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-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 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:
(INFOUSA LOGO)
INFOUSA INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 21, 2003
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the 2003 Annual Meeting of Stockholders of
infoUSA Inc., a Delaware corporation (the "Company"), will be held on Monday,
April 21, 2003, at 5:00 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 three 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,
2003; 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 5, 2003
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,
/s/ FRED VAKILI
Fred Vakili
Secretary
Omaha, Nebraska
March 21, 2003
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 2003 Annual Meeting of Stockholders
to be held on Monday, April 21, 2003, at 5:00 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 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 are being mailed on or about March
21, 2003 to all stockholders entitled to vote at the meeting. The Company's
Annual Report for the fiscal year ended December 31, 2002, 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 5, 2003 (the
"Record Date") are entitled to receive notice of and vote at the meeting. On the
Record Date, 51,165,410 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
stockholder
1
will be entitled to vote for three nominees and the three 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 2004 Annual Meeting must be received by the Company no later than
November 23, 2003 to be included in the proxy statement and form of proxy for
that meeting. The Company's proxy for the 2004 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 2004 Annual Meeting that are
received after February 5, 2004.
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.
Additionally, any stockholder wishing to recommend candidates for Board
membership generally should submit the recommendation in writing to the
Secretary of the Company at least 30 but no more than 60 days prior to the
Annual Meeting, with the submitting stockholder's name, address and
stockholdings and pertinent information about the proposed nominee. 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 February 12, 2003 (as
disclosed in the Proxy Statement for the 2002 Annual Meeting).
2
PROPOSAL ONE
ELECTION OF DIRECTORS
GENERAL
The Company's Board of Directors presently consists of seven directors
and is divided into three classes, one of which has three directors and two of
which have two directors, with the term of office of one class expiring each
year. The terms of office of Vinod Gupta, George F. Haddix and Dr. Vasant H.
Raval expire at this year's Annual Meeting. The terms of office of Harold W.
Andersen and Elliot S. Kaplan expire at the 2004 Annual Meeting and the terms of
office of Richard J. Borda and Dennis P. Walker expire at the 2005 Annual
Meeting.
The Company is proposing that the stockholders re-elect the three
directors whose terms expire this year (Messrs. Gupta and Haddix and Dr. Raval)
for terms expiring at the 2006 Annual Meeting. Proxies cannot be voted for a
greater number of persons than the number of nominees named.
Dr. Raval was appointed to the Board in October 2002 and Messrs. Borda
and Walker were appointed to the Board in February 2003 to fill vacancies
created by director resignations.
VOTE REQUIRED
The three nominees receiving the highest number of affirmative votes of
the shares represented at the Annual Meeting in person or by proxy and entitled
to vote 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 three 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
Vinod Gupta 56 Chairman of the Board and Chief Executive 1972 2006
Officer of the Company
George F. Haddix(2)(3) 64 Director; Individual Investor 1995 2006
Dr. Vasant H. Raval(1) 63 Director; Professor and Chair, Department 2002 2006
of Accounting, at Creighton University
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
(3) Member of the Governance and Nominating 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.
GEORGE F. HADDIX has served as a director of the Company since March
1995. Mr. Haddix is Chief Executive Officer and Chairman of PKW Holdings, Inc.
and PKWARE, INC., computer software companies headquartered in Brown Deer,
Wisconsin. 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
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.
DR. VASANT H. RAVAL has served as a director of the Company since
October 2002. Mr. Raval has been Professor and Chair of the Department of
Accounting at Creighton University since July 2001. He joined the Creighton
University faculty in 1981 and has served as Professor of Accounting and
Associate Dean and Director of Graduate Programs at the College of Business
Administration.
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. Andersen (1)(2)(3) 79 Director; Contributing Editor to Omaha 1993 2004
World Herald and Retired Publisher of Omaha
World Herald Company.
Elliot S. Kaplan 66 Director; Senior Partner in law firm of 1988 2004
Robins, Kaplan, Miller & Ciresi L.L.P.
Richard J. Borda(1) 71 Director; Retired 2003 2005
Dennis P. Walker(2)(3) 57 Director; President and Chief Executive 2003 2005
Officer of Jet Linx Aviation.
----------------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
(3) Member of the Governance and Nominating 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.
