MYPOINTS COM INC, S-4, 2000-06-23

MYPOINTS COM INC
S-4, 2000-06-23
COMPUTER PROGRAMMING, DATA PROCESSING, ETC.

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As submitted to the Securities and Exchange Commission on June , 2000
Registration No. 333-

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
Under
The Securities Act of 1933
---------------
MYPOINTS.COM, INC.
(Exact name of Registrant as specified in its charter)
---------------
Delaware 7311 94-3255692
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification Number)
incorporation or
organization)
100 California Street, 12th Floor
San Francisco, California 94133
(415) 676-3700
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
---------------
Steven M. Markowitz
Chief Executive Officer
MyPoints, Inc.
100 California Street, 12th Floor
San Francisco, California 94133
(415) 676-3700
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------
Copies to:
Michael J. Kennedy, Esq. John W. Campbell, Esq.
Torrey J. Miller, Esq. Mark W. Pearson, Esq.
Wilson Sonsini Goodrich & Rosati Morrison & Foerster, L.L.P.
Professional Corporation 425 Market Street
One Market, Spear Street Tower San Francisco, CA 94105
San Francisco, CA 94105 (415) 268-7000
(415) 947-2000
---------------
Approximate date of commencement of proposed sale to the public: Upon
consummation of the merger described herein.
If the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
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CALCULATION OF REGISTRATION FEE

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<TABLE>
<CAPTION>
Proposed Maximum
Proposed Maximum Aggregate
Title of Each Class of Amount to be Offering Price Offering Amount of
Securities to be Registered Registered(1) Per Share(2) Price(2) Registration Fee
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<S> <C> <C> <C> <C>
Common Stock $0.0001 par value....... 10,728,272 shares $8.0315 $86,164,116 $22,748
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</TABLE>
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(1) Represents the number of shares of the Common Stock of the Registrant which
may be issued to stockholders of Cybergold, Inc., a Delaware corporation,
pursuant to the transactions described herein.
(2) Pursuant to 457(f)(1) and (c) under the Securities Act of 1933, as amended,
the registration fee has been calculated based on the average of the high
and low prices per share of Cybergold, Inc.'s common stock on June 16, 2000
as reported on the Nasdaq National Market.

---------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

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<PAGE>

To Our Stockholders:

You are cordially invited to attend the special meeting of stockholders of
MyPoints.com, Inc. to be held at the offices of Wilson Sonsini Goodrich &
Rosati, One Market, Spear Street Tower, 33rd Floor, San Francisco, California
on August 3, 2000 at 10:00 a.m., Pacific time.

The proposal expected to be acted upon at the meeting relates to the
issuance of MyPoints shares of common stock in connection with a merger that
will cause Cybergold to become a wholly-owned subsidiary of MyPoints. The
proposal is described in detail in the attached notice of special meeting of
stockholders and proxy statement/prospectus.

In the merger, each share of Cybergold common stock will be exchanged for
0.480 shares of MyPoints common stock.

MyPoints common stock is traded on the Nasdaq National Market under the
symbol "MYPT," and on June 21, 2000, MyPoints common stock closed at $17.313
per share.

The merger cannot be completed unless the majority of holders of MyPoints
common stock present or represented by proxy at the stockholders' meeting
approve the merger and the issuance of the shares in connection with the
merger. Only stockholders who hold shares of MyPoints at the close of business
on June 23, 2000, will be entitled to vote at the special meeting.

After careful consideration, your board of directors has approved the merger
that will cause Cybergold to become a wholly-owned subsidiary of MyPoints, and
the transactions related thereto, and has determined it to be fair to and in
the best interests of MyPoints and its stockholders. Your board of directors
unanimously recommends a vote FOR the issuance of MyPoints shares in the merger
and FOR each of the other proposals on which you may vote.

This proxy statement/prospectus provides you with detailed information
concerning MyPoints, Cybergold and the merger. Please give all of the
information contained in the proxy statement/prospectus your careful attention.
In particular, you should carefully consider the discussion in the section
entitled "Risk Factors" on page 16 of this proxy statement/prospectus.

It is important that you use this opportunity to take part in the affairs of
MyPoints by voting on the business to come before this meeting. Whether or not
you expect to attend the meeting, please complete, date, sign and promptly
return the accompanying proxy in the enclosed postage paid envelope so that
your shares may be represented at the meeting. YOUR VOTE IS VERY IMPORTANT.
Returning the proxy does not deprive you of your right to attend the meeting
and to vote your shares in person.

Sincerely,

Steven M. Markowitz
Chief Executive Officer
<PAGE>

MyPoints.com, Inc.
100 California Street, 12th Floor
San Francisco, CA 94111
(415) 676-3700

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 3, 2000 at 10:00 a.m.

To Our Stockholders:

A special meeting of stockholders of MyPoints.com, Inc. will be held at the
offices of Wilson Sonsini Goodrich & Rosati, One Market, Spear Street Tower,
33rd Floor, San Francisco, California on August 3, 2000 at 10:00 a.m., Pacific
time, for the following purposes:

1. To approve the issuance of shares of MyPoints common stock in the
merger of a wholly owned subsidiary of MyPoints with and into Cybergold,
Inc. as contemplated by the Agreement and Plan of Reorganization and Merger
dated as of April 14, 2000, as amended by Amendment No. 1 thereto dated as
of June 20, 2000, among MyPoints, Mygo Acquisition Corporation and
Cybergold. The merger, if approved, would include the distribution of
Cybergold's Paytech business, which may occur before or after the merger.
MyPoints will issue 0.480 shares of its common stock in exchange for each
share of outstanding Cybergold common stock.

2. To transact any other business that properly comes before the special
meeting or any adjournments or postponements thereof.

The accompanying proxy statement/prospectus describes the proposed merger
and other proposals in more detail. We encourage you to read the entire
document carefully.

We have fixed the close of business on June 23, 2000 as the record date for
the determination of our stockholders entitled to vote at this meeting.

By Order of the Board of Directors of
MyPoints

Steven M. Markowitz
Chief Executive Officer

San Francisco, California
, 2000

To assure that your shares are represented at the meeting, please complete,
date and sign the enclosed proxy and mail it promptly in the postage-paid
envelope provided, whether or not you plan to attend the meeting. You can
revoke your proxy at any time before it is voted.

Neither the Securities and Exchange Commission nor any State Securities
Commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this proxy statement/ prospectus. Any representation to
the contrary is a criminal offense.

This proxy statement/prospectus is dated , 2000 and was first mailed to
stockholders on or about , 2000.
<PAGE>

To Our Stockholders:

Cybergold, Inc.'s board of directors has unanimously approved a merger which
will result in the acquisition of Cybergold by MyPoints.com, Inc., a publicly-
traded company headquartered in San Francisco, California.

In the merger, each share of Cybergold common stock will be exchanged for
0.480 shares of MyPoints common stock.

MyPoints common stock is traded on the Nasdaq National Market under the
symbol "MYPT," and on June 21, 2000, MyPoints common stock closed at $17.313
per share.

The merger cannot be completed unless the holders of a majority of Cybergold
common stock approve the merger agreement and the merger. Only stockholders who
hold shares of Cybergold at the close of business on June 23, 2000, will be
entitled to vote at the special meeting.

After careful consideration, your board of directors unanimously determined
the merger is in your best interests, unanimously approved the merger agreement
and unanimously recommends its adoption by you.

The special meeting of Cybergold stockholders will be held on August 3, 2000
at 10:00 a.m. Pacific time at Cybergold's principal executive offices at 1330
Broadway, 12th Floor, Oakland, California.

Please use this opportunity to take part in the affairs of Cybergold by
voting on the adoption of the merger agreement. Whether or not you plan to
attend the meeting, please complete, sign, date and return the accompanying
proxy in the enclosed self-addressed stamped envelope. Returning the proxy does
NOT deprive you of your right to attend the meeting and to vote your shares in
person. YOUR VOTE IS VERY IMPORTANT.

We appreciate your interest in Cybergold and consideration of this matter.

A. Nathaniel Goldhaber
President and Chief Executive
Officer
Cybergold, Inc.
<PAGE>

Cybergold, Inc.
1330 Broadway, 12th Floor
Oakland, California 94612
(510) 302-3000

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 3, 2000 AT 10:00 a.m.

To Our Stockholders:

NOTICE IS HEREBY GIVEN that the Special Meeting of Stockholders of
Cybergold, Inc. will be held on August 3, 2000, at 10:00 a.m., at Cybergold's
principal executive offices at 1330 Broadway, 12th Floor, Oakland, California,
to:

1. Consider and vote on the proposed merger of a wholly owned subsidiary
of MyPoints.com, Inc. with and into Cybergold which will cause Cybergold to
become a wholly owned subsidiary of MyPoints, as contemplated by the
Agreement and Plan of Reorganization and Merger dated as of April 14, 2000,
as amended by Amendment No. 1 thereto dated as of June 20, 2000, among
MyPoints, Mygo Acquisition Corporation and Cybergold. The merger, if
approved, would include the distribution of the Paytech business, which may
occur before or after the merger. In the merger, MyPoints will issue 0.480
shares of its common stock in exchange for each outstanding share of
Cybergold common stock.

2. Transact such other business as may properly come before the Special
Meeting or any adjournment thereof.

The accompanying proxy statement/prospectus describes the proposed merger in
more detail. You are encouraged to read the entire document carefully.

The board of directors has fixed the close of business on June 23, 2000, as
the record date for the determination of stockholders entitled to notice of,
and to vote at, the meeting.

By Order of the Board of Directors,

A. Nathaniel Goldhaber
President and Chief Executive
Officer

, 2000
Oakland, California

Regardless of whether you expect to be present at the meeting, please
complete, date and sign the enclosed proxy and return it in the envelope which
has been provided. In the event you are able to attend the meeting, you may
revoke your proxy and vote your shares in person.

Neither the Securities and Exchange Commission nor any State Securities
Commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this proxy statement/prospectus. Any representation to
the contrary is a criminal offense.

This proxy statement/prospectus is dated , 2000 and was first mailed
to stockholders on or about 2000.
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
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<S> <C>
QUESTIONS AND ANSWERS FOR MYPOINTS STOCKHOLDERS AND CYBERGOLD
STOCKHOLDERS............................................................. QA-1
SUMMARY OF THE PROXY STATEMENT/PROSPECTUS................................. 1
The Companies........................................................... 1
Summary of the Merger................................................... 2
SELECTED HISTORICAL FINANCIAL DATA........................................ 9
MyPoints's Selected Historical Financial Data........................... 9
Cybergold's Selected Historical Financial Data.......................... 11
Selected Unaudited Pro Forma Combined Financial Data.................... 13
Selected Comparative Historical And Unaudited Pro Forma Per Share Data.. 15
RISK FACTORS.............................................................. 16
THE MYPOINTS MEETING...................................................... 26
THE CYBERGOLD MEETING..................................................... 28
THE MERGER................................................................ 30
Background of the Merger and Related Agreements......................... 30
MyPoints's Reasons for the Merger....................................... 32
Recommendation of MyPoints's Board of Directors......................... 33
Cybergold's Reasons for the Merger...................................... 33
Recommendation of Cybergold's Board of Directors........................ 35
Opinion of MyPoints's Financial Advisor................................. 35
Opinion of Goldman, Sachs & Co., Financial Advisor to Cybergold......... 40
Other Considerations.................................................... 44
Interests of Certain Directors, Officers and Affiliates in the Merger... 45
Completion and Effectiveness of the Merger.............................. 46
Structure of the Merger and Conversion of Cybergold Common Stock........ 46
Paytech Disposition..................................................... 46
Exchange of Cybergold Stock Certificates for MyPoints Stock 47
Certificates...........................................................
No Dividends............................................................ 47
Material United States Federal Income Tax Considerations of the Merger.. 47
Material United States Federal Income Tax Consequences of the
Distribution of the
Paytech Business....................................................... 49
Accounting Treatment of the Merger...................................... 50
Regulatory Filings and Approvals Required to Complete the Merger........ 50
Restrictions on Sales of Shares by Affiliates........................... 50
No appraisal rights..................................................... 50
Listing on the Nasdaq Market of MyPoints Common Stock to be Issued in 51
the Merger.............................................................
Delisting and Deregistration of Cybergold Common Stock After the 51
Merger.................................................................
THE MERGER AGREEMENT...................................................... 52
Representations and Warranties.......................................... 52
Disposition of the Paytech Business..................................... 53
Cybergold's Conduct of Business Before Completion of the Merger......... 54
MyPoints's Conduct of Business Before Completion of the Merger.......... 54
No Other Negotiations Involving Cybergold; Solicitation By Cybergold.... 55
Cybergold's Employee Benefit Plans...................................... 57
Treatment of Cybergold Stock Options and Warrants....................... 57
Conditions to Completion of the Merger.................................. 57
Termination of the Merger Agreement..................................... 58
Payment of Termination Fees............................................. 59
Extension, Waiver and Amendment of the Merger Agreement................. 60
</TABLE>

i
<PAGE>

<TABLE>
<CAPTION>
Page
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<S> <C>
AGREEMENTS RELATED TO THE MERGER......................................... 61
Cybergold Stockholders' Voting Agreement............................... 61
Affiliate Agreements................................................... 61
Non-Competition Agreements............................................. 61
COMPARATIVE PER SHARE MARKET PRICE DATA.................................. 63
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS.............. 64
NOTES TO UNAUDITED CONDENSED COMBINED PRO FORMA FINANCIAL STATEMENTS..... 68
COMPARISON OF RIGHTS OF HOLDERS OF CYBERGOLD COMMON STOCK AND
MYPOINTS COMMON STOCK................................................... 69
CERTAIN INFORMATION REGARDING MYPOINTS................................... 78
MYPOINTS MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS................................................... 91
MYPOINTS MANAGEMENT...................................................... 101
MyPoints Related Party Transactions.................................... 112
CERTAIN INFORMATION REGARDING CYBERGOLD.................................. 115
CYBERGOLD MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS................................................... 126
EXECUTIVE OFFICERS AND DIRECTORS OF CYBERGOLD JOINING MYPOINTS........... 135
LEGAL OPINION............................................................ 147
EXPERTS.................................................................. 147
STOCKHOLDER PROPOSALS.................................................... 147
WHERE YOU CAN FIND MORE INFORMATION...................................... 148
INDEX TO FINANCIAL STATEMENTS............................................ F-1
REPORT OF MYPOINTS'S INDEPENDENT ACCOUNTANTS............................. F-2
REPORT OF CYBERGOLD'S INDEPENDENT ACCOUNTANTS............................ F-27
</TABLE>

<TABLE>
<C> <S>
ANNEX A The Merger Agreement and Amendment No. 1
ANNEX B Opinion of MyPoints Financial Advisor
ANNEX C Opinion of Cybergold Financial Advisor
</TABLE>

ii
<PAGE>

QUESTIONS AND ANSWERS FOR MYPOINTS STOCKHOLDERS AND CYBERGOLD STOCKHOLDERS

Q: What is the merger? (See page 30)

A: The board of directors of MyPoints and Cybergold have voted to merge a
wholly owned subsidiary of MyPoints with and into Cybergold, resulting in
Cybergold becoming a wholly owned subsidiary of MyPoints. After the
merger, the current stockholders of MyPoints will own approximately 73.5%
of MyPoints and the former stockholders of Cybergold will own
approximately 26.5% of MyPoints.

In connection with the merger, Cybergold intends to distribute its
Paytech business to its stockholders prior to the merger, with Cybergold
retaining 19.9% of the equity of the newly formed entity which holds the
Paytech business. In the event that the distribution occurs after the
merger, MyPoints will retain the 19.9% equity ownership interest in the
Paytech entity.

Q: When will the proposed distribution of the Paytech business occur?

A: If the stockholders of Cybergold and MyPoints do not vote to approve the
merger, or the merger is otherwise abandoned, the proposed distribution
will not occur.

If the stockholders of Cybergold and MyPoints do vote to approve the
merger, and the conditions to the merger are satisfied or waived, the
record date for the distribution will be set as of a date prior to the
merger. Cybergold or MyPoints will then distribute the Paytech business
as soon as practically possible.

Q: What will Cybergold stockholders receive in the merger?

A: When the merger is completed, holders of Cybergold common stock will
receive 0.480 shares of MyPoints common stock in exchange for each share
of Cybergold common stock. No fractional shares will be issued. Instead
of receiving a fractional share, Cybergold stockholders will receive cash
equal to the value of such fractional share which will be based on the
average closing prices as reported on Nasdaq of MyPoints common stock for
the five trading days ending on the last full trading day prior to the
effective date of the merger.

Holders of options or warrants to purchase shares of Cybergold common
stock will hold options or warrants, as appropriate, to purchase shares
of MyPoints common stock after completion of the merger, as adjusted for
the 0.480 exchange ratio.

Q: Does the board of directors of MyPoints recommend voting in favor of the
issuance of MyPoints shares in the merger?

A: Yes. After careful consideration, MyPoints's board of directors
unanimously recommends that its stockholders vote in favor of the
issuance of shares of MyPoints common stock to the stockholders of
Cybergold in the merger.

Q: Does the board of directors of Cybergold recommend voting in favor of the
merger?

A: Yes. After careful consideration, Cybergold's board of directors
unanimously recommends that its stockholders vote in favor of the merger
agreement and the proposed merger.

Q: Are there risks I should consider in deciding whether to vote for the
merger?

A: Yes. In evaluating the merger, you should carefully consider the factors
discussed in the section entitled "Risk Factors" on page 16.

Q: What do I need to do now?

A: Mail your signed proxy card in the enclosed return envelope as soon as
possible so that your shares may be represented at your meeting. If you
do not include instructions on how to vote your properly signed proxy,
your shares will be voted "FOR" approval of the merger.

Cybergold stockholders should not send the Cybergold stock certificates
at this time.

QA-1
<PAGE>

QUESTIONS AND ANSWERS FOR MYPOINTS STOCKHOLDERS AND CYBERGOLD STOCKHOLDERS

Q: If my shares are held in "street name" by my broker, will my broker vote my
shares for me?

A: Your broker will vote your shares only if you provide instructions on
how to vote by following the information provided to you by your broker.

Q: What do I do if I want to change my vote?

A: If you want to change your vote, send the secretary of MyPoints or
Cybergold, as relevant, a later-dated, signed proxy card before your
meeting or attend the meeting in person. You may also revoke your proxy
by sending written notice to the relevant secretary before the meeting.
If you have signed a stockholder voting agreement, you may not revoke
your proxy.

Q: As a Cybergold stockholder, should I send in my Cybergold stock
certificates now?

A: No. After the merger is completed, MyPoints will send you written
instructions for exchanging your Cybergold stock certificates for
MyPoints stock certificates.

Q: When do you expect the merger to be completed?

A: MyPoints and Cybergold are working toward completing the merger as
quickly as possible. We hope to complete the merger during the third
calendar quarter of 2000.

Q: Will I recognize an income tax gain or loss on the merger?

A: For both MyPoints stockholders and Cybergold stockholders, we expect
that if the merger is completed, you will not recognize gain or loss for
United States federal income tax purposes in connection with the merger,
except that Cybergold stockholders will recognize gain or loss with
respect to cash received instead of fractional shares.

The distribution of the Paytech business will be a taxable distribution
to Cybergold stockholders, taxable as a dividend to the extent of
Cybergold's current and accumulated earnings and profits. Cybergold does
not have accumulated earnings and profits and does not expect to have
current earnings and profits. However, under certain circumstances it is
possible that all or a portion of the distribution will be taxable as a
dividend. If the fair market value of the distribution exceeds
Cybergold's current and accumulated earnings and profits, the excess will
be treated first as a nontaxable return of capital which will reduce a
stockholder's tax basis in his or her Cybergold shares. To the extent the
distribution exceeds a stockholder's adjusted tax basis in his or her
Cybergold shares, such distribution will be treated as taxable gain from
the sale or exchange of property.

All Cybergold stockholders are urged to consult their own tax advisors to
determine their particular tax consequences.

Q: What constitutes a quorum at the stockholders' meetings?

A: A quorum is a majority of the outstanding shares entitled to vote which
are present or represented by proxy at the special meetings. A quorum
must exist for the transaction of business at the special meeting. If you
submit a properly executed proxy card, even if you abstain from voting,
your shares will be considered part of the quorum. Broker non-votes,
which are shares held by a broker or nominee that are represented at the
special meeting, but with respect to which the broker or nominee is not
empowered to vote on a proposal, are included in determining the presence
of a quorum.

Q: What vote is required to approve the proposals?

A: MyPoints stockholders: The proposal to be voted upon by the MyPoints
stockholders will require the approval of holders of a

QA-2
<PAGE>

QUESTIONS AND ANSWERS FOR MYPOINTS STOCKHOLDERS AND CYBERGOLD STOCKHOLDERS

majority of the shares of MyPoints common stock present or represented by
proxy at the stockholders' meeting. If you do not vote, your non-votes
will have the same effect as votes against approval of the merger.

Cybergold stockholders: Approval of the merger agreement requires the
affirmative vote of the holders of a majority of the outstanding shares
of Cybergold common stock. If you do not vote, your non-votes will have
the same effect as votes against approval of the merger.

Q: Am I entitled to dissenters' or appraisal rights?

A: No.

Q: Whom should I call with questions?

A: MyPoints stockholders should call Geoff Ossias at (415) 676-3700 with
any questions about the merger.

Cybergold stockholders should call Jack Krasner at (510) 302-3000 with
any questions about the merger.

QA-3
<PAGE>

SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

This proxy statement/prospectus pertains to the merger of a wholly owned
subsidiary of MyPoints with and into Cybergold, and is being sent to the
holders of common stock of both companies. This summary may not contain all of
the information that is important to you. You should read carefully this entire
document and the other documents referenced in it for a more complete
understanding of the merger. In particular, you should read the documents
attached to this proxy statement/prospectus, including the merger agreement,
which is attached as Annex A, the opinion of FleetBoston Robertson Stephens
Inc., which is attached as Annex B, and the opinion of Goldman Sachs & Co.,
which is attached as Annex C.

The Companies
<TABLE>

<S> <C>
MyPoints.com, Inc. Cybergold, Inc.
100 California Street, 12th Floor 1330 Broadway, 12th Floor
San Francisco, CA 94111 Oakland, CA 94612
(415) 676-3700 (510) 302-3000
http://www.mypoints.com http://www.cybergold.com

MyPoints is a leading provider of internet Cybergold is a leading provider of online
direct marketing services and customer direct marketing and advertising solutions.
loyalty infrastructure. Our database-driven It combines Internet-based direct marketing
direct marketing service, MyPoints, offers and advertising services with programs that
direct marketers an approach to internet reward consumers with cash when they perform
advertising that integrates targeted email actions desired by its advertising and
and web-based offers with incentives to marketing clients. These cash-based online
respond to those offers. Our rewards-based incentives programs are intended to provide
shopping channel, MyPoints Shopping!, flexible, incentive-marketing solutions for
provides web users with the ability to earn its clients. Cybergold offers its clients
points for every dollar spent at select customized, targeted advertising solutions
retail internet sites. Points earned in the designed to improve advertisement response
MyPoints program may be redeemed for a wide rates and reduce the cost of acquiring new
variety of products and services, such as customers.
gift certificates, travel awards and prepaid
phone cards. Our approach to direct The Paytech business is an on-line cash
marketing provides internet consumers with transaction system that enables the movement
the opportunity to earn rewards by of money among any combination of
responding to direct offers and by shopping, individuals, merchants and businesses. The
and provides businesses with an integrated system is capable of converting currencies
set of online customer acquisition and of any value on-line on a real-time basis.
retention tools. In addition, we build and Under the system, individuals or businesses
manage co-branded and private label online may open an account through the deposit of
customer loyalty programs for our loyalty cash via the system's connection to on-line
partners. banking and incentive award systems. Funds
in any account can be transferred between
MyPoints was incorporated in Delaware in accounts or to businesses who accept
November 1996 as Intellipost Corporation. payments through the Paytech system.

Cybergold was originally incorporated in
California under the name Cyber-Bucks, Inc.
in October 1994. Cybergold was
reincorporated as a Delaware Corporation in
August 1999 under the name Cybergold, Inc.

</TABLE>

1
<PAGE>

Summary of the Merger

The merger (see page 30)

In the merger, Cybergold will merge with a wholly-owned subsidiary of
MyPoints, called Mygo Acquisition Corporation. Cybergold will survive the
merger as a wholly owned subsidiary of MyPoints. Following the merger,
Cybergold common stockholders will be entitled to exchange each of their shares
for 0.480 shares of MyPoints common stock. In connection with the merger,
Cybergold intends to distribute its Paytech business to its stockholders prior
to the merger with Cybergold retaining 19.9% of the equity of the newly formed
entity which holds the Paytech business. In the event that the distribution
occurs after the merger, MyPoints will retain the 19.9% equity ownership
interest in the entity holding the Paytech business.

For more information about the Paytech business, please see the separate
prospectus relating to the distribution that will be mailed to Cybergold
stockholders as of a record date prior to the merger.

The merger agreement, as amended by Amendment No. 1 thereto dated as of June
20, 2000, is attached to this proxy statement/prospectus as Annex A. You are
encouraged to read it carefully. In this document when we refer to the merger
agreement, we mean the merger agreement as amended.

Conditions to completion of the merger (see page 56)

The completion of the merger depends upon satisfying a number of conditions
including the following, subject to exceptions and qualifications:

. The merger agreement and merger must be approved by the Cybergold
stockholders and the issuance of MyPoints common stock in the merger must
be approved by the MyPoints stockholders.

. The receipt of all necessary authorizations, orders, consents and
approvals of governmental entities.

. No injunction or order preventing the completion of the merger may be in
effect.

. MyPoints and Cybergold must each receive an opinion of tax counsel to the
effect that the merger will qualify as a transaction in which no gain or
loss will be recognized upon the receipt of MyPoints shares for United
States income tax purposes.

. The shares of MyPoints common stock to be issued in the merger must have
been approved for listing on Nasdaq, subject to notice of issuance.

MyPoints's and Cybergold's respective obligations to complete the merger are
subject to the satisfaction or waiver of the following:

. MyPoints's and Cybergold's respective representations and warranties in
the merger agreement must be true and correct in all material respects.

. MyPoints and Cybergold must have complied in all material respects with
their respective agreements and covenants in the merger agreement.

In addition, MyPoints's obligation to complete the merger is subject to the
satisfaction or waiver of a number of additional conditions including the
following:

. Each of Cybergold's affiliates must have entered into an affiliate
agreement in the form specified in the merger agreement.

. MyPoints must have received a noncompetition agreement in a form
specified in, and from each of the persons identified in, the merger
agreement.

. Cybergold must have obtained all consents, waivers and approvals required
as a result of the merger under the agreement identified in the merger
agreement.

If either MyPoints or Cybergold waives any conditions, we will each consider
the facts and circumstances at that time and make a determination whether a
resolicitation of proxies from its respective stockholders and stockholders is
appropriate.

2
<PAGE>

Vote required for approval

The holders of a majority of the shares of MyPoints common stock present or
represented by proxy at the stockholders' meeting with a proper quorum must
approve the issuance of MyPoints common stock in the merger. MyPoints
stockholders are entitled to cast one vote per share of MyPoints common stock
owned as of the record date.

The holders of a majority of the shares of Cybergold common stock
outstanding must approve the merger agreement and the merger. Cybergold
stockholders are entitled to cast one vote per share of Cybergold common stock
owned as of the record date. Cybergold stockholders who collectively held
approximately 44% of the outstanding common stock as of the record date,
including A. Nathaniel Goldhaber, the President and Chief Executive Officer of
Cybergold, have agreed to vote their shares of Cybergold common stock, in
favor of the merger agreement and the merger.

Reasons for the merger

MyPoints and Cybergold believe that the merger will provide the opportunity
to:

. provide a growth opportunity for the combined company, and help the
combined company achieve a leading market position;

. exploit the complimentary nature of the technological approaches of the
two companies; and

. enable the combined company to accelerate revenue growth and achievement
of profitability.

Termination of the merger agreement (see page 57)

The merger agreement may be terminated before completion:

. by the mutual written consent of MyPoints and Cybergold duly authorized
by each of MyPoints and Cybergold's boards of directors;

. by MyPoints or Cybergold, if the merger is not completed before
September 30, 2000, except that this right to terminate is not available
to any party whose action or failure to act has been a principal cause or
resulted in the failure of the merger to occur on or before September 30,
2000 and constitutes a breach of the agreement;

. by MyPoints or Cybergold, if a final court order or other governmental
decree or ruling enjoining, restraining or prohibiting the merger is
issued and not appealable;

. by MyPoints or Cybergold, if the required stockholder and stockholder
votes are not obtained except that this right to terminate is not
available to any party, if the failure to obtain the approval of such
party's stockholders is the basis for termination and such failure is
caused by the action or failure of such party and such action or failure
constitutes a breach of the agreement;

. by MyPoints or Cybergold, upon a breach of any representation, warranty,
covenant or agreement by the other party, or if any of the other party's
representations or warranties are or become untrue so that the
corresponding condition to completion of the merger would not be met,
unless the breach or inaccuracy is cured within thirty days after
delivery of written notice by the non-breaching party to the breaching
party; or

. by MyPoints, if (i) the board of directors of Cybergold or any committee
thereof shall for any reason have withdrawn or shall have amended or
modified in a manner adverse to parent its unanimous recommendation in
favor of the adoption and approval of the agreement or the approval of
the merger; (ii) Cybergold shall have failed to include in the proxy
statement/prospectus the unanimous recommendation of the board of
directors of Cybergold in favor of the adoption and approval of the
agreement and the approval of the merger; (iii) the board of directors of
Cybergold fails to reaffirm its unanimous recommendation in favor of the
adoption and approval of the agreement and the approval of the merger
within 5 business days after MyPoints requests in writing that such
recommendation be reaffirmed at any time following the announcement of an
acquisition proposal; (iv) the board of directors of
3
<PAGE>

Cybergold or any committee thereof shall have approved or recommended any
acquisition proposal; (v) Cybergold shall have entered into any letter of
intent or similar document or any agreement, contract or commitment
accepting any acquisition proposal; or (vi) a tender or exchange offer
relating to securities of Cybergold shall have been commenced by a person
unaffiliated with MyPoints and Cybergold shall not have sent to its
securityholders pursuant to Rule 14e-2 promulgated under the Securities
Act, within ten (10) business days after such tender or exchange offer is
first published, sent or given, a statement disclosing that Cybergold
recommends rejection of such tender or exchange offer.

As used herein, an acquisition proposal is any offer or proposal relating to
any acquisition transaction, other than an offer or proposal from MyPoints.

An acquisition transaction is any transaction or series of transactions,
other than the merger, involving any of the following:

. the acquisition or purchase from Cybergold of more than a 10% interest in
the total outstanding voting securities of Cybergold or any of its
subsidiaries;

. any tender offer or exchange offer that if consummated would result in
any person or group beneficially owning 10% or more of the total
outstanding voting securities of Cybergold or any of its subsidiaries;

. any merger, consolidation, business combination or similar transaction
involving Cybergold pursuant to which the stockholders of Cybergold
immediately preceding such transaction hold less than 90% of the equity
interests in the surviving or resulting entity;

. any sale, lease outside the ordinary course of business, exchange,
transfer, license outside the ordinary course of business, acquisition or
disposition of more than 5% of the assets of Cybergold; or

. any liquidation or dissolution of Cybergold.

Payment of termination fees

Cybergold will pay to MyPoints a termination fee of $7,850,000 and
reimbursement of reasonable expenses:

. if the merger agreement is terminated by MyPoints because:

- the board of directors of Cybergold withdraws, modifies or changes its
recommendation of the merger agreement or the merger in a manner adverse
to MyPoints or its stockholders,

- with the exception of limited circumstances with respect to a superior
offer, the board of directors of Cybergold shall have recommended to the
stockholders of Cybergold an acquisition proposal,

- Cybergold fails to comply with its agreement not to solicit an
acquisition proposal nor conduct other negotiations, or

- an acquisition proposal shall have been announced or otherwise become
publicly known and the board of directors of Cybergold shall have failed
to recommend against acceptance of such by its stockholders (including
by taking no position, or indicating its inability to take a position,
with respect to the acceptance by its stockholders of an acquisition
proposal involving a tender offer or exchange offer) or failed to
reconfirm its approval and recommendation of the merger agreement and
the transactions contemplated hereby, in each case within ten business
days thereafter;

. if between April 14, 2000 and the date of termination of the merger
agreement, a third party has announced an acquisition proposal and within
12 months following the termination of the merger agreement, an agreement
or letter of intent with respect to any company acquisition or any
company acquisition is consummated;

. upon a breach of any representation, warranty, covenant or agreement by
Cybergold; or

4
<PAGE>

. if any of Cybergold's representations or warranties are or become untrue
so that the corresponding condition to completion of the merger would not
be met,

unless the breach or inaccuracy is cured within thirty days after delivery of
written notice by MyPoints to Cybergold.

A company acquisition is any of the following:

. a merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving Cybergold
pursuant to which the stockholders of Cybergold immediately preceding
such transaction hold less than 50% of the aggregate equity interests in
the surviving or resulting entity of such transaction;

. a sale or other disposition by Cybergold of assets representing in excess
of 50% of the aggregate fair market value of Cybergold's business
immediately prior to such sale; or

. the acquisition by any person or group, including by way of a tender
offer or an exchange offer or issuance by Cybergold, directly or
indirectly, of beneficial ownership or a right to acquire beneficial
ownership of shares representing in excess of 50% of the voting power of
the then outstanding shares of capital stock of Cybergold.

Extension, waiver and amendment of the merger agreement (see page 59)

MyPoints and Cybergold may amend the merger agreement before completion of
the merger by mutual written consent.

Either MyPoints or Cybergold may, in writing, extend the other's time for
the performance of any of the obligations or other acts under the merger
agreement, waive any inaccuracies in the other's representations and warranties
and waive compliance by the other with any of the agreements or conditions
contained in the merger agreement.

No other negotiations involving Cybergold (see page 54)

Cybergold has agreed subject to limited exceptions that until the completion
of the merger or unless MyPoints consents in writing, Cybergold will not
directly or indirectly take any of the following actions:

. solicit, initiate, encourage or induce the making, submission or
announcement of any acquisition proposal;

. participate in any discussions or negotiations regarding any acquisition
proposal;

. take any other action to facilitate any inquiries or the making of any
proposal that constitutes or may reasonably be expected to lead to any
acquisition proposal;

. engage in discussions with any person with respect to any acquisition
proposal;

. enter into any letter of intent or similar document or any contract,
agreement or commitment relating to any acquisition proposal; or

. subject to certain limited exceptions, approve, endorse or recommend any
acquisition proposal.

Cybergold has agreed to promptly inform MyPoints as to any acquisition
proposal, request for information or inquiry which Cybergold should reasonably
believe would lead to an acquisition proposal as well as the identity of the
person or group making such request, proposal or inquiry and the terms and
conditions of any such request, proposal or inquiry. Cybergold has also agreed
to inform MyPoints of the status and details of any such acquisition proposal,
request or inquiry.

The stockholder voting agreements (see page 60)

Cybergold stockholders who collectively hold approximately 44% of the
outstanding Cybergold common stock as of the record date, including
A. Nathaniel Goldhaber, the President and Chief Executive Officer of Cybergold,
entered into voting agreements in which they have agreed to vote their shares
of common stock in favor of the merger.

5
<PAGE>

Directors and executive officers of MyPoints following the merger

Following the merger, the board of directors of MyPoints will consist of
nine members including two members to be selected by Cybergold, one of whom
shall be A. Nathaniel Goldhaber, and another member reasonably acceptable to
MyPoints.

Following the merger, Steve Markowitz, the current Chief Executive Officer
of MyPoints, will be Chief Executive Officer of MyPoints and A. Nathaniel
Goldhaber, the current President and Chief Executive Officer of Cybergold, will
be Vice Chairman of MyPoints.

Opinions of MyPoints's and Cybergold's financial advisors (see pages 35 and 40)

In deciding to approve the merger, MyPoints's board of directors considered
an opinion from its financial advisors, FleetBoston Robertson Stephens Inc.,
dated April 14, 2000, as to the fairness of the exchange ratio from a financial
point of view to, and as of the date of the opinion, MyPoints. Cybergold's
board of directors considered the opinion of Goldman Sachs & Co. as to the
fairness, from a financial point of view, of the exchange ratio to Cybergold
stockholders. The full text of the written opinions of the financial advisors
are attached to the back of this document as Annex B and Annex C, and should be
read carefully in their entireties for a description of the assumptions made,
matters considered and limitations on the review undertaken. The opinion of
Robertson Stephens is directed to the MyPoints board of directors and the
opinion of Goldman Sachs & Co. is directed to the Cybergold board of directors,
and these opinions do not address the prices at which MyPoints's common stock
will trade after the proposed merger and do not constitute a recommendation as
to how to vote with respect to any matter relating to the proposed merger.

U.S. federal income tax consequences of the merger (see page 47)

The merger is structured so that, in general, MyPoints, MyPoints's
stockholders, Cybergold and Cybergold's stockholders will not recognize gain or
loss for United States federal income tax purposes as a result of the merger,
except for taxes payable attributable to cash received by Cybergold
stockholders instead of fractional shares. It is a condition to the merger that
both MyPoints and Cybergold receive legal opinions that the merger will qualify
as a tax-free reorganization.

The distribution of the Paytech business will be a taxable distribution to
Cybergold stockholders, taxable as a dividend to the extent of Cybergold's
current and accumulated earnings and profits. Cybergold does not have
accumulated earnings and profits and does not expect to have current earnings
and profits. However, under certain circumstances it is possible that all or a
portion of the distribution will be taxable as a dividend. If the fair market
value of the distribution exceeds Cybergold's current and accumulated earnings
and profits, the excess will be treated first as a non-taxable return of
capital which will reduce a stockholder's tax basis in his or her Cybergold
shares. To the extent the distribution exceeds a stockholder's adjusted tax
basis in his or her Cybergold shares, such distribution will be treated as
taxable gain from the sale or exchange of property.

TAX MATTERS ARE VERY COMPLICATED AND THE TAX CONSEQUENCES OF THE MERGER TO
EACH STOCKHOLDER WILL DEPEND ON THE STOCKHOLDER'S PARTICULAR FACTS AND
CIRCUMSTANCES. STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO
UNDERSTAND FULLY THE TAX CONSEQUENCES OF THE MERGER.

Accounting treatment of the merger (see page 49)

MyPoints intends to account for the merger as a purchase for financial
accounting purposes, in accordance with generally accepted accounting
principles. After the completion of the merger, the results of operations of
Cybergold will be included in the consolidated financial statements of
MyPoints. The purchase price will be allocated to Cybergold's assets and
liabilities based on the fair values of the assets acquired and the liabilities
assumed. Any excess of cost over the fair value of the net tangible assets of
Cybergold acquired will be recorded as goodwill and other intangible assets and
will be amortized by charges to operations under generally accepted accounting
principles. These allocations will be made based upon valuations and other
studies that have not yet been finalized.

6
<PAGE>

Interests of certain persons in the merger (see page 45)

When considering the recommendations of Cybergold's board of directors, you
should be aware that certain Cybergold directors, officers and stockholders
have interests in the merger that are different from, or are in addition to,
yours. These interests include:

. MyPoints has agreed to cause the surviving corporation in the merger to
indemnify each present and former Cybergold officer and director against
liabilities arising out of such person's services as an officer or
director. MyPoints will cause, provided premiums remain within a certain
range, the surviving corporation to maintain officers' and directors'
liability insurance to cover any such liabilities for the next six years;

. MyPoints and Cybergold have agreed that Cybergold shall be entitled to
designate two individuals, one of whom shall be A. Nathaniel Goldhaber,
to MyPoints's board of directors; and

. Upon consummation of the merger, John Steuart, Chief Financial Officer of
Cybergold, may be entitled to acceleration of his unvested options if
certain conditions relating to his employment are not met.

No appraisal rights

Under Delaware law, neither stockholders of MyPoints nor stockholders of
Cybergold are entitled to appraisal rights in connection with the merger.

Restrictions on the ability to sell MyPoints stock (see page 49)

All shares of MyPoints common stock received by Cybergold stockholders in
connection with the merger will be freely transferable unless the holder is
considered an affiliate of either Cybergold or MyPoints under the Securities
Act. Shares of MyPoints held by affiliates may only be sold pursuant to a
registration statement or an exemption from the Securities Act.

Forward looking statements in this proxy statement/prospectus

This proxy statement/prospectus contains forward looking statements within
the safe harbor provisions of the Private Securities Litigation Reform Act.
These statements include statements with respect to MyPoints's and Cybergold's
financial condition, results of operations and business and on the expected
impact of the merger on MyPoints's financial performance. Words such as
anticipates, expects, intends, plans, believes, seeks, estimates and similar
expressions identify forward looking statements.

These forward looking statements are not guarantees of future performance
and are subject to certain risks and uncertainties that could cause actual
results to differ materially from the results contemplated by the forward
looking statements. These risks and uncertainties include the following:

. MyPoints and Cybergold may not achieve the benefits they expect from the
merger which may have a material adverse effect on the combined company's
business, financial condition and operating results and/or could result
in loss of key personnel;

. MyPoints may have difficulty retaining and assimilating the key personnel
of each company;

. Cybergold stockholders will receive a fixed number of shares of MyPoints
common stock despite changes in market value of Cybergold common stock or
MyPoints common stock;

. the merger could adversely affect the financial results of the surviving
corporation;

. the market price of MyPoints common stock may decline as a result of the
merger;

. Cybergold's officers and directors have conflicts of interest that may
influence them to support or approve the merger;

. failure to complete the merger could negatively impact Cybergold's and/or
MyPoints's stock price, future business and operations;

7
<PAGE>

. MyPoints has a limited operating history in an early-stage market and as
a result, its business strategy may not prove to be successful;

. MyPoints has a history of losses, expects future losses and cannot assure
you that it will achieve profitability;

. the expected fluctuations of MyPoints's operating results could cause its
stock price to fluctuate;

. MyPoints depends on the efficient operation of the internet, other
networks and systems of third parties; if they do not operate
efficiently, MyPoints will not be able to effectively provide its
products and services;

. MyPoints depends on a small number of advertising customers for a
significant portion of revenues, who generally do not have long-term
contracts with MyPoints and can generally terminate their relationships
upon specified notice and without penalties;

. competition from third parties could reduce or eliminate demand for
MyPoints's products and services;

. failure to safeguard its database and member privacy could damage
MyPoints's reputation and business;

. the demand for MyPoints's products and services could be negatively
affected by reduced growth of commerce over the Internet or delays in the
development of the Internet infrastructure;

. MyPoints could be subject to potential liability claims related to use of
MyPoints's products and services;

. MyPoints is currently experiencing a period of significant growth that is
placing a strain on its resources;

. MyPoints's stock price may be extremely volatile;

. difficulties in managing foreign operations, currency issues and foreign
government regulation of MyPoints's business could cause it to incur
significant expenses, and failure to comply with certain regulations, if
applicable, could make MyPoints's international business less competitive
or impossible;

. failure to attract and retain experienced personnel and senior management
could harm MyPoints's ability to grow;

. MyPoints's limited ability to protect its proprietary technology may
adversely affect its ability to compete, and MyPoints may be found to
infringe proprietary rights of others, which could harm its business;

. future sales of MyPoints shares could affect the stock price; and

. other risk factors as may be detailed from time to time in MyPoints's
public announcements and filings with the Securities and Exchange
Commission.

In evaluating the merger, you should carefully consider the discussion of
these and other factors in the section entitled "Risk Factors" on page 16.

Acquisition of itarget

In March 2000, Cybergold acquired itarget.com, inc. through a merger of a
wholly owned subsidiary of Cybergold with and into itarget. itarget is a
permission email marketing company that rewards consumers for participation in
a variety of on-line commerical programs with premium products delivered on-
line. Cybergold issued 1.83 million shares of its common stock to the itarget
stockholders of which 185,000 shares are held in escrow to secure
indemnification obligations to Cybergold.

Comparative market price information (see page 62)

Shares of MyPoints common stock are listed on the Nasdaq National Market
under the symbol "MYPT." On April 14, 2000, the last full trading day prior to
the public announcement of the proposed merger, MyPoints's common stock closed
at $14.938 per share. On June 21, 2000, MyPoints's common stock closed at
$17.313 per share. Shares of Cybergold's common stock are listed on the Nasdaq
National Market under the symbol "CGLD." On April 14, 2000, Cybergold's common
stock closed at $5.50 per share. On June 21, 2000, Cybergold's common stock
closed at $8.125 per share. MyPoints and Cybergold urge you to obtain current
market quotations.

8
<PAGE>

SELECTED HISTORICAL FINANCIAL DATA

MyPoints's Selected Historical Financial Data
(In thousands, except per share data)

The following selected historical financial data should be read in
conjunction with MyPoints's financial statements and related notes thereto, and
"MyPoints Management's Discussion and Analysis of Financial Condition and
Results of Operations" on page 90 in this proxy statement/prospectus. The
selected statement of operations data for the years ended December 31, 1997,
1998 and 1999 and the selected balance sheet data as of December 31, 1998 and
1999 have been derived from MyPoints's audited financial statements and the
notes thereto included elsewhere in this proxy statement/prospectus. The
selected balance sheet data as of December 31, 1996 and 1997 has been derived
from MyPoints audited financial statements which are not included in this proxy
statement/prospectus. The selected statement of operations data for the period
from November 7, 1996 (inception) to December 31, 1996 and for the three month
periods ended March 31, 1999 and 2000 and the selected balance sheet data as of
March 31, 2000 have not been audited. In the opinion of MyPoints's management,
such unaudited financial statements have been prepared on the same basis as the
audited financial statements referred to above and include all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of results of operations for the indicated periods. Results of
operations for the three months ended March 31, 2000 are not necessarily
indicative of the results that may be expected for the full fiscal year.

<TABLE>
<CAPTION>
Period from Quarter Ended
November 7, 1996 Year Ended December 31, March 31,
(Inception) to -------------------------- ------------------
December 31, 1996 1997 1998 1999 1999 2000
----------------- ------- ------- -------- -------- --------
(unaudited) (unaudited)
<S> <C> <C> <C> <C> <C> <C>
Consolidated Statement
of Operations Data:
Revenues:
Advertising............ $ -- $ 151 $ 1,286 $ 23,526 $ 1,275 $ 15,822
License................ -- -- -- 614 -- --
------ ------- ------- -------- -------- --------
Total revenues....... -- 151 1,286 24,140 1,275 15,822
------ ------- ------- -------- -------- --------
Cost of revenues:
Advertising............ -- 78 1,121 7,212 878 4,113
License................ -- -- -- 195 -- --
------ ------- ------- -------- -------- --------
Total cost of
revenues............ -- 78 1,121 7,407 878 4,113
------ ------- ------- -------- -------- --------
Gross profit........... -- 73 165 16,733 397 11,709
------ ------- ------- -------- -------- --------
Operating expenses:
Technology costs....... 16 560 1,520 8,665 968 5,276
Sales and marketing
expenses.............. 36 1,669 4,513 30,247 2,564 11,393
General and
administrative
expenses.............. 16 712 2,028 9,601 1,074 4,400
Amortization of
intangible assets..... -- -- 275 3,116 832 1,177
Stock-based
compensation.......... -- 77 158 3,054 449 1,100
------ ------- ------- -------- -------- --------
Total operating
expenses............ 68 3,018 8,494 54,683 5,887 23,346
------ ------- ------- -------- -------- --------
Operating loss.......... (68) (2,945) (8,329) (37,950) (5,490) (11,637)
Interest income......... 1 64 87 633 9 816
Interest expense and
other, net............. -- (8) (24) (139) -- (53)
------ ------- ------- -------- -------- --------
Net loss............. (67) (2,889) (8,266) (37,456) (5,481) (10,874)
------ ------- ------- -------- -------- --------
Dividend related to
beneficial conversion
feature of preferred
stock.................. -- -- -- (9,800) (9,800) --
------ ------- ------- -------- -------- --------
Net loss attributable
to common
stockholders........ $ (67) $(2,889) $(8,266) $(47,256) $(15,281) $(10,874)
====== ======= ======= ======== ======== ========
Net loss per share:
Basic and diluted...... $(0.08) $ (2.56) $ (4.37) $ (3.53) $ (3.00) $ (0.40)
====== ======= ======= ======== ======== ========
Weighted average
shares -- basic and
diluted............... 891 1,127 1,890 13,397 5,097 26,872
====== ======= ======= ======== ======== ========
</TABLE>

9
<PAGE>

<TABLE>
<CAPTION>
March 31,
December 31, 2000
------------------------------------ -----------
1996 1997 1998 1999
------- ------- -------- --------
(unaudited)
<S> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash and cash equivalents... $ 1,118 $ 2,948 $ 5,089 $ 21,792 $ 116,392
Working capital (deficit)... 1,099 2,381 (307) 10,948 109,829
Total assets................ 1,205 3,474 18,306 55,669 171,242
Long-term liabilities, less
current maturities......... -- 47 2,408 1,029 907
Accumulated deficit......... (67) (2,956) (11,222) (58,478) (69,352)
Total stockholders' equity.. $ 1,412 $ 2,692 $ 9,283 $ 28,853 $ 142,799
</TABLE>

10
<PAGE>

Cybergold's Selected Historical Financial Data
(In thousands, except per share data)

The following selected historical financial data should be read in
conjunction with Cybergold's consolidated financial statements and related
notes thereto, and "Cybergold Management's Discussion and Analysis of Financial
Condition and Results of Operations" on page 125 in this proxy
statement/prospectus. The selected statement of operations data for the years
ended December 31, 1997, 1998 and 1999 and the selected balance sheet data as
of December 31, 1998 and 1999 have been derived from Cybergold's audited
financial statements and the notes thereto included elsewhere in this proxy
statement/prospectus. The selected balance sheet data as of December 31, 1997
have been derived from Cybergold's audited financial statements which are not
included in this proxy statement/prospectus. The selected statement of
operations data for the three month periods ended March 31, 1999 and 2000 and
balance sheet data as of March 31, 2000 have not been audited. In the opinion
of Cybergold's management, such unaudited financial statements have been
prepared on the same basis as the audited financial statements referred to
above and include all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of results of operations for the
indicated periods. Results of operations for the three months ended March 31,
2000 are not necessarily indicative of the results that may be expected for the
full fiscal year.

<TABLE>
<CAPTION>
Quarter Ended
Year Ended December 31, March 31,
----------------------------- ------------------
1997 1998 1999 1999 2000
-------- -------- --------- -------- --------
(unaudited)
<S> <C> <C> <C> <C> <C>
Consolidated Statement of
Operations Data:
Revenues:
Transaction............... $ 457 $ 628 $ 3,316 $ 333 $ 2,269
Custom marketing services
and other................ 74 377 2,167 170 2,021
-------- -------- --------- -------- --------
Total revenues.......... 531 1,005 5,483 503 4,290
-------- -------- --------- -------- --------
Cost of revenues:
Transaction............... 256 293 1,594 159 1,094
Custom marketing services
and other................ 37 173 334 85 78
-------- -------- --------- -------- --------
Total cost of revenues.. 293 466 1,928 244 1,172
-------- -------- --------- -------- --------
Gross margin.............. 238 539 3,555 259 3,118
-------- -------- --------- -------- --------
Operating expenses
Product development....... 1,190 1,726 3,187 513 1,630
Sales and marketing....... 2,162 2,695 9,158 1,024 5,410
General and
administrative........... 740 814 3,352 307 2,302
itarget acquisition
costs.................... -- -- -- -- 2,142
Amortization of deferred
compensation............. -- 198 735 327 113
-------- -------- --------- -------- --------
Total operating
expenses............... 4,092 5,433 16,432 2,171 11,597
-------- -------- --------- -------- --------
Loss from operations.... (3,854) (4,894) (12,877) (1,912) (8,479)
Interest income/(expense),
net........................ (15) 78 740 11 563
-------- -------- --------- -------- --------
Net loss................ (3,869) (4,816) (12,137) (1,901) (7,916)
-------- -------- --------- -------- --------
Dividend attributable to
preferred stockholders..... -- (660) (1,571) (283) --
-------- -------- --------- -------- --------
Net loss attributable to
common stockholders.... (3,869) (5,476) (13,708) (2,184) (7,916)
-------- -------- --------- -------- --------
Net unrealized loss on
securities................. -- -- -- -- (117)
-------- -------- --------- -------- --------
Net comprehensive loss.. $ (3,869) $ (5,476) $ (13,708) $ (2,184) $ (8,033)
======== ======== ========= ======== ========
Net loss per common share:
Basic and diluted......... $ (0.97) $ (1.18) $ (1.45) $ (0.42) $ (0.38)
======== ======== ========= ======== ========
Weighted average shares --
basic and diluted........ 3,979 4,648 9,464 5,175 20,642
======== ======== ========= ======== ========
</TABLE>

11
<PAGE>

<TABLE>
<CAPTION>
December 31,
------------------ March 31,
1998 1999 2000
-------- -------- -----------
(unaudited)
<S> <C> <C> <C>
Balance Sheet Data:
Cash and cash
equivalents............ $ 3,181 $ 17,265 $ 16,107
Current assets.......... 3,605 47,595 43,843
Total assets............ 4,093 49,353 45,641
Long-term obligations,
less current
maturities............. 226 389 331
Convertible redeemable
preferred stock........ 6,379 -- --
Total stockholders'
equity (deficit)....... $ (4,294) $ 42,460 $ 36,378
</TABLE>

12
<PAGE>

Selected Unaudited Pro Forma Combined Financial Data
(In thousands, except per share amounts)

The following selected unaudited pro forma combined financial data present
the effect of the pending merger between MyPoints and Cybergold as if the
merger had been completed on January 1, 1999 for the year ended December 31,
1999 and January 1, 2000 for the three months ended March 31, 2000, for results
of operations purposes and on March 31, 2000 for purposes of the March 31, 2000
balance sheet. The unaudited pro forma combined financial data was prepared
using the purchase method of accounting and does not give effect to the
disposition of its Paytech business.

The unaudited pro forma combined financial data is based on estimates and
assumptions which are preliminary and have been made solely for the purposes of
developing these unaudited pro forma combined financial data. The unaudited pro
forma combined financial data is not necessarily an indication of the results
that would have been achieved had the transaction been consummated as of the
dates indicated or results that may be achieved in the future.

These selected MyPoints unaudited pro forma combined financial data should
be read in conjunction with the unaudited pro forma combined financial data,
the historical financial statements and notes thereto of MyPoints, the
historical financial statements and notes thereto of Cybergold, and other
financial information pertaining to MyPoints and Cybergold including "MyPoints
Management's Discussion and Analysis of Financial Condition and Results of
Operations" on page 90 of this proxy statement/prospectus, "Cybergold
Management's Discussion and Analysis of Financial Condition and Results of
Operations" on page 125 of this proxy statement/prospectus and "Risk Factors"
on page 16 of this proxy statement/prospectus.

<TABLE>
<CAPTION>
MyPoints and Cybergold
---------------------------
Year Ended Three Months
December 31, Ended
1999 March 31, 2000
------------ --------------
<S> <C> <C>
Unaudited pro forma combined statements of
operations data:
Revenues.......................................... $ 29,623 $ 20,112
Cost of revenues.................................. 9,335 5,285
-------- --------
Gross profit...................................... 20,288 14,827
Operating expenses:
Technology costs................................. 11,852 6,906
Sales and marketing expense...................... 39,405 16,803
General and administrative expense............... 12,953 6,702
Amortization of intangible assets................ 31,075 8,167
itarget acquisition costs........................ -- 2,142
Stock based compensation......................... 3,789 1,213
-------- --------
Totaling operating expenses..................... 99,074 41,933
-------- --------
Operating loss.................................... (78,786) (27,106)
-------- --------
Interest income, net.............................. 1,234 1,326
-------- --------
Net loss.......................................... (77,552) (25,780)
-------- --------
Dividend related to preferred stockholders........ (11,371) --
-------- --------
Net loss attributable to common stockholders...... $(88,923) $(25,780)
======== ========
Basic and diluted net loss per share.............. $ (3.76) $ (0.69)
======== ========
Weighted average shares -- basic and diluted...... 23,672 37,147
======== ========
</TABLE>

13
<PAGE>

<TABLE>
<CAPTION>
MyPoints and Cybergold
----------------------
March 31, 2000
--------------
<S> <C>
Unaudited pro forma combined balance sheet data:
Cash, cash equivalents & short-term investments.......... $ 155,941
Working capital.......................................... 144,740
Intangible assets........................................ 161,183
Total assets............................................. 356,500
Long-term obligations, less current maturities........... 1,238
Accumulated deficit...................................... (69,352)
Total stockholders' equity............................... $ 318,794
</TABLE>

14
<PAGE>

Selected Comparative Historical And Unaudited Pro Forma Per Share Data

The following table reflects the historical net loss and book value per
share of MyPoints common stock and the historical net loss and book value per
share of Cybergold common stock in comparison with the unaudited pro forma net
loss and book value per share after giving effect to the pending merger of
MyPoints and Cybergold. The information presented in the following table should
be read in conjunction with the unaudited pro forma combined financial data and
the MyPoints and Cybergold historical financial statements included elsewhere
in this proxy statement/prospectus.

<TABLE>
<CAPTION>
Year Ended Three Months
December 31, Ended
1999 March 31, 2000
------------ --------------
<S> <C> <C>
MyPoints Historical per Share Data
Basic and diluted net loss per share(1).......... $ (3.53) $ (0.40)
Book value per share(2).......................... 1.11 4.90
Cybergold Historical per Share Data
Basic and diluted net loss per share(1).......... (1.45) (0.38)
Book value per share(2).......................... 2.07 1.70
Unaudited Pro Forma Combined Per Share Data
Basic and diluted net loss per MyPoints
share(1)........................................ (3.76) (0.69)
Basic and diluted net loss per equivalent
Cybergold share(3).............................. (1.80) (0.33)
Book value per MyPoints share.................... 5.83 8.09
Book value per equivalent Cybergold share(3)..... 2.80 3.88
</TABLE>
--------
(1) Basic and diluted net loss per share is computed using the weighted average
number of common shares outstanding during the period. Common equivalent
shares are excluded from the computation as their effect is antidilutive.

(2) The historical book value per share is computed by dividing stockholders'
equity by the number of shares of common stock outstanding at December 31,
1999 and March 31, 2000.

(3) The equivalent pro forma basic and diluted net loss per share and book
value per share for Cybergold are based upon the exchange of approximately
0.48 shares of MyPoints common stock for each share of Cybergold common
stock. This assumed exchange ratio of 0.48 shares of MyPoints common stock
for each share of Cybergold common stock is stipulated in the merger
agreement.

15
<PAGE>

RISK FACTORS

The merger involves a high degree of risk. By voting in favor of the merger,
you will be choosing to invest in MyPoints common stock. An investment in
MyPoints common stock involves a high degree of risk. In addition to the other
information contained in this proxy statement/prospectus, you should carefully
consider the following risk factors in deciding whether to vote for the merger.

General risks relating to the proposed merger

MyPoints and Cybergold may not achieve the benefits they expect from the merger
which may have a material adverse effect on the combined company's business,
financial condition and operating results and/or could result in loss of key
personnel.

MyPoints will need to overcome significant issues in order to realize any
benefits or synergies from the merger, including the timely, efficient and
successful execution of a number of post-merger events. Key events include:

. integrating the operations of the two companies;

. retaining and assimilating the key personnel of each company;

. offering the existing services of each company to the other company's
customers;

. retaining the existing customers and strategic partners of each company;

. developing new services that utilize the assets of both companies; and

. maintaining uniform standards, controls, procedures and policies.

The successful execution of these post-merger events will involve
considerable risk and may not be successful. These risks include:

. the potential disruption of the combined company's ongoing business and
distraction of its management;

. the difficulty of incorporating acquired technology and rights into the
combined company's products and services;

. combining the customer database technologies of the two companies could
be expensive and time-consuming;

. unanticipated expenses related to technology integration;

. the impairment of relationships with employees and customers as a result
of any integration of new management personnel; and

. potential unknown liabilities associated with the acquired business.

The combined company may not succeed in addressing these risks or any other
problems encountered in connection with the merger.

Cybergold shareholders will receive a fixed number of shares of MyPoints common
stock despite changes in market value of Cybergold common stock or MyPoints
common stock.

Upon the merger's completion, each share of Cybergold common stock will be
exchanged for 0.480 shares of MyPoints common stock. There will be no
adjustment for changes in the market price of either Cybergold common stock or
MyPoints common stock. In addition, neither Cybergold nor MyPoints may
terminate the merger agreement or "walk away" from the merger solely because of
changes in the market price of MyPoints or Cybergold common stock. Accordingly,
the specific dollar value of MyPoints common stock that Cybergold stockholders
will receive upon the merger's completion will depend on the market value of
MyPoints and Cybergold common stock when the merger is completed and may
decrease from the date you submit your proxy. The share prices of MyPoints and
Cybergold common stock are by nature subject to the general price

16
<PAGE>

fluctuations in the market for publicly traded equity securities and have
experienced significant volatility. We urge you to obtain recent market
quotations for MyPoints common stock and Cybergold common stock. MyPoints
cannot predict or give any assurances as to the market price of MyPoints common
stock at any time before or after the completion of the merger.

The merger could adversely affect combined financial results.

MyPoints expects to incur estimated non-recurring merger costs of $2.5
million in connection with the merger. If the benefits of the merger do not
exceed the costs associated with the merger, including any dilution to
MyPoints's stockholders resulting from the issuance of shares in connection
with the merger, MyPoints's financial results, including earnings per share,
could be adversely affected.

The market price of MyPoints common stock may decline as a result of the
merger.

The market price of MyPoints common stock may decline as a result of the
merger for a number of reasons including if:

. the integration of MyPoints and Cybergold is unsuccessful;

. MyPoints does not achieve the perceived benefits of the merger as rapidly
or to the extent anticipated by financial or industry analysts; or

. the effect of the merger on MyPoints's financial results is not
consistent with the expectations of financial or industry analysts.

Cybergold's officers and directors have conflicts of interest that may
influence them to support or approve the merger.

The directors and officers of Cybergold participate in arrangements and have
continuing indemnification against liabilities that provide them with interests
in the merger that are different from, or in addition to, yours, including the
following:

. MyPoints has agreed to cause the surviving corporation in the merger to
indemnify each present and former Cybergold officer and director against
liabilities arising out of such person's services as an officer or
director. MyPoints will cause the surviving corporation to maintain
officers' and directors' liability insurance to cover any such
liabilities for the next six years.

. MyPoints and Cybergold have agreed that Cybergold shall be entitled to
designate two individuals to MyPoints's board of directors, one of which
will be A. Nathaniel Goldhaber, the President and Chief Executive Officer
of Cybergold, who are reasonably acceptable to MyPoints.

. A. Nathaniel Goldhaber, Daniel Berger, and Michael Koifman have entered
into non-competition agreements dated April 14, 2000 with MyPoints that
provide for severance benefits upon certain termination events. In
addition, the agreements entered by Messrs. Berger and Koifman provide
for an immediate payment of $50,000 and an acceleration of vesting of
their options by one year upon one year of service after the signing of
the non-competition agreements. Cybergold also lowered the exercise price
on options previously issued to Mr. Berger for 34,686 shares of Cybergold
common stock from $3.90 per share to $0.225 per share.

. Upon consummation of the merger, John Steuart, the Chief Financial
Officer of Cybergold, may be entitled to acceleration of his unvested
options if certain conditions relating to his ongoing employment with the
combined company are not met.

For the above reasons, the directors and officers of Cybergold could be more
likely to support or vote to approve the merger agreement than if they did not
hold these interests. Cybergold stockholders should consider whether these
interests may have influenced these directors and officers to support or
recommend the merger.

17
<PAGE>

Failure to complete the merger could negatively impact Cybergold's and/or
MyPoints's stock price, future business and operations.

If the merger is not completed for any reason, Cybergold and MyPoints may be
subject to a number of material risks, including the following:

. Cybergold may be required under certain circumstances to pay MyPoints a
termination fee of $7,850,000;

. the price of Cybergold and/or MyPoints common stock may decline to the
extent that the relevant current market price reflects a market
assumption that the merger will be completed; and

. costs related to the merger, such as legal, accounting and financial
advisor fees, must be paid even if the merger is not completed.

In addition, Cybergold's and/or MyPoints's customers and strategic partners,
in response to the announcement of the merger, may delay or defer decisions
concerning the relevant company. Any delay or deferral in those decisions by
customers, strategic partners or suppliers could have a material adverse effect
on business of the relevant company, regardless of whether the merger is
ultimately completed. Similarly, current and prospective Cybergold and/or
MyPoints employees may experience uncertainty about their future roles with
MyPoints until MyPoints's strategies with regard to Cybergold are announced or
executed. This may adversely affect Cybergold's and/or MyPoints's ability to
attract and retain key management, sales, marketing and technical personnel.

Further, if the merger is terminated and Cybergold's board of directors
determines to seek another merger or business combination, there can be no
assurance that it will be able to find a partner willing to pay an equivalent
or more attractive price than the price to be paid in the merger. In addition,
while the merger agreement is in effect and subject to very narrowly defined
exceptions, Cybergold is prohibited from soliciting, initiating or encouraging
or entering into certain extraordinary transactions, such as a merger, sale of
assets or other business combination, with any party other than MyPoints.

Risks relating to MyPoints

We have only a limited operating history that investors may use to assess our
future prospects.

We have only a limited operating history upon which you can evaluate our
business. We commenced operations in November 1996 and did not begin to
generate revenues until July 1997. We have not and may never generate
sufficient revenues to achieve profitability. Although we have experienced
revenue growth in recent periods, these growth rates may not be sustainable or
indicative of our future growth. We have limited experience addressing
challenges frequently encountered by early-stage companies in the electronic
commerce and direct marketing industries. We may not be successful in
addressing these risks, and our business strategy may not be successful. In
addition, we have never operated during a general economic downturn in the
United States, which typically adversely affects advertising and marketing
expenditures and retail sales. Accordingly, our limited operating history does
not provide investors with a meaningful basis for evaluating an investment in
our common stock.

We have a history of losses and expect losses to continue at least through
2001.

Our accumulated deficit as of March 31, 2000 was $69.4 million. We have
never operated profitably and, given our planned level of operating expenses,
we expect to continue to incur losses at least through 2001. We plan to
increase our operating expenses as we continue to build infrastructure to
support the expansion of our business. Our losses may increase in the future,
and even if we achieve our revenue targets, we may not be able to sustain or
increase profitability on a quarterly or annual basis. If our revenues grow
more slowly than we anticipate, or if our operating expenses exceed our
expectations and cannot be adjusted accordingly, our losses could continue
beyond our present expectations.

18
<PAGE>

Our quarterly operating results are subject to fluctuations, which could affect
our stock price.

Our revenue and operating results may vary significantly from quarter to
quarter due to a number of factors, some of which are outside of our control.
As a result, our operating results may be below the expectations of public
market analysts and investors. In this event, the price of our common stock may
fall. The factors most likely to produce varied results include:

. the advertising budget cycles of individual advertisers;

. the number of reward points redeemed by our members and the costs
associated with these redemptions;

. changes in the mix of our business;

. changes in marketing and advertising costs that we incur to attract and
retain members;

. changes in our pricing policies, the pricing policies of our competitors
or the pricing policies for internet advertising generally; and

. unexpected costs and delays relating to the expansion of our operations.

Due to these factors, revenues and operating results are difficult to
forecast and you should not rely on period to period comparisons of results of
operations as an indication of our future performance.

Our operating results are subject to seasonal fluctuations that could impact
our growth and affect our stock price.

We believe that our revenues will be subject to seasonal fluctuations as a
result of general patterns of retail advertising, which are typically higher
during the fourth calendar quarter. In addition, expenditures by advertisers
tend to be cyclical, reflecting general economic conditions and consumer buying
patterns. The extent of these seasonal fluctuations in any period may be
difficult to predict and, if the fluctuations are greater than our
expectations, our growth rate would decline. In this event, the price of our
common stock may fall.

We may have difficulties integrating recent and future acquisitions and any
failure to successfully integrate acquired companies would reduce our ability
to realize the anticipated value of the acquisition.

We may pursue acquisitions in the future. Based on our experiences with our
first acquisition, we expect to face numerous risks and uncertainties generally
associated with acquisitions, including:

. potentially adverse effects on our reported results of operations from
acquisition-related charges and amortization of goodwill and purchased
technology;

. our ability to maintain customers or the reputation of the acquired
businesses;

. potential dilution to current stockholders from the issuance of
additional equity securities;

. difficulties integrating operations, personnel, technologies, products
and information systems of the acquired businesses;

. diversion of management's attention from other business concerns; and

. potential loss of key employees of acquired businesses.

In November and December 1998, through our acquisition of Enhanced Response
Technologies, Inc. and a company affiliated with Experience Information
Solutions, Inc., we acquired internet and electronic commerce related assets
and technologies to support a web-based rewards program known as MyPoints. We
integrated MyPoints with our BonusMail email service during March and April
1999. This integration involved the combination of two different marketing
programs and technology platforms, as well as operations in San Francisco and
Chicago. In connection with this integration, we incurred substantial costs.
During the relaunch of the integrated MyPoints program, we encountered several
unanticipated problems which resulted in

19
<PAGE>

significant periods of system downtime during April 1999. During these periods
of downtime, our web site was not accessible by members. We believe that we
have resolved the problems that caused this downtime; however, there can be no
assurance that we will not encounter additional system-related problems.

In January 2000, we acquired Alliance Development Group, Inc., or ADG, a
company that operates offline customer rewards programs. In connection with
this acquisition, we intend to integrate our technology with ADG's offline
programs to help make them more efficient. If we are unable to do this in a
timely manner, we may be unable to realize the anticipated benefits of this
acquisition. This transaction has been accounted for under the purchase method
of accounting. We allocated $14.8 million of the purchase price to intangible
assets and goodwill, which will be amortized over three to eight years.

Our ability to meet the challenges associated with integrating acquired
companies has not been established. As a result, we cannot assure you that we
will be successful in generating additional sources of members and revenues
from the recent acquisitions or any future acquisitions.

We are growing rapidly, and the failure to manage our growth could strain our
management systems and resources.

As we continue to increase the scope of our operations, we may not have an
effective planning and management process in place to implement our business
plan successfully. We have grown from 24 employees on January 1, 1998 to 264
employees on April 30, 2000. We plan to continue the expansion of our
technology, sales, marketing and administrative organizations. This growth will
continue to strain our management systems and resources, We anticipate the need
to continue to improve our financial and managerial controls and our reporting
systems. In addition, we will need to expand, train and manage our rapidly
growing work force.

Our success depends on our ability to maintain and expand an active membership
base.

Our success largely depends on our ability to maintain and expand an active
membership base. Our revenues are primarily driven by fees paid by advertisers
and direct marketers based on specific actions taken by our members. If we are
unable to induce existing and new members to actively participate in our
programs, our business, results of operations and financial condition will be
harmed. We generate a significant portion of our revenues based on the activity
of a small percentage of our members, and we cannot assure you that the
percentage of active members will increase. In addition, some of our members
have requested to limit the number of emails they receive from us. Although our
membership has grown in prior periods, we cannot be sure that our membership
growth will continue at current rates or increase in the future.

If online incentive-based direct marketing programs do not gain increased
acceptance by members, advertising and marketing clients and merchants, we
would have slower revenue growth than expected and would incur greater than
expected losses.

Our success depends in part on the increased acceptance of online
incentives-based direct marketing programs. Although incentive programs have
been used extensively in traditional marketing and sales channels, they have
only recently begun to be used online.

The success of online incentives-based direct marketing programs will depend
on the ability of these programs to attract and retain members, advertising and
marketing clients and merchants. Our ability to attract and retain members,
clients and merchants will depend on our marketing efforts and on the quality
of each member, client or merchant experience with our system. The number and
relevance of the direct marketing offers we provide and the perceived value of
the incentives we offer will be necessary to achieve future success. Our
ability to generate revenue from clients and merchants will depend on our
ability to differentiate ourselves through the services we provide and
technology solutions we offer, as well as our success in generating adequate
participation from consumers in our online incentives-based direct marketing
programs. The attractiveness of our program to consumers depends in large part
on the attractiveness of the incentives we offer. To the extent that our online
incentives-based direct marketing program does not achieve market

20
<PAGE>

acceptance among members, clients and merchants, we would have slower revenue
growth than expected and would incur greater than expected losses, and our
business, results of operations and financial condition would be harmed.

We face intense competition, and the failure to compete effectively could
adversely affect our market share and results of operations.

We face intense competition from both traditional and online advertising and
direct marketing businesses. We expect competition to increase due to the lack
of significant barriers to entry for online business generally. As we expand
the scope of our product and service offerings, we may compete with a greater
number of media companies across a wide range of advertising and direct
marketing services. Our ability to generate significant revenue from
advertisers and loyalty partners will depend on our ability to differentiate
ourselves through the technology and services we provide and to obtain adequate
participation from consumers in our online direct marketing and rewards
programs. Rewards providers are also a critical element of our business. The
attractiveness of our program to current and potential members and loyalty
partners depends in large part on the attractiveness of the rewards and point
redemption opportunities that we offer. Currently, several companies offer
competitive online products or services, including Cybergold and Netcentives.
We also expect to face competition from established online portals and
community web sites that engage in direct marketing and loyalty point programs,
as well as from traditional advertising agencies and direct marketing companies
that may seek to offer online products or services.

Many of our current competitors and potential new competitors have longer
operating histories, greater name recognition, larger customer bases and
significantly greater financial, technical and marketing resources than we do.
These advantages may allow them to respond more quickly to new or emerging
technologies and changes in customer requirements. It may also allow them to
engage in more extensive research and development, undertake more far-reaching
marketing campaigns, adopt more aggressive pricing policies, and make more
attractive offers to potential employees, strategic partners and advertisers.
In addition, current and potential competitors have established or may
establish cooperative relationships among themselves or with third parties to
increase the ability of their products or services to address the needs of our
prospective advertisers and advertising agency customers. As a result, it is
possible that new competitors may emerge and rapidly acquire significant market
share. We may not be able to compete effectively, and competitive pressures may
result in price reductions, reduced gross margins and loss of our market share.

The failure to establish the MyPoints brand would impair our competitive
position.

We are highly dependent on establishing and maintaining our brand. Any event
or circumstance that negatively impacts our brand could have a direct and
material adverse effect on our business, results of operations and financial
condition. As competitive pressures in the online direct marketing industry
increase, we believe that brand strength will become increasingly important.
The reputation of the MyPoints brand will depend on our ability to provide a
high-quality member experience. We cannot assure you that we will be successful
in delivering this experience. If members are not satisfied with the quality of
their experience with the MyPoints program, their negative experiences might
result in publicity that could damage our reputation. If we expend additional
resources to build the MyPoints brand and do not generate a corresponding
increase in revenues as a result of our branding efforts, or if we otherwise
fail to promote our brand successfully, our competitive position would suffer.

If the Internet fails to gain further acceptance as a medium for advertising
and marketing, we would have slower revenue growth than expected and would
incur greater than expected losses.

Our business depends on market acceptance of the Internet as a medium for
advertising and marketing. Advertisers, marketers and advertising and marketing
agencies that have historically relied on traditional forms of advertising and
marketing may be reluctant or slow to adopt online advertising and marketing.
Many

21
<PAGE>

advertisers and marketers have limited or no experience using the Internet as
an advertising and marketing medium. In addition, these advertisers and
marketers may have allocated only a limited portion of their budgets to online
advertising and marketing, or may find online advertising and marketing to be
less effective for promoting their products and services than traditional
advertising and marketing media, including television, radio and print.

Advertisers, markets, and advertising and marketing agencies that have
invested substantial resources in traditional methods of advertising and
marketing may also be reluctant to reallocate their resources to online
advertising and marketing. The market for online advertising and marketing also
depends on the overall growth and acceptance of electronic commerce. If the
markets for online advertising and marketing and electronic commerce fail to
develop or develop more slowly than we expect, we would have slower revenue
growth than expected and would incur greater than expected losses, and our
business, results of operations and financial condition would be harmed.

The market for making small payments over the Internet is new and we cannot be
certain that a viable market for our products will emerge or be sustainable.

We cannot assure you that the demand for and market acceptance of Internet
payment services will develop to a sufficient level to support our continued
operations or planned expansion, and we also cannot assure you that consumers,
Web sites or merchants will utilize a system for payment transactions over the
Internet. Currently, Internet content and service providers typically use a
subscription model to charge for content or services they provide, if they
charge consumers directly for their content or services at all. We cannot
assure you that these entities will ever adopt a method for accepting small
payments for their content or services over the Internet. In addition, the
development of a market for payments on the Internet may depend on the eventual
adoption of a standard payment system. There can be no assurance that our
payment system will be the system adopted by consumers, Web sites, or
merchants. If a widespread demand for payments on the Internet does not develop
or if another method for payments is adopted as a standard, our business,
results of operations and financial condition will be harmed.

The failure to accurately estimate levels of point redemption would adversely
affect our results of operations and could lead to the restatement of
historical financial results.

Our historical and forecasted financial statements reflect our assumptions
as to the percentage of rewards points issued by us that will not be redeemed
by members prior to expiration. This percentage of unredeemed points is known
as "breakage," If our assumptions do not prove accurate, our financial
statements may require restating, which could cause our stock price to decline
and damage our reputation. The breakage rates we have used in preparing our
financial statements and forecasts are based primarily on our limited
experience with our own program since its launch in May 1997. We have also
reviewed breakage rates reported by other operators of loyalty and rewards
programs, such as airlines. Although we believe that the breakage rates we have
used are reasonable in light of our analysis and experience, we cannot assure
you that our actual breakage rates will equal or exceed our assumed breakage
rates. If our actual breakage rates are less than our assumed breakage rates,
meaning that a greater number of points are actually redeemed than we had
assumed would be redeemed, our results of operations could be materially and
adversely affected. In addition, operators of loyalty programs have, from time
to time, for competitive or other reasons, extended the expiration dates for
points, miles or other rewards currencies. For example, we extended the
expiration date for the points associated with the email portion of our program
when we relaunched our email and web-based services. If it becomes necessary
for us to extend the expiration date of a significant balance of outstanding
points in the future, it is possible that our actual breakage rates would be
lower than our assumed breakage rates, which could materially and adversely
affect our results of operations. In addition, the timing of members' decisions
to redeem points is at the discretion of members and cannot be controlled by
us. Points have a life of three to four years and can be redeemed by members
until their expiration date. To the extent that members redeem points at a rate
that is more rapid than that anticipated by us, we would experience a need for
increased working capital to fund these redemptions. Accordingly, the timing of
points redemptions by members could materially and adversely affect our results
of operations.

22
<PAGE>

A small number of our advertising customers accounts for a significant portion
of our revenues; therefore the loss of principal customers could adversely
affect our revenues.

No single advertising customer accounted for more than 10% of our revenue in
1998 or 1999. Our four largest advertising customers were responsible for
approximately 30% of our revenues during 1998, and our ten largest advertising
customers were responsible for approximately 25% of our revenues during 1999.
We do not have long-term contracts with most of our customers, and customers
can generally terminate their relationships with us upon specified notice and
without penalties. Thus, we may not be able to retain our principal customers.
The loss of one or more of our principal customers could have a material
adverse effect on our revenues.

Our prospects for obtaining additional financing, if required, are uncertain
and failure to obtain needed financing could affect our ability to pursue
future growth.

We may need to raise additional funds to develop or enhance our services or
products, to fund expansion, to respond to competitive pressures or to acquire
complementary products, businesses or technologies. We cannot assure you that
additional financing will be available on terms favorable to us, or at all. If
additional funds are raised through the issuance of equity or convertible debt
securities, the percentage ownership of our stockholders would be reduced and
these securities might have rights, preferences or privileges senior to those
of our current stockholders. If adequate funds are not available on acceptable
terms, our ability to fund our expansion, take advantage of unanticipated
opportunities, develop or enhance services or products, or otherwise respond to
competitive pressures would be significantly limited.

We depend on the services of our executive officers and key employees to manage
our growth, and there is no assurance we can retain their services.

Our future success depends on the continued service of our key senior
management and technical and sales personnel. The loss of any of these persons
could have a material adverse effect on our business. We do not have key-person
insurance on any of our employees. Robert C. Hoyler, our President and Chief
Operating Officer, Steven E. Parker, our Senior Vice President, Marketing, and
Frank J. Pirri, our Senior Vice President, Offline Commerce, joined us in
December 1998 as the result of acquisition transactions that took place in the
fourth quarter of 1998. Charles H. Berman, our Executive Vice President, Sales,
also joined us in 1998. Tom Caldwell, our former Senior Vice President, Finance
and Chief Financial Officer resigned in May 2000. In addition, Eugene A.
Pierce, our former Senior Vice President, Technology, left the company in June
2000. Our recently integrated management team has limited experience working
together.

Our success depends on our ability to attract, retain and motivate highly
skilled employees. Competition for employees in our industry is intense. We may
be unable to retain our key employees or to attract, assimilate and retain
other highly qualified employees in the future. We have experienced difficulty
from time to time in attracting the personnel necessary to support the growth
of our business, and we may experience similar difficulty in the future.

Failure to safeguard our database and member privacy could affect our
reputation among consumers.

An important feature of the MyPoints program is our ability to develop and
maintain individual member profiles. Security and privacy concerns may cause
consumers to resist providing the personal data necessary to support this
profiling capability. As a result of these security and privacy concerns, we
may incur significant costs to protect against the threat of security breaches
or to alleviate problems caused by such breaches. Usage of our MyPoints program
could decline if any well-publicized compromise of security occurred. In
addition, third parties could alter information in our database that would
adversely affect our ability to target direct marketing offers to members. We
could also be subject to legal claims from members. Any public perception that
we engaged in unauthorized release of member information would adversely affect
our ability to attract and retain members.

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As part of our point redemption services, we maintain a database containing
information on our members' account balances. Our database may be subject to
access by unauthorized users accessing our systems remotely. If we experience a
security breach, the integrity of our points database could be affected. This
breach could lead to financial losses through the unauthorized redemption of
points.

We are vulnerable to system failures which could cause interruptions or
disruptions in our service.

The hardware infrastructure on which the MyPoints system operates is located
at the Exodus Communications data center in Jersey City, New Jersey. In April
1999, we completed a transition to Exodus from a combination of internally
maintained systems and systems maintained by another third-party service
provider. We cannot assure you that we will be able to manage this relationship
successfully to mitigate any risks associated with having our hardware
infrastructure maintained by Exodus. Unexpected events such as natural
disasters, power losses and vandalism could damage our systems.
Telecommunications failures, computer viruses, electronic break-ins or other
similar disruptive problems could adversely affect the operation of our
systems. Our insurance policies may not adequately compensate us for any losses
that may occur due to any damages or interruptions in our systems. Accordingly,
we could be required to make capital expenditures in the event of damage. We do
not currently have fully redundant systems or a formal disaster recovery plan.

Periodically we experience unscheduled system downtime, which results in our
web site being inaccessible to members. In particular, during the relaunch of
the integrated MyPoints program in April 1999, we experienced significant
periods of system downtime during which our web site was inaccessible. Although
we did not suffer material losses during these downtimes, if these problems
persist in the future, members and advertisers could lose confidence in our
services.

System capacity constraints may result in a loss of revenues.

A substantial increase in the use of our products and services could strain
the capacity of our systems, which could lead to slower response time or system
failures. System failures or slowdowns adversely affect the speed and
responsiveness of our rewards transaction processing. These would diminish the
experience for our members and reduce the number of transactions, and thus,
could reduce our revenue. Although we have designed and tested our system to
handle several times the highest daily transaction volume we have experienced
to date, the ability of our systems to manage this volume of transactions in a
production environment is unknown. As a result, we face risks related to our
ability to scale up to our expected transaction levels while maintaining
satisfactory performance. If our transaction volume increases significantly, we
will need to purchase additional servers and networking equipment to maintain
adequate data transmission speeds. The availability of these products and
related services may be limited or their cost may be significant.

We face risks associated with third party claims and protection of our
intellectual property rights, and any litigation relating to intellectual
property rights could harm our business.

Our business activities may infringe upon the proprietary rights of others,
and other parties may assert infringement claims against us. We have received
three claims of alleged infringement, one of which has been resolved through a
license agreement. Another infringement claim was made by Cybergold in May
1999. If the merger is not consummated and this claim cannot be resolved
through a license or similar arrangement, we could become a party to litigation
with Cybergold. Also, in July 1999, we received an infringement claim from
another party, along with an offer to grant a license to us at a cost that
would not be material. To our knowledge, no litigation has been filed against
us based on this claim. We are evaluating the claim and have not yet begun
substantive discussions regarding it. Litigation may also be necessary to
enforce our intellectual property rights, to protect our trade secrets or to
determine the validity and scope of the proprietary rights of others. An
adverse determination in any litigation of this type could require us to make
significant changes to the structure and operation of our online rewards
program, attempt to design around a third party's patent, or license
alternative technology from another party. Implementation of any of these
alternatives could be costly and time consuming, and might not be possible. In
addition, any intellectual property litigation, even if successfully defended,
would result in substantial costs and diversion of resources and management
attention.

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<PAGE>

Our success and ability to compete depends on our internally developed
technologies and trademarks, which we seek to protect through a combination of
patent, copyright, trade secret and trademark laws. Despite actions we take to
protect our proprietary rights, it may be possible for third parties to copy or
otherwise obtain and use our proprietary information without authorization or
to develop similar technology independently. In addition, legal standards
relating to the validity, enforceability and scope of protection of proprietary
rights in internet-related businesses are uncertain and still evolving. We
cannot give any assurance regarding the future viability or value of any of our
proprietary rights. In addition, we cannot give any assurance that the steps
taken by us will prevent misappropriation or infringement of our proprietary
information. Any infringement or misappropriation, should it occur, could have
a material adverse effect on any competitive advantage incident to our
proprietary rights.

The majority of our customers are Internet companies and our business will be
seriously harmed if the Internet does not become a viable commercial
marketplace.

The majority of our customers are Internet companies that are dependent upon
the acceptance of the Internet as a viable commercial marketplace.
Additionally, many of our customers have suffered significant operating losses
and negative cash flow. If the use of the Internet for e-commerce transactions
and as an advertising medium does not continue to grow or our customers
continue to suffer operating losses and negative cash flow, we could lose a
substantial portion of our customer base, which would seriously harm our
business and financial condition.

As we expand our business internationally, we may need to adopt our products
and services and we may be subject to foreign government regulation and
taxation, currency issues, difficulties in managing foreign operations and
foreign political economic instability.

An element of our growth strategy is to further introduce our services in
international markets. Our participation in international markets will be
subject to our potential inability to adapt, expand or enhance our products and
services to suit foreign markets. In addition, international operations are
generally associated with risks such as foreign government regulations, export
license requirements, tariffs and taxes, fluctuations in currency exchange
rates, introduction of the European Union common currency, difficulties in
managing foreign operations and political and economic instability. To the
extent our potential international members or our international partners are
impacted by currency devaluations, general economic crises or other
macroeconomic events, the ability of our members to utilize our services could
be diminished. In order to help us address some of the risks associated with
introducing our services internationally, we believe it will be necessary to
establish strategic relationships with international partners. We cannot assure
you that electronic commerce will develop successfully in international markets
or that potential members in these foreign markets will utilize incentives-
based marketing programs. Furthermore, we cannot assure you that we will be
able to overcome any legal restrictions related to offering rewards and
incentives that may exist in foreign jurisdictions. Any failure to develop our
business internationally may harm our competitive position and consequently our
business.

