Document:

exv10w2

 

EXHIBIT 10.2

TOLL BROTHERS, INC.

NON-QUALIFIED STOCK OPTION GRANT

     THIS NON-QUALIFIED STOCK OPTION is granted as of [DATE] (the “Effective Date”) by TOLL
BROTHERS, INC., a Delaware corporation (the “Company”) under the Toll Brothers, Inc. Stock
Incentive Plan for Employees (2007) (the “Plan”), to [NAME] (the “Optionee”).

W I T N E S S E T H

:

     1. Grant. As of the Effective Date, the Company granted to the Optionee an option
(the “Option”) to purchase on the terms and conditions hereinafter set forth all or any part of an
aggregate of [NUMBER] shares of the Company’s Common Stock, par value $0.01 per share, (the “Option
Shares”), at the purchase price of [$                     ] per share (the “Option Price”). The
Optionee shall have the cumulative right to exercise the Option, and the Option is only
exercisable, with respect to the following number of Option Shares on or after the following dates:

			
	 	 	 
	Number of Option Shares 

that may be purchased on 

or after [DATE]:
	 	Total

Option Shares

	 	 	 	 	 	 	 	 	 
	[DATE]

	 	[DATE]
	 	[DATE]
	 	[DATE]	 	 
	 

	 	 
	 	 
	 	 	 	 
	[# OF SHARES]

	 	[# OF SHARES]
	 	[# OF SHARES]
	 	[# OF SHARES]
	 	[TOTAL]

The Committee may, in its sole discretion, accelerate the date on which the Optionee may
purchase Option Shares.

     2. Term. The Option granted hereunder shall expire in all events at 5:00 p.m. (local
Philadelphia, Pennsylvania time) on [DATE], unless sooner terminated as provided in Subparagraphs
(a), (b), (c), (d), (e) or (f) below.

          (a) Voluntary Termination or Dismissal for Cause. Except as otherwise provided herein
or in any separate provisions applicable to this Option, the Option shall immediately terminate
upon termination of the Optionee’s employment with the Company and its Affiliates (as defined
below) if (i) Optionee voluntarily terminates his or her employment with the Company and its
Affiliates or (ii) the Optionee is dismissed from employment with the Company and the Committee (as
defined below) finds, after full consideration of the facts presented on behalf of both the Company
and the Optionee, that the Optionee was dismissed for Cause (as defined below). In addition
to the immediate termination of the Option, if the Optionee is found by the Committee to

 

 

have
been dismissed for Cause, the Optionee shall automatically forfeit all Option Shares for which the
Company has not yet delivered the share certificates upon refund by the Company of the Option Price
for such Option Shares.

          (b) Dismissal Without Cause. The Option shall terminate two (2) weeks after the
Optionee’s employment with the Company and its Affiliates is terminated by reason of dismissal
without Cause. During such two-week period the Optionee may purchase any remaining Option Shares
which could have been purchased on the date Optionee’s employment terminated, but may not purchase
any Option Shares which would otherwise first become purchasable during such two-week period.

          (c) Disability or Death. Except as otherwise provided herein or in any separate
provisions applicable to this Option, the Option shall terminate one (1) year after the Optionee’s
employment with the Company and/or its Affiliates is terminated by reason of the Optionee’s
Disability or by death. During such one year period the Optionee (or, as applicable, the
Optionee’s heirs or legal representative) may purchase any remaining Option Shares which could have
been purchased on the date Optionee’s employment terminated, but may not purchase any Option Shares
which would otherwise become purchasable during such one year period.

          (d) Change in Accounting Treatment. If the Committee finds that a change in the
financial accounting treatment for options granted under the Plan from that in effect on December
13, 2006, when the Plan was adopted, adversely affects the Company or, in the determination of the
Committee, may adversely affect the Company in the foreseeable future, the Committee may, in its
discretion, set an accelerated termination date for the Option. In such event, the Committee may
take whatever other action, including acceleration of any exercise provisions, it deems necessary.

          (e) Change in Control. In the event of a Change in Control (as defined in the Plan)
the Option shall become immediately exercisable in full. In addition, in such event the Committee
may accelerate the termination date of the Option to a date no earlier than thirty (30) days after
notice of such acceleration is given to the Optionee. Upon the giving of any such acceleration
notice, the Option shall become immediately exercisable in full.

