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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-11(c) or 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.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] 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:
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(2) Aggregate number of securities to which transaction applies:
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(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
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(5) Total fee paid:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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DOMINION HOMES, INC.
5501 Frantz Road
P. O. Box 7166
Dublin, Ohio 43017-0766
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD WEDNESDAY, MAY 2, 2001
Notice is hereby given that the 2001 Annual Meeting of Shareholders
("Annual Meeting") of Dominion Homes, Inc. (the "Company") will be held at the
Company's corporate offices, 5501 Frantz Road, Dublin, Ohio, on Wednesday, May
2, 2001, at 10:00 a.m. local time, for the following purposes:
1. The election as Directors of the nominees named on the
accompanying Proxy;
2. The ratification of the selection of PricewaterhouseCoopers
LLP as independent public accountants for the Company in 2001.
The Board of Directors has fixed the close of business on March 20,
2001, as the record date for the determination of the shareholders entitled to
notice of and to vote at the Annual Meeting and at any adjournments or
postponements thereof.
You are cordially invited to attend the Annual Meeting. 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 in 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 your shares are held of record by a broker, bank or other nominee
and you wish to attend the Annual Meeting, 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
Robert A. Meyer, Jr.
Secretary
Dublin, Ohio
March 30, 2001
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To Our Shareholders, Customers, Team Members and Friends:
As we begin a new century and complete our fifth decade in business, we are
pleased to report continued solid sales, deliveries and profits for Dominion
Homes, Inc. We have worked diligently to develop and lead the initiatives that
produced these results.
Here are a few of the highlights that contributed to the Company"s healthy
bottom line in 2000:
o We continued to control one-quarter of the Central Ohio marketshare by
selling and closing single-family homes in over 45 communities. Our
land position strengthens our future market position.
o Our Louisville Division, which opened late in 1998, achieved its
projections during 2000 and contributed to the Company"s profits. We
have seven communities underway in the Louisville market, and enjoy a
strong land position.
o Technology and E-commerce continued to be a major emphasis within the
organization. Today, all of our construction superintendents are
on-line which helps them keep the building process on schedule, and
makes attaining supply and timing information instantaneous. Our 2001
initiative for Information Systems centers on establishing superior
e-based communication with our customers and suppliers.
o In December, we launched the Independence Series -- single-family homes
in a condominium community. This series features five different
neo-traditional home designs each with a charming front porch and a two
car garage tucked behind the house, and starts under $100,000. These
are specially designed for people who are looking for their first home.
o We have a quality team of experienced professionals who are committed
to our two internal goals for the year 2001 from which all other goals
emerge: legendary customer satisfaction and optimal profitability.
We believe our continued emphasis on innovative products, state-of-the-art
web-technologies, excellent land position, and customer research, and our team
will continue to set us apart from our competition. These are the initiatives
that also will continue to bring you, our shareholders, enhanced shareholder
value.
I appreciate your lasting confidence in our Company and our people.
Douglas G. Borror
5
DOMINION HOMES, INC.
5501 FRANTZ ROAD
P. O. BOX 7166
DUBLIN, OHIO 43017-0766
(614) 761-6000
MARCH 30, 2001
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PROXY STATEMENT
---------------
GENERAL
This Proxy Statement and the accompanying Proxy and Notice of Annual
Meeting of Shareholders are furnished to holders of common shares, without par
value (the "Common Shares"), of Dominion Homes, Inc. (the "Company") in
connection with the solicitation by its Board of Directors (the "Board") of
proxies to be used at the 2001 Annual Meeting of Shareholders of the Company
(the "Annual Meeting") to be held on Wednesday, May 2, 2001, at 10:00 a.m.,
local time, and at any postponements or adjournments thereof. The Annual Meeting
will be held at the Company's corporate offices, 5501 Frantz Road, Dublin, Ohio.
Only those shareholders of the Company of record at the close of business on
March 20, 2001, will be entitled to receive notice of, and to vote at, the
Annual Meeting. Copies of this Proxy Statement and the accompanying Proxy and
Notice of Annual Meeting of Shareholders are first being mailed to shareholders
on or about March 30, 2001.
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" the election as Directors of the nominees named on the
accompanying Proxy; and
"FOR" the ratification of the selection of PricewaterhouseCoopers LLP
as independent public accountants for the Company in 2001.
Management knows of no other matters that may properly be brought, or
which are likely to be brought, before the Annual Meeting. However, if any other
matters are properly brought before the Annual Meeting, the persons named as
proxies in the accompanying Proxy or their substitutes will vote in accordance
with their best judgment on such matters.
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 giving notice to the Company in a writing or other verifiable communication
delivered to Robert A. Meyer, Jr., Secretary of the Company, at the Company's
corporate offices at 5501 Frantz Road, P. O. Box 7166, Dublin, Ohio 43017-0766,
by executing a subsequent Proxy, or by attending the Annual Meeting and
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giving notice of such revocation in person to the inspector of elections at the
Annual Meeting. Attendance at the Annual Meeting will not, in and of itself,
constitute revocation of a Proxy.
The presence, in person or by proxy, of the holders of a majority of
the Common Shares issued and outstanding on March 20, 2001, is necessary to
constitute a quorum at the Annual Meeting. As of March 20, 2001, the Company had
6,383,877 Common Shares issued and outstanding.
Under Ohio law and the Company's Amended and Restated Code of
Regulations (the "Regulations"), each shareholder is entitled to one vote for
each Common Share held. Common Shares represented by proxies that have been
signed or which constitute a verifiable communication and that are delivered to
the Company will be counted toward the quorum in all matters even though they
are marked as "Abstain," "Against" or "Withhold Authority" on one or more or all
matters or they are not marked at all. 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 and
the ratification of the selection of independent public accountants, but
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. Such
proxies also count toward the establishment of a quorum. The effect of an
abstention or broker non-vote on each of the matters to be voted upon at the
meeting is the same as a "no" vote.
All costs of solicitation of the Proxies will be borne by the Company.
Solicitation will be made by mail. Proxies may be further solicited at no
additional compensation by officers, directors, or employees of the Company by
telephone, written communication or in person. Upon request, the Company will
reimburse banks, brokerage firms, and other custodians, nominees, and
fiduciaries for 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.
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SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of March 20, 2001, certain
information with respect to persons known to the Company to be the beneficial
owners of more than five percent (5%) of the outstanding Common Shares.
NUMBER OF COMMON SHARES BENEFICIALLY OWNED
------------------------------------------
Name and Address of Sole Voting and Shared Voting and Shared Investment Percent
Beneficial Owner Investment Power Investment Power Power Only Total of Class(1)
- -------------------------------------------------------------------------------------------------------------
Donald A. Borror(2) 30,000 4,186,500(3) 43,830(4) 4,260,330 66.7%
Douglas G. Borror(2) 65,000 4,186,500(3) 46,633(4) 4,298,133 67.3%
David S. Borror(2) 19,640 4,186,500(3) 7,209(4) 4,213,349 66.0%
Terry E. George(2) 27,000(5) 4,186,500(3) -- 4,213,500 65.8%
BRC Properties Inc. 4,186,500(3) -- -- 4,186,500 65.6%
3970 Brelsford Lane
Dublin, OH 43017
BRC Properties Inc., -- 4,186,500(3)(6) -- 4,186,500 65.6%
Donald A. Borror,
Douglas G. Borror,
David S. Borror and
Terry E. George, as
a group
FMR Corp. 629,800(7) -- -- 629,800 9.9%
82 Devonshire Street
Boston, MA 02109
- -------------
(1) Percent of Class is based upon the sum of 6,383,877 Common Shares
outstanding as of March 20, 2001, and the number of Common Shares as to
which the person has the right to acquire beneficial ownership upon the
exercise of options exercisable within sixty (60) days of March 20,
2001.
(2) These individuals may be contacted at the address of the Company, 5501
Frantz Road, P. O. Box 7166, Dublin, Ohio 43017-0766.
