Document:

TOL-2014.10.31-10K-Ex.10.16

Exhibit 10.16
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 (____) (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 ______ 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”).  Subject to Section 2 below, 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]
	 

	______

	_______
	_______
	_______
	_______

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.  

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(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 [DATE], 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 

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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 means of a net issuance (as described below), (v) by a combination of the foregoing, or (vi) 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 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.  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.  
The Optionee may arrange for exercise of an Option and payment of the Option Price by means of a net issuance of shares as described below, provided, however, that exercise by means of a net issuance shall be permitted only as follows: (x) if the Optionee is an officer (as defined for purposes of Section 16 of 

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the Securities Exchange Act of 1934, as amended) at the time of exercise, then a net issuance must be approved in advance by the Committee, and (y) if the Optionee is not an officer (as defined for purposes of Section 16 of the Securities Exchange Act of 1934, as amended) at the time of exercise, then a net issuance must be approved in advance by the Committee or, if and to the extent the Committee so determines, the Company’s General Counsel or other officer of the Company.  If a net issuance of shares is so approved and the Optionee chooses to exercise in that manner, the exercise of the Option shall be treated as follows:  Upon notice of exercise, the Optionee shall be deemed, as of the date of exercise, to have received all of the shares of Common Stock subject to the Option (or such portion of such shares as corresponds to the portion of the Option being exercised), and shall simultaneously be deemed to have delivered back to the Company that number of such shares as have a fair market value (determined as of the date of exercise) equal to the Option Price required to be paid on exercise of the Option (or portion being exercised) and any additional amounts required to be paid by the Optionee in connection with the exercise of the Option.
(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.

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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:    ____________________

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ADDENDUM TO NON-QUALIFIED STOCK OPTION

Special Rules Applicable to Continuation of Option Following Optionee's 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 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 or Disability 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 or Disability 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 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:    __________________

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:    ____________________TOL-2014.10.31-10K-Ex.10.17

Exhibit 10.17
TOLL BROTHERS, INC.  
STOCK INCENTIVE PLAN FOR EMPLOYEES (_____)
RESTRICTED STOCK UNIT AGREEMENT (PERFORMANCE BASED)

This Restricted Stock Unit Agreement (this “Agreement”) documents the grant of __________ Restricted Stock Units (the “RSUs”) by Toll Brothers, Inc. (the “Company”) pursuant to the terms of the Toll Brothers, Inc. Stock Incentive Plan for Employees (____) (the “Plan”), on this [DATE] (the “Date of Grant”) to [NAME] (the “Grantee”).  Subject to the terms of the Plan and this Agreement, each RSU represents the right to receive one share of Common Stock at the date specified herein, or such greater or lesser number of shares of Common Stock  as provided in Schedule A hereto (the “Shares”).

1.Definitions.  All capitalized terms contained in this Agreement shall have the meaning set forth in the Plan unless otherwise defined herein or as may be required by the context.  
2.Performance-Based Vesting.  The RSUs shall, except to the extent greater vesting is provided for under the terms of the Plan or as set forth in this Agreement, become vested and Grantee shall be entitled to receipt of the Shares subject to the RSUs only if the performance metrics, if any, described in Paragraph 1 of Schedule A, attached hereto and made a part hereof, are satisfied; and only if Grantee satisfies such continuing service requirements and conditions as are provided in Paragraph 2 of Schedule A.  
3.Vesting Upon Death or Disability.  Notwithstanding any of the provisions in Section 2, the RSUs shall become fully vested in the event the Grantee’s service as an employee or as a member of the Board of the Company terminates by reason of the Grantee’s death, or by reason of the Grantee’s “disability” (as hereinafter defined).
For purposes of this Agreement, the term "disability" shall mean any condition that would qualify as a "disability" as that term is defined in the Plan, or any other condition that the Committee determines to be a medically determinable physical or mental impairment which can be expected (a) to prevent the Grantee from being able to perform his usual duties (or another job deemed appropriate by the Committee taking into account the Grantee's education, prior experience and past earnings) and (b) to last for one year or longer. 
4.Vesting Upon Change of Control.  Notwithstanding any of the provisions of Section 2, the RSUs shall become fully vested in the event there is a Change of Control while Grantee is employed by or a member of the Board of the Company.
5.Delivery of Shares.  The Shares shall be delivered to Grantee (or the person to whom ownership rights may have passed by will or the laws of descent and distribution), as follows:  
(a)If the  RSUs become vested under Section 2, the Shares subject to the vested RSUs shall be delivered at the time set forth in Paragraph 2 of Schedule A; 
(b)If the RSUs become vested under Section 4, the Shares subject to the RSUs shall be delivered upon the occurrence of a Change of Control; provided, however, that the event that constitutes a Change of Control also constitutes a change in ownership or effective control of the Company, or a change in the ownership of a substantial portion of the assets of the Company that permits a payment of deferred compensation pursuant to Section 409A of the Code; or

