Amendment to M.D.C. Holdings, Inc. 401(k) Savings Plan (Effective January 1, 1997, as Amended January 1, 2006)
This amendment updates the M.D.C. Holdings, Inc. 401(k) Savings Plan to limit participants' investments in company stock to 30% of their account balance, effective January 1, 2006. Participants exceeding this limit cannot direct new contributions to company stock until their holdings fall below the cap. The amendment also requires participants to invest in at least one fund other than the company stock fund, with default options applied if no choice is made. Additionally, discretionary matching contributions for 2005 will be made in company stock unless a participant's holdings already exceed 25%, in which case the match will be in cash.
Exhibit 10.40
AMENDMENT
TO
M.D.C. HOLDINGS, INC. 401(K) SAVINGS PLAN
(as Effective January 1, 1997)
Effective as of January 1, 1997, M.D.C. Holdings, Inc., a Delaware corporation (the “Employer”) established the M.D.C. Holdings, Inc. 401(k) Savings Plan (the “Plan”). Pursuant to Section 13.02 of the Plan, the Plan is hereby amended through the amendment of the Non-Standardized Adoption Agreement and the Defined Contribution Prototype Plan as set forth below:
AMENDMENTS:
1. Section 10.03(F) of the Plan is hereby amended by adding the following to the end thereof:
Effective as of January 1, 2006, Participants shall be restricted to investment in a “Set Percentage” of qualifying Employer securities (“Employer Stock”). The Set Percentage shall be 30% of the Participant’s total account balance. If the percentage of a Participant’s investment in Employer Stock exceeds the Set Percentage on or after the effective date of the Amendment, the Participant will not be compelled to sell Employer Stock in excess of the Set Percentage. However, the Participant may not direct any future contributions to be invested in Employer Stock until the Participant’s investment in Employer Stock is below the Set Percentage.
2. A new Section 8.06(E) is hereby added providing as follows:
Effective as of January 1, 2006, in order to ensure that each Participant has an investment option in a fund other than the fund that invests primarily in Employer Stock, Participants who have elected only the MDC Stock Fund will be required to make at least one additional fund election. If no additional election is made by the Participant, the Participant will be enrolled in the Plan’s default election fund. If the Participant account is invested in Employer Stock in excess of the Set Percentage, any further contributions will be directed to an alternate fund and not to a fund that invests primarily in Employer Stock.
3. A new Section 3.03(A) is hereby added providing as follows:
Effective as of October 24, 2005, the 2005 discretionary matching contribution, if any, made to Participant accounts will be made in Employer Stock, unless the portion of the eligible Participant’s account balance invested in Employer Stock is greater than 25% as of December 31, 2005. If an eligible Participant’s investment in Employer Stock is greater than 25% of the Participant’s total account balance as of December 31, 2005, the Employer’s discretionary matching contribution, if made, will be in cash.
* * *
