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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
E*TRADE GROUP, INC.
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(Name of Registrant as Specified In Its Charter)
E*TRADE GROUP, INC.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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PRELIMINARY COPIES
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E*TRADE GROUP, INC.
Four Embarcadero Place, 2400 Geng Road
Palo Alto, California 94303
(650) 842-2500
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
December __, 1997
TO OUR STOCKHOLDERS:
A Special Meeting of the Stockholders (the "Meeting") of E*TRADE Group,
Inc. (the "Company") will be held on __________, December __, 1997 at 11:00 a.m.
local time, at the offices E*TRADE Group, Inc., Four Embarcadero Place, 2400
Geng Road, Palo Alto, California. The purpose of the Meeting is to consider and
take action upon a proposal recommended by the Board of Directors to amend the
Company's Certificate of Incorporation to increase the Company's authorized
common stock, from 50 million shares to 150 million shares.
The transfer books of the Company will not be closed prior to the Meeting
but, pursuant to appropriate action by the Board of Directors, the record date
for determination of the Stockholders entitled to notice of and vote at the
Meeting is November __, 1997.
This Notice, the Proxy and Proxy Statement enclosed herewith are sent to
you by order of the Board of Directors.
CHRISTOS M. COTSAKOS
President and Chief Executive Officer
Palo Alto, California
November __, 1997
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
HOWEVER, TO ENSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE URGED TO VOTE,
SIGN, AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE POSTAGE-
PREPAID ENVELOPE ENCLOSED FOR THAT PURPOSE.
<PAGE>
PRELIMINARY COPIES
E*TRADE GROUP, INC.
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of E*Trade Group,
Inc. (the "Company") for use at the Special Meeting of the Stockholders (the
"Meeting") to be held on __________, December __, 1997 at 11:00 a.m. local
time, at the offices of E*TRADE Group, Inc., Four Embarcadero Place, 2400 Geng
Road, Palo Alto, California, and any adjournment thereof. The mailing address
of the executive office of the Company is Four Embarcadero Place, 2400 Geng
Road, Palo Alto, California 94303. This Proxy Statement and the enclosed proxy
were first furnished to Stockholders of the Company on or about November __,
1997.
VOTING PROCEDURES
The representation in person or by proxy of a majority of the outstanding
shares entitled to vote at the Meeting is necessary to provide a quorum for the
transaction of business at the Meeting. Shares can only be voted if the
Stockholder is present in person or is represented by returning a properly
signed proxy. Each Stockholder's vote is very important. Whether or not you
plan to attend the Meeting in person, please sign and promptly return the
enclosed proxy card, which requires no postage if mailed in the United States.
All signed and returned proxies will be counted towards establishing a quorum
for the Meeting, regardless of how the shares are voted.
Shares represented by proxy will be voted in accordance with your
instructions. You may specify your choices by marking the appropriate box on
the proxy card. You may vote (i) "FOR" the proposal to amend the Company's
Certificate of Incorporation, (ii) "AGAINST" the proposal or (iii) "ABSTAIN"
from voting on the proposal. An abstention or withholding authority to vote
will be counted as present for determining whether the quorum requirement is
satisfied. With respect to the required vote on the proposal, abstentions will
be treated as shares present and entitled to vote, and for purposes of
determining the outcome of the vote on the proposal, have the same effect as a
vote against the proposal. A broker "non-vote" occurs when a nominee holding
shares for a beneficial holder does not have discretionary voting power and does
not receive voting instructions from the beneficial owner. Broker "non-votes"
on a particular proposal will not be treated as shares present and entitled to
vote on the proposal.
The proposal to amend the Company's Certificate of Incorporation to
increase the authorized Common Stock of the Company requires for approval the
affirmative vote of a majority of the Company's outstanding Common Stock
entitled to vote at the Meeting. Broker "non-votes" on the proposal to
increase the authorized Common Stock will have the effect of a vote against the
proposal.
