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10, 2015 10, 2015 INFORMATION : Our revenues in fiscal 2014 of $3.91 billion and home building deliveries of 5,397 units rose 46% in dollars and 29% in units compared to fiscal 2013 and were the highest for any fiscal year since fiscal 2007. The Board does not intend to bring any matter before the Meeting except as specifically indicated in the notice and does not know of anyone else who intends to do so; however, if any other matters properly come before the Meeting, Messrs. Robert I. Toll and Douglas C. Yearley, Jr., or either of them, matters, acting as proxies for stockholders who have returned an executed proxy to us. Any proxy card may be revoked at any time before its exercise by notifying the Secretary of the Company in writing, by delivering a duly executed proxy card bearing a later date, or by attending the Meeting and voting in person. Delaware law: Name of Beneficial Owner FMR LLC(2) BlackRock, Inc.(3) Robert I. Toll(4) Bruce E. Toll(5) Zvi Barzilay Robert S. Blank Edward G. Boehne Richard J. Braemer Christine N. Garvey Carl B. Marbach(6) Stephen A. Novick Paul E. Shapiro Douglas C. Yearley, Jr.(7) Martin P. Connor All directors and executive officers as a group (12 persons)(1)(8)(9) ONE—ELECTION OF DIRECTORS director tenure to the Company's peer group. In advance of this review, the Chair of the Governance Committee conducted individual meetings with the independent directors to discuss each director's evaluation of the Board and determine his or her future plans that may assist the Committee in its consideration of the issue of director succession. Name Position(s) with the Company Robert I. Toll Bruce E. Toll Douglas C. Yearley, Jr. Robert S. Blank Edward G. Boehne Richard J. Braemer Christine N. Garvey Carl B. Marbach Stephen A. Novick Paul E. Shapiro ALL NOMINEES. TWO—RATIFICATION OF THE RE-APPOINTMENT OF Although ratification is not required by our bylaws or otherwise, the Board is submitting the selection of Ernst & Young LLP We have been advised by Ernst & Young LLP that neither the firm, nor any member of the firm, has any financial interest, direct or indirect, in any capacity in us or our subsidiaries. Audit Fees(1) Audit-Related Fees(2) Tax Fees(3) 2014. THREE—ADVISORY AND NON-BINDING VOTE (SAY ON PAY) 51. the proposal at the Meeting. governance to ensure that our corporate governance practices continue to evolve as appropriate. The following table lists our four Board committees, as well as the chairs and members of each committee, for our entire 2014 fiscal year and at present. The Audit Committee is Each member of the Audit Committee has been determined by the Board to meet the standards of independence required of audit committee members by the NYSE and applicable SEC rules. For more information on the NYSE standards for independence, see “Director Independence” above. The Board has also determined that all members of the Audit Committee are financially literate, and that Edward G. Boehne possesses accounting and related financial management expertise within the meaning of the listing standards of the NYSE and is an “audit committee financial expert” within the meaning of the applicable SEC rules. For a description of Mr. Boehne’s relevant experience, see The The duties and responsibilities of the Compensation Committee are set forth in its charter, which may be found at www.tollbrothers.com under “Investor Relations: Corporate Governance,” and include, among other things: In fulfilling its responsibilities, the Compensation Committee may delegate any or all of its responsibilities to a subcommittee of the committee. For a discussion concerning the process and procedures for determining executive 25. The Compensation Committee held The The duties and responsibilities of the compensation of our directors. The The The Public Debt and Equity Securities Committee is, and for the entire The duties and responsibilities of the Public Debt and Equity Securities Committee this proxy statement. The Compensation Committee has Each full day Board meeting Each telephonic Board meeting Each Board committee meeting Each member . Directors, Committee Chairs and Committee members do not receive any additional compensation for attendance at Board or Committee meetings. Name Robert S. Blank Edward G. Boehne Richard J. Braemer Christine N. Garvey Carl B. Marbach Stephen A. Novick Paul E. Shapiro Bruce E. Toll Annual compensation Contribution to 401(k) Plan Total : Our revenues in fiscal 2014 of $3.91 billion and home building deliveries of 5,397 units rose 46% in dollars and 29% in units compared to fiscal 2013 and were the highest for any fiscal year since fiscal 2007. The Board and the Compensation Committee believe that our ability to retain and motivate NEOs who possess the skills, experience, and benefits. Element Purpose Characteristics Benefits and Perquisites, Including Retirement Benefits Robert I. Toll Douglas C. Yearley, Jr. Zvi Barzilay Martin P. Connor Decisions our Peer Group. For a description of the material terms of the Senior Officer Bonus Plan, see "Proposal Four— Approval of Toll Brothers, Inc. Senior Officer Bonus Plan" on pages 12 to 14. areas of contracts, backlog, and SG&A. Additionally, the Committee recognized the NEOs’ efforts in management of growth in a recovering economy, integration of the Shapell acquisition, focus on growth opportunities, development and execution of strategy, and industry honors received. The Committee also considered the leadership of each NEO in the areas of Company strategy, brand management, investor and analyst relations, and balance sheet management. For further discussion of these considerations, see “2014 Company Performance” on pages 25 to 26 and “Review of Individual Performance” on page 30. The Committee did not establish any individual performance goals for the NEOs at the commencement of fiscal 2014. this proxy statement. may ultimately cause an increase in the market price of our stock; See “Potential Payments upon Termination or Change of Control” on page 48 of this proxy statement. . In December 2014, the Compensation Committee approved the grant of Performance RSUs for fiscal 2015 performance, subject to achievement of the award performance metrics in fiscal 2015, relating to the target levels of 133,667 shares to Mr. Toll; 100,000 shares to Mr. Yearley; 30,000 shares to Mr. Hartman; and 25,000 shares to Mr. Connor. The Committee determined that it would retain pre-tax income, home building margin, and units delivered as the performance metrics for the 2015 Performance RSUs. 2014. We share the cost of the above programs with our employees. Our NEOs participate in these programs on the same terms as our other employees. These programs are intended to promote the health and financial security of our employees and are provided at competitive market levels to attract, retain, and reward employees. encourage continued employment or service with 2014. We have no change of control agreements relating to employment benefits or See “Potential Payments upon Termination or Change of Control” on page 48 of this proxy statement. 2014. Name and Principal Position Robert I. Toll, Executive Chairman Douglas C. Yearley, Jr. Chief Executive Officer Zvi Barzilay(5), Former Chief Operating Officer Martin P. Connor Chief Financial Officer and Treasurer Name Robert I. Toll Douglas C. Yearley, Jr. Zvi Barzilay Martin P. Connor Payments for tax and financial statement preparation assistance Contribution to 401(k) Plan Life and disability premiums Auto and gas expense Cellular telephone allowance TOTAL: 
Wednesday,Tuesday, March 14, 201220122015 Annual Meeting of Stockholders (the “Meeting”) of Toll Brothers, Inc. (the “Company”) will be held on Wednesday,Tuesday, March 14, 201210, 2015 at 12:00 noon EDT, at the offices of the Company, 250 Gibraltar Road, Horsham, Pennsylvania 19044, for the following purposes:1. To elect the four directors nominated by the Board of Directors of the Company (the “Board”) and named in the proxy statement to hold office until the 2013 Annual Meeting of Stockholders and until their respective successors are duly elected and qualified.2. To ratify, in a non-binding vote, the re-appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the 2012 fiscal year.3. To approve, in an advisory and non-binding vote, the compensation of the Company’s named executive officers as disclosed in the proxy statement.4. To transact such other business as may properly come before the Meeting or any adjournment or postponement thereof.1. To elect the ten directors nominated by the Board of Directors of the Company (the “Board” or "Board of Directors") and named in the proxy statement to hold office until the 2016 Annual Meeting of Stockholders and until their respective successors are duly elected and qualified. 2. To ratify, in a non-binding vote, the re-appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the 2015 fiscal year. 3. To approve, in an advisory and non-binding vote, the compensation of the Company’s named executive officers as disclosed in the proxy statement. 4. To approve the Toll Brothers, Inc. Senior Officer Bonus Plan. 5. To transact such other business as may properly come before the Meeting or any adjournment or postponement thereof. 17, 201215, 2015 as the record date for the Meeting.Meeting (the "Record Date"). Only stockholders of record at that time are entitled to notice of and to vote at the Meeting and any adjournment or postponement thereof.mailedsent to stockholders on or about February 3, 2012.9, 2015. The Board urges you to sign, date, and return the enclosed proxy card promptly, although you are cordially invited to attend the Meeting in person. The return of the enclosed proxy card will not affect your right to vote in person if you do attend the Meeting.February 3, 2012ANNUAL OF STOCKHOLDERS TO BE HELD ON MARCH 14, 201220112014 Annual Report of Toll Brothers, Inc. are available at:ATTENDANCE AT — ADMISSION POLICY AND PROCEDURESourthe Company’s offices at 250 Gibraltar Road, Horsham, Pennsylvania 19044 and will begin promptly at 12:00 noon EDT. Directions to the Meeting are available at: www.tollcareercenter.com/directions. All attendeesunder “Directions” at www.tollcareercenter.com. You must present a valid photo identification to be admitted to the Meeting. Cameras (including cellular phones or PDAspersonal digital assistants, or “PDAs”, with photographic capabilities), recording devices and other electronic devices, and the use of cellular phones or PDAs, will not be permitted at the Meeting. Representatives will be at the entrance to the Meeting, and these representatives will have the authority, on the Company’s behalf, to determine whether the admission policy and procedures have been followed and whether you will be granted admission to the Meeting.Admission Policy and Procedures(A) stockholders, who may own shares directly in their names (“record holders”); (B) stockholders whose shares are held for them, or in “street name” by banks, brokerages, or other intermediaries (“beneficial holders”); and (C) authorized representatives of entities who are beneficial holders. Beneficial holders. In addition to photo identification, you must present evidence of their ownership as of the Record Date, such as a letter from the bank, broker, or other intermediary confirming ownership, or the relevant portion of a bank or brokerage firm account statement. In addition to any evidence requiredIf you are the authorized representative of an entity that is a beneficial holders, above, authorized representativesholder, you must present (1) a letter from the record holderentity certifying to the beneficial ownership of the entity they represent and (2) a letter from the entity certifying to theiryour status as an authorized representative.Record HoldersBeneficial Holders, please:If you plan tovote by proxy but attend the Meeting in person, please:and returnindicating your intention to attend;2. Send written notice* of your intention to attend the Meeting to the address below** byFebruary 29, 2012; and3., please:If you plan toattend and vote at the Meeting, please::2address below**Company's headquarters by
February 29, 2012;27, 2015 to the attention ofaddress below**Company's headquarters by29, 2012;27, 2015 to the attention of* Written notice should include: (1) your name, complete mailing address and phone number, (2) if you are a beneficial holder, evidence of your ownership, and (3) if you are a beneficial holder who is not a natural person and will be naming a representative to attend on your behalf, the name, complete mailing address and phone number of that individual. If you do not provide the requested information by February 29, 2012,27, 2015, please be prepared to show it at the entrance to the Meeting in order to gain admission. Failure to provide such information either in advance or at the Meeting may result in non-admission to the Meeting.**Toll Brothers, Inc., 250 Gibraltar Road, Horsham, PA 19044, Attention: Michael I. Snyder, Secretary Page Number1148910193232434343454545464646A-1 250 Gibraltar RoadHorsham, Pennsylvania 19044For14, 201210, 2015Name Age Principal Occupation Independent Robert I. Toll 74 1986 Executive Chairman of the Board of Directors, Toll Brothers, Inc. Bruce E. Toll 71 1986 Vice Chairman of the Board of Directors, Toll Brothers, Inc. Principal, BET Investments Douglas C. Yearley, Jr. 54 2010 Chief Executive Officer, Toll Brothers, Inc. Robert S. Blank 74 1986 ü Edward G. Boehne 74 2000 Retired President, Federal Reserve Bank of Philadelphia ü Richard J. Braemer 73 1986 Senior Counsel, Ballard Spahr LLP ü Christine N. Garvey 69 2009 ü Carl B. Marbach 73 1991 President, Greater Marbach Airlines, Inc. ü Stephen A. Novick 74 2003 Senior Advisor, The Andrea and Charles Bronfman Philanthropies ü Paul E. Shapiro 73 1993 Chairman, Q Capital Holdings LLC ü (the “Board”) of Toll Brothers, Inc., a Delaware corporation, for use at the Toll Brothers, Inc. 2012 Annual Meeting, of Stockholders (the “Meeting”), which will be held on the date, at the time and place, and for the purposes set forth in the foregoing notice, and any adjournment or postponement thereof. Any reference to “Toll Brothers” or any use of the terms “Company,” “we,” “us” or “our” in this proxy statement refers to Toll Brothers, Inc. This proxy statement and the enclosed proxy card are first being sent to our stockholders on or about February 3, 2012.acting as your designated proxies, will vote or otherwise act thereon in accordance with his or their judgment on such matters.SECURITYBENEFICIAL OWNERSHIPShares Entitled To Vote, Quorum and Required Voterecord dateRecord Date fixed by our Board for the determination of stockholders entitled to notice of and to vote at the Meeting is January 17, 2012 (the “Record Date”).15, 2015. At the close of business on the Record Date, there were 166,623,070175,465,694 shares of our common stock outstanding and eligible to vote at the Meeting. We have no other class of voting securities outstanding. At the Meeting, stockholders will be entitled to one vote for each share of common stock owned at the close of business on the Record Date.consideration of the mattersproposals expected to be voted on at the Meeting. Abstentions and broker non-votes represented by submitted proxies will be included in the calculation of the number of the shares present at the Meeting for the purposes of determining a quorum. “Broker non-votes” meansare shares held of record by a broker that are not voted on a matter because the broker has not received voting instructions from the beneficial owner of the shares and lacks the authority to vote the shares in its discretion.Proposal One: Directors are elected by a plurality of the votes cast at the Meeting which means that the four nominees who receive the most votes will be elected. ismay not permitted to vote your shares with respect to ProposalProposals One, Three, or Four without specific instructions from you as to how to vote, with respect to the election ofbecause each of the four nominees fordirector, because the election of directorsthese proposals is not considered a “routine” matter under the NYSE rules. Abstentions and broker non-votes represented by submitted proxies will not be taken into account in determining the outcome of the election of directors.Proposal Two: To be approved, this proposal requires an affirmative vote of a majority of the votes cast. This means that the votes that our stockholders cast “FOR” this proposal must exceed the votes that our stockholders cast “AGAINST” this proposal at the Meeting. Your vote will not be binding on the Board or the Company. Proposal Two is considered a “routine” matter under the NYSE rules and therefore brokerage firms and nominees that are members of the NYSE have the authority under those rulesare permitted to vote their customers’ shares on Proposal Two if the customers have not furnished voting instructions within a specified period of time prior to the Meeting. Abstentions will not be taken into account in determiningTo elect directors and adopt the outcome of this proposal.Proposal Three: To be approved, this proposal requires an affirmative vote of a majority ofother proposals, the following votes cast. This means that the votes thatare required under our stockholders cast “FOR” this proposal must exceed the votes that our stockholders cast “AGAINST” this proposal at the Meeting. Because your vote is advisory, it will not be binding on the Board or the Company. Proposal Three is not considered a “routine” matter under the NYSE rulesgoverning documents and therefore, brokerage firms and nominees that are members of the NYSE will not be able to vote the shares of customers from whom they have not received voting instructions with regard to this proposal. Abstentions and broker non-votes represented by submitted proxies will not be taken into account in determining the outcome of this proposal.Effect of Broker Non-Votes and Abstentions/Withhold Votes Proposal Vote Required Abstentions/ Withhold Votes 1. Election of Directors Plurality of the votes cast No No effect No effect 2. Ratification of Independent Auditors Majority of votes cast Yes Not applicable No effect 3. Advisory Vote to Approve Executive Compensation Majority of votes cast No No effect No effect 4. Approval of the Toll Brothers, Inc. Senior Officer Bonus Plan Majority of votes cast No No effect Against forthforth beneficial ownership, as of the Record Date, of our common stock by: (1) each person known to us to be the beneficial owner of more than 5% of our common stock; (2) each of our directors (which includes nominees for directordirector) and named executive officers;NEOs; and (3) all of our directors and executive officers as a group. To the best of our knowledge, each of the persons named in the table below as beneficially owning the shares set forth therein has sole voting power and sole investment power with respect to such shares, unless otherwise indicated. Amount and Nature of
Beneficial Ownership(1) Percent of
Common
Stock 24,928,420 15.0 % 10,415,179 6.26 15,919,912 9.39 5,156,727 3.09 1,545,805 * 185,792 * 212,900 * 174,700 * 33,100 * 294,277 * 177,900 * 351,459 * 304,131 * 18,000 * 23,019,722 13.45 Name of Beneficial Owner BlackRock, Inc. (2) 14,993,902 8.55 % Goldman Sachs Asset Management (3) 12,040,221 6.86 % The Vanguard Group (4) 9,487,538 5.41 % Robert I. Toll (5) 12,864,599 7.25 % Bruce E. Toll (6) 3,776,437 2.15 % Robert S. Blank 121,849 * Edward G. Boehne 164,632 * Richard J. Braemer 269,440 * Christine N. Garvey 64,833 * Carl B. Marbach (7) 239,092 * Stephen A. Novick 127,882 * Paul E. Shapiro 250,530 * Douglas C. Yearley, Jr. 683,883 * Richard T. Hartman 200,075 * Martin P. Connor 120,836 * All directors and executive officers as a group (12 persons) (1)(8) 18,884,088 10.54 % *Less than 1%(1) Shares issuable pursuant to restricted stock units (“RSUs”) , restricted stock awards and options exercisable within 60 days after the Record Date are deemed to be beneficially owned. Accordingly, the information presented above includes the following numbers of shares of common stock underlying RSUs restricted stock awards and options held by the following individuals, and all directors and executive officers as a group: Mr. Robert I. Toll, 2,880,9911,868,237 shares; Mr. Bruce E. Toll, 142,500 shares; Mr. Barzilay, 1,263,505112,210 shares; Mr. Blank, 184,150120,057 shares; Mr. Boehne, 192,950127,482 shares; Mr. Braemer, 174,500112,210 shares; Ms. Garvey, 33,15064,633 shares; Mr. Marbach, 192,950126,906 shares; Mr. Novick, 176,800126,482 shares; Mr. Shapiro, 188,350122,732 shares; Mr. Yearley, 184,195596,574 shares; Mr. Hartman, 173,160 shares; Mr. Connor, 18,000116,726 shares; and all directors and executive officers as a group, 4,529,1943,667,409 shares. Mr. Barzilay retired from the Board of Directors and as an officer and employee of the Company, effective December 31, 2011; his name is included in the above table because he is a named executive officer with respect to fiscal 2011; however, his shares are not included in the totals in the table relating to all directors and executive officers as a group.(2)FMR LLC filed a Schedule 13G with the Securities and Exchange Commission (the “SEC”) on February 14, 2011, which states that the address of FMR LLC (“FMR”) is 82 Devonshire Street, Boston, Massachusetts 02109, and that FMR has sole dispositive power with respect to 24,928,420 shares, and has sole power to vote or direct to vote with respect to 119,680 shares. Various persons have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares. One person, Fidelity Magellan Fund, an investment company registered under the Investment Company Act of 1940, had an interest in 12,853,054 shares, or 7.72%, as of the date the Schedule 13G was filed.(3)(2)BlackRock, Inc. (“BlackRock”) filed a Schedule 13G with the SEC13G/A on February 9, 2011,January 22, 2015 which states that the address of BlackRock is 40 East 52nd Street, New York, New York 10022, and that BlackRock has sole dispositive and voting power with respect to 10,415,17914,040,880 shares and sole dispositive power with respect to 14,993,902 shares. VariousAccording to the Schedule 13G/A filed by BlackRock, various persons have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares, and no one person’s interest isin our common stock was more than 5% of the total outstanding shares.common stock, as of the date the Schedule 13G/A was filed.(3) Goldman Sachs Asset Management L.P. and GS Investment Strategies, LLC ("GSAM") filed a Schedule 13G on February 13, 2014 which states that GSAM has shared voting power with respect to 11,966,167 shares and shared dispositive power with respect to 12,040,221 shares. According to the Schedule 13G filed by GSAM, various persons have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares, and no one person’s interest in our common stock was more than 5% of the total outstanding common stock, as of the date the Schedule 13G was filed. (4) The address for Mr. Robert I. Toll is c/o Toll Brothers, Inc., 250 Gibraltar Road, Horsham, Pennsylvania 19044. Vanguard Group ("Vanguard") filed a Schedule 13G on February 12, 2014, which states that Vanguard has sole dispositive power with respect to 9,360,344 shares, sole voting power with respect to 147,294 shares, and shared(5) Amount includes 251,375133,155 shares held by trusts for Mr. Robert I. Toll’s children and grandchildren, of which Mrs. Jane Toll, Mr. Robert I. Toll’s spouse, is a trustee with voting and dispositive power and as to which he disclaims beneficial ownership. Amount includes 6,820,3164,950,316 shares pledged to financial institutions to secure personal obligations of Mr. Robert I. Toll.(5)(6) Amount includes 4,442,9323,192,932 shares pledged to financial institutions to secure obligations of The Bruce E. Toll Revocable Trust (of which Mr. Bruce E. Toll is the sole trustee).(6)(7) Amount includes an aggregate of 9,400 shares beneficially owned by individual retirement accounts (“IRAs”) for the benefit of Mr. Marbach and his wife. Mr. Marbach disclaims beneficial ownership of the 4,700 shares held by his wife’s IRA. (7)Amount includes 24,500 shares pledged to a financial institution to secure personal obligations of Mr. Yearley.