RICHARD J. BORDA has served as a director of the Company since February
2003. Prior to his retirement in 1990, Mr. Borda was Vice Chairman and Chief
Financial Officer of National Life Insurance Company from 1985 to 1990, and
Chairman and Chief Executive Officer of Sentinel Group Funds, Inc. from 1986 to
1990. Mr. Borda is also a director of two mutual funds in the Sentinel Group
Funds, Inc. family, and has 25 years experience in the banking industry,
including serving as Executive Vice President of Wells Fargo Bank. Mr. Borda
holds an A.B. in Economics and an M.B.A. from Stanford University.
DENNIS P. WALKER has served as a director of the Company since February
2003. Mr. Walker has been President and Chief Executive Officer of Jet Linx
Aviation, a corporate jet fractional ownership company, since May 1999. From
1988 to 2002, he was Executive Vice President of Memberworks, Inc., a company
which he co-founded. Mr. Walker has also held senior level marketing positions
with First Data Resources and IBM.
5
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of six meetings
during 2002. The Board of Directors has an Audit Committee and a Compensation
Committee. The Board has a Governance and Nominating Committee which was
established in January 2003.
The Audit Committee, which currently consists of directors Harold W.
Andersen, Richard J. Borda and Dr. Vasant H. Raval, met six times in 2002. 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 Dennis P. Walker, met two times during
2002. 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.
The Governance and Nominating Committee, which currently consists of
directors Harold W. Andersen, Dennis P. Walker and George F. Haddix, was created
in January 2003. This committee has been delegated the duties of evaluating
Board governance practices and making Board membership recommendations. The
committee will consider candidates recommended by shareholders in light of the
committee's established criteria for director candidates so long as such
recommendations comply with the procedures described in "Deadlines for Receipt
of Stockholder Proposals" above.
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.
BOARD COMPENSATION
Non-employee directors receive an annual cash retainer of $48,000,
payable in monthly installments of $4,000 each. Additionally, at the date of
each Annual Meeting of the Stockholders of the Company, each person who is
elected a director at such meeting, or whose term as a director continues after
such meeting, is automatically 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
are fully vested at the date of grant, and expire on the fifth anniversary of
the grant. Employee directors do not receive compensation for their service on
the Board.
6
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 ............................... 19,881,660 38.1%
5711 South 86th Circle
Omaha, NE 68127
Liberty Wanger Asset Management, L.P. ..... 3,271,200 6.4%
227 West Monroe Street, Suite 3000
Chicago, Illinois 60606-5016
Liberty Acorn Trust........................ 2,685,000 5.2%
227 West Monroe Street, Suite 3000
Chicago, Illinois 60606
FMR Corp................................... 3,407,617 6.7%
82 Devonshire Street
Boston, Massachusetts 02109
Harold W. Andersen(2)...................... 130,515 **
Richard J. Borda........................... -0- **
George F. Haddix........................... 292,215 **
Elliot S. Kaplan........................... 261,495 **
Dr. Vasant H. Raval........................ -0- **
Dennis P. Walker........................... -0- **
Allen F. Ambrosino(3)...................... 368,173 **
William L. Kerrey(4)....................... 232,079 **
Edward C. Mallin........................... 75,052 **
Monica Messer.............................. 595,739 1.2%
Michael J. Morreale(5)..................... 77,466 **
All directors and executive officers as
a group (18 persons).................... 22,688,647 42.3%
-------------
** 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,
1,016,660 shares; Mr. Andersen, 71,915 shares; Mr. Haddix, 71,915 shares;
Mr. Kaplan, 77,915 shares; Mr. Ambrosino, 220,914 shares; Mr. Mallin,
37,998 shares; Ms. Messer, 320,914 shares; Mr. Morreale, 75,120 shares; Mr.
Kerrey, 123,079 shares; and all directors and executive officers as a
group, 2,416,626 shares.
7
(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.
(4) Mr. Kerrey resigned in June 2002 but served as an independent contractor
through the remainder of 2002.
(5) Mr. Morreale resigned in January 2003.
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, 2003.
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
KPMG LLP billed the Company an aggregate of $244,000 for the annual
audit for fiscal year 2002 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 2002.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEE
KPMG LLP did not bill the Company for any services relating to
financial systems design and implementation for the Company performed in
fiscal year 2002.
ALL OTHER FEES
KPMG LLP billed the Company an aggregate of $225,000 for professional
services related to acquisition due diligence work, retirement plans and
employee 401(k) plan audits, 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.
