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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ____)*
Wit SoundView Group, Inc.
--------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $0.01 par value
--------------------------------------------------------------------------------
(Title of Class of Securities)
455907105
--------------------------------------------------------------------------------
(CUSIP Number)
Christos M. Cotsakos
Chairman of the Board and Chief Executive Officer
E*TRADE Group, Inc.
4500 Bohannon Drive
Menlo Park, California 94025
with a copy to:
Curtis L. Mo, Esq.
Brobeck, Phleger & Harrison LLP
Two Embarcadero Place
2200 Geng Road
Palo Alto, California 94303
--------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
October 16, 2000
--------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of (S)(S)240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box [_].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See (S)240.13d-7 for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
CUSIP NO. 455907105
------------------------------------------------------------------------------
Names of Reporting Persons.
1 I.R.S. Identification Nos. of above persons (entities only)
E*TRADE Group, Inc.; FEIN 94-2844166
------------------------------------------------------------------------------
Check the Appropriate Box if a Member of a Group (See Instructions)
2 (a) [_]
(b) [_]
------------------------------------------------------------------------------
Sec Use only
3
------------------------------------------------------------------------------
Source of funds (See Instructions)
4
00
------------------------------------------------------------------------------
Check if disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
5
------------------------------------------------------------------------------
Citizenship or Place of Organization
6
Delaware
------------------------------------------------------------------------------
Sole Voting Power
7
NUMBER OF 14,006,405
SHARES -----------------------------------------------------------
Shared Voting Power
BENEFICIALLY 8
0
OWNED BY
-----------------------------------------------------------
EACH Sole Dispositive Power
9
REPORTING 14,006,405
PERSON -----------------------------------------------------------
Shared Dispositive Power
WITH 10
0
------------------------------------------------------------------------------
Aggregate Amount Beneficially Owned by Each Reporting Person
11
14,006,405
------------------------------------------------------------------------------
Check if the Aggregate Amount in Row (11) Excludes Certain Shares
12.
(See Instructions) [_]
------------------------------------------------------------------------------
Percent of Class Represented by Amount in Row (11)
13.
12.53%(1)
------------------------------------------------------------------------------
Type of Reporting Person (See Instructions)
14
CO
------------------------------------------------------------------------------
(1) Based on 112,281,378 shares of common stock of the Issuer, which represents
78,856,516 shares outstanding as reported in the Issuer's Quarterly Report
on Form 10-Q for the period ended June 30, 2000, plus 31,068,221 shares
issued in connection with the transactions related to the acquisition of
E*OFFERING Corp. by the Issuer, plus 2,356,641 shares not outstanding which
are subject to warrants held by E*TRADE.
<PAGE>
ITEM 1. SECURITY AND ISSUER.
The title of the class of equity securities of Wit SoundView Group,
Inc., a Delaware corporation (the "Issuer"), to which this Schedule
13D relates is common stock, $0.01 par value per share (the "Wit
Common Stock"). The address of the principal executive offices of the
Issuer is 826 Broadway, Seventh Floor, New York, New York 10003.
ITEM 2. IDENTITY AND BACKGROUND.
(a) - (c) and (f) This Schedule 13D is filed by E*TRADE Group, Inc., a
Delaware corporation ("E*TRADE"). E*TRADE, through its wholly-owned
subsidiaries, E*TRADE Securities, Inc., TIR (Holdings) Limited and
Telebanc Financial Corporation, is a leading provider of online
brokerage and banking services and has established a popular, branded
destination Web site for self-directed investors. The address of the
principal executive offices of E*TRADE is 4500 Bohannon Drive, Menlo
Park, California 94025.
Set forth on Schedule A to this Schedule 13D is the name of each of
the directors and executive officers of E*TRADE, their present
principal occupation or employment, including the name and address of
any corporation or other organization in which such employment is
conducted, as of the date hereof to E*TRADE's knowledge. All of the
directors and executive officers of E*TRADE named in Schedule A to the
Schedule 13D are citizens of the United States, except (i) Masayoshi
Son, who is a citizen of Japan; (ii) Brigitte VanBaelen, who is a
citizen of Belgium; (iii) George Hayter, who is a citizen of the
United Kingdom; and (iv) Leonard Purkis, who is a citizen of both the
United States and the United Kingdom.