A Stockholder who returns a proxy may revoke it at any time before the
Stockholder's shares are voted at the Meeting by written notice to the Secretary
of the Company received prior to the Meeting, by executing and returning a
later-dated proxy or by voting by ballot at the Meeting.
The outstanding stock of the Company entitled to vote as of November __,
1997, consisted of __________ shares of Common Stock. Only Stockholders of
record at the close of business on November __, 1997, are entitled to vote at
the Meeting. Each share is entitled to one vote.
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PROPOSAL TO INCREASE AUTHORIZED COMMON STOCK
The Board of Directors of the Company has approved and recommends that the
stockholders approve an amendment to the Company's Certificate of Incorporation
to increase the authorized shares of the Company's common stock (the "Common
Stock") from 50,000,000 shares to 150,000,000 shares. The Board of Directors
of the Company believes the increase in the authorized shares is necessary to
provide the Company with the flexibility to act in the future with respect to
financing programs, acquisitions and other corporate purposes without the delay
and expense incidental to obtaining stockholder approval each time an
opportunity requiring the issuance of shares may arise.
On November __, 1997, the Company had _______________ shares of Common
Stock issued and outstanding. Also on that date, the Company had reserved
shares of Common Stock for issuance as follows: (i) 4,000,000 shares for
issuance under the Company's 1996 Stock Incentive Plan, (ii) 3,547,420 shares
for issuance under the Company's 1993 Stock Option Plan and 1983 Employee
Incentive Stock Option Plan, and (iii) 615,380 shares for issuance under the
Company's 1996 Stock Purchase Plan. Because substantially all of the Company's
50,000,000 authorized shares have been issued or reserved for issuance, few
shares would be available to the Company for use in connection with its future
financing and other corporate needs.
The lack of authorized Common Stock available for issuance would
unnecessarily limit the Company's ability to pursue opportunities for future
financings, acquisitions, mergers and other transactions. The Company would
also be limited in its ability to effectuate future stock splits or stock
dividends. The Company has considered plans to issue additional shares of
Common Stock in possible future financings. The Board of Directors believes
that the increases in the authorized shares of Common Stock is necessary to
provide the Company with the flexibility to pursue the types of opportunities
described above without added delay and expense.
The availability of authorized but unissued shares of Common Stock might be
deemed to have the effect of preventing or discouraging an attempt by another
person to obtain control of the Company, because the additional shares could be
issued by the Board of Directors, which could dilute the stock ownership of such
person. The Company has no plans for such issuances and this proposal is not
being proposed in response to a known effort to acquire control of the Company.
The additional shares of Common Stock to be authorized by adoption of the
amendment to the Certificate of Incorporation would have rights identical to the
currently outstanding shares of Common Stock of the Company. Adoption of the
proposed amendment to the Certificate of Incorporation would not affect the
rights of the holders of currently outstanding shares of Common Stock.
Adoption of the amendment to the Certificate of Incorporation to increase
the Company's authorized Common Stock requires the vote of a majority of the
outstanding shares of the Company's Common Stock. Votes, abstentions and broker
non-votes will be counted as set forth above in "VOTING PROCEDURES." If the
proposal is approved, the Company intends to file an amendment to the
Certificate of Incorporation shortly after the Meeting. The amendment to the
Certificate of Incorporation will be effective immediately upon acceptance of
filing by the Secretary of the State of Delaware. The Board of Directors would
be free to issue Common Stock without further action on the part of the
stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
OTHER ACTION
Management is not aware at this time of any other matters that will be
presented for action at the Meeting. Should any such matters be presented, the
proxies grant power to the proxy holders to vote shares represented by the
proxies in the discretion of such proxy holders.
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STOCKHOLDER PROPOSALS
Proposals of Stockholders intended to be presented at the 1998 Annual
Meeting of Stockholders of the Corporation must be received by the Corporation
for inclusion in the Proxy Statement and form of proxy relating to that meeting
no later than , 1998.
SOLICITATION STATEMENT
The cost of this solicitation of proxies will be borne by the Corporation.
