þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended September 30, 2010 | ||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
Delaware | 82-0543156 | |
(State or other jurisdiction
of
incorporation or organization) |
(I.R.S. Employer
Identification Number) |
Title of Each Class | Name of Each Exchange on Which Registered | |
Common Stock $0.01 par value
|
The NASDAQ Stock Market LLC |
Large accelerated
filer
þ
|
Accelerated filer o |
Non-accelerated
filer
o
(Do not check if a smaller reporting company) |
Smaller reporting company o |
2
Item 1. | Business |
| Focus on brokerage services. We continue to focus on attracting active traders, long-term investors and RIAs to our brokerage services. This focused strategy is designed to enable us to maintain our low operating cost structure while offering our clients outstanding products and services. We primarily execute client securities transactions on an agency, rather than a principal, basis. We maintain only a small inventory of fixed income securities to meet client requirements. | |
| Provide a comprehensive long-term investor solution. We continue to expand our suite of diversified investment products and services to best serve investors needs. We help clients make investment decisions by providing simple-to-use investment tools, guidance, education and objective third-party research. | |
| Maintain industry leadership and market share with active traders. We help active traders make better-informed investment decisions by offering fast access to markets, insight into market trends and innovative tools such as strategy back-testing and comprehensive options research and trading capabilities. |
3
| Continue to be a leader in the RIA industry. We provide RIAs with comprehensive brokerage and custody services supported by our robust integrated technology platform, customized personal service and practice management solutions. | |
| Leverage our infrastructure to add incremental revenue. Through our proprietary technology, we are able to provide a very robust online experience for long-term investors and active traders. Our low-cost, scalable systems provide speed, reliability and quality trade execution services for clients. The scalable capacity of our trading system allows us to add a significant number of transactions while incurring minimal additional fixed costs. | |
| Continue to be a low-cost provider of quality services. We achieve low operating costs per trade by creating economies of scale, utilizing our proprietary transaction-processing systems, continuing to automate processes and locating much of our operations in low-cost geographical areas. This low fixed-cost infrastructure provides us with significant financial flexibility. | |
| Continue to differentiate our offerings through innovative technologies and service enhancements. We have been an innovator in our industry over our 35-year history. We continually strive to provide our clients with the ability to customize their trading experience. We provide our clients greater choice by tailoring our features and functionality to meet their specific needs. | |
| Leverage the TD Ameritrade brand. We believe that we have a superior brand identity and that our advertising has established TD Ameritrade as a leading brand in the retail brokerage market. | |
| Continue to aggressively pursue growth through acquisitions. When evaluating potential acquisitions, we look for transactions that will give us operational leverage, technological leverage, increased market share or other strategic opportunities. |
| TD Ameritrade ® is our core offering for self-directed retail investors. We offer sophisticated tools and services, including TD Ameritrade Command Center 2.0, SnapTicket, tm Trade Triggers, tm QuoteScope, tm Market Motion Detector, Pattern Matcher, tm StrategyDesk tm and WealthRuler. tm We offer futures and foreign exchange trading to TD Ameritrade brokerage clients through our thinkorswim from TD Ameritrade desktop application. We offer TD Ameritrade Apex tm for clients who place an average of five trades per month over a three-month period or maintain a total account value of at least $100,000. Apex clients receive free access to services that are normally available on a paid subscription basis, as well as access to exclusive services and content. |
4
| TD Ameritrade Institutional is a leading provider of comprehensive brokerage and custody services to more than 4,000 independent RIAs and their clients. Our advanced technology platform, coupled with personal support from our dedicated service teams, allows RIAs to run their practices more effectively and efficiently while optimizing time with clients. Additionally, TD Ameritrade Institutional provides a robust offering of products, programs and services. These services are all designed to help advisors build their businesses. | |
| thinkorswim by TD Ameritrade provides a suite of trading platforms serving self-directed and institutional traders and money managers. thinkorswim platforms have easy-to-use interfaces, sophisticated analytical and research tools, and fast and efficient order execution for complex trading strategies. thinkorswim clients trade a broad range of products including stock and stock options, index options, futures and futures options, foreign exchange, mutual funds and fixed income. | |
| Investools offers a comprehensive suite of investor education products and services for stock, option, foreign exchange, futures, mutual fund and fixed-income investors. Investools educational products and services are primarily built around an investing method that is designed to teach both experienced and beginning investors how to approach the selection process for investment securities and actively manage their investment portfolios. Course offerings are generally combined with web-based tools, personalized instruction techniques and ongoing service and support and are offered in a variety of learning formats. Designed for the advanced student, continuing education programs offer students comprehensive access to a multitude of products and services priced either individually or on a bundled basis. Typically included in the continuing education bundles are additional curriculum, online courses, live workshops and coaching services. | |
| Amerivest tm is an online advisory service that develops portfolios of exchange-traded funds (ETFs) to help long-term investors pursue their financial goals. Our subsidiary, Amerivest Investment Management, LLC, recommends an investment portfolio based on our proprietary automated five-step process centered on an investors goals and risk tolerance. | |
| TD Ameritrade Corporate Services provides self-directed brokerage services to employees and executives of corporations, either directly in partnership with the employer or through joint marketing relationships with third-party administrators, such as 401(k) providers and employee benefit consultants. Trust and custody services are also offered to a wide range of plan types through our TD Ameritrade Trust Company subsidiary. |
| Common and preferred stock. Clients can purchase common and preferred stocks and American Depository Receipts traded on any United States exchange or quotation system. | |
| Exchange-Traded Funds. ETFs are baskets of securities (stocks or bonds) that typically track recognized indices. They are similar to mutual funds, except that they trade on an exchange like stocks. On October 7, 2010, we introduced our new ETF Market Center, offering our clients over 100 commission-free ETFs, each of which has been carefully selected by independent experts at Morningstar Associates. Trades in these ETFs are commission-free, provided the funds are held for 30 days or longer. We also introduced a redesigned Web site that includes an ETF screener, along with independent research and commentary to assist investors in their decision-making. | |
| Options. We offer a full range of option trades, including spreads, straddles and strangles. All option trades, including complex trades, are accessible on our trading platform. | |
| Futures. We offer futures trades in a wide variety of commodities, stock indices and currencies. | |
| Foreign exchange. We offer access to trading in over 100 different currency pairs. |
5
| Mutual funds. Clients can compare and select from a portfolio of over 13,000 mutual funds from leading fund families, including a broad range of no-transaction-fee (NTF) funds. Clients can also easily exchange funds within the same mutual fund family. | |
| Fixed income. We offer our clients access to a variety of Treasury, corporate, government agency and municipal bonds, as well as mortgage-backed securities and certificates of deposit. | |
| Margin lending. We extend credit to clients that maintain margin accounts. | |
| Cash management services. Through third-party banking relationships, we offer FDIC-insured deposit accounts and money market mutual funds to our clients as cash sweep alternatives. We also offer checking and ATM services through these relationships. |
Percentage of Net Revenues
|
||||||||||||
Fiscal Year Ended September 30, | ||||||||||||
Class of Service | 2010 | 2009 | 2008 | |||||||||
Commissions and transaction fees
|
46.6 | % | 52.0 | % | 40.1 | % | ||||||
Net interest revenue
|
16.5 | % | 14.4 | % | 21.7 | % | ||||||
Insured deposit account fees
|
26.6 | % | 23.6 | % | 24.8 | % | ||||||
Investment product fees
|
5.1 | % | 7.7 | % | 12.2 | % | ||||||
Other revenues
|
5.2 | % | 2.3 | % | 1.2 | % | ||||||
Net revenues
|
100.0 | % | 100.0 | % | 100.0 | % | ||||||
| Ensuring prompt response to client service calls through adequate staffing with properly trained and motivated personnel in our client service departments, a majority of whom hold the Series 7 license; | |
| Tailoring client service to the particular expectations of the clients of each of our client segments; and | |
| Expanding our use of technology to provide automated responses to the most typical inquiries generated in the course of clients securities trading and related activities. |
| Web sites. Our Web sites provide basic information on how to use our services, as well as an in-depth education center that includes a guide to online investing and an encyclopedia of finance. Ted, our Virtual Investment Consultant, is a Web tool that allows retail clients to interact with a virtual representative to ask questions regarding our products, tools and services. | |
| Branches. We offer a nationwide network of over 100 retail branches, located primarily in large metropolitan areas. |
6
| E-mail. Clients are encouraged to use e-mail to contact our client service representatives. Our operating standards require a response within 24 hours of receipt of the e-mail; however, we strive to respond within four hours after receiving the original message. | |
| Telephone. For clients who choose to call or whose inquiries necessitate calling one of our client service representatives, we provide a toll-free number that connects to advanced call handling systems. These systems provide automated answering and directing of calls to the proper department. Our systems also allow linkage between caller identification and the client database to give the client service representative immediate access to the clients account data when the call is received. Client service representatives are available 24 hours a day, seven days a week (excluding market holidays). |
7
| Maintaining client accounts; | |
| Extending credit in a margin account to the client; | |
| Engaging in securities lending and borrowing transactions; | |
| Settling securities transactions with clearinghouses such as The Depository Trust & Clearing Corporation and The Options Clearing Corporation; | |
| Settling commissions and transaction fees; | |
| Preparing client trade confirmations and statements; | |
| Performing designated cashiering functions, including the delivery and receipt of funds and securities to or from the client; | |
| Possession, control and safeguarding of funds and securities in client accounts; | |
| Processing cash sweep transactions to and from insured deposit accounts and money market mutual funds; | |
| Transmitting tax accounting information to the client and to the applicable tax authority; and | |
| Forwarding prospectuses, proxy materials and other shareholder information to clients. |
8
9
10
11
12
| sales practices and suitability of financial products and services; | |
| auction rate securities; | |
| money market mutual funds; | |
| mutual fund trading; | |
| anti-money laundering policies and procedures; | |
| client cash sweep arrangements; |
13
| regulatory reporting obligations; | |
| risk management; | |
| valuation of financial instruments; | |
| best execution practices; | |
| client privacy; | |
| system security and safeguarding practices; | |
| advertising claims; and | |
| brokerage services provided to investment advisors. |
| difficulties in the integration of acquired operations, services and products; | |
| failure to achieve expected synergies; | |
| diversion of managements attention from other business concerns; |
14
| assumption of unknown material liabilities of acquired companies; | |
| amortization of acquired intangible assets, which could reduce future reported earnings; | |
| potential loss of clients or key employees of acquired companies; and | |
| dilution to existing stockholders. |
| speculation in the investment community or the press about, or actual changes in, our competitive position, organizational structure, executive team, operations, financial condition, financial reporting and results, effectiveness of cost reduction initiatives, or strategic transactions; | |
| the announcement of new products, services, acquisitions, or dispositions by us or our competitors; and | |
| increases or decreases in revenue or earnings, changes in earnings estimates by the investment community, and variations between estimated financial results and actual financial results. |
| incur additional indebtedness in excess of $100 million that includes any covenants that are more restrictive (taken as a whole) to us than those contained in the revolving credit facility, unless the revolving credit facility is amended to include the more restrictive covenants; | |
| incur additional indebtedness at our subsidiaries; | |
| create liens; | |
| sell all or substantially all of our assets; |
15
| change the nature of our business; | |
| merge or consolidate with another entity; and | |
| conduct transactions with affiliates. |
16
| the presence of a classified board of directors; | |
| the ability of the board of directors to issue and determine the terms of preferred stock; | |
| advance notice requirements for inclusion of stockholder proposals at stockholder meetings; and | |
| the anti-takeover provisions of Delaware law. |
17
Item 1B. | Unresolved Staff Comments |
Item 2. | Properties |
Item 3. | Legal Proceedings |
18
19
93
94
95
Item 5.
Market
for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
Common Stock Price
For the Fiscal Year Ended September 30,
2010
2009
High
Low
High
Low
$
21.30
$
17.91
$
18.43
$
9.34
$
20.06
$
16.55
$
14.88
$
10.09
$
20.58
$
15.18
$
19.34
$
13.23
$
16.98
$
14.53
$
20.23
$
16.45
20
Table of Contents
Period Ended
Index
9/30/05
9/29/06
9/30/07
9/30/08
9/30/09
9/30/10
100.00
114.98
111.14
101.68
119.74
98.51
100.00
110.79
129.01
100.66
93.70
103.22
100.00
127.80
134.52
140.67
104.31
77.60
21
Table of Contents
Total Number of
Maximum Number
Shares Purchased as
of Shares that May
Total Number of
Average Price
Part of Publicly
Yet Be Purchased
Period
Shares Purchased
Paid per Share
Announced Program
Under the Program
1,143,238
$
15.17
1,000,100
292
$
15.78
12,000,000
4,209
$
15.95
12,000,000
1,147,739
$
15.17
1,000,100
12,000,000
Item 6.
Selected
Financial Data
Fiscal Year Ended
Sept. 30,
Sept. 30,
Sept. 30,
Sept. 30,
Sept. 29,
2010
2009
2008
2007
2006*
(In thousands, except per share amounts)
$
2,560,691
$
2,407,926
$
2,537,356
$
2,176,946
$
1,803,531
965,373
1,101,478
1,341,021
1,146,995
869,871
592,188
643,705
803,917
645,900
526,759
$
1.01
$
1.11
$
1.35
$
1.08
$
0.97
$
1.00
$
1.10
$
1.33
$
1.06
$
0.95
585,128
578,972
593,746
598,503
544,307
591,922
587,252
603,133
608,263
555,465
$
$
$
$
$
6.00
22
Table of Contents
As of
Sept. 30,
Sept. 30,
Sept. 30,
Sept. 30,
Sept. 29,
2010
2009
2008
2007
2006
(In thousands)
$
741,492
$
791,211
$
674,135
$
413,787
$
363,650
3,592
52,071
369,133
76,800
65,275
14,726,918
18,371,810
15,951,522
18,092,327
16,558,469
1,323,068
1,443,465
1,444,544
1,481,948
1,710,712
3,771,879
3,551,283
2,925,038
2,154,921
1,730,234
*
We declared and paid a special cash dividend of $6.00 per share
during fiscal 2006 in connection with our acquisition of TD
Waterhouse Group, Inc. on January 24, 2006.
