INDEMNIFICATION AGREEMENT
AGREEMENT,
dated as of
, 200_, by and between Toll Brothers, Inc., a Delaware corporation
(the “ Company ”), and [
] (the “ Indemnitee ”).
WHEREAS,
it is essential to the Company to retain and attract as directors
and officers the most capable persons available;
WHEREAS,
the Indemnitee is a director and/or officer of the
Company;
WHEREAS,
the Company and the Indemnitee recognize the increased risk of
litigation and other claims being asserted against directors and
officers of companies in today’s environment;
WHEREAS,
the Company’s Second Restated Certificate of Incorporation
and By-Laws (together, the “Governing Documents”)
require the Company to indemnify and advance expenses to its
directors and officers to the extent provided therein, and the
Indemnitee serves as a director and/or officer of the Company, in
part, in reliance on such provisions in the Company’s
Certificate of Incorporation and By-Laws; and
WHEREAS,
in recognition of the Indemnitee’s need for substantial
protection against personal liability in order to enhance the
Indemnitee’s continued service to the Company in an effective
manner, and the Indemnitee’s reliance on the Company’s
Governing Documents, and in part to provide the Indemnitee with
specific contractual assurance that the protection promised by the
Company’s Governing Documents will be available to the
Indemnitee (regardless of, among other things, any amendment to or
revocation of the applicable provisions of the Company’s
Governing Documents or any change in the composition of the
Company’s Board of Directors or acquisition transaction
relating to the Company), the Company wishes to provide in this
Agreement for the indemnification of and the advancing of expenses
to the Indemnitee to the fullest extent (whether partial or
complete) permitted by law and as set forth in this Agreement, and,
to the extent insurance is maintained, for the continued coverage
of the Indemnitee under the directors’ and officers’
liability insurance policy of the Company.
NOW,
THEREFORE, in consideration of the premises and of the Indemnitee
continuing to serve the Company directly or, at its request, as an
officer, director, manager, member, partner, tax matters partner,
fiduciary or trustee of, or in any other capacity with, another
Person (as defined below) or any employee benefit plan, and
intending to be legally bound hereby, the parties hereto agree as
follows:
1.
Certain Definitions . In addition to terms defined elsewhere
herein, the following terms have the following meanings when used
in this Agreement:
(a)
Agreement : shall mean this Indemnification Agreement, as
amended from time to time hereafter.
(b)
Board of Directors : shall mean the Board of Directors of
the Company.
(c)
Claim : means any threatened, asserted, pending or completed
civil, criminal, administrative, investigative or other action,
suit or proceeding of any kind whatsoever, or any appeal of any
kind thereof, or any inquiry or investigation, whether instituted
by the Company, any governmental agency or any other party, that
the Indemnitee in good faith believes might lead to the institution
of any such action, suit or proceeding, whether civil, criminal,
administrative, investigative or other, including any arbitration
or other alternative dispute resolution mechanism.
(d)
Indemnifiable Event : means any act or omission, whether
occurring before, on or after the date of this Agreement, arising
from the performance of the Indemnitee’s duties or
obligations to the Company or any of its subsidiaries, including in
connection with any civil, criminal, administrative, investigative
or other action, suit or proceeding to which the Indemnitee may
hereafter be made a party by reason of being or having been an
officer, director, manager, member, partner, tax matters partner,
fiduciary or trustee of, or having served in any other capacity
with, another Person or any employee benefit plan at the request of
the Company.
(e)
Indemnifiable Expenses : means (i) all expenses and
liabilities, including judgments, fines, penalties, interest,
amounts paid in settlement with the approval of the Company, and
counsel fees and disbursements (including, without limitation,
experts’ fees, court costs, retainers, transcript fees,
duplicating, printing and binding costs, as well as
telecommunications, postage and courier charges) paid or incurred
in connection with investigating, defending, being a witness in or
participating in (including on appeal), or preparing to
investigate, defend, be a witness in or participate in, (including
on appeal), any Claim relating to any Indemnifiable Event and
(ii) any liabilities which an Indemnitee incurs as a result of
acting on behalf of the Company (whether as a fiduciary or
otherwise) in connection with the operation, administration or
maintenance of an employee benefit plan or any related trust or
funding mechanism (whether such liabilities are in the form of
excise taxes assessed by the United States Internal Revenue
Service, penalties assessed by the Department of Labor,
restitutions to such a plan or trust or other funding mechanism or
to a participant or beneficiary of such plan, trust or other
funding mechanism, or otherwise).
