination of employment
and attainment of age 62 and will be distributed in a cash lump sum as soon as
practicable.
If the value of a Participant's interest does not exceed $3,500, such
interest will in all events be distributed as soon as practicable in a lump sum.
If a Participant's vested and nonforfeitable interest in the Plan at the time of
termination is zero, a Participant will be deemed to have received a
distribution of such interest.
If the termination of employment is by reason of death, the designated
beneficiary will be paid in cash, an annuity, or a combination of both of these
as soon as practicable after Participant's death, provided that in certain
circumstances the beneficiary may delay distribution within limits established
by the Code.
If a Participant attains age 70 1/2 while still employed by the Company,
distributions from the Participant's account will commence no later than April
1st immediately following the calendar year in which his 70 1/2 birthday
occurs. However, if a Participant reaches age 70 1/2 before January 1, 1988
and was not a 5% owner of the Company during the Plan year in which the
Participant reached age 66 1/2, nor was the Participant a 5% owner in later
Plan years, the Participant may defer the distribution until the April 1 date
following the calendar year in which the Participant retires. The amount of
such distributions will be the total value of his account, payable in a lump sum
each year.
ASSIGNMENT OF INTERESTS
Except as otherwise provided by law, a Participant's interest in the Plan
cannot be sold, assigned, pledged or encumbered and any attempt to do so will be
invalid. Notwithstanding this, a distribution of all or a part of a
Participant's interest may be transferred as the result of a qualified domestic
relations order.
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FORFEITURE
If a Participant's service with the Company is terminated prior to the
Participant's attainment of age 62 other than as a result of death, disability,
retirement under a pension plan for the Company or change in control of the
Company, any part of the Participant's interest which has not vested will be
forfeited. The part of the Participant's interest attributable to his own
Before-Tax Contributions and any rollover contributions are fully vested at all
times. A Participant's interest attributable to Company matching contributions
vests 20% after one year of service after the Participant becomes a Participant
and increases 20% every year until Participant is fully vested after five years
of participation in the Plan. Notwithstanding the foregoing, a Participant who
completes five years of service will be 100% vested in the Participant's
interest attributable to the Company's matching contributions regardless of the
number of years the Participant was a Participant. The Plan also provides for
full vesting attributable to matching Company contributions in certain other
events, such as death or disability of the Participant or a change in the
control of the Company (as defined in the Plan).
If a Participant contributes in excess of a specified amount ($9,500.00 in
calendar year 1996) and the excess amount is returned to the Participant, any
matching contributions by the Company attributable to such return will be
forfeited.
SALE OF STOCK
Non-affiliates of the Company are free from restrictions on the resale of
MDC Stock. Affiliates of the Company (directors, executive officers and persons
who directly or indirectly through one or more intermediaries own or control
more than 10% of the Company's common stock) are restricted in the resale of MDC
Stock by the provisions of Rule 144 promulgated under the Securities Act of
1933. Restrictions include a limitation on the amount of MDC Stock that may be
sold in a three-month period, a limitation on the manner of sale and an
obligation to file a notice with the Securities and Exchange Commission. An
affiliate also may sell MDC Stock pursuant to a separate, current registration
statement. The Company is not required to file or maintain such a separate
registration statement. Any affiliate of the Company who has a portion of his
or her account balance in the MDC Stock Fund or who acquires MDC Stock under the
Plan also is subject to Section 16(a) and 16(b) of the Securities Exchange Act
of 1934. Affiliates may transfer funds out of the MDC Stock Fund or sell MDC
Stock only in accordance with Company policy related to the timing of such
actions.
CHARGES AND DEDUCTIONS AND LIENS THEREFOR
The Trustee will be reimbursed for all expenses incurred in the performance
of its duties. All taxes of any and all kinds whatsoever that may be levied or
assessed under existing or future laws of any jurisdiction upon or in respect of
the trust created or
13
<PAGE>
the Trust Fund or any money, property, or securities forming a part thereof
will be paid by the Trustee from the Trust Fund and apportioned against the
separate accounts pro rata unless paid by the Company. Participant's may be
charged commissions for sales of their interest in the MDC Stock Fund. A
processing fee will be charged Participant's who have a loan outstanding.
No person has or may create a lien on any funds, securities or other
property held under the Plan, except pursuant to a "qualified domestic relations
order" or pursuant to a loan to a Participant under the Plan.
ADMINISTRATION OF THE PLAN
The Plan is administered by a Committee established by the Board of
Directors of the Company (the "Board"). The Committee acts as Plan
Administrator under ERISA and has responsibility and authority for
administration of the Plan, including establishing rules and regulations of the
Plan, interpreting its provisions and construing its terms, and recommending
amendments to the Plan. The Committee maintains separate accounts showing at
all times the interest that is attributable to each Participant's specific
contributions.
The contributions to the Plan are made to the Trustee of the Plan and the
assets of the Plan are held in trust pursuant to the terms of a trust agreement.