In addition, each Cybergold stockholder should carefully consider the risk
factors set forth in the prospectus relating to the distribution of the Paytech
business, which has been or will be mailed to the Cybergold stockholders, for
risks relating to the distribution by Cybergold of the Paytech business.

25
<PAGE>

THE MYPOINTS MEETING

Date, time and place of MyPoints's special meeting

The date, time and place of the special meeting of MyPoints stockholders are
as follows:

August 3, 2000
10:00 a.m. Pacific Time
Wilson Sonsini Goodrich & Rosati
One Market, Spear Street Tower, 33rd Floor
San Francisco, California

Purpose of the special meeting

The special meeting is being held so that MyPoints stockholders may consider
and vote upon a proposal to approve issuance of MyPoints common stock in a
merger with Cybergold, Inc. that will cause Cybergold to become a wholly-owned
subsidiary of MyPoints. The merger agreement is included as Annex A to the
attached proxy statement/prospectus. If the merger is approved, among other
things:

. Mygo Acquisition Corporation, a wholly-owned subsidiary of MyPoints, will
merge with and into Cybergold.

. MyPoints will issue shares of common stock in the merger as contemplated
by the merger agreement. MyPoints will issue 0.480 shares of MyPoints
common stock for each share of outstanding Cybergold common stock.

Record date and outstanding shares

MyPoints's board of directors has fixed the close of business on June 23,
2000 as the record date for the special meeting. Only holders of record of
MyPoints common stock at the close of business on the record date are entitled
to notice of and to vote at the meeting. As of the close of business on the
record date, there were shares of MyPoints common stock outstanding and
entitled to vote, held of record by approximately stockholders, although
MyPoints has been informed that there are in excess of beneficial owners.

Vote and quorum required

Holders of MyPoints's common stock are entitled to one vote for each share
held as of the record date. Approval of the proposal to be voted upon by
MyPoints stockholders requires the affirmative vote of a majority of the common
stock of MyPoints present or represented by proxy. Attendance at the meeting in
person or by proxy of a majority of the outstanding common stock of MyPoints is
required for a quorum.

As of March 31, 2000, directors, executive officers and affiliates of
MyPoints as a group beneficially owned approximately 39.03% of the outstanding
shares of MyPoints common stock.

Abstentions; broker non-votes

Abstentions will be included in determining the number of shares present and
voting at the meeting and will have the same effect as votes AGAINST these
proposals. In the event that a broker, bank, custodian, nominee or other record
holder of MyPoints common stock indicates on a proxy that it does not have
discretionary authority to vote certain shares on a particular matter, which is
called a broker non-vote, those shares will not be considered for purposes of
determining the number of shares entitled to vote with respect to a particular
proposal on which the broker has expressly not voted, but will be counted for
purposes of determining the presence or absence of a quorum for the transaction
of business.

Expenses of proxy solicitation

MyPoints will pay the expenses of soliciting proxies to be voted at the
meeting except that Cybergold will share equally the expenses incurred in
connection with filing and printing this proxy statement/prospectus.

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<PAGE>

Following the original mailing of the proxies and other soliciting materials,
MyPoints and its agents also may solicit proxies by mail, telephone, telegraph
or in person. Following the original mailing of the proxies and other
soliciting materials, MyPoints will request brokers, custodians, nominees and
other record holders of MyPoints common stock to forward copies of the proxy
and other soliciting materials to persons for whom they hold shares of MyPoints
common stock and to request authority for the exercise of proxies. In such
cases, MyPoints upon the request of the record holders, will reimburse such
holders for their reasonable expenses.

Proxies

The proxy accompanying this proxy statement/prospectus is solicited on
behalf of the MyPoints board of directors for use at the special meeting.
Please complete, date and sign the accompanying proxy and promptly return it in
the enclosed envelope or otherwise mail it to MyPoints. All properly signed
proxies that MyPoints receives prior to the vote at the meeting and that are
not revoked will be voted at the meeting according to the instructions
indicated on the proxies or, if no direction is indicated, to approve the
merger. You may revoke it at any time before it is exercised at the meeting by
taking any of the following actions:

. delivering a written notice to the Secretary of MyPoints by any means,
including facsimile, bearing a date later than the date of the proxy,
stating that the proxy is revoked

. signing and delivering a proxy relating to the same shares and bearing a
later date prior to the vote at the meeting

. attending the meeting and voting in person, although attendance at the
meeting will not, by itself, revoke a proxy. Please note, however, that
if your shares are held of record by a broker, bank or other nominee and
you wish to vote at the meeting, you must bring to the meeting a letter
from the broker, bank or other nominee confirming your beneficial
ownership of the shares.

MyPoints's board of directors does not know of any matter that is not
referred to in this proxy statement/prospectus to be presented for action at
the meeting. If any other matters are properly brought before the meeting, the
persons named in the proxies will have discretion to vote on such matters in
accordance with their best judgment.

Recommendation of the Board of Directors

The board of directors of MyPoints has unanimously determined that the terms
of the merger agreement and the merger are in the best interests of MyPoints
and the MyPoints stockholders. Accordingly, the MyPoints board of directors
recommends that MyPoints stockholders vote FOR the merger and issuance of
MyPoints stock in connection with the merger.

To assure that your shares are represented at the meeting, please complete,
date and sign the enclosed proxy and mail it promptly in the postage-paid
envelope provided, whether or not you plan to attend the meeting. You may
revoke your proxy at any time before it is voted.

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<PAGE>

THE CYBERGOLD MEETING

Date, place and time of Cybergold's special meeting

The special meeting of Cybergold's stockholders will be held on August 3,
2000, at Cybergold's principal executive offices at 1330 Broadway, 12th Floor,
Oakland, California, commencing at 10:00 a.m., local time.

Purpose of the special meeting

MyPoints and Cybergold are furnishing this proxy statement/prospectus to
Cybergold stockholders in connection with the solicitation of proxies by
Cybergold's board of directors. The Cybergold board of directors will use the
proxies at the special meeting of stockholders of Cybergold to be held on
August 3, 2000 and at any adjournment or postponement thereof.

At the special meeting, Cybergold's stockholders will be asked to vote upon
the proposal to approve the agreement and plan of merger and reorganization
attached to this proxy statement/prospectus as Annex A and to authorize the
merger of a wholly-owned subsidiary of MyPoints into Cybergold.

Record date and outstanding shares

The Cybergold board of directors fixed the close of business on June 23,
2000 as the record date for the special meeting. Only holders of Cybergold
capital stock of record at the close of business on the record date, will be
entitled to notice of, and to vote at, the special meeting. At the close of
business on the record date, there were shares of Cybergold common stock
outstanding and entitled to vote, held by approximately holders of record,
although Cybergold has been informed that there are in excess of
beneficial owners.

Vote and quorum required

Each share of Cybergold common stock entitles the holder thereof to one
vote. The attendance in person or by proxy of holders of a majority of
Cybergold's common stock is necessary for a quorum to exist at the special
meeting. Approval of the agreement and plan of merger and authorization of the
merger requires the affirmative vote of the holders of a majority of the
outstanding shares of Cybergold common stock.

The holders of approximately 44% of the outstanding shares of Cybergold
common stock, including A. Nathaniel Goldhaber, have agreed to vote in favor of
the merger agreement and the merger.

On the record date, Cybergold's directors and executive officers and
affiliates owned shares, or approximately % of the outstanding shares of
Cybergold common stock. This number does not include stock that the Cybergold
directors and executive officers may acquire through the exercise of stock
options or warrants, or upon the conversion of warrants.

Abstentions; broker non-votes

Abstentions will be included in determining the number of shares present and
voting at the meeting and will have the same effect as votes AGAINST these
proposals. In the event that a broker, bank, custodian, nominee or other record
holder of Cybergold common stock indicates on a proxy that it does not have
discretionary authority to vote certain shares on a particular matter, which is
called a broker non-vote, those shares will not be considered for purposes of
determining the number of shares entitled to vote with respect to a particular
proposal on which the broker has expressly not voted, but will be counted for
purposes of determining the presence or absence of a quorum for the transaction
of business.

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<PAGE>

Proxies

All properly executed proxies received before the vote at the special
meeting, and not revoked, will be voted in accordance with the instructions
indicated on the proxies. If no instructions are indicated, such proxies will
be voted FOR the proposal to approve the merger agreement and the merger, and
the proxy holder may vote the proxy in its discretion as to any other matter
which may properly come before the meeting.

Any abstention will have the same effect as a vote AGAINST the approval of
the merger agreement and the merger.

A Cybergold stockholder who has given a proxy solicited by Cybergold's board
of directors may revoke it by:

. giving written notice of revocation to the Secretary of Cybergold,

. delivering a later dated proxy to the Secretary of Cybergold, or

. attending the special meeting and voting in person.

Any written notice of revocation or subsequent proxy must be sent so as to
be delivered at or before the taking of the vote at the special meeting to
Cybergold, Inc., 1330 Broadway, 12th floor, Oakland, CA 94612, Attention: Jack
Krasner.

Expenses of Proxy Solicitation

The expenses of the solicitation of proxies for the special meeting will be
borne by Cybergold, except that MyPoints will share equally the expenses
incurred in connection with filing and printing this proxy statement/
prospectus. In addition to solicitation by mail, directors, officers and key
employees of Cybergold may solicit proxies in person or by telephone, telegram
or other means of communication. These persons will receive no additional
compensation for solicitation of proxies, but may be reimbursed for reasonable
out-of-pocket expenses.

You should not send in any stock certificates with your proxies. A
transmittal form with instructions for the surrender of stock certificates for
shares of Cybergold will be mailed to you as soon as practicable after
completion of the merger.

Appraisal Rights

Appraisal rights are not available with respect to a merger or consolidation
by a corporation the shares of which are either listed on a national securities
exchange or Nasdaq or held of record by more than 2,000 stockholders if such
stockholders are required to receive only shares of the surviving corporation,
shares of any other corporation which are either listed on a national
securities exchange or held of record by more than 2,000 holders, cash in lieu
of fractional shares or a combination of the foregoing. Therefore, stockholders
of Cybergold will not be able to exercise any appraisal rights in connection
with this merger.

Recommendation of the board of directors

The board of directors of Cybergold has unanimously determined that the
terms of the merger agreement and the merger are in the best interests of
Cybergold and the Cybergold stockholders. Accordingly, the Cybergold board of
directors recommends that Cybergold stockholders vote FOR the proposal to
approve the merger agreement and the merger.

To assure that your shares are represented at the meeting, please complete,
date and sign the enclosed proxy and mail it promptly in the postage-paid
envelope provided, whether or not you plan to attend the meeting. You may
revoke your proxy at any time before it is voted.

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<PAGE>

THE MERGER

This section of the proxy statement/prospectus describes the proposed
merger. While we believe that the description covers the material terms of the
merger and the related transactions, this summary may not contain all of the
information that is important to you. You should carefully read this entire
document and the other documents we referred to for a more complete
understanding of the merger.

Background of the Merger and Related Agreements

On March 12, 2000, Steven Markowitz, MyPoints's Chief Executive Officer, met
with A. Nathaniel Goldhaber, President and Chief Executive Officer of
Cybergold. At this meeting they discussed the relative strengths of their
respective companies and each company's position in the internet-based direct
marketing sector. They discussed the strategic advantages of combining the
complementary strengths of the two companies and the merits of a possible
business combination.

In various telephone calls between March 11, 2000 and April 14, 2000, at the
direction of their respective clients, representatives of Goldman Sachs & Co.
and representatives of FleetBoston Robertson Stephens, MyPoints's financial
advisor, discussed the businesses and prospects of Cybergold and MyPoints,
relative market valuations and potential business and financial terms of a
possible business combination.

On March 14, 2000, MyPoints's board of directors met. Mr. Markowitz reviewed
with the board the strategic rationale for a proposed transaction, and
Robertson Stephens gave a preliminary presentation regarding Cybergold and a
possible transaction. The board then generally discussed a potential
combination with Cybergold and its risks and benefits. At the conclusion of the
meeting, the board instructed MyPoints's management to continue discussions
with Cybergold. From March 12, 2000 to the execution of the merger agreement on
April 14, 2000, members of MyPoints's senior management discussed the progress
of the negotiations with MyPoints's outside directors on a regular basis.

On March 19, 2000, Mr. Markowitz and Layton Han, Vice President, Business
Development and Chief Financial Officer of MyPoints, and Chris Greer and Anand
Gowda of Robertson Stephens met with Mr. Goldhaber, John Steuart, Chief
Financial Officer of Cybergold, and Gary Fitts, Chief Technology Officer of
Cybergold, to discuss the businesses of MyPoints and Cybergold and the general
terms of a business combination between the two companies.

On March 20, 2000, Mr. Markowitz briefed MyPoints's board of directors at a
telephonic board meeting on the status of their discussions with Cybergold.
MyPoints's board of directors authorized Mr. Markowitz and the company's
advisors to proceed with discussions with Cybergold. Subsequently on March 20,
2000, the Company delivered a term sheet to Cybergold related to the proposed
transaction.

On March 28, 2000 and March 29, 2000, Messrs. Markowitz, Han, Goldhaber and
Steuart met in London to discuss the potential structure of the merger and the
terms of the distribution of Cybergold's Paytech business.

On April 3, 2000, the Cybergold board received materials prepared by
Cybergold's senior management with the assistance of Cybergold's legal and
financial advisors explaining the proposed transaction, including the terms of
the merger, and containing a financial analysis of the merger.

On April 4, 2000, MyPoints and Cybergold entered into non-disclosure
agreements.

From April 5, 2000 through April 14, 2000, MyPoints and Cybergold, together
with their respective legal, financial and accounting advisors, conducted
extensive due diligence reviews and engaged in negotiation of the terms of the
merger agreement and the other related agreements.

On April 5, 2000, Cybergold's board of directors met at the Cybergold
offices with all of the directors attending to review the materials and the
status of the proposed transaction. Mr. Steuart and Mr. Goldhaber

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<PAGE>

discussed the status of negotiations with MyPoints, the outstanding issues
regarding the merger and the comments and questions raised by the directors.
The board of directors instructed Cybergold's senior management to continue
discussions with Cybergold.

On April 6, 2000, Mr. Goldhaber and other members of Cybergold's senior
management met with members of MyPoints's senior management to further the
discussions of the proposed merger.

On April 7, 2000, Mr. Goldhaber and Mr. Steuart met with some of Cybergold's
directors to provide an update of the discussions with MyPoints.

On April 7, 2000, MyPoints's board of directors met via teleconference with
senior management and MyPoints's legal, financial and accounting advisors at a
special telephonic meeting to discuss the status of the negotiations with
Cybergold, open issues, MyPoints's due diligence review of Cybergold and the
directors' comments on the draft of documentation previously forwarded by
MyPoints's legal advisors. Robertson Stephens presented various preliminary
financial analyses regarding the proposed merger. This discussion was followed
by a presentation by members of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, MyPoints's outside legal counsel, of the board's fiduciary duties,
the proposed terms of the merger agreement, the structure of the transaction
and related documents.

At the conclusion of this April 7, 2000 meeting, the MyPoints board
authorized senior management and MyPoints's legal and financial advisors to
continue discussions with Cybergold.

On April 10, 2000, MyPoints's board of directors met again with senior
management and representatives of Robertson Stephens and Wilson Sonsini
Goodrich & Rosati at a special telephonic meeting of the board to review the
status of the negotiations with Cybergold, the terms of the draft merger
agreement, the open issues and MyPoints's due diligence review of Cybergold.

On April 10, 11, and 13, 2000, Cybergold's board of directors met via
teleconference with Mr. Goldhaber, Mr. Steuart, other members of Cybergold's
senior management and representatives of Goldman, Sachs & Co. and Morrison &
Foerster, LLP. All of the directors were present at the meetings. Mr. Goldhaber
and Mr. Steuart provided the board of directors a review of the status of the
negotiations with MyPoints, the terms of the draft merger agreement and an
updated financial analysis of the proposed merger. The board of directors also
received updates of Cybergold's due diligence review of MyPoints.

On April 12, 2000, MyPoints and Cybergold entered into new non-disclosure
agreements.

On April 14, 2000, Cybergold's board of directors met to review the final
merger agreement. Mr. Goldhaber and other members of Cybergold's senior
management reviewed the terms of the merger and related transactions with the
board of directors. Morrison & Foerster reviewed the legal standards that the
board should consider in evaluating the merger, including a review of the
directors' fiduciary duties and discussed with the board the terms of the
merger agreement and related documents. Goldman, Sachs & Co. made a
presentation to the board of directors regarding the merger, reviewing the
strategic rationale for the merger and the various analyses used by Goldman,
Sachs to assess the fairness of the merger. Goldman, Sachs orally informed the
board of directors of the opinion of Goldman, Sachs (subsequently confirmed in
writing) that the exchange ratio was fair, from a financial point of view, to
holders of Cybergold's common stock. For a more detailed discussion of such
analysis and opinion, see "Opinion of Goldman, Sachs & Co., Financial Advisor
to Cybergold" below. The directors discussed the merger with, and asked
questions of, the members of Cybergold's management present at the meeting,
Cybergold's legal and financial advisors, including a discussion of
alternatives to the proposed structure of the merger and the assumptions made
with regard to the opinion of Goldman, Sachs. After a thorough discussion of
the merger and related transactions, Cybergold's board of directors unanimously
approved the merger and the terms of the merger agreement and related documents
and authorized management to proceed with the execution of the merger agreement
and related documents.

On April 14, 2000, MyPoints's board of directors met to review the final
merger agreement. At this meeting, representatives of Robertson Stephens
reviewed updated financial terms of the transaction and orally

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<PAGE>

informed MyPoints's board of directors of its opinion (subsequently confirmed
in writing) that the exchange ratio was fair, from a financial point of view,
to MyPoints. Robertson Stephens also responded to questions raised by members
of MyPoints's board of directors regarding its analysis and opinion. For a more
detailed discussion of such analysis and opinion, see "Opinion of MyPoints's
Financial Advisor" below. MyPoints's management reviewed the other terms of the
merger with the board. Wilson Sonsini Goodrich & Rosati
discussed the board's fiduciary obligations and terms of the merger agreement
and related documents. Following these presentations, the board engaged in a
full discussion of the terms of the proposed merger, including the strategic
benefits of the combination, the terms and conditions of the proposed merger
agreement, and the analysis and opinion of Robertson Stephens. MyPoints's board
of directors concluded that the merger agreement was fair to MyPoints's
stockholders and that the proposed merger was in the best interests of MyPoints
and its stockholders. At the conclusion of the meeting, MyPoints's board of
directors unanimously approved the merger and the terms of the merger agreement
and related documents and authorized management to proceed with the execution
of the transaction documents.

During the evening of April 14, 2000, the parties executed the merger
agreement and the related transaction documents. The merger was jointly
announced by MyPoints and Cybergold on the morning of April 17, 2000.

The parties amended the merger agreement on June 20, 2000 to provide that
the spin-off of the Paytech business could be accomplished before or after the
closing of the merger so long as the record date for that distribution is set
prior to the merger closing. In addition, this amendment provides that if the
Paytech disposition does not occur prior to September 30, 2000, MyPoints may
elect not to effectuate it and instead dividend to former Cybergold
stockholders $5,000,000 in cash less Paytech operating expenses incurred since
the closing of the merger.

MyPoints's Reasons for the Merger

At a meeting held on April 14, 2000, the board of directors of MyPoints
concluded that the merger was in the best interests of MyPoints and its
stockholders and determined to recommend that the stockholders approve the
merger. In its evaluation of the merger, MyPoints's board of directors
identified several potential benefits of the merger, the most important of
which included the board's expectation that:

. the acquisition would provide a growth opportunity for MyPoints, and help
provide the opportunity to achieve a leading market position;

. the advantages associated with the acquisition of Cybergold's patents;

. the potential synergies of the combined companies in marketing,
technology and sales;

. the merger and its related synergies may help enable MyPoints accelerate
its revenue growth and timing to achieve profitability; and

. MyPoints would acquire a pool of talented and highly skilled employees
with proven capabilities in a tight labor market.

MyPoints's board of directors consulted with senior management, as well as
its legal counsel, independent accountants and financial advisors, in reaching
its decision to approve the merger. In its evaluation of the merger, the
MyPoints board reviewed several factors, including, but not limited to, the
following:

. historical information concerning MyPoints's and Cybergold's respective
businesses, financial performance and condition, operations, technology
and management, including reports concerning results of operations during
the most recent fiscal quarter for each company filed with the SEC;

. MyPoints management's view of the financial condition, results of
operations and businesses of MyPoints and Cybergold before and after
giving effect to the merger and the MyPoints board's determination of the
merger's effect on stockholder value;

. current financial market conditions and historical market prices,
volatility and trading information;

. the consideration Cybergold stockholders will receive in the merger in
light of comparable transactions;

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<PAGE>

. the opinion of Robertson Stephens that, as of the date of its opinion and
subject to the considerations described in the opinion, the exchange
ratio in the merger is fair from a financial point of view to MyPoints
stockholders;

. the belief that the terms of merger agreement are reasonable;

. the impact of the merger on MyPoints's customers and employees; and

. reports from management, legal, financial and accounting advisors as to
the results of the due diligence investigation of Cybergold.

The MyPoints board also identified and considered a number of potentially
negative factors in its deliberations concerning the merger including the
following:

. the risk that the potential benefits of the merger may not be realized;

. the possibility that the merger may not be consummated, even if approved
by MyPoints's and Cybergold's stockholders;

. the effect of the public announcement of the merger on Cybergold's sales
and customer relations;

. the risk of management and employee disruption associated with the
merger, including the risk that despite the efforts of the combined
company, key technical, sales and management personnel might not remain
employed by the combined company;

. the risk that the merger could adversely affect MyPoints's relationship
with certain of its customers and strategic partners; and

. other applicable risks described in this proxy statement/prospectus under
"Risk Factors" on page 16.

The board concluded that, on balance, the potential benefits to MyPoints and
its stockholders of the merger outweighed the risks associated with the merger.
The discussion of the information and factors considered by the MyPoints board
is not intended to be exhaustive. In view of the variety of factors considered
in connection with its evaluation of the merger, the MyPoints board did not
find it practicable to, and did not quantify or otherwise assign relative
weight to, the specific factors considered in reaching its determination.

Recommendation of MyPoints's Board of Directors

After careful consideration, the MyPoints board of directors has determined
the merger agreement and the merger to be fair to and in the best interests of
its stockholders. In connection with the merger, MyPoints's board of directors
recommends approval of the issuance of shares of MyPoints common stock in the
merger as described in this proxy statement/prospectus.

Cybergold's Reasons for the Merger

Cybergold's board of directors has determined that the terms of the merger
and the merger agreement are fair to, and in the best interests of, Cybergold
and its stockholders. Accordingly, Cybergold's board of directors has approved
the merger agreement and the consummation of the merger and recommends that you
vote FOR approval of the merger agreement and the merger.

In reaching its decision, Cybergold's board of directors identified several
potential benefits of the merger, the most important of which included:

. the value of combining the customer bases, marketing efforts and
management teams of the two companies;

. the historical ability of MyPoints to generate revenues from its
registered users at a higher rate than Cybergold;

. the ability to distribute the Paytech business to Cybergold's
stockholders, allowing the stockholders to participate in the potential
appreciation in value of the Paytech business;

33
<PAGE>

. the potential for greater analyst coverage and market support for the
combined company and the potential for greater liquidity in the common
stock of the combined entity;

. the available cash reserves of MyPoints; and

. the fact that the exchange ratio represented a premium over the
historical relative market price performance of Cybergold's and
MyPoints's common stock.

Cybergold's board of directors consulted with Cybergold's senior management,
as well as its legal counsel, independent accountants and financial advisors,
in reaching its decision to approve the merger. Among the factors considered by
Cybergold's board of directors in its deliberations were the following:

. the financial condition, results of operations, cash flow, business and
prospects of MyPoints and Cybergold;

. the current economic and industry environment;

. the complementary nature of the technological approaches of the two
companies;

. the number of companies pursuing the Internet direct marketing sector and
overall size of the sector;

. the current financial market conditions and historical market prices,
volatility and trading information;

. the due diligence investigation of MyPoints conducted by Cybergold's
management, and its legal and financial advisors;

. the belief that the terms of the merger agreement are reasonable;

. the impact of the merger on Cybergold's customers and employees; and

. the opinion of Goldman Sachs & Co. that, as of the date of its opinion
and subject to the considerations described in the opinion, the exchange
ratio in the merger is fair from a financial point of view to Cybergold's
stockholders.

Cybergold's board of directors also identified and considered a number of
uncertainties and risks in its deliberations concerning the merger, including
the following:

. the risk that the potential benefits sought in the merger might not be
fully realized, if at all;

. the risk that the merger might not be consummated;

. the effect of the public announcement of the merger on Cybergold's (a)
sales, operating results and stock price and (b) ability to attract and
retain key management, sales and marketing and technical personnel;

. risks associated with fluctuations in MyPoints's stock price prior to the
closing of the merger;

. tax liability to be incurred by Cybergold and its stockholders in
connection with the distribution of the Paytech business; and

. the other risks associated with the business of MyPoints, Cybergold and
the merged companies and the merger described in this proxy
statement/prospectus under "Risk Factors" on page 16.

As a result of the foregoing considerations, Cybergold's board of directors
determined that the potential advantages of the merger outweighed the benefits
of remaining a separate company. Cybergold's board of directors believes that
the combined company will have a far greater opportunity than Cybergold alone
to compete in its industry.

The discussion of the information and factors considered by the Cybergold
board is not intended to be exhaustive. In view of the variety of factors
considered in connection with its evaluation of the merger, the Cybergold board
did not find it practicable to, and did not quantify or otherwise assign
relative weight to, the specific factors considered in reaching its
determination.

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<PAGE>

Recommendation of Cybergold's Board of Directors

After careful consideration, Cybergold's board of directors unanimously
determined the merger agreement and the merger to be fair to and in the best
interests of its stockholders. In connection with the merger, Cybergold's board
of directors recommends approval and adoption of the merger agreement and the
merger as described in this proxy statement/prospectus.

In considering the recommendation of Cybergold's board of directors with
respect to the merger agreement, you should be aware that some directors and
officers of Cybergold have interests in the merger that are different from, or
are in addition to the interests of Cybergold stockholders generally. Please
see the section entitled "Interests of Certain Directors, Officers and
Affiliates in the Merger" on page 45 of this proxy statement/prospectus.

Opinion of MyPoints's Financial Advisor

Pursuant to an engagement letter dated February 17, 2000, MyPoints engaged
FleetBoston Robertson Stephens Inc., or Robertson Stephens, to render an
opinion as to the fairness of the exchange ratio, from a financial point of
view, to MyPoints.

On April 14, 2000 at a meeting of the MyPoints board held to evaluate the
proposed merger, Robertson Stephens delivered to the MyPoints board its oral
opinion, which was subsequently confirmed in writing as of April 14, 2000,
that, as of such date and based on the assumptions made, the matters considered
and the limitations on the review undertaken described in the opinion, the
exchange ratio was fair from a financial point of view to MyPoints. No
limitations were imposed by the MyPoints board on Robertson Stephens with
respect to the investigations made or procedures followed by it in furnishing
its opinion. The exchange ratio was determined through negotiations between the
respective managements of MyPoints and Cybergold. Robertson Stephens was not
asked by, and did not recommend to, MyPoints that any specific exchange ratio
constituted the appropriate exchange ratio for the merger.

The full text of the Robertson Stephens opinion, which sets forth, among
other things, assumptions made, matters considered and limitations on the
review undertaken, is attached as Annex B and is incorporated in this proxy
statement/prospectus by reference. We urge MyPoints stockholders to read the
Robertson Stephens opinion in its entirety. The Robertson Stephens opinion was
prepared for the benefit and use of the MyPoints board in its consideration of
the merger and does not constitute a recommendation to stockholders of MyPoints
as to how they should vote upon, or take any other action with respect to, the
merger.

The Robertson Stephens opinion does not address:

. the relative merits of the merger and the other business strategies that
the MyPoints board has considered or may be considering; or

. the underlying business decision of the MyPoints board to proceed with
the merger.

The summary of the Robertson Stephens opinion set forth in this proxy
statement/prospectus is qualified in its entirety by reference to the full text
of the Robertson Stephens opinion.

In connection with the preparation of the Robertson Stephens opinion,
Robertson Stephens, among other things:

. reviewed certain publicly available financial statements and other
business and financial information of Cybergold and MyPoints,
respectively;

. reviewed certain internal financial statements and other financial and
operating data, including certain financial forecasts and other forward
looking financial information, concerning Cybergold and MyPoints prepared
by the managements of Cybergold and MyPoints, respectively;

35
<PAGE>

. reviewed with Cybergold and MyPoints certain publicly available estimates
of research analysts regarding Cybergold and MyPoints;

. held discussions with the respective managements of Cybergold and
MyPoints concerning the businesses, past and current operations,
financial condition and future prospects of both of Cybergold and
MyPoints, independently and combined, including discussions with the
managements of Cybergold and MyPoints concerning the cost savings and
other synergies that are expected to result from the merger, as well as
their views regarding the strategic rationale for the merger;

. reviewed the financial terms and conditions set forth in the merger
agreement;

. reviewed the stock price and trading history of Cybergold common stock
and MyPoints common stock;

. compared the financial performance of Cybergold and the prices and
trading activity of Cybergold common stock with that of certain other
publicly traded companies comparable with Cybergold;

. compared the financial terms of the merger with the financial terms, to
the extent publicly available, of other transactions it deemed relevant;

. reviewed the pro forma impact of the merger on MyPoints revenues per
share;

. prepared an analysis of the relative contributions of Cybergold and
MyPoints to the combined company;

. participated in discussions among representatives of Cybergold and
MyPoints and their financial and legal advisors; and

. made such other studies and inquiries, and reviewed such other data, as
it deemed relevant.

In its review and analysis, and in arriving at its opinion, Robertson
Stephens assumed and relied upon the accuracy and completeness of all of the
financial and other information provided to it (including information furnished
to it orally or otherwise discussed with it by the management of Cybergold and
MyPoints) or publicly available and neither attempted to verify, nor assumed
responsibility for verifying, any of such information. Robertson Stephens
relied upon the assurances of management of Cybergold and MyPoints that they
were not aware of any facts that would make such information inaccurate or
misleading. Furthermore, Robertson Stephens did not obtain or make, or assume
any responsibility for obtaining or making, any independent evaluation or
appraisal of the properties, assets or liabilities (contingent or otherwise) of
Cybergold or MyPoints, nor was Robertson Stephens furnished with any such
evaluation or appraisal.

With respect to the financial forecasts and projections (and the assumptions
and bases therefor) for each of Cybergold and MyPoints that Robertson Stephens
reviewed, Robertson Stephens assumed that such forecasts and projections:

. had been reasonably prepared in good faith on the basis of reasonable
assumptions;

. reflected the best available estimates and judgments as to the future
financial condition and performance of Cybergold and MyPoints,
respectively; and

. will be realized in the amounts and in the time periods estimated.

In addition, Robertson Stephens assumed that:

. the merger will be consummated upon the terms set forth in the merger
agreement without material alteration thereof, including, among other
things, that the merger will be accounted for as a "purchase method"
business combination in accordance with U.S. generally accepted
accounting principles;

. the merger will be treated as a tax-free reorganization pursuant to the
Internal Revenue Code of 1986, as amended; and

. the historical financial statements of each of Cybergold and MyPoints
reviewed by it had been prepared and fairly presented in accordance with
U.S. GAAP consistently applied.

Robertson Stephens relied as to all legal matters relevant to rendering its
opinion on the advice of counsel.

36
<PAGE>

Although developments following the date of the Robertson Stephens opinion
may affect the opinion, Robertson Stephens assumed no obligation to update,
revise or reaffirm its opinion. The Robertson Stephens opinion is necessarily
based upon market, economic and other conditions as in effect on, and
information made available to Robertson Stephens as of, the date of the
Robertson Stephens opinion. It should be understood that subsequent
developments may affect the conclusion expressed in the Robertson Stephens
opinion and that Robertson Stephens disclaims any undertaking or obligation to
advise any person of any change in any matter affecting the opinion which may
come or be brought to its attention after the date of the opinion. The
Robertson Stephens opinion is limited to the fairness, from a financial point
of view and as of the date thereof, of the exchange ratio to MyPoints.
Robertson Stephens does not express any opinion as to:

. the value of any employee agreement or other arrangement entered into in
connection with the merger;

. any tax or other consequences that might result from the merger; or

. what the value of MyPoints common stock will be when issued to
Cybergold's stockholders pursuant to the merger or the price at which
shares of MyPoints common stock may be traded in the future.

The following is a summary of the material financial analyses performed by
Robertson Stephens in connection with rendering the Robertson Stephens opinion.
The summary of the financial analyses is not a complete description of all of
the analyses performed by Robertson Stephens. Certain information in this
section is presented in a tabular form. In order to better understand the
financial analyses performed by Robertson Stephens, these tables must be read
together with the text of each summary. The Robertson Stephens opinion is based
upon the totality of the various analyses performed by Robertson Stephens and
no particular portion of the analyses has any merit standing alone.

Comparable Companies Analysis. Using publicly available information,
Robertson Stephens analyzed, among other things, the total capitalization and
trading multiples of Cybergold and selected publicly traded companies in the
Internet service industry that have similar business and operating profiles,
including:

. FreeShop.com, Inc.

. Promotions.com, Inc.

. Netcentives, Inc.

Multiples compared by Robertson Stephens included market capitalization to
estimated revenues for calendar years 2000 and 2001, as well as market
capitalization per member. All multiples were based on closing stock prices as
of April 13, 2000.

Using street estimates for Cybergold and the ranges of multiples set forth
in the table below that Robertson Stephens derived from multiples for the
comparable companies, the following Cybergold equity values, Cybergold equity
values per share and exchange ratios are implied:

<TABLE>
<CAPTION>
Implied
Implied Cybergold Cybergold equity Implied
Multiple Range equity value value per share Exchange Ratio
-------------- ----------------- ---------------- --------------
<S> <C> <C> <C> <C>
2000 Revenues..... 10.0x-18.0x $307-$538 million $14.02-$24.63 0.784-1.378
2001 Revenues..... 6.0x-10.0x $416-$682 million $19.01-$31.18 1.064-1.745
Value Per Member.. $150-$175 $617-$717 million $28.21-$32.78 1.578-1.834
Mean............ $446-$646 million $20.41-$29.53 1.14-1.65
</TABLE>

Precedent Transaction Analysis. Using publicly available information,
Robertson Stephens analyzed the consideration offered and the implied
transaction value multiples paid or proposed to be paid in selected acquisition
transactions in the Internet service industry, including:

. Exactis.com/ 24/7 Media (February 29, 2000)

. Post Communications/Netcentives (February 15, 2000)

37
<PAGE>

. Tallan, Inc./CMGI, Inc. (February 14, 2000)

. Interleaf Inc./BroadVision Inc. (January 26, 2000)

. Direct Hit/Ask Jeeves (January 25, 2000)

. Concentric Network/Nextlink (January 10, 2000)

. MapQuest.com/AOL (December 22, 1999)

. Yesmail.com/CMGI, Inc. (December 15, 1999)

. Net Effect Systems/Ask Jeeves (November 15, 1999)

. Flycast/CMGI, Inc. (September 30, 1999)

. NetGravity Inc./DoubleClick (July 13, 1999)

. Abacus Corporation/DoubleClick (June 14, 1999)

In analyzing these "precedent transactions," Robertson Stephens compared,
among other things, the total consideration in such transactions as a multiple
of estimated next twelve month revenues and the premiums paid in such
transactions. All multiples for the precedent transactions were based on public
information available at the time of the announcement. Based on this
information, the street estimates for Cybergold, and other publicly available
information, the following table illustrates the implied Cybergold equity
valuations, equity valuations per share and exchange ratios derived from
applying a range of multiples that Robertson Stephens derived from the
precedent transactions:

<TABLE>
<CAPTION>
Implied
Implied Cybergold Cybergold equity Implied
Multiple Range equity value value per share Exchange Ratio
-------------- ----------------- ---------------- --------------
<S> <C> <C> <C> <C>
NTM Revenues............. 15.0x-25.0x $451-$741 million $20.65-$33.91 1.155-1.897
Premiums Paid............ 20.0%-50.0% $192-$240 million $ 8.78-$10.97 0.491-0.614
One-Month Prior Premium.. 50.0%-70.0% $240-$272 million $10.97-$12.43 0.614-0.695
Mean................... $294-$418 million $13.47-$19.10 0.753-1.069
</TABLE>

No company, business or transaction compared in the comparable companies
analysis or precedent transaction analysis is identical to Cybergold, MyPoints
or the merger. Accordingly, an analysis of the results of the foregoing is not
entirely mathematical; rather it involves complex considerations and judgments
concerning differences in financial and operating characteristics and other
factors that could affect the acquisition, public trading and other values of
the comparable companies, precedent transactions or the business segment,
company or transactions to which they are being compared.

Contribution Analysis. Based upon street estimates for Cybergold, Robertson
Stephens analyzed the respective contributions of MyPoints and Cybergold to the
revenues and estimated revenues of the combined company for the last twelve
months, the first quarter of fiscal year 2000, and fiscal years 2000 and 2001.
The following table sets forth the approximate relative contributions of
MyPoints and Cybergold and the implied Cybergold values, equity values, equity
values per share and exchange ratios based on a closing price of $17.88 for
MyPoints common stock on April 13, 2000:

<TABLE>
<CAPTION>
Cybergold Implied
Revenue Implied Cybergold Cybergold equity Implied
Revenues: Contribution equity value value per share Exchange Ratio
--------- ------------ ----------------- ---------------- --------------
<S> <C> <C> <C> <C>
LTM................. 18.0% $115 million $ 5.25 0.294
Q1 2000 Annualized.. 21.4% $141 million $ 6.46 0.362
Fiscal Year 2000.... 30.6% $224 million $10.25 0.573
Fiscal Year 2001.... 36.6% $289 million $13.21 0.739
Mean.............. $192 million $ 8.80 0.492
</TABLE>

38
<PAGE>

In considering these analyses, Robertson Stephens noted that Cybergold
stockholders would own approximately 26.5% of the shares of MyPoints common
stock to be outstanding after consummation of the merger.

Exchange Ratio Analysis. Robertson Stephens compared the historical ratios
of the closing price of Cybergold common stock to the closing price of MyPoints
common stock over various periods. The following table sets forth certain
ratios of the closing prices of Cybergold common stock compared to MyPoints
common stock for various periods ending April 13, 2000:

<TABLE>
<CAPTION>
Ratio of closing prices of
Cybergold common stock
compared to MyPoints
common stock
---------------------------
Period ending April 13, 2000 Average High Low
---------------------------- ------- -------- --------
<S> <C> <C> <C>
5 trading days................................... 0.376x 0.424x 0.282x
10 trading days.................................. 0.380x 0.424x 0.282x
30 trading days.................................. 0.341x 0.437x 0.252x
60 trading days.................................. 0.352x 0.467x 0.252x
90 trading days.................................. 0.331x 0.568x 0.212x
Since Cybergold IPO.............................. 0.392x 0.766x 0.212x
</TABLE>

Deal Premium Analysis. Robertson Stephens also considered the premium that
the exchange ratio of 0.480 represented to the implied exchange ratio at
various days prior to April 13, 2000. The results of this analysis are
summarized below:

<TABLE>
<CAPTION>
Premium of merger
Average implied exchange ratio over
exchange ratio over average implied
Days prior to April 13, 2000 period exchange ratio
---------------------------- ------------------- -------------------
<S> <C> <C>
0 days............................... 0.412 16.9%
5 days............................... 0.376 28.0%
10 days.............................. 0.380 26.9%
30 days.............................. 0.341 41.2%
60 days.............................. 0.352 36.8%
90 days.............................. 0.331 45.6%
Since Cybergold IPO.................. 0.392 22.8%
</TABLE>

Pro Forma Analyses. Robertson Stephens analyzed certain pro forma effects
resulting from the merger, including, among other things, the impact of the
merger on the projected revenues per share of the combined company for fiscal
years 2000 and 2001. The following table summarizes the results of such
analysis using street estimates for Cybergold:

<TABLE>
<S> <C>
Fiscal Year 2000 estimated revenue per share accretion................. 2.3%
Fiscal Year 2001 estimated revenue per share accretion................. 15.2%
</TABLE>

The actual results achieved by the combined company may vary from projected
results and the variations may be material.

Other Factors and Comparative Analyses. In rendering its opinion, Robertson
Stephens considered certain other factors and conducted certain other
comparative analyses, including, among other things a review of:

. the history of trading prices and volume for Cybergold common stock for
the period from September 23, 1999 to April 13, 2000, and for MyPoints
common stock for the period from August 20, 1999 to April 13, 2000; and

. selected published analysts' reports on Cybergold and MyPoints.

39
<PAGE>

While the foregoing summary describes certain analyses and factors that
Robertson Stephens deemed material in its presentation to the MyPoints board,
it is not a comprehensive description of all analyses and factors considered by
Robertson Stephens. The preparation of a fairness opinion is a complex process
that involves various determinations as to the most appropriate and relevant
methods of financial analysis and the application of these methods to the
particular circumstances and, therefore, such an opinion is not readily
susceptible to summary description. Robertson Stephens believes that its
analyses must be considered as a whole and that selecting portions of its
analyses and of the factors considered by it, without considering all analyses
and factors, would create an incomplete view of the evaluation process
underlying the Robertson Stephens opinion. Several analytical methodologies
were employed and no one method of analysis should be regarded as critical to
the overall conclusion reached by Robertson Stephens. Each analytical technique
has inherent strengths and weaknesses, and the nature of the available
information may further affect the value of particular techniques. The
conclusions reached by Robertson Stephens are based on all analyses and factors
taken as a whole and also on application of Robertson Stephens' own experience
and judgment. Such conclusions may involve significant elements of subjective
judgment and qualitative analysis. Robertson Stephens therefore gives no
opinion as to the value or merit standing alone of any one or more parts of the
analysis it performed. In performing its analyses, Robertson Stephens
considered general economic, market and financial conditions and other matters,
many of which are beyond the control of Cybergold and MyPoints. The analyses
performed by Robertson Stephens are not necessarily indicative of actual values
or future results, which may be significantly more or less favorable than those
suggested by such analyses. Accordingly, analyses relating to the value of a
business do not purport to be appraisals or to reflect the prices at which the
business actually may be purchased. Furthermore, no opinion is being expressed
as to the prices at which shares of Cybergold common stock or MyPoints common
stock may be traded at any future time.

The engagement letter between Robertson Stephens and MyPoints provides that
Robertson Stephens is entitled to receive a fee for its services, a substantial
portion of which is contingent upon completion of the merger. MyPoints has also
agreed to reimburse Robertson Stephens for certain of its out-of-pocket
expenses, including legal fees, and to indemnify and hold harmless Robertson
Stephens and its affiliates and any director, employee or agent of Robertson
Stephens or any of its affiliates, or any person controlling Robertson Stephens
or its affiliates for certain losses, claims, damages, expenses and liabilities
relating to or arising out of services provided by Robertson Stephens as
financial advisor to MyPoints. The terms of the fee arrangement with Robertson
Stephens, which MyPoints and Robertson Stephens believe are customary in
transactions of this nature, were negotiated at arm's length between MyPoints
and Robertson Stephens, and the MyPoints board was aware of such fee
arrangements, including the fact that a significant portion of the fees payable
to Robertson Stephens is contingent upon completion of the merger. Robertson
Stephens has provided certain investment banking services to MyPoints for which
it has been paid fees, including acting as lead and joint-lead managers of an
initial public offering and subsequent secondary offering of MyPoints common
stock. Robertson Stephens maintains a market in the shares of MyPoints common
stock. In the ordinary course of its business, Robertson Stephens may trade in
MyPoints securities and Cybergold securities for its own account and the
account of its customers and, accordingly, may at any time hold a long or short
position in MyPoints securities or Cybergold's securities.

Robertson Stephens was retained based on Robertson Stephens' experience as a
financial advisor in connection with mergers and acquisitions and in securities
valuations generally, as well as Robertson Stephens' investment banking
relationship and familiarity with MyPoints.

Opinion of Goldman, Sachs & Co., Financial Advisor to Cybergold

On April 14, 2000, Goldman Sachs delivered its oral opinion, subsequently
confirmed in writing dated April 14, 2000, to Cybergold's board of directors
that based upon and subject to certain considerations described therein, as of
such date, the exchange ratio of 0.480 shares of common stock, par value $0.001
per share, of MyPoints to be received for each share of common stock, par value
$0.00015 per share, of Cybergold pursuant to the merger agreement is fair from
a financial point of view to the holders of Cybergold common stock.

40
<PAGE>

The full text of the written opinion of Goldman Sachs, dated April 14, 2000,
which sets forth, among other things, assumptions made, matters considered and
limitations on the review undertaken in connection with the opinion, is
attached hereto as Annex C and is incorporated herein by reference. The summary
of Goldman Sachs' fairness opinion set forth below is qualified in its entirety
by reference to the full text of its fairness opinion attached to this proxy
statement/prospectus as Annex C. Cybergold stockholders are urged to, and
should, read carefully the opinion in its entirety.

In connection with its opinion, Goldman Sachs reviewed, among other things:

. the merger agreement;

. the registration statement on Form S-1, including the prospectus
contained therein, dated September 23, 1999, relating to the initial
public offering of Cybergold common stock;

. the registration statement on Form S-1, including the prospectus
contained therein, dated August 19, 1999, relating to the initial public
offering of MyPoints common stock;

. the registration statement on Form S-1, including the prospectus
contained therein dated February 23, 2000, relating to the secondary
public offering of MyPoints common stock;

. the Annual Reports on Form 10-K of for each of Cybergold and MyPoints for
the year ended December 31, 1999;

. interim reports to stockholders and Quarterly Reports on Form 10-Q for
each of Cybergold and MyPoints;

. other communications from Cybergold and MyPoints to their respective
stockholders; and

. internal financial analyses and forecasts for Cybergold and MyPoints
prepared by their respective managements.

Goldman Sachs also held discussions with members of the senior management of
Cybergold and MyPoints regarding their assessment of the strategic rationale
for, and the potential benefits of, the transaction contemplated by the merger
agreement and the past and current business operations, financial condition and
future prospects of their respective companies. In addition, Goldman Sachs
reviewed the reported price and trading activity for the Cybergold common stock
and the MyPoints common stock, which like many Internet-related stocks have
been and are likely to continue to be subject to significant short-term price
and trading volatility, compared certain financial and stock market information
for Cybergold and MyPoints with similar information for certain other companies
the securities of which are publicly traded, reviewed the financial terms of
certain business combinations in the Internet direct marketing industry
specifically and in other industries generally and performed such other studies
and analyses as it considered appropriate.

Goldman Sachs relied upon the accuracy and completeness of all of the
financial and other information discussed with or reviewed by it and assumed
such accuracy and completeness for purposes of rendering the opinion. In that
regard, Goldman Sachs took into account, with Cybergold's consent, the risks
and uncertainties associated with Cybergold achieving management's projections
in the amounts and at the times indicated therein. In addition, Goldman Sachs
did not make an independent evaluation or appraisal of the assets and
liabilities of Cybergold or MyPoints or any of their respective subsidiaries
and was not furnished with any such evaluation or appraisal. Goldman Sachs'
advisory services and opinion were provided for the information and assistance
of the board of directors of Cybergold in connection with its consideration of
the transaction contemplated by the merger agreement and its opinion does not
constitute a recommendation as to how Cybergold stockholders should vote with
respect to such transaction.

The following is a summary of the material financial analyses used by
Goldman Sachs in connection with providing its oral opinion to Cybergold's
board of directors on April 14, 2000. Goldman Sachs utilized substantially the
same type of financial analyses in connection with providing the written
opinion attached as Annex C.

41
<PAGE>

The following summaries of financial analyses include information presented in
tabular format. You should read these tables together with the text of each
summary.

Exchange Ratio History

Goldman Sachs reviewed the implied market exchange ratio for shares of
Cybergold common stock and MyPoints common stock for the period from September
23, 1999 to April 14, 2000, determined by dividing the per share closing price
for Cybergold common stock by the per share closing price for MyPoints common
stock for each day during the period. The implied exchange ratio ranged from a
high 0.766 reached on October 18, 1999 to a low 0.212 on December 21, 1999. The
implied market exchange ratio for the 130 trading day and the 90 trading day
periods ending April 14, 2000 were 0.3277 and 0.3127, respectively. The implied
average market exchange ratio for the 30 trading day, the 20 trading day and
the 10 trading day periods ending April 14, 2000 were 0.3244, 0.3593 and
0.3696, respectively. The implied market exchange ratio based on closing prices
on April 14, 2000 was 0.3682, as to which the 0.480 exchange ratio represents a
premium of 30.4% over such implied exchange ratio.

Contribution Analysis

Goldman Sachs analyzed the relative contributions of Cybergold and MyPoints
to revenues and gross profit of the combined company for fiscal years 1999-2001
using management estimates for Cybergold and MyPoints, respectively, and
independent research analysts' estimates for Cybergold and MyPoints. Goldman
Sachs' contribution analysis assumed no synergies. The following table presents
the results of that analysis:

<TABLE>
<CAPTION>
Relative Percentage
Contribution to
Combined Company
----------------------
MyPoints Cybergold
--------- ----------
<S> <C> <C>
Revenues
1999 Actual...................................... 82.0% 18.0%
1999 Actual Annualized Rate Fourth Quarter....... 83.3% 16.7%
2000 Street Estimated Annualized Rate First
Quarter(3)...................................... 79.1% 20.9%
2000 Management Estimated Annualized Rate First
Quarter(2)...................................... 78.6% 21.4%
2000 Street Consensus Estimates(1)............... 73.8% 26.2%
2001 Street Consensus Estimates(1)............... 71.2% 28.8%
2000 Management Estimates(2)..................... 72.2% 27.8%
2001 Management Estimates(2)..................... 65.1% 34.9%
Gross Profit (Sales less Cost of Goods Sold)
1999 Actual...................................... 83.0% 17.0%
1999 Actual Annualized Rate Fourth Quarter....... 83.7% 16.3%
2000 Street Estimated Annualized Rate First
Quarter(3)...................................... 81.3% 18.7%
2000 Managment Estimated Annualized Rate First
Quarter(2)...................................... 80.0% 20.0%
2000 Street Estimates(3)......................... 75.7% 24.3%
2001 Street Estimates(3)......................... 70.9% 29.1%
2000 Management Estimates(2)..................... 72.4% 27.6%
2001 Management Estimates(2)..................... 64.2% 35.8%
Relative Percentage Ownership of Combined Company
Following the Merger.............................. 73.5% 26.5%
</TABLE>
--------
(1) The Street Consensus Estimates used are IBES consensus revenue estimates
obtained from FactSet.

(2) The management estimates used are Cybergold's and MyPoints's management
estimates on Cybergold and MyPoints, respectively.

(3) The Street Estimates used are the financial analyses and forecasts on
Cybergold prepared by SG Cowen and the financial analyses and forecasts on
MyPoints prepared by Robertson Stephens.

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<PAGE>

Comparison of Selected Internet Direct Marketing Companies

Goldman Sachs reviewed and compared certain financial information relating
to Cybergold's and MyPoints's corresponding financial information, ratios and
public market multiples for the following three publicly traded companies in
the Internet direct marketing industry:

. Netcentives Inc.

. FreeShop.com, Inc.

. Promotions.com, Inc.

Goldman Sachs also calculated and compared various relative multiples and
ratios. The multiples of Cybergold were calculated using the Cybergold common
stock per share closing price on April 14, 2000 of $5.50 and the multiples of
MyPoints were calculated using the MyPoints common stock per share closing
price on April 14, 2000 of $14.94. The revenue multiples of Cybergold and
MyPoints were based on IBES consensus revenue estimates obtained from FactSet.
The fully diluted equity market capitalization for each of the three selected
companies enumerated above was calculated using the latest publicly available
financial statements and is based on the fully diluted shares outstanding. The
fully diluted equity market capitalization for each of Cybergold and MyPoints
was calculated based on information provided by the respective managements of
Cybergold and MyPoints. Goldman Sachs' analyses of the selected companies
compared 2000 and 2001 estimated revenues as multiples of the fully diluted
market capitalization and rates of revenue growth from year 1999 to year 2000
and from year 2000 to year 2001.

The results of this analysis are as follows:

<TABLE>
<CAPTION>
Market Capitalization
as a Multiple of Projected Revenue
Estimated Revenue for: Growth for:
---------------------- -------------------
2000 2001 1999-2000 2000-2001
----------- ---------- --------- ---------
<S> <C> <C> <C> <C>
Netcentives Inc................... 22.6x 6.0x 184.4% 277.6%
FreeShop.com, Inc................. 6.5x 3.6x 128.1% 79.9%
Promotions.com, Inc............... 2.6x 1.1x 178.3% 127.5%
Cybergold......................... 4.9x 2.5x 337.7% 95.0%
MyPoints.......................... 6.5x 3.6x 178.9% 71.4%
Median.......................... 6.5x 3.6x 178.9% 95.0%
</TABLE>

Comparable Transactions Multiple Analysis

Goldman Sachs analyzed certain information relating to forty-seven selected
transactions in the Internet direct marketing industry since 1996. The
following table presents the results of that analysis:

<TABLE>
<CAPTION>
Consideration as a
Target Pro Forma Multiple of Latest
Ownership Premium Over Market Twelve Month Sales
---------------- ------------------- ------------------
<S> <C> <C> <C>
Range................... 0.0%-60.3% (17.8)%-181.1% 1.1x-3267.3x
Median.................. 8.1% 19.7% 17.1x
Mean.................... 15.8% 29.7% 176.9x
Proposed Transaction.. 26.5% 30.4% 29.8x
</TABLE>

Goldman Sachs prepared pro forma analyses of the financial impact of the
transaction using management estimates from each of Cybergold's and MyPoints's
managements, the financial analyses and forecasts on Cybergold prepared by
research analysts from SG Cowen, the financial analyses and forecasts on
MyPoints prepared by research analysts from Robertson Stephens, and IBES
consensus revenue estimates obtained from FactSet. For each of the years 2000
and 2001, Goldman Sachs compared the estimated revenue per share, estimated
earnings per share and estimated cash earnings per share for the MyPoints
common stock on a stand-

43
<PAGE>

alone basis to the estimated revenue per share, estimated earnings per share
and estimated cash earnings per share relating to the merger for the common
stock of the combined company on a pro forma basis, both assuming no synergies.
For purposes of this analysis, accretion is defined as an increase on a per
share basis and dilution is defined as a decrease on a per share basis. The
analysis indicated the merger will be accretive on a revenue per share basis
from the perspective of MyPoints's stockholders in estimated years 2000 and
2001. According to management and independent analysts' estimates, MyPoints is
expected to experience negative earnings per share and negative cash earnings
per share in years 2000 and 2001. The analysis indicated the merger will result
in greater losses to the combined entity both on an earnings and cash earnings
per share basis, thus producing a dilutive effect on an earnings and cash
earnings per share basis in years 2000 and 2001.

The results of the analysis are as follows:

<TABLE>
<CAPTION>
Percentage
Accretion/
(Dilution)
----------
<S> <C>
Revenue/Share Accretion/(Dilution)
2000 Management Estimates(1).................................... 1.7%
2001 Management Estimates(1).................................... 12.7%
2000 Street Consensus Estimates(2).............................. 0.3%
2001 Street Consensus Estimates(2).............................. 3.3%
</TABLE>

<TABLE>
<CAPTION>
Cash Earnings
Per Share
(Earnings Before
Earnings Goodwill
Per Share Amortization)
--------- ----------------
<S> <C> <C>
Earnings Per Share Accretion/(Dilution)
2000 Management Estimates(1).................... (58.1)% (32.2)%
2001 Management Estimates(1).................... (60.3)% (12.5)%
2000 Street Estimates(3)........................ (24.8)% (6.1)%
2001 Street Estimates(3)........................ (53.1)% (22.1)%
</TABLE>
--------
(1) The management estimates used are Cybergold's and MyPoints's management
estimates on Cybergold and MyPoints, respectively.

(2) The Street Consensus Estimates used are the IBES consensus revenue
estimates obtained from FactSet.

(3) The Street Estimates used are the financial analyses and forecasts on
Cybergold prepared by SG Cowen and the financial analyses and forecasts on
MyPoints prepared by Robertson Stephens.

Other Considerations

The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to partial analysis or summary description. Selecting
portions of the analyses or of the summary set forth above, without considering
the analyses as a whole, may create an incomplete view of the processes
underlying Goldman Sachs' opinion. In arriving at its fairness determination,
Goldman Sachs considered the results of all such analyses. No company used in
the above analyses as a comparison is directly comparable to Cybergold,
MyPoints or the merger. The analyses were prepared solely for purposes of
Goldman Sachs providing its opinion to Cybergold's board of directors as to the
fairness from a financial point of view to Cybergold of the exchange ratio and
do not purport to be appraisals or necessarily reflect the prices at which
businesses or securities actually may be sold. Analyses based upon forecasts of
future results are not necessarily indicative of actual future results, which
may be significantly more or less favorable than suggested by such analyses.
Because such analyses are inherently subject to uncertainty, being based upon
numerous factors or events beyond the control of the parties or their
respective advisors, none of Cybergold, MyPoints, Goldman Sachs or any other
person assumes responsibility if future results are materially different from
those forecast. As

44
<PAGE>

described above, Goldman Sachs' opinion to Cybergold's board of directors was
one of many factors taken into consideration by Cybergold's board of directors
in making its determination to approve and adopt the merger agreement. The
foregoing summary does not purport to be a complete description of the analysis
performed by Goldman Sachs in connection with such opinion and is qualified by
reference to the written opinion of Goldman Sachs set forth in Annex C hereto.

Goldman Sachs, as part of its investment banking business, is continually
engaged in the valuation of businesses and their securities in connection with
mergers and acquisitions, negotiated underwritings, competitive biddings,
secondary distributions of listed and unlisted securities, private placements,
and valuations for estate, corporate and other purposes. Goldman Sachs is
familiar with Cybergold, having acted as its financial advisor in connection
with, and having participated in certain of the negotiations leading to the
merger agreement. Cybergold selected Goldman Sachs as its financial advisor
because it is a nationally recognized investment banking firm that has
substantial experience in transactions similar to the merger. Goldman Sachs
provides a full range of financial advisory and securities services and, in the
course of its normal trading activities, may from time to time effect
transactions and hold securities, including derivative securities, of Cybergold
or MyPoints for its own account and for the accounts of customers.

Pursuant to a letter agreement dated February 11, 2000, Cybergold engaged
Goldman Sachs to act as its financial advisor in connection with a potential
transaction involving MyPoints. Pursuant to the terms of this engagement
letter, Goldman Sachs will receive a customary fee, a substantial portion of
which is contingent on the closing of the merger. Cybergold has also agreed to
reimburse Goldman Sachs for its reasonable out-of-pocket expenses, including
attorney's fees and disbursements plus any sales, use or similar taxes.

Interests of Certain Directors, Officers and Affiliates in the Merger

When considering the recommendation of Cybergold's board of directors, you
should be aware that Cybergold's directors and officers have interests in the
merger that are different from, or are in addition to, your interests. The
Cybergold board of directors was aware of these potential conflicts and
considered them.

In accordance with the terms of the merger agreement, two individuals
selected by Cybergold, one of whom will be A. Nathaniel Goldhaber and another
reasonably acceptable to MyPoints, will be appointed to the board of directors
of MyPoints. The MyPoints board of directors will be comprised of nine members.
After the merger, A. Nathaniel Goldhaber will be Vice Chairman of MyPoints.

A. Nathaniel Goldhaber, Daniel Berger, and Michael Koifman have entered into
non-competition agreements that provide severance benefits upon certain
termination events. In addition, the agreements entered into by Messrs. Berger
and Koifman provide for an immediate payment of $50,000 and acceleration of
vesting of their options by one year upon one year service after signing the
noncompetition agreement. Cybergold also lowered the exercise price on options
previously issued to Mr. Berger for 34,686 shares of Cybergold common stock
from $3.90 per share to $0.225 per share.

Upon the consummation of the merger, John Steuart, the Chief Financial
Officer of Cybergold, may be entitled to acceleration of his unvested options
if certain conditions relating to his employment with the combined company are
not met.

Some of the directors and officers of Cybergold participate in arrangements
and have continuing indemnification against liabilities that provide them with
interests in the merger that are different from, or are in addition to, your
interests.

Under the merger agreement, MyPoints has agreed to honor Cybergold's
obligations under indemnification agreements between Cybergold and its
directors and officers in effect before the completion of the merger and any
indemnification provisions of Cybergold's articles of incorporation and bylaws.
MyPoints has also agreed to provide for indemnification provisions in the
articles of incorporation and bylaws of the surviving

45
<PAGE>

corporation of the merger that are at least as favorable as Cybergold's
provisions and to maintain these provisions for six years from the completion
of the merger.

In addition, MyPoints has agreed to maintain Cybergold's directors' and
officers' liability insurance for six years from the completion of the merger.

As a result of these interests, these directors and officers of Cybergold
could be more likely to vote to approve the merger agreement than if they did
not hold these interests. Cybergold's stockholders should consider whether
these interests may have influenced these directors and officers to support or
recommend the merger.

Completion and Effectiveness of the Merger

The merger will be completed when all of the conditions to completion of the
merger are satisfied or, where available, waived, including approval and
adoption of the merger agreement and approval of the merger by the stockholders
of Cybergold and approval of the issuance of MyPoints common stock in the
merger by stockholders of MyPoints. The merger will become effective upon the
filing of the certificate of merger with the State of Delaware.

Structure of the Merger and Conversion of Cybergold Common Stock

Pursuant to the merger agreement, Mygo Acquisition Corporation, a Delaware
corporation and a wholly owned subsidiary of MyPoints, will merge with and into
Cybergold. Cybergold will then be a wholly owned subsidiary of MyPoints.

Upon completion of the merger, each outstanding share of Cybergold common
stock will be converted into the right to receive 0.480 shares of MyPoints
common stock. No fractional shares of MyPoints common stock will be issued
pursuant to the merger. In lieu of the issuance of any fractional shares of
MyPoints common stock, holders of Cybergold common stock will receive a payment
of cash equal to the product of such fractional share amount, after aggregating
all fractional shares a former holder of Cybergold common stock would be
entitled to, and the average closing price of MyPoints common stock as reported
on Nasdaq for the five trading days immediately preceding the last full trading
day prior to the effectiveness of the merger.

Paytech Disposition

Cybergold has the right, but not the obligation, to distribute its Paytech
business to the Cybergold stockholders. Prior to the merger, Cybergold will
incorporate a separate subsidiary which will constitute the Paytech business.
The Paytech business will consist of up to 35 Cybergold employees, $5,000,000
in cash (less any taxes attributable to the Paytech distribution), Cybergold's
Payment Systems Technology and miscellaneous hard assets. If the distribution
of the Paytech business occurs before the merger, Cybergold will hold a 19.9%
equity ownership interest in Paytech; if it occurs after the merger, MyPoints
will hold a 19.9% ownership interest in the Paytech business. The distribution
is not a condition to the consummation of the merger.

If, for any reason, the disposition of the Paytech business does not occur
by September 30, 2000, then at MyPoints's election, it may choose, in its sole
discretion, not to distribute the Paytech business and instead pay to Cybergold
stockholders a cash dividend of $5,000,000 less Paytech's operating expenses
and closure costs incurred since closing of the merger.

The record date for the distribution of the Paytech business on the payment
of the cash dividend will be set by Cybergold prior to the closing of the
merger. For more information about the Paytech business, please see the
separate prospectus relating to the distribution of the Paytech business that
will be mailed to Cybergold stockholders as of a record date prior to the
merger.

46
<PAGE>

Exchange of Cybergold Stock Certificates for MyPoints Stock Certificates

When the merger is completed, MyPoints's exchange agent will mail to
Cybergold stockholders a letter of transmittal and instructions for use in
surrendering Cybergold stock certificates in exchange for MyPoints stock
certificates. When you deliver your Cybergold stock certificates to the
exchange agent along with an executed letter of transmittal and any other
required documents, your Cybergold stock certificates will be cancelled and you
will receive MyPoints stock certificates representing the number of full shares
of MyPoints common stock to which you are entitled under the merger agreement.
You will receive payment in cash, without interest, in lieu of any fractional
shares of MyPoints common stock which would have been otherwise issuable to you
in the merger.

Cybergold stockholders should not submit their Cybergold stock certificates
for exchange until they receive the transmittal instructions and a letter of
transmittal from the exchange agent.

No Dividends

Cybergold stockholders are not entitled to receive any dividends or other
distributions on MyPoints common stock until the merger is completed and they
have surrendered their Cybergold stock certificates in exchange for MyPoints
stock certificates.

Subject to applicable laws, promptly following surrender of Cybergold stock
certificates and the issuance of the corresponding MyPoints certificates,
Cybergold stockholders will be paid the amount of dividends or other
distributions, without interest and, with a record date after the completion of
the merger, which were previously paid with respect to their whole shares of
MyPoints common stock. At the appropriate payment date, Cybergold stockholders
will also receive the amount of dividends or other distributions, without
interest, with a record date after the completion of the merger and a payment
date after they exchange their Cybergold stock certificates for MyPoints stock
certificates.

MyPoints will only issue Cybergold stockholders a MyPoints stock certificate
or a check in lieu of a fractional share in a name in which the surrendered
Cybergold stock certificate is registered. If Cybergold stockholders wish to
have their certificates issued in another name they must present the exchange
agent with all documents required to show and effect the unrecorded transfer of
ownership and show that they paid any applicable stock transfer taxes.

Material United States Federal Income Tax Considerations of the Merger

The following discussion summarizes the material federal income tax
consequences of the merger that are generally applicable to holders of
Cybergold common stock exchanging their Cybergold common stock for MyPoints
common stock. This discussion is based on the Internal Revenue Code of 1986, as
amended, or the Code, applicable Treasury Regulations, judicial authority and
administrative rulings and practice, all as of the date hereof. No ruling
regarding the merger will be sought; therefore the IRS may disagree with the
statements and conclusions set forth herein. In addition, future legislative,
judicial or administrative changes or interpretations could adversely affect
the accuracy of the statements and conclusions set forth herein. Any such
changes or interpretations could be applied retroactively and could affect the
tax consequences of the merger to MyPoints, Mygo Acquisition Corporation,
Cybergold and/or their respective stockholders.

Stockholders of Cybergold should be aware that the following discussion does
not deal with all federal income tax considerations that may be relevant to
Cybergold stockholders in light of their particular circumstances, such as
stockholders who are dealers in securities, who are foreign persons, or who
acquired their Cybergold stock in compensatory transactions or stockholders who
do not hold their Cybergold shares as capital assets. In addition, the
following discussion does not address the tax consequences of the merger under
foreign, state, or local tax laws and does not address the tax consequences
associated with the distribution of the Paytech business. Finally, the
following discussion does not address the tax consequences of transactions
occurring prior to or after the merger (whether or not such transactions are in
connection with the merger)

47
<PAGE>

including, without limitation, the exercise of options or rights to purchase
Cybergold common stock in anticipation of the merger. Accordingly, Cybergold
stockholders are urged to consult their own tax advisors as to the specific tax
consequences to them of the merger, including the applicable federal, state,
local and foreign tax consequences to them of the merger.

It is a condition to the obligation of each of MyPoints and Cybergold to
complete the merger that MyPoints receive an opinion of Wilson Sonsini Goodrich
& Rosati, Professional Corporation, and Cybergold receive an opinion of
Morrison & Foerster, LLP, to the effect that the merger will be treated for
federal income tax purposes as a reorganization within the meaning of Section
368(a) of the Code. However, if either tax counsel does not render an opinion,
such condition nonetheless will be satisfied if tax counsel to the other party
renders an opinion to such other party. Tax counsel's opinions neither bind the
IRS, nor preclude the IRS or the courts from adopting a contrary position.

In delivering their opinions, tax counsel will rely on certain customary
representations made by Cybergold and MyPoints, including those contained in
certificates of officers of Cybergold and MyPoints. Provided that such
representations are correct as of the effective time of the merger, that the
merger is consummated in the manner described in the merger agreement and this
proxy statement/prospectus, and that there are no changes in the Code or other
applicable law, the merger will be a reorganization within the meaning of
Section 368(a) of the Code. Assuming that the merger is a reorganization, the
merger will have the following federal income tax consequences:

. The holders of Cybergold common stock will recognize no gain or loss upon
the receipt of MyPoints common stock solely in exchange for their
Cybergold common stock in the merger, except with respect to cash
received in lieu of fractional shares of MyPoints common stock.

. The aggregate tax basis of the MyPoints common stock received by the
Cybergold stockholders in the merger will be the same as the aggregate
tax basis of the Cybergold common stock surrendered in exchange therefor
(reduced by any basis allocable to fractional shares for which cash is
received).

. The holding period of the MyPoints common stock received by each
Cybergold stockholder in the merger will include the holding period of
the Cybergold common stock surrendered in exchange therefor, provided
that the Cybergold common stock surrendered is held as a capital asset at
the time of the merger.

. A holder of Cybergold common stock receiving cash in the merger in lieu
of a fractional interest in MyPoints common stock will be treated as if
such holder actually received such fractional share interest which was
subsequently redeemed by MyPoints. A Cybergold stockholder should
recognize gain or loss with respect to a cash payment in lieu of a
fractional share measured by the difference, if any, between the amount
of cash received and the basis in such fractional share.

. None of MyPoints, Mygo Acquisition Corporation or Cybergold will
recognize gain or loss solely as a result of the merger.

A successful IRS challenge to the reorganization status of the merger would
result in Cybergold stockholders recognizing gain or loss. The amount of gain
or loss for each share of Cybergold common stock surrendered would equal the
difference between the stockholder's basis in each share and the fair market
value, as of the time of the merger, of the MyPoints common stock and any other
consideration received in exchange. A Cybergold stockholder's aggregate basis
in the MyPoints common stock so received would equal its fair market value, and
the stockholder's holding period for such stock would begin the day after the
merger. Even in that event, however, MyPoints, Mygo Acquisition Corporation and
Cybergold would not recognize gain or loss solely as a result of the merger.

This discussion of material federal income tax consequences is intended to
provide only a general summary, and is not a complete analysis or description
of all potential federal income tax consequences of the merger. This discussion
does not address tax consequences that may vary with, or are contingent upon,

48
<PAGE>

individual circumstances. In addition, it does not address any non-income tax
or any foreign, state or local tax consequences of the merger. Accordingly,
stockholders are urged to consult their own tax advisors as to the specific tax
consequences of the merger, including the applicable federal, state, local and
foreign tax consequences to them of the merger in their particular
circumstances.

Material United States Federal Income Tax Consequences of the Distribution of
the Paytech Business

The following discussion summarizes the material federal income tax
consequences of the distribution of interests in the Paytech business to the
Cybergold stockholders. This discussion is based on the Code, applicable
Treasury Regulations, judicial authority and administrative rulings and
practice, all as of the date hereof. No ruling regarding the distribution will
be sought; therefore the IRS may disagree with the statements and conclusions
set forth herein. In addition, future legislative, judicial or administrative
changes or interpretations could adversely affect the accuracy of the
statements and conclusions set forth herein. Any such changes or
interpretations could be applied retroactively and could affect the tax
consequences of the distribution to Cybergold and/or its stockholders.

Stockholders of Cybergold should be aware that the following discussion does
not deal with all federal income tax consequences that may be relevant to
Cybergold stockholders in light of their particular circumstances, such as
stockholders who are dealers in securities, or foreign persons, stockholders
who acquired their Cybergold stock in compensatory transactions, and
stockholders who do not hold Cybergold shares as capital assets. Accordingly,
Cybergold stockholders are urged to consult their own tax advisors as to the
specific tax consequences to them of the distribution of the Paytech business,
including the applicable federal, state, local and foreign tax consequences.

The distribution of the Paytech business will be a taxable distribution to
Cybergold. Cybergold will recognize any gain (but not loss) on the distribution
equal to the difference between its tax basis in the Paytech business and the
fair market value of the business on the date of the distribution.

Cybergold stockholders will be treated as having received a distribution of
property with respect to their Cybergold shares equal to the fair market value
of the Paytech business interests received in the distribution. The
distribution will be taxable as a dividend to the extent of Cybergold's current
and accumulated earnings and profits. Any amount not taxable as a dividend will
be applied against and reduce the adjusted basis of the stockholder's Cybergold
stock (or of the stockholder's MyPoints stock if the distribution is received
after the merger). To the extent that the fair market value of the portion of
the distribution which is not a dividend exceeds the stockholder's adjusted tax
basis in the Cybergold (or MyPoints) shares, the excess will be treated as
taxable gain from the sale or exchange of property.

Cybergold does not have accumulated earnings and profits, and does not
expect to have current earnings and profits in its taxable year during which
the Paytech business interests are distributed. However, whether Cybergold will
have current earnings and profits for its taxable year during which the
distribution occurs depends upon the date on which the merger is completed, the
date of the distribution, and the fair market value of the Paytech business at
the time of the distribution, among other things, none of which can be known
with any certainty at present. Therefore, it is possible that under certain
circumstances all or a portion of the distribution will be taxable as a
dividend. Cybergold will provide information to stockholders regarding the
amount of the distribution taxable as a dividend following the close of the
calendar year in which the distribution occurs.

Distribution of the Paytech business interests may be subject to information
reporting to the IRS and possible backup withholding at a rate of 31%. Backup
withholding will not apply, however, to a Cybergold stockholder who furnishes a
correct taxpayer identification number and makes other required certifications
or is otherwise exempt from backup withholding. Amounts withheld under backup
withholding rules may be credited against a stockholder's tax liability, and a
stockholder may obtain a refund of any excess amounts withheld under the backup
withholding rules by timely filing the appropriate form for refund with the
IRS.

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<PAGE>

Accounting Treatment of the Merger

MyPoints intends to account for the merger as a purchase for financial
reporting and accounting purposes, under generally accepted accounting
principles. After the completion of the merger, the results of operations of
Cybergold will be included in the consolidated financial statements of
MyPoints. The purchase price will be allocated to Cybergold's assets and
liabilities based on the fair values of the assets acquired and the liabilities
assumed. Any excess of cost over the fair value of the net tangible assets of
Cybergold acquired will be recorded as goodwill and other intangible assets and
will be amortized by charges to operations under generally accepted accounting
principles. These allocations will be made based upon valuations and other
studies that have not yet been finalized.

Regulatory Filings and Approvals Required to Complete the Merger

MyPoints is not aware of any material governmental or regulatory approval
required for completion of the merger, other than the effectiveness of the
registration statement of which this proxy statement/prospectus is a part,
compliance with applicable corporate laws of Delaware and review by the
Department of Justice and the Federal Trade Commission to determine whether it
is in compliance with applicable antitrust laws. Under the provisions of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the merger
may not be consummated until the specified waiting period requirements under
that Act have been satisfied. If Cybergold chooses to affect the distribution
of the Paytech business, the entity that would hold the Paytech business must
comply with the Securities Act of 1933 and the Securities Exchange Act of 1934
by making certain filings with respect to the distribution.

Restrictions on Sales of Shares by Affiliates

The shares of MyPoints common stock to be issued in the merger will be
registered under the Securities Act. These shares will be freely transferable
under the Securities Act, except for shares of MyPoints common stock issued to
any person who is an affiliate of Cybergold. Persons who may be deemed to be
affiliates include individuals or entities that control, are controlled by, or
are under common control of Cybergold and may include some of their respective
officers and directors, as well as their respective principal stockholders.
Affiliates may not sell their shares of MyPoints common stock acquired in the
merger except pursuant to (1) an effective registration statement under the
Securities Act covering the resale of those shares, (2) an exemption under
paragraph (d) of Rule 145 under the Securities Act, or (3) any other applicable
exemption under the Securities Act.

As a condition to MyPoints's obligation to effectuate and consummate the
merger, each of Cybergold's affiliates must execute an affiliate agreement.
Under this type of affiliate agreement, MyPoints will be entitled to place
appropriate legends on the certificates evidencing any MyPoints common stock to
be received by these persons and to issue stop transfer instructions to the
transfer agent for the MyPoints common stock. Further, these persons have also
acknowledged the resale restrictions imposed by Rule 145 under the Securities
Act on shares of MyPoints common stock to be received by them in the merger.
MyPoints has agreed to use commercially reasonable efforts to cause its
affiliates to execute affiliate agreements as promptly as possible.

No appraisal rights

Appraisal rights under Delaware law are not available to stockholders of a
Delaware corporation if:

. the securities of the corporation are listed on a national securities
exchange or designated as a national market system security on an
interdealer quotation system by the National Association of Securities
Dealers, Inc.; and

. in the case of the stockholders of the corporation who are required to
take consideration different from that previously held by them, such
stockholders accept in exchange for their stock (a) stock in the
surviving corporation and (b) cash in lieu of fractional shares.

50
<PAGE>

Cybergold stockholders will not have appraisal rights under Delaware law
with respect to the merger because:

. Cybergold's common stock is traded on Nasdaq; and

. Cybergold stockholders are being offered only shares of common stock of
MyPoints, the surviving corporation and cash in lieu of fractional
shares.

MyPoints stockholders will not have appraisal rights under Delaware law with
respect to the merger because:

. MyPoints common stock is traded on Nasdaq; and

. MyPoints stockholders will continue to hold their shares after the
merger.

Listing on the Nasdaq National Market of MyPoints Common Stock to be Issued in
the Merger

MyPoints has agreed to cause the shares of MyPoints common stock to be
issued in the merger to be approved for listing on Nasdaq, subject to official
notice of issuance prior to the effective time of the merger as defined in the
merger agreement. MyPoints common stock is currently listed on the Nasdaq
National Market under the symbol "MYPT."

Delisting and Deregistration of Cybergold Common Stock After the Merger

If the merger is completed, Cybergold's common stock will be delisted from
the Nasdaq National Market and will be deregistered under the Securities
Exchange Act of 1934.

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<PAGE>

THE MERGER AGREEMENT

This section of the proxy statement/prospectus describes the merger
agreement. While we believe that the description covers the material terms of
the merger agreement, this summary may not contain all of the information that
is important to you. The merger agreement is attached to this proxy
statement/prospectus as Annex A and we urge you to read it carefully.

Representations and Warranties

MyPoints and Cybergold each made a number of representations and warranties
in the merger agreement regarding aspects of its respective businesses,
financial condition, structure and other facts pertinent to the merger.

Cybergold Representations and Warranties

Cybergold's representations and warranties include representations as to:

. Cybergold's corporate organization and its qualification to do business

. Cybergold's certificate of incorporation and bylaws

. Cybergold's capitalization

. authorization of the merger agreement by Cybergold

. lack of conflicts related to the merger and regulatory approvals required
to complete the merger

. the effect of the merger on obligations of Cybergold and under applicable
laws

. permits required to conduct Cybergold's business and compliance with
those permits

. Cybergold's compliance with applicable laws

. Cybergold's filings and reports with the Securities and Exchange
Commission

. Cybergold's financial statements

. Cybergold's liabilities

. changes in Cybergold's business since December 31, 1999

. litigation involving Cybergold

. Cybergold's employee benefit plans

. information supplied by Cybergold in this proxy statement/prospectus and
the related registration statement filed by MyPoints

. restrictions on the conduct of Cybergold's business

. Cybergold's title to the properties it owns and leases

. Cybergold's taxes

. environmental laws that apply to Cybergold

. payments required to be made by Cybergold to brokers and agents on
account of the merger

. intellectual property used by Cybergold

. Cybergold's material contracts

. the fairness opinion received by Cybergold from its financial advisor

. approval by the Cybergold board

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<PAGE>

. the vote of Cybergold stockholders required to approve the merger

. the inapplicability of state takeover statues

The representations and warranties of Cybergold expire at the effective time
of the merger.

MyPoints Representations and Warranties

The representations and warranties of MyPoints and Mygo Acquisition
Corporation include representations as to:

. corporate organization and its qualification to do business

. certificate of incorporation and bylaws of MyPoints and Mygo Acquisition
Corporation

. capitalization of MyPoints and Mygo Acquisition Corporation

. authorization of the merger agreement by MyPoints and Mygo Acquisition
Corporation

. regulatory approvals required to complete the merger

. lack of conflicts related to the merger and the effect of the merger on
obligations of MyPoints and Mygo Acquisition Corporation under applicable
laws

. MyPoints's permits

. MyPoints's filings and reports with the Securities and Exchange
Commission

. MyPoints's financial statements

. liabilities of MyPoints and Mygo Acquisition Corporation

. litigation involving MyPoints and Mygo Acquisition Corporation

. information supplied by MyPoints and Mygo Acquisition Corporation in this
proxy statement/prospectus and the related registration statement filed
by MyPoints

. payments, if any, required to be made by MyPoints to brokers and agents
on account of the merger

. the fairness opinion received by MyPoints from its financial advisor

. approval by the MyPoints board

. the vote of MyPoints stockholders required to approve the merger

. the operations of Mygo Acquisition Corporation

The representations and warranties in the merger agreement are complicated
and not easily summarized. You are urged to carefully read the articles of the
merger agreement entitled "Representations and Warranties of Company" and
"Representations and Warranties of Parent and Merger Sub."

Disposition of the Paytech Business

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<PAGE>

Cybergold's Conduct of Business Before Completion of the Merger

Cybergold agreed that, until the earlier of the completion of the merger or
termination of the merger agreement or unless MyPoints consents in writing,
Cybergold will:

. preserve intact its present business organization

. keep available the services of its present officers and employees

. preserve its relationships with customers, suppliers, distributors,
licensors, licensees, and others with which it has business dealings

Cybergold also agreed that until the earlier of the completion of the merger
or termination of the merger agreement or unless MyPoints consents in writing,
Cybergold would conduct its business in compliance with certain specific
restrictions relating to the following:

. restricted stock and stock options

. employees and employee benefits, including severance and termination
payments

. Cybergold's intellectual property

. the issuance of dividends or other distributions

. the issuance and redemption of securities

. modification of Cybergold's certificate of incorporation and bylaws

. the acquisition of equity interests or assets of other entities

. the sale, lease, license and disposition of assets

. the incurrence of indebtedness

. payment or settlements of liabilities or litigation

. payments outside the ordinary course of business

. entrance into or modification of contracts

. accounting policies and procedures

. incurrence of obligations to make certain expenditures

. treatment of the merger as a "reorganization" under the Internal Revenue
Code

. making of tax elections

In addition, Cybergold has the right, but not the obligation, to distribute
its Paytech business prior to the consummation of the merger.

The provisions related to the conduct of Cybergold's business in the merger
agreement are complicated and not easily summarized. You are urged to carefully
read the sections of the merger agreement entitled "Conduct of Business by
Company."

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<PAGE>

MyPoints's Conduct of Business Before Completion of the Merger

MyPoints agreed that, until the earlier of the completion of the merger
agreement or unless Cybergold consents in writing, MyPoints will not:

. engage in any action that could reasonably be expected to cause the
merger to fail to qualify on a "reorganization" under Section 368(a) of
the Internal Revenue Code or interfere with MyPoints's ability to account
for the merger or a pooling of interests

. declare, set aside or pay any cash dividends on or make any other cash
distributions

. take any action that would reasonably be likely to materially delay the
merger

No Other Negotiations Involving Cybergold; Solicitation By Cybergold

Until the merger is completed or the merger agreement is terminated,
Cybergold has agreed, subject to limited exceptions, not to directly or
indirectly take any of the following actions:

. solicit, initiate, encourage or induce the making, submission or
announcement of any acquisition proposal

. participate in any discussions or negotiations regarding any acquisition
proposal

. furnish to any person any non-public information with respect to any
acquisition proposal

. take any other action to facilitate any inquiries or the making of any
proposal that constitutes or may reasonably be expected to lead to any
acquisition proposal

. engage in discussions with any person with respect to any acquisition
proposal, except as to the existence of the acquisition proposal
provisions

. subject to certain limited exceptions discussed below, approve, endorse
or recommend any acquisition proposal

. enter into any letter of intent or similar document or any contract,
agreement or commitment contemplating or otherwise relating to any
company acquisition

For purposes of the foregoing, any action by any officer, director,
affiliate or employee of Cybergold or any investment banker, attorney or other
advisor or representative of Cybergold is deemed to be a breach by Cybergold.

Cybergold has further agreed to cease, as of the date of the merger
agreement, any and all existing activities, discussions or negotiations with
any parties conducted prior to that date with respect to any company
acquisition proposal.

As used herein, an acquisition proposal is any offer or proposal relating to
any acquisition transaction, other than an offer or proposal from MyPoints.

An acquisition transaction is any transaction or series of transactions,
other than the merger, involving any of the following:

. the acquisition or purchase from Cybergold of more than a 10% interest in
the total outstanding voting securities of Cybergold or any of its
subsidiaries

55
<PAGE>

. any sale, lease outside the ordinary course of business, exchange,
transfer, license outside the ordinary course of business, acquisition or
disposition of more than 10% of the assets of Cybergold

. any liquidation or dissolution of Cybergold

Until the merger is completed or the merger agreement is terminated,
Cybergold is allowed, in response to an unsolicited bona fide written superior
offer, to engage in discussions and negotiations with and furnish information
to, the party making, or recommend to Cybergold's stockholders such superior
offer (and in connection with such recommendation, withdraw its recommendation
of the merger) if all of the following conditions are met:

. Cybergold has not breached the non-solicitation provisions contained in
the merger agreement

. the board of directors of Cybergold determines in good faith, in
consultation with and in receipt of advice from its outside legal
counsel, that such action is required in order to comply with its
fiduciary obligations under applicable law

. at least 48 hours prior to furnishing any such nonpublic information to,
or entering into discussions or negotiations with, such person or group,
Cybergold gives MyPoints written notice of the identity of such person or
group and of Cybergold's intention to furnish nonpublic information to,
enter into discussions or negotiations with, such person or group and
Cybergold receives from such person or group an executed confidentiality
agreement containing customary limitations on the use and disclosure of
all nonpublic written and oral information furnished to such person or
group by or on behalf of Cybergold

. contemporaneously with furnishing any nonpublic information, Cybergold
furnishes the nonpublic information to MyPoints, to the extent the
nonpublic information has not been previously furnished by Cybergold to
MyPoints

A "superior offer" is an unsolicited, bona fide written offer made by a
third party to consummate any of the following transactions: (i) a merger,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction involving Cybergold pursuant to which the stockholders
of Cybergold immediately preceding such transaction hold less than 51% of the
equity interest in the surviving or resulting entity of such transaction; (ii)
a sale or other disposition by Cybergold of assets (excluding inventory and
used equipment sold in the ordinary course of business) representing in excess
of 51% of the fair market value of Cybergold's business immediately prior to
such sale; or (iii) the acquisition by any person or group (including by way of
a tender offer or an exchange offer or issuance by Cybergold), directly or
indirectly, of beneficial ownership or a right to acquire beneficial ownership
of shares representing in excess of 51% of the voting power of the then
outstanding shares of capital stock of Cybergold, in each case on terms that
the board of directors of Cybergold determines, in its reasonable judgment
(based on written advice of a financial advisor of nationally recognized
reputation) to be more favorable to Cybergold stockholders from a financial
point of view than the terms of the merger.

Cybergold has agreed to promptly inform MyPoints of any request for non-
public information that Cybergold reasonably believes would lead to an
acquisition proposal, or of any acquisition proposal, or any inquiry with
respect to or which Cybergold reasonably should believe would lead to any
acquisition proposal, the material terms and conditions of such request,
acquisition proposal or inquiry, and the identity of the person or group making
any such request, acquisition proposal or inquiry. Cybergold further agreed to
keep MyPoints informed in all material respects of the status and details,
including material amendments or proposed amendments, or any such request,
acquisition proposal or inquiry.

