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<P align="center"><B>SCHEDULE 14A</B>
<DIV align="center">
(Rule 14a-101)
</DIV>
<P align="center">
<B>INFORMATION REQUIRED IN PROXY STATEMENT</B>
<P align="center"><B>SCHEDULE 14A INFORMATION</B>
<P align="center">
<B>Proxy Statement Pursuant to Section 14(a) of the</B>
<DIV align="center">
<B>Securities Exchange Act of 1934</B>
</DIV>
<P align="left">
Filed by the Registrant [X]
<DIV align="left">
Filed by a Party other than the
Registrant [ ]
</DIV>
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Check the appropriate box:
<P align="left">
[X] Preliminary Proxy Statement
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<TD width="97%"></TD>
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<TD>[ ]</TD>
<TD align="left">
Confidential, For Use of the Commission Only (as Permitted by
Rule 14a-6(e)(2))</TD>
</TR>
</TABLE>
<DIV align="left">
[ ] Definitive Proxy Statement
</DIV>
<DIV align="left">
[ ] Definitive Additional Materials
</DIV>
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<TR>
<TD width="3%"></TD>
<TD width="97%"></TD>
</TR>
<TR valign="top">
<TD>[ ]</TD>
<TD align="left">
Soliciting Material Pursuant to Rule 14a-11(c) or
Rule 14a-12</TD>
</TR>
</TABLE>
<P align="center"><B><FONT size="4">VarsityBooks.com Inc.</FONT></B>
<DIV align="center">
<HR size="1" width="100%" align="center">
</DIV>
<DIV align="center">
(Name of Registrant as Specified in Its Charter)
</DIV>
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<DIV align="center">
<HR size="1" width="100%" align="center">
</DIV>
<DIV align="center">
(Name of Person(s) Filing Proxy Statement if Other Than the
Registrant)
</DIV>
<P align="left">
Payment of Filing Fee (Check the appropriate box):
<P align="left">
[X] No fee required.
<DIV align="left">
[ ] Fee computed on table below per
Exchange Act Rules 14a-6(i)(1) and 0-11.
</DIV>
<P>
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<TR>
<TD width="3%"></TD>
<TD width="4%"></TD>
<TD width="93%"></TD>
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<TR valign="top">
<TD> </TD>
<TD>(1) </TD>
<TD align="left">
Title of each class of securities to which transaction applies:</TD>
</TR>
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</DIV>
<DIV align="right">
<HR size="1" width="100%" align="right">
</DIV>
<P>
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<TR>
<TD width="3%"></TD>
<TD width="4%"></TD>
<TD width="93%"></TD>
</TR>
<TR valign="top">
<TD> </TD>
<TD>(2) </TD>
<TD align="left">
Aggregate number of securities to which transaction applies:</TD>
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</DIV>
<DIV align="right">
<HR size="1" width="100%" align="right">
</DIV>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
<TD width="3%"></TD>
<TD width="4%"></TD>
<TD width="93%"></TD>
</TR>
<TR valign="top">
<TD> </TD>
<TD>(3) </TD>
<TD align="left">
Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it is
determined)</TD>
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</DIV>
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<HR size="1" width="100%" align="right">
</DIV>
<P>
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<TD width="3%"></TD>
<TD width="4%"></TD>
<TD width="93%"></TD>
</TR>
<TR valign="top">
<TD> </TD>
<TD>(4) </TD>
<TD align="left">
Proposed maximum aggregate value of transaction:</TD>
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</DIV>
<DIV align="right">
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</DIV>
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<TD width="3%"></TD>
<TD width="4%"></TD>
<TD width="93%"></TD>
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<TR valign="top">
