As filed with the Securities and Exchange Commission, via
EDGAR, on June 20, 2002. Registration Nos. 333-85030, 333-85030-01, 333-85030-02
and 333-85030-03.
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------------
TOLL BROTHERS, INC.
TOLL CORP.
FIRST HUNTINGDON FINANCE CORP.
TOLL FINANCE CORP.
(Exact name of each registrant as specified in its charter)
Delaware
------------ 22-2416878 - Toll Brothers, Inc.
(State or other 22-2485860 - Toll Corp.
jurisdiction of 23-2485787 - First Huntingdon Finance Corp.
incorporation 23-2978196 - Toll Finance Corp.
of each registrant) -------------------------------------------
(I.R.S. Employer Identification Number)
3103 Philmont Avenue
Huntingdon Valley, Pennsylvania 19006
(215) 938-8000
---------------------------------------------------------------------------
(Address, including zip code, and telephone
number, including area code, of
registrants' principal executive
offices)
Robert I. Toll
Chairman of the Board and
Chief Executive Officer
Toll Brothers, Inc.
3103 Philmont Avenue
Huntingdon Valley, Pennsylvania 19006
(215) 938-8000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------
Copies to:
Mark K. Kessler, Esquire
Wolf, Block, Schorr and Solis-Cohen LLP
1650 Arch Street, 22nd Floor
Philadelphia, Pennsylvania 19103-2097
(215) 977-2000
------------------
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this registration statement.
If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434 under the Securities Act, please check the following box. [ ]
------------------
The registrants hereby amend this registration statement on such date
or dates as may be necessary to delay its effective date until the registrants
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
Subject to Completion, dated June 20, 2002
PROSPECTUS
[TOLL BROTHERS, INC. LOGO]
TOLL BROTHERS, INC.
Common Stock
Preferred Stock
Warrants
Guarantees of Debt Securities
TOLL CORP.
FIRST HUNTINGDON FINANCE CORP.
TOLL FINANCE CORP.
Debt Securities
Toll Brothers, Inc. may offer any of the following securities from time
to time:
o common stock;
o preferred stock;
o warrants to purchase common stock or preferred stock issued by
Toll Brothers, Inc. or debt securities issued by Toll Corp.,
First Huntingdon Finance Corp. or Toll Finance Corp.; and
o guarantees of debt securities issued by Toll Corp., First
Huntingdon Finance Corp. or Toll Finance Corp.
Toll Corp., First Huntingdon Finance Corp. and Toll Finance Corp. may
offer debt securities from time to time. Toll Corp., First Huntingdon Finance
Corp. and Toll Finance Corp. are indirect, wholly-owned subsidiaries of Toll
Brothers, Inc.
Toll Brothers, Inc.'s common stock is listed on the New York Stock
Exchange and the Pacific Exchange under the Symbol "TOL."
YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 4 OF
THIS PROSPECTUS BEFORE PURCHASING ANY SECURITIES OFFERED BY THIS PROSPECTUS.
Each time we offer any of the securities described in this prospectus
we will provide a prospectus supplement that will describe the specific price of
the securities being offered and the other terms of the offering. You should
read this prospectus and the applicable prospectus supplement carefully before
you invest. This prospectus may not be used to sell any securities unless it is
accompanied by the applicable prospectus supplement.
----------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or passed on the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
The date of this prospectus is ___________ __, 2002.
*****************************************************************************
The following text is to appear vertically in the left margin of cover.
The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUMMARY
Toll Brothers, Inc.
Toll Brothers, Inc., through its subsidiaries, designs, builds, markets
and arranges financing for single-family homes in residential communities that
include both detached and attached homes. We market our homes primarily to
middle-income and upper-income buyers, catering to move-up, empty nester and
age-qualified home buyers. We emphasize high quality construction and consumer
satisfaction. We utilize our own land development, architectural, engineering,
mortgage, title, security monitoring, landscape, cable TV, broadband Internet
access, lumber distribution, house component assembly and manufacturing
operations. We also own and operate golf courses in conjunction with several of
our master planned communities. We currently operate in twenty-two states in six
regions around the country. While we continue to explore additional geographic
areas for expansion, our operations are currently conducted in major suburban
residential areas of:
o southeastern Pennsylvania and Delaware
o central New Jersey
o the Virginia and Maryland suburbs of Washington, D.C.
o Baltimore County, Maryland
o the Boston, Massachusetts metropolitan area
o Rhode Island
o southern New Hampshire
o Fairfield and Hartford Counties, Connecticut
o Westchester County, New York
o the Los Angeles metropolitan area and San Diego, California
o the San Francisco Bay area of northern California
o Palm Springs, California
o the Phoenix, Arizona metropolitan area
o Raleigh and Charlotte, North Carolina
o Dallas, Austin and San Antonio, Texas
o the east and west coasts of Florida
o Las Vegas, Nevada
o Columbus, Ohio
o Nashville, Tennessee
o Detroit, Michigan
o Chicago, Illinois
o Denver, Colorado
In recognition of its achievements, Toll Brothers, Inc. has received
numerous awards from national, state and local homebuilder publications and
associations. Toll Brothers, Inc. is the only publicly traded home builder to
have won all three of the industry's highest honors: America's Best Builder
(1996), The National Housing Quality Award (1995), and Builder of the Year
(1988).
Co-founded by Robert I. Toll and Bruce E. Toll, Toll Brothers, Inc.
commenced its business operations, through predecessor entities, in 1967. Toll
Brothers, Inc. is a Delaware corporation that was formed in May 1986.
2
Toll Corp., First Huntingdon Finance Corp. and Toll Finance Corp. are
indirect, wholly-owned subsidiaries of Toll Brothers, Inc. which were
incorporated in Delaware in July 1987, July 1987 and October 1998, respectively.
Neither Toll Corp., First Huntingdon Finance Corp. nor Toll Finance Corp. has
any independent operations or generates any operating revenues other than
providing financing to other subsidiaries of Toll Brothers, Inc. by lending the
proceeds of its offerings of debt securities and related activities. There is no
present intention to have Toll Corp., First Huntingdon Finance Corp. or Toll
Finance Corp. engage in other activities.
Principal Executive Offices
The principal executive offices of Toll Brothers, Inc., Toll Corp.,
First Huntingdon Finance Corp. and Toll Finance Corp. are located at 3103
Philmont Avenue, Huntingdon Valley, Pennsylvania 19006, and their telephone
number is (215) 938-8000.
About This Prospectus
This prospectus describes securities that may be offered from time to
time by Toll Brothers, Inc., Toll Corp., First Huntingdon Finance Corp. and Toll
Finance Corp. This prospectus is part of a registration statement that we filed
with the SEC utilizing a "shelf" registration process, which allows us to offer
and sell any combination of the securities described in this prospectus in one
or more offerings. Using this prospectus, Toll Brothers, Inc., Toll Corp., First
Huntingdon Finance Corp. and Toll Finance Corp. may offer up to $750,000,000
worth of securities.
This prospectus provides you with a general description of the
securities we may offer. Each time we sell securities, we will provide a
prospectus supplement that will describe the specific terms of the securities we
are offering. Each supplement will also contain specific information about the
terms of the offering it describes. The prospectus supplement may also add to,
update or change the information contained in this prospectus. In addition, as
we describe below in the section entitled "Where You Can Find More Information,"
Toll Brothers, Inc. has filed and plans to continue to file other documents with
the SEC that contain information about it and the business conducted by it and
its subsidiaries. Before you decide whether to invest in any of the securities
offered by this prospectus, you should read this prospectus, the prospectus
supplement that further describes the offering of those securities and the
information Toll Brothers, Inc. otherwise files with the SEC.
When this prospectus or a supplement to this prospectus uses the words
"we," "us" and "our," they refer to Toll Brothers, Inc. and its subsidiaries,
including Toll Corp., First Huntingdon Finance Corp. and Toll Finance Corp.,
unless the context otherwise requires. The phrase "this prospectus" refers to
this prospectus and any applicable prospectus supplement, unless the context
otherwise requires.
3
RISK FACTORS
YOU SHOULD CONSIDER CAREFULLY THE FOLLOWING RISK FACTORS, AS WELL AS
ALL OF THE OTHER INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS, BEFORE PURCHASING ANY SECURITIES OFFERED IN CONNECTION WITH THIS
PROSPECTUS.
An Adverse Change in Economic Conditions Could Reduce the Demand For Homes and,
as a Result, Could Reduce Our Earnings.
Changes in national and regional economic conditions, as well as local
economic conditions where we conduct our operations and where prospective
purchasers of our homes live, can have a negative impact on our business.
Adverse changes in employment levels, job growth, consumer confidence, housing
demand, interest rates and population growth may reduce demand and depress
prices for our homes. This, in turn, can reduce our earnings.
The Homebuilding Industry is Highly Competitive and, if Others are More
Successful, Our Business Could Decline.
We operate in a very competitive environment, which is characterized by
competition from a number of other home builders in each market in which we
operate. We compete with large national and regional homebuilders and with
smaller local homebuilders for land, financing, raw materials and skilled
management and labor resources. We also compete with the resale, or "previously
owned," home market. Heavy competition could make it more difficult for us to
acquire land at acceptable prices and cause us to increase our selling
incentives and/or reduce our sales. An oversupply of homes available for sale
could depress our home prices and adversely affect our operations. If we are
unable to compete effectively in our markets, our business could decline.
If Land Is Not Available at Reasonable Prices, Our Sales and Earnings Could
Decrease.
Our operations depend on our ability to continue to obtain land for the
development of our residential communities at reasonable prices. Changes in the
general availability of land, competition for available land, availability of
financing to acquire land, zoning, regulations that limit housing density and
other market conditions may hurt our ability to obtain land for new residential
communities. If land appropriate for development of our residential communities
becomes less available because of these factors, or for any reason, the cost of
land could increase and/or the number of homes that we build and sell could be
reduced.
If the Market Value of Our Land Inventory Drops Significantly, Our Costs Could
Increase and Our Profits Could Decrease.
The market value of our land and housing inventories depends on market
conditions. We acquire land for expansion into new markets and for replacement
of land inventory and expansion within our current markets. If housing demand
decreases below what we anticipated when we acquired our inventory, we may not
be able to make profits similar to what we have made in the past, may experience
less than anticipated profits and/or may not be able to recover our costs when
we build and sell homes. We may have substantial inventory carrying costs or we
may have to sell land or homes at a loss in the face of adverse market
conditions.
Government Regulations May Delay the Completion of Our Communities, Increase Our
Expenses or Limit Our Homebuilding Activities, Which Could Have a Negative
Impact on Our Operations.
We incur substantial costs related to compliance with legal and
regulatory requirements. Any increase in legal and regulatory requirements may
cause us to incur substantial additional costs, as discussed below. Various
local, state and federal statutes, ordinances, rules and regulations concerning
building, zoning, sales and similar matters apply to and/or affect the housing
industry. This governmental regulation affects construction activities as well
as sales activities, mortgage lending activities and other dealings with
consumers. The industry also has experienced an increase in state and local
legislation authorizing the acquisition, mainly by governmental, quasi-public
and non-profit entities, of land as designated open space. We must obtain the
approval of numerous governmental authorities in connection with our development
activities, and these governmental authorities often have broad discretion in
exercising their approval authority. We may be required to apply for additional
approvals or the modification of our existing approvals because of changes in
local circumstances or applicable law.
4
Expansion of regulation in the housing industry has increased the time required
to obtain the necessary approvals to begin construction and has prolonged the
time between the initial acquisition of land or land options and the
commencement and completion of construction. These delays can increase our costs
and decrease our profitability.
Municipalities may restrict or place moratoriums on the availability of
utilities, such as water and sewer taps. In some areas, municipalities may enact
growth initiatives, which will restrict the number of building permits available
in a given year. If municipalities in which we operate take actions like these,
it could have an adverse effect on our business by causing delays, increasing
our costs or severely limiting our ability to operate in those municipalities.
Increases in Taxes or Government Fees Could Increase Our Costs and Adverse
Changes In Tax Laws Could Reduce Customer Demand For Our Homes.
Increases in real estate taxes and other local government fees, such as
fees imposed on developers to fund schools, open space, road improvements,
and/or low and moderate income housing, could increase our costs and have an
adverse effect on our operations. In addition, increases in local real estate
taxes could adversely affect our potential customers who may consider those
costs in determining whether to make a new home purchase and decide, as a
result, not to purchase one of our homes. In addition, any changes in the income
tax laws that would reduce or eliminate tax incentives to homeowners could make
housing less affordable or otherwise reduce the demand for housing, which in
turn could reduce our sales and hurt our operating results.
Adverse Weather Conditions and Conditions in Nature Beyond Our Control Could
Disrupt the Development of Our Communities, Which Would Harm Our Sales and
Earnings.
Adverse weather conditions and natural disasters, such as hurricanes,
tornadoes, earthquakes, floods and fires can have serious effects on our ability
to develop our residential communities. We also may be affected by unforeseen
engineering, environmental or geological problems. Any of these adverse events
or circumstances could cause delays in the completion of, or increase the cost
of, developing one or more of our residential communities and, as a result,
could harm our sales and earnings.
