EXHIBIT 10.1
EMPLOYMENT AND CONSULTING AGREEMENT
THIS EMPLOYMENT AND CONSULTING
AGREEMENT (this “Agreement”) is made effective as of
April 10, 2008 (the “Effective Date”) by and
between Paris G. Reece III (“Mr. Reece”) and
M.D.C. Holdings, Inc., a Delaware corporation (the
“Company”).
WHEREAS, Mr. Reece will retire
as an officer of the Company effective at the close of business on
the Retirement Date (as defined below); and
WHEREAS, Mr. Reece has been a
loyal and effective employee of the Company and deserves to be
rewarded for his service to the Company; and
WHEREAS, Mr. Reece and the
Company have announced that, after the date of his retirement as an
officer of the Company, Mr. Reece will continue to provide
services to the Company on a more limited basis.
NOW, THEREFORE, the parties agree as
follows:
1. Retirement from Officer
Positions; Continued Employment; Consulting . From the
Effective Date of this Agreement through the Retirement Date,
Mr. Reece will remain employed by the Company on the same
terms of his employment as of the Effective Date, and will continue
to receive the same compensation and benefits. Mr. Reece
confirms that, effective as of the close of business on the
Retirement Date, he will retire from all officer and director
positions with the Company and the Company’s subsidiaries.
The Company and Mr. Reece hereby confirm that Mr. Reece
will continue to be employed as an employee of the Company for the
term set forth below, and will thereafter continue his services as
a consultant. On or before the next business day following the
Retirement Date, the Company will pay Mr. Reece: (i) a
lump sum payment constituting his pro-rated annual bonus for 2008
(pro-rated through the Retirement Date and calculated on the basis
of $54,275 per month or $1,787.67 per day); (ii) a lump sum
payment consisting of his accrued and unused vacation as of the
Retirement Date, computed based upon his compensation as of that
date; and (iii) a lump sum payment of $17,876.70. These
amounts will be subject to applicable withholding.
1.1 The “Retirement Date”
shall mean the later of (a) the close of business on
August 1, 2008, or (b) the close of business on the first
business day following the filing of the Company’s quarterly
report on Form 10-Q for the period ending June 30, 2008 and
the occurrence of the Company’s earnings release conference
call for that period.
2. Employment Term .
Following the effective date of his retirement, Mr. Reece will
continue to be employed as a Company employee for a term commencing
on the first calendar day following the Retirement Date and ending
at the close of business on December 31, 2008
(“Employment Term”). As an employee, Mr. Reece
will perform the duties outlined in Section 4.1 below. Mr.
Reece’s employment with the Company will terminate effective
as of the close of business on December 31, 2008.
Mr. Reece shall return all property in the possession of
Mr. Reece which is owned by the Company at the close of
business on December 31, 2008 (with the exception of the items
identified in Section 6.3 below). This Agreement may be
terminated earlier pursuant to Section 8 below.
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3. Consulting Term .
Effective as of January 1, 2009, and continuing through
December 31, 2009 (“Consulting Term”), the Company
agrees to engage Mr. Reece as an independent contractor to
perform the duties outlined in Section 4.2 below.
4. Duties .
4.1. During the Employment Term,
Mr. Reece will perform functions and duties within the scope
of and consistent with the functions and duties performed while he
was an officer of the Company, as they may be reasonably assigned
by the Company’s Chief Operating Officer; provided that Mr.
Reece will not be responsible for the public reporting requirements
of the Company. Mr. Reece will report directly to the
Company’s Chief Operating Officer. Mr. Reece will not
supervise any Company employees or other personnel.
4.2. During the Consulting Term,
Mr. Reece will perform certain of the same functions and
duties described above, as agreed upon by the parties, when the
need for such work arises.
4.3. The duties performed by
Mr. Reece during the Employment Term and the Consulting Term
will not exceed 10 hours per week.
5. Responsibilities .
Mr. Reece agrees to observe, abide by and comply with all
corporate policies and procedures of the Company. Mr. Reece
hereby certifies that, since he last signed a Certificate of
Compliance, he is not aware of any violations of the
Company’s Corporate Code of Conduct that have not been
reported to the other members of the Company’s Compliance
Committee.
6. Compensation and
Benefits.
6.1 During the Employment Term:
6.1.1 Mr. Reece will receive a
gross salary of $20,000 per month (to be prorated for any partial
months), less applicable deductions and deductions required by law,
payable on the Company’s regular pay dates.
6.1.2 Mr. Reece will continue to
vest in the Company’s 401(k) plan, according to its terms;
will be eligible for the 2008 Company’s
401(k) matching contribution, if Mr. Reece remains employed
through December 31, 2008; will continue to vest in any equity
awards under the 2001 Equity Incentive Plan (the
“Plan”), according to the terms of that Plan and any
award agreements or certificates (“Award Agreements”);
and will continue to use the Glenmoor Country Club membership on
the same terms as prior to the Retirement Date.
6.1.3 The Company will pay the
employer’s cost and Mr. Reece will pay the
employee’s cost, if any, for Mr. Reece to continue his
coverage under all of the Company’s insurance plans that
Mr. Reece had in place on the Retirement Date. Since
Mr. Reece will no longer be a Company officer and not be
eligible to continue in the Exec-U-Care program after the
Retirement Date, Mr. Reece shall be responsible for obtaining
and paying the cost of COBRA coverage for the Exec-U-Care
program.
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6.1.4 At the close of business on
December 31, 2008, (i) Mr. Reece will be fully
vested in all shares of restricted stock that were previously
awarded to him and that are unvested as of that date; and
(ii) the Company will assign and/or relinquish its rights to
Mr. Reece to the Glenmoor Country Club membership that
Mr. Reece has been using, and Mr. Reece will pay all
applicable assignment fees, if any. Mr. Reece will be
responsible for all local, state, federal taxes on this
compensation.
6.1.5 Except as set forth above,
Mr. Reece will receive no benefits including, without
limitation, vacation, sick leave, retirement benefits, disability
benefits or any other employer provided benefit or fringe
benefit.
6.2 During the Consulting Term:
6.2.1 Mr. Reece will receive
compensation in the gross amount of $20,000 per month (to be
prorated for any partial months) payable on or before the 10
th day
of each month or, at the Company’s discretion, on the
Company’s payroll dates for the work to be performed that
month. Mr. Reece shall be entitled only to this compensation
and to no other compensation whatsoever. MR. REECE WILL BE
RESPONSIBLE FOR ALL LOCAL, STATE, FEDERAL AND SELF-EMPLOYMENT TAXES
ON THIS COMPENSATION.
6.2.2 The Company will reimburse
Mr. Reece for reasonable out of pocket expenses (other than
commuting expenses incurred in the metropolitan Denver area)
incurred in the performance of the Company’s business.
6.2.3 Mr. Reece will not receive
any benefits including, without limitation, any medical plan
benefits. Mr. Reece shall be responsible for obtaining and
paying the cos
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