Definitive Additional Materials
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Definitive Additional Materials
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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)
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P
R E S S R E L E A S E
Contact: Arthur
B.
Crozier
Innisfree
M&A Incorporated
(212)
750-5833
DOLPHIN
ISSUES 5th
REPORT TO ALL infoUSA
STOCKHOLDERS
NO
BUSINESS SUPPORT FOR $4.9 MILLION OF PRIVATE JET
CHARGES;
NO
BOARD OR COMMITTEE MINUTES APPROVING SIZABLE
TRANSACTIONS
$28
MILLION OF RELATED PARTY AND DIRECT PAYMENTS
CATALOGUED
DOLPHIN
ISSUES 7TH
BOOKS & RECORDS REQUEST REGARDING ISSUANCE
OF
3.2 MILLION OPTIONS (6% OF COMPANY) TO MR. VINOD GUPTA
AND
ANY BIDDERS THAT MAY HAVE APPROACHED infoUSA
STAMFORD,
CONNECTICUT, May 18, 2006 - Dolphin Limited Partnership I, L.P., and Dolphin
Financial Partners, L.L.C. which together hold 2.0 million shares (3.6%) of
infoUSA
Inc.
(NASDAQ : IUSA), today issued its 5th
report
to all stockholders regarding:
l
Private
jet usage
from 1999-2005 and paid by infoUSA either to Mr. Vinod Gupta’s
affiliate or directly to the provider. The Company has not yet provided full
documentation for 1998;
l The
lack
of documented Board or Committee approvals for significant “related party”
transactions and transactions in which infoUSA
made
payments to third-parties with respect to assets owned by affiliates of Mr.
Vinod Gupta;
l $28
million of related party transactions and third-party payments for the 80-foot
yacht, private jets, real property, a skybox, luxury cars, consulting fees,
loans, “service charges for travel services”, personal life insurance premiums
and residences, all involving Mr. Vinod Gupta. A full cataloguing by year and
category is now available
for all stockholders on our Web site: www.iusaccountability.com.
Private
Jet Usage 1999-2005
In
its
review of approximately $10.3 million of private jet usage from 1999-2005,
Dolphin found:
1.
NO
BUSINESS SUPPORT for approximately $4.9 million of these charges, in violation
of the Company’s own Travel Policy/Guidelines. These charges primarily say
“business development”, “IUSA”, “Corporate Travel” or have no stated explanation
whatsoever.
2.
As we
have seen with other assets that we have reported on, the VAST MAJORITY of
these
private jet charges were also approved by Mr. Vinod Gupta, himself.
3.
For
2004 and 2005, infoUSA
spent
additional shareholder funds of $5.3 million to acquire the jet aircraft
interests that at the time were owned by Mr. Vinod Gupta’s affiliate. There are
NO BOARD OR COMMITTEE MINUTES specifically approving these sizable transactions.
Lack
of Board or Committee Minutes Authorizing and Approving Significant
Transactions
In
fact,
there are NO BOARD OR COMMITTEE MINUTES specifically authorizing or approving
the 2005 acquisition of $182,000 of luxury cars that were leased by Aspen
Leasing, Mr. Vinod Gupta’s company, and the assumption of the $2.2 million lease
on the American Princess 80-foot yacht previously held by Annapurna Corporation,
also Mr. Vinod Gupta’s company. (Both referred to in the February, 2005 Raval
memo.)
In
fact,
the Company has been unable to produce ANY BOARD OR COMMITTEE MINUTES
authorizing or approving any 1998 and 1999 “Related Party” transactions
including when infoUSA
paid
$1.9 million in consulting payments to Mr. Vinod Gupta and/or his affiliates,
and a $.3 million loan for which we don’t see any evidence of its repayment.
Remember, 1998 and 1999 are two years in which Mr. Vinod Gupta made $48,000
in
salary but his affiliates received $1.4 million for “travel and consulting
services and related expenses” and $4.0 million for “reimbursement of company
related travel expenses”, “acquisitions and other related expenses” and
“investment advisory fees”, respectively.
