Exhibit 10.19 (b)
EXHIBIT A
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of April 1, 1996, by and between M.D.C.
Holdings, Inc. (the "Company"), and Spencer I. Browne (the "Executive").
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 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 Director,
President and Chief Executive Officer of Financial Asset Management LLC
("FAMC"), at the Company's headquarters in Denver, Colorado (or such other
location as the Executive and the Company may agree) for the term of this
Agreement. In this capacity, the Executive shall report to the Chairman of the
Board of the Company and 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. The Executive shall devote substantially all of his business
time and energies to the business of FAMC, provided that he may engage in
outside business activities and render services to other parties so long as such
activities and/or services (i) do not conflict with the principal activity of
the Company, FAMC, Asset Investors
Corporation ("AIC") or Commercial Assets, Inc. ("CAI") and (ii) have been
disclosed in advance to and approved in writing by the Company's Board of
Directors. Effective as of the date of this Agreement, the Executive shall have
resigned all of his other positions as a director or officer of the Company and
all of its subsidiaries.
2. Term. The term of the Executive's employment hereunder
shall begin on April 1, 1996 and shall continue until the earlier of the date of
termination pursuant to Section 4 below or December 31, 1998; provided, however,
that, unless either party otherwise elects by notice in writing delivered to the
other by November 30, 1997, or at least 90 days prior to December 31 of each
subsequent year, such term automatically shall be renewed for successive
one-year terms ending on December 31 of each successive year (the "Employment
Term"). Notwithstanding the foregoing, the Employment Term shall not extend
beyond the Executive's normal retirement which is his attainment of age 65.
3. Compensation and Benefits.
(a) Prior Period Compensation
(January 1, 1996-March 31, 1996). For his services rendered to the Company
from January 1, 1996 through March 31, 1996, the Executive shall receive on
April 1, 1996 $110,000 reduced by the amount of all installments of base salary
and any other compensation previously paid to the Executive for services
performed during the period January 1, 1996 through March 31, 1996. The
Executive also shall receive 25% of the amount of the bonus determined to be
payable to a Covered Employee (as defined in the Executive Officer Performance
Based Compensation Plan) (hereinafter "Covered
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Employee") in accordance with such plan for the 1996 calendar year, payable at
such time as such bonus is paid to other Covered Employees in accordance with
the plan. As of April 1, 1996, the Executive shall cease to participate in the
Executive Officer Performance Based Compensation Plan.
(b) Base Salary. During each calendar year of the
Employment Term, the Company shall pay the Executive a base salary at a rate
of $300,000 per year (the "Base Salary") prorated for 1996 and any other partial
year of employment, payable in substantially equal semi-monthly installments.
The 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 the
Executive and the Company.
(c) Annual Incentive Compensation. For calendar
year 1997 and the remainder of the Employment Term, the Executive shall receive
a bonus ("Annual Incentive Compensation"), in cash, equal to 15% of the annual
Pre-tax Net Income (as defined below) of FAMC, payable at such time as bonuses
are paid to the Company's division managers. For calendar year 1996, such bonus
shall be calculated to reflect the Executive's employment from April 1, 1996
through December 31, 1996. Pre-Tax Net Income of FAMC shall be determined in
accordance with generally accepted accounting principles in effect on the date
of this Agreement giving effect to the following:
(i) Income shall include fees from AIC and
CAI, fees from CMO bond servicing and all new sources of revenue earned after
March 31, 1996, except for interest income on amounts borrowed by the Company or
any of its wholly owned subsidiaries from FAMC up to $2,000,000. For 1996 only,
income
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shall include 50% of the pre-tax net income from the remaining CMO
subsidiaries of the Company earned after March 31, 1996.
(ii) Income shall exclude any amounts
accrued by FAMC related to its holding of the promissory note dated April 1,
1996 payable to FAMC by the Executive (the "Note").
(iii) Expenses shall include supervisory
fees for only those services specifically set forth in Schedule 1 attached
hereto in the following amounts: $0 in 1996; $310,000 in 1997; and $315,500 in
1998. Expenses shall also include all other actual direct and indirect costs
attributable to FAMC's operations (a schedule of which shall be furnished to the
Executive monthly in writing), including but not limited to the costs of the
personnel as set forth on Schedule 2 attached hereto (to the extent of their
time attributable to FAMC and its activities), as it may be modified by the
Company from time to time upon notice to the Executive, rent as set forth on
Schedule 2 and expenses associated with new sources of revenue earned after
March 31, 1996. For purposes hereof, expenses shall not include (1) the amount
of Executive's Annual Incentive Compensation, or (2) the bonuses of any of
FAMC's other personnel (provided that the bonus in each case does not exceed 20%
of the base salary), or (3) payment of sick leave, vacation pay or severance
benefits for any of the FAMC personnel in amounts accrued or payable by reason
of their employment by the Company or any of its affiliates prior to the date of
this Agreement, or (4) any amortization, gain or loss recorded with respect to
the Management Agreements with AIC and CAI.
In the event that the shareholders
of either AIC or CAI approve redemption of dividend equivalent
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rights ("DERs"), one-time DER redemption expense of AIC and/or CAI shall not be
included in AIC's or CAI's net income in connection with determining fees
payable to FAMC for purposes of determining the Executive's Annual Incentive
Compensation.
(d) Annual Limitation on Compensation. The
Executive's Annual Incentive Compensation shall be adjusted so that the sum of
his Base Salary and Annual Incentive Compensation (and prior period compensation
referenced in Section 3(a) with respect to 1996), when added to amounts
distributed to the Executive on account of his ownership of FAMC pursuant to
FAMC's Operating Agreement in effect from time to time, will not exceed the
following amounts with respect to the time periods indicated:
January 1, 1996 - December 31, 1996 $1,150,000
January 1, 1997 - December 31, 1997 $1,250,000
January 1, 1998 - December 31, 1998 $1,350,000
For purposes of this paragraph (d), "amounts distributed to the Executive on
account of his ownership of FAMC" shall exclude any amounts distributed to the
Executive related to interest accrued on the Note.
(e) Medical Insurance Benefits. During the
Employment Term and for 24 months after the date (i) the Executive becomes
Totally Disabled, (ii) the date of the Executive's termination without Cause
(including termination upon a Change in Control) or (iii) the Executive's
election to terminate his employment under Section 4(d), as the case may be, the
Company shall pay for and make available medical insurance coverage for the
Executive and his dependents which provides coverage and benefits that are at
least comparable to post-termination coverage, if any, and benefits provided to
senior officers of the Company as of the
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operative termination date; provided that the Company shall not be required to
obtain coverage, if any, which is greater than that which is available to
Executive as of the date of this Agreement or which is unavailable to the
Executive as of the operative termination date.
(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 the Executive's involvement
with professional and industry organizations, provided that the Executive
properly accounts for all such expenses in accordance with Company policy.
(g) M.D.C. Executive Option Purchase Program.
All outstanding loans made to Executive prior to the date of this Agreement
under the M.D.C. Holdings, Inc. Executive Option Purchase Program are due and
payable on the date of this Agreement. From time to time during the Employment
Term, the Executive may borrow, and the Company shall lend to the Executive, up
to an aggregate of $700,000 for the purpose of (i) exercising options to
purchase the Company's stock, and (ii) payment of any taxes payable by the
Executive arising from the exercise of such options on the terms provided
pursuant to the M.D.C. Holdings, Inc. Executive Option Purchase Program.
(h) Other Benefit 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
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makes him eligible in accordance with the Company's usual policies and the terms
and provisions of such plans, policies or arrangements, including but not
limited to the following:
(i) The Company shall provide the
Executive with a car allowance of $500 per month.
(ii) The Company shall provide the
Executive with an annual allowance of up to $5,000 which may be used for the
reimbursement of expenses associated with the Executive's financial planning
and/or tax preparation services provided by independent outside advisors or
accountants.
(iii) The Company shall reimburse
the Executive for an annual physical exam to be conducted by a qualified medical
physician of the Executive's choice, to a maximum amount of $1,000.
(iv) The Company shall provide the
Executive with office space at its principal place of business that is
comparable to the office space of the Executive as of the date of this
Agreement.
(v) The Company shall provide the
Executive during the Employment Term with long-term disability insurance or
other disability coverage comparable to that provided to him as of the date of
this Agreement at comparable cost to the Executive. In the event that such
insurance and/or coverage is not available without additional cost to the
Company, an appropriate adjustment will be made.
(vi) The Company has indemnified
and shall continue to indemnify the Executive for and hold him harmless from any
action, demand, claims, liabilities or damages and associated expenses
(including attorneys' fees) arising out of or in
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connection with his conduct, acts or omissions in his capacity as an officer,
director and/or employee of the Company, including its subsidiaries and
affiliates, and any other entity for which the Executive serves or has served in
such capacity for the benefit of or at the request of the Company, and shall
advance or pay on a current basis defense expenses (including attorneys' fees
and costs) reasonably incurred by the Executive in connection with any such
action, demand, claims, liabilities or damages, all to the fullest extent
permitted by applicable law. The Company shall continue to procure insurance
policies which continue executive liability and indemnification insurance
coverage for the Executive to the same extent and providing limits of liability,
deductibles and exclusions as are provided for the Company's principal executive
officers and outside directors. These covenants shall survive termination of
this Agreement for any reason.
(vii) Each year during the
Employment Term, but without carryover from year to year, the Executive shall
be entitled to four weeks vacation.
(viii) The Executive shall be
entitled to participate on the same basis as other senior officers of the
Company in all benefit programs, if any, afforded to such officers by AIC or
CAI.
(i) Special Provision for 1996 Only. For 1996
only, Executive shall receive 10% of the Pre-Tax Net Income from the remaining
CMO subsidiaries of the Company earned after March 31, 1996.
4. Termination.
(a) Death and Disability. The Executive's
employment hereunder and the Employment Term shall terminate upon
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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 more than 150 consecutive days. 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. In the event the Executive's employment is
terminated under this Section 4(a), he or his estate, as the case may be, shall
be entitled to the compensation set forth in the second sentence of Section 4(c)
below.
(b) For Cause. The Company may terminate the
Executive's employment hereunder 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 performance of his duties hereunder,(iii)
any final, non-appealable conviction of the 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, or (iv) any
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material uncured breach of the provisions of Sections 5(a) and 5(b) hereof which
continues for 30 days after the Executive has received written notice of such
breach. If the Executive's employment hereunder is terminated for Cause, the
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 incentive compensation or
medical insurance.
(c) Without Cause. The Company may terminate
the Executive's employment hereunder without Cause, which shall include, without
limitation, (i) the Company's election not to renew this Agreement pursuant to
Section 2 hereof, (ii) the Company causing FAMC to exercise its option to
purchase the Executive's interests in FAMC, (iii) removal of the Executive as a
Manager of FAMC without cause, (iv) a significant and overall change in the
business conducted by FAMC or dissolution of FAMC during the Employment Term
without the Executive's consent and (v) any other reason in the Company's sole
discretion. If the Executive's employment is terminated without Cause, as soon
as practicable (but not later than 30 days) after such termination, he shall
receive a lump sum cash payment equal to the sum of: (i) his Base Salary
prorated through the effective date of termination; and (ii) an amount equal to
80% of the prorated Annual Incentive Compensation to which the Executive would
be entitled to be paid pursuant to Section 3(c) hereof through the effective
date of termination for the year in which such termination occurs, calculated by
assuming FAMC's results of operations through the date of such termination
continue for the entire year (the "Incentive Comp Advance"); provided that if
the Incentive Comp Advance is less than the actual
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prorated portion of the Annual Incentive Compensation, determined in accordance
with Section 3(c) at the end of the calendar year in which the termination
occurred, the Company shall immediately pay the Executive the amount by which
the actual computed prorated Annual Incentive Compensation exceeds the Incentive
Comp Advance or, if the Incentive Comp Advance exceeds the actual prorated
portion of the Annual Incentive Compensation determined as provided above, then
the Executive shall immediately repay the difference to the Company. The
Executive shall also be entitled to the medical insurance benefits available to
him under Section 3(e).
(d) Change in Control. If a Change in Control (as
defined in Appendix A hereto) occurs with respect to the Company or FAMC, such
event shall be deemed a termination without Cause effective on the closing date
of the Change in Control and the Executive shall receive the compensation
provided for in the second sentence of Section 4(c). In addition, all options,
dividend equivalents and other rights granted to the Executive under any Company
plans shall be accelerated and shall become exercisable immediately prior to the
closing of the transaction giving rise to the Change in Control so as to permit
the Executive fully to exercise all outstanding options and rights. In the event
that such transaction fails to be consummated, the Executive's election pursuant
hereto shall be of no effect and the Executive's options shall remain subject to
the restrictions to which they were originally subject.
(e) Voluntary Termination. The Executive may
terminate his employment at any time by giving the Company 30 days prior written
notice. The exercise by the Executive of his right to cause FAMC to purchase his
ownership interest in FAMC shall be
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deemed a voluntary termination by the Executive. In the event of a voluntary
termination, the Executive shall be entitled to (i) payment of his Base Salary
through the effective date of termination; (ii) payment of Annual Incentive
Compensation for the year in which such termination occurs, pro-rated and paid
as provided in Section 4(c)(ii) above; and (iii) provision of medical insurance
benefits as provided in Section 3(e).
(f) Severance Payments.
(i) If the Executive's employment is
terminated under Section 4(b) above, the Executive shall not receive any
payments other than those provided in Section 4(b). If the Executive's
employment is terminated under Sections 4(c) or 4(d) above, the Executive shall
receive on the effective date of termination a lump-sum payment of $1,220,000.
If the Executive's employment is terminated under Section 4(a) above, or if the
Executive terminates his employment under Section 4(e) above, the Executive, or
his estate as the case may be, shall receive on the effective date of
termination the following payments:
Effective Date Amount
of Termination
On or before December 31, 1996 $ 0
After December 31, 1996 and on or before December 31, 1997 $ 300,000
After December 31, 1997 and on or before December 31, 1998 $ 600,000
After December 31, 1998 $ 900,000
(ii) Notwithstanding anything to the
contrary herein, if the aggregate amounts payable pursuant to
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Section 4(f)(i) hereof would cause any payment under such Section 4(f)(i) to be
subject to an excise tax as an "excess parachute payment" under Section 4999 of
the Internal Revenue Code, such aggregate amounts payable hereunder shall be
reduced by the smallest amount necessary to ensure that no payment hereunder
shall be so treated under such Section 4999. Prior to effecting such reduction,
the Company shall give the Executive 30 days' written notice of the fact, amount
and basis of such reduction, as well as a determination of the shortest period
of time over which such aggregate amounts may be paid and not be treated as
"excess parachute payments." The Executive shall then have 30 days within which
to elect in writing to (A) receive a lump sum payment, reduced pursuant to the
first sentence hereof, or (B) to receive the aggregate amounts payable pursuant
to Section 4(f)(i) in annual installments over the time period set forth in the
Company's notice. In making the determinations called for in this Section
4(f)(ii), the parties hereto shall rely conclusively on (1) the opinion of Price
Waterhouse LLP or, if such firm is unable to provide an opinion, such other
consulting firm as the Company shall designate (with the written consent of the
Executive which shall not be unreasonably withheld), as to the amount of the
Executive's compensation which constitutes "reasonable compensation" for
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purposes of Section 280G of the Code, and (2) the opinion of Price Waterhouse
LLP, or, if such firm is unable to provide an opinion, such other actuarial firm
as the Company shall designate (with the written consent of the Executive which
shall not be unreasonably withheld), as to any present value calculations under
Section 280G of the Code. The Company shall bear all costs associated with
obtaining such opinions.
(iii) The amounts payable pursuant to
this Section 4(f) shall be paid (or commence to be paid) to the Executive not
later than 10 days after he notifies the Company under Section 4(f)(ii) above
whether he wishes to receive such amounts in a lump sum or in installments.
5. Covenants.
(a) Confidentiality. The Executive acknowledges
that he has acquired and will acquire confidential information respecting the
business of the Company. Accordingly, the Executive agrees that, without the
written consent of the Company as authorized by its Board of Directors, he shall
not, at any time, willfully disclose any such confidential information to any
unauthorized third party with an intent that such disclosure will result in
financial benefit to the Executive or to any person other than the Company. For
this purpose, information shall be
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considered confidential only if such information is uniquely proprietary to the
Company and has not been made publicly available prior to its disclosure by the
Executive. The Executive further agrees to give to the Company's General
Counsel, within 90 days after the date of this Agreement, all Company records,
materials and information in his possession, custody or control (or which he has
provided to his representatives) which relate to the business of the Company,
except for such materials and information which relate to FAMC, AIC or CAI. Upon
termination of Executive's employment hereunder he shall deliver to the
Company's General Counsel all Company records, materials and information in his
possession, custody or control (or which he has provided to his representatives)
which relate to the business of the Company, FAMC, AIC or CAI as soon as
reasonably practicable, but in no event more than 30 days after termination of
Executive's employment.
(b) Competitive Activity. Until the end of the
Employment Term, the Executive shall not, without the advance 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 any
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substantial line of business actively being conducted by the Company during the
Employment Term. In the event of Browne's termination of employment hereunder
for any reason, Browne shall resign as an officer and director of AIC and CAI
and each of their respective subsidiaries effective as of the date of
such termination. Additionally, until the end of the Employment Term and for
a period of 24 months after the termination of the Executive's employment
hereunder he shall not interfere with any of the significant, ongoing business
relationships of FAMC, AIC, CAI, the Company or any of its subsidiaries existing
as of the date of such termination. Nothing herein, however, shall prohibit
the Executive from acquiring or holding not more than 5 percent of any class
of publicly-traded securities of any such business.
(c) Remedy for Breach. The Executive acknowledges
that the provisions of this Section 5 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
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the purposes of restraining the Executive from any actual or threatened breach
of such covenants.
6. Miscellaneous.
(a) Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of Colorado
applicable to agreements made and to be performed in that State.
(b) Notices. Any notice, onsent 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:
----------------
Spencer I. Browne
1660 Holly Street
Denver, Colorado 80220
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To the Company:
--------------
M.D.C. HOLDINGS, INC.
3600 South Yosemite Street, Suite 900
Denver, Colorado 80237
Attention: General Counsel
(c) Entire Agreement; 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. It 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
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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 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) Arbitration. As material consideration for
entering into this Agreement, each of the Executive and the Company agrees that
any controversy or claim arising out of or relating to this Agreement, or the
breach thereof, shall be settled by arbitration administered by the American
Arbitration Association in accordance with the Commercial Arbitration Rules, and
judgment on the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. Both parties expressly agree that costs and
attorneys fees related to any such arbitration shall be awarded to the
prevailing party. Any arbitration commenced pursuant to this paragraph shall be
conducted in the Denver metropolitan area in the State of Colorado.
(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
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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 and Schedules 1 and 2 thereto as of the date
first above written.
M.D.C. HOLDINGS, INC.
By:
---------------------------
Name:
-------------------------
Title:
------------------------
EXECUTIVE
------------------------------
Spencer I. Browne
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APPENDIX A
This Appendix A is attached to and shall form a part of the
Employment Agreement, dated as of April 1, 1996, by and between M.D.C. HOLDINGS,
INC. (the "Company") and Spencer I. Browne (the "Executive").
(a) For purposes of this Agreement, a "Change in Control"
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 current director of the
Company (or a member of the family or an affiliate of such director), is the
beneficial owner, directly or indirectly, of 50 percent 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
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subsidiaries) or any employee benefit plan sponsored by the Company (or one of
its subsidiaries), or any current director of the Company (or a member of the
family or an 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 50 percent 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, (2) pursuant to which shares of common
stock of the Company would be converted into cash, securities or other property,
or (3) with a corporation which prior to such consolidation or merger owned 50
percent or more of the cumulative voting power of the then-outstanding
securities of the Company, or (B) any sale, lease, exchange or other transfer
(in one transaction or a series of
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related transactions) of all or substantially all the assets of the Company;
(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; or
(v) the Chairman of the Board of Directors of the
Company as of April 1, 1996 sells all or substantially all of his shares of
common stock of the Company; or (vi) with respect to FAMC, Financial Asset
Management Corporation or M.D.C. Residual Holdings, Inc., a person or persons
other than the Company or its affiliates shall be entitled to elect a majority
of the directors or Managers (or comparable governing body) of such entity.
(vi) with respect to FAMC, Financial Asset
Management Corporation or M.D.C. Residual Holdings, Inc., a person or persons
other than the Company or its affiliates shall be entitled to elect a majority
of the directors or Managers (or comparable governing body) of such entity.
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M.D.C. HOLDINGS, INC.
By:
---------------------------
Name:
-------------------------
Title:
------------------------
EXECUTIVE
------------------------------
Spencer I. Browne
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SCHEDULE 1
Services for Which Supervisory Fees Are Charged as Referenced in
Section 3(c)(iii)
1. Executive Time
--------------
Larry A. Mizel
David D. Mandarich
Paris G. Reece
John Heaney
Michael Touff
Roger Morgan
2. Treasury Time
-------------
MDC Treasury Department (Including Wire Transfer Function)
3. Risk Management
---------------
MDC Risk Management Department
4. Data Systems
------------
MDC Data Management and Systems, up to $120,000 annually
5. Personnel/Payroll
-----------------
MDC Human Resources and Payroll Departments
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SCHEDULE 2
Salaries and Personnel as Referenced in
Section 3(c)(iii)
1. All compensation, benefits and expenses of Executive arising under this
Agreement, except Annual Incentive Compensation.
2. Rent at $12.75 per rentable square foot for office space occupied by
FAMC.
3. Personnel:
Amezaga, Rosa
Armstrong, Diane
Ellis, Sue
Fox, Leslie
Glinsky, Michael
Ilges, Ginny
Johnson, Laura
Katz, Elazar
Kellogg, Carol
Nystrom, Kevin
O'Neil, Brian
Owen, Lorri
Purcell, Peggy
Reyes-Williams, Rosa
Rosell, Cheryl
Singer, John
Stiefel, Monna
Executive's Assistant
Allon, Harvey (whether as consultant or employee)
4. Legal
5. Corporate Accounting/Tax
6. Internal Audit
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