Form of 2011 Stock Option Agreement



 Exhibit 10.3 
 M.D.C. HOLDINGS, INC. 
 2011 EQUITY INCENTIVE PLAN 

2011 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: 

Exercise Price per Share:     $ 
 Grant Date: 
 Expiration Date:  

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

		  	%	  	%
			
		  	%	  	%
			
		  	%	  	%
			
		  	%	  	%








 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. In the
event of a conflict between the terms and conditions of the Plan and this Agreement, the terms and conditions of the Plan shall govern. 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. 
 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. No additional shares will vest after Optionee’s termination of Service for any reason. 

5. Option Term; Expiration Date. This Option shall have a maximum term of ten (10) years measured from the original Grant
Date (as set forth in the Notice of Grant on the cover sheet of this Agreement) 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 of Service; Expiration of
Option. If Optionee terminates Service with the Company and its Affiliates prior to the tenth anniversary of the Grant Date, the following shall apply: 
 (a) By the Company Without Cause or By Optionee. If Optionee’s Service is terminated by the Company or its Affiliate without Cause or Optionee terminates Service, then the vested
portion of the Option will expire at the close of business at Company headquarters on the date twelve (12) months after Optionee terminates Service, but in no event after the Expiration Date. The unvested portion of the Option automatically
expires on the date of termination of Service. Section 14.2 of the Plan provides for accelerated vesting upon certain conditions in connection with a Change of Control. 

  
 2 








 (b) Termination for Cause. If Optionee’s Service is terminated by the Company or
an Affiliate 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. 

(c) Disability. If Optionee terminates Service because of Optionee’s Disability, then the vested portion of the
Option will expire at the close of business at Company headquarters on the date twelve (12) months after Optionee’s termination of Service, but in no event after the Expiration Date. The unvested portion of the Option automatically expires
on the date of termination of Service. 
 (d) Death. If Optionee’s Service terminates because of
Optionee’s death, then the vested portion of the Option will expire at the close of business at Company headquarters on the date twelve (12) months after the date of death, but in no event after the Expiration Date. During that twelve
(12) month period, Optionee’s estate or heirs may exercise the vested portion of the Option. The unvested portion of the Option automatically expires on the date of termination of Service. In addition, if Optionee dies during the twelve
(12) month period described in subsection 6(a) or subsection 6(c), and a vested portion of the Option has not yet been exercised, then the vested portion of the Option will instead expire on the date twelve (12) months after
Optionee’s death, but in no event after the Expiration Date. In such a case, during the period following Optionee’s death up to the date twelve (12) months after death, Optionee’s estate or heirs may exercise the vested portion
of the Option. 
 7. Leave of Absence. For purposes of the Option, Service does not terminate when Optionee goes on a
bona fide employee leave of absence that was approved by the Company or an Affiliate in writing, if the terms of the leave provide for continued Service crediting, or when continued Service crediting is required by applicable law. However,
Service will be treated as terminating 90 days after Optionee went on the approved leave, unless Optionee’s right to return to active work is guaranteed by law or by a contract. Service terminates in any event when the approved leave ends
unless Optionee immediately returns to active Service. The Committee determines, in its sole discretion, which leaves of absence count for this purpose, and when Service terminates for all purposes under the Plan. 

8. 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. 

  
 3 








 (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. 

9. 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. 
 10. Transfer of Option. 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. Optionee cannot transfer or assign the Option other than by will or the laws of descent and distribution. Upon any
attempt to 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. 

  
 4 








 11. 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. 
 12. 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. 
 13. 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. 
 14.
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. 
 15.
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. 
 16. 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.  

  
 5 








 17. 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. 

18. 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. 
 19. 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 18 hereof regarding Section 409A of the Code and any other provision set forth in the Plan. 

20. 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 electronically. 
 21. 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. 
 22. 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. 
 23. 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. 

  
 6 








 24. 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 
 [If handwritten signature:] 
  

			
	 Signed:
	 	  


 [If electronic signature:] 
 I, the Optionee, understand that clicking “ACCEPT” below constitutes my electronic signature and intend that it shall have the same legally binding effect as my handwritten signature.

 [ACCEPT]         I accept this stock option agreement. 

[REJECT]          I reject this stock option agreement. 

  
 7