<PAGE>
FILED PURSUANT TO RULE 425
Filer: eCredit.com, Inc.
Subject Company: eCredit.com, Inc.
Commission File No.: 333-34722
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================================================================================
THIS COMMUNICATION IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO RULES 165 AND 425 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
INVESTORS AND STOCKHOLDERS ARE URGED TO READ THE VARIOUS FILINGS OF INTERNET
CAPITAL GROUP, INC. THAT HAVE BEEN MADE WITH THE SECURITIES AND EXCHANGE
COMMISSION, INCLUDING INTERNET CAPITAL GROUP'S REGISTRATION STATEMENT ON FORM
S-4, WHICH RELATES TO THE EXCHANGE OFFER BEING MADE BY INTERNET CAPITAL GROUP
FOR SHARES OF ECREDIT.COM. INVESTORS AND STOCKHOLDERS MAY OBTAIN A COPY OF THE
REGISTRATION STATEMENT (AND THE PROSPECTUS WHEN IT IS AVAILABLE) FROM COMMERCIAL
RETRIEVAL SERVICES AND FOR NO CHARGE AT THE WEB SITE MAINTAINED BY THE
SECURITIES AND EXCHANGE COMMISSION AT HTTP://WWW.SEC.GOV.
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eCredit.com
================================================================================
Understanding Your Options
The ICG/eCredit Transaction
and
Asset Allocation
Ernst & Young, LLP
A.G. Edwards
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================================================================================
Donna Russo
Ernst & Young, LLP
Carol Yauch
A.G. Edwards
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About Ernst & Young, LLP
================================================================================
> Ernst & Young's mission is to help employees make informed decisions and
take action to improve their financial well being
> We are a fee-only financial planning practice, we do not sell any products
> We are independent and objective
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A.G. Edwards
================================================================================
> Located in 49 states and London
> More than 6,800 financial consultants
> Serves 3 million client accounts
> Financially strong, stable and committed to independence
[GRAPHIC: Photograph of an office building]
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A.G. Edwards Commitment
================================================================================
Our purpose is to furnish financial services of value to our clients
We should act as their agents, putting their interests before our own
We are confident that if we do our jobs well and give value for what we
charge, not only will mutual trust and respect develop, but satisfaction and a
fair reward will result
Excerpt from A.G. Edwards' Corporate Mission Statement
-- Benjamin F. Edwards III, Chairman and CEO
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Team of Professionals
Trusted Advice o Exceptional Service
================================================================================
- ------------------ ------------------
Your |------- Investment
Attorney | Management
- ------------------ | ------------------
| |
| | ------------------
- ------------------ ------------------ |------- Financial
[GRAPHIC: Picture Your | Planning
of family setting] A.G. Edwards | ------------------
You and ----------- Financial ---|
Your Family Consultant | ------------------
- ------------------ ------------------ |------- Estate
| | Planning
| | ------------------
| |
- ------------------ | ------------------
Ernst & Young, |------- Trust
LLP Services
- ------------------ ------------------
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eCredit.com
================================================================================
Exercising your Options/
The ICG Transaction
Tax Considerations
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Seminar Objectives
================================================================================
> Review stock options
> Review taxation of stock options
> Review cash flow aspects of exercise of eCredit.com stock options
> Review cash flow aspects of sale of eCredit.com stock options
> Review mechanics of transaction
> Review asset allocation
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Primary Advantages to
Participating
================================================================================
> cash in hand
> opportunity to diversify
> uncertainty of the stock market
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What is a Stock Option?
================================================================================
> Right to buy a share of stock at a fixed price for a specified period of
time
[GRAPHIC: Silhouette of human head in profile
with a question mark superimposed on it]
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Definition of Terms
================================================================================
> Grant price, Exercise price, Strike price
o The amount you pay to purchase the stock
> Grant Date
o When the options are given to you
> Vesting
o When you become eligible to exercise your options
> Expiration
o How long the option exists
> Spread
o The difference between the grant price (exercise price, strike
price) and the fair market value (FMV)
> Exercise
o When you notify the company that you want to purchase the stock and
provide payment
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How Stock Options Work
================================================================================
Example:
> You are granted 100 stock options at $20/share
> After 5 years the stock price is $50/share (FMV)
> Without having invested anything:
$50 fair market value
$20 exercise (strike) price
-----------------------------------
$30 spread 30x100 options=$3,000
increase in value
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How Do eCredit Stock Options Work?
================================================================================
Example:
> eCredit employee is granted 10,000 stock options at $5/share
> After 5 years from grant the FMV of the stock is $20/share*
$20 fair market value
$ 5 exercise (strike) price
--------------------------------
$15 spread
15 x 10,000 options = $150,000
increase in value
* Used for illustrative purposes only, actual results may vary.
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What if you exercise
================================================================================
Example:
> You are granted 10,000 stock shares at $5/share
> Once grant is vested you seek to exercise
> Cost to exercise option would be $50,000
> Fair market value would be determined
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Option Types
================================================================================
> Two kinds of options
o Incentive Stock Options-ISO
o Non-Qualified Stock Options-NSO
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eCredit.com Stock Options
================================================================================
> Grants ISOs & NSOs
> 10 year expiration
> Vesting schedule
o Normal Vesting - 2 types
o 25% on 1st anniversary, then monthly
o 6.25% every 3 months
o Accelerated Vesting
o 30% of all options granted before Feb. 24, 2000 will be vested
in connection with the ICG transaction
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Option Types
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> Two types of options
o What is the difference?
o Why do we care?
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Benefits of ISOs vs. NSOs
================================================================================
Capital gains rates
versus
Ordinary income rates
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Nonqualified Stock Options
================================================================================
> No tax at time of grant
> Difference between fair market value (FMV) of eCredit.com on date of
exercise and exercise price (cost) is ordinary income
> Income taxed at ordinary rates, subject to Federal, State and applicable
FICA taxes
> Taxes are due upon exercise
> Basis is FMV on date of exercise
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Nonqualified Stock Options
================================================================================
> Holding Shares
o all price appreciation after exercise is capital gain
o Long term capital gain if held more than one year
o Short term capital gain if held for one year or less.
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Tax on Nonqualified Stock Option
================================================================================
Example:
Fair market value on date of exercise $20
Strike price $ 5
---
Spread (profit) $15
Number of shares 10,000
------
Total Gain $150,000
Note: Gain = compensation
$150,000 X ordinary tax = tax due
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Incentive Stock Options
================================================================================
> IRS Holding Period Requirements
o Two years from grant
o One year from exercise
> If Requirements are not met ISOs will be disqualified
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Incentive Stock Options
================================================================================
> No regular income tax at grant or exercise
> No withholding requirements
> Alternative Minimum Tax considerations at exercise
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Incentive Stock Options
================================================================================
> Bottom Line:
o Potential deferral of tax
o Lower tax paid
o Capital gain vs. ordinary income
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Regular Income Taxes ISO's
================================================================================
> If stock is sold after required holding period (one year)
o Gain will be considered long-term capital gain
o Taxed at favorable capital gain rate
o tax at either 10% or 20%
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Tax on an Incentive Stock Option
================================================================================
Example:
FMV on date of exercise $20
Exercise price $ 5
---
Spread $15
Number of shares 10,000
------
Total Gain $150,000
Sale Price one year later $20
$150,000 X capital gains rate = tax due
Note: AMT in year of exercise
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Disqualifying Disposition
================================================================================
> Any disposition of ISO shares before holding period is a "disqualifying
disposition"
> Bottom Line:
o Lose favorable tax rate
o Taxed like an NSO (without withholding and FICA)
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Disqualifying Dispositions
================================================================================
> If disposition happens in the year of exercise
o No AMT adjustment
o Regular taxable income increases
o Ordinary tax treatment
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Alternative Minimum Tax
================================================================================
> What is AMT?
> Separate tax system
> How do ISOs figure in?
> Spread is added to income
> Will it apply to me?
> Only if it's more than your regular tax
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The ICG/eCredit Transaction
================================================================================
(1) Exercise your eCredit.com options
o Accelerated vesting of up to 30% of your options
(2) Tender eCredit.com shares
(3) Receive ICG shares in exchange
(4) Sell ICG shares and reinvest net proceeds
OR
Hold ICG shares and factor them into your asset allocation
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eCredit.com Stock Options
================================================================================
Scenario 1 Scenario 2
---------- ----------
Total Options Outstanding 33,750 33,750
30% of Total Outstanding 10,125 10,125
Options Vested Before Acceleration 11,062 8,500
Additional Options Vested 0 1,625
Options Available to Exercise 10,125 10,125
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Exercise Your eCredit.com Options
================================================================================
Two ways to exercise
> Pay eCredit.com directly for options and withholding taxes, if any
> Use A.G. Edwards Cashless Stock Option Exercise service
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Exercise Your eCredit.com Options
================================================================================
Pay eCredit.com directly
> Deliver cashier's check to pay for exercise cost to Dick Olson, Vice
President and Treasurer, by noon on Day 20
> Calculation of final eCredit.com share price will occur after the opening
of business on Day 21
> Calculation of estimated withholding taxes due will be ready on Day 21
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Exercise Your eCredit.com Options
================================================================================
Pay eCredit.com directly
> Deliver cashier's check to pay for withholding taxes, if any, to Dick
Olson on Day 21 (a follow up adjustment may be necessary)
> Certificate for eCredit. Com shares issued to you
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Stock Option Exercise Process
================================================================================
A.G. Edwards Cashless Stock Option Exercise Service
> No need to liquidate current investment portfolio
> A.G. Edwards advances the exercise price and withholding taxes
> Allows for "simultaneous" exercise and sale
> Favorable trade executions
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Stock Option Exercise Process
================================================================================
1 Contact your A.G. Edwards financial consultant
o Name
Address/
City, State
1-800-
o Name
Address
City, state
1-800-
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Stock Option Exercise Process
================================================================================
2 Complete the required forms
- Issuer's Guarantee of Delivery
- New Account Questionnaire
- Margin Loan Agreement
- Certificate of Foreign Status
(if you are not a U.S. citizen and you are not a U.S. resident)
- Letter of Transmittal
> Provided in the Exercise kits
> A.G. Edwards forms provided electronically through PDF files
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Stock Option Exercise Process
================================================================================
> Forms must be submitted to A.G. Edwards by midnight on Day 16 of the
tender offer - June 1
> Submit forms by delivering to Erin Konary, Treasury, by 5 p.m. on Day 16
or by fax to A.G. Edwards after 5 p.m.
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Issuer's Guarantee of Delivery
================================================================================
[Representative Graphic of a blank AG Edwards & Sons, Inc.
Form of Issuer's Guarantee of Delivery Instructions]
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New Account Questionnaire
================================================================================
[Representative Graphic of a blank AG Edwards & Sons, Inc.
New Account Questionnaire]
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Margin Loan
================================================================================
[Representative Graphic of a blank AG Edwards
Form of Margin Agreement]
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Certificate of Foreign Status
================================================================================
[Representative Graphic of a blank AG Edwards & Sons, Inc.
