<PAGE>
Prospectus Filed Pursuant to Rule 424(b)(3)
Registration Number 333-85203
12,166,008 Shares
WIT CAPITAL GROUP, INC.
Common Stock
------------------
We are an Internet investment banking and brokerage firm. This
prospectus relates to the resale of our common stock by our officers and
directors and others who may be in a control relationship with us and by certain
of our employees. The common stock which may be sold has previously been
acquired, or will be acquired, by these individuals under written compensation
contracts or upon exercise of options granted to them under our Stock Incentive
Plan. The Stock Incentive Plan amended and restated the Stock Option and
Restricted Stock Purchase Plan, effective March 1, 1999.
We will not receive any of the proceeds from these sales. We will pay
all expenses in connection with this offering, other than commissions and
discounts of underwriters, dealers or agents.
Our common stock is quoted on the Nasdaq National Market (Symbol:
WITC). On November 29, 1999, the closing price of the common stock was $19.69
per share.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this supplemented prospectus is December 1, 1999
<PAGE>
We have not, nor has any individual named in this prospectus,
authorized any person to give any information or to make any representation
other than those contained in, or incorporated by reference into, this
prospectus. This prospectus does not constitute an offer to sell or solicitation
of an offer to buy.
We have filed a registration statement on Form S-8 in respect of the
common stock offered by this prospectus with the Securities and Exchange
Commission under the Securities Act. This prospectus does not contain all of the
information contained in the registration statement. You should read this entire
prospectus carefully as well as the registration statement for additional
information.
WHERE YOU CAN FIND MORE INFORMATION
We must file annual, quarterly and special reports, proxy statements
and other information with the SEC. You may read and copy any documents we file
at the SEC's public reference rooms in Washington, D.C., New York, N.Y. and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
from the SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" information into this
prospectus, which means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is considered to be part of this prospectus.
Information in this prospectus may update documents previously filed with the
SEC, and later information that we file with the SEC will automatically update
this prospectus. We incorporate by reference the documents listed below and any
future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 prior to the termination of the offering:
o Our quarterly report on Form 10-Q for the period ended
September 30, 1999 filed with the SEC on November 15, 1999;
o Our current report on Form 8-K dated November 4, 1999 filed
with the SEC on November 4, 1999;
o Our quarterly report on Form 10-Q for the period ended June
30, 1999 filed with the SEC on August 13, 1999;
o Our Registration Statement on Form S-1 (Registration No.
333-74619) filed with the SEC on March 18, 1999 and Amendments
Nos. 1 through 3 thereto, in which the terms of the common
stock are described;
o Our prospectus contained in the Registration Statement on Form
S-1 (Registration No. 333-74619), filed pursuant to Rule
424(b) under the Securities Act on June 4, 1999, for the
offering of 7,600,000 shares of common stock; and
o Our Form 8-A filed with the SEC on June 1, 1999, including any
amendments or reports filed for the purpose of updating the
description of our common stock that is incorporated by
reference therein.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Wit Capital Group, Inc.
826 Broadway, Sixth Floor
New York, New York 10003
Attention: Secretary
212-253-4400
-----------------
Information on our website is not part of this supplemented prospectus.
2
<PAGE>
OUR BUSINESS
We are an Internet investment banking and brokerage firm that uses
electronic mail and the Web to offer and sell shares in public offerings to
individuals. We also produce and electronically disseminate investment research
to individual investors. We also advise corporate clients in connection with
significant transactions like mergers and acquisitions and assist them with the
development of Internet strategies and businesses and in raising funds from
private sources. Our investment banking activities focus on companies that
principally use the Internet to conduct their businesses and, more generally, on
issuers seeking to market their stock offerings to online individual investors.
Beginning recently, we are focusing as well on other rapidly growing sectors of
the economy that are related to or dependent on Internet technology.
We also provide online brokerage services. In addition, we manage a
proprietary private equity fund and intend to create and manage additional
private equity funds primarily for high net worth individuals. Under our
management, these funds will make private investments in companies in the
Internet sector and other industries.
