For Clients of E*TRADE FINANCIAL Corporate Services

March 2005

Directions 2005: Register and Make Your Hotel Reservations

Don’t miss out! Join industry experts and your peers at Directions 2005, the definitive conference on stock plan design and compliance. Taking place May 1-4 in Orlando, FL, Directions will feature all the information you need to know. All in one place. All at one time.

Come hear the latest on topics such as FAS 123(R), Sarbanes-Oxley, and more. And, learn what’s new in Equity Edge 6 and what’s coming in Equity Edge 7. This is one event that you can’t afford to miss.

To register, or for more information, click here.

Don’t forget to reserve your room at the beautiful Portofino Bay Hotel at Universal Orlando^®. But hurry, these rooms are only being held until April 1.

Get Ready for FAS 123(R): Order Your Copy of Equity Edge 6 Today
As you know, the FAS 123(R) effective date is right around the corner. Equity Edge 6—scheduled for release at the end of this month—is designed to facilitate compliance with FAS 123(R) and provide additional support for companies who are granting restricted stock awards and units. For more details, read the Equity Edge 6 data sheet or access a recording of the “Equity Edge 6 and Support for FAS 123(R)” webcast.

If you are current on Equity Edge 5 maintenance, be sure to order your copy of Equity Edge 6 by filling out the web-based order form*. If you are not on Equity Edge 5 and would like to upgrade to Equity Edge 6, contact us at 1-800-783-3388 or salesinfo@etrade.com.

*May take up to 4-6 weeks for delivery.

Coming Soon: Additional Benefits for Your Employees!
We continue to look for ways to deliver value to your employees with innovative, high quality financial solutions. That’s why we are pleased to introduce the new E*TRADE Complete Investment Account. With E*TRADE Complete, your employees can continue to manage their stock plan benefits—as they would today—and gain access to the following tools:

• A complete view of all E*TRADE employee stock plan, brokerage, and bank accounts in one place, providing employees with an easy and convenient way to manage all of their finances
• Full-featured cash management tools including online checking, bill pay, and a new Intelligent Cash Optimizer tool which instantly calculates the earning potential of uninvested cash¹
• Attractive rates of up to 2.25% APY on the high-yield Money Market Account²
• Platinum Debit Card with ATM fee refunds at any ATM nationwide³
• Free Optional Digital Security ID that makes unauthorized log-on virtually impossible⁴

In the coming weeks, we will be rolling out the E*TRADE Complete Investment Account in phases to ensure a smooth transition. Employees who activate their new employee stock plan accounts after March 23, 2005 will automatically receive a new E*TRADE Complete Investment Account. Current employees with active retail brokerage accounts will receive communications—between late March and mid-May—when their account is upgraded to E*TRADE Complete.

1. The Intelligent Cash Optimizer is available to Priority E*TRADE and Power E*TRADE customers.

2. The E*TRADE Money Market Account is offered by E*TRADE Bank. Annual Percentage Yield (APY) of 2.25% as of 3/15/05 and applies to accounts with balances of $50,000 or more. Accounts with balances of $5,000 - $49,999 will earn 1.75% APY and accounts with balances of less than $5,000 will earn 0.30% APY. A $100 minimum deposit is required to open an account and you must maintain a balance of $1,000 or $5,000 in total E*TRADE Bank deposits, by the end of your second statement cycle, to avoid a $10 monthly fee on the account. This fee is waived for Power E*TRADE and Priority E*TRADE customers. Fees may reduce earnings. Yield subject to change daily.

3. We will not charge you a fee for withdrawing funds from any ATM but the owner/operator of some ATMs may. In those cases, E*TRADE will automatically refund your account for the amount of the fee by the end of the following business day. Priority E*TRADE and Power E*TRADE customers get unlimited ATM fee refunds. Other customers get up to five ATM fee refunds per month.

4. The Digital Security ID will be provided at no cost to Power E*TRADE and Priority E*TRADE customers. A $25 charge may be imposed for each additional or replacement Digital Security ID. E*TRADE FINANCIAL at its sole discretion may impose a fee for this service in the future or may discontinue the service.  

This security authentication system is based on technology from RSA Security Inc. If used properly, this security technology will not permit unauthorized access. While we continuously strive to provide the best available security technology, no guarantee can be made that new methods may not emerge to circumvent this technology.

End-to-End Restricted Stock Administration & Participant Services

In May, our enhanced restricted stock solution, including support for online deferrals, tax payment elections, and tax payments at etrade.com, will be widely available.

Your employees can now make deferral and tax payment elections at etrade.com based on parameters you define. These parameters, which you can customize by grant, include:

• Online deferral elections: enable employees to make deferrals on specific restricted stock unit grants to a future date or event, such as retirement.
• Online tax payment elections: provide employees with a convenient way to make deferrals and tax payment elections online. Choices include same-day sale, sell-to-cover, cash transfer, check/wire, payroll deduction, withhold shares, swap shares, and do not withhold tax.
• Online tax payments: ease the administrative burden of collecting taxes and alleviate cash flow concerns for both you and your employees through a same-day sale, sell-to-cover, or cash transfer.

