SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 29, 2001
E*TRADE Group, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 1-11921 94-2844166
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(State or Other Jurisdiction (Commission (IRS Employer
of Formation) File Number) Identification Number)
4500 Bohannon Drive, Menlo Park, California 94025
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(Address of Principal Executive Offices, Including Zip Code)
Registrant's Telephone Number, Including Area Code (650) 331-6000
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N/A
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(Former Name of Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS
On August 29, 2001, E*TRADE Group, Inc. ("E*TRADE") announced that it had
signed an Agreement and Plan of Mergers, Member Interest Purchase and
Reorganization, dated as of August 29 2001, (the "Merger Agreement") among
E*TRADE, Dempsey & Company LLC, an Illinois limited liability company ("Dempsey
LLC"), the members of Dempsey LLC, their shareholders and certain wholly-owned
acquisition subsidiaries of E*TRADE. The Merger Agreement contemplates the
acquisition by E*TRADE of Dempsey LLC through the acquisition of 100% of its
member interests. The Merger Agreement is incorporated by reference herein as
Exhibit 99.1 hereto.
Dempsey LLC is a member of the NASD, the Chicago Stock Exchange, the
Cincinnati Stock Exchange and is self-clearing through its participation in
NSCC, DTC and the Institutional Delivery System. Dempsey LLC is a specialist on
the Chicago Stock Exchange and a market maker in Nasdaq and the
OVER-THE-COUNTER Bulletin Board. It also maintains electronic access to the
NYSE and other markets.
Total consideration for the acquisition will be approximately $173,500,000,
consisting of $20,000,000 in cash and approximately $153,500,000 in shares of
common stock of E*TRADE, with a maximum allotment of 30,500,000 shares.
Consummation of the acquisition contemplated by the Merger Agreement is
subject to customary conditions, including receipt of third-party consents.
On August 29, 2001, E*TRADE also announced plans to consolidate facilities
and streamline operations, part of the next phase of its ongoing
strategy to maximize operational efficiencies by leveraging synergies across
all lines of business in its global organization. E*TRADE will consolidate
certain facilities and implement plans to streamline operations during the next
several months. The move will enable E*TRADE to manage its global business more
efficiently and reduce its fixed cost structure.
E*TRADE's planned consolidation efforts will lead to a facility
restructuring and other non-recurring charge this quarter of $220-$245
million while generating an estimated recurring annual pretax benefit of
approximately $60-70 million. The charge in the current quarter is largely
non-cash. By consolidating facilities, E*TRADE will be better positioned to
capitalize on the synergies among its different business units. In addition,
these moves will lay the foundation for E*TRADE to continue its development of
one global technology platform, moving E*TRADE to a more low cost global
infrastructure.
In northern California, E*TRADE will move operations from its San
Francisco facility into existing facilities in Menlo Park and Rancho Cordova,
as well as the soon-to-be-opened E*TRADE Center in San Francisco.
E*TRADE will continue to leverage the capacity of its state-of-the-art
technology Regional Operations Center in Alpharetta, Georgia, while
consolidating other office space in Alpharetta.
E*TRADE will also facilitate greater synergy between its ATM and
banking divisions, by transitioning E*TRADE Access from Portland, Oregon to
E*TRADE Bank's Operating Center in Arlington, Virginia.
E*TRADE will also realize synergies in its European operations,
consolidating facilities in the United Kingdom and the Nordic countries.
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The statements contained in this Form 8-K that are forward-looking are
based on current expectations that are subject to a number of uncertainties and
risks, and actual results may differ materially. The uncertainties and risks
include, but are not limited to, changes in market activity, anticipated
increases in the rate of new customer acquisition, the conversion of new
visitors to the site to customers, seasonality, the development of new products
and services, the enhancement of existing products and services, competitive
pressures (including price competition), system failures, economic and
political conditions, changes in consumer behavior and the introduction of
competing products having technological and/or other advantages. Further
information about these risks and uncertainties can be found in the information
included in the annual report filed by the company with the SEC on Form 10-K
(including information under the caption "Risk Factors") and quarterly reports
on Form 10-Q.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
(a) Financial Statements - None
(b) Pro Forma Financial Information - None
(c) Exhibits
Exhibit Number Description
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99.1* Agreement and Plan of Mergers, Member Interest
Purchase and Reoganization, dated as of August
29, 2001, by and among the Registrant, Dempsey
LLC and the individuals and entities named
therein.
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* The registrant hereby undertakes to supplementally furnish a copy of omitted
schedules and exhibits to the Securities and Exchange Commission upon request.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: September 19, 2001 E*TRADE Group, Inc.
By: /s/ Leonard C. Purkis
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Name: Leonard C. Purkis
Title: Chief Financial Officer
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EXHIBITS
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Exhibit Number Description
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99.1* Agreement and Plan of Mergers, Member Interest
Purchase and Reoganization, dated as of August
29, 2001, by and among the Registrant, Dempsey
LLC and the individuals and entities named
therein.
* The registrant hereby undertakes to supplementally furnish a copy of omitted
schedules and exhibits to the Securities and Exchange Commission upon request.
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