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SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
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 sec.240.14a-11(c) or sec.240.14a-12
M/I SCHOTTENSTEIN HOMES, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
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[MI SCHOTTENSTEIN HOMES, INC. LOGO]
3 Easton Oval
Columbus, Ohio 43219
March 13, 2002
To Our Shareholders:
The Annual Meeting of Shareholders of M/I Schottenstein Homes, Inc. (the
"Company") will be held at 9:00 a.m., Eastern Daylight Time, on Thursday, April
18, 2002, at the offices of the Company, 3 Easton Oval, Columbus, Ohio.
Enclosed is a copy of our 2001 Annual Report, notice of the meeting, a
proxy statement and a proxy card. Please record your vote on the proxy card and
return it promptly in the postage-paid envelope provided, or alternatively, vote
your proxy electronically via the Internet or telephonically in accordance with
the instructions on your proxy card.
We look forward to reviewing the activities of the Company at the meeting.
We hope you can be with us.
Sincerely,
/s/ Irving E. Schottenstein
Irving E. Schottenstein,
Chief Executive Officer
PLEASE SIGN AND MAIL THE ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED,
OR ALTERNATIVELY, VOTE ELECTRONICALLY OR TELEPHONICALLY
[MI SCHOTTENSTEIN HOMES, INC. LOGO]
3 EASTON OVAL
COLUMBUS, OHIO 43219
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 18, 2002
To Each Shareholder of M/I Schottenstein Homes, Inc.:
Notice is hereby given that the 2002 Annual Meeting of Shareholders of M/I
Schottenstein Homes, Inc. (the "Company") will be held at 9:00 a.m., Eastern
Daylight Time, on April 18, 2002, at the offices of the Company, 3 Easton Oval,
Columbus, Ohio, for the following purposes:
1) To elect three directors to serve until the 2005 annual meeting of
shareholders or until their successors have been duly elected and
qualified;
2) To consider and vote upon a proposal to ratify the appointment of
Deloitte & Touche LLP as the Company's independent accountants and auditors
for the 2002 fiscal year; and
3) To transact such other business as may properly be brought before
the meeting or any adjournment thereof.
Only shareholders of record at the close of business on February 22, 2002,
will be entitled to notice of, and to vote at, the Annual Meeting, or at any
adjournment thereof.
It is important that your common shares be represented at the Annual
Meeting. Whether or not you intend to be present, please sign, date and send the
enclosed proxy card in the envelope provided, or alternatively, vote your proxy
electronically via the Internet or telephonically in accordance with the
instructions on your proxy card. Proxies are revocable at any time, and
shareholders who are present at the Annual Meeting may withdraw their proxy and
vote in person if they so desire.
By Order of the Board of Directors,
/s/ Paul S. Coppel
Paul S. Coppel,
Secretary
March 13, 2002
[MI SCHOTTENSTEIN HOMES, INC. LOGO]
3 Easton Oval
Columbus, Ohio 43219
PROXY STATEMENT
FOR THE
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 18, 2002
March 13, 2002
GENERAL
The Annual Meeting of Shareholders of M/I Schottenstein Homes, Inc. (the
"Company") will be held on Thursday, April 18, 2002 (the "Annual Meeting"), for
the purposes set forth in the accompanying Notice of Annual Meeting of
Shareholders. This proxy statement and the accompanying form of proxy are first
being sent to shareholders on or about March 13, 2002. This proxy statement is
furnished in connection with the solicitation by the Company's Board of
Directors (the "Board") of proxies to be used at such meeting and at any
adjournment thereof. The Annual Report of the Company for the fiscal year ended
December 31, 2001, including financial statements, is being mailed to all
shareholders together with this proxy statement.
A proxy card for use at the Annual Meeting is enclosed. Alternatively,
shareholders holding common shares registered directly with the Company's
transfer agent, EquiServe, may vote their proxy electronically via the Internet
or telephonically by following the instructions on their proxy card. The
deadline for voting electronically via the Internet or telephonically is 11:59
p.m., Eastern Daylight Time, on April 17, 2002. There are no fees or charges
associated with voting electronically via the Internet or telephonically, other
than fees or charges, if any, that shareholders pay for access to the Internet
and for telephone service. Shareholders holding common shares in "street name"
with a broker, bank or other holder of record may also be eligible to vote their
proxy electronically via the Internet or telephonically. Such shareholders
should review the information provided to them by such holder of record. This
information will set forth the procedures to be followed in instructing the
holder of record how to vote the "street name" common shares and how to revoke
previously given instructions.
A proxy may be revoked by a shareholder at any time before it is exercised
by filing with the Company a notice in writing revoking it or by duly executing
a proxy card bearing a later date or casting a new vote electronically via the
Internet or telephonically. Proxies also may be revoked by any shareholder
present at the Annual Meeting who expresses a desire to vote his or her common
shares in person. Subject to such revocation and except as otherwise stated
herein or in the form of proxy, all proxies properly executed or properly voted
electronically via the Internet or telephonically that are received prior to, or
at the time of, the Annual Meeting will be voted in accordance with the
instructions contained therein. If no instructions are given, proxies will be
voted for the nominees for election of directors set forth herein, for Proposal
No. 2 and, at the discretion of the proxyholders, on all other matters that may
properly be brought before the Annual Meeting or any adjournment thereof.
OUTSTANDING SHARES AND VOTING RIGHTS
There were 7,530,047 of the Company's common shares, par value $.01 per
share (the "Common Shares"), issued and outstanding on February 22, 2002 (the
"Record Date"), which date has been set as the record date for the purpose of
determining the shareholders entitled to notice of, and to vote at, the Annual
Meeting. On any matter submitted to a shareholder vote, each shareholder will be
entitled to one vote, in person or by proxy, for each Common Share registered in
his or her name on the books of the Company as of the Record Date. A quorum for
the Annual Meeting is a majority of the outstanding Common Shares on the Record
Date.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
A class of three directors is to be elected at the Annual Meeting. The
Board has nominated the persons set forth below for election as directors of the
Company at the Annual Meeting. The three nominees receiving the greatest number
of votes cast will be elected to serve until the 2005 Annual Meeting of
Shareholders or until their successors are duly elected and qualified. Withheld
votes with respect to any nominee will be counted for purposes of establishing a
quorum, but will have no effect on the election of that nominee.
Information concerning the nominees and the remaining members of the Board
is set forth below. Thomas D. Igoe, Steven Schottenstein and Lewis R. Smoot, Sr.
will serve until the 2003 Annual Meeting of Shareholders or until their
successors are duly elected and qualified. Friedrich K. M. Bohm, Jeffrey H. Miro
and Robert H. Schottenstein will serve until the 2004 Annual Meeting of
Shareholders or until their successors are duly elected. The term of Kerrii B.
Anderson, a current director of the Company and a member of the Audit Committee
and the Compensation Committee, expires at the Annual Meeting.
