<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.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 2, 1999
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of Stockholders of
infoUSA Inc., a Delaware corporation (the "Company"), will be held on May 2,
1999, at 4:00 p.m. local time, at the Marriott Hotel, 10220 Regency Circle,
Omaha, Nebraska, for the following purposes as more fully described in the Proxy
Statement accompanying this Notice:
1. To elect three directors to the Board of Directors for a term of
three years;
2. To approve an amendment to the 1997 Class A Common Stock Option
Plan reserving an additional 3,000,000 shares of the Company's Common Stock
for issuance thereunder;
3. To ratify the appointment of KPMG Peat Marwick LLP as the Company's
independent public accountants for the fiscal year ending December 31,
1999; and
4. 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 March 22, 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
April 5, 1999
<PAGE> 3
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 its 1999 Annual Meeting of Stockholders
to be held on May 2, 1999, at 4:00 p.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 Annual Meeting of Stockholders. The Annual Meeting
will be held at the Marriott Hotel, 10220 Regency Circle, Omaha, Nebraska. The
Company's principal executive offices are 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 April 5, 1999,
to all stockholders entitled to vote at the meeting.
RECORD DATE; OUTSTANDING SHARES
Stockholders of record at the close of business on March 22, 1999 (the
"Record Date"), are entitled to receive notice of and vote at the meeting. On
the Record Date, 24,228,875 shares of the Company's Class A Common Stock, $.0025
par value, were issued and outstanding. On the Record Date, 23,907,875 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 "Election of Directors -- 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 and delivering 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. 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. In the election of directors, each stockholder
will be entitled to vote for three nominees and the three nominees with the
greatest number of votes will be elected. For all proposals at this Annual
Meeting, the votes of holders of Class A Common Stock and Class B Common Stock
will be counted together as a single class.
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.
DEADLINES FOR RECEIPT OF STOCKHOLDER PROPOSALS
Stockholder proposals that are intended to be presented at the Company's
2000 Annual Meeting must be received by the Company no later than December 6,
1999 to 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.
1
<PAGE> 4
PROPOSAL ONE
ELECTION OF DIRECTORS
GENERAL
The Company's Board of Directors is divided into three classes, two of
which have three directors and one of which has two directors, with the term of
office of one class expiring each year. The terms of office of directors Paul A.
Goldner, Gautam Gupta and George J. Kubat expire at the 1999 Annual Meeting. The
terms of office of directors Vinod Gupta, George F. Haddix and Jon D. Hoffmaster
expire at the 2000 Annual Meeting and the terms of office of directors Harold W.
Andersen and Elliot S. Kaplan expire at the 2001 Annual Meeting. The Company is
proposing that stockholders elect three directors at the 1999 Annual Meeting.
VOTE REQUIRED
The three nominees receiving the highest number of affirmative votes of the
shares present in person or represented by proxy at the Annual Meeting and
entitled to vote on the election of directors shall be elected to the Board of
Directors. Votes withheld from any director are counted for purposes of
determining the presence or absence of a quorum, but have no legal effect under
Delaware law. While there is no definitive statutory or case law authority in
Delaware as to the proper treatment of abstentions and broker non-votes in the
election of directors, the Company believes that both abstentions and broker
non-votes should be counted for purposes of whether a quorum is present at the
Annual Meeting. In the absence of precedent to the contrary, the Company intends
to treat abstentions and broker non-votes with respect to the election of
directors in this manner.
Unless otherwise instructed, the proxy holders will vote the proxies
received by them for the Company's three nominees named below, two of whom are
presently directors of the Company. If any nominee of the Company is unable or
declines to serve as a director at the time of the Meeting, the proxies will be
voted for any nominee who is designated by the present Board of Directors to
fill the vacancy. It is not expected that any nominee will be unable or will
decline to serve as a director. THE BOARD OF DIRECTOR RECOMMENDS THAT
STOCKHOLDERS VOTE "FOR" THE NOMINEES LISTED BELOW.
NOMINEES FOR ELECTION AT THE ANNUAL MEETING
The names of the nominees, and certain information about them, are set
forth below:
<TABLE>
<CAPTION>
DIRECTOR
NAME OF NOMINEE AGE POSITION/PRINCIPAL OCCUPATION SINCE
- --------------- --- ----------------------------- --------
<S> <C> <C> <C>
Paul G. Goldner....................... 65 Director; Consultant to the Company 1997
Ben Nelson............................ 57 Director; Former Governor of Nebraska 1999
George J. Kubat(1).................... 53 Director; President and Chief
Executive Officer of Phillips
Manufacturing Co. 1995
</TABLE>
- ---------------
(1) Member of the Audit Committee
Paul Goldner has served as a director of and consultant to the Company
since the acquisition of Database America ("DBA") in February 1997. He was a
founder of DBA, and served as its Chairman and Chief Executive Officer from 1973
to February 1997. Mr. Goldner holds a B.S. in Management Engineering from the
Rensselaer Polytechnic Institute. In connection with its acquisition of DBA, the
Company agreed to nominate Mr. Goldner to be re-elected to the Board when his
current term expires at the Annual Meeting.
Ben Nelson has served as a director of the Company since March 1999.
Governor Nelson is the former governor of Nebraska, first elected in 1990 and
then re-elected to a second term in 1994. Governor Nelson holds a B.A. and M.A.
in Philosophy, and a J.D. from the University of Nebraska.
2
<PAGE> 5
George Kubat has served as a director of the Company since May 1995. Since
November 1992, Mr. Kubat has served as President and Chief Executive Officer of
Phillips Manufacturing Co., a dry wall equipment and supply business
("Phillips"). Prior to joining Phillips, Mr. Kubat was with Coopers & Lybrand
L.L.P. for over 16 years. Mr. Kubat is also a director of America First
Companies L.L.C. and SITEL Corporation. Mr. Kubat holds a B.S. in Business
Administration and a J.D. from Creighton University.
