Page 1 of 12
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
Vertrue Incorporated
(Name of Issuer)
Common Stock, $0.01 par value
(Title of Class of Securities)
586002 10 7
(CUSIP Number)
Thomas W. Smith
323 Railroad Avenue
Greenwich, CT 06830
(203) 661-1200
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 31, 2004
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box. |_|
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 2 of 12 Pages
CUSIP No. 586002 10 7
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON
Thomas W. Smith
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |_|
(b) |x|
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF and OO (Funds of Managed Accounts)
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) |_|
Not Applicable
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
786,290
-----------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 1,344,928
OWNED BY -----------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 868,333
WITH -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,344,928
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,213,261
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_|
Not Applicable
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
22.1%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 3 of 12 Pages
CUSIP No. 586002 10 7
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON
Scott J. Vassalluzzo
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |_|
(b) |x|
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF and OO (Funds of Managed Accounts)
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) |_|
Not Applicable
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
15,060
-----------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 1,314,928
OWNED BY -----------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 75,060
WITH -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,314,928
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,389,988
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_|
Not Applicable
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.9%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 4 of 12 Pages
CUSIP No. 586002 10 7
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON
Daniel J. Englander
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |_|
(b) |x|
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF and OO (Funds of Managed Accounts)
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) |_|
Not Applicable
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
3,800
-----------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 30,000
OWNED BY -----------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 3,800
WITH -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
30,000
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
33,800
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_|
Not Applicable
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.3%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 5 of 12 Pages
CUSIP No. 586002 10 7
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON
Idoya Partners
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |_|
(b) |x|
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) |_|
Not Applicable
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York Limited Partnership
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
568,389
-----------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY -----------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 568,389
WITH -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
568,389
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_|
Not Applicable
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.7%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 6 of 12 Pages
CUSIP No. 586002 10 7
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON
Prescott Associates
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |_|
(b) |x|
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) |_|
Not Applicable
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York Limited Partnership
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
524,769
-----------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY -----------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 524,769
WITH -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
524,769
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_|
Not Applicable
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.2%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 7 of 12 Pages
Explanatory Note:
The following constitutes Amendment No. 2 ("Amendment") to the joint
filing on Schedule 13D by Thomas W. Smith, Thomas N. Tryforos, Scott J.
Vassalluzzo and Daniel J. Englander originally filed with the Securities and
Exchange Commission on November 23, 2003, as amended by Amendment No. 1 filed on
May 18, 2004 (the " Schedule 13D"). The Schedule 13D is being further amended to
reflect the removal of Thomas N. Tryforos as a joint filer based on the fact
that, as of December 31, 2004, Mr. Tryforos no longer beneficially owns more
than five percent of the Common Stock of Vertrue Incorporated.
The Original Schedule 13D is hereby amended and restated in its entirety
as follows:
Item 1. Security and Issuer
This statement relates to the common stock, $0.01 par value ("Common
Stock") of Vertrue Incorporated, a Delaware corporation whose principal
executive offices are located at 680 Washington Boulevard, Suite 1100, Stamford,
CT 06901 (the "Issuer").
Item 2. Identity and Background
(a) - (f) This statement is filed jointly by: (i) Thomas W. Smith, Scott
J. Vassalluzzo and Daniel J. Englander, each of whom is a private investment
manager; (ii) Idoya Partners, a New York limited partnership for which Messrs.
Smith and Vassalluzzo are each a general partner; and (iii) Prescott Associates,
a New York limited partnership for which Messrs. Smith and Vassalluzzo are each
a general partner (the persons and entities in (i) through (iii) are referred to
collectively herein as the "Reporting Persons"). The business address for each
of the Reporting Persons is 323 Railroad Avenue, Greenwich, Connecticut 06830.
The filing of this statement shall not be deemed to be an admission that the
Reporting Persons comprise a "group" within the meaning of Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended. The Reporting Persons each
disclaim beneficial ownership of the shares reported in this Schedule 13D in
excess of those shares as to which they have or share voting or investment
authority.
During the last five years, no Reporting Person has been convicted in a
criminal proceeding (excluding traffic violations and similar misdemeanors) nor
has any Reporting Person been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
Each of the Messrs. Smith, Vassalluzzo and Englander is a citizen of the
United States. Idoya Partners and Prescott Associates are New York limited
partnerships
Item 3. Source and Amount of Funds or Other Consideration
In order to fund the purchase of the Common Stock reported herein, the
Managed Accounts (as hereinafter defined) contributed in the aggregate
$42,291,699 of the funds of the Managed Accounts (including $17,527,927 and
$15,767,125 contributed by Idoya Partners and Prescott Associates,
respectively), Mr. Smith contributed $14,505,155 of his personal funds, Mr.
Page 8 of 12 Pages
Vassalluzzo contributed $241,637 of his personal funds and Mr. Englander
contributed $112,650 of his personal funds.