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(c)If the RSUs become vested under Section 3, the Shares subject to the RSUs shall be delivered on the date of Grantee’s termination of employment with, or as a member of the Board of, the Company due to death or disability; provided, however, that delivery of the Shares by reason of Grantee’s termination of employment shall be delayed until the six (6) month anniversary of the date of Grantee’s termination of employment if and to the extent necessary to comply with Code Section 409A(a)(B)(i), and the determination of whether or not there has been a termination of Grantee’s employment with the Company shall be made by the Committee consistent with the definition of “separation from service” (as that phrase is used for purposes of Code Section 409A, and as set forth in Treasury Regulation Section 1.409A-1(h)).  
The Company shall, without payment from Grantee (or the person to whom ownership rights may have passed by will or the laws of descent and distribution) for the Shares, other than any required withholding taxes, as provided in Section 10, below, (i) deliver to Grantee (or such other person) a certificate for the Shares being delivered or (ii) if consented to by Grantee (or such other person), deliver electronically to an account designated by Grantee (or such other person) the Shares being delivered, in either case without any legend or restrictions, except for such restrictions as may be imposed by the Committee, in its sole judgment, consistent with the terms of the Plan.  The Company may condition delivery of the Shares upon the prior receipt from Grantee (or such other person) of any undertakings which it may determine are required to assure that the Shares being delivered are being issued in compliance with federal and state securities laws.  The right to any fractional Shares shall be satisfied in cash, measured by the product of the fractional amount times the fair market value of a Share on the date the Share would otherwise have been delivered, as determined by the Committee.  Notwithstanding anything to the contrary herein, in the event of a Change of Control, the Grantee shall receive, at the time that delivery of the Shares is provided for hereunder, the Shares and/or such other property or other consideration as is appropriate so that the Grantee receives, as of such date of delivery, whatever the Grantee would have received had the Grantee held the Shares at the time of the Change of Control.
6.Dividends.  Grantee shall not be entitled to any cash, securities or property that would have been paid or distributed as dividends with respect to the Shares subject to this Agreement prior to the date the Shares are delivered to Grantee; provided, however, that the Company shall keep a hypothetical account in which any such items shall be recorded, and shall pay to Grantee the amount of such dividends in kind on the same date that the Shares to which such payments or distributions relate are required to be delivered under this Agreement.
7.Forfeiture.  If Grantee’s service as an employee or as a member of the Board of the Company terminates for any reason other than death or disability, then upon that termination Grantee shall forfeit all RSUs that have not become vested on or before the date of such termination, and no Shares shall be delivered nor payment made in respect of such RSUs.  This paragraph shall not affect Grantee’s rights under Paragraph 4, if applicable.
8.Non-Transferability of the RSUs.  Grantee shall not be permitted to sell, transfer, pledge, assign or otherwise dispose of the RSUs at any time.  Notwithstanding the foregoing, in the event of Grantee’s death, the RSUs may be transferred by will or by the laws of descent and distribution.   
9.Rights of Grantee.  Grantee shall have none of the rights of a shareholder at any time prior to the delivery of the Shares subject to this Agreement, except as expressly set forth in the Plan or herein.  

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10.Withholding Taxes.  Grantee shall be responsible to pay to the Company the amount of withholding taxes as determined by the Company on the date the Shares are delivered.  At the Grantee's option, Grantee shall have the right to relinquish to the Company a portion of the Shares having a fair market value, based on the closing price of the Common Stock on the NYSE on such delivery date, equal to the amount the Grantee would otherwise be required to pay to the Company on such delivery date by reason of applicable withholding taxes, in lieu of paying that amount to the Company in cash.  Grantee authorizes the Company to withhold in accordance with applicable law from any compensation payable to him or her any taxes required to be withheld for federal, state or local law in connection with this Agreement.
11.Notices.  Any notice to the Company under this Agreement shall be made in care of the Committee to the office of the General Counsel, at the Company’s main offices.  All notices under this Agreement shall be deemed to have been given when hand delivered or mailed, first class postage prepaid, and shall be irrevocable once given.  
12.Securities Laws.  The Committee may from time to time impose any conditions on the Shares as it deems necessary or advisable to ensure that Shares are issued and resold in compliance with the Securities Act of 1933, as amended.  
13.Grant of RSU Not to Affect Service.  The grant of the RSUs shall not confer upon Grantee any right to continue as an employee of the Company or to serve in any other capacity for the Company or any Affiliate. 
14.Amendment to Agreement; Acceleration.  Notwithstanding anything contained herein to the contrary, the Committee shall have the authority to amend or modify the terms and conditions set forth in this Agreement if the Committee determines, at its discretion, that any such amendment or modification is necessary or appropriate; provided, however, that the terms of this Agreement may not be changed in a manner that is unfavorable to Grantee without Grantee’s consent. 
15.Miscellaneous. 
(a)    The address for Grantee to which notice, demands and other communications to be given or delivered under or by reason of the provisions hereof shall be Grantee’s address as reflected in the Company’s personnel records. 
(b)    Grantee acknowledges receipt of a copy of the Plan prospectus, included in which is a summary of the terms of the Plan.  The summary contained therein is qualified in its entirety by reference to the terms of the Plan, copies of which are available with the Company’s public filings with the United States Securities and Exchange Commission at www.sec.gov, or by oral or written request directed to the Company.  Grantee represents that he is familiar with the terms and provisions of the Plan, and hereby accepts the RSUs, subject to all of the terms and provisions thereof.  Grantee agrees to hereby accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan or this Agreement.  
(c)    This Agreement may be executed in one or more counterparts and shall become effective when one or more counterparts taken together bears the signature of all the parties listed below.
(d)    The validity, performance, construction and effect of this Agreement shall be governed by the laws of the Commonwealth of Pennsylvania, without giving effect to principles of conflicts of law. 

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

TOLL BROTHERS, INC.                GRANTEE:

By:  _______________________________        _____________________________
                        

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SCHEDULE A
1.    [Description of Performance Metrics]

2.    [Description of Payment Dates]

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