M.D.C. HOLDINGS, INC. appointed new CEO

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

The information set forth in the Introductory Note and in Item 2.01 of this Current Report is incorporated by reference into this Item 5.02.


In accordance with the terms of the Merger Agreement, as of the Effective Time, the following persons became directors of the Company: Rick Robideau, Larry A. Mizel, David D. Mandarich, Paris G. Reece III, George C. Yeonas, Toru Tsuji, Satoshi Yoshimura, Toru Ishii, Keizo Yoshimoto, Toru Fujita, and Kenichi Kumemoto. The following persons, who were directors of the Company immediately prior to the Effective Time, voluntarily resigned from the Board and the committees of the Board on which they served, if any, at the Effective Time: David Mandarich, Larry Mizel, Paris G. Reece III, Courtney L. Mizel, David E. Blackford, David Siegel, Herbert T. Buchwald, Janice Sinden, Michael A. Berman, Raymond T. Baker, Rafay Farooqui.


Larry A. Mizel founded the Company in 1972 and has served as a Director since its inception. He was appointed Chairman of the Board in 1972 and Chief Executive Officer of the Company in 1988. Then, in October 2020, he was appointed as Executive Chairman. Mr. Mizel has provided the Company with leadership and judgment, previously serving as the Chief Executive Officer and Chairman of the Board of Directors, and now as Executive Chairman, while advancing the long-term interests of the Company's shareholders. One of the most experienced leaders in the homebuilding industry, his knowledge and foresight provide the Board with invaluable guidance. 


David D. Mandarich has been associated with the Company since 1977. He was a Director from September 1980 until April 1989, and has been a Director continuously since March 1994. He was appointed President and Chief Operating Officer of the Company in June 1999. Then, in October 2020, he was appointed President and Chief Executive Officer. A skilled and experienced leader in the homebuilding industry, Mr. Mandarich provides the Board with the benefit of his judgment and his knowledge and understanding of the Company's homebuilding business and operations. Mr. Mandarich is a veteran of the United States Army.


Paris G. Reece III was formerly the Company's Chief Financial Officer and Principal Accounting Officer, and retired on August 1, 2008. Since his retirement, Mr. Reece has performed consulting work and served in a volunteer position as the President of Cancer League of Colorado, a leading non-profit organization that was established over fifty years ago to raise money for cancer research and patient care. He joined the Company's Board of Directors in May 2013. As a Certified Public Accountant (Texas, non-practicing), a former Chief Financial Officer and a highly respected person within the homebuilding industry, Mr. Reece is uniquely qualified to provide the Company with strong oversight of accounting and financial matters, as well as the operation of the Company's homebuilding and financial services businesses.


Toru Tsuji is the Managing Officer of Sekisui House, Chief Executive Officer of SH Residential Holdings, a wholly owned subsidiary of Sekisui House, and is concurrently the Chief Executive Officer of Sekisui House UK, Ltd., a wholly owned subsidiary of Sekisui House. Before joining Sekisui House as head of Business Strategy Officer of the International Business Department in 2019, he worked at Mitsubishi Corporation. He joined Mitsubishi Corporation in 1990 and held various positions in real estate-related business units including as President and Chief Executive Officer of Mitsubishi Corp.-UBS Realty Inc., a former joint venture between Mitsubishi Corporation and UBS AG. 


Rick Robideau is the Chief Financial Officer of SH Residential Holdings, a wholly owned subsidiary of Sekisui House, and has over 30 years of experience in the U.S. homebuilding business in various positions, including President and Chief Financial Officer of Ford Custom Classic Homes, a home builder in Franklin, Tennessee, from October 2008 to April 2010 and Chief Financial Officer for Woodside Homes, a U.S. subsidiary of Sekisui House group, from April 2010 and April 2022. 


Satoshi Yoshimura is the Chief Strategy Officer of SH Residential Holdings, a wholly owned subsidiary of Sekisui House, and has extensive experience in the investment banking and real estate industries. He joined Sekisui House upon the formation of the International Business Department in 2008. Before joining the International Business Department of Sekisui House, he covered Sekisui House as an industry coverage banker at the real estate group at Morgan Stanley. He holds an MBA from the University of California, Berkeley, and a Bachelor of Law from Waseda University in Japan.


Toru Ishii is the Senior Managing Officer in charge of Development Business including International Business at Sekisui House. He joined Sekisui House in April 1990 and has since experienced sales planning work in the urban development business and engaged in developing new markets such as the hotel development business and the office development business. He has been in charge of the development business since 2012, focusing on human resources 


development and demonstrating the comprehensive capabilities of the Sekisui House group. He has been steadily promoting enhancement of the business foundation in new markets and the development of the organizational structure of the Sekisui House group. He has been responsible for International Business since 2019.


