Re: | TD Ameritrade Holding Corporation Amendment No. 2 to Registration Statement on Form S-4 File No. 333-157208 | |
| TD Ameritrade Holding Corporation Form 10-K for the year ended September 30, 2008 Definitive Proxy Statement on Schedule 14A filed January 6, 2009 File No. 0-49992 Filed November 26, 2008 | ||
| thinkorswim Group Inc. Form 10-K for the year ended December 31, 2008 File No. 0-52012 |
| 1. | We note your response to comment 1 of our comment letter dated April 20, 2009. We continue to believe, however, that the implied equity value per share at each of the assumed discount rates and P/E multiple is material to an investor’s understanding of the results of the discounted cash flow analysis. For example, with respect to TD AMERITRADE, we note that two of the implied values were below the company’s stock price while seven of the values were above the stock price. Thus, it appears that disclosure of the complete set of values would enhance an investor’s understanding of the analysis. Please revise the disclosure as previously requested. Alternatively, please provide us with a more detailed response that explains why you believe it is appropriate to disclose only the high and low ends of these values rather than the complete results of the UBS analysis. | |
| Response: thinkorswim respectfully disagrees with the Staff’s belief that disclosure of the implied equity value per share at each discount rate and terminal value multiple included in UBS’ board book is material to an investor’s understanding of the results of UBS’ analyses. thinkorswim continues to believe that the current disclosure describes the material results of the discounted cash flow analyses of thinkorswim and TD AMERITRADE as considered by UBS and reviewed with the thinkorswim board of directors and, as such, provides the level of disclosure that is required and appropriate. In performing its discounted cash flow analyses, UBS and the thinkorswim board of directors relied on the overall ranges resulting from such analyses for purposes of comparison against, in the case of thinkorswim, the implied value of the per share merger consideration and, in the case of TD AMERITRADE, the closing price of TD AMERITRADE common stock on January 6, 2009. Although a matrix of various data points will necessarily be generated when applying ranges of terminal value multiples and discount rates in order to derive an overall reference range, the individual data points at each discount rate and terminal value multiple were not independently evaluated or relied upon for purposes of such analyses nor did UBS or the thinkorswim board quantify how many implied per share values were |
| above or below the implied value of the per share merger consideration or the closing price of TD AMERITRADE common stock. Accordingly, thinkorswim believes that because the table requested by the Staff reflects various implied per share values that were not relied upon in determining the fairness of the per share merger consideration from a financial point of view, such table should not be added to the disclosure. | ||
| thinkorswim respectfully submits that its views are supported by Delaware case law, which is relevant given that both thinkorswim and TD AMERITRADE are Delaware corporations. Specifically, thinkorswim notes that the Delaware Chancery Court has held that a fair summary of the substantive work performed by an investment banker includes, among other things, the disclosure of the “range” of values generated by its analyses (seeIn re Pure Resources, Inc. Shareholders Litigation, 808 A.2d 421, 449 (Del. Ch. 2002)) and that information is immaterial if it was not relied on by the financial advisor or the board in determining the fairness of the merger consideration (seeVan de Walle v. Unimation, Inc., C.A. No. 7046, 1991 WL 29303, at *16 (Del. Ch. Mar. 7, 1991)). In addition, thinkorswim notes that the Delaware Chancery Court, quoting a Delaware Supreme Court decision, has stated that “omitted facts are not material simply because they might be helpful.” SeeGlobis Partners, L.P. v. Plumtree Software, Inc., C.A. No. 1577-VCP, 2007 WL 4292024, at *12 (Del. Ch. Nov. 30, 2007) (quotingSkeen v. Jo-Ann Stores, Inc., 750 A.2d 1170, 1174 (Del. 2000)). The Delaware Chancery Court inGlobis Partnersalso stated that “a reasonable line has to be drawn or else disclosures in proxy solicitations will become so detailed and voluminous that they will no longer serve their purpose.”Id(quotingTCG SEC., Inc. v. Southern Union Co., 1990 Del. Ch. LEXIS 12, at *22 (January 31, 1990)). Accordingly, thinkorswim believes that the requested disclosure of two tables, each containing nine separate implied per share values, would provide stockholders with unnecessary detail that would shift the focus of the disclosure from the material results of such analyses as evaluated by UBS and the thinkorswim board of directors (i.e., the purpose of the disclosure). | ||
| Finally, thinkorswim respectfully submits that the current disclosure of overall ranges is consistent with the level of disclosure typically reflected for this type of analysis in other transactions reviewed by the Staff. thinkorswim notes for the Staff that, although the implied per share values requested to be disclosed by the Staff are customarily calculated and included in financial presentations made by financial advisors, neither thinkorswim or UBS or their respective legal counsel is aware that such disclosure has been required in other transactions in which they have been involved. |
| In light of the foregoing, thinkorswim respectfully submits that the current disclosure is appropriate and that the requested disclosure is not required or appropriate. |
| 2. | We note your response to prior comment 5. Please provide us with a more detailed description of how the Compensation Committee measured each NEO’s performance in managing liquidity and credit risk. Tell us how each NEO’s performance, as considered by the Compensation Committee, resulted in the actual awards received. For example, if the committee decided to reduce the award from the target amount based on the NEO’s performance in managing liquidity, please explain how performance resulted in a reduced award. | |
| Response: TD AMERITRADE further advises the staff that the Compensation Committee exercised its judgment in both measuring the performance of each effected NEO in managing liquidity and credit risk and determining the amount of reduction in incentive compensation. In exercising negative discretion, the Compensation Committee did not employ a formula or other quantitative measure when deciding to reduce incentive compensation for the effected NEOs, as it did when determining fiscal 2008 incentive compensation in the first instance. As the proxy statement explains, the Compensation Committee used EPS as the measure for determining the amount of the annual incentive. There was no similar measure or formula employed by the Compensation Committee in measuring the performance of the effected NEOs. As described in our previous response, in exercising its judgment in determining the amount of negative discretion, the Compensation Committee considered the level of responsibility of the effected NEO in managing liquidity and credit risk, as well as the risks and detriments incurred by the Company, none of which could be translated directly into a pre-set quantitative amount of reduction in incentive compensation. Accordingly, the Compensation Committee used all of the facts and circumstances to measure performance and then exercised its judgment in determining the level of negative discretion. |
| Very truly yours, WILSON SONSINI GOODRICH & ROSATI Professional Corporation /s/ Michael S. Ringler Michael S. Ringler | ||||
| cc: | David L. Lambert, TD AMERITRADE Holding Corporation Ida K. Kane, thinkorswim Group Inc. Martin W. Korman, Wilson Sonsini Goodrich & Rosati Professional Corporation Ethan A. Klingsberg, Cleary Gottlieb Steen & Hamilton LLP Benet J. O’Reilly, Cleary Gottlieb Steen & Hamilton LLP |
