Exhibit 10.2
EMPLOYMENT AGREEMENT
     AGREEMENT, dated as of October 1, 1997, previously restated as of
February 26, 2003, and hereby further restated to be effective as of August 1,
2008, by and between M.D.C. Holdings, Inc. (the “Company”), and David D.
Mandarich (the “Executive”).
     WHEREAS, the Executive has served the Company in various capacities for
over thirty years;
     WHEREAS, the Company desires to assure itself of the services of the
Executive for the period provided in this Agreement; and
     WHEREAS, the Executive is willing to serve in the employ of the Company for
such period upon the terms and conditions hereinafter provided;
     NOW, THEREFORE, in consideration of Executive’s past, present and future
performance of services for the Company and in consideration of the mutual
promises and agreements hereinafter set forth, the Company and the Executive
agree as follows:
     1. Employment and Duties. The Company shall employ the Executive, and the
Executive shall be employed by the Company, as President and Chief Operating
Officer, at the Company’s headquarters in Denver, Colorado (or such other
location as the Executive and Company may agree) for the term of this Agreement.
In this capacity, the Executive shall perform such services, consistent with his
office, as from time to time shall be assigned to him by the Board of Directors
of the Company, devoting such time and effort to manage, operate and direct the
activities of the Company and perform all of the functions of the offices held
by him, as directed by the Board of Directors from time-to-time; provided
however that the Executive may also engage in other activities (subject to
Section 6(b) below) consistent with his prior practices while employed by the
Company, so long as such activities do not adversely affect the performance by
the Executive of his duties and responsibilities hereunder.
     2. Term. The term of the Executive’s employment hereunder shall begin on
August 1, 2008 and shall continue through December 31, 2010 (the “Initial
Term”); provided, however, that the term of employment shall be automatically
extended beyond the Initial Term for successive two-year periods (each, an
“Additional Term”) unless the Company or the Executive shall give written notice
to the other party hereto of its or his intent to terminate this Agreement at
the end of the then current Term, such notice to be given at least six months
prior to the expiration of the Initial Term or any extension thereof (the
Initial Term and any and all Additional Terms are hereinafter collectively
referred to as the “Employment Term”).
     3. Compensation and Benefits.
          (a) Base Salary. During each calendar year of the Employment Term, the
Company shall pay the Executive a base salary at a rate of not less than
$830,000 per year (the “Base Salary”), payable in substantially equal
semi-monthly installments. Not less frequently than annually, Executive will be
eligible for periodic increases in Base Salary under the Company’s normal
policies and procedures for executive salary increases which currently

 

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provide for annual reviews of executive salaries. Executive’s Base Salary for
any year may not be reduced below the Executive’s Base Salary for the prior year
without the consent of both Executive and the Company.
          (b) Annual Incentive Compensation. For calendar year 2008 and the
remainder of the Employment Term, Executive will continue to participate in the
Company’s Executive Officer Performance Based Compensation Plan as it may be
amended, and any successor or supplementary incentive compensation plans
established by the Company (the “Performance Plans”) and shall be entitled to
incentive payments as provided thereunder and as otherwise provided by the
Company. The payments the Executive is entitled to receive under the Performance
Plans and this Section 3(b) shall be referred to herein as the “Annual Incentive
Compensation” for the year to which they are attributable, regardless of the
year in which they are paid.
          (c) Long-Term Incentive Compensation. The Executive shall continue to
participate in the Company’s Employee Equity Incentive Plan, as it may be
amended, and any successor or supplementary compensation and incentive plans or
programs established by the Company (the “Equity Plans”).
          (d) Retirement Benefit. The Company shall pay the Executive a
retirement benefit (“Retirement Benefit”) as hereinafter defined in
consideration of the Executive’s past, present and future services to the
Company. The present Retirement Benefit in which the Executive is vested as of
the date of this Agreement is a benefit for life equal to $581,000 per year.
Upon completion of service at the conclusion of the Initial Term, the Retirement
Benefit shall be increased to a benefit for life equal to $881,000 per year, and
the amount of the annual benefit for life shall be increased with the completion
of each succeeding Additional Term by $333,333.33 up to an aggregate amount of
annual lifetime benefit not to exceed $1,881,000 per year. Except as otherwise
expressly provided in Section 4, the Retirement Benefit shall be paid in equal
monthly installments commencing on the first day of the month following the
Executive’s retirement from the Company (the “Commencement Date”) and shall
continue for the duration of Executive’s lifetime. Retirement shall occur at the
time the Executive has a separation from service with the Company consistent
with the provisions for separation from service contained in Treas. Reg. §
1.409A-1(h). Notwithstanding the preceding or any other provision of this
Agreement to the contrary, the Retirement Benefit shall be $1,881,000 per year
in the event the Executive’s employment is terminated prior to the expiration of
the Initial Term or each Additional Term pursuant to (1) the Executive’s death
(in which event the provisions of Section 4(a)(ii) regarding payment to a
Beneficiary shall apply) or his becoming Totally Disabled in accordance with
Section 4(a), (2) a termination by the Company without Cause in accordance with
Section 4(c) or (3) the Executive’s election to terminate his employment in
accordance with Section 4(d), provided that such termination results in a
separation from service with the Company consistent with the provisions for
separation from service contained in Treas. Reg. § 1.409A-1(h).
          (e) Medical Insurance Benefits. During the Employment Term and for the
duration of Executive’s lifetime after the Commencement Date, the Company shall
pay for and make available medical insurance coverage for Executive for the
duration of Executive’s life. The medical insurance coverage shall provide
coverage and benefits that are at least comparable