Solicitation will be made primarily by mail, but regular employees of the
Corporation may solicit proxies personally, by telephone or telegram. Brokers,
nominees, custodians, and fiduciaries are requested to forward solicitation
materials to obtain voting instructions from beneficial owners of stock
registered in their names, and the Corporation will reimburse such parties for
their reasonable charges and expenses in connection therewith.
By order of the Board of Directors
CHRISTOS M. COTSAKOS
President and Chief Executive officer
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Palo Alto, California
November __, 1997
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SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
E*TRADE GROUP, INC.
FIRST. The name of the corporation is E*TRADE Group, Inc. (the
"Corporation").
SECOND. The address of its registered office in the State of Delaware is
1013 Centre Road, in the City of Wilmington, County of New Castle. The name of
its registered agent at such address is The Prentice-Hall Corporation System,
Inc.
THIRD. The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.
FOURTH. (a) The Corporation is authorized to issue two classes of stock
to be designated, respectively, "Common Stock" and "Preferred Stock." The
total number of shares that the corporation is authorized to issue is One
Hundred Fifty-One Million (151,000,000) shares. One Hundred Fifty Million
(150,000,000) shares shall be Common Stock, $0.01 par value per share. One
Million (1,000,000) shares shall be Preferred Stock, $0.01 par value.
(b) The Preferred Stock may be issued from time to time in one or
more series. The Board of Directors is expressly authorized, in the resolution
or resolutions providing for the issuance of any wholly unissued series of
Preferred Stock, to fix, state and express the powers, rights, designations,
preferences, qualifications, limitations and restrictions thereof, including
without limitation: the rate of dividends upon which and the times at which
dividends on shares of such series shall be payable and the preference, if any,
which such dividends shall have relative to dividends on shares of any other
class or classes or any other series of stock of the Corporation; whether such
dividends shall be cumulative or noncumulative, and if cumulative, the date or
dates from which dividends on shares of such series shall be cumulative; the
voting rights, if any, to be provided for shares of such series; the rights, if
any, which the holders of shares of such series shall have in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Corporation; the rights, if any, which the holders of shares of such
series shall have to convert such shares into or exchange such shares for shares
of stock of the Corporation, and the terms and conditions, including price and
rate of exchange of such conversion or exchange; and the redemption rights
(including sinking fund provisions), if any, for shares of such series; and such
other powers, rights, designations, preferences, qualifications, limitations and
restrictions as the Board of Directors may desire to so fix. The Board of
Directors is also expressly authorized to fix the number of shares constituting
such series and to increase or decrease the number of shares of any series prior
to the issuance of shares of that series and to increase or decrease the number
of shares of any series subsequent to the issuance of shares of that series, but
not to decrease such number below the number of shares of such series then
outstanding. In case the number of shares of any series shall be so decreased,
the shares constituting such decrease shall resume the status which they had
prior to the adoption of the resolution originally fixing the number of shares
of such series.
FIFTH. In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is authorized to make, alter or repeal any or
all of the Bylaws of the Corporation; provided, however, that any Bylaw
amendment adopted by the Board of Directors increasing or reducing the
authorized number of Directors shall require the affirmative vote of two-thirds
of the total number of Directors which the Corporation would have if there were
no vacancies. In addition, new Bylaws may be adopted or the Bylaws may be
amended or repealed by the affirmative vote of at least 66-2/3 percent of the
combined voting power of all shares of the Corporation entitled to vote
generally in the election of directors, voting together as a single class.
<PAGE>
Notwithstanding anything contained in this Certificate of Incorporation to the
contrary, the affirmative vote of the holders of at least 66-2/3 percent of the
combined voting power of all shares of the Corporation entitled to vote
generally in the election of directors, voting together as a single class, shall
be required to alter, change, amend, repeal or adopt any provision inconsistent
with, this Article FIFTH.
SIXTH. (a) Any action required or permitted to be taken by the
stockholders of the Corporation must be effected at an annual or special meeting
of stockholders of the Corporation and may not be effected by any consent in
writing of such stockholders.
