SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
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 Section 240.14a-11(c) or
Section 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 the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which
transaction applies:
(2) Aggregate number of securities to which transactions
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:
[infoUSA LOGO]
infoUSA INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 3, 2002
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the 2002 Annual Meeting of Stockholders of
infoUSA Inc., a Delaware corporation (the "Company"), will be held on Friday,
May 3, 2002, at 5:30 p.m. local time, at The Jaipur, 10999 Elm Street, Omaha,
Nebraska 68114, for the following purposes as more fully described in the Proxy
Statement accompanying this Notice:
1. To elect two directors to the Board of Directors for a term
of three years;
2. To ratify the appointment of KPMG LLP as the Company's
independent public accountants for the fiscal year ending December 31,
2002; and
3. 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 11, 2002
are entitled to receive notice of and to vote at the meeting.
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN
PERSON. HOWEVER, TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, YOU ARE
URGED TO MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS
POSSIBLE IN THE POSTAGE-PREPAID ENVELOPE INCLUDED FOR THAT PURPOSE. STOCKHOLDERS
ATTENDING THE ANNUAL MEETING MAY VOTE IN PERSON EVEN IF THEY HAVE RETURNED A
PROXY.
Sincerely,
Fred Vakili
Secretary
Omaha, Nebraska
March 29, 2002
infoUSA INC.
----------
PROXY STATEMENT
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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 2002 Annual Meeting of Stockholders
to be held on Friday, May 3, 2002, at 5:30 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 Jaipur, 10999 Elm Street, Omaha, Nebraska
68114. 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 March 29,
2002 to all stockholders entitled to vote at the meeting. The Company's Annual
Report for the fiscal year ended December 31, 2001, including audited financial
statements, is being mailed to stockholders concurrently with this Proxy
Statement.
RECORD DATE; OUTSTANDING SHARES
Stockholders of record at the close of business on March 11, 2002 (the
"Record Date") are entitled to receive notice of and vote at the meeting. On the
Record Date, 50,902,216 shares of the Company's Common Stock, $.0025 par value
per share, were issued and outstanding. For information regarding holders of
more than five percent of the outstanding Common Stock, see "Security
Ownership."
REVOCABILITY OF PROXIES
Proxies given pursuant to this solicitation may be revoked at any time
before they have been voted. Proxies may be revoked by delivering a written
notice of revocation to the Company or by duly executing and delivering to the
attention of the Secretary of the Company a proxy bearing a later date. Proxies
may also be revoked if the stockholder attends the meeting and votes in person.
VOTING AND SOLICITATION
The presence in person or by proxy of holders of a majority of the
shares of stock entitled to vote at the Annual Meeting constitutes a quorum for
the transaction of business. Every holder of record of 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. In the election of directors, each
1
stockholder will be entitled to vote for two nominees and the two nominees with
the greatest number of votes will be elected. Ratification of the appointment of
the Company's independent public accountants requires a vote of the majority of
the shares represented at the Annual Meeting in person or by proxy and entitled
to vote.
The election inspectors will treat abstentions as shares that are
present and entitled to vote for purposes of determining whether a quorum is
present. With respect to the election of directors (elected by a plurality of
the votes), abstentions will not be taken into account in determining the
outcome of the election. With respect to the other matters being considered,
abstentions will have the same effect as negative votes. If a broker indicates
on the proxy that it does not have discretionary authority as to certain shares
to vote on a particular matter, those shares will not be considered as present
and entitled to vote with respect to that matter and will not be taken into
account in determining the outcome of the votes on that matter.
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 personally, by telephone or by
telegram and no additional compensation will be paid to such individuals.
DEADLINES FOR RECEIPT OF STOCKHOLDER PROPOSALS
The proxy rules of the Securities and Exchange Commission permit
stockholders, after timely notice to a company, to present proposals for
stockholder action in a company's proxy statement where such proposals are
consistent with applicable law, pertain to matters appropriate for stockholder
action and are not properly omitted by corporate action in accordance with the
proxy rules. Stockholder proposals that are intended to be presented at the
Company's 2003 Annual Meeting must be received by the Company no later than
November 29, 2002 to be included in the proxy statement and form of proxy for
that meeting. The Company's proxy for the 2003 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 2003 Annual Meeting that are
received after February 12, 2003.
