WIT CAPITAL GROUP INC, PREC14A, 2000-03-30

WIT CAPITAL GROUP INC
PREC14A, 2000-03-30
SECURITY BROKERS, DEALERS & FLOTATION COMPANIES

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SCHEDULE 14A
(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT

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
|_| Definitive Proxy Statement Rule 14a-6(e)(2))
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to 14a-11(c) or 14a-12

WIT CAPITAL GROUP, INC.
(Name of Registrant as Specified In Its Charter)

(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)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

- --------------------------------------------------------------------------------

(2) Aggregate number of securities to which transaction applies:

- --------------------------------------------------------------------------------

(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):

- --------------------------------------------------------------------------------

(4) Proposed maximum aggregate value of transaction:

- --------------------------------------------------------------------------------

(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:

- --------------------------------------------------------------------------------

(2) Form, Schedule or Registration Statement no.:

- --------------------------------------------------------------------------------

(3) Filing Party:

- --------------------------------------------------------------------------------

(4) Date Filed:

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PRELIMINARY COPY

WIT CAPITAL GROUP, INC.
826 BROADWAY, SEVENTH FLOOR
NEW YORK, NEW YORK 10003

--------------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 1, 2000

--------------------

To the Stockholders
of Wit Capital Group, Inc.

The 2000 Annual Meeting of Stockholders of Wit Capital Group, Inc. will
be held at the Peninsula Hotel, 700 Fifth Avenue, New York, N.Y. 10019, on
Thursday, June 1, 2000 at 9:30 a.m., Eastern Standard Time, to consider and act
upon the following matters:

(1) The election of two (2) directors to serve until their
successors have been elected and qualified.

(2) The approval of the proposed amendment to the Company's
certificate of incorporation to change the Company's name to
"Wit SoundView Group, Inc."

(3) The approval of the proposed amendment to the Company's
certificate of incorporation to eliminate the Company's Class
C common stock.

(4) Such other business as may properly come before the meeting or
any adjournment or postponement thereof.

Only holders of record of common stock, par value $0.01 per share, of
the Company at the close of business on April 7, 2000, the record date, are
entitled to vote their shares at the Annual Meeting and any adjournment or
postponement of the meeting. Each share of the Company's common stock will
entitle its record holder to one vote on each matter put to a vote at the
meeting.

IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING WHETHER OR
NOT YOU ARE PERSONALLY ABLE TO ATTEND. STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND
THE MEETING IN PERSON ARE URGED TO PLEASE SIGN, DATE AND MAIL THE ACCOMPANYING
PROXY PROMPTLY IN THE ENCLOSED ENVELOPE. THIS WILL ENSURE THAT YOUR SHARES ARE
VOTED IN ACCORDANCE WITH YOUR WISHES AND THAT A QUORUM WILL BE PRESENT AT THE
ANNUAL MEETING.

By Order of the Board of Directors,

ROBERT C. MENDELSON
SECRETARY

New York, New York
May__, 2000

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WIT CAPITAL GROUP, INC.

-------------------------

PROXY STATEMENT

--------------------------

ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 1, 2000

INTRODUCTION

This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Wit Capital Group, Inc., a Delaware
corporation, for use at the Company's Annual Meeting of Stockholders to be held
at the Peninsula Hotel, 700 Fifth Avenue, New York, N.Y. 10019, on Thursday,
June 1, 2000 at 9:30 a.m., Eastern Standard Time, and at any adjournment
thereof.

This Proxy Statement and the enclosed form of proxy are first being
sent or given to Stockholders of the Company on or about May 1, 2000. The
principal executive offices of the Company are located at 826 Broadway, Seventh
Floor, New York, New York 10003.

PURPOSES OF MEETING

The purposes of the meeting are to consider and act upon the following
matters:

1. The election of two (2) directors until their successors have
been elected and qualified.

2. The approval of the proposed amendment to the Company's
certificate of incorporation to change the Company's name to
"Wit SoundView Group, Inc."

3. The approval of the proposed amendment to the Company's
certificate of incorporation to eliminate the Company's Class
C common stock.

4. Such other business as may properly come before the meeting or
any adjournment or postponement thereof.

RECORD DATE; VOTE REQUIRED

The Board of Directors has fixed the close of business on April 7, 2000
as the record date for determination of the Company's stockholders entitled to
notice of and to vote at the Annual Meeting.

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As of the record date, there were _________ shares of the Company's
common stock outstanding, the holders of which are entitled to vote at the
Annual Meeting. Holders of the Company's Class B common stock are not entitled
to vote at the Annual Meeting. The presence at the meeting, in person or by
proxy, of the holders of a majority of the total number of shares of common
stock outstanding on the record date constitutes a quorum for the transaction of
business at the meeting.

As of the record date, the Company's directors and executive officers
and their affiliates owned an aggregate of __________outstanding shares of the
Company's common stock or approximately ___% of the shares entitled to vote at
the Annual Meeting.

SOLICITATION OF PROXIES

The Company has retained the services of Georgeson Shareholder
Communications Inc. to assist in the solicitation of proxies from its
stockholders. The fees to be paid to that firm for these services are not
expected to exceed $6,500. In addition to solicitation by mail, the directors,
officers and employees of the Company may solicit proxies from stockholders by
telephone, facsimile, other electronic means or in person. Brokerage houses,
nominees, fiduciaries and other custodians will be requested to forward
soliciting materials to beneficial owners and will be reimbursed for their
reasonable expenses incurred in sending proxy materials to beneficial owners.

Proxies in the accompanying form are solicited on behalf and at the
direction of the Board of Directors. All shares of common stock represented by
properly executed proxies will be voted at the meeting in accordance with the
instructions made on the proxies, unless the proxies have previously been
revoked.

Regarding the election of directors to serve until the Annual
Meeting of Stockholders in 2003, in voting by proxy, stockholders may vote in
favor of the election of all the nominees or withhold their votes as to all
nominees or withhold their votes as to specific nominees. With respect to the
other proposals to be voted upon, stockholders may vote in favor of the
proposals, against the proposals or may abstain from voting. Stockholders
should specify their choices on the enclosed form of proxy. If authority to
vote a proxy has not been withheld and no instruction is indicated, the
shares will be voted FOR the election of both nominees for the Board of
Directors and voted FOR the approval of the proposed amendments to change the
Company's name and to eliminate the Company's Class C common stock. If any
other matters are properly presented at the meeting for action, including a
question of adjourning the meeting from time to time, the persons named in
the proxies and acting thereunder will have discretion to vote on such
matters in accordance with their best judgment.

A stockholder executing and returning a proxy has the power to
revoke it before it is exercised, and may do so by delivering a subsequently
signed and dated proxy or other written notice to the Secretary of the Company
at any time prior to the vote at the meeting or by appearing at the meeting and
voting in person the shares to which the proxy relates. Any written notice
revoking a

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proxy should be sent to the Company, attention: Robert C. Mendelson, Secretary.
The mailing address of the Company's executive offices is 826 Broadway, Seventh
Floor, New York, New York 10003.

Directors will be elected by a plurality of the votes cast. Abstentions
and broker non-votes will have no effect on the election of directors. The
approval of each of the two proposed amendments will require the affirmative
vote of the holders of a majority of the shares of common stock outstanding on
the record date. Thus, abstentions and broker non-votes will have the same
effect as a negative vote.

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PROPOSAL NO. 1:
ELECTION OF DIRECTORS

As of December 31, 1999, the Company's Board of Directors consisted of
nine directors. The Board is divided into three classes, with one class standing
for election each year for a three-year term. The Board has nominated Joseph R.
Hardiman and Andrew D. Klein for reelection as directors, each to hold office
until the Annual Meeting of Stockholders in 2003 and until his successor is duly
elected and qualified.

If either of these nominees is not available to serve as a director at
the time of the Annual Meeting (which the Board does not anticipate), the
proxies will be voted for the election as director such other person or persons
as the Board may designate, unless the Board, in its discretion, reduces the
number of directors constituting the Board of Directors.

RECOMMENDATION OF THE BOARD OF DIRECTORS CONCERNING THE ELECTION OF DIRECTORS

The Board of Directors recommends a vote FOR each of Joseph R. Hardiman
and Andrew D. Klein as directors to hold office until the Annual Meeting of
Stockholders in 2003 and until their respective successors are duly elected and
qualified. Proxies received by the Board of Directors will be so voted unless
stockholders specify otherwise in their proxies.

NOMINEES FOR ELECTION

POSITION AND/OR TERM TO
NOMINEE AGE(1) PRINCIPAL OCCUPATION EXPIRE
- ------- ------ -------------------- ------

Joseph R. Hardiman 62 Director, The Flag 2003
Investors Funds, The ISI
Funds and The Nevis Fund

Andrew D. Klein 40 Vice Chairman, Founder 2003
and Chief Strategist of the
Company

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CONTINUING DIRECTORS

POSITION AND/OR TERM
DIRECTOR AGE(1) PRINCIPAL OCCUPATION EXPIRES
- -------- ------ -------------------- -------

John H. N. Fisher 40 Managing Director, 2001
Draper Fisher Jurvetson

Gilbert C. Maurer 71 Director, The Hearst 2001
Corporation

Ronald Readmond 57 Vice Chairman, Co- 2001
Chief Executive Officer
and President of the
Company

Russell D. Crabs 42 Co-Head of Wit 2002
SoundView

Edward H. Fleischman 67 Senior counsel to 2002
Linklaters

Steven M. Gluckstern 48 Founding partner of 2002
Capital Z Partners, non-
executive Chairman of
Zurich Re and Zurich
Centre Group/Centre
Solutions

Robert H. Lessin 45 Chairman and Co-Chief 2002
Executive Officer of the
Company

- ---------------------
(1) As of March 31, 2000.

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BUSINESS EXPERIENCE

NOMINEES FOR ELECTION--TERMS TO EXPIRE IN 2003

JOSEPH R. HARDIMAN, a director of the Company since 1998, served as the
President and Chief Executive Officer of the National Association of Securities
Dealers, Inc. and its wholly owned subsidiary, the Nasdaq Stock Market, Inc.,
from 1987 through January 1997. Previously, he was the Managing Director, Chief
Operating Officer and a member of the Board of Directors of Alex. Brown & Sons.
Mr. Hardiman serves as a director of The Flag Investors Funds, The ISI Funds and
The Nevis Fund.