Form of Certificate of Foreign Status of Beneficial Owner for
United States Tax Withholding]
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Stock Option Exercise Process
================================================================================
3 A.G. Edwards forwards cash to eCredit.com to exercise your options
o Cash needed to exercise becomes your margin loan
Grant Date: Mar. 1997
Number of Options: 10,125
Exercise Price: $ 0.78
Assumed Fair Market Value: $ 17.00
Total Fair Market Value
of Option Shares $172,125
Cost to Exercise
Option Exercise Price $ 7,898
Tax Withholding (Based on taxable spread)*
Federal Income Tax (28%) $ 45,984
State Income Tax (5.95%) $ 9,772
FICA (6.2%) $ 4,724
Medicare (1.45%) $ 2,381
--------
Total tax withholding $ 62,861
Cash needed to exercise $ 70,758
--------
Net Proceeds Available
for Reinvestment $101,367
========
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Stock Option Exercise Process
================================================================================
Important Notes
> Exercise may be withdrawn up to noon on Day 19
> Option exercise price paid on Day 20
> Estimated tax withholding based on estimated eCredit.com closing price on
Day 20 (follow up adjustment may be necessary)
> If not withdrawn, the exercise is executed and eCredit.com issues
certificates
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Tender eCredit.com Shares
================================================================================
> Deliver the Letter of Transmittal to Erin Konary by the close of business
on Day 16 - June 1
> The Letter of Transmittal, along with your stock certificate for your
eCredit.com shares will be submitted to the exchange agent, ChaseMellon
Shareholder Services, on Day 20 to complete the tender
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Receive ICG Shares in Exchange
================================================================================
> Under the exchange formula, the number of ICG shares to be issued is
determined by the average closing price of ICG over Days 16, 17 and 18 of
the tender period
> If that price is less than the lower end of the collar, $95.20, the shares
are determined based on $95.20
$450,000,000
------------ = 4,726,900 ICG shares
$95.20
> Final value of eCredit.com shares will be determined based on the closing
price of ICG on Day 20, the number of shares tendered and the number of
shares issued by eCredit, if any
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Receive ICG Shares in Exchange
> Ratio is determined by the number of eCredit.com shares tendered
ICG shares to be issued 4,726,900
--------- = .5116
eCredit shares tendered 9,239,559
(full tender scenario)
> The exchange ratio changes if and as eCredit.com has to issue additional
shares to ICG over and above what is tendered by shareholders
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Receive ICG Shares in Exchange
================================================================================
> eCredit.com share value is used to calculate income from your options
exercised
For example, using the ICG closing price on May 10 ($33.94) and a full
tender scenario, your ordinary income would be calculated as follows:
$33.94 x .5116 = $17.36
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Exchange Ratio
================================================================================
Percent of uncommited
shares tendered 100% 60% 20%
-------- -------- --------
Outstanding shares 30,798.5 30,798.5 30,798.5
Shares issued 0 1,502.3 3,004.6
-------- -------- --------
Fully diluted shares 30,798.5 32,300.8 33,803.1
30% of fully
diluted shares 9,239.6 9,690.3 10,140.9
ICG shares issued 4,726.9 4,726.9 4,726.9
-------- -------- --------
Fully diluted shares 9,239.6 9,690.3 10,140.9
Exchange Ratio .51159 .48780 .46612
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Stock Option Exercise
================================================================================
Grant Date: Mar. 1997
Number of Options: 10,125
Exercise Price: $ 0.78
Assumed Fair Market Value: $ 17.00
Total Fair Market Value
of Option Shares $172,125
Cost to Exercise
Option Exercise Price $ 7,898
Tax Withholding (Based on taxable spread)*
Federal Income Tax (28%) $ 45,984
State Income Tax (5.95%) $ 9,772
FICA (6.2%) $ 4,724
Medicare (1.45%) $ 2,381
--------
Total tax withholding $ 62,861
Cash needed to exercise $ 70,758
--------
Net Proceeds Available
for Reinvestment $101,367
========
Spread between the Fair Market Value of the Option Shares
and the Option Exercise Price is
Ordinary Income
$164,227
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Receive ICG Shares in Exchange
================================================================================
> Assume you tender 3,000 eCredit.com shares (using the full tender
scenario)
> Shares tendered 3,000
-------
Conversion ratio .5116
ICG shares issued 1,534.8
> The fractional share (.8) will be paid out at ICG's closing price on Day
20
$33.94 x .8 = $27.15
(Example uses ICG closing price on May 10)
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Receive ICG Shares in Exchange
================================================================================
> If you paid eCredit.com directly
o ChaseMellon mails you certificate for shares & check for fractional
share
o or open account with A.G. Edwards and process below applies
> If you used A.G. Edwards
o ChaseMellon will send A.G. Edwards shares and payment for fractional
share on Day 21
o Shares and cash deposited in your account upon receipt
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Sell ICG Shares
================================================================================
> Upon receipt of your ICG shares from ChaseMellon, they can be sold
immediately
o Proceeds are available to you in three days
> Sell all or only enough to cover the cost of exercise, including
withholding taxes, if any, margin interest and commissions
> Reinvest the net proceeds or hold the balance of your ICG shares
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Hold ICG Shares
================================================================================
> Discuss continuation of margin loan on ICG shares with your A.G. Edwards
financial consultant
> Initial loan balance may not be more than 50% of the fair market value of
your ICG shares
> If the fair market value of your ICG shares declines, you may be subject
to a margin call
o That means you will be asked to deposit additional cash or
securities into your account as collateral for the loan
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Hold ICG Shares
================================================================================
An Example
Initial value of ICG shares $10,000
x 50%
-------
Loan balance $5,000
Equity balance $5,000
ICG value declines to $8,000
Your current equity is then $3,000
Your equity ratio
3,000
----- = 37.5%
8,000
If your maintenance requirement is 40%, you would receive a margin call for $200
$8,000 x .40 = $3,200 - $3,000 = $200
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Risks of this Transaction
================================================================================
> Risk: The deal will not close after you have exercised your eCredit.com
options
o You would not receive ICG shares
o The exercise is still effective -- you own the eCredit.com shares
o If you used A.G. Edwards to pay eCredit.com, you will still have an
outstanding loan with A.G. Edwards for the amount of the exercise
cost and withholding taxes, if any
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Risks of this Transaction
================================================================================
> eCredit.com will be notified by ICG of their intent to close the deal
prior to the time at which your options will be exercised
> At that point, the chance the deal will not close is very unlikely --
however eCredit.com cannot guarantee it will occur
> See the list of the conditions of ICG's obligation to close in the
"Conditions to the Exchange Offer" portion of "The Exchange Offer" section
of ICG's prospectus
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Risks of this Transaction
================================================================================
> Any time securities are used as collateral for a loan, you are subject to
market risk - the stock can go up, but it can go down resulting in a
margin call
> Margin interest rates may fluctuate based on the rates we are charged by
our lenders
o eCredit.com rate is currently 8%
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Risks of this Transaction
================================================================================
> Margin interest is charged based on the amount of your loan, the current
interest rate and the length of time the loan is outstanding
$20,000 x 8% = $1,600 annual
$ 1,600 x 5 = $21.92 interest
---
365
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Cashless Option Exercise
================================================================================
> Transaction costs
o Commissions $.05 per share
o Minimum ticket charge $42
o Transaction fee $4
o Special margin interest rate of 8%
> T+3 settlement on sale of shares
> The A.G. Edwards difference
o Personal service
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
How You Participate
================================================================================
--------------------
Today through Day 16 Day 19 Day 20 Day 21
--------------------
> If using A.G. Edwards, complete the necessary forms and the Letter of
Transmittal by 5 p.m. EST on June 1
> If paying eCredit.com directly, complete the Letter of Transmittal by 5
p.m. EST on June 1
> Submit to Erin Konary
<PAGE>
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IT]
How You Participate
================================================================================
------
Today through Day 16 Day 19 Day 20 Day 21
------
> You may withdraw your election to exercise and tender your shares up to
noon
> Final ICG price to be used will be the average of ICG's closing prices on
Days 16, 17 and 18 if the closing price on those days is (greater than)
$95.20
> If the final ICG closing price on Day 20 is (less than) $95.20, the $95.20
price will be used to calculate the exchange ratio
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
How You Participate
================================================================================
------
Today through Day 16 Day 19 Day 20 Day 21
------
> A.G. Edwards pays eCredit.com on your behalf for the exercise price of
your options
> Rich, May delivers your shares and Letter of Transmittal to ChaseMellon,
the exchange agent
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
How You Participate
================================================================================
------
Today through Day 16 Day 19 Day 20 Day 21
------
> eCredit calculates your ordinary income and withholding taxes based on the
value assigned to eCredit.com shares at the exchange
> A.G. Edwards forwards the estimated withholding taxes to eCredit on your
behalf
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
How You Participate
================================================================================
------
Today through Day 16 Day 19 Day 20 Day 21
------
> ChaseMellon sends shares electronically to A.G. Edwards and overnights
checks in payment for fractional shares
> Your shares and fractional share payments are deposited in your account
> You may sell your ICG shares
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Tender During ICG Exchange
================================================================================
> eCredit.com will accelerate vesting on the number of your remaining
options needed for your vested options after the tender to equal the
number of your vested options on February 24
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Tender During ICG Exchange
================================================================================
Total Options Outstanding 33,750 100,000
Total Vested Options on Feb. 24 11,062 10,000
Accelerated Options 0 20,000
Total Allowable Options Exercised
and Exchanged for ICG shares (10,125) (30,000)
------- -------
Vested Options (over 30% limit) 937 0
Total Options - Post ICG Exchange 23,625 70,000
Vested Options (over 30% limit) 937 0
Accelerated Options
Post ICG exchange 10,125 10,000
------- -------
Vested Options (Equal to 2/24 position) 11,062 10,000
Unvested Options 12,563 60,000
------- -------
Total 23,625 70,000
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
How will the ICG Transaction be Reported?
================================================================================
The exercise of eCredit options and exchange of eCredit shares for ICG:
NSO
4 Spread is treated as compensation
4 It will be reported on your W-2 (Boxes1,3,5)
4 Disqualified ISO
4 It will be reported on your W-2 (Box1)
4 The sale of ICG shares on the open market will result in capital gain or
loss
4 Gain/loss reported on 1099
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Withholding
================================================================================
> NSO - Company required to withhold
o eCredit is required to withhold taxes
> ISO - Company does not withhold
o eCredit will not withhold taxes
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Withholding
================================================================================
> Federal: 28% minimum
> State : 5.95 (Mass. Employees)
> FICA: 6.2% social security (maximum tax of $4,724.40)
> Medicare: 1.45%
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Doing your tax return
================================================================================
Nonqualifed Stock Options and Disqualified Incentive Stock Options
> W-2 income reported on 1040 line 7(wages, compensation..)
> 1099 - Gain/Loss -1040 line 13 and schedule D
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
eCredit Exchange for ICG
Example:
> NQ Exercise Price $5.00/share
> NQ Value at Exercise $20.00/share
> NQ Value at Exchange $20.00/share
> NQ Exercised 10,000
> NQ Spread $150,000
> Wages $60,000
> Filing Status Single
> Date of Exchange Is scheduled
to exchange
next day
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Example: Federal Tax Calculation
================================================================================
> Value/share $ 20.00
> Exercise price $ 5.00
--------
> Option Spread at Exercise $ 15.00
> Number of option exercised 10,000
--------
> Ordinary income(compensation) $150,000
> Wages included in W-2 $ 60,000
> NQs included in W-2 $150,000
--------
> Total Income $210,000
> Sale of Stock (report on scheduleD) $ 0
> Standard Deduction $ (4,300)
> Personal exemption $ (2,759)
--------
> Taxable income $202,941
> Tax Liability $ 61,325
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Be Prepared to Pay
================================================================================
Set Aside part of Proceeds in:
> Money Market
> C.D.
> Treasury Bills
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Estimated Taxes
================================================================================
> 100% of previous year (108% if Adjusted gross income for 1999 was more
than $150,000)
> no tax liability for previous year
> U.S. citizen or resident for entire year
> your tax year covered a 12 month period
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Example: Estimated Taxes
================================================================================
1999 Tax Year:
Wages $ 60,000
Deduction ($4300)
Exemption ($2759)
--------
Total Taxable Income $ 52,950
Tax Liability $ 11,486
Taxes Withheld $ 11,600
Refund Due $ 114
2000 Tax Year
Wages $ 60,000
Nonqualified Stock Options $150,000
Deduction (4,300)
Exemption (2,759)
--------
Total Taxable Income $202,941
Tax Liability $ 61,325
Taxes Withheld from paycheck $ 11,600
Taxes Withheld from transaction $ 42,000
--------
Total Taxes Due $ 7,725
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Tax Year 2001
================================================================================
Must withhold at least 100% of prior year or 90% of current year:
o must review prior years tax liability (Tax Year 2000)
o review anticipated tax liability for current year
o review withholding
If not withholding at least 90% of current years tax liability must file
estimated taxes or change withholding
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Form 1040 - ES (Estimated Payments)
================================================================================
> When to file
o April 15
o June 15
o September 15
o January 15
<PAGE>
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APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Ernst & Young Financial Planning Helpline
================================================================================
> Available through June 7,2000
> Monday-Friday, 9am-8pm
> 1-800-273-0588
> Confidential
> Staffed by Ernst & Young Financial Planners
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Review
================================================================================
> Discussed stock options
> Discussed the taxation of stock options
> Discussed the transaction of exercising eCredit options and exchange of
eCredit shares
> Discussed the tax ramifications of the transaction
> Discussed the mechanics of the transaction
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Other Value Added Services
================================================================================
> Financial Horizons Analysis
> Confidential Estate Analysis
> Retirement Plan Distributions
> Asset accounts
> Roth IRA
> Educational IRA
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
A.G. Edwards' Approach to a Disciplined Investment Plan
================================================================================
> Help you develop realistic investment objectives
> Identify your risk tolerance and investment time horizon
> Structure a suitable asset allocation
> Prepare a written investment plan and policy
> Monitor the progress of your plan
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
The Importance of Proper Asset Allocation
================================================================================
Determinants of Portfolio Performance
[GRAPHIC: Bargraph that presents this data visually]
91.5% 1.8% 4.6% 2.1%
Asset Market Security Other
Allocation Timing Selection
Source: Gary B. Brinson, L. Randolph Hood and Gilbert L. Beebower, "Determinants
of Portfolio Performance," Financial Analyst Journal, 1994.
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Volatility vs. Return Relationship
================================================================================
[GRAPHIC: Chart visually portraying the relationship between
volatility and return]
Portfolio C
50% S&P 500
50% Gov't.
Portfolio B
25% S&P 500
25% Small Co.
25% Int'l.
25% Gov't.
Portfolio A
33% S&P 500
33% Small Co.
33% Int'l.
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Benefits of a Long-Term Holding Period
================================================================================
1975-1999
1-Year 5-Year 10-Year 15-Year
Holding Holding Holding Holding
Periods Periods Periods Periods
[Bar graph depicting the benefits of a long-term holding period for
1-year, 5-year, 10-year and 15-year holding periods.]
|_| Small-cap Stocks |_| International Stocks |_| Large-cap Stocks
|_| Long-Term Corp. Bonds |_| Long-Term Gov't Bonds |_| Treasury Bills
(90-Day)
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Addressing Your Current Portfolio Allocation
================================================================================
[GRAPHIC: Pie chart visually depicting the data presented]
Intermediate-Term U.S. Bonds 43.3%
Real Estate Investment Trusts 3.7%
International Stocks 9.2%
Large-cap Blend Stocks 43.8%
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Analyzing What You Own
================================================================================
<TABLE>
<CAPTION>
Taxable Tax-Deferred Total
Account Account Portfolio
<S> <C> <C> <C>
Intermediate Bonds
Airtouch Pfd 4.25% Conv Ser C 8/16/16 -- 12,169 12,169
Sinclair Broadcast 6% Conv Pfd -- 5,859 5,859
U.S. Treasury 0% 12/15/03 -- 46,508 46,508
Dreyfus Strategic Governments Income, Inc -- 8,156 8,156
MFS Intermediate Income Trust -- 4,769 4,769
Putnam Master Intermediate Income Trust -- 5,151 5,151
------- ------- -------
Total Intermediate Bonds $ -- $82,612 $82,612
======= ======= =======
Municipal Bonds
Cape Girardeau MO 4.25% 3/1/1999 50,145 -- 50,145
------- ------- -------
Total Municipal Bonds $50,145 $ -- $50,145
======= ======= =======
Large-cap Blend Stocks
Sun Life Variable Annuity -- 5,885 5,885
------- ------- -------
Total Large-cap Blend Stocks $ -- $ 5,885 $ 5,885
======= ======= =======
Large-cap Growth Stocks
Growth Fund of America -- 17,406 17,406
New Perspective (40%) -- 6,751 6,751
------- ------- -------
Total Large-cap Growth Stocks $ -- $24,157 $24,157
======= ======= =======
</TABLE>
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Suggesting a Repositioned Asset Allocation
================================================================================
[GRAPHIC: pie chart visually depicting the data presented]
Large-cap Growth Stocks 18.0%
Intermediate-Term U.S. Bonds 25.0%
Managed Futures 3.0%
International Stocks 10.0%
Small-cap Stocks 10.4%
Large-cap Value Stocks 33.6%
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
The Efficient Frontier
================================================================================
Return
[GRAPHIC: Chart visually depicting the relationship between
return and risk]
Standard Deviation (Risk)
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Helping You Select Specific Investments and/or Advisors
================================================================================
[GRAPHIC: Pie chart visually depicting a mix of the listed investments]
Real Estate
Municipal Bonds
Cash
Intermediate-Term U.S. Bonds
Stocks
Multi-Style
[GRAPHIC: a segment of a pie chart divided
as indicated by the text]
Small-Cap
Market
Value
Growth
Manager
[GRAPHIC: A
three-dimensional
segment of a
pie chart derived
as indicated
by the text]
Manager 1
Manager 2
Manager 3
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Building a Diversified Portfolio
================================================================================
> Stocks
> Bonds
> Mutual funds
> Options
> Defined portfolios
> Annuities
> Money market funds
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Exploring Your Choices for Investment Management
================================================================================
> Asset allocation mutual fund advisory services
> Private money managers
> A.G. Edwards' in-house money manager
> A.G. Edwards Trust Company investment management
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Helping You Educate Yourself
================================================================================
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A .G. Edwards
- --------------------------------------------------------------------------------
Equity Management Styles
- --------------------------------------------------------------------------------
A REPORT ON INVESTMENT STYLES FROM ASSET PERFORMANCE MONITOR
- --------------------------------------------------------------------------------
As most investors are risk averse and prefer to minimize volatility in their
portfolios, allocating financial assets across equities, bonds and cash is only
the initial step. Once this strategic allocation has been formulated, the
specific equity management style selection should be considered. While each
equity manager has its own unique investment approach, we can categorize most
managers within two broad investment styles, namely value and growth.