In October 1999 we entered into an agreement to acquire SoundView
Technology Group, Inc., a private investment banking firm focused exclusively
on the technology sector, for approximately $320 million in cash and stock.
We expect to complete the transaction during the first quarter of 2000.
PROCEEDS
We will not receive any of the proceeds from the sale of the shares of
our common stock by the individuals named herein.
3
<PAGE>
SELLING STOCKHOLDERS
The following table identifies our executive officers and directors as
well as certain of our current and former employees, any of whom may use this
prospectus to sell our common stock. The shares listed below or held by these
current or former employees will not be transferable until December 7, 1999. We
do not know whether the individuals listed below will sell any or all of their
shares covered by this prospectus. Assuming all such shares are sold by them,
none of the individuals would own one percent (1%) or more of our common stock.
<TABLE>
<CAPTION>
AS OF NOVEMBER 22, 1999 AS OF DECEMBER 31, 1999
--------------------------------------------------- -----------------------
NUMBER OF SHARES NUMBER OF SHARES
NUMBER OF COVERED BY THIS COVERED BY THIS
SHARES OWNED(1) PROSPECTUS PROSPECTUS(5)
--------------- ---------------- ----------------
<S> <C> <C> <C>
Jonathan Cohen
Director of research
(since 1999) 700,000 131,250 175,000
Daniel I. DeWolf
Senior vice president
(since 1999) 100,000 0 0
Ronald O. Drake
Director of private equity
(since 1999) 120,000 11,666 11,666
Paul Ezekiel
Managing director - investment
banking
(since 1999) 392,000 17,890 (A) 26,835
William C. Feeley
Director of capital markets
(since 1997) 350,000 169,166 (B) 180,832
Lloyd H. Feller
Senior vice president and
co-general counsel
(since 1999) 595,000 74,375 (C) 111,564
Joseph H. Flom
Special advisory board member
(since 1998) 151,666 53,229(D) 55,416
Charles Hall
Managing director - investment
banking
(since 1999) 525,000 34,515(E) 51,772
Everett F. Lang
President - digital trading facility
(since 1999)
367,500 45,937(F) 68,905
4
<PAGE>
<CAPTION>
AS OF NOVEMBER 22, 1999 AS OF DECEMBER 31, 1999
--------------------------------------------------- -----------------------
NUMBER OF SHARES NUMBER OF SHARES
NUMBER OF COVERED BY THIS COVERED BY THIS
SHARES OWNED(1) PROSPECTUS PROSPECTUS(5)
--------------- ---------------- ----------------
<S> <C> <C> <C>
Robert H. Lessin
Co-chief executive officer,
chairman and Director
(since 1998) 4,641,000 2,683,335(2)(G) 2,906,950
George M. Lieberman
Senior vice president and
chief information officer
(since 1999) 280,000 52,501(H) 70,001
Mark Loehr
Director of investment banking
(since 1999) 875,000 109,375(I) 164,063
Robert C. Mendelson
Senior vice president and
co-general counsel
(since 1999) 595,000 74,375(J) 111,564
Christopher Mulligan
Managing director - investment
banking
(since 1999) 525,000 34,515(K) 51,772
Elliot S. Prince
Managing director - research
(since 1999) 420,000 21,390(L) 32,084
Ronald Readmond
Co-chief executive officer,
vice chairman, president
and Director
(since 1998) 1,932,000 849,334(3)(M) 995,166
Elizabeth Schimel
Head of business development
(since 1999) 80,000 5,000(N) 10,000
M. Bernard Siegel
Chief financial officer
(since 1998) 280,000 70,000(O) 87,500
Harry Silver
Chief administrative officer
(since 1999) 80,000 5,000(P) 10,000
5
<PAGE>
<CAPTION>
AS OF NOVEMBER 22, 1999 AS OF DECEMBER 31, 1999
--------------------------------------------------- -----------------------