If We Experience Shortages of Labor and Supplies or Other Circumstances Beyond
Our Control, There Could Be Delays or Increased Costs in Developing Our
Communities, Which Would Adversely Affect Our Operating Results.
Our ability to develop residential communities may be affected by
circumstances beyond our control, including:
o work stoppages, labor disputes and shortages of qualified
trades people, such as carpenters, roofers, electricians and
plumbers;
o lack of availability of adequate utility infrastructure and
services;
o our need to rely on local subcontractors who may not be
adequately capitalized or insured; and
o shortages or fluctuations in prices of building materials.
Any of these circumstances could give rise to delays in the start or completion
of, or increase the cost of, developing one or more of our residential
communities. We may not be able to recover these increased costs by raising our
home prices because, typically, the home price for each home is set months prior
to delivery in a home sale contract with the customer. If that happens, our
operating results could be harmed.
5
Product Liability Litigation and Warranty Claims that Arise in the Ordinary
Course of Business May Be Costly, Which Could Adversely Affect Our Business.
As a homebuilder, we are subject to construction defect and home
warranty claims arising in the ordinary course of business. These claims are
common in the homebuilding industry and can be costly. In addition, the costs of
insuring against construction defect and product liability claims are high and
the amount of coverage offered by insurance companies is currently limited.
There can be no assurance that this coverage will not be further restricted and
become more costly. If we are not able to obtain adequate insurance against
these claims, we may experience losses that could hurt our business.
If We Are Not Able to Obtain Suitable Financing, Our Business May Decline.
Our business and earnings depend substantially on our ability to obtain
financing for the development of our residential communities, whether from bank
borrowings or from sales of our debt or equity securities. If we are not able to
obtain suitable financing, our costs could increase and our revenues could
decrease, or we could be precluded from continuing our operations at current
levels.
Increases in interest rates can make it more difficult and/or expensive
for us to obtain the funds we need to operate our business. The interest rate on
our revolving credit facility fluctuates based on changes in short-term interest
rates, the amount of borrowings we incur and the ratings that national rating
agencies assign to our outstanding debt securities. Increases in interest rates
generally and/or any downgrading in the ratings that national rating agencies
assign to our outstanding debt securities would increase the interest rates we
must pay on our debt securities and any such ratings downgrade could also make
it more difficult for us to sell our debt securities.
If Our Potential Customers Are Not Able to Obtain Suitable Financing, Our
Business May Decline.
Our business and earnings also depend on the ability of our potential
customers to obtain mortgages for the purchase of our homes. Increases in the
cost of home mortgage financing could prevent our potential customers from
purchasing our homes. In addition, where our potential customers must sell their
existing homes in order to buy a home from us, increases in mortgage costs could
prevent the buyers of our customers' existing homes from obtaining the mortgages
they need to complete the purchase, which could result in our potential
customers' inability to buy a home from us. If our potential customers or the
buyers of our customers' existing homes are not able to obtain suitable
financing, our sales and revenues could decline.
Our Principal Stockholders May Effectively Exercise Control Over Matters
Requiring Stockholder Approval.
As of June 10, 2002, Robert I. Toll and his affiliates owned, directly
or indirectly, approximately 20.9% of Toll Brothers, Inc.'s common stock, and
his brother Bruce E. Toll and his affiliates owned, directly or indirectly,
approximately 12.7% of Toll Brothers, Inc.'s common stock. To the extent they
and their affiliates vote their shares in the same manner, their combined stock
ownership may effectively give them the power to elect all of the directors and
control the management, operations and affairs of Toll Brothers, Inc. Their
ownership may discourage someone from making a significant equity investment in
Toll Brothers, Inc., even if we needed the investment to operate our business.
The large percentage of stock they own could also delay or prevent a change of
control transaction that other stockholders may deem to be in their best
interests, such as a transaction in which the other stockholders would receive a
premium for their shares over their current trading prices.
Our Business is Seasonal in Nature, So Our Quarterly Operating Results
Fluctuate.
Our quarterly operating results typically fluctuate with the seasons. A
significant portion of our home purchase contracts are entered into with
customers in the winter and spring months. Construction on a customer's home
typically proceeds after signing the contract and can require twelve months or
more to complete. Weather-related problems may occur in the late winter and
early spring delaying starts or closings or increasing costs and reducing
profitability. In addition, delays in opening new communities or new sections of
existing communities could have an adverse impact on home sales and revenues.
Because of these factors, our quarterly operating results may be uneven and may
be marked by lower revenues and earnings in some quarters.
6
Future Terrorist Attacks Against the United States or Increased Domestic or
International Instability Could Have an Adverse Effect On Our Operations.
In the weeks following the September 11, 2001 terrorist attacks, we
experienced a sharp decrease in the number of orders for new homes and
cancellation of many existing orders. Although new home purchases stabilized and
subsequently recovered in the months after that initial period, a generalized
economic uncertainty persists. Adverse developments in the war on terrorism,
future terrorist attacks against the United States, or increased domestic or
international instability could adversely affect our business.
7
WHERE YOU CAN FIND MORE INFORMATION
Toll Brothers, Inc. is subject to the informational requirements of the
Securities Exchange Act of 1934. In accordance with those requirements, Toll
Brothers, Inc. files annual, quarterly and special reports, proxy statements and
other information with the SEC. You can read and copy any document Toll
Brothers, Inc. files with the SEC at the SEC's public reference room at the
following location:
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
You may obtain information on the operation of the SEC's public
reference room by calling the SEC at 1-800-SEC-0330. The SEC filings of Toll
Brothers, Inc. are also available to the public from the SEC's Internet website
at http://www.sec.gov. In addition, the common stock of Toll Brothers, Inc. is
listed on the New York Stock Exchange and similar information concerning Toll
Brothers, Inc. can be inspected and copied at the New York Stock Exchange, 20
Broad Street, 7th Floor, New York, New York 10005. The common stock of Toll
Brothers, Inc. is also listed on the Pacific Exchange, but the Pacific Exchange
does not have a public reference room for review of SEC filings of its listed
companies.
The SEC allows us to "incorporate by reference" into this prospectus
the information Toll Brothers, Inc. files with the SEC. This means that we are
permitted to disclose important information to you by referring you to other
documents Toll Brothers, Inc. has filed with the SEC. We incorporate by
reference in two ways. First, we list certain documents that Toll Brothers, Inc.
has filed with the SEC. The information in these documents is considered part of
this prospectus. Second, Toll Brothers, Inc. expects to file additional
documents with the SEC in the future. The information in these documents, when
filed, will update and supersede the current information included in or
incorporated by reference in this prospectus. You should consider any statement
contained in this prospectus or in a document which is incorporated by reference
into this prospectus to be modified or superseded to the extent that the
statement is modified or superseded by another statement contained in a later
dated document that constitutes a part of this prospectus or is incorporated by
reference into this prospectus. You should consider any statement which is so
modified or superseded to be a part of this prospectus only as so modified or
superseded.
We incorporate by reference in this prospectus all the documents listed
below and any filings Toll Brothers, Inc. makes with the SEC under Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date
of this prospectus and before all the securities offered by this prospectus have
been sold or de-registered:
o The annual report on Form 10-K of Toll Brothers, Inc. filed
with the SEC for the fiscal year ended October 31, 2001;
o The quarterly reports on Form 10-Q of Toll Brothers, Inc.
filed with the SEC for the fiscal quarters ended January 31,
2002 and April 30, 2002;
o The current reports on Form 8-K of Toll Brothers, Inc. filed
with the SEC on November 29, 2001, December 6, 2001 and March
5, 2002;
o The description of the common stock of Toll Brothers, Inc.
contained in its registration statement filed with the SEC on
a Form 8-A dated June 19, 1986 registering the common stock
under Section 12 of the Securities Exchange Act of 1934; and
o The description of preferred stock purchase rights contained
in the registration statement of Toll Brothers, Inc. filed
with the SEC on June 19, 1997 on Form 8-A, as the same was
amended by an amendment filed with the SEC on August 21, 1998
on Form 8-A/A, registering the preferred stock purchase rights
under Section 12 of the Securities Exchange Act of 1934.
We will deliver, without charge, to anyone receiving this prospectus,
upon written or oral request, a copy of any document incorporated by reference
in this prospectus but not delivered with this prospectus, but the exhibits to
those documents will not be delivered unless they have been specifically
incorporated by reference. Requests for these documents should be made to:
Director of Investor Relations, Toll Brothers, Inc., 3103 Philmont Avenue,
Huntingdon Valley, PA 19006, (215) 938-8000. We will also make available to the
holders of the
8
securities offered by this prospectus annual reports which will include audited
financial statements of Toll Brothers, Inc. and its consolidated subsidiaries,
including Toll Corp., First Huntingdon Finance Corp. and Toll Finance Corp. We
do not expect that Toll Corp., First Huntingdon Finance Corp. or Toll Finance
Corp. will be required to make filings with the SEC under Section 15(d) of the
Securities Exchange Act of 1934.
This prospectus is part of our "shelf" registration statement. Toll
Brothers, Inc., Toll Corp., First Huntingdon Finance Corp. and Toll Finance
Corp. have filed the registration statement with the SEC under the Securities
Act of 1933 to register the securities that any of them may offer by this
prospectus, including any applicable prospectus supplement. Not all of the
information in the registration statement appears in this prospectus, or will
appear in any prospectus supplement. You should refer to the registration
statement and to the exhibits filed with the registration statement for further
information about Toll Brothers, Inc., its consolidated subsidiaries, including
Toll Corp., First Huntingdon Finance Corp. and Toll Finance Corp., and the
securities offered by this prospectus.
USE OF PROCEEDS
We intend to use the net proceeds from the sale of the securities
offered by this prospectus for general corporate purposes, which may include the
acquisition of residential development properties, the repayment of our
outstanding indebtedness, working capital or for any other purposes as may be
described in an accompanying prospectus supplement.
RATIO OF EARNINGS TO FIXED CHARGES
The following table shows the ratio of earnings to fixed charges of
Toll Brothers, Inc. for the periods indicated:
Six Months Ended
Year Ended October 31, April 30,
------------------------------------------------ ---------------------------
1997 1998 1999 2000 2001 2001 2002
---- ---- ---- ---- ---- ------------ -----------
Ratio, including
collateralized 3.81 4.35 3.89 4.53 4.92 4.24 3.98
mortgage financing(1)
- ---------------------
(1) For purposes of computing the ratio of earnings to fixed charges,
earnings consist of income before income taxes, extraordinary loss and change in
accounting plus interest expense and fixed charges except interest incurred.
Fixed charges consist of interest incurred (whether expensed or capitalized),
the portion of rent expense that is representative of the interest factor, and
amortization of debt discount and issuance costs.
DESCRIPTION OF DEBT SECURITIES AND GUARANTEES
Toll Corp., First Huntingdon Finance Corp. and Toll Finance Corp. may
issue debt securities from time to time in one or more series. Any series of
debt securities offered by Toll Corp., First Huntingdon Finance Corp. or Toll
Finance Corp. will be offered together with the guarantees of Toll Brothers,
Inc., which unless otherwise provided in the applicable prospectus supplement
will be full and unconditional.
One or more series of the debt securities of Toll Corp., First
Huntingdon Finance Corp. or Toll Finance Corp. may be issued under a single
indenture. Alternatively, any series of debt securities may be issued under a
separate indenture. The terms applicable to each series of debt securities will
be stated in the indenture and may be modified by the resolution(s) authorizing
that series of debt securities adopted by the board of directors, or an officer
or committee of officers authorized by the board of directors, of both the
issuer of the debt securities and Toll Brothers, Inc. under the applicable
indenture. We refer in this prospectus to the resolution(s) authorizing a series
of debt securities as an authorizing resolution. Each indenture under which any
debt securities are issued, including the applicable authorizing resolution(s),
is referred to in this prospectus as an "indenture," and collectively with any
other indentures, as the "indentures." Each indenture will be entered into among
Toll Corp., First Huntingdon Finance Corp. or Toll Finance Corp., as the
obligor, Toll Brothers, Inc., as the issuer of the related guarantees, and Bank
One Trust Company, NA, or another institution named in the applicable prospectus
supplement, as trustee.
9
The following is a description of certain general terms and provisions
of the debt securities we may offer by this prospectus. The name of the issuer
and the particular terms of any series of debt securities we offer, including
the extent to which the general terms and provisions may apply to that series of
debt securities, will be described in a prospectus supplement relating to those
debt securities. Except as otherwise indicated in this prospectus or in the
applicable prospectus supplement, the following description of indenture terms
is applicable to, and each reference to "the indenture" is a reference to, each
indenture that Toll Corp., First Huntingdon Finance Corp. or Toll Finance Corp.
may enter into with respect to any series of debt securities we may offer by
this prospectus, unless the context otherwise requires. All references to
"Section" in the following description refer to the applicable Section of the
indenture.