(8) The Board of Directors, after reviewing the functions of all of our officers, both in terms of designated functions and functions actually performed, has determined that only Messrs. Robert I. Toll, Douglas C. Yearley, Jr., Zvi BarzilayRichard T. Hartman and Martin P. Connor are deemed to be executive officers of the Company for purposes underof Item 403 of Regulation S-K of the Securities and Exchange Commission (“SEC”("SEC").(9)Includes 190,824 shares beneficially owned by Richard T. Hartman, our new Chief Operating Officer effective January 1, 2012.ONEAt2011 Annual MeetingBoard of Stockholders,Directors (the "Governance Committee") identifies individuals qualified to become members of the stockholdersBoard of Directors consistent with criteria approved an amendmentby the Board of Directors. The Governance Committee, in selecting, or in recommending the selection of, nominees for directors, considers applicable statutory, regulatory, case law, and NYSE requirements, including when appropriate those applicable to membership on the Company’s Second Restated CertificateAudit and Risk Committee and the Executive Compensation Committee, as well as other criteria it deems appropriate.Incorporation, as amended, to providethe Governance Committee, have prepared them for the annual election of directors beginningdealing with the classmulti-faceted financial, business, governance, and other issues that confront a Board of directors up for re-election at the 2012 Annual MeetingDirectors of Stockholders, continuinga corporation with the classsize, complexity, reputation, and success of directors upthe Company. Although the Governance Committee does not have a formal policy regarding diversity, it values diversity of viewpoints, background, and experience in considering candidates for re-election atBoard membership.2013 Annual Meetingcomposition of Stockholdersthe Board, including a review of Board size, the skills and culminatingqualifications represented on the Board, and director tenure. The findings of the Governance Committee's annual review of Board composition are reported to and discussed with the full Board. Based on its evaluation, the Governance Committee may recommend an increase or decrease in the size of the Board upor changes in the composition of the Board so as to best reflect the objectives and needs of the Company and the desired skill sets of the directors. Similarly, the Governance Committee may establish processes for re-election,developing candidates for Board membership and conducting searches for Board candidates.first timeskills and qualifications of each director, the Governance Committee considers the characteristics that the Committee believes should be represented on the Board as a group, atwhole. The Governance Committee also reviews the composition of the Board, as well as the skills and qualifications represented on the boards of the Company's peer group.Annual Meetingwhich included a comparison of Stockholders.10 directors divided into three classes. As previously disclosed, Zvi Barzilay retired from our Company and the Board, effective December 31, 2011. The Board determined to decrease the Board size from 11 members to 10 members following Mr. Barzilay’s retirement. The directors whose terms of office expire at the Meeting are Messrs. Douglas C. Yearley, Jr., Robert S. Blank, Stephen A. Novick and Paul E. Shapiro. Accordingly, the Board, upon the recommendation of the Nominating and Corporate Governance Committee, has nominated Messrs. Douglas C. Yearley, Jr., Robert S. Blank, Stephen A. Novick and Paul E. Shapiro, and our stockholders will be asked to elect these four directors,ten directors. Each current director is standing for re-election to hold office until the 20132016 Annual Meeting of Stockholders and until theirhis or her respective successors havesuccessor has been duly elected and qualified. Each nominee has indicated a willingness to continue to serve as a director. Should a nominee become unavailable to accept election as a director, the persons named in the enclosed proxy will vote the shares that such proxy represents for the election of such other person as the Board may nominate on the recommendation of the Nominating and Corporate Governance Committee.Set forth below is See page 2 for certain information concerning each currentregarding our director each nominee for election as a director atnominees.Meetingbusiness experience and qualifications of each director whose current termnominee and has concluded that the directors possess business experience in the areas set forth below. The Governance Committee believes that the directors' business experience in these areas brings value to the Board and to the Company in light of office will continue after the Meeting. Our directors’our business strategy, structure, and direction.as accomplished business leaders, their qualifications described below and thecoupled with our directors' knowledge and understanding of the Company’sCompany's operations, financial condition, governance, personnel, and business ethic gained by them over a lengthy periodtime, have led the Governance Committee and the Board of time (ten of our eleven directors have been serving the Company for over eleven years) have ledDirectors to the conclusion that each director provides the Company with unique perspective, insight, and skills relativethat enable him or her to our business strategy, structureprovide strong guidance and direction,leadership during all phases of the cycle of the real estate market and in times of management transition, and, therefore, that each should serve as a director of the Company. Age Director
Since Current
Term
Expires 71 1986 2014 Executive Chairman of the Board 68 1986 2014 Vice Chairman of the Board 51 2010 2012 Chief Executive Officer and Director 71 1986 2012 Director 71 2000 2013 Director 70 1986 2013 Director 66 2009 2014 Director 70 1991 2013 Director 71 2003 2012 Director 70 1993 2012 Director Name Leadership Industry Operating Business Development and Marketing Corporate Governance and Law Other Board Experience Robert I. Toll ü ü ü ü ü ü Bruce E. Toll ü ü ü ü ü ü Douglas C. Yearley, Jr. ü ü ü ü ü Robert S. Blank ü ü ü ü ü Edward G. Boehne ü ü ü ü ü Richard J. Braemer ü ü ü ü ü ü Christine N. Garvey ü ü ü ü ü ü Carl B. Marbach ü ü ü ü Stephen A. Novick ü ü ü ü Paul E. Shapiro ü ü ü ü ü ü given rise to the establishment ofestablished the Company as the country’s leading luxury homebuilder over the 25 years since its inception.homebuilder.thewith his brother of Robert I. Toll, hasfounded our predecessor’s operations in 1967. He been a member of our Board since our inception in May 1986 and served as our Chief Operating Officer until May 1998 and our President until November 1998. He is a member of the Public Debt and Equity Securities Committee. Mr. TollHe is the founder and presidentPrincipal of BET Investments, a commercial real estate company, and the owner of several automobile dealerships. From June 2006 through August 2009, Mr. Tollhe was the Chairman of Philadelphia Media Holdings, L.L.C., the parent company of the Philadelphia Inquirer and the Philadelphia Daily News, and from December 2007 through February 2009, he served on the board of directors of Fifth Street Finance Corp., a company that lends to and invests in small and mid-sized companies. He brings to the Board his knowledge and experience as a co-founder of the Company and his service in various executive, director and advisory positionsJr.Jr. has been a member of our Board since June 2010. He joined us in 1990, specializing in land acquisitions from financial institutions. He has been an officer since 1994, holding the position of Senior Vice President from January 2002 until November 2005, and the position of Regional President from November 2005 until November 2009, when he was promoted to Executive Vice President. Since June 2010, he has been our Chief Executive Officer. Prior to joining us, Mr. Yearley practiced law in New Jersey as a commercial litigator. He brings to the Board a deep understanding of our industry and our business as a result of the significant operational roles in which he has served over the 2124 years he has been with the Company;Company, his managerial and leadership experience, and his background as an attorney have been positive contributors to the Company.legal background.For more than the past five years,Since 2003, Mr. Blank has been Co-Chairman and Co-Chief Executive Officer of Whitney Communication Company (“WCC”) and Senior Partner of Whitcom Partners. Whitney Communications CompanyWhitcom Partners and Whitcom Partnersits two partners individually make investments in public and non-public companies. From August 2001 until June 2007, Mr. Blank was a member of the board of directors of Advanta Corp. He brings to the Board the skills and experience gained in his executive leadership roles in a major company in the communications industry, as well as in the investment field.the Company’sour Lead Independent Director since March 2011. He is the Chair of the Nominating and Corporate Governance Committee and a member of the Audit and Risk Committee. From 1981 until his retirement in May 2000, Mr. Boehne was the President of the Federal Reserve Bank of Philadelphia. Mr. Boehne is a member of the board of directors of Beneficial Mutual Bancorp, Inc., and its subsidiary, Beneficial Bank, Penn Mutual Life Insurance Co. and AAA Mid-Atlantic, Inc. (including the related holding company, AAA Club Partners). Mr. Boehne is also a member of the board of directors of, and Senior Economic Advisor to, the Haverford Trust Company. He brings to the Board his reputation and accomplishments as a leader and expert in the Federal bank regulatory field, as well as his current service in various board and advisory positions with high profile companies in the banking and insurance industries.Andrews & Ingersoll, LLP, where he was a partner from 1994 through 2008. Mr. Braemer is a director, Chairman of the GovernanceCompensation Committee and past Chairman of the Board of Directors of the Albert Einstein Healthcare Network, a Philadelphia-based, non-profit healthcare network. In addition to his professional skills as an attorney practicing primarily in the field of mergers and acquisitions, including transactions with a real estate element,transactions, he brings to our Board the experience gained both as a former board member and audit committee chair of a public company and as an advisor to boards, board committees and independent directors of publicly and privately held corporations.and Maguire Properties, Inc. She has served as a member of the board of ProLogis since September 2005, when Catellus Development Corporation, whereof which she had been a member of the board since 1995, merged into a subsidiary of ProLogis. Ms. Garvey served on the board of directors of Hilton Hotels Corporation through October 2007. She brings to the Board her extensive knowledge of and background in real estate and banking and her experience in executive leadership positions and board memberships with various public entities in the national real estate market. and Florida Professional Aviation, Inc., companiesa company that provideprovides aviation and consulting services. From January 1995 to January 2004, Mr. Marbach was President of Internetwork Publishing Corp., an electronic publisher, which he founded. He brings to the Board his expertise in the field of information technology, as well as his entrepreneurial experiences in building businesses in that and other industries. 30, 2004, Mr. Shapiro has been Chairman of the Board of Q Capital Strategies,Holdings LLC, aand he is Chairman of the Board of its two operating companies that are in the life settlement company.business. From January 1, 2004 to June 30, 2004, Mr. Shapiro was Senior Vice President of MacAndrews & Forbes Holdings, Inc., a private holding company of operating businesses. From June 2001 to December 2003, Mr. Shapiro was Executive Vice President and Chief Administrative Officer of Revlon Inc. Prior thereto, Mr. Shapiro practiced corporate and securities law as a managing shareholder of the Palm Beach County office of Greenberg Traurig LLP (which acquired Shapiro and Bregman, a firm he co-founded) and was a partner in Wolf, Block, Schorr and Solis-Cohen. He brings to the Board his extensive business experience in executive positions with various nationally known companies, which he has served in a wide variety of capacities that have drawn upon his legal and entrepreneurial skills, including those in the areas of corporate governance and the regulatory corporate environment. We have been advised that it is the intention of Messrs. Robert I. Toll and Bruce E. Toll to vote the shares of common stock they each own “FOR” the election of each of the nominees named above. See “Voting Securities and Security Ownership — Security Ownership of Principal Stockholders and Management.”THE ELECTION OFDOUGLAS C. YEARLEY, JR., ROBERT S. BLANK, STEPHEN A. NOVICK AND PAUL E. SHAPIRO.TWOTheregistered public accounting firm (“independent auditors”)auditors for the fiscal year ending October 31, 2012.2015. Ratification is being sought at the Meeting in a non-binding vote of stockholders.has auditedto our consolidated financial statements since 1984. shareholders for ratification because we value our stockholders' views on the Company’s independent auditors. If our stockholders fail to ratify the selection, it will be considered notice to the Board and Audit Committee to consider the selection of a different firm.paid toearned for services rendered by Ernst & Young LLP for professional services for the fiscal years ended October 31, 20112014 and 2010: 2011 2010 $ 856,283 $ 834,000 30,000 30,000 85,536 69,398 $ 971,819 $ 933,398 2014 2013 Audit Fees (1) $ 1,313,831 $ 1,298,645 Audit-Related Fees (2) 40,485 31,995 Tax Fees (3) 40,000 23,398 All Other Fees — — $ 1,394,316 $ 1,354,038 (1) “Audit Fees” include fees billed for (a) the audit of Toll Brothers, Inc. and its consolidated subsidiaries, (b) the audit of the Company’s internal control over financial reporting, (c) the review of quarterly financial information, and (d) the issuance of consents and comfort letters to underwriters in various filings with the SEC. (2) “Audit-Related Fees” include fees billed for audits of a certain joint venture in which we have an interest.interest, workpaper review of an acquired entity, and fees for the use of the independent auditors’ technical accounting research tool.(3) “Tax Fees” include fees billed for consulting on tax planning matters and tax compliance matters. specificspecified services. Any work that exceeds these pre-approved limits in a quarter requires the advance approval of the Audit Committee. Each quarter the Audit Committee reviews the matters worked on by the independent auditors during the previous quarter and establishes any pre-approved limits for the current quarter. All fees and services for fiscal 20112014 were approved by the Audit Committee. The Audit Committee also reviewed and approved the compatibility of non-audit services, including tax services, with the independent registered public accounting firm’sErnst & Young LLP’s independence. The Audit Committee reviewed the services provided by Ernst & Young LLP and approved the fees paid to Ernst & Young LLP for all services for fiscal 2011.THREEexecutive compensation of its NEOs annually to our stockholders on a non-binding basis, and our Board has adopted that approach. In accordance with the requirementsthis outcome of that stockholder vote and regulations under Section 14A of the Securities Exchange Act of 1934, (which was added by the Dodd-Frank Wall Street Reform and Consumer Protection Act and the related rules of the SEC)as amended (the “Exchange Act”), we are including in this proxy statement a separate resolution, subject to a non-binding stockholder vote, to approve the compensation of our named executive officers (“NEOs”)NEOs as disclosed in this proxy statement. In considering their vote, we encourage stockholders may wish to carefully review our compensation policies and decisions regarding our NEOs as presented in the “Compensation Discussion and Analysis” and the tabular (and accompanying narrative) disclosure on pages 1925 to 32. Executive Compensation Committee (the “Compensation Committee”) has developed and maintained a compensation program that is intended to reward performance and encourage actions that drive success in our short- and long-term business strategy.Stockholders Meeting in a non-binding vote.respectively. In determining fiscal 20112014 compensation for our NEOs, and as described in the “Compensation Discussion and Analysis — Compensation Decision Making Process,”Analysis” starting on page 25, the Compensation Committee took noterecognized that fiscal 2014 was a year of significant progress in growing our revenues and profits. The Compensation Committee paid particular attention to the difficult conditions that continued to challenge the economy and the home building industry while also considering the significant transition that we continued to experience at the senior management level. The following significantnotable areas of achievementour performance and our management’s achievements in fiscal 2011 were among those noted by the Compensation Committee in light of the current economic condition of our industry2014 set forth under “Compensation Discussion and the economy as a whole:•Sales: Our net contracts signed in fiscal 2011 increased by approximately 9% in dollars and 7% in units compared to fiscal 2010.•Backlog: Our backlog at fiscal year end 2011 increased 15% in dollars and 12% in units compared to fiscal 2010.•Income: We reported net income of $39.8 million in fiscal 2011 compared to net losses of $3.4 million and $755.8 million in fiscal 2010 and 2009, respectively. Excluding write-downs and debt retirement charges, our pre-tax income improved to $67.2 million in fiscal 2011 compared to a pre-tax loss of $0.7 million in fiscal 2010 on similar revenue volume.•Gross margin: Our pre-impairment home building gross margin improved nearly 2.5% in fiscal 2011 compared to fiscal 2010.•Community Count: We increased our community count from 195 to 215 during fiscal 2011.•Expansion of our Business:Shortly after the close of fiscal 2011, we completed the acquisition of substantially all of the assets of CamWest Development LLC, marking our expansion into the Seattle market.•The continued expansion of the “Toll Brothers City Living®” brand name with the opening for sale of three new buildings in the New York urban market.Gibraltar Capital and Asset Management LLC (“Gibraltar Capital”), our wholly owned subsidiary formed in 2010Analysis—2014 Company Performance” on pages 25 to pursue a broad range of distressed real estate opportunities, executed four acquisition transactions during fiscal 2011, representing $70.1 million in capital invested and generated net income of $6.9 million.•Honors: During fiscal 2011, Institutional Investor Magazine named our CEO and CFO to the 2012 All America Team for the Homebuilding and Building Products Industry. We were voted the first-place ranking for Best Investor Relations in the Homebuilders & Building Products sector by the buy-side community in Institutional Investor Magazine’s 2012 annual survey.•Financial Strength: We continue to have one of the strongest balance sheets in the industry. We maintain significant liquidity and strong land positions and believe we are well positioned for the ultimate recovery in the housing markets.We believe that our Compensation Committee has developed NEO compensation that is incentivizing outstanding performance and achievements in light of the current economic condition of our industry and the economy as a whole.ofpaid to the Company’s named executive officers as disclosed pursuant to Item 402 of Regulation S-K, including the “Compensation Discussion and Analysis” beginning on pages 19 to 32 inpage 25 of the Proxy Statement relating toproxy statement and the Company’s Annual Meetingrelated compensation tables and narrative discussion.Stockholders to be heldthe votes cast on March 14, 2012.”Name and Position Robert I. Toll, Executive Chairman (1 ) Douglas C. Yearley, Jr., Chief Executive Officer (1 ) Richard T. Hartman, President and Chief Operating Officer (1 ) Martin P. Connor, Chief Financial Officer (1 ) Current Executive Officers as a Group (2 ) Non-Executive Director Group (3 ) Non-Executive Officer Employee Group (3 ) (1) For the Awards already established by the Compensation Committee under the Senior Officer Plan, assuming stockholder approval of the Senior Officer Plan and assuming the same actual performance as in fiscal 2014, the Compensation Committee would have the ability to award up to the Award Cap of $8.5 million to each participant; however, the Compensation Committee has never awarded the maximum allowable amount to these participants under the existing Senior Officer Plan and has consistently awarded amounts that are far less than the maximum permissible. For example, in fiscal 2014, the Compensation Committee could have awarded up to $8.5 million to each of the NEOs under the terms of the Senior Officer Plan; however, the Compensation Committee, in its discretion, awarded bonuses of $1,500,000, $2,300,000, $800,000, and $800,000 to each of Mr. Robert I. Toll, Mr. Yearley, Mr. Hartman, and Mr. Connor, respectively, for fiscal 2014. (2) There are four current executive officers who are currently eligible for the Senior Officer Plan in fiscal 2015: Mr. Robert I Toll, Mr. Yearley, Mr. Hartman, and Mr. Connor. If each executive officer was awarded the maximum potential Award, assuming the same actual performance as in fiscal 2014, the aggregate amount paid to such executive officers as a group could equal four times the Award Cap. However, as noted above, the Compensation Committee has never awarded the maximum allowable amount payable under the Senior Officer Plan and has consistently awarded amounts that are far less than the maximum permissible. (3) There are no non-executive directors or non-executive officer employees who are participants in the Senior Officer Plan. Plan Category (a) (b) (c) (In thousands) (In thousands) Equity compensation plans approved by security holders 10,647 $ 25.9396 8,821 — — Total 10,647 $ 25.9396 8,821 (1) Amount includes 9,358,000 shares and 1,289,000 shares of stock options and RSUs, respectively, outstanding as of October 31, 2014. The amount of performance-based RSUs, which is included in the RSU amount, reflects the maximum number of shares that could be issued under the fiscal 2014 award as further described under "Performance-Based RSUs" on page 36. (2) The weighted-average exercise price does not take into account the 1,289,000 shares of RSUs outstanding as of October 31, 2014. AND BOARD MATTERScontinueare committed to operate within a comprehensive plan of corporate governance for the purpose of defining independence, assigning Board committee responsibilities, setting high standards of professional and personal conduct, and assuring compliance with such responsibilities and standards. WeThe Board and the Governance Committee regularly monitor developments in the area of corporate governance.the Companyus and the directors, and their immediate family members or entities with which they are affiliated, that the Board, in its judgment, has determined to be material or immaterial in assessing a director’s independence. The standards applied by the Board in affirmatively determining whether a director is “independent” generally provide that a director is not independent if:whopersonally works on our audit; or (d) the director or an immediate family member was, within the last three years, a partner or employee of such a firm and personally worked on our audit within that time;each such director provided written assurancesthe Board determined that (a) all of the above-cited objective criteria for independence are satisfied, and (b) he or shethat no independent director has no other “material relationship”any material relationship with us that could interfere with his or her ability to exercise independent