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to that provided to the Executive at the time of execution of this Agreement. In
addition such medical insurance shall provide comparable coverage for the
Executive’s spouse for the duration of Executive’s life and if she survives him
for an additional sixty months after Executive’s death.
          (f) Expense Reimbursement. The Company promptly shall pay, or
reimburse the Executive for, all ordinary and necessary business expenses
incurred by him in the performance of his duties hereunder including, but not
limited to, expenses and dues associated with Executive’s involvement with
professional, industry, community, civic and charitable organizations, provided
that the Executive properly accounts for all such expenses in accordance with
Company policy.
          (g) Other Benefits Plans, Fringe Benefits and Vacations. The Executive
shall be eligible to participate in each of the Company’s present employee
benefit plans, policies or arrangements and any such plans, policies or
arrangements that the Company may maintain or establish during the Employment
Term and receive all fringe benefits and vacations for which his position makes
him eligible in accordance with the Company’s policies and the terms and
provisions of such plans, policies or arrangements including, but not limited
to, the following:
               (i) The Company shall provide to the Executive (whether through
insurance or otherwise) long-term disability benefits in an amount such that the
after-tax amount per year received by the Executive shall be equal to the
after-tax amount of the Executive’s Base Salary in effect for the year in which
the Executive becomes disabled. Such disability benefit shall be payable
monthly, until the earlier of (1) the end of the Executive’s disability prior to
his becoming Totally Disabled or (2) the Commencement Date of the Executive’s
Retirement Benefit.
               (ii) The Company shall, to the fullest extent permitted by
Section 145 of the General Corporation Law of the State of Delaware, as the same
may be amended and supplemented, or by any successor thereto, indemnify the
Executive from and against any and all of the expenses, liabilities or other
matters referred to in or covered by said Section. The Company shall advance
expenses to the fullest extent permitted by said Section. The Company shall
cover the Executive under such insurance policies as the Company may procure for
executive liability and indemnification insurance, to the same extent and
providing limits of liability, deductibles and exclusions as may be provided for
the Company’s Senior Executive Officers and outside directors. (For purposes of
this Agreement, the “Senior Executive Officers” of the Company shall be the four
officers of the Company having the highest annual base salaries.) These
covenants shall survive termination of this Agreement for any reason for a
period of five years from the date of such termination.
               (iii) Each calendar year during the Employment Term, but without
carryover from year to year (regardless of the Company’s general vacation
policy), the Executive shall be entitled to vacation of not less than six weeks.
The Executive hereby waives any right to vacation days accrued by the Executive
prior to January 1, 2000, and agrees that, in lieu thereof, Executive will
receive payment in the amount of $812,374 no later than December 31, 2008. This
amount shall be subject to appropriate withholding taxes.