ANDREW D. KLEIN, a director of the Company since 1996, is presently the
Vice Chairman, founder and chief strategist of the Company. He has been with the
Company since its inception in April 1996. Previously, in January 1993 Mr. Klein
founded Spring Street Brewing Company, a microbrewery which two years later
became the first company to complete a public offering over the Internet and, in
March 1996, created the first ever Web-based trading mechanism allowing
investors to buy and sell Spring Street shares. Prior to starting Spring Street
Brewing, Mr. Klein practiced corporate and securities law at Cravath, Swaine &
Moore for six years. In 1997 Mr. Klein was the subject of a civil order of the
Commonwealth of Massachusetts alleging that he and Spring Street used its Web
site to gather names of potential investors and then mailed an unregistered
private placement memorandum to these persons in violation of the Massachusetts
securities laws. While neither admitting nor denying that the violations
occurred, Mr. Klein agreed to offer a refund to six investors and paid a fine of
$3,000.

CONTINUING DIRECTORS

TERMS TO EXPIRE IN 2001

JOHN H.N. FISHER, a director of the Company since 1998, is a Managing
Director of Draper Fisher Jurvetson, a Redwood City, California venture capital
firm providing start-up and early stage financing. On behalf of Draper Fisher
Jurvetson, Mr. Fisher serves on the boards of Central, Convoy Corporation,
Entegrity Solutions Corporation, Praxon Inc., Selectica Inc., Sonnet Financial
Inc., Transactor Networks Inc. and Webline Communications Corporation.
Previously, Mr. Fisher was a venture capitalist at ABS Ventures. Prior to that,
he was an investment banker at Alex. Brown & Sons and an account executive in
the capital markets group at Bank of America.

GILBERT C. MAURER, a director of the Company since 1998, had been
employed since 1973 by The Hearst Corporation, one of the nation's largest
private companies engaged in a broad range of publishing, broadcasting, cable
networking and diversified communications activities. Most recently, he held the
position of Chief Operating Officer from 1990 until his retirement in 1998.
Previously, Mr. Maurer served as President of Hearst's magazines division for 14
years. Prior to joining Hearst, Mr. Maurer worked for 19 years with Cowles
Communications, Inc. Mr. Maurer is currently a director of The Hearst
Corporation.

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RONALD READMOND is the Vice Chairman, Co-Chief Executive Officer and
President of the Company. He joined the Company as an executive officer in May
1998 and has served as a director since 1997. Before joining the Company, he had
served as Vice Chairman of Charles Schwab & Co., Inc. where he was responsible
for operations, capital markets and trading, international and mutual funds as
well as strategic acquisitions and industry relations. Prior to that, Mr.
Readmond was a managing director of Alex.Brown & Sons. Mr. Readmond has served
as Co-Chairman of the U.S. Working Committee on Clearance and Settlement of the
Group of 30, as a member of the New York Stock Exchange operations advisory
committee and the nominating committee of the Options Clearing Corporation. Mr.
Readmond is the former Chairman of the Board of the National Securities Clearing
Corporation and for five years served on its board of directors. In addition, he
served for two years as a director of NASD Markets Services, Inc. Mr. Readmond
is currently a director of ProBusiness Services, Inc., Chairman of International
Equity Partners and a director of The American Council for Capital Formation.

TERMS TO EXPIRE IN 2002

RUSSELL D. CRABS became a director of the Company on February, 2000
following the merger of SoundView Technology Group, Inc. with the Company. Mr.
Crabs had been the President, Chief Executive Officer and director of research
of SoundView from 1987. He also served on SoundView's Board of Directors and
Operating Committee.

EDWARD H. FLEISCHMAN, a director of the Company since 1998, has served
as senior counsel to the London based international law firm of Linklaters since
1994, where he specializes in securities and financing law and related areas.
Mr. Fleischman served as a Commissioner of the Securities and Exchange
Commission from 1986 to 1992. Previously, he practiced law for 27 years at
Beekman & Bogue in New York.

STEVEN M. GLUCKSTERN, a director of the Company since 1998, is a
founding partner of Capital Z Partners. In addition, Mr. Gluckstern currently
serves as non-executive Chairman of both Zurich Re, the global reinsurance
network of Zurich Financial Services, and of Zurich Centre Group/Centre
Solutions. Previously, he served as Chief Executive Officer of both Zurich Re
and Centre Re from 1988 to 1998, and, prior to that, as General Manager of
reinsurance operations of the Berkshire Hathaway Insurance Group. Mr. Gluckstern
also serves on the boards of Aames Financial Corporation, Zurich Payroll
Solutions Ltd., United Payors and United Providers Inc., Zurich Holding Co. of
America, Channelpoint Inc. and Brodia.com.

ROBERT H. LESSIN, a director of the Company since 1998, is presently
the Chairman and Co- Chief Executive Officer of the Company. Before joining the
Company in April 1998, he was Vice Chairman of Salomon Smith Barney, Inc. having
previously been Vice Chairman of Smith Barney, Inc. from 1993 until the merger
with Salomon Brothers in November 1997. He served as head of investment banking
at Smith Barney from June 1993 to January 1997. Prior to joining Salomon Smith
Barney, Mr. Lessin spent 16 years with Morgan Stanley & Co. in the position of
managing director and was responsible for the firm's financial entrepreneurs,
media and retailing groups. Mr.

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Lessin was also Vice Chairman of Morgan Stanley's investment banking operating
committee and Chairman of their strategic planning committee. Currently, he is a
director of Marketwatch.com, Inc., iParty Corp., MaMaMedia Inc. and sixdegrees
inc. and a manager of the general partner of Dawntreader Fund I, a venture
capital fund.

COMMITTEES OF THE BOARD

The Board of Directors has established an audit committee, the members
of which in 1999 and during the first quarter of 2000 were Edward H. Fleischman,
Joseph R. Hardiman and Adam Mizel. The Board of Directors has also established a
compensation committee, the members of which are John H.N. Fisher, Steven M.
Gluckstern, Gilbert C. Maurer and Ronald Readmond. The Stock Incentive Plan is
administered by a subcommittee of the compensation committee consisting of John
H.N. Fisher, Steven M. Gluckstern and Gilbert C. Maurer.

The audit committee is responsible for recommending to the Board of
Directors the engagement of the independent auditors and reviewing with the
independent auditors the scope and results of audits, the internal accounting
controls, audit practices and the professional services furnished by the
independent auditors. The compensation committee is responsible for reviewing
and approving all compensation arrangements for the executive officers, and its
subcommittee is responsible for administering the Stock Incentive Plan.

In 1999, the Board of Directors held 12 meetings, the audit committee
held 6 meetings and the compensation committee held 2 meetings.

SPECIAL ADVISORY BOARD

To complement the Board of Directors, the Company has also developed a
special advisory board consisting of accomplished professionals and
entrepreneurs from the fields of technology, new media, finance and law. The
first members of this advisory board are Joseph H. Flom and Edward J. Mathias.
Members of the special advisory board attend but do not vote at meetings of the
Board of Directors. They also provide the management with strategic advice and
other assistance with the planning and development of the Company's business.

GOLDMAN SACHS OBSERVER

An affiliate of Goldman Sachs has appointed a non-voting observer,
Joseph Gleberman, to attend meetings of the Board of Directors.

COMPENSATION OF DIRECTORS AND SPECIAL ADVISORY BOARD MEMBERS

The Company does not currently pay directors cash compensation. The
Company, however, has granted certain non-employee directors as well as the
members of the advisory board options to purchase common stock. The non-employee
directors designated by the Company's venture capital

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investors do not receive any compensation from the Company. In addition, Messrs.
Flom and Mathias hold, respectively, 116,666 and 140,000 shares of the Company's
common stock.

The following non-employee members of the Board of Directors and of the
Company's special advisory board have received the respective numbers of stock
options indicated below.

NUMBER OF
SECURITIES
UNDERLYING EXERCISE EXPIRATION
OPTIONS GRANTED PRICE DATE
NAME --------------- -------- ----------

Edward H. Fleischman...... 35,000 $1.43 11/11/08
17,500 2.14 3/17/09

Joseph R. Hardiman........ 35,000 1.43 11/11/08
17,500 2.14 3/17/09

Gilbert C. Maurer......... 35,000 1.43 11/11/08
17,500 2.14 3/17/09

Joseph Flom............... 35,000 1.43 11/11/08

Edward Mathias............ 35,000 1.43 11/11/08

PROPOSAL NO. 2:
PROPOSED AMENDMENT
TO CHANGE THE NAME OF THE COMPANY

RECOMMENDATION OF THE BOARD OF DIRECTORS CONCERNING THE APPROVAL OF THE PROPOSED
AMENDMENT TO CHANGE THE COMPANY'S NAME

The Board of Directors believes that changing the Company's name will
reflect the Company's business after the merger with SoundView Technology Group,
Inc., while maintaining its name recognition. For the same reason, the Company
is changing the name of its broker-dealer subsidiaries to conform with its
proposed name change.

The Board of Directors has approved and recommends a vote FOR the
adoption and approval of an amendment to the Company's certificate of
incorporation to change the name of the Company from "Wit Capital Group, Inc."
to "Wit SoundView Group, Inc."

Under the proposed amendment, Article FIRST of the certificate of
incorporation of the Company would be amended to read as follows:

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FIRST: NAME. The name of the Corporation is Wit SoundView Group, Inc.

The approval of the proposed amendment will require the affirmative
vote of the holders of a majority of the shares of common stock outstanding on
the record date. Thus, abstentions and broker non-votes will have the same
effect as a negative vote.

If approved by the stockholders at the Annual Meeting, the proposed
amendment will become effective upon the filing of the certificate of amendment
of the Company's certificate of incorporation with the Delaware Secretary of
State.

