Document:

exv10w2

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

 

 

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	 	 

11

 

	 	 	 	 	 	 	 
	 	 	EXECUTIVE	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ David D. Mandarich	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	David D. Mandarich	 	 
	 

	 	Date:
	 	September 26, 2008	 	 

12exv10w3

EXHIBIT 10.3

FORM OF

EXCHANGE AGENT AGREEMENT

Date: September _, 2008

American Stock Transfer & Trust Company

59 Maiden Lane

New York, NY 10038

Ladies and Gentlemen:

In connection with the merger (“Merger”) of Value Merger Sub, Inc., a Florida Corporation (“Sub”)
and wholly-owned subsidiary of EZCORP, Inc., a Delaware Corporation (“EZCORP” or “PARENT”) with and
into Value Financial Services, Inc. a Florida Corporation, Tax ID # 65-0503587 (“TARGET”) pursuant
to the Agreement and Plan of Merger dated as of September ___, 2008 (the “Merger Agreement”), a copy
of which has been previously delivered to you, at the effective date of the Merger (“Effective
Date”), each issued and outstanding share of Common Stock, par value $.01 per share, of TARGET
(“TARGET Common Stock”) will be converted into the right to receive Eleven Dollars ($11.00) per
share in cash, except as provided in the following sentence. The Target’s shareholders listed on
the attached Schedule 1 of the Merger Agreement (“Schedule 1”) shall receive 0.75 shares of Class A
Non-voting Common Stock issued by EZCORP, Inc. (“the EZCORP Shares”) for each share of TARGET
Common Stock owned by them, in the individual amounts set forth on Schedule 1.

You will be notified of the Effective Date by no later than the first business day following the
Effective Date.

No fractional shares of EZCORP stock will be issued in the merger. In lieu of any such fractional
share, each holder of record of shares of of TARGET Common Stock (“TARGET Shareholders”) who would
otherwise have been entitled to a fraction of a share of EZCORP Class A Non-voting Common Stock
shall be entitled to have the number of shares of such holder rounded up to the next whole number
of shares.

TARGET has delivered or will deliver to you (i) a copy of the letter of transmittal (“Letter of
Transmittal”) to be sent to TARGET Shareholders, (ii) copies of all other documents or materials,
if any, to be forwarded to TARGET Shareholders, (iii) a certified copy of resolutions adopted by
the Board of Directors of TARGET authorizing the Merger, the appointment of an exchange agent and
execution of

1

 

an exchange agent agreement, (iv) a list showing the names and addresses of all TARGET Shareholders
as of the Effective Date and the number of shares of TARGET Common Stock to be held by each TARGET
Shareholder immediately prior to the Effective Date including the certificate detail relating
thereto, and (v) a list of certificates (including certificate numbers) representing shares of
TARGET Common Stock that have been or are, as of such date, lost, stolen, destroyed or replaced or
restricted as to transfer (noting the text of the restrictive legends applicable thereto) or with
respect to which a stop transfer order has been noted (such lists being herein referred to as the
(“Lists”).

As soon as practicable after the Effective Date, the Exchange Agent (as defined below) will:

	I.	 	deliver the merger consideration consisting of cash or cash and EZCORP Shares, as applicable,
to each TARGET Shareholder for whom the TARGET has delivered to the Exchange Agent an executed
Letter of Transmittal with instructions, the TARGET Shareholder’s stock certificate(s)
representing its capital stock of the TARGET properly surrendered and, if applicable, properly
endorsed and otherwise in form for transfer (or, if such stock certificates are lost, stolen
or destroyed, an executed affidavit of loss and, if required by the Parent, the requirements
for an indemnity bond); or
	 
	II.	 	mail to each TARGET Shareholder for whom TARGET has not delivered the material described in
the preceding paragraph I (a) a notice advising such holder of the effectiveness of the Merger
and the applicable terms of the exchange effected thereby, (b) a Letter of Transmittal with
instructions, (c) a self-addressed return envelope, (d) tax certification guidelines, and (e)
any other material deemed appropriate by TARGET and PARENT.

This will confirm the appointment by TARGET, PARENT and Sub of American Stock Transfer & Trust
Company as the exchange agent (“Exchange Agent”) and, in that capacity, the authorization of the
Exchange Agent to act as agent for the TARGET Shareholders for the purpose of receiving the EZCORP
Shares and cash in lieu of fractional shares to be issued in exchange for shares of TARGET Common
Stock and transmitting the same to the TARGET Shareholders upon satisfaction of the conditions set
forth herein. Your duties, liabilities and rights as Exchange Agent are as set forth herein and
will be governed, in addition, by the applicable terms of the Merger Agreement.

