Definitive Additional Materials
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 r
Filed
by
a Party other than the Registrant x
Check
the
appropriate box:
r
Preliminary
Proxy
Statement
r
Confidential,
for
Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
r
Definitive
Proxy
Statement
x
Definitive Additional
Materials
r
Soliciting Material
under Rule 14a-12
infoUSA
Inc.
(Name
of
Registrant as Specified In Its Charter)
Dolphin
Limited Partnership I, L.P.
Dolphin
Financial Partners, L.L.C.
(Name
of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
x
No fee
required.
r
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:
|
Common
Stock, $.0025 par value
| (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:
|
r
Fee
paid previously
with preliminary materials.
r
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.:
|
Dolphin
Limited Partnership I, L.P.
ninety-six
cummings point road
stamford,
ct 06902
IT’S
NOW UP TO YOU TO HOLD THE FULL infoUSA
BOARD AND MR. VINOD GUPTA ACCOUNTABLE
SIGN,
DATE AND RETURN THE BLUE
PROXY CARD TODAY!
May
2,
2006
Dear
Fellow infoUSA
Stockholder:
As
you
know, Dolphin, which owns 2.0 million shares or 3.6% of infoUSA’s
stock, has nominated a slate of highly qualified, independent candidates for
election as Directors at the upcoming Annual Meeting on May 26, 2006. These
nominees have only agreed to serve to benefit you and are committed to building
shareholder value at infoUSA
by
ensuring that the full Board represents the interests of all
shareholders and holds top management accountable.
Dolphin’s
nominees are independent and have no
ties to
Dolphin, infoUSA
or
its management.
CONSIDER
THE REAL
ISSUES AND FACTS
DO
NOT BE MISLED BY infoUSA
AND MR. VINOD GUPTA
AND
THEN VOTE THE BLUE
PROXY CARD TO PROTECT THE VALUE OF YOUR INVESTMENT IN infoUSA
We
believe that the value of our and your investment is harmed by the full Board’s
failure to hold top management accountable, particularly Mr. Vinod Gupta,
Chairman, CEO and 40%
shareholder. That’s why we have gone to great lengths to bring you the real
issues and facts and to provide you with a real alternative: three highly
qualified, independent nominees. It is now up to you to hold the full Board
and
Mr. Vinod Gupta accountable by voting FOR
our
slate.
We
believe the full Board and Mr. Vinod Gupta have not been upfront with you.
Their
letters fail to address the critical issues that we have raised with them over
the past eight months and have presented to you. Instead of responding to these
real issues, they have tried to change the subject by stooping to absurd,
irrelevant personal attacks.
Here
are
just some of the real issues and facts that they haven’t addressed:
POOR Profitability
(EBITDA) Has Gone Nowhere From 2001 to 2005 PERFORMANCE
The
Share Price Has Dropped 13% Since infoUSA
Missed 1st
Quarter Analyst Expectations
The
Board’s April 17 letter to shareholders, signed by Mr. Vinod Gupta, extols the
Company’s performance. However, just
four days later,
on
April 21 infoUSA
missed analyst expectations for 1st
quarter
earnings, knocking 13% off your investment, as of the close on May 1. If you
are
a long-term infoUSA
shareholder, you know infoUSA’s
history of negative earnings surprises.
TAKING Mr.
Vinod Gupta Made An Opportunistic $11.75 Offer in 2005 To
ADVANTAGE
Acquire
Your Shares Just
5 Days
After An Earnings Warning
OF
YOU Knocked
20% Off Your Investment
Then
Mr. Vinod Gupta Voted To Terminate The Special Board Committee After The
Committee Rejected His Offer And Stated It Would Be In Your Best Interests
To
“Explore A Range Of Strategic Alternatives”
The
facts
speak for themselves. Three
months
after
publicly stating that he believed infoUSA
stock
was worth
more than $18 per share,
Mr.
Vinod Gupta opportunistically offered to acquire your shares for $11.75 per
share. This offer came
just 5 days
after
infoUSA
lowered its earnings forecast. The Board formed a Special Committee to consider
the offer and to “solicit,
negotiate, approve or reject alternate proposals”.
After
the
Special Committee rejected the offer and publicly stated it would be in your
best interests to “explore a range of strategic alternatives”, Mr. Vinod Gupta
voted with other members of the Board that Dolphin believes were conflicted,
including current nominee Dr. Haddix, to terminate the Special Committee that
was trying to deliver more value to you. The other infoUSA
nominee, Dr. Raval, failed to take a stand for you and abstained. A detailed
time line of these events, with supporting documentation, is available on our
website: www.IUSAccountability.com.