[FOOTNOTES CONTINUED ON NEXT PAGE]
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[FOOTNOTES CONTINUED FROM PAGE 3]
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(3) Share total is based on information provided to the Company by BRC
Properties Inc. ("BRC"). By virtue of their ownership and control of
BRC, each of Donald A. Borror, Douglas G. Borror, David S. Borror and
Terry E. George may be deemed to beneficially own the Common Shares
owned by BRC, but each has disclaimed beneficial ownership of the
Common Shares owned by BRC. See "Certain Relationships and Certain
Transactions-Description and Ownership of BRC."
(4) Consists of Common Shares held by KeyTrust Company of Ohio, N.A., as
trustee of the Dominion Homes, Inc. Retirement Plan and Trust (the
"Retirement Plan and Trust"), which Common Shares are voted by the
trustee.
(5) Includes 20,000 Common Shares which can be acquired upon the exercise
of options which are exercisable within sixty (60) days of March 20,
2001.
(6) In computing the aggregate number of Common Shares held by the group,
the same Common Shares were not counted more than once.
(7) Information is based on an Amended Schedule 13G filed with the
Securities and Exchange Commission on February 13, 2001.
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MANAGEMENT
The following table sets forth, as of March 20, 2001, certain
information with respect to the number of Common Shares beneficially owned by
each director (including nominees) and executive officer of the Company and by
all directors (including nominees) and executive officers of the Company as a
group:
NUMBER OF COMMON SHARES BENEFICIALLY OWNED
------------------------------------------
Name and Address of Sole Voting and Shared Voting and Shared Investment Percent
Beneficial Owner Investment Power Investment Power Power Only Total of Class(1)
- ------------------------------------------------------------------------------------------------------------------------
Donald A. Borror(2) 30,000 4,186,500(3) 46,830(4) 4,260,330 66.7%
Douglas G. Borror(2) 40,000 4,186,500(3) 46,633(4) 4,298,133 67.3%
David S. Borror(2) 19,640 4,186,500(3) 7,209(4) 4,213,349 66.0%
Terry E. George(2) 27,000(5) 4,186,500(3) -- 4,213,500 65.8%
Pete A. Klisares 18,224(5) -- -- 18,224 *
1660 Northwest Professional Plaza
Suite C
Columbus, OH 43220
Gerald E. Mayo 22,000(5) -- -- 22,000 *
51 Brams Point Road
Hilton Head, SC 29926
C. Ronald Tilley 13,500(5) -- -- 13,500 *
900 Gatehouse Lane
Worthington, OH 43235
Jon M. Donnell(2) 175,536(5)(6) -- -- 175,536 2.7%
Robert A. Meyer, Jr.(2) 62,248(5) -- 4,907(4) 67,155 1.0%
Peter J. O'Hanlon(2) 4,303 -- -- 4,303 *
All directors and 412,451 4,186,500(3) 105,579(4) 4,704,530 71.7%
executive officers as
a group (10 persons)(7)
- ----------
* Represents less than 1% of class.
(1) Percent of class is based upon the sum of 6,383,877 Common Shares
outstanding as of March 20, 2001, and the number of Common Shares as to
which the person (or members of the group) has the right to acquire
beneficial ownership upon the exercise of options exercisable within
sixty (60) days of March 20, 2001.
(2) These individuals may be contacted at the address of the Company, 5501
Frantz Road, P. O. Box 7166, Dublin, Ohio 43017-0766.
(3) Share total is based on information provided to the Company by BRC. By
virtue of their ownership and control of BRC, each of Donald A. Borror,
Douglas G. Borror, David S. Borror and Terry E. George may be deemed to
beneficially own the Common Shares owned by BRC, but each has
disclaimed beneficial ownership of the Common Shares owned by BRC. See
"Certain Relationships and Certain Transactions-Description and
Ownership of BRC."
[FOOTNOTES CONTINUED ON NEXT PAGE]
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BOARD OF DIRECTORS AND MANAGEMENT
NUMBER AND TERM OF DIRECTORS
The Company's Regulations provide for seven (7) directors and divide
the Board into two classes, with regular two-year staggered terms. Class I
consists of three (3) directors with terms expiring at the Annual Meeting. Class
II consists of four (4) directors with terms expiring in 2002.
NOMINATION OF DIRECTORS
In accordance with Section 2.03 of the Company's Regulations, a
nominee for election as a director at an annual meeting 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 the Secretary of
the Company at its principal office and received by the Secretary of the Company
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 shareholders of the Company 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 Company has not received any proposals for director nominations
from any shareholder with respect to the Annual Meeting.
[FOOTNOTES CONTINUED FROM PAGE 5]
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(4) Consists of Common Shares held by KeyTrust Company of Ohio, N.A., as
trustee of the Retirement Plan and Trust, which Common Shares are voted
by the trustee.
(5) Includes, in the case of Messrs. Donnell, George, Klisares, Mayo,
Tilley and Meyer, 72,000, 20,000, 15,000, 15,000, 12,500 and 44,500
Common Shares, respectively, which can be acquired upon the exercise of
options which are exercisable within sixty (60) days of March 20, 2001.
(6) Includes 22,000 restricted Common Shares which are subject to
forfeiture if Mr. Donnell's employment with the Company is terminated
prior to August 1, 2002. The restrictions will lapse as to 11,000
Common Shares on August 1, 2001, and August 1, 2002, respectively.
(7) In computing the aggregate number of Common Shares held by the group,
the same Common Shares were not counted more than once.
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PROPOSAL TO ELECT CLASS I DIRECTORS
The Board proposes the election of the following persons as Class I
Directors to terms which will expire at the 2003 Annual Meeting of Shareholders:
Director
Name Age Since
----------------------------------------------------
Douglas G. Borror 45 1984
Jon M. Donnell 41 1997
C. Ronald Tilley 65 1996
All of the nominees are presently members of the Board. All of the
nominees have stated their willingness to serve and no reason is presently known
why any of the nominees would be unable to serve as a director. It is the
intention of the persons named as proxies in the accompanying Proxy to vote for
the election of the three (3) nominees named above unless the shareholders
otherwise direct on the Proxy. If any nominee is unable to stand for election,
each Proxy will be voted for such substitute as the Board recommends.
RECOMMENDATION AND VOTE
Class I Directors will be elected by a plurality of the votes entitled
to be cast and present at the Annual Meeting, in person or by properly executed
proxy. Shareholders do not have cumulative voting rights in the election of
directors. Proxies cannot be voted for more than three (3) directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
ELECTION OF ITS NOMINEES FOR CLASS I DIRECTORS.
CONTINUING CLASS II DIRECTORS
The following Class II Directors will continue after the Annual Meeting
to serve as directors for a term that will expire at the 2002 Annual Meeting of
Shareholders:
Director
Name Age Since
----------------------------------------------------
Donald A. Borror 71 1978
David S. Borror 43 1985
Pete A. Klisares 65 1994
Gerald E. Mayo 68 1994
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EXECUTIVE OFFICERS AND CERTAIN OTHER KEY EMPLOYEES
The Company's executive officers and certain other key employees of the
Company are listed below.
Name Age Position(s) Held
- -----------------------------------------------------------------------------------------------
EXECUTIVE OFFICERS
Donald A. Borror 71 Chairman Emeritus
Douglas G. Borror 45 Chairman of the Board and Chief Executive Officer
Jon M. Donnell 41 President and Chief Operating Officer
David S. Borror 43 Executive Vice President
Terry E. George 57 Senior Vice President and Treasurer
Robert A. Meyer, Jr. 47 Senior Vice President, General Counsel and Secretary
Peter J. O'Hanlon 42 Senior Vice President-Finance and Chief Financial
Officer
CERTAIN OTHER KEY EMPLOYEES
Karl E. Billisits 35 Executive Vice President-Construction Operations
Stephan M. George 44 Executive Vice President and President of the
Company's Louisville Subsidiary
Jack L. Mautino 37 Executive Vice President-Sales
Denis G. Connor 46 Senior Vice President-Administration
Lori M. Steiner 41 Senior Vice President-Strategy and Communications
Randolph B. Robert, Jr. 49 Vice President-Land Development
Kenneth C. Baker 53 Vice President-Information Systems
BACKGROUND AND EXPERIENCE OF DIRECTORS, OFFICERS AND CERTAIN KEY EMPLOYEES
The references to the Company in the following biographies for periods
of time prior to March 9, 1994, refer to the homebuilding divisions of BRC which
were transferred to the Company in connection with the Company's initial
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public offering of its Common Shares. See "Certain Relationships and Certain
Transactions--Description and Ownership of BRC."