In carrying out your duties as Exchange Agent, you are to act in accordance with the following:

2

 

	1.	 	Examination of Letters of Transmittal. You are to examine Letters of Transmittal,
certificates representing shares of TARGET Common Stock and other documents delivered or
mailed to you by or for TARGET Shareholders to ascertain, to the extent reasonably determined
by you, whether:

	 	(a)	 	the Letters of Transmittal appear to be duly executed and properly completed
in accordance with the instructions set forth therein;
	 
	 	(b)	 	the certificates for shares of TARGET Common Stock appear to be properly
surrendered and, if applicable, endorsed for transfer;
	 
	 	(c)	 	the other documents, if any, used in exchange appear to be duly executed any
properly completed and in the proper form; and
	 
	 	(d)	 	the certificates for shares of TARGET Common Stock are free of restrictions
on transfer or stop orders except as set forth on the Lists.
	 
	 	In the event you ascertain that any Letter of Transmittal or other document has been
improperly completed or executed, that any of the certificates for shares of TARGET Common
Stock are not in proper form or some other irregularity exists, you shall attempt to
resolve promptly the irregularity and may use your best efforts to contact the appropriate
TARGET Shareholder by whatever means of communication you deem most expedient to correct
the irregularity and, upon consultation with TARGET, shall endeavor to take such other
reasonable action as may be necessary to cause such irregularity to be corrected, and the
determination of any questions referred to TARGET or its counsel by you as to the validity,
form and eligibility, as well as the proper completion of execution of the Letters of
Transmittal and other documents, shall be final and binding, and you may rely thereon as
provided in Section 11 hereof. Any costs of contacting TARGET Shareholders for the purpose
of correcting irregularities shall be incurred for the account of TARGET.

	2.	 	Exchange of Shares. As soon as practicable after the Effective Date and after
surrender to you of all certificates for shares of TARGET Common Stock registered to a
particular record holder or holders (and only after surrender of all such certificates) and
the return of a properly completed and signed Letter of Transmittal relating thereto, you
shall cause to be issued and distributed to the holder(s) in whose name such certificates were
registered (or such other person as shall have been specified pursuant to the terms hereof)
(i) a check for the amount of the cash consideration due to the holder, and (ii) with respect
to those holders listed in Schedule 1, the whole number of EZCORP Shares issuable pursuant to
the Merger Agreement, registered in the name of such holder.

3

 

	 	 	Until so surrendered, each certificate which immediately prior to the Effective Date
represented outstanding shares of TARGET Common Stock shall, at and after the Effective
Date, entitle the holder (s) thereof only to receive, upon surrender of it and all other
identically registered certificates, the cash and EZCORP Shares (if applicable)
contemplated by the preceding paragraph.
	 
	 	 	No dividends or other distributions otherwise payable after the Effective Date to a holder
of record of certificates representing shares of TARGET Common Stock shall be paid to such
holder unless and until such holder shall have surrendered all certificates representing
shares of TARGET Common Stock registered to such holder. The Exchange Agent shall place
and hold any other distributions not paid to such holders pursuant to the requirements of
the foregoing sentence and shall (subject to applicable escheat laws) pay such
distributions of each holder of record entitled thereto after such holder shall have
surrendered all certificates for shares of TARGET Common Stock registered to such holder.
No interest shall be payable to such holders on distributions held by the Exchange Agent.
	 
	 	 	If any certificates representing shares of PARENT Common Stock are to be issued in, or a
cash is to be paid to, a name other than that in which the certificate for shares of TARGET
Common Stock surrendered in exchange therefor is registered, it shall be a condition of the
issuance or payment thereof that the certificate so surrendered shall be properly endorsed
and otherwise in proper form for transfer and that the person requesting such exchange
shall pay to you any transfer or other taxes required, or shall establish to your
satisfaction that such tax has been paid or is not payable.
	 
	 	 	Certificates to be delivered by mail shall be forwarded by first class mail under the
Exchange Agent’s blanket surety bond, which TARGET and PARENT understand protects TARGET
and PARENT and the Exchange Agent from loss or liability arising by virtue of the
non-receipt or non-delivery of such certificates. It is understood that the market value
of the securities in any one shipment sent by first class mail will not be in excess of
$250,000.00. In the event the market value shall exceed $250,000.00, the envelope shall be
mailed by registered mail and shall be insured separately for the replacement value of its
contents at the time of mailing.
	 
	3.	 	Lost Stolen or Destroyed Certificates. In the event that any TARGET Shareholder
claims that any certificate representing shares of TARGET Common Stock is lost, stolen or
destroyed, the Exchange Agent shall mail to such Shareholder an affidavit of loss and, if
required by the Parent, the requirements for an indemnity bond. The Exchange Agent shall make
the

4

 

	 	 	distribution of certificates representing shares of PARENT Common Stock only upon receipt
of a properly completed affidavit of loss and the requirements, if any, for an indemnity
bond.
	 