PROPOSAL NO. 3:
PROPOSED AMENDMENT
TO ELIMINATE CLASS C COMMON STOCK

RECOMMENDATION OF THE BOARD OF DIRECTORS CONCERNING THE APPROVAL OF THE PROPOSED
AMENDMENT TO ELIMINATE THE COMPANY'S CLASS C COMMON STOCK

The Company's certificate of incorporation, as currently in effect,
provides that the Company is authorized to issue 159,000,000 shares of Class C
common stock, $.01 par value. On December 7, 1999, all outstanding shares of the
Company's Class C common stock were converted into common stock and no more
Class C shares are outstanding. The Company will not issue any more shares of
Class C common stock.

The Board of Directors has approved and recommends a vote FOR the
elimination of the Company's Class C common stock from the Company's authorized
capital as set forth in its certificate of incorporation.

Stockholders are being asked to approve an amendment of Section 1 and
Section 3 of Article FOURTH of the Company's certificate of incorporation to
eliminate the Company's Class C common stock. The form of the proposed text of
Section 1 and Section 3 of Article FOURTH, marked to show the deletion of text
relating to the Class C common stock, is attached to this Proxy Statement as
Exhibit A.

Under the proposed amendment, the total number of shares of all classes
of stock which the Company shall have authority to issue is 605,000,000 shares,
consisting of 500,000,000 shares of common stock, $.01 par value, 75,000,000 of
non-voting Class B common stock, $.01 par value, and 30,000,000 shares of
Preferred Stock, par value $.001 per share. The elimination of the Class C
common stock will have no effect on the rights and privileges of the Company's
outstanding common stock.

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If approved by the stockholders at the Annual Meeting, the proposed
amendment will become effective upon the filing of a certificate of amendment of
the Company's certificate of incorporation with the Delaware Secretary of State.

MANAGEMENT OF THE COMPANY

The following table lists the Company's executive officers as of
December 31, 1999.

NAME AGE(1) TITLE
- ---- ------ -----
<S> <C> <C>
Robert H. Lessin......... 45 Chairman and co-chief executive officer

Ronald Readmond.......... 57 Vice chairman, co-chief executive officer and president

Andrew D. Klein.......... 40 Vice chairman, founder and chief strategist

Harry Silver............. 44 Senior vice president and chief administrative officer

M. Bernard Siegel........ 44 Senior vice president and chief financial officer(2)

Mark Loehr............... 43 Director of investment banking

Elizabeth Schimel........ 40 Senior vice president and director of business development

Everett F. Lang.......... 57 Senior vice president and director of brokerage

George M. Lieberman...... 57 Senior vice president and chief information officer(3)

Daniel DeWolf............ 42 Senior vice president and director of venture capital fund group

Lloyd H. Feller.......... 57 Senior vice president and co-general counsel

Robert C. Mendelson...... 49 Senior vice president and co-general counsel

Jonathan Cohen........... 35 Director of research
</TABLE>

- ----------
(1) As of March 31, 2000.
(2) Effective February 2, 2000, Curtis L. Snyder was named chief financial
officer. Mr. Siegel has been appointed director of internal audit and
risk management.
(3) Effective March 15, 2000, Max Palmer replaced Mr. Lieberman as chief
information officer. Mr. Lieberman is no longer employed by the
Company.

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EXECUTIVE OFFICERS

The following discussion sets forth information regarding the Company's
executive officers. Information regarding those executive officers of the
Company who are also directors is set forth under "Proposal No. 1 Election of
Directors--Business Experience."

HARRY SILVER, senior vice president and chief administrative officer,
joined the Company in August 1999. Mr. Silver previously served as the executive
director of the law firm of Cravath, Swaine & Moore where he was responsible for
leading the firm's administrative activities. Prior to that, Mr. Silver spent
over ten years at Goldman, Sachs & Co., where he was head of worldwide
technology and administrative support activities for the investment banking
division and the principal investment area.

M. BERNARD SIEGEL joined the Company in October 1998 as senior vice
president and chief financial officer. In February, 2000, Mr. Siegel was
appointed senior vice president and director of internal audit and risk
management. He has more than twenty years experience in the financial services
industry. He served as chief financial officer and director of risk management
of Waterhouse Investor Services from November 1993 to June 1998. Prior to that,
he was chief financial officer and chief operating officer of Fleet Brokerage
Securities. Mr. Siegel is a CPA who spent eight years with KPMG LLP, last
serving as a senior audit manager in the financial services division.

MARK LOEHR joined the Company in March 1999 as director of investment
banking. In February 2000, Mr. Loehr assumed the responsibilities of Co-Head of
Wit SoundView. He spent a total of eight years with Smith Barney, from 1978 to
1983 and from 1994 to 1997, and two years with Salomon Smith Barney, from 1997
to 1999. He spent eleven years with CS First Boston, from 1983 to 1994. While at
Smith Barney and, later, Salomon Smith Barney, he served as head of global
equity sales and head of equity capital markets. While at CS First Boston, Mr.
Loehr served as co-head of U.S. equity capital markets.

ELIZABETH SCHIMEL, senior vice president and director of business
development, joined the Company in August 1999. Prior to joining us and for the
past five years, Ms. Schimel worked for BMG Entertainment in several different
positions. Most recently, she served as vice president and general manager at
GetMusic.com, a joint venture between Bertlesmann A.G. and Universal Music
Group, where she was responsible for creating and rolling-out the company's
online presence. Prior to joining BMG, Ms. Schimel was director of electronic
media development and director of marketing for the electronic publishing
division of Bantam Doubleday Dell (now Random House), a division of Bertlesmann.
Ms. Schimel also worked in international finance and mergers and acquisitions
for PaineWebber Inc. and Banque Indosuez in New York and Hong Kong.

EVERETT F. LANG became president--digital trading facility in February
1999. Since then, he has assumed the responsibilities of directing and managing
our online broker. Dr. Lang was previously chief executive of National Discount
Brokers where he introduced the concept of "Flat

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Fee" trading to consumers. Prior to that, he was chairman and chief executive of
BT Brokerage Corporation, a New York Stock Exchange member firm which he helped
to organize. In 1995, Dr. Lang founded the Discount Brokerage Association which
was assimilated into the Securities Industry Association along with twenty-three
member firms. He currently serves as co-chairman of this entity. Dr. Lang has a
doctoral degree in organizational psychology from the University of Virginia.

GEORGE M. LIEBERMAN, senior vice president and chief information
officer, joined the Company in February 1999. He has more than 30 years of
information technology management and development experience across a broad
spectrum of industries. He was first vice president and director of technology
strategy and planning for Merrill Lynch & Co. from June 1991 to December 1998.
He holds two computer-related patents and was formerly on the Merrill Lynch
technology advisory board. Prior to joining Merrill Lynch, he was the chief
information officer for Telerate Inc., the chief information officer for Chargit
Inc. and responsible for the development of major systems projects at many
financial industry companies including Citibank and ADP. Mr. Lieberman is no
longer employed by the Company.

DANIEL DEWOLF, senior vice president and director of the venture
capital fund group, joined the Company in October 1999. Mr. DeWolf was
previously a managing director of the Dawntreader Fund I, L.P. Mr. DeWolf is
also currently of counsel to the law firm of Camhy Karlinsky & Stein LLP in New
York, New York where he has practiced corporate and securities law since 1994
and where he was a partner from 1994 to 1998. Prior to 1994, Mr. DeWolf was
general counsel for SMR Energy, Inc., an independent oil and gas company. From
1982 to 1984 and 1986 to 1990, Mr. DeWolf was affiliated with the law firm of
Shea & Gould in New York City. From 1984 to 1986, Mr. DeWolf was an associate at
the law firm of Pettit and Martin in San Francisco, California.

LLOYD H. FELLER, senior vice president and co-general counsel, joined
the Company in April 1999. Previously, he was a partner at Morgan, Lewis &
Bockius LLP. Before joining Morgan, Lewis & Bockius LLP in 1979, Mr. Feller
served at the SEC as the Associate Director of the Division of Market
Regulation, in charge of the Office of Market Structure and Trading Practices.

ROBERT C. MENDELSON, senior vice president and co-general counsel,
joined the Company in April 1999. Previously, he was a partner at Morgan, Lewis
& Bockius LLP. Mr. Mendelson was a member of the Legal Advisory Board of the
NASD and formerly chaired the Market Transaction Advisory Committee created by
the SEC.

JONATHAN COHEN joined the Company as director of research in 1999, and
was previously head of Merrill Lynch's Internet equity research effort. Mr.
Cohen was named to the 1996, 1997 and 1998 Institutional Investors "All American
Research Team" for the Internet sector. He has been named as one of the 25 Best
U.S. analysts by both Bloomberg and Financial World Magazine. Prior to joining
Merrill Lynch in 1998, Mr. Cohen was a managing director and head of Internet
and PC Software research at UBS Securities from 1993 to 1997, where his coverage
focused on information technology companies.

13
<PAGE>

EXECUTIVE COMPENSATION

The following table sets forth the salaries, and to the extent
determinable, the bonuses that the Company paid its co-chief executive officers
and the other four most highly compensated executive officers during 1999. The
Company has also indicated, where applicable, the compensation paid to these
persons during 1998.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM
COMPENSATION
----------------------------------------------------- ------------
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION
- --------------------------- ---- ------ ----- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Robert H. Lessin................ 1999 $208,332 $ 1,374,742 -- 200,000 --
Chairman and co-chief 1998 -- 135,685 -- -- --
executive officer

Ronald Readmond................. 1999 250,000 600,000 -- 200,000 $ 250,000(1)
President and co-chief 1998 146,000 -- -- 1,750,000 116,000(1)
executive officer

Jonathan Cohen.................. 1999 226,442 5,150,000 -- 800,000 --
Director of research 1998 -- -- -- -- --

Mark Loehr...................... 1999 179,615 650,000 -- 100,000 --
Director of investment banking 1998 -- -- -- -- --

Lloyd H. Feller................. 1999 169,230 390,000 -- 190,000 --
Senior vice president and 1998 -- -- -- -- --
co-general counsel

Robert C. Mendelson............. 1999 170,923 365,000 -- 190,000 --
Senior vice president and 1998 -- -- -- -- --
co-general counsel
</TABLE>

- ----------
(1) Represents expense reimbursement.