DONALD A. BORROR has served on the Company's Board of Directors since
1978, and has served as Chairman Emeritus since July 1999. He served as the
Chairman of the Board of Directors from 1978 through July 1999, and as President
of the Company from 1977 to March 1987. Mr. Borror has been involved in the
homebuilding business since 1952 and founded the Company's homebuilding business
in 1976. He has a Bachelor of Arts degree from The Ohio State University and a
Juris Doctor degree from The Ohio State University College of Law.
DOUGLAS G. BORROR has served on the Company's Board of Directors since
January 1984, as Chairman of the Board of Directors since July 1999, and as its
Chief Executive Officer since September 1992. He also served as the Company's
President from March 1987 through July 1999, and as Chief Operating Officer of
the Company from September 1992 through September 1996. Since December 2000, Mr.
Borror had also served as Executive Vice President of BRC. Mr. Borror serves on
the Boards of Directors of Columbia Gas of Ohio, Inc. and The Huntington
National Bank. Mr. Borror has a Bachelor of Arts degree from The Ohio State
University.
JON M. DONNELL has served on the Company's Board of Directors since May
1997, as President of the Company since July 1999, and as Chief Operating
Officer of the Company since September 1996. Mr. Donnell served as Chief
Financial Officer of the Company from August 1995 through June 1998. Mr. Donnell
served as Treasurer of the Company from August 1995 through December 1995, and
as Executive Vice President from January 1996 through August 1996. From August
1995 through December 1996, he also served as Senior Vice President of the
Company. Prior to joining the Company, Mr. Donnell spent 11 years with the Del
Webb Corporation, a national real estate development and homebuilding company,
most recently as Vice President and Associate General Manager of Webb's Sun City
Hilton Head community. He is a Certified Public Accountant, and holds a Bachelor
of Science degree from the University of Arizona.
DAVID S. BORROR has served on the Company's Board of Directors since
1985 and as its Executive Vice President since January 1988. He served as Vice
President of the Company from July 1985 until January 1988, and as its General
Counsel from January 1988 to December 1993. Since December 2000, Mr. Borror had
also served as President of BRC. He has a Bachelor of Arts degree from The Ohio
State University and a Juris Doctor degree from The Ohio State University
College of Law.
PETE A. KLISARES has served on the Company's Board of Directors since
1994. He has served as Principal, MIGG Capital, an Ohio-based capital investment
company, since October 1999. From August 1997 through June 1999, he served as
President and Chief Operating Officer of Karrington Communities, Inc., a
Columbus, Ohio-based company which constructs and operates assisted living
facilities. From August 1993 through December 1997, he served as Executive Vice
President of Worthington Industries, Inc., a Columbus-based steel company. He is
a member of the Board of Directors of The Huntington National Bank, Sunrise
Assisted Living, and MPW Industrial Services. Mr. Klisares has a Bachelor of
Science degree in Economics and a Masters Degree in Labor and Management from
the University of Iowa.
GERALD E. MAYO has served on the Company's Board of Directors since
1994. Until his retirement in October 1997, he was a member of the Boards of
Directors and the Chairman of the Midland Life Insurance Company, a Columbus,
Ohio-based life insurance company, and Midland Financial Services, Inc.,
positions which he held for more
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than five years. He also serves on the Boards of Directors of McKesson/HBOC,
Columbia Gas Systems, Inc. and Columbia Gas of Ohio, Inc. Mr. Mayo has a
Bachelor of Arts degree from Boston University.
C. RONALD TILLEY has served on the Company's Board of Directors since
January 1996. In March 1996, he retired as Chief Executive Officer and Chairman
of the Board of Directors of Columbia Gas Distribution Companies, an Ohio-based
natural gas company, positions which he held for more than five years. Mr.
Tilley has a Bachelor of Science degree from Concord College.
TERRY E. GEORGE has served as Senior Vice President of the Company
since November 1993 and as Treasurer of the Company since January 1996. He
served on the Board of Directors of the Company from 1985 through May 1997, as
Controller of the Company from August 1995 to January 1996, and as Operations
Manager of the Company 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, Mr. George has additionally served as Secretary of BRC. Mr.
George also serves on the Board of Directors of First Community Bank. He has a
Bachelor of Science degree from The Ohio State University and is a Certified
Public Accountant in the State of Ohio.
ROBERT A. MEYER, JR. has served as Senior Vice President of the Company
since January 1996 and as General Counsel and Secretary of the Company since
December 1993. He served as Vice President of the Company from December 1993
through December 1995. Prior to joining the Company, Mr. Meyer was engaged in
the private practice of law in the Columbus, Ohio office of Porter, Wright,
Morris & Arthur from November 1978 to December 1993. He has a Bachelor of
Science degree from Indiana University and a Juris Doctor degree from The Ohio
State University College of Law.
PETER J. O'HANLON has served as Senior Vice President of Finance of the
Company since January 2000, and as the Company's Chief Financial Officer 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. He is a
Certified Public Accountant, and holds a Bachelor of Arts degree from Emory
University and a Masters degree in Business Administration from Northwestern
University.
STEPHAN M. GEORGE has served as the Company's Executive Vice President
and as President of the Company's Louisville subsidiary since December 2000. He
served as the Company's Executive Vice President of Operations from May 1999
through December 2000. Prior to joining the Company, 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. Mr. George has a Bachelor of Science
degree in Civil Engineering from Cornell University and a Masters degree in
Business Administration from Loyola University.
KARL E. BILLISITS has served as the Company's Executive Vice President
of Construction Operations since December 2000. He served as the Company's
Senior Vice President of Land Acquisition and Development from April 1999
through November 2000, as the Company's Vice President of Engineering and
Development from January 1999 through April 1999, as Vice President of
Engineering from May 1998 through January 1999, as Director of Engineering from
April 1997 through May 1998, and as Engineer from April 1994 through April 1997.
Prior to joining the Company
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in 1994, Mr. Billisits was employed as a consulting engineer with Bauer,
Davidson & Merchant, a Columbus-based consulting engineering firm. Mr. Billisits
holds a Bachelor of Science degree in Civil Engineering from The Ohio State
University, and is a Registered Professional Engineer in the States of Ohio,
Kentucky and Michigan.
DENIS G. CONNOR has served as Senior Vice President of Administration
since joining the Company in January 1998. Prior to joining the Company, Mr.
Connor managed Alliance Title Agency, Ltd., from its formation in April 1997, to
December 1997, and was employed by Chicago Title Agency of Central Ohio, Inc.,
from February 1989 to April 1997. He has a Bachelor of Arts degree from Miami
University.
JACK L. MAUTINO has served as the Company's Executive Vice President of
Sales since December 2000. He served as the Company's Senior Vice President and
General Manager of the Company's Louisville, Kentucky Operations from August
1998 through November 2000, as Senior Vice President of Sales of the Company
from May 1998 through August 1998, and as Vice President of Sales from October
1995 through August 1998. He served as Sales Manager for the Company's Dominion
Homes Division from January 1995 through December 1995, as Sales Manager of the
Company's Tradition Homes Division from December 1991 to December 1994, and as
Sales Representative for the Company from July 1990 to December 1991. Prior to
joining the Company, Mr. Mautino was employed by Ryland Homes. He holds a
Bachelor of Science degree from Duquesne University.