Item 7.
Managements
Discussion and Analysis of Financial Condition and Results of
Operations
23
Table of Contents
24
Table of Contents
25
Table of Contents
26
Table of Contents
27
Table of Contents
28
Table of Contents
Fiscal Year Ended September 30,
2010
2009
2008
% of Net
% of Net
% of Net
$
Revenues
$
Revenues
$
Revenues
$
1,114,438
43.5
%
$
1,219,236
50.6
%
$
1,438,123
56.7
%
(57,032
)
(2.2
)%
(45,891
)
(1.9
)%
(36,899
)
(1.5
)%
(100,463
)
(3.9
)%
(73,870
)
(3.1
)%
(59,275
)
(2.3
)%
(44,858
)
(1.8
)%
(40,070
)
(1.7
)%
(78,447
)
(3.1
)%
(319,897
)
(12.5
)%
(415,700
)
(17.3
)%
(459,585
)
(18.1
)%
$
592,188
23.1
%
$
643,705
26.7
%
$
803,917
31.7
%
29
Table of Contents
10 vs. 09
09 vs. 08
Fiscal Year
Increase/
Increase/
2010
2009
2008
(Decrease)
(Decrease)
$
13,272
$
9,917
$
9,835
$
3,355
$
82
39,187
22,003
15,640
17,184
6,363
$
52,459
$
31,920
$
25,475
$
20,539
$
6,445
$
420.9
$
342.7
$
538.1
$
78.2
$
(195.4
)
682.2
568.1
628.7
114.1
(60.6
)
$
1,103.1
$
910.8
$
1,166.8
$
192.3
$
(256.0
)
3.13
%
3.41
%
5.38
%
(0.28
)%
(1.97
)%
1.72
%
2.55
%
3.95
%
(0.83
)%
(1.40
)%
2.07
%
2.81
%
4.50
%
(0.74
)%
(1.69
)%
30
Table of Contents
Interest Revenue (Expense)
10 vs. 09
09 vs. 08
Fiscal Year
Increase/
Increase/
2010
2009
2008
(Decrease)
(Decrease)
$
6.3
$
6.6
$
0.3
$
(0.3
)
$
6.3
333.1
234.2
527.1
98.9
(292.9
)
84.9
105.4
56.0
(20.5
)
49.4
0.9
3.5
35.0
(2.6
)
(31.5
)
(2.9
)
(4.1
)
(24.9
)
1.2
20.8
(1.4
)
(2.9
)
(55.4
)
1.5
52.5
420.9
342.7
538.1
78.2
(195.4
)
1.7
10.9
173.3
(9.2
)
(162.4
)
(0.9
)
(6.7
)
(161.8
)
5.8
155.1
$
421.7
$
346.9
$
549.6
$
74.8
$
(202.7
)
Average Balance
10 vs. 09
09 vs. 08
Fiscal Year
%
%
2010
2009
2008
Change
Change
$
4,675
$
3,916
$
12
19
%
N/A
6,991
4,491
8,138
56
%
(45
)%
536
450
416
19
%
8
%
1,070
1,060
1,269
1
%
(16
)%
13,272
9,917
9,835
34
%
1
%
481
1,242
5,446
(61
)%
(77
)%
$
13,753
$
11,159
$
15,281
23
%
(27
)%
$
8,548
$
6,219
$
4,261
37
%
46
%
1,643
1,231
3,200
33
%
(62
)%
10,191
7,450
7,461
37
%
(0
)%
481
1,242
5,446
(61
)%
(77
)%
$
10,672
$
8,692
$
12,907
23
%
(33
)%
10 vs. 09
09 vs. 08
Average Yield (Cost)
Net Yield
Net Yield
Fiscal Year
Increase/
Increase/
2010
2009
2008
(Decrease)
(Decrease)
0.13
%
0.17
%
2.47
%
(0.04
)%
(2.30
)%
4.70
%
5.14
%
6.37
%
(0.44
)%
(1.23
)%
0.09
%
0.33
%
2.71
%
(0.24
)%
(2.38
)%
(0.03
)%
(0.07
)%
(0.58
)%
0.04
%
0.51
%
3.13
%
3.41
%
5.38
%
(0.28
)%
(1.97
)%
0.34
%
0.86
%
3.13
%
(0.52
)%
(2.27
)%
(0.19
)%
(0.53
)%
(2.92
)%
0.34
%
2.39
%
3.02
%
3.07
%
3.54
%
(0.05
)%
(0.47
)%
31
Table of Contents
Fee Revenue
10 vs. 09
09 vs. 08
Fiscal Year
Increase/
Increase/
2010
2009
2008
(Decrease)
(Decrease)
$
9.9
$
108.5
$
212.2
$
(98.6
)
$
(103.7
)
119.4
75.8
97.2
43.6
(21.4
)
$
129.3
$
184.3
$
309.4
$
(55.0
)
$
(125.1
)
Average Balance
10 vs. 09
09 vs. 08
Fiscal Year
%
%
2010
2009
2008
Change
Change
$
9,846
$
23,312
$
26,976
(58
)%
(14
)%
51,734
36,113
43,806
43
%
(18
)%
$
61,580
$
59,425
$
70,782
4
%
(16
)%
Average Yield
10 vs. 09
09 vs. 08
Fiscal Year
Increase/
Increase/
2010
2009
2008
(Decrease)
(Decrease)
0.10
%
0.46
%
0.77
%
(0.36
)%
(0.31
)%
0.23
%
0.21
%
0.22
%
0.02
%
(0.01
)%
0.21
%
0.31
%
0.43
%
(0.10
)%
(0.12
)%
10 vs. 09
09 vs. 08
Fiscal Year
%
%
2010
2009
2008
Change
Change
93.33
93.27
75.72
0
%
23
%
trade(1)
$
12.79
$
13.35
$
13.44
(4
)%
(1
)%
371,835
371,579
301,061
0
%
23
%
12.0
12.9
11.4
(7
)%
13
%
4.8
%
5.1
%
4.5
%
(6
)%
13
%
6.9
%
7.3
%
6.3
%
(5
)%
16
%
251.0
251.0
251.5
0
%
(0
)%
(1)
Average commissions and transaction fees per trade excludes
thinkorswim active trader and TD Waterhouse UK businesses.
32
Table of Contents
Fiscal Year
2010
2009
2008
7,563,000
6,895,000
6,380,000
668,000
737,000
648,000
197,000
102,000
(285,000
)
(266,000
)
(235,000
)
7,946,000
7,563,000
6,895,000
5
%
10
%
8
%
5,279,000
4,918,000
4,597,000
5,455,000
5,279,000
4,918,000
3
%
7
%
7
%
$
302.0
$
278.0
$
302.7
$
354.8
$
302.0
$
278.0
17
%
9
%
(8
)%
$
33.9
$
26.6
$
22.8
11
%
10
%
8
%
33
Table of Contents
Fiscal Year
10 vs. 09
09 vs. 08
2010
2009
2008
% Change
% Change
$
1,193.8
$
1,253.2
$
1,017.5
(5
)%
23
%
427.7
362.1
799.2
18
%
(55
)%
(6.1
)
(15.2
)
(249.6
)
(60
)%
(94
)%
421.7
346.9
549.6
22
%
(37
)%
682.2
568.1
628.7
20
%
(10
)%
129.3
184.3
309.4
(30
)%
(40
)%
1,233.2
1,099.3
1,487.7
12
%
(26
)%
133.8
55.4
32.2
141
%
72
%
2,560.7
2,407.9
2,537.4
6
%
(5
)%
622.4
511.2
503.3
22
%
2
%
0.8
N/A
(100
)%
90.4
70.9
44.6
27
%
59
%
106.9
83.1
69.6
29
%
19
%
142.9
124.3
101.8
15
%
22
%
57.0
45.9
36.9
24
%
24
%
100.5
73.9
59.3
36
%
25
%
132.2
127.6
108.3
4
%
18
%
250.0
197.1
173.3
27
%
14
%
(12.7
)
13.8
35.6
N/A
(61
)%
105.7
58.7
62.9
80
%
(7
)%
1,595.3
1,306.4
1,196.3
22
%
9
%
965.4
1,101.5
1,341.0
(12
)%
(18
)%
44.9
40.1
78.4
12
%
(49
)%
8.4
N/A
N/A
0.0
2.0
(0.9
)
(98
)%
N/A
53.3
42.1
77.5
27
%
(46
)%
912.1
1,059.4
1,263.5
(14
)%
(16
)%
319.9
415.7
459.6
(23
)%
(10
)%
$
592.2
$
643.7
$
803.9
(8
)%
(20
)%
35.1
%
39.2
%
36.4
%
$
1,303.0
$
1,444.3
$
1,469.2
(10
)%
(2
)%
3.09
%
2.44
%
4.99
%
34
Table of Contents
35
Table of Contents
36
Table of Contents
37
Table of Contents
38
Table of Contents
39
Table of Contents
September 30,
2010
2009
Change
$
741,492
$
791,211
$
(49,719
)
(426,618
)
(473,996
)
47,378
(50,937
)
(25,143
)
(25,794
)
(28,944
)
(18,935
)
(10,009
)
234,993
273,137
(38,144
)
49,496
(49,496
)
12,284
4,658
7,626
828,979
814,836
14,143
$
1,076,256
$
1,142,127
$
(65,871
)
$
1,142,127
912,085
12,536
1,248,557
173,706
(352,504
)
(91,198
)
(265,599
)
(169,200
)
(1,424,407
)
(10,595
)
(99,252
)
$
1,076,256
40
Table of Contents
41
Table of Contents
42
Table of Contents
Payments Due by Period (Fiscal Years):
Less Than
More Than
1 Year
1-3 Years
3-5 Years
5 Years
Contractual Obligations
Total
2011
2012-13
2014-15
After 2015
$
1,567,273
$
42,150
$
328,743
$
568,513
$
627,867
23,654
10,677
10,785
2,192
352,827
46,732
85,350
73,121
147,624
224,967
157,466
40,486
10,288
16,727
18,138
18,138
147,368
147,368
$
2,334,227
$
422,531
$
465,364
$
654,114
$
792,218
(1)
Represents scheduled principal payments, estimated interest
payments and commitment fees pursuant to the Senior Notes, the
interest rate swaps, the Restated Revolving Facility and other
long-term debt obligations. Actual amounts of interest may vary
depending on changes in variable interest rates associated with
the interest rate swaps.
(2)
Our obligation to Joseph H. Moglia, our Chairman and former CEO,
for deferred compensation will become payable not sooner than
the day after Mr. Moglias employment with the Company
terminates. The obligation is presented in the fiscal 2011
column as the entire amount of the compensation has already been
earned by Mr. Moglia.
(3)
A significant portion of our income taxes payable as of
September 30, 2010 consists of liabilities for uncertain
tax positions and related interest and penalties. The timing of
payments, if any, on liabilities for uncertain tax positions
cannot be predicted with reasonable accuracy.
43
Table of Contents
Item 7A.
Quantitative
and Qualitative Disclosures About Market Risk
44
Table of Contents
45
Table of Contents
Item 8.
Financial
Statements and Supplementary Data
46
Table of Contents
47
Table of Contents
2010
2009
2008
(In thousands, except per share amounts)
$
1,193,761
$
1,253,154
$
1,017,456
427,723
362,076
799,189
(6,065
)
(15,165
)
(249,616
)
421,658
346,911
549,573
682,206
568,084
628,716
129,308
184,341
309,420
1,233,172
1,099,336
1,487,709
133,758
55,436
32,191
2,560,691
2,407,926
2,537,356
622,449
511,170
503,297
764
90,367
70,877
44,620
106,933
83,121
69,564
142,902
124,296
101,787
57,032
45,891
36,899
100,463
73,870
59,275
132,218
127,572
108,271
250,007
197,121
173,296
(12,732
)
13,829
35,628
105,679
58,701
62,934
1,595,318
1,306,448
1,196,335
965,373
1,101,478
1,341,021
44,858
40,070
78,447
8,392
38
2,003
(928
)
53,288
42,073
77,519
912,085
1,059,405
1,263,502
319,897
415,700
459,585
$
592,188
$
643,705
$
803,917
$
1.01
$
1.11
$
1.35
$
1.00
$
1.10
$
1.33
585,128
578,972
593,746
591,922
587,252
603,133
48
Table of Contents
Total
Accumulated
Common
Total
Additional
Other
Shares
Stockholders
Common
Paid-In
Retained
Treasury
Deferred
Comprehensive
Outstanding
Equity
Stock
Capital
Earnings
Stock
Compensation
Income (Loss)
(In thousands)
594,688
$
2,154,921
$
6,314
$
1,598,451
$
1,086,662
$
(537,547
)
$
431
$
610
803,917
803,917
(1,028
)
(1,028
)
(340
)
(340
)
(112
)
(112
)
802,437
(4,167
)
(4,167
)
(4,123
)
(74,568
)
(74,568
)
3
52
13
39
2,523
22,506
(8,594
)
31,100
40
187
167
312
(292
)
23,670
23,663
7
593,131
2,925,038
6,314
1,613,700
1,886,412
(580,664
)
146
(870
)
643,705
643,705
(302
)
(302
)
1,330
1,330
(232
)
(232
)
644,501
27,083
385,639
(24,209
)
409,848
(39,030
)
(466,144
)
(466,144
)
1,557
(18,412
)
18,412
4,366
37,227
(21,411
)
58,638
2
2
(49
)
27
24
25,020
25,019
1
587,109
3,551,283
6,314
1,574,638
2,530,117
(559,883
)
171
(74
)
592,188
592,188
1
1
125
125
592,314
(15,376
)
(265,599
)
(265,599
)
(169,200
)
(169,200
)
842
(14,677
)
14,677
3,531
28,189
(34,846
)
63,035
29
544
20
499
25
34,348
34,348
576,135
$
3,771,879
$
6,314
$
1,390,283
$
3,122,305
$
(747,271
)
$
196
$
52
49
Table of Contents
2010
2009
2008
(In thousands)
$
592,188
$
643,705
$
803,917
57,032
45,891
36,899
100,463
73,870
59,275
154,380
(70,674
)
(96,238
)
38
2,003
(928
)
5,854
6,285
5,145
(12,732
)
13,829
35,628
8,392
764
34,348
25,020
23,670
(15,653
)
(8,743
)
(13,448
)
214
874
(4
)
4,819,836
(5,553,862
)
(260,000
)
570,018
2,415,389
2,574,088
(1,679,171
)
1,222,255
794,043
(963
)
98,065
(99,732
)
4,910
32,852
10,920
(183,762
)
36,717
(43,287
)
(2,873
)
(4,077
)
(7,524
)
(557,302
)
(3,278,059
)
(2,621,996
)
(3,104,432
)
4,844,153
(242,905
)
(197,487
)
45,425
46,284
(8,622
)
9,738
(9,155
)
584,676
600,656
995,416
(91,198
)
(86,698
)
(98,836
)
86,423
623,837
(266,713
)
(274,470
)
599
(5,790
)
(1,100
)
(329,759
)
3,300
1,100
894,277
(368,066
)
52,208
317,015
16
11,688
5,226
(2
)
(146
)
10
(41,466
)
62,168
452,219
1,248,557
(10,595
)
(1,410,638
)
(111,500
)
(34,375
)
(1,097,808
)
(13,769
)
(5,002
)
(3,029
)
12,536
28,486
9,220
(265,599
)
(466,144
)
(74,568
)
(169,200
)
15,653
8,743
13,448
(593,055
)
(545,417
)
(1,187,112
)
126
(331
)
(175
)
(49,719
)
117,076
260,348
791,211
674,135
413,787
$
741,492
$
791,211
$
674,135
$
39,028
$
60,680
$
346,657
$
352,504
$
359,666
$
463,379
$
19,956
$
9,711
$
13,517
$
6,003
$
32,780
$
$
$
8,400
$
$
$
362,967
$
50
Table of Contents
1.
