<PAGE> 1
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:
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
infoUSA, INC.
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(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):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
[infoUSA LOGO]
INFOUSA INC.
5711 SOUTH 86TH CIRCLE
OMAHA, NEBRASKA 68127
(402) 593-4500
Dear Stockholder:
You are cordially invited to attend the Special Meeting of the Stockholders
of infoUSA Inc. to be held at the infoUSA principal executive offices located at
5711 South 86th Circle, Omaha, Nebraska 68127 on October 21, 1999 at 10:00 a.m.,
local time.
At the Special Meeting, you will be asked to vote upon an amendment to the
Certificate of Incorporation of infoUSA (the "Amendment") which, if approved,
would combine and reclassify infoUSA's two classes of common stock into a single
class of common stock (the "Reclassified Common Stock"). Approval of the
Amendment requires the affirmative vote of holders of at least sixty percent
(60%) of the outstanding Class A and Class B Common Stock of the Company voting
together as a single class, a majority of the outstanding Class A Common Stock
of the Company voting as a separate class and a majority of the Class B Common
Stock of the Company voting as a separate class. Please read the enclosed proxy
statement and its exhibits for a full description of the rights, powers,
limitations and characteristics of the Reclassified Common Stock.
The reclassification of the Class A and Class B Common Stock will have no
impact on the total number of issued and outstanding shares of common stock of
infoUSA. As of August 30, 1999 there were approximately 24,351,005 million
shares of Class A Common Stock and 24,008,000 shares of Class B Common Stock
outstanding. After approval and adoption of the Amendment, an aggregate of
48,359,005 shares of the Reclassified Common Stock will be outstanding.
The Board of Directors has considered and approved the Amendment and
regards the adoption of the Amendment to be in the best interest of all of the
stockholders of infoUSA. The Board believes that the elimination of its dual
classes of common stock may help align the voting rights of infoUSA's
stockholders with their economic risk of ownership, increase infoUSA's
flexibility to structure acquisitions or equity financings, increase the overall
liquidity of infoUSA's common stock and eliminate the discounting of the Class A
Common Stock.
YOUR BOARD OF DIRECTORS HAS APPROVED AND STRONGLY RECOMMENDS THAT YOU VOTE
"FOR" THE AMENDED CERTIFICATE.
It is important that your shares be represented and voted at the meeting,
whether or not you plan to attend in person. PLEASE COMPLETE, SIGN, DATE AND
MAIL THE ACCOMPANYING PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE, WHICH
REQUIRES NO POSTAGE.
Sincerely,
VINOD GUPTA
Chairman and Chief Executive Officer
<PAGE> 3
[infoUSA LOGO]
INFOUSA INC.
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
OCTOBER 21, 1999
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders of infoUSA
Inc., a Delaware corporation (the "Company"), will be held on October 21, 1999,
at 10:00 a.m., local time, at the Company's principal executive offices located
at 5711 South 86th Circle, Omaha, Nebraska 68127 for the following purposes as
more fully described in the Proxy Statement accompanying this Notice:
1. To consider and act upon a proposal to amend Article IV of the
Company's Certificate of Incorporation, as amended, to (i) authorize a new
class of common stock, designated as Common Stock (the "Reclassified Common
Stock"), (ii) combine and reclassify the Company's Class A and Class B
Common Stock into the Reclassified Common Stock on a one-for-one basis, and
(iii) establish the rights, powers and limitations of the Reclassified
Common Stock.
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record at the close of business on August 30, 1999,
are entitled to receive notice of and to vote at the meeting.
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
HOWEVER, TO ASSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE URGED TO MARK,
SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE
POSTAGE-PREPAID ENVELOPE FOR THAT PURPOSE. STOCKHOLDERS ATTENDING THE MEETING
MAY VOTE IN PERSON EVEN IF THEY HAVE RETURNED A PROXY.
Sincerely,
FRED VAKILI
Secretary
Omaha, Nebraska
September 22, 1999
<PAGE> 4
INFOUSA INC.
---------------------
PROXY STATEMENT
---------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed Proxy is solicited on behalf of infoUSA Inc., a Delaware
corporation (the "Company"), for use at a Special Meeting of Stockholders (the
"Special Meeting") to be held on October 21, 1999, at 10:00 a.m., local time, or
at any adjournments or postponements thereof, for the purposes set forth in this
Proxy Statement and in the accompanying Notice of Special Meeting of
Stockholders. The Special Meeting will be held at the Company's principal
executive offices located at 5711 South 86th Circle, Omaha, Nebraska 68127. The
Company's telephone number is (402) 593-4500.