The Company's Bylaws provide that certain requirements be met in order
that business may properly come before the stockholders at the Annual Meeting.
Among other things, stockholders intending to bring business before the Annual
Meeting must provide written notice of such intent to the Secretary of the
Company. Such notice must be received by the Company no later than the close of
business on the 10th day following the date of this Proxy Statement.
Stockholders desiring to bring matters for action at an Annual Meeting should
contact the Company's Secretary for a copy of the relevant requirements. Any
stockholder wishing to bring matters for action at this year's Annual Meeting
should note that, as permitted by the proxy rules, the persons named as proxies
may exercise discretionary voting authority with respect to any such proposal
because the proposals will have been received after March 6, 2002 (as disclosed
in the Proxy Statement for the 2001 Annual Meeting).
2
PROPOSAL ONE
ELECTION OF DIRECTORS
GENERAL
The Company's Board of Directors presently consists of eight directors
and 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 Paul A. Goldner, Rob S. Chandra and J. Robert
Kerrey expire at this year's Annual Meeting. The terms of office of Vinod Gupta,
George F. Haddix and Cynthia H. Milligan expire at the 2003 Annual Meeting and
the terms of office of Harold W. Anderson and Elliot S. Kaplan expire at the
2004 Annual Meeting.
The Company is proposing that stockholders re-elect two directors whose
terms expire this year (Messrs. Chandra and Kerrey) for terms expiring at the
2005 Annual Meeting. Mr. Goldner is not standing for re-election. The Board of
Directors has reduced the number of directors of the Company from eight to
seven, effective upon the expiration of Mr. Goldner's term on the date of the
Annual Meeting, with two classes of two directors each and one class of three
directors. Proxies cannot be voted for a greater number of persons than the
number of nominees named.
VOTE REQUIRED
The two 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 will be elected to the Board of
Directors.
Unless otherwise instructed, the proxy holders will vote the proxies
received by them for the Company's two nominees named below. If any nominee of
the Company is unable or declines to serve as a director at the time of the
Annual Meeting, the proxies will be voted for any nominee who is designated by
the 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" EACH
NOMINEE LISTED BELOW.
3
NOMINEES FOR ELECTION AT THE ANNUAL MEETING
The names of the nominees, and certain information about them, are set
forth below:
NOMINATED
DIRECTOR FOR TERM
NAME OF DIRECTOR AGE POSITION/PRINCIPAL OCCUPATION SINCE EXPIRING
Rob S. Chandra 35 Director; General Partner At Bessemer Venture 2001 2005
Partners.
J. Robert Kerrey 58 Director; President of New School University 2001 2005
ROB S. CHANDRA has served as a director of the Company since February
2001. Mr. Chandra has been a general partner at Bessemer Venture Partners, the
nation's oldest venture capital firm, since September 2000. At Bessemer, he
leads the firm's West Coast telecommunications industry practice. Prior to
joining Bessemer, Mr. Chandra was a general partner with Commonwealth Capital
Ventures. Previously, he was an engagement manager with McKinsey & Company and
an associate with Andersen Consulting. He began his career in sales with IBM.
Mr. Chandra has an A.B. in Economics from the University of California,
Berkeley, and an M.B.A. from Harvard Business School.
J. ROBERT KERREY has served as a director of the Company since February
2001. He has served as President of New School University since January 2001.
Mr. Kerrey was elected to the U.S. Senate in 1988 and served as U.S. Senator
from Nebraska through 2000. Previously, he was elected Governor of Nebraska in
1982 and served as Governor through 1987. Mr. Kerrey holds a degree in Pharmacy
from the University of Nebraska. He is the brother of William L. Kerrey, the
Company's President, License Group.
4
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:
DIRECTOR TERM
NAME OF NOMINEE AGE POSITION/PRINCIPAL OCCUPATION SINCE EXPIRES
Harold W. Anderson (1)(2) 78 Director; Contributing Editor to Omaha World 1993 2004
Herald and Retired Publisher of Omaha World
Herald Company.
