<PAGE>
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended 12-31-96
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OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-6605
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EQUIFAX INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
GEORGIA 58-0401110
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1600 Peachtree St., N.W., Atlanta, GA 30309
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code (404) 885-8000
-----------------------------
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
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Common Stock
($1.25 Par Value) New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act: None
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(TITLE OF CLASS)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS. YES [X] NO [_]
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405
OF REGULATION S-K (SECTION 229.405 OF THIS CHAPTER) IS NOT CONTAINED HEREIN, AND
WILL NOT BE CONTAINED, TO THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE
PROXY OR INFORMATION STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS
FORM 10-K OR ANY AMENDMENT TO THIS FORM 10-K. [_]
AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES OF THE
REGISTRANT, COMPUTED BY REFERENCE TO THE CLOSING SALES PRICE ON THE NEW YORK
STOCK EXCHANGE ON MARCH 25, 1997: $4,221,054,675.
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S CLASSES OF
COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE.
Class Outstanding at March 25, 1997
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COMMON STOCK, $1.25 PAR VALUE 151,950,736
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DOCUMENTS INCORPORATED BY REFERENCE
THE PROXY STATEMENT FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL
30, 1997, IS INCORPORATED BY REFERENCE, TO THE EXTENT INDICATED UNDER ITEMS 10,
11, 12, AND 13, INTO PART III OF THIS FORM 10-K.
<PAGE>
PART I
ITEM 1. BUSINESS
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Equifax Inc. is a holding company which conducts its actual business operations
through the use of subsidiary companies. The Company's business areas are
divided into separate groups and are conducted on a "profit center" basis with
self-contained functional integrity, although Equifax Inc. continues to supply
centralized overall financial, legal, public relations, tax and similar
services.
The Company was founded as a credit reporting agency under the name "Retail
Credit Company" in Atlanta, Georgia, in 1899. Over the next several years, the
Company established itself in the area of investigation of applicants for
insurance. The business grew, and by 1920, the Company had numerous branch
offices throughout the United States and Canada. Since that time, the Company
has continued to expand and diversify by means of internal development and
strategic acquisitions. In late 1975, the Company changed its name from "Retail
Credit Company" to "Equifax Inc." The specific products and services presently
offered by the Company are described below under the respective Company segment
headings.
Since January 1993, the Company has had an open market stock repurchase program.
During 1996, the Company repurchased 4,614,000 shares at a cost of $105,550,000.
Reference is made to acquisitions and investments in unconsolidated affiliates
reported in Note 2 of the Notes to Consolidated Financial Statements, included
as Exhibit 13.3 in Part IV, Item 14 of this report, which is hereby incorporated
by reference. During the fourth quarter of 1996, the Company divested its
healthcare information business operations.
In October 1996, the Company announced international expansion developments
including activity in India, Thailand and Mexico, as well as agreements to
provide services in Asia, the Pacific Rim, Hungary and Hong Kong.
In December 1996, the Company announced its intention to divest its Insurance
Services Group through the issuance of a special stock dividend to its
shareholders. Distribution of this dividend is contingent upon, among other
things, the receipt of a ruling by the Internal Revenue Service that such
distribution constitutes a tax-free dividend to shareholders. Assuming a
favorable response is received, this spinoff is anticipated to occur in mid-year
1997.
Reference is made to industry segment information reported in Note 12 of the
Notes to Consolidated Financial Statements, included in Part II, Item 8 of this
report, which is hereby incorporated by reference.
A description of the Company's products or services by industry segment follows:
Credit Services Segment
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This segment includes Equifax Credit Information Services, Inc. and its wholly-
owned subsidiaries Credit Northwest Corporation; Equifax Marketing Decision
Systems, Inc.; Market Knowledge, Incorporated; and Rochester Credit Center.
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<PAGE>
The Company's principal class of service for this segment is informational
services for consumer credit report purposes. Customers include retailers,
banks, financial institutions, utilities, telecommunications companies,
petroleum companies, travel and entertainment card companies, auto finance and
leasing firms, automobile dealers and rental companies, hotels and motels,
educational institutions and mortgage lenders. In 1996, this class of service
accounted for 18.6% of the Company's total operating revenue, as compared with
19.0% in 1995, and 20.9% in 1994.
Companies in this segment primarily furnish consumer credit reporting services,
but also provide decision support and credit management services designed to
meet specific customer needs. This includes consumer credit reporting
information, credit card marketing services, risk management, collection
services, locate services, fraud detection and prevention services and mortgage
loan origination information. Other services include PC-based marketing
systems, psychographic and geo-demographic modeling systems, mapping tools,
strategic consulting to database marketing and management systems and computer
modeling and analytical services, both domestically and internationally.
Distribution of information to customers is made primarily through electronic
data interfaces.
The Company's consumer credit services operations, including non-owned affiliate
bureaus, compete with two other large automated credit reporting organizations -
Experian Corporation and Trans Union Corporation.
Payment Services Segment
- ------------------------
This segment includes Equifax Payment Services, Inc. and its wholly-owned
subsidiaries Equifax Check Services, Inc.; Equifax Card Services, Inc.; Equifax
Card Services (Madison), Inc.; Credit Union Card Services, Inc.; Light
Signatures, Inc.; Financial Insurance Marketing Group, Inc.; First Bankcard
Systems, Inc.; and Tecnicob, S.A.
The Company's principal class of service for this segment is credit and debit
card services, which includes credit and debit card authorization and
processing, credit card marketing enhancements, and software products for credit
card, merchant and collection processing. In 1996, this class of service
accounted for 10.8% of the Company's total revenue, as compared with 9.0% in
1995 and 8.0% in 1994. Other services provided are check authorization
services, which include on-line warranty or verification of checks written at
the point of sale. Card Services customers include banks, credit unions and
savings institutions. Card software product customers are diverse and include
some of the world's largest financial institutions. Check Services customers
include national and regional retail chains, hotels and motels, automobile
dealers and rental car companies and other retail companies.
Companies in this segment are leading providers of their products and services
in the United States although competition is considerable.
Business in this segment is seasonal to some extent. The volume of check payment
services and credit and debit card processing is highest during the Christmas
shopping season and during other periods of increased consumer spending.
International Operations Segment
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This segment consists of Acrofax Inc.; Equifax Canada Inc. and its wholly-owned
subsidiaries Equifax Canada (AFX) Inc. and Telecredit Canada, Inc.; Equifax
Europe (U.K.) Ltd.; Equifax Europe Ltd., UAPT-
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<PAGE>
Infolink plc; The Infocheck Group Ltd.; Equifax South America, Inc.; Transax
plc.; Equifax India Private Ltd.; and Equifax Mauritius Private Limited. Also
included in this segment are ASNEF-Equifax (49% owned); Organizacion Veraz
(33.3% owned); and DICOM S.A. (50% owned).
The Company's principal class of service for this segment is consumer and
commercial credit reporting outside the United States.
The companies in this segment primarily provide consumer and commercial credit
services, but also provide other financial services. In Canada, financial
services include consumer and business credit reporting information, accounts
receivable and collection and check warranty services. In Europe (primarily the
United Kingdom), consumer and business credit reporting and marketing services,
credit scoring and modeling services, and check warranty and auto lien
information services are provided. In South America, commercial, financial and
medical information are provided in addition to consumer credit services.
Customers include retailers, banks, financial institutions, utilities and
telecommunications companies, petroleum companies, travel and entertainment card
companies, auto finance and leasing firms, automobile dealers and rental
companies, hotels and motels, educational institutions and mortgage lenders.
Equifax Canada Inc. is clearly the market leader in providing consumer and
commercial credit information in Canada. In the United Kingdom, Equifax has the
largest share of the consumer and business credit information market, while
Transax is the check warranty market share leader. ASNEF-Equifax is a leader in
providing credit information services in Spain and Portugal. VERAZ is the
leading information provider in Argentina, while DICOM is the leading provider
in Chile.
Insurance Services Segment
- --------------------------
This segment consists of various business units of Equifax Services Inc.; Osborn
Laboratories, Inc.; Osborn Laboratories (Canada) Inc.; The Kit Factory, Inc.;
Mid-American Technologies, Inc.; Programming Resources Company; and CDB Infotek
(70%).
The Company's principal class of service for this segment is providing
information for insurance underwriting purposes. In 1996, this class of service
accounted for 27.2% of the Company's total operating revenue, as compared with
26.4% in 1995 and 25.9% in 1994.
Equifax Services Inc. provides most major domestic life and health insurance
companies with various informational services for help in determining the
classification of applicants as risks for life and health insurance and for
assistance in settling claims. Services include life and health underwriting
reports, paramedical exams, health measurements, medical history reports,
specimen testing, drug screening collection services, claim investigations and
employment background screenings. The Company also provides similar
informational services to major property and casualty and commercial insurance
companies including motor vehicle records, automated claim information for
automobile and property insurers, and on-line access to public court records and
business filings. Automated property and automobile claim information is also
provided in the United Kingdom to property and casualty insurers. The Company
also provides customized decision support and rule-based risk management
services, including software rating applications for commercial and personal
line insurers and commercial property evaluations. This information is used by
insurance companies in evaluating applicants as risks and as
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an aid in determining the applicable rates. Distribution of information to
customers is primarily made through electronic data interfaces.
Insurance services customers include most major domestic life and health and
property and casualty and commercial insurance companies as well as independent
agents. Public record and employment and background screening services are
offered to all major domestic companies. Major insurers in the United Kingdom
use the automated databases.
The Company currently ranks as the leading provider of risk management
information for insurance companies, while Osborn is the second largest domestic
laboratory of its kind. Many smaller organizations, which focus on a limited
number of services and which, in some cases, are concentrated in small
geographic areas, provide fragmented competition. CDB Infotek is a leading
provider of on-line public record information.
General Information Services Segment
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In the fourth quarter of 1996, the Company divested its healthcare information
businesses which included Medical Credentialing Verification Services; Equifax
Healthcare EDI Services, Inc.; Equifax Healthcare Analytical Services, Inc. and
Equifax Healthcare Administrative Services, Inc. Two non-healthcare information
businesses, Equifax Government and Special Systems, Inc. and High Integrity
Systems, Inc. were retained.
The Company's principal class of service for this segment was providing
healthcare information services.
Companies in this segment provided healthcare information services and furnished
a broad range of informational and administrative services which included
electronic claims processing, physician profiling, claims auditing, claim
analysis, administration and utilization management, electronic remittance,
hospital bill audits and medical credentials verification.
Equifax Healthcare Information Services, Inc., Equifax Healthcare Analytical
Services, Inc., Equifax Healthcare EDI Services, Inc., and Equifax Healthcare
Administrative Services, Inc. provided services to health care providers
(hospitals and physicians), managed care organizations, health plan managers,
insurers, purchasers and payers of group health coverage and governmental
agencies.
High Integrity Systems, Inc., which the Company retained, was originally formed
to provide a lottery management system for the California State Lottery.
Reference is made to Note 4 of the Notes to Consolidated Financial Statements,
included in Part II, Item 3 of this report, for a more detailed discussion.
Competition is strong in all of the above areas. Companies offering healthcare
services possess relatively small shares or compete in young and growing
markets. Other than stated above, competition in these areas is difficult to
describe and information concerning such conditions is not material to a general
understanding of the Company's business.
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The principal methods of competition for the Company are price, scope, speed and
ease of service and reliability of the information furnished.
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<PAGE>
None of the Company's segments is dependent on any single customer, and the
Company's largest customer provides less than 10% of the Company's total
revenues.
The Company had approximately 14,100 employees, as of December 31, 1996.
ITEM 2. PROPERTIES
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The Company is in a service industry and does not own any mines, extractive
properties or manufacturing plants. Thus, an understanding of the Company's
property holdings is not deemed to be material to an understanding to the
Company's business taken as a whole.
The Company owns a total of three office buildings, one of which is located in
La Habra, California, one in Wexford, Ireland and one in Salisbury, England.
The company also owns two office/laboratory facilities located in Olathe, Kansas
which are utilized by the Company's subsidiary, Osborn Laboratories, Inc. The
Company also owns approximately 46 acres in Windward Office Park located in
Alpharetta, Georgia adjacent to office space currently under lease by the
Company.
The Company ordinarily leases office space of the general commercial type for
conducting its business and is obligated under approximately 394 leases and
other rental arrangements for its headquarters and field locations. The
Company's operating leases involve principally office space and office
equipment. Rental expense relating to these leases was $52,796,000 in 1996,
$46,898,000 in 1995 and $46,534,000 in 1994. In March 1994, the company sold
and leased back under operating leases certain land and buildings. The net
sales price of $55.1 million approximated the net book value of the related
assets.
Future minimum payment obligations for noncancelable operating leases exceeding
one year are as follows as of December 31, 1996:
<TABLE>
<CAPTION>
(In thousands) Amount
- ----------------------------------
<S> <C>
1997 $37,546
1998 31,150
1999 24,928
2000 20,242
2001 16,665
Thereafter 107,931
--------
$238,462
========
</TABLE>
ITEM 3. LEGAL PROCEEDINGS
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Reference is made to Lottery Contract Dispute, Litigation, and Settlement
information reported in Note 4 of the Notes to Consolidated Financial
Statements, included in Part II, Item 8 of this report, which is hereby
incorporated by reference.
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<PAGE>
EXECUTIVE OFFICERS OF THE REGISTRANT
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The Company's executive officers, as of March 25, 1997, are listed below, with
certain information relating to each of them:
<TABLE>
<CAPTION>
Executive
Name and Position Officer
With Company Age Since
----------------- --- ---------
<S> <C> <C>
Daniel W. McGlaughlin, President and Chief Executive Officer* 60 1989
Thomas F. Chapman, Executive Vice President* 53 1991
Derek V. Smith, Executive Vice President* 42 1990
John T. Chandler, Corporate Vice President 49 1995
Ralph F. Haygood, Corporate Vice President 49 1993
Philip J. Mazzilli, Corporate Vice President, Treasurer & Controller 56 1995
David A. Post, Corporate Vice President & Chief Financial Officer 44 1996
Bruce S. Richards, Corporate Vice President & General Counsel 42 1996
Robert C. Varga, Corporate Vice President 49 1996
Marietta Edmunds Zakas, Corporate Vice President and Secretary 38 1995
</TABLE>
*Also serves as a Director
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<PAGE>
There are no family relationships among the officers of the Company, nor are
there any arrangements or understandings between any of the officers and any
other persons pursuant to which they were selected as officers. The Board of
Directors may elect an officer or officers at any meeting of the Board. Each
elected officer is selected to serve until their successors have been elected
and duly qualified. Election of officers occurs each year at the Board of
Directors meeting held in conjunction with the Annual Meeting of the
Shareholders.
Messrs. McGlaughlin, Chapman and Smith have each served as an officer of the
Company for at least five years. Mr. Haygood has served in various executive
capacities with the Company or its subsidiaries for more than five years before
becoming an officer.
Ms. Zakas, prior to her election as Corporate Vice President and Secretary in
October 1996, served as Corporate Vice President and Treasurer for the period
January 1996 through October 1996 and as Corporate Vice President-Investor
Relations for the period October 1995 through January 1996. Prior to that, she
served as Vice President and Director of Investor Relations of the Company since
September 1993. Prior to that, she served at Holiday Inn Worldwide, an
international hotel chain, as Director-Strategic Planning and Analysis from
1992-1993 and as Director-Project Finance from 1991-1992. From 1984 until 1991,
she worked at Morgan Stanley and Co., Incorporated, an investment banking firm,
as a Vice President in the areas of capital market services and corporate
finance.
Mr. Chandler, prior to his election as Corporate Vice President in October 1995,
served as Vice President-Compensation and Benefits Administration. Before
joining the Company in 1991, he served as vice president of executive
compensation and benefits for C&S/Sovran Corporation, a national bank, now known
as NationsBank, N.A., for a period of four years.
Mr. Mazzilli, prior to his election as Corporate Vice President and Controller
in October 1995, served as Vice President and Controller of the Company since
1992. Before joining the Company in 1992, he served as Vice President,
Management Services for the Equitable Life Insurance Company for a period of six
years.
Mr. Richards, prior to his election as Corporate Vice President and General
Counsel in October 1996, served as Senior Vice President and Group Counsel of
the Company's Financial Services Group. Prior to joining the Company in 1991,
Mr. Richards served as Vice President and General Counsel of Telecredit, Inc.
which was acquired by the Company in 1990.
Mr. Post, elected in October 1996, serves as Corporate Vice President and Chief
Financial Officer of the Company. Prior to this election, Mr. Post served as
Senior Vice President and Group Chief Financial Officer of the Company's
Financial Services Group since joining the Company in February 1992. Prior to
joining the Company, Mr. Post served as Senior Vice President and Controller for
Wachovia Corporation of Georgia since 1983.
Mr. Varga, who joined the Company in May 1995, serves as Corporate Vice
President of the Company and is responsible for corporate development, strategic
planning and management and quality systems. Prior to joining the Company, he
served as Chief of Staff to U.S. Representative John Linder from Georgia from
1993 through 1995, having previously served as his campaign manager.
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<PAGE>
PART II
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ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
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STOCKHOLDER MATTERS
-------------------
The Company's common stock is listed and traded on the New York Stock Exchange,
which is the principal market on which the stock is traded.
