EXHIBIT 10.1
TOLL BROTHERS, INC.
CASH BONUS PLAN AMENDMENT
This Cash Bonus Plan Amendment (this "Amendment") is entered into as of
December 7, 2005, by and between Toll Brothers, Inc. (the "Company") and Xxxxxx
X. Toll (the "Participant") and amends the Toll Brothers, Inc. Cash Bonus Plan
(the "Plan"). Capitalized terms used herein and not defined herein shall have
the meanings assigned to such terms in the Plan.
WHEREAS, the Company originally adopted the Plan in 1993 to provide a
bonus program for the Participant.
WHEREAS, the stockholders of the Company have adopted certain
amendments to the Plan, most recently at their March 2005 Annual Meeting.
WHEREAS, pursuant to Section 8(b) of the Plan, the Company may amend
the Plan from time to time without stockholder approval if the amendment does
not increase the amount of bonuses determined under the formula contained in
Section 6(a) of the Plan.
WHEREAS, the Company, with the consent of the Participant, desires to
amend the Plan to apply certain restrictions and additional caps to the amount
of bonus payable under the Plan, in a manner that may decrease, but will not
increase, the amount of bonus payable under the Plan.
NOW THEREFORE, in consideration of the terms and conditions set forth
herein, and intending to be legally bound hereby, the Company and the
Participant hereby agree as follows:
Section 1. Amendments to the Plan. Section 5 of the Plan is hereby
amended to add the following Section 5(e):
(e) (i) Notwithstanding the provisions of Section 5(b) above, with
respect to the Plan Year ended October 31, 2005 (the "2005
Bonus"), any bonus to which the Participant is entitled under
Section 6 below shall not exceed $27,322,547 (the highest of
the probable stock-adjusted bonus values projected for fiscal
2005, as presented to the Board of Directors on October 21,
2004). For these purposes, the value of the portion of the
2005 Bonus that is payable in Shares shall be treated as
though the value per Share remained at $36.91 from the end of
the Plan Year through the date of payment or transfer. The
2005 Bonus shall be payable 60% in cash and 40% in Shares. The
portion of such bonus payable in Shares shall be paid by means
of delivery of a number of Shares determined by dividing 40%
of the bonus payable by $36.91, the closing price of a Share
as of the last day of the Plan Year ended October 31, 2005,
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.
(ii) Notwithstanding the provisions of Section 5(b) above,
with respect to the Plan Years ending October 31, 2006 and
October 31, 2007, in the event, as of the last day of any such
Plan Year, the closing price per Share (equitably adjusted to
reflect any stock dividend, stock split, reverse stock split,
recapitalization or reorganization during the period from
October 31, 2005 through the last day of the fiscal year for
which a determination is being made) is equal to or less than
$36.91, and greater than or equal to the Award Conversion
Price, a new Section 5(b) shall be substituted for Section
5(b), above, to read:
"(b) The payment of bonuses under the Plan
with respect to the fiscal years ending 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"),
payable as follows: The dollar amount of the bonus, as
calculated pursuant to the provisions of Section 6,
below, shall be payable 60% in cash, and 40% in Shares.
Notwithstanding anything to the contrary in this
paragraph (b), the amount of the bonus payable shall be
limited to an amount that is equal to 2.9% of the
Company's pre-tax/pre-bonus income for the fiscal year
for which the bonus is being calculated. The portion of
such bonus payable in Shares shall be paid by means of
delivery of a number of Shares determined by dividing
40% of the bonus payable by $36.91, the closing price
of a Share as of the last day of the Plan Year ending
October 31, 2005, 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."
(iii) With respect to the Plan Years ending October 31, 2006
and October 31, 2007, in the event, as of the last day of any
such Plan Year, the closing price per Share (equitably
adjusted to reflect any stock dividend, stock split, reverse
stock split, recapitalization or reorganization during the
period from October 31, 2005 through the last day of the
fiscal year for which a determination is being made) is
greater than $36.91, or less than the Award Conversion Price,
Section 5(b), above, shall remain in full force and effect
without change; provided, however, that in the event the
closing price per Share (equitably adjusted to reflect any
stock dividend, stock split, reverse stock split,
recapitalization or reorganization during the period from
October 31, 2005 through the last day of the fiscal year for
which a determination is being made) is greater than $36.91,
the bonus payable under the Plan for such Plan Year shall be
limited to an amount that does not exceed the cash bonus value
for such Plan Year by a greater percentage than the fiscal
year end price per Share exceeds $36.91.
(iv) This Section 5(e) is intended only to limit the amount or
value of the bonus payable to the Participant in certain
situations. As a consequence, and notwithstanding anything to
the contrary in this Section 5(e), under no circumstances
shall any bonus payable pursuant to the Plan, taking into
account the provisions of this Section 5(e), be greater or of
more value than the bonus that would be payable if this
Section 5(e) were not included in the Plan, and this Section
5(e) shall be interpreted in this manner, and consistent with
the limitations on modifications to performance based
compensation arrangements applicable pursuant to Section
162(m) of the Code and Treasury Regulations promulgated
thereunder.
Section 2. General Indemnity. The Company shall indemnify, defend and
hold Participant harmless from and against any damages or financial liabilities
Participant suffers or incurs, including any liabilities to the United States
government, solely arising out of or resulting from this Amendment.
Section 3. Full Force and Effect. Except as specifically modified or
amended by the terms of this Amendment, the Plan and all provisions contained
therein are, and shall continue, in full force and effect and are hereby
ratified and confirmed.
Section 4. Counterparts. This Amendment may be executed in any number
of separate counterparts, each of which shall be deemed to be an original and
all of which together shall be deemed to be one and the same instrument.
In witness whereof, the Company and the Participant have executed this
Cash Bonus Plan Amendment as of the date set forth above.
TOLL BROTHERS, INC.
By: Xxxx X. Xxxxxxx
------------------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President, Chief Financial Officer
PARTICIPANT:
Xxxxxx X. Toll
--------------
Xxxxxx X. Toll