judgment.Corporate Governance GuidelinesThe Board has adopted Corporate Governance Guidelines, which describeBoard’s views on a numbermembers of governance topics. The guidelines can be obtained free of charge from our website atwww.tollbrothers.comunder “Investor Relations: Corporate Governance.”Board MeetingsThe Board held four meetingsthe Compensation Committee during our 2011 fiscal year.Each director during our 2011the fiscal year attended at least 75%ended October 31, 2014 has ever been an officer or employee of the meetingsCompany or its subsidiaries. None of the members has any relationship required to be disclosed under this caption under the rules of the SEC.and ofwho are management directors will be referred to the committees of which heintended Board member(s) except to the extent that it is deemed unnecessary or she was a member.Our independent directors hold separate meetings. Edward G. Boehne,inappropriate to do so pursuant to the Company’s Lead Independent Director, acts as chair at meetings ofprocedures established by the independent directors. During our 2011 fiscal year, theCommunications directed to independent directors met four times.CommitteeCommittee; and Public Debt and Equity Securities Committee.Name Independent Audit and Risk Committee Robert I. Toll Bruce E. Toll M Douglas C. Yearley, Jr. Robert S. Blank ü M M Edward G. Boehne ü M C Richard J. Braemer ü C Christine N. Garvey ü M Carl B. Marbach ü M C M Stephen A. Novick ü M M Paul E. Shapiro ü C M currently comprisedcomposed of Paul E. Shapiro (Chair), Edward G. Boehne, Christine N. Garvey, and Carl B. Marbach, each of whom was a member of the Audit Committee for our entire 20112014 fiscal year.Proposal One.registered public accounting firm; and terms, all internal-control related services and all permitted non-audit engagements (including the terms thereof) with the independent auditor; and terms, all internal-control related services and all permitted non-audit engagements (including the terms thereof) with the independent auditor; and performance of our internal audit function.The Audit Committee also has the responsibility and authority for the appointment, compensation, retention, evaluation, termination andwith respect to oversight of the independent registered public accounting firm, and pre-approvalCompany’s financial reporting process are described more fully on page 52 under “Report of audit and permissible non-audit services provided by the independent registered public accounting firm.TheAudit Committee.” During fiscal 2014, the Audit Committee held four10 regular meetings during the 2011 fiscal year.meetings. All of its meetings were attended by representatives from Ernst & Young LLP, our independent registered public accounting firm, to consider, among other things, the scope of the annual audit and issues of accounting policy and internal control. In addition, the Audit Committee had four meetings with our management and representatives from Ernst & Young LLP during the 2011 fiscal year, prior to each public release of our quarterly and annual financial information. Executive Compensation Committee (the “Compensation Committee”) was,is, and for the entire 20112014 fiscal year comprisedwas, composed of Carl B. Marbach (Chair) and, Stephen A. Novick, and since December 15, 2010, Paul E. Shapiro, each of whom has been determined by the Board to meet the NYSE’s standards for independence.independence required of compensation committee members. In addition, each committee member has been determined by the Board to qualifyqualifies as a “Non-Employee Director” as defined in Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and as an “outside director” as defined for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”).Chief Executive Officer; CEO;Chief Executive OfficerCEO in light of those goals and objectives and determining each of the Executive Chairman of the Board’s and Chief Executive Officer’sCEO’s compensation level based on these evaluations; annually shareholderstockholder advisory vote on “say-on pay;” Say on Pay;Toll Brothers, Inc. Cash Bonus Plan (the “Cash Bonus Plan”), the Toll Brothers, Inc. Senior Officer Bonus Plan (the “Senior Officer Plan”), and the Toll Brothers, Inc. Supplemental Executive Retirement Plan (the “SERP”); SERP;the Company’sour regulatory compliance with respect to compensation matters.19.threetwo regular meetings and one special meeting during fiscal 2014. During fiscal 2014, the 2011 fiscal year, one of which took place over multiple sessions. Nominating and Corporate Governance Committee is, and for the entire 20112014 fiscal year was, comprisedcomposed of Edward G. Boehne (Chair), Robert S. Blank, and Stephen A. Novick, each of whom has been determined by the Board to meet the NYSE’s standards for independence. Nominating and Corporate Governance Committee are set forth in its charter, which may be found at www.tollbrothers.com under “Investor Relations: Corporate Governance,” and include, among other things:objectivescomposition of the CompanyBoard, including a review of Board size, the skills and qualifications represented on the Board; Board, and director tenure;non-employeenon-management directors;shareholders; stockholders;the Company’sour governance instruments;partyperson transactions; and acting on behalf ofcertain administrative matters. Nominating and Corporate Governance Committee, along with the Board, administers the Toll Brothers, Inc. Amended and Restated Stock Incentive Plan for Non-Employee Directors (2007) (the “Directors Plan”). Nominating and Corporate Governance Committee held fourthree regular meetings and two special meetings during the 2011 fiscal year.20112014 fiscal year was, comprisedcomposed of Richard J. Braemer (Chair), Robert S. Blank, Carl B. Marbach, and Bruce E. Toll.•The duties and responsibilities of the Public Debt and Equity Securities Committee are set forth in its charter, which may be found atwww.tollbrothers.com under “Investor Relations: Corporate Governance,” and include reviewing and approving, pursuant to authority granted by the Board, certain transactions relating to the public debt and equity securities of the Company and its affiliates.did not hold a formalare set forth in its charter, which may be found at www.tollbrothers.com under “Investor Relations: Corporate Governance,” and include reviewing and approving, pursuant to authority granted by the Board, certain transactions relating to our public debt and equity securities and those of our affiliates. The Public Debt and Equity Securities Committee held two meetings during fiscal 2014.the 2011our 2014 fiscal year. Nominating and Corporate Governance Committee is authorized to consider candidates for Board membership suggested by its members and by other Board members, as well as by management and by stockholders. A stockholder who wishes to recommend a prospective nomineecandidate for membership on the Board should follow the procedures described in this proxy statement under the caption “Procedures for Nominating Candidates or Recommending Candidates for Nomination to the Board of Directors.” Once a prospective nomineecandidate has been identified by, or presented to, the Nominating and Corporate Governance Committee, background information is elicited about the candidate, and the candidate is investigated and evaluated by the Nominating and Corporate Governance Committee and, if deemed appropriate, interviewed. Following this process, the Nominating and Corporate Governance Committee reports to the Board and makes a recommendation regarding the prospective nominee.candidate. No distinctions are to be made as between internally-recommended candidates and those recommended by stockholders. All candidates should, atFor a minimum, possess a background that includes a strong education, extensive business experience and the requisite reputation, character, integrity, skills, judgment and temperament, which, in the Nominating and Corporate Governance Committee’s judgment, have prepared him or herdiscussion of criteria for dealing with the multi-faceted financial, business and other issues that confront a boardmembership on our Board of directorsDirectors, see "Board Membership Criteria" on page 6 of a corporation with our size, complexity, reputation and success. The Nominating and Corporate Governance Committee does not have a policy regarding diversity.Company business functions within the Company that are charged with risk assessment and business continuity planning. This committee meets on a regular basis and selects topics related to specific risks and potential vulnerabilities related to particular business functions of the Company, which topics are then presented to the Audit Committee along with a summary of the measures the Company haswe have taken or plansplan to take in order to define and mitigate such risks and prepare for and address such vulnerabilities. These presentations includehave included reports regarding risks and vulnerabilities relating to, among other things, operations, assets, land investments, competition, personnel, credit and debt covenant compliance, joint venture relationships, financial reporting, insurance, financing, mortgages, treasury, storm water compliance, safety, litigation exposure, and information technology.executive officerour compensation practices, and our Nominating and Corporate Governance Committee oversees succession risks. Each of the standingthese committees regularly reports to the full Board, which is ultimately responsible for overseeing risks at the enterprise level. In addition, our full Board oversees strategic risks through its focus on overall corporate strategy and execution. also reviewed the design and operation of the Company’sour compensation structures and policies as they pertain to risk and has determined that the Company’sour compensation programs do not create or encourage the taking of risks that are reasonably likely to have a material adverse effect on the Company.Codes of Business Conduct and EthicsManagement has adopted a Code of Ethics for Principal Executive Officer and Senior Financial Officers, violations of which may be reported to the Audit Committee. Copies of this code and any waiver or amendment to such code can be obtained free of charge from our website atwww.tollbrothers.com under “Investor Relations: Corporate Governance.”We operate under a comprehensive Code of Ethics and Business Conduct that we review annually and which applies to all directors, officers and employees and includes provisions ranging from conflicts of interest and acceptance of gifts to harassment, discrimination and other employment-related matters. Upon employment with us, all employees are required to affirm in writing their receipt and review of the code and their compliance with its provisions. Copies of this code can be obtained free of charge from our website atwww.tollbrothers.com under “Investor Relations: Corporate Governance.”Leadership StructureIn connection with the appointments of Douglas C. Yearley, Jr. as Chief Executive Officer and Robert I. Toll as Executive Chairman of the Board, each effective June 16, 2010, the Board separated the roles of chairman and chief executive officer. As our Chief Executive Officer, Mr. Yearley is responsible for our day-to-day operations and for formulating and executing our long-term strategies in collaboration with the Board and Mr. Toll, as Executive Chairman of the Board. As Executive Chairman of the Board, Mr. Toll continues to play a key role and be actively involved in our business. He continues to chair the Board, act as advisor to the executive officers, actively engage in the review of land transactions, and play a major role in the planning of our long-term business strategy. In the Board’s view, an appropriate leadership structure depends on the opportunities and challenges facing a company at a given time. us. Board believes that the current leadership structure is appropriate for the Company at this time as it enables us and the Board to continue to benefit from Mr. Toll’s vast experience, skills, expertise and knowledge of the Company and the industry.In fiscal 2011, the Board designated Edward G. Boehne as the Lead Independent Director of the Board of Directors until his successor is duly designated and qualified. The Lead Independent Director helps ensure that there is an appropriate balance between management and independent directors and that the independent directors are fully informed and able to discuss and debate the issues that they deem important. The role of the Lead Independent Director includes: (i) presiding over all executive sessions and other meetings of the independent directors; (ii) acting as principal liaison between the Executive Chairman of the Board and the independent directors; (iii) serving as the director whom stockholders may contact; (iv) leading the process for evaluating theBoard of Directors and the committees of the Board of Directors; (v) participating in the communication of sensitive issues to the other directors; and performing such other duties as the Board of Directors may deem necessary and appropriate from time to time.Compensation Committee Interlocks and Insider ParticipationNone of the members of the Compensation Committee during the fiscal year ended October 31, 2011 has ever been an officer or employee of the Company or its subsidiaries.Personal Loans to Executive Officers and DirectorsWe do not permit personal loans to or for the benefit of our directors or executive officers.Director Attendance at Annual Meetings of StockholdersIt is the policy of our Board that all directors attend annual meetings of stockholders except where the failure to attend is due to unavoidable circumstances or conflicts discussed in advance by the director with the Executive Chairman of the Board. All members of the Board who were serving or standing for re-election, other than Bruce E. Toll, attended our 2011 Annual Meeting of Stockholders.Communication with the BoardAny person who wishes to communicate with the Board or specific individual directors, including the chair of the independent directors meetings or the independent directors as a group, may do so by directing a written request addressed to such directors or director in care of the Office of the General Counsel, Toll Brothers, Inc., at the address appearing on the first page of this proxy statement. Communications directed to members of the Board who are management directors will be referred to the intended Board member(s) except to the extent that it is deemed unnecessary or inappropriate to do so pursuant to the procedures established by a majority of the independent directors. Communications directed to independent directors will be referred to the intended Board member(s).Director CompensationThe Nominating and Corporate Governance Committee is responsible for evaluating and recommending compensation for non-management directors to the Board.Elements of Director Compensation During Fiscal Year 2011Non-management Our non-management directors have beenare compensated in cash, stock options, and restricted stock for their servicesservice as directors. InThe equity portion of annual compensation is paid following the end of the fiscal year, 2011, theirso the equity grant for service in the fiscal year ended October 31, 2013 was made in fiscal 2014.was as follows:•Cash. Directors received no annual cash retainerin effect for their service on the Board or its committees. Each non-management director, other than Bruce E. Toll, received cash fees for each Board and Board committee meeting he or she attended that was determined to be a “paid” meeting. In general, telephone conferences lasting less than 30 minutes in duration were not considered “paid” meetings. Cash fees paid for meetings held during fiscal 2011 were as follows: $ 5,000 $ 1,750 $ 1,750 •Equity Compensation. All non-management directors received annual equity compensation in the form of stock options for service on the Board and on Board committees. Stock options were granted and priced on a date in the last two weeks of December that is determined in advance by the Compensation Committee for service during the immediately preceding fiscal year. Each option grant made to a non-management director has a 10-year term and vests in equal installments over a two-year period, with a provision for automatic vesting upon a change of control of the Company. Some option grants tonon-management directors also provide for continued vesting upon death, disability or retirement of the director. In addition, non-management directors also received restricted stock awards for service on certain Board committees. Restricted stock was also granted on a date in the last two weeks of December that was determined in advance by the Compensation Committee for service during the immediately preceding fiscal year. Restrictions on shares of restricted stock granted as director compensation lapse in equal installments over two years, although all restrictions would immediately lapse upon a change of control of the Company or upon the death or disability of the director. In order to receive equity compensation for Board committee service, the relevant Board committee had to meet at least once during the fiscal year, and such meeting had to be considered a “paid” meeting.Equity compensation grants under the Director Plan to non-management directors during fiscal 2011 for services rendered during fiscal 2010 were made on December 20, 20102013 and were as follows:Service on the BoardOption to acquire 15,000 sharesChair of the Audit CommitteeOption to acquire 1,250 shares;250 shares of restricted stockMember of the Audit CommitteeOption to acquire 1,000 shares;100 shares of restricted stockChair of the Nominating and Corporate Governance CommitteeOption to acquire 1,000 shares;200 shares of restricted stockMember of the Nominating and Corporate Governance CommitteeOption to acquire 1,000 shares;100 shares of restricted stockChair of the Compensation CommitteeOption to acquire 1,000 shares;200 shares of restricted stockMember of the Compensation CommitteeOption to acquire 1,000 shares;100 shares of restricted stock•Perquisites and Benefits. Our non-management directors did not receive perquisites or other benefits from the Company during fiscal 2011 except for Mr. Bruce E. Toll, as discussed in the section below entitled “Other Director Compensation Arrangements.”Elements of Director Compensation Beginning in Fiscal Year 2012Beginning in fiscal year 2012, the compensation program2014 for non-management directors consisted of the following components:•Board Retainer. The principal form of compensation for non-management directors for their service as directors is an annual retainer, consisting of a combination of cash and equity, with an annual aggregate value of $160,000 as follows:•Cash. Each non-management director receives $53,334 as the cash portion of the annual retainer.•Equity. The equity portion of the annual retainer for a non-management director consists of two components issued pursuant to the Company’s Director Plan: (a) non-qualified stock options having an aggregate grant date fair value of $53,333 and (b) restricted stock units (“RSUs”) having an aggregate grant date fair value of $53,333. Stock options are granted and priced on a date in the last two weeks of December that is determined in advance by the Compensation Committee for service during the immediately preceding fiscal year. Each option grant made to a non-management director has a 10-year term and vests in equal installments over a two-year period, with a provision for automatic vesting upon a change of control of the Company. RSUs are also granted on a date in the last two weeks of December that is determined in advance by the Compensation Committee for service during the immediately preceding fiscal year. Restrictions on shares of RSUs granted as director compensation lapse in equal installments over two years, although all restrictions would immediately lapse upon a change of control of the Company or upon the death or disability of the director.•Committee Retainer. Each member of the Audit Committee, the Nominating and Corporate Governance Committee and the Executive Compensation Committee receives annually, for service on each such Committee: (a) $6,668 in cash; (b) non-qualified stock options having an aggregate grant date fair value of $6,666, and (c) RSUs having an aggregate grant date fair value of $6,666, in each case with the same features described above under “Equity.” In addition, the Chair of each of the above Committees receives an annual cash retainer of $10,000. No fees (in cash or equity) are paid on a per meeting basis.(includingof the Chair)Audit Committee, the Governance Committee, and the Compensation Committee receives annually, for service on each such Committee, a combination of cash and equity with a grant date fair value of $20,000 as follows (except that fractional shares and options are not issued): (a) one-third of this amount in cash; (b) non-qualified stock options having a grant date fair value of one-third of this amount; and (c) RSUs having a grant date fair value of one-third of this amount, in each case with the same material terms described above under “Equity.” In addition, the Chair of each of these committees receives an additional annual cash retainer of $10,000.actions:actions, for service on such Committee, a combination of cash and equity with a grant date fair value of $10,000 as follows (except that fractional shares and options are not issued): (a) $3,334one-third of this amount in cash,cash; (b) non-qualified stock options having an aggregatea grant date fair value of $3,333,one-third of this amount; and (c) RSUs having an aggregatea grant date fair value of $3,333,one-third of this amount, in each case with the same features described above under “Equity.“Equity.” In addition, the Chair of that Committee receives aan additional cash retainer of $5,000 in any year in which the Committee meets or takes official action.•Attendance at Board and Committee Meetings. Directors, Committee Chairs and Committee members do not receive any additional compensation for attendance at Board or Committee meetings.•Lead Independent Director. The Lead Independent Director receives annually $10,000 in cash for his services in that capacity.A newwas entered intowith the Company as of November 1, 2010 between the Company and Mr. Bruce E. Toll.2010. The Advisory Agreement expires on October 31, 2016. The purpose of the Advisory Agreement is to provide us with the valuable and special knowledge, expertise, and services of Mr. Bruce E. Toll, one of our co-founders and a director of the Company since our inception, on a continuing basis, as well as to provide that Mr. Toll does not engage in specified activities. The Advisory Agreement provides, among other things, that (a) we will retain Mr. Bruce E. Toll as an employee and Special Advisor to the Executive Chairman of the Board and the Chief Executive OfficerCEO until October 31, 2016, at a compensation rate of $675,000 for the first year of the term of the Advisory Agreement, with such compensation rate to be reduced by $75,000 in each of the remaining five years of the term of the Advisory Agreement. In fiscal 2014, he received compensation in the amount of $450,000 under the Advisory Agreement.and (b)provides that during the term of the Advisory Agreement, Mr. Bruce E. Toll will be entitled to receive the health plan benefits provided to our NEOs.NEOs, which in fiscal 2014 were the same as those provided to all of our employees after 60 days of service with us. Mr. Bruce E. Toll is a participant in the Company’s 401(k) retirement plan. During fiscal 2014, we provided Mr. Bruce E. Toll with a contribution to the Company’s 401(k) retirement plan in the amount of $10,215. Mr. Bruce E. Toll is also a participant in the SERP, which provides an annual benefit of $230,000 for 20 years; however, no payments are to be made to him under the SERP until the expiration of the term (or termination) of the Advisory Agreement. See “Executive Compensation Tables — Tables—Pension Benefits at October 31, 2011 — During Fiscal 2014—Supplemental Executive Retirement Plan” for a more detailed description of the SERP. During fiscal 2011, we provided Mr. Bruce E. Toll with other benefits having an estimated value of $2,746, which are described in greater detail under “Director Compensation during Fiscal 2011” table, below. These benefits were reviewed by the Compensation Committee as part of its review of benefits and perquisites paid to our NEOs and were found to be reasonable and consistent with past practices.20112014 compensation awarded to or earned by our non-management directors. Management directors are not compensated for their service as directors. The compensation received by our management directors for their services as employees is shown in the Summary Compensation Table on page 3242 of this proxy statement.2011 Fees
