SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. _____)

Filed by the Registrant |X|

Filed by a Party other than the Registrant |_|

Check the appropriate box:

|_| Preliminary Proxy Statement

|_| Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))

|X| Definitive Proxy Statement

|_| Definitive Additional Materials

|_| Soliciting Material Pursuant to ss.240.14a-12

Dominion Homes, Inc.
(Name of Registrant as Specified In Its Charter)

-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)

Payment of filing fee (Check the appropriate box):

|X| No fee required.

|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

____________________________________________________________________
(2) Aggregate number of securities to which transaction applies:

____________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction: ___________________

(5) Total fee paid: ____________________________________________________

|_| Fee paid previously with preliminary materials.

|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid: ____________________________________________

(2) Form, Schedule or Registration Statement No.: ______________________

(3) Filing Party: ______________________________________________________

(4) Date Filed: ________________________________________________________

DOMINION HOMES, INC.
5000 Tuttle Crossing Boulevard
P.O. Box 5000
Dublin, Ohio 43016-5555

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To Our Shareholders:

You are cordially invited to attend our 2004 annual meeting of
shareholders which will be held at our headquarters, 5000 Tuttle Crossing
Boulevard, Dublin, Ohio, on Wednesday, May 12, 2004, at 9:00 a.m., local time.
The annual meeting is being held for the following purposes:

(1) To elect (a) one Class I director to fill the vacancy created by the
expansion of the Board of Directors to ten (10) members, such
director to serve for a one-year term expiring at the 2005 annual
meeting of shareholders, or until his successor has been elected or
appointed, and (b) five Class II Directors, each to serve for a
two-year term expiring at the 2006 annual meeting of shareholders,
or until their respective successors have been elected or appointed.

(2) To act on a proposal to approve the Dominion Homes, Inc. Amended and
Restated 2003 Stock Option and Incentive Equity Plan (the "Plan")
to: (a) prohibit the Company from repricing stock options without
shareholder approval; and (b) provide that no more than a de minimus
number of awards granted under the Plan will constitute (i) options
with an exercise price below fair market value, (ii) time-based
restricted shares that vest in less than three years, or (iii)
performance-based restricted shares that vest in less than one year.

(3) To transact any other business which may properly come before the
annual meeting or any adjournment thereof.

These items are more fully described in the following pages, which are
made part of this notice. Only shareholders of record at the close of business
on March 17, 2004, will be entitled to notice of and to vote at the annual
meeting and at any adjournments or postponements thereof.

Whether or not you plan to attend the annual meeting, you may ensure your
representation by completing, signing, dating and promptly returning the
enclosed proxy card. A return envelope, which requires no postage if mailed from
within the United States, has been provided for your use. If you attend the
annual meeting and inform the Secretary of the Company in writing that you wish
to vote your shares in person, your proxy will not be used. If you wish to
attend the annual meeting and your shares are held of record by a brokerage
firm, bank or other nominee, you must obtain a letter from the broker, bank or
other nominee confirming your beneficial ownership of the shares and bring it to
the annual meeting. In order to vote your shares at the annual meeting, you must
obtain from the record holder a proxy issued in your name.

Regardless of how many shares you own, your vote is very important. Please
SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD TODAY.

By Order of the Board of Directors,

Dublin, Ohio Robert A. Meyer, Jr.
April 9, 2004 Secretary

DOMINION HOMES, INC.
5000 Tuttle Crossing Boulevard
P.O. Box 5000
Dublin, Ohio 43016-5555

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PROXY STATEMENT

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ANNUAL MEETING OF SHAREHOLDERS

May 12, 2004

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GENERAL INFORMATION

Purpose, Place, Date and Time of the Annual Meeting

This proxy statement and the accompanying proxy and Notice of Annual
Meeting of Shareholders is furnished to you in connection with the solicitation
on behalf of our Board of Directors of proxies to be at the Company's 2004
annual shareholders meeting or any postponement or adjournment of that meeting.
The annual meeting will be held at our corporate offices at 5000 Tuttle Crossing
Boulevard, Dublin, Ohio on Wednesday, May 12, 2004 at 9:00 a.m., local time for
the purposes set forth in the accompanying Notice of Annual Meeting. This proxy
statement, the accompanying proxy, Notice of Annual Meeting and a copy of our
2003 Annual Report to Shareholders, are first being mailed to shareholders on or
about April 9, 2004.

Record Date and Share Ownership

Holders of record of our common shares at the close of business on March
17, 2004, are entitled to notice of and to vote at the annual meeting and any
postponement or adjournment of the meeting. At that time, we had 8,220,465
common shares outstanding and entitled to vote. Each common share outstanding on
the record date entitles the holder to one vote on each matter submitted at the
annual meeting.

Submitting and Revoking Your Proxy

All common shares represented by each properly executed proxy received by
the Board pursuant to this solicitation will be voted in accordance with the
shareholder's directions specified on the proxy. Except as described below with
respect to broker non-votes, if no directions have been specified on a proxy,
the common shares represented by the proxy will be voted in accordance with the
Board's recommendations, which are as follows:

"FOR" election as directors of the six nominees named in the accompanying
form of proxy; and

"FOR" approval of the Dominion Homes, Inc. Amended and Restated 2003 Stock
Option and Incentive Equity Plan.

Without affecting any vote previously taken, a shareholder signing and
returning a proxy has the power to revoke it at any time prior to its exercise
by either: (1) giving notice of such revocation to the Company in writing or
other verifiable communication delivered to Christine A. Murry, Assistant
Secretary of the Company, at our corporate offices at 5000 Tuttle Crossing
Boulevard, P.O. Box 5000, Dublin, Ohio 43016-5555, (2) executing a subsequent
proxy, or (3) attending the 2004 annual meeting and giving notice of such
revocation in person to the inspector of elections at the annual meeting.
Attendance at the 2004 annual meeting will not, in and of itself, constitute
revocation of a proxy.

Quorum and Required Vote

The presence, in person or by proxy, of a majority of voting shares of the
Company outstanding and entitled to vote at the annual meeting is necessary to
constitute a quorum for the transaction of business at the annual meeting.
Common shares represented by proxies that have been signed or which constitute a
verifiable communication and are delivered to us will be counted toward the
quorum in all matters, even though they are marked as "Abstain," "Against" or
"Withhold Authority" on any or all matters or they are not marked at all. Broker
non-votes, as described in the following paragraph, also will be counted toward
the establishment of a quorum.

Broker/dealers who hold their customers' common shares in street name may,
under the applicable rules of the self-regulatory organizations of which the
broker/dealers are members, sign and submit proxies for such common shares and
may vote such common shares on routine matters which, under such rules,
typically include the election of directors. Broker/dealers may not vote such
common shares on other matters without specific instructions from the customers
who own such common shares. Proxies signed and submitted by broker/dealers which
have not been voted on certain matters as described in the previous sentence are
referred to as broker non-votes.

The election of the director nominees requires the favorable vote of a
plurality of all votes cast by the holders of our common shares at a meeting at
which a quorum is present. Broker non-votes and proxies marked "Withhold
Authority" will not be counted toward the election of directors or toward the
election of individual nominees specified in the form of proxy and, thus, will
have no effect. The approval of the Company's Amended and Restated 2003 Stock
Option and Incentive Equity Plan, and all other proposals submitted to our
shareholders for approval at the annual meeting, requires the affirmative vote
of holders of a majority of our common shares issued and outstanding as of the
record date at a meeting at which a quorum is present. For purposes of
determining the number of our common shares voting on such matters, abstentions
and broker non-votes will have the same effect as a vote against the proposal.

Cost of Solicitation

We will bear all costs of the solicitation of proxies. Solicitation of
proxies will be made by mail. Proxies may be further solicited for no additional
compensation by our officers, directors, or employees by telephone, written
communication or in person. Upon request, we will reimburse banks, brokerage
firms, and other custodians, nominees, and fiduciaries for

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expenses reasonably incurred by them in sending proxy materials to the
beneficial owners of common shares of the Company. No solicitation will be made
by specially engaged employees or other paid solicitors.

VOTING RIGHTS AND PRINCIPAL SHAREHOLDERS

Ownership of Our Common Shares by Principal Shareholders

The following table sets forth information as of March 17, 2004 (except as
noted below), relating to the beneficial ownership of our common shares by each
person known by us to own beneficially more than 5% of our outstanding common
shares.

Number of Common Shares Beneficially Owned (1)
------------------------------------------------------------------
Sole Voting Shared
and Voting and Shared Percent
Name and Address of Investment Investment Investment of
Beneficial Owner Power Power Power Only Total Class(2)
- ------------------------ ------------ ------------ ---------- --------- --------

Donald A. Borror (3) -- 3,908,424(4) 39,229(5) 3,947,653 48.0%

Douglas G. Borror (3) 70,000(6) 3,908,424(4) 11,443(5) 3,989,867 48.5%

David S. Borror (3) 20,718(7) 3,908,424(4) -- 3,929,142 47.8%

Terry E. George (3) 13,716 3,908,424(4) -- 3,922,140 47.7%

BRC Properties Inc. (3) 3,908,424(4) -- -- 3,908,424 47.5%

BRC Properties Inc., -- 3,908,424(4) -- 3,908,424 47.5%
Donald A. Borror,
Douglas G. Borror,
David S. Borror and
Terry E. George, as a
group

- ----------
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission which generally attribute beneficial
ownership of securities to persons who possess sole or shared voting power
and/or investment power with respect to those shares.

(2) Percent of Class is calculated by dividing the number of common shares
beneficially owned by a person by the sum of 8,220,465 common shares
outstanding as of March 17, 2004, and the number of common shares as to
which the person has the right to acquire beneficial ownership within
sixty (60) days of March 17, 2004.

(3) The address of Donald A. Borror, Douglas G. Borror, David S. Borror, Terry
E. George, and BRC Properties Inc. ("BRC") is 5000 Tuttle Crossing
Boulevard, Dublin, Ohio 43016-5555.

(4) Share total is based on information provided to the Company by BRC. By
virtue of their ownership and/or control of BRC, each of Donald A. Borror,
Douglas G. Borror, David S. Borror, and Terry E. George may be

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deemed to beneficially own the common shares of the Company held by BRC.
See "Certain Relationships and Related Transactions - Description and
Ownership of BRC" for additional information.

(5) Consists of common shares held by The Principal Group, as Trustee of the
Dominion Homes, Inc. Retirement Plan and Trust, which common shares are
voted by the Trustee.

(6) Includes 30,000 restricted common shares awarded to Mr. Douglas G. Borror
on October 22, 2002, which shares will vest, if at all, upon (a) the
expiration of five years from the date of the award, (b) the Company's
achievement of shareholder' equity of not less than $175,000,000 and (c)
Mr. Borror continuing to be employed with the Company as of such date.
Also includes 40,000 restricted common shares awarded to Mr. Borror on
October 22, 2003, which shares will vest, if at all, upon (a) the
expiration of three years from the date of the award, and (b) the
Company's achievement of a book value per share of $30.00 (without
adjustment for the impact of dividends and dilution).

(7) Includes 20,000 restricted common shares awarded to Mr. David S. Borror on
October 22, 2003, which shares will vest, if at all, upon (a) the
expiration of three years from the date of the award, and (b) the
Company's achievement of a book value per share of $30.00 (without
adjustment for the impact of dividends and dilution).

Ownership of Our Common Shares by Directors and Executive Officers

The following table sets forth information regarding beneficial ownership
of our common shares by each of our directors (including nominees), each of our
executive officers named in the Summary Compensation Table, and our directors
(including nominees) and executive officers as a group as of March 17, 2004:

Number of Common Shares Beneficially Owned (1)
-------------------------------------------------------------------
Sole Voting Shared
and Voting and Shared Percent
Name of Investment Investment Investment of
Beneficial Owner Power Power Power Only Total Class(2)
- ------------------------ ------------- ------------ ---------- --------- --------

David Blom -- -- -- -- --

Donald A. Borror (3) -- 3,908,424(4) 39,229(5) 3,947,653 48.0%

Douglas G. Borror 70,000(6) 3,908,424(4) 11,443(5) 3,989,867 48.5%

David S. Borror 20,718(7) 3,908,424(4) -- 3,929,142 47.8%

Jon M. Donnell 117,488(8) -- -- 117,488 1.4%

R. Andrew Johnson -- -- -- -- --

Pete A. Klisares 17,718(9) -- -- 17,718 *

Gerald E. Mayo 8,500(10) -- -- 8,500 *

Robert A. Meyer, Jr. (3) 23,200 -- -- 38,200 *

Carl A. Nelson, Jr -- -- -- -- --

Zuheir Sofia 2,500 -- -- 2,500 *

C. Ronald Tilley 4,762 -- -- 4,762 *

All directors(including 280,189 3,908,424(4) 50,672 4,239,375 51.5%
director nominees) and
executive officers as a
group (13 persons) (11)

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- ----------
* Less than one percent (1%).

(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission which generally attribute beneficial
ownership of securities to persons who possess sole or shared voting power
and/or investment power with respect to those shares.

(2) Percent of Class is calculated by dividing the number of shares
beneficially owned by the sum of 8,220,465 shares outstanding as of March
17, 2004, and the number of common shares as to which the person has the
right to acquire beneficial ownership within sixty (60) days of March 17,
2004.

(3) Effective January 1, 2004, the Board of Directors determined that Mr.
Donald A. Borror and Mr. Meyer would no longer be considered "executive
officers" of the Company.

(4) Share total is based on information provided to the Company by BRC. By
virtue of their ownership and/or control of BRC, each of Donald A. Borror,
Douglas G. Borror and David S. Borror may be deemed to beneficially own
the common shares of the Company held by BRC. See "Certain Relationships
and Related Transactions - Description and Ownership of BRC" for
additional information.

(5) Consists of common shares held by The Principal Group, as Trustee of the
Dominion Homes, Inc. Retirement Plan and Trust, which common shares are
voted by the Trustee.

(6) Includes 30,000 restricted common shares awarded to Mr. Douglas G. Borror
on October 22, 2002, which shares will vest, if at all, upon (a) the
expiration of five years from the date of the award, (b) the Company's
achievement of shareholders' equity of not less than $175,000,000, and (c)
Mr. Borror continuing to be employed with the Company as of such date.
Also includes 40,000 restricted common shares awarded to Mr. Borror on
October 22, 2003, which shares will vest, if at all, upon (a) the
expiration of three years from the date of the award, and (b) the
Company's achievement of a book value per share of $30.00 (without
adjustment for the impact of dividends and dilution).

(8) Includes 25,000 restricted common shares awarded to Mr. Donnell on October
22, 2002, which shares will vest, if at all, upon (a) the expiration of
five years from the date of the award, (b) the Company's achievement of
shareholders' equity of not less than $175,000,000, and (c) Mr. Donnell
continuing to be employed with the Company as of such date. Also includes
35,000 restricted common shares awarded to Mr. Donnell on October 22,
2003, which shares will vest, if at all, upon (a) the expiration of three
years from the date of the award, and (b) the Company's achievement of a
book value per share of $30.00 (without adjustment for the impact of

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dividends and dilution). Also includes 4,000 common shares which can be
acquired upon the exercise of options which are exercisable within sixty
(60) days of March 17, 2004.

(9) Includes options to purchase 12,500 common shares which are exercisable by
Mr. Klisares within sixty (60) days of March 17, 2004.

(10) Includes options to purchase 5,000 common shares which are exercisable by
Mr. Mayo within sixty (60) days of March 17, 2004.

(11) In computing the aggregate number of common shares held by the group, the
same common shares were not counted more than once.

INFORMATION CONCERNING OUR BOARD OF DIRECTORS AND
CORPORATE GOVERNANCE MATTERS

Board of Directors Meetings

Regular meetings of our Board of Directors are generally held four times
per year, and special meetings are scheduled when required. At each regular
meeting of our Board of Directors, members who are "independent directors" meet
in executive session without management present. Our Board of Directors held
five meetings in 2003. Each director is expected to attend each meeting of the
Board and the committees on which he serves. In addition to meetings, the Board
and its committees review and act upon matters through written consent
procedures. During 2003, each of our directors attended 75% or more of the total
number of (i) meetings of the Board, and (ii) meetings of committees of the
Board on which the director served.

Standing Committees of the Board

Our Board of Directors has three standing committees: an Audit Committee,
a Nominating and Corporate Governance Committee, and a Stock Option and
Compensation Committee. Until October 22, 2003, our Board of Directors also had
an Affiliated Transactions Review Committee, which was responsible for reviewing
all related party transactions, and an Executive Committee, which was authorized
to act on behalf of the full Board of Directors between regularly scheduled
meetings of the Board. On October 22, 2003, our Board of Directors approved the
elimination of these committees, and assigned to the Audit Committee the
responsibility of reviewing all related party transactions. The Board determined
it was appropriate to eliminate the Executive Committee in light of the
Company's establishment at that time of (1) the Office of the Chairman, which is
a management committee consisting of Douglas G. Borror, David S. Borror and Jon
M. Donnell which meets monthly to discuss the Company's performance and outlook,
and (2) the position of Lead Director.

The Audit Committee oversees management's conduct of our financial
reporting process, including the financial reports and information that we
provide to our shareholders or to the Securities and Exchange Commission, our
system of internal control over financial reporting, and the annual independent
audit of our financial statements. The Audit Committee also acts on

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behalf of the Board of Directors with respect to the appointment of our
independent auditors, and all audit and other activities performed for us by our
independent auditors. Our Amended and Restated Audit Committee Charter is
attached as Appendix A to this proxy statement. The Audit Committee is comprised
solely of directors who are "independent" directors pursuant to the listing
requirements of The Nasdaq Stock Market and applicable provisions of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Currently,
Messrs. Mayo (Chairman), Nelson, and Sofia serve as members of our Audit
Committee. Our Audit Committee held a total of five meetings during 2003. For
additional information on the Audit Committee, see "REPORT OF THE AUDIT
COMMITTEE" beginning at page 27.

The Compensation Committee determines the compensation of our executive
officers and administers our incentive stock plans. The Compensation Committee
Charter can be found on our Internet website at www.dominionhomes.com under the
heading "Investor Relations." The Compensation Committee is comprised solely of
directors who are "independent" directors pursuant to the listing requirements
of The Nasdaq Stock Market. Currently, Messrs. Sofia (Chairman), Klisares and
Tilley serve as members of our Compensation Committee. Our Compensation
Committee held a total of five meetings during 2003. For additional information
on the Compensation Committee, see "REPORT OF THE COMPENSATION COMMITTEE ON
EXECUTIVE COMPENSATION" beginning at page 20.

The Nominating and Corporate Governance Committee ("Governance
Committee"), which was established on October 22, 2003, identifies individuals
qualified to become members of the Board of Directors and recommends to the
Board the slate of directors to be nominated by the Board at the annual
shareholders meeting and any director to fill a vacancy on the Board. The
Governance Committee also reviews and makes recommendations to the Board
regarding Board committee structure and membership, assists the Board in
evaluating the Board's overall effectiveness, and oversees the development and
implementation of our corporate governance policies. The Governance Committee
will consider recommendations for nominees for directorships submitted by our
shareholders. See "Director Nomination Process" beginning at page 9. The
Governance Committee Charter can be found on our Internet website at
www.dominionhomes.com under the heading "Investor Relations." The Governance
Committee is comprised solely of directors who are "independent" directors
pursuant to the listing requirements of The Nasdaq Stock Market. Currently,
Messrs. Tilley (Chairman), Nelson and Mayo serve as members of our Governance
Committee. Our Governance Committee held one meeting during 2003.

Lead Director

In October 2003, our Board of Directors established the position of Lead
Director. The Lead Director position was created to provide a regular channel of
communication between the independent directors serving on our Board and our
Chairman and Chief Executive Officer. The Lead Director will always be the
director serving as the Chairman of the Governance Committee and, as a result,
the Lead Director will always be an independent director. Currently, Mr. Tilley
serves as our Lead Director. The Lead Director's responsibilities include: (1)
providing input to the Chairman and Chief Executive Officer in establishing the
agenda for meetings of the Board

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of Directors; (2) chairing executive sessions of our independent directors; and
(3) working with the Chairman and Chief Executive Officer to ensure that our
Board of Directors has adequate information and resources to support its
decision-making requirements.

Communications with the Board

Shareholders, employees of the Company, and other interested parties may
contact any director or committee of the Board of Directors by writing to them
at: c/o Corporate Counsel, Dominion Homes, Inc., 5000 Tuttle Crossing Boulevard,
P.O. Box 5000, Dublin, Ohio 43016-5555. Concerns relating to our financial
statements, accounting practices or internal controls should be addressed to the
Chairman of the Audit Committee. Concerns relating to our governance practices,
business ethics or corporate conduct should be addressed to the Chair of the
Nominating and Corporate Governance Committee. Any person who submits a
question, concern or complaint in this manner and includes his, her or its name
and mailing address in the submission will receive a written acknowledgement
within 14 days of the receipt of such complaint or concern. Communications also
may be submitted on an anonymous basis. The process for the Corporate Counsel's
forwarding of these communications to the appropriate Board members has been
approved by our independent directors.

Questions, complaints and concerns also may be submitted to our directors
by telephone through our Business Ethics Help Line at 1-800-418-6423, ext. 366.

Qualifications of Directors

When identifying and evaluating director nominees, the Governance
Committee will consider the following:

o The candidate's demonstrated character and integrity.

o The candidate's relevant expertise and experience, including
leadership qualities and experience, high-level managerial
experience in a relatively complex organization or experience
dealing with complex problems.

o The candidate's ability to provide advice and practical guidance
based on his or her experience and expertise.

o Whether the candidate meets the criteria for independence as
established by the Securities and Exchange Commission and the
listing standards of The Nasdaq Stock Market. The Board of Directors
must be comprised of at least a majority of independent directors.

o Whether the candidate would be considered a "financial expert" or
financially literate according to the criteria established by the
Securities and Exchange Commission and the listing standards of The
Nasdaq Stock Market.