NUMBER OF SHARES NUMBER OF SHARES
NUMBER OF COVERED BY THIS COVERED BY THIS
SHARES OWNED(1) PROSPECTUS PROSPECTUS(5)
--------------- ---------------- ----------------
<S> <C> <C> <C>
George Tashie
Vice president - sales
(since 1998) 70,000 10,937 10,937
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES COVERED
OWNED(1) BY THIS PROSPECTUS
---------------- ------------------------
<S> <C> <C>
OTHER EMPLOYEES AND
FORMER EMPLOYEES
Michael Benedek 55,000 8,750
Susan J. Berkowitz 350,000 77,292(Q)
David Bisceglia 35,000 2,188
Richard R. Brescia 7,000 437
Jeffrey Chapman 52,500 3,282
Ronald Conway(4) 70,000 70,000
Sanjay Das 31,413 3,413
John Devenney(4) 583 583
Miriam Eaves(4) 12,600 12,600
Matthew Fitch 24,394 438
Malik Franklin 54,600 5,569
Sean Gormley(4) 73,500 14,000
Kenneth W. Graham 7,000 437
Michele Hudak 24,500 6,562
Tenzing Jangtey 3,500 219
Richard Lerner 52,500 4,375
Jose Leston 7,000 437
Joanne Medvecky 35,000 5,833
Elizabeth Morgan 7,000 437
7
<PAGE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES COVERED
OWNED(1) BY THIS PROSPECTUS
---------------- ------------------------
<S> <C> <C>
Eve Oliva 7,000 437
Julia A. Oliver(4) 210,000 70,000
Barry Osherow 69,500 50,385
Jane Portnoy(4) 3,500 3,500
Gene Robbins 7,000 438
Saul Rosenthal 60,000 5,833
Howard Seibel(4) 5,950 5,950
Cornelius Shields IV(4) 8,749 5,833
Francine Sommer 72,917 72,917
William Tkacs(4) 142,188 142,188
Nancy Hernandez Toste 35,000 2,188
Bryan Vaniman 54,600 4,633
Diane Vivolo(4) 875 875
Peter Weinberg 66,500 24,500
Jason Wright 252,000 191,770
</TABLE>
- ------------------
(1) Based on ownership as of September 30, 1999. Includes shares issuable to the
named individuals upon exercise of currently outstanding options under the Stock
Incentive Plan, whether or not presently exercisable, and shares issued to them
under written compensation agreements.
(2) Mr. Lessin's ability to sell his shares is restricted by contract. Under the
relevant contractual provision, he cannot sell, in any calendar year, more than
the sum of one-half of the total number of shares he is permitted to sell under
Rule 144 under the Securities Act, plus a percentage of any share amount sold by
Capital Z Financial Services Fund II, L.P. in that year, plus any allowable
transfer amount carried over from a previous year. If this restriction is waived
at any time, Mr. Lessin may use this prospectus to sell all of these shares.
(3) Mr. Readmond's ability to sell his shares is restricted by contract. Under
the relevant contractual provision, he cannot sell, in any calendar year, more
than the sum of one-half of the total number of shares he is permitted to sell
under Rule 144 under the Securities Act, plus a percentage of any share amount
sold by Capital Z Financial Services Fund II, L.P. in that year, plus any
allowable transfer amount carried over from a previous year. If this restriction
is waived at any time, Mr. Readmond may use this prospectus to sell all of these
shares.
(4) No longer employed by us.
(5) Also includes shares subject to exercisable options as of December 31, 1999.
8
<PAGE>
(A) Mr. Ezekiel also owns an additional 162,944 shares still subject to
repurchase by us. We will supplement this prospectus as necessary as these
shares vest and are no longer subject to this repurchase right.
(B) Mr. Feeley also owns an additional 29,166 shares still subject to repurchase
by us. We will supplement this prospectus as necessary as these shares vest and
are no longer subject to this repurchase right.