14
<PAGE>

STOCK OPTIONS

OPTION GRANTS. The following table sets forth information regarding
stock options granted under the Company's stock option plans in 1999 to the
co-chief executive officers and the other four most highly compensated executive
officers during 1999. The Company has never granted stock appreciation rights.

<TABLE>
<CAPTION>
OPTION GRANTS FOR THE YEAR ENDED DECEMBER 31, 1999
--------------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS
--------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
PERCENTAGE OF TOTAL ANNUAL RATES OF STOCK
OPTIONS GRANTED TO PRICE APPRECIATION FOR
NUMBER OF SECURITIES EMPLOYEES (NET OF EXERCISE OR BASE OPTION TERMS(4)
UNDERLYING OPTIONS FORFEITURES) PRICE EXPIRATION ----------------------
GRANTED (1) IN 1999 (2) ($/SHARE)(3) DATE 5% 10%
-------------------- ------------------- ---------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Robert H. Lessin........ 200,000 2.6% $17.06 12/20/09 $5,558,603 $8,851,146

Ronald Readmond......... 200,000 2.6 17.06 12/20/09 5,558,603 8,851,146

Jonathan Cohen.......... 700,000 9.0 2.14 2/4/09 2,440,084 3,885,426
100,000 1.3 17.06 12/20/09 2,779,301 4,425,573

Mark Loehr.............. 100,000 1.3 17.06 12/20/09 2,779,301 4,425,573

Lloyd H. Feller......... 140,000 1.8 2.14 4/15/09 488,017 777,085
50,000 -- 17.06 12/20/09 1,389,651 2,212,787

Robert C. Mendelson..... 140,000 1.8 2.14 4/15/09 488,017 777,085
50,000 -- 17.06 12/20/09 1,389,651 2,212,787
</TABLE>

- ----------
(1) The options were granted under the Company's Stock Incentive Plan.

(2) Based on an aggregate of 7,797,312 options granted (net of forfeitures)
to employees in 1999, including options granted to the other four most
highly compensated executive officers.

(3) The exercise price per share of each option was equal to the fair
market value of the common stock on the date of the grant as determined
by the Board of Directors. Prior to the Company's initial public
offering, the Board of Directors determined the fair market value of
the common stock on the date of the grant on the basis of the most
recent price paid by an unaffiliated party for the Company's preferred
stock, discounted to reflect the preferred stock liquidation
preference, the right to board representation and a cumulative
preferred dividend. Subsequent to the Company's initial public
offering, the Board of Directors determined the fair market value of
the common stock on the date of the grant on the basis of the closing
price at the end of the Nasdaq primary trading session.

(4) Amounts represent hypothetical values that could be achieved for the
respective options if exercised at the end of the option term. These
values are based on assumed rates of stock

15
<PAGE>

price appreciation of 5% and 10% compounded annually from the date the
respective options were granted to their expiration date based on the
market price of the underlying securities on the date of the grant.
These assumptions are not intended to forecast future appreciation of
the Company's stock price. The potential realizable value computation
does not take into account federal or state income tax consequences of
option exercises or sales of appreciated stock.

OPTION VALUES. The following table sets forth information concerning
the value at December 31, 1999 of exercisable and unexercisable options held by
the co-chief executive officers and the other four most highly compensated
executive officers of the Company during 1999. The values of unexercised
in-the-money options represent the positive spread between the respective
exercise prices of outstanding stock options and the price of the options at
December 31, 1999.

OPTION VALUES AT DECEMBER 31, 1999

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
---------------------------- ---------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Robert H. Lessin............ -- 200,000 -- --

Ronald Readmond............. 110,000 340,000 1,712,857 $2,180,000

Jonathan Cohen.............. 175,000 625,000 2,600,001 7,800,004

Mark Loehr.................. -- 100,000 -- --

Lloyd H. Feller............. 26,250 163,750 390,000 1,690,001

Robert C. Mendelson......... 26,250 163,750 390,000 1,690,001
</TABLE>

16
<PAGE>

EMPLOYMENT AGREEMENTS

ROBERT H. LESSIN. Mr. Lessin has an employment agreement with the
Company to serve as Co-Chief Executive Officer. This agreement expires on
December 31, 2000, with an automatic one-year extension, unless either party
agrees to terminate the agreement upon 90 days notice. During the term of this
agreement, Mr. Lessin will receive a minimum annual base salary of $250,000,
subject to annual increases by the Board. Mr. Lessin is entitled to participate
in the Company's Annual Bonus Plan for Executives and Long-Term Incentive Plan.
He is also entitled to participate in the Company's 401(k) Plan, its Stock
Incentive Plan and any other employee benefits provided to senior executives.

The Company has extended to Mr. Lessin an interest-bearing loan in the
amount of $5,750,000 with which he purchased 4,025,000 shares of common stock at
$1.43 per share. He is personally liable for all interest due on the loan and is
similarly liable for up to one-half of the principal amount of the loan. This
loan is secured by the shares he purchased. In the event Mr. Lessin ceases to be
employed by the Company, the Company has the right to repurchase his unvested
shares at the lower of their fair market value or $1.43 per share. A total of
3,130,558 shares will be vested as of March 31, 2000 and the remainder will vest
at the rate of 223,612 per quarter until March 31, 2001. Mr. Lessin's loan
becomes due and payable if his employment terminates or if he disposes of the
shares. Mr. Lessin also has "piggyback" and demand registration rights relating
to the shares.

In addition to the other compensation due under his employment
agreement, in June 2000, June 2001 and December 2001, Mr. Lessin will be
entitled to cash payments of $2 million, $2 million and $1 million,
respectively. If the Company is sold, Mr. Lessin will be entitled to a payment
of up to $5 million less any of the aforementioned payments he previously
received. He will not, however, be entitled to these payments if he violates his
non-competition agreement or is not employed by the Company at the time of the
sale. This does not apply if his employment is terminated by the Company for any
reason other than for "cause," disability, death or by him for "good reason."

Mr. Lessin has agreed, during the term of his employment or until March
31, 2001, not to own, manage, operate, join, control or participate in the
ownership, management, operation or control of, or be connected as a director,
officer, employee, or lender with, or be compensated by an entity that is an
NASD registered broker-dealer, or that provides financial advisory services or
engages in capital raising activities. Mr. Lessin has the right to engage in
financial advisory or capital raising activities only through an entity in which
he is an investor or director, so long as any fee payable in connection with
such activities is pursuant to an arrangement for which registration as a
broker-dealer is not required. He may participate in certain venture capital
activities so long as they do not violate other terms of his employment
agreement.

Mr. Lessin is also a party to the Company's Employee Non-Disclosure,
Non-Competition and Assignment of Inventions Agreement. He has agreed not to
reveal any confidential information

17
<PAGE>

belonging to the Company, except as may be required in the course of performing
his duties as the Company's employee. He has also agreed to assign to the
Company any rights which he may have with respect to inventions, software
programs, data, or other developments created or discovered during his
employment term.

RONALD READMOND. Mr. Readmond has an employment agreement with the
Company to serve as Co-Chief Executive Officer. This agreement expires on
December 31, 2000, with an automatic one-year extension, unless either party
agrees to terminate the agreement upon 90 days' notice. Under the agreement, Mr.
Readmond is entitled to a minimum annual base salary of $250,000, subject to
annual increases by the Board, and an annual guaranteed bonus of $250,000. If
Mr. Readmond's employment is terminated by the Company without "cause" or by him
for "good reason," the Company must pay him a lump sum equal to his unpaid base
salary through the end of his contractual employment period, unpaid annual bonus
amounts accrued through the date of termination, and unpaid guaranteed bonus
amount prorated through date of termination. If his employment is terminated by
the Company for "cause," by him without "good reason" or if he dies or becomes
disabled, the Company must pay only him a lump sum equal to his unpaid base
salary earned to the termination date, unpaid annual bonus accrued through the
date of termination, and unpaid guaranteed bonus prorated to date of
termination. Mr. Readmond is entitled to participate in the Company's Annual
Bonus Plan for Executives and Long-Term Incentive Plan. He is also entitled to
participate in the Company's 401(k) Plan, Stock Incentive Plan and any other
employee benefits provided to senior executives.

The Company has extended to Mr. Readmond an interest-bearing loan in
the amount of $2,787,500 with which he purchased 1,561,000 shares of common
stock by exercising all vested and unvested options, other than incentive stock
options, previously held by him. In the event Mr. Readmond ceases to be employed
by the Company, any unvested shares Mr. Readmond purchased can be repurchased by
the Company at $1.43 per share. He is personally liable for all interest due on
the loan and is similarly liable for up to one-half of the principal amount of
the loan. This loan is secured by the shares he purchased. Mr. Readmond's loan
becomes due and payable on March 31, 2003 or earlier if his employment
terminates or if he disposes of the shares.

Mr. Readmond is also a party to the Company's Employee Non-Disclosure,
Non-Competition and Assignment of Inventions Agreement. Mr. Readmond has agreed
not to reveal any confidential information belonging to the Company, except as
may be required in the course of performing his duties as the Company's
employee. He has also agreed to assign to the Company any rights which he may
have with respect to inventions, software programs, data, or other developments
created or discovered during his employment term. Mr. Readmond agrees that while
he is employed by the Company and for one year after his termination, he will
not compete with any of its businesses or solicit any of the Company's
employees, customers or suppliers.

JONATHAN COHEN. Mr. Cohen's employment agreement with the Company
expires on February 3, 2001. Under the agreement, Mr. Cohen is entitled to a
minimum annual base salary of $250,000. He received a signing bonus of
$5,000,000 at the commencement of his employment.