Unless otherwise specified in your proxy, the Common Shares voted pursuant
thereto will be voted FOR each of the persons named below as nominees for
election as directors. The Board has no reason to believe that any nominee will
not serve if elected. If any nominee becomes unwilling or unable to serve as a
director, the proxyholders reserve full discretion to vote the Common Shares
represented by the proxies they hold for the election of the remaining nominees
and for the election of any substitute nominee designated by the Board.
YOUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE PERSONS NAMED
BELOW AS NOMINEES FOR ELECTION AS DIRECTORS.
2
YEAR FIRST
SERVED AS
NAME AGE CURRENT POSITIONS WITH COMPANY DIRECTOR
---- --- ------------------------------ ----------
NOMINEES
Phillip G. Creek 49 Senior Vice President, Chief Financial Officer Nominee
and Treasurer
Irving E. Schottenstein 73 Chief Executive Officer, Director (Chairman), 1976
member of Executive Committee (Chairman), member
of Compensation Committee
Norman L. Traeger 62 Director, member of Audit Committee, member of 1997
Compensation Committee (Chairman), member of
Executive Officer Compensation Committee
DIRECTORS
Friedrich K. M. Bohm 60 Director, member of Audit Committee, member of 1994
Compensation Committee, member of Executive
Officer Compensation Committee (Chairman)
Thomas D. Igoe 70 Director, member of Audit Committee (Chairman), 2000
member of Compensation Committee, member of
Executive Officer Compensation Committee
Jeffrey H. Miro 59 Director, member of Compensation Committee, 1998
member of Executive Officer Compensation
Committee
Robert H. Schottenstein 49 President, Director (Vice Chairman), member of 1993
Executive Committee, member of Compensation
Committee
Steven Schottenstein 45 Chief Operating Officer, Director (Vice 1993
Chairman), member of Executive Committee, member
of Compensation Committee
Lewis R. Smoot, Sr. 68 Director, member of Executive Committee, member 1993
of Audit Committee, member of Compensation
Committee, member of Executive Officer
Compensation Committee
---------------
Irving E. Schottenstein is the father of Robert H. Schottenstein and Steven
Schottenstein.
BUSINESS EXPERIENCE
NOMINEES -- TERM TO EXPIRE AT 2005 ANNUAL MEETING
Phillip G. Creek has been Chief Financial Officer since September 2000,
Senior Vice President since September 1993, Treasurer since January 1993 and
Chief Financial Officer and Treasurer of M/I Financial Corp., a wholly-owned
subsidiary of the Company ("M/I Financial"), since September 2000. He served as
Senior Vice President of M/I Financial from February 1997 until September 2000
and Vice President of M/I Financial from August 1995 until February 1997.
Irving E. Schottenstein has been Chief Executive Officer since August 1986
and Chairman of the Board of the Company and its predecessors since 1976. He was
also Chairman of the Board and President of M/I Financial from 1983 until August
1995.
Norman L. Traeger founded United Skates of America, a chain of family fun
centers, in 1971 and The Discovery Group, a venture capital firm, in 1983. Mr.
Traeger currently owns and manages industrial, commercial and office real
estate.
3
DIRECTORS -- TERM TO EXPIRE AT 2003 ANNUAL MEETING
Thomas D. Igoe served as a consultant to Bank One, NA's Corporate Banking
Division from January 1997 until December 1999. From 1962 until January 1997,
Mr. Igoe was an employee of Bank One, NA, most recently as Senior Vice
President -- Corporate Banking.
Steven Schottenstein has been Vice Chairman and Chief Operating Officer
since January 1999 and Assistant Secretary since April 1992. He served as Senior
Executive Vice President from May 1996 until January 1999 and Executive Vice
President from February 1994 until May 1996.
Lewis R. Smoot, Sr. has been President and Chief Executive Officer of The
Smoot Corporation, a construction contractor and construction management
concern, since 1987. He currently serves as a Director of Huntington Bancshares
Incorporated.
DIRECTORS -- TERM TO EXPIRE AT 2004 ANNUAL MEETING
Friedrich K. M. Bohm has been Chairman of NBBJ, the second largest
architectural firm in the United States, since 1997. From 1987 until 1997, Mr.
Bohm was Managing Partner and Chief Executive Officer of NBBJ. He is a Director,
and currently serves as a member of the executive committee of the Board of
Directors, of Huntington National Bank, a subsidiary of Huntington Bancshares
Incorporated, and is a Director of The Daimler Group.
Jeffrey H. Miro has been Chairman of the law firm of Miro, Weiner and
Kramer, with offices in Bloomfield Hills, Michigan and New York, New York, since
1981. In addition, Mr. Miro is an Adjunct Professor of Law at the University of
Michigan Law School. He currently serves as a Director of Sotheby's Holdings,
Inc.
Robert H. Schottenstein has been Vice Chairman since January 1999,
President since May 1996 and Assistant Secretary since March 1991. He served as
Executive Vice President from February 1994 until May 1996. He currently serves
as a Director of Huntington Bancshares Incorporated.
NOMINATION OF DIRECTORS
Nomination for the election of directors may be made by the Board or a
committee appointed by the Board or by any shareholder entitled to vote in the
election of directors generally. To nominate one or more persons for election as
a director, the Company's Amended and Restated Regulations require that a
shareholder give written notice of his or her intent to make such nomination or
nominations by personal delivery or by United States Mail, postage prepaid, to
the Secretary of the Company not less than 60 days nor more than 90 days prior
to the first anniversary of the date of the preceding year's annual meeting (or,
if the date of the annual meeting is changed by more than 30 days from the
anniversary date of the preceding year's annual meeting or in the case of a
special meeting, within seven days after the date the Company mails or otherwise
gives notice of the date of the meeting). Such notice shall set forth: (i) the
name and address of the person or persons to be nominated; (ii) a representation
that the shareholder is a holder of record entitled to vote at such meeting and
intends to appear in person or by proxy at the meeting to nominate the person or
persons specified in the notice; (iii) a description of all arrangements or
understandings between the shareholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the shareholder; (iv) such other information
regarding each nominee proposed by the shareholder as would be required to be
included in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission (the "Commission") had the nominee been
nominated, or intended to be nominated, by the Board; and (v) the consent of
each nominee to serve as a director of the Company, if so elected. The Chairman
of the meeting may refuse to acknowledge the nomination of any person not made
in compliance with the foregoing procedure.
4
BOARD AND COMMITTEE MEETINGS
The Board held four meetings during 2001. Except for Jeffrey H. Miro and
Lewis R. Smoot, Sr., all members of the Board during 2001 attended at least 75%
of all meetings of the Board and of the committees on which they served. The
Board does not have a nominating committee. The full Board selects the nominees
for directors.
The Board's Audit Committee with respect to the 2001 fiscal year consisted
of Thomas D. Igoe (Chairman), Kerrii B. Anderson, Friedrich K. M. Bohm, Lewis R.
