Exhibit 10.1

 

M.D.C. HOLDINGS, INC.
2011 EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT

 

M.D.C. Holdings, Inc., a Delaware corporation (the “Company”), grants an option
under the M.D.C. Holdings, Inc. 2011 Equity Incentive Plan (the “Plan”) to
purchase shares of common stock, $0.01 par value per share, of the Company
(“Stock”) to the Optionee named below. This Stock Option Agreement (the
“Agreement”) evidences the terms of the Company’s grant of an Option to
Optionee.

 

A. NOTICE OF GRANT

 

Name of Optionee:     _____________

 

Number of Shares of Stock Covered by the Option: 1,000,000 shares

 

Exercise Price per Share:     $28.45

 

Grant Date:              May 18, 2015

 

Expiration Date:      May 18, 2025

 

Type of Option:   Non-Qualified Stock Option

 

Vesting Schedule: Except as provided otherwise in this Agreement and the Plan
(including but not limited to Section 14.2 of the Plan which provides for
accelerated vesting upon certain terminations in connection with a Change of
Control), Optionee’s right to purchase shares of Stock under this Option vests,
as set forth below:

 

         

Service Vesting Date

 

Percentage of Shares that Vest

 

Cumulative Percentage of Vested Shares

 

Third Anniversary of Grant Date

 

 

33-1/3%

 

 

33-1/3%

Fourth Anniversary of Grant Date

 

33-1/3%

 

66-2/3%

Fifth Anniversary of Grant Date

 

33-1/3%

 

100%

 

Provided, however, that all unvested option shares will vest immediately in the
event the closing price of the Company’s stock as reported by the New York Stock
Exchange in any 20 out of 30 consecutive trading days closes at a price equal to
or greater than 120% of the closing price on the date of grant.

 

This Option is also subject to the terms of the Optionee’s Employment Agreement
with the Company and the Clawback Policy adopted by the Corporate
Governance/Nominating Committee on January 16, 2015.

 

B. STOCK OPTION AGREEMENT

 

1.     Grant of Option. Subject to the terms and conditions of this Agreement
and the Plan, the Company grants to Optionee, an Option to purchase the number
of shares of Stock, at the Exercise Price (each as set forth in the Notice of
Grant on the cover page of this Agreement), and subject to the terms and
conditions of the Plan, which is incorporated herein by reference. All
capitalized terms in this Agreement shall have the meaning assigned to them in
this Agreement or in the Plan.

 

2.     Type of Option. This Option is a Non-Qualified Stock Option.

 

3.     Certificates; Book Entry. The Company may elect to satisfy any
requirement for the delivery of shares of stock through the use of electronic or
other forms of book-entry including, but not limited to, uncertificated shares
maintained electronically.

 

4.     Vesting. The Option is only exercisable, in whole or in part, before it
expires and then only with respect to the vested portion of the Option. Subject
to the preceding sentence, Optionee may exercise this Option, by following the
procedures set forth in this Agreement. If at any time the number of shares of
Stock that are covered by the vested and exercisable portion of the Option
includes a fractional share, the number of shares of Stock as to which the
Option shall be actually vested and exercisable shall be rounded down to the
next whole share of Stock.

 

 

 
 

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Except as may be otherwise provided in this Agreement and the Plan (including
but not limited to Section 14.2 of the Plan which provides for accelerated
vesting upon certain terminations in connection with a Change of Control),
Optionee’s right to purchase shares of Stock under this Option vests as set
forth on the vesting schedule in the Notice of Grant above.

 

5.     Option Term; Expiration Date. Assuming that a right to purchase shares by
Optionee has vested as provided in the Notice of Grant, this Option shall have a
maximum term of ten (10) years. The Option term shall be measured from the
original Grant Date (set forth in the Notice of Grant) and shall accordingly
expire at the close of business at Company headquarters on the tenth anniversary
of the Grant Date, unless sooner terminated in accordance with Section 6 of this
Agreement (the “Expiration Date”).

 

6.     Termination. In the event there is a termination, a Change in Control or
a Material Change in accordance with Section 4(a), Section 4(c) or Section 4(d)
of Optionee’s Employment Agreement, dated October 1, 1997, as amended as of
March 8, 2012 and October 18, 2013, the vesting of all Options granted to the
Optionee shall be accelerated so as to permit the Optionee to fully exercise all
outstanding options and rights, if any, herein granted. If Optionee’s Service is
terminated by the Company for Cause, then Optionee shall immediately forfeit all
then existing rights to the Option (whether or not vested) and the Option shall
immediately expire on the date of termination of Service.

 

7.     Option Exercise.

 

(a)     Right to Exercise. The Option shall be exercisable on or before the
Expiration Date in accordance with the vesting schedule set forth in the Notice
of Grant, as referenced in Section 4. The Option shall not be exercisable after
the Expiration Date.