Elliot S. Kaplan (2) 65 Director; Senior Partner in law firm of Robins, 1988 2004
Kaplan, Miller & Ciresi L.L.P.
Vinod Gupta 55 Chairman of the Board and Chief Executive Officer 1972 2003
of the Company.
George F. Haddix (1)(2) 63 Director; Individual Investor. 1995 2003
Cynthia H. Milligan (1) 56 Director; Dean of the College of Business 2000 2003
Administration at the University of Nebraska,
Lincoln.
----------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
HAROLD W. ANDERSEN has served as a 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 Bachelor of Science in Liberal Arts from the University of
Nebraska.
ELLIOT S. KAPLAN has served as a 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 1961. Mr. Kaplan is also a director and
officer of Best Buy Co., Inc. Mr. Kaplan holds a B.A. in Business Administration
and a J.D. from the University of Minnesota.
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.
GEORGE F. HADDIX has served as a director of the Company since March
1995. Since January 1998, Mr. Haddix has been an individual investor. From
November 1994 to December 1997, Mr. Haddix 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., a service provider for
5
communication companies based in Englewood, Colorado. 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.
CYNTHIA H. MILLIGAN has served as a director of the Company since July
2000. She has served as the Dean of the College of Business Administration at
the University of Nebraska, Lincoln, since June 1998. From 1991 to 1998, she was
the President and Chief Executive Officer of Cynthia Milligan & Associates, a
consulting firm to financial institutions. She is also a director of Wells Fargo
& Company, a financial services company based in San Francisco, California,
Calvert Fund, a mutual fund company based in Bethesda, Maryland, and Raven
Industries, Inc., a manufacturing company based in Sioux Falls, South Dakota.
Ms. Milligan holds a B.A. in French from the University of Kansas and a J.D.
from George Washington University.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of seven meetings
during 2001 and acted once through a written action. The Board of Directors has
an Audit Committee and a Compensation Committee. The Board does not have a
nominating committee or any committee performing similar functions.
The Audit Committee, which currently consists of directors George F.
Haddix, Harold W. Andersen and Cynthia H. Milligan, met six times in 2001. The
Audit Committee operates under a written charter adopted by the Board of
Directors. The committee has primary responsibility 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. A report of the Audit Committee is contained in this Proxy Statement.
All members of the Company's Audit Committee are independent directors as
defined by the rules of the National Association of Securities Dealers ("NASD")
for companies listed on the Nasdaq National Market.
The Compensation Committee, which currently consists of directors
Harold W. Andersen, George F. Haddix and Elliot S. Kaplan, met three times
during 2001. 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 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, except for
Mr. Goldner, who attended four meetings of the Board of Directors in 2001.
BOARD COMPENSATION
Prior to July 2001, non-employee directors were compensated at a rate
of $2,500 per Board meeting attended. Commencing July 2001, non-employee
directors receive an annual cash
6
retainer of $24,000, payable in quarterly installments of $6,000 each. The
respective Chairs of the Audit Committee and the Compensation Committee receive
an additional annual cash retainer of $3,000, payable in quarterly installments
of $750 each. Additionally, at the date of each Annual Meeting of the
Stockholders of the Company, commencing at this Annual Meeting, each person who
is elected a director at such meeting, or whose term as a director continues
after such meeting, will automatically be granted an option to purchase 10,000
shares of Common Stock of the Company at an exercise price per share equal to
the fair market value of a share of Common Stock on the date of the meeting.
Such options will be fully vested at the date of grant, and will expire on the
fourth anniversary of the grant. Employee directors do not receive compensation
for their service on the Board.
