Exhibit 10.1

SEPARATION AGREEMENT

This Separation Agreement (the “Agreement”) is made by and between Steven
Schottenstein (“Executive”) and M/I Homes, Inc., an Ohio corporation (the
“Company”).

WHEREAS, Executive has been employed by the Company as its Chief Operating
Officer (and in this capacity holds other various positions with the Company and
its affiliates), has held various positions as a director, officer and/or
manager with the Company’s subsidiaries and affiliates, is a trustee of the M/I
Homes Foundation (the “M/I Foundation”), and is a member of the Board of
Directors of the Company (the “Board”);

WHEREAS, the parties acknowledge that Executive’s employment with the Company
will terminate, effective July 21, 2006 (the “Separation Date”); that he has
resigned from his position as a trustee of the M/I Foundation and from all
positions as a director, officer and/or manager of each of the Company’s
subsidiaries and affiliates effective as of the Announcement Date; and that he
will resign his position as a member of the Board effective as of the Separation
Date;

WHEREAS, the parties wish to define the terms and conditions of Executive’s
separation from service with the Company;

NOW, THEREFORE, in exchange for and in consideration of the following mutual
covenants and promises, the undersigned parties, intending to be legally bound,
hereby agree as follows:

1. Separation. The Company and Executive publicly announced Executive’s
separation on June 15, 2006 (the “Announcement Date”), and the parties agree
that Executive shall formally separate from service with the Company and each of
its subsidiaries and affiliates effective as of the Separation Date and shall
resign from the Board effective as of the Separation Date. On the Separation
Date, (a) Executive’s employment with the Company and all further compensation
and remuneration of Executive and all eligibility of Executive under Company
benefit plans shall terminate, except as otherwise provided in this Agreement or
by applicable law and (b) Executive shall resign from the Board. Executive shall
receive all compensation and benefits to which he is entitled as an employee of
the Company until the Separation Date.

2. Separation Payments and Benefits. In connection with his separation of
service from the Company, Executive and Company hereby agree to specific terms
and obligations:

(a) Executive shall receive severance pay in the gross amounts as follows:

(i) $974,000 (which is equal to the Executive’s average base salary for the
years 2003, 2004 and 2005, times two); plus

(ii) $3,334,000 (which is equal to the Executive’s average annual bonus for the
years 2003, 2004 and 2005, times two); plus

(iii) an amount equal to the pro rata portion of the 2006 Annual Bonus to which
Executive would have been entitled had he remained employed by the Company
through the date such 2006 Annual Bonus is paid, based on the total number of
days from January 1, 2006 through the Separation Date divided by 365, which
amount shall be due if, and only if, Executive would have received his 2006
Annual Bonus if he had remained employed by the Company through the date such
2006 Annual Bonus would have been paid.

The foregoing amounts to total severance of $4,308,000 plus the amount, if any,
calculated pursuant to clause (iii) above (collectively, the “Severance”). In
addition, Executive shall be entitled to keep the compensation he received from
the Announcement Date through the Separation Date. The Severance is intended to
compensate Executive for his long and distinguished service to the Company. The
amounts described in clauses (i), (ii) and (iii) above shall be paid to
Executive, as follows:

(x) Immediate Severance. The Company shall pay Executive $2,154,000 ratably
beginning on the Effective Date and ending on January 31, 2007 in accordance
with the Company’s ordinary payroll practices in effect during such period.

(y) Deferred Severance. The Company shall pay Executive $2,154,000 in equal
monthly installments beginning February 1, 2007 and ending on July 1, 2007.

(z) 2006 Annual Bonus. The amount, if any, calculated pursuant to clause (iii)
above shall be paid on the date(s) the 2006 Annual Bonus, if any, would have
been paid to Executive had Executive remained employed by the Company.

The gross amount of the Severance shall be reduced by ordinary and customary tax
withholdings as required by law.

(b) Within 10 days following the Effective Date (as that term is defined in
paragraph 20 herein), the Company shall pay Executive a lump sum payment of
$22,000, less applicable taxes, to cover the costs of Executive’s medical and
dental insurance benefits for Executive and Executive’s eligible dependents, if
any, under the Consolidated Omnibus Budget Reconciliation Act (COBRA).