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o The candidate's ability to exercise sound and independent business
judgment and commitment to shareholder value.

o The candidate's ability to devote sufficient time to Board
activities and towards the fulfillment of his or her
responsibilities to the Company. A candidate's service on other
boards of public companies must not interfere with his or her
ability to effectively serve on the Board.

o Whether the candidate assists in achieving a mix of Board members
that represents a diversity of background and professional
experience, including with respect to ethnic background, age and
gender.

For incumbent directors, the Governance Committee will also consider the
candidate's overall service to the Company during his or her term, including the
number of meetings attended, level of participation, quality of performance, and
any transactions by the candidate with the Company during his or her term.

Director Nomination Process

In accordance with Section 2.03 of the Company's Amended and Restated Code
of Regulations (the "Regulations"), a nominee for election as a director may be
proposed only by the directors or by a shareholder entitled to vote for the
election of directors if such shareholder shall have proposed such nominee in a
written notice. Each written notice of a proposed nominee must set forth (1) the
name, age, business or residence address of each nominee proposed in such
notice; (2) the principal occupation or employment of each such nominee for the
past five years; and (3) the number of shares of each series and class of the
Company owned beneficially and/or of record by each such nominee and the length
of time any such shares have been owned. The written notice of a proposed
nominee must be delivered or mailed by first class United States mail, postage
prepaid, to our Secretary at our principal office and, in the case of a nominee
proposed for election as a director at an annual meeting of shareholders,
received by the Secretary on or before the later of (i) February 1, immediately
preceding such annual meeting or (ii) the sixtieth (60th) day prior to the first
anniversary of the most recent annual meeting of our shareholders held for the
election of directors, provided, however, that if the annual meeting for the
election of directors in any year is not held on or before the thirty-first
(31st) day next following such anniversary, then the written notice must be
received by the Secretary within a reasonable time prior to the date of such
annual meeting.

The Governance Committee will assist the Board of Directors in identifying
and evaluating prospective candidates, and will recommend to the Board of
Directors its candidate(s) for Board membership. The Governance Committee will
consider new director candidates suggested by shareholders of the Company,
members of the Board of Directors, management, a professional search firm (if
the Governance Committee has engaged one), or other interested parties. At least
one member of the Governance Committee and the Chairman and Chief Executive
Officer will interview the new director candidate(s).

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Prior to the filing of the Company's proxy statement for the annual
meeting of shareholders, the Governance Committee will meet to consider new and
incumbent director candidates to recommend to the Board of Directors for
nomination and election at the annual meeting. During this meeting, the
Governance Committee will consider each director candidate by reviewing relevant
information provided by the candidate (including information contained in the
candidate's mandatory questionnaire), by applying the criteria listed above,
and, with respect to incumbent director candidates, by assessing such
candidate's performance during the previous year. The Governance Committee will
consider and evaluate director candidates nominated by shareholders in the same
manner after ensuring that any such nomination has been executed in compliance
with the Regulations and the applicable rules and regulations of the Securities
and Exchange Commission governing shareholder nominations. Upon conclusion of
its evaluation, the Governance Committee will approve and recommend to the Board
of Directors its final candidate(s) for Board membership. The nomination of such
candidates for election at the annual shareholder meeting is subject to the
approval of the Board of Directors.

David Blom and R. Andrew Johnson, current nominees to serve on the Board
of Directors, were recommended to the Governance Committee as qualified
candidates by an executive officer of the Company. All other nominees are
current members of the Board of Directors and have been nominated by the Board
of Directors and elected by the shareholders in prior years.

To date, the Company has not employed a search firm on behalf of the
Governance Committee to identify and assist in evaluating suitable director
candidates, although the Governance Committee is authorized to retain a search
firm for this purpose if it deems necessary.

Attendance of Directors at Annual Meetings

All members of our Board of Directors are strongly encouraged, but not
required, to attend our annual meetings of shareholders. At our 2003 annual
meeting of shareholders, all of the directors then in office were in attendance,
as well as director nominees Carl A. Nelson, Jr. and Zuheir Sofia.

Compensation of Directors

Year 2003

During 2003, directors who were not our employees received fees of $5,000
per quarter and $2,000 per Board meeting. Audit Committee members received an
annual fee of $2,500 ($5,000 in the case of the Audit Committee Chairman). In
addition, non-employee directors also received the following fees for attending
meetings of committees on which the director serves: Compensation Committee:
$750 ($1,500 in the case of the Chairman) per meeting attended; Affiliated
Transaction Review Committee: $750 ($1,500 in the case of the Chairman) per
meeting attended; Audit Committee: $1,250 ($2,500 in the case of the Chairman)
per meeting

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attended; Governance Committee: $750 ($1,500 in the case of the Chairman) per
meeting attended; Development Committee: $750 ($1,500 in the case of the
Chairman) per meeting attended; Executive Committee: $1,500 per meeting
attended. During 2003, non-employee directors who served on the Development
Committee also received a one-time fee of $59,400 for services related to
special projects. Beginning in October 2003, our Lead Director (who is a
non-employee director) received a monthly fee of $12,500 for his services (which
amount was in lieu of any fees for service on or attendance at any other Board
or committee meeting).

Directors may defer the receipt of their director and committee fees
through participation in the Executive Deferred Compensation Plan and receive a
matching contribution from us of 25% with respect to such deferred fees, not to
exceed $2,500 in any year. Directors were also entitled to participate in the
Company's Financial Planning Reimbursement Plan, which provides reimbursement
for expenses (up to $10,000 in any calendar year for our Chairman, President,
and any Executive Vice President and up to $7,500 in any calendar year for our
independent directors, and up to $5,000 in any calendar year for our Senior Vice
Presidents and Vice Presidents) incurred in personal financial planning.

Year 2004

Beginning on January 1, 2004, directors who are not our employees receive
a fee of $10,000 per quarter. Non-employee directors who serve on the Audit
Committee (other than the Audit Committee Chairman) receive an additional fee of
$1,250 per quarter, and the Audit Committee Chairman receives an additional fee
of $2,500 per quarter. The Chairman of the Compensation Committee receives an
additional fee of $1,250 per quarter. The Chairman of the Governance Committee
receives a fee of $6,250 per quarter, which includes $5,000 per quarter of fees
related to his service as Lead Director.

Directors may defer the receipt of their director and committee fees
through participation in the Executive Deferred Compensation Plan and receive a
matching contribution from us, not to exceed $2,500 in any one year, with
respect to those deferred fees. Directors also will be entitled to participate
in the Financial Planning Reimbursement Plan (described above).

Additionally, under the 2003 Stock Option and Incentive Equity Plan, our
non-employee directors receive, on the first business day after each annual
meeting of shareholders, provided that the director continues to serve on the
Board of Directors on such date, a grant of a non-qualified stock option to
purchase 2,500 common shares at an exercise price equal to the fair market value
of the common shares on the date of grant. A director option is exercisable from
the date of grant until the earlier of (i) the tenth anniversary of the date of
grant or (ii) generally three months (one year in the case of a director who
becomes disabled or dies) after the date the director ceases to be a director.

We do not pay any separate remuneration to our employees who serve as
directors. Messrs. Klisares, Mayo, Nelson, Sofia and Tilley were the directors
who were not our employees in 2003.

-11-

Agreement with Respect to the Election of Directors

BRC, the holder of approximately 47.5% of our outstanding common shares,
has agreed in a Close Corporation Agreement with its shareholders to use its
best efforts to elect David S. Borror as a director of the Company for so long
as certain contingencies are satisfied and for so long as BRC has the ability to
elect at least two (2) directors of the Company. See "CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS - Description and Ownership of BRC" beginning at page 32.

Family Relationships

Donald A. Borror, Chairman Emeritus, is the father of Douglas G. Borror,
Chairman and Chief Executive Officer and David S. Borror, Corporate Executive
Vice President and director. There are no other family relationships among our
executive officers and/or directors.

Code of Business Conduct and Ethics

Pursuant to Section 406 of the Sarbanes-Oxley Act of 2002, on March 10,
2004, our Board of Directors adopted a Code of Business Conduct and Ethics,
which applies to all officers (including our chief executive officer and senior
financial officers), employees and directors of the Company. The Code of
Business Conduct and Ethics was filed as Exhibit 14 to our Annual Report on Form
10-K for the fiscal year ended December 31, 2003. If the Company makes any
substantive amendment of, or grants any waiver for an executive officer or
director to, the Code of Business Conduct and Ethics, the Company will disclose
the nature of such amendment of waiver in a current report on Form 8-K.

INFORMATION ABOUT OUR EXECUTIVE OFFICERS
AND COMPENSATION MATTERS

Executive Officers

In addition to Douglas G. Borror, David S. Borror and Jon M. Donnell,
whose biographies are set forth in this proxy statement under "ELECTION OF
DIRECTORS" beginning at page 36, the following individual is an executive
officer of the Company:

Peter J. O'Hanlon, age 45, has served as Senior Vice President - Finance
of the Company since January 2000, and as Chief Financial Officer of the Company
since June 1998. Prior to joining the Company, Mr. O'Hanlon was Controller of
Gables Residential Trust, an Atlanta-based real estate investment trust, from
1993 through May 1998, and Chief Financial Officer of Wilson Company, an
Atlanta-based privately-held holding company, from 1987 through 1992.

-12-

Significant Employees

Karl E. Billisits, age 38, has served as our Executive Vice President -
Construction Operations since December 2000. He served as our Senior Vice
President of Land Acquisition and Development from April 1999 through November
2000, as our Vice President of Engineering and Development from January 1999
through April 1999, as our Vice President of Engineering from May 1998 through
January 1999, as our Director of Engineering from April 1997 through May 1998,
and as our Engineer from April 1994 through April 1997. Prior to joining us in
1994, Mr. Billisits was employed as a consulting engineer with Bauer, Davidson &
Merchant, a Columbus, Ohio-based consulting engineering firm.

Stephan M. George, age 47, has served as our Executive Vice President and
as President of our Kentucky subsidiary since December 2000. He served as our
Executive Vice President of Operations from May 1999 through December 2000.
Prior to joining us in 1999, Mr. George served as Chief Operating Officer of
Silverman Building Company, a Farmington, Michigan-based homebuilding company,
from March 1998 through April 1999, and Vice President of Operations of
Cambridge Homes, Inc., a Libertyville, Illinois-based homebuilding company, from
December 1987 to March 1998.

Terry E. George, age 60, has served as our Senior Vice President since
November 1993 and as our Treasurer since January 1996. He served on our Board of
Directors from 1985 through May 1997, as our Controller from August 1995 to
January 1996, and as our Operations Manager from October 1991 through August
1995. Mr. George has also served as Vice President and Treasurer of BRC since
December 1996, and previously served as a Vice President of BRC from October
1987 to November 1993. Since December 2000, he has additionally served as
Secretary of BRC.

Jack L. Mautino, age 40, has served as our Executive Vice President of
Sales since December 2000. He served as Senior Vice President and General
Manager of our Louisville, Kentucky subsidiary from August 1998 through November
2000, as our Senior Vice President of Sales from May 1998 through August 1998,
as our Vice President of Sales from October 1995 through August 1998, as a Sales
Manager from December 1991 to December 1995, and as a Sales Representative from
July 1990 to December 1991. Prior to joining us in 1990, Mr. Mautino was
employed by Ryland Homes.

Robert A. Meyer, Jr., age 50, has served as our Senior Vice President
since January 1996 and as our General Counsel and Secretary since December 1993.
He served as our Vice President from December 1993 through December 1995. Prior
to joining us in 1993, Mr. Meyer was engaged in the private practice of law in
the Columbus, Ohio office of Porter, Wright, Morris & Arthur, LLP from November
1978 to December 1993.

Lori M. Steiner, age 44, has served as our Senior Vice President - Brand
Management since October 2003. Ms. Steiner served as our Senior Vice President
of Strategy and Communications from January 1999 through September 2003, as our
Senior Vice President of

-13-

Marketing from May 1998 through December 1998, as our Vice President of
Marketing from January 1995 through May 1998 and as our Marketing Director from
September 1990 through January 1995. Ms. Steiner served as an account manager
for Brooks Young Communications, a Columbus, Ohio-based regional advertising
company, from March 1989 to September 1990.

Compensation of Executive Officers

The following table sets forth, for the three years ended December 31,
2003, cash and non-cash compensation we paid to our Chairman and Chief Executive
Officer and to each of our other four most highly compensated executive officers
who served as such during 2003 (collectively, the "Named Executive Officers")
for services rendered in all capacities by such persons:

SUMMARY COMPENSATION TABLE

Long Term Compensation
-----------------------------
Annual Compensation Awards
----------------------------------------------------------------------------
Securities
Other Annual Restricted Stock Underlying All Other
Name and Salary Bonus (1) Compensation (2) Awards Options Compensation
Principal Position Year ($) ($) ($) ($) (#) ($)
- ----------------------------------------------------------------------------------------------------------------------------------

Douglas G. Borror 2003 $525,000 $2,250,000(3) $181,938(4) $1,281,200(5)(6) -- $161,760(7)
Chairman and CEO 2002 $525,000 $1,450,000(3) $165,966(4) $ 453,000(8) -- $161,925(9)
2001 $480,000 $1,000,000(3) $130,770(4) -- -- $153,641(10)

Donald A. Borror(11) 2003 $250,000 $ 275,000 $ 16,994(12) -- -- $ 816(13)
Chairman Emeritus 2002 $250,000 $ 275,000 $ 53,639(12) -- -- $ 816(13)
2001 $250,000 $ 275,000 -- -- -- $ 816(13)

Jon M. Donnell 2003 $420,000 $1,750,000(14) $142,548(15) $1,121,050(5)(6) -- $ 96,760(7)
President and COO 2002 $420,000 $1,105,000(14) $128,012(15) $ 377,500(8) -- $ 96,760(9)
2001 $400,000 $ 725,000(14) $ 64,572(15) -- -- $ 91,547(10)

David S. Borror 2003 $250,000 $ 550,000 $ 86,321(16) $ 640,600(5)(6) -- $ 42,760(7)
Corporate Executive 2002 $250,000 $ 417,000 $102,127(16) -- -- $ 42,760(9)
VP 2001 $240,000 $ 330,000 $ 56,559(16) -- -- $ 40,649(10)

Robert A. Meyer, Jr.(11) 2003 $187,500 $ 300,000 $ 23,770 -- 15,000 $ 36,760(7)
Sr. VP, General 2002 $175,000 $ 267,000 -- -- -- $ 36,760(9)
Counsel and Secretary 2001 $175,000 $ 200,000 -- -- -- $ 34,774(10)

- ----------
(1) Includes amounts deferred by the Named Executive Officer pursuant to the
Amended and Restated Dominion Homes, Inc. Executive Deferred Compensation
Plan (the "Executive Deferred Compensation Plan").

(2) Perquisites and other personal benefits did not exceed applicable
thresholds except as specifically set forth.

(3) For 2003, includes Mr. Douglas G. Borror's 2003 bonus of $2,250,000, all
of which was paid in 2004. For 2002, includes Mr. Douglas G. Borror's 2002
bonus of $1,450,000, all of which was paid in 2003. For 2001, includes Mr.
Douglas G. Borror's 2001 bonus of $1,000,000, of which $400,000 was paid
in 2002.

-14-

(4) Includes $136,255 for 2003, $100,466 for 2002, and $49,302 for 2001,
attributable to personal use of Company property. Also includes $0 for
2003, $32,434 for 2002 and $47,138 for 2001, attributable to payment of
personal expenses of Mr. Douglas G. Borror on business related trips.

(5) On October 22, 2003, Mr. Douglas G. Borror was granted 40,000 restricted
common shares, Mr. Donnell was granted 35,000 restricted common shares,
and Mr. David S. Borror was granted 20,000 restricted common shares. The
restricted common shares were valued at $32.03, the closing price of the
Company's common shares on October 21, 2003. The shares will vest, if at
all, upon (a) the expiration of three years from the date of the award,
and (b) the Company's achievement of a book value per share of $30.00
(without adjustment for the impact of dividends and dilution).

(6) As of December 31, 2003, the aggregate value of the 70,000 restricted
common shares held by Mr. Douglas G. Borror, the 60,000 restricted common
shares held by Mr. Donnell, and the 20,000 restricted common share held by
Mr. David S. Borror were $2,123,100, $1,819,000 and $606,600,
respectively. Dividends, if any are held in escrow pending vesting of the
restricted common shares.

(7) Includes for 2003, the value of premiums paid by the Company to fund a
contractually obligated death benefit and contributions pursuant to the
Company's Supplemental Executive Retirement Plan. Also includes for 2003,
except with respect to Donald A. Borror (see footnote 13 below), amounts
we paid for coverage under our Group Life Insurance Program for all
employees of $1,260 for each of the Named Executive Officers, our matching
contributions under the Retirement Plan and Trust of $8,000 for each of
the Named Executive Officers, and our matching contributions under the
Executive Deferred Compensation Plan of $2,500 for each of the Named
Executive Officers.

(8) On October 22, 2002, Mr. Douglas G. Borror was granted 30,000 restricted
common shares and Mr. Donnell was granted 25,000 restricted common shares.
The restricted common shares were valued at $15.10, the closing price of
the Company's common shares on October 21, 2002. The shares will vest, if
at all, upon (a) the expiration of five years from the date of the award,
(b) the Company's achievement of shareholders' equity of not less than
$175,000,000, and (c) the recipient continuing to be employed with the
Company as of such date.

(9) Includes for 2002, the value of premiums paid for split-dollar life
insurance coverage under our Split Dollar Plan (the "Split Dollar Plan")
(Mr. Douglas G. Borror: $150,000, Mr. Donnell: $85,000, Mr. David S.
Borror: $31,000 and Mr. Meyer: $25,000). Does not include reimbursements
made to the executive officers pursuant to the Company's discontinuation
of the split dollar plan arrangement. The Split Dollar Plan is discussed
in greater detail under "Report of Compensation Committee on Executive
Compensation- Long-Term Incentive Compensation-Split Dollar Plan." Also
includes for 2002, except with respect to Donald A. Borror (see footnote
13 below) amounts we paid for coverage under our Group Life Insurance
Program for all employees of $1,260 for each of the Named Executive
Officers, our matching contributions under the Retirement Plan and Trust
of $8,000 for each of the Named Executive Officers, and our matching
contributions under the Executive Deferred Compensation Plan of $2,500 for
each of the Named Executive Officers.

(10) Includes for 2001, the value of premiums paid for split-dollar life
insurance coverage under the Split Dollar Plan (Mr. Douglas G. Borror:
$143,081, Mr. Donnell: $80,987, Mr. David S. Borror: $30,089 and Mr. Meyer
$24,214). The Split Dollar Plan is discussed in greater detail under
"Report of Compensation Committee on Executive Compensation- Long-Term
Incentive Compensation-Split Dollar Plan." Also includes for 2001, except
with respect to Donald A. Borror (see footnote 13 below), amounts we paid
for coverage under the Company's Group Life Insurance Program for all
employees of $1,260 for each of the Named Executive Officers, our matching
contributions under the Retirement Plan and Trust of $6,800 for each of
the Named Executive Officers, and our matching contributions under the
Executive Deferred Compensation Plan of $2,500 for each of the Named
Executive Officers.

-15-

(11) Effective January 1, 2004, the Board of Directors determined that Mr.
Donald A. Borror and Mr. Meyer would no longer be considered "executive
officers" of the Company.

(12) Includes $0 for 2003 and $25,798 for 2002 attributable to personal use of
Company property.

(13) Includes for 2003, 2002 and 2001, $816 paid by us for coverage under our
Group Life Insurance Program for all employees for Donald A. Borror.

(14) For 2003, includes Mr. Donnell's bonus of $1,750,000, $1,705,047 of which
was paid in 2004. For 2002, includes Mr. Donnell's 2002 bonus of
$1,105,000, all of which was paid in 2002. For 2001, includes Mr.
Donnell's 2001 bonus of $725,000, of which $275,000 was paid in 2002.

(15) Includes $105,523 for 2003, $95,823 for 2002, and $45,045 for 2001,
attributable to personal use of Company property.

(16) Includes $56,701 for 2003, $78,196 for 2002 and $42,312 for 2001,
attributable to personal use of Company property.

OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth certain information concerning the grant of
stock options to the Named Executive Officers under our 2003 Stock Option and
Incentive Equity Plan during the 2003 fiscal year:

Number of
Securities % of Total
Underlying Options Potential Realized Value at
Options Granted to Exercise Assumed Annual Rates of Stock
Granted Employees in Price Expiration Price Appreciation for
Name (#) Fiscal Year(1) ($/Share) Date Option Terms (2)(3)
- -----------------------------------------------------------------------------------------------------------------------------------
5% ($) 10% ($)
--------- ---------

Robert A. Meyer, Jr. (4) 15,000 13% $24.24 2013 $ 592,000 $ 943,000

- ----------

(1) Percentage is based upon 117,500 options granted to employees in fiscal
2003.

(2) The dollar amounts in these columns are the product of (a) the difference
between (1) the product of the per share market price at the date of grant
and the sum of 1 plus the assumed rate of appreciation (5% and 10%)
compounded over the term of the option (ten years) and (2) the per share
exercise price and (b) the number of shares underlying the grant.

(3) The appreciation rates stated are arbitrarily assumed, and may or may not
reflect actual appreciation in the stock price over the life of the
option. Regardless of any theoretical value which may be placed on a stock
option, no increase in its value will occur without an increase in the
value of the underlying shares. Whether an increase will be realized will
depend not only on the efforts of the recipient of the option, but also
upon conditions in our industry, competition, and economic conditions,
over which the optionee may have little or no control.

(4) Effective January 1, 2004, the Board of Directors determined that Mr.
Meyer would no longer be considered an "executive officer" of the Company.

-16-

AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END
OPTION VALUE TABLE

The following table provides certain information regarding the
number and value of stock options held by our named executive officers at
December 31, 2003.

Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money
Options/SARs at Options/SARs at
Fiscal-Year-End (#) Fiscal-Year-End ($)(2)
------------------------------------------------------------
Shares
acquired on
exercise Value Realized
Name (#) ($)(1) Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------------------------------------------------

Robert A. Meyer, Jr. (3) 1,500 $ 39,975 0 15,000 $ 0 $97,200

- ----------

(1) Value realized represents the difference between the aggregate exercise
price of the option shares and the aggregate market price of the option
shares on the date the option was exercised. The value realized was
determined without consideration for any taxes or brokerage expenses that
may have been owed.