7
SECURITY OWNERSHIP
The following table sets forth the beneficial ownership of the
Company's 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:
PERCENT OF
COMMON STOCK OUTSTANDING SHARES
BENEFICIAL OWNERS BENEFICIALLY OWNED(1) OF COMMON STOCK
----------------- --------------------- ------------------
Vinod Gupta ................................................ 19,995,573 38.5%
5711 South 86th Circle
Omaha, NE 68127
Liberty Wanger Asset Management, L.P. ...................... 3,147,000 6.2%
227 West Monroe Street, Suite 3000
Chicago, Illinois 60606-5016
Liberty Acorn Trust ........................................ 2,684,000 5.3%
227 West Monroe Street, Suite 3000
Chicago, Illinois 60606
Paul A. Goldner ............................................ 3,714,343 7.2%
100 Paragon Drive
Montvale, New Jersey 07645
Harold W. Andersen(2) ...................................... 121,015 **
Rob S. Chandra ............................................. 2,916 **
George F. Haddix ........................................... 282,715 **
Elliot S. Kaplan ........................................... 251,995 **
J. Robert Kerrey ........................................... 2,916 **
Cynthia H. Milligan ........................................ 5,316 **
Allen F. Ambrosino(3) ...................................... 596,076 1.2%
Michael J. Morreale ........................................ 60,965 **
William L. Kerrey .......................................... 344,662 **
Edward C. Mallin ........................................... 135,852 **
All directors and executive officers as
a group (16 persons) .................................... 26,944,587 49.7%
----------
** Less than 1%
(1) Includes the following shares that may be purchased within 60 days of
the Record Date pursuant to the exercise of outstanding options: Mr.
Gupta, 1,081,665 shares; Mr. Goldner, 402,415 shares; Mr. Andersen,
62,415 shares; Mr. Haddix, 62,415 shares; Mr. Kaplan, 68,415 shares;
Ms. Milligan, 2,916 shares; Mr. Chandra, 2,916 shares; Mr. R. Kerry,
2,916 shares; Mr. Ambrosino, 464,496 shares; Mr. Morreale, 58,910
shares; Mr. W. Kerrey, 158,662 shares; Mr. Mallin, 100,852 shares; and
all directors and executive officers as a group, 3,269,394 shares.
(2) Includes 10,000 shares owned by Mr. Andersen's spouse.
(3) Includes 6,830 shares jointly owned with Mr. Ambrosino's spouse. Also
includes 24,750 shares owned by Mr. Ambrosino's spouse.
8
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
At the recommendation of the Audit Committee, the Board of Directors
has selected KPMG LLP, independent accountants, to audit the books, records and
accounts of the Company for the current fiscal year ending December 31, 2002.
KPMG LLP has audited the Company's financial statements since October 14, 1998.
The affirmative vote of a majority of the shares represented at the
Annual Meeting in person or proxy and entitled to vote will be required to
ratify the Board's selection of KPMG LLP. In the event of a negative vote on
such ratification, the Board of Directors will reconsider its selection.
A representative of KPMG LLP is expected to be present at the Annual
Meeting, will have an opportunity to make a statement if he or she desires to do
so, and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
RATIFICATION OF SUCH SELECTION.
AUDIT FEES
The Company paid KPMG LLP an aggregate of $283,000 for the annual audit
for fiscal year 2001 and for the review of the Company's financial statements
included in the Company's Quarterly reports on Form 10-Q for the fiscal year
2001.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEE
KPMG LLP did not perform any services relating to financial systems
design and implementation for the Company in fiscal year 2001.
ALL OTHER FEES
The Company paid KPMG LLP $86,000 for professional services related to
acquisition due diligence work, retirement plans and employee 401(k) plan
audits, amended financial statement filings, Securities and Exchange Commission
comment support, tax filings and other special projects under the direction of
the Audit Committee. The Audit Committee has reviewed these services and has
determined that the provision of these services is compatible with maintaining
the accountant's independence.
9
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors of the Company consists
of three independent directors and operates under a written charter adopted by
the Board of Directors. Management is responsible for the Company's internal
control and the financial reporting process. The independent accountants are
responsible for performing an independent audit of the Company's consolidated
financial statements in accordance with generally accepted auditing standards
and to issue a report thereon. The Committee's responsibility is to monitor and
oversee these processes.
In this context, the Committee has met and held discussions with
management and the independent accountants. Management represented to the
Committee that the Company's consolidated financial statements were prepared in
accordance with generally accepted accounting principles, and the Committee has
reviewed and discussed the consolidated financial statements with management and
the independent accountants. The Committee discussed with the independent
accountants matters required to be discussed by Statement on Auditing Standards
No. 61 (Communication with Audit Committees). The Company's independent
accountants also provided to the Committee the written disclosures required by
Independence Standard No. 1 (Independence Discussions with Audit Committees),
and the Committee discussed with the independent accountants that firm's
independence.
