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M/I SCHOTTENSTEIN HOMES, INC.
DIRECTOR DEFERRED COMPENSATION PLAN
SECTION 1. PURPOSE - The Company desires and intends to recognize the value to
the Company and its Affiliates of the past and present services of its
Directors, to encourage their continued service to the Company and its
Affiliates and to be able to attract and retain superior Directors by adopting
and implementing this Plan to provide such Directors an opportunity to defer
compensation otherwise payable to them from the Company and/or Affiliate. In
addition, the Company desires to allow such Directors an opportunity to invest
in the Common Shares of the Company by providing that amounts deferred under
this Plan will be used to purchase such Common Shares.
SECTION 2. CERTAIN DEFINITIONS - The following terms will have the meanings
provided below.
"Additions" means the credits applied to Deferred Compensation Accounts
as provided in Section 4 hereof.
"Adjustment Date" means the last business day of each calendar month.
"Affiliate" means any organization or entity which, together with the
Company, is a member of a controlled group of corporations or of a commonly
controlled group of trades or businesses [as defined in Sections 414(b) and (c)
of the Code], or of an affiliated service group [as defined in Code Section
414(m)] or other organization described in Code Section 414(o).
"Annual Retainer" means, with respect to any calendar year or other
period, the fixed retainer which, absent an election to defer hereunder, would
be payable to a Participant for services rendered to the Board or its committees
during those pay periods beginning in the given calendar year or other period.
"Beneficiary" means the person or persons designated in writing as such
and filed with the Company at any time by a Participant. Any such designation
may be withdrawn or changed in writing (without the consent of the Beneficiary),
but only the last designation on file with the Company shall be effective.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as may be amended from
time to time.
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"Common Shares" means the common shares of the Company, par value $.01.
"Company" means M/I Schottenstein Homes, Inc., an Ohio corporation, and
any successor entity.
"Deferred Compensation Account" means the separate Deferred
Compensation Account established for each Participant pursuant to Section 4 of
the Plan.
"Director" means any director of the Company who receives compensation
from the Company for his services as a director.
"Effective Date" means May 1, 1997, provided that the Plan is approved
by at least a majority vote of the members of the Board at a regularly scheduled
meeting of the Board within thirty (30) days following such date.
"Eligible Compensation" means, to the extent applicable to any given
Participant, the Annual Retainer and all Meeting Fees. The extent to which a
given Participant may defer a given component of Eligible Compensation shall be
based upon such Participant's eligibility to receive the given component of
Eligible Compensation (as determined under applicable agreements and pay
practices of the Company or applicable Affiliate) and the provisions and
limitations applicable to the given component as provided under this Plan.
"Fair Market Value" of the Common Shares means the most recent closing
price of the Common Shares on any national securities exchange on which the
Common Shares are then listed.
"Meeting Fees" means, with respect to any calendar year or other
period, the fees for attendance at meetings of the Board or its committees
(exclusive of expenses) which, absent an election to defer hereunder, would be
payable to a Participant during those pay periods beginning in the given
calendar year or other period.
"Participant" has the meaning specified in Section 3 of the Plan.
"Plan" means the M/I Schottenstein Homes, Inc. Director Deferred
Compensation Plan, as reflected in this document, as the same may be amended
from time to time after the Effective Date.
"Plan Administrator" means the Company.
"Plan Year" means the calendar year.
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"Trust" means the trust fund that, in the discretion of the Company,
may be established for purposes of segregating certain assets of the Company for
payment of benefits hereunder as the same may be amended from time to time. Such
Trust may be irrevocable, but the assets thereof shall, at all times, remain the
property of the Company subject to the claims of the Company's creditors.
SECTION 3. PARTICIPANTS
Each Director on the Effective Date shall be designated by the Company as
eligible for participation in the Plan on the Effective Date. Each individual
who becomes a Director after the Effective Date shall be designated by the
Company as eligible for participation in the Plan as of the date on which he
becomes a Director. A Director so designated shall immediately become a
"Participant" in the Plan. A Participant shall continue to participate in the
Plan until his status as a Participant is terminated by either a complete
distribution of his Deferred Compensation Account pursuant to the terms of the
Plan or by written directive of the Company.
SECTION 4. DEFERRED COMPENSATION ACCOUNTS
A. ESTABLISHMENT OF DEFERRED COMPENSATION ACCOUNTS. The Company will
establish a Deferred Compensation Account for each Participant.
