<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[X] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).
[ ] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-12
Quotesmith.com, Inc.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) 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 was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] 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.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
QUOTESMITH.COM,INC.
8205 South Cass Avenue
Darien, Illinois 60561
February ___, 2001
Dear Stockholder of Quotesmith.com, Inc.:
You are invited to attend a special meeting of the stockholders (the
"Meeting") of Quotesmith.com, Inc., a Delaware corporation (the "Company"), to
be held on Thursday, March 5, 2001, beginning at 9:00 a.m. local time, at the
Company's corporate offices at 8205 South Cass Avenue, Darien, Illinois, 60561.
At the Meeting, you will be asked to approve an amendment to the Company's
Restated Certificate of Incorporation to effect a reverse stock split of the
Company's outstanding Common Stock, whereby the Company will issue one new share
of Common Stock in exchange for six shares of the outstanding Common Stock.
The Company's Board of Directors believes that the reverse stock split
proposal is advisable and in the best interest of the Company and its
stockholders and recommends that the stockholders vote FOR the proposal.
As described in the attached Proxy Statement, certain of the Company's
stockholders, holding approximately 52.4% of the outstanding shares, have
expressed their intention to vote in favor of the proposal. If such sharehoders
vote accordingly, the proposal will be adopted.
The enclosed Notice and Proxy Statement contain details concerning the
reverse stock split proposal. We urge you to read and consider these documents
carefully. Whether or not you plan to be at the Meeting, please be sure to sign,
date and return the enclosed proxy card in the enclosed envelope as promptly as
possible so that your shares may be represented at the Meeting and voted in
accordance with your wishes.
Sincerely,
David I. Vickers
Senior Vice President, Chief Financial
Officer and Secretary
<PAGE> 3
QUOTESMITH.COM, INC.
8205 South Cass Avenue
Darien, Illinois 60561
Notice of Special Meeting of Stockholders
TO BE HELD MARCH 5, 2001
To the Stockholders of QUOTESMITH.COM, INC.:
Notice is hereby given that a Special Meeting of Stockholders (the
"Meeting") of Quotesmith.com, Inc., a Delaware corporation (the "Company"), will
be held on Thursday, March 5, 2001, beginning at 9:00 a.m. local time, at the
Company's corporate offices at 8205 South Cass Avenue, Darien, Illinois, 60561
to consider and act upon the following proposal:
To approve an amendment to the Company's Restated Certificate of
Incorporation to effect a reverse stock split of the Company's outstanding
Common Stock, whereby the Company will issue one new share of Common Stock
in exchange for six shares of the outstanding Common Stock.
The Board of Directors has fixed the close of business on January 25, 2001
as the record date for determining the stockholders entitled to notice of and to
vote at the Meeting. The reverse stock split proposal is more fully described in
the accompanying Proxy Statement, which forms a part of this Notice and should
be read carefully by all stockholders.
By Order of the Board of Directors,
David I. Vickers
Senior Vice President, Chief Financial
Officer and Secretary
February ___, 2001
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE DATE, SIGN AND MAIL THE
ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED (WHICH REQUIRES NO POSTAGE FOR
MAILING IN THE UNITED STATES). A PROMPT RESPONSE IS HELPFUL AND YOUR COOPERATION
WILL BE APPRECIATED.
<PAGE> 4
QUOTESMITH.COM, INC.
8205 South Cass Avenue
Darien, Illinois 60561
----------------
PROXY STATEMENT
FOR
SPECIAL MEETING OF STOCKHOLDERS TO BE HELD MARCH 5, 2001
----------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Quotesmith.com, Inc., a Delaware
corporation (the "Company"), for use at the Special Meeting of Stockholders
scheduled for March 5, 2001 (the "Meeting"), beginning at 9:00 a.m. local time,
at the Company's corporate offices at 8205 South Cass Avenue, Darien, Illinois,
to consider and act upon the following proposal:
To approve an amendment to the Company's Restated Certificate of
Incorporation to effect a reverse stock split of the Company's outstanding
Common Stock, whereby the Company will issue one new share of Common Stock in
exchange for six shares of the outstanding Common Stock.