In
fact,
for the entries covered in Dolphin’s review, THERE ARE NO BOARD OR COMMITTEE
MINUTES AUTHORIZING OR APPROVING ANY SPECIFIC RELATED PARTY TRANSACTIONS OR
PAYMENTS TO THIRD PAYMENTS regarding assets of Mr. Vinod Gupta’s affiliates
other than (i) the 2003 acquisition of the skybox and (ii) the 2001 acquisition
of the Everest Building by assuming the mortgage from another of Mr. Vinod
Gupta’s affiliates, Everest Investment Management, Inc. We already presented to
you the Board minutes reflecting the long after-the-fact “rubber stamp”
acquisition of the skybox (also on our website). Today we are posting the
minutes surrounding the acquisition of the Everest building. This acquisition
occurred on October 9, 2001, but the Audit Committee approved it on October
15,
2001. Again, an after-the-fact “rubber stamp”. In addition, as you will see,
Director Harold Andersen chaired this meeting and executed the resolution.
Also
at this time, Director Andersen was a trustee of the Everest Funds and, as
we
previously disclosed to you in the Raval memo, Director Andersen also occupied
space in the Everest building without charge, along with PKWARE (Director George
Haddix’s Company), Everest, Director Walker and Annapurna Corporation, Mr. Vinod
Gupta’s wholly-owned corporation. Director Andersen left the Board in November,
2005.
The
failure of the Board or its Committee to maintain minutes authorizing or
approving such sizable transactions appears to demonstrate to us, at a minimum,
a failure of even the most basic element of sound corporate governance.
With
a
Board that has had 15 director departures in the last decade, it appears to
us
that Mr. Vinod Gupta can do whatever he pleases.
Summary
Findings on $28.7 Million of Related Party and Direct Payments by
infoUSA
This
table (now available on our website) catalogues each year’s charges aggregating
$28.7 million as summarized below:
Summary
of infoUSA
“Related Party” and Direct Payments
For
Assets Used By Mr. Vinod Gupta
1998-2005
($
Millions)
Related
Party payments included in infoUSA’s
proxy statements $
15.6
Related
Party payments not included in infoUSA’s
proxy statements .9
Payments
by infoUSA
to
third parties regarding assets
used
by
Mr. Vinod Gupta and his affiliates 1.1
infoUSA
Acquisition of related party or assets previously owned
by
a Mr.
Vinod Gupta Affiliate
11.1
Total $
28.7
===
l
In
Dolphin’s May
5, 2006 release, we show how the Company’s proxy statement disclosures for
2004’s “related party” transactions are not fully and accurately
reported.
We
found the
same problem with the $15.6 million. (See table and related footnotes on our
website.)
.
l We
found
an additional approximate $900,000 of “related party” payments that are not in
the numbers in the Company’s proxy statements;
l As
previously highlighted, with respect to the February 8, 2005 memo of Dr.
Raval:
-It
fails
to investigate infoUSA payments to third parties regarding assets of Mr. Vinod
Gupta’s affiliates. We
found $1.1 million of such payments.
-It
fails
to review the usage of the private jets and the 80-foot yacht. We did! As
previously reported, there was no support whatsoever for the business usage
of
the yacht in violation of the
Company’s own Travel Policy/Guidelines. Incredibly, in our review, approximately
50% of the private jet usage also has NO BUSINESS SUPPORT.
-The
Board’s strategy of acquiring the “related party” assets in our view does not
provide more oversight, but less disclosure to you. In
fact, infoUSA
acquired directly or indirectly approximately $11.1 million of such assets
from
Mr. Vinod Gupta and his affiliates.
InfoUSA’s
spending of $28.7 million of your money on these kinds of assets with almost
NO
BOARD OR COMMITTEE MINUTES documenting their specific consideration or approval,
and where there are minutes, they are after-the-fact, like a “rubber stamp”,
further demonstrates, in Dolphin’s view, a full Board that has failed to hold
Mr. Vinod Gupta accountable.
Dolphin’s
independent and highly qualified nominees will!
Given
infoUSA’s
twin record of poor operating performance and poor corporate governance, can
unaffiliated shareholders really afford not to vote for Dolphin’s three highly
qualified and independent nominees and the bylaw amendment?
VOTE THE BLUE PROXY CARD.
On
May
12, 2006 Dolphin issued its 7th
supplemental books and records request relating to the issuance of stock options
on nearly 6% of the Company to Mr. Vinod Gupta and whether bidders other than
Mr. Vinod Gupta approached infoUSA
and,
if so, whether those bids were considered by the Board. The request is intended
to explore whether the Board deliberated on these matters in good faith and
consistent with the Board’s fiduciary duties. Dolphin will present its findings
on these matters as appropriate and subject to the terms of the Confidentiality
Agreement and the provisions of the Delaware Court of Chancery.