TOLL BROS., INC. NONQUALIFIED DEFERRED COMPENSATION PLAN

1.1

409A BENEFIT means any portion of a Participant’s Account that is attributable to deferrals that were or are made after December 31, 2004, that first became or becomes vested after December 31, 2004, or otherwise is determined to be subject to Code Section 409A.

1.2

ACCOUNT means the balance credited to a Participant’s or Beneficiary’s Plan account, including amounts credited under the Compensation Deferral Account and the Employer Contribution Credit Account and deemed income, gains and losses (as determined by the Employer, in its discretion) credited thereto. A Participant’s or Beneficiary’s Account shall be determined as of the date of reference.

1.3

BENEFICIARY means any person or persons so designated in accordance with the provisions of Article 7.

1.4

BOARD means the Board of Directors of Toll Bros., Inc., a Pennsylvania corporation, and its successors and assigns, or any other corporation or business organization which, with the consent of Toll Bros., Inc., or its successors or assigns, assumes the obligations of Toll Bros., Inc., hereunder.

1.5

CHANGE IN CONTROL means a transaction or series of transactions occurring after the Effective Date, which results in one of the following events: (i) Toll Bros., Inc. is no longer a subsidiary of Toll Brothers, Inc.; (ii) the consummation of a plan or other arrangement pursuant to which Toll Brothers, Inc. will be dissolved or liquidated; (iii) the consummation of a sale or other disposition of all or substantially all of the assets of Toll

Brothers, Inc.; (iv) the consummation of a merger or consolidation of Toll Brothers, Inc. (either directly or through a wholly-owned subsidiary) with or into another corporation, other than, in either case, a merger or consolidation of Toll Brothers, Inc. in which holders of shares of the Toll Brothers, Inc.’s common stock immediately prior to the merger or consolidation will hold at least a majority of the ownership of common stock of the surviving corporation (and, if one class of common stock is not the only class of voting securities entitled to vote on the election of directors of the surviving corporation, a majority of the voting power of the surviving corporation’s voting securities) immediately after the merger or consolidation, which common stock (and, if applicable, voting securities) is to be held in the same proportion as such holders’ ownership of Toll Brothers, Inc. common stock immediately before the merger or consolidation; (v) the date any entity, person or group, (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of 1934, as amended), (other than (A) Toll Brothers, Inc. or any of its subsidiaries or any employee benefit plan (or related trust) sponsored or maintained by Toll Brothers, Inc. or any of its subsidiaries or (B) any person who, on the date the Plan is effective, shall have been the beneficial owner of at least fifteen percent (15%) of the outstanding Toll Brothers, Inc. common stock), shall have become the beneficial owner of, or shall have obtained voting control over, more than fifty percent (50%) of the outstanding shares of Toll Brothers, Inc. common stock; or (vi) the first day after the date this Plan is effective when directors are elected such that a majority of the Board of Directors of Toll Brothers, Inc. shall have been members of the Board of Directors of Toll Brothers, Inc. for less than twenty-four (24) months, unless the nomination for election of each new director who was not a director at the beginning of such twenty-four (24) month period was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period.

1.6

CODE means the Internal Revenue Code of 1986 and the regulations thereunder, as amended from time to time.

1.7

COMMON STOCK means Toll Brothers, Inc.’s voting common stock.

1.8

COMPENSATION means the total current cash remuneration, including regular salary, bonus payments, sales bonus compensation, profit sharing distributions and other compensation as defined by the Plan Committee and paid by the Employer to an Eligible Employee with respect to his or her service for the Employer (as determined by the Employer, in its discretion).

1.9

COMPENSATION DEFERRALS are defined in Section 3.1(a).

