SECOND RESTATED CERTIFICATE OF INCORPORATION OF TOLL BROTHERS, INC.

 

 

         Toll Brothers, Inc., a corporation organized and existing under and by

virtue of the General Corporation Law of the State of Delaware, does hereby

certify that:

 

         FIRST: The original Certificate of Incorporation of the corporation was

filed with the Secretary of State of the State of Delaware on May 28, 1986. The

Restated Certificate of Incorporation of the corporation was filed with the

Secretary of State of the State of Delaware on July 3, 1986.

 

         SECOND: This Second Restated Certificate of Incorporation was duly

adopted in accordance with Section 245 of the General Corporation Law of the

State of Delaware.

 

         THIRD: This Second Restated Certificate of Incorporation only restates

and integrates and does not further amend the provisions of the Restated

Certificate of Incorporation of the corporation as heretofore amended or

supplemented, and there is no discrepancy between those provisions and the

provisions of this Second Restated Certificate of Incorporation, which reads in

its entirety as follows:

 

 

                                   ARTICLE ONE

 

The name of the corporation is Toll Brothers, Inc.

 

 

                                   ARTICLE TWO

 

The address of its registered office in the State of Delaware is 1209 Orange

Street, Wilmington, County of New Castle, Delaware 19801. The name of its

registered agent at such address is The Corporation Trust Company.

 

 

                                  ARTICLE THREE

 

The purpose of the corporation is to engage in any lawful act or activity for

which corporations may be organized under the General Corporation Law of the

State of Delaware.

 

 

                                  ARTICLE FOUR

 

The corporation is authorized to issue 201,000,000 shares of capital stock,

consisting of two (2) classes of stock, to wit:

 

         (a) COMMON STOCK. The total number of shares of Common Stock which the

         corporation shall have authority to issue is Two Hundred Million

         (200,000,000) shares and the par value of each of such shares is One

         Cent ($.01) amounting in the aggregate to Two Million Dollars

         ($2,000,000).

 

         (b) PREFERRED STOCK. The total number of shares of Preferred Stock

         which the corporation shall have authority to issue is One Million

         (1,000,000), and the par value of each such share is One Cent ($.01)

         amounting in the aggregate to Ten Thousand Dollars ($10,000).

 

 

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The Board of Directors is authorized, subject to the limitations prescribed by

law and the provisions of this Article Four, to provide by adopting a resolution

or resolutions, a certificate of which action shall be filed and recorded in

accordance with the General Corporation Law of the State of Delaware, for the

issuance of the Preferred Stock in one or more series, each with such

designations, powers, preferences and rights of the shares, and the

qualifications, limitations or restrictions thereof.

 

The number of authorized shares of Preferred Stock may be increased or decreased

(but not below the number of shares thereof then outstanding) by the affirmative

vote of the holders of a majority of the Common Stock, without a vote of the

holders of the Preferred Stock, or of any series thereof, unless a vote of any

such holders is required pursuant to the certificate or certificates

establishing the series of Preferred Stock."

 

 

      CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS OF SERIES A JUNIOR

              PARTICIPATING PREFERRED STOCK OF TOLL BROTHERS, INC.

 

 

                       SECTION 1. DESIGNATION AND AMOUNT.

 

The shares of such series shall be designated as "Series A Junior Participating

Preferred Stock" and the number of shares constituting such series shall be

60,000.

 

 

                     SECTION 2. DIVIDENDS AND DISTRIBUTIONS.

 

(A) The holders of shares of Series A Junior Participating Preferred Stock shall

be entitled to receive, when, as and if declared by the Board of Directors out

of funds legally available for the purpose, quarterly dividends payable in cash

on the last day of March, June, September and December in each year (each such

date being referred to herein as a "Quarterly Dividend Payment Date"),

commencing on the first Quarterly Dividend Payment Date after the first issuance

of a share or fraction of a share of Series A Junior Participating Preferred

Stock, in an amount per share (rounded to the nearest cent) equal to the greater

of (a) $0.01 or (b) subject to the provision for adjustment hereinafter set

forth, 1,000 times the aggregate per share amount of all cash dividends, and

1,000 times the aggregate per share amount (payable in kind) of all non-cash

dividends or other distributions other than a dividend payable in shares of

Common Stock or a subdivision of the outstanding shares of Common Stock (by

reclassification or otherwise), declared on the Common Stock, par value $0.01

per share, of the Corporation (the "Common Stock") since the immediately

preceding Quarterly Dividend Payment Date, or, with respect to the first

Quarterly Dividend Payment Date, since the first issuance of any share or

fraction of a share of Series A Junior Participating Preferred Stock. In the

event the Corporation shall at any time after June 12, 1997 (the "Rights

Declaration Date") (i) declare any dividend on Common Stock payable in shares of

Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the

outstanding Common Stock into a smaller number of shares, then in each such case

the amount to which holders of shares of Series A Junior Participating Preferred

Stock were entitled immediately prior to such event under clause (b) of the

preceding sentence shall be adjusted by multiplying such amount by a fraction

the numerator of which is the number of shares of Common Stock outstanding

immediately after such event and the denominator of which is the number of

shares of Common Stock that were outstanding immediately prior to such event.

 

(B) The Corporation shall declare a dividend or distribution on the outstanding

shares of Series A Junior Participating Preferred Stock as provided in Paragraph

(A) above immediately after it declares a dividend or distribution on the Common

Stock (other than a dividend payable in shares of Common Stock); provided that,

in the event no dividend or distribution shall have been declared on the Common

Stock during the period between any Quarterly Dividend Payment Date and the next

subsequent Quarterly Dividend Payment Date, a dividend of $0.01 per share on the

outstanding shares of Series A Junior Participating Preferred Stock shall

nevertheless be payable on such subsequent Quarterly Dividend Payment Date.

 

 

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(C) Dividends shall begin to accrue and be cumulative on outstanding shares of

Series A Junior Participating Preferred Stock from the Quarterly Dividend

Payment Date next preceding the date of issue of such shares of Series A Junior

Participating Preferred Stock, unless the date of issue of such shares is prior

to the record date for the first Quarterly Dividend Payment Date, in which case

dividends on such shares shall begin to accrue from the date of issue of such

shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a

date after the record date for the determination of holders of shares of Series

A Junior Participating Preferred Stock entitled to receive a quarterly dividend

and before such Quarterly Dividend Payment Date, in either of which events such

dividends shall begin to accrue and be cumulative from such Quarterly Dividend

Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends

paid on the shares of Series A Junior Participating Preferred Stock in an amount

less than the total amount of such dividends at the time accrued and payable on

such shares shall be allocated pro rata on a share-by-share basis among all such

shares at the time outstanding. The Board of Directors may fix a record date for

the determination of holders of shares of Series A Junior Participating

Preferred Stock entitled to receive payment of a dividend or distribution

declared thereon, which record date shall be no more than thirty (30) days prior

to the date fixed for the payment thereof.

 

 

                            SECTION 3. VOTING RIGHTS.

 

The holders of shares of Series A Junior Participating Preferred Stock shall

have the following voting rights:

 

(A) Subject to the provision for adjustment hereinafter set forth, each share of

Series A Junior Participating Preferred Stock shall entitle the holder thereof

to 1,000 votes on all matters submitted to a vote of the stockholders of the

Corporation. In the event the Corporation shall at any time after the Rights

Declaration Date (i) declare any dividend on Common Stock payable in shares of

Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the

outstanding Common Stock into a smaller number of shares, then in each such case

the number of votes per share to which holders of shares of Series A Junior

Participating Preferred Stock were entitled immediately prior to such event

shall be adjusted by multiplying such number by a fraction the numerator of

which is the number of shares of Common Stock outstanding immediately after such

event and the denominator of which is the number of shares of Common Stock that

were outstanding immediately prior to such event.