Based upon Committee's discussion with management and the independent
accountants and the Committee's review of the representations of management and
the report of the independent accountants, the Committee recommended that the
Board of Directors include the audited consolidated financial statements in the
Company's Annual Report on Form 10-K for the year ended December 31, 2001 filed
with the Securities and Exchange Commission.
AUDIT COMMITTEE
Harold W. Andersen
George F. Haddix
Cynthia H. Milligan
10
PERFORMANCE GRAPH
The following Performance Graph compares the cumulative total return to
stockholders of the Company's Common Stock from December 31, 1996 to December
31, 2001 to the cumulative total return over such period of (i) The Nasdaq Stock
Market (U.S. Companies) Index and (ii) JPMorgan H&Q Technology Index (formerly
known as the "Chase H&Q Technology Index"). The performance graph is not
necessarily indicative of future investment performance.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG INFOUSA INC., NASDAQ STOCK MARKET INDEX
AND JPMORGAN H&Q TECHNOLOGY INDEX
[PERFORMANCE GRAPH]
31-DEC-96 31-DEC-97 31-DEC-98 31-DEC-99 31-DEC-00 31-DEC-01
--------- --------- --------- --------- --------- ---------
infoUSA Common Stock** $100 $ 92 $ 47 $125 $ 30 $ 62
NASDAQ (U.S. Companies) $100 $122 $173 $321 $193 $153
JPMorgan H&Q Technology Index $100 $117 $182 $407 $263 $182
* Assumes $100 invested on December 31, 1996 in infoUSA Inc. Common
Stock, Nasdaq Stock Market (U.S. Companies) Index and JPMorgan H&Q
Technology Index.
** In October 1997, the Company reclassified its existing Common Stock as
Class B Common Stock, authorized a new class of Common Stock designated
Class A Common Stock (together, the "Reclassification") and declared a
dividend of one share of Class A Common Stock for each share of Class B
Common Stock outstanding (the "Stock Dividend"). The Stock Dividend had
the effect of a two-for-one stock split. In October 1999, the Company
combined its Class A and Class B Common Stock. The information set
forth above for periods prior to the combination reflects the
historical trading information of the Class B Common Stock.
The information contained in the Performance Graph will not be deemed
to be "soliciting material" or to be "filed" with the Securities and Exchange
Commission (the "SEC"), nor will such information be incorporated by reference
into any future filing under the Securities Act of 1933, as amended (the
"Securities Act"), or the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"), except to the extent that the Company specifically incorporates
it by reference into any such filing.
11
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation paid by the Company for
fiscal years 2001, 2000 and 1999 to the Company's Chief Executive Officer and
each of the other four most highly compensated executive officers of the Company
(together, the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
----------------------- --------------
Stock All Other
Name and Principal Position Year Salary ($) Bonus($) Options (#)(1) Compensation($)
--------------------------- ---- ---------- -------- -------------- ---------------
Vinod Gupta ............................ 2001 96,000(2) -0- 1,200,000 2,400
Chairman and Chief Executive 2000 96,000(2) -0- -0- 2,262
Officer 1999 48,000(2) -0- 400,000 1,200
Allen F. Ambrosino ..................... 2001 300,000 66,078 124,000 -0-
President, Large Business 2000 300,000 107,219 -0- -0-
Group 1999 275,000 -0- 110,000 -0-
William L. Kerrey ...................... 2001 300,000 164,466 124,000 5,250
President, License Group 2000 300,000 275,000(3) 20,000 5,250
1999 230,000 211,200(3) 110,000 5,000
Michael J. Morreale .................... 2001 250,000 60,269 18,000 5,250
Executive Vice President, 2000 200,000 201,030 -0- 5,250
Large Business Group 1999 160,000 86,948 34,535 5,000
Edward C. Mallin ....................... 2001 295,000 164,024 54,000 5,250
President, Walter Karl 2000 250,000 151,500 20,000 5,250
1999 225,000 50,000 5,000 5,000
----------
(1) Each of the figures indicated in this column includes options to
purchase shares of the Company's Common Stock, as adjusted to reflect
the combination of the Class A and Class B Common Stock which occurred
in October 1999.