These proxy solicitation materials were mailed on or about September 22,
1999, to all stockholders entitled to vote at the meeting.
RECORD DATE; OUTSTANDING SHARES
Stockholders of record at the close of business on August 30, 1999 (the
"Record Date"), are entitled to receive notice of and vote at the meeting. On
the Record Date, 24,351,005 shares of the Company's Class A Common Stock, $.0025
par value, were issued and outstanding. On the Record Date, 24,008,000 shares of
the Company's Class B Common Stock, $.0025 par value, were issued and
outstanding. For information regarding holders of more than five percent of the
outstanding Common Stock, see "Other Information Regarding the
Company -- Security Ownership."
REVOCABILITY OF PROXIES
Proxies given pursuant to this solicitation may be revoked at any time
before they have been used. Revocation will occur by delivering a written notice
of revocation to the Company or by duly executing a proxy bearing a later date.
Revocation will also occur if the individual attends the meeting and votes in
person.
VOTING AND SOLICITATION
Every holder of record of Class A Common Stock on the Record Date is
entitled, for each share held, to one vote on each proposal or item that comes
before the meeting upon which stockholders of Class A Common Stock are eligible
to vote. Every holder of record of Class B Common Stock on the Record Date is
entitled, for each share held, to ten votes on each proposal or item that comes
before the meeting upon which stockholders of Class B Common Stock are eligible
to vote.
The cost of this solicitation will be borne by the Company. The Company may
reimburse expenses incurred by brokerage firms and other persons representing
beneficial owners of shares in forwarding solicitation material to beneficial
owners. Proxies may be solicited by certain of the Company's directors, officers
and regular employees, without additional compensation, personally, by telephone
or by telegram. The Company has retained Georgeson & Company, Inc., an
independent proxy solicitation firm, to assist in soliciting proxies at an
estimated fee of $6,500 plus reimbursement of reasonable expenses.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Stockholder proposals which are intended to be presented at the Company's
2000 Annual Meeting must be received by the Company no later than December 6,
1999 in order that they may be included in the proxy statement and form of proxy
for that meeting. The Company's proxy for the 2000 Annual meeting may confer on
the proxy holder discretionary authority to vote on any stockholder proposals
that are intended to be presented at the Company's 2000 Annual Meeting that are
received after February 19, 2000.
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PROPOSAL NO. 1:
AMENDMENT OF CERTIFICATE OF INCORPORATION
DESCRIPTION OF THE AMENDMENT
The Board of Directors of infoUSA has determined that it is in the best
interests of the Company and its stockholders to amend the Company's Certificate
of Incorporation to effect the combination and reclassification of its two
classes of common stock into a single class of common stock with each share
having one vote, and recommends the approval of the amendment of infoUSA's
Certificate of Incorporation (the "Amendment" or the "Reclassification"). The
following is a summary of the material provisions of the Amendment and its
various provisions; it should, however, be read in conjunction with, and is
qualified in its entirety by reference to, the complete text of the Amendment
which is attached hereto as Annex A.
At the Special Meeting, the stockholders of the Company are being asked to
consider and act upon a proposal to approve the Amendment which would: (i)
combine and reclassify infoUSA's two classes of common stock into a single class
of common stock (the "Reclassified Common Stock") with each share being entitled
to one vote, and (ii) establish the rights, powers and limitations of the
Reclassified Common Stock. If the Amendment is approved, each outstanding share
of infoUSA Class A Common Stock and Class B Common Stock will be changed,
reclassified and converted without any action on the part of the holder into one
share of Reclassified Common Stock. The Reclassified Common Stock will trade on
the Nasdaq National Market System under the symbol IUSA.
Approval of at least sixty percent (60%) of the outstanding Class A and
Class B Common Stock of the Company as of the Record Date voting together as a
single class, a majority of the outstanding Class A Common Stock of the Company
as of the Record Date voting as a separate class and a majority of the Class B
Common Stock of the Company as of the Record Date voting as a separate class, is
required to approve the Amendment under Delaware law and the Company's
Certificate of Incorporation.