(f)
Person : means any individual, corporation, firm,
partnership, joint venture, limited liability company, estate,
trust, business association, organization, governmental entity or
other entity.
2. Basic
Indemnification Arrangement; Advancement of Expenses
.
(a) In
the event that the Indemnitee was, is or becomes subject to, a
party to or witness or other participant in, or is threatened to be
made subject to, a party
2
to or witness
or other participant in, a Claim by reason of (or arising in part
out of) an Indemnifiable Event, the Company shall indemnify the
Indemnitee, or cause such Indemnitee to be indemnified, consistent
with the terms of this Agreement, to the fullest extent permitted
by Delaware law in effect on the date hereof and as amended from
time to time; provided , however , that no change in
Delaware law shall have the effect of reducing the benefits
available to the Indemnitee hereunder based on Delaware law as in
effect on the date hereof or as such benefits may improve as a
result of amendments after the date hereof. The rights of the
Indemnitee provided in this Section 2 shall include, without
limitation, the rights set forth in the other sections of this
Agreement. Payments under this Section 2(a) shall be made as soon
as practicable but in no event later than thirty (30) days
after written demand is received by the Company.
(b) If
so requested by the Indemnitee, the Company shall advance, or cause
to be advanced (within thirty (30) days of such request), any
and all Indemnifiable Expenses incurred by the Indemnitee (an
“ Expense Advance ”). The Company shall, in
accordance with such request (but without duplication), either
(i) pay, or cause to be paid, such Indemnifiable Expenses on
behalf of the Indemnitee, or (ii) reimburse, or cause the
reimbursement of, the Indemnitee for such Indemnifiable Expenses.
The Indemnitee’s right to an Expense Advance is absolute and
shall not be subject to any condition that the Board of Directors
shall not have determined that the Indemnitee is not entitled to be
indemnified under applicable law. However, the obligation of the
Company to make an Expense Advance pursuant to this Section 2(b)
shall be subject to the condition that, if, when and to the extent
that a final judicial determination is made (as to which all rights
of appeal therefrom have been exhausted or lapsed) that the
Indemnitee is not entitled to be so indemnified under applicable
law, the Company shall be entitled to be reimbursed by the
Indemnitee (who hereby agrees to reimburse the Company) for all
such amounts theretofore paid (it being understood and agreed that
the foregoing agreement by the Indemnitee shall be deemed to
satisfy any requirement that the Indemnitee provide the Company
with an undertaking, and shall in fact constitute an unconditional,
binding and enforceable undertaking, to repay any Expense Advance
if it is ultimately determined that the Indemnitee is not entitled
to indemnification under applicable law). The Indemnitee’s
undertaking to repay such Expense Advances shall be unsecured and
interest-free, except as otherwise ordered in a final judicial
determination (as to which all rights of appeal therefrom have been
exhausted or lapsed) that the Indemnitee is not entitled to be so
indemnified under applicable law.
(c) Notwithstanding
anything in this Agreement to the contrary, the Indemnitee shall
not be entitled to indemnification or advancement of Indemnifiable
Expenses pursuant to this Agreement in connection with any Claim
initiated by the Indemnitee unless (i) the Company has joined
in, or the Board of Directors of the Company has authorized or
consented to the initiation of, such Claim or (ii) the Claim
is one to enforce the Indemnitee’s rights under this
Agreement (including an action pursued by the Indemnitee to secure
a determination that the Indemnitee should be indemnified under
applicable law).
(d) The
indemnification obligations of the Company under Section 2(a) shall
be subject to the condition that the Board of Directors shall not
have determined (by
3
majority vote
of directors who are not parties to the applicable Claim) that the
indemnification of the Indemnitee is not proper in the
circumstances because the Indemnitee is not entitled to be
indemnified under applicable law. If the Board of Directors
determines that the Indemnitee is not entitled to be indemnified in
whole or in part under applicable law, the Indemnitee shall have
the right to commence litigation in any court in the State of
Delaware having subject matter jurisdiction thereof and in which
venue is proper, seeking an initial determination by the court or
challenging any such determination by the Board of Directors or any
aspect thereof, including the legal or factual bases therefor, and
the Company hereby consents to service of process and to appear in
any such proceeding. If the Indemnitee commences legal proceedings
in a court of competent jurisdiction to secure a determination that
the Indemnitee should be indemnified under applicable law, any
determination made by the Board of Directors that the Indemnitee is
not entitled to be indemnified under applicable law shall not be
binding, the Indemnitee shall continue to be entitled to receive
Expense Advances, and the Indemnite
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