(2) Excludes certain amounts paid to Annapurna Corporation for
reimbursement of Company related travel and entertainment expenses and
to Everest Investment Management for rent and investment advisory fees,
all as more particularly set forth under "Certain Transactions" in this
Proxy Statement.
(3) The bonus amount includes $50,000 which was paid to James Company which
is owned by Mr. Kerrey.
12
OPTION GRANTS IN THE LAST FISCAL YEAR
The following table sets forth each grant of stock options made during
the year ended December 31, 2001 to each of the Named Executive Officers:
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
------------------------------------------------------ POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF
PERCENT OF TOTAL MARKET STOCK PRICE APPRECIATION
OPTIONS OPTIONS GRANTED TO PRICE FOR OPTION TERM($)(3)
GRANTED EMPLOYEES IN EXERCISE ON GRANT EXPIRATION --------------------------
NAME (#) FISCAL YEAR PRICE ($) DATE ($) DATE 5% 10%
---- ------- ------------------ --------- -------- ---------- ------ ------
Vinod Gupta .............. 1,200,000(1) 52.91% 8.53 5.75 08/23/06 -- 876,519
Allen F. Ambrosino ....... 24,000(1) 1.06% 7.00 3.63 02/16/06 -- --
100,000(2) 4.41% 4.00 4.00 10/08/01 -- --
William L. Kerrey ........ 24,000(1) 1.06% 7.00 3.63 02/16/06 -- --
100,000(2) 4.41% 4.00 4.00 10/08/01 -- --
Michael J. Morreale ...... 18,000(1) 7.9% 7.00 3.63 02/16/06 -- --
Edward C. Mallin ......... 24,000(1) 1.06% 7.00 3.63 02/16/06 -- --
30,000(2) 1.32% 4.00 4.00 10/08/01 -- --
----------
(1) Figures represent options under the 1997 Stock Option Plan, which vest
and become exercisable as follows: 25% vest on the first anniversary of
the date of grant. The remaining 75% of the options vest and become
exercisable equally over the next 36 months, provided that the optionee
continues to be employed by the Company.
(2) Figures represent options under the 1992 Stock Option Plan, which
vested immediately with respect to all option shares. Options were
exercisable by borrowing from the Company an amount equal to the
exercise price, evidenced by a five-year promissory note requiring
annual payments of interest at five percent, with all outstanding
principal and interest due and payable on the five-year anniversary of
the grant or 30 days after termination of employment, whichever occurs
first. The term of these options was seven days.
(3) Potential realizable value is based on an assumption that the market
price of the underlying security 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.
13
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:
AGGREGATED OPTION EXERCISES
AND DECEMBER 31, 2001 OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-
SHARES UNDERLYING UNEXERCISED THE-MONEY OPTIONS
ACQUIRED OPTIONS AT 12/31/01 (#) AT 12/31/01 ($)(1)
ON EXERCISE VALUE ----------------------------- ----------------------------
NAME (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------ ----------- ------------- ----------- -------------
Vinod Gupta ................ -0- -0- 1,064,998 1,275,002 188,000 -0-
Allen F. Ambrosino ......... 100,000 -0- 424,829 89,171 49,390 29,010
William L. Kerrey .......... 100,000 -0- 138,747 75,253 35,136 26,304
Michael J. Morreale ........ -0- -0- 45,652 57,223 56,413 48,427
Edward C. Mallin ........... 30,000 -0- 90,415 38,585 10,441 11,799
----------
(1) Based on the market price of $6.94 per share of Common Stock on
December 31, 2001.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors reviews and
approves salaries, bonuses and other compensation payable to the Company's
executive officers. During fiscal year 2001, the Compensation Committee
consisted of Directors Harold W. Andersen, George F. Haddix and Elliot S.
Kaplan. None of these persons is an employee of the Company.
The Compensation Committee's policy in establishing compensation for
executive officers is to reward sustained performance through the payment of
base salaries, reward current performance through annual bonuses, and provide
long-term incentives through stock options and other opportunities for equity
ownership. When establishing the amounts of such compensation, the Compensation
Committee considers publicly available information concerning executive
compensation levels paid by other companies in the Omaha, Nebraska area and in
the industry generally.