Earned or
Paid in Cash
($) Stock
Awards
($)(1)(2)(3) Option
Awards
($)(4)(5)(6) Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings ($) All Other
Compensation
($) Total ($) 19,500 1,932 173,760 — — 195,192 33,500 5,796 184,620 — — 223,916 12,500 — 162,900 — — 175,400 24,750 1,932 173,760 — — 200,442 31,750 5,796 184,620 — — 222,166 24,750 3,864 184,620 — — 213,234 30,000 4,830 176,475 — — 211,305 — — 162,900 404,704 (7) 677,746 (8) 1,245,350 Name Total ($) Robert S. Blank $ 63,336 $ 63,323 $ 64,534 $ — $ — $ 191,193 Edward G. Boehne $ 86,670 $ 66,663 $ 67,933 $ — $ — $ 221,266 Richard J. Braemer $ 61,668 $ 56,678 $ 57,737 $ — $ — $ 176,083 Christine N. Garvey $ 60,002 $ 59,983 $ 61,135 $ — $ — $ 181,120 Carl B. Marbach $ 80,004 $ 70,004 $ 71,331 $ — $ — $ 221,339 Stephen A. Novick $ 66,670 $ 66,663 $ 67,933 $ — $ — $ 201,266 Paul E. Shapiro $ 76,670 $ 66,663 $ 67,933 $ — $ — $ 211,266 Bruce E. Toll $ 56,668 $ 56,678 $ 57,737 $ — $ 460,215 $ 631,298 (1) Annual restricted stock awardRSU grants to non-management directors wereare made during the first quarter of the 2011each fiscal year for service on the Board and Board committees during the 2010immediately preceding fiscal year. The grant date fairyear; accordingly, the values reflected in the table above are values of the awards are based upon the closing price of our common stock on the date of the awards. Each non-management director, other than Mr. Braemer and Mr. Bruce E. Toll, received a grant of restricted stock duringgrants for service in fiscal year 2011. The grant date for each restricted stock award was December 20, 2010.2013.(2)The amounts reported in this column represent the grant date fair value of the restricted stock awards, in accordance with Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic 718 “Compensation-Stock Compensation” (“ASC 718”).(3)(2)The non-management directors held the following amounts of unvested restricted stock awardsoutstanding RSUs at October 31, 2011:2014: Mr. Blank, 150 shares;3,767 units; Mr. Boehne, 450 shares;3,965 units; Mr. Braemer, 3,371 units, Ms. Garvey, 100 shares;3,568 units; Mr. Marbach, 450 shares;4,164 units; Mr. Novick, 300 shares;3,965 units; Mr. Shapiro, 3,965 units; and Mr. Shapiro, 375 shares. Messrs. Braemer and Bruce E. Toll, did not hold any unvested restricted stock awards at October 31, 2011.3,371 units.(4)(3) The annual stock option grants to non-management directors are made during the first quarter of each fiscal year for service on the Board and Board Committeescommittees during the immediately preceding fiscal year. The amounts reported in this column representyear; accordingly, the grant date fair value of stock option awards granted, in accordance with ASC 718. Assumptions usedvalues reflected in the calculationtable above are values of these amounts are includedgrants for service in Note 9 to our audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended October 31, 2011.2013.(5)Each non-management director received a stock option grant during fiscal year 2011. Each grant was made on December 20, 2010.(6)(4)The non-management directors held unexercised stock options to acquire the following amounts of our common stock at October 31, 2011:2014: Mr. Blank, 208,000150,862 shares; Mr. Boehne, 218,000126,224 shares; Mr. Braemer, 197,000141,140 shares; Ms. Garvey, 57,00063,501 shares; Mr. Marbach, 218,000158,585 shares; Mr. Novick, 202,000158,224 shares; Mr. Shapiro, 213,250153,474 shares; and Mr. Bruce E. Toll, 165,000141,140 shares. We provide information on the beneficial ownership of our stock for each of our directors under “Security Ownership of Principal Stockholders and Management” on page 3 of this proxy statement.(7)Due to a change in assumptions related to the discount rate from October 31, 2010 to October 31, 2011, the actuarial present value of Mr. Bruce E. Toll’s accumulated plan benefit under the SERP increased by $404,704.(8)(5)“All Other Compensation” consists of the following annual compensation and benefits provided to Mr. Bruce E. Toll pursuant to the Advisory Agreement. See “Other Director Compensation Arrangements”Arrangements,” above. $ 675,000 2,746 $ 677,746 Annual compensation under Advisory Agreement $ 450,000 Contribution to Company 401(k) plan 10,215 Total $ 460,215 Page 2014 Company Performance 25 Executive Compensation Program Highlights 27 Compensation Philosophy and Objectives 27 Compensation Decision-Making Process 29 Elements of Compensation 32 Cash Compensation Decisions 32 Long-Term Incentive Compensation Decisions 35 Benefits and Perquisites 37 Other Compensation Practices and Policies 39 
◦ In California, the $1.6 billion acquisition of Shapell Homes gave us approximately 5,000 home sites in established coastal communities in the California markets surrounding Los Angeles and San Francisco, enabling us to significantly expand our California operations. ◦ In Texas, we opened four large master planned communities, where we will build homes and sell lots to other builders, which will generate future additional income. ◦ Toll Brothers City Living, which is heavily concentrated in the urban metro New York City market, currently has 837 units in projects open or soon to be open for sale with another 1,203 units we control that are in the approval process. ◦ Toll Brothers Apartment Living continues to expand our pipeline of urban and suburban for-rent projects. We currently have 1,441 units under management, 1,920 in construction, and nearly 3,000 in planning. SummaryTeam survey of the investment community.This◦ We were named Most Honored Company in the Home Building and Building Products sector among the 37 companies receiving nominations. We also ranked 8th overall among the approximately 2,000 companies receiving votes in this year's survey of the buy-side and sell-side analyst community. ◦ Our CEO and CFO were named to the All-America Executive Team with each receiving recognition from both the buy-side and sell-side communities within the Homebuilders & Building Products sector. discussionprogram that is intended to reward positive performance, retain talented personnel, and analysis (“CD&A”encourage actions that drive success in our business strategy. Our executive compensation program received the support of at least 98% of our stockholders who voted at our Annual Meeting of Stockholders in each of the last four years.describes in detail each elementbenefits and vesting of previously granted equity compensation.we pay or awardis designed to or that is earned by,comply with tax Code requirements for deductibility.named executive officers (“NEOs”). This CD&A includes a descriptionNEOs and policies restricting NEOs hedging and pledging of the principles underlying our executive compensation policiesCompany shares.our most important executive compensation decisions during our 2011 fiscal year and provides our analysis of these policies and decisions. It is also intended to provide a context for the data we present in the compensation tables and related footnotes below, as well as the narratives that accompany the compensation tables.We are the nation’s leading builder of luxury single-family detached and attached home communities; master planned luxury residential, resort-style golf communities; and urban low-, mid- and high-rise communities, principally on land we develop and approve. We operate our own architectural, engineering, mortgage, title, land development and land sale, golf course development and management, home security, and landscape subsidiaries. Objectivesimperativevital to our success and long-term viability that our business continues to be managed by highly experienced, focused, and capable executives who possess the dedication to oversee our organization on a day-to-day basisexperience and have the vision to anticipate and respond to market developments. It is also important that we concentrate on retaining and developing the capabilities of our emerging leaders to ensure that we continue to have an appropriate depth of executive talent.Our 2011 fiscal year was the first full fiscal year after the occurrence of significant changes in several of our key leadership roles — changes that, in each instance, resulted from succession planning by the Board and our management. Our 2011 fiscal year NEOs were as follows:Robert I. Toll, Executive Chairman of the Board (“Executive Chairman”)Mr. Toll served as our Chairman and Chief Executive Officer since our founding in 1967 until the appointment of Douglas C. Yearley, Jr. as Chief Executive Officer in June 2010, at which time he was appointed Executive Chairman, with the expectation that he will, among other things, maintain an active role in the strategic management of the Company;Douglas C. Yearley, Jr., Chief Executive Officer (“CEO”) Mr. Yearley joined us in 1990, served as a Regional President from November 2005 until November 2009 and served as Executive Vice President from November 2009 until June 2010, at which time he was appointed CEO;Zvi Barzilay, President and Chief Operating Officer (“COO”)Mr. Barzilay joined us in 1980 and served in various senior management positions from 1983 to 1998, at which time he was appointed President and COO. He retired from the Company effective December 31, 2011;Martin P. Connor, Senior Vice President, Chief Financial Officer and Treasurer (“CFO”)Mr. Connor joined us in 2008, was appointed a Senior Vice President in December 2009 and continued in that position from that time until his appointment as CFO and Treasurer in September 2010.In determining fiscal 2011 compensation for our senior executives, the Executive Compensation Committee of the Board (the “Compensation Committee”) took note of the difficult conditions that continued to challenge the economy and home building industry, while also considering the transition that we continued to experience atthe senior management level. In particular, with respect to our Executive Chairman, the Compensation Committee considered his continuing role in strategic and day-to-day business activities during fiscal 2011. As a result, the Compensation Committee sought to compensate our NEOs in a way that would enable us to retain them as our senior management team, appropriately recognize their individual experience, roles and skill sets and their efforts on behalf of the Company during fiscal 2011 and in a way that would be consistent with our overall business objectives and our stockholders’ best interests. The Compensation Committee paid particular attention to the following notable areas of achievement in fiscal 2011 in light of the current economic condition of our industry and the economy as a whole:•Sales: Our net contracts signed in fiscal 2011 increased by approximately 9% in dollars and 7% in units compared to fiscal 2010.•Backlog: Our backlog at fiscal year end 2011 increased 15% in dollars and 12% in units compared to fiscal 2010.•Income: We reported net income of $39.8 million in fiscal 2011 compared to net losses of $3.4 million and $755.8 million in fiscal 2010 and 2009, respectively. Excluding write-downs and debt retirement charges, our pre-tax income improved to $67.2 million in fiscal 2011 compared to a pre-tax loss of $0.7 million in fiscal 2010 on similar revenue volume.•Gross Margin: Our pre-impairment home building gross margin improved nearly 2.5% in fiscal 2011 compared to fiscal 2010.•Community Count: We increased our community count from 195 to 215 during fiscal 2011.•Expansion of our Business:Shortly after the close of fiscal 2011, we completed the acquisition of substantially all of the assets of CamWest Development LLC, marking our expansion into the Seattle market.•The continued expansion of the “Toll Brothers City Living®” brand name with the opening for sale of three new buildings in the New York urban market.Gibraltar Capital, our wholly owned subsidiary formed in 2010 to pursue a broad range of distressed real estate opportunities, executed four acquisition transactions during fiscal 2011, representing $70.1 million in capital invested, and generated net income of $6.9 million.•Honors: During fiscal 2011, Institutional Investor Magazine named our CEO and CFO to the 2012 All America Team for the Homebuilding and Building Products Industry. We were voted the first-place ranking for Best Investor Relations in the Homebuilders & Building Products sector by the buy-side community in Institutional Investor Magazine’s 2012 annual survey.•Financial Strength: The Company continues to have one of the strongest balance sheets in the industry. We maintain significant liquidity and strong land positions and believe that we are well positioned for the ultimate recovery in the housing markets.Consistent with our historical compensation practices, our fiscal 2011 compensation program, which is discussed in detail in this CD&A, featured the following attributes:A balanced mix of annual cash and long-term equity incentives that reward our NEOs for current performance and align their compensation with long-term performance and long-term stockholder value creation; andA structure for NEO incentive compensation that complies with Internal Revenue Code (“Code”) requirements for tax deductibility.In addition, our program does not feature any NEO employment agreements or severance plans or agreements; nor do we have any plans or agreements that provide “golden parachute” cash payouts for our NEOs conditioned upon a change of control, except with respect to vesting and potential payment of SERP benefits and vesting of equity compensation awards and grants.Consideration of Say-on-Pay ResultsThe Compensation Committee considered the results of the 2011 advisory, non-binding “say-on-pay” proposal in connection with the discharge of its responsibilities. Because 99% of our shareholders voting on the “say on pay” proposal approved the compensation of our NEOs described in our proxy statement in 2011, the Compensation Committee did not implement significant changes to our executive compensation program as a result of the shareholder advisory vote.Overview of ContentsIn this CD&A, you will find details on, and discussion of, the following topics:Pages•21•22-23•23-24•24-25•26-30•Employment Agreements, Change of Control Provisions and Severance Payments30•30-31•31Role of Executive OfficersThe Compensation Committee worked with management to establish its meeting agendas and determine who should be invited to attend meetings. Throughout the year, the Compensation Committee requested various types of information from management and its independent compensation consultant, including information about other companies in the home building industry. Our CFO was invited by the Compensation Committee to attend relevant portions of the Compensation Committee meetings in order to provide information and answer questions regarding the Company’s strategic objectives and financial performance related to the Compensation Committee’s work. Our Executive Chairman, CEO and COO were also all available to members and meetings of the Compensation Committee. Our CEO submitted recommendations to the Compensation Committee regarding salary, bonus, equity compensation, performance goals and overall compensation levels for the COO and CFO. The Compensation Committee, after consideration of these recommendations, determined the actual awards to the COO and CFO. The Executive Chairman submitted recommendations to the Compensation Committee regarding salary, bonus, equity compensation, performance goals and overall compensation for the CEO; the Compensation Committee considered these recommendations in determining the CEO’s compensation.Use of Compensation ConsultantsDuring fiscal 2011, the Compensation Committee engaged Compensation Advisory Partners LLC (“CAP”) to serve as its independent compensation consultant. CAP received instructions from, and reported to, the Compensation Committee on an independent basis. The Compensation Committee periodically obtains confirmation from CAP with regard to CAP’s independence. CAP was also authorized by the Compensation Committee to share with and request and receive from management specified information in order to prepare for meetings. The Compensation Committee requested CAP’s advice on a variety of issues, including compensation strategy, market comparisons, pay and performance alignment versus industry peers, executive pay trends, compensation best practices and potential compensation plan designs and modifications. The Compensation Committee met with CAP, both with and without management, on several occasions during fiscal 2011 and thereafter.Compensation Philosophy and Objectivescapacitycapabilities to succeed in our competitive industry has been essential to theour long-term success of our Company and a significant factor in creating long-term value for our stockholders. Base salaries, annual incentive bonuses, long-term equity compensation, retirement benefits, and competitive employee benefits are the primary tools used to retain and motivate our NEOs to deliver superior performance and to enhance long-term value to our stockholders. Our compensation philosophy recognizes the value of rewarding our NEOs for their past performance and motivating them to continue to excel in the future. The Compensation Committee believes it has developed a compensation program that is intended to rewardrewards outstanding short-term and long-term performance and encourageencourages actions that successfully deliver on our business strategy.We are in an industry that has suffered a severe downturn during the past several years. The compensation policies for our NEOs during this difficult period are based on the philosophy that compensation should reflect our Company’s financial and operational performance and the individual performance of each executive in dealing with a challenging economic and housing environment. and many of the other actions and decisions of our NEOs, requiresrequire a long time horizon before we realize a tangible financial benefit.whenin setting compensation for our NEOs are:•Set compensation levels that are sufficiently competitive to retain, motivate and reward the highest quality individuals to contribute to our goals and overall financial success. of growth as well as contraction, the Compensation Committee attempts to achieve these objectives.•Retain executives and encourage continued service. The Compensation Committee seeks to attract and maintain the continuity of excellent management. The Compensation Committee believes our stockholders have historically benefited from the continued employment of our NEOs over an extended period of time — the Executive Chairman since he co-founded our predecessor operations in 1967 (43 years), the CEO, who joined the Company in 1990 and has served in various senior management positions during the 20 years preceding his appointment as CEO, and the COO who joined the Company in 1980 (30 years) and had served in that role since 1998 until his retirement effective December 31, 2011. Our NEOs are highly talented individuals who have been leaders in contributing to the Company’s goals, objectives and overall success. Our Executive Chairman has been consistently recognized as a leader in our industry by various publications and industry groups, and, in 2011, our CEO and CFO were named by a leading institutional investor publication to its 2012 All America team for the homebuilding and building products industry. Richard T. Hartman, our new COO, effective January 1, 2012, has served the Company for over 30 years.•Incentivize executives to manage risks appropriately while attempting to improve our financial results, performance and condition over both the short-term and the long-term. The Compensation Committee attempts to provide both short-term and long-term compensation for current performance, as well as to provide incentives to achieve short- and long-term goals. Short-term compensation is typically in the form of base salary and annual incentive cash bonuses under stockholder-approved plans, and long-term compensation is typically in the form of equity awards. Because of the current condition of the economy, the nature of our business and the way we operate our business and implement our strategies, we may not witness for several years the positive results of many decisions made or actions taken by our NEOs in any current fiscal year, including land purchased and strategies implemented to manage risks and position us for future growth. Accordingly, the Compensation Committee, by seeking a balance of short-term and long-term compensation, seeks to motivate and reward NEOs for decisions made today that may not produce immediate or short-term results, but will likely have a positive long-term effect.•Align executive and stockholder interests. The Compensation Committee believes that the use of equity compensation as a key component of executive compensation is a valuable tool for aligning the interests of our NEOs with those of our stockholders; this would include the use of such compensation to rewardactions that demonstrate long-term vision. When management and stockholder interests are aligned, the Compensation Committee believes management’s focus on creating long-term growth and value is increased.