(d) - (e) Neither E*TRADE nor, to E*TRADE's best knowledge, any person
named on Schedule A to this Schedule 13D, is required to disclose
legal proceedings pursuant to Items 2(d) or 2(e) of this Schedule 13D.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On October 10, 2000 E*TRADE purchased 300,000 shares of the Issuer in
an open market transaction. The consideration for the purchase was
$1,885,770 paid by E*TRADE from cash on hand. On October 16, 2000 the
Issuer completed the acquisition of E*OFFERING Corp. ("E*OFFERING"), a
California corporation in which E*TRADE held a minority interest. The
acquisition was effected pursuant to an Agreement and Plan of Merger
(the "Merger Agreement") by and among the Issuer, Wit SoundView
Corporation ("Merger Sub"), a wholly owned subsidiary of the Issuer
and E*OFFERING, in which E*OFFERING merged with and into Merger Sub.
The description contained in this Schedule 13D of the transactions
contemplated by the Merger Agreement is qualified in its entirety by
reference to the full text of the Merger Agreement and the Amendment
Agreement, copies of which are attached to this Schedule 13D as
Exhibits 2.1 and 2.2. As a result of the merger, 2,646,562 shares of
Wit Common Stock were issued to E*TRADE in exchange for 2,500,000
shares of E*OFFERING Series B Preferred Stock held by E*TRADE and
1,477,254 shares of Wit Common Stock were issued to E*TRADE in
exchange for 1,436,253 shares of E*OFFERING Series C Preferred Stock
held by E*TRADE. In addition, warrants held by E*TRADE to purchase
3,525,894 shares of E*OFFERING common stock were assumed by Wit
pursuant to the Merger Agreement and automatically converted into the
right to purchase 2,356,641 shares of Wit Common Stock, with the
exercise price for the warrants modified to take into account the
exchange ratio specified in the Merger Agreement. In connection with
the merger, the Issuer and E*TRADE entered into certain other
collateral arrangements, as more fully described in Item 6 below,
pursuant to which E*TRADE acquired beneficial ownership in additional
shares of Wit Common Stock as follows: 4,025,948 shares of Wit Common
Stock were issued to E*TRADE as consideration for E*TRADE entering
into a strategic alliance agreement with the Issuer, and 2,000,000
shares of Wit Common Stock were issued to E*TRADE in connection with a
stock purchase agreement between the Issuer and E*TRADE as
consideration for $20,500,000 in cash paid by E*TRADE from cash on
hand. Finally, 1,200,000 shares of Wit Common Stock were issued to
E*TRADE in connection with a share allocation and escrow participation
agreement between E*TRADE and certain major shareholders of
E*OFFERING, as consideration for E*TRADE's agreement to amend and
restate the strategic alliance agreement.
ITEM 4. PURPOSE OF THE TRANSACTION.
(a) - (b) The purpose of the acquisition of securities of the Issuer
is the consummation of the merger of E*OFFERING with and into Merger
Sub, pursuant to the Merger Agreement, and the related transactions
<PAGE>
between the parties as more fully described in Item 6 below, including
the strategic alliance between E*TRADE and the Issuer and the purchase
by E*TRADE of 2,000,000 shares of Wit Common Stock. The parties
believe that the merger will result in a combined company that will be
able to offer its investment banking services to a broader variety of
issuers and that it should be able to receive increased share
allotments in underwriter offerings in which it participates. The
purpose of the open-market purchase of the 300,000 shares was for
general investment purposes.
(c) Not applicable.
(d) Christos Cotsakos, Chairman and Chief Executive Officer of
E*TRADE will join the board of directors of the Issuer as a
consequence of the merger and the related transactions.
(e) None, other than a change in the number of outstanding shares of
Wit Common Stock as contemplated by the Merger Agreement and the
related transactions.
(f) None.
(g) Not applicable.
(h) Not applicable.
(i) E*TRADE has agreed, pursuant to a Standstill Agreement dated May
15, 2000, by and between E*TRADE and the Issuer, for a period of six
years and six months after the completion of the merger, not to (i)
acquire or beneficially own an aggregate of 19.9% or more of any class
of voting securities of the Issuer; (ii) make, or in any way
participate in, any solicitation of proxies or become a participant in
any election contest of the Issuer; or (iii) acquire, or offer to
acquire, all or a substantial portion of the assets of the Issuer.
