PERFORMANCE-BASED RESTRICTED STOCK AWARD AGREEMENT UNDER THE M/I HOMES, INC.
Exhibit
10.2
PERFORMANCE-BASED
RESTRICTED STOCK
AWARD
AGREEMENT
UNDER
THE
M/I
HOMES, INC.
1993
STOCK INCENTIVE PLAN
AS
AMENDED
This
Performance-Based Restricted Stock Award Agreement (this “Agreement”) is made as
of _______________, 2007 (the “Grant Date”), by and between M/I Homes, Inc., an
Ohio corporation (the “Company”), and _________________________ (the
“Employee”).
WHEREAS,
on November 17, 1998, the Board of Directors of the Company adopted, and on
April 22, 1999, the shareholders approved, the M/I Homes, Inc. 1993 Stock
Incentive Plan as Amended (the “Plan”), pursuant to which awards of restricted
stock, options and stock appreciation rights may be granted to the Company’s
employees, officers, directors, consultants and advisors; and
WHEREAS,
in recognition of the valuable services provided by and to be provided by the
Employee, the Company has determined that its interests will be advanced by
providing the Employee with a proprietary interest in the Company and, as a
shareholder, allowing the Employee to share in the Company’s success and thereby
have added incentive to work effectively for and in the interests of the Company
and its affiliates; and
WHEREAS,
the Employee has acquired and/or shall acquire during his/her employment a
considerable amount of confidential and proprietary information with respect
to
the business of the Company and its affiliates, which confidential and
proprietary information is very valuable to the Company and would be extremely
detrimental to the Company if disclosed or used by the Employee, other than
in
the performance of his/her duties as an employee of the Company and/or its
affiliates; and
WHEREAS,
the Employee desires to participate in the Plan.
NOW,
THEREFORE, in consideration of the mutual promises and of the covenants and
agreements hereinafter set forth and for other good and valuable consideration,
the parties hereby agree as follows:
Section
1. Award
The
Company hereby grants to the Employee, and the Employee hereby accepts from
the
Company, _______________ shares of the Company’s common stock, $.01 par value,
subject to the terms and conditions set forth in the Plan and this Agreement
(the “Restricted Stock”).
Section
2. Transfer
Restrictions and Restriction Period
(a) Transfer
Restrictions.
The
Restricted Stock granted under this Agreement may not be sold, transferred,
pledged, assigned or otherwise alienated or hypothecated by the Employee and
shall be subject to a risk of forfeiture until it vests upon the lapse of the
restriction period described in Section 2(b) (the “Restriction
Period”).
(b) Restriction
Period.
Subject
to the provisions of the Plan and this Agreement, the restrictions on the
Restricted Stock set forth in Section 2(a) shall lapse and the Restricted Stock
shall become fully vested in accordance with the following
provisions:
(i) As
soon
as reasonably practical after the conclusion of the fiscal year of the Company
ending on December 31, 2007, the Committee shall determine the extent to which
the performance measures described in Exhibit A attached hereto and made a
part
of this Agreement (the “Performance Measures”) are satisfied. Based upon this
determination, a percentage (between 0% and 100% as set forth in Exhibit A)
of
the Restricted Stock will remain eligible to vest pursuant to the provisions
of
Section 2(b)(ii) below (the “Available Restricted Stock”). The Restricted Stock,
if any, that does not become Available Restricted Stock pursuant to the
preceding provisions of this Section 2(b)(i) will be deemed forfeited as of
December 31, 2007.
(ii) The
Available Restricted Stock (as determined pursuant to the provisions of Section
2(b)(i) above and the provisions of Exhibit A), if any, will become vested
in
accordance with the following schedule:
(A) One-third
(1/3) of the Available Restricted Stock will vest on the first anniversary
of
the Grant Date;
(B) One-third
(1/3) of the Available Restricted Stock will vest on the second anniversary
of
the Grant Date; and
(C) One-third
(1/3) of the Available Restricted Stock will vest on the third anniversary
of
the Grant Date.
(c) Effect
of Termination of Employment.
If the
Employee’s employment with the Company and its affiliates terminates prior to
January 1, 2008 for any reason, the Restricted Stock shall be forfeited as
of the date of the Employee’s termination of Employment. If the Employee’s
employment with the Company and its affiliates terminates on or after January
1,
2008, but prior to the lapse of the Restriction Period, due to his/her death
or
disability, the Restriction Period shall lapse and the Available Restricted
Stock, if any, shall become fully vested as of the date of his/her termination
of employment. If the Employee’s employment with the Company and its affiliates
terminates on or after January 1, 2008, but prior to the lapse of the
Restriction Period, for any reason other than his/her death or disability,
any
portion of the Available Restricted Stock that is not then vested pursuant
to
the provisions of Section 2(b)(ii) shall be forfeited as of the date of the
Employee’s termination of employment. The Company shall have no obligation to
deliver to the Employee any share certificates representing Available Restricted
Stock until such time as the Committee has determined the extent to which the
Performance Measures have been satisfied in accordance with Section 2(b)(i)
and
Exhibit A. For purposes of this Agreement, the term “disability” shall have the
meaning as ascribed to such term in Section 7(i) of the Plan.