The Compensation Committee reviewed and approved compensation packages
for all executive officers in fiscal 2001, including base salaries, bonus plans
and stock options. For executive officers other than the Chief Executive
Officer, base salaries are based on each officer's responsibilities and
historical performance. During 2001, two bonus plans were 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 Company's internal 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 (other than the
Chief Executive Officer), is based on the achievement of specified Company-wide
pre-tax 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 or other material events during the year. Stock options
are
14
granted to officers to provide long-term incentives aligned with the interests
of the Company's stockholders, at percentage interests in the Company that are
comparable to those held by executive officers in other companies in the Omaha,
Nebraska area and in the industry generally.
In fiscal 2001, the compensation of Vinod Gupta, Chief Executive
Officer of the Company, consisted of a base salary of $96,000. Mr. Gupta was
also granted a stock option for 1,200,000 shares at an exercise price of $8.53
per share (compared to a fair market value of $5.75 per share on the date of
grant) to replace an out-of-the money option that expired in 2001. Mr. Gupta
declined to participate in any of the Company's bonus programs for 2001 or prior
years. In November 2001, the Compensation Committee reviewed and revised Mr.
Gupta's compensation for fiscal year 2002. The Compensation Committee compared
Mr. Gupta's compensation with the compensation of chief executive officers of
other companies deemed by the Compensation Committee to be comparable to the
Company. The Compensation Committee also considered Mr. Gupta's substantial
contributions to the Company, his continuing importance to the Company's
business and his historical compensation, which has been substantially lower
than the compensation of other executive officers of the Company and of
similarly situated chief executive officers of other companies. Based on these
factors, the Compensation Committee set Mr. Gupta's base salary at an annual
rate of $560,000 commencing January 2002. The Compensation Committee also
determined that, in fiscal year 2002, Mr. Gupta will be eligible for a cash
bonus based on the Company's achievement of a certain level of EBITDA (earnings
before interest, taxes, depreciation and amortization). Mr. Gupta will not be
eligible to participate in the Company's other bonus programs.
In establishing the compensation of the Chief Executive Officer, the
Compensation Committee also reviewed and considered certain business
relationships between the Company and other entities in which Mr. Gupta has an
ownership interest as set forth under "Certain Transactions" contained elsewhere
in the proxy statement in which this Compensation Committee Report is included.
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.
COMPENSATION COMMITTEE
Harold W. Andersen
George F. Haddix
Elliot S. Kaplan
15
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 10% 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, 2001, all Section 16(a) filing
requirements applicable to its officers, directors and 10% stockholders were
timely complied with, except for Mr. Gupta, who filed a late Form 5 for stock
trade, Mr. Ambrosino, who filed a late Form 4 on two occasions for stock trades,
and Messrs. Dean, Kerrey, Mallin, Messer, Thayer and Vakili, each of whom filed
a late Form 4 on one occasion, each for an option exercise.
CERTAIN TRANSACTIONS
Annapurna Corporation, which is 100% owned by Mr. Gupta, who is the
Chairman and Chief Executive Officer of the Company, has fractional ownership in
certain aircraft with NetJets. Annapurna Corporation bills the Company when the
Company's employees and officers use the aircraft. The Company paid a total of
$2.1 million, $2.0 million and $3.5 million in 2001, 2000 and 1999,
respectively, to Annapurna Corporation for usage of the aircraft and other
travel and entertainment expenses. The Company also paid Annapurna Corporation
$49 thousand in 2001 for costs related to Polk City Directory acquisition. These
costs were capitalized.
The Company paid Everest Investment Management $120 thousand in 2001
for rented office space in a building adjacent to the Company's facility and
$500 thousand in 1999 for investment advisory fees on certain transactions.
Everest Investment Management is 40% owned by Mr. Gupta.
Mr. Gupta also paid for Company expenses totaling $129 thousand in 2001
and $140 thousand in 2000 related to entertainment and investment management
services. The 2000 expenses were recorded as a contribution of capital. During
1999, Mr. Gupta received a loan for $2.6 million, which was repaid with interest
shortly after the borrowing.
