SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9
(RULE 14d-101)
(AMENDMENT NO. 1)
SOLICITATION/RECOMMENDATION STATEMENT
UNDER SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
TD WATERHOUSE GROUP, INC.
(Name of Subject Company)
TD WATERHOUSE GROUP, INC.
(Name of Person Filing Statement)
Common Stock, par value $0.01 per share
(Title of Class of Securities)
87236210 8
(CUSIP Number of Class of Securities)
RICHARD H. NEIMAN, ESQ.
EXECUTIVE VICE PRESIDENT,
GENERAL COUNSEL & SECRETARY
TD WATERHOUSE GROUP, INC.
100 WALL STREET
NEW YORK, NEW YORK 10005
(212) 806-3500
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Person Filing Statement)
Copy to:
KENNETH J. NACHBAR, ESQ.
MORRIS, NICHOLS, ARSHT & TUNNELL
1201 NORTH MARKET STREET
P.O. BOX 1347
WILMINGTON, DELAWARE 19899-1347
(302) 658-9200
AMENDMENT NO. 1 TO SCHEDULE 14D-9
This Amendment No. 1 amends and supplements the Schedule 14D-9 initially filed
with the Securities and Exchange Commission on October 31, 2001 (the "Schedule
14D-9") by TD Waterhouse Group, Inc. ("TD Waterhouse" or the "Company"). The
Schedule 14D-9 relates to a tender offer by The Toronto-Dominion Bank ("TD
Bank") and TD Waterhouse Holdings, Inc. (the "Purchaser") to purchase all of the
outstanding shares of common stock, par value $.01 per share (the "Shares") at
$9.50 per Share, net to the seller in cash (the "Revised Offer Price") upon the
terms and subject to the condition set forth in the Offer to Purchase dated
October 17, 2001 (the "Offer to Purchase") as supplemented by the supplement
thereto, dated October 31, 2001 (the "Supplement") and in the related revised
Letter of Transmittal, which together, as they may be amended or supplemented
from time to time, constitute the "Revised Offer." The following items in the
Schedule 14D-9 are amended to read in their entirety as follows:
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
(a) SOLICITATION OR RECOMMENDATION.
The Special Committee has determined that the Revised Offer is fair to
TD Waterhouse's stockholders (other than TD Bank, the Purchaser and their
affiliates) and has resolved to recommend to TD Waterhouse's stockholders that
they accept the Revised Offer and that they tender their Shares in response to
the Revised Offer. Pursuant to authority delegated to it on October 30, 2001,
the Special Committee determined that the Company's position on the Revised
Offer, for purposes of Rules 14d-9 and 14e-2 under the Exchange Act, is to
recommend that stockholders accept the Revised Offer. Because of actual or
potential conflicts of interest on the part of all of the members of the
Company's Board of Directors other than the members of the Special Committee,
the Company's full board has not acted on the Revised Offer and the Company does
not expect that it will act. Accordingly, the Company's position on the Revised
Offer has been determined solely by the Special Committee.
A letter to TD Waterhouse's stockholders communicating the Special
Committee's recommendation and the press release announcing the Revised Offer
are attached hereto as Exhibits (a)(6) and (a)(7), respectively.
(b) REASONS FOR THE RECOMMENDATION
BACKGROUND OF THE OFFER
In 1999 TD Bank formed the Company to serve as the holding company for
all of TD Bank's worldwide self-directed brokerage operations in connection with
an initial public offering of common stock of the Company. The initial public
offering, which was completed in June of that year, involved the issuance by the
Company of 43.4 million newly-issued Shares representing approximately 11.5% of
its capital stock (including Shares issuable upon exchange of the Exchangeable
Preference Shares).
On October 2, 2001, Stephen D. McDonald, a Vice Chair of TD Bank and
the Chief Executive Officer of the Company, called Steven B. Dodge and Leo J.
Hindery, Jr., the two members of the TD Waterhouse Board who have no present or
former affiliation with TD Bank, the Purchaser or the Company, except in their
capacity as directors of the Company, to inform them that TD Bank was
considering making an offer to acquire all of the Shares not already
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owned by TD Bank. Mr. McDonald told Mr. Dodge and Mr. Hindery that TD Bank
expected to formalize its offer at a later date, but would not ask the Company's
board of directors or any committee of the board to approve the offer. Mr.
McDonald notified the other directors of the Company of TD Bank's plans with
respect to the proposed offer over the next few days.
On October 9, 2001, representatives of TD Bank advised the TD
Waterhouse Board of TD Bank's intention to commence the Offer and to take the
Company private. TD Bank noted that the final terms of the Offer and the timing
of the commencement of the Offer had not been determined by TD Bank's executive
management at that time. TD Bank indicated that it did not require any approval
by the TD Waterhouse Board to commence or complete the Offer or, following
completion of the Offer, to acquire the remaining publicly held Shares through a
merger and, accordingly, TD Bank was not requesting that the TD Waterhouse Board
approve these transactions. TD Bank also indicated that it viewed the Company as
an integral component of TD Bank's long-term growth strategy and accordingly
would not consider or participate in any alternative transaction involving any
sale of the Company or of TD Bank's or the Purchaser's interests therein to a
third party.
After the briefing of the TD Waterhouse Board by TD Bank, the Company's
board of directors voted to establish the Special Committee, comprised of Steven
B. Dodge and Leo J. Hindery, Jr., the only directors of TD Waterhouse who are
not present or former employees of TD Waterhouse or employees or directors of TD
Bank. The Special Committee was authorized to consider and recommend to the full
board of directors of the Company the actions that the full board should take in
connection with the proposed offer by TD Bank, including a recommendation with
respect to the position, if any, that the full board should take in connection
with the solicitation/recommendation statement on Schedule 14D-9 required by SEC
rules to be filed by the Company. The Special Committee was also authorized to
retain independent legal and financial advisors at the Company's expense.
Representatives of TD Bank told the Special Committee that TD Bank would notify
the Special Committee prior to publicly announcing the Offer, which they did on
October 10, 2001.
On October 10, 2001, TD Bank issued a press release announcing its
intention to make the Offer, and the Offer was commenced on October 17, 2001.
The Special Committee met on October 11, 2001. At that meeting, the
Special Committee received legal advice concerning the mechanics of the proposed
transaction and the Committee members' duties in responding to the Offer. The
Special Committee interviewed representatives of Salomon Smith Barney Inc.
