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For
Immediate Release
Contact:
Arthur B. Crozier
Innisfree
M&A Incorporated
212-750-5833
DOLPHIN
SAYS THAT ISS RECOMMENDS SHAREHOLDERS VOTE FOR ALL DOLPHIN NOMINEES AND BY-LAW
AMMENDMENT AT INFOUSA’S ANNUAL MEETING
STAMFORD,
CONNECTICUT, May 16, 2006 - Dolphin Limited Partnership I, L.P. and Dolphin
Financial Partners which together own 2.0 million shares, or 3.6% of
infoUSA
Inc.
(NASDAQ: IUSA), today announced that Institutional Shareholder Services (ISS),
the nation’s leading independent proxy voting advisory and corporate governance
service, has recommended that infoUSA
stockholders vote for all Dolphin nominees and by-law amendment and against
management’s incumbent directors at the Company’s Annual Meeting of Stockholders
on May 26, 2006.
“It
is
time to get the vote out,” said Donald T. Netter, Senior Managing Director of
Dolphin. “Nearly 51% of shares are held by professional investors and
institutions, including Dolphin. By voting at the 2006 annual meeting, we can
bring about the ‘objectivity, accountability and fairness towards shareholders,’
which ISS believes are necessary for this Company.”
“We
strongly urge all investors to vote the BLUE proxy card today in favor of our
three independent and highly qualified Directors - Malcolm M. ‘Mick’ Aslin, Karl
Meyer, and Robert Trevisani and our by-law amendment proposal.”
“The
issues are crystal clear. As noted by ISS, infoUSA
has a
twin record of poor operating results and poor corporate governance. We urge
shareholders to vote for the Dolphin nominees and their plan to build value
thorough accountability,” said Mr. Netter. “We thank ISS for their support and
we appreciate their careful review of the infoUSA
record.”
ISS
provides proxy advisory services to institutional investors, mutual funds,
and
other fiduciaries worldwide. The ISS report dated May 15, 2006 says in part:
“Representatives
of the company claim that the current board can manage a ‘larger than life’ CEO.
The evidence seems to cast some doubt on this assertion. IUSA trades at a
discount to its peers, perhaps reflecting a ‘poor governance discount’, as
reflected in the high director turnover, the large amount of related party
transactions, and the poison pill exemption for Mr. Gupta.”
“A
board
that sets up a special committee to independently examine a takeover bid should
not disband that committee solely because it comes to a conclusion that is
unpalatable to those that are outside the committee; to hold otherwise would
be
to imply that a special committee exists solely to rubber-stamp a
process.”
“Of
course, it is difficult to identify with certainty the reasons for a trading
multiple discount, but one possible explanation is the dissident’s contention
that there is a “Gupta discount” holding down the IUSA share price. Although the
company share price has tracked its peers, shareholders could reasonably argue
that IUSA shares should have outperformed its peers but for the discount
effect.”
“Corporate
governance and operational and financial performance can go hand in hand. A
company with poor governance practices may ignore viewpoints other than those
of
an imperial CEO, allowing strategic missteps to linger longer than they
should.”
“At
best,
the nomination of insider-selected candidates is poor optics; at worst, it
raises the specter of cronyism or an “old boys network” that may result in a
board that may not oversee management with the detachment necessary to make
objective decisions that are in the best interests of
shareholders.”
“If
the
board continues to grant options to Mr. Gupta (the last grant was in March
2005), then the ability for Mr. Gupta to conduct a creeping takeover will only
be exacerbated. As long as there is no cap on Mr. Gupta’s share ownership, he
will be able to exercise ever-increasing levels of control over the company
without paying a control premium to shareholders. Once Mr. Gupta crosses the
50%
threshold, he will be able to exercise absolute control over IUSA.”
“Dr.
Haddix [an infoUSA
nominee] told us that he believes that the current board can manage a (in his
terms) “larger than life” CEO. The evidence seems to cast some doubt on this
assertion. For example, Dr. Haddix admitted to us that the board was not happy
that Mr. Gupta made his public statement that the company was worth more than
$18 a share, agreed with the dissidents that the $11.75 bid was “opportunistic,”
and regretted Mr. Gupta’s statement that his low-ball offer was made merely to
support the stock price. This fact pattern hints at a CEO who is not concerned
with what his board will think of his actions.”
“After
reviewing the facts and circumstances as outlined above, we believe that IUSA
shareholders would be best served by voting for the dissident slate. In our
opinion, the IUSA board needs an injection of objectivity, accountability and
fairness towards shareholders. The dissidents’ skill sets and track record
indicate that they could help to effect such change.”
infoUSA
stockholders should sign, date and return the BLUE
proxy
card FOR
Dolphin’s nominees and by-law amendment at the upcoming Annual Meeting of
Stockholder on May 26, 2006.
If you
have any questions, or would like assistance in voting your shares, please
contact the company that is helping us with this most important election,
Innisfree M&A Incorporated, at 1-888-750-5834.
Dolphin
encourages all stockholders to visit their Web site www.iusaccountability.com
to learn
more about Dolphin’s nominees and their plan to build stockholder value and to
see important original documents involving Mr. Vinod Gupta and the infoUSA
Board, which Dolphin obtained as part of an extensive books and records grant
through the Court
of
Chancery of the State of Delaware on April 13, 2006.