(j) Other than as described above, E*TRADE currently has no plan or
proposal which relates to, or may result in, any of the matters listed
in Items 4(a) - (i) of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) - (b) As a result of the transactions described in Item 3, E*TRADE
currently holds beneficial ownership in an aggregate of 14,006,405
shares of Wit Common Stock, representing approximately 12.53% of the
Issuer's outstanding Common Stock. E*TRADE has sole power to vote or
direct the vote of 14,006,405 shares; shared power to vote or direct
the vote of 0 shares; sole power to dispose or direct the disposition
of 14,006,405 shares; and shared power to dispose or direct the
disposition of 0 shares.
Schedule A to this Schedule 13D sets forth the beneficial ownership
interest in securities of the Issuer held by E*TRADE's executive
officers and directors.
(c) Except as set forth herein, neither E*TRADE, nor to E*TRADE's
knowledge, any of the persons named in Schedule A to this Schedule
13D, has effected any transactions in shares of Wit Common Stock in
the past 60 days.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
On May 15, 2000, E*TRADE Group, Inc. and the Issuer, entered into a
strategic alliance agreement pursuant to which the Issuer and its
controlled affiliates have agreed to provide equity and equity
derivative securities offered to retail customers in U.S. initial
public offerings and follow-on offerings on an exclusive basis to
retail customers of E*TRADE and its broker-dealer affiliates. E*TRADE
has agreed that the Issuer will be its exclusive provider of
securities through such offerings. The exclusivity rights have a three
year term, which can be automatically extended upon the satisfaction
of certain performance standards by the Issuer. Under the strategic
alliance, E*TRADE and the Issuer have agreed to cooperate in joint
sales and marketing efforts and to share trading, customer and
research products and data. As part of the consideration for the
exclusivity rights, the Issuer has agreed to issue to E*TRADE
4,025,948 shares of common stock which are subject to a three-year
prohibition on transfer.
<PAGE>
On September 26, 2000, the strategic alliance agreement was amended
and restated to provide that the exclusivity provisions under the
agreement will last for five years and will not be subject to the
satisfaction of any performance standards by the Issuer. The amended
and restated strategic alliance agreement also broadens the scope of
market making activities, sales and marketing activities, the
international alliance provisions and the change of control provisions
covered by the agreement.
In connection with the strategic alliance and pursuant to a stock
purchase agreement dated May 15, 2000, E*TRADE and certain entities
affiliated with General Atlantic Partners, LLC also agreed to each
purchase 2,000,000 shares of Wit Common Stock for $10.25 per share
and received a warrant to purchase up to 2,000,000 shares of Wit
Common Stock for $10.25 per share. The warrant is not exercisable
until July 2003, subject to certain limited early vesting provisions.
The Issuer granted to E*TRADE piggyback and demand registration rights
with respect to the shares of Wit Common Stock to be issued to
E*TRADE.
Pursuant to a standstill agreement dated May 15, 2000, by and between
E*TRADE and the Issuer, E*TRADE has agreed for a period of six years
and six months after the completion of the merger, not to (i) acquire
or beneficially own an aggregate of 19.9% or more of any class of
voting securities of the Issuer; (ii) make, or in any way participate
in, any solicitation of proxies or become a participant in any
election contest of the Issuer; or (iii) acquire, or offer to acquire,
all or a substantial portion of the assets of the Issuer.
On September, 26, 2000 E*TRADE entered into a share reallocation and
escrow participation agreement with certain major shareholders of
E*OFFERING in which such shareholders agreed to reallocate to E*TRADE
1,200,000 shares of Wit Common Stock they were to receive in the
merger and to replace shares of Wit Common Stock that would otherwise
have been placed into the escrow fund pursuant to the Merger Agreement
on behalf of E*TRADE, with shares of common stock beneficially owned
by them. The description contained in this Item 6 of the transactions
contemplated by the share reallocation and escrow participation
agreement is qualified in its entirety by reference to the full text
of the share reallocation and escrow participation Agreement, a copy
of which is attached to this Schedule 13D as Exhibit 10.4.