<TD> </TD>
<TD>(5) </TD>
<TD align="left">
Total fee paid:</TD>
</TR>
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</DIV>
<DIV align="right">
<HR size="1" width="100%" align="right">
</DIV>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
<TD width="3%"></TD>
<TD width="97%"></TD>
</TR>
<TR valign="top">
<TD>[ ]</TD>
<TD align="left">
Fee paid previously with preliminary materials.</TD>
</TR>
<TR>
<TD> </TD>
</TR>
<TR valign="top">
<TD>[ ]</TD>
<TD align="left">
Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the form or
schedule and the date of its filing.</TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
<TD width="3%"></TD>
<TD width="4%"></TD>
<TD width="93%"></TD>
</TR>
<TR valign="top">
<TD> </TD>
<TD>(1) </TD>
<TD align="left">
Amount Previously Paid:</TD>
</TR>
</TABLE>
<DIV align="center">
</DIV>
<DIV align="right">
<HR size="1" width="100%" align="right">
</DIV>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
<TD width="3%"></TD>
<TD width="4%"></TD>
<TD width="93%"></TD>
</TR>
<TR valign="top">
<TD> </TD>
<TD>(2) </TD>
<TD align="left">
Form, Schedule or Registration Statement No.:</TD>
</TR>
</TABLE>
<DIV align="center">
</DIV>
<DIV align="right">
<HR size="1" width="100%" align="right">
</DIV>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
<TD width="3%"></TD>
<TD width="4%"></TD>
<TD width="93%"></TD>
</TR>
<TR valign="top">
<TD> </TD>
<TD>(3) </TD>
<TD align="left">
Filing Party:</TD>
</TR>
</TABLE>
<DIV align="center">
</DIV>
<DIV align="right">
<HR size="1" width="100%" align="right">
</DIV>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
<TD width="3%"></TD>
<TD width="4%"></TD>
<TD width="93%"></TD>
</TR>
<TR valign="top">
<TD> </TD>
<TD>(4) </TD>
<TD align="left">
Date Filed:</TD>
</TR>
</TABLE>
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</DIV>
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<P><HR noshade><P>
<DIV align="center">
[VARSITY BOOKS LOGO]
</DIV>
<P align="center"><B>VARSITYBOOKS.COM INC.</B>
<DIV align="center">
<B>2020 K Street, N.W., 6th Floor</B>
</DIV>
<DIV align="center">
<B>Washington, D.C. 20006</B>
</DIV>
<P align="center">
<HR size="1" width="30%" align="center">
<P align="center"><B>NOTICE OF SPECIAL MEETING OF STOCKHOLDERS</B>
<P align="center"><B>To be held June , 2000</B>
<P align="center">
<HR size="1" width="30%" align="center">
<P align="left">To our stockholders:
<P align="left">
Notice is hereby given that a special meeting of stockholders of
VarsityBooks.com Inc. (the “Company”) will be held at
the offices of Shaw Pittman, 1676 International Drive, McLean,
Virginia 22102 on June , 2000 at
10:00 a.m., local time:
<P>
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<TR>
<TD width="3%"></TD>
<TD width="3%"></TD>
<TD width="94%"></TD>
</TR>
<TR valign="top">
<TD> </TD>
<TD>1. </TD>
<TD align="left">
to vote on a proposal to amend the Certificate of Incorporation
of the Company, as amended, to change the Company’s name
from “VarsityBooks.com Inc.” to “Varsity Group
Inc.” and</TD>
</TR>
<TR>
<TD> </TD>
</TR>
<TR valign="top">
<TD> </TD>
<TD>2. </TD>
<TD align="left">
to transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.</TD>
</TR>
</TABLE>
<P align="left">
Only stockholders of record at the close of business on
May 18, 2000 will be entitled to notice of, and to vote at,
the special meeting or any adjournment or postponement thereof. A
list of such stockholders will be open for examination by any
stockholder for any purpose germane to the special meeting at the
special meeting and during normal business hours, for ten days
prior to the special meeting, at the offices of the Company, 2020
K Street, N.W., 6th Floor, Washington, D.C. 20006.
