eTrade 2000 Annual Report Download - page 36

The closing sale price of the Company’ s common stock as reported by the NASDAQ National Market on November 6, 2000 was
$14.688 per share. As of that date there were 2,118 holders of record of the Company’ s common stock.
Dividends
The Company has never declared or paid cash dividends on its capital stock. TIR (Holdings) Limited (“TIR”), which was acquired in
August 1999, and accounted for as a pooling of interests, issued 3,000,000, 8% cumulative redeemable preference shares, $1 par, in
April 1996, and paid dividends totaling $222,000 and $240,000 in fiscal 1999 and 1998, respectively. E*TRADE Financial
Corporation (“ETFC”), formerly Telebanc Financial Corporation, which was acquired in January 2000, and accounted for as a pooling
of interests, issued a special dividend in the amount of 251,948 shares of common stock in fiscal 1998. In connection with the special
dividend, ETFC recorded a $1.7 million nonrecurring, non-cash charge related to the additional preferred stock dividend payable in
common stock, which was based on the fair market value of the common stock at the time the dividend was paid. The total preferred
stock dividend recorded in fiscal 1998 was $2.1 million. The Company currently intends to retain all of its earnings, if any, for use in
its business and does not anticipate paying any cash dividends in the foreseeable future. The payment of any future dividends will be at
the discretion of the Company’ s board of directors and will depend upon a number of factors, including future earnings, the success of
the Company’ s business activities, regulatory capital requirements, the general financial condition and future prospects of the
Company, general business conditions and such other factors as the board of directors may deem relevant.
Recent Sales of Unregistered Securities
On May 5, 2000, the Company acquired Card Capture Services, Inc. (“CCS”), now E*TRADE Access, Inc. (“E*TRADE Access”)
and registered on a Form S-3 registration statement all but 251,004 shares of the Company’ s common stock issued in connection with
the acquisition. The 251,004 unregistered shares were placed in escrow for a minimum of one calendar year from the date of
acquisition, as security against any disputed claims. No underwriters were involved and there were no underwriting discounts or
commissions. The securities were issued in reliance upon the exemption from registration provided under Section 4(2) of the Securities
Act based on the fact that the common stock was sold by the issuer in a sale not involving a public offering.
On June 30, September 14, September 29 and October 25, 2000 the Company issued 169,025 shares, 168,593shares, 3,774 shares and
348,190 shares, respectively, of unregistered common stock in connection with the cashless exercises of certain warrants to purchase
shares of common stock, the obligations under which were
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assumed in connection with the Company’ s acquisition of Telebanc Financial Corporation (“Telebanc”), now E*TRADE Financial
Corporation (“ETFC”). No underwriters were involved and there were no underwriting discounts or commissions. The warrants were
originally issued in reliance upon the exemption from registration provided under Section 4(2) of the Securities Act based on the fact
that warrants were sold by the original issuer in a sale not involving a public offering.
On July 31, 2000, the Company entered into an agreement whereby the Company issued 230,447 shares of its common stock in
connection with the acquisition of Electronic Investing Corporation (“eInvesting”). The consideration for such issuance consisted of all
the issued and outstanding capital stock of eInvesting. No underwriters were involved and there were no underwriting discounts or
commissions. The securities were issued in reliance upon the exemption from registration provided under Section 4(2) of the Securities
Act based on the fact that the common stock was sold in a sale not involving a public offering. In addition, if eInvesting achieves
certain operating milestones, its shareowners will be eligible to be issued up to an additional 255,000 shares of the Company’ s
common stock.
On October 31, 2000, the Company acquired all of the issued and outstanding common stock of PrivateAccounts, Inc.
(“PrivateAccounts”). The Company issued approximately 618,000 shares of E*TRADE common stock in connection with this
acquisition. The Company expects to issue an additional 618,000 shares of E*TRADE common stock if PrivateAccounts achieves
certain milestones and up to an additional $22.0million of Company common stock and, if necessary, cash consideration if certain
asset targets are exceeded. No underwriters were involved in the transaction, and there were no underwriting discounts or
commissions. The securities were issued in reliance upon the exemption from registration provided under Section 4(2) of the Securities
Act based on the fact that the common stock was sold in a sale not involving a public offering.
On August 28, 2000, the Company issued 4,806 shares of unregistered common stock in connection with a consultant stock option
exercise, which obligation had been assumed in connection with the Company’ s acquisition of E*TRADE Access. No underwriters
were involved and there were no underwriting discounts or commissions. The securities were issued in reliance upon the exemption
from registration provided under Rule 701 of the General Regulations under the Securities Act of 1933.
2002. EDGAR Online, Inc.