SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(MARK ONE)
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2001
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM_____________TO_____________
COMMISSION FILE NUMBER:33-76290
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
DOMINION HOMES, INC.
RETIREMENT PLAN AND TRUST
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
DOMINION HOMES, INC.
5501 FRANTZ ROAD
DUBLIN, OH 43017
DOMINION HOMES, INC.
RETIREMENT PLAN
AND TRUST
FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator of
Dominion Homes, Inc. Retirement Plan and Trust
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of Dominion Homes, Inc. Retirement Plan and Trust (the Plan) at December 31,
2001 and 2000, and the changes in net assets available for benefits for the
years then ended in conformity with accounting principles generally accepted in
the United States of America. These financial statements are the responsibility
of the Plan's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes is presented for the purpose of additional analysis and
is not a required part of the basic financial statements but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. This supplemental schedule is the responsibility of the Plan's management.
The supplemental schedule has been subjected to the auditing procedures applied
in the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/ PricewaterhouseCoopers LLP
Columbus, Ohio
June 14, 2002
DOMINION HOMES, INC. RETIREMENT PLAN AND TRUST
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
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2001 2000
ASSETS
Investments, at fair value $9,328,204 $8,030,413
Outstanding participants' loans 152,362 150,422
Employer contributions receivables 22,791 41,077
Employee contributions receivables -- 29,424
Accrued interest and dividends receivable 706 615
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Total assets 9,504,063 8,251,951
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LIABILITIES
Accrued expenses 12,010 12,375
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Total liabilities 12,010 12,375
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Net assets available for benefits $9,492,053 $8,239,576
========== ==========
The accompanying notes are an integral part of these financial statements.
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DOMINION HOMES, INC. RETIREMENT PLAN AND TRUST
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
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2001 2000
ADDITIONS
Employee contributions $ 1,018,686 $ 980,444
Employer contributions 629,963 554,386
Interest and dividend income 274,262 510,531
----------- -----------
Total additions 1,922,911 2,045,361
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DEDUCTIONS
Participant benefits (509,188) (1,071,860)
Net depreciation in the fair value of investments (114,151) (823,487)
Administrative expenses (47,095) (44,941)
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Total deductions (670,434) (1,940,288)
----------- -----------
Net additions 1,252,477 105,073
Net assets available for benefits, beginning of year 8,239,576 8,134,503
----------- -----------
Net assets available for benefits, end of year $ 9,492,053 $ 8,239,576
=========== ===========
The accompanying notes are an integral part of these financial statements.
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DOMINION HOMES, INC. RETIREMENT PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
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1. DESCRIPTION OF THE PLAN
Dominion Homes, Inc. (the Employer) established Dominion Homes, Inc.
Retirement Plan and Trust (the Plan) effective July 1, 1985. The Plan is a
defined contribution plan designed to comply with Sections 401(a) and (k)
of the Internal Revenue Code. The following is a brief description of the
Plan. Participants should refer to the plan document for a complete
explanation of the Plan's provisions.
Employees are eligible to participate in the Plan upon the latest of: a)
the attainment of age 21; b) the completion of six months of service; and
c) classification as a regular full-time employee, exclusive of employees
for whom retirement benefits have been the subject of good faith
collective bargaining.
Participants designate the percentage of employer and participant
contributions invested in the 14 investment fund options. These options
include:
- Dominion Homes Stock
- EB Money Market Fund
- Victory DCS MaGIC Fund
- Victory LifeChoice Moderate Investor Fund
- Victory LifeChoice Growth Investor Fund
- Victory Diversified Stock Fund
- Victory Stock Index Fund
- Fidelity Advisors Growth Opportunities Fund (Class T)
- Janus Twenty Fund
- Janus Worldwide Fund
- INVESCO Dynamics Fund
- PIMCO Total Return Fund
- Franklin Small Cap Growth Fund
- AIM International Equity Fund
The EB Money Market Fund and the DCS MaGIC Fund are KeyBank Common Trust
Funds with investments in fixed income securities and guaranteed
investment contracts. Participants may change their investment options on
a daily basis.
A participant in the Plan may enter into a salary reduction agreement with
the Employer, authorizing the Employer to withhold a percentage of such
participant's compensation and to contribute such amount to the Plan on
their behalf. If a participant has not authorized the Employer to withhold
at the maximum rate and desires to increase the total amount withheld for
a plan year, such participant may authorize the Employer to withhold a
supplemental amount up to 100% of their compensation for one or more pay
periods. In no event may the
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DOMINION HOMES, INC. RETIREMENT PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
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sum of the amounts withheld under the Salary Reduction Agreement plus the
supplemental withholding in any calendar year exceed $10,500, the maximum
allowable. In accordance with Section 401(k) of the Internal Revenue Code,
all amounts withheld from a participant's compensation in accordance with
this section and contributed to their salary reduction account are not to
be included in the gross income of the participant for federal income tax
purposes and are deemed, for tax purposes, to be an employee contribution
to the Plan.