<PAGE>
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
The following documents are to be filed as exhibits to this
Schedule 13D:
Exhibit No. Description
----------- -----------
2.1 Agreement and Plan of Merger by and among Wit
SoundView Group, Inc., Wit SoundView Corporation and
E*OFFERING Corp., dated as of May 15, 2000
2.2 Amendment Agreement by and among Wit SoundView
Group, Inc., Wit SoundView Corporation and
E*OFFERING Corp., dated as of September 26, 2000
10.1(a)+ Strategic Alliance Agreement, dated as of May 15,
+++ 2000, by and between E*TRADE Group, Inc. and Wit
SoundView Group, Inc.
10.1(b)+ Amended and Restated Strategic Alliance Agreement,
++ dated as of September 26, 2000, by and between
E*TRADE Group, Inc. and Wit SoundView Group, Inc.
10.2+++ Standstill Agreement, dated as of May 15, 2000, by
and between E*TRADE Group, Inc. and Wit SoundView
Group, Inc.
10.3+++ Stock Purchase Agreement, dated as of May 15, 2000,
by and among E*TRADE Group, Inc., Wit SoundView
Group, Inc. and certain entities affiliated with
General Atlantic Partners, LLC.
10.4 Share Reallocation and Escrow Participation
Agreement dated as of September 30, 2000, by and
among E*TRADE Group, Inc. and certain major
shareholders of E*OFFERING Corp.
+ Confidential treatment has been requested for certain portions of this
document.
++ Incorporated by reference to the post effective amendment to the
registration statement on Form S-4 filed by Wit SoundView Group, Inc. on October
6, 2000.
+++ Incorporated by reference to the registration statement on Form S-4 filed by
Wit SoundView Group, Inc. on July 24, 2000.
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that that information set forth in this statement is true, complete and
correct.
October 26, 2000
--------------------------------------------------------------------------------
Date
/s/ Christos M. Cotsakos
--------------------------------------------------------------------------------
Signature
Christos M. Cotsakos, Chairman of the Board and Chief Executive Officer
--------------------------------------------------------------------------------
Name/Title
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is signed
on behalf of a person by his authorized representative other than an executive
officer or general partner of the filing person, evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statement, provided, however, that a power or attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name and any title of each person who signs the statement shall be typed or
printed beneath his signature.
Attention: Intentional misstatements or omissions of fact constitute Federal
criminal violations (See 18 U.S.C. 1001)
<PAGE>
SCHEDULE A
Executive Officers and Directors of E*TRADE Group, Inc.
-------------------------------------------------------
<TABLE>
<CAPTION>
Name and Title Present Wit Common Percentage of
Principal Stock Issuers'
Occupation Beneficially Outstanding
Including Name Owned Common Stock/1/
of Employer
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Christos M. Cotsakos E*TRADE Group, 1,926,769/2/ 1.75%
Chairman of the Board and Group, Inc.
Chief Executive Officer 4500 Bohannon
Drive
Menlo Park,
California
94025
Jerry Gramaglia E*TRADE 6,127/3/ *
President and Chief Operating Group, Inc.
Officer 4500 Bohannon
California
94025
Judy Balint E*TRADE 6,127/4/ *
Chief International Officer Group, Inc.
4500 Bohannon
Drive
Menlo Park,
California
94025
Leonard Purkis E*TRADE 6,127/5/ *
Chief Financial Officer Group, Inc.
4500 Bohannon
Drive
Menlo Park,
California
94025
</TABLE>
______________________
* Represents less than one percent beneficial interest.
/1/ Based on 109,924,737 shares of common stock of the Issuer, which represents
78,856,516 shares outstanding as reported in the Issuer's Quarterly Report
on Form 10-Q for the period ended June 30, 2000, plus 31,068,221 shares
issued in connection with the transactions related to the acquisition of
E*OFFERING Corp. by the Issuer.
/2/ Includes 8,042 shares beneficially owned by Mr. Cotsakos' daughter. Mr.
Cotsakos disclaims any beneficial ownership of his daughter's shares. To
E*TRADE's knowledge, Mr. Cotsakos has sole power to vote or direct the vote
or to dispose or direct the disposition for these shares (except for his
daughter's shares, for which he has no such power). Also includes 1,477,254
shares beneficially owned by E*TRADE eCommerce Fund L.P. (the "Fund"). Mr.