Cybergold has agreed to provide MyPoints with at least 48 hours prior notice
of any meeting of Cybergold's board of directors at which a superior offer is
reasonably expected to be up for consideration and at least two business days
(or less in certain circumstances, but in no event less than eight hours) prior
written notice of any meeting of Cybergold's board of directors at which it is
reasonably expected to recommend a superior offer.

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<PAGE>

The Cybergold board may withdraw its recommendation of the merger agreement
and the merger with MyPoints if a superior offer is made to Cybergold.
Cybergold has not violated any of the non-solicitation provisions in the merger
agreement and the board of directors of Cybergold determines, in good faith, in
consultation with its outside counsel, that it is required to withdraw such
recommendation in order to comply with its fiduciary obligations under
applicable law.

Regardless of whether the Cybergold board of directors has received a
superior offer or withdrawn its recommendation of the merger, Cybergold is
obligated under the merger agreement to hold and convene the Cybergold special
meeting.

Cybergold's Employee Benefit Plans

Individuals who are employed by Cybergold when the merger is completed will
become employees of MyPoints or one of MyPoints's subsidiaries, although
MyPoints may terminate these employees at any time. MyPoints will provide
benefits to Cybergold employees in their new positions with MyPoints that are
substantially the same as the benefits currently provided to employees of
MyPoints. Cybergold employees will get credit for all service with Cybergold
prior to the merger for eligibility and vesting purposes and benefit accrual.

Treatment of Cybergold Stock Options and Warrants

Upon completion of the merger, each outstanding option to purchase Cybergold
common stock will be converted into an option to purchase the number of shares
of MyPoints common stock adjusted based on the exchange ratio, rounded down to
the nearest whole number of shares. The exercise price will be equal to the
exercise price per share of Cybergold common stock divided by the exchange
ratio, rounded up to the nearest tenth of a cent. Upon completion of the
merger, all outstanding warrants to purchase Cybergold common stock will be
assumed by MyPoints, except that each warrant will be exercisable for the
number of shares of MyPoints common stock adjusted based on the exchange ratio,
rounded to the nearest whole number of shares. The exercise price of the
warrants will be equal to the exercise price per share for Cybergold common
stock divided by the exchange ratio, rounded to the nearest whole cent.

Prior to the completion of the merger, outstanding purchase rights under
Cybergold's Employee Stock Purchase Plan will be exercised, and each share of
Cybergold common stock purchased will be converted into the right to receive a
number of shares of MyPoints common stock equal to the exchange ratio in the
merger.

MyPoints will file a registration statement on Form S-8 for the shares of
MyPoints common stock issuable with respect to options under the Cybergold
stock option plans.

Conditions to Completion of the Merger

The obligations of MyPoints and Cybergold to complete the merger and the
other transactions contemplated by the merger agreement are subject to the
satisfaction or waiver of each of the following conditions before completion of
the merger:

. the merger agreement must be approved and adopted and the merger must be
approved by the requisite holders of Cybergold stock and MyPoints stock.

. MyPoints's registration statement must be effective, no stop order
suspending its effectiveness will be in effect and no proceedings for
suspension of its effectiveness will be pending before or threatened by
the Securities and Exchange Commission.

. no law, regulation or order must be enacted or issued which has the
effect of making the merger illegal or otherwise prohibiting completion
of the merger substantially on the terms contemplated by the merger
agreement.

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<PAGE>

. all applicable waiting periods under applicable antitrust laws must have
expired or been terminated.

. MyPoints and Cybergold must each receive from their respective tax
counsel, an opinion to the effect that the merger will constitute a tax-
free reorganization within the meaning of Section 368(a) of the Internal
Revenue Code. However, if counsel to either MyPoints or Cybergold does
not render this opinion, this condition will be satisfied if counsel to
the other party renders the opinion to such party.

. the shares of MyPoints common stock to be issued in the merger must be
authorized for listing on Nasdaq, subject to notice of issuance.

Cybergold's obligations to complete the merger and the other transactions
contemplated by the merger agreement are subject to the satisfaction or waiver
of each of the following additional conditions before completion of the merger:

. MyPoints's representations and warranties must be true and correct as of
April 14, 2000 and at and as of the date the merger is to be completed as
if made at and as of such time except:

- to the extent MyPoints's representations and warranties address
matters only as of a particular date, they must be true and correct as
of that date

- if any of these representations and warranties are not true and
correct but the effect in each case, or in the aggregate, of the
inaccuracies of these representations and breaches of these
warranties, is not and does not have a material adverse effect on
MyPoints, then this condition will be deemed satisfied

- for changes contemplated by the merger agreement

. MyPoints must perform or comply in all material respects with all of its
agreements and covenants required by the merger agreement to be performed
or complied with by MyPoints at or before completion of the merger

MyPoints's obligations to complete the merger and the other transactions
contemplated by the merger agreement are subject to the satisfaction or waiver
of each of the following additional conditions before completion of the merger:

. Cybergold's representations and warranties must be true and correct as of
April 14, 2000 and at and as of the date the merger is to be completed as
if made at and as of such time except:

- to the extent Cybergold's representations and warranties address
matters only as of a particular date, they must be true and correct as
of that date

- if any of these representations and warranties are not true and
correct but the effect in each case, or in the aggregate, of the
inaccuracies of these representations and breaches of these
warranties, is not and does not have a material adverse effect on
Cybergold, then this condition will be deemed satisfied

- for changes contemplated by the merger agreement

. Cybergold must perform or comply in all material respects with all of its
agreements and covenants required by the merger agreement to be performed
or complied with by Cybergold at or before completion of the merger

. Certain Cybergold employees shall have entered into non-competition
agreements and each of the agreements is in full force and effect as of
the date of the merger

. Each of Cybergold's affiliates shall have entered into an affiliate
agreement and each of the agreements is in full force and effect as of
the date of the merger

. Cybergold shall have obtained all consents, waivers and approvals
required by identified contracts.

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<PAGE>

Termination of the Merger Agreement

The merger agreement may be terminated at any time prior to completion of
the merger, whether before or after approval and adoption of the merger
agreement and approval of the merger by Cybergold stockholders:

. by mutual written consent of MyPoints and Cybergold duly authorized by
the boards of directors of Cybergold and MyPoints

. by MyPoints or Cybergold, if the merger is not completed before September
30, 2000 except that this right to terminate the merger agreement is not
available to any party whose action or failure to act has been a
principal cause of or resulted in the failure of the merger to occur on
or before September 30, 2000 and such action or failure to act
constitutes a breach of the merger agreement

. by MyPoints or Cybergold, if there is any order of a court or
governmental authority having jurisdiction over either MyPoints or
Cybergold permanently restraining, enjoining or prohibiting the
completion of the merger which is final and nonappealable

. by MyPoints or Cybergold, if the merger agreement fails to receive the
requisite vote for approval and adoption and the merger fails to receive
the requisite vote for approval by the stockholders of Cybergold at the
Cybergold special meeting or by the stockholders of MyPoints at the
MyPoints special meeting or at any adjournment of those meetings, except
that this right to terminate the merger agreement is not available to
Cybergold where the failure to obtain Cybergold stockholder approval was
caused by Cybergold's action or failure to act and such action or failure
to act constitutes a breach by Cybergold of the merger agreement

. by Cybergold, upon a breach of any representation, warranty, covenant or
agreement on the part of MyPoints in the merger agreement, or if any of
MyPoints's representations or warranties are or become untrue so that the
corresponding condition to completion of the merger would not be met.
However, if the breach or inaccuracy is curable by MyPoints through the
exercise of its best efforts, and MyPoints continues to exercise such
best efforts, Cybergold may not terminate the merger agreement for 30
days after delivery of written notice from Cybergold to MyPoints of the
breach

. by MyPoints, upon a breach of any representation, warranty, covenant or
agreement on the part of Cybergold set forth in the merger agreement, or
if any of Cybergold's representations or warranties are or become untrue
so that the corresponding condition to completion of the merger would not
be met. However, if the breach or inaccuracy is curable by Cybergold
through the exercise of its best efforts and Cybergold continues to
exercise such best efforts, MyPoints may not terminate the merger
agreement for 30 days after delivery of written notice from MyPoints to
Cybergold of the breach

. by MyPoints, upon a breach of the non-solicitation provisions in the
merger agreement by Cybergold

. by MyPoints, if (i) the board of directors of Cybergold or any committee
thereof shall for any reason have withdrawn or shall have amended or
modified in a manner adverse to MyPoints its unanimous recommendation in
favor of, the adoption and approval of the agreement or the approval of
the merger; (ii) Cybergold shall have failed to include in the proxy
statement/prospectus the unanimous recommendation of the board of
directors of Cybergold in favor of the adoption and approval of the
agreement and the approval of the merger; (iii) board of directors of
Cybergold fails to reaffirm its unanimous recommendation in favor of the
adoption and approval of the agreement and the approval of the merger
within 5 business days after Parent requests in writing that such
recommendation be reaffirmed at any time following the announcement of an
acquisition proposal; (iv) the board of directors of Cybergold or any
committee thereof shall have approved or recommended any acquisition
proposal; (v) Cybergold shall have entered into any letter of intent or
similar document or any agreement, contract or commitment accepting any
acquisition proposal; or (vi) a tender or exchange offer relating to
securities of Cybergold shall have been commenced by a person
unaffiliated with MyPoints and Cybergold shall not have sent to its
securityholders pursuant to Rule 14e-2 promulgated under the Securities
Act, within ten (10) business days after such tender or exchange offer is
first published sent or given, a statement disclosing that Cybergold
recommends rejection of such tender or exchange offer.

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Payment of Termination Fees

Cybergold will pay to MyPoints a termination fee of $7,850,000 if:

. the merger agreement is terminated by MyPoints because:

- the board of directors of Cybergold withdraws, modifies or changes its
recommendation of the merger agreement or the merger in a manner
adverse to MyPoints or its stockholders

- the board of directors of Cybergold shall have recommended to the
stockholders of Cybergold an acquisition proposal

- Cybergold fails to comply with its agreement not to solicit an
acquisition proposal nor conduct other negotiations

- an acquisition proposal shall have been announced or otherwise become
publicly known and the board of directors of Cybergold shall have
failed to recommend against acceptance of such by its stockholders
(including by taking no position, or indicating its inability to take
a position, with respect to the acceptance by its stockholders of an
acquisition proposal involving a tender offer or exchange offer) or
failed to reconfirm its approval and recommendation of the merger
agreement and the transactions contemplated hereby, in each case
within ten business days thereafter

. if between April 14, 2000 and the date of termination of the merger
agreement, a third party has announced an acquisition proposal and within
12 months following the termination of the merger agreement Cybergold
enters into an agreement or letter of intent with respect to any company
acquisition or any company acquisition is consummated.

A company acquisition is any of the following:

. a sale or other disposition by Cybergold of assets representing in excess
of 50% of the aggregate fair market value of Cybergold's business
immediately prior to such sale

Extension, Waiver and Amendment of the Merger Agreement

MyPoints and Cybergold may amend the merger agreement before completion of
the merger by mutual written consent.

Either MyPoints or Cybergold may extend the other's time for the performance
of any of the obligations or other acts under the merger agreement, waive any
inaccuracies in the other's representations and warranties and waive compliance
by the other with any of the agreements or conditions contained in the merger
agreement.

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AGREEMENTS RELATED TO THE MERGER

This section of the proxy statement/prospectus describes agreements related
to the merger agreement, including the Cybergold stockholders' voting
agreements. While we believe that these descriptions cover the material terms
of these agreements, these summaries may not contain all of the information
that is important to you.

Cybergold Stockholders' Voting Agreement

As a condition to MyPoints's entering into the merger agreement, MyPoints
and each of A. Nathaniel Goldhaber, VantagePoint Venture Partners, Alta
California Management Partners, L.P., and Alta Embarcadero Partners, LLC
entered into voting agreements. By entering into the voting agreements these
Cybergold stockholders have irrevocably appointed MyPoints as their lawful
attorney and proxy. These proxies give MyPoints the limited right to vote the
shares of Cybergold common stock beneficially owned by these Cybergold
stockholders, including shares owned by A. Nathaniel Goldhaber, and including
shares of Cybergold common stock acquired after the date of the voting
agreements, in favor of the approval. These Cybergold stockholders may vote
their shares of Cybergold common stock on all other matters.

As of the record date, these individuals and entities collectively
beneficially owned 9,687,693 shares of Cybergold common stock, which is
approximately 45% of the outstanding Cybergold common stock.

Under these voting agreements, each of these Cybergold stockholders agreed
not to sell the Cybergold common stock and options owned, controlled or
acquired, either directly or indirectly, by that person until the earlier of
the termination of the merger agreement or the completion of the merger, unless
the transfer is in accordance with the stockholder agreement and each person to
which any shares or any interest in any shares is transferred agrees to be
bound by the terms and provisions of the voting agreement. These voting
agreements will terminate upon the earlier to occur of the termination of the
merger agreement and the completion of the merger.

Affiliate Agreements

Non-Competition Agreements

Michael Koifman, A. Nathaniel Goldhaber and Daniel Berger have entered into
non-competition agreements with MyPoints that provide severance benefits upon
certain termination events. In addition, the agreements entered into by Messrs.
Berger and Koifman provide for an immediate payment of $50,000 and acceleration
of vesting of their options by one year upon one year of service after signing
the noncompetition agreement. Cybergold also lowered the exercise price on
options previously issued to Mr. Berger for 34,686 shares of Cybergold common
stock from $3.90 per share to $0.225 per share.

If Messrs. Koifman's, Goldhaber's or Berger's employment with MyPoints
terminates for any reason other than for "Cause" by MyPoints or in connection
with a transfer to Paytech any time prior to December 31, 2000, then MyPoints
will provide for payment of an amount equal to the base salary of the
terminated employee prorated from the date of termination through the 2000
calendar year.

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For purposes of these severance benefits, "Cause" is defined as a
termination for any of the following reasons: (i) a conviction (excluding a
conviction successfully appealed) for fraud or embezzlement, (ii) willful and
serious dishonesty which has a material adverse effect upon the business or
affairs of Paytech or MyPoints, (iii) repeated failure to perform the lawful
duties, functions and responsibilities of the employee's position when
reasonably requested to do so, (iv) intentional unauthorized use or disclosure
of material confidential information, trade secrets or other proprietary
information which has a material adverse effect upon the business or affairs of
Paytech or MyPoints, (v) a material breach of the terms of any agreement
between the employee and Cybergold, Paytech or MyPoints that is not remedied
within fifteen days of receipt of written notice from Paytech or from MyPoints,
including breach of the non-competition agreement, or (vi) any other
intentional misconduct which has a material adverse effect upon the business or
affairs of Paytech or MyPoints.

In the case of Michael Koifman, the severance benefits will be paid upon a
substantive change of his duties, responsibilities and title in the surviving
corporation.

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COMPARATIVE PER SHARE MARKET PRICE DATA

MyPoints common stock has been traded on the Nasdaq National Market under
the symbol "MYPT" since August 20, 1999, the date of MyPoints's initial public
offering. Cybergold common stock has been traded on the Nasdaq National Market
under the symbol "CGLD" since September 22, 1999, the date of Cybergold's
initial public offering. The following table sets forth, for the calendar
quarters indicated, the high and low sale prices per share of MyPoints common
stock and Cybergold common stock as reported on the Nasdaq National Market.

<TABLE>
<CAPTION>
MyPoints Cybergold
------------- ------------
High Low High Low
------ ------ ------ -----
<S> <C> <C> <C> <C>
Calendar Year 1999:
Third Quarter................................... $26.50 $10.50 $14.44 $9.25
Fourth Quarter.................................. 97.69 11.50 26.38 5.19
Calendar Year 2000:
First Quarter................................... $77.50 $25.25 $22.38 $9.25
Second Quarter (to June 20, 2000)............... 36.50 10.19 10.94 4.50
</TABLE>

The table below presents the per share closing prices of MyPoints common
stock and Cybergold common stock on the Nasdaq National Market and the pro
forma equivalent market value of MyPoints common stock to be issued for
Cybergold common stock in the merger as of the dates specified. April 14, 2000
was the last trading date before announcement of the merger. Cybergold's pro
forma equivalent market value was determined by multiplying the closing prices
of the MyPoints common stock as of the specified dates by the exchange ratio of
0.480. June 20, 2000 was the most recent practicable date before the date of
this proxy statement/prospectus.

<TABLE>
<CAPTION>
Last Reported Sale Price Cybergold
------------------------- Common Stock
MyPoints Cybergold Pro Forma
Date Common Stock Common Stock Equivalent Value
---- ------------ ------------ ----------------
<S> <C> <C> <C>
April 14, 2000.................... $ 14.938 $ 5.500 $7.17
June 20, 2000..................... $ 17.750 $ 8.375 $8.52
</TABLE>

Both MyPoints and Cybergold stockholders are advised to obtain current
market quotations for MyPoints common stock and Cybergold common stock. No
assurance can be given as to the market prices of MyPoints common stock or
Cybergold common stock at any time before the consummation of merger or as to
the market price of MyPoints common stock at any time after merger. Because the
exchange ratio is fixed, the exchange ratio will not be adjusted to compensate
Cybergold stockholders for decreases in the market price of MyPoints common
stock which could occur before the merger becomes effective. In the event the
market price of MyPoints common stock decreases or increases prior to the
consummation of merger, the value of the MyPoints common stock to be received
in merger in exchange for Cybergold common stock would correspondingly decrease
or increase.

Dividends

MyPoints and Cybergold have never paid cash dividends on their respective
shares of capital stock. Pursuant to the merger agreement, each of MyPoints and
Cybergold has agreed not to pay cash dividends pending the consummation of
merger, without written consent of the other. If the merger is not consummated,
the Cybergold board presently intends that it would continue its policy of
retaining all earnings to finance the expansion of its business. The MyPoints
board presently intends to retain all earnings for use in its business and has
no present intention to pay cash dividends before or after the merger.

63
<PAGE>

UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS

On April 14, 2000, MyPoints entered into an agreement to merge with
Cybergold in a transaction to be accounted for as a purchase. Under the terms
of the agreement, each issued and outstanding common share of Cybergold will be
exchanged for 0.480 shares of MyPoints common stock. Assuming the acquisition
was consummated on March 31, 2000, the stockholders of Cybergold will receive
approximately 10,275,000 shares of MyPoints common stock. Additionally,
MyPoints will convert approximately 2,774,000 Cybergold options into
approximately 1,332,000 options to purchase MyPoints common stock. These
estimates are preliminary and the actual number of shares and stock options to
purchase shares will depend on the actual number outstanding as of the date of
consummation of the merger.

The following unaudited pro forma condensed combined financial statements
present the effect of the proposed merger of MyPoints and Cybergold as a
purchase. The unaudited pro forma condensed combined balance sheet presents the
combined financial position of MyPoints and Cybergold as of March 31, 2000,
assuming that the proposed merger had occurred as of that date based upon the
historical balance sheet of MyPoints, and the historical balance sheet of
Cybergold as of March 31, 2000.

The unaudited pro forma condensed combined statements of operations give
effect to the proposed merger by combining the historical statements of
operations of MyPoints and Cybergold for the year ended December 31, 1999 and
the three months ended March 31, 2000, and do not give effect to the
disposition of its Paytech business. These unaudited pro forma condensed
combined financial statements should be read in conjunction with the historical
financial statements and notes thereto of MyPoints and Cybergold included
elsewhere in this proxy statement/prospectus.

The unaudited pro forma condensed combined financial statements are
presented for illustrative purposes only and are not necessarily indicative of
the operating results or financial position that would have occurred if the
merger had been consummated for the periods noted, nor are they necessarily
indicative of future operating results or financial position.

64
<PAGE>

UNAUDITED PRO FORMA CONDENSED COMBINED
BALANCE SHEET AS OF MARCH 31, 2000
(In thousands)

<TABLE>
<CAPTION>
Historical
------------------- Pro Forma
MyPoints Cybergold Adjustments Combined
-------- --------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........ $116,392 $ 16,107 $ -- $132,499
Short-term investments in
marketable securities........... -- 23,442 -- 23,442
Accounts receivable, net......... 15,922 3,233 -- 19,155
Unbilled receivable, net......... 577 -- -- 577
Notes and interest receivable.... 1,996 -- -- 1,996
Deposits and prepaid expenses.... 1,983 1,061 -- 3,044
Other currents assets 495 -- -- 495
-------- -------- -------- --------
Total current assets............ 137,365 43,843 -- 181,208
Intangible assets................. 21,390 176 (176)A 161,183
139,793 A
Restricted cash................... 2,508 -- -- 2,508
Property and equipment, net....... 9,901 1,475 -- 11,376
Other assets...................... 78 147 -- 225
-------- -------- -------- --------
Total assets.................... $171,242 $ 45,641 $139,617 $356,500
======== ======== ======== ========
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued
liabilities..................... $ 14,004 $ 4,609 $ -- $ 18,613
Notes payable, current portion... 326 126 -- 452
Obligations under capital leases,
current position................ 112 87 -- 199
Other current liabilities........ -- 3,444 -- 3,444
Deferred revenue................. 1,636 666 -- 2,302
Points redemption liability...... 11,458 -- -- 11,458
-------- -------- -------- --------
Total current liabilities....... 27,536 8,932 -- 36,468
Notes payble, less current
portion.......................... 836 268 -- 1,104
Obligations under capital leases,
less current portion............. 71 63 -- 134
Stockholders' equity (deficit):
Common stock..................... 29 3 (3)A 39
10 A
Additional paid-in capital....... 220,428 71,485 (70,168)A 397,730
175,985 A
Deferred stock-based
compensation.................... (8,306) (1,200) -- (9,506)
Unrealized loss on marketable
securities...................... -- (117) -- (117)
Accumulated deficit.............. (69,352) (33,793) 33,793 A (69,352)
-------- -------- -------- --------
Total stockholders' equity
(deficit)...................... 142,799 36,378 139,617 318,794
-------- -------- -------- --------
Total liabilities and
stockholders' equity
(deficit)...................... $171,242 $ 45,641 $139,617 $356,500
======== ======== ======== ========
</TABLE>

See accompanying notes to unaudited pro forma combined financial data.

65
<PAGE>

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
(In thousands, except per share data)

<TABLE>
<CAPTION>
Historical
------------------- Pro Forma
MyPoints Cybergold Adjustments Combined
-------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues.......................... $ 24,140 $ 5,483 $ -- $ 29,623
Cost of revenues.................. 7,407 1,928 -- 9,335
-------- -------- -------- --------
Gross profit...................... 16,733 3,555 -- 20,288
-------- -------- -------- --------
Operating expenses:
Technology costs................ 8,665 3,187 -- 11,852
Sales and marketing expense..... 30,247 9,158 -- 39,405
General and administrative
expense........................ 9,601 3,352 -- 12,953
Amortization of intangible
assets......................... 3,116 -- 27,959 B 31,075
Stock-based compensation........ 3,054 735 -- 3,789
-------- -------- -------- --------
Total operating expenses...... 54,683 16,432 27,959 99,074
-------- -------- -------- --------
Operating loss.................... (37,950) (12,877) (27,959) (78,786)
Interest income/(expense), net.... 494 740 -- 1,234
-------- -------- -------- --------
Net loss.......................... (37,456) (12,137) (27,959) (77,552)
-------- -------- -------- --------
Dividend related to preferred
stockholders..................... (9,800) (1,571) -- (11,371)
-------- -------- -------- --------
Net loss attributable to common
stockholders..................... $(47,256) $(13,708) $(27,959) $(88,923)
======== ======== ======== ========
Basic and diluted net loss per
share............................ $ (3.53) $ (1.45) $ (3.76)
======== ======== ========
Weighted average share -- basic
and diluted...................... 13,397 9,464 10,275 A 23,672
======== ======== ======== ========
</TABLE>

See accompanying notes to unaudited pro forma combined financial data.

66
<PAGE>

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000
(In thousands, except per share data)

<TABLE>
<CAPTION>
Historical
------------------- Pro Forma
MyPoints Cybergold Adjustments Combined
-------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues............................ $ 15,822 $ 4,290 $ -- $ 20,112
Cost of revenues.................... 4,113 1,172 -- 5,285
-------- ------- ------- --------
Gross profit...................... 11,709 3,118 -- 14,827
Operating expenses:
Technology costs.................. 5,276 1,630 -- 6,906
Sales and marketing expense....... 11,393 5,410 -- 16,803
General and administrative
expense.......................... 4,400 2,302 -- 6,702
Amortization of intangible
assets........................... 1,177 -- 6,990 B 8,167
itarget acquisition costs......... -- 2,142 -- 2,142
Stock-based compensation.......... 1,100 113 -- 1,213
-------- ------- ------- --------
Total operating expenses........ 23,346 11,597 6,990 41,933
-------- ------- ------- --------
Operating loss...................... (11,637) (8,479) (6,990) (27,106)
Interest income, net................ 763 563 -- 1,326
-------- ------- ------- --------
Net loss............................ $(10,874) $(7,916) $(6,990) $(25,780)
======== ======= ======= ========
Basic and diluted net loss from
continuing operations per share.... $ (0.40) $ (0.38) $ (0.69)
======== ======= ========
Weighted average share -- basic and
diluted............................ 26,872 20,642 10,275 A 37,147
======== ======= ======= ========
</TABLE>

See accompanying notes to unaudited pro forma combined financial data.

67
<PAGE>

NOTES TO UNAUDITED CONDENSED COMBINED PRO FORMA FINANCIAL STATEMENTS

NOTE 1 -- BASIS OF PRESENTATION

On April 14, 2000, MyPoints.com, Inc., ("MyPoints") entered into an
agreement to merge with Cybergold, Inc. ("Cybergold") in a transaction to be
accounted for as a purchase. The purchase price of the Cybergold acquisition is
estimated to be $176 million including the estimated value of the MyPoints
shares and estimated transaction costs of $2.5 million. Assuming the
acquisition was consummated on March 31, 2000, the stockholders of Cybergold
will receive approximately 10,275,000 shares of MyPoints common stock.
Additionally, MyPoints will convert approximately 2,516,000 Cybergold options
into approximately 1,208,000 options to purchase MyPoints common stock. These
estimates are preliminary and the actual number of shares and stock options to
purchase shares will depend on the actual number outstanding as of the date of
consummation of the merger.

The estimated value of the MyPoints common stock is approximately $16.29 per
share based on the average closing price of MyPoints's common stock for the
five day period including the date of announcement of the signing of the merger
agreement and two days preceding and succeeding such date. The estimated value
of the options to purchase MyPoints common stock is approximately $5.08 per
share using the Black-Scholes model.

The preliminary allocation of the purchase price using balances as of March
31, 2000 is summarized below (in thousands):

<TABLE>
<S> <C>
Tangible assets.................................................... $ 45,465
Goodwill and other intangibles..................................... 139,793
Assumed liabilities................................................ (9,263)
--------
Total purchase price........................................... $175,995
========
</TABLE>

The actual purchase price allocation is also dependent upon the fair value's
of the acquired assets and assumed liabilities as of the acquisition date and
the finalization of the preliminary valuation report.

NOTE 2 -- PRO FORMA ADJUSTMENTS

A To reflect acquisition of Cybergold based on preliminary purchase price
allocation described in Note 1.

B To reflect amortization of goodwill and other intangibles over their
estimated useful lives of five years, as if the acquisition occurred on
January 1, 1999 and January 1, 2000 for purposes of the statement of
operations for the year ended December 31, 1999 and the three months
ended March 31, 2000, respectively.

68
<PAGE>

COMPARISON OF RIGHTS OF HOLDERS OF
CYBERGOLD COMMON STOCK AND
MYPOINTS COMMON STOCK

This section of the proxy statement/prospectus describes certain differences
between Cybergold common stock and MyPoints common stock. While we believe that
the description covers the material differences between the two, this summary
may not contain all of the information that is important to Cybergold
stockholders, including the certificate of incorporation and bylaws of MyPoints
and the certificate of incorporation and bylaws of Cybergold. Cybergold
stockholders should read this entire document and the other documents referred
to carefully for a more complete understanding of the differences between
Cybergold common stock and MyPoints common stock.

Cybergold's certificate of incorporation and bylaws currently govern the
rights of stockholders of Cybergold. After the completion of the merger,
Cybergold's stockholders will become stockholders of MyPoints. As a result,
former Cybergold stockholders' rights will be governed by MyPoints's
certificate of incorporation and bylaws. The following paragraphs summarize
certain differences between the rights of MyPoints stockholders and Cybergold
stockholders under the certificate of incorporation and bylaws of MyPoints and
certificate of incorporation and bylaws of Cybergold, as applicable.

<TABLE>
<CAPTION>
MyPoints (Delaware) Cybergold (Delaware)
------------------------------------------------------------------------------
<S> <C>
Common Stock
------------------------------------------------------------------------------
One class is issued and Same.
outstanding. Holders are
entitled to one vote per share.
------------------------------------------------------------------------------
Preferred Stock
------------------------------------------------------------------------------
The MyPoints certificate of The Cybergold certificate of incorporation
incorporation fixes the relative authorizes the board of directors to issue
powers, preferences, special shares of preferred stock in one or more
rights, qualifications, series and to set the designations,
limitations and restrictions liquidation preferences, conversion and
granted to or imposed on the other rights, voting powers, restrictions,
respective series of preferred limitations as to dividends,
stock. The MyPoints certificate qualifications, and terms and conditions
of incorporation reserves for of redemption thereof. The Cybergold
issuance 40,000,000 shares of certificate of incorporation provides that
preferred stock. Cybergold shall have the authority to
issue up to 5,000,000 shares of preferred
stock.
------------------------------------------------------------------------------
Special meeting of Shareholders
------------------------------------------------------------------------------
Under Delaware law and the Under Delaware law, a special meeting of
MyPoints bylaws, a special stockholders may be called by the board of
meeting of stockholders may be directors or any other person authorized
called by the board of directors to do so in the certificate of
or any other person authorized incorporation or the bylaws. Cybergold's
to do so in the certificate of bylaws authorize the board of directors,
incorporation or the bylaws. the Chairman of the board or the President
to call a special meeting of stockholders
pursuant to a resolution adopted by a
majority of the directors of the entire
board of directors or at the written
request of stockholders owning at least
50% of the capital stock of Cybergold
issued and outstanding and entitled to
vote.
</TABLE>

69
<PAGE>

<TABLE>
<CAPTION>
MyPoints (Delaware) Cybergold (Delaware)
------------------------------------------------------------------------------
<S> <C>
Action by written consent in lieu of a stockholders' meeting
------------------------------------------------------------------------------
Under Delaware law, stockholders Under Delaware law, stockholders may take
may take action by written action by written consent in lieu of
consent in lieu of voting at a voting at a stockholders meeting. Delaware
stockholders meeting. Delaware law permits a corporation, pursuant to a
law permits a corporation, provision in such corporation's
pursuant to a provision in such certificate of incorporation, to eliminate
corporation's certificate of the ability of stockholders to act by
incorporation, to eliminate the written consent. Cybergold's certificate
ability of stockholders to act of incorporation eliminates the ability of
by written consent. MyPoints's stockholders to act by written consent.
certificate of incorporation
does not eliminate the ability
of stockholders to act by
written consent.
------------------------------------------------------------------------------
Voting by written ballot
------------------------------------------------------------------------------
Under Delaware law, the right to Same.
vote by written ballot may be
restricted if so provided in the
certificate of incorporation.
MyPoints's certificate of
incorporation and bylaws do not
restrict the right to vote by
ballot.
------------------------------------------------------------------------------
Record date for determining stockholders
------------------------------------------------------------------------------
The MyPoints bylaws provide that The Cybergold bylaws do not contain
the board of directors may fix a provisions related to the fixing of a
record date that: shall not be record date.
more than 60 days, nor less than
10 days, before the date of the
meeting.

Furthermore, the bylaws provide
that if the board of directors
does not fix a record date in
the manner described above,
then:

. the record date for
determining stockholders
entitled to notice of or to
vote at a meeting of
stockholders shall be at the
close of business on the day
next preceding the day on
which notice is given, or, if
notice is waived, at the close
of business on the day next
preceding the day on which the
meeting is held.

. the record date for
determining stockholders
entitled to express consent to
corporate action in writing
without a meeting when no
prior action by the board of
directors is necessary, shall
be the day on which the first
written consent is expressed.

. the record date for
determining stockholders for
any other purpose shall be at
the close of business on the
day on which the board of
directors adopts the related
resolution.
</TABLE>

70
<PAGE>

<TABLE>
<CAPTION>
MyPoints (Delaware) Cybergold (Delaware)
---------------------------------------------------------------------------
<S> <C>
Advance notice provisions for board nomination and other stockholders
business--annual meetings
---------------------------------------------------------------------------
The MyPoints bylaws do not The Cybergold bylaws require that nominations
contain any advance notice of persons for election to the board of
provisions. directors and the proposal of business to be
considered at an annual meeting of
stockholders must be made by the board of
directors, the Chairman of board, the Chief
Executive Officer or the President, or by a
stockholder who gives proper notice. If made
by a stockholder, the proposal or nomination
must be made by advance written notice given
to Cybergold not less than 70 days nor more
than 90 days prior to the date of the
meeting, provided however, that if the date
of the annual meeting is advanced by more
than 20 days, or delayed by more than
70 days, notice by the stockholder, to be
timely, must be delivered or received not
earlier than the 90th day prior to such
annual meeting and not later than the close
of business on the later of the 70th day
prior to such annual meeting or the 10th day
following the day on which the notice of the
meeting is mailed or public disclosure of the
date of such meeting is first made. The
Cybergold bylaws also provide that any notice
from a stockholder nominating a director for
election must set forth the nominee's name,
age, business and residence address,
principal business or occupation during the
past five years, any affiliation with or
material interest in the corporation or any
transaction involving the corporation, and
any affiliation with or material interest in
any person or entity having an interest
materially adverse to the corporation. It
must also be accompanied by the nominee's
written consent to being nominated and to
serving as a director if elected.

For nominations on other business to be
brought before a meeting, the stockholder
must provide a brief description of such
business, the reasons for conducting such
business at the meeting and any material
interest in such business of such stockholder
and the beneficial owner, if any, on whose
behalf such nomination or proposal is made.
In addition, certain information, including
the stockholder's or beneficial owner's name
and number and class of shares owned, must be
provided.
---------------------------------------------------------------------------
Advance notice provisions for board nomination and other stockholders
business--special meetings
---------------------------------------------------------------------------
The MyPoints bylaws do not The Cybergold bylaws provide that, at special
contain advance notice meetings of stockholders, the only business
provisions. that can be conducted will be the items of
business set forth in the notice of the
special meeting.
</TABLE>

71
<PAGE>

<TABLE>
<CAPTION>
MyPoints (Delaware) Cybergold (Delaware)
-------------------------------------------------------------------------------
<S> <C>
Number of directors
-------------------------------------------------------------------------------

The MyPoints bylaws provide that The Cybergold bylaws provide that the
the board of directors shall number of the board of directors shall be
consist of seven members. This fixed by resolution of the board of
number may be changed by a duly directors or of the stockholders from time
adopted amendment to the to time and, until otherwise determined,
certificate of incorporation or shall be seven members.
by an amendment to the bylaws
adopted by the vote or written
consent of holders of a majority
of the stock issued and
outstanding and entitled to vote
or by a resolution of a majority
of the board of directors.
-------------------------------------------------------------------------------
Classified board of directors
-------------------------------------------------------------------------------

Delaware law provides that a Delaware law provides that a corporation's
corporation's board of directors board of directors may be divided into
may be divided into various various classes with staggered terms of
classes with staggered terms of office. The board of directors of
office. The board of directors of Cybergold is divided into three classes,
MyPoints is not classified. The as nearly equal in size as possible, with
entire board of directors is one class being elected annually.
elected annually to hold office Cybergold directors are elected to a term
until the next annual meeting. of three years and until their successors
MyPoints directors hold office are elected and qualified.
until their successors are
elected and qualified.
-------------------------------------------------------------------------------
Removal of directors
-------------------------------------------------------------------------------

The MyPoints bylaws provide that Under Delaware law, except as otherwise
any director who was elected by a provided in the corporation's certificate
specified group of stockholders of incorporation, a director of a
may be removed, with or without corporation that has a classified board of
cause, only by the affirmative directors may be removed only with cause.
vote of the holders of a majority The Cybergold bylaws provide that any
of the shares of such class or director or the entire board of directors
series given at a duly called may be removed, with or without cause, by
special meeting of such the holders of at least 66 2/3% of the
stockholders or by an action by voting power of the then outstanding
written consent. voting stock, voting together as a single
class.
-------------------------------------------------------------------------------
Board of director vacancies
-------------------------------------------------------------------------------

Under Delaware law, vacancies and Under Delaware law, vacancies and newly
newly created directorships may created directorships may be filled by a
be filled by a majority of the majority of the directors then in office,
directors then in office, even even though less than a quorum, unless
though less than a quorum, unless otherwise provided in the certificate of
otherwise provided in the incorporation or bylaws. The Cybergold
certificate of incorporation or bylaws provide that vacancies on the board
bylaws. The MyPoints bylaws of directors may only be filled by the
provide that whenever the holders vote of the majority of directors then in
of a class of stock or series of office. The Cybergold bylaws also provide
a class are entitled to elect one that vacancies and newly created
or more directors, vacancies and directorships resulting from any increase
newly created directorships of in the authorized number of directors may
such class or series may be be filled by a majority of the directors
filled by a majority of the that are in office, although less than a
directors elected by such class quorum, and directors so chosen shall hold
or series then in office, or by a office for a term expiring at the annual
sole remaining director so meeting of stockholders at which the term
elected. The MyPoints bylaws of office of the class to which they have
provide that when one or more been elected expires and until such
directors resign, the vacancies director's successor shall have been duly
on the board of directors may be elected and qualified.
filled by the vote of the
majority of directors then in
office, including those directors
who have so resigned. The
MyPoints bylaws also provide that
vacancies and newly created
directorships resulting from any
increase in the authorized number
of directors may be filled by a
majority of the directors that
are in office, although less than
a quorum, or by a sole remaining
director.
</TABLE>

72
<PAGE>

<TABLE>
<CAPTION>
MyPoints (Delaware) Cybergold (Delaware)
-------------------------------------------------------------------------------
<S> <C>
Notice of special meetings of the board of directors
-------------------------------------------------------------------------------
The MyPoints bylaws provide that The Cybergold bylaws provide that special
special meetings of the board of meetings may be called by the Chairman of
directors may be called by the the board, the President or by a majority
Chairman of the board, the of the directors. Notice of the time and
President, any Vice President, place of the special meeting shall be
the Secretary or any two delivered in writing, by telegram or by
directors. Notice of the time and telephone. If by mail, the notice must be
place of special meeting shall be deposited in the United States mail at
delivered personally or by least five days before such meeting. If by
telephone or sent by first-class telegram or by fax, such notice shall
mail or telegram, charges be delivered or transmitted, respectively,
prepaid. If by mail, the notice 24 hours prior to such meeting.
must be deposited in the United
States mail at least four days
before the time of the holding of
the meeting. If the notice is
delivered personally or by
telephone, or by telegram, it
must be delivered at least 48
hours before the time of the
holding of the meeting.
-------------------------------------------------------------------------------
Approval of loans to officers
-------------------------------------------------------------------------------
The MyPoints bylaws provide that The Cybergold bylaws do not specifically
MyPoints may lend money to or address loans to officers or employees.
otherwise assist any officer or
other employee whenever the
directors judge such a loan or
assistance reasonably to be
expected to benefit the
corporation.
-------------------------------------------------------------------------------
Indemnification
-------------------------------------------------------------------------------
The MyPoints certificate of The Cybergold bylaws provide that the
incorporation and bylaws provide corporation indemnifies and holds
that the directors and officers harmless, to the fullest extent permitted
shall be indemnified to the by law, any person who was or is a party,
fullest extent authorized by law or is threatened to be made a party, to
against any action, proceeding or any threatened, pending or completed
suit brought against such a action, suit or proceeding, whether civil,
person by reason of the fact that criminal, administrative or investigative,
he or she (i) is or was an agent because he or she is or was a director,
of the corporation; (ii) was a officer, employee or agent of the
director or officer of a corporation or serving at the request of
corporation which was a the corporation in such capacities in
predecessor corporation of the another corporation, against any judgment,
corporation or of another settlement, penalty, fine or reasonable
enterprise at the request of such expenses (including attorneys fees)
predecessor corporation; or (iii) incurred by such person. The Cybergold
serves or served at any other bylaws provide that payment of expenses in
enterprise at the request of the advance of the final disposition of an
corporation. The MyPoints bylaws action may be paid by Cybergold upon
provide that the corporation receipt of an affirmation by the
indemnifies each of its directors indemnitee that he or she has met the
and officers against expenses applicable standard of conduct and has
(including attorneys fees), agreed to repay the corporation any
judgments, fines, settlements and advances made if it should be ultimately
other amounts actually and determined that the indemnitee is not
reasonably incurred in connection entitled to indemnification by the
with any proceeding, arising by corporation.
reason of the fact that such
person is or was an agent of the
corporation.
</TABLE>

73
<PAGE>

<TABLE>
<CAPTION>
MyPoints (Delaware) Cybergold (Delaware)
-------------------------------------------------------------------------------
<S> <C>
Limitations on liability
-------------------------------------------------------------------------------

The MyPoints certificate of The Cybergold certificate of incorporation
incorporation limits or eliminates a director's personal liability
eliminates, to the fullest extent for monetary damages to Cybergold or any
permitted by Delaware law, the of its stockholders for any breach of
personal liability of a director duties of such position, except that such
to MyPoints or its stockholders liability is not eliminated for:
for monetary damages for breach
of fiduciary duty as a director.
Under Delaware law, such
provision may not eliminate or
limit director monetary liability
for:

. breaches of the director's duty . any breaches of such director's duty of
of loyalty to the corporation loyalty to the corporation or its
or its stockholders, stockholders,

. acts or omissions not in good . acts or omission not in good faith which
faith involving intentional involve intentional misconduct or a
misconduct or knowing knowing violation of law,
violations of law,

. the payment of unlawful . unlawful distributions under Section 174
dividends or unlawful stock of the Delaware General Corporation Law,
repurchases or redemptions, or or

. any transaction in which the . any transaction from which the director
director received an improper received an improper personal benefit.
personal benefit.

MyPoints's certificate of Cybergold's certificate of incorporation
incorporation provides that if provides that if at any time Delaware law
Delaware law is amended to is amended to further eliminate or limit
further eliminate or limit the the liability of a director, then the
liability of a director, the liability of each director of Cybergold
director shall not be liable to shall be eliminated or limited to the
the fullest extent permitted by fullest extent permitted thereby.
the amended law.
-------------------------------------------------------------------------------
Stockholder approval of certain business combinations
-------------------------------------------------------------------------------

Under Delaware law, "business Same.
combinations" by corporations
with "interested stockholders"
are subject to a moratorium of
three or five years,
respectively, unless specified
conditions are met. The
prohibited transactions include,
a merger with, disposition of
assets to, or the issuance of
stock to, the interested
stockholder, or certain
transactions that have the effect
of increasing the proportionate
share of the outstanding
securities held by the interested
stockholder. Under Delaware law,
an interested stockholder may
avoid the prohibition against
effecting certain significant
transactions with the corporation
if the board of directors, prior
to the time such stockholder
becomes an interested
stockholder, approves such
transaction or the transaction by
which such stockholder becomes an
interested stockholder or if at
or subsequent to such time the
board of directors and the
stockholders approve such
transaction. These provisions of
Delaware law apply to a Delaware
corporation unless the
corporation "opts out" of the
provisions in its certificate of
incorporation or bylaws. MyPoints
has not opted out of these
provisions in its certificate of
incorporation or bylaws and
consequently is subject to these
provisions.
</TABLE>

74
<PAGE>

<TABLE>
<CAPTION>
MyPoints (Delaware) Cybergold (Delaware)
------------------------------------------------------------------------------
<S> <C>
Par value, dividends and repurchases of shares
------------------------------------------------------------------------------
The concepts of par value, capital and Same.
surplus are retained under Delaware law.
Delaware law permits a corporation to
declare and pay dividends out of surplus
or, if there is no surplus, out of the net
profits for the fiscal year in which the
dividend is declared and/or for the
preceding fiscal year as long as the amount
of capital of the corporation following the
declaration and payment of the dividend is
not less than the aggregate amount of the
capital represented by the issued and
outstanding stock of all classes having a
preference upon the distribution of assets.
In addition, Delaware law generally
provides that a corporation may redeem or
repurchase its shares only if such
redemption or repurchase would not impair
the capital of the corporation.
Notwithstanding the foregoing, a Delaware
corporation may redeem or repurchase shares
having a preference upon the distribution
of any of its assets if such shares will be
retired upon acquisition, and provided
that, after the reduction in capital made
in connection with such retirement of
shares, the corporation's remaining assets
are sufficient to pay any debts not
otherwise provided for.
------------------------------------------------------------------------------
Dissenters' or appraisal rights
------------------------------------------------------------------------------
Such rights are not available with respect Same.
to a merger or consolidation by a
corporation the shares of which are either
listed on a national securities exchange or
held of record by more than 2,000
stockholders if such stockholders are
required to receive only shares of the
surviving corporation, shares of any other
corporation which are either listed on a
national securities exchange or held of
record by more than 2,000 holders, cash in
lieu of fractional shares or a combination
of the foregoing.
</TABLE>

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<TABLE>
<CAPTION>
MyPoints (Delaware) Cybergold (Delaware)
------------------------------------------------------------------------------
<S> <C>
Description of Common Stock
------------------------------------------------------------------------------
The holders of MyPoints common The holders of Cybergold common stock are
stock are entitled to one vote entitled to one vote for each share held
for each share held of record on of record on all matters submitted to a
all matters submitted to a vote vote of stockholders. There are no
of stockholders. Holders of cumulative voting rights. All outstanding
common stock have no preemptive shares of common stock are fully paid and
rights or rights to convert nonassessable.
their common stock into any
other securities. There are no
redemption or sinking fund
provisions applicable to the
common stock. All outstanding
shares of common stock are fully
paid and non-assessable and have
a par value of $0.001 per share.
Subject to preferences that may
be applicable to any outstanding
shares of preferred stock, the
holders of common stock are
entitled to receive ratably such
dividends, if any, as may be
declared by the board of
directors out of funds legally
available for the payment of
dividends. In the event of a
liquidation, dissolution or
winding up of MyPoints, the
holders of common stock are
entitled to share ratably in all
assets remaining after payment
of liabilities and liquidation
preferences of any outstanding
shares of preferred stock.
------------------------------------------------------------------------------
Description of Preferred Stock
------------------------------------------------------------------------------
Pursuant to MyPoints's amended Pursuant to Cybergold's certificate of
and restated certificate of correction of the amended and restated
incorporation, the board of certificate of incorporation, the board of
directors has the authority, directors has the authority, without
without further action by the further action by the stockholders, to
stockholders, to issue up to issue up to 5,000,000 shares of preferred
40,000,000 shares of preferred stock in one or more series and to fix the
stock, $0.001 par value per designations, powers, preferences,
share. The MyPoints amended and privileges and relative, participating,
restated certificate of optional or special rights and the
incorporation fixes the qualifications, limitations or
designations, powers, restrictions thereof, including dividend
preferences, privileges and rights, conversion rights, voting rights,
relative participating, optional terms of redemption and liquidation
or special rights and the preferences, any or all of which may be
qualifications, limitations or greater than the rights of the common
restrictions thereof, including stock. The board of directors, without
dividend rights, conversion stockholder approval, can issue preferred
rights, voting rights, terms of stock with voting, conversion or other
redemption and liquidation rights that could adversely affect the
preferences. The board, without voting power and other rights of the
stockholder approval, can issue holders of common stock. Preferred stock
preferred stock with voting, could thus be issued quickly with terms
conversion or other rights that calculated to delay or prevent a change of
could adversely affect the control of Cybergold or make removal of
voting power and other rights of management more difficult. Additionally,
the holders of common stock. the issuance of preferred stock may have
Preferred stock could thus be the effect of decreasing the market price
issued quickly with terms of the common stock and may adversely
calculated to delay or prevent a affect the voting and other rights of the
change in control of MyPoints or holders of common stock. Cybergold has no
make removal of management more plans to issue any preferred stock.
difficult. Additionally, the
issuance of preferred stock may
have the effect of decreasing
the market price of the common
stock, and may adversely affect
the voting and other rights of
the holders of common stock.
There are no shares of preferred
stock outstanding and MyPoints
has no plans to issue any of the
preferred stock.
</TABLE>

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<PAGE>

<TABLE>
<CAPTION>
MyPoints (Delaware) Cybergold (Delaware)
-----------------------------------------------------------------------------
<S> <C>
Stockholder derivative suits
-----------------------------------------------------------------------------
Under Delaware law, a stockholder may only Same.
bring a derivative action on behalf of the
corporation if the stockholder was a
stockholder at the time of the transaction
in question or his or her stock thereafter
devolved upon him or her by operation of
law.
</TABLE>

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<PAGE>

CERTAIN INFORMATION REGARDING MYPOINTS

Forward Looking Statements

Except for historical information, this proxy statement/prospectus contains
forward looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These
forward looking statements involve risks and uncertainties, including, among
other things, statements regarding anticipated costs and expenses, revenue mix,
product and service development and relationships with strategic partners.
These forward looking statements include, among others, those statements
including the words "expects," "anticipates," "intends," "believes" and similar
language. Actual results may differ significantly from those projected in the
forward looking statements. Factors that might cause or contribute to such
differences include, but are not limited to, those discussed in the section
"Risk Factors" on page 16 of this proxy statement/prospectus.

MyPoints's Business

Overview

MyPoints is a leading provider of internet direct marketing services and
customer loyalty infrastructure. Our database-driven direct marketing service,
MyPoints, offers direct marketers an approach to internet advertising that
integrates targeted email and web-based offers with incentives to respond to
those offers. Our rewards-based shopping channel, MyPoints Shopping!, provides
web users with the ability to earn points for every dollar spent at select
retail sites. Points earned in the MyPoints program may be redeemed for a wide
variety of products and services, such as gift certificates, travel awards and
prepaid phone cards. Our approach to direct marketing provides internet
consumers with the opportunity to earn rewards by responding to direct offers
and by shopping, and provides businesses with an integrated set of online
customer acquisition and retention tools. In addition, we build and manage co-
branded and private label online customer loyalty programs for our loyalty
partners.

According to Media Metrix, a leading web rating service, the MyPoints web
site, www.mypoints.com, was the Internet's fifth most popular shopping site in
April 2000.

Industry Background

Growth of the Internet and Electronic Commerce

The Internet has emerged as a global medium, enabling millions of people
worldwide to share information, communicate and conduct business
electronically. International Data Corporation, or IDC, a leading technology
research organization, estimates that the number of web users will grow to
approximately 320 million worldwide by the end of 2002.

The growing use of the web represents a significant opportunity for
businesses to conduct commerce over the Internet. According to IDC,
transactions on the Internet are expected to increase from approximately
$32 billion worldwide at the end of 1998 to approximately $426 billion
worldwide by the end of 2002. The Internet allows businesses to develop one-to-
one relationships with customers worldwide without making significant
investments in traditional infrastructure such as retail outlets, distribution
networks and sales personnel.

Online Direct Marketing

Businesses operating in the electronic commerce marketplace engage in
various forms of online direct marketing to generate sales of products or
services. Direct marketing is advertising that is intended to generate a
specific response or action from a targeted group of consumers. Examples of
traditional forms of direct marketing include catalog mailings, magazine
inserts and telesales. Online direct marketing can take the form of email or
web-based promotional offers. Online direct marketing is particularly
attractive because advertisers

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can use tools that are not available in traditional media, such as measurement
of "click-through" rates and one-click response to email offers. These tools
give advertisers rapid feedback on their marketing campaigns. This feedback can
be used to tailor new messages and targeted offers.

According to Jupiter Communications, a leading internet market research
firm, online direct marketing programs offer other unique advantages to
businesses, including:

. an interactive advertising format that enables consumers to respond and
purchase online, without the need for telephone calls or store visits;

. high rates of response to direct marketing offers of between 5% and 15%,
compared to the click-through rates of traditional internet advertising--
consisting of "banners" on web sites--which have reportedly declined from
2.0% to 0.5% over the past two years;

. low cost per email message of between $0.01 and $0.25, compared to $1.00
and $2.00 per piece of direct marketing material sent via postal mail;
and

. short campaign life cycles of between 48 and 72 hours, compared to six to
eight weeks offline.

Because of these advantages, advertisers are committing relatively more
dollars to online direct marketing campaigns than to other forms of internet
advertising, such as brand marketing using banner advertisements. Forrester
Research, a leading internet research firm, projects internet advertising
expenditures in the U.S. to increase from $2.8 billion in 1999 to $22.2 billion
in 2004. Forrester estimates that direct marketing will account for 53% of
total online advertising expenditures in the U.S. in 2004, up from 15% in 1999.

Online Loyalty Programs

Membership-based loyalty programs have long been a standard part of
companies' customer relationship management programs. Consumer loyalty programs
now operating in the United States serve businesses as diverse as supermarkets,
telecommunication companies, airlines, credit cards and music and book sellers.
As the numbers of internet users and web sites increase, the importance of
customer retention to online businesses will also increase. As a result,
leading online merchants and content providers are increasingly launching and
testing programs aimed at retaining their most valuable customers.

Market Opportunity

Because of continuing corporate interest in using the internet to acquire
customers, and because of the need for online businesses to find effective ways
to retain customers once they have attracted them, we believe there is a
significant opportunity for a company that can overcome the barriers to direct
marketing and loyalty on the internet, and bring cost-effective, integrated
direct marketing and loyalty solutions to the online market.

The MyPoints Solution

MyPoints is a leading provider of internet direct marketing services and
loyalty infrastructure. In the internet marketing sector, we believe that we
are the first to combine targeted email and web-based direct marketing offers
with a rewards program, called MyPoints. We provide our advertisers and loyalty
partners with online customer acquisition channels and retention tools.

By building our direct marketing service around the MyPoints program, we
believe we have overcome key barriers to effective direct marketing on the
Internet. These barriers include inundation (the amount of email people
receive), spam (unsolicited commercial email) and anonymity (the difficulty of
matching a user's email address to a demographic profile). Our members opt into
the MyPoints program and we award them points for giving us personal
information. We inform our members that we will use the information to tailor
email offers to their interests and that they can earn additional points by
responding to those offers.

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Consumers benefit from our direct marketing and loyalty programs through the
ability to earn and redeem points by interacting with our advertisers and
loyalty partners online. Advertisers and loyalty partners benefit from the
ability to acquire and retain customers on the Internet cost-effectively.

Consumer Benefits

We have designed the MyPoints program to offer the following benefits to
members:

. Relevant Offers. The depth of our member database enables us to
accurately target advertisements to our members. This helps us to direct
only the most relevant offers to each member and increases the likelihood
that the member will view and respond to a given message.

. Leading Brands. We increase the attractiveness of our program by
providing our members with direct marketing offers from name brands such
as BMG Entertainment, Macys.com and Sprint.

. Wide Variety of Rewards. We have designed our rewards programs to be
broad. Rather than focusing on one particular type of consumer award,
such as frequent flyer miles, we provide a range of redemption
opportunities, including electronic gift certificates from name-brand
retailers, travel awards, prepaid phone cards and credits in other
popular rewards programs.

. Easily Attainable Rewards. Many of our reward opportunities are at point
levels that are low enough to be earned in a matter of weeks by a typical
active member. These easily attainable rewards include $10 gift
certificates for major retailers such as Barnes & Noble and for
restaurant chains such as The Olive Garden. We offer our members a
variety of point earning opportunities that do not require a purchase, as
well as the ability to earn points for offline activities including
credit card and long distance telephone usage.

. Engaging Member Experience. We have designed our web site to be highly
personalized and easy-to-use, featuring one-click purchase and redemption
capability. We provide personalized web and email interfaces that feature
the member's name and current point balance. Our members also have the
option to receive our email offers in rich-media format, such as HTML.

. Privacy and Control. We assure members that we will not sell personal
information to third parties without permission. We also give members a
significant amount of control over their experience by allowing them to
turn email delivery on and off, as desired, screen out unwanted
advertisement or award categories or opt out of the MyPoints program.

Business Benefits

MyPoints provides both our advertising clients, for whom we deliver direct
marketing messages, and our loyalty partners, for whom we build and manage co-
branded and private label online point programs, with a competitive advantage
in the acquisition of new customers and the retention of existing customers:

. Integrated Approach to Online Direct Marketing. We believe we are the
first direct marketing provider that has integrated online direct
marketing with an online rewards program. This enables our advertisers to
increase consumer response rates by rewarding consumers who take
advantage of their targeted offers.

. Access to Our Proprietary Member Database. Our members provide us with
demographic, behavioral and transactional information. We use these
detailed member profiles to target offers, allowing our advertising
clients to reach the most relevant audience for their promotions and
increase consumer response rates.

. Detailed Real Time Reporting. Online direct marketing campaigns generally
begin to generate results in two or three days compared to several weeks
in offline campaigns. We employ sophisticated marketing analytics and
real-time reporting technology to evaluate the initial results of a
campaign and use that information to improve the overall results of the
current and future campaigns of our advertisers.

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. High Return on Advertising Investment. We offer direct marketers the
ability to target and reward consumers with online offers for
approximately one-tenth the cost of typical offline direct marketing
promotions. As a consequence of improved testing, targeting and rewarding
capabilities, we expect online direct marketing response rates to be
higher than other online and offline media. This combination of lower
delivery costs and higher response rates generates returns on advertising
investment that are higher than those achieved by competing direct
response media.

. Rewards-Based Shopping Channel. We offer web retailers the ability to
take advantage of our traffic and our customer loyalty infrastructure by
joining MyPoints Shopping!, our rewarded shopping channel. Through
MyPoints Shopping!, retailers can join a select group of web businesses
that offer points for every dollar our members spend on their sites.

. Customized Loyalty Solutions. We offer a variety of cost-effective and
customized solutions to our loyalty partners, including co-branded and
private label versions of our MyPoints rewards program. These programs
enable our loyalty partners to reward their users for a variety of
relationship-building activities, such as registering for a service or
customizing a home page. Additionally, the ability to reward consumers
enrolled in co-branded or private label loyalty programs for responding
to targeted email from our advertisers enables our loyalty partners to
provide consumers with substantial earning opportunities while
controlling the overall cost of the program. Our proprietary Digital
Loyalty Engine technology enables our business partners to design and
manage innovative and flexible online loyalty programs. We currently
operate or have agreed to operate loyalty programs on behalf of the
following companies: About.com, Excite@Home, Food.com, Garden.com, GTE,
Holiday Channel/Santa.com, Medsite, My Flower Shop, MyWay.com, NextCard,
OurHouse.com, Prodigy, Providian Financial, Sky Desk, Talk City, USA.net,
XOOM.com, ZDNet and Zoomerang.

Strategy

Our objective is to build leading online consumer membership services and to
enable our advertising clients and loyalty partners to more easily and
effectively acquire and retain customers. Key elements of our strategy to
achieve this objective are to:

Expand Our Membership and Deepen Our Proprietary Database

We seek to continually expand the size of our membership base and deepen our
proprietary database to provide a large audience to our advertisers and the
ability to more accurately target messages to our members. To increase the size
of our membership base, we plan to use a variety of approaches, including
online advertising, referrals, and co-branded and private label loyalty
partnerships. We increase the depth of our database by rewarding consumers for
joining our MyPoints program and for completing detailed surveys from which we
collect demographic and behavioral data. We also increase the depth of our
database by tracking the transaction activity of our members in the MyPoints
program as our members respond to direct offers and make purchases through our
rewarded shopping channel, MyPoints Shopping!. We will also continue to use
third-party data sources to build more detailed profiles of our members.

Leverage Our Direct Marketing and Loyalty Program Expertise

We will continue to use our expertise in managing direct marketing and
loyalty membership programs on the internet on behalf of our advertising
clients and loyalty partners, to enable them to maximize response rates to
their offers and increase customer retention. We use our tools and technology
to assist merchants in targeting members for specific marketing promotions
based on a variety of targeting criteria, including demographic profile and
past-purchase behavior. As we implement campaigns, we will continue to
accumulate additional data and improve our targeting capabilities and
technologies. Additionally, we will continue to provide our advertisers with
support services, including the design and production of rich-media email and
web-based offers and the graphical interfaces for our partners' loyalty
programs.

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Increase Awareness of Our Brand

We seek to increase awareness of the MyPoints brand through consumer and
trade advertising campaigns and through partnerships with high-profile internet
brands. We also extend our brand presence through our association with the
strong brands of our rewards providers, advertisers and network of co-brand
loyalty partners.

We will also seek to leverage our loyalty partnerships to increase the reach
of our direct marketing services across the Internet. Reach is defined by Media
Metrix, a leading web audience measurement firm, as "the percentage of
projected individuals within a designated demographic or market break category
that accessed the web content of specific site or category among the total
number of projected individuals using the web during the month." According to
Media Metrix, in April 2000 the MyPoints program and the MyPoints Network of
co-branded loyalty partnerships, fully implemented, would have had a combined,
unduplicated reach of approximately one-third of the Internet. We are still in
the process of implementing some of these partnerships.

Pursue "Clicks and Mortar" Opportunities

We define "clicks and mortar" as using online marketing activities to
motivate offline purchases. Forrester reported that 70 million shoppers
researched products and services on the web in 1999, leading to more than $100
billion in offline purchases. By 2003, Forrester predicts that online purchases
will reach $108 billion, and that online marketing will influence approximately
$500 billion in purchases at offline stores.

We believe the challenge for many merchants in the years to come will be to
effectively establish consumer relationships online and then to attract
consumers to an offline store for the final purchase. We are implementing a
number of initiatives to build out a "clicks and mortar" business to take
advantage of this large market. On behalf of some of our advertisers, we give
our members the opportunity to sign up for services online, but to earn points
for their offline purchases. For example, through our relationship with Sprint,
we reward members to sign up for Sprint long distance through our web site and
for every time they use Sprint long distance, an offline activity.

Maintain Our Technology Leadership

The MyPoints Digital Loyalty Engine, which underlies our rewards programs,
is a highly scalable software platform designed to serve the needs of our
members and business partners. The system currently supports more than six
million member accounts in proprietary, co-branded and private label loyalty
environments. We plan to continue developing and improving our technology to
meet the needs of a growing online marketplace. We also intend to continue to
leverage the technology and experience of Experian, a leading information
services and database management company and the parent of our largest
stockholder.

Pursue Strategic Acquisitions and Alliances

We have made several acquisitions, license arrangements and strategic
alliances to build our membership base and improve our level of services. In
our principal acquisition transaction, we acquired internet and electronic
commerce assets and technologies to support web-based rewards programs from
Enhanced Response Technologies, Inc. and a company affiliated with Experian.
This acquisition enabled us to integrate email and web-based direct marketing
and loyalty programs under the MyPoints name. Through this acquisition, we
believe we have become a key element of Experian's long-term internet
investment strategy. We intend to pursue additional strategic alliances and
acquisitions aggressively to increase membership through co-branded and private
label programs, offer new products and services, access new geographic markets
and obtain proprietary technologies. In addition, in January 2000, we acquired
Alliance Development Group, Inc., or ADG, a company that operates offline
customer rewards programs. We intend to integrate our technology with ADG's
offline programs to make them more efficient.

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Expand Internationally

We believe the anticipated international growth of internet usage has the
potential to generate significant additional revenue opportunities for us.
According to IDC, the number of web users outside the United States is
projected to increase from approximately 46 million at the end of 1998 to
approximately 184 million by the end of 2002. Currently, we have signed
agreements with international partners including MetaLand, a leading Korean e-
commerce site, StarMedia, a leading Latin American portal, Sweden Post, the
Swedish postal service, TVSN, an Australian television shopping network, and
Experian, a subsidiary of The Great Universal Stores P.L.C. Our program with
Sweden Post to license a localized version of MyPoints BonusMail for the
Swedish market has been operational since May 1999. Sweden Post operates one of
Europe's leading electronic commerce web sites. We expect that we will announce
other international programs in the course of 2000.

MyPoints Products and Services

The following table summarizes our products and services:

<TABLE>
<CAPTION>
Product/Service Description Selected Clients
-------------------------------------------------------------------------------------
<S> <C> <C>
MyPoints and MyPoints Direct marketing system .eBay
BonusMail: Internet Direct integrating targeted email and .BMG Entertainment
Marketing Services web-based offers with incentive .Intuit
points to respond to those offers .Macy's
.MotherNature.com
.Sprint
-------------------------------------------------------------------------------------
MyPoints Shopping: Rewards-based shopping channel .Avon
Internet Direct Marketing featuring select online retailers .Hickory Farms
Services with whom MyPoints members can .JC Penney
earn points for dollars spent .Lands End
.Orvis
-------------------------------------------------------------------------------------
MyPoints Network: Internet Network of web sites that use a .About.com
Loyalty Infrastructure and co-branded version of our Digital .Excite@Home
Direct Marketing Services Loyalty Engine technology to .Food.com
provide their users with loyalty .Garden.com
points to interact with their on- .GTE
site offerings .MyWay.com
.OurHouse.com
.Providian Financial
(Aria)
.Talk City
.USA.NET
-------------------------------------------------------------------------------------
Private Label Loyalty Private label loyalty programs .NextCard
Programs: Internet Loyalty based on our Digital Loyalty .Prodigy
Infrastructure and Direct Engine technology .XOOM.com
Marketing Services .ZDNet
-------------------------------------------------------------------------------------
Licensing: Internet Direct Licensing of proprietary internet .Sweden Post
Marketing and Loyalty direct marketing and loyalty
Infrastructure technology
</TABLE>

MyPoints and MyPoints BonusMail

The MyPoints program serves two primary constituencies, our members and our
advertising clients. Members enroll to earn rewards by responding to targeted
offers on the web at the MyPoints web site and to

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targeted offers by email through MyPoints BonusMail. Advertising clients use
MyPoints to reach a selected group of members with targeted offers and
incentives. We believe that MyPoints is the Internet's first direct marketing
program that integrates electronic commerce by email and web-based offers with
the infrastructure to reward consumers with points to respond to these offers.

The MyPoints program begins with enrollment, where consumers receive rewards
points for providing key demographic and behavioral information. This
enrollment information is supplemented with transactional data gathered as our
members interact with our services. Once enrolled, MyPoints members receive
points for responding to targeted, personalized offers. Members may also earn
points by filling out additional online surveys. After earning a sufficient
number of points, MyPoints members may redeem their points online for products
and services from our rewards partners, including electronic gift certificates,
travel awards, prepaid phone cards and points in other loyalty programs.
Members may also spend their points at participating catalog sites where
merchandise prices are denominated in points for MyPoints members. Our rewards
providers benefit from the MyPoints program through increased revenue and
additional customers.

The list of web-based point-earning opportunities presented to the member on
the MyPoints "earn page" depends on the profile of the visiting member. Some of
the information that determines the point-earning opportunities directed to a
member include geographic location, leisure time interests, financial
information and investment interests. The MyPoints program features a
sophisticated online account maintenance area, where members may change their
preferences and other personal information, access their earning history and
account balance, contact a member care representative, and redeem points.

We also place a high degree of importance on our commitment to maintaining
the security of member information. We are members of both TRUSTe and the
Online Better Business Bureau, and we adhere to the principles of these
organizations.

MyPoints Shopping!

In July 1999, we launched MyPoints Shopping!, a shopping service that
enables our MyPoints members to earn points by shopping online at a network of
internet merchants. We work with our retail partners to increase site traffic
and sales through our rewarded shopping channel, MyPoints Shopping!. The
following merchants are among those participating in the program: Avon, Hickory
Farms, JC Penney, Lands End and Orvis.

MyPoints Network

The MyPoints Network is a system of participating web sites which offer our
members the opportunity to earn points at locations on the Internet other than
the MyPoints web site. We provide participating web sites with a supply of
rewards points to distribute to their visitors as a loyalty and incentive tool
in exchange for the opportunity to enroll their visitors in our service. These
partnerships are co-branded with each partner. In these partnerships, the
currency always retains the MyPoints brand and we retain direct marketing
rights to the members generated by the service. We currently have agreements
with the following companies to participate in the MyPoints Network: About.com,
Excite@Home, Food.com, Garden.com, GTE, Holiday Channel/ Santa.com, Medsite, My
Flower Shop, MyWay.com, Net Sanity, OurHouse.com, Providian Financial (Aria),
Talk City, Sky Desk, USA.NET and Zoomerang.

We compensate each MyPoints Network partner with points and/or a cash bounty
for each new member the partner brings to the MyPoints program. Our partner
issues points as a loyalty tool to its users. We either manage the program
externally or enable our partner to set point-earning opportunities without our
direct involvement using our Digital Loyalty Engine. The Digital Loyalty Engine
enables each partner to reward any action that requires a click on the site,
such as clicking on a banner, registering for a service or purchasing a
product. We also provide each partner with a supply of rewards points based on
prospective membership growth, internal promotion to MyPoints members, and in
some cases, cooperative advertising to launch the new web site.

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Network partnerships create cost-effective membership growth. They also
increase our brand awareness among new affinity groups. Our network partnership
marketing group focuses on current rewards partners, electronic commerce
alliances, major electronic commerce and entertainment sites, web-based email
providers, and online community sites and portals.

Private Label Loyalty Programs

We also build and operate fully customized, private label point programs
based on the MyPoints technology. We currently operate private label programs
on behalf of NextCard Internet VISA (NextCard Rewards), Prodigy (Prodigy
Points) and XOOM.com (XOOMPoints). We also have an agreement with ZDNet to
develop and implement a private label program named ZDNet Points. Private label
loyalty programs operate in a manner similar to the MyPoints Network programs,
except that the points are branded exclusively for our partners. In most cases,
we may still market to our partners' members; however, the marketing material
we use is branded for our partners and the points issued as a response
incentive are in the form of our partners' branded currencies. Our private
label redemption options can also be adjusted to maximize support for our
partners' brands. For instance, we may include a partner's own product line in
the rewards chart, providing a set of redemption options highly relevant to the
partner's own consumer base. At all levels, a private label loyalty program
reinforces and builds loyalty to our partners' brands, while at the same time
expanding our direct marketing membership base.

Licensing Programs

We offer our technology for license to customers seeking to develop email or
web-based direct marketing and loyalty programs. As part of our license
agreement, we may receive a set-up fee and royalties based on a percentage of
revenues derived from the licensed site. We currently have one licensing
agreement in place with Sweden Post. This agreement establishes a version of
the MyPoints BonusMail program for the Swedish market. Licensing is an
attractive way for us to address international market opportunities, which
typically require a foreign language web site as well as advertising and points
redemption opportunities relevant to the local market.

Sales and Marketing

At April 30, 2000, our advertising sales organization consisted of 45
employees located primarily in San Francisco, New York, Los Angeles and
Chicago. This organization is dedicated to developing and maintaining
relationships with leading advertisers and advertising agencies nationwide. We
also seek to enter into relationships with third-party advertising sales
representatives to augment the efforts of our direct sales personnel. This
organization is also responsible for developing partnerships to acquire members
for our online direct marketing program. These partnerships can take various
forms, including membership in the MyPoints Network and private label loyalty
programs.

At April 30, 2000, our consumer marketing and business development
organization consisted of 31 employees in San Francisco, New York and Chicago.
This organization is dedicated to acquiring members for our online direct
marketing program. MyPoints consumer marketing group uses a variety of member
acquisition strategies, including referrals by current members, banner bars and
other online media placements, and affiliate programs. Affiliate programs
include relationships in which partners bring new members to MyPoints by
introducing the service to their own user bases in exchange for exposure of
their own services to the MyPoints membership or a cash payment per member.

We have a variety of affiliate programs in place, including one with Times
Company Digital, the internet business unit of The New York Times, under which
the MyPoints Program is an integrated feature in The New York Times on the
Web's registration process. Under the agreement, nytimes.com enables visitors
to join the MyPoints Program in the course of their online registration for The
New York Times on the Web.

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Advertising Clients and Rewards Providers

Set forth below is a list of our ten largest advertising clients, based on
the amount of revenues we generated during 1999:

Advertising Clients

AnyDay.com BMG Entertainment
drkoop.com Electronic News
Freeshop Garden.com
healthshop.com MotherNature.com
Sprint Zoomerang

Our ten largest rewards providers, based on points redeemed as of December
31, 1999, are as follows:

Rewards Providers

Barnes & Noble Blockbuster Video
Brinker International Darden Restaurants
JCPenney Macy's
Sprint Target
Tower Records Toys 'R' Us

Member Care

We have established a member care process that is designed to provide
superior service to all program participants.

Automated Inquiry System

We have developed automated online support services for our members, such
as online access to account information and transaction histories. Our new
member inquiry interface is designed to answer member questions automatically.
Through this member inquiry system, customers contact us via a web form that
generates an email containing relevant customer account information for
efficient handling by our member care staff.

24-hour/7-day Support

We employ an internal staff dedicated to member care and a specialized
customer support vendor, Brigade Solutions, to maximize coverage and minimize
cost and turnaround time. Through this combination, we are able to provide 24-
hour, 7-day coverage with immediate automated responses for all online
inquiries and a turnaround time of less than 24 hours for more than 95% of
basic member inquiries. We intend to continue to enhance our member care
services through increased availability of online member self-support and
improved customer reporting systems.

Technology and Infrastructure

We have developed an expandable, secure and reliable technology
infrastructure to support our online direct marketing and loyalty rewards
programs. The principal element of our proprietary technology is our Digital
Loyalty Engine. The Digital Loyalty Engine is an internet based software
application that enables our loyalty partners to set the parameters of point-
earning transactions without our direct involvement. Customizable elements
include the number of times in a given period an award may be earned, the
number of points per transaction, the maximum number of transactions per
member and the maximum aggregate numbers of points that can be awarded in a
given campaign. Partners can use the Digital Loyalty Engine to take advantage
of market opportunities on a real-time basis by establishing new point-earning
opportunities or altering the parameters of existing opportunities.

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Expandability

To date, we have demonstrated that our architecture is capable of rapid
expansion. Membership in our direct marketing and loyalty programs has grown
from fewer than two million members in January 1999 to more than eight million
members in April 2000. Our systems are also designed to capture a large amount
of data from our members, which is critical to the creation of a successful
online loyalty rewards program. In addition, our systems can be integrated with
our partners' own databases, thereby enhancing data exchange and data mining
for marketing purposes.

Security

We incorporate a variety of encryption techniques meant to protect the
privacy of consumer information and the integrity of client transactions. We
also employ a variety of automated fraud detection procedures to identify
patterns of abuse and potential fraudulent use of the system. Our fraud
detection systems can automatically disable accounts in which fraud is
suspected. The data center where our system is located provides 24-hour/7-day
security management.

Reliability

Our software system architecture uses industry standard technologies to
maximize reliability. We use Secure Socket Layer for secure transactions,
Oracle databases, the UNIX operating system and the Netscape web server within
our infrastructure. All of these platforms have demonstrated a high degree of
reliability. Our databases are also distributed among clients and among
functions. In particular, each Digital Loyalty Engine, where transactions are
recorded, is separate from the main database of account records. As a result, a
database failure would typically affect only a particular client or function
and would not adversely impact our entire system. We back up our Oracle
databases to long-term tape storage on a daily basis.

Our network servers are housed separately at Exodus Communications' data
centers in Jersey City, New Jersey and Oak Brook, Illinois. The Exodus data
centers provide redundant network connections, redundant connections to power
grids, diesel generators for emergency power, air conditioning and 24-hour/ 7-
day engineering support. Our infrastructure is built to maximize reliability
through the use of multiple central processor units and redundant power
supplies, networking and input/output controllers.

Competition

We face intense competition from both traditional and online advertising and
direct marketing businesses. We expect competition to increase due to the lack
of significant barriers to entry in the online advertising market. As we expand
the scope of our product and service offerings, we may compete with a greater
number of media companies across a wide range of advertising and direct
marketing services. Online direct marketing service companies that we currently
compete with or may in the future compete with include 24/7 Media, DoubleClick,
Flycast Communications, MatchLogic, Netcreations and yesmail.com. In addition,
several other companies offer competitive online products, services and rewards
programs, including Cybergold and Netcentives. We also face competition from
established online portals and community web sites that engage in direct
marketing, as well as from traditional advertising agencies and direct
marketing companies that may seek to offer online products or services.

Therefore, although we believe we were the first company to integrate online
direct marketing with an online rewards program, we may face additional
competition from companies engaged in online direct marketing that introduce
rewards programs and from online rewards program providers that begin offering
direct marketing services.

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Our ability to compete depends upon many factors, including:

. the timing and market acceptance of new products and services developed
either by us or our competitors;

. our ability to demonstrate the effectiveness of our service to
advertisers;

. our ability to increase the number of members who participate in our
online programs;

. our ability to increase the depth of information in our database
regarding our members by capturing demographic, behavioral and
transactional data;

. our ability to increase awareness of our brand;

. the capacity of our technology infrastructure to meet the needs of our
members, advertisers and loyalty partners; and

. sales and marketing efforts by us or our competitors.

Intellectual Property and Proprietary Rights

Our success and ability to compete are substantially dependent on our
internally developed technologies and trademarks, which we seek to protect
through a combination of patent, copyright, trade secret and trademark laws. We
have filed three patent applications in the United States. For some of these
applications, we also plan to file corresponding international patent
applications. We have entered into confidentiality or license agreements with
our employees and consultants, and corporate and strategic partners and
generally seek to control access to and distribution of our documentation and
other proprietary information. Despite these precautions, it may be possible
for third parties to copy or otherwise obtain and use our proprietary
information without authorization or to develop similar technology
independently. We pursue the registration of our trade and service marks in the
United States and internationally. We have registered trademarks for
"MyPoints," "BonusMail" and "Rew@rds" in the United States. Effective
trademark, service mark, copyright and trade secret protection may not be
available in every country in which our services are distributed or made
available through the Internet, and policing unauthorized use of our
proprietary information is difficult.

Legal standards relating to the validity, enforceability and scope of
protection of proprietary rights in internet-related businesses are uncertain
and still evolving. We cannot give any assurance as to the future viability or
value of any of our proprietary rights. In addition, we cannot give any
assurance as to the future viability or value, if any, of our proprietary
rights. In addition, we cannot give any assurance that the steps taken by us
will prevent misappropriation or infringement of our proprietary information.
Any infringement or misappropriation, should it occur, could have a material
adverse effect on our business, results of operations and financial condition.

Our business activities may infringe upon the proprietary rights of others,
and other parties may assert infringement claims against us. We have received
three claims of alleged infringement, one of which has been resolved through a
license agreement. Another infringement claim was made by Cybergold in May
1999. If the merger is not consummated, and this claim cannot be resolved
through a license or similar arrangement, we could become a party to litigation
with Cybergold. Also, in July 1999, we received an infringement claim from
another party, along with an offer to grant a license to us at a cost that
would not be material. To our knowledge, no litigation has been filed against
us based on this claim. We are evaluating the claim and have not yet begun
substantive discussions regarding it. Litigation may also be necessary to
enforce our intellectual property rights, to protect our trade secrets or to
determine the validity and scope of the proprietary rights of others. An
adverse determination in any litigation of this type could require us to make
significant changes to the structure and operation of our online rewards
program, attempt to design around a third party's patent, or license
alternative technology from another party. Implementation of any of these
alternatives could be costly and time consuming, and might not be possible.
Accordingly, an adverse determination in any litigation that might ensue
between a third party and us could have a material adverse effect on our
business, results of operations and financial condition. In addition, any
intellectual property litigation, even if successfully

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defended, would result in substantial costs and diversion of resources and
management attention and could therefore have a material adverse effect on our
business, results of operations and financial condition.

We have licensed, and may license in the future, elements of our trademarks,
trade dress and similar proprietary rights to third parties. While we attempt
to ensure that the quality of our brand is maintained by these business
partners, they may take actions that could materially and adversely affect the
value of our proprietary rights or reputation.

Product and Service Warranties

When members purchase products in response to direct marketing offers that
we send them or redeem points for products and services, we pass on to these
members the warranties made by the manufacturers of products or providers of
services. We do not provide separate additional warranties.

Employees

As of April 30, 2000, we employed 264 people, including 71 in sales and
marketing, 132 in technology and production and 61 in support, administration,
finance, management and human resources. We believe that we maintain good
relations with our employees.

Facilities

We are currently leasing approximately 40,000 square feet of office space in
San Francisco, California, approximately 23,000 square feet of office space in
Schaumburg, Illinois and approximately 4,500 square feet of office space in New
York, New York. Our sales, marketing, finance and administration functions are
based in San Francisco. Our technology and production groups are based in
Schaumburg. The lease for the San Francisco facility expires in November 2006,
with an option to extend the lease for an additional five years. The Schaumburg
facility is currently leased under a lease which expires in March 2001 and two
month-to-month leases. These leases will automatically convert into a 60-month
lease upon completion of improvements to our new Schaumburg facility.

Direct Marketing Board of Advisors

We have assembled a board of advisors with significant experience in the
direct marketing industry. Our board of advisors consists of:

Steve Carbone
President, Grey Direct e.marketing

G. Steven Dapper
Chief Executive Officer of Hawkeye Media
Former Chairman and Chief Executive Officer, Rapp Collins Worldwide

Rashi Glazer
Editor-in-Chief, Interactive Marketing Journal
Professor of Marketing, Haas School of Business, University of California
at Berkeley

Worthington Linen
Chairman and Chief Executive Officer, The Signature Group
Former President and Chief Executive Officer, BMG Direct

George S. Wiedemann
Chairman and Chief Executive Officer, Grey Direct Marketing Group
Chairman of the Direct Marketing Association

Lester Wunderman
Founder and former Chairman, Wunderman Cato Johnson

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Legal Proceedings

From time to time MyPoints may be involved in litigation arising in the
normal course of its business. MyPoints is not a party to any litigation,
individually or in the aggregate, that MyPoints believes would have a material
adverse effect on its financial condition or results of operations.

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MYPOINTS MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

The following discussion of the financial condition and results of
operations of MyPoints (i) as of March 31, 2000 and for the three months ended
March 31, 2000 and 1999 should be read in conjunction with the sections of
MyPoints's unaudited consolidated financial statements and the related notes,
and (ii) as of and for the years ended December 31, 1997, 1998 and 1999 should
be read in conjunction with the sections of MyPoints's audited consolidated
financial statements and the related notes. These consolidated financial
statements and the related notes to such consolidated financial statements are
included elsewhere in this proxy statement/prospectus. This discussion contains
forward looking statements that involve risks and uncertainties. MyPoints's
actual results may differ from those anticipated in these forward looking
statements as a result of certain factors, including, but not limited to, those
set forth under "Risk Factors" on page 16 and elsewhere in this proxy
statement/prospectus.

Overview

MyPoints was founded as Intellipost Corporation in November 1996. In May
1997, we launched our email direct marketing and rewards program. In November
and December 1998, through our acquisition of Enhanced Response Technologies,
Inc. and a company affiliated with Experian, we acquired internet and
electronic commerce related assets and technologies through a series of related
transactions. Through these transactions, we acquired a technology license for
the operation of a web-based rewards program. In early March 1999, we changed
our corporate name to MyPoints.com, Inc. in order to unify our corporate and
brand identities. During March and April 1999, we integrated our email and web-
based direct marketing and rewards programs under the MyPoints brand. In August
1999, we completed our initial public offering.

We generate substantially all of our revenues by delivering email and web-
based direct marketing offers for our advertising customers. In exchange for
these services, we receive fees from our advertisers based on any or all of the
following:

. the number of offers delivered to members;

. the number of qualified responses generated; and

. the number of qualified purchases made.

For direct marketing services, we recognize revenues when an offer is
delivered, when a qualified response is received or when a product or service
is purchased, depending upon the pricing arrangement used. Pricing of our
direct marketing services is not based on the issuance of points to our
members.

Under new and some existing advertising contracts and partnerships, we sell
points to private label partners and to advertisers for use in their
promotional campaigns. We initially defer revenue and estimated point costs
associated with the sale of points and recognize this revenue upon the
expiration or redemption of the underlying points. Under some MyPoints Network
contracts, we amortize implementation fees and related costs over the life of
these contracts.

Our revenues depend on a number of factors. These include the number of
advertisers engaging us to send direct marketing offers to our membership base,
the size of our membership base, and the responsiveness of our members to these
direct marketing offers. We believe that our revenues will be subject to
seasonal fluctuations as a result of general patterns of retail advertising,
which are typically higher during the fourth calendar quarter. In addition,
expenditures by advertisers tend to be cyclical, reflecting overall economic
conditions and consumer buying patterns.

We also offer technology licensing arrangements to customers seeking to
develop email or web-based direct marketing and loyalty programs. We entered
into our first license agreement in December 1998 with

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Sweden Post, the Swedish postal service. Sweden Post is establishing a version
of the MyPoints BonusMail program for the Swedish market. This license
agreement provides for a licensing fee, technical support fees and royalties
based on a percentage of revenues from the program site. We recognized revenue
under this agreement when the custom development work that we performed for
Sweden Post was completed and accepted by Sweden Post. In addition, we will
recognize royalty revenue as it is received from Sweden Post. We expect to
enter into additional licensing and royalty arrangements, particularly for
international markets. We also expect to derive revenues from several pending
international initiatives.

We incurred a net loss of $8.3 million in 1998, and $37.5 million in 1999.
We intend to implement our strategies by spending substantial amounts on member
acquisition and retention, new product offerings, sales and marketing strategic
relationships, brand development and technology and operating infrastructure
development. As a result, we expect increases in our net losses and negative
cash flows for the next several quarters. We expect to incur net losses at
least through 2001. Our limited operating history makes it difficult to
forecast future operating results. Although we have experienced revenue growth
in recent quarters, we cannot be certain that revenues will increase at a rate
sufficient to achieve and maintain profitability. Even if we were to achieve
profitability in any period, we might fail to sustain or increase that
profitability on a quarterly or annual basis.

The data below reflect the percentage relationship between revenue and the
major categories in the Consolidated Statements of Operations.

Selected Consolidated Statements of Earnings Data

<TABLE>
<CAPTION>
Year Ended December 31, Quarter Ended March 31,
1997 1998 1999 1999 2000
--------- ------- ------- ----------- -----------
($ in Thousands) (unaudited) (unaudited)
<S> <C> <C> <C> <C> <C>
Total revenue............ 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of revenue.......... 51.7 87.2 30.7 68.9 26.0
--------- ------- ------- -------- ------
Gross profit........... 48.3 12.8 69.3 31.1 74.0
--------- ------- ------- -------- ------
Operating expenses:
Technology costs....... 370.9 118.2 35.9 75.9 33.4
Sales and marketing
expenses.............. 1,105.3 350.9 125.3 201.1 72.0
General and
administrative
expenses.............. 471.4 157.7 39.7 84.2 27.8
Amortization of
intangible assets..... 0.0 21.4 12.9 65.3 7.4
Stock-based
compensation.......... 51.0 12.3 12.7 35.2 7.0
--------- ------- ------- -------- ------
Total operating
expenses............ 1,998.7 660.5 228.5 461.7 147.6
--------- ------- ------- -------- ------
Operating loss........... (1,950.3) (647.7) (157.2) (430.6) (73.5)
Interest income.......... 42.4 6.8 2.6 0.7 5.2
Interest expense and
other, net.............. (5.3) (1.9) (0.6) 0.0 (0.3)
--------- ------- ------- -------- ------
Net loss............. (1,913.2) (642.8) (155.2) (429.9) (68.7)
--------- ------- ------- -------- ------
Dividend related to
beneficial conversion
feature of preferred
stock................... 0.0 0.0 (40.6) (768.6) 0.0
--------- ------- ------- -------- ------
Net loss attributable
to
common stockholders..(1,913.2)% (642.8)% (195.8)% (1,198.5)% (68.7)%
========= ======= ======= ======== ======
</TABLE>

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Results of Operations for Three Months ended March 31, 1999 and 2000

Revenues

Revenues increased to $15.8 million in the three months ended March 31, 2000
as compared to $1.3 million in the three months ended March 31, 1999. This
increase was primarily attributable to the following: (i) an increase in the
number of direct marketing offers to our members, (ii) an increase in our
advertising customer base, and (iii) an increase in average spending per
advertiser.