Nature of
Operations and Summary of Significant Accounting
Policies
51
Table of Contents
52
Table of Contents
53
Table of Contents
54
Table of Contents
2.
Business
Combinations
3.
Goodwill
and Acquired Intangible Assets
$
1,947,102
485,999
41,266
(1,300
)
(969
)
2,472,098
(782
)
(4,303
)
$
2,467,013
(1)
Purchase accounting adjustments for fiscal 2009 primarily
consist of $0.8 million (net of income taxes) of
adjustments decreasing exit liabilities related to the TD
Waterhouse Group, Inc. (TD Waterhouse) acquisition
in fiscal 2006, $0.3 million (net of income taxes) of
adjustments to liabilities related to the Fiserv
Trust Company acquisition and $0.2 million of net
adjustments to accruals for uncertain tax positions relating to
the TD Waterhouse acquisition and the Datek Online Holdings
Corp. (Datek) merger in fiscal 2002.
(2)
Represents the tax benefit realized on replacement stock awards
that were issued in connection with the Datek merger and the
thinkorswim acquisition. The tax benefit realized on a stock
award is recorded as a reduction of goodwill to the extent the
Company recorded fair value of the replacement award in the
purchase accounting. To the extent any gain realized on a stock
award exceeds the fair value of the replacement award recorded
in the purchase accounting, the tax benefit on the excess is
recorded as additional paid-in capital.
(3)
Purchase accounting adjustments for fiscal 2010 primarily
consist of adjustments to assumed liabilities relating to the
acquisition of thinkorswim.
55
Table of Contents
September 30,
2010
2009
Gross
Net
Gross
Net
Carrying
Accumulated
Carrying
Carrying
Accumulated
Carrying
Amount
Amortization
Amount
Amount
Amortization
Amount
$
1,230,469
$
(339,937
)
$
890,532
$
1,230,469
$
(261,183
)
$
969,286
100,904
(19,203
)
81,701
100,904
(4,509
)
96,395
10,100
(6,844
)
3,256
10,100
(1,658
)
8,442
5,486
(2,390
)
3,096
5,486
(561
)
4,925
145,674
145,674
145,674
145,674
$
1,492,633
$
(368,374
)
$
1,124,259
$
1,492,633
$
(267,911
)
$
1,224,722
Estimated
Amortization
Fiscal Year
Expense
$
96,714
92,897
91,630
91,171
90,288
515,885
$
978,585
4.
Cash and
Cash Equivalents
September 30,
2010
2009
$
234,993
$
273,137
426,618
473,996
50,937
25,143
28,944
18,935
$
741,492
$
791,211
56
Table of Contents
5.
Receivable
from and Payable to Brokers, Dealers and Clearing
Organizations
September 30,
2010
2009
$
1,000,607
$
1,591,706
11,927
11,777
191,237
163,982
3,952
10,276
$
1,207,723
$
1,777,741
$
1,868,724
$
2,455,833
1,519
8,974
26,319
5,875
37,753
20,935
$
1,934,315
$
2,491,617
6.
Allowance
for Doubtful Accounts on Receivables
2010
2009
2008
$
13,536
$
22,482
$
19,120
2,720
1,171
9,780
272
401
(5,144
)
(10,389
)
(6,819
)
$
11,112
$
13,536
$
22,482
7.
Property
and Equipment
September 30,
2010
2009
$
102,852
$
84,230
72,185
69,020
174,492
128,284
55,615
48,065
405,144
329,599
(132,933
)
(91,343
)
$
272,211
$
238,256
57
Table of Contents
8.
Long-term
Debt
September 30,
2010
2009
$
259,114
$
539,525
499,368
140,625
1,265,875
4,262
8,400
$
1,302,269
$
1,414,900
(1)
Balance includes a $9.3 million unrealized loss related to
an interest rate swap, and is net of unamortized discount of
$0.2 million.
(2)
Balance includes a $39.9 million unrealized loss related to
an interest rate swap, and is net of unamortized discount of
$0.4 million.
(3)
Balance is net of unamortized discount of $0.6 million.
$
4,262
250,000
500,000
500,000
$
1,254,262
58
Table of Contents
September 30,
2010
2009
$
49,235
$
59
Table of Contents
9.
Income
Taxes
2010
2009
2008
$
168,972
$
438,911
$
505,270
(3,770
)
47,113
50,196
315
350
357
165,517
486,374
555,823
145,349
(70,656
)
(76,843
)
9,031
(18
)
(19,395
)
154,380
(70,674
)
(96,238
)
$
319,897
$
415,700
$
459,585
60
Table of Contents
2010
2009
2008
35.0
%
35.0
%
35.0
%
2.4
2.4
2.6
0.5
0.5
(0.9
)
(0.2
)
0.9
0.1
(2.5
)
(0.3
)
0.3
(0.1
)
0.1
(0.1
)
35.1
%
39.2
%
36.4
%
61
Table of Contents
September 30,
2010
2009
$
83,532
$
104,744
8,960
707
21,504
23,490
21,516
15,575
4,037
4,936
15,272
164,165
34,031
25,958
2,431
188,852
342,006
(29,987
)
(21,587
)
158,865
320,419
(488,814
)
(493,445
)
(4,339
)
(3,791
)
(493,153
)
(497,236
)
$
(334,288
)
$
(176,817
)
62
Table of Contents
2010
2009
2008
$
310,255
$
227,025
$
135,096
15,367
87,894
103,409
2,911
338
555
(5,986
)
(4,494
)
(77
)
(170,739
)
(11,082
)
(3,272
)
(508
)
(876
)
$
148,536
$
310,255
$
227,025
10.
Capital
Requirements
63
Table of Contents
September 30,
2010
2009
Minimum
Minimum
Net Capital
Excess
Net Capital
Excess
Net Capital
Required
Net Capital
Net Capital
Required
Net Capital
$
1,092,692
$
177,644
$
915,048
$
855,630
$
137,943
$
717,687
142,859
1,000
141,859
263,957
500
263,457
39,039
250
38,789
43,677
2,376
41,301
$
1,274,590
$
178,894
$
1,095,696
$
1,163,264
$
140,819
$
1,022,445
11.
Stock-based
Compensation
64
Table of Contents
Weighted
Weighted
Average
Average
Remaining
Aggregate
Number of
Exercise
Contractual
Intrinsic
Options
Price
Term (Years)
Value
12,773
$
6.86
110
$
19.91
(3,531
)
$
3.55
(8
)
$
19.87
(130
)
$
6.06
9,214
$
8.28
4.0
$
79,048
7,404
$
5.81
3.0
$
79,025
2010
2009
2008
2.49
%
1.80
%
3.39
%
0
%
0
%
0
%
50
%
51
%
44
%
6.2
3.4
6.8
65
Table of Contents
Weighted
Average
Number of
Grant Date
Units
Fair Value
3,027
$
15.20
1,086
$
19.20
(172
)
$
16.12
(177
)
$
17.74
3,764
$
16.19
Weighted
Average
Number of
Grant Date
Units
Fair Value
617
$
17.64
(617
)
$
17.64
$
Weighted
Average
Number of
Grant Date
Units
Fair Value
180
$
17.99
(136
)
$
17.99
(2
)
$
17.99
42
$
17.99
66
Table of Contents
12.
Employee
Benefit Plans
13.
Earnings
Per Share
2010
2009
2008
$
592,188
$
643,705
$
803,917
585,128
578,972
593,746
6,794
8,280
9,387
591,922
587,252
603,133
$
1.01
$
1.11
$
1.35
$
1.00
$
1.10
$
1.33
14.
Commitments
and Contingencies
Minimum Lease
Sublease
Net Lease
Fiscal Year
Payments
Income
Commitments
$
46,732
$
(731
)
$
46,001
43,459
(644
)
42,815
41,891
(161
)
41,730
38,753
38,753
34,368
34,368
147,624
147,624
$
352,827
$
(1,536
)
$
351,291
67
Table of Contents
$
10,677
6,397
4,388
2,192
23,654
(2,855
)
$
20,799
68
Table of Contents
69
Table of Contents
70
Table of Contents
15.
Fair
Value Disclosures
Level 1 Quoted prices (unadjusted) in active
markets for identical assets or liabilities that the Company has
the ability to access. This category includes active
exchange-traded funds, mutual funds and equity securities.
71
Table of Contents
Level 2 Inputs other than quoted prices included
in Level 1 that are observable for the asset or liability,
either directly or indirectly. Such inputs include quoted prices
in markets that are not active, quoted prices for similar assets
and liabilities in active markets, inputs other than quoted
prices that are observable for the asset or liability and inputs
that are derived principally from or corroborated by observable
market data by correlation or other means. This category
includes most debt securities and other interest-sensitive
financial instruments.
Level 3 Unobservable inputs for the asset or
liability, where there is little, if any, observable market
activity or data for the asset or liability. This category
includes assets and liabilities related to money market and
other mutual funds managed by The Reserve for which the net
asset value has declined below $1.00 per share and the funds are
being liquidated. This category also includes auction rate
securities for which the periodic auctions have failed.
As of September 30, 2010
Level 1
Level 2
Level 3
Fair Value
$
$
2,494
$
$
2,494
1,098
1,098
3,592
3,592
209,288
209,288
5,404
5,404
453
10
463
1,487
1,487
487
487
105
105
453
2,089
214,692
217,234
49,235
49,235
$
453
$
54,916
$
214,692
$
270,061
$
2,213
$
14
$
$
2,227
375
375
378
378
161
161
$
2,213
$
928
$
$
3,141
(1)
Amount is included in other assets on the Consolidated Balance
Sheets. See Interest Rate Swaps in Note 8 for
details.
(2)
Amounts are included in accounts payable and accrued liabilities
on the Consolidated Balance Sheets.
72
Table of Contents
As of September 30, 2009
Level 1
Level 2
Level 3
Fair Value
$
$
$
50,971
$
50,971
1,100
1,100
1,100
50,971
52,071
14,579
14,579
5,049
5,049
471
23
494
2,049
2,049
702
702
532
532
471
3,306
19,628
23,405
$
471
$
4,406
$
70,599
$
75,476
$
3,102
$
2
$
$
3,104
1
1
118
118
23
23
$
3,102
$
143
$
1
$
3,246
(1)
Amounts are included in accounts payable and accrued liabilities
on the Consolidated Balance Sheets.
Year Ended September 30, 2010
Purchases,
Net Gains
Sales,
September 30,
Included in
Issuances and
September 30,
2009
Earnings
Settlements, Net
2010
$
50,971
$
1,237
(1)
$
(52,208
)
$
14,579
8,428
(2)
186,281
209,288
5,049
10,067
(1)
(9,712
)
5,404
19,628
18,495
176,569
214,692
$
70,599
$
19,732
$
124,361
$
214,692
73
Table of Contents
(1)
Gains on money market and other mutual funds relate to shares of
The Reserve Primary and International Liquidity Funds that the
Company continues to hold as of September 30, 2010. These
gains are included in losses (gains) on money market funds and
client guarantees on the Consolidated Statements of Income.
(2)
Net gains on auction rate securities are recorded in other
revenues on the Consolidated Statements of Income and
$3.9 million of the gains relate to assets held as of
September 30, 2010.
Year Ended September 30, 2009
Purchases,
Losses
Sales,
October 1,
Included in
Issuances and
September 30,
2008
Earnings(2)
Settlements, Net
2009
$
217,471
$
$
(217,471
)
$
368,066
(80
)
(317,015
)
50,971
6,925
(821
)
8,475
14,579
46,662
(41,613
)
5,049
53,587
(821
)
(33,138
)
19,628
10,000
(10,000
)
$
649,124
$
(901
)
$
(577,624
)
$
70,599
$
4,636
$
$
(4,635
)
$
1
(1)
Represents positions in The Reserve Primary Fund that were
classified as cash and cash equivalents as of September 30,
2008.