B. ELECTION OF PARTICIPANT. With respect to each Plan Year, a
Participant may elect to have either 100% or none of his Eligible Compensation
which is to be paid to him by the Company for the Plan Year in question
allocated to his Deferred Compensation Account and paid on a deferred basis
pursuant to the terms of the Plan. To exercise such an election for any Plan
Year, within thirty (30) days prior to the commencement of the Plan Year, the
Participant must advise the Company of his election, in writing, on a form
prescribed by the Company (each, a "Deferral Notice"). Notwithstanding the
preceding sentence, in the first year of the Plan, a Participant may complete a
Deferral Notice at any time within thirty (30) days following the Effective
Date. Such Deferral Notice shall apply only to Eligible Compensation payable to,
or earned by, the Participant after the date on which the Deferral Notice is
received by the Company. To the extent that a Participant completes a Deferral
Notice in accordance with the provisions of this paragraph, such Deferral Notice
shall remain in effect for future Plan Years until changed or revoked by the
Participant.
C. COMPANY CONTRIBUTIONS. Each time a Deferral Notice is submitted to
the Company in accordance with Section 4.B. above, during the next Plan Year,
the Company will allocate to the Participant's Deferred Compensation Account the
percentage of Eligible Compensation, specified in the Deferral Notice. Any
amounts so allocated by the Company are called "Company Contributions."
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D. ADJUSTMENT OF ACCOUNT BALANCES. As of each Adjustment Date, the
amount credited to the Deferred Compensation Account of each Participant shall
be divided by the then Fair Market Value of the Common Shares. Upon completion
of this calculation, each Deferred Compensation Account shall be credited with
the resulting number of whole Common Shares and any remaining amounts shall
continue to be credited to the Deferred Compensation Account until converted to
whole Common Shares at a future Adjustment Date. The Deferred Compensation
Account of each Participant shall be credited with cash dividends on the Common
Shares at the times and equal in amount to the cash dividends actually paid with
respect to Common Shares on and after the date credited to the Deferred
Compensation Account. At the following Adjustment Date, the amount of cash
dividends credited to each Deferred Compensation Account (and any other amounts
then credited to such account) shall be divided by the then Fair Market Value of
the Common Shares; and the Deferred Compensation Account of each Participant
shall be credited with the resulting number of whole Common Shares and any
remaining amounts shall continue to be credited to the Deferred Compensation
Account until converted to whole Common Shares at a future Adjustment Date. The
Plan Administrator may prescribe any reasonable method or procedure for the
accounting of Additions.
E. STOCK ADJUSTMENTS. The number of Common Shares in the Deferred
Compensation Account of each Participant shall be adjusted from time to time to
reflect stock splits, stock dividends or other changes in the Common Shares
resulting from a change in the Company's capital structure.
F. PARTICIPANT'S RIGHTS IN ACCOUNTS. A Participant's only right with
respect to his Deferred Compensation Account (and amounts allocated thereto)
will be to receive payments in accordance with the provisions of Section 5 of
the Plan.
SECTION 5. PAYMENT OF DEFERRED BENEFITS
A. TIME OF PAYMENT. Distribution of a Participant's Deferred
Compensation Account shall be made within thirty (30) days of the earlier of (i)
the date specified by the Participant in the Deferral Notice delivered to the
Plan Administrator at the time the deferral election is made; or (ii) the date
of the Participant's termination of service as a Director due to resignation,
retirement, death or otherwise.
B. METHOD OF DISTRIBUTION. A Participant's Deferred Compensation
Account shall be distributed to the Participant in a single lump sum payment.
Deferred Compensation Accounts shall be distributed either in Common Shares or
in cash at the election of the Plan Administrator. In the event that a
distribution is made in cash, the Plan Administrator shall determine the amount
of such distribution by using the Fair Market Value of the Common Shares as of
either the date of distribution specified by the Participant in his Deferral
Notice or the date on which the Participant's service as a Director terminated,
whichever may be applicable.
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C. HARDSHIP DISTRIBUTIONS. Prior to the time a Participant's Deferred
Compensation Account becomes payable, the Plan Administrator, in its sole
discretion, may elect to distribute all or a portion of such account in the
event such Participant requests a distribution due to severe financial hardship.
For purposes of this Plan, severe financial hardship shall be deemed to exist in
the event the Plan Administrator determines that a Participant needs a
distribution to meet immediate and heavy financial needs resulting from a sudden
or unexpected illness or accident of the Participant or a member of the
Participant's family, loss of the Participant's property due to casualty or
other similar extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the Participant. A distribution based on
financial hardship shall not exceed the amount required to meet the immediate
financial need created by the hardship and shall be made in cash, based upon the
Fair Market Value of the Common Shares as of the date of distribution.