If the form of Proxy which accompanies this Proxy Statement is executed and
returned, it will be voted. A Proxy may be revoked at any time prior to the
voting thereof by written notice to the Secretary of the Company.
A majority of the outstanding shares entitled to vote at the Meeting and
represented in person or by proxy will constitute a quorum. Approval of the
reverse stock split proposal requires the affirmative vote of a majority of the
shares entitled to vote thereon. Abstentions and proxies relating to "street
name" shares for which brokers have not received voting instructions from the
beneficial owner ("Broker Non-Votes") will be counted to determine whether a
quorum is present. Both abstentions and Broker Non-Votes will be counted as part
of the total number of votes cast on the reverse stock split proposal in
determining whether the proposal has been approved by the stockholders. Thus,
both abstentions and Broker Non-Votes will have the effect of votes "against"
the proposal.
As described herein, certain of the Company's stockholders ( including its
cofounders Robert S. Bland and William V. Thoms) have expressed their intention
to vote their shares in favor of the proposal. These stockholders own
approximately 52.4% of the outstanding shares. If such shareholders vote their
shares consistent with this expressed intention, the proposal will be adopted.
Expenses incurred in the solicitation of proxies will be borne by the
Company.
As of January 25, 2001, the Company had outstanding 17,750,711 shares of
Common Stock and such shares are the only shares entitled to vote at the
Meeting. Each share is entitled to one vote on each matter to be voted upon at
the Meeting.
This Proxy Statement and the accompanying proxy card are first being mailed
to the Company's stockholders on or about February ___, 2001.
SECURITIES BENEFICIALLY OWNED BY PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth information with respect to beneficial
ownership of our common stock as of January 25, 2001:
each stockholder that is known to us to beneficially own more than 5%
of our common stock;
each of our directors;
our chief executive officer and each of the executive officers named
in the summary compensation table appearing in our 2000 proxy
statement (the "Named Executive Officers")
all of our executive officers and directors as a group.
Unless otherwise indicated, the mailing address for each of the named
individuals is c/o Quotesmith.com, Inc., 8205 South Cass Avenue, Suite 102,
Darien, Illinois 60561.
<PAGE> 5
Applicable percentage ownership in the table is based upon 17,750,711 shares
of common stock outstanding as of January 25, 2001. Beneficial ownership is
determined in accordance with the rules of the SEC. Shares of common stock
subject to options presently exercisable or exercisable within 60 days as of the
date hereof are deemed to be outstanding for the purpose of computing the
percentage ownership of the person or entity holding options, but are not
treated as outstanding for the purpose of computing the percentage ownership for
any other person or entity.
Shares Beneficially Owned
-------------------------
Number Percent
------ -------
Our CEO, Named Executive Officers and Directors
Robert S. Bland(1)................................ 7,139,334 40.2%
William V. Thoms (2).............................. 2,161,500 12.2
David I. Vickers (3).............................. 90,000 *
Burke A. Christensen (4).......................... 83,676 *
Timothy F. Shannon(5)............................. 43,333 *
Bruce J. Rueben(5)................................ 29,000 *
Admiral Jeremiah A. Denton, Jr. (5)............... 27,000 *
Richard F. Gretsch (5)............................ 25,000 *
John McCartney (5)................................ 40,000 *
All executive officers and directors as a
group (10 persons)(6).............................. 9,638,843 53.6
Other Five Percent Stockholders
Wellington Management Company, LLP (7)............ 1,863,300 10.5
Intuit Ventures, Inc.(8).......................... 1,272,727 7.2
* Less than 1%.
(1) Includes 3,482,167 shares owned by Mr. Bland as a tenant in common with
his wife, Maureen A. Bland, and 3,657,167 shares owned by Southcote
Partners, L.P., a limited partnership whose sole general partners are
Mr. and Mrs. Bland.
(2) Shares held jointly with his wife.
(3) Includes options to purchase 30,000 shares.
(4) Includes options to purchase 75,000 shares.