LORI M. STEINER has served as Senior Vice President of Strategy and
Communications since January 1999. She served as the Company's Senior Vice
President of Marketing from May 1998 through December 1998, and as the Company's
Vice President of Marketing from January 1995 through May 1998. She served as
the Company's Marketing Director from September 1990 through January 1995. Ms.
Steiner served as an account manager for Brooks Young Communications, a
Columbus-based regional advertising company, from March 1989 to September 1990.
She has a Bachelor of Arts degree from Wittenberg University.
KENNETH C. BAKER has served as the Company's Vice President of
Information Systems since May 1998. From April 1997, through May 1998, he served
as the Company's Director of Information Systems and, from October 1994 through
April 1997, as the Company's Manager of Information Systems. Prior to joining
the Company, Mr. Baker was employed as Manager of Information Systems with
Mid-Ohio Chemical Company from 1988 through 1994, and in the same position with
Colso Products, Inc. from 1978 through 1988. Mr. Baker holds an Associates
Degree in Information Systems from Automation Institute of Ohio.
RANDOLPH B. ROBERT, JR. has served as the Company's Vice President of
Land Development since November 1993 and as General Manager of Land Development
from January 1987 through November 1993. Mr. Robert has a Bachelor of Science
Degree from The University of Arizona.
FAMILY RELATIONSHIPS
Douglas G. Borror, a director and the Chairman of the Board and Chief
Executive Officer of the Company, and David S. Borror, a director and Executive
Vice President of the Company, are brothers. Donald A. Borror, a director and
Chairman Emeritus of the Company, is the father of Douglas G. Borror and David
S. Borror. There are no other family relationships among the executive officers
and/or directors of the Company.
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AGREEMENT WITH RESPECT TO THE ELECTION OF DIRECTORS
BRC, the holder of approximately 65.6% of the issued and 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 Certain Transactions--Description and Ownership of BRC."
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors meets immediately following the adjournment of
each annual meeting of shareholders at which directors are elected, and holds
such other meetings as may be called from time to time by the Chairman of the
Board, the President or any two directors. The Board of Directors of the Company
held four meetings during the year ended December 31, 2000. Each director
attended at least 75% of the aggregate of the number of Board of Directors
meetings and meetings of all committees on which he served during the year.
The Company has a Compensation Committee, an Executive Committee, an
Audit Committee and an Affiliated Transactions Review Committee. The members of
the Compensation Committee during 2000 were Pete A. Klisares, Gerald E. Mayo,
and C. Ronald Tilley. The Compensation Committee, which determines the
compensation of the Company's executive officers, held three meetings during
2000. The members of the Executive Committee during 2000 were Donald A. Borror,
Douglas G. Borror, David S. Borror, Jon M. Donnell, and Pete A. Klisares. The
Executive Committee, which is authorized to act for the Board between regularly
scheduled meetings of the Board, held four meetings during 2000. The members of
the Audit Committee during 2000 were Pete A. Klisares, Gerald E. Mayo, and C.
Ronald Tilley. The Audit Committee, which reviews accounting and auditing
matters, held four meetings during 2000. The members of the Affiliated
Transactions Review Committee during 2000 were Pete A. Klisares, Gerald E. Mayo,
and C. Ronald Tilley. The Affiliated Transactions Review Committee, which
reviews and authorizes material transactions between the Company and its
affiliates or related parties, did not meet during 2000. The Company does not
have a standing nominating committee or other committee performing a similar
function.
-12-
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COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
EXECUTIVE COMPENSATION
The following table sets forth, for the three years ended December 31,
2000, cash and non-cash compensation paid by the Company to the Chief Executive
Officer and to each of the other four most highly compensated executive officers
of the Company who served as such during 2000 (collectively, the "Named
Executive Officers") for services rendered to the Company in all capacities by
such persons:
Summary Compensation Table
---------------------------------------------------------------------------------------
Long-Term
Compensation
Annual Compensation -------------------------
---------------------------------------- Restricted Common Shares
Other Annual Stock Underlying All Other
Name and Salary(1) Bonus(1) Compensation(2) Awards Options/ Compensation(3)
Principal Position Year ($) ($) ($) ($) SARs (#) ($)
- ------------------------------------------------------------------------------------------------------------------------
Donald A. Borror 2000 $250,000 $260,000 -- $ 2,781
Chairman Emeritus 1999 250,000 260,000 -- 6,083
1998 250,000 260,000 -- 4,250
Douglas G. Borror 2000 $440,000 $700,000 $105,370(4) $153,160(5)
Chairman and CEO 1999 440,000 550,000 57,585(6) 72,438(7)
1998 400,000 550,000 -- 9,300
Jon M. Donnell 2000 $360,000 $500,000 -- -- -- $ 90,840(5)
President and COO 1999 360,000 400,000 65,119(8) -- -- 50,687(7)
1998 240,000 400,000 -- 143,688(9) 24,000 9,300
David S. Borror 2000 $225,000 $275,000 -- $ 39,690(5)
Exec. V.P. 1999 200,000 225,000 -- 23,541(7)
1998 192,385(10) 200,000 -- 9,300
Robert A. Meyer, Jr. 2000 $160,000 $150,000 -- $ 33,960(5)
Sr. V.P., General 1999 160,000 125,000 -- 23,591(7)
Counsel and Secretary 1998 155,000 125,000 -- 9,300
- ----------
(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) All Other Compensation includes for 1998, 1999 and 2000 amounts paid by
the Company for coverage under the Company's Group Life Insurance
Program for all employees, and amounts contributed by the Company to
the accounts of the Named Executive Officers in the Retirement Plan and
Trust and in the Executive Deferred Compensation Plan as matching
contributions under the provisions of those plans.
(4) Includes $47,002 attributable to personal use of Company property.
[FOOTNOTES CONTINUED ON NEXT PAGE]
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EMPLOYMENT AGREEMENTS
The Company has Amended Employment Agreements with Jon M. Donnell,
President and Chief Operating Officer and with Robert A. Meyer, Jr., Senior Vice
President, General Counsel and Secretary. The Amended Employment Agreements with
Messrs. Donnell and Meyer are each dated December 29, 2000, and effective as of
January 1, 2001. The Amended Employment Agreements supercede prior Employment
Agreements with Messrs. Donnell and Meyer, which had substantially similar
provisions. The Agreements are for terms of three years, and provide for renewal
annually for three-year terms unless the Company provides notice of its
intention not to renew the Agreement. No such notice by the Company has been
provided to Mr. Donnell or Mr. Meyer. Each Agreement provides for lump sum
payments if employment is terminated by the Company without cause or by Mr.
Donnell or Mr. Meyer with good reason, and includes non-competition covenants
effective for one year after termination. The Agreements also include provisions
that become effective upon a "change in control" of the Company. Under the
Agreements, a change in control is defined as an event which results in either
BRC failing to own at least 30% of the combined voting power of the outstanding
voting securities of the Company, or both Mr. Donald Borror and Mr. Douglas
Borror ceasing to be directors and officers of the Company. Upon a change in
control, all employee benefit rights, including stock options, vest. In
addition, if within two years of a change in control, the employment of Mr.
Donnell or Mr. Meyer is terminated without cause, or if Mr. Donnell or Mr. Meyer
terminates his employment with good reason, he would be entitled to certain
benefits, including a lump sum payment equivalent to two years' salary, the
payments he otherwise would have been entitled to receive had the Company
terminated his employment without cause and without a change in control, and
certain outplacement services.
[FOOTNOTES CONTINUED FROM PAGE 13]
- ----------
(5) Includes for 2000 the value of premiums paid for split-dollar life
insurance coverage under the Company's Collateral Assignment Split
Dollar Plan (the "Split Dollar Plan") (Mr. Douglas Borror, $143,500;
Mr. Donnell, $81,300; Mr. David Borror, $30,450; and Mr. Meyer,
$24,300). Compensation attributable to the Named Executive Officers'
participation in the Split Dollar Plan represents the premium
attributable to the death benefit provided under the policy on a term
insurance basis, together with the present value of the interest
projected to accrue on the remaining portion of the current year's
insurance premium paid by the Company. The Split Dollar Plan is
discussed in greater detail under "Report of Compensation Committee on
Executive Compensation-Long-Term Incentive Compensation-Split Dollar
Plan."