(2)
Substantially all of the losses included in earnings are
recorded in other revenues on the Consolidated Statements of
Income and were related to assets held as of September 30,
2009.
74
Table of Contents
16.
Segment
and Geographic Area Information
17.
Structured
Stock Repurchase
75
Table of Contents
18.
Related
Party Transactions
76
Table of Contents
77
Table of Contents
78
Table of Contents
79
Table of Contents
19.
Condensed
Consolidating Financial Information
80
Table of Contents
As of September 30, 2010
(In thousands)
81
Table of Contents
As of September 30, 2009
(In thousands)
82
Table of Contents
For the Year Ended September 30, 2010
(In thousands)
Guarantor
Non-Guarantor
Parent
Subsidiary
Subsidiaries
Eliminations
Total
$
16,227
$
170
$
2,560,518
$
(16,224
)
$
2,560,691
12,787
(2,763
)
1,601,518
(16,224
)
1,595,318
3,440
2,933
959,000
965,373
52,138
38
1,112
53,288
(48,698
)
2,895
957,888
912,085
(33,382
)
(5,663
)
358,942
319,897
(15,316
)
8,558
598,946
592,188
607,504
596,197
10,272
(1,213,973
)
$
592,188
$
604,755
$
609,218
$
(1,213,973
)
$
592,188
For the Year Ended September 30, 2009
(In thousands)
Guarantor
Non-Guarantor
Parent
Subsidiary
Subsidiaries
Eliminations
Total
$
30,614
$
1,120
$
2,407,032
$
(30,840
)
$
2,407,926
28,372
586
1,308,213
(30,723
)
1,306,448
2,242
534
1,098,819
(117
)
1,101,478
39,489
2,118
583
(117
)
42,073
(37,247
)
(1,584
)
1,098,236
1,059,405
(5,796
)
558
420,938
415,700
(31,451
)
(2,142
)
677,298
643,705
675,156
676,849
(1,352,005
)
$
643,705
$
674,707
$
677,298
$
(1,352,005
)
$
643,705
83
Table of Contents
For the Year Ended September 30, 2008
(In thousands)
Guarantor
Non-Guarantor
Parent
Subsidiary
Subsidiaries
Eliminations
Total
$
52,752
$
5,332
$
2,532,276
$
(53,004
)
$
2,537,356
49,082
(1,151
)
1,201,408
(53,004
)
1,196,335
3,670
6,483
1,330,868
1,341,021
78,393
(826
)
(48
)
77,519
(74,723
)
7,309
1,330,916
1,263,502
(24,485
)
(6,944
)
491,014
459,585
(50,238
)
14,253
839,902
803,917
854,155
839,902
(1,694,057
)
$
803,917
$
854,155
$
839,902
$
(1,694,057
)
$
803,917
84
Table of Contents
For the Year Ended September 30, 2010
(In thousands)
Guarantor
Non-Guarantor
Parent
Subsidiary
Subsidiaries
Total
$
(128,996
)
$
(732
)
$
714,404
$
584,676
(91,198
)
(91,198
)
113
51,695
400
52,208
16
(2,492
)
(2,476
)
113
51,711
(93,290
)
(41,466
)
1,248,557
1,248,557
(10,595
)
(10,595
)
(1,406,500
)
(4,138
)
(1,410,638
)
(265,599
)
(265,599
)
(169,200
)
(169,200
)
28,189
(13,769
)
14,420
(575,148
)
(17,907
)
(593,055
)
725,773
(135,000
)
(590,773
)
126
126
21,742
(84,021
)
12,560
(49,719
)
45,291
109,079
636,841
791,211
$
67,033
$
25,058
$
649,401
$
741,492
85
Table of Contents
For the Year Ended September 30, 2009
(In thousands)
Guarantor
Non-Guarantor
Parent
Subsidiary
Subsidiaries
Total
$
124,666
$
(161,364
)
$
637,354
$
600,656
(86,698
)
(86,698
)
86,423
86,423
(225,447
)
(41,266
)
(266,713
)
667
177,206
139,142
317,015
11,688
453
12,141
(224,780
)
147,628
139,320
62,168
(37,500
)
(74,000
)
(111,500
)
(466,144
)
(466,144
)
37,229
(5,002
)
32,227
(466,415
)
(79,002
)
(545,417
)
610,831
(48,195
)
(562,636
)
(331
)
(331
)
44,302
(61,931
)
134,705
117,076
989
171,010
502,136
674,135
$
45,291
$
109,079
$
636,841
$
791,211
86
Table of Contents
For the Year Ended September 30, 2008
(In thousands)
Guarantor
Non-Guarantor
Parent
Subsidiary
Subsidiaries
Total
$
87,986
$
(74,046
)
$
981,476
$
995,416
(98,836
)
(98,836
)
623,837
623,837
(272,590
)
(1,880
)
(274,470
)
(328,690
)
(1,069
)
(329,759
)
395,490
498,787
894,277
(774
)
(6,422
)
(360,870
)
(368,066
)
4,520
716
5,236
(774
)
(207,692
)
660,685
452,219
(34,375
)
(34,375
)
(1,097,808
)
(1,097,808
)
(74,568
)
(74,568
)
22,668
(3,029
)
19,639
(86,275
)
(1,100,837
)
(1,187,112
)
293,723
(293,723
)
(175
)
(175
)
937
11,985
247,426
260,348
52
159,025
254,710
413,787
$
989
$
171,010
$
502,136
$
674,135
87
Table of Contents
20.
Quarterly
Data (Unaudited)
(Dollars in thousands, except per share amounts)
For the Fiscal Year Ended September 30, 2010
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
$
624,618
$
635,434
$
691,804
$
608,836
$
240,400
$
227,465
$
300,261
$
197,245
$
136,237
$
162,552
$
179,439
$
113,959
$
0.23
$
0.28
$
0.31
$
0.20
$
0.23
$
0.27
$
0.30
$
0.20
For the Fiscal Year Ended September 30, 2009
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
$
610,729
$
525,499
$
613,768
$
657,931
$
316,199
$
232,504
$
290,114
$
262,661
$
184,398
$
132,030
$
170,537
$
156,740
$
0.31
$
0.23
$
0.30
$
0.27
$
0.31
$
0.23
$
0.30
$
0.26
88
Table of Contents
Item 9.
Changes
in and Disagreements with Accountants on Accounting and
Financial Disclosure
Item 9A.
Controls
and Procedures
89
Table of Contents
90
Table of Contents
Item 9B.
Other
Information
Item 10.
Directors,
Executive Officers and Corporate Governance
Item 11.
Executive
Compensation
Item 12.
Security
Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
Number of Securities
Remaining Available
for Future
Issuance Under Equity
Number of Securities to
Weighted-Average
Compensation Plans
be Issued Upon Exercise
Exercise Price of
(Excluding
of Outstanding Options,
Outstanding Options,
Securities Reflected
Warrants and Rights
Warrants and Rights
in Column (a))
Plan Category
(a)
(b)
(c)
9,214,170
$
8.28
21,966,444
(1)
(1)
The TD Ameritrade Holding Corporation Long-Term Incentive Plan
(the LTIP) and the 2006 Directors Incentive
Plan (the Directors Plan) authorize the issuance of
shares of common stock as well as options. As of
September 30, 2010, there were 15,946,866 shares and
1,250,214 shares remaining available for issuance pursuant
to the LTIP and the Directors Plan, respectively.
91
Table of Contents
Number of Securities to
Weighted-Average
be Issued Upon Exercise of
Exercise Price of
Outstanding Options,
Outstanding Options,
Warrants and Rights
Warrants and Rights
Plan Category
(a)
(b)
275,387
$
17.44
Item 13.
Certain
Relationships and Related Transactions, and Director
Independence
Item 14.
Principal
Accounting Fees and Services
Item 15.
Exhibits,
Financial Statement Schedules
Exhibit No.
Description
3
.1
Amended and Restated Certificate of Incorporation of TD
Ameritrade Holding Corporation, dated January 24, 2006
(incorporated by reference to Exhibit 3.1 of the
Companys
Form 8-K
filed on January 27, 2006)
3
.2
Amended and Restated By-Laws of TD Ameritrade Holding
Corporation, effective March 9, 2006 (incorporated by
reference to Exhibit 3.1 of the Companys
Form 8-K
filed on March 15, 2006)
4
.1
Form of Certificate for Common Stock (incorporated by reference
to Exhibit 4.1 of the Companys
Form 8-A
filed on September 5, 2002)
4
.2
First Supplemental Indenture, dated November 25, 2009,
among TD Ameritrade Holding Corporation, TD Ameritrade Online
Holdings Corp., as guarantor, and The Bank of New York Mellon
Trust Company, National Association, as trustee
(incorporated by reference to Exhibit 4.1 of the
Companys
Form 8-K
filed on November 25, 2009)
4
.3
Form of 2.950% Senior Note due 2012 (included in
Exhibit 4.2)
4
.4
Form of 4.150% Senior Note due 2014 (included in
Exhibit 4.2)
4
.5
Form of 5.600% Senior Note due 2019 (included in
Exhibit 4.2)
92
Table of Contents
Exhibit No.
Description
10
.1*
Form of Indemnification Agreement, dated as of May 30,
2006, between TD Ameritrade Holding Corporation and several
current and previous members of the Companys board of
directors (incorporated by reference to Exhibit 10.1 of the
Companys
Form 8-K
filed on June 5, 2006)
10
.2*
Employment Agreement, as amended and restated, effective as of
June 11, 2008, between Joseph H. Moglia and TD Ameritrade
Holding Corporation (incorporated by reference to
Exhibit 10.1 of the Companys quarterly report on
Form 10-Q
filed on August 8, 2008)
10
.3*
Amendment to Employment Agreement, dated as of
September 29, 2008, between Joseph H. Moglia and TD
Ameritrade Holding Corporation (incorporated by reference to
Exhibit 10.3 of the Companys
Form 10-K
filed on November 26, 2008)
10
.4*
Deferred Compensation Plan, effective as of March 1, 2001,
between Joseph H. Moglia and Ameritrade Holding Corporation
(incorporated by reference to Exhibit B of
Exhibit 10.1 of the Companys quarterly report on
Form 10-Q
filed on May 14, 2001)
10
.5*
Letter Agreement and Promissory Note, dated as of
September 13, 2001, between Joseph H. Moglia and Ameritrade
Holding Corporation (incorporated by reference to
Exhibit 10.14 of the Companys Annual Report on
Form 10-K
filed on December 24, 2001)
10
.6*
Non-Qualified Stock Option Agreement, dated as of March 1,
2003, between Joseph H. Moglia and Ameritrade Holding
Corporation (incorporated by reference to Exhibit 10.9 of
the Companys Annual Report on
Form 10-K
filed on December 9, 2004)
10
.7*
Employment Agreement, as amended and restated, effective as of
May 16, 2008, between Fredric J. Tomczyk and TD Ameritrade
Holding Corporation (incorporated by reference to
Exhibit 10.2 of the Companys quarterly report on
Form 10-Q
filed on August 8, 2008)
10
.8*
Non-Qualified Stock Option Agreement, dated May 15, 2008,
between Fredric J. Tomczyk and TD Ameritrade Holding
Corporation (incorporated by reference to Exhibit 10.3 of
the Companys quarterly report on
Form 10-Q
filed on August 8, 2008)
10
.9*
Employment Agreement, as amended and restated, effective as of
October 13, 2008, between Ellen L.S. Koplow and TD
Ameritrade Holding Corporation (incorporated by reference to
Exhibit 10.9 of the Companys
Form 10-K
filed on November 26, 2008)
10
.10*
Employment Agreement, as amended and restated, effective as of
September 18, 2008, between John Bunch and TD Ameritrade
Holding Corporation (incorporated by reference to
Exhibit 10.3 of the Companys quarterly report on
Form 10-Q
filed on February 5, 2010)
10
.11*
Executive Employment Term Sheet, dated as of January 14,
2009, between TD Ameritrade Holding Corporation and Peter J.
Sidebottom (incorporated by reference to Exhibit 10.3 of
the Companys
Form 10-Q
filed on May 8, 2009)
10
.12*
TD Ameritrade Holding Corporation Long-Term Incentive Plan, as
amended and restated (incorporated by reference to
Exhibit 10.1 of the Companys
Form 8-K
filed on March 1, 2010)
10
.13*
Form of 1996 Long Term Incentive Plan Non-Qualified Stock Option
Agreement for Executives (incorporated by reference to
Exhibit 10.25 of the Companys Annual Report on
Form 10-K
filed on December 9, 2004)
10
.14*
Form of Performance Restricted Stock Unit Agreement
(incorporated by reference to Exhibit 10.1 of the
Companys
Form 8-K
filed on March 9, 2006)
10
.15*
Form of Restricted Stock Unit Agreement (incorporated by
reference to Exhibit 10.1 of the Companys
Form 8-K
filed on October 26, 2010)
10
.16*
TD Ameritrade Holding Corporation 2006 Directors Incentive
Plan, effective as of November 15, 2006 (incorporated by
reference to Appendix A of the Companys Proxy
Statement filed on January 24, 2007)
10
.17*
Form of Directors Incentive Plan Non-Qualified Stock Option
Agreement (incorporated by reference to Exhibit 10.27 of
the Companys Annual Report on
Form 10-K
filed on December 9, 2004)
10
.18*
Form of Directors Incentive Plan Restricted Stock Agreement
(incorporated by reference to Exhibit 10.28 of the
Companys Annual Report on
Form 10-K
filed on December 9, 2004)
10
.19*
Form of award letter to Bonus Recipients under the Directors
Incentive Plan, dated February 27, 2006 (incorporated by
reference to Exhibit 10.2 of the Companys
Form 8-K
filed on March 1, 2006)
Table of Contents
Exhibit No.