	4.	 	Reports. The Exchange Agent shall furnish, until otherwise notified, monthly, or
more frequently if requested by TARGET or PARENT, reports to TARGET and PARENT showing:

	 	(a)	 	number of shares surrendered and number of full shares issued in exchange
therefor (previous, herewith and total);
	 
	 	(b)	 	fractional shares adjusted (previous, herewith and total);

	 
	 	(c)	 	cash paid in lieu of fractional shares (previous, herewith and total).

	5.	 	IRS Filings. You shall arrange to comply with all requirements under the tax laws of
the United States, including those relating to missing tax identification numbers, and shall
file any appropriate reports with the Internal Revenue Service (“IRS”) (e.g., 1099, 1099B,
etc.) You may be required to deduct 28% from cash paid in lieu of fractional shares to holders
who have not supplied their correct taxpayer identification number or required certification.
Such funds will be turned over to the IRS by you.
	 
	6.	 	Certificates of PARENT Common Stock. The shares capital stock of TARGET held by the
persons listed on Schedule 1 hereto are restricted securities within the meaning of Rule 144
under the Securities Act of 1933, as amended, and applicable rules and regulations promulgated
by the Securities and Exchange Commission. However, the EZCORP Shares to be issued in
exchange for the TARGET Common Stock will, prior to issuance in the exchange, be registered
under the Securities Act of 1933 for resale by the persons listed on Schedule 1, as required
by Section 7.4 of the Merger Agreement. You will be notified by EZCORP as soon as practicable
as the registration statement for the EZCORP Shares has been declared effective by the
Securities and Exchange Commission and prior to the issuance of the EZCORP Shares to the
persons listed on Schedule 1. Accordingly, the EZCORP Shares will be issued and delivered
free of any legend restricting sale and transfer of the shares by reason of the registration
requirements of the Securities Act of 1933, notwithstanding the fact that certificates in
respect of TARGET shares submitted for exchange may bear a legend.
	 
	7.	 	Copies of Documents. You shall take such action at TARGET’s expense as may from time
to time be reasonably requested by TARGET to furnish copies of the Letter of Transmittal to
persons designated by TARGET.

5

 

	8.	 	Receipt or Disposal. Letters of Transmittal and telegrams, telexes, facsimile
transmissions and other materials submitted to you by TARGET Shareholders shall be preserved
in terms of applicable laws.
	 
	9.	 	Maintenance of Records. You will keep and maintain complete and accurate ledgers
showing all shares exchanged by you and payments made by you. You are authorized to cooperate
with and furnish information to any organization or its legal representatives designated from
time to time by TARGET or PARENT in any manner reasonably requested by any of them in
connection with the Merger and share exchange pursuant thereto.
	 
	10.	 	Delivery of Surrendered Shares of TARGET Common Stock. All certificates for shares
of TARGET Common Stock surrendered to you shall be retained by you as required by S.E.C.
regulations.
	 
	11.	 	Exchange Agents Duties and Obligations. As Exchange Agent, you:

	 	(a)	 	will have no duties or obligations other than those specifically set forth
herein, or as may subsequently be agreed to in writing by you, PARENT and TARGET;
	 
	 	(b)	 	will be regarded as making no representations or warranties and having no
responsibilities regarding the validity, sufficiency, value or genuineness of any
certificates for shares of TARGET Common Stock surrendered to you or the shares of
TARGET Common Stock represented thereby; will not be required or requested to make any
representations as to the validity or genuineness of any certificates for shares of
PARENT Common Stock or shares of PARENT Common Stock represented thereby; and will not
be responsible in any manner whatsoever for the correctness of the statements made
herein or in the Merger Agreement or in any document furnished to you by TARGET or
PARENT;
	 
	 	(c)	 	will not be obligated to institute or defend any action, suit or legal
proceeding in connection with the Merger, or your duties hereunder, or take any other
action which might in your judgment involve, or result in, expense or liability to
you, unless TARGET or PARENT shall first furnish you an indemnity satisfactory to you;
	 
	 	(d)	 	may rely on, and shall be protected in acting upon, any certificate,
instrument, opinion, representation, notice letter, telegram or other document
delivered to you and believed by you to be genuine and to have been signed by the
proper party or parties;
	 
	 	(e)	 	may rely on, and shall be protected in acting upon, written or oral
instructions given by any officer of, or any party authorized by,

6

 

	 	 	 	TARGET or PARENT with respect to any matter relating to your actions as Exchange Agent;
	 
	 	(f)	 	may consult with counsel satisfactory to you (including counsel for TARGET or
PARENT), and the written advice or opinion of such counsel shall be full and complete
authorization and protection in the respect of any action taken, suffered or omitted
by you hereunder in good faith and in accordance with such advice or opinion of such
counsel; and
	 
	 	(g)	 	may retain an agent or agents of your choice to assist you in performing your
duties and obligations hereunder, at your cost and without relieving you of any
liability hereunder.