INCUMBENT DIRECTORS WHOSE TERMS OF OFFICE
CONTINUE AFTER THE ANNUAL MEETING
The names and certain other information about the Directors whose terms of
office continue after the Annual Meeting are set forth below:
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITION/PRINCIPAL OCCUPATION SINCE
---- --- ----------------------------- --------
<S> <C> <C> <C>
Vinod Gupta........................... 52 Chairman of the Board and Chief 1972
Executive Officer
Harold W. Andersen(2)(1).............. 75 Director; Contributing Editor to Omaha 1993
World Herald and Retired Publisher
of Omaha World Herald Company
Elliot S. Kaplan(2)................... 62 Director; Senior Partner in law firm 1988
of Robins, Kaplan, Miller & Ciresi
L.L.P.
George F. Haddix(2)................... 60 Director; Individual Investor 1995
Jon D. Hoffmaster..................... 50 Director; Private Investor 1978
</TABLE>
- ---------------
(1) Member of Audit Committee
(2) Member of Compensation Committee
Vinod Gupta is the founder of the Company, has been Chairman of the Board
of the Company since its incorporation in 1972 and was named Chief Executive
Officer effective August 1, 1998. Mr. Gupta previously served as Chief Executive
Officer of the Company from the time of its incorporation in 1972 until
September 1997. Mr. Gupta holds a B.S. in Engineering from the Indian Institute
of Technology, Kharagpur, India, and an M.S. in Engineering and an M.B.A. from
the University of Nebraska.
Harold Andersen has served as director of the Company since September 1993.
He is the former President, Chief Executive Officer, Chairman and Publisher of
the Omaha World Herald Company, a newspaper publishing company. Mr. Andersen is
currently a Contributing Editor to the Omaha World Herald. Mr. Andersen holds a
B.S. in Liberal Arts from the University of Nebraska.
Elliot Kaplan has served as director of the Company since May 1988. He is a
name partner and former Chairman of the Executive Board of the law firm of
Robins, Kaplan, Miller & Ciresi L.L.P. and has practiced law continuously with
that firm since 1962. Mr. Kaplan is also a director and officer of Best Buy Co.,
Inc., and a director of The Franklin Corporation. Mr. Kaplan holds a B.A. in
Business Administration and a J.D. from the University of Minnesota.
George Haddix has served as a director of the Company since March 1995.
Since December 1997, Mr. Haddix has been an individual investor. From November
1994 to December 1997, Mr. Haddix has served as President of CSG Holdings, Inc.
and CSG Systems International, Inc., companies providing software and
information services to the communications industry. Mr. Haddix is a director of
CSG Systems International, Inc. From 1989 until joining CSG in November 1994,
Mr. Haddix was an individual investor. Mr. Haddix holds a B.A. from the
University of Nebraska, an M.A. from Creighton University and a Ph.D. from Iowa
State University, all in Mathematics.
Jon Hoffmaster has served as a director of the Company since 1978, as Vice
Chairman of the Board of the Company from 1993 to December 1995 and from April
1998 to December 1998, as Chief Financial
3
<PAGE> 6
Officer of the Company from July 1992 to July 1995, and as President and Chief
Operating Officer of the Company from September 1991 to September 1993. Mr.
Hoffmaster has served as a consultant to the Company from January 1996 to April
1998. Mr. Hoffmaster is also a director of Bridges Investment Fund. Mr.
Hoffmaster holds a B.A. in Finance from the University of Nebraska.
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 each
of the executive officers named in the table under "Executive
Compensation -- Summary Compensation Table," (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).................................... 9,835,337 10,010,054 40.8
5711 South 86th Circle
Omaha, Nebraska 68127
FMR Corp. ........................................ 1,915,600 1,985,000 8.3
82 Devonshire Street
Boston, Massachusetts 02109
Wanger Asset Management........................... 1,892,500 1,763,600 7.4
227 West Monroe Street, Suite #3000
Chicago, IL 60606-5016
Paul A. Goldner(2)................................ 1,338,479 1,273,089 5.3
100 Paragon Drive
Montvale, New Jersey 07645
Jon D. Hoffmaster(3).............................. 519,833 526,000 2.2
George Haddix(4).................................. 56,833 27,500 *
Scott Dahnke...................................... 0 0 *
Harold W. Andersen(5)............................. 23,133 27,300 *
Gautam Gupta(6)................................... 11,035 11,035 *
Elliot S. Kaplan(7)............................... 77,673 91,840 *
George Kubat(8)................................... 41,633 29,800 *
Ben Nelson........................................ 0 0 *
Monica Messer(9).................................. 198,850 192,184 *
William Chasse(10)................................ 132,541 116,875 *
William Kerrey(11)................................ 44,466 31,133 *
Al Ambrosino(12).................................. 82,666 66,000 *
Fred Vakili(13)................................... 134,108 106,275 *
Stormy Dean(14)................................... 1,938 1,283 *
All directors and executive officers as a group
(16 persons)(15)................................ 12,498,525 12,510,368 53.6
</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 trustee and in which he has no
beneficial interest. Includes 589,583 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 578,580 shares of Class A Common Stock
and 563,580 shares of Class B Common Stock held in irrevocable trusts for
the benefit of Mr. Goldner's children for which
4
<PAGE> 7
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 161,833 shares of Class A Common Stock and 156,000 shares of Class
B Common Stock subject to options exercisable within 60 days of the Record
Date.
(4) Includes 8,833 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.