D. DESIGNATION OF BENEFICIARY. Upon the death of a Participant prior to
the distribution of his Deferred Compensation Account, such Deferred
Compensation Account shall be paid to the Beneficiary designated by the
Participant. If there is no designated Beneficiary or no designated Beneficiary
surviving at a Participant's death, payment of the Participant's Deferred
Compensation Account shall be made to the Participant's estate.
E. TAXES. In the event any taxes are required by law to be withheld or
paid from any payments made pursuant to the Plan, the Plan Administrator shall
deduct such amounts from such payments and shall transmit the withheld amounts
to the appropriate taxing authority.
SECTION 6. ASSIGNMENT OR ALIENATION - The right of a Participant, Beneficiary or
any other person to the payment of a benefit under this Plan may not be
assigned, transferred, pledged or encumbered except by Will or by the laws of
descent and distribution.
SECTION 7. PLAN ADMINISTRATION - The Plan Administrator will have the right to
interpret and construe the Plan and to determine all questions of eligibility
and of status, rights and benefits of Participants and all other persons
claiming benefits under the Plan. In all such interpretations and constructions,
the Plan Administrator's determination will be based upon uniform rules and
practices applied in a nondiscriminatory manner and will be binding upon all
persons affected thereby. Subject to the provisions of Section 8 below, any
decision by the Plan Administrator with respect to any such matters will be
final and binding on all parties. The Plan Administrator will have absolute
discretion in carrying out its responsibilities under this Section 7.
SECTION 8. CLAIMS PROCEDURE
A. FILING CLAIMS. Any Participant or Beneficiary entitled to benefits
under the Plan will file a claim request with the Plan Administrator.
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B. NOTIFICATION TO CLAIMANT. If a claim request is wholly or partially
denied, the Plan Administrator will furnish to the claimant a notice of the
decision within ninety (90) days in writing and in a manner calculated to be
understood by the claimant, which notice will contain the following information:
(i) the specific reason or reasons for the denial;
(ii) specific reference to pertinent Plan provisions upon
which the denial is based;
(iii) a description of any additional material or
information necessary for the claimant to perfect
the claim and an explanation of why such material or
information is necessary; and
(iv) an explanation of the Plan's claims review procedure
describing the steps to be taken by a claimant who
wishes to submit his claims for review.
C. REVIEW PROCEDURE. A claimant or his authorized representative may,
with respect to any denied claim:
(i) request a review upon a written application filed
within sixty (60) days after receipt by the claimant
of written notice of the denial of his claim;
(ii) review pertinent documents; and
(iii) submit issues and comments in writing.
Any request or submission will be in writing and will be directed to the Plan
Administrator (or its designee). The Plan Administrator (or its designee) will
have the sole responsibility for the review of any denied claim and will take
all steps appropriate in the light of its findings.
D. DECISION ON REVIEW. The Plan Administrator (or its designee) will
render a decision upon review. If special circumstances (such as the need to
hold a hearing on any matter pertaining to the denied claim) warrant additional
time, the decision will be rendered as soon as possible, but not later than one
hundred twenty (120) days after receipt of the request for review. Written
notice of any such extension will be furnished to the claimant prior to the
commencement of the extension. The decision on review will be in writing and
will include specific reasons for the decision, written in a manner calculated
to be understood by the claimant, as well as specific references to the
pertinent provisions of the Plan on which the decision is based. If the decision
on review is not furnished to the claimant within the time limits prescribed
above, the claim will be deemed denied on review.
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SECTION 9. UNSECURED AND UNFUNDED OBLIGATION - Notwithstanding any provision
herein to the contrary, the benefits offered under the Plan shall constitute an
unfunded, unsecured promise by the Company to pay benefits determined hereunder
which are accrued by Participants while such Participants are Directors. No
provision shall at any time be made with respect to segregating any assets of
the Company for payment of any benefits hereunder, except to the extent that the
Company, in its discretion, establishes a Trust for such purpose. To the extent
any benefits provided under the Plan are actually paid from a Trust, neither the
Company nor any Affiliate shall have any further obligation therefor, but to the
extent not so paid, such benefits shall remain the obligations of, and shall be
paid by, the Company. No Participant, Beneficiary or any other person shall have
any interest in any particular assets of the Company or any Affiliate by reason
of the right to receive a benefit under the Plan and any such Participant,
Beneficiary or other person shall have only the rights of a general unsecured
creditor of the Company with respect to any rights under the Plan. Nothing
contained in the Plan shall constitute a guaranty by the Company, any Affiliate
or any other entity or person that the assets of the Company will be sufficient
to pay any benefit hereunder. All expenses and fees incurred in the
administration of the Plan and of any Trust shall be paid by the Company,
provided that, in the event that a Trust is established, at the direction of the
Company, such expenses and fees shall be paid from the Trust, provided that such
amounts are not paid by the Company or an Affiliate.