8
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, 2002 filed
with the Securities and Exchange Commission.
AUDIT COMMITTEE
Harold W. Andersen
Richard J. Borda
Dr. Vasant H. Raval
9
PERFORMANCE GRAPH
The following Performance Graph compares the cumulative total return to
stockholders of the Company's Common Stock from December 31, 1997 to December
31, 2002 to the cumulative total return over such period of (i) The Nasdaq Stock
Market (U.S. Companies) Index, (ii) the S&P Data Processing Index, and (ii)
through December 31, 2001 only, the JPMorgan H&Q Technology Index (formerly
known as the "Chase H&Q Technology Index"). The Company is replacing the
JPMorgan H&Q Technology Index with the S&P Data Processing Services Index
because the former index was discontinued in 2002. 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,
S&P DATA PROCESSING SERVICES INDEX
AND JPMORGAN H&Q TECHNOLOGY INDEX
(GRAPH)
31-DEC-97 31-DEC-98 31-DEC-99 31-DEC-00 31-DEC-01 31-DEC-02
--------- --------- --------- --------- --------- ---------
infoUSA Common Stock** $100 $ 51.22 $136.00 $ 32.98 $ 67.71 $ 48.49
NASDAQ (U.S. Companies) $100 $140.99 $261.48 $157.42 $124.89 $ 86.33
S&P Data Processing Services Index $100 $116.07 $158.08 $190.92 $207.84 $147.73
JPMorgan H&Q Technology Index $100 $155.54 $347.38 $224.57 $155.23 ***
* Assumes $100 invested on December 31, 1997 in infoUSA Inc. Common Stock,
Nasdaq Stock Market (U.S. Companies) Index, S&P Data Processing Services
Index and JPMorgan H&Q Technology Index.
** In October 1997, the Company reclassified its existing Common Stock as
Class B Common Stock, authorized a new class of Common Stock designated
Class A Common Stock (together, the "Reclassification") and declared a
dividend of one share of Class A Common Stock for each share of Class B
Common Stock outstanding (the "Stock Dividend"). The Stock Dividend had the
effect of a two-for-one stock split. In October 1999, the Company combined
its Class A and Class B Common Stock. The information set forth above for
periods prior to the combination reflects the historical trading
information of the Class B Common Stock.
*** Discontinued in 2002.
The information contained in the Performance Graph will not be deemed
to be "soliciting material" or to be "filed" with the SEC, nor will such
information be incorporated by reference into any future filing under the
Securities Act of 1933, as amended (the "Securities Act"), or the Securities and
Exchange Act of 1934, as amended (the "Exchange Act"), except to the extent that
the Company specifically incorporates it by reference into any such filing.
10
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation paid by the Company for
fiscal years 2002, 2001 and 2000 to the Company's Chief Executive Officer, each
of the other four most highly compensated executive officers of the Company, and
William L. Kerrey, who would have been one of the four most highly compensated
executive officers of the Company but for his resignation from the Company in
June 2002 (together, the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation ------------
----------------------- Stock All Other
Name and Principal Position Year Salary ($) Bonus($) Options (#) Compensation($)
--------------------------- ---- ---------- -------- ----------- ---------------
Vinod Gupta................................. 2002 560,000(1) 430,000 500,000 5,500
Chairman and Chief Executive Officer 2001 96,000(1) -0- 1,200,000 2,400
2000 96,000(1) -0- -0- 2,262
Allen F. Ambrosino.......................... 2002 300,000 104,458 200,000 -0-
President, Donnelly Marketing 2001 300,000 66,078 124,000 -0-
2000 300,000 107,219 -0- -0-
Edward C. Mallin............................ 2002 300,000 176,980 20,000 5,500
President, Walter Karl 2001 295,000 164,024 54,000 5,100
2000 250,000 151,500 20,000 5,100
Monica Messer............................... 2002 300,000 25,000 200,000 5,500
Chief Operations Officer and Chief 2001 300,000 -0- 49,000 5,100
Information Officer, Database and 2000 295,000 -0- -0- 5,100
Technology Group
Michael J. Morreale (2)..................... 2002 250,000 94,458 -0- 5,500
Vice President, Donnelly Marketing 2001 250,000 60,269 18,000 5,100
2000 200,000 201,030 -0- 5,100
William L. Kerrey (3)....................... 2002 324,231(4) 40,738(5) -0- 5,500
President, Database Licensing 2001 300,000 164,466 124,000 5,100
2000 300,000 275,000(5) 20,000 5,100
-----------
(1) 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.