Description
10
.20*
Form of Restricted Stock Unit Agreement for Non-employee
Directors (incorporated by reference to Exhibit 10.2 of the
Companys
Form 8-K
filed on May 16, 2006)
10
.21*
Amended and Restated Ameritrade Holding Corporation Executive
Deferred Compensation Program effective December 28, 2005
(incorporated by reference to Exhibit 10.1 of the
Companys
Form 8-K
filed on December 30, 2005)
10
.22*
Form of award letter to Bonus Recipients under the Executive
Deferred Compensation Program, dated February 23, 2006
(incorporated by reference to Exhibit 10.1 of the
Companys
Form 8-K
filed on March 1, 2006)
10
.23*
TD Ameritrade Holding Corporation Management Incentive Plan, as
amended effective as of February 24, 2010 (incorporated by
reference to Exhibit 10.3 of the Companys
Form 8-K
filed on March 1, 2010)
10
.24*
Datek Online Holdings Corp. 1998 Stock Option Plan, as amended
and restated effective as of September 9, 2002
(incorporated by reference to Exhibit 4.2 of the
Companys Registration Statement on
Form S-8,
File
No. 333-99481,
filed on September 13, 2002)
10
.25*
First Amendment of Datek Online Holdings Corp. 1998 Stock Option
Plan, effective as of September 25, 2004 (incorporated by
reference to Exhibit 10.32 of the Companys Annual
Report on
Form 10-K
filed on December 9, 2004)
10
.26*
Datek Online Holdings Corp. 2001 Stock Incentive Plan, as
amended and restated effective as of September 9, 2002
(incorporated by reference to Exhibit 4.2 of the
Companys Registration Statement on
Form S-8,
File
No. 333-99353,
filed on September 10, 2002)
10
.27*
First Amendment of Datek Online Holdings Corp. 2001 Stock
Incentive Plan, effective as of September 25, 2004
(incorporated by reference to Exhibit 10.34 of the
Companys Annual Report on
Form 10-K
filed on December 9, 2004)
10
.28*
thinkorswim Group Inc. Second Amended and Restated 2001 Stock
Option Plan (incorporated by reference to Exhibit(a)(1)(F) to
thinkorswim Group Inc.s Form SC TO-I filed on
April 17, 2009)
10
.29*
thinkorswim Group Inc. Amended and Restated 2004 Restricted
Stock Plan (incorporated by reference to Annex A to the
proxy statement filed by thinkorswim Group Inc. on
April 24, 2008)
10
.30*
Telescan, Inc. Amended and Restated 1995 Stock Option Plan
(incorporated by reference to Telescan, Inc.s registration
statement on
Form S-8
filed on November 21, 2000)
10
.31*
Telescan, Inc. 2000 Stock Option Plan (incorporated by reference
to Telescan, Inc.s registration statement on
Form S-8
filed on November 21, 2000)
10
.32
Stockholders Agreement among Ameritrade Holding Corporation, The
Toronto-Dominion Bank, J. Joe Ricketts and certain of his
affiliates dated as of June 22, 2005 (incorporated by
reference to Exhibit 10.1 of the Companys
Form 8-K
filed on June 28, 2005)
10
.33
Amendment No. 1 to Stockholders Agreement among TD
Ameritrade Holding Corporation, The Toronto-Dominion Bank and
certain other stockholders of TD Ameritrade, dated
February 22, 2006 (incorporated by reference to
Exhibit 10.4 of the Companys quarterly report on
Form 10-Q
filed on May 8, 2006)
10
.34
Amendment No. 2 and Waiver to Stockholders Agreement among
TD Ameritrade Holding Corporation, The Toronto-Dominion Bank and
certain other stockholders of TD Ameritrade, dated
August 3, 2009 (incorporated by reference to
Exhibit 10.33 of the Companys Annual Report on
Form 10-K
filed on November 13, 2009)
10
.35
Amendment No. 3 to Stockholders Agreement among TD
Ameritrade Holding Corporation, The Toronto-Dominion Bank and
certain other stockholders of TD Ameritrade, dated
August 6, 2010
10
.36
Amended and Restated Registration Rights Agreement by and among
Ameritrade Holding Corporation, The Toronto-Dominion Bank, J.
Joe Ricketts and certain of his affiliates, entities affiliated
with Silver Lake Partners, and entities affiliated with TA
Associates, dated as of June 22, 2005 (incorporated by
reference to Exhibit 99.1 of the Companys
Form 8-K
filed on September 12, 2005)
Table of Contents
Exhibit No.
Description
10
.37
Trademark License Agreement among The Toronto-Dominion Bank and
Ameritrade Holding Corporation, dated as of June 22, 2005
(incorporated by reference to Exhibit 99.3 of the
Companys
Form 8-K
filed on September 12, 2005)
10
.38
Amended and Restated Credit Agreement, dated November 25,
2009, among TD Ameritrade Holding Corporation, the lending
institutions party thereto and The Bank of New York Mellon, as
administrative agent (incorporated by reference to
Exhibit 10.1 of the Companys
Form 8-K
filed on November 25, 2009)
10
.39
Agreement and Plan of Merger, dated as of January 8, 2009,
by and among TD Ameritrade Holding Corporation, Tango
Acquisition Corporation One, Tango Acquisition Corporation Two
and thinkorswim Group Inc. (incorporated by reference to
Exhibit 10.1 of the Companys
Form 8-K
filed on January 14, 2009)
10
.40
Stock Purchase Agreement, dated as of February 17, 2009, by
and between TD Ameritrade Holding Corporation, Marlene M.
Ricketts and the Joe and Marlene Ricketts Grandchildrens
Trust (incorporated by reference to Exhibit 10.2 of the
Companys
Form 10-Q
filed on May 8, 2009)
10
.41
TD Ameritrade, Inc. Offer of Settlement before the Securities
and Exchange Commission, effective July 20, 2009
(incorporated by reference to Exhibit 10.1 of the
Companys
Form 10-Q
filed on August 7, 2009)
10
.42
Assurance of Discontinuance Pursuant to Executive Law
Section 63(15) between TD Ameritrade, Inc. and the Attorney
General of the State of New York Investor Protection Bureau,
effective July 20, 2009 (incorporated by reference to
Exhibit 10.2 of the Companys
Form 10-Q
filed on August 7, 2009)
10
.43
TD Ameritrade, Inc. Offer of Settlement before the Pennsylvania
Securities Commission, effective July 20, 2009
(incorporated by reference to Exhibit 10.3 of the
Companys
Form 10-Q
filed on August 7, 2009)
10
.44
Letter Agreement to effect a structured stock repurchase, dated
as of August 20, 2010, between TD Ameritrade Holding
Corporation and Barclays Capital Inc., acting as agent for
Barclays Bank PLC
12
Statement Re: Computation of Ratio of Earnings to Fixed Charges
14
Code of Ethics (incorporated by reference to Exhibit 14 of
the Companys quarterly report on
Form 10-Q
filed May 6, 2004)
21
.1
Subsidiaries of the Registrant
23
.1
Consent of Ernst & Young LLP
31
.1
Certification of Fredric J. Tomczyk, Principal Executive
Officer, as required pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
31
.2
Certification of William J. Gerber, Principal Financial Officer,
as required pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
32
.1
Certification pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002
101
.INS
XBRL Instance Document
101
.SCH
XBRL Taxonomy Extension Schema
101
.CAL
XBRL Taxonomy Extension Calculation
101
.LAB
XBRL Taxonomy Extension Label
101
.PRE
XBRL Taxonomy Extension Presentation
*
Management contracts and compensatory plans and arrangements
required to be filed as exhibits under Item 15(b) of this
report.
The Company has requested confidential treatment for portions of
this exhibit.
Table of Contents
By:
By:
Chairman of the Board
Director
Vice Chairman of the Board
Director
Director
Director
Director
Director
Director
Director
Director
96
2
3
COMPANY : | R PARTIES : | |||||||||
|
||||||||||
TD AMERITRADE HOLDING CORPORATION | /s/ J. JOE RICKETTS | |||||||||
J. Joe Ricketts | ||||||||||
|
||||||||||
By:
|
/s/ FREDERIC J. TOMCZYK | |||||||||
|
||||||||||
Name: Fredric J. Tomczyk | /s/ MARLENE M. RICKETTS | |||||||||
|
||||||||||
Title: Chief Executive Officer | Marlene M. Ricketts | |||||||||
|
||||||||||
TD : | MARLENE M. RICKETTS 1994 DYNASTY TRUST | |||||||||
|
||||||||||
THE TORONTO-DOMINION BANK | ||||||||||
|
By: | /s/ J. PETER RICKETTS | ||||||||
|
||||||||||
Name: J. Peter Ricketts | ||||||||||
By: | /s/ RIAZ AHMED | Title: Trustee | ||||||||
|
||||||||||
Name: Riaz Ahmed | ||||||||||
Title: Group Head, Corporate Development,
Enterprise Strategy & Treasury |
||||||||||
|
||||||||||
TD LUXEMBOURG INTERNATIONAL
HOLDINGS S.À R.L. |
J. JOE RICKETTS 1996 DYNASTY TRUST | |||||||||
|
||||||||||
By:
|
/s/ YVES SAWAYA | By: | /s/ J. PETER RICKETTS | |||||||
|
||||||||||
Name: Yves Sawaya | Name: J. Peter Ricketts | |||||||||
Title: Manager | Title: Trustee | |||||||||
|
||||||||||
By:
|
/s/ NICOLAS HORLAIT | |||||||||
|
||||||||||
Name: Nicolas Horlait | ||||||||||
Title: Manager |
DATE:
|
August 20, 2010 | |
|
||
TO:
|
TD AMERITRADE HOLDING CORPORATION | |
Attention
:
|
**** | |
Facsimile
:
|
**** | |
Telephone
:
|
**** | |
Email
:
|
**** | |
|
||
FROM:
|
Barclays Capital Inc., acting as Agent for Barclays Bank PLC | |
TELEPHONE
:
|
**** |
SUBJECT:
|
Share Repurchase Transaction | |
|
||
Reference Number(s):
|
**** |
1
General Terms:
|
||
|
||
Trade Date:
|
August 20, 2010 | |
|
||
Seller:
|
Barclays | |
|
||
Buyer:
|
Counterparty | |
|
||
Shares:
|
The Common Stock, USD 0.01 par value per share of Counterparty (Ticker symbol AMTD). | |
|
||
Prepayment:
|
Applicable | |
|
||
Prepayment Amount:
|
As specified in Schedule A | |
|
||
Prepayment Date:
|
Counterparty shall pay the Prepayment Amount to Barclays no later than the Second Exchange Business Day following the Trade Date. | |
|
||
Variable Obligation
|
Not Applicable | |
|
||
Exchange:
|
NASDAQ Global Select Market | |
|
||
Related Exchange(s):
|
All Exchanges. | |
|
||
Calculation Agent:
|
Barclays. All determinations made by the Calculation Agent shall be made in good faith and in a commercially reasonable manner. Promptly following a reasonable request by Counterparty, the Calculation Agent shall provide to such party in reasonable detail (i) the material inputs or assumptions utilized by the Calculation Agent in making such determination and (ii) in the case of a calculation, the manner in which such calculation was performed using such inputs or assumptions. For the avoidance of doubt, the Calculation Agent shall not be required to disclose any proprietary models or data. | |
|
||
Valuation:
|
||
|
||
Trading Period:
|
The period of consecutive Scheduled Trading Days from and including the Trade Date to and including the Maximum Maturity Date, as specified in Schedule A; provided that, Barclays may designate any Scheduled Trading Day on or after the Minimum Maturity Date, as specified in Schedule A, as the last Scheduled Trading Day of the Trading Period. Barclays shall notify Counterparty of any designation made pursuant to this provision on the Scheduled Trading Day immediately following such designated day. | |
|
||
Market Disruption Event:
|
Section 6.3(a) of the Equity Definitions shall be amended by deleting the words at any time during the one hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be and replacing them with the words at any time during the regular trading session on the |
2
|
Exchange, without regard
to after hours or any other trading outside of the
regular trading session hours, by amending and
restating clause (a)(iii) thereof in its entirety to
read as follows: (iii) an Early Closure that the
Calculation Agent determines is material and by adding
the words or (iv) a Regulatory Disruption after
clause (a)(iii) as restated above.
Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the provision following the term Scheduled Closing Time in the fourth line thereof. |
|
|
||
Regulatory Disruption:
|
A Regulatory Disruption shall occur if Barclays determines in its commercially reasonable discretion exercised in good faith that it is required in light of legal, regulatory or self-regulatory requirements or related policies or procedures for Barclays to refrain from all or any part of the market activity in which it would otherwise engage in connection with this Transaction. | |
|
||
Disrupted Day:
|
The definition of Disrupted Day in Section 6.4 of the Equity Definitions shall be amended by adding the following sentence after the first sentence: A Scheduled Trading Day on which a Related Exchange fails to open during its regular trading session will not be a Disrupted Day if the Calculation Agent determines that such failure will not have a material impact on Barclayss ability to unwind any hedging transactions related to the Transaction. | |
|
||
Consequence of Disrupted Days:
|
Notwithstanding anything to the contrary in the Equity Definitions, to the extent that a Disrupted Day occurs during the Trading Period, the Calculation Agent may postpone the Maximum Maturity Date and the Minimum Maturity Date. If any Disrupted Day occurs during the Trading Period, the Calculation Agent shall determine whether (i) such Disrupted Day is a Disrupted Day in whole, in which case the 10b-18 VWAP for such Disrupted Day shall not be included for purposes of determining the Settlement Price or (ii) such Disrupted Day is a Disrupted Day only in part, in which case the 10b-18 VWAP for such Disrupted Day shall be determined by the Calculation Agent based on Rule 10b-18 eligible transactions in the Shares on such Disrupted Day effected before the relevant Market Disruption Event (if any) occurred and/or after the relevant Market Disruption Event (if any) ended, and the Settlement Price shall be determined by the Calculation Agent using an appropriately weighted average of the 10b-18 VWAPs for all Scheduled Trading Days in the Trading Period instead of an arithmetic average. | |
|
||
Valuation Time:
|
Scheduled Closing Time; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion. | |
|
||
Valuation Date:
|
The last Scheduled Trading Day during the Trading Period. | |
|
||
Settlement Terms:
|
||
|
||
Settlement Method Election:
|
Not Applicable; subject to the terms of Net Share Settlement below. |
3
4
Date) a number of Shares to Counterparty (the Net Delivery Shares ) equal to the sum of the Daily Net Delivery Shares for all Scheduled Trading Days during the Net Share Settlement Period. No fractional Shares shall be delivered in connection with Net Share Settlement by Barclays, and the value of any fractional Shares otherwise deliverable with respect to any Scheduled Trading Day during the Net Share Settlement Period shall be paid in cash to Counterparty on the Net Share Settlement Date (such value to be determined by multiplying such fractional Share by the volume weighted average price at which Barclays purchased such Shares). | ||||
|
||||
Daily Net Delivery Shares: | For any Scheduled Trading Day during the Net Share Settlement Period, a number of Shares, rounded down to the nearest whole integer, equal to (a) the quotient of (x) USD 8,000,000 (the Daily Purchase Amount ) or, with respect to the final Scheduled Trading Day during the Net Share Settlement Period, a lesser amount equal to (i) the Cash Delivery Amount minus (ii) the sum of all prior Daily Purchase Amounts divided by (y) (i) the volume weighted average price at which Barclays purchased such Shares on such Scheduled Trading Day plus (ii) the Fee Amount or (b) such lesser number of shares as may be necessary in order for Barclays to comply with its obligations under Section 5(b) hereof. | |||
|
||||
Fee Amount: | USD 0.02 | |||
|
||||
Net Share Settlement Period: | The period during which Barclays makes purchases of the Net Delivery Shares, commencing on the third Scheduled Trading Day immediately following the final day of the Trading Period and ending on the Scheduled Trading Day on which Barclays completes its purchases of the Net Delivery Shares. | |||
|
||||
Credit Support | Paragraph 2 of the the CSA is hereby amended by adding the following to the end thereof: | |||
|
||||
In addition, to secure its Obligations under this Agreement, Barclays hereby pledges, assigns and grants to Counterparty a security interest in, lien on and right of set-off against, all of Barclayss right, title, interest, powers and privileges in the property described below, whether now owned or existing or hereafter acquired or arising and wherever located (collectively, the Collateral ): | ||||
|
||||
|
1. | that certain account number in the name of Barclays Bank PLC, maintained by The Bank of New York Mellon (in such capacity, the Custodian ) and all investment property, instruments, financial assets and other property (as such terms are defined in the Uniform Commercial Code in effect in the State of New York from time to time, (the UCC )) from time to time held in or standing to the credit of such account or arising in connection with such account (or any successor account, the Collateral Account and together with any property credited thereto and rights related thereto, the Custodial Collateral ); | ||
|
||||
|
2. | all books and records pertaining to the Custodial Collateral; and |
5
|
3. | all proceeds (as such term is defined in the UCC) relating to any of the foregoing; including, without limitation, distributions (whether principal or interest), dividends (in money, shares of stock or other property), return of capital, securities or other property issued pursuant to any recapitalization, reorganization, merger, exchange or other transaction or any property received in substitution for the Custodial Collateral, and all proceeds of any sale, transfer, liquidation, redemption or reinvestment of the Custodial Collateral. | ||
|
||||
At all times commencing on the Prepayment Date and while this Transaction remains outstanding, unless otherwise explicitly agreed between the parties hereto, Barclays shall have credited to and maintain in the Collateral Account, an amount of property having a Value (taking into account the Valuation Percentage with respect to each type of Eligible Collateral) not less than the Independent Amount. | ||||
|
||||
Independent Amount for purposes of this Transaction and with respect to Barclays means an amount equal to the Prepayment Amount. | ||||
|
||||
Barclays agrees that all property credited to the Collateral Account shall consist of items that constitute Eligible Collateral. For purposes hereof, Eligible Collateral shall mean any of the following: | ||||
|
||||
|
(i) | cash in USD at a Valuation Percentage of 100%; | ||
|
||||
|
(ii) | negotiable debt obligations issued by the United States Treasury Department ( Treasury Securities ) having a remaining term to maturity of less than one year at a Valuation Percentage of 99.25%; | ||
|
||||
|
(iii) | Treasury Securities having a remaining term to maturity of one year or greater but less than five years at a Valuation Percentage of 97%; | ||
|
||||
|
(iv) | Treasury Securities having a remaining term to maturity of five years or greater but less than ten years at a Valuation Percentage of 93%; | ||
|
||||
|
(v) | Treasury Securities having a remaining term to maturity of ten years or greater but less than 20 years at a Valuation Percentage of 91%; and | ||
|
||||
|
(vi) | Treasury Securities having a remaining term to maturity of 20 years or greater but less than 30 years at a Valuation Percentage of 85%. | ||
|
||||
Delivery of Custodial Collateral to the Custodian shall constitute a Transfer to the Secured Party for purposes of Paragraphs 3 and 9 of the CSA. The Collateral shall be deemed to be Posted Collateral for all purposes of the CSA. Following the delivery of the Independent Amount to the Collateral Account, Barclayss Exposure to this Transaction shall be deemed to be zero. The parties agree that Secured |
6
|
Partys Exposure to this Transaction shall at all times be zero. | |
|
||
|
Paragraph 6(c) of the CSA is hereby amended by deleting the words commencing with if the Secured Party is in the second line thereof to, and including, the words Uniform Commercial Code, in the fifth line thereof and replacing them with the words the Secured Party shall not. | |
|
||
|
With respect to the Custodial Collateral pledged hereunder, Paragraph 9(ii) of the CSA is hereby deleted in its entirety and replaced with the following: it is the sole owner of or otherwise has the right to pledge all Eligible Collateral it has pledged to the Secured Party, free and clear of any security interest, lien, encumbrance or other restriction other than the security interest created hereby and any security interest of the Custodian. | |
|
||
|
Barclays agrees that the Custodian meets all of the conditions set forth in Paragraph 13(g) of the CSA. | |
|
||
|
Valuation Date for purposes of Paragraph 13(c)(ii) of the CSA shall mean each Local Business Day while this Transaction remains outstanding. | |
|
||
|
Valuation Time for purposes of Paragraph 13(c)(iii) of the CSA shall mean the close of business on the Local Business Day immediately preceding the Valuation Date or date of calculation, as applicable, provided that the calculations of Value and Exposure will, as far as practicable, be made as of approximately the same time on the same date. | |
|
||
Adjustments:
|
||
|
||
Method of Adjustment:
|
Calculation Agent Adjustment; provided that the Equity Definitions shall be amended (a) by replacing the words diluting or concentrative in Sections 11.2(a), 11.2(c) (in two instances) and 11.2(e)(vii) with the word material, (b) by adding the words or the Transaction after the words theoretical value of the relevant Shares in Section 11.2(a), 11.2(c) and 11.2(e)(vii) and (c) by deleting Section 11.2(e)(iii); provided , further that adjustments may be made to account for changes in volatility and liquidity relative to the relevant Shares. |
7
Extraordinary Events:
|
||
|
||
New Shares:
|
Section 12.1(i) of the Equity Definitions is hereby amended by deleting the text in clause (i) in its entirety and replacing it with the phrase publicly quoted, traded or listed on any of the New York Stock Exchange, the American Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or their respective successors). | |
|
||
Share-for-Share:
|
The definition of Share-for-Share set forth in Section 12.1(f) of the Equity Definitions is hereby amended by the deletion of the parenthetical in clause (i) thereof. | |
|
||
Consequence of Merger Events:
|
||
|
||
Share-for-Share:
|
Modified Calculation Agent Adjustment. | |
|
||
Share-for-Other:
|
Cancellation and Payment (Calculation Agent Determination). | |
|
||
Share-for-Combined:
|
Cancellation and Payment (Calculation Agent Determination); provided that Barclays may elect Component Adjustment. | |
|
||
Consequence of Tender Offers:
|
||
|
||
Tender Offer:
|
Applicable | |
|
||
Share-for-Share:
|
Modified Calculation Agent Adjustment. | |
|
||
Share-for-Other:
|
Modified Calculation Agent Adjustment. | |
|
||
Share-for-Combined:
|
Modified Calculation Agent Adjustment. | |
|
||
Modified Calculation Agent Adjustment:
|
For greater certainty, the definition of Modified Calculation Agent Adjustment in Sections 12.2 and 12.3 of the Equity Definitions shall be amended by (i) revising the second parenthetical provision to read as follows (including adjustments to account for changes in volatility, stock loan rate or liquidity relevant to the Shares or to this Transaction, but excluding adjustments to account for changes in expected dividends) and (ii) adding the following italicized language after the stipulated parenthetical provision: | |
|
from the Announcement Date to the Merger Date (Section 12.2) or Tender Offer Date (Section 12.3) .. | |
|
||
Announcement Date:
|
The definition of Announcement Date in Section 12.1 of the Equity Definitions shall be amended by (i) replacing the word leads to the in the third and the fifth lines thereof with the words , if completed, would lead to a, (ii) replacing the words voting shares in the fifth line thereof with the word Shares, (iii) inserting the words by any entity after the word announcement in the third and the fifth lines thereof, (iv) inserting the words or to explore the possibility of engaging in after the words engage in in the third line thereto and (v) inserting the words or to explore the possibility of purchasing or otherwise obtaining after the word obtain in the fifth line thereto. | |
|
||
Announcement Event:
|
If an Announcement Event occurs, the Calculation Agent will determine the economic effect of the Announcement Event on the theoretical value of this Transaction (including without limitation any change in volatility, stock loan rate or liquidity relevant to the Shares or to this Transaction) from the Announcement Date to the Valuation Date. If such economic |
8
|
effect is material, the Calculation Agent will adjust the terms of this Transaction to reflect such economic effect. Announcement Event shall mean the occurrence of the Announcement Date of a Merger Event or Tender Offer. | |
|
||
Composition of Combined Consideration:
|
Not Applicable; provided that, notwithstanding Sections 12.5(b) and 12.1(f) of the Equity Definitions, to the extent that the composition of the consideration for the relevant Shares pursuant to a Tender Offer or Merger Event could be elected by an actual holder of the Shares, the Calculation Agent will, in its sole discretion, determine such composition. | |
|
||
Nationalization, Insolvency or Delisting:
|
Cancellation and Payment (Calculation Agent Determination); provided that, in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it will also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, the American Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall thereafter be deemed to be the Exchange. | |
|
||
Additional Disruption Events:
|
||
|
||
Change in Law:
|
Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the phrase the interpretation in the third line thereof with the phrase or public announcement of the formal or informal interpretation, (ii) immediately following the word Transaction in clause (X) thereof, adding the phrase in the manner contemplated by Barclays on the Trade Date and (iii) deleting clause (Y) thereof. | |
|
||
Failure to Deliver:
|
Not Applicable. | |
|
||
Insolvency Filing:
|
Applicable; provided that the definition of Insolvency Filing in Section 12.9 of the Equity Definitions shall be amended by deleting the clause provided that proceedings instituted or petitions presented by creditors and not consented to by the Issuer shall not be deemed an Insolvency Filing at the end of such definition and replacing it with the following: ; or it has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors rights, or a petition is presented for its winding-up or liquidation by a creditor and such proceeding is not dismissed, discharged, stayed or restrained in each case within 15 days of the institution or presentation thereof. | |
|
||
|
Section 12.9(b)(i) of the Equity Definitions is hereby amended by adding the following sentence at the end: If neither party elects to terminate the Transaction, the Calculation Agent may adjust the terms of the Transaction upon the occurrence of such an event pursuant to Modified Calculation Agent Adjustment (as if such event were a Tender Offer). |
9
Hedging Disruption:
|
Applicable. | |
|
||
Increased Cost of Hedging:
|
Applicable. | |
|
||
Loss of Stock Borrow:
|
Not Applicable | |
|
||
Increased Cost of Stock Borrow:
|
Not Applicable | |
|
||
Hedging Party:
|
Barclays or an affiliate of Barclays that is involved in the hedging of this Transaction for all applicable Additional Disruption Events. | |
|
||
Determining Party:
|
Barclays for all applicable Extraordinary Events. All determinations made by the Determining Party shall be made in good faith and in a commercially reasonable manner. Promptly following a reasonable request by Counterparty, the Determining Party shall provide to such party in reasonable detail (i) the material inputs or assumptions utilized by the Determining Party in making such determination and (ii) in the case of a calculation, the manner in which such calculation was performed using such inputs or assumptions. For the avoidance of doubt, the Determining Party shall not be required to disclose any proprietary models or data. | |
|
||
Acknowledgments:
|
||
|
||
Non-Reliance:
|
Applicable. | |
|
||