LACK
OF Vinod
Gupta Is the Only Shareholder Exempt from infoUSA’s
FAIRNESS Shareholder
Rights Plan
infoUSA
adopted a shareholder rights plan in 1997 that seeks to deter opportunistic
offers detrimental to shareholder interests by preventing anyone from acquiring
more than 15% of infoUSA
stock. The full Board, however, continues to allow Mr. Vinod Gupta and his
affiliates to be the only
shareholders exempt from the plan provisions. It
seems to us that Mr. Vinod Gupta is the one shareholder the plan should apply
to, based on the opportunistic offer he made
in 2005 and his continued purchases of shares and exercises of options granted
him by the Board.
ACCOUNTABILITY The
Full Board Has Allowed Mr. Vinod Gupta to Use Your Money For Private Jets,
An 80
Foot Yacht, A Skybox, Private Residences, Real Estate, Luxury
Cars
As
detailed in our proxy statement previously sent you, Mr. Vinod Gupta and his
affiliates have engaged in over $16 million in related party transactions with
infoUSA
since
1998. Dolphin believes that not all of these transactions were for valid
business purposes, a belief reinforced by a report of the chairman of the
infoUSA
audit
committee (see below). Instead of simply putting an end to these related party
transactions, infoUSA
spent
more of your money to acquire the assets from Mr. Vinod Gupta and his
affiliates.
We
believe that the Board’s failure to take effective action to curb these abuses
is demonstrated by the 2004 “in-depth” investigation into such expenditures by
Dr. Raval, Chairman of the Audit Committee and current Company nominee. Dr.
Raval’s memorandum describing his investigation can be found on our website:
http://www.IUSAccountability.com/index.php.
We urge
you to read it.
TAKING Mr.
Gupta has received 3.2 Million Options Since 1998
ADVANTAGE
OF
YOU
Significant
Dilution for You. An “Incentive” For Mr. Vinod Gupta?
The
full
Board has granted Mr. Vinod Gupta 3.2 million options, an additional 6% of
infoUSA’s
shares, since 1998. Option grants are designed to incentivize employees to
build
additional shareholder value and thereby outweigh their dilutive effect. Isn’t
Mr. Vinod Gupta just taking money out of your pocket because he already owns
such a large amount of infoUSA
stock?
These
option grants and their exercise, however, have diluted your interests and
make
it more difficult for unaffiliated shareholders to gain representation on
the
Board. In fact, Mr.
Gupta exercised
1.2 million options just
before the record date for this Annual Meeting, with the result that he now
has
the right to vote 40% of infoUSA’s
stock.
GIVEN
THE ACTIONS OF MR. VINOD GUPTA AND THE FULL BOARD, CAN YOU TRUST ANYTHING THEY
SAY?
CONSIDER
THE REAL
ISSUES AND FACTS
AND
THEN VOTE THE BLUE
PROXY CARD TO PROTECT THE VALUE OF YOUR INVESTMENT IN infoUSA
Your
vote
is extremely important, no matter how many or how few shares you own, since
Mr.
Vinod Gupta, infoUSA’s
Chairman and CEO, who is seeking re-election at the meeting, owns 40% of the
shares entitled to vote.
We
strongly urge you to sign, date and return the enclosed BLUE
proxy
card with a vote FOR
our
nominees and our proposal to amend the bylaws to prohibit for three years the
re-nomination or appointment by the Board of a director who has been voted
down
by the shareholders.
This
is an opportunity to make a statement to the full Board that these kinds of
actions are not acceptable to you! It’s now up to you to hold the full Board and
Mr. Vinod Gupta accountable.
Even
if
you have already voted a White proxy card, you
have every right to change your mind.
Simply
sign, date and return the enclosed BLUE
proxy
card. Remember, only your latest dated proxy card counts!
Thank
you
for your support.
Very
truly yours,
/s/
Donald
T.
Netter
Donald
T.
Netter
Senior
Managing Director
IMPORTANT
NOTE:
Remember,
if you hold your shares in a bank or brokerage firm, you may be able to vote
by
telephone or Internet -
Please
review the enclosed voting form to determine if these voting options are
available to you.
If
you
have any questions, or need assistance in voting your shares, please call
our
proxy solicitor:
INNISFREE
M&A INCORPORATED
TOLL-FREE
at 1-888-750-5834