With dozens of timely and topical sessions and access to industry-leading equity compensation experts, our Directions conference provides the valuable insights and strategic guidance stock plan professionals need now more than ever. If your job includes designing and implementing stock benefit programs, administering company stock plans, or ensuring regulatory compliance, you won’t want to miss this important event, May 2-5, 2004, at the Fairmont Hotel New Orleans.

Online registration starts November 1, at our Conference Web site. Register and book your hotel reservation by December 15, 2003, and we’ll give you a free one-day pass to the signature event of Jazz Fest, the Louisiana Heritage Fair, showcasing unforgettable music on 12 stages, delicious Louisiana cuisine, and artisans from around the world.

Look for more details about our 18th annual conference coming soon! And remember, if you’re interested in participating as a speaker or panelist, submit your Conference Speaker application by November 7.

Does Your Company Issue Dividends? Learn How We Can Help

E*TRADE FINANCIAL Corporate Services is pleased to announce the new OptionsLink Dividend Reinvestment Plan (DRIP) service. Designed to support easy online or phone enrollment, this automated service enables employees to reinvest dividends from their stock plan shares into additional shares of your company. Participating employees enroll directly at optionslink.com or by contacting an E*TRADE FINANCIAL service representative.

For more information, download the DRIP service overview. To request the OptionsLink DRIP service, please contact Corporate Support at corporatesupport@etrade.com.

Ongoing Procedures to Expedite Dividend Processing:

Regardless of whether you use the OptionsLink DRIP service, if your company pays dividends please e-mail corporate support two weeks prior to each ex-dividend date with the following information:

• Ex-dividend date
• Record date
• Dividend payable date

Providing this information helps ensure timely processing of dividend payments.

Help Your Employees Avoid 30% Backup Withholding Taxes:

The IRS mandates a 30% backup withholding tax on cash proceeds for brokerage accounts without proper tax identification on file. You can help your participants avoid this withholding on their cash dividend payments by encouraging them to activate their OptionsLink service. Because we collect and file tax information (W-9 for US employees and W-8BEN for international employees) during the OptionsLink activation process, we do not withhold taxes on activated accounts. On the other hand, participants who have not activated their accounts will not have the proper tax information on file and will be subject to the backup withholding tax.

Important Information About Trade Reversals & Trade Settlement

Reversing a trade requires E*TRADE Securities LLC to buy shares on the open market and repost these shares to the account of the customer who originally sold them. Because of the additional work—and significant risk—involved, trade reversals are only permitted under certain special conditions.

Valid conditions for reversing a trade include:

• Option exercises where the grant had expired or been canceled prior to exercise
• Option exercises where the grant had not yet vested
• Transactions where an employee sold or exercised more shares/grants than he or she was entitled to
• Transactions made during a company blackout period

The OptionsLink service is designed to prevent any of the above situations from occurring, but is dependent upon client companies following proper procedures and providing valid data. Please note that lower-than-expected profits or unanticipated tax consequences of a trade are not acceptable reasons for requesting a trade reversal.

Trade Settlement:

SEC Rule 15c 3-3 (m) specifically addresses the requirements for trade settlement:

If a broker or dealer executes a sell order of a customer (other than an order to execute a sale of securities which the seller does not own) and if for any reason whatever the broker or dealer has not obtained possession of the securities from the customer within 10 business days after the settlement date, the broker or dealer shall immediately thereafter close the transaction with the customer by purchasing securities of like kind and quantity.

Our standard service levels specify that all trades will settle within three days of the transaction date (T+3). However, extenuating circumstances such as non-delivery of shares can cause settlement delays. If shares are not delivered within 10 business days, we are required by the SEC to close the transaction. This may lead to additional costs for your company, create a tax liability for participant(s) who receive a 1099 reflecting the transaction, and result in our “freezing” impacted brokerage accounts, preventing additional purchase transactions by the participant. By delivering shares in a timely manner, you can help ensure the best service to your employees.

If you have additional questions about our trade reversal and/or settlement policies, contact our corporate support staff at corporatesupport@etrade.com.

Equity Edge Product Tip: Understanding How Footnotes Are Included on Forms 4 and 5

When a holding is automatically included on Form 4 or 5 (for example, if the holding is related to another transaction on the form or when the “Include All Holdings” checkbox is selected), Equity Edge determines which footnotes should be attached to the holding. To understand how this works, it is helpful to understand why certain information is included on the forms.

Some details, such as the transaction date and amount, explain the transaction itself. Other information, such as the security title, nature of ownership, exercisable date, expiration date, and exercise price, is included to identify the holding or security that the transaction relates to. In Equity Edge, footnotes attached to fields that describe identifying features of the security (such as the security title or the exercisable date) carry forward to future dispositions and are included every time the security appears on a form.