<P>
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<TR>
<TD width="38%"></TD>
<TD width="62%"></TD>
</TR>
<TR valign="top">
<TD> </TD>
<TD align="left">
By Order of the Board of Directors,</TD>
</TR>
<TR>
<TD> </TD>
</TR>
<TR valign="top">
<TD> </TD>
<TD align="left">
/s/JACK LEWIS</TD>
</TR>
<TR valign="top">
<TD> </TD>
<TD align="left">
Jack Lewis</TD>
</TR>
<TR valign="top">
<TD> </TD>
<TD align="left">
Secretary</TD>
</TR>
</TABLE>
<P align="left">
Dated:
<P align="left">
<B>YOUR VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU EXPECT TO
ATTEND THE MEETING, PLEASE SIGN AND DATE THE ENCLOSED PROXY AND
MAIL IT PROMPTLY IN THE POSTAGE-PAID ENVELOPE PROVIDED.</B>
<P align="center">
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<P><HR noshade><P>
<P align="right"><B>Appendix A</B>
<P align="center"><B>VARSITYBOOKS.COM INC.</B>
<DIV align="center">
<B>2020 K Street, N.W., 6th Floor</B>
</DIV>
<DIV align="center">
<B>Washington, D.C. 20006</B>
</DIV>
<P align="center">
<HR size="1" width="30%" align="center">
<P align="center"><B>Special Meeting of Stockholders</B>
<DIV align="center">
<B>June , 2000</B>
</DIV>
<P align="center">
<HR size="1" width="30%" align="center">
<P align="center"><B>PROXY STATEMENT</B>
<P align="center">
<HR size="1" width="30%" align="center">
<P align="center"><B>GENERAL INFORMATION</B>
<P align="left"><B>Proxy Solicitation</B>
<P align="left">
This proxy statement is furnished in connection with the
solicitation of proxies by our Board of Directors for use at a
special meeting of stockholders to be held at the offices of Shaw
Pittman, 1676 International Drive, McLean, Virginia on
June , 2000 at 10:00 a.m., local time. The
purpose of the special meeting and the matters to be acted upon
are set forth in the accompanying notice of special meeting.
<P align="left">
We are mailing this proxy statement and the enclosed proxy to
stockholders entitled to vote at the special meeting.
<P align="left">
We will pay the cost of the proxy solicitation. In addition to
the solicitation of proxies by use of the mails, our officers and
other employees may solicit proxies by personal interview,
telephone, facsimile and telegram. If any of these individuals
are asked to perform these services, they will not receive
compensation and the services will be performed in addition to
their regular duties. We have also made arrangements with
brokerage firms, banks, nominees and other fiduciaries to forward
proxy solicitation material for shares held of record by them to
the beneficial owners of the shares. We will reimburse any of
these entities or people for their reasonable out-of-pocket
expenses in forwarding the proxy solicitation materials.
<P align="left">
This proxy statement and the enclosed proxy are first being
mailed to our stockholders on or about June ,
2000.
<P align="left"><B>Voting and Revocability of Proxies</B>
<P align="left">
A proxy for use at the special meeting and a return envelope are
enclosed. Any shares of our common stock, par value $0.0001 per
share (the “common stock”) which are represented by a
properly executed proxy that is received in time and not revoked
will be voted at the special meeting in accordance with the
instructions indicated in the proxy. If no instructions are
indicated, the shares will be voted “FOR” the amendment
of the Company’s Certificate of Incorporation, as
previously amended, to change the Company’s name to
“Varsity Group Inc.”. Discretionary authority is
provided in the proxy as to any matters not specifically referred
to therein. Neither our board nor our managers and officers are
aware of any other matters that are likely to be brought before
the special meeting. If any other matters properly come before
the special meeting, however, the persons named in the proxy are
fully authorized to vote on the matters in accordance with their
judgment and discretion.
<P align="left">
A stockholder who has given a proxy may revoke it at any time
prior to its exercise at the special meeting by (1) giving
written notice of revocation to our Corporate Secretary,
(2) properly submitting to us a duly executed proxy bearing
a later date or (3) voting in person at the special meeting.
