CMGI's Directed Share Program: Frequently Asked Questions
cmgi.com
1. What is the CMGI Directed Share Program?
Under its Directed Share Program, CMGI, Inc. intends to reserve a limited number of the shares being issued in the initial public offerings of its majority-owned subsidiaries, at the offering price, for individual CMGI shareholders. Once a record date has been established and the necessary documents are available for review, CMGI will send a letter to all eligible CMGI shareholders detailing the specific terms for eligibility and participation in future offerings under this Program. CMGI anticipates that eligibility for its Directed Share Program will reflect its January 11, 2000 2-for-1 stock split. Therefore, we anticipate that in order to be eligible, individuals will have to own a minimum of 200 post-split shares of CMGI, Inc as of a to be determined record date. Currently, no record date has been selected for any future offerings under this Directed Share Program.
Upon commencement of each offering under this Directed Share Program, CMGI will send a letter detailing the specific terms for eligibility and participation in each Program to all eligible CMGI shareholders and public.
2. When will the next offering under the CMGI Directed Share Program be available?
We are prohibited from referring to any specific future offering under this Program until such information has been made public. Once a record date has been established and the necessary documents are available for review, CMGI will send a letter to all eligible CMGI shareholders detailing the specific terms for eligibility and participation in future offerings under this Program. CMGI anticipates that eligibility for its Directed Share Program will reflect its January 11, 2000 2-for-1 stock split. Therefore, we anticipate that in order to be eligible, individuals will have to own a minimum of 200 post-split shares of CMGI, Inc as of a to be determined record date. Currently, no record date has been selected for any future offerings under this Directed Share Program."
3. Who is eligible to participate in this Program?
Generally, only those shareholders who receive an invitation letter from CMGI are eligible for this Program. The specific Program parameters for each Program will be released by CMGI upon commencement of each Program.
In addition, certain individuals are not eligible to participate due to securities regulations and/or program rules:
I. Only persons located in the United States may participate.
II. Initial public offering securities may not be purchased using margin.
III. No persons under the age of 18 may purchase securities through this Program.
Current NASDR rules generally prohibit employees of broker-dealers, senior officers and securities department employees of certain other financial institutions, and persons financially supported by any of these employees or officers from participating in initial public offerings that trade at a premium in the secondary market. Wit Capital will seek to obtain specific exemptive relief from the NASDR for participants in CMGI's Directed Share Program who otherwise would be subject to this prohibition.
We anticipate that the relief would extend to all of the persons usually prohibited from participation in the offering, referenced above, with the exception of the managing underwriters for each offering, officers and directors of those managing underwriters, employees of the those managing underwriters with access to non-public information concerning the offering, Wit Capital and Wit Capital employees. We expect that those individuals and entities would continue to be prohibited from participating in the offering.
The NASD has proposed to amend its hot issue rule so that the following will be excluded:
a) Members or other broker/dealers, unless the ultimate purchase is a non-restricted person purchasing the security at the public offering price;
b) Officers, directors, general partners, employees or agents of a member or any other broker/dealer (other than a limited business broker/dealer;
c) With respect to the security being offered, finders or any person acting in a fiduciary capacity to the managing underwriter, including but not limited to, attorneys, accountants and financial consultants;
d) Any employee or other person who supervises, or whose activities directly or indirectly involve or are related to, the buying or selling of securities for a bank, savings and loan institution, insurance company, investment company, investment advisor, or collective investment account;
e) Any affiliate of a broker/dealer (other than a limited business broker/dealer); and
f) Any natural person or member of the person's immediate family who owns 10% or more or has contributed 10% or more of the capital of a broker/dealer (other than a limited broker/dealer).
We do not know if this proposal will be approved in this form or, when it will be approved, if ever. This relief we are seeking is similar to the relief achieved for the NaviSite, Inc. offering under this Program.
4. What are the steps for participating in the Program?
Generally, the steps for participating in an offering under the Directed Share Program are:
Open an individual, cash account with Wit Capital by clicking on the hyperlink below.
Watch for press releases at CMGI's web site, cmgi.com or on the CMGI Directed Share Program Web Site, affinity.witcapital.com, and an invitation letter that will be mailed to your home or the brokerage firm that holds your shares of CMGI.
After receiving CMGI's invitation letter, register your account for that offering under the Program, using the unique investor code supplied to you in the invitation letter from CMGI.
Upon availability, review the preliminary prospectus and place a Conditional Offer for shares if you are interested.
Reconfirm your Conditional Offer when asked to do so by Wit Capital.
If you are a CMGI shareholder and you think you might be interested in participating in a Directed Share Program, you may complete Step 1 now by going to affinity.witcapital.com and clicking on "Click Here to Proceed with Opening an Account".
5. When do I need to open a Wit Capital account?
The account opening deadline for each Program will be specified in CMGI's invitation letter for such offering. Current CMGI shareholders who believe they will be eligible and are interested in participating in the Directed Share Program can open an account with Wit Capital now by going to, affinity.witcapital.com and clicking on "Click Here to proceed with Opening an Account". Please note that as a Wit Capital account holder, you will be eligible to participate in any offering available through Wit Capital.
6. I'm having trouble completing the Wit Capital online account application. What should I do?
1) Go to the Web site for this Program, affinity.witcapital.com
2) Click on "Account Opening Checklist" and print this document
3) Next, click on "Click Here to Proceed with Opening an Account"
4) Refer to comprehensive, detailed checklist which will guide you through each step. It is important that you complete the application in its entirety in order to be eligible to participate in the Program.