(b) Special meetings of stockholders of the Corporation may be
called only by the (i) Chairman of the Board of Directors, (ii) President, (iii)
Chairman or the Secretary at the written request of a majority of the total
number of Directors which the Corporation would have if there were no vacancies
upon not fewer than 10 or more than 60 days' written notice, or (iv) holders of
shares entitled to cast not less than 10 percent of the votes at such special
meeting upon not fewer than 10 nor more than 60 days' written notice. Any
request for a special meeting of stockholders shall be sent to the Chairman and
the Secretary and shall state the purposes of the proposed meeting. Special
meetings of holders of the outstanding Preferred Stock may be called in the
manner and for the purposes provided in the resolutions of the Board of
Directors providing for the issue of such stock. Business transacted at special
meetings shall be confined to the purpose or purposes stated in the notice of
meeting.
(c) Notwithstanding anything contained in this Certificate of
Incorporation to the contrary, the affirmative vote of the holders of at least
66-2/3% of the combined voting power of all shares of the Corporation entitled
to vote generally in the election of directors, voting together as a single
class, shall be required to alter, change, amend, repeal or adopt any provision
inconsistent with, this Article SIXTH.
SEVENTH. (a) The number of Directors which shall constitute the whole
Board of Directors of this corporation shall be as specified in the Bylaws of
this corporation, subject to this Article SEVENTH.
(b) The Directors shall be classified with respect to the time
for which they severally hold office into three classes designated Class I,
Class II and Class III, as nearly equal in number as possible, as shall be
provided in the manner specified in the Bylaws of the Corporation. Each Director
shall serve for a term ending on the date of the third annual meeting of
stockholders following the annual meeting at which the Director was elected;
provided, however, that each initial Director in Class I shall hold office until
the annual meeting of stockholders in 1999, each initial Director in Class II
shall hold office until the annual meeting of stockholders in 1998, and each
initial Director in Class III shall hold office until the annual meeting of
stockholders in 1997. Notwithstanding the foregoing provisions of this Article
SEVENTH, each Director shall serve until his successor is duly elected and
qualified or until his death, resignation or removal.
(c) In the event of any increase or decrease in the authorized
number of Directors, (i) each Director then serving as such shall nevertheless
continue as a Director of the class of which he is a member until the expiration
of his current term, or his early resignation, removal from office or death, and
(ii) the newly created or eliminated directorship resulting from such increase
or decrease shall be apportioned by the Board of Directors among the three
classes of Directors so as to maintain such classes as nearly equally as
possible.
(d) Any Director or the entire Board of Directors may be removed
by the affirmative vote of the holders of at least 66-2/3 percent of the
combined voting power of all shares of the Corporation entitled to vote
generally in the election of directors, voting together as a single class.
(e) Notwithstanding anything contained in this Certificate of
Incorporation to the contrary, the affirmative vote of the holders of at least
66-2/3% of the combined voting power of all
<PAGE>
shares of the Corporation entitled to vote generally in the election of
directors, voting together as a single class, shall be required to alter,
change, amend, repeal or adopt any provision inconsistent with, this Article
SEVENTH.
EIGHTH. (a) 1. In addition to any affirmative vote required by law,
any Business Combination (as hereinafter defined) shall require the affirmative
vote of at least 66-2/3% of the combined voting power of all shares of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class (for purposes of this Article EIGHTH, the "Voting
Shares"). Such affirmative vote shall be required notwithstanding the fact
that no vote may be required, or that some lesser percentage may be specified by
law or in any agreement with any national securities exchange or otherwise.