1.10

COMPETITION means the Employer’s reasonable determination that the Participant has (i) engaged in, become interested in, directly or indirectly, as a sole proprietor, as a partner in a partnership, or as a substantial shareholder in a corporation, or become associated with, in the capacity of an employee, director, officer, principal, agent, trustee or in any other capacity whatsoever, any enterprise conducted in the geographic area of the business of the Employer which enterprise is, or may be deemed to be, competitive with any business carried on by Toll Brothers, Inc. and its subsidiaries; (ii) solicited, induced or attempted to induce, in connection with any business competitive with that of Toll Brothers, Inc. and its subsidiaries,

any customers or employees of Toll Brothers, Inc. and its subsidiaries to curtail or discontinue their relationship with Toll Brothers, Inc. and its subsidiaries; or (iii) disclosed, communicated or misused, to the detriment or injury of Toll Brothers, Inc. and its subsidiaries, any confidential and proprietary information relating to the business and operations of Toll Brothers, Inc. and its subsidiaries to any person or entity not associated with Toll Brothers, Inc. and its subsidiaries.

1.11

DEFERRAL ELECTION FORM means the form or forms on which a Participant elects to defer Compensation hereunder and on which the Participant makes certain other designations as required thereon.

1.12

DESIGNATION DATE means the date or dates as of which a designation of deemed investment directions by an individual pursuant to Section 4.5, or any change in a prior designation of deemed investment directions by an individual pursuant to Section 4.5, shall become effective. The Designation Dates in any Plan Year shall only be the first day of any calendar month as designated by the Plan Committee.

1.13

EFFECTIVE DATE means the effective date of the Plan, which shall be November 15, 2001.

1.14

ELIGIBLE EMPLOYEE means, for any Plan Year (or applicable portion thereof), a person employed by the Employer where compensation is paid on a United States payroll, who is determined by the Plan Committee in its sole discretion to be a member of a select group of management or highly compensated employees eligible to participate in the Plan. By each November 1, the Plan Committee shall notify those individuals, if any, who will be Eligible Employees for the next Plan Year. If the Plan Committee determines that an individual first becomes an Eligible Employee during a Plan Year, the Plan Committee shall notify such individual of its determination and of the date during the Plan Year on which the individual shall first become an Eligible Employee.

1.15

EMPLOYER means Toll Bros., Inc., a Pennsylvania corporation, and its successors and assigns unless otherwise herein provided, or any other corporation or business organization which, with the consent of Toll Bros., Inc., or its successors or assigns, assumes the Employer’s obligations hereunder, and any other corporation or business organization which agrees, with the consent of Toll Bros., Inc., to become a party to the Plan.

1.16

EMPLOYER CONTRIBUTION CREDIT ACCOUNT is defined in Section 3.2.

1.17

EMPLOYER CONTRIBUTION CREDITS is defined in Section 3.2.

1.18

ENTRY DATE with respect to an individual means 30 days following the date on which the individual first becomes an Eligible Employee.

1.19

FORM AND TIMING OF PAYMENT ELECTION FORM means the form or forms on which a Participant elects the form and timing of the Participant’s Plan benefit.

1.20

PARTICIPANT means any person so designated in accordance with the provisions of Article 2, including, where appropriate according to the context of the Plan, any former employee who is or may become eligible to receive a benefit under the Plan.

1.21

PLAN means this Toll Bros., Inc. Nonqualified Deferred Compensation Plan set forth herein, as amended from time to time.

1.22

PLAN COMMITTEE refers to the officers and employees of the Employer appointed by the Board to administer the Plan on behalf of the Employer.

1.23

PLAN YEAR means the twelve (12) month period ending on December 31 of each year during which the Plan is in effect.

1.24

RETIREMENT AGE with respect to any Participant means the date on which the Participant’s equals or exceeds 61.

1.25

TOTAL AND PERMANENT DISABILITY means the classification of a Participant as "disabled" pursuant to the group long term disability plan maintained by the Employer, or a successor to such plan (or, if there is no such plan, as reasonably determined by the Employer).

1.26

TRUST means the Trust described in Article 11.

1.27

TRUSTEE means the trustee of the Trust described in Article 11.

1.28

VALUATION DATE means the last day of each Plan Year; the date of distribution; or any other date that the Plan Committee, in its sole discretion, designates as a Valuation Date.

2.1

REQUIREMENTS. Every Eligible Employee on the Effective Date shall be eligible to become a Participant on the Effective Date. Every other Eligible Employee shall be eligible to become a Participant on the first Entry Date occurring on or after the date on which he or she becomes an Eligible Employee. No individual shall become a Participant, however, if he or she is not an Eligible Employee on the date his or her participation is to begin.