Cotsakos is a managing member of E*TRADE Ventures I, LLC ("E*TRADE
Ventures"), the general partner of the Fund. Mr. Cotsakos disclaims any
beneficial ownership of the shares owned by the Fund, except to the extent
of his pecuniary interest. Voting and dispositive power with respect to the
shares owned by the Fund is shared with Tom Bevilacqua, the other managing
member of E*TRADE Ventures.
/3/ To E*TRADE's best knowledge, Mr. Gramaglia has sole power to vote or
direct the vote or to dispose or direct the disposition for these shares.
/4/ To E*TRADE's best knowledge, Ms. Balint has sole power to vote or direct
the vote or to dispose or direct the disposition for these shares.
/5/ Beneficially owned by a revocable trust under which Mr. Purkis is a
trustee. To E*TRADE's knowledge, Mr. Purkis has sole power to vote or
direct the vote or to dispose or direct the disposition for these shares.
<PAGE>
<TABLE>
<CAPTION>
Name and Title Present Wit Common Percentage of
Principal Stock Issuers'
Occupation Beneficially Outstanding
Including Name Owned Common Stock/1/
of Employer
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Michael Sievert E*TRADE Group, 0
Chief Sales and Marketing Inc.
Officer 4500 Bohannon
Drive
Menlo Park,
California
94025
Pamela Kramer E*TRADE Group, 0
Chief Content Officer Inc.
4500 Bohannon
Drive
Menlo Park,
California
94025
Tom Bevilacqua E*TRADE Group, 1,614,760/6/ 1.47%
Chief Corporate Development and Inc.
Strategic Investment Officer 4500 Bohannon
Drive
Menlo Park,
California
94025
Theodore J. Theophilos E*TRADE Group, 0
Chief Legal Affairs Officer Inc.
4500 Bohannon
Drive
Menlo Park,
California
94025
Joshua Levine E*TRADE Group, 0
Chief Information Officer Inc.
4500 Bohannon
Drive
Menlo Park,
California
94025
R. Jarrett Lilien E*TRADE Group, 0
Chief Brokerage Officer Inc.
4500 Bohannon
Drive
Menlo Park,
California
94025
</TABLE>
____________________________
* Represents less than one present beneficial interest.
/6/ Includes 1,477,254 shares owned by E*TRADE eCommerce Fund L.P. (the
"Fund"). Mr. Bevilacqua is a managing member of E*TRADE Ventures I, LLC
("E*TRADE Ventures"), the general partner of the Fund. Mr. Bevilacqua
disclaims any beneficial ownership of the shares held by the Fund, except
to the extent of his pecuniary interest. Voting and dispositive power with
respect to those shares is shared with Christos Cotsakos, the other
managing member of E*TRADE Ventures. To E*TRADE's best knowledge, Mr.
Bevilacqua has sole power to vote or direct the vote or to dispose or
direct the disposition for the remaining shares.
<PAGE>
<TABLE>
<CAPTION>
Name and Title Present Wit Common Percentage of
Principal Stock Issuers'
Occupation Beneficially Outstanding
Including Name Owned Common Stock/1/
of Employer
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Mitch Caplan E*TRADE Group, 0
Chief Banking Officer Inc.
4500 Bohannon
Drive
Menlo Park,
California
94025
Connie Dotson E*TRADE Group, 6,127/7/ *
Chief Service Quality Officer Inc.
4500 Bohannon
Drive
Menlo Park,
California
94025
Dennis Lundien E*TRADE Group, 3,830/8/ *
Chief Internal Audit and Privacy Inc.
Officer 4500 Bohannon
Drive
Menlo Park,
California
94025
Chuck Thomson E*TRADE Group, 0
Chief People Officer Inc.
4500 Bohannon
Drive
Menlo Park,
California
94025
Brigitte VanBaelen E*TRADE Group, 1,532/9/ *
Chief Community Development Officer Inc.
4500 Bohannon
Drive
Menlo Park,
California
94025
Lewis E. Randall Private 0
Director Investor
</TABLE>
_________________
/7/ Beneficially owned by a family trust under which Ms. Dotson is a trustee.
To E*TRADE's knowledge, Ms. Dotson has sole power to vote or direct the
vote or to dispose or direct the disposition for these shares.