2. The term "Business Combination" as used in this
Article EIGHTH shall mean any transaction which is referred to in any one or
more of the following clauses (A) through (E):
(A) any merger or consolidation of the Corporation or
any Subsidiary (as hereinafter defined) with or into (i) any Interested
Stockholder (as hereinafter defined) or (ii) any other corporation (whether or
not itself an Interested Stockholder) which is, or after such merger or
consolidation would be, an Affiliate (as hereinafter defined) or Associate (as
hereinafter defined) of an Interested Stockholder; or
(B) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a series of related
transactions) to or with, or proposed by or on behalf of, any Interested
Stockholder or any Affiliate or Associate of any Interested Stockholder, of any
assets of the Corporation or any Subsidiary constituting not less than five
percent of the total assets of the Corporation, as reported in the consolidated
balance sheet of the Corporation as of the end of the most recent quarter with
respect to which such balance sheet has been prepared; or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related transactions) of any
securities of the Corporation or any Subsidiary to, or proposed by or on behalf
of, any Interested Stockholder or any Affiliate or Associate of any Interested
Stockholder in exchange for cash, securities or other property (or a combination
thereof) constituting not less than five percent of the total assets of the
Corporation, as reported in the consolidated balance sheet of the Corporation as
of the end of the most recent quarter with respect to which such balance sheet
has been prepared; or
(D) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation, or any spin-off or split-up of
any kind of the Corporation or any Subsidiary, proposed by or on behalf of an
Interested Stockholder or any Affiliate or Associate of any Interested
Stockholder; or
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any similar
transaction (whether or not with or into or otherwise involving an Interested
Stockholder) which has the effect, directly or indirectly, of increasing the
percentage of the outstanding shares of (i) any class of equity securities of
the Corporation or any Subsidiary or (ii) any class of securities of the
Corporation or any Subsidiary convertible into equity securities of the
Corporation or any Subsidiary, represented by securities of such class which are
directly or indirectly owned by any Interested Stockholder or any Affiliate or
Associate of any Interested Stockholder.
(b) The provisions of section (a) of this Article EIGHTH shall
not be applicable to any particular Business Combination, and such Business
Combination shall require only such affirmative
<PAGE>
vote as is required by law and any other provision of this Certificate of
Incorporation, if such Business Combination has been approved by two-thirds of
the whole Board of Directors.
(c) For the purposes of this Article EIGHTH:
1. A "person" shall mean any individual, firm,
corporation or other entity.
2. "Interested Stockholder" shall mean, in respect of
any Business Combination, any person (other than the Corporation or any
Subsidiary) who or which, as of the record date for the determination of
stockholders entitled to notice of and to vote on such Business Combination, or
immediately prior to the consummation of any such transaction
(A) is or was, at any time within two years prior
thereto, the beneficial owner, directly or indirectly, of 10 percent or more of
the then outstanding Voting Shares, or
(B) is an Affiliate or Associate of the Corporation and
at any time within two years prior thereto was the beneficial owner, directly or
indirectly, of 10 percent or more of the then outstanding Voting Shares, or
(C) is an assignee of or has otherwise succeeded to any
shares of capital stock of the Corporation which were at any time within two
years prior thereto beneficially owned by any Interested Stockholder, if such
assignment or succession shall have occurred in the course of a transaction, or
series of transactions, not involving a public offering within the meaning of
the Securities Act of 1933, as amended.
3. A "person" shall be the "beneficial owner" of any
Voting Shares
(A) which such person or any of its Affiliates and
Associates (as hereinafter defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or
Associates has (i) the right to acquire (whether such right is exercisable
immediately or only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion rights, exchange
rights, warrants or options, or otherwise, or (ii) the right to vote pursuant to
any agreement, arrangement or understanding, or
(C) which are beneficially owned, directly or
indirectly, by any other person with which such first mentioned person or any of
its Affiliates or Associates has any agreement, arrangement or understanding for
the purposes of acquiring, holding, voting or disposing of any shares of capital
stock of the Corporation.
4. The outstanding Voting Shares shall include shares
deemed owned through application of paragraph 3 above but shall not include any
other Voting Shares which may be issuable pursuant to any agreement, or upon
exercise of conversion rights, warrants or options, or otherwise.
5. "Affiliate" and "Associate" shall have the
respective meanings given those terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in effect on the date
of adoption of this Certificate of Incorporation (the "Exchange Act").