(2) Represents the total gain which would be realized if all in-the-money
options held at year end were exercised, determined by multiplying the
number of shares underlying the options by the difference between the per
share option exercise price and the per share fair market value at year
end ($30.33 on December 31, 2003). An option is in-the-money if the fair
market value of the underlying shares exceeds the exercise price of the
option.

(3) Effective January 1, 2004, the Board of Directors determined that Mr.
Meyer would no longer be considered an "executive officer" of the Company.

Employment Agreements

We have employment agreements with the following named executive officers:
Jon M. Donnell, our President and Chief Operating Officer, Robert A. Meyer, Jr.,
our Senior Vice President, General Counsel and Secretary, and Peter J. O'Hanlon,
our Senior Vice President - Finance and Chief Financial Officer. Each employment
agreement became effective as of January 1, 2001, was for an initial term of
three years, and renews automatically for additional three-year terms unless we
provide notice to the executive of our intention not to renew by the last day of
the first calendar year that ends after the effective date, or, if the agreement
has been extended, by December 31 of the first year of any extension period. To
date, we have not provided any such notice to Mr. Donnell, Mr. Meyer or Mr.
O'Hanlon.

Under each of the employment agreements, if we terminate the executive's
employment without cause (as defined in the employment agreements) or if the
executive terminates his employment with us for good reason (as defined in the
employment agreements), the executive will be entitled to the following:

o any accrued but unpaid base salary, any accrued but unused vacation,
and any unreimbursed business expenses, all as of the date of
termination;

-17-

o payments equal to 12 months (18 months in the case of Mr. Donnell's
employment agreement) of the executive's base salary in effect on
the date of termination, payable through the Company's ordinary
payroll process; and

o a lump sum cash payment equal to 18 times the monthly premium on the
date of termination for group health insurance paid on behalf of the
executive and, if applicable, his family, under the Company's group
health plan.

Each employment agreement also includes a non-competition covenant
effective for one year after the executive's termination.

Effective January 1, 2003, the employment agreements were amended to
redefine the term "change in control." Under the amended agreements, a "change
in control" will be deemed to have occurred upon the happening of any of the
following events:

o Douglas G. Borror and David S. Borror both cease to be members of
our Board of Directors;

o any direct or indirect acquisition by a person or group, directly or
indirectly, of our securities representing more than 40 percent of
the combined voting power of our then outstanding securities;
provided, however, that a "person" or "group" will not include:

o the Company;

o any entity under common control with the Company;

o BRC Properties Inc. or any of its shareholders or members of
the family of Donald A. Borror; or

o any employee benefit plan of any entity described above;

o the adoption or authorization by our shareholders of a definitive
agreement for the merger or other business combination of the
Company in which our shareholders will own less than 50 percent of
the voting power in the surviving entity or for the sale or other
disposition of all or substantially all of our assets; or

o the adoption by our shareholders of a plan relating to the
liquidation or dissolution of the Company.

The employment agreements provide that upon a change in control, the executive
will become fully vested in all employee benefit programs (other than any tax
qualified retirement plan, the executive's interest in which will vest in
accordance with such plan's terms). In addition, if at any time within two years
following a change in control, the employment of the executive is terminated
without cause (as defined in the agreements), or if the executive terminates his
employment with good reason (as defined in the agreements), the executive would
be entitled to receive various benefits, including (1) a lump sum payment
equivalent to two years' annual base

-18-

salary then in effect, (2) the payments the executive otherwise would have been
entitled to receive had we terminated his employment without cause (summarized
above), and (3) reimbursement of expenses related to executive outplacement
services.

Equity Compensation Plan Information

The following table sets forth information as of December 31, 2003,
concerning the aggregate number of our common shares that may be issued upon the
exercise of options and other rights under our existing equity compensation
plans and arrangements, divided between plans or arrangements approved by our
shareholders and plans or arrangements not submitted to our shareholders for
approval. The information includes the number of shares covered by, and the
weighted average exercise price of, outstanding options and other rights and the
number of shares remaining available for future grants excluding the shares to
be issued upon exercise of outstanding options, warrants, and other rights.

Number of securities
Number of Securities remaining available for
to be issued upon Weighted-average issuance under equity
exercise of exercise price of compensation plans
outstanding options, outstanding options, (excluding securities
warrants and rights warrants and rights reflected in column (a)
(a)(1) (b) (c)(2)
-------------------- ------------------- -----------------------

Equity compensation plans
approved by security holders (3) 229,100 $ 14.52 287,500

Equity compensation plans not
approved by security holders -- -- --

Total 229,100 $ 14.52 287,500

- ----------

(1) All outstanding options, warrants and rights were issued under the 1994
Incentive Stock Plan or the 2003 Stock Option and Incentive Equity Plan.

(2) Excludes common shares listed in the first column as common shares to be
issued upon exercise of outstanding options, warrants and rights.

(3) Does not include shares subject to the Executive Deferred Compensation
Plan. See "Executive Deferred Compensation Plan" below.

Executive Deferred Compensation Plan

The Executive Deferred Compensation Plan permits executive officers and
directors to elect to defer receipt of a portion of their annual compensation
(20% of total base and bonus for employees and 100% of directors' fees). The
Executive Deferred Compensation Plan also provides for us to make a matching
contribution for each participant equal to 25% of the amount deferred, but not
to exceed $2,500 in any year. Our matching contribution vests in 20% increments
over a five-year period, subject to accelerated vesting upon a "change in
control."

-19-

The contribution and match amounts are used by the trustee of a rabbi trust to
acquire common shares in the open market. These common shares are held and voted
by the trustee pursuant to the rabbi trust agreement.

The following table sets forth information concerning the aggregate
deferral contributions by participating directors and Named Executive Officers
and corresponding aggregate Company-matching contributions through December 31,
2003, expressed as the number of common shares held by the trustee as of such
date, with respect to each director and Named Executive Officer participating in
the Executive Deferred Compensation Plan.

Vested Company- Unvested Company-
Deferral Contributions Matching Matching
Payable as Common Contributions Payable Contributions Payable
Shares as Common Shares as Common Shares Total
- -----------------------------------------------------------------------------------------------------------

David S. Borror 5,290 1,337 -- 6,627
Douglas G. Borror 13,757 3,421 -- 17,178
Jon M. Donnell 6,282 1,072 509 7,863
Pete A. Klisares 10,612 1,179 -- 11,791
Robert A. Meyer, Jr. 6,266 1,072 509 7,847
C. Ronald Tilley 7,487 1,173 -- 8,660
- -----------------------------------------------------------------------------------------------------------

Total 49,694 9,254 1,018 59,966

Compensation Committee Interlocks and Insider Participation

During 2003, no member of the Compensation Committee (1) was a current or
former executive officer of the Company, or (2) had a reportable business
relationship with the Company.

REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION

The following Report of the Compensation Committee on Executive
Compensation does not constitute soliciting material and should not be deemed
filed or incorporated by reference into any other Company filings under the
Securities Act of 1933, as amended (the "Securities Act") or the Exchange Act,
except to the extent that the Company specifically incorporates this Report by
reference in such filing.

The Company has vested in the Compensation Committee the authority to
determine and administer the compensation program for the Company's executive
officers and other key employees. The members of the Compensation Committee are
Zuheir Sofia (Chairman), Pete A. Klisares, and C. Ronald Tilley. Each member of
the Compensation Committee is an "independent" director pursuant to the listing
requirements of The Nasdaq Stock Market.

-20-

Compensation Philosophy

The Company's executive compensation philosophy seeks to promote the
following key objectives:

o align the interests of executive officers and other key employees
with the interests of shareholders by linking a significant
percentage of their total compensation to Company financial
performance;

o reward individual contribution and achievement; and

o allow the Company to continue to attract and retain outstanding
executive officers and other key employees and to compete with
industry competitors and other businesses for executive talent.

Implementation of this philosophy is an ongoing process, and the Compensation
Committee expects, as in previous years, to continue to refine the Company's
executive compensation program during 2004.

There are two primary components to the Company's executive compensation
program: annual cash compensation and long-term incentive compensation. Annual
cash compensation consists of a base salary and an incentive bonus. Long-term
incentive compensation consists of stock options, restricted shares, and other
awards under the 2003 Stock Option and Incentive Equity Plan. The Company's
executive compensation program also allows executives to defer a portion of
their compensation, and to augment the deferred amounts by Company matches,
through their optional participation in the Executive Deferred Compensation
Plan. The Company also has a Supplemental Executive Retirement Plan, which
provides deferred compensation benefits to participating executives if certain
vesting conditions are met and if the participating executive does not leave
employment with the Company prior to age 55. See "Supplemental Executive
Retirement Plan" beginning at page 25.

Annual Cash Compensation

General. It is the Company's objective to achieve continuous revenue and
earnings growth with a long-term objective of performing in the leading group of
companies in the homebuilding industry in revenue growth and profitability. The
Compensation Committee believes that, in order to achieve this objective, the
Company must be able to attract and retain exceptional executive talent.
Accordingly, the Compensation Committee's intent is that the total cash
compensation received by the Company's executive officers would place them in
the upper range of the total cash compensation received by the executive
officers of homebuilding companies in general. In determining compensation for
the Company's executive officers, the Compensation Committee annually reviews a
nationally-compiled database of compensation by other homebuilding companies for
various executive positions, including data specific to public homebuilding
companies, homebuilding companies of a size comparable to the Company and
homebuilding companies operating in the Midwest. The Compensation Committee also

-21-

considers the performance of the Company in relation to other homebuilding
companies based on several measures of economic performance.

Base Salary. The Compensation Committee recognizes that the homebuilding
business is cyclical and that the Company's financial performance depends, in
large part, on whether the homebuilding business is in a favorable or
unfavorable cycle. The Compensation Committee attempts to set the base salaries
of the Company's executive officers at levels sufficient to attract and retain
executive talent in all business cycles.

In setting the base salary of an executive officer, the Compensation
Committee subjectively analyzes the executive's responsibilities, performance
and value to the Company, but gives no fixed weighting to any of such factors.
The Compensation Committee also considers market salary ranges for comparable
positions. The Compensation Committee reviews annually the base salary of each
executive officer and makes adjustments as it believes is warranted.

Incentive Bonus. The Compensation Committee believes that a significant
portion of the total compensation of the Company's executive officers should
consist of variable, performance-based components, such as awards of incentive
bonuses and grants of stock options, which the Compensation Committee can adjust
to reflect changes in Company and individual performance. These compensation
components are intended to reinforce the Company's commitment to increasing
Company profitability and shareholder value.

In 2002, the shareholders adopted the Dominion Homes, Inc. Incentive
Growth Plan (the "Incentive Growth Plan") to provide tax-deductible incentive
compensation to the Company's Chief Executive Officer and its President and
Chief Operating Officer. Currently, the only employees participating in this
program are Douglas G. Borror, the Chairman of the Board and Chief Executive
Officer of the Company, and Jon M. Donnell, the President and Chief Operating
Officer of the Company.

Incentive compensation is paid under the Incentive Growth Plan only if
specified performance criteria are met over the course of a performance cycle.

The Incentive Growth Plan is administered by the Company's Compensation
Committee which is responsible for establishing for each plan participant (1) a
target bonus, and (2) the performance criteria used to determine the portion of
the target bonus that the participant will receive at the end of any given
performance cycle. Performance criteria are established (and communicated to
participants in writing) no later than the earlier of (1) ninety (90) days after
the beginning of the applicable performance cycle, or (2) the expiration of 25%
of the applicable performance cycle.

In establishing each participant's performance criteria, the Compensation
Committee considers the relevance of each participant's assigned duties and
responsibilities to factors that preserve and increase the Company's value.
These factors may include:

-22-

o increasing sales;

o developing new products and lines of revenue;

o reducing operating expenses;

o increasing customer satisfaction;

o developing new markets and increasing the Company's share of
existing markets;

o meeting completion schedules;

o increasing standardized pricing;

o developing and managing relationships with regulatory and other
governmental agencies;

o managing cash;

o managing claims against the Company, including litigation;

o identifying and completing strategic acquisitions; and

o increasing the Company's book value.

During 2003, the Compensation Committee used the Company's net income and
a measure of the Company's customer satisfaction as the performance criteria
which would determine the participant's bonus. At the end of each performance
cycle, the Compensation Committee certifies to the Board of Directors the extent
to which each participant has or has not met his or her performance criteria and
the portion, if any, of the target bonus that is to be paid to each participant.
If the Board of Directors approves, this amount is distributed in a single cash
payment within 90 days after the end of the performance cycle unless the
participant has made an irrevocable election to defer all or part of his or her
incentive compensation into the Executive Deferred Compensation Plan. If this
election is made, the deferred incentive compensation will be credited to the
participant's Executive Deferred Compensation Plan account and distributed under
the terms of that plan.

Subject to any contrary agreement between the Company and the participant,
a participant who terminates employment before the end of a performance cycle
will forfeit all right to receive any amount under the Incentive Growth Plan
(other than any amounts earned during any performance cycle that ended before
his or her termination, which amounts will be paid). A participant who retires,
dies or becomes disabled during a performance cycle will receive a prorated
distribution at the end of the performance cycle during which he or she retired,
died or became disabled, calculated in accordance with the proration formula set
forth in the Incentive Growth Plan.

Within sixty days of a "change in control" of the Company, the Company
will distribute to each Incentive Growth Plan participant the participant's
target bonus for the year in which the change in control occurred. The Company
will make the distribution whether or not the performance criteria for that
period have been met and whether or not the pending performance cycle has been
completed. If, however, the sum of all payments made upon a change in control as
described in the Incentive Growth Plan, and those provided under all other
plans, programs or agreements between the participant and the Company and its
subsidiaries, constitute "excess parachute payments," then the Company will
either (1) reimburse the participant for specified amounts owed as excise taxes,
as described in the Incentive Growth Plan, or (2) reduce the

-23-

amounts paid to the participant under the Incentive Growth Plan so that the
participant's total payments would be $1.00 less than the amount that would be
considered an "excess parachute payment." The Company will use the procedure
which provides the affected participant with the greatest after-tax benefit.

With respect to the remaining officers, the Compensation Committee takes
into account various quantitative measures and qualitative indicators of Company
and individual performance in determining the level of incentive bonuses to be
awarded to the Company's executive officers, including contributions to
attaining corporate goals and objectives and achievements with respect to
individual goals and performance measures. Although historically the
Compensation Committee has tended to give more weight to quantitative measures
of Company financial performance, it does not apply any specific formula. In
making such compensation decisions, the Compensation Committee recognizes and
takes into account that the homebuilding business is cyclical and that Company
financial performance can be greatly affected by factors, such as interest rates
and weather, that are beyond the control of the Company's executive officers.
The Compensation Committee considers such quantitative Company financial
performance measures as revenue growth, profitability, earnings per share and
return on shareholders' equity in determining the level of incentive bonuses.
The Compensation Committee also considers the Company's performance with respect
to its customer satisfaction ratings as a factor in determining incentive
bonuses for all executive officers. During 2003, the Company exceeded its target
goal of customer satisfaction.

The Compensation Committee also understands the importance of individual
contributions and achievements that may be difficult to quantify and,
accordingly, recognizes qualitative indicators such as successful supervision of
major corporate projects, demonstrated leadership and the ability to respond to
difficult business cycles.

Long-Term Incentive Compensation

Stock Options. In 2003, Robert A. Meyer, Jr. was awarded an option to
purchase 15,000 common shares. No other Named Executive Officers were awarded
stock options during 2003. The Compensation Committee intends to make grants on
a periodic basis under the 2003 Stock Option and Equity Incentive Stock Plan to
the Company's executive officers and other key employees. In making such grants,
the Compensation Committee will consider the subjective factors identified
above, as well as the number of options granted in prior years.

Restricted Shares. During 2003, the Company awarded 40,000, 35,000, and
20,000 restricted common shares to Douglas G. Borror, Chairman and Chief
Executive Officer, Jon M. Donnell, President and Chief Operating Officer, and
David S. Borror, Corporate Executive Vice President, respectively. The
restricted common shares shall vest, if at all, upon the lapse of a period of
three (3) years from the date of award, and the Company having a book value per
share of $30.00 (without adjustment for the impact of dividends and dilution).
The grants were made in recognition of the contributions made by Mr. Douglas G.
Borror, Mr. Donnell, and Mr. David S. Borror and to provide incentive for
further exemplary contributions by them and their

-24-

continued employment with the Company in the future. No other grants of
restricted shares were made to any Named Executive Officer in 2003.

Split Dollar Plan. Beginning in January of 1999 until December of 2002,
the Company maintained a Split Dollar Plan, in which certain key employees of
the Company, including all Named Executive Officers other than Donald A. Borror,
were participants. The purpose of the Split Dollar Plan was to provide
additional incentive for participating employees to remain with the Company and
contribute to its success.

Under the Split Dollar Plan, participating employees were provided with a
death benefit during employment, together with a retirement benefit upon
retirement at or after age 55 (or, if sooner, upon a "change in control" of the
Company), provided (a) the employee shall have then completed ten years of
service with the Company following implementation of the Split Dollar Plan, (b)
the Company shall have attained adjusted shareholders' equity of $100 million,
and (c) the employee shall have complied with the provisions of the
noncompetition covenant for one year following retirement.

Under the terms of the Split Dollar Plan, each participating employee paid
a portion of the policy premium; the remainder of the premium was paid by the
Company in cash. In December 2002, the Company discontinued the split dollar
plan arrangement and each of the participating employees assigned all of his or
her interest in the employee's life insurance policy to the Company in exchange
for the Company's agreement to provide the employee with an equivalent death
benefit should the employee die during the course of his or her employment and a
payment in cash equivalent to the portion of the premiums which the participants
had personally paid ($19,344 in the case of Douglas G. Borror, $11,318 in the
case of Jon M. Donnell, $3,537 in the case of David S. Borror and $2,971 in the
case of Robert A. Meyer, Jr.).

Supplemental Executive Retirement Plan. Effective January 1, 2003, the
Company adopted a Supplemental Employee Retirement Plan (the "SERP"), in which
certain key employees of the Company, including all Named Executive Officers
other than Donald A. Borror, are participants. The purpose of the SERP is to
provide additional incentive for participating employees to remain with the
Company and contribute to its success.

Under the SERP, participating employees will be eligible for retirement
benefits if the participant satisfies certain criteria as are set forth in each
employee's notice of participation. Each current participant's notice of
participation states that in order for the participant to receive retirement
benefits under the SERP, (1) the participant's employment with the Company must
have terminated for reasons other than death after the occurrence of either (a)
both (i) the participant's completion of 72 months of participation in the SERP
and (ii) the Company's adjusted shareholders' equity having exceeded $100
million, or (b) a "change in control" (as defined in the SERP), and (2) such
termination either (a) occurred after the participant reached age 55, (b)
occurred for "good reason" (as defined in the SERP) or (c) was a termination by
the Company without "cause" (as defined in the SERP).

-25-

The Compensation Committee may set forth qualifying criteria which differs
from those stated above for any future participant in the SERP. The Compensation
Committee will establish an account for each participant and otherwise
administer the SERP. Upon a participant satisfying the conditions outlined in
his notice of participation, the Company will make a lump sum distribution to
the participant in an amount equal to the value of his account. Initially, the
account shall have a value equal to the Company's contribution to the SERP as
set forth in the notice of participation. The Compensation Committee will
measure the value or the account annually by crediting any allocations made by
the Company, at the Compensation Committee's discretion, and by using a
hypothetical investment of the value of the account in an investment fund of the
Compensation Committee's choosing.

Chief Executive Officer Compensation

In accordance with the executive compensation philosophy and program
described above, and primarily in recognition of the Company's strong financial
performance during 2003, the Compensation Committee awarded Douglas G. Borror a
cash incentive bonus of $2,250,000 in 2003. Mr. Borror received an annual base
salary in 2003 of $525,000 which was the same as his 2002 base salary. In
determining Mr. Borror's compensation for 2003, the Compensation Committee
relied upon the following: (i) the Company's record net income; and (ii) the
Company having exceeded its customer satisfaction goal. Mr. Borror did not
receive an award of stock options in 2003 but was awarded 40,000 restricted
common shares in 2003. The restricted common shares shall vest, if at all, upon
the lapse of a period of three (3) years from the date of award, and the Company
having a book value per share of $30.00 (without adjustment for the impact of
dividends and dilution).

Tax Aspects

Section 162(m) of the Internal Revenue Code of 1986, as amended, prohibits
the deduction by a publicly-held corporation of compensation paid to a "covered
employee" in excess of $1,000,000 per year, subject to certain exceptions.
Generally, the Company's covered employees are the Named Executive Officers, who
are listed under the Summary Compensation Table set forth above. With the
adoption and application of the Company's Incentive Compensation Plan the
Company believes that the portion of compensation over $1.0 million for 2003
awarded to Mr. Borror and Mr. Donnell will be deductible for Federal income tax
purposes.

This report of the Compensation Committee was adopted by each of the
members of the Compensation Committee on March 11, 2004.

Compensation Committee

Zuheir Sofia, Chairman
Pete A. Klisares
C. Ronald Tilley

-26-

REPORT OF THE AUDIT COMMITTEE

The following Report of the Audit Committee does not constitute soliciting
material and should not be deemed filed or incorporated by reference into any
other Company filings under the Securities Act or the Exchange Act, except to
the extent that the Company specifically incorporates this Report by reference
in such filing.

General

The Audit Committee of our Board of Directors is comprised of three
non-employee directors (listed below). After reviewing the qualifications of the
current members of the Audit Committee, and any relationships they may have with
the Company that might affect their independence from the Company, the Board of
Directors has determined that: (1) all current Audit Committee members are
"independent" as that concept is defined in Rule 10A-3(b)(1) of the Exchange,
(2) all current Audit Committee members are independent and financially literate
for purposes of the listing requirements of The Nasdaq Stock Market, and (3)
Carl A. Nelson, Jr. qualifies as the Company's Audit Committee financial expert
under the applicable rules promulgated pursuant to the Exchange Act, and
satisfies the standards for financial sophistication set forth in the listing
requirements of The Nasdaq Stock Market.