The Trustee for the Plan is CG Trust Company, an Illinois Company, 525 West
Monroe Street, Suite 1800, Chicago, IL 60661. The Company may revoke the trust
agreement and replace the Trustee with a subsititute trustee at any time.
Participant's may receive additional information regarding the Plan and its
administrators by contacting the Company at 3600 S. Yosemite Street, Suite 900,
Denver, CO 80237 (303) 773-1100.
AMENDMENT OR TERMINATION OF THE PLAN
The Company may amend the Plan from time to time. The Company may not
amend the Plan to reinvest in the Company any part of the Trust Fund or divert
any part of the Trust Fund to purposes other than for the exclusive benefit of
the Participants and their beneficiaries. The Company may not amend the Plan if
the effect would deprive any Participant of his vested interest in the Trust
Fund. The Committee may amend the Plan and Trust to the extent such amendment
has no substantial adverse financial impact upon the Company or the Plan and to
the extent such amendment satisfies the foregoing requirements.
The Plan has no established termination date. The Company may terminate
the Plan at any time in its discretion.
14
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed with the Securities and Exchange Commission
are incorporated by reference in this Prospectus:
(1) The Company's Annual Report on Form 10-K for the year ended December
31, 1996; and
(2) The description of the Company's Common Stock contained in the
Company's Form 8-A (File No. 1-8951).
All documents subsequently filed by the Company pursuant to sections 13(a),
13(c), 14, and 15(d) of the Securities Exchange Act of 1934 (except those not
deemed to be filed) prior to the filing of a post-effective amendment that
indicates that all securities offered have been sold or that deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference in this Prospectus and to be part thereof from the date of the filing
of such documents.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON, INCLUDING
BENEFICIAL OWNERS, TO WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, ON THE
REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS REFERRED TO
ABOVE WHICH HAVE BEEN OR MAY BE INCORPORATED IN THIS PROSPECTUS BY REFERENCE,
OTHER THAN EXHIBITS TO SUCH DOCUMENTS (UNLESS SUCH EXHIBITS ARE SPECIFICALLY
INCORPORATED BY REFERENCE INTO SUCH DOCUMENTS), AS WELL AS THE LATEST ANNUAL
REPORT, PROXY STATEMENTS AND OTHER COMMUNICATION DISTRIBUTED TO SECURITY
HOLDERS. REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO M.D.C. HOLDINGS, INC.,
ATTENTION: DANIEL S. JAPHA, SECRETARY, 3600 S. YOSEMITE STREET, SUITE 900,
DENVER, COLORADO 80237, TELEPHONE: (303) 773-1100.
15
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The Company hereby incorporates by reference in this Prospectus the
Company's Annual Report on Form 10-K for the year ended December 31, 1996. The
Company also incorporates by reference the description of its common stock
contained in Form 8-A filed July 22, 1986 (File No. 1-8951). All documents
subsequently filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act, 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 (excluding those portions deemed not to be
filed), shall be deemed to be incorporated by reference in this Registration
Statement and to be a part hereof from the date of filing of such documents.
Any statement contained herein or in a document all or a portion of which is
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any other subsequently filed
documents which also is or is deemed 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 Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes and empowers
the Company to indemnify the directors, officers, employees and agents of the
Company against liabilities incurred in connection with, and related expenses
resulting from, any claim, action or suit brought against any such person as a
result of his relationship with the Company, provided that such person acted in
good faith and in a manner such person reasonably believed to be in, and not
opposed to, the best interests of the Company in connection with the acts or
events on which such claim, action or suit is based. The finding of either
civil or criminal liability on the part of such persons in connection with such
acts or events is not necessarily determinative of the question of whether such
persons have met the required standard of conduct and are,
II-1
<PAGE>
accordingly, entitled to be indemnified. The foregoing statements are
subject to the detailed provisions of Section 145 of the General Corporation
Law of the State of Delaware.
The Bylaws of the Company provide that the Company shall indemnify, in all
respects and to the full extent authorized or permitted by law, any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of his being or having been a director, officer,
employee or agent of the Company or, at the request of the Company, of any other
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement reasonably incurred by such person in connection with such action,
suit or proceeding. Such indemnification of any person shall inure to the
benefit of his heirs, executors and administrators.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Exhibit Number Description of Documents
- -------------- ------------------------
4.1 M.D.C. Holdings, Inc. 401(k) Savings Plan, as amended
(incorporated herein by reference to Exhibit 10.31(a) to
the Company's Annual Report on Form 10-K for the year
ended December 31, 1992)
4.2 Amendment to M.D.C. Holdings, Inc. 401(k) Savings Plan
4.3 Second Amendment to M.D.C. Holdings, Inc. 401(k) Savings
Plan
4.4 Trust Agreement establishing the M.D.C. Holdings, Inc.
Savings Plan Trust by and between M.D.C. Holdings, Inc. and
CG Trust Company
5.1 Opinion of Daniel S. Japha, Esq.
23.1 Consent of Daniel S. Japha, Esq. (contained in Exhibit 5.1)
23.2 Consent of Price Waterhouse LLP, Independent Accountants
II-2
<PAGE>
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act.