The terms of any series of the debt securities include those stated in
the applicable indenture. Holders of each series of the debt securities are
referred to the indenture for that series, including the applicable authorizing
resolution, for a statement of the terms. The respective forms of the indenture
for the debt securities of Toll Corp., First Huntingdon Finance Corp. and Toll
Finance Corp. are filed as exhibits to the registration statement. Each
indenture may be amended or modified for any series of debt securities by an
authorizing resolution which will be described in an applicable prospectus
supplement, and the applicable authorizing resolution relating to any series of
debt securities offered pursuant to this prospectus will be filed as an exhibit
to a report incorporated by reference in this prospectus. The following summary
of certain provisions of the debt securities and the indenture is not complete.
You should read all of the provisions of the indenture, including the
definitions contained in the indenture which are not otherwise defined in this
prospectus, and the applicable prospectus supplement. Wherever we refer to
particular provisions or defined terms of the indenture, these provisions or
defined terms are incorporated in this prospectus by reference.
General
The debt securities, when issued, will be obligations that constitute
senior secured debt, senior unsecured debt, senior subordinated debt or
subordinated debt of Toll Corp., First Huntingdon Finance Corp. or Toll Finance
Corp., as the case may be. Toll Brothers, Inc. will guarantee the payment of the
principal, premium, if any, and interest on the debt securities when due,
whether at maturity, by declaration of acceleration, call for redemption or
otherwise. This guarantee will be full and unconditional unless otherwise
provided in the applicable prospectus supplement. See "Guarantee of Debt
Securities." The total principal amount of debt securities which may be issued
under the indenture will not be limited. Debt securities may be issued under the
indenture from time to time in one or more series. Unless the applicable
prospectus supplement relating to the original offering of a particular series
of debt securities indicates otherwise, the issuer of that series of debt
securities will have the ability to reopen the previous issue of that series of
debt securities and issue additional debt securities of that series pursuant to
an authorizing resolution, an officers' certificate or an indenture supplement.
Because neither Toll Corp., First Huntingdon Finance Corp. nor Toll Finance
Corp. has any independent operations or generates any operating revenues, the
funds required to pay the principal, the premium, if any, and interest on the
debt securities will come from Toll Brothers, Inc. and its other subsidiaries.
Except as otherwise stated in the applicable prospectus supplement, there is no
legal or contractual restriction on the ability of Toll Brothers, Inc. or the
other subsidiaries of Toll Brothers, Inc. to provide these funds.
If the debt securities of any series issued by Toll Corp., First
Huntingdon Finance Corp. or Toll Finance Corp. will be subordinated to any other
indebtedness of that issuer, the indebtedness of that issuer to which that
series will be subordinated will be referred to in the applicable authorizing
resolution and prospectus supplement as senior indebtedness of Toll Corp., First
Huntingdon Finance Corp. or Toll Finance Corp., as the case may be. The
applicable authorizing resolution and prospectus supplement will define that
senior indebtedness and describe the terms of the subordination. Unless
otherwise stated in the applicable prospectus supplement, the payment of
principal, premium, if any, and interest on any series of debt securities issued
by Toll Corp., First Huntingdon Finance Corp. or Toll Finance Corp. which is
subordinated by its terms to other indebtedness of that issuer will be
subordinated in right of payment, in the manner and to the extent described in
the indenture under which that series is issued, to the prior payment in full of
all senior indebtedness of the issuer, as defined in the applicable authorizing
resolution and prospectus supplement, whether the senior indebtedness is
outstanding on the date of the indenture or is created, incurred, assumed or
guaranteed after the date of the indenture.
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The prospectus supplement relating to any series of debt securities
that are offered by this prospectus will name the issuer and describe the
specific terms of that series of debt securities. The applicable prospectus
supplement will describe, among other things, the following terms, to the extent
they are applicable to that series of debt securities:
o their title and, if other than denominations of $1,000 and any
integral multiple thereof, the denominations in which they
will be issuable;
o their price or prices (expressed as a percentage of the
respective aggregate principal amount of the debt securities)
at which they will be issued;
o their total principal amount and, if applicable, the terms on
which the principal amount of the series may be increased by a
subsequent offering of additional debt securities of the same
series;
o the interest rate (which may be fixed or variable and which
may be zero in the case of certain debt securities issued at
an issue price representing a discount from the principal
amount payable at maturity), the date or dates from which
interest, if any, will accrue and the circumstances, if any,
in which the issuer may defer interest payments;
o any special provisions for the payment of any additional
amounts with respect to the debt securities;
o any provisions relating to the seniority or subordination of
all or any portion of the indebtedness evidenced by the
securities to other indebtedness of the issuer;
o the date or dates on which principal and premium, if any, are
payable or the method of determining those dates;
o the dates and times at which interest, if any, will be
payable, the record date for any interest payment and the
person to whom interest will be payable if other than the
person in whose name the debt security is registered at the
close of business on the record date for the interest payment;
o the place or places where principal, premium, if any, and
interest, if any, will be payable;
o the terms applicable to any "original issue discount" (as
defined in the Internal Revenue Code of 1986, as amended, and
the related regulations), including the rate or rates at which
the original issue discount will accrue, and any special
federal income tax and other considerations;
o the right or obligation, if any, of the issuer to redeem or
purchase debt securities under any sinking fund or analogous
provisions or at the option of a holder of debt securities, or
otherwise, the conditions, if any, giving rise to the right or
obligation and the period or periods within which, and the
price or prices at which and the terms and conditions upon
which, debt securities will be redeemed or purchased, in whole
or in part, and any provisions for the marketing of the debt
securities;
o if the amount of payments of principal, premium, if any, and
interest, if any, is to be determined by reference to an
index, formula or other method, the manner in which these
amounts are to be determined and the calculation agent, if
any, with respect to the payments;
o if other than the principal amount of the debt securities, the
portion of the principal amount of the debt securities which
will be payable upon declaration or acceleration of the stated
maturity of the debt securities pursuant to an "Event of
Default," as defined in the applicable indenture;
o whether the debt securities will be issued in registered or
bearer form and the terms of these forms;
o whether the debt securities will be issued in certificated or
book-entry form and, if applicable, the identity of the
depositary;
o any provision for electronic issuance or issuances in
uncertificated form;
o any listing of the debt securities on a securities exchange;
o any events of default or covenants in addition to or in place
of those described in this prospectus;
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o the terms, if any, on which the debt securities will be
convertible into or exchangeable for other debt or equity
securities, including without limitation the conversion price,
the conversion period and any other provisions in addition to
or in place of those included in this prospectus;
o the collateral, if any, securing payments with respect to the
debt securities and any provisions relating to the collateral;
o whether and upon what terms the debt securities may be
defeased; and
o any other material terms of that series of debt securities.
(Section 2.03)
Guarantee of Debt Securities
Toll Brothers, Inc. will guarantee, fully and unconditionally unless
otherwise provided in the applicable prospectus supplement, the payment of the
principal, premium, if any, and interest on the debt securities as they become
due, whether at maturity, by declaration of acceleration, call for redemption or
otherwise. (Section 7.01).
Unless otherwise provided in the applicable prospectus supplement or
authorizing resolution, the payment of principal, premium, if any, and interest
on the debt securities under the guarantees will be junior in right of payment
to the prior payment in full of all senior indebtedness of Toll Brothers, Inc.,
in the manner and to the extent described in the indenture, whether the senior
indebtedness is outstanding on the date of the indenture or is created,
incurred, assumed or guaranteed after the date of the indenture. The senior
indebtedness of Toll Brothers, Inc. is referred to in the indenture as "Senior
Indebtedness of the Guarantor" and may be further defined in the applicable
prospectus supplement and authorizing resolution. (Section 7.02).
Unless otherwise provided in the applicable prospectus supplement, upon
(1) the maturity of any senior indebtedness of Toll Brothers, Inc. by lapse of
time, acceleration, unless waived, or otherwise or (2) any distribution of the
assets of Toll Brothers, Inc. upon any dissolution, winding up, liquidation or
reorganization of Toll Brothers, Inc., the holders of senior indebtedness of
Toll Brothers, Inc. will be entitled to receive payment in full before the
holders of any then outstanding debt securities of a series offered by this
prospectus will be entitled to receive any payment on those debt securities
pursuant to the guarantees. Except as otherwise provided in the applicable
prospectus supplement, if in any of the situations referred to in (1) or (2)
above, a payment is made to the trustee or to holders of the debt securities of
a series offered by this prospectus before all senior indebtedness of Toll
Brothers, Inc. has been paid in full or provision has been made for payment of
all of the senior indebtedness of Toll Brothers, Inc., the payment to the
trustee or holders must be paid over to the holders of the senior indebtedness
of Toll Brothers, Inc. (Sections 7.03, 7.04).
The assets of Toll Brothers, Inc. consist principally of the stock of
its subsidiaries. Therefore, the rights of Toll Brothers, Inc. and the rights of
its creditors, including the holders of debt securities fully and
unconditionally guaranteed by Toll Brothers, Inc., to participate in the assets
of any subsidiary other than the issuer of those debt securities upon
liquidation, recapitalization or otherwise will be subject to the prior claims
of that subsidiary's creditors except to the extent that claims of Toll
Brothers, Inc. itself as a creditor of the subsidiary may be recognized. This
includes the prior claims of the banks that have provided and are providing to
First Huntingdon Finance Corp. a revolving credit facility and a term loan under
agreements pursuant to which Toll Brothers, Inc. and its other subsidiaries,
including Toll Corp. and Toll Finance Corp., have guaranteed or will guarantee
the obligations owing to the banks under the revolving credit facility and the
term loan.
Conversion of Debt Securities
Unless otherwise indicated in the applicable prospectus supplement, the
debt securities will not be convertible into common stock of Toll Brothers, Inc.
or into any other securities. The particular terms and conditions of the
conversion rights of any series of convertible debt securities other than those
described below will be described in the applicable prospectus supplement.
Unless otherwise indicated in the applicable prospectus supplement, and
subject, if applicable, to prior redemption at the option of the issuer of the
debt securities, the holders of any series of convertible debt securities will
be entitled to convert the principal amount or a portion of the principal amount
which is an integral multiple of $1,000 at any time before the date specified in
the applicable prospectus supplement for the series of debt
12
securities into shares of common stock of Toll Brothers, Inc. at the conversion
price stated in the applicable prospectus supplement, subject to adjustment as
described below. (Section 10.02).
In the case of any debt security or portion of debt security called for
redemption, conversion rights will expire at the close of business on the second
business day preceding the redemption date. (Section 10.02).
Toll Brothers, Inc. will not be required to issue fractional shares of
common stock upon conversion of the debt securities of a convertible series.
Instead, Toll Brothers, Inc. will pay a cash adjustment for any fractional
interest in a share of its common stock. (Section 10.04).
Convertible debt securities surrendered for conversion during the
period from the close of business on a "Record Date," as defined in the
applicable indenture, or the next preceding "Business Day," as defined in the
applicable indenture, if the Record Date is not a Business Day, preceding any
"Interest Payment Date," as defined in the applicable indenture, to the opening
of business on that Interest Payment Date, other than convertible debt
securities or portions of convertible debt securities called for redemption
during the period, will be accompanied by payment in next-day funds or other
funds acceptable to Toll Brothers, Inc. of an amount equal to the interest
payable on the Interest Payment Date on the principal amount of the convertible
debt securities then being converted. Except as described in the preceding
sentence, no payment or adjustment will be made on convertible debt securities
on account of interest accrued on the debt securities surrendered for conversion
or for dividends on the common stock delivered on conversion. If an issuer of
convertible debt securities defaults on the payment of interest for which
payment is made upon the surrender of those convertible debt securities for
conversion, the amount so paid will be returned to the party who made the
payment. (Section 10.03).
The conversion price of the debt securities of a convertible series
will be subject to adjustment in certain events, including:
o the issuance of common stock of Toll Brothers, Inc. as a
dividend or distribution on common stock of Toll Brothers,
Inc.;
o the subdivision, combination or reclassification of the
outstanding common stock of Toll Brothers, Inc.;
o the issuance of rights or warrants, expiring within 45 days
after the record date for issuance, to the holders of common
stock of Toll Brothers, Inc. generally entitling them to
acquire shares of common stock of Toll Brothers, Inc. at less
than the common stock's then "Current Market Price" as defined
in the indenture;
o the distribution to holders of common stock of Toll Brothers,
Inc. generally of evidences of indebtedness or assets of Toll
Brothers, Inc., excluding cash dividends paid from retained
earnings and dividends or distributions payable in stock for
which adjustment is otherwise made; or
o the distribution to the holders of common stock of Toll
Brothers, Inc. generally of rights or warrants to subscribe
for securities of Toll Brothers, Inc. other than those for
which adjustment is otherwise made. (Section 10.05)
There will be no upward adjustment in the conversion price except in
the event of a reverse stock split. Toll Brothers, Inc. is not required to make
any adjustment in the conversion price of less than 1%, but the adjustment will
be carried forward and taken into account in the computation of any subsequent
adjustment. (Section 10.05).
A conversion price adjustment or the failure to make a conversion price
adjustment may, under various circumstances, be deemed to be a distribution that
could be taxable as a dividend under the Internal Revenue Code to holders of
debt securities or to holders of common stock.