The Audit Committee assists the Board of Directors in fulfilling its
responsibility for oversight of the quality and integrity of the accounting,
auditing and financial reporting practices of the Company. The Audit Committee
is governed by a formal written charter that is reviewed and assessed annually
(the "Charter"). On March 16, 2004, our Board of Directors amended the Charter
to address recent pronouncements by the Securities and Exchange Commission and
The Nasdaq Stock Market. A copy of the Charter, as amended and restated, is
attached as Appendix A to this proxy statement.

Review and Discussion with Independent Auditors

In discharging its oversight responsibility as to the audit process, the
Audit Committee (1) obtained from PricewaterhouseCoopers LLP a formal written
statement describing all relationships between PricewaterhouseCoopers LLP and
the Company that might bear on PricewaterhouseCoopers LLP's independence
consistent with Independence Standards Board Standard No. 1, Independence
Discussions with Audit Committees, (2) discussed with PricewaterhouseCoopers LLP
any relationships or services that may impact the objectivity and independence
of PricewaterhouseCoopers LLP, and (3) satisfied itself as to
PricewaterhouseCoopers LLP's independence. The Audit Committee also discussed
with management, the internal auditors and PricewaterhouseCoopers LLP the
quality and effectiveness of the Company's internal accounting and financial
controls.

Prior to the filing of each of the Company's Quarterly Reports on Form
10-Q, the Audit Committee met with the PricewaterhouseCooopers LLP to discuss
the results of their interim reviews, including, when applicable, (1) new or
changed accounting principles, (2) critical accounting policies, (3) unusual
transactions, and (4) estimates, judgments and uncertainties

-27-

related to such quarterly financial reports. The Audit Committee also received
written communication and held discussions with PricewaterhouseCoopers LLP
regarding the annual audit plan, including matters relating to accounting and
financial reporting, critical accounting policies, higher risk and judgmental
areas of financial reporting, and industry and business issues impacting the
Company's financial reports. Prior to filing of the Company's Annual Report on
Form 10-K, the Audit Committee discussed and reviewed the results of
PricewaterhouseCoopers LLP's audit of the financial statements as of and for the
year ended December 31, 2003. This discussion and review, conducted with and
without management present, included all communications required by Statement on
Auditing Standards No. 61, Communication with Audit Committees, as well as
critical accounting policies and the overall quality of the Company's financial
reporting.

Review and Discussion with Management

The Audit Committee reviewed and discussed the audited consolidated
financial statements of the Company as of and for the year ended December 31,
2003, with management. Management has the responsibility for the preparation of
the Company's consolidated financial statements, and PricewaterhouseCoopers LLP
has the responsibility for the audit of those statements. The Audit Committee
also discussed the results of the Company's internal audit.

Conclusion

Based on the reviews and discussions with management and
PricewaterhouseCoopers LLP noted above, the Audit Committee recommended to the
Board of Directors (and the Board of Directors approved) that the Company's
audited consolidated financial statements be included in the Company's Annual
Report on Form 10-K for the year ended December 31, 2003, to be filed with the
Securities and Exchange Commission.

This report of the Audit Committee was adopted by each of the members of
the Audit Committee on March 9, 2004.

Audit Committee

Gerald E. Mayo, Chairman
Carl A. Nelson, Jr.
Zuheir Sofia

-28-

SELECTION OF AUDITORS

The Board of Directors has selected PricewaterhouseCoopers LLP, certified
public accountants, as independent auditors of the Company for the year ending
December 31, 2004. PricewaterhouseCoopers LLP and its predecessors have audited
the books of the Company and its predecessors since 1964. Management expects
that a representative of PricewaterhouseCoopers LLP will be present at the
annual meeting, will have the opportunity to make a statement if he or she so
desires, and will be available to respond to appropriate questions.

Audit Fees

The aggregate fees billed for audit services rendered by
PricewaterhouseCoopers LLP during the years ended December 31, 2003 and 2002
were $265,335 and $412,825, respectively. Audit fees for these periods were for
professional services rendered for the audits and quarterly reviews of the
consolidated financial statements of the Company, statutory audits, issuance of
comfort letters, consents, income tax provision procedures, and assistance with
review of documents that the Company filed with the Securities and Exchange
Commission.

Audit-Related Fees

The aggregate fees billed for audit-related services rendered by
PricewaterhouseCoopers LLP during the years ended December 31, 2003 and 2002
were $29,300 and $16,000, respectively. Audit-related fees for the periods
indicated were for assurance services related to consultations concerning
financial accounting and reporting standards and Sarbanes-Oxley Act of 2002
Section 404 advisory services.

Tax Fees

The aggregate fees billed for tax services rendered by
PricewaterhouseCoopers LLP during the years ended December 31, 2003 and 2002
were $56,100 and $33,500, respectively. Tax fees for the periods indicated were
for services related to tax compliance, including the preparation of tax
returns, tax planning and tax advice.

All Other Fees

No "Other" fees were incurred for services rendered during the years ended
December 31, 2003 and December 31, 2002.

Audit Services for Benefits Plans

Audit services were rendered by PricewaterhouseCoopers LLP to the
Company's 401(k) Plan and the Health and Welfare Plan during the years ended
December 31, 2003 and December 31, 2002. The aggregate fees billed for such
audit services during these periods were $26,700 and $21,250, respectively, and
were paid by the 401(k) Plan and the Health and Welfare Plan.

-29-

Audit Committee Pre-Approval Policies and Procedures

The Audit Committee has adopted policies and procedures regarding its
pre-approval of the audit, audit-related, tax and all other non-audit services
to be provided by the Company's independent auditor to the Company (the
"Pre-Approval Policy"). This policy is designed to assure that the provision of
such services does not impair the independence of the Company's independent
auditor. Under the Pre-Approval Policy, at the beginning of each fiscal year,
the Audit Committee will review the services proposed by management and the
Company's independent auditor to be provided during that year. The Audit
Committee will then provide its pre-approval based on the limitations set forth
in the Pre-Approval Policy. Under the Pre-Approval Policy adopted by the Audit
Committee for the year ending December 31, 2004, these limitations include the
following:

o In no case should the Company retain the Company's independent
auditors to provide management consulting services or any non-audit
services that are not permitted under the applicable laws and
regulations, including, without limitation, the Sarbanes-Oxley Act
of 2002 and the Commission's related rules and regulations.

o Unless a type of service to be provided by the independent auditors
has received general pre-approval, it will require specific
pre-approval by the Audit Committee.

o Pre-approval fee levels for all services to be provided by the
independent auditors will be established annually by the Audit
Committee, and the independent auditor will update the Audit
Committee on a quarterly basis on fees incurred for audit-related,
tax, and other services. Any proposed services exceeding these
levels will require separate pre-approval by the Audit Committee.

Under the Pre-Approval Policy, the Audit Committee has designated its
Chairman with authority to grant pre-approvals for audit, audit-related, tax and
other services that exceed the pre-approved fee levels or are services which the
Audit Committee has not specifically pre-approved. The Chairman shall report any
pre-approval decisions to the Audit Committee at its next scheduled meeting for
its review and approval. The Audit Committee has not delegated to management its
responsibilities to pre-approve services performed by the independent auditors.

-30-

PERFORMANCE GRAPH

The following performance graph does not constitute soliciting material
and should not be deemed filed or incorporated by reference into any other
Company filings under the Securities Act or the Exchange Act, except to the
extent that the Company specifically incorporates this performance graph by
reference in such filing.

The following performance graph compares the cumulative total shareholder
return on our common shares from December 31, 1998, until December 31, 2003,
with the cumulative total return of (a) the NASDAQ Composite Index and (b) the
Standard and Poor's Homebuilding Index. The performance graph assumes the
investment, on December 31, 1998, of $100 in our common shares, the NASDAQ
Composite Index, and the Standard and Poor's Homebuilding Index, and that all
dividends were reinvested.

Closing Price Index

[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]

NASDAQ Composite S&P Homebuilding DHOM
---------------- ---------------- ----
December 31, 1998 100.0 100.0 100.0
December 31, 1999 185.6 66.8 56.8
December 31, 2000 112.7 103.8 76.7
December 31, 2001 89.0 131.8 141.8
December 31, 2002 60.9 130.5 129.6
December 31, 2003 91.4 257.3 275.7

-31-

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Description and Ownership of BRC

BRC is in the business of owning, managing and consulting on multifamily
housing, commercial real estate and undeveloped real estate. Douglas G. Borror
and David S. Borror, who are directors and executive officers of the Company,
and Donald A. Borror, who is a director of the Company, also are directors of
BRC. David S. Borror, Douglas G. Borror and Terry E. George also serve as
President, Executive Vice President and Vice President, respectively, of BRC.
Mr. George additionally serves as Secretary and Treasurer of BRC. The Borror
family, directly and through its ownership of BRC, beneficially owned
approximately 49.3% of the Company's outstanding common shares as of March 17,
2004.

BRC has issued and outstanding 81,567 Class A (voting) common shares and
273,195 Class B (non-voting) common shares, all of which are beneficially owned
by the children of Donald A. Borror, in some cases through trusts for their
benefit, and by Terry E. George. Through their ownership and control of BRC,
such persons are in a position to control the Company. See "Ownership of Our
Common Shares by Principal Shareholders" beginning at page 3. The following
table sets forth the share ownership of BRC as of March 31, 3004:

Percentage Percentage Percentage
Class A of Class A Class B of Class B Combined of
Shareholders Shares Shares Shares Shares Total Combined
- ------------------------------------------- ---------- ------- ---------- -------- ----------

Douglas G. Borror, Trustee 43,099 52.84% 120,656 44.16% 163,755 46.16%
of the Douglas G. Borror
Revocable Trust (1)

David S. Borror 23,328 28.60% 81,874 29.97% 105,202 29.65%

David S. Borror, Trustee, 9,321 11.43% 54,605 19.99% 63,926 18.02%
1987 Irrevocable Qualified
Subchapter S Trust (2)

Terry E. George 5,819 7.13% 16,060 5.88% 21,879 6.17%
------ ------- -------

Totals 81,567 273,195 354,762

- ----------

(1) The Douglas G. Borror Revocable Trust is a revocable trust established by
Douglas Borror pursuant to a trust agreement dated June 18, 2001. During
his lifetime, Douglas Borror is the sole trustee and beneficiary of the
Douglas G. Borror Revocable Trust. Upon the death of Douglas Borror, David
S. Borror becomes the trustee and Douglas Borror's children become the
sole beneficiaries of the Douglas G. Borror Revocable Trust.

(2) The 1987 Irrevocable Qualified Subchapter-S Trust is an irrevocable trust
established by Donald Borror pursuant to a trust agreement dated June 26,
1987 (the "Irrevocable Trust"). David Borror is the trustee of the
Irrevocable Trust and Donna Myers (Donald and Joanne Borror's daughter and
Douglas and David Borror's sister) is the sole beneficiary of the
Irrevocable Trust. The Irrevocable Trust expires upon the death of Donald
Borror.

-32-

BRC and its shareholders are parties to a Close Corporation Agreement (the
"BRC Agreement") that governs the operation of BRC and certain relationships
among its shareholders. The BRC Agreement provides that all the voting power of
the BRC shares is to be exercised by a majority of the directors of BRC, all of
whom will be elected by Donald A. Borror and Douglas G. Borror jointly until the
death or incapacity of either of them and, thereafter, by the other of them
solely. David S. Borror has the right to appoint the directors of BRC in the
event Douglas G. Borror and Donald A. Borror are both deceased or incapacitated
and, in such event, it is anticipated that David S. Borror will appoint an
advisory committee of the then existing members of the Board of Directors to
assist him with material decisions affecting BRC, including issues involving
BRC's ownership of common shares of the Company.

Under the provisions of the BRC Agreement, David S. Borror is required to
be elected as a director of BRC as long as he continues to hold at least 10% of
the common shares of BRC, absent his removal for "cause" within the meaning of
the BRC Agreement. As long as he continues to hold at least 10% of the common
shares of BRC and as long as BRC has the ability to elect at least two directors
of the Company, BRC also is required to use its best efforts to elect David S.
Borror as a director of the Company. The BRC Agreement generally prohibits the
transfer of common shares of BRC to persons who are not members of the Borror
family unless certain procedures are followed. BRC is required to repurchase all
of the common shares of BRC owned by Terry E. George in the event of his death
or incapacity and has the right to purchase at any time the common shares of BRC
owned by Terry E. George. BRC also is required to purchase a certain number of
common shares of BRC from the estates of Borror family members. Under certain
conditions, Borror family members who are not employed by BRC have the right to
require BRC to repurchase common shares of BRC held by such family members. In
certain instances, the obligation of BRC to repurchase common shares of BRC may
be assumed by certain Borror family shareholders.

Transactions with BRC and Related Persons

The Company has an internal policy that requires transactions with our
affiliates be on terms no less favorable to us than those reasonably available
from unrelated third parties. All material transactions with affiliates must be
reviewed for consistency with this policy, and approved, by the Audit Committee
of the Board of Directors. Prior to October 2003, when the Audit Committee
assumed responsibility for approval of related party transactions, all such
material transactions were required to be approved by the Affiliated
Transactions Review Committee.

We lease from BRC our two corporate offices in Central Ohio. The first
building is approximately 40,000 gross square feet (37,557 net rentable square
feet) and the lease commenced January 1, 1998. The lease has a term of twelve
years, a triple net rental rate of $12.00 per square foot and provides for two
options to renew for periods of five years each at then-current market rates.
The rental rate for the building was established by an MAI appraiser
commissioned by the Affiliated Transaction Review Committee, and confirmed in a
review by a second MAI appraiser. We paid to BRC $451,000 under this lease
during 2003. We believe that

-33-

the terms of this lease are no less favorable to us than those reasonably
available from unrelated third parties for comparable space.

The second building that we lease from BRC is approximately 35,000 gross
square feet (33,260 net rentable square feet) and the lease commenced November
1, 2003. The lease has a term of fifteen years and a triple net rental rate per
square foot of $12.58 for the first five years, $13.18 for the second five years
and $13.83 for the last five years. The lease also provides for two options to
renew for periods of five years each at then-current market rates. During 2002
we purchased land and contracted to build this second corporate office building.
On October 31, 2003, we sold the corporate office building to BRC for $4.5
million and leased it back. The sales price approximated our cost of the land
and building. The terms of the sale and leaseback were negotiated based on bids
from multiple third parties, reviewed by an MAI appraiser and approved by the
Affiliated Transaction Review Committee. We paid to BRC $70,000 under this lease
during 2003. We believe that the terms of this lease are no less favorable to us
than those reasonably available from unrelated third parties for comparable
space.

During 2003, we leased from BRC an aggregate of 15,750 square feet of
commercial space in Central Ohio. We used this space for our decorating studio,
centralized sales office and mortgage financing services company. The weighted
average lease rate was $11.20 a square foot. The Affiliated Transactions Review
Committee approved each of the leases after review of a report by an independent
MAI appraiser. During November 2003, the staff and activities in this space
moved into our new corporate office building. We paid to BRC an aggregate of
$230,000 under leases for this space during 2003. As of January 1, 2004, the
remaining lease obligation for the commercial space was approximately $300,000.
We believe that the terms of these leases are no less favorable to us than those
reasonably available from unrelated third parties for comparable space.

Occasionally, our employees provide limited administrative services to
BRC, for which we receive fees. We received aggregate fees of $8,000 from BRC
for such administrative services in 2003.

Jon M. Donnell, our President and Chief Operating Officer, and BRC are
parties to a Stock Option Agreement, dated November 13, 1998, pursuant to which
BRC has granted to Mr. Donnell an option to purchase from BRC 100,000 of our
common shares owned by BRC at an exercise price of $5.75 per share. The option
is not currently exercisable and will not become exercisable unless and until it
vests. The option will vest, if at all, upon the first to occur of the
following:

o we have adjusted shareholders' equity of not less than $100 million
as of the last day of any fiscal quarter during the period
commencing on June 30, 2006 and terminating on June 30, 2013 and Mr.
Donnell continues to be an employee as of such date;

o a change in control occurs;

o we terminate Mr. Donnell's employment other than for cause; or

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o Mr. Donnell terminates his employment for good reason.

The option will terminate and will no longer be exercisable on June 30,
2014 or the date of our termination of Mr. Donnell for cause, whichever is
earlier. For purposes of this agreement, the terms "cause," "change in control"
and "good reason" have the meaning given to such terms in Mr. Donnell's
employment agreement (See "INFORMATION ABOUT OUR EXECUTIVE OFFICERS AND
COMPENSATION MATTERS - Employment Agreements" beginning at page 17) and the term
"adjusted shareholders' equity" means our consolidated shareholders' equity, as
reported in our consolidated balance sheet, as adjusted by subtracting the net
proceeds from the sale of any of our equity securities after the date of the
option agreement and by adding the fair value of any shareholder dividends or
distributions made after the date of the option agreement.During 2003, Donald A.
Borror and Richard Myers owned Printing Plus, Inc., a printing company which has
provided printing services to the Company. Mr. Myers operates Printing Plus,
Inc. Mr. Myers is the former husband of Donna Borror Myers, who is Donald A.
Borror's daughter and Douglas G. and David S. Borror's sister. In 2003, we paid
$114,536 to Printing Plus, Inc. for printing services. All of the printing
services provided to us by Printing Plus, Inc. in 2003 were pursuant to
contracts that had been competitively bid. None of our transactions with
Printing Plus, Inc. were reviewed or approved by the Affiliated Transactions
Review Committee or the Audit Committee of the Board of Directors. During the
fourth quarter of 2003, Donald Borror transferred all of his interest in
Printing Plus, Inc. to Mr. Myers.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our officers and directors, and
greater than 10% shareholders, to file reports of ownership and changes in
ownership of our securities with the Securities and Exchange Commission. Copies
of the reports are required by Commission regulation to be furnished to us.
Based on our review of these reports and written representations from reporting
persons, we believe that all reporting persons complied with all filing
requirements during the year ended December 31, 2003, except for the following:

o Mr. Mayo was inadvertently late in reporting a sale of 2,500 shares
on November 21, 2003 and a sale of 2,500 shares on November 24,
2003. These transactions were reported on a Form 4 filed with the
Commission on December 4, 2003.

o Mr. Tilley was inadvertently late in reporting the acquisition of
448 "phantom" common shares through the Company's Executive Deferred
Compensation Plan. This transaction was reported on a Form 4 filed
with the Commission on January 26, 2004.

o Mr. Klisares was inadvertently late in reporting the acquisition of
"phantom" common shares through the Company's executive deferred
compensation plan as follows: 1,070 shares on March 31, 2003, 609
shares on June 30, 2003, and 105 shares on August 4, 2003. These
transactions were reported on a Form 4 filed with the Commission on
January 26, 2004.

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PROPOSAL 1

ELECTION OF DIRECTORS

Number and Term of Directors

Section 2.02 of the Regulations provides for the directors to be divided
into two classes, designated Class I directors and Class II directors. The
directors are empowered to fix or change the number of directors, subject to the
limitations that the number of directors may not be increased to more than ten
(10) nor reduced to less than three (3).

On March 16, 2004, our Board of Directors unanimously adopted a resolution
increasing the authorized number of directors from nine (9) to ten (10), and
designating the newly created vacancy as a Class I director. The purpose of the
increase in the authorized number of directors was to create a vacancy on the
Board that would be filled at the annual meeting by the election of a new
independent director, David Blom. The Board of Directors approved this increase
to allow for the addition of an independent director to the Board, which will
increase the total number of independent directors from five to six. At a time
when the Company's Board committees are necessarily assuming greater
responsibilities, the Board believes that the addition of an independent
director will allow for a more balanced allocation of committee and Chair
assignments, and, therefore, strengthen all Board committees and the Board of
Directors as a whole.

Nominees For Election at the Annual Meeting

Class I Directors

At the recommendation of our Governance Committee, the Board has nominated
David Blom to fill the vacancy in the Class I directors caused by the increase
in the authorized number of directors. Upon election, Mr. Blom will serve as a
member of the Board of Directors until the 2005 Annual Meeting of Shareholders,
the remaining term of Class I directors. The following table sets forth for Mr.
Blom and for each of the other Class I directors who will continue to serve as
directors until the 2005 Annual Meeting of Shareholders: his name, age,
principal occupation, occupation held during the past five years, other
companies of which he is a director, and the year in which he first became a
director of the Company.

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CLASS I DIRECTORS
(TERMS EXPIRE IN 2005)

Director
Name Age Principal Occupation/Past Experience Since
- ---- --- ------------------------------------ -----

Nominee for
Class I Director

David Blom 50 Mr. Blom has served as the Chief Executive Officer of --
OhioHealth, a not-for-profit, charitable health system
based in Columbus, Ohio, since March 2002, and as its
President since 1999. Prior to that time, Mr. Blom
served OhioHealth as Executive Vice President and
Chief Operating Officer from 1998 to 1999. Currently,
Mr. Blom serves on the board of the Ohio Hospital
Association.

Continuing
Class I Directors

Douglas G. Borror 48 Mr. Borror has served as Chairman of the Board of 1984
Directors since July 1999 and as Chief Executive
Officer of the Company since September 1992.
Currently, Mr. Borror also serves on the board of
directors of Columbia Gas of Ohio, Inc., The
Huntington National Bank, and Command Alkon
Incorporated, and is a member of the Board of Trustees
of The Ohio State University.

Jon M. Donnell 44 Mr. Donnell has served as President of the Company 1997
since July 1999, and as Chief Operating Officer of the
Company since September 1996. Mr. Donnell also
served as Chief Financial Officer of the Company from
August 1995 through June 1998. Mr. Donnell currently
serves on the board of The Ohio Housing Trust.

Zuheir Sofia 59 Mr. Sofia is the Chairman of Sofia & Company, Inc., an 2003
investment banking firm and President of The Stanberry
Group, LLC, an investment advisor. From 1986 to
1998, Mr. Sofia served as President, Chief Operating
Officer, Treasurer and Director of Huntington
Bancshares, Incorporated. Currently, Mr. Sofia serves
on the board of directors of Lancaster Colony
Corporation, and is the Chairman of the Board of
Trustees of The Ohio State University.

