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Exhibit
10.1
CHANGE IN
CONTROL AGREEMENT
This
Change in Control Agreement (the “Agreement”)
between Robert H. Schottenstein (the “Employee”)
and M/I Homes, Inc. (the “Company”) is effective
July 3, 2008 (the “Effective Date”).
WHEREAS , the
Employee currently is employed by the Company, and serves as
the Company’s Chairman, Chief Executive Officer and
President and the Employee is willing to continue to serve in
such capacity for the Company; and
WHEREAS , the
Company desires to provide additional payments and benefits
to the Employee, but only in the event of a Change
in Control of the Company and a termination of the
Employee’s employment as hereinafter
provided;
NOW, THEREFORE ,
in consideration of the mutual promises and agreements
hereinafter set forth, the Company and the Employee agree as
follows:
1.00 DEFINITIONS
When
used in this Agreement, the following terms will have the
meanings given to them in this section unless another meaning
is expressly provided elsewhere in this
Agreement. When applying these definitions, the
form of any term or word will include any of its other forms
and the word “including” will mean
“including, without limitation.”
1.01
Board
. The board of directors of the Company.
1.02
Cause.
[1] Any act of
fraud, intentional misrepresentation, embezzlement or
misappropriation or conversion of the assets or business
opportunities of the Company by the Employee, [2] conviction of
the Employee of a felony, or [3] the
Employee’s [a] willful
refusal to substantially perform assigned duties (other than any
refusal resulting from incapacity due to physical or mental illness
or in the event that the assigned duties include any activities
that are unlawful or would violate acceptable accounting,
securities or other specifically defined business principles),
[b]
willful engagement in gross misconduct materially injurious
to the Company or [c] breach of any
material term of this Agreement. However, Cause will not
arise [i] solely
because the Employee is absent from active employment during
periods of vacation, consistent with the Company’s applicable
vacation policy, or other period of absence initiated by the
Employee and approved by the Company or [ii] due to any
event that constitutes Good Reason.
1.03
Change in
Control. [1] The acquisition by any person, or
more than one person acting as a group, of the ownership of stock
of the Company that, together with the stock held by such person or
group, constitutes more than fifty (50) percent of the total fair
market value or total voting power of the stock of the Company;
[2] the
acquisition by any person, or more than one person acting as a
group, within any twelve (12) month period, of the ownership of the
stock of the Company possessing thirty (30) percent or more of the
total voting power of the stock of the Company; [3] the date a majority
of the members of the Board is replaced during any twelve (12)
month period by directors whose appointment or election is not
endorsed by a majority of the members of the Board prior to the
date of the appointment or election; or [4] the acquisition by
any person, or more than one person acting as a group, within any
twelve (12) month period, of assets from the Company that have a
total gross fair market value equal to or more than forty (40)
percent of the total gross fair market value of all of the assets
of the Company immediately before such acquisition or
acquisitions. The definition of “Change in
Control” in this Section 1.03 shall be interpreted in a
manner that is consistent with the definition of “change in
control event” under Code §409A and the Treasury
Regulations promulgated thereunder.
1.04
Code. The
Internal Revenue Code of 1986, as amended, or any successor
statute.
1.05
Company
. M/I Homes, Inc. or any successor to its business or
assets.
1.06
Date of
Termination. The date of the Employee's
Termination.
1.07
Effective
Period. Except as otherwise provided in this
Agreement, the twenty-four (24) consecutive calendar months
beginning after a Change in Control occurring during the
Term.
1.08
Exchange
Act. The Securities Exchange Act of 1934, as
amended, or any successor statute.
1.09
Good
Reason. The occurrence of any of the following
events during the Effective Period to which the Employee has not
consented in writing:
[1]
Any
breach of this Agreement of any nature whatsoever by or on behalf
of the Company;
[2]
A
reduction in the Employee’s title, duties or
responsibilities, as compared to either [a] the
Employee’s title, duties or responsibilities immediately
before the Change in Control or [b] any enhanced
or increased title, duties or responsibilities assigned to the
Employee after the Change in Control;
[3]
The
permanent assignment to the Employee of duties that are
inconsistent with [a] the
Employee’s office immediately before the Change in Control,
or [b]
any more senior office to which the Employee is promoted
after the Change in Control;
[4]
The
Company [a]
reduces the Employee’s base salary, [b] reduces the annual
cash bonus that the Employee is eligible to receive or changes the
manner in which such annual cash bonus is calculated, or
[c]
materially reduces the aggregate value of the Employee's other
annual compensation and/or fringe benefits;
[5]
A
requirement that the Employee relocate to a principal office or
worksite (or accept indefinite assignment) to a location more than
thirty (30) miles from [a] the principal
office or worksite to which the Employee was assigned immediately
before the Change in Control, or [b] any location
to which the Employee agreed, in writing, to be assigned after the
Change in Control; or
[6]
The
Company attempts to amend or terminate this Agreement without
regard to the procedures described in Section 3.01 or
3.02.