(6) Includes $23,760 attributable to personal use of Company property.
(7) Includes for 1999 the value of premiums paid for split-dollar life
insurance coverage under the Split Dollar Plan (Mr. Douglas Borror,
$62,488; Mr. Donnell, $40,737; Mr. David Borror, $13,591; and Mr.
Meyer, $13,646).
[FOOTNOTES CONTINUED ON PAGE 15]
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19
INCENTIVE STOCK PLAN
No stock options, SARs, or long-term incentive plan awards were granted
to any Named Executive Officer under the Incentive Stock Plan during 2000.
The following table sets forth information, as of December 31, 2000,
concerning the number of Common Shares underlying unexercised options and the
value of the unexercised options held by those Named Executive Officers who held
options on such date. No Named Executive Officer exercised any options during
2000.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
-----------------------------------------------------------------------------------------
Number of Common Shares Value of Unexercised
Underlying Unexercised In-The-Money
Options/SARs at Options/SARs at
Fiscal-Year-End (#) Fiscal-Year-End ($)(1)
------------------------------ ------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---------------------------------------------------------------------------------------------
Jon M. Donnell 72,000 8,000 $343,000 $29,500
Robert A. Meyer, Jr. 44,500 3,000 $205,344 $11,063
- ----------
(1) The Value of Unexercised In-The-Money Options equals the difference
between the aggregate fair market value at December 31, 2000, of the
Common Shares underlying the options and the aggregate exercise price
of the options.
DIRECTOR COMPENSATION
Directors who are not employees of the Company receive fees of $2,500
per quarter and $1,000 per Board meeting and $500 per committee meeting attended
($1,000 per committee meeting for committees of which the
[FOOTNOTES CONTINUED FROM PAGE 14]
- ----------
(8) Includes $40,320 attributable to personal use of Company property.
(9) At December 31, 2000, Mr. Donnell held 22,000 restricted Common Shares
with an aggregate value of $185,525. Of such restricted Common Shares,
11,000 will vest on each of August 1, 2001 and 2002. Prior to the
vesting of 11,000 restricted shares on August 1, 1999, Mr. Donnell
elected, pursuant to the terms of the Dominion Homes, Inc. Incentive
Stock Plan (the "Incentive Stock Plan"), not to receive 5,624 of the
restricted Common Shares in order to satisfy income tax obligations
related to such vesting. Prior to the vesting of 11,000 shares on
August 1, 2000, Mr. Donnell elected, pursuant to the terms of the
Incentive Stock Plan, not to receive 5,624 of the restricted Common
Shares in order to satisfy income tax obligations related to such
vesting. It is a prerequisite to the vesting of any restricted Common
Shares that Mr. Donnell be employed with the Company as of the vesting
date. The Company does not presently pay dividends. However, if
dividends are paid in the future, Mr. Donnell would be entitled to
receive dividends as to both his vested and unvested restricted Common
Shares.
(10) Mr. Borror was paid base salary at an annual rate of $175,000 from
January 1 through April 30, 1998. His base salary was increased to
$200,000 per year effective May 1, 1998. The reported base salary is
the amount actually paid to Mr. Borror in 1998.
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director serves as chairman). Directors may defer the receipt of those fees and
receive Company-matching contributions with respect to those deferred fees
through participation in the Executive Deferred Compensation Plan. Additionally,
under the Incentive Stock Plan, each director who is not, and has never been, an
employee of, or paid advisor or consultant to, the Company will receive, on the
first business day after each annual meeting of shareholders, provided that the
director continues to serve on the Board 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. The Company does not pay any separate
remuneration to employees of the Company who serve as directors. Messrs.
Klisares, Mayo and Tilley were the directors who were not employees of the
Company in 2000.
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 a matching contribution
by the Company for each participant equal to 25% of the amount deferred, but not
to exceed $2,500 in any year. The Company's matching contribution vests in 20%
increments over a five-year period. The contribution and match amounts are used
by the trustee of a rabbi trust to acquire Common Shares of the Company 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 executive officers and
corresponding aggregate Company-matching contributions through December 31,
2000, expressed as the number of Common Shares held by the trustee as of such
date, with respect to each director and executive officer participating in the
Executive Deferred Compensation Plan.
Deferral Vested Company- Unvested Company-
Contributions Matching Matching
Payable as Common Contributions Payable Contributions Payable
Shares as Common Shares as Common Shares Total
- -----------------------------------------------------------------------------------------------------
Douglas G. Borror 12,124 2,048 962 15,134
David S. Borror 8,926 1,402 865 11,193
Pete A. Klisares 19,195 1,549 971 21,715
C. Ronald Tilley 11,895 780 970 13,645
Terry E. George 6,936 779 962 8,677
Jon M. Donnell 6,936 779 962 8,677
Robert A. Meyer, Jr. 10,016 1,548 963 12,527
Peter J. O'Hanlon 3,673 175 750 4,598
-16-
21
REPORT OF COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION, REPORT OF AUDIT COMMITTEE
AND SHARE PRICE PERFORMANCE GRAPH
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate by reference
future filings, including this Proxy Statement, in whole or in part, the
following "Report of Compensation Committee on Executive Compensation," "Report
of Audit Committee" and the information under "Share Price Performance Graph"
shall not be incorporated by reference into any such filings.
REPORT OF COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Company has vested in the Compensation Committee (the "Committee")
of the Board of Directors the authority to determine and administer the
compensation program for the Company's executive officers and other key
employees. The Committee is composed of the Company's three outside, independent
directors: Pete A. Klisares, Gerald E. Mayo and C. Ronald Tilley. Mr. Klisares
chairs the Compensation Committee.
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.
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 Committee
expects, as in previous years, to continue to refine the Company's executive
compensation program during 2001.
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 stock, and other awards under the Incentive Stock 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 Split Dollar Plan which provides death benefit
protection and retirement benefits to participating executives if certain
vesting conditions are met and further if the participating executive does not
leave employment with the Company prior to age 55. See "Split Dollar Plan,"
below.
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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 Committee believes that, in order to achieve this objective,
the Company must be able to attract and retain exceptional executive talent.
Accordingly, the 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 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 Committee also considers the performance of the Company in relation
to other homebuilding companies based on several measures of economic
performance.
BASE SALARY. The 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
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 Committee
subjectively analyzes the executive's responsibilities, performance and value to
the Company, but gives no fixed weighting to any of such factors. The Committee
also considers market salary ranges for comparable positions. The Committee
reviews annually the base salary of each executive officer and makes adjustments
as it believes is warranted.
INCENTIVE BONUS. The 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 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.
The 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 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 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 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 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.
The 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.
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LONG-TERM INCENTIVE COMPENSATION
STOCK OPTIONS. No stock options were awarded to any Named Executive
Officer in 2000.
Although no grants were made in 2000, the Committee intends to make
grants on a periodic basis under the Incentive Stock Plan to the Company's
executive officers and other key employees. In making such grants, the Committee
will consider the subjective factors identified above, as well as the number of
options granted in prior years.
RESTRICTED STOCK GRANTS. No restricted stock grants were awarded to any
Named Executive Officer in 2000.