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C. Ronald Tilley 68 Mr. Tilley served as Chief Executive Officer and 1996
Chairman of the Board of Directors of Columbia Gas
Distribution Companies, an Ohio-based natural gas
company, from 1991 until his retirement in March 1996.

Class II Directors

At the recommendation of our Governance Committee, the Board of Directors
proposes the election of five (5) nominees listed in the table below as Class II
directors, each to serve until the 2006 Annual Meeting of Shareholders. The
table sets forth for each nominee: his name, age, principal occupation,
occupation held during the past five years, other companies of which he is a
director, and the year in which he first became a director of the Company. R.
Andrew Johnson is standing for election to the Board seat previously held by
Pete A. Klisares, who will not stand for re-election after providing many years
of meritorious service to the Company.

CLASS II DIRECTORS
(NOMINEES FOR TERMS EXPIRING IN 2006)

Director
Name Age Principal Occupation/Past Experience Since
- ---- --- ------------------------------------ -----

Donald A. Borror 74 Mr. Borror has served as Chairman Emeritus of the 1978
Company since July 1999. Prior to that time, Mr.
Borror served as Chairman of the Board of Directors
from 1978 through July 1999, and as President of the
Company from 1977 to March 1987.

David S. Borror 45 Mr. Borror has served as Corporate Executive Vice 1985
President of the Company since October 2003. From
1988 through September 2003, Mr. Borror served as
Executive Vice President of the Company. Since
December 2000, Mr. Borror has also served as President
of BRC.

R. Andrew Johnson 50 Mr. Johnson has served as Chief Executive Officer of --
The Johnson Family's Diamond Cellar, a Columbus,
Ohio based retail jewelry store and one of the largest
independently owned jewelry companies in the nation,
since January 2000. Currently, Mr. Johnson serves on
the Board of Directors of Children's Hospital and as
Chairman of the Columbus Chapter of the Young
Presidents' Organization.

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Gerald E. Mayo 71 Mr. Mayo served as the Chairman and a Director of the 1994
Midland Life Insurance Company, and as Chairman and
a Director of Midland Financial Services, Inc. from
1992 until his retirement in October 1997. Currently,
Mr. Mayo also serves on the board of directors of
McKesson/HBOC and Depositor Assistance Corp.

Carl A. Nelson, Jr. 58 Mr. Nelson has been an independent business consultant 2003
and lecturer at The Ohio State University since March
2002, when he retired as a partner from Arthur
Andersen after 31 years of service. Mr. Nelson served
as Managing Partner of the Arthur Andersen Columbus,
Ohio office from 1994 until his retirement, and was the
leader of the firm's consulting services for the products
industry in the United States. Currently, Mr. Nelson
also serves on the board of directors of Market Sphere
Consulting, Shearer's Food, Inc., Star Leasing, and
Stonehenge Partners, Inc.

Election Procedures

The Company has not received from any shareholder any notice of a proposed
nominee for election at the 2004 annual meeting. It is intended that, unless
otherwise directed, the shares represented by the enclosed proxy will be voted
FOR the election of Mr. Blom as a Class I director, and FOR the election of
Messrs. Donald Borror, David Borror, Johnson, Mayo, and Nelson as Class II
directors. In the event that any nominee for director should become unavailable,
the number of our directors may be decreased pursuant to the Regulations, or our
Board of Directors may designate a substitute nominee, in which event the shares
represented by the enclosed proxy will be voted for the substitute nominee.

All the nominees for election at the 2004 annual meeting have indicated a
willingness to stand for election and to serve if elected, and our Board of
Directors has no reason to believe that any of the nominees will be unable to
serve if elected as a director.

Recommendation and Vote

Our shareholders do not have cumulative voting rights in the election of
directors. The six nominees receiving the greatest number of votes will be
elected as directors.

Our Board of Directors recommends that you vote FOR the election of each
of its nominees for director.

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PROPOSAL 2

APPROVAL OF THE COMPANY'S AMENDED AND RESTATED
2003 STOCK OPTION AND INCENTIVE EQUITY PLAN

At the annual meeting, we will submit to our shareholders a proposal to
approve the Company's Amended and Restated 2003 Stock Option and Incentive
Equity Plan, which amends and restates the Company's 2003 Stock Option and
Incentive Equity Plan. The primary changes effected by the Amendment and
Restatement are to: (1) prohibit us from repricing stock options without
shareholder approval; (2) provide that no more than a de minimus number of
awards granted under the Amended and Restated 2003 Stock Option and Incentive
Equity Plan will constitute (in the aggregate): (a) options with an exercise
price below fair market value; (b) time-based restricted shares that vest in
less than three years, or (c) performance-based restricted shares that vest in
less than one year; and (3) provide that, for purposes of the prohibition in
paragraph 2 above, de minimus will mean no more than ten percent (10%) of the
authorized shares under the 2003 Stock Option and Incentive Equity Plan
(currently 50,000), subject to adjustment for stock splits. On March 16, 2004,
our Board of Directors approved the Amended and Restated 2003 Stock Option and
Incentive Equity Plan (the "2003 Incentive Equity Plan") with these amendments.

This summary of the principal features of the 2003 Incentive Equity Plan
is qualified in its entirety by the full text of the 2003 Incentive Equity Plan,
which we have attached to this proxy statement as Appendix B and which we
incorporate herein by reference.

General

The 2003 Incentive Equity Plan authorizes the granting of (i) incentive
stock options ("ISOs") as defined in Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), (ii) nonstatutory stock options, (iii)
performance shares, (iv) performance units, (v) restricted shares and (vi) stock
appreciation rights ("SARs") (ISOs, NSOs, performance shares, performance units,
restricted shares and SARs are referred to collectively as "Awards"). The
purpose of the 2003 Incentive Equity Plan is to foster and promote our long-term
financial success and to materially increase shareholder value by providing
employees and eligible directors an opportunity to acquire an ownership interest
in the Company and enabling us to attract and retain the services of outstanding
employees and directors upon whose judgment, interest and special efforts the
successful conduct of our business is largely dependent.

There are 500,000 (subject to adjustment as described below) of our common
shares authorized under the 2003 Incentive Equity Plan. However, in any year, no
employee may be issued options affecting more than 50,000 common shares (subject
to adjustment as described below), and SARs affecting more than 50,000 common
shares (subject to adjustment as described below). Common shares subject to the
2003 Incentive Equity Plan may either be authorized but unissued shares or
treasury shares. If any award granted under the 2003 Incentive Equity Plan is
cancelled, terminated or otherwise settled without the issuance of any shares,
the shares reserved for such award may again be granted under the 2003 Incentive
Equity Plan.

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2003 Incentive Equity Plan Table

Other than "director options," as of the date of this Proxy Statement, no
determination has been made regarding the identity of the participants to whom
Awards will be granted under the 2003 Incentive Equity Plan, or the types of
Awards or numbers of shares to be subject to Awards that will be granted to such
participants. We anticipate that, annually, each of our non-employee directors
will be granted director options covering 2,500 common shares under the 2003
Incentive Equity Plan. Consequently, except for such option grants to our
non-employee directors, it is not presently possible to determine, with respect
to the persons and groups shown in the table below, the benefits or amounts that
will be received in the future by such persons or groups pursuant to the 2003
Incentive Equity Plan. All of our executives will be eligible to be granted
Awards under the 2003 Incentive Equity Plan, including the executive officers
named in the Summary Compensation Table. The following table sets forth the
aggregate number of options granted to the persons and groups listed below, as
of December 31, 2003, pursuant to the 2003 Incentive Equity Plan since its
inception.

Number of Common
Shares Underlying Options
Granted Under the 2003
Name and Position Incentive Equity Plan
---------------------------------------------------------------------- -------------------------

Douglas G. Borror, Chairman and CEO 0

Donald A. Borror, Chairman Emeritus, Director and Nominee 0

Jon M. Donnell, President, COO and Director 0

David S. Borror, Corporate Executive VP, Director and Nominee 0

Robert A. Meyer, Jr., Senior VP, General Counsel and Secretary 15,000

David Blom, Nominee 0

R. Andrew Johnson, Nominee 0

Gerald E. Mayo, Director and Nominee 2,500

Carl A. Nelson, Jr., Director and Nominee 2,500

All current executive officers as a group (4 persons) 15,000

All current directors (including nominees) who are 12,500
not executive officers as a group (7 persons)

All employees (including all current officers who 75,000
are not executive officers) as a group (4 persons)

-41-

Summary of Operation of the 2003 Incentive Equity Plan

Administration of the 2003 Incentive Equity Plan

The 2003 Incentive Equity Plan is administered by the Compensation
Committee, which has the authority to determine, among other things, the
participants to whom Awards will be granted under the 2003 Incentive Equity
Plan, the type of Awards to be granted, and the terms and conditions of such
Awards. The Compensation Committee consists of not less than three members of
the Board or directors (i) who are "outside directors" within the meaning of
Treasury Regulation Sections 1.162-27(c)(4) and 1.162-27(e)(3)(i), (ii) who are
"non-employee directors" within the meaning of Rule 16b-3 under the Exchange
Act, (iii) who are "independent directors" for purposes of the listing standards
of The Nasdaq Stock Market, and (iv) none of whom receive payment from us in any
capacity other than as a director, except as permitted under Treasury Regulation
Sections 1.162-27(e)(3)(ii) and (iii). The plan also allows the Compensation
Committee to delegate ministerial duties and the authority to issue some Awards
to employees who are not officers of the Company.

Options

Options may be granted under the 2003 Incentive Equity Plan. No ISO may be
exercised more than ten years after it is granted, and any ISO which is granted
to an individual who, on the effective date of the grant, owns stock possessing
more than 10% of the total combined voting power of all classes of our stock
then outstanding and entitled to vote, will not be exercisable more than five
years after it is granted. No person may be granted ISOs under the 2003
Incentive Equity Plan if it would cause the aggregate fair market value
(determined as of the date an ISO is granted) of the shares with respect to
which all incentive stock options held by such person are exercisable for the
first time by such option holder during any calendar year under the 2003
Incentive Equity Plan and all other stock option plans maintained by us to
exceed $100,000. ISOs may only be granted to persons who are common law
employees of the Company at the time of grant.

Exercise of Options

Options will vest and be exercisable under a schedule described in each
Award agreement. Although this schedule may vary, the Company expects that
options will vest and be exercisable generally within three to five years after
the date of grant. Director options will vest and be exercisable immediately
after the date of grant. Options to purchase a fraction of a share of stock will
be paid in cash equal to the fair market value of the fractional share. Unless
otherwise provided in the Award agreement, no employee or director may exercise
options for fewer than the lesser of (i) 100 shares, or (ii) the full number of
shares for which options are then exercisable.

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Option Exercise Price

The exercise price of each Option will be specified by the Compensation
Committee in the Award agreement. For ISOs, the exercise price may not be less
than the fair market value of a common share on the date of the grant. In
addition, under the 2003 Incentive Equity Plan, no more than a de minimus number
of Awards (including options) may constitute (in the aggregate): (a) options
with an exercise price below fair market value; (b) time-based restricted shares
that vest in less than three years, or (c) performance-based restricted shares
that vest in less than one year. For purposes of the foregoing, the term de
minimus means no more than ten percent (10%) of the authorized shares under the
2003 Incentive Equity Plan (currently 50,000), subject to adjustment for stock
splits.

The fair market value of a common share on a particular date will be the
closing sale price as shown on the Nasdaq National Market on the most recent
trading day. As of the close of trading on March 17, 2004, the fair market value
of a common share was $36.44 per share. In the case of any ISO granted to an
individual who, on the effective date of the grant, owns shares possessing more
than 10% of the total combined voting power of all classes of our stock, the
exercise price per share must be at least 110% of the fair market value of a
common share on the effective date of the ISO grant.

Payment of Option Exercise Price and Tax Withholding

Unless otherwise specified in the Award agreement, payment of the exercise
price must be made in cash. The Compensation Committee may, however, in its
discretion and in accordance with applicable law, develop other procedures to
permit participants to pay the exercise price, including by attesting or
tendering shares having a fair market value equal to the exercise price of the
Option. We will make appropriate arrangements for the satisfaction of all tax
withholding requirements applicable to the exercise of such Option. If the
participant has not paid to us any required taxes, we may withhold from the
value of the Award any amount necessary to comply with applicable law. The
Compensation Committee may elect, in its sole discretion, to permit the
participant to pay applicable taxes by cash or personal check, by having shares
otherwise issuable under the 2003 Incentive Equity Plan withheld by us, by
surrendering previously acquired common shares that the participant has held for
at least six months or by a combination thereof.

Restricted Shares

Restricted shares consists of common shares granted to employees, without
payment therefore, which are subject to restrictions during a restriction
period. These Awards are additional compensation for services to us or one of
our subsidiaries, and are subject to such terms and conditions as the
Compensation Committee determines appropriate. Restricted shares may not be
sold, assigned or otherwise transferred during the restriction period,
throughout which the Compensation Committee will determine if the employee has
met the conditions placed on the restricted shares. Subject to such other
restrictions as are imposed by the

-43-

Compensation Committee, we will normally hold the shares covered by a restricted
share award in escrow pursuant to a stock power during the restriction period.
Alternatively, restricted shares may instead be issued to the recipient with a
legend evidencing the applicable restrictions. If all restrictions have been met
by the end of the restriction period, the shares will be released from escrow
(or any restrictions placed on the certificate removed) after the restriction
period. If the restrictions have not been satisfied, the shares will be
forfeited and will again become available for grants under the 2003 Incentive
Equity Plan.

The 2003 Incentive Equity Plan provides that no more than a de minimus
number of Awards granted thereunder may constitute (in the aggregate): (a)
options with an exercise price below fair market value; (b) time-based
restricted shares that vest in less than three years, or (c) performance-based
restricted shares that vest in less than one year. For purposes of the
foregoing, the term de minimus means no more than ten percent (10%) of the
authorized shares under the 2003 Incentive Equity Plan (currently 50,000),
subject to adjustment for stock splits. In addition, for purposes of subsection
(b) above, an Award in which 33-?% of the grant vests at the end of each year
after the grant date shall not be prohibited or count against the de minimus
commitment.

During the restriction period, the employee to whom the restricted share
Award is made may exercise full voting rights associated with the restricted
shares and we will hold all dividends or other distributions in escrow for the
employee. At the end of the restriction period, such dividends or distributions
will be forfeited or distributed as discussed above.

Performance Shares and Performance Units

The Compensation Committee also may issue performance shares and
performance units to employees based on the employee's performance and overall
contribution to preserve and increase our value. Based upon criteria set forth
in the 2003 Incentive Equity Plan, which will be applied to the Company's Chief
Executive Officer and any other employee whose compensation is affected by
Section 162(m) of the Code, the Compensation Committee may establish performance
goals for an employee for a particular performance period. Any such goals must
be communicated to the affected employee no later than the earlier of 90 days
after the beginning of, or the expiration of 25% of, the performance period. The
Compensation Committee will adjust performance goals to reflect any substantive
changes in the employee's description or duties and, to the extent such goals
are based on common shares, to reflect any changes in our capitalization. At the
end of the performance period, the employee's performance will be assessed and
performance shares or units will be either (i) forfeited, to the extent the
goals have not been met, or (ii) valued and distributed, in a lump sum payment
in the form of cash, stock or both, to the extent applicable goals have been
met. Unless the Award agreement specifies otherwise, during the performance
period employees may not exercise full voting rights associated with their
performance shares or units, and all dividends or other distributions pertaining
to the performance shares or units will be held by the Company in escrow and
will be either distributed or forfeited as discussed above.

-44-

Performance shares also may be issued to employees who have contributed to
the success of the Company without regard to specific performance standards.

Stock Appreciation Rights

The Compensation Committee may, in its discretion, grant an SAR to an
employee. SARs may be granted either alone or affiliated or in tandem with any
option granted under the 2003 Incentive Equity Plan. Upon the exercise of an SAR
granted in tandem with an option, the option to which the SAR relates (or the
corresponding portion thereof) will be forfeited upon payment of the exercised
SAR. Upon the exercise of an option granted in tandem with an SAR, the SAR to
which the option relates (or the corresponding portion thereof) will be
forfeited. A tandem SAR will expire, unless previously exercised, no later than
the expiration of the related option. The exercise price of a tandem SAR may not
be less than the exercise price of the related option (or portion thereof)
surrendered by the option holder, and the value of the payout for the tandem SAR
will not be more than 100% of the difference between the exercise price of the
related option and the fair market value of a common share subject to the
related option at the time the SAR is exercised. A tandem SAR may only be
exercised if the fair market value of the shares subject to the related option
is larger than the exercise price of the related option.

An affiliated SAR will be deemed to be exercised at the time the
affiliated option is exercised, and will expire no later than the date on which
the affiliated option expires. The value of the payout for an affiliated SAR
will not be more than the exercise price of the affiliated option and an
affiliated SAR may only be exercised if the fair market value of the shares
subject to the affiliated option is larger than the exercise price of the
affiliated option.

SARs also may be issued on a freestanding basis subject to the terms
specified in the Award agreement. The exercise price of a freestanding SAR may
not be less than fair market value of a common share on the date of the grant.
Freestanding SARs are not tied to a specific option and when exercised do not
result in the forfeiture of any options. In its discretion the Compensation
Committee may provide for the payment of an SAR in cash, shares or a combination
of both.

Exercise of Awards; Expiration and Termination

If exercisable by their terms, Awards generally must be exercised before
the earlier of 90 days after the date of termination of service (unless the
option holder continues to provide regular services to the Company as a director
or, in the Committee's discretion, as a consultant), the fixed expiration date
or ten years from the date of grant in the case of a director's option, NSOs or
ISOs (5 years in the case of an ISO held by a 10% shareholder). If a
participant's employment is terminated for cause (as such term is defined in the
2003 Incentive Equity Plan), each of the participant's outstanding Awards will
be forfeited. In the event of the death or disability (as such term is defined
in the 2003 Incentive Equity Plan) of a participant while in the employment of
or while serving as a director on the Board, each of the participant's
unexercised Awards will become immediately exercisable by his or her estate and
will expire on the earlier of

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(i) the fixed expiration date, or (ii) 12 months after the date of termination
due to death or disability. In the case of retirement (as such term is defined
in the 2003 Incentive Equity Plan), the participant's unexercised Awards will
expire on the earlier of (i) the fixed expiration date or (ii) 12 months after
the termination of employment due to retirement (three months in the case of an
ISO). If a participant fails to comply with certain requirements of the 2003
Incentive Equity Plan, such as obtaining the Company's written consent before
engaging in certain activities that may be adverse to its interests, he or she
will forfeit all outstanding Awards. These activities are set forth in the 2003
Incentive Equity Plan.

Repricing

The 2003 Incentive Equity Plan prohibits the Compensation Committee from
"repricing" outstanding Awards without shareholder approval. Repricing refers to
a change by the Compensation Committee of any term of an outstanding Award (such
as its exercise price or exercise period) or the exchange of an Award for
another Award. The 2003 Incentive Equity Plan does allow the Company to
repurchase any outstanding Award for cash at a value established, in good faith,
by the Compensation Committee (such as the application of the Black Scholes
valuation model or similar model).

Change in Control

A "change in control" will be deemed to have occurred upon the happening
of any of the following events:

o Douglas Borror and David Borror both cease to be members of the
Board of Directors;

o the Company;

o any entity under common control with the Company;

o BRC Properties Inc. or any of its shareholders or members of
the family of Donald A. Borror; or

o any employee benefit plan of any entity described above;

o the adoption by our shareholders of a plan relating to the
liquidation or dissolution of the Company.

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In the event of a change in control:

o each option (other than director options) outstanding on the date
that the change in control occurs will be cancelled in exchange for
cash equal to the excess between the change in control price (as
defined in the 2003 Incentive Equity Plan) over the exercise price
of the cancelled option, and all related SARs will be cancelled;

o all directors options will be cancelled in exchange for a lump sum
cash payment equal to the difference between the change in control
price and the exercise price (if, however, after the change in
control, the common shares continue to be traded on an established
securities market or the director continues to be a Board member,
the director options will be unaffected by the change in control);

o all freestanding SARs will be deemed exercisable and will be paid in
a single lump sum cash payment;

o all performance goals will be deemed to have been met and all
performance shares and units will be distributed in a single lump
sum cash payment;

o all stock units will be settled for a lump sum cash payment; and

o any restrictions applicable to restricted shares will lapse and will
be unconditionally transferred to the holders.

The aforementioned accelerated payments will not be made if the
Compensation Committee determines, prior to the change in control and subject to
requirements contained in the 2003 Incentive Equity Plan, that immediately after
the change in control, the Awards will be honored or assumed, or substantially
equivalent rights having substantially equivalent value will be substituted
therefore by the employee's new employer.

Limitations on Transfer of Awards

With the permission of the Compensation Committee, a person who has been
granted an Award under the 2003 Incentive Equity Plan may transfer such Award
(other than an ISO) to a revocable inter vivos trust as to which the participant
is the settlor or may transfer such Award to a "permissible transferee." A
permissible transferee is any member of the immediate family of the participant,
any trust, whether revocable or irrevocable, solely for the benefit of members
of the participant's immediate family, any partnership or limited liability
company whose only partners or members are members of the participant's
immediate family or an organization described under Section 501(c)(3) of the
Code. Any transferee of an Award will remain subject to all of the terms and
conditions applicable to such Award and any rules prescribed by the Compensation
Committee. A permissible transferee may not retransfer an Award except by will
or the laws of descent and distribution, and then only to another permissible
transferee. Other than as described above, an Award granted under the 2003
Incentive Equity Plan may not be

-47-

transferred except by will or the laws of descent and distribution and, during
the lifetime of the employee to whom the Award was granted, may be exercised
only by such employee, his guardian or legal representative.

Adjustments Upon Changes in Capitalization

The number of common shares available for Awards and subject to
outstanding Awards under the 2003 Incentive Equity Plan will be adjusted, as
appropriate, by the Compensation Committee in the event of any merger,
consolidation, recapitalization, reclassification, split-up, combination of
shares, stock dividend or other similar transaction affecting the common shares.