In addition to having a thorough understanding of the characteristics of these
two styles, it is important to recognize how the combination of value and growth
may reduce portfolio volatility and generate more consistent equity returns. For
investors using private money managers and having more than $200,000 to invest
in equities, we suggest that consideration be given to allocating these funds to
both value and growth managers due to the styles' offsetting characteristics.
Value and Growth....Where do they fit?
Investment managers are typically categorized by their investment philosophy and
approach to managing portfolios. Some money management firms may utilize a
top-down approach whereby the firm initially evaluates the macroeconomic
conditions to determine an appropriate allocation across equities, bonds and
cash Subsequently, top-down managers will select sectors and, ultimately,
specific securities within those sectors that they believe offer the greatest
risk/reward tradeoff. On the other hand, a bottom-up manager focuses on the
selection of individual securities without direct consideration given to sector
or macroeconomic issues.
Regardless of whether a manager incorporates a top-down, bottom-up or blended
approach to investing, most money managers manifest a value and/or growth bias
in their stock selection and portfolio construction process. Generally speaking,
a value style is character-ized by investing in stocks that analysts believe are
undervalued or "cheap," whereas a growth style is characterized by investing in
companies that offer good potential for growth in earnings. Before exploring the
benefits of utilizing both equity styles in tandem, it's important to understand
the merits of each of the individual styles.
Value Management
Investment managers employing a value-oriented approach attempt to identify
stocks that they believe are significantly undervalued. Whle there are
variations and subjectivity involved in determining what constitutes a value
stock, most value managers apply one or more of the following financial
measurements:
o Low price-to-book multiple
o Low price-to-earnings multiple
o Low price-to-cash flow multiple
o Above-average dividend yield
o Discount to private-market value
Depending on the type of value manager, the process can be imple-mented from an
absolute or relative perspective. For instance, the traditional value manager
relies primarily on identifying stocks with low absolute valuation multiples.
Over the past few years, managers using this approach have had difficulty
finding undervalued stocks in
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A.G. Edwards
- --------------------------------------------------------------------------------
Guide to Professional Money Management
- --------------------------------------------------------------------------------
A JOINT REPORT FROM ASSET PERFORMANCE MONITOR AND MANAGED ACCOUNTS
- --------------------------------------------------------------------------------
For many investors, single-handedly managing a portfolio in today's rapidly
changing investment environment can feel like an impossible task. Some think
they already have too many demands on their time. Others feel they don't have
the expertise to deal with the complex details of managing a growing portfolio.
More investors are turning to private money managers to help them achieve their
financial goals. Giving a private money manager the authority to make decisions
about how, when and where to direct their money alleviates many concerns and
frees investors from the day-to-day responsibilities associated with managing
sizable assets. And, as the number of investors turning to private management
grows, so does the variety of services available to help match investors with
the right manager.
What is a Private Money Manager?
A private money manager provides full-time management of individual portfolios.
When you hire a private money manager, you turn over to the manager the process
of buying the individual securities that will compose your portfolio. This
relieves you of day-to-day investment concerns as well as the time-consuming
task of keeping up with complex financial markets.
Your money manager evaluates the overall market and its risks, as well as
individual securities, to select suitable investments, keep your portfolio
balanced, take advantage of opportunities in specific financial makrets and make
the tough decision to sell investments when appropriate.
Why Use a Money Manager?
Hiring a professional manager has many advantages, including:
Convenience. Like many investors, you may have difficulty finding the time to
properly manage your investments. Hiring a private money manager to handle the
day-to-day investment decisions necessary in a sizable investment portfolio
gives you more time to pursue other areas of interest. You gain the comfort of
knowing that your portfolio is continuously supervised by a professional who
focuses on the markets on a full-time basis.
Expertise. A professional money manager has in-depth knowledge of financial
markets, individual securities andinvestment strategies.
Discipline. Professional money managers systematically mange your money based on
a stated investment style (e.g., growth, value/yield, global/value). A money
manager makes decisions based on experience and this stated investment
discipline.
Ongoing communication. A money manager reports to you regularly about your
account's performance. This lets you stay informed without the time-consuming
and often stressful task of monitoring your account's daily activity.
Tax planning benefits. When you and your tax advisors determine that you need to
realize capital gains or losses in your account,
- --------------------------------------------------------------------------------
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
What You Can Expect From A.G. Edwards
================================================================================
> Clarify and quantify investment objectives
> Determine investment strategy
> Implement investment strategy
> Monitor the accounts
We can simplify your day-to-day finances
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
On-Line Access to Your Account Data
================================================================================
Account information 24 hours a day
Company news
Electronic messaging system
20-minute delayed quotes on U.S. stocks, options and mutual funds
- --------------------------------------------------------------------------------
Accounts
Research and Commentary
User Options
Contact Your Investment Professional
Quotes
AGEdwards Home page
- --------------------------------------------------------------------------------
----------------- --
Accounts Select an account Go
----------------- --
Account Summary
- ----------------------------------------------------------------- [GRAPHIC]
AGe-CONNECT
As of: 7/17/97
- --------------------------------------------------------------------------------
Cash and Total
Priced Money Other Account
Accounts Securities Fund Securities Value
- --------------------------------------------------------------------------------
> John & Jane's UAA 64,966.65 64,966.65
JOHN DOE & JANE DOE
123-000123-999
- --------------------------------------------------------------------------------
> Jane's TAA 118,653.71 118,653.71
JANE DOE 123-000124-999
- --------------------------------------------------------------------------------
> John's CCA 146,654.43 1,000.00 147,654.43
JOHN DOE 123-000125-999
- --------------------------------------------------------------------------------
Total Consolidated $330,174.79 $1,000.00 $ $331,174.79
Account Values
- --------------------------------------------------------------------------------
[GRAPHIC]
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
More AGe-Connect Features
================================================================================
> For securities bought or sold in the past 45 days, you can see
o Trade date
o Settlement date
o Quantity
o Price
o Total amount of transaction
- --------------------------------------------------------------------------------
Accounts
Research and Commentary
User Options
Contact Your Investment Professional
Quotes
AGEdwards Home page
- --------------------------------------------------------------------------------
------------------------- --
Accounts John & Jane's UAA Account Go
------------------------- --
Account ------------------------- --
Views Account Positions Go
------------------------- --
Account Positions
- ----------------------------------------------------------------- [GRAPHIC]
AGe-CONNECT
JOHN DOE & JANE DOE Investment Professional:
123-000123-999 JOE BROKER
As of: 7/17/97 (314) 955-3000 (314) 955-3100
Value of Priced Securities $64,966.65
Cash and Money Fund .00
Other Securities .00
Total Account Value $64,966.65
[GRAPHIC] = Research Reports [GRAPHIC] = Cost Lots
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Est. Est.
Annual Annual
Quantity Symbol Description Price Valuation Income % Yield
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
[GRAPHIC] 200 ATML ATMEL CORP 34.437 6,887.40
- --------------------------------------------------------------------------------------
[GRAPHIC] 104.598 BMY BRISTOL-MYERS SQUIBB CO 87.187 9,119.59 158 1.74
- --------------------------------------------------------------------------------------
[GRAPHIC] 100.974 DIS WALT DISNEY CO 78.875 7,964.32 53 .67
- --------------------------------------------------------------------------------------
[GRAPHIC] 206.592 GE GENERAL ELECTRIC CO 74.00 15,287.81 214 1.41
- --------------------------------------------------------------------------------------
[GRAPHIC] 50.162 MU MICRON TECHNOLOGY INC 48.50 2,432.86
- --------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Your Next Step
================================================================================
> Discuss your situation with your financial consultant 4 Provide the
information needed to prepare a customized investment plan
[GRAPHIC: Three demonstrative examples of hypothetical investment aids,
including two generic bar graphs and two generic line graphs]
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
================================================================================
A.G.
Edwards
INVESTMENTS SINCE 1887
[GRAPHIC: Picture of office building]
<PAGE>
ICG EXCHANGE SUMMARY
OPTIONEE: "OPTIONEE NAME"
VESTING DATE: STOCK OPTIONS AS OF "VESTING DATE"
In accordance with the Exchange Offer Agreement, eCredit.com shall
accelerate the remainder of unvested shares to a maximum of thirty percent (30%)
of your total holdings.
1. ACCELERATION:
o Total Options Outstanding: 0,000
o 30% of Total Outstanding: 0,000
o Total Options Vested: - 0,000
============
o Total Accelerated Options - Step 1: 0
2. OPTIONS PRIOR TO EXCHANGE:
o Total Options Vested: 0,000
o Total Accelerated Options - Step 1: + 0
============
o Total Vested Options prior to Exchange: 0,000
During the tender period, employees may exercise and exchange a portion,
or all of the options up to the total number of vested shares, not to exceed
thirty (30%) percent of their total holdings. If you tender the total allowable
vested shares during the exchange, you will have the following remaining stock
options:
3. EXERCISE:
o Total Options Outstanding: 0,000
o Total Allowable Options Exercised
& Exchanged for ICG shares: - 0,000
============
o Total Options Remaining: 0,000
If you tender during the ICG exchange, immediately following the
transaction, eCredit.com shall accelerate the portion of stock options
previously vested up to a total of thirty (30%) percent of the employee's total
holdings.
4. ACCELERATION STEP 2:
o Total Options Remaining: 0,000
o Total Options Accelerated Step 2: 0,000
o Total Options Vested Post ICG Exchange: 0,000
- --------------------------------------------------------------------------------
CONFIDENTIAL 1 April 9, 2000
<PAGE>
Thomas Lavender
Page 2
The following information summarizes the total transactions including all
of the employee's grants, totaling the exchange volume, taxable compensation and
tax withholdings for the ICG transaction.
eCredit.com must withhold Federal, State, Social Security, and Medicare
taxes for all Non Statutory Stock Options (Non-Qualified Stock Options). If you
exercise the total allowable options during the tender period the following
taxes will be withheld for the Non Statutory Stock Option Grants:
TRANSACTION SUMMARY:
<TABLE>
<CAPTION>
1.) EXCHANGE:
<S> <C>
Total Options Exercised (Assuming all allowable options are exercised)..... 0,000
Exchange Price............................................................. 0,000
=============
Total Exchange Value 0,000
Total Exchange Value....................................................... 0,000
Total Exercise Cost........................................................ 0,000
=============
Total Taxable Compensation 0,000
<CAPTION>
2.) TAX WITHHOLDINGS (NON-QUALIFIED STOCK OPTIONS):
<S> <C>
Total Federal Tax Withholding.............................................. 0,000
Total State Tax Withholding................................................ 0,000
Total Social Security Tax Withholding...................................... 0,000
Total Medicare Tax Withholding............................................. 0,000
=============
Total Withholdings 0,000
<CAPTION>
3.) NET INCOME *:
<S> <C>
Total Taxable Compensation................................................. 0,000
Total Withholdings......................................................... 0,000
=============
Approximate Net Proceeds: 0,000
</TABLE>
*NOTE: The net income calculated above is for informational purposes
only. Actual net income will be determined by the actual tax
levied against the income. Actual taxes are determined by
several factors including overall income earned during the tax
year and individual deductions.
Employees with Incentive Stock Options will not show tax
withholdings, however, the exchange of eCredit.com shares for
ICG shares is a taxable event. eCredit.com strongly recommends
all employees seek the guidance and advice from an external
Financial Advisor and/or Certified Public Accountant regarding
investment and tax planning.
- --------------------------------------------------------------------------------
CONFIDENTIAL 2 April 9, 2000
<PAGE>
Option Detail Report eCredit.com
- --------------------------------------------------------------------------------
"OPTIONEE NAME"
PRE-ICG EXCHANGE:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Grant Grant Option Options Options Current Acceleration Vested Total
Date Type Price Granted Outstanding Vested Step 1 Pre-Exchange
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
"Grant Date" Type $0.000 0,000 0,000 0,000 0,000 0,000
- -----------------------------------------------------------------------------------------------------------------------
KEY: ISO Incentive Stock Options
NQ Non-Qualified Stock Options (Non-Statutory Stock Options)
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
TRANSACTION DETAILS:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
1.) EXCHANGE:
<S> <C>
Options Exercised (Assuming all allowable options are exercised) .............................. 0,000
Option Price .................................................................................. 0,000
-----------
Exercise Cost 0,000
Options Exercised ............................................................................. 0,000
Exchange Price ................................................................................ 0,000
-----------
Exchange Value 0,000
Exchange Value ................................................................................ 0,000
Exercise Cost ................................................................................. 0,000
-----------
Taxable Compensation 0,000
<CAPTION>
2.) TAX WITHHOLDINGS:
<S> <C>
Federal Tax Withholding ....................................................................... 0,000
State Tax Withholding ......................................................................... 0,000
Social Security Tax Withholding ............................................................... 0,000
Medicare Tax Withholding ...................................................................... 0,000
-----------
Total Withholdings 0,000
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
POST ICG EXCHANGE:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Grant Grant Option Options Options Current Acceleration Vested Total
Date Type Price Granted Outstanding Vested Step 2 Post Exchange
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
"Grant Date" Type $0.000 0,000 0,000 0,000 0,000 0,000
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
CONFIDENTIAL 5/17/00
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Filed Pursuant to Rule 425
================================================================================
This communication is filed with the Securities and Exchange Commission pursuant
to Rules 165 and 425 promulgated under the Securities Act of 1933, as amended.
Investors and stockholders are urged to read the various filings of Internet
Capital Group, Inc. that have been made with the Securities and Exchange
Commission, including Internet Capital Group's registration statement on Form
S-4 (file number 333-34722), which relates to the exchange offer being made by
Internet Capital Group for shares of eCredit.com. Investors and stockholders may
obtain a copy of the registration statement (and the prospectus when it is
available) from commercial retrieval services and for no charge at the web site
maintained by the Securities and Exchange Commission at http://www.sec.gov.