 

(B) Except as otherwise provided herein or by law, the holders of shares of

Series A Junior Participating Preferred Stock and the holders of shares of

Common Stock shall vote together as one class on all matters submitted to a vote

of stockholders of the Corporation.

 

(C)      (i) If at any time dividends on any Series A Junior Participating

         Preferred Stock shall be in arrears in an amount equal to six (6)

         quarterly dividends thereon, the occurrence of such contingency shall

         mark the beginning of a period (herein called a "default period") which

         shall extend until such time when all accrued and unpaid dividends for

         all previous quarterly dividend periods and for the current quarterly

         dividend period on all shares of Series A Junior Participating

         Preferred Stock then outstanding shall have been declared and paid or

         set apart for payment. During each default period, all holders of

         Preferred Stock (including holders of the Series A Junior Participating

         Preferred Stock) with dividends in arrears in an amount equal to six

         (6) quarterly dividends thereon, voting as a class, irrespective of

         series, shall have the right to elect two (2) Directors.

 

 

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         (ii) During any default period, such voting right of the holders of

         Series A Junior Participating Preferred Stock may be exercised

         initially at a special meeting called pursuant to subparagraph (iii) of

         this Section 3(C) or at any annual meeting of stockholders, and

         thereafter at annual meetings of stockholders, provided that such

         voting right shall not be exercised unless the holders of ten percent

         (10%) in number of shares of Preferred Stock outstanding shall be

         present in person or by proxy. The absence of a quorum of the holders

         of Common Stock shall not affect the exercise by the holders of

         Preferred Stock of such voting right. At any meeting at which the

         holders of Preferred Stock shall exercise such voting right initially

         during an existing default period, they shall have the right, voting as

         a class, to elect Directors to fill such vacancies, if any, in the

         Board of Directors as may then exist up to two (2) Directors or, if

         such right is exercised at an annual meeting, to elect two (2)

         Directors. If the number which may be so elected at any special meeting

         does not amount to the required number, the holders of the Preferred

         Stock shall have the right to make such increase in the number of

         Directors as shall be necessary to permit the election by them of the

         required number. After the holders of the Preferred Stock shall have

         exercised their right to elect Directors in any default period and

         during the continuance of such period, the number of Directors shall

         not be increased or decreased except by vote of the holders of

         Preferred Stock as herein provided or pursuant to the rights of any

         equity securities ranking senior to or pari passu with the Series A

         Junior Participating Preferred Stock.

 

         (iii) Unless the holders of Preferred Stock shall, during an existing

         default period, have previously exercised their right to elect

         Directors, the Board of Directors may order, or any stockholder or

         stockholders owning in the aggregate not less than ten percent (10%) of

         the total number of shares of Preferred Stock outstanding, irrespective

         of series, may request, the calling of a special meeting of the holders

         of Preferred Stock, which meeting shall thereupon be called by the

         President, a Vice-President or the Secretary of the Corporation. Notice

         of such meeting and of any annual meeting at which holders of Preferred

         Stock are entitled to vote pursuant to this Paragraph (C)(iii) shall be

         given to each holder of record of Preferred Stock by mailing a copy of

         such notice to such holder at such holder's last address as the same

         appears on the books of the Corporation. Such meeting shall be called

         for a time not earlier than twenty (20) days and not later than sixty

         (60) days after such order or request, or in default of the calling of

         such meeting within sixty (60) days after such order or request, such

         meeting may be called on similar notice by any stockholder or

         stockholders owning in the aggregate not less than ten percent (10%) of

         the total number of shares of Preferred Stock outstanding.

         Notwithstanding the provisions of this Paragraph (C)(iii), no such

         special meeting shall be called during the period within sixty (60)

         days immediately preceding the date fixed for the next annual meeting

         of the stockholders.

 

         (iv) In any default period, the holders of Common Stock, and other

         classes of stock of the Corporation if applicable, shall continue to be

         entitled to elect the whole number of Directors until the holders of

         Preferred Stock shall have exercised their right to elect two (2)

         Directors voting as a class, after the exercise of which right (x) the

         Directors so elected by the holders of Preferred Stock shall continue

         in office until their successors shall have been elected by such

         holders or until the expiration of the default period, and (y) any

         vacancy in the Board of Directors may (except as provided in Paragraph

         (C)(ii) of this Section 3) be filled by vote of a majority of the

         remaining Directors theretofore elected by the holders of the class of

         stock which elected the Director whose office shall have become vacant.

         References in this Paragraph (C) to Directors elected by the holders of

         a particular class of stock shall include Directors elected by such

         Directors to fill vacancies as provided in clause (y) of the foregoing

         sentence.

 

         (v) Immediately upon the expiration of a default period, (x) the right

         of the holders of Preferred Stock as a class to elect Directors shall

         cease, (y) the term of any Directors elected by the holders of

         Preferred Stock as a class shall terminate, and (z) the number of

         Directors shall be such number as may be provided for in the

         Certificate of Incorporation or By-laws of the Corporation irrespective

         of any increase made pursuant to the provisions of Paragraph (C)(ii) of

         this Section 3 (such number being subject, however, to change

         thereafter in any manner provided by law or in the Certificate of

         Incorporation or By-laws of the Corporation). Any vacancies in the

         Board of Directors effected by the provisions of clauses (y) and (z) in

         the preceding sentence may be filled by a majority of the remaining

         Directors.

 

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(D) Except as set forth herein, holders of Series A Junior Participating

Preferred Stock shall have no special voting rights and their consent shall not

be required (except to the extent they are entitled to vote with holders of

Common Stock as set forth herein) for taking any corporate action.

 

 

                        SECTION 4. CERTAIN RESTRICTIONS.

 

(A) Whenever quarterly dividends or other dividends or distributions payable on

the Series A Junior Participating Preferred Stock as provided in Section 2

hereof are in arrears, thereafter and until all accrued and unpaid dividends and

distributions, whether or not declared, on shares of Series A Junior

Participating Preferred Stock outstanding shall have been paid in full, the

Corporation shall not:

 

          (i) declare or pay dividends on, make any other distributions on, or

         redeem or purchase or otherwise acquire for consideration any shares of

         stock ranking junior (either as to dividends or upon liquidation,

         dissolution or winding up) to the Series A Junior Participating

         Preferred Stock;

 

         (ii) declare or pay dividends on or make any other distributions on any

         shares of stock ranking on a parity (either as to dividends or upon

         liquidation, dissolution or winding up) with the Series A Junior

         Participating Preferred Stock, except dividends paid ratably on the

         Series A Junior Participating Preferred Stock and all such parity stock

         on which dividends are payable or in arrears in proportion to the total

         amounts to which the holders of all such shares are then entitled;

 

          (iii) redeem or purchase or otherwise acquire for consideration shares

         of any stock ranking on a parity (either as to dividends or upon

         liquidation, dissolution or winding up) with the Series A Junior

         Participating Preferred Stock, provided that the Corporation may at any

         time redeem, purchase or otherwise acquire shares of any such parity

         stock in exchange for shares of any stock of the Corporation ranking

         junior (either as to dividends or upon dissolution, liquidation or

         winding up) to the Series A Junior Participating Preferred Stock; or

 

          (iv) purchase or otherwise acquire for consideration any shares of

         Series A Junior Participating Preferred Stock, or any shares of stock

         ranking on a parity (either as to dividends or upon liquidation,

         dissolution or winding up) with the Series A Junior Participating

         Preferred Stock, except in accordance with a purchase offer made in

         writing or by publication (as determined by the Board of Directors) to

         all holders of such shares upon such terms as the Board of Directors,

         after consideration of the respective annual dividend rates and other

         relative rights and preferences of the respective series and classes,

         shall determine in good faith will result in fair and equitable

         treatment among the respective series or classes.

