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Corporate Governance Guidelines

Corporate Governance | Committee Composition | Corporate Governance Guidelines | Code of Conduct and Ethics

Structure of the Board of Directors

A. Composition
Directors are elected annually for one-year terms and until their successors are elected and qualified or their earlier resignation or removal.

B.Size
Pursuant to the Certificate of Incorporation, the minimum number of authorized directors is one. The Board shall set the actual number of directors from time to time based on the terms of the Certificate of Incorporation and such other factors as it may deem appropriate, subject to changing circumstances that may warrant a higher or lower number.

C. Characteristics
It is the policy of the Board of Directors that the Board at all times reflect the following characteristics:

  • each director shall at all times exhibit high standards of integrity and commitment and the ability and willingness to apply sound business judgment;
  • directors shall have reputations, both personal and professional, consistent with the image and reputation of TD Banknorth;
  • directors shall be highly accomplished in their respective field, with superior credentials and recognition;
  • the Board shall encompass a range of talent, skill and expertise sufficient to provide sound and prudent guidance with respect to all of TD Banknorth's operations and interests;
  • each director shall dedicate sufficient time, energy and attention to ensure the diligent performance of his or her duties, including by attending meetings of the Board and Committees of which he or she is a member, and by reviewing in advance all meeting materials;
  • the Board shall meet the standards of independence from TD Banknorth and its management set forth in the Independence Standards attached as Annex A hereto;
  • at least two members of the Board shall have banking or related financial management expertise, as defined in regulations and guidance of the Federal Deposit Insurance Corporation regarding audit committees of depository institutions;
  • the Board shall be representative of the geographic areas of the communities which it serves; and
  • the Board shall reflect a diversity of background and experience.
Other than the foregoing, there are no stated minimum criteria for directors, except for the retirement policy described in Section III D 1 below and a new director?s willingness to comply with the equity ownership guidelines for directors described in Section III E below.

D. Retirement Age and Other Limits

  1. A director may not stand for re-election after the age of 72. If a director reaches the age of 72 before the expiration of his or her term, the director may serve until the next annual meeting of stockholders.

  2. Any director whose principal occupation or business association has changed substantially from the time he or she was elected to the Board of Directors must offer to voluntarily resign from the Board. In such circumstances, the Board will consider the appropriateness of such director?s continued service. Upon such consideration, the Board may reject or accept the director?s tendered resignation.

  3. Directors must provide advance notice to the Chairman of the Board of his or her acceptance of an invitation to serve on the board of directors of any other public company.

E. Stock Ownership by Directors
It is the policy of the Board that all directors hold a significant equity interest in The Toronto-Dominion Bank ("TD"). Directors are required to own, or acquire within five years of first becoming a director or by April 20, 2012, whichever is later, Common Shares of TD having an aggregate market value of at least five times the annual retainer for directors. Both direct and indirect ownership (i.e., through certain family trusts) shall be taken into account for this purpose. The value of options to purchase Common Shares of TD, as well as Restricted Stock Units and Deferred Share Units with respect to Common Shares of TD, shall be taken into account in calculating stock ownership. Options shall be considered to be worth the amount that the current market price of the Common Shares exceeds the exercise price of the option.

The Board recognizes that exceptions to this policy may be necessary or appropriate in individual cases, and may approve such exceptions from time to time as it deems appropriate.

F. Evaluation of the Board and its Committees
The Human Resources and Compensation Committee shall conduct an annual review of the conduct and performance of the full Board of Directors, which shall include, among other things, an assessment of:

  • the Board's composition and independence;
  • the Board's access to and review of information from management, and the quality of such information;
  • maintenance and implementation of TD Banknorth's standards of conduct; and
  • maintenance and implementation of these Guidelines.
In performing its evaluation, the Human Resources and Compensation Committee may circulate surveys, questionnaires and evaluation forms to directors and use such other methods as it deems helpful and appropriate in order to assess the effectiveness of the Board. At the conclusion of this process, the Chairman of the Human Resources and Compensation Committee shall report the Committee's conclusions to the full Board of Directors and may make recommendations and changes that the Committee deems appropriate for consideration by the full Board of Directors.

The Human Resources and Compensation Committee also shall annually oversee the annual evaluations required to be conducted by the respective committees of the Board, as applicable, and if appropriate the Committee may make recommendations and changes that it deems appropriate for consideration by the full Board of Directors.

G. Lead Directors
Up to two of TD Banknorth's non-employee directors shall serve as "Lead Directors" and be elected by vote of the non-employee directors of TD Banknorth. The Lead Director(s) are responsible for coordinating the activities of the other non-employee directors, which includes (among other things) establishing the agenda for executive sessions of the non-employee directors, with or without the presence of management, as required by these Guidelines. Each Lead Director shall be designated as Vice Chairman of the Board and will serve for a one-year term and until his or her successor is elected and qualified or his or her earlier resignation or removal.