(C) This amount consists of 56,875 shares owned by Mr. Feller and 17,500 shares
subject to exercisable options. In addition, Mr. Feller also owns an additional
398,125 shares still subject to repurchase by us. We will supplement this
prospectus as necessary as these shares vest and are no longer subject to this
repurchase right.
(D) This amount consists of 46,666 shares owned by Mr. Flom and 6,563 shares
subject to presently exercisable options.
(E) Mr. Hall also owns an additional 271,007 shares still subject to repurchase
by us. We will supplement this prospectus as necessary as these shares vest and
are no longer subject to this repurchase right.
(F) This amount consists of 14,826 shares owned by Mr. Lang and 31,111 shares
subject to exercisable options. In addition, Mr. Lang also owns an additional
143,039 shares still subject to repurchase by us. We will supplement this
prospectus as necessary as these shares vest and are no longer subject to this
repurchase right.
(G) Mr. Lessin also owns an additional 1,341,665 shares still subject to
repurchase by us. We will supplement this prospectus as necessary as these
shares vest and are no longer subject to this repurchase right.
(H) This amount consists of 33,058 shares owned by Mr. Lieberman and 19,444
shares subject to exercisable options. Mr. Lieberman also owns an additional
77,777 shares still subject to repurchase by us. We will supplement this
prospectus as necessary as these shares vest and are no longer subject to this
repurchase right.
(I) Mr. Loehr also owns an additional 765,625 shares still subject to repurchase
by us. We will supplement this prospectus as necessary as these shares vest and
are no longer subject to this repurchase right.
(J) This amount consists of 56,875 shares owned by Mr. Mendelson and 17,500
shares subject to exercisable options. In addition, Mr. Mendelson also owns an
additional 398,125 shares still subject to repurchase by us. We will supplement
this prospectus as necessary as these shares vest and are no longer subject to
this repurchase right.
(K) Mr. Mulligan also owns an additional 271,007 shares still subject to
repurchase by us. We will supplement this prospectus as necessary as these
shares vest and are no longer subject to this repurchase right.
(L) Mr. Prince also owns an additional 185,693 shares still subject to
repurchase by us. We will supplement this prospectus as necessary as these
shares vest and are no longer subject to this repurchase right.
(M) This amount consists of 726,834 shares owned by Mr. Readmond and 122,500
shares subject to exercisable options. In addition, Mr. Readmond also owns an
additional 834,166 shares still subject to repurchase by us. We will supplement
this prospectus as necessary as these shares vest and are no longer subject to
this repurchase right.
(N) This amount consists of 2,500 shares owned by Ms. Schimel and 2,500 shares
subject to exercisable options. In addition, Ms. Schimel also owns an additional
37,500 shares still subject to repurchase by us. We will supplement this
prospectus as necessary as these shares vest and are no longer subject to this
repurchase right.
(O) This amount consists of 35,000 shares owned by Mr. Siegel and 35,000 shares
subject to exercisable options.
9
<PAGE>
(P) This amount consists of 2,500 shares owned by Mr. Silver and 2,500 shares
subject to exercisable options. In addition, Mr. Silver also owns an additional
37,500 shares still subject to repurchase by us. We will supplement this
prospectus as necessary as these shares vest and are no longer subject to this
repurchase right.
(Q) This amount includes 71,459 shares owned by Ms. Berkowitz as of September
30, 1999. This amount also includes an additional 5,833 shares owned by Ms.
Berkowitz which will no longer be subject to repurchase by us as of December 31,
1999.