Participation in the Compensation Deferral portion of the Plan is voluntary. In order to participate in that portion of the Plan, an otherwise Eligible Employee must make written application in such manner as may be required by Section 3.1 and by the Employer and must agree to make Compensation Deferrals as provided in Article 3.

Participation in the Employer Contribution Credit Account portion of the Plan is automatic.

2.2

RE-EMPLOYMENT. If a Participant whose employment with the Employer is terminated is subsequently re-employed, he or she shall become a Participant in accordance with the provisions of Section 2.1.

2.3

CHANGE OF EMPLOYMENT CATEGORY. During any period in which a Participant remains in the employ of the Employer but ceases to be an Eligible Employee, he or she shall not be eligible to make Compensation Deferrals or to receive Employer Contribution Credits hereunder.

3.1

PARTICIPANT CONTRIBUTIONS AND CREDITS.

a)

COMPENSATION DEFERRALS. In accordance with rules established by the Employer, a Participant may elect to defer Compensation which is due to be earned and which would otherwise be paid to the Participant, as a percentage of Compensation or in any fixed periodic dollar amounts designated by the Participant. Amounts so deferred will be considered a Participant’s "Compensation Deferrals." A Participant shall make such an election with respect to the coming twelve (12) month period during the period beginning on January 1 and ending on December 31 of each Plan Year following the initial Plan Year (or during such other period as may be established by the Plan Committee) by completing and delivering to the Plan Committee a Deferral Election Form in a form prescribed by the Plan Committee. Should a Participant become newly eligible during a Plan Year, their election will apply from the date of participation to the next December 31.

Compensation Deferrals shall be made through regular payroll deductions or through an election by the Participant to defer the payment of a bonus, sales bonus compensation or profit sharing distribution not yet payable to him or her at the time of the election, which election shall be set forth on such Participant’s Deferral Election Form. Compensation deferrals will be limited to the extent necessary to satisfy applicable tax withholding or benefit plan contribution requirements. The participant may make an irrevocable election during the Plan Year to cease contributions to the Plan with written notice given to the Committee. The Participant will then be ineligible to return to the Plan until the next Plan Year. The Participant may change his or her regular payroll deduction Compensation Deferral amount as of, and by written notice delivered to the Plan Committee during the periods described in the preceding paragraph, with such change being first effective for Compensation to be earned following the next December 31.

Once made, a Compensation Deferral Election Form with respect to a payroll deduction election shall continue in force indefinitely, until changed as provided above. A Deferral Election Form with respect to deferrals of bonuses, sales bonus compensation, profit sharing distribution proceeds, or other compensation payments shall continue in force only for the Plan Year for which the Deferral Election Form is first effective. Compensation Deferrals shall be deducted by the Employer from the pay of a deferring

Participant and shall be credited to the Compensation Deferral Account of the deferring Participant.

b)

PARTICIPANT COMPENSATION DEFERRAL ACCOUNT. There shall be established and maintained by the Employer a separate Compensation Deferral Account in the name of each Participant to which shall be credited or debited, as applicable: (a) amounts equal to the Participant’s Compensation Deferrals; (b) amounts equal to any deemed earnings and/or losses (to the extent realized, based upon deemed fair market value of the Compensation Deferral; and (c) any withdrawals or distributions therefrom. A Participant shall at all times be 100% vested in amounts credited to his or her Compensation Deferral Account.

c)