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               The Company shall not terminate or change, in such a way as to
affect adversely the Executive’s rights or reduce his benefits under any Company
benefit plan, policy or arrangement now in effect or which may hereafter be
established and in which the Executive is eligible to participate, including,
without limitation, the Executive Officer Performance Based Compensation Plan,
the Company’s Equity Plans, the Retirement Benefit, life insurance, medical and
disability plans.
     4. Termination.
          (a) Death and Disability.
               (i) The Executive’s employment hereunder and the Employment Term
shall terminate upon his death or upon his becoming Totally Disabled. For
purposes of this Agreement, the Executive shall be “Totally Disabled” if he is
physically or mentally incapacitated so as to render him incapable of performing
his usual and customary duties as an executive for a period expected to last not
less than 12 consecutive months during which he receives income replacement
benefits from an employer-provided health and accident plan for at least twelve
months. The Executive’s receipt of Social Security disability benefits shall be
deemed conclusive evidence of Total Disability for purposes of this Agreement;
provided, however, that in the absence of his receipt of such Social Security
benefits, the Board of Directors of the Company may, in its reasonable
discretion, but based upon appropriate medical evidence, determine that the
Executive is Totally Disabled as provided in Treas. Reg. § 1.409A-3(i)(4).
               (ii) In the event of the Executive’s death (while Totally
Disabled or otherwise) after his Retirement Benefit has commenced to be paid,
the Company shall continue to pay such Retirement Benefit to his Beneficiary
until five years after such commencement. If the Executive’s Retirement Benefit
pursuant to Section 3(d) hereof has not commenced to be paid on the date of his
death, such benefit shall commence to be paid to his Beneficiary on the first
day of the month next following his date of death, as if such payments had
commenced at his Commencement Date and shall continue for five years after his
date of death. For purposes of this Agreement, the Executive’s “Beneficiary”
shall be deemed to be his spouse; if his spouse predeceases him (or if he is not
married at the time of his death), his Beneficiary shall be deemed to be his
estate.
               (iii) If Executive dies or becomes Totally Disabled during the
Employment Term, the Executive or his estate, as the case may be, shall be
entitled to receive all benefits earned under the Performance Plans and Equity
Plans as and for so long as provided in such plans.
          (b) For Cause. The Executive’s employment hereunder may be terminated
for Cause. For purposes of this Agreement, the term “Cause” shall mean: (i) the
Executive’s willful refusal to perform material duties reasonably required or
requested of him hereunder (other than as a result of total or partial
incapacity due to physical or mental illness) by the Board of Directors for 30
days after having received written notice of such refusal from the Board of
Directors and having failed to commence to perform such duties within such
period, (ii) the Executive’s commission of material acts of fraud, dishonesty or
misrepresentation in the

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performance of his duties hereunder, (iii) any final, non-appealable conviction
of Executive for an act or acts on the Executive’s part constituting a felony
under the laws of the United States or any state thereof which results or was
intended to result directly or indirectly in gain or personal enrichment by
Executive at the expense of the Company, or (iv) any material uncured breach of
the provisions of Sections 6(a) and 6(b) hereof which continues for 30 days
after the Executive has received written notice of such breach. If the
Executive’s employment is terminated for Cause, Executive shall be entitled only
to the amount of his Base Salary earned through the date of termination, and
shall not be entitled to any other amounts or benefits hereunder, including, but
not limited to, his Retirement Benefit, incentive compensation, or medical
insurance.
          (c) Without Cause. If the Executive’s employment hereunder is
terminated without Cause (which shall include, without limitation, the Company’s
election not to renew this Agreement pursuant to Section 2 hereof, the Company’s
termination of the Performance Plans or the Company’s amendment of the
Performance Plans to provide for payments to Executive in any calendar year
which are less than the amount calculated in accordance with Article III of the
Performance Plans, as the same may be amended from time to time) as soon as
practicable (but not later than 30 days) after such termination, but in no event
(other than for specified employee restrictions provided for below) later than
two and one-half months after the end of the calendar year during which the
Executive’s employment is terminated without Cause, he shall receive a lump sum
cash payment equal to the sum of: (i) an amount equal to the aggregate Base
Salary earned by him during the three years prior to such termination; and
(ii) a cash amount equal to two hundred percent (200%) of the Annual Incentive
Compensation (including any stock awards under the Performance Plans valued
pursuant to the terms of the plans) which the Executive was paid pursuant to
Section 3(b) hereof for the year prior to that in which such termination occurs.
In addition, the Company shall pay Executive the Retirement Benefit payable in
accordance with Section 3(d) in the amount of $1,881,000 per year, commencing on
the date of termination and the vesting of all options, dividend equivalents and
other rights granted to Executive under the Equity Incentive Plans and any other
Company plans shall be accelerated so as to permit Executive fully to exercise
all outstanding options and rights, if any, granted to Executive during the
Employment Term pursuant to such plans. The Company shall also provide Executive
and his spouse the medical insurance benefits described in Section 3(e).
          (d) Change in Control; Material Change.
               (i) If a Change in Control Event (as defined in Appendix A
hereto) occurs, all options, dividend equivalents and other rights granted to
Executive under the Equity Incentive Plans and any other Company plans shall be
accelerated and shall become exercisable immediately prior to the occurrence of
the transaction giving rise to the Change in Control Event at Executive’s
election, so as to permit Executive fully to exercise all outstanding options
and rights. In the event that such transaction fails to be consummated,
Executive’s election pursuant hereto shall be of no effect and Executive’s
options shall remain subject to the restrictions to which they were originally
subject.
               (ii) If a Change in Control Event or a Material Change (as
defined in Appendix A hereto) occurs, the Executive shall, if he so elects by
written notice to the Company within two years after a Change in Control Event
or within thirty days of a Material Change that is not corrected following
notice, be entitled to terminate his employment, if not already

