TOL DEF 14A Report ended March 10, 2020

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1.	To elect the twelve directors nominated by the Board of Directors of the Company (the “Board” or the "Board of Directors") and named in the proxy statement to hold office until the 2021 Annual Meeting of Stockholders and until their respective successors are duly elected and qualified.

2.	To ratify, in a non-binding vote, the re-appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the 2020 fiscal year.

3.	To approve, in an advisory and non-binding vote, the compensation of the Company’s named executive officers as disclosed in the proxy statement.

4.	To transact such other business as may properly come before the Meeting or any adjournment or postponement thereof.

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•	Indicate your votes on your proxy card or voting instruction card;

•	Mark the box on your proxy card or voting instruction card indicating your intention to attend the Meeting;

•	Return the proxy card or voting instruction card to the address indicated; and

•	Follow the admission policies set forth above.

•	If you are a "record holder," bring your proxy card with you to the Meeting;

•	If you hold your shares in "street name," contact your bank or broker to obtain a written legal proxy form in order to vote your shares at the Meeting;

•	Send written notice* of your intention to attend the Meeting to the Company's headquarters by February 24, 2020 to the attention of Kevin J. Coen, Secretary; and

•	Follow the admissions policies set forth above.

*

Written notice should include: (1) your name, complete mailing address and phone number; (2) if you are a beneficial holder, evidence of your ownership; and (3) if you are a beneficial holder who is not a natural person and will be naming a representative to attend on your behalf, the name, complete mailing address and phone number of that individual. If you do not provide the requested information by February 24, 2020 , please be prepared to show it at the entrance to the Meeting in order to gain admission. Failure to provide such information either in advance or at the Meeting may result in non-admission to the Meeting.

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Expanding our geographic footprint into four new states and seven new markets. With the acquisition of Sharp Residential, LLC, we entered metro Atlanta and with the acquisition of Sabal Homes LLC, we entered Charleston, Greenville and Myrtle Beach, South Carolina. Both companies offer a wide range of price points to their customers. We also opened our first communities in Salt Lake City, Utah and Portland, Oregon. The Company now operates in over 50 markets in 23 states and the District of Columbia.

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•

Continuing to expand our product lines and broadening our price points . Our for-sale communities now include single-family homes, attached products ranging from two- and three-plex to high-density multi-plex buildings of 30-60 residences; and mid- and high-rise luxury urban condominium communities of up to several hundred residences. In addition, we have built a significant rental platform that develops upscale rental apartments and student housing in both suburban and urban locations across the country. Most recently, we entered the purpose-built single-family rental market in partnership with an experienced operator and a major financial institution.

•

Maintaining a strong balance sheet with significant liquidity to support our growth and ensure access to long-term, attractively priced capital. We ended fiscal year 2019 with $1.29 billion in cash and cash equivalents and had $1.73 billion available under our bank revolving credit facility. During fiscal 2019 , we increased our bank revolving credit facility from $1.295 billion to $1.905 billion. We extended the facility's maturity to five years along with that of our $800.0 million term loan facility. We also raised $400.0 million of ten-year 3.8% debt in the public capital markets, a portion of which we later used to retire $250.0 million of more expensive maturing public debt.

•	Remaining focused on improving capital efficiency . While maintaining a strong balance sheet and ample liquidity to grow our business, we remained focused on improving capital efficiency through, among other initiatives, our land acquisition process.

•	Returning capital to stockholders . In fiscal 2019 , we repurchased $233.5 million of stock and paid dividends totaling $0.44 per share. In December 2019 , our Board of Directors renewed its authorization for us to repurchase up to 20.0 million of our outstanding shares.

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(1)

Shares issuable pursuant to restricted stock units (“RSUs”) vesting and options exercisable within 60 days after the Record Date are deemed to be beneficially owned. Accordingly, the information presented above includes the following number of shares of common stock underlying RSUs and options held by the following individuals, and all directors and executive officers as a group: Mr. Toll, 830,872 shares; Mr. Boehne, 58,889 shares; Mr. Braemer, 51,340 shares; Ms. Garvey, 5,811 shares; Mr. Marbach, 60,073 shares; Mr. McLean, 7,881 shares; Mr. Novick, 24,889 shares; Mr. Pritchett, 1,438 shares; Mr. Shapiro, 58,389 shares; Mr. Yearley, 1,158,382 shares; Mr. Hartman, 332,310 shares; Mr. Connor, 209,956 shares; and all directors and executive officers as a group, 2,890,575 shares.