(5) Includes options to purchase 25,000 shares.
(6) Includes options to purchase 230,000 shares.
(7) Number of shares is based on information set forth in schedule 13G/A,
filed with the SEC as of [ ] , 2001. Intuit's address is 2535
Garcia Avenue, Mountain View, California 94043.
(8) Number of shares is based on information set forth in schedule 13G/A,
filed with the SEC as of [ ], 2001. Wellington's address is 75
State Street, Boston, Massachusetts 02109.
REVERSE STOCK SPLIT PROPOSAL
The Board of Directors of the Company has unanimously approved a proposal to
amend the Company's Restated Certificate of Incorporation (the "Certificate of
Incorporation") to effect a reverse stock split of the Company's outstanding
Common Stock on the terms described herein (the "Reverse Stock Split"). The
Board of Directors has declared the amendment to the Certificate of
Incorporation to be advisable and has recommended that the amendment be
presented to the stockholders of the Company for approval.
Except for adjustments that may result from the treatment of fractional
shares as described below, each stockholder will hold the same percentage of
Common Stock outstanding immediately following the Reverse Stock Split as such
stockholder held immediately prior to the Reverse Stock Split. If approved by
the stockholders of the Company as
<PAGE> 6
provided herein, the Reverse Stock Split will be effected by an amendment to the
Certificate of Incorporation in substantially the form attached to this Proxy
Statement as Appendix A (the "Reverse Stock Split Amendment") and will become
effective upon the filing of the Reverse Stock Split Amendment with the
Secretary of State of Delaware (the "Effective Date"). The following discussion
is qualified in its entirety by the full text of the Reverse Stock Split
Amendment, which is hereby incorporated by reference herein.
On the Effective Date, the Reverse Stock Split will result in the automatic
conversion of six shares (as determined by the Board of Directors in the manner
described below) of issued and outstanding Common Stock into one share of Common
Stock. Fractional shares of Common Stock will not be issued as a result of the
Reverse Stock Split, but instead, the Company will pay each holder of a
fractional interest an amount in cash equal to the value of such fractional
interest on the Effective Date.
If the Reverse Stock Split proposal is approved by the stockholders, the
Reverse Stock Split will be effected only upon a determination by the Board that
the Reverse Stock Split is in the best interest of the Company and its
stockholders at that time. Notwithstanding approval of the Reverse Stock Split
proposal by the stockholders of the Company, the Board may, in its sole
discretion, determine not to effect the Reverse Stock Split or to delay such
action based on the then-current trading price of the Common Stock or certain
other factors described herein. See "--Effect of the Reverse Stock Split
Proposal." On February [ ], 2001, the last reported sale price of the Common
Stock on the Nasdaq Stock Market, Inc. National Market (the "Nasdaq National
Market") was $.[ ] per share.
Dissenting stockholders have no appraisal rights under Delaware law, the
Company's Certificate of Incorporation or the Company's Restated By-laws in
connection with the approval of the Reverse Stock Split Amendment and the
consummation of the Reverse Stock Split.
The following stockholders of the Company, holding in the aggregate
9,300,834 shares of the Company's Common Stock, have expressed their intention
to vote in favor of the proposal: Robert S. Bland and Maureen A. Bland
(including shares owned indirectly by Southcote Partners, L.P.), and William V.
Thoms and Susan E. Thoms. These shares represent 52.4% of the total issued and
outstanding Common Stock of the Company. Because the Proposal is considered to
be adopted by the Stockholders of the Company if a majority of the Company's
issued and outstanding shares vote in favor of the proposal, assuming that these
stockholders vote their shares consistent with their expressed intent, the
approval and adoption of the proposal is assured.
REASONS FOR THE REVERSE STOCK SPLIT PROPOSAL
The primary purpose of the Reverse Stock Split is to combine the outstanding
shares of Common Stock so that the Common Stock outstanding after giving effect
to the Reverse Stock Split trades at a higher price per share than the Common
Stock outstanding before giving effect to the Reverse Stock Split. The Company
believes that this higher trading price will aid the Company in remaining
eligible for listing on the Nasdaq National Market.