Amendment, Modification and Termination

The Board of Directors or the Compensation Committee may at any time
terminate, suspend or amend the 2003 Incentive Equity Plan, in whole or in part,
without shareholder approval. The Board of Directors or the Compensation
Committee, however, may not amend the 2003 Incentive Equity Plan without
shareholder approval if such approval is required (i) to satisfy the
requirements of Rule 16b-3 under the Exchange Act, (ii) to satisfy applicable
requirements of the Code, or (iii) to satisfy applicable requirements of The
Nasdaq Stock Market or any securities exchange on which any of our equity
securities are listed or traded. In addition, no amendment may result in the
loss of a Compensation Committee member's status as a "non-employee director,"
cause the 2003 Incentive Equity Plan not to meet the requirements of Rule 16b-3
or, without the consent of the participant, adversely affect any Award issued
before the amendment, termination or suspension.

By its terms, the 2003 Incentive Equity Plan will expire ten years after
the date it was originally adopted by the Board of Directors.

Federal Income Tax Consequences

The following is a summary of the Federal income tax consequences to the
participants in the 2003 Incentive Equity Plan and to the Company, based upon
current income tax laws, regulations and rulings. We do not intend the following
discussion to be a complete explanation of all of the Federal income tax
consequences of participating in the 2003 Incentive Equity Plan. Participants in
the 2003 Incentive Equity Plan should consult their own personal tax advisors to
determine the particular tax consequences of the 2003 Incentive Equity Plan to
them, including the application and effect of foreign, state and local taxes,
and any changes in the tax laws from the date of this proxy statement.

Incentive Stock Options

A participant does not realize income on the grant of an ISO. If a
participant exercises an ISO in accordance with the terms of the option and does
not dispose of the shares acquired within two years from the date of the grant
of the option or within one year from the date of exercise, the participant will
not realize any ordinary taxable income by reason of the exercise

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and neither the Company nor its subsidiaries will be allowed a deduction by
reason of the grant or exercise. The participant's basis in the shares acquired
upon exercise will be the amount paid upon exercise. (See the discussion below
for the tax consequences of the exercise of an option with shares already owned
by the participant and taxes imposed on tax preference items). Provided the
participant holds the shares as a capital asset at the time of sale or other
disposition of the shares, the gain or loss, if any, recognized on the sale or
other disposition will be capital gain or loss. The amount of gain or loss will
be the difference between the amount realized on the disposition of the shares
and the participant's basis in the shares. If a participant disposes of the
shares within two years from the date of grant of the option or within one year
from the date of exercise (an "Early Disposition"), the participant will realize
ordinary income at the time of disposition which will equal the excess, if any,
of the lesser of (a) the amount realized on the disposition, or (b) the fair
market value of the shares on the date of exercise, over the participant's basis
in the shares. Also in this case, the Company or its subsidiary will be entitled
to a deduction in an amount equal to such income.

If a participant disposes of such shares for less than his or her basis in
the shares, the difference between the amount realized and such basis will be a
long- or short-term capital loss, depending upon the holding period of the
shares, provided the participant holds the shares as a capital asset at the time
of disposition. The excess of the fair market value of the shares at the time
the ISO is exercised over the exercise price for the shares is treated as a tax
preference item (the "Incentive Stock Option Preference"), unless the
participant makes an Early Disposition of such shares. See "Taxation of
Preference Items" below.

Nonstatutory Stock Options

NSOs do not receive the special tax treatment accorded to ISOs under the
Code. Although a participant does not recognize income at the time of the grant
of the Option, he or she recognizes ordinary income upon the exercise of an NSO
in an amount equal to the difference between the fair market value of the shares
on the date of exercise of the Option and the amount paid for the shares.

The excess of the fair market value of the shares on the date of exercise
of an NSO over the exercise price is not treated as an item of "tax preference"
as such term is used in the Code.

Payment of Exercise Price of Shares

If the participant exercises an Option by surrendering shares owned by him
or her for at least six months ("Old Shares"), the following rules apply:

(1) To the extent the number of shares acquired ("New Shares") exceeds the
number of Old Shares exchanged, the participant will recognize ordinary income
on the receipt of such additional shares (provided the option is not an ISO) in
an amount equal to the fair market value of such additional shares less any
amount paid for them and the Company or a subsidiary will be entitled to a
deduction in an amount equal to such income. The basis of such additional shares

-49-

will be equal to the fair market value of such shares (or, in the case of an
ISO, the amount, if any, paid for additional shares) on the date of exercise,
and the holding period for such additional shares will commence on the date the
option is exercised.

(2) Except as provided below, to the extent the number of New Shares
acquired does not exceed the number of Old Shares exchanged, no gain or loss
will be recognized on such exchange, the basis of the New Shares received will
be equal to the basis of the Old Shares surrendered, and the holding period of
the New Shares received will include the holding period of the Old Shares
surrendered. However, if the participant exercises an ISO by surrendering Old
Shares which were acquired through the exercise of an ISO and if the surrender
occurs prior to the expiration of the holding period applicable to ISOs, the
surrender will be deemed to be an Early Disposition of the Old Shares. The
federal income tax consequences of an Early Disposition are discussed above.

(3) If the Old Shares surrendered were acquired by the participant by
exercise of an ISO, then the exchange will not constitute an Early Disposition
of the Old Shares unless the option being exercised is an ISO and the holding
period applicable to an ISO has not been met at the time of the surrender.

Restricted Share Awards

A participant who is granted a restricted share award will not be taxed
upon the acquisition of such shares so long as the interest in such shares is
subject to both a substantial risk of forfeiture and restrictions on
transferability. Upon lapse or release of the risk of forfeiture or restriction
on transferability, or upon a sale or disposition of the shares, the participant
will be taxed at ordinary income tax rates on an amount equal to either the
current fair market value of the shares (in the case of lapse or termination) or
the sale price (in the case of a sale), less any consideration paid for the
shares. The Company or a subsidiary will be entitled to a corresponding
deduction. The basis of the shares held after lapse or termination of
restrictions will be equal to their fair market value on the date of lapse or
termination of restrictions, and upon subsequent disposition, any further gain
or loss will be long-term or short-term capital gain or loss, depending upon the
length of time the shares are held.

A participant who is granted a restricted share award may elect to be
taxed at ordinary income tax rates on the full fair market value of the shares
at the time of issuance (less any consideration paid). The basis of the shares
so acquired will be equal to the fair market value at such time. If the election
is made, no tax will be payable upon the subsequent lapse or release of the
restrictions, and any gain or loss upon disposition will be a capital gain or
loss.

Stock Appreciation Rights

Although the recipient of an SAR does not recognize income at the time the
right is granted, the recipient will recognize income in the year the right is
exercised in an amount equal to the cash and the fair market value of the
property received. The Company or a subsidiary will

-50-

be entitled to deduct as compensation an amount equal to the income recognized
by the recipient, and such deduction shall be claimed in the taxable year in
which the Award becomes payable to the recipient.

The Company or a subsidiary will be entitled to deduct as compensation the
amount included in the recipient's gross income as a result of the payment of
the Award in stock only in the taxable year in which or with which ends the
taxable year of the recipient in which the recipient recognizes gross income. If
an SAR is paid in shares, the recipient's basis will be equal to the fair market
value of the shares when received, and the holding period will begin on that
date.

Performance Shares and Units

Performance shares and units will become fully taxable to the recipient
when the requirements on the shares or units are met, and such shares or units
become earned and non-forfeitable. The participant will be taxed on the amount
equal to the cash and/or fair market value received upon payment.

Taxation of Long-Term Capital Gains

For capital assets held for more than 12 months and sold after May 5,
2003, the maximum rate of tax on net capital gains is 15%. A 5% rate applies to
taxpayers in the 10% ordinary income tax bracket.

Taxation of Preference Items

Section 55 of the Code imposes an Alternative Minimum Tax equal to the
excess, if any, of (1) 26% of the optionee's "alternative minimum taxable
income" up to $175,000 ($87,500 in the case of married taxpayers filing
separately) and 28% of alternative minimum taxable income in excess of $175,000
($87,500 in the case of married taxpayers filing separately) over (2) his or her
"regular" federal income tax. These tax rates, however, are reduced to a maximum
of 15% on adjusted net capital gains. Alternative minimum taxable income is
determined by adding the optionee's Incentive Stock Option Preference and any
other items of tax preference to his or her adjusted gross income and then
subtracting certain allowable deductions and an exemption amount. The exemption
amount is $40,250 for single taxpayers, $58,000 for married taxpayers filing
jointly, and $29,000 for married taxpayers filing separately.

Other Matters

The 2003 Incentive Equity Plan is intended to comply with Section 162(m)
of the Code with respect to options, SARs, performance shares and performance
units granted thereunder. Section 162(m) of the Code prohibits a publicly held
corporation, such as the Company, from claiming a deduction on its federal
income tax return for compensation in excess of $1.0 million paid for a given
fiscal year to the chief executive officer (or person acting in that capacity)
at the

-51-

close of the corporation's fiscal year and the four most highly compensated
executive officers of the corporation, other than the chief executive officer,
at the end of the corporation's fiscal year (collectively, the "Section 162(m)
Officers"). The $1.0 million compensation deduction limitation does not apply to
"performance-based compensation." The final regulations issued by the Internal
Revenue Service under Section 162(m) in December 1995 (the "IRS Regulations")
set forth a number of provisions which compensatory plans must contain if the
compensation paid thereunder is to qualify as "performance-based" for purposes
of Section 162(m).

The 2003 Incentive Equity Plan is intended to satisfy the requirements of
the IRS Regulations with respect to Awards granted thereunder.

Recommendation and Vote

Approval of the Amended and Restated 2003 Stock Option and Incentive
Equity Plan will require the affirmative vote of the holders of a majority of
our common shares issued and outstanding as of the record date.

Our Board of Directors recommends that you vote FOR the approval of the
Amended and Restated 2003 Stock Option and Incentive Equity Plan.

PROPOSALS AND NOMINATIONS BY SHAREHOLDERS
FOR 2005 ANNUAL MEETING

In order to be eligible to submit a proposal to be included in next year's
proxy statement and acted upon at the annual meeting of the shareholders of the
Company to be held in 2005 (the "2005 Annual Meeting"), a shareholder must have
continuously held at least $2,000 in market value, or 1% of our issued and
outstanding common shares, for at least one year by the date on which the
proposal is submitted. In addition, the shareholder must continue to hold the
requisite number of our common shares through the date of the 2005 Annual
Meeting. Each proposal submitted should be accompanied by the name and address
of the shareholder submitting the proposal and a statement that the shareholder
intends to continue to hold the requisite number of our common shares through
the date of the 2005 Annual Meeting. If the proponent is not a shareholder of
record, proof of beneficial ownership of the requisite number of our common
shares also should be submitted. The proxy rules of the Securities and Exchange
Commission govern the content and form of shareholder proposals. All proposals
must be a proper subject for action at the 2005 Annual Meeting.

Any eligible shareholder who intends to submit a proposal for the 2005
Annual Meeting for inclusion in the proxy statement and form of proxy relating
to that meeting is advised that the proposal must be received by the Company at
its principal executive offices not later than December 11, 2004. The Company
will not be required to include in its proxy statement or form of proxy a
shareholder proposal which is received after that date or which otherwise fails
to meet the requirements for shareholder proposals established by the rules of
the Securities and Exchange Commission.

-52-

In addition, if a shareholder intends to submit a proposal at the 2005
Annual Meeting without the inclusion of that proposal in the Company's proxy
statement and form of proxy relating to that meeting and written notice of the
proposal is not received by the Company on or before February 24, 2005, proxies
solicited by the Board of Directors for the 2005 Annual Meeting will confer
discretionary authority to vote on such proposal at such meeting.

ADDITIONAL INFORMATION

Upon the written request of any person solicited, the Company will
provide, without charge, a copy of the Company's Annual Report on Form 10-K for
the year ended December 31, 2003, excluding exhibits, which was filed with the
Securities Exchange Commission on March 15, 2004. Such request should be
addressed to Dominion Homes, Inc., Attn: Terry E. George, 5000 Tuttle Crossing
Boulevard, Dublin, Ohio 43016-5555. The written request must include a statement
that, as of the close of business on March 17, 2004, the person was the
beneficial owner of our common shares.

OTHER MATTERS

As of the date of this proxy statement, our management knows of no other
business that will come before the annual meeting. Should any other matter
requiring a vote of the shareholders arise, the proxy in the enclosed form
confers upon the persons designated to vote the shares discretionary authority
to vote with respect to these matters in accordance with their best judgment.
Our 2003 Annual Report to Shareholders, including financial statements, was
furnished to our shareholders prior to or concurrently with the mailing of this
proxy material.

By Order of the Board of Directors,

Robert A. Meyer, Jr.
Secretary

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APPENDIX A

DOMINION HOMES, INC.

Amended and Restated Audit Committee Charter

Purpose

The primary purpose of the Audit Committee (the "Committee") is to assist the
Board of Directors (the "Board") of Dominion Homes, Inc. (the "Company") in
fulfilling its responsibility to oversee management's conduct of the Company's
financial reporting process, including by obtaining an overview of the financial
reports and other financial information provided by the Company to any
governmental or regulatory body, the public or other users thereof, the
Company's systems of internal accounting and financial controls, and the annual
independent audit of the Company's financial statements.

In discharging its duties, the Committee is empowered to investigate any matter
brought to its attention with full access to all books, records, facilities and
personnel of the Company and the power to retain and determine compensation for
outside counsel, auditors or other experts for this purpose. The Committee shall
also have the authority to appropriate funding in amounts determined by the
Committee to pay for ordinary administrative expenses necessary or appropriate
in carrying out the Committee's duties.

The Committee shall review and reassess the adequacy of this Charter
periodically, but not less than annually, as conditions dictate.

Membership

The Committee shall be comprised of not less than three members of the Board.
The Committee and its members shall satisfy the independence, experience and
financial expertise requirements of the NASDAQ Stock Market, Inc. ("NASDAQ") for
inclusions of an issuer's securities in NASDAQ and Section 10A of the Securities
and Exchange Act of 1934, as amended (the "Exchange Act"), as amended by the
Sarbanes-Oxley Act of 2002 (the "Act"), and the rules promulgated thereunder.
Appointment to the Committee, including the designation of the Chair of the
Committee and designation of a Committee member as an "audit committee financial
expert," shall be made on an annual basis by the full Board upon recommendation
of the Nominating and Corporate Governance Committee of the Board.

Key Responsibilities

The Committee recognizes that the Company's management is responsible for
preparing the Company's financial statements and that the public accountants are
responsible for auditing those financial statements. Additionally, the Committee
recognizes that financial management, including the internal audit staff as well
as the outside auditors, has more time, knowledge and more detailed information
on the Company than do Committee members. Consequently, in carrying out its
oversight responsibilities, the

Committee is not providing any expert or special assurance as to the Company's
financial statements or any professional certification as to financial
management's or the public accountants' work.

The Committee shall have the sole authority for the appointment, compensation,
retention and oversight of the work of the Company's public accountants,
including the authority to appropriate funding therefor. The public accounting
firm shall report directly to the Committee, and the Committee shall be
responsible for resolving disagreements between management and the public
accountants regarding financial reporting.

The following functions shall be the common recurring activities of the
Committee in carrying out its duties. These functions are set forth as a guide
with the understanding that the Committee may diverge from this guide as
appropriate given the circumstances.

Financial Reporting Process

The Committee shall:

o review with management and the public accountants the audited
financial statements to be included in the Company's Annual Report
on Form 10-K (or the Annual Report to Shareholders if distributed
prior to the filing of the Form 10-K) and review and consider with
the public accountants the matters required to be discussed by
Statement of Auditing Standards ("SAS") No. 61;

o review and discuss with management and the public accountants
significant financial reporting issues and judgments made in
connection with the preparation of the Company's financial
statements, including any significant changes in the Company's
selection or application of accounting principles;

o as a whole, or through the Committee's Chair, and upon the request
of the outside auditors, review with the public accountants the
Company's interim financial results to be included in the Company's
Quarterly Reports on Form 10-Q to be filed with Securities and
Exchange Commission and the matters required to be discussed by SAS
No. 61 prior to the Company's filing of the Form 10-Q;

o review or discuss, on a quarterly basis, reports from the public
accountants on (i) all critical accounting policies and practices to
be used; (ii) all alternative treatments of financial information
within GAAP that have been discussed with management, ramifications
of the use of such alternative disclosures and treatments, and the
treatment preferred by the independent auditor; and (iii) any other
material written communications between the independent auditor and
management, such as any management letter or schedule of unadjusted
differences; and

o discuss with management the Company's earnings press releases,
including the use of "proforma" or "adjusted" non-GAAP information,
as well as financial information and earnings guidance provided to
analysts and rating agencies.

A-2

Internal Controls and Oversight

The Committee shall:

o discuss with management and the public accountants the quality and
adequacy of the Company's internal controls and any special steps
adopted in light of material control deficiencies;

o discuss with management and the public accountants the risk of
material misstatement of the financial statements due to fraud and
obtain periodic briefings from management about any fraud, whether
or not material, that involves management or other employees who
have a significant role in internal control;

o request from the public accountants annually a formal written
statement delineating all relationships between the public
accountants and the Company consistent with Independence Standards
Board Standard Number 1;

o actively discuss with the public accountants any such disclosed
relationships and their impact on the public accountants'
objectivity and independence;

o take appropriate action to oversee the independence of the public
accountants;

o ensure that the lead audit partner of the public accountants and the
audit partner responsible for reviewing the audit are rotated at
least every five years as required by the Act, and further consider
rotation of the public accounting firm itself;

o recommend to the Board policies for the Company's hiring of
employees or former employees of the public accountants who were
engaged on the Company's account;

o establish policies and procedures for the review and pre-approval of
all audit and permissible non-audit engagements with the public
accountants (with exceptions provided for de minimus amounts under
certain circumstances as described by law); provided that the
Committee may form and delegate authority to subcommittees
consisting of one or more members (each of whom is an independent
director pursuant to the applicable provisions of the Exchange Act
and the rules promulgated thereunder) when appropriate, including
the authority to grant pre-approvals of audit and permitted
non-audit services, and decisions of such subcommittee to grant
pre-approvals shall be presented to the full Committee at its next
scheduled meeting;

o establish procedures for (a) the receipt, retention and treatment of
complaints received by the Company regarding accounting, internal
accounting controls or auditing matters and (b) the confidential,
anonymous submission by employees of the Company of concerns
regarding questionable accounting or auditing matters; and

A-3

o review disclosures made by the Company's principal executive officer
or officers and principal financial officer or officers regarding
compliance with their certification obligations as required under
the Act and the rules promulgated thereunder, including the
Company's disclosure controls and procedures and internal controls
for financial reporting and evaluations thereof.

Ethical and Legal Compliance

The Committee shall:

o review any reports of the registered public accountants mandated by
Section 10A of the Exchange Act and obtain from the registered public
accountants any information with respect to illegal acts in accordance
with Section 10A;

o have prior approval authority for and review on an ongoing basis all
related party transactions for potential conflicts of interest situations;
and

o review legal compliance matters with the Company's internal counsel,
including corporate securities trading policies and any other legal matter
which could have a significant impact on the Company's financial
statements.

A-4

APPENDIX B

DOMINION HOMES, INC.

2003 STOCK OPTION AND INCENTIVE EQUITY PLAN

1.00 PURPOSE

Effective March 11, 2003, the Company adopted the Dominion Homes, Inc. 2003
Stock Option and Incentive Equity Plan to foster and promote its long-term
financial success and to materially increase shareholder value [1] by providing
Employees and Eligible Directors an opportunity to acquire an ownership interest
in the Company and [2] by enabling the Company to attract and retain the
services of outstanding Employees and Eligible Directors upon whose judgment,
interest and special efforts the successful conduct of the Company's business is
largely dependent. To enhance these objectives, the Company amends and restates
the Plan as provided in this document.

2.00 DEFINITIONS

When used in this Plan, the following terms have the meanings given to them in
this section unless another meaning is expressly provided elsewhere in this
document or clearly required by the context. When applying these definitions,
the form of any term or word will include any of its other forms.

2.01 Act. The Securities Exchange Act of 1934, as amended.

2.02 Affiliated SAR. An SAR that is granted in conjunction with an Option and
which is always deemed to have been exercised at the same time that the related
Option is exercised. The deemed exercise of an Affiliated SAR will not reduce
the number of shares of Stock subject to the related Option, except to the
extent of the exercise of the related Option.

2.03 Annual Meeting. The annual meeting of the Company's shareholders.

2.04 Award. Any Incentive Stock Option, Nonstatutory Stock Option, Performance
Share, Performance Unit, Restricted Stock and Stock Appreciation Right issued
under the Plan. During any single Plan Year, no Participant may be granted SARs
affecting more than 50,000 shares of Stock allocated to the Plan (adjusted as
provided in Section 5.03) and Options affecting more than 50,000 shares of Stock
allocated to this Plan (adjusted as provided in Section 5.03), including Options
and SARs that are cancelled [or deemed to have been cancelled under Treas. Reg.
ss.1.162-27(e)(2)(vi)(B)] during the Plan Year issued.

2.05 Award Agreement. The written agreement described in Section 4.03.

2.06 Beneficiary. The person a Member designates to receive (or exercise) any
Plan benefits (or rights) that are unpaid (or unexercised) when he or she dies.
A Beneficiary may be designated only by following the procedures described in
Section 13.02; neither the Company nor the Committee is required to infer a
Beneficiary from any other source.

2.07 Board. The Company's Board of Directors.

2.08 Cause. Unless the Committee specifies otherwise in the Award Agreement,
with respect to any Member:

[1] Any unauthorized disclosure of the Company's or any Subsidiary's
business practices or accounts to a competitor that results in serious
damage to the Company;

[2] Willful and wrongful misappropriation of funds, property or rights of
the Company or any Subsidiary that results in serious damage to the
Company or any Subsidiary;

[3] Willful and wrongful destruction of business records or other property
that results in serious damage to the Company or any Subsidiary;

[4] Conviction of a felony involving moral turpitude;

[5] Conviction of a misdemeanor involving moral turpitude but only if the
conviction arose as part of a plea bargain and relates to acts that were
originally charged as felonies;

[6] Gross and willful misconduct that results in serious damage to the
Company or any Subsidiary;

[7] Material breach of, or inability to perform, regularly assigned
duties, other than by reason of disability (as defined in the Company's
short-term disability plan); or

[8] A Member's failure to return to active employment with the Company or
any Subsidiary within 30 days after the end of any disability (as defined
in the Company's short-term disability plan) but only if that period ends
before the Member's Retirement.

