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Provide Detailed Analysis of Strategic Combination Benefits for

Shareholders

    NEW YORK, June 8 /PRNewswire/ -- JANA Partners LLC ("JANA") and S.A.C.
 Capital Advisors, LLC ("SAC") today sent a letter to the Board of Directors
 (the "Board") of TD Ameritrade Holding Corp. ("TD Ameritrade") (NYSE:   AMTD)
 in response to TD Ameritrade's statement this week regarding the Board's
 exploration of strategic combinations. The two investors also called on the
 Board to create a special committee free from influence by the company's
 largest shareholder to explore such combinations. In addition, JANA and SAC
 provided the Board with their own analysis of what they called the "massive
 value creation opportunity" inherent in a combination with E*Trade
 Financial or Charles Schwab. The analysis is available at
 www.5464654545741.com.
     On May 29, 2007, JANA and SAC wrote to the Board claiming that TD
 Ameritrade could create maximum long-term shareholder value through a
 strategic combination, but that conflicts of interest on the Board related
 to the company's largest shareholder, Toronto-Dominion, stood in the way of
 this. On June 5, 2007, TD Ameritrade issued a public statement in response
 to this letter commenting on the Board's review of strategic combinations
 and related matters.
     In today's letter, JANA and SAC challenged TD Ameritrade's suggestion
 that the timing may not be right for such a combination, and called on the
 Board to demonstrate why such a transaction at this time would not be in
 shareholders' best interests. They also stated their belief that the
 Board's strategic review process, as described by TD Ameritrade this week,
 fails to cleanse the Board's review of what they called "glaring" conflicts
 of interest stemming from the influence of Toronto-Dominion, including
 Toronto-Dominion's desire to maintain substantial levels of ownership and
 influence in TD Ameritrade and its reliance on the company to advance its
 own business strategy.
     The full text of today's letter from JANA and SAC to TD Ameritrade's
 Board of Directors follows:
     June 8, 2007
 
 
     Board of Directors
     TD Ameritrade Holding Corporation
     4211 South 102nd Street
     Omaha, Nebraska 68127
     Attention:  J. Joe Ricketts, Chairman and Joseph H. Moglia, CEO
 