(2)

BlackRock, Inc. (“BlackRock”) filed a Schedule 13G/A dated February 11, 2019, which states that BlackRock has sole voting power with respect to 13,938,317 shares and sole dispositive power with respect to 14,660,748 shares. According to the Schedule 13G/A filed by BlackRock, various persons have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares, and no one person’s interest in the Company's common stock was more than 5% of the total outstanding common stock, as of the date the Schedule 13G/A was filed.

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(3)

The Vanguard Group ("Vanguard") filed a Schedule 13G dated February 12, 2019, which states that Vanguard has sole dispositive power with respect to 11,919,299 shares, sole voting power with respect to 71,758 shares, shared dispositive power with respect to 77,267 shares, and shared voting power with respect to 18,501 shares. According to the Schedule 13G/A filed by Vanguard, no one person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, with respect to, and no one person’s interest in the Company's common stock was more than, 5% of the total outstanding common stock, as of the date the Schedule 13G/A was filed.

(4)	Amount includes 191,397 shares held by trusts for Mr. Toll’s children and grandchildren, of which Mrs. Jane Toll, Mr. Toll’s spouse, is a trustee with voting and dispositive power and as to which he disclaims beneficial ownership. Amount includes 4,490,316 shares pledged to financial institutions to secure personal obligations of Mr. Toll.

(5)	Amount includes an aggregate of 9,400 shares beneficially owned by individual retirement accounts (“IRAs”) for the benefit of Mr. Marbach and his wife. Mr. Marbach disclaims beneficial ownership of the 4,700 shares held by his wife’s IRA.

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(1)	“Audit Fees” include fees billed for (a) the audit of the Company and its consolidated subsidiaries, (b) the audit of the Company’s internal control over financial reporting, (c) the review of quarterly financial information, and (d) the issuance of consents and comfort letters to underwriters in various filings with the Securities and Exchange Commission ("SEC").

(2)	“Audit-Related Fees” include fees for transaction advisory services related to an acquisition and the use of the independent auditors’ technical accounting research tool.

(3)	“Tax Fees” include fees billed for consulting on tax planning matters and tax compliance matters.

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(1)

Amount includes 4,780,000 shares and 2,006,000 shares underlying stock options and RSUs, respectively, outstanding as of October 31, 2019 . The amount of performance-based RSUs ("PRSUs"), which is included in the RSU amount, reflects the maximum number of shares that could be issued under the fiscal 2019 and 2018 awards as further described under "Fiscal 2019 Long-Term Incentive Compensation - Performance-Based RSUs" on page 39.

(2)	The weighted-average exercise price does not take into account 2,006,000 shares underlying RSUs outstanding as of October 31, 2019 .

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•	presiding over all executive sessions and other meetings of the independent directors;

•	acting as principal liaison between the Chairman and CEO and the non-executive directors;

•	leading the process for evaluating the Board of Directors and the committees of the Board of Directors;

•	participating in the communication of sensitive issues to the other directors;

•	performing such other duties as the Board of Directors may deem necessary and appropriate from time to time; and

•	serving as the director whom stockholders may contact.

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(1)

the director is, or has been within the last three years, our employee; or an immediate family member (defined as including a person’s spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law, and anyone, other than domestic employees, who shares such person’s home) of such director is, or has been within the last three years, one of our executive officers;

(2)	the director has received, or has an immediate family member who has received, during any twelve-month period within the last three years, more than $120,000 per year in direct compensation from us, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service);

(3)

(a) the director is a current partner or employee of our external auditor; (b) the director has an immediate family member who is a current partner of such firm; (c) the director has an immediate family member who is a current employee of such firm and personally works on our audit; or (d) the director or an immediate family member was, within the last three years, a partner or employee of such firm and personally worked on our audit within that time;

(4)	the director or an immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of our present executive officers at the same time serves or served on that company’s compensation committee;

(5)	the director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to or received payments from us for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1.0 million or two percent of such other company’s consolidated gross revenues; or

(6)	the director or an immediate family member is, or within the past three years has been, an affiliate of another company in which, in any of the last three years, any of our present executive officers directly or indirectly either: (a) owned more than five percent of the total equity interests of such other company, or (b) invested or committed to invest more than $900,000 in such other company.