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the registration statement;
and
(iii) 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;
PROVIDED, HOWEVER, that paragraph (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement;
(2) that, for the purpose of determining any liability under the
Securities Act, 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;
(3) 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;
(4) that, for purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section 13(a) or
15(d) of the Exchange Act that is incorporated by reference in this 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; and
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the provisions described in Item 6, or otherwise, the Company has
been advised that in the
II-3
<PAGE>
opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Company of expenses incurred or paid by a director,
officer or controlling person of the Company in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Company 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 Securities Act and will be governed by the
final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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 the 20th day of
February, 1997.
M.D.C. HOLDINGS, INC.
By: /s/ Paris G. Reece III
-----------------------------------
Paris G. Reece III
Senior Vice President, Chief
Financial Officer and Principal
Accounting 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 Daniel S. Japha, Michael Touff 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
--------- ----- ----
/s/ Larry A. Mizel Chairman of the Board February 20, 1997
- ------------------------- Directors, President and
Larry A. Mizel Chief Executive Officer
II-5
<PAGE>
/s/ David D. Mandarich Executive Vice President - February 20, 1997
- ------------------------- Real Estate, Chief Operating
David D. Mandarich Officer and Director
/s/ Paris G. Reece III Senior Vice President, February 20, 1997
- ------------------------- Chief Financial Officer
Paris G. Reece III and Principal Accounting
Officer
/s/ Steven J. Borick Director February 20, 1997
- -------------------------
Steven J. Borick
/s/ Gilbert Goldstein Director February 20, 1997
- -------------------------
Gilbert Goldstein
/s/ William B. Kemper Director February 20, 1997
- -------------------------
William B. Kemper
/s/ Herbert T. Buchwald Director February 20, 1997
- -------------------------
Herbert T. Buchwald
II-6
<PAGE>
AMENDMENT TO
M.D.C. HOLDINGS, INC. 401(k) SAVINGS PLAN
WHEREAS, M.D.C. Holdings, Inc. and Richmond Homes, Inc. I (hereinafter
referred to as the "Employer") established the M.D.C. Holdings, Inc. 401(k)
Savings Plan (hereinafter referred to as the "Plan") effective January 1,
1992 for the benefit of its eligible Employees and their Beneficiaries; and
WHEREAS, the Employer reserved the right to amend the Plan under the terms
thereof; and
WHEREAS, the Employer now desires to amend the Plan and restate its
provisions to comply with the requirements of the Tax Reform Act of 1986 (TRA
'86), the Omnibus Budget Reconciliation Act of 1986 (OBRA '86), and the
Unemployment Compensation Amendment of 1992 (UCA '92) if applicable;
NOW THEREFORE, the Plan is hereby amended and restated in its entirety
effective January 1, 1993 except as follows:
1. Effective on January 1, 1993, the provisions relating to Direct Rollovers
shall be added to the Plan as governed by the terms of Article VI-A of the
Plan attached hereto.
2. Effective January 1, 1994, the provisions relating to Serious Financial
Hardships of other than elective deferrals shall be limited to once every
twelve consecutive months, as further described in Article X of the Plan
attached hereto.
3. Effective January 1, 1994, the provisions relating to Matching
Contributions shall be amended and governed by the terms of Article IV of
the Plan attached hereto.
4. Effective January 1, 1994, the provisions relating to Service and
Eligibility shall be amended and governed by the terms of Articles II and
III respectively of the Plan attached hereto.
5. The terms of the Plan as heretofore set forth shall no longer apply with
respect to Participants under the Plan who have not terminated employment
(including terminations on account of Retirement, death or Disability); and
the terms of the Plan with respect to such Participants shall henceforth be
as set forth in the M.D.C. Holdings, Inc. 401(k) Savings Plan, a copy of
which is attached to and forms a part of this amendment.
6. The Plan and Trust as amended and restated, shall represent a continuation
of the prior Plan and Trust as heretofore set forth and shall not abridge
or curtail any rights accorded to Participants under said prior instrument.
WHEREAS, M.D.C. Holdings, Inc. and Richmond Homes, Inc. I (hereinafter referred
to as the "Employer") established the M.D.C. Holdings, Inc. 401(k) Savings Plan
(hereinafter referred to as the "Plan") effective January 1, 1992 for the
benefit of its eligible Employees and their Beneficiaries; and
WHEREAS, Richmond Homes, Inc. I established the Richmond Homes, Inc. I 401(k)
Savings Plan (hereinafter referred to as the "Prior Plan"), effective January 1,
1992 for the benefit of its eligible employees and their Beneficiaries; and
WHEREAS, the Employer reserved the right to amend the Prior Plan under their
terms thereof; and
WHEREAS, the Employer now desires to merge the assets and liabilities of the
Prior Plan thereby creating
<PAGE>
the M.D.C. Holdings, Inc. 401(k) Savings Plan (hereinafter referred to as the
"Plan"); and
NOW THEREFORE, effective April 1, 1994, the Plan is amended as follows:
1. The terms of the Prior Plan as heretofore set forth shall no longer apply
with respect to Participants under the Prior Plan who have not terminated
employment (including terminations on account of retirement, death or
disability) and the terms of the Prior Plan with respect to such
Participants shall henceforth be as set forth in the M.D.C. Holdings, Inc.
