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EXHIBIT 10.1
TOLL BROTHERS, INC.
CASH BONUS PLAN
(AS AMENDED AND APPROVED BY STOCKHOLDERS ON MARCH 17, 2005)
1. PURPOSE
The purpose of the Plan is
to provide performance-based bonus compensation
for the Participant (as defined herein) in
accordance with a formula that is
based on the financial success of the
Company (as defined herein) as part of an
integrated compensation program which is
intended to assist the Company in
motivating and retaining employees of
superior ability, industry and loyalty.
2. DEFINITIONS
The following words and
phrases as used herein shall have the following
meanings, unless a different meaning is
plainly required by the context:
"Board of Directors" shall mean
the Board of Directors of the Company.
"Committee" shall mean the
committee appointed by the Board of Directors
consisting of two or more Outside Directors
to act as the Committee with respect
to the Plan.
"Company" shall mean Toll
Brothers, Inc., a Delaware Corporation, and any
successor thereto.
"Outside Director" shall
mean a member of the Board of Directors who (i) is
not a current employee of the Company or
any affiliate, (ii) is not a former
employee of the Company or any affiliate
who is receiving compensation for
services (other than benefits under a
tax-qualified retirement plan), (iii) was
not an officer of the Company or any
affiliate at any time, (iv) is not
currently receiving compensation for
services from the Company or any affiliate
in any capacity other than as a member of
the Board of Directors, and (v) is a
"Non-Employee Director" as that term is
defined in Rule 16b-3 under the
Securities Exchange Act of 1934.
"Participant" shall mean
Robert I. Toll.
"Plan" shall mean the Toll
Brothers, Inc. Cash Bonus Plan, as amended.
"Plan Year" shall mean the
fiscal year of the Company.
3. PARTICIPATION
Robert I. Toll is the sole
Participant in the Plan.
4. TERM OF PLAN
Subject to approval of the
Plan by the stockholders of the Company, the Plan
shall be in effect for the Plan Year ending
October 31, 2005 and shall continue
until terminated by the Board of
Directors.
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5. BONUS ENTITLEMENT
(a) The Participant shall be
entitled to receive a bonus in accordance with
the provisions of Section 6 of the Plan
only after certification by the
Committee that the performance goals set
forth in Section 6 have been satisfied.
The bonus payment under the Plan shall be
paid to the Participant during the
last week of December or the first week of
January after the close of the fiscal
year with respect to which the bonus is to
be paid. No bonus shall be payable
under the Plan without the prior disclosure
of the terms of the Plan to the
stockholders of the Company and the
approval of the Plan by such stockholders.
(b) The payment of bonuses
under the Plan with respect to the fiscal years
ending October 31, 2005, October 31, 2006
and October 31, 2007 shall,
notwithstanding anything contained in
Section 6 of the Plan to the contrary, be
paid in the form of cash and shares of the
Company's Common Stock, par value
$0.01 per share (the "Shares"), which
payments of Shares shall be in the form of
an award under the terms of the Toll
Brothers, Inc. Stock Incentive Plan (1998)
(the "1998 Plan"), except as otherwise
provided in this Section 5. An initial
number of Shares (the "Initial Number of
Shares") shall be determined by
dividing the dollar amount of each bonus by
the closing price per Share as
reported on the New York Stock Exchange for
October 29, 2004 (such price, as the
same shall be equitably adjusted to reflect
any stock dividend, stock split,
reverse stock split, recapitalization or
reorganization occurring during the
period from October 29, 2004 through the
last day of the fiscal year for which a
determination is being made, being referred
to herein as the "Award Conversion
Price"). Notwithstanding anything to the
contrary in this paragraph (b), (i) the
Initial Number of Shares shall be
multiplied by the closing Share price on the
last business day of the Company's fiscal
year for which the determination is
being made (the "fiscal year end price") to
determine the cash bonus value as
adjusted for the stock conversion feature
(the "stock-adjusted bonus value");
(ii) the stock-adjusted bonus value shall
be capped as follows: (x) the fiscal
year end price, as defined above, cannot be
more than 160% of the Award
Conversion Price, and (y) the
stock-adjusted bonus value cannot exceed 2.9% of
the Company's pre-tax/pre-bonus income for
the fiscal year for which the bonus
is being calculated, and (iii) the
stock-adjusted bonus value, as capped by
application of (x) and (y) above, will be
paid 60% in cash, with the 40% balance
being paid in the number of Shares of stock
derived by dividing such balance by
the Award Conversion Price and equitably
adjusting the number of Shares so
calculated to reflect any stock dividend,
stock split, reverse stock split,
recapitalization or reorganization
occurring during the period beginning on the
first day of the fiscal year following the
fiscal year for which the payment is
being made and the day immediately
preceding the date of issuance of the Shares.
In the event of a change in the kind of
shares outstanding as a result of a
merger, consolidation or other event, an
appropriate and proportionate
adjustment shall be made in the number and
kind of shares otherwise payable.
(c) Notwithstanding the
provisions of Section 5(b), set forth above, the
Committee shall have the discretion at any
time to terminate the application of
Section 5(b), effective no sooner than six
months following the Committee's
determination to act under this Section
5(c). In the event the Committee
terminates the application of Section 5(b),
all bonuses payable on or after the
effective date of such action shall be
payable in cash only.
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(d) Notwithstanding anything
to the contrary contained in this Section 5, the
Participant may, if he believes that a
payment of his bonus in Shares would, as
a result of a change in Federal tax laws,
or in regulations promulgated
thereunder by the IRS, have a material
adverse impact on the Participant,
request the Committee to either suspend or
terminate the application of Section
5(b). Upon receipt of such request from the
Participant, the Committee may, at
its sole discretion, terminate or suspend
the application of Section 5(b), and
all bonuses payable under the Plan shall be
payable in cash only in accordance
with Section 6 until such time as the
Committee determines to reinstate Section
5(b), provided, however, that the amount of
any such cash payment shall not
exceed the value of the bonus that would
have been payable if the bonus had been
paid in Shares under the terms of the Plan
as in effect without regard to this
Section 5(d).
6. AMOUNT OF
PERFORMANCE-BASED COMPENSATION BONUS
(a) The Participant is
entitled to a bonus which, subject to Section 5, is
equal to the s