If the stockholders approve the Amendment, the Board of Directors intends
to file the Amendment with the Secretary of State of the State of Delaware as
soon as practicable following approval. The Amendment will be effective
immediately upon acceptance of filing by the Secretary of State of the State of
Delaware (the "Effective Time"). Although the Board of Directors presently
intends to file the Amendment if it is approved by stockholders, the resolution
of the stockholders will reserve the right of the Board of Directors to abandon
the Amendment and not file such Amendment even if the Amendment is approved by
stockholders. Although the Board of Directors does not currently anticipate
exercising its right to abandon the Amendment nor does it contemplate any
specific events that would trigger the abandonment of the Amendment, the Board
will defer or abandon the Amendment if, in its business judgment, adverse market
conditions, general economic conditions or other developments affecting the
Company are such as to make the combination and reclassification of the Class A
and Class B Common Stock and the filing of the Amendment no longer in the best
interests of the Company or its stockholders.
Upon filing of the Amendment, the relative voting power of the Company's
stockholders will change, as will the voting power of members of the family of
the Company's Chairman of the Board and Chief Executive Officer, Vinod Gupta
(the "Gupta Family"). As of the Record Date, members of the Gupta Family had
sole or shared voting or dispositive power over approximately 41% of the votes
associated with shares of Class A and Class B Common Stock. Upon filing of the
Amendment, members of the Gupta Family would have sole or shared voting or
dispositive power over approximately 40% of the Common Stock. No reference
herein to securities held or controlled by the Gupta Family shall be deemed an
admission by any member of the Gupta Family that such member beneficially owns
any of such securities individually or as part of a group for purposes of
Sections 13 or 16 of the Securities Exchange Act of 1934, as amended, or for any
other purposes.
DESCRIPTION OF THE RECLASSIFIED COMMON STOCK
The rights, powers and limitations of the Reclassified Common Stock are set
forth in full in the Amendment. The Amendment is set forth as Annex A to this
Proxy Statement and is incorporated herein by reference. The
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Amendment would combine and reclassify infoUSA's two classes of common stock
into a single class of common stock, $.0025 par value, with each share being
entitled to one vote.
Voting. Upon the filing of the Amendment, each share of the Reclassified
Common Stock will have one (1) vote and holders of the Reclassified Common Stock
will be entitled to vote for the election of directors and all other matters
requiring stockholder approval.
Dividends and Other Distributions. Holders of the Reclassified Common Stock
will be entitled to equal per share cash dividends and dividends paid in stock
or property of the Company, when, as and if such dividends may be declared by
the Board of Directors and paid out of legally available assets.
Preemptive Rights. The Reclassified Common Stock will not carry any
preemptive rights enabling a holder to subscribe for, or receive shares of, any
class of stock of the Company or any other securities convertible into shares of
any class of stock of the Company.
Authorized Reclassified Common Stock. The total number of shares of common
stock authorized for issuance will not change if the Amendment is approved. The
Company's Certificate of Incorporation presently authorizes the issuance of up
to 220,000,000 shares of Class A Common Stock and up to 75,000,000 shares of
Class B Common Stock. The Amendment would authorize the Company to issue up to
295,000,000 shares of Reclassified Common Stock. Following the filing of the
Amendment, 48,359,005 shares of Reclassified Common Stock would be issued and
outstanding. Therefore, approximately 246,000,000 shares of Reclassified Common
Stock would be available for issuance from time to time for any proper corporate
purpose, including stock splits, stock dividends, acquisitions, stock option
plans and funding of employee benefit plans.
CERTAIN EFFECTS OF THE AMENDMENT
Effect on Stock Certificates. Certificates that represent the Class A and
Class B Common Stock will, upon the effectiveness of the Reclassification,
represent shares of the Reclassified Common Stock without any further action on
the part of the holder or the Company. As soon as practicable after the
Amendment is approved, we will mail to each holder of record of Class A Common
Stock and Class B Common Stock a letter of transmittal to be used in forwarding
certificates evidencing such shares for surrender and exchange for certificates
evidencing the shares of Reclassified Common Stock to which the holder has been
entitled. After receipt of the applicable transmittal form, each holder of
certificates formerly representing shares of Class A Common Stock or Class B
Common Stock should surrender such certificates to Norwest Bank Minnesota, N.A.,
the transfer agent for the Reclassified Common Stock (the "Transfer Agent"),
together with a properly completed and duly executed transmittal form and such
documents as may reasonably be required by the Transfer Agent. Each holder will
receive in exchange therefor certificates evidencing the shares of Reclassified
Common Stock to which such holder is entitled. The transmittal forms will be
accompanied by instructions specifying other details of the exchange. If,
following the filing of the Amendment, a valid certificate previously
representing any shares of Class A Common Stock or Class B Common Stock is
presented to the Transfer Agent or to the Company, the stock certificate will be
canceled and exchanged as provided above.