All written notices of revocation or other communications with
respect to revocation of proxies should be addressed to our
Corporate Secretary at our principal executive offices as
follows: VarsityBooks.com Inc., 2020 K Street, N.W.,
6th Floor, Washington, D.C. 20006, Attention: Corporate
Secretary.
<P align="center">
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<P><HR noshade><P>
<P align="left"><B>Voting Procedure</B>
<P align="left">
All holders of record of our common stock at the close of
business on May 18, 2000 will be eligible to vote at the special
meeting. Each common stockholder is entitled to one vote at the
special meeting for each share they hold. As of May 18,
2000, there were 15,703,392 shares of common stock outstanding.
<P align="left">
The presence, in person or by proxy, of a majority of the
outstanding shares of common stock entitled to vote will
constitute a quorum for the transaction of business. Votes cast
in person or by proxy, abstentions and broker non-votes (as
defined below) will be tabulated by the inspectors of election
and will be considered in the determination of whether a quorum
is present at the special meeting. The inspectors of election
will treat shares represented by executed proxies that abstain as
shares that are present and entitled to vote for purposes of
determining the approval of such matter. If, with respect to any
shares, a broker or other nominee submits a proxy indicating that
instructions have not been received from the beneficial owners
or the persons entitled to vote and that the broker or other
nominee does not have discretionary authority to vote the shares
(a “broker non-vote”) on one or more proposals, those
shares will not be treated as present and entitled to vote for
purposes of determining the approval of any proposal.
<P align="center"><B>SECURITY OWNERSHIP</B>
<P align="left"><B>Security Ownership of Directors, Executive Officers and
Principal Stockholders</B>
<P align="center"><B>PRINCIPAL STOCKHOLDERS</B>
<P align="left">
The following table sets forth information regarding beneficial
ownership of our common stock as of May 18, 2000, by:
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
<TD width="3%"></TD>
<TD width="1%"></TD>
<TD width="96%"></TD>
</TR>
<TR valign="top">
<TD> </TD>
<TD>• </TD>
<TD align="left">
each person, or group of affiliated persons, who we know
beneficially owns more than five percent in the aggregate of the
outstanding shares of our common stock;</TD>
</TR>
<TR>
<TD> </TD>
</TR>
<TR valign="top">
<TD> </TD>
<TD>• </TD>
<TD align="left">
each of our executive officers named in the Summary Compensation
Table;</TD>
</TR>
<TR>
<TD> </TD>
</TR>
<TR valign="top">
<TD> </TD>
<TD>• </TD>
<TD align="left">
each of our directors;</TD>
</TR>
<TR>
<TD> </TD>
</TR>
<TR valign="top">
<TD> </TD>
<TD>• </TD>
<TD align="left">
each director nominee; and</TD>
</TR>
<TR>
<TD> </TD>
</TR>
<TR valign="top">
<TD> </TD>
<TD>• </TD>
<TD align="left">
all directors and executive officers as a group.</TD>
</TR>
</TABLE>
<P align="left">
Under the rules of the Securities and Exchange Commission,
beneficial ownership includes voting or investment power with
respect to securities and includes the shares issuable under
stock options or warrants that are exercisable within
60 days of May 18, 2000. Shares issuable under stock
options or warrants are deemed outstanding for computing the
percentage of the person holding options but are not outstanding
for computing the percentage of any other person. The percentage
of beneficial ownership for the following table is based upon
15,703,392 shares of common stock outstanding as of May 18,
2000.
<P align="center">2
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<P><HR noshade><P>
<P align="left">
Unless otherwise indicated, the address for each listed
stockholder is: c/o VarsityBooks.com Inc., 2020 K Street, N.W.,
6th Floor, Washington, D.C. 20006. To our knowledge, except as
indicated in the footnotes to this table and pursuant to
applicable community property laws, the persons named in the
table have sole voting power and investment power with respect to
all shares of common stock.