10
<PAGE>
PLAN OF DISTRIBUTION
The shares of our common stock covered by this prospectus will be sold,
if at all, by the individuals named above, and not by us. The shares may be sold
from time to time as follows:
o on the Nasdaq National Market, in the over-the-counter market,
or on a national securities exchange (any of which may involve
crosses and block transactions);
o to purchasers directly;
o in ordinary brokerage transactions in which the broker
solicits purchasers;
o through underwriters, dealers and agents who may receive
compensation in the form of underwriting discounts,
concessions or commissions from a seller and/or the purchasers
of the shares for whom they may act as agent;
o through the writing of options on the shares;
o through the pledge of shares as security for any loan or
obligation, including pledges to brokers or dealers who may
from time to time effect distributions of the shares or other
interests in the shares;
o through purchases by a broker or dealer as principal and
resale by such broker or dealer for its own account pursuant
to this prospectus;
o through block trades in which the broker or dealer so engaged
will attempt to sell the shares as agent or as riskless
principal but may position and resell a portion of the block
as principal to facilitate the transaction;
o through exchange distributions in accordance with the rules of
the applicable exchange;
o in any combination of one or more of these methods; or
o in any other lawful manner.
These sales may be made at prices related to the then current market
price or otherwise at prices and on terms then prevailing, or in privately
negotiated transactions. In effecting sales, a broker or dealer engaged by an
individual using this prospectus to sell common stock may arrange for other
brokers or dealers to participate in the sale. In addition, any shares covered
by this prospectus which qualify for sale pursuant to Section 4(1) of the
Securities Act or Rules 144 or 701(g) under the Securities Act may be sold
thereunder rather than by this prospectus.
The number of shares to be reoffered or resold by means of this
prospectus by each individual named above, and any other individual with whom he
or she is cooperating for the purpose of selling our common stock, may not
exceed the greater of, during any three-month period, (1) 1% of all outstanding
shares of our common stock, (2) the average weekly reported volume of trading in
our common stock on the Nasdaq National Market during the four weeks preceding,
the date of the receipt of the order to execute the transaction by the broker or
the date of execution of the transaction directly with a market maker, or (3)
the average weekly volume of trading in our common stock reported through the
consolidated transaction reporting system contemplated by Rule 11Aa3-1 under the
Exchange Act during the four-week period specified in clause (2) above.
11
<PAGE>
In connection with distributions of the shares or otherwise, an
individual using this prospectus to sell common stock may enter into hedging
transactions with a broker-dealer. In connection with such a transaction, a
broker-dealer may engage in short sales of shares registered hereunder in the
course of hedging the positions they assume with the seller. The seller may also
sell shares short and deliver the shares to close out such short positions. The
seller may also enter into an option or other transaction with a broker-dealer
which requires the delivery to the broker-dealer of shares we have registered,
which the broker-dealer may resell by this prospectus.
A seller may pay a broker-dealer or an agent compensation in the form
of commissions, discounts or concessions. The broker-dealer and any other
participating broker-dealer may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales and any such
commission, discount or concession may be deemed to be underwriting discounts or
commissions under the Securities Act.
We may be required to file a supplemented prospectus in connection with
any activities involving a seller which may be deemed to be an "underwriting."
In that case, a supplement to this prospectus would contain (1) information as
to whether an underwriter selected by a seller, or any other broker-dealer, is
acting as principal or agent for the seller, (2) the compensation to be received
by an underwriter selected by a seller or any broker-dealer, for acting as
principal or agent for a seller and (3) the compensation to be received by any
other broker-dealer, in the event the compensation of such other broker-dealers
is in excess of usual and customary commissions. Any broker or dealer
participating in any distribution of the shares may be required to deliver a
copy of this prospectus, including any prospectus supplement, to any individual
who purchases any shares from or through such a broker-dealer.
We have advised the people identified in this prospectus as potential
sellers of common stock that during any period when they may be engaged in a
distribution of the shares offered by this prospectus, they are required to
comply with Regulation M promulgated under the Exchange Act. With certain
exceptions, Regulation M precludes any seller, any affiliated purchaser and any
broker-dealer or other individual who participates in such a distribution from
bidding for or purchasing, or attempting to induce any individual to bid for or
purchase any security, that is the subject of the distribution until the entire
distribution is complete. Regulation M also prohibits any bids or purchases made
in order to stabilize the price of a security in connection with the
distribution of that security. All of these factors may affect the marketability
of our common stock.