Stock Option Plans. At the Effective Time, each outstanding option to
purchase both, but not either, shares of the Company's Class A and shares of
Class B Common Stock pursuant to the 1992 Stock Option Plan shall become an
option to purchase at the same aggregate exercise price the number of shares of
Reclassified Common Stock equal to the sum of the shares of Class A Common Stock
and Class B Common Stock underlying the option immediately prior to the
Effective Time. At the Effective Time, each outstanding option to purchase
shares of the Company's Class A Common Stock pursuant to the 1997 Class A Common
Stock Option Plan shall become an option to purchase at the same exercise price
the number of shares of Reclassified Common Stock equal to the number of shares
of Class A Common Stock underlying the option immediately prior to the Effective
Time. In all other respects, the terms and conditions of such options shall be
unchanged.
Material Tax Consequences. Stockholders of the Company will not recognize
gain or loss upon the reclassification of their shares of Class A Common Stock
or Class B Common Stock as shares of Reclassified Common Stock. The aggregate
tax basis of the shares of Reclassified Common Stock will be the same as the
aggregate tax basis of the shares of Class A Common Stock and/or Class B Common
Stock reclassified. The
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<PAGE> 7
holding period for the shares of Reclassified Common Stock will include the
holding period of the shares of Class A Common Stock and/or Class B Common
Stock.
Trading Market. Currently, the shares of Class A Common Stock and Class B
Common stock are traded separately on the Nasdaq National Market. Following the
filing of the Amendment, the Reclassified Common Stock will trade as a single
class on the Nasdaq National Market under the symbol IUSA. For the past twelve
months, the average daily trading volume of the Class A Common Stock has been
approximately 55,000 shares and the average daily trading volume for the Class B
Common Stock has been approximately 27,000 shares. Although one of the reasons
underlying the Company's desire for a single class of common stock is increasing
the liquidity and trading efficiency of the Company's Common Stock, the Company
cannot assure that the liquidity and trading efficiency of the Reclassified
Common Stock will increase as a result of the combination of the two classes.
Effect on Market Price. The market price of shares of Reclassified Common
Stock following the combination of the two classes will depend on many factors,
including, among others, the future performance of the Company, general market
conditions and conditions relating to companies in industries similar to that of
the Company. Accordingly, the Company cannot predict the prices at which the
Reclassified Common Stock will trade following the adoption of the Amendment,
just as the Company could not predict the price at which the Class A Common
Stock and Class B Common Stock trade. On August 25, 1999, the closing price of
the Class A Common Stock and the Class B Common Stock was $6.94 per share and
$7.00 per share, respectively, as reported on the Nasdaq National Market System.
Securities Act of 1933. The combination and reclassification of the Class A
and Class B Common Stock into the Reclassified Common Stock is being made
pursuant to an exemption from registration under Section 3(a)(9) of the
Securities Act of 1933. Shares of Reclassified Common Stock held immediately
upon effectiveness of the Amendment, other than any such shares held by
affiliates of the Company within the meaning of the Securities Act, and other
than shares received in respect of unregistered shares, may be offered for sale
and sold in the same manner as the existing Class A and Class B Common Stock
without registration under the Securities Act. Affiliates of the Company and
holders of unregistered shares will continue to be subject to the restrictions
specified in Rule 144 under the Securities Act.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Reclassification has been unanimously approved by the Company's Board
of Directors, including by each of the directors who is neither a member of the
Gupta Family nor an officer or employee of the Company. The Board believes that
the Reclassification is in the best interests of the Company and its
stockholders and recommends that you vote "FOR" the adoption of the
Reclassification. See "The Board's Reasons for the Reclassification."
THE BOARD'S REASONS FOR THE RECLASSIFICATION
After carefully considering the factors summarized below, the Board of
Directors has come to the conclusion that the Reclassification will promote the
long-term best interests of the Company and all of its stockholders. In
simplifying the Company's capital structure, the Board believes that the
Reclassification will potentially enhance liquidity in the Company's common
stock, better align voting rights with equity ownership in a manner preferable
to investors and may potentially reduce economic dilution caused by discounting
Class A Common Stock for shares issued in financings or in connection with
acquisitions. Further the Board believes the Reclassification will conform the
Company's capital structure to the capital structure of the majority of publicly
traded companies.
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CERTAIN POTENTIAL BENEFITS OF THE RECLASSIFICATION
After careful consideration, the Board has identified the following
potential benefits of the Reclassification for the Company and its stockholders:
Simplification of the Capital Structure. The Board of Directors believes
that the Company's dual classes of common stock have had negative consequences
on its stock prices and its ability to pursue its long term business plans. The
existence of the two classes has reduced the Company's flexibility to structure
potential acquisitions and other transactions using voting securities and has
potentially increased infoUSA's acquisition cost if it were to use Class A
Common Stock to pay for acquisitions. The Board of Directors believes that the
simplification of the capital structure will eliminate these negative effects as
described below, will better align voting control with the risk of ownership and
will make the Company's common stock a more attractive investment.