There will be no adjustments to the conversion price of the debt
securities of any convertible series as discussed above in the following
situations:
o any consolidation or merger to which Toll Brothers, Inc. is a
party other than a merger or consolidation in which Toll
Brothers, Inc. is the continuing corporation;
o any sale or conveyance to another corporation of the property
of Toll Brothers, Inc. as an entirety or substantially as an
entirety; or
13
o any statutory exchange of securities with another corporation,
including any exchange effected in connection with a merger of
a third corporation into Toll Brothers, Inc.
However, the holder of each convertible debt security outstanding at that time
will have the right to convert the debt security into the kind and amount of
securities, cash or other property which the holder would have owned or have
been entitled to receive immediately after the transaction if the debt security
was converted immediately before the effective date of the transaction. (Section
10.10).
Form, Exchange, Registration, Conversion, Transfer and Payment
Unless otherwise indicated in the applicable prospectus supplement:
o each series of debt securities will be issued in registered
form only, without coupons;
o payment of principal, premium, if any, and interest, if any,
on each series of the debt securities will be payable at the
office or agency of the issuer of that series maintained for
this purpose (Section 2.05); and
o the exchange, conversion and transfer of each series of debt
securities may be registered at the office or agency of the
issuer of that series maintained for this purpose and at any
other office or agency maintained for this purpose. (Section
2.05).
Subject to various exceptions described in the indenture, the issuer of
each series of debt securities will be entitled to charge a reasonable fee for
the registration of transfer or exchange of the debt securities of that series,
including an amount sufficient to cover any tax or other governmental charge
imposed or expenses incurred in connection with the transfer or exchange.
(Section 2.08).
All payments made by the issuer of a series of debt securities to the
trustee and paying agent for the payment of principal, premium, if any, and
interest on the debt securities of that series which remain unclaimed for two
years after the principal, premium, if any, or interest has become due and
payable may be repaid to the issuer. Afterwards, the holder of the debt security
may look only to the issuer or, if applicable, Toll Brothers, Inc., for payment.
(Section 11.03).
Registered Global Securities
The registered debt securities of a series may be issued in whole or in
part in the form of one or more registered global debt securities. A registered
global security is a security, typically held by a depositary, that represents
the beneficial interests of a number of purchasers of the security. Any
registered global debt securities will be deposited with and registered in the
name of a depositary or its nominee identified in the applicable prospectus
supplement. In this case, one or more registered global securities will be
issued, each in a denomination equal to the portion of the total principal
amount of outstanding registered debt securities of the series to be represented
by the registered global security. (Section 2.14).
Unless and until a registered global security is exchanged in whole or
in part for debt securities in definitive registered form, it may not be
transferred except as a whole:
o by the depositary for the registered global security to a
nominee for the depository;
o by a nominee of the depositary to the depositary or to another
nominee of the depositary; or
o by the depositary or its nominee to a successor depositary or
a nominee of a successor depositary. (Section 2.14).
The prospectus supplement relating to a particular series of debt
securities will describe the specific terms of the depositary arrangement
involving any portion of a series of debt securities to be represented by a
registered global security. We anticipate that the following provisions will
apply to all depositary arrangements for debt securities:
o ownership of beneficial interests in a registered global
security will be limited to persons that have accounts with
the depositary for the registered global security (each a
"participant" and, collectively, the "participants") or
persons holding interests through the participants;
14
o after the issuer of a series of debt securities issues the
registered global security for the series, the depositary will
credit, on its book-entry registration and transfer system,
the participants' accounts with the respective principal
amounts of the debt securities of that series represented by
the registered global security beneficially owned by the
participants;
o the underwriters, agents or dealers participating in the
distribution of the debt securities will designate the
accounts to be credited;
o only a participant or a person that may hold an interest
through a participant may be the beneficial owner of a
registered global security; and
o ownership of beneficial interests in the registered global
security will be shown on, and the transfer of that ownership
interest will be effected only through, records maintained by
the depositary for the registered global security for
interests of the participants, and on the records of the
participants for interests of persons holding through the
participants.
The laws of some states may require that specified purchasers of
securities take physical delivery of the securities in definitive form. These
laws may limit the ability of those persons to own, transfer or pledge
beneficial interests in registered global securities.
So long as the depositary for a registered global security, or its
nominee, is the registered owner of the registered global security, the
depositary or its nominee, as the case may be, will be considered the sole owner
or holder of the debt securities represented by the registered global security
for all purposes under the indenture. Except as stated below, owners of
beneficial interests in a registered global security:
o will not be entitled to have the debt securities represented
by a registered global security registered in their names;
o will not receive or be entitled to receive physical delivery
of the debt securities in definitive form; and
o will not be considered the owners or holders of the debt
securities under the indenture.
Accordingly, each person owning a beneficial interest in a registered
global security must rely on the procedures of the depositary for the registered
global security and, if the person is not a participant, on the procedures of
the participant through which the person owns its interests, to exercise any
rights of a holder under the indenture applicable to the registered global
security.
We understand that under existing industry practices, if we request any
action of holders, or if an owner of a beneficial interest in a registered
global security desires to give or take any action which a holder is entitled to
give or take under the indenture, the depositary for the registered global
security would authorize the participants holding the relevant beneficial
interests to give or take the action, and the participants would authorize
beneficial owners owning through the participants to give or take the action or
would otherwise act upon the instructions of beneficial owners holding through
them.
Principal, premium, if any, and interest payments on debt securities
represented by a registered global security registered in the name of a
depositary or its nominee will be made to the depositary or its nominee, as the
case may be, as the registered owner of the registered global security. None of
the issuer of a series of debt securities, Toll Brothers, Inc., the trustee
under the indenture nor any agent of any of them will be responsible or liable
for any aspect of the records relating to, or payments made on account of,
beneficial ownership interests in the registered global security for the series
or for maintaining, supervising or reviewing any records relating to the
beneficial ownership interests.
We expect that the depositary for any debt securities represented by a
registered global security, upon receipt of any payment of principal, premium,
if any, or interest in respect of the registered global security, will
immediately credit participants' accounts with payments in amounts proportionate
to their respective beneficial interests in the principal amount of the
registered global security as shown on the depositary's records. We also expect
that payments by participants to owners of beneficial interests in a registered
global security held through the participants will be governed by standing
customer instructions and customary practices, as is now the case with the
securities held for the accounts of customers in bearer form or registered in
"street name," and will be the responsibility of the participants.
15
If the depositary for any debt securities represented by a registered
global security is at any time unwilling or unable to continue as depositary or
ceases to be a clearing agency registered under the Securities Exchange Act of
1934, Toll Brothers, Inc. will appoint an eligible successor depositary. If Toll
Brothers, Inc. fails to appoint an eligible successor depositary within 90 days,
the debt securities will be issued in definitive form in exchange for the
registered global security. In addition, Toll Brothers, Inc. may at any time and
in its sole discretion determine not to have any debt securities of a series
represented by one or more registered global securities. In that event, debt
securities of that series will be issued in definitive form in exchange for each
registered global security representing the debt securities. Any debt securities
issued in definitive form in exchange for a registered global security will be
registered in such name or names as the depositary instructs the trustee. We
expect that the instructions will be based upon directions received by the
depositary from the participants with respect to ownership of beneficial
interests in the registered global security.
Events of Default, Notice and Waiver
Unless otherwise indicated in the applicable prospectus supplement,
each of the following events will be an "Event of Default" with respect to each
series of debt securities issued under the indenture:
o Toll Brothers, Inc. or the issuer of that series of debt
securities fails to pay interest due on any debt securities of
that series for 30 days;
o Toll Brothers, Inc. or the issuer of that series of debt
securities fails to pay the principal of any debt securities
of that series when due;
o Toll Brothers, Inc. or the issuer of that series of debt
securities fails to perform any other agreements contained in
the debt securities of that series or in the guarantee
relating to that series of debt securities or contained in the
indenture for that series of debt securities and applicable to
that series for a period of 60 days after the issuer's receipt
of notice of the default from the trustee under the indenture
or from the holders of at least 25% in principal of the debt
securities of that series;
o default in the payment of indebtedness of the issuer of that
series of debt securities, Toll Brothers, Inc. or any
"Subsidiary" (as defined in the indenture) of Toll Brothers,
Inc., including Toll Corp., First Huntingdon Finance Corp. or
Toll Finance Corp., under the terms of the instrument
evidencing or securing that indebtedness which permits the
holder of that indebtedness to:
o accelerate the payment of an aggregate of more than
$10,000,000 in principal amount of the indebtedness,
after the lapse of applicable grace periods; or
o in the case of defaults other than payment defaults,
accelerate the indebtedness and the acceleration is
not rescinded or annulled within 10 days after the
acceleration,
provided that, subject to certain limitations described in the
indenture, the term "indebtedness" does not include for this
purpose an acceleration of or default on certain "Non-Recourse
Indebtedness," as that term is defined in the indenture and
described below;
o a final judgment for the payment of money in an amount in
excess of $10,000,000 is entered against the issuer of that
series of debt securities, Toll Brothers, Inc. or any
Subsidiary (as defined in the indenture) of Toll Brothers,
Inc., including Toll Corp., First Huntingdon Finance Corp. or
Toll Finance Corp., which remains undischarged for a period of
60 days after the date on which the right to appeal has
expired, during which period execution is not effectively
stayed, provided that the term "final judgment" will not
include a "Non-Recourse Judgment," as that term is defined in
the indenture and described below, unless the book value of
all property, net of any previous write downs or reserves in
respect of the property, subject to the Non-Recourse Judgment
exceeds the amount of the Non-Recourse Judgment by more than
$10,000,000;
o an "Event of Default," as that term is defined in the
indenture relating to Toll Corp.'s 8 3/4% Senior Subordinated
Notes due 2006, 7 3/4% Senior Subordinated Notes due 2007,
8 1/8% Senior Subordinated Notes due 2009, 8% Senior
Subordinated Notes due 2009, or 8 1/4% Senior Subordinated
Notes due 2011 (each of these series of notes being referred
to below as an "Outstanding Series"), occurs, provided that on
the date of the occurrence, the outstanding principal amount
of at least one Outstanding Series to which the occurrence
relates exceeds $5,000,000;
16
o any one of various events of bankruptcy, insolvency or
reorganization specified in the indenture occurs with respect
to Toll Brothers, Inc. or the issuer of that series of debt
securities; or
o the guarantee of Toll Brothers, Inc. relating to that series
of debt securities ceases to be in full force and effect for
any reason other than in accordance with its terms. (Section
8.01).
"Non-Recourse Indebtedness," as defined in the indenture, means
indebtedness or other obligations secured by a lien on property to the extent
that the liability for the indebtedness or other obligations is limited to the
security of the property without liability on the part of Toll Brothers, Inc. or
any subsidiary (other than the subsidiary which holds title to the property) for
any deficiency. (Section 1.01).
"Non-Recourse Judgment," as defined in the indenture, means a judgment
in respect of indebtedness or other obligations secured by a lien on property to
the extent that the liability for (1) the indebtedness or other obligations and
(2) the judgment is limited to the property without liability on the part of
Toll Brothers, Inc. or any subsidiary (other than the subsidiary which holds
title to the property) for any deficiency. (Section 1.01).
The trustee is required to give notice to the holders of any series of
debt securities within 90 days of a default with respect to that series of debt
securities under the indenture. However, the trustee may withhold notice to the
holders of any series of debt securities, except in the case of a default in the
payment of principal, premium, if any, or interest, if any, with respect to that
series, if the trustee considers the withholding to be in the interest of the
holders. (Section 9.05).
If an Event of Default occurs and is continuing for a series of debt
securities, other than an Event of Default resulting from certain events of
bankruptcy, insolvency or reorganization with respect to Toll Brothers, Inc. or
the issuer of that series of debt securities, either the trustee or the holders
of at least 25% in principal amount of all of the outstanding debt securities of
that series may, by giving an acceleration notice to the issuer of that series
of debt securities, declare the unpaid principal of and accrued and unpaid
interest on all of the debt securities of that series to be due and payable if,
with respect to debt securities of that series (1) (a) no designated senior debt
of Toll Brothers, Inc. or the issuer of that series of debt securities is
outstanding, or (b) if the debt securities of that series are not subordinated
to other indebtedness of the issuer of that series of debt securities,
immediately; or (2) if designated senior debt of Toll Brothers, Inc. or the
issuer of that series of debt securities is outstanding and the debt securities
of that series are junior to other indebtedness of the issuer of that series of
debt securities, upon the earlier of (A) ten days after the acceleration notice
is received by the issuer of that series of debt securities or (B) the
acceleration of any senior indebtedness of Toll Brothers, Inc. or the issuer of
that series of debt securities. The designated senior debt of Toll Brothers,
Inc. is referred to in the indenture as "Designated Senior Debt of the
Guarantor" and the designated senior debt of Toll Corp., First Huntingdon
Finance Corp. or Toll Finance Corp., as the case may be, is referred to in the
indenture for that issuer's debt securities as "Designated Senior Debt of the
Company," and each, as defined in the indenture, may be further defined in the
applicable prospectus supplement. (Section 8.02).