<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">
<TR>
<TD width="70%"> </TD>
<TD width="3%"> </TD>
<TD width="6%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
<TD width="3%"> </TD>
<TD width="6%"> </TD>
<TD width="1%"> </TD>
<TD width="5%"> </TD>
</TR>
<TR>
<TD></TD>
<TD></TD>
<TD colspan="7"></TD>
</TR>
<TR>
<TD></TD>
<TD></TD>
<TD align="center" nowrap colspan="7"><FONT size="2"><B>Shares of Common Stock</B></FONT></TD>
</TR>
<TR>
<TD></TD>
<TD></TD>
<TD align="center" nowrap colspan="7"><FONT size="2"><B>Beneficially Owned</B></FONT></TD>
</TR>
<TR>
<TD align="center" nowrap><FONT size="2"><B>Name of</B></FONT></TD>
<TD></TD>
<TD align="center" nowrap colspan="7"><HR size="1"></TD>
</TR>
<TR>
<TD align="center" nowrap><FONT size="2"><B>Beneficial Owner</B></FONT></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>Number</B></FONT></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><FONT size="2"><B>Percentage</B></FONT></TD>
</TR>
<TR>
<TD align="center" nowrap><HR size="1"></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><HR size="1"></TD>
<TD></TD>
<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>
<TR>
<TD align="left" valign="top"><FONT size="2">
Mayfield Fund (1)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">2,342,894</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">14.9</FONT></TD>
<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR>
<TD align="left" valign="top"><FONT size="2">
The Carlyle Group (2)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">2,108,070</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">13.4</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR>
<TD align="left" valign="top"><FONT size="2">
Tribune Ventures (3)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">1,488,095</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">9.5</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR>
<TD align="left" valign="top"><FONT size="2">
Eric J. Kuhn (4)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">1,085,049</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">6.9</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR>
<TD align="left" valign="top"><FONT size="2">
FBR Technology Venture Partners L.P. (5)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">992,063</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">6.3</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR>
<TD align="left" valign="top"><FONT size="2">
Richard Hozik (6)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">57,748</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR>
<TD align="left" valign="top"><FONT size="2">
Allen L. Morgan (7)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">2,350,334</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">15.0</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR>
<TD align="left" valign="top"><FONT size="2">
Andrew J. Oleszczuk (8)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">1,488,095</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">9.5</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR>
<TD align="left" valign="top"><FONT size="2">
Gene Riechers (9)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">992,063</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">6.3</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR>
<TD align="left" valign="top"><FONT size="2">
James S. Ulsamer</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">—</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">—</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR>
<TD align="left" valign="top"><FONT size="2">
Jonathan N. Grayer</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">90,000</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR>
<TD align="left" valign="top"><FONT size="2">
Timothy J. Levy (10)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">984,741</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">6.3</FONT></TD>
<TD></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR>
<TD align="left" valign="top"><FONT size="2">
Directors and executive officers as a group (7 persons)</FONT></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">6,063,289</FONT></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD align="right" valign="bottom" nowrap><FONT size="2">38.3</FONT></TD>
<TD></TD>
</TR>
</TABLE>
</CENTER>
<DIV align="left">
<HR size="1" width="18%" align="left">
</DIV>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
<TD width="4%"></TD>
<TD width="96%"></TD>
</TR>
<TR valign="top">
<TD>*</TD>
<TD align="left">
Represents less than 1% of the outstanding shares of common
stock.</TD>
</TR>
<TR>
<TD> </TD>
</TR>
<TR valign="top">
<TD>(1) </TD>
<TD align="left">
Includes 1,992,489 shares held by Mayfield IX, 104,868
shares held by Mayfield Associates Fund IV and 245,537
shares held by the Varsity Books Trust, a revocable trust.