          (f) Definitions. For purposes of this Option: (i) the term “Affiliate” shall mean a
corporation which is a parent corporation or a subsidiary corporation with respect to the Company
within the meaning of section 425(e) or (f) of the Internal Revenue Code of 1986, as amended (the
“Code”); (ii) the term “Cause” shall mean a breach by the Optionee of his or her employment or
service contract with the Company or an Affiliate, or an act by the Optionee involving any sort of
disloyalty to the Company or an Affiliate, including, without limitation, fraud, embezzlement,
theft, commission of a felony or proven dishonesty in the course of his or her employment or
service or a disclosure of trade secrets of the Company or an Affiliate; (iii) the term “Committee”
shall refer to the Committee designated to administer the Plan; and (iv) the term
“Disability” shall means any condition that constitutes a “disability” as that term is defined
in section 22(e)(3) of the Code.

 

 

     3. Blackout Periods. The Committee reserves the right to suspend or limit the
Optionee’s rights to exercise and sell shares acquired through the exercise of options to comply
with the Company’s Insider Trading Policy, any applicable law, or at any other times that it deems
appropriate.

     4. General Rules. To the extent otherwise exercisable, this Option may be exercised
in whole or in part except that (a) any partial exercise of this Option must be for a round lot of
100 Option Shares or a whole number multiple thereof and (b) this Option may in no event be
exercised (i) with respect to fractional shares or (ii) after the expiration of the Option term for
any reason under Paragraph 2 hereof.

     5. Transfers. Except as otherwise provided herein or in any separate provisions
applicable to this Option, the Option is transferable by the Optionee only by will or pursuant to
the laws of descent and distribution in the event of the Optionee’s death, in which event the
Option may be exercised by the heirs or legal representatives of the Optionee. Notwithstanding the
foregoing, a Non-qualified Stock Option may be transferred pursuant to the terms of a “qualified
domestic relations order,” within the meaning of Sections 401(a)(13) and 414(p) of the Code or
within the meaning of Title I of the Employee Retirement Income Security Act of 1974, as amended.
Any attempt at assignment, transfer, pledge or disposition of the Option contrary to the provisions
hereof or the levy of any execution, attachment or similar process upon the Option shall be null
and void and without effect. Any exercise of the Option by a person other than the Optionee shall
be accompanied by appropriate proofs of the right of such person to exercise the Option.

     6. Method of Exercise and Payment.

          a) Method of Exercise. When exercisable under Paragraphs 1, 2 and 3, the Option may
be exercised by written notice, pursuant to Paragraph 10, to the Committee specifying the number of
Option Shares to be purchased and, unless the Option Shares are covered by a then-current
registration statement or a Notification under Regulation A under the Securities Act of 1933 (the
“Act”) and current registrations under all applicable state securities laws, containing the
Optionee’s acknowledgement, in form and substance satisfactory to the Company, that the Optionee
(a) is purchasing such Option Shares for investment and not for distribution or resale (other than
a distribution or resale which, in the opinion of counsel satisfactory to the Company, may be made
without violating the registration provisions of the Act), (b) has been advised and understands
that (i) the Option Shares have not been registered under the Act and are “restricted securities”
within the meaning of Rule 144 under the Act and are subject to restrictions on transfer and (ii)
the Company is under no obligation to register the Option Shares under the Act or to take any
action which would make available to the Optionee any exemption from such registration, and (c) has
been advised and understands that such Option Shares may not be transferred without compliance with
all applicable federal and state securities laws. The notice shall be accompanied by payment of the
aggregate
Option Price of the Option Shares being purchased. Such exercise shall be effective upon the
actual receipt by the Committee of such written notice and payment. For these purposes, the
Optionee shall be deemed to have made the payment required for exercise

 

 

of the Option at such time
as it is determined that satisfactory arrangements have been made to ensure payment of all amounts
as are required to be paid by Optionee in connection with the exercise of the Option.