If an Event of Default occurs with respect to a series of debt
securities as a result of certain events of bankruptcy, insolvency or
reorganization with respect to Toll Brothers, Inc. or the issuer of that series
of debt securities, then the unpaid principal amount of all of the debt
securities of that series outstanding and any accrued and unpaid interest will
automatically become due and payable immediately without any declaration or
other act by the trustee or any holder of debt securities of that series.
(Section 8.02).
At any time after a declaration of acceleration with respect to debt
securities of any series has been made, but before a judgment or decree based on
acceleration has been obtained, the holders of a majority in principal amount of
the outstanding debt securities of that series may rescind the acceleration,
provided that, among other things, all Events of Default with respect to the
particular series, other than payment defaults caused by the acceleration, have
been cured or waived as provided in the indenture. (Section 8.02).
The holders of a majority in outstanding principal amount of the debt
securities of a particular series may generally waive an existing default with
respect to that series and its consequences in accordance with terms and
conditions provided in the indenture. However, these holders may not waive a
default in the payment of the principal, any premium or any interest on the debt
securities. (Section 8.04).
17
Toll Brothers, Inc. and any issuer of debt securities offered by this
prospectus will be required to file annually with the trustee under the
indenture a certificate, signed by an officer of Toll Brothers, Inc. and the
issuer, stating whether or not the officer knows of any default under the terms
of the indenture and providing a description of any default of which the officer
has knowledge. (Section 4.03).
Redemption
The prospectus supplement relating to a series of redeemable debt
securities will describe the rights or obligations of the issuer to redeem those
debt securities and the procedure for redemption. (Section 3).
Additional Provisions
Subject to the duty of the trustee to act with the required standard of
care during a default, the indenture provides that the trustee will be under no
obligation to perform any duty or to exercise any of its rights or powers under
the indenture, unless the trustee receives indemnity satisfactory to it against
any loss, liability or expense. (Section 9.01). Subject to these provisions for
the indemnification of the trustee and various other conditions, the holders of
a majority in total principal amount of the outstanding debt securities of any
series will have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the trustee, or exercising any trust
or power conferred on the trustee, with respect to the debt securities of that
series. (Section 8.05).
A holder of debt securities of a series will not have the right to
pursue any remedy with respect to the indenture or the debt securities of that
series, unless:
o the holder gives to the trustee written notice of a continuing
Event of Default;
o the holders of not less than 25% in total principal amount of
the outstanding debt securities of that series make a written
request to the trustee to pursue the remedy;
o the holder offers the trustee indemnity satisfactory to it
against any loss, liability or expense;
o the trustee fails to comply with the holder's request within
60 days after receipt of the written request and offer of
indemnity; and
o the trustee, during the same 60-day period, has not received
from the holders of a majority in principal amount of the
outstanding debt securities of that series a direction
inconsistent with the aforementioned written request of
holders. (Section 8.06).
However, the holder of any debt security will have an absolute right to receive
payment of the principal of and interest on that debt security on or after the
respective due dates expressed in that debt security and to bring suit for the
enforcement of any payment. (Section 8.07).
Covenants
The prospectus supplement relating to the debt securities of any series
will describe any special covenants applicable to the issuer of the series or
Toll Brothers, Inc. with respect to that series. (Section 4).
Merger or Consolidation
Neither Toll Brothers, Inc. nor the issuer of a series of debt
securities offered by this prospectus may consolidate with or merge into, or
transfer all or substantially all of its assets to, any other person without the
written consent of the holders of a majority in outstanding principal amount of
the debt securities of that series, unless:
o the other person is a corporation organized and existing under
the laws of the United States or a state thereof or the
District of Columbia and expressly assumes by supplemental
indenture all the obligations of Toll Brothers, Inc. or the
issuer, as the case may be, under the indenture and either the
guarantees or the debt securities, as the case may be; and
18
o immediately after giving effect to the transaction no
"Default" or "Event of Default," as these terms are defined in
the indenture, has occurred and is continuing.
Afterwards, all of the obligations of the predecessor corporation will
terminate. (Section 5.01).
Modification of an Indenture
The respective obligations of Toll Brothers, Inc. and the issuer of
debt securities of any series offered by this prospectus and the rights of the
holders of those debt securities under the indenture generally may be modified
with the written consent of the holders of a majority in outstanding principal
amount of the debt securities of all series under the indenture affected by the
modification. However, without the consent of each affected holder of debt
securities, no amendment, supplement or waiver may:
o reduce the amount of debt securities whose holders must
consent to an amendment, supplement or waiver;
o reduce the rate or extend the time for payment of interest on
the debt securities;
o reduce the principal amount of, or premium on, the debt
securities;
o extend the maturity of any debt securities;
o change the redemption provisions;
o waive a default in the payment of the principal, premium, if
any, or interest on any series of debt securities;
o modify the subordination or guarantee provisions in a manner
adverse to holders of any series of debt securities;
o make the medium of payment other than that stated in the debt
securities;
o make a change that adversely affects the right to convert or
the conversion price for any series of convertible debt
securities;
o make any change in the right of any holder of debt securities
to receive payment of principal of, premium, if any, and
interest on those debt securities, or to bring suit for the
enforcement of any of these payments; and
o change the provisions regarding modifications to the indenture
or waiver of Defaults or Events of Default that will be
effective against any holders of any series of debt
securities. (Section 12.02).
Governing Law
The indenture, the debt securities and the guarantees will be governed
by the laws of the State of New York. (Section 13.09).
Satisfaction and Discharge of Indenture
Unless otherwise provided in the applicable authorizing resolution and
prospectus supplement, the indenture will be discharged:
o upon payment of all the series of debt securities issued under
the indenture; or
o upon deposit with the trustee, within one year of the date of
maturity or redemption of all of the series of debt securities
issued under the indenture, of funds sufficient for (a) the
payment of principal of and interest on the securities to
maturity or (b) redemption of the securities. (Section 11.01).
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Reports to Holders of Debt Securities
Toll Brothers, Inc. and each issuer of the debt securities offered by
this prospectus will file with the trustee copies of their annual reports and
other information, documents and reports that they file with the SEC. So long as
the obligation of Toll Brothers, Inc. to file these reports or information with
the SEC is suspended or terminated, Toll Brothers, Inc. will provide the trustee
with audited annual financial statements prepared in accordance with generally
accepted accounting principles and unaudited condensed quarterly financial
statements. These financial statements will be accompanied by management's
discussion and analysis of the results of operations and financial condition of
Toll Brothers, Inc. for the period reported upon in substantially the form
required under the rules and regulations of the SEC then in effect. (Section
4.02).
20
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of Toll Brothers, Inc. consists of
100,000,000 shares of common stock, $.01 par value per share, and 1,000,000
shares of preferred stock, $.01 par value per share; however, subject to the
limitations and procedures described below, the stockholders of Toll Brothers,
Inc. have authorized increases in the respective numbers of shares of common
stock and preferred stock. In March 2001, the stockholders of Toll Brothers,
Inc. authorized the filing by the Board of Directors, in its discretion, of one
or more amendments to the Certificate of Incorporation from time to time on or
before March 31, 2006 (1) to increase the authorized common stock by up to
155,000,000 additional shares in any combination of one or more 5,000,000-share
increments and/or (2) to increase the authorized preferred stock by a single
increment of 14,000,000 additional shares. On March 7, 2002, the Board of
Directors filed an amendment to the Certificate of Incorporation, in accordance
with this stockholder authorization, which amendment increased the authorized
shares of common stock from 45,000,000 shares to 100,000,000 shares. If
additional amendments increasing the authorized capital stock of Toll Brothers,
Inc. to the maximum limits authorized by the stockholders are filed by March 31,
2006, the authorized common stock of Toll Brothers, Inc. will be increased to
200,000,000 shares and the authorized preferred stock of Toll Brothers, Inc.
will be increased to 15,000,000 shares. The procedure was approved by
stockholders to permit Toll Brothers, Inc. to reduce the amount of annual
Delaware corporate franchise tax that it is required to pay, while giving the
Board of Directors the flexibility to increase quickly the authorized shares of
common or preferred stock without the necessity of further action by the
stockholders.
Common Stock
Subject to the rights and preferences of any holders of the preferred
stock of Toll Brothers, Inc., none of which is currently outstanding, the
holders of the common stock of Toll Brothers, Inc. are entitled to one vote per
share on all matters which require a vote of the common stockholders. In
addition, the holders of the common stock of Toll Brothers, Inc. are entitled to
receive dividends as legally may be declared by the board of directors and to
receive pro rata the net assets of Toll Brothers, Inc. upon liquidation. There
are no cumulative voting, preemptive, conversion or redemption rights applicable
to the common stock of Toll Brothers, Inc. Persons casting a majority of the
votes in the election of directors will be entitled to elect all of the
directors.
On June 12, 1997, the board of directors of Toll Brothers, Inc. adopted
a Stockholder Rights Plan. This Stockholder Rights Plan originally provided for
one right to attach to each share of the common stock of Toll Brothers, Inc. In
March 2002, Toll Brothers, Inc. declared a 2-for-1 split of its common stock to
be effected in the form of a stock dividend. In connection with the common stock
split and in accordance with the terms of the Stockholder Rights Plan, the right
associated with each share of common stock was adjusted so that one-half of a
right will now attach to each share of common stock. Upon the occurrence of
certain events, each right entitles the registered holder to purchase from Toll
Brothers, Inc. a unit consisting of one one-thousandth of a share of Series A
Junior Participating Preferred Stock of Toll Brothers, Inc. at a purchase price
of $100 per unit. Initially the rights attach to all common stock certificates
and no separate rights certificates will be distributed. The rights will
separate from the common stock and a distribution date will occur upon the
earlier of:
o 10 days following a public announcement that a person or group
of affiliated persons has acquired beneficial ownership of 15%
or more of the outstanding shares of common stock of Toll
Brothers, Inc.; or
o 10 business days following the commencement of a tender offer
that would result in a person or group beneficially owning 15%
or more of the outstanding shares of common stock of Toll
Brothers, Inc.
The rights are not exercisable until the distribution date and will
expire at the close of business on July 11, 2007. In the event any non-exempt
person or group acquires 15% or more of the then outstanding shares of common
stock, unless the acquisition is made pursuant to a tender offer for all
outstanding shares at a price determined by a majority of the directors of Toll
Brothers, Inc. who are not officers of Toll Brothers, Inc. to be fair and
otherwise in the best interest of Toll Brothers, Inc. and its stockholders, each
holder of a right will have the right to receive, upon exercise, common stock
having a value equal to two times the exercise price of the right; except that
the rights held by a non-exempt person or group become null and void upon that
person or group acquiring 15% or more of the then outstanding shares of common
stock. At any time until 10 days following the stock acquisition date, Toll
Brothers, Inc. may redeem the rights at a price of $.001 per right. The
21
Rights Agreement establishing the Stockholder Rights Plan was filed with the SEC
on June 19, 1997 as an exhibit to a registration statement on Form 8-A. An
amendment to the Rights Agreement was filed with the SEC on August 21, 1998 as
an exhibit to an amended registration statement on Form 8-A/A. This summary of
the rights is not complete. For additional information, holders of the common
stock of Toll Brothers, Inc. should read the Rights Agreement and the amendment
to that agreement, which are incorporated by reference in this prospectus.
The common stock of Toll Brothers, Inc. is traded on the New York Stock
Exchange and the Pacific Exchange under the symbol "TOL."
Preferred Stock
General. Toll Brothers, Inc. may issue, from time to time, shares of
one or more series of preferred stock.
We have summarized below the general terms and provisions that will
apply to any preferred stock that may be offered, except as otherwise described
by the applicable prospectus supplement. When Toll Brothers, Inc. offers to sell
a particular series of preferred stock, a prospectus supplement will describe
the specific terms of that series of preferred stock. If any of the general
terms and provisions described in this prospectus apply to the particular series
of preferred stock, the applicable prospectus supplement will so indicate and
will describe any alternative provisions that are applicable. The preferred
stock will be issued under a certificate of designations relating to each series
of preferred stock, and is also subject to the Toll Brothers, Inc. Certificate
of Incorporation, as amended.
The following summary of various provisions of the preferred stock is
not complete. You should read Toll Brothers, Inc.'s Certificate of
Incorporation, as amended, and each certificate of designations relating to a
specific series of preferred stock for additional information. Each certificate
of designations relating to a specific series of preferred stock will be filed
as an exhibit to, or will be incorporated by reference in, the registration
statement at or prior to the time of issuance of the particular series of
preferred stock.
The board of directors of Toll Brothers, Inc. is authorized to issue
shares of preferred stock, in one or more series, and to fix for each series
voting powers and the preferences and relative, participating, optional or other
special rights and the qualifications, limitations or restrictions, that are
permitted by the Delaware General Corporation Law.
The board of directors of Toll Brothers, Inc. is authorized to
determine the following terms for each series of preferred stock, which will be
described in the applicable prospectus supplement:
o the number of shares and their designation and title;
o the dividend rate or the method of calculating the dividend
rate, if applicable;
o the priority as to payment of dividends;
o the dividend periods or the method of calculating the dividend
periods, if applicable;
o the voting rights, if any;
o the liquidation preference and the priority as to payment of
the liquidation preference upon any liquidation or winding-up
of Toll Brothers, Inc.;
o whether and on what terms the shares will be subject to
redemption or repurchase at the option of Toll Brothers, Inc.;
o whether and on what terms the shares will be convertible into
or exchangeable for other debt or equity securities;
o whether the shares will be listed on a securities exchange;
and
o the other rights and privileges and any qualifications,
limitations or restrictions relating to the shares.