401(k) Savings Plan, copies of which are attached to and form a part of
this amendment.
2. The M.D.C. Holdings, Inc. 401(k) Savings Plan shall represent a
continuation of the Prior Plan as heretofore set forth and shall not
abridge or curtail any rights or privileges accorded to Participants under
the Prior Plan.
3. The Employer does hereby adopt the Plan and agree to be bound by all of its
terms, conditions and amendments.
4. The Employer hereby transfers the assets of the Prior Plan attributable to
Participants in the Prior Plan to Group Annuity Contract GA-36104 and
M.D.C. Holdings, Inc. 401(k) Savings Plan.
IN WITNESS WHEREOF, the Employer, the Administrator and the Trustee have
hereunto affixed their signatures.
Executed at Denver, Colorado on December 30, 1994
M.D.C. HOLDINGS, INC.
/s/ Dana S. Halpin By: /s/ Paris G. Reece III
- ------------------------------ --------------------------------
Witness Paris G. Reece III
Title: Senior Vice President
Executed at Denver, Colorado on December 30, 1994
RICHMOND HOMES, INC. I
/s/ Dana S. Halpin By: /s/ Paris G. Reece III
- ------------------------------ --------------------------------
Witness Paris G. Reece III
Title: Vice President
Accepted this 30th day of December, 1994.
/s/ Dana S. Halpin By: /s/ Thomas M. Jenkins
- ------------------------------ --------------------------------
Witness Thomas M. Jenkins, Administrator
Accepted this _____ day of _____________, 19__.
<PAGE>
By:
- ------------------------------ ----------------------------
Witness Trustee
Accepted this _____ day of _____________, 19__.
By:
- ------------------------------ ----------------------------
Witness Trustee
Accepted this _____ day of _____________, 19__.
By:
- ------------------------------ ----------------------------
Witness Trustee
Executed at ________________ on _______________, 19__
IMPORTANT NOTE
Neither Connecticut General Life Insurance Company nor any of its employees can
provide you with legal advice in connection with the execution of this document.
Prior to execution of this document, you should consult your attorney on whether
this document is appropriate for you.
<PAGE>
SECOND AMENDMENT TO
M.D.C. HOLDINGS, INC. 401(K) SAVINGS PLAN
WHEREAS, M.D.C. Holdings, Inc. and Richmond American Homes of Colorado, Inc.
f/k/a/ as Richmond Homes, Inc. I (hereinafter referred to as the "Employer")
established the M.D.C.Holdings, Inc. 401(k) Savings Plan (hereinafter referred
to as the "Plan") effective January 1, 1992 for the benefit of its eligible
Employees and their Beneficiaries; and
WHEREAS, the Employer reserved the right to amend the Plan under the terms
thereof; and
NOW, THEREFORE, the Plan is hereby amended effective January 1, 1997 as
follows:.
I. Article 1, Section 1.50 is hereby deleted and replaced with the following:
"1.50 PARTICIPANT'S EMPLOYER STOCK ACCOUNT. The term Participant's
Employer Stock Account means that portion, if any, of the
Participant's Account which is invested in shares of M.D.C. Holdings,
Inc. common stock. Such Participant's Employer Stock Account shall
be credited with dividends paid, if any. Such Participant's Employer
Stock Account will be valued on the last day of each month that the
public exchange over which the Employer's stock is traded is open for
unrestricted trading.
Amounts which are to be invested in the Participant's Employer Stock
Account may be invested in any short-term account prior to actual
investment in the Participant's Employer Stock Account.
From time to time, the Participant's Employer Stock account will be
assessed reasonable and actual costs of the purchase and sale of
Employer Stock with respect to such Participant's Employer Stock
Account Employer stock."
II. Article 4, the first paragraph of Sections 4.2 and 4.3 are hereby deleted
and replaced with the following:
"4.2 MATCHING CONTRIBUTIONS. The Employer may make a discretionary
Matching Contribution based on the amount contributed as Elective
Deferral Contributions, subject to the Limitations on Allocations
specified in Article V. The amount of the Matching Contribution may
vary from year to year. The Matching Contribution for each Plan Year
shall be paid to the Trustee within the time provided by the Code for
the deduction of Employer contributions with respect to such Plan
Year and such contribution may be made either in cash or in shares of
M.D.C. Holdings, Inc. common stock, as determined by the Employer in
its sole discretion. Matching Contributions shall be subject to the
Actual Contribution Percentage Test. The Employer may designate at
the time of contribution that all or a portion of such Matching
Contributions be treated as Qualified Matching Contributions.