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terminated by the Company. In the event of the Executive’s election hereunder to
terminate his employment due to a Change in Control Event, then the Executive
shall receive the amounts set forth in Section 4(c) above, and the Executive
shall be entitled to the accelerated vesting of all options and rights as
provided in paragraph 4(d)(i) above and, at Executive’s election, in the event
the Change in Control Event involves a two-tier tender offer, the Company will
pay Executive the difference between the exercise price of the otherwise
unvested options and the price offered in the first tier, or adjust the option
terms to provide Executive with an equivalent value. In the event of the
Executive’s election to terminate his employment due to a Material Change, or a
termination of employment by the Company without Cause upon or within two years
following a Change in Control Event, the Executive shall receive the amounts set
forth in Section 4(c)(i) and (ii) above. In the event of the Executive’s
election to terminate his employment due to a Change in Control, a Material
Change or termination of employment by the company without cause, the Executive
shall receive, with respect to the Retirement Benefit, and the Company shall pay
to the Executive, in a lump sum cash payment, an amount equal to the actuarial
present value (determined on the basis of the applicable mortality table and
applicable interest rate as specified in Section 417(e)(3) of the Internal
Revenue Code as of the effective date of the Executive’s termination date) of
the Retirement Benefit payments payable to the Executive under Section 3(d),
commencing on his termination date, and any such lump sum cash payment to the
Executive shall be in complete discharge of the Company’s obligation with
respect to the Executive’s Retirement Benefit.
               (iii) Notwithstanding anything to the contrary herein, if the
aggregate amounts payable pursuant to subparagraph (ii) of this paragraph (d),
either alone or together with any other payments which the Executive has the
right to receive either directly or indirectly from the Company or any of its
affiliates, would be subject to an excise tax as an “excess parachute payment”
under Section 4999 of the Internal Revenue Code, the Executive hereby agrees
that such aggregate amounts payable hereunder shall be paid in annual
installments over the shortest period of time over which such aggregate amounts
may be paid and not be treated as “excess parachute payments” under
Section 4999. All determinations called for in this subparagraph (iii) shall be
made by Ernst & Young LLP or such other independent public accounting firm with
a national reputation as shall be selected by the Company. The Company shall
bear all costs associated with obtaining such determinations.
     5. Specified Employee Status. Executive is likely to be a specified
employee (as defined in Treas. Reg. §1.409A—1(i)) as of the date of a separation
from service. Notwithstanding anything contained herein to the contrary, all
payments hereunder that are subject to the restrictions contained in
Section 409A of the Internal Revenue Code and are to be made due to a separation
from service or Change in Control may not be made before the date that is six
months after the date of separation from service (or, if earlier than the end of
the six-month period, the date of the Executive’ death). For this purpose, if
the Executive is not a specified employee as of the date of a separation from
service, he will not be treated as subject to this requirement even if he would
have become a specified employee had he continued to provide services through
the next specified employee effective date. Similarly, if the Executive is
treated as a specified employee as of the date of a separation from service, he
will be subject to this requirement even if he would not have been treated as a
specified employee after the next specified employee effective date had he
continued providing services through the next specified employee effective date.