          (b) Medium of Payment. An Optionee may pay for Option Shares, and the amount of any
tax withholding required under Paragraph 6(c) below, (i) in cash, (ii) by certified check
payable to the order of the Company, (iii) by means of arranging through a broker designated by the
Company to have the broker remit sufficient proceeds from the sale of such shares, (iv) by a
combination of the foregoing, or by such other method as the Committee may determine to be
appropriate from time to time. Furthermore, subject to the restrictions described below,
payment of the Option Price of the Option Shares being purchased may be made all or in part in
shares of the Common Stock of the Company held by the Optionee for more than one year. If payment
is made in whole or in part in shares of the Common Stock, then the Optionee shall (1) deliver to
the Company certificates registered in the name of such Optionee representing shares of Common
Stock legally and beneficially owned by such Optionee, free of all liens, claims and encumbrances
of every kind and having a fair market value on the date of delivery of such notice that is not
greater than the product of the Option Price and the number of Option Shares with respect to which
such Option is to be exercised, accompanied by stock powers duly endorsed in blank by the record
holder of the shares represented by such certificates or (2) attest to his ownership of shares of
Common Stock having a fair market value on the date of exercise at least equal to the options being
exercised. Notwithstanding the foregoing, the Board of Directors, in its sole discretion, may
refuse to accept shares of Common Stock in payment of the Option Price. In that event, any
certificates representing shares of Common Stock which were delivered to the Company shall be
returned to the Optionee with notice of the refusal of the Board of Directors to accept such shares
in payment of the Option Price. The Board of Directors may impose such limitations and
prohibitions on the use of shares of the Common Stock to exercise an Option as it deems
appropriate.

          (c) Withholding. In addition to payment of the Option Price for the Option Shares
being purchased, as a condition to the issuance of Option Shares and the delivery of any
certificate for such Option shares, the Optionee shall be required to remit to the Company an
amount sufficient to satisfy any federal, state and/or local tax withholding requirements arising
in connection with the exercise of the Option. If the Company for any reason does not require the
Optionee to make a payment sufficient to satisfy such withholding requirements, any tax withholding
payments made by the Company or any Affiliate to any federal, state or local tax authority with
respect to the exercise of the Option shall constitute a personal obligation of the Optionee to the
Company, payable upon demand or, at the option of the Company, by deduction from future
compensation payable to the Optionee. In addition, at the request of the Optionee, with consent
of the committee (which may be unreasonably withheld), or to the extent it is determined by the
Committee to be necessary or appropriate in connection with any applicable federal, state or local
tax withholding obligations, the Company may withhold
a portion of the Option Shares that would otherwise be issuable to the Optionee on the
exercise of the Option. In such event, the portion of the withholding obligation thus

 

 

satisfied
shall be equal to the fair market value of the Option Shares so withheld determined as of the date
the Option is exercised.

     7. Adjustments on Changes in Common Stock. In the event that, prior to the delivery
by the Company of all of the Option Shares in respect of which the Option is granted, there shall
be an increase or decrease in the number of issued shares of Common Stock of the Company as a
result of a subdivision or consolidation of shares or other capital adjustment, or the payment of a
stock dividend or other increase or decrease in such shares, effected without receipt of
consideration by the Company, the remaining number of Option Shares still subject to the Option and
the Option Price therefor shall be adjusted in a manner determined by the Committee so that the
adjusted number of Option Shares and the adjusted Option Price shall be the substantial equivalent
of the remaining number of Option Shares still subject to the Option and the Option Price thereof
prior to such change. For purposes of this Paragraph no adjustment shall be made as a result of
the issuance of Common Stock upon the conversion of other securities of the Company which are
convertible into Common Stock.

     8. Legal Requirements. If the listing, registration or qualification of the Option
Shares upon any securities exchange or under any federal or state law, or the consent or approval
of any governmental regulatory body is necessary as a condition of or in connection with the
purchase of such Option Shares, the Company shall not be obligated to issue or deliver the
certificates representing the Option Shares as to which the Option has been exercised unless and
until such listing, registration, qualification, consent or approval shall have been effected or
obtained. If registration is considered unnecessary by the Company or its counsel, the Company may
cause a legend to be placed on the Option Shares being issued calling attention to the fact that
they have been acquired for investment and have not been registered.

     9. Administration. The Option has been granted pursuant to, and is subject to the
terms and provisions of, the Plan. All questions of interpretation and application of the Plan and
the Option shall be determined by the Committee, and such determination shall be final, binding and
conclusive. The Option shall not be treated as an incentive stock option (as such term is defined
in section 422(b) of the Code) for federal income tax purposes.