Mayfield IX Management LLC is the general partner of
Mayfield IX and Mayfield Associates Fund IV both of
which are Delaware limited partnerships. Mr. Morgan, one of
our directors, is a nonmanaging member on Mayfield IX
Management LLC. He has no management authority with respect to
Mayfield IX Management and disclaims beneficial ownership of
our shares held directly by Mayfield IX Management,
Mayfield IX, and Mayfield Association Fund IV except
to the extent of any pecuniary interest therein. Mayfield Fund,
L.P.’s address is 2800 Sand Hill Road, Menlo Park,
California 94025.</TD>
</TR>
<TR>
<TD> </TD>
</TR>
<TR valign="top">
<TD>(2) </TD>
<TD align="left">
The Carlyle Group includes 745,483 shares held by Carlyle Venture
Partners, L.P., 155,625 shares held by C/S Venture Investors,
L.P., 116,092 shares held by Carlyle Venture Coinvestment L.L.C.
and 98,870 shares held by Carlyle U.S. Venture Partners, L.P., as
well as 712,836 shares currently outstanding and 279,164 shares
issuable upon exercise of outstanding warrants, all of which are
exercisable within the next 60 days at a weighted average
exercise price of $1.48 per share held by B&T ENTERPRISES,
L.L.C., a limited liability company. TC Group, L.L.C., an
affiliate of The Carlyle Group, is the manager of B&T
ENTERPRISES, L.L.C. and has sole control over the voting and
disposition of the shares held by B&T ENTERPRISES, L.L.C. TC
Group, L.L.C. disclaims beneficial ownership of any of the shares
held by B&T ENTERPRISES, L.L.C. TCG Ventures, Ltd., an
affiliate of The Carlyle Group, is the general partner of both
Carlyle Venture Partners, L.P. and C/S Venture Investors, L.P.
TCG Ventures, L.L.C., an affiliate of The Carlyle Group, is the
general partner of both Carlyle Venture Coinvestment L.L.C. and
Carlyle U.S. Venture Partners, L.P. The Carlyle Group’s
address is 1001 Pennsylvania Avenue, N.W., Suite 220 South,
Washington, D.C. 20004.</TD>
</TR>
<TR>
<TD> </TD>
</TR>
<TR valign="top">
<TD>(3) </TD>
<TD align="left">
Tribune Ventures is a division of Tribune Company and is located
at 435 North Michigan Avenue, Chicago, Illinois 60611.</TD>
</TR>
<TR>
<TD> </TD>
</TR>
<TR valign="top">
<TD>(4) </TD>
<TD align="left">
Includes 999,616 shares currently outstanding and 85,433 shares
subject to options exercisable within the next 60 days.</TD>
</TR>
<TR>
<TD> </TD>
</TR>
<TR valign="top">
<TD>(5) </TD>
<TD align="left">
The address for FBR Technology Venture Partners L.P. is Potomac
Tower, 1001 19th Street North, Arlington, Virginia 22209.</TD>
</TR>
</TABLE>
<P align="center">3
<!-- PAGEBREAK -->
<P><HR noshade><P>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
<TD width="4%"></TD>
<TD width="96%"></TD>
</TR>
<TR valign="top">
<TD>(6) </TD>
<TD align="left">
Includes 17,881 shares currently outstanding and 39,867 issuable
upon exercise of options held by Mr. Hozik that are
exercisable within the next 60 days.</TD>
</TR>
<TR>
<TD> </TD>
</TR>
<TR valign="top">
<TD>(7) </TD>
<TD align="left">
Includes 1,992,489 shares held by Mayfield IX, 104,868
shares held by Mayfield Associates Fund IV, 245,537 shares held
by the Varsity Book Trust and 7,440 shares held directly by
Mr. Morgan. Except for those shares held by Mr.