COMPLIANCE WITH CODE SECTION 409A. Notwithstanding anything to the contrary in this Section 3.1, any election by a Participant to defer base compensation shall become effective with respect to base compensation that is payable for services performed during a Plan Year only if such election is filed prior to such deadline as is established by the Plan Committee for such deferral elections, which in all cases shall be no later than December 31 of the prior Plan Year, and any such deferral election shall become irrevocable as of such deadline and may not thereafter be modified until December 31 of the Plan Year following the Plan Year in which such election became irrevocable. Any election by a Participant to defer an annual bonus that is determined by reference to the Employer’s fiscal year shall be effective only if such election is filed prior to such deadline as is established by the Plan Committee for such deferral elections, which in all cases shall be no later than October 31 of the Employer’s prior fiscal year, and any such deferral election shall become irrevocable as of such deadline and may not thereafter be modified until October 31 of the Employer’s fiscal year following the fiscal year in which such election became irrevocable. Except as otherwise provided in this Plan or in the Participant’s Deferral Election Form, a Participant’s election to defer Compensation shall remain in effect from one Plan Year to the next, unless otherwise changed by the Participant. The provisions of this Section 3.1(c) are intended to be consistent with the requirements of Treasury Regulation Section 1.409A-2(a). In addition, and notwithstanding any other provisions of this Section 3.1, at the discretion of the Plan Committee, an Eligible Employee may elect to defer Compensation within 30 days after the date the Eligible Employee first becomes eligible to participate in the Plan; provided, however, that any such election shall only be effective with respect to Compensation paid for services to be performed after such 30 day period, consistent with the requirements of Treasury Regulation Section 1.409A-2(a)(7)..

3.2

EMPLOYER CONTRIBUTION CREDITS. Apart from Compensation Deferral Contributions, the Employer shall retain the right to make discretionary contributions for any Participant under this Plan. If applicable, there shall be established and maintained a separate Employer Contribution Credit Account in the name of each Participant which shall be credited or debited, as applicable, (a) amounts equal to the Employer’s Contribution Credits; and (b) any deemed earnings and/or losses (as determined by the Employer, in its discretion) allocated to the Employer Contribution Credit Account. The Participant’s Employer Contribution Credits for a Plan Year, if any, shall be determined by the Employer’s Board of

Directors in its sole discretion. The Employer shall credit such Contributions on behalf of such individuals, in such amounts and with such frequency, as the Board determines in its sole discretion. A Participant shall become vested in amounts (if any) credited to his or her Employer Contribution Credit Account according to any vesting schedule(s) adopted by the Employer’s Board of Directors, in its sole discretion, provided, however, that a Participant shall become fully vested in amounts (if any) credited to his or her Employer Contribution Credit Account upon the occurrence during the Participant’s employment with the Employer of: (i) the Participant’s death or Total and Permanent Disability or (ii) a Change in Control of the Employer.

3.3

CONTRIBUTIONS TO THE TRUST. An amount may be contributed, if and when applicable, by the Employer to the Trust maintained under Section 11 equal to the amount(s) required to be credited to the Participant’s Account under Section 3.1 and 3.2. The Employer shall make a good faith effort to contribute these amounts to the Trust as soon as practicable following the date on which the contribution credit amount(s) are determined.

4.1

ALLOCATION OF DEEMED EARNINGS OR LOSSES ON ACCOUNTS. Subject to such limitations as may from time to time be required by law, imposed by the Employer or the Trustee or contained elsewhere in the Plan (including Section 4.6), and subject to such operating rules and procedures as may be imposed from time to time by the Employer, prior to the date on which a direction will become effective, the Participant shall have the right to direct the Employer as to how amounts in his or her Account shall be deemed to be invested. The Employer shall direct the Trustee to invest the account maintained in the Trust on behalf of the Participant pursuant to the deemed investment directions the Employer has properly received from the Participant.

The value of the Participant’s Account shall be equal to the value of the account maintained under the Trust on behalf of the Participant. As of each Valuation Date of the Trust, the Participant’s Account will be credited or debited to reflect the Participant’s deemed investments of the Trust. The Participant’s Account will be credited or debited with the increase or decrease in the realizable net asset value or credited interest, as applicable, of the designated deemed investments, as follows: As of each Valuation Date, an amount equal to the net increase or decrease in realizable net asset value or credited interest, as applicable (as determined by the Trustee), of each deemed investment option within the Account since the preceding Valuation Date shall be allocated among all Participants’ Accounts deemed to be invested in that investment option in accordance with the ratio which the portion of the Account of each Participant which is deemed to be invested within that investment option, determined as provided herein, bears to the aggregate of all amounts deemed to be invested within that investment option.

4.2

ACCOUNTING FOR DISTRIBUTIONS. As of the date of any distribution hereunder, the distribution made hereunder to the Participant or his or her Beneficiary or Beneficiaries shall be charged to such Participant’s Account.

