Ed Clark has agreed to stay on as president and CEO of Toronto-Dominion Bank until 2013, the bank said Friday.

Clark, who took the helm of the major bank in 2000 after the merger of TD Bank and Canada Trust, has also agreed to a pension freeze and waived his right to severance pay.

His contract had been scheduled to expire in October 2010.

“Ed’s leadership continues to be a valuable asset for our shareholders, so we are exceptionally pleased he has agreed to extend the terms of his employment with TD,” said board chairman John Thompson said in a release.

Clark’s pension will be frozen in October 2010 and instead of receiving pension payments set out in his original contract he will get option grants of $4.7 million — in effect, tying his pension compensation to the performance of the bank’s shares.

Clark has also agreed to waive severance rights that could have seen him get as much as $10.1 million. The bank will also be able to claw back any future equity grants in the case of fraudulent misrepresentation of financial results.

TD said it took the measures to “align Mr. Clark’s interests with those of shareholders,” including a requirement that he hold an equity stake equal to ten times his base salary for at least two full years after retirement.

IE