Cost of Revenues

Cost of revenues represents the costs of points awarded to our members for
responding to advertisements and related purchasing activities associated with
our direct marketing offers as well as personnel costs associated with
creating, delivering and monitoring email campaigns. Cost of revenues increased
to $4.1 million in the three months ended March 31, 2000 from $0.9 million in
the three months ended March 31, 1999. As a percentage of revenues, these costs
decreased to 26% in the three months ended March 31, 2000 from 69% in the three
months ended March 31, 1999. The decrease in the cost of revenues as a
percentage of revenues in the three months ended March 31, 2000 as compared to
the three months ended March 31, 1999 is primarily attributable to a higher
number of revenue-generating responses to direct marketing offers, the
elimination of points cost associated with members' receipt of email direct
marketing offers, partially offset by an increase in personnel costs associated
with creating, delivering and monitoring email campaigns. The cost of personnel
included in cost of revenue increased to $0.9 million in the three months ended
March 31, 2000 as compared to zero in the three months ended March 31, 1999.
Also contributing to a lower cost of revenue was reduced costs associated with
redemption award purchases. As redemption volume has increased, we have been
able to negotiate volume purchase discounts when purchasing gift awards.

Technology Costs

Technology costs primarily consist of compensation for personnel associated
with the development of our technology and the maintenance of our proprietary
database. Presently, we expense technology costs as incurred. However, in the
future, certain technology costs may be capitalized, as appropriate. Technology
costs increased to $5.3 million in the three months ended March 31, 2000 from
$1.0 million in the three months ended March 31, 1999. This increase was
primarily due to increases in personnel and consulting costs and related
expenses used to enhance and support our proprietary database and products. We
expect our technology costs to increase in future periods as we continue to
improve and enhance our direct marketing technology and expand our membership
database.

Sales and Marketing Expenses

Sales and marketing expenses consist primarily of payroll, sales commissions
and related expenses for personnel engaged in sales, marketing and customer
support, as well as advertising and promotional expenditures including member
acquisition costs. Member acquisition costs consist primarily of online
advertising, promotional costs and payments to partners, which may be in the
form of cash or points, to attract members to our email and web-based programs.
Sales and marketing expenses increased to $11.4 million in the three months
ended March 31, 2000 from $2.6 million in the three months ended March 31,
1999. This increase was primarily attributable to increases in personnel costs,
including sales commissions, member acquisition costs and related expenses
required to implement our sales and marketing strategy. We expect increases in
sales and marketing expenses to continue in future periods as we continue to
hire additional marketing and sales employees, and continue to spend more on
member acquisition and promotions.

General and Administrative Expenses

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and administration, as well as legal fees, insurance, bad debt and fees for
professional services. General and administrative expenses increased to $4.4
million in the three months ended March 31, 2000 from $1.1 million in the three
months ended March 31, 1999. This increase was primarily due to the expansion
of our corporate infrastructure, including the addition of finance and
administrative personnel. We expect general and administrative expenses to
increase in future periods as we expand our administrative staff to support the
growth of our operations.

Amortization of Intangible Assets

The Company acquired various intangible assets as part of the acquisition of
Enhanced Response Technologies, Inc., or ERT, and a company affiliated with
Experian in the fourth quarter of 1998, and the acquisition of ADG in the first
quarter of 2000. In regards to the acquisition of ERT and a company affiliated
with Experian, the Company recorded intangible assets of $11.2 million. These
intangible assets are being amortized over their estimated useful lives of six
months to five years. In regards to the acquisition of ADG in the first quarter
of 2000, the Company recorded intangible assets of $14.8 million. These
intangible assets are being amortized over their estimated useful lives of
thirty-six to ninety months.

We recorded amortization of intangible assets of $1.2 million in the three
months ended March 31, 2000 as compared to $0.8 million in the three months
ended March 31, 1999. The increase in amortization of intangible assets in the
three months ended March 31, 2000 as compared to the three months ended March
31, 1999 relates to the acquisition of ADG in January, 2000.

Stock-Based Compensation

As of March 31, 2000, we recorded aggregate deferred compensation totaling
$12.7 million in connection with the grant of stock options to employees and
consultants. This charge is being amortized over the vesting periods of the
options, which generally range from three to four years. Stock-based
compensation increased to $1.1 million in the three months ended March 31, 2000
from $0.4 million in the three months ended March 31, 1999.

Interest Income

Interest income increased to $0.8 million in the three months ended March
31, 2000 from $9,000 in the three months ended March 31, 1999. This increase is
due to interest earned on higher average cash and investment balances resulting
from proceeds received from our initial public offering which was completed in
August 1999 and our follow-on offering which was completed in February 2000.

Income Taxes

We recorded a net loss of $37.5 million for 1999 and a net loss of $10.9
million in the three months ended March 31, 2000. Accordingly, no provision for
income taxes was recorded in the year and no tax benefit has been recognized
due to the uncertainty of realizing a future tax deduction for these losses.

Liquidity and Capital Resources

Since incorporation, we have financed our operations primarily from the sale
of equity securities to venture capital firms and other individual,
institutional and strategic investors as well as our initial public offering in
August 1999 and our follow-on public offering in February 2000. We have also
borrowed funds under long-term capital lease and equipment financing
facilities.

The total number of outstanding points issued to members for which we have a
recognized liability as of March 31, 2000 was approximately 1.5 billion points
with a redemption liability of $11.5 million. This liability was calculated
based on certain assumptions, including the assumption that 80% of the
outstanding points

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would be redeemed in the future. We also use historical redemption activity and
individual member account activity to determine our estimated redemption
liability. The factors that were considered in our estimated redemption
liability include points held by terminated and inactive members, as well as
those members we believe will not respond to our direct marketing offers with
sufficient frequency to accumulate points to meet our minimum redemption
levels. This information is updated on a quarterly basis. The total number of
points redeemed by members was 227.0 million in 1999 and 179.0 million in the
three months ended March 31, 2000.

Points issued by us have a life of three to four years. Our current policy
is that unredeemed points will expire on December 31 of the third calendar year
following the calendar year in which such points are first deemed earned.
Although we do not anticipate making changes to our current policy we reserve
the right to alter point expiration terms at anytime. In the past, we have both
extended as well as reduced expiration terms of points. Members may redeem
points in their discretion at any time prior to the expiration of the points.
We fund point redemptions through our working capital resources. Because we
cannot control the timing of members' decisions to redeem points, should the
rate of redemption of points exceed our estimates, it could be necessary for us
to obtain additional working capital and our results of operations could be
materially and adversely affected.

Net cash used in operating activities was $10.0 million in the three months
ended March 31, 2000. This cash used in operating activities was due to our
expanded operations and primarily resulted from the net loss and higher
accounts receivable. Net cash used in investing activities was $2.5 million in
the three months ended March 31, 2000 which was primarily used to acquire
property and equipment, primarily computer equipment and software. Net cash
provided by financing activities was $107.0 million in the three months ended
March 31, 2000 which includes net proceeds of $105.7 million from our follow-on
offering in February 2000.

At March 31, 2000 we had cash and cash equivalents of $116.4 million.

We currently anticipate that our available cash resources will be sufficient
to meet our anticipated working capital and capital expenditure requirements
for at least the next 12 months. Thereafter, we may need to raise additional
funds to fund more rapid expansion, to develop new or enhance existing services
or products, to respond to competitive pressures or to acquire complementary
products, businesses or technologies. If adequate funds are not available on
acceptable terms, our business, results of operations and financial condition
could be materially and adversely affected.

Results of Operations for Years Ended December 31, 1998 and 1999

We completed the acquisitions of internet and electronic commerce related
assets from ERT and a company affiliated with Experian during November and
December 1998. Accordingly, actual results of operations for the years ended
December 31, 1998 and 1999 include results for the acquired businesses from the
dates of acquisition.

Revenues

For 1999, total revenues increased to $24.1 million from $1.3 million in
1998. The increase in revenues for 1999 as compared to 1998 was primarily
attributable to the following: (i) an increase in the number of direct
marketing offers to our members, (ii) an increase in our advertising customer
base, and (iii) an increase in average spending per advertiser. Additionally,
we recognized license revenues of $614,000 in 1999 attributable to our license
arrangement with Sweden Post.

Cost of Revenues

Cost of revenues represents the costs of points awarded to our members for
receiving and responding to advertisements and related purchasing activities
associated with our direct marketing offers as well as personnel costs
associated with creating, delivering and monitoring email campaigns, For 1999,
cost of revenues

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increased to $7.4 million from $1.1 million in 1998. As a percentage of
revenues, these costs decreased to 31% in 1999 from 87% in 1998. The decrease
in the cost of revenues as a percentage of revenues in 1999 as compared to 1998
is primarily attributable to a higher number of revenue-generating responses to
direct marketing offers, as well as the elimination of points cost associated
with members' receipt of email direct marketing offers. We eliminated this
points cost because we discontinued our practice of providing points to members
for simply receiving our email direct marketing offers. We discontinued this
practice in April 1999. We now require members to respond to email offers to
earn points.

Technology Costs

Technology costs primarily consist of compensation for personnel associated
with the development of our technology and the maintenance of our proprietary
database. We expense technology costs as incurred. For 1999, technology costs
increased to $8.7 million from $1.5 million in 1998. This increase was
primarily due to increased number of personnel and related expenses used to
enhance and support our proprietary database and products. We expect our
technology costs to increase in future periods as we continue to improve and
enhance our direct marketing technology and expand our membership database.

Sales and Marketing Expenses

Sales and marketing expenses consist primarily of payroll, sales commissions
and related expenses for personnel engaged in sales, marketing and customer
support, as well as advertising and promotional expenditures including member
acquisition costs. Member acquisition costs consist primarily of online
advertising, promotional costs and payments to partners, which may be in the
form of cash or points, to attract members to our email and web-based programs.
For 1999, sales and marketing expenses increased to $30.2 million from $4.5
million in 1998. This increase was primarily attributable to increased number
of personnel and related expenses required to implement our sales and marketing
strategy as well as increased promotional and advertising expenses. We expect
increases in sales and marketing expenses to continue in future periods as we
continue to hire additional marketing and sales employees, and continue to
spend more on member acquisition and promotions.

General and Administrative Expenses

General and administrative expenses consist primarily of payroll and related
costs for general corporate functions, including finance, accounting, business
development, human resources, investor relations, facilities and
administration, as well as legal fees, insurance, bad debt and fees for
professional services. General and administrative expenses increased to $9.6
million in 1999 from $2.0 million in 1998. This increase was primarily due to
the expansion of our corporate infra-structure, including the addition of
finance and administrative personnel. We expect general and administrative
expenses to increase in absolute dollars in future periods as we expand our
administrative staff to support the growth of our operations.

Amortization of Intangible Assets

As part of the acquisition of assets from ERT and a company affiliated with
Experian, in the fourth quarter of 1998, we recorded intangible assets related
to the acquired assets in the amount of $11.2 million. These intangible assets
include core technology, purchased trademark, assembled workforce and other
intangibles. These intangibles are being amortized over their estimated useful
lives of six months to five years. We recorded amortization of intangible
assets of $3.1 million in 1999 as compared to $275,000 in 1998. Amortization
charges in 1998 were attributable to the acquisition of ERT and a company
affiliated with Experian, which was completed in the fourth quarter of 1998.

Stock-Based Compensation

As of December 31, 1999, we recorded aggregate deferred compensation
totaling $12.7 million in connection with the grant of stock options to
employees and consultants. This charge is being amortized over the vesting
periods of the options, which generally range from three to four years. Stock-
based compensation increased to $3.1 million during 1999 from $158,000 during
1998.

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<PAGE>

Interest Income

Interest income increased to $633,000 in 1999 from $87,000 in 1998. This
increase is primarily due to interest earned on higher average cash and
investment balances resulting from proceeds received from our initial public
offering which was completed in August 1999.

Income Taxes

We recorded a net loss of $37.5 million for 1999. Accordingly, no provision
for income taxes was recorded in the year and no tax benefit has been
recognized due to the uncertainty of realizing a future tax deduction for these
losses.

Results of Operations for 1997 and 1998

We completed the acquisitions of internet and electronic commerce related
assets from ERT and a company affiliated with Experian during November and
December 1998. Accordingly, approximately one month of operations of the
acquired businesses is included in our actual results of operations for the
year ended December 31, 1998. The discussion below is based on the Statement of
Operations Data set forth under "MyPoints's Selected Historical Financial Data"
on page 9 of this proxy statement/prospectus.

Revenues

Our revenues increased to $1.3 million in 1998 from $151,000 in 1997. We had
no revenues and no material expenditures in 1996. Our email direct marketing
and rewards program was launched in May 1997 and began generating revenues in
July 1997. Our direct marketing program produced substantially all of our
revenues in 1997 and 1998. The increase in revenues from 1997 to 1998 was due
primarily to an increase in the number of direct marketing offers delivered to
our members for advertisers, as well as to an increase in the size of our
membership base.

Gross Profit

Gross profit increased to $165,000 in 1998 from $73,000 in 1997. This
increase was due primarily to an increase in the number of revenue-generating
responses and purchases by members. In addition, during 1998, based on our
experience with members who became inactive in the points program, we
recognized an allowance for estimated points that are likely to expire prior to
their redemption. This allowance was credited to cost of revenues during 1998.

Technology Costs

Our technology costs increased to $1.5 million in 1998 from $560,000 in
1997. This increase was primarily due to increased hiring of technical
employees and consultants during 1998.

Sales and Marketing Expenses

Our sales and marketing expenses increased to $4.5 million in 1998 from $1.7
million in 1997. An increase in the number of sales and sales support employees
led to higher payroll expenses. Increases in revenues led to higher sales
commissions and, therefore, higher sales expenses. Also contributing to the
increase in sales expenses were increases in travel, advertising and
promotions, and other sales-related expenses. The marketing expense portion of
this increase was primarily due to a large increase in member acquisition
expenses, including online advertising and promotion expenditures as well as
the cost of points awarded to members for enrollments and related activities.
Marketing payroll expense also increased in 1998 as we hired additional
marketing staff, including management staff.

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<PAGE>

General and Administrative Expenses

Our general and administrative expenses increased to $2.0 million in 1998
from $712,000 in 1997. The increase resulted from higher professional fees and,
to a lesser extent, occupancy costs relating to opening sales offices and an
increase in the size of our San Francisco headquarters facility. Payroll
expenses associated with hiring administrative personnel also contributed to
the increase.

Income Taxes

We recorded a net loss of $2.9 million in 1997 and $8.3 million in 1998.
Accordingly, no provision for income taxes was recorded in these years, and no
tax benefit has been recognized due to the uncertainty of realizing future tax
deductions for these losses.

As of December 31, 1997 and 1998, we had net operating loss carryforwards of
approximately $1.4 million and $7.8 million for federal and state income tax
purposes. The federal and state net operating loss carryforwards begin to
expire in the years 2011 and 2004, respectively. Our ability to utilize our net
operating loss carryforwards to offset any future taxable income may be
restricted as a result of equity transactions that give rise to changes in
ownership under applicable federal and state income tax laws.

Liquidity and Capital Resources

Since incorporation, we have financed our operations primarily from the sale
of equity securities to venture capital firms and other individual,
institutional and strategic investors as well as our initial public offering in
August 1999. We have also borrowed funds under long-term capital lease and
equipment financing facilities.

Net cash used in operating activities was $2.3 million in 1997, $5.5 million
in 1998 and $24.9 million in 1999. This increase in cash used in operating
activities was due to our expanded operations and primarily resulted from an
increase in technology costs, sales, marketing, and general and administrative
expenses. In 1997, the net cash used by our $2.9 million net loss was partially
offset by a $519,000 increase in points redemption liability, a $52,000
increase in accounts payable and other accrued liabilities, and non-cash
charges of $70,000 for depreciation and amortization and $77,000 in stock-based
compensation. In 1998, the net cash used by our $8.3 million net loss was
partially offset by a $1.7 million increase in points redemption liability, an
$878,000 increase in accounts payable and other accrued liabilities, and non-
cash charges of $158,000 in stock-based compensation and $555,000 for
depreciation and amortization. In 1999, the net cash used by our $37.5 million
net loss and an increase of accounts and unbilled receivables of $13.0 million
was partially offset by a $6.9 million increase in points redemption liability,
non-cash charges of $4.9 million for depreciation and amortization and $3.1
million in stock-based compensation and a $9.7 million increase in accounts
payable and other liabilities.

Our working capital decreased from $2.4 million at December 31, 1997 to a
deficit of $307,000 at December 31, 1998 and increased to $10.9 million at
December 31, 1999. The decrease in 1998 directly resulted from a substantial
increase in points redemption liability. The points redemption liability is the
estimated cost associated with our obligation to redeem points distributed to
our member base. The increase in 1999 is a result of $51.5 million in proceeds
received from the sale of common and preferred stock as well as from an
increase in accounts receivable.

The total number of outstanding points issued to members as of December 31,
1997 and 1998 was 259.7 million and 1,407.4 million, respectively. In addition,
we assumed outstanding point balances of 120.3 million as of December 31, 1998
in connection with our acquisition of ERT and a company affiliated with
Experian. The outstanding points issued by us and acquired with the acquisition
transactions represented a points redemption liability of $519,000 at December
31, 1997 and $2.7 million at December 31, 1998. In April 1999, we consolidated
our program with the program run by the acquired companies. Our program points
were converted 5 to 1 (five old program points for one new program point) into
the new consolidated program

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<PAGE>

points. Moreover, the points in the acquired companies' program were converted
1 to 1 into the new program points. Accordingly, the total number of
outstanding points issued to members for which we have a recognized liability
as of December 31, 1999 was approximately 1.1 billion points with a redemption
liability of $9.6 million. This liability was calculated based on our
assumption that 100% of points issued in 1997 and 80% of points issued in 1998
and 1999 would be redeemed in the future. We use historical redemption activity
and individual member account activity to determine our estimated redemption
liability. The factors that are considered in our estimated redemption
liability include points held by terminated and inactive members, as well as
those members we believe will not respond to our direct marketing offers. This
information is updated on a quarterly basis. The total number of points issued
by us and redeemed by members was none in 1997, 22.5 million in 1998 and 227.0
million in 1999.

Net cash used in investing activities was $353,000 in 1997, all of which was
used to acquire property and equipment, primarily computer equipment and
software. Net cash provided by investing activities was $1.4 million in 1998,
most of which was provided by an affiliate of Experian in connection with the
acquisition transactions. The net cash used in investing activities in 1999 was
$9.4 million, which was used primarily to acquire property, leasehold
improvements, computer equipment and software.

Net cash provided by financing activities was $4.2 million in 1997, $6.2
million in 1998 and $51.0 million in 1999. These amounts included net proceeds
of $41.2 million from our initial public offering in August 1999, net proceeds
of private equity financings of $4.1 million in 1997, $6.1 million in 1998 and
approximately $10.0 million in 1999, a $100,000 equipment term loan established
in 1997 and a $400,000 equipment term loan established in 1998. The loans have
floating interest rates of prime plus 1.5% for the 1997 loan and prime plus
0.5% for the 1998 loan. Both loans are secured by a pledge of our assets and
require us to comply with certain financial covenants. During 1997 and 1998, we
were in compliance with these covenants or were operating under appropriate
waivers. In addition, in 1997, 1998 and 1999, we entered into various non-
cancelable capital lease agreements including a capital equipment lease line
for certain types of capital expenditures. These capital lease agreements have
terms ranging three to five years with interest rates ranging from 7.2% to
18.0%. Our current payment obligations under these notes, leases and capital
lease lines art approximately $45,000 per month.

At December 31, 1998 and 1999, we had cash and cash equivalents of $5.1
million and $21.8 million, respectively.

We currently anticipate that our available cash resources combined with the
net proceeds from our follow-on offering in February 2000 will be sufficient to
meet our anticipated working capital and capital expenditure requirements for
at least the next 12 months. Thereafter, we may need to raise additional funds
to fund more rapid expansion, to develop new or enhance existing services or
products, to respond to competitive pressures or to acquire complementary
products, businesses or technologies. If adequate funds are not available on
acceptable terms, our business, results of operations and financial condition
could be materially adversely affected.

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<PAGE>

Recent Accounting Pronouncements

In June 1998, the financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities. SFAS No. 133 is
effective for fiscal years beginning after June 30, 2000 and requires that all
derivative instruments be recorded on the balance sheet at fair value. Changes
in the fair value of derivatives are recorded each period in current earnings
or other comprehensive income, depending on whether a derivative is designated
as part of a hedge transaction and the type of hedge transaction. The
ineffective portion of all hedges will be recognized in earnings. We are
currently assessing the impact of this statement.

In April 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, Accounting for Certain Transactions Involving Stock
Compensation, an interpretation of APB Opinion No. 25 ("FIN 44"). Among other
issues, FIN 44 clarifies (a) the definition of employee for purposes of
applying Opinion No. 25, (b) the criteria for determining whether a plan
qualifies as a noncompensatory plan, (c) the accounting consequence of various
modifications to the terms of a previously fixed stock option or award, and (d)
the accounting for an exchange of stock compensation awards in a business
combination. FIN 44 is effective July 1, 2000, but certain conclusions in the
interpretation cover specific events that occur after either December 15, 1998
or January 12, 2000. To the extent that this interpretation covers events
occurring during the period after December 15, 1998, or January 12, 2000, but
before the effective date of July 1, 2000, the effect of applying this
interpretation are recognized on a prospective basis from July 1, 2000. We are
currently reviewing stock grants to determine the impact, if any, that may
arise from implementation of FIN 44. Among other matters, the provisions of
FASB Interpretation No. 44 will change the accounting for an exchange of
unvested employee stock options and restricted stock awards in a purchase
business combination. The new rules require the intrinsic value of the unvested
awards to be allocated to unearned compensation and recognized as noncash
compensation cost over the remaining future vesting period. The ultimate amount
to be allocated to unearned compensation will be based on the stock price of
MyPoints common stock and the number of Cybergold's unvested employee stock
options and restricted stock awards on the date the merger is completed.

In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition," which
provides guidance on the recognition, presentation, and disclosure of revenue
in financial statements filed with the SEC. SAB 101 outlines the basic criteria
that must be met to recognize revenue and provides guidance for disclosures
related to revenue recognition policies. Our revenue recognition policies
comply with the requirements of SAB 101.

Factors Affecting Operating Results

Our results of operations have varied widely in the past and we expect that
they will continue to vary significantly in the future due to number of
factors, including those set forth under "Risk Factors." You should read the
"Risk Factors" section of this prospectus carefully. Due to these factors, we
believe that quarter-to-quarter or year-to-year comparisons of our results of
operations are not a good indication of our future performance. Our results of
operations in some future quarter may be below the expectations of public
market analysts and investors. In this event, the price of our common stock is
likely to decline.

Quantitative and Qualitative Disclosures About Market Risk

Our exposure to market risk for changes in interest rates is limited to the
exposure related to our debt instruments which are tied to market rates. We do
not plan to use derivative financial instruments in our investment portfolio.
We ensure the safety and preservation of our invested principal funds by
limiting default risks, market risk and reinvestment risk. We invest in high-
credit quality securities.

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MYPOINTS MANAGEMENT

Executive Officers and Directors

The following table sets forth information regarding current executive
officers and directors of MyPoints who will serve as executive officers and
directors of MyPoints after the merger:

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Steven M. Markowitz..... 29 Chief Executive Officer and Chairman of the Board

Robert C. Hoyler........ 49 President, Chief Operating Officer and Director

Layton S. Han........... 34 Vice President, Business Development and Chief Financial Officer

Charles H. Berman....... 48 Executive Vice President, Sales

Steven E. Parker........ 36 Senior Vice President, Marketing

Frank J. Pirri.......... 59 Senior Vice President, Offline Commerce

Howard L. Morgan........ 54 Director

Thomas Newkirk.......... 54 Director

Lawrence E. Phillips.... 33 Director

Mario M. Rosati......... 53 Director

Lester Wunderman........ 79 Director
</TABLE>

Steven M. Markowitz is a founder of MyPoints and has served as our Chief
Executive Officer and Chairman of the Board since November 1996. Mr. Markowitz
also served as our President from November 1996 until December 1998. From May
1995 to August 1996, Mr. Markowitz was a securities analyst with Fidelity
Management & Research (Far East), a unit of Fidelity Investments. Mr. Markowitz
is also the founder of a specialty catalog for the Japanese software market and
has acted as an advisor to that company since 1992. From 1992 to 1994, Mr.
Markowitz was a Tokyo-based correspondent for Dow Jones & Co., Inc., a business
and financial news publishing company. Mr. Markowitz holds an A.B. from the
University of California at Berkeley and an MBA from the Haas School of
Business, University of California at Berkeley.

Robert C. Hoyler has served as our President and Chief Operating Officer
since December 1998 and has served as one of our directors since January 1999.
Prior to joining MyPoints, Mr. Hoyler had served as Chief Executive Officer of
MotivationNet since July 1996. From July 1993 to March 1996, Mr. Hoyler served
as Senior Vice President of Diversified Businesses at Keebler, a leading
consumer products company, where he was responsible for sales, marketing and
manufacturing for Keebler's Diversified Businesses unit. Mr. Hoyler holds a
B.A. from Loyola University and a Master of Management from J.L. Kellogg
Graduate School of Management, Northwestern University.

Layton S. Han has served as our Vice President, Business Development and
Chief Financial Officer since May 2000. He also has served as our Vice
President, Business Development since April 1999. From November 1996 to April
1999, Mr. Han served as our Vice President, Finance and Chief Financial
Officer. From May 1996 to August 1996, Mr. Han served with the strategy and
business development group of US West Media Group, a telecommunication company.
From 1989 to January 1996, Mr. Han served as an Account Executive of Travelers
Insurance Company where he underwrote insurance and risk financing products for
corporate clients. Mr. Han holds a B.S. from the University of California,
Davis and an M.B.A. from the Haas School of Business, University of California
at Berkeley.

Charles H. Berman has served as our Executive Vice President, Sales since
October 1998. From September 1998 to October 1998, Mr. Berman served as our
Director of Business Development. From February 1998 to September 1998, Mr.
Berman served as our Director of Consumer Marketing, where he was

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<PAGE>

responsible for all membership acquisition. From July 1994 to December 1997,
Mr. Berman served as President of Goodstuffs, a gourmet food and wine company.
From 1988 to June 1994, Mr. Berman served as President of WineWrights, a wine
membership organization company, where he managed the company from inception.
Mr. Berman holds a B.A. from Case Western Reserve University and an M.B.A. from
San Francisco State University.

Steven E. Parker has served as our Senior Vice President, Marketing since
July 1999. From November 1998 to July 1999, Mr. Parker served as our Vice
President, Product and Trade Marketing. From September 1997 to November 1998,
Mr. Parker served as Vice President, Marketing, for MotivationNet. From
December 1995 to September 1997, Mr. Parker served as President of Select
Brands, Inc. From May 1990 to December 1995, Mr. Parker held several positions
with Keebler Company, most recently Director of Category Management and New
Product Development in Keebler's Diversified Businesses unit. Mr. Parker holds
a B.S. in Commerce from the McIntire School at the University of Virginia and
an M.B.A. from Loyola University.

Frank J. Pirri has served as our Senior Vice President, Offline Commerce
since December 1998. From May 1997 to November 1998, Mr. Pirri served as
Executive Vice President of MotivationNet. From January 1994 to May 1997, Mr.
Pirri served as the President and Chief Executive Officer of Life Facts, Inc.,
a medical information products company. From January 1993 to January 1994, Mr.
Pirri served as the Vice Chairman of S&H Citadel, Inc., an incentives marketing
services company, following its merger with S&H Motivation and Citadel
Motivation. From 1987 to January 1993, Mr. Pirri served as President and Chief
Executive Officer of S&H Motivation, a consumer and business-to-business
performance improvement company. Prior to S&H Motivation, Mr. Pirri held
numerous positions over a 24-year period at The Sperry & Hutchinson Company
(S&H Green Stamps). Mr. Pirri holds a B.B.A. from Pace University and a Master
of Management from J.L. Kellogg Graduate School of Management, Northwestern
University.

Howard L. Morgan has served as one of our directors since November 1996.
Since 1989, Dr. Morgan has been President of the Arca Group, Inc., a consulting
and investment management firm specializing in the areas of computer and
communications technologies. Dr. Morgan has also served as a General Partner of
Idealab! Corporation, an incubator of internet and e-commerce companies, since
January 1999. In addition, Dr. Morgan served as Chief Executive Officer of
Franklin Electronic Publishers, Inc. in early 1998. Dr. Morgan was Professor of
Decision Sciences at the Wharton School of Business of the University of
Pennsylvania from 1972 through 1986. Dr. Morgan serves as director for a number
of public companies, including Cylink Corp., Franklin Electronic Publishers,
Inc., Infonautics Corporation, Segue Software, Inc. and Unitronix Corp.
Dr. Morgan holds a B.S. from City College of New York and a Ph.D. from Cornell
University.

Thomas Newkirk has served as one of our directors since January 1999. Mr.
Newkirk has served as the Chairman of Experian Marketing Solutions, a
subsidiary of the information services company Experian, since 1998. Mr.
Newkirk founded Direct Marketing Technology, a wholly-owned subsidiary of
Experian, in 1981 and has served as one of its directors since 1990. Mr.
Newkirk holds a B.S. from Massachusetts Institute of Technology.

Lawrence E. Phillips has served as one of our directors since December 1998.
In April 1998, Mr. Phillips formed and presently serves as Managing Director of
Primedia Ventures, a venture capital fund of Primedia, a media and publishing
company, where he directs investing activities in early-stage internet
software, commerce and advertising companies. From February 1995 to April 1998,
Mr. Phillips founded and managed an internet division for Primedia's Magazine
Group, where he had general management responsibilities for the launch and
operation of several web sites. From September 1992 to February 1995, Mr.
Phillips was a Vice President at Unterberg Harris, an investment banking firm.
Mr. Phillips holds an A.B. from Cornell University and an M.B.A. from Harvard
Business School.

Mario M. Rosati has served as one of our directors since November 1996. Mr.
Rosati has been with the Palo Alto, California law firm of Wilson Sonsini
Goodrich & Rosati, Professional Corporation, since 1971, first as an associate
and then as a member since 1975. Mr. Rosati also serves as a director of
Sanmina Corporation,

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<PAGE>

Symyx Technologies, Inc., The Management Network Group, Inc., Ross Systems,
Inc., Vivus, Inc., Meridian Data, Inc., Genus, Inc. and Aehr Test Systems. Mr.
Rosati holds a B.A. from the University of California, Los Angeles and a J.D.
from the University of California at Berkeley, Boalt Hall School of Law.

Lester Wunderman has served as one of our directors since January 1999 and
is also a member of our board of advisors. Through December 1998, Mr. Wunderman
served as Chairman of Wunderman Cato Johnson, a world-wide direct marketing
agency, which he founded in 1958. Mr. Wunderman is also Visiting Professor of
Direct Marketing at the School for Continuing Education of New York University.
He has served as Chairman of the Executive Committee of the Center for Direct
Marketing at New York University and is a Trustee of the Children's Television
Workshop. Mr. Wunderman serves as a director of Infonautics Corporation. Mr.
Wunderman holds an honorary doctorate from City University of New York.

Board Composition

Our bylaws currently authorize seven directors. Our certificate of
incorporation and bylaws provide that our board is divided into three classes,
Class I, Class II and Class III, with each class serving staggered three-year
terms. The Class I directors, Messrs. Markowitz, Morgan and Rosati, will stand
for reelection at the 2000 annual meeting of stockholders. The Class II
directors, Messrs. Hoyler and Phillips, will stand for reelection at the 2001
annual meeting of stockholders. The Class III directors, Messrs. Newkirk and
Wunderman, will stand for reelection at the 2002 annual meeting of
stockholders. Any additional directorships resulting from an increase in the
number of directors will be distributed among the three classes so that, as
nearly as possible, each class will consist of one-third of the directors. This
staggered classification of the board of directors may have the effect of
delaying or preventing changes in control or management. There are no family
relationships among any of our directors, officers or key employees.

Board Committees

The board of directors has a compensation committee and an audit committee.

Our compensation committee consists of Messrs. Morgan, Newkirk and Phillips.
The compensation committee makes recommendations regarding our various
incentive compensation and benefit plans and determines salaries for our
executive officers and incentive compensation for our employees and
consultants.

Our audit committee consists of Messrs. Phillips and Wunderman. The audit
committee makes recommendations to the board of directors regarding the
selection of our independent auditors, reviews the results and scope of the
audit and other services provided by our independent auditors and reviews and
evaluates our control functions.

Compensation Committee Interlocks and Insider Participation

None of the members of our compensation committee was, at any time since our
formation, an officer or employee of MyPoints. None of our executive officers
serves as a member of the board of directors or compensation committee of any
entity that has one or more executive officers serving as a member of our board
of directors or compensation committee. See "MyPoints Related Party
Transactions" on page 111 of this proxy statement/prospectus" for a description
of transactions between MyPoints and entities affiliated with members of our
compensation committee.

Director Compensation

We currently pay each of our directors $2,500 per quarter for their services
as members of the board of directors and an additional $2,000 for each meeting
they attend. We also reimburse them for reasonable expenses in connection with
attending our board and committee meetings. Each year, we grant each of our
outside directors an option to purchase 7,500 shares at a per share exercise
price equal to the fair market value

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<PAGE>

at the time of grant. We do not provide additional compensation for committee
participation or special assignments of the board of directors. From time to
time, we have granted our outside directors options to purchase shares of our
common stock under the 1996 stock plan or the 1999 stock plan. In January 1997,
we granted Mr. Morgan an option to purchase 133,333 shares at a per share
exercise price of $0.05. In September 1997, we granted Mr. Rosati an option to
purchase 113,333 shares at a per share exercise price of $0.10. In February
1998, we granted Mr. Rosati an option to purchase 20,000 shares at a per share
exercise price of $0.10 and Mr. Wunderman, then in his capacity as a member of
our board of advisors, an option to purchase 10,000 shares at a per share
exercise price of $0.05. In January 1999, we granted Mr. Newkirk an option to
purchase 25,000 shares, Mr. Phillips an option to purchase 25,000 shares and
Mr. Wunderman an option to purchase 50,000 shares, all at a per share exercise
price of $1.00. In December 1999, we granted Messrs. Morgan, Newkirk, Phillips,
Rosati and Wunderman each an option to purchase 7,500 shares at a per share
purchase price of $38.25.

Employment Agreements

In December 1999, our board of directors approved in principle the terms of
new employment agreements with Steven Markowitz, our Chairman and Chief
Executive Officer, and Robert Hoyler, our President and Chief Operating
Officer. The terms of these employment agreements include annual salaries of
$200,000 for Messrs. Markowitz and Hoyler and the establishment of cash and
stock option-based incentive compensation plans. The terms of these agreements
also provide for 18 months of severance pay in the event of termination of
employment under certain circumstances. In addition, if within 18 months of a
change of control of MyPoints, the employment of either individual is
terminated or either individual resigns as a result of a decrease in
compensation or work-related responsibilities, that individual will be entitled
to vesting of all then-unvested stock options as well as 18 months of severance
pay.

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<PAGE>

Executive Compensation

The following table sets forth the compensation paid by us during 1998 and
1999 to our Chief Executive Officer and our four next most-highly compensated
executive officers who received salary compensation of more than $100,000
during 1999.

Summary Compensation Table

<TABLE>
<CAPTION>
Long Term
Compensation
------------
Annual Compensation Awards
------------------------- ------------
Securities
Name and Principal Underlying All Other
Positions Year Salary ($) Bonus ($) Options (#) Compensation ($)
------------------ ---- ---------- --------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Steven M. Markowitz..... 1999 $140,000 $ -- 625,000 $ --
Chief Executive Officer 1998 100,000 -- -- --
and Chairman of the
Board of Directors

Robert C. Hoyler........ 1999 150,440 -- 440,000 --
President and Chief
Operating Officer 1998 139,682 -- -- --

Charles H. Berman....... 1999 137,614 -- 164,905 171,760(1)
Executive Vice
President, Sales 1998 76,000 -- 128,000 --

Steven E. Parker........ 1999 129,509 -- 222,931 25,000(2)
Senior Vice President,
Marketing 1998 107,312 5,000 27,069 --

Frank J. Pirri.......... 1999 156,895 -- 115,000 --
Senior Vice President,
Offline Commerce 1998 109,384 -- -- --
</TABLE>
--------
(1) Represents sales commissions.

(2) Represents a relocation bonus.

Messrs. Hoyler's and Pirri's salaries in 1998 include amounts earned at
MotivationNet before its acquisition by MyPoints.

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<PAGE>

Option Grants in Last Fiscal Year

The following table sets forth information relating to stock options granted
during 1999 to our Chief Executive Officer and our other executive officers who
received salary compensation of more than $100,000. All of these options were
awarded under our 1996 stock plan or our 1999 stock plan and have a term of ten
years from the date of grant.
<TABLE>
<CAPTION>
Potential Realizable
Individual Grants Value at Assumed
--------------------------------------------------- Annual Rates of
Number of Stock Price
Securities Percent of Appreciation for
Underlying Total Options Option Term
Options Granted in Exercise Expiration ----------------------
Name Granted (#) Fiscal 1999 Price ($/Shr.) Date 5% ($) 10% ($)
---- ---------- ------------- ------------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Steven M. Markowitz..... 350,000 6.2% $ 1.00 1/31/2009 $ 220,113 $ 557,810
90,000 1.6 8.00 4/12/2009 452,804 1,147,495
185,000 3.3 38.25 12/08/2009 4,450,216 11,277,720

Robert C. Hoyler........ 250,000 4.5 1.00 1/31/2009 157,224 398,436
90,000 1.6 8.00 4/12/2009 452,804 1,147,495
100,000 1.8 38.25 12/08/2009 2,405,522 6,096,065

Charles H. Berman....... 30,000 0.5 1.00 1/31/2009 18,867 47,812
60,000 1.1 8.00 4/12/2009 301,869 764,996
1,905 -- 8.00 5/12/2009 9,584 24,289
73,000 1.3 8.00 7/26/2009 367,274 930,746

Steven E. Parker........ 47,931 0.9 5.00 2/26/2009 150,718 381,948
90,000 1.6 8.00 5/12/2009 452,804 1,147,495
85,000 1.5 8.00 7/26/2009 427,648 1,083,745

Frank J. Pirri.......... 90,000 1.6 8.00 4/12/2009 452,804 1,147,495
25,000 0.4 8.00 8/19/2009 125,779 318,748
</TABLE>

In 1999, we granted options to purchase an aggregate of 5,614,630 shares of
common stock to our employees, directors and consultants. Generally, we grant
options at an exercise price equal to the fair market value of the underlying
common stock on the date of grant, as determined by our board of directors, and
the options vest over four years from the date of grant. Because we are a
publicly-held company, the fair market value of our stock equals its trading
market price.

In accordance with the rules of the Securities and Exchange Commission, the
above table sets forth the potential realizable value over the ten-year period
from the grant date to the expiration date, assuming rates of stock
appreciation of 5% and 10%, compounded annually. These amounts do not represent
our estimate of future stock price performance. Actual realizable values, if
any, of stock options will depend on the future performance of our common
stock.

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Fiscal Year-End Option Values

The following table sets forth information for our Chief Executive Officer
and our other executive officers who received salary compensation of more than
$100,000 in 1999, relating to the number and value of securities underlying
exercisable and unexercisable options held at December 31, 1999.

<TABLE>
<CAPTION>
Number of
Securities Underlying Value of Unexercised
Unexercised Options at In-the-Money Options at
December 31, 1999 (#) December 31, 1999 ($)
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Steven M. Markowitz......... 241,458 383,542 $15,711,122 $22,392,629
Robert C. Hoyler............ 172,291 267,709 11,453,493 16,311,507
Charles H. Berman........... 167,219 120,500 12,219,623 7,953,000
Steven E. Parker............ 44,756 155,507 2,971,357 10,446,543
Frank J. Pirri.............. 27,500 87,500 1,815,000 5,775,000
</TABLE>

The value of unexercised in-the-money options at December 31, 1999 above is
based on a value of $74.00 per share, the last reported sale price of our
common stock on the Nasdaq National Market on December 31, 1999, less the per
share exercise price, multiplied by the number of shares issuable upon exercise
of the option. All options were granted under our 1996 stock plan or our 1999
stock plan.

Stock Plans

1999 Stock Plan. Our 1999 stock plan was adopted by the board of directors
in November 1998. As of December 31, 1999, options to purchase an aggregate of
4,560,216 shares were outstanding, 178,475 shares of common stock had been
purchased pursuant to exercises of stock options and stock purchase rights, and
261,309 shares were available for future grant.

The 1999 stock plan provides for the grant of incentive stock options, as
defined in Section 422 of the Internal Revenue Code, to employees and
nonstatutory stock options, stock purchase rights and stock bonus rights to
employees, directors and consultants. The 1999 stock plan may be administered
by different committees authorizing grants to different groups of service
providers. Options granted as performance-based compensation within the meaning
of Section 162(m) are administered by a committee of two or more outside
directors. Option administration committees may make final and binding
determinations regarding the terms and conditions of the awards granted,
including the exercise prices, the numbers of shares subject to the awards and
the exercisability of the awards, forms of agreement for use under the plan and
interpretations of plan terms.

The exercise price of incentive stock options granted under the 1999 stock
plan must be at least equal to the fair market value of our common stock on the
date of grant. However, for any employee holding more than 10% of the voting
power of all classes of our stock, including the stock of any parent or
subsidiary of MyPoints, the exercise price must be no less than 110% of the
fair market value and, for any service provider, the exercise price must be no
less than 85% of the fair market value. The exercise price of nonstatutory
stock options is set by the administrator of the 1999 stock plan. The maximum
term of options granted under the 1999 stock plan is ten years. The maximum
term of options granted to holders of at least 10% of our stock is five years.

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upon the closing of the transaction. In the event of a change of control
transaction, either outstanding options that are not accelerated would be
assumed by the successor company or an equivalent option would be substituted
by the successor company. If any of these options are not assumed or
substituted, they would terminate.

None of our employees may be granted options to purchase more than 500,000
shares in any fiscal year. The 1999 stock plan will terminate in November 2008,
unless sooner terminated by the board of directors.

The board of directors may also grant stock purchase rights to employees,
directors and consultants under the 1999 stock plan. These grants would be made
pursuant to restricted stock purchase agreements, and the price to be paid for
the shares granted is determined by the administrator. We are generally granted
a repurchase option exercisable on the voluntary or involuntary termination of
the purchaser's employment with us for any reason, including death or
disability. The repurchase price must be the original purchase price paid by
the purchaser. The repurchase option lapses at a rate determined by the
administrator. Once the stock purchase right has been exercised, the purchaser
will have rights equivalent to those of a stockholder.

1996 Stock Plan. Our 1996 stock plan was adopted by the board of directors
in November 1996. As of December 31, 1999, options to purchase an aggregate of
497,002 shares were outstanding, 420,950 shares of common stock had been
purchased pursuant to exercises of stock options and stock purchase rights and
17,881 shares were available for future grant.

The 1996 stock plan provides for the grant of incentive stock options, as
defined in Section 422 of the Internal Revenue Code, to employees and
nonstatutory stock options, stock purchase rights and stock bonus rights to
employees, directors and consultants. The 1996 stock plan may be administered
by the board of directors or a committee appointed by the board. The option
administration committee may make final and binding determinations regarding
the terms and conditions of the awards granted, including the exercise prices,
the numbers of shares subject to the awards and the exercisability of the
awards, forms of agreement for use under the plan and interpretations of plan
terms.

The exercise price of incentive stock options granted under the 1996 stock
plan must be at least equal to the fair market value of our common stock on the
date of grant. However, for any employee holding more than 10% of the voting
power of all classes of our stock, the exercise price must be no less than 110%
of the fair market value. The exercise price of nonstatutory stock options is
as follows: for any person holding more than 10% of the voting power of all
classes of our stock including the stock of any parent or subsidiary of
MyPoints, the exercise price must be no less than 110% of the fair market value
and, for any service provider, the exercise price must be no less than 85% of
the fair market value. The maximum term of options granted under the 1996 stock
plan is generally ten years. The maximum term of options granted to holders of
at least 10% of our stock is five years.

An optionee whose relationship with us or any related corporation ceases for
any reason, other than death or total and permanent disability, may exercise
options in the three-month period following this cessation, or any other period
of time determined by the administrator, unless these options terminate or
expire sooner or, for nonstatutory stock options, later, by their terms. The
three-month period is extended to 12 months for terminations due to death or
total and permanent disability. In the event of a merger, sale or
reorganization of MyPoints into another corporation that results in a change of
control of us, options that would have become vested within 18 months after the
closing date of the merger transaction will accelerate and become fully vested
upon the closing of the transaction. In the event of a change of control
transaction, either outstanding options that are not accelerated would be
assumed by the successor company or an equivalent option would be substituted
by the successor company. If any these options are not assumed or substituted,
they would terminate. The 1996 stock plan will terminate in November 2006,
unless sooner terminated by the board of directors.

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<PAGE>

The board of directors may also grant stock purchase rights to employees,
directors and consultants under the 1996 stock plan. These grants are made
pursuant to restricted stock purchase agreements, and the price to be paid for
the shares granted is determined by the administrator. We are generally granted
a repurchase option exercisable on the voluntary or involuntary termination of
the purchaser's employment with us for any reason, including death or
disability. The repurchase price must be the original purchase price paid by
the purchaser. The repurchase option lapses at a rate determined by the
administrator. Once the stock purchase right has been exercised, the purchaser
will have rights equivalent to those of a stockholder.

1999 Employee Stock Purchase Plan. Our 1999 employee stock purchase plan
provides employees of MyPoints with an opportunity to purchase our common stock
through accumulated payroll deductions. A total of 200,000 shares of common
stock has been reserved for issuance under the purchase plan, 60,380 shares of
which have been issued as of December 31, 1999. The purchase plan is
administered by our board of directors or by a committee appointed by the
board. The purchase plan permits eligible employees to purchase common stock
through payroll deductions of up to 15.0% of an employee's compensation, up to
a maximum of $25,000, determined by the fair market value of the shares at the
time the stock is purchased, for all purchases ending within the same calendar
year. Employees are eligible to participate if they are customarily employed by
us for at least 20 hours per week and more than five months in any calendar
year. Unless the board of directors or its committee determines otherwise, each
offering period will run for six months. Six-month offering periods begin on
January 1 and July 1 of each year. In the event of an acquisition of MyPoints,
the offering period then in progress will be shortened and all rights
automatically exercised if the purchase rights are not assumed or substituted
by the successor corporation. The price at which common stock will be purchased
under the purchase plan is equal to 85.0% of the fair market value of the
common stock on the first day of the offering period or the last day of the
offering period, whichever is lower. Employees may end their participation in
an offering period at any time, and participation automatically ends on
termination of employment. The board may amend, modify or terminate the
purchase plan at any time as long as the amendment, modification or termination
does not impair vesting rights of plan participants. The purchase plan will
terminate in March 2009, unless terminated earlier in accordance with its
provisions.

1999 Supplemental Stock Plan. In December 1999, MyPoints's board of
directors approved our 1999 supplemental stock plan and reserved 350,000 shares
of our common stock for issuance under this plan. The 1999 supplemental stock
plan permits the grant of nonstatutory stock options to employees and
consultants. The 1999 supplemental stock plan does not permit the grant of
incentive stock options and does not permit the grant of options to executive
officers or directors of MyPoints. As of December 31, 1999, options to purchase
an aggregate of 331,000 shares of our common stock had been granted pursuant to
the 1999 supplemental stock plan.

Senior Management Incentive Plan. For fiscal year 2000, we have adopted a
senior management incentive plan under which our executive officers may receive
grants of options upon our achievement of various revenue and earnings targets.
The plan sets quarterly, semi-annual and annual targets.

401(k) Plan

In February 1997, we adopted a 401(k) plan covering our full-time employees
located in the United States. The 401(k) plan is intended to qualify under
Section 401(k) of the Internal Revenue Code, so that contributions to the
401(k) plan by employees or by us, and the investment earnings thereon, are not
taxable to employees until withdrawn from the 401(k) plan, and so that we can
deduct our contributions, if any, when made. Pursuant to the 401(k) plan,
employees may elect to reduce their current compensation by up to the
statutorily prescribed annual limit and to have the amount of the reduction
contributed to the 401(k) plan. The 401(k) plan permits, but does not require,
that we provide additional matching contributions to the 40l(k) plan on behalf
of all participants in the 401(k) plan. To date, we have not made any
contributions to the 401(k) plan.

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<PAGE>

Indemnification and Limitation of Liability

Our certificate of incorporation limits the liability of directors to the
maximum extent permitted by Delaware law. Delaware law provides that directors
of a corporation will not be personally liable for monetary damages for breach
of their fiduciary duties as directors, except liability for any of the
following:

. any breach of their duty of loyalty to the corporation or its
stockholders;

. acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law;

. unlawful payments of dividends or unlawful stock repurchases or
redemptions; or

. any transaction from which the director derived an improper personal
benefit.

This limitation of liability does not apply to liabilities arising under the
federal securities laws and does not affect the availability of equitable
remedies such as injunctive relief or rescission.

Our bylaws provide that we must indemnify our directors and executive
officers and may indemnify our other officers and employees and other agents to
the fullest extent permitted by law. We believe that indemnification under our
bylaws covers at least negligence and gross negligence on the part of
indemnified parties. Our bylaws also permit us to secure insurance on behalf of
any officer, director, employee or other agent for any liability arising out of
his or her actions in this capacity, regardless of whether the bylaws would
permit indemnification. We have purchased directors and officers liability
insurance, which provides coverage against specified liabilities.

We have entered into indemnification agreements with our directors and
executive officers that provide for indemnification beyond what is provided for
in our bylaws. These agreements, among other things, indemnify our directors
and executive officers for certain expenses, including attorneys' fees,
judgments, fines and settlement amounts incurred by them in any action or
proceeding, including any action by us arising out of their services as
directors or executive officers of MyPoints, any of our subsidiaries or any
other company or enterprise to which the person provides services at our
request. We believe that these provisions and agreements are necessary to
attract and retain qualified persons as directors and executive officers.

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<PAGE>

Security Ownership of Certain Beneficial Owners and Management of MyPoints

The following table sets forth as of March 31, 2000, and as adjusted to
reflect the issuance of the shares of MyPoints common stock in connection with
the merger, certain information with respect to the beneficial ownership of the
common stock as to:

. each person known by MyPoints to own beneficially more than 5% of the
outstanding shares of its common stock,

. MyPoints's Chief Executive Officer and each of MyPoints's five other most
highly compensated executive officers during 1999,

. each of its directors, and

. all of its directors and executive officers as a group.

Unless otherwise indicated, the address for each stockholder on this table
is c/o MyPoints, Inc., 100 California Street, 12th Floor, San Francisco,
California 94111. Except as otherwise noted, and subject to applicable
community property laws, to the best of our knowledge, the persons named in
this table have sole voting and investing power for all of the shares of common
stock held by them.

This table lists applicable percentage ownership based on 29,129,721 shares
of common stock outstanding as of March 31, 2000. Options to purchase shares of
our common stock that are exercisable within 60 days of March 31, 2000 are
deemed to be beneficially owned by the persons holding these options for the
purpose of computing percentage ownership of that person, but are not treated
as outstanding for the purpose of computing any other person's ownership
percentage.

<TABLE>
<CAPTION>
Percentage
Shares Owned Owned
Prior to the Prior to the
Beneficial Owner Merger Merger
---------------- ------------ ------------
<S> <C> <C>
5% Stockholders:
Direct Marketing Technology, Inc. .................. 3,674,356 12.72%
505 City Parkway West, 10th Floor
Orange, CA 92868

Executive Officers and Directors:
Steven M. Markowitz (1)............................. 1,107,468 3.79%
Robert C. Hoyler (2)................................ 975,990 1.64%
Charles H. Berman (3)............................... 260,986 *
Steven E. Parker (4)................................ 83,254 *
Frank J. Pirri (5).................................. 137,602 *
Mario M. Rosati (6)................................. 154,166 *
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304
Howard L. Morgan (7)................................ 307,835 1.06%
Thomas Newkirk (8).................................. 3,682,689 12.75%
Lawrence E. Phillips (9)............................ 996,517 3.45%
Lester Wunderman (10)............................... 68,326 *
All directors and executive Officers as a group (13
persons)(11)....................................... 11,271,376 39.03%
</TABLE>
--------
* Less than 1% of the outstanding shares of common stock.

(1) Includes 361,456 shares issuable upon exercise of options and warrants
within 60 days of March 31, 2000.

(2) Includes 95,103 shares issuable upon exercise of options and warrants
within 60 days of March 31, 2000.

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<PAGE>

(3) Includes 242,124 shares issuable upon exercise of options and warrants
within 60 days of March 31, 2000.

(4) Includes 62,362 shares issuable upon exercise of options and warrants
within 60 days of March 31, 2000.

(5) Includes 44,063 shares issuable upon exercise of options and warrants
within 60 days of March 31, 2000.

(6) Includes 22,500 shares held by WS Investment Company 96B, 87,125 shares
held by WS Investment Company 97B and 10,124 shares held by WS Investment
Company 98A. Mr. Rosati is a general partner of each of these entities and
disclaims beneficial ownership of the shares held by those entities,
except to the extent of his proportionate partnership interest therein.
Mr. Rosati is a member of our board of directors.

(7) Includes 145,469 shares issuable upon exercise of options and warrants
within 60 days of March 31, 2000.

(8) Includes 3,674,356 shares held by Direct Marketing Technology. Mr.
Newkirk, the Vice President, Secretary and Director of Direct Marketing
Technology, disclaims beneficial ownership of the shares held by that
entity, except to the extent of his proportionate pecuniary interest
therein based upon his beneficial ownership of the capital stock of Direct
Marketing Technology. Mr. Newkirk is a member of our board of directors.

(9) Includes 988,184 shares held by Primedia Ventures. Mr. Phillips, Managing
Director of Primedia, disclaims beneficial ownership of the shares held by
Primedia, except to the extent of his proportionate pecuniary interest
therein. Mr. Phillips is a member of our board of directors.

(10) Includes 5,000 shares issuable upon exercise of options and warrants
within 60 days of March 31, 2000.

(11) Includes 1,059,292 shares issuable upon exercise of options and warrants
within 60 days of March 31, 2000.

MyPoints Related Party Transactions

The following is a description of transactions since January 1, 1996 to
which MyPoints has been a party, in which the amount involved in the
transaction exceeds $60,000 and in which any director, executive officer who
will serve as a director or executive officer after the merger, or holder of
more than 5% of MyPoints's capital stock had or will have a direct or indirect
material interest other than compensation arrangements which are otherwise
described under "MyPoints Management" on page 100 of this proxy
statement/prospectus.

MyPoints Transactions with Enhanced Response Technologies, Inc., Experian and
Related Entities

In November 1998 and December 1998, we entered into a series of transactions
to acquire internet and electronic commerce related assets from Enhanced
Response Technologies, Inc., known as ERT, and a company affiliated with
Experian. As part of these transactions, Experian acquired shares of our common
stock equal to 19.9% of our then outstanding shares of common stock. These
transactions involved the following principal elements:

. The merger of a subsidiary of MyPoints with and into ERT, where the
outstanding shares and options of ERT were exchanged for 1,435,946 shares
of our common stock and options to purchase 402,818 shares of our common
stock;

. The acquisition from two subsidiaries of Experian of all of the
outstanding ownership interests of MotivationNet, LLC in exchange for
1,213,592 shares of our Series D preferred stock and 2,164,535 shares of
our common stock;

. The acquisition from Metromail Corporation, an affiliate of Experian, of
certain assets relating to the "Direct Value to You" internet sponsorship
product, a targeted, web-based coupon program with a complementary
membership base, for $400,000 in cash, payable over 30 months;

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<PAGE>

. A services agreement between Direct Marketing Technology, Inc., a wholly-
owned subsidiary of Experian, and MyPoints in which Direct Marketing
Technology agreed to continue to provide demographic data and other list
processing services that are required for MyPoints to operate and
administer its programs; and

. A license agreement between Direct Marketing Technology, Inc. and
MyPoints that grants us the right to use certain intellectual property
rights associated with the MyPoints program, in exchange for royalties
specified in the license agreement.

In August 1999, following completion of our initial public offering, we made
a $2.6 million payment pursuant to the license agreement. This amount
represented the present value of future royalties payable under the license
agreement. As a result of this payment, MyPoints will not have any future
royalty or other obligations under the license.

In January 2000, we signed a binding letter of intent with Experian to form
a European joint venture, called MyPoints Europe. We intend for the joint
venture to develop, implement and operate customer loyalty infrastructure
services, including internet database and direct marketing services, for
corporate clients in Europe. As part of this transaction, Experian will invest
approximately $13.0 million in the joint venture, and we will develop and
operate its programs.

Our Formation

In connection with our incorporation in November 1996, we issued 843,775
shares of common stock to Steven M. Markowitz, 593,750 shares to Mark S. Smith,
593,750 shares to Noah J. Doyle, 250,000 shares to Layton S. Han and 150,000
shares to Daniel K. Kihanya, at a purchase price of $.001 per share, paid in
cash. These founders' shares are subject to a right of repurchase by us at the
original purchase of $.001 per share. This repurchase right lapsed as to one-
third of the shares upon issuance and lapses as to the remaining shares on a
cumulative monthly basis over a period of 48 months from the date of issuance
of the shares.

Preferred Stock Financings

In November and December 1996, MyPoints issued to various investors a total
of 3,000,000 shares of Series A preferred stock at a purchase price of $0.50
per share. In several transactions from October 1997 through April 1998,
MyPoints issued to various investors a total of 2,926,666 shares of Series C
preferred stock at a purchase price of $1.50 per share. In November 1998, we
issued to various investors a total of 3,961,649 shares of Series D preferred
stock and warrants to purchase 1,374,028 additional shares of Series D
preferred stock at a purchase price of $2.06 per share. In March 1999, we
issued to various investors a total of 2,000,000 shares of Series E preferred
stock at a purchase price of $5.00 per share.

All shares shown below for Direct Marketing Technology represent shares
issued in exchange for the acquisition of MotivationNet, L.L.C. The shares of
Series D preferred stock shown below include 12,136 shares issuable upon
exercise of warrants held by each of Howard L. Morgan and Lester Wunderman.

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Investors in our preferred stock include, among others, the following
directors and holders of more than 5% of our outstanding stock:

<TABLE>
<CAPTION>
Preferred Stock
-----------------------------------
Series Series
Preferred Stockholder Series A C Series D E
--------------------- --------- ------- --------- -------
<S> <C> <C> <C> <C>
Holders of More than 5%:
Direct Marketing Technology, Inc., a
wholly owned subsidiary of Experian..... -- -- 1,213,592 296,229
Long Island Venture Fund, L.P. .......... 1,000,000 333,333 -- --

Directors:
Thomas Newkirk........................... -- -- 1,213,592 296,229
Lawrence E. Phillips..................... -- -- 1,165,049 68,109
Howard L. Morgan......................... 133,333 33,333 36,408 16,743
Lester Wunderman......................... -- 16,667 36,408 4,986
</TABLE>

Thomas Newkirk is Vice President, Secretary and Director of Direct Marketing
Technology, a wholly owned subsidiary of Experian.

Other Transactions

Harold M. Brierley, a former member of our board of directors and a holder
of more than 5% of our stock, founded Targeted Marketing Systems, Inc., a
service provider that we engaged for creative services to assist in the
development of our marketing program and web site. We made total payments to
Targeted Marketing Systems of $223,000 in 1997 and none in 1996, 1998 or 1999.
As of December 31, 1997 and 1998, we owed no amounts to Targeted Marketing
Systems. While a member of our board, Mr. Brierley received an option to
purchase 75,000 shares of our common stock. On June 4, 1998, Mr. Brierley
exercised this option.

Mario M. Rosati, one of our directors, and Christopher D. Mitchell, our
assistant secretary, are members of Wilson Sonsini Goodrich & Rosati,
Professional Corporation, which has served as our outside corporate counsel
since our formation.

Policy Regarding Transactions with Affiliates

It is our policy that future transactions with affiliates, including any
loans we make to our officers, directors, principal stockholders or other
affiliates will be on terms no less favorable to us than we could have obtained
from unaffiliated third parties. These transactions will be approved by a
majority of our board of directors, including a majority of the independent and
disinterested members or, if required by law, a majority of our disinterested
stockholders.

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CERTAIN INFORMATION REGARDING CYBERGOLD

Forward Looking Statements

In addition to historical information, this proxy statement/prospectus
contains forward looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
These forward looking statements include, among other things, statements
regarding Cybergold's anticipated costs and expenses, its capital needs and
financing plans, product and service development, its growth strategies, market
demand for its products and services, relationships with its strategic
marketing alliances, competition, the reliability and security of its data
center and plans for addressing Year 2000 issues. These forward looking
statements include, among others, those statements including the words
"expects," "anticipates," "intends," "believes" and similar language.
Cybergold's actual results may differ significantly from those projected in the
forward looking statements. Factors that might cause or contribute to such
differences include, but are not limited to, those discussed in the sections
"Risk Factors" on page 16 of this proxy statement/prospectus and "Cybergold
Management's Discussion and Analysis of Financial Condition and Results of
Operations" on page 125 of this proxy statement/prospectus. You should
carefully review the risks described in other documents Cybergold files from
time to time with the Securities and Exchange Commission, including the
Quarterly Reports on Form 10-Q and the Annual Reports on Form 10-K. You are
cautioned not to place undue reliance on the forward looking statements, which
speak only as of the date of this proxy statement/prospectus. Cybergold
undertakes no obligation to publicly release any revisions to the forward
looking statements or reflect events or circumstances after the date of this
document.

Cybergold's Business

Overview

We are a leading provider of online direct marketing and advertising
solutions. We combine Internet-based direct marketing and advertising services
with programs that reward consumers with cash or free long distance when they
perform actions desired by our advertising and marketing clients. These
premium-based online incentives programs are intended to provide flexible,
incentive-marketing solutions for our clients. Our payment structure, in which
our advertising and marketing clients are only charged when our members execute
specific predefined actions, provides these clients with a known cost to
achieve the desired response to their advertising campaigns. By leveraging our
member database and our targeting capabilities, we are able to offer our
clients customized, targeted advertising solutions designed to improve
advertisement response rates and reduce the cost of acquiring new customers.

Cybergold serves three main constituencies: advertising and marketing
clients, consumer members and merchants. Advertising and marketing clients use
Cybergold to cost-effectively acquire new customers with offers and cash
incentives. Consumer members use Cybergold to earn cash rewards and free long
distance for responding to offers on our Web site, on third-party Web sites and
through email campaigns. Merchants use Cybergold technology as a cost-effective
means to sell inexpensive digital content, services and products on a pay-per-
transaction basis to the Cybergold membership base.

Our business revolves around what we call the Earn & Spend Community--a
place on the Internet where consumers can earn cash incentives for responding
to online marketing offers presented by our advertising and marketing clients
and then spend the cash with merchants. By opening a Cybergold account, a
consumer can become a member of the Earn & Spend Community. The cash earned by
our consumer members can be credited to either their VISA or bank accounts from
their Cybergold account or be used to purchase content, services and products,
including software, music, games, credit reporting services and original
artistic works and publications through our Earn & Spend Community. We
currently have approximately 8.8 million consumer members registered in either
the Cybergold or itarget membership programs. Approximately 500,000 of these
members belong to both programs. Advertising and marketing clients that
currently use our service include autobytel.com inc., Garden.com, Inc., The
Walt Disney Company, Uproar (E-Pub Services Ltd.) and MBNA America Bank.

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Industry Background

Growth of the Internet and Online Commerce

The Internet has emerged rapidly as an important medium for facilitating
communication, disseminating information and conducting commerce. International
Data Corporation estimates that the number of Internet users worldwide exceeded
97 million in 1998 and will grow to approximately 320 million by the end of
2002. International Data Corporation also estimates that worldwide commerce
over the Internet will reach approximately $426 billion by the end of 2002, up
from approximately $32 billion in 1998. The availability of a broad range of
content and the acceptance of electronic commerce has driven rapid Internet
adoption by businesses and consumers alike, which has in turn stimulated the
proliferation of additional content and electronic commerce.

Online Advertising and Direct Marketing

The Internet possesses unique and commercially powerful characteristics that
differentiate it from traditional forms of media, including a lack of
geographic or temporal limitations, real time access to dynamic interactive
content, and instantaneous connections between advertisers, marketers and
consumers. Advertisers and marketers are particularly attracted to the Internet
because it enables them to distribute information efficiently, reach potential
customers globally and engage in one-to-one customer interaction. These
capabilities create significant opportunities for advertisers, marketers and
merchants to develop direct relationships with consumers. The Internet also
facilitates the efficient collection of valuable customer data and demographic
information, enabling advertisers and marketers to develop targeted marketing
campaigns directed to existing and potential customers.

These characteristics have resulted in the rapid growth of Internet
advertising. Jupiter Communications estimates that worldwide Internet
advertising expenditures in 1999 were approximately $3.2 billion and projects
Internet advertising expenditures to increase to approximately $11.5 billion in
2003. The majority of Internet advertising to date has been in the form of
passive banner advertising. However, as the number of Web sites and amount of
advertising on the Internet has proliferated, we believe decreasing consumer
response to banner advertising has led advertisers and marketers to question
the effectiveness of such advertising and marketing campaigns.

These trends are causing marketers to consider alternative marketing
solutions that encourage consumers not only to pay greater attention to
marketing messages but also to increase response rates to those messages.
Conversely, many consumers prefer to limit the number of advertisements to
which they are exposed and prefer to be exposed only to those advertisements
for products or services in which they are interested. We believe that the
inability of traditional banner advertising to maximize the powerful one-to-one
relationships enabled by the Internet has led advertisers to place greater
emphasis on online direct marketing as a more effective means to convert
Internet users into customers. The Direct Marketing Association estimates that
spending on Internet direct marketing will grow from $1.3 billion in 1999 to
$8.6 billion in 2004, representing a compound annual growth rate of 46%.

Online Incentive Programs

As advertisers and marketers seek to increase the effectiveness and
efficiency of their online marketing efforts, they are turning to incentives-
based programs, which reward consumers for their attention or specific response
to ads and promotions. Because advertisers are charged an a cost-per-action
basis in these programs, advertisers are provided with a predictable cost for
the desired response. In contrast, banner advertisers pay simply for the number
of times a banner appears on a Web site page, regardless of how many consumers
actually view or click on the banners or whether they take additional actions
based on what they read.

Most incentive-based programs offer consumers the ability to earn "points"
that are redeemable only for limited products, frequent flyer miles or other
non-cash rewards. These non-cash incentive programs often have

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significant limitations on redemption due to the limited items for which
rewards can be redeemed as well as various program restrictions. For example,
programs offering frequent flyer miles are often restrictive and generally only
appeal to consumers who otherwise actively participate in frequent flyer
programs. In addition, rewards for participation in online direct marketing
programs mostly come in small increments and the redemption opportunities
generally require large outlays of points. Therefore, while these programs have
the potential to provide significant benefits to advertisers and marketers,
they remain limited to a subset of Internet users.

Online Payment Mechanisms

Traditionally, Internet companies have chosen either to fund the free
distribution of content or services through selling banner advertising on their
Web sites or to sell their content or services on a subscription basis.
Although banner ad rates have declined in past years, Jupiter Communications
reports that effective CPM rates (i.e., cost per thousand impressions
multiplied by the percentage of inventory sold) rose in 1999 to $3.20 from
$2.60 in 1998 and are expected to rise to $4.80 by 2003. This rise can be
attributed to better targeting, more sophisticated online media planning, and
higher demand for available inventory. Despite this rise, in order to offset an
increasingly competitive marketplace, Internet content and service providers
will continue to search for other revenue sources, including the sale of
content or services on a per transaction basis.

Market Opportunity

Advertisers, marketers and merchants need more effective means to induce
consumers to respond to online advertising and marketing and facilitate the
online purchase of inexpensive content, goods and services. While there have
been several attempts to address these needs, current incentives-based online
advertising and marketing and micropayment solutions have a number of
significant limitations. Current incentives-based online advertising and
marketing campaigns impose significant limitations on consumer choice, limiting
consumers' ability to monetize their time spent online. These shortcomings
limit the utility and flexibility of incentives-based online marketing programs
and, therefore, consumers' desire to participate. In addition, current
transaction processing methods for the distribution of inexpensive content,
services and products are prohibitively expensive. There is a need for online
incentives-based advertising and marketing and micropayment solutions which
effectively target consumers and provide consumers with greater flexibility and
purchasing opportunities.

The Cybergold Solution

We are a leading provider of online direct marketing and premium-based
incentive advertising solutions. We believe that we are the first online
company to combine a cash-based incentive program with a direct marketing
approach that provides extensive benefits for our advertising and marketing
clients, consumer members and merchants. As of March 31, 2000, our Earn & Spend
Community had approximately 7.3 million consumer members, which enables our
advertising and marketing clients to offer cost-per-action incentive programs
either to our entire member database or to a targeted subset. Members are
compensated for responding to online advertisements or promotions by performing
client-specified actions, such as filling out online surveys or purchasing
products or services. Internet users become Cybergold members at no cost by
completing a short online registration form on our Web site or on a co-marketer
or co-registration Web site.

In order to manage these premium-based incentive programs on our Web site
and on other sites, we have developed a proprietary transaction system that
enables the cost-effective management of cash-based incentive reward programs
and micropayment transactions. Our Earn & Spend Community allows our members to
earn cash or free long distance by interacting with offers that appeal to their
interests. For example, under a current promotion, members can earn $3.00 for
requesting a quote for a new car from our marketing client, autobytel.com inc.
The cash earned by our members is deposited in their Cybergold accounts and can
then be credited to either their VISA cards or bank accounts or be used to
purchase content, services and products, including software, music, games and
original artistic works and publications.

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Benefits of our unique incentive programs include:

Advertising and Marketing Client Benefits

. Flexible and Effective Marketing Solution. We provide a variety of
advertising and marketing services for our clients, including incentive
offers on our Earn & Spend Community site, free long distance on our
itarget site, targeted and untargeted emails, and ad campaigns that offer
cash and long distance incentives directly on third-party sites. We
believe our services provide our clients with more effective advertising
tools to induce desired consumer behavior, including purchasing, product
evaluation and subscriptions.

. Cost-per-Action Payment Structure. We provide a cost-per-action incentive
marketing solution, in which our clients are only charged when our
members take pre-defined actions specified by our clients. In addition,
we offer integrated campaigns which include a fee for each email sent in
addition to a fixed cost-per-action incentive at our websites. Our cost-
per-action solution provides our clients with both a known cost per yield
for each advertising and marketing campaign, the costs of acquiring new
customers and risk.

. Measurable Results. Member actions in response to client marketing
messages are instantly recorded in our database, allowing clients to
measure the effectiveness of their advertising campaigns on an ongoing
basis. Clients are able to review and modify their campaigns at any time
to react to customer response rates.

. Targeting Capability. By leveraging our database of approximately 7.3
million members as of March 31, 2000, we are able to provide customized,
targeted campaigns for our clients. This targeting capability enables our
clients to focus on specific demographic segments or groups of users that
exhibit desirable online behavioral patterns. We believe that by focusing
on a specific target audience, our clients should increase response rates
and reduce their customer acquisition costs.

Member Benefits

. Cash Rewards. Unlike other online incentive programs which reward the
customer with "points" redeemable for frequent flyer miles, specified
products or other non-cash rewards we reward our members with cash. One
Cybergold dollar equals one U.S. dollar. The dollars our members earn are
accumulated in a Cybergold account and can be credited to their VISA
cards or bank accounts. We also offer a number of online spending
opportunities to our members, such as the ability to purchase digital
content, services and products, including software, music, games, credit
reporting services and original artistic works and publications and gift
certificates as well as donations to charitable organizations.

. Member Choice. Our online incentives programs provide two primary
benefits for members. First, members may choose to respond only to
advertising and marketing that interests them and provides a sufficient
reward to induce their participation. Second, members earn cash rewards
which they can choose to spend on online purchases or have credited to
their VISA cards or bank accounts. This enables members to pursue
advertising and marketing that interests them, increasing the quality of
their online experience.

. Free Long Distance. Members can earn free long distance in exchange for
providing demographic information or taking certain actions on the
itarget site. This free long distance is delivered on-line in real time.

Merchant Benefits

. New Revenue Opportunity. Cybergold's Mint Transactions System provides
our merchant's sales teams, brand managers and entrepreneurs with an e-
commerce tool that expands the interactivity and targeting abilities of
the Internet. It also allows low cost product trails and promotions to
merchants

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and gives on-line merchants an opportunity to creatively use with cash
rebates and co-marketing opportunities on a new site.

. Through the Earn and Spend Community our consumer members, advertisers
and the online merchants may exchange Cybergold dollars. Any new web site
who chooses to install the Mint Transactions System to add Cybergold as a
method of payment instantly accesses Cybergold consumer members who more
than likely already have money sitting in their accounts. Merchants gain
customers, simply by adding additional functionality to their web site.

. In addition, if Cybergold members wish to purchase items that cost more
than the amount of Cybergold dollars in their accounts, they can deposit
additional funds into their Cybergold accounts from their VISA cards. Our
broad membership community gives merchants an established base of
potential customers.

. Value-Added Services. We provide merchants with "non-hosted" and "hosted"
value-added services to sell inexpensive digital content, products and
services. In "non-hosted" solutions, our micropayment transaction system
enables merchants to sell inexpensive digital content, services and
products on their own Web sites. In "hosted" solutions, we provide the
merchants with a complete suite of Web site hosting, systems
administration, transaction processing and integration services, while
the merchant only provides the content.

Cybergold Services

Cybergold serves three main constituencies: advertising and marketing
clients, consumer members and merchants. Advertising and marketing clients use
Cybergold to cost-effectively acquire new customers with offers and cash
incentives. Consumer members use Cybergold to earn cash rewards for responding
to offers on our Web site, on third-party Web sites and through email
campaigns. Merchants use Cybergold technology as a cost-effective means to sell
inexpensive digital content, services and products on a pay-per-transaction
basis to the Cybergold membership base.

Advertising and Marketing Client Services. We work closely with our
advertising and marketing clients to develop marketing campaigns that are
tailored to their customer acquisition needs. These programs include:

. incentive-based offers and promotions on the Cybergold and itarget Web
sites;

. targeted and untargeted email campaigns conducted by us on behalf of our
advertising and marketing clients;

. programs introduced on our marketing clients' Web sites; and

. banner ads placed on various targeted Web sites.

Our membership database technology enables us to maintain and track
information about our members. We are able to track aspects of member online
activity, such as marketing programs in which specific members have
participated and online purchases initiated through Cybergold. In addition, we
have access to member information gathered by a number of our advertising and
marketing clients. We believe that our database of membership information
allows us to carefully tailor marketing campaigns to maximize their
effectiveness for our clients.

Member Services. Internet users become Cybergold members at no cost by
completing a short online registration form on our Web site or on a co-marketer
or co-registration Web site. Our members earn cash and other premium rewards
for completing various desired actions, such as viewing an incentive offer,
completing a survey or registration form or downloading software. Members can
also earn rebates and incentives by purchasing a variety of products or
services offered through our Web site or third-party Web sites.

Existing members are notified of new programs and promotion through periodic
email distributions. In contrast to other incentive programs, our members have
the opportunity not only to earn cash rewards that are

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transferable to their VISA cards or bank accounts, but also to spend their
Cybergold cash rewards for a variety of goods and services. Cash is
transferable to a members bank account in a minimum amount of $5.00 and to a
VISA card in a minimum amount of $10.00. Members are also able to transfer
money from VISA cards to their Cybergold accounts to enable them to use our
micropayment system to purchase additional content, goods and services from
merchants.

We are committed to maintaining the privacy and security of our members. We
keep all personal information about our members confidential. Cybergold is a
member of TRUSTe, a non-profit organization dedicated to the protection of user
privacy and promotion of security online.

Merchant Services. We offer merchants the ability to sell digital content,
products and services over the Internet in transactions of any size. By
eliminating the high transaction costs typically associated with very small
credit card transactions, we enable the cost-effective delivery of content such
as articles or music for cents rather than dollars. We believe that our
micropayment system enables new business models for merchants of content,
products and services. We offer merchants with two micropayment environment
options:

. Non-hosted--Cybergold's Mint Transaction System enables merchants to sell
inexpensive digital content, services and products on their own Web
sites.

. Hosted--a full-service solution where we provide the customer with a
complete suite of Web site hosting, systems administration, transaction
processing and integration services while the merchant only provides the
content.

Sales and Marketing

Our primary sales strategy is to sell our services directly to advertisers,
direct marketers, ad agencies and electronic commerce merchants. We currently
sell our services in the United States through a direct sales organization,
with ten employees located in the San Francisco Bay Area as well as other
salespersons located in the metropolitan areas of San Diego, Houston, Dallas,
New York and Washington, D.C. Our sales force is dedicated to establishing and
maintaining relationships with advertising and marketing clients. Our sales
force uses industry directories, press, personal contacts, industry knowledge
and Internet search engines to seek likely sales prospects. We also receive
sales leads from advertising agencies that have recommended Cybergold to
clients.

Our marketing organization is composed of marketing communications, product
management, product marketing and membership marketing groups. In addition, we
also use consultants such as public relations agencies and graphic design firms
to assist with marketing activities. Marketing communications is responsible
for external public relations activities, managing relationships with the press
and industry analysts, and creating marketing collateral materials, such as
sales brochures. Product management is responsible for working with our
engineering department and our clients to define new products as well as
enhancements to existing products and services. Product management also
contributes to management development efforts, assists customers with special
requirements, and provides additional resources as needed throughout our
company. Product marketing is responsible for the content and graphics on our
Web site, including the production and implementation of advertising and
merchant offers. Product marketing also determines which additional services
may be of interest to members, clients and merchants.

Membership marketing is focused on expanding our membership base. We use a
variety of methods to generate new members, including email campaigns,
advertising, and co-registration agreements with some of our affiliate
partners, as well as referrals by current members and public relations.
Currently, we attract the majority of our members through co-registration
agreements with online partners, whereby registrants for those sites have the
option to concurrently sign up for the Cybergold Earn & Spend Community. We
believe that the convenience afforded by this co-registration capability is a
significant factor in attracting new members. As of December 31, 1999, we have
a network of approximately 75 affiliate partners through which we can attract
new members. In addition to these online methods of increasing our membership
base, we are currently planning a range of offline marketing campaigns designed
to attract new members.

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Advertising and Marketing Clients

Our advertising and marketing clients pay us commissions each time a member
takes an action defined by our clients in response to some online advertising
or promotion. Since inception through December 31, 1999, a total of 522
advertising and marketing clients have offered incentives using our system. In
1997 and 1999, no client accounted for more than 10% of our revenue. Two
significant clients, Qwest Communications International, Inc. and Interactive
Coupon Network (Cool Savings) accounted for 22% and 16% of total 1998 revenues,
respectively.

We have over 150 advertising and marketing clients who are currently
offering incentives using our system, including:

. American Homeowners . KB Holdings, Inc. . HealthShop.com (Media
Association (BrainPlay) Book, Inc.)

. Dynamic Track . LifeMinders.com, Inc. . The Walt Disney
(Discover) Company (Disney Daily
. MBNA America Bank Blast, Disney Store
. autobytel.com inc. Online)
. Netmarket Group Inc.
. Financial Engines . yesmail.com, Inc.
(Media Plex) . Quintel
Communications. Inc. . MotherNature.com, Inc.
. Garden.com, Inc.
. Uproar (E-Pub Services
Ltd.)

Strategic Relationships

To date, we have entered into a number of strategic relationships to build
our Earn & Spend Community, generate additional traffic to our Web site,
increase our membership and generate additional revenue.

These strategic relationships include:

. The First National Bank of Omaha. Our relationship with the First
National Bank of Omaha enables consumers to directly credit their
personal VISA accounts with money earned through Cybergold and to credit
their Cybergold accounts with funds from their VISA account. Cybergold
pays a monthly minimum fee to the First National Bank of Omaha, along
with a transaction fee for each transfer from a Cybergold account to a
VISA account.

. MBNA America Bank. Together with MBNA America Bank, we launched the co-
branded Cybergold MBNA VISA card, which provides convenient and easy
Internet shopping, MBNA's state-of-the-art fraud protection, VISA
Platinum Plus cardholder benefits and the potential for cash incentives.
Cybergold receives fee for each co-branded card generated and transaction
fees for all purchases made on these cards.

. yesmail.com. yesmail.com pays Cybergold for each member who signs up to
receive permission e-mails from yesmail.com. In addition, yesmail.com
pays Cybergold a percentage of the revenue it generates from sending
emails to these members on behalf of advertising clients on a revenue
share basis.

Technology

We have developed a scaleable technology infrastructure that executes both
incentive reward transactions and online micropayments for consumer purchases.
There are two proprietary components to our infrastructure:

. The Cybergold Mint Transaction System is our electronic commerce payment
software which runs on either our servers or the servers of our clients
or merchants. The Cybergold Mint Transaction System executes both
Cybergold incentive reward transactions and online micropayments for
consumer purchases. To make world-wide distribution possible, the
Cybergold Mint employs a cryptographic system called HMAC-MD5 that offers
full 128-bit security without export controls.

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. The Cybergold payment server is our real-time transaction processing
engine. This engine is optimized for high-volume financial transactions
and is designed to scale by simply adding additional hardware to our
system. The Cybergold payment server communicates with consumer browsers
using SSL, the industry-standard Web security protocol, to safeguard all
private user information.

Our payment server includes property modules for handling:

. interactive transactions;

. background transactions for off-line incentive programs;

. consumer account management and online statements;

. VISA and bank (ACH) transfers and charity donations;

. transaction reversal and dispute management;

. real-time risk management with velocity checking and fraud detection;

. context-sensitive help; and

. automated customer assistance with escalation to our separate Customer
Service system.

Cybergold transactions begin when Internet users encounter advertisements
offering incentive and/or purchases on our Web site or on third-party Web
sites. The merchant Web servers use the Cybergold Mint Transaction System to
generate rewards and payments. The transactions are sent over the Internet to
the Cybergold payment servers, which move incentive funds from merchant
accounts to member accounts, and move payment funds from member accounts to
merchant accounts. The payment servers incorporate a database of user,
merchant and offer information.

Our technology consists of proprietary programs integrated with third-party
hardware and software. Our third-party hardware includes Sybase SQL Servers,
Sun Solaris platforms and Apache Web servers, which members access with
standard Web browsers such as Netscape Navigator and Microsoft Internet
Explorer. We do not require consumers to download any software to process or
store micropayments and rewards.

We internally developed our systems for maintaining our Web site processing
transactions and maintaining member accounts. If, in the future, we cannot
modify these systems to accommodate increased traffic and an increased volume
of transactions and orders, we could suffer slower response time, problems
with customer service and delays in reporting accurate financial information.

Competition

The market for online direct advertising and marketing is extremely
competitive. In addition, while the market for services that facilitate small-
scale electronic commerce transactions is very new, we expect competition in
that area to increase dramatically in the near future. We cannot assure you
that we will compete successfully in this environment. Our failure to compete
in these marketplaces could have a material adverse effect on our business,
results of operations and financial condition.

We believe that the principal competitive factors in the online incentives-
based advertising market are:

. brand recognition;

. breadth and depth of content and services;

. number and quality of advertising clients;

. size of membership base;

. ease of use;

. transaction speed and security;

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. quality of service; and

. technical expertise.

We face significant competition from online incentives-based advertising and
marketing programs and providers of micropayment systems. We expect competition
to increase due to the lack of significant barriers to entry for online
business generally and for online incentives-based direct marketing programs
and micropayment transactions in particular. Currently, several companies offer
competitive online incentives programs, including MyPoints and Netcentives,
Inc. We may also face competition from established Internet portals and
community Web sites that engage in direct marketing, as well as from
traditional advertising agencies and direct marketing companies that may seek
to offer online products or services. In addition, financial service
organizations, such as banks and credit card companies, or other large
organizations may develop competitive micropayment systems and incentives-based
advertising and marketing programs.

Some of our current and potential competitors have longer operating
histories, greater brand recognition, larger client and member bases and
significantly greater financial, technical and marketing resources than we do.
These advantages may enable them to respond more quickly to new or emerging
technologies and changes in customer preferences. These advantages may also
allow them to engage in more extensive, research and development, undertake
extensive far-reaching marketing campaigns, adopt more, aggressive pricing
policies and make more attractive offers to potential employees, strategic
partners and advertisers. As a result, it is possible that our existing
competitors or new competitors may rapidly acquire significant market share.
Increased competition may result in price reductions, reduced gross margin and
loss of market share. We may not be able to compete successfully, and
competitive pressures may affect our business, results of operations and
financial condition.

Intellectual Property

We rely on a combination of patent, copyright, trademark and trade secret
laws and restrictions on disclosure to protect our intellectual property
rights. Despite our efforts to protect our proprietary rights, unauthorized
parties may attempt to copy or otherwise obtain and use our technology or
business model. Monitoring unauthorized use of our technology and business
model is difficult, and we cannot be certain that the steps we have taken will
prevent unauthorized use of our technology and business model. In addition, our
business activities may infringe upon the proprietary rights of others, and,
from time to time, we have received, and may continue to receive, claims of
infringement against us.

Litigation may be necessary to enforce our intellectual property rights, to
protect our trade secrets or to determine the validity and scope of the
proprietary rights of others. Cybergold has selected a limited set of companies
against which it plans to assert its rights as an initial matter. In May 1999
we notified MyPoints of our claim of infringement by MyPoints on our patent
5,794,210, which is described below. If the merger is not consummated, and this
claim cannot be resolved through a license or similar arrangement, then we
could become a party to litigation with MyPoints.

Any litigation could subject us to significant liability for damages and
invalidation of our proprietary rights. These lawsuits, regardless of their
success, would likely be time consuming and expensive to resolve and would
divert management's time and attention away from our business. Any potential
intellectual property litigation could also force us to do one or more of the
following:

. make significant changes to the structure and operation of our business;

. attempt to design around a third party's patent; or

. license alternative technology from another party.

Implementation of any of these alternatives could be costly and time
consuming, and may not be possible. Accordingly, an adverse determination in
any litigation that we are a party to would have a material adverse effect on
our business, results of operations and financial condition.

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The U.S. Patent and Trademark Office has issued the following patents
covering its business method and software architecture:

. Patent #5,794,210, which expires on December 11, 2015, covers Attention
Brokerage, in which users are compensated, whether through cash, frequent
flier points or other forms of compensation, for paying attention online
to advertisements, promotions, and similar information, and Orthogonal
Sponsorship, in which users can apply their earned compensation to
purchase digital content or other intellectual property; and

. Patent #5,855,008, which expires on December 11, 2015, for Consumer
Controlled Privacy Management, in which users establish criteria by which
their personal information is released to others, those requesting access
to personal data provide their identity, intentions for using the
personal data, and may offer compensation to the user for access to the
personal data, and the user or an automated process decides whether to
release the requested personal data based on the user's criteria and the
requester's information.