 

(B) The Corporation shall not permit any subsidiary of the Corporation to

purchase or otherwise acquire for consideration any shares of stock of the

Corporation unless the Corporation could, under Paragraph (A) of this Section 4,

purchase or otherwise acquire such shares at such time and in such manner.

 

                          SECTION 5. REACQUIRED SHARES.

 

Any shares of Series A Junior Participating Preferred Stock purchased or

otherwise acquired by the Corporation in any manner whatsoever shall be retired

and canceled promptly after the acquisition thereof. All such shares shall upon

their cancellation become authorized but unissued shares of Preferred Stock and

may be reissued as part of a new series of Preferred Stock to be created by

resolution or resolutions of the Board of Directors, subject to the conditions

and restrictions on issuance set forth herein.

 

 

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               SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP.

 

(A) Upon any liquidation (voluntary or otherwise), dissolution or winding up of

the Corporation, no distribution shall be made to the holders of shares of stock

ranking junior (either as to dividends or upon liquidation, dissolution or

winding up) to the Series A Junior Participating Preferred Stock unless, prior

thereto, the holders of shares of Series A Junior Participating Preferred Stock

shall have received an amount equal to $100,000 per share of Series A Junior

Participating Preferred Stock, plus an amount equal to accrued and unpaid

dividends and distributions thereon, whether or not declared, to the date of

such payment (the "Series A Liquidation Preference"). Following the payment of

the full amount of the Series A Liquidation Preference, no additional

distributions shall be made to the holders of shares of Series A Junior

Participating Preferred Stock unless, prior thereto, the holders of shares of

Common Stock shall have received an amount per share (the "Common Adjustment")

equal to the quotient obtained by dividing (i) the Series A Liquidation

Preference by (ii) 1,000 (as appropriately adjusted as set forth in subparagraph

(C) below to reflect such events as stock splits, stock dividends and

recapitalizations with respect to the Common Stock) (such number in clause (ii),

the "Adjustment Number"). Following the payment of the full amount of the Series

A Liquidation Preference and the Common Adjustment in respect of all outstanding

shares of Series A Junior Participating Preferred Stock and Common Stock,

respectively, holders of Series A Junior Participating Preferred Stock and

holders of shares of Common Stock shall receive their ratable and proportionate

share of the remaining assets to be distributed in the ratio of the Adjustment

Number to 1 with respect to such Preferred Stock and Common Stock, on a per

share basis, respectively.

 

(B) In the event, however, that there are not sufficient assets available to

permit payment in full of the Series A Liquidation Preference and the

liquidation preferences of all other series of Preferred Stock, if any, which

rank on a parity (either as to dividends or upon liquidation, dissolution or

winding up) with the Series A Junior Participating Preferred Stock, then such

remaining assets shall be distributed ratably to the holders of such parity

shares in proportion to their respective liquidation preferences. In the event,

however, that there are not sufficient assets available to permit payment in

full of the Common Adjustment, then such remaining assets shall be distributed

ratably to the holders of Common Stock.

 

(C) In the event the Corporation shall at any time after the Rights Declaration

Date (i) declare any dividend on Common Stock payable in shares of Common Stock,

(ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding

Common Stock into a smaller number of shares, then in each such case the

Adjustment Number in effect immediately prior to such event shall be adjusted by

multiplying such Adjustment Number by a fraction the numerator of which is the

number of shares of Common Stock outstanding immediately after such event and

the denominator of which is the number of shares of Common Stock that were

outstanding immediately prior to such event.

 

 

                     SECTION 7. CONSOLIDATION, MERGER, ETC.

 

In case the Corporation shall enter into any consolidation, merger, combination

or other transaction in which the shares of Common Stock are exchanged for or

changed into other stock or securities, cash and/or any other property, then in

any such case the shares of Series A Junior Participating Preferred Stock shall

at the same time be similarly exchanged or changed in an amount per share

(subject to the provision for adjustment hereinafter set forth) equal to 1,000

times the aggregate amount of stock, securities, cash and/or any other property

(payable in kind), as the case may be, into which or for which each share of

Common Stock is changed or exchanged. In the event the Corporation shall at any

time after the Rights Declaration Date (i) declare any dividend on Common Stock

payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,

or (iii) combine the outstanding Common Stock into a smaller number of shares,

then in each such case the amount set forth in the preceding sentence with

respect to the exchange or change of shares of Series A Junior Participating

Preferred Stock shall be adjusted by multiplying such amount by a fraction the

numerator of which is the number of shares of Common Stock outstanding

immediately after such event and the denominator of which is the number of

shares of Common Stock that were outstanding immediately prior to such event.

 

 

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                            SECTION 8. NO REDEMPTION.

 

The shares of Series A Junior Participating Preferred Stock shall not be

redeemable.

 

 

                              SECTION 9. AMENDMENT.

 

The Certificate of Incorporation of the Corporation shall not be further amended

in any manner which would materially alter or change the powers, preferences or

special rights of the Series A Junior Participating Preferred Stock so as to

affect them adversely without the affirmative vote of the holders of a majority

or more of the outstanding shares of Series A Junior Participating Preferred

Stock, voting separately as a class.

 

 

                         SECTION 10. FRACTIONAL SHARES.

 

Series A Junior Participating Preferred Stock may be issued in fractions of a

share which shall entitle the holder, in proportion to such holder's fractional

shares, to exercise voting rights, receive dividends, participate in

distributions and to have the benefit of all other rights of holders of Series A

Junior Participating Preferred Stock.

 

 

                                  ARTICLE FIVE

 

                          PART I - POWERS OF THE BOARD

 

The business and affairs of the corporation shall be managed by or under the

direction of the Board of Directors. In furtherance and not in limitation of the

powers conferred by statute, the Board of Directors is expressly authorized to

make, alter, amend or repeal the By-Laws of the corporation. Any By-Laws which

the Directors make under the power conferred hereby may not be altered, amended

or repealed, nor may any provisions inconsistent therewith be adopted by the

stockholders, without the affirmative vote of the holders of at least 66-2/3% of

the voting power of the voting stock of the corporation entitled to vote

generally in the election of directors, voting together as single class.

 

                    PART II - NUMBER OF DIRECTORS AND BALLOTS

 

The number of Directors shall be fixed from time to time by, or in the manner

provided in, the By-laws of the corporation and may be increased or decreased as

therein provided. Directors of the corporation need not be elected by ballot

unless required by the By-laws.

 

 

 

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                     PART III - CLASSIFICATION OF THE BOARD

 

The Directors shall be classified, with respect to the time for which they

severally hold office, into three classes, as nearly equal in number as

reasonably possible, as shall be provided in the manner specified in the By-

Laws of the corporation, one class to be originally elected for a term expiring

at the annual meeting of stockholders to be held in 1990, another class to be

originally elected for a term expiring at the annual meeting of stockholders to

be held in 1991, and another class to be originally elected for a term expiring

at the annual meeting of stockholders to be held in 1992, with each class to

hold office until its successor is elected and qualified. At each annual meeting

of the stockholders of the corporation, the successors of the class of Directors

whose term expires at that meeting shall be elected to hold office for a term

expiring at the annual meeting of stockholders held in the third year following

the year of their election.

