Exhibit 10.7
CHANGE IN CONTROL AND SEPARATION
AGREEMENT
AGREEMENT, dated as of July 14,
2008, by and between M.D.C. Holdings, Inc. (the
“Company”), and Christopher M. Anderson (the
“Employee”).
WHEREAS, the Employee currently is
employed by the Company as its Senior Vice President –
Finance, and it is anticipated that the Board of Directors will
appoint Employee to the position of Senior Vice President, Chief
Financial Officer and Principal Accounting Officer, and the
Employee is willing to continue to serve in the employ of the
Company; and
WHEREAS, the Company desires to
provide additional compensation to the Employee in the form of
certain termination benefits, but only in the event of a
“Change in Control” of the Company or the
Company’s termination of Employee’s employment other
than for cause, death or disability as hereinafter
provided;
NOW, THEREFORE, in consideration of
the mutual promises and agreements hereinafter set forth, the
Company and the Employee agree as follows:
1. Term . The term of this
Agreement shall begin on July 14, 2008 and shall continue
until the earlier of the date of termination of Employee’s
employment, including pursuant to Section 3 or Section 4
below or December 31, 2010; provided, however, that, unless
either party otherwise elects by notice in writing delivered to the
other by September 30, 2010, 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, and provided, further,
that if this Agreement has not terminated prior to a Change in
Control, then upon a Change in Control the term of this Agreement
shall automatically extend for a period of two years following such
Change in Control (the “Agreement Term”). The Company
and Employee each acknowledge that the Employee’s employment
by the Company is and shall remain at will, and that this Agreement
shall only govern termination benefits in the event of a Change in
Control or the Company’s termination of Employee’s
employment other than for cause, death or disability.
2. Consideration .
In addition to all compensation and
benefits currently provided or in the future to be provided to the
Employee pursuant to the Employee’s employment by the
Company, upon the occurrence of a “Change in Control”
as defined in Appendix A to this Agreement, or the Company’s
termination of Employee’s employment other than for cause,
death or disability, the Employee shall be entitled to receive
termination of employment benefits as provided in Section 3 or
Section 4 hereof, as the case may be.
3. Termination Upon Change in
Control .
(a) If a Change in Control occurs,
all options, dividend equivalents and other rights granted to the
Employee under any Company equity incentive plans shall be
accelerated and shall become exercisable immediately prior to the
closing of the
Change in Control so as to permit
the Employee fully to exercise all outstanding options and rights.
If the Change in Control is not consummated, the Employee’s
election to exercise such options and rights pursuant hereto shall
be of no effect and the Employee’s options shall remain
subject to the restrictions to which they were originally
subject.
(b) If a “Change in Control
Event” (as defined in Appendix A to this Agreement) occurs,
the Employee shall, if the Employee so elects by written notice to
the Company within 90 days after such Change in Control Event, be
entitled to terminate the Employee’s employment, if not
already terminated by the Company, and in either event to receive
an amount equal to the sum of (i) Employee’s annual base
salary at the rate in effect immediately before the Change in
Control Event and (ii) an amount equal to Employee’s
target annual bonus for the current year.
(c) If a Change in Control Event
occurs, the Employee shall also be entitled to continue to
participate in each of the Company’s employee benefit plans,
policies or arrangements which provide insurance and medical
benefits on the same basis as was provided to the Employee prior to
the Change in Control Event for a period of twelve months after the
date of termination of Employee’s employment.
(d) Change in Control
Payments .
(i) The payments set forth in this
Section shall be in addition to any payments that otherwise would
be payable to the Employee pursuant to any agreement, benefit plan,
severance policy or similar plan of the Company.
(ii) Notwithstanding anything to the
contrary herein, if the aggregate amounts payable pursuant to
Sections 3(a), (b) and (c) hereof, either alone or
together with any other payments which the Employee 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 Employee 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 Section 3(d)(ii) shall be
made by an 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.
(iii) The amounts payable pursuant
to this Section 3 shall be paid (or commence to be paid if
payable in installments pursuant to Section 3(d)(ii) above) to
the Employee not later than 10 days after the Employee’s
termination of employment.
4. Termination of Employment
Other Than for Cause, Death or Disability .
(a) If the Company terminates
Employee’s employment other than for “Cause” (as
defined in Appendix A), death or “Disability” (as
defined below) under circumstances where the Employee is not
entitled to payment under Section 3 above, the Employee shall
receive an amount equal to the sum of (i) Employee’s
annual base salary at the rate in effect immediately before the
termination of employment and (ii) an amount equal to
Employee’s target annual bonus for the current
year.
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(b) Notwithstanding anything to the
contrary herein, if the aggregate amounts payable pursuant to
Section 4(a), either alone or together with any other payments
which the Employee 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 Employee 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
Section 3(d)(ii) shall be made by an independent public
accounting firm with