The Employer is required to make matching contributions to the Plan from
its current or accumulated profits, if any, equal to 100% of the first 3%
of salary reduction contributions made by participants and 50% of the next
2% of salary reduction contributions, provided that the participant is
employed on the last day of the plan year, subject to the limitations as
published from time to time by the Internal Revenue Service. In no event
may the sum of the amounts credited to a participant's salary reduction
account and matching contribution account in any plan year exceed the
lesser of 25% of the participant's compensation for the plan year or
$30,000.
A participant's interest in their salary reduction account, rollover
account, and matching contribution account shall be fully vested and
nonforfeitable at all times.
Participants may borrow from their participant accounts a minimum of
$1,000 up to a maximum amount equal to the lesser of 50% of their vested
account balance or $50,000. Loan terms are not to exceed five years with
the interest rate based on the rates available for similar loans from
commercial lending institutions. The loans are collateralized by an
assignment, pledge, or other security interest in the participant's vested
account balance. Repayment of a loan is required to be made through
payroll deductions on an aftertax basis in level payments of principal and
interest.
Benefits under the Plan are generally payable upon the earliest occurrence
of a participant's death, disability or retirement at or after attainment
of normal retirement age. On termination of service due to death,
disability or retirement, a participant may elect to receive either a
lump-sum amount equal to the value of the participant's vested interest in
their account, or in equal monthly, quarterly, semiannual or annual
installments over a period not to exceed ten years. For termination of
service due to other reasons, a participant may receive the value of the
vested interest in their account as a lump-sum distribution.
Notwithstanding the foregoing, a participant's salary reduction account
may also be distributed in the event of certain financial hardships or the
attainment of age 55.
The Employer reserves the right at any time to amend or terminate this
plan or to suspend contributions thereto, provided that no such amendment,
termination or suspension shall have the effect of giving the Employer any
right or interest, or of revoking or diminishing the rights and interests
of any participant in the funds then held by the trustee.
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DOMINION HOMES, INC. RETIREMENT PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
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2. ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed in
the preparation of the financial statements. The policies conform to
accounting principles generally accepted in the United States of America.
INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value that is measured from
quoted market prices as of the last business day of the plan year.
Security transactions are reflected on a trade-date basis, which is not
materially different from a settlement-date basis. Dividends are recorded
on the ex-dividend date. Interest is recorded on the accrual basis.
In the statements of changes in net assets available for plan benefits,
the Plan presents the net depreciation in the fair value of its
investments, which consists of the net realized gains or losses and the
net unrealized appreciation or depreciation on those investments.
ADMINISTRATIVE EXPENSES
Administrative expenses are paid by the trustee from the net assets of the
Plan. Approximately $47,000 and $45,000 in administrative expenses were
incurred for the years ended December 31, 2001 and 2000, respectively.
USE OF ESTIMATES
The preparation of the Plan's financial statements in conformity with
accounting principles generally accepted in the United States of America
requires the plan administrator to make estimates and assumptions that
affect the reported amounts of net assets available for benefits at the
date of the financial statements and the changes in the net assets
available for benefits during the reporting period and, when applicable,
disclosures of contingent assets and liabilities at the date of the
financial statements. Actual results could differ from those estimates.
RISKS AND UNCERTAINTIES
The Plan provides for various investment options in any combination of
stocks, mutual funds, and other investment securities. Investment
securities are exposed to various risks, such as interest rate, market,
and credit risks. Due to the level of risk associated with certain
investment securities, it is at least reasonably possible that changes in
the values of investment securities will occur in the near term and that
such changes could materially affect participants' account balances and
the amounts reported in the statements of net assets available for plan
benefits.
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DOMINION HOMES, INC. RETIREMENT PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
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3. INVESTMENTS
The following are investments that represent five percent or more of the
Plan's net assets available for benefits at December 31, 2001 and 2000:
2001
INVESTMENTS FAIR VALUE
----------------------------------------- -----------
Dominion Homes Stock Fund $ 2,263,388
Victory LifeChoice Moderate Investor Fund 1,108,720
Victory LifeChoice Growth Investor Fund 1,031,243
Janus Twenty Fund 911,664
Victory Diversified Stock Fund 801,268
Victory Stock Index Fund 769,164
Victory DCS MaGIC Fund 596,024
Janus Worldwide Fund 495,902
2000
INVESTMENTS FAIR VALUE
----------------------------------------- -----------
Dominion Homes Stock Fund $ 1,299,393
Victory LifeChoice Moderate Investor Fund 1,255,372
Victory LifeChoice Growth Investor Fund 1,224,246
Janus Twenty Fund 821,809
Victory Stock Index Fund 742,829
Victory Diversified Stock Fund 633,377
INVESCO Dynamics Fund 576,621
Janus Worldwide Fund 522,751
4. TAX STATUS
The Plan has been designed to meet the requirements of Sections 401(a),
401(k) and 501(a) of the Internal Revenue Code, as amended by the Employee
Retirement Income Security Act of 1974 (ERISA). The Plan has been granted
favorable determination of tax-exempt status under Section 501(a).