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     6. Covenants.
          (a) Confidentiality. The Executive agrees that, during or at any time
after the Employment Term, he shall not divulge, furnish or make accessible to
any person, corporation, partnership, trust or other organization or entity, any
information, trade secrets, technical data or know-how relating to the business,
business practices, methods, attorney-client communications, pending or
contemplated acquisitions or other transactions, products, processes, equipment
or any confidential or secret aspect of the business of the Company without the
prior written consent of the Company, unless such information shall have become
public knowledge or shall have become known generally to competitors of the
Company through sources other than the Executive.
          (b) Competitive Activity. Until the end of the Employment Term, and
for a period of eighteen months beginning on (1) the last day of the Employment
Term or (2) a termination of the Executive’s employment by the Company for
Cause, the Executive shall not, without the written consent of the Board of
Directors of the Company, directly or indirectly, knowingly engage or be
interested in (as owner, partner, shareholder, employee, director, officer,
agent, consultant or otherwise), with or without compensation, any business
whose principal activities are in competition with the most important business
activities engaged in or contemplated by the Company during the Employment Term
and such eighteen month period. The most important business activities presently
engaged in or contemplated by the Company include:

  •   the acquisition and development of residential real estate for owner
occupied single family detached housing;     •   construction of single family
detached homes;     •   mortgage lending to purchasers of single family homes
sold by the Company; and     •   the sale of insurance products to purchasers or
owners of single-family homes sold by the Company.

A decision by the Company to enter a market in which the Executive has a
pre-existing interest does not constitute competitive activity if, after the
Company enters that market, the nature and extent of the Executive’s interest
does not substantially change to the detriment of the Company and the Executive
has provided the Company with written notice of the existence of the interest.
Nothing herein, however, shall prohibit the Executive from acquiring or holding
not more than ten percent (10%) of any class of publicly-traded securities of
any such business.
          (c) Remedy for Breach. The Executive acknowledges that the provisions
of this Section 6 are reasonable and necessary for the protection of the Company
and that the Company will be irrevocably damaged if such covenants are not
specifically enforced. Accordingly, the Executive agrees that, in addition to
any other relief to which the Company may be entitled, the Company shall be
entitled to seek and obtain injunctive relief (without the requirement of any
bond) from a court of competent jurisdiction for the purposes of restraining the
Executive from any actual or threatened breach of such covenants.

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     7. Miscellaneous.
          (a) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware applicable to agreements
made and to be performed in that State.
          (b) Notices. Any notice, consent or other communication made or given
in connection with this Agreement shall be in writing and shall be deemed to
have been duly given when delivered by United States registered or certified
mail, return receipt requested, to the parties at the following addresses or at
such other address as a party may specify by notice to the other.
          To the Executive:
          David D. Mandarich
           c/o M.D.C. Holdings, Inc.
           4350 South Monaco Street
           Suite 500
           Denver, CO 80237
           To the Company:
           M.D.C. Holdings, Inc.
           4350 South Monaco Street
           Suite 500
           Denver, CO 80237
           Attention: Michael Touff, General Counsel
          (c) Entire Agreement; Construction; Amendment. This Agreement shall
supersede any and all existing agreements between the Executive and the Company
or any of its affiliates or subsidiaries relating to the terms of his
employment. The parties acknowledge that options have been granted to the
Executive under the Equity Plans. Accordingly, to the extent the provisions of
this Agreement may conflict with the Equity Plans, the Equity Plans shall
control. To the extent the provisions of this Agreement may conflict with
provisions in any option agreement or option certificate between the Executive
and the Company, the provisions of this Agreement shall control. This Agreement
may not be amended except by a written agreement signed by both parties.
          (d) Waiver. The failure of a party to insist upon strict adherence to
any term of this Agreement on any occasion shall not be considered a waiver
thereof or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement.
          (e) Assignment. Except as otherwise provided in this paragraph, this
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective heirs, representatives, successors and assigns. This
Agreement shall not be assignable by the Executive, and shall be assignable by
the Company only to any corporation or other entity resulting from the
reorganization, merger or consolidation of the Company with any other
corporation or entity or any corporation or entity to which the Company may sell
all or

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substantially all of its assets, and it must be so assigned by the Company to,
and accepted as binding upon it, by such other corporation or entity in
connection with any such reorganization, merger, consolidation or sale.
          (f) Litigation Costs. In the event that the Executive shall
successfully prosecute a proceeding to enforce any provision of this Agreement,
in addition to any other relief awarded the Executive in such action, the
parties agree that the decision rendered shall award the Executive all of his
attorneys’ fees, disbursements and other costs incurred by the Executive in
prosecuting such case.
          (g) Severability. If any provision of this Agreement is invalid or
unenforceable, the balance of the Agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances.
     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement,
including Appendix A hereto, as evidence of their adoption as of the dates set
forth above.

                  M.D.C. HOLDINGS, INC.    
 