The Company's Common Stock must maintain a minimum bid price of $1.00 per
share in order to remain eligible for continued listing on the Nasdaq National
Market. On December 13, 2000, the staff (the "Staff") of the Nasdaq Stock
Market, Inc. ("Nasdaq") notified the Company that the bid price for its Common
Stock had been below $1.00 per share for a period of thirty consecutive days.
The Staff advised the Company that it would be given a period of ninety days
within which to comply with the minimum bid price requirement in order to
maintain its listing on the Nasdaq National Market.
The Company believes, but cannot assure, that the Reverse Stock Split will
enable the Common Stock to trade above the $1.00 minimum bid price established
by the Nasdaq listing requirements for continued listing on the Nasdaq National
Market (the "Nasdaq National Market Listing Requirements") and to satisfy the
minimum bid price requirement for at least ten consecutive trading days
thereafter. On February [ ],2001, the last reported sale price of the Common
Stock on the Nasdaq National Market was $. [ ] per share.
The Company believes that maintaining the listing of its Common Stock on the
Nasdaq National Market is in the best interest of the Company and its
stockholders. Inclusion in the Nasdaq National Market increases liquidity and
may potentially minimize the spread between the "bid" and "asked" prices quoted
by market makers. Further, a Nasdaq National Market listing may enhance the
Company's access to capital and increase the Company's flexibility in responding
to anticipated capital requirements. The Company believes that prospective
investors will view an investment in the Company more favorably if its shares
qualify for listing on the Nasdaq National Market.
<PAGE> 7
The Company also believes that the current per share price level of the
Common Stock has reduced the effective marketability of the Company's shares of
Common Stock because of the reluctance of many leading brokerage firms to
recommend low-priced stock to their clients. Certain investors view low-priced
stock as speculative and unattractive, although certain other investors may be
attracted to low-priced stock because of the greater trading volatility
sometimes associated with such securities. In addition, a variety of brokerage
house policies and practices tend to discourage individual brokers within those
firms from dealing in low-priced stock. Such policies and practices pertain to
the payment of brokers commissions and to time-consuming procedures that
function to make the handling of low-priced stocks unattractive to brokers from
an economic standpoint.
In addition, because brokerage commissions on low-priced stock generally
represent a higher percentage of the stock price than commissions on
higher-priced stock, the current share price of the Common Stock can result in
individual stockholders paying transaction costs (commissions, markups or
markdowns) that represent a higher percentage of their total share value than
would be the case if the share price were substantially higher. This factor also
may limit the willingness of institutions to purchase the Common Stock at its
current low share price.
In addition, if the Common Stock is not listed on the Nasdaq National Market
and the trading price of the Common Stock were to remain below $1.00 per share,
trading in the Common Stock would also be subject to the requirements of certain
rules promulgated under the Exchange Act which require additional disclosures by
broker-dealers in connection with any trades involving a stock defined as a
"penny stock" (generally, a non-Nasdaq equity security that has a market price
of less than $5.00 per share, subject to certain exceptions). In such event, the
additional burdens imposed upon broker-dealers to effect transactions in the
Common Stock could further limit the market liquidity of the Common Stock and
the ability of investors to trade the Common Stock.
As discussed below, in the event that the Common Stock is delisted from the
Nasdaq National Market, the Company may not qualify for listing on the Nasdaq
SmallCap Market. See "--Other Nasdaq Requirements." In such an event, sales of
the Common Stock would likely be conducted only in the over-the-counter market
or potentially in regional exchanges. This may have a negative impact on the
liquidity and price of the Common Stock and investors may find it more difficult
to purchase or dispose of, or to obtain accurate quotations as to the market
value of, the Common Stock.
For all the above reasons, the Company believes that the Reverse Stock Split
is in the best interests of the Company and its stockholders. There can be no
assurance, however, that the Reverse Stock Split will have the desired
consequences. Specifically, there can be no assurance that, after the Reverse
Stock Split, the market price of the Common Stock will not decrease to its
pre-split levels or that the market capitalization of the Common Stock after the
proposed Reverse Stock Split will be equal to the market capitalization before
the proposed Reverse Stock Split.