 

                         PART IV - REMOVAL OF DIRECTORS

 

Any Director may be removed from office only for cause and only by the

affirmative vote of the holders of 66-2/3% of the combined voting power of the

then outstanding shares of stock entitled to vote generally in the election of

Directors, voting together as a single class.

 

 

 

               PART V - VACANCIES AND NEWLY CREATED DIRECTORSHIPS

 

Newly created directorships resulting from any increase in the number of

Directors and any vacancies on the Board of Directors resulting from death,

resignation, disqualification, removal or other cause shall be filled solely by

the affirmative vote of a majority of the remaining Directors then in office,

even though less than a quorum of the Board of Directors. Any Director elected

in accordance with the preceding sentence shall hold office for the remainder of

the full term of the class of Directors in which the new directorship was

created or the vacancy occurred and until successors for such Director's class

shall have been elected and qualified.

 

                   PART VI - NOTICE OF STOCKHOLDER NOMINATIONS

 

Advance notice of stockholder nominations for the election of Directors shall be

given in the manner provided in the By-Laws of the corporation.

 

                  PART VII - ABILITY TO ALTER, AMEND OR REPEAL

 

Notwithstanding anything contained in this Certificate of Incorporation to the

contrary, the affirmative vote of the holders of at least 66-2/3% of the

combined voting power of all shares of the corporation entitled to vote

generally in the election of Directors, voting together as a single class, shall

be required to alter, amend or repeal this Article Five or to adopt any

provision inconsistent herewith.

 

 

                                   ARTICLE SIX

 

                        PART I. RIGHT TO INDEMNIFICATION

 

Each person who was or is made a party or is threatened to be made a party to or

is involved in any action, suit or proceeding, whether civil, criminal,

administrative or investigative ("proceeding"), by reason of the fact that he or

she, or a person of whom he or she is the legal representative, is or was a

director or officer of this corporation or is or was serving at the request of

the corporation as a director, officer, employee or agent of another corporation

or of a partnership, joint venture, trust or other enterprise, including service

with respect to employee benefit plans, whether the basis of such proceeding is

 

 

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<PAGE>

 

alleged action in an official capacity as a director, officer, employee or agent

or in any other capacity while serving as a director, officer, employee or

agent, shall be indemnified and held harmless by the corporation to the fullest

extent authorized by the General Corporation Law of the State of Delaware, as

the same exists or may hereafter be amended (but, in the case of any such

amendment, only to the extent that such amendment permits the corporation to

provide broader indemnification rights than said law permitted the corporation

to provide prior to such amendment), against all expenses, liability and loss

(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties

and amounts paid or to be paid in settlement) reasonably incurred or suffered by

such person in connection therewith; provided, however, that the corporation

shall indemnify any such person seeking indemnity in connection with a

proceeding (or part thereof) initiated by such person only if the initiation of

such proceeding (or part thereof) was authorized or approved by the Board of

Directors of the corporation. Such right shall be a contract right and shall

include the right to have the corporation pay, or repay such person for,

expenses incurred in defending any such proceeding in advance of its final

disposition; provided, however, that the payment of such expenses incurred by a

director or officer in his or her capacity as a director or officer (and not in

any other capacity in which service was or is rendered by such person while a

director or officer, including, without limitation, service to an employee

benefit plan) in advance of the final disposition of such proceeding, shall be

made only upon delivery to the corporation of an undertaking, by or on behalf of

such director or officer, to repay all amounts so advanced if it should be

determined ultimately that such director or officer is not entitled to be

indemnified under this Article Six or otherwise. The financial ability of any

such person to make such repayment shall not be a prerequisite to the making of

such payment of or for expenses.

 

                    PART II. RIGHT OF CLAIMANT TO BRING SUIT

 

If a claim (including a request for expenses) under Part I of this Article Six

is not paid in full by the corporation within ninety days after a written

request has been received by the corporation, the claimant may at any time

thereafter bring suit against the corporation to recover the unpaid amount of

the claim and, if successful, in whole or in part, the claimant shall be

entitled to be paid also the expense of prosecuting such claim. It shall be a

defense to any such action (other than an action brought to enforce a claim for

expenses incurred in defending any proceeding in advance of its final

disposition where the required undertaking has been tendered to the corporation)

that the claimant has not met the standards of conduct which make it permissible

under the General Corporation Law of the State of Delaware for the corporation

to indemnify the claimant for the amount claimed, but the burden of proving such

defense shall be on the corporation. Neither the failure of the corporation

(including its Board of Directors, independent legal counsel, or its

stockholders) to have made a determination prior to the commencement of such

action that indemnification of the claimant is proper in the circumstances

because he or she has met the applicable standards of conduct set forth in said

law, nor an actual determination by the corporation (including its Board of

Directors, independent legal counsel, or its stockholders) that the claimant had

not met such applicable standard of conduct, shall be a defense to the action or

create a presumption that the claimant had not met the applicable standard of

conduct. The provisions of this Part II of this Article Six shall be applicable

to all actions, suits or proceedings commenced after its adoption, whether such

arise out of acts or omissions which occurred prior or subsequent to such

adoption and shall continue as to a person who has ceased to be a Director,

officer, employee or agent of, or to render services for or at the request of,

the corporation or as the case may be, its parent, or subsidiaries and shall

inure to the benefit of the heirs, executors and administrators of such a

person.

 

                       PART III. INDEPENDENT LEGAL COUNSEL

 

Independent legal counsel may be appointed by the Board of Directors, even if a

quorum of disinterested Directors is not available, or by a person designated by

the Board of Directors. If independent legal counsel, so appointed, shall

determine in a written opinion that indemnification is proper under this Article

Six, indemnification shall be made without further action of the Board of

Directors.

 

 

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<PAGE>

 

                       PART IV. NON-EXCLUSIVITY OF RIGHTS

 

The rights conferred on any person by Parts I and II of this Article Six shall

not be exclusive of any other right which such person may have or hereafter

acquire under any statute, provision of this Certificate of Incorporation, as

amended and restated, by-law, agreement, or vote of stockholders or

disinterested directors or otherwise.

 

                                PART V. INSURANCE

 

The corporation may maintain insurance, at its expense, to protect itself and

any such director, officer, employee, agent or other person, or all of them, of

the corporation or another corporation, partnership, joint venture, trust or

other enterprise against any such expense, liability or loss, whether or not the

corporation would have the power to indemnify such person against such expense,

liability or loss under the General Corporation Law of the State of Delaware.

 

 

                                  ARTICLE SEVEN

 

A Director of this corporation shall not be personally liable to the corporation

or its stockholders for monetary damages for breach of fiduciary duty as a

director, except for liability (i) for any breach of the Director's duty of

loyalty to the corporation or its stockholders, (ii) for acts or omissions not

in good faith or which involve intentional misconduct or a knowing violation of

law, (iii) under Section 174 of the General Corporation Law of the State of

Delaware, or (iv) for any transaction from which the director derived an

improper personal benefit.

 

 

                                  ARTICLE EIGHT

 

Whenever a compromise or arrangement is proposed between this corporation and

its creditors or any class of them and/or between this corporation and its

stockholders or any class of them, any court of equitable jurisdiction within

the State of Delaware may, on the application in a summary way of this

corporation or of any creditor or stockholder thereof or on the application of

any receiver or receivers appointed for this corporation under the provisions of

Section 291 of Title 8 of the Delaware Code or on the application of trustees in

dissolution or of any receiver or receivers appointed for this corporation under

the provisions of Section 279 of Title 8 of the Delaware Code order a meeting of

the creditors or class of creditors, and/or of the stockholders or class of

stockholders of this corporation, as the case may be, to be summoned in such

manner as the said court directs. If a majority in number representing

three-fourths in value of the creditors or class of creditors, and/or of the

stockholders or class of stockholders of this corporation, as the case may be,

agree to any compromise or arrangement and to any reorganization of this

corporation as consequence of such compromise or arrangement, the said

compromise or arrangement and the said reorganization shall, if sanctioned by

the court to which the said application has been made, be binding on all the

creditors or class of creditors, and/or on all the stockholders or class of

stockholders, of this corporation, as the case may be, and also on this

corporation.