18
<PAGE>

The Company has also granted Mr. Cohen options to purchase 700,000 shares of
common stock at $1.43 per share under the Stock Incentive Plan. Prior to
February 4, 2000, if Mr. Cohen had violated any portion of his
non-competition restrictions or prior to a sale of the Company his employment
had been terminated by the Company for "cause," death, disability or by him
without "good reason," Mr. Cohen would have been required to pay the Company
an amount equal to the product of $2.5 million and a fraction, the numerator
of which is the number of days remaining under the terms of his employment
agreement and the denominator of which is 730. Pursuant to an amendment to
his employment agreement dated February 4, 2000, Mr. Cohen is no longer
obligated to repay this amount if his employment is terminated. Mr. Cohen is
entitled to participate in the Company's Investment Banking Bonus Pool and
Long-Term Incentive Plan. He is also entitled to participate in the Company's
401(k) Plan, Stock Incentive Plan and any other employee benefits provided to
senior executives.

Mr. Cohen has agreed, while employed by the Company, not to own,
manage, operate, join, control or participate in the ownership, management,
operation or control of, or be connected as a director, officer, employee, or
lender with, or be compensated by any entity that is an NASD registered
broker-dealer. He will be permitted to posses up to 4.9% interest in a publicly
traded entity. Mr. Cohen may not use, disclose, or authorize any use or
disclosure of any confidential information, other than information that is
publicly known to him prior to his employment with the Company, information
required to be disclosed in a legal proceeding, or information the disclosure of
which is necessary to protect his rights in any proceeding in which the Company
is involved.

MARK LOEHR. Mr. Loehr's employment agreement with the Company expires
on March 7, 2002, unless either party elects to terminate the agreement earlier
upon 90 days' notice. Under the agreement, Mr. Loehr is entitled to a minimum
annual base salary of $200,000, subject to annual increases by the Board. If his
employment is terminated by the Company without "cause," (specifically
excluding, however, a termination due to his death or disability) or by him for
"good reason," the Company will continue to pay him his base salary through the
end of the contractual employment period. Additionally, he will be entitled to
his share of the unpaid investment banking bonus pool accrued through the date
of termination. However, if his employment is terminated by the Company for
"cause," by him without "good reason" or if he dies or becomes disabled, the
Company must pay him a lump sum cash payment equal to the sum of his unpaid base
salary earned to the termination date and unpaid investment banking bonus pool
accrued through the date of termination. Mr. Loehr is entitled to participate in
the Company's Investment Banking Bonus Pool and Long-Term Incentive Plan. He is
also entitled to participate in the Company's 401(k) Plan, the Stock Incentive
Plan and any other employee benefits provided to senior executives.

The Company has extended to Mr. Loehr an interest-bearing loan in the
amount of $1,875,000 with which he purchased 875,000 shares of common stock at
$2.14 per share. He is personally liable for all interest due on the loan and is
similarly liable for one-half of the principal amounts of the loan. This loan is
secured by the shares he purchased. In the event that Mr. Loehr violates his
non-competition agreement or ceases to be employed by the Company, the Company
has the right to repurchase his unvested shares at the lower of their fair
market value or $2.14 per

19
<PAGE>

share. If Mr. Loehr's employment is terminated by the Company without "cause,"
or by him for "good reason," or if he dies or is disabled, the Company will not
have the right to repurchase these shares. A total of 218,750 shares will vest
as of March 31, 2000 and the remainder will vest at the rate of 54,688 shares
per quarter until March 31, 2003. In addition, Mr. Loehr's loan becomes due and
payable if his employment terminates or if he disposes of the shares. Mr. Loehr
also has "piggyback" and demand registration rights relating to the shares.

Mr. Loehr is also a party to the Company's Employee Non-Disclosure,
Non-Competition and Assignment of Inventions Agreement. He has agreed not to
reveal any confidential information belonging to the Company, except as may be
required in the course of performing his duties as the Company's employee. He
has also agreed to assign to the Company any rights which he may have with
respect to inventions, software programs, data or other developments created or
discovered during his employment term. Mr. Loehr agrees that while he is
employed by the Company and for one year after his termination, he will not
compete with any of its businesses or solicit any of the Company's employees,
customers or suppliers.

LLOYD H. FELLER. Mr. Feller's employment agreement with the Company
expires on April 14, 2002, unless either party agrees to terminate the agreement
earlier upon 90 days' notice. Under the agreement, Mr. Feller is entitled to a
minimum annual base salary of $240,000, subject to annual increases by the Board
and an annual guaranteed bonus of $480,000 for 1999 and $720,000 for 2000 and
2001. If Mr. Feller's employment is terminated by the Company without "cause" or
by him for "good reason," the Company must pay him a lump sum equal to his
unpaid base salary through the end of his contractual employment period, unpaid
annual bonus amounts accrued through the date of termination, and unpaid
guaranteed bonus amount prorated through the date of termination plus fifty
percent his unpaid guaranteed bonus for the period commencing with the date of
termination through the end of the employment period. If his employment is
terminated by the Company for "cause," by him without "good reason" or if he
dies or becomes disabled, the Company must only pay him a lump sum equal to his
unpaid base salary earned to the termination date, unpaid annual bonus accrued
through the date of termination, and unpaid guaranteed bonus prorated to date of
termination. Mr. Feller is entitled to participate in the Company's Annual Bonus
Pool for Executives and Long-Term Incentive Plan. He is also entitled to
participate in the Company's 401(k) Plan, the Stock Incentive Plan and any other
employee benefits provided to senior executives.

The Company has extended to Mr. Feller an interest-bearing loan in the
amount of $975,000 with which he purchased 455,000 shares of common stock at
$2.14 per share. He is personally liable for all interest due on his loan and is
similarly liable for one-half of the principal amounts of his loan. This loan is
secured by the shares he purchased. In the event Mr. Feller violates his
non-competition restrictions or ceases to be employed by the Company (except for
termination without "cause" or for "good reason"), the Company has the right to
repurchase his unvested shares at the lower of their fair market value or $2.14
per share. If Mr. Feller's employment is terminated by the Company without
"cause" or by him for "good reason," or if he dies or is disabled, the Company
will not have the right to repurchase these shares. A total of 113,750 shares
will vest as of March 31, 2000 and the remainder will vest at the rate of 28,438
shares per quarter until March 31, 2003. In addition,

20
<PAGE>

Mr. Feller's loan becomes due and payable if his employment terminates or if he
disposes of the shares. Mr. Feller also has "piggyback" and demand registration
rights relating to the shares.

Mr. Feller is also a party to the Company's Employee Non-Disclosure,
Non-Competition and Assignment of Inventions Agreement. He has agreed not to
reveal any confidential information belonging to the Company, except as may be
required in the course of performing his duties as the Company's employee. He
has also agreed to assign to the Company any rights which he may have with
respect to inventions, software programs, data or other developments created or
discovered during his employment term. Mr. Feller agrees that while he is
employed by the Company and for one year after his termination, he will not
compete with any of its businesses or solicit any of the Company's employees,
customers or suppliers.

ROBERT C. MENDELSON. Mr. Mendelson's employment agreement with the
Company expires on April 14, 2002, unless either party agrees to terminate the
agreement earlier upon 90 days' notice. Under the agreement, Mr. Mendelson is
entitled to a minimum annual base salary of $240,000, subject to annual
increases by the Board and an annual guaranteed bonus of $480,000 for 1999 and
$720,000 for 2000 and 2001. If Mr. Mendelson's employment is terminated by the
Company without "cause" or by him for "good reason," the Company must pay him a
lump sum equal to his unpaid base salary through the end of his contractual
employment period, unpaid annual bonus amounts accrued through the date of
termination, and unpaid guaranteed bonus amount prorated through the date of
termination plus fifty percent his unpaid guaranteed bonus for the period
commencing with the date of termination through the end of the employment
period. If his employment is terminated by the Company for "cause," by him
without "good reason" or if he dies or becomes disabled, the Company must only
pay him a lump sum equal to his unpaid base salary earned to the termination
date, unpaid annual bonus accrued through the date of termination, and unpaid
guaranteed bonus prorated to date of termination. Mr. Mendelson is entitled to
participate in the Company's Annual Bonus Pool for Executives and Long-Term
Incentive Plan. He is also entitled to participate in the Company's 401(k) Plan,
the Stock Incentive Plan and any other employee benefits provided to senior
executives.

The Company has extended to Mr. Mendelson an interest-bearing loan
in the amount of $975,000 with which he purchased 455,000 shares of common
stock at $2.14 per share. He is personally liable for all interest due on the
loan and is similarly liable for one-half of the principal amounts of the
loan. This loan is secured by the shares he purchased. In the event Mr.
Mendelson violates his non-competition restrictions or ceases to be employed
by the Company (except for termination without "cause" or for "good reason"),
the Company has the right to repurchase his unvested shares at the lower of
their fair market value or $2.14 per share. If Mr. Mendelson's employment is
terminated by the Company without "cause," or by him for "good reason," or if
he dies or is disabled, the Company will not have the right to repurchase
these shares. A total of 113,750 shares will vest as of March 31, 2000 and
the remainder at the rate of 28,438 shares per quarter until March 31, 2003.
In addition, Mr. Mendelson's loan becomes due and payable if his employment
terminates or if he disposes of the shares. Mr. Mendelson also has
"piggyback" and demand registration rights relating to the shares.

21
<PAGE>

Mr. Mendelson is also a party to the Company's Employee Non-Disclosure,
Non-Competition and Assignment of Inventions Agreement. He has agreed not to
reveal any confidential information belonging to the Company, except as may be
required in the course of performing his duties as the Company's employee. He
has also agreed to assign to the Company any rights which he may have with
respect to inventions, software programs, data or other developments created or
discovered during his employment term. Mr. Mendelson agrees that while he is
employed by the Company and for one year after his termination, he will not
compete with any of its businesses or solicit any of the Company's employees,
customers or suppliers.

MANAGEMENT BENEFIT PLANS

STOCK INCENTIVE PLAN

The Company has a Stock Incentive Plan which permits the Company to
grant stock and stock-based awards to the Company's employees, officers,
directors and consultants, including stock options, stock appreciation rights,
restricted and unrestricted stock, phantom stock awards, performance awards,
convertible debentures and other stock and cash awards. The purpose of the plan
is to promote the Company's long-term growth and profitability by providing the
people with incentives to improve stockholder value and contribute to the
Company's growth and financial success. The awards also enable the Company to
attract, retain and reward the best available people for positions of
substantial responsibility.