/8/ To E*TRADE's best knowledge, Mr. Lundien has sole power to vote or
direct the vote or dispose or direct the disposition for these shares.
/9/ To E*TRADE's best knowledge, Ms. VanBaelen has sole power to vote or
direct the vote or to dispose or direct the disposition for these shares.
<PAGE>
<TABLE>
<CAPTION>
Name and Title Present Wit Common Percentage of
Principal Stock Issuers'
Occupation Beneficially Outstanding
Including Name Owned Common Stock/1/
of Employer
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Lester C. Thurow* Professor of 0
Director Management and
Economics
Massachusetts
Institute of
Technology
77
Massachusetts
Avenue
Cambridge,
Massachusetts
02139-4307
Peter Chernin President and 0
Director Chief Operating
Officer
Fox
Entertainment
Group, Inc.
1211 Avenue of
the Americas
New York, New
York 10036
William A. Porter Chairman 22,978/10/ *
Director Emeritus
E*TRADE Group,
Inc.
4500 Bohannon
Drive
Menlo Park,
California
94025
Masayoshi Son President and 2,287,517/11/ 2.08%
Director Chief Executive
Officer
SOFTBANK Corp.
24-1
Nihonbashi-Hakozakicho,
Chuo-Ku
Tokyo, Japan
103-8501
</TABLE>
_________________
*Represents less than one percent beneficial interest.
/10/ Beneficially owned by a revocable trust under which Mr. Porter is a
trustee. To E*TRADE's knowledge, Mr. Porter has sole power to vote or
direct the vote or to dispose or direct the disposition for these
shares.
/11/ Represents shares held by Softbank Technology Ventures V LP, Softbank
Technology Ventures Advisors Fund V LP and Softbank Technology
Entrepreneurs V LP. Mr. Son is the beneficial owner of approximately 38%
of the outstanding stock of SOFTBANK Corporation, which is a member of
the general partner of Softbank Technology Ventures V LP, Softbank
Technology Ventures Advisors Fund V LP and Softbank Technology
Entrepreneurs V LP, and accordingly Mr. Son may be deemed to be a
beneficial owner of shares held by them.
<PAGE>
<TABLE>
<CAPTION>
Name and Title Present Wit Common Percentage of
Principal Stock Issuers'
Occupation Beneficially Outstanding
Including Name Owned Common Stock/1/
of Employer
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
William E. Ford Managing Member 8,964,186/12/ 8.15%
Director General
Atlantic
Partners, LLC
3 Pickwick Plaza
Greenwich,
Connecticut
06830
David Hayden Chairman and 0
Director Founder
Critical Path
320 First Street
San Francisco,
California 94105
George Hayter Partner 0
Director George Hayter
Associates
</TABLE>
_________________________
/12/ Represents shares beneficially owned by GAP Coinvestment Partners II,
L.P., a Delaware limited partnership ("GAPCO II") and General Atlantic
Partners 61, L.P., a Delaware limited partnership ("GAP 61"). 6,964,186
shares of Common Stock were acquired pursuant to the acquisition of
E*OFFERING Corp. by the Issuer and 2,000,000 shares of Common Stock were
acquired pursuant to a stock purchase on October 24, 2000. The general
partner of GAP 61 is General Atlantic Partners, LLC, a Delaware limited
liability company ("GAP LLC"). The 11 managing members of GAP LLC are
also the 11 general partners of GAPCO II. Mr. Ford is a managing member
of GAP LLC and a general partner of GAPCO II. GAP 61, GAPCO II and GAP
LLC are a "group" under Rule 13d-5 of the Securities Exchange Act of
1934, as amended. Voting and dispositive power over these shares is
shared among the managing members of GAP LLC and the general partners of
GAPCO II. The other ten managing members of GAP LLC and general partners
of GAPCO II are Steven A. Denning, David C. Hodgson, William O. Grabe,
Clifton S. Robbins, Peter L. Bloom, Franchon M. Smithson, Rene M. Kern,
Mark F. Dzialga, John Wong and Matthew Nimetz. None of these individuals
hold any shares in their individual capacity. Mr. Ford and these other
individuals disclaim any beneficial ownership of these shares, except to
the extent of their pecuniary interest.
