INDEMNIFICATION
AGREEMENT
This Agreement , effective as of
the ___day of ___, ___, is between M.D.C. Holdings, Inc., a Delaware
corporation (the “Company”), and
,
(“Indemnitee”).
Whereas, it is essential to the
Company to retain and attract as directors the most capable persons
available; and
Whereas , Indemnitee is a
director of the Company; and
Whereas, both the Company and
Indemnitee recognize the increased risk of litigation and other
claims being asserted against directors of public companies;
and
Whereas , the Bylaws of the
Company require the Company to indemnify its directors to the full
extent permitted by law and Indemnitee has been serving and
continues to serve as a director of the Company, in part, in
reliance on such Bylaws; and
Whereas, in recognition of
Indemnitee’s need for substantial protection against personal
liability in order to maintain Indemnitee’s continued service
to the Company in an effective manner and Indemnitee’s
reliance on the aforesaid Bylaws and, in part, to provide
Indemnitee with specific contractual assurance that the protection
promised by such Bylaws will be available to Indemnitee (regardless
of, among other things, any amendment to or revocation of such
Bylaws or any change in the composition of the Company’s
Board of Directors or any acquisition transaction relating to the
Company), the Company desires to provide in this Agreement for the
indemnification of and the advance of expenses to Indemnitee to the
full extent (whether partial or complete) permitted by law, as set
forth in this Agreement and, to the extent officers’ and
directors’ liability insurance is maintained by the Company,
to provide for the continued coverage of Indemnitee under the
Company’s officers’ and directors’ liability
insurance policies;
Now, Therefore , in consideration
of the covenants contained herein and of Indemnitee’s
continuing service to the Company directly or, at its request,
other enterprises, and intending to be legally bound hereby, the
parties hereto agree as follows:
(a)
Change in Control. A Change in Control shall be deemed to
have occurred if (i) any “person” (as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended), other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or a
corporation owned directly or indirectly by the stockholders of the
Company in substantially the same proportions as their ownership of
stock of the Company, is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company representing
20% or more of the total voting power represented by the
Company’s then outstanding Voting Securities, or
(ii) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board of
Directors of the Company and any new director whose election by the
Board of Directors or nomination for election by the
Company’s stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either
were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute a majority of the Board of Directors, or
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than
a merger or consolidation which would result in the Voting
Securities of the Company outstanding immediately prior to such a
merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into Voting Securities
of the surviving entity) at least 80% of the total voting power
represented by the Voting Securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation, or the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company (in one transaction or a series of
transactions) of all or substantially all the Company’s
assets.
(b)
Claim . Any threatened, pending or completed action suit,
investigation or proceeding, and any appeal thereof, whether civil,
criminal, administrative or investigative and/or any inquiry or
investigation, whether conducted by the Company or any other party
that Indemnitee in good faith believes might lead to the
institution of any such action.
(c)
Expenses . Include attorneys’ fees and all other
costs, expenses, and obligations paid or incurred in connection
with investigating, defending, being a witness in or participating
in (including on appeal), or preparing to defend, be a witness in
or participate in any Claim relating to any Indemnifiable
Event.
(d)
Indemnifiable Event . Any event, occurrence or circumstance
related to the fact that Indemnitee is or was a director or officer
of the Company, or is or was serving at the request of the Company
as a director, officer, employee, trustee, agent or fiduciary of
another corporation, partnership, joint venture, employee benefit
plan, trust or other enterprise, or by reason of anything done or
not done by Indemnitee in any such capacity.
(e)
Potential Change in Control . Shall be deemed to have
occurred if (i) the Company enters into an agreement or
arrangement, the consummation of which would result in the
occurrence of a Change in Control; (ii) any person (including
the Company) publicly announces an intention to take or to consider
taking actions which if consummated would constitute a Change in
Control; (iii) any person (other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company
acting in such capacity or a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company), who
is or becomes the beneficial owner, directly or indirectly, of
securities of the Company representing 10% or more of the combined
voting power of the Company’s then outstanding Voting
Securities increases his beneficial ownership of such securities by
5% or more over the percentage so owned by such person on the date
hereof; or (iv) the Board adopts a resolution to the effect
that, for purposes of this Agreement, a Potential Change in Control
has occurred.
(f)
Reviewing Party . Any appropriate person or body consisting
of a member or members of the Company’s Board of Directors
including the Special Independent Counsel referred to in
Section 3 (or, to the fullest extent permitted by law, any
other person or body appointed by the Board), who is not a party to
the particular claim for which Indemnitee is seeking
indemnification.
(g) Voting Securities . Any securities of the Company
which vote generally in the election of directors.
2. Basic
Indemnification Arrangement.
(a) In the
event Indemnitee was, is or becomes a party to or witness or other
participant in, or is threatened to be made a party to or witness
or other participant in, a Claim by reason of (or arising in part
out of) an Indemnifiable Event, the Company shall indemnify
Indemnitee to the fullest extent permitted by law, as soon as
practicable but in any event no later than thirty days after
written demand is presented to the Company, against any and all
expenses, judgments, fines, penalties and amounts paid in
settlement (including all interest, assessments and other charges
paid or payable in connection with or in respect of such expenses,
judgments, fines, penalties or amounts paid in settlement) of such
Claim. Notwithstanding anything in this Agreement to the contrary,
prior to a Change in Control Indemnitee shall not be entitled to
indemnification pursuant to this Agreement in connection with any
Claim initiated by Indemnitee against the Company or any director
or officer of the Company unless the Company has joined in or
consented to the initiation of such Claim. If so requested by
Indemnitee, the Company shall advance (within two business days of
such request) any and all Expenses to Indemnitee (an “Expense
Advance”).
(b) Notwithstanding
the foregoing, (i) the obligations of the Company under
Section 2(a) shall be subject to the condition that any Reviewing
Party shall not have determined (in a written opinion, in any case
in which the Special Independent Counsel referred to in
Section 3 hereof is involved) that Indemnitee would not be
permitted to be indemnified under applicable law, and (ii) the
obligatio
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