1.10
Notice of
Payment. The written notice by which the Company
apprises the Employee of [1] the amount of
any payment due under this Agreement, [2] the reason
that amount is payable and [3] the basis on
which that payment was calculated.
1.11
Notice of
Termination. A written notice that describes in
reasonable detail the facts and circumstances claimed to provide a
basis for Termination.
1.12
Parties.
The Company and the Employee.
1.13
Term.
The period beginning on the Effective Date and ending
as of the applicable date described in Section 3.02.
1.14
Termination.
Termination of the employee-employer relationship between the
Employee and the Company and any person with whom the Company would
be considered a single employer under Code §§414(b) and
(c); provided that such termination constitutes a “separation
from service” as defined in Treasury Regulation
§1.409A-1(h).
2.00 CHANGE
IN CONTROL PAYMENTS
2.01
Calculation of
Change in Control Payments. If a Change in
Control occurs and, either [1] during the
Effective Period or within six (6) months prior to the Change in
Control, the Company provides the Employee with a Notice of
Termination stating that it is Terminating the Employee’s
employment without Cause, or [2] during
the Effective Period, the Employee provides the Company with a
Notice of Termination stating that the Employee is Terminating his
employment for Good Reason, then the Company will:
[a]
Continue
to pay the Employee’s compensation and other benefits through
the Date of Termination and also will pay the Employee the value of
any unused vacation days determined under the Company’s
personnel policy. The amounts attributable to unused
vacation will be paid no later than thirty (30) days after the
Employee’s Date of Termination (or, in the case in which
employment is Terminated within six (6) months prior to the Change
in Control, within thirty (30) days after the Change in
Control).
[b]
Continue
coverage for the Employee and his dependents, at no cost to either
the Employee or his dependents, in all programs subject to the
benefit provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”) for the period
beginning on the Employee’s Date of Termination (or, in the
case in which employment is Terminated within six (6) months prior
to the Change in Control, the date of the Change in Control) and
ending on the earlier of [i] the date the
Employee and his dependents acquire replacement coverage or
[ii]
the second anniversary of the Employee's Date of Termination
(or, in the case in which employment is Terminated within six (6)
months prior to the Change in Control, the second anniversary of
the Change in Control). In the event the Employee's or
his dependents' participation in the Company's plans is not
permitted, then the Company will provide, through insurance or
otherwise, at no after-tax cost to the Employee or his dependents,
the benefits to which the Employee or his dependents would be
entitled under such plans (such benefits, collectively, the
"Medical Benefits"). Any Medical Benefits to be paid or
provided under this Section 2.01[2][b] after completion of the time
period described in Treasury Regulation §1.409A-1(b)(9)(v)(B)
shall be subject to the following: [ A] the amount of
expenses eligible for reimbursement, or benefits provided, during
any taxable year of the Employee may not affect the expenses
eligible for reimbursement, or benefits to be provided, to the
Employee in any other taxable year; [ B] reimbursement of any
eligible expense must be made on or before the last day of the
Employee's taxable year following the taxable year in which the
expense is incurred; and [ C] the right to
reimbursement or benefits is not subject to liquidation or exchange
for another benefit. In addition, any tax gross-up
payment due to the Employee under this subsection shall be made by
the end of the Employee's taxable year next following the
Employee's taxable year in which the Employee remits the related
taxes.
[c
] Pay
the Employee a lump sum equal to the amount described in this
subsection. This payment will be made no more than sixty
(60) days after the Employee’s Date of Termination (or, in
the case in which employment is Terminated within six (6) months
prior to the Change in Control, within sixty (60) days after the
Change in Control). The amount payable under this
subsection will be the sum of:
[i]
two
hundred ninety-nine (299) percent of the Employee’s base
salary in effect at the Employee’s Date of Termination (or,
if greater, the Employee's base salary in effect immediately prior
to any event described in Section 1.09[4][a]); plus
[ii]
two
hundred ninety-nine (299) percent of the average annual bonus
earned by the Employee during the five (5) fiscal years of the
Company immediately preceding the Employee's Date of Termination;
plus
[iii]
a
pro-rated amount of the annual bonus (if any) which the Employee is
eligible to receive with respect to the fiscal year in which the
Date of Termination occurs calculated based on [A] the Company's
and/or the Employee's achievement (as applicable) of the
performance goals applicable to the Employee's bonus for such
fiscal year assuming that such fiscal year ended on the
last
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