Potential Improvement of Liquidity and Increased Appeal to Investors. In
establishing a single class of common stock, the Board believes that the
Reclassification may increase the liquidity of the traded shares. In particular,
by allowing for easier analysis and valuation of the rights to which
stockholders are entitled, the Board believes that a larger group of investors
may be encouraged to investigate the Company's stock. The Board believes that
the Reclassification may further potentially enhance investor interest in the
Company's Common Stock by eliminating possible investor confusion caused by the
dual-class structure. Additionally, the Board believes that the uniform
structure of voting rights found in the Reclassified Common Stock may
potentially appeal more to institutional investors. While the Board believes the
Reclassification may increase investor interest in the Company's Stock and
therefor improve liquidity, there can be no assurance that this will occur.
Ability to Potentially Decrease Economic Dilution in Acquisitions. Since
the Company adopted its two-class stock structure in October 1997, the Company's
Class A Common Stock has, on average, traded at a discount to the Class B Common
Stock. The Board believes that the single-class structure of common stock may
decrease potential economic dilution caused by the discounting of Class A Common
Stock in the event such shares are issued in financings or in connection with
acquisitions. The Board believes that the shares of common stock issued in
connection with future transactions may potentially receive a higher valuation
than would be the case under the current capital structure as a reflection of
the relative increase in voting power associated with those shares due to the
Reclassification and the potential increased investor interest.
Alignment of Voting Rights With Equity Interests. The Board believes that
the Reclassification would better align the voting rights of stockholders with
the stockholders' economic interests. The reclassification of Class B Common
Stock, with ten votes per share, and Class A Common Stock, with one vote per
share, into Reclassified Common Stock, with one vote per share, will help voting
control reflect the risk of ownership.
CERTAIN POTENTIAL DISADVANTAGES OF THE RECLASSIFICATION
In addition to the potential benefits of the Reclassification, described
above, the Board also considered potential disadvantages of the
Reclassification, including:
Potential Inability to Use Pooling Accounting in Transactions Over the Next
Two Years. Under the rules applicable to transactions accounted for as "pooling
of interests" ("Pooling"), the Reclassification will constitute a change in the
Company's equity interests, which may make the Company ineligible to participate
as either a buyer or a seller in any Pooling transaction for a period of up to
two years. This prohibition may decrease the likelihood of future transaction
with entities interested in utilizing Pooling accounting.
CERTAIN FEDERAL INCOME TAX EFFECTS
The following description of certain federal income tax consequences
concerning the Reclassification is based upon current provisions of the Internal
Revenue Code of 1986, as amended, applicable Treasury Regulations, and judicial
and administrative interpretations thereof. This description does not, however,
address any aspects of state, local or foreign taxation relating to the
Reclassification.
The Company believes that, in general, stockholders of the Company will not
recognize gain or loss upon the reclassification of their shares of Class A
Common Stock or Class B Common Stock into shares of
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Reclassified Common Stock. The aggregate tax basis of the shares of the
Reclassified Common Stock received in exchange for Class A Common Stock or Class
B Common Stock, as applicable, will be the same as the aggregate tax basis of
the shares of Class A Common Stock and/or Class B Common Stock prior to the
Reclassification. The holding period for the shares of Reclassified Common Stock
will include the holding period of the shares of Class A Common Stock and/or
Class B Common Stock.
EFFECTS ON RELATIVE OWNERSHIP INTEREST AND VOTING POWER
Because the Amendment provides that each whole share of Class A Common
Stock, with one vote per share, and each whole share of Class B Common Stock,
with ten votes per share, will be reclassified and changed into one share of
Reclassified Common Stock with one vote per share, the relative voting power of
the shareholders will be changed by the Reclassification. As a result of the
Reclassification, the voting power of holders of Class B Common Stock
immediately prior to the Reclassification will decline from approximately 91% of
the combined voting power of the outstanding Class A and Class B Common Stock to
approximately 50% of the voting power of the Reclassified Common Stock.
GENERAL EXPENSES
The costs of proceeding with the Reclassification (such as transfer agent's
fees, printing, engraving and mailing costs, legal fees, investment banking
fees, solicitation fees, and NASD fees) will be charged against the Company's
pre-tax earnings. The approximate cost of proceeding with the Reclassification
is estimated to not exceed $100,000, inclusive of fees of legal advisors.