Item 4. Purpose of Transaction
As described more fully in Item 5 below, Messrs. Smith, Vassalluzzo and
Englander beneficially own 1,463,621, 1,374,928 and 30,000 shares of Common
Stock, respectively, in their capacity as investment managers for certain
managed accounts (the "Managed Accounts"). The Managed Accounts consist of
investment accounts for: (i) three private investment limited partnerships for
which Messrs. Smith and Vassalluzzo are each a general partner, (ii) one private
investment limited partnership for which Messrs. Smith and Englander are each a
general partner, (iii) an employee profit-sharing plan of a corporation
wholly-owned by Mr. Smith and for which each of Messrs. Smith and Vassalluzzo is
a trustee; (iv) certain friends and family members of Messrs Smith and
Vassalluzzo (including trusts established for the benefit of certain family
members of Mr. Smith), and (v) a private charitable foundation established by
Mr. Smith (for which Mr. Smith acts as trustee). In addition, Messrs. Smith,
Vassalluzzo and Englander each own Common Stock for their own accounts in the
amounts of 749,640, 15,060 and 3,800 shares, respectively (collectively, the
"Personal Shares"). The 1,523,621 shares of Common Stock owned by the Managed
Accounts (the "Managed Account Shares") were acquired by the Reporting Persons
on behalf of the Managed Accounts for the purpose of achieving the investment
goals of the Managed Accounts. Messrs. Smith, Vassalluzzo and Englander acquired
the Personal Shares for investment purposes. Based on market conditions, an
evaluation of alternative investments and such other factors as may be
considered relevant, the Reporting Persons may purchase or sell Common Stock
from time to time on terms considered desirable by the Reporting Persons. The
Reporting Persons may talk or hold discussions with various parties, including,
but not limited to, the Issuer's management, its board of directors, and other
shareholders and third parties, for the purpose of developing and implementing
strategies to maximize shareholder value, including strategies that may, in the
future, result in the occurrence of one or more of the actions or events
enumerated in clauses (a) through (j) of Item 4 of Schedule 13D. Subject to the
foregoing, none of the Reporting Persons has any present plan or proposal which
relates to or would result in any of the actions or events enumerated in clauses
(a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer
(a) The aggregate number and percentage of shares of Common Stock
beneficially owned by each of the Reporting Persons (based on information
included in the quarterly report on Form 10-Q filed by the Issuer on November 9,
2004, which disclosed that 10,002,792 shares of Common Stock were outstanding as
of October 29, 2004) is as follows: Mr. Smith - 2,213,261 shares (22.1%); Mr.
Vassalluzzo - 1,389,988 shares (13.9%); Mr. Englander - 33,800 shares (0.3%);
Idoya Partners - 568,389 shares (5.7%) and Prescott Associates - 524,769 shares
(5.2%).
(b) Messrs. Smith, Vassalluzzo and Englander have the sole power to vote
or to direct the vote of 786,290, 15,060 and 3,800 shares of Common Stock,
respectively, and to dispose or to direct the disposition of 868,333, 75,060 and
3,800 shares of Common Stock, respectively. Idoya Partners and Prescott
Associates have the sole power to vote or to direct the vote and the sole power
to dispose or to direct the disposition of 568,389 and 524,769 shares of Common
Stock, respectively. Of the 1,523,621 shares of Common Stock owned by the
Managed
Page 9 of 12 Pages
Accounts, Messrs. Smith and Vassalluzzo share the power to vote or to direct the
vote of and to dispose or to direct the disposition of 1,314,928 shares and
Messrs. Smith and Englander share the power to vote or to direct the vote of and
to dispose or to direct the disposition of 30,000 shares. Idoya Partners and
Prescott Associates do not share the power to vote or to direct the vote and
dispose or to direct the disposition of any Common Stock.
(c) During the sixty (60) days prior to the date of this filing, the
Reporting Persons effected no transactions involving shares of Common Stock,
except for the following:
Date Nature of Transaction Reporting Person(s) Number of Shares Price Per Share
-------------- ------------------------- ----------------------- -------------------- -------------------
01/03/05 Disposition (1) Thomas W. Smith 20,800 (1)
01/03/05 Acquisition (1) Thomas W. Smith 6,240 (1)
01/14/05 Disposition (2) Prescott Associates 18,811 (2)
----------
(1) Represents an in-kind liquidating distribution by a private investment
limited partnership for which Mr. Smith was a general partner. The distribution
was without consideration and was effected in accordance with the terms of the
partnership's limited partnership agreement. Mr. Smith received 6,240 shares of
Common Stock as his pro-rata portion of the distribution, which acquisition
represented a change in form of beneficial ownership only.
(2) Represents an in-kind distribution by Prescott Associates. The distribution
was without consideration and was effected in accordance with the terms of
Prescott Associates' limited partnership agreement.
(d) The Managed Accounts have the right to receive dividends from, and the
proceeds from the sale of, the Managed Account Shares.
(e) As of December 31, 2004, Thomas N. Tryforos ceased to be the
beneficial owner of more than five percent of the Issuer's Common Stock.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer
With respect to Managed Accounts established for the benefit of certain
family members and friends of the Reporting Persons, the voting and investment
authority accorded the Reporting Persons is subject to each beneficiary's
ability, if so provided, to terminate or otherwise direct the disposition of the
Managed Account. Except as disclosed in the preceding sentence or otherwise set
forth herein, there are no contracts, arrangements, understandings or
relationships (legal or otherwise) among any of the Reporting Persons and any
other person with respect to any securities of the Issuer, including any
contract, arrangement, understanding or relationship concerning the transfer or
the voting of any securities of the Issuer, or any finder's fees, joint
ventures, loan or option arrangements, puts or calls, guarantees of profits,
division of profits or loss, or the giving or withholding of proxies.
Page 10 of 12 Pages
Item 7. Material to Be Filed as Exhibits
1. Agreement relating to the joint filing of this statement on Schedule
13D/A dated January 31, 2005.
Page 11 of 12 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: January 31, 2005
/s/ Thomas W. Smith
------------------------------------
Thomas W. Smith
/s/ Scott J. Vassalluzzo
------------------------------------
Scott J. Vassalluzzo
/s/ Daniel J. Englander
------------------------------------
Daniel J. Englander
IDOYA PARTNERS
/s/ Thomas W. Smith
------------------------------------
By: Thomas W. Smith
Its: General Partner
PRESCOTT ASSOCIATES
/s/ Thomas W. Smith
------------------------------------
By: Thomas W. Smith
Its: General Partner