("Salomon Smith Barney") and another investment banking firm. After discussion,
the Committee determined to retain Salomon Smith Barney as its exclusive
financial advisor in connection with the Offer. The Special Committee chose to
retain Salomon Smith Barney based upon Salomon Smith Barney's reputation within
the financial community and its experience, expertise and familiarity with
companies in the on-line brokerage industry.
The Special Committee met with its legal and financial advisors, and
certain members of management of the Company, on October 18, 2001. At that
meeting, the Committee's legal advisor reviewed the proposed transaction and the
Committee's duties in responding to the Offer. The Committee's legal and
financial advisors also reported on the status of Salomon Smith Barney's due
diligence, which was nearly complete. Salomon Smith Barney discussed with the
Committee certain recent market trends, including the stock price performance of
companies comparable to TD Waterhouse. Salomon Smith Barney also reviewed
certain aspects of the
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Company's business and the financial forecasts for TD Waterhouse set forth in
the Offer to Purchase. Finally, Salomon Smith Barney discussed with the
Committee certain of the valuation methodologies that Salomon Smith Barney would
utilize in examining the Offer Price.
On October 25, 2001, the Special Committee met with its legal and
financial advisors present. The Committee's counsel reviewed the status and
timing of the Offer and the Committee's response, and outlined the possible
courses of action that the Committee could take. Salomon Smith Barney then
reviewed with the Committee its financial analysis, which is described below
under the heading "Summary of Financial Analysis of The Special Committee's
Financial Advisor." After further deliberation, the Committee concluded
preliminarily that it would be inclined to recommend that stockholders of the
Company not tender their Shares at the price of $9.00 per Share, but would be
prepared to recommend that stockholders tender their Shares if the Offer price
were increased to $10.75 per Share. On October 25, 2001, Messrs. Hindery and
Dodge telephoned A. Charles Baillie, Chairman of TD Bank, and advised him of the
Special Committee's views. Later on October 25, 2001, representatives of TD Bank
requested that the Special Committee receive a presentation from Morgan Stanley
& Co. Incorporated ("Morgan Stanley"), the financial advisor to TD Bank. The
Special Committee agreed to receive such a presentation.
Prior to the presentation by Morgan Stanley, at the Special Committee's
instruction, Salomon Smith Barney provided to Morgan Stanley portions of the
financial analysis presented by Salomon Smith Barney to the Special Committee.
Those portions of Salomon Smith Barney's financial analysis showed that, based
upon increases in the stock prices of Charles Schwab, E*Trade and Ameritrade
between October 9 and October 23, 2001 the implied price of the Shares (without
any premium) was $8.02 per Share and the reference range of the selected
companies analysis was $9.50 to $11.50 per Share, that the reference range of
the going private selected premiums analysis was $9.33 to $11.00 per Share, and
that the reference range of the discounted cash flow analysis was $9.54 to
$11.54 per Share. Morgan Stanley and Salomon Smith Barney then discussed their
respective valuation methodologies and differences in their analyses.
On October 26, 2001, the Special Committee met, with its legal and
financial advisors present, to discuss the financial analysis performed by
Morgan Stanley. At the meeting, Morgan Stanley explained to the Special
Committee the results of its October 26th analysis and how it compared to the
financial analysis that Salomon Smith Barney had presented to the Special
Committee. After full discussion, the Special Committee reaffirmed its view that
it would recommend that stockholders of the Company not tender their Shares at
the price of $9.00 per Share. Immediately following the meeting, Mr. Hindery
telephoned Mr. Baillie and communicated the Committee's position to him. Mr.
Hindery and Mr. Baillie agreed to meet the following morning.
Mr. Hindery and Mr. Baillie met on the morning of October 27, 2001 and
had a further discussion concerning the Offer. During this discussion, Mr.
Baillie indicated that TD Bank continued to believe the $9.00 Offer Price was
fair, but in the interests of addressing the Special Committee's concerns on
price, might be prepared to increase the Offer Price if doing so would lead to
the Committee recommending the Offer or remaining neutral. Mr. Hindery indicated
that the Committee would welcome an increase in the Offer Price, and might be
prepared to recommend the Offer at a price below $10.75. No specific price
between $9.00 and $10.75 was discussed at the meeting.
4
The Special Committee met on the afternoon of October 27 and discussed
Mr. Hindery's meeting with Mr. Baillie and what the Committee considered to be
the fair value of TD Waterhouse. After discussion, the Committee determined to
advise TD Bank that it would be prepared to recommend the Offer if the Offer
Price were increased to $10.00 per Share or above. The Committee also indicated
that its view at that time, based upon the transaction terms then proposed, was
that it would be neutral or would recommend rejection of the Offer at lower
prices. Mr. Hindery communicated this position to Mr. Baillie on the afternoon
of October 27.
On October 29, 2001, representatives of the Special Committee were
advised by representatives of TD Bank that TD Bank did not intend to engage in
negotiations with the Special Committee, continued to believe that $9.00 per
Share was a fair and adequate price to offer to acquire the Shares that it did
not own, but that it was prepared to increase the Offer Price to $9.50 if it
received the unconditional approval of the Special Committee. The Special
Committee was advised that TD Bank would continue with the $9.00 per Share Offer
Price if the Committee did not approve the proposed $9.50 per Share Offer Price.
The Special Committee met with its legal and financial advisors on
October 29, 2001 to consider the communication from TD Bank's representatives.
After discussion, the Committee determined to advise TD Bank that it continued
to believe that an Offer Price of $10.00 or more per Share was appropriate and
could be supported by the Committee. Mr. Hindery conveyed the Special
Committee's determination to Mr. Baillie late in the morning on October 29,
2001.
Steven D. McDonald met with Mr. Hindery on the morning of October 30,
2001 to further discuss the Offer. During that discussion, Mr. McDonald
indicated that TD Bank strongly believed that the increase in the Offer Price to
$9.50 per Share that it had previously proposed was fair, and again asked Mr.
Hindery to accept the conditional price increase that TD Bank had previously
proposed. Following that meeting, Mr. Hindery met with the Committee's legal
advisors to discuss the proposal further. Mr. Dodge, who was unavailable, did
not participate in the meeting. Following deliberation, Mr. Hindery advised Mr.