Agreements and Acknowledgments Regarding
Hedging Activities:
|
Applicable. | |
|
||
Additional Acknowledgments:
|
Applicable. |
(a) | Commodity Exchange Act. It is an eligible contract participant within the meaning of Section 1a(12) of the U.S. Commodity Exchange Act, as amended (the CEA ). The Transaction has been subject to individual negotiation by the parties. The Transaction has not been executed or traded on a trading facility as defined in Section 1a(33) of the CEA; | ||
(b) | Securities Act. It is a qualified institutional buyer as defined in Rule 144A under the Securities Act, or an accredited investor as defined in Section 2(a)(15)(ii) of the Securities Act; and | ||
(c) | ERISA. The assets used in the Transaction (1) are not assets of any plan (as such term is defined in Section 4975 of the U.S. Internal Revenue Code (the Code )) subject to Section 4975 of the Code or any employee benefit plan (as such term is defined in Section 3(3) of the U.S. Employee Retirement Income Security Act of 1974, as amended ( ERISA )) subject to Title I of ERISA, and (2) do not constitute plan assets within the meaning of Department of Labor Regulation 2510.3-101, 29 CFR Section 2510-3-101. |
(a) | If Counterparty purchases any Shares pursuant to this Transaction, such purchase(s) will comply with (i) all laws and regulations applicable to it and (ii) all contractual obligations of Counterparty; |
10
(b) | Counterparty shall immediately provide written notice to Barclays upon obtaining knowledge of the occurrence of any event that would constitute an Event of Default, a Potential Event of Default, a Potential Adjustment Event (other than an event constituting a Potential Adjustment Event solely by reason of Section 11.2(e)(vii) of the Equity Definitions), a Merger Event or any other Extraordinary Event; provided, however , that should Counterparty be in possession of material non-public information regarding Counterparty, Counterparty shall not communicate such information to Barclays; | ||
(c) | (A) Counterparty is acting for its own account, and it has made its own independent decisions to enter into the Transaction and as to whether the Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary, (B) Counterparty is not relying on any communication (written or oral) of Barclays or any of its affiliates as investment advice or as a recommendation to enter into the Transaction (it being understood that information and explanations related to the terms and conditions of the Transaction shall not be considered investment advice or a recommendation to enter into the Transaction) and (C) no communication (written or oral) received from Barclays or any of its affiliates shall be deemed to be an assurance or guarantee as to the expected results of the Transaction; | ||
(d) | [Reserved] | ||
(e) | Counterparty has (and shall at all times during the Transaction have) the capacity and authority to invest directly in the Shares underlying the Transaction and has not entered into the Transaction with the intent to avoid any regulatory filings; | ||
(f) | Counterpartys financial condition is such that it has no need for liquidity with respect to its investment in the Transaction and no need to dispose of any portion thereof to satisfy any existing or contemplated undertaking or indebtedness; | ||
(g) | [Reserved] | ||
(h) | Counterparty is not as of the Trade Date, and shall not be after giving effect to the transactions contemplated hereby, insolvent (as such term is defined in Section 101(32) of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the Bankruptcy Code )) and Counterparty would be able to purchase a number of Shares equal to the maximum Number of Shares to be Delivered hereunder in compliance with the laws of the jurisdiction of Counterpartys incorporation or organization; | ||
(i) | the Transaction, and any repurchase of the Shares by Counterparty in connection with the Transaction, is pursuant to a publicly announced Share repurchase program that has been approved by Counterpartys board of directors and is in accordance with Counterpartys Derivative Use Policy, which has been approved by Counterpartys board of directors, and any such repurchase has been, or shall when so required be, publicly disclosed in its periodic filings under the Exchange Act and its financial statements and notes thereto; | ||
(j) | Counterparty understands, agrees and acknowledges that Barclays has no obligation or intention to register the Transaction under the Securities Act, any state securities law or other applicable federal securities law; | ||
(k) | each of Counterpartys filings under the Securities Act, the Exchange Act, or other applicable securities laws that are required to be filed have been filed and that, as of the respective dates thereof and as of the date of this representation, such filings when considered as a whole (with the more recent such filings deemed to amend inconsistent statements contained in any earlier such filings) do not contain any misstatement of a material fact or any omission of a material fact |
11
required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading; | |||
(l) | Counterparty is not, and after giving effect to the transactions contemplated hereby will not be, required to register as an investment company as such term is defined in the Investment Company Act of 1940, as amended; | ||
(m) | Counterparty understands, agrees and acknowledges that no obligations of Barclays to it hereunder shall be entitled to the benefit of deposit insurance and that such obligations shall not be guaranteed by any affiliate of Barclays or any governmental agency; | ||
(n) | without limiting the generality of Section 13.1 of the Equity Definitions, Counterparty acknowledges that Barclays is not making any representations or warranties with respect to the treatment of the Transaction under FASB Statements 128, 133, as amended, 149 or 150, EITF Issue No. 00-19, 01-6, 03-6 or 07-5 (or any successor issue statements), under FASBs Liabilities & Equity Project or under FASB Staff Position or any other accounting guidance; and | ||
(o) | Counterparty is not entering into the Transaction for the purpose of (i) creating actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or (ii) raising or depressing or otherwise manipulating the price of the Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange Act. |
(a) | Method of Delivery. Whenever delivery of funds or other assets is required hereunder by or to Counterparty, such delivery shall be effected through Agent. In addition, all notices, demands and communications of any kind relating to the Transaction between Barclays and Counterparty shall be transmitted exclusively through Agent. | ||
(b) | Rule 10b-18. |
(i) | During the Net Share Settlement Period, if any, Barclays agrees (x) to make all purchases of Shares (A) through only one broker or dealer on any single day and (B) in a manner that would comply with the limitations set forth in clauses (b)(2), (b)(4) and (c) of Rule 10b-18 under the Securities Exchange Act of 1934 ( Rule 10b-18 ) and (y) to use commercially reasonable efforts to make all purchases of Shares in a manner that would comply with the limitations set forth in clause (b)(3) of Rule 10b-18, in each case as if such rule was applicable to such purchases. | ||
(ii) | Except as disclosed to Barclays in writing prior to the Trade Date, Counterparty represents and warrants to Barclays that it has not made any purchases of blocks by or for itself or any of its Affiliated Purchasers pursuant to the one block purchase per week exception in Rule 10b-18(b)(4) under the Exchange Act during each of the four calendar weeks preceding such date ( Rule 10b-18 purchase , blocks and Affiliated Purchaser , each as defined in Rule 10b-18). | ||
(iii) | Counterparty agrees that it (A) will not, on any day during the Trading Period and the Net Share Settlement Period, if any, make, or permit to be made, any public announcement (as defined in Rule 165(f) under the Securities Act) of any Merger Transaction or potential Merger Transaction unless such public announcement is made prior to the opening or after the close of the regular trading session on the Exchange for the Shares or unless Counterparty reasonably concludes, based on the advice of outside counsel, that it is required to make such an announcement during such a regular trading session; (B) shall promptly (but in any event prior to the next opening of the regular trading session on the Exchange in the case of such an announcement not made during such a regular trading |
12
session) notify Barclays following any such announcement that such announcement has been made; and (C) shall promptly (but in any event prior to the next opening of the regular trading session on the Exchange) provide Barclays with written notice specifying (i) Counterpartys average daily Rule 10b-18 Purchases (as defined in Rule 10b-18) during the three full calendar months immediately preceding the announcement date that were not effected through Barclays or its affiliates and (ii) the number of Shares purchased pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act for the three full calendar months preceding the announcement date. Such written notice shall be deemed to be a certification by Counterparty to Barclays that such information is true and correct. In addition, Counterparty shall promptly notify Barclays of the earlier to occur of the completion of such transaction and the completion of the vote by target shareholders. Merger Transaction means any merger, acquisition or similar transaction involving a recapitalization as contemplated by Rule 10b-18(a)(13)(iv) under the Exchange Act. |
(c) | Rule 10b5-1. It is the intent of the parties that this Transaction comply with the requirements of Rule 10b5-1(c)(1)(i)(B) of the Exchange Act ( Rule 10b5-1 ), and the parties agree that this Confirmation shall be interpreted to comply with the requirements of Rule 10b5-1(c), and Counterparty shall take no action that results in this Transaction not so complying with such requirements. Without limiting the generality of the preceding sentence, Counterparty acknowledges and agrees that (A) Counterparty does not have, and shall not attempt to exercise, any influence over how, when or whether Barclays effects any purchases in connection with this Transaction, (B) during the Trading Period and the Net Share Settlement Period, if any, neither Counterparty nor its officers or employees shall, directly or indirectly, communicate any information regarding Counterparty or the Shares to any employee of Barclays or its affiliates who is directly involved with the hedging of and trading with respect to this Transaction, (C) Counterparty is entering into this Transaction in good faith and not as part of a plan or scheme to evade compliance with federal securities laws including, without limitation, Rule 10b-5 and (D) Counterparty will not alter or deviate from this Confirmation or enter into or alter a corresponding hedging transaction with respect to the Shares. Counterparty also acknowledges and agrees that any amendment, modification, waiver or termination of this Confirmation must be effected in accordance with the requirements for the amendment or termination of a plan as defined in Rule 10b5-1(c). Without limiting the generality of the foregoing, any such amendment, modification, waiver or termination shall be made in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5 and no such amendment, modification or waiver shall be made at any time at which Counterparty or any officer or director of Counterparty is aware of any material non-public information regarding Counterparty or the Shares. | ||
(d) | Company Purchases . Without the prior written consent of Barclays and except for purchases which are not solicited by or on behalf of Counterparty or its affiliated purchasers (each as defined in Rule 10b-18 of the Exchange Act) or purchases executed by Barclays or an Affiliate of Barclays, Counterparty shall not purchase, and shall cause its affiliated purchasers not to directly or indirectly (including, without limitation, by means of any cash-settled or other derivative instrument) purchase, offer to purchase, place any bid or limit order that would effect a purchase of, or commence any tender offer relating to, any Shares (or an equivalent interest, including a unit of beneficial interest in a trust or limited partnership or a depository share) or any security convertible into or exchangeable or exercisable for Shares during the Trading Period and the Net Share Settlement Period, if any. | ||
(e) | Regulation M. Counterparty is not on the date hereof, engaged in a distribution, as such term is used in Regulation M under the Exchange Act, of any securities of Counterparty for which the Shares are a covered security, as defined in Rule 100 of Regulation M and Counterparty is subject to a Rule 102 restricted period with respect to the Shares, other than a distribution meeting the requirements of the exception set forth in Section 102(b)(7) of Regulation M under the Exchange Act. Counterparty shall not, until the Settlement Date or the Net Share Settlement Date, as applicable, engage in any such distribution. |
13
(f) | [Reserved] | ||
(g) | Transfer or Assignment. Counterparty may not transfer or assign any of its rights or obligations under the Transaction without the prior written consent of Barclays. Notwithstanding any provision of the Agreement to the contrary, Barclays may, subject to applicable law, freely transfer and assign all of its rights and obligations under the Transaction without the consent of Counterparty to any affiliate of Barclays whose obligations hereunder are guaranteed by Barclays. | ||
Notwithstanding any other provision in this Confirmation to the contrary requiring or allowing Barclays to purchase, sell, receive or deliver any Shares or other securities to or from Counterparty, Barclays may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities and otherwise to perform Barclays obligations in respect of the Transaction and any such designee may assume such obligations. Barclays shall be discharged of its obligations to Counterparty to the extent of any such performance. | |||
(h) | Role of Agent. Each of Barclays and Counterparty acknowledges to and agrees with the other party hereto and to and with the Agent that (i) the Agent is acting as agent for Barclays under the Transaction pursuant to instructions from such party, (ii) the Agent is not a principal or party to the Transaction, and may transfer its rights and obligations with respect to the Transaction, (iii) the Agent shall have no responsibility, obligation or liability, by way of issuance, guaranty, endorsement or otherwise in any manner with respect to the performance of either party under the Transaction, (iv) Barclays and the Agent have not given, and Counterparty is not relying (for purposes of making any investment decision or otherwise) upon, any statements, opinions or representations (whether written or oral) of Barclays or the Agent, other than the representations expressly set forth in this Confirmation or the Agreement, and (v) each party agrees to proceed solely against the other party, and not the Agent, to collect or recover any money or securities owed to it in connection with the Transaction. Each party hereto acknowledges and agrees that the Agent is an intended third party beneficiary hereunder. Counterparty acknowledges that the Agent is an affiliate of Barclays. | ||
(i) | Regulatory Provisions. The time of dealing for the Transaction will be confirmed by Barclays upon written request by Counterparty. The Agent will furnish to Counterparty upon written request a statement as to the source and amount of any remuneration received or to be received by the Agent in connection with a Transaction. | ||