We also have U.S. and foreign pending patent applications. "Cybergold" is
our only registered trademark, although we have applied to register additional
trademarks in the United States. We cannot assure you that our patents or
trademarks will not be successfully challenged by others or invalidated. As in
the case of any patent covering a business method, it is possible that, unknown
to Cybergold, some third party was using business methods the same as or
similar to those claimed in Cybergold's patents before Cybergold's patent
applications were filed, which might render Cybergold's patents invalid. In
addition, we cannot assure you that our pending patents will be issued or that
our trademark registrations will be approved. If our trademark registrations
are not approved because third parties own these trademarks, our use of these
trademarks would be restricted unless we entered into arrangements with the
third-party owners, which might not be possible on reasonable terms.

We generally enter into confidentiality or license agreements with our
employees and consultants, and control access to and distribution of our
technologies, documentation and other proprietary information. Despite our
efforts to protect our proprietary rights from unauthorized use or disclosure,
parties may attempt to disclose, obtain or use our solutions or technologies.
We cannot assure you that the steps we have taken will prevent misappropriation
of our solutions or technologies, particularly in foreign countries where laws
or law enforcement practices may not protect our proprietary rights as fully as
in the United States.

Employees

As of April 30, 2000, we had a total of 179 employees. Of those, 109 are in
sales and marketing, 39 are in engineering and 31 are in general and
administrative. We believe that we have good relationships with our employees.
We have never had a work stoppage, and none of our employees is represented
under a collective bargaining agreement. We believe that our future success
will depend in part on our ability to attract, integrate and retain highly
motivated sales, marketing, production and technical personnel and upon the
continued service of our senior management. Competition for qualified personnel
in our industry and geographical locations is intense, and there can be no
assurance that we will be successful in attracting, integrating, retaining and
motivating a sufficient number of qualified personnel to conduct our business
in the future.

Facilities

Our headquarters are located in approximately 33,500 square feet of office
space we have leased at 1330 Broadway, Oakland, California. Our lease extends
through July 2002, with an option to lease the space for an additional five
year term, and includes a right of first refusal on additional space which may
become available in the building where we are headquartered. The offices of
itarget are located in approximately 5,500 square feet of office space we have
leased at 4155 Nobel Dr., San Diego, California. This lease extends through
November 2000. We believe our office space is adequate to meet our needs for
the next six months, and we expect our growth for the next 24 months to be
accommodated by our right of first refusal on additional office space which may
become available in our building. We have sales personnel located in the
metropolitan areas

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of Dallas, Houston, Washington, D.C. and New York. These personnel work out of
home-based offices, and do not receive any additional compensation for the use
of their home offices, other than reimbursement for direct expenses such as
telephone, office equipment and supplies. We anticipate adding additional field
personnel in the future; such personnel may or may not work out of home-based
offices, and therefore, we may or may not incur additional expenses relating to
the rental of additional office space.

Legal Proceedings

From time to time Cybergold may be involved in litigation arising in the
normal course of its business. Cybergold is not a party to any litigation,
individually or in the aggregate, that Cybergold believes would have a material
adverse effect on its financial condition or results of operation.

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CYBERGOLD MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management's Discussion and Analysis of Financial Condition and Results
of Operations as of March 31, 2000 and for the three months ended March 31,
2000 and 1999 should be read in conjunction with the sections of Cybergold's
unaudited financial statements and related notes included elsewhere in this
proxy statement/prospectus. In addition, the portion of this Management's
Discussion and Analysis of Financial Condition and Results of Operations as of
December 31, 1999 and for the years ended December 31, 1999 and 1998 should be
read in conjunction with the sections of Cybergold's audited financial
statements and related notes included elsewhere in this proxy
statement/prospectus.

Overview

We are a leading provider of Internet-based direct marketing and advertising
solutions. We were incorporated in October 1994 and from inception through the
second quarter of 1996, we were in an early stage of development, and had no
sales and limited operating activities. From the second quarter of 1996 through
the first quarter of 1997, operating activities related primarily to developing
necessary infrastructure, recruiting personnel, raising capital, initial
strategic planning and developing our Web site. In March 1997, we launched our
initial service and enrolled our first Cybergold members. In March 1999, we
introduced our micropayments system, and launched our Earn & Spend Community.
Our membership base increased from approximately 250,000 at December 31, 1997
to approximately 1.0 million at December 31, 1998 and to approximately
4.8 million at December 31, 1999. Although our membership has grown in prior
periods, we cannot be certain that our membership growth will continue at
current rates or increase in the future.

We completed our initial public offering on September 22, 1999 and received
net proceeds of approximately $40.7 million. The net proceeds of this public
offering were added to our working capital and, pending their use, we have
invested such funds in short-term, interest-bearing investment grade
obligations.

In January 2000, itarget entered into a stock swap agreement with Quintel
Communications, Inc., whereby itarget issued 213,258 shares of its Series B and
placed in escrow 53,315 shares of its Series B in exchange for 229,862 shares
of common stock of Quintel. In addition, itarget entered into a strategic
marketing agreement with Quintel for the development of a proposed website. The
agreement allows for any surviving party in a subsequent change of control of
Cybergold to terminate the agreement for $150,000, subject to certain
provisions.

On February 28, 2000 we signed a definitive agreement to acquire itarget.com
in exchange for 1.83 million shares of our common stock. itarget is a
permission based email marketing company that rewards its members with premium
products, delivered on-line. The acquisition was completed on March 29, 2000
and was accounted for as a pooling of interests.

Our revenues consist of transaction revenues and custom marketing services
and other revenues. Transaction revenues represent fees paid to us each time a
member earns incentive rewards within our system and for payment transactions.
Our members earn rewards by responding to online advertisements with a specific
action such as filling out a survey or registering for services. We are paid a
transaction fee by advertisers or marketers and we pay a portion of this fee to
our members as a cash reward. We also earn a transaction fee when our members
spend their cash rewards or use cash transferred to their account from a VISA
card to purchase inexpensive digital content, services or products through our
site or other sites using our system. These transaction revenues are not
recognized until the transaction has been completed. In the case of prepayments
by the advertising or marketing client, amounts not yet recognized are included
in deferred revenue on the balance sheet. To date, our transaction revenues
have been primarily generated from per transaction fees received from our
advertising and marketing clients for incentive programs. Revenues from payment
transactions have not been material.

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<PAGE>

Our transaction revenues are driven by a number of factors, including:

. the number of our advertising and marketing clients;

. the number, variety and quality of offers to our members from our
advertising and marketing clients;

. the size and growth of our membership base;

. the number of transactions performed by each member; and

. the average revenue per transaction.

Custom marketing services and other revenues include fees received for
delivering targeted email to our members, placement and licensing fees,
production and development fees received for customization of marketing
programs, and fees received for other advertising and marketing services.
Production and development fees represent HTML design services, graphic
services, engineering and database development and related services. We charge
clients for production and development fees on either a fixed price or time and
materials basis. Revenue is recognized as these services are performed. These
revenues fluctuate based on the number of new programs initiated, type of
services, and scope and complexity of each program. In 1999 emails accounted
for $1,643,000 in revenues compared to $0 in 1998; placement fees accounted for
$153,000 in revenues in 1999 compared to $0 in 1998; and custom engineering and
production fees accounted for $371,000 in revenues in 1999 compared to $377,000
in 1998.

The cost of revenues associated with our transaction revenues represent cash
rewards paid to our members for completing transactions or actions. We pay our
members a portion of the amount received from the advertiser or marketer in
return for completing a specified response or action. Cash rewards to our
members are recorded as a current liability in the members payable account of
the balance sheet until transferred by a member to a bank account or a VISA
card or spent in a payment transaction. Gross margin on transaction revenues
may fluctuate based on the nature of the incentive programs and the advertisers
and marketers in any given period.

The cost of revenues associated with custom advertising and marketing
services and other revenues primarily consist of costs for production and
marketing personnel and independent contractors, including associated payroll
tax, benefits and other indirect costs. Gross margin associated with emails and
placement fee revenue were 94% in 1999. Gross margin associated with custom
engineering and production revenue varies from contract to contract depending
on the specific terms of the individual contract, and may also fluctuate
significantly based on the number and size of fixed price contracts that we
undertake in any period and our ability to complete them within the anticipated
budget.

We incurred a net loss of approximately $12.1 million in 1999. As of
December 31, 1999 we had a retained deficit of approximately $25.9 million. We
plan to increase our operating expenses as we continue to build brand and
infrastructure, including expenses for online and offline advertising,
expanding programs for membership recruitment, and for additional computer
hardware and software, and consequently, our losses will increase in the
future. Our limited operating history makes it difficult to forecast future
operating results. Although we have experienced revenue growth in recent
quarters, we cannot be certain that revenues will increase at a rate sufficient
to achieve and maintain profitability. Even if we were to achieve profitability
in any period, we may not be able to sustain or increase profitability on a
quarterly or annual basis.

In connection with the granting of options to purchase our common stock to
employees, directors and consultants during 1998 and 1999, we recorded deferred
compensation of $2,245,566 representing the difference between the exercise
price of options granted and the deemed fair market value of our common stock
at the time of grant. We will amortize this deferred compensation as an expense
over the vesting periods of the related options. Total deferred compensation
expenses recognized during the year ended December 31, 1998 and 1999 were
$198,288, and $734,614, respectively.

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<PAGE>

Results of Operations

The following table sets forth the results of operations of Cybergold
expressed as a percentage of revenues:

<TABLE>
<CAPTION>
Year Ended December
31,
------------------------
1997 1998 1999
------ ------ ------
<S> <C> <C> <C>
Revenues:
Transaction........................................ 86.0 % 62.5 % 60.5 %
Custom marketing services and other................ 14.0 37.5 39.5
------ ------ ------
Total revenues................................... 100.0 100.0 100.0
Cost of Revenues:
Transaction........................................ 48.2 29.2 29.1
Custom marketing services and other................ 7.0 17.2 6.1
------ ------ ------
Total cost of revenues........................... 55.2 46.4 35.2
------ ------ ------
Gross margin..................................... 44.8 53.6 64.8
------ ------ ------
Operating expenses:
Product development................................ 224.1 171.7 58.1
Sales and marketing................................ 407.1 268.1 167.1
General and administrative......................... 139.4 81.0 61.1
Amortization of deferred compensation.............. -- 19.7 13.4
------ ------ ------
Total operating expenses......................... 770.6 540.5 299.7
------ ------ ------
Loss from operations................................. (725.8) (486.9) (234.9)
Interest income (expense), net....................... (2.8) 7.8 13.5
------ ------ ------
Net loss............................................. (728.6)% (479.1)% (221.4)%
====== ====== ======
</TABLE>

Three Months Ended March 31, 2000 and 1999

Revenues

To date, our revenue is derived from our online incentive and email lead
generation programs. Revenues increased 753% from $503,000 for the three
months ended March 31, 1999 to approximately $4.3 million for the three months
ended March 31, 2000.

Transaction Revenues. Transaction revenues increased 581% from $333,000 for
the three months ended March 31, 1999 to approximately $2.3 million for the
three months ended March 31, 2000. The increase in transaction revenues is
primarily the result of an increased number of transactions driven by growth
in our membership base. Total membership, including 5.5 million Cybergold
members and 1.8 million itarget members, grew to approximately 7.3 million as
of March 31, 2000 from 2.2 million as of March 31, 1999.

Custom Marketing Services and Other Revenues. Custom marketing services and
other revenues increased 1,089% from $170,000 for the three months ended March
31, 1999 to $2.0 million for the three months ended March 31, 2000. For the
three months ended March 31, 2000, this revenue was comprised of $1.8 million
in fees for the transmission of emails to our members, $158,000 for placement
fees and $45,000 for custom engineering and other fees. The increase in custom
marketing services and other revenues is the result of increasing demand for
the transmission of emails to our membership base. We expect that custom
marketing services and other revenues will fluctuate from period to period.

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<PAGE>

Cost of Revenues

Cost of revenues represents the cash incentives paid and cost of free long
distance provided to members for performing specified actions in response to
advertisements and the personnel costs associated with custom marketing
services and other revenues. Cost of revenues increased 380% from $244,000 for
the three months ended March 31, 1999 to approximately $1.2 million for the
three months ended March 31, 2000.

The cost of transaction revenues increased 588% from $159,000 for the three
months ended March 31, 1999 to approximately $1.1 million for the three months
ended March 31, 2000. The increase in cost of transaction revenues resulted
primarily from an increase in the number of transactions completed by our
membership base.

The cost of custom marketing services and other revenues decreased 8% from
$85,000 for the three months ended March 31, 1999 to $78,000 for the three
months ended March 31, 2000. The decrease resulted primarily as a result of
higher costs of revenues last year in connection with custom engineering
development and marketing services versus the much lower costs associated with
email campaigns. Gross margin increased to 73% for the three months ended March
31, 2000 from 51% for the three months ended March 31, 1999. This increase in
gross margin was primarily due to improved volume of high margin services,
namely email transmissions, in custom marketing services. We expect overall
gross margin to fluctuate as a result of the overall variation in the mix of
services provided, as well as from fluctuations in gross margin for transaction
revenue.

Operating Expenses

Product Development. Product development costs primarily consist of
compensation for technology personnel, fees for outside technology consultants,
and an allocation of overhead costs. Product development costs increased from
$513,000, or 102% of revenue, for the three months ended March 31, 1999 to
approximately $1.6 million, or 38% of revenue, for the three months ended March
31, 2000. The increase in absolute dollars was due primarily to increased
personnel and consulting expenses. The decrease in product development costs as
a percent of revenues is primarily attributable to an increase in revenues for
the quarter ended March 31, 2000. In addition, the fixed nature of some
development costs also contributed to the decrease in expense as a percentage
of revenues. We believe that continued investment in product development is
critical to attaining our strategic objectives and, as a result, we expect
product development expenses to increase significantly on an absolute dollar
basis in the future. Product development expenses may fluctuate as a percentage
of revenue over time depending on the projects undertaken from time to time.

Sales and Marketing. Sales expenses consist primarily of compensation for
sales personnel, expenses for trade shows and an allocation of overhead costs.
Marketing expenses consist primarily of member acquisition expenses, promotions
directed towards new and existing incentives-based advertisers and marketers,
compensation for marketing personnel and an allocation of overhead costs. Sales
and marketing expenses increased from approximately $1.0 million, or 204% of
revenue, for the quarter ended March 31, 1999 to approximately $5.4 million, or
126% of revenue, for the quarter ended March 31, 2000. The increase in absolute
dollars was primarily attributable to additional hiring of sales and marketing
personnel, increased sales commissions resulting from higher revenues,
increased expenses associated with membership acquisition, and increased
advertising and promotional expenses. The decrease in sales and marketing
expenses as a percentage of revenues is attributable primarily to an increase
in transaction revenues as the result of an increased number of transactions
driven by growth in membership and an increase in custom marketing revenue due
to increasing demand for transmission of emails to Cybergold members. We expect
sales and marketing expenses to increase on an absolute dollar basis in future
periods as additional personnel are hired in sales and marketing, expand into
new markets and continue to promote advertising solutions.

General and Administrative. General and administrative expenses include
compensation for administration personnel, fees for outside professional
advisors and an allocation of overhead costs. General and administrative
expenses increased from $307,000, or 61% of revenue, for the quarter ended
March 31,

129
<PAGE>

1999, to approximately $2.3 million, or 54% of revenue, for the quarter ended
March 31, 2000. The increase in absolute dollars was due to the growth in
staffing, legal, accounting, and other professional services. The decrease in
general and administrative expenses as a percentage of revenues is primarily
attributable to an increase in transaction revenues as the result of an
increased number of transactions driven by growth in our membership base and an
increase in custom marketing revenue due to increasing demand for transmission
of emails to our membership base. In addition, the fixed nature of a portion of
the general and administrative costs also contributed to the decrease in
expenses as a percentage in revenues. We expect general and administrative
expenses to increase on an absolute dollar basis in future periods as we hire
additional personnel and incur additional costs related to the growth of our
business and operations.

itarget Acquisition Costs. The itarget merger costs of $2.1 million in the
quarter ended March 31, 2000 consisted of payments made to itarget management
in connection with employment agreements as well as legal, accounting and
investment banking fees.

Amortization of Deferred Compensation. In connection with the granting of
options to purchase our common stock to employees, directors and consultants,
we recorded deferred compensation representing the difference between the
exercise price of options granted and the deemed fair market value of our
common stock at the time of the grant. Amortization of deferred compensation of
$327,000 and $113,000 was recorded during the quarters ended March 31, 1999 and
2000, respectively.

Interest Income, Net. Interest income, net, consists of interest earned on
cash balances, including balances in Cybergold member accounts, offset by
interest expense incurred with respect to our capital leases and equipment
financing obligations. Interest income, net, increased from $11,000 in the
quarter ended March 31, 1999 to $563,000 in the quarter ended March 31, 2000.
The increase in interest income, net, was due primarily to interest earned on
the proceeds from our initial public offering in September of 1999.

Income Taxes. No income tax benefits have been recorded for any of the
periods presented due to Cybergold's current loss position.

Other Comprehensive Income (Loss). Cybergold's other comprehensive income
(loss) represents any unrealized gains or losses on its marketable securities.

Years Ended December 31, 1999, 1998 and 1997

Revenues

Total Revenues were $5.5 million, $1.0 million and $531,000 for the years
ended December 31, 1999, 1998 and 1997, respectively, representing increases of
446% from 1998 to 1999 and 89% from 1997 to 1998.

Transaction Revenues. Transaction revenues were $3.3 million, $628,000 and
$457,000 for the years ended December 31, 1999, 1998 and 1997, respectively,
representing increases of 428% from 1998 to 1999 and 37% from 1997 to 1998.
Transaction revenues earned for the years ended December 31, 1999, 1998 and
1997, related to members earning cash rewards by performing specified actions
in response to advertisements. The increase in transaction revenues is
primarily the result of an increased number of transactions driven by growth in
our membership base. Total membership was approximately 5,783,000, 1,066,000
and 254,000 for the years ended December 31, 1999, 1998 and 1997, respectively,
representing increases of 442% from 1998 to 1999 and 320% from 1997 to 1998.

Custom Marketing Services and Other Revenues. Custom marketing services and
other revenues were $2.2 million, $377,000 and $74,000 for the years ended
December 31, 1999, 1998 and 1997, respectively, representing increases of 475%
from 1998 to 1999 and 409% from 1997 to 1998. All custom marketing services
revenues earned for the years ended December 31, 1999, 1998 and 1997, related
to custom engineering and production fees. The increase in custom marketing
services and other revenues resulted primarily from the increase in email
revenue, which represented 75% of total custom marketing service revenue in
1999 compared to 0% in 1998.

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<PAGE>

Cost of Revenues

Overall cost of revenues were $1.9 million, $466,000 and $293,000 for the
years ended December 31, 1999, 1998 and 1997, respectively, representing
increases of 314% from 1998 to 1999 and 59% from 1997 to 1998. Cost of revenues
for the year ended December 31, 1999 was comprised of $1.6 million of cash
incentives earned by members and $334,000 of personnel costs associated with
custom marketing. Cost of revenues for the year ended December 31, 1998 was
comprised of $293,000 of cash incentives earned by members and $173,000 of
personnel costs associated with custom marketing services. Cost of revenues for
the year ended December 31, 1997 was comprised of $256,000 of cash incentives
earned by members and $37,000 of personnel costs associated with custom
marketing services. Gross margin was 65%, 54% and 45% for the years ended
December 31, 1999, 1998 and 1997, respectively. The increase in gross margin
between 1998 and 1999 was primarily due to an increase in high margin email and
placement revenue. We expect overall gross margin to continue to fluctuate as a
result of the overall variation in the mix of custom marketing services we
provide as well as from fluctuations in gross margin for transaction revenue.

Product Development Costs

Product development costs were $3.2 million, $1.7 million and $1.2 million
for the years ended December 31, 1999, 1998 and 1997, respectively,
representing increases of 85% from 1998 to 1999 and 45% from 1997 to 1998.
Product development costs decreased as a percentage of revenues to 58%, 172%
and 224% for the years ended December 31, 1999, 1998 and 1997, respectively.
The decrease in product development expenses as a percentage of revenues is
primarily attributable to an increase in revenues as we increased our
membership and advertising and marketing clients. In addition, the fixed nature
of some of our development costs also contributed to the decrease in expense as
a percentage of revenues. We expect product development costs to continue to
increase as we continue to build features and functionality into our system.

Sales and Marketing Expenses

Sales and marketing expenses were $9.2 million, $2.7 million and $2.2
million for the years ended December 31, 1999, 1998 and 1997, respectively,
representing increases of 240% from 1998 to 1999 and 25% from 1997 to 1998.
Sales and marketing costs decreased as a percentage of revenues to 167%, 268%
and 407% for the years ended December 31, 1999, 1998 and 1997, respectively.
The increase in sales and marketing expenses is primarily attributable to
additional hiring of sales and marketing personnel, increased sales commissions
resulting from higher revenues, increased expenses associated with member
acquisition, and increased advertising and promotion expenses. The decrease in
sales and marketing expenses as a percentage of revenues is attributable
primarily to an increase in revenues as we increased our membership and
advertising and marketing clients. We expect sales and marketing expenses to
increase as we continue to increase our marketing efforts, expand our direct
sales force and open additional regional sales offices.

General and Administrative Expenses

General and administrative expenses were $3.4 million, $814,000 and $740,000
for the years ended December 31, 1999, 1998 and 1997, respectively,
representing increases of 312% from 1998 to 1999 and 10% from 1997 to 1998.
General and administrative costs decreased as a percentage of revenues to 61%,
81% and 139% for the years ended December 31, 1999, 1998 and 1997,
respectively. The increase in general and administrative expenses resulted from
higher professional fees as well as an increase in payroll expenses due to
hiring additional administrative personnel. The decrease in general and
administrative expenses as a percentage of revenues is primarily attributable
to an increase in revenues as we increased our membership and advertising and
marketing clients. In addition, the fixed nature of a portion of our general
and administrative costs also contributed to the decrease in expense as a
percentage of revenues. We expect that general and administrative expenses will
continue to increase as we expand our operations and incur additional costs
related to being a public company.

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<PAGE>

Amortization of Deferred Compensation Expense

In connection with the granting of options to purchase our common stock to
certain employees, directors and consultants during the year ended December 31,
1998, we recorded deferred compensation representing the difference between the
exercise price of options granted and the deemed fair market value of our
common stock at the time of grant. Amortization of deferred compensation in the
years ended December 31, 1998 and 1999 were $198,000 and $735,000,
respectively. For the year ended December 31, 1997 we recorded no deferred
compensation.

Interest Income (Expense), Net

Interest income (expense), net was $740,000, $78,000 and $(15,000) for the
years ended December 31, 1999, 1998 and 1997. The increase in net interest
income from 1998 to 1999 is due to the increase in cash and cash equivalents
resulting from the Company's initial public offering in September 1999.

Dividends Attributable to Preferred Stockholders

Dividends attributable to preferred stockholders were $(1.6) million and
$(660,000) for the years ended December 1999 and 1998. After the company went
public, the accrual of dividends attributable to preferred stockholders ceased
as the preferred stock was converted into common stock.

Income Taxes

We recorded a net loss of $12.1 million for the year ended December 31,
1999. For federal and state tax purposes, no provision for income taxes was
recorded, and no tax benefit has been recognized due to the uncertainty of
realizing future tax deductions for these losses.

As of December 31, 1999, we had net operating loss carryforwards of
approximately $22.2 million for federal and state income tax purposes. The
federal and state net operating loss carryforwards begin to expire in the years
2011 and 2005, respectively. Our ability to utilize our net operating loss
carryforwards to offset future taxable income, if any, may be restricted as a
result of equity transactions that give rise to changes in ownership as defined
in the Tax Reform Act of 1986.

Liquidity and Capital Resources

Since inception, we have financed our operations primarily from the sale of
equity securities to venture capital firms and other individuals, institutional
and strategic investors. We have also borrowed funds under long-term capital
lease and equipment financing facilities. As of March 31, 2000, we had
approximately $16.1 million of cash and cash equivalents and approximately
$23.4 million in short-term investments and had borrowings of $544,000 under
capital leases and notes payable.

Net cash used in operating activities was $8.7 million, $3.5 million, and,
$3.2 million in 1999, 1998 and 1997, respectively, and approximately $845,000
and $7.0 million for the three months ended March 31, 1999 and March 31, 2000,
respectively. In 1999, the net cash used in operating activities consisted
primarily of our net loss, amortization of deferred compensation, imputed
compensation and accounts receivable, offset in part by an increase in accounts
payable, members payable, membership acquisition payable, accrued liabilities,
and deferred revenue.

In 1998, the net cash used in operating activities consisted primarily of
our net loss, offset in part by an increase in accounts payable, members
payable, membership acquisition payable, depreciation and amortization, and
deferred revenue.

In 1997, the net cash used in operating activities consisted primarily of
our net loss, offset by an increase in depreciation, members payable,
membership acquisition payable, and deferred revenue.

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<PAGE>

Cash used in operating activities for the three months ended March 31, 1999
and March 31, 2000 resulted primarily from net losses and fluctuations in
accounts receivable, accounts payable, members payable, membership acquisition
payable, accrued liabilities and deferred revenues.

Net cash provided by (used in) investing activities was $(29.3) million,
$(163,000) and $(58,000) in 1999, 1998, and 1997, respectively, $(104,000) for
the three months ended March 31, 1999, and $5.6 million for the three months
ended March 31, 2000. In 1999, the net cash used in investment activities
consisted primarily of the purchase of short-term investments related to the
investing of the proceeds of the initial public offering. The amounts in the
first three months of 1999, and during the years 1998 and 1997 were used to
acquire property and equipment. Cash provided by investing activities in the
three months ended March 31, 2000 reflects the sale of $5.9 million of short-
term investments.

Net cash provided by financing activities was $52.1 million, $5.6 million
and $4.3 million, in 1999, 1998 and 1997, respectively and $49,000 and $175,000
for the three months ended March 31, 1999, and 2000, respectively. In 1999,
this amount included $40.7 million in net proceeds from the closing of its
public offering in 1999, $10.1 million in net proceeds from the issuance of
preferred stock plus the proceeds from the exercise of warrants and stock
options, net of repurchases. In 1998, this amount included $5.8 million in net
proceeds from the issuance of preferred stock, less payments on capital leases.
In 1997, this amount included primarily $3.1 million in net proceeds from the
issuance of preferred stock, $1.0 million in proceeds from stockholder loans
that were subsequently converted into preferred stock, and $250,000 in proceeds
from a sale-leaseback transaction related to items of computer equipment, less
payments on capital leases. Cash provided for financing activities during the
three months ended March 31, 1999, and 2000, resulted primarily from the
proceeds received from the exercise of stock options and proceeds from
equipment financing in the first quarter of 1999.

In 1997, 1998 and 1999, we entered into various non-cancelable capital lease
agreements for some of our capital expenditures. As a result of these capital
lease agreements, we had lease payment obligations of approximately $115,000,
$143,000 and $137,000 in 1997, 1998, and 1999, respectively. Borrowings under
these capital lease arrangements have terms ranging from 36 to 48 months with
monthly payments and interest rates ranging from 10.5% to 11.5%.

We currently anticipate that our available cash resources combined with the
net proceeds from this offering will be sufficient to meet our anticipated
working capital and capital expenditure requirements through the end of 2000.
However, we may need to raise additional funds sooner to fund more rapid
expansion, to develop new or enhance existing services or products, to respond
to competitive pressures or to acquire complementary products, businesses or
technologies. If adequate funds are not available on acceptable terms, our
business, results of operations and financial condition could be harmed. See
"Risk Factors--We may need more working capital to expand our business, and our
prospects for obtaining additional financing are uncertain."

Recent Accounting Pronouncements

In April 1998, the Accounting Standards Executive Committee issued SOP 98-5,
"Reporting on the Costs of Start-Up Activities." This SOP provides guidance on
the financial reporting of start-up costs and organization costs. It requires
the costs of the start-up activities and organization costs to be expensed as
incurred. The SOP is effective for financial statements for fiscal years
beginning after December 15, 1998. The Company adopted the SOP during the year
ended December 31, 1998. The adoption of the SOP did not have a material impact
on our financial statements.

During 1998, Cybergold adopted SFAS No. 130, "Reporting Comprehensive
Income." Cybergold has disclosed all items of comprehensive income (loss) in
the accompanying consolidated statements of operations.

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<PAGE>

The Company also adopted SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information." As of December 31, 1998, management has
concluded that the Company only operates in one segment and exclusively in the
United States.

In March 1998, the American Institute of Certified Public Accountants issued
SOP No. 98-1, "Software for Internal Use." The adoption of SOP No. 98-1 has not
had a material impact on our financial statements.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133, as amended by SFAS No. 137,
is effective for fiscal years beginning after June 15, 2000. SFAS No. 133 is
not expected to have a material impact on Cybergold's financial position or
results of operations.

In April 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, Accounting for Certain Transactions Involving Stock
Compensation, an interpretation of APB Opinion No. 25 ("FIN 44"). Among other
issues, FIN 44 clarifies (a) the definition of employee for purposes of
applying Opinion No. 25, (b) the criteria for determining whether a plan
qualifies as a noncompensatory plan, (c) the accounting consequence of various
modifications to the terms of a previously fixed stock option or award, and (d)
the accounting for an exchange of stock compensation awards in a business
combination. FIN 44 is effective July 1, 2000, but certain conclusions in the
interpretation cover specific events that occur after either December 15, 1998
or January 12, 2000. To the extent that this interpretation covers events
occurring during the period after December 15, 1998, or January 12, 2000, but
before the effective date of July 1, 2000, the effect of applying this
interpretation are recognized on a prospective basis from July 1, 2000.
Cybergold is currently reviewing stock grants to determine the impact, if any,
that may arise from implementation of FIN 44, although management does not
expect the impact, if any, to be material to the financial statements.

In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin ("SAB") No. 101, "Revenue Recognition," which provides
guidance on the recognition, presentation, and disclosure of revenue in
financial statements filed with the SEC. SAB 101 outlines the basic criteria
that must be met to recognize revenue and provides guidance for disclosures
related to revenue recognition policies. Cybergold believes that its revenue
recognition policies comply with the requirements of SAB 101.

Year 2000 Issues

Since January 1, 2000, we have not encountered any material issues relating
to the Year 2000. The costs associated with correcting reported issues have not
been and are not expected to be material. However, some Year 2000 issues may
not be discovered until well after January 1, 2000. Cybergold intends to
continue to prioritize reports of such issues and correct significant related
problems.

Qualitative and Quantitative Disclosures About Market Risk

Cybergold's investments are classified as held-to-maturity securities
therefore changes in the market's interest rates effect the value of the
investment as recorded by Cybergold and are recorded as unrealized gains and
losses on the financial statements. At March 31, 2000, our cash and cash
equivalents consisted primarily of demand deposits and money market funds held
by large institutions in the United States and our short-term investments were
invested in U.S. Government agency debt and equity securities maturing in less
than one year. Due to the nature of our short-term investments, we have
concluded that there is no material market risk exposure.

Legal Proceedings

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<PAGE>

EXECUTIVE OFFICERS AND DIRECTORS
OF CYBERGOLD JOINING MYPOINTS

The following table sets forth information about the executive officers and
directors of Cybergold who will become executive officers and/or directors of
MyPoints following the merger:

<TABLE>
<CAPTION>
Name Age Position with Cybergold
---- --- -----------------------
<C> <C> <S>
A. Nathaniel Goldhaber 52 President and Chief Executive Officer
</TABLE>

A. Nathaniel Goldhaber has served as President, Chairman of the Board and
Chief Executive Officer of Cybergold since October 1994. Prior to joining
Cybergold, Mr. Goldhaber was self-employed as a venture capitalist. Prior to
that Mr. Goldhaber was the Chief Executive Officer of Kaleida Labs, Inc., a
multimedia joint venture between IBM and Apple Computer, and the Chief
Executive Officer of Centram Systems West, a developer of local area networks.
Mr. Goldhaber is a Member of the Executive Board of the University of
California, Berkeley, College of Letters and Sciences. Mr. Goldhaber received a
B.A. from Maharishi International University and an M.A. from the University of
California, Berkeley.

In addition, Cybergold has the right to designate another individual subject
to MyPoints reasonable approval, as a director of MyPoints.

Terms of Directors and Executive Officers

Cybergold's board of directors is divided into three classes, each of whose
members serve for a staggered three-year term. The board currently consists of
one Class I director, Jay Chiat, two Class II directors, A. Nathaniel Goldhaber
and Garrett D. Gruener, and three Class III directors, Regis P. McKenna, Alan
Salzman and Peter Sealey. At each annual meeting of stockholders, a class of
directors will be elected for a three-year term to succeed the directors of the
same class whose terms are then expiring. The terms of the Class I directors,
Class II directors and Class III directors will expire upon the election and
qualification of successor directors at the 2003, 2002 and 2001 annual meetings
of stockholders, respectively. The executive officers serve at the pleasure of
the board of directors. On April 28, 2000, Christopher D. Alafi resigned as a
Class I director.

Committees of the Board of Directors

The board of directors has a compensation committee and an audit committee.

Compensation Committee. The compensation committee of the board of
directors reviews and makes recommendations to the board regarding the
compensation and benefits provided to our key executive officers and directors,
including stock compensation and loans. In addition, the compensation committee
reviews policies regarding compensation arrangements and benefits for all of
our employees. As part of the foregoing, the compensation committee also
administers our 1999 Omnibus Equity Incentive Plan and 1999 Employee Stock
Purchase Plan. The current members of the compensation committee are Messrs.
Chiat and Gruener.

Audit Committee. The audit committee of the board of directors reviews and
monitors our internal accounting procedures and reviews the results and scope
of the annual audit and other services provided by our independent accountants.
The audit committee also consults with our management and our independent
auditors prior to the presentation of financial statements to stockholders and,
as appropriate, initiates inquiries into aspects of our financial affairs. In
addition, the audit committee has the responsibility to consider and recommend
the appointment of, and to review fee arrangements with, our independent
accountants. The current members of the audit committee are Messrs. McKenna,
Salzman and Sealey.

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Director Compensation

Our directors receive $5,000 for attendance at each board meeting and $2,500
for attendance at each board committee meeting. In addition, our directors are
reimbursed for all reasonable out-of-pocket expenses incurred in connection
with their attendance at board and board committee meetings. From time to time,
directors who are not employees of Cybergold have received grants of options to
purchase shares of our common stock. On June 25, 1996, we granted Messrs. Chiat
and McKenna each an option to purchase 46,666 shares of our common stock. In
addition, on June 25, 1996, in connection with a consulting agreement with
Mr. Sealey, we granted Mr. Sealey an option to purchase 16,666 shares of our
common stock at an exercise price of $0.015 per share. On November 11, 1996, we
also granted to Mr. Sealey an option to purchase 30,000 shares of our common
stock at an exercise price of $0.225 per share, and on June 19, 1998, in
connection with a consulting agreement with Mr. Sealey, we granted him an
option to purchase 20,000 shares of our common stock at an exercise price of
$0.75 per share.

Pursuant to Cybergold's 1999 Omnibus Equity Incentive Plan, outside
directors, meaning directors who are not employees, are only eligible to
receive nonstatutory stock options. Each outside director who first became or
becomes a member of the board of directors after Cybergold's initial public
offering in September 1999 will receive a one-time option grant for 15,000
shares of our Common Stock upon taking office. Upon conclusion of each regular
annual meeting of Cybergold's stockholders held in the year 2000 and
thereafter, each outside member of the board of directors who will continue to
serve as a director will receive an option covering 7,500 shares. However, an
outside director who received the one-time grant for 15,000 shares may not in
the same calendar year also receive the annual grant of 7,500 shares. These
options have a 10-year term, but will terminate earlier if the outside
director's service ends. Each one-time or annual periodic option grant will
become exercisable and vested in full on the first anniversary of the grant
date. All options granted to an outside director will become fully exercisable
if, the director's service as a director ends because of death, total and
permanent disability or retirement at or after age 65, or Cybergold is subject
to a change in control. However, if the change in control transaction is to be
treated as a "pooling of interests" for financial reporting purposes, then the
options will not become fully exercisable upon a change in control if
Cybergold's independent accountants and the other party's independent
accountants determine that accelerated vesting would preclude the use of
"pooling of interests" accounting.

Compensation Committee Interlocks and Insider Participation

The compensation committee of the board of directors currently consists of
Messrs. Gruener and Chiat. No interlocking relationship exists between any
member of our board of directors or our compensation committee and any member
of the board of directors or compensation committee of any other company, and
no such interlocking relationship has existed in the past.

Indemnification

In May 1999, the board of directors authorized us to enter into
indemnification agreements with each of our directors and executive officers.
The form of indemnification agreement provides that we will indemnify our
directors and executive officers against any and all of their expenses incurred
by reason of their status as a director or executive officer to the fullest
extent permitted by Delaware law, our certificate of incorporation and our
bylaws.

Our certificate of incorporation and bylaws each contain provisions relating
to the limitation of liability and indemnification of our directors and
officers. Our certificate of incorporation provides that our directors will not
be personally liable to Cybergold or our stockholders for monetary damages for
any breach of fiduciary duty as a director, except for liability:

. for any breach of the directors duty of loyalty to Cybergold or our
stockholders;

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<PAGE>

. for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law;

. in respect of some types of unlawful payments of dividends or unlawful
stock repurchases or redemptions as provided in Section 174 of the
Delaware General Corporation Law; or

. for any transaction from which the director derives any improper personal
benefit.

Our certificate of incorporation also provides that if the Delaware General
Corporation Law is amended after approval by our stockholders of our
certificate of incorporation to authorize corporate action further eliminating
or limiting the personal liability of directors, then the liability of our
directors will be eliminated or limited to the fullest extent permitted by the
Delaware General Corporation Law. The foregoing provisions of our certificate
of incorporation are not intended to limit the liability of our directors or
officers for any violation of applicable federal securities laws.

In addition, as permitted by Section 145 of the Delaware General
Corporation Law, our bylaws provide that:

. we are required to indemnify our directors and officers to the fullest
extent permitted by the Delaware General Corporation Law;

. to the fullest extent permitted by the Delaware General Corporation Law,
we are required to advance all expenses incurred by our directors and
executive officers in connection with a legal proceeding (subject to
enumerated exceptions);

. the rights conferred in the bylaws are not exclusive;

. we are authorized to enter into indemnification agreements with our
directors, officers, employees and agents; and

. we may not retroactively amend our bylaw provisions relating to
indemnification.

Our bylaws provide that we must indemnify our directors to the fullest
extent permitted by Delaware General Corporation Law, including in
circumstances in which indemnification is otherwise discretionary under
Delaware General Corporation Law.

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<PAGE>

Executive Compensation

Summary Compensation Table. The following table sets forth, for the fiscal
years ended December 31, 1999 and 1998, the total compensation paid to or
accrued by Cybergold's Chief Executive Officer and the other executive officers
with the four most highly compensated executive officers for the fiscal year
ended December 31, 1999.

<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
------------------------------- ------------
Other Annual Securities
Fiscal Bonus Compensation Underlying
Name and Principal Position Year Salary ($) (1)($) ($) Options
--------------------------- ------ ---------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
A. Nathaniel Goldhaber..................... 1999 $120,833 -- -- --
Chairman of the Board and Chief Executive 1998 -- -- -- --
Officer
Steven M. Farber (2) (3)................... 1999 $148,750 $46,049 -- 200,000
Chief Operating Officer 1998 $ 47,744 -- -- 133,333
Gary Fitts................................. 1999 $141,188 $ 7,000 -- 100,000
Chief Technology Officer 1998 $125,000 -- -- --
Michael Koifman (2)........................ 1999 $130,000 $ 6,000 -- 50,000
Vice President of Engineering 1998 $ 15,758 -- -- 133,333
Daniel W. Berger (2)....................... 1999 $139,169 $33,029 -- 166,666
Senior Vice President, General Manager 1998 27,563 -- -- 66,666
Incentives Division
</TABLE>
--------
(1) Cybergold's executive officers are eligible for annual cash bonuses. Such
bonuses are generally based upon achievement of individual, as well as
corporate performance objectives determined by the Compensation Committee.

(2) Joined Cybergold during 1998.

(3) Mr. Farber resigned his position on February 10, 2000.

Option Grants in Last Fiscal Year. The following table sets forth all
individual grants of stock options during the fiscal year ended December 31,
1999, to each of the executive officers named in the table above. No stock
appreciation rights were granted during such fiscal year.
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Option Term ($)(2)
---------------------------------------------------------- ---------------------
Number of
Securities % of Total
Underlying Options Granted
Options to Employees in Exercise Price Expiration
Name Granted (#)(1) 1999 Fiscal Year ($/Share) Date 5% 10%
---- -------------- ----------------- -------------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
A. Nathaniel Goldhaber.. -- -- -- -- -- --
Steven F. Farber (7).... 200,000 17.1(3) $3.90 05/10/09 $ 490,538 $ 1,243,119
Gary Fitts (5).......... 100,000 12.8(4) $7.75 12/01/09 $ 487,393 $ 1,235,150
Michael Koifman (5)..... 50,000 6.4(4) $7.75 12/01/09 $ 243,697 $ 617,575
Daniel W. Berger (6).... 66,666 5.7(3) $3.90 05/18/09 $ 163,511 $ 414,369
Daniel W. Berger (5).... 100,000 12.8(4) $7.75 12/01/09 $ 487,393 $ 1,235,150
</TABLE>
--------
(1) All options granted, except as specifically noted, had ten-year terms and
vest ratably over four years.
(2) The 5% and 10% annual rates of compounded stock price appreciation are
mandated by rules of the Securities and Exchange Commission. There is no
assurance provided to any of the officers identified in the table or any
other holder of Cybergold's securities that the actual stock price
appreciation over the 10-year option term will be at the assumed 5% and 10%
levels or at any other defined level. Unless the market price of the common
stock does in fact appreciate over the option term, no value will be
realized from the option grants made to the officers identified in the
table.

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<PAGE>

(3) Based on a total of 1,166,264 options granted to our employees under our
1996 Stock Option Plan during the 12 months ended December 31, 1999.
(4) Based on a total of 779,033 options granted to our employees under our 1999
Omnibus Equity Incentive Plan during the 12 months ended December 31, 1999.
(5) Under these grants, 25% of shares vest after completing 12 months of
service from December 1, 1999. The balance vests in equal installments over
36 months of service beginning December 1, 2000.
(6) The 66,666 options granted to Mr. Berger are immediately exercisable.
Cybergold may repurchase shares purchasable under this grant, at the
original exercise price paid per share if Mr. Berger ceases service before
vesting in those shares. Under this grant, 25% of shares vest after
completing 12 months of service and the balance vests in equal installments
over the next 36 months.
(7) The 200,000 shares of common stock granted to Mr. Farber at an exercise
price of $3.90 per share were immediately exercisable. 33,333 of these
shares vested upon the closing of the initial public offering on September
22, 1999. The additional 166,667 shares vest based on Cybergold's
performance with respect to several criteria. These criteria include
Cybergold's revenues, the number of merchants utilizing Cybergold's
micropayments system, the introduction of new offerings, the number of
Cybergold members, the number of transactions entered into by members, the
number of visitors to Cybergold's website and Cybergold's general
productivity. To the extent these criteria are not achieved, Mr. Farber's
option will vest in full in five years from the date of grant. Mr. Farber
resigned his position on February 10, 2000.

Aggregated Option Exercises in Last Fiscal Year and Year-End Option
Values. The following table summarizes the number of shares and value realized
by each of the executive officers named in the tables above upon the exercise
of options and the value of the outstanding options held by such officers at
December 31, 1999:
<TABLE>
<CAPTION>
Share Number of Securities Value of Unexercised
Acquired on Value Underlying Unexercised In-The-Money Options
Name Exercise Realized(1) Options at Fiscal Year-End at Fiscal Year-End(2)
---- ----------- ----------- ------------------------------ -------------------------
Exercisable Unexercisable Exercisable Unexercisable
------------- -------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
A. Nathaniel Goldhaber.. -- -- -- -- -- --
Steven M. Farber........ -- -- 199,406 -- $ 3,044,147 --
Gary Fitts.............. 200,000 $777,000 33,333 100,000 $ 589,161 $994,000
Michael Koifman......... -- -- 133,333 50,000 $ 2,328,661 $497,000
Daniel W. Berger........ -- -- 133,333 100,000 $ 2,038,646 $994,000
</TABLE>
--------
(1) Amounts disclosed in this column do not reflect amounts actually received
by the named executive officers but are calculated based on the difference
between the fair market value on the date of exercise of the options and
the exercise price of the options. The named executive officers will
receive cash only if and when they sell the common stock issued upon
exercise of the options, and the amount of cash received by such
individuals is dependent on the price of Cybergold's common stock at the
time of such sale.

(2) Based on the fair market value of Cybergold's common stock as of December
31, 1999, of $17.6875 per share as reported on the Nasdaq National Market,
less the exercise price payable upon exercise of such options.

Stock Plans

1999 Omnibus Equity Incentive Plan

Share Reserve. Our board of directors adopted our 1999 Omnibus Equity
Incentive Plan, and the stockholders approved the plan in 1999. We have
reserved 1,500,000 shares of our common stock for issuance under the 1999
Omnibus Equity Incentive Plan. Any shares not yet issued under our 1996 Stock
Option Plan as of the date of this offering will also be available for grant
under the 1999 Omnibus Equity Incentive Plan. On January 1 of each year,
starting with the year 2000, the number of shares in the reserve will
automatically increase by 5% of the total number of shares of common stock that
are outstanding at that time or, if less, by 1,500,000 shares. In general, if
options or shares awarded under the 1999 Omnibus Equity Incentive Plan or

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1996 Stock Option Plan are forfeited, then those options or shares will again
become available for awards under the 1999 Omnibus Equity Incentive Plan.

Administration. The compensation committee of our board of directors
administers the 1999 Omnibus Equity Incentive Plan. The committee has the
complete discretion to make all decisions relating to the interpretation and
operation of our 1999 Omnibus Equity Incentive Plan. The committee has the
discretion to determine who will receive an award, what type of award it will
be, how many shares will be covered by the award, what the vesting
requirements will be (if any), and what the other features and conditions of
each award will be. The compensation committee may also reprice outstanding
options and modify outstanding awards in other ways.

Eligibility. The following groups of individuals are eligible to
participate in the 1999 Omnibus Equity Incentive Plan:

. Employees,

. Members of our board of directors who are not employees, and

. Consultants.

Types of Award. The 1999 Omnibus Equity Incentive Plan provides for the
following types of award:

. Incentive stock options to purchase shares of our common stock,

. Nonstatutory stock options to purchase shares of our common stock,

. Restricted shares of our common stock,

. Stock appreciation rights, and

. Stock units.

Options. An optionee who exercises an incentive stock option may qualify
for favorable tax treatment under Section 422 of the Internal Revenue Code of
1986. On the other hand, nonstatutory stock options do not qualify for such
favorable tax treatment. The exercise price for incentive stock options
granted under the 1999 Omnibus Equity Incentive Plan may not be less than 100%
of the fair market value of our common stock on the option grant date. In the
case of nonstatutory stock options, the minimum exercise price is 85% of the
fair market value of our common stock on the option grant date. Optionees may
pay the exercise price by using:

. Cash,

. Shares of common stock that the optionee already owns,

. A full-recourse promissory note, except that the par value of newly
issued shares must be paid in cash,

. An immediate sale of the option shares through a broker designated by us,
or

. A loan from a broker designated by us, secured by the option shares.

Options vest at the time or times determined by the compensation committee.
In most cases, our options vest over the four-year period following the date
of grant. Options generally expire 10 years after they are granted, except
that they generally expire earlier if the optionee's service terminates
earlier. The 1999 Omnibus Equity Incentive Plan provides that no participant
may receive options covering more than 500,000 shares in the same year, except
that a newly hired employee may receive options covering up to 1,500,000
shares in the first year of employment.

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<PAGE>

Restricted Shares. Restricted shares may be awarded under the 1999 Omnibus
Equity Incentive Plan in return for:

. Cash,

. A full-recourse promissory note, except that the par value of newly
issued shares must be paid in cash,

. Services already provided to us, and

. In the case of treasury shares only, services to be provided to us in the
future.

Automatic Option Grants

Initial Grants. Only the non-employee members of our board of directors will
be eligible for option grants under the automatic option grant program. Each
non-employee director who first joins our board after the effective date of
ibis offering will receive an initial option for 15,000 shares. That grant will
occur when the director takes office. The initial options vest in full on the
first year anniversary of the date of grant.

Annual Grants. At the time of each of our annual stockholders' meetings,
beginning in 2000, each non-employee director who will continue to be a
director after that meeting will automatically bc granted an annual option for
7,500 shares of our common stock. However, a new non-employee director who is
receiving the 15,000-share initial option will not receive the 7,500-share
annual option in the same calendar year. The annual options vest in full on the
first year anniversary of the date of grant.

The exercise price of each non-employee director's option will be equal to
the fair market value of our common stock on the option grant date. A director
may pay the exercise price by using cash, shares of common stock that the
director already owns, or an immediate sale of the option shares through a
broker designated by us. The non-employee directors' options have a 10-year
term, except that they expire one year after a director leaves the board (if
earlier). If a change in control of Cybergold occurs, a non-employee director's
option will become fully vested unless the accounting rules applicable to a
pooling of interests preclude acceleration. Vesting also accelerates if the
optionee retires after age 65, dies or is disabled.

Stock Appreciation Rights. We may award stock appreciation rights under the
1999 Omnibus Equity Incentive Plan. Each agreement evidencing stock
appreciation rights will inform the holder when such rights may be exercised.
Stock appreciation rights may be exercised for shares of common stock, cash or
a combination of cash and shares. No participant may receive stock appreciation
rights for more than 500,000 shares in the same year, except that a newly hired
employee may receive stock appreciation rights for up to 1,000,000 shares.

Stock Unity. We may award stock units under the 1999 Omnibus Equity
Incentive Plan. The stock units may be subject to vesting. Stock units may be
settled for shares of common stock, cash or a combination of cash and shares.

Buy Outs. In our sole discretion, we may offer to buy out for cash an option
or authorize an optionee to cash out an option that was previously granted.

Deferral of Awards. We may permit a participant to have cash that would be
paid to the participant for exercise of a stock appreciation right or
settlement of a stock unit credited to a deferred compensation account. We may
also permit shares that would be delivered for exercise of an option or stock
appreciation right converted into an equal number of stock units or converted
into amounts that would be credited to a deferred compensation account.

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<PAGE>

Change in Control. If a change in control of Cybergold occurs, an option or
other award under the 1999 Omnibus Equity Incentive Plan will become fully
vested if the option or other award is not assumed by the surviving corporation
or its parent or if the surviving corporation or its parent does not substitute
another award on substantially the same terms. A change in control includes:

. A merger of Cybergold after which our own stockholders own 50% or less of
the surviving corporation or its parent company,

. A sale of all or substantially all of our assets,

. A proxy contest that results in the replacement of more than one-third of
our directors over a 24-month period, or

. An acquisition of 50% or more of our outstanding stock by any person or
group, other than a person related to Cybergold (such as a holding
company owned by our stockholders).

Amendments or Termination. Our board may amend or terminate the 1999 Omnibus
Equity Incentive Plan at any time. If our board amends the plan, it does not
need to ask for stockholder approval of the amendment unless applicable law
requires it. The 1999 Omnibus Equity Incentive Plan will continue in effect
indefinitely, unless the board decides to terminate the plan earlier.

1999 Employee Stock Purchase Plan

Share Reserve and Administration. Our board of directors adopted our 1999
Employee Stock Purchase Plan, and our stockholders approved of the plan in
1999. Our 1999 Employee Stock Purchase Plan is intended to qualify under
Section 423 of the Internal Revenue Code. We have reserved 300,000 shares of
our common stock for issuance under the plan. On January 1 of each year,
starting with the year 2000, the number of shares in the reserve will be
automatically increased by 500,000 shares. Our compensation committee of our
board of directors administers the plan.

Eligibility. All of our employees are eligible to participate if they arc
employed by us for more than 20 hours per week and for more than five months
per year. Eligible employees may begin participating in the 1999 Employee Stock
Purchase Plan at the start of any offering period. Each offering period lasts
24 months. Overlapping offering periods start on May 1 and November 1 of each
year. However, the first offering period will start on the effective date of
this offering and end on October 31, 2001.

Amount of Contributions. Our 1999 Employee Stock Purchase Plan permits each
eligible employee to purchase common stock through payroll deductions. Each
employee's payroll deductions may not exceed 15% of the employee's cash
compensation. Purchases of our common stock will occur on April 31 and October
31 of each year. Each participant may purchase up to 750 shares on any purchase
date (1,500 shares per year). But the value of the shares purchased in any
calendar year (measured as of the beginning of the applicable offering period)
may not exceed $25,000.

Purchase Price. The price of each share of common stock purchased under our
1999 Employee Stock Purchase Plan will be 85% of the lower of.

. The fair market value per share of common stock on the date immediately
before the first day of the applicable offering period, or

. The fair market value per share of common stock on the purchase date.

In the case of the first offering period, the price per share under the plan
will be 85% of the lower of:

. The price per share to the public in this offering, or

. The fair market value per share of common stock on the purchase date.

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<PAGE>

Other Provisions. Employees may end their participation in the 1999 Employee
Stock Purchase Plan at any time. Participation ends automatically upon
termination of employment with Cybergold. If a change in control of Cybergold
occurs, our 1999 Employee Stock Purchase Plan will end and shares will be
purchased with the payroll deductions accumulated to date by participating
employees, unless the plan is assumed by the surviving corporation or its
parent. Our board of directors may amend or terminate the 1999 Employee Stock
Purchase Plan at any time. Our Chief Executive Officer also has a limited
ability to amend the plan. If our board increases the number of shares of
common stock reserved for issuance under the plan (except for the automatic
increases described above), it must seek the approval of our stockholders.

Change of Control Arrangements

All options and other awards granted under our 1996 Stock Option Plan and
our 1999 Omnibus Equity Incentive Plan, including options granted to our named
executive officers, will become fully vested if a change in control of
Cybergold occurs, unless the options or awards are assumed by the surviving
corporation or its parent or if the surviving corporation or its parent
substitutes comparable options or awards for options or awards granted under
our plans.

In September 1996, we were a party to two agreements by which Mr. Goldhaber
sold 66,666 shares of common stock to each of Regis McKenna and Jay Chiat, two
of our directors, at a per share purchase price of $0.015, for an aggregate
purchase price of $2,000,

Preferred Stock Financings

We have issued, in private placement transactions, shares of our preferred
stock as follows: an aggregate of 1,999,998 shares of Series A preferred stock
in July and September of 1996 at a purchase price of $1.50 per share, 1,394,973
shares of Series B preferred stock in June 1997 at a purchase price of $3.00
per share; 4,189,192 shares of Series C preferred stock in May and August of
1998 at a purchase price of $1.365 per share; and in May 1999, 2,051,275 shares
of Series D preferred stock at a purchase price of $3.90 per share, and
warrants to purchase an aggregate of 384,611 shares of Series D preferred stock
at an exercise price of $4.50 per share. Each share of preferred stock was
converted into shares of common stock upon the closing of Cybergold's initial
public offering in September 1999. The warrants to purchase Series D preferred
stock, if not sooner exercised, were automatically exercised pursuant to net
exercise provisions upon the closing of Cybergold's initial public offering.

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<PAGE>

The following table summarizes the shares of preferred stock purchased by
our chief executive officer and the other four most highly compensated
executive officers, directors and 5% stockholders, and entities associated with
them, in private placement transactions.

<TABLE>
<CAPTION>
Series A Series B Series C Series D
Investor(1) Preferred Stock Preferred Stock Preferred Stock Preferred Stock(4)
----------- --------------- --------------- --------------- ------------------
<S> <C> <C> <C> <C>
A. Nathaniel Goldhaber............... 833,333 325,774 -- 66,666
John D. Steuart...................... 16,666 4,294 7,326 7,485
Jay Chiat............................ 120,000 44,224 66,666 33,333
Regis P. McKenna..................... 33,333 16,834 36,630 19,084
Peter S. Sealey...................... -- 3,333 5,494 1,941
Alafi Capital Company................ 650,000 371,218 -- 270,274
Alta California Partners, L.P.(2).... -- -- 2,197,802 581,664
VantagePoint Venture Partners,
1996(3)............................. -- -- 1,648,352 581,664
</TABLE>
--------
(1) Shares held by affiliated persons and entities have been aggregated. See
"Security Ownership of Certain Cybergold Beneficial Owners and Management."

(2) Includes shares hold by Alta Embarcadero Partners, LLC. Garrett P. Gruener,
one of our directors, is a general partner of the general partner of Alta
California Partners, L.P. and a member of Alta Embarcadero Partners, LLC.

(3) Alan Salzman, one of our directors, is a managing partner of VantagePoint
Venture Partners, 1996.

(4) Includes warrants to purchase Series D preferred stock.

We believe that the transactions set forth above were made on terms no less
favorable to us than could have been obtained from unaffiliated third parties.
All future transactions, including loans between us and our officers,
directors, principal stockholders and their affiliates, will be approved by a
majority of the board of directors, and will continue to be on terms no less
favorable to us than could be obtained from unaffiliated third parties.

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<PAGE>

Security Ownership of Certain Cybergold Beneficial Owners and Management

The following table sets forth information with respect to the beneficial
ownership of Cybergold's outstanding capital stock as of December 31, 1999 with
respect to:

. each of Cybergold's directors;

. the chief executive officer and each of our named executive officers;

. each stockholder known by Cybergold to be the beneficial owner of more
than 5% of the outstanding shares of common stock; and

. all of Cybergold's executive officers and directors as a group.

<TABLE>
<CAPTION>
Shares Beneficially Approximate Percent
Name Owned(1) Beneficially Owned(2)
---- ------------------- ---------------------
<S> <C> <C>
A. Nathaniel Goldhaber(3).................................. 4,812,441 22.48%
Entities affiliated with Alta California Partners,
L.P.(4)................................................... 2,712,351 12.67%
VantagePoint Venture Partners, 1996(5)..................... 2,230,016 10.42%
Alafi Capital Company(6)................................... 1,291,492 6.03%
Gary Fitts(7).............................................. 233,333 1.09%
Christopher D. Alafi, Ph.D.(6)............................. 1,291,492 6.03%
Jay Chiat.................................................. 373,710 1.75%
Garrett P. Gruener(4)...................................... 2,712,351 12.67%
Regis P. McKenna(8)........................................ 217,011 1.01%
Alan Salzman(5)............................................ 2,230,016 10.42%
Peter S. Sealey, Ph.D.(9).................................. 77,434 *
Steven F. Farber(10)....................................... 199,406 *
Daniel W. Berger(11)....................................... 133,332 *
Michael Koifman(12)........................................ 133,333 *
All Directors and officers as a group (14 persons)(13)..... 12,797,360 59.69%
</TABLE>
--------
* Represents beneficial ownership of less than 1%.

(1) To the Company's knowledge, except as set forth in the footsteps to this
table, and subject to applicable community property laws, each person
named in this table has sole voting and investment power with respect to
the shares set forth opposite such person's name.

(2) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of common stock
subject to options currently exercisable or exercisable on or before June
26, 2000, are deemed outstanding for computing the percentage of the
person holding such options but are not deemed outstanding for computing
the percentage of any other person. On April 26, 2000, there were
21,438,180 shares of the Company's common stock outstanding. Options
granted to Directors under the Company's 1996 Employee Stock Option Plan
are immediately exercisable; however any shares purchased under such
options are subject to repurchase by the Company, upon the director's
cessation of Board service as a director prior to vesting in those shares.
Such options vest, and the Company's repurchase rights lapse, annually
over a period of three years commencing on the first anniversary of the
grant date.

(3) Includes 560,000 shares of common stock, which Mr. Goldhaber has
transferred to trusts for family members.

(4) Includes 2,586,153 shares beneficially owned by Alta California Partners,
L.P., and 59,083 shares beneficially owned by Alta Embarcadero Partners
LLC. Of these shares, a total of 67,115 are issuable upon exercise of
warrants. Garrett P. Gruener, one of our Directors, is a general partner
of the general partner Alta California Partners, L.P. and a member of Alta
Embarcadero Partners LLC. The address of

145
<PAGE>

Alta California Partners, L.P. and Alta Embarcadero Partners LLC is One
Embarcadero Center, Suite 4050, San Francisco, CA 94111. Mr. Gruener
disclaims beneficial ownership of the shares held by Alta California
Partners, L.P. and Alta Embarcadero Partners LLC, except to the extent of
his pecuniary interest therein.

(5) Alan Salzman, one of our Directors, is a managing partner of VantagePoint
Venture Partners, 1996. The address of VantagePoint Venture Partners, 1996
is 1001 Bayhill Drive, Suite 100, San Bruno, CA 94066. Mr. Salzman
disclaims beneficial ownership of the shares held by VantagePoint Venture
Partners, 1996, except to the extent of his pecuniary interest therein.

(6) Christopher Alafi, one of our Directors until his resignation on April 28,
2000, is a general partner of Alafi Capital Company. The address of Alafi
Capital Company is 9 Commodore Drive, Suite 405, Emeryville, CA 94608. Dr.
Alafi disclaims beneficial ownership of the shares held by Alafi Capital
Company, except to the extent of his pecuniary interest therein.

(7) Includes 33,333 shares of common stock issuable upon exercise of
immediately exercisable options, none of which are subject to our right of
repurchase.

(8) Includes 46,666 shares of common stock issuable upon exercise of
immediately exercisable options, none of which are subject to our right of
repurchase.

(9) Includes 16,389 shares of common stock issuable upon exercise of
immediately exercisable options, none of which are subject to our right of
repurchase.

(10) Includes 199,406 shares of common stock issuable upon exercise of
immediately exercisable options, none of which are subject to our right of
repurchase. Mr. Farber resigned his position on February 10, 2000.

(11) Includes 133,332 shares of common stock issuable upon exercise of
immediately exercisable options, 87,501 shares of which are subject to our
right of repurchase on or before June 26, 2000.

(12) Includes 133,333 shares of common stock issuable upon exercise of
immediately exercisable options, 80,556 shares of which are subject to our
right of repurchase on or before June 26, 2000.

(13) Includes 792,457 shares of common stock issuable upon exercise of
immediately exercisable options, 265,629 shares of which are subject to
our right of repurchase on or before June 26, 2000.

146
<PAGE>

LEGAL OPINION

The validity of the shares of MyPoints common stock offered by this proxy
statement/prospectus will be passed upon for MyPoints by Wilson Sonsini
Goodrich & Rosati, Professional Corporation. As of December 31, 1999,
investment partnerships and a member of Wilson Sonsini Goodrich & Rosati,
Professional Corporation, beneficially owned an aggregate of 149,720 shares of
common stock of MyPoints. Mario M. Rosati, one of our directors and our
secretary, and Christopher D. Mitchell, our assistant secretary, are members of
Wilson Sonsini Goodrich & Rosati. Of these shares, 16,666 are issuable upon
exercise of options held by Mr. Rosati, which options have an exercise price of
$0.10 per share.

Certain of the United States federal tax consequences to Cybergold
stockholders will be passed upon by Morrison & Foerster, LLP.

EXPERTS

The financial statements of MyPoints, Inc. as of December 31, 1998 and 1999
and for each of the three years in the period ended December 31, 1999 appearing
in this proxy statement/prospectus have been so included in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.

The audited consolidated financial statements of Cybergold, Inc. included in
this registration statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in accounting and auditing.

The financial statements of itarget as of December 31, 1999 and for each of
the two years in the period ended December 31, 1999 included in this
registration statement have been included in reliance on the report of Singer
Lewak Greenbaum & Goldstein LLP, independent accountants, given on authority of
that firm as experts in auditing and accounting.

STOCKHOLDER PROPOSALS

Under Rule 14a-8 of the Exchange Act, MyPoints stockholders may present
proper proposals for inclusion in MyPoints's proxy statement and for
consideration at the next annual meeting of its stockholders by submitting such
proposals to MyPoints in a timely manner. In order to be so included for the
2000 annual meeting, stockholder proposals must have already been received by
MyPoints and must have otherwise complied with the requirements of Rule 14a-8.

Under Rule 14a-8 of the Exchange Act, Cybergold stockholders may present
proper proposals for inclusion in Cybergold's proxy statement and for
consideration at the next annual meeting of its stockholders by submitting such
proposals to Cybergold in a timely manner. In order to be so included for the
2000 annual meeting, stockholder proposals must have already been received by
Cybergold and must have otherwise complied with the requirements of Rule 14a-8.

147
<PAGE>

WHERE YOU CAN FIND MORE INFORMATION

<TABLE>
<S> <C>
Reports, proxy statements and Reports, proxy statements and
other other
information concerning MyPoints information regarding Cybergold
may be inspected at: may be inspected at:

The National Association of The National Association of
Securities Dealers Securities Dealers
1735 K Street, N.W. 1735 K Street, N.W.
Washington, D.C. 20006 Washington, D.C. 20006

Requests for documents relating Requests for documents relating to
to MyPoints should be directed to: Cybergold should be directed to:

MyPoints, Inc. Cybergold, Inc.
100 California Street 1330 Broadway
12th Floor 12th Floor
San Francisco, CA 94111 Oakland, CA 94612
(415) 676-3700 (510) 302-3000
</TABLE>

MyPoints files reports, proxy statements and other information with the SEC.
Copies of its reports, proxy statements and other information may be inspected
and copied at the public reference facilities maintained by the SEC:

<TABLE>
<S> <C> <C>
Judiciary Plaza Citicorp Center Seven World Trade Center
Room 1024 500 West Madison Street 13th Floor
450 Fifth Street, N.W. Suite 1400 New York, New York 10048
Washington, D.C. 20549 Chicago, Illinois 60661
</TABLE>

Copies of these materials can also be obtained by mail at prescribed rates
from the Public Reference Section of the SEC, 450 Fifth Street, N.W.,
Washington, D.C. 20549 or by calling the SEC at 1-800-SEC-0330. The SEC
maintains a website that contains reports, proxy statements and other
information regarding each of us. The address of the SEC website is
http://www.sec.gov.

MyPoints has filed a registration statement under the Securities Act with
the SEC with respect to MyPoints's common stock to be issued to Cybergold
stockholders in the merger. This proxy statement/ prospectus constitutes the
prospectus of MyPoints filed as part of the registration statement. This proxy
statement/prospectus does not contain all of the information set forth in the
registration statement because certain parts of the registration statement are
omitted as provided by the rules and regulations of the SEC. You may inspect
and copy the registration statement at any of the addresses listed above.

This document does not constitute an offer to sell, or a solicitation of an
offer to purchase, the MyPoints common stock or the solicitation of a proxy, in
any jurisdiction to or from any person to whom or from whom it is unlawful to
make the offer, solicitation of an offer or proxy solicitation in that
jurisdiction. Neither the delivery of this proxy statement/prospectus nor any
distribution of securities means, under any circumstances, that there has been
no change in the information set forth or incorporated in this document by
reference or in its affairs since the date of this proxy statement/ prospectus.
The information contained in this document with respect to Cybergold and its
subsidiaries was provided by Cybergold. The information contained in this
document with respect to MyPoints was provided by MyPoints.

148
<PAGE>

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
MYPOINTS.COM, INC. FINANCIAL STATEMENTS

Report of Independent Accountants........................................ F-2

Consolidated Balance Sheets.............................................. F-3

Consolidated Statements of Operations.................................... F-4

Consolidated Statement of Stockholders' Equity........................... F-5

Consolidated Statements of Cash Flows.................................... F-6

Notes to Consolidated Financial Statements............................... F-7

MYPOINTS.COM, INC, UNAUDITED CONDENSED FINANCIAL STATEMENTS FOR
THREE MONTHS ENDED MARCH 31, 1999 AND 2000

Consolidated Balance Sheets.............................................. F-20

Consolidated Statements of Operations.................................... F-21

Consolidated Statement of Stockholders' Equity........................... F-22

Consolidated Statements of Cash Flows.................................... F-23

Notes to Consolidated Financial Statements............................... F-24

CYBERGOLD, INC. FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31,
1997, 1998 AND 1999 AND THE THREE MONTHS ENDED MARCH 31, 1999 AND 2000

Reports of Independent Public Accountants................................ F-27

Consolidated Balance Sheets.............................................. F-29

Consolidated Statements of Operations.................................... F-30

Consolidated Statement of Stockholders' Equity (Deficit)................. F-31

Consolidated Statements of Cash Flows.................................... F-32

Notes to Consolidated Financial Statements............................... F-33
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
MyPoints.com, Inc.

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, of stockholders' equity and of cash
flows present fairly, in all material respects, the financial position of
MyPoints.com, Inc. (formerly Intellipost Corporation) at December 31, 1998 and
1999, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 1999, in conformity with
accounting principles generally accepted in the United States. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform
the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for the
opinion expressed above.

/s/ PricewaterhouseCoopers LLP

January 26, 2000
San Francisco, California

F-2
<PAGE>

MYPOINTS.COM, INC.
(FORMERLY INTELLIPOST CORPORATION)

CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)

<TABLE>
<CAPTION>
December 31,
------------------
1998 1999
-------- --------
<S> <C> <C>
ASSETS
------

Current assets:
Cash and cash equivalents................................ $ 5,089 $ 21,792
Accounts receivable, net................................. 586 12,500
Unbilled receivables, net................................ 413 257
Deposits and prepaid expenses............................ 220 1,702
Other current assets..................................... -- 484
-------- --------
Total current assets.................................... 6,308 36,735
Intangible assets.......................................... 10,888 7,757
Restricted cash............................................ -- 2,208
Property and equipment, net................................ 1,041 8,891
Other assets............................................... 69 78
-------- --------
Total assets ........................................... $ 18,306 $ 55,669
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

Current liabilities:
Accounts payable and accrued liabilities................. $ 1,702 $ 13,842
Notes payable, current portion........................... 143 327
Obligations under capital leases, current portion........ 91 105
Other current liabilities................................ 479 --
Deferred revenue......................................... 631 1,873
Software license liability, current portion.............. 842 --
Points redemption liability.............................. 2,727 9,640
-------- --------
Total current liabilities............................... 6,615 25,787
Notes payable, less current portion........................ 179 932
Long-term debt............................................. 240 --
Obligations under capital leases, less current portion..... 207 97
Software license liability, less current portion........... 1,782 --
-------- --------
9,023 26,816
Commitments and contingencies (Note 10)

Stockholders' equity:
Preferred stock, $0.001 par value; 0 and 10,000,000
shares authorized at December 31, 1998 and 1999,
respectively; none issued and outstanding at December
31, 1998 and 1999....................................... -- --
Convertible preferred stock, $0.001 par value; 15,500,000
and 0 shares authorized at December 31, 1998 and 1999,
respectively; 10,388,315 and 0 shares issued and
outstanding at December 31, 1998 and 1999,
respectively............................................ 10 --
Common stock, $0.001 par value; 100,000,000 shares
authorized; 6,015,727 and 25,924,533 shares issued and
outstanding at December 31, 1998 and 1999,
respectively............................................ 6 26
Additional paid-in capital............................... 22,851 96,711
Stock subscription receivable............................ (350) --
Deferred stock-based compensation ....................... (2,012) (9,406)
Accumulated deficit ..................................... (11,222) (58,478)
-------- --------
Total stockholders' equity.............................. 9,283 28,853
-------- --------
Total liabilities and stockholders' equity............ $ 18,306 $ 55,669
======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-3
<PAGE>

MYPOINTS.COM, INC.
(FORMERLY INTELLIPOST CORPORATION)

CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)

<TABLE>
<CAPTION>
Years Ended December 31,
--------------------------
1997 1998 1999
------- ------- --------
<S> <C> <C> <C>
Revenue:
Advertising..................................... $ 151 $ 1,286 $ 23,526
License......................................... -- -- 614
------- ------- --------
Total revenue................................. 151 1,286 24,140
------- ------- --------
Cost of revenue:
Advertising..................................... 78 1,121 7,212
License......................................... -- -- 195
------- ------- --------
Total cost of revenue......................... 78 1,121 7,407
------- ------- --------
Gross profit.................................... 73 165 16,733
------- ------- --------
Operating expenses:
Technology costs................................ 560 1,520 8,665
Sales and marketing expenses.................... 1,669 4,513 30,247
General and administrative expenses............. 712 2,028 9,601
Amortization of intangible assets............... -- 275 3,116
Stock-based compensation........................ 77 158 3,054
------- ------- --------
Total operating expenses...................... 3,018 8,494 54,683
------- ------- --------
Operating loss.................................... (2,945) (8,329) (37,950)
Interest income................................... 64 87 633
Interest expense and other, net................... (8) (24) (139)
------- ------- --------
Net loss...................................... (2,889) (8,266) (37,456)
Dividend related to beneficial conversion feature
of preferred stock............................... -- -- (9,800)
------- ------- --------
Net loss attributable to common stockholders.. $(2,889) $(8,266) $(47,256)
======= ======= ========
Net loss per share:
Basic and diluted............................... $ (2.56) $ (4.37) $ (3.53)
======= ======= ========
Weighted average shares -- basic and diluted.... 1,127 1,890 13,397
======= ======= ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-4
<PAGE>

MYPOINTS.COM, INC.
(FORMERLY INTELLIPOST CORPORATION)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands)

<TABLE>
<CAPTION>
Preferred Stock
Convertible Common Stock Additional Stock Deferred
---------------- -------------- Paid-in Subscription Stock-Based Accumulated
Shares Amount Shares Amount Capital Receivable Compensation Deficit Total
------- ------- ------ ------ ---------- ------------ ------------ ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1997.........3,000..$.....3...2,500...$.3. $ 1,475 $ (2) $ -- $ (67) $ 1,412
Issuance of Series B
preferred stock for cash, net
of issuance costs of $4 ..... 500 1 496 497
Receipt of subscription
receivable from common
stock........................ 2 2
Issuance of Series C
preferred stock for cash, net
of issuance costs of $7 ..... 2,400 2 3,591 3,593
Deferred stock-based
compensation................. 465 (388) 77
Net loss..................... (2,889) (2,889)
------- ------- ------ --- ------- ------- ------- -------- --------
BALANCE, DECEMBER 31, 1997... 5,900 6 2,500 3 6,027 -- (388) (2,956) 2,692
Issuance of Series C
preferred stock for cash, net
of issuance costs of $6 ..... 527 784 784
Issuance of common stock upon
exercise of stock options ... 96 9 9
Issuance of stock options to
non-employees for services .. 13 13
Issuance of warrants to non-
employees ................... 12 12
Issuance of Series D
preferred stock for cash, net
of issuance costs of $12..... 2,748 3 5,646 (350) 5,299
Issuance of Series D
preferred stock, net of
issuance costs of $28,
pursuant to an acquisition .. 1,214 1 2,939 2,940
Issuance of common stock
pursuant to an acquisition .. 3,600 3 5,375 5,378
Issuance of stock options
pursuant to an acquisition .. 264 264
Deferred stock-based
compensation................. 1,782 (1,624) 158
Net loss..................... (8,266) (8,266)
Repurchase of common stock .. (181) --
------- ------- ------ --- ------- ------- ------- -------- --------
BALANCE, DECEMBER 31, 1998... 10,389 10 6,015 6 22,851 (350) (2,012) (11,222) 9,283
Issuance of common stock for
cash, net of issuance costs
of $1,575 ................... 5,811 6 41,199 41,205
Receipt of subscription
receivable from Series D
preferred stock.............. 350 350
Issuance of Series E
preferred stock for cash, net
of issuance costs of $50 .... 2,000 2 9,948 (9,950) --
Issuance of warrants ........ 807 807
Receipt of subscriptions
receivable from Series E
preferred stock.............. 9,950 9,950
Beneficial conversion feature
related to issuance of
preferred stock ............. (9,800) 9,800 --
Dividend related to
beneficial conversion feature
of preferred stock........... 9,800 (9,800) --
Exercise of warrants for cash
............................. 704 1 1,449 1,450
Cashless exercise of warrants
............................. 503 1 1
Exercise of stock options for
cash ........................ 478 209 209
Exercise of stock options for
note receivable ............. 25 --
Conversion of preferred stock
to common stock ............. (12,389) (12) 12,389 12 --
Net loss..................... (37,456) (37,456)
Deferred stock-based
compensation................. 10,448 (7,394) 3,054
------- ------- ------ --- ------- ------- ------- -------- --------
BALANCE AT DECEMBER 31,
1999......................... -- $ -- 25,925 $26 $96,711 $ -- $(9,406) $(58,478) $ 28,853
======= ======= ====== === ======= ======= ======= ======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-5
<PAGE>

MYPOINTS.COM, INC.
(FORMERLY INTELLIPOST CORPORATION)

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------
1997 1998 1999
-------- -------- ---------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss ..................................... $ (2,889) $ (8,266) $ (37,456)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization................. 70 555 4,901
Provision for bad debts....................... -- 60 1,228
Points redemption liability................... 519 1,732 6,913
Barter revenues, net.......................... (20) (59) 67
Issuance of stock options to non-employees
for services................................. -- 15 --
Stock-based compensation...................... 77 158 3,054
Changes in operating assets and liabilities:
Accounts receivable and unbilled
receivables.................................. (116) (639) (12,986)
Deposits and prepaid expenses................. 2 (138) (1,482)
Other assets.................................. -- (28) (61)
Accounts payable, accrued and other
liabilities.................................. 52 878 9,679
Deferred revenue.............................. -- 258 1,242
-------- -------- ---------
Net cash used in operating activities....... (2,305) (5,474) (24,901)
-------- -------- ---------
Cash flows from investing activities:
Purchase of property and equipment............ (353) (358) (7,191)
Proceeds received pursuant to acquisition..... -- 1,747 --
Restricted cash............................... -- -- (2,208)
-------- -------- ---------
Net cash (used in) provided by investing
activities................................. (353) 1,389 (9,399)
-------- -------- ---------
Cash flows from financing activities:
Proceeds from issuance of preferred stock,
net of issuance costs ....................... 4,090 6,084 10,300
Proceeds from issuance of common stock........ 2 -- 41,205
Bank overdraft................................ 54 (54) --
Borrowings under line of credit............... 100 400 --
Repayments of borrowings...................... (18) (160) (695)
Repayments of software license................ -- -- (2,624)
Principal payments under capital lease
obligations.................................. -- (53) (96)
Borrowings under capital lease line........... -- -- 1,254
Exercise of stock options..................... -- 9 209
Exercise of warrants.......................... -- -- 1,450
-------- -------- ---------
Net cash provided by financing activities... 4,228 6,226 51,003
-------- -------- ---------
Net increase in cash and cash equivalents... 1,570 2,141 16,703
Cash and cash equivalents, beginning of
period........................................ 1,378 2,948 5,089
-------- -------- ---------
Cash and cash equivalents, end of period....... $ 2,948 $ 5,089 $ 21,792
======== ======== =========
Supplemental disclosure of cash flow
information:
Cash paid during the period for interest...... $ 12 $ 34 $ 194
======== ======== =========
Noncash transactions:
Equipment acquired under capital leases....... $ 22 $ 329 $ 139
======== ======== =========
Cashless exercise of warrants................. $ -- $ -- $ 1,407
======== ======== =========
Conversion of preferred stock to common
stock........................................ $ -- $ -- $ 12
======== ======== =========
Exercise of stock options for notes
receivable................................... $ -- $ -- $ 200
======== ======== =========
Exchange of advertising services.............. $ 20 $ 128 $ 85
======== ======== =========
Issuance of capital stock for business
acquisition.................................. $ -- $ (8,582) $ --
======== ======== =========
Stock subscription receivable................. $ -- $ 350 $ --
======== ======== =========
Stock options issued to non-employees......... $ -- $ 277 $ --
======== ======== =========
Warrants issued to non-employees.............. $ -- $ 12 $ 807
======== ======== =========
Deferred stock compensation from issuance of
options...................................... $ 465 $ 1,782 $ 10,448
======== ======== =========
Disposal of fully depreciated assets.......... $ -- $ -- $ 54
======== ======== =========
Property and equipment included in accounts
payable...................................... $ -- $ -- $ 1,982
======== ======== =========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-6
<PAGE>

MYPOINTS.COM, INC.
(FORMERLY INTELLIPOST CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. The Company

MyPoints.com, Inc. (formerly Intellipost Corporation) and its wholly owned
subsidiaries (together, the "Company") was founded in November 1996. The
Company offers advertisers the ability to target internet users enrolled as
members of its direct marketing and loyalty programs. The Company's programs
award enrolled members reward points for responding to advertisements. Rewards
points may be redeemed by members for promotional awards provided by the
Company. The Company has determined that it does not have any separately
reportable business segments as of December 31, 1999.

2. Liquidity

The Company has sustained net losses and negative cash flows from operations
since its inception. The Company's ability to meet its obligations in the
ordinary course of business is dependent upon its ability to establish
profitable operations or to obtain additional funding through public or private
equity financing, collaborative or other arrangements with corporate sources,
or other sources. Management is seeking to increase revenues through continued
marketing of its services while controlling costs to meet working capital
needs.

3. Summary of Significant Accounting Policies

Principles of Consolidation

The financial statements as of December 31, 1998 and 1999 and for the years
then ended are consolidated and include the accounts of the Company and its
wholly owned subsidiaries. All significant intercompany balances and
transactions have been eliminated in the consolidation process.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of expenses during the reporting period.
Such estimates include the levels of valuation allowances for doubtful accounts
receivable, deferred taxes, points redemption liability and the value of the
Company's capital stock. Actual results could differ from those estimates, and
such differences could be material.

Cash and Cash Equivalents

Cash equivalents consist of highly liquid investments with original
maturities of three months or less.

Property and Equipment

Property and equipment are stated at cost and depreciated using the
straight-line method over their respective estimated useful lives, which range
from three to five years. Maintenance and repairs are charged to expense as
incurred, and improvements and betterments are capitalized. When assets are
retired or otherwise disposed of, the cost and accumulated depreciation and
amortization are removed from the accounts and any resulting gain or loss is
reflected in the consolidated statement of operations for the period in which
it is realized.

Intangible Assets

Intangible assets resulting from the acquisition of Enhanced Response
Technologies, Inc. ("ERT") and MotivationNet LLC ("MNet") were estimated by
management to be primarily associated with the acquired

F-7
<PAGE>

MYPOINTS.COM, INC.
(FORMERLY INTELLIPOST CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

trademark and trade name, customer base, membership base, technology license
agreement and other intangible assets. Intangible assets are amortized on a
straight-line basis over the estimated periods of benefit which, because of the
rapid technological changes occurring in the internet industry and the intense
competition for qualified internet professionals, range from six to 60 months
(see Note 4--Acquisition).

Income Taxes

The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 109, Accounting for Income Taxes.
Under SFAS No. 109, deferred tax assets and liabilities are determined based on
temporary differences between the financial statement and tax bases of assets
and liabilities and net operating loss and credit carryforwards using enacted
tax rates in effect for the year in which the differences are expected to
reverse. Valuation allowances are established when necessary to reduce deferred
tax assets to the amounts expected to be realized. A provision for income tax
expense is recognized for income taxes payable for the current period, plus the
net changes in deferred tax amounts.

Points Redemption Liability

Points redemption liability represents the estimated costs associated with
the Company's obligation to redeem outstanding points, less an allowance for
points expected to expire prior to redemption, which may be converted by
enrolled members into various third party gift certificates, frequent travel
programs, coupons and other items. Points are awarded to members when they
receive and read direct marketing offers delivered by the Company, or purchase
goods from the advertisers. The Company is liable for purchasing the rewards
provided to members, if and when such members seek to redeem accumulated points
upon reaching required redemption thresholds. The cost of points is determined
as the weighted average cost of awards that may be redeemed. Under the current
program, points are valid through December 31st of the third calendar year
following the date they are awarded to a member and may be redeemed at any time
prior to expiration. The Company bases its estimate of points that will not be
redeemed on an analysis of historical redemption activity and individual member
accounts. This analysis is updated quarterly. At December 31, 1998 and December
31, 1999, the allowance for unredeemed points was $563,000 and $2.8 million,
respectively. As of December 31, 1999 the gross points redemption liability is
$12.4 million.

Membership development costs include the cost of points awarded to members
upon initial enrollment and subsequently for responding to surveys conducted by
the Company. Costs are charged to marketing expense as incurred, and amounted
to $442,000, $764,000 and $2,274,000 for the years ended December 31, 1997,
1998 and 1999.

Revenue Recognition

The Company earns revenues from corporate advertisers by charging fees for
sending targeted email to its members. Under the terms of advertising
contracts, the Company earns revenues generally based on three components: (1)
transmission of email advertisements to enrolled members, (2) receipt of
qualified responses to email sent and (3) actual purchases of goods by members
over the internet. It is the Company's policy to recognize revenues when email
is transmitted to members, when responses are received and when the Company is
notified of purchases. Each of these activities are discrete, independent
activities, which generally are specified in the advertising sales agreement
entered into with the customer. As the earning activities take place, activity
measurement data e.g., number of emails sent, and number of responses received
is accumulated and the related revenues and unbilled receivables are recorded.
Thus, unbilled receivables are recorded as the earning activities for a
campaign are being performed.

F-8
<PAGE>

MYPOINTS.COM, INC.
(FORMERLY INTELLIPOST CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Under new and certain existing advertising contracts and partnerships, the
Company sells points to private label partners and advertisers for use in such
partners or advertisers' promotional campaigns. The Company is responsible for
redeeming member's points upon the balance reaching required thresholds and
request by the member recipients of points. Revenues and estimated point costs
under these contracts are deferred until the time points are redeemed and an
award is provided by the Company. The Company expects that sales of points will
likely represent a decreasing percentage of its business in the future, but
expects to continue to participate in the sale of points business.

On December 23, 1998, the Company entered into a license agreement to grant
a third party a limited exclusive license to use certain software technology
developed by the Company. Under the agreement the Company was required to
perform significant customization of the software. The Company accounts for the
entire agreement under Accounting Research Bulletin No. 45, Long Term
Construction-Type Contracts, using the completed-contract method. Income is
recognized upon the third party's acceptance of the software, and all costs and
related revenue are reported as deferred items in the balance sheet until that
time. During the third quarter of 1999, the Company recognized revenue under
this agreement when the custom development work was completed and accepted by
the third party.

Technology Costs

Product development costs and costs of enhancing existing products are
charged to technology costs as incurred. Software development costs are
required to be capitalized beginning when a product's technological feasibility
has been established by completion of a working model of the product, and
ending when the product is available for general release to customers. To date,
completion of a working model of the Company's products and general release
have substantially coincided. As a result, the Company has not capitalized any
software development costs since these costs have not been significant.

Business Risk and Concentration of Credit Risk

The Company has a limited operating history and its prospects are subject to
the risks, expenses and uncertainties frequently encountered by companies in
new and rapidly evolving markets for internet products and services. These
risks include the failure to develop and extend the Company's online service
brands, the rejection of the Company's services by web consumers and/or
advertisers and the inability of the Company to maintain and increase the
levels of traffic on its online services, as well as other risks and
uncertainties. Failure to address these risks successfully may have a material
adverse impact on the Company's operations and financial position.

Financial instruments that potentially subject the Company to concentrations
of credit risk consist primarily of temporary cash investments, including money
market mutual fund accounts, and accounts receivable. The Company deposits its
temporary cash investments with two financial institutions and these deposits
exceed insured amounts. The Company does not require collateral for accounts
receivable, but does evaluate customer creditworthiness and establish
allowances as necessary based on management estimates of collectibility.