2.09 Change in Control. The occurrence of any of the following events:

[1] Douglas Borror and David Borror both cease to be members of the
Company's Board of Directors; or

[2] Any direct or indirect acquisition by a "person," including a "group"
[as such terms are used in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended ("Act")] after which the "person" or
"group" is the "beneficial owner" (as defined in Rule 13d-3 under the
Act), directly or indirectly, of securities of the Company representing
more than 40 percent of the combined voting power of the Company's then
outstanding securities; provided, however, that "person" or "group" will
not include [a] the Company, [b] any entity under common control with the
Company (within the meaning of Code ss.414), [c] BRC Properties Inc. or
any of its shareholders or members of the family (as defined in Code
ss.318) of Donald Borror or [d] any employee benefit plan of any entity
described in Section 2.09[2][a], [b] and/or [c] of this definition; or

[3] The adoption or authorization by the shareholders of the Company of a
definitive agreement or a series of related agreements [a] for the merger
or other business combination of the Company with or into another entity
in which the shareholders of the Company immediately before the effective
date of that merger or other business

B-2

combination own less than 50 percent of the voting power in the entity
immediately after the effective date of that merger or other business
combination or [b] for the sale or other disposition of all or
substantially all of the assets of the Company; or

[4] The adoption by the shareholders of the Company of a plan relating to
the liquidation or dissolution of the Company.

2.10 Change in Control Price. The highest price per share of Stock offered in
conjunction with any transaction resulting in a Change in Control (as determined
in good faith by the Committee if any part of the offered price is payable other
than in cash) or, in the case of a Change in Control occurring solely by reason
of events not related to a transfer of Stock, the highest Fair Market Value of a
share of Stock on any of the 30 consecutive trading days ending on the last
trading day before the Change in Control occurs.

2.11 Code. The Internal Revenue Code of 1986, as amended, and any regulations
issued under the Code and any applicable regulations or rulings issued under the
Code.

2.12 Committee.

[1] In the case of Awards to Eligible Directors, the Board; or

[2] In the case of all other Awards, the Board's Compensation Committee
which also constitutes a "compensation committee" within the meaning of
Treas. Reg. ss.1.162-27(c)(4). The Committee will be comprised of at least
three persons [a] each of whom is [i] an outside director, as defined in
Treas. Reg. ss.1.162-27(e)(3)(i), and [ii] a "non-employee" director
within the meaning of Rule 16b-3 under the Act and [b] none of whom may
receive remuneration from the Company or any Subsidiary in any capacity
other than as a director, except as permitted under Treas. Reg.
ss.1.162-27(e)(3)(ii).

2.13 Company. Dominion Homes, Inc., an Ohio corporation

2.14 Director Option. A Nonstatutory Stock Option granted to an Eligible
Director under Section 6.05.

2.15 Disability. Unless the Committee specifies otherwise in the Award
Agreement:

[1] With respect to any Award other than an Incentive Stock Option, a
Participant's inability due to illness, accident or otherwise to perform
his duties for the period of time during which benefits are payable to the
Participant under the Company's short-term disability plan, as determined
by an independent physician selected by the Committee and reasonably
acceptable to the Participant (or to his or her legal representative),
provided that the Participant does not return to work on a substantially
full-time basis within 30 days after the Company notifies the Participant
that his employment is being terminated because of his or her Disability;
or

[2] With respect to an Incentive Stock Option, as defined in Code
ss.22(e)(3).

B-3

2.16 Effective Date. With respect to the Plan, March 11, 2003 and with respect
to this amendment and restatement, the earlier of the date this amended and
restated document is adopted by the Board or the date it is approved by the
Company's shareholders.

2.17 Eligible Director. A person who, on an applicable Grant Date [1] is an
elected member of the Board (or has been appointed to the Board to fill an
unexpired term and will continue to serve at the expiration of that term only if
elected by shareholders) and [2] is not an Employee. For purposes of applying
this definition, an Eligible Director's status will be determined as of the
Grant Date applicable to each affected Award.

2.18 Employee. Any person who, on an applicable Grant Date, is a common law
employee of the Company or any Subsidiary and is performing services and to whom
the Committee has granted an Award. A worker who is classified as other than a
common law employee but who is subsequently reclassified as a common law
employee of the Company for any reason and on any basis will be treated as a
common law employee only from the date of that determination and will not
retroactively be reclassified as an Employee for any purpose of this Plan.

2.19 Exercise Price. The price at which a Member may exercise an Award.

2.20 Fair Market Value. The value of one share of Stock on any relevant date,
determined under the following rules:

[1] If the Stock is traded on the Nasdaq National Market or on an
exchange, the reported "closing price" on the last trading day before the
relevant date;

[2] If the Stock is traded over-the-counter with no reported closing
price, the mean between the lowest bid and the highest asked prices on
that quotation system on the last trading day before the relevant date; or

[3] If neither Section 2.20[1] nor Section 2.20[2] applies, the fair
market value as determined by the Committee in good faith.

2.21 Freestanding SAR. An SAR that is not associated with an Option and is
granted under Section 9.00.

2.22 Grant Date. The date an Award is granted to a Participant, whether or not
an Award Agreement is required.

2.23 Incentive Stock Option. Any Option granted under Section 6.00 that meets
the conditions imposed under Code ss.422(b).

2.24 Member. Each Participant and Terminated Participant to whom an Award has
been granted and which has not expired under the terms of the Award Agreement or
as provided in Section 10.00.

2.25 Nonstatutory Stock Option. Any Option granted under Section 6.00 that is
not an Incentive Stock Option.

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2.26 Option. The right granted under the Plan to purchase a share of Stock at a
stated price for a specified period of time. An Option may be either [1] an
Incentive Stock Option or [2] a Nonstatutory Stock Option.

2.27 Participant. Any Employee or Eligible Director who has not Terminated.

2.28 Performance Goal. The conditions that must be met before an Employee will
earn a Performance Share or Performance Unit.

2.29 Performance Period. The period over which the Committee will determine if
applicable Performance Goals have been met.

2.30 Performance Share. An Award granted under Section 8.00.

2.31 Performance Unit. An Award granted under Section 8.00.

2.32 Plan. The Dominion Homes, Inc. 2003 Stock Option and Incentive Equity Plan.

2.33 Plan Year. The Company's fiscal year.

2.34 Prior Plan. The Dominion Homes, Inc. Incentive Stock Plan.

2.35 Restricted Stock. An Award granted under Section 7.00.

2.36 Restriction Period. The period over which the Committee will determine if
an Employee has met conditions placed on Restricted Stock.

2.37 Retirement. Unless the Committee specifies otherwise in the Award
Agreement, the date an Employee Terminates on or after reaching age 55.

2.38 Stock. A common share, without par value, issued by the Company.

2.39 Stock Appreciation Right (or "SAR"). An Award granted under Section 9.00
that is a Tandem SAR, an Affiliated SAR or a Freestanding SAR.

2.40 Subsidiary. Any corporation, partnership or other form of unincorporated
entity of which the Company owns, directly or indirectly, 50 percent or more of
the total combined voting power of all classes of stock if the entity is a
corporation; or of the capital or profits interest, if the entity is a
partnership or another form of unincorporated entity.

2.41 Tandem SAR. An SAR that is associated with an Option and which expires when
that Option expires or is exercised, as described in Section 9.00.

2.42 Termination or Terminated. Unless the Committee specifies otherwise in the
Award Agreement, [1] cessation of the employee-employer relationship between an
Employee and the Company and all Subsidiaries for any reason or [2] cessation of
an Eligible Director's service on the Board for any reason. However, a Member
will not be treated as having Terminated if, without interruption, his or her
status changes from Employee to Eligible Director or, if the Company agrees,
from Employee or Eligible Director to consultant.

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3.00 PARTICIPATION

3.01 Employees.

[1] Consistent with the terms of the Plan and subject to Sections 3.02 and
3.03, the Committee will:

[a] Decide which Employees may become Participants;

[b] Decide which Employees will be granted Awards; and

[c] Specify the type of Award to be granted and the terms upon which
an Award will be granted.

[2] The Committee may establish different terms and conditions:

[a] For each type of Award;

[b] For each Employee receiving the same type of Award; and

[c] For the same Employees for each Award the Employee receives,
whether or not those Awards are granted at different times.

3.02 Eligible Directors. Each Eligible Director will [1] become a Participant on
the date he or she becomes an Eligible Director and [2] receive the Awards
described in Section 6.05 without any further action by the Committee. However,
as of the date an Award is made, the Committee may complete and deliver an Award
Agreement to each affected Eligible Director describing the terms of the Award.

3.03 Conditions of Participation. Each Participant receiving an Award agrees

[1] If required by the Committee, to sign an Award Agreement acknowledging
the terms of the Plan and of the Award;

[2] To be bound by the terms of the Award Agreement and the Plan; and

[3] To comply with other conditions imposed by the Committee.

4.00 ADMINISTRATION

4.01 Committee Duties. The Committee is responsible for administering the Plan
and has all powers appropriate and necessary to that purpose. Consistent with
the Plan's objectives, the Committee may adopt, amend and rescind rules and
regulations relating to the Plan, to the extent appropriate to protect the
Company's interests and has complete discretion to make all other decisions
(including whether a Participant has incurred a Disability) necessary or
advisable for the administration and interpretation of the Plan. Any action by
the Committee will be final, binding and conclusive for all purposes and upon
all persons.

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4.02 Delegation of Ministerial Duties. In its sole discretion and to the extent
allowed by law and consistent with Plan objectives, the Committee may delegate
any duties associated with the Plan to any person (including employees) that it
deems appropriate.

4.03 Award Agreement. At the time any Award is made, the Committee may prepare
and deliver an Award Agreement to each affected Participant. The Award
Agreement:

[1] Will describe:

[a] The type of Award and when and how it may be exercised;

[b] The effect of exercising the Award; and

[c] Any Exercise Price associated with the Award.

[2] To the extent different from the terms of the Plan, will describe:

[a] Any conditions that must be met before the Award may be
exercised;

[b] Any objective restrictions placed on Restricted Stock,
Performance Shares and Performance Units and any performance related
conditions and Performance Goals that must be met before those
restrictions will be released;

[c] When and how an Award may be exercised; and

[d] Any other applicable terms and conditions affecting the Award.

[3] Except as provided in Section 4.03[d], will not:

[a] Establish an Exercise Price that is less than Fair Market Value
on the Grant Date;

[b] Provide that the Restriction Period applying to any time-based
Restricted Stock will be shorter than 36 consecutive calendar months
beginning after the Grant Date; or

[c] Provide that the Restriction Period applying to any performance
based Restricted Stock or the Performance Period applying to any
Performance Stock will be shorter than 12 consecutive calendar
months beginning after the Grant Date; but

[d] The restrictions described in Section 4.03[3][a], [b] and [c]
will not apply to Awards affecting, in the aggregate, no more than
50,000 shares, adjusted as provided in Sections 5.02 and 5.03 or to
any grant of time-based Restricted Stock that vests in equal annual
increments of 33-1/3 percent.

4.04 Repricing/Settlement. With the approval of the Company's shareholders, the
Committee may "reprice" (as defined under rules issued by the Nasdaq National
Market or any national securities exchange or system on which shares of Stock
are then listed or traded) any

B-7

Award on any basis approved by the Company's shareholders. Also, in its sole
discretion, the Company may repurchase or settle any outstanding Award for cash
at any time and on any basis it believes is appropriate and consistent with the
Plan's purposes.

5.00 STOCK SUBJECT TO PLAN

5.01 Number of Shares of Stock. Subject to Sections 5.02 and 5.03, the number of
shares of Stock subject to Awards under the Plan may not be larger than 500,000.
The shares of Stock to be delivered under the Plan may consist, in whole or in
part, of treasury Stock or authorized but unissued Stock not reserved for any
other purpose.

5.02 Cancelled, Terminated or Forfeited Awards or Awards Settled for Cash. Any
Stock subject to an Award that, for any reason, is cancelled, terminated or
forfeited or otherwise settled without the issuance of the Stock may again be
granted under the Plan.

5.03 Adjustment in Capitalization. If, after the Effective Date, there is a
Stock dividend or Stock split, recapitalization (including payment of an
extraordinary dividend), merger, consolidation, combination, spin-off,
distribution of assets to shareholders, exchange of shares or other similar
corporate change affecting Stock, the Committee will adjust as it deems
appropriate [1] the number of Awards that may or will be issued to Participants
during a Plan Year, [2] the aggregate number of shares of Stock available for
Awards under Section 5.01 or subject to outstanding Awards (as well as any
share-based limits imposed under this Plan), [3] the respective Exercise Price,
number of shares and other limitations applicable to outstanding or subsequently
issued Awards and [4] any other factors, limits or terms affecting any
outstanding or subsequently issued Awards.

6.00 OPTIONS

6.01 Grant of Options. The Committee may grant Options to Employees and Eligible
Directors at any time during the term of this Plan. Options may be either [1]
Incentive Stock Options or [2] Nonstatutory Stock Options. However, Options
issued to Eligible Directors must always be Nonstatutory Stock Options.

6.02 Option Price. Subject to Section 40.03[3], each Option will bear the
Exercise Price the Committee specifies in the Award Agreement. However, in the
case of an Incentive Stock Option, the Exercise Price [1] will not be less than
the Fair Market Value of a share of Stock on the Grant Date and [2] will be at
least 110 percent of the Fair Market Value of a share of Stock on the Grant Date
with respect to any Incentive Stock Options issued to an Employee who, on the
Grant Date, owns [as defined in Code ss.424(d)] Stock possessing more than 10
percent of the total combined voting power of all classes of Stock.

6.03 Exercise of Options. Subject to the terms of the Plan, Options will be
exercisable under the conditions specified in the Award Agreement. However:

[1] Any Option to purchase a fraction of a share of Stock will be
liquidated as of the date it arises and the Participant will be given cash
equal to Fair Market Value multiplied by the fractional share.

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[2] Unless the Committee specifies otherwise in the Award Agreement, no
Employee may exercise Options for fewer than the smaller of:

[a] 100 shares of Stock; or

[b] The full number of shares of Stock for which Options are then
exercisable.

[3] No Option may be exercised more than ten years after it is granted
(five years in respect of an Incentive Stock Option, if the Employee owns
[as defined in Code ss.424(d)] Stock possessing more than 10 percent of
total combined voting power of all classes of Stock on the Grant Date).

6.04 Incentive Stock Options. Notwithstanding anything in the Plan to the
contrary:

[1] No provision of this Plan relating to Incentive Stock Options will be
interpreted, amended or altered; nor will any discretion or authority
granted under the Plan be exercised, in a manner that is inconsistent with
Code ss.422, or, without the consent of any affected Member, to cause any
Incentive Stock Option to fail to qualify for the federal income tax
treatment afforded under Code ss.421;

[2] The aggregate Fair Market Value of the Stock (determined as of the
Grant Date) with respect to which Incentive Stock Options are exercisable
for the first time by any Member during any calendar year (under all
option plans of the Company and all Subsidiaries of the Company) will not
exceed $100,000 [or other amount specified in Code ss.422(d)]; and

[3] No Incentive Stock Option will be granted to any person who is not an
Employee on the Grant Date.

6.05 Director Options.

[1] On the first business day after each Annual Meeting, each Eligible
Director will be issued Director Options to purchase 2,500 shares of
Stock. The Director Options issued under this section will be reduced (but
not below zero) by any options issued for the same purpose under the Prior
Plan.

[2] Subject to the terms of the Plan and the Award Agreement, each
Director Option may be exercised at any time during the ten years
beginning on the Grant Date.

[3] However:

[a] Any Director Option to purchase a fraction of a share of Stock
will be liquidated as of the date it arises and the Participant will
be given cash equal to Fair Market Value multiplied by the
fractional share;

B-9

[b] Unless the Committee specifies otherwise in the Award Agreement,
no Eligible Director may exercise Director Options for fewer than
the smaller of:

[i] 100 shares of Stock; or

[ii] The full number of shares of Stock for which Director
Options are then exercisable.

6.06 Payment for Options. Unless the Committee specifies otherwise in the Award
Agreement, the Exercise Price associated with each Option must be paid in cash.
However, the Committee may, at any time and in its discretion, develop, and
extend to some or all Members, procedures through which Members may pay an
Option's Exercise Price, including allowing a Member to tender Stock he or she
already has owned for at least six months before the exercise date, either by
actual delivery of the previously owned Stock or by attestation, valued at its
Fair Market Value on the exercise date, as partial or full payment of the
Exercise Price.

6.07 Transferability of Stock. Unless the Committee specifies otherwise in the
Award Agreement, Stock acquired through an Option will be transferable, subject
to applicable federal securities laws, the Company's stock trading policy, the
requirements of the Nasdaq National Market or any national securities exchange
or system on which shares of Stock are then listed or traded or any blue sky or
state securities laws.

7.00 RESTRICTED STOCK

7.01 Restricted Stock Grants. Subject to the terms of the Plan (including
Section 4.03[3]) and the Award Agreement, the Committee may grant Restricted
Stock to Employees at any time during the term of this Plan.

7.02 Transferability. Shares of Restricted Stock may not be sold, transferred,
pledged, assigned or otherwise alienated or hypothecated until the end of the
applicable Restriction Period. Restricted Stock normally will be held by the
Company as escrow agent during the Restriction Period and will be distributed as
described in Section 7.03. However, at any time during the Restriction Period,
the Committee may, in its sole discretion, issue the Restricted Stock to the
Employee in the form of certificates containing a legend describing restrictions
imposed on the Restricted Stock.

7.03 Removal of Restrictions. Shares of Restricted Stock will be:

[1] Forfeited, if all restrictions have not been met at the end of the
Restriction Period and again become available to be granted under the
Plan; or

[2] Released from escrow and distributed to the affected Employee (or any
restrictions imposed on the distributed certificate removed) as soon as
practicable after the last day of the Restriction Period if all
restrictions have then been met.

B-10

7.04 Rights Associated with Restricted Stock. During the Restriction Period:

[1] Employees may exercise full voting rights associated with their
Restricted Stock; and

[2] All dividends and other distributions paid with respect to any
Restricted Stock will be held by the Company as escrow agent during the
Restriction Period. At the end of the Restriction Period, these dividends
will be distributed to the Employee or forfeited as provided in Section
7.03. No interest or other accretion will be credited with respect to any
dividends held in this escrow account. If any dividends or other
distributions are paid in shares of Stock, those shares will be subject to
the same restrictions on transferability and forfeitability as the shares
of Restricted Stock with respect to which they were issued.

8.00 PERFORMANCE SHARES AND PERFORMANCE UNITS

8.01 Performance Shares and Performance Unit Grants. Subject to the terms of the
Plan (including Section 4.03[3]) and the Award Agreement, the Committee may
grant Performance Shares or Performance Units to Employees at any time during
the term of this Plan. However, Performance Shares and Performance Units will be
granted to Participants whose compensation is subject to Code ss.162(m) ["Code
ss.162(m) Participants"] solely under the terms of Section 8.02, while
Performance Shares and Performance Units will be granted to Participants who are
not Code ss.162(m) Participants solely under the terms of Section 8.03

8.02 Code ss.162(m) Participants.

[1] For each Performance Period, the Committee will establish the
Performance Goal that will be applied to determine the Performance Shares
or Performance Units that may be distributed at the end of the Performance
Period to any Code ss.162(m) Participant.

[2] In establishing each affected Code ss.162(m) Participant's Performance
Goal, the Committee will consider the relevance of his or her assigned
duties and responsibilities to factors that preserve and increase the
Company's value. These factors will include:

[a] Increasing sales;

[b] Developing new products and lines of revenue;

[c] Reducing operating expenses;

[d] Increasing customer satisfaction;

[e] Developing new markets and increasing the Company's share of
existing markets;

[f] Meeting completion schedules;

[g] Increasing standardized pricing;

B-11

[h] Developing and managing relationships with regulatory and other
governmental agencies;

[i] Managing cash;

[j] Managing claims against the Company, including litigation;

[k] Identifying and completing strategic acquisitions; and

[l] Increasing the Company's book value.

[3] The Committee will make adjustments that appropriately reflect:

[a] The effect on any Performance Goal of any Stock dividend or
Stock split, recapitalization (including, without limitation, the
payment of an extraordinary dividend), merger, consolidation,
combination, spin-off, distribution of assets to shareholders,
exchange of shares or similar corporate change. This adjustment to
the Performance Goal will be made [i] to the extent the Performance
Goal is based on Stock, [ii] as of the effective date of the event
and [iii] for the Performance Period in which the event occurs.
Also, the Committee will make a similar adjustment to any portion of
a Performance Goal that is not based on Stock but which is affected
by an event having an effect similar to those just described.

[b] A substantive change in a Code ss.162(m) Participant's job
description or assigned duties and responsibilities.

[4] Performance Goals will be established and communicated to each
affected Code ss.162(m) Participant in an Award Agreement no later than
the earlier of:

[a] 90 days after the beginning of the applicable Performance
Period; or

[b] The expiration of 25 percent of the applicable Performance
Period.

[5] As of the end of each Performance Period, the Committee will certify
to the Board the extent to which each Code ss.162(m) Participant has or
has not met the Performance Goals established under this section. These
Performance Shares or Performance Units will be:

[a] Forfeited, to the extent that Performance Goals have not been
met at the end of the Performance Period, and again become available
to be granted under the Plan; or

[b] Valued and distributed, in a single lump sum in the form of
cash, Stock or a combination of both (as determined by the
Committee) as soon as practicable after the last day of the
Performance Period, to the extent that related Performance Goals
have been met.