(j) | Netting and Setoff. Obligations under the Transaction shall not be netted, recouped or set off (including pursuant to Section 6 of the Agreement) against any other obligations of the parties, whether arising under the Agreement, this Confirmation, under any other agreement between the parties hereto, by operation of law or otherwise, and no other obligations of the parties shall be netted, recouped or set off (including pursuant to Section 6 of the Agreement) against obligations under the Transaction, whether arising under the Agreement, this Confirmation, under any other agreement between the parties hereto, by operation of law or otherwise, and each party hereby waives any such right of setoff, netting or recoupment; provided that both parties agree that subparagraph (ii) of Section 2(c) of the Agreement shall apply to the Transaction, except that upon the occurrence of an Event of Default or Termination Event with respect to a party who is the Defaulting Party or the Affected Party ( X ), the other party ( Y ) will have the right (but not be obliged) without prior notice to X or any other person to set-off or apply any obligation of X under the Transaction owed to Y (or any Affiliate of Y) (whether or not matured or contingent and whether or not arising under the Agreement, and regardless of the currency, place of payment or booking office of the obligation) against any obligation of Y (or any Affiliate of Y) under an Equity Contract owed to X (whether or not matured or contingent and whether or not arising under the Agreement, and regardless of the currency, place of payment or booking office of the obligation). Y will give notice to the other party of any set-off effected under this paragraph. Equity Contract shall mean for purposes of this paragraph any transaction relating to Shares between X and Y (or any Affiliate of Y) that qualifies as equity under applicable accounting rules. Amounts (or the relevant portion of such amounts) subject to set-off may be converted by Y |
14
into the Termination Currency at the rate of exchange at which such party would be able, acting in a reasonable manner and in good faith, to purchase the relevant amount of such currency. If any obligation is unascertained, Y may in good faith estimate that obligation and set-off in respect of the estimate, subject to the relevant party accounting to the other when the obligation is ascertained. Nothing in this section shall be effective to create a charge or other security interest, and nothing in this section shall impair Counterpartys rights to foreclose upon or liquidate or otherwise dispose of the Collateral in exercising its rights under the CSA or the UCC. | |||
(k) | Staggered Settlement. Barclays may, by notice to Counterparty on or prior to any Settlement Date (a Nominal Settlement Date ), elect to deliver any Shares deliverable on such Nominal Settlement Date on two or more dates (each, a Staggered Settlement Date ) or at two or more times on the Nominal Settlement Date as follows: (i) in such notice, Barclays will specify to Counterparty the related Staggered Settlement Dates (each of which will be on or prior to such Nominal Settlement Date) or delivery times and how it will allocate the Shares it is required to deliver under the applicable settlement method above among the Staggered Settlement Dates or delivery times; and (ii) the aggregate number of Shares that Barclays will deliver to Counterparty hereunder on all such Staggered Settlement Dates and delivery times will equal the number of Shares that Barclays would otherwise be required to deliver on such Nominal Settlement Date. | ||
(l) | Alternative Calculations and Counterparty Payment on Early Termination and on Certain Extraordinary Events. If Barclays owes Counterparty any amount in connection with the Transaction (i) pursuant to Sections 12.2, 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions or (ii) pursuant to Section 6(d)(ii) of the Agreement (a Payment Obligation ), Counterparty shall have the right, in its sole discretion, to require Barclays to satisfy any such Payment Obligation by delivery of Termination Delivery Units (as defined below) by giving irrevocable telephonic notice to Barclays, confirmed in writing within one Scheduled Trading Day, no later than noon New York time on the Early Termination Date or other date the Transaction is cancelled or terminated, as applicable, where such notice shall include a representation and warranty from Counterparty that it is not, as of the date of the telephonic notice and the date of such written notice, aware of any material non-public information concerning itself or the Shares (where material shall have the meaning set forth in paragraph 5(m) below) ( Notice of Counterparty Termination Delivery ); provided that Counterparty shall not have the right to so elect in the event of (i) an Insolvency, a Nationalization or a merger event, in each case, in which the consideration or proceeds to be paid to holders of Shares consists solely of cash or (ii) an Event of Default in which Counterparty is the Defaulting Party or a Termination Event in which Counterparty is the Affected Party, which Event of Default or Termination Event resulted from an event or events within Counterpartys control. Within a commercially reasonable period of time following receipt of a Notice of Counterparty Termination Delivery, Barclays shall deliver to Counterparty a number of Termination Delivery Units having a fair market value (net of any brokerage and underwriting commissions and fees) equal to the amount of such Payment Obligation (such number of Termination Delivery Units to be delivered to be determined by the Calculation Agent as the number of whole Termination Delivery Units that could be sold over a commercially reasonable period of time to generate proceeds equal to the cash equivalent of such payment obligation). If the provisions set forth in this paragraph are applicable, the provisions of Sections 9.8, 9.9, 9.10, 9.11 and 9.12 of the Equity Definitions shall be applicable, except that all references to Shares shall be read as references to Termination Delivery Units. Termination Delivery Units means in the case of a Termination Event, Event of Default or Delisting, one Share or, in the case of Nationalization, Insolvency, Tender Offer or Merger Event, a unit consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Nationalization, Insolvency, Tender Offer or Merger Event; provided that if such Nationalization, Insolvency, Tender Offer or Merger Event involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash. |
15
(m) | No Material Non-Public Information. On the Trade Date, Counterparty represents and warrants to Barclays that it is not aware of any material non-public information concerning itself or the Shares. Material information for these purposes is any information to which an investor would reasonably attach importance in reaching a decision to buy, sell or hold Shares. | ||
(n) | No Counterparty Payment or Delivery Obligations upon Settlement. Notwithstanding anything to the contrary herein, under no circumstances will Counterparty owe Barclays any amount upon settlement (including settlement upon Early Terminations and Certain Extraordinary Events). | ||
(o) | [Reserved] | ||
(p) | Tax Disclosure. Notwithstanding anything to the contrary herein, in the Equity Definitions or in the Agreement, and notwithstanding any express or implied claims of exclusivity or proprietary rights, the parties (and each of their employees, representatives or other agents) are authorized to disclose to any and all persons, beginning immediately upon commencement of their discussions and without limitation of any kind, the tax treatment and tax structure of the Transaction, and all materials of any kind (including opinions or other tax analyses) that are provided by either party to the other relating to such tax treatment and tax structure. | ||
(q) | Status of Claims in Bankruptcy. Barclays acknowledges and agrees that this Confirmation is not intended to convey to Barclays rights with respect to the Transaction that are senior to the claims of common stockholders in any U.S. bankruptcy proceedings of Counterparty; provided that nothing herein shall limit or shall be deemed to limit Barclays right to pursue remedies in the event of a breach by Counterparty of its obligations and agreements with respect to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit Barclays rights in respect of any transactions other than the Transaction. | ||
(r) | No Collateral . Notwithstanding any provision of this Confirmation, the Agreement, Equity Definitions or any other agreement between the parties to the contrary, the obligations of Counterparty under the Transaction are not secured by any collateral. | ||
(s) | Securities Contract; Swap Agreement. The parties hereto agree and acknowledge that Barclays is one or more of a financial institution, swap participant and financial participant within the meaning of Sections 101(22), 101(53C) and 101(22A) of the Bankruptcy Code. The parties hereto further agree and acknowledge (A) that this Confirmation is (i) a securities contract, as such term is defined in Section 741(7) of the Bankruptcy Code, with respect to which each payment and delivery hereunder or in connection herewith is a termination value, payment amount or other transfer obligation within the meaning of Section 362 of the Bankruptcy Code and a settlement payment or a transfer within the meaning of Section 546 of the Bankruptcy Code, and (ii) a swap agreement, as such term is defined in Section 101(53B) of the Bankruptcy Code, with respect to which each payment and delivery hereunder or in connection herewith is a termination value, a payment amount or other transfer obligation within the meaning of Section 362 of the Bankruptcy Code and a transfer within the meaning of Section 546 of the Bankruptcy Code, and (B) that Barclays is entitled to the protections afforded by, among other sections, Section 362(b)(6), 362(b)(17), 362(b)(27), 362(o), 546(e), 546(g), 546(j), 548(d)(2), 555, 560 and 561 of the Bankruptcy Code. | ||
(t) | [Reserved] | ||
(u) | Payments on Early Termination . The parties hereto agree that for the Transaction, for the purposes of Section 6(e) of the Agreement, Loss and Second Method will apply. Notwithstanding anything to the contrary herein, in no event will any Adjustment be made or consideration be paid as a result of an Extraordinary Dividend declared by Counterparty. |
16
(v) | Governing Law. The law of the State of New York (without reference to choice of law doctrine). | ||
(w) | Waiver of Jury Trial. EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING RELATING TO THE TRANSACTION. EACH PARTY (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF SUCH A SUIT, ACTION OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HAVE BEEN INDUCED TO ENTER INTO THE TRANSACTION, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS PROVIDED HEREIN. |
(a) | Account for payments to Counterparty: | ||
TD Ameritrade Holding Corporation
ABA: **** Acct: **** Acct No.: **** |
|||
Account for delivery of Shares to Counterparty: | |||
TD Ameritrade Holding Corporation
Ref: **** |
|||
(b) | Account for payments to Barclays: | ||
Bank: Barclays Bank plc NY
ABA: **** BIC: **** Acct: **** Beneficiary: **** Ref: **** |
17
(a) | Address for notices or communications to Counterparty: | ||
TD Ameritrade Holding Corporation
4211 South 102nd Street Omaha, NE 68127 Attention: **** Telephone No.: **** Facsimile No.: **** |
|||
(b) | Address for notices or communications to Barclays: | ||
Barclays Bank PLC
c/o Barclays Capital Inc. 745 Seventh Ave. New York, NY 10019 Attn: **** Telephone: **** Facsimile: **** |
18
Very truly yours, | ||||
|
||||
BARCLAYS CAPITAL INC., | ||||
acting solely as Agent in connection with this Transaction | ||||
|
||||
By:
|
/s/PAUL ROBINSON
|
|||
|
Title: Managing Director |
By: | /s/ WILLIAM J. GERBER | |||
Name: William J. Gerber | ||||
Title: Executive Vice President, Chief Financial Officer |
19
1. Prepayment Amount:
|
USD 169,200,000 | |
|
||
2. Maximum Maturity Date:
|
November 30, 2010 | |
|
||
3. Minimum Maturity Date:
|
September 20, 2010 | |
|
||
4. Discount:
|
**** | |
|
||
5. Number of Shares to be Delivered:
|
A number of Shares determined by reference to the Grid, as set forth in Schedule B. |
20
21
Fiscal Year Ended | ||||||||||||||||||||
Sept. 30, | Sept. 30, | Sept. 30, | Sept. 30, | Sept. 29, | ||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Determination of earnings:
|
||||||||||||||||||||
Pre-tax income
|
$ | 912,085 | $ | 1,059,405 | $ | 1,263,502 | $ | 1,034,703 | $ | 857,305 | ||||||||||
Fixed charges
|
67,148 | 68,772 | 338,693 | 585,740 | 441,606 | |||||||||||||||
|
||||||||||||||||||||
Earnings before income taxes and fixed charges (A)
|
$ | 979,233 | $ | 1,128,177 | $ | 1,602,195 | $ | 1,620,443 | $ | 1,298,911 | ||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Fixed charges:
|
||||||||||||||||||||
Interest on borrowings
(1)
|
$ | 44,858 | $ | 40,070 | $ | 78,447 | $ | 118,173 | $ | 93,988 | ||||||||||
Capitalized interest
|
97 | | | | | |||||||||||||||
Brokerage interest expense
|
6,065 | 15,165 | 249,616 | 455,467 | 335,820 | |||||||||||||||
Interest portion of rent expense
|
16,128 | 13,537 | 10,630 | 12,100 | 11,798 | |||||||||||||||
|
||||||||||||||||||||
Total fixed charges (B)
|
$ | 67,148 | $ | 68,772 | $ | 338,693 | $ | 585,740 | $ | 441,606 | ||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Ratio of earnings to fixed charges (A) ÷ (B)
|
14.6 | 16.4 | 4.7 | 2.8 | 2.9 | |||||||||||||||
|
||||||||||||||||||||
Ratio of earnings to fixed charges, excluding
brokerage interest expense (2) |
15.9 | 20.8 | 15.2 | 8.9 | 9.1 |
(1) | Interest on borrowings includes amortization of capitalized debt issuance costs. | |
(2) | Because interest expense incurred in connection with brokerage activities is completely offset by brokerage interest revenue, the Company considers such interest to be a reduction of net revenues. Accordingly, the ratio of earnings to fixed charges, excluding brokerage interest expense, reflects the elimination of such interest expense from fixed charges. |
Subsidiary | State or Other Jurisdiction of Domicile | |
Ameritrade Advisory Services, LLC
|
Delaware | |
Ameritrade International Company, Inc.
|
Cayman Islands | |
Amerivest Investment Management, LLC
|
Delaware | |
Datek Online Management Corp.
|
Delaware | |
Financial Passport, Inc.
|
Delaware | |
Futures Forex Trading LLC
|
Delaware | |
Investools Inc.
|
Utah | |
Red Option Advisors, Inc.
|
Delaware | |
T2 API Technologies, LLC
|
Delaware | |
TD Ameritrade Clearing, Inc.
|
Nebraska | |
TD Ameritrade, Inc.
|
New York | |
TD Ameritrade IP Company, Inc.
|
Delaware | |
TD Ameritrade Online Holdings Corp.
|
Delaware | |
TD Ameritrade Services Company, Inc.
|
Delaware* | |
TD Ameritrade Trust Company
|
Maine | |
TD Waterhouse Canadian Call Center, Inc.
|
Canada | |
TenBagger, Inc.
|
Nevada | |
thinkorswim Advisors, Inc.
|
Illinois | |
thinkorswim Australia Pty Ltd.
|
Australia | |
thinkorswim Group Inc.
|
Delaware | |
thinkorswim Holdings Inc.
|
Delaware | |
thinkorswim Singapore Pte Ltd.
|
Singapore | |
Bellevue Chicago, LLC
|
Delaware | |
ThinkTech, Inc.
|
Delaware** | |
tos RED, Inc.
|
Delaware | |
tos Services, Inc.
|
Delaware | |
TOS Trading LLC
|
Delaware | |
TradeBridge, Inc.
|
Maryland |
* | In Texas this entity does business as Ameritrade Support Services Corporation | |
** | In Texas this entity does business as T2 Technology Support, Inc. |
(1) | Registration Statement (Form S-8 No. 333-132016) of TD Ameritrade Holding Corporation, | |
(2) | Registration Statement (Form S-8 No. 333-105336) of TD Ameritrade Holding Corporation, | |
(3) | Registration Statement (Form S-8 No. 333-99481) of TD Ameritrade Holding Corporation, | |
(4) | Registration Statement (Form S-8 No. 333-99353) of TD Ameritrade Holding Corporation, | |
(5) | Registration Statement (Form S-8 No. 333-86164) of TD Ameritrade Holding Corporation, | |
(6) | Registration Statement (Form S-8 No. 333-77573) pertaining to the Associates 401(k) Profit Sharing Plan and Trust of TD Ameritrade Holding Corporation, | |
(7) | Registration Statement (Form S-8 No. 333-160073) of TD Ameritrade Holding Corporation, | |
(8) | Registration Statement (Form S-3 No. 333-87999) of TD Ameritrade Holding Corporation, | |
(9) | Registration Statement (Form S-3 No. 333-163211) of TD Ameritrade Holding Corporation, and | |
(10) | Post Effective Amendment No. 1 to Registration Statement No. 333-88632 on Form S-3 to Form S-4 of TD Ameritrade Holding Corporation; |
1. | I have reviewed this annual report on Form 10-K of TD Ameritrade Holding Corporation; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors: |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
/s/ FREDRIC J. TOMCZYK | ||||
Fredric J. Tomczyk | ||||
President, Chief Executive Officer | ||||
1. | I have reviewed this annual report on Form 10-K of TD Ameritrade Holding Corporation; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors: |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
/s/ WILLIAM J. GERBER | ||||
William J. Gerber | ||||
Executive Vice President, Chief Financial Officer | ||||
Dated: November 19, 2010 | /s/ FREDRIC J. TOMCZYK | |||
Fredric J. Tomczyk | ||||
President, Chief Executive Officer | ||||
Dated: November 19, 2010 | /s/ WILLIAM J. GERBER | |||
William J. Gerber | ||||
Executive Vice President,
Chief Financial Officer |
||||