<PAGE>
[GRAPHIC: DECORATIVE PICTURE OF A SAILBOAT OVER A DIGITAL CLOCK, WHICH IN TURN
APPEARS OVER A CALENDAR SITTING ON A DESK WITH A PAIR OF EYEGLASSES PLACED UPON
IT]
Safe Harbor Language
================================================================================
This communication contains forward-looking statements that are subject to risks
and uncertainties. We caution you not to place undue reliance on these
statements. Forward-looking statements include information concerning the tax
effects of the exchange offer, timing of the exchange offer by Internet Capital
Group, Inc., and the value of the shares of Internet Capital Group, Inc. common
stock to be received on the exchange offer. You should note that many factors
could affect our actual financial results as well as those of Internet Capital
Group, Inc., and could cause actual results to differ materially from those in
the forward-looking statements, including the factors described in Internet
Capital Group, Inc.'s Registration Statement on Form S-4 and amendments thereto
(file number 333-34722) filed with the Securities and Exchange Commission.
<PAGE>
================================================================================
CASHLESS STOCK
OPTIONS EXERCISE KIT
[Graphic: Stocks]
A.G. Edwards & Sons, Inc.
================================================================================
<PAGE>
eCredit.com-- A.G. Edwards
Employee Instruction and One North Jefferson
Guarantee of Delivery St. Louis, MO 63103
Instructions
"Edwards" refers to A.G. Edwards & Sons, Inc.
- --------------------------------------------------------------------------------
INFORMATION BELOW TO BE COMPLETED BY EMPLOYEE
- --------------------------------------------------------------------------------
--------------------------
To: A.G. Edwards & Sons, Inc. and (Date)
eCredit.com, Inc.
- --------------------------------------------------------------------------------
(Name of Issuing Corporation)
- --------------------------------------------------------------------------------
Address: 20 Carematrix Drive
------------------------------------------------------------------------
(Street)
Dedham MA 02026
------------------------------------------------------------------------
(City) (State) (ZIP)
Ladies and Gentlemen,
I,_____________________________________ (the employee), am the holder of vested
options to buy _________________ shares of eCredit.com common stock (the
eCredit.com shares) of ___________________________________________ (the
Corporation) at an exercise price of $_____ per share. The options will expire
on ___________________________________________.
I agree to tender to ICG Holdings, Inc. (Holdings) all of the eCredit.com shares
received upon the exercise of my options listed above pursuant to the terms of
the tender offer made by Holdings to the holders of eCredit.com Common Stock as
set forth in the Exchange Offer Agreement among eCredit.com, Inc., Internet
Capital Group, Inc. (ICG), Holdings and certain stockholders and key employees
of the Corporation dated February 24, 2000 and in the Registration Statement on
Form S-4 filed by ICG with the Securities and Exchange Commission (SEC) on April
13, 2000 (the Tender Offer). I further agree to instruct ICG's exchange agent
(the Exchange Agent) in the Letter of Transmittal, which I submit to the
Exchange Agent in order to tender the eCredit.com shares, to deposit the ICG
shares which are to be issued to me and any cash to be paid to me in lieu of
issuing a fractional share of ICG in exchange for the eCredit.com shares which I
tender (the "ICG Shares") into my account with Edwards.
The ICG shares to be issued upon the tender and exchange of the eCredit.com
shares will be registered with the Securities and Exchange Commission (SEC) and
the appropriate state agencies under a currently effective registration
statement that will be provided upon request. If I am deemed to be an affiliate
of ICG and intend to sell the shares, I will fully comply with SEC Rule 144 and
provide Edwards any documents it may require in connection with the sale.
Upon receipt of a properly executed exercise notice from me which will direct
the Corporation to issue the eCredit.com shares to me and payment by Edwards to
the Corporation (and any other document required by the Corporation), the
Corporation will issue a certificate for the eCredit.com shares registered in my
name within three business days after the option exercise. The ICG shares will
not be encumbered or restricted as to transfer in any manner. The ICG shares
will be freely transferable and negotiable, fully paid, and nonassessable. I
understand that Edwards may make a margin loan to me at the prevailing rate in
order for me to exercise said options. Additionally, I understand, if Edwards
incurs a Deposit/Withdrawal at Custodian (DWAC) fee, I will pay such and it will
be withdrawn from my account.
To A.G. Edwards & Sons, Inc.
Please issue payment for one of the following amounts:
|_| $______________ represents payment for exercise of Incentive Stock Option
(ISO) plan
|_| $______________ represents payment for exercise of Nonqualified Stock Option
(NSO) plan and other liabilities of the employee
The contact person at the Corporation is ____________________________, telephone
number (___) ___-____.
<PAGE>
Issuer's Guarantee of Delivery Instructions Stock Option Exercise page 2
In order to induce the Corporation to issue the eCredit.com shares, Edwards
agrees to pay to the Corporation on the date of exercise of the options the
total exercise price for the eCredit.com shares, and to pay to the Corporation
on the day after exercise of the options the amount that the Corporation advises
Edwards is the amount which the Corporation intends to pay to the United States
Internal Revenue Service on my behalf in satisfaction of the applicable
withholding requirements.
To the Corporation
The Corporation is authorized to accept payment from Edwards for payment of my
irrevocable stock option exercise notice.
I agree to instruct the Exchange Agent, and Edwards is authorized to instruct
the Exchange Agent on my behalf to use the DWAC system to collect the ICG shares
through DTC. If you can clear through DWAC, or if additional funds are due,
please contact the ESOP Section at Edwards at (314) 955-2618 or fax (314)
955-4807. Edwards DTC number is 0201.
The foregoing is all subject to my right to revoke this agreement by delivering
written notice by both mail and facsimile to ________________________________ of
Edwards at _____________________________________________________________________
(Address)
________________________________ at any time prior to twelve noon eastern
(Fax Number)
daylight time on the day prior to the date on which the Tender Offer expires.
Sincerely,
Employee's Signature
X
-------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INFORMATION BELOW TO BE COMPLETED BY ISSUING CORPORATION
- --------------------------------------------------------------------------------
Note: The Corporation may acknowledge receipt of these instructions and its
agreement to comply with these instructions either by signing below or by
verbally confirming to Edwards (If verified verbally, the phone message will be
recorded.)
The Corporation will accept a payment from Edwards for the employee's
irrevocable stock option exercise notice and will issue the certificate
representing the eCredit.com shares to the employee who has executed this
agreement and such shares will not be encumbered or restricted from being
tendered to ICG pursuant to the tender offer.
Signature Title Date
X
-------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INFORMATION BELOW TO BE COMPLETED BY FINANCIAL CONSULTANT
- --------------------------------------------------------------------------------
Social Security |_||_||_|-|_||_|-|_||_||_||_|
Account Name or
--------------------- Tax ID Number |_||_|-|_||_||_||_||_||_||_|
AGE Account No. |_||_||_||_|-|_||_||_||_||_||_| ______________ |_||_||_|
(Branch) (A/C Number) (Cash or Margin) (FC Number)
<PAGE>
"Notice to Withdraw"
I, _________________________________________________ (the employee), hereby give
written notice to withdraw my intent to tender shares in the ICG transaction.
This notice confirms that I do not wish to exercise and tender my stock options
or a portion of my stock options during the exchange.
I acknowledge that such "Notice to Withdraw" must be delivered either in
original form or by fax to the following no later than 12:00 noon Eastern
Standard Time on June 6, 2000.
Send to:
eCredit.com, Inc.
Dick Olson, Vice President Finance and Treasurer
20 Carematrix Drive
Dedham, MA 02026
Fax: 781-752-1400
I understand that this notice is irrevocable.
Sincerely,
- --------------------------------------------------------
Employee Signature
- --------------------------------------------------------
Date
<PAGE>
THE EXCHANGE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
JUNE 8, 2000 UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS OF
eCREDIT.COM, INC. COMMON STOCK MAY BE WITHDRAWN AT ANY TIME PRIOR TO
12:00 MIDNIGHT ON THE EXPIRATION DATE.
INTERNET CAPITAL GROUP, INC.
LETTER OF TRANSMITTAL
To Tender Shares of Common Stock of
eCredit.com, Inc.
Pursuant to the Exchange Offer Agreement
Dated February 24, 2000
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12;00 MIDNIGHT,
NEW YORK CITY TIME, ON JUNE 8, 2000, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
DESCRIPTION OF ECREDIT.COM, INC. SHARES TENDERED
- --------------------------------------------------------------------------------
Item 1.
Name(1) and Address of Number of
Registered Holder of Stock of eCredit.com, Inc. Cert. No. Shares Tendered(2)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Number of
Shares Tendered
- --------------------------------------------------------------------------------
Item 2.
* Indicate in this box the order (by certificate number) in which you wish your
shares of eCredit.com, Inc. Common Stock to be purchased in the event of
proration. Attach additional signed list if necessary.(3)
1st: 2nd: 3rd: 4th: 5th:
- --------------------------------------------------------------------------------
1 The name of the holder listed should be the exact name listed on each of the
stock certificates rendered herewith. If you have certificates with different
names use separate letters of transmittal.
2 The number of shares should be the number of shares of Common Stock of
eCredit.com. Inc. tendered herewith. If you are a holder of shares of one or
more series of the Convertible Preferred Stock of eCredit.com, Inc., the
number of shares listed for the applicable certificates tendered herewith
should be the number of shares of Common Stock of eCredit.com, Inc. into which
such Convertible Preferred Stock will be reclassified upon the consummation of
the Exchange Offer (or such lesser number of shares of Common Stock of
eCredit.com, Inc. represented by such certificate which are being tendered).
If you need assistance in determining this number, please contact Richard
Olson, Vice President and Treasurer of eCredit.com Inc., at (781) 752-1249.
3 If you do not designate an order, in the event less than all shares of
eCredit.com, Inc. Common Stock tendered by you are purchased due to proration,
the shares of eCredit.com, Inc. Common Stock to be purchased will be selected
in the order in which they are listed in Item 1 above.
- --------------------------------------------------------------------------------
If additional space is required please attach a separate sheet.
<PAGE>
If you have lost a certificate or certificates representing some or all of the
eCredit.com, Inc. Shares you wish to tender, please contact Richard Olson,
Vice President and Treasurer of eCredit.com, Inc. at (781) 752-1249 in
sufficient time to allow eCredit.com, Inc. to prepare and deliver to you a
replacement certificate prior to the Expiration Date. The undersigned
understand(s) that the replacement certificate must be tendered with this
Letter of Transmittal to the Exchange Agent and an appropriate affidavit of
loss and indemnity agreement and an indemnity and/or surety bond may be
required.
THIS LETTER OF TRANSMITTAL MAY BE SENT TO CHASEMELLON SHAREHOLDER
SERVICES, L.L.C., THE EXCHANGE AGENT, AT ONE OF THE ADDRESSES INDICATED BELOW:
By Hand:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
120 Broadway, 13th Floor
New York, NY 10271
Attn: Reorganization Department
By Mail:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
Post Office Box 3301
South Hackensack, NJ 07606
Attn: Reorganization Department
By Overnight Delivery:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
85 Challenger Road--Mail Drop--Reorg
Ridgefield Park, NJ 07660
Attn: Reorganization Department
Telephone Assistance: 1-800-777-3674
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE
WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS
LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF
TRANSMITTAL IS COMPLETED.
HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE INTERNET CAPITAL GROUP, INC.
COMMON STOCK FOR THEIR eCREDlT.COM, INC. COMMON STOCK PURSUANT TO THE
EXCHANGE OFFER MUST VALIDLY TENDER (AND NOT WITHDRAW) THEIR eCREDIT.COM, INC.
COMMON STOCK TO THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
2
<PAGE>
Ladies and Gentlemen:
The undersigned acknowledge(s) receipt of the Prospectus dated May 10,
2000 (the "Prospectus") of Internet Capital Group, Inc., a Delaware corporation
("Internet Capital Group"), and this Letter of Transmittal (the "Letter of
Transmittal"), which together constitutes the Offer to Exchange (the "Exchange
Offer") of ICG Holdings, Inc., a Delaware corporation, which is a wholly-owned
subsidiary of Internet Capital Group (both ICG Holdings, Inc. and Internet
Capital Group are referred to herein as "Internet Capital Group") a number of
shares of Internet Capital Group's Common Stock, par value $.001 per share (the
"Common Stock"), equal to the Exchange Ratio (as defined below), upon the terms
and subject to the conditions set forth in the Prospectus and herein, for each
properly tendered and not withdrawn share of Common Stock, par value $.001 per
share (the "eCredit.com Shares"), of eCredit.com, Inc., a Delaware corporation
("eCredit.com"), up to a maximum of 9,239,559 eCredit.com Shares. The Common
Stock has been registered under the Securities Act of 1933, as amended, pursuant
to a Registration Statement of which the Prospectus is a part.
The undersigned herewith submit(s) for cancellation and exchange the
eCredit.com Shares identified in the box above entitled "Description of
eCredit.com, Inc. Shares Tendered" pursuant to the terms and conditions
described in the Prospectus and this Letter of Transmittal.
The undersigned acknowledge(s) that the Exchange Offer expires at 12:00
Midnight, New York City time, on June 8, 2000, unless Internet Capital Group
extends the expiration date. The undersigned further acknowledge(s) that
Internet Capital Group reserves the right to extend the Exchange Offer on one or
more occasions in the event any of the conditions to its obligations to
consummate the Exchange Offer are not satisfied at the time of the scheduled
expiration date or it is required by rule or direction of the Securities and
Exchange Commission to extend the Exchange Offer. In any such event, the term
"Expiration Date" shall mean the latest time and date to which the Exchange
Offer is extended.
Subject to the proper completion of this Letter of Transmittal, the
Exchange Agent is hereby requested to issue to the undersigned (unless otherwise
indicated under "Special Issuance Instructions" below) a certificate for the
number of shares of Common Stock equal to the Exchange Ratio for each
eCredit.com Share so exchanged. The "Exchange Ratio" will be the quotient
obtained by dividing the Aggregate Number of Common Stock by the product of (i)
30% times (ii) the number of eCredit Shares that are issued and outstanding on
the date of expiration of the Exchange Offer, calculated on a fully-diluted
basis. The Aggregate Number of Common Stock means a number of shares of Common
Stock equal to the quotient obtained by dividing (i) $450,000,000 by (ii) the
average of the closing prices per share of the Common Stock as reported by the
NASDAQ National Market for the most recent three days on which trading of the
Common Stock has occurred prior to the second trading day immediately prior to
the date of expiration of the Exchange Offer, provided, however, that if the
average of the closing prices is equal to or less than $95.20, the average will
be deemed to be $95.20 and, if the average is equal to or greater than $142.80,
the average will be deemed to be $142.80. Proration, as described in the
Prospectus, may be necessary, if more than 9,239,559 eCredit.com Shares are
properly tendered and not withdrawn. The Exchange Agent is further requested to
issue a check to the undersigned (unless otherwise indicated under "Special
Issuance Instructions" below) in lieu of any fractional shares of Common Stock,
with the amount of such check equal to product of (x) such fractional shares
times (y) the closing price per share of the Common Stock as reported by the
NASDAQ National Market for the Expiration Date. The undersigned understand(s)
that the certificate representing the Common Stock issued by Internet Capital
Group and the check issued by the Exchange Agent in lieu of any fractional
shares of Common Stock in exchange for the eCredit Shares tendered herewith will
be sent to the undersigned within five to seven business days after the
consummation of the Exchange Offer at the address for the undersigned set forth
in the box above entitled "Description of eCredit.com, Inc. Shares Tendered",
unless the "Special Issuance Instructions" and/or "Special Delivery
Instructions" below are completed.