McDonald that subject to the concurrence of the other Special Committee member,
his preliminary view was that he would be prepared to recommend the Offer to
stockholders of TD Waterhouse if either (i) the Offer Price were increased to
$9.75 per Share or (ii) the Offer Price were increased to $9.50 per Share and
the Offer were made subject to the Majority of the Minority Condition. In a
separate telephone call, Mr. Dodge indicated to Mr. McDonald that without the
structural protection of the Majority of the Minority Condition, he could not
recommend the Offer at any price lower than $9.75 per Share. Later on October
30, 2001, Mr. McDonald communicated to Mr. Hindery that TD Bank was prepared to
increase the Offer Price to $9.50 per Share, and to make the Offer subject to
the Majority of the Minority Condition, if the Committee would recommend the
Offer as revised. Later on October 30, 2001, the Special Committee met with its
legal and financial advisors and approved the Revised Offer. At that meeting,
Salomon Smith Barney delivered to the Special Committee its opinion described
below in the Section "Summary of the Financial Analysis and Opinion of The
Special Committee's Financial Advisor".
By unanimous written consent, adopted on October 30, 2001, the TD
Waterhouse Board adopted a resolution granting to the Special Committee the
power and authority to determine, in its sole discretion, the position, if any,
of the Company with respect to the Tender Offer for purposes of Rule 14d-9 and
Rule 14e-2, and to prepare and cause the Company to file with the Securities and
Exchange Commission a solicitation/ recommendation statement on Schedule 14D-9
and amendments and supplements thereto that the Committee determined
appropriate.
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FACTORS CONSIDERED BY THE SPECIAL COMMITTEE
In connection with reaching the recommendation described above, the
Special Committee concluded that the Revised Offer is substantively and
procedurally fair to unaffiliated stockholders of TD Waterhouse. In reaching
this determination and conclusion, the Special Committee considered a number of
factors, including the following:
1. Company Operating and Financial Condition. The Special
Committee took into account the current and historical financial condition and
results of operations of TD Waterhouse, as well as the prospects and strategic
objectives of TD Waterhouse, including the risks involved in achieving those
prospects and objectives, and the current and expected conditions in the general
economy and in the industries in which TD Waterhouse's businesses operate.
2. Company Financial Forecasts. The Special Committee examined
the forecasted financial data set forth in the Fall 2001 Forecasts described in
pages 36 through 40 of the Offer to Purchase. The Special Committee believed
that, in view of recent financial results and trends, the Fall 2001 Forecasts
were more likely to be achieved than the Spring 2001 Forecasts described at
pages 36 through 40 of the Offer to Purchase.
3. Salomon Smith Barney Financial Analysis and Opinion. The
Special Committee took into account and adopted the discussion materials of
Salomon Smith Barney and its opinion dated October 30, 2001 to the effect that,
as of the date of the opinion and based on and subject to the matters stated
therein, the Revised Offer Price was fair, from a financial point of view, to
holders of Shares (other than TD Bank, the Purchaser and their respective
affiliates). The financial analysis and opinion of Salomon Smith Barney are
described below in the Section "Summary of the Financial Analysis and Opinion of
The Special Committee's Financial Advisor." As noted in that Section, Salomon
Smith Barney's discounted cash flow analysis implied an equity reference range
for TD Waterhouse of approximately $9.54 to $11.54 per Share. The Special
Committee nonetheless believed that the $9.50 per Share Revised Offer Price was
fair in light of, and when taken together with, Salomon Smith Barney's other
analyses, and the other factors described herein. In addition, the Special
Committee was aware that discounted cash flow analyses are based upon long-term
earnings forecasts which are subject to inherent uncertainty, and that the
Revised Offer Price was only marginally below the range implied by the
discounted cash flow analysis.
4. Transaction Financial Terms/Relation to Certain Market
Prices. The Special Committee considered the relationship of the Offer Price to
the historical and projected market prices of the Shares. The Offer Price of
$9.00 per Share represents a premium of approximately 45.2% over the closing
price per Share on October 9, 2001, the day before the public announcement of TD
Bank's intent to commence the Offer, a premium of 16.9% over the closing price
per Share on September 5, 2001, 20 trading days before TD Bank's announcement,
but represents a 62.5% discount to the initial public offering price of the
Shares and a 7.2% discount to the average closing price of the Shares for the
six months prior to October 9, 2001.
5. Timing of the Offer. The Special Committee took into
account the timing of the Offer, and particularly that it was made following
significant declines in the price of the Company's stock and the broader
markets. The Committee also took into account that the Offer was made just
before two of the Company's principal competitors, E*Trade Group and Charles
Schwab Corporation, were scheduled to announce their quarterly earnings. The
Special Committee concluded that these events were adequately addressed by the
$9.50 per Share Revised Offer Price.
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6. Changes in Market Conditions Since October 9, 2001. The
Special Committee took into account that between October 9, 2001, when the Offer
was publicly announced, and October 29, 2001, the stock prices of the other
publicly traded on-line brokerage companies had increased, on average, by
nearly 23% above their October 9, 2001 prices, and that such stock performance
was supported by favorable trends in average trades per day and revenues. TD
Waterhouse recently experienced similar favorable trends in average trades per
day and revenues. Accordingly, the Special Committee believes that, in the
absence of the Offer, the price of TD Waterhouse stock likely would have
participated, to some degree, in this positive change in the stock prices of the
on-line brokerage sector. The Special Committee noted, however, that, even if
the Company's stock had participated fully in the price appreciation of the
on-line brokerage sector, the price of the Shares on October 30, 2001 (the date
of the Committee's recommendation) would have been significantly below the $9.50
per Share Revised Offer Price.
7. Reaction Of Analysts To The Offer. The Special Committee
considered that while some analysts who follow the Company's stock expressed the
view that the long term or target value of the Company's stock exceeds $9.00 per
Share, several analysts expressed the view that, at $9.00 per Share, the Offer
fairly valued the Shares.
8. Likely Effect on Market Prices of the Shares if the Offer
is Withdrawn. The Special Committee considered the possible trading prices of
the Shares in the short term and the long term in the event that the Offer were
to be withdrawn or rejected. The Special Committee concluded that the trading
value of the Shares might decline in the short term as a result of the
withdrawal or rejection of the Offer in combination with TD Waterhouse's
financial outlook, but would likely not decline to the $6.20 per Share price at
which it traded prior to public announcement of the Offer. The Committee
believed that the likely decline in the trading value of the Shares if the
Revised Offer were withdrawn or rejected favored acceptance of the Revised
Offer.
9. Form of the Consideration; Taxable Transaction. The Special
Committee considered the form of consideration to be paid to holders of Shares
in the Offer and the Revised Offer, and the certainty of value of such cash
consideration compared to stock, particularly in the recent volatile markets.