Stock-based Compensation

The Company accounts for stock-based employee compensation arrangements in
accordance with provisions of Accounting Principles Board ("APB") No. 25,
Accounting for Stock Issued to Employees, and complies with the disclosure
provisions of SFAS No. 123, Accounting for Stock-Based Compensation. Under APB
No. 25, compensation expense is based on the difference, if any, on the date of
the grant, between the estimated fair value of the Company's stock and the
exercise price of options to purchase that stock.

F-9
<PAGE>

MYPOINTS.COM, INC.
(FORMERLY INTELLIPOST CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Net Loss Per Share

The Company computes net loss per share in accordance with SFAS No. 128,
Earnings per Share, and SEC Staff Accounting Bulletin ("SAB") No. 98. Under the
provisions of SFAS No. 128 and SAB No. 98, basic net income per share is
computed by dividing the net income available to common stockholders for the
period by the weighted average number of vested common shares outstanding
during the period. Diluted net income per share is computed by dividing the net
income for the period by the weighted average number of vested common and
common equivalent shares outstanding during the period. However, as the Company
generated net losses in all periods presented, common equivalent shares,
composed of incremental common shares issuable upon the exercise of stock
options and warrants and upon conversion of Series A, Series B, Series C,
Series D and Series E convertible preferred stock, are not included in diluted
net loss per share because such shares are anti-dilutive.

The following table sets forth the computation of basic and diluted net loss
per share for the periods indicated (in thousands, except per share amounts):

<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------
1997 1998 1999
-------- -------- ---------
<S> <C> <C> <C>
Numerator:
Net loss ................................. $ (2,889) $ (8,266) $ (37,456)
Dividend related to beneficial conversion
feature of preferred stock............... -- -- (9,800)
-------- -------- ---------
Net loss attributable to common
stockholders............................. $ (2,889) $ (8,266) $ (47,256)
======== ======== =========
Denominator:
Weighted average shares................... 2,500 2,856 13,964
Weighted average unvested common shares
subject to repurchase agreements......... (1,373) (966) (567)
-------- -------- ---------
Denominator for basic calculation......... 1,127 1,890 13,397
Weighted average effect of dilutive
securities:
Net effect of dilutive stock options.... -- -- --
Net effect of dilutive stock warrants... -- -- --
-------- -------- ---------
Denominator for diluted calculation....... 1,127 1,890 13,397
======== ======== =========
Net loss per share:
Basic..................................... $ (2.56) $ (4.37) $ (3.53)
======== ======== =========
Diluted................................... $ (2.56) $ (4.37) $ (3.53)
======== ======== =========
</TABLE>

Comprehensive Income

Effective January 1, 1998, the Company adopted the provisions of SFAS No.
130, Reporting Comprehensive Income. SFAS No. 130 establishes standards for
reporting comprehensive income and its components in financial statements.
Comprehensive income, as defined, includes all changes in equity (net assets)
during a period from non-owner sources. To date, the Company has not had any
transactions that are required to be reported in comprehensive income.

Recently Issued Accounting Pronouncement

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities. SFAS No. 133, as
amended by SFAS No. 137, is effective for fiscal years

F-10
<PAGE>

MYPOINTS.COM, INC.
(FORMERLY INTELLIPOST CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

beginning after June 15, 2000 and requires that all derivative instruments be
recorded on the balance sheet at fair value. Changes in the fair value of
derivatives are recorded each period in current earnings or other comprehensive
income, depending on whether a derivative is designated as part of a hedge
transaction and the type of hedge transaction. The ineffective portion of all
hedges will be recognized in earnings. MyPoints is currently assessing the
impact of this statement.

4. Acquisition

Effective November 30, 1998, the Company agreed to acquire all the
outstanding shares of MotivationNet, LLC, and Enhanced Response Technologies,
Inc., two companies operating as affiliates under common management. The
acquisition has been accounted for using the purchase method of accounting and
accordingly, the purchase price has been allocated to the tangible and
intangible assets acquired and liabilities assumed on the basis of their
relative fair values on the acquisition date. The fair value of intangible
assets was determined using a combination of the income approach and the cost
approach.

The total purchase price of approximately $13.6 million consisted of
3,600,481 shares of the Company's common stock with an estimated fair value of
approximately $5.4 million, 1,213,592 shares of the Company's Series D
preferred stock with an estimated fair value of approximately $3.0 million,
189,115 vested and 213,703 unvested shares of the Company's stock options, the
vested options having an estimated fair value of approximately $264,000,
$400,000 in cash and $4.5 million of assumed liabilities. The fair value of the
common and preferred stock was estimated by referring to (i) market
capitalization ratios of companies with comparable operations and (ii) the most
recent independent sales of the Company's stock. All vested common stock
options of the acquired companies were exchanged for 189,115 vested common
stock options of the Company and have been included in the purchase price based
on their fair value. The fair value of the vested common stock options was
estimated using the Black-Scholes model with the following weighted average
assumptions, deemed fair value of the underlying common stock of $1.49, risk-
free interest rate of 4.59%, expected life of 5 years, expected dividend rate
of 0%, and volatility rate of 109%. The 213,703 unvested shares of common stock
options were included in the Company's 1999 Stock Plan and accounted for in
accordance with APB No. 25 and related interpretations. Of the total purchase
price, $2.4 million was allocated to tangible assets and $11.2 million to
intangible assets, including a technology license agreement of $7.3 million,
purchased trademark and trade name of $1.8 million, membership base of $0.8
million, customer base of $0.5 million and workforce of $0.8 million. The
intangible assets are being amortized over their estimated useful lives of six
to 60 months.

Among the liabilities assumed in the acquisition was an obligation under a
software license agreement. According to the terms of the agreement, the
Company is to pay the licensor a royalty, payable in monthly installments of
the greater of 3.0% of monthly revenues, or $35,000, up to a maximum cumulative
royalty of $4.2 million. The Company recorded the obligation at its estimated
fair value as determined by estimated future cash payments, discounted at a
market interest rate. The Company had an option to purchase the licensed
software at the conclusion of the ten-year license term. Under the agreement,
upon the completion of an initial public offering of the Company's stock, the
Company was obligated to purchase the rights to the software. The purchase
price in this event would be the then existing present value of future required
minimum payments. In September 1999, the Company paid approximately $2.6
million to the licensor to complete the purchase of the licensed software.

Certain portions of the acquisition were structured as a tax-free exchange
of stock. Therefore, the differences between the recognized fair values of
certain acquired assets, including tangible assets, and their historical tax
bases are not deductible for tax purposes.

F-11
<PAGE>

MYPOINTS.COM, INC.
(FORMERLY INTELLIPOST CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

The following unaudited pro forma consolidated financial information
reflects the results of operations for the years ended December 31, 1997 and
1998, as if the acquisition had occurred on January 1, 1997, after giving
effect to purchase accounting adjustments. These pro forma results have been
prepared for comparative purposes only, do not purport to be indicative of what
operating results would have been had the acquisition actually taken place on
January 1, 1997, and may not be indicative of future operating results (in
thousands, except per share amounts):

<TABLE>
<CAPTION>
1997 1998
------- --------
(unaudited)
<S> <C> <C>
Revenues................................................. $ 151 $ 1,316
Operating loss........................................... (6,899) (17,826)
Net loss................................................. (6,968) (17,970)
Net loss per share:
Basic and diluted...................................... $ (1.49) $ (3.47)
Weighted average shares -- basic and diluted........... 4,677 5,185
</TABLE>

5. Related Party Transactions

A former member of the Company's Board of Directors founded Targeted
Marketing Systems, Inc., a service provider that the Company engaged for
creative services to assist in the development of the Company's marketing
program and web site. Total payments made to Targeted Marketing Systems
amounted to $223,000 in 1997 and none in 1998 or 1999. As of December 31, 1998
and 1999, there were no amounts due to Targeted Marketing Systems.

One of the Company's directors is also a member of the law firm that has
served as the Company's corporate counsel since its inception. From inception
through December 31, 1998 and 1999, the Company has incurred a total of
$227,737 and $875,000, respectively, in fees to the law firm.

The Company has entered into a two-year services agreement with Direct
Marketing Technology, Inc., a wholly owned subsidiary of Experian, a
stockholder of the Company, in which Direct Marketing Technology agreed to
provide demographic data and other services for the Company. From inception
through December 31, 1998 and December 31, 1999, the Company has incurred a
total of $0 and $226,000, respectively, in fees under this agreement.

During the year ended December 31, 1998, the Company repurchased 181,420
shares of common stock at $0.001 per share from one of its founders as a result
of his resignation.

6. Property and Equipment

Property and equipment are summarized as follows (in thousands):

<TABLE>
<CAPTION>
December 31, December 31,
1998 1999
------------ ------------
<S> <C> <C>
Computer equipment................................. $ 1,185 $ 6,852
Computer software.................................. 308 2,948
Furniture and fixtures............................. 152 720
Leasehold improvements............................. 22 405
------- --------
1,667 10,925
Accumulated depreciation........................... (626) (2,034)
------- --------
$ 1,041 $ 8,891
======= ========
</TABLE>

F-12
<PAGE>

MYPOINTS.COM, INC.
(FORMERLY INTELLIPOST CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Depreciation expense amounted to $49,000, $265,000 and $1,462,000 for the
years ended December 31, 1997, 1998 and 1999, respectively.

7. Notes Payable

On January 27, 1997, the Company entered into a promissory note with a bank
to borrow $100,000 at an interest rate of prime plus 1.5% (initial rate of
9.75%). The Company was required to make monthly payments of accrued interest
beginning in February 1997 and principal payments in 24 equal installments
beginning on July 31, 1997. The loan agreement contains certain negative
covenants including financial covenants related to minimum liquidity coverage
ratios. The loan is collateralized by all of the assets and property of the
Company.

On December 19, 1997, the Company entered into a promissory note with a bank
to borrow $400,000 at an interest rate of prime plus 0.5% (initial rate of
8.50%). The Company was required to make 36 equal payments from July 31, 1998
through June 30, 2001. The agreement contains certain negative covenants
including financial covenants related to a minimum liquidity coverage ratio and
monthly minimum points redemption liability. During 1998, the Company was in
default on the monthly minimum points redemption liability balance and the
liquidity covenant contained in the agreement. The Company obtained waivers of
the earlier violations and was in compliance with these covenants as of
December 31, 1999.

On March 26, 1999, the Company entered into a senior loan and security
agreement with a financing company. The lender has committed to finance up to
$1.5 million under this capital lease line of which borrowings of $1.1 million
were outstanding as of December 31, 1999. These capital lease agreements have
terms ranging three to five years with interest rates ranging from 7.2% to
18.0%. Borrowings against this line are collateralized by certain fixed assets
of the Company. The agreement contains certain negative covenants including
financial covenants related to minimum liquidity coverage ratios.

Annual maturities of notes payable are as follows (in thousands):

<TABLE>
<CAPTION>
Year Ending December 31,
------------------------
<S> <C>
2000........................................................... $ 327
2001........................................................... 351
2002........................................................... 327
2003........................................................... 254
------
$1,259
======
</TABLE>

8. Capital Structure

The Company is authorized to issue 100,000,000 shares of $0.001 par value
common stock and 10,000,000 shares of $0.001 par value preferred stock. The
board of directors has the authority to issue the undesignated preferred stock
in one or more series and to fix the rights, preferences, privileges and
restrictions thereof.

Warrants

During the year ended December 31, 1998, the Company issued a warrant to
purchase 10,000 shares of Series C preferred stock with an exercise price of
$1.50 to an equipment leasing company in connection with an equipment lease.
The warrant is exercisable until the later of ten years from its issuance date
or five years from the initial public offering of the Company's common stock.
The fair value of the warrant of $9,500 was estimated using the Black-Scholes
model with the following weighted average assumptions, risk-free interest rate
of 4.59%, expected life of 5 years, expected dividend rate of 0%, and
volatility rate of 109%. The

F-13
<PAGE>

MYPOINTS.COM, INC.
(FORMERLY INTELLIPOST CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

estimated fair value of the warrant is accounted for as a deferred asset and
is amortized over the lease term of 42 months. In connection with the issuance
of Series D preferred stock, the Company issued warrants to the holders of
Series D preferred stock to purchase 1,374,028 additional shares of Series D
preferred stock with an exercise price of $2.06 per share. The warrants became
exercisable three months from the closing date of the Stock Purchase Warrant
Agreement and are exercisable for a period up to five years. The Company
determined that the fair value of the warrants approximated $1.5 million on
the date of grant. The fair value of the warrants was estimated using the
Black-Scholes model with the following weighted average assumptions, risk-free
interest rate of 4.59%, expected life of five years, expected dividend rate of
0%, and volatility rate of 109%. The estimated fair value of the warrants of
$1.5 million is included in additional paid-in capital.

During May and June 1999, the Company issued warrants in connection with
commercial agreements entered into with two third parties. The warrants were
fully vested at the date of grant, enable the holders to purchase an aggregate
of 150,000 shares of the Company's common stock at a price of $8.00 per share
and are exercisable for a period of one year. The fair value of these
warrants, estimated at approximately $807,000 using the Black-Scholes
valuation model, will be charged to operations over the term of the
agreements.

Common Stock Options

The Company adopted the 1996 Stock Plan on November 7, 1996, the 1999 Stock
Plan on November 13, 1998, and the 1999 Supplemental Stock Plan on December 8,
1999 (together, the "Plans"). The Plans provide for the grant of incentive
stock options and nonstatutory stock options to employees and consultants of
the Company.

The Company has reserved 6,485,833 shares of common stock for issuance
under the Plans as of December 31, 1999. The Company has granted incentive and
nonstatutory stock options with vesting equal to either 25.0% at the first
anniversary date and 1/48th per month thereafter or 25.0% immediately with the
remainder vesting 1/48th per month thereafter. These options are exercisable
for a period of no more than ten years from the date of grant.

Following is a summary of stock option activity for the years ended
December 31, 1997, 1998 and 1999:

<TABLE>
<CAPTION>
Weighted
Outstanding Average
Share Exercise Price
----------- --------------
<S> <C> <C>
Outstanding as of January 1, 1997 -- --
Granted....................................... 687,166 $ 0.074
Exercised..................................... -- --
Canceled...................................... (2,500) 0.100
----------
Outstanding as of December 31, 1997............. 684,666 0.074
Granted....................................... 1,079,562 0.210
Exercised..................................... (96,174) 0.063
Canceled...................................... (310,696) 0.114
----------
Outstanding as of December 31, 1998............. 1,357,358 0.173
Granted....................................... 5,614,630 11.843
Exercised..................................... (503,251) 0.804
Canceled ..................................... (1,080,519) 6.441
----------
Outstanding as of December 31, 1999............. 5,388,218 11.018
==========
Options vested as of December 31, 1999 ......... 1,099,989 $ 4.811
==========
</TABLE>

F-14
<PAGE>

MYPOINTS.COM, INC.
(FORMERLY INTELLIPOST CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

The following table summarizes information about stock options outstanding
at December 31, 1998 and 1999:

<TABLE>
<CAPTION>
Options Outstanding at Options Exercisable at
December 31, 1998 December 31, 1998
--------------------------------- -------------------------
Average Weighted Weighted
Remaining Average Average
Number Contractual Exercise Number Exercise
Range of Exercise Prices Outstanding Life (Years) Price Vested Price
------------------------ ----------- ------------ -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
$0.05-$0.15............. 577,166 8.24 $ 0.084 214,214 $ 0.081
$0.20-$0.26............. 780,192 9.11 0.240 40,371 0.219
--------- ------------
1,357,358 8.74 $ 0.173 254,585 $ 0.103
========= ============

<CAPTION>
Options Outstanding at Options Exercisable at
December 31, 1999 December 31, 1999
--------------------------------- -------------------------
Average Weighted Weighted
Remaining Average Average
Number Contractual Exercise Number Exercise
Range of Exercise Prices Outstanding Life (Years) Price Vested Price
------------------------ ----------- ------------ -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
$ 0.05-$ 0.15........... 290,074 7.52 $ 0.073 265,041 $ 0.063
$ 0.20-$ 0.26........... 457,259 8.89 0.249 344,912 0.255
$ 1.00-$ 5.00........... 1,267,300 9.09 1.452 78,043 1.041
$ 8.00.................. 2,141,785 9.42 8.000 352,149 8.000
$12.37-$88.50........... 1,231,800 9.90 32.682 59,844 38.250
--------- ------------
5,388,218 $11.018 1,099,989 $ 4.811
========= ============
</TABLE>

The Company accounts for the Plans in accordance with APB No. 25 and related
Interpretations and complies with the disclosure requirements of SFAS No. 123,
Accounting for Stock-Based Compensation. In connection with certain stock
option grants during the years ended December 31, 1997, 1998 and 1999, the
Company recognized unearned compensation that is being amortized over the four-
year vesting periods of the related options. Amortization expense recognized
during the years ended December 31, 1997, 1998 and 1999 totaled $77,000,
$158,000, and $3,054,000, respectively.

In accordance with SFAS No. 123, the fair value of employee stock option
grants has been estimated on the date of grant using the minimum value model
for grants in 1997 and 1998. For grants in 1999, the fair value has been
estimated using the Black-Scholes Option Pricing Model.

The Black-Scholes Option Pricing Model was developed for use in estimating
the fair value of traded options and warrants that have no vesting restrictions
and are fully transferable. In addition, valuation models require the input of
highly subjective assumptions, including the expected stock volatility. The
Company's options have characteristics significantly different from those of
traded options, and changes in the subjective input assumptions can materially
affect the fair value estimate. Utilizing the minimum value model, the weighted
average fair value of employee stock options granted during 1997 and 1998 was
$0.53 and $2.27, respectively. Utilizing the Black-Scholes Option Pricing
Model, the weighted average fair value of employee stock options granted during
1999 was $11.59 per share.

F-15
<PAGE>

MYPOINTS.COM, INC.
(FORMERLY INTELLIPOST CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

The following assumptions were used in determining the fair value of
options granted and warrants issued:

<TABLE>
<CAPTION>
December 31,
-------------------------
1997 1998 1999
------- ------- -------
<S> <C> <C> <C>
Risk-free interest rates.......................... 5.72% 4.59% 5.17%
Expected life..................................... 5 years 5 years 5 years
Dividends......................................... -- -- --
Volatility........................................ -- -- 109%
</TABLE>

Had compensation cost for the Plans been determined based on fair value at
the grant date consistent with the method prescribed by SFAS No. 123, the
Company's net loss would have been increased to the pro forma amounts below
(in thousands):

<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------
1997 1998 1999
-------- -------- ---------
<S> <C> <C> <C>
Net loss as reported.......................... $ (2,889) $ (8,266) $ (47,256)
Net loss pro forma............................ $ (2,890) $ (8,291) $ (54,370)
</TABLE>

Other

A portion of the common stock issued to the Company's founders at inception
is subject to restricted stock purchase agreements which provide that one-
third of the Company's repurchase right lapses on the vesting start date and
1/48th of the Company's remaining repurchase right lapses at the end of the
each month thereafter. Upon a merger or sale of the Company, one-half of the
remaining shares subject to the Company's right of repurchase will become
vested.

9. Employee Benefit Plans

In February 1997, the Company established a 401(k) Savings Plan (the
"401(k) Plan") that covers substantially all employees. Under the 401(k) Plan,
employees are permitted to contribute a portion of gross compensation not to
exceed standard limitations provided by the Internal Revenue Service.
Discretionary contributions may be made by the Company; however, no
contributions have been made to date.

In March 1999, the Company adopted an employee stock purchase plan
effective on the date of the prospectus for the Company's initial public
offering. A total of 200,000 shares is reserved for issuance under the plan.

In April 1999, the Company adopted the senior management incentive plan.
The terms of this plan apply to discretionary option grants to executive
officers under the 1999 Stock Plan. In 1999, options to purchase a total of
690,000 shares with exercise prices of $8.00 per share were granted under this
senior management incentive plan.

10. Commitments and Contingencies

Leases

The Company leases office space and equipment under capital and
noncancelable operating leases with various expiration dates through the year
2004. Rent expense amounted to $57,000, $180,000 and $775,000 for the years
ended December 31, 1997, 1998 and 1999, respectively.

F-16
<PAGE>

MYPOINTS.COM, INC.
(FORMERLY INTELLIPOST CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Future minimum lease payments under noncancelable capital leases and
operating leases are as follows (in thousands):

<TABLE>
<CAPTION>
Year Ending December 31, Capital Leases Operating Leases
------------------------ -------------- ----------------
<S> <C> <C>
2000.................... $ 118 $ 1,135
2001.................... 100 2,127
2002.................... -- 2,180
2003.................... -- 2,231
2004.................... -- 2,067
Thereafter.............. -- 4,250
----- -------
Total minimum lease
payments................. 218 $13,990
=======
Less amount representing
interest................. 16
-----
Present value of capital
lease obligations........ 202
Less current portion...... 105
-----
Long-term portion......... $ 97
=====
</TABLE>

Legal

The Company has received three claims of alleged infringement. In October
1998, the Company was notified by an online incentives company that it believes
the Company was infringing its patent rights. The Company has entered into a
settlement agreement with the third party, which provides for an upfront
payment of approximately $65,000 plus ongoing royalties based on a percentage
of the value of points issued to members. A second claim was made by a third
party and the Company is currently in the process of negotiating the settlement
of this claim. If the claim cannot be resolved through a license or similar
arrangement, the Company could become party to litigation. Also, in July 1999,
the Company received an infringement claim from a third party, along with an
offer to grant a license to the Company at a cost that would not be material.
To the Company's knowledge, no litigation has been filed based on this claim.

In the normal course of business, the Company is at times subject to pending
and threatened legal actions and proceedings. After reviewing pending and
threatened actions and proceedings with counsel, management believes that the
outcome of such actions or proceedings is not expected to have a material
adverse effect on the financial position or results of operations of the
Company.

11. Income Taxes

As of December 31, 1998 and December 31, 1999, the Company had net operating
loss carryforwards of approximately $7,810,000 and $27,332,000 for federal
income tax purposes, and $7,820,000 and $27,371,000 for state income tax
purposes, respectively. The federal and state net operating loss carryforwards
begin to expire in the years 2011 and 2004, respectively.

The Company's ability to utilize its net operating loss carryforwards to
offset any future taxable income may be restricted as a result of equity
transactions that give rise to changes in ownership as defined in the Tax
Reform Act of 1986. These restrictions may limit, on an annual basis, the
Company's future use of its net operating loss carryforwards and research and
experimentation credit carryforwards.

F-17
<PAGE>

MYPOINTS.COM, INC.
(FORMERLY INTELLIPOST CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

A reconciliation of the provision for income taxes to the federal statutory
rate of 34% is as follows:

<TABLE>
<CAPTION>
Years Ended December 31,
------------------------------
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Tax at statutory rate... 34% 34% 34%
State taxes, net of
federal benefit........ 6 6 6
Permanent differences... (2) (1) (2)
Valuation allowance..... (38) (39) (38)
-------- -------- --------
-- -- --
======== ======== ========
</TABLE>

The estimated tax effects of significant temporary differences and
carryforwards that give rise to deferred income tax assets are as follows (in
thousands):

<TABLE>
<CAPTION>
December 31, December 31,
1998 1999
------------ ------------
<S> <C> <C>
Non-deducted start-up costs....................... $ 303 $ 205
Net operating loss carryforwards.................. 3,177 10,890
Non-deducted research and experimental costs ..... 1,328 430
Points redemption liability....................... 1,185 4,270
Accrued liabilities and other..................... 106 2,045
Non-deducted intangible assets.................... (834) (1,250)
------ -------
Gross deferred tax assets......................... 5,265 16,590
Valuation allowance............................... (5,265) (16,590)
------ -------
Net deferred tax assets........................... $ -- $ --
====== =======
</TABLE>

The Company has recorded a valuation allowance against gross deferred tax
assets due to uncertainties surrounding their realization. The change in the
valuation allowance amounted to $4,039,000 and $11,325,000 in 1998 and 1999,
respectively.

12. Points Redemption Liability

Following is a summary of points redemption liability activity for the years
ended December 31, 1997, 1998 and 1999:

<TABLE>
<S> <C>
Outstanding as of January 1, 1997................................... $ --
Accrual for new points redemption liability......................... 519
Allowance for unredeemed points..................................... --
Points redemption................................................... --
-------
Outstanding as of December 31, 1997................................. 519
Accrual for new points redemption liability......................... 2,825
Allowance for unredeemed points..................................... (563)
Points redemption................................................... (54)
-------
Outstanding as of December 31, 1998................................. 2,727
Accrual for new points redemption liability......................... 11,372
Allowance for unredeemed points..................................... (2,212)
Points redemption................................................... (2,247)
-------
Outstanding as of December 31, 1999................................. $ 9,640
=======
</TABLE>

F-18
<PAGE>

MYPOINTS.COM, INC.
(FORMERLY INTELLIPOST CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

13. Initial Public Offering

On August 19, 1999, the Securities and Exchange Commission declared
effective the Company's Registration Statement on Form S-1. Pursuant to this
Registration Statement, the Company completed an initial public offering of
5,750,000 shares of its common stock (including 750,000 shares sold pursuant to
the exercise of the Underwriters' over-allotment option) at an initial public
offering price of $8.00 per share ("the Offering"). The Offering was managed by
BancBoston Robertson Stephens, Bear, Stearns & Co. Inc., Salomon Smith Barney,
and Wit Capital Corporation. Proceeds to the Company, after calculation of the
underwriters discount and commission, from the Offering totaled approximately
$41.2 million, net of offering costs of approximately $1.6 million.

Upon completion of the Offering, the Company's preferred stock was converted
into 12,388,316 shares of common stock, and all outstanding shares of preferred
stock were cancelled and retired. Upon conversion of the preferred stock, all
rights to accrued and unpaid dividends were waived.

14. Subsequent Event

Effective January 13, 2000, the Company acquired all the outstanding shares
of Alliance Development Group, Inc., a company that operates offline customer
rewards programs. The acquisition will be accounted for using the purchase
method of accounting and, accordingly, the purchase price will be allocated to
the tangible and intangible assets acquired and liabilities assumed on the
basis of their relative fair values on the acquisition date.

The total purchase price of $16.7 million included 270,000 shares of the
Company's common stock with an estimated fair value of $16.5 million. Of the
total purchase price, $1.9 million was allocated to tangible assets and $14.8
million was allocated to intangible assets. The Company expects to amortize the
intangible assets over their estimated useful lives of one to eight years.

The following unaudited pro forma consolidated financial information
reflects the results of operations for the years ended December 31, 1998 and
1999, as if the acquisition had occurred on January 1, 1998, after giving
effect to purchase accounting adjustments. These pro forma results have been
prepared for comparative purposes only, and do not purport to be indicative of
what operating results would have been had the acquisition actually taken place
on January 1, 1998 and may not be indicative of future operating results (in
thousands, except per share amounts):

<TABLE>
<CAPTION>
1998 1999
-------- --------
<S> <C> <C>
Revenues $ 5,035 $ 26,982
Operating loss.......................................... (11,180) (40,897)
Net loss................................................ (11,082) (38,310)
Net loss attributable to common stockholders............ (11,082) (48,110)
Net loss per share:
Basic and diluted..................................... $ (5.13) $ (3.52)
Weighted average shares -- basic and diluted.......... 2,160 13,667
</TABLE>

F-19
<PAGE>

MYPOINTS.COM, INC.

CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)

<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
----------- ------------
(unaudited)
<S> <C> <C>
ASSETS
------
Current assets:
Cash and cash equivalents........................... $ 116,392 $ 21,792
Accounts receivable, net............................ 15,922 12,500
Unbilled receivables, net........................... 577 257
Notes and interest receivable....................... 1,996 --
Deposits and prepaid expenses....................... 1,983 1,702
Other current assets................................ 495 484
--------- --------
Total current assets............................... 137,365 36,735
Intangible assets..................................... 21,390 7,757
Restricted cash....................................... 2,508 2,208
Property and equipment, net........................... 9,901 8,891
Other assets.......................................... 78 78
--------- --------
Total assets....................................... $ 171,242 $ 55,669
========= ========

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable and accrued liabilities............ $ 14,004 $ 13,842
Notes payable, current portion...................... 326 327
Obligations under capital leases, current portion... 112 105
Deferred revenue.................................... 1,636 1,873
Points redemption liability......................... 11,458 9,640
--------- --------
Total current liabilities.......................... 27,536 25,787
Notes payable, less current portion................... 836 932
Obligations under capital leases, less current
portion.............................................. 71 97
--------- --------
28,443 26,816
Commitments and Contingencies

Stockholders' equity:
Preferred stock, $0.001 par value, 10,000,000 shares
authorized, 0 shares issued and outstanding at
March 31, 2000 and December 31, 1999............... -- --
Common stock, $.001 par value; 100,000,000 shares
authorized, 29,129,721 and 25,924,533 shares issued
and outstanding at March 31, 2000 and December 31,
1999, respectively................................. 29 26
Additional paid-in capital.......................... 220,428 96,711
Deferred compensation............................... (8,306) (9,406)
Accumulated deficit................................. (69,352) (58,478)
--------- --------
Total stockholders' equity......................... 142,799 28,853
--------- --------
Total liabilities and stockholders' equity....... $ 171,242 $ 55,669
========= ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-20
<PAGE>

MYPOINTS.COM, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)

<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------
2000 1999
--------- ---------
<S> <C> <C>
Revenues................................................ $ 15,822 $ 1,275
Cost of revenues........................................ 4,113 878
--------- ---------
Gross profit.......................................... 11,709 397
--------- ---------
Operating expenses:
Technology costs...................................... 5,276 968
Sales and marketing expenses.......................... 11,393 2,564
General and administrative expenses................... 4,400 1,074
Amortization of intangible assets..................... 1,177 832
Stock-based compensation.............................. 1,100 449
--------- ---------
Total operating expenses............................ 23,346 5,887
--------- ---------
Operating loss.......................................... (11,637) (5,490)
Interest income......................................... 816 9
Interest expense and other, net......................... (53) --
--------- ---------
Net loss............................................ (10,874) (5,481)
Dividend related to the beneficial conversion feature of
preferred stock........................................ -- (9,800)
--------- ---------
Net loss attributable to common stockholders........ $ (10,874) $ (15,281)
========= =========
Net loss per share:
Basic and diluted..................................... $ (0.40) $ (3.00)
========= =========
Weighted average shares -- basic and diluted.......... 26,872 5,097
========= =========
Pro forma net loss per share:
Basic and diluted..................................... $ (0.40) $ (0.35)
========= =========
Weighted average shares -- basic and diluted.......... 26,872 15,485
========= =========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-21
<PAGE>

MYPOINTS.COM, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(In thousands)
(Unaudited)

<TABLE>
<CAPTION>
Preferred
Stock Common Stock Additional
------------- ------------- Paid-in Deferred Accumulated
Shares Amount Shares Amount Capital Compensation Deficit Total
------ ------ ------ ------ ---------- ------------ ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31,
1999................... -- $ -- 25,925 $ 26 $ 96,711 $ (9,406) $ (58,478) $ 28,853
Issuance of common stock
for cash,
net of issuance costs
of $760................ 2,450 2 106,151 106,153
Issuance of common stock
pursuant to acquisition
of ADG................. 270 16,562 16,562
Exercise of stock
options for cash....... 485 1 1,004 1,005
Net loss................ (10,874) (10,874)
Amortization of deferred
compensation........... 1,100 1,100
---- ----- ------ ---- -------- -------- --------- --------
Balance at March 31,
2000................... -- $ -- 29,130 $ 29 $220,428 $ (8,306) $ (69,352) $142,799
==== ===== ====== ==== ======== ======== ========= ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-22
<PAGE>

MYPOINTS.COM, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------
2000 1999
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net loss.............................................. $ (10,874) $ (5,481)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization......................... 2,570 964
Provision for bad debts............................... 805 185
Points redemption liability........................... 1,818 1,113
Barter revenues, net.................................. -- 67
Stock-based compensation.............................. 1,100 449
Changes in operating assets and liabilities:
Accounts receivable and unbilled receivables.......... (3,967) (469)
Notes and interest receivable......................... (170) --
Deposits and prepaid expenses......................... (374) (386)
Other assets.......................................... -- (26)
Accounts payable, accrued and other liabilities....... (625) 534
Deferred revenue...................................... (237) 597
--------- ---------
Net cash used in operating activities............... (9,954) (2,453)
--------- ---------

Cash flows from investing activities:
Purchase of property and equipment.................... (2,013) (1,076)
Acquisition of ADG, net of cash acquired.............. (175) --
Deposit of restricted cash............................ (300) --
--------- ---------
Net cash used in investing activities............... (2,488) (1,076)
--------- ---------

Cash flows from financing activities:
Proceeds from issuance of common stock, net........... 106,153 --
Repayment of borrowings under line of credit.......... -- (42)
Repayments of borrowings.............................. (97) --
Principal payments under capital lease obligations.... (19) (12)
Proceeds from exercise of stock options............... 1,005 12
Receipt of subscription receivable.................... -- 350
--------- ---------
Net cash provided by financing activities........... 107,042 308
--------- ---------
Net increase in cash and cash equivalents........... 94,600 (3,221)
Cash and cash equivalents, beginning of period.......... 21,792 5,089
--------- ---------
Cash and cash equivalents, end of period................ $ 116,392 $ 1,868
========= =========
Supplemental disclosure of cash flow information:
Cash paid during the period for interest.............. $ 53 $ 11
========= =========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-23
<PAGE>

MYPOINTS.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1. Basis of Presentation

The accompanying unaudited consolidated financial statements include the
accounts of MyPoints.com, Inc. and its wholly owned subsidiaries ("the
Company"), and, in the opinion of management, reflect all adjustments
(consisting only of normal recurring adjustments) necessary to fairly state the
Company's consolidated financial position, results of operations, and cash
flows as of and for the dates and periods presented. The consolidated balance
sheet as of December 31, 1999 has been prepared from the audited consolidated
financial statements of the Company.

These unaudited consolidated financial statements should be read in
conjunction with the Company's audited consolidated financial statements
included in its Form 10-K filed with the Securities and Exchange Commission on
March 30, 2000. The results of operations for the three month period ended
March 31, 2000 are not necessarily indicative of results for the entire fiscal
year ending December 31, 2000.

2. Summary of Significant Accounting Policies

Revenue Recognition

The Company earns revenues from corporate advertisers by charging fees for
sending targeted email to its members. Under the terms of advertising
contracts, the Company earns revenues generally based on three components: (1)
transmission of email advertisements to enrolled members, (2) receipt of
qualified responses to email sent and (3) actual purchases of goods by members
over the internet. It is the Company's policy to recognize revenues when email
is transmitted to members, when responses are received and when the Company is
notified of purchases. Each of these activities are discrete, independent
activities, which generally are specified in the advertising sales agreement
entered into with the customer. As the earning activities take place, activity
measurement data (e.g., number of emails sent, and number of responses
received) is accumulated and the related revenues and unbilled receivables are
recorded. Thus, unbilled receivables are recorded as the earning activities for
a campaign are being performed.

Under new and certain existing advertising contracts and partnerships, the
Company sells points to private label partners and to advertisers for use in
such partner's or advertiser's promotional campaigns . The Company is
responsible for redeeming a member's points upon the balance reaching required
thresholds and request by the member recipients of points. Revenues and
estimated point costs under these contracts are deferred until the time points
are redeemed and an award is provided by the Company. The Company expects that
sales of points will likely represent a decreasing percentage of its business
in the future but has continued to participate in the sale of points business.

3. Points Redemption Liability

Points redemption liability represents the estimated costs associated with
the Company's obligation to redeem outstanding points, less an allowance for
points expected to expire prior to redemption, which may be converted by
enrolled members into various third party gift certificates, frequent travel
programs, coupons and other awards. Points are awarded to members when they
respond to direct marketing offers delivered by the Company, or purchase goods
from the advertisers. The Company is liable for purchasing the rewards provided
to members, if and when such members seek to redeem accumulated points upon
reaching required redemption thresholds. The liability for the cost of points
is estimated based upon the weighted average cost of awards that may be
redeemed in the future. The liability is based upon redemption cost trends and
management estimates of future point redemption costs. Under the current
program, points are valid through December 31st of the third calendar year
following the date they are awarded to a member and may be redeemed at any time
prior to
expiration. The Company bases its estimate of points that will not be redeemed
on an analysis of historical

F-24
<PAGE>

MYPOINTS.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
(Unaudited)

point earning trends, redemption activity and individual member accounts. This
analysis is updated quarterly. At December 31, 1999 and March 31, 2000, the
allowance for unredeemed points was $ 2.8 million and $2.9 million ( unaudited
) respectively. As of March 31, 2000, the gross points redemption liability was
$14.4 million ( unaudited).

Following is a summary of points redemption liability activity for the three
months ended March 31, 2000 and 1999 (in thousands):

<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------
2000 1999
--------- ---------
(Unaudited)
<S> <C> <C>
Outstanding at beginning of period..................... $ 9,640 $ 2,727
Accrual for new point redemption liability............. 3,876 2,006
Allowance for unredeemed points........................ (266) (839)
Points redemption...................................... (1,792) (54)
--------- ---------
Outstanding at end of period........................... $ 11,458 $ 3,840
========= =========
</TABLE>

4. Net Loss Per Share

The Company computes net loss per share in accordance with SFAS No. 128,
Earnings per Share, and SEC Staff Accounting Bulletin ("SAB") No. 98. Under the
provisions of SFAS No. 128 and SAB No. 98, basic net income per share is
computed by dividing the net income available to common stockholders for the
period by the weighted average number of vested common shares outstanding
during the period. Diluted net income per share is computed by dividing the net
income for the period by the weighted average number of vested common and
common equivalent shares outstanding during the period. However, as the Company
has generated net losses in all periods presented, common equivalent shares,
composed of incremental common shares issuable upon the exercise of stock
options and warrants and upon conversion of Series A, Series B, Series C,
Series D and Series E convertible preferred stock, are not included in diluted
net loss per share (prior to conversion on August 19, 1999) because such shares
are anti-dilutive.

F-25
<PAGE>

MYPOINTS.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
(Unaudited)

The following table sets forth the computation of basic and diluted net loss
per share for the periods indicated (in thousands, except per share amounts):

<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------
2000 1999
--------- ---------
(Unaudited)
<S> <C> <C>
Numerator:
Net loss........................................... $ (10,874) $ (5,481)
Dividend related to beneficial conversion feature
of preferred stock................................ -- (9,800)
--------- ---------
Net loss available to common stockholders.......... $ (10,874) $ (15,281)
========= =========
Denominator:
Weighted average shares............................ 27,177 6,039
Weighted average unvested common shares subject to
repurchase agreements............................. (305) (942)
--------- ---------
Denominator for basic calculation.................. 26,872 5,097
Weighted average effect of dilutive securities:....
Net effect of dilutive stock options............. -- --
Net effect of dilutive stock warrants............ -- --
--------- ---------
Denominator for diluted calculation................ 26,872 5,097
========= =========
Net loss per share:
Basic.............................................. $ (0.40) $ (3.00)
========= =========
Diluted............................................ $ (0.40) $ (3.00)
========= =========
</TABLE>

Pro forma net loss per share (presented earlier) has been computed by
dividing net loss applicable to common shareholders by the pro forma weighted
average number of shares outstanding. Pro forma weighted average shares assume
the conversion of all preferred stock (which were ultimately converted to
common stock in conjunction with the initial public offering, as if the
conversion occurred at the beginning of the period or at date of issuance, if
later).

5. Acquisition

On January 12, 2000, the Company agreed to acquire all the outstanding
shares of Alliance Development Group, Inc. ("ADG"). ADG operates offline
customer reward programs including rewards based credit card loyalty programs.
The total purchase price of approximately $16.7 million included 270,000 shares
of the Company's common stock with an estimated fair value of $16.6 million
based upon its value at the closing of the transaction. Following the
acquisition, ADG is now a wholly owned subsidiary of the Company.

6. Subsequent Event

On April 17, 2000, the Company agreed to acquire Cybergold, Inc. in a tax-
free, stock-for-stock, fixed-share transaction wherein each share of Cybergold
will be exchanged for 0.4800 shares of the Company. Based on closing prices on
April 14, 2000, the transaction is valued at approximately $157 million. The
acquisition is scheduled to close in the third quarter of 2000.

F-26
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of
Cybergold, Inc.:

We have audited the accompanying consolidated balance sheets of Cybergold,
Inc. (a Delaware corporation) as of December 31, 1998 and 1999, and the related
consolidated statements of operations, stockholders' equity (deficit) and cash
flows for each of the three years in the period ended December 31, 1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. We did not audit the financial statements of itarget.com, a company
acquired on March 29, 2000 in a transaction accounted for as a pooling of
interests, as discussed in Note 10. Such statements are included in the
consolidated financial statements of Cybergold, Inc. and reflect total assets
and total net loss of 1% and 2%, and 1% and 17%, respectively, of the related
1998 and 1999 consolidated totals. These statements were audited by other
auditors whose report has been furnished to us, and our opinion, insofar as it
relates to the amounts included for itarget.com, is based solely on the report
of the other auditors.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits and the report of
other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the report of other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Cybergold, Inc. as of December 31,
1998 and 1999, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 1999, in conformity with
accounting principles generally accepted in the United States.

Arthur Andersen LLP

San Francisco, California
June 9, 2000

F-27
<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Stockholders
itarget.com

We have audited the accompanying balance sheet of itarget.com as of December
31, 1999, and the related consolidated statements of operations, stockholders'
deficit, and cash flows for the year then ended and the period from June 3,
1998 (Inception) to December 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of itarget.com as of December
31, 1999, and the results of its operations and its cash flows for the year
then ended and the period from June 3, 1998 (Inception) to December 31, 1998 in
conformity with generally accepted accounting principles.

SINGER LEWAK GREENBAUM & GOLDSTEIN LLP

Los Angeles, California
January 21, 2000 (except for the
last paragraph of Note 10, as to
which the date is March 29, 2000)

F-28
<PAGE>

CYBERGOLD, INC.

CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)

<TABLE>
<CAPTION>
December 31,
------------------ March 31,
1998 1999 2000
-------- -------- -----------
(unaudited)
<S> <C> <C> <C>
ASSETS

Current Assets:
Cash and cash equivalents..................... $ 3,181 $ 17,265 $ 16,107
Short-term investments........................ -- 27,822 23,442
Accounts receivable, less allowance for
doubtful accounts of $30, $171 and $294,
respectively................................. 398 1,799 3,233
Prepaid expenses and other current assets..... 26 709 1,061
-------- -------- --------
Total current assets........................ 3,605 47,595 43,843
Property and equipment, net................... 407 1,307 1,475
Intangible assets, net........................ 10 317 176
Deposits and other assets..................... 71 134 147
-------- -------- --------
Total assets................................ $ 4,093 $ 49,353 $ 45,641
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
Accounts payable.............................. $ 301 $ 1,308 $ 1,820
Related party payable......................... -- 255 255
Capital lease obligations, current
maturities................................... 136 136 126
Notes payable, current maturities............. -- 65 87
Members payable............................... 822 2,201 2,853
Membership acquisition payable................ 176 625 591
Accrued liabilities........................... 145 1,271 2,534
Deferred revenue.............................. 202 643 666
-------- -------- --------
Total current liabilities................... 1,782 6,504 8,932
Capital lease obligations, net of current
maturities.................................... 226 90 63
Notes payable, net of current maturities....... -- 299 268
-------- -------- --------
Total liabilities........................... 2,008 6,893 9,263

Commitments and contingencies

Convertible Redeemable Preferred Stock:
Series C, 0.00015 par value: 5,333,353,
5,333,353, and 0 shares authorized,
respectively; 4,189,195, 0, and 0 issued and
outstanding shares at December 31, 1998,
1999, and March 31, 2000, respectively
(preference in liquidation of $5,718,251).... 6,379 -- --
-------- -------- --------
Total convertible redeemable preferred
stock...................................... 6,379 -- --
Stockholders' Equity (deficit):
Series A convertible preferred stock, 0.00015
par value:
Authorized shares -- 2,123,333, 2,123,333,
and 0, respectively; Issued and outstanding
shares -- 2,000,000, 0, and 0,
respectively............................... -- -- --
Preference in liquidation -- $3,000,000
Series B convertible preferred stock, 0.00015
par value:
Authorized shares -- 1,429,981, 1,429,981,
and 0, respectively; Issued and outstanding
shares -- 1,394,981, 0, and 0,
respectively............................... -- -- --
Preference in liquidation -- $4,184,942
Series A preferred stock -- itarget.com, 0.01
par value:
Authorized shares -- 0, 208,321, and 0,
respectively; Issued and outstanding
shares -- 0, 208,321, and 0,
respectively............................... -- -- --
Preference in liquidation -- $1,000,000
Series B preferred stock -- itarget.com, 0.01
par value:
Authorized shares -- 0, 754,950, and 0,
respectively; Issued and outstanding
shares -- 0, 126,781, and 0,
respectively............................... -- -- --
Preference in liquidation -- $1,100,045
Common stock, 0.00015 par value:
Authorized shares -- 14,446,667, 75,000,000,
and 75,000,000, respectively; Issued and
outstanding shares -- 5,130,273,
20,525,235, and 21,402,136, respectively... 1 3 3
Additional paid-in capital.................... 8,641 69,647 71,485
Deferred compensation......................... (767) (1,313) (1,200)
Retained earnings (deficit)................... (12,169) (25,877) (33,793)
Unrealized loss on short term investments..... -- -- (117)
-------- -------- --------
Total stockholders' equity (deficit)...... (4,294) 42,460 36,378
-------- -------- --------
Total liabilities and stockholders' equity
(deficit)................................ $ 4,093 $ 49,353 $ 45,641
======== ======== ========
</TABLE>

The accompanying notes are an integral part of these statements.

F-29
<PAGE>

CYBERGOLD, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

<TABLE>
<CAPTION>
Three Months
Year Ended December 31, Ended March 31,
-------------------------- ----------------
1997 1998 1999 1999 2000
------- ------- -------- ------- -------
(unaudited)
<S> <C> <C> <C> <C> <C>
Revenues:
Transaction................... $ 457 $ 628 $ 3,316 $ 333 $ 2,269
Custom marketing services and
other........................ 74 377 2,167 170 2,021
------- ------- -------- ------- -------
Total revenues.............. 531 1,005 5,483 503 4,290
------- ------- -------- ------- -------
Cost of Revenues:
Transaction................... 256 293 1,594 159 1,094
Custom marketing services and
other........................ 37 173 334 85 78
------- ------- -------- ------- -------
Total cost of revenues...... 293 466 1,928 244 1,172
------- ------- -------- ------- -------
Gross margin................ 238 539 3,555 259 3,118
------- ------- -------- ------- -------
Operating Expenses:
Product development........... 1,190 1,726 3,187 513 1,630
Sales and marketing........... 2,162 2,695 9,158 1,024 5,410
General and administrative.... 740 814 3,352 307 2,302
itarget acquisition costs..... -- -- -- -- 2,142
Amortization of deferred
compensation................. -- 198 735 327 113
------- ------- -------- ------- -------
Total operating expenses.... 4,092 5,433 16,432 2,171 11,597
------- ------- -------- ------- -------
Loss from operations........ (3,854) (4,894) (12,877) (1,912) (8,479)
Interest Income (Expense), net.. (15) 78 740 11 563
------- ------- -------- ------- -------
Net loss.................... (3,869) (4,816) (12,137) (1,901) (7,916)
Dividend Attributable to
Preferred Stockholders......... -- (660) (1,571) (283) --
------- ------- -------- ------- -------
Net Loss Attributable to Common
Stockholders................... (3,869) (5,476) (13,708) (2,184) (7,916)
Other comprehensive loss...... -- -- -- -- (117)
------- ------- -------- ------- -------
Comprehensive loss.............. $(3,869) $(5,476) $(13,708) $(2,184) $(8,033)
======= ======= ======== ======= =======
Net Loss Per Common Share:
Basic and diluted............. $ (0.97) $ (1.18) $ (1.45) $ (0.42) $ (0.38)
======= ======= ======== ======= =======
Weighted Average Common Shares
Outstanding:
Basic and diluted............. 3,979 4,648 9,464 5,175 20,642
======= ======= ======== ======= =======
</TABLE>

The accompanying notes are an integral part of these statements.

F-30
<PAGE>

CYBERGOLD, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
Preferred Stock Preferred Stock -- itarget.com
-------------------------------------- ----------------------------------
Series A Series B Series A Series B Common Stock Additional
------------------ ------------------ ---------------- ---------------- ------------------ Paid-in
Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Capital
---------- ------ ---------- ------ -------- ------ -------- ------ ---------- ------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance,
December 31,
1996............ 2,000,000 $ 300 -- $ -- -- $ -- -- $ -- 3,780,000 $ 567 $ 3,163,858
Issuance of
Series B
preferred
stock.......... -- -- 1,378,314 207 -- -- -- -- -- -- 4,134,732
Exercise of
common stock
options........ -- -- -- -- -- -- -- -- 270,375 41 15,644
Repurchase of
stock options.. -- -- -- -- -- -- -- -- (38,333) (6) (4,157)
Imputed
compensation... -- -- -- -- -- -- -- -- -- -- 125,000
Net loss........ -- -- -- -- -- -- -- -- -- -- --
---------- ----- ---------- ----- -------- ----- -------- ------ ---------- ------ -----------
Balance,
December 31,
1997............ 2,000,000 300 1,378,314 207 -- -- -- -- 4,012,042 602 7,435,077
Issuance of
Series B
preferred
stock.......... -- -- 16,667 2 -- -- -- -- -- -- 49,998
Issuance of
common stock... -- -- -- -- -- -- -- -- 1,082,095 162 29,838
Accretion of
Series C
redemption
premium........ -- -- -- -- -- -- -- -- -- -- --
Exercise of
common stock
options........ -- -- -- -- -- -- -- -- 61,761 9 10,820
Repurchase of
stock options.. -- -- -- -- -- -- -- -- (25,625) (4) (380)
Deferred
compensation... -- -- -- -- -- -- -- -- -- -- 965,571
Amortization of
deferred
compensation... -- -- -- -- -- -- -- -- -- -- --
Imputed
compensation... -- -- -- -- -- -- -- -- -- -- 150,000
Net loss........ -- -- -- -- -- -- -- -- -- -- --
---------- ----- ---------- ----- -------- ----- -------- ------ ---------- ------ -----------
Balance,
December 31,
1998............ 2,000,000 300 1,394,981 209 -- -- -- -- 5,130,273 769 8,640,924
Accretion of
Series C
redemption
premium........ -- -- -- -- -- -- -- -- -- -- --
Accretion of
Series D
redemption
premium........ -- -- -- -- -- -- -- -- -- -- --
Issuance of
common stock... -- -- -- -- -- -- -- -- 117,646 18 42,181
Issuance of
Series A
preferred --
itarget....... -- -- -- -- 208,321 414 -- -- -- -- 999,586
Issuance of
Series B
preferred --
itarget....... -- -- -- -- -- -- 126,781 252 -- -- 921,263
Exercise of
common stock
options........ -- -- -- -- -- -- -- -- 339,718 50 46,857
Deferred
compensation... -- -- -- -- -- -- -- -- -- -- 1,279,995
Amortization of
deferred
compensation... -- -- -- -- -- -- -- -- -- -- --
IPO proceeds,
net of
$1,161,949 of
issuance
costs.......... -- -- -- -- -- -- -- -- 5,000,000 750 40,696,256
Exercise of
warrants....... -- -- -- -- -- -- -- -- 302,140 46 987,954
Imputed
compensation... -- -- -- -- -- -- -- -- -- -- 83,333
Conversion of
Series A
preferred...... (2,000,000) (300) -- -- -- -- -- -- 2,000,000 300 --
Conversion of
Series B
preferred...... -- -- (1,394,981) (209) -- -- -- -- 1,394,981 209 --
Conversion of
Series C
preferred...... -- -- -- -- -- -- -- -- 4,189,195 628 5,717,621
Conversion of
Series D
preferred...... -- -- -- -- -- -- -- -- 2,051,282 308 7,999,692
Conversion of
Series C
accretion...... -- -- -- -- -- -- -- -- -- -- 1,759,330
Conversion of
Series D
accretion...... -- -- -- -- -- -- -- -- -- -- 471,407
Net loss........ -- -- -- -- -- -- -- -- -- -- --
---------- ----- ---------- ----- -------- ----- -------- ------ ---------- ------ -----------
Balance,
December 31,
1999............ -- -- -- -- 208,321 414 126,781 252 20,525,235 3,078 69,646,399
Exercise of
common stock
options........ -- -- -- -- -- -- -- -- 261,875 39 211,511
Exercise of
warrants ...... 13,351 2 10,025
Issuance of
Series
B preferred --
itarget.com... -- -- -- -- -- -- 266,573 2,666 -- -- 1,613,540
Conversion of
Series
A preferred --
itarget.com... -- -- -- -- (208,321) (414) -- -- 208,321 71 343
Conversion of
Series B
preferred --
itarget.com... -- -- -- -- -- -- (393,354) (2,918) 393,354 59 2,859
Amortization of
deferred
compensation... -- -- -- -- -- -- -- -- -- -- --
Unrealized loss
on marketable
securities..... -- -- -- -- -- -- -- -- -- -- --
Net loss........ -- -- -- -- -- -- -- -- -- -- --
---------- ----- ---------- ----- -------- ----- -------- ------ ---------- ------ -----------
Balance, March
31, 2000
(unaudited)..... -- $ -- -- $ -- -- $ -- -- $ -- 21,402,136 $3,249 $71,484,677
========== ===== ========== ===== ======== ===== ======== ====== ========== ====== ===========
<CAPTION>
Unrealized
Deferred Loss on
Compen- Retained Short-Term
sation Deficit Investments Total
------------ ------------- ----------- ------------
<S> <C> <C> <C> <C>
Balance,
December 31,
1996............ $ -- $ (2,823,823) -- $ 340,902
Issuance of
Series B
preferred
stock.......... -- -- -- 4,134,939
Exercise of
common stock
options........ -- -- -- 15,685
Repurchase of
stock options.. -- -- -- (4,163)
Imputed
compensation... -- -- -- 125,000
Net loss........ -- (3,869,323) -- (3,869,323)
------------ ------------- ----------- ------------
Balance,
December 31,
1997............ -- (6,693,146) -- 743,040
Issuance of
Series B
preferred
stock.......... -- -- -- 50,000
Issuance of
common stock... -- -- -- 30,000
Accretion of
Series C
redemption
premium........ -- (660,430) -- (660,430)
Exercise of
common stock
options........ -- -- -- 10,829
Repurchase of
stock options.. -- -- -- (384)
Deferred
compensation... (965,571) -- -- --
Amortization of
deferred
compensation... 198,288 -- -- 198,288
Imputed
compensation... -- -- -- 150,000
Net loss........ -- (4,815,213) -- (4,815,213)
------------ ------------- ----------- ------------
Balance,
December 31,
1998............ (767,283) (12,168,789) -- (4,293,870)
Accretion of
Series C
redemption
premium........ -- (1,098,900) -- (1,098,900)
Accretion of
Series D
redemption
premium........ -- (471,407) -- (471,407)
Issuance of
common stock... -- -- -- 42,199
Issuance of
Series A
preferred --
itarget....... -- -- -- 1,000,000
Issuance of
Series B
preferred --
itarget....... -- -- -- 921,515
Exercise of
common stock
options........ -- -- -- 46,907
Deferred
compensation... (1,279,995) -- -- --
Amortization of
deferred
compensation... 734,614 -- -- 734,614
IPO proceeds,
net of
$1,161,949 of
issuance
costs.......... -- -- -- 40,697,006
Exercise of
warrants....... -- -- -- 988,000
Imputed
compensation... -- -- -- 83,333
Conversion of
Series A
preferred...... -- -- -- --
Conversion of
Series B
preferred...... -- -- -- --
Conversion of
Series C
preferred...... -- -- -- 5,718,249
Conversion of
Series D
preferred...... -- -- -- 8,000,000
Conversion of
Series C
accretion...... -- -- -- 1,759,330
Conversion of
Series D
accretion...... -- -- -- 471,407
Net loss........ -- (12,137,503) -- (12,137,503)
------------ ------------- ----------- ------------
Balance,
December 31,
1999............ (1,312,664) (25,876,599) -- 42,460,880
Exercise of
common stock
options........ -- -- -- 211,550
Exercise of
warrants ...... 10,027
Issuance of
Series
B preferred --
itarget.com... -- -- -- 1,616,206
Conversion of
Series
A preferred --
itarget.com... -- -- -- --
Conversion of
Series B
preferred --
itarget.com... -- -- -- --
Amortization of
deferred
compensation... 112,211 -- -- 112,211
Unrealized loss
on marketable
securities..... -- -- (116,175) (116,175)
Net loss........ -- (7,915,972) -- (7,915,972)
------------ ------------- ----------- ------------
Balance, March
31, 2000
(unaudited)..... $(1,200,453) $(33,792,571) (116,175) $36,378,727
============ ============= =========== ============
</TABLE>

The accompanying notes are an integral part of these statements.

F-31
<PAGE>

CYBERGOLD, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

<TABLE>
<CAPTION>
Three Months
Year Ended December 31, Ended March 31,
----------------------------- ------------------
1997 1998 1999 1999 2000
-------- -------- --------- -------- --------
(unaudited)
<S> <C> <C> <C> <C> <C>
Cash Flows From Operating
Activities:
Net loss................... $ (3,869) $ (4,816) $ (12,137) $ (1,901) $ (7,916)
Adjustments to reconcile
net loss to net cash used
in operating activities:
Depreciation and
amortization.............. 191 269 378 83 205
Amortization of deferred
compensation.............. -- 198 735 327 113
Imputed compensation....... 125 150 125 83 --
Changes in assets and
liabilities:
Accounts receivable....... (161) (237) (1,401) 261 (1,434)
Prepaid expenses and
other assets............. (28) (17) (1,076) 32 (365)
Accounts payable.......... (6) 159 1,007 (64) 512
Related party payable..... -- -- 255 -- --
Members payable........... 382 440 1,379 794 652
Membership acquisition
payable.................. 70 218 450 (535) (34)
Accrued liabilities....... 50 (55) 1,126 (88) 1,263
Deferred revenue.......... 43 159 441 163 23
-------- -------- --------- -------- --------
Net cash used in
operating activities.... (3,203) (3,532) (8,718) (845) (6,981)
-------- -------- --------- -------- --------
Cash Flows From Investing
Activities:
Acquisition of property and
equipment................. (58) (163) (1,213) (104) (232)
Sale (purchase) of short-
term investments.......... -- -- (27,822) -- 5,880
Purchase of business....... -- -- (250) -- --
-------- -------- --------- -------- --------
Net cash provided by
(used in) investing
activities.............. (58) (163) (29,285) (104) 5,648
-------- -------- --------- -------- --------
Cash Flows From Financing
Activities:
Payment of capital lease
obligations............... (115) (143) (137) (234) (46)
Borrowings under equipment
financing................. -- -- 399 -- --
Proceeds from equipment
financing................. -- -- (35) 115 --
Proceeds from sale
leaseback transaction..... 250 -- -- -- --
Proceeds from loans from
stockholders.............. 1,000 -- -- -- --
Proceeds from issuance of
common stock.............. -- -- 40,727 -- --
Proceeds from issuance of
preferred stock........... 3,135 5,769 10,100 -- --
Proceeds from exercise of
common stock warrants..... -- -- 988 -- --
Proceeds from exercise of
stock options, net of
repurchases............... 12 11 45 168 221
-------- -------- --------- -------- --------
Net cash provided by
financing activities.... 4,282 5,637 52,087 49 175
-------- -------- --------- -------- --------
Net Increase (Decrease) in
Cash and Cash Equivalents.. 1,021 1,942 14,084 (900) (1,158)
Cash and Cash Equivalents:
Balance at beginning of
period.................... 218 1,239 3,181 3,181 17,265
-------- -------- --------- -------- --------
Balance at end of period... $ 1,239 $ 3,181 $ 17,265 $ 2,281 $ 16,107
======== ======== ========= ======== ========
Supplemental Cash Flow
Information:
Cash paid for interest..... $ 36 $ 71 $ 92 $ 19 $ 30
Acquisition of property and
equipment using capital
leases.................... 97 152 -- -- --
Conversion of stockholder
loans into preferred
stock..................... 1,000 -- -- -- --
</TABLE>

Non-Cash Transactions

In March 2000, the Company issued approximately 1.83 million shares in
exchange for the entire capital stock of itarget in an acquisition accounted
for as a pooling.

In January 2000, itarget entered into a stock swap agreement with Quintel
Communications whereby Quintel issued 229,862 shares of its common stock to the
Company in exchange for 213,258 shares of the itarget Series B preferred stock
(Note 12).

The accompanying notes are an integral part of these statements.

F-32
<PAGE>

CYBERGOLD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies:

Nature of Operations

Cybergold, Inc. was incorporated in California in 1994 and reincorporated
under the name Cybergold, Inc. (Cybergold) in Delaware in August 1999.
Cybergold did not have any significant operations prior to 1996. Cybergold was
a development-stage company through December 31, 1997.

Cybergold is engaged in the business of providing on-line direct marketing
and cash-based incentive advertising solutions for on-line advertisers and
marketers. Additionally, Cybergold provides custom marketing services, which
include production and development of marketing programs, delivery of targeted
email to Cybergold members, design of customer web sites, and third-party
engineering functions.

As of December 31, 1999, Cybergold had a retained deficit of approximately
$25.9 million and has continued to incur losses during 2000. During May 1999,
Cybergold issued redeemable convertible preferred stock, as further discussed
in Note 5, in the amount of $8.0 million. During September 1999, Cybergold
underwent its initial public offering of 5 million shares of common stock,
raising net proceeds of $40.7 million. Management believes its cash and cash
equivalent and short-term investment balances at December 31, 1999 will be
adequate to allow Cybergold to meet its cash needs through at least December
31, 2000.

The industry in which Cybergold operates is very specialized and is subject
to a number of industry-specific risk factors, including, but not limited to,
rapidly changing technologies, significant numbers of new entrants, dependence
on key individuals, competition from similar products and from larger
companies, customer preferences, the need for the continued successful
development, marketing and selling of its products and services, the need for
financing, and the need for positive cash flows from operations.

On February 28, 2000, Cybergold signed a definitive agreement to acquire
itarget.com ("itarget") in exchange for 1.83 million shares of Cybergold's
stock. itarget is a permission based email marketing company that rewards its
members with premium products, delivered on-line. The acquisition was completed
on March 29, 2000 and was accounted for as a pooling of interests.

Reference to Cybergold in these notes includes Cybergold and its
subsidiaries.

Basis of Presentation

The accompanying consolidated financial statements and related notes to
consolidated financial statements include the accounts and results of Cybergold
and companies acquired in business combinations (see Note 10). Results of
companies acquired in business combinations accounted for under the purchase
method are included from their acquisition dates. Results of companies acquired
in business combinations accounted for under the pooling-of-interests method
are retroactively included for all periods presented. All significant
intercompany transactions and accounts have been eliminated.

Interim Financial Statements

The accompanying financial statements as of March 31, 2000 and for the three
months ended March 31, 1999 and 2000 are unaudited, but in the opinion of
management, include all adjustments consisting of normal recurring adjustments
necessary for a fair presentation of results for the interim periods. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
omitted, although Cybergold believes that the disclosures included are adequate
to make the information presented not misleading. Results for the three-month
period ended March 31, 2000 are not necessarily indicative of the results that
may be expected for the year ending December 31, 2000.

F-33
<PAGE>

CYBERGOLD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Significant Customers

Two customers individually accounted for 22 percent and 16 percent,
respectively, of the Cybergold's total revenue during the year ended December
31, 1998.

No individual customer exceeded 10 percent of total revenue during the year
ended December 31, 1999.

Concentration of Credit Risk

Financial instruments that may potentially subject Cybergold to
concentration of credit risk consist principally of cash, cash equivalents,
and short-term investments. All cash, cash equivalents, and short-term
investments are placed in financial institutions with strong credit ratings,
which minimizes the risk of loss due to nonpayment. Cybergold has not
experienced any losses due to credit impairment or other factors related to
its financial instruments.

Cash Equivalents

For the statements of cash flows, Cybergold treats financial instruments as
cash equivalents if the original maturity of such instruments is three months
or less.

Short-Term Investments

Short-term investments consist primarily of government securities that are
considered to be held-to-maturity and are accounted for in accordance with
Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for
Certain Investments in Debt and Equity Securities." Accordingly, these assets
are reported at their estimated fair market values.

Other Comprehensive Loss

Other Comprehensive Loss consists of unrealized losses on short-term
investments.

Financial Instruments

Financial instruments consist of cash equivalents, short-term investment,
accounts receivable, accounts payable, and debt. The estimated fair value of
these financial instruments approximates their carrying value.

Valuation Accounts

Below is a summary of the changes in Cybergold's valuation accounts for
1999, 1998 and 1997:

<TABLE>
<CAPTION>
Balance at Balance
Beginning of Additions at End of
Description Year Charged Expense Deductions Year
----------- ------------ --------------- ---------- ---------
<S> <C> <C> <C> <C>
1999:
Allowance for Doubtful Accounts....... $ 30,000 $ 151,000 $ 10,000 $ 171,000
1998:
Allowance for Doubtful Accounts....... $ 50,000 $ 25,000 $ 45,000 $ 30,000
1997:
Allowance for Doubtful Accounts....... $ 0 $ 50,000 $ 0 $ 50,000
</TABLE>

F-34
<PAGE>

CYBERGOLD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Property and Equipment

Property and equipment are carried at cost, and for financial reporting
purposes depreciation is computed using the straight-line method over estimated
useful lives of three years for all assets. Maintenance and repair expenditures
are charged to expense when incurred.

Intangibles

Intangibles include goodwill which represents the excess of cost over the
estimated fair value of the net tangible and intangible assets of acquired
businesses. Should events or circumstances occur subsequent to acquisition that
bring into question the realizable values or impairment of any component of
goodwill, Cybergold will evaluate the remaining useful life and balance of
goodwill and will make appropriate adjustments. Cybergold's principal
considerations in determining impairment include the strategic benefits to
Cybergold of the particular business related to the questioned component of
goodwill as measured by undiscounted current and expected future operating
income levels of that particular business and expected undiscounted future cash
flows.

Members Payable

Members payable represents amounts payable to Cybergold's members as a
result of their performing certain actions and completing transactions. These
amounts are cash rewards and are recorded on Cybergold's balance sheets until
the member elects to receive payment of the rewards or to use the rewards to
purchase items on-line.

Member Acquisition Payable

Member acquisition payable represents amounts due to advertising partners
for new member sign-ups that are originated from a partner web site.

Revenue Recognition and Cost of Revenues

Cybergold earns revenue from certain member transactions and from custom
marketing and other services. Transaction revenues are earned each time a
member either earns or spends incentive rewards within the system and for
micropayment transactions. Transaction revenues are recognized as revenue upon
completion of the specific action related to the transaction fee.

Custom marketing services and other revenues include production and
development fees received for customization of marketing programs, fees
received for delivering targeted email to Cybergold's members, and fees
received for other advertising and marketing services. Production and
development fees represent HTML design services, graphic services, engineering,
and database development and related services; revenue is recognized as these
services are performed. Email revenue is recognized in the month that the
contract is fulfilled. Other advertising and marketing services revenue is
recognized as these services are performed.

Prepayments by advertising or marketing clients for transaction fees or
custom marketing services are included in deferred revenue on the accompanying
balance sheets.

The cost of revenues associated with transaction revenues represents cash
rewards paid to members for completing transactions. The cost of revenues
associated with custom advertising and marketing services and other revenues
primarily consists of costs for production and development personnel and
independent contractors.

Any unpaid rewards due to members are recorded in members payable in the
accompanying balance sheets.

F-35
<PAGE>

CYBERGOLD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Product Development

Product development costs include expenses related to the development and
enhancement of Cybergold's product offerings. Product development costs are
expensed as incurred.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of expenses during the reporting period.
Actual results could differ from those estimates, and such differences could be
material.

Income Taxes

Net Loss Per Share

Basic net loss per share is calculated by dividing net loss by the weighted
average common shares outstanding during the period. Diluted loss per share is
calculated by dividing the net loss by the weighted average common shares
outstanding adjusted for all potential common shares, which includes shares
issuable upon the exercise of outstanding common stock options, warrants, and
other contingent issuances of common stock. Cybergold has losses for all
periods presented and, accordingly, such potential common shares are excluded
from the computation of diluted net loss per share, as their effect is
antidilutive.

Potentially dilutive securities include the following:

<TABLE>
<CAPTION>
December 31,
----------------------------- March 31,
1997 1998 1999 2000
--------- --------- --------- -----------
(unaudited)
<S> <C> <C> <C> <C>
Options to purchase common
stock........................... 776,333 1,250,122 2,531,184 2,454,699
Warrants to purchase common
stock........................... 166,667 166,667 166,667 166,667
Warrants to purchase preferred
stock........................... 146,667 138,333 171,843 138,333
Series A preferred stock......... 2,000,000 2,000,000 -- --
Series B preferred stock......... 1,378,314 1,394,981 -- --
Series A preferred stock--
itarget.com..................... -- -- 208,321 --
Series B preferred stock--
itarget.com..................... -- -- 126,781 --
Redeemable preferred stock....... -- 4,189,195 -- --
--------- --------- --------- ---------
Total........................ 4,467,981 9,139,298 3,204,796 2,759,699
========= ========= ========= =========
</TABLE>

Stock Split

During June 1999, Cybergold approved a two-for-three reverse stock split.
All of the share amounts and per share amounts in these financial statements
have been restated to reflect this split for all periods presented.

F-36
<PAGE>

CYBERGOLD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

New Accounting Standards

Cybergold also adopted SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information." As of December 31, 1998, management has
concluded that Cybergold only operates in one segment and exclusively in the
United States.

In April 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, Accounting for Certain Transactions Involving Stock
Compensation, an interpretation of APB Opinion No. 25 ("FIN 44"). Among other
issues, FIN 44 clarifies (a) the definition of employee for purposes of
applying Opinion No. 25, (b) the criteria for determining whether a plan
qualifies as a noncompensatory plan, (c) the accounting consequence of various
modifications to the terms of a previously fixed stock option or award, and (d)
the accounting for an exchange of stock compensation awards in a business
combination. FIN 44 is effective July 1, 2000, but certain conclusions in the
interpretation cover specific events that occur after either December 15, 1998
or January 12, 2000. To the extent that this interpretation covers events
occurring during the period after December 15, 1998, or January 12, 2000, but
before the effective date of July 1, 2000, the effect of applying this
interpretation are recognized on a prospective basis from July 1, 2000. The
Company is currently reviewing stock grants to determine the impact, if any,
that may arise from implementation of FIN 44, although management does not
expect the impact, if any, to be material to the financial statements.

In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin ("SAB") No. 101, "Revenue Recognition," which provides
guidance on the recognition, presentation, and disclosure of revenue in
financial statements filed with the SEC. SAB 101 outlines the basic criteria
that must be met to recognize revenue and provides guidance for disclosures
related to revenue recognition policies. The Company believes that its revenue
recognition policies comply with the requirements of SAB 101.

Reclassifications

Certain reclassifications have been made to the financial statements to
conform to the current year presentation.

2. Property and Equipment:

Property and equipment consisted of the following:

<TABLE>
<CAPTION>
December 31,
----------------------
1998 1999
--------- -----------
<S> <C> <C>
Computer equipment and software...................... $ 923,127 $ 2,054,951
Furniture and fixtures............................... 30,465 163,143
Leasehold improvements............................... 14,541 16,638
--------- -----------
968,133 2,234,732
Accumulated depreciation............................. (561,067) (927,684)
--------- -----------
$ 407,066 $ 1,307,048
========= ===========
</TABLE>

F-37
<PAGE>

CYBERGOLD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Depreciation expense for property and equipment was $190,859, $269,158, and
$356,257 for the years ended December 31, 1997, 1998, and 1999, respectively.
Included in property and equipment at December 31, 1998 and 1999, are
depreciated amounts of approximately $278,000 and $125,948, respectively,
related to assets acquired under capital leases.

3. Intangible Assets:

Intangible assets represent goodwill and other intangibles related to the
1999 acquisition of Smartfrog.com (Note 10). This amount is being amortized on
a straight-line basis over five years. Total amortization expense for the year
ended December 31, 1999, was $22,500.

4. Income Taxes:

Significant components of net deferred tax assets as of December 31 were:

<TABLE>
<CAPTION>
1998 1999
----------- -----------
<S> <C> <C>
Net operating loss carryforwards................... $ 3,744,037 $ 8,898,212
R&D credit carryforward............................ 274,163 485,436
Other.............................................. 25,028 77,060
----------- -----------
Gross deferred tax assets.......................... 4,043,228 9,460,708
Deferred tax valuation allowance................... (4,043,228) (9,460,708)
----------- -----------
Net deferred tax asset............................. $ -- $ --
=========== ===========
</TABLE>

As of December 31, 1999, Cybergold had tax net operating loss carryforwards
of approximately $22.2 million for federal and state income tax purposes ($2.0
million of which related to itarget.com). These carryforwards begin to expire
in 2011 and 2005, respectively. In addition, Cybergold has research and
development tax credit carryforwards of $271,557 and $213,879 for federal and
state income tax purposes, respectively, which begin to expire in 2011. A
valuation allowance has been provided to offset gross deferred tax assets due
to the uncertainty surrounding the realizability of such assets.

The Tax Reform Act of 1986 contains provisions that may limit the net
operating loss carryforwards and research and development credits available to
be used in any given year should certain events occur, including the sale of
equity securities and other changes in ownership. There can be no assurance
that Cybergold will be able to utilize net operating loss carryforwards and
credits before expiration.

The net operating loss carryforwards related to itarget.com as of March 29,
2000 can only be utilized to offset future taxable income of itarget.

5. Convertible Redeemable Preferred Stock:

Cybergold's amended and restated articles of incorporation allowed for the
issuance of 5,333,353 shares of Series C Convertible Redeemable Preferred Stock
(Series C Stock) and 2,566,667 shares of Series D Convertible Redeemable
Preferred Stock (Series D Stock). During the period from May 1998 through
August 1998, Cybergold issued 4,189,195 shares of Series C Stock at $1.37 per
share. During May 1999, Cybergold issued 2,051,282 shares of Series D Stock at
$3.90 per share. Each share of Series C Stock and Series D Stock was
automatically converted into shares of common stock during Cybergold's initial
public offering.

For the years ended December 31, 1998 and 1999, redemption accretion related
to Series C and Series D stock was charged to retained deficit in the amount of
$660,430 and $1,570,307, respectively. This accumulated accretion was recorded
as an increase to additional paid in capital upon the closure of Cybergold's
initial public offering.

F-38
<PAGE>

CYBERGOLD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

In connection with the issuance of Series D Stock, Cybergold also issued
warrants to purchase 302,140 warrants of Series D Stock at an exercise price of
$4.50. These warrants automatically converted into shares of common stock
during Cybergold's initial public offering.

6. Stockholders' Equity:

Common Stock

The holders of common stock are entitled to one vote per share. The holders
of common stock are entitled to receive ratably such dividends, if any, as may
be declared by the board of directors. In the event of liquidation, the holders
of common stock are entitled to share ratably in all assets remaining after
payment of liabilities, subject to prior distribution rights of preferred
stock. The common stock has no preemptive, conversion, or other subscription
rights.

Preferred Stock

In connection with the capital leases described in Note 7, Cybergold issued
warrants to the lessor to purchase 15,000 shares of Series B preferred stock at
$3.00 per share. The value of these warrants at the grant dates was determined
to be immaterial, based on the Black-Scholes pricing model.

In connection with itarget's issuance of Series A and Series B preferred
stock in 1999, itarget. com issued warrants to purchase 33,290 shares of
itarget preferred stock at various exercise prices in excess of the fair market
value of the underlying securities on the date of grant. The value of these
warrants at the grant dates was determined to be immaterial, based on the
Black-Scholes pricing model.

7. Commitments and Contingencies:

Lease Commitments

During 1999, Cybergold moved its headquarters to Oakland, California, and
entered into an operating lease that expires in November 2004, with an option
to extend the lease for an additional three years. Subsequent to year-end,
Cybergold has entered into an additional operating lease for additional floor
space at their headquarters. This lease expires in June 2005, with an option to
extend the lease for an additional three years. Cybergold also leases certain
items of property and equipment under capital leases expiring at various dates
through 2002.

Future minimum lease commitments are as follows:

<TABLE>
<CAPTION>
Operating Capital
Lease Lease
Payments Payments
---------- ---------
<S> <C> <C>
2000................................................... $1,061,809 $ 166,500
2001................................................... 1,077,876 83,500
2002................................................... 1,053,407 18,100
2003................................................... 1,134,400 --
2004 and thereafter.................................... 1,307,200 --
---------- ---------
Total................................................ $5,634,692 268,100
==========
Less: Interest component............................. (42,500)
---------
Present value of minimum lease payments................ 225,600
Less: Current maturities............................... (135,800)
---------
Long-term capital obligations.......................... $ 89,800
=========
</TABLE>

F-39
<PAGE>

CYBERGOLD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Interest expense on capital leases amounted to $35,800, $71,086, and $59,375
for the years-ended December 31, 1997, 1998, and 1999, respectively. Rent
expense for the years ended December 31, 1997, 1998, and 1999, was $150,730,
$139,749, and $331,638, respectively.

Employment Agreements

During 1998, Cybergold entered into employment agreements with three
officers that provide for minimum annual base salaries, bonus entitlements, and
issuance of common stock options upon the achievement of certain objectives.
Should these objectives not be achieved, these options vest over five years.
The employment agreements were effective as of the hire date of each respective
officer and may be terminated by either party. As of December 31, 1998 and
1999, Cybergold accrued approximately $32,000 and $25,000, respectively, in the
accompanying balance sheets for accrued bonuses in relation to these
agreements.

During 1999, itarget entered into employment agreements with two officers of
itarget that provide for lump sum payments upon a change of control. Upon
Cybergold, Inc.'s acquisition of itarget in March, 2000 (Note 10), Cybergold
paid out $1.2 million in connection with these agreements.

Equipment Credit Line

During February 1999, Cybergold entered into an equipment credit line
agreement. This credit line is to be used solely for capital expenditures.
Maximum borrowings under this line are $400,000. Interest of approximately 20
percent and principal are payable monthly over a three-year period. At December
31, 1999, Cybergold had amounts outstanding under this line of $364,649. Of
this amount, $65,518 is included in current maturities of long-term obligations
in the accompanying balance sheets, with the remainder included in long-term
obligations, net of current maturities.

8. Stock Option Plan:

Under the terms of Cybergold's 1996 Employee Stock Option Plan (1996 Plan)
adopted in June 1996, options to purchase shares of Cybergold's common stock
are granted to employees, consultants, and directors. Options currently
outstanding vest at 25 percent on the first anniversary of the grant date and
1/36 per month thereafter. Each option shall terminate 10 years after the date
of grant. In addition, the option holder is entitled to exercise prior to the
option's vesting as long as he or she is still an employee. Should the employee
subsequently leave, Cybergold has the right to repurchase the shares that had
not vested at the departure date. At December 31, 1998 and 1999, 56,771 and
18,646 shares of common stock were subject to repurchase, respectively, under
this provision.

The 1999 Omnibus Equity Incentive Plan was adopted in September 1999. The
provisions of this plan match the 1996 Plan, except that optionees may exercise
only those options they are vested in. All options granted from the effective
date of the initial public offering on September 22, 1999 were granted from the
1999 Plan.

F-40
<PAGE>

CYBERGOLD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

A summary of the status of Cybergold's stock option plan at December 31, A
summary of the status of Cybergold's stock option plan at December 31, 1999,
and changes during the years ended December 1997, 1998, and 1999, are presented
in the table below:

<TABLE>
<CAPTION>
Weighted
Weighted Average
Options Outstanding Average Fair Value
------------------------- Exercise of Options
Qualifying Nonqualifying Total Price Granted
---------- ------------- --------- -------- ----------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1996....... 690,375 -- 690,375 $ 0.05
Granted........................ 334,333 106,667 441,000 0.41 $ 0.08
Canceled....................... (93,000) -- (93,000) 0.23
Exercised...................... (262,042) -- (262,042) 0.05
--------- ------- --------- ------
Balance, December 31, 1997....... 669,666 106,667 776,333 0.24
Granted........................ 675,733 200,233 875,966 0.41 $ 1.02
Canceled....................... (279,305) (61,111) (340,416) 0.51
Exercised...................... (60,694) (1,067) (61,761) 0.18
--------- ------- --------- ------
Balance, December 31, 1998....... 1,005,400 244,722 1,250,122 0.29
Granted........................ 1,806,898 138,899 1,945,797 5.53 $ 3.21
Canceled....................... (242,917) (91,696) (334,613) 1.71
Exercised...................... (290,375) (54,776) (345,151) 0.15
--------- ------- --------- ------
Balance, December 31, 1999....... 2,279,006 237,149 2,516,155 $ 4.17
========= ======= ========= ======
</TABLE>

Options outstanding, exercisable, and vested by price range at December 31,
1999, are as follows:

<TABLE>
<CAPTION>
Weighted
Range of Average
Exercise Number Contractual Number Number
Price Outstanding Remaining Life Exercisable Vested
-------- ----------- -------------- ----------- -------
<S> <C> <C> <C> <C>
$ 0.02-1.00 950,875 7.6 950,875 520,986
$3.90 507,359 9.4 507,359 66,087
$ 6.63-10.00 1,038,921 9.8 278,388 60,833
$10.01-18.13 19,000 10.0 0 0
--------- --------- -------
2,516,155 1,736,622 647,906
========= ========= =======
</TABLE>

During 1997, Cybergold entered into agreements that granted options to
purchase 123,333 shares of Series A preferred stock to consultants at $1.50 per
share. The options were fully vested at December 31, 1998. The value of these
options at the grant date (as determined using the Black-Scholes model) was not
material.

In connection with the granting of certain stock options to employees,
directors, and consultants during 1998 and 1999, Cybergold recorded deferred
compensation of $965,571 and $1,279,995 respectively. This deferred
compensation is being amortized over the expected service periods of the
grantees, generally four years. Amortization of deferred compensation for the
years ended December 31, 1998 and 1999 was $198,288 and $734,614, respectively.

F-41
<PAGE>

CYBERGOLD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Cybergold has adopted the disclosure-only provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation." Had compensation expense for the
Plan been determined based on the fair value at the grant dates, as prescribed
in SFAS No. 123, Cybergold's net loss and net loss per share would have been as
follows:

<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------------------
1997 1998 1999
------------ ------------ -------------
<S> <C> <C> <C>
Net loss:
As reported................... $ (3,869,323) $ (5,475,213) $ (13,707,503)
Pro forma..................... $ (3,929,438) $ (5,572,769) $ (14,281,465)
Basic and diluted net loss per
common share:
As reported................... $ (0.97) $ (1.18) $ (1.45)
Pro forma..................... $ (0.99) $ (1.20) $ (1.51)
</TABLE>

The fair value of each option was estimated on the date of grant using the
Black-Scholes option pricing model with the following assumptions used for the
grants: expected dividend yield of 0 percent in all periods; expected
volatility of 149 percent in all periods; weighted average risk-free interest
rates ranging from 3.91 percent to 6.05 percent for all periods presented in
the table above; and expected lives from one month to four years for all
periods.

During 1999, itarget granted options to an itarget executive to purchase up
to 30,057 shares of common stock at an exercise price of $0.02 per share. In
connection with this grant, itarget recognized $7,900 of compensation expense,
which is included in general and administrative expense in the accompanying
consolidated statement of operations for the year ended December 31, 1999.

9. Compensation and Retirement Plans:

On May 18, 1999, the Board of Directors adopted the following plans:

1999 Omnibus Equity Incentive Plan--Cybergold has reserved 1,500,000
shares of common stock for issuance under this plan. Options may be granted
under this plan to employees, directors, and consultants and will not be
granted at less than 100 percent of the fair market value of the common
stock on the option grant date. These options will generally vest over four
years and expire ten years after the date of grant. At December 31, 1999,
780,000 options were outstanding under this plan.

1999 Employee Stock Purchase Plan--Cybergold has reserved 300,000 shares
of common stock for issuance under this plan, and only employees are
eligible. Employees can purchase stock through payroll deductions that may
not exceed 15 percent of the employee's cash compensation. The purchase
price per share of common stock will be no less than 85 percent of the fair
market value of the stock at the date of purchase. At December 31, 1999, 0
purchases had been made under this plan.

401(k) Defined Contribution Plan--Cybergold also sponsors a defined
contribution 401(k) retirement plan for all employees who have completed at
least 30 days of service. Participants may elect to defer up to 15 percent
of their current annual salary, not to exceed $10,500. Cybergold does not
match contributions.

F-42
<PAGE>

CYBERGOLD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

10. Acquisitions:

In November 1999, Cybergold purchased substantially all of the assets and
assumed certain liabilities of Smartfrog.com, a Delaware corporation, for
$250,000 and has included Smartfrog.com's results of operations as of such
date. Cybergold accounted for this acquisition under the purchase method of
accounting. The allocation of the purchase price to the underlying net assets
acquired is based upon estimates of the fair value of the net assets. Of the
net assets acquired, $150,000 was allocated to employment contracts and is
being amortized over one year. The remainder was allocated to goodwill and is
being amortized over 5 years. Smartfrog.com had no activity during 1998. Had
the acquisition occurred as of January 1, 1999, Cybergold's net loss would have
increased by approximately $100,000.

On March 29, 2000, Cybergold issued approximately 1.83 million shares of its
common stock for the entire common stock of itarget. This acquisition was
accounted for under the pooling-of-interests method of accounting. The
financial statements reflect this acquisition as if Cybergold, Inc. and itarget
had always been members of the same operating group. Separate results of
operations for Cybergold and itarget prior to the acquisition were:

<TABLE>
<CAPTION>
Cybergold itarget
------------ -----------
<S> <C> <C>
1998
Revenue.......................................... $ 1,004,933 --
Net loss......................................... $ (4,767,951) $ (47,262)
1999
Revenue.......................................... $ 5,302,961 $ 179,878
Net loss......................................... $(10,062,816) $(2,074,687)
</TABLE>

11. Related Parties:

During the years ended December 31, 1997, 1998 and through May 1999 the
president of Cybergold and majority common stockholder was not paid a salary.
Cybergold has imputed a salary of $125,000, $150,000, and $83,333 for the
years-ended December 31, 1997, 1998 and the period January 1, 1999 to May 1,
1999, respectively.

In January 1999, itarget entered into an agreement with a related party
whereby the related party provided certain services, including consulting
services, office space, website hosting services, and providing personal
identification numbers relating to prepaid calling cards. As of December 31,
1999, total consulting fees provided by the related party were $94,242, rent
expenses was $50,960, website hosting service costs were $14,280, and personal
identification number costs were $113,065. As of December 31, 1999, itarget
maintained amounts payable to the related party totaling $254,856.

In December 1999, itarget entered into a consulting agreement with a
stockholder of itarget. Pursuant to the agreement, Cybergold paid the
stockholder fees in the amount of $133,000 for financial-related services.

12. Subsequent Event:

In January 2000, itarget entered into a stock swap agreement with Quintel
Communications, Inc. ("Quintel"), whereby itarget issued 213,258 shares of its
Series B and placed in escrow 53,315 shares of its Series B in exchange for
229,862 shares of common stock of Quintel. In addition, itarget entered into a
strategic marketing agreement with Quintel for the development of a proposed
website. The agreement allows for any surviving party in a subsequent change of
control of itarget to terminate the agreement for $150,000, subject to certain
provisions.