Keizo Yoshimoto is the Senior Managing Officer in charge of legal affairs, customer satisfaction promotion and the Board of Directors office at Sekisui House. He joined Sekisui House in 1989 and was in charge of planning and sales for effective land utilization and urban development projects. In 1996, he was assigned to the Legal Department of the General Affairs Division, where he was in charge of risk management and organizational restructuring. In 2009, he was appointed to the position of President's Special Assignment in the Secretarial Department in order to respond to various internal and external matters with flexibility and speed, not limited to legal areas. In 2017, he was appointed as General Manager of the Legal Department, where he has promoted the governance reform of the Sekisui House group and is involved in the operation of the Board of Directors, the Personnel Affairs and Remuneration Committee, management meetings and other corporate bodies.


Toru Fujita is the Managing Officer in charge of Accounting and Finance of Sekisui House and has been the officer in charge of accounting and finance since he joined Sekisui House in June 2022. Prior to that, he spent nearly 31 years with Mitsubishi UFJ Financial Group, including more than ten years of experience in the areas of financial planning and analysis, regulatory and economic capital management and allocation and bond issuance. He was posted in the United States for around ten years, where he worked in New York, New York, at the Head Office for the Americas, San Francisco, California, at Union Bank, and completed a one-year MBA program at the Massachusetts Institute of Technology in Boston, Massachusetts.


Kenichi Kumemoto has 30 years of experience in the energy business and the real estate business, both in Japan and overseas (and in almost all asset types including residential, office, commercial, hotel, and logistics facilities) at Mitsubishi Corporation, a major trading company, and had experience in mergers and acquisitions as well as post-merger integration matters, as the CEO of a retail facility operating company. He has management experiences in the United States, China and the Philippines. In 2021, he was appointed President and CEO of Ascot, a listed residential developer based in Japan, and launched new businesses, such as logistics development and asset management. He joined Sekisui House in 2022 and is in charge of business planning/strategy for the company's international business.


George C. Yeonas has 34 years of experience in the real estate and homebuilding industry, including Chief Operating Officer positions at both public and private homebuilders, and has been an advisor to Woodside Homes since 2016, as well as to SH Residential Holdings, a wholly owned subsidiary of Sekisui House, on the acquisition of Chesmar Homes and MDC Holdings. He has a deep knowledge of real estate/ESG. He also teaches at Georgetown University.


Compensatory Arrangements


Amended and Restated Employment Agreements. On April 19, 2024, the Company entered into amended and restated employment agreements with Messrs. Larry A. Mizel and David D. Mandarich (the "Amended Employment Agreements") which provide for: (i) continued employment (in their current roles) through December 31, 2025 (the "Initial Term"), which will automatically renew for additional one-year terms (the "Additional Term"), unless Parent provides at least 60 days' prior written notice of its intention not to renew the applicable term; (ii) base salary of $1,000,000 and continued benefits during 2024 and 2025 at the same levels in effect prior to the consummation of the Merger; (iii) target annual bonus opportunities (each, an annual "Target Award"), with a minimum annual award equal to 50% of the Target Award and a maximum annual award equal to 200% of the Target Award for calendar years 2024 and 2025 based on level of attainment of the applicable performance goals; (iv) if either Messrs. Mizel and Mandarich experiences a termination by the Company (x) without cause (including a termination due to death, presumed death or the executive becoming totally disabled, but not including any resignation or retirement) prior to the end of the Initial Term, payment of any accrued but unpaid benefits and cash severance in an amount equal to


the aggregate base salary and Target Award that could have been earned had the executive remained employed through the remainder of the Initial Term and (y) without cause prior to the end of the Additional Term, cash severance in an amount equal to the aggregate base salary and Target Award that could have been earned had the executive remained employed through the remainder of the Additional Term and the next successive Additional Term; and (v) continued lifetime group health insurance coverage (medical, dental and vision coverage for each executive and for each executive's spouse for the remainder of each executive's lifetime and, if applicable, coverage for each executive's spouse for an additional 60 months following each executive's death or presumed death). The Amended Employment Agreements also provide for a one-time lump-sum cash transaction bonus payment equal to the amount of cash severance that Messrs. Mizel and Mandarich would have otherwise been entitled to receive had there been a qualifying termination of their employment as of the consummation of the Merger (based on each executive's severance entitlement as calculated on December 31, 2023) in lieu of the cash severance that would have been payable under such employment agreements. The amount of the transaction bonus is $33 million and $21 million for Messrs. Mizel and Mandarich, respectively.


Amended Change in Control Agreements. On April 19, 2024, the Company entered into amended change in control agreements with Messrs. Robert N. Martin and Michael L. Kaplan (the "Amended Change in Control Agreements"), which provide for: (i) a cash transaction bonus payable upon the consummation of the Merger, equal to the cash severance amount each executive would have otherwise been entitled to receive under their existing change in control agreements had a qualifying termination occurred on or following the consummation of the Merger; (ii) benefits continuation for 12 months upon a termination for any reason within two years following the consummation of the Merger, and (iii) accelerated vesting of all unvested equity awards effective as of the consummation of the Merger. The amount of the cash transaction bonus is $2.55 million and $1.425 million for Messrs. Martin and Kaplan, respectively.