UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): APRIL 28, 2005
TOLL BROTHERS, INC.
(Exact Name of Registrant as Specified in Charter)
DELAWARE 001-09186 23-2416878
(State or Other Jurisdiction) (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
250 GIBRALTAR ROAD, HORSHAM, PA 19044
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (215) 938-8000
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
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Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
The Executive Compensation Committee of the Board of Directors (the
"Committee") of Toll Brothers, Inc. (the "Company") previously established a
performance period and applicable performance goals under the terms of the
Company's Executive Officer Cash Bonus Plan (the "Bonus Plan") that would permit
payment of bonuses to Zvi Barzilay, the Company's President and Chief Operating
Officer, and Joel H. Rassman, the Company's Executive Vice President, Treasurer
and Chief Financial Officer (the designated participants in the Bonus Plan) for
their successful attainment of those performance goals during the current fiscal
year (the "Existing Performance Period"), as described in Amendment No. 1 on
Form 10-Q/A to the Company's Form 10-Q for the quarter ended January 31, 2005.
The Committee, on April 28, 2005, determined to revise the terms of the
arrangements currently in place by adding a new performance period (the
"Additional Performance Period") with a performance goal more aligned with those
applicable to the Chief Executive Officer under the Company's Cash Bonus Plan,
as discussed below, and by eliminating certain performance goals for the
Existing Performance Period and the potential bonus payments relating thereto,
thereby reducing the amount that could potentially be payable to the Bonus Plan
participants for the Existing Performance Period. The other performance targets
previously established for the Existing Performance Period remain in effect
without change so that a bonus may still be payable with respect to the Existing
Performance Period, to the extent those performance targets are attained. Such
remaining previously established performance goals for Mr. Barzilay include:
making personal visits to at least four remote divisions; providing weekly
recommendations to the Chief Executive Officer arising out of weekly sales and
production reports, and following up with Vice Presidents-Operations with
respect thereto; meeting with and reviewing, on a monthly basis, all support
departments, including human resources, manufacturing, architecture, land
development, engineering and facilities maintenance; increasing production in an
amount approximating the increase in sales from fiscal 2004 to fiscal 2005;
reorganizing the Company's operations into actual divisions with leadership
responsibilities resting with the senior vice presidents; devising and
implementing a new land approval system where certain transactions may be
approved by specific senior officers; reviewing and approving all new land
transactions, except as noted above; and evaluating and, if approved,
implementing a new long term incentive program. The remaining previously
established goals for Mr. Rassman include: timely and successful implementation
and completion of the controls testing process under section 404 of the
Sarbanes-Oxley Act of 2002; organizing and/or conducting all bank and analysts
meetings, and integrating other financial managers into the process; ensuring
the presentation of timely quarterly financial statements and cash flow
projections; organizing and assisting in the preparation and conduct of all
quarterly backlog/revenue and earnings conference calls; restructuring the
Company's tax department responsibilities and reviewing federal and state tax
areas to seek to achieve tax savings and efficiencies and implementing programs
with respect thereto; and developing financing structures with explanations and
examples that are easily understood by senior management and investigate joint
venture opportunities.
As part of the Committee's reconsideration of the compensation for
Messrs. Barzilay and Rassman, and to provide appropriate incentives for these
executives for the remainder of the Company's fiscal year that are linked to the
Company's financial performance, the Committee has established the Additional
Performance Period, which commences as of May 1, 2005 and runs through October
31, 2005, and the performance goal for the Additional Performance Period. The
performance goal for the Additional Performance Period is stated in terms of the
Company's attainment of specified levels of adjusted pre-tax earnings during the
Additional Performance Period, and the maximum amount of the bonuses payable
with respect to the Additional Performance Period is determined by application
of a mathematical formula to the Company's actual adjusted pre-tax earnings for
that period in excess of a series of targeted levels of adjusted pre-tax
earnings. For these purposes, the adjustment to the pre-tax earnings involves
adding back accruals for the performance based bonuses payable to the executive
officers.
The bonuses payable with respect to the Existing Performance Period and
the Additional Performance Period are subject to all applicable limitations of
the Bonus Plan, including the Bonus Plan's limitations on aggregate payments to
any one participant during any one Plan Year (defined in the Bonus Plan as the
Company's fiscal year).
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(c). Exhibits.
The following Exhibit is filed as part of this Current Report on Form 8-K:
Exhibit
No. Item
10.1* Executive Cash Bonus Plan 2005 Performance Goals as amended on April
28, 2005.
* Filed electronically herewith.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TOLL BROTHERS, INC. Dated: April 29, 2005
By: Joseph R. Sicree
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Joseph R. Sicree
Vice President, Chief
Accounting Officer