(c) With respect to Executive’s 48,000 vested stock options, the Company will,
upon the Effective Date (as that term is defined in paragraph 20), treat the
Executive as retired for purposes of the 1993 Stock Incentive Plan, as amended,
and Executive shall have one year from the Effective Date to exercise such
vested stock options. Executive acknowledges that he has no ownership interest
or exercisable right in or to the 184,000 shares of unvested stock options held
by him prior to the Separation Date.

(d) Executive will be deemed retired as of the Effective Date for purposes of
Executive Deferred Compensation under the Company’s Executive Deferred
Compensation Plan, as amended. The Executive Deferred Compensation will be
distributed on dates designated by the Executive, subject to the terms and
conditions of such plan. The amount of the Executive Deferred Compensation will
be determined by the market value on the distribution dates.

(e) Executive is entitled to any amounts which Executive had previously deferred
(including any interest earned or credited thereon), pursuant to the Company’s
401(k) Plan (payable in accordance with the terms of the plan) and the Company’s
Nonqualified Savings and Supplemental Plan (payable no earlier than the date
that is six (6) months and one day after the Separation Date (or, if earlier,
his date of death), and no later than ten (10) business days thereafter).

3. Automobile. In addition to the consideration described in Paragraph 2 above,
the Company agrees to buy out the lease (dated December 30, 2004) of the Company
automobile currently used by Executive and held by Huntington Leasing Company,
valued at approximately $54,000, and title in said automobile shall be
transferred to Executive.

4. No Mitigation. None of the foregoing benefits provided in Paragraphs 2 or 3
shall (i) be subject to any mitigation obligation on Executive’s part, or (ii)
be terminated or diminished if Executive should accept other employment after
the Separation Date, otherwise in accordance with this Agreement.

5. Totality of Payments. Executive agrees that he is not entitled to any
payments, compensation, stock options, deferred compensation, benefits, or
remuneration of any kind from the Company, other than what he is receiving
through this Agreement, on account of any matter, cause or thing whatsoever
which has occurred prior to the date of his signing this Agreement. 
6. Securities and Tax Considerations.

(a) Internal Revenue Code Section 409A. Notwithstanding anything in this
Agreement to the contrary, the parties hereby agree that it is the intention
that any payments or benefits provided under this Agreement comply in all
respects with Section 409A of the Internal Revenue Code of 1986, as amended
(“Code”) and any guidance issued thereunder. In addition, in the event that
additional guidance with respect to Section 409A of the Code becomes available,
the Company agrees that, upon Executive’s reasonable request, it will amend this
Agreement solely to the extent necessary and appropriate to avoid adverse tax
consequences pursuant to Section 409A of the Code so long as such requested
amendment does not adversely affect the Company.

(b) The Company agrees to cooperate as reasonably necessary and appropriate with
respect to any equity compensation instructions issued by Executive’s broker or
authorized representative, subject in all respects to applicable federal, state,
local or self regulatory entity securities laws, rules and/or regulations.

7. Executive Covenants.

(a) Unauthorized Disclosure. Executive shall not, during the Severance Term and
thereafter, make any Unauthorized Disclosure. For purposes of this Agreement,
“Unauthorized Disclosure” shall mean disclosure by Executive without the prior
written consent of the Board or the Chief Executive Officer of the Company to
any person, of any confidential information relating to the business or
prospects of the Company including, but not limited to, any confidential
information with respect to any of the Company’s customers, products, methods of
distribution, strategies, business and marketing plans and business policies and
practices, litigation strategies or defenses, and plans for new business
concepts, except (i) to the extent disclosure is or may be required by law, by a
court of law or by any governmental agency or other person or entity with
apparent jurisdiction to require him to divulge, disclose or make available such
information or (ii) in confidence to an attorney or other advisor for the
purpose of securing professional advice concerning Executive’s personal matters
provided such attorney or other advisor agrees to observe these confidentiality
provisions. Unauthorized Disclosure shall not include the use or disclosure by
Executive, without consent, of any information known generally to the public or
known within the Company’s trade or industry (other than as a result of
disclosure by him in violation of this Paragraph 7(a)). This confidentiality
covenant has no temporal, geographical or territorial restriction. 