           
 
  By:
Name:   /s/ Christopher M. Anderson
 
Christopher M. Anderson    
 
  Title:   Senior Vice President and Chief Financial officer    
 
  Date:   September 26, 2008    
 
                EXECUTIVE    
 
           
 
  By:   /s/ David D. Mandarich    
 
           
 
  Name:   David D. Mandarich    
 
  Date:   Christopher M. Anderson    

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APPENDIX A
     This Appendix A is attached to and shall form a part of the Employment
Agreement (the “Agreement”), dated as of October 1, 1997, previously restated as
of February 26, 2003, and hereby further restated as of August 1, 2008, by and
between M.D.C. HOLDINGS, INC. (the “Company”), and DAVID D. MANDARICH (the
“Executive”).
          (a) For purposes of the Agreement, a “Change in Control Event” shall
occur if:
               (i) a report on Schedule 13D is filed with the Securities and
Exchange Commission pursuant to Section 13(d) of the Securities Exchange Act of
1934 (the “Exchange Act”) disclosing that any person (within the meaning of
Section 13(d) of the Exchange Act), other than the Company (or one of its
subsidiaries) or any employee benefit plan sponsored by the Company (or one of
its subsidiaries), or any director of the Company as of the date of the
Agreement or affiliate of such director, is the beneficial owner, directly or
indirectly, of twenty percent (20%) or more of the combined voting power of the
then-outstanding securities of the Company;
               (ii) any person (within the meaning of Section 13(d) of the
Exchange Act), other than the Company (or one of its subsidiaries) or any
employee benefit plan sponsored by the Company (or one of its subsidiaries), or
any director of the Company as of the date of the Agreement or affiliate of such
director, shall purchase securities pursuant to a tender offer or exchange offer
to acquire any common stock of the Company (or securities convertible into
common stock) for cash, securities or any other consideration, provided that
after consummation of the offer, the person in question is the beneficial owner
(as such term is defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of twenty percent (20%) or more of the combined voting power of the
then outstanding securities of the Company (as determined under paragraph (d) of
Rule 13d-3 under the Exchange Act, in the case of rights to acquire common
stock);
               (iii) the stockholders of the Company shall approve: (A) any
consolidation or merger of the Company (1) in which the Company is not the
continuing or surviving corporation; or (2) pursuant to which shares of common
stock of the Company would be converted into cash, securities or other property;
or: (B) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all the assets of the
Company; or
               (iv) there shall have been a change in a majority of the members
of the Board of Directors of the Company within a twelve month period, unless
the election or nomination for election by the Company’s stockholders of each
new director during such twelve month period was approved by the vote of
two-thirds of the directors then still in office who were directors at the
beginning of such twelve month period.
          (b) For purposes of the Agreement, a “Material Change” shall occur if:
               (i) the Company makes any change in the Executive’s functions,
duties or responsibilities from the positions that the Executive occupied on
August 1, 2008 or, if

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the Agreement is renewed or extended, the date of the last renewal or extension,
but only if such change would cause:
                    (A) the Executive to report to anyone other than the Chief
Executive Officer or Board of Directors of the Company,
                    (B) the Executive to no longer be the President and Chief
Operating Officer of the Company or its successor,
                    (C) even if the Executive maintains the positions of
President and Chief Operating Officer, his responsibilities to be reduced
(without his written permission) from those in effect on August 1, 2008 or the
date of the last renewal or extension of the Agreement, as applicable, or
                    (D) the Executive’s position with the Company to become one
of lesser importance or scope;
                    (E) the Company’s termination of the Performance Plans or
the Company’s amendment of the Performance Plans to provide for payments to
Executive in any calendar year which are less than the amount calculated in
accordance with Article III of the Performance Plans.
               (ii) the Company assigns or reassigns the Executive to another
place of employment at least fifty miles from his residence;
               (iii) the Company reduces the Executive’s Base Salary, annual or
long-term incentive compensation or the manner in which such compensation is
determined, or retirement benefits, or the Company breaches the terms of the
Agreement; or
               (iv) a purchaser of all or substantially all of the Company’s
assets or any successor or assignee of the Company fails to assume the
Agreement.
It is intended that each of the foregoing conditions will be applied
consistently with the requirements of the regulations under Section 409A of the
Internal Revenue Code.

                  M.D.C. HOLDINGS, INC.    
 
           
 
  By:
Name:   /s/ Christopher M. Anderson
 
Christopher M. Anderson    
 
  Title:   Senior Vice President and Chief Financial officer    
 
  Date:   September 26, 2008    

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                  EXECUTIVE    
 
           
 
  By:   /s/ David D. Mandarich    
 
           
 
  Name:   David D. Mandarich    
 
  Date:   September 26, 2008    

12