     10. Notices. Any notice to be given to the Company shall be addressed to the
Committee at its principal executive office, and any notice to be given to the Optionee shall be
addressed to the Optionee at the address then appearing on the personnel records of the Company or
the Affiliate of the Company by which he is employed, or at such other address as either party
hereafter may designate in writing to the other. Any such notice shall be deemed to have been duly
given when deposited in the United States mail, addressed as aforesaid, registered or certified
mail, and with proper postage and registration or certification fees prepaid.

 

 

     11. Employment. Nothing herein contained shall affect the right of the Company or any
Affiliate to terminate the Optionee’s employment, services, responsibilities, duties, or authority
to represent the Company or any Affiliate at any time for any reason whatsoever.

     IN WITNESS WHEREOF, the Company has granted this Option as of the day and year first above
written.

	 	 	 	 	 
	 	TOLL BROTHERS, INC.         

 	 
	 	By:  	                        __________________________
 	 
	 	 	 	 
	 	 	 	 
	 

(Corporate Seal)exv10w3

 

EXHIBIT 10.3

ADDENDUM TO NON QUALIFIED STOCK OPTION

Special
Rules Applicable to Continuation of Option Following Optionee’s Retirement, Death or Disability, and

Providing for Certain Permissible Transfers.

     This addendum, applicable to the Option granted to [NAME], the Optionee, as of [DATE], and
effective as of the Effective Date, for the purpose of providing for continued exercisability and
vesting of the Option in certain circumstances (set forth below under the heading “Continuation of
Option”) and for certain limited rights to transfer the Option (as set forth below under the
heading “Transferability”) has been provided with respect to the Option in connection with and as
consideration for Optionee’s agreement not to engage in certain activities following his or her
termination of employment with the Company (as set forth below under the heading “Non-Competition
Provisions”). In recognition of these mutual agreements as set forth herein, and intending to be
legally bound, the Company and the Optionee hereby agree as follows:

Continuation of Option

     Notwithstanding the provisions of Paragraph 2 of this Option, if the Optionee terminates his
or her employment with the Company on or after attainment of age 62 (“Retirement”), or by reason of
his or her death or Disability:

     A. The Optionee shall not be treated as having voluntarily terminated his or her employment
with the Company;

     B. The Option shall continue to be exercisable and to vest pursuant to the provisions of this
Addendum and;

     C. The Option shall continue in effect following the death, Disability or Retirement of the
Optionee, and shall continue to vest and be exercisable pursuant to the terms of Paragraphs 1 and 2
of the Option, except that Optionee’s termination of employment by reason of death, Disability or
Retirement shall not be taken into account.

     The provisions of Paragraph 2, other than Paragraphs 2(a), (b) and (c) shall continue to
apply.

Transferability

     Notwithstanding the limitations on transfers otherwise applicable to this Option, the Option
may be transferred by the Optionee in a transaction that qualifies as a Family Transfer (as that
term is defined in the Plan), and the Option shall, thereafter, be exercisable by the person or
entity receiving the Option pursuant to such Family Transfer. Notwithstanding the foregoing, this
Option shall only be exercisable by a transferee to the same extent and subject to the same terms
and conditions as would have applied had no Family Transfer been made.

Non-Competition Provisions

     In order to induce the Company to agree to the terms of this Stock Option Grant, as modified
by this Addendum, Optionee agrees that Optionee shall not, except upon a waiver by the Committee in
writing of these requirements, at any time after the Optionee’s Disability or Retirement engage
directly or indirectly, as a proprietor, equity holder, investor (except as a passive investor
holding not more than ten percent (10%) of the outstanding capital stock of a publicly held
company), lender, partner, director, officer, employee, consultant or representative or in any
other capacity in the “Home Building Business”. As used herein, the term “Home Building Business”
shall mean any business involved in the acquisition, development or improvement of any real estate
for potential residential use or the purchase, construction, development, marketing or sale of
single or multi-family residential units or any other business which competes with the Company in
the determination of the Committee.

     This Option shall immediately terminate upon a finding by the Committee, after full
consideration of the facts presented on behalf of both the Company and the Optionee, that the
Optionee has breached terms of this Addendum. In such event, in addition to immediate termination
of the Option, the Optionee shall automatically forfeit all Option Shares for which the Company has
not yet delivered the share certificates upon refund by the Company of the amount paid for such
Option Shares.

	 	 	 	 	 
	 	TOLL BROTHERS, INC.

 	 
	 	By:

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