•Obtain tax deductibility for incentive compensation. The Compensation Committee believes that tax deductibility for the Company is a favorable feature for an executive incentive compensation program. Although the Compensation Committee, where it deems appropriate, may award base compensation to NEOs that will not be entirely tax-deductible, it generally attempts to structure compensation for NEOs to comply with the Code requirements for deductibility, including deductibility of compensation awarded under performance-based compensation plans.Elements of growth as well as contraction, the Compensation Committee attempts to achieve these objectives.be creative,attract but also to maintain the continuity of our excellent management team. The Compensation Committee believes our stockholders have historically benefited from the continued employment of our NEOs over an extended period of time—the Executive Chairman, who co-founded our business in 1967; the CEO, who joined the Company in 1990 and served in various senior management positions during the 20 yearscognizantto provide incentives to achieve short- and long-term goals. Because of the nature of our business and the way we operate our business and implement our strategies, we may not witness for several years the positive results of many decisions made or actions taken by our NEOs in any current fiscal year, including those in connection with land purchased and strategies implemented to manage risks and position us for growth. The Compensation Committee, by seeking a balance of short-term and long-term compensation, seeks to motivate and reward NEOs for decisions made today that may not produce immediate or short-term results, but are intended and expected to have a positive long-term effect.Compensation Committee Action Taken December 2013 June 2014 November 2014 December 2014 Beazer Homes USA, Inc. Lennar Corporation NVR, Inc. D. R. Horton, Inc. M. D. C. Holdings, Inc. PulteGroup, Inc. Hovnanian Enterprises, Inc. M/I Homes, Inc. The Ryland Group, Inc. KB Home Meritage Homes Corporation Standard Pacific Corp. Taylor Morrison Home Corporation thesethe objectives discussed above, using a variety of compensation elements described below.to accomplish its goals. Cash Compensation—Base Salary Provide a basicfundamental level of compensation to the NEOs for performing their roles and assuming their levels of executive responsibility. Fixed cash component. Annually reviewed by the Compensation Committee and adjusted upwards or downwards, from time to time.time, based on our Peer Group and individual performance.BonusesBonus Promote improvement of our financial results, performance and condition; intended to be a short-term incentive to drive achievement of performance goals in a particular fiscal year, without incentivizingwhile discouraging inappropriate risk-taking orand not deterring achievement of our long-term goals and initiatives. Annual incentive bonuses have been primarily paid in cash. Performance-based bonus opportunity for fiscal 2014 is based on the achievement of specified goals, which may be Company performance goals, individual performance goals or a combination ofconsolidated revenue and pre-tax income targets set by the two, pursuant to stockholder-approved plans. Where applicable, goals are typically established annually, and bonus amounts awarded vary based on performance.Compensation Committee.Incentive CompensationIncentives Promote the achievement of our long-term financial goals and stock price appreciation by aligning NEO and stockholder interests, promoting NEO retention and rewarding NEOs for superior performance over time. Equity awards granted annually by the Compensation Committee, pursuant to stockholder-approved plans. Long-termstockholder approved plans, with four-year vesting. For fiscal 2014 performance, long-term incentive compensation may bewas in the form of stock options stock appreciation rights, and stock awards and units, which may be restricted, unrestricted or performance-based. Benefits ultimately realized by each NEO will vary and will dependperformance-based RSUs. Performance-based RSU payout is contingent on our stock price, achievementachievements of performance targets set by the Compensation Committee in the areas of pre-tax income, home building margin, and passage of time.units delivered. Element Purpose Characteristics Provide health and welfare benefits during employment and a program for income upon retirement. Designed to retain and reward NEOs by providing an overall benefits package competitive with those provided by comparable companies. Health and welfare benefits may vary based on employee elections. Perquisites and other benefits may vary from year to year. Retirement benefits, such as the SERP (see “Benefits and Perquisites” below), also vary based on compensation and years of service. Compensation Decision-Making ProcessThe Compensation Committee reviews and determines base salary, incentive bonuses and long-term incentive compensation, as well as benefits and perquisites, on an annual basis. For compensation relating to fiscal 2011, the significant steps taken by the Compensation Committee to establish and award compensation to our NEOs were as follows:October — December 2010• Set fiscal 2011 base salaries and performance goals under each of our bonus plans for fiscal 2011 bonuses• Determined and granted equity compensation awards for fiscal 2010 serviceJune 2011• Reviewed executive compensation at peer companies for the preceding year• Monitored Company performance and individual performance of NEOsSeptember 2011• Reviewed executive compensation benchmarking analysis for the preceding year prepared by the independent compensation consultantNovember — December 2011• Reviewed fiscal 2011 performance goals and certified that performance goal was attained under each of our bonus plans• Reviewed overall Company performance relative to industry peers• Reviewed each NEO’s individual performance during fiscal 2011• Determined fiscal 2011 NEO bonuses• Determined and granted equity awards for fiscal 2011 service• Consulted with independent compensation consultant regarding industry trends in executive compensation• Further revised RSU program in response to emerging practicesPortions of the compensation decision-making process are more fully described below.Establish Performance GoalsThe Compensation Committee, when setting performance goals, reviews the Company’s financial condition, current industry and national economic factors, compensation practices and trends at other companies within our industry, and our market capitalization, and attempts to set goals that will effectively motivate the NEOs to achieve the Company’s most important business objectives, while limiting risk. The achievement of performance goals does not automatically entitle any NEO to a bonus. Rather, the establishment of performance goals permits the Compensation Committee, in its discretion, to determine and award bonuses to our NEOs that will be tax-deductible by the Company if the performance goals are met. The Compensation Committee has historically awarded bonuses that were well below the maximum range of amounts payable under the related plans. The Compensation Committee reserves the authority to reduce the minimum and maximum range of amounts payable and any resulting amounts payable to any participant based upon such facts and circumstances that the Compensation Committee deems relevant and appropriate.At the beginning of fiscal 2011, the Compensation Committee, in the context of the severe downturn of the housing industry, believed that the achievement of revenues was once again an important goal that each of our NEOs should focus on during fiscal 2011. The Compensation Committee, which had determined, in fiscal 2010, that Messrs. Yearley, Barzilay and Connor would be participants in the Senior Officer Plan approved by our stockholders that year, decided that potential bonuses for fiscal 2011 under the Senior Officer Plan would be conditioned upon our achievement of a specified level of net revenues in fiscal 2011. The Committee established that eligibility for the bonus available under the Senior Officer Plan and under the Plan Year Performance Bonus component of the Cash Bonus Plan would be conditioned upon our achievement of at least $1.1 billion in consolidated revenues in fiscal 2011, and eligibility for 80% of the full bonus available under the Senior Officer Plan and under the Plan Year Performance Bonus component of the Cash Bonus Plan would be conditioned upon our achievement of at least $880 million in consolidated revenues in fiscal 2011. The Compensation Committee established the $1.1 billon goal after reviewing, among other things, market conditions, our backlog at the end of fiscal 2010, the revenue associated with the homes in backlog which were projected to be delivered during fiscal 2011, other projected results, and cancellation rates and delivery delays that we were experiencing at that time and in the recent past.Review Market ComparisonsAlthough the Compensation Committee does not believe that it is appropriate to establish compensation levels based solely on market comparisons or industry practices, it believes that information regarding pay practices at other companies is useful in three respects. First, marketplace information is one of the many factors that the Compensation Committee considers in assessing the reasonableness of compensation. Second, it recognizes that our compensation practices must be generally competitive for executive talent in the home building industry and the market overall. Third, it recognizes that marketplace information reflects emerging and changing components and forms of compensation. While the Compensation Committee considers peer compensation levels and practices when making its compensation decisions, it does not target compensation at any particular point within a range established by a comparison of the financial performance or compensation levels of our peer companies.When setting fiscal 2011 salaries, performance goals and ultimate bonus amounts, and equity compensation awards, the Compensation Committee, with guidance from our independent compensation consultant, compared our NEOs’ total compensation in 2010 against a peer group of publicly-traded home building companies. Based on these comparisons, the Compensation Committee noted that, for the fiscal year 2010, except for our executive chairman position (there being only one comparable position in the peer group), our compensation for each of our chief executive officer and chief financial officer positions was significantly below the median for the homebuilding peer group (“Peer Group”), reflecting each one’s partial year in such position, and our compensation for our chief operating officer position was slightly below the median for the Peer Group. The Peer Group consisted of the following companies with whom the Compensation Committee believes we primarily compete for talent and market share.Beazer Homes USA, Inc.D. R. Horton, Inc.Hovnanian Enterprises, Inc.KB HomeLennar CorporationM. D. C. Holdings, Inc.M/I Homes, Inc.Meritage Homes CorporationNVR, Inc.Pulte Homes, Inc.The Ryland Group, Inc.Standard Pacific Corp.Our independent compensation consultant also provided the Compensation Committee with compensation data for companies of similar size outside of the home building sector for the Compensation Committee’s consideration.Review Company PerformanceThroughout the fiscal year, the full Board monitored our financial performance in relation to our recent historical performance and, to the extent reliable data was available, in relation to our Peer Group. The Compensation Committee reviewed our performance data during the fiscal year, which it considered when making final fiscal 2011 compensation decisions.Fiscal 2011 Compensation ElementsTotal Total cash compensation (base salary and annual incentive bonus) paid to or earned by each of our NEOs for fiscal 2011 is set forth below. Details on total compensation, presented in the format required by the SEC, can be found in the Summary Compensation Table on page 32 of this proxy statement. Base Salary Annual
Incentive
Bonus Total Fiscal 2011
Cash Compensation $ 1,300,000 $ 1,250,000 $ 2,550,000 $ 1,000,000 $ 1,250,000 $ 2,250,000 $ 1,000,000 $ 1,250,000 $ 2,250,000 $ 650,000 $ 225,000 $ 875,000 the majoritymost of an executive’s compensation package is comprisedcomposed of at-risk performance-based bonuses and long-term incentive compensation, rather than fixed compensation such as base salaries.October 2010,December 2013, the Compensation Committee determined the following base salaries for our NEOs for calendar year 2014. The increases in the base salaries for Messrs. Hartman and Connor were based on a consideration of their performance in fiscal 2013, as well as the Committee’s 2013 review with the independent compensation consultant of our CFO's’ total compensation in 2013 compared to that of the chief financial officers in our Peer Group. Calendar 2014 Salary Calendar 2013 Salary Robert I. Toll $ 1,000,000 $ 1,000,000 Douglas C. Yearley, Jr. $ 1,000,000 $ 1,000,000 Richard T. Hartman $ 1,000,000 $ 950,000 Martin P. Connor $ 850,000 $ 800,000 our named executive officersfor calendar year 2015, the base salaries of Messrs. Toll, Yearley, and Hartman would not receiveremain at $1,000,000; and the base salary increases for fiscal 2011. Accordingly, our NEOs receivedof Mr. Connor would be increased to $950,000. The increase in the same base salaries in fiscal 2011 as they had received in fiscal 2010, exceptsalary for Mr. Connor whose base salary of $650,000 for fiscal 2011calendar year 2015 was the same annualized base salary approved by the Compensation Committee upon his appointment to the CFO position in September 2010.Annual Incentive Bonus — Robert I. TollAn annual incentive bonus is payable to Mr. Toll if and when earned under the terms of the stockholder-approved Cash Bonus Plan. Amounts payable under the Cash Bonus Plan are designed to be “performance-based” compensation and, therefore, exempt from the limitations on tax deductibility under Section 162(m) of the Code, as discussed below under “Tax and Accounting Implications.”Description of the Cash Bonus Plan. The Cash Bonus Plan was approved by our stockholders at the 2008 annual meeting. The purpose of the Cash Bonus Plan is to provide a tax-deductible, performance-based bonus for Mr. Toll, paid partly in accordance with a formula that is based on our financial success and partly on the basisa consideration of one or more performance goals, all as part of an integrated compensation program which is intended to assist us in motivating and retaining the leadership of our co-founder, Robert I. Toll.The Cash Bonus Plan has two components — a Company performance component (“Company Performance Bonus”) and an individual performance component (referred to in the Cash Bonus Plan and this CD&A as the “Plan Year Performance Bonus”). The formula for determining the Company Performance Bonus is set forth in the Cash Bonus Plan and is equal to 2.0% of our pre-tax income before bonus for the applicable fiscal year.The Plan Year Performance Bonus under the Cash Bonus Plan is determined annually by the Compensation Committee, based on the achievement of one or more performance goals established by the Compensation Committee at the beginning of each fiscal year using various business criteria as set forth in the Cash Bonus Plan. In no event can the total amount of the Plan Year Performance Bonus exceed the greater of $5.2 million or 1/10 of 1% of our gross revenues for the applicable fiscal year. The Compensation Committee, in its sole discretion, has the power to reduce or completely eliminate, but not increase, the Plan Year Performance Bonus.Bonuses under the Cash Bonus Plan may be paid in cash, in shares of our common stock or both; the method of payment is determined by the Compensation Committee. In addition, in no event may the sum of theCompany Performance Bonus and the Plan Year Performance Bonus (cash and fair market value of stock) exceed $8.5 million in any fiscal year.Fiscal 2011 Company Performance Bonus Determination. In fiscal 2011, we did not have pre-tax income; therefore, Mr. Toll was not entitled to a Company Performance Bonus under the terms of the Cash Bonus Plan.Fiscal 2011 Plan Year Performance Bonus Determination. At the beginning of fiscal 2011, the Compensation Committee established that eligibility for the full amount available to Mr. Toll under the Plan Year Performance Bonus was conditioned upon our achievement of more than $1.1 billion in consolidated revenues in fiscal 2011, and eligibility for 80% of the amount available to Mr. Toll under the Plan Year Performance Bonus was conditioned upon our achievement of at least $880 million in consolidated revenues in fiscal 2011. The Compensation Committee met in October 2011 and determined that we had achieved more than $1.1 billion in consolidated revenues (our actual fiscal 2011 consolidated revenues were $1.48 billion) during fiscal 2011 and, therefore, the maximum amount ($5.2 million) was available for the Plan Year Performance Bonus. The Compensation Committee then made a subjective evaluation of Mr. Toll’s performance during fiscal 2011, considering his overall leadership, and concluded that he had made remarkable contributions to the outstanding management and performance of the Company, both with respect to the Company’s strategic planning and its day-to-day issues, during the continued downturn in the economy and the homebuilding industry. The Compensation Committee also determined that Mr. Toll’s performance in fiscal 2011 merited long-term incentive2014 and the Committee's review with its independent compensation awards, which were grantedconsultant of Mr. Connor's total compensation compared to chief financial officers in December 2011 and are further described below under “Looking Ahead — Fiscal 2012 Compensation.” — Messrs. Yearley, Barzilay and ConnorDescription of Senior Officer Plan. At the beginning of our 2010 fiscal year, the Board and the Compensation Committee developed theBonus Plan. The Senior Officer Plan as a replacement for the Executive Officer Bonus Plan. In doing so, they determined that the Senior Officer Plan shouldis designed to be sufficiently flexible to allow the Compensation Committee to make awards in appropriate amounts and with appropriate performance periods and performance goals to whichever officersthe plan participants designated by the Compensation Committee designatesCommittee. All of our NEOs have been designated as plan participants. Theparticipants in the Senior Officer Plan, subsequently approved by our stockholders at the 2010 annual meeting, was in effect during fiscal 2011.Plan. The awards paid under the Senior Officer Plan are designed to be tax deductible “qualified performance-based compensation” under Section 162(m) of the Code for participants.Code. The Compensation Committee has designated the CEO, COO and CFO as participants in the Senior Officer Plan and has concluded that it will not designate Robert I. Toll as a participant in that plan as long as he participates in the Cash Bonus Plan. At or after the end of each performance period, the Compensation Committee determines whether and to what extent the performance goals have been achieved and calculates the amount of the award that could be paid to each participant, if any, based upon the levels of achievement of the relevant performance goals and the objective formula or method established with respect to such performance period.ensuremaximize tax deductibility of all awards under the Senior Officer Plan, the Compensation Committee has established that no award payable under the Senior Officer Plan can exceed the Award Cap of $8.5 million (the “Award Cap”).million. Additionally, in no event will the maximum aggregate amount payable to any participant with respect to awards that have performance periods that end in the same fiscal year exceed the Annual Payment Cap of two times the Award Cap, regardless of the number of awards that would otherwise be payable in that fiscal year (the “Annual Payment Cap”).year. Awards that are limited under the Annual Payment Cap may not be carried over and paid during a subsequent fiscal year. The Compensation Committee has no discretion to increase the amount of any awards beyond the Award Cap or the Annual Payment Cap, as applicable, but may, in its sole discretion, reduce or completely eliminate an award based on such facts and circumstances as it deems relevant.willwould be issued from the EmployeeStock Incentive Plan for Employees (2014) ("2014 SIP") or a successor plan. To the extent an award is settledpaid with equity, the equity is valued as of the end of the performance period for the award.20112014 Bonus Performance Goal.Goals. For fiscal 2011,2014, the Compensation Committee met in December 2013 and established that eligibility for the full amount available to eachthe NEOs under the Senior Officer Plan was conditioned upon our achievement of Messrs. Yearley, Barzilay,equally weighted consolidated revenue and Connorpre-tax income targets. At such time, the Compensation Committee determined that it would replace operating income, a metric used for our fiscal 2013 annual incentive bonus, with pre-tax income (excluding impairments and other items considered non-recurring in nature in accordance with the Senior Officer Plan) as one of the two Senior Officer Plan performance metrics. In making this determination, the Committee considered that the inclusion of pre-tax income would provide a metric that would continue to measure operating profitability but also measure the Company’s performance in its joint ventures and non-home building activities.$1.1 billion in consolidated revenues in fiscal 2011 and eligibility for 80% of the amount available to each of Messrs. Yearley and Barzilay under the Senior Officer Plan was conditioned upon our achievement of at least $880 million in consolidated revenues in fiscal 2011.those targets.Performance Metric 100% Eligibility 50% Eligibility (80%) Consolidated Revenues Pre-tax Income (1) (1) Excluding impairments and certain other items considered non-recurring in nature in accordance with the Senior Officer Plan. Additional information regarding the calculation of the pre-tax income performance metric can be found under "2014 Performance RSUs" on page 37. 20112014 and determined that we had exceeded the requisite consolidated revenues and pre-tax income targets for 100% eligibility during fiscal 20112014 and, therefore, the maximum amount was potentially available to each of Messrs. Yearley, Barzilaythe NEOs. Cash incentive bonuses under the Senior Officer Plan consider actual results against financial performance goals but allow the Compensation Committee to use judgment in considering quantitative and Connor.qualitative performance. In determining the actual cash bonus amounts to be paid, the Compensation Committee then made a subjective evaluation regarding the overall individual performance of each of Messrs. Yearley, BarzilayNEO and ConnorCompany performance during fiscal 2011, in light2014.current difficult industry conditions.plan in 2010. In exercising its discretion to determine the actual cash incentive bonus amount to be paid to each NEO, the Committee did consider, however, that fiscal 2014 revenues and pre-tax income exceeded the threshold measures set forth above.particularly notedalso considered that 2014 performance in the contributionsareas of Messrs. Yearley, Barzilaypre-tax income and Connorunits delivered significantly exceeded 2013 results.achievements described underfiscal 2014 results in the “— Executive Summary” section.minimum financialfiscal 2014 Senior Officer Plan performance goalgoals and by performing in an outstanding manner in fiscal 2011,2014, Messrs. Toll, Yearley, BarzilayHartman, and Connor merited cash annual incentive bonuses for fiscal 20112014 performance of $1,250,000, $1,250,000,$1,500,000, $2,300,000, $800,000, and $225,000,$800,000, respectively. The Committee also determined that such amounts were reasonable in light of current economic conditions and comparisons within our industry and in establishing improved parity among the bonuses of the Executive Chairman, CEO and COO. The Compensation Committee particularly noted, with respect to Mr. Yearley, his leadership in his first full year as the CEO and his ranking as the second-best chief executive officer in the Homebuilders & Building Products sector by the buy-side community in Institutional Investor magazine’s 2012 annual survey and, with respect to Mr. Connor, his leadership in the first full year as the CFO and his ranking as the best chief financial officer in the Homebuilders & Building Products sector by the buy-side community in Institutional Investor magazine’s 2012 annual survey.addition,December 2014, the Compensation Committee believedset the individual performances2015 performance goals for the Senior Officer Plan. The Committee determined that it would retain consolidated revenues and pre-tax income as the 2015 performance metrics under the Senior Officer Plan.Messrs. Yearley, and Connor in fiscal 2011 merited long-term incentive compensation awards, which were granted in December 2011 and are further described below under “Looking Ahead — Fiscal 2012 Compensation.” Base Salary Robert I. Toll $ 1,000,000 $ 1,500,000 $ 2,500,000 Douglas C. Yearley, Jr. $ 1,000,000 $ 2,300,000 $ 3,300,000 Richard T. Hartman (1) $ 991,667 $ 800,000 $ 1,791,667 Martin P. Connor (1) $ 841,667 $ 800,000 $ 1,641,667 (1) Reflects base salary earned during fiscal 2014. Base salary is paid on a calendar year basis; the 2014 calendar year salaries for Mr. Hartman and Mr. Connor were $1,000,000 and $850,000, respectively. The Decisionsdoes not use constant criteria from yearawarded equity compensation to yearour NEOs in the grantingform of options and performance-based RSUs. These equity compensation. The Compensation Committee takes into considerationawards are based on its assessment of the Company’s performance, and makes subjectiveas well as its determinations of the effectiveness of each NEO and the extent of his contributions to our success, and based onthe economic climate in which we operate. The Compensation Committee’s primary purposes and objectives when granting equity compensation to our NEOs are to:determination, awards equity compensation.to any of our employees, includingfor our