(5) Includes 8,833 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 6,000 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.
(7) Includes 11,833 shares of Class A Common Stock and 16,000 shares of Class B
Common Stock subject to options exercisable within 60 days of the Record
Date.
(8) Includes 26,833 shares of Class A Common Stock and 21,000 shares of Class B
Common Stock subject to options exercisable within 60 days of the Record
Date.
(9) Includes 69,166 shares of Class A Common Stock and 52,500 shares of Class B
Common Stock subject to options exercisable within 60 days of the Record
Date.
(10) Includes 132,541 shares of Class A Common Stock and 115,875 shares of Class
B Common Stock subject to options exercisable within 60 days of the Record
Date.
(11) Includes 30,498 shares of Class A Common Stock and 17,160 shares of Class B
Common Stock subject to options exercisable within 60 days of the Record
Date.
(12) Includes 82,666 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 108,108 shares of Class A Common Stock and 104,775 shares of Class
B Common Stock subject to options exercisable within 60 days of the Record
Date.
(14) Includes 1,916 shares of Class A Common Stock and 1,250 shares of Class B
Common Stock subject to options exercisable within 60 days of the Record
Date.
(15) Includes 1,313,638 shares of Class A Common Stock and 1,167,560 shares of
Class B Common Stock subject to options exercisable within 60 days of the
Record Date.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of fifteen meetings
during 1998. The Board of Directors has an Audit Committee and a Compensation
Committee. The Board does not have a nominating or any committee performing
similar functions.
The Audit Committee, which currently consists of directors Harold W.
Andersen, George Kubat and Gautam Gupta, met three times in 1998. This committee
is primarily responsible for approving the services performed by the Company's
independent auditors and for reviewing and evaluating the Company's accounting
principles and its system of internal accounting controls.
The Compensation Committee, which currently consists of directors Harold W.
Andersen, George F. Haddix and Elliot S. Kaplan, met two times during 1998. This
committee has been delegated the duties of administering existing and future
stock and option plans of the Company, including the Company's 1992 Stock Option
Plan and the Company's 1997 Class A Common Stock Option Plan, and establishing
the compensation of the Company's executive officers.
No director attended fewer than 75% of the aggregate of the total number of
meetings of the Board of Directors and the total number of meetings held by all
committees of the Board of Directors on which he served.
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<PAGE> 8
BOARD COMPENSATION
During 1998, non-employee directors were compensated at a rate of $2,500
per Board meeting attended. Employee directors do not receive compensation for
their service on the Board. In addition, during 1998, directors Harold W.
Andersen, George Haddix, Jon D. Hoffmaster, Elliot S. Kaplan and George Kubat
were each granted an option to purchase 20,000 shares of Class A Common Stock at
an exercise price of $12.00 per share (the fair market value on the date of
grant). Furthermore, Mr. Hoffmaster was granted an additional option to purchase
50,000 shares of Class A Common Stock at an exercise price of $13.00 per share
(the fair market value on the date of grant).
PROPOSAL TWO
AMENDMENT TO THE 1997 CLASS A COMMON STOCK OPTION PLAN
RESERVING AN ADDITIONAL 3,000,000 SHARES OF
THE COMPANY'S CLASS A COMMON STOCK
The stockholders are being asked to approve an amendment to the 1997 Class
A Common Stock Option Plan (the "1997 Plan") reserving an additional 3,000,000
shares of the Company's Class A Common Stock for issuance thereunder. The Board
of Directors believes that this amendment to the 1997 Plan is important to the
continued functioning of the 1997 Plan, which the Board believes is an effective
means of motivating and encouraging the continued employment of the employees of
the Company. In the past several years, the labor markets in which the Company
operates have become more intensely competitive, and recruiting and retaining
the highly skilled employees the Company needs has become increasingly
difficult. As a result, the Board believes that the proposed increase is
necessary to allow grants of new options to existing employees whose present
options are becoming fully vested, and to recruit new employees or increase
existing employees' equity stakes in the Company. For a description of the 1997
Plan, see "Description of the 1997 Plan," elsewhere in this Proxy Statement.
As of the Record Date, and without giving effect to this Proposal 2,
2,000,000 shares have been reserved for issuance under the 1997 Plan, of which
none have been issued pursuant to option exercises, 304,768 are subject to
outstanding options and 805,334 are available for grant. Proposal 2 was adopted
by the Board of Directors on January 25, 1999, subject to stockholder approval.
There are approximately 70 employees of the Company who are eligible to
participate in the 1997 Plan.
As of the Record Date, under the Company's other 1992 Stock Option Plan,
1,663,805 shares of Class A Common Stock and 1,663,805 shares of Class B Common
Stock are subject to outstanding but unexercised options.
Directors of the Company may benefit from adoption of this amendment, and
to that extent may have a conflict of interest in recommending the amendment.
Because approval of this proposal requires the affirmative vote of the majority
of shares of Common Stock present in person or represented by proxy at the
Annual Meeting and entitled to vote on the proposal, abstentions will have the
same effect as a vote against the proposal, and broker non-votes will have no
effect on the outcome of the proposal. THE BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR" PROPOSAL 2.
PROPOSAL THREE
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Management has selected KPMG Peat Marwick LLP, independent accounts, to
audit the books, records and accounts of the Company for the current fiscal year
ending December 31, 1999. KPMG Peat Marwick LLP has audited the Company's
financial statements since October 14, 1998.
The affirmative vote of the holders of a majority of the votes cast at the
meeting will be required to approve and ratify the Board's selection of KPMG
Peat Marwick LLP. Abstentions and broker non-votes will be counted as present
for the purpose of establishing a quorum, but will have no effect on the outcome
of the
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<PAGE> 9
proposal. THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" APPROVAL AND
RATIFICATION OF SUCH SELECTION. In the event of a negative vote on such
ratification, the Board of Directors will reconsider its selection. THE BOARD OF
DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 3.