Dividends. Holders of preferred stock will be entitled to receive cash
dividends if declared by the board of directors of Toll Brothers, Inc. out of
funds which Toll Brothers, Inc. may legally use for payment. The applicable
22
prospectus supplement will identify the dividend rates and the dates on which
Toll Brothers, Inc. will pay dividends.
Unless otherwise described in the applicable prospectus supplement,
each series of preferred stock will rank junior as to dividends to any series of
preferred stock that may be issued in the future that is expressly senior as to
dividends to the earlier series of the preferred stock. If at any time Toll
Brothers, Inc. has failed to pay accrued dividends on any senior series of
preferred stock at the time dividends are payable on a junior series of
preferred stock, Toll Brothers, Inc. may not pay any dividend on the junior
series of preferred stock or redeem or otherwise repurchase shares of the junior
series of preferred stock until the accumulated but unpaid dividends on the
senior series have been paid or set aside for payment in full by Toll Brothers,
Inc.
Unless otherwise described in the applicable prospectus supplement:
o no dividends, other than in common stock or other capital
stock ranking junior to the preferred stock of any series as
to dividends and upon liquidation, may be declared or paid or
set aside for payment; and
o no distribution may be declared or made upon the common stock,
or any other capital stock of Toll Brothers, Inc. ranking
junior to or equally with the preferred stock of the
particular series as to dividends.
In addition, unless otherwise described in the applicable prospectus
supplement, no common stock or any other capital stock of Toll Brothers, Inc.
ranking junior to or equally with the preferred stock of the particular series
as to dividends may be redeemed, purchased or otherwise acquired for any
consideration and no monies may be paid to or made available for a sinking fund
for the redemption of any shares of any such stock by Toll Brothers, Inc. except
by conversion into or exchange for other capital stock of Toll Brothers, Inc.
ranking junior to the preferred stock of the particular series as to dividends
unless:
o if the series of preferred stock has a cumulative dividend,
full cumulative dividends on the preferred stock of the series
have been or contemporaneously are declared and paid or
declared and an amount sufficient for the payment of the
dividends has been set apart for all past dividend periods and
the then current dividend period; or
o if the particular series of preferred stock does not have a
cumulative dividend, full dividends on the preferred stock of
the series have been or contemporaneously are declared and
paid or declared and an amount sufficient for the payment of
the dividends has been set apart for payment for the then
current dividend period;
provided, however, that any monies deposited up until that time in any sinking
fund with respect to any preferred stock of Toll Brothers, Inc. in compliance
with the provisions of the sinking fund may subsequently be applied to the
purchase or redemption of the preferred stock in accordance with the terms of
the sinking fund, regardless of whether at the time of the application full
cumulative dividends upon shares of the preferred stock outstanding on the last
dividend payment date have been paid or declared and set apart for payment; and
provided, further, that any of the junior or equally-ranked classes of preferred
stock or common stock of Toll Brothers, Inc. may be converted into or exchanged
for stock of Toll Brothers, Inc. ranking junior to the series of preferred stock
then senior to the junior or equally-ranked classes of preferred stock as to
dividends.
The amount of dividends payable for the initial dividend period or any
period shorter than a full dividend period will be computed on the basis of a
360-day year of twelve 30-day months. Accrued but unpaid dividends will not bear
interest.
Convertibility. No series of preferred stock will be convertible or
exchangeable for other securities or property unless otherwise stated in the
applicable prospectus supplement.
Redemption and Sinking Fund. Toll Brothers, Inc. will not have the
right or obligation to redeem or pay into a sinking fund for the benefit of any
series of preferred stock unless otherwise stated in the applicable prospectus
supplement.
Liquidation Rights. Unless otherwise stated in the applicable
prospectus supplement, in the event of any liquidation, dissolution or
winding-up of Toll Brothers, Inc., holders of each series of preferred stock
will be entitled to receive the liquidation preference per share specified in
the applicable prospectus supplement for that particular series of preferred
stock plus any accrued and unpaid dividends. Toll Brothers, Inc. will pay these
23
amounts to the holders of each series of the preferred stock and all amounts
owing on any preferred stock ranking equally with that series of preferred stock
as to distributions. These payments will be made out of the assets of Toll
Brothers, Inc. available for distribution to stockholders before any
distribution is made to holders of common stock or any other shares of preferred
stock of Toll Brothers, Inc. ranking junior to the series of preferred stock as
to rights upon liquidation, dissolution or winding-up.
In the event that there are insufficient funds to pay in full the
amounts payable to all equally-ranked classes of preferred stock, Toll Brothers,
Inc. will allocate the remaining assets equally among all series of
equally-ranked preferred stock in proportion to the full respective preferential
amounts to which they are entitled. Unless otherwise specified in a prospectus
supplement for a series of preferred stock, after Toll Brothers, Inc. pays the
full amount of the liquidation distribution to which they are entitled, the
holders of shares of a series of preferred stock will not be entitled to
participate in any further distribution of the assets of Toll Brothers, Inc. The
consideration or merger of Toll Brothers, Inc. with another corporation or sale
of securities will not be considered a liquidation, dissolution or winding-up of
Toll Brothers, Inc. for these purposes.
Voting Rights. Holders of preferred stock will not have any voting
rights except as described in the applicable prospectus supplement or as
otherwise from time to time required by law.
Miscellaneous. When the preferred stock is issued, it will be fully
paid and nonassessable. Holders of preferred stock will have no preemptive
rights. If Toll Brothers, Inc. redeems or otherwise reacquires any shares of
preferred stock, it will restore the shares to the status of authorized and
unissued shares of preferred stock. These shares will not be a part of any
particular series of preferred stock and Toll Brothers, Inc. may reissue the
shares. There are no restrictions on repurchase or redemption of the preferred
stock on account of any arrearage on sinking fund installments, except as may be
described in an applicable prospectus supplement. Payment of dividends on any
series of preferred stock may be restricted by loan agreements, indentures or
other agreements entered into by Toll Brothers, Inc. The accompanying prospectus
supplement will describe any material contractual restrictions on dividend
payments. The prospectus supplement will also describe any material United
States federal income tax considerations applicable to the preferred stock.
No Other Rights. The shares of a series of preferred stock will not
have any preferences, voting powers or relative, participating, optional or
other special rights except for those described above or in the applicable
prospectus supplement, the Certificate of Incorporation, as amended, or the
applicable certificate of designations, or as otherwise required by law.
Transfer Agent and Registrar. The prospectus supplement for each series
of preferred stock will identify the transfer agent and registrar.
24
DESCRIPTION OF WARRANTS
General
Toll Brothers, Inc. may issue, together with other securities offered
by this prospectus or separately, warrants for the purchase of the following:
o debt securities of Toll Corp., First Huntingdon Finance Corp.
or Toll Finance Corp. with the guarantees of Toll Brothers,
Inc.;
o common stock of Toll Brothers, Inc.; or
o preferred stock of Toll Brothers, Inc.
Each series of warrants will be issued under a separate warrant
agreement to be entered into between Toll Brothers, Inc. and a bank or trust
company, as warrant agent. The terms of each warrant agreement will be discussed
in the applicable prospectus supplement relating to the particular series of
warrants. Copies of the form of agreement for each warrant, including the forms
of certificates representing the warrants, reflecting the provisions to be
included in these agreements for a particular offering will be, in each case,
filed with the SEC as an exhibit to a document incorporated by reference in the
registration statement of which this prospectus is a part prior to the date of
any prospectus supplement relating to an offering of the particular warrant.
We have summarized below the general terms and provisions that will
apply to any warrants that may be offered, except as otherwise described by the
applicable prospectus supplement. When Toll Brothers, Inc. offers to sell
warrants, a prospectus supplement will describe the specific terms of that
series of warrants. If any of the general terms and provisions described in this
prospectus do not apply to the particular series of warrants being offered the
applicable prospectus supplement will so indicate and will describe any
alternative provisions that are applicable. The following summary of various
provisions of the warrants, the warrant agreements and the warrant certificates
is not complete. You should read all of the provisions of the applicable warrant
agreement and warrant certificate, including the definitions contained in those
documents of various terms, for additional important information concerning any
series of warrants offered by this prospectus.
Debt Warrants
General. The prospectus supplement relating to any series of debt
warrants that are offered by this prospectus will describe the specific terms of
that series of debt warrants, any related debt warrant agreement and the debt
warrant certificate(s) representing the debt warrants. The applicable prospectus
supplement will describe, among other things, the following terms, to the extent
they are applicable to that series of debt warrants:
o the issuer of the debt securities which may be purchased upon
exercise of the debt warrants, the designation, number, stated
value and terms of those debt securities, the terms of the
related guarantees and the procedures and conditions relating
to the exercise of the debt warrants;
o the designation and terms of any debt securities and related
guarantees with which the debt warrants are issued and the
number of the debt warrants issued with each debt security;
o the date, if any, on and after which the debt warrants and the
related debt securities will be separately transferable;
o the principal amount of debt securities which may be purchased
upon exercise of each debt warrant and the price at which the
principal amount of debt securities may be purchased upon
exercise of the debt warrant;
o the date on which the right to exercise the debt warrants will
begin and the date on which the right will expire;
o a discussion of the material United States federal income tax
considerations relevant to the exercise of the debt warrants;
o whether the debt warrants represented by the debt warrant
certificates will be issued in registered or bearer form, and,
if registered, where they may be transferred and registered;
25
o call provisions, if any, of the debt warrants; and
o any other material terms of the debt warrants.
Debt warrant certificates will be exchangeable for new debt warrant
certificates of different denominations. In addition, debt warrants may be
exercised at the corporate trust office of the warrant agent or any other office
indicated in the applicable prospectus supplement. A holder of a debt warrant
will not have any of the rights of a holder of the debt securities which may be
purchased by the exercise of the debt warrant before the debt securities are
purchased by the exercise of the debt warrant. Accordingly, before a debt
warrant is exercised, the holder will not be entitled to receive any payments of
principal, premium, if any, or interest, if any, on the debt securities which
may be purchased by the exercise of that debt warrant.
Exercise of Debt Warrants. Each debt warrant will entitle the holder to
purchase for cash the principal amount of debt securities described in the
applicable prospectus supplement at the exercise price described or explained in
the prospectus supplement. Debt warrants may be exercised at any time from the
time they become exercisable, as described in the applicable prospectus
supplement, up to the time on the date stated in the applicable prospectus
supplement. Afterwards, unexercised debt warrants will become void.
Debt warrants may be exercised in the manner described in the
applicable prospectus supplement. When Toll Brothers, Inc. receives payment and
the properly completed and duly executed debt warrant certificate at the
corporate trust office of the warrant agent or any other office indicated in the
applicable prospectus supplement, it will, as soon as practicable, forward the
debt securities purchased upon the exercise of the debt warrants. If less than
all of the debt warrants represented by the debt warrant certificate are
exercised, Toll Brothers, Inc. will issue a new debt warrant certificate for the
amount of debt warrants that remain exercisable.
Common Stock Warrants
General. The prospectus supplement relating to any series of common
stock warrants that are offered by this prospectus will describe the specific
terms of that series of common stock warrants, any related common stock warrant
agreement and the common stock warrant certificate(s) representing the common
stock warrants. The applicable prospectus supplement will describe, among other
things, the following terms, to the extent they are applicable to that series of
common stock warrants:
o the procedures and conditions relating to the exercise of the
common stock warrants;
o the number of shares of common stock, if any, issued with the
common stock warrants;
o the date, if any, on and after which the common stock warrants
and any related shares of common stock will be separately
transferable;
o the offering price, if any, of the common stock warrants;
o the number of shares of common stock which may be purchased
upon exercise of the common stock warrants and the price or
prices at which the shares may be purchased upon exercise;
o the date on which the right to exercise the common stock
warrants will begin and the date on which the right will
expire;
o a discussion of the material United States federal income tax
considerations applicable to the exercise of the common stock
warrants;
o call provisions, if any, of the common stock warrants; and
o any other material terms of the common stock warrants.
Common stock warrant certificates will be exchangeable for new common
stock warrant certificates of different denominations. In addition, common stock
warrants may be exercised at the corporate trust office of the warrant agent or
any other office indicated in the applicable prospectus supplement. A holder of
a common stock warrant will not have any of the rights of a holder of the common
stock which may be purchased by the exercise of the common stock warrant before
the common stock is purchased by the exercise of the common stock warrant.
Accordingly, before a common stock warrant is exercised, the holder will not be
entitled to receive any
26
dividend payments or exercise any voting or other rights associated with the
shares of common stock which may be purchased when the common stock warrant is
exercised.