Dividends Per Share
<TABLE>
<CAPTION>
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Quarter 1990 1991 1992 1993 1994 1995 1996
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<S> <C> <C> <C> <C> <C> <C> <C>
First $0.060 $0.065 $0.065 $0.070 $0.070 $0.078 $0.083
Second 0.060 0.065 0.065 0.070 0.078 0.078 0.083
Third 0.060 0.065 0.065 0.070 0.078 0.078 0.083
Fourth 0.060 0.065 0.065 0.070 0.078 0.083 0.083
- ---------------------------------------------------------------------------------------------
Annual $0.240 $0.260 $0.260 $0.280 $0.303 $0.315 $0.330
- ---------------------------------------------------------------------------------------------
</TABLE>
Stock Prices
<TABLE>
<CAPTION>
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(In Dollars) 1992 1993 1994 1995 1996
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
High Low High Low High Low High Low High Low
First Quarter 9.375 7.500 11.188 9.563 13.688 10.938 17.000 12.625 22.500 17.750
Second Quarter 9.688 7.188 10.500 8.688 15.188 11.563 17.500 15.313 27.750 19.625
Third Quarter 8.563 7.188 13.063 9.875 15.125 13.375 21.063 16.313 27.375 24.125
Fourth Quarter 10.313 7.313 13.688 11.438 15.250 12.000 21.750 18.000 34.500 26.500
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Year 10.313 7.188 13.688 8.688 15.250 10.938 21.750 12.625 34.500 17.750
</TABLE>
As of March 25, 1997, there were approximately 9,000 holders of record of the
Company's common stock.
ITEM 6. SELECTED FINANCIAL DATA
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Reference is made to Exhibit 13.1, included in Part IV, Item 14 of this report,
which is hereby incorporated by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
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CONDITION AND RESULTS OF OPERATION
----------------------------------
Reference is made to Exhibit 13.2, included in Part IV, Item 14 of this report,
which is hereby incorporated by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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Reference is made to Exhibit 13.3, included in Part IV, Item 14 of this report,
which is hereby incorporated by reference.
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<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
- ------- -------------------------------------------------
ACCOUNTING AND FINANCIAL DISCLOSURE
-----------------------------------
None.
PART III
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ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
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The Company's Proxy Statement for the Annual Meeting of Shareholders to be held
on April 30, 1997, contains, on pages 2 through 5 and 18 thereof, information
relating to the Company's Executive Officers, Directors and persons nominated to
become Directors. This information is incorporated herein by reference and made
a part hereof. See also information concerning the Company's Executive Officers
in Part I, above.
ITEM 11. EXECUTIVE COMPENSATION
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The Company's Proxy Statement for the Annual Meeting of Shareholders to be held
on April 30, 1997, contains, on pages 8 through 16 thereof, information relating
to executive compensation. This information is incorporated herein by reference
and made a part hereof.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- -------- --------------------------------------------------------------
The Company's Proxy Statement for the Annual Meeting of Shareholders to be held
on April 30, 1997, contains, on page 7, information relating to security
ownership of certain beneficial owners and management. This information is
incorporated herein by reference and made a part hereof.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -------- ----------------------------------------------
The Company's Proxy Statement for the Annual Meeting of Shareholders to be held
on April 30, 1997, contains, on pages 5 and 6 thereof, information relating to
certain relationships and related transactions. This information is
incorporated herein by reference and made a part hereof.
PART IV.
--------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
- -------- ---------------------------------------------------------------
The following documents are filed as part of this report:
(a)1. Financial Statements
. Consolidated Balance Sheets - December 31, 1996 and 1995
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<PAGE>
. Consolidated Statements of Income for the Years Ended December 31,
1996, 1995 and 1994
. Consolidated Statements of Shareholders' Equity for the Years Ended
December 31, 1996, 1995 and 1994
. Consolidated Statements of Cash Flows for the Years Ended December
31, 1996, 1995 and 1994
. Notes to Consolidated Financial Statements
(a)2. Financial Statement Schedules
All schedules have been omitted because they are not applicable or the
required information is included in the consolidated financial
statements or notes thereto.
(a)3. Exhibits
Articles of Incorporation and By-laws
. Amended and Restated Articles of Incorporation (3 pages)/(7)/
. By-Laws (23 pages)
Instruments Defining the Rights of Security Holders, Including Indentures
. Loan Agreement (132 pages)/(6)/
. Portion of Prospectus and Trust Indenture (134 pages)/(1)/
. Rights Agreement, dated October 25, 1995, between Equifax Inc. and SunTrust
Bank, Atlanta with Form of Right Certificate attached as Exhibit "A" (54
pages)/(5)/
Material Contracts and Compensation Plans
. Equifax Inc. 1988 Performance Share Plan for Officers, as amended (14
pages)/(7)(8)/
. Equifax Inc. 1996 Incentive Compensation Plan (6 pages)/(8)/
. Deferred Compensation Plan (22 pages)/(6)(8)/
. Change in Control Agreement (10 pages)/(6)(8)/
. Change in Control Agreement (10 pages)/(8)/
. Executive Employment Agreement, dated June 22, 1989 (7 pages)/(8)/
. Executive Employment Agreement, dated July 1, 1991 (3 pages)/(8)/
. Executive Employment Agreement, dated December 29, 1995/(6)(8)/
. Consulting Agreement, dated January 1, 1996/(6)(8)/
. Executive Agreement, dated January 31, 1997 (9 pages)/(8)/
. Executive Agreement, dated October 30, 1996 (9 pages)/(8)/
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<PAGE>
. Equifax Inc. Omnibus Stock Incentive Plan 1996 Incentive and Non-Qualified
Stock Option Agreements (8 pages)/(8)/
. Equifax Inc. Omnibus Stock Incentive Plan, as amended (14 pages)/(6)(8)/
. Equifax Inc. Omnibus Stock Incentive Plan 1995 Incentive and Non-Qualified
Stock Option Agreements (8 pages)/(4)(8)/
. Equifax Inc. Omnibus Stock Incentive Plan 1994 Incentive and Non-Qualified
Stock Option Agreements (8 pages)/(3)(8)/
. Equifax Inc. Omnibus Stock Incentive Plan 1995 Non-Qualified Stock Option
Agreement (4 pages)/(4)(8)/
. Equifax Inc. Omnibus Stock Incentive Plan 1994 Restricted Stock Award
Agreement (4 pages)/(3)(8)/
. Equifax Inc. Omnibus Stock Incentive Plan 1995 Restricted Stock Award
Agreement (3 pages)/(4)(8)/
. Equifax Inc. Omnibus Stock Incentive Plan 1996 Restricted Stock Award
Agreement (3 pages)/(8)/
. Equifax Inc. Non-Employee Director Stock Option Plan and Agreement (10
pages)/(4)(8)/
. Equifax Inc. Supplemental Executive Retirement Plan (24 pages)/(4)(8)/
. Equifax Inc. Supplemental Executive Retirement Plan Amendments (26
pages)/(3)//(8)/
. Equifax Inc. Supplemental Executive Retirement Plan Amendment (2 pages)/(8)/
. Equifax Inc. Severance Pay Plan for Salaried Employees (18 pages)/(3)(8)/
. Agreement For Computerized Credit Reporting Services (204 pages)/(3)/
. Amendments to Agreement for Computerized Credit Reporting Services and
related documents (66 pages)
. Amendment to Agreement for Computerized Credit Reporting Services (8
pages)/(2)/
. Amendment to Agreement for Computerized Credit Reporting Services (9
pages)/(3)/
. Amendment to Agreement for Computerized Credit Reporting Services (14
pages)/(4)/
. Computer and network operations agreement (redacted version) (31 pages)/(3)/
. Purchase and Lease Agreement (109 pages)/(3)/
. Headquarters Facility Lease (77 pages)/(3)/
. Participation Agreement (148 pages)/(3)/
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<PAGE>
. Lease Agreement (71 pages)/(3)/
. Compensation of Directors - The Company's by-laws, which are filed as an
exhibit to this Form 10-K Annual Report, describe, on page 7 thereof,
under Article Two, "Compensation of Directors," the fees paid to
Directors of the Company. This information is hereby incorporated by
reference.
. Life Insurance - Messrs. C. B. Rogers, Jr. and L. A. Ault, III each own
a personal life insurance policy in the face amount of $1,000,000 and
$2,000,000, respectively. The Company pays the annual premiums on these
policies.
Annual Report to Security Holders
. Summary of Selected Financial Data (2 pages)
. Management's Discussion and Analysis of Financial Condition and Results
of Operation (9 pages)
. Financial Statements and Supplementary Data (25 pages)
Subsidiaries of the Registrant (6 pages)
Consent of Independent Public Accountants to incorporation by reference (1 page)
Financial Data Schedule (1 page)
/(1)/Previously filed as pages 8 through 16 and Exhibit 4.1 on Amendment No. 1
to Form S-3, Registration Statement No. 33-62820, filed June 17, 1993, and
hereby incorporated by reference.
/(2)/Previously filed as an exhibit on Form 10-K, filed March 30, 1993, and
hereby incorporated by reference.
/(3)/Previously filed as an exhibit on Form 10-K, filed March 31, 1994, as
amended on Form 10-K/A, filed October 14, 1994, and hereby incorporated by
reference.
/(4)/Previously filed as an exhibit on Form 10-K, filed March 30, 1995, and
hereby incorporated by reference.
/(5)/Previously filed as exhibits on Form 8-A, filed November 2, 1995, and
hereby incorporated by reference.
/(6)/Previously filed as an exhibit on Form 10-K, filed April 1, 1996, as
amended on Form 10-K/A, filed April 4, 1996, and hereby incorporated by
reference.
/(7)/Previously filed as an exhibit on Schedule 14A, filed March 26, 1996, and
hereby incorporated by reference.
/(8)/Management Contract or Compensatory Plan
-12-
<PAGE>
Copies of the Company's Form 10-K which are furnished pursuant to the written
request of the Company's shareholders do not include the exhibits listed above.
Any shareholder desiring copies of one or more such exhibits should write the
Secretary of the Company at P.O. Box 4081, Atlanta, Georgia 30302, specifying
the exhibit or exhibits and enclosing a check for the amount resulting from
multiplying $.50 times the number of pages (as indicated above) of the
exhibit(s) requested.
(b) Reports on Form 8-K
The Company filed one report on Form 8-K during the fourth quarter of the
year ended December 31, 1996.
-13-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
EQUIFAX INC.
Date March 31, 1997 By /s/ Marietta Edmunds Zakas
--------------------------------------
Marietta Edmunds Zakas,
Corporate Vice President
and Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Date March 31, 1997 /s/ C. B. Rogers, Jr.
-----------------------------------------
C. B. Rogers, Jr., Chairman of the
Board
Date March 31, 1997 /s/ Daniel W. McGlaughlin
-----------------------------------------
Daniel W. McGlaughlin, President,
Chief Executive Officer and Director
Date March 31, 1997 /s/ Thomas F. Chapman
-----------------------------------------
Thomas F. Chapman, Executive Vice
President and Director
Date March 31, 1997 /s/ Derek V. Smith
-----------------------------------------
Derek V. Smith, Executive Vice
President and Director
Date March 31, 1997 /s/ Philip J. Mazzilli
-----------------------------------------
Philip J. Mazzilli, Corporate Vice
President, Treasurer and Controller
(Principal Accounting Officer)
-14-
<PAGE>
Date March 31, 1997 /s/ Lee A. Ault
-----------------------------------------
Lee A. Ault, III, Director
Date March , 1997
-----------------------------------------
Ron D. Barbaro, Director
Date March 31, 1997 /s/ John L. Clendenin
-----------------------------------------
John L. Clendenin, Director
Date March , 1997
-----------------------------------------
A. W. Dahlberg, Director
Date March , 1997
-----------------------------------------
Robert P. Forrestal, Director
Date March 31, 1997 /s/ L. Phillip Humann
-----------------------------------------
L. Phillip Humann, Director
Date March 31, 1997 /s/ Tinsley H. Irvin
-----------------------------------------
Tinsley H. Irvin, Director
Date March 31, 1997 /s/ Larry L. Prince
-----------------------------------------
Larry L. Prince, Director
Date March 31, 1997 /s/ D. Raymond Riddle
-----------------------------------------
D. Raymond Riddle, Director
Date March , 1997
-----------------------------------------
Dr. Betty L. Siegel, Director
Date March 31, 1997 /s/ Dr. Louis W. Sullivan
-----------------------------------------
Dr. Louis W. Sullivan, Director
-15-
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER
-------
Articles of Incorporation and By-laws
3.1 . Amended and Restated Articles of Incorporation/(7)/
3.2 . By-Laws
Instruments Defining the Rights of Security Holders,
Including Indentures
4.1 . Loan Agreement/(6)/
4.2 . Portion of Prospectus and Trust Indenture /(1)/
4.3 . Rights Agreement, dated October 25, 1995, between Equifax
Inc. and SunTrust Bank, Atlanta with Form of Right
Certificate attached as Exhibit "A"/(5)/
Material Contracts and Compensation Plans
10.1 . Equifax Inc. 1988 Performance Share Plan for Officers,
as amended/(7)(8)/
10.2 . Equifax Inc. 1996 Incentive Compensation Plan/(8)/
10.3 . Deferred Compensation Plan/(6)(8)/
10.4 . Change in Control Agreement/(6)(8)/
10.5 . Change in Control Agreement/(8)/
10.6 . Executive Employment Agreement, dated June 22, 1989/(8)/
10.7 . Executive Employment Agreement, dated July 1, 1991/(8)/
10.8 . Executive Employment Agreement, dated
December 29, 1995/(6)(8)/
10.9 . Consulting Agreement, dated January 1, 1996/(6)(8)/
10.10 . Executive Agreement, dated January 31, 1997/(8)/
10.11 . Executive Agreement, dated October 30, 1996/(8)/
10.12 . Equifax Inc. Omnibus Stock Incentive Plan 1996 Incentive
and Non-Qualified Stock Option Agreements/(8)/
10.13 . Equifax Inc. Omnibus Stock Incentive Plan, as amended/(6)(8)/
10.14 . Equifax Inc. Omnibus Stock Incentive Plan 1995 Incentive
and Non-Qualified Stock Option Agreements/(4)(8)/
10.15 . Equifax Inc. Omnibus Stock Incentive Plan 1994 Incentive
and Non-Qualified Stock Option Agreements/(3)(8)/
<PAGE>
10.16 . Equifax Inc. Omnibus Stock Incentive Plan 1995
Non-Qualified Stock Option Agreement/(4)(8)/
10.17 . Equifax Inc. Omnibus Stock Incentive Plan 1994
Restricted Stock Award Agreement/(3)(8)/
10.18 . Equifax Inc. Omnibus Stock Incentive Plan 1995
Restricted Stock Award Agreement/(4)(8)/
10.19 . Equifax Inc. Omnibus Stock Incentive Plan 1996
Restricted Stock Award Agreement/(8)/
10.20 . Equifax Inc. Non-Employee Director Stock
Option Plan and Agreement/(4)(8)/
10.21 . Equifax Inc. Supplemental Executive Retirement Plan/(4)(8)/
10.22 . Equifax Inc. Supplemental Executive Retirement Plan
Amendments/(3)(8)/
10.23 . Equifax Inc. Supplemental Executive Retirement Plan
Amendment/(8)/
10.24 . Equifax Inc. Severance Pay Plan for Salaried
Employees/(3)(8)/
10.25 . Agreement For Computerized Credit Reporting Services/(3)/
10.26 . Amendments to Agreement for Computerized Credit Reporting
Services and related documents
10.27 . Amendment to Agreement for Computerized Credit Reporting
Services/(2)/
10.28 . Amendment to Agreement for Computerized Credit Reporting
Services/(3)/
10.29 . Amendment to Agreement for Computerized Credit Reporting
Services/(4)/
10.30 . Computer and network operations agreement (redacted
version)/(3)/
10.31 . Purchase and Lease Agreement/(3)/
10.32 . Headquarters Facility Lease/(3)/
10.33 . Participation Agreement/(3)/
10.34 . Lease Agreement/(3)/
. Compensation of Directors - The Company's by-laws, which are
filed as an exhibit to this Form 10-K Annual Report,
describe, on page 7 thereof, under Article Two, "Compensation
of Directors," the fees paid to Directors of the Company.
Said information is hereby incorporated by reference.
. Life Insurance - Messrs. C. B. Rogers, Jr. and L. A. Ault,
III each own a personal life insurance policy in the face
amount of $1,000,000 and $2,000,000 respectively. The
<PAGE>
Company pays the annual premiums on said policies.
13.1 . Summary of Selected Financial Data
13.2 . Management's Discussion and Analysis of Operation Financial
Condition and Results of Operation
13.3 . Financial Statements and Supplementary Data
21 Subsidiaries of the Registrant
23 Consent of Independent Public Accountants to incorporation by
reference
27 Financial Data Schedule
/(1)/Previously filed as pages 8 through 16 and Exhibit 4.1 on Amendment No. 1
to Form S-3, Registration Statement No. 33-62820, filed June 17, 1993, and
hereby incorporated by reference.
/(2)/Previously filed as an exhibit on Form 10-K, filed March 30, 1993, and
hereby incorporated by reference.
/(3)/Previously filed as an exhibit on Form 10-K, filed March 31, 1994, as
amended on Form 10-K/A, filed October 14, 1994, and hereby incorporated by
reference.
/(4)/Previously filed as an exhibit on Form 10-K, filed March 30, 1995, and
hereby incorporated by reference.
/(5)/Previously filed as exhibits on form 8-A, filed November 2, 1995, and
hereby incorporated by reference.
/(6)/Previously filed as an exhibit on Form 10-K, filed April 1, 1996, as
amended on Form 10-K/A, filed April 4, 1996, and hereby incorporated by
reference.