A representative of KPMG Peat Marwick is expected to be available at the
Annual Meeting to make a statement if such representative desires to do so and
to respond to appropriate questions.
RECENT CHANGES IN ACCOUNTANTS
On October 1, 1998, PricewaterhouseCoopers LLP, the Company's independent
accountants (the "Former Accountants") resigned from their engagement as
principal accountants for the Company due to its inability to satisfy the
"independence" requirement. The Former Accountants' resignation was required
because of the promotion of the son-in-law of one of the Company's directors to
an officer position at PricewaterhouseCoopers' Omaha office.
The reports of the Former Accountants for the last two fiscal years
contained no adverse opinion, disclaimer of opinion or opinion that was
qualified or modified as to uncertainty, audit scope or accounting principles.
The decision to change accountants was not recommended or approved by the
Company's board of directors, nor by its audit committee.
In the last two fiscal years and through October 1, 1998, there have been
no disagreements with the Former Accountants on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which, if not resolved to the satisfaction of the Former Accountants,
would have caused them to make reference thereto in their report on the
financial statements of such years.
In the last two fiscal years and since the completion of the last fiscal
year, none of the events listed in paragraphs (A) through (D) of Item
304(a)(1)(v) of Regulation S-K occurred except as described in the following
paragraph.
The Form 10-Q, filed by the Company for the period ended June 30, 1998,
disclosed that the Company was in the process of performing a valuation analysis
of its acquisition of JAMI and any changes to its preliminary estimates of the
assets acquired, liabilities assumed and goodwill and other intangibles recorded
as part of the purchase, including an assessment of purchased in-process
research and development costs would be recorded in the third quarter of 1998.
The Former Accountants indicated that if such in-process research and
development charge was material, the financial statements for the period ended
June 30, 1998 would require restatement. Consistent with its quarterly report on
Form 10-Q for the quarter ended June 30, 1998, the Company does not expect that
any such in-process research and development costs will be material. In
addition, as a result of recent financial management resignations, the Former
Accountants advised the Company that it intended to expand the scope of its
audit testing for the fiscal year 1998 audit, and management is in agreement
with this advice.
On October 12, 1998, the Company engaged the services of KPMG Peat Marwick
LLP (the "New Accountants") to serve as the Company's principal accountants for
the fiscal year ending December 31, 1998. In September, 1998, the Company
engaged the New Accountants for purposes of allocating the cost of the
acquisition to certain assets and liabilities acquired by the Company from JAMI
Marketing in May 1998. The Company subsequently determined that there was no
in-process research and development charge in connection with the acquisition.
The New Accountants had expressed in writing their preliminary view that there
should not be a material charge for in process research and development costs as
a result of the JAMI Marketing transaction. The Company's Former Accountants,
were not consulted by the Company regarding the allocation of the acquisition
costs.
During its last two fiscal years and through October 1, 1998, the Company
had not consulted with the New Accountants on either the application of
accounting principles to a specified transaction, or any matter that was the
subject of a reportable event discussed above.
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<PAGE> 10
The Company requested that PricewaterhouseCoopers LLP and KPMG Peat Marwick
LLP furnish it with letters stating any disagreements that either firm had with
the above statements. Such letter from the Former Accountants was filed as an
exhibit to the Company's amended current report on Form 8-K filed with the SEC
on October 14, 1998. No such letter was submitted by the New Accountants.
OTHER INFORMATION REGARDING THE COMPANY
PERFORMANCE GRAPH
The following Performance Graph compares the cumulative total return to
stockholders of the Company's Common Stock from December 31, 1993 to December
31, 1998 to the cumulative total return over such period of (i) The Nasdaq Stock
Market (U.S. Companies) Index and (ii) Hambrecht & Quist Products and Services
Index. The information contained in the Performance Graph shall not be deemed to
be "soliciting material" or to be "filed" with the Securities and Exchange
Commission (the "SEC"), nor shall such information be incorporated by reference
into any future filing under the Securities Act of 1933, as amended (the
"Securities Act"), or the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"), except to the extent that the Company specifically incorporates
it by reference into any such filing.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG INFOUSA INC., NASDAQ STOCK MARKET INDEX
AND HAMBRECHT & QUIST PRODUCTS AND SERVICES INDEX
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered infoUSA Class A** infoUSA Class B** NASDAQ (U.S. Companies) Hambrecht & Quist Products & Services
- -------------------- ----------------- ----------------- ----------------------- -------------------------------------
<S> <C> <C> <C> <C>
31-Dec-93 100 100 100 100
31-Dec-94 101 101 112 141
31-Dec-95 159 159 159 211
31-Dec-96 183 183 195 262
31-Dec-97 173 169 239 336
31-Dec-98 80 86 336 478
</TABLE>
- ---------------
* Assumes $100 invested on December 31, 1993 in infoUSA Inc. Common Stock,
Nasdaq Stock Market (U.S. Companies) Index and Hambrecht & Quist Products and
Services Index.
** On October 3, 1997, the Company reclassified its existing Common Stock as
Class B Common Stock, authorized a new class of Common Stock designated Class
A Common Stock (together, the "Reclassification") and declared a dividend of
one share of Class A Common Stock for each share of Class B Common Stock
outstanding (the "Stock Dividend"). The Stock Dividend had the effect of a
two-for-one stock split. The information set forth for periods prior to
October 10, 1997, the first day that the Class A Common Stock and Class B
Common Stock traded separately, has been adjusted to give effect to the
Reclassification and the Stock Dividend. The information set forth below from
and after October 10, 1997 is actual historical information.