F-43
<PAGE>

CYBERGOLD, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

On April 17, 2000, the Company entered into a merger agreement with MyPoints
under which the Company will be acquired by MyPoints in a tax-free, stock-for-
stock, fixed-share transaction. Under the terms of the merger agreement each
share of Cybergold will be exchanged for 0.4800 shares of MyPoints. Based on
closing prices on April 14, 2000, the transaction is valued at approximately
$157 million. The acquisition is scheduled to close in the third quarter of
2000.

F-44
<PAGE>

EXECUTION COPY

AGREEMENT AND PLAN OF REORGANIZATION

BY AND AMONG

MYPOINTS, INC.

MYGO ACQUISITION CORPORATION

AND

CYBERGOLD, INC.

Dated as of April 14, 2000
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
ARTICLE I THE MERGER................................................ A-1
1.1 The Merger................................................ A-1
1.2 Effective Time; Closing................................... A-1
1.3 Effect of the Merger...................................... A-2
1.4 Certificate of Incorporation; Bylaws...................... A-2
1.5 Directors and Officers.................................... A-2
1.6 Effect on Capital Stock................................... A-2
1.7 Surrender of Certificates................................. A-3
1.8 No Further Ownership Rights in Company Common Stock....... A-5
1.9 Lost, Stolen or Destroyed Certificates.................... A-5
1.10 Tax and Accounting Consequences........................... A-5
1.11 Taking of Necessary Action; Further Action................ A-5
1.12 Possible Alternative Structure............................ A-5

ARTICLE II REPRESENTATIONS AND WARRANTIES OF COMPANY................. A-5
2.1 Organization and Qualification; Subsidiaries.............. A-6
2.2 Certificate of Incorporation and Bylaws................... A-6
2.3 Capitalization............................................ A-6
2.4 Authority Relative to this Agreement...................... A-8
2.5 No Conflict; Required Filings and Consents................ A-8
2.6 Compliance; Permits....................................... A-8
2.7 SEC Filings; Financial Statements......................... A-9
2.8 No Undisclosed Liabilities................................ A-9
2.9 Absence of Certain Changes or Events...................... A-9
2.10 Absence of Litigation..................................... A-10
2.11 Employee Matters and Benefit Plans........................ A-10
2.12 Registration Statement; Proxy Statement................... A-13
2.13 Restrictions on Business Activities....................... A-14
2.14 Title to Property......................................... A-14
2.15 Taxes..................................................... A-14
2.16 Environmental Matters..................................... A-15
2.17 Brokers................................................... A-16
2.18 Intellectual Property..................................... A-16
2.19 Agreements, Contracts and Commitments..................... A-18
2.20 Opinion of Financial Advisor.............................. A-19
2.21 Board Approval............................................ A-20
2.22 Vote Required............................................. A-20
2.23 Section 203 of the Delaware General Corporation Law....... A-20

ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB... A-20
3.1 Organization and Qualification; Subsidiaries.............. A-20
3.2 Certificate of Incorporation and Bylaws................... A-20
3.3 Capitalization............................................ A-20
3.4 Authority Relative to this Agreement...................... A-21
3.5 No Conflict; Required Filings and Consents................ A-21
3.6 SEC Filings; Financial Statements......................... A-22
3.7 Registration Statement; Proxy Statement................... A-22
3.8 Compliance; Permits....................................... A-22
3.9 No Undisclosed Liabilities................................ A-23
</TABLE>

A-i
<PAGE>

TABLE OF CONTENTS
(continued)

<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
3.10 Absence of Litigation................................... A-23
3.11 Brokers................................................. A-23
3.12 Opinion of Financial Advisor............................ A-23
3.13 Board Approval.......................................... A-23
3.14 Vote Required........................................... A-23
3.15 Interim Operations of Sub............................... A-23

ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME..................... A-23
4.1 Conduct of Business by Company.......................... A-23
4.2 Conduct of Business by Parent........................... A-26

ARTICLE V ADDITIONAL AGREEMENTS................................... A-26
5.1 Proxy Statement/Prospectus; Registration Statement;
Other Filings; Board Recommendations................... A-26
5.2 Meeting of Company Stockholders......................... A-27
5.3 Confidentiality; Access to Information.................. A-28
5.4 No Solicitation......................................... A-28
5.5 Public Disclosure....................................... A-29
5.6 Reasonable Efforts; Notification........................ A-30
5.7 Third Party Consents.................................... A-30
5.8 Stock Options, Warrants and Employee Benefits........... A-31
5.9 Form S-8................................................ A-31
5.10 Indemnification......................................... A-31
5.11 Nasdaq Listing.......................................... A-32
5.12 Company Affiliate Agreement............................. A-32
5.13 Regulatory Filings; Reasonable Efforts.................. A-32
5.14 Termination of 401(k) Plan.............................. A-32
5.15 Parent Stockholders' Meeting............................ A-32
5.16 Directors............................................... A-33
5.17 Disposition of Paytech Business......................... A-33
5.18 Employment Arrangements and Items....................... A-34

ARTICLE VI CONDITIONS TO THE MERGER................................ A-34
6.1 Conditions to Obligations of Each Party to Effect the
Merger................................................. A-34
6.2 Additional Conditions to Obligations of Company......... A-35
6.3 Additional Conditions to the Obligations of Parent and
Merger Sub............................................. A-35

ARTICLE VII TERMINATION, AMENDMENT AND WAIVER....................... A-36
7.1 Termination............................................. A-36
7.2 Notice of Termination; Effect of Termination............ A-37
7.3 Fees and Expenses....................................... A-37
7.4 Amendment............................................... A-38
7.5 Extension; Waiver....................................... A-38

ARTICLE VIII GENERAL PROVISIONS...................................... A-39
8.1 Non-Survival of Representations and Warranties.......... A-39
8.2 Notices................................................. A-39
8.3 Interpretation; Knowledge............................... A-40
8.4 Counterparts............................................ A-40
8.5 Entire Agreement; Third Party Beneficiaries............. A-40
</TABLE>

A-ii
<PAGE>

TABLE OF CONTENTS
(continued)

<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
8.6 Severability............................................... A-40
8.7 Other Remedies; Specific Performance....................... A-40
8.8 Governing Law.............................................. A-41
8.9 Rules of Construction...................................... A-41
8.10 Assignment................................................. A-41
8.11 WAIVER OF JURY TRIAL....................................... A-41
</TABLE>

INDEX OF EXHIBITS AND SCHEDULES

<TABLE>
<C> <S>
Exhibit A Form of Company Voting Agreement
Exhibit B Form of Company Affiliate Agreement
Schedule of Employees to Sign Noncompetition Agreements/ Non-
Exhibit C Competition Agreement
Schedule 1 Disposition Criteria
</TABLE>

A-iii
<PAGE>

AGREEMENT AND PLAN OF REORGANIZATION

This AGREEMENT AND PLAN OF REORGANIZATION is made and entered into as of
April 14, 2000, among MyPoints, Inc., a Delaware corporation ("Parent"), Mygo
Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary
of Parent ("Merger Sub"), and Cybergold, Inc., a Delaware corporation
("Company").

RECITALS

A. Upon the terms and subject to the conditions of this Agreement (as
defined in Section 1.2 below) and in accordance with the Delaware General
Corporation Law ("Delaware Law"), Parent and Company intend to enter into a
business combination transaction.

B. The Board of Directors of Company (i) has determined that the Merger (as
defined in Section 1.1) is consistent with and in furtherance of the long-term
business strategy of Company and fair to, and in the best interests of, Company
and its stockholders, (ii) has approved this Agreement, the Merger (as defined
in Section 1.1) and the other transactions contemplated by this Agreement and
(iii) has determined to recommend that the stockholders of Company adopt and
approve this Agreement and approve the Merger.

C. Concurrently with the execution of this Agreement, and as a condition and
inducement to Parent's willingness to enter into this Agreement, certain
affiliates of Company are entering into Voting Agreements in substantially the
form attached hereto as Exhibit A (the "Company Voting Agreements").

D. Concurrently with the execution of this Agreement, and as a condition and
inducement to Parent's willingness to enter into this Agreement, certain
affiliates of Company (the "Company Affiliates") are entering into Company
Affiliate Agreements in substantially the form attached hereto as Exhibit B
(the "Company Affiliate Agreements").

E. The parties intend, by executing this Agreement, to adopt a plan of
reorganization within the meaning of Section 368 of the Internal Revenue Code
of 1986, as amended (the "Code").

F. It is also intended by the parties hereto that the Merger shall qualify
for accounting treatment as a purchase.

NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties agree as follows:

ARTICLE I

THE MERGER

1.1 The Merger. At the Effective Time (as defined in Section 1.2) and
subject to and upon the terms and conditions of this Agreement and the
applicable provisions of Delaware Law, Merger Sub shall be merged with and into
Company (the "Merger"), the separate corporate existence of Merger Sub shall
cease and Company shall continue as the surviving corporation. Company as the
surviving corporation after the Merger is hereinafter sometimes referred to as
the "Surviving Corporation."

1.2 Effective Time; Closing. Subject to the provisions of this Agreement,
the parties hereto shall cause the Merger to be consummated by filing a
Certificate of Merger with the Secretary of State of the State of Delaware in
accordance with the relevant provisions of Delaware Law (the "Certificate of
Merger") (the time of such filing (or such later time as may be agreed in
writing by Company and Parent and specified in the Certificate of Merger) being
the "Effective Time") as soon as practicable on or after the Closing Date (as

A-1
<PAGE>

herein defined). Unless the context otherwise requires, the term "Agreement" as
used herein refers collectively to this Agreement and Plan of Reorganization
and the Certificate of Merger. The closing of the Merger (the "Closing") shall
take place at the offices of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, at a time and date to be specified by the parties, which shall be
no later than the second business day after the satisfaction or waiver of the
conditions set forth in Article VI, or at such other time, date and location as
the parties hereto agree in writing (the "Closing Date").

1.3 Effect of the Merger. At the Effective Time, the effect of the Merger
shall be as provided in this Agreement and the applicable provisions of the
Delaware Law. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time all the property, rights, privileges, powers and
franchises of Company and Merger Sub shall vest in the Surviving Corporation,
and all debts, liabilities and duties of Company and Merger Sub shall become
the debts, liabilities and duties of the Surviving Corporation.

1.4 Certificate of Incorporation; Bylaws.

(a)At the Effective Time, the Certificate of Incorporation of Merger
Sub, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
amended as provided by law and such Certificate of Incorporation of the
Surviving Corporation; provided, however, that at the Effective Time the
Certificate of Incorporation of the Surviving Corporation shall be amended so
that the name of the Surviving Corporation shall be "Cybergold, Inc."

(b)The Bylaws of Merger Sub, as in effect immediately prior to the
Effective Time, shall be, at the Effective Time, the Bylaws of the Surviving
Corporation until thereafter amended.

1.5 Directors and Officers.

(a)The initial directors of the Surviving Corporation shall be the
directors of Merger Sub immediately prior to the Effective Time, until their
respective successors are duly elected or appointed and qualified. The initial
officers of the Surviving Corporation shall be the officers of Merger Sub
immediately prior to the Effective Time.

(b)Parent. At the Effective Time, Parent shall appoint two designees of
the Company to the Parent's Board of Directors, and the total number of
directors then serving on the Board of Directors of Parent shall not then
exceed ten (10).

1.6 Effect on Capital Stock. Subject to the terms and conditions of this
Agreement, at the Effective Time, by virtue of the Merger and without any
action on the part of Merger Sub, Company or the holders of any of the
following securities, the following shall occur:

(a)Conversion of Company Common Stock. Each share of Common Stock, $0.01
par value per share, of Company, including, with respect to each such share of
Company Common Stock (the "Company Common Stock") issued and outstanding
immediately prior to the Effective Time, other than any shares of Company
Common Stock to be canceled pursuant to Section 1.6(b), will be canceled and
extinguished and automatically converted (subject to Sections 1.6(e) and (f))
into the right to receive .480 shares of Common Stock of Parent (the "Parent
Common Stock") (the "Exchange Ratio") upon surrender of the certificate
representing such share of Company Common Stock in the manner provided in
Section 1.7 (or in the case of a lost, stolen or destroyed certificate, upon
delivery of an affidavit (and bond, if required) in the manner provided in
Section 1.9). If any shares of Company Common Stock outstanding immediately
prior to the Effective Time are unvested or are subject to a repurchase option,
risk of forfeiture or other condition under any applicable restricted stock
purchase agreement or other agreement with Company, then the shares of Parent
Common Stock issued in exchange for such shares of Company Common Stock will
also be unvested and subject to the same repurchase option, risk of forfeiture
or other condition, and the certificates representing such shares of Parent
Common Stock may accordingly be marked with appropriate legends. Company shall
take all action that may be necessary to ensure that, from and after the
Effective Time, Parent is entitled to exercise any such repurchase option or
other right set forth in any such restricted stock purchase agreement or other
agreement.

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(b)Cancellation of Parent-Owned Stock. Each share of Company Common
Stock held by Company or owned by Merger Sub, Parent or any direct or indirect
wholly-owned subsidiary of Company or of Parent immediately prior to the
Effective Time shall be canceled and extinguished without any conversion
thereof.

(c)Stock Options; Warrants; Employee Stock Purchase Plans. At the
Effective Time, all options to purchase Company Common Stock then outstanding
under Company's 1999 Stock Option Plan (the "1999 Plan"), the Employee Stock
Purchase Plan (as defined below) and the 1999 Omnibus Stock Incentive Plan (the
"Omnibus Plan" and together with the 1999 Plan and the Employee Stock Purchase
Plan, the "Company Option Plans") shall be assumed by Parent in accordance with
Section 5.8 hereof. Warrants to purchase Company Common Stock shall be treated
as set forth in Section 5.8. Purchase rights outstanding under Company's
Employee Stock Purchase Plan (the "ESPP") shall be treated as set forth in
Section 5.8.

(d)Capital Stock of Merger Sub. Each share of Common Stock, $0.001 par
value per share, of Merger Sub (the "Merger Sub Common Stock") issued and
outstanding immediately prior to the Effective Time shall be converted into one
validly issued, fully paid and nonassessable share of Common Stock, $0.001 par
value per share, of the Surviving Corporation. Each certificate evidencing
ownership of shares of Merger Sub Common Stock shall evidence ownership of such
shares of capital stock of the Surviving Corporation.

(e)Adjustments to Exchange Ratio. The Exchange Ratio shall be adjusted
to reflect appropriately the effect of any stock split, reverse stock split,
stock dividend (including any dividend or distribution of securities
convertible into Parent Common Stock or Company Common Stock), extraordinary
cash dividends, reorganization, recapitalization, reclassification,
combination, exchange of shares or other like change with respect to Parent
Common Stock or Company Common Stock occurring on or after the date hereof and
prior to the Effective Time.

(f)Fractional Shares. No fraction of a share of Parent Common Stock will
be issued by virtue of the Merger, but in lieu thereof each holder of shares of
Company Common Stock who would otherwise be entitled to a fraction of a share
of Parent Common Stock (after aggregating all fractional shares of Parent
Common Stock that otherwise would be received by such holder) shall, upon
surrender of such holder's Certificates(s) (as defined in Section 1.7(c))
receive from Parent an amount of cash (rounded to the nearest whole cent),
without interest, equal to the product of (i) such fraction, multiplied by (ii)
the average closing price of one share of Parent Common Stock for the five (5)
most recent days that Parent Common Stock has traded ending on the trading day
immediately prior to the Effective Time, as reported on the Nasdaq National
Market System ("Nasdaq").

1.7 Surrender of Certificates.

(a)Exchange Agent. Parent shall select a bank or trust company
reasonably acceptable to Company to act as the exchange agent (the "Exchange
Agent") in the Merger.

(b)Parent to Provide Common Stock. Promptly after the Effective Time,
Parent shall make available to the Exchange Agent, for exchange in accordance
with this Article I, the shares of Parent Common Stock issuable pursuant to
Section 1.6 in exchange for outstanding shares of Company Common Stock, and
cash in an amount sufficient for payment in lieu of fractional shares pursuant
to Section 1.6(f) and any dividends or distributions to which holders of shares
of Company Common Stock may be entitled pursuant to Section 1.7(d).

(c)Exchange Procedures. Promptly after the Effective Time, Parent shall
cause the Exchange Agent to mail to each holder of record (as of the Effective
Time) of a certificate or certificates (the "Certificates"), which immediately
prior to the Effective Time represented outstanding shares of Company Common
Stock whose shares were converted into the right to receive shares of Parent
Common Stock pursuant

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to Section 1.6, cash in lieu of any fractional shares pursuant to Section
1.6(f) and any dividends or other distributions pursuant to Section 1.7(d), (i)
a letter of transmittal in customary form (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Exchange Agent and shall contain
such other provisions as Parent may reasonably specify) and (ii) instructions
for use in effecting the surrender of the Certificates in exchange for
certificates representing shares of Parent Common Stock, cash in lieu of any
fractional shares pursuant to Section 1.6(f) and any dividends or other
distributions pursuant to Section 1.7(d). Upon surrender of Certificates for
cancellation to the Exchange Agent or to such other agent or agents as may be
appointed by Parent, together with such letter of transmittal, duly completed
and validly executed in accordance with the instructions thereto, the holders
of such Certificates shall be entitled to receive in exchange therefor
certificates representing the number of whole shares of Parent Common Stock
into which their shares of Company Common Stock were converted at the Effective
Time, payment in lieu of fractional shares which such holders have the right to
receive pursuant to Section 1.6(f) and any dividends or distributions payable
pursuant to Section 1.7(d), and the Certificates so surrendered shall forthwith
be canceled. Until so surrendered, outstanding Certificates will be deemed from
and after the Effective Time, for all corporate purposes, subject to Section
1.7(d) as to dividends and other distributions, to evidence only the ownership
of the number of full shares of Parent Common Stock into which such shares of
Company Common Stock shall have been so converted and the right to receive an
amount in cash in lieu of the issuance of any fractional shares in accordance
with Section 1.6(f) and any dividends or distributions payable pursuant to
Section 1.7(d).

(d)Distributions With Respect to Unexchanged Shares. No dividends or
other distributions declared or made after the date of this Agreement with
respect to Parent Common Stock with a record date after the Effective Time will
be paid to the holders of any unsurrendered Certificates with respect to the
shares of Parent Common Stock represented thereby until the holders of record
of such Certificates shall surrender such Certificates. Subject to applicable
law, following surrender of any such Certificates, the Exchange Agent shall
deliver to the record holders thereof, without interest, certificates
representing whole shares of Parent Common Stock issued in exchange therefor
along with payment in lieu of fractional shares pursuant to Section 1.6(f)
hereof and the amount of any such dividends or other distributions with a
record date after the Effective Time payable with respect to such whole shares
of Parent Common Stock.

(e)Transfers of Ownership. If certificates representing shares of Parent
Common Stock are to be issued in a name other than that in which the
Certificates surrendered in exchange therefor are registered, it will be a
condition of the issuance thereof that the Certificates so surrendered will be
properly endorsed and otherwise in proper form for transfer and that the
persons requesting such exchange will have paid to Parent or any agent
designated by it any transfer or other taxes required by reason of the issuance
of certificates representing shares of Parent Common Stock in any name other
than that of the registered holder of the Certificates surrendered, or
established to the satisfaction of Parent or any agent designated by it that
such tax has been paid or is not payable.

(f)Required Withholding. Each of the Exchange Agent, Parent and the
Surviving Corporation shall be entitled to deduct and withhold from any
consideration payable or otherwise deliverable pursuant to this Agreement to
any holder or former holder of Company Common Stock such amounts as may be
required (as advised by tax counsel for Parent) to be deducted or withheld
therefrom under the Code or under any provision of state, local or foreign tax
law or under any other applicable legal requirement provided that in lieu of
such deduction or withholding the holder may provide evidence reasonably
acceptable to the Exchange Agent, Parent or the Surviving Corporation, as
applicable, showing payment of such amounts. To the extent such amounts are so
deducted or withheld, such amounts shall be treated for all purposes under this
Agreement as having been paid to the person to whom such amounts would
otherwise have been paid.

(g)No Liability. Notwithstanding anything to the contrary in this
Section 1.7, neither the Exchange Agent, Parent, the Surviving Corporation nor
any party hereto shall be liable to a holder of shares of Parent Common Stock
or Company Common Stock for any amount properly paid to a public official
pursuant to any applicable abandoned property, escheat or similar law.

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1.8 No Further Ownership Rights in Company Common Stock. All shares of
Parent Common Stock issued in accordance with the terms hereof (including any
cash paid in respect thereof pursuant to Section 1.6(f) and 1.7(d)) shall be
deemed to have been issued in full satisfaction of all rights pertaining to
such shares of Company Common Stock, and there shall be no further registration
of transfers on the records of the Surviving Corporation of shares of Company
Common Stock which were outstanding immediately prior to the Effective Time.
If, after the Effective Time, Certificates are presented to the Surviving
Corporation for any reason, they shall be canceled and exchanged as provided in
this Article I.

1.9 Lost, Stolen or Destroyed Certificates. In the event that any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent
shall issue in exchange for such lost, stolen or destroyed Certificates, upon
the making of an affidavit of that fact by the holder thereof, certificates
representing the shares of Parent Common Stock into which the shares of Company
Common Stock represented by such Certificates were converted pursuant to
Section 1.6, cash for fractional shares, if any, as may be required pursuant to
Section 1.6(f) and any dividends or distributions payable pursuant to Section
1.7(d); provided, however, that Parent may, in its discretion and as a
condition precedent to the issuance of such certificates representing shares of
Parent Common Stock, cash and other distributions, require the owner of such
lost, stolen or destroyed Certificates to deliver a bond in such sum as it may
reasonably direct as indemnity against any claim that may be made against
Parent, the Surviving Corporation or the Exchange Agent with respect to the
Certificates alleged to have been lost, stolen or destroyed.

1.10 Tax and Accounting Consequences.

(a)It is intended by the parties hereto that the Merger shall constitute
a reorganization within the meaning of Section 368 of the Code. The parties
hereto adopt this Agreement as a "plan of reorganization" within the meaning of
Sections 1.368-2(g) and 1.368-3(a) of the United States Income Tax Regulations.

(b)It is intended by the parties hereto that the Merger shall be treated
as a purchase for accounting purposes.

1.11 Taking of Necessary Action; Further Action. If, at any time after the
Effective Time, any further action is necessary or desirable to carry out the
purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of Company and Merger Sub, the officers and directors of Company
and Merger Sub will take all such lawful and necessary action.

1.12 Possible Alternative Structure. In the event Parent reasonably
determines prior to the Effective Time that (i) there is a material possibility
that the transactions contemplated by this Agreement will not constitute a
"reorganization" within the meaning of Section 368(a) of the Code, (ii) there
is a material possibility that the Merger will result in a corporate level Tax,
or (iii) there are material Tax benefits available if the transactions
contemplated by this Agreement are restructured, Parent may request that the
structure of the acquisition of the Company contemplated by this Agreement be
altered in a manner so as to permit (i) the transactions contemplated by this
Agreement to qualify as a reorganization under Section 368 of the Code,
(ii) the avoidance of such material corporate-level Tax, or (iii) the
achievement of such Tax benefits, as applicable. In any case, corresponding
changes to this Agreement shall be made consistent with such structure but
without material adverse change in the economic consequences to Parent, the
Company or their respective stockholders.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF COMPANY

As of the date hereof and as of the Closing Date, Company represents and
warrants to Parent and Merger Sub, subject to such exceptions as are
specifically disclosed in writing in the disclosure letter supplied by Company
to Parent dated as of the date hereof and certified by a duly authorized
officer of Company and

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whether or not referenced in any specific section herein, which disclosure
shall provide an exception to or otherwise qualify the representations or
warranties of Company specifically referred to in such disclosure (the "Company
Schedule"), as follows:

2.1 Organization and Qualification; Subsidiaries.

(a)Each of Company and its subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power and authority to own, lease
and operate its assets and properties and to carry on its business as it is now
being conducted, except where the failure to do so would not, individually, or
in the aggregate, have a Material Adverse Effect. Each of Company and its
subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, consents, certificates, approvals and orders
("Approvals") necessary to own, lease and operate the properties it purports to
own, operate or lease and to carry on its business as it is now being
conducted, except where the failure to have such Approvals would not,
individually or in the aggregate, have a Material Adverse Effect on Company.

(b)Company has no subsidiaries except for the corporations identified in
Section 2.1(b) of the Company Schedule. Except as set forth in Section 2.1(b)
of the Company Schedule, neither Company nor any of its subsidiaries has agreed
nor is obligated to make nor is bound by any written, oral or other agreement,
contract, subcontract, lease, binding understanding, instrument, note, option,
warranty, purchase order, license, sublicense, insurance policy, benefit plan,
commitment or undertaking of any nature, as of the date hereof or as may
hereafter be in effect (a "Contract") under which it may become obligated to
make, any future investment in or capital contribution to any other entity.
Except as set forth in Section 2.1(b) of the Company Schedule, neither Company
nor any of its subsidiaries directly or indirectly owns any equity or similar
interest in or any interest convertible, exchangeable or exercisable for, any
equity or similar interest in, any corporation, partnership, joint venture or
other business, association or entity.

(c)Company and each of its subsidiaries is qualified to do business as a
foreign corporation, and is in good standing, under the laws of all
jurisdictions where the nature of their business requires such qualification
and where the failure to so qualify would have a Material Adverse Effect (as
defined in Section 8.3) on Company.

2.2 Certificate of Incorporation and Bylaws. Company has previously
furnished to Parent a complete and correct copy of its Certificate of
Incorporation and Bylaws as amended to date (together, the "Company Charter
Documents"). Such Company Charter Documents and equivalent organizational
documents of each of its subsidiaries are in full force and effect. Company is
not in violation of any of the provisions of the Company Charter Documents, and
no subsidiary of Company is in violation of its equivalent organizational
documents.

2.3 Capitalization.

(a)The authorized capital stock of Company consists of 25,520,000 shares
of Company Common Stock and 17,180,000 shares of Preferred Stock ("Company
Preferred Stock"), each having a par value of $0.01 per share. At the close of
business on the date of this Agreement (i) 21,405,402 shares of Company Common
Stock (including treasury shares) were issued and outstanding, all of which are
validly issued, fully paid and nonassessable (not including any shares issued
on or after such date upon exercise of options outstanding on the date hereof);
(ii) no shares of Company Common Stock were held by subsidiaries of Company;
(iii) 800,000 shares of Company Common Stock were available for future issuance
pursuant to Company's ESPP; (iv) 2,987,064 shares of Company Common Stock were
reserved for issuance upon the exercise of outstanding options to purchase
Company Common Stock under the 1999 Omnibus Incentive Plan; (v) 1,017,519
shares of Company Common Stock were available for future grant under the 1999
Plan; and (vi) 166,666 shares of Company Common Stock were reserved for
issuance upon conversion of warrants of Company (the "Warrants"). As of the
date hereof, no shares of Company Preferred Stock were issued or

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outstanding. Section 2.3(a) of the Company Schedule sets forth the following
information with respect to each Company Stock Option (as defined in Section
5.8) outstanding as of the date of this Agreement: (i) the name and address of
the optionee; (ii) the particular plan pursuant to which such Company Stock
Option was granted; (iii) the number of shares of Company Common Stock subject
to such Company Stock Option; (iv) the exercise price of such Company Stock
Option; (v) the date on which such Company Stock Option was granted; (vi) the
applicable vesting schedule; (vii) the date on which such Company Stock Option
expires; and (viii) whether the exercisability of such option will be
accelerated in any way by the transactions contemplated by this Agreement, and
indicates the extent of acceleration. Company has made available to Parent
accurate and complete copies of all stock option plans pursuant to which
Company has granted such Company Stock Options that are currently outstanding
and the form of all stock option agreements evidencing such Company Stock
Options. All shares of Company Common Stock subject to issuance as aforesaid,
upon issuance on the terms and conditions specified in the instrument pursuant
to which they are issuable, would be duly authorized, validly issued, fully
paid and nonassessable. Except as set forth in Section 2.3(a) of the Company
Schedule, there are no commitments or agreements of any character to which
Company is bound obligating Company to accelerate the vesting of any Company
Stock Option as a result of the Merger. All outstanding shares of Company
Common Stock, all outstanding Company Stock Options, and all outstanding shares
of capital stock of each subsidiary of Company have been issued and granted in
compliance with (i) all applicable securities laws and other applicable Legal
Requirements (as defined below) and (ii) all requirements set forth in
applicable Contracts. For the purposes of this Agreement, "Legal Requirements"
means any federal, state, local, municipal, foreign or other law, statute,
constitution, principle of common law, resolution, ordinance, code, edict,
decree, rule, regulation, ruling or requirement issues, enacted, adopted,
promulgated, implemented or otherwise put into effect by or under the authority
of any Governmental Entity (as defined below) and (ii) all requirements set
forth in applicable contracts, agreements, and instruments.

(b)Except for securities Company owns free and clear of all liens,
pledges, hypothecations, charges, mortgages, security interests, encumbrances,
claims, infringements, interferences, options, right of first refusals,
preemptive rights, community property interests or restriction of any nature
(including any restriction on the voting of any security, any restriction on
the transfer of any security or other asset, any restriction on the possession,
exercise or transfer of any other attribute of ownership of any asset) directly
or indirectly through one or more subsidiaries, and except for shares of
capital stock or other similar ownership interests of subsidiaries of Company
that are owned by certain nominee equity holders as required by the applicable
law of the jurisdiction of organization of such subsidiaries (which shares or
other interests do not materially affect Company's control of such
subsidiaries), and as set forth in Section 2.3(b) of the Company Schedule, as
of the date of this Agreement, there are no equity securities, partnership
interests or similar ownership interests of any class of equity security of any
subsidiary of Company, or any security exchangeable or convertible into or
exercisable for such equity securities, partnership interests or similar
ownership interests, issued, reserved for issuance or outstanding. Except as
set forth in Section 2.3(b) of the Company Schedule or as set forth in Section
2.3(a) hereof and except for the Stock Option Agreement, there are no
subscriptions, options, warrants, equity securities, partnership interests or
similar ownership interests, calls, rights (including preemptive rights),
commitments or agreements of any character to which Company or any of its
subsidiaries is a party or by which it is bound obligating Company or any of
its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, or repurchase, redeem or otherwise acquire, or cause the repurchase,
redemption or acquisition of, any shares of capital stock, partnership
interests or similar ownership interests of Company or any of its subsidiaries
or obligating Company or any of its subsidiaries to grant, extend, accelerate
the vesting of or enter into any such subscription, option, warrant, equity
security, call, right, commitment or agreement. As of the date of this
Agreement, except as contemplated by this Agreement and except for the Company
Rights Plan, there are no registration rights and there is, except for the
Company Voting Agreements, no voting trust, proxy, rights plan, antitakeover
plan or other agreement or understanding to which Company or any of its
subsidiaries is a party or by which they are bound with respect to any equity
security of any class of Company or with respect to any equity security,
partnership interest or similar ownership interest of any class of any of its
subsidiaries. Stockholders of Company will not be entitled to dissenters'
rights under applicable state law in connection with the Merger.

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2.4 Authority Relative to this Agreement. Company has all necessary
corporate power and authority to execute and deliver this Agreement and the
Stock Option Agreement and to perform its obligations hereunder and thereunder
and, subject to obtaining the approval of the stockholders of Company of the
Merger, to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the Stock Option Agreement by
Company and the consummation by Company of the transactions contemplated hereby
and thereby have been duly and validly authorized by all necessary corporate
action on the part of Company and no other corporate proceedings on the part of
Company are necessary to authorize this Agreement, the Stock Option Agreement
or to consummate the transactions so contemplated (other than the approval and
adoption of this Agreement and the Merger by holders of a majority of the
outstanding shares of Company Common Stock in accordance with Delaware Law and
the Company Charter Documents). This Agreement and the Stock Option Agreement
have been duly and validly executed and delivered by Company and, assuming the
due authorization, execution and delivery by Parent and Merger Sub, constitute
legal and binding obligations of Company, enforceable against Company in
accordance with their respective terms.

2.5 No Conflict; Required Filings and Consents.

(a)The execution and delivery of this Agreement and the Stock Option
Agreement by Company do not, and the performance of this Agreement and the
Stock Option Agreement by Company shall not, (i) conflict with or violate the
Company Charter Documents or the equivalent organizational documents of any of
Company's subsidiaries, (ii) subject to obtaining the approval of Company's
stockholders of this Agreement and the Merger and compliance with the
requirements set forth in Section 2.5(b) below, conflict with or violate any
law, rule, regulation, order, judgment or decree applicable to Company or any
of its subsidiaries or by which its or any of their respective properties is
bound or affected, or (iii) result in any breach of or constitute a default (or
an event that with notice or lapse of time or both would become a default)
under, or materially impair Company's or any of its subsidiaries' rights or
alter the rights or obligations of any third party under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or encumbrance on any of the properties or assets of
Company or any of its subsidiaries pursuant to, any material note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which Company or any of its subsidiaries is a
party or by which Company or any of its subsidiaries or its or any of their
respective properties are bound or affected.

(b)The execution and delivery of this Agreement and the Stock Option
Agreement by Company do not, and the performance of this Agreement by Company
shall not, require any consent, approval, authorization or permit of, or filing
with or notification to, any court, administrative agency, commission,
governmental or regulatory authority, domestic or foreign (a "Governmental
Entity"), except (A) for applicable requirements, if any, of the Securities Act
of 1933, as amended (the "Securities Act"), the Securities Exchange Act of
1934, as amended (the "Exchange Act"), state securities laws ("Blue Sky Laws"),
the pre-merger notification requirements (the "HSR Approval") of the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") and
of foreign Governmental Entities and the rules and regulations thereunder, the
rules and regulations of Nasdaq, and the filing and recordation of the Merger
Documents as required by Delaware Law and (B) where the failure to obtain such
consents, approvals, authorizations or permits, or to make such filings or
notifications, could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Company or, after the Effective
Time, Parent , or prevent consummation of the Merger or otherwise prevent the
parties hereto from performing their obligations under this Agreement.

2.6 Compliance; Permits.

(a)Neither Company nor any of its subsidiaries is in conflict with, or
in default or violation of, (i) any law, rule, regulation, order, judgment or
decree applicable to Company or any of its subsidiaries or by which its or any
of their respective properties is bound or affected, or (ii) any material note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Company or any of its
subsidiaries is a party or by which Company or any of its subsidiaries or its
or any of their respective properties is bound or affected, except for any
conflicts, defaults or violations that (individually

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or in the aggregate) would not cause Company to lose any material benefit or
incur any material liability. No investigation or review by any governmental or
regulatory body or authority is pending or, to the knowledge of Company,
threatened against Company or its subsidiaries, nor has any governmental or
regulatory body or authority indicated to Company an intention to conduct the
same, other than, in each such case, those the outcome of which could not,
individually or in the aggregate, reasonably be expected to have the effect of
prohibiting or materially impairing any business practice of Company or any of
its subsidiaries, any acquisition of material property by Company or any of its
subsidiaries or the conduct of business by Company or any of its subsidiaries.

(b)Company and its subsidiaries hold all permits, licenses, variances,
exemptions, orders and approvals from governmental authorities which are
material to operation of the business of Company and its subsidiaries taken as
a whole (collectively, the "Company Permits"). Company and its subsidiaries are
in compliance in all material respects with the terms of the Company Permits.

2.7 SEC Filings; Financial Statements.

(a)Company has made available to Parent a correct and complete copy of
each report, schedule, registration statement and definitive proxy statement
filed by Company with the Securities and Exchange Commission ("SEC") since May
21, 1999 (the "Company SEC Reports"), which are all the forms, reports and
documents required to be filed by Company with the SEC since May 21, 1999. The
Company SEC Reports (A) were prepared in accordance with the requirements of
the Securities Act or the Exchange Act, as the case may be, and (B) did not at
the time they were filed (and if amended or superseded by a filing prior to the
date of this Agreement then on the date of such filing) contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. None of
Company's subsidiaries is required to file any reports or other documents with
the SEC.

(b)Each set of consolidated financial statements (including, in each
case, any related notes thereto) contained in the Company SEC Reports was
prepared in accordance with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved (except as may be
indicated in the notes thereto or, in the case of unaudited statements, do not
contain footnotes as permitted by Form 10-Q of the Exchange Act) and each
fairly presents in all material respects the consolidated financial position of
Company and its subsidiaries at the respective dates thereof and the
consolidated results of its operations and cash flows for the periods
indicated, except that the unaudited interim financial statements were or are
subject to normal adjustments which were not or are not expected to be material
in amount.

(c)Company has previously furnished to Parent a complete and correct
copy of any amendments or modifications, which have not yet been filed with the
SEC but which are required to be filed, to agreements, documents or other
instruments which previously had been filed by Company with the SEC pursuant to
the Securities Act or the Exchange Act.

2.8 No Undisclosed Liabilities. Neither Company nor any of its subsidiaries
has any liabilities (absolute, accrued, contingent or otherwise) of a nature
required to be disclosed on a balance sheet or in the related notes to the
consolidated financial statements prepared in accordance with GAAP which are,
individually or in the aggregate, material to the business, results of
operations or financial condition of Company and its subsidiaries taken as a
whole, except (i) liabilities provided for in Company's balance sheet as of
December 31, 1999 (ii) liabilities incurred since December 31, 1999 in the
ordinary course of business, none of which is material to the business, results
of operations or financial condition of Company and its subsidiaries, taken as
a whole or (iii) liabilities incurred in connection with this Agreement.

2.9 Absence of Certain Changes or Events. Since December 31, 1999, there
has not been: (i) any Material Adverse Effect on Company, (ii) any declaration,
setting aside or payment of any dividend on, or other distribution (whether in
cash, stock or property) in respect of, any of Company's or any of its

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subsidiaries' capital stock (other than distributions paid to the Company), or
any purchase, redemption or other acquisition by Company of any of Company's
capital stock or any other securities of Company or its subsidiaries or any
options, warrants, calls or rights to acquire any such shares or other
securities except for repurchases from employees following their termination
pursuant to the terms of their pre-existing stock option or purchase
agreements, (iii) any split, combination or reclassification of any of
Company's or any of its subsidiaries' capital stock, (iv) any granting by
Company or any of its subsidiaries of any increase in compensation or fringe
benefits, except for normal increases of cash compensation in the ordinary
course of business consistent with past practice, or any payment by Company or
any of its subsidiaries of any bonus, except for bonuses made in the ordinary
course of business consistent with past practice or any granting by Company or
any of its subsidiaries of any increase in severance or termination pay or any
entry by Company or any of its subsidiaries into any currently effective
employment, severance, termination or indemnification agreement or any
agreement the benefits of which are contingent or the terms of which are
materially altered upon the occurrence of a transaction involving Company of
the nature contemplated hereby, (v) entry by Company or any of its subsidiaries
into any licensing or other agreement with regard to the acquisition or
disposition of any Intellectual Property (as defined in Section 2.18) other
than licenses in the ordinary course of business consistent with past practice
or any amendment or consent with respect to any licensing agreement filed or
required to be filed by Company with the SEC, (vi) any material change by
Company in its accounting methods, principles or practices, except as required
by concurrent changes in GAAP or in the federal securities laws, or (vii) any
revaluation by Company of any of its assets, including, without limitation,
writing down the value of capitalized inventory or writing off notes or
accounts receivable or any sale of assets of Company other than in the ordinary
course of business.

2.10 Absence of Litigation. Except as set forth in Section 2.10(b) of the
Company Schedule, there are no claims, actions, suits or proceedings pending
or, to the knowledge of Company, threatened (or, to the knowledge of Company,
any governmental or regulatory investigation pending or threatened) against
Company or any of its subsidiaries or any properties or rights of Company or
any of its subsidiaries, before any court, arbitrator or administrative,
governmental or regulatory authority or body, domestic or foreign.

2.11 Employee Matters and Benefit Plans.

(a)Definitions. With the exception of the definition of "Affiliate" set
forth in Section 2.11(a)(i) below (which definition shall apply only to this
Section 2.11), for purposes of this Agreement, the following terms shall have
the meanings set forth below:

(i) "Affiliate" shall mean any other person or entity under common
control with Company within the meaning of Section 414(b), (c), (m) or (o) of
the Code and the regulations issued thereunder;

(ii) "Company Employee Plan" shall mean any plan, program, policy,
practice, contract, agreement or other arrangement providing for compensation,
severance, termination pay, deferred compensation, performance awards, stock or
stock-related awards, fringe benefits or other employee benefits or
remuneration of any kind, whether written or unwritten or otherwise, funded or
unfunded, including without limitation, each "employee benefit plan," within
the meaning of Section 3(3) of ERISA which is or has been maintained,
contributed to, or required to be contributed to, by Company or a subsidiary of
the Company for the benefit of any Employee;

(iii) "COBRA" shall mean the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended;

(iv) "DOL" shall mean the Department of Labor;

(v) "Employee" shall mean any current or former employee, consultant
or director of Company or a subsidiary of the Company;

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<PAGE>

(vi) "Employee Agreement" shall mean each management, employment,
severance, consulting, relocation, repatriation, expatriation or other
agreement, contract or understanding in effect between Company or a subsidiary
of the Company and any Employee;

(vii) "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended;

(viii) "FMLA" shall mean the Family Medical Leave Act of 1993, as
amended;

(ix) "International Employee Plan" shall mean each Company Employee
Plan that has been adopted or maintained by Company or a subsidiary of the
Company, whether informally or formally, or with respect to which Company or a
subsidiary of the Company will or may have any liability, for the benefit of
employees who perform services outside the United States;

(x) "IRS" shall mean the Internal Revenue Service;

(xi) "Multiemployer Plan" shall mean any "Pension Plan" (as defined
below) which is a "multiemployer plan," as defined in Section 3(37) of ERISA;

(xii) "PBGC" shall mean the Pension Benefit Guaranty Corporation; and

(xiii) "Pension Plan" shall mean each Company Employee Plan which is
an "employee pension benefit plan," within the meaning of Section 3(2) of
ERISA.

(b)Schedule. Section 2.11(b) of the Company Schedule contains an
accurate and complete list of each Company Employee Plan, International
Employee Plan, and each Employee Agreement. Company does not have any plan or
commitment to establish any new Company Employee Plan, International Employee
Plan, or Employee Agreement, to modify any Company Employee Plan or Employee
Agreement (except to the extent required by law or to conform any such Company
Employee Plan or Employee Agreement to the requirements of any applicable law,
or as required by this Agreement), or to adopt or enter into any Company
Employee Plan, International Employee Plan, or Employee Agreement.

(c)Documents. Company has provided to Parent: (i) correct and complete
copies of all documents embodying each Company Employee Plan, International
Employee Plan, and each Employee Agreement including (without limitation) all
amendments thereto and all related trust documents; (ii) the most recent
annual actuarial valuations, if any, prepared for each Company Employee Plan;
(iii) the one (1) most recent annual report (Form Series 5500 and all
schedules and financial statements attached thereto), if any, required under
ERISA or the Code in connection with each Company Employee Plan; (iv) if the
Company Employee Plan is funded, the most recent annual and periodic
accounting of Company Employee Plan assets; (v) the most recent summary plan
description together with the summary(ies) of material modifications thereto,
if any, required under ERISA with respect to each Company Employee Plan; (vi)
the most recent IRS determination or opinion letter, any notification or
advisory letters, and all correspondence to or from the IRS or the DOL with
respect to any pending application or letter; (vii) all material written
agreements and contracts relating to each Company Employee Plan, including,
but not limited to, administrative service agreements, group annuity contracts
and group insurance contracts; (viii) all communications material to any
Employee or Employees relating to any Company Employee Plan and any proposed
Company Employee Plans, in each case, relating to any amendments,
terminations, establishments, increases or decreases in benefits, acceleration
of payments or vesting schedules or other events which would result in any
material liability to Company; (ix) all correspondence to or from any
governmental agency relating to any Company Employee Plan (other than
correspondence of the types described in (vi) above); (x) all COBRA forms and
related notices (or such forms and notices as required under comparable law);
(xi) all insurance policies pertaining to fiduciary liability insurance
covering the fiduciaries for each Company Employee Plan; (xii) the most recent
plan year discrimination tests for each Company Employee Plan; and (xiii) all
registration statements, annual reports (Form 11-K and all attachments
thereto) and prospectuses prepared in connection with each Company Employee
Plan.

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<PAGE>

(d)Employee Plan Compliance. Except as set forth in Section 2.11(d) of
the Company Schedule, (i) Company has performed in all material respects all
obligations required to be performed by it under, is not in default or
violation of, and has no knowledge of any default or violation by any other
party to each Company Employee Plan, and each Company Employee Plan has been
established and maintained in all material respects in accordance with its
terms and in compliance with all applicable laws, statutes, orders, rules and
regulations, including but not limited to ERISA or the Code; (ii) each Company
Employee Plan intended to qualify under Section 401(a) of the Code and each
trust intended to qualify under Section 501(a) of the Code has either received
a favorable determination, opinion, notification or advisory letter from the
IRS with respect to each such Plan as to its qualified status under the Code,
including all amendments to the Code effected by the Tax Reform Act of 1986 and
subsequent legislation, was adopted using a prototype plan for which such a
letter has been issued or has remaining a period of time under applicable
Treasury regulations or IRS pronouncements in which to apply for such a letter
and make any amendments necessary to obtain a favorable determination as to the
qualified status of each such Company Employee Plan; (iii) no "prohibited
transaction," within the meaning of Section 4975 of the Code or Sections 406
and 407 of ERISA, and not otherwise exempt under Section 4975 or Section 408 of
ERISA (or any administrative class exemption issued thereunder), has occurred
with respect to any Company Employee Plan the effect of which would be material
to the Company; (iv) there are no actions, suits or claims pending, or, to the
knowledge of Company, threatened or reasonably anticipated (other than routine
claims for benefits) against any Company Employee Plan or against the assets of
any Company Employee Plan; (v) each Company Employee Plan (other than any stock
option plan) can be amended, terminated or otherwise discontinued after the
Effective Time, without material liability to Parent, Company or any of its
Affiliates (other than ordinary administration expenses); (vi) there are no
audits, inquiries or proceedings pending or, to the knowledge of Company or any
Affiliates, threatened by the IRS or DOL with respect to any Company Employee
Plan; and (vii) neither Company nor any Affiliate is subject to any penalty or
tax with respect to any Company Employee Plan under Section 502(i) of ERISA or
Sections 4975 through 4980 of the Code. The Company has no ERISA affiliates.

(e)Pension Plan. Neither Company nor any Affiliate has ever maintained,
established, sponsored, participated in, or contributed to, any Pension Plan
which is subject to Title IV of ERISA or Section 412 of the Code.

(f)Multiemployer and Multiple Employer Plans. At no time has Company or
any Affiliate contributed to or been obligated to contribute to any
Multiemployer Plan. Neither Company, nor any Affiliate has at any time ever
maintained, established, sponsored, participated in, or contributed to any
multiple employer plan, as described in Section 413(c) of the Code.

(g)No Post-Employment Obligations. Except as set forth in Section
2.11(g) of the Company Schedule, no Company Employee Plan provides, or reflects
or represents any liability to provide retiree health to any person for any
reason, except as may be required by COBRA or other applicable statute, and
Company has never represented, promised or contracted (whether in oral or
written form) to any Employee (either individually or to Employees as a group)
or any other person that such Employee(s) or other person would be provided
with retiree health, except to the extent required by statute.

(h)Health Care Compliance. Except as set forth in Section 2.11(h) of the
Company Schedule, neither Company nor any Affiliate has, prior to the Effective
Time and in any material respect, violated any of the health care continuation
requirements of COBRA, the requirements of FMLA, the requirements of the Health
Insurance Portability and Accountability Act of 1996, the requirements of the
Women's Health and Cancer Rights Act, the requirements of the Newborns' and
Mothers' Health Protection Act of 1996, or any amendment to each such Act, or
any similar provisions of state law applicable to its Employees.

(i)Effect of Transaction.

(i)Except as set forth in Section 2.11(i) of the Company Schedule,
the execution of this Agreement and the consummation of the transactions
contemplated hereby will not (either alone or upon the

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<PAGE>

occurrence of any additional or subsequent events) constitute an event under
any Company Employee Plan, Employee Agreement, trust or loan that will or may
result in any payment (whether of severance pay or otherwise), acceleration,
forgiveness of indebtedness, vesting, distribution, increase in benefits or
obligation to fund benefits with respect to any Employee.

(ii)Except as set forth in Section 2.11(i) of the Company Schedule,
no payment or benefit which will or may be made by Company or its Affiliates
with respect to any Employee will be characterized as a "parachute payment,"
within the meaning of Section 280G(b)(2) of the Code.

(j)Employment Matters. Except as set forth in Section 2.11(j) of the
Company Schedule, Company: (i) is in compliance in all material respects with
all applicable foreign, federal, state and local laws, rules and regulations
respecting employment eligibility, employment, employment practices, terms and
conditions of employment and wages and hours, in each case, with respect to
Employees; (ii) has withheld and reported all amounts required by law or by
agreement to be withheld and reported with respect to wages, salaries and other
payments to Employees; (iii) is not liable for any arrears of wages or any
taxes or any penalty for failure to comply with any of the foregoing; and (iv)
is not liable for any payment to any trust or other fund governed by or
maintained by or on behalf of any governmental authority, with respect to
unemployment compensation benefits, social security or other benefits or
obligations for Employees (other than in amounts that are not in the aggregate
material, and routine payments to be made in the normal course of business and
consistent with past practice). There are no pending, threatened or reasonably
anticipated claims or actions against Company under any worker's compensation
policy or long-term disability policy.

(k)Labor. No work stoppage or labor strike against Company is pending,
threatened or reasonably anticipated. Company does not know of any activities
or proceedings of any labor union to organize any Employees. Except as set
forth in Section 2.11(k) of the Company Schedule, there are no actions, suits,
claims, labor disputes or grievances pending, or, to the knowledge of Company,
threatened or reasonably anticipated relating to any labor, safety or
discrimination matters involving any Employee, including, without limitation,
charges of unfair labor practices or discrimination complaints, which, if
adversely determined, would, individually or in the aggregate, result in any
material liability to Company. Neither Company nor any of its subsidiaries has
engaged in any unfair labor practices within the meaning of the National Labor
Relations Act. Except as set forth in Section 2.11(k) of the Company Schedule,
Company is not presently, nor has it been in the past, a party to, or bound by,
any collective bargaining agreement or union contract with respect to Employees
and no collective bargaining agreement is being negotiated by Company.

2.12 Registration Statement; Proxy Statement. None of the information
supplied or to be supplied by Company for inclusion or incorporation by
reference in (i) the registration statement on Form S-4 to be filed with the
SEC by Parent in connection with the issuance of the Parent Common Stock in or
as a result of the Merger (the "S-4") will, at the time the S-4 becomes
effective under the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading; and (ii) the joint
proxy statement/prospectus to be filed with the SEC by Company and Parent
pursuant to Section 5.1(a) hereof (the "Proxy Statement/Prospectus") will, at
the dates mailed to the stockholders of Company and Parent, at the times of the
stockholders meetings of Company (the "Company Stockholders' Meeting") and of
Parent (the "Parent Stockholders' Meeting" and together with the Company
Stockholders' Meeting, the "Stockholders Meeting") in connection with the
transactions contemplated hereby and as of the Effective Time, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading. The Proxy
Statement/Prospectus will comply as to form in all material respects with the
provisions of the Exchange Act and the rules and regulations promulgated by the
SEC thereunder. Notwithstanding the foregoing, Company makes no representation
or warranty with respect to any information supplied by Parent or Merger Sub
which is contained in any of the foregoing documents.

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<PAGE>

2.13 Restrictions on Business Activities. There is no agreement, commitment,
judgment, injunction, order or decree binding upon Company or its subsidiaries
or to which Company or any of its subsidiaries is a party which has or could
reasonably be expected to have the effect of prohibiting or materially
impairing any business practice of Company or any of its subsidiaries, any
acquisition of property by Company or any of its subsidiaries or the conduct of
business by Company or any of its subsidiaries as currently conducted.

2.14 Title to Property. Neither Company nor any of its subsidiaries owns any
material real property. Company and each of its subsidiaries have good and
defensible title to all of their material properties and assets, free and clear
of all liens, charges and encumbrances except liens for taxes not yet due and
payable and such liens or other imperfections of title, if any, as do not
materially detract from the value of or materially interfere with the present
use of the property affected thereby; and all leases pursuant to which Company
or any of its subsidiaries lease from others material real or personal property
are in good standing, valid and effective in accordance with their respective
terms, and there is not, under any of such leases, any existing material
default or event of default of Company or any of its subsidiaries or, to
Company's knowledge, any other party (or any event which with notice or lapse
of time, or both, would constitute a material default and in respect of which
Company or subsidiary has not taken adequate steps to prevent such default from
occurring). All the plants, structures and equipment of Company and its
subsidiaries, except such as may be under construction, are in good operating
condition and repair, in all material respects.

2.15 Taxes.

(a)Definition of Taxes. For the purposes of this Agreement, "Tax" or
"Taxes" refers to any and all federal, state, local and foreign taxes,
assessments and other governmental charges, duties, impositions and liabilities
relating to taxes, including taxes based upon or measured by gross receipts,
income, profits, sales, use and occupation, and value added, ad valorem,
transfer, franchise, withholding, payroll, recapture, employment, excise and
property taxes, together with all interest, penalties and additions imposed
with respect to such amounts and any obligations under any agreements or
arrangements with any other person with respect to such amounts and including
any liability for taxes of a predecessor or transferor entity.

(b)Tax Returns and Audits.

(i) Company and each of its subsidiaries have timely filed all
federal, state, local and foreign returns, estimates, information statements
and reports ("Returns") relating to Taxes required to be filed by Company and
each of its subsidiaries with any Tax authority, except such Returns which are
not, individually or in the aggregate, material to Company. Company and each of
its subsidiaries have paid all Taxes required to be paid, except such Taxes
which are not, individually or in the aggregate, material to Company.

(ii) Company and each of its subsidiaries as of the Effective Time
will have withheld with respect to all employees, independent contractors or
other persons all federal and state income Taxes, Taxes pursuant to the Federal
Insurance Contribution Act, Taxes pursuant to the Federal Unemployment Tax Act
and other Taxes required to be withheld, except such Taxes which are not,
individually or in the aggregate, material to Company.

(iii) Neither Company nor any of its subsidiaries is delinquent in
the payment of any material Tax nor is there any material Tax deficiency
outstanding, proposed or assessed against Company or any of its subsidiaries,
nor has Company or any of its subsidiaries executed any unexpired waiver of any
statute of limitations on or extending the period for the assessment or
collection of any Tax which waiver or extension remains in effect.

(iv) No audit or other examination of any Return of Company or any of
its subsidiaries by any Tax authority is presently in progress, nor has Company
or any of its subsidiaries been notified in writing of any request for such an
audit or other examination.

(v) No adjustment relating to any Returns filed by Company or any of
its subsidiaries has been proposed in writing by any Tax authority to Company
or any of its subsidiaries or any representative thereof.

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<PAGE>

(vi) Neither Company nor any of its subsidiaries has any liability
for any material unpaid Taxes which has not been accrued for or reserved on
Company balance sheet dated September 30, 1999 in accordance with GAAP, other
than any liability for unpaid Taxes that may have accrued since October 1, 1999
in connection with the operation of the business of Company and its
subsidiaries in the ordinary course. There are no liens with respect to Taxes
on any of the assets of Company, other than liens which are not, individually
or in the aggregate, material or customary liens for current Taxes not yet due
and payable.

(vii) There is no contract, agreement, plan or arrangement to which
Company or any of its subsidiaries is a party as of the date of this Agreement,
including but not limited to the provisions of this Agreement, covering any
employee or former employee of Company or any of its subsidiaries that,
individually or collectively, could reasonably be expected to give rise to the
payment of any amount that would not be deductible pursuant to Sections 280G or
162(m) of the Code. There is no contract, agreement, plan or arrangement to
which Company or any of its subsidiaries is a party or by which it is bound to
compensate any individual for excise taxes paid pursuant to Section 4999 of the
Code.

(viii) Neither Company nor any of its subsidiaries has filed any
consent agreement under Section 341(f) of the Code or agreed to have Section
341(f)(2) of the Code apply to any disposition of a subsection (f) asset (as
defined in Section 341(f)(4) of the Code) owned by Company or any of its
subsidiaries.

(ix) Neither Company nor any of its subsidiaries (A) has ever been a
member of a consolidated group other than a consolidated group of which Company
is the parent corporation or (B) is party to or has any obligation under any
tax-sharing, tax indemnity or tax allocation agreement or arrangement.

(x) None of Company's or its subsidiaries' assets are tax exempt use
property within the meaning of Section 168(h) of the Code.

(xi) Neither Company nor any of its subsidiaries has distributed the
stock of any corporation in a transaction satisfying the requirements of
Section 355 of the Code since April 16, 1997. The stock of neither Company nor
any of its subsidiaries has been distributed in a transaction satisfying the
requirements of Section 355 of the Code since April 16, 1997.

2.16 Environmental Matters.

(a)Hazardous Material. Except as set forth in Section 2.6(a) of the
Company Schedule and except as would not result in material liability to
Company or any of its subsidiaries, no underground storage tanks and no amount
of any substance that has been designated by any Governmental Entity or by
applicable federal, state or local law to be radioactive, toxic, hazardous or
otherwise a danger to health or the environment, including, without limitation,
PCBs, asbestos, petroleum, urea-formaldehyde and all substances listed as
hazardous substances pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, or defined as a hazardous
waste pursuant to the United States Resource Conservation and Recovery Act of
1976, as amended, and the regulations promulgated pursuant to said laws, but
excluding office and janitorial supplies, (a "Hazardous Material") are present,
as a result of the actions of Company or any of its subsidiaries or any
affiliate of Company, or, to Company's knowledge, as a result of any actions of
any third party or otherwise, in, on or under any property, including the land
and the improvements, ground water and surface water thereof, that Company or
any of its subsidiaries has at any time owned, operated, occupied or leased.

(b)Hazardous Materials Activities. Except as would not result in a
material liability to Company (in any individual case or in the aggregate) (i)
to the Company's Knowledge neither Company nor any of its subsidiaries has
transported, stored, used, manufactured, disposed of, released or exposed its
employees or others to Hazardous Materials in violation of any law in effect on
or before the Closing Date, and (ii) to the Company's knowledge neither Company
nor any of its subsidiaries has disposed of, transported, sold, used, released,
exposed its employees or others to or manufactured any product containing a
Hazardous Material

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<PAGE>

(collectively "Hazardous Materials Activities") in violation of any rule,
regulation, treaty or statute promulgated by any Governmental Entity in effect
prior to or as of the date hereof to prohibit, regulate or control Hazardous
Materials or any Hazardous Material Activity.

(c)Permits. Company and its subsidiaries currently hold all
environmental approvals, permits, licenses, clearances and consents (the
"Company Environmental Permits") necessary for the conduct of Company's and its
subsidiaries' Hazardous Material Activities and other businesses of Company and
its subsidiaries as such activities and businesses are currently being
conducted, except where the absence of such Company Environmental Permits would
not cause a Material Adverse Effect.

(d)Environmental Liabilities. No action, proceeding, revocation
proceeding, amendment procedure, writ or injunction is pending, and to
Company's knowledge, no action, proceeding, revocation proceeding, amendment
procedure, writ or injunction has been threatened by any Governmental Entity
against Company or any of its subsidiaries in a writing delivered to Company or
any of its subsidiaries concerning any Company Environmental Permit, Hazardous
Material or any Hazardous Materials Activity of Company or any of its
subsidiaries. Company is not aware of any fact or circumstance which could
involve Company or any of its subsidiaries in any environmental litigation or
impose upon Company any material environmental liability.

2.17 Brokers. Other than fees owed to Company's financial advisors, Goldman
Sachs & Co., as set forth in Section 2.17 to the Company Schedule, Company has
not incurred, nor will it incur, directly or indirectly, any liability for
brokerage or finders fees or agent's commissions or any similar charges in
connection with this Agreement or any transaction contemplated hereby.

2.18 Intellectual Property. For the purposes of this Agreement, the
following terms have the following definitions:

"Intellectual Property" shall mean any or all of the following and all
worldwide common law and statutory rights in, arising out of, or associated
therewith: (i) patents and applications therefor and all reissues,
divisions, renewals, extensions, provisionals, continuations and
continuations-in-part thereof ("Patents"); (ii) inventions (whether
patentable or not), invention disclosures, improvements, trade secrets,
proprietary information, know how, technology, technical data and customer
lists, and all documentation relating to any of the foregoing; (iii)
copyrights, copyrights registrations and applications therefor, and all
other rights corresponding thereto throughout the world; (iv) domain names,
uniform resource locators ("URLs") and other names and locators associated
with the Internet ("Domain Names"); (v) industrial designs and any
registrations and applications therefor; (vi) trade names, logos, common
law trademarks and service marks, trademark and service mark registrations
and applications therefor; (vii) all databases and data collections and all
rights therein; (viii) all moral and economic rights of authors and
inventors, however denominated, and (ix) any similar or equivalent rights
to any of the foregoing (as applicable).

"Company Intellectual Property" shall mean any Intellectual Property that
is owned by, or exclusively licensed to, Company and it subsidiaries.

"Registered Intellectual Property" means all Intellectual Property that is
the subject of an application, certificate, filing, registration or other
document issued, filed with, or recorded by any private, state, government
or other legal authority.

"Company Registered Intellectual Property" means all of the Registered
Intellectual Property owned by, or filed in the name of, Company or any of
its subsidiaries.

(a)Section 2.18(a) of the Company Schedule is a complete and accurate
list of all Company Registered Intellectual Property and specifies, where
applicable, the jurisdictions in which each such item of Company Registered
Intellectual Property has been issued or registered and lists any proceedings
or actions before any court or tribunal (including the United States Patent and
Trademark Office (the "PTO") or equivalent authority anywhere in the world)
related to any of the Company Registered Intellectual Property.

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<PAGE>

(b)Section 2.18(b) of the Company Schedule is a complete and accurate
list (by name and version number) of all products or service offerings of
Company or any of its subsidiaries ("Company Products") that have been
distributed or provided in the two (2) year period preceding the date hereof or
which Company or any of its subsidiaries currently intends to distribute or
provide in the future, including any products or service offerings under
development.

(c)Except as set forth in Section 2.18(c) of the Company Schedule, no
Company Intellectual Property or Company Product is subject to any proceeding
or outstanding decree, order, judgment, contract, license, agreement, or
stipulation restricting in any manner the use, transfer, or licensing thereof
by Company or any of its subsidiaries, or which may affect the validity, use or
enforceability of such Company Intellectual Property or Company Product.

(d)To the Company's knowledge and except as set forth in Section 2.18(d)
of the Company Schedule, each material item of Company Registered Intellectual
Property is valid and subsisting, all necessary registration, maintenance and
renewal fees currently due in connection with such Company Registered
Intellectual Property have been made and all necessary documents, recordations
and certificates in connection with such Company Registered Intellectual
Property have been filed with the relevant patent, copyright, trademark or
other authorities in the United States or foreign jurisdictions, as the case
may be, for the purposes of maintaining such Company Registered Intellectual
Property.

(e)Section 2.18(e) of the Company Schedule is a complete and accurate
list of all material actions that are required to be taken by Company within
ninety (90) days of the date hereof with respect to any of the foregoing
Registered Intellectual Property.

(f)Company owns and has good and exclusive title to, each material item
of Company Intellectual Property owned by it free and clear of any lien or
encumbrance (excluding non-exclusive licenses and related restrictions granted
in the ordinary course). Without limiting the foregoing: (i) Company is the
exclusive owner of all trademarks and trade names used in connection with the
operation or conduct of the business of Company and its subsidiaries, including
the sale, distribution or provision of any Company Products by Company or its
subsidiaries and (ii) Company owns exclusively, and has good title to, all
copyrighted works that are Company Products or which Company or any of its
subsidiaries otherwise purports to own.

(g)To the extent that any material technology, software or Intellectual
Property has been developed or created independently or jointly by a third
party for Company or any of its subsidiaries or is incorporated into any of the
Company Products, Company has a written agreement with such third party with
respect thereto and Company thereby either (i) has obtained ownership of, and
is the exclusive owner of, or (ii) has obtained a perpetual, non-terminable
license (sufficient for the conduct of its business as currently conducted and
as proposed to be conducted) to all such third party's Intellectual Property in
such work, material or invention by operation of law or by valid assignment, to
the fullest extent it is legally possible to do so.

(h)Except as set forth in Section 2.18(h) of the Company Schedule,
neither Company nor any of its subsidiaries has transferred ownership of, or
granted any exclusive license with respect to, any Intellectual Property that
is material Company Intellectual Property, to any third party, or knowingly
permitted Company's rights in such material Company Intellectual Property to
lapse or enter the public domain.

(i)Section 2.18(i) of the Company Schedule lists all material contracts,
licenses and agreements to which Company or any of its subsidiaries is a party:
(i) with respect to Company Intellectual Property licensed or transferred to
any third party (other than end-user licenses in the ordinary course); or (ii)
pursuant to which a third party has licensed or transferred any material
Intellectual Property to Company.

(j)Except as set forth in Section 2.18(j) of the Company Schedule, all
material contracts, licenses and agreements relating to either (i) Company
Intellectual Property or (ii) Intellectual Property of a third party licensed
to Company or any of its subsidiaries, are in full force and effect. The
consummation of the transactions contemplated by this Agreement will neither
violate nor result in the breach, modification,

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cancellation, termination or suspension of such contracts, licenses and
agreements. To the Company's knowledge, each of Company and its subsidiaries is
in material compliance with, and has not materially breached any term of any
such contracts, licenses and agreements and, to the knowledge of Company, all
other parties to such contracts, licenses and agreements are in compliance
with, and have not materially breached any term of, such contracts, licenses
and agreements. Except with respect to the nontransferable contracts listed in
Section 2.18(j) of the Company Schedule, following the Closing Date, the
Surviving Corporation will be permitted to exercise all of Company's rights
under such contracts, licenses and agreements to the same extent Company and
its subsidiaries would have been able to had the transactions contemplated by
this Agreement not occurred and without the payment of any additional amounts
or consideration other than ongoing fees, royalties or payments which Company
would otherwise be required to pay. Neither this Agreement nor the transactions
contemplated by this Agreement, including the assignment to Parent or Merger
Sub by operation of law or otherwise of any contracts or agreements to which
Company is a party, will result in (i) either Parent's or the Merger Sub's
granting to any third party any right to or with respect to any material
Intellectual Property right owned by, or licensed to, either of them, (ii)
either the Parent's or the Merger Sub's being bound by, or subject to, any non-
compete or other material restriction on the operation or scope of their
respective businesses, or (iii) either the Parent's or the Merger Sub's being
obligated to pay any royalties or other material amounts to any third party in
excess of those payable by Company prior to the Closing.

(k)Except as set forth in Section 2.18(k) of the Company Schedule, the
operation of the business of Company and its subsidiaries as such business
currently is conducted, including (i) Company's and its subsidiaries' design,
development, manufacture, distribution, reproduction, marketing or sale of the
products or services of Company and its subsidiaries (including Company
Products ) and (ii) to Company's knowledge, Company's use of any product,
device or process, has not, does not and will not infringe or misappropriate
the Intellectual Property of any third party or constitute unfair competition
or trade practices under the laws of any jurisdiction.

(l)Except as set forth in Section 2.18(l) of the Company Schedule,
neither Company nor any of its subsidiaries has received notice from any third
party that the operation of the business of Company or any of its subsidiaries
or any act, product or service of Company or any of its subsidiaries, infringes
or misappropriates the Intellectual Property of any third party or constitutes
unfair competition or trade practices under the laws of any jurisdiction.

(m)Except as set forth in Section 2.18(m) of the Company Schedule, to
the knowledge of Company, no person has or is infringing or misappropriating
any Company Intellectual Property.

(n)Company and each of its subsidiaries has taken reasonable steps to
protect Company's and its subsidiaries' rights in Company's confidential
information and trade secrets that it wishes to protect or any trade secrets or
confidential information of third parties provided to Company or any of its
subsidiaries, and, without limiting the foregoing, each of Company and its
subsidiaries has and uses its best efforts to enforce a policy requiring each
employee and contractor to execute a proprietary information/confidentiality
agreement substantially in the form provided to Parent and all current and
former employees and contractors of Company and any of its subsidiaries have
executed such an agreement, except where the failure to do so is not reasonably
expected to be material to Company.

2.19 Agreements, Contracts and Commitments. Except as set forth in Section
2.19 of the Company Schedule, neither Company nor any of its subsidiaries is a
party to or is bound by:

(a)any employment or consulting agreement, contract or commitment with
any officer, director, Company employee or member of Company's Board of
Directors, other than those that are terminable by Company or any of its
subsidiaries on no more than thirty (30) days' notice without liability or
financial obligation to Company;

(b)any agreement or plan, including, without limitation, any stock
option plan, stock appreciation right plan or stock purchase plan, any of the
benefits of which will be increased, or the vesting of benefits of

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which will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of which
will be calculated on the basis of any of the transactions contemplated by
this Agreement;

(c)any material agreement of indemnification or any guaranty other than
any agreement of indemnification entered into in connection with the sale or
license of software products in the ordinary course of business;

(d)any material agreement, contract or commitment containing any
covenant limiting in any respect the right of Company or any of its
subsidiaries to engage in any line of business or to compete with any person
or granting any exclusive distribution rights;

(e)except as contemplated by this Agreement, any agreement, contract or
commitment currently in force relating to the disposition or acquisition by
Company or any of its subsidiaries after the date of this Agreement of a
material amount of assets not in the ordinary course of business or pursuant
to which Company or any of its subsidiaries has any material ownership
interest in any corporation, partnership, joint venture or other business
enterprise other than Company's subsidiaries;

(f)any dealer, distributor, joint marketing or development agreement
currently in force under which Company or any of its subsidiaries have
continuing material obligations to jointly market any product, technology or
service or any material agreement pursuant to which Company or any of its
subsidiaries have continuing material obligations to jointly develop any
intellectual property that will not be owned, in whole or in part, by Company
or any of its subsidiaries;

(g)any agreement, contract or commitment currently in force to provide
source code to any third party for any product or technology that is material
to Company and its subsidiaries taken as a whole;

(h)any agreement, contract or commitment currently in force to license
any third party to manufacture or reproduce any Company product, service or
technology or any agreement, contract or commitment currently in force to sell
or distribute any Company products, service or technology except agreements
with distributors or sales representative in the normal course of business
cancelable without penalty upon notice of ninety (90) days or less and
substantially in the form previously provided to Parent;

(i)any mortgages, indentures, guarantees, loans or credit agreements,
security agreements or other agreements or instruments relating to the
borrowing of money or extension of credit;

(j)any material settlement agreement entered into within five (5) years
prior to the date of this Agreement; or

(k)any other agreement, contract or commitment that has a value of
$500,000 or more individually.

Neither Company nor any of its subsidiaries, nor to Company's knowledge any
other party to a Company Contract (as defined below), is in breach, violation
or default under, and neither Company nor any of its subsidiaries has received
written notice that it has breached, violated or defaulted under, any of the
material terms or conditions of any of the agreements, contracts or
commitments to which Company or any of its subsidiaries is a party or by which
it is bound that are required to be disclosed in the Company Schedule (any
such agreement, contract or commitment, a "Company Contract") in such a manner
as would permit any other party to cancel or terminate any such Company
Contract, or would permit any other party to seek material damages or other
remedies (for any or all of such breaches, violations or defaults, in the
aggregate).

2.20 Opinion of Financial Advisor. Company has been advised in writing by
its financial advisor, Goldman Sachs & Co. that in its opinion, as of the date
of this Agreement, the Exchange Ratio is fair to the stockholders of Company
from a financial point of view.

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2.21 Board Approval. The Board of Directors of Company has, as of the date
of this Agreement unanimously (i) approved, subject to stockholder approval,
this Agreement, the Stock Option Agreement and the transactions contemplated
hereby and thereby, (ii) determined that the Merger is in the best interests of
the stockholders of Company and is on terms that are fair to such stockholders
and (iii) recommended that the stockholders of Company approve this Agreement
and the Merger.

2.22 Vote Required. The affirmative vote of a majority of the votes that
holders of the outstanding shares of Company Common Stock are entitled to vote
with respect to the Merger is the only vote of the holders of any class or
series of Company's capital stock necessary to approve this Agreement and the
transactions contemplated hereby.

2.23 Section 203 of the Delaware General Corporation Law. The Board of
Directors of the Company has taken all actions so that (a) the restrictions
contained in Section 203 of the DGCL applicable to a "business combination" (as
defined in such Section 203) will not apply to the execution, delivery or
performance of this Agreement or to the consummation of the Merger or the other
transactions contemplated by this Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

Parent and Merger Sub jointly and severally represent and warrant to
Company, subject to such exceptions as are specifically disclosed in writing in
the disclosure letter and referencing a specific representation supplied by
Parent to Company dated as of the date hereof and certified by a duly
authorized officer of Parent (the "Parent Schedule"), as follows:

3.1 Organization and Qualification; Subsidiaries. Each of Parent and its
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has the
requisite corporate power and authority to own, lease and operate its assets
and properties and to carry on its business as it is now being conducted,
except where the failure to do so would not, individually or in the aggregate,
have a Material Adverse Effect on Parent. Each of Parent and its subsidiaries
is in possession of all Approvals necessary to own, lease and operate the
properties it purports to own, operate or lease and to carry on its business as
it is now being conducted, except where the failure to have such Approvals
would not, individually or in the aggregate, have a Material Adverse Effect on
Parent. Each of Parent and its subsidiaries is duly qualified or licensed as a
foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its activities makes such qualification or licensing
necessary, except for such failures to be so duly qualified or licensed and in
good standing that would not, either individually or in the aggregate, have a
Material Adverse Effect on Parent.

3.2 Certificate of Incorporation and Bylaws. Parent has previously
furnished to Company a complete and correct copy of its Certificate of
Incorporation and Bylaws as amended to date (together, the "Parent Charter
Documents"). Such Parent Charter Documents and equivalent organizational
documents of each of its subsidiaries are in full force and effect. Parent is
not in violation of any of the provisions of the Parent Charter Documents, and
no subsidiary of Parent is in violation of any of its equivalent organizational
documents.

3.3 Capitalization. The authorized capital stock of Parent consists of (i)
100,000,000 shares of Parent Common Stock, par value $0.001 per share, and (ii)
10,000,000 shares of Preferred Stock, par value $0.001 per share ("Parent
Preferred Stock") on April 13, 2000, (i) 28,999,193 shares of Parent Common
Stock were issued and outstanding, (ii) no shares of Parent Common Stock were
held in treasury by Parent or by subsidiaries of Parent, (iii) 281,408 shares
of Parent Common Stock were reserved for future issuance pursuant to
outstanding warrants, (iv) 5,373,085 shares of Parent Common Stock were
reserved for issuance upon the exercise of outstanding options ("Parent
Options") to purchase Parent Common Stock. As of the date hereof, no shares of
Parent Preferred Stock were issued or outstanding. The authorized capital stock
of Merger Sub

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consists of 1,000 shares of common stock, par value $0.001 per share, all of
which, as of the date hereof, are issued and outstanding. All of the
outstanding shares of Parent's and Merger Sub's respective capital stock have
been duly authorized and validly issued and are fully paid and nonassessable.
All shares of Parent Common Stock subject to issuance as aforesaid, upon
issuance on the terms and conditions specified in the instruments pursuant to
which they are issuable, shall, and the shares of Parent Common Stock to be
issued pursuant to the Merger will be, duly authorized, validly issued, fully
paid and nonassessable. All of the outstanding shares of capital stock (other
than directors' qualifying shares) of each of Parent's subsidiaries is duly
authorized, validly issued, fully paid and nonassessable and all such shares
(other than directors' qualifying shares) are owned by Parent or another
subsidiary free and clear of all security interests, liens, claims, pledges,
agreements, limitations in Parent's voting rights, charges or other
encumbrances of any nature whatsoever.

3.4 Authority Relative to this Agreement. Each of Parent and Merger Sub has
all necessary corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement by Parent and Merger Sub and the consummation by
Parent and Merger Sub of the transactions contemplated hereby and thereby have
been duly and validly authorized by all necessary corporate action on the part
of Parent and Merger Sub, and no other corporate proceedings on the part of
Parent or Merger Sub are necessary to authorize this Agreement, or to
consummate the transactions so contemplated. This Agreement has been duly and
validly executed and delivered by Parent and Merger Sub and, assuming the due
authorization, execution and delivery by Company, constitute legal and binding
obligations of Parent and Merger Sub, enforceable against Parent and Merger Sub
in accordance with their respective terms.

3.5 No Conflict; Required Filings and Consents.

(a)The execution and delivery of this Agreement by Parent and Merger Sub
by Parent do not, and the performance of this Agreement by Parent and Merger
Sub shall not, (i) conflict with or violate the Certificate of Incorporation,
Bylaws or equivalent organizational documents of Parent or any of its
subsidiaries, (ii) subject to compliance with the requirements set forth in
Section 3.5(b) below, conflict with or violate any law, rule, regulation,
order, judgment or decree applicable to Parent or any of its subsidiaries or by
which it or their respective properties are bound or affected, or (iii) result
in any breach of or constitute a default (or an event that with notice or lapse
of time or both would become a default) under, or impair Parent's or any such
subsidiary's rights or alter the rights or obligations of any third party
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance on any of
the properties or assets of Parent or any of its subsidiaries pursuant to, any
material note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which Parent or any of
its subsidiaries is a party or by which Parent or any of its subsidiaries or
its or any of their respective properties are bound or affected, except to the
extent such conflict, violation, breach, default, impairment or other effect
could not in the case of clauses (ii) or (iii) individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on Parent.

(b)The execution and delivery of this Agreement by Parent and Merger Sub
do not, and the performance of this Agreement by Parent and Merger Sub shall
not, require any consent, approval, authorization or permit of, or filing with
or notification to, any Governmental Entity except (i) for applicable
requirements, if any, of the Securities Act, the Exchange Act, Blue Sky Laws,
the pre-merger notification requirements of the HSR Act and of foreign
governmental entities and the rules and regulations thereunder, the rules and
regulations of Nasdaq, and the filing and recordation of the Certificate of
Merger as required by Delaware Law and (ii) where the failure to obtain such
consents, approvals, authorizations or permits, or to make such filings or
notifications, (x) would not prevent consummation of the Merger or otherwise
prevent Parent or Merger Sub from performing their respective obligations under
this Agreement or (y) could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on Parent.

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3.6 SEC Filings; Financial Statements.

(a)Parent has made available to Company a correct and complete copy of
each report, schedule, registration statement and definitive proxy statement
filed by Parent with the SEC on or after March 31, 1999 (the "Parent SEC
Reports"), which are all the forms, reports and documents required to be filed
by Parent with the SEC since May 21, 1999. The Parent SEC Reports (A) were
prepared in accordance with the requirements of the Securities Act or the
Exchange Act, as the case may be, and (B) did not at the time they were filed
(or if amended or superseded by a filing prior to the date of this Agreement,
then on the date of such filing) contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. None of Parent's
subsidiaries is required to file any reports or other documents with the SEC.

(b)Each set of consolidated financial statements (including, in each
case, any related notes thereto) contained in the Parent SEC Reports was
prepared in accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited statements, do not contain footnotes as permitted by Form 10-
Q of the Exchange Act) and each fairly presents in all material respects the
consolidated financial position of Parent and its subsidiaries at the
respective dates thereof and the consolidated results of its operations and
cash flows for the periods indicated, except that the unaudited interim
financial statements were or are subject to normal adjustments which were not
or are not expected to be material in amount.

(c)Since the date of the balance sheet included in Parent's report on
Form 10-K filed on March 30, 2000, and until the date hereof, there has not
occurred any Material Adverse Effect on Parent.

3.7 Registration Statement; Proxy Statement. None of the information
supplied or to be supplied by Parent for inclusion or incorporation by
reference in (i) the S-4 will, at the time the S-4 becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading; and (ii) the Proxy Statement/Prospectus will, at the
dates mailed to the stockholders of Company and Parent, at the times of the
Stockholders' Meetings and as of the Effective Time, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they are made, not misleading. The S-4 and
Proxy Statement/Prospectus will comply as to form in all material respects with
the provisions of the Securities Act and the rules and regulations promulgated
by the SEC thereunder. Notwithstanding the foregoing, Parent makes no
representation or warranty with respect to any information supplied by Company
which is contained in any of the foregoing documents.

3.8 Compliance; Permits.

(a)Neither Parent nor any of its subsidiaries is in conflict with, or in
default or violation of, (i) any law, rule, regulation, order, judgment or
decree applicable to Parent or any of its subsidiaries or by which its or any
of their respective properties is bound or affected, or (ii) any material note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Parent or any of its
subsidiaries is a party or by which Parent or any of its subsidiaries or its or
any of their respective properties is bound or affected, except for any
conflicts, defaults or violations that (individually or in the aggregate) would
not cause Parent to lose any material benefit or incur any material liability.
Except as disclosed in the Parent SEC Reports, no investigation or review by
any governmental or regulatory body or authority is pending or, to the
knowledge of Parent, threatened against Parent or its subsidiaries, nor has any
governmental or regulatory body or authority indicated to Parent an intention
to conduct the same, other than, in each such case, those the outcome of which
could not, individually or in the aggregate, reasonably be expected to have the
effect of prohibiting or materially impairing any business practice of Parent
or any of its subsidiaries, any acquisition of material property by Parent or
any of its subsidiaries or the conduct of business by Parent or any of its
subsidiaries.

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(b)Parent and its subsidiaries hold all permits, licenses, variances,
exemptions, orders and approvals from governmental authorities which are
material to operation of the business of Parent and its subsidiaries taken as a
whole (collectively, the "Parent Permits"). Parent and its subsidiaries are in
compliance in all material respects with the terms of the Parent Permits.

3.9 No Undisclosed Liabilities. Neither Parent nor any of its subsidiaries
has any liabilities (absolute, accrued, contingent or otherwise) of a nature
required to be disclosed on a balance sheet or in the related notes to the
consolidated financial statements prepared in accordance with GAAP which are,
individually or in the aggregate, material to the business, results of
operations or financial condition of Parent and its subsidiaries taken as a
whole, except (i) liabilities provided for in Parent's balance sheet as of
December 31, 1999 or (ii) liabilities incurred since December 31, 1999 in the
ordinary course of business, none of which is material to the business, results
of operations or financial condition of Parent and its subsidiaries, taken as a
whole.

3.10 Absence of Litigation. Except as disclosed in Parent SEC Reports, there
are no claims, actions, suits or proceedings pending or, to the knowledge of
Parent, threatened (or, to the knowledge of Parent, any governmental or
regulatory investigation pending or threatened) against Parent or any of its
subsidiaries or any properties or rights of Parent or any of its subsidiaries,
before any court, arbitrator or administrative, governmental or regulatory
authority or body, domestic or foreign.

3.11 Brokers. Other than fees owed to Parent's financial advisor, Robertson
Stephens & Company, Parent has not incurred, nor will it incur, directly or
indirectly, any liability for brokerage or finders fees or agent's commissions
or any similar charges in connection with this Agreement or any transaction
contemplated hereby.

3.12 Opinion of Financial Advisor. Parent has been advised in writing by its
financial advisor, Robertson Stephens & Company, that in its opinion, as of the
date of this Agreement, the Exchange Ratio is fair, from a financial point of
view, to Parent.

3.13 Board Approval. The Board of Directors of Parent has, as of the date of
this Agreement unanimously (i) approved, subject to stockholder approval, this
Agreement, the Stock Option Agreement and the transactions contemplated hereby
and thereby, (ii) determined that the Merger is in the best interests of the
stockholders of Parent and is on terms that are fair to such stockholders and
(iii) recommended that the stockholders of Parent approve the issuance of
Parent Common Stock in connection with the Merger.

3.14 Vote Required. The affirmative vote of a majority of the votes that
holders of the outstanding shares of Parent Common Stock are entitled to vote
with respect to the Merger is the only vote of the holders of any class or
series of Parent's capital stock necessary to approve the issuance of Parent
Common Stock in connection with the Merger.

3.15 Interim Operations of Sub. Merger Sub was formed solely for the purpose
of engaging in the transactions contemplated hereby, has engaged in no other
business activities and has conducted its operations only as contemplated
hereby.

ARTICLE IV

CONDUCT PRIOR TO THE EFFECTIVE TIME

4.1 Conduct of Business by Company. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
pursuant to its terms or the Effective Time, Company and each of its
subsidiaries shall, except to the extent that Parent shall otherwise consent in
writing, carry on its business, in the usual, regular and ordinary course, in
substantially the same manner as heretofore conducted and in compliance with
all applicable laws and regulations, pay its debts and taxes when due subject
to good faith disputes over such debts or taxes, pay or perform other material
obligations when due, and use its

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commercially reasonable efforts consistent with past practices and policies to
(i) preserve intact its present business organization, (ii) keep available the
services of its present officers and employees and (iii) preserve its
relationships with customers, suppliers, distributors, licensors, licensees,
and others with which it has significant business dealings.