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•	discharging the Board’s responsibilities relating to the quality and integrity of our financial statements;

•	overseeing our compliance with legal and regulatory requirements;

•	overseeing risk oversight and assessment;

•	the appointment, qualifications, performance and independence of the independent registered public accounting firm;

•	pre-approval of all audit engagement fees and terms, all internal-control related services, and all permitted non-audit engagements (including the terms thereof) with the independent auditor;

•	review of the performance of our internal audit function; and

•	management of the Company’s significant risks and exposures, including strategic, operational, compliance, and reporting risks.

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•	establishing our compensation philosophy and objectives;

•	overseeing the implementation and development of our compensation programs;

•	annually reviewing and approving corporate goals and objectives relevant to the compensation of the CEO;

•	evaluating the performance of the CEO in light of those goals and objectives and determining the CEO’s compensation level based on these evaluations;

•	reviewing and approving all elements and levels of compensation for our executive officers and any other officers recommended by the Board;

•	discussing the results of the stockholder advisory vote on Say on Pay;

•	making recommendations to the Board with respect to incentive compensation plans and equity-based plans;

•	administering (in some cases, along with the Board) all of our stock-based compensation plans, as well as the Company's other incentive compensation plans for executive officers and its Supplemental Executive Retirement Plan ("SERP");

•	reviewing and approving, or making recommendations to the full Board regarding, equity-based awards; and

•	reviewing our regulatory compliance with respect to compensation matters.

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•	identifying individuals qualified to become members of the Board and recommending to the Board the nominees for election to the Board;

•	establishing procedures for submission of recommendations or nominations of candidates to the Board by stockholders;

•	evaluating from time to time the appropriate size of the Board and recommending any changes in the composition of the Board so as to best reflect our objectives;

•	evaluating and making recommendations to the Board with respect to the compensation of the non-executive management directors;

•	adopting and reviewing, at least annually, corporate governance guidelines consistent with the requirements of the NYSE;

•	reviewing the Board’s committee structure;

•	reviewing proposed changes to our governance instruments;

•	reviewing and recommending director orientation and continuing orientation programs; and

•	considering potential conflicts of interest of directors and NEOs and reviewing and approving related person transactions.

•	The Board of Directors held four meetings during fiscal 2019 .

•	All directors attended 75% or more of the meetings of the Board and Board Committees on which they served.

•	Our independent directors hold separate meetings. Edward G. Boehne, our Lead Independent Director, acts as chair at meetings of the independent directors. During fiscal 2019 , the independent directors met four times.

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•	Board Retainer . The principal form of compensation for non-executive directors for their service as directors is an annual retainer (the "Board Retainer"), consisting of a combination of cash and restricted stock units ("Director RSUs"). For fiscal 2019 , the aggregate value of the Board Retainer was $225,000 and was comprised of:

•	Cash . Each non-executive director receives one-third of the Board Retainer in cash.

•	Equity . Each non-executive director receives Director RSUs having a grant date fair value of two-thirds of the Board Retainer, vesting in equal amounts over two years. New non-executive directors are first granted equity in the December following their appointment to the Board and receive a pro-rated grant reflecting their service for the year.

•

Committee Retainer . Each member of the Audit Committee receives annually a combination of cash and equity with a grant date fair value of $25,000 , and each member of the Compensation Committee and Governance Committees receives annually a combination of cash and equity with a grant date fair value of $ 20,000 . In each case, one-third of these amounts are delivered in cash and two-thirds of these amounts are delivered in Director RSUs. The Chair of each of these committees receives an additional annual cash retainer of $10,000 .

•	Attendance at Board and Committee Meetings . Directors, Committee Chairs and Committee members do not receive any additional compensation for attendance at Board or Committee meetings.

•	Lead Independent Director . The Lead Independent Director receives annually $35,000 in cash for his services in that capacity.

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(1)	Amounts shown include the cash portion of each non-executive director's Board Retainer and applicable committee, chair and lead director retainers.

(2)

Director RSUs are typically granted on a date within the last 15 days of December that is determined in advance by the Board. Director RSUs vest in equal annual installments over two years, and shares underlying Director RSUs are generally deliverable 30 days after the vesting of the second installment. Director RSUs earn dividend equivalents at the same time and in the same amount as dividends paid on the Company’s common stock; dividend equivalents are subject to the same vesting, settlement, and other terms and conditions as the Director RSUs to which the dividend equivalents relate. Upon a change of control of the Company or upon the death, disability, or retirement of the director, Director RSUs will vest immediately, and shares underlying Director RSUs will be deliverable 30 days after vesting (subject to a six-month delay in delivery if required to comply with Section 409A of the tax code). Starting with the Director RSUs granted in December 2019, accelerated vesting of Director RSUs will occur following a change of control only upon the Director ceasing to be a director of the Company.