REQUIRED VOTE
Approval of the Reclassification requires the affirmative vote of holders
of at least sixty percent (60%) of the outstanding Class A and Class B Common
Stock of the Company as of the Record Date voting together as a single class, a
majority of the outstanding Class A Common Stock of the Company as of the Record
Date voting as a separate class and a majority of the Class B Common Stock of
the Company as of the Record Date voting as a separate class. Abstentions and
broker non-votes will be counted for the purpose of establishing a quorum, and
will have the same effect as a vote against the Reclassification. AFTER CAREFUL
CONSIDERATION, THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE "FOR" THE
RECLASSIFICATION.
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OTHER INFORMATION REGARDING THE COMPANY
SECURITY OWNERSHIP
The following table sets forth the beneficial ownership of the Company's
Class A Common Stock and Class B Common Stock as of the Record Date (i) by the
Chief Executive Officer and each of the other four most highly compensated
executive officers of the Company, (ii) by each director, (iii) by all current
directors and executive officers as a group and (iv) by all persons known to the
Company to be the beneficial owners of more than 5% of the Company's Common
Stock:
<TABLE>
<CAPTION>
TOTAL
VOTING
DIRECTORS, OFFICERS AND 5% STOCKHOLDERS CLASS A CLASS B PERCENTAGE
- --------------------------------------- ---------- ---------- ----------
<S> <C> <C> <C>
Vinod Gupta(1).................................... 9,849,920 10,010,054 40.6
5711 South 86th Circle
Omaha, Nebraska 68127
FMR Corp. ........................................ 1,782,500 1,835,000 7.6
82 Devonshire Street
Boston, Massachusetts 02109
Wanger Asset Management........................... 1,575,000 1,191,800 5.1
227 West Monroe Street, Suite #3000
Chicago, IL 60606-5016
Paul A. Goldner(2)................................ 504,497 497,047 2.1
George Haddix(3).................................. 58,916 27,500 *
Scott Dahnke(4)................................... 0 0 *
Harold W. Andersen(5)............................. 25,216 27,300 *
Charles Fote(6)................................... 10,000 0 *
Elliot S. Kaplan(7)............................... 79,756 91,840 *
Ben Nelson(8)..................................... 20,000 0 *
Monica Messer(9).................................. 229,682 202,184 *
William Chasse(10)................................ 191,248 154,750 *
William Kerrey(11)................................ 51,258 33,759 *
Al Ambrosino(12).................................. 103,498 66,000 *
All directors and executive officers as a group
(17 persons)(13)................................ 11,225,407 11,174,799 44.6
</TABLE>
- ---------------
* Represents less than 1% of the outstanding shares of Common Stock
(1) Excludes 353,545 shares of Class A Common Stock and 388,359 shares of Class
B Common Stock held in irrevocable trusts for the benefit of Mr. Gupta's
children for which Mr. Gupta is not a trustee and in which he has no
beneficial interest. Includes 604,166 shares of Class A Common Stock and
540,000 shares of Class B Common Stock subject to options exercisable
within 60 days of the Record Date.
(2) According to Mr. Goldner, excludes 1,325,389 shares of Class A Common Stock
and 1,244,849 shares of Class B Common Stock held in irrevocable trusts for
the benefit of Mr. Goldner's children for which Mr. Goldner is not a
trustee and in which he has no beneficial interest. Includes 75,000 shares
of Class A Common Stock and 75,000 shares of Class B Common Stock subject
to options exercisable within 60 days of the Record Date.
(3) Includes 10,916 shares of Class A Common Stock and 3,000 shares of Class B
Common Stock subject to options exercisable within 60 days of the Record
Date.
(4) Mr. Dahnke resigned his position as Chief Executive Officer of the Company
in August 1998.
(5) Includes 10,916 shares of Class A Common Stock and 3,000 shares of Class B
Common Stock subject to options exercisable within 60 days of the Record
Date.
(6) Includes 10,000 shares of Class A Common Stock subject to options
exercisable within 60 days of the Record Date.
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(7) Includes 13,916 shares of Class A Common Stock and 6,000 shares of Class B
Common Stock subject to options exercisable within 60 days of the Record
Date.
(8) Includes 10,000 shares of Class A Common Stock subject to options
exercisable within 60 days of the Record Date.
(9) Includes 99,998 shares of Class A Common Stock and 62,500 shares of Class B
Common Stock subject to options exercisable within 60 days of the Record
Date.