4.3 NONELECTIVE CONTRIBUTIONS. The Employer may make a contribution, in
cash or shares of M.D.C. Holdings, Inc. common stock, under the Plan
for any Plan Year of an amount that the Employer's Board of Directors
shall determine by
<PAGE>
resolution. Such resolution shall either specify a fixed amount or
specify a definite formula by which a fixed amount can be
determined."
III. Article 6, Section 6.1 is hereby deleted and replaced with the following:
"6.1 DISTRIBUTIONS IN GENERAL. Each Participant may elect, with his
Spouse's consent if required, a distribution in the form of an
Annuity, a single sum cash payment, M.D.C. Holdings, Inc. common
stock, or a combination of the above. All distributions are subject
to the provisions of Article VIII, Joint and Survivor Annuity
Requirements.
Distributions of M.D.C. Holdings, Inc. common stock are limited to
the value of the Participant's Employer Stock Account and shall be
made by the Trustee."
IN WITNESS WHEREOF, the Employer, the Administrator and the Trustee have unto
affixed their signatures.
Executed at on
-------------------------- -----------------------------------
M.D.C. HOLDINGS, INC.
By
- ------------------------------------- ---------------------------------
Witness
Title
------------------------------
Executed at on
-------------------------- -----------------------------------
RICHMOND AMERICAN HOMES OF COLORADO,
INC.
By
- ------------------------------------- ---------------------------------
Witness
Title
------------------------------
Accepted this ______ day of _____________________________ , ______ .
By
- ------------------------------------- ---------------------------------
Witness Administrator
Accepted this ______ day of _____________________________ , ______ .
By
- ------------------------------------- ---------------------------------
Witness Trustee
IMPORTANT NOTE
<PAGE>
Neither Connecticut General Life Insurance Company nor any of its employees can
provide you with legal advice in connection with the execution of this document.
Prior to execution of this document, you should consult your attorney on whether
this document is appropriate for you.
<PAGE>
TRUST AGREEMENT
Establishing
the
M.D.C. HOLDINGS, INC. 401(K) SAVINGS PLAN TRUST
by and between
M.D.C. HOLDINGS, INC.
and
CG Trust Company
<PAGE>
TABLE OF CONTENTS
PAGE
----
Section 1 Establishment of Trust 1
Section 2 General Duties of the Employer; Indemnification 1
Section 3 General Duties of Trustee 2
Section 4 Power and Duties of Trustee with Respect to Trust Fund 3
Section 5 Payment of Taxes 3
Section 6 Disbursement of Trust Funds 4
Section 7 Expenses and Compensation of Trustee 4
Section 8 Expense of the Plan and Trust Fund 4
Section 9 Accounts of Trustee 4
Section 10 Resignation, Removal and Substitution of Trustee 5
Section 11 Amendment and Termination of Trust 5
Section 12 Miscellaneous Provisions 6
Exhibit A Schedule of Trust Assets 8
<PAGE>
THIS TRUST AGREEMENT, by and between M.D.C. Holdings, Inc., (hereinafter
called the "Employer"), and CG TRUST COMPANY, a trust company organized under
the laws of the State of Illinois with its principal office and place of
business in the City of Chicago, Illinois (hereinafter called the "Trustee").
WITNESSETH:
WHEREAS, the Employer has established or adopted for its eligible
employees the M.D.C. Holdings, Inc. 401(k) Savings Plan (hereinafter called
the "Plan") and serves as the Plan administrator and named fiduciary; and
WHEREAS, the Employer desires the Trustee to hold Plan funds and the
Trustee is willing to hold such funds pursuant to the terms of this Trust
Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto do hereby mutually declare and agree as
follows:
Section 1: ESTABLISHMENT OF TRUST.
(a) In order to carry out the purposes of the Plan, the Employer hereby
creates and establishes a trust to be known as the M.D.C. Holdings, Inc. 401(k)
Savings Plan Trust (hereinafter called the "Trust" or "Trust Fund"). The
Trustee accepts this Trust and agrees to act as Trustee hereunder, but only on
the terms and conditions set forth in this Trust Agreement. Subject to the
terms and conditions of this Trust Agreement, all right, title and interest in
and to the estate of the Trust Fund shall be vested exclusively in the Trustee.
This Trust shall be effective on October 1, 1993 or, if later, the date executed
on behalf of the Trustee.
(b) The Trust Fund shall include only those assets which the Trustee
accepts and which are identified on Exhibit A. Only assets actually received by
the Trustee will become part of the Trust Fund. The Employer acknowledges and
agrees that it is responsible for effectuating the transfer of any assets held
by a prior trustee or custodian to the Trustee. All assets so received,
together with the income therefrom and any other increment thereon, shall be
held by the Trustee pursuant to the terms of this Trust Agreement without
distinction between principal and income and without liability for the payment
of interest thereon.
Section 2: GENERAL DUTIES OF THE EMPLOYER; INDEMNIFICATION.