 

(b)     Notice of Exercise. The Option shall be exercised by delivery of written
or electronic notice to a representative of the Company designated by the
Committee on any business day, on the form specified by the Company. The notice
shall specify the number of shares of Stock to be purchased, accompanied by full
payment of the Exercise Price for the shares being purchased. The notice must
also specify how the shares should be registered (in the name of Optionee or in
both the names of Optionee and Optionee’s spouse as joint tenants with right of
survivorship). The notice of exercise will be effective when it is received by
the Company. Anyone exercising the Option after the death of Optionee must
provide appropriate documentation to the satisfaction of the Company that the
individual is entitled to exercise the Option.

 

(c)     Payment of Exercise Price. Payment of the Exercise Price for the number
of shares of Stock being purchased in full shall be made in one (or a
combination) of the following forms:

 

(i)     Cash or cash equivalents acceptable to the Company.

 

(ii)     Unrestricted shares of Stock which have already been owned by Optionee
(for at least six months or such other period designated by the Committee) which
are surrendered to the Company. The Fair Market Value of the shares, determined
as of the date of surrender, must equal the aggregate Exercise Price to be
applied to the Exercise Price.

 

(iii)     Any other method approved or accepted by the Committee in its sole
discretion, including, but limited to a cashless (broker-assisted) exercise, if
permitted, in which the sale proceeds are delivered to the Company in payment of
the aggregate Exercise Price and any withholding taxes.

 

8.     Tax Withholding. The Company shall have the right to require payment of,
or deduction from payments of any kind otherwise due to Optionee, any federal,
state, local or foreign taxes of any kind required by law to be withheld upon
the issuance, vesting or delivery of any shares of Stock, dividends or payments
of any kind. The Company may withhold taxes from any payments due to Optionee or
Optionee may deliver a check to the Company. Subject to the prior approval of
the Committee, which may be withheld by the Committee, in its sole discretion,
Optionee may elect to satisfy the minimum statutory withholding obligations, in
whole or in part, (i) by having the Company withhold shares of Stock otherwise
issuable to Optionee or (ii) by delivering to the Company shares of Stock
already owned by Optionee (for at least six months or any other minimum period
required by the Company). The shares delivered or withheld shall have an
aggregate Fair Market Value sufficient to satisfy the minimum statutory total
tax withholding obligations. The Fair Market Value of the shares used to satisfy
the withholding obligation shall be determined by the Company as of the date
that the amount of tax to be withheld is to be determined (“Tax Date”). Shares
used to satisfy any tax withholding obligation must be vested and cannot be
subject to any repurchase, forfeiture, or other similar requirements. Any
election must be made prior to the Tax Date, shall be irrevocable, made in
writing and signed by Optionee, and shall be subject to any restrictions or
limitations that the Committee, in its sole discretion, deems appropriate.

 

 

 
 

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9.     Transfer of Option. Except as hereinafter provided, during Optionee’s
lifetime, only Optionee (or, in the event of Optionee’s legal incapacity or
incompetency, Optionee’s guardian or legal representative) may exercise the
Option. Except as provided in the paragraph below, Optionee cannot transfer or
assign the Option other than by will or the laws of descent and distribution.
Upon any attempt to otherwise transfer or assign the Option, the Option will
immediately become invalid. Regardless of any marital property settlement
agreement, the Company is not obligated to honor a notice of exercise from
Optionee’s spouse, nor is the Company obligated to recognize Optionee’s spouse’s
interest in the Option in any other way.

 

Optionee may transfer, not for value, all or part of the Option to any Family
Member; provided, however, such a transfer must be accompanied by an executed
tax agreement prepared by the Company. Following a transfer to a Family Member,
the Option shall continue to be subject to the same terms and conditions as were
applicable immediately prior to transfer. Subsequent transfers of transferred
Options are prohibited except to Family Members of the original Optionee in
accordance with this Section, or by will or the laws of descent and
distribution. The events of termination of Service under an Option shall
continue to be applied with respect to the original Participant, following which
the Option shall be exercisable by the transferee only to the extent, and for
the periods specified in the applicable Award Agreement. Also, subject to an
amendment to the Plan authorizing such transfers, Optionee may transfer all or
part of the Option to (1) a tax exempt, non-profit organization qualified under
I.R.C. Section 501(c) or (2) a trust in which any one or more Family Members (or
the Participant) hold a beneficial interest.

 

10.     Investment Representations. The Committee may require Optionee (or
Optionee’s estate or heirs) to represent and warrant in writing that the
individual is acquiring the shares of Stock for investment and without any
present intention to sell or distribute such shares and to make such other
representations as are deemed necessary or appropriate by the Company and its
counsel.

 

11.     Continued Service. Neither the grant of the Option nor this Agreement
gives Optionee the right to continue Service with the Company or its Affiliates
in any capacity. The Company and its Affiliates reserve the right to terminate
Optionee’s Service at any time and for any reason not prohibited by law.

