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Tax Matters for Shareholders of Commerce Bancorp



Information on Tax Matters
for Shareholders of Commerce Bancorp, Inc.
Pursuant to the Acquisition of Commerce Bancorp, Inc.
by The Toronto-Dominion Bank

PLEASE READ THE DISCLAIMER BELOW

Material United States Federal Income Tax Consequences

For general information on the tax implications of the transaction, please see the discussion starting on page 55 of the definitive proxy statement/prospectus. A copy of the definitive proxy statement/prospectus is available at the following link:

Definitive proxy statement/prospectus

Summary of Calculation of Gain or Loss on the Merger for U.S. holders of Commerce Bancorp, Inc. Common Stock (Commerce common stock)

The merger will be treated for United States federal income tax purposes as a taxable sale by a U.S. holder of Commerce common stock of the shares of Commerce common stock that such holder surrenders in the merger.

The material United States federal income tax consequences of the merger are as follows:

  • A U.S. holder will recognize gain or loss equal to the difference between:

    (1) the sum of the cash consideration (including any cash received in lieu of fractional TD common shares) andthe fair market value of the TD common shares received in the merger*, and

    (2) such holder’s adjusted tax basis in the shares of Commerce common stock surrendered in the merger for TD common shares and cash**;

  • A U.S. holder’s aggregate tax basis in the TD common shares that such holder receives in the merger will equal the fair market value of such common shares at the time of the merger*; and

  • A U.S. holder’s holding period for the TD common shares that such holder receives in the merger should generally begin on the day after the completion of the merger. The merger was completed on March 31, 2008.

    * See “TD Common Shares Fair Market Value and TD Common Shares Aggregate Tax Basis” below for additional information.
    ** Upon completion of the merger on March 31, 2008, each holder of Commerce common stock became entitled to receive, in exchange for each share of Commerce common stock such holder owned immediately prior to the merger, 0.4142 TD common shares and US$10.50, with any fractional TD common shares paid in cash instead of shares.

Because the merger consideration consists of TD common shares in addition to cash, U.S. holders of Commerce common stock may need to sell TD common shares received in the merger, or raise cash from other sources, to pay any tax obligations resulting from the merger.

If a U.S. holder acquired different blocks of Commerce common stock at different times and at different prices, any gain or loss will be determined separately with respect to each such block of Commerce common stock surrendered, and the cash and TD common shares that such holder receives will be allocated pro rata to each such block of Commerce common stock.

Any gain or loss that a U.S. holder recognizes in connection with the merger will generally be capital gain or loss and will be long-term capital gain or loss if, as of the date of the merger, such holder’s holding period in its Commerce common stock is greater than one year as of the date of the merger. For non-corporate shareholders, long-term capital gain generally is subject to tax at preferential rates. There are limitations on the deductibility of capital losses.

TD Common Shares Fair Market Value and TD Common Shares Aggregate Tax Basis

U.S. federal tax law does not specifically identify how you should determine the fair market value of a share of stock received pursuant to a merger. There are several potential methods of measuring the fair market value.

On or before January 31, 2009, the exchange agent Mellon Investor Services LLC will prepare and mail to each former Commerce Bancorp, Inc. stockholder who received the merger consideration, other than certain exempt recipients, Form 1099-Bs reporting the cash consideration, the amount of cash in lieu of fractional TD common shares, and the value of the TD common shares received in the merger.

For such purposes, the exchange agent will value each TD common share received at approximately US$62.12 (exactly: US$62.123058), determined based on the average of the daily volume weighted average prices of TD common shares based on information reported by the Toronto Stock Exchange in The Toronto Stock Exchange Daily Record (with each such trading day’s applicable price converted into United States dollars using the spot exchange rate reported with respect to such day by The Wall Street Journal), for the five trading days immediately preceding the effective time of the merger on March 31, 2008.

Please be advised that the common shares of The Toronto-Dominion Bank are listed on the Toronto Stock Exchange and the New York Stock Exchange under symbol “TD”, as well as on the Tokyo Stock Exchange.

For Additional Information

TD Shareholder Relations: 1-866-756-8936 or tdshinfo@td.com
BNY Mellon Shareowner Services: 1-866-233-4836

Disclaimer: We cannot give tax advice. Everyone’s tax situation is different. You should consult your own independent tax advisor for specific tax advice based on your particular circumstances. These materials were not intended or written to be used, and cannot be used, for the purposes of avoiding tax-related penalties under federal, state or local tax law.

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