SPLIT DOLLAR PLAN. Effective January 1, 1999, the Company adopted the
Split Dollar Plan, in which certain key employees of the Company, including all
Named Executive Officers other than Donald A. Borror, are participants. The
purpose of the Split Dollar Plan is to provide additional incentive for
participating employees to remain with the Company and contribute to its
success. Under the Split Dollar Plan, participating employees are 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. "Change in control"
is defined as an event which results in either BRC failing to own at least 30%
of the combined voting power of the outstanding voting securities of the
Company, or both Donald Borror and Douglas Borror ceasing to be directors and
officers of the Company. "Adjusted shareholders' equity" is defined to exclude
the proceeds of any sale by the Company of equity securities and to include the
fair value of any dividends or distributions made by the Company after the
effective date of the Split Dollar Plan. Each participating employee has entered
into an agreement with the Company under which the employee's rights under each
split dollar policy are assigned to the Company. Each participating employee is
required to pay a portion of the policy premiums; the remainder of the premiums
are paid by the Company. In the event a participating employee terminates
employment prior to either completing ten years of service or the Company's
attaining adjusted shareholders' equity of $100 million dollars, the employee's
employment is terminated by the Company for "cause" at any time prior to payment
of the retirement benefit, or the employee violates the terms of the
noncompetition covenant, the then accumulated cash value in the policy will be
retained by the Company. In the event the employee dies prior to the vesting of
retirement benefits, all premiums paid by the Company will be repaid to the
Company prior to the payment of any death benefit to the employee's beneficiary
under the policy.
CHIEF EXECUTIVE OFFICER COMPENSATION
In accordance with the executive compensation philosophy and program
described above, and primarily in recognition of the Company's improved
financial performance during 2000, the Committee awarded Douglas G. Borror a
cash incentive bonus of $700,000 in 2000. Mr. Borror received an annual base
salary in 2000 of $440,000. Mr. Borror did not receive an award of stock options
or restricted stock in 2000.
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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 $1.0 million per year, subject to certain
exceptions. Generally, the Company's covered employees are those executive
officers listed under the Summary Compensation Table set forth above.
Compensation paid to Douglas Borror in 2000 exceeded the $1.0 million
deductibility limit of Section 162(m). This amount is not covered by any of the
exceptions to Section 162(m), and thus is not deductible by the Company. The
Company believes that in 2001 Mr. Borror's total compensation also may exceed
the $1.0 million deductibility limit of Section 162(m), but does not anticipate
that Section 162(m) will limit the deductibility of compensation paid to any
other executive officer. As indicated above, Section 162(m) provides exceptions
to the $1.0 million limitation on the deductibility of executive compensation.
The Committee has not attempted to revise the Company's executive compensation
program to satisfy the conditions to these exceptions but may in the future
consider doing so.
Members of the Compensation Committee
Pete A. Klisares Gerald E. Mayo
C. Ronald Tilley
REPORT OF AUDIT COMMITTEE
GENERAL
The Audit Committee is composed of three directors. The members of the
Audit Committee during 2000 were Pete A. Klisares, Gerald E. Mayo, and C. Ronald
Tilley. Mr. Mayo chairs the Audit Committee. The Audit Committee is governed by
a formal written charter that is reviewed and assessed annually and that was
adopted by the Board in 2000. A copy of the charter is attached as Appendix A to
this Proxy Statement. In accordance with the provisions of its written charter,
the Audit Committee assists the Board in fulfilling its responsibility for
oversight of the quality and integrity of the accounting, auditing and financial
reporting practices of the Company. Each member of the Audit Committee qualifies
as independent for purposes of Rule 4200(a)(15) of the National Association of
Securities Dealers' listing standards.
REVIEW AND DISCUSSION WITH INDEPENDENT ACCOUNTANTS AND AUDITORS
In discharging its oversight responsibility as to the audit process,
the Audit Committee 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, discussed with PricewaterhouseCoopers LLP any
relationships or services that may impact the objectivity and independence of
PricewaterhouseCoopers LLP and satisfied itself as to PricewaterhouseCoopers
LLP's independence. The Audit Committee also discussed with management, the
internal auditors and PricewaterhouseCoopers LLP the adequacy and effectiveness
of the Company's internal accounting and financial controls. The Audit Committee
met with the independent auditors each quarter to discuss the results of interim
reviews including when applicable, new or changed accounting principles, unusual
transactions, and estimates, judgments and uncertainties related to the
Company's
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quarterly financial reports. In each case, these meetings were conducted prior
to the filing of the Form 10-Q. The Audit Committee also received written
communication, and held discussions with, the independent auditor regarding the
annual audit plan including matters relating to accounting and financial
reporting, higher risk and judgmental areas of financial reporting and industry
and business issue 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 for the year ended December 31, 2000. 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.
REVIEW 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,
2000, 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.
AUDIT FEES
The aggregate fees billed for professional services rendered by
PricewaterhouseCoopers LLP for the audit of the Company's annual consolidated
financial statements for 2000, the reviews of the consolidated financial
statements included in the Company's Quarterly Reports on Form 10-Q for 2000 and
the audit of the Dominion Homes, Inc. Retirement Plan and Trust (collectively,
the "Audit Services") were $176,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
PricewaterhouseCoopers LLP did not render any of the professional
services described in Paragraph (c)(4)(ii) of Rule 2-01 of Regulation S-X (17
CAR 210.2.-01(c)(4)(ii)) (the "Financial Information Systems Design and
Implementation Services") during 2000 for the Company.
ALL OTHER FEES
The aggregate fees billed for services rendered by
PricewaterhouseCoopers LLP, other than Audit Services and Financial Information
Systems Design and Implementation Services, for 2000 (the "Other Services") were
$84,000.
CONCLUSION
Based on the reviews and discussions with management of and
PricewaterhouseCoopers LLP noted above, the Audit Committee recommended to the
Board (and the Board 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, 2000, to be filed with the Securities and Exchange
Commission. The Audit Committee also determined that the provision of the Other
Services was compatible with maintaining PricewaterhouseCoopers LLP's
independence.
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26
This Report of the Audit Committee was signed and adopted by each of
the members of the Audit Committee on March 13, 2001.
Members of the Audit Committee
Pete A. Klisares Gerald E. Mayo
C. Ronald Tilley
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SHARE PRICE PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on
the Common Shares from December 31, 1995, until December 31, 2000, with the
cumulative total return of (a) the NASDAQ-OTC Index Composite and (b) the
Standard and Poor's Homebuilding Index. The graph assumes the investment on
December 31, 1995, of $100 in the Common Shares, the NASDAQ-OTC Index Composite
and the Standard and Poor's Homebuilding Index.
[LINE GRAPH]
Nasdaq S&P Homebuilding DHOM
December 31, 1995 100 100 100
December 31, 1996 122.7 89.9 134.6
December 31, 1997 150.2 142.1 369.2
December 31, 1998 208.4 171.8 338.5
December 31, 1999 383.7 114.7 192.3
December 31, 2000 234.8 178.3 259.6
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CERTAIN RELATIONSHIPS AND CERTAIN TRANSACTIONS
DESCRIPTION AND OWNERSHIP OF BRC
BRC, which owns approximately 65.6% of the Company's outstanding Common
Shares, is in the business of owning and managing multifamily housing and
commercial real estate. Donald A. Borror, Douglas G. Borror, and David S.
Borror, who are directors and executive officers of the Company, and Terry E.
George, who is an executive officer of the Company, also are directors of BRC.
David S. Borror, Douglas G. Borror and Mr. George also serve as President,
Executive Vice President and Vice President, respectively, of BRC. Mr. George
additionally serves as Secretary and Treasurer of BRC.
BRC has issued and outstanding 94,860 voting common shares and 273,195
non-voting common shares, all of which are beneficially owned by members of the
Borror family, or trusts for their benefit, and by Terry George. BRC holds
42,000 non-voting shares of BRC as treasury shares. Through their ownership and
control of BRC, such persons are in a position to control the Company. See
"Security Ownership of Certain Beneficial Owners and Management."
On June 19, 2000, BRC redeemed 10,205 voting shares of BRC held by the
Amended and Restated Borror Corporation Stock Trust, a revocable trust
established by Donald Borror pursuant to a trust agreement dated January 4, 1994
(the "Stock Trust"). Effective November 9, 2000, the Stock Trust sold 5,824
voting shares of BRC to Douglas Borror, 3,718 voting shares of BRC to David
Borror, 2,639 voting shares of BRC to the 1987 Irrevocable Subchapter S Trust,
an irrevocable trust established by Donald Borror pursuant to a trust agreement
dated June 26, 1987 (the "Irrevocable Trust"), and 819 voting shares of BRC to
Terry George. The purchase price for the shares was determined by a valuation of
BRC prepared by PricewaterhouseCoopers LLP in February 2000. The redemption and
sale were effected as part of Donald Borror's estate planning and to help ensure
an orderly succession of ownership of BRC at the time of Donald Borror's death.