EFFECT OF THE REVERSE STOCK SPLIT PROPOSAL
Although the Company expects to file the Reverse Stock Split Amendment with
the Delaware Secretary of State's office promptly following approval of the
Reverse Stock Split proposal at the Meeting, the actual timing of such filing
will be determined by the Board of Directors based upon its evaluation as to
when such action is most advantageous to the Company and its stockholders.
Further, notwithstanding approval of the Reverse Stock Split proposal by the
stockholders of the Company, the Board of Directors may elect not to file the
Reverse Stock Split Amendment.
After the Effective Date of the Reverse Stock Split, each stockholder will
own a reduced number of shares of Common Stock but will hold the same percentage
of the outstanding shares (subject to adjustments for fractional interests
resulting from the Reverse Stock Split) as such stockholder held prior to the
Effective Date. The number of shares of Common Stock that may be purchased upon
the exercise of outstanding options, warrants, and other securities convertible
into, or exercisable or exchangeable for, shares of Common Stock, and the per
share exercise or conversion prices thereof, will be adjusted appropriately with
respect to the Reverse Stock Split in accordance with their terms as of the
Effective Date.
The Reverse Stock Split may also result in some stockholders owning "odd
lots" of less than 100 shares of Common Stock received as a result of the
Reverse Stock Split. Brokerage commissions and other costs of transactions in
odd lots may be higher, particularly on a per-share basis, than the cost of
transactions in even multiples of 100 shares.
Following the Reverse Stock Split, the number of shares of Common Stock
outstanding will be reduced and the par value of the Common Stock will be
increased (from $0.001 per share to $0.006 per share, in proportion to the
reverse split exchange ratio determined by the Board of Directors). As a
consequence, the aggregate par value of the outstanding Common Stock will not
change. The Reverse Stock Split will not affect the Company's total
stockholders'
<PAGE> 8
equity. All share and per share information will be retroactively adjusted
following the Effective Date to reflect the Reverse Stock Split for all periods
presented in future filings.
The Board considered reducing the number of shares of authorized Common
Stock in connection with the Reverse Stock Split but determined that the
availability of additional shares may be beneficial to the Company in the
future. The availability of additional authorized shares will allow the Board to
issue shares for corporate purposes, if appropriate opportunities should arise,
without further action by stockholders or the time delay involved in obtaining
stockholder approval (except to the extent that approval is otherwise required
by applicable law).
Based on the 17,750,711 shares Common Stock outstanding as of January 25,
2001, the approximate number of shares of Common Stock that would be outstanding
as a result of the Reverse Stock Split, based on the exchange ratio range
included in the Reverse Stock Split proposal is 2,958,451.
The Reverse Stock Split will affect all stockholders equally and will not
affect any stockholder's proportionate equity interest in the Company (except
with respect to adjustments for fractional interests). None of the rights
currently accruing to holders of the Common Stock, options or warrants to
purchase Common Stock will be affected by the Reverse Stock Split. Following the
Reverse Stock Split, each share of the Common Stock resulting from the Reverse
Stock Split will entitle the holder thereof to one vote per share and will
otherwise be identical to the outstanding Common Stock immediately prior to the
Effective Date.
EXCHANGE OF STOCK CERTIFICATES; NO FRACTIONAL SHARES
The combination and reclassification of shares of Common Stock pursuant to
the Reverse Stock Split will occur automatically on the Effective Date without
any action on the part of stockholders of the Company and without regard to the
date on which certificates evidencing shares of Common Stock prior to the
Reverse Stock Split are physically surrendered for new certificates. As of the
Effective Date, six shares of Common Stock will be converted and reclassified
into one share of post-split Common Stock.
For example, a holder of 300 shares immediately prior to the Effective Date
would hold 50 shares after the Effective Date. Fractional shares of Common Stock
will not be issued as a result of the Reverse Stock Split, but instead, the
Company will pay each holder of a fractional interest an amount in cash equal to
the value of such fractional interest on the Effective Date.