/(7)/Previously filed as an exhibit on Schedule 14A, filed, March 26, 1996, and
hereby incorporated by reference.
/(8)/Management Contract or Compensatory Plan
<PAGE>
EXHIBIT 3.2
----------------------------------
EQUIFAX INC.
BYLAWS
----------------------------------
<PAGE>
EQUIFAX INC.
==================
BYLAWS
==================
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE ONE MEETINGS OF THE SHAREHOLDERS................... 1
Section 1.1 Annual Meeting................................. 1
Section 1.2 Special Meetings............................... 1
Section 1.3 Notice of Meetings............................. 1
Section 1.4 Voting Groups.................................. 1
Section 1.5 Quorum......................................... 1
Section 1.6 Vote Required for Action....................... 2
Section 1.7 Adjournments................................... 2
Section 1.8 Presiding Officer.............................. 2
Section 1.9 Voting of Shares............................... 2
Section 1.10 Proxies........................................ 2
Section 1.11 Record Date.................................... 3
Section 1.12 Shareholder Proposals and Nominations.......... 3
ARTICLE TWO BOARD OF DIRECTORS............................. 4
Section 2.1 General........................................ 4
Section 2.2 Number of Directors and Term of Office......... 5
Section 2.3 Election of Directors.......................... 5
Section 2.4 Vacancies...................................... 5
Section 2.5 Term Limits.................................... 5
Section 2.6 Stock Ownership Requirement.................... 6
Section 2.7 Meetings....................................... 6
Section 2.8 Special Meetings............................... 6
Section 2.9 Notice of Meetings............................. 6
Section 2.10 Quorum; Adjournments........................... 6
Section 2.11 Vote Required for Action....................... 6
Section 2.12 Action by Directors Without a Meeting.......... 7
Section 2.13 Compensation of Directors...................... 7
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE THREE ELECTIONS OF OFFICERS AND COMMITTEES........... 7
Section 3.1 Election of Officers........................... 7
Section 3.2 Executive Committee............................ 7
Section 3.3 Other Committees............................... 8
ARTICLE FOUR OFFICERS....................................... 8
Section 4.1 Officers....................................... 8
Section 4.2 Compensation of Officers....................... 9
Section 4.3 Chairman of the Board.......................... 9
Section 4.4 Vice Chairman of the Board..................... 9
Section 4.5 Chief Executive Officer........................ 9
Section 4.6 President...................................... 9
Section 4.7 Executive Vice Presidents...................... 10
Section 4.8 Vice Presidents................................ 10
Section 4.9 Treasurer...................................... 10
Section 4.10 Secretary...................................... 10
Section 4.11 Voting of Stock................................ 10
ARTICLE FIVE INDEMNIFICATION................................ 11
Section 5.1 Definitions.................................... 11
Section 5.2 Basic Indemnification Arrangement.............. 12
Section 5.3 Advances for Expenses.......................... 12
Section 5.4 Court-Ordered Indemnification and Advances for
Expenses....................................... 13
Section 5.5 Determination of Reasonableness of Expenses.... 13
Section 5.6 Indemnification of Employees and Agents........ 14
Section 5.7 Liability Insurance............................ 14
Section 5.8 Witness Fees................................... 14
Section 5.9 Report to Shareholders......................... 14
Section 5.10 No Duplication of Payments..................... 14
Section 5.11 Subrogation.................................... 14
Section 5.12 Contract Rights................................ 15
Section 5.13 Amendments..................................... 15
ARTICLE SIX CAPITAL STOCK.................................. 15
Section 6.1 Direct Registration of Shares.................. 15
Section 6.2 Certificates for Shares........................ 15
Section 6.3 Transfer of Shares............................. 16
Section 6.4 Duty of Company to Register Transfer........... 16
Section 6.5 Lost, Stolen or Destroyed Certificates......... 16
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
Section 6.6 Authorization to Issue Shares and Regulations
Regarding Transfer and Registration............ 16
ARTICLE SEVEN DISTRIBUTIONS AND DIVIDENDS.................... 17
Section 7.1 Authorization or Declaration................... 17
Section 7.2 Record Date with Regard to Distributions
and Share Dividends............................ 17
ARTICLE EIGHT MISCELLANEOUS.................................. 17
Section 8.1 Corporate Seal................................. 17
Section 8.2 Inspection of Books and Records................ 17
Section 8.3 Conflict with Articles of Incorporation or Code 17
Section 8.4 Severability................................... 17
ARTICLE NINE AMENDMENTS..................................... 18
Section 9.1 Amendments..................................... 18
ARTICLE TEN FAIR PRICE REQUIREMENTS........................ 18
Section 10.1 Fair Price Requirements........................ 18
ARTICLE ELEVEN BUSINESS COMBINATIONS.......................... 18
Section 11.1 Business Combinations.......................... 18
</TABLE>
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<PAGE>
BYLAWS OF EQUIFAX INC.
Revised to incorporate changes adopted by the Board of Directors
through its meeting held January 29, 1997, effective January 1, 1997
____________________
ARTICLE ONE
Meetings of the Shareholders
Section 1.1 Annual Meeting. The Annual Meeting of the Shareholders of the
Company shall be held during the first five months after the end of each fiscal
year of the Company at such time and place, within or without the State of
Georgia, as shall be fixed by the Board of Directors, for the purpose of
electing Directors and for the transaction of such other business as may be
properly brought before the meeting.
Section 1.2 Special Meetings Special meetings of the Shareholders may be held
at the principal office of the Company in the State of Georgia or at such other
place, within or without the State of Georgia, as may be named in the call
therefor. Such special meetings may be called by the Chairman of the Board of
Directors, the Vice Chairman, the President, the Board of Directors by vote at a
meeting, a majority of the Directors in writing without a meeting, or by
unanimous call of the Shareholders.
Section 1.3 Notice of Meetings. Unless waived in accordance with the Georgia
Business Corporation Code (the "Code"), a notice of each meeting of Shareholders
stating the date, time and place of the meeting shall be given not less than 10
days nor more than 60 days before the date thereof to each Shareholder entitled
to vote at that meeting. In the case of an Annual Meeting, the notice need not
state the purpose or purposes of the meeting unless the Articles of
Incorporation or the Code requires the purpose or purposes to be stated in the
notice of the meeting. Any irregularity in such notice shall not affect the
validity of the Annual Meeting or any action taken at such meeting. In the case
of a special meeting of the Shareholders, the notice of meeting shall state the
purpose or purposes for which the meeting is called, and only business within
the purpose or purposes described in such notice may be conducted at the
meeting.
Section 1.4 Voting Groups. Voting group means all shares of one or more
classes or series that are entitled to vote and be counted together collectively
on a matter at a meeting of Shareholders. All shares entitled to vote generally
on the matter are for that purpose a single voting group.
Section 1.5 Quorum. With respect to shares entitled to vote as a separate
voting group on a matter at a meeting of Shareholders, the presence, in person
or by proxy, of a majority of the votes entitled to be cast on the matter by the
voting group shall constitute a quorum of that voting group for action on that
matter unless the Articles of Incorporation or the Code provides otherwise.
Once a share is represented for any purpose at a meeting, other than solely to
object to holding the meeting or to transacting business at the meeting, it is
<PAGE>
deemed present for quorum purposes for the remainder of the meeting and for any
adjournment of the meeting unless a new record date is or must be set for the
adjourned meeting pursuant to Section 1.11 of these Bylaws.
Section 1.6 Vote Required for Action. If a quorum exists, action on a matter
(other than the election of Directors) is approved if the votes cast favoring
the action exceed the votes cast opposing the action, unless the Articles of
Incorporation, provisions of these Bylaws validly adopted by the Shareholders,
or the Code requires a greater number of affirmative votes. If the Articles of
Incorporation or the Code provide for voting by two or more voting groups on a
matter, action on that matter is taken only when voted upon by each of those
voting groups counted separately.
Section 1.7 Adjournments. Whether or not a quorum is present to organize a
meeting, any meeting of Shareholders (including an adjourned meeting) may be
adjourned by the holders of a majority of the voting shares represented at the
meeting to reconvene at a specific time and place, but no later than 120 days
after the date fixed for the original meeting unless the requirements of the
Code concerning the selection of a new record date have been met.
Section 1.8 Presiding Officer. The Chairman of the Board shall call the
meeting of the Shareholders to order and shall act as chairman of such meeting.
In the absence of the Chairman of the Board, the meeting shall be called to
order by any one of the following officers then present, in the following order:
the Vice Chairman of the Board, the Chief Executive Officer, the President, the
senior Executive Vice President, the next senior Executive Vice President, or
any one of the Vice Presidents, who shall act as chairman of the meeting. The
Secretary of the Company shall act as secretary of the meeting of the
Shareholders. In the absence of the Secretary, at any meeting of the
Shareholders, the presiding officer may appoint any person to act as secretary
of the meeting.
Section 1.9 Voting of Shares. Unless the Articles of Incorporation or the Code
provides otherwise, each outstanding share having voting rights shall be
entitled to one vote on each matter submitted to a vote at a meeting of
Shareholders.
Section 1.10 Proxies. A Shareholder entitled to vote pursuant to Section 1.9
may vote in person or by proxy pursuant to an appointment of proxy executed in
writing by the Shareholder. An appointment of proxy shall be valid for only one
meeting to be specified therein, and any adjournments of such meeting, but shall
not be valid for more than eleven months unless expressly provided therein.
Appointments of proxy shall be dated and filed with the records of the meeting
to which they relate. If the validity of any appointment of proxy is
questioned, it must be submitted for examination to the Secretary of the Company
or to a proxy officer or committee appointed by the Board of Directors. The
Secretary or, if appointed, the proxy officer or committee shall determine the
validity or invalidity of any appointment of proxy submitted, and reference by
the Secretary in the minutes of the meeting to the regularity of an appointment
of proxy shall be received as prima facie
-2-
<PAGE>
evidence of the facts stated for the purpose of establishing the presence of a
quorum at the meeting and for all other purposes.
Section 1.11 Record Date. For the purpose of determining Shareholders entitled
to notice of a meeting of the Shareholders, to demand a special meeting, to
vote, or to take any other action, the Board of Directors may fix a future date
as the record date, which date shall be not more than 70 days prior to the date
on which the particular action, requiring a determination of the Shareholders,
is to be taken. A determination of the Shareholders entitled to notice of or to
vote at a meeting of the Shareholders is effective for any adjournment of the
meeting unless the Board of Directors fixes a new record date, which it must do
if the meeting is adjourned to a date more than 120 days after the date fixed
for the original meeting. If no record date is fixed by the Board of Directors,
the 70th day preceding the date on which the particular action, requiring a
determination of the Shareholders, is to be taken shall be the record date for
that purpose.
Section 1.12 Shareholder Proposals and Nominations.
(a) No proposal for a Shareholder vote (other than a proposal that appears in
the Company's proxy statement after compliance with the procedures set forth in
Securities and Exchange Commission Rule 14a-8) shall be submitted by a
Shareholder (a "Shareholder Proposal") to the Company's Shareholders unless the
Shareholder submitting such proposal (the "Proponent") shall have filed a
written notice setting forth with particularity (i) the names and business
addresses of the Proponent and all natural persons, corporations, partnerships,
trusts or any other type of legal entity or recognized ownership vehicle
(collectively, a "Person") acting in concert with the Proponent; (ii) the name
and address of the Proponent and the Persons identified in clause (i), as they
appear on the Company's books (if they so appear); (iii) the class and number of
shares of the Company beneficially owned by the Proponent and by each Person
identified in clause (i); (iv) a description of the Shareholder Proposal
containing all material information relating thereto; and (v) such other
information as the Board of Directors reasonably determines is necessary or
appropriate to enable the Board of Directors and Shareholders of the Company to
consider the Shareholder Proposal. The presiding officer at any meeting of the
Shareholders may determine that any Shareholder Proposal was not made in
accordance with the procedures prescribed in these Bylaws or is otherwise not in
accordance with law, and if it is so determined, such officer shall so declare
at the meeting and the Shareholder Proposal shall be disregarded.
(b) Only persons who are selected and recommended by the Board of Directors or
the committee of the Board of Directors designated to make nominations, or who
are nominated by Shareholders in accordance with the procedures set forth in
this Section 1.12, shall be eligible for election, or qualified to serve, as
Directors. Nominations of individuals for election to the Board of Directors of
the Company at any Annual Meeting or any special meeting of Shareholders at
which Directors are to be elected may be made by any Shareholder of the Company
entitled to vote for the election of Directors at that meeting
-3-
<PAGE>
by compliance with the procedures set forth in this Section 1.12. Nominations
by Shareholders shall be made by written notice (a "Nomination Notice"), which
shall set forth (i) as to each individual nominated, (A) the name, date of
birth, business address and residence address of such individual; (B) the
business experience during the past five years of such nominee, including his or
her principal occupations and employment during such period, the name and
principal business of any corporation or other organization in which such
occupations and employment were carried on, and such other information as to the
nature of his or her responsibilities and level of professional competence as
may be sufficient to permit assessment of such prior business experience; (C)
whether the nominee is or has ever been at any time a director, officer or owner
of five percent or more of any class of capital stock, partnership interests or
other equity interest of any corporation, partnership or other entity; (D) any
directorships held by such nominee in any company with a class of securities
registered pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended, or subject to the requirements of Section 15(d) of such Act or any
company registered as an investment company under the Investment Company Act of
1940, as amended; and (E) whether such nominee has ever been convicted in a
criminal proceeding or has ever been subject to a judgment, order, finding or
decree of any federal, state or other governmental entity, concerning any
violation of federal, state or other law, or any proceeding in bankruptcy, which
conviction, order, finding, decree or proceeding may be material to an
evaluation of the ability or integrity of the nominee; and (ii) as to the Person
submitting the Nomination Notice and any Person acting in concert with such
Person, (X) the name and business address of such Person, (Y) the name and
address of such Person as they appear on the Company's books (if they so
appear), and (Z) the class and number of shares of the Company that are
beneficially owned by such Person. A written consent to being named in a proxy
statement as a nominee, and to serve as a Director if elected, signed by the
nominee, shall be filed with any Nomination Notice. If the presiding officer at
any meeting of the Shareholders determines that a nomination was not made in
accordance with the procedures prescribed by these Bylaws, such officer shall so
declare to the meeting and the defective nomination shall be disregarded.
(c) If a Shareholder Proposal or Nomination Notice is to be submitted at an
Annual Meeting of the Shareholders, it shall be delivered to the Secretary of
the Company at the principal executive office of the Company within the time
period specified in Securities and Exchange Commission Rule 14a-8(a)(3)(i).
Subject to Section 1.3 as to matters that may be acted upon at a special meeting
of the Shareholders, if a Shareholder Proposal or Nomination Notice is to be
submitted at a special meeting of the Shareholders, it shall be delivered to the
Secretary of the Company at the principal executive office of the Company no
later than the close of business on the earlier of (i) the 30th day following
the public announcement that a matter will be submitted to a vote of the
Shareholders at a special meeting, or (ii) the 15th day following the day on
which notice of the special meeting was given.
ARTICLE TWO
Board of Directors
-4-
<PAGE>
Section 2.1 General. Subject to the Articles of Incorporation, all corporate
powers shall be exercised by or under the authority of, and the business and
affairs of the Company shall be managed under the direction of, the Board of
Directors. In addition to the powers and authority expressly conferred upon it
by these Bylaws and the Articles of Incorporation, the Board of Directions may
exercise all such lawful acts and things as are not by law, by the Articles of
Incorporation or by these Bylaws directed or required to be exercised or done by
the Shareholders.
Section 2.2 Number of Directors and Term of Office. The number of Directors
shall be not less than nine, nor more than 20 Shareholders, and shall be fixed
within such range by the Board of Directors. The Directors shall be divided
into three classes, designated as Class I, Class II and Class III. Each class
shall consist, as nearly as may be possible, of one-third of the total number of
Directors constituting the entire Board of Directors. At each Annual Meeting of
the Shareholders, successors to the class of Directors whose term expires at
that Annual Meeting of Shareholders shall be elected for a three-year term. If
the number of Directors has changed, any increase or decrease shall be
apportioned among the classes so as to maintain the number of Directors in each
class as nearly equal as possible, and any additional Director of any class
elected to the Board of Directors to fill a vacancy resulting from an increase
in such a class shall hold office for a term that shall coincide with the
remaining term of that class, unless otherwise required by law, but in no case
shall a decrease in the number of Directors for a class shorten the term of an
incumbent Director. A Director shall hold office until the Annual Meeting of
Shareholders for the year in which such Director's term expires and until his or
her successor shall be elected and qualified, subject, however, to prior death,
resignation, retirement, disqualification or removal from office.
Section 2.3 Election of Directors. A Director shall be elected by a plurality
of the votes cast by the shares entitled to vote in the election at a meeting of
Shareholders at which a quorum is present.
Section 2.4 Vacancies. Any vacancy on the Board of Directors that results from
an increase in the number of Directors or from prior death, resignation,
retirement, disqualification or removal from office of a Director shall be
filled by a majority of the Board of Directors then in office, though less than
a quorum, or by the sole remaining Director. Any Director elected to fill a
vacancy resulting from prior death, resignation, retirement, disqualification or
removal from office of a director, shall have the same remaining term as that of
his or her predecessor.