Under the Stock Incentive Plan, the Company is authorized to issue up
to 27,350,000 shares of common stock. As of March 31, 2000, a total of ___
current and former employees and consultants hold options to purchase _________
shares of the Company's common stock under the Stock Incentive Plan, of which
the options are vested with respect to_________ shares. As of March 31, 2000, a
total of ___ current and former employees and consultants hold ___ shares of
common stock as a result of restricted stock awards, granted under the Company's
Stock Incentive Plan, from the Company's retention pool.

As part of the Company's merger with SoundView Technology Group Inc. on
January 31, 2000, the Company adopted SoundView's Stock Option Plan, although no
additional options to purchase will be granted under SoundView's Plan. As of
March 31, 2000, options to purchase _______ shares of the Company's common
stock, originally granted as options to purchase SoundView's common stock, were
outstanding and held by a total of ____ persons who became employees of the
Company following the merger or were formerly employees or consultants of
SoundView.

A subcommittee of the compensation committee of the Board of Directors
administers the Stock Incentive Plan. The subcommittee has authority to take all
actions necessary to carry out the purpose of the plan, including the authority
to select the participants, to determine the sizes and types of the awards to
grant, to establish the terms and conditions of the awards, and to modify
outstanding awards.

22
<PAGE>

ANNUAL BONUS PLANS

The Company has an annual bonus plan for its executives. Under the plan
performance-based bonuses are awarded to executive officers and key executives
as incentives for the participants to contribute to the Company's growth and
profitability. The compensation committee of the Board administers the plan.
Each year, the committee determines the amount of the bonus pool from which the
bonuses will be paid. The bonus pool is determined based on a formula adopted by
the committee and takes into account one or more of the following measures of
the Company's financial performance: (a) pre-tax or after-tax return on equity;
(b) earnings per share; (c) pre-tax or after-tax net income; (d) pre-tax
operating income; (e) net revenues; (f) profits before taxes; (g) book value per
share; (h) market price per share and (i) earnings available to common
stockholders. The committee determines the percentage of the bonus pool payable
to each participant, subject to adjustment based on achievement of individual,
group or corporate performance goals. The Company will pay the bonuses in cash,
stock or stock-based awards under the Stock Incentive Plan, or in any
combination of these methods. Subject to the terms of the deferred compensation
plan, a participant may elect to defer payment of his bonus and receive the
payment under the deferred compensation plan.

During 1999, the Company also had an annual bonus plan for the
investment banking group to foster the same motivation among the Company's
investment bankers and analysts and to contribute to the Company's
profitability. The bonuses under this plan were paid periodically from a bonus
pool that consists of 32% of the revenue generated by the investment banking
group. A committee, appointed by the Board, selected the participants each year
and determined the formula for allocating the bonus pool among them. Based on a
participant's performance and any other factors identified by the committee, a
participant's bonus could be increased or decreased by up to 20%. The Company
paid the bonuses in cash, securities given to the Company as compensation in
transactions in which the investment banking group had participated, stock or
stock-based awards under the Stock Incentive Plan, or any combination of these
methods. Subject to the terms of the Company's deferred compensation plan, a
participant could elect to defer payment of his or her bonus and receive the
payment under the deferred compensation plan. A portion of the annual bonus plan
for the investment banking group pool could be allocated to the annual bonus
plan for executives.

LONG-TERM INCENTIVE PLAN

The Company has adopted a long-term incentive plan to attract and
retain employees who contribute to the Company's continued growth, development
and financial success. The compensation committee of the Board will administer
the plan and will select the executives and key employees who participate in the
plan. The plan provides for the payment of performance awards if certain
objective performance goals are met over a three-year performance period.
Performance goals and corresponding performance awards will be set by the
committee at the beginning of the three-year period and are based on one or more
of the following measures of the Company's financial performance: (a) net
revenue or income; (b) stock price; (c) return on equity;

23
<PAGE>

(d) earnings per share; (e) profits before taxes; (f) operating income and (g)
any other factors identified by the committee. The committee may adjust the
amount of performance award payable to any participant based on additional
factors such as individual performance and contributions to the Company's
success. Performance awards are payable only to participants who are employed by
the Company at the end of the three-year performance period. Performance awards
will be paid in cash, stock, or a combination of these methods. Subject to the
terms of the Company's deferred compensation plan, a participant may elect to
defer payment of a performance award and receive the payment under the deferred
compensation plan. The Company has not yet implemented the long-term incentive
plan.

DEFERRED COMPENSATION PLAN

The Company has adopted a deferred compensation plan for the employees
participating in the three bonus plans (the long-term incentive plan, the annual
bonus plan for executives and the annual bonus plan for the investment banking
group). Participation in the deferred compensation plan will be limited to those
bonus plan participants who would represent a "select group of management and
highly compensated employees" under applicable federal law governing employee
benefit plans. The plan permits the participants to make annual elections to
defer all or a portion of the bonuses they might earn under the bonus plans. The
deferred amounts will be credited to the participants' accounts, which will not
hold assets but be maintained only for the purpose of recordkeeping. The cash
bonuses deferred under the plan will be credited with gains and losses as if
they were actually invested in the investment alternatives selected by the
participants from a menu available under the plan. The deferred bonuses based on
shares of the Company's common stock will be credited with gains and losses
based on the value of the stock and stock dividends. If there are cash dividends
and distributions on the shares credited to the accounts, these amounts will be
credited with earnings at a fixed annual percentage rate. The participants'
interests in their accounts will be vested and not forfeitable. Each account
will be paid out at the time and in the manner and form as selected by the
participant from a menu of alternatives available under the plan. The Company
has not yet implemented this plan.

401(K) PLAN

The Company maintains a 401(k) retirement savings plan. All employees
meeting certain minimum eligibility requirements are eligible to participate in
the 401(k) plan. Under the 401(k) plan, an employee may contribute up to 15% of
his or her pre-tax gross compensation. The contribution cannot exceed a
statutorily prescribed annual limit. Although not required, the 401(k) plan
permits the Company to make additional contributions to the plan. The amounts
contributed by the employees fully vest at the time of contribution. The Company
did not contribute to the 401(k) plan in 1997, 1998 or 1999.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

The Company believes that, during 1999, all filing requirements under
Section 16(a) of the

24
<PAGE>

Securities Exchange Act of 1934, as amended, applicable to its officers,
directors and greater than ten percent Stockholders were complied with on a
timely basis, except that one director of the Company, Gilbert C. Maurer, as of
June 4, 1999 filed his Form 3 25 days late due to his absence on an extended
foreign trip.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

For 1999, the Compensation Committee performed the functions of a board
compensation committee.

During 1999, the compensation committee of the Board of Directors
consisted of John H.N. Fisher, Steven M. Gluckstern, Gilbert C. Maurer and the
Company's Co-Chief Executive Officer and President, Ronald Readmond.

25
<PAGE>

THE FOLLOWING REPORT OF THE COMPENSATION COMMITTEE AND THE PERFORMANCE
GRAPH THAT APPEARS IMMEDIATELY AFTER SUCH REPORT SHOULD NOT BE DEEMED TO BE
SOLICITING MATERIAL OR TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934 OR
INCORPORATED BY REFERENCE IN ANY DOCUMENT SO FILED.

REPORT OF THE COMPENSATION COMMITTEE

The compensation committee of the Board of Directors is composed of
Ronald Readmond, the Company's co-chief executive officer and president and
three non-employee directors, John H.N. Fisher, Steven M. Gluckstern and
Gilbert C. Maurer.

The compensation committee is responsible for reviewing and approving
all compensation of the Company's executive officers. The compensation committee
reviews the compensation of the Company's executive officers on an ongoing basis
and develops plans that are designed to support arrangements for the Company's
business strategies, reflect the competitive environment in which it competes,
and provide cost and tax-effective forms of remuneration.

TOTAL COMPENSATION STRATEGY

OVERVIEW

The Company believes strongly in pay-for-performance and has developed
compensation policies to reflect this:

o To attract and retain the best qualified and most talented executives
available to lead the Company in the creation of stockholder value,

o To motivate and reward annual and long-term results achieved for
stockholders based on corporate, business unit and individual
performance,

o To align management's interests with stockholders, by increasing
executive ownership of the Company's common stock, and

o To pay competitive salaries as measured against other companies in the
industry.

In implementing these policies, the compensation committee has taken a total
compensation approach. The three elements of total compensation for executive
officers are base salary, cash bonus and stock options. The compensation
committee has devised a compensation mix of cash and stock that provides
executive officers with a powerful incentive to achieve the Company's strategic
objectives and to maximize long-term shareholder value.

BASE SALARIES

This is the only fixed portion of the executive officer's annual
compensation. All other compensation components are at risk and based on
performance, except for those executive officers

26
<PAGE>

with a guaranteed minimum bonus. Executive officer base salaries will be
reviewed periodically based on factors determined by the compensation committee
at the time of review.

ANNUAL CASH INCENTIVE COMPENSATION

Annual cash incentives are based on annual revenues and operating
income improvement so that significant focus is on Company growth and on
profitability.

APPROVAL PROCESS

Consistent with the Company's policies, the compensation committee
assesses the performance of the co-chief executive officers and all other
executive officers and recommends the annual cash incentive amounts and stock
option awards for these individuals to the Board of Directors for approval.

The compensation committee retains the discretion to adjust awards for
each executive officer based on an assessment of each executive's performance.
As part of this assessment, the compensation committee considers various
quantitative as well as qualitative factors without assigning specific
quantifiable or relative weights. Performance factors taken into consideration
include, but are not limited to, strategic planning, quality of client service,
market share, corporate reputation, financial results, compliance and risk
control, management development, workforce diversity, technology and innovation.

COMPETITIVE BENCHMARKING

The compensation committee evaluates performance and progress relative
to the achievement of strategic business objectives, year-over-year results, and
results over multiple years. Further, the compensation committee will assess
when the external economic and business conditions may produce results that are
unrelated to management performance. As part of this evaluation, the
compensation committee also considers competitive performance and pay levels
based on a peer group of financial services and Internet companies selected and
surveyed by Towers Perrin, a third-party compensation consulting firm. This peer
group represents the marketplace in which the Company competes for talent and is
comprised of twenty-eight publicly owned companies. The compensation committee's
philosophy is to position the Company's compensation between the median and the
75th percentile of the peer group based upon performance, with the opportunity
for total compensation and individual compensation to rise above this level upon
achievement of exceptional results.