B-12

8.03 Non-Code ss.162(m) Participants. At its discretion, the Committee may issue
Performance Shares and Performance Units to Participants who are not
Code ss.162(m) Participants ("Non-Code ss.162(m) Participants") by applying the
procedures described in Section 8.02 or on any other basis it deems appropriate.
These Performance Shares or Performance Units will be;

[1] Forfeited, to the extent that any Performance Goals or other standards
(if any) have not been met, and again become available to be granted under
the Plan; or

[2] Valued and distributed, in a single lump sum in the form of cash,
Stock or a combination of both (as determined by the Committee) at a time
determined by the Committee, to the extent that related Performance Goals
(if any) have been met.

8.04 Rights Associated with Performance Shares and Performance Units. During the
Performance Period, and unless any Award Agreement provides otherwise:

[1] Employees may not exercise voting rights associated with their
Performance Shares or Performance Units; and

[2] No dividends or other distributions made or declared during the
Performance Period will be paid with respect to any Performance Shares or
Performance Units.

9.00 STOCK APPRECIATION RIGHTS

9.01 SAR Grants, Subject to the terms of the Plan and the Award Agreement, the
Committee may grant Affiliated SARs, Freestanding SARs and Tandem SARs (or a
combination of each) to Employees at any time during the term of this Plan.

9.02 Exercise Price. Unless the Committee specifies otherwise in the Award
Agreement, the Exercise Price specified in the Award Agreement will:

[1] In the case of an Affiliated SAR, not be less than 100 percent of the
Fair Market Value of a share of Stock on the Grant Date;

[2] In the case of a Freestanding SAR, not be less than 100 percent of the
Fair Market Value of a share of Stock on the Grant Date; and

[3] In the case of a Tandem SAR, not be less than the Exercise Price of
the related Option.

9.03 Exercise of Affiliated SARs. Affiliated SARs will be deemed to be exercised
on the date the related Option is exercised. However:

[1] An Affiliated SAR will expire no later than the date the related
Option expires;

[2] The value of the payout with respect to the Affiliated SAR will not be
more than the Exercise Price of the related Option; and

B-13

[3] An Affiliated SAR may be exercised only if the Fair Market Value of
the shares of Stock subject to the related Option is larger than the
Exercise Price of the related Option.

9.04 Exercise of Freestanding SARs. Freestanding SARs will be exercisable
subject to the terms specified in the Award Agreement.

9.05 Exercise of Tandem SARs. Tandem SARs may be exercised with respect to all
or part of the shares of Stock subject to the related Option by surrendering the
right to exercise the equivalent portion of the related Option. A Tandem SAR may
be exercised only with respect to the shares of Stock for which its related
Option is then exercisable. However:

[1] A Tandem SAR will expire no later than the date the related Option
expires;

[2] The value of the payout with respect to the Tandem SAR will not be
more than 100 percent of the difference between the Exercise Price of the
related Option and the Fair Market Value of a share of Stock subject to
the related Option at the time the Tandem SAR is exercised; and

[3] A Tandem SAR may be exercised only if the Fair Market Value of a share
of Stock subject to the Option is larger than the Exercise Price of the
related Option.

9.06 Settling SARs.

[1] A Member exercising a Tandem SAR or a Freestanding SAR will receive an
amount equal to:

[a] The difference between the Fair Market Value of a share of Stock
on the exercise date and the Exercise Price; multiplied by

[b] The number of shares of Stock with respect to which the Tandem
SAR or Freestanding SAR is exercised.

[2] A Member will not receive any cash or other amount when exercising an
Affiliated SAR. Instead, the value of the Affiliated SAR being exercised
will be applied to reduce (but not below zero) the Exercise Price of the
related Option.

At the discretion of the Committee, the value of any Tandem SAR or Freestanding
SAR being exercised will be settled in cash, shares of Stock or any combination
of both.

10.00 TERMINATION

10.01 Retirement. Unless otherwise specified in the Award Agreement, all Awards
that are outstanding (whether or not then exercisable) when a Participant
Retires may be exercised at any time before the earlier of [1] the expiration
date specified in the Award Agreement or [2] 12 months (three months in the case
of Incentive Stock Options) beginning on the Retirement date (or any shorter
period specified in the Award Agreement).

B-14

10.02 Death or Disability. Unless otherwise specified in the Award Agreement,
all Awards that are outstanding (whether or not then exercisable) when a
Participant Terminates because of death or Disability may be exercised by the
Participant or the Participant's Beneficiary at any time before the earlier of
[1] the expiration date specified in the Award Agreement or [2] 12 months
beginning on the date of death or Termination because of Disability (or any
shorter period specified in the Award Agreement).

10.03 Termination for Cause. Unless otherwise specified in the Award Agreement,
all Awards that are outstanding (whether or not then exercisable) if a
Participant Terminates for Cause will be forfeited.

10.04 Termination for any Other Reason. Unless otherwise specified in the Award
Agreement or subsequently, any Awards that are outstanding when a Participant
Terminates for any reason not described in Sections 10.01 through 10.03 and
which are then exercisable, or which the Committee has, in its sole discretion,
decided to make exercisable, may be exercised at any time before the earlier of
[1] the expiration date specified in the Award Agreement or [2] 90 days
beginning on the date the Participant Terminates.

10.05 Limits on Exercisability/Forfeiture of Exercised Awards. Regardless of any
other provision of this section or the Plan and unless the Committee specifies
otherwise in the Award Agreement or the Company subsequently consents in
writing, a Member who fails to comply with Section 10.05[3]will:

[1] Forfeit all outstanding Awards; and

[2] Forfeit all shares of Stock or cash (including dividends held in
escrow under Sections 7.04[2]) acquired or received by the exercise of any
Award, lapse of any restrictions or attainment of any Performance Goals on
the date of Termination or within 180 days before and 365 days after
Terminating, including any amounts received under a cash settlement
described in Section 4.04 but excluding amounts received as a consequence
of a Change in Control as described in Section 11.00.

[3] The forfeiture described in Sections 10.05[1] and [2] will apply if,
within the time period described in Section 10.05[2] the Member "competes"
with the Company or any Subsidiary. For purposes of this section,
"compete" means:

[a] Anywhere in the State of Ohio or in any other state in which the
Company or any Subsidiary is conducting business when benefits are
paid, the Member, without the written consent of the Company,
provides advice with respect to, engages in or directly or
indirectly supervises or assists the provision of any service or
sale of any product that competes with any service or product of the
Company or any Subsidiary; or

[b] Anywhere in any state, the Member accepts employment with, the
Member provides advice to, or engages in or directly or indirectly
supervises or assists the provision of any service or sale of any
product by any person, company, partnership, corporation or other
entity that builds homes, develops land or otherwise competes with
the Company or any Subsidiary in any market,

B-15

city or area in which the Company or any Subsidiary conducts
business when benefits are paid.

11.00 CHANGE IN CONTROL

11.01 Accelerated Vesting and Settlement. Subject to Section 11.02, on the date
of any Change in Control:

[1] [a] Each Option (other than Director Options) outstanding on the date
of a Change in Control (whether or not exercisable) will be cancelled in
exchange [i] for cash equal to the excess of the Change in Control Price
over the Exercise Price associated with the cancelled Option or, [ii] at
the Committee's discretion, for whole shares of Stock with a Fair Market
Value equal to the excess of the Change in Control Price over the Exercise
Price associated with the cancelled Option and the Fair Market Value of
any fractional share of Stock will be distributed in cash, and [b] all
related Affiliated and Tandem SARs will be cancelled. However, the
Committee, in its sole discretion, may offer the holders of the Options to
be cancelled a reasonable opportunity (not longer than 15 days beginning
on the date of the Change in Control) to exercise all their outstanding
Options (whether or not otherwise then exercisable) by following the
exercise procedures described in Section 6.00;

[2] All Performance Goals associated with Performance Shares or
Performance Units will be deemed to have been met on the date of the
Change in Control, all Performance Periods accelerated to the date of the
Change in Control and all outstanding Performance Shares and Performance
Units (including those subject to the acceleration described in this
subsection) will be distributed in a single lump sum cash payment;

[3] All Freestanding SARs will be deemed to be exercisable and will be
liquidated in a single lump sum cash payment; and

[4] All Restricted Stock will be released from escrow and distributed to
the affected Employee (or any restrictions imposed on the distributed
certificate removed).

11.02 Alternative Awards. Section 11.01 will not apply to the extent that the
Committee reasonably concludes in good faith before the Change in Control occurs
that Awards will be honored or assumed or new rights substituted for the Award
(collectively "Alternative Awards") by the Employee's employer (or the parent or
a subsidiary of that employer) immediately after the Change in Control, provided
that any Alternative Award must:

[1] Be based on stock that is (or, within 60 days of the Change in
Control, will be) traded on the Nasdaq National Market or a national
securities exchange or system;

[2] Provide the Employee (or each Employee in a class of Employees) rights
and entitlements substantially equivalent to the rights, terms and
conditions of each Award for which it is substituted, including an
identical or better exercise or vesting schedule and identical or better
timing and methods of payment, provided that such substitution of an Award
will not constitute a modification, extension or renewal of any Award;

B-16

[3] Have substantially equivalent economic value to the Award (determined
at the time of the Change in Control) for which it is substituted; and

[4] Provide that, if the Employee's employment is involuntarily Terminated
without Cause or constructively Terminated by the Employee, any conditions
on the Employee's rights under, or any restrictions on transfer or
exercisability applicable to, each Alternative Award will be waived or
lapse.

For purposes of this section, a constructive Termination means a Termination by
an Employee following a material reduction in the Employee's compensation or job
responsibilities (when compared to the Employee's compensation and job
responsibilities on the date of the Change in Control) or the relocation of the
Employee's principal place of employment to a location at least 50 miles from
his or her principal place of employment on the date of the Change in Control
(or other location to which the Employee has been reassigned with his or her
written consent), in each case without the Employee's written consent but only
if the material reduction or relocation occurs within 24 months after the Change
in Control.

11.03 Director Options. Upon a Change in Control, each outstanding Director
Options will be cancelled unless [1] the Stock continues to be traded on an
established securities market after the Change in Control or [2] the Eligible
Director continues to be a Board member after the Change in Control. In the
situations just described, the Director Option will be unaffected by a Change in
Control. Any Director Option to be cancelled under the next preceding sentence
will be exchanged [3] for cash equal to the excess of the Change in Control
Price over the Exercise Price associated with the cancelled Director Option or
[4] at the Committee's discretion, for whole shares of Stock with a Fair Market
Value equal to the excess of the Change in Control Price over the Exercise Price
associated with the cancelled Director Option and the Fair Market Value of any
fractional share of Stock will be distributed in cash. However, the Committee,
in its sole discretion, may offer the holders of the Director Options to be
cancelled a reasonable opportunity (not longer than 15 days beginning on the
date of the Change in Control) to exercise all their outstanding Director
Options (whether or not otherwise then exercisable) by following the exercise
procedures described in Section 6.00.

11.04 Coordination of Change In Control Benefits. If the sum of the benefits
received due to a Change in Control, as described in this section, and those
provided under all other plans, programs or agreements between the Participant
and the Company or any Subsidiary constitute "excess parachute payments" as
defined in Code ss.280G(b)(1), the Company and or Subsidiary will either:

[1] Reimburse the Participant for the amount of any excise tax due under
Code ss.4999 (but not for any income taxes or additional excise taxes
associated with this initial payment), if this procedure provides the
affected Participant with an after-tax amount that is larger than the
after-tax amount produced under Section 11.04[2]; or

[2] Reduce the amounts paid to the Participant under this Plan so that his
or her total "parachute payment" as defined in Code ss.280G(b)(2)(A) under
this and any all other plans, programs or agreements between the
Participant and the Company or Subsidiary will be $1.00 less than the
amount that would be an "excess parachute payment," if this

B-17

procedure provides the Participant with an after-tax amount that is larger
than the after-tax amount produced under Section 11.04[1].

12.00 AMENDMENT, MODIFICATION AND TERMINATION OF PLAN

The Board or the Committee may terminate, suspend or amend the Plan at any time
without shareholder approval except to the extent that shareholder approval is
required to satisfy applicable requirements imposed by [1] Rule 16b-3 under the
Act, or any successor rule or regulation, [2] applicable requirements of the
Code or [3] the Nasdaq National Market or any securities exchange, market or
other quotation system on or through which the Company's securities are listed
or traded. Also, no Plan amendment may [4] result in the loss of a Committee
member's status as a "non-employee director" as defined in Rule 16b-3 under the
Act, or any successor rule or regulation, with respect to any employee benefit
plan of the Company, [5] cause the Plan to fail to meet requirements imposed by
Rule 16b-3 or [6] without the consent of the affected Member, adversely affect
any Award issued before the amendment, modification or termination.

13.00 MISCELLANEOUS

13.01 Assignability. Except as described in this section, an Award may not be
transferred except by will or the laws of descent and distribution and, during
the Member's lifetime, may be exercised only by the Member, the Member's
guardian or legal representative. However, with the permission of the Committee,
a Member or a specified group of Members may transfer Awards (other than
Incentive Stock Options) to a revocable inter vivos trust, of which the Member
is the settlor, or may transfer Awards (other than an Incentive Stock Option) to
any member of the Member's immediate family, any trust, whether revocable or
irrevocable, established solely for the benefit of the Member's immediate
family, any partnership or limited liability company whose only partners or
members are members of the Member's immediate family or an organization
described in Code ss.501(c)(3) ("Permissible Transferees"). Any Award
transferred to a Permissible Transferee will continue to be subject to all of
the terms and conditions that applied to the Award before the transfer and to
any other rules prescribed by the Committee. A Permissible Transferee [other
than an organization described in Code ss.501(c)(3)] may not retransfer an Award
except by will or the laws of descent and distribution and then only to another
Permissible Transferee.

13.02 Beneficiary Designation. Each Member may name a Beneficiary or
Beneficiaries (who may be named contingently or successively) to receive or to
exercise any vested Award that is unpaid or unexercised at the Member's death.
Each designation made will revoke all prior designations made by the same
Member, must be made on a form prescribed by the Committee and will be effective
only when filed in writing with the Committee. If a Member has not made an
effective Beneficiary designation, the deceased Member's Beneficiary will be his
or her surviving spouse or, if none, the deceased Member's estate. The identity
of a Member's designated Beneficiary will be based only on the information
included in the latest beneficiary designation form completed by the Member and
will not be inferred from any other evidence.

B-18

13.03 No Guarantee of Employment or Participation. Nothing in the Plan may be
construed as:

[1] Interfering with or limiting the right of the Company or any
Subsidiary to Terminate any Employee's employment at any time;

[2] Conferring on any Participant any right to continue as an employee or
director of the Company or any Subsidiary;

[3] Guaranteeing that any common-law employee will be selected to be a
Participant; or

[4] Guaranteeing that any Member will receive any future Awards.

13.04 Tax Withholding.

[1] The Company will withhold from other amounts owed to the Member, or
require a Member to remit to the Company, an amount sufficient to satisfy
federal, state and local withholding tax requirements on any Award,
exercise or cancellation of an Award or purchase of Stock. If these
amounts are not to be withheld from other payments due to the Member (or
if there are no other payments due to the Member), the Company will defer
payment of cash or issuance of shares of Stock until the earlier of:

[a] Thirty days after the settlement date; or

[b] The date the Member remits the required amount.

If the Member has not remitted the required amount within 30 days after
the settlement date, the Company will permanently withhold from the value
of the Awards to be distributed the minimum amount required to be withheld
to comply with applicable federal, state and local income, wage and
employment taxes and distribute the balance to the Member.

[2] In its sole discretion, which may be withheld for any reason or for no
reason, the Committee may permit a Member to elect, subject to conditions
the Committee establishes, to reimburse the Company for this tax
withholding obligation through one or more of the following methods:

[a] By having shares of Stock otherwise issuable under the Award
withheld by the Company (but only to the extent of the minimum
amount that must be withheld to comply with applicable state,
federal and local income, employment and wage tax laws);

[b] By delivering to the Company previously acquired shares of Stock
that the Member has owned for at least six months;

[c] By remitting cash to the Company; or

B-19

[d] By remitting a personal check immediately payable to the
Company.

13.05 Indemnification. Each individual who is or was a member of the Committee
or of the Board will be indemnified and held harmless by the Company against and
from any loss, cost, liability or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit or proceeding to which he or she may be made a party or in which he or she
may be involved by reason of any action taken or failure to take action under
the Plan as a Committee member and against and from any and all amounts paid,
with the Company's approval, by him or her in settlement of any matter related
to or arising from the Plan as a Committee member or paid by him or her in
satisfaction of any judgment in any action, suit or proceeding relating to or
arising from the Plan against him or her as a Committee member, but only if he
or she gives the Company an opportunity, at its own expense, to handle and
defend the matter before he or she undertakes to handle and defend it in his or
her own behalf. The right of indemnification described in this section is not
exclusive and is independent of any other rights of indemnification to which the
individual may be entitled under the Company's organizational documents, by
contract, as a matter of law or otherwise.

13.06 No Limitation on Compensation. Nothing in the Plan is to be construed to
limit the right of the Company to establish other plans or to pay compensation
to its employees or directors, in cash or property, in a manner not expressly
authorized under the Plan.

13.07 Requirements of Law. The grant of Awards and the issuance of shares of
Stock will be subject to all applicable laws, rules and regulations and to all
required approvals of any governmental agencies or national securities exchange,
market or other quotation system. Also, no shares of Stock will be issued under
the Plan unless the Company is satisfied that the issuance of those shares of
Stock will comply with applicable federal and state securities laws.
Certificates for shares of Stock delivered under the Plan may be subject to any
stock transfer orders and other restrictions that the Committee believes to be
advisable under the rules, regulations and other requirements of the Securities
and Exchange Commission, the Nasdaq National Market or any stock exchange or
other recognized market or quotation system upon which the Stock is then listed
or traded, or any other applicable federal or state securities law. The
Committee may cause a legend or legends to be placed on any certificates issued
under the Plan to make appropriate reference to restrictions within the scope of
this section.

13.08 Term of Plan. The Plan will be effective upon its adoption by the Board
and approval by the affirmative vote of the holders of at least a majority of
the common shares issued and outstanding as of the record date for the first
Annual Meeting occurring after the Board approves the Plan. Subject to Section
12.00, the Plan will continue until the tenth anniversary of the Effective Date.

13.09 Governing Law. The Plan, and all agreements hereunder, will be construed
in accordance with and governed by the laws (other than laws governing conflicts
of laws) of the State of Ohio.

13.10 No Impact on Other Benefits. Plan Awards are incentives designed to
promote the objectives described in Section 1.00. Also, Awards are not
compensation for purposes of calculating a Member's rights under any other
employee benefit plan.

B-20

13.11 Effect on Prior Plan. Upon shareholder approval of the Plan, the Prior
Plan will terminate; however, all outstanding Awards at the time of termination
will continue to be governed by the rights and terms of the Prior Plan until
exercised or forfeited.

B-21

REVOCABLE PROXY
DOMINION HOMES, INC.

PLEASE MARK VOTES
AS IN THIS EXAMPLE

Proxy for the Annual Meeting of Shareholders
to be held on May 12, 2004
This Proxy is solicited on behalf of the Board of Directors

The undersigned holder(s) of common shares, no par value ("Common Shares"), of
Dominion Homes, Inc. (the "Company") hereby constitute(s) and appoint(s) Jon M.
Donnell and Terry E. George, or either of them, the Proxy or Proxies of the
undersigned, with full power of substitution, to attend the Annual Meeting of
Shareholders ("Annual Meeting") of the Company to be held at the Company's
corporate offices at 5000 Tuttle Crossing Boulevard, Dublin, Ohio, 43016, on May
12, 2004, at 9:00 a.m., local time, and any adjournment or adjournments thereof,
and to vote all of the Common Shares which the undersigned is entitled to vote
at such Annual Meeting or at any adjournments thereof:

With- For All
For hold Except
[_] [_] [_]

1. FOR election as Directors of all the nominees listed below (except as marked
to the contrary below).
Class I Directors
David Blom
Class II Directors
Donald A. Borror, R. Andrew Johnson, Gerald E. Mayo,
David S. Borror, Carl A. Nelson, Jr.

INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.

For Against Abstain
[_] [_] [_]

2. Approval of the Dominion Homes, Inc. Amended and Restated 2003 Stock Option
and Incentive Equity Plan. In their discretion, the Proxies are authorized to
vote upon such other business as may properly come before the Annual Meeting or
any postponements or adjournments thereof.

WHERE A CHOICE IS INDICATED, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED
AS SPECIFIED. WHERE NO CHOICE IS INDICATED, THE SHARES REPRESENTED BY THIS PROXY
WILL BE VOTED "FOR" THE ELECTION OF THE NOMINEES LISTED IN ITEM NO. 1 AS
DIRECTORS OF THE COMPANY, "FOR" THE APPROVAL OF THE DOMINION HOMES, INC.

AMENDED AND RESTATED 2003 STOCK OPTION AND INCENTIVE EQUITY PLAN, AND, IN THE
DISCRETION OF THE PROXY OR PROXIES, ON ANY OTHER BUSINESS PROPERLY BROUGHT
BEFORE THE MEETING OR ANY POSTPONEMENT(S) OR ADJOURNMENT(S) THEREOF.

Please be sure to sign and date this Proxy in the box below.

- ----------------------------------------
Date

- ----------------------------------------
Shareholder sign above

- ----------------------------------------
Co-holder (if any) sign above

- --------------------------------------------------------------------------------
Detach above card, sign, date and mail in the enclosed envelope.

DOMINION HOMES, INC.

All proxies previously given by the undersigned are hereby revoked. The
undersigned acknowledges receipt of the accompanying Notice of Annual Meeting of
Shareholders and Proxy Statement for the May 12, 2004, Annual Meeting. Please
sign exactly as your name appears hereon. Executors, administrators, trustees,
guardians, attorneys and agents should give their full titles. If shareholder is
a corporation, sign in full corporate name by authorized officer. If shares are
registered in two names, both shareholders should sign. Please note any change
of address on this proxy.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF DOMINION HOMES,
INC. PLEASE FILL IN, DATE, SIGN AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.

If your address has changed, please correct the address in the space provided
below and return this portion with the proxy in the envelope provided.