Section 2.5 Term Limits. The Chairman of the Board may continue to serve as an
active Director after retirement as Chief Executive Officer of the Company until
reaching 70 years of age. Any other Director reaching 70 years of age (or 65
years of age for Directors who are also employees of the Company) or ceasing to
continue a regular business relationship (as defined below) shall automatically
retire from the Board, except that a non-
-5-
<PAGE>
employee Director who ceases to continue a regular business relationship may
continue serving as a Director until the next Annual Meeting of the Shareholders
or 70 years of age, whichever first occurs. Notwithstanding the preceding, a
non-employee Director may, at the request of the Chairman and if ratified by the
Board, continue to serve until age 70 if the Director continues in a position or
business activity that the Board determines would be of substantial benefit to
the Company. For purposes of this Section 2.5, the expression "regular business
relationship" means a relationship as an employee, consultant or officer of a
substantial business, professional or educational organization, which requires
exercise of business judgment on a regular basis, and which is not lower in
seniority than the position with such organization occupied by the Director at
the time of the Director's first election to the Board of Directors of the
Company.
Section 2.6 Stock Ownership Requirement. Every Director shall be a Shareholder
of the Company. Directors shall serve for the terms for which they are elected
and until their successors shall have been duly chosen, unless any such term is
sooner ended as herein permitted; provided, however, that if a Director ceases
to be a Shareholder, the disposition of the stock shall constitute a resignation
of the Director's office as a Director.
Section 2.7 Meetings. Regular meetings of the Board of Directors shall be held
on the last Wednesday in the months of January, April, July and October, if not
a legal holiday, or, if a legal holiday, then on the next succeeding day not a
legal holiday. When desirable to do so, the date of the meeting may be changed
on the approval of the Board of Directors or the Executive Committee.
Section 2.8 Special Meetings. Special meetings of the Board of Directors shall
be held whenever called by the direction of the Chairman of the Board, or in his
or her absence, by the Vice Chairman, or in his or her absence, by the
President. Special meetings of the Board may also be called by one-third of the
Directors then in office. Unless otherwise indicated in the notice thereof, any
and all business of the Company may be transacted at any special meeting of the
Board of Directors.
Section 2.9 Notice of Meetings. Unless waived in accordance with the Code,
notice of each regular or special meeting of the Board of Directors, stating the
date, time and place of the meeting, shall be given not less than two days
before the date thereof to each Director.
Section 2.10 Quorum; Adjournments. A majority of the Board of Directors shall
constitute a quorum for the transaction of business. Whether or not a quorum is
present to organize a meeting, any meeting of Directors (including a reconvened
meeting) may be adjourned by a majority of the Directors present, to reconvene
at a specific time and place. At any adjourned meeting, any business may be
transacted that could have been transacted at the meeting prior to adjournment.
If notice of the original meeting was properly given, it shall not be necessary
to give any notice of the adjourned meeting or of the business to
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be transacted if the date, time and place of the adjourned meeting are announced
at the meeting prior to adjournment.
Section 2.11 Vote Required for Action. If a quorum is present when a vote is
taken, the affirmative vote of a majority of Directors present is the act of the
Board of Directors unless the Code, the Articles of Incorporation, or these
Bylaws require the vote of a greater number of Directors.
Section 2.12 Action by Directors Without a Meeting. Any action required or
permitted to be taken at any meeting of the Board of Directors or any action
that may be taken at a meeting of a committee of the Board of Directors may be
taken without a meeting if the action is taken by all the members of the Board
of Directors or of the committee, as the case may be. The action must be
evidenced by one or more written consents describing the action taken, signed by
each Director or each Director serving on the committee, as the case may be, and
delivered to the Company for inclusion in the minutes or filing with the
corporate records.
Section 2.13 Compensation of Directors. Directors who are salaried officers or
employees of the Company shall receive no additional compensation for service as
a Director or as a member of a committee of the Board of Directors. Each
Director who is not a salaried officer or employee of the Company shall be
compensated as set forth below. A Director may also serve the Company in a
capacity other than that of Director or employee and receive compensation, as
determined by the Board of Directors, for services rendered in any other
capacity.
Subject to the above, (i) the Chairman of the Board shall receive a fee of
$7,500 per quarter, and each other Director shall receive a fee of $5,000 per
quarter, for services as a Director, (ii)the Chairman of the Executive Committee
shall receive an additional fee of $4,000 per quarter and any other member of
the Executive Committee shall receive an additional fee of $1,000 per quarter,
(iii)any Director who is chairman of any other committee elected or appointed by
the Board shall receive an additional fee of $1,000 per quarter, and (iv)each
Director shall also receive a fee of $1,000 for attendance at any meeting of the
Board or of a committee thereof. In addition, each Director who is not a
salaried officer or employee of the Company shall be entitled to receive stock
option awards as provided for under the Equifax Inc. Non-Employee Director Stock
Option Plan, or any successor plan or plans.
ARTICLE THREE
Elections of Officers and Committees
Section 3.1 Election of Officers. At the April meeting of the Board of
Directors in each year, or, if not done at that time, then at any subsequent
meeting, the Board of Directors shall proceed to the election of executive
officers of the Company, and of the Executive Committee, as hereinafter provided
for.
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Section 3.2 Executive Committee. The Board of Directors may elect from their
members an Executive Committee which shall include the Chairman of the Board,
the Chief Executive Officer, and the President. The Executive Committee shall
consist of not less than three nor more than five members, the precise number to
be fixed by resolution of the Board of Directors from time to time.
Each member shall serve for one year and until his or her successor shall have
been elected, unless that term is sooner terminated by the Board of Directors.
The Board of Directors shall fill the vacancies in the Executive Committee by
election. The Chairman of the Board, if there is one, or, if not the Chief
Executive Officer, shall be the Chairman of the Executive Committee.
All action by the Executive Committee shall be reported to the Board of
Directors at its meeting next succeeding such action, and shall be subject to
revision or alteration by the Board of Directors, provided that no rights or
interests of third parties shall be affected by any such revision or alteration.
The Executive Committee shall fix its own rules and proceedings, and shall meet
where and as provided by such rules or by resolution of the Board of Directors.
In every case, the affirmative vote of a majority of all the members of the
Committee shall be necessary to its adoption of any resolution.
Except as prohibited by the Code, during the interval between the meetings of
the Board of Directors, the Executive Committee shall possess and may exercise
all the powers of the Board in the management of all the affairs of the Company,
including the making of contracts, the purchase and sale of property, the
execution of legal instruments, and all other matters in which specific
direction shall not have been given by the Board of Directors.
Section 3.3 Other Committees. The Board of Directors is authorized and
empowered to appoint from its own body or from the officers of the Company, or
both, such other committees as it may think best, and may delegate to or confer
upon such committees all or such part of its powers except as prohibited by the
Code, and may prescribe the exercise thereof as it may deem proper.
ARTICLE FOUR
Officers
Section 4.1 Officers. The officers of the Company, unless otherwise provided
by the Board from time to time, shall consist of the following: a Chairman of
the Board, a Chief Executive Officer, a President, one or more Vice Presidents
(one or more of whom may be designated Executive Vice President, one or more of
whom may be designated Corporate Vice President and one or more of whom may be
designated Senior Vice President), a Treasurer, and a Secretary, who shall be
elected by the Board of Directors. The Board of Directors may from time to time
elect a Vice Chairman of the Board. The Board of Directors, or any officer to
whom the Board may delegate such authority, may also appoint
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such other officers as it or they may see fit, and may prescribe their
respective duties. All officers, however elected or appointed, may be removed
with or without cause by the Board of Directors, and any officer appointed by
another officer may also be removed, with or without cause, by the appointing
officer or any officer senior to the appointing officer. Any two or more of the
offices may be filled by the same person.
Section 4.2 Compensation of Officers. The Executive Committee shall approve
salaries of all elected officers and such other employees as may be designated
by the Executive Committee, except that salaries of members of the Executive
Committee shall be fixed by the Management Compensation Committee of the Board
of Directors or by the Board of Directors.
Section 4.3 Chairman of the Board. The Chairman of the Board of Directors
shall serve as Chief Executive Officer of the Company if so designated by the
Board of Directors. The Chairman of the Board shall preside at all meetings of
the Shareholders, the Board of Directors, and the Executive Committee. Except
where by law the signature of the Chief Executive Officer or President is
required, the Chairman of the Board shall have the same power as the Chief
Executive Officer or President to sign all authorized certificates, contracts,
bonds, deeds, mortgages, and other instruments. The Chairman of the Board shall
have such other powers and duties as from time to time may be assigned by the
Board of Directors.
Section 4.4 Vice Chairman of the Board. If the Chairman of the Board is not
designated Chief Executive Officer by the Board of Directors, then, if so
designated by the Board of Directors, the Vice Chairman shall serve as Chief
Executive Officer. It shall be the duty of the Vice Chairman of the Board, in
the absence of the Chairman of the Board, to preside at meetings of the
Shareholders, at meetings of the Directors, and at meetings of the Executive
Committee. The Vice Chairman shall do and perform all acts incident to the
office of Vice Chairman and, if so designated, those of Chief Executive Officer,
subject to the approval and direction of the Board of Directors.
Section 4.5 Chief Executive Officer. The Chief Executive Officer shall direct
the business and policies of the Company and shall have such other powers and
duties as from time to time may be assigned by the Board of Directors.
Section 4.6 President. The President shall be the Chief Operating Officer of
the Company and shall have general charge of the business of the Company subject
to the specific direction and approval of the Board of Directors or its Chairman
or Vice Chairman or the Executive Committee. If the Chairman or Vice Chairman
of the Board is not designated Chief Executive Officer by the Board of
Directors, the President shall also serve as Chief Executive Officer. In the
event of a vacancy in the office of Chairman and Vice Chairman of the Board or
during the absence or disability of both the Chairman and the Vice Chairman, the
President shall serve as Chief Executive Officer and shall have all of the
rights, powers and authority given hereunder to the Chairman of the Board. The
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President may sign all authorized certificates, contracts, bonds, deeds,
mortgages and other instruments, except in cases in which the signing thereof
shall have been expressly delegated to some other officer or agent of the
Company. In general, the President shall have the usual powers and duties
incident to the office of a president of a corporation and such other powers and
duties as from time to time may be assigned by the Board or Chairman or Vice
Chairman of the Board.
Section 4.7 Executive Vice Presidents. Each shall have authority, on behalf of
the Company, to execute, approve, or accept agreements for service, bids, or
other contracts, and shall sign such other instruments as each is authorized or
directed to sign by the Board of Directors or its Committee or by the Chief
Executive Officer or the President. Each shall do and perform all acts incident
to the office of the Executive Vice President of the Company or as may be
directed by its Board of Directors or its Committee or the Chief Executive
Officer or the President.
Section 4.8 Vice Presidents. There shall be one or more Vice Presidents of the
Company, as the Board of Directors may from time to time elect. Each Vice
President shall have such power and perform such duties as may be assigned by or
under the authority of the Board of Directors.
Section 4.9 Treasurer. The Treasurer shall be responsible for the custody of
all funds and securities belonging to the Company and for the receipt, deposit
or disbursement of funds and securities under the direction of the Board of
Directors. The Treasurer shall cause to be maintained full and true accounts of
all receipts and disbursements and shall make reports of the same to the Board
of Directors, the Chief Executive Officer, and the President upon request. The
Treasurer shall perform all duties as may be assigned from time to time by the
Board of Directors.
Section 4.10 Secretary. The Secretary shall be responsible for preparing
minutes of the acts and proceedings of all meetings of the Shareholders and of
the Board of Directors and any committees thereof. The Secretary shall have
authority to give all notices required by law or these Bylaws, and shall be
responsible for the custody of the corporate books, records, contracts and other
documents. The Secretary may affix the corporate seal to any lawfully executed
documents and shall sign any instruments as may require the Secretary's
signature. The Secretary shall authenticate records of the Company and shall
perform whatever additional duties and have whatever additional powers the Board
of Directors may from time to time assign. In the absence or disability of the
Secretary or at the direction of the Chief Executive Officer, any Assistant
Secretary may perform the duties and exercise the powers of the Secretary.
Section 4.11 Voting of Stock. Unless otherwise ordered by the Board of
Directors or Executive Committee, the Chairman of the Board, the Vice Chairman,
the President or any Executive Vice President of the Company shall have full
power and authority in behalf of the Company to attend and to act and to vote at
any meetings of shareholders of any
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corporation in which the Company may hold stock, and at such meetings may
possess and shall exercise any and all rights and powers incident to the
ownership of such stock which such owner thereof (the Company) might have
possessed and exercised if present. The Board of Directors or Executive
Committee, by resolution from time to time, may confer like powers upon any
other person or persons.
ARTICLE FIVE
Indemnification
Section 5.1 Definitions. As used in this Article, the term:
(a) "Company" includes any domestic or foreign predecessor
entity of the Company in a merger or other transaction in
which the predecessor's existence ceased upon consummation
of the transaction.
(b) "Director" or "Officer" means an individual who is or was a
member of the Board of Directors or an officer elected by
the Board of Directors, respectively, or who, while a
Director or Officer, is or was serving at the Company's
request as a director, officer, partner, trustee, employee,
or agent of another domestic or foreign corporation,
partnership, joint venture, trust, employee benefit plan,
or other entity. A Director or Officer is considered to be
serving an employee benefit plan at the Company's request
if his or her duties to the Company also impose duties on,
or otherwise involve services by, the Director or Officer
to the plan or to participants in or beneficiaries of the
plan. "Director" or "Officer" includes, unless the context
otherwise requires, the estate or personal representative
of a Director or Officer.
(c) "Disinterested Director" or "Disinterested Officer" means a
Director or Officer, respectively who at the time of an
evaluation referred to in subsection 5.5(b) is not:
(1) A Party to the Proceeding; or
(2) An individual having a familial, financial, professional,
or employment relationship with the person whose advance
for Expenses is the subject of the decision being made with
respect to the Proceeding, which relationship would, in the
circumstances, reasonably be expected to exert an influence
on the Director's or Officer's judgment when voting on the
decision being made.
(d) "Expenses" includes counsel fees.
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(e) "Liability" means the obligation to pay a judgment,
settlement, penalty, fine (including an excise tax assessed
with respect to an employee benefit plan), or reasonable
Expenses incurred with respect to a Proceeding.
(g) "Party" includes an individual who was, is, or is
threatened to be made a named defendant or respondent in a
Proceeding.
(h) "Proceeding" means any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal,
administrative, arbitrative or investigative and whether
formal or informal.
(i) "Reviewing Party" shall mean the person or persons making
the determination as to reasonableness of Expenses pursuant
to Section 5.5 of this Article, and shall not include a
court making any determination under this Article or
otherwise.
Section 5.2 Basic Indemnification Arrangement.
(a) The Company shall indemnify an individual who is a Party to a
Proceeding because he or she is or was a Director or Officer
against Liability incurred in the Proceeding; provided, however,
that the Company shall not indemnify a Director or Officer under
this Article for any Liability incurred in a Proceeding in which
the Director or Officer is adjudged liable to the Company or is
subjected to injunctive relief in favor of the Company:
(1) For any appropriation, in violation of his or her
duties, of any business opportunity of the Company;
(2) For acts or omissions which involve intentional
misconduct or a knowing violation of law;
(3) For the types of liability set forth in Section
14-2-832 of the Code; or
(4) For any transaction from which he or she received an
improper personal benefit.
(b) If any person is entitled under any provision of this Article to
indemnification by the Company for some portion of Liability
incurred, but not the total amount thereof, the Company shall
indemnify such person for the portion of such Liability to which
such person is entitled.
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Section 5.3 Advances for Expenses.
(a) The Company shall, before final disposition of a Proceeding,
advance funds to pay for or reimburse the reasonable Expenses
incurred by a Director or Officer who is a Party to a Proceeding
because he or she is a Director or Officer if he or she delivers
to the Company:
(1) A written affirmation of his or her good faith belief that
his or her conduct does not constitute behavior of the kind
described in subsection 5.2(a) above; and
(2) His or her written undertaking (meeting the qualifications
set forth below in subsection 5.3(b)) to repay any funds
advanced if it is ultimately determined that he or she is
not entitled to indemnification under this Article or the
Code.
(b) The undertaking required by subsection 5.3(a)(2) above must be an
unlimited general obligation of the proposed indemnitee but need
not be secured and shall be accepted without reference to the
financial ability of the proposed indemnitee to make repayment.
If a Director or Officer seeks to enforce his or her rights to
indemnification in a court pursuant to Section 5.4 below, such
undertaking to repay shall not be applicable or enforceable
unless and until there is a final court determination that he or
she is not entitled to indemnification, as to which all rights of
appeal have been exhausted or have expired.
Section 5.4 Court-Ordered Indemnification and Advances for Expenses. A
Director or Officer who is a Party to a Proceeding shall have the rights to
court-ordered indemnification and advances for expenses as provided in the Code.
Section 5.5 Determination of Reasonableness of Expenses.
(a) The Company acknowledges that indemnification of a Director or
Officer under Section 5.2 has been pre-authorized by the Company
as permitted by Section 14-2-859(a) of the Code, and that
pursuant to Section 14-2-856 of the Code, no determination need
be made for a specific Proceeding that indemnification of the
Director or Officer is permissible in the circumstances because
he or she has met a particular standard of conduct. Nevertheless,
except as set forth in subsection 5.5(b) below, evaluation as to
reasonableness of Expenses of a Director or Officer for a
specific Proceeding shall be made as follows:
(1) If there are two or more Disinterested Directors, by the
Board of Directors of the Company by a majority vote of all
Disinterested
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Directors (a majority of whom shall for such purpose
constitute a quorum) or by a majority of the members of a
committee of two or more Disinterested Directors appointed
by such a vote; or
(2) If there are fewer than two Disinterested Directors, by the
Board of Directors (in which determination Directors who do
not qualify as Disinterested Directors may participate); or
(3) By the Shareholders, but shares owned by or voted under the
control of a Director or Officer who at the time does not
qualify as a Disinterested Director or Disinterested
Officer may not be voted on the determination.