8
<PAGE> 11
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE.
The following table sets forth the compensation paid by the Company for
each of the three previous years for the period ending December 31 to persons
who served as Chief Executive Officer during the last fiscal year and each of
the other four most highly compensated executive officers of the Company
(together, the "Named Executive Officers"):
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION AWARD
-----------------------------------
SECURITIES
UNDERLYING
OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) (#)(1) COMPENSATION
- --------------------------- ---- --------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Vinod Gupta(2).................. 1998 48,000(3) -- --
Chief Executive Officer 1997 48,000(3) -- 140,000(4) --
1996 48,000(3) -- 1,800,000(5) --
Scott Dahnke(6)................. 1998 297,835 187,500 -- 52,910(8)
Chief Executive Officer 1997 93,750 250,000(7) 500,000(5) --
1996 -- -- -- --
William Chasse.................. 1998 260,000 80,833 100,000(4)
Senior Vice President 1997 240,000 -- -- --
1996 155,000 1,525 260,000(5) --
William Kerrey.................. 1998 200,000 74,380 40,000(4)
Senior Vice President 1997 180,000 86,548 20,000(5) --
1996 157,500 79,048 -- --
Monica Messer................... 1998 260,000 80,833 100,000(4)
Executive Vice President and 1997 240,000 -- 250,000(5) --
Chief
Information Officer 1996 208,000 -- -- --
Ed Mallin....................... 1998 225,000 96,167 60,000(4)
Senior Vice President 1997 216,000 7,500 20,000(5)
1996 208,000 11,325 --
</TABLE>
- ---------------
(1) Except as otherwise expressly noted, each of the figures indicated below
includes options to purchase equal numbers of shares of the Company's Class
A Common Stock and Class B Common Stock pursuant to options to purchase
Common Stock granted under the 1992 Stock Option Plan prior to the
Reclassification and the Stock Dividend.
(2) Vinod Gupta has served as Chief Executive Officer from the inception of the
Company until September 1997, and from August 1998 to the present.
(3) Excludes certain amounts paid to Annapurna Corporation for consulting
services and related expenses reimbursed in connection with acquisition
activity conducted by the Company during 1998, 1997 and 1996, respectively
(see "Certain Transactions" herein). Annapurna Corporation is 100% owned by
Vinod Gupta. Vinod Gupta has agreed not to be eligible for cash bonuses.
(4) This figure represents an option to purchase shares of the Company's Class A
Common Stock under the 1997 Class A Common Stock Option Plan.
(5) This figure represents options to purchase an equal number of Shares of
Class A Common Stock and Class B Common Stock under the 1992 Stock Option
Plan.
(6) Scott Dahnke was hired as Chief Executive Officer in October 1997 and
resigned from that position in August 1998.
(7) Includes $250,000 paid to Scott Dahnke as a signing bonus.
(8) Includes $52,910 paid to Scott Dahnke in connection with his relocation
expenses.
9
<PAGE> 12
OPTION GRANTS IN THE LAST FISCAL YEAR.
The following table sets forth each grant of stock options made during the
year ended December 31, 1998 to each of the Named Executive Officers.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
-------------------------------------------------- ANNUAL RATES OF
% OF TOTAL STOCK PRICE
NUMBER OF OPTIONS APPRECIATION FOR
SECURITIES GRANTED TO EXERCISE OPTION TERM($)(2)
UNDERLYING EMPLOYEES IN PRICE EXPIRATION -----------------
GRANTED(1) FISCAL YEAR ($/SHARE) DATE 5% 10%
---------- ------------ --------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Vinod Gupta.......... -- -- -- -- -- --
Scott Dahnke......... -- -- -- -- -- --
William Chasse....... 50,000 4.31 10.3750 01/02/2003 176,425 400,247
50,000 4.31 13.0000 07/20/2003 221,062 501,515
Bill Kerrey.......... 40,000 3.45 10.3750 01/02/2003 141,140 320,198
Monica Messer........ 50,000 4.31 10.3750 01/02/2003 176,425 400,247
50,000 4.31 13.0000 07/20/2003 221,062 501,515
Edward Mallin........ 60,000 5.17 10.3750 01/02/2003 211,710 480,297
</TABLE>
- ---------------
(1) Options indicated vest and become exercisable in four equal annual
installments on the first four anniversaries of the date of grant based upon
the optionee continuing to be employed by the Company. Each of the figures
indicated below represents options to purchase shares of the Company's Class
A Common Stock pursuant to options to purchase Common Stock granted under
the 1997 Class A Common Stock Option Plan.
(2) Potential realizable value is based on an assumption that the stock price
appreciates at the annual rate shown (compounded annually) from the date of
grant until the end of the option term. These numbers are calculated based
on the requirements promulgated by the Securities and Exchange Commission
and do not reflect the Company's estimate of future stock price growth.
OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
The following table sets forth, for each of the Named Executive Officers,
the value realized on exercised options and the year-end value of unexercised
options:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
ACQUIRED ON VALUE AT YEAR-END(#): AT YEAR-END($)(1):
NAME EXERCISE REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ----------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Vinod Gupta.......... 0 0 755,000/1,185,000 0/0
Scott Dahnke......... 0 0 0/0 0/0
William Chasse....... 14,000 115,500 231,750/248,750 17,579/0
Bill Kerrey.......... 6,428 3,214 29,318/64,004 2,747/0
Monica Messer........ 0 0 92,500/287,500 21,975/0
Edward Mallin........ 20,000 189,100 48,496/79,504 21,975/0
</TABLE>
- ---------------
(1) Market value of underlying securities at year-end minus the exercise price.