The people identified in this prospectus as potential sellers of common
stock offer to sell all, some or none of the shares covered by this prospectus.
Because it is possible that a significant number of shares could be sold
simultaneously by means of this prospectus, such sales, or the possibility
thereof, may have an adverse effect on the market price of our common stock.
INDEMNIFICATION
Our Amended and Restated Certificate of Incorporation limits, to the
maximum extent permitted by law, the personal liability of our directors and
officers for monetary damages for breach of their fiduciary duties as directors
and officers, except in certain circumstances involving certain wrongful acts,
such as a breach of the director's duty of loyalty or acts of omission which
involve intentional misconduct or a knowing violation of law.
Section 145 of the General Corporation Law of the State of Delaware, as
amended, permits a corporation, under specified circumstances, to indemnify its
directors, officers, employees or agents against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlements actually and reasonably
incurred by them in connection with any action, suit or proceeding brought by
third parties by reason of the fact that they were or are directors, officers,
employees or agents of the corporation, if such directors, officers, employees
or agents acted in good faith and in a manner they reasonably believed to be in
or not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reason to believe their conduct was
unlawful. In an action by or in the right of the
12
<PAGE>
corporation, indemnification may be made only for expenses actually and
reasonably incurred by directors, officers, employees or agents in connection
with the defense or settlement of an action or suit, and only with respect to a
matter as to which they shall have acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interest of the
corporation, except that no indemnification shall be made if such individual
shall have been adjudged liable to the corporation, unless and only to the
extent that the court in which the action or suit was brought shall determine
upon application that the defendant directors, officers, employees or agents are
fairly and reasonably entitled to indemnity for such expenses despite such
adjudication of liability.
Our By-Laws provide that we shall, to the fullest extent permitted by
law, indemnify our officers and directors for liabilities which they may incur
under the circumstances described in the preceding paragraph.
In addition, we have entered into indemnification agreements with our
directors, members of our special advisory board and certain of our officers.
Under these agreements, we agree to indemnify the individual to the fullest
extent permitted by law for any acts performed, or for failures to act, on our
behalf or on behalf of another individual or entity for which that person is
performing services at our request. We will not indemnify a person for any
breach of loyalty to us or to our stockholders, or if the individual does not
act in good faith or for acts involving intentional misconduct, or for acts or
omissions falling under Section 174 of the General Corporation Law of the State
of Delaware, as amended, or for any transaction from which the individual
derives an improper benefit. We agree to indemnify for expenses related to
indemnifiable events, and to pay for these expenses in advance. Our obligations
to indemnify and to provide advances for expenses are subject to a review
process with a reviewer to be determined by our Board of Directors. The rights
of directors, special advisory board members and officers under these agreements
will not exclude any rights to indemnification otherwise available to them under
law or under our Amended and Restated Certificate of Incorporation.
We have procured standard policies of insurance under which coverage is
provided (1) to our directors and officers against loss arising from claims made
by reason of breach of duty or other wrongful act and (2) to us with respect to
payments which may be made by us to such officers and directors pursuant to the
above indemnification provisions of our Amended and Restated Certificate of
Incorporation, the indemnification agreements with our directors and executive
officers or otherwise as a matter of law.
VALIDITY OF COMMON STOCK
The validity of our common stock has been passed upon by Morgan, Lewis
& Bockius LLP, New York, New York.
EXPERTS
Our consolidated financial statements as of March 31, 1999, December
31, 1998 and 1997, and the related consolidated statements of operations,
changes in stockholders' equity and cash flows for the period ended March 31,
1999, the years ended December 31, 1998 and 1997 and for the period from March
27, 1996 (inception) to December 31, 1996, incorporated in this prospectus by
reference to our prospectus dated June 4, 1999 have been so incorporated in
reliance on the report of Arthur Andersen LLP, independent accountants, given on
the authority of this firm as experts in auditing and accounting.
13