(b) Notwithstanding the requirement under subsection 5.5(a) that the
Reviewing Party evaluate the reasonableness of Expenses claimed
by the proposed indemnitee, any Expenses claimed by the proposed
indemnitee shall be deemed reasonable if the Reviewing Party
fails to make the evaluation required by subsection 5.5(a) within
sixty (60) days following the proposed indemnitee's written
request for indemnification or advance for Expenses.
Section 5.6 Indemnification of Employees and Agents. The Company may indemnify
and advance Expenses under this Article to an employee or agent of the Company
who is not a Director or Officer to the same extent and subject to the same
conditions that a Georgia corporation could, without shareholder approval under
Section 14-2-856 of the Code, indemnify and advance Expenses to a Director, or
to any lesser extent (or greater extent if permitted by law) determined by the
Chief Executive Officer, in each case consistent with public policy.
Section 5.7 Liability Insurance. The Company may purchase and maintain
insurance on behalf of an individual who is a Director, Officer, employee or
agent of the Company or who, while a Director, Officer, employee or agent of the
Company, serves at the Company's request as a director, officer, partner,
trustee, employee or agent of another domestic or foreign corporation,
partnership, joint venture, trust, employee benefit plan, or other entity
against Liability asserted against or incurred by him or her in that capacity or
arising from his or her status as a Director, Officer, employee, or agent,
whether or not the corporation would have power to indemnify or advance Expenses
to him or her against the same Liability under this Article or the Code.
Section 5.8 Witness Fees. Nothing in this Article shall limit the Company's
power to pay or reimburse Expenses incurred by a person in connection with his
or her appearance as a witness in a Proceeding at a time when he or she is not a
Party.
Section 5.9 Report to Shareholders. To the extent and in the manner required
by the Code from time to time, if the Company indemnifies or advances Expenses
to a Director or
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Officer in connection with a Proceeding by or in the right of the Company, the
Company shall report the indemnification or advance to the Shareholders.
Section 5.10 No Duplication of Payments. The Company shall not be liable under
this Article to make any payment to a person hereunder to the extent such person
has otherwise actually received payment (under any insurance policy, agreement
or otherwise) of the amounts otherwise payable hereunder.
Section 5.11 Subrogation. In the event of payment under this Article, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of the indemnitee, who shall execute all papers required and shall
do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Company effectively to bring
suit to enforce such rights.
Section 5.12 Contract Rights. The right to indemnification and advancement of
Expenses conferred hereunder to Directors and Officers shall be a contract right
and shall not be affected adversely to any Director or Officer by any amendment
of these Bylaws with respect to any action or inaction occurring prior to such
amendment; provided, however, that this provision shall not confer upon any
indemnitee or potential indemnitee (in his or her capacity as such) the right to
consent or object to any subsequent amendment of these Bylaws.
Section 5.13 Amendments. It is the intent of the Company to indemnify and
advance Expenses to its Directors and Officers to the full extent permitted by
the Code, as amended from time to time. To the extent that the Code is
hereafter amended to permit a Georgia business corporation to provide to its
directors greater rights to indemnification or advancement of Expenses than
those specifically set forth hereinabove, this Article shall be deemed amended
to require such greater indemnification or more liberal advancement of Expenses
to the Company's Directors and Officers, in each case consistent with the Code
as so amended from time to time. No amendment, modification or rescission of
this Article, or any provision hereof, the effect of which would diminish the
rights to indemnification or advancement of Expenses as set forth herein shall
be effective as to any person with respect to any action taken or omitted by
such person prior to such amendment, modification or rescission.
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ARTICLE SIX
Capital Stock
Section 6.1 Direct Registration of Shares. The Company may, with the Board of
Directors' approval, participate in a direct registration system approved by the
Securities and Exchange Commission and by the New York Stock Exchange or any
securities exchange on which the stock of the Company may from time to time be
traded, whereby shares of capital stock of the Company may be registered in the
holder's name in uncertificated, book-entry form on the books of the Company.
Section 6.2 Certificates for Shares. Except for shares represented in book-
entry form under a direct registration system contemplated in Section 6.1, the
interest of each Shareholder in the Company shall be evidenced by a certificate
or certificates representing shares of the Company which shall be in such form
as the Board of Directors from time to time may adopt. Share certificates shall
be numbered consecutively, shall be in registered form, shall indicate the date
of issuance, the name of the Company and that it is organized under the laws of
the State of Georgia, the name of the Shareholder, and the number and class of
shares and the designation of the series, if any, represented by the
certificate. Each certificate shall be signed by the Chairman of the Board, the
President or other Chief Executive Officer or a Vice President and also by the
Secretary or may be signed with the facsimile signatures of the Chairman of the
Board, the President or other Chief Executive Officer or a Vice President and of
the Secretary, and in all cases a stock certificate must also be signed by the
transfer agent for the stock. The corporate seal need not be affixed.
Section 6.3 Transfer of Shares. The Board of Directors shall have authority to
appoint a transfer agent and/or a registrar for the shares of its capital stock,
and to empower them or either of them in such manner and to such extent as it
may deem best, and to remove such agent or agents from time to time, and to
appoint another agent or other agents. Transfers of shares shall be made upon
the transfer books of the Company, kept at the office of the transfer agent
designated to transfer the shares, only upon direction of the registered owner,
or by an attorney lawfully constituted in writing. With respect to certificated
shares, before a new certificate is issued, the old certificate shall be
surrendered for cancellation or, in the case of a certificate alleged to have
been lost, stolen, or destroyed, the requirements of Section 6.5 of these Bylaws
shall have been met. Transfer of shares shall be in accordance with such
reasonable rules and regulations as may be made from time to time by the Board
of Directors.
Section 6.4 Duty of Company to Register Transfer. Notwithstanding any of the
provisions of Section 6.3 of these Bylaws, the Company is under a duty to
register the transfer of its shares only if:
(a) the certificate or transfer instruction is endorsed by the
appropriate person or persons; and
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(b) reasonable assurance is given that the endorsement or
affidavit is genuine and effective; and
(c) the Company either has no duty to inquire into adverse
claims or has discharged that duty; and
(d) the requirements of any applicable law relating to the
collection of taxes have been met; and
(e) the transfer in fact is rightful or is to a bona fide
purchaser.
Section 6.5 Lost, Stolen or Destroyed Certificates. Any person claiming a
share certificate to be lost, stolen or destroyed shall make an affidavit or
affirmation of the fact in the manner required by the Company and, if the
Company requires, shall give the Company a bond of indemnity in form and amount,
and with one or more sureties satisfactory to the Company, as the Company may
require, whereupon an appropriate new certificate may be issued in lieu of the
one alleged to have been lost, stolen or destroyed.
Section 6.6 Authorization to Issue Shares and Regulations Regarding Transfer
and Registration. The Board of Directors and the Executive Committee shall have
power and authority to issue shares of capital stock of the Company and to make
all such rules and regulations as, respectively, they may deem expedient
concerning the transfer and registration of shares of the capital stock of the
Company.
ARTICLE SEVEN
Distributions and Dividends
Section 7.1 Authorization or Declaration. Unless the Articles of Incorporation
provide otherwise, the Board of Directors from time to time in its discretion
may authorize or declare distributions or share dividends in accordance with the
Code.
Section 7.2 Record Date with Regard to Distributions and Share Dividends. For
the purpose of determining Shareholders entitled to a distribution (other than
one involving a purchase, redemption, or other reacquisition of the Company's
shares) or a share dividend, the Board of Directors may fix a date as the record
date. If no record date is fixed by the Board of Directors, the record date
shall be determined in accordance with the provisions of the Code.
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ARTICLE EIGHT
Miscellaneous
Section 8.1 Corporate Seal. If the Board of Directors determines that there
should be a corporate seal for the Company, it shall be in the form as the Board
of Directors may from time to time determine.
Section 8.2 Inspection of Books and Records. The Board of Directors shall have
power to determine which accounts, books and records of the Company shall be
opened to the inspection of Shareholders, except those as may by law
specifically be made open to inspection, and shall have power to fix reasonable
rules and regulations not in conflict with the applicable law for the inspection
of accounts, books and records which by law or by determination of the Board of
Directors shall be open to inspection. Without the prior approval of the Board
of Directors in its discretion, the right of inspection set forth in Section 14-
2-1602(c) of the Code shall not be available to any Shareholder owning two
percent or less of the shares outstanding.
Section 8.3 Conflict with Articles of Incorporation or Code. To the extent
that any provision of these Bylaws conflicts with any provision of the Articles
of Incorporation, such provision of the Articles of Incorporation shall govern.
To the extent that any provision of these Bylaws conflicts with any non-
discretionary provision of the Code, such provision of the Code shall govern.
Section 8.4 Severability. In the event that any of the provisions of these
Bylaws (including any provision within a single section, subsection, division or
sentence) is held by a court of competent jurisdiction to be invalid, void or
otherwise unenforceable, the remaining provisions of these Bylaws shall remain
enforceable to the fullest extent permitted by law.
ARTICLE NINE
Amendments
Section 9.1 Amendments. Subject, in each case, to the Articles of
Incorporation:
(a) the Board of Directors shall have power to alter, amend
or repeal these Bylaws or adopt new Bylaws; and
(b) any Bylaws adopted by the Board of Directors may be
altered, amended or repealed, and new Bylaws may be adopted, by the
Shareholders, as provided by the Code; and
(c) Articles Ten and Eleven of these Bylaws shall be amended
only in the manner provided by relevant provisions of the Code.
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ARTICLE TEN
Fair Price Requirements
Section 10.1 Fair Price Requirements. All of the requirements of Article 11,
Part 2, of the Code, included in Sections 14-2-1110 through 1113 (and any
successor provisions thereto), shall be applicable to the Company in connection
with any business combination, as defined therein, with any interested
shareholder, as defined therein.
ARTICLE ELEVEN
Business Combinations
Section 11.1 Business Combinations. All of the requirements of Article 11,
Part 3, of the Code, included in Sections 14-2-1131 through 1133 (and any
successor provisions thereto), shall be applicable to the Company in connection
with any business combination, as defined therein, with any interested
shareholder, as defined therein.
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EXHIBIT 10.2
EQUIFAX INC.EQUIFAX INC.
INCENTIVE COMPENSATION PLAN (ICP)
I. PURPOSE
The Equifax Inc. Incentive Compensation Plan rewards eligible employees for
their contribution toward the success of the Corporation. The purpose of the
Plan is to encourage and reward the attainment of established annual individual
and business goals.
II. DEFINITIONS
The following words and phrases used in the Plan shall have these meanings:
. "Committee" means the Chairman of the Executive Committee, the Chief
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Executive Officer, and the Corporate Vice President of Compensation and
Benefits Administration of Equifax Inc. In addition, the Chief Financial
Officer of the corporation shall serve as an ex officio member.
. "Corporation" means the amalgam of all divisions and companies, domestic
-------------
and foreign, including equity accounting entities consolidated with Equifax
Inc. for financial reporting purposes.
. "Employee" means any salaried employee of the Corporation who qualifies for
----------
participation in the Plan.
. "EPS" - "Earnings Per Share" means the net income per share after taxes for
-----
Equifax Inc. on a consolidated basis. In the event extraordinary transactions
occur during a plan year which impact EPS and the Management Compensation
Committee of the Board of Directors of Equifax Inc. approves adjustments to
EPS for the Executive Incentive Plan, similar adjustments will apply to this
Plan.
. "EVA" "Economic Value Added" means the net income after taxes less the
-----
charge for employed capital.
. "Equifax Inc." Means the corporate entity.
-------------
. "Incentive Year" means the 12 month period from January 1 through December
----------------
31, coinciding with the calendar year and the fiscal year of Equifax Inc.
. "Plan" means the Equifax Inc. Incentive Compensation Plan.
------
. "Salary" means the base salary earnings of each participant for the
--------
calendar year or that portion of the calendar year for which the participant
is eligible.
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III. ADMINISTRATION
The Plan shall be administered by the Corporate Compensation Department,
consistent with guidelines established by the Committee from time to time. The
Plan shall be construed and administered in accordance with the laws of the
State of Georgia.
IV. ELIGIBILITY FOR PARTICIPATION
Employees eligible to participate in the ICP are those salaried employees that
do not participate in any other incentive plan.
Participants (salary levels 65 - 75 and the Executive levels) must be in the
Plan for at least 3 months to be eligible for incentive at the end of the
Incentive Year. Salary levels 64 - 55 must have completed 3 years of service
prior to the end of the Incentive Year.
Eligibility is also extended to employees in this group at the beginning of the
Incentive Year but who were changed to another non-eligible status and continued
employment in the latter status through the Incentive Year, or those entering
the eligible group during the year. In either event, their incentive will be
calculated only on Salary for that portion of the year they were eligible.
Participant who leave the company following three months of participation for
military service during the incentive period; who, with the consent of the
corporation, retire after reaching age 55 during the incentive period; who die
or who are forced to leave because of disability or job elimination during the
incentive period; are also eligible for participation. If a participant
terminates employment during the plan period for any other reason, no award is
payable under the plan.
A participant in one of these situations receives a prorated portion of his or
her incentive award at target levels at the end of the incentive period in which
the termination occurs. The prorated award is paid within 60 days of
termination. If a participant's employment terminates between the end of a
performance period and the award payment date for that period for any reason
other than an immediately dismissable offense, the full award earned for the
period will be paid.
If a participant's employment is terminated during this period for any
immediately dismissable offense, no award will be paid, unless otherwise
required by law.
If a participant terminates employment prior to the delivery of any incentive
payment earned to accept employment with an Equifax competitor, or to
independently compete with Equifax, no award will be paid.
2
<PAGE>
V. DETERMINATION OF AWARDS
For each fiscal year the Committee will establish minimum EPS/EVA goal for the
Corporation for Plan purposes. If the Corporation fails to meet the minimum
EPS/EVA for the year, then the Committee may in its sole discretion authorize
incentive payments to any, all, or none of the participants in the Plan based on
such considerations as the Committee deems appropriate.
If the Corporation does meet the minimum EPS/EVA for the year, incentive awards
will be determined on the basis of actual performance during the Incentive Year
as compared with established goals, as described below, and as indicated on the
attachment to this Plan.
- The Committee shall establish the target level of Corporate EPS/EVA, as
well as the corporate EPS/EVA level necessary for the maximum incentive
award, for each participant.
- The target level of business unit goals applicable to participate shall
be based on the annual business plan and other relevant data.
- Individual performance goals will be established by the appropriate
management authority for each participant.
- The committee will approve the relative weighting of the above-mentioned
goals for each participant.
- A target incentive award and a maximum incentive award shall be
established for each participant, expressed in terms of a percentage of
that participant's salary for the Incentive Year.
Individual incentive awards will be deemed earned based upon the degree to which
all established goals are attained for the Incentive Year. Interpolation will
be used between designated award levels for the Plan Year. In the event a
participant is rated "below full attainment" on his individual performance
goals, no incentive payment is awarded except a the discretion of the
appropriate management authority.
Eligible employees transferred into or out of organizational entities covered by
this Plan will be paid incentive for the month in the specific unit. Those
employees eligible for participation for a portion of the year will receive an
award applicable only to the Salary for that portion of the year eligible under
this Plan.
Eligible earnings include base salary only. Transfer reimbursements, relocation
pay, station allowance, severance, and payments made as vacation pay in lieu of
time off to retirees and those leaving the company for military service or
health
3
<PAGE>
disability are excluded from the incentive calculation. Salary received while on
Salary Continuance is considered eligible for incentive pay calculations.
VI. PAYMENT OF AWARDS
Awards will normally be paid to eligible participants as soon as possible
following the close of the Plan Year.
VII. LIMITATIONS
The Committee is the final authority for administration and interpretation of
this Plan and each determination by the Committee shall be binding and
conclusive for all purposes.
No individual (or an individual's personal representative) who, during the
course of an Incentive Year, leaves active employment with the Corporation for
any reason other than retirement, military service, death, disability, or job
elimination shall presume any claim or right to be granted an award under this
Plan for any part of that year.
If at any time prior to the payment of an incentive award for a plan year the
Committee determines that a participant has committed an act of fraud or
dishonesty with respect to the Corporation, such participant shall forfeit any
incentive award to which he otherwise may have been entitled.
VIII. TERM OF THE PLAN
The Plan shall continue from year to year at the discretion of the committee.
In keeping with its purposes, the Committee will review the Plan annually and
will consider any modification which are consistent with the objectives of the
Plan and the financial condition of the Corporation.
IX. EFFECTIVE DATE
This Plan, as amended and restated, shall become effective for the 1996 plan
year.
X. AMENDMENTS
The Committee may amend, suspend or terminate this Plan at any time.
4
<PAGE>
EXHIBIT 10.4
------------
The Company currently has change in control agreements in effect with the
following officers: D. W. McGlaughlin, Thomas F. Chapman and Derek V. Smith.
These agreements are substantially identical in all material respects except as
to the parties thereto, dates of execution and other details, which are not
material. A copy of such agreement in effect for the above named individuals is
filed as an exhibit to Form 10-K, filed April 1, 1996, as amended on Form 10-K/A
filed April 4, 1996, and hereby incorporated by reference.
<PAGE>
EXHIBIT 10.5
------------
The Company currently has change in control agreements in effect with the
following officers: Bruce S. Richards, David A. Post, Marietta Edmunds Zakas and
John T. Chandler. These agreements are substantially identical in all material
respects except as to the parties thereto, dates of execution and other details,
which are not material. A copy of such agreement in effect for the above named
individuals is filed herewith.