Exercise of Common Stock Warrants. Each common stock warrant will
entitle the holder to purchase for cash the number of shares of common stock of
Toll Brothers, Inc. at the exercise price that is described or explained in the
applicable prospectus supplement. Common stock warrants may be exercised at any
time from the time they become exercisable, as described in the applicable
prospectus supplement, up to the time on the date stated in the applicable
prospectus supplement. Afterwards, unexercised common stock warrants will become
void.
Common stock warrants may be exercised in the manner described in the
applicable prospectus supplement. When Toll Brothers, Inc. receives payment and
the properly completed and duly executed common stock warrant certificate at the
corporate trust office of the warrant agent or any other office indicated in the
applicable prospectus supplement, it will, as soon as practicable, forward a
certificate representing the number of shares of common stock purchased upon
exercise of the common stock warrants. If less than all of the common stock
warrants represented by the common stock warrant certificate are exercised, Toll
Brothers, Inc. will issue a new common stock warrant certificate for the amount
of common stock warrants that remain exercisable.
Preferred Stock Warrants
General. The prospectus supplement relating to any series of preferred
stock warrants that are offered by this prospectus will describe the specific
terms of that series of preferred stock warrants, any related preferred stock
warrant agreement and the preferred stock warrant certificate(s) representing
the preferred stock warrants. The applicable prospectus supplement will
describe, among other things, the following terms, to the extent they are
applicable to that series of preferred stock warrants:
o the designation and terms of the shares of preferred stock
which may be purchased upon exercise of the preferred stock
warrants and the procedures and conditions relating to the
exercise of the preferred stock warrants;
o the designation and terms of any related shares of preferred
stock with which the preferred stock warrants are issued and
the number of shares of the preferred stock, if any, issued
with preferred stock warrants;
o the date, if any, on and after which the preferred stock
warrants and any related shares of preferred stock will be
separately transferable;
o the offering price, if any, of the preferred stock warrants;
o the number of shares of preferred stock which may be purchased
upon exercise of the preferred stock warrants and the initial
price or prices at which the shares may be purchased upon
exercise;
o the date on which the right to exercise the preferred stock
warrants will begin and the date on which the right will
expire;
o a discussion of the material United States federal income tax
considerations relevant to the exercise of the preferred stock
warrants;
o call provisions, if any, of the preferred stock warrants; and
o any other material terms of the preferred stock warrants.
Preferred stock warrant certificates will be exchangeable for new
preferred stock warrant certificates of different denominations. In addition,
preferred stock warrants may be exercised at the corporate trust office of the
warrant agent or any other office indicated in the applicable prospectus
supplement. A holder of a preferred stock warrant will not have any of the
rights of a holder of the preferred stock which may be purchased by the exercise
of the preferred stock warrant before the preferred stock is purchased by the
exercise of the preferred stock warrant. Accordingly, before a preferred stock
warrant is exercised, the holder will not be entitled to receive any dividend
payments or exercise any voting or other rights associated with the preferred
stock which may be purchased when the preferred stock warrant is exercised.
27
Exercise of Preferred Stock Warrants. Each preferred stock warrant will
entitle the holder to purchase for cash the number of shares of preferred stock
of Toll Brothers, Inc. at the exercise price described or explained in the
applicable prospectus supplement. Preferred stock warrants may be exercised at
any time from the time they become exercisable, as described in the applicable
prospectus supplement, up to the time on the date stated in the applicable
prospectus supplement. Afterwards, unexercised preferred stock warrants will
become void.
Preferred stock warrants may be exercised in the manner described in
the applicable prospectus supplement. When Toll Brothers, Inc. receives payment
and the properly completed and duly executed preferred stock warrant certificate
at the corporate trust office of the warrant agent or any other office indicated
in the applicable prospectus supplement, it will, as soon as practicable,
forward a certificate representing the number of shares of preferred stock
purchased upon exercise of the preferred stock warrants. If less than all of the
preferred stock warrants represented by the preferred stock warrant certificate
are exercised, Toll Brothers, Inc. will issue a new preferred stock warrant
certificate for the amount of preferred stock warrants that remain exercisable.
CLASSIFIED BOARD OF DIRECTORS AND RESTRICTIONS ON REMOVAL
Under the Certificate of Incorporation, as amended, of Toll Brothers,
Inc., the board of directors is divided into three classes of directors serving
staggered terms of three years each. Each class is to be as nearly equal in
number as possible, with one class being elected each year. The Certificate of
Incorporation, as amended, also provides that:
o directors may be removed from office only for cause and only
with the affirmative vote of 66 2/3% of the voting power of
the voting stock;
o any vacancy on the board of directors or any newly created
directorship will be filled by the remaining directors then in
office, though less than a quorum; and
o advance notice of stockholder nominations for the elections of
directors must be given in the manner provided by the By-Laws
of Toll Brothers, Inc.
The required 66 2/3% stockholder vote necessary to alter, amend or
repeal these provisions of the Certificate of Incorporation, as amended, the
related amendments to the By-Laws and all other provisions of the By-Laws, or to
adopt any provisions relating to the classification of the board of directors
and the other matters described above may make it more difficult to change the
composition of the board of directors of Toll Brothers, Inc. and may discourage
or make difficult any attempt by a person or group to obtain control of Toll
Brothers, Inc.
PLAN OF DISTRIBUTION
Toll Brothers, Inc., Toll Corp., First Huntingdon Finance Corp. and
Toll Finance Corp., or any of them, may offer and sell their respective
securities to which this prospectus relates in any one or more of the following
ways:
o directly to purchasers;
o to or through underwriters;
o to or through dealers; or
o to or through agents.
Each time we sell securities, we will provide a prospectus supplement
that will name any underwriter, dealer or agent involved in the offer and sale
of the securities. The prospectus supplement will also set forth the terms of
the offering, including the purchase price of the securities and the proceeds to
the issuer(s) from the sale of the securities, any underwriting discounts and
other items constituting underwriters' compensation, any initial public offering
price and any discounts or concessions allowed or reallowed or paid to dealers
and any securities exchanges on which the securities may be listed.
The securities may be distributed from time to time in one or more
transactions:
o at a fixed price or prices, which may be changed;
o at market prices prevailing at the time of sale;
28
o at prices related to prevailing market prices; or
o at negotiated prices.
Each time we sell securities, we will describe the method of
distribution of the securities in the prospectus supplement relating to the
transaction.
If underwriters are used in the offer and sale of the securities being
offered by this prospectus, the name of each managing underwriter, if any, and
any other underwriters and the terms of the transaction, including any
underwriting discounts and other items constituting compensation of the
underwriters and dealers, if any, will be included in the prospectus supplement
relating to the offering. The securities will be acquired by the underwriters
for their own accounts and may be resold from time to time in one or more
transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale. Any initial public
offering price and any discounts or concessions allowed or reallowed or paid to
dealers may be changed from time to time.
If a dealer is used in the sale of the securities being offered by this
prospectus, the issuer(s) of the securities will sell those securities to the
dealer, as principal. The dealer may then resell those securities to the public
at varying prices to be determined by the dealer at the time of resale. The name
of the dealer and the terms of the transaction will be identified in the
applicable prospectus supplement.
If an agent is used in an offering of securities being offered by this
prospectus, the agent will be named and the terms of the agency will be
described in the applicable prospectus supplement relating to the offering.
Unless otherwise indicated in the prospectus supplement, an agent will act on a
best efforts basis for the period of its appointment.
Offers to purchase the securities offered by this prospectus may be
solicited, and sales of the securities may be made, by the issuer(s) of those
securities directly to institutional investors or others, who may be deemed to
be underwriters within the meaning of the Securities Act of 1933 with respect to
any resales of the securities. The terms of any offer made in this manner will
be included in the prospectus supplement relating to the offer.
If indicated in the applicable prospectus supplement, the issuer(s) of
the securities to which the prospectus supplement relates will authorize
underwriters or their other agents to solicit offers by certain institutional
investors to purchase securities from the issuer(s) pursuant to contracts
providing for payment and delivery at a future date. Institutional investors
with which these contracts may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and others. In all cases, these purchasers must be
approved by the issuer(s) of the securities. The obligations of any purchaser
under any of these contracts will not be subject to any conditions except that
(a) the purchase of the securities must not at the time of delivery be
prohibited under the laws of any jurisdiction to which that purchaser is subject
and (b) if the securities are also being sold to underwriters, the issuer(s)
must have sold to these underwriters the securities not subject to delayed
delivery. Underwriters and other agents will not have any responsibility in
respect of the validity or performance of these contracts.
In addition, the securities offered by this prospectus and an
accompanying prospectus supplement may be offered and sold by the holders of the
securities in one or more of the transactions described above, which
transactions may be effected at any time and from time to time. Upon a sale of
securities made in this manner, the respective holders of the securities and any
participating broker, dealer or underwriter may be deemed to be underwriters
within the meaning of Section 2(11) of the Securities Act of 1933, and any
commissions, discounts or concessions upon the sale, or any profit on the resale
of the securities, received in connection with the sale may be deemed to be
underwriting commissions or discounts under the Securities Act of 1933. The
compensation, including commissions, discounts, concessions and other profits,
received by any broker, dealer or underwriter in connection with the sale of any
of the securities, may be less than or in excess of customary commissions.
Some of the underwriters, dealers or agents used by Toll Brothers,
Inc., Toll Corp., First Huntingdon Finance Corp. and Toll Finance Corp., or any
of them, in any offering of securities under this prospectus may be customers
of, including borrowers from, engage in transactions with, and perform services
for, Toll Brothers, Inc., Toll Corp., First Huntingdon Finance Corp. and Toll
Finance Corp., or any of them, and/or one or more of their respective affiliates
in the ordinary course of business. Underwriters, dealers, agents and other
persons may
29
be entitled, under agreements which may be entered into with Toll Brothers,
Inc., Toll Corp., First Huntingdon Finance Corp. or Toll Finance Corp., as the
case may be, to indemnification against and contribution toward certain civil
liabilities, including liabilities under the Securities Act of 1933 and to be
reimbursed by Toll Brothers, Inc. and/or Toll Corp., Toll Finance Corp. or First
Huntingdon Finance Corp. for certain expenses.
Until the distribution of the securities offered by this prospectus is
completed, rules of the SEC may limit the ability of the underwriters and
certain selling group members, if any, to bid for and purchase the securities.
As an exception to these rules, the representatives of the underwriters, if any,
are permitted to engage in certain transactions that stabilize the price of the
securities. These transactions may consist of bids or purchases for the purpose
of pegging, fixing or maintaining the price of the securities.
If underwriters create a short position in the securities in connection
with the offering of the securities (i.e., if they sell more securities than are
included on the cover page of the applicable prospectus supplement), the
representatives of the underwriters may reduce that short position by purchasing
securities in the open market. The representatives of the underwriters also may
elect to reduce any short position by exercising all or part of the
over-allotment option, if any, described in the applicable prospectus
supplement.
The representatives of the underwriters also may impose a penalty bid
on certain underwriters and selling group members. This means that if the
representatives purchase securities in the open market to reduce the
underwriters' short position or to stabilize the price of the securities, they
may reclaim the amount of the selling concession from the underwriters and
selling group members who sold those securities as part of the offering of the
securities.
In general, purchases of a security for the purpose of stabilization or
to reduce a syndicate short position could cause the price of the security to be
higher than it might otherwise be in the absence of these types of purchases.
The imposition of a penalty bid might have an effect on the price of a security
to the extent that it were to discourage resales of the security by purchasers
in the offering.
Neither Toll Brothers, Inc., Toll Corp., First Huntingdon Finance Corp.
or Toll Finance Corp. nor any of the underwriters, if any, makes any
representation or prediction as to the direction or magnitude of any effect that
the transactions described above may have on the price of the securities. In
addition, neither Toll Brothers, Inc., Toll Corp., First Huntingdon Finance
Corp. or Toll Finance Corp. nor any of the underwriters, if any, makes any
representation that the representatives of the underwriters, if any, will engage
in these transactions or that these transactions, once commenced, will not be
discontinued without notice.
The anticipated date of delivery of the securities offered by this
prospectus will be described in the applicable prospectus supplement relating to
the offering. The securities offered by this prospectus may or may not be listed
on a national securities exchange or a foreign securities exchange. We cannot
give any assurances that there will be a market for any of the securities
offered by this prospectus and any prospectus supplement.
We estimate that the total expenses we will incur in offering the
securities to which this prospectus relates, excluding underwriting discounts
and commissions, if any, will be approximately $1,300,000.
LEGAL MATTERS
Certain legal matters relating to the validity of the securities
offered by this prospectus will be passed upon by Wolf, Block, Schorr and
Solis-Cohen LLP, Philadelphia, Pennsylvania.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule included in our Annual Report on Form 10-K
for the fiscal year ended October 31, 2001, as set forth in their report, which
is incorporated by reference in this prospectus and elsewhere in the
registration statement. Our financial statements and schedule are incorporated
by reference in reliance on Ernst & Young LLP's report, given on their authority
as experts in accounting and auditing.
30
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth an estimate of the costs and expenses,
other than underwriting discounts and commissions, to be incurred by Toll
Brothers, Inc. in connection with the issuance and distribution of the
securities being registered.