(b) Non-Competition. During the Non-Competition Period described below,
Executive shall not, directly or indirectly, without the prior written consent
of the Company, which consent shall not be unreasonably withheld, own, manage,
operate, join, control, be employed by, or participate in the ownership,
management, operation or control of (as a stockholder, partner, or otherwise)
any corporation, limited liability company, partnership, joint venture, trust or
other entity that engages in the building of more than 100 residential housing
units per year, determined by closings, within any of the Metropolitan
Statistical Areas as the Company or any of its affiliates is now or at such time
engaged in homebuilding operations, provided, however, that the “beneficial
ownership” (as that term is defined in Rule 13d-3 under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)) by Executive, either individually
or as a member of a “group” for purposes of Section 13(d)(3) under the Exchange
Act and the regulations promulgated thereunder, of not more than two percent
(2%) of the voting stock of any of such entity that is publicly held shall not
be a violation of this Agreement.

(c) Non-Interference. During the Non-Competition Period described below,
Executive shall not, either directly or indirectly, alone or in conjunction with
another person, interfere with or harm, or attempt to interfere with or harm,
the relationship of the Company, its subsidiaries and/or affiliates, with any
person who at any time was an employee, customer or supplier of the Company, its
subsidiaries and/or affiliates or otherwise had a business relationship with the
Company, its subsidiaries and/or affiliates. For the avoidance of doubt, this
Paragraph 7(c) does not prohibit Executive from employing his current executive
assistant at any time following the Separation Date.

(d) Non-Competition Period. For purposes of this Agreement, the “Non-Competition
Period” means the one-year period immediately following the Announcement Date.

(e) Remedies. Executive agrees that any breach of the terms of this Paragraph 7
or of Paragraph 9 of this Agreement, would result in irreparable injury and
damage to the Company for which the Company would have no adequate remedy at
law; Executive therefore also agrees that in the event of said breach or any
threat of breach, the Company shall be entitled to an immediate injunction and
restraining order to prevent such breach and/or threatened breach and/or
continued breach by Executive and/or any and all persons and/or entities acting
for and/or with Executive, without having to prove damages, in addition to any
other remedies to which the Company may be entitled at law or in equity. The
terms of this Paragraph 7(e) shall not prevent the Company from pursuing any
other available remedies for any breach or threatened breach hereof, including,
but not limited, to the recovery of damages from Executive. Executive and the
Company further agree that the provisions of Paragraphs 7(b) and 7(c) are
reasonable and that the Company would not have entered into this Agreement but
for the inclusion of such covenants herein. Should a court or arbitrator
determine, however, that any provision of the covenants is unreasonable, either
in period of time, geographical area, or otherwise, the parties hereto agree
that the covenants should be interpreted and enforced to the maximum extent
which such court or arbitrator deems reasonable. The provisions of this
Paragraph shall survive any termination of this Agreement, and the existence of
any claim or cause of action by Executive against the Company, whether
predicated on this Agreement or otherwise, shall not constitute a defense to the
enforcement by the Company of the covenants and agreements of Paragraph 7;
provided, however, that this paragraph shall not, in and of itself, preclude
Executive from defending himself against the enforceability of the covenants and
agreements of Paragraph 7. Nothing in this paragraph shall preclude the Company
either from asserting any claim for damages it may have for a violation of
Paragraph 7 or from seeking equitable relief to enjoin Executive from violating
Paragraph 7.

8. Indemnification.

(a) The Company agrees that if Executive is made a party, or is threatened to be
made a party, to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a “Proceeding”), by reason of the fact that he
is or was a director, officer or employee of the Company or is or was serving at
the request of the Company as a director, officer, manager, member, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether or
not the basis of the Proceeding is Executive’s alleged action in the course of
serving as a director, officer, manager, member, employee or agent, Executive
shall be indemnified and held harmless by the Company to the fullest extent
legally permitted or authorized by the Company’s certificate of incorporation or
bylaws or resolutions of the Company’s Board or, if greater, by the laws of the
State of Ohio, against all cost, expense, liability and loss (including, without
limitation, attorneys’ fees, judgments, fines, ERISA excise taxes or other
liabilities or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by Executive in connection therewith, and such
indemnification shall continue as to Executive even if he has ceased to be a
director, officer, manager, member, employee or agent of the Company or other
entity and shall inure to the benefit of Executive’s heirs, executors and
administrators; provided, however, that nothing herein is intended to indemnify
Executive for any acts committed by Executive which unequivocally fall outside
the scope of his employment with the Company or his membership on the Board. The
Company shall advance to Executive all costs and expenses incurred by him in
connection with a Proceeding within 20 calendar days after receipt by the
Company of a written request for such advance. Such request shall include an
undertaking by Executive to repay the amount of such advance if it shall
ultimately be determined that he is not entitled by law to be indemnified
against such costs and expenses; provided that the amount of such obligation to
repay shall be limited to the after-tax amount of any such advance except to the
extent Executive is able to offset such taxes incurred on the advance by the tax
benefit, if any, attributable to a deduction realized by him for the repayment.