<PAGE>
Date
Dear ____________:
Equifax Inc. (the "Company") considers the establishment and maintenance of a
sound and vital management to be essential to protecting and enhancing the best
interests of the Company and its shareholders. In this connection, the Company
recognizes that, as is the case with many publicly held corporations, the
possibility of a change in control may exist and that such possibility, and the
uncertainty and questions which it may raise among management, may result in the
departure or distraction of management personnel to the detriment to the Company
and its shareholders. Accordingly, the Executive Committee of the Board of
Directors of the Company (the "Committee") has determined that appropriate steps
should be taken to reinforce and encourage the continued attention and
dedication of members of the Company's management, including yourself, to their
assigned duties without distraction in the face of potentially disturbing
circumstances arising from the possibility of a change in control of the
Company.
In order to induce you to remain in the employ of the Company, this Letter
Agreement sets forth the severance benefits which the Company agrees will be
provided to you (in lieu of any severance pay you would otherwise receive in
accord with the Company's general practices) in the event your employment with
the Company is terminated subsequent to a "change in control of the Company" (as
defined in Section 3 hereof) under the circumstances described below.
1. Company's Right to Terminate. Upon a change in control of the Company (as
----------------------------
defined in Section 3 hereof) the Company may terminate your employment at any
time subject to providing the benefits hereinafter specified in accordance with
the terms hereof.
2. Term of Agreement. This Agreement shall commence on the date hereof and
-----------------
shall continue in effect until December 31, 2001, provided, however, that
commencing on January 1, 1998 and each January 1 thereafter, the term of this
Agreement shall automatically be extended for one additional year unless at
least 60 days prior to such January 1 date, the Company shall have given notice
that it does not wish to extend this Agreement; and provided, further, that this
Agreement shall continue in effect beyond the term provided herein if a change
in control of the Company as defined in Section 3 hereof shall have occurred
during such term.
<PAGE>
- ------------
Date
Page 2
3. Change In Control. No benefits shall be payable hereunder unless there
-----------------
shall have been a change in control of the Company, as set forth below, and your
employment by the Company, shall thereafter have been terminated in accordance
with Section 4 below. For purposes of this Agreement, a "change in control of
the Company" shall be deemed to exist in the event any person, corporation,
partnership or other entity, either alone or in conjunction with its
"affiliates" as that term is defined in Rule 405 of the General Rules and
Regulations under the Securities Act of 1933, as amended, or other group of
persons, corporations, partnerships or other entities who are not affiliates,
but who are acting in concert, are determined to own of record or beneficially
more than fifty percent (50%) of the shares of outstanding stock of any class of
voting stock of the Company.
4. Termination Following Change in Control. If any of the events described in
---------------------------------------
Section 3 hereof constituting a change in control of the Company shall have
occurred, you shall be entitled to the benefits provided in Section 5 hereof
upon the subsequent termination of your employment within five (5) years from
the date of such change in control, unless such termination is (a) because of
your death, (b) by the Company for Cause or Disability or (c) by you other than
for Good Reason.
(i) Death During Employment. If you die during the term of your
-----------------------
employment, this Agreement shall terminate at the end of the month in which
your death occurs.
(ii) Disability. If you have a Disability, you shall be entitled to the
----------
benefits described in Section 5(i) hereof. Termination by the Company of
your employment based on "Disability" shall mean termination because of
your absence from your duties with the Company on a full-time basis for 180
consecutive calendar days, as a result of your incapacity due to physical
or mental illness, unless within thirty (30) days after Notice of
Termination (as hereinafter defined) is given following such absence you
shall have returned to the full-time performance of your duties.
(iii) Cause. If you terminate due to Cause, you shall be entitled to the
-----
benefits described in Section 5(ii) hereof. Termination by the Company of
your employment for "Cause" shall mean termination upon (A) the willful and
continued failure by you to substantially perform your duties with the
Company (other than any such failure resulting from your incapacity due to
physical or mental illness), after a demand for substantial performance is
delivered to you by the Chief Executive Officer of the Company which
specifically identifies the manner in which such Chief Executive Officer
believes that you have not substantially performed your duties, or (B) the
willful engaging by you in misconduct which is materially injurious to the
Company, monetarily or otherwise. For purposes of this paragraph, no act,
or failure to act, on your part shall be considered "willful" unless done,
or omitted to be done, by you not in good faith and without reasonable
belief that your action or omission
<PAGE>
- ------------
Date
Page 3
was in the best interest of the Company. Notwithstanding the foregoing,
you shall not be deemed to have been terminated for Cause unless and until
there shall have been delivered to you a copy of a Notice of Termination
from the Chief Executive Officer of the Company after reasonable notice to
you and an opportunity for you, together with your counsel, to be heard
before (i) the Chief Executive Officer, or (ii) if you are an elected
officer of the Company, the Board of Directors of the Company, finding that
in the good faith opinion of such Chief Executive Officer, or, in the case
of an elected officer, finding that in the good faith opinion of two-thirds
of the Board of Directors that you were guilty of conduct set forth above
in Clauses (A) or (B) of this sub-paragraph, and specifying the particulars
thereof in detail.
(iv) Good Reason. If you terminate due to Good Reason, you shall be
-----------
entitled to the benefits described in Section 5(iii) hereof. Termination
by you of your employment for "Good Reason" shall mean termination based
on:
(A) The assignment to you of any duties inconsistent with your
positions, duties, responsibilities and status with the Company
immediately prior to a change in control, or a change in your
reporting responsibilities, titles or offices as in effect
immediately prior to a change in control, or any removal of you from
or any failure to re-elect you to any of such positions, except in
connection with the termination of your employment for Cause or
Disability or as a result of your death or by you other than for
Good Reason;
(B) A reduction by the Company in your base salary as in effect on
the date hereof or as the same may be increased from time-to-time;
(C) A failure by the Company to continue the Company's incentive
compensation plan(s) as the same may be modified from time-to-time
but substantially in the form currently in effect immediately prior
to a change in control of the Company (the "Plan"), or a failure by
the Company to continue you as a participant in the Plan on at least
the present basis or to pay you the amounts which you would be
entitled to receive based on the Company's performance in accordance
with the Plan;
(D) The Company's requiring you to be based anywhere other than the
location where you are based immediately prior to a change in
control of the Company except for required travel on the Company's
business to an extent substantially consistent with your present
business travel obligations, or in the event you consent to any such
relocation, the failure by the Company to pay (or reimburse you for)
all reasonable moving expenses incurred by you
<PAGE>
- ------------
Date
Page 4
or to indemnify you against any loss realized in the sale of your
principal residence in connection with any such relocation;
(E) The failure by the Company to continue in effect any benefit,
retirement or compensation plan, performance share plan, stock
option plan, life insurance plan, health and accident plan,
disability plan or another benefit plan in which you are
participating at the time of a change in control of the Company (or
plans providing you with substantially similar benefits), the taking
of any action by the Company which would adversely affect your
participation or materially reduce your benefits under any of such
plans or deprive you of any material fringe benefit enjoyed by you
at the time of the change in control, or the failure by the Company
to provide you with the number of paid vacation days to which you
are then entitled in accordance with the Company's normal vacation
practices in effect on the date hereof;
(F) The failure by the Company to obtain the assumption of the
agreement to perform this Agreement by any successor, as
contemplated in Section 6 hereof; or
(G) Any purported termination of your employment which is not
effected pursuant to a Notice of Termination satisfying the
requirements of paragraph (v) below (and, if applicable, Paragraph
(iii) above); and for purposes of this Agreement, no such purported
termination shall be effective.
(v) Notice of Termination. Any purported termination by the Company
---------------------
pursuant to Paragraphs (ii) or (iii) above or by you pursuant to
Paragraph (iv) above shall be communication by written Notice of
Termination to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which shall indicate the
specific termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of your employment under the provisions so indicated.
(vi) Date of Termination. "Date of Termination" shall mean (A) if your
-------------------
employment is terminated by your death, the end of the month in which your
death occurs, (B) if your employment is terminated for Disability, thirty
(30) days after Notice of Termination is given (provided that you shall not
have returned to the performance of your duties on a full-time basis during
such thirty (30) day period), (C) if your employment is terminated pursuant
to Paragraph (iii) above, the date specified in the Notice of Termination,
and (D) if your employment is terminated for any other reason, the date on
which a Notice of Termination is given; provided in all events that if
within thirty (30)
<PAGE>
- ------------
Date
Page 5
days after any Notice of Termination is given, the party receiving such
Notice of Termination notifies the other party that a dispute exists
concerning the termination, the Date of Termination shall be the date on
which the dispute is finally determined, either by mutual written agreement
of the parties, by a binding and final arbitration award if agreed upon by
you and the Company, or by a final judgment, order or decree of a court of
competent jurisdiction, the time for appeal therefrom having expired and no
appeal having been perfected.
5. Compensation Upon Termination or During Disability.
--------------------------------------------------
(i) During any period that you fail to perform your duties hereunder as a
result of incapacity due to physical or mental illness, you shall continue
to receive your full base salary at the rate then in effect and any bonus
payments under the Plan paid during such period until this Agreement is
terminated pursuant to Paragraph 4(ii) hereof. Thereafter, your benefits
shall be determined in accordance with the Company's long-term disability
plan then in effect.
(ii) If your employment shall be terminated for Cause, the Company shall
pay you your full base salary through the Date of Termination at the rate
in effect at the time Notice of Termination is given. The Company shall
have no further obligation to you under this Agreement and all supplemental
benefits shall be terminated. (This Agreement has no effect upon the
retirement benefits to which you are or will be entitled under the
Company's Retirement Plan and other tax qualified employee benefit plans,
as amended from time-to-time).
(iii) If your employment by the Company shall be terminated (A) by the
Company other than for Cause or Disability or (B) if you terminate your
employment for Good Reason, then you shall be entitled to the benefits
provided below:
(A) The Company shall pay you your full base salary through the Date
of Termination at the rate in effect at the time Notice of
Termination is given and the amount, if any, with respect to any
year then ended which pursuant to the Plan would have accrued to you
on the basis of the Company's performance but which has not yet been
paid to you;
(B) Subject to Section 5(vi) hereof, in lieu of any further salary
payments to you for periods subsequent to the Date of Termination,
the Company shall pay as severance pay to you on the fifth day
following the Date of Termination a lump sum equal to the product of
(i) the sum of (A) your annual base salary at the highest rate in
effect during the twelve (12) months immediately preceding the
<PAGE>
- -----------
Date
Page 6
Date of Termination plus (B) the average of the three highest annual
bonus payments made to you or earned, but unpaid, bonus payments
accrued for your account under the Executive Incentive Plan, or
other annual cash incentive plan in lieu thereof, with respect to
the preceding five years, multiplied by (ii) the number three (3);
(C) In addition to the retirement benefits to which you are or would
be entitled under the Equifax Inc. U.S. Retirement Income Plan, as
amended from time-to-time, (the "Retirement Plan"), the Company
shall pay a retirement benefit hereunder, which benefit (except as
provided below) shall be payable in the form and at the times
provided in the Retirement Plan. Said benefits under this paragraph
shall be calculated as provided for in the Retirement Plan with the
following exceptions: (1) regardless of your Years of Vesting
Service under the Retirement Plan, you will be treated as if you
were 100% vested under the Retirement Plan, (2) the number of Years
of Benefit Service used will be the actual number of Years of
Benefit Service accumulated as of the date of termination plus an
additional number of Years of Benefit Service (up to a maximum of
five (5) additional years) equal to the number of additional Years
of Benefit Service that you would have earned if you had remained an
employee of Equifax until attainment of age sixty-two (62), (3) the
Final Average Earnings (for purposes of applying the benefit formula
under the Retirement Plan) shall be determined using (A) the highest
monthly rate of Base Salary in effect during the twelve (12) months
immediately preceding the Date of Termination) plus (B) the average
of the three highest annual bonus payments made to you or earned,
but unpaid bonus payments accrued for your benefit with respect to
the preceding five years (whether paid currently or deferred)
divided by twelve (regardless of the earnings limitations under the
Retirement Plan or regulations controlling such plans) provided,
however, that the retirement benefit payable hereunder shall be
reduced by an amount equal to the retirement benefit payable to you
by the Retirement Plan. All capitalized terms used herein, unless
otherwise defined, shall have the same meanings as such terms are
defined in the Retirement Plan.
(iv) Unless you are terminated for Cause, the Company shall maintain in
full force and effect, for your continued benefit for five (5) years all
employee benefit plans and programs or arrangements in which you are
entitled to participate immediately prior to the Date of Termination,
provided that your continued participation is possible under the general
terms and provisions of such plans and programs. In the event that your
continued participation in any such plan or program is barred, the Company
shall arrange to provide you with benefits substantially similar to those
which you were entitled to receive under
<PAGE>
- -----------
Date
Page 7
such plans and programs.
(v) You shall not be required to mitigate the amount of any payment
provided for in this Section 5 by seeking other employment or otherwise,
nor shall the amount of any payment provided for in this Section 5 be
reduced by any compensation earned by you as the result of employment by
another employer after the Date of Termination, or otherwise.
(vi) Notwithstanding any other provision of this Agreement, the amount of
all payments to be made hereunder upon termination after a change of
control shall not exceed one dollar ($1.00) less than that amount which
would cause any such payment to be deemed a "parachute payment" as defined
in Section 280G of the Internal Revenue Code of 1954, as amended, and as
said statute is then in effect at the time of such payment. The foregoing
limitation shall apply only to sums paid pursuant to the terms of this
Agreement and shall not apply to any other sums or benefits to which you
are or will be entitled under other Company benefit, retirement or
compensation plans, including, but not limited to, the Company's
performance share plan, stock option plan, life insurance plan, disability
plan or health and accident plan.
6. Successors: Binding Agreement.
-----------------------------
(i) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all
of the business and/or assets of the Company, by agreement in form and
substance, reasonably satisfactory to you, expressly assume and agree to
perform this Agreement. Failure of the Company to obtain such agreement
prior to the effectiveness of any succession shall be a breach of this
Agreement and shall entitle you to compensation from the Company in the
same amount and on the same terms as you would be entitled hereunder if you
terminated your employment for Good Reason, except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination. As used in this
Agreement, "Company" shall mean the Company as hereinbefore named and any
successor to its business and/or assets as aforesaid which executes and
delivers the agreement provided for in this Paragraph 6 or which otherwise
becomes bound by all the terms and provisions of this Agreement by
operation of law.
(ii) This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If you should die
subsequent to the termination of your employment while any amount would
still be payable to you hereunder if you had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement
<PAGE>
- ------------
Date
Page 8
to your devisee, legatee or other designee or, if there be no such
designee, to your estate; such payment to be made in a lump sum within
sixty (60) days from the date of your death.
7. Notice. For the purposes of this Agreement, notices and all other
------
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
Registered Mail, Return Receipt Requested, Postage Pre-Paid, addressed to the
respective addresses set forth on the first page of this Agreement, provided
that all notices to the Company shall be directed to the attention of the Chief
Executive Officer of the Company, or to such other address as either party may
have furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon receipt.
8. Miscellaneous. No provision of this Agreement may be modified, waived or
-------------
discharged unless such waiver, modification or discharge is agreed to in writing
signed by you and such officer as may be specifically designated by the Board of
Directors of the Company. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the time or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
expressed or implied, with respect to the subject matter hereof have been made
by either party which are not set forth expressly in this Agreement. The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of Georgia.
9. Severability. In the event that any one or more of the provisions of this
------------
Agreement or any word, phrase, clause, sentence or other portion thereof shall
be deemed to be illegal or unenforceable for any reason, such provision or
portion thereof shall be modified or deleted in such a manner as to make this
Agreement as modified legal and enforceable to the fullest extent permitted
under applicable laws. The validity and enforceability of the remaining
provisions or portions thereof shall remain in full force and effect.
10. Counterparts. This Agreement may be executed in two or more counterparts,
------------
each of which shall take effect as an original and all of which shall evidence
one and the same Agreement.
11. Legal Fees. In the event the Company breaches this Agreement or in the
----------
event (A) you are terminated by the Company other than for Cause or Disability
or (B) you terminate your employment for Good Reason, the Company shall
reimburse you for all legal fees and expenses reasonably incurred by you as a
result of such termination (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination or in seeking to obtain
or enforce any right or benefit provided by this Agreement).
<PAGE>
- -----------
Date
Page 9
If this letter correctly sets forth our agreement on the subject matter hereof,
kindly sign and return to me the enclosed copy of this letter which will then
constitute the Agreement between the Company and you on this subject.
Sincerely,
Equifax Inc.
By:____________________________
D. W. McGlaughlin
President & Chief Executive
Officer
Agreed to this _____ day of _______________, 19___
_____________________________________________
<PAGE>
June 22, 1989
Dr. Daniel W. McGlaughlin
56 Sutherland Drive
Atherton, CA 94025
Dear Dan:
As contemplated in my letter to you of May 25, 1989, I would like to use this
letter to finalize our employment agreement. Since this letter refers to a
Change in Control Agreement, I am enclosing a copy of such an agreement, for
your convenience. The terms of your employment are set forth below.
1. Duties. While this Agreement is in effect, you agree to devote your full
------
professional and business-related time, skills and best efforts to the business
of Equifax ("the Company") in a senior executive capacity initially assuming
responsibility for the newly established Information Technology Sector as
President and including serving as a Senior Vice President of the Company. In
addition, you agree to serve in a like manner, such other executive duties which
may be assigned to you from time to time by the Board of Directors or the
Executive Committee of the Company.