 

                                       10

<PAGE>

 

         I, the undersigned, being the Chairman of the Board, do make, file and

record this Second Restated Certificate of Incorporation, do certify that the

facts herein stated are true and that this Second Restated Certificate of

Incorporation has been duly adopted in accordance with the provisions of Section

245 of the General Corporation Law of Delaware and accordingly, have hereto set

my hand and seal this 8th day of September, 2005.

 

 

 

                                             ROBERT I. TOLL

                                             ---------------------------

                                             Robert I. Toll

                                             Chairman of the Board

 

                                             MICHAEL I. SNYDER

                                ATTEST:      ---------------------------

                                             Michael I. Snyder

                                             Secretary

CERTIFICATE OF AMENDMENT
OF
SECOND RESTATED CERTIFICATE OF INCORPORATION
OF
TOLL BROTHERS, INC.

TOLL BROTHERS, INC., a corporation organized and existing under and by virtue of the Delaware General Corporation Law (the “Company”) DOES HEREBY CERTIFY THAT:

FIRST: At the Annual Meeting of Stockholders on March 17, 2005, held pursuant to the notice required by Section 222 of the Delaware General Corporation Law, not less than a majority of the outstanding shares of stock entitled to vote thereon authorized the Board of Directors of the Company, through the filing of one or more certificates of amendment to the Certificate of Incorporation, to increase the authorized number of shares of common stock to 400,000,000 shares and the authorized preferred stock to 15,000,000 shares.

SECOND: At a meeting of the Board of Directors of the Company held on March 17, 2010, the Board of Directors of the Company adopted resolutions that declared advisable and adopted the following amendment to the Company’s Second Restated Certificate of Incorporation. The amendment amends Article Four of the Company’s Certificate of Incorporation to read in its entirety as follows:

Article Four

The corporation is authorized to issue 415,000,000 shares of capital stock, consisting of two (2) classes of stock, to wit:

(a) Common Stock. The total number of shares of Common Stock which the corporation shall have authority to issue is Four Hundred Million (400,000,000) shares and the par value of each of such  shares is One Cent ($.01) amounting in the aggregate to Four Million Dollars ($4,000,000).

(b) Preferred Stock. The total number of shares of Preferred Stock which the corporation shall have authority to issue is Fifteen Million (15,000,000), and the par value of each such share is One Cent ($.01) amounting in the aggregate to One Hundred Fifty Thousand Dollars ($150,000).

The Board of Directors is authorized, subject to the limitations prescribed by law and the provisions of this Article Four, to provide by adopting a resolution or resolutions, a certificate of which action shall be filed and recorded in accordance with the General Corporation Law of the State of Delaware, for the issuance of the Preferred Stock in one or more series, each with such designations, powers, preferences and rights of the  shares, and the qualifications, limitations or restrictions thereof.

The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of  shares thereof then outstanding) by the affirmative vote of the holders of a majority of the Common Stock, without a vote of the holders of the Preferred Stock, or of any series thereof, unless a vote of any such holders is required pursuant to the certificate or certificates establishing the series of Preferred Stock.

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THIRD: At a meeting of the Board of Directors of the Company held on December 9, 2009, the Board of Directors of the Company adopted resolutions that declared advisable and recommended to the stockholders of the Company the following amendment to the Company’s Second Restated Certificate of Incorporation and directed that said amendment be submitted to the Company’s stockholders for their consent and approval at the Annual Meeting of Stockholders on March 17, 2010. The amendment adds an Article Nine to the Company’s Second Restated Certificate of Incorporation to read in its entirety as follows:

ARTICLE NINE — RESTRICTIONS ON TRANSFER OF SHARES

Part I — Definitions

As used in this Article Nine, the following capitalized terms have the following meanings when used herein with initial capital letters (and any references to any portions of Treasury Regulation § 1.382-2T shall include any successor provisions):

(a) “4.95-percent Transaction” means any Transfer described in clause (a) or (b) of Part II of this Article Nine.

(b) “4.95-percent Stockholder” a Person who owns a Percentage Stock Ownership equal to or exceeding 4.95% of the corporation’s then-outstanding Stock, whether directly or indirectly, and including Stock such Person would be deemed to constructively own or which otherwise would be aggregated with shares owned by such Person pursuant to Section 382 of the Code, or any successor provision or replacement provision and the applicable Treasury Regulations thereunder.

(c) “Agent” has the meaning set forth in Part V of this Article Nine.

(d) “Board of Directors” or “Board” means the board of directors of the corporation.

(e) “Code” means the United States Internal Revenue Code of 1986, as amended from time to time.

(f) “Corporation Security” or “Corporation Securities” means (i) any Stock, (ii) shares of Preferred Stock issued by the corporation (other than Preferred Stock described in Section 1504(a)(4) of the Code), and (iii) warrants, rights, or options (including options within the meaning of Treasury Regulation § 1.382-2T(h)(4)(v)) to purchase Securities of the corporation.

(g) “Effective Date” means the date of filing of this Certificate of Amendment of Certificate of Incorporation of the corporation with the Secretary of State of the State of Delaware.

(h) “Excess Securities” has the meaning given such term in Part IV of this Article Nine.

(i) “Expiration Date” means the earlier of (i) the repeal of Section 382 of the Code or any successor statute if the Board of Directors determines that this Article Nine is no longer necessary or desirable for the preservation of Tax Benefits, (ii) the close of business on the first day of a taxable year of the corporation as to which the Board of Directors determines that no Tax Benefits may be carried forward or (iii) such date as the Board of Directors shall fix in accordance with Part XII of this Article Nine.

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(j) “Percentage Stock Ownership” means the percentage Stock Ownership interest of any Person or group (as the context may require) for purposes of Section 382 of the Code as determined in accordance with the Treasury Regulation § 1.382-2T(g), (h), (j) and (k) or any successor provision.

(k) “Person” means any individual, firm, corporation or other legal entity, including persons treated as an entity pursuant to Treasury Regulation § 1.382-3(a)(1)(i); and includes any successor (by merger or otherwise) of such entity.

(l) “Prohibited Distributions” means any and all dividends or other distributions paid by the corporation with respect to any Excess Securities received by a Purported Transferee.

(m) “Prohibited Transfer” means any Transfer or purported Transfer of Corporation Securities to the extent that such Transfer is prohibited and/or void under this Article Nine.

(n) “Public Group” has the meaning set forth in Treasury Regulation § 1.382-2T(f)(13).

(o) “Purported Transferee” has the meaning set forth in Part IV of this Article Nine.

(p) “Securities” and “Security” each has the meaning set forth in Part VII of this Article Nine.

(q) “Stock” means any interest that would be treated as “stock” of the corporation pursuant to Treasury Regulation § 1.382-2T(f)(18).

(r) “Stock Ownership” means any direct or indirect ownership of Stock, including any ownership by virtue of application of constructive ownership rules, with such direct, indirect, and constructive ownership determined under the provisions of Section 382 of the Code and the regulations thereunder.

(s) “Tax Benefits” means the net operating loss carryforwards, capital loss carryforwards, general business credit carryforwards, alternative minimum tax credit carryforwards and foreign tax credit carryforwards, as well as any loss or deduction attributable to a “net unrealized built-in loss” of the corporation or any direct or indirect subsidiary thereof, within the meaning of Section 382 of the Code.