10
<PAGE> 13
DESCRIPTION OF THE 1997 CLASS A COMMON STOCK OPTION PLAN
General. The purpose of the Plan is to attract and retain the best
available personnel for positions of substantial responsibility with the
Company, to provide additional incentive to the employees and consultants of the
Company and to promote the success of the Company's business. Options granted
under the Plan may be either "incentive stock options," as defined in Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"), or
nonstatutory stock options.
Administration. The Plan may be administered by the Board of Directors or a
committee of the Board (the "Administrator"), which Administrator shall, in the
case of options intended to qualify as "performance-based compensation" within
the meaning of Section 162(m) of the Code, consist of two or more "outside
directors" within the meaning of Section 162(m) of the Code. The Administrator
has the power to determine the terms of the options granted, including the
exercise price, the number of shares subject to each option, the exercisability
thereof, and the form of consideration payable upon such exercise. In addition,
the Administrator has the authority to amend, suspend or terminate the Plan,
provided that no such action may affect any share of the Company's Class A
Common Stock previously issued and sold or any option previously granted under
the Plan.
Eligibility; Limitations. Nonstatutory stock options may be granted under
the Plan to directors, employees and consultants of the Company and any parent
or subsidiary of the Company. Incentive stock options may be granted only to
employees. The Administrator, in its discretion, selects the directors,
employees and consultants to whom options may be granted, the time or times at
which such options shall be granted, and the number of shares subject to each
such grant.
Section 162(m) of the Code places limits on the deductibility for federal
income tax purposes of compensation paid to certain executive officers of the
Company. In order to preserve the Company's ability to deduct the compensation
income associated with options granted to such persons, the Plan provides that
no employee may be granted, in any fiscal year of the Company, options and stock
purchase rights to purchase more than 900,000 shares of Class A Common Stock (as
appropriately adjusted for changes in the capitalization of the Company).
Terms and Conditions of Options. Each option is evidenced by a stock option
agreement between the Company and the optionee, and is subject to the following
additional terms and conditions:
(a) Exercise Price. The Administrator determines the exercise price of
options at the time the options are granted. The exercise price of an
incentive stock option may not be less than 100% of the fair market value
of the Class A Common Stock on the date such option is granted; provided,
however, the exercise price of an incentive stock option granted to a 10%
stockholder may not be less than 110% of the fair market value of the Class
A Common Stock on the date such option is granted. The fair market value of
the Class A Common Stock is generally determined with reference to the
closing sale price for the Class A Common Stock (or the closing bid if no
sales were reported) on the last market trading day prior to the date the
option is granted.
(b) Exercise of Option; Form of Consideration. The Administrator
determines when options become exercisable, and may in its discretion,
accelerate the vesting of any outstanding option. Stock options granted
under the Plan generally vest over four (4) years and become exercisable
over five (5) years. The means of payment for shares issued upon exercise
of an option is specified in each option agreement. The Plan permits
payment to be made by cash, check, promissory note, other shares of Class A
Common Stock of the Company (with some restrictions), cashless exercises, a
reduction in the amount of any Company liability to the optionee, any other
form of consideration permitted by applicable law, or any combination
thereof.
(c) Term of Option. The term of an incentive stock option may be no
more than ten (10) years from the date of grant; provided that in the case
of an incentive stock option granted to a 10% stockholder, the term of the
option may be no more than five (5) years from the date of grant. No option
may be exercised after the expiration of its term.
11
<PAGE> 14
(d) Termination of Employment. If an optionee's employment or
consulting relationship terminates for any reason (other than death or
disability), then all options held by the optionee under the Plan expire on
the earlier of (i) the date set forth in his or her notice of grant or, in
the absence thereof, three (3) months after the date of termination or (ii)
the expiration date of such option. To the extent the option is exercisable
at the time of such termination, the optionee may exercise all or part of
his or her option at any time before termination.
(e) Death or Disability. If an optionee's employment or consulting
relationship terminates as a result of death or disability, then all
options held by such optionee under the Plan expire on the earlier of (i)
the date set forth in his or her notice of grant or, in the absence
thereof, 12 months from the date of such termination or (ii) the expiration
date of such option. The optionee (or the optionee's estate or the person
who acquires the right to exercise the option by bequest or inheritance),
may exercise all or part of the option at any time before such expiration
to the extent that the option was exercisable at the time of such
termination.
(f) Nontransferability of Options. Unless determined by the
Administrator, options granted under the Plan are not transferable other
than by will or the laws of descent and distribution, and may be exercised
during the optionee's lifetime only by the optionee.
(g) Other Provisions. The stock option agreement may contain other
terms, provisions and conditions not inconsistent with the Plan as may be
determined by the Administrator.
Adjustments Upon Changes in Capitalization. In the event that the Class A
Common Stock of the Company changes by reason of any stock split, reverse stock
split, stock dividend, combination, reclassification or other similar change in
the capital structure of the Company effected without the receipt of
consideration, appropriate adjustments shall be made in the number and class of
shares of stock subject to the Plan, the number and class of shares of stock
subject to any option outstanding under the Plan, and the exercise price of any
such outstanding option.
In the event of a liquidation or dissolution, any unexercised options will
terminate. The Administrator may, in its discretion provide that each optionee
shall have the right to exercise all of the optionee's options, including those
not otherwise exercisable, until the date ten (10) days prior to the
consummation of the liquidation or dissolution, or that any rights of repurchase
in the Company with respect to shares purchased upon exercise of an option shall
lapse provided the proposed dissolution or liquidation takes place at the time
and in the manner anticipated. In connection with any merger, consolidation,
acquisition of assets or like occurrence involving the Company, each outstanding
option shall be assumed or an equivalent option substituted by the successor
corporation. If the successor corporation refuses to assume the options or to
substitute substantially equivalent options, the optionee shall have the vested
right to exercise the option as to all the optioned stock, including shares not
otherwise vested or exercisable. In such event, the Administrator shall notify
the optionee that the option is fully exercisable for fifteen (15) days from the
date of such notice and that the option terminates upon expiration of such
period.