The Special Committee was aware that the consideration received by holders of
Shares in the Offer and Merger would be taxable to some holders for federal
income tax purposes.
10. Strategic Alternatives. The Special Committee considered
the fact that the Purchaser and its affiliates currently own approximately 88%
of the equity of TD Waterhouse and control approximately 89.3% of the combined
voting power of all classes of capital stock of TD Waterhouse. The Special
Committee recognized that any alternative transaction was impossible without the
consent of the Purchaser and its affiliates, and that the Purchaser and its
affiliates had stated that they considered the Company to be an integral
component of TD Bank's long-term growth strategy and that TD Bank accordingly
would not consider or participate in any alternative transaction involving any
sale of the Company or of TD Bank's or the Purchaser's interest therein to a
third party. Accordingly, the Special Committee concluded that an acquisition of
TD Waterhouse by a third party was not a feasible alternative.
7
11. Possible Short Form Merger. The Special Committee took
into account that, based upon its present 88% ownership of TD Waterhouse, any
merger proposed by TD Bank to acquire the remaining equity of TD Waterhouse
would require approval of the TD Waterhouse Board and would require TD Bank to
demonstrate the "entire fairness" of the transaction, unless certain procedural
safeguards were utilized that would allow that evidentiary burden to be shifted.
In contrast, a tender offer not involving the participation of the TD Waterhouse
Board would not be subject to the entire fairness standard. If the Offer is
successful, the Purchase and TD Bank will own in excess of 90% of each class of
stock of the Company and will be able to acquire the remaining equity of the
Company pursuant to Section 253 of the Delaware General Corporation Law, without
approval of the Board of Directors of the Company and without a vote of its
stockholders. The Special Committee noted that because of the Majority of the
Minority Condition, the Revised Offer cannot succeed unless a majority of the
publicly-owned Shares are tendered. Absent that condition, due to TD Bank's
ownership of 88% of the Shares, the Purchaser and TD Bank would be able to
attain ownership of 90% of the Shares even if only 16.6% of the Shares they do
not already own were tendered in response to the Offer or the Revised Offer.
12. Timing of Completion. The Special Committee considered the
anticipated timing of consummation of the Offer, which should allow stockholders
to receive the Offer Price promptly, followed by the Merger in which remaining
stockholders will receive the same consideration as received by stockholders who
tender their Shares in the Revised Offer.
13. Limited Conditions to Consummation. The Special Committee
considered the fact that the obligation of TD Bank and the Purchaser to
consummate the Offer is subject to a limited number of conditions, with no
financing condition. Moreover, TD Bank and the Purchaser have the financial
resources to consummate the Revised Offer expeditiously.
14. Appraisal Rights. The Special Committee considered the
fact that stockholders who do not tender their Shares pursuant to the Revised
Offer will have the right to dissent from the Merger and to demand appraisal of
the fair value of their Shares under the Delaware General Corporation Law, as
described at pages 18 through 19 of the Offer to Purchase in the Section
"SPECIAL FACTORS -- Dissenters' Rights."
15. Possible Conflicts of Interest. The Special Committee also
took into account the possible conflicts of interest of certain directors and
members of management of both TD Waterhouse and TD Bank discussed above in the
Section "Interests of Certain Persons in the Offer and the Merger." Despite
these conflicts, the Special Committee concluded that, in view of the economic
benefit of the Revised Offer, the Revised Offer is in the best interests of
holders of the Shares and should be accepted.
16. Discussion with TD Bank. The Special Committee considered
the discussions between the Special Committee and TD Bank and their respective
advisors, and the judgment of the Special Committee that the Revised Offer Price
was the highest price that TD Bank would be willing to pay.
17. Procedural Fairness. The Special Committee believes that
the Revised Offer is procedurally fair because (i) the Revised Offer was the
result of the discussions between representatives of the Special Committee
(comprised of the independent directors of TD Waterhouse who were advised by
independent legal counsel and financial advisors) and representatives of TD Bank
described above in the Section "Background of the Offer," (ii) the
8
Revised Offer Price was found by Salomon Smith Barney, the Special Committee's
financial advisor, as of the date of its opinion to the Special Committee, to be
fair, from a financial point of view, to holders of the Shares other than TD
Bank, the Purchaser and their respective affiliates and (iii) given the Majority
of the Minority Condition, the Revised Offer cannot be consummated unless the
Revised Offer is accepted by holders of a majority of Shares owned by persons
other than TD Bank, the Purchaser or their respective affiliates, or that
condition is waived by the Special Committee.
The members of the Special Committee evaluated the Offer and the
Revised Offer in light of their knowledge of the business, financial condition
and prospects of TD Waterhouse and the advice of its legal and financial
advisors.
The Special Committee did not consider the liquidation of TD
Waterhouse's assets and did not consider liquidation to be a viable course of
action based on Purchaser's and TD Bank's desire for TD Waterhouse to continue
to conduct its business as a subsidiary of TD Bank. Therefore, no appraisal of
liquidation values was sought for purposes of evaluating the Offer or the
Revised Offer. The Special Committee considered the net book value of the
Company, but found it to be of limited importance as it is not directly related
to the financial performance of the Company. The Special Committee considered
the going concern value of the Company, as measured by the Selected Companies
Analysis and Discounted Cash Flow Analysis described below in the Section
"Summary of Financial Analysis of The Special Committee's Financial Advisor" and
for the reasons pertinent to those analyses discussed in paragraph 3 above,
concluded that the Revised Offer Price was fair in light of the going concern
value implied by those analyses. The Special Committee did not consider the
purchase prices for Shares paid by TD Bank or its affiliates, or by affiliates
of the Company, within the past two years because the Committee believed that,
because of the significant changes in market conditions over that period of
time, those purchase prices were of little relevance in evaluating the Revised
Offer. The Special Committee was not aware of, and therefore did not consider,
any firm offers for the merger or sale of the Company, the sale or transfer of
all or any substantial part of the Company's assets or any purchase of the
Company's securities that would result in the purchaser obtaining control of the
Company.
In view of the wide variety of factors considered in connection with
their evaluation of the Offer and the Revised Offer, the Special Committee did
not find it practicable to, and did not, quantify or otherwise attempt to assign
numerical weights to the specific factors it considered in reaching its
determination. However, in determining to recommend that stockholders tender
their Shares in the Revised Offer, the Special Committee gave primary weight to
its conclusions that (i) in the Special Committee's view of the Company and its
prospects, including the discussion materials of Salomon Smith Barney, $9.50 per
Share is a fair price for the Shares and (ii) the Majority of the Minority
Condition provides owners of the publicly-held Shares with an important
procedural safeguard that will insure that the Offer can proceed only if holders
of a majority of the publicly-owned Shares elect to tender those Shares in
response to the Offer.