	12.	 	Termination of Exchange Agent’s Duties and Obligations. This agreement shall
terminate upon demand by TARGET or PARENT at which time all undistributed certificates
representing shares of PARENT Common Stock, cash to be paid in lieu of fractional shares, and
any dividends and distribution in respect of PARENT Common Stock shall be delivered by the
Exchange Agent to PARENT. The provisions of sections 13 and 14 below shall survive the
termination of the agreement.
	 
	13.	 	Indemnification of Exchange Agent. TARGET and PARENT hereby jointly and severally
covenant and agree to reimburse, indemnify and hold you harmless from and against any and all
claims, actions, judgments, damages, losses, liabilities, costs, transfer or other taxes, and
expenses (including, without limitation, reasonable attorneys fees and expenses) incurred or
suffered without any negligence, bad faith or willful misconduct on your part, arising out of
or incident to this Agreement or the administration of your duties hereunder, or arising out
of or incident to your compliance with instructions set forth herein or with any instructions
delivered to you pursuant hereto, or as a result of defending yourself against any claim or
liability resulting from your actions as Exchange Agent, including any claim against you by
any tendering TARGET Shareholder, which covenant and agreement shall survive the termination
hereof. You hereby represent that you will notify TARGET and PARENT by letter, or facsimile
confirmed by letter, of any receipt by you of a written assertion of a claim against you, or
any action commenced against you, within ten (10) business days after your receipt of written
notice of such assertion or your having been served with the summons or other first legal
process giving information as to the nature and basis of any such assertion. However, you
failure to so notify TARGET and PARENT shall not operate in any manner whatsoever to relieve
TARGET and PARENT from any liability which they may have on account of this Section 13 if no
prejudice occurs. At their election, TARGET and PARENT may assume the conduct of your defense
in any

7

 

	 	 	such action or claim at their sole cost and expense. In the event that TARGET and PARENT
elect to assume the defense of any such action or claim and confirm to you in writing that
the indemnity provided for in this Section 13 applies to such action or claim, TARGET and
PARENT shall not be liable for the fees and expenses of any counsel thereafter retained by
you.
	 
	14.	 	Compensation and Expenses. For services rendered as Exchange Agent hereunder, your
fees are approved as set forth in the schedule attached to this agreement.
	 
	15.	 	Notices. Except as otherwise provided herein, no notice, instruction or other
communication by one party shall be binding upon the other party unless hand delivered or sent
by certified mail, return receipt requested. Notice to you shall be sent or delivered to your
above-noted address or such other addresses as you shall hereafter designate in writing in
accordance herewith. Notice to TARGET and PARENT shall be sent or delivered as follows:

	 	 	 	 	 
	 

	 	If to the Merger Sub:
	 	Value Merger Sub, Inc.
	 

	 	 	 	Attention: Connie Kondik, General Counsel
	 

	 	 	 	1901 Capital Parkway
	 

	 	 	 	Austin, Texas 78746
	 

	 	 	 	Fax: (512) 314-3463
	 
	 	 	 	 
	 

	 	If to EZCORP:
	 	EZCORP, Inc.
	 

	 	 	 	Attention: Connie Kondik, General Counsel
	 

	 	 	 	1901 Capital Parkway
	 

	 	 	 	Austin, Texas 78746
	 

	 	 	 	Fax: (512) 314-3463
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Lee Polson, Esq.
	 

	 	 	 	Strasburger & Price, LLP
	 

	 	 	 	600 Congress Avenue, Suite 1600
	 

	 	 	 	Austin, Texas 78701
	 

	 	 	 	Fax: (512) 536-5719

	16.	 	Prior Agreements. Nothing herein contained shall amend, replace or supersede any
agreement between Target and you to act as Target’s transfer agent which agreement shall
remain of full force and effect.
	 
	17.	 	Governing Law; Binding Upon Successors and Assigns. This Agreement shall be
constructed and enforced in accordance with the laws of the state of New York, without regard
to the principles thereof respecting conflicts

8

 

	 	 	of laws, and shall inure to the benefit of, and the obligations created hereby shall be
binding upon, the successors and assigns of the parties hereto.

Executed this                      day of                                         , 2008

	 	 	 	 	 
	 	 	EZCORP, Inc.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	Value Merger Sub, Inc.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	Value Financial Services, Inc.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 

Agreed To and Accepted:

AMERICAN STOCK TRANSFER & TRUST COMPANY

	 	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:

	 	 

	 	 
	 

	 	 

	 	 

9

 

Fee Schedule

Flat fee of $20,000.00

Plus reasonable out-of-pocket expenses.

10

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