Securities and Exchange Commission registration fee...............$ 69,000
Printing and engraving............................................$ 150,000
Rating agency fees................................................$ 400,000
Blue Sky fees and expenses........................................$ 50,000
Legal fees and expenses...........................................$ 300,000
Accounting fees and expenses......................................$ 150,000
Trustee fees and expenses.........................................$ 40,000
Miscellaneous.....................................................$ 141,000
=============
Total.............................................................$ 1,300,000
All expenses, except the Securities and Exchange Commission
registration fee, are estimated.
Item 15. Indemnification of Directors and Officers.
For information regarding provisions under which a director or officer
of Toll Brothers, Inc., Toll Corp., First Huntingdon Finance Corp. or Toll
Finance Corp. may be insured or indemnified in any manner against any liability
which he may incur in his capacity as such, reference is made to Section 145 of
the Delaware General Corporation Law, which provides in its entirety as follows:
"(a) A corporation shall have power to indemnify any person
who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation) by reason of the fact that the
person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as
a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by the person in connection
with such action, suit or proceeding if the person acted in good faith
and in a manner the person reasonably believed to be in or not opposed
to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe the
person's conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea
of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner
which the person reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that the person's
conduct was unlawful.
(b) A corporation shall have power to indemnify any person who
was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of
the corporation to procure a judgment in its favor by reason of the
fact that the person is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably
incurred by the person in connection with the defense or settlement of
such action or suit if the person acted in good faith and in a manner
the person reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall
be made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable to the corporation unless
and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in
II-1
view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.
(c) To the extent that a present or former director or officer
of a corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in subsections
(a) and (b) of this section, or in defense of any claim, issue or
matter therein, such person shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by such
person in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this
section (unless ordered by a court) shall be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the present or former director, officer, employee or
agent is proper in the circumstances because the person has met the
applicable standard of conduct set forth in subsections (a) and (b) of
this section. Such determination shall be made, with respect to a
person who is a director or officer at the time of such determination,
(1) by a majority vote of the directors who are not parties to such
action, suit or proceeding, even though less than a quorum, or (2) by a
committee of such directors designated by majority vote of such
directors, even though less than a quorum, or (3) if there are no such
directors, or if such directors so direct, by independent legal counsel
in a written opinion, or (4) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an
officer or director in defending any civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the corporation
in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that
such person is not entitled to be indemnified by the corporation as
authorized in this section. Such expenses (including attorneys' fees)
incurred by former directors and officers or other employees and agents
may be so paid upon such terms and conditions, if any, as the
corporation deems appropriate.
(f) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other subsections of this section shall
not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in such person's official capacity and as
to action in another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against such person and
incurred by such person in any such capacity, or arising out of such
person's status as such, whether or not the corporation would have the
power to indemnify such person against such liability under this
section.
(h) For purposes of this section, references to "the
corporation" shall include, in addition to the resulting corporation,
any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so that any
person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under this section with
respect to the resulting or surviving corporation as such person would
have with respect to such constituent corporation if its separate
existence had continued.
(i) For purposes of this section, references to "other
enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with
respect to any employee benefit plan; and references to "serving at the
request of the corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on,
or involves services by, such director, officer, employee, or agent
with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner
such person reasonably believed to be in
II-2
the interest of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner "not opposed to
the best interests of the corporation" as referred to in this section.
(j) The indemnification and advancement of expenses provided
by, or granted pursuant to, this section shall, unless otherwise
provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a
person.
(k) The Court of Chancery is hereby vested with exclusive
jurisdiction to hear and determine all actions for advancement of
expenses or indemnification brought under this section or under any
bylaw, agreement, vote of stockholders or disinterested directors, or
otherwise. The Court of Chancery may summarily determine a
corporation's obligation to advance expenses (including attorneys'
fees)."
See also Article Six of Toll Brothers, Inc.'s Certificate of
Incorporation, as amended, which obligates, and Article VII of Toll Brothers,
Inc.'s By-Laws, as amended, which grants, Toll Brothers, Inc. the power to
indemnify its directors, officers, employees and agents. In addition, Article
VIII of each of the By-Laws, as amended, of Toll Corp., First Huntingdon Finance
Corp., and Toll Finance Corp. obligates each of these entities to indemnify its
directors, officers, employees and agents.
See also the Underwriting Agreement Basic Provisions, filed as Exhibit
1 hereto, pursuant to which the Underwriters agree to indemnify the Registrants
and their respective directors, officers and controlling persons against certain
liabilities, including liabilities under the Securities Act.
See Item 17 of this Part II for further information concerning
indemnification of directors, officers and controlling persons of Toll Brothers,
Inc., Toll Corp., First Huntingdon Finance Corp. and Toll Finance Corp.
Item 16. Exhibits
1 Form of Underwriting Agreement Basic Provisions.*
4.1 Form of Indenture among Toll Corp., as issuer, Toll Brothers, Inc.,
as guarantor, and Bank One Trust Company, NA, as Trustee.**
4.2 Form of Indenture among First Huntingdon Finance Corp., as issuer,
Toll Brothers, Inc., as guarantor, and Bank One Trust Company, NA, as
Trustee.**
4.3 Form of Indenture among Toll Finance Corp., as issuer, Toll Brothers,
Inc., as guarantor, and Bank One Trust Company, NA, as Trustee.**
5 Opinion and Consent of Wolf, Block, Schorr and Solis-Cohen LLP.*
12 Statement re Computation of Ratios of Earnings to Fixed Charges.*
23.1 Consent of Wolf, Block, Schorr and Solis-Cohen LLP (included as part
of Exhibit 5).*
23.2 Consent of Ernst & Young LLP.*
24 Powers of Attorney.**
25.1 Form T-1, Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 with respect to the debt securities of Toll
Corp. and guarantees of Toll Brothers, Inc.**
25.2 Form T-1, Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 with respect to the debt securities of First
Huntingdon Finance Corp. and guarantees of Toll Brothers, Inc.**
25.3 Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 with respect to the debt securities of Toll
Finance Corp. and guarantees of Toll Brothers, Inc.**
- ---------------
* Filed electronically herewith.
** Previously filed.
II-3
Additional exhibits to this registration statement will be filed with
or incorporated by reference in this registration statement in connection with
future amendments to, or supplements to, the prospectus forming a part of this
registration statement.
Item 17. Undertakings.
(a) The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease
in the volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the
low or high end of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) to include any material information with
respect to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrants pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrants' annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in this registration
statement shall be deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrants pursuant to the foregoing provisions, or otherwise,
the registrants have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrants of expenses incurred or paid by a director, officer or
controlling person of the registrants in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the Securities being registered, the registrants will, unless
in the opinion of their counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
(d) The undersigned registrants hereby undertake that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part or this registration statement in reliance upon Rule 430A and
contained
II-4
in a form of prospectus filed by the registrants pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-5
SIGNATURES AND POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment
No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Township of Lower Moreland,
Commonwealth of Pennsylvania, on June 20, 2002.
TOLL BROTHERS, INC.
By: /s/ Zvi Barzilay
----------------------------------------
Zvi Barzilay,
President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to the Registration Statement has been signed by the following
persons in the capacities indicated on June 20, 2002.
Signature Title
- --------- -----
* Chairman of the Board, Chief Executive Officer and
- ------------------------------ Director (Principal Executive Officer)
Robert I. Toll
* Vice Chairman of the Board and Director
- ------------------------------
Bruce E. Toll
/s/ Zvi Barzilay President, Chief Operating Officer and Director
- ------------------------------
Zvi Barzilay
* Director
- ------------------------------
Robert S. Blank
* Director
- ------------------------------
Edward G. Boehne
* Director
- ------------------------------
Richard J. Braemer
* Director
- ------------------------------
Roger S. Hillas
* Director
- ------------------------------
Carl B. Marbach
* Executive Vice President, Treasurer, Chief Financial
- ------------------------------ Officer and Director (Principal Financial Officer)
Joel H. Rassman
* Director
- ------------------------------
Paul E. Shapiro
/s/ Joseph R. Sicree Vice President and Chief Accounting Officer
- ------------------------------ (Principal Accounting Officer)
Joseph R. Sicree
*By: /s/ Joseph R. Sicree
----------------------------
Joseph R. Sicree,
Attorney-in-Fact pursuant to
powers of attorney previously
filed as Exhibit 24 to this
registration statement
II-6
SIGNATURES AND POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment
No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Township of Lower Moreland,
Commonwealth of Pennsylvania, on June 20, 2002.
TOLL CORP.
By: /s/ Zvi Barzilay
----------------------------------------
Zvi Barzilay,
President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to the Registration Statement has been signed by the following
persons in the capacities indicated on June 20, 2002.
Signature Title
- --------- -----
* Chairman of the Board, Chief Executive Officer and
- ------------------------------- Director (Principal Executive Officer)
Robert I. Toll
/s/ Zvi Barzilay President, Chief Operating Officer, Secretary and
- ------------------------------- Director
Zvi Barzilay
* Executive Vice President, Treasurer, Chief Financial
- ------------------------------- Officer and Director (Principal Financial Officer)
Joel H. Rassman
/s/ Joseph R. Sicree Vice President and Chief Accounting Officer
- ------------------------------- (Principal Accounting Officer)
Joseph R. Sicree
*By: /s/ Joseph R. Sicree
----------------------------
Joseph R. Sicree,
Attorney-in-Fact pursuant to
powers of attorney previously
filed as Exhibit 24 to this
registration statement
II-7
SIGNATURES AND POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment
No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Township of Lower Moreland,
Commonwealth of Pennsylvania, on June 20, 2002.
FIRST HUNTINGDON FINANCE CORP.
By: /s/ Zvi Barzilay
--------------------------------------
Zvi Barzilay,
President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to the Registration Statement has been signed by the following
persons in the capacities indicated on June 20, 2002.
Signature Title
- --------- -----
* Chairman of the Board, Chief Executive Officer and
- ------------------------------- Director (Principal Executive Officer)
Robert I. Toll
/s/ Zvi Barzilay President, Chief Operating Officer, Secretary and
- ------------------------------- Director
Zvi Barzilay
* Executive Vice President, Treasurer, Chief Financial
- ------------------------------- Officer and Director (Principal Financial Officer)
Joel H. Rassman
/s/ Joseph R. Sicree Chief Accounting Officer
- ------------------------------- (Principal Accounting Officer)
Joseph R. Sicree
*By: /s/ Joseph R. Sicree
----------------------------
Joseph R. Sicree,
Attorney-in-Fact pursuant to
powers of attorney previously
filed as Exhibit 24 to this
registration statement
II-8
SIGNATURES AND POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment
No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Township of Lower Moreland,
Commonwealth of Pennsylvania, on June 20, 2002.
TOLL FINANCE CORP.
By: /s/ Zvi Barzilay
-----------------------------------
Zvi Barzilay,
President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. to the Registration Statement has been signed by the following
persons in the capacities indicated on June 20, 2002.
Signature Title
- --------- ------
* Chairman of the Board, Chief Executive Officer and
- ------------------------------- Director (Principal Executive Officer)
Robert I. Toll
/s/ Zvi Barzilay President, Chief Operating Officer, Secretary and
- ------------------------------- Director
Zvi Barzilay
* Executive Vice President, Treasurer, Chief Financial
- ------------------------------- Officer and Director (Principal Financial Officer)
Joel H. Rasman
/s/ Joseph R. Sicree Chief Accounting Officer
- ------------------------------- (Principal Accounting Officer)
Joseph R. Sicree
*By: /s/ Joseph R. Sicree
----------------------------
Joseph R. Sicree,
Attorney-in-Fact pursuant to
powers of attorney previously
filed as Exhibit 24 to this
registration statement
II-9
Index to Exhibits
Exhibit
Number Description
- -------- -----------
1 Form of Underwriting Agreement Basic Provisions.*
4.1 Form of Indenture among Toll Corp., as issuer, Toll Brothers, Inc.,
as guarantor, and Bank One Trust Company, NA, as Trustee.**
4.2 Form of Indenture among First Huntingdon Finance Corp., as issuer,
Toll Brothers, Inc., as guarantor, and Bank One Trust Company, NA, as
Trustee.**
4.3 Form of Indenture among Toll Finance Corp., as issuer, Toll Brothers,
Inc., as guarantor, and Bank One Trust Company, NA, as Trustee.**
5 Opinion and Consent of Wolf, Block, Schorr and Solis-Cohen LLP.*
12 Statement re Computation of Ratios of Earnings to Fixed Charges.*
23.1 Consent of Wolf, Block, Schorr and Solis-Cohen LLP (included as part
of Exhibit 5).*
23.2 Consent of Ernst & Young LLP.*
24 Powers of Attorney.**
25.1 Form T-1, Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 with respect to the debt securities of Toll
Corp. and guarantees of Toll Brothers, Inc.**
25.2 Form T-1, Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 with respect to the debt securities of First
Huntingdon Finance Corp. and guarantees of Toll Brothers, Inc.**
25.3 Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 with respect to the debt securities of Toll
Finance Corp. and guarantees of Toll Brothers, Inc.**
- ---------------
* Filed electronically herewith.
** Previously filed.
II-10