NEOs may be either in the form of stock options, stock appreciation rights, stock awards, or stock units (which may be restricted, unrestricted or performance-based), in accordance with the terms of our stockholder-approved Employee Plan. 2014 SIP or a successor plan.and priced on a date inwithin the last two weeks15 days of December that is determined in advance by the Compensation Committee.The Compensation Committee’s primary purposes and objectives when granting equity compensation to our NEOs under the Employee Plan Because options are to:serve as a particular incentive for NEOs to devote themselves to our future success by providing NEOs with an opportunity to increase their proprietary interest in the Company;motivate NEOs to achieve long-term financial results, such as improved financial or other performance, that may ultimately cause an increase in the market price of our stock.give overall NEO compensation an appropriate balance between long-term and short-term compensation;retain NEOs in our employ; andprotect us by providing for forfeiture of unexercised stock options in the event that the NEO retires, or otherwise leaves our employ, and competes with us.Stock Options. During fiscal 2011, the Compensation Committee granted stock options to each of the NEOs, as set forth in the “Grants of Plan-Based Awards during Fiscal 2011” table on page 34 in this proxy statement. These grants were awarded at the beginning of fiscal 2011 in recognition of the respective NEO’s service during fiscal 2010. The Compensation Committee chose to grant these options to each of the NEOs in order to further the Compensation Committee’s objectives, as set forth above. Because the options were granted with exercise prices equal to the fair market value of the underlying common stock on the date of the grant, any value thatmay ultimately accrues to the granteebe realized by an employee is based entirely upon our future performance, as perceived by investors who establish the market price of our common stock.Thethese options is 10ten years from the date of the grant, and thethese options vest in equal annual amounts over a four year period, beginning on the first anniversary of the date of the grant. Options would continue to vest and be exercisable for the remainder of the 10-yearten-year term upon death, disability, or, in most cases, retirement, and would fully vest upon a change of control of the Company. In addition, all unexercised stock options, vested and unvested, granted to NEOs are subject to forfeiture in the event that, after the NEO retires or otherwise leaves our employ, the NEO competes with us.Performance-Based Restricted Stock Unit. During early2014 Options. At the beginning of fiscal 2011,2014, the Compensation Committee granted stock options to each of the NEOs, as set forth in the Grants of Plan-Based Awards During Fiscal 2014 table on page 44 of this proxy statement. These grants were awarded on December 20, 2013 in recognition of emerging practicesthe respective NEO’s performance during fiscal 2013.areaexecutive compensation tables in next year’s proxy statement.Robert I. Toll 100,000 Douglas C. Yearley, Jr. 160,000 Richard T. Hartman 43,000 Martin P. Connor 34,000 equity compensation, awarded Messrs. Toll, Yearley and Connor performance-based Restricted Stock Units (“RSUs”) relating to 200,000, 100,000 and 6,000 shares, respectively, of our common stockthe NEOs in addition to granting stock options. The awards were valued based on the closing price of our common stock on the NYSE on December 20, 2010. The RSUs are performance-based and will only vest if (1) the average closing price of our common stock on the NYSE, measured over any 20 consecutive trading days ending on or prior to December 20, 2015, increases 30% or more over the closing price of our common stock on the NYSE on December 20, 2010 and (2) the executive continues to be employed by us or serveoptions as a member of our Board until December 20, 2013. The performance-based RSUs will also vest if the executive dies or becomes disabled, or we experience a change of control prior to satisfaction of the aforementioned performance criteria.described above. The Compensation Committee chose to award these performance-basedPerformance RSUs based on the recommendation of the Committee’s independent compensation consultant to utilize a medium-term equity award tied to pre-established performance metrics, in addition to option awards, to further encourage our growth and profitability.increasenumber of units delivered as one of the performance metrics because it is a measure of growth, and it selected home building margin because it measures profitability and efficiency.stock pricedetermining a blended average to calculate the payout for the Performance RSUs. If the minimum threshold performance level of 90% is not achieved, no award is made.continued service104.60% of the 2013 Performance RSUs allocated to achievement of income from operations (which preceded pre-tax income as itsa performance measure), home building margin, and units delivered, respectively. For fiscal 2012 performance, our NEOs earned 110%, 110%, and 109.53% of the 2012 Performance RSUs allocated to achievement of income from operations, home building margin, and units delivered, respectively.criteria in an effort to retain the executives and motivate them to continue to lead us in such a manner that will cause a sustained increase in our stock price and to further align their financial interests with those of our stockholders. As ofequal annual amounts over four years from the date of grant and the Performance RSUs will not be delivered until the end of the four-year service vesting period, except that in the event of termination of service, the NEO would be entitled to receive shares underlying vested Performance RSUs. Shares subject to Performance RSUs held by an NEO fully vest and all restrictions immediately lapse upon a NEO’s termination of his employment due to death or disability. In addition, allstatement, nonestatement.2014 Performance Metric Minimum (90%) Target (100%) Maximum (110%) Fiscal 2014 Actual Pre-tax Income (1) $458,389,800 $509,322,000 $560,254,200 $558,438,000 Home Building Margin (1)(2) 23.90 % 26.56 % 29.22 % 25.97 % Units Delivered 5,040 5,600 6,160 5,397 (1) The following items, to the extent disclosed in a press release or conference call, are excluded from these performance metrics: (2) Defined as home building cost of sales, excluding interest expense, as a percentage of home building revenue vestingperformance criteria hasthat had been satisfied.met for the 2014 Performance RSUs awarded in December 2013. Because the 2014 Performance RSU pre-tax income performance metrics incorrectly included $17.5 million of expenses associated with the Shapell acquisition, the Compensation Committee exercised its negative discretion to reduce the payout under these awards to correspond to the amount that would have been earned if these expenses had not been included. The Compensation Committee determined that the percent achieved for pre-tax income, home building margin, and units delivered was 106.00%, 97.78% and 96.38%, respectively, and the payout for the 2014 Performance RSUs, based on a blended average of the metrics, would be at 100.05% of target., which is more fully described below, and various health and welfare benefit programs, including medical, dental, life insurance, and long-term disability insurance. We share the cost of the above programs with our employees. Our NEOs participate in these programs on the same terms as our other employees. These programs are intended to promote the health and financial security of our employees and are provided at competitive market levels to attract, retain and reward employees.401(k) Savings Plan. All employees, including our NEOs, after 60 days of service with us, are eligible to participate in the 401(k) Plan. The 401(k) Plan is a qualified retirement savings plan under Section 401(k) of the Code. Participants in the 401(k) Plan may contribute a portion of their compensation, subject to Internal Revenue Service (“IRS”)IRS regulations and specified limitations2011. (“SERP”).us.the Company. For a discussion of the material terms of the SERP, please see “Executive Compensation Tables — Tables—Pension Benefits at October 31, 2011 — During Fiscal 2014—Supplemental Executive Retirement Plan.”Perquisites.2011.2014. We provide our NEOs with limited perquisites and personal benefits that we and the Compensation Committee believebelieves are consistent with our executive compensation philosophy and objectives. Each fiscal year, the Compensation Committee reviews and approves those perquisites whichthat are to be provided to our NEOs. The Compensation Committee believes the perquisites for fiscal 2011,2014, which included auto and gas allowances, insurance, and tax and financial statement preparation assistance, as more fully described in the footnotes to the Summary Compensation Table in this proxy statement, are reasonable, and consistent with our past practices, and consistent with general practices in our industry.Plan. Our NEOs may elect to defer receipt of all or part of their cash compensation pursuant to thePlan. The Deferred Compensation Plan is open was designed to enable certain management and highly compensated employees; allemployees, including our NEOs, are eligible to participate in the Deferred Compensation Plan. Under the Deferred Compensation Plan, NEOs may elect, prior to the beginning of the year, to defer a portion of their cash compensation during any calendar year. They may selectIn December 2014, the Company amended and restated the Deferred Compensation Plan (the "2015 Plan"), which had been frozen for compensation earned after December 31, 2011, to enable employees to defer a fixed payment date or dates for paymentportion of their cash compensation starting in January 1, 2015. Any amounts deferred prior to January 1, 2015, which are not re-deferred under the 2015 Plan, will continue to be governed by the terms of the deferred amounts, or electDeferred Compensation Plan in effect prior to have such amounts paid upon termination of employment.January 1, 2015. Mr. Hartman is the only NEO who participated in the Deferred Compensation Plan prior to January 1, 2015. We have the right under the Deferred Compensation Plan to make discretionary contributions for the benefit of any participant in the plan. We did not make any discretionary contributions under the Deferred Compensation Plan for any NEO in fiscal 2011. No new contributions to the Plan by employees are allowed for compensation earned after December 31, 2011.20112014 on any NEO deferred compensation that is considered above-market interest under SEC rules is included under “Change in Pension Value and Nonqualified Deferred Compensation Earnings” in the Summary Compensation Table in this proxy statement, and further information about NEO deferred compensation is contained in the Nonqualified Deferred Compensation at October 31, 2011During Fiscal 2014 table in this proxy statement.Change of Control Provisionsdiscreteadditional benefits that arise simply from thea change of control or severance related thereto; however, under our equity compensation plans and our SERP, awards and benefits are generally subject to special provisions upon a defined “change of control” transaction. Upon a change of control, any outstanding options, restricted stock,RSUs, deferred cash, or other plan awards will generally immediately vest, and any restrictions will immediately lapse. Under the SERP, if there is a change of control of the Company, all participants in the SERP shallwould be fully vested in their SERP benefits and potentially eligible for a lump sum payout.Position Multiple Executive Chairman and CEO 3.0 x base salary Other Executive Officers 1.0 x base salary Directors 3.0 x annual cash retainer Regulations.Regulations. Section 162(m) of the Code generally disallows a tax deduction to a public company for compensation over $1 million paid to specified “covered employees” (its chief executive officer and to any of its three other most highly-compensated executive officers other than its chief financial officer). Performance-based compensation will not be subject to the deduction limitation if certainspecified requirements set forth in the Code and applicable Treasury Regulations are met. We generallyintend to structure our compensation plans for our NEOs to comply with the performance-based compensation exemption requirements of Section 162(m) of the Code; however, since corporate objectives may not always be consistent with the requirements for full deductibility, the Board and the Compensation Committee may award non-deductible compensation to our NEOs as they deem appropriate. Our Senior Officer Plan, stock option grants, and Performance RSUs are currently designed to be tax deductible under Section 162(m).Considerations.Considerations. When making decisions about executive compensation, the Compensation Committee also considers howthe accounting implications of the various elements of our compensation willprogram, including the impact on our financial results. We accrue our NEOs’ salariesresults and estimated cash bonus awards as an expense during the performance year.dilutive impact to stockholders of various forms of compensation. For equity compensation grants, the Financial Accounting Standards Board Accounting Standards Codification (“ASC”) TopicASC 718 “Compensation-Stock Compensation” (“ASC 718”) requires us to recognize compensation expense for all share-based payment arrangements based upon the grant date fair value of those awards and period of vesting. InThe aggregate expense estimated to be recognized over the period of vesting is included in the Summary Compensation Table contained in this proxy statement we are required to show the grant date fair value of the equity awards made to our NEOs in each fiscal year and to include this amount as part of the NEOs’ total compensation.compensation in the fiscal year of the grant. This number, while required by the SEC rules and important for understanding the impact of granting equity on our financial statements, may not accurately represent the value received by the NEO. For example, stock options have a compensation expense for accounting purposes, but do not have any value to an NEO unless the market value of our stock increases above the grant price of the stock option. In fact, options granted over the past six years to our NEOs were “under water” as of October 31, 2011 (that is, the exercise price of these options was higher than the closing price of our common stock on the NYSE on October 31, 2011). Similarly, stock awards and units fluctuate in value based on the market price of our common stock and may be worth more or less than the associated exercise date fair value. Performance-based stock awards and units, which do have grant date fair value, may never have any value to the recipient because the performance criteria may never be met.Looking Ahead — Fiscal 2012 CompensationBase Salaries. In December 2011, the Compensation Committee determined that, for fiscal 2012, the base salary of Mr. Toll would be reduced to $1 million, the base salary for Mr. Yearley would remain at $1 million, and the base salary for Mr. Connor would be increased to $700,000.Annual Incentive Bonuses. Pursuant to the terms of the Cash Bonus Plan, Mr. Toll will be entitled to a Company Performance Bonus under the Cash Bonus Plan for fiscal 2012 equal to 2.0% of our fiscal 2012 income before taxes and will be eligible to receive a Plan Year Performance Bonus, which will be determined by evaluating Mr. Toll’s performance in light of one or more performance goals established by the Compensation Committee in a manner consistent with prior periods. Similarly, pursuant to the terms of the Senior Officer Plan, Messrs. Yearley and Connor will be eligible to receive annual incentive bonuses for fiscal 2012 based upon our achievement of one or more performance goals established by the Compensation Committee in a manner consistent with prior periods.Long-Term Incentive Compensation. The Compensation Committee met in December 2011 and decided to grant options to acquire 100,000 shares of common stock to Mr. Toll, options to acquire 120,000 shares of common stock to Mr. Yearley, and options to acquire 20,000 shares of common stock to Mr. Connor. Such grants were made as of December 20, 2011, have an exercise price of $20.50 and will vest in equal installments over four years. The Compensation Committee also determined to award performance-based RSUs to some of our NEOs relating to 200,000 shares to Mr. Toll, 110,000 shares to Mr. Yearley, 22,000 shares to Mr. Connor, respectively. The RSUs were valued based on the closing price of our common stock on the NYSE on December 20, 2011. The RSUs granted to each NEO are divided equally into three performance metrics, such that one-third of the shares relating to the RSUs granted to the NEO are allocated to each performance metric, which has various levels of achievement in the fiscal 2012 performance period. In the event the threshold level of achievement is not achieved for a performance metric, none of the RSUs would be earned for that metric. Satisfaction of the various levels of achievement would earn between 90% and 110% of the RSUs allocated to that metric. In addition, each such RSU is subject to service vesting in equal amounts over four years from the date of grant and the RSUs will not be delivered until the end of the four year service vesting period, except as otherwise provided in the event of death, disability and change of control.EXECUTIVE Executive Compensation Committee has reviewed and discussed with our management the Compensation Discussion and Analysis section of this proxy statement. Based on such review and discussion, the Executive Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2011.Executive Compensation Committee of the Board of Directors. Fiscal
Year Salary
($) Stock
Awards
($)(1) Option
Awards
($)(1) Non-Equity
Incentive Plan
Compensation
($)(2) Change in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)(3) All Other
Compensation
($)(4) Total
($) 2011 1,300,000 3,264,000 805,000 1,250,000 656,435 92,913 7,368,348
of the Board 2010 1,300,000 3,160,000 — 1,000,000 825,670 90,668 6,376,338 2009 1,170,000 3,772,000 — — 1,545,585 95,910 6,583,495 2011 1,000,000 1,632,000 1,279,200 1,250,000 267,355 26,437 5,455,492 2010 1,000,000 — 413,500 1,000,000 115,588 19,083 2,548,171 2011 1,000,000 — 944,400 1,250,000 410,588 47,117 3,652,105
and President 2010 1,000,000 — 1,052,760 1,500,000 483,692 36,874 4,073,326 2009 1,000,000 152,000 1,173,600 1,520,000 845,088 49,308 4,739,996 2011 650,000 97,920 206,400 225,000 257,985 14,209 1,451,014 2010 509,808 — 90,970 200,000 102,764 7,971 911,513 Year Robert I. Toll 2014 1,000,000 4,699,732 1,302,000 1,500,000 368,131 163,356 9,033,219 Executive Chairman of the Board 2013 1,000,000 5,049,939 1,351,000 1,500,000 — 124,045 9,024,984 2012 1,057,692 4,100,000 878,000 2,500,000 816,478 94,173 9,446,343 Douglas C. Yearley, Jr. 2014 1,000,000 3,516,000 3,016,230 2,300,000 198,902 40,922 10,072,054 Chief Executive Officer 2013 1,000,000 3,778,000 2,494,500 2,200,000 57,070 33,744 9,563,314 2012 1,000,000 2,255,000 1,281,600 2,000,000 334,339 32,249 6,903,188 Richard T. Hartman 2014 991,667 1,054,800 796,740 800,000 163,969 31,079 3,838,255 President and Chief Operating Officer 2013 936,538 1,133,400 665,200 550,000 206,804 30,707 3,522,649 2012 866,154 102,500 320,400 500,000 245,482 28,153 2,062,689 Martin P. Connor 2014 841,667 879,000 626,010 800,000 142,288 24,635 3,313,600 Chief Financial Officer 2013 780,769 944,500 498,900 500,000 69,143 23,765 2,817,077 2012 690,385 451,000 213,600 400,000 229,476 20,019 2,004,480 (1) These columns present the aggregate grant date fair value of RSUs and stock options, respectively, granted in the indicated fiscal year, calculated in accordance with ASC 718 utilizing the assumptions discussed in Note 910 in the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended October 31, 2011. The calculation2014, excluding the effect of these amounts disregards the estimate of forfeitures related to time-based vesting conditions.estimated forfeitures. The amounts shown in these columns do not reflect compensation actually received by the NEOs. The actual value, if any, that a NEO may realize from an award is contingent upon the satisfaction of the conditions to vesting in that award, including performance conditions in the case of Performance RSUs, and, for stock options, upon the excess of the share price over the exercise price, if any, on the date the options are exercised. Thus, there is no assurance that the value, if any, eventually realized by the NEOs will correspond to the amount shown in the table.(2) The award to Mr. Toll for fiscal 2011 and 2010 represents a Plan Year Performance Bonus determined by the Compensation Committee under the terms of the Cash Bonus Plan, as described on pages 26 and 27 of this proxy statement. Mr. Toll did not earn an award for fiscal 2009 under the terms of the Cash Bonus Plan. The awardsannual incentive bonuses for Messrs. Toll, Yearley, BarzilayHartman, and Connor for fiscal 2011, 2010 and 2009, as applicable,2014 were earned based upon the terms of the Senior Officer Plan, as described on page 27pages 33 to 34 of this proxy statement, and the predecessor to that plan, the Executive Officer Bonus Plan. Mr. Barzilay elected to defer 20% of the 2009 award into his account in the Deferred Compensation Plan (see “Nonqualified Deferred Compensation During Fiscal 2011” in this proxy statement).statement.(3) The amounts in this column represent the increase in the actuarial present value of accumulated benefits under the SERP for each NEO and the amount of above-market interest earned on their respective balances, if applicable, in the Deferred Compensation Plan. Messrs. Toll, Yearley, and Connor did not participate in the Deferred Compensation Plan during the fiscal years indicated in the table above. The exact amounts attributed to the increase or decrease in actuarial present value of SERP benefits and above-market interest on deferred compensation are as follows (see also the Pension Benefits at October 31, 2011During Fiscal 2014 table on page 3746 of this proxy statement): Fiscal Year Increase in
Actuarial Present
Value of
Accumulated
SERP Benefits) ($) Above-Market
Interest Earned on
Deferred
Compensation Total) ($) 2011 656,435 N/A 656,435 2010 825,670 N/A 825,670 2009 1,545,585 N/A 1,545,585 2011 267,355 N/A 267,355 2010 115,588 N/A 115,588 2011 341,346 69,242 410,588 2010 429,349 54,343 483,692 2009 803,704 41,384 845,088 2011 257,985 N/A 257,985 2010 102,764 N/A 102,764 Name Total ($) Robert I. Toll 2014 368,131 N/A 368,131 2013 (1,093,566 ) N/A (1,093,566 ) 2012 816,478 N/A 816,478 Douglas C. Yearley, Jr. 2014 198,902 N/A 198,902 2013 57,070 N/A 57,070 2012 334,339 N/A 334,339 Richard T. Hartman 2014 139,583 24,386 163,969 2013 172,414 34,390 206,804 2012 213,453 32,029 245,482 Martin P. Connor 2014 142,288 N/A 142,288 2013 69,143 N/A 69,143 2012 229,476 N/A 229,476 (4) Fiscal 20112014 “All Other Compensation” consists of: Fiscal 2011 Robert I.
Toll Douglas C.
Yearley, Jr. Zvi
Barzilay Martin P.
Connor $ 45,876 $ 3,970 $ 11,433 $ 0 2,450 2,450 2,450 2,888 22,174 3,567 17,152 3,621 22,413 16,450 16,082 7,200 500 $ 92,913 $ 26,437 $ 47,117 $ 14,209 Fiscal 2014 Payments for tax and financial statement preparation assistance $ 94,093 $ 8,359 $ — $ — Contribution to 401(k) Plan 10,300 10,300 10,300 10,342 Life and disability insurance premiums (5) 17,027 3,723 4,759 4,010 Auto and gas allowance 19,500 15,900 15,900 9,900 Non-business use of Company cars and drivers 22,436 2,640 120 383 Total $ 163,356 $ 40,922 $ 31,079 $ 24,635 (5) Includes annual premiums for: annual life, accidental death and dismemberment, and long term disability insurance provided to all employees; supplemental long-term disability insurance provided to executives; and an executive life insurance policy for Mr. Barzilay retired from our company, effective December 31, 2011.Toll for which the Company pays $13,400 for the term component.