(3)

The non-executive directors held the following amounts of outstanding unvested RSUs at October 31, 2019 : Mr. Boehne, 6,879 units; Mr. Braemer, 6,057 units, Ms. Garvey, 6,607 units; Mr. Marbach, 7,156 units; Mr. McLean, 6,330 units; Mr. Novick, 6,879 units; Mr. Pritchett, 2,877 units; Mr. Shapiro, 6,879 units; and Mr. Toll, 61,097 units. The directors held the following amounts of outstanding vested RSUs at October 31, 2019 : Mr. Boehne, 1,741 units; Mr. Braemer, 1,533 units; Ms. Garvey, 1,672 units; Mr. Marbach, 1,811 units; Mr. McLean, 1,602 units; Mr. Novick, 1,741 units; Mr. Shapiro, 1,741 units; and Mr. Toll, 66,949 units.

(4)	The following non-executive directors held unexercised stock options to acquire the following amounts of the Company's common stock at October 31, 2019 : Mr. Boehne, 52,838 shares; Mr. Braemer, 46,012 shares;

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(5)	Ms. Grimes was elected as a non-executive director on March 12, 2019 at the 2019 Annual Meeting of Stockholders. Ms. Grimes was first granted an award of Director RSUs on December 18, 2019, reflecting our practice of granting a pro-rated equity grant in respect of a new non-executive director's first year of service.

(6)

Separate from any fees earned by Mr. Toll in his capacity as a non-executive director, during fiscal 2019 , Mr. Toll earned $1,500,000 in consulting fees and received certain perquisites and personal benefits pursuant to the Advisory Agreement described above. These perquisites and personal benefits included the use of Company office space and administrative services, of which the incremental cost to the Company is included in the "All Other Compensation" column. The aggregate value of each perquisite or other personal benefit exceeding the greater of $25,000 or 10% of the total amount of perquisites and personal benefits for Mr. Toll is as follows (based on the allocated compensation and benefit cost for the applicable support personnel):

(7)	The increase reported in the actuarial value of Mr. Toll's SERP benefits is due solely to a change in the discount rate used in such valuation.

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•	Delivery of 8,107 homes in fiscal 2019 , which exceeded internal projections and analyst consensus estimates.

•	The Company entered four new states and seven new markets in fiscal 2019 , including Atlanta, Georgia through the acquisition of Sharp Residential, LLC, and Charleston, Greenville, and Myrtle Beach, South Carolina through the acquisition of Sabal Homes LLC. The Company also opened its first communities in Salt Lake City, Utah, and Portland, Oregon.

•	Management successfully navigated a challenging market during the first half of the fiscal year while continuing to diversify the Company's price points and product lines, including by expanding its affordable luxury and active adult communities.

•	The Company successfully transitioned the Chief Operating Officer role to two new co-Chief Operating Officers and continued to refresh its senior management team with recent appointments of a new chief marketing officer, president of TBI Mortgage and chief accounting officer.

•	In connection with the Chief Operating Officer transition, the Company realigned its regional operating structure and appointed three new Regional Presidents and four new Group Presidents.

•	The Company also made progress implementing new enterprise resource planning and customer resource management systems.

•	The Company continued to refine its business portfolio by completing the sale of its golf business and entering the purpose-built single-family rental market in partnership with an experienced operator and a major financial institution.

•

The Company responsibly managed its balance sheet and liquidity. During fiscal 2019 , the Company increased its bank revolving credit facility from $1.295 billion to $1.905 billion and extended its maturity to five years along with that of our $800.0 million term loan facility. The Company also raised $400.0 million of ten-year 3.8% debt in the public capital markets, a portion of which was later used to retire $250.0 million of more expensive maturing public debt.

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(1)	Reflects base salary earned during fiscal 2019 . Base salary is paid on a calendar year basis. Mr. Yearley's annual base salary was increased to $1,050,000 and Mr. McDonald's to $700,000 effective January 1, 2019.

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(1)

The mix of PRSUs and stock options reflected in the charts above differs from the 70% / 30% mix approved by the Compensation Committee for Messrs. Yearley and Connor primarily because, when determining the number of stock options that are subject to an award, the Company values the stock options for such purpose based on relative grant date fair values of prior stock option awards, as described further under "Fiscal 2019 Long Term Incentive Awards - Stock Options" on page 41.