Morgan, Mr. Morgan disclaims beneficial ownership of all
other shares except to the extent of any pecuniary interest
therein.</TD>
</TR>
<TR>
<TD> </TD>
</TR>
<TR valign="top">
<TD>(8) </TD>
<TD align="left">
Includes 1,488,095 shares beneficially owned by Tribune Ventures,
a division of Tribune Company. Mr. Oleszczuk is President
of Tribune Ventures, and, as such may be deemed to have voting
and investment power over such shares. Mr. Oleszczuk
disclaims beneficial ownership of these shares.</TD>
</TR>
<TR>
<TD> </TD>
</TR>
<TR valign="top">
<TD>(9) </TD>
<TD align="left">
Includes 992,063 shares beneficially owned by FBR Technology
Venture Partners L.P. Mr. Riechers is a partner of FBR
Technology Venture Partners L.P. and, as such, may be deemed to
have voting and investment power over such shares.
Mr. Riechers disclaims beneficial ownership of these shares
except to the extent of any pecuniary interest therein.</TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
<TD width="5%"></TD>
<TD width="95%"></TD>
</TR>
<TR valign="top">
<TD>(10) </TD>
<TD align="left">
Includes 984,741 shares currently outstanding.</TD>
</TR>
</TABLE>
<P align="center">4
<!-- PAGEBREAK -->
<P><HR noshade><P>
<P align="center"><B>PROPOSAL NO. 1</B>
<P align="center">
<B>AMENDMENTS TO THE CERTIFICATE OF INCORPORATION</B>
<P align="left">
At the Special Meeting, the Company’s stockholders are being
asked to approve an amendment to the Company’s Certificate
of Incorporation that would change the Company’s name from
“VarsityBooks.com Inc.” to “Varsity Group
Inc.”.
<P align="left">
If this amendment is approved by a majority of our stockholders,
we will change our corporate name from VarsityBooks.com Inc. to
Varsity Group Inc. However, we will continue to maintain the
brand and property currently residing in VarsityBooks.com Inc. as
a wholly-owned subsidiary of Varsity Group Inc. We are making
this change for three main reasons: (1) VarsityBooks.com
Inc. is too limiting; (2) Varsity Group Inc. better reflects
the marketing aspects of our business; and (3) Varsity
Group Inc. is a flexible name.
<P align="left">
First, our business strategy is no longer described accurately by
a name that includes the word “books” in it. Our
business is broader than selling textbooks to students and, as
such, must be reflected properly in our name.
<P align="left">
In addition, the proposed name of Varsity Group Inc. better
reflects our rapid growth as a leading college marketing company.
While the name “VarsityBooks.com Inc.” accurately
describes one aspect of our business, it no longer serves as a
full depiction of our overall business.
<P align="left">
Finally, Varsity Group Inc. is a name that provides greater
flexibility, allowing us to choose in the future from a broad
range of products and services to provide to the college market.
It is a more sustainable name as we continue to add properties to
our existing ones, including College Impact (which houses our
network of student representatives) and VarsityBooks.com (which
houses our retail on-line properties).
<P align="left">
The foregoing amendment of the Certificate of Incorporation
requires the affirmative vote of the holders of a majority of the
shares of our Common Stock present at the Special Meeting in
person or by proxy and entitled to vote.
<P align="left">
<B>OUR BOARD RECOMMENDS A VOTE FOR THE AMENDMENT OF THE
CERTIFICATE OF INCORPORATION TO CHANGE THE COMPANY’S NAME TO
“VARSITY GROUP INC.,” AS DESCRIBED ABOVE.</B>
<P align="center">
<HR size="1" width="30%" align="center">
<P align="left">
<B>STOCKHOLDERS ARE REMINDED TO SIGN AND DATE THE ENCLOSED PROXY
AND MAIL IT PROMPTLY IN THE POSTAGE-PAID ENVELOPE PROVIDED.</B>
<P align="center">5
<!-- PAGEBREAK -->
<P><HR noshade><P>
<P align="center">VARSITYBOOKS.COM INC.
<P align="center">THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR<BR>
THE SPECIAL MEETING OF STOCKHOLDERS TO BE HELD JUNE __, 2000.