(t) “Transfer” means, any direct or indirect sale, transfer, assignment, conveyance, pledge or other disposition or other action taken by a person, other than the corporation, that alters the Percentage Stock Ownership of any Person. A Transfer also shall include the creation or grant of an option (including an option within the meaning of Treasury Regulation § 1.382-4(d). For the avoidance of doubt, a Transfer shall not include the creation or grant of an option by the corporation, nor shall a Transfer include the issuance of Stock by the corporation.

(u) “Transferee” means any Person to whom Corporation Securities are Transferred.

(v) “Treasury Regulations” means the regulations, including temporary regulations or any successor regulations promulgated under the Code, as amended from time to time.

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Part II — Transfer and Ownership Restrictions

In order to preserve the Tax Benefits, from and after the Effective Date of this Article Nine any attempted Transfer of Corporation Securities prior to the Expiration Date and any attempted Transfer of Corporation Securities pursuant to an agreement entered into prior to the Expiration Date, shall be prohibited and void ab initio to the extent that, as a result of such Transfer (or any series of Transfers of which such Transfer is a part), either (a) any Person or Persons would become a 4.95-percent Stockholder or (b) the Percentage Stock Ownership in the corporation of any 4.95-percent Stockholder would be increased.

Part III — Exceptions

(a) Notwithstanding anything to the contrary herein, Transfers to a Public Group (including a new Public Group created under Treasury Regulation § 1.382-2T(j)(3)(i)) shall be permitted.

(b) The restrictions set forth in Part II of this Article Nine shall not apply to an attempted Transfer that is a 4.95-percent Transaction if the transferor or the Transferee obtains the written approval of the Board of Directors or a duly authorized committee thereof. As a condition to granting its approval pursuant to this Part III of Article Nine, the Board of Directors, may, in its discretion, require (at the expense of the transferor and/or transferee) an opinion of counsel selected by the Board of Directors that the Transfer shall not result in a limitation on the use of the Tax Benefits as a result of the application of Section 382 of the Code; provided that the Board may grant such approval notwithstanding the effect of such approval on the Tax Benefits if it determines that the approval is in the best interests of the corporation. The Board of Directors may impose any conditions that it deems reasonable and appropriate in connection with such approval, including, without limitation, restrictions on the ability of any Transferee to Transfer Stock acquired through a Transfer. Approvals of the Board of Directors hereunder may be given prospectively or retroactively. The Board of Directors, to the fullest extent permitted by law, may exercise the authority granted by this Article Nine through duly authorized officers or agents of the corporation. Nothing in this Part III of this Article Nine shall be construed to limit or restrict the Board of Directors in the exercise of its fiduciary duties under applicable law.

Part IV — Excess Securities

(a) No employee or agent of the corporation shall record any Prohibited Transfer, and the purported transferee of such a Prohibited Transfer (the “Purported Transferee”) shall not be recognized as a stockholder of the corporation for any purpose whatsoever in respect of the Corporation Securities which are the subject of the Prohibited Transfer (the “Excess Securities”). Until the Excess Securities are acquired by another person in a Transfer that is not a Prohibited Transfer, the Purported Transferee shall not be entitled, with respect to such Excess Securities, to any rights of stockholders of the corporation, including, without limitation, the right to vote such Excess Securities and to receive dividends or distributions, whether liquidating or otherwise, in respect thereof, if any, and the Excess Securities shall be deemed to remain with the transferor unless and until the Excess Securities are transferred to the Agent pursuant to Part V of this Article Nine or until an approval is obtained under Part III of this Article Nine. After the Excess Securities have been acquired in a Transfer that is not a Prohibited Transfer, the Corporation Securities shall cease to be Excess Securities. For this purpose, any Transfer of Excess Securities not in accordance with the provisions of Parts IV or V of this Article Nine shall also be a Prohibited Transfer.

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(b) The corporation may require as a condition to the registration of the Transfer of any Corporation Securities or the payment of any distribution on any Corporation Securities that the proposed Transferee or payee furnish to the corporation all information reasonably requested by the corporation with respect to its direct or indirect ownership interests in such Corporation Securities. The corporation may make such arrangements or issue such instructions to its stock transfer agent as may be determined by the Board of Directors to be necessary or advisable to implement this Article Nine, including, without limitation, authorizing such transfer agent to require an affidavit from a Purported Transferee regarding such Person’s actual and constructive ownership of Stock and other evidence that a Transfer will not be prohibited by this Article Nine as a condition to registering any transfer.

Part V — Transfer to Agent

If the Board of Directors determines that a Transfer of Corporation Securities constitutes a Prohibited Transfer then, upon written demand by the corporation sent within thirty days of the date on which the Board of Directors determines that the attempted Transfer would result in Excess Securities, the Purported Transferee shall transfer or cause to be transferred any certificate or other evidence of ownership of the Excess Securities within the Purported Transferee’s possession or control, together with any Prohibited Distributions, to an agent designated by the Board of Directors (the “Agent”). The Agent shall thereupon sell to a buyer or buyers, which may include the corporation, the Excess Securities transferred to it in one or more arm’s-length transactions (on the public securities market on which such Excess Securities are traded, if possible, or otherwise privately); provided, however, that any such sale must not constitute a Prohibited Transfer and provided, further, that the Agent shall effect such sale or sales in an orderly fashion and shall not be required to effect any such sale within any specific time frame if, in the Agent’s discretion, such sale or sales would disrupt the market for the Corporation Securities or otherwise would adversely affect the value of the Corporation Securities. If the Purported Transferee has resold the Excess Securities before receiving the corporation’s demand to surrender Excess Securities to the Agent, the Purported Transferee shall be deemed to have sold the Excess Securities for the Agent, and shall be required to transfer to the Agent any Prohibited Distributions and proceeds of such sale, except to the extent that the corporation grants written permission to the Purported Transferee to retain a portion of such sales proceeds not exceeding the amount that the Purported Transferee would have received from the Agent pursuant to Part VI of this Article Nine if the Agent rather than the Purported Transferee had resold the Excess Securities.

Part VI — Application of Proceeds and Prohibited Distributions

The Agent shall apply any proceeds of a sale by it of Excess Securities and, if the Purported Transferee has previously resold the Excess Securities, any amounts received by it from a Purported Transferee, together, in either case, with any Prohibited Distributions, as follows: (a) first, such amounts shall be paid to the Agent to the extent necessary to cover its costs and expenses incurred in connection with its duties hereunder; (b) second, any remaining amounts shall be paid to the Purported Transferee, up to the amount paid by the Purported Transferee for the Excess Securities (or the fair market value at the time of the Transfer, in the event the purported Transfer of the Excess Securities was, in whole or in part, a gift, inheritance or similar Transfer) which amount shall be determined at the discretion of the Board of Directors; and (c) third, any remaining amounts shall be paid to one or more organizations qualifying under section 501(c)(3) of the Code (or any comparable successor provision) selected by the Board of Directors. The Purported Transferee of Excess Securities shall have no claim, cause of action or any other recourse whatsoever against any transferor of Excess Securities. The Purported Transferee’s sole right with respect to such shares shall be limited to the amount payable to the Purported Transferee pursuant to this Part VI of Article Nine. In no event shall the proceeds of any sale of Excess Securities pursuant to this Part VI of Article Nine inure to the benefit of the corporation or the Agent, except to the extent used to cover costs and expenses incurred by Agent in performing its duties hereunder.