(a) The Employer shall control and manage the operation of the Plan. The
Employer shall be responsible for determining benefit rights under the Plan,
instructing the Trustee in the disbursement of benefits, investment management,
soliciting stock voting instructions from participants, directing the Trustee in
voting proxies and performing those plan administration functions specified in
the Plan.
(b) The Employer shall act as custodian with respect to promissory notes,
mortgages and related documents given in connection with Plan loans, if any, and
the Employer shall hold in safekeeping all such promissory notes, mortgages and
related documents.
1
<PAGE>
(c) The Trustee shall be fully protected and shall incur no liability in
acting in reliance upon the instructions or directions of the Employer, or any
delegate of the Employer. In addition, the Trustee shall be entitled to rely on
directions given by a Plan participant, where the Plan provisions permit such
direction. The participant shall be regarded as the delegate of the Employer
for purposes of this Agreement and any reference herein to directions or
instructions from the Employer shall include directions or instructions from any
delegate of the Employer including Plan participants.
(d) The Employer shall indemnify and hold harmless the Trustee from and
against any and all claims, losses, damages, expenses (including reasonable
counsel fees) and liability to which the Trustee may be subject by reason of any
act done or omitted to be done, except where the same is finally adjudicated to
be due to the gross negligence or willful misconduct of the Trustee.
(e) In addition to and in no way in limitation of the indemnification of
paragraph (d), the Employer hereby agrees to indemnify and hold harmless the
Trustee from and against any claims, losses, damages, expenses (including
reasonable counsel fees) and liability to which the Trustee may be subject by
reason of any act or omission of any prior, subsequent or existing trustee of
the Plan.
Section 3: GENERAL DUTIES OF TRUSTEE.
(a) The Trustee shall receive, hold, manage, invest and reinvest the Trust
Fund pursuant to the provisions of this Section and Section 4 in accordance with
the directions of the Employer. The Trustee shall take no action except
pursuant to directions received by it from the Employer, and shall have no duty
to determine any facts or the propriety of any action taken or omitted by it in
good faith pursuant to instructions from such persons.
(b) The Trustee shall be responsible only for such assets as are actually
received by it as Trustee hereunder. The Trustee shall have no duty or
authority to ascertain whether any contributions should be made to it pursuant
to the Plan or to bring any action to enforce any obligation to make any such
contribution, nor shall it have any responsibility concerning the amount of any
contribution or the application of the Plan's contribution formula.
(c) The duties and obligations of the Trustee hereunder shall be limited
to those expressly imposed upon it by this Trust Agreement notwithstanding any
reference herein to the Plan, and no further duties or obligations of the
Trustee, such as a duty to value Plan investments, determine the prudence of any
Plan investment, or diversify Plan investments, shall be implied. The Trustee
shall not be liable in discharging its duties hereunder if it acts in good faith
and in accordance with the terms of this Trust Agreement and in accordance with
applicable Federal or state laws, rules and regulations.
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Section 4: POWER AND DUTIES OF TRUSTEE WITH RESPECT TO TRUST FUND. The
Trustee shall have the following powers and duties regarding the Trust Fund:
(a) To hold title to the assets of the Trust Fund, which may include
entering into depository arrangements for the safekeeping of records relevant to
the ownership of such assets with any bank or banks as the Trustee may choose.
Without limiting the generality of the foregoing, the Employer specifically
directs the Trustee to appoint, and the Trustee hereby appoints the Employer to
act as custodian with respect to promissory notes, mortgages and related
documents given in connection with Plan loans, if any.
(b) To invest the assets of the Trust Fund in such investment vehicles as
directed by the Employer, including Plan loans made to participants, and annuity
or insurance contracts issued by affiliates of the Trustee, in accordance with
directions received from the Employer, and to agree to amendments to such
annuity or insurance contracts, as directed by the Employer. The Trust Fund may
also include qualifying Employer securities as defined by the Employee
Retirement Income Security Act of 1974 as amended from time to time. However,
in no event shall the Employer direct the Trustee to purchase Employer
securities if the fair market value of all qualifying Employer securities
exceeds 100% of the fair market value of all Plan assets. The Trustee shall
have no duty or responsibility to determine the appropriateness of any plan
investment, or to cause such investments to be changed. Notwithstanding any
other provision of this Agreement, all notices, proposed contract amendments,
rate or fee changes or other communications regarding all group annuity
contracts that are assets of the Plan, including any group annuity contract
issued by Connecticut General Life Insurance Company, will be sent directly by
the issuer of the contract to the Employer or forwarded by the Trustee to the
Employer, and the Trustee shall act on behalf of the Plan with respect to any
such notice, proposed amendment, change or other communication only in
accordance with the written direction of the Employer. Any rights of a
contractholder under any such group annuity contract to discontinue, amend or
otherwise modify the contract shall be exercised only upon the specific written
direction of the Employer to the issuer of the contract or by the Trustee at the
Employer's specific written direction.