 
     VIA FACSIMILE AND OVERNIGHT DELIVERY
 
     Gentlemen,
     We read with great interest the statement issued this week by TD
 Ameritrade Holding Corporation ("TD Ameritrade" or the "Company") in
 response to our letter to the Company's Board of Directors (the "Board").
 Given that we have heard nothing else from the Company, we assume that this
 represents the Board's response to our letter. Simply put, nothing
 contained in the Company's statement changes our belief that the time to
 enter into a value- maximizing strategic combination is now or our belief
 that the interests of Toronto-Dominion Bank ("Toronto-Dominion") conflict
 with those of all other shareholders and are impeding the possibility of
 such a transaction. Moreover, we were astounded by the Company's comments
 regarding its review of strategic combinations, which indicated to us that
 the members of the Board who are meant to be independent of
 Toronto-Dominion do not adequately grasp the magnitude of the conflicts of
 interest arising from Toronto-Dominion's influence on its strategic review
 process and only re-enforces our belief that the Board must act immediately
 to eliminate these conflicts.
     Value Creation Opportunity. We note that the Board has not challenged
 our primary assertion that a strategic combination with E*Trade Financial
 ("E*Trade) or Charles Schwab ("Schwab") presents a massive value creation
 opportunity, nor do we believe they could credibly do so. Instead, the
 Company's response focuses on the timing of such a combination, claiming
 that such a transaction "must occur at the right time and be consistent
 with TD Ameritrade's business strategy." Quite frankly, we fail to see how
 an unbiased review could leave any doubt that the "right time" to pursue
 such a combination is now. This is particularly true given that the Company
 has now completed its integration of TD Waterhouse and that the currently
 favorable industry environment for transactions will most assuredly not
 last forever, creating the real risk that if the Board continues to wait it
 will have permanently squandered this opportunity.
     In fact, if the Board truly believes that entering into a strategic
 combination now would not create the highest possible long-term value for
 TD Ameritrade shareholders, we believe it is the Board's duty to explain to
 shareholders why this is the case, which will require more than general
 references to optimal timing or business strategy. Moreover, the Board
 would have to explain how it can hope to create more value through organic
 growth when the history of the industry and the Company's own history
 clearly indicate that consolidation has long been the key value driver in
 the discount brokerage sector, while organic growth has and continues to be
 highly challenging.
     TD Ameritrade has poured over $200 million into advertising since the
 merger with TD Waterhouse and maintains over 100 branches at an estimated
 annual cost of $75 million, yet has produced little in the way of asset
 growth. In the 12 months ended March 31, 2007, the number of total customer
 accounts has grown by less than 3%, and the number of more valuable
 qualified accounts (those with more than $2,000 in assets) has actually
 declined. In addition, total client assets in this time have only grown by
 approximately 7%, while the S&P 500 Index has grown over 10% during the
 same period. It is true as the Company pointed out in its response that it
 saw a significant increase in gross new account openings during the second
 quarter of 2007 compared to the first quarter of 2007. However, this
 increase overstates account growth given that the December quarter (the
 first quarter) is generally a weaker gross new account opening quarter and
 the March quarter (the second quarter) is generally the strongest (due to
 tax season, year end bonus payments and other seasonal factors). Therefore,
 this growth says nothing about the success of the Company's fledgling mass
 affluent strategy or efforts to improve marketing efficiency. We believe
 the Company's stock performance immediately following the release of its
 most recent quarterly results demonstrates that the market shares our view
 of the Company's organic growth prospects.
     In order to more fully set forth the immediate value creation
 opportunity that a strategic combination presents, we have provided for the
 Board's review a detailed analysis (which is available at
 www.5464654545741.com) of the long- term shareholder value which can be
 created by a strategic combination. As our analysis sets forth in more
 detail, the synergies in such a combination would be enormous, with annual
 net near-term synergies totaling $600 million in the case of E*Trade and
 $800 million in the case of Schwab, which when capitalized generates
 billions in long-term value for shareholders. Also, as discussed further in
 our analysis, each combination offers compelling strategic benefits for all
 parties, including the benefits of a broader product offering and deeper
 customer relationships which will translate into increased "wallet share"
 of customer assets. While we understand that Schwab representatives have
 publicly expressed skepticism regarding such a combination, we believe that
 if the Board were vigorously pursuing a transaction with no onerous
 pre-conditions set by Toronto-Dominion it could convince Schwab's
 leadership of the merits of such a combination given the verifiably
 significant synergies it would create.
     Board Conflicts. The Company's response also does nothing to allay our
 concerns that glaring conflicts of interest on the Board are standing in
 the way of maximum value creation for shareholders or our belief that the
 Board's independent members have a fiduciary obligation to cleanse the
 Board's exploration of strategic combinations of such conflicts. These
 conflicts include:
     * It is well known that Toronto-Dominion views its TD Ameritrade stake as
       a key strategic asset, rather than a pure investment.  Just last month,
       when Toronto-Dominion President & CEO (and TD Ameritrade Board member)
       W. Edmund Clark was asked on an earnings call why Toronto-Dominion
       retains its 40% stake despite the obvious value to others, he responded,
       "Probably because it's very valuable to me."  Mr. Clark then went on to
       list the strategic benefits to Toronto-Dominion of holding the stake,
       which included providing Toronto-Dominion a growth strategy in the U.S.
       and building brand equity for Toronto-Dominion through TD Ameritrade's
       "heavy advertising" (demonstrating an eagerness to see TD Ameritrade
       resources squandered for Toronto-Dominion's benefit which is highly
       troubling).  Further evidence can be found in the recent high turnover
       of Company management and replacement by former Toronto-Dominion
       executives, many of whom came from industry laggard TD Waterhouse.  In
       fact, we find it highly troubling that the Company chose to combine its
       response with the announcement that another Toronto-Dominion executive
       would be joining TD Ameritrade, apparently as a successor-in-waiting to
       Mr. Moglia.
     * Depending on the transaction structure, a strategic combination with
       Schwab or E*Trade could diminish Toronto-Dominion's ownership stake and
       Board representation to the point that Toronto-Dominion would be
       deprived of the favorable accounting treatment which allows it to report
       its share of TD Ameritrade earnings.
     * A strategic combination with E*Trade would give the combined entity
       broad banking capabilities, eliminating the Company's reliance on
       Toronto-Dominion's banking function and reducing Toronto-Dominion's
       influence, and would not fit into Toronto-Dominion's branch-based
       banking strategy in the U.S.
     The Company's response states that the Board when considering possible
 strategic combinations seeks the advice of various "independent" legal and
 financial advisors. However, while we have no doubt that the Board employs
 such advisors, the fact remains that it allows a representative of Toronto-
 Dominion to sit on the Board committee which reviews possible strategic
 transactions despite the glaring conflicts described above. Moreover, we
 believe that the looming presence of Toronto-Dominion over the exploration
 of any such combination by this Board committee, particularly with what we
 understand to be Toronto-Dominion's pre-conditions for a transaction
 including maintaining certain levels of ownership and board representation
 in any combined entity, has had a chilling effect on the possibility of
 such a transaction.
     We find it astounding that the independent members of the Board have
 not done more to cleanse the Board's review of strategic combinations of
 influence by Toronto-Dominion. Specifically, we believe that the Board must
 create a special committee, without participation by the directors selected
 by Toronto- Dominion, to oversee the immediate pursuit of a strategic
 combination without interference by Toronto-Dominion. Toronto-Dominion may
 if it chooses oppose such a transaction, but its concerns cannot be given
 preeminence given that a majority of shareholders could approve such a
 combination even over Toronto- Dominion's objections. Alternately, if
 Toronto-Dominion wishes to prevent this result, it can offer other
 shareholders full and fair value for their stakes. Forcing shareholders to
 wait however until the optimal time for Toronto-Dominion to make such a bid
 (which may mean waiting for Toronto- Dominion to improve its capital
 position) is unacceptable, particularly given its history in the case of TD
 Banknorth and TD Waterhouse of waiting for the share price of companies in
 which it holds a large stake to fall considerably before purchasing the
 remainder of the equity.
     We believe that the light of day is a powerful asset for shareholders
 and we welcome the Board's opening of a public discussion of these matters.
 Additionally, given the Board's desire to address these matters in full
 public view, we believe it is all the more important that shareholders have
 a full and accurate accounting of the Board's actions with respect to
 possible strategic combinations, so that they may judge for themselves the
 Board's conduct and whether each director has honored his fiduciary duties.
 Therefore, we will be sending the Company shortly a books and records
 request under Delaware law for documents related to the Board's analysis of
 and discussions regarding potential strategic transactions and related
 matters, including any instances where Toronto-Dominion's interests have
 come into conflict with those of all other TD Ameritrade shareholders.
     We look forward to the Board's timely response.
 
     Sincerely,
 
     /s/ Barry Rosenstein                 /s/ Steven A. Cohen
     Barry Rosenstein                     Steven A. Cohen
     JANA Partners LLC                    S.A.C. Capital Advisors, LLC
     Managing Partner                     Chief Executive Officer
 
 
 
     cc:
 
     Board of Directors, TD Ameritrade Holding Corporation
 
 

SOURCE JANA Partners LLC