In addition, except as permitted by the terms of this Agreement, and except
as provided in Section 4.1 of the Company Schedule, without the prior written
consent of Parent, which consent shall not be unreasonably withheld, during the
period from the date of this Agreement and continuing until the earlier of the
termination of this Agreement pursuant to its terms or the Effective Time,
Company shall not do any of the following and shall not permit its subsidiaries
to do any of the following:

(a)Other than pursuant to terms of agreements or policies in existence
as of the date of this Agreement as they apply to the transactions contemplated
by this Agreement, waive any stock repurchase rights, accelerate, amend or
change the period of exercisability of options or restricted stock, or reprice
options granted under any employee, consultant, director or other stock plans
or authorize cash payments in exchange for any options granted under any of
such plans; provided however, that at the request of Parent, Company shall
amend its Company Option Plans to provide for certain acceleration of vesting
at the Effective Time, subject to Parent's approval of the terms of such
amendment;

(b)Grant any severance or termination pay to any officer or employee
except pursuant to written agreements outstanding, or policies existing, on the
date hereof and as previously disclosed in writing or made available to Parent,
or adopt any new severance plan, or amend or modify or alter in any manner any
severance plan, agreement or arrangement existing on the date hereof;

(c)Except as contemplated by this Agreement, transfer or license to any
person or entity or otherwise extend, amend or modify any rights to the Company
Intellectual Property, or enter into grants to transfer or license to any
person future patent rights, other than in the ordinary course of business
consistent with past practices, provided that in no event shall Company license
on an exclusive basis or sell any Company Intellectual Property;

(d)Declare, set aside or pay any dividends on or make any other
distributions (whether in cash, stock, equity securities or property) in
respect of any capital stock or split, combine or reclassify any capital stock
or issue or authorize the issuance of any other securities in respect of, in
lieu of or in substitution for any capital stock;

(e)Except as set forth in Section 4.1(h) of the Company Schedule with
respect to mergers among Company and any of its direct or indirect
subsidiaries, acquire or purchase, redeem or otherwise acquire, directly or
indirectly, any shares of capital stock of Company or its subsidiaries, except
repurchases of unvested shares at cost in connection with the termination of
the employment relationship with any employee pursuant to stock option or
purchase agreements in effect on the date hereof;

(f)Issue, deliver, sell, authorize, pledge or otherwise encumber or
propose any of the foregoing with respect to, any shares of capital stock or
any securities convertible into shares of capital stock, or subscriptions,
rights, warrants or options to acquire any shares of capital stock or any
securities convertible into shares of capital stock, or enter into other
agreements or commitments of any character obligating it to issue any such
shares or convertible securities, other than (x) the issuance delivery and/or
sale of (i) shares of Company Common Stock pursuant to the exercise of the
Warrants or stock options outstanding as of the date of this Agreement, and
(ii) shares of Company Common Stock issuable to participants in the ESPP
consistent with the terms thereof and (y) the granting of stock options to
newly hired employees (excluding directors and executive officers), in the
ordinary course of business and consistent with past practices, in an amount
not to exceed options to purchase (and the issuance of Company Common Stock
upon exercise thereof) 10,000 shares in the aggregate;

(g)Cause, permit or propose any amendments to the Company Charter
Documents (or similar governing instruments of any of its subsidiaries);

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(h)Except as set forth in Section 4.1(h) of the Company Schedule with
respect to mergers among Company and any of its direct or indirect
subsidiaries, acquire or agree to acquire by merging or consolidating with, or
by purchasing any equity interest in or a portion of the assets of, or by any
other manner, any business or any corporation, partnership, association or
other business organization or division thereof, or otherwise acquire or agree
to enter into any joint ventures, strategic partnerships or alliances;

(i)Sell, lease, license, encumber or otherwise dispose of any properties
or assets except sales of inventory in the ordinary course of business
consistent with past practice, except for the sale, lease or disposition (other
than through licensing) of property or assets which are not material,
individually or in the aggregate, to the business of Company and its
subsidiaries;

(j)Incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person, issue or sell any debt securities or options,
warrants, calls or other rights to acquire any debt securities of Company,
enter into any "keep well" or other agreement to maintain any financial
statement condition or enter into any arrangement having the economic effect of
any of the foregoing other than in connection with the financing of ordinary
course trade payables consistent with past practice;

(k)Adopt or amend any employee benefit plan, policy or arrangement, any
employee stock purchase or employee stock option plan, or enter into any
employment contract or collective bargaining agreement (other than offer
letters and letter agreements entered into in the ordinary course of business
consistent with past practice with employees who are terminable "at will"), pay
any special bonus or special remuneration to any director or employee, or
increase the salaries or wage rates or fringe benefits (including rights to
severance or indemnification) of its directors, officers, employees or
consultants;

(l) (i) pay, discharge, settle or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), or litigation (whether or not commenced prior to the date of this
Agreement) other than the payment, discharge, settlement or satisfaction, in
the ordinary course of business or in accordance with their terms, or
liabilities recognized or disclosed in the most recent consolidated financial
statements (or the notes thereto) of Company included in the Company SEC
Reports or incurred since the date of such financial statements, or (ii) waive
the benefits of, terminate, release any person from or knowingly fail to
enforce any confidentiality or similar agreement to which Company or any of its
subsidiaries is a party or of which Company or any of its subsidiaries is a
beneficiary;

(m)Except as set forth in Section 4.1(m) of the Company Schedule, make
any individual or series of related payments outside of the ordinary course of
business in excess of $100,000; (n) Except as set forth in Section 4.1(h) of
the Company Schedule or except in the ordinary course of business consistent
with past practice, modify, amend or terminate any material contract or
agreement, to which Company or any subsidiary thereof is a party or waive,
delay the exercise of, release or assign any material rights or claims
thereunder;

(o)Enter into, renew or materially modify any contracts, agreements, or
obligations relating to the distribution, sale, license or marketing by third
parties of Company's products or products licensed by Company other than new
(or material modifications of existing) non-exclusive contracts, agreements or
obligations entered into in the usual, regular and ordinary course, in
substantially the same manner as heretofore conducted, and renewals of existing
nonexclusive contracts, agreements or obligations;

(p)Except as required by GAAP or the Federal securities laws, revalue
any of its assets or make any change in accounting methods, principles or
practices;

(q)Incur or enter into any agreement, contract or commitment requiring
Company or any of its subsidiaries to pay in excess of $250,000;

(r)Engage in any action that could reasonably be expected to cause the
Merger to fail to qualify as a "reorganization" under Section 368(a) of the
Code whether or not otherwise permitted by the provisions of this Article IV;

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(s)Settle any litigation other than routine litigation adequately
covered by insurance or for which adequate reserves have been made on the
Company's books and records and balance sheet as of December 31, 2000, and not
involving Company or Third Party Intellectual Property;

(t)Make any tax election that, individually or in the aggregate, is
reasonably likely to adversely affect in any material respect the tax liability
or tax attributes of Company or any of its subsidiaries or settle or compromise
any material income tax liability except as reserved for on the December 31,
1999 balance sheet;

(u)Agree in writing or otherwise to take any of the actions described in
Section 4.1(a) through (t) above.

4.2 Conduct of Business by Parent. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
pursuant to its terms or the Effective Time, except as permitted by the terms
of this Agreement and the Stock Option Agreement and except as provided in
Section 4.2 of the Parent Schedule, without the prior written consent of
Company, Parent shall not

(a)Engage in any action that could reasonably be expected to (i) cause
the Merger to fail to qualify as a "reorganization" under Section 368(a) of the
Code or (ii) interfere with Parent's ability to account for the Merger as a
pooling of interests;

(b)Declare, set aside or pay any cash dividends on or make any other
cash distributions in respect of any capital stock; or

(c)Take any action that would reasonably be likely to materially delay
the Merger.

ARTICLE V

ADDITIONAL AGREEMENTS

5.1 Proxy Statement/Prospectus; Registration Statement; Other Filings;
Board Recommendations.

(a)As promptly as practicable after the execution of this Agreement,
Company and Parent will prepare, and file with the SEC, the Proxy
Statement/Prospectus, and Parent will prepare and file with the SEC the S-4 in
which the Proxy Statement/Prospectus will be included as a prospectus. Each of
Parent and Company shall provide promptly to the other such information
concerning its business and financial statements and affairs as, in the
reasonable judgment of the providing party or its counsel, may be required or
appropriate for inclusion in the Proxy Statement/Prospectus and the S-4, or in
any amendments or supplements thereto, and to cause its counsel and auditors to
cooperate with the other's counsel and auditors in the preparation of the Proxy
Statement/Prospectus and the S-4. Each of Company and Parent will respond to
any comments of the SEC, and will use its respective commercially reasonable
efforts to have the S-4 declared effective under the Securities Act as promptly
as practicable after such filing, and Parent and Company will cause the Proxy
Statement/Prospectus to be mailed to its respective stockholders at the
earliest practicable time after the S-4 is declared effective by the SEC. As
promptly as practicable after the date of this Agreement, each of Company and
Parent will prepare and file any other filings required to be filed by it under
the Exchange Act, the Securities Act or any other Federal, foreign or Blue Sky
or related laws relating to the Merger and the transactions contemplated by
this Agreement (the "Other Filings"). Each of Company and Parent will notify
the other promptly upon the receipt of any comments from the SEC or its staff
or any other government officials and of any request by the SEC or its staff or
any other government officials for amendments or supplements to the S-4, the
Proxy Statement/Prospectus or any Other Filing or for additional information
and will supply the other with copies of all correspondence between such party
or any of its representatives, on the one hand, and the SEC or its staff or any
other government officials, on the other hand, with respect to the S-4, the
Proxy Statement/Prospectus, the Merger or any Other Filing. Each of Company and
Parent will cause all documents that it is responsible for filing with the SEC
or other regulatory authorities under this Section 5.1(a)

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to comply in all material respects with all applicable requirements of law and
the rules and regulations promulgated thereunder. Whenever any event occurs
which is required to be set forth in an amendment or supplement to the Proxy
Statement/Prospectus, the S-4 or any Other Filing, Company or Parent, as the
case may be, will promptly inform the other of such occurrence and cooperate in
filing with the SEC or its staff or any other government officials, and/or
mailing to stockholders of Company, such amendment or supplement.

(b)The Proxy Statement/Prospectus will include the unanimous
recommendations of (i) the Board of Directors of Parent in favor of adoption
and approval of this Agreement and approval of the Merger in connection with
the Merger and (ii) subject to Section 5.2, the Board of Directors of Company
in favor of adoption and approval of this Agreement and approval of the Merger.

5.2 Meeting of Company Stockholders.

(a)Promptly after the date hereof, Company will take all action
necessary in accordance with Delaware Law and the Company Charter Documents to
convene the Company Stockholders' Meeting to be held as promptly as
practicable, and in any event (to the extent permissible under applicable law)
within 45 days after the declaration of effectiveness of the S-4, for the
purpose of voting upon this Agreement and the Merger. Subject to Section
5.2(c), Company will use its commercially reasonable efforts to solicit from
its stockholders proxies in favor of the adoption and approval of this
Agreement and the approval of the Merger and will take all other action
necessary or advisable to secure the vote or consent of its stockholders
required by the rules of Nasdaq or Delaware Law to obtain such approvals.
Notwithstanding anything to the contrary contained in this Agreement, Company
may adjourn or postpone the Company Stockholders' Meeting to the extent
necessary to ensure that any necessary supplement or amendment to the
Prospectus/Proxy Statement is provided to Company's stockholders in advance of
a vote on the Merger and this Agreement or, if as of the time for which the
Company Stockholders' Meeting is originally scheduled (as set forth in the
Prospectus/Proxy Statement) there are insufficient shares of Company Common
Stock represented (either in person or by proxy) to constitute a quorum
necessary to conduct the business of the Company Stockholders' Meeting. Company
shall ensure that the Company Stockholders' Meeting is called, noticed,
convened and conducted, and that all proxies solicited by Company in connection
with the Company Stockholders' Meeting are solicited, in compliance with
Delaware Law, the Company Charter Documents, the rules of Nasdaq and all other
applicable legal requirements. Company's obligation to call, give notice of,
convene and conduct the Company Stockholders' Meeting in accordance with this
Section 5.2(a) shall not be limited to or otherwise affected by the
commencement, disclosure, announcement or submission to Company of any
Acquisition Proposal.

(b)Subject to Section 5.2(c): (i) the Board of Directors of Company
shall unanimously recommend that Company's stockholders vote in favor of and
adopt and approve this Agreement and the Merger at the Company Stockholders'
Meeting; (ii) the Prospectus/Proxy Statement shall include a statement to the
effect that the Board of Directors of Company has unanimously recommended that
Company's stockholders vote in favor of and adopt and approve this Agreement
and the Merger at the Company Stockholders' Meeting; and (iii) neither the
Board of Directors of Company nor any committee thereof shall withdraw, amend
or modify, or propose or resolve to withdraw, amend or modify in a manner
adverse to Parent, the unanimous recommendation of the Board of Directors of
Company that Company's stockholders vote in favor of and adopt and approve this
Agreement and the Merger. For purposes of this Agreement, said recommendation
of the Board of Directors shall be deemed to have been modified in a manner
adverse to Parent if said recommendation shall no longer be unanimous.

(c)Nothing in this Agreement shall prevent the Board of Directors of
Company from withholding, withdrawing, amending or modifying its unanimous
recommendation in favor of the Merger if (i) a Superior Offer (as defined
below) is made to Company and is not withdrawn, (ii) neither Company nor any of
its representatives shall have violated any of the restrictions set forth in
Section 5.4, and (iii) the Board of Directors of Company concludes in good
faith, after consultation with its outside counsel, that, in light of such
Superior Offer, the withholding, withdrawal, amendment or modification of such
recommendation is necessary

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in order for the Board of Directors of Company to comply with its fiduciary
obligations to Company's stockholders under applicable law. Nothing contained
in this Section 5.2 shall limit Company's obligation to convene and conduct the
Company Stockholders' Meeting (regardless of whether the unanimous
recommendation of the Board of Directors of Company shall have been withdrawn,
amended or modified). For purposes of this Agreement, "Superior Offer" shall
mean an unsolicited, bona fide written offer made by a third party to
consummate any of the following transactions: (i) a merger, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving Company pursuant to which the stockholders of Company
immediately preceding such transaction hold less than 51% of the equity
interest in the surviving or resulting entity of such transaction; (ii) a sale
or other disposition by Company of assets (excluding inventory and used
equipment sold in the ordinary course of business) representing in excess of
51% of the fair market value of Company's business immediately prior to such
sale, or (iii) the acquisition by any person or group (including by way of a
tender offer or an exchange offer or issuance by Company), directly or
indirectly, of beneficial ownership or a right to acquire beneficial ownership
of shares representing in excess of 51% of the voting power of the then
outstanding shares of capital stock of Company, in each case on terms that the
Board of Directors of Company determines, in its reasonable judgment (based on
written advice of a financial advisor of nationally recognized reputation) to
be more favorable to Company stockholders from a financial point of view than
the terms of the Merger.

5.3 Confidentiality; Access to Information.

(a)The parties acknowledge that Company and Parent have previously
executed a Mutual Nondisclosure Agreement, dated as of April 12, 2000 (the
"Confidentiality Agreement"), which Confidentiality Agreement will continue in
full force and effect in accordance with its terms.

(b)Access to Information. Each Party will afford the other Party its
accountants, counsel and other representatives reasonable access during normal
business hours, upon reasonable notice, to the properties, books, records and
personnel of such Party during the period prior to the Effective Time to obtain
all information concerning the business, including the status of product
development efforts, properties, results of operations and personnel of such
Party, as such requesting Party may reasonably request. No information or
knowledge obtained by any Party in any investigation pursuant to this Section
5.3 will affect or be deemed to modify any representation or warranty contained
herein or the conditions to the obligations of the parties to consummate the
Merger.

5.4 No Solicitation.

(a)From and after the date of this Agreement until the approval of the
Company's stockholders at the Company Stockholders' Meeting or termination of
this Agreement pursuant to Article VII, Company and its subsidiaries will not,
nor will they authorize or permit any of their respective officers, directors,
affiliates or employees or any investment banker, attorney or other advisor or
representative retained by any of them to, directly or indirectly (i) solicit,
initiate, encourage or induce the making, submission or announcement of any
Acquisition Proposal (as defined below), (ii) participate in any discussions or
negotiations regarding, or furnish to any person any non-public information
with respect to, or take any other action to facilitate any inquiries or the
making of any proposal that constitutes or may reasonably be expected to lead
to, any Acquisition Proposal, (iii) engage in discussions with any person with
respect to any Acquisition Proposal, (iv) subject to Section 5.2(c), approve,
endorse or recommend any Acquisition Proposal or (v) enter into any letter of
intent or similar document or any contract, agreement or commitment
contemplating or otherwise relating to any Acquisition Transaction (as defined
below); provided, however, that this Section 5.4(a) shall not prohibit Company
from furnishing nonpublic information regarding Company and its subsidiaries
to, entering into a confidentiality agreement with or entering into discussions
with, any person or group in response to a Superior Offer submitted by such
person or group (and not withdrawn) if (1) neither Company nor any
representative of Company and its subsidiaries shall have violated any of the
restrictions set forth in this Section 5.4, (2) the Board of Directors of
Company concludes in good faith, after consultation with its outside legal
counsel, that such action is necessary in order for the Board of Directors of
Company to comply with its fiduciary

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obligations to Company's stockholders under applicable law, (3) (x) at least 48
hours prior to furnishing any such nonpublic information to, or entering into
discussions or negotiations with, such person or group, Company gives Parent
written notice of the identity of such person or group and of Company's
intention to furnish nonpublic information to, or enter into discussions or
negotiations with, such person or group and (y) Company receives from such
person or group an executed confidentiality agreement containing customary
limitations on the use and disclosure of all nonpublic written and oral
information furnished to such person or group by or on behalf of Company, and
(4) contemporaneously with furnishing any such nonpublic information to such
person or group, Company furnishes such nonpublic information to Parent (to the
extent such nonpublic information has not been previously furnished by Company
to Parent). Company and its subsidiaries will immediately cease any and all
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any Acquisition Proposal. Without limiting the
foregoing, it is understood that any violation of the restrictions set forth in
the preceding two sentences by any officer or director of Company or any of its
subsidiaries or any investment banker, attorney or other advisor or
representative of Company or any of its subsidiaries shall be deemed to be a
breach of this Section 5.4 by Company. In addition to the foregoing, Company
shall (i) provide Parent with at least forty-eight (48) hours prior notice (or
such lesser prior notice as provided to the members of Company's Board of
Directors but in no event less than eight hours) of any meeting of Company's
Board of Directors at which Company's Board of Directors is reasonably expected
to consider a Superior Offer and (ii) provide Parent with at least two (2)
business days prior written notice (or such lesser prior notice as provided to
the members of Company's Board of Directors but in no event less than eight (8)
hours) of a meeting of Company's Board of Directors at which Company's Board of
Directors is reasonably expected to recommend a Superior Offer to its
stockholders.

For purposes of this Agreement, "Acquisition Proposal" shall mean any offer
or proposal (other than an offer or proposal by Parent) relating to any
Acquisition Transaction. For the purposes of this Agreement, "Acquisition
Transaction" shall mean any transaction or series of related transactions other
than the transactions contemplated by this Agreement involving: (A) any
acquisition or purchase from Company by any person or "group" (as defined under
Section 13(d) of the Exchange Act and the rules and regulations thereunder) of
more than a 10% interest in the total outstanding voting securities of Company
or any of its subsidiaries or any tender offer or exchange offer that if
consummated would result in any person or "group" (as defined under Section
13(d) of the Exchange Act and the rules and regulations thereunder)
beneficially owning 10% or more of the total outstanding voting securities of
Company or any of its subsidiaries or any merger, consolidation, business
combination or similar transaction involving Company pursuant to which the
stockholders of Company immediately preceding such transaction hold less than
90% of the equity interests in the surviving or resulting entity of such
transaction; (B) any sale, lease (other than in the ordinary course of
business), exchange, transfer, license (other than in the ordinary course of
business), acquisition or disposition of more than 10% of the assets of
Company; or (C) any liquidation or dissolution of Company.

(b)In addition to the obligations of Company set forth in paragraph (a)
of this Section 5.4, Company as promptly as practicable shall advise Parent
orally and in writing of any request received by Company for non-public
information which Company reasonably believes would lead to an Acquisition
Proposal or of any Acquisition Proposal, or any inquiry received by Company
with respect to or which Company reasonably should believe would lead to any
Acquisition Proposal, the material terms and conditions of such request,
Acquisition Proposal or inquiry, and the identity of the person or group making
any such request, Acquisition Proposal or inquiry. Company will keep Parent
informed in all material respects of the status and details (including material
amendments or proposed amendments) of any such request, Acquisition Proposal or
inquiry.

5.5 Public Disclosure. Parent and Company will consult with each other, and
to the extent practicable, agree, before issuing any press release or otherwise
making any public statement with respect to the Merger, this Agreement or an
Acquisition Proposal and will not issue any such press release or make any such
public statement prior to such consultation, except as may be required by law
or any listing agreement with a national securities exchange. The parties have
agreed to the text of the joint press release announcing the signing of this
Agreement.

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5.6 Reasonable Efforts; Notification.

(a)Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use all reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to assist
and cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Merger and the other transactions contemplated by this
Agreement, including using reasonable efforts to accomplish the following: (i)
the taking of all reasonable acts necessary to cause the conditions precedent
set forth in Article VI to be satisfied, (ii) the obtaining of all necessary
actions or nonactions, waivers, consents, approvals, orders and authorizations
from Governmental Entities and the making of all necessary registrations,
declarations and filings (including registrations, declarations and filings
with Governmental Entities, if any) and the taking of all reasonable steps as
may be necessary to avoid any suit, claim, action, investigation or proceeding
by any Governmental Entity, (iii) the obtaining of all consents, approvals or
waivers from third parties required as a result of the transactions
contemplated in this Agreement, (iv) the defending of any suits, claims,
actions, investigations or proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transactions contemplated
hereby, including seeking to have any stay or temporary restraining order
entered by any court or other Governmental Entity vacated or reversed and (v)
the execution or delivery of any additional instruments reasonably necessary to
consummate the transactions contemplated by, and to fully carry out the
purposes of, this Agreement. In connection with and without limiting the
foregoing, Company and its Board of Directors shall, if any state takeover
statute or similar statute or regulation is or becomes applicable to the
Merger, this Agreement or any of the transactions contemplated by this
Agreement, use all reasonable efforts to ensure that the Merger and the other
transactions contemplated by this Agreement may be consummated as promptly as
practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on the Merger, this Agreement
and the transactions contemplated hereby. Notwithstanding anything herein to
the contrary, nothing in this Agreement shall be deemed to require Parent or
Company or any subsidiary or affiliate thereof to agree to any divestiture by
itself or any of its affiliates of shares of capital stock or of any business,
assets or property, or the imposition of any material limitation on the ability
of any of them to conduct their business or to own or exercise control of such
assets, properties and stock.

(b)Company shall give prompt notice to Parent upon becoming aware that
any representation or warranty made by it contained in this Agreement has
become untrue or inaccurate, or of any failure of Company to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement, in each case, such that
the conditions set forth in Section 6.3(a) or 6.3(b) would not be satisfied;
provided, however, that no such notification shall affect the representations,
warranties, covenants or agreements of the parties or the conditions to the
obligations of the parties under this Agreement.

(c)Parent shall give prompt notice to Company (i) upon becoming aware
that any representation or warranty made by it or Merger Sub contained in this
Agreement has become untrue or inaccurate, or of any failure of Parent or
Merger Sub to comply with or satisfy in any material respect any covenant,
condition or agreement to be complied with or satisfied by it under this
Agreement, in each case, such that the conditions set forth in Section 6.2(a)
or 6.2(b) would not be satisfied or (ii) in the event Parent intends to
undertake a transaction that would require the vote of Parent stockholders;
provided, however, that no such notification shall affect the representations,
warranties, covenants or agreements of the parties or the conditions to the
obligations of the parties under this Agreement.

5.7 Third Party Consents. As soon as practicable following the date hereof,
Parent and Company will each use its commercially reasonable efforts to obtain
any consents, waivers and approvals under any of its or its subsidiaries'
respective agreements, contracts, licenses or leases required to be obtained in
connection with the consummation of the transactions contemplated hereby.

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5.8 Stock Options, Warrants and Employee Benefits.

(a)Stock Options. At the Effective Time, each outstanding option to
purchase shares of Company Common Stock (each, a "Company Stock Option") under
the Company Option Plans, whether or not vested, shall by virtue of the Merger
be assumed by Parent. Each Company Stock Option so assumed by Parent under this
Agreement will continue to have, and be subject to, the same terms and
conditions of such options immediately prior to the Effective Time (including,
without limitation, any repurchase rights or vesting provisions and provisions
regarding the acceleration of vesting on certain transactions, other than the
transactions contemplated by this Agreement), except that (i) each Company
Stock Option will be exercisable (or will become exercisable in accordance with
its terms) for that number of whole shares of Parent Common Stock equal to the
product of the number of shares of Company Common Stock that were issuable upon
exercise of such Company Stock Option immediately prior to the Effective Time
multiplied by the Exchange Ratio, rounded down to the nearest whole number of
shares of Parent Common Stock and (ii) the per share exercise price for the
shares of Parent Common Stock issuable upon exercise of such assumed Company
Stock Option will be equal to the quotient determined by dividing the exercise
price per share of Company Common Stock at which such Company Stock Option was
exercisable immediately prior to the Effective Time by the Exchange Ratio,
rounded up to the nearest tenth of a cent.

(b)Warrants. At the Effective Time, the Warrants will be assumed by
Parent. Each Warrant so assumed by Parent under this Agreement will continue to
have, and be subject to, the same terms and conditions set forth in the
applicable warrant agreement immediately prior to the Effective Time
(including, without limitation, any repurchase rights or vesting provisions),
except that (i) each Warrant will be exercisable (or will become exercisable in
accordance with its terms) for that number of whole shares of Parent Common
Stock equal to the product of the number of shares of Company Common Stock that
were issuable upon exercise of such Warrant immediately prior to the Effective
Time multiplied by the Exchange Ratio, rounded to the nearest whole number of
shares of Parent Common Stock and (ii) the per share exercise price for the
share of Parent Common Stock issuable upon exercise of such assumed Warrant
will be equal to the quotient determined by dividing the exercise price per
share of Company Common Stock at which such Warrant was exercisable immediately
prior to the Effective Time by the Exchange Ratio, rounded to the nearest whole
cent. Company agrees to provide the holders of Company Warrants with any and
all notices required as a result of the Merger and the transactions
contemplated thereby.

(c)ESPP. Prior to the Effective Time, outstanding purchase rights under
Company's ESPP shall be exercised in accordance with the terms of the ESPP.
With respect to each share of Company Common Stock purchased pursuant to the
ESPP, such exercise shall by virtue of the Merger, and without any action on
the part of the holder thereof, be converted into the right to receive a number
of shares of Parent Common Stock equal to the Exchange Ratio without issuance
of certificates representing issued and outstanding shares of Company Common
Stock to ESPP participants. Company agrees that it shall terminate the ESPP
immediately following the aforesaid purchase of shares of Company Common Stock
thereunder.

5.9 Form S-8. Parent agrees to file, if available for use by Parent, a
registration statement on Form S-8 for the shares of Parent Common Stock
issuable with respect to assumed Company Stock Options as soon as is reasonably
practicable after the Effective Time and in any case within 30 days of the
Effective Time.

5.10 Indemnification. From and after the Effective Time, Parent will cause
the Surviving Corporation to fulfill and honor in all respects the obligations
of Company pursuant to any indemnification agreements between Company and its
directors and officers in effect immediately prior to the Effective Time (the
"Indemnified Parties") and any indemnification provisions under the Company
Charter Documents as in effect on the date hereof. The Certificate of
Incorporation and Bylaws of the Surviving Corporation will contain provisions
with respect to exculpation and indemnification that are at least as favorable
to the Indemnified Parties as those contained in the Company Charter Documents
as in effect on the date hereof, which provisions will not be amended, repealed
or otherwise modified for a period of six (6) years from the Effective Time in
any manner that would adversely affect the rights thereunder of individuals
who, immediately prior to the

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Effective Time, were directors, officers, employees or agents of Company,
unless such modification is required by law. For a period of six years after
the Effective Time, Parent will cause the Surviving Corporation to use its
commercially reasonable efforts to maintain in effect, if available, directors'
and officers' liability insurance covering those persons who are currently
covered by Company's directors' and officers' liability insurance policy on
terms substantially similar to those applicable to the current directors and
officers of Company.

5.11 Nasdaq Listing. Parent agrees to cause the listing on Nasdaq the shares
of Parent Common Stock issuable, and those required to be reserved for
issuance, in connection with the Merger, subject to official notice of
issuance.

5.12 Company Affiliate Agreement. Set forth in Section 5.12 the Company
Schedule is a list of those persons who may be deemed to be, in Company's
reasonable judgment, affiliates of Company within the meaning of Rule 145
promulgated under the Securities Act (each, a "Company Affiliate"). Company
will provide Parent with such information and documents as Parent reasonably
requests for purposes of reviewing such list. Each Company Affiliate Agreement
will be in full force and effect as of the Effective Time. Parent will be
entitled to place appropriate legends on the certificates evidencing any Parent
Common Stock to be received by a Company Affiliate pursuant to the terms of
this Agreement, and to issue appropriate stop transfer instructions to the
transfer agent for the Parent Common Stock, consistent with the terms of the
Company Affiliate Agreement.

5.13 Regulatory Filings; Reasonable Efforts. As soon as may be reasonably
practicable, Company and Parent each shall file with the United States Federal
Trade Commission (the "FTC") and the Antitrust Division of the United States
Department of Justice ("DOJ") Notification and Report Forms relating to the
transactions contemplated herein as required by the HSR Act, as well as
comparable pre-merger notification forms required by the merger notification or
control laws and regulations of any applicable jurisdiction, as agreed to by
the parties. Company and Parent each shall promptly (a) supply the other with
any information which may be required in order to effectuate such filings and
(b) supply any additional information which reasonably may be required by the
FTC, the DOJ or the competition or merger control authorities of any other
jurisdiction and which the parties may reasonably deem appropriate; provided,
however, that Parent shall not be required to agree to any divestiture by
Parent or Company or any of Parent's subsidiaries or affiliates of shares of
capital stock or of any business, assets or property of Parent or its
subsidiaries or affiliates or of Company, its affiliates, or the imposition of
any material limitation on the ability of any of them to conduct their
businesses or to own or exercise control of such assets, properties and stock.

5.14 Termination of 401(k) Plan. Company and its Affiliates, as applicable,
each agrees to terminate its 401(k) plan immediately prior to Closing, unless
Parent, in its sole and absolute discretion, agrees to sponsor and maintain
such plans by providing Company with written notice of such election at least
three (3) days before the Effective Time. Unless Parent provides such notice to
Company, Parent shall receive from Company evidence that Company's and each
Affiliate's (as applicable) 401(k) plan has been terminated pursuant to
resolutions of each such entity's Board of Directors (the form and substance of
which resolutions shall be subject to review and approval of Parent), effective
as of the day immediately preceding the Closing Date.

5.15 Parent Stockholders' Meeting. Promptly after the date hereof, Parent
will take all action necessary in accordance with Delaware Law and the Parent
Charter Documents to convene the Parent Stockholders' Meeting to be held as
promptly as practicable, and in any event (to the extent permissible under
applicable law) within 45 days after the declaration of effectiveness of the S-
4, for the purpose of voting upon the Merger and this Agreement. Parent will
use its commercially reasonable efforts to solicit from its stockholders
proxies in favor of the Merger and will take all other action necessary or
advisable to secure the vote or consent of its stockholders required by the
rules of Nasdaq or Delaware Law to obtain such approvals. Notwithstanding
anything to the contrary contained in this Agreement, Parent may adjourn or
postpone the Parent Stockholders' Meeting to the extent necessary to ensure
that any necessary supplement or amendment to the Prospectus/Proxy Statement is
provided to Parent's stockholders in advance of a vote on the issuance of such
stock or, if as of the time for which the Parent Stockholders' Meeting is
originally scheduled (as set forth in the

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Prospectus/Proxy Statement) there are insufficient shares of Parent Common
Stock represented (either in person or by proxy) to constitute a quorum
necessary to conduct the business of the Parent Stockholders' Meeting. Parent
shall ensure that the Parent Stockholders' Meeting is called, noticed, convened
and conducted, and that all proxies solicited by Parent in connection with the
Parent Stockholders' Meeting are solicited, in compliance with Delaware Law,
the Parent Charter Documents, the rules of Nasdaq and all other applicable
legal requirements.

5.16 Directors. Promptly following the Effective Time, Parent will cause two
individuals selected by the Company, subject to Parent's reasonable approval,
to be designated as directors of Parent, one of which shall be Mr. A. Nathaniel
Goldhaber.

5.17 Disposition of Paytech Business.

The Company will use its commercially reasonable efforts to consummate the
Payt Disposition and will inform Parent promptly, and in no event later than
one business day after, material developments relating thereto. Parent will
cooperate with Company in its efforts to consummate the Paytech Disposition
including by (i) providing assistance with respect to any proxy or information
statement required in connection with the Paytech Disposition and including
such proxy or information statement in the Proxy Statement and Form S-4 and
(ii) cooperating in the filing of any tax election or Tax Returns required or
deemed advisable by the Company, so long as such elections or Tax Returns do
not materially adversely affect Parent.

(a)The Company shall have the right, but not the obligation, prior to
the Effective Time, to dispose of the Paytech Business (as defined below) by
transferring it to the stockholders of the Company by transferring the Paytech
Business to a newly formed affiliate of the Company ("Payt") and distributing
the ownership of Payt to the stockholders of the Company (such transfer and
distribution, the "Payt Spin") in a transaction that is treated as immediately
taxable in full to the Company and the stockholders of the Company for federal
income tax purposes. The decision as to whether and under what terms to
implement a Payt Spin will be the Company's; provided, however, that Parent's
consent shall be required in connection with any material deviation from the
terms and conditions of a Payt Spin, as applicable, set forth on Schedule 1. In
the event the parties hereto disagree as to whether or not the terms and
conditions of a Payt Spin materially deviate from the terms and conditions set
forth on Schedule 1 or in the event the parties hereto disagree on the amount
of cash to be reserved for the Payt Sale Taxes (as defined in subsection
5.18(b)), either party shall be entitled to submit such dispute or disagreement
for final and binding determination to a mutually acceptable third-party
arbitrator, such determination to be made within ten (10) days of the
submission to such arbitrator by either party. If the parties are unable to
mutually agree upon an arbitrator within one week of a party's notification to
the other party of its desire to arbitrate such a dispute, then each party
shall have one week to select an arbitrator and such two arbitrators shall have
one week to select a third arbitrator who shall have final authority to resolve
such dispute within ten days of such arbitrator's selection based upon the
terms and conditions set forth on Schedule 1. The parties shall share equally
in the fees and expenses of such arbitrators, and such fees and expenses shall
be paid by the parties prior to the Effective Time.

(b)The "Paytech Business" shall consist of the assets and liabilities
set forth on Schedule 1. The Exchange Ratio or amount of cash to be transferred
in the Payt Spin shall be appropriately adjusted such that Parent and the
Company (after utilizing all available Company tax attributes) pay, or be
liable for, no Paytech Spin Taxes. The "Paytech Spin Taxes" shall equal the
income and other Taxes incurred and to be incurred by Parent, the Company or
any affiliates thereof in connection with the Payt Spin. The Company and Parent
shall mutually determine the amount of the Paytech Spin Taxes prior to the
Closing Date. If the Company and Parent fail to reach an agreement within one
(1) week prior to the scheduled Closing Date, either party shall be entitled to
submit the matter to a mutually acceptable third-party arbitrator. If the
parties are unable to mutually agree upon an arbitrator within one (1) week of
a party's notification to the other party of its desire to arbitrate such a
dispute, then each party shall have one (1) week to select an arbitrator and
such two arbitrators shall have ten (10) days to select a third arbitrator who
shall have final authority to resolve such dispute within ten (10) days of such
arbitrator's selection, but before the Closing Date. The parties shall share
equally in the fees

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and expenses of such arbitrators, and such fees and expenses shall be paid by
the parties prior to the Effective Time.

5.18 Employment Arrangements and Items.

(a)Retention Options. Prior to the Effective Time, the Company shall, if
requested by Parent, issue Retention Options to employees of the Company
provided, that the form of the option agreement governing such Retention
Options shall have been delivered to Parent prior to being furnished to such
person and such agreement shall comply with the restrictions set forth in the
definition of "Retention Options."

(b)Benefit Arrangements. Parent covenants and agrees that to the extent
permitted by applicable law and to the extent the existing benefit plans and
arrangements provided by Company to its employees are terminated on or after
the Effective Time, such employees shall be entitled to benefits which are
available or subsequently become available to Parent's employees, and on a
basis which is on parity with Parent's employees. For purposes of satisfying
the terms and conditions of such plans, Parent shall give full credit for
eligibility, vesting or benefit accrual to the extent possible for each
participant's period of service at the Company prior to the Effective Time.

(c)"Retention Options." Means options to be granted to employees of the
Company designated by Parent which options shall (i) be granted under the
Company's 199 Stock Incentive Plan, (ii) shall have no acceleration or similar
provisions, (iii) shall vest as specified by Parent, (iv) shall have an
exercise price specified by Parent and (v) which shall be otherwise in form and
substance satisfactory to Parent.

ARTICLE VI

CONDITIONS TO THE MERGER

6.1 Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction at or prior to the Closing Date of the
following conditions:

(a)Company Stockholder Approval. This Agreement shall have been approved
and adopted, and the Merger shall have been duly approved, by the requisite
vote under applicable law, by the stockholders of Company.

(b)Parent Stockholder Approval. This Agreement shall have been approved
and adopted, and the Merger shall have been duly approved, by the requisite
vote under applicable law, by the stockholders of Parent.

(c)Registration Statement Effective; Proxy Statement. The SEC shall have
declared the S-4 effective. No stop order suspending the effectiveness of the
S-4 or any part thereof shall have been issued and no proceeding for that
purpose, and no similar proceeding in respect of the Proxy
Statement/Prospectus, shall have been initiated or threatened in writing by the
SEC.

(d)No Order; HSR Act. No Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, executive
order, decree, injunction or other order (whether temporary, preliminary or
permanent) which is in effect and which has the effect of making the Merger
illegal or otherwise prohibiting consummation of the Merger. All waiting
periods, if any, under the HSR Act relating to the transactions contemplated
hereby will have expired or terminated early and all material foreign antitrust
approvals required to be obtained prior to the Merger in connection with the
transactions contemplated hereby shall have been obtained.

(e)Tax Opinions. Parent and Company shall each have received written
opinions from their respective tax counsel (Wilson Sonsini Goodrich & Rosati,
Professional Corporation, and Morrison & Foerster

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LLP, respectively), in form and substance reasonably satisfactory to them, to
the effect that the Merger will constitute a reorganization within the meaning
of Section 368(a) of the Code and such opinions shall not have been withdrawn;
provided, however, that if the counsel to either Parent or Company does not
render such opinion, this condition shall nonetheless be deemed to be satisfied
with respect to such party if counsel to the other party renders such opinion
to such party. The parties to this Agreement agree to make such reasonable
representations as requested by such counsel for the purpose of rendering such
opinions.

(f)Nasdaq Listing. The shares of Parent Common Stock issuable to the
stockholders of Company pursuant to this Agreement and such other shares
required to be reserved for issuance in connection with the Merger shall have
been authorized for listing on Nasdaq upon official notice of issuance.

6.2 Additional Conditions to Obligations of Company. The obligation of
Company to consummate and effect the Merger shall be subject to the
satisfaction at or prior to the Closing Date of each of the following
conditions, any of which may be waived, in writing, exclusively by Company:

(a)Representations and Warranties. Each representation and warranty of
Parent and Merger Sub contained in this Agreement (i) shall have been true and
correct as of the date of this Agreement and (ii) shall be true and correct on
and as of the Closing Date with the same force and effect as if made on the
Closing Date except (A) in each case, or in the aggregate, as does not
constitute a Material Adverse Effect on Parent and Merger Sub, (B) for changes
contemplated by this Agreement and (C) for those representations and warranties
which address matters only as of a particular date (which representations shall
have been true and correct (subject to the qualifications as set forth in the
preceding clause A) as of such particular date) (it being understood that, for
purposes of determining the accuracy of such representations and warranties,
(i) all "Material Adverse Effect" qualifications and other qualifications based
on the word "material" or similar phrases contained in such representations and
warranties shall be disregarded and (ii) any update of or modification to the
Parent Schedule made or purported to have been made after the date of this
Agreement shall be disregarded). Company shall have received a certificate with
respect to the foregoing signed on behalf of Parent by an authorized officer of
Parent.

(b)Agreements and Covenants. Parent and Merger Sub shall have performed
or complied in all material respects with all agreements and covenants required
by this Agreement to be performed or complied with by them on or prior to the
Closing Date, and Company shall have received a certificate to such effect
signed on behalf of Parent by an authorized officer of Parent.

6.3 Additional Conditions to the Obligations of Parent and Merger Sub. The
obligations of Parent and Merger Sub to consummate and effect the Merger shall
be subject to the satisfaction at or prior to the Closing Date of each of the
following conditions, any of which may be waived, in writing, exclusively by
Parent:

(a)Representations and Warranties. Each representation and warranty of
Company contained in this Agreement (i) shall have been true and correct as of
the date of this Agreement and (ii) shall be true and correct on and as of the
Closing Date with the same force and effect as if made on and as of the Closing
Date except (A) in each case, or in the aggregate, as does not constitute a
Material Adverse Effect on Company provided, however, such Material Adverse
Effect qualifier shall be inapplicable with respect to representations and
warranties contained in Section 2.3, (B) for changes contemplated by this
Agreement and (C) for those representations and warranties which address
matters only as of a particular date (which representations shall have been
true and correct (subject to the qualifications as set forth in the preceding
clause A) as of such particular date) (it being understood that, for purposes
of determining the accuracy of such representations and warranties, (i) all
"Material Adverse Effect" qualifications and other qualifications based on the
word "material" or similar phrases contained in such representations and
warranties shall be disregarded and (ii) any update of or modification to the
Company Schedule made or purported to have been made after the date of this
Agreement shall be disregarded). Parent shall have received a certificate with
respect to the foregoing signed on behalf of Company by an authorized officer
of Company.

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(b)Agreements and Covenants. Company shall have performed or complied in
all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it at or prior to the Closing
Date, and Parent shall have received a certificate to such effect signed on
behalf of Company by the Chief Executive Officer and the Chief Financial
Officer of Company.

(c)Affiliate Agreements. Each of the Company Affiliates shall have
entered into the Company Affiliate Agreement in the form attached hereto as
Exhibit B and each of such agreements will be in full force and effect as of
the Effective Time.

(d)Consents. Company shall have obtained all consents, waivers and
approvals required in connection with the consummation of the transactions
contemplated hereby in connection with the agreements, contracts, licenses or
leases set forth on Section 6.3(e) of the Company Schedule.

(e)Noncompetition Agreements. Parent shall have received from each of
the persons identified on Exhibit C a noncompetition agreement in a form
provided by the Parent and approved by the Company.

ARTICLE VII

TERMINATION, AMENDMENT AND WAIVER

7.1 Termination. This Agreement may be terminated at any time prior to the
Effective Time, whether before or after the requisite approval of the
stockholders of Company:

(a)by mutual written consent duly authorized by the Boards of Directors
of Parent and Company;

(b)by either Company or Parent if the Merger shall not have been
consummated by September 30, 2000 for any reason; provided, however, that the
right to terminate this Agreement under this Section 7.1(b) shall not be
available to any party whose action or failure to act has been a principal
cause of or resulted in the failure of the Merger to occur on or before such
date and such action or failure to act constitutes a breach of this Agreement;

(c)by either Company or Parent if a Governmental Entity shall have
issued an order, decree or ruling or taken any other action, in any case
having the effect of permanently restraining, enjoining or otherwise
prohibiting the Merger, which order, decree, ruling or other action is final
and nonappealable;

(d)by either Company or Parent if the required approval of the
stockholders of Company or Parent contemplated by this Agreement shall not
have been obtained by reason of the failure to obtain the required vote at a
meeting of Company stockholders duly convened therefor or at any adjournment
thereof; provided, however, that the right to terminate this Agreement under
this Section 7.1(d) shall not be available to Company where the failure to
obtain Company stockholder approval shall have been caused by the action or
failure to act of Company and such action or failure to act constitutes a
breach by Company of this Agreement;

(e)by Company, upon a breach of any representation, warranty, covenant
or agreement on the part of Parent set forth in this Agreement, or if any
representation or warranty of Parent shall have become untrue, in either case
such that the conditions set forth in Section 6.2(a) or Section 6.2(b) would
not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, provided, that if such
inaccuracy in Parent's representations and warranties or breach by Parent is
curable by Parent through the exercise of its commercially reasonable efforts,
then Company may not terminate this Agreement under this Section 7.1(e) for
thirty (30) days after delivery of written notice from Company to Parent of
such breach, provided Parent continues to exercise commercially reasonable
efforts to cure such breach (it being understood that Company may not
terminate this Agreement pursuant to this paragraph (e) if it shall have
materially breached this Agreement or if such breach by Parent is cured during
such thirty (30)-day period);

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(f)by Parent, upon a breach of any representation, warranty, covenant or
agreement on the part of Company set forth in this Agreement, or if any
representation or warranty of Company shall have become untrue, in either case
such that the conditions set forth in Section 6.3(a) or Section 6.3(b) would
not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, provided, that if such
inaccuracy in Company's representations and warranties or breach by Company is
curable by Company through the exercise of its commercially reasonable efforts,
then Parent may not terminate this Agreement under this Section 7.1(f) for
thirty (30) days after delivery of written notice from Parent to Company of
such breach, provided Company continues to exercise commercially reasonable
efforts to cure such breach (it being understood that Parent may not terminate
this Agreement pursuant to this paragraph (f) if it shall have materially
breached this Agreement or if such breach by Company is cured during such
thirty (30)-day period);

(g)by Parent, upon a breach of the provisions of Section 5.4 of this
Agreement;

(h)by Parent if a Triggering Event (as defined below) shall have
occurred; or

(i)by either Company or Parent if the required approval by the
stockholders of Parent contemplated by this Agreement shall not have been
obtained by reason of the failure to obtain the required vote at a meeting of
Parent stockholders duly convened therefor or at any adjournment thereof;
provided, however, that the right to terminate this Agreement under this
Section 7.1(i) shall not be available to Parent where the failure to obtain
Parent stockholder approval shall have been caused by the action or failure to
act of parent and such action or failure to act constitutes a breach by Parent
of this Agreement.

For the purposes of this Agreement, a "Triggering Event" shall be deemed to
have occurred if: (i) the Board of Directors of Company or any committee
thereof shall for any reason have withdrawn or shall have amended or modified
in a manner adverse to Parent its unanimous recommendation in favor of, the
adoption and approval of the Agreement or the approval of the Merger; (ii)
Company shall have failed to include in the Proxy Statement/Prospectus the
unanimous recommendation of the Board of Directors of Company in favor of the
adoption and approval of the Agreement and the approval of the Merger; (iii)
Board of Directors of Company fails to reaffirm its unanimous recommendation in
favor of the adoption and approval of the Agreement and the approval of the
Merger within five (5) business days after Parent requests in writing that such
recommendation be reaffirmed at any time following the announcement of an
Acquisition Proposal; (iv) the Board of Directors of Company or any committee
thereof shall have approved or recommended any Acquisition Proposal; (v)
Company shall have entered into any letter of intent or similar document or any
agreement, contract or commitment accepting any Acquisition Proposal; or (vi) a
tender or exchange offer relating to securities of Company shall have been
commenced by a person unaffiliated with Parent and Company shall not have sent
to its securityholders pursuant to Rule 14e-2 promulgated under the Securities
Act, within ten (10) business days after such tender or exchange offer is first
published sent or given, a statement disclosing that Company recommends
rejection of such tender or exchange offer.

7.2 Notice of Termination; Effect of Termination. Any termination of this
Agreement under Section 7.1 above will be effective immediately upon (or, if
the termination is pursuant to Section 7.1(e) or Section 7.1(f) and the proviso
therein is applicable, thirty (30) days after) the delivery of written notice
of the terminating party to the other parties hereto. In the event of the
termination of this Agreement as provided in Section 7.1, this Agreement shall
be of no further force or effect, except (i) as set forth in this Section 7.2,
Section 7.3 and Article 8 (General Provisions), each of which shall survive the
termination of this Agreement, and (ii) nothing herein shall relieve any party
from liability for any intentional or willful breach of this Agreement. No
termination of this Agreement shall affect the obligations of the parties
contained in the Confidentiality Agreement, all of which obligations shall
survive termination of this Agreement in accordance with their terms.

7.3 Fees and Expenses.

(a)General. Except as set forth in this Section 7.3, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such

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expenses whether or not the Merger is consummated; provided, however, that
Parent and Company shall share equally all fees and expenses, other than
attorneys' and accountants fees and expenses, incurred in relation to the
printing and filing (with the SEC) of the Proxy Statement/Prospectus (including
any preliminary materials related thereto) and the S-4 (including financial
statements and exhibits) and any amendments or supplements thereto.

(b)Company Payments.

(i)Company shall pay to Parent in immediately available funds, within
one (1) business day after demand by Parent, an amount equal to $7,850,000 (the
"Termination Fee") if this Agreement is terminated by Parent pursuant to
Section 7.1(g) or (h).

(ii)Company shall pay Parent in immediately available funds, within
two (2) business days after demand by Parent, an amount equal to the
Termination Fee, if this Agreement is terminated by Parent or Company, as
applicable, pursuant to Sections 7.1(b) or (d) and any of the following shall
occur:

a)if following the date hereof and prior to the termination of
this Agreement, a third party has announced an Acquisition Proposal and within
twelve (12) months following the termination of this Agreement a Company
Acquisition (as defined below) is consummated; or

b)if following the date hereof and prior to the termination of
this Agreement, a third party has announced an Acquisition Proposal and within
twelve (12) months following the termination of this Agreement Company enters
into an agreement or letter of intent providing for a Company Acquisition.

Notwithstanding the foregoing, Parent shall not be entitled to
Termination Fee with respect to Section 7.1(b) if Parent's or Merger Sub's
action or failure to act has been the principal cause of or resulted in the
failure of the Merger to occur on or before September 30, 2000 and such action
or failure to act constitutes a breach of this Agreement.

(iii)Company acknowledges that the agreements contained in this
Section 7.3(b) are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, Parent would not enter into this
Agreement; accordingly, if Company fails to pay in a timely manner the amounts
due pursuant to this Section 7.3(b) and, in order to obtain such payment,
Parent makes a claim that results in a judgment against Company for the amounts
set forth in this Section 7.3(b), Company shall pay to Parent its reasonable
costs and expenses (including reasonable attorneys' fees and expenses) in
connection with such suit, together with interest on the amounts set forth in
this Section 7.3(b) at the prime rate of The Chase Manhattan Bank in effect on
the date such payment was required to be made. Payment of the fees described in
this Section 7.3(b) shall not be in lieu of damages incurred in the event of
breach of this Agreement. For the purposes of this Agreement, "Company
Acquisition" shall mean any of the following transactions (other than the
transactions contemplated by this Agreement): (i) a merger, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving Company pursuant to which the stockholders of Company
immediately preceding such transaction hold less than 50% of the aggregate
equity interests in the surviving or resulting entity of such transaction, (ii)
a sale or other disposition by Company of assets representing in excess of 50%
of the aggregate fair market value of Company's business immediately prior to
such sale or (iii) the acquisition by any person or group (including by way of
a tender offer or an exchange offer or issuance by Company), directly or
indirectly, of beneficial ownership or a right to acquire beneficial ownership
of shares representing in excess of 50% of the voting power of the then
outstanding shares of capital stock of Company.

7.4 Amendment. Subject to applicable law, this Agreement may be amended by
the parties hereto at any time by execution of an instrument in writing signed
on behalf of each of Parent and Company.

7.5 Extension; Waiver. At any time prior to the Effective Time, any party
hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other

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parties hereto, (ii) waive any inaccuracies in the representations and
warranties made to such party contained herein or in any document delivered
pursuant hereto and (iii) waive compliance with any of the agreements or
conditions for the benefit of such party contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such party. Delay in
exercising any right under this Agreement shall not constitute a waiver of such
right.

ARTICLE VIII

GENERAL PROVISIONS

8.1 Non-Survival of Representations and Warranties. The representations and
warranties of Company, Parent and Merger Sub contained in this Agreement shall
terminate at the Effective Time, and only the covenants that by their terms
survive the Effective Time shall survive the Effective Time.

8.2 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or sent via telecopy (receipt confirmed) to the parties at
the following addresses or telecopy numbers (or at such other address or
telecopy numbers for a party as shall be specified by like notice):

(a)if to Parent or Merger Sub, to:

MyPoints, Inc.
100 California Street, 11th Floor
San Francisco, California 94111
Attention: Layton Han
Telephone No.:
Fax No.:

with a copy to:

Wilson Sonsini Goodrich & Rosati
Professional Corporation
One Market, Spear Street Tower
San Francisco, California 94105
Attention: Michael J. Kennedy
Telephone No.: (415) 947-2000
Fax No.: (650) 493-6811

(b)if to Company, to:

Attention:
Telephone No.:
Fax No.:

with a copy to:

Morrison & Foerster LLP
425 Market Street
San Francisco, CA 94105-2482
Attention: John W. Campbell, III
Telephone No.: (415) 268-7000
Fax No.: (415) 268-7522

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8.3 Interpretation; Knowledge.

(a)When a reference is made in this Agreement to Exhibits, such
reference shall be to an Exhibit to this Agreement unless otherwise indicated.
When a reference is made in this Agreement to Sections, such reference shall be
to a Section of this Agreement. Unless otherwise indicated the words "include,"
"includes" and "including" when used herein shall be deemed in each case to be
followed by the words "without limitation." The table of contents and headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement. When
reference is made herein to "the business of" an entity, such reference shall
be deemed to include the business of all direct and indirect subsidiaries of
such entity. Reference to the subsidiaries of an entity shall be deemed to
include all direct and indirect subsidiaries of such entity.

(b)For purposes of this Agreement, the term "knowledge" means with
respect to a party hereto, with respect to any matter in question, that any of
the executive officers of such party has actual knowledge of such matter.

(c)For purposes of this Agreement, the term "Material Adverse Effect"
when used in connection with an entity means any change, event, violation,
inaccuracy, circumstance or effect, individually or when aggregated with other
changes, events, violations, inaccuracies, circumstances or effects, that is
materially adverse to the business, assets (including intangible assets),
capitalization, financial condition or results of operations of such entity and
its subsidiaries taken as a whole; provided that the failure of Parent or
Company to achieve the current street expectations for any fiscal quarter or a
decline in stock price, shall not by itself constitute a Material Adverse
Effect.

(d)For purposes of this Agreement, the term "person" shall mean any
individual, corporation (including any non-profit corporation), general
partnership, limited partnership, limited liability partnership, joint venture,
estate, trust, company (including any limited liability company or joint stock
company), firm or other enterprise, association, organization, entity or
Governmental Entity.

8.4 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
of the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.

8.5 Entire Agreement; Third Party Beneficiaries. This Agreement and the
documents and instruments and other agreements among the parties hereto as
contemplated by or referred to herein, including the Company Schedule and the
Parent Schedule (a) constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, it being understood that the Confidentiality Agreement
shall continue in full force and effect until the Closing and shall survive any
termination of this Agreement; and (b) are not intended to confer upon any
other person any rights or remedies hereunder, except as specifically provided
in Section 5.10.

8.6 Severability. In the event that any provision of this Agreement, or the
application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto. The parties further
agree to replace such void or unenforceable provision of this Agreement with a
valid and enforceable provision that will achieve, to the extent possible, the
economic, business and other purposes of such void or unenforceable provision.

8.7 Other Remedies; Specific Performance. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy

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conferred hereby, or by law or equity upon such party, and the exercise by a
party of any one remedy will not preclude the exercise of any other remedy. The
parties hereto agree that irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.

8.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.

8.9 Rules of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule
of construction providing that ambiguities in an agreement or other document
will be construed against the party drafting such agreement or document.

8.10 Assignment. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other parties. Subject to the preceding sentence, this Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.

8.11 WAIVER OF JURY TRIAL. EACH OF PARENT, COMPANY AND MERGER SUB HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE ACTIONS OF PARENT, COMPANY OR MERGER SUB IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.

*****

A-41
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized respective officers as of the date first
written above.

MYPOINTS, INC.

By: /s/ Steven M. Markowitz

Name: Steven M. Markowitz

Title: Chief Executive Officer

MYGO ACQUISITION CORPORATION

By: /s/ Steven M. Markowitz

Name: Steven M. Markowitz

Title: Chief Executive Officer

CYBERGOLD, INC.

By: /s/ A.N. Goldhaber

Name: A.N. Goldhaber

Title: Chief Executive Officer

**** REORGANIZATION AGREEMENT ****

A-42
<PAGE>

SCHEDULE 1

TERMS OF PAYT SPIN

The following represent general principles that Parent and the Company will
follow in order to implement the proposed spinoff of Payt:

. The spinoff will occur prior to the Effective Time on a date to be
determined ("Separation Date").

. On the Separation Date the Company will own Common Stock representing
19.9% of the fully diluted equity of Payt ("Retained Equity"), assuming
that Payt does not raise capital prior to the Effective Time. If Payt
raises capital prior to the Effective Time, the Company will have a
preemptive right to participate in the financing in order to maintain its
equity ownership percentage. For so long as Parent owns 10% or more of
the outstanding Payt voting stock, it shall have the right to designate 2
board members of Payt, and for so long as Parent owns 5% or more of the
outstanding voting stock of Payt, it shall have the right to designate 1
board member of Payt.

. The Payt Disposition, along with the terms specified in the second
sentence of this paragraph, shall not cause the Company to hold less than
90% of the fair market value of its net assets nor less than 70% of the
fair market value of its gross assets that it held immediately prior to
the Effective Time. Amounts used by the Company to pay stockholders
perfecting dissenters' rights or to pay other Merger expenses, amounts
paid by the Company to redeem stock, securities, warrants or options of
the Company as part of any overall plan of which the Merger is a part,
and amounts distributed by the Company to stockholders of the Company
(except for regular, normal dividends) as part of any overall plan of
which the Merger is a part, in each case will be treated as constituting
assets of the Company immediately prior to the Effective Time.

. The Company shall have the right to allocate Payt's equity, other than
the Retained Equity, to Payt employees and an employee option pool and
for distribution to the shareholders of the Company.

. The Company shall grant Payt an exclusive, perpetual, worldwide, royalty-
free, and fully paid license to use, with freedom to sublicense, the
Company's Payment Systems Technology for use in developing and operating
a payment systems business ("Payt Field").

. Payt on the one hand, and the Company and Parent on the other hand, shall
agree that Payt will not enter or engage in, or sublicense the Payment
Systems Technology for use in, the incentive marketing business
("Reserved Field") and the Company and Parent will not enter or engage
in, or sublicense the Payment Systems Technology for use in, the Payt
Field.

. Payt shall grant the Company a nonexclusive, perpetual, worldwide,
royalty-free, and fully paid license to use and to sublicense, in the
Reserved Field, any improvements, enhancements or derivative works Payt
may develop with respect to the Payment Systems Technology.

. Payt shall assure and be liable for all liabilities associated with the
assets transferred to it, including all liabilities relating to Vox.

. Prior to the Separation Date a reserve, if necessary, shall be
established in Parent's favor to cover any and all Taxes which may be
associated with the spin-off as well as associated costs (this may be
accomplished by adjusting the $5 million of cash referred to below). Any
Taxes associated with the spin-off shall be the responsibility of Payt.

A-43
<PAGE>

. Payt shall be capitalized at the Effective Time with a contribution of $5
million in cash and a transfer of the following personal property,
subject to the approval of Parent:

40 Desktop PCs
1 Portmaster
1 Netscreen 100 (VPN support)
1 Cisco Edge Router
1 Cisco 6509 Switch
1 Cisco Local Director
1 Pix Firewall
1 Sun Enterprise E4500 server
1 Sun A5200 disk array
3 Sun Netra servers
1 Sun Sparc Station 20 workstation
2 Dell mail servers (model 4500 or 4300)

together with such other miscellaneous tangible personal property as may
be agreed by Parent and the Company.

. The Company may transfer to Payt up to 35 employees to be identified by
the Company, subject to the approval of Parent not to be unreasonably
withheld and which employees shall include Barry McCarthy, and shall not
include Dan Berger or Michael Koitman. Payt shall assume all liabilities
associated with the employment of the transferred employees. Prior to
transferring any employees to Paytech, each such employee shall sign and
deliver to Parent a non-competition agreement in form reasonably
satisfactory to Parent.

. On the Separation Date the Company will execute and deliver the following
agreements with Payt to implement the principles of this Schedule 1: an
Assignment and Assumption Agreement, an Employee Matters Agreement, a Tax
Sharing Agreement, a Master Confidentiality and Non-Disclosure Agreement,
an Indemnification and Insurance Matters Agreement, resignations of any
appropriate employees, and such other agreements as the parties may agree
are necessary or desirable.

. The Company will agree to offer any transition services necessary to Payt
for a reasonable period and for reasonable compensation.

. The Company will use its reasonable best efforts with the reasonable
cooperation of Parent to prepare an information statement as required by
law, file it with the SEC and complete all other customary procedures
affiliated with such information statement and all other actions
necessary or desirable in order to effect the distribution of common
stock of Payt with costs to be fully paid by the Company prior to the
Effective Time.

A-44
<PAGE>

FIRST AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION

This FIRST AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION is made and
entered into as of June 20, 2000 (the "Amendment") and amends that certain
Agreement and Plan of Reorganization dated April 14, 2000 (the "Agreement")
among MyPoints.com, Inc., a Delaware corporation ("Parent"), Mygo Acquisition
Corporation, a Delaware corporation and a wholly-owned subsidiary of Parent
("Merger Sub"), and Cybergold, Inc., a Delaware corporation ("Company").
Capitalized terms used but not defined herein have the meaning specified in the
Agreement.

RECITALS

A. The parties desire to amend the Agreement in order to permit the Payt
Disposition to be completed after the Closing.

The parties hereby agree to amend the Agreement as follows.

1. Section 5.17 of the Agreement is deleted and replaced with the following:

5.17 Disposition of Paytech Business

(a) The Company shall have the right, but not the obligation, to dispose
of the Paytech Business (as defined below) by transferring it to the
stockholders of the Company by transferring the Paytech Business to a newly
formed affiliate of the Company ("Payt") and distributing the ownership of
Payt to the stockholders of the Company (such transfer and distribution,
the "Payt Spin") in a transaction that is treated as immediately taxable in
full to the Company and the stockholders of the Company for federal income
tax purposes. The decision as to whether and under what terms to implement
a Payt Spin will be the Company's; provided, however, that Parent's consent
shall be required in connection with any material deviation from the terms
and conditions of a Payt Spin, as applicable, set forth on Schedule 1. In
the event the parties hereto disagree as to whether or not the terms and
conditions of a Payt Spin materially deviate from the terms and conditions
set forth on Schedule 1 or in the event the parties hereto disagree on the
amount of cash to be reserved for the Payt Sale Taxes (as defined in
subsection 5.18(b)), either party shall be entitled to submit such dispute
or disagreement for final and binding determination to a mutually
acceptable third-party arbitrator, such determination to be made within ten
(10) days of the submission to such arbitrator by either party. If the
parties are unable to mutually agree upon an arbitrator within one week of
a party's notification to the other party of its desire to arbitrate such a
dispute, then each party shall have one week to select an arbitrator and
such two arbitrators shall have one week to select a third arbitrator who
shall have final authority to resolve such dispute within ten days of such
arbitrator's selection based upon the terms and conditions set forth on
Schedule 1. The parties shall share equally in the fees and expenses of
such arbitrators, and such fees and expenses shall be paid by the parties
prior to the Effective Time.

1
<PAGE>

be incurred by Parent, the Company or any affiliates thereof in connection
with the Payt Spin. The Company and Parent shall mutually determine the
amount of the Paytech Spin Taxes prior to the Closing Date. If the Company
and Parent fail to reach an agreement within one (1) week prior to the
scheduled Closing Date, either party shall be entitled to submit the matter
to a mutually acceptable third-party arbitrator. If the parties are unable
to mutually agree upon an arbitrator within one (1) week of a party's
notification to the other party of its desire to arbitrate such a dispute,
then each party shall have one (1) week to select an arbitrator and such
two arbitrators shall have ten (10) days to select a third arbitrator who
shall have final authority to resolve such dispute within ten (10) days of
such arbitrator's selection, but before the Closing Date. The parties shall
share equally in the fees and expenses of such arbitrators, and such fees
and expenses shall be paid by the parties prior to the Effective Time.

2. Schedule 1 to the Agreement is deleted and replaced with the following:

Schedule 1

Terms of Payt Spin

The following represent general principles that Parent and the Company will
follow in order to implement the proposed spinoff of Payt:

. Payt shall be established as an independent operating entity within the
Company prior to the Effective Time on a date to be determined.

. Common Stock of Payt shall be distributed to the shareholders of the
Company of record on a date to be established by the Company, but no
later than the Business Day prior to the Closing Date, such distribution
("Spinoff") to be accomplished by a dividend payable on a date on or
before September 30, 2000 ("Separation Date").

. The Company shall cause an appropriate registration statement or
information statement covering the Spinoff to be filed prior to the
Effective Time.

. The Company shall use its commercially reasonable efforts to cause the
Separation Date to occur on or before the Effective Time.

. The Company shall have the right to allocate Payt's equity, other than
the Retained Equity, to Payt employees and an employee option pool and
for distribution to the shareholders of the Company.

2
<PAGE>

. Payt shall assure and be liable for all liabilities associated with the
assets transferred to it, including all liabilities relating to Vox.

. Payt shall be capitalized at the Effective Time with a contribution of $5
million in cash (the "Contribution") and a transfer of the following
personal property, subject to the approval of Parent:

40 Desktop PCs

1 Portmaster

1 Netscreen 100 (VPN support)

1 Cisco Edge Router

1 Cisco 6509 Switch

1 Cisco Local Director

1 Pix Firewall

1 Sun Enterprise E4500 server

1 Sun A5200 disk array

3 Sun Netra servers

1 Sun Sparc Station 20 workstation

2 Dell mail servers (model 4500 or 4300)

together with such other miscellaneous tangible personal property as may be
agreed by Parent and the Company.

. The costs and expenses of Payt incurred as an operating business (other
than costs and expenses of the Registration) following the Effective Time
(the "Interim Expenses") shall be paid by Payt from the Contribution, or
if paid by Parent shall reduce the amount of the Contribution.

. The Company may transfer to Payt up to 35 employees to be identified by
the Company, subject to the approval of Parent not to be unreasonably
withheld and which employees shall include Barry McCarthy, and shall not
include Dan Berger or Michael Koifman. Payt shall assume all liabilities
associated with the employment of the transferred employees. Prior to
transferring any employees to Paytech, each such employee shall sign and
deliver to Parent a non-competition agreement in form reasonably
satisfactory to Parent.

3
<PAGE>

. The Company will agree to offer any transition services necessary to Payt
for a reasonable period and for reasonable compensation.

. The Company will use its reasonable best efforts with the reasonable
cooperation of Parent to prepare a registration or information statement
as required by law, file it with the SEC and complete all other customary
procedures affiliated with such registration or information statement and
all other actions necessary or desirable in order to effect the
distribution of common stock of Payt with costs to be fully paid or
reserved by the Company prior to the Effective Time.

. If the Spinoff cannot be accomplished by September 30, 2000, then Parent
may replace the declared dividend of Payt Common Stock with a cash
dividend equal to the Contribution minus the sum of the Expenses plus
reasonable costs of terminating the business of Payt as a separate
entity, not to exceed $200,000.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized respective officers as of the date first
written above.

MYPOINTS.COM, INC.

By: /s/ Steven M. Markowitz

Name: Steven M. Markowitz

Title: Chief Executive Officer

MYGO ACQUISITION CORPORATION

By: /s/ Steven M. Markowitz

Name: Steven M. Markowitz

Title: Chief Executive Officer

CYBERGOLD, INC.

By: /s/ John Steuart

Name: John Steuart

Title: Chief Financial Officer

4
<PAGE>

ANNEX B

[ROBERTSON STEPHENS LETTERHEAD]

April 14, 2000

Board of Directors
MyPoints, Inc.
100 California St., 11th FL.
San Francisco, CA 94111

Members of the Board:

We understand that Cybergold, Inc. (the "Company"), MyPoints, Inc.
("Acquiror") and Mygo Acquisition Corporation, a wholly owned subsidiary of
Acquiror ("Merger Sub"), are proposing to enter into an Agreement and Plan of
Reorganization and Merger, dated as of April 14, 2000 (the "Agreement"), which
will provide, among other things, for the merger (the "Merger") of Merger Sub
with and into the Company. Upon consummation of the Merger, the Company will
become a wholly owned subsidiary of Acquiror. Under the terms set forth in the
Agreement, at the effective time of the Merger (the "Effective Time"), each
share of common stock of the Company, par value $0.01 per share ("Company
Common Stock"), issued and outstanding immediately prior to the Effective Time,
other than certain shares to be canceled pursuant to the Agreement, will be
converted into the right to receive .48 shares (the "Exchange Ratio") of the
common stock of Acquiror ("Acquiror Common Stock"). The terms and conditions of
the Merger are set out more fully in the Agreement.

You have asked us whether, in our opinion, the Exchange Ratio is fair from a
financial point of view and as of the date hereof to Acquiror.

For purposes of this opinion we have, among other things:

(i) reviewed certain publicly available financial statements and other
business and financial information of the Company and Acquiror,
respectively;

(ii) reviewed certain internal financial statements and other financial and
operating data, including certain financial forecasts and other forward
looking financial information, concerning the Company and Acquiror
prepared by the management of the Company and Acquiror, respectively;

(iii) reviewed with the Company and Acquiror certain publicly available
research estimates of research analysts regarding the Company and
Acquiror;

(iv) held discussions with the respective managements of the Company and
Acquiror concerning the businesses, past and current operations,
financial condition and future prospects of both the Company and
Acquiror, independently and combined, including discussions with the
managements of the Company and Acquiror concerning cost savings and
other synergies that are expected to result from the Merger as well as
their views regarding the strategic rationale for the Merger;

(v) reviewed the financial terms and conditions set forth in the Agreement;

(vi) reviewed the stock price and trading history of Company Common Stock
and Acquiror Common Stock;

(vii) compared the financial performance of the Company and the prices and
trading activity of Company Common Stock with that of certain other
publicly traded companies comparable with the Company;

(viii) compared the financial terms of the Merger with the financial terms,
to the extent publicly available, of other transactions that we deemed
relevant;
<PAGE>

(ix) reviewed the pro forma impact of the Merger on Acquiror's revenues per
share;

(x) prepared an analysis of the relative contributions of the Company and
Acquiror to the combined company;

(xi) participated in discussions and negotiations among representatives of
the Company and Acquiror and their financial and legal advisors; and

(xii) made such other studies and inquiries, and reviewed such other data, as
we deemed relevant.

In our review and analysis, and in arriving at our opinion, we have assumed
and relied upon the accuracy and completeness of all of the financial and other
information provided to us (including information furnished to us orally or
otherwise discussed with us by the managements of the Company and Acquiror) or
publicly available and have neither attempted to verify, nor assumed
responsibility for verifying, any of such information. We have relied upon the
assurances of the managements of the Company and Acquiror that they are not
aware of any facts that would make such information inaccurate or misleading.
Furthermore, we did not obtain or make, or assume any responsibility for
obtaining or making, any independent evaluation or appraisal of the properties,
assets or liabilities (contingent or otherwise) of the Company or Acquiror, nor
were we furnished with any such evaluation or appraisal. With respect to the
financial forecasts and projections (and the assumptions and bases therefor)
for each of the Company and Acquiror that we have reviewed, upon the advice of
the managements of the Company and Acquiror, we have assumed that such
forecasts and projections have been reasonably prepared in good faith on the
basis of reasonable assumptions and reflect the best currently available
estimates and judgments as to the future financial condition and performance of
the Company and Acquiror, respectively, and we have further assumed that such
projections and forecasts will be realized in the amounts and in the time
periods currently estimated. We have assumed that the Merger will be
consummated upon the terms set forth in the Agreement without material
alteration thereof, including, among other things, that the Merger will be
accounted for as a "purchase method" business combination in accordance with
U.S. generally accepted accounting principles ("GAAP") and that the Merger will
be treated as a tax-free reorganization pursuant to the Internal Revenue Code
of 1986, as amended. In addition, we have assumed that the historical financial
statements of each of the Company and Acquiror reviewed by us have been
prepared and fairly presented in accordance with U.S. GAAP consistently
applied. We have relied as to all legal matters relevant to rendering our
opinion on the advice of counsel.

This opinion is necessarily based upon market, economic and other conditions
as in effect on, and information made available to us as of, the date hereof.
It should be understood that subsequent developments may affect the conclusion
expressed in this opinion and that we disclaim any undertaking or obligation to
advise any person of any change in any matter affecting this opinion which may
come or be brought to our attention after the date of this opinion. Our opinion
is limited to the fairness, from a financial point of view and as to the date
hereof, to Acquiror of the Exchange Ratio. We do not express any opinion as to
(i) the value of any employee agreement or other arrangement entered into in
connection with the Merger, (ii) any tax or other consequences that might
result from the Merger or (iii) what the value of Acquiror Common Stock will be
when issued to the Company's stockholders pursuant to the Merger or the price
at which shares of Acquiror Common Stock may be traded in the future. Our
opinion does not address the relative merits of the Merger and the other
business strategies that Acquiror's Board of Directors has considered or may be
considering, nor does it address the decision of Acquiror's Board of Directors
to proceed with the Merger.

We are acting as financial advisor to Acquiror in connection with the Merger
and will receive (i) a fee contingent upon the delivery of this opinion and
(ii) an additional fee contingent upon the consummation of the Merger. In
addition, Acquiror has agreed to indemnify us for certain liabilities that may
arise out of our engagement. In the past, we have provided certain investment
banking services to Acquiror for which we have been paid fees, including acting
as lead and joint-lead managers of an initial public offering and subsequent
secondary offering of Acquiror Common Stock, respectively. We maintain a market
in the shares of Acquiror Common Stock. In the ordinary course of business, we
may trade in Acquiror's securities and the Company's securities for our own
account and the account of our customers and, accordingly, may at any time hold
a long or short position in Acquiror's securities or the Company's securities.
<PAGE>

Our opinion expressed herein is provided for the information of the Board of
Directors of Acquiror in connection with its evaluation of the Merger. Our
opinion is not intended to be and does not constitute a recommendation to any
stockholder of Acquiror or the Company as to how such stockholder should vote,
or take any other action, with respect to the Merger. This opinion may not be
summarized, described or referred to or furnished to any party except with our
express prior written consent.

Based upon and subject to the foregoing considerations, it is our opinion
that, as of the date hereof, the Exchange Ratio is fair to Acquiror from a
financial point of view.

Very truly yours,

FLEETBOSTON ROBERTSON STEPHENS INC.

/s/ FleetBoston Robertson Stephens Inc.
<PAGE>

Annex C

[LETTERHEAD OF GOLDMAN, SACHS & CO.]

PERSONAL AND CONFIDENTIAL

April 14, 2000

Board of Directors
Cybergold, Inc.
1330 Broadway
Oakland, CA 94612

Gentlemen:

You have requested our opinion as to the fairness from a financial point of
view to the holders of the outstanding shares of Common Stock, par value
$0.00015 per share (the "Cybergold Shares"), of Cybergold, Inc. ("Cybergold")
of the exchange ratio (the "Exchange Ratio") of 0.480 shares of Common Stock,
par value $0.001 per share (the "MyPoints Shares"), of MyPoints, Inc.
("MyPoints") to be received for each Cybergold Share in the merger ("Merger")
to be effected pursuant to the Agreement and Plan of Reorganization, dated as
of April 14, 2000 by and among Cybergold, Mygo Acquisition Corporation, a
wholly-owned subsidiary of MyPoints and MyPoints, Inc. (the "Agreement"). We
understand that the Agreement contemplates the sale or other disposition of
the Paytech Business, as such term is defined in the Agreement, immediately
prior to the Merger.

Goldman, Sachs & Co., as part of its investment banking business, is
continually engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwritings,
competitive biddings, secondary distributions of listed and unlisted
securities, private placements and valuations for estate, corporate and other
purposes. We are familiar with Cybergold having acted as its financial advisor
in connection with, and having participated in certain of the negotiations
leading to, the Agreement.

In connection with this opinion, we have reviewed, among other things, the
Agreement; the Registration Statement on Form S-1, including the prospectus
contained therein dated September 23, 1999, relating to the initial public
offering of Cybergold Shares; the Registration Statement on Form S-1,
including the prospectus contained therein dated August 19, 1999, relating to
the initial public offering of MyPoints Shares; the Registration Statement on
Form S-1, including the prospectus contained therein dated February 23, 2000,
relating to the secondary public offering of MyPoints Shares; Annual Reports
on Form 10-K for each of Cybergold and MyPoints for the year ended December
31, 1999; certain interim reports to stockholders and Quarterly Reports on
Form 10-Q for each of Cybergold and MyPoints; certain other communications
from Cybergold and MyPoints to their respective stockholders; and certain
internal financial analyses and forecasts for Cybergold and MyPoints prepared
by their respective managements. We also have held discussions with members of
the senior management of Cybergold and MyPoints regarding their assessment of
the strategic rationale for, and the potential benefits of, the transaction
contemplated by the Agreement and the past and current business operations,
financial condition and future prospects of their respective companies. In
addition, we have reviewed the reported price and trading activity for the
Cybergold Shares and the MyPoints Shares, which like many Internet-related
stocks have been and are likely to continue to be subject to significant
short-term price and trading volatility, compared certain financial and stock
market information for Cybergold and MyPoints with similar information for
certain other companies the securities of which are publicly traded, reviewed
the financial terms of certain business combinations in the Internet direct
marketing industry specifically and in other industries generally and
performed such other studies and analyses as we considered appropriate.

1
<PAGE>

We have relied upon the accuracy and completeness of all of the financial and
other information discussed with or reviewed by us and have assumed such
accuracy and completeness for purposes of rendering this opinion. For purposes
of our analysis, and with your consent, we have taken into account the risks
and uncertainties associated with Cybergold achieving management's projections
in the amounts and at the times indicated therein. We were not requested to
solicit, and did not solicit, interest from other parties with respect to an
acquisition of or other business combinations with Cybergold. In addition, we
have not made an independent evaluation or appraisal of the assets and
liabilities of Cybergold or MyPoints or any of their subsidiaries and we have
not been furnished with any such evaluation or appraisal. Our advisory
services and the opinion expressed herein are provided for the information and
assistance of the Board of Directors of Cybergold in connection with its
consideration of the transaction contemplated by the Agreement and such
opinion does not constitute a recommendation as to how stockholders should
vote with respect to such transaction.

Based upon and subject to the foregoing and based upon such other matters as
we consider relevant, its is our opinion that as of the date hereof the
Exchange Ratio pursuant to the Agreement is fair from a financial point of
view to the holders of Cybergold Shares.

Very truly yours,

GOLDMAN, SACHS & CO.

/s/ Goldman, Sachs & Co.

2
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's board of directors to grant, indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act. Article
VI of MyPoints's bylaws provides for the mandatory indemnification of its
directors, officers, employees and other agents to the maximum extent permitted
by Delaware General Corporation Law, and MyPoints has entered into agreements
with its officers, directors and certain key employees implementing such
indemnification.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

<TABLE>
<CAPTION>
Exhibit
Number Description
------- ---------------------------------------------------------------------
<C> <S>
2 Agreement and Plan of Reorganization and Merger by and between
Cybergold, Inc., Mygo Acquisition Corporation and MyPoints Inc.,
dated as of April 14, 2000, as amended by Amendment No. 1 dated as of
June 20, 2000 (included as Annex A to the proxy statement/ prospectus
which is part of the registrant's statement on Form S-4)
3.1(b)* Certificate of Incorporation, as currently in effect
3.2(b)* Bylaws of the registrant, as currently in effect
4 Form of Common Stock Certificate (incorporated herein by reference to
the Registrant's Registration Statement on Form S-1 No. 33-95009)
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation
as to the legality of the securities being registered
8.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation
as to tax matters
8.2 Opinion of Morrison & Foerster LLP as to tax matters
10.1* Amended and Restated Investors Rights Agreement dated March 30, 1999
10.2* 1996 Stock Plan and forms of agreements thereunder
10.3* 1999 Stock Plan and forms of agreements thereunder
10.4* 1999 Employee Stock Purchase Plan
10.5* Form of Director and Executive Officer Indemnification Agreement
10.6* Representative form of Stock Purchase Warrant
10.7* Lease between the registrant and Louis N. Haas dated November 15,
1996 for office space located at 565 Commercial Street, San
Francisco, California, and addenda thereto
10.8* Lease dated March 18, 1999 between registrant and TA/Western, L.L.C.
for office space located at 1375 E. Woodfield Road, Suite 520,
Schaumburg, Illinois
10.9* Lease dated January 22, 1998 between MotivationNet, Inc. and The
Mutual Life Insurance Company of New York for office space located at
1375 E. Woodfield Road, Suite 540, Schaumburg, Illinois
10.10* Agreement and Plan of Merger dated November 30, 1998 among the
registrant, IPOST Acquisition Subsidiary, Inc. and Enhanced Response
Technologies, Inc.
10.11* Interest Purchase Agreement dated November 30, 1998 among registrant,
Direct Marketing Technology, Inc. and Brigar Computer Services, Inc.
10.12* Asset Purchase Agreement dated November 30, 1998 between registrant
and Metromail Corporation
10.13* License Agreement dated November 30, 1998 between registrant and
Direct Marketing Technologies, Inc.
10.14* Services Agreement dated November 30, 1998 between registrant and
Direct Marketing Technologies, Inc.
10.15* Business Loan Agreement dated January 27, 1997 between registrant and
Silicon Valley Bank and related promissory notes
</TABLE>

II-1
<PAGE>

<TABLE>
<CAPTION>
Exhibit
Number Description
------- ---------------------------------------------------------------------
<C> <S>
10.16* Master Equipment Lease Agreement dated May 1, 1998 between registrant
and Phoenix Leasing Incorporated
+10.17* Patent License Agreement dated March 31, 1999 between registrant and
Netcentives, Inc.
10.18** Office Lease dated November 16, 1999 between registrant and WHLNF
Real Estate Limited Partnership for facility located at 100
California Street, 12th Floor, San Francisco, California 94111
21.1*** Subsidiaries of the registrant
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Singer Lewak Greenbaum & Goldstein LLP
23.3 Consent of PricewaterhouseCoopers LLP
23.4 Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation
(included in Exhibit 5.1 and Exhibit 8.1)
23.5 Consent of Morrison & Foerster LLP (included in Exhibit 8.2)
23.6 Consent of FleetBoston Robertson Stephens Inc.
23.7 Consent of Goldman Sachs & Co.
24 Power of Attorney (included on the signature page of the registration
statement)
99.2 MyPoints.com, Inc. Proxy for Special Meeting of Stockholders
99.3 Cybergold, Inc. Proxy for Special Meeting of Stockholders
99.4 Opinion of FleetBoston Robertson Stephens Inc. (included as Annex B
to the proxy statement/ prospectus which is part of the registrant's
statement on Form S-4)
99.5 Opinion of Goldman Sachs & Co. (included as Annex C to the proxy
statement/prospectus which is part of the registrant's statement on
Form S-4)
</TABLE>
--------
* Exhibit incorporated by reference to the like-numbered exhibit to
registrant's registration statement on Form S-1 filed with the Securities
and Exchange Commission on April 1, 1999 (File No. 333-75523).

** Exhibit incorporated by reference to the like-numbered exhibit to
registrant's registration statement on Form S-1 filed with the Securities
and Exchange Commission on January 20, 2000 (File No. 333-95009).

*** Exhibit incorporated by reference to the like-numbered exhibit to the
registrant's annual report on Form 10-K filed with the Securities and
Exchange Commission on March 30, 2000.

+ Confidential treatment has been granted for portions of this exhibit.

ITEM 22. UNDERTAKINGS

The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at the time shall be deemed to be
the initial bona fide offering thereof.

The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report, to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.

II-2
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of San Francisco, State of
California, on June 22, 2000.

MyPoints.com, Inc.

By /s/ Steven M. Markowitz
-----------------------------------
Steven M. Markowitz
Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Steven M. Markowitz or Layton S. Han, or either
of them, his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all pre- and post-effective amendments
to this Registration Statement, and to file the same, with all exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto such attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or their substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----

<C> <S> <C>
/s/ Steven M. Markowitz Chief Executive Officer June 22, 2000
____________________________________ (Principal Executive Officer)
Steven M. Markowitz

President, Chief Operating Officer
____________________________________ (Principal Executive Officer)
Robert C. Hoyler

/s/ Layton S. Han Vice President, Business Development June 22, 2000
____________________________________ and Chief Financial Officer (Principal
Layton S. Han Financial and Accounting Officer)

/s/ Howard L. Morgan Director June 22, 2000
____________________________________
Howard L. Morgan

/s/ Thomas Newkirk Director June 22, 2000
____________________________________
Thomas Newkirk

/s/ Lawrence E. Phillips Director June 22, 2000
____________________________________
Lawrence E. Phillips

/s/ Mario Rosati Director June 22, 2000
____________________________________
Mario Rosati

/s/ Lester Wunderman Director June 22, 2000
____________________________________
Lester Wunderman
</TABLE>

II-3
<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit
Number Description
------- ---------------------------------------------------------------------
<C> <S>
2 Agreement and Plan of Reorganization and Merger by and between
Cybergold, Inc., Mygo Acquisition Corporation and MyPoints Inc.,
dated as of April 14, 2000, as amended by Amendment No. 1 dated as of
June 20, 2000 (included as Annex A to the proxy statement/ prospectus
which is part of the registrant's Statement on Form S-4)
3.1(b)* Certificate of Incorporation, as currently in effect
3.2(b)* Bylaws of the registrant, as currently in effect
4 Form of Common Stock Certificate (incorporated herein by reference to
the Registrant's Registration Statement on Form S-1 No. 33-95009)
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation
as to the legality of the securities being registered
8.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation
as to tax matters
8.2 Opinion of Morrison & Foerster LLP as to tax matters
10.1* Amended and Restated Investors Rights Agreement dated March 30, 1999
10.2* 1996 Stock Plan and forms of agreements thereunder
10.3* 1999 Stock Plan and forms of agreements thereunder
10.4* 1999 Employee Stock Purchase Plan
10.5* Form of Director and Executive Officer Indemnification Agreement
10.6* Representative form of Stock Purchase Warrant
10.7* Lease between the registrant and Louis N. Haas dated November 15,
1996 for office space located at 565 Commercial Street, San
Francisco, California, and addenda thereto
10.8* Lease dated March 18, 1999 between registrant and TA/Western, L.L.C.
for office space located at 1375 E. Woodfield Road, Suite 520,
Schaumburg, Illinois
10.9* Lease dated January 22, 1998 between MotivationNet, Inc. and The
Mutual Life Insurance Company of New York for office space located at
1375 E. Woodfield Road, Suite 540, Schaumburg, Illinois
10.10* Agreement and Plan of Merger dated November 30, 1998 among the
registrant, IPOST Acquisition Subsidiary, Inc. and Enhanced Response
Technologies, Inc.
10.11* Interest Purchase Agreement dated November 30, 1998 among registrant,
Direct Marketing Technology, Inc. and Brigar Computer Services, Inc.
10.12* Asset Purchase Agreement dated November 30, 1998 between registrant
and Metromail Corporation
10.13* License Agreement dated November 30, 1998 between registrant and
Direct Marketing Technologies, Inc.
10.14* Services Agreement dated November 30, 1998 between registrant and
Direct Marketing Technologies, Inc.
10.15* Business Loan Agreement dated January 27, 1997 between registrant and
Silicon Valley Bank and related promissory notes
10.16* Master Equipment Lease Agreement dated May 1, 1998 between registrant
and Phoenix Leasing Incorporated
+10.17* Patent License Agreement dated March 31, 1999 between registrant and
Netcentives, Inc.
10.18** Office Lease dated November 16, 1999 between registrant and WHLNF
Real Estate Limited Partnership for facility located at 100
California Street, 12th Floor, San Francisco, California 94111
21.1*** Subsidiaries of the registrant
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Singer Lewak Greenbaum & Goldstein LLP
23.3 Consent of PricewaterhouseCoopers LLP
23.4 Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation
(included in Exhibit 5.1 and Exhibit 8.1)
23.5 Consent of Morrison & Foerster LLP (included in Exhibit 8.2)
23.6 Consent of FleetBoston Robertson Stephens Inc.
23.7 Consent of Goldman Sachs & Co.
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
Exhibit
Number Description
------- ----------------------------------------------------------------------
<C> <S>
24 Power of Attorney (included on the signature page of the registration
statement)
99.2 MyPoints.com, Inc. Proxy for Special Meeting of Stockholders
99.3 Cybergold, Inc. Proxy for Special Meeting of Stockholders
99.4 Opinion of FleetBoston Robertson Stephens Inc. (included as Annex B to
the proxy statement/prospectus which is part of the registrant's
statement on Form S-4)
99.5 Opinion of Goldman Sachs & Co. (included as Annex C to the proxy
statement/prospectus which is part of the registrant's statement on
Form S-4)
</TABLE>
--------
* Exhibit incorporated by reference to the like-numbered exhibit to
Registrant's registration statement on Form S-1 filed with the Securities
and Exchange Commission on April 1, 1999 (File No. 333-75523).

** Exhibit incorporated by reference to the like-numbered exhibit to
Registrant's registration statement on Form S-1 filed with the Securities
and Exchange Commission on January 20, 2000 (File No. 333-95009).

*** Exhibit incorporated by reference to the like-numbered exhibit to
Registrant's annual report on Form 10-K filed with the Securities and
Exchange Commission on March 30, 2000.

+ Confidential treatment has been granted for portions of this exhibit.