•	PTI Metric , which captures the overall profitability of the enterprise before taxes and includes the results of our joint ventures and non-homebuilding activities, as well as SG&A expense;

•	Margin Metric , which measures the gross margin of our homebuilding operations and reflects our ability to profitably and efficiently execute on this core business; and

•	Units Metric , which measures the number of homes that are delivered to home buyers during the fiscal year and is a measure of our ability to grow our core business.

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(1)

Each performance metric had a threshold level that, if achieved, would earn 75% of the Ops PRSUs allocated to that metric; a target level that, if achieved, would earn 100% of the Ops PRSUs allocated to that metric; and a maximum level that, if achieved, would earn 150% of the Ops PRSUs allocated to that metric. To the extent that actual performance results fell between these levels, the Ops PRSUs earned would be determined by linear interpolation between those levels. If the minimum threshold performance level of 80% of target performance was not achieved for any individual metric, none of the Ops PRSUs would have been earned for that metric.

(2)	The following items, to the extent disclosed in a press release or conference call, are excluded from these performance metrics:

•	Restructuring and severance costs pursuant to a plan approved by the Board, CEO, and/or President and Chief Operating Officer

•	Gains or losses from litigation or claims, natural disasters, or terrorism

•	Effect of changes in laws, regulations, or accounting principles

•	The gain or loss from the sale or discontinuance of a business segment, division, or unit and the corresponding budgeted, unrecognized pre-tax income and margin for this business segment, division, or unit

•	Write-down or impairment of assets or joint venture investments

•	Stock-based compensation overages or underages compared to budget

•	Expense of an acquisition

•	Gains or losses from derivative transactions or the early retirement of debt

(3)	Includes a gain of approximately $23 million related to the sale of the Company's golf business, which the Compensation Committee determined was appropriate to include in both the annual incentive plan and Ops PRSU results as the sale had been included in the target setting process.

(4)	Excludes interest expense in homebuilding cost of revenues

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(1)	The TSR Multiplier is determined by linear interpolation for any achievement of the Relative TSR Percentile Rank which falls between the target percentages above.

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•	shares of stock owned by the executive officer or director, including shares held in a trust controlled by the executive officer or director, by a spouse or by minor children that are deemed beneficially owned by the executive officer or director under Rule 13d-3 under the Exchange Act;

•	one-third of the shares underlying vested stock options that were “in the money” at the beginning of the fiscal year of review; and

•	shares of stock underlying vested performance stock units, RSUs, and restricted stock awards, regardless of provisions relating to delivery.

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•	the percentage of Mr. Toll's equity holdings that are currently pledged;

•	the percentage of the Company’s outstanding class of equity securities represented by the number of securities of that class being pledged;

•	the market value of the securities being pledged and the total market value of the Company’s outstanding equity securities;

•	the historical trading volume of the Company’s equity securities; and

•	any compelling needs of Mr. Toll justifying the pledge transaction under the circumstances.

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(1)

These columns present the aggregate grant date fair value of RSUs, PRSUs and stock options, respectively, granted in the indicated fiscal year, calculated in accordance with ASC 718 utilizing the assumptions discussed in Note 10 in the Notes to Consolidated Financial Statements in the Form 10-K, excluding the effect of estimated forfeitures. The amounts shown in these columns do not reflect compensation actually received by the NEOs. The actual value, if any, that an NEO may realize from an award is contingent upon the satisfaction of the conditions to vesting in that award, including, for PRSUs, any applicable performance conditions, and, for stock options, upon the excess of the share price over the exercise price, if any, on the date the stock options are exercised. Thus, the value, if any, eventually realized by the NEOs is unlikely to equal amounts shown in these columns.

(2)

The annual incentive bonuses for Messrs. Yearley, Hartman and Connor for fiscal 2019 were earned based on target bonus amounts established by the Compensation Committee for PTI Metric performance (70% of bonus amount) and its qualitative assessment of individual and Company performance (30% of bonus amount) as more fully described under "Cash Compensation Decisions—Fiscal 2019 Annual Incentive Bonus" starting on page 36.