Grant Date Fair Value of Name ($) ($) Robert I. Toll Douglas C. Yearley, Jr. Zvi Barzilay Martin P. Connor Name Robert I. Toll Douglas C. Yearley, Jr. Zvi Barzilay Martin P. Connor Name Robert I. Toll Douglas C. Yearley, Jr Zvi Barzilay Martin P. Connor During Fiscal 2014 Name Robert I. Toll Douglas C. Yearley, Jr Zvi Barzilay Martin P. Connor Participant Robert I. Toll Douglas C. Yearley, Jr. Zvi Barzilay Martin P. Connor below: 2011. Under the Deferred Compensation Plan, NEOs Name Zvi Barzilay Summary Compensation Table. Plan. 2014. 2014. Mr. Toll is already fully vested in his SERP benefits. Payments and Benefits Accelerated vesting of unvested equity awards: Stock option(2) RSU shares(3) Payment of SERP Benefits(4) Total: Payments and Benefits Accelerated vesting of unvested equity awards Stock option(2) RSU shares(3) Payment of SERP Benefits(4) Total: Payments and Benefits Accelerated vesting of unvested equity awards Stock option(2) RSU shares(3) Payment of SERP Benefits(4) Total: REPORT Board, relating to communication with audit committees. Form 5. terms generally available in unaffiliated transactions under like Mr. Toll. 12, 2015. “untimely." intermediary that it will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. judgment.2011 Estimated Future Payouts Under
Non-Equity Incentive Plan Awards Estimated
Future
Payouts
Under
Equity
Incentive
Plan Awards All Other
Stock
Awards:
Number of
Shares of
Stock or All Other
Option
Awards:
Number of
Securities
Underlying Exercise
or Base
Price of
Option
Stock and
Option Grant Action Threshold Target Maximum Target Units Options Awards Awards Date Date(1) ($) (#)(4) (#) (#)(5) ($/Sh) ($)(5) 12/20/2010 12/15/2010 (2 ) (3 ) 8,500,000 200,000 100,000 19.32 4,069,000 12/20/2010 12/15/2010 (6 ) (7 ) 8,500,000 100,000 120,000 19.32 2,911,200 12/20/2010 12/15/2010 (6 ) (7 ) 8,500,000 120,000 19.32 944,400 12/20/2010 12/15/2010 (6 ) (7 ) 8,500,000 6,000 20,000 19.32 304,320 Name Robert I. Toll (5) (6) 8,500,000 12/20/2013 12/5/2013 120,300 133,667 147,034 4,699,732 12/20/2013 12/5/2013 100,000 35.16 1,302,000 Douglas C. Yearley, Jr. (5) (6) 8,500,000 12/20/2013 12/5/2013 90,000 100,000 110,000 3,516,000 12/20/2013 12/5/2013 159,000 35.16 3,016,230 Richard T. Hartman (5) (6) 8,500,000 12/20/2013 12/5/2013 27,000 30,000 33,000 1,054,800 12/20/2013 12/5/2013 42,000 35.16 796,740 Martin P. Connor (5) (6) 8,500,000 12/20/2013 12/5/2013 22,500 25,000 27,500 879,000 12/20/2013 12/5/2013 33,000 35.16 626,010 (1) The Executive Compensation Committee met on December 12, 20105, 2013 and made determinations regarding bonuses and equity compensationstock option grants for fiscal 20102013 performance and service.Performance RSU grants relating to performance to occur during fiscal 2014. All grants of equity compensation were made on December 20, 2010,2013, which is consistent with our practice of awarding equity compensation described under “Compensation Discussion and Analysis — Fiscal 2011 Compensation Elements — Analysis—Long-Term Incentive Compensation.Compensation Decisions.”(2) Awards to Mr. Toll are made pursuant toReflects Performance RSUs the terms of the Cash Bonus Plan. The Cash Bonus Plan does not include a threshold amount; awards in any fiscal year, whether pursuant to the formula contained in the Cash Bonus Plan or pursuant to the Plan Year Performance Bonus (as described in the Cash Bonus Plan) could be as low as $0.(3)The Cash Bonus Plan does not include a target amount. When the Executive Compensation Committee metawarded to our NEOs under the Toll Brothers, Inc. Amended and Restated Stock Incentive Plan for Employees (2007) at its meeting on December 12, 2010 to establish performance criteria for fiscal 2011 under the Plan Year Performance Bonus contained in the Cash Bonus Plan, it did not establish a target amount for the fiscal 2011 award.5, 2013. See “Compensation Discussion and Analysis — Fiscal 2011Analysis—Long-Term Incentive Compensation Elements — Annual Incentive Bonus — Robert I. Toll”Decisions—Performance-Based RSUs” for further information.(4)On December 20, 2010, the Executive Compensation Committee awarded an RSU under the Employee Plan relating to 200,000 shares of our common stock to Mr. Toll, 100,000 shares of our common stock to Mr. Yearley and 6,000 shares of our common stock to Mr. Connor. See “Compensation Discussion and Analysis — Fiscal 2011 Compensation Elements — Long-Term Incentive Compensation” for further information.(5)(3)See “Compensation Discussion and Analysis — Fiscal 2011 Compensation Elements — Analysis—Long-Term Incentive Compensation”Compensation Decisions—Stock Options” for a discussion of these option grants. The exercise price of the options granted in fiscal 20112014 is the closing price of our common stock on December 20, 2010.the grant date.(6)(4) Amount represents the aggregate grant date fair value of RSUs and stock options, respectively, granted in fiscal 2014, calculated in accordance with ASC 718 utilizing the assumptions discussed in Note 10 in the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended October 31, 2014. The calculation of these amounts disregards the estimate of forfeitures related to time-based vesting conditions. With respect to the Performance RSUs, the estimate of the grant date fair value determined in accordance with ASC 718 assumes the vesting of 100% of the RSUs awarded. (5) Awards to Messrs. Toll, Yearley, BarzilayHartman, and Connor were made pursuant to the terms of the Senior Officer Plan. The plan does not include a threshold amount; awards in any fiscal year could be as low as $0.(7)(6) The Senior Officer Plan does not include a target amount and, when the Executive Compensation Committee met on December 12, 20105, 2013 to establish performance goals for fiscal 20112014 for each of Messrs. Toll, Yearley, BarzilayHartman, and Connor, it did not establish a target amount for fiscal 2011their awards. For a detailed discussion of the formula and criteria applied for such performance-based awards, please see “Compensation Discussion and Analysis — Fiscal 2011Analysis—Cash Compensation Elements — Decisions—Annual Incentive Bonus — Messrs. Yearley, Barzilay and Connor”Bonus” in this proxy statement.20112014 salary, annual incentive bonus, and equity and bonus awards and the amounts of salary and bonus in proportion to total compensation with respect to each NEO.2011 Option Awards Stock Awards Grant Date Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable Option
Exercise
Price ($) Option
Expiration
Date Number of
Shares or
Units of
Stock That
Have Not
Vested (#) Market Value
of Shares
or Units of
Stock That
Have Not
Vested ($) Equity
Incentive
Plan Awards:
Number
of Unearned
Shares,
Units or
Rights
That Have Not
Vested (#) Equity
Incentive
Plan Awards:
Market
or Payout
Value of
Unearned
Shares,
Units or
Rights
That Have
Not
Vested ($) 12/20/2002 500,000 10.5250 12/20/2012 12/20/2003 500,000 20.1350 12/20/2013 12/20/2004 500,000 32.5500 12/20/2014 12/20/2005 250,000 35.9700 12/20/2015 12/20/2006 550,000 31.8200 12/20/2016 12/20/2007 412,500 137,500 (1) 20.7600 12/20/2017 12/19/2008 200,000 (5) 3,488,000 (8) 12/21/2009 200,000 (6) 3,488,000 (8) 12/20/2010 100,000 (4) 19.3200 12/20/2020 200,000 (7) 3,488,000 (8) 12/20/2001 31,297 10.8800 12/20/2011 12/20/2002 29,250 10.5250 12/20/2012 12/20/2003 31,306 20.1350 12/20/2013 12/20/2007 11,250 5,000 (1) 20.7600 12/20/2017 07/18/2008 18,692 18.9200 12/20/2014 07/18/2008 9,007 18.9200 12/20/2015 07/18/2008 2,376 1,057 (1) 18.9200 12/20/2016 07/18/2008 10,729 18.9200 12/20/2016 12/20/2008 7,500 10,000 (2) 21.7000 12/20/2018 12/20/2009 9,375 37,500 (3) 18.3800 12/20/2019 12/20/2010 120,000 (4) 19.3200 12/20/2020 100,000 (7) 1,744,000 (8) 12/20/2001 9,190 10.8800 12/20/2011 12/20/2002 250,000 10.5250 12/20/2012 12/20/2003 254,000 20.1350 12/20/2013 12/20/2004 240,000 32.5500 12/20/2014 12/20/2005 120,000 35.9700 12/20/2015 12/20/2006 120,000 31.8200 12/20/2016 12/20/2006 22,500 7,500 (1) 31.8200 12/20/2016 12/20/2007 90,000 30,000 (1) 20.7600 12/20/2017 12/20/2008 60,000 60,000 (2) 21.7000 12/20/2018 12/20/2009 31,000 93,000 (3) 18.3800 12/20/2009 12/20/2010 120,000 (4) 01/05/2009 5,000 5,000 (9) 22.1800 01/05/2019 12/20/2009 2,750 8,250 (3) 18.3800 12/20/2019 12/20/2010 20,000 (4) 19.3200 12/20/2020 6,000 (7) 104,640 (8) The2014 Option Awards Stock Awards Name Robert I. Toll 12/20/2004 500,000 32.55 12/20/2014 12/20/2005 250,000 35.97 12/20/2015 12/20/2006 550,000 31.82 12/20/2016 12/20/2007 550,000 20.76 12/20/2017 12/20/2010 75,000 25,000 (1) 19.32 12/20/2020 12/20/2011 50,000 50,000 (2) 20.50 12/20/2021 109,843 (5) 3,509,484 12/17/2012 25,000 75,000 (3) 32.22 12/17/2022 105,060 (6) 3,356,667 12/20/2013 100,000 (4) 35.16 12/20/2023 133,736 (7) 4,272,865 Douglas C. Yearley, Jr. 12/20/2007 16,250 20.76 12/20/2017 7/18/2008 18,692 18.92 12/20/2014 7/18/2008 9,007 18.92 12/20/2015 7/18/2008 14,162 18.92 12/20/2016 12/20/2008 17,500 21.70 12/20/2018 12/20/2009 46,875 18.38 12/20/2019 12/20/2010 90,000 30,000 (1) 19.32 12/20/2020 12/20/2011 60,000 60,000 (2) 20.50 12/20/2021 60,414 (5) 1,930,227 12/17/2012 37,500 112,500 (3) 32.22 12/17/2022 78,598 (6) 2,511,206 12/20/2013 159,000 (4) 35.16 12/20/2023 100,051 (7) 3,196,629 Richard T. Hartman 12/20/2007 20,000 20.76 12/20/2017 7/18/2008 11,176 18.92 12/20/2015 7/18/2008 18,310 18.92 12/20/2016 12/20/2008 20,000 21.70 12/20/2018 12/20/2009 10,000 18.38 12/20/2019 12/20/2010 7,500 2,500 (1) 19.32 12/20/2020 834 (8) 26,646 12/20/2011 15,000 15,000 (2) 20.50 12/20/2021 2,746 (5) 87,735 12/17/2012 10,000 30,000 (3) 32.22 12/17/2022 23,580 (6) 753,381 12/20/2013 42,000 (4) 35.16 12/20/2023 30,015 (7) 958,979 Martin P. Connor 1/5/2009 10,000 22.18 1/5/2019 12/20/2009 11,000 18.38 12/20/2019 12/20/2010 15,000 5,000 (1) 19.32 12/20/2020 12/20/2011 10,000 10,000 (2) 20.50 12/20/2021 12,083 (5) 386,052 12/17/2012 7,500 22,500 (3) 32.22 12/17/2022 19,650 (6) 627,818 12/20/2013 33,000 (4) 35.16 12/20/2023 25,012 (7) 799,133 that are reflected in the above tableterminates within a specified period of time after termination of employment; however, under specified circumstances, such as “exercisable” vested in equal installments on the first four anniversariesretirement, death, disability, or a change of the original grant date.control, special vesting rules apply, as described below under "Potential Payments upon Termination or Change of Control."(1) 100% of the options vest on December 20, 2011.2014.(2) 50% of the options vest on each of December 20, 20112014 and 2012.2015.(3) 33.33% of the options vest on each of December 20, 2011, 201217, 2014, 2015, and 2013.2016.(4) 25% of the options vest on each of December 20, 2011,2014, 2015, 2016, and 2017.(5) 50% of the 2012 Performance RSUs vest on each of December 20, 2014, and 2015. (6) 33.33% of the 2013 Performance RSUs vest on each of December 17, 2014, 2015, and 2016. (7) 25% of the 2014 Performance RSUs vest on each of December 20, 2014, 2015, 2016, and 2017. (8) 100% of the RSUs vest on December 20, 2014. (5)200,000 performance-based RSUs were awarded to Mr. Toll on December 18, 2008. These RSUs will only vest if(9) The options that are reflected in the average closing price of our common stockabove table as fully “exercisable” vested in equal installments on the NYSE, measured over any 20 consecutive trading days endingfirst four anniversaries of the original grant date.(10) The market value was calculated based on or prior to December 19, 2013, increases 30% or more over $21.70, the closing price of our common stock on the NYSE on December 19, 2008. These RSUs will also vest if Mr. Toll dies or becomes disabled, or if we experience a change of control prior to satisfaction of the aforementioned performance criteria.(6)200,000 performance-based RSUs were awarded to Mr. Toll on December 21, 2009. These RSUs will only vest if the average closing price of our common stock on the NYSE, measured over any 20 consecutive trading days ending on or prior to December 21, 2014, increases 30% or more over $18.38, the closing price of our common stock on the NYSE on December 21, 2009, and provided Mr. Toll continues to be employed by us or serve as a member of our Board until December 21, 2012. These RSUs will also vest if Mr. Toll dies or becomes disabled, or if we experience a change of control prior to satisfaction of the aforementioned performance criteria.(7)On December 20, 2010, 200,000 performance-based RSUs were awarded to Mr. Toll, 100,000 performance-based RSUs were awarded to Mr. Yearley and 6,000 performance-based RSUs were awarded to Mr. Connor. These RSUs will only vest if the average closing price of our common stock on the NYSE, measured over any 20 consecutive trading days ending on or prior to December 20, 2015, increases 30% or more over $19.32, the closing price of our common stock on the NYSE on December 20, 2010, and provided the executive continues to be employed by us or serve as a member of our Board until December 20, 2013. These RSUs will also vest if the executive dies or becomes disabled, or if we experience a change of control prior to satisfaction of the aforementioned performance criteria.(8)The value of performance-based RSUs was calculated based on the closing price of the NYSE on October 31, 20112014 of $17.44$31.95 per share.(9)50% of the options vest on each of January 5, 2012 and 2013.2011 Option Awards Number of
Shares Acquired
on Exercise (#)(1) Value Realized
on Exercise ($)(2) 1,000,000 10,563,563 25,000 171,775 500,876 5,354,615 — — Option Awards Stock Awards Name Robert I. Toll — — 289,941 10,132,692 Douglas C. Yearley, Jr. 16,306 203,907 156,406 5,453,125 Richard T. Hartman 23,313 480,015 13,398 457,242 Martin P. Connor — — 18,591 642,133 (1)Messrs. Toll, Yearley and Barzilay held each of these options for virtually their entire 10-year term prior to exercise.(2)(1)“Value Realized on Exercise” equals the difference between the closing price of our common stock on the NYSE on the various dates of exercise and the exercise price, multiplied by the number of shares of our common stock acquired upon exercise of the stock options. (2) "Number of Shares Acquired on Vesting" includes, in addition to Performance RSU awards and, in the case of Mr. Hartman, time-based RSU awards that vested and were promptly delivered in fiscal 2014 (a) the portion of the 2012 Performance RSU awards for these NEOs that vested on December 20, 2013 but will not be delivered until December 20, 2015, (b) the portion of the 2013 Performance RSU awards for these NEOs that vested on December 17, 2013 but will not be delivered until December 17, 2016, and (c) in the case of Mr. Hartman, time-based RSUs that vested on December 20, 2013 but were not delivered until January 19, 2015. (3) “Value Realized on Vesting” is based on the number of shares of our common stock underlying the RSUs that vested during fiscal 2014 multiplied by the closing price of our common stock on the NYSE on the vesting date. at October 31, 2011 Plan Name(1) Number of Years
of Credited
Service (#)(1) Present Value of
Accumulated
Benefit ($)(2) Payments During
Last Fiscal
Year ($) SERP 20.0 8,963,565 — SERP 20.0 1,389,378 — SERP 20.0 4,661,054 — SERP 2.8 789,940 — Name Plan Name(1) Robert I. Toll SERP 20.0 9,054,608 — Douglas C. Yearley, Jr. SERP 20.0 1,979,689 — Richard T. Hartman SERP 20.0 1,569,162 — Martin P. Connor SERP 5.8 1,230,847 — (1) In order to be vested in benefits under the SERP, participants generally must have 20 yearsreached age 62, except participants will be vested in SERP benefits in the event of service with us. The SERP does not provide for partial benefits for less than 20 years of servicedeath or increased benefits based solely upon the completion of more than 20 years of service. In the case of Martin Connor, who joined the Company atdisability prior to age 45, his benefits under the SERP will vest62 after 17five years of service.(2) For a description of the SERP and the assumptions used in the calculation of the present value of plan benefits, see Note 12,13, “Employee Retirement and Deferred Compensation Plans” in the notes to the Consolidated Financial Statements contained in our Annual Report on Form 10-K for the fiscal year ended October 31, 2011.2014. The increasechange in the actuarial present value of accumulated benefits under the SERP is due to the 10% annual increase in some NEO’s annuity amounts described herein, a change in the discount rate used for actuarial purposes and the passage of time. SinceWe use the inception of the SERP, we have used the 15-20 year Moody’s AA Bond rateCitigroup yield curve as our discount rate for actuarial purposes. This rate, which was used for calculating the actuarial present value of accumulated SERP benefits,benefits. This rate was 5.30%3.04% for fiscal 2009 calculations, 4.99%2012, 3.97% for fiscal 20102013, and 4.06%3.53% for fiscal 2011.2014. When the discount rate decreases, as it did in fiscal 2009 and subsequently in fiscal 20102012 and fiscal 2011,2014, the actuarial present value of accumulated SERP benefits increases. When the discount rate increases, as it did in fiscal 2013, the actuarial present value of accumulated SERP benefits decreases.completed 20 years of service with us and has reached “normal retirement age,” which is age 62 under the SERP. During fiscal 2014, the Compensation Committee amended the SERP to eliminate a 20-year service requirement, except that a participant would have to be employed for five years in order to receive a death or disability benefit under the SERP.each NEOMr. Toll, who hashad already reached retirement age under the SERP, on his birthday during fiscal 2008 through fiscal 2010, annual retirement benefits under the SERP increased by 10% of the applicable original annual benefit amount (set forth below). In order to behave been eligible for the annual increase in any given year, the NEO must have be employed by us on his birthday during such year, have completed 20 years of service with us on or prior to his birthday during such year, and have reached normal retirement age on or prior to his birthday during such year. During fiscal 2010, the Company discontinued any 10% increases beyond fiscal 2010; except that Mr. Yearley’sthe annual benefit amount for Mr. Yearley, Mr. Hartman, and Mr. Connor will be subject to such increase for the first three years of service to the Company after he reachesthey reach age 62. Accordingly, there were no annual increases during fiscal 2011. 20112014 are set forth in the table below. Original Annual
Benefit Amount Fiscal 2011
Increase Annual Benefit
Amount at
October 31, 2011 $ 500,000 — $ 650,000 $ 150,000 — $ 150,000 $ 260,000 — $ 338,000 $ 100,000 — $ 100,000 Participant Original Annual Benefit Amount Annual Benefit
Amount at
October 31, 2014Robert I. Toll $ 500,000 $ 650,000 Douglas C. Yearley, Jr. $ 150,000 $ 175,000 Richard T. Hartman $ 100,000 $ 125,000 Martin P. Connor $ 100,000 $ 125,000 has completed the requisite 20 years of service with us and has reached normal retirement age and is, therefore, fully vested in his SERP benefits. Mr. Yearley, has completed the requisite 20 years of service withus, but hasMr. Hartman, and Mr. Connor have not reached normal retirement age and isare not fully vested in histheir respective SERP benefits. Mr. Connor has not completed the requisite 17 years of service with us, nor has he reached normal retirement age and is, therefore, not fully vested in his SERP benefits. Mr. Barzilay had completed the requisite 20 years of service with us and had reached normal retirement age and, was therefore, fully vested in his SERP benefits at the time of his retirement on December 31, 2011. Benefits under the SERP will cease if any participant competes with us following retirement.at OctoberDuring Fiscal 20142011maycould elect, six months prior to the end of the calendar year for which any bonus may be earned, to defer a portion of their cash compensation. Compensation that is deferred under the Deferred Compensation Plan earns various rates of return, depending on the length of time of the deferral. Interest rates are established by a majority of the board of directors of a wholly owned subsidiary that administers the Deferred Compensation Plan, and are reviewed and adjusted annually for new deferrals. When establishing interest rates, the directors of the subsidiary review the rates charged to us for borrowings, as well as interest rates generally available in the market. During fiscal 2011,2014, interest rates for amounts deferred under the Deferred Compensation Plan ranged from 4% to 8%, based upon when the compensation was deferred and the length of time it had been or was to be deferred. For more information on the Deferred Compensation Plan, see “Compensation Discussion and Analysis — Analysis—Benefits and Perquisites — Perquisites—Deferred Compensation Plan” in this proxy statement. No new contributions to the Plan by employees are allowed for compensation earned after December 31, 2011.Barzilay, whoHartman is the only NEO who participated in the Deferred Compensation Plan as described below. Executive
Contributions
in Last
FY ($) Registrant
Contributions
in Last
FY ($) Aggregate
Earnings
in Last
FY ($)(1) Aggregate
Withdrawals/
Distributions ($) Aggregate
Balance
at Last