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Part VII — Modification Of Remedies For Certain Indirect Transfers

In the event of any Transfer which does not involve a transfer of securities of the corporation within the meaning of Delaware law (“Securities,” and individually, a “Security”) but which would cause a 4.95-percent Stockholder to violate a restriction on Transfers provided for in this Article Nine, the application of Parts V and VI of this Article Nine shall be modified as described in this Part VII of this Article Nine. In such case, no such 4.95-percent Stockholder shall be required to dispose of any interest that is not a Security, but such 4.95-percent Stockholder and/or any Person whose ownership of Securities is attributed to such 4.95-percent Stockholder shall be deemed to have disposed of and shall be required to dispose of sufficient Securities (which Securities shall be disposed of in the inverse order in which they were acquired) to cause such 4.95-percent Stockholder, following such disposition, not to be in violation of this Article Nine. Such disposition shall be deemed to occur simultaneously with the Transfer giving rise to the application of this provision, and such number of Securities that are deemed to be disposed of shall be considered Excess Securities and shall be disposed of through the Agent as provided in Parts V and VI of this Article Nine, except that the maximum aggregate amount payable either to such 4.95-percent Stockholder, or to such other Person that was the direct holder of such Excess Securities, in connection with such sale shall be the fair market value of such Excess Securities at the time of the purported Transfer. All expenses incurred by the Agent in disposing of such Excess Stock shall be paid out of any amounts due such 4.95-percent Stockholder or such other Person. The purpose of this Part VII of Article Nine is to extend the restrictions in Part II and V of this Article Nine to situations in which there is a 4.95-percent Transaction without a direct Transfer of Securities, and this Part VII of Article Nine, along with the other provisions of this Article Nine, shall be interpreted to produce the same results, with differences as the context requires, as a direct Transfer of Corporation Securities.

Part VIII — Legal Proceedings; Prompt Enforcement

If the Purported Transferee fails to surrender the Excess Securities or the proceeds of a sale thereof to the Agent within thirty days from the date on which the corporation makes a written demand pursuant to Part V of this Article Nine (whether or not made within the time specified in Part V of this Article Nine), then the corporation may take such actions as it deems appropriate to enforce the provisions hereof, including the institution of legal proceedings to compel the surrender. Nothing in this Part VIII of Article Nine shall (1) be deemed inconsistent with any Transfer of the Excess Securities provided in this Article Nine being void ab initio, (2) preclude the corporation in its discretion from immediately bringing legal proceedings without a prior demand or (3) cause any failure of the corporation to act within the time periods set forth in Part V of this Article Nine to constitute a waiver or loss of any right of the corporation under this Article Nine. The Board of Directors may authorize such additional actions as it deems advisable to give effect to the provisions of this Article Nine.

Part IX — Liability

To the fullest extent permitted by law, any stockholder subject to the provisions of this Article Nine who knowingly violates the provisions of this Article Nine and any Persons controlling, controlled by or under common control with such stockholder shall be jointly and severally liable to the corporation for, and shall indemnify and hold the corporation harmless against, any and all damages suffered as a result of such violation, including but not limited to damages resulting from a reduction in, or elimination of, the corporation’s ability to utilize its Tax Benefits, and attorneys’ and auditors’ fees incurred in connection with such violation.

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Part X — Obligation to Provide Information

As a condition to the registration of the Transfer of any Stock, any Person who is a beneficial, legal or record holder of Stock, and any proposed Transferee and any Person controlling, controlled by or under common control with the proposed Transferee, shall provide such information as the corporation may request from time to time in order to determine compliance with this Article Nine or the status of the Tax Benefits of the corporation.

Part XI — Legends

The Board of Directors may require that any certificates issued by the corporation evidencing ownership of  shares of Stock that are subject to the restrictions on transfer and ownership contained in this Article Nine bear the following legend:

“THE CERTIFICATE OF INCORPORATION, AS AMENDED (THE “CERTIFICATE OF INCORPORATION”), OF THE CORPORATION CONTAINS RESTRICTIONS PROHIBITING THE TRANSFER (AS DEFINED IN THE CERTIFICATE OF INCORPORATION) OF STOCK OF THE CORPORATION (INCLUDING THE CREATION OR GRANT OF CERTAIN OPTIONS, RIGHTS AND WARRANTS) WITHOUT THE PRIOR AUTHORIZATION OF THE BOARD OF DIRECTORS OF THE CORPORATION (THE “BOARD OF DIRECTORS”) IF SUCH TRANSFER AFFECTS THE PERCENTAGE OF STOCK OF THE CORPORATION (WITHIN THE MEANING OF SECTION 382 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) AND THE TREASURY REGULATIONS PROMULGATED THEREUNDER), THAT IS TREATED AS OWNED BY A 4.95 PERCENT STOCKHOLDER (AS DEFINED IN THE CERTIFICATE OF INCORPORATION). IF THE TRANSFER RESTRICTIONS ARE VIOLATED, THEN THE TRANSFER WILL BE VOID AB INITIO AND THE PURPORTED TRANSFEREE OF THE STOCK WILL BE REQUIRED TO TRANSFER EXCESS SECURITIES (AS DEFINED IN THE CERTIFICATE OF INCORPORATION) TO THE CORPORATION’S AGENT. IN THE EVENT OF A TRANSFER WHICH DOES NOT INVOLVE SECURITIES OF THE CORPORATION WITHIN THE MEANING OF THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE (“SECURITIES”) BUT WHICH WOULD VIOLATE THE TRANSFER RESTRICTIONS, THE PURPORTED TRANSFEREE (OR THE RECORD OWNER) OF THE SECURITIES WILL BE REQUIRED TO TRANSFER SUFFICIENT SECURITIES PURSUANT TO THE TERMS PROVIDED FOR IN THE CORPORATION’S CERTIFICATE OF INCORPORATION TO CAUSE THE 4.95 PERCENT STOCKHOLDER TO NO LONGER BE IN VIOLATION OF THE TRANSFER RESTRICTIONS. THE CORPORATION WILL FURNISH WITHOUT CHARGE TO THE HOLDER OF RECORD OF THIS CERTIFICATE A COPY OF THE CERTIFICATE OF INCORPORATION, CONTAINING THE ABOVE-REFERENCED TRANSFER RESTRICTIONS, UPON WRITTEN REQUEST TO THE CORPORATION AT ITS PRINCIPAL PLACE OF BUSINESS.”

The Board of Directors may also require that any certificates issued by the corporation evidencing ownership of shares of Stock that are subject to conditions imposed by the Board of Directors under Part III of this Article Nine also bear a conspicuous legend referencing the applicable restrictions.

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Part XII — Authority of Board of Directors

(a) The Board of Directors shall have the power to determine all matters necessary for assessing compliance with this Article Nine, including, without limitation, (1) the identification of 4.95-percent Stockholders, (2) whether a Transfer is a 4.95-percent Transaction or a Prohibited Transfer, (3) the Percentage Stock Ownership in the corporation of any 4.95-percent Stockholder, (4) whether an instrument constitutes a Corporation Security, (5) the amount (or fair market value) due to a Purported Transferee pursuant to Part VI of this Article Nine, and (6) any other matters which the Board of Directors determines to be relevant; and the good faith determination of the Board of Directors on such matters shall be conclusive and binding for all the purposes of this Article Nine. In addition, the Board of Directors may, to the extent permitted by law, from time to time establish, modify, amend or rescind by-laws, regulations and procedures of the corporation not inconsistent with the provisions of this Article Nine for purposes of determining whether any Transfer of Corporation Securities would jeopardize or endanger the corporation’s ability to preserve and use the Tax Benefits and for the orderly application, administration and implementation of this Article Nine.