(3)

The amounts in this column represent the increase in the actuarial present value of accumulated benefits under the SERP for each NEO and the amount of above-market interest earned on their respective balances, if applicable, in the Deferred Compensation Plan and the 2015 Plan. Mr. McDonald did not participate in the 2015 Plan during the fiscal years indicated in the table above. The amounts attributed to the increase or decrease in actuarial present value of SERP benefits and above-market interest on deferred compensation are as follows (see also the Pension Benefits During Fiscal 2019 table on page 56). Although an amount is presented for Mr. McDonald in these tables, Mr. McDonald relinquished any entitlement to benefits under the SERP in connection with his resignation.

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(4)	Fiscal 2019 “All Other Compensation” consists of:

(5)	Mr. Hartman stepped down from the role of President and Chief Operating Officer effective October 31, 2019 and retired from the Company on December 31, 2019.

(6)	Mr. McDonald resigned from the Company effective December 31, 2019.

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(1)

The Compensation Committee met on January 28, 2019 to make determinations for our NEOs with respect to Ops PRSU grants for our NEOs for fiscal 2019 . All other grants of equity compensation under our annual long-term incentive compensation program were made on December 20, 2018 , which is consistent with our practice of awarding equity compensation described under “Fiscal 2019 Long-Term Incentive Compensation” on page 38.

(2)

Reflects PRSUs the Compensation Committee awarded to our NEOs under the 2014 Stock Incentive Plan for Employees (the "2014 SIP"). PRSUs earn dividend equivalents at the same time and in the same amount as dividends paid on the Company’s common stock; dividend equivalents are subject to the same vesting, settlement, and other terms and conditions as the PRSUs to which the dividend equivalents relate. See “Fiscal 2019 Long-Term Incentive Compensation—Performance-Based RSUs” on page 39 for further information.

(3)	See “Fiscal 2019 Long-Term Incentive Compensation—Stock Options" on page 41 for a discussion of these stock option grants, which were awarded under the 2014 SIP. The exercise price of the stock options granted in fiscal 2019 is the closing price of the Company's common stock on the grant date.

(4)

Amount represents the aggregate grant date fair value of PRSUs and stock options, respectively, granted in fiscal 2019 , calculated in accordance with ASC 718 utilizing the assumptions discussed in Note 10 in the Notes to Consolidated Financial Statements in the Form 10-K. The calculation of these amounts disregards the estimate of forfeitures related to time-based vesting conditions. With respect to PRSUs, the estimate of the grant date fair value is determined in accordance with ASC 718 assuming the vesting of 100% of the PRSUs awarded.

(5)

See "Fiscal 2019 Annual Incentive Bonus" on page 36. The formulaic portion of the annual incentive award had a threshold level that, if achieved, would earn 75% of target; a target level that, if achieved, would have earned 100% of target; and a maximum level that, if achieved, would have earned 150% of target. To the extent that actual performance results fell between these levels, the amount earned would have been determined by linear interpolation between those levels. If the minimum threshold performance level of 80% was not achieved, no amount would have been earned with respect to the formulaic portion of the award.

(6)	The annual incentive bonuses for fiscal 2019 were earned based on target bonus amounts established by the Compensation Committee on January 28, 2019 for PTI Metric performance (70% of bonus amount) and its qualitative assessment of individual and Company performance (30% of bonus amount), as more fully described under “Fiscal 2019 Annual Incentive Bonus” on page 36.

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(1)	100% of the stock options vested on December 18, 2019.

(2)	50% of the stock options vest on each of December 20, 2019 and 2020.

(3)	33.33% of the stock options vest on each of December 18, 2019, 2020, and 2021.

(4)	25% of the stock options vest on each of December 20, 2019, 2020, 2021, and 2022.

(5)	100% of these Ops PRSUs vested on December 18, 2019.

(6)	50% of these Ops PRSUs vest on each of December 20, 2019 and 2020.

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(7)	33.33% of these Ops PRSUs vest on each of December 18, 2019, 2020, and 2021.

(8)	25% of these Ops PRSUs vest on each of January 28, 2020, 2021, 2022, and 2023.

(9)	100% of these TSR PRSUs vest on October 31, 2020. Based on TSR PRSU performance through October 31, 2019, amounts are shown assuming threshold number of shares (50% of target) are delivered.

(10)	100% of these TSR PRSUs vest on October 31, 2021. Based on TSR PRSU performance through October 31, 2019, amounts are shown assuming threshold number of shares (50% of target) are delivered.

(11)	100% of these RSUs vested on January 1, 2020.

(12)	These RSUs were forfeited.

(13)	50% of these RSUs vested on December 1, 2019. The remainder were forfeited.

(14)	33.33% of these RSUs vested on December 1, 2019. The remainder were forfeited.