In order to properly complete this Letter of Transmittal, a holder of
eCredit.com Shares must (i) complete the box entitled "Description of
eCredit.com, Inc. Shares Tendered," (ii) if appropriate, check and complete the
boxes relating to Special Issuance Instructions and Special Delivery
Instructions, (iii) sign this Letter of Transmittal, and (iv) complete the
Substitute Form W-9. Each holder of eCredit.com Shares should read carefully the
detailed instructions below prior to completing this Letter of Transmittal.
3
<PAGE>
- --------------------------------------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
To be completed ONLY if the certificate for Common Stock and check in lieu
of a fractional share of Common Stock are to be issued in a name other than the
registered holder(s) listed in the box above entitled "Description of
dCredit.com, Inc. Shares Tendered". Certificates for eCredit.com Shares must e
properly assigned and signatures guaranteed. The undersigned hereby authorizes
the Exchange Agent to issue and, unless otherwise instructed under "Special
Delivery Instructions" below, send the certificate for Common Stock and the
check to:
PLEASE PRINT
Name _________________________________________________
Address ______________________________________________
______________________________________________________
Taxpayer Identification or
Social Security Number(s): ___________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
A. To be completed ONLY if the certificate for Common Stock and check in
lieu of a fractional share of Common Stock are to be sent to other than (i) for
the registered holder listed in the box entitled "Description of eCredit.com,
Inc. Shares Tendered", the address set forth in such box, or (ii) for an entity
listed under "Special Issuance Instructions" above, the address set forth
thereunder.
The undersigned hereby authorizes the Exchange Agent to deliver the
certificate for Common Stock and the check to:
PLEASE PRINT
Name _________________________________________________
Address ______________________________________________
B. To be completed ONLY if the certificate for Common Stock is to be
delivered electronically on the business day following the date of expiration of
the Exchange Offer, through the Deposit/Withdrawal at Custodian system, to A.G.
Edwards & Sons, Inc. and the check is to be sent as provided below.
Deliver the certificate for Common Stock electronically to A.G. Edwards &
Sons, Inc., as follows:
A.G. Edwards & Sons, Inc.
One North Jefferson
St. Louis, MO 63103
For the Account of
(print name of A.G. Edwards Account to be
credited): _____________________________________
A.G. Edwards Account Number: ___________________
Send the check as follows:
Name _________________________________________________
Address ______________________________________________
(If applicable) For desposit to account number:
______________________________________________________
- --------------------------------------------------------------------------------
4
<PAGE>
Ladies and Gentlemen:
Subject to the terms and conditions of the Exchange Offer, the undersigned
hereby tender(s) to Internet Capital Group the eCredit.com Shares indicated in
the box entitled "Description of eCredit.com, Inc. Shares Tendered". Subject to
and effective upon the acceptance for exchange of the ecredit.com Shares
tendered in accordance with this Letter of Transmittal, the undersigned sells,
assigns and transfers to, or upon the order of, Internet Capital Group all
right, title and interest in and to the eCredit.com Shares tendered hereby. The
Exchange Agent is hereby irrevocably constituted and appointed the agent and
attorney-in-fact for the undersigned (with full knowledge that the Exchange
Agent also acts as the agent of Internet Capital Group with respect to the
tendered eCredit.com Shares) with full power of substitution to (i) deliver
certificates for such eCredit.com Shares to Internet Capital Group and deliver
all accompanying evidence of transfer and authenticity to, or upon the order of,
Internet Capital Group and (ii) present such eCredit.com Shares for transfer on
the books of eCredit.com and receive all benefits and otherwise exercise all
rights of beneficial ownership of such eCredit.com Shares, all in accordance
with the terms and subject to the conditions of the Exchange Offer. The power of
attorney granted in this paragraph shall be deemed irrevocable and coupled with
an interest.
The undersigned hereby represent(s) and warrant(s) that the undersigned
has/have full power and authority to tender, sell, assign and transfer the
eCredit.com Shares tendered hereby and that Internet Capital Group will acquire
good and unencumbered title thereto, free and clear of all liens, restrictions,
charges and encumbrances and not subject to any adverse claim, when the same are
acquired by Internet Capital Group.
The undersigned hereby represents and warrants that if the undersigned is
not an individual, the undersigned is a corporation, limited liability company,
partnership, limited partnership, or trust duly organized, validly existing and
in good standing under the laws of to jurisdiction of its incorporation or
formation and has the requisite corporate or other power and authority to carry
on its business as it is now being conducted. The undersigned has all requisite
corporate or other power and authority to execute and deliver this Letter of
Transmittal and the eCredit.com Shares tendered hereby and to consummate the
transactions contemplated hereby. The execution and delivery by the undersigned
of this Letter of Transmittal and the eCredit.com Shares tendered hereby and the
consummation by the undersigned of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate or other action on
the part of the undersigned and no other corporate or other proceedings on the
part of the undersigned are necessary to authorize this Letter of Transmittal or
no consummate the transactions so contemplated by this Letter of Transmittal.
This Letter of Transmittal has been, and each other document or instrument to be
executed by the undersigned in connection herewith will be, duly executed and
delivered by the undersigned, and. when duly executed and delivered by the other
parties hereto or thereto, constitutes, or will constitute, a legal, valid and
binding obligation of the undersigned, enforceable against it in accordance with
its terms.
The undersigned is/are the sole record owners of (and has/have the
requisite power and authority to vote and dispose of) the number and type of
shares of capital stock of eCredit.com set forth in this Letter of Transmittal,
in each case free and clear of any liens. Except as set fort in Schedule 322 of
the Exchange Offer Agreement, the undersigned is/are not (a) party/parties to,
or bound by, any arrangement, agreement, instrument or order that would prohibit
or otherwise restrict in any way the transfer of the eCredit.com Shares tendered
hereby.
The execution and delivery by the undersigned of this Letter of
Transmittal and the eCredit.com Shares tendered herewith and the execution and
delivery by the undersigned of any other documents or instruments contemplated
hereby to be executed by the undersigned, the performance by the undersigned of
each of its/their obligations hereunder, and the consummation of the
transactions contemplated hereby do not and will not on the part of the
undersigned:
(a) violate or conflict with or result in a breach of any provision
of the charter, bylaws or other organizational documents, if any, of the
undersigned, as such instruments are currently in effect;
5
<PAGE>
(b) require any consent, approval or notice under, or registration
under or payment on account of, or conflict with, or result in a violation
or breach of: or constitute (with or without the giving of notice or the
lapse of time or both) a default (or give rise to any right of
termination, modification (including, in the case of leases, any change
in the amount or nature of the rent), cancellation or acceleration or
result in the creation or imposition of any lien upon the property of the
undersigned) under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, license, lease, agreement or other
instrument or obligation to which the undersigned is a party or by which
any portion of its or their properties or assets may be bound;
(c) violate or contravene any law, statute, rule or regulation, or
any order, writ, judgment, injunction, decree, determination or award of
any applicable authority currently in effect; or
(d) require any action, consent, approval or authorization of; or
review by, or declaration, registration or filing with, or notice to, any
applicable authority, or any stock exchange or similar self-regulatory
organization.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Exchange Agent or Internet Capital Group to be necessary
or desirable to complete the assignment, transfer and purchase of the
eCredit.com Shares tendered hereby. All authority conferred or agreed to be
conferred by this Letter of Transmittal shall survive the death, incapacity or
dissolution of the undersigned and every obligation of the undersigned under
this Letter of Transmittal shall be binding upon the heirs, personal
representatives, successors and assigns, trustees in bankruptcy or other legal
representatives of the undersigned. This tender may be withdrawn only in
accordance with the procedures set forth in "The Exchange Offer--Withdrawal
Rights" section of the Prospectus.
For purposes of the Exchange Offer, Internet Capital Group shall be deemed
to have accepted validly tendered eCredit.com Shares when, as and if Internet
Capital Group has given oral or written notice thereof to the Exchange Agent.
If any tendered eCredit.com Shares are not accepted for exchange pursuant
to the Exchange Offer for any reason, certificates for any such unaccepted
eCredit.com Shares will be returned, without expense, to the undersigned at the
address shown in the box above entitled "Description of eCredit.com, Inc. Shares
Tendered" as promptly as practicable after the Expiration Date.
The undersigned understand(s) that tenders of eCredit.com Shares pursuant
to the procedures described under the caption "The Exchange Offer--Procedures
for Tendering Existing eCredit.com Shares" in the Prospectus and in the
instructions hereto will constitute a binding agreement between the undersigned
and Internet Capital Group upon the terms and subject to the conditions of the
Exchange Offer.
Very truly yours,
REGISTERED HOLDER(S)*
|X| _________________________________ Dated: ___________________________
|X| _________________________________
(Signature of registered holder(s))
Area Code and Telephone Number: __________________
PLEASE SIGN AND DATE ABOVE
- ----------
* Must be signed by registered holder(s) exactly as name(s) appears on the
certificate(s), or the authorized representative of such registered
holder(s).
6
<PAGE>
Guarantee of Signature(s)
- --------------------------------------------------------------------------------
(If certificate for Common Stock is to be issued in the name of an entity other
than the registered holder(s) or if the certificate for Common Stock is to be
delivered to an entity other than the registered holder(s))
Authorized Signature: ________________________________
Name of Firm: ________________________________________
Address: _____________________________________________
Dated: _______________________________________________
- --------------------------------------------------------------------------------
7
<PAGE>
INSTRUCTIONS
Letter of Transmittal: This Letter of Transmittal must be signed, dated
and completed in its entirety including the certificate number(s) and number of
eCredit.com Shares tendered herewith.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE ECREDIT.COM
SHARES TENDERED HEREWITH AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND
RISK OF THE TENDERING HOLDERS, BUT THE DELIVERY WILL BE DEEMED MADE ONLY WHEN
ACTUALLY RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT. IF ECREDIT.COM SHARES ARE
SENT BY MAIL, IT IS SUGGESTED THAT THE MAILING BE MADE SUFFICIENTLY IN ADVANCE
OF THE EXPIRATION DATE TO PERMIT THE DELIVERY TO THE EXCHANGE AGENT PRIOR TO
12:00 MIDNIGHT, NEW YORK CITY TIME, ON THE EXPIRATION DATE.
Signature: This Letter of Transmittal must be signed by or on behalf of
the registered owner(s) of the surrendered certificate(s). In the case of joint
tenants, both must sign. When signing as agent, attorney, administrator,
executor, guardian, trustee or in any other fiduciary or other capacity or as an
officer of a corporation on behalf of the corporation, please give full title as
such and evidence of authority. If any tendered eCredit.com Shares are
registered in different names on several certificates, it will be necessary to
complete, sign and submit as many separate copies of this Letter of Transmittal
as there are different registrations of certificates. If this Letter of
Transmittal is signed by a person other tan the registered Holder(s) of any
certificate(s) specified herein, such certificate(s) must be endorsed or
accompanied by appropriate stock powers or powers of attorney, in each case
signed exactly as the name or names of the registered Holder(s) appear(s) on the
certificate(s) and signatures on such certificate(s) or power(s) must be
guaranteed by an Eligible Institution (as defined below). All signatures on this
Letter of Transmittal must be guaranteed by a firm which is a member of a
registered national securities exchange or of the National Association of
Securities Dealers, Inc.. or by a financial institution (including most
commercial banks, savings and loan associations and brokerage houses) that is a
participant in the Securities Transfer Agents Medallion Program, the New York
Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange
Medallion Program (an "Eligible Institution"), unless this Letter of Transmittal
is signed by the registered holder(s) of the eCredit.com Shares tendered hereby
and such holder(s) has (have) completed neither the box entitled "Special
Issuance Instructions" nor the box entitled "Special Delivery Instructions"
above.
Tender by Holder: Only a Holder of eCredit.com Shares may tender such
eCredit.com Shares in the Exchange Offer. Any beneficial holder of eCredit.com
Shares who is not the registered Holder and who wishes to tender should arrange
with the registered Holder to execute and deliver this Letter of Transmittal on
his or her behalf or must, prior to completing and executing this Letter of
Transmittal and delivering his or her eCredit.com Shares, either make
appropriate arrangements to register ownership of the eCredit.com Shares in such
Holder's name or obtain a properly completed stock power from the registered
Holder.
Proration; Partial Tenders: If, due to a partial tender or proration, it
is necessary to issue a new certificate for eCredit.com Shares which were not
tendered (but included on a certificate with tendered shares) or tendered but
not accepted due to proration, the Exchange Agent will provide eCredit.com with
the appropriate information so that eCredit.com can issue the appropriate
certificate(s).
Endorsement of Certificates: Do not endorse the eCredit.com certificates.
Waiver of Conditions: Internet Capital Group reserves the absolute right
to waive conditions to the Exchange Offer in the case of any eCredit.com Shares
tendered (and to refuse to do so).
No Conditional Transfers: No alternative, conditional, irregular or
contingent tenders will be accepted. All tendering holders of eCredit.com
Shares, by execution of this Letter of Transmittal, shall waive any right to
receive notice of the acceptance of their eCredit.com Shares for exchange.
8
<PAGE>
Neither Internet Capital Group, the Exchange Agent nor any other person is
obligated to give notice of any defect or irregularity with respect to any
tender of eCredit.com Shares, nor shall any of them incur any liability for
failure to give any such notice.
Mutilated, Lost, Stolen or Destroyed Existing eCredit.com Shares: If you
have lost a certificate or certificates representing some or all of the
eCredit.com, Inc. Shares you wish to tender, please contact Richard Olson, Vice
President and Treasurer of eCredit.com, Inc. at (781) 752-1249 in sufficient
time to allow eCredit.com, Inc. to prepare and deliver to you a replacement
certificate prior to the Expiration Date. The replacement certificate must be
tendered with this Letter of Transmittal to the Exchange Agent. An appropriate
affidavit of loss and indemnity agreement and an indemnity and/or surety bond
may be required.
Requests for Assistance or Additional Copies: Questions and requests for
assistance and for additional copes of the Prospectus, this Letter of
Transmittal or the "Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9" may be directed to the Exchange Agent at
1-800-777-3674 or one of the addresses listed below.