The Stock Trust owns 19,975 voting common shares of BRC, representing
21.06% of the issued and outstanding voting common shares of BRC, and does not
own any of the non-voting common shares of BRC. The Stock Trust will expire upon
the ten year anniversary of Donald Borror's death or upon the death of Joanne
Borror (Donald Borror's wife), whichever is later. Joanne Borror is the
beneficiary of the Stock Trust until her death (unless she predeceases Donald
Borror) and each of Donald and Joanne Borror's children (Douglas and David
Borror and Donna Myers) are one-third remainder beneficiaries of the Stock
Trust. Donald Borror and Douglas Borror are the joint trustees of the Stock
Trust until the death or incapacity of either of them, whereupon the other of
them will become sole trustee.
Douglas Borror owns 43,099 voting common shares of BRC, representing
45.43% of the issued and outstanding voting common shares of BRC, and 112,875
non-voting common shares of BRC, representing 41.32% of the issued and
outstanding non-voting common shares of BRC.
David Borror owns 23,328 voting common shares of BRC, representing
24.59% of the issued and outstanding voting common shares of BRC, and 76,180
non-voting common shares of BRC, representing 27.88% of the issued and
outstanding non-voting common shares of BRC.
The Irrevocable Trust owns 2,639 voting common shares of BRC,
representing 2.78% of the issued and outstanding voting common shares of BRC,
and 68,080 non-voting common shares of BRC, representing 24.92% of the issued
and outstanding non-voting common shares of BRC. David Borror is the trustee of
the Irrevocable Trust and
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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.
Terry George owns 5,819 voting common shares of BRC, representing 6.13%
of the issued and outstanding voting common shares of BRC, and 16,060 non-voting
common shares of BRC, representing 5.88% of the issued and outstanding
non-voting common shares of BRC.
BRC and the shareholders of BRC are parties to a Close Corporation
Agreement dated January 4, 1994 ("BRC Agreement"). The BRC Agreement contains
certain provisions related to BRC's status as an S Corporation (including
mandatory distributions to BRC shareholders equal to the product of the maximum
marginal individual income tax rate and the shareholder's pro rata share of the
taxable income attributable to BRC). The BRC Agreement provides that all of 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 Borror and Douglas Borror jointly
until the death or incapacity of either of them and, thereafter, by the other of
them solely. Under the provisions of the BRC Agreement, David Borror is required
to be elected as a director of BRC as long as he continues to hold at least 10%
of the shares of BRC, absent his removal for "cause" (as defined therein). In
such circumstances 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 Borror as a director of the Company. The BRC Agreement generally restricts
the transfer of shares of BRC to persons other than members of the Borror family
unless certain procedures are followed. BRC is required to repurchase all of
Terry George's shares in the event of his death or incapacity and has the right
to purchase Terry George's shares at any time. BRC also is required to purchase
a certain number of shares from the estates of Borror family members. Subject to
certain conditions, Borror family members have the right to require BRC to
repurchase shares from them. In certain instances, the obligation of BRC to
repurchase shares may be assumed by Borror family shareholders.
TRANSACTIONS WITH BRC
The Board of Directors of the Company has established the Affiliated
Transactions Review Committee for the purpose of reviewing any material
transactions with affiliates or related parties of the Company, including BRC,
for consistency with the Company's policies concerning affiliated transactions.
The Affiliated Transactions Review Committee is comprised of the Company's three
outside, independent directors: Pete A. Klisares, Gerald E. Mayo and C. Ronald
Tilley, and is chaired by Mr. Klisares.
The Company leases its corporate headquarters from BRC. The primary
lease continues until December 31, 2009, at a rental rate of $12.00 per square
foot on a total net basis with two options to renew for periods of five years
each at then-current market rates. The rental rate was established by an MAI
appraisal commissioned by the Affiliated Transactions Review Committee, and
confirmed in a review for the Affiliated Transactions Review Committee by a
second MAI appraiser. The Company paid to BRC $451,000 under this lease during
2000.
The Company leases its 4,200 square foot decorating center from BRC.
The lease continues until December 31, 2003, and the rental rate was $10.50 per
square foot in 2000, and is $11.00 per square foot in each of the last three
years of the lease's term. The rental rates were confirmed by an MAI appraisal
commissioned by the Affiliated Transactions Review Committee to be consistent
with comparable rental rates in the area and, in the first two years, slightly
below market rates.
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The Company also leases two separate adjacent spaces, one 1,200 square
feet and one 2,700 square feet. The agreement for the 1,200 square foot space is
an assignment agreement under which the Company assumed obligations in 1999
under an existing lease with a former tenant. The remaining term under the lease
is two years and six months, and the lease rates are $11.50 per square foot for
the remainder of the first year, $12.00 and $12.50 per square foot during the
second and third remaining full years. The agreement for the 2,700 square foot
space is also an assignment executed in 1999, of an existing lease with a former
tenant that had been renewed for a five-year term. The agreement provides for
lease rates that begin at $11.00 per square foot for the first three years and
increase to $11.50 per square foot in the final two years of the lease term. The
lease rates were confirmed to be reflective of current market conditions by a
report prepared for the Affiliated Transactions Review Committee by an MAI
appraiser, and the leases were approved by the Affiliated Transactions Review
Committee.
The Company also leases from BRC an additional 1,350 square feet in the
shopping center in which the Company's decorating center is located. The Company
has established a preconstruction conference center in the space in which all
preconstruction conferences with its customers are conducted. The lease
agreement , entered into in 1999, provides for a term of five years and lease
rates of $10.50 per square foot the first year, $11.00 per square foot the
second, third and fourth years, and $11.50 per square foot the fifth year. The
lease rates were confirmed in a report by an MAI appraiser to be consistent with
fair market rates for comparable space, and the lease was approved by the
Affiliated Transactions Review Committee.
In a unanimous written action taken as of February 15, 2000, without a
meeting, the Affiliated Transactions Review Committee approved the lease by the
Company from BRC of an additional 1,768 square feet in the shopping center in
which the decorating center is located. The Company has established its new
mortgage finance operation in the space. The lease agreement provides for a term
of three years commencing March 1, 2000, and provides for lease rates of $10.50
per square foot in the first year and $11.00 per square foot in each of the
final two years of the lease term. The base rates were confirmed by a report
prepared by an MAI appraiser to be consistent with market rates.
The Company paid to BRC an aggregate of $156,000 under leases for space
in the shopping center during 2000. The Company believes that the terms of these
leases were no less favorable to the Company than those reasonably available
from unrelated third parties for comparable space.
Occasionally, employees of the Company provide limited administrative
services to BRC, for which the Company receives fees. The Company received
aggregate fees of $25,000 from BRC for such administrative services in 2000.
The Company and BRC are parties to a Shareholder Agreement (the
"Shareholder Agreement"), dated January 20, 1994, pursuant to which BRC has the
right, from time to time, to demand that the Company register for sale Common
Shares owned by BRC. Each request by BRC for a demand registration must cover at
least 10% of the Common Shares owned by BRC and at least 5% of the Company's
then outstanding Common Shares. Without the Company's consent (exercised by a
majority of its independent directors), the Company is not obligated to cause a
demand registration to be effected within 18 months after the consummation of a
prior demand registration. BRC and the Company will each pay one-half of the
expenses of each demand registration. BRC also will have incidental, or
piggy-back, registration rights if the Company proposes to register any of its
equity securities (other than registrations involving employee benefit plans)
for its own account or for the account of any other shareholder. BRC will pay
all of its own legal expenses and the first $25,000 of the other expenses of a
piggy-back registration and the Company will pay the remaining expenses
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of a piggy-back registration. Both the demand and piggy-back registration rights
will be subject to customary underwriting and holdback provisions and will
expire on March 9, 2004.