SECTION 10. AMENDMENT AND TERMINATION OF THE PLAN - The Company reserves the
right, by a resolution of the Board, to amend the Plan at any time, and from
time to time, in any manner which it deems desirable, provided that no amendment
will adversely affect the accrued benefits of any Participant under the Plan.
The Company also reserves the right, by a resolution of the Board, to terminate
this Plan at any time without providing any advance notice to any Participant;
and in the event of any Plan termination, the Company reserves the right to then
distribute all amounts allocated to Participants' Deferred Compensation
Accounts.
SECTION 11. BINDING UPON SUCCESSORS - The Plan shall be binding upon and inure
to the benefit of the Company, its successors and assigns and the Participants
and their heirs, executors, administrators and legal representatives. In the
event of the merger or consolidation of the Company with or into any other
corporation, or in the event substantially all of the assets of the Company
shall be transferred to another corporation, the successor corporation resulting
from the merger or consolidation, or the transferee of such assets, as the case
may be, shall, as a condition to the consummation of the merger, consolidation
or transfer, assume the obligations of the Company hereunder and shall be
substituted for the Company hereunder.
SECTION 12. NO GUARANTEE OF PLAN PERMANENCY - This Plan does not contain any
guarantee of provisions for continued service on the Board to any Director or
Participant nor is it guaranteed by the Company to be a permanent plan.
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SECTION 13. GENDER - Any reference in the Plan made in the masculine pronoun
shall apply to both men and women.
SECTION 14. INCAPACITY OF RECIPIENT - In the event that a Participant or
Beneficiary is declared incompetent and a guardian, conservator or other person
legally charged with the care of his person or of his estate is appointed, any
benefits under the Plan to which such Participant or Beneficiary is entitled
shall be paid to such guardian, conservator or other person legally charged with
the care of his person or his estate. Except as provided hereinabove, when the
Plan Administrator, in its sole discretion, determines that a Participant or
Beneficiary is unable to manage his financial affairs, the Plan Administrator
may, but shall not be required to, direct the Company to make distribution(s) to
any one or more of the spouse, lineal ascendants or descendants or other closest
living relatives of such Participant or Beneficiary who demonstrates to the
satisfaction of the Plan Administrator the propriety of making such
distribution(s). Any payment made under this Section 14 shall be in complete
discharge of any liability under the Plan for such payment. The Plan
Administrator shall not be required to see to the application of any such
distribution made to any person.
SECTION 15. GOVERNING LAW - This Plan shall be construed in accordance with and
governed by the laws of the State of Ohio.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed by
a duly authorized officer as of the Effective Date.
M/I SCHOTTENSTEIN HOMES, INC.
By:_______________________________________
Its:_______________________________________
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M/I SCHOTTENSTEIN HOMES, INC.
DIRECTOR DEFERRED COMPENSATION PLAN
DEFERRAL NOTICE
Name:_______________________________________________________________________
Soc. Sec. No.:______________________________________________________________
Date of Birth:______________________________________________________________
1. ELECTION TO DEFER.
In accordance with the provisions of the M/I Schottenstein Homes, Inc.
Director Deferred Compensation Plan (the "Plan"), I hereby elect to
defer __________ percent (either 0% or 100%) of the Eligible
Compensation (as defined in the Plan) payable to me for services as a
Director of M/I Schottenstein Homes, Inc., or any of its Affiliates.
This election supersedes any prior deferral election made by me and
shall remain in effect until terminated or otherwise amended.
2. DISTRIBUTION ELECTION.
I hereby elect to receive distribution of my Deferred Compensation
Account in the Plan within 30 days of my termination as a Director or,
if earlier, within 30 days of _______________.
3. METHOD OF PAYMENT.
I hereby acknowledge that I will receive the distribution of my
Deferred Compensation Account in the Plan in a single lump sum payment.
4. DESIGNATION OF BENEFICIARY.
I hereby designate _____________________ as my primary Beneficiary and
______________________ as my contingent Beneficiary(ies) to receive any
amounts payable under the Plan in the event of my death.
5. ACKNOWLEDGMENT.
I hereby acknowledge that my election to defer Eligible Compensation
under the Plan is irrevocable with respect to amounts which are
deferred under the Plan and shall remain in effect until terminated or
modified.
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Date Signature
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Name (please print)