The foregoing discussion of the information and factors considered by
the Special Committee is not intended to be exhaustive but is believed to
include all material factors considered by the Special Committee. TD
Waterhouse's executive officers have not been asked to make a recommendation as
to the Revised Offer.
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SUMMARY OF FINANCIAL ANALYSIS AND OPINION OF THE SPECIAL COMMITTEE'S FINANCIAL
ADVISOR.
The Special Committee retained Salomon Smith Barney as its exclusive
financial advisor to evaluate the Offer Price proposed to be paid by TD Bank in
connection with the Offer. On October 25, 2001, at a meeting of the Special
Committee held to evaluate the proposed Offer, Salomon Smith Barney reviewed
with the Special Committee discussion materials dated October 25, 2001
containing various financial analyses relating to the Offer Price, referred to
as the discussion materials.
On October 30, 2001, the Special Committee advised Salomon Smith Barney
that TD Bank had increased its Offer Price to $9.50 per Share. The Special
Committee also requested an opinion from Salomon Smith Barney as to the
fairness, from a financial point of view, of the Revised Offer Price to holders
of Shares (other than TD Bank, the Purchaser and their respective affiliates).
On that same day, Salomon Smith Barney delivered to the Special Committee an
oral opinion, confirmed by delivery of a written opinion dated October 30, 2001,
to the effect that, as of that date and based on and subject to the matters
described in its written opinion, the Revised Offer Price was fair, from a
financial point of view, to the holders of Shares (other than TD Bank,
Purchaser and their respective affiliates). In connection with its opinion,
Salomon Smith Barney updated the analyses it had performed in connection with
its discussion materials of October 25, 2001, the assumptions on which the
analyses were based and the factors considered in connection with such analyses.
THE FULL TEXT OF SALOMON SMITH BARNEY'S WRITTEN OPINION DATED OCTOBER
30, 2001, WHICH DESCRIBES THE ASSUMPTIONS MADE, MATTERS CONSIDERED AND
LIMITATIONS ON THE REVIEW UNDERTAKEN, IS ATTACHED TO THIS SCHEDULE 14D-9 AS
ANNEX A AND IS INCORPORATED INTO THIS SCHEDULE 14D-9 BY REFERENCE. SALOMON SMITH
BARNEY'S OPINION WAS PROVIDED FOR THE INFORMATION OF THE SPECIAL COMMITTEE IN
ITS EVALUATION OF THE REVISED OFFER PRICE FROM A FINANCIAL POINT OF VIEW.
SALOMON SMITH BARNEY'S OPINION DOES NOT ADDRESS ANY OTHER ASPECT OF THE REVISED
OFFER OR ANY RELATED TRANSACTION AND WAS NOT INTENDED TO BE AND DOES NOT
CONSTITUTE A RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER SHARES IN
THE REVISED OFFER OR AS TO ANY OTHER MATTERS RELATING TO THE REVISED OFFER.
In arriving at its opinion, Salomon Smith Barney held discussions with
certain senior officers, directors and other representatives and advisors of TD
Waterhouse; examined certain publicly available business and financial
information relating to TD Waterhouse as well as certain financial forecasts and
other information and data concerning TD Waterhouse that was provided to or
otherwise discussed with Salomon Smith Barney by the management of TD
Waterhouse; reviewed the Revised Offer Price in relation to, among other things,
current and historical market prices and trading volumes of TD Waterhouse Common
Stock; the financial condition and historical and projected operating data of TD
Waterhouse; and the capitalization of TD Waterhouse; considered, to the extent
publicly available, the financial terms of other transactions recently effected
which Salomon Smith Barney considered relevant in evaluating the Revised Offer
and analyzed certain financial, stock market and other publicly available
information relating to the businesses of other companies whose operations
Salomon Smith Barney considered relevant in evaluating those of TD Waterhouse.
In addition to the foregoing,
10
Salomon Smith Barney conducted such other analyses and examinations and
considered such other financial, economic and market criteria as Salomon Smith
Barney deemed appropriate in arriving at its opinion.
In performing its analyses, Salomon Smith Barney assumed and relied,
without independent verification, on the accuracy and completeness of all
financial and other information and data publicly available or furnished to or
otherwise reviewed by or discussed with it. With respect to financial forecasts
and other information and data provided to or otherwise reviewed by Salomon
Smith Barney, TD Waterhouse's management advised Salomon Smith Barney that they
were reasonably prepared on bases reflecting the best currently available
estimates and judgments of TD Waterhouse's management as to the future financial
performance of TD Waterhouse. Salomon Smith Barney did not make, and was not
provided with, an independent evaluation or appraisal of the assets or
liabilities, contingent or otherwise, of TD Waterhouse, and did not make any
physical inspection of TD Waterhouse's properties or assets.
In connection with its engagement, Salomon Smith Barney was not
requested to, and did not, solicit third party indications of interest in the
possible acquisition of all or a part of TD Waterhouse nor was Salomon Smith
Barney requested to, nor did it, participate in negotiating or structuring the
Offer or the Revised Offer. Salomon Smith Barney expressed no view as to, and
its opinion and analyses do not address, the relative merits of the Revised
Offer as compared to any alternative business strategies that might exist for TD
Waterhouse or the effect of any other transaction in which TD Waterhouse might
engage. Salomon Smith Barney's opinion and analyses were necessarily based on
information available, and financial, stock market and other conditions and
circumstances existing and disclosed to Salomon Smith Barney, as of the date of
such opinion and analyses. The Revised Offer Price was determined through
negotiations between the Special Committee and TD Bank, and Salomon Smith Barney
was not asked to, and it did not, make any recommendations to the Special
Committee with respect to the Offer, the Revised Offer or the Offer Price as
originally proposed or as revised. Neither TD Waterhouse nor the Special
Committee imposed any other instructions or limitations on Salomon Smith Barney
with respect to the investigations made or procedures followed by Salomon Smith
Barney in preparing its analyses and opinion.