2. Term of Employment.
------------------
2.1. Your employment under this Agreement shall commence on August 1,
1989 and shall continue until December 31, 1992, or until you or the
Company gives written notice that employment hereunder shall cease.
2.2 If the Company unilaterally terminates your employment prior to
December 31, 1992, other than for Cause or Disability, (as defined in
the Change in Control Agreement), the Company shall nevertheless pay
you twenty-four months salary following such termination date, at the
applicable Annual Base Salary and Annual Incentive Compensation, as
defined in Section 3 below, which you would have received, had you
during that period, been employed hereunder.
1
<PAGE>
2.3 You and the Company shall, for the time period of July 1, 1991 to
July 31, 1991, have the opportunity to evaluate the suitability of
your employment with the Company. Should you give written notice to
the President of the Company during this period that your employment
shall cease at this time, the Company will pay you one-fourth of your
Annual Base Salary, plus incentive pay of ten percent of this amount
as full severance.
3. Compensation. For all the services rendered by you under this Agreement,
------------
the Company shall pay you an Annual Base salary of not less than One Hundred
Seventy-Five Thousand Dollars ($175,000) per annum (or fraction thereof for
portions of a year). The Annual Base salary shall be paid in a manner
consistent with the payroll policies of the Company. For the calendar year
1989, the Company shall pay you, before March 31, 1990, incentive pay, through
the Executive Incentive Plan, of no less than one-half of your base salary for
the period August 1, 1989 through December 31, 1989. For each of the calendar
years, 1990 and 1991, the Company shall pay you, no later than March 31 of the
following year, Annual Incentive Compensation, through the Executive Incentive
Plan, of no less than one-half of the your Annual Base Salary for such
applicable year. For the calendar year 1992, the Company shall pay you such
Annual Incentive Compensation as the Management Compensation Committee of the
Board of Directors of the Company in its discretion shall approve, pursuant to
the Company's Executive Incentive Plan.
4. Stock Options and Performance Share Units. The Company and you recognize
-----------------------------------------
that the Management Compensation Committee of the Board of Directors of the
Company is charged with granting stock options and Performance Share Units under
the Company's plans. However, upon the commencement of your employment
hereunder, the President of the Company, shall recommend that you become
entitled to receive the options and share units respecting the authorized and
unissued shares of the Company's $2.50 par value common capital stock (the
"Shares") as follows:
4.1 Options to purchase 15,000 Shares, utilizing the Company's 1986 Stock
Option Plan maximizing Incentive Stock Options, as appropriate, to the
extent the Management Compensation Committee of the Board of Directors of
the Company, in good faith, determines such utilization to be in the best
interest of the Company and legally permissible, and otherwise as non-
qualified stock options; plus
4.2 10,000 share units, under the Company's 1988 Performance Share Plan,
using as the measurement period, calendar years 1990, 1991, and 1992.
5. Group and Executive Plans. You shall be entitled to all general employee
-------------------------
and executive benefits granted to all employees and to senior executives of the
Company, including, without limitation,participation in the Company's Thrift
Plan, qualified and non-qualified retirement plans, Major Medical Insurance
Plan, and Group Term Insurance Plan, but only pursuant to the terms of such
plans, as from time to time in effect and to the extent therein permitted. As
soon as practical after your employment with the Company, you will
2
<PAGE>
be presented with a Change in Control Agreement, to be executed by you and the
Company which is substantially similar to agreements signed by other senior
executives. When executed, the Change in Control Agreement shall become an
integral part of this Agreement. Additionally, should your employment with the
Company continue to your age 65, you will be eligible to retire at no less
benefit than a 25-year employee under the qualified retirement plan, or as
provided via the Supplementary Executive Retirement Plan, whichever is the
greater benefit.
6. Vacation. From August 1, 1989, through December 31, 1989, you shall be
--------
entitled to three weeks vacation time. During each calendar year of your
employment hereunder after December 31, 1989, you shall be entitled to four
weeks of vacation time.
7. Consulting Services. You shall be entitled to financial counseling
-------------------
services, substantially similar to other senior executives, including tax
preparation services, for the term of your employment.
8. Expenses. For the three month period following your employment, or until
--------
your Atlanta residence is occupied, whichever is the shorter period, the Company
shall reimburse you for both your and your spouse's expenses reasonably incurred
by your relocation including spouse's airline expense for up to three roundtrips
from California to Atlanta for the purpose of seeking a suitable Atlanta
residence. The Company's Merrill Lynch housing relocation program will be
available to you.
9. Club Membership. The Company will pay the annual dues, including
---------------
initiation fees, for one social club of your choice, in the Atlanta, Georgia
area.
10. Outside Activities. Notwithstanding Section 1 above, you may engage in
------------------
personal investment activities and civic endeavors during times as shall not
cause interference in any material respect with the performance of your duties
under this Agreement.
11. Miscellaneous. No supplement, modification, waiver or amendment to this
-------------
Agreement shall be binding unless signed by you and an authorized officer of the
Company. No agreements or representations, oral or otherwise, expressed or
implied, with respect to your employment have been made by either party which
are not set forth herein. This Agreement shall be construed and enforced in
accord with the laws of the State of Georgia.
12. Counterparts. This Agreement is executed in two counterparts, each of
------------
which shall take effect as an original and both of which shall evidence one and
the same Agreement.
3
<PAGE>
If this letter correctly sets forth our agreement on your employment, kindly
sign and return to me one copy of this letter which will then constitute the
agreement between the Company and you.
Sincerely,
Equifax Inc.
/s/ C. B. Rogers, Jr.
---------------------
C. B. Rogers, Jr., President
(the "Company")
Agreed to this 2nd day of July, 1989.
/s/ Daniel W. McGlaughlin
-------------------------
Daniel W. McGlaughlin
4
<PAGE>
July 1, 1991
Dr. Daniel W. McGlaughlin
3430 Tuxedo Road
Atlanta, GA 30305
Dear Dan:
In my June 22, 1989 letter to you, stating the terms of your contemplated
employment with Equifax, I covered our agreement that for the time period of
July 1, 1991 to July 31, 1991, both you and the Company would have the
opportunity to evaluate the suitability of your continued employment.
We are agreed that continuation of your employment with Equifax is in your and
the Company's best interests, however, you have expressed your desire to amend
our agreement so as to provide additional benefits in the event you elect to
retire from the Company prior to your age 65, or in the event you become
disabled while employed by the Company.
In consideration of your continuing your employment with Equifax under the terms
of our prior agreement, this letter will serve to amend Paragraph 5 of that
agreement, so that it reads as follows:
5. Group and Executive Plans. You shall be entitled to all general
-------------------------
employee and executive benefits granted to all employees and to senior
executives of the Company, including, without limitation, participation in
the Company's Thrift Plan, qualified and non-qualified retirement plans,
Major Medical Insurance Plan, and Group Term Insurance Plan, but only
pursuant to the terms of such plans, as from time to time in effect and to
the extent therein permitted. As soon as practical after your employment
with the Company, you will be presented with a Change in Control Agreement,
to be executed by you and the Company which is substantially similar to
agreements signed by other senior executives. When executed, the Change in
Control Agreement shall become an integral part of this Agreement. In
addition, you shall be entitled to retirement and disability benefits as
described below.
5.1 Retirement Benefits. Should you retire at age 60 or thereafter, your
-------------------
annual retirement benefit will be paid according to the terms and conditions of
the Supplemental Executive Retirement Plan and the qualified retirement plan,
except that the total amount of the benefits payable under both plans shall be
supplemented to the extent necessary to provide aggregate annual payments
according to the following schedule:
<PAGE>
Dr. Daniel W. McGlaughlin
July 1, 1991
Page 2
<TABLE>
<CAPTION>
Annual Retirement Benefit
(including benefits payable
Age at Retirement under both plans)
----------------- -----------------
<S> <C>
60 24% of Final Average Earnings
61 27% of Final Average Earnings
62 30% of Final Average Earnings
63 35% of Final Average Earnings
64 45% of Final Average Earnings
65 60% of Final Average Earnings
</TABLE>
5.2 Disability. Should you incur a disability within the meaning of the
----------
Company's long-term disability plan (whether or not you are covered by said
plan), you will be entitled to receive disability benefits for the duration of
said disability, until retirement, according to the following schedule:
<TABLE>
<CAPTION>
Age on Date Amount of
Disability Disability
Is Incurred Benefit
----------- -------
<S> <C>
After age 55 but
before age 63 30% of Final Average Earnings
Age 63 35% of Final Average Earnings
Age 64 45% of Final Average Earnings
Age 65 60% of Final Average Earnings
</TABLE>
<PAGE>
Dr. Daniel W. McGlaughlin
July 1, 1991
Page 3
If you agree that this letter correctly sets forth the amendment to our
agreement on your continued employment, please sign and return to me one copy of
this letter which, together with our prior agreement, will evidence the
agreement between the Company and you.
Sincerely,
Equifax Inc.
/s/ C. B. Rogers, Jr.
- -----------------------------------
C. B. Rogers, Jr.
President and CEO
Agreed to this 22nd day of July, 1991.
/s/ Daniel W. McGlaughlin
- -----------------------------------
D. W. McGlaughlin
<PAGE>
Exhibit 10.10
January 31, 1997
Mr. Daniel J. Kohl
Equifax Inc.
1600 Peachtree Street, N.W.
Atlanta, GA 30309
Dear Dan:
As you and I have discussed, as a consequence of the Company's exit from the
healthcare information industry, your position as Senior Vice President and
Group Executive of Equifax Inc. will be eliminated effective January 31, 1997.
In light of this circumstance and in recognition of your dedicated service to
the Company, the Company has agreed to provide you certain benefits, subject to
the terms and conditions contained in this letter, upon termination of your
employment with the Company. All payments described in this letter are subject
to applicable federal and state withholding taxes. To confirm our
understanding, the benefits you will receive are set forth below.
1. SEVERANCE PAY: In lieu of severance pay benefits totaling $50,962 accorded
you under the Company's Severance Pay Plan, the Company will:
(A) RESTRICTED STOCK GRANT: effective January 31, 1997, fully vest 12,000
shares of Equifax restricted stock, granted to you in July 1995 with a
scheduled vesting date of December 31, 1998, and pay you a
corresponding cash bonus, equal to 75% of the market value of the
shares (based on the closing market price on the New York Stock
Exchange on January 31, 1997). Assuming a closing price of $32.00 per
share, the value of that stock and related cash award equals $672,000.
(B) PERFORMANCE SHARE PLAN AWARDS: waive fulfillment of the continuous
employment condition required for eligibility to receive payments
under the 1988 Performance Share Plan ("PSP"). In lieu of canceling
your two outstanding Performance Share Awards covering the measurement
periods 1995-97 and 1996-98, the Company will pay you in cash (based
on the closing market price on the New York Stock Exchange on January
31, 1997) a lump sum amount pro-rated according to your length of
employment during each award period. The 1995-1997 PSP Award
<PAGE>
payment will be based on achievement of a "maximum" performance level
and the 1996-1998 PSP Award on a "target" performance level. There
will be no proration for the 1994-96 award, which will be paid in
accordance with the PSP Plan terms in February, 1997.
2. EXECUTIVE INCENTIVE PLAN (EIP): You will be eligible for your 1996 annual
incentive in accordance with the terms of the Plan and the satisfaction of
the various performance goals applicable to you. Our current projection of
your EIP award is a cash bonus of approximately 146% of salary paid during
1996, equalling $298,069.
3. STOCK OPTIONS: Outstanding and vested stock options held by you, as of
January 31, 1997, cover 67,750 shares at various exercise prices. Based on
a closing price of $32.00 a share, these options alone represent a
realizable gain to you of $705,918. These options will be exercisable in
accordance with the respective agreements of each option grant. Please be
aware that all vested options will be exercisable through your last day of
employment, except for those options granted January 31, 1996, which remain
exercisable for one (1) year following termination of employment. Also,
remember that the preferential tax treatment on all incentive stock options
will expire 90 days following your termination of employment. In light of
the significant severance benefits provided to you in the form of
restricted stock vesting, performance share accelerated payments, and other
benefits, no special stock option vesting will be recommended to the
Compensation Committee.
4. FINANCIAL PLANNING AND TAX SERVICES: You will be eligible to continue to
use Arthur Andersen LLP for your personal financial planning and tax
preparation at the Company's expense through December 31, 1997, subject to
the program maximum of $15,000 per annum.
5. EXECUTIVE LOAN: Your executive loan of $50,000, plus interest, from the
Company will be due and payable on January 31, 1997. Reimbursement by the
Company for interest due on that loan will be consistent with the Company's
normal practice and will be pro-rated. This payment may be netted from the
proceeds of your Performance Share award, described in paragraph 1(b)
above, if you desire.
6. OUTPLACEMENT ASSISTANCE: During your career transition, the Company will,
if requested, provide you outplacement services through The Mulling Group.
Those services will be available to you until such time as you accept
employment elsewhere, but in no event later than December 31, 1997.
7. OTHER BENEFITS: You are eligible to continue to receive medical and dental
benefits afforded under COBRA upon compliance with the applicable
<PAGE>
provisions of COBRA and those of the respective Company medical and dental
plans. That information will be provided in your formal termination papers
which will be provided to you during January.
In consideration of the payments and benefits described in this letter, which
exceed those to which you are normally entitled under established Company plans,
you covenant and agree, for the period January 31, 1997 through January 31,
1998, that you will not, directly or indirectly, compete with Equifax or any of
its subsidiaries by carrying on a business substantially similar to the Business
as defined below. For purposes of this letter, the term "compete" means with
respect to the Business: (i) calling on, soliciting, taking away, accepting as
a client or customer or attempting to call on, solicit, take away or accept as a
client or customer any individual, partnership, corporation or association that
was a client or customer of Equifax during the twelve (12) calendar month period
preceding any such act; (ii) soliciting, taking away or attempting to solicit or
take away any employee of the Business; or (iii) for the period of this
Agreement, entering into or attempting to enter into any business substantially
similar to the Business, either alone or with any individual, partnership,
corporation or association.
For purposes of this letter, the words "directly or indirectly" as they modify
the word "compete" means (i) acting as an agent, representative, consultant,
officer, director, independent contractor, or employee of any entity or
enterprise which is competing with the Business; (ii) participating in any such
competing entity or enterprise as an owner, partner, limited partner, joint
venturer, creditor or stockholder (except as a stockholder holding less than one
percent (1%) interest in a corporation whose shares are actively traded on a
regional or national securities exchange or in the over-the-counter market); and
(iii) communicating to any such competing entity or enterprise the names and
addresses or any other information concerning any past, present, or identified
prospective client or customer of Equifax.
For the purposes of this letter, the term "Business" means the credit reporting,
collection service, mortgage loan reporting, check guarantee and verification,
credit and debit card authorization and processing, credit card marketing
enhancement, software products for managing credit card operations, underwriting
and claims reporting services, inspection and loss control services, workers'
compensation audits, software for commercial insurers, specimen testing for life
and health insurance applicants, and employment evaluation services in those
geographic areas where Equifax currently conducts these operations.
In addition to your agreement not to compete, you acknowledge, affirm and agree
to abide by the provisions contained in that Confidentiality and Assignment
Agreement executed by you and delivered to the Company on November 15, 1993.
<PAGE>
Further, you agree to make no adverse comments about the Company or its
employees to the media or to any other party. Equifax will similarly make no
adverse comments to the media or third parties concerning your service or
performance of duties for the Company.
By signing below, you acknowledge that the payments and benefits provided you
under this letter by the Company (including, but not limited to benefits
described in paragraphs 1(a) and (b) above) are in excess of those benefits to
which you would otherwise be entitled upon your termination of employment.
Accordingly, this agreement, including all payments to be made under this
letter, will become binding upon the parties upon your return of an executed
General Release in the form attached hereto by February 19, 1997, and the date
that General Release becomes effective in accordance with its terms.
If this letter reflects your understanding of our agreement, please execute and
return the enclosed copy of this letter.
Sincerely,
Daniel W. McGlaughlin
Agreed to and accepted this _______ day of January, 1997.
Daniel J. Kohl
<PAGE>
Exhibit 10.11
October 30, 1996
Mr. D. U. Hallman
Equifax Inc.
1600 Peachtree Street, N.W.
Atlanta, GA 30309
Dear Don:
As you and I have discussed, as a consequence of a reorganization of the
Company, your position as Chief Financial Officer of Equifax Inc. will be
restructured and the new position will be filled by another person, effective
November 1, 1996. We will begin the transition process immediately, and I know
I can count on your support to accomplish this as smoothly as possible. In our
discussions you have indicated that you understand that the Company had
originally intended that your services would terminate November 1 but you have
asked that your employment be continued as a Senior Vice President for a period
of time in order to increase your benefits provided by the Company. This will
also accommodate an appropriate transition.
In recognition of these restructuring circumstances and your many years of
service to the Company, I will recommend that the Management Compensation
Committee approve certain actions for your benefit, at their meeting on October
31, 1996. The following is a recap of the severance and other benefits to which
you will be entitled, including certain enhancements to those benefits, so that
we both may be clear about them. The benefits described below are based upon a
retirement date of January 31, 1997, and are conditioned upon your remaining an
employee in good standing until that date, and are subject to the provisions of
the plans in question.