Smoot, Sr. and Norman L. Traeger. Pursuant to a written Audit Committee Charter
adopted by the Board (the "Audit Committee Charter"), the Audit Committee's
responsibilities include reviewing the Company's audit procedures and policies,
the activities of the internal auditors, and potential conflicts of interest,
monitoring internal controls and financial reporting, selecting the Company's
independent accountants and auditors and making recommendations concerning these
matters to the Board. In addition, the Audit Committee periodically reviews and
reassesses the Audit Committee Charter and its policies and procedures that
relate to the independence and objectivity of the Company's independent
accountants and auditors. At least annually, the Audit Committee obtains the
Board's approval of the Audit Committee Charter. Other than Ms. Anderson, each
member of the Audit Committee qualifies as independent under the rules of the
New York Stock Exchange ("NYSE"). Ms. Anderson does not qualify as independent
under NYSE rules because three years have not elapsed since she resigned as a
Senior Vice President and the Chief Financial Officer of the Company effective
August 31, 2000. The Board has determined in its business judgment that Ms.
Anderson's membership on the Audit Committee is required by the best interests
of the Company and its shareholders based on her 15 years of experience serving
as the Chief Financial Officer of the Company and another publicly traded
corporation and her background in public accounting. The Audit Committee met
four times in 2001. The Audit Committee's report relating to the 2001 fiscal
year appears on page 15.
The Board has a Compensation Committee, whose members with respect to the
2001 fiscal year were Norman L. Traeger (Chairman), Kerrii B. Anderson,
Friedrich K. M. Bohm, Thomas D. Igoe, Jeffrey H. Miro, Irving E. Schottenstein,
Robert H. Schottenstein, Steven Schottenstein and Lewis R. Smoot, Sr. The
Compensation Committee's duties include reviewing and reporting to the Board on
specific compensation matters for executive officers and administering the
Company's stock option plan. The Compensation Committee met four times in 2001.
The Compensation Committee's report relating to the 2001 fiscal year appears on
page 12.
The Board also has an Executive Officer Compensation Committee, whose
members with respect to the 2001 fiscal year were Friedrich K. M. Bohm
(Chairman), Thomas D. Igoe, Jeffrey H. Miro, Lewis R. Smoot, Sr. and Norman L.
Traeger. Each member of the Executive Officer Compensation Committee is an
outside director for purposes of Section 162(m) of the Internal Revenue Code of
1986, as amended (the "Code"). The Executive Officer Compensation Committee's
duties include developing and administering the plans necessary to ensure that
the compensation paid to the chief executive officer and the other executive
officers of the Company will be tax deductible. The Executive Officer
Compensation Committee met four times in 2001. The Executive Officer
Compensation Committee's report relating to 2001 fiscal year appears on page 12.
Between meetings of the Board or when the Board is not in session, the
Executive Committee may exercise, to the extent permitted by law, all of the
powers and duties of the Board. The members of the Executive Committee with
respect to the 2001 fiscal year were Irving E. Schottenstein (Chairman), Robert
H. Schottenstein, Steven Schottenstein and Lewis R. Smoot, Sr. During 2001, the
Executive Committee did not hold any meetings but did take two written actions.
5
PROPOSAL NO. 2
INDEPENDENT PUBLIC ACCOUNTANTS
The Board, upon the recommendation of the Audit Committee, has appointed
Deloitte & Touche LLP as the Company's independent accountants and auditors for
the fiscal year ending December 31, 2002. Deloitte & Touche LLP served as the
Company's independent accountants and auditors for fiscal year 2001. Although
action by the shareholders in this matter is not required, the Board believes
that shareholder ratification of its appointment of Deloitte & Touche LLP is
appropriate because of the independent accountants' and auditors' role in
maintaining the quality and integrity of the Company's financial controls and
reporting practices. A representative of Deloitte & Touche LLP will be present
at the Annual Meeting, will have an opportunity to make a statement, if he or
she desires, and will be available to respond to appropriate questions.
The affirmative vote of the holders of a majority of the outstanding Common
Shares entitled to vote is required to ratify the appointment of Deloitte &
Touche LLP as the Company's independent accountants and auditors for fiscal year
2002. Abstentions and broker non-votes will be counted for purposes of
establishing a quorum and will have the same effect as a vote against the
proposal. The Company's executive officers and directors and members of the
Irving E. Schottenstein family, who collectively own, or have voting power with
respect to, approximately 31% of the outstanding Common Shares, have indicated
that they intend to vote FOR the proposal to ratify the appointment of Deloitte
& Touche LLP as the Company's independent accountants and auditors. In the event
that the shareholders do not ratify the appointment of Deloitte & Touche LLP,
the Board will consider other independent accountants and auditors upon the
recommendation of the Audit Committee.
YOUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT ACCOUNTANTS
AND AUDITORS FOR FISCAL YEAR 2002.
EXECUTIVE OFFICERS AND CERTAIN KEY EMPLOYEES
The executive officers of the Company are Irving E. Schottenstein, Robert
H. Schottenstein, Steven Schottenstein and Phillip G. Creek. Biographical
information with respect to the executive officers is set forth on pages 3-4.
The following table sets forth biographical information with respect to certain
key employees of the Company.
YEAR STARTED
NAME AGE CURRENT POSITIONS WITH COMPANY WITH COMPANY
---- --- ------------------------------ ------------
Paul S. Coppel...................... 43 President Land Operations, General 1994
Counsel and Secretary
Paul S. Rosen....................... 51 Chief Executive Officer and 1993
President of M/I Financial and
Senior Vice President
Lloyd T. Simpson.................... 56 President, Columbus Region 1984
BUSINESS EXPERIENCE
Paul S. Coppel joined the Company in January 1994 as Senior Vice
President/General Counsel. Mr. Coppel became Secretary in February 1995 and
President Land Operations in January 1999. He became Secretary of M/I Financial
in August 1995.
Paul S. Rosen joined the Company in August 1993 as Vice President of
Mortgage Operations for M/I Financial. Mr. Rosen became Chief Executive Officer
of M/I Financial in February 1994, President of M/I Financial in August 1995 and
Senior Vice President of the Company in February 1999.
Lloyd T. Simpson joined the Company in 1984 as Vice President/Regional
Manager-Ohio Region. Mr. Simpson became Vice President/Regional Manager of the
Columbus Region in February 1996 and President of the Columbus Region in
November 1996. He also served as Senior Vice President from September 1993 until
November 1996.
6
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of the Record Date, the number and
percentage of the outstanding Common Shares held by each person who, to the
knowledge of the Company, beneficially owns more than five percent of the
outstanding Common Shares, by each of the Company's directors, nominees and
Named Executive Officers (as defined below) and by all of the directors,
nominees and executive officers of the Company as a group. Except as set forth
in the footnotes to the table, the shareholders have sole voting and investment
power over such Common Shares.