 

12.     Stockholder Rights. Optionee and Optionee’s estate or heirs shall not
have any rights as a stockholder of the Company until Optionee becomes the
holder of record of such shares of Stock, and no adjustments shall be made for
dividends or other distributions or other rights as to which there is a record
date prior to the date Optionee becomes the holder of record of such shares,
except as provided in Section 14 of the Plan.

 

13.     Adjustments. The number of shares of Stock outstanding under this Option
shall be proportionately increased or decreased for any increase or decrease in
the number of shares of Stock on account of any Corporate Event. Any such
adjustment in the Option shall not increase the aggregate Exercise Price payable
with respect to shares that are subject to the unexercised portion of the
outstanding Option and the adjustment shall comply with the requirements under
Section 409A of the Code. The conversion of any convertible securities of the
Company shall not be treated as an increase in shares effected without receipt
of consideration. In the event of any distribution to the Company’s stockholders
of an extraordinary cash dividend or securities of any other entity or other
assets (other than ordinary dividends payable in cash or shares of Stock)
without receipt of consideration by the Company, the Company shall
proportionately adjust (a) the number and kind of shares subject to this Option
and/or (b) the Exercise Price of this Option to reflect such distribution.

 

14.     Additional Requirements. Optionee acknowledges that shares of Stock
acquired upon exercise of the Option may bear such legends, as the Company deems
appropriate to comply with applicable federal or state laws. No shares shall be
issued or delivered pursuant to this Agreement unless there shall have been
compliance with all applicable requirements of federal, state and other
securities laws, all applicable listing requirements of the New York Stock
Exchange, if applicable, and all other requirements of law or of any regulatory
bodies having jurisdiction over such issuance and delivery. In connection
therewith and prior to the issuance of the shares, Optionee may be required to
deliver to the Company such other documents as may be reasonably necessary to
ensure compliance with applicable laws and regulations.

 

15.     Governing Law. The validity and construction of this Agreement shall be
construed in accordance with and governed by the laws of the State of Delaware
other than any conflicts or choice of law rule or principle that might otherwise
refer construction or interpretation of the Plan and this Agreement to the
substantive laws of any other jurisdiction.

 

16.     Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Company and Optionee and their respective heirs, executors,
administrators, legal representatives, successors and assigns.

 

 

 
 

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17.     Tax Treatment; Section 409A. Optionee may incur tax liability as a
result of the exercise of the Option or the disposition of shares of Stock.
Optionee should consult his or her own tax adviser before exercising the Option
or disposing of the shares.

 

Optionee acknowledges that the Committee, in the exercise of its sole discretion
and without Optionee’s consent, may (but is not obligated to) amend or modify
the Option and this Agreement in any manner and delay the payment of any amounts
payable pursuant to this Agreement to the minimum extent necessary to satisfy
the requirements of Section 409A of the Code. The Company will provide Optionee
with notice of any such amendment or modification.

 

18.     Amendment. The terms and conditions set forth in this Agreement may only
be amended by the written consent of the Company and Optionee, except to the
extent set forth in Section 17 hereof regarding Section 409A of the Code and any
other provision set forth in the Plan.

 

19.     2011 Equity Incentive Plan. The Option and shares of Stock acquired upon
exercise of the Option granted hereunder shall be subject to such additional
terms and conditions as may be imposed under the terms of the Plan, a copy of
which has been provided to Optionee.

 

20.     Headings; Construction. The section headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement and each other provision of this Agreement
shall be severable and enforceable to the extent permitted by law.

 

21.     Other Employee Benefits. The amount of any compensation deemed to be
received by Optionee as a result of this Agreement and the issuances of Shares
hereunder, shall not constitute “earnings” or “compensation” with respect to
which any other employee benefits of Optionee are determined, including without
limitation benefits under any pension, profit sharing, 401(k), bonus, life
insurance or salary continuation plan, except to the extent specifically
provided in such separate plan or agreement.

 

22.     Interpretation; Administration. The Committee shall have the full power
and authority to administer the terms and conditions of this Agreement, to adopt
any procedures, make any determinations, correct any defect, supply any omission
or reconcile any inconsistency with respect to the terms and conditions of this
Agreement in the manner and to the extent it shall deem expedient and it shall
be the sole and final judge of such expediency. No member of the Committee shall
be liable for any action or determination made in good faith. The
determinations, interpretations and other actions of the Committee with respect
to this Agreement and the Option shall be binding and conclusive for all
purposes and on all persons.

 

23.     Acceptance. The Option and this Agreement are voidable by the Company if
the Optionee does not accept this Agreement within 30 days after the Agreement
is made available, electronically or otherwise, to the Optionee by the Company.

 

 

Dated: as of the Grant Date set forth above.

 

 

M.D.C. HOLDINGS, INC.               

 

 

 

By:                                                                                      

Its      ___________________________________
          

 

OPTIONEE

 

 

Signed: