EXHIBIT
4.3(c)
Form of Director Non-Statutory Option
M.D.C. HOLDINGS, INC.
DIRECTOR EQUITY INCENTIVE PLAN
NON-STATUTORY OPTION AGREEMENT
THIS AGREEMENT is made on and as of ______________, 19___ (the "Date of
Grant") between M.D.C. HOLDINGS, INC., a Delaware corporation (the "Company"),
and _______________________ (the "Eligible Director") pursuant to the provisions
of the Company's Director Equity Incentive Plan (the "Plan"). The parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall have
the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates. Capitalized terms not
otherwise defined in this Agreement shall have the meaning specified in the
Plan.
SECTION 1.1 - OPTION
"Option" shall mean the non-statutory option to purchase Common Stock, $.01
par value (the "Common Stock"), of the Company granted under this Agreement.
SECTION 1.2 - TERMINATION OF DIRECTORSHIP
"Termination of Directorship" shall mean the time when the Eligible
Director ceases to be a Director of the Company for any reason, with or without
cause, including, but not by way of limitation, a termination by resignation,
removal, death, retirement or failure to be re-elected by the Company's
stockholders.
ARTICLE II
GRANT OF OPTION
SECTION 2.1 - GRANT OF OPTION
In consideration of good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, on the date hereof, the Company
irrevocably grants to the Eligible Director
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the option to purchase any part or all of an aggregate of ______ shares of its
Common Stock upon the terms and conditions set forth in this Agreement.
SECTION 2.2 - PURCHASE PRICE
The purchase price of the shares of Common Stock covered by the Option
shall be $__________ per share without commission or other charge. (1)
SECTION 2.3 - NO RIGHT TO CONTINUED MEMBERSHIP ON THE BOARD
Nothing in this Agreement or in the Plan shall confer upon the Eligible
Director any right to continue as a Director of the Company or shall interfere
with or restrict in any way the rights of the Company and its stockholders,
which are hereby expressly reserved, to remove the Eligible Director at any time
for any reason whatsoever, with or without good cause.
SECTION 2.4 - ADJUSTMENTS IN OPTION
In the event that the outstanding shares of the Common Stock subject to the
Option are changed into or exchanged for a different number or kind of shares of
the Company or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, stock split-up, stock
dividend, combination of shares, rights offering, issuance of warrants or
otherwise, the Committee shall make an appropriate and equitable adjustment in
the number and kind of shares as to which all outstanding Options, or portions
thereof then unexercised, shall be exercisable, to the end that after such event
the optionee's proportionate interest shall be maintained as before the
occurrence of such event. Such adjustment in an outstanding Option shall be
made without change in the total price applicable to the Option or the
unexercised portion of the Option (except for any change in the aggregate price
resulting from rounding off of share quantities or prices) and with any
necessary corresponding adjustment in the Purchase Price per share.
ARTICLE III
PERIOD OF EXERCISABILITY
SECTION 3.1 - COMMENCEMENT OF EXERCISABILITY
The Option shall become exercisable six months after the Date of Grant.
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(1) The purchase price shall be 100% of the Fair Market Value of a share of
Common Stock on the Date of Grant.
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SECTION 3.2 - EXPIRATION OF OPTION
The Option may not be exercised to any extent by anyone after the first to
occur of the following events:
(a) The expiration of five years from the Date of Grant; or
(b) The expiration of one year from the date of the Director's
Termination of Directorship by reason of the Director's death; or
(c) The date of the Director's Termination of Directorship if such
Termination of Directorship was for cause as determined by the Board.
SECTION 3.3 - ACCELERATION OF EXERCISABILITY
(a) Notwithstanding the provisions in Section 7.3 of the Plan, but
subject to Sections 3.1, 3.3(c) and 3.3(d) hereof, the Option, or any
portion thereof, granted under this Agreement that is not yet exercisable
shall become exercisable immediately prior to the occurrence of a merger or
consolidation of the Company with or into another corporation, the
acquisition by another corporation or person of all or substantially all of
the Company's assets or 80% or more of the Company's then outstanding
voting stock or the liquidation or dissolution of the Company (each, a
"Transaction"). At least ten days prior to the effective date of such
Transaction, the Company shall give the Eligible Director holding the
Option notice of such event if the Option has not been fully exercised.
During this ten-day period, the Director electing to exercise his or her
Options shall comply with all of the requirements of Sections 4.3 and 4.4
of this Agreement. In the event that such Transaction becomes effective,
the Option so exercised shall be deemed to have been exercised immediately
prior to the effective date of such Transaction. In the event that such
Transaction fails to transpire, the Director's election under this
paragraph shall be of no effect and the Director's Option shall remain
subject to the restrictions to which it was originally subject.
(b) In the event that a Transaction occurs, the Option, or any
portion thereof, that is not exercised prior to the occurrence of a
Transaction shall be cancelled, and the Director holding such cancelled
Option shall receive in exchange therefor a cash payment equal to the
greater of (i) the Fair Market Value (as determined under Section 1.9 of
the Plan) of a share of Common Stock measured on the date immediately prior
to such Transaction less the per share exercise price set forth in the
Director's Option, multiplied by the number of shares of Common Stock
purchasable under the Option; or (ii) the fair market value, as determined
by the Board, of the cash, securities or other consideration into which a
share of Common Stock is to be exchanged pursuant to the Transaction, less
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the exercise price set forth in the Director's Option, multiplied by the
number of shares of Common Stock purchasable under the Option.
(c) Notwithstanding the foregoing, Options that are not exercisable
on the date of a Transaction shall only become exercisable as described in
subsection (a) hereof or cancelled and settled for cash or other
consideration as described in subsection (b) hereof to the extent that such
exercise and issuance of shares of Common Stock or payment with respect to
the Director continues to be deductible by the Company pursuant to
Section 280G of the Code. All determinations in applying this Section 3.3
shall be made by the Board, and all such determinations shall be final and
binding on the Director, the Company and any interested party.
(d) Notwithstanding the foregoing, no such acceleration of
exercisability described in subsection (a) hereof or cancellation and
settlement described in subsection (b) hereof shall take place if:
(i) The Director's Option becomes unexercisable under
Section 3.2; or
(ii) In connection with a Transaction, provision is made for an
assumption of the Director's Option or a substitution therefor of a
new Option by the resulting or acquiring corporation or a parent or
subsidiary of such corporation under similar terms and conditions as
reflected in this Agreement.
ARTICLE IV
EXERCISE OF OPTION
SECTION 4.1 - PERSON ELIGIBLE TO EXERCISE
During the lifetime of the Eligible Director, only he may exercise the
Option or any portion thereof. After the death of the Eligible Director, any
exercisable portion of the Option may, prior to the time when such portion
expires or becomes unexercisable under Sections 3.2 or 3.3, be exercised by his
personal representative or by any person empowered to do so under the deceased
Eligible Director's will or under the then applicable laws of descent and
distribution.
SECTION 4.2 - PARTIAL EXERCISE
Any exercisable portion of the Option or the entire Option, if then wholly
exercisable, may be exercised in whole or in part at any time prior to the time
when the Option or portion thereof becomes unexercisable under Sections 3.2 or
3.3; provided, however, that each partial exercise shall be for not less than
100 shares and shall be for whole shares only.
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SECTION 4.3 - MANNER OF EXERCISE
The Option, or any exercisable portion thereof, may be exercised solely by
delivery to the Director of Stockholder Relations of all of the following prior
to the time when the Option or such portion becomes unexercisable under Sections
3.2 or 3.3:
(a) Notice in writing signed by the Eligible Director or other person
then entitled to exercise the Option or portion, stating that the Option or
portion thereof is exercised, such notice complying with all applicable
rules established by the Committee and in such form as determined by the
Secretary of the Company; and
(b) (i) Full payment (by check) for the shares with respect to which
the Option or portion is thereby exercised; or
(ii) Subject to the Committee's consent, full payment by
delivery to the Company of shares of the Common Stock owned by the Eligible
Director duly endorsed for transfer to the Company by the Eligible Director
or other person entitled to exercise the Option or portion thereof, with a
Fair Market Value on the date of delivery equal to the Option price of the
shares with respect to which such Option or portion thereof is thereby
exercised; or
(iii) Any combination of the consideration provided in the
foregoing subsections (i) and (ii); and
(c) In the event the Option or portion thereof shall be exercised
pursuant to Section 4.1 by any person or persons other than the Eligible
Director, appropriate proof of the right of such person or persons to
exercise the Option or portion thereof.
SECTION 4.4 - CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES
(a) The Common Stock shall not be issued in respect of the Option
granted hereunder unless the exercise of the Option and the issuance and
delivery of shares of Common Stock pursuant thereto shall comply with all
relevant provisions of law, including the law of the Company's state of
incorporation, the Securities Act, the Exchange Act, the rules and
regulations thereunder and the requirements of any stock exchange upon
which the Common Stock may then be listed, and shall be further subject to
the approval of the Company's counsel with respect to such compliance.
(b) The Plan, this Agreement and the grant and exercise of the Option
to purchase shares of Common Stock hereunder, and the Company's obligation
to sell and deliver shares upon the exercise of rights to purchase shares,
shall be subject to all applicable federal and state laws, rules and
regulations, and to such approvals by any
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regulatory or governmental agency which may, in the opinion of counsel for
the Company, be required.
SECTION 4.5 - RIGHTS AS STOCKHOLDER
The holder of the Option shall not be, or have any of the rights or
privileges of, a stockholder of the Company in respect of any shares purchasable
upon the exercise of any part of the Option unless and until certificates
representing such shares shall have been issued by the Company to the holder.
ARTICLE V
OTHER PROVISIONS
SECTION 5.1 - ADMINISTRATION
The Committee shall have the power to interpret the Plan and this Agreement
and to adopt such rules for the administration, interpretation and application
of the Plan as are consistent therewith and to interpret, amend or revoke any
such rules. All actions taken and all interpretations and determinations made
by the Committee in good faith shall be final and binding upon the Eligible
Director, the Company and all other interested persons. No member of the
Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Option, and
all members of the Committee shall be fully protected by the Company with
respect to any such action, determination or interpretation. In its absolute
discretion, the Board may at any time and from time to time exercise any and all
rights and duties of the Committee under the Plan and this Agreement.
SECTION 5.2 - OPTION SUBJECT TO TERMS OF PLAN
This Option Agreement and the rights of the Eligible Director hereunder are
subject to all the terms and conditions of the Plan, as the same may be amended
from time to time, as well as to such rules and regulations as the Committee may
adopt for administration of the Plan. In the event of any inconsistency between
this Option Agreement and the Plan, the Plan shall control.
SECTION 5.3 - OPTION NOT TRANSFERABLE
Neither the Option nor any interest or right therein or part thereof shall
be subject to the debts, contracts or engagements of the Eligible Director or
his successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect;
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provided, however, that this Section 5.3 shall not prevent transfers by will or
by the applicable laws of descent and distribution.
SECTION 5.4 - NOTICES
Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of its Director of Stockholder
Relations, and any notice to be given to the Eligible Director shall be
addressed to the director at the address on the signature page hereto. By a
notice given pursuant to this Section 5.4, either party may hereafter designate
a different address for notices. Any notice which is required to be given to
the Eligible Director shall, if the Eligible Director is then deceased, be given
to the Eligible Director's personal representative if such representative has
previously informed the Company of his status and address by written notice
under this Section 5.4. Any notice shall be deemed duly given when enclosed in
a properly sealed envelope or wrapper addressed as aforesaid, deposited (with
postage prepaid) in a post office or branch post office regularly maintained by
the United States Postal Service.
SECTION 5.5 - TAX WITHHOLDING
The Company shall be entitled to require payment or deduction from other
compensation payable to the Eligible Director of any sums required by federal,
state or local tax law to be withheld with respect to the Option or any portion
thereof. The Eligible Director may elect to have the Company withhold shares of
Common Stock (or allow the return of shares of Common Stock) having a Fair
Market Value equal to the sums required to be withheld. If the Eligible
Director elects to advance such sums directly, written notice of that election
shall be delivered on or prior to such exercise and, whether pursuant to such
election or pursuant to a requirement imposed by the Company, payment by check
of such sums for taxes shall be delivered within two days after the date of
exercise. If the Eligible Director elects to have the Company withhold shares
of Common Stock (or allow the return of shares of Common Stock) having a Fair
Market Value equal to the sums required to be withheld, the value of the shares
of Common Stock to be withheld (or returned as the case may be) will be equal to
the Fair Market Value of such shares on the date that the amount of tax to be
withheld is to be determined (the "Tax Date"). An election by the Eligible
Director to have shares of Common Stock withheld for this purpose will be
subject to the following restrictions: (1) the election must be made on or
prior to the Tax Date; (2) the election must be irrevocable; (3) the election
shall be subject to the disapproval of the Committee; and (4) the election shall
be subject to such additional restrictions as the Committee may impose in an
effort to secure the benefits of any regulations under Section 16 of the
Exchange Act. The Committee shall not be obligated to issue shares to the
Eligible Director upon exercise of the Option or portion thereof until such
payment has been received or shares have been so withheld, unless withholding
(or offset against a cash payment) as of or prior to the date of such exercise
is sufficient to cover all such sums due or which may be due with respect to
such exercise.
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SECTION 5.6 - COMPLIANCE WITH RULE 16b-3
With respect to persons subject to Section 16 of the Exchange Act,
transactions under this Agreement are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the
extent any provision of the Plan, this Agreement or action by the Committee
fails to so comply, it shall be deemed null and void, to the extent permitted by
law, and deemed advisable by the Committee.
SECTION 5.7 - TITLES
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.
SECTION 5.8 - CONSTRUCTION
This Agreement shall be administered, interpreted and enforced under the
laws of the State of Delaware.
IN WITNESS WHEREOF, the parties have caused this Option Agreement to be
executed as of the Date of Grant.
M.D.C. HOLDINGS, INC.
By: ________________________________________
Name: __________________________________
Title: _________________________________
Director's Signature
(Print Name)
Address
Taxpayer Identification Number
or Social Security Number
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