DELIVERY OF CERTIFICATES
THIS LETTER OF TRANSMITTAL AND CERTIFICATES FOR eCREDIT.COM SHARES TENDERED
HEREBY MAY BE SENT TO CHASEMELLON SHAREHOLDER SERVICES, L.L.C., THE
EXCHANGE AGENT, AT ONE OF THE ADDRESSES INDICATED BELOW:
By Hand: By Mail:
CHASEMELLON SHAREHOLDER CHASEMELLON SHAREHOLDER
SERVICES, L.L.C. SERVICES, L.L.C.
120 Broadway, 13th Floor Post Office Box 3301
New York, NY 10271 South Hackensack, NJ 07606
Attn: Reorganization Department Attn: Reorganization Department
By Overnight Delivery:
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
85 Challenger Road--Mall Drop--Reorg
Ridgefleld Park, NJ 07660
Attn: Reorganization Department
The method of delivery of the eCredit.com Shares certificates is at the
option and the risk of the holder. Certified or Registered mail, properly
insured, is suggested.
9
<PAGE>
Important Tax Information: Please complete the Substitute form W-9 below;
failure to do so may require the Exchange Agent to withhold 31% of any cash
payment you are entitled to receive.
PAYER'S NAME: CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
Part 1: PLEASE PROVIDE YOUR TIN IN Enter your Social Security
SUBSTITUTE THE BOX AT RIGHT AND CERTIFY BY or employer ID number here
Form W-9 SIGNING AND DATING BELOW. ________/________/________
Department of the -----------------------------------------------------------------------------------------------------
Treasury Part 2: |_| Check this box if you are NOT subject to backup
Internal Revenue Service withholding under the provisions of section 3406(a)(1)(C) of the
Internal Revenue Code because (1) you have not not been notified
Payer's Request for Taxpayer that you are subject to backup withholding as a result
Identification Number (TIN) of failure to report all interest or dividends or (2) the Internal
Revenue Service has notified you that you are no longer subject to
backup withholding.
-----------------------------------------------------------------------------------------------------
CERTIFICATION--UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT THE Part 3:
INFORMATION PROVIDED ON THIS FORM IS TRUE, CORRECT AND COMPLETE.
|_| Check here, if
SIGNATURE______________________________ DATE______________________ awaiting TIN.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
- --------------------------------------------------------------------------------
NEW ACCOUNT QUESTIONNAIRE
- --------------------------------------------------------------------------------
A.G. Edwards & Sons, Inc
<TABLE>
<S> <C>
Full Name________________________________________________________________
(last name, first name, middle initial)
Street Address________________________________________________________________
City, State, Zip________________________________________________________________
City State Zip
Home Phone (___)_________________ Work Phone (___) _____________________
(please include area code) (please include area code)
Employer________________________________________________________________
Position________________________________________________________________
Social Security Number |_|_|_|--|_|_|--|_|_|_|_| Birthdate |_|_|--|_|_|--|_|_|
Spouse's Name________________________________________________________________
(last name, first name, middle initial)
Spouse's Occupation________________________________________________________________
Approximate Annual Income $______________ Approximate Net Worth $_____________
Citizenship________________________________________________________________
Bank Reference________________________________________________________________
</TABLE>
A.G. Edwards
<PAGE>
MARGIN
AGREEMENT A.G. Edwards
One North Jefferson
St. Louis, MO 63103
____________________________ (MGNW9)
Account Number
In this agreement, "I", "me", and "my" refer to the client and all others who
are legally obligated on this account. "Edwards" refers to A.G. Edwards & Sons,
Inc.
For the accounts I have at Edwards for the purchase, sale or carrying of
securities, commodities and options, or related contracts, I understand and
agree to the following:
About This Agreement
1. This agreement:
o Covers all accounts that I have with Edwards at any time
o Is in addition to and in no way limits any rights Edwards has under any
other agreements between me and Edwards
o Is for the benefit of Edwards, its successors and its assigns
o Is binding on my heirs, executors, successors, administrators and assigns
o Is considered modified to conform to any changes in federal and state
rules and regulations and any applicable exchange, association, market or
clearinghouse rules or regulations and will remain in full force and
effect as modified
o Remains in effect until I give Edwards written notice of termination
o Applies to all transactions entered into, all debts incurred by and all
matters pertaining to transactions in my account
o Is made under and governed by the laws of the state of New York, excluding
its conflict of law rules.
2. I and anyone I authorize to transact business in this account have authority
on behalf of this account:
o To buy, sell (including short sales) and otherwise deal in securities or
other financial instruments
o To receive for the account confirmations, statements and communications of
every kind
o To receive for the account and to dispose of money, securities and other
property
o To make, terminate or modify for the account agreements relating to these
matters or waive any of the provisions of the agreements
o Generally to deal with Edwards as if each of us alone were the account
owner.
All this is to be done without notice to me. I or my authorized agent
authorizes a transaction that results in any loss or liability to Edwards, each
person authorizing the transaction and I agree to indemnify and hold Edwards,
its agents and its employees harmless. Edwards is under no obligation to inquire
into the purpose of any such direction or demand for delivery of securities or
payment.
3. I agree that all money and property Edwards holds in any account of mine
(held individually, jointly or otherwise) will be considered collateral and will
be subject to a general lien and security interest in Edwards' favor. I also
agree that Edwards is authorized to sell and/or purchase any and all property in
any account to satisfy all my obligations.
4. Except as provided in this agreement, no provision of this agreement may be
changed. Any action taken in any of my accounts will not be considered
ratification of any attempted change and will not prevent Edwards from asserting
and enforcing the original provisions of this agreement unless the changes are
agreed to in a separate document signed by Edwards' Director of Operations or a
designee.
5. If any part of this agreement is deemed invalid, it will not affect the rest
of the agreement, which will remain valid and enforceable.
6. I may terminate the account at any time by giving Edwards notice. Edwards
may terminate the account at any time for any reason. Closing or terminating the
account will not affect rights or obligations that arose before termination.
7. All the following statements are true unless Edwards has been notified in
writing otherwise:
o I am older than the age of majority.
o I am authorized to sign this agreement if acting on the behalf of another.
o I am not insolvent.
o I am not an employee of any securities or commodities exchange; a
corporation of which any exchange owns a majority of the capital stock; or
a member firm, corporation or organization registered with any exchange.
o I am not an employee of a bank, trust company or insurance company.
o I am not registered with any securities or commodities exchange,
association or commission.
o I am not an employee of any corporation, firm or individual engaged in the
business of dealing as either a broker or a principal in securities, bills
of exchange, acceptances or other forms of commercial paper.
o No people other than those signing this agreement have an interest in this
account.
I will notify Edwards in writing if any of the above changes.
8. I will give any notice required under this agreement in writing to the
Director of Operations at Edwards' headquarters at One North Jefferson, St.
Louis, MO 63103 or at any other address that Edwards specifies in writing.
9. Communications will be sent to me at the address I provide at the time I
open my account or such other address as I may provide to Edwards in writing in
the future. All communications sent to that address, whether by mail by
telegraph, by facsimile, by messenger, electronically or otherwise, will be
treated as if they were given to me personally whether or not I receive them.
Reports of the execution of orders will be conclusive if not objected to by me
within three days after being forwarded to me, and statements
AGE 107--1/00
<PAGE>
Margin Agreement Page 2
of account will be conclusive if not objected to by me within 10 days after
being forwarded to me.
10. If Edwards prevails, I must pay for all fees and costs, including attorney's
fees, that Edwards incurs in collecting a debt from me, in defending any action
or arbitration I bring that attempts to revoke this agreement, or in defending
any action or arbitration I bring that attempts to recover damages for the
actions of Edwards or its employees.
11. Any action I bring against Edwards or its present or past officers, agents
or employees, except arbitration proceedings governed by the arbitration
agreement below, will be brought and heard in the court nearest to the location
where the Edwards branch office that serviced my account is or was located. This
provision applies even if I have related disputes with other parties that cannot
be resolved in the same location.
Arbitration Disclosure
12. This Agreement contains a pre-dispute arbitration clause. By signing an
arbitration agreement, the parties agree as follows:
(A) All parties to this agreement are giving up the right to sue each other in
court including the right to a trial by jury, except as provided by the
rules of the arbitration forum in which a claim is filed.
(B) Arbitration awards are generally final and binding; a party's ability to
have a reverse or modify an arbitration award is very limited.
(C) The ability of the parties to obtain documents, witness statements and other
discovery is generally more limited in arbitration than in court
proceedings.
(D) The arbitrators do not have to explain the reason(s) for their award.
(E) The panel of arbitrators will typically include a minority of arbitrators
who were or are affiliated with the securities industry.
(F) The rules of some arbitration forums may impose time limits for bringing a
claim in arbitration. In some cases, a claim that is ineligible for
arbitration may be brought in court.
(0) The rules of the arbitration forum in which the claim is filed, and any
amendments thereto, shall be incorporated into this agreement.
No person shall bring a putative or certified class action to arbitration or
seek to enforce any pre-dispute arbitration agreement against any person who has
initiated in court a putative class action or who is a member of a putative
class who has not opted out of the class with respect to any claims encompassed
by the putative class action until:
(i) The class certification is denied; or
(ii) The class is decertified; or
(iii) The client is excluded from the class by the court. Such forbearance to
enforce an agreement to arbitrate will not constitute a waiver of any
rights under this agreement except to the extent stated herein.
Arbitration Provision
13. I agree and, by carrying my account, Edwards agrees that all controversies
between me and Edwards or any of its present or former officers, directors,
agents or employees will be determined by arbitration. Any arbitration under
this agreement will be before the National Association of Securities Dealers,
Inc., the New York Stock Exchange, Inc. or an arbitration facility provided by
any other securities exchange of which Edwards is a member. I (or my authorized
agent) may choose which of these organizations will be the forum for the
arbitration. To do so, I must send a registered letter or telegram specifying my
choice to Edwards' headquarters in St. Louis within five days of Edwards'
request to make a selection. If I fail to make a selection within five days of
the notice, Edwards may select the arbitration organization.
14. This arbitration provision applies to any controversy arising from events
that occurred before, on or after I signed this agreement. The award of the
arbitrators, or of the majority of them, is final, and judgment upon the award
rendered may be entered in any court (state or federal) that has jurisdiction.
About My Margin Account
15. 1 will be charged interest on balances due in any of my accounts at rates
related to Edwards' then-prevailing broker's call money rate. I have received
and examined a statement from Edwards explaining the details and conditions
under which interest will be charged, the method of computing interest and the
conditions under which additional collateral may be required.
16. Whenever I have a debit balance or a short position with Edwards, any
property Edwards holds in any of my accounts may be pledged or repledged
separately or together with the property of others. The pledge can be for more
or less than the amount of my loan, and Edwards may or may not retain in its
possession or under its control an equal amount of similar property. Edwards may
keep any benefits received on these pledges or repledges.
17. In return for loaning me money, Edwards may borrow the securities in my
margin account or lend out securities from this account to others. In connection
with such loans, Edwards may receive and retain certain benefits to which I am
not entitled. In certain circumstances, such loans may limit my voting rights on
the securities lent.
18. Edwards may obtain investigative reports concerning my credit, character and
lifestyle. I have the right, upon written request, to receive complete
disclosure of the nature and scope of any such investigation.
19. No registered representative, branch office manager or branch office
employee is authorized to waive or modify Edwards' margin demands or postpone
sellouts or buy-ins unless agreed to in writing by Edwards' Director of
Operations or a designee. Further, no arrangements that conflict with Edwards'
usual requirements will be binding or have any effect unless agreed to in a
separate document signed by Edwards' Director of Operations or a designee.
AGE 107--1/00
<PAGE>
MARGIN
AGREEMENT A.G. Edwards
One North Jefferson
St. Louis, MO 63103
____________________________ (MGNW9)
Account Number
In this agreement, "I", "me", and "my" refer to the client and all others who
are legally obligated on this account. "Edwards" refers to A.G. Edwards & Sons,
Inc.
For the accounts I have at Edwards for the purchase, sale or carrying of
securities, commodities and options, or related contracts, I understand and
agree to the following:
About This Agreement
1. This agreement:
o Covers all accounts that I have with Edwards at any time
o Is in addition to and in no way limits any rights Edwards has under any
other agreements between me and Edwards
o Is for the benefit of Edwards, its successors and its assigns
o Is binding on my heirs, executors, successors, administrators and assigns
o Is considered modified to conform to any changes in federal and state
rules and regulations and any applicable exchange, association, market or
clearinghouse rules or regulations and will remain in full force and
effect as modified
o Remains in effect until I give Edwards written notice of termination
o Applies to all transactions entered into, all debts incurred by and all
matters pertaining to transactions in my account
o Is made under and governed by the laws of the state of New York, excluding
its conflict of law rules.
2. I and anyone I authorize to transact business in this account have authority
on behalf of this account:
o To buy, sell (including short sales) and otherwise deal in securities or
other financial instruments
o To receive for the account confirmations, statements and communications of
every kind
o To receive for the account and to dispose of money, securities and other
property
o To make, terminate or modify for the account agreements relating to these
matters or waive any of the provisions of the agreements
o Generally to deal with Edwards as if each of us alone were the account
owner
All this is to be done without notice to me. I or my authorized agent
authorizes a transaction that results in any loss or liability to Edwards, each
person authorizing the transaction and I agree to indemnify and hold Edwards,
its agents and its employees harmless. Edwards is under no obligation to inquire
into the purpose of any such direction or demand for delivery of securities or
payment.
3. I agree that all money and property Edwards holds in any account of mine
(held individually, jointly or otherwise) will be considered collateral and will
be subject to a general lien and security interest in Edwards' favor. I also
agree that Edwards is authorized to sell and/or purchase any and all property in
any account to satisfy all my obligations.
4. Except as provided in this agreement, no provision of this agreement may be
changed. Any action taken in any of my accounts will not be considered
ratification of any attempted change and will not prevent Edwards from asserting
and enforcing the original provisions of this agreement unless the changes are
agreed to in a separate document signed by Edwards' Director of Operations or a
designee.
5. If any part of this agreement is deemed invalid, it will not affect the rest
of the agreement, which will remain valid and enforceable.
6. I may terminate the account at any time by giving Edwards notice. Edwards
may terminate the account at any time for any reason. Closing or terminating the
account will not affect rights or obligations that arose before termination.
7. All the following statements are true unless Edwards has been notified in
writing otherwise:
o I am older than the age of majority
o I am authorized to sign this agreement if acting on the behalf of another
o I am not insolvent.
o I am not an employee of any securities or commodities exchange; a
corporation of which any exchange owns a majority of the capital stock; or
a member firm, corporation or organization registered with any exchange.
o I am not an employee of a bank, trust company or insurance company
o I am not registered with any securities or commodities exchange,
association or commission.
o I am not an employee of any corporation, firm or individual engaged in the
business of dealing as either a broker or a principal in securities, bills
of exchange, acceptances or other forms of commercial paper
o No people other than those signing this agreement have an interest in this
account.