(b) Neither the failure of the Company (including its Board, legal counsel or
shareholders) to have made a determination prior to the commencement of any
Proceeding concerning payment of amounts claimed by Executive under Paragraph
8(a) above that indemnification of Executive is proper because he has met the
applicable standard of conduct, nor a determination by the Company (including
its Board, legal counsel or shareholders) that Executive has not met such
applicable standard of conduct, shall create a presumption in any judicial
proceeding that Executive has not met the applicable standard of conduct.

(c) The Company agrees to continue and maintain a directors’ and officers’
liability insurance policy covering Executive, for a period of five years from
the Separation Date, with terms and conditions no less favorable than the most
favorable coverage then applying to any other senior level executive officer or
director of the Company.

9. Cooperation. Executive shall fully cooperate with the Company in defense of
legal claims asserted against the Company and other matters requiring the
testimony or input and knowledge of Executive, and the Company agrees to
reimburse Executive for reasonable costs and expenses incurred as a result
thereof. Executive agrees that he will not speak or communicate with any party
or representative of any party, who is known to Executive to be either adverse
to the Company in litigation or administrative proceedings or to have threatened
to commence litigation or administrative proceedings against the Company, with
respect to the pending or threatened legal action, unless he is given express
permission to do so by the Company, or is otherwise compelled by law to do so,
and then only after advance notice to the Company.

10. Release of All Claims.

(a) Release of Company by Executive. In consideration of the receipt of the sums
and covenants stated herein, Executive does hereby, on behalf of himself, his
heirs, administrators, executors, agents, and assigns, forever release, requite,
and discharge the Company and its agents, parents, subsidiaries, affiliates,
divisions, officers, managers, directors, employees, predecessors, successors,
and assigns (“Released Parties”), both in their individual and representative
capacities, from any and all charges, claims, demands, judgments, actions,
causes of action, damages, expenses, costs, attorneys’ fees, and liabilities of
any kind whatsoever, whether known or unknown, vested or contingent, in law,
equity or otherwise, which Executive has ever had, now has, or may hereafter
have against said Released Parties for or on account of any matter, cause or
thing whatsoever which has occurred prior to the date of his signing this
Agreement. This release of claims includes, without limitation of the generality
of the foregoing, any and all claims which are related to Executive’s employment
with the Company or any of its subsidiaries, affiliates or predecessors, his
resignation from his officer position with the Company, his resignation from the
Board, his resignation from positions as a director, officer and/or manager of
any of the Company’s subsidiaries or affiliates, and his resignation as a
trustee of the M/I Foundation; and any and all rights which Executive has or may
have had under the following laws: Title VII of the Civil Rights Act of 1964, as
amended by the Equal Employment Opportunity Act of 1972, the Civil Rights Act of
1991; Employee Retirement Income Security Act, 29 U.S.C. §1001 et seq.; the
Americans With Disabilities Act; the Age Discrimination in Employment Act, as
amended; Ohio Revised Code Section 4112.01 et seq.; and all other federal,
state, and local statutes, regulations or public policies, as well as the laws
of contract, torts, and all other subjects; provided, however, that nothing
herein shall be deemed to affect any rights of Executive under this Agreement or
to any pension, employee welfare benefits, stock options, or restricted shares
which were vested on or prior to the Separation Date or Effective Date, as
applicable, and pursuant to this Agreement; and provided further that nothing
herein shall be deemed to affect any rights of Executive to indemnification as
provided under Paragraph 8 above and for such acts otherwise covered under the
terms and conditions of Directors and Officers liability insurance maintained by
Company during the employment of Executive.
(b) Age Discrimination Claims and Older Worker’s Benefit Protection Act Terms.
Executive specifically acknowledges that the release of his claims under this
Agreement includes, without limitation, waiver and release of all claims against
the Company and Released Parties under the federal Age Discrimination in
Employment Act (“ADEA”), and Executive further acknowledges and agrees that:

 
i.
Executive waives his claims under ADEA knowingly and voluntarily in exchange for
the commitments made herein by the Company, and that certain of the benefits
provided thereby constitute consideration of value to which Executive would not
otherwise have been entitled;