(10) Includes 191,248 shares of Class A Common Stock and 153,750 shares of Class
B Common Stock subject to options exercisable within 60 days of the Record
Date.
(11) Includes 37,285 shares of Class A Common Stock and 19,786 shares of Class B
Common Stock subject to options exercisable within 60 days of the Record
Date.
(12) Includes 103,498 shares of Class A Common Stock and 66,000 shares of Class
B Common Stock subject to options exercisable within 60 days of the Record
Date.
(13) Includes 1,236,340 shares of Class A Common Stock and 988,811 shares of
Class B Common Stock subject to options exercisable within 60 days of the
Record Date.
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting. If
any other matters properly come before the meeting, it is the intention of the
persons named in the enclosed proxy card to vote the shares they represent as
the Board of Directors may recommend.
BY ORDER OF THE BOARD OF DIRECTORS
Omaha, Nebraska
September 21, 1999
8
<PAGE> 12
ANNEX A
CERTIFICATE OF AMENDMENT TO CERTIFICATE OF INCORPORATION
OF INFOUSA INC.
(INCORPORATED OCTOBER 7, 1991)
infoUSA Inc., a corporation organized and existing under the laws of the
State of Delaware (the "Company"), hereby certifies as follows:
FIRST: The Board of Directors of the Company, at a meeting duly called and
held in accordance with the Bylaws of the Company and Section 141 of the
Delaware General Corporation Law, as amended, duly adopted resolutions proposing
and declaring advisable the amendment to the Certificate of Incorporation of the
Company as set forth below.
SECOND: That Article IV of the Company's Certificate of Incorporation, as
amended to date, is hereby amended in its entirety to read as follows:
"ARTICLE IV. AUTHORIZED STOCK.
The total number of shares of all classes of capital stock which the
corporation shall have authority to issue is three hundred million (300,000,000)
shares which shall be divided into two classes as follows:
(i) Two Hundred Ninety-Five Million (295,000,000) shares of Common
Stock with a par value of one fourth of one cent ($0.0025) per share; and
(ii) Five Million (5,000,000) shares of Preferred Stock with a par
value of one fourth of one cent ($0.0025) per share.
Upon this Certificate of Amendment of Certificate of Incorporation becoming
effective pursuant to the General Corporation Law of the State of Delaware (the
"Effective Time"), and without any further action on the part of the Corporation
or its stockholders, each share of the Corporation's Class A Common Stock and
Class B Common Stock, one fourth of one cent ($.0025) par value, then issued
(including shares held in the treasury of the Corporation), shall be
automatically reclassified, changed and converted into one (1) fully paid and
non-assessable share of Common Stock, one fourth of one cent ($.0025) par value.
Any stock certificate which, immediately prior to the Effective Time, represents
shares of Class A Common Stock or Class B Common Stock, one fourth of one cent
($0.0025) par value, will, from and after the Effective Time, automatically and
without the necessity of presenting the same for exchange, represent that number
of shares of Common Stock equal to the number of shares of Class A Common Stock
or Class B Common Stock represented by such certificate prior to the Effective
Time. As soon as practicable after the Effective Time, the Corporation's
transfer agent shall mail a transmittal letter to each record holder who then
holds shares of Class A or Class B Common Stock, informing such persons of this
reclassification with appropriate instructions on exchanging certificates
representing such shares and other relevant matters.
Each holder of shares of Common Stock of the Company shall be entitled to
one vote for each share of Common Stock held in the name of such holder on the
books of the Company. The holder of each share of a series of Preferred Stock
shall be entitled to such voting rights as may be authorized by the Board of
Directors pursuant to Article V of this Certificate."
THIRD: The undersigned, Vinod Gupta and Fred Vakili further verify that:
A. This Amendment to Certificate of Incorporation has been duly
adopted in accordance with Section 242 of the Delaware General Corporation
Law, as amended.
B. Pursuant to a duly adopted resolution of the Board of Directors of
the Company, a special meeting of the stockholders of the Company was duly
called and held, upon notice in accordance with Section 222 of the Delaware
General Corporation Law, as amended, at which meeting holders of at least
sixty percent (60%) of the outstanding Class A and Class B Common Stock of
the Company voting together as a single
A-1
<PAGE> 13
class, a majority of the outstanding Class A Common Stock of the Company as
of the Record Date voting as a separate class and a majority of the Class B
Common Stock of the Company as of the Record Date voting as a separate
class, constituting the only outstanding securities of the Company entitled
to vote in respect of the amendment to the Certificate of Incorporation of
the Company as set forth above, duly approved said amendment.