In 2001, the Company invested $1 million in the Everest3 Fund, a blend
of three index funds (S&P 500, Dow Jones and Nasdaq 100). Everest Funds
Management LLC manages the fund. Mr. Gupta, who is the Chairman and Chief
Executive Officer of the Company, owns 100% of the voting stock in Everest Funds
Management LLC.
During 2001, the Company acquired a building adjacent to the Company's
facility by assuming a mortgage from Everest Investment Management, which is 40%
owned by Mr. Gupta. The purchase price for the building was $2.8 million.
As discussed under the "Report of the Compensation Committee," Mr.
Gupta is eligible for a cash bonus in 2002 based on Company performance. The
criteria for Mr. Gupta's bonus is that he will receive 10% of the Company's
adjusted EBITDA in excess of $80 million. In January 2002, the Company paid
16
an advance to Mr. Gupta in the amount of $1.5 million (based on 2001
performance) to be off set against any 2002 bonus payable to Mr. Gupta pursuant
to his bonus program.
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 received compensation at a rate of
$120,000 per annum and under which the Company appointed him to the Board and
subsequently nominated him for election as a director in connection with the
1999 Annual Meeting.
The Company has retained the law firm of Robins, Kaplan, Miller &
Ciresi L.L.P. to provide certain legal services. Elliot S. 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.
In October 2001, the Company loaned $400,000, $80,000, $400,000,
$120,000, $100,000, $80,000 and $100,000 to Allen F. Ambrosino, Stormy Dean, J.
Robert Kerrey, Monica Messer, D.J. Thayer and Fred Vakili, respectively. Each of
the foregoing persons is an executive officer of the Company. The loans were
made to facilitate the exercise of stock options held by such individuals. The
loans were evidenced by promissory notes secured by the option shares, with
interest at a rate of five percent, payable annually. All principal and interest
is due on the five-year anniversary of the note, or 30 days after termination of
the executive's employment, whichever occurs first.
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
March 29, 2002
17
APPENDIX
infoUSA INC.
ANNUAL MEETING OF STOCKHOLDERS
FRIDAY, MAY 3, 2002
5:30 P.M.
AT: THE JAIPUR
10999 ELM STREET
OMAHA, NEBRASKA 68114
infoUSA INC.
5711 SOUTH 86TH CIRCLE, OMAHA, NEBRASKA 68127 PROXY
--------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING
OF STOCKHOLDERS OF infoUSA INC. (THE "COMPANY") TO BE HELD ON MAY 3, 2002 OR ANY
ADJOURNMENTS THEREOF.
The shares of the Company's Common Stock you hold as of the record date on March
11, 2002 will be voted as you specify below.
By signing the proxy, you revoke all prior proxies and appoint Stormy Dean and
Fred Vakili, or either of them, as proxies with full power of substitution, to
vote all shares of stock of the Company of record in the name of the undersigned
at the close of business on March 11, 2002 at the Annual Meeting of
Stockholders.
The undersigned stockholder hereby acknowledges receipt of the Notice of the
Annual Meeting of Stockholders and Proxy Statement for the Annual Meeting to be
held on May 3, 2002.
See reverse for voting instructions.
o Please detach here o
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
1. Election of directors (with 01 Rob S. Chandra [ ] Vote FOR [ ] Vote WITHHELD
terms expiring 2005): 02 J. Robert Kerrey all nominees from all nominees
(except as marked)
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY -----------------------------------------------
INDICATED NOMINEE, WRITE THE NUMBER(S) OF THE NOMINEE(S)
IN THE BOX PROVIDED TO THE RIGHT.) -----------------------------------------------
2. Proposal to ratify the appointment of KPMG LLP as the [ ] For [ ] Against [ ] Abstain
Company's independent auditors.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL. In their discretion, the proxies are
authorized to vote with respect to such other matters as may be properly brought
before the meeting or any adjournments thereof.
Address Change? Mark Box
Indicate changes below: [ ]
Date
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Signature(s) in Box
Please sign exactly as your name(s) appear
on Proxy. If held in joint tenancy, all
persons must sign. Trustees, administrators,
etc., should include title and authority.
Corporations should provide full name of
corporation and title of authorized officer
signing the proxy.