(d) Forfeiture.
To the
extent that any Restricted Stock or Available Restricted Stock is forfeited
pursuant to the provisions of this Section 2, the Employee shall forfeit and
surrender the Restricted Stock or Available Restricted Stock, as of the relevant
date specified in the applicable provisions of this Agreement, for no
consideration.
Section
3. Rights
as a Shareholder
During
the Restriction Period, the Employee shall be entitled to (a) exercise full
voting rights with respect to the Restricted Stock, and (b) receive any cash
dividends, stock dividends, and other distributions paid with respect to the
Restricted Stock; provided,
however, that any cash dividends, stock dividends or other distributions shall
be held in the custody of the Company and subject to the same restrictions
on
transferability and forfeitability that apply to the corresponding Restricted
Stock. All cash dividends, stock dividends and other distributions credited
to
the Employee shall be paid to the Employee as soon as administratively feasible
after the full vesting of the Restricted Stock with respect to which the cash
dividends, stock dividends or other distributions were made.
Section
4. Escrow
of Share Certificates
For
purposes of securing the re-transfer of the Restricted Stock into the name
of
the Company in the event of forfeiture, certificates representing the Restricted
Stock shall be issued in the Employee’s name and shall be held in escrow by, and
subject to a security interest in favor of, the Company until the Restriction
Period lapses or the Restricted Stock is forfeited as provided in this
Agreement. A certificate or certificates representing the Restricted Stock
for
which the Restriction Period has lapsed shall be delivered to the Employee
as
soon as administratively feasible after the Restriction Period has lapsed.
Section
5. Employee
Covenants
In
consideration of the award of the Restricted Stock, the Employee hereby
covenants and agrees as follows:
(a) The
Employee shall not at any time, directly or indirectly, disclose to any other
person, corporation, partnership, proprietorship or other business enterprise,
or otherwise use any “Data of a Confidential Nature” except in the performance
of his/her duties as an employee of the Company and/or an affiliate with respect
to the business of the Company and its affiliates. Employee agrees that all
Company materials evidencing, reflecting or containing “Data of a Confidential
Nature” are and shall remain the sole and exclusive property of the Company and
that upon termination of the Employee’s employment with the Company and its
affiliates, all such materials, including but not limited to, records, drawings,
blueprints, manuals, brochures, pamphlets and all other materials will be
returned to the Company. As used herein “Data of a Confidential Nature”
includes, but is not limited to, cost, price and customer data, any information
on land acquisition programs, information on the Company’s (or any affiliate’s)
plans to acquire new properties or business, information on the Company’s (or
any affiliate’s) compensation programs, information regarding relocations of
existing facilities, new properties or business, major changes in organization,
competitive bid information, prices paid or received for goods or services,
processes, plans, methods of doing business, special needs of customers, or
any
other information or data which if published, released, or otherwise
disseminated might be used to the detriment of the Company, its affiliates
or
their management or affect their ability to transact business.
(b) The
Employee shall not, at any time, directly or indirectly, or in concert with
any
other person, corporation, partnership, proprietorship or other business
enterprise:
(i) induce
or
attempt to induce any employee or agent of the Company or any of its affiliates
to leave the employ of the Company or any of its affiliates; or
(ii) employ
(or engage to act, directly or indirectly, as an independent contractor or
agent) any employee or agent of the Company or any of its affiliates within
six
(6) months following termination of such employee’s employment or of such
agent’s agency with the Company or any of its affiliates.
(c) In
the
event that any covenant set forth in subparagraph (b) shall be determined by
a
court of competent jurisdiction to be unenforceable because it extends over
too
great a period of time, or for any other reason, such covenant shall be
interpreted to extend only over the maximum time period or to the maximum extent
to which they may be enforceable.
The
Employee acknowledges that a breach of the covenants set forth in this Section
5
may cause irreparable damage to the Company and its affiliates, the extent
of
which may be difficult to ascertain, and that the award of damages may not
be
adequate relief. The Employee agrees that, in the event of a breach or
threatened breach of the covenants contained in this Section 5, the Company
may
institute an action to compel the specific performance of such covenants, and
that such remedy shall be cumulative, not exclusive, and shall be in addition
to
any other available remedies.
The
Employee recognizes and understands that the Employee has acquired and/or shall
acquire during his or her employment with the Company and/or its affiliates
a
considerable amount of confidential and proprietary information with respect
to
the business of the Company and its affiliates, which confidential and
proprietary information is very valuable to the Company and would be extremely
detrimental to the Company if disclosed or used by the Employee other than
in
the performance of his or her duties as an employee of the Company and/or its
affiliates. The Employee further acknowledges that the employees of the Company
and its affiliates are an integral part of the Company’s business and, thus, it
is important for the Company and its affiliates to use their maximum efforts
to
prevent the loss of such employees.