TRANSACTIONS WITH PRINTING PLUS, INC.
Donald A. Borror, Chairman Emeritus of the Company, together with
Richard Myers, own Printing Plus, Inc., a printing company which has provided
printing services to the Company. Mr. Myers, who also operates Printing Plus,
Inc., is the husband of Donna Borror Myers, who is Donald A. Borror's daughter
and Douglas G. and David S. Borror's sister. In 2000, the Company paid $98,496
to Printing Plus, Inc. for printing services, which amount represented
approximately 27.6% of the total amount paid by the Company for printing
services in 2000. All of the printing services provided to the Company by
Printing Plus, Inc. in 2000 were pursuant to contracts that had been
competitively bid. The transactions between the Company and Printing Plus, Inc.
were not reviewed or approved by the Affiliated Transactions Review Committee or
the Audit Committee of the Board of Directors.
SELECTION OF AUDITORS
The Board of Directors of the Company has selected
PricewaterhouseCoopers LLP, certified public accountants, as independent
auditors for the Company for the year ending December 31, 2001.
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.
RECOMMENDATION AND VOTE
Ratification of the selection of PricewaterhouseCoopers LLP as the
Company's independent auditors for 2000 will require the affirmative vote of a
majority of the Common Shares issued and outstanding as of the record date.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR 2001.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the federal securities laws, the Company is required to report in
this Proxy Statement any known failures during the 2000 year by executive
officers, directors or 10% shareholders to file on a timely basis a Form 3, 4 or
5, relating to the beneficial ownership of the Common Shares. To the best of the
Company's knowledge after a review of such filings, all such required forms were
filed on a timely basis, with the exception of a purchase by BRC of 10,000
Common Shares on May 23, 2000, which was inadvertently omitted from the Forms 4
filed by or on behalf of BRC and Donald, Douglas and David Borror on June 5,
2000. The transaction subsequently was reported.
PROPOSALS BY SHAREHOLDERS FOR 2002 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 2002 (the "2002 Annual Meeting"), a shareholder
must have continuously held at least $2,000 in market value, or 1% of the 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
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number of Common Shares through the date of the 2002 Annual Meeting. Any such
proposal must be received by the Company prior to the close of business on
November 30, 2001. 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 Common Shares
through the date of the 2002 Annual Meeting. If the proponent is not a
shareholder of record, proof of beneficial ownership of the requisite number of
Common Shares also should be submitted. The proponent should also state his or
her intention to appear in person or by a qualified representative at the 2002
Annual Meeting to present the proposal. 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 2002 Annual Meeting.
The Company will not be required to include in its Proxy Statement for
the 2002 Annual Meeting any proposal submitted outside of the procedures set
forth in the immediately preceding paragraph. The Company also may confer on the
proxies' discretionary authority to vote on any such proposal, if it does not
receive notice of such proposal by February 13, 2002.
The procedures for shareholders to make nominations for Class II
Directors to be elected at the Annual Meeting of Shareholders of the Company to
be held in 2002 are set forth above under "Board of Directors and Management --
Nomination of Directors."
ADDITIONAL INFORMATION
The Company's Annual Report on Form 10-K for the year ended December
31, 2000, which was filed with the Securities and Exchange Commission on March
20, 2001, accompanies this Proxy Statement to serve as the 2001 Dominion Homes,
Inc. Annual Report to Shareholders (the "Annual Report"). The Annual Report
includes the consolidated financial statements for the Company and its
subsidiaries and other important information about the Company. The Company will
provide, without charge, to any person solicited (upon written or oral request
of such person), a copy of any or all of the exhibits listed in the "Index to
Exhibits" contained in the Annual Report. Such request should be addressed to
Investor Relations Department, Dominion Homes, Inc. 5501 Frantz Road, Dublin,
Ohio 43017; (614) 761-6000.
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APPENDIX A
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DOMINION HOMES, INC.
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 overviewing 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 oversight role, 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 outside counsel,
auditors or other experts for this purpose. The Board and the Committee are in
place to represent the Company's shareholders; accordingly, the outside auditor
is ultimately accountable to the Board and the Committee.
The Committee shall review the adequacy of this Charter on an annual basis.
MEMBERSHIP
The Committee shall be comprised of not less than three members of the Board,
and the Committee's composition will meet the requirements of the Audit
Committee Policy of the National Association of Securities Dealers.
Accordingly, all of the members will be directors:
(1) Who have no relationship to the Company that may interfere with the
exercise of their independence from management and the Company in
carrying out their responsibilities as directors; and
(2) Who are able to read and understand fundamental financial statements,
including a balance sheet, income statement and cash flow statement or
will be able to do so within a reasonable period of time after
appointment to the Committee. In addition, at least one member of the
Committee will have had past employment experience in finance or
accounting, requisite professional certification in accounting, or any
other comparable experience or background which results in the member's
financial sophistication, including being or having been a chief
executive officer, chief financial officer or other senior officer with
financial oversight responsibilities.
KEY RESPONSIBILITIES
The Committee's job is one of oversight and it recognizes that the Company's
management is responsible for preparing the Company's financial statements and
that the outside auditors are responsible for auditing those financial
statements. Additionally, the Committee recognizes that financial management
including the internal audit staff, as well as the
34
outside auditors, have 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
the outside auditor's work.
The following functions shall be the common recurring activities of the
Committee in carrying out its oversight function. These functions are set forth
as a guide with the understanding that the Committee may diverge from this guide
as appropriate given the circumstances.
(3) The Committee shall review with management and the outside auditors 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 outside auditors the matters required to be discussed
by Statement of Auditing Standards ("SAS") No. 61.
(4) As a whole, or through the Committee's chair, and upon the request of
the outside auditors, the Committee shall review with the outside
auditors the Company's interim financial results to be included in the
Company's quarterly reports 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 The Committee shall discuss with management and the outside auditors
the quality and adequacy of the Company's internal controls.
(6) The Committee shall:
(1) request from the outside auditors annually a formal written
statement delineating all relationships between the auditor
and the Company consistent with Independence Standards Board
Standard Number 1;
(7) actively discuss with the outside auditors any such disclosed
relationships and their impact on the outside auditor's
objectivity and independence; and
(8) recommend that the Board take appropriate action to oversee
the independence of the outside auditors.
o The Committee, subject to any action that may be taken by the full
Board, shall have the ultimate authority and responsibility to select
(or nominate for shareholder approval), evaluate and, where
appropriate, replace the outside auditors.
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DOMINION HOMES, INC.
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 2, 2001
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. ("Company") hereby constitute(s) and
appoint(s) David S. Borror 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, 5501 Frantz Road, Dublin, Ohio, on May 2, 2001,
at 10:00 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:
1. |_| FOR election as Directors of the Company all the |_| WITHHOLD AUTHORITY to vote for all
nominees listed below (except as marked to the nominees listed below.
contrary below).*
Douglas G. Borror Jon M. Donnell C. Ronald Tilley
*(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THE NAME OF THE NOMINEE IN THE LIST ABOVE.)
2. |_| FOR |_| AGAINST |_| ABSTAIN
Ratification of the selection of PricewaterhouseCoopers LLP as independent
public accountants for the Company in 2001.
3. 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.
(Continued, and to be signed, on other side)
36
(Continued from other side)
WHERE A CHOICE IS INDICATED, THE SHARES REPRESENTED BY THIS PROXY WILL
BE VOTED OR NOT 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" RATIFICATION OF THE
SELECTION OF PRICEWATERHOUSECOOPERS LLP AS THE INDEPENDENT PUBLIC ACCOUNTANTS
FOR THE COMPANY IN 2001, 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.
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 2, 2001, ANNUAL MEETING.
DATED: ________________, 2001 __________________________________
SIGNATURE OF SHAREHOLDER(S)
DATED: ________________, 2001 __________________________________
SIGNATURE OF SHAREHOLDER(S)
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.