The Plan obtained its latest determination letter on May 6, 1996, in which
the Internal Revenue Service (IRS) stated that the Plan, as then designed,
was in compliance with the applicable requirements of the Internal Revenue
Code. The Plan has been amended since receiving the determination letter.
However, the plan administrator and the Plan's tax counsel believe that
the Plan is currently designed and being operated in compliance with the
applicable requirements of the Internal Revenue Code. Therefore, no
provision for income taxes has been included in the Plan's financial
statements.
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DOMINION HOMES, INC. RETIREMENT PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
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5. TRANSACTIONS WITH PARTIES-IN-INTEREST
The Plan held, at fair value, $2,263,388 and $1,299,393 of Dominion Homes,
Inc. common shares (Employer Securities) at December 31, 2001 and 2000,
respectively. The Plan purchased 20,998 and 16,169 shares of Dominion
Homes, Inc. common shares at a cost of $236,395 and $100,535 in 2001 and
2000, respectively. The Plan sold 29,902 and 21,484 Dominion Homes, Inc.
common shares for $345,100 and $150,977 with a realized gain of $87,973
and $33,940 in 2001 and 2000, respectively.
Certain Plan investments are units of common/collective trusts and money
market funds managed by Key Bank, an affiliate of Victory Capital
Management, Inc. (previously Key Trust Company) in 2001 and 2000. Victory
Capital Management, Inc. is the trustee as defined by the Plan for 2001
and 2000 and, therefore, these transactions qualify as party-in-interest
transactions. Fees paid by the Plan for investment management services
amounted to $24,394 and $21,571 for the plan years ended December 31, 2001
and 2000, respectively.
6. RECONCILIATION OF THE FINANCIAL STATEMENTS TO FORM 5500
Net assets available for benefits and benefits paid to participants per
the financial statements differ from the Form 5500 due to amounts
allocated to withdrawing participants. Amounts allocated to withdrawing
participants are recorded as liabilities on the Form 5500 for benefit
claims that have been processed and approved for payment prior to December
31 but not paid as of that date. Such amounts are not liabilities for
financial reporting purposes and are not material.
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DOMINION HOMES, INC. RETIREMENT PLAN AND TRUST
LINE 4i--SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2001
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IDENTITY OF ISSUER, BORROWER,
LESSOR, OR SIMILAR PARTY DESCRIPTION OF INVESTMENT SHARES FAIR VALUE
------------------------ ------------------------- ------ ----------
*Victory Capital Management, Inc. EB Money Market Fund 110,685 $ 110,685
*Victory Funds DCS MaGIC Fund 39,081 596,024
*Dominion Homes, Inc. Common Shares 145,089 2,263,388
*Participant Loans Participant Loans (5% - 9.5% interest) 152,362 152,362
*Victory Funds Diversified Stock Fund 55,760 801,268
*Victory Funds LifeChoice Moderate Investor Fund 111,317 1,108,720
*Victory Funds LifeChoice Growth Investor Fund 110,648 1,031,243
*Victory Funds Stock Index Fund 45,218 769,164
Fidelity Advisors Growth Opportunities Fund (Class T) 8,481 412,953
Janus Janus Twenty Fund 23,704 911,664
Janus Janus Worldwide Fund 11,312 495,902
INVESCO Funds Dynamics Fund 24,150 384,716
PIMCO Total Return Fund 12,915 135,601
Franklin Templeton Funds Franklin Small Cap Growth Fund 9,588 298,852
AIM International Equity Fund 539 8,024
* Denotes a party-in-interest transaction
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SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on the Plan's behalf by the
undersigned hereunto duly authorized.
DATE: JUNE 28, 2002 DOMINION HOMES, INC.
RETIREMENT PLAN AND TRUST
/s/ Terry E. George
-------------------
Terry E. George
Co-Trustee
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DOMINION HOMES, INC. RETIREMENT PLAN AND TRUST
ANNUAL REPORT ON FORM 11-K FOR FISCAL YEAR ENDED DECEMBER 31, 2001
INDEX TO EXHIBITS
Exhibit No. Description Page No.
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1 Consent of Independent Public Accountants Page 12
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