I will notify Edwards in writing if any of the above changes.
8. I will give any notice required under this agreement in writing to the
Director of Operations at Edwards' headquarters at One North Jefferson, St.
Louis, MO 63103 or at any other address that Edwards specifies in writing.
9. Communications will be sent to me at the address I provide at the time I
open my account or such other address as I may provide to Edwards in writing in
the future. All communications sent to that address, whether by mail by
telegraph, by facsimile, by messenger, electronically or otherwise, will be
treated as if they were given to me personally whether or not I receive them.
Reports of the execution of orders will be conclusive if not objected to by me
within three days after being forwarded to me, and statements
AGE 107--1/00
CLIENT COPY
<PAGE>
Margin Agreement Page 2
of account will be conclusive if not objected to by me within 10 days after
being forwarded to me.
10. If Edwards prevails, I must pay for all fees and costs, including attorney's
fees, that Edwards incurs in collecting a debt from me, in defending any action
or arbitration I bring that attempts to revoke this agreement, or in defending
any action or arbitration I bring that attempts to recover damages for the
actions of Edwards or its employees.
11. Any action I bring against Edwards or its present or past officers, agents
or employees, except arbitration proceedings governed by the arbitration
agreement below, will be brought and heard in the court nearest to the location
where the Edwards branch office that serviced my account is or was located. This
provision applies even if I have related disputes with other parties that cannot
be resolved in the same location.
Arbitration Disclosure
12. This Agreement contains a pre-dispute arbitration clause. By signing an
arbitration agreement, the parties agree as follows:
(A) All parties to this agreement are giving up the right to sue each other in
court including the right to a trial by jury, except as provided by the
rules of the arbitration forum in which a claim is filed.
(B) Arbitration awards are generally final and binding; a party's ability to
have a reverse or modify an arbitration award is very limited.
(C) The ability of the parties to obtain documents, witness statements and other
discovery is generally more limited in arbitration than in court
proceedings.
(D) The arbitrators do not have to explain the reason(s) for their award.
(E) The panel of arbitrators will typically include a minority of arbitrators
who were or are affiliated with the securities industry.
(F) The rules of some arbitration forums may impose time limits for bringing a
claim in arbitration. In some cases, a claim that is ineligible for
arbitration may be brought in court.
(0) The rules of the arbitration forum in which the claim is filed, and any
amendments thereto, shall be incorporated into this agreement.
No person shall bring a putative or certified class action to arbitration or
seek to enforce any pre-dispute arbitration agreement against any person who has
initiated in court a putative class action or who is a member of a putative
class who has not opted out of the class with respect to any claims encompassed
by the putative class action until:
(i) The class certification is denied; or
(ii) The class is decertified; or
(iii) The client is excluded from the class by the court. Such forbearance to
enforce an agreement to arbitrate will not constitute a waiver of any
rights under this agreement except to the extent stated herein.
Arbitration Provision
13. I agree and, by carrying my account, Edwards agrees that all controversies
between me and Edwards or any of its present or former officers, directors,
agents or employees will be determined by arbitration. Any arbitration under
this agreement will be before the National Association of Securities Dealers,
Inc., the New York Stock Exchange, Inc. or an arbitration facility provided by
any other securities exchange of which Edwards is a member. I (or my authorized
agent) may choose which of these organizations will be the forum for the
arbitration. To do so, I must send a registered letter or telegram specifying my
choice to Edwards' headquarters in St. Louis within five days of Edwards'
request to make a selection. If I fail to make a selection within five days of
the notice, Edwards may select the arbitration organization.
14. This arbitration provision applies to any controversy arising from events
that occurred before, on or after I signed this agreement. The award of the
arbitrators, or of the majority of them, is final, and judgment upon the award
rendered may be entered in any court (state or federal) that has jurisdiction.
About My Margin Account
15. 1 will be charged interest on balances due in any of my accounts at rates
related to Edwards' then-prevailing broker's call money rate. I have received
and examined a statement from Edwards explaining the details and conditions
under which interest will be charged, the method of computing interest and the
conditions under which additional collateral may be required.
16. Whenever I have a debit balance or a short position with Edwards, any
property Edwards holds in any of my accounts may be pledged or repledged
separately or together with the property of others. The pledge can be for more
or less than the amount of my loan, and Edwards may or may not retain in its
possession or under its control an equal amount of similar property. Edwards may
keep any benefits received on these pledges or repledges.
17. In return for loaning me money, Edwards may borrow the securities in my
margin account or lend out securities from this account to others. In connection
with such loans, Edwards may receive and retain certain benefits to which I am
not entitled. In certain circumstances, such loans may limit my voting rights on
the securities lent.
18. Edwards may obtain investigative reports concerning my credit, character and
lifestyle. I have the right, upon written request, to receive complete
disclosure of the nature and scope of any such investigation.
19. No registered representative, branch office manager or branch office
employee is authorized to waive or modify Edwards' margin demands or postpone
sellouts or buy-ins unless agreed to in writing by Edwards' Director of
Operations or a designee. Further, no arrangements that conflict with Edwards'
usual requirements will be binding or have any effect unless agreed to in a
separate document signed by Edwards' Director of Operations or a designee.
AGE 107--1/00
CLIENT COPY
<PAGE>
Margin Agreement page 3
20. I will settle transactions when they are due and maintain Edwards' required
amount of collateral in my account in the form of money or property acceptable
to Edwards. I will immediately pay on demand the entire amount owed or any part
that Edwards may request.
21. I will make all checks that are to be credited to my account payable to
"A.G. Edwards & Sons, Inc." Edwards is not required to accept checks made
payable to any other party. All checks accepted for deposit will be accepted for
collection only and will not be considered credited to my account until they are
collected.
22. Edwards may transfer money or securities between or within any of my
accounts without notifying me. This provision does not apply to my regulated
commodity accounts, where transfers would require my specific agreement.
23. Unless I have specified otherwise, Edwards can enter orders for my account
on any appropriate exchange or market. Edwards can employ agents on my behalf
and will tell me who they are at my request. Because the agents are independent
contractors, Edwards assumes no responsibility for any errors they may make, but
if a controversy arises between the agent and me, Edwards will provide the
available records and details of the transaction at no cost to me.
24. Edwards is not responsible for compensating me for any default by a market
or exchange on which I have acquired a position. Exchanges may change terms,
rules and procedures that may affect the market adversely. There is a
possibility that the exchanges may default on money owed me or may be unable to
buy or deliver positions that were traded.
25. Edwards may prohibit or restrict trading of securities, options and
commodities in any of my accounts at any time.
26. At any time and without my authorization, Edwards has the authority to sell
any securities or commodities in my Edwards account, buy back any short
positions, or settle or cancel any outstanding orders if:
o I fail to make a payment or deliver any security or commodity on time.
o The value of my Edwards account falls below Edwards' requirements.
o I die.
o Edwards believes it necessary for its protection, or
o I fail to meet any obligation to Edwards.
Any sale, purchase, settlement or cancellation will occur without notice to me
and at Edwards' discretion and at its commission rates wherever the business is
transacted. There will be no public advertisement and no request or demand for
payment to me because I have expressly waived those rights. Edwards may purchase
any property for its own account or for anyone else free from right of
redemption. I will remain liable for any remaining debt in my accounts. I must
pay any fines or expenses that any exchange or clearinghouse charges Edwards if
I fail to deliver or make available any security or commodity Edwards sells. If
Edwards chooses to give me notice or demands payment, it is not precluded from
taking the actions described in this paragraph at a later time.
Under penalties of perjury, I certify the following:
The Social Security or taxpayer identification number below is my correct
number.
>
- --------------------------------------------------------------------------------
|_| Check here if you have applied for and are waiting for your number to be
issued.
Unless the box below is checked, I have not been notified by the IRS that I am
subject to backup withholding or the IRS has notified me that I am no longer
subject to backup withholding.
By checking this box, I state that I am subject to backup withholding. |_|
By signing this Agreement, I acknowledge that:
(A) I have received a duplicate of this Agreement.
(B) The Internal Revenue Service does not require my consent to any provision of
this document, other than the certifications required to avoid backup
withholding.
(C) My securities may be loaned to Edwards or loaned to others.
(D) This Agreement contains a binding and enforceable pre-dispute arbitration
clause in Paragraph 13 on page 2.
Signature
X
- --------------------------------------------------------------------------------
Signature
X
- --------------------------------------------------------------------------------
Date
- --------------------------------------------------------------------------------
City, State
- --------------------------------------------------------------------------------
AGE 107--1/00
CLIENT COPY
<PAGE>
Margin Agreement Credit Disclosure page 4
The following margin agreement credit disclosure describes the terms under which
Edwards will extend credit and charge interest and how my obligations are
secured by property in my account.
1. When I purchase securities on credit, I pay only a portion of the purchase
price and Edwards will extend credit for the balance. This credit appears as a
debit balance on the monthly client statement. The debit balance will also
increase when:
o I withdraw cash from the account.
o I incur any other charges or fees, including interest charges.
o The price of "when issued" securities fluctuates, or
o The market value of securities sold short increases.
2. Edwards charges interest on the debit balance and requires me to maintain
securities, other property or cash in the margin account to secure repayment of
funds advanced and interest due. Interest is calculated by adding the adjusted
daily debit balance for all days during a period, multiplying this sum by the
applicable annual interest rate and dividing the result by 360.
3. The annual rate of interest Edwards charges will be based on my average
adjusted daily debit balance for the interest period and will exceed Edwards'
prevailing broker's call money rate by no more than the percentage shown in the
table below. The broker's call money rate is the interest rate at which brokers
borrow money. Edwards' broker's call money rate will be no more than the highest
broker's call money rate published in the Eastern edition of The Wall Street
Journal. This rate will change without any notice to me to reflect changes in
Edwards' broker's call money rate, but if it changes for any other reason, I
will be given at least 30 days' prior written notice.
Average daily net debit balance Percentage added to
broker's call money rate
$0--$9,999 2.50%
$l0,000--$24,999 2.25%
$25,000--$49,999 1.75%
$50,000--$74,999 1.25%
$75,000--$99,999 1.00%
$100,000 and above 0.75%
4. The daily debit balance in my account is the balance of the amount I have
borrowed from Edwards that I have not repaid as of the close of the business
day. Credit balances in certain account types, including cash accounts, may
reduce the daily debit balance for computation of interest. Debits and credits
resulting from purchases and sales are entered into my account on the date they
settle. The term "adjusted daily debit balance" means the daily debit balance
minus applicable credits, if any.
5. I will not receive credit from a short sale to reduce the balance due in my
account on which interest is charged, because Edwards must borrow the securities
sold short to make delivery to the purchaser and may deposit an amount equal to
the proceeds of the short sale with the lender of the security. My margin
account will be debited or credited at least monthly (normally using the
previous day's close) to reflect any increase or decrease in the deposit
required by the lender of the security as a result of an increase or decrease in
the market value of the borrowed security.
6. I will receive a monthly statement for each of my Edwards accounts showing:
o The debit balance at the beginning of any period when interest is charged
o Debits and credits to the account
o The debit balance at the end of each period when interest is charged
o The average adjusted daily debit balance on which interest is calculated
o The rate(s) of interest
o The total interest charged
o Any other charges for the period
I understand that it may be necessary for me to use both the prior and current
months' statements to verify the computation of interest because interest
periods may differ from the period my monthly statement covers.
7. Edwards may require me to deposit additional money or securities that are
acceptable to it as required in accordance with the rules and regulations of the
Board of Governors of the Federal Reserve System, any exchanges or associations
of which it is a member, and any other regulatory agency to whose jurisdiction
it is subject. Edwards may also require me to repay any loan in whole or in part
at any time or may require that I deposit additional collateral as security for
my obligations to it. Edwards will usually require additional margin deposits if
the equity (market value of securities minus debit balance) in my account (other
than commodities accounts) falls to 30% or below of the market value of my
securities. However, Edwards may require that the net value of my account be
more than 30% of the market value of my securities, depending on factors such as
the type, price, quantity and marketability of my securities.
8. I understand that all money and property Edwards holds in any account of mine
(held individually, jointly or otherwise) or that may at any time be in Edwards'
possession or under its control for any purpose will be considered collateral
and will be subject to a general lien and security interest for the discharge of
all my obligations to Edwards.
AGE 107--1/00
CLIENT COPY
<PAGE>
Margin Agreement page 3
20. I will settle transactions when they are due and maintain Edwards' required
amount of collateral in my account in the form of money or property acceptable
to Edwards. I will immediately pay on demand the entire amount owed or any part
that Edwards may request.
21. I will make all checks that are to be credited to my account payable to
"A.G. Edwards & Sons, Inc." Edwards is not required to accept checks made
payable to any other party. All checks accepted for deposit will be accepted for
collection only and will not be considered credited to my account until they are
collected.
22. Edwards may transfer money or securities between or within any of my
accounts without notifying me. This provision does not apply to my regulated
commodity accounts, where transfers would require my specific agreement.
23. Unless I have specified otherwise, Edwards can enter orders for my account
on any appropriate exchange or market. Edwards can employ agents on my behalf
and will tell me who they are at my request. Because the agents are independent
contractors, Edwards assumes no responsibility for any errors they may make, but
if a controversy arises between the agent and me, Edwards will provide the
available records and details of the transaction at no cost to me.
24. Edwards is not responsible for compensating me for any default by a market
or exchange on which I have acquired a position. Exchanges may change terms,
rules and procedures that may affect the market adversely. There is a
possibility that the exchanges may default on money owed me or may be unable to
buy or deliver positions that were traded.
25. Edwards may prohibit or restrict trading of securities, options and
commodities in any of my accounts at any time.
26. At any time and without my authorization, Edwards has the authority to sell
any securities or commodities in my Edwards account, buy back any short
positions, or settle or cancel any outstanding orders if:
o I fail to make a payment or deliver any security or commodity on time.
o The value of my Edwards account falls below Edwards' requirements.
o I die.
o Edwards believes it necessary for its protection, or
o I fail to meet any obligation to Edwards.
Any sale, purchase, settlement or cancellation will occur without notice to me
and at Edwards' discretion and at its commission rates wherever the business is
transacted. There will be no public advertisement and no request or demand for
payment to me because I have expressly waived those rights. Edwards may purchase
any property for its own account or for anyone else free from right of
redemption. I will remain liable for any remaining debt in my accounts. I must
pay any fines or expenses that any exchange or clearinghouse charges Edwards if
I fail to deliver or make available any security or commodity Edwards sells. If
Edwards chooses to give me notice or demands payment, it is not precluded from
taking the actions described in this paragraph at a later time.