As soon as practicable after the Effective Date, transmittal forms will be
mailed to each holder of record of shares of Common Stock, to be used in
forwarding such holder's stock certificates for surrender and exchange for
certificates evidencing the number of shares of Common Stock such stockholder is
entitled to receive as a consequence of the Reverse Stock Split. The transmittal
forms will be accompanied by instructions specifying other details of the
exchange. Upon receipt of such transmittal form, each stockholder should
surrender the certificates evidencing shares of Common Stock prior to the
Reverse Stock Split in accordance with the applicable instructions. Each holder
who surrenders certificates will receive new certificates evidencing the whole
number of shares of Common Stock that such stockholder holds as a result of the
Reverse Stock Split. Stockholders will not be required to pay any transfer fee
or other fee in connection with the exchange of certificates.
The Company estimates that its aggregate expenses relating to the Reverse
Stock Split will be approximately $30,000.
STOCKHOLDERS SHOULD NOT SUBMIT THEIR STOCK CERTIFICATES FOR EXCHANGE UNTIL THEY
RECEIVE A TRANSMITTAL FORM FROM THE COMPANY.
As of the Effective Date, each certificate representing shares of Common
Stock outstanding prior to the Effective Date will be deemed canceled and, for
all corporate purposes, will be deemed only to evidence the right to receive the
number of shares of Common Stock into which the shares of Common Stock evidenced
by such certificate have been converted as a result of the Reverse Stock Split.
<PAGE> 9
OTHER NASDAQ REQUIREMENTS
In addition to the $1.00 minimum bid price per share requirement described
above, the continued listing of the Common Stock on the Nasdaq National Market
is subject to the maintenance of the other quantitative and qualitative
requirements set forth in the Nasdaq National Market Listing Requirements. In
particular, the Nasdaq National Market Listing Requirements require that a
company currently included in the Nasdaq National Market meet each of the
following standards to maintain its continued listing:
Nasdaq National Market Listing Considerations:
(1) Net tangible assets of $4,000,000;
(2) a public float of 750,000 shares;
(3) a market value of public float of $5,000,000;
(4) a minimum bid price of $1 per share;
(5) 400 round lot shareholders;
(6) two market makers; and
(7) compliance with Nasdaq corporate governance rules.
Although the Company believes that it will meet each of these requirements
as of the first full trading day after the Effective Date, there can be no
assurance that such will be the case or that other factors will not cause the
Company to fail to meet such requirements.
In the event that the Company is unable to satisfy the requirements for
continued listing on the Nasdaq National Market, the Company may not be able to
satisfy the requirements for listing on the Nasdaq SmallCap Market on an ongoing
basis either before or after the Reverse Stock Split. The requirements for
listing on the Nasdaq SmallCap Market are listed below:
Nasdaq SmallCap Market Listing Considerations:
(1) either (a) net tangible assets of $2,000,000, (b) net income in two of
the last three years of $500,000, or (c) a market capitalization of
$35,000,000;
(2) a public float of 500,000 shares;
(3) a market value of public float of $1,000,000;
(4) a minimum bid price of $1.00 per share;
(5) two market makers;
(6) 300 round lot shareholders; and
(7) compliance with Nasdaq corporate governance rules.
Accordingly, the Company believes that the Reverse Stock Split represents
the Company's best opportunity to remain listed on Nasdaq.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion of the material federal income tax consequences of
the Reverse Stock Split is based upon the Internal Revenue Code of 1986, as
amended, Treasury regulations thereunder, judicial decisions and current
administrative rulings and practices, all as in effect on the date hereof and
all of which could be repealed, overruled or modified at any time, possibly with
retroactive effect. No ruling from the Internal Revenue Service (the "IRS") with
<PAGE> 10
respect to the matters discussed herein has been requested and there is no
assurance that the IRS would agree with the conclusions set forth in this
discussion.