In evaluating the Revised Offer Price, Salomon Smith Barney performed a
variety of financial and comparative analyses, including those described below,
which were reflected in the discussion materials presented to the Special
Committee on October 25, 2001. The summary of these analyses is not a complete
description of the analyses performed by Salomon Smith Barney. The preparation
of a fairness opinion and financial analyses are a complex analytical process
involving various determinations as to the most appropriate and relevant methods
of financial analysis and the application of those methods to the particular
circumstances and, therefore, a fairness opinion and financial analyses are not
readily susceptible to summary description. Accordingly, Salomon Smith Barney
believes that its analyses must be considered as a whole and that selecting
portions of its analyses and factors, without considering all analyses and
factors, could create a misleading or incomplete view of the processes
underlying its analyses and opinion.
In its analyses, Salomon Smith Barney considered industry performance,
general business, economic, market and financial conditions and other matters
existing as of the date of its discussion materials and opinion, many of which
are beyond the control of TD Waterhouse. No company, transaction or business
used in those analyses as a comparison is identical to TD
11
Waterhouse or the proposed offer, and an evaluation of those analyses is not
entirely mathematical. Rather, the analyses involve complex considerations and
judgments concerning financial and operating characteristics and other factors
that could affect the acquisition, public trading or other values of the
companies, business segments or transactions analyzed.
The estimates contained in Salomon Smith Barney's analyses and the
valuation ranges resulting from any particular analysis are not necessarily
indicative of actual values or predictive of future results or values, which may
be significantly more or less favorable than those suggested by its analyses. In
addition, analyses relating to the value of businesses or securities do not
necessarily purport to be appraisals or to reflect the prices at which
businesses or securities actually may be sold. Accordingly, Salomon Smith
Barney's analyses and estimates are inherently subject to substantial
uncertainty.
A copy of the discussion materials prepared by Salomon Smith Barney to
the Special Committee was filed as an exhibit to Amendment No. 2 to the combined
Transaction Statement on Schedule TO/13E-3 filed by TD Bank with the Securities
and Exchange Commission and will be available for inspection and copying at TD
Waterhouse's principal executive offices during regular business hours by any
interested stockholder of TD Waterhouse or any representative of such
stockholder who has been so designated in writing and also may be inspected and
copied at the office of, and obtained by mail from, the Securities and Exchange
Commission.
Salomon Smith Barney's discussion materials and opinion were among many
factors considered by the Special Committee in its evaluation of the Offer and
the Revised Offer and should not be viewed as determinative of the views of the
Special Committee or management of TD Waterhouse with respect to the Revised
Offer Price or the Revised Offer.
The following is a summary of the material financial analyses included
in Salomon Smith Barney's discussion materials reviewed with the Special
Committee on October 25, 2001:
SELECTED COMPANIES ANALYSIS
Using publicly available information, Salomon Smith Barney analyzed the
market values and trading multiples of the following three selected publicly
traded companies in the on-line brokerage industry:
The Charles Schwab Corporation
E*Trade Group, Inc.
Ameritrade Holding Corporation
Salomon Smith Barney compared enterprise values, calculated as equity
market value plus net debt, of TD Waterhouse and the selected companies as
multiples of latest 12 months and estimated calendar year 2002 revenues, latest
quarter annualized earnings before taxes, goodwill amortization, marketing
expense and restructuring charge, commonly referred to as "EBTMA," and latest
tangible book value. Salomon Smith Barney also compared equity values of TD
Waterhouse and the selected companies as multiples of calendar year 2002
estimated earnings per share, commonly referred to as "EPS". Salomon Smith
Barney applied multiples derived from the selected companies to corresponding
financial data of TD Waterhouse based on internal estimates of TD Waterhouse's
management and research analysts' estimates. Financial data for the selected
companies were based on press releases, public filings and research analysts'
estimates. All multiples were based on closing stock prices on October 23, 2001
and
12
historical financial data for the period ended September 30, 2001. This analysis
implied an equity reference range for TD Waterhouse of approximately $9.50 to
$11.50 per Share.
PREMIUMS ANALYSIS
Salomon Smith Barney reviewed the premiums paid in 86 selected going
private transactions announced since January 1, 1994 and 28 selected going
private transactions announced since January 1, 2000. Salomon Smith Barney
reviewed the purchase prices paid in the selected transactions relative to the
target company's closing stock prices one trading day and 20 trading days prior
to public announcement of the transaction. Salomon Smith Barney then applied
median premiums implied in the selected transactions over those specified
periods to the closing prices of TD Waterhouse common stock one trading day and
20 trading days prior to October 10, 2001 (the date of public announcement of
the Offer). This analysis implied an average equity reference range for TD
Waterhouse of approximately $7.64 to $10.26 per Share based on closing prices of
TD Waterhouse common stock one trading day and 20 trading days prior to October
10, 2001.
Salomon Smith Barney also reviewed the market value appreciation in the
common stock of the selected companies in the on-line brokerage industry during
the period October 9, 2001 (the trading day prior to public announcement of the
Offer) to October 23, 2001 and applied the average percentage appreciation for
the selected companies to the closing price of TD Waterhouse common stock on
October 9, 2001. This analysis resulted in an adjusted price of TD Waterhouse
common stock of $8.02, referred to as the adjusted price for TD Waterhouse
common stock. Salomon Smith Barney then applied the one trading day median
premium implied in the selected transactions to the adjusted price of TD
Waterhouse common stock. This analysis implied an average equity reference range
for TD Waterhouse of approximately $9.33 to $11.00 per Share based on the
adjusted price of TD Waterhouse common stock.
DISCOUNTED CASH FLOW ANALYSIS
Salomon Smith Barney performed a discounted cash flow analysis of TD
Waterhouse to estimate the present value of the stand-alone after-tax free cash
flows that TD Waterhouse could generate over fiscal years 2002 through 2007,
based on internal estimates of TD Waterhouse's management in the case of fiscal
years 2002 and 2003 and based on discussions with and guidance from TD
Waterhouse's management in the case of fiscal years 2004 through 2007. Salomon
Smith Barney derived a terminal value for TD Waterhouse by applying a range of
selected net income multiples of 24.8x to 26.8x to TD Waterhouse's 2007
estimated net income. The present value of the cash flows and terminal values
were calculated using selected discount rates ranging from 17.8% to 21.3%. This
analysis implied an equity reference range for TD Waterhouse of approximately
$9.54 to $11.54 per Share.