 
ii.
Executive was and is hereby advised to consult an attorney in connection with
this Agreement;

 
iii.
Executive has been given a period of 21 days within which to consider the terms
of this Agreement;

 
iv.
Executive may revoke his signature on this Agreement for a period of 7 days
following his execution of this Agreement, rendering the Agreement null and
void, provided that such revocation is in writing delivered to J. Thomas Mason,
Senior Vice President and General Counsel, M/I Homes of Central Ohio LLC, 3
Easton Oval, Suite 500, Columbus, Ohio 43219;

 
v.
this Agreement is written in plain and understandable language which Executive
fully understands; and

 
vi.
this Agreement complies in all respects with Section 7(f) of ADEA and the waiver
provisions of the federal Older Worker Benefit Protection Act.

11. Complete and Absolute Defense. This Agreement constitutes, among other
things, a full and complete release of any and all claims released by either
party, and it is the intention of the parties hereto that this Agreement is and
shall be a complete and absolute defense to anything released hereunder. The
parties expressly and knowingly waive their respective rights to assert any
claims against the other which are released hereunder, and covenant not to sue
the other party or Released Parties based upon any claims released hereunder.
The parties further represent and warrant that no charges, claims or suits of
any kind have been filed by either against the other as of the date of this
Agreement.
12. Non-Admission. It is understood that this Agreement is, among other things,
an accommodation of the desires of each party, and the above-mentioned payments
and covenants are not, and should not be construed as, an admission or
acknowledgment by either party of any liability whatsoever to the other party or
any other person or entity.

13. Return of Property. Except as provided below, the Company acknowledges that
Executive has returned to the Company all Company documents and property in his
possession or control including, but not limited to, Personal Computer(s) and
all Software, Security Keys and Badges, Price Lists, Supplier and Customer
Lists, Files, Reports, all correspondence both internal and external (memoranda,
letters, quotes, etc.), Business Plans, Budgets, Designs, and any and all other
property of the Company; and the Company shall promptly return to Executive his
personal property and files; provided that Executive is expressly permitted to
retain, and assume ownership of, (a) his Company-provided cell phone (together
with rights to the use of the cell phone number at Executive’s sole expense) and
BlackBerry device and (b) the furniture in Executive’s office; and provided
further that Executive is expressly permitted to retain any documents and
property necessary for Executive’s service as a director of the Company.

14. Knowing and Voluntary Execution. Each of the parties hereto further states
and represents that he or it has carefully read the foregoing Agreement,
consisting of 10 pages, and knows the contents thereof, and that he or it has
executed the same as his or its own free act and deed. Executive further
acknowledges that he has been and is hereby advised to consult with an attorney
concerning this Agreement and that he had adequate opportunity to seek the
advice of legal counsel in connection with this Agreement. Executive also
acknowledges that he has had the opportunity to ask questions about each and
every provision of this Agreement and that he fully understands the effect of
the provisions contained herein upon his legal rights.

15. Executed Counterparts. This Agreement may be executed in one or more
counterparts, and any executed copy of this Agreement, including by facsimile,
shall be valid and have the same force and effect as the originally-executed
Agreement.

16. Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Ohio.
17. Modification. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by Executive and the Company.

18. Assignability. Executive’s obligations and agreements under this Agreement
shall be binding on Executive’s heirs, executors, legal representatives and
assigns and shall inure to the benefit of any successors and assigns of the
Company. The Company may assign this Agreement or any of its rights or
obligations arising hereunder to any party, as part of a sale of substantially
all of its assets or other significant change of control.

19. Entire Agreement. This Agreement constitutes the entire agreement between
the parties hereto in respect of the subject matter hereof, and this Agreement
supersedes all prior and contemporaneous agreements between the parties hereto
in connection with the subject matter hereof.

20. Effective Date. This Agreement will become effective on the eighth day
following signature by Executive and the Company (the “Effective Date”), unless
sooner revoked by Executive by written revocation delivered to the Company’s
Senior Vice President and General Counsel.

[signature page to follow]

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly
executed and witnessed.
STEVEN SCHOTTENSTEIN:

/s/ Steven Schottenstein      
Steven Schottenstein

M/I HOMES, INC. 

 
By: /s/ J. Thomas Mason      
J. Thomas Mason, Senior Vice              President and General Counsel