Our enhanced restricted stock service at etrade.com is fully integrated with Equity Edge 6. Equity Edge 6 enhancements that further streamline the administration of your restricted stock plans include:

• Restricted stock unit support
• Deferral and tax payment election tracking
• Enhanced reporting
• Integration with online elections & tax payments
• Grant agreement tracking

For more information or to order the restricted stock service, please email salesinfo@etrade.com.

European Call Center
With the opening of our European call center, scheduled for April 2005, employees based in Europe can call toll-free and speak directly with licensed employee stock plan representatives fluent in French, Spanish, and English during local business hours. We support over 140 other languages using our live translation services.

Local business hours
Financial service representatives are available Monday through Friday, 10:00am to 5:00pm, GMT (except US Holidays).

Toll-free numbers
Toll-free service from the UK, France, Germany, Ireland, Israel, Belgium, Norway, Scotland, and Spain is now live and employees can access the service by dialing: 00-800-3338-7233.

Toll-free service will be added for the following countries shortly: Denmark, Italy, Netherlands, Sweden, and Switzerland. Country-specific access codes will be posted on the Contact Us page on etrade.com when available.

Employees outside of the toll-free zones can continue to receive support by calling our domestic number: 650-599-0125.

Employee Communications
To help you communicate the new changes to your employees, we have prepared an email template to describe the new call center features.

How to Contact Us
We have recently implemented a new email workflow tool to help us provide enhanced monitoring and quality assurance to our clients.  

Beginning later this month, any email sent to corporatesupport@etrade.com will receive an automated reply that assigns your inquiry a unique case number for tracking purposes. The automated reply gives you an acknowledgement that your email has been logged into our system and an answer to your query will be forthcoming. If you send a query to the automated email, please do not change the subject line or include a new inquiry within your email. The case number provided will be for your reference should you need additional details about the specific case. 

If you have any questions on this new process, please contact Corporate Support at corporatesupport@etrade.com. 

Special 2.65% APY Money Market Yield for Your Employees

At E*TRADE FINANCIAL, we are committed to bringing extraordinary financial solutions to our corporate partners and their employees. That’s why, later this month, E*TRADE Bank will be offering a special 2.65% APY for 90 days on all new E*TRADE Money Market Accounts.¹

After the introductory period is over, your employees will continue to earn yields that are among the highest in the nation. The account offers unlimited ATM withdrawals, quick cash transfers to and from any account,² and access to our award-winning online banking platform. Deposits are FDIC-insured up to $100,000.

* Annual Percentage Yields (APY) as of March 17, 2005. Rates subject to change without notice. Fees may reduce earnings.

All of your employees will be eligible for this new yield. We will publicize the offer on the Employee Stock Plans tab of etrade.com and on optionslink.com. If you would like to notify your employees (including those who are not stock plan participants) about this special opportunity, an e-mail template with full details will available beginning April 1, 2005 on the Client Service Center.

Want to know more about this special offer and other exclusive benefits for our corporate partners? Call 1-800-783-3388, or e-mail us at CSG@etrade.com.

PLEASE READ THE IMPORTANT DISCLOSURES BELOW

1. A $100 minimum deposit is required to open an E*TRADE Money Market Account and account holders must maintain a minimum average monthly balance of $1,000, or $5,000 in total E*TRADE Bank deposits, by the end of their second statement cycle to avoid a $10 monthly fee. This fee is waived for Power E*TRADE and Priority E*TRADE customers. To learn more about Power E*TRADE and Priority E*TRADE, call 1-800-E*TRADE-1 (1-800-387-2331) or visit etrade.com.

2. Transfers to and from other financial institutions submitted to E*TRADE Bank before 4 p.m. ET on a regular business day will be processed the same business day. All other such transfers will be processed the next business day. Transfers to E*TRADE Bank deposit accounts from outside financial institutions will earn interest on the day they are credited and will be available for withdrawal on the third business day from the date of credit. Transfers are limited to $25,000 per day between other financial institutions and E*TRADE Bank.

3. For example, an account opened on April 1, 2005, with $15,000 will yield 2.650% APY through June 30, 2005. For balances of $5,000–$49,999, the current yield for the non-introductory period is 1.75% APY for a 1.97% blended APY.

Banking and lending products and services are offered by E*TRADE Bank, a Federal savings bank, Member FDIC, or its subsidiaries.
Bank deposits are FDIC insured up to $100,000. Securities products and services offered by E*TRADE Securities LLC, Member NASD/ SIPC, are not insured by the FDIC, are not guaranteed deposits or obligations of E*TRADE Bank, and are subject to investment risk, including possible loss of the principal invested.

E*TRADE Securities LLC, E*TRADE Bank, and E*TRADE FINANCIAL Corporate Services are separate but affiliated companies.

© 2005 E*TRADE FINANCIAL Corp. All rights reserved.