Amendment and Termination of the Plan. The Board may amend, alter, suspend
or terminate the Plan, or any part thereof, at any time and for any reason.
However, the Company shall obtain stockholder approval for any amendment to the
Plan to the extent necessary to comply with Rule 16b-3, Section 162(m) and
Section 422 of the Code, or any similar rule or statute. No such action by the
Board or stockholders may alter or impair any option previously granted under
the Plan without the written consent of the optionee. Unless terminated earlier,
the Plan shall terminate ten years from the date of its approval by the
stockholders or the Board, whichever is earlier.
Federal Income Tax Consequences
Incentive Stock Options. An optionee who is granted an incentive stock
option does not recognize taxable income at the time the option is granted or
upon its exercise, although the exercise may subject the optionee to the
alternative minimum tax. Upon a disposition of the shares more than two years
after grant of the option and one year after exercise of the option, any gain or
loss is treated as long-term capital gain or loss.
12
<PAGE> 15
If these holding periods are not satisfied, the optionee recognizes ordinary
income at the time of disposition equal to the difference between the exercise
price and the lower of (i) the fair market value of the shares at the date of
the option exercise or (ii) the sale price of the shares. Any gain or loss
recognized on such a premature disposition of the shares in excess of the amount
treated as ordinary income is treated as long-term or short-term capital gain or
loss, depending on the holding period. A different rule for measuring ordinary
income upon such a premature disposition may apply if the optionee is also an
officer, director, or 10% stockholder of the Company. The Company is entitled to
a deduction in the same amount as the ordinary income recognized by the
optionee.
Nonstatutory Stock Options. An optionee does not recognize any taxable
income at the time he or she is granted a nonstatutory stock option. Upon
exercise, the optionee recognizes taxable income generally measured by the
excess of the then fair market value of the shares over the exercise price. Any
taxable income recognized in connection with an option exercise by an employee
of the Company is subject to tax withholding by the Company. The Company is
entitled to a deduction in the same amount as the ordinary income recognized by
the optionee. Upon a disposition of such shares by the optionee, any difference
between the sale price and the optionee's exercise price, to the extent not
recognized as taxable income as provided above, is treated as long-term or
short-term capital gain or loss, depending on the holding period.
THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION
UPON OPTIONEES, AND THE COMPANY WITH RESPECT TO THE GRANT AND EXERCISE OF
OPTIONS UNDER THE PLAN. IT DOES NOT PURPORT TO BE COMPLETE, AND DOES NOT DISCUSS
THE TAX CONSEQUENCES OF THE EMPLOYEE'S OR CONSULTANT'S DEATH OR THE PROVISIONS
OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH
THE EMPLOYEE OR CONSULTANT MAY RESIDE.
REPORT OF THE COMPENSATION COMMITTEE
The following is a report of the Compensation Committee of the Company
describing the compensation policies and rationale applicable to the Company's
executive officers with respect to the compensation paid to such executive
officers for the year ended December 31, 1998. The information contained in this
report shall not be deemed to be "soliciting material" or to be "filed" with the
Securities and Exchange Commission nor shall such information be incorporated by
reference into any future filing under the Securities Act or the Exchange Act,
except to the extent that the Company specifically incorporates it by reference
into any such filing.
Effective January 1, 1998, the Compensation Committee included as members
Directors Harold W. Andersen, George F. Haddix and Elliot S. Kaplan, who at
present continue to serve on the committee.
TO THE BOARD OF DIRECTORS:
The Compensation Committee of the Board of Directors reviews and approves
salaries and bonuses payable to the Company's executive officers. The
Compensation Committee in effect during 1998 was composed of Directors Harold W.
Andersen, George F. Haddix and Elliot S. Kaplan, three non-employee members.
The philosophy used by the Compensation Committee in establishing
compensation for executive officers, including the Chief Executive Officer, is
to attract and retain key personnel through the payment of competitive base
salaries and the grant of appropriate stock options, and to reward performances
through annual bonuses. The Internal Revenue Code limits companies' ability to
deduct for income tax purposes compensation paid to any individual employee in
excess of $1 million. The Company intends to take the necessary steps to conform
its compensation arrangements to comply with the deductibility ceiling.
The Company's Chief Executive Officer from September 1997 until August 1998
was Scott Dahnke. In determining Mr. Dahnke's compensation, the Committee
considered compensation plans being used by similar companies, varying
approaches to structuring cash and equity executive compensation, and the size
13
<PAGE> 16
and form of compensation that would be competitive within the industry and in
the Company's best interest, drawing in part on the information and analysis
provided by its compensation consultant in 1996. The Committee also considered
the compensation and assurances necessary to recruit Mr. Dahnke from his
previous employment as a Partner with a national consulting firm. After
considering and discussing the foregoing considerations, the Committee set Mr.
Dahnke's compensation at (i) a base salary of $375,000, (ii) a signing bonus of
$250,000, (iii) eligibility for annual bonuses of up to $250,000 per year, based
on the achievement of certain performance objectives, (iv) an option to purchase
up to 500,000 shares of the Company's stock, plus possible future options
contingent upon the achievement of certain performance objectives, and (v)
severance payments and arrangements in the event of Mr. Dahnke's termination
under certain circumstances.