NUMBER OF
COMMON PERCENT
NAME OF BENEFICIAL OWNER SHARES(1) OF CLASS
------------------------ ------------- --------
Kerrii B. Anderson.......................................... 15,321(2) (3)
Friedrich K. M. Bohm........................................ 12,776(4) (3)
Phillip G. Creek............................................ 19,257(5) (3)
Thomas D. Igoe.............................................. 2,562(4) (3)
Jeffrey H. Miro............................................. 6,649(4) (3)
Irving E. Schottenstein..................................... 550,263(6) 7.3%
Robert H. Schottenstein..................................... 447,277(7) 5.9%
Steven Schottenstein........................................ 460,894(8) 6.1%
Lewis R. Smoot, Sr. ........................................ 7,706(4) (3)
Norman L. Traeger........................................... 13,386(4) (3)
All directors, nominees and executive officers as a group(10
persons).................................................. 1,536,091 20.3%
FMR Corp. .................................................. 1,102,600(9) 14.8%
82 Devonshire Street
Boston, Massachusetts 02109
Dimensional Fund Advisors Inc. ............................. 722,550(10) 9.7%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
Linda S. Fisher............................................. 509,300(11) 6.8%
11221 Grandon Ridge Circle
Cincinnati, Ohio 45249
Gary L. Schottenstein....................................... 409,300(12) 5.4%
2077 Parkhill Drive
Columbus, Ohio 43209
---------------
(1) The amounts shown include 1,504, 5,106, 4,350, 250, 4,049, 26,163, 13,977,
5,794, 5,106 and 5,106 Common Shares held by Kerrii B. Anderson, Friedrich
K. M. Bohm, Phillip G. Creek, Thomas D. Igoe, Jeffrey H. Miro, Irving E.
Schottenstein, Robert H. Schottenstein, Steven Schottenstein, Lewis R.
Smoot, Sr. and Norman L. Traeger, respectively, under the terms of the
Executives' Deferred Compensation Plan or the Directors Deferred
Compensation Plan, as the case may be. Under the terms of the Executives'
Deferred Compensation Plan and the Directors Deferred Compensation Plan, a
participant does not beneficially own, or have voting or investment power
with respect to, Common Shares acquired under the plan, until such Common
Shares are distributed pursuant to terms of the plan.
(2) Includes 200 Common Shares that underlie exercisable stock options.
(3) Less than one percent of the outstanding Common Shares.
(4) Includes 600 Common Shares that underlie exercisable stock options.
(5) Includes 9,100 Common Shares that underlie exercisable stock options.
7
(6) Irving E. Schottenstein is the trustee of (i) the Irving and Frankie
Schottenstein Trust which holds 453,300 Common Shares, and (ii) the Steven
Schottenstein Descendants Trust which holds 54,800 Common Shares, and
exercises all rights with regard to such Common Shares. Does not include an
aggregate of 1,730,800 Common Shares which are held in trust by Irving E.
Schottenstein, as trustee, pursuant to trust agreements dated August 1986,
as amended, for the benefit of his four children: Robert H. Schottenstein
(405,000 shares), Steven Schottenstein (430,200 shares), Gary L.
Schottenstein (405,600 shares) and Linda S. Fisher (490,000 shares). As
trustee, Irving E. Schottenstein is empowered to exercise all rights with
regard to such Common Shares and, with the agreement of each beneficiary,
amend each trust. Includes 16,000 Common Shares that underlie exercisable
stock options.
(7) 405,000 of these Common Shares are held in trust by Irving E. Schottenstein
in accordance with note 6 above. 2,800 of these Common Shares are held by
Robert H. Schottenstein individually. 16,500 of these Common Shares are
held in trust by Robert H. Schottenstein, as trustee, for the benefit of
his children pursuant to trust agreements dated December 22, 1994. As
trustee, Robert H. Schottenstein is empowered to exercise all rights with
regard to such Common Shares and may be deemed the beneficial owner of such
Common Shares. Includes 9,000 Common Shares that underlie exercisable stock
options.
(8) 430,200 of these Common Shares are held in trust by Irving E. Schottenstein
in accordance with note 6 above. 8,400 of these Common Shares are held by
Steven Schottenstein individually. 16,500 of these Common Shares are held
in trust by Steven Schottenstein, as trustee, for the benefit of his
children pursuant to trust agreements dated December 22, 1994. As trustee,
Steven Schottenstein is empowered to exercise all rights with regard to
such Common Shares and may be deemed the beneficial owner of such Common
Shares.
(9) Based on information set forth in a Schedule 13G dated February 14, 2002,
which was filed on behalf of FMR Corp., a parent holding company, and
certain other Fidelity entities.
(10) Based on information set forth in a Schedule 13G dated January 30, 2002,
which was filed by Dimensional Fund Advisors Inc., a registered investment
advisor, on behalf of its advisory clients.
(11) 490,000 of these Common Shares are held in trust by Irving E. Schottenstein
in accordance with note 6 above. 2,800 of these Common Shares are held by
Linda S. Fisher individually. 16,500 of these Common Shares are held in
trust by Mrs. Fisher, as trustee, for the benefit of her children pursuant
to trust agreements dated December 22, 1994. As trustee, Mrs. Fisher is
empowered to exercise all rights with regard to such Common Shares and may
be deemed the beneficial owner of such Common Shares.
(12) 405,600 of these Common Shares are held in trust by Irving E. Schottenstein
in accordance with note 6 above. Includes 3,700 Common Shares that underlie
exercisable stock options.
The address of Irving E. Schottenstein, Robert H. Schottenstein and Steven
Schottenstein is 3 Easton Oval, Columbus, Ohio 43219.
8
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the annual compensation and other
compensation for each of the fiscal years ended December 31, 2001, 2000 and 1999
for the Company's Chief Executive Officer and for each other executive officer
of the Company (the "Named Executive Officers"):
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION AWARDS
--------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION OPTIONS COMPENSATION
POSITION YEAR ($) ($) ($) (#) ($)(1)(2)
------------------ ---- ------- --------- ------------ ------------ ------------
Irving E. Schottenstein 2001 575,000 2,875,000(3)(4) 98,241(5) 25,000 70,965
Chief Executive Officer 2000 575,000 2,812,210(3)(6) 119,855(5) 12,500 70,923
1999 575,000 2,875,000(3)(7) 85,659(5) 10,000 70,874
Robert H. Schottenstein 2001 376,923 1,400,000(3)(4) 58,299(5) 20,000 61,748
President 2000 325,000 1,097,135(3)(6) 60,648(5) 7,500 61,554
1999 308,654 1,137,500(3)(7) 59,654(5) 5,000 61,642
Steven Schottenstein 2001 362,308 1,365,000(3)(4) 2,651 20,000 49,648
Chief Operating Officer 2000 300,000 1,012,740(3)(6) 2,505 7,500 49,454
1999 300,000 1,050,000(3)(7) 2,329 5,000 49,542
Phillip G. Creek 2001 225,000 443,750(3)(4) 901 3,500 19,809
Senior Vice President, 2000 207,692 429,872(3)(6) 859 2,000 19,615
Chief Financial Officer and
Treasurer(8)
---------------
(1) The amounts shown include: (i) the individual's share of the Company's
discretionary contribution under the Company's 401(k) plan, and (ii) the
term and the non-term portion of the premium for a split-dollar life
insurance policy for such individual, each as detailed in note 2 below. In
addition, for each of the Named Executive Officers other than Irving E.
