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SECTION: 3.0 POLICY NUMBER 3.15.1 PAGE 1 OF 2
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TITLE: INVESTMENT HOME COMPENSATION DATE ISSUED: AUGUST 1, 1989
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REVISED: SEPTEMBER 1, 1995 SUPERSEDES: AUGUST 1, 1993
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POLICY:
M/I Schottenstein Homes, Inc. has established, as an additional
compensation benefit to certain upper management staff, a program
whereby individuals are allowed to have the Company construct an
investment home on his/her behalf.
PROCEDURES:
The following statements represent the terms and conditions
required to be followed, unless a specific deviation is made by
the President.
I. The request to build an investment home must be SUBMITTED
to and approved by the Regional Manager and the
President, IN WRITING, prior to the purchase of the lot
and commencement of any construction.
The timing of the investment home construction is subject
to the workload of the respective division. Approval of
start is at the sole discretion of the Regional Manager.
II. The investment home must be constructed within a city and
subdivision in which an M/I Homes division is currently
located. Attached product is not allowed under this Plan
due to the difficulty in the separation of invoices. Only
one investment home may be constructed in each subdivision
of the Company. If more than one eligible person desires
to build an investment home in the same subdivision,
requests will be considered on a first received basis.
There are NO other geographic constraints for eligible
employees that restrict the building of a home in an area
where the individual is not located. Where practical,
investment homes should not be reserved or constructed on
a premium lot. Additionally, an investment home should not
be constructed during the initial 180-day sale and
marketing of a particular subdivision.
III. The investment home must be a plan being offered currently
by the M/I division building the home. The lot must be
purchased by the employee from the developer or from M/I
prior to commencement of construction.
IV. The employee may not sell the investment home for a period
of 18 months (from completion of construction) in order to
eliminate any conflict of interest associated with the
eligible employee competing in the market place with the
Company. Homes must be marketed by a real estate agent or
personally, not by Company Sales personnel. No "For Rent"
signs may be placed on the investment property at any
time.
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SECTION: 3.0 POLICY NUMBER: 3.15.1 PAGE 2 OF 2
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TITLE: INVESTMENT HOME COMPENSATION DATE ISSUED: AUGUST 1, 1989
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REVISED: SEPTEMBER 1, 1995 SUPERSEDES: AUGUST 1, 1993.
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V. The timely payment and financing of all direct construction
costs including, but not limited to land, permitting and
subcontractor expenses, as well as liability, fire and
builders' risk insurance are the responsibility of the
eligible employee. This responsibility should be
communicated to the subcontractors. Invoices should be
forwarded to Company accounts payable personnel for lien
release processing. However, any checks must be written by
the employee and returned to accounts payable personnel for
distribution. NO INVOICES should be paid for by the Company
on behalf of the employee.
VI. The eligible employee must remit to the Company the sum of
7% of the final construction costs of the home (excludes
land) in consideration of the construction services
provided by the Company. This payment eliminates any
reporting of taxable income to the employee as it is
considered to be the fair market value of such service.
Payment is due and payable to the Company no later than
three (3) months after completion of the home. Payment
should be forwarded to the Director of Human Resources with
an attached itemized list of the construction costs.
VII. Warranty will be provided by the Company which includes all
pre-settlements and warranty inspections.
VIII. Only individuals employed in a Senior Vice President, Vice
President, Assistant Division Manager, Director of Human
Resources, Director of Information Systems or Corporate
Controller capacity are permitted to participate in the
Plan. Schottenstein family members are not allowed to
participate in this program. Eligible individuals are
permitted to build one investment home per year. The
number of investment homes is on an annual calendar year
basis and is non-cumulative from year to year, as well as
subject to change with annual Board review.
IX. All deeds are to be submitted to and signed by
either the President, Executive Vice President or
Chief Financial Officer. Individuals eligible for
investment homes are not to sign the respective
deeds.
X. The management of the property, once constructed, is
the sole responsibility of the eligible employee.
XI. Applicable BONUS PAYMENTS will be payable by
the Company from the construction fee provided the
terms of the respective bonus plans are met.
(See appendix for related form)