1999 COMPENSATION PLANS

Based on the above assessment, executive officer compensation,
including that of Mr. Readmond, is determined and administered by the
compensation committee on the basis of total compensation. Therefore, the total
compensation program established by the compensation

27
<PAGE>

committee is comprehensive and integrates all components including salary,
annual cash, and stock option awards.

SALARY

Salaries are reviewed periodically by the compensation committee for
appropriateness and adjusted periodically in its judgment, based primarily on
each individual executive officer's performance and responsibility level as well
as competitive salary levels for similar positions at peer companies. The
salaries of several executive officers were increased from 1998 levels.

AWARDS UNDER ANNUAL BONUS PLAN

Under the Annual Bonus Plan, bonuses are paid to executive officers and
key executives as an incentive for the executives to contribute to the Company's
growth and profitability. Each year, the compensation committee determines the
amount of the bonus pool from which the bonuses will be paid. The bonus pool is
determined based on a formula, as adopted at the compensation committee's
discretion, which takes into account one or more of the following measures of
our financial performance: (a) pre-tax or after-tax return on equity; (b)
earnings per share; (c) pre-tax or after-tax net income; (d) pre-tax operating
income; (e) net revenues; (f) profits before taxes; (g) book value per share;
(h) market price per share and (i) earnings available to common stockholders.
The compensation committee determines the percentage of the bonus pool payable
to each executive, subject to adjustment based on achievement of individual,
group or corporate performance goals.

STOCK INCENTIVE PLAN

A subcommittee of the compensation committee, comprised of the
non-employee members of the compensation committee, made stock option grants
under the Stock Incentive Plan to executive officers to continue to link a major
portion of executive officers' compensation and financial interests to the
performance of the Company's common stock. The size of such annual grants
reflects the subcommittee's judgment as to the individual executive officer's
current and future role in the Company's growth and profitability of its
business units and to the creation of long-term shareholder value.

CO-CHIEF EXECUTIVE OFFICER COMPENSATION

The same criteria described above is applied in assessing the
performance and determining the compensation of the co-chief executive officers,
who participate in the Company's compensation plans on the same basis as all
other executive officers.

The compensation committee, in setting their compensation, has taken
into account that 1999 was the Company's first year as a publicly held company.
Factors considered by the compensation committee include the Company's initial
public offering, the rapid growth in the number of clients and customers, and
the successful negotiations in connection with the merger with SoundView

28
<PAGE>

Technology Group. The compensation committee believes that the Company has
performed exceptionally well and is well positioned with high potential for
future growth and profitability.

In 1999, Mr. Readmond's salary was increased to $250,000 from $200,000
in 1998. He also received an annual cash incentive award of $600,000 in 1999. He
received no cash incentive award in 1998. In 1999, Mr. Readmond received an
annual stock option grant of 200,000 shares. He received options to purchase
1,750,000 shares upon joining the Company in 1998.

On March 1, 1999, Mr. Lessin began receiving $250,000 base salary from
the Company. Prior to April 1, 1999, Mr. Lessin received 50% of fees generated
on advisory agreements brought to the Company which totaled $774,741 for 1999
and $135,685 for 1998. In 1999 he also received an annual cash incentive award
of $600,000 and an annual stock option grant of 200,000 shares.

TAX CONSIDERATIONS

As noted above, the compensation committee's compensation strategy is
to be cost and tax effective. Therefore, the compensation committee's policy is
to preserve corporate tax deductions, while maintaining the flexibility to
approve compensation arrangements that it deems to be in the best interests of
the Company and its stockholders, but that may not always qualify for full tax
deductibility.

WIT CAPITAL GROUP, INC.

John H.N. Fisher
Steven M. Gluckstern
Gilbert C. Maurer
Ronald Readmond

29
<PAGE>

PERFORMANCE ANALYSIS

The following performance graph compares the cumulative total returns
of the Company, the Standard & Poor's 500 Composite Stock Price Index (S&P 500)
and the Bloomberg US Internet Financial Services Index for the period June 3,
1999 through December 31, 1999. The Bloomberg US Internet Financial Services
Index consists of Ameritrade, DLJ Direct, E-Trade, E-Loan, Knight-Trimark,
Lending Tree, Mortgage.com, NDB, Netbank, Next Card, Schwab, TD Waterhouse,
Webstreet and the Company.

[GRAPH]

[TO COME]

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<PAGE>

STOCK OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS

The following table sets forth in alphabetical order the beneficial
ownership of the Company's voting stock as of February 29, 2000 by: (a) each
person or entity the Company knows beneficially owns 5% or more of its voting
stock; (b) the Company's co-chief executive officers and the other four most
highly compensated executive officers as of December 31, 1999; (c) each of the
Company's directors; and (d) all the Company's current directors and executive
officers as a group. The following percentage information is calculated based on
75,964,719 shares of common stock outstanding, excluding the 11,666,666 shares
of non-voting Class B common stock held by Goldman Sachs.

<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OF VOTING
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) STOCKS BENEFICIALLY OWNED
- --------------------------------------------------- -------------------- -------------------------
<S> <C> <C>
Capital Z Financial Services Fund II, L.P.......... 11,666,666 15.4%
One Chase Manhattan Plaza, 44th Floor
New York, NY 10005
Jonathan Cohen(2).................................. 110,000 *
Russell D. Crabs (3)............................... 1,871,827 2.5%
Draper Fisher Jurveston............................ 2,987,525 3.9%
400 Seaport Court
Redwood City, CA 94063
Lloyd H. Feller(4)................................. 493,125 *
John H.N. Fisher(5)................................ 71,422 *
400 Seaport Court Redwood City, CA 94063
Edward H. Fleischman(6)............................ 38,646 *
Steven Gluckstern(7)............................... -- --
One Chase Manhattan Plaza, 44th Floor
New York, NY 10005
Joseph R. Hardiman(6).............................. 50,313 *
Andrew D. Klein.................................... 4,354,537 5.7%
Robert H. Lessin(8)................................ 4,754,365 6.3%
Mark Loehr(9)...................................... 881,250 1.2%
Gilbert C. Maurer(6)............................... 15,313 *
Robert C. Mendelson(4)............................. 493,125 *
Adam Mizel(7)...................................... -- --
One Chase Manhattan Plaza, 44th Floor
New York, NY 10005
Ronald Readmond(10)................................ 1,822,000 2.4%
All executive officers and directors as a group 15,639,878 20.6%
(20 persons)(11)...................................
</TABLE>

- ----------
* Less than 1%.

31
<PAGE>

(1) Beneficial ownership is determined in accordance with the rules of the
SEC. In general, a person who has voting power and/or investment power
with respect to securities is treated as a beneficial owner of those
securities. For purposes of this table, shares subject to options,
warrants or rights currently exercisable or exercisable within 60 days
of February 29, 2000 are considered as beneficially owned by the person
holding such options, warrants or rights. Unless indicated otherwise,
the Company believes that the persons named in this table have sole
voting and investment power with respect to the shares shown.

(2) Includes 50,000 shares issuable upon exercise of options exercisable
within 60 days. Also has an additional 575,000 options exercisable
after 60 days.

(3) Includes 237,120 shares issuable upon exercise of options exercisable
within 60 days. Also has an additional 409,752 options exercisable
after 60 days.

(4) Includes 11,875 shares issuable upon exercise of options exercisable
within 60 days. Also has an additional 151,875 options exercisable
after 60 days.

(5) Mr. Fisher is a managing director of Draper Fisher Jurvetson and
therefore may be deemed to beneficially own shares held by Draper
Fisher Jurvetson.

(6) Includes 3,281 shares issuable upon exercise of options exercisable
within 60 days. Also has an additional 37,187 options exercisable after
60 days.

(7) General partner of Capital Z Partners and therefore may be deemed to
beneficially own shares held by Capital Z Financial Services Fund II,
L.P.

(8) In addition to his purchases from the Company, Mr. Lessin purchased
shares from two of the Company's stockholders. Includes 12,500 shares
issuable upon exercise of options exercisable within 60 days. Also has
an additional 187,500 options exercisable after 60 days.

(9) Includes 6,250 shares issuable upon exercise of options exercisable
within 60 days. Also has an additional 93,750 options exercisable after
60 days.

(10) Includes 30,000 shares issuable upon exercise of options exercisable
within 60 days. Also has an additional 310,000 options exercisable
after 60 days.

(11) If the Company includes shares beneficially owned by Capital Z
Financial Services Fund II, L.P. and Draper Fisher Jurvetson, each of
which has designated one or more members of the Board of Directors,
then the number of shares and percentages would be 30,294,069 and 40%.

32
<PAGE>

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Except as described below, none of the Company's directors, officers or
principal security holders has or has had a direct or indirect material interest
in any transaction to which the Company is or has been a party. The Company
believes that the terms of each of the transactions described below were no less
favorable to the Company than could have been obtained from unaffiliated third
parties. In addition, the Company will not enter into additional transactions
or agreements with directors, officers, principal security holders or other
affiliated parties unless the terms thereof are no less favorable to the Company
than could be obtained from unaffiliated third parties. In any event, the
Company will not enter into any transaction with directors, officers or
principal security holders without the affirmative vote of a majority of
disinterested directors.

LOANS TO OFFICERS

Messrs. Lessin, Loehr, Feller and Mendelson received loans from the
Company to purchase shares of common stock pursuant to their respective
employment agreements as described above under "Employment Agreements." In
addition, Messrs. Readmond, Lang and Lieberman accepted the Company's offer to
exercise all their vested and unvested stock options on April 30, 1999,
excluding incentive stock options. The shares they purchased by exercising these
options have not yet vested and can be repurchased by the Company, unless they
remain in the Company's employ through the respective periods when these options
would have vested. The individuals are personally liable for all interest due on
their loans and are similarly liable for one-half of the principal amounts of
their loans. Each loan is secured by the shares purchased with the proceeds of
the loan. Each loan becomes due and payable on March 31, 2003 or earlier, if the
individual's employment is terminated or he disposes of the shares. The number
of shares purchased by the individuals and the amounts loaned to them are set
forth in the table below.