Schottenstein, such amounts include long-term disability plan premiums of
$1,468 for the 1999 fiscal year, $1,331 for the 2000 fiscal year and $1,483
for the 2001 fiscal year.
(2) "All Other Compensation" for each of the Named Executive Officers includes
the individual's share of the Company's discretionary contribution for the
1999, 2000 and 2001 fiscal years under the Company's 401(k) plan in the
amounts of $3,374, $3,423 and $3,465, respectively. "All Other
Compensation" for Irving E. Schottenstein, Robert H. Schottenstein and
Steven Schottenstein for the 1999 fiscal year also includes (i) the term
portion of the premium for a split-dollar life insurance policy of $9,575,
$3,520 and $2,640, respectively, and (ii) the non-term portion of the
premium for a split-dollar life insurance policy of $57,925, $53,280 and
$42,060, respectively. "All Other Compensation" for Irving E.
Schottenstein, Robert H. Schottenstein, Steven Schottenstein and Phillip G.
Creek for the 2000 and 2001 fiscal years also includes (iii) the term
portion of the premium for a split-dollar life insurance policy of $10,025,
$3,720, $2,840 and $983, respectively, for the 2000 fiscal year, and
$11,210, $3,960, $3,040 and $1,044, respectively, for the 2001 fiscal year,
and (iv) the non-term portion of the premium for a split-dollar life
insurance policy of $57,475, $53,080, $41,860 and $13,878, respectively,
for the 2000 fiscal year, and $56,290, $52,840, $41,660 and $13,817,
respectively, for the 2001 fiscal year.
(3) Represents amounts accrued pursuant to the Executive Officers Compensation
Plan and approved by the Executive Officer Compensation Committee. The
amounts shown for Phillip G. Creek also include a $50,000 discretionary
bonus awarded to Mr. Creek in 2000 in consideration for him assuming the
duties of the Chief Financial Officer and in 2001 based on his performance
as the Chief Financial Officer.
9
(4) Pursuant to the terms of the Company's Executives' Deferred Compensation
Plan, which was adopted in 1998, each of the Company's executive officers
has the right to allocate a portion of his bonus to Common Shares. Each
participant will not beneficially own Common Shares acquired under the plan
until such Common Shares are distributed pursuant to the terms of the plan.
With respect to Irving E. Schottenstein, the amount shown includes $143,750
allocated to Common Shares (3,761 shares). With respect to Robert H.
Schottenstein, the amount shown includes $70,000 allocated to Common Shares
(1,831 shares). With respect to Steven Schottenstein, the amount shown
includes $68,250 allocated to Common Shares (1,785 shares). With respect to
Phillip G. Creek, the amount shown includes $44,375 allocated to Common
Shares (1,161 shares).
(5) With respect to Irving E. Schottenstein, the amounts shown include $84,071,
$101,080 and $63,560 for the 1999, 2000 and 2001 fiscal years,
respectively, for personal use of Company property. With respect to Robert
H. Schottenstein, the amounts shown include $54,880, $57,399 and $43,360
for the 1999, 2000 and 2001 fiscal years, respectively, for personal use of
Company property.
(6) With respect to Irving E. Schottenstein, the amount shown includes $140,610
allocated to Common Shares (7,388 shares) pursuant to the Executives'
Deferred Compensation Plan. With respect to Robert H. Schottenstein, the
amount shown includes $54,857 allocated to Common Shares (2,882 shares)
pursuant to the Executives' Deferred Compensation Plan. With respect to
Steven Schottenstein, the amount shown includes $50,637 allocated to Common
Shares (2,660 shares) pursuant to the Executives' Deferred Compensation
Plan. With respect to Phillip G. Creek, the amount shown includes $42,987
allocated to Common Shares (2,258 shares) pursuant to the Executives'
Deferred Compensation Plan.
(7) With respect to Irving E. Schottenstein, the amount shown includes $143,750
allocated to Common Shares (8,424 shares) pursuant to the Executives'
Deferred Compensation Plan. With respect to Robert H. Schottenstein, the
amount shown includes $56,875 allocated to Common Shares (3,333 shares)
pursuant to the Executives' Deferred Compensation Plan. With respect to
Steven Schottenstein, the amount shown includes $52,500 allocated to Common
Shares (3,077 shares) pursuant to the Executives' Deferred Compensation
Plan.
(8) Phillip G. Creek was appointed the Chief Financial Officer and an executive
officer of the Company effective September 1, 2000.
On August 9, 1994, the Company and Irving E. Schottenstein entered into an
employment agreement. On November 14, 2001, the Company, with the approval of
the Board, and Mr. Schottenstein amended the employment agreement. Under the
amended agreement, in the event Mr. Schottenstein becomes disabled, he will
receive disability payments from the Company for a period of up to three years
in an annual amount equal to $1,000,000. In addition, under the amended
agreement, the Company has agreed to maintain a split-dollar life insurance
policy for Mr. Schottenstein in an amount not less than $1,500,000, and, upon
the death of Mr. Schottenstein, pay to Mr. Schottenstein's designated
beneficiary, $1,000,000 per year for a period of three years (such amount
payable on death to be reduced by any disability payments made by the Company to
Mr. Schottenstein under the amended agreement).
10
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth the nonqualified stock options granted by
the Board during the 2001 fiscal year to each of the Named Executive Officers:
INDIVIDUAL GRANTS (1) POTENTIAL
---------------------------------------------------- REALIZABLE VALUE AT
NUMBER ACCRUED ANNUAL RATES
OF OF STOCK PRICE
SECURITIES % OF TOTAL APPRECIATION
UNDERLYING OPTIONS GRANTED FOR OPTION TERM
OPTIONS TO EMPLOYEES IN EXERCISE ---------------------
GRANTED FISCAL YEAR PRICE EXPIRATION 5% 10%
NAME (#) (%) ($/SH) DATE ($) ($)
---- ---------- --------------- -------- ---------- --------- ---------
Irving E. Schottenstein 25,000 21.60 32.75 2/13/11 514,907 1,304,877
Robert H. Schottenstein 20,000 17.28 32.75 2/13/11 411,926 1,043,901
Steven Schottenstein 20,000 17.28 32.75 2/13/11 411,926 1,043,901
Phillip G. Creek 3,500 3.02 32.75 2/13/11 72,087 182,683
---------------
(1) The nonqualified stock options granted by the Board are scheduled to vest
at a rate of 20% per year over the first five years and to lapse after ten
years unless sooner exercised or forfeited. All stock options were granted
at the closing market price on the date of grant.