Section
6. Miscellaneous
(a) The
Restricted Stock is subject to all of the terms and conditions described in
the
Plan, which are incorporated by reference into and made a part of this
Agreement, and all of the terms and conditions set forth in this Agreement.
In
the event of a conflict between the terms of this Agreement and the terms of
the
Plan, the terms of the Plan shall govern. All capitalized terms that are used
in
this Agreement but are not defined in this Agreement shall have the meanings
ascribed to such terms in the Plan.
(b) No
provision of this Agreement may be modified, waived or discharged unless such
modification, waiver or discharge is agreed to in a writing signed by the
parties to this Agreement.
(c) No
fractional Shares or other securities shall be issued or delivered pursuant
to
this Agreement, and the Committee in its sole discretion shall determine (except
as otherwise provided in the Plan) whether cash, other securities, or other
property shall be paid or transferred in lieu of any fractional Shares or other
securities, or whether such fractional Shares or other securities or any rights
thereto shall be canceled, terminated, or otherwise eliminated.
(d) No
agreement or representations, express or implied, with respect to the subject
matter hereof have been made by either party which are not set forth expressly
in this Agreement or the Plan.
(e) The
granting of Restricted Stock under this Agreement shall not be construed as
granting to the Employee any right with respect to continued employment by
the
Company or its affiliates.
(f) This
Agreement shall be construed and enforced in accordance with and governed by
the
laws of the State of Ohio. Any action brought relating to this Agreement must
be
forumed and venued in a court of appropriate jurisdiction located within
Franklin County, Ohio. The Employee hereby consents to the jurisdiction of
the
courts of Franklin County, Ohio with respect to any action brought against
the
Employee by the Company under this Agreement.
(g) To
the
extent that the receipt of the Restricted Stock or dividends or the lapse of
any
restrictions results in income to the Employee for any federal or state income
tax purposes, no later than the date as of which such tax withholding is first
required, the Employee shall pay to the Company, or make arrangements
satisfactory to the Company regarding the payment of, any federal or state
income tax required to be withheld with respect to such amount. If the Employee
fails to do so, then the Company is authorized to withhold from any cash
remuneration then or thereafter payable to the Employee any tax required to
be
withheld by reason of such resulting compensation income. If the Employee does
not make an election under Section 83(b) of the Internal Revenue Code of 1986,
as amended, with respect to the Restricted Stock, then the Employee shall be
allowed to satisfy the tax withholding obligations arising with respect to
the
Restricted Stock with shares of common stock (including Restricted Stock upon
which the restrictions have lapsed) having a fair market value equal to the
minimum statutory total tax required to be withheld.
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed and
made
effective the day and year first above written.
EMPLOYEE: COMPANY:
M/I
Homes, Inc.
|
By:
|
||||
|
Date:
|
Title:
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EXHIBIT
A
TO
PERFORMANCE-BASED
RESTRICTED STOCK
AWARD
AGREEMENT
UNDER
THE
M/I
HOMES, INC.
1993
STOCK INCENTIVE PLAN
AS
AMENDED
The
Performance Measures to be satisfied as of December 31, 2007 for purposes of
Section 2(b) of the Agreement will be based (1) 60% on the Company’s actual net
income in 2007, (2) 20% on homebuyer satisfaction ratings in 2007 and (3) 20%
on
the Company’s return on beginning equity (“XXX”) in 2007 as
follows:
1. Actual
Net Income
|
%
of 2007 Budgeted Net Income
|
%
of Restricted Stock
Becoming
Available Restricted Stock
|
|
Less
than 40%
|
0%
|
|
40%
|
3%
|
|
100%
|
22%
|
|
150%
|
31%
|
|
200%
|
44%
|
|
900%
|
60%
|
The
percentage of Restricted Stock becoming Available Restricted Stock will increase
proportionately between the percentage levels of 2007 Budgeted Net
Income.
2. Homebuyer
Satisfaction Rating
|
%
of Positive Ratings in 2007
|
%
of Restricted Stock
Becoming
Available Restricted Stock
|
|
Less
than 79%
|
0%
|
|
79%
|
2%
|
|
88%
|
20%
|
The
percentage of Restricted Stock becoming Available Restricted Stock will increase
proportionately between the percentage levels of Positive Ratings in 2007;
provided,
however, that, if the Company’s actual net income in 2007 is less than the
Company’s 2007 budgeted net income, the percentage of Restricted Stock becoming
Available Restricted Stock (as determined by the above table) will be reduced,
on a pro-rata basis, based on the percentage of the 2007 budgeted net income
achieved by the Company. For purposes of this Section 2, “% of Positive Ratings
in 2007” means the percentage of the respondents to the Company’s homeowner
survey who responded “yes” to the question “Would you recommend M/I homes to a
friend or relative?”
3. XXX
|
XXX
%
|
%
of Restricted Stock
Becoming
Available Restricted Stock
|
|
Less
than 10%
|
0%
|
|
10%
|
10%
|
|
20%
|
20%
|
The
percentage of Restricted Stock becoming Available Restricted Stock will increase
proportionately between the percentage levels of XXX in 2007.