(c) To make transfers among investment vehicles or disbursements from the
Trust Fund as directed by the Employer or, if applicable, Plan participants.
The Trustee shall be entitled to rely on such direction, and shall have no
responsibility to ascertain whether the Plan permits such a transfer or
disbursement.
(d) To delegate to third parties, including affiliates of the Trustee, any
or all of its duties hereunder, including recordkeeping and reporting. Also,
the Trustee may utilize the services of outside custodians to hold on the
Trustee's behalf any Plan assets invested in securities.
(e) To vote securities proxies as directed by the Employer.
(f) To review proposed Plan amendment(s) for the sole purpose of
determining whether such amendment(s) is consistent with and thus, acceptable,
under the terms of this Trust Agreement. All Plan amendment(s) must be mutually
agreed to in writing by the Trustee, or a delegate of the Trustee, and the
Employer. In the event a proposed Plan amendment(s) is not received by the
Trustee or mutually agreed upon by the parties and there is a conflict between
such amendment(s) and this Trust Agreement, this Trust Agreement shall
3
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prevail.
Section 5: PAYMENT OF TAXES. The Trustee shall pay out of the Trust Fund
income taxes and other taxes of any and all kinds levied or assessed under
existing or future laws against the Trust Fund, or against any person with an
interest in the Trust Fund.
Section 6: DISBURSEMENT OF TRUST FUNDS.
(a) Upon receipt of written direction of the Employer, the Trustee shall
make payments from the Trust Fund to such persons or direct Connecticut General
Life Insurance Company to make such payments from an annuity contract listed on
Exhibit A, in such manner and in such amounts as the Employer shall direct in
writing, and amounts paid pursuant to such direction shall no longer constitute
a part of the Trust Fund. Notwithstanding the foregoing, the Employer expressly
reserves the right to provide direction directly to Connecticut General Life
Insurance Company regarding payments of Plan benefits or other disbursements.
(b) At no time prior to the satisfaction of all liabilities with respect
to participants and beneficiaries under this Trust shall any part of the corpus
or income of the Trust Fund be used for, or diverted to, purposes other than for
the exclusive benefit of plan participants or beneficiaries. Except as provided
in the Plan, the assets of the Trust Fund shall never inure to the benefit of
the Employer and shall be held for the exclusive purpose of providing benefits
to participants in the Plan and their beneficiaries, and defraying reasonable
expenses of administering the Plan.
Section 7: EXPENSES AND COMPENSATION OF TRUSTEE. The Trustee shall be
compensated in accordance with the fee schedule provided to the Employer. In
addition the Trustee shall be paid its reasonable expenses, including reasonable
expenses of counsel and other agents employed by the Trustee, incurred in
conjunction with the administration of the Trust Fund. If the Trustee proposes
an amended fee schedule and the Employer fails to object thereto within ninety
(90) days of its receipt, the amended fee schedule shall be deemed accepted by
the Employer.
Section 8: EXPENSES OF THE PLAN AND TRUST FUND. The Employer shall pay,
or, if not paid by the Employer and the Plan so permits, the Employer shall
direct the Trustee to pay from the Trust Fund, the reasonable expenses relating
to the Plan and Trust Fund. Such expenses shall include, without limitation,
actuarial, investment management, accounting, legal and Trust expenses.
Section 9: ACCOUNTS OF THE TRUSTEE. The Trustee has accepted this Trust
on the condition that the Employer has entered or is entering into a service
agreement with Connecticut General Life Insurance Company whereby Connecticut
General Life Insurance Company will provide recordkeeping services for all Plan
assets held pursuant to this Trust Agreement. The Trustee shall be required to
forward to the Employer, or require Connecticut General Life Insurance Company
to forward to the Employer, the recordkeeping reports and related financial
information provided by Connecticut General Life Insurance Company, but
4
<PAGE>
the Trustee shall not otherwise be required to provide Trust accounts.
5
<PAGE>
Section 10: RESIGNATION, REMOVAL AND SUBSTITUTION OF TRUSTEE.
(a) The Trustee may resign at any time by giving at least 30 days' written
notice to the Employer (unless the Employer deems notice of a shorter duration
to be adequate). The Employer may remove the Trustee at any time by giving at
least 30 days' written notice to the Trustee (unless the Trustee deems notice
of a shorter duration to be adequate).
(b) The Trustee's service pursuant to this Agreement is conditioned upon
the existence of one or more contracts between the Employer or the Plan (or the
Trustee on behalf of the Employer or the Plan) and Connecticut General Life
Insurance Company providing a funding medium for the Plan and providing for full
Plan recordkeeping services. In the event the contract providing a funding
medium or providing for recordkeeping services is discontinued or terminated,
this Agreement shall be terminated as well with no further notice from either
party to the other as of the date of discontinuance or termination of the
contract providing a funding medium or providing for recordkeeping services.
(c) Any successor trustee hereunder may be either a corporation authorized
and empowered to exercise trust powers or may be one or more individuals.