5) You must open an individual cash account
6) Remember to record your username and password. We can not access your encrypted password and you will need it to access your account
7) Send the completed application with a check from your personal account that is signed by you, with your account number on it, for a minimum of $2,000 payable to U.S. Clearing to:
Via U.S. Postal Service:
Wit Capital Corporation
P.O. Box 724
New York, N.Y. 10276
Remember to write your account number on your check.
Via overnight deliveries only:
Wit Capital Corporation
826 Broadway, 7th Floor
New York, N.Y. 10003
Remember to write your account number on your check.
7. Why does the CMGI Directed Share Program Web site guide me only to an individual cash account?
On the Web site for the Program, you may open an individual cash account for use with the CMGI Directed Share Program or to buy or sell securities through Wit Capital. Wit Capital offers a full range of account types to its customers. You may open another type of account at our main Web site, www.witcapital.com . However, depending upon the timing for a given Directed Share Program, if you choose another account type your account may not be activated in time to participate in a specific IPO under this Program.
However, if you already have an active Wit Capital account, you can use that account to participate in the Program regardless of what type of account you have. Please keep in mind that IPOs must be purchased with cash and cannot be purchased on margin.
8. Why am I required to deposit $2,000 in advance? If I am not allocated shares or if I decide not to participate in the Program, what happens to the $2,000?
The $2,000 is the minimum equity requirement for all new accounts at Wit Capital. You may use this equity for any transactions you choose to execute through Wit Capital. Keep in mind, however, that you need to MAINTAIN an equity balance of $2,000 if you wish to be eligible to receive an allocation for any of the Offerings that Wit Capital is involved in administering. You may also request check-writing services or otherwise request funds by visiting the "Guide to Wit Capital" and "Manage My Account" sections of Wit Capital's Web site.
9. I do not have a printer. What do I do?
You must have access to a computer, a personalized e-mail address that is readily accessible to you and a printer in order to open an account at Wit Capital. Either save your application to a disc and print it off of a different computer or open the account using a different computer that is connected to a functioning printer.
10. Do I have to have access to my e-mail during the entire process?
Access to your e-mail is critical, as all of our communication with you will be conducted through e-mail. While we would like to accommodate as many individuals as possible, since Wit Capital is an Internet-based investment banking firm, you will need access to your computer throughout the Program in order to participate.
11. Please tell me more about Wit Capital.
Wit Capital has been a member of the National Association of Securities Dealers, Inc. since September 1997. Since that time, Wit Capital has acted as an underwriter, e-manager or selected dealer in over 170 public offerings. You can learn more about Wit Capital by visiting our Web site, www.witcapital.com.
12. I am not a U.S. Citizen. Am I eligible to participate in the Program?
If you are not a U.S. citizen, in order to participate in the CMGI Directed Share Program, you must meet the following requirements:
1) You must reside and have an address in the United States.
2) You must have either a Social Security Number or send us a W-8 form. You can find a W-8 form on our Web site, www.witcapital.com. Select "Manage My Account" at the top of your screen and then select "Commonly Requested Forms." Scroll down until you see "IRS Form W-8." Send this form to Wit Capital along with your application and check.
13. If I reside outside of the United States may I participate in this Program?
No. Unfortunately, the various international securities laws regarding the distribution of information related to IPOs and ultimate purchase of IPO securities prevent us from inviting individual CMGI shareholders located outside of the United States to participate in the Program. Some of the difficulties include, but are not limited to:
Prospectus Form and Delivery Restrictions
Currency Restrictions
Time Zone Differences and Practical Impact for Sending and Receiving eMail
Licensing Agreements For Conducting Securities Sales
Unique Country Requirements for Determining Suitability For IPO Purchases
There are no exceptions to this consideration.
14. If I open a Wit Capital account will I be eligible to participate in Wit Capital's other offerings?
After you open an account at Wit Capital you will have the opportunity to participate in Wit Capital's offerings on the same basis as other Wit Capital members. As a Wit Capital customer, you will receive "IPO Alert" messages for all of Wit Capital's offerings. To learn more about the use of your account outside of this Program, refer to the Wit Capital Web site, www.witcapital.com.
15. If I already have an existing Wit Capital account do I need to take any action at this time?
No, you will not need to take any action regarding this Program until a specific offering is announced. CMGI will send a letter to all eligible CMGI shareholders detailing the specific terms for eligibility and participation in future offerings under this Program at the time such offerings are properly registered, a record date has been established and the necessary documents are available for review. CMGI anticipates that eligibility for its Directed Share Program will reflect its January 11, 2000 2-for-1 stock split. Therefore, we anticipate that in order to be eligible, individuals will have to own a minimum of 200 post-split shares of CMGI, Inc as of a to be determined record date. Currently, no record date has been selected for any future offerings under this Directed Share Program.
"A Registration Statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time that the Registration Statement becomes effective. This letter shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
No offer to buy common stock can be accepted and no part of the purchase price can be received until the Registration Statement relating to the common stock has become effective under the Securities Act of 1933. Any such offer to buy may be withdrawn or revoked, without obligation or commitment of any kind, at any time prior to notice of its acceptance given after the effective date of the Registration Statement. Expressing interest in response to this letter involves no obligation or commitment on your part." |
