Database provider InfoGroup Inc. will sell the company yacht as one of the first steps in a plan to rein in expenses after forcing the company founder out as chairman.
But founder Vin Gupta, who controls 40 percent of the company's stock, will remain chief executive of the Omaha-based company, which used to be named InfoUSA. The changes are being made in response to a Securities and Exchange Commission investigation and shareholder lawsuit.
InfoGroup outlined its plan in an SEC filing Wednesday, a day after announcing some changes in a news release.
InfoGroup's stock jumped 9 percent, or 44 cents, to close at $5.35 Wednesday.
Gupta also agreed not to buy additional InfoGroup stock through July 21, 2009, and he will pay the company $9 million over the next five years.
InfoGroup spokesman Howard Opinsky said the payment from Gupta is subject to court approval as part of a future settlement agreement with the shareholders who sued the company.
Opinsky said neither Gupta nor the new chairman, Bill Fairfield, were available for interviews Wednesday. Fairfield had been InfoGroup's lead independent director and he is chairman of DreamField Partners Inc.
The SEC is investigating spending by the database marketer and certain trades of company stock. And a shareholder lawsuit alleges company misspent millions _ some of it on former President Bill Clinton and his wife, New York senator Hillary Clinton.
The internal board committee that has been investigating the problems at InfoGroup also asked three board members, George Haddix, Elliot Kaplan and Vasant Raval, to resign.
And Gupta agreed to support any new board members the nominating committee recommends though the company's 2010 annual meeting.
The new expense policy will prohibit using company money to pay for personal travel or entertainment, and no personal use of company planes or yachts will be allowed unless it is reimbursed.
And any related-party transactions between InfoGroup and any business affiliated with an executive or large shareholder will require pre-approval from the board if they cost more than $120,000.
In the past, InfoGroup had made sizable payments to a company Gupta owned called Annapurna Corp. for use of a jet plane, the 80-foot yacht American Princess, condos in Hawaii and California and a University of Nebraska stadium box.
InfoGroup eventually took over the lease of what it calls a boat and invested in fractional ownership in a jet from NetJets. Previously, Gupta had said the jet, condos, stadium box and American Princess are for entertaining clients.
The company's new policy will prohibit owning or leasing yachts.
InfoGroup also said it would appoint a new chief financial officer, replacing Stormy Dean, who will be moved into a new position dealing with corporate strategy and planning.
The company plans to hire a new executive vice president to supervise legal compliance who will report directly to the new chairman. That person will also develop new ethics policies for the company.
Investment manager Cardinal Value Equity Partners and hedge fund Dolphin Limited Partnership filed the lawsuit last year. Rob Kirkpatrick, a managing director for Cardinal, declined to comment Wednesday. A representative for Dolphin also declined to comment.
According to the lawsuit, InfoUSA has spent nearly $900,000 since 2001 flying the Clintons to domestic and international locations and political events.
Gupta has been a major donor to Democrats and gave at least $1 million to Bill Clinton's presidential library in Arkansas. Gupta also took part in a fundraiser for Hillary Clinton in Manhattan in June 2007.
The investment funds have also complained in the past about Gupta's 2005 offer to buy out the company for $11.75 a share because a few months earlier, Gupta had told shareholders he thought the stock was worth $18.
After the board rejected Gupta's offer, he withdrew it, and the board of directors voted against looking for other buyers.
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On the Net:
InfoUSA Inc.: http://www.infousa.com
Dolphin's anti-InfoGROUP site: http://www.iusaccountability.com
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