PRECEDENT TRANSACTION ANALYSIS
Using publicly available information, Salomon Smith Barney reviewed the
initial offer and final offer prices and implied transaction value multiples
paid or proposed to be paid in Credit Suisse First Boston Corporation's
acquisition of CSFBdirect, referred to as the CSFBdirect transaction. Salomon
Smith Barney compared implied transaction values in the CSFBdirect transaction
as multiples of, among other things, latest 12 months and latest quarter
annualized revenues and latest tangible book value. Salomon Smith Barney also
reviewed the implied premiums paid in the CSFBdirect transaction 20 trading days
and one trading day prior to public announcement of the CSFBdirect transaction.
Salomon Smith Barney then applied a range of selected multiples and premiums
derived from the final offer price in the CSFBdirect transaction to
corresponding financial data of TD Waterhouse. This analysis implied an equity
reference range for TD Waterhouse of approximately $7.00 to $9.00 per Share.
13
* * *
In performing its analyses, Salomon Smith Barney also reviewed and
considered other factors, including: historical trading prices and trading
volumes for TD Waterhouse common stock for the period June 23, 1999 (the date of
TD Waterhouse's initial public offering) through October 23, 2001; publicly
available research analyst estimates relating to TD Waterhouse; the ownership
profile and public float of TD Waterhouse and selected companies in the on-line
brokerage industry; financial and other operating data of selected companies in
the on-line brokerage industry; premiums implied for TD Waterhouse based on the
Offer Price and closing prices of TD Waterhouse common stock for specified
periods and the adjusted price of TD Waterhouse common stock; and the
relationship between movements in TD Waterhouse common stock, movements in the
common stock of selected companies in the on-line brokerage industry and
movements in the NASDAQ index for the period June 23, 1999 (the date of TD
Waterhouse's initial public offering) through October 23, 2001.
In the ordinary course of business, Salomon Smith Barney and its
affiliates may actively trade or hold the securities of TD Waterhouse for their
own account or for the account of customers and, accordingly, may at any time
hold a long or short position in those securities. Citigroup Inc., an affiliate
of Salomon Smith Barney, currently holds shares of TD Waterhouse common stock.
Salomon Smith Barney and its affiliates in the past have provided services to TD
Waterhouse and TD Bank unrelated to the Offer, for which services Salomon Smith
Barney and its affiliates have received compensation. Since June 1999, Salomon
Smith Barney has received fees totaling approximately $3.1 million in the
aggregate for services rendered to TD Waterhouse and approximately $708,430 in
the aggregate for services rendered to TD Bank. In addition, Salomon Smith
Barney and its affiliates, including Citigroup Inc. and its affiliates, may
maintain relationships with TD Waterhouse, TD Bank and their respective
affiliates.
Salomon Smith Barney is an internationally recognized investment
banking firm and was selected by the Special Committee based on its reputation
within the financial community and experience, expertise and familiarity with
companies in the on-line brokerage industry. Salomon Smith Barney regularly
engages in the valuation of businesses and their securities in connection with
mergers and acquisitions, negotiated underwritings, competitive bids, secondary
distributions of listed and unlisted securities, private placements and
valuations for estate, corporate and other purposes.
(c) INTENT TO TENDER
To the best knowledge of TD Waterhouse, as of the date of this
Statement, each executive officer, director, affiliate or subsidiary of TD
Waterhouse who owns Shares presently intends to tender in the Revised Offer all
Shares that they own of record or beneficially, other than Shares, if any, that
they may have the right to purchase by exercising stock options, Shares, if any,
that if tendered would cause them to incur liability under the short-swing
profits provisions of the Securities Exchange Act of 1934, as amended, or
Shares, if any, which are restricted shares.
14
ITEM 9. EXHIBITS.
(a)(1) -- Offer to Purchase, dated October 17, 2001.*
(a)(2) -- Supplement to the Offer to Purchase, dated October 31, 2001****
(a)(3) -- Schedule TO/13E-3 filed by TD Bank and the Purchaser (incorporated by
reference to the combined transaction statement on Schedule TO/13E-3 filed by
Parent and the Purchaser on October 17, 2001, as amended by Amendment No. 1
filed on October 31, 2001, Amendment No. 2 filed on November 1, 2001 and
Amendment No. 3 filed on November 5, 2001).
(a)(4) -- Schedule 13E-3 filed by the Company (incorporated by reference to the
transaction statement on Schedule 13E-3 filed by the Company on November 13,
2001).
(a)(5) -- Letter of Transmittal.****
(a)(6) -- Letter dated October 30, 2001 to stockholders of TD Waterhouse. ***
(a)(7) -- Text of press release issued by TD Bank on October 30, 2001. ***
(a)(8) -- Notice of Guaranteed Delivery.****
(a)(9) -- Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
other Nominees.****
(a)(10) -- Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.****
(a)(11) -- Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.****
(a)(12) -- Instructions for Form W8-BEN.****
(a)(13) -- Summary advertisement dated October 17, 2001.*
(a)(14) -- Text of press release issued by TD Bank, dated October 10, 2001.*
(e)(1) -- TD Waterhouse's Proxy Statement dated January 20, 2001 disseminated in
connection with the 2001 Annual Meeting of Stockholders of TD Waterhouse
(incorporated by reference to the Schedule 14A of TD Waterhouse filed on January
26, 2001 (File No. 001-15101).
(e)(2) -- Amended and Restated Support and Exchange Agreement dated April 13,
2000 by and among the Company, TD Waterhouse Canada, TD Waterhouse Holdings,
Inc., TD Securities, Inc., CT Financial Services, Inc., and TD Bank
(incorporated by reference to Exhibit 4.1 of the Company's Quarterly Report on
Form 10-Q for the quarterly period ended April 30, 2000).
(e)(3) -- 1999 TD Waterhouse Group, Inc. Stock Incentive Plan (incorporated by
reference to Exhibit 4.1 of the Company's Registration Statement on Form S-8,
Registration No. 333-40236).
15
(e)(4) -- TD Waterhouse Group, Inc. Covered Employee Cash Incentive Plan.**
(e)(5) -- The Toronto-Dominion Bank 2000 Stock Incentive Plan.**
(e)(6) -- Employment Agreement, dated as of October 1, 1999 between Stephen D.
McDonald and the Company. (incorporated by reference to Exhibit 10.6 of the
Company's Annual Report on Form 10-K for the fiscal year ended October 31,
1999).
(e)(7) -- Employment Agreement, dated as of October 1, 1999 between Frank J.
Petrilli and the Company (incorporated by reference to Exhibit 10.7 of the
Company's Annual Report on Form 10-K for the fiscal year ended October 31,
1999).