(15)	25% of these RSUs vested on December 1, 2019. The remainder were forfeited.

(16)	Stock options that are reflected in the table above as fully exercisable vested in equal installments on the first four anniversaries of the grant date.

(17)	Market value was calculated based on the closing price of the Company's common stock on the NYSE on October 31, 2019 of $39.77 per share.

(1)	“Value Realized on Exercise” equals the difference between the closing price of the Company's common stock on the NYSE on the various dates of exercise and the exercise price, multiplied by the number of shares of common stock acquired upon exercise of the stock options.

(2)

With the exception of TSR RSUs, all RSUs, whether or not performance-based generally vest in equal installments on the first four anniversaries of the grant date, with delivery of the shares underlying such RSUs deferred until the fourth anniversary (in each case, subject to a six-month delay in delivery if required to comply with Section 409A of the tax code). Accordingly, the "Number of Shares Acquired on Vesting" for Messrs. Yearley, Hartman and Connor includes (a) the portion of the Ops PRSUs granted in fiscal 2015 that vested and were delivered on December 19, 2018, (b) the portion of the Ops PRSUs granted in fiscal 2016 that vested on December 18, 2018 and were delivered on December 18, 2019, (c) the portion of Ops PRSUs granted in fiscal 2017 that vested on December 20, 2018 but will not be delivered until December 20, 2020, and (d) the portion of Ops PRSUs granted in fiscal 2018 that vested on December 18, 2018 but will not be delivered until December 18, 2021. For Mr. McDonald, the amount includes (a) the portion of RSUs granted to him in fiscal 2015, 2016, 2017 and 2018 that vested during fiscal 2019 and which were delivered on January 5, 2019 (or which will be delivered following a six-month delay following his termination of employment on December 31, 2019).

(3)	“Value Realized on Vesting” is based on the number of shares of the Company's common stock underlying the RSUs that vested during fiscal 2019 multiplied by the closing price of the Company's common stock on the NYSE on the vesting date.

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(1)

In order to be vested in benefits under the SERP, participants generally must have reached age 58, except participants will be vested in SERP benefits in the event of death or disability prior to age 58 after five years of service. The number of years of credited services does not impact SERP benefits, except for the five-year service requirement for vesting in death or disability benefits prior to age 58.

(2)

For a description of the assumptions used in the calculation of the present value of plan benefits, see Note 13, “Employee Retirement and Deferred Compensation Plans” in the notes to the Consolidated Financial Statements contained in the Form 10-K. The change in the actuarial present value of accumulated benefits under the SERP reflected in the Summary Compensation Table on page 51 is due to a change in the discount rate used for actuarial purposes and the passage of time. We use the Citigroup yield curve as our discount rate for calculating the actuarial present value of accumulated SERP benefits. This rate was 3.19% for fiscal 2017 , 4.07% for fiscal 2018 , and 2.64% for fiscal 2019 . When the discount rate increases, as it did in fiscal 2018 and fiscal 2017, the actuarial present value of accumulated SERP benefits decreases. When the discount rate decreases, as it did in fiscal 2019, the actuarial present value of accumulated SERP benefits increases.

(3)	In connection with his resignation, Mr. McDonald relinquished any entitlement to benefits under the SERP.

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(1)

For Messrs. Yearley, Hartman and Connor, "Registrant Contributions in Last FY" column represents the value of (a) the portion of the Ops PRSUs granted in fiscal 2015 that vested and were delivered on December 19, 2018, (b) the portion of the Ops PRSUs granted in fiscal 2016 that vested on December 18, 2018 but were delivered on December 18, 2019, (c) the portion of Ops PRSUs granted in fiscal 2017 that vested on December 19, 2018 but were not scheduled to be delivered until December 19, 2020, and (d) the portion of Ops PRSUs granted in fiscal 2018 that vested on December 18, 2018 but were not scheduled to be delivered until December 18, 2021, in each case based on the closing price of the Company's common stock on the applicable vesting date. For Mr. McDonald, the amount includes (a) the portion of RSUs granted to him in fiscal 2015, 2016, 2017 and 2018 that vested during fiscal 2019 and which were delivered on January 5, 2019. The grant date fair value of these awards was reported in the "Stock Awards" column of the Summary Compensation Table in the fiscal year granted (if an executive was a named executive officer in the year of grant).