FYE ($)(2) — 198,019 198,019 — 2,739,102 Name Plan Robert I. Toll SIP — 3,100,692 (278,154 ) — 4,628,341 Douglas C. Yearley, Jr. SIP — 1,937,125 (163,045 ) — 2,767,253 Richard T. Hartman SIP — 340,054 (21,303 ) — 418,673 DCP — — 123,491 — 2,402,969 Martin P. Connor SIP — 431,173 (34,509 ) — 595,292 (1) "Registrant Contributions in Last FY" column represents the value of (a) the portion of the 2012 Performance RSU awards for these NEOs that vested on December 20, 2013 but will not be delivered until December 20, 2015, (b) the portion of the 2013 Performance RSU awards for these NEOs that vested on December 17, 2013 but will not be delivered until December 17, 2016, and (c) the portion of time-based RSUs granted to Mr. Hartman that vested on December 20, 2013 but were not delivered until January 19, 2015, in each case based on the closing price of our common stock on the applicable vesting date. (2) “Aggregate Earnings in Last FY” column representsincludes unrealized earnings/(losses) on (a) the unrealized earnings on the NEO’s account balance in the Deferred Compensation Plan as described below. $69,242 of the amount shown under this column represents above-market earnings2012 Performance RSU awards and 2013 Performance RSU awards for these NEOs that have vested but will not be delivered until December 20, 2015 and December 17, 2016, respectively, and (b) time-based RSUs granted to Mr. Hartman that have vested but were accordingly reported as compensation in 2011 in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the Summary Compensation Table on page 32.not delivered until January 19, 2015.(2)(3) “Aggregate Balance at Last FYE” column representsincludes the net balancevalue, based on the closing price of compensationour common stock on October 31, 2014, of (a) the 2012 Performance RSU awards and 2013 Performance RSU awards for these NEOs that was earnedhave vested but will not be delivered until December 20, 2015 and deferred in prior yearsDecember 17, 2016, respectively, and the interest accrued on such deferred amounts. Of the amount shown, $69,242, $54,343 and $41,384 of above-market interest was included in(b) time-based RSUs granted to Mr. Barzilay’s fiscal 2011, 2010 and 2009 compensation, respectively, in the Summary Compensation Table.Hartman that have vested but were not delivered until January 19, 2015.Certain Restricted Stock AwardsOn December 19, 2008, eachNEOs employed at the time was granted RSUs corresponding to a reduction in base salary or incentive bonus of the NEO, as applicable, as follows: Mr. Toll (5,991 RSUs; $130,000 grant date value); Mr. Yearley (1,153 RSUs; $25,000 grant date value); and Mr. Barzilay (7,005 RSUs; $152,000 grant date value). These RSUs were considered to have vested upon grant but the underlying shares of common stock had not been delivered at October 31, 2011. Accordingly, the deferred receipt of the underlying shares is considered deferred compensation. The RSUs will be delivered at the four-year anniversary of the grant date, or earlier in the event of death, disability, retirement or change of control of the Company. At October 31, 2011, the values of the RSUs for Messrs. Toll, Yearley and Barzilay were $104,483, $20,108 and $122,167, respectively. As a result of Mr. Barzilay’s retirement on December 31, 2011, he will receive all of the shares underlying his RSUs.areis any of them entitled to any sort of cash severance payment upon termination or separation from us. We do maintain equity compensation plans and retirement plans that provide for the continuation or acceleration of benefits in the event of specified separations from employment with us or a change of control of the Company.2011,2014, the last business day of our 20112014 fiscal year, and are based, as applicable, on a share price of $17.44,$31.95, the closing price of our common stock on the NYSE on October 31, 2011.2014. These amounts and values do not necessarily reflect the actual amounts and values that would be paid to the NEOs upon an actual termination of employment or a change of control in the future. The actual amounts and values can only be determined at the time of such NEO’s separation or a change of control.plan and the Deferred Compensation Plan, including the value of shares underlying RSUs that had been considered vested in a prior fiscal year.Plan. See the “Compensation Discussion and Analysis”Analysis—Benefits and Perquisites” for information about the Company’s 401(k) plan and the “Executive Compensation Tables — Nonqualified Deferred Compensation Plan at October 31, 2011.”EquityLong-Term Incentive Compensation Plan Awards.Awards. Generally, unvested equity awards held by any of our employees, including the NEOs, are cancelledcanceled upon termination of employment with the Company, and the right to exercise vested stock options terminates within a specified period of time (depending on the terms of the applicable grant documents and the manner of termination) after termination of employment; however, under specified circumstances, such as retirement, death, disability, or a change of control, special vesting rules apply, as described below. All equity awards, whether vested or unvested, held by an NEO terminate immediately upon a termination of employment for cause.Retirement.Retirement. With respect to stock options, granted on or after December 20, 2000, if Messrs. Toll, Yearley, or BarzilayHartman retire from service with us after reaching age 62, heeach is entitled to continued vesting and exercisability of any unvested and/or unexercised options (stock options granted to Mr. Yearley to date will expire prior to his attainment of the retirement age of 62).options. Options do not automatically vest upon retirement, but will continue to vest on their normal vesting schedule as if the NEO were still employed by us. In addition, the NEO will have the remainder of the option term to exercise the option, rather than being forced to exercise within a specified period of time following retirement. This continued vesting and exercisability is conditioned upon the NEO refraining from competing with us at any time. The tables below do not reflect an amount for unvested options with respect to retirement because vesting is not accelerated at retirement. There is no accelerated vesting for shares subject to Performance RSUs upon retirement; all Performance RSUs that have not met the required vesting conditions are forfeited.Disability.Disability. If an NEO’s employment with us terminates due to death or disability, he (or his estate) is entitled to continued vesting and exercisability of any unvested and/or unexercised options. Options do not immediately vest upon death or disability, but will continue to vest on their normal vesting schedule as if the NEO were still employed by us. In addition, the NEO (and(or his estate) will have the remainder of the option term to exercise the option, rather than being forced to exercise within a specified period of time following termination of employment. This continued vesting and exercisability are conditioned upon, in the event of the NEO’s disability, the NEO refraining from competing with us at any time. The tables below do not reflect an amount for unvested options with respect to termination due to death or disability because vesting is not accelerated upon these events.performance-basedPerformance RSUs held by an NEO fully vest and all restrictions immediately lapse upon the NEO’s termination of his employment with us due to death or disability. The amounts in the tables below areinclude the amounts that would have been recognized by the applicable NEO if his employment with us had terminated due to death or disability and allvalue of his previously unvested shares subject to performance-based RSUs were vestedthat would vest and be delivered to him and soldthe NEO if his employment with us terminated due to death or disability, based upon the closing price of our common stock on the NYSE on October 31, 2011.Benefits.Benefits. Under the SERP, participants become 100% vested in their retirement benefits once they complete 20 years of service with us and reach age 62 (except for Mr. Connor as previously discussed herein).62. As of October 31, 2011, Messrs.2014, Mr. Robert I. Toll and Zvi Barzilay had reached age 62 and, had completed 20 years of service with us; as a result, they were allhe was fully vested in theirhis SERP benefits. The tables below do not include benefits payable to Messrs.Mr. Toll and Barzilay under the SERP. See “Supplemental Executive Retirement Plan”If a participant has completed five years of service with us, upon his death or disability, he would become fully vested in his SERP benefits, and “Pension Benefits at October 31, 2011.”the benefits would be paid in bi-weekly installments over a 20-year period following the date on which he would have reached age 62. In addition, if a SERP participant is terminated by the Company without cause, he would become fully vested in his SERP benefits, and the benefits would be paid in bi-weekly installments over a 20-year period following the date on which he would have reached age 62. If a SERP participant is terminated for cause, all SERP benefits are subject to forfeiture, regardless of whether the participant is fully vested. See “Supplemental Executive Retirement Plan” and “Pension Benefits During Fiscal 2014” above.payout.payout equal to the actuarial equivalent present value of their benefits as of the payment date. The tables below reflect the amounts of previously unvested performance-based RSUs that would have vested if a change of control had occurred on October 31, 2011.2014. In addition, with respect to Messrs. Yearley, Hartman, and Connor, the tables below also reflect the benefits payable in a lump sum under the SERP as if a change of control had occurred on October 31, 2011.2011. Termination of Employment ($) Change in
Control ($) Voluntary(1) Normal
Retirement Involuntary
Not for
Cause Involuntary
For
Cause Death Disability — — — — — — — — — — — 10,464,000 10,464,000 10,464,000 — — — — — — — — — — — 10,464,000 10,464,000 10,464,000 Termination of Employment ($) Payments and Benefits Voluntary(1) Death Disability Accelerated vesting of unvested equity awards: Stock options — — — — — — 888,250 RSU shares (2) — — — — 11,139,016 11,139,016 11,139,016 Payment of SERP benefits (3) — — — — — — — Total: — — — — 11,139,016 11,139,016 12,027,266 (1) For purposes of this table, “Voluntary” means a termination of employment that is not in accordance with our normal retirement policy, which includes an agreement not to compete with the Company. (2)Mr. Toll did not have any in-the-money options that were unvested at October 31, 2011.(3)(2)See footnotes 5, 6, and 7 to the Outstanding Equity Awards at October 31, 20112014 table in this proxy statement. Had Mr. Toll terminated his employment at October 31, 2011,2014, the value of his shares subject to performance-based RSUs, based upon the closing price of our common stock on the NYSE on October 31, 2011,2014 of $31.95, would have been $10,464,000.$11,139,016.(4)(3) The amount of Mr. Toll’s SERP benefits, in which he has already fully vested as described above, would be paid in bi-weekly installments over a 20-year period, except in the event of a change inof control. Upon a change inof control, the amount of the benefit shown would be paid in a single lump sum, equal to the actuarial equivalent present value of Mr. Toll’s SERP benefits as of the date of payment, unless prohibited by applicable tax regulations (see “Pension Benefits at October 31, 2011”During Fiscal 2014”).2011. Termination of Employment ($) Change in
Control ($) Voluntary(1) Normal
Retirement Involuntary
Not for
Cause Involuntary
For Cause Death Disability — — — — — — — — — — — 1,744,000 1,744,000 1,744,000 — — — — 3,000,000 3,000,000 3,000,000 — — — — 4,744,000 4,744,000 4,744,000 Termination of Employment ($) Payments and Benefits Voluntary(1) Death Disability Accelerated vesting of unvested equity awards: Stock options — — — — — — 1,065,900 RSU shares (2) — — — — 7,638,062 7,638,062 7,638,062 Payment of SERP benefits (3) — — 3,500,000 — 3,500,000 3,500,000 3,500,000 Total: — — — — 11,138,062 11,138,062 12,203,962 (1) For purposes of this table, “Voluntary” means a termination of employment that is not in accordance with our normal retirement policy, which includes an agreement not to compete with the Company. (2) Mr. Yearley did not have any in-the-money options that were unvested at October 31, 2011.(3)See footnotefootnotes 5, 6, and 7 to the Outstanding Equity Awards at October 31, 20112014 table in this proxy statement. Had Mr. Yearley terminated his employment at October 31, 2011,2014, the value of his shares subject to performance-based RSUs, based upon the closing price of our common stock on the NYSE on October 31, 2011,2014 of $31.95, would have been $1,744,000.$7,638,062.(4)(3) The amount of the benefit shown would be paid in bi-weekly installments over a 20-year period, except in the event of a change inof control. Upon a change inof control, the amount of the benefit shown would be paid in a single lump sum, equal to the actuarial equivalent present value of Mr. Yearley’s benefits as of the date of payment, unless prohibited by applicable tax regulations (see “Pension Benefits During Fiscal 2014”). Termination of Employment ($) Payments and Benefits Voluntary(1) Death Disability Accelerated vesting of unvested equity awards: Stock options — — — — — — 203,325 RSU shares (2) — — — — 1,826,741 1,826,741 1,826,741 Payment of SERP benefits (3) — — 2,500,000 — 2,500,000 2,500,000 2,500,000 Total: — — — — 4,326,741 4,326,741 4,530,066 (1) For purposes of this table, “Voluntary” means a termination of employment that is not in accordance with our normal retirement policy, which includes an agreement not to compete with the Company. (2) See footnotes 5, 6, 7, and 8 to the Outstanding Equity Awards at October 31, 2011”2014 table in this proxy statement. Had Mr. Hartman terminated his employment at October 31, 2014, the value of his shares subject to RSUs, based upon the closing price of our common stock on the NYSE on October 31, 2014 of $31.95, would have been $1,826,741.(3) The amount of the benefit shown would be paid in bi-weekly installments over a 20-year period, except in the event of a change of control. Upon a change of control, the amount of the benefit shown would be paid in a single lump sum, equal to the actuarial equivalent present value of Mr. Hartman’s benefits as of the date of payment, unless prohibited by applicable tax regulations (see “Pension Benefits During Fiscal 2014”). 2011. Termination of Employment ($) Change in
Control ($) Voluntary(1) Normal
Retirement Involuntary
Not for
Cause Involuntary
For Cause Death Disability — — — — — — — — — — — 104,640 104,640 104,640 — — — — — — 2,000,000 — — — — 104,640 104,640 2,104,640 Termination of Employment ($) Payments and Benefits Voluntary(1) Death Disability Accelerated vesting of unvested equity awards: Stock options — — — — — — 177,650 RSU shares (2) — — — — 1,813,003 1,813,003 1,813,003 Payment of SERP benefits (3) — — 2,500,000 — 2,500,000 2,500,000 2,500,000 Total: — — — — 1,654,653 1,654,653 4,535,628 (1) For purposes of this table, “Voluntary” means a termination of employment that is not in accordance with our normal retirement policy, which includes an agreement not to compete with the Company. (2) Mr. Connor did not have any in-the-money options that were unvested at October 31, 2011.(3)See footnotes 5, 6, and 7 to the Outstanding Equity Awards at October 31, 20112014 table in this proxy statement. Had Mr. Connor terminated his employment at October 31, 2011,2014, the value of his shares subject to performance-based RSUs, based upon the closing price of our common stock on the NYSE on October 31, 2011,2014 of $31.95, would have been $104,640.$1,813,003.(4)(3) The amount of the benefit shown would be paid in bi-weekly installments over a 20-year period, except in the event of a change of control. Upon a change inof control, the amount of the benefit shown would be paid in a single lump sum, equal to the actuarial equivalent present value of Mr. Connor’sHartman’s benefits as of the date of payment, unless prohibited by applicable tax regulations (see “Pension Benefits at October 31, 2011”During Fiscal 2014”).Zvi BarzilayUpon termination of Zvi Barzilay’s employment or a change of control of the Company, had such termination or change of control occurred on October 31, 2011, Mr. Barzilay would have been entitled to the payment of benefits under the SERP, in which, as described above, he was already fully vested and which would be paid in bi-weekly installments over a 20-year period, except in the event of a change of control. In the event of a change of control, the amount of SERP benefit would be paid in a single lump sum, equal to the actuarial equivalent present value of Mr. Barzilay’s SERP benefits as of the date of payment, unless prohibited by applicable tax regulations (see “Pension Benefits at October 31, 2011”). Mr. Barzilay did not have any in-the-money options that were unvested at October 31, 2011. In connection with his retirement effective December 31, 2011, Mr. Barzilay was entitled to the payment of benefits under the SERP and other customary retirement benefits. In addition, we agreed to provide him with COBRA benefits for his spouse for a period of 28 months following his retirement, which benefits are estimated to be approximately $15,000 in aggregate.REPORT OF THE Governance and Board Matters — Governance—Committees of the Board and Meetings — Meetings—Audit and Risk Committee,” the Audit and Risk Committee of the Board oversees the Company’s financial reporting process on behalf of, and reports to, the Board. Company management has primary responsibility for preparation of the financial statements and the overall reporting process, including the Company’s system of internal control.20112014 with management, including a discussion of the quality not just the acceptability, of accounting principles,financial reporting, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements. The Audit and Risk Committee also discussed with Ernst & Young LLP, the Company’s independent registered public accounting firm, the matters required to be discussed by the Statement on Auditing StandardsStandard No. 61, as amended (AICPA,Professional Standards, Vol.1. AU section 380),16, as adopted by the Public Company Accounting Oversight Board.20112014 for filing with the SEC.16(a)16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCEwithin a prescribed period of time and written representations we received from the reporting persons, we believe that all filings required to be made by the reporting persons during or with respect to the period November 1, 20102013 through October 31, 2011 (“Reporting Period”)2014 were made on a timely basis except that one Form 5 filing to report a single transaction that occurred during the Reporting Period and which related solely to a charitable giftbasis. In November 2014, an inheritance of 778 shares fromreceived by Mr. Robert I. Toll to an educational institutionPaul E. Shapiro in March 2003 was not filedreported on a timely basis.partyperson that is or may be required to be disclosed pursuant to Item 404 of the SEC’s Regulation S-K (each, a “related partyperson transaction”). Under the Policy, the Nominating and Corporate Governance Committee (the “Governance Committee”) of the Board is responsible for reviewing and determining whether to approve or ratify any related partyperson transaction. In making its determination to approve or ratify a related partyperson transaction, the Governance Committee considers such factors as (1) as:party’sperson’s interest in the transaction, (2) transaction;services, (3) services;partyperson transaction are no less favorable thancircumstances, (4) circumstances;transaction, (5) transaction;transactiontransaction; and (6) partyperson transactions be reported to our legal department prior to consummation. The legal department is required to evaluate each transaction to determine if it is, in fact, a related partyperson transaction and, if so, to report the transaction to the Governance Committee or its designee (the Chairperson or another member of the Governance Committee, or another committee of the Board), for review. The legal department maintains a list of all related partiespersons and periodically distributes that list to our officers and employees to help facilitate compliance with the Policy and the proper reporting of proposed related partyperson transactions. Under the Policy, all related partyperson transactions that continue for more than one fiscal year are required to be reviewed and approved annually by the Governance Committee.2011,2014, Mr. Robert I. Toll, Executive Chairman of the Board, paid approximately $288,427$367,011 to us for personal services, including administrative services, bookkeeping services, investment services, computer and legalrelated technology services, car service,and associated office space for personal use and home improvement services. These services were provided by our employees, and suchspace. Such amounts were billed at competitive rates, or rates based on the relevant employee’s compensation or the cost to the Company, as applicable, and were paid throughout the year with monies deposited with us in advance by Mr. Toll.Company,Company; one-third by Mr. Robert I. Toll, Executive Chairman of the Board, Mr. Bruce E. Toll, Vice Chairman of the Board (and trusts established for the benefit of members of his family), Zvi Barzilay, our recently retired President and Chief Operating Officer (and trusts established for the benefit of members of his family), the Estate of Joel H. Rassman, our former Chief Financial Officer,Mr. Douglas C. Yearley, Jr., our Chief Executive Officer, and other current and former members of our senior management,management; and one-third by the Pennsylvania State Employees Retirement System. At October 31, 2011,2014, our investment, under the Generally Accepted Accounting Principles, in Toll Realty LP and the Trust was $382,021.$2,555,820. We earned fees from Toll Realty LP and the Trust of $3,197,389$2,830,285 in fiscal 20112014 under the terms of various development, finance, and management services agreements. We believe that these transactions were on terms no less favorable than we would have agreed to with unrelated parties.persons. Under such agreements, we also incur certain costs on behalf of Toll Realty LP and the Trust for which weAdam Barzilay, the son of Zvi Barzilay, is employed on a full-time basis by the Company as a Land Acquisition Manager in California. 2011, he received $237,530 in total compensation (salary, benefits, bonus and options to acquire shares of the Company’s common stock), which the Company believes was consistent with the compensation it would have paid to an unrelated individual in a similar position with the Company.In addition, in fiscal 2011, BET Investments, a company owned and operated by2014, Mr. Bruce E. Toll retained our engineering departmentpaid approximately $94,465 to provideus for personal services, including administrative services, bookkeeping services, tax services, and computer and related technology services. Such amounts were billed at competitive rates, and were paid throughout the year with monies deposited with us in connection with the construction of various commercial real estate properties. The total amount paidadvance by Bruce E. Toll and BET Investments for these services provided during fiscal 2011 was $168,495. The rates charged are comparable to what we would have charged to an unrelated third party.“Corporate Governance and Board Matters —“Director Compensation—Other Director Compensation.Compensation Arrangements.”20132016 ANNUAL MEETING OF STOCKHOLDERS20132016 Annual Meeting of Stockholders may do so by following the procedures prescribed by Rule 14a-8 under the Exchange Act. To be eligible for inclusion, proposals must be submitted in writing and received by us at the address appearing on the firstcover page of this proxy statement on or before October 6, 2012.20132016 Annual Meeting of Stockholders, but not to have the proposal included in our proxy statement and form of proxy relating to that meeting. Under Section 2-9 of our bylaws, except as otherwise prescribed by the presiding officer, no business may be brought before the annual meeting unless it is specified in the notice of meeting or is otherwise brought before the meeting at the direction of the Board, by the presiding officer, or by a stockholder entitled to vote who has delivered written notice to us (containing certain information specified in the bylaws about the stockholder and the proposed action) not less than 45 days or more than 75 days prior to the first anniversary of the date on which the Company first mailed its proxy materials for the preceding year’s annual meeting — meeting—that is, with respect to the 20132016 Annual Meeting of Stockholders, between November 20, 2012,26, 2015 and December 20, 2012.A26, 2015. (other than a nomination brought pursuant to and in accordance with any proxy access rules adopted by the SEC subsequent to the date of this proxy statement and effective for the 2013 Annual Meeting of Stockholders) must deliver written notice of the nomination within the time period set forth in the previous sentence and comply with the information requirements in the bylaws relating to stockholder nominations. These requirements are separate from and in addition to (a) the SEC requirements referenced above for inclusion of a stockholder proposal in our proxy statement (b) any requirements adopted by the SEC subsequent to the date of this proxy statement and effective for the 2012 Annual Meeting of Stockholders relating to the inclusion of a stockholder nominee for director in our proxy statement and (c)(b) the requirements set forth below for having our Nominating and Corporate Governance Committee consider a person, who has been recommended by certain stockholders, for nomination as a director. If notice of any such proposal is not submitted in writing and received by us at the address appearing on the firstcover page of this proxy statement by December 20, 2012,the dates specified in our bylaws, then such proposal shall be deemed “untimely” for purposes of Rule 14a-4 promulgated under the Exchange Act and, therefore, the persons appointed by our Board as its proxies will have the right to exercise discretionary voting authority with respect to such proposal. NOMINATING CANDIDATES OR RECOMMENDING CANDIDATES FORAny stockholder may submit a nomination for director by followingbylaws. In addition,bylaws described above, the Nominating and Corporate Governance Committee has adopted a policy permitting stockholders to recommend candidates for director under certain circumstances. The Nominating and Corporate Governance Committee will only consider nominating a candidate for director who is recommended by a stockholder who has been a continuous record owner of at least 1% of our common stock for at least one year prior to submission of the candidate’s name and who provides a written statement that the holder intends to continue ownership of the shares through the annual meeting of stockholders. Notice must be given to the Nominating and Corporate Governance Committee with respect to a stockholder nominee no more than 150 days and no less than 120 days prior to the anniversary date of this proxy statement.e-mail, telegraph or telecopyelectronically by our directors, officers, or employees, or by a professional proxy solicitation firm that we engage.judgement.February 3, 2012