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
The following table sets forth information with respect to options
exercised during the 2001 fiscal year and unexercised nonqualified stock options
held as of the end of the 2001 fiscal year by each of the Named Executive
Officers.
NUMBER OF
NUMBER SECURITIES UNDERLYING VALUE OF UNEXERCISED
OF SECURITIES UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
UNDERLYING AT FISCAL YEAR END AT FISCAL YEAR END
OPTIONS VALUE (#)(1) ($)
EXERCISED REALIZED --------------------------- ---------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------- -------- ----------- ------------- ----------- -------------
Irving E. Schottenstein -- -- 16,000 31,500 454,320 738,193
Robert H. Schottenstein 26,000 564,120 9,000 24,500 227,493 552,553
Steven Schottenstein 26,000 689,868 9,000 24,500 227,493 552,553
Phillip G. Creek 10,000 327,274 9,100 4,900 315,838 118,161
---------------
(1) The nonqualified stock options granted by the Board are scheduled to vest at
a rate of 20% per year over the first five years and to lapse after ten
years unless sooner exercised or forfeited.
COMPENSATION OF DIRECTORS
Each of the outside directors on the Board (Kerrii B. Anderson, Friedrich
K. M. Bohm, Thomas D. Igoe, Jeffrey H. Miro, Lewis R. Smoot, Sr. and Norman L.
Traeger) receives 250 Common Shares per quarter, pursuant to the Directors
Deferred Compensation Plan, as payment for his or her service on the Board and
any of its committees. However, no outside director is entitled to receive such
quarterly compensation unless he or she participates, in person or
telephonically, in the regularly scheduled meeting of the Board and each
committee of which he or she is a member held during the applicable quarter. In
addition, each outside director receives 250 Common Shares for each special
meeting of the Board or any of its committees in which such outside director
participates, in person or telephonically. During the 2001 fiscal year, each of
the outside directors also received an option to purchase 1,000 Common Shares
pursuant to the Company's stock option plan.
11
COMPENSATION COMMITTEE AND EXECUTIVE OFFICER COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The Compensation Committee with respect to the 2001 fiscal year was
comprised of nine members: Kerrii B. Anderson, Friedrich K. M. Bohm, Thomas D.
Igoe, Jeffrey H. Miro, Irving E. Schottenstein, Robert H. Schottenstein, Steven
Schottenstein, Lewis R. Smoot, Sr. and Norman L. Traeger. Irving E.
Schottenstein, Robert H. Schottenstein and Steven Schottenstein are executive
officers of the Company. During the 2001 fiscal year, there were no interlocking
relationships between any executive officers of the Company and any entity whose
directors or executive officers served on the Board or the Compensation
Committee. On August 13, 2001, Irving E. Schottenstein, Chairman and Chief
Executive Officer of the Company, borrowed $300,000 from the Company. On
December 20, 2001, Mr. Schottenstein repaid such indebtedness with interest
thereon at the prime rate.
The Executive Officer Compensation Committee with respect to the 2001
fiscal year was comprised of five members: Friedrich K. M. Bohm, Thomas D. Igoe,
Jeffrey H. Miro, Lewis R. Smoot, Sr. and Norman L. Traeger. None of such members
is or was formerly an officer or employee of the Company. During the 2001 fiscal
year, there were no interlocking relationships between any executive officers of
the Company and any entity whose directors or executive officers served on the
Board or the Executive Officer Compensation Committee.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Ownership of, and transactions in, the Common Shares of the Company by
executive officers, directors and persons who own more than ten percent of the
Common Shares are required to be reported to the Commission pursuant to Section
16 of the Securities Exchange Act of 1934, as amended. Based solely on a review
of the copies of reports furnished to the Company and representations of certain
executive officers and directors, the Company believes that during the 2001
fiscal year its executive officers, directors and greater than ten percent
beneficial owners complied with such requirements.
COMPENSATION COMMITTEE AND EXECUTIVE OFFICER COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
General. In 2001, the Executive Officer Compensation Committee reviewed and
determined the compensation for the Chief Executive Officer and for each of the
other executive officers of the Company. The Compensation Committee reviewed the
Company's 401(k) plan with respect to investment selections, returns, audit
results and the Company's discretionary contributions. The Compensation
Committee also reviewed all stock option awards granted by the Company.
The Company's executive compensation program is intended to serve four
primary objectives: (i) attract and retain qualified executives to manage the
Company's business; (ii) provide executives with incentives to accomplish the
Company's business objectives and strategy and meet specific performance goals;
(iii) encourage stock ownership by executives in order to enhance mutuality of
interest with the Company's shareholders; and (iv) maximize shareholder value.
The Executive Officer Compensation Committee and the Compensation Committee
believe that the Company's executive compensation program promotes each of these
objectives. Additionally, the Executive Officer Compensation Committee and the
Compensation Committee believe that the executive compensation program fosters
long-term growth and accountability for performance.
Elements of Compensation. Under the Company's executive compensation
program, each of the executive officers of the Company receives compensation in
the form of: (i) a base salary; (ii) an annual performance bonus; and (iii)
stock options. The Company's current policy is not to provide pension or other
retirement plans for the Company's executive officers other than the Company's
401(k) plan.
Under the Company's Executives' Deferred Compensation Plan, each executive
officer has the right to elect to have a portion of his performance bonus
invested in Common Shares, the payment of which is
12
deferred until a future date. The Company believes that the Executives' Deferred
Compensation Plan serves to further align the interests of the executive
officers with the Company's shareholders.
Chief Executive Officer Compensation. The base salary paid to the Chief
Executive Officer in 2001 was commensurate with the base salary paid to chief
executive officers of other publicly traded, national and regional homebuilders.
The performance bonus for the Chief Executive Officer for 2001 was awarded
in accordance with the Company's Executive Officers Compensation Plan, which
plan was approved by the Company's shareholders at the 1999 annual meeting.
Pursuant to the terms of the aforesaid compensation plan, the Executive Officer
Compensation Committee established the Award Formula (as defined in the plan)
and the Performance Goals (also as defined) for the Chief Executive Officer for
2001. The Award Formula was based upon the Company's achievement of Performance
Goals in the following areas: (i) achieving specified levels of net income; (ii)
return on shareholders' equity; and (iii) achieving specified homeowner
satisfaction ratings as measured by homeowner surveys conducted by the Company.
The total amount that could be earned by the Chief Executive Officer was capped
at five times his annual base salary.
In 2001, the Company achieved record net income, return on beginning equity
exceeded 24% and homeowner satisfaction ratings exceeded 99%. As a result, the
Chief Executive Officer earned the maximum performance bonus available in 2001.