(2) Mr. Morreale resigned in January 2003.
(3) Mr. Kerrey resigned in June 2002 but served as an independent contractor
through the remainder of 2002.
(4) Includes $35,769 paid vacation and $150,000 paid to James Company, which is
owned by Mr. Kerrey.
(5) Includes $40,738 paid to James Company in 2002 and $50,000 paid to James
Company in 2000.
11
OPTION GRANTS IN THE LAST FISCAL YEAR
The following table sets forth each grant of stock options made during
the year ended December 31, 2002 to each of the Named Executive Officers:
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
-----------------
PERCENT OF TOTAL MARKET POTENTIAL REALIZABLE VALUE
OPTIONS OPTIONS GRANTED TO PRICE AT ASSUMED ANNUAL RATES OF
GRANTED EMPLOYEES IN EXERCISE ON GRANT EXPIRATION STOCK PRICE APPRECIATION
NAME (#) FISCAL YEAR PRICE ($) DATE ($) DATE FOR OPTION TERM($)(2)
---- ---------- ------------------ --------- -------- ---------- --------------------------
5% 10%
------- -------
Vinod Gupta ............... 500,000(1) 38.5% $10.00 $7.14 05/03/07 -- 749,521
Allen F. Ambrosino ........ 200,000(1) 15.4% $10.00 $7.14 05/03/07 -- 299,808
Edward C. Mallin .......... 20,000(1) 1.5% $10.00 $7.14 05/03/07 -- 29,981
Monica Messer ............. 200,000(1) 15.4% $10.00 $7.14 05/03/07 -- 299,808
Michael J. Morreale ....... -0- -- -- -- -- -- ---
William L. Kerrey ......... -0- -- -- -- -- -- ---
---------
(1) Figures represent options under the 1997 Stock Option Plan, which vest and
become exercisable as follows: 25% vest on the first anniversary of the
date of grant. The remaining 75% of the options vest and become exercisable
equally over the next 36 months, provided that the optionee continues to be
employed by the Company.
(2) Potential realizable value is based on an assumption that the market price
of the underlying security appreciates at the annual rate shown (compounded
annually) from the date of grant until the end of the option term. These
numbers are calculated based on the requirements promulgated by the SEC and
do not reflect the Company's estimate of future stock price growth.
12
OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
The following table sets forth, for each of the Named Executive
Officers, the value realized on exercised options and the year-end value of
unexercised options:
AGGREGATED OPTION EXERCISES
AND DECEMBER 31, 2002 OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-
UNDERLYING UNEXERCISED THE-MONEY OPTIONS
SHARES OPTIONS AT 12/31/02(#) AT 12/31/02 ($)(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------ ----------- ------------- ----------- -------------
Vinod Gupta .............. -0- -0- 774,995 1,325,005 -0- -0-
Allen F. Ambrosino ....... -0- -0- 207,664 226,336 -0- -0-
Edward C. Mallin ......... -0- -0- 88,195 40,085 -0- -0-
Monica Messer ............ -0- -0- 299,329 234,671 -0- -0-
Michael J. Morreale ...... -0- -0- 75,120 27,755 -0- -0-
William L. Kerrey ........ -0- -0- 163,079 -0- -0- -0-
----------------
(1) Based on the market price of $4.97 per share of Common Stock on
December 31, 2002.
EQUITY COMPENSATION PLAN TABLE
The following table sets forth aggregate information regarding grants
under all equity compensation plans of the Company as of December 31, 2002:
NUMBER OF SECURITIES
REMAINING AVAILABLE FOR FUTURE
NUMBER OF SECURITIES TO BE WEIGHTED-AVERAGE ISSUANCE UNDER EQUITY
ISSUED UPON EXERCISE OF EXERCISE PRICE OF COMPENSATION PLANS
OUTSTANDING OPTIONS, OUTSTANDING OPTIONS, (EXCLUDING SECURITIES REFLECTED
WARRANTS AND RIGHTS WARRANTS AND RIGHTS IN COLUMN (a))
PLAN CATEGORY (a) (b) (c)
------------- -------------------------- -------------------- -------------------------------
Equity compensation plans
approved by security holders 5,560,384 $8.08 901,753
Equity compensation plans not
approved by security holders -0- N/A -0-
--------- ----- --------
Total 5,560,384 $8.08 901,753
13
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. The Compensation Committee consisted of Directors Harold W.