This discussion may not address certain federal income tax consequences that
may be relevant to particular stockholders in light of their personal
circumstances or to certain types of stockholders (such as dealers in
securities, insurance companies, foreign individuals and entities, financial
institutions and tax-exempt entities) that may be subject to special treatment
under the federal income tax laws. This discussion also does not address any tax
consequences under state, local or foreign laws.
STOCKHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISERS AS TO THE PARTICULAR TAX
CONSEQUENCES TO THEM OF THE REVERSE STOCK SPLIT.
Except as discussed below, no gain or loss should be recognized by a
stockholder who receives only Common Stock in connection with the transactions
contemplated by the Reverse Stock Split. The aggregate tax basis of the shares
of Common Stock held by a stockholder following the Reverse Stock Split will
equal the stockholder's aggregate basis in the Common Stock held immediately
prior to the Reverse Stock Split and generally will be allocated among the
shares of Common Stock held following the Reverse Stock Split on a pro-rata
basis. Stockholders who have used the specific identification method to identify
their basis in shares of Common Stock combined in the Reverse Stock Split should
consult their own tax advisors to determine their basis in the shares of Common
Stock received in exchange therefore in the Reverse Stock Split. Shares of
Common Stock received should have the same holding period as the Common Stock
surrendered. The receipt of a cash payment in lieu of a fractional interest will
result in recognition of gain or loss for federal income tax purposes.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE REVERSE
STOCK SPLIT PROPOSAL.
OTHER MATTERS TO COME BEFORE THE SPECIAL MEETING
The Board of Directors of the Company knows of no other business which may
come before the Meeting. However, if any other matters are properly presented to
the Meeting or any adjournment thereof, the persons named in the proxies will
vote upon them in accordance with their best judgment.
WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING, PLEASE SIGN THE
ENCLOSED PROXY CARD AND RETURN IT IN THE ENCLOSED STAMPED ENVELOPE.
By Order of the Board of Directors,
David I. Vickers
Senior Vice President, Chief Financial Officer and Secretary
Date: February ___, 2001
<PAGE> 11
Appendix A
CERTIFICATE OF AMENDMENT
TO
RESTATED CERTIFICATE OF INCORPORATION
OF
QUOTESMITH.COM, INC.
The undersigned, the Chief Executive Officer of Quotesmith.com, Inc., a
Delaware corporation (the "Corporation"), does hereby certify as follows:
1. The name of the Corporation is Quotesmith.com, Inc.
2. Article FOURTH of the Corporation's Restated Certificate of
Incorporation (the "Certificate of Incorporation") is hereby amended as
follows:
By adding to the end of Article FOURTH, Paragraph (1) the
following:
Simultaneously with the effective date of this Certificate of
Amendment (the "Effective Date"), all issued and outstanding
shares of Common Stock ("Existing Common Stock") shall be and
hereby are automatically combined and reclassified as follows:
each six (6) shares of Existing Common Stock shall be combined and
reclassified (the "Reverse Split") as one (1) share of issued and
outstanding Common Stock ("New Common Stock"), provided that there
shall be no fractional shares of New Common Stock. In the case of
any holder of fewer than six (6) Shares of Existing Common Stock
or any number of shares of Existing Common Stock which, when
divided by six (6), does not result in a whole number (a
"Fractional Share Holder"), the fractional share interest of New
Common Stock held by such Fractional Share Holder as a result of
the Reverse Split shall be cancelled and such Fractional Share
Holder shall be entitled to receive an amount in cash equal to the
value, based on the market price, of such fractional share
interest on the Effective Date.
The Corporation shall, through its transfer agent, provide
certificates representing New Common Stock to holders of Existing
Common Stock in exchange for certificates representing Existing
Common Stock. From and after the Effective Date, certificates
representing shares of Existing Common Stock are hereby canceled
and shall represent only the right of the holders thereof to
receive New Common Stock.
From and after the Effective Date, the term "New Common
Stock" as used in this Article FOURTH shall mean Common Stock as
provided in the Certificate of Incorporation.