4.3

SEPARATE ACCOUNTS. A separate bookkeeping account under the Plan shall be established and maintained by the Employer to reflect the Account for each Participant with bookkeeping sub-accounts to show separately the Participant’s Compensation Deferral and the Participant’s Employer Contribution Credit Account. Each sub-account will separately account for the credits and debits described in Article 3 and Section 4.2.

4.4

DEEMED INVESTMENT DIRECTIONS OF PARTICIPANTS. Subject to such limitations as may from time to time be required by law, imposed by the Employer or the Trustee or contained elsewhere in the Plan (including Section 4.5), and subject to such operating rules and procedures as may be imposed from time to time by the Employer prior to and effective for each Designation Date, each Participant may communicate to the Employer a direction (in accordance with (a), below) as to how his or her Plan Accounts should be deemed to be invested among such categories of deemed investments as may be made available by the Employer hereunder. Such direction shall designate the percentage (in any whole percent multiples) of each portion of the Participant’s Plan Accounts which is requested to be deemed to be invested in such categories of deemed investments, and shall be subject to the following rules:

a)

Any initial or subsequent deemed investment direction shall be in writing, on a form supplied by and filed with the Employer, and/or, as required or permitted by the Employer, shall be by oral designation and/or electronic transmission designation. A designation shall be effective as of the Designation Date next following the date the direction is received and accepted by the Employer on which it would be reasonably practicable for the Employer to effect the designation.

b)

All amounts credited to the Participant’s Account shall be deemed to be invested in accordance with the then effective deemed investment direction, and as of the Designation Date with respect to any new deemed investment direction, all or a portion of the Participant’s Account at that date shall be reallocated among the designated deemed investment funds according to the percentages specified in the new deemed investment direction unless and until a subsequent deemed investment direction shall be filed and become effective. An election concerning deemed investment choices shall continue indefinitely as provided in the Participant’s most recent investment direction form provided by and filed with the Employer.

c)

If the Employer receives an initial or revised deemed investment direction which it deems to be incomplete, unclear or improper, the Participant’s investment direction then in effect shall remain in effect (or, in the case of a deficiency in an initial deemed investment direction, the Participant shall be deemed to have filed no deemed investment direction) until the next Designation Date, unless the Employer provides for, and permits the application of, corrective action prior thereto.

d)

If the Employer possesses (or is deemed to possess as provided in (c), above) at any time directions as to the deemed investment of less than all of a Participant’s Account, the Participant shall be deemed to have directed that the undesignated portion of the Account

be deemed to be invested in a money market, fixed income or similar fund made available under the Plan as determined by the Employer in its discretion.

e)

Each Participant hereunder, as a condition to his or her participation hereunder, agrees to hold the Employer and its agents and representatives harmless, for any losses or damages of any kind relating to the investment of the Participant’s Account hereunder, other than such losses or damages that result directly from gross negligence or intentional malfeasance on the part of the Employer or its agents or representatives.

f)

Each reference in this Section to a Participant shall be deemed to include, where applicable, a reference to a Beneficiary.

4.5

EXPENSES AND TAXES. Expenses associated with the administration or operation of the Plan including Trustee fees, shall be paid by the Employer from its general assets. Any taxes allocable to an Account (or portion thereof) maintained under the Plan which are payable prior to the distribution of the Account (or portion thereof), as determined by the Employer, shall be paid by the Employer.

5.1

FIXED PAYMENT DATES; TERMINATION OF EMPLOYMENT. On his or her Form and Timing of Payment Election Form, a Participant shall select the manner of payment (as described in Section 6.2(b)) and shall select a fixed payment date for the payment or commencement of payment of his or her Account (or the Participant may select fixed payment dates for the payment or commencement of payment of portions of his or her Account), which will be valued and payable according to the provisions of Article 6. Such payment dates may be extended to later dates so long as elections to so extend the payment dates are made by the Participant at least six (6) months prior to the date on which the distribution is scheduled to be made or commence. Such payment dates may not be accelerated, except as provided in Section 5.2. A Participant may elect on his or her Form and Timing of Payment Election