6. "Subsidiary" shall mean any corporation of which a
majority of any class of equity security (as defined in Rule 3a11-1 of the
General Rules and Regulations under the Exchange Act) is owned, directly or
indirectly, by the Corporation; provided, however, that for the purposes
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<PAGE>
of the definition of Interested Stockholder set forth in paragraph 2 of this
section (c) the term "Subsidiary" shall mean only a corporation of which a
majority of each class of equity security is owned, directly or indirectly, by
the Corporation.
(d) A majority of the directors shall have the power and duty to
determine for the purposes of this Article EIGHTH on the basis of information
known to them, (1) whether a person is an Interested Stockholder, (2) the number
of Voting Shares beneficially owned by any person, (3) whether a person is an
Affiliate or Associate of another, (4) whether a person has an agreement,
arrangement or understanding with another as to the matters referred to in
paragraph 3 of section (c), or (5) whether the assets subject to any Business
Combination or the consideration received for the issuance or transfer of
securities by the Corporation or any Subsidiary constitutes not less than five
percent of the total assets of the Corporation.
(e) Nothing contained in this Article EIGHTH shall be construed
to relieve any Interested Stockholder from any fiduciary obligation imposed by
law.
(f) Notwithstanding anything contained in this Certificate of
Incorporation to the contrary, the affirmative vote of the holders of at least
66-2/3 percent of the combined voting power of all shares of the Corporation
entitled to vote generally in the election of directors, voting together as a
single class, shall be required to alter, change, amend, repeal or adopt any
provision inconsistent with, this Article EIGHTH.
NINTH. This Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred on
stockholders herein are granted subject to this reservation.
TENTH. A Director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a Director, except for liability (1) for any breach of the Director's
duty of loyalty to the Corporation or its stockholders, (2) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (3) under Section 174 of the General Corporation Law of
Delaware, or (4) for any transaction from which the Director derived any
improper personal benefit. If the General Corporation Law of Delaware is
hereafter amended to authorize, with the approval of a corporation's
stockholders, further reductions in the liability of a corporation's direc tors
for breach of fiduciary duty, then a Director of the Corporation shall not be
liable for any such breach to the fullest extent permitted by the General
Corporation Law of Delaware as so amended. Any repeal or modification of the
foregoing provisions of this Article TENTH by the stockholders of the
Corporation shall not adversely affect any right or protection of a Director of
the Corporation existing at the time of such repeal or modification.
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
E*TRADE GROUP, INC.
CHRISTOS M. COTSAKOS and STEPHEN C. RICHARDS, or either of them, are hereby
appointed as the lawful agents and proxies of the undersigned (with all powers
the undersigned would possess if per sonally present, including full power of
substitution) to represent and to vote all shares of capital stock of E*TRADE
Group, Inc. (the "Company") which the undersigned is entitled to vote at the
Company's Special Meeting of Stockholders on December , 1997, and at any
adjournments or postponements thereof as follows:
1. Proposal to amend the Company's Certificate of Incorporation to increase
the number of authorized shares of Common Stock:
FOR [_] AGAINST [_] ABSTAIN [_]
2. Transaction of any other business which may properly come before the
meeting and any adjournment or postponement thereof.
P-1
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The Board of Directors recommends a vote FOR the above proposal. THIS PROXY
WILL BE VOTED AS DIRECTED, OR, IF NO DIRECTION IS INDICATED, WILL BE VOTED FOR
THE ABOVE PROPOSAL AND, AT THE DISCRETION OF THE PERSONS NAMED AS PROXIES, UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. This proxy may be
revoked at any time before it is voted.
DATE: _______________________, 1997
___________________________________
(Signature)
___________________________________
(Signature if held jointly)
(Please sign exactly as shown on your stock
certificate and on the envelope in which
this proxy was mailed. When signing as
partner, corporate officer, attorney,
executor, administrator, trustee, guardian
or in any other representative capacity,
give full title as such and sign your own
name as well. If stock is held jointly,
each joint owner should sign.)
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY,
USING THE ENCLOSED ENVELOPE.
P-2