THE UNDERSIGNED, being the Chief Executive Officer and Secretary,
respectively, of infoUSA Inc., do make this Amendment to Certificate of
Incorporation, hereby declaring and certifying that this is an act and deed of
the Company and that the facts herein stated are true, and accordingly have
hereunto set their hands this day of , 1999.
------------------------------------
Vinod Gupta,
Chief Executive Officer
------------------------------------
Fred Vakili,
Secretary
A-2
<PAGE> 14
INFOUSA INC.
SPECIAL MEETING OF STOCKHOLDERS
OCTOBER 21, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
CLASS A COMMON STOCK
The undersigned stockholder of infoUSA Inc., a Delaware corporation, hereby
acknowledges receipt of the Notice of Special Meeting of Stockholders and Proxy
Statement, each dated September 22, 1999, and hereby appoints Vinod Gupta and
Fred Vakili, and each of them, with full power of substitution, as Proxy or
Proxies, to vote all shares of the Class A Common Stock of the undersigned at
the Special Meeting of Stockholders of infoUSA Inc. to be held on October 21,
1999, and at any adjournments thereof, upon the Company's proposals set forth on
this form of proxy and described in the Proxy Statement, and in their discretion
with respect to such other matters as may be properly brought before the meeting
or any adjournments thereof.
1. Proposal to (i) authorize a new class of common stock, designated as Common
Stock (the "Reclassified Common Stock"), (ii) combine and reclassify the
Company's Class A and Class B Common Stock into the Reclassified Common Stock
on a one-for-one basis, and (iii) establish the rights, powers and
limitations of the Reclassified Common Stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PLEASE SIGN AND DATE ON REVERSE SIDE OF THIS PROXY.
Either of such Proxies or substitutes shall have and may exercise all of the
powers of said proxies hereunder.
Dated:
--------------------------
--------------------------------
(Signature)
--------------------------------
(Signature)
(This proxy should be marked,
dated, signed by the stockholder
or stockholders exactly as the
stockholder's or stockholders'
names appear hereon, and
returned promptly in the
enclosed envelope. Persons
signing in a fiduciary or
representative capacity should
so indicate. If shares are held
by joint tenants, as community
property or otherwise by more
than one person, all should
sign.)
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS INDICATED, WILL BE
VOTED FOR THE PROPOSAL LISTED ABOVE AND AS SAID PROXIES DEEM ADVISABLE ON SUCH
OTHER MATTERS AS MAY COME BEFORE THE MEETING.
<PAGE> 15
INFOUSA INC.
SPECIAL MEETING OF STOCKHOLDERS
OCTOBER 21, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
CLASS B COMMON STOCK
The undersigned stockholder of infoUSA Inc., a Delaware corporation, hereby
acknowledges receipt of the Notice of Special Meeting of Stockholders and Proxy
Statement, each dated September 22, 1999, and hereby appoints Vinod Gupta and
Fred Vakili, and each of them, with full power of substitution, as Proxy or
Proxies, to vote all shares of the Class B Common Stock of the undersigned at
the Special Meeting of Stockholders of infoUSA Inc. to be held on October 21,
1999, and at any adjournments thereof, upon the Company's proposals set forth on
this form of proxy and described in the Proxy Statement, and in their discretion
with respect to such other matters as may be properly brought before the meeting
or any adjournments thereof.
1. Proposal to (i) authorize a new class of common stock, designated as Common
Stock (the "Reclassified Common Stock"), (ii) combine and reclassify the
Company's Class A and Class B Common Stock into the Reclassified Common Stock
on a one-for-one basis, and (iii) establish the rights, powers and
limitations of the Reclassified Common Stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PLEASE SIGN AND DATE ON REVERSE SIDE OF THIS PROXY.
Either of such Proxies or substitutes shall have and may exercise all of the
powers of said proxies hereunder.
Dated:
-------------------------
-------------------------------
(Signature)
-------------------------------
(Signature)
(This proxy should be marked,
dated, signed by the
stockholder or stockholders
exactly as the stockholder's or
stockholders' names appear
hereon, and returned promptly
in the enclosed envelope.
Persons signing in a fiduciary
or representative capacity
should so indicate. If shares
are held by joint tenants, as
community property or otherwise
by more than one person, all
should sign.)
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS INDICATED, WILL BE
VOTED FOR THE PROPOSAL LISTED ABOVE AND AS SAID PROXIES DEEM ADVISABLE ON SUCH
OTHER MATTERS AS MAY COME BEFORE THE MEETING.