For example, the exercisable date is one of the identifying features of a derivative security and must be included every time the security appears on a form. It is not acceptable to just report this date for the first transaction for a security and then leave this column blank for subsequent transactions. Therefore, a footnote describing the vesting schedule of a security (instead of, or in addition to, including an exercisable date) should also appear on all subsequent forms where that security appears as a holding. In fact, if the date exercisable is left blank, the filing will be rejected if the footnote is not included.

Another example of an identifying feature is the exercise price. Suppose that, when reporting a derivative security such as convertible preferred stock, you enter $0 in the exercise price field and attach a footnote explaining that the security is subject to a conversion ratio. Because the conversion ratio is an important characteristic of that security, this footnote needs to be included every time the security appears on a form.

Equity Edge considers the following fields to be characteristics or identifying features of a security. Footnotes attached to these fields will carry forward to subsequent dispositions and will be included each time the security appears on a form as a holding.

• Security Title
• Ownership
• Underlying Title (derivatives only)
• Exercisable Date (derivatives only)
• Exercise Price (derivatives only)
• Expiration Date (derivatives only)

Equity Edge carries forward the footnote attached to the most recent transaction*. For example, assume an option grant is reported on January 20, 2003 and a footnote is attached to the exercisable date field. Then, on March 1, 2003, the insider reports an exercise of the option. When the exercise is entered in Equity Edge, a different footnote is selected for the date exercisable field. Finally, on May 1, 2003, the insider files a Form 4 to report a transaction in a different security and chooses to report all holdings, so that the option grant is included on the form as a holding. Equity Edge will include the exercisable date footnote from the exercise that occurred in March, rather than the footnote originally attached to the grant. To remove the footnote from the current and future filings, simply delete it from the most recent transactions.

Equity Edge will not carry forward footnotes that are attached to the following fields, which describe the transaction itself:

• Date
• Securities
• Sale Price
• Code

Use these fields to attach footnotes that you do not want to carry forward to future transactions.

This explanation applies only to holdings that are automatically included on Forms 4 and 5. It does not apply to holdings reported on Form 3, or to holdings that are reported delinquently on Forms 4 and 5.

*Note: In Equity Edge 4.1, footnotes that carry forward to holdings do not appear on the printed version of the form, although they are included in the XML file created for the SEC’s EDGAR system. This issue is corrected in Equity Edge 5.

Check Out Our Events Calendar and User Group Information

Come meet us in person at major industry events, or connect with your peers by getting involved with a local user group. Don’t miss these opportunities to speak with product and service experts, get a look at new and upcoming products, and provide valuable feedback on how we can enhance our offerings.

You can find an up-to-date events calendar on our Web site. We update this information periodically, so check back often. And if there's an important event you think we're missing, let us know. For the latest schedule of user group meetings or for information on joining or starting a group in your area, check out this Web page or e-mail usergroups@etrade.com.

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Education and Training Calendar

Product Training Courses:

November 13: Equity Edge Insider Reporting Basics (Web-based training)
November 17: Getting Started with Equity Edge (San Jose, CA)
November 18: Beyond the Basics with Equity Edge (San Jose, CA)
November 19: Financial Reporting with Equity Edge (San Jose, CA)
November 21: Equity Edge for Stock Purchase (Web-based training)
November 27: Getting Started with Equity Edge (Web-based training)
December 8: Getting Started with Equity Edge (San Jose, CA & Burlington, MA)
December 9: Beyond the Basics with Equity Edge (San Jose, CA & Burlington, MA)
December 10: Financial Reporting with Equity Edge (San Jose, CA & Burlington, MA)

Employee Stock Plan Administration Seminars:

October 31: Section 16 Compliance Seminar (Burlington, MA)
December 12: Section 16 Compliance Seminar (Menlo Park, CA)

For more information on education and training classes, check our Web site at corpservices.etrade.com/education.

System response times may vary due to a variety of factors, including trading volumes, market conditions and system performance.

*Reminder to always consult advisors. E*TRADE FINANCIAL Corporate Services has taken care to develop quality products and services as tools to assist companies that work effectively with their own professional legal, accounting and tax advisors to comply with the laws, regulations, and rules pertaining to equity compensation. However, there may be aspects of any company's equity compensation plan or grant arrangements, including those offered by your company, which are not addressed by our products or services. You should always consult your legal counsel, accountant, tax and other professional advisors to ensure the accuracy, timeliness, and legality or other compliance of all results produced by products or services of E*TRADE FINANCIAL Corporate Services.

E*TRADE, OptionsLink, and Equity Edge are registered trademarks of E*TRADE FINANCIAL Corp. or its subsidiaries. © 2003 E*TRADE FINANCIAL Corp. All rights reserved.