UNITED STATES
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) May 15, 2000
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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 incorporation) File Number) Identification No.)
4500 Bohannon Drive, Menlo Park, California 94025
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (650) 331-6000
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Not Applicable
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(Former name or former address, if changed since last report)
Item 5. Other Events
On May 15, 2000, E*TRADE Group, Inc. and Wit Capital Group, Inc., now
known as Wit SoundView Group, Inc., entered into a strategic alliance pursuant
to which Wit and its controlled affiliates have agreed to provide equity and
equity derivative securities offered to retail customers in U.S. initial public
offerings and follow-on offerings on an exclusive basis to retail customers of
E*TRADE and its broker-dealer affiliates. E*TRADE has agreed that Wit will be
its exclusive provider of securities through such offerings. The exclusivity
rights have a three year term, which can be automatically extended upon the
satisfaction of certain performance standards by Wit. Under the strategic
alliance, E*TRADE and Wit have agreed to cooperate in joint sales and marketing
efforts and to share trading, customer and research products and data. As part
of the consideration for the exclusivity rights, Wit has agreed to issue to
E*TRADE 4,025,948 shares of common stock which are subject to a three-year
prohibition on transfer, In addition, Wit has agreed to issue to E*TRADE a
warrant to purchase up to 2,000,000 shares of Wit common stock for $10.25 per
share, contingent upon maintaining the exclusivity rights for years four and
five of the strategic alliance.
In connection with the strategic alliance, E*TRADE also agreed to
purchase 2,000,000 shares of Wit common stock for $10.25 per share, and E*TRADE
Securities, Inc. agreed to acquire from Wit substantially all of the retail
brokerage accounts maintained by Wit's subsidiary, Wit Capital Corporation. Wit
granted to E*TRADE piggyback and demand registration rights with respect to the
shares of Wit common stock to be issued to E*TRADE.
The transactions contemplated by the strategic alliance are contingent
on each other and on the closing of the merger of E*OFFERING Corp. into Wit's
subsidiary, Wit SoundView Corporation, under a Merger Agreement dated May 15,
2000. Each of the agreements related to the strategic alliance terminate
immediately upon any termination of the Merger Agreement.
In connection with the merger of E*OFFERING and Wit SoundView,
E*TRADE, acting as a shareholder of E*OFFERING, agreed to vote all of the shares
of Wit common stock beneficially owned by it (i) in favor of the approval of the
merger, (ii) against any action or agreement that would delay or prevent the
merger, or result in a breach in any material respect of any covenant,
representation or warranty or other agreement of Wit under the Merger Agreement,
and (iii) against any alternative proposal or offer to acquire all or a
substantial part of the business, properties or capital stock of E*OFFERING.
E*TRADE also agreed, for a period of 18 months or, if the merger is consummated,
for a period of six years and six months after the completion of the merger, not
to (i) acquire or beneficially own an aggregate of 19.9% or more of any class of
voting securities of Wit; (ii) make, or in any way participate in, any
solicitation of proxies or become a participant in any election contest of Wit;
or (iii) acquire, or offer to acquire, all or a substantial portion of the
assets of Wit.
Certain statements in the news release announcing these transactions
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause
E*TRADE's actual results, performance or achievements, or those of the industry
in which it operates, to be materially different from any expected future
results, performance, or achievements express or implied in these forward-
looking statements. Factors that could cause or contribute to such differences
include, but are not limited to, those economic factors that affect the market
for capital raising, including initial public offerings and those discussed in
periodic reports filed from time to time by E*TRADE with the Securities and
Exchange Commission.
Item 7. Financial Statements and Exhibits
(c) Exhibits. The following document is listed as an exhibit to this
report:
99.1 Press Release dated May 15, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
E*TRADE GROUP, INC.
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(Registrant)
June 20, 2000 /s/ Theodore J. Theophilos
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Date Theodore J. Theophilos
Corporate Secretary
EXHIBIT INDEX
Exhibit Description
99.1 Press Release dated May 15, 2000.