(b) Nothing contained in this Article Nine shall limit the authority of the Board of Directors to take such other action to the extent permitted by law as it deems necessary or advisable to protect the corporation and its stockholders in preserving the Tax Benefits. Without limiting the generality of the foregoing, in the event of a change in law making one or more of the following actions necessary or desirable, the Board of Directors may, by adopting a written resolution, (1) accelerate or extend the Expiration Date, (2) modify the ownership interest percentage in the corporation or the Persons or groups covered by this Article Nine, (3) modify the definitions of any terms set forth in this Article Nine or (4) modify the terms of this Article Nine as appropriate, in each case, in order to prevent an ownership change for purposes of Section 382 of the Code as a result of any changes in applicable Treasury Regulations or otherwise; provided, however, that the Board of Directors shall not cause there to be such acceleration, extension or modification unless it determines, by adopting a written resolution, that such action is reasonably necessary or advisable to preserve the Tax Benefits or that the continuation of these restrictions is no longer reasonably necessary for the preservation of the Tax Benefits. Stockholders of the corporation shall be notified of such determination through a filing with the Securities and Exchange Commission or such other method of notice as the Secretary of the corporation shall deem appropriate.

(c) In the case of an ambiguity in the application of any of the provisions of this Article Nine, including any definition used herein, the Board of Directors shall have the power to determine the application of such provisions with respect to any situation based on its reasonable belief, understanding or knowledge of the circumstances. In the event this Article Nine requires an action by the Board of Directors but fails to provide specific guidance with respect to such action, the Board of Directors shall have the power to determine the action to be taken so long as such action is not contrary to the provisions of this Article Nine. All such actions, calculations, interpretations and determinations which are done or made by the Board of Directors in good faith shall be conclusive and binding on the corporation, the Agent, and all other parties for all other purposes of this Article Nine. The Board of Directors may delegate all or any portion of its duties and powers under this Article Nine to a committee of the Board of Directors as it deems necessary or advisable and, to the fullest extent permitted by law, may exercise the authority granted by this Article Nine through duly authorized officers or agents of the corporation. Nothing in this Article Nine shall be construed to limit or restrict the Board of Directors in the exercise of its fiduciary duties under applicable law.

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Part XIII — Reliance

To the fullest extent permitted by law, the corporation and the members of the Board of Directors shall be fully protected in relying in good faith upon the information, opinions, reports or statements of the chief executive officer, the chief financial officer, the chief accounting officer or the corporate controller of the corporation and the corporation’s legal counsel, independent auditors, transfer agent, investment bankers or other employees and agents in making the determinations and findings contemplated by this Article Nine. The members of the Board of Directors shall not be responsible for any good faith errors made in connection therewith. For purposes of determining the existence and identity of, and the amount of any Corporation Securities owned by any stockholder, the corporation is entitled to rely on the existence and absence of filings of Schedule 13D or 13G under the Securities and Exchange Act of 1934, as amended (or similar filings), as of any date, subject to its actual knowledge of the ownership of Corporation Securities.

Part XIV — Benefits of This Article Nine

Nothing in this Article Nine shall be construed to give to any Person other than the corporation or the Agent any legal or equitable right, remedy or claim under this Article Nine. This Article Nine shall be for the sole and exclusive benefit of the corporation and the Agent.

Part XV — Severability

The purpose of this Article Nine is to facilitate the corporation’s ability to maintain or preserve its Tax Benefits. If any provision of this Article Nine or the application of any such provision to any Person or under any circumstance shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision of this Article Nine.

Part XVI — Waiver

With regard to any power, remedy or right provided herein or otherwise available to the corporation or the Agent under this Article Nine, (i) no waiver will be effective unless expressly contained in a writing signed by the waiving party; and (ii) no alteration, modification or impairment will be implied by reason of any previous waiver, extension of time, delay or omission in exercise, or other indulgence.

FOURTH: At the Annual Meeting of Stockholders on March 17, 2010, held pursuant to the notice required by Section 222 of the Delaware General Corporation Law, not less than a majority of the outstanding shares of stock entitled to vote thereon approved the foregoing amendment to add an Article Nine to the Company’s Second Restated Certificate of Incorporation.

FIFTH: Both of the aforementioned amendments were duly adopted in accordance with the provisions of Section 242 of the Delaware General Corporation Law.

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IN WITNESS WHEREOF, the Company has caused its corporate seal to be hereunto affixed and this certificate to be signed, under penalty of perjury, by Robert I. Toll, its Chairman and Chief Executive Officer, and attested by Michael I. Snyder, its Secretary, on March 17, 2010, and does confirm that this Certificate of Amendment is the act and deed of the Company and that the statements made herein are true.

/s/ Robert I. Toll
Robert I. Toll
Chairman of the Board and Chief Executive Officer

ATTEST: /s/ Michael I. Snyder
                  Michael I. Snyder
                  Secretary

 

CERTIFICATE OF AMENDMENT
TO
SECOND RESTATED CERTIFICATE OF INCORPORATION
OF
TOLL BROTHERS, INC.
Pursuant to Section 242 of the General Corporation Law of the State of Delaware

TOLL BROTHERS, INC., a corporation organized and existing under and by virtue of the Delaware General Corporation Law (the “Company”), DOES HEREBY CERTIFY THAT:

FIRST: At a meeting of the Board of Directors of the Company held on December 15, 2010, the Board of Directors of the Company adopted resolutions that declared advisable and recommended to the stockholders of the Company the following amendment to Article Five, Part III of the Company’s Second Restated Certificate of Incorporation, as amended, and directed that such amendment be submitted to the Company’s stockholders for their approval at the Annual Meeting of Stockholders on March 16, 2011.

Article Five, Part III of the Company’s Second Restated Certificate of Incorporation, as amended, is amended to read in its entirety as follows:

PART III – CLASSIFICATION OF THE BOARD

At each annual meeting of stockholders beginning at the 2012 annual meeting, Directors whose terms expire at that meeting (or such Directors’ successors) shall be elected for a one-year term. Accordingly, at the 2012 annual meeting of stockholders, the Directors whose terms expire at that meeting (or such Directors’ successors) shall be elected to hold office for a one-year term expiring at the 2013 annual meeting of the stockholders; at the 2013 annual meeting of stockholders, the Directors whose terms expire at that meeting (or such Directors’ successors) shall be elected to hold office for a one-year term expiring at the 2014 annual meeting of the stockholders; and at the 2014 annual meeting of stockholders and at each annual meeting of stockholders thereafter, all Directors shall be elected to hold office for a one-year term expiring at the next annual meeting of stockholders.

SECOND: At the Annual Meeting of Stockholders on March 16, 2011, held pursuant to the notice required by Section 222 of the Delaware General Corporation Law, not less than 66 2/3% of the outstanding shares of stock of the Company entitled to vote thereon approved the foregoing amendment to Article Five, Part III of the Company’s Second Restated Certificate of Incorporation, as amended.

THIRD: The foregoing amendment was duly adopted in accordance with the provisions of Section 242 of the Delaware General Corporation Law.

[Execution page follows]

 

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IN WITNESS WHEREOF, the Company has caused its corporate seal to be hereunto affixed and this certificate to be signed, under penalty of perjury, by Douglas C. Yearley, Jr., its Chief Executive Officer, and attested by Michael I. Snyder, its Secretary, on March 16, 2011, and does confirm that this Certificate of Amendment is the act of the Company and that the statements made herein are true.

TOLL BROTHERS, INC.

By: /s/ Douglas C. Yearley, Jr.   
Douglas C. Yearley, Jr.
Chief Executive Officer

ATTEST:   By: /s/ Michael I. Snyder          
                    Michael I. Snyder
                    Secretary

[End]