The Chief Executive Officer invested a portion of his performance bonus in
Common Shares pursuant to the Executives' Deferred Compensation Plan.
Other Executive Officers' Compensation. The average base salary paid to the
President, the Chief Operating Officer and the Senior Vice President/Chief
Financial Officer in 2001 was commensurate with the base salaries paid to
persons holding comparable positions with other publicly traded, national and
regional homebuilders.
Pursuant to the Executive Officers Compensation Plan, the Executive Officer
Compensation Committee established the Award Formulas and the Performance Goals
for the President, the Chief Operating Officer and the Senior Vice
President/Chief Financial Officer for 2001. The Award Formulas for each of these
executive officers were based upon the Company's achievement of Performance
Goals in the following areas: (i) achieving specified levels of net income; (ii)
return on shareholders' equity; and (iii) achieving specified homeowner
satisfaction ratings as measured by homeowner surveys conducted by the Company.
The total amount that could be earned by each of the President and the Chief
Operating Officer was capped at three and one half times their annual base
salaries. The total amount that could be earned by the Senior Vice President/
Chief Financial Officer was capped at one and three quarters times his annual
base salary.
In 2001, the Company achieved record net income, return on beginning equity
exceeded 24% and homeowner satisfaction ratings exceeded 99%. As a result, the
President, the Chief Operating Officer and the Senior Vice President/Chief
Financial Officer each earned the maximum performance bonus available in 2001.
The President, the Chief Operating Officer and the Senior Vice President/Chief
Financial Officer each invested a portion of his performance bonus in Common
Shares pursuant to the Executives' Deferred Compensation Plan. In 2001, the
Senior Vice President/Chief Financial Officer also received a $50,000
discretionary bonus based on his outstanding performance as the Chief Financial
Officer.
Stock Options. It is the Company's intent to award stock options to the
Company's executive officers in amounts reflecting the financial performance of
the Company, the executive officer's ability to influence the Company's overall
performance and his position. Options are intended to motivate executive
officers to improve the Company's financial results and stock performance and to
retain executive officers. In 2001, the Compensation Committee approved the
award of nonqualified stock options for 68,500 Common Shares at $32.75 per share
(the closing price on the date of grant) to the Named Executive Officers (see
"-- Option Grants in Last Fiscal Year"). The nonqualified stock options vest at
a rate of 20% per year over the first five years and lapse after ten years
unless sooner exercised or forfeited.
Section 162(m) Compliance. Section 162(m) of the Code places certain
restrictions on the amount of compensation in excess of $1,000,000 which may be
deducted for each executive officer. In 1999, the Company adopted the Executive
Officers Compensation Plan and constituted the Executive Officer Compen-
13
sation Committee (which consists solely of outside directors for purposes of
Section 162(m)) to comply with Section 162(m) and to further ensure that
compensation paid to executive officers in excess of $1,000,000 will be fully
deductible. The Company believes that all compensation paid to the executive
officers in excess of $1,000,000 will be fully deductible.
COMPENSATION COMMITTEE: EXECUTIVE OFFICER COMPENSATION COMMITTEE:
Norman L. Traeger (Chairman) Friedrich K. M. Bohm (Chairman)
Kerrii B. Anderson Thomas D. Igoe
Friedrich K. M. Bohm Jeffrey H. Miro
Thomas D. Igoe Lewis R. Smoot, Sr.
Jeffrey H. Miro Norman L. Traeger
Irving E. Schottenstein
Robert H. Schottenstein
Steven Schottenstein
Lewis R. Smoot, Sr.
PERFORMANCE GRAPH
This graph charts the Company's performance in the form of cumulative total
return to shareholders from December 31, 1996 until December 31, 2001 in
comparison to (i) Standard and Poor's 500, and (ii) the cumulative return on the
common stock of five publicly traded peer issuers, including Beazer Homes USA,
Inc., Crossmann Communities, Inc., Hovnanian Enterprises, Inc., MDC Holdings,
Inc. and NVR, Inc. (the "Peer Group"). In 2001, Washington Homes, Inc., which
was formerly included in the Peer Group, merged with and into Hovnanian
Enterprises, Inc.
[PERFORMANCE GRAPH]
Peer Group M/I Schottenstein Homes, Inc.(1) S&P 500
12/31/96 100 100 100
12/31/97 154.13 170.45 133.36
12/31/98 218.88 201.92 171.48
12/31/99 174.04 144.53 207.56
12/31/00 366.69 227.07 188.66
12/31/01 601.75 469.78 166.24
-----------------------------------------------------------------------------
12/31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01
--------------------------------------------------------------------------------------------------------------------
M/I Schottenstein Homes, Inc. (1) 100 170.45 201.92 144.53 227.07 469.78
--------------------------------------------------------------------------------------------------------------------
S&P 500 100 133.36 171.48 207.56 188.66 166.24
--------------------------------------------------------------------------------------------------------------------
Peer Group 100 154.13 218.88 174.04 366.69 601.75
--------------------------------------------------------------------------------------------------------------------
---------------
(1) Assumes that the value of the Common Shares and the indices was 100 on
December 31, 1996 and that all dividends were reinvested.
14
REPORT OF THE AUDIT COMMITTEE
General. In accordance with the Audit Committee 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. During the 2001 fiscal year, the Audit Committee met
four times. In addition, the committee chair, as representative of the Audit
Committee, met quarterly with the Company's senior financial management and
Deloitte & Touche LLP, the Company's independent accountants and auditors, and
discussed the Company's interim financial information prior to public release.
Review and Discussion with Independent Accountants and Auditors. In
fulfilling its oversight responsibility as to the audit process, the Audit
Committee obtained from Deloitte & Touche LLP a formal written statement
describing all relationships between Deloitte & Touche LLP and the Company that
might bear on Deloitte & Touche LLP's independence consistent with Independence
Standards Board Standard No. 1, Independence Discussions with Audit Committees,
discussed with Deloitte & Touche LLP any relationships that may impact Deloitte
& Touche LLP's objectivity and independence and satisfied itself as to Deloitte
& Touche LLP's independence. The Audit Committee also discussed with management,
the internal auditors and Deloitte & Touche LLP the quality and adequacy of the
Company's internal controls. In addition, the Audit Committee reviewed and
discussed with Deloitte & Touche LLP all communications required by generally
accepted auditing standards, including those described in Statement on Auditing
Standards No. 61, Communication with Audit Committees, and, with and without
management present, discussed and reviewed the results of Deloitte & Touche
LLP's examination of the consolidated financial statements. The Audit Committee
also discussed the results of the Company's internal audits conducted throughout
the year.
Review with Management. The Audit Committee reviewed and discussed the
audited consolidated financial statements of the Company as of and for the
fiscal year ended December 31, 2001 with management. Management has the
responsibility for the preparation of the Company's consolidated financial
statements, and Deloitte & Touche LLP has the responsibility for the examination
of those statements.