(d) Upon the appointment of a successor trustee, the resigning or removed
Trustee shall execute, acknowledge and deliver all documents and written
instruments necessary to transfer and deliver the Trust Fund and all rights and
privileges therein to the successor trustee. Upon the appointment of a
successor trustee, the resigning and removed Trustee shall be discharged from
further accountability for the Trust Fund, and shall be under no further duty,
obligation or responsibility for the disposition by such successor trustee of
the Trust Fund or any part thereof.
Section 11: AMENDMENT AND TERMINATION OF TRUST.
(a) The Employer and the Trustee may mutually agree at any time to amend
this Trust Agreement and the Trust created hereby to any extent deemed
advisable. No amendment to this Trust Agreement shall be effective unless
mutually agreed to in writing by the Employer and the Trustee; provided,
however, that Trustee's fee schedule may be amended as provided in Section 7.
(b) The Employer may at any time revoke this Trust Agreement and terminate
the Trust hereby created. Such revocation and termination shall become
effective upon receipt by the Trustee or its delegate of a written instrument of
such revocation and termination executed by the Employer. Upon such
termination, disposition of the assets of the Trust Fund shall be governed by
the terms of the Plan; provided, however, that the Trustee shall not distribute
any portion of the Trust Fund after such termination unless the Employer first
obtains a determination from the Internal Revenue Service that such termination
will not affect adversely the qualified status of the Plan and, if required,
approval of the Pension Benefit Guaranty Corporation of such termination and
distribution of assets. In lieu of an Internal Revenue Service determination,
assets of the Trust Fund may be distributed if the Employer agrees in writing
with the Trustee to indemnify the Trust Fund for any taxes or other penalties
which may be assessed against it as a result of such termination or agrees to
provide a bond to secure payment of any such taxes or penalties.
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Section 12: MISCELLANEOUS PROVISIONS.
(a) Trust Agreement and the Trust hereby created shall be governed,
construed, administered and regulated in all respects under the law of the
United States and the State of Illinois.
(b) The titles of the Sections in this Trust Agreement are for convenience
of reference only and in case of any conflict, the text of this instrument,
rather than such titles, shall control.
(c) In case any provisions of this Trust Agreement shall be held illegal
or invalid for any reason, their illegality or invalidity shall not affect the
remaining parts of this Trust Agreement, and this Trust Agreement shall be
construed and enforced as if the illegal and invalid provisions had never been a
part of the Trust Agreement.
(d) This Trust Agreement may be executed in any number of counterparts,
each of which shall be deemed an original. The counterparts shall constitute
one and the same instrument and may be sufficiently evidenced by any one
counterpart.
(e) This Trust Agreement shall be binding upon the respective successors
and assigns of the Employer and the Trustee.
(f) Neither the gender nor the number (singular or plural) of any word
shall be construed to exclude another gender or number when a different gender
or number would be appropriate.
(g) Communications to the Trustee shall be sent to the Trustee's principal
offices or such addresss as the Trustee may specify in writing. No
communication shall be binding upon the Trustee until it is received by the
Trustee or its delegate. Communications to the Employer shall be sent to the
Employer's principal offices or such address as the Employer may specify in
writing.
7
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IN WITNESS WHEREOF, this Trust Agreement has been executed on the dates
indicated below. The persons executing this Trust Agreement represent that they
are duly authorized to do so.
Attest: Employer
By
- ------------------------------------- ------------------------------------
Its
Date
----------------------------------
Attest: CG TRUST COMPANY
By
- ------------------------------------- ------------------------------------
Its
Date
----------------------------------
8
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DCTRUST.AGR
9
<PAGE>
EXHIBIT A
SCHEDULE OF TRUST ASSETS
1. Group Annuity contract GA-36104, issued by Connecticut General Life
Insurance Company.
2. Promissory notes given in connection with loans to Plan participants and
beneficiaries.
3. M.D.C. Holdings, Inc. Common Stock.
10
<PAGE>
February 20, 1997
M.D.C. Holdings, Inc.
3600 South Yosemite
Suite 900
Denver, Colorado 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 (Number 33-______), which relates to the registration of 1,500,000
shares of the $.01 par value Common 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 401(k) Savings Plan (the "401(k)
Plan").
I have examined such corporate records of the Company and such other
documents as I have deemed appropriate to render this opinion.
Based upon the foregoing, I am of the opinion that the Shares, when sold
and issued as contemplated in the Registration Statement and pursuant to the
401(k) Plan, will be legally issued (subject to compliance with applicable
federal and state securities laws), fully paid and are non-assessable.
I hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement.
Sincerely,
/s/ Daniel S. Japha
Daniel S. Japha
General Counsel - Corporate
and Secretary
DSJ:pfs
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 3, 1997 appearing on
page F-2 of M.D.C. Holdings, Inc.'s Annual Report on Form 10-K for the year
ended December 31, 1996.
PRICE WATERHOUSE LLP
Denver, Colorado
February 21, 1997