1. Supplemental Executive Retirement Plan: Although you would not have
attained age 55 at the initially proposed termination date of November 1,
you will have attained that age prior to the delayed termination date of
January 31, 1997. As referred to below, my recommendation contemplates
paying a portion of your 1996 incentive award in January. As a
consequence, your SERP benefit will be substantially increased so that,
calculated on a life annuity basis and including your benefit under the
U.S. Retirement Income Plan, instead of $113,444 per year, you will receive
a total of $208,244 per year. This is a result of both the extension of
employment and payment of a portion of your 1996 incentive award early in
the amount of $129,850.
2. Severance Pay Plan: According to the terms of the Plan, because your
termination is a consequence of reorganization, you would be entitled to 49
weeks of severance which totals $197,911. We have agreed, in light of the
other enhanced benefits described in this letter, that no payment will be
made to you under the Severance Pay Plan, and you hereby release the
Company for any payment obligation pursuant to the Severance Pay Plan.
3. RESTRICTED STOCK GRANT (JANUARY 1995): Although this grant and the
corresponding cash bonus will not vest until December 31, 1998, I am
recommending that this grant and cash bonus vest 100% on January 31, 1997.
This represents 10,000 shares of Equifax stock with a cash bonus of 75% of
the value of the shares at the time of vesting. This represents, at $31.00
per share, a value of $542,500.
<PAGE>
4. RESTRICTED STOCK IN LIEU OF DEFERRED BONUSES PAYABLE JANUARY 1995 AND 1996:
These stock grants will be fully vested on January 31, 1997.
5. 1996 EXECUTIVE INCENTIVE PLAN (EIP): You will be eligible for your 1996
annual incentive in accordance with the terms of the Plan and the
satisfaction of the various performance goals applicable to you. Our
current projection for your EIP award is a bonus of approximately 77.5% of
salary paid during 1996. A portion of this bonus ($129,850) will be paid
in January 1997 and the balance you have earned will be paid in February
1997, upon final action by the Management Compensation Committee. The
amount of your January 1997 payment represents a retirement "equity"
measure to neutralize any reduction in your pension benefit from the level
projected for a February 1997 retirement date (which would have included
your full 1996 annual incentive). The process used to neutralize the
effect of a January 1997 retirement versus a February 1997 retirement was
to project the final average earnings as of the end of February 1997
including an estimated incentive award of $162,750 and then provide for an
equivalent final average earnings for your retirement calculation effective
January 31, 1997. To comply with the terms of the Plan, this requires an
additional advance payment of $129,850 in January 1997, which will bring
the total of the past 36 months of salary and incentive pay to the
projected total. As you are aware, if we had paid your entire bonus in
January 1997, the final average earnings used to calculate your retirement
benefits would have been inconsistent with our practice, and inappropriate,
because it would have overstated your retirement benefit by including 100%
of four incentive payments within a three year period.
6. STOCK OPTIONS: Your outstanding vested stock options as of November 1, 1996
includes 87,000 shares at various prices. This number will increase to
120,750 shares on January 31, 1997 provided you continue employment with
the Company and do not exercise any outstanding options prior to this date.
The vested stock options will be exercisable for 60 months following your
retirement, with the exception of the July 25, 1990 grant; it remains
exercisable for 36 months. Remember that ISO or qualified tax treatment on
all options will expire 90 days following retirement, and you should review
the potential tax consequences of this.
7. PERFORMANCE SHARE PLAN AWARDS: Consistent with the terms of the Plan,
outstanding Performance Share Awards for 1995 - 1997 and 1996 - 1998 will
remain in effect and will be pro-rated according to your length of
participation during each award period and paid subject to satisfaction of
the established performance for each award. There will be no pro-ration
for the 1994 - 1996 award. All participants will be paid in February of
each year following the conclusion of each performance period.
8. FINANCIAL PLANNING AND TAX SERVICES: You will be eligible to continue to
use Arthur Andersen for your financial planning and tax preparation at the
Company's expense through December 31, 1998 object to the program maximum
of $15,000 per annum.
9. ACCRUED VACATION: As a result of continuing your employment to January 31,
1997, you will be entitled to receive payment for your 1997 vacation (5
weeks). It is understood that you will be on paid vacation during January,
1997 and the Company will pay the balance at the time of retirement.
10. EXECUTIVE LOAN: Your executive loan of $50,000 plus interest will be due
<PAGE>
January 31, 1997. Your interest reimbursement from the Company will be
consistent with our normal practice and pro-rated. This payment can be
netted out of your bonus and or vacation payment, if you desire.
11. OTHER POST EMPLOYMENT BENEFITS: You are also eligible for the normal post-
retirement benefits consistent with the plan provisions provided for by the
various retirement, life and health plans sponsored by the Company,
including the benefits provided by the U.S. Retirement Income Plan (as
referenced above), retiree medical coverage currently provided under the
Comprehensive Major Medical Plan and post-retirement life insurance
currently provided under the Basic Life Insurance Plan; these benefits are
subject to the Company's right to revise or terminate the plans at any time
in the future, of course. Additionally, you are eligible to continue
certain coverages under COBRA. All of this information will be provided in
your formal retirement papers which will be provided to you during
December.
As further consideration for the promises contained in this letter, you agree to
make no adverse comments about the Company or its employees to the media or to
any other party. Should you make any such disparaging remarks, the enhanced
benefits will terminate. Equifax will similarly make no adverse comments to the
media or third parties concerning your service or performance of duties for the
Company.
In order to obtain the enhanced benefits described in this letter, you will need
to execute a release consistent with the standard General Release which is part
of the Severance Pay Plan, a copy of which is attached for your signature. In
order for you to be eligible for the enhancements described herein, you must
sign and return the General Release within 21 days of the meeting of the
Management Compensation Committee on October 31, 1996. A summary of the
benefits described herein is attached for your convenience.
Please let me know if any portion of this letter or the attachments is unclear
or does not reflect your understanding of our arrangement. If this letter
reflects your understanding of our agreement, please execute and return the
enclosed copy, and it will be effective upon the Management Compensation
Committee's approval on October 31, 1996.
Sincerely,
/s/ D. W. McGlaughlin
- --------------------
D. W. McGlaughlin
Agreed to and accepted this 18th day of November, 1996.
/s/D. U. Hallman
<PAGE>
GENERAL RELEASE
THIS GENERAL RELEASE ('Release') is entered into on the date(s) signed below by
and between Equifax Inc. ("Equifax"), a Georgia corporation, and Donald U.
Hallman ("Employee"), an employee of Equifax.
RECITALS
A. Equifax has agreed to make certain enhanced severance benefits available to
Employee upon the anticipated termination of Employee's employment with
Equifax, as described in a letter dated October 30, 1996 (the "Severance
Plan").
B. The terms of the Severance Plan provide that Employee is eligible for
benefits only if, among other conditions, the Employee signs the Release
and the Release becomes effective and irrevocable.
C. Employee desires to qualify for benefits offered under the Severance Plan
by signing the Release.
D. In consideration of the mutual promises contained herein, Equifax and
Employee agree as follows:
1. Consideration: In consideration for Employee's agreement to release all
-------------
claims described in paragraph 2 below, Employee will receive the benefits
described in the Severance Plan. Employee acknowledges that, but for
execution of this Release, Employee would not be entitled to receive this
consideration. The amount of consideration shall be determined pursuant to
the terms of the Severance Plan. This Release will continue in force and
effect even if some portion of the consideration provided under the
Severance Plan is returned to Equifax as a result of the Employee's
reemployment in any salaried capacity by Equifax or any of its affiliates.
2. Release: As a consideration for the benefits extended to Employee under
-------
the terms of this Release, benefits to which Employee acknowledges that
Employee would not otherwise be entitled, Employee agrees for Employee,
Employee's heirs, executors, administrators, successors and assigns to
forever release and discharge Equifax and its subsidiaries, related
companies, successors and assigns, officers, directors, agents, employees,
and former employees from any and all claims, debts, promises, agreements,
demands, causes of actions, losses and expenses of every nature whatsoever
known or unknown, suspected or unsuspected, filed or unfiled, arising prior
to the Acceptance Date of this Release, or arising out of or in connection
with Employee's employment by and leaving Equifax and any affiliate of
Equifax. This total release includes, but is not limited to, breach of
contract (express or implied) including breach of the implied covenant of
good faith and fair dealing; intentional infliction of emotional harm;
wrongful discharge; violation of public policy; defamation; invasion of
privacy, impairment of economic opportunity; negligent infliction of
emotional distress; or any other tort; any claims for punitive,
compensatory, and retaliatory discharge damages, back or front pay claims
and fringe benefits; attorney's fees; the Civil Rights Act of 1866, 42
U.S.C. section 1981, as amended; Title VII of the Civil Rights Act of 1964,
42 U.S. C. section 2000(e) et seq., as amended; the Age Discrimination in
-------
Employment Act of 1967, 29 U.S.C. section 621 et. seq., as amended; the
--------
<PAGE>
Rehabilitation Act of 1973, 29 U.S.C. section 701, et. seq., as amended;
--------
the Older Workers' Benefit Protection Act, 42 U.S.C. section 621 et. seq.,
--------
the Americans with Disabilities Act of 1990, 42 U.S.C. section 12101 et.
---
seq., as amended; the False Claims Act, 31 U.S.C. section 3729, et seq., as
---- -------
amended; or any other federal, state, or municipal statute or ordinance or
common law claim relating to discrimination in employment or otherwise
regulating the employment relationship, or regulating the health or safety
of the work place. This Release does not extend to unpaid accrued vacation
available, vested pension benefits, unemployment compensation claims, or
workers' compensation claims.
3. No Pending or Future Lawsuits: Employee represents that Employee has
------------------------------
no lawsuits, claims or actions pending in Employee's name, or on behalf of
any other person or entity, against Equifax or any other person or entity
referred to herein. Employee also represents that Employee does not intend
to bring any new or different claims on Employee's own behalf or on behalf
of any other person or entity against Equifax and/or its subsidiaries,
related companies, successors and assigns, officers, directors, agents,
employees and former employees. Moreover, Employee hereby promises,
warrants, represents and covenants that Employee will file no claim,
lawsuit, or other action on Employee's or any other person or entity's
behalf against Equifax and/or any other person or entity referred to herein
based on any actions taken, circumstances, consequences, or conduct
occurring during Employee's employment by and leaving of Equifax and/or any
affiliate of Equifax. Employee understands that the consideration set
forth in this Release constitutes the sole sums Employee can recover from
Equifax and/or any other person or entity referred to herein for any
litigation arising from actions taken, circumstances, consequences, and/or
conduct that occurred during Employee's employment by and/or leaving of
Equifax and/or any affiliate of Equifax. Employee agrees that Employee
will not seek or apply for reemployment, employment, or independent
contractor status with Equifax, other than upon the request of Equifax.
4. Covenant Not to Sue: Employee agrees that Employee will not file any
--------------------
action, or suit contesting the legality of the ending of Employee's
employment or the validity of this Release or attempting to negate, modify,
or reform this Release. Employee warrants and represents that Employee has
not assigned or in any way conveyed, transferred or encumbered all or any
portion of the claims or rights covered by this Release.
5. Enforcement of Agreement: The parties hereto agree that each provision
-------------------------
of this Release is a material provision and that failure of any party to
perform any one provision hereof shall be the basis for voiding the entire
Release at the option of the other party, or for pursuing an action at law
for such breach. Any party may waive or excuse the failure of any other
party to perform any provision of this Release, provided, however, that any
such waiver shall not preclude the enforcement of this Release upon any
subsequent breach, whether or not similar in character, to any waived
breach. Upon any breach by Employee, Equifax may cease any future
payments. The parties further agree that in the event that suit is
instituted to enforce any of the rights of the parties to this Release, the
prevailing party in such litigation shall be entitled, as additional
damages, to reasonably incurred attorneys' fees and costs incurred in the
enforcement of this Release.
6. Effective Date of Release: Employee is entitled to review and consider
--------------------------
<PAGE>
this Release for twenty-one calendar days following the date of receipt of
---------------------------------------------------------
the Release (the "Receipt Date") before signing and returning this Release
-----------
to Equifax. If Employee does not accept the terms of this Release in
writing and deliver the executed Release to Equifax within twenty-one days
following the Receipt Date, no benefits will be payable to the Employee
under the Severance Plan. For a period of seven calendar days followinq
---------------------------------------------
the date of Employee's execution of this Release (the "Acceptance Date"),
--- --------------------------------------------
Employee may revoke this Release ("Revocation Period"). Employee may
revoke this Release only by giving Equifax formal, written notice of
Employee's revocation of this Release to the name and address set forth in
paragraph (c) of Section 12 of this Release, to be received by Equifax by
the close of business on the seventh day following Employee's execution of
this Release. This Release shall not become effective in any respect until
the Revocation Period has expired without notice of revocation. In the
absence of Employee's revocation of this Release, the eighth day after
--------------------
Employee's execution of this Release shall be the "Effective Date" of this
------------------------------------------------------------------
Release, at which time the rights of all parties under this Release become
fully enforceable.
7. Performance of Release: Each of the parties signing this Release
-----------------------
warrants and represents that he shall execute and deliver any and all
instruments, agreements, documents or other writings, and shall perform all
other acts deemed to be necessary to effect the terms and purposes of this
Release.
8. Other Releases: This Release constitutes a single, integrated, written
---------------
contract expressing the entire understanding between the parties with
respect to the subject matter hereof. No covenants, agreements,
representations or warranties of any kind whatsoever, whether oral, written
or implied, have been made by any party hereto, except as specifically set
forth in this Release. All prior discussions, agreements, understandings
and negotiations have been and are merged and integrated into, and are
superseded by, this Release with respect to the subject matter hereof.
However, the provision of any written agreements between the Company and
the employee which by their terms continue beyond the ending of employment,
shall continue in full force and effect and shall not be affected by the
terms of this General Release.
9. Modification: No cancellation, modification, amendment, deletion,
-------------
addition, or other changes in this Release or any provision hereof or
waiver of any right herein provided shall be effective for any purpose
unless specifically set forth in a written agreement signed by both
Employee and an authorized representative of Equifax.
10. Construction and Severability: In the event that any provision of this
------------------------------
Release shall be held to be void, voidable, or unenforceable, the remaining
portions hereof shall remain in full force and effect. The parties agree
and intend that no provision of this Release should be considered in a
legal or agency proceeding to be void, voidable or unenforceable if it can
be interpreted or modified to read in a way that is legal and enforceable.
11. Acknowledgment: Employee warrants and represents to Equifax as follows:
---------------
(a) Employee has had ample time to review all of the provisions of this
Release and fully understands it and the choices with respect to
advisability of making the Release provided herein.
(b) Employee has been encouraged by Equifax to review all of the
<PAGE>
provisions of this Release with independent legal counsel and other
advisors, and has had the opportunity to pursue such a review.
(c) Employee acknowledges that Employee has entered into this Release by
Employee's free will and choice without any compulsion, duress, or
undue influence from anyone.
(d) Employee does not have any actions pending against Equifax and/or its
subsidiaries, related companies, successors and assigns, officers,
directors, agents, employees and former employees, that address claims
that are released under the terms of this Release, and that no such
claims will be filed during the Revocation Period of this Release
without the formal notification of Employee's revocation of this
Release.
(e) Employee understands that if Employee is re-employed by Equifax, any
unpaid severance pay will not be paid. If severance pay is paid in a
lump sum and Employee is rehired, Employee must repay the severance
pay attributable to the time after the reemployment date. If Employee
is rehired at a lower salary, the difference between the severance pay
and the lower salary will continue through the severance period.
(f) Employee understands that if Employee has a loan from Equifax, is in
possession of Equifax property, or is otherwise indebted to Equifax,
severance pay will not be paid until arrangements have been made
regarding these obligations. If satisfactory arrangements are not
made, such obligations to Equifax will be deducted from Employee's
severance pay.
12. Notice.
------
(a) This Release, and any revocation of this Release or other
required communication, shall be deemed to be delivered to and
received by Equifax at the address set forth in paragraph (b)
below on the date postmarked if it is sent by US first class,
registered or certified mail, return receipt requested, postage
prepaid. Employee may send this Release to the address set forth
in paragraph (b) below using any other means (including personal
delivery, overnight delivery service, expedited courier,
messenger, or facsimile), but the Release will be deemed to have
been received by Equifax only when it actually is received by
Equifax.
(b) The Release, revocation of this Release and any other
communication which is required or permitted to be delivered to
Equifax hereunder shall be addressed as follows:
Equifax Inc.
1600 Peachtree Street, NW
Atlanta, Georgia 30309
Attention: Benefits Administration Severance Unit - H-13
Facsimile number (404) 885-8748
or to such other address as Equifax may have specified in a notice duly given to
the Employee.
<PAGE>
The undersigned further state they have carefully read this Release, know and
understand its contents, and that they execute it as their own free act and
deed.
EQUIFAX INC.
By: /s/ D. W. McGlaughlin
----------------------
Name: D. W. McGlaughlin
Date of Equifax Signature: October 30, 1996
Receipt Date: October 31, 1996
(Date of actual delivery if by hand or five days after mailing)
EMPLOYEE
By: /s/ Donald U. Hallman
----------------------
Acceptance Date: November 18, 1996
Name: Donald U. Hallman
Address: 2244 Spencers Way, Stone Mountain, Georgia 30087
Social Security Number: ###-##-####
Notice to employee: You must return the entire five-page General Release to the
above address - if you return only this page, your severance pay cannot be
processed.
<PAGE>
EXHIBIT 10.12
EQUIFAX INC.
------------
INCENTIVE STOCK OPTION AGREEMENT
Number of Shares:
Option Price:
Date of Grant: January 31, 1996
THIS AGREEMENT dated as of the Date of Grant, stated above, between