(2)	“Aggregate Earnings in Last FY” column includes unrealized earnings/(losses), including dividends, on performance- or service-based RSUs granted in fiscal 2016, 2017 and 2018 that had vested as of fiscal year end, but were not scheduled to be delivered until the fourth anniversary of their respective grant dates.

(3)

“Aggregate Balance at Last FYE” column includes the value, based on the closing price of the Company's common stock on October 31, 2019 , of performance- and service-based RSUs granted in fiscal years 2016, 2017 and 2018 that had vested as of fiscal year end, but were not scheduled to be delivered until until the fourth anniversary of their respective grant dates. The grant date fair value of these awards was reported in the "Stock Awards" column of the Summary Compensation Table in the fiscal year granted (if an executive was a named executive officer in the year of grant).

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(1)	For purposes of this table, “Voluntary Resignation” means a voluntary termination of employment when the executive is not retirement-eligible, and that is not a resignation for "good reason" for purposes of the Severance Plan. Since Mr. Yearley is retirement-eligible, a voluntary resignation would be treated as a retirement.

(2)	As described above, amounts shown in this column do not include the value of unvested equity awards that will continue to vest (but do not accelerate) or the value of Mr. Yearley's SERP benefits.

(3)	Also includes a voluntary resignation for "good reason" for purposes of the Severance Plan.

(4)	As described above, all outstanding unvested stock options and PRSUs would have vested upon the occurrence of a change of control on October 31, 2019 .

(5)

See the description of the Executive Severance Plan on page 46. Amounts set forth are subject to possible reduction if the excise tax under Section 4999 of the tax code would apply. In addition to the amounts included in this table, Mr. Yearley would have been entitled to a pro-rata annual incentive bonus for the year in which employment is terminated. The annual incentive bonus is reported in the Summary Compensation Table on page 51.

(6)	As described above, Mr. Yearley would be entitled to continued vesting (but not acceleration) of any unvested stock options upon his retirement, involuntary termination without cause, death or disability on October 31, 2019. See the footnotes to the

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(7)	Mr. Yearley is fully vested in his SERP benefits. Upon a change of control of the Company, he would have become eligible for a lump-sum payout equal to the actuarial equivalent present value of their benefits as of the payment date. See the “Pension Benefits During Fiscal 2019 ” table on page 56.

(1)	For purposes of this table, “Voluntary Resignation” means a voluntary termination of employment when the executive is no retirement-eligible, and that is not a resignation for "good reason" for purposes of the Severance Plan.

(2)	Mr. Connor is not retirement-eligible.

(3)	Also includes a voluntary resignation for "good reason" for purposes of the Severance Plan.

(4)	As described above, all outstanding unvested stock options and PRSUs would have vested upon the occurrence of a change of control on October 31, 2019 .

(5)

See the description of the Executive Severance Plan on page 46. Amounts set forth are subject to possible reduction if the excise tax under Section 4999 of the tax code would apply. In addition to the amounts included in this table, Mr. Connor would have been entitled to a pro-rata annual incentive bonus for the year in which employment is terminated. The annual incentive bonus is reported in the Summary Compensation Table on page 51.

(6)	As described above, Mr. Connor would be entitled to continued vesting (but not acceleration) of any unvested stock options upon his death or disability on October 31, 2019.

(7)	See the footnotes to the Outstanding Equity Awards at October 31, 2019 table on page 54 for a description of the unvested outstanding stock options and PRSUs.

(8)

As of October 31, 2019, Mr. Connor was not fully vested in his SERP benefits. Except in the event of a change of control, SERP benefits would be paid in bi-weekly installments over a 20-year period following the date Mr. Connor would have reached age 58. Upon a change of control, the amount of the benefit would be paid in a single lump sum equal to the actuarial equivalent present value of Mr. Connor’s benefits as of the date of payment, unless prohibited by applicable tax regulations. See the “Pension Benefits During Fiscal 2019 ” table on page 56.

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•	The median of the annual total compensation of all of our employees, other than Mr. Yearley, was $70,089 .

•	Mr. Yearley's annual total compensation, as reported in the Total column of the 2019 Summary Compensation Table on page 51, was $ 10,744,205 .

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•	the extent of the related person’s interest in the transaction;

•	if applicable, the availability of other sources of comparable products or services;

•	whether the terms of the related person transaction are no less favorable than terms generally available in unaffiliated transactions under like circumstances;

•	the benefit to us and whether there are business reasons for us to enter into the transaction;

•	the aggregate value of the transaction; and

•	any other factors the Governance Committee deems relevant.

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