<P>The undersigned hereby appoints Eric Kuhn, Richard Hozik, and each of them,
attorneys and proxies, with power of substitution and revocation, to vote, as
designated below, all shares of Common Stock that the undersigned is entitled to
vote, with all powers that the undersigned would possess if personally present
at the Special Meeting (including all adjournments thereof) of Stockholders of
VarsityBooks.com Inc. to be held on June __, 2000, at the offices of Shaw
Pittman, 1676 International Drive, McLean, Virginia 22102 on June __, 2000 at
10:00 a.m., local time.
<P>EVERY PROPERLY SIGNED PROXY WILL BE VOTED IN THE MANNER SPECIFIED HEREON. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE AMENDMENT TO THE CERTIFICATE
OF INCORPORATION DESCRIBED ON THE REVERSE SIDE.
<P align="center">PLEASE VOTE, DATE, AND SIGN ON THE OTHER SIDE AND<BR>
RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
<P align="center">(CONTINUED AND TO BE DATED AND SIGNED ON REVERSE SIDE.)
<P align="center">THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL.
<P align="right">—<BR>
SEE REVERSE<BR>
SIDE<BR>
—
<!-- PAGEBREAK -->
<P><HR noshade><P>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="90%" align="center">
<TR valign="bottom">
<TD width="6%"> </TD>
<TD width="34%"> </TD>
<TD width="60%"> </TD>
</TR>
<TR>
<TD align=left valign=top>[X]</TD>
<TD nowrap VALIGN=TOP align="LEFT"><FONT size="2">PLEASE MARK YOUR<BR>
VOTES AS IN THIS<BR>
EXAMPLE</FONT></TD>
</TR>
<TR><TD> </TD></TR>
<TR>
<TD ALIGN="LEFT" colspan="3"><FONT size="2">
PROPOSAL 1: AN AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION TO CHANGE THE NAME OF THE COMPANY TO VARSITY GROUP INC</FONT></TD>
</TR>
<TR><TD> </TD></TR>
<TR valign="bottom">
<TD></TD>
<TD ALIGN=LEFT colspan="4"><FONT size="2">FOR AGAINST ABSTAIN</FONT></TD>
</TR>
<TR valign="bottom">
<TD></TD>
<TD colspan="4" ALIGN=LEFT><FONT size="2"> [ ] [ ]
[ ]</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD align=center><FONT size="2">IN THEIR DISCRETION, THE PROXIES ARE</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD align=center><FONT size="2">AUTHORIZED TO VOTE UPON SUCH OTHER</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD align=center><FONT size="2">BUSINESS AS MAY PROPERLY COME BEFORE</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD align=center><FONT size="2">THE MEETING</FONT></TD>
</TR>
<TR><TD> </TD></TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD align=center><FONT size="2">CHANGE OF ADDRESS AND/OR COMMENTS MARK HERE [ ]</FONT></TD>
</TR>
<TR><TD> </TD></TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD align=center><FONT size="2">PLEASE MARK, SIGN, DATE AND</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD align=center><FONT size="2">RETURN THE PROXY CARD PROMPTLY</FONT></TD>
</TR>
<TR><TD><TR><TD><TR><TD><TR><TD>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD align=center><FONT size="2">USING THE ENCLOSED ENVELOPE</FONT></TD>
</TR>
<TR><TD> </TD></TR>
<TR valign="bottom">
<TD></TD>
<TD></TD>
<TD align=center><FONT size="2">VOTES MUST BE INDICATED (X) IN BLACK OR BLUE INK</FONT></TD>
</TR>
<TR><TD> </TD></TR>
<TR valign="bottom">
<TD align=left colspan="3"><FONT size="2">SIGNATURE:______________________________________ DATE:_______________</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>NOTED: Please sign as name appears hereon. Joint owners EACH must sign. When signing as attorney, trustee, executor, administrator
or guardian, please give your FULL title. If a corporation, please provide the full name of the corporation and the signature
of the authorized officer signing on its behalf. If a partnership, please sign in partnership name by an authorized person.
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