NUMBER OF SHARES
ACQUIRED ON EXERCISE LOAN AMOUNT
-------------------- -----------

Robert H. Lessin............... 4,025,000 $5,750,000
Mark Loehr..................... 875,000 1,875,000
Lloyd H. Feller................ 455,000 975,000
Robert C. Mendelson............ 455,000 975,000
Ronald Readmond................ 1,561,000 2,787,500
Everett F. Lang................ 157,864 338,281
George M. Lieberman(1)......... 93,333 200,000

- ----------
(1) Effective upon Mr. Lieberman's termination of employment, the Company
repurchased his unvested shares and his loan, including interest thereon, was
paid in full.

33
<PAGE>

STOCK ISSUANCES TO EXECUTIVE OFFICERS, DIRECTORS AND
THE COMPANY'S LARGEST STOCKHOLDERS

The following table sets forth issuances of common stock to the
Company's largest stockholders, executive officers and directors since January
1, 1999. All purchases during April 1999 by officers were pursuant to the
exercise of their outstanding options.

STOCKHOLDER PRICE PER SHARE SHARE AMOUNTS ISSUANCE DATE
- ----------- --------------- ------------- -------------
<S> <C> <C> <C>
The Goldman Sachs Group, Inc.(1).... $2.14 11,666,666 April 8, 1999
Capital Z Partners(2)............... 2.14 11,666,666 February 23, 1999
Draper Fisher Jurvetson(3).......... 2.14 933,333 March 8, 1999
1.43 483,021 November 15, 1999
Ronald Readmond..................... 1.43 1,561,000 April 30, 1999
1.43 30,000 December 16, 1999
Mark Loehr.......................... 2.14 875,000 March 5, 1999
Lloyd H. Feller..................... 2.14 455,000 March 22, 1999
Robert C. Mendelson................. 2.14 455,000 March 22, 1999
M. Bernard Siegel................... 1.43 35,000 April 5, 1999
Everett F. Lang..................... 2.14 157,864 April 30, 1999
George M. Lieberman................. 2.14 93,333 April 30, 1999
2.14 17,500 April 14, 1999
Harry Silver........................ 17.125 40,000 August 4, 1999
Elizabeth Schimel................... 18.125 40,000 August 9, 1999
</TABLE>

- ----------
(1) The Goldman Sachs Group, Inc. owns 11,666,666 shares of non-voting
Class B common stock. It also owns warrants to purchase up to 5,637,295
shares of Class B common stock. In addition, Goldman Sachs has the
right to receive warrants to purchase an additional 153,247 shares of
Class B common stock in certain circumstances. All warrants issued to
Goldman Sachs become exercisable in October 2000.

(2) Steven Gluckstern, a director of the Company, and Adam Mizel, a
director of the Company who is not standing for reelection, are general
partners of Capital Z Partners.

(3) John H.N. Fisher, one of the Company's directors, is a Managing
Director of Draper Fisher Jurvetson.

VENTURE CAPITAL FUND MANAGEMENT

The Company established its Venture Capital Fund Group in October 1999
when several of the members of the management team of Dawntreader Fund I LP
joined the Company. The Venture Capital Fund Group currently manages Wit VC Fund
I LP (formerly called Arista Capital

34
<PAGE>

Partners, LP) and a series of four funds collectively known as Dawntreader Fund
II, LP. The Company derives revenue through management fees and sharing in
profits realized by the funds.

The Company owns one half of the profits interest of the general
partner in Wit VC Fund I LP with the other one half going to five individuals,
including Daniel DeWolf and three of the members of the management teams of
Dawntreader Fund I LLP that joined the Company.

When Wit VC Fund I LP was formed, the arrangements among the
Dawntreader group, Robert H. Lessin and the Company contemplated future funds in
which Mr. Lessin would have received a material portion of the general partner's
share of profits in future funds organized or sponsored by the Company. However,
when members of the Dawntreader management team joined the Company, those
arrangements were terminated.

Currently, the Company owns 35% of the profits interest of the general
partner in three of the Dawntreader Fund II partnerships. The fourth Dawntreader
Fund II partnership only permits investment by employees of the Company and its
subsidiaries and the Company has no profits interest in that fourth fund. The
remainder of the profits interest in the three Dawntreader Funds is shared among
the management team of our Venture Capital Fund Group including Daniel DeWolf,
Company employees who are on these funds' investment committee, including
Jonathan Cohen, and our chairman and co-CEO Robert H. Lessin, who has a 25%
profits interest.

INDEPENDENT ACCOUNTANTS

Arthur Andersen LLP audited the Company's financial statements for the
year ended December 31, 1999. As has been the prior practice, the Board of
Directors will appoint an auditor for the current fiscal year prior to the
commencement of the audit.

OTHER BUSINESS

It is not intended to bring before the Annual Meeting any matters
except the election of Directors and the two proposed amendments to the
Company's certificate of incorporation. The management is not aware at this time
that any other matters are to be presented for action. If, however, any other
matters properly come before the meeting, the persons named as proxies in the
enclosed form of proxy intend to vote in accordance with their judgment on the
matters presented.

PROVISION OF CERTAIN ADDITIONAL INFORMATION

The Company's Annual Report for year ended December 31, 1999 is being
furnished with this Proxy Statement.

35
<PAGE>

STOCKHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING

Proposals of stockholders intended to be presented at the Annual
Meeting of Stockholders in 2001 pursuant to Rule 14a-8 under the Securities
Exchange Act of 1934, as amended, must be received by the Company no later than
October 23, 2000 to be considered for inclusion in the Company's proxy materials
for that meeting. The proposal must be mailed to the Company's principal
executive offices at 826 Broadway, Seventh Floor, New York, New York 10003,
Attention: Secretary.

A stockholder that intends to present business at the 2001 annual
meeting other than pursuant to Rule 14a-8 must comply with the requirements set
forth in the Company's Bylaws. To bring business before an annual meeting, the
Company's Bylaws require, among other things, that the stockholder submit
written notice thereof complying with the Bylaws, to the Secretary of the
Company not less than 90 days nor more than 120 days prior to the anniversary of
the preceding year's annual meeting. Therefore, the Company must receive notice
of the stockholder proposal submitted other than pursuant to Rule 14a-8 no
sooner than ___________, 2000 and no later than ___________, 2001. If the notice
is received before _________, 2000 or after ____________, 2000, it will be
considered untimely and the Company will not be required to present such
proposal at the 2001 annual meeting.

By Order of the Board of Directors,

ROBERT C. MENDELSON
SECRETARY
New York, New York
____________, 2000

36
<PAGE>
EXHIBIT A

FROM THE

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

WIT CAPITAL GROUP, INC.

-------------------------------

FOURTH: Section 1. CAPITAL STOCK. The total number of shares of capital
stock which the Corporation shall have authority to issue is 605,000,000 shares,
consisting of (i) 500,000,000 shares of Common Stock, par value $0.01 per share
(the "COMMON STOCK"), (ii) 75,000,000 shares of Class B Common Stock, par value
$0.01 per share (the "CLASS B COMMON STOCK") AND (iii) 30,000,000 shares of
Preferred Stock, par value $0.001 per share (the "PREFERRED STOCK"). Shares of
any class of capital stock of the Corporation may be issued for such
consideration and for such corporate purposes as the Board of Directors of the
Corporation may from time to time determine.

The following is a statement of the designations and the powers,
preferences and rights, and the qualifications, limitations or restrictions
thereof, in respect of the Preferred Stock which the Board of Directors is
herein authorized to fix and the designations and the powers, preferences and
rights, and the qualifications, limitations or restrictions thereof, in respect
of the Common Stock AND the Class B Common Stock .

Section 3. COMMON STOCK .

(a) VOTING RIGHTS. Except as otherwise provided herein or as
otherwise required by law, the entire voting power and all voting rights shall
be vested exclusively in the Common Stock , the holders of which shall vote
together on all matters to be voted on by the stockholders of the Corporation.
Each outstanding share of Common Stock shall entitle the holder thereof to one
vote, in person or by proxy, on all matters submitted to a vote of the
stockholders of the Corporation.

[Deletions highlighted]

37
<PAGE>

WIT CAPITAL GROUP, INC.

Proxy for Annual Meeting of Stockholders June 1, 2000

The undersigned hereby appoints Lloyd H. Feller and Robert C. Mendelson as
Proxies, each with power to appoint his substitute, and hereby authorizes them,
to represent and vote, as designated on the reverse side of this card, all
shares of Common Stock of Wit Capital Group, Inc. (the "Company"), held of
record by the undersigned on April 7, 2000, at the Annual Meeting of
Stockholders (the "Annual Meeting"), to be held on June 1, 2000 or any
postponement or adjournment thereof.

1. Election of Directors.

Nominees (term expiring in 2003): Joseph R. Hardiman
Andrew D. Klein

[ ] FOR
[ ] WITHHOLD AUTHORITY to vote for all nominees listed above
[ ] FOR all nominees listed (except as marked to the contrary below)

2. Approval of proposed amendment to change the name of the Company.

[ ] FOR
[ ] ABSTAIN
[ ] AGAINST

3. Approval of proposed amendment to eliminate the Class C common stock.

[ ] FOR
[ ] ABSTAIN
[ ] AGAINST

4. In their discretion, upon such other business as may properly come before
the Annual Meeting or any postponement or adjournment thereof.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY WILL
BE VOTED AS DIRECTED. IN THE ABSENCE OF DIRECTION, THIS PROXY WILL BE VOTED
FOR THE BOARD OF DIRECTORS' TWO NOMINEES FOR ELECTION.

STOCKHOLDERS ARE URGED TO DATE, MARK, SIGN AND RETURN THIS PROXY PROMPTLY
IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED WITHIN THE
UNITED STATES.

SIGNATURES:_______________________________________ DATE: ________________, 2000
Note: Please sign exactly as name or names appears on stock certificate (as
indicated hereon).