3. The foregoing amendment was duly approved and adopted in accordance
with the provisions of Section 242 of the General Corporation Law of
the State of Delaware and the By-Laws of the Corporation at a meeting
of the Board of Directors of the Corporation on March 5, 2001, at which
a quorum was present and acting throughout. The Board of Directors
previously declared the advisability of the amendment and directed that
the amendment be submitted to the stockholders of the Corporation for
approval.
4. At a Special Meeting of the Stockholders of the Corporation held on
March 5, 2001, duly called and held in accordance with the provisions
of Section 222 of the General Corporation Law of the State of Delaware,
a majority of the shares of the outstanding Common Stock entitled to
vote thereon were voted in favor of the amendment in accordance with
Section 242 of the General Corporation Law of the State of Delaware.
5. This amendment shall be effective on the date this Certificate of
Amendment is filed and accepted by the Secretary of State of the State
of Delaware.
<PAGE> 12
The undersigned, being the Chief Executive Officer of the Corporation, for
purposes of amending its Certificate of Incorporation pursuant to the General
Corporation Law of the State of Delaware, acknowledges that it is his act and
deed and that the facts stated herein are true, and has signed this instrument
on March , 2001.
QUOTESMITH.COM, INC.
By:
-------------------------------
Robert S. Bland
Chief Executive Officer
ATTEST:
-------------------------------
David I. Vickers
Senior Vice President, Chief Financial Officer and Secretary
<PAGE> 13
QUOTESMITH.COM, INC.
Special Meeting of Stockholders
March 5, 2001
The undersigned hereby appoints Robert S. Bland and David I. Vickers (the
"Proxies"), and each of them, attorneys and proxies of the undersigned, each
with power of substitution and resubstitution, to attend, vote and act for the
undersigned at the Special Meeting of Stockholders (the "Meeting") of
Quotesmith.com, Inc. (the "Company") to be held on March 5, 2001, beginning at
9:00a.m. local time at the Company's corporate offices at 8205 South Cass
Avenue, Darien, Illinois. The Proxies shall cast votes according to the number
of shares of the Company which the undersigned may be entitled to vote with
respect to the proposal set forth on the reverse, in accordance with the
specification indicated, if any, and shall have all the powers which the
undersigned would possess if personally present. The undersigned hereby revokes
any prior proxy to vote at the Meeting, and hereby ratifies and confirms all
that said Proxies, or any of them, may lawfully do by virtue hereof and thereof.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
[X] Please mark your votes as in this example using dark ink only
DO NOT PRINT IN THIS AREA
-------------------------------------------
THIS PROXY WILL BE VOTED AS SPECIFIED AT RIGHT WITH RESPECT TO THE ACTIONS TO
BETAKEN ON THE FOLLOWING PROPOSAL. IN THE ABSENCE OF ANY SPECIFICATION, THIS
PROXY WILL BE VOTED IN FAVOR OF THE PROPOSAL.
REVERSE STOCK SPLIT PROPOSAL. The Company's Restated Certificate of
Incorporation is to be amended to effect a reverse stock split of the Company's
outstanding Common Stock, whereby the Company will issue one new share of Common
Stock in exchange for six shares of the outstanding Common Stock.
Vote FOR Vote AGAINST ABSTAIN from voting
the proposal the proposal with respect to the proposal
[ ] [ ] [ ]
---------------------------------
DO NOT PRINT IN THIS AREA
---------------------------------
If any other matters properly come before the Meeting or any adjournment
thereof, this proxy will be voted according to the judgment of the persons named
on the reverse side as Proxies.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF SPECIAL MEETING OF
STOCKHOLDERS OF THE COMPANY AND THE PROXY STATEMENT DATED February ___, 2001.
THIS PROXY IS SOLICITED AND PROPOSED BY THE BOARD OF DIRECTORS OF THE COMPANY,
WHICH UNANIMOUSLY RECOMMENDS THAT YOU VOTE IN FAVOR OF THE PROPOSAL.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
Date: , 2001 Date: , 2001
---------------- ----- ------------------------- ------
Signature Signature if held jointly
Note: For shares held jointly, each joint owner should personally sign. If
signing as executor, or in any other representative capacity, or as an officer
of a corporation, please indicate your full title as such.