Vinod Gupta resumed his role as Chief Executive Officer in August, 1998
upon the departure of Mr. Dahnke. Mr. Gupta's compensation consists of Mr.
Gupta's base salary, which was set at an annual rate of $48,000 for 1998. Mr.
Gupta declined to participate in any of the Company's bonus programs for 1998.
Also during 1998, the Company paid $1,392,000 to Annapurna Corporation, which is
100% owned by Mr. Gupta, for travel and consulting services and related
expenses. As Mr. Gupta resumed his duties as Chief Executive Officer late in the
fiscal year, the Committee is continuing to evaluate his compensation level.
The Compensation Committee developed compensation packages for all other
executive officers in fiscal 1998, which provided for base salaries, stock
options and bonuses. The base salaries are based on each officer's historical
salary and past performance as well as on publicly available information
concerning executive compensation levels paid by other companies in the Omaha,
Nebraska area and a report prepared for the Company by an independent
compensation consulting firm. Stock options were granted to officers to provide
long term incentives that are aligned with the interests of the Company's
stockholders, and at percentage interests in the Company that were comparable to
other Companies in the Omaha, Nebraska area and in the industry generally.
During 1998, there were two bonus plans in effect. The first applies to general
managers of product sales groups, and is based upon each general manager
achieving a defined percentage of the internal Company revenue and profit goals
for his or her product sales group. The second bonus plan, which applies to all
other executive officers and key employees (not including Mr. Gupta), is based
on the achievement of specified pre-tax, Company-wide profit levels. Neither
bonus plan is guaranteed and bonuses under either plan may be withheld by
management or the Board of Directors, or adjusted in the event of an acquisition
during the year.
Compensation Committee
Harold W. Andersen, George F. Haddix and Elliot S. Kaplan
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act, requires the Company's officers and
directors, and persons who own more than ten percent of a registered class of
the Company's equity securities, to file reports of ownership on Form 3 and
changes in ownership on Form 4 or Form 5 with the SEC. Such officers, directors
and 10% stockholders are also required by SEC rules to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons, the Company believes
that, during the fiscal year ended December 31, 1998, all Section 16(a) filing
requirements applicable to its officers, directors and 10% stockholders were
complied with, except for one Report on Form 5 was submitted approximately one
month late by Director Paul Goldner.
14
<PAGE> 17
CERTAIN TRANSACTIONS
During 1996, 1997 and 1998, the Company paid $48,000, $364,000 and
$1,392,000, respectively, to Annapurna Corporation for travel and consulting
services and related expenses. Annapurna Corporation is 100% owned by Vinod
Gupta.
In January 1998, the Company entered into an agreement with director Jon
Hoffmaster for a one year period, for which fees will be paid as Mr.
Hoffmaster's consulting services are requested by the Company. In April 1998,
the Company paid Mr. Hoffmaster $200,000 for services provided related to the
attempted acquisition of Metromail in March 1998.
In February 1997, as part of the acquisition of DBA, the Company entered
into an employee and consulting agreement with Paul A. Goldner for a term of
five years, under which Mr. Goldner will receive compensation at a rate of
$120,000 per annum and under which the Company agreed to nominate Mr. Goldner to
be elected to the Board when his current term expires in 1999.
The Company has retained the law firm of Robins, Kaplan, Miller & Ciresi
L.L.P. to provide certain legal services. Elliot Kaplan, a director of the
Company, is a name partner and former Chairman of the Executive Board of Robins,
Kaplan, Miller & Ciresi L.L.P.
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
April 2, 1999
15
<PAGE> 18
INFOUSA INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 2, 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 Annual Meeting of
Stockholders and Proxy Statement, each dated April 2, 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 Annual Meeting of Stockholders of
infoUSA Inc. to be held on May 2, 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. ELECTION OF THREE MEMBERS (with terms expiring in 2002) of the Board
of Directors:
<TABLE>
<S> <C> <C> <C>
[ ] FOR all nominees listed below (except as indicated) [ ] WITHHOLD authority to vote for all nominees listed
below
</TABLE>
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR AN INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THAT NOMINEE'S NAME IN THE LIST BELOW:
Paul Goldner, Ben Nelson and George Kubat
2. Proposal to amend the 1997 Class A Common Stock Option Plan reserving
an additional 3,000,000 shares of the Company's Common Stock for
issuance thereunder:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to ratify the appointment of KPMG Peat Marwick LLP as the
Company's independent auditors to examine the financial statements of
the Company for the fiscal year 1999:
[ ] 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 EACH OF THE PROPOSALS LISTED ABOVE,
AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY COME
BEFORE THE MEETING.
<PAGE> 19
INFOUSA INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 2, 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 Annual Meeting of
Stockholders and Proxy Statement, each dated April 2, 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 Annual Meeting of Stockholders of
infoUSA Inc. to be held on May 2, 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. ELECTION OF THREE MEMBERS (with terms expiring in 2002) of the Board
of Directors:
<TABLE>
<S> <C> <C> <C>
[ ] FOR all nominees listed below (except as indicated) [ ] WITHHOLD authority to vote for all nominees listed
below
</TABLE>
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR AN INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THAT NOMINEE'S NAME IN THE LIST BELOW:
Paul Goldner, Ben Nelson and George Kubat
2. Proposal to amend the 1997 Class A Common Stock Option Plan reserving
an additional 3,000,000 shares of the Company's Common Stock for
issuance thereunder:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to ratify the appointment of KPMG Peat Marwick LLP as the
Company's independent auditors to examine the financial statements of
the Company for the fiscal year 1999:
[ ] 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 EACH OF THE PROPOSALS LISTED ABOVE,
AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY COME
BEFORE THE MEETING.