Under penalties of perjury, I certify the following:
The Social Security or taxpayer identification number below is my correct
number.
>
- --------------------------------------------------------------------------------
|_| Check here if you have applied for and are waiting for your number to be
issued.
Unless the box below is checked, I have not been notified by the IRS that I am
subject to backup withholding or the IRS has notified me that I am no longer
subject to backup withholding.
By checking this box, I state that I am subject to backup withholding. |_|
By signing this Agreement, I acknowledge that:
(A) I have received a duplicate of this Agreement.
(B) The Internal Revenue Service does not require my consent to any provision of
this document, other than the certifications required to avoid backup
withholding.
(C) My securities may be loaned to Edwards or loaned to others.
(D) This Agreement contains a binding and enforceable pre-dispute arbitration
clause in Paragraph 13 on page 2.
Signature
X
- --------------------------------------------------------------------------------
Signature
X
- --------------------------------------------------------------------------------
Date
- --------------------------------------------------------------------------------
City, State
- --------------------------------------------------------------------------------
AGE 107--1/00
<PAGE>
Margin Agreement Credit Disclosure page 4
The following margin agreement credit disclosure describes the terms under which
Edwards will extend credit and charge interest and how my obligations are
secured by property in my account.
1. When I purchase securities on credit, I pay only a portion of the purchase
price and Edwards will extend credit for the balance. This credit appears as a
debit balance on the monthly client statement. The debit balance will also
increase when:
o I withdraw cash from the account.
o I incur any other charges or fees, including interest charges.
o The price of "when issued" securities fluctuates, or
o The market value of securities sold short increases.
2. Edwards charges interest on the debit balance and requires me to maintain
securities, other property or cash in the margin account to secure repayment of
funds advanced and interest due. Interest is calculated by adding the adjusted
daily debit balance for all days during a period, multiplying this sum by the
applicable annual interest rate and dividing the result by 360.
3. The annual rate of interest Edwards charges will be based on my average
adjusted daily debit balance for the interest period and will exceed Edwards'
prevailing broker's call money rate by no more than the percentage shown in the
table below. The broker's call money rate is the interest rate at which brokers
borrow money. Edwards' broker's call money rate will be no more than the highest
broker's call money rate published in the Eastern edition of The Wall Street
Journal. This rate will change without any notice to me to reflect changes in
Edwards' broker's call money rate, but if it changes for any other reason, I
will be given at least 30 days' prior written notice.
Average daily net debit balance Percentage added to
broker's call money rate
$0--$9,999 2.50%
$l0,000--$24,999 2.25%
$25,000--$49,999 1.75%
$50,000--$74,999 1.25%
$75,000--$99,999 1.00%
$100,000 and above 0.75%
4. The daily debit balance in my account is the balance of the amount I have
borrowed from Edwards that I have not repaid as of the close of the business
day. Credit balances in certain account types, including cash accounts, may
reduce the daily debit balance for computation of interest. Debits and credits
resulting from purchases and sales are entered into my account on the date they
settle. The term "adjusted daily debit balance" means the daily debit balance
minus applicable credits, if any.
5. I will not receive credit from a short sale to reduce the balance due in my
account on which interest is charged, because Edwards must borrow the securities
sold short to make delivery to the purchaser and may deposit an amount equal to
the proceeds of the short sale with the lender of the security. My margin
account will be debited or credited at least monthly (normally using the
previous day's close) to reflect any increase or decrease in the deposit
required by the lender of the security as a result of an increase or decrease in
the market value of the borrowed security.
6. I will receive a monthly statement for each of my Edwards accounts showing:
o The debit balance at the beginning of any period when interest is charged
o Debits and credits to the account
o The debit balance at the end of each period when interest is charged
o The average adjusted daily debit balance on which interest is calculated
o The rate(s) of interest
o The total interest charged
o Any other charges for the period
I understand that it may be necessary for me to use both the prior and current
months' statements to verify the computation of interest because interest
periods may differ from the period my monthly statement covers.
7. Edwards may require me to deposit additional money or securities that are
acceptable to it as required in accordance with the rules and regulations of the
Board of Governors of the Federal Reserve System, any exchanges or associations
of which it is a member, and any other regulatory agency to whose jurisdiction
it is subject. Edwards may also require me to repay any loan in whole or in part
at any time or may require that I deposit additional collateral as security for
my obligations to it. Edwards will usually require additional margin deposits if
the equity (market value of securities minus debit balance) in my account (other
than commodities accounts) falls to 30% or below of the market value of my
securities. However, Edwards may require that the net value of my account be
more than 30% of the market value of my securities, depending on factors such as
the type, price, quantity and marketability of my securities.
8. I understand that all money and property Edwards holds in any account of mine
(held individually, jointly or otherwise) or that may at any time be in Edwards'
possession or under its control for any purpose will be considered collateral
and will be subject to a general lien and security interest for the discharge of
all my obligations to Edwards.
AGE 107--1/00
<PAGE>
[A.G. Edwards & Sons, Inc. LOGO]
Certificate of Foreign Status of Beneficial Owner
for United States Tax Withholding
(Substitute Form W-8BEN)
Account Number ___________________________ NRC
o Do not complete this form if you are a:
-- U.S. citizen or other U.S. person, including a resident alien individual
(use Form W-9)
-- Foreign partnership
-- Foreign government, international organization, foreign central bank of
issue, tax-exempt organization or private foundation claiming the
applicability of Section 501(c), 892, 895 or 1443(b)
-- Person acting as an intermediary
-- Person claiming an exemption from U.S. withholding on income effectively
connected with the conduct of a trade or business in the United States
Instead, contact your financial consultant for the appropriate form.
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
PART I Identification of Beneficial Owner (See instructions on reverse.)
- ------------------------------------------------------------------------------------------------------------------------------------
1 Name of individual or organization that is the beneficial owner 2 Country of incorporation or organization
- ------------------------------------------------------------------------------------------------------------------------------------
3 Type of beneficial owner |_| Individual |_| Corporation |_| Disregarded entity
|_| Partnership |_| Trust |_| Estate |_|Foreign government
|_| International organization |_| Foreign central bank of issue |_| Foreign tax-exempt organization
- ------------------------------------------------------------------------------------------------------------------------------------
4 Permanent residence address (street, apt. or suite no., or rural route). Do not use a P.O. box.
- ------------------------------------------------------------------------------------------------------------------------------------
City or town, state or province. Include postal code where
appropriate. Country (do not abbreviate)
- ------------------------------------------------------------------------------------------------------------------------------------
5 Mailing address (if different from above)
- ------------------------------------------------------------------------------------------------------------------------------------
City or town, state or province. Include postal code where
appropriate. Country (do not abbreviate)
- ------------------------------------------------------------------------------------------------------------------------------------
6 U.S. taxpayer identification number, if required 7 Foreign tax identifying number, if any (optional)
|_| SSN or ITIN |_| EIN
- ------------------------------------------------------------------------------------------------------------------------------------
8 Account number(s) (optional)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PART II Claim of Tax Treaty Benefits (if applicable)
- --------------------------------------------------------------------------------
9 I certify that (check all that apply):
a |_| The beneficial owner is a resident of ______________________
within the meaning of the income tax treaty between the United
States and that country.
b |_| If required, the U.S. taxpayer identification number is stated on
line 6 (see instructions).
c |_| The beneficial owner is not an individual, derives the income
for which the treaty benefits are claimed and, if applicable,
meets the requirements of the treaty article dealing with
limitation on benefits (see instructions).
d |_| The beneficial owner is not an individual, is claiming treaty
benefits for dividends received from a foreign corporation or
interest from a U.S. trade or business of a foreign corporation,
and meets qualified resident status (see instructions).
e |_| The beneficial owner is related to the person obligated to pay
the income within the meaning of Section 267(b) or 707(b) and will
file Form 8833 if the amount subject to withholding received
during a calendar year exceeds, in the aggregate, $500,000.
10 Special rates and conditions (if applicable -- see instructions): The
beneficial owner is claiming the provisions of Article __________ of the
treaty identified on line 9a above to claim a _________% rate of
withholding on (specify type of income): _______________________________
Explain the reasons the beneficial owner meets the terms of the treaty
article: _______________________________________________________________
________________________________________________________________________
________________________________________________________________________
- --------------------------------------------------------------------------------
PART III Certification
- --------------------------------------------------------------------------------
Under penalties of penury, I declare that I have examined the information on
this form and, to the best at my knowledge and belief, it is true, correct and
complete. I further certify under penalties of perjury that:
o I am the beneficial owner (or am authorized to sign for the beneficial
owner) of all the income to which this form relates.
o The beneficial owner is a foreign person.
o The income to which this form relates is not effectively connected with the
conduct of a trade or business in the united States.
o For broker transactions or barter exchanges, the beneficial owner is an
exempt foreign person as defined in the instructions.
o Any income from a notional principal contract to which this form relates is
not effectively connected with the conduct of a trade or business within the
United States.
o I am not a former citizen or long-term resident of the United States subject
to Section 877 (relating to certain acts of expatriation), or, if I am
subject to Section 877, I am nevertheless entitled to treaty benefits with
respect to the amounts received.
<TABLE>
<S> <C> <C>
Sign Here _____________________________________________________________________________________ ________ _________________________
Signature of beneficial owner for individual authorized to sign for beneficial owner) Date Capacity in which acting
Sign Here _____________________________________________________________________________________ ________
All joint tenants must sign Date
</TABLE>
================================================================================
AGE 899--10/99
<PAGE>
Certificate of Foreign Status of Beneficial Owner for United States
Tax Withholding
Part I
Line 1. Enter your name.
Line 2. Enter the country of incorporation if you are a corporation. If you are
another type of entity, enter the country under whose laws you are created,
organized or governed. If you are an individual, enter N/A (for "not
applicable").
Line 3. Check the one box that applies. By checking a box, you are representing
that you qualify for this classification. You must check the box that represents
your classification (e.g., corporation, partnership, trust, estate) under U.S.
tax principles. Do not check the box that describes your status under the law of
the treaty country or the status of your single owner. If you are a partnership
or disregarded entity receiving a payment for which treaty benefits are being
claimed, you must check the Partnership or Disregarded entity box. If you are a
sole proprietor, check the Individual box, not the Disregarded entity box.
Line 4. Your permanent residence address is the address in the country where you
claim to be a resident for purposes of that country's income tax. If you are
giving Form W-8BEN to claim a reduced rate of withholding under an income tax
treaty, you must determine your residency in the manner required by the treaty.
Do not show the address of a financial institution, a post office box or an
address used solely for mailing purposes. If you are an individual who does not
have a tax residence in any country, your permanent residence is where you
normally reside. If you are not an individual and you do not have a tax
residence in any country, the permanent residence address is where you maintain
your principal office.
Line 5. Enter your mailing address only if it is different from the address you
show on Line 4.
Line 6. A U.S. taxpayer identification number (TIN) is a Social Security number
(SSN), employer identification number (EIN) or IRS individual taxpayer
identification number (ITIN). Check the appropriate box for the type of TIN you
are providing. Contact a Social Security Administration (SSA) office to find out
if you are eligible to get an SSN. If you do not have an SSN but are eligible to
get one, apply on Form SS-5, Application for a Social Security Card. If you do
not have and are not eligible to obtain an SSN, you may apply for an ITIN using
Form W-7, Application for IRS Individual Taxpayer Identification Number.
If you are other than an individual (including foreign estate or trust) or you
are an individual who is an employer or who is engaged in a U.S. trade or
business as a sole proprietor, use Form SS-4, Application for Employer
Identification Number, to obtain an EIN. If you are a disregarded entity
claiming treaty benefits as a hybrid entity, enter your TIN.
You must provide a TIN if you are either:
1. A foreign trust or estate, whether or not you are claiming relief under a
tax treaty; or
2. Claiming benefits under an income tax treaty
However, a TIN is not required to be shown to claim treaty benefits on the
following items of income:
o Dividends and interest from stocks and debt obligations that are actively
traded
o Dividends from any redeemable security issued by an investment company
registered under the Investment Company Act of 1940 (mutual funds)
o Dividends, interest or royalties from units of beneficial interest in a unit
investment trust that are (or were upon issuance) publicly offered and are
registered with the SEC under the Securities Act of 1933
o Income related to loans of any of the above securities
Note: You may want to obtain and provide a TIN on Form W-8BEN even though it is
not required. A Form W-8BEN containing a TIN remains valid for as long as your
status and the information relevant to the certifications you make on the form
remain unchanged.
Line 7. If your country of residence for tax purposes has issued you a tax
identifying number, enter it here. For example, if you are a resident of Canada,
enter your Social Insurance Number.
Line 8. List all account numbers with the same withholding agent or payer unless
the withholding agent or payer requires you to submit a separate Form W-8BEN for
each account.
Part II
Definitions for Part II
Beneficial owner. For treaty purposes, a person is the beneficial owner of
income if the person is required to take the item of income into account in
computing its tax liability in its country of residence and the person is not an
agent, a custodian, a nominee or a conduit with respect to the income under U.S.
tax principles. An interest holder in a fiscally transparent entity is the
beneficial owner of the item of income received by the fiscally transparent
entity if the interest holder is required to take its share of the income
received by the entity into account in determining its tax liability and the
interest holder is not an agent, a custodian, a nominee or a conduit with
respect to the income under U.S. tax principles.
Resident. For treaty purposes, a person is a resident of a treaty country if the
person is a resident of that country under the terms of the treaty. A payment
received by an entity is treated as derived by a resident of the treaty country
only to the extent that the payment is required to be included in the gross
income of a resident of that country.
Line 9a. Enter the country where you claim to be a resident for income tax
treaty purposes.
Line 9b. If you are claiming benefits under an income tax treaty, you must have
a TIN, unless one of the exceptions listed in the instruction for Part I, Line 6
applies.
Line 9c. If you are not an individual, you must meet the requirements of any
"limitation on benefits" article in the applicable income tax treaty and you
must be the person who derives the income as a resident of a treaty country.
Line 9d. Caution: If you are claiming treaty benefits under an income tax treaty
entered into force after Dec. 31, 1986, do not use this box. Instead, use Box C.
Line 9e. Check this box if you are related to the withholding agent within the
meaning of Section 267(b) or 707(b) and the aggregate amount subject to
withholding received during the calendar year exceeds $500,000. Additionally,
you must file Form 8833, Treaty-Based Return Position Disclosure Under Section
6114 or 7701(b).
Line 10. Line 10 is to be used only if you are claiming treaty benefits that
require that you meet conditions not covered by the representations you make in
lines 9a through 9e. However, this line should always be completed by foreign
students and researchers claiming treaty benefits.