Audit Fees. The aggregate fees billed for professional services rendered by
Deloitte & Touche LLP for the audit of the Company's annual financial statements
for the 2001 fiscal year and the reviews of the financial statements included in
the Company's Quarterly Reports on Form 10-Q for the 2001 fiscal year
(collectively, the "Audit Services") were $205,000.
Financial Information Systems Design and Implementation Fees. Deloitte &
Touche LLP did not render any professional services described in Paragraph
(c)(4)(ii) of Rule 2-01 of Regulation S-X (17 CFR 210.2-01) (the "Financial
Information Systems Design and Implementation Services") during the 2001 fiscal
year for the Company.
All Other Fees. The aggregate fees billed for services rendered to the
Company by Deloitte & Touche LLP, other than the Audit Services and the
Financial Information Systems Design and Implementation Services, for the 2001
fiscal year (the "Other Services") were $72,000, including audit related
services of $13,000 and non-audit related services of $59,000. The audit related
services include fees for consents and for the audit of the Company's 401(k)
plan, and the non-audit related services include fees for tax compliance and tax
planning.
Conclusion. Based on the reviews and discussions with management and
Deloitte & Touche 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
fiscal year ended December 31, 2001 to be filed with the Commission. The Audit
Committee also determined that the provision of the Other Services was
compatible with maintaining Deloitte & Touche LLP's independence.
AUDIT COMMITTEE:
Thomas D. Igoe (Chairman)
Kerrii B. Anderson
Friedrich K. M. Bohm
Lewis R. Smoot, Sr.
Norman L. Traeger
15
SHAREHOLDER PROPOSALS
Any proposals of shareholders which are intended to be presented at the
2003 Annual Meeting of Shareholders must be received by the Company at its
principal executive offices by November 13, 2002 to be eligible for inclusion in
next year's proxy statement. Such proposals may be included in next year's proxy
statement if they comply with certain rules and regulations promulgated by the
Commission. If a shareholder intends to present a proposal at the 2003 Annual
Meeting of Shareholders, but has not sought the inclusion of such a proposal in
the Company's proxy statement, such proposal must be received by the Company at
its principal executive offices by January 27, 2003, or the Company's management
proxies will be entitled to use their discretionary voting authority should such
proposal then be raised, without any discussion of the matter in the Company's
proxy statement.
EXPENSES OF SOLICITATION
Other than the Internet and telephone service access fees or charges
described above, the entire expense of this solicitation of proxies, including
preparing, assembling, printing and mailing the proxy form and the form of
material used in the solicitation of proxies will be paid by the Company.
Proxies may be solicited personally or by telephone, mail or telegraph. Officers
or employees of the Company may assist with personal or telephone solicitations
and will receive no additional compensation. The Company will also reimburse
brokerage houses and other nominees for their reasonable expenses in forwarding
proxy materials to beneficial owners of the Common Shares.
OTHER MATTERS
The Board knows of no other matters to be presented at the Annual Meeting.
If any other matter is properly brought before the Annual Meeting, the persons
named in the accompanying proxy card will vote and act according to their best
judgments in light of the conditions then prevailing.
You are urged to sign, date and return the enclosed proxy card in the
envelope provided, or alternatively, vote your proxy electronically via the
Internet or telephonically. No postage is required if the envelope provided is
mailed from within the United States. If you subsequently decide to attend the
Annual Meeting and wish to vote your Common Shares in person, you may do so.
Your cooperation in giving this matter your prompt attention is appreciated.
By Order of the Board of Directors,
/s/ Paul S. Coppel
Paul S. Coppel,
Secretary
16
[This Page Intentionally Left Blank]
[This Page Intentionally Left Blank]
SKU# 4470-PS-02
DETACH HERE
PROXY
M/I SCHOTTENSTEIN HOMES, INC.
3 EASTON OVAL, COLUMBUS, OHIO 43219
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING OF SHAREHOLDERS, APRIL 18, 2002
The undersigned hereby appoints Irving E. Schottenstein and Paul S. Coppel
and each of them, proxies of the undersigned, with full power of substitution,
to attend the Annual Meeting of Shareholders to be held on April 18, 2002, or
any adjournment thereof, and to vote all Common Shares of M/I Schottenstein
Homes, Inc. which the undersigned is entitled to vote at such Annual Meeting or
at any adjournment thereof as set forth below:
THIS PROXY WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTIVE IS MADE, THE COMMON
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF THE NAMED
NOMINEES FOR DIRECTORS AND "FOR" THE PROPOSAL TO RATIFY THE APPOINTMENT OF
DELOITTE & TOUCHE LLP AS THE INDEPENDENT ACCOUNTANTS AND AUDITORS FOR FISCAL
YEAR 2002. IF ANY OTHER MATTERS ARE PROPERLY BROUGHT BEFORE THE ANNUAL MEETING
OR ANY ADJOURNMENT THEREOF, OR IF A NOMINEE FOR ELECTION AS A DIRECTOR NAMED IN
THE PROXY STATEMENT IS UNABLE TO SERVE OR FOR GOOD CAUSE WILL NOT SERVE, THE
COMMON SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN THE DISCRETION OF THE
PROXIES ON SUCH MATTERS OR FOR SUCH SUBSTITUTE NOMINEE(S) AS THE DIRECTORS MAY
RECOMMEND.
The undersigned hereby acknowledges receipt of the Notice of the Annual
Meeting of Shareholders, dated March 13, 2002, the Proxy Statement furnished
therewith, and the Annual Report of M/I Schottenstein Homes, Inc. for the fiscal
year ended December 31, 2001. Any proxy heretofore given to vote the Common
Shares which the undersigned is entitled to vote at the Annual Meeting of
Shareholders is hereby revoked.
----------- -----------
SEE REVERSE PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY SEE REVERSE
SIDE IN THE ENCLOSED ENVELOPE. SIDE
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FOLLOW THESE FOUR EASY STEPS: FOLLOW THESE FOUR EASY STEPS:
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STATEMENT AND PROXY CARD. STATEMENT AND PROXY CARD.
2. CALL THE TOLL-FREE NUMBER 2. GO TO THE WEBSITE
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THIS EXAMPLE
1. To elect the nominees named below as 2. To ratify the appointment of FOR AGAINST ABSTAIN
directors. Deloitte & Touche LLP as the
independent accountants and [ ] [ ] [ ]
NOMINEES: (01) Phillip G. Creek, auditors for fiscal
(02) Irving E. Schottenstein, year 2002.
(03) Norman L. Traeger
FOR WITHHELD
[ ] ALL [ ] FROM ALL
NOMINEES NOMINEES
______________________________________
[ ] For all nominees except as noted above
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
Please sign exactly as your name or names appear hereon. Joint
owners should each sign. Executors, administrators, trustees,
guardians and others should give their full title. Corporations and
partnerships should sign in their full name by president or other
authorized person.
Signature: _______________________________ Date: __________ Signature: _______________________________ Date: __________