Andersen, George F. Haddix and Elliot S. Kaplan during fiscal year 2002, and
will consist of Directors Harold W. Andersen, George F. Haddix and Dr. Vasant H.
Raval during fiscal year 2003. 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 2002, 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 2002, 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 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 2002, the compensation of Vinod Gupta, Chief Executive
Officer of the Company, consisted of a base salary of $560,000 and an incentive
bonus based on the Company's achievement of a certain level of EBITDA (earnings
before interest, taxes, depreciation and amortization). Pursuant to this bonus
plan, Mr. Gupta earned a cash bonus of $290,000 for fiscal 2002. In addition,
the Company awarded Mr. Gupta a discretionary bonus of $140,000 for fiscal 2002
in recognition of his services to the Company during 2002. Mr. Gupta does not
participate in the Company's other bonus programs. In establishing Mr. Gupta's
compensation program, the Compensation Committee compared his compensation with
the compensation of chief executive officers of other companies deemed by the
Compensation Committee to be comparable to the Company. Mr. Gupta's incentive
bonus plan was designed to align his incentives with the Company's business
goals.
In establishing the compensation of the Chief Executive Officer, the
Compensation Committee also reviewed and considered certain business
relationships between the Company
14
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 SEC 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
Dennis P. Walker
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, 2002, all Section 16(a) filing
requirements applicable to its officers, directors and 10% stockholders were
timely complied with.
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
$2.2 million, $2.1 million and $2.0 million in 2002, 2001 and 2000,
respectively, to Annapurna Corporation for usage of the aircraft and other
travel expenses. The amounts billed by Annapurna Corporation for the aircraft
usage are comparable to the fees charged by other outside providers. The Company
capitalized acquisition costs related to these payments of $0.6 million, $49
thousand and $0.6 million in 2002, 2001 and 2000, respectively.
Mr. Gupta was eligible for a cash bonus in 2002 based on Company
performance. The criteria for Mr. Gupta's bonus was that he would receive 10% of
the Company's adjusted EBITDA in excess of $80 million. In January 2002, the
Company paid 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. The advance was to be applied to part or all of
his 2002 bonus, if performance criteria are met, or paid back by Mr. Gupta
within the next 12 months. In May 2002, Mr. Gupta paid back $0.6 million of the
original advance, leaving an advance balance of $0.9 million. At
15
December 31, 2002, it was determined that Mr. Gupta was to receive a bonus of
$0.4 million. The remaining balance of $0.5 million is classified as "Officer
Note Receivable" on the Company's balance sheet.
During 2002, the Company paid Everest Asset Management $415 thousand
for acquisition-related expenses on certain acquisition transactions. Everest
Asset Management is 100% owned by Mr. Gupta.
The Company paid Everest Investment Management $120 thousand in 2001
for rented office space in a building adjacent to the Company's facility.
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 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, which
was at fair market value.
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 made loans to the following executive
officers to facilitate the exercise of stock options held by such individuals:
Allen F. Ambrosino ($400,000), Stormy Dean ($80,000), William L. Kerrey
($120,000), Monica Messer ($100,000), D.J. Thayer ($80,000) and Fred Vakili
($100,000). 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. Mr. Kerrey,
who ceased to be employed by the Company in 2002, and Mr. Thayer have repaid
their notes in full.
16
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 21, 2003
17
APPENDIX
INFOUSA INC.
ANNUAL MEETING OF STOCKHOLDERS
MONDAY, APRIL 21, 2003
5:00 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 APRIL 21, 2003 OR
ANY ADJOURNMENTS THEREOF.
The shares of the Company's Common Stock you hold as of the record date on March
5, 2003 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 5, 2003 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 April 21, 2003.
See reverse for voting instructions.
Please detach here
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
1. Election of directors (with 01 Vinod Gupta [ ] Vote FOR [ ] Vote WITHHELD
terms expiring 2006): 02 George F. Haddix all nominees from all nominees
03 Dr. Vasant H. Raval (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
-----------------------------------
-----------------------------------------------
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.