(e)(8) -- Employment Agreement, dated as of October 1, 1999 between John G. See
and the Company. (incorporated by reference to Exhibit 10.8 of the Company's
Annual Report on Form 10-K for the fiscal year ended October 31, 1999).
(e)(9) -- Employment Agreement, effective as of June 1, 2000 between Bharat B.
Masrani and the Company.**
(e)(10) -- Employment Agreement, dated as of October 1, 1999 between Richard J.
Rzasa and the Company.**
(e)(11) -- Master Services Agreement between TD Waterhouse and TD Bank dated
June 28, 1999, as amended.**
(e)(12) -- Amendment to the Master Services Agreement between TD Bank and TD
Waterhouse effective as of June 28, 1999.**
(e)(13) -- Amendment to the Master Services Agreement between TD Bank and TD
Waterhouse dated April 13, 2000.**
(e)(14) -- Tax Sharing Agreement between TD Waterhouse and TD Waterhouse
Holdings, Inc.**
(e)(15) -- TD Bank Long Term Capital Plan. (incorporated by reference to Exhibit
10.5 of the Company's Annual Report on Form 10-K for the fiscal year ended
October 31, 1999).
* Incorporated by reference to the Schedule TO/13E-3, filed by TD Bank
and the Purchaser on October 17, 2001.
** Incorporated by reference to the Company's Annual Report on Form 10-K
for the fiscal year ended October 31, 2000.
*** Incorporated by reference to the Schedule 14D-9 filed by TD Waterhouse
on October 31, 2001.
**** Incorporated by reference to Amendment no. 2 to the Schedule TO/13E-3
filed by TD Bank and the Purchaser on November 1, 2001.
16
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
TD WATERHOUSE GROUP, INC.
Dated: November 13, 2001 By: /s/ RICHARD H. NEIMAN, ESQ.
---------------------------------
Richard H. Neiman, Esq.
Executive Vice President, General
Counsel and Secretary
17
Exhibit Index
(a)(1) -- Offer to Purchase, dated October 17, 2001.*
(a)(2) -- Supplement to the Offer to Purchase, dated October 31, 2001****
(a)(3) -- Schedule TO/13E-3 filed by TD Bank and the Purchaser (incorporated by
reference to the combined transaction statement on Schedule TO/13E-3 filed by
Parent and the Purchaser on October 17, 2001, as amended by Amendment No. 1
filed on October 31, 2001, Amendment No. 2 filed on November 1, 2001 and
Amendment No. 3 filed on November 5, 2001).
(a)(4) -- Schedule 13E-3 filed by the Company (incorporated by reference to the
transaction statement on Schedule 13E-3 filed by the Company on November 13,
2001).
(a)(5) -- Letter of Transmittal.****
(a)(6) -- Letter dated October 30, 2001 to stockholders of TD Waterhouse. ***
(a)(7) -- Text of press release issued by TD Bank on October 30, 2001. ***
(a)(8) -- Notice of Guaranteed Delivery.****
(a)(9) -- Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
other Nominees.****
(a)(10) -- Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.****
(a)(11) -- Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.****
(a)(12) -- Instructions for Form W8-BEN.****
(a)(13) -- Summary advertisement dated October 17, 2001.*
(a)(14) -- Text of press release issued by TD Bank, dated October 10, 2001.*
(e)(1) -- TD Waterhouse's Proxy Statement dated January 20, 2001 disseminated in
connection with the 2001 Annual Meeting of Stockholders of TD Waterhouse
(incorporated by reference to the Schedule 14A of TD Waterhouse filed on January
26, 2001 (File No. 001-15101).
(e)(2) -- Amended and Restated Support and Exchange Agreement dated April 13,
2000 by and among the Company, TD Waterhouse Canada, TD Waterhouse Holdings,
Inc., TD Securities, Inc., CT Financial Services, Inc., and TD Bank
(incorporated by reference to Exhibit 4.1 of the Company's Quarterly Report on
Form 10-Q for the quarterly period ended April 30, 2000).
(e)(3) -- 1999 TD Waterhouse Group, Inc. Stock Incentive Plan (incorporated by
reference to Exhibit 4.1 of the Company's Registration Statement on Form S-8,
Registration No. 333-40236).
(e)(4) -- TD Waterhouse Group, Inc. Covered Employee Cash Incentive Plan.**
(e)(5) -- The Toronto-Dominion Bank 2000 Stock Incentive Plan.**
(e)(6) -- Employment Agreement, dated as of October 1, 1999 between Stephen D.
McDonald and the Company. (incorporated by reference to Exhibit 10.6 of the
Company's Annual Report on Form 10-K for the fiscal year ended October 31,
1999).
(e)(7) -- Employment Agreement, dated as of October 1, 1999 between Frank J.
Petrilli and the Company (incorporated by reference to Exhibit 10.7 of the
Company's Annual Report on Form 10-K for the fiscal year ended October 31,
1999).
(e)(8) -- Employment Agreement, dated as of October 1, 1999 between John G. See
and the Company. (incorporated by reference to Exhibit 10.8 of the Company's
Annual Report on Form 10-K for the fiscal year ended October 31, 1999).
(e)(9) -- Employment Agreement, effective as of June 1, 2000 between Bharat B.
Masrani and the Company.**
(e)(10) -- Employment Agreement, dated as of October 1, 1999 between Richard J.
Rzasa and the Company.**
(e)(11) -- Master Services Agreement between TD Waterhouse and TD Bank dated
June 28, 1999, as amended.**
(e)(12) -- Amendment to the Master Services Agreement between TD Bank and TD
Waterhouse effective as of June 28, 1999.**
(e)(13) -- Amendment to the Master Services Agreement between TD Bank and TD
Waterhouse dated April 13, 2000.**
(e)(14) -- Tax Sharing Agreement between TD Waterhouse and TD Waterhouse
Holdings, Inc.**
(e)(15) -- TD Bank Long Term Capital Plan. (incorporated by reference to Exhibit
10.5 of the Company's Annual Report on Form 10-K for the fiscal year ended
October 31, 1999).
* Incorporated by reference to the Schedule TO/13E-3, filed by TD Bank
and the Purchaser on October 17, 2001.
** Incorporated by reference to the Company's Annual Report on Form 10-K
for the fiscal year ended October 31, 2000.
*** Incorporated by reference to the Schedule 14D-9 filed by TD Waterhouse
on October 31, 2001.
**** Incorporated by reference to Amendment no. 2 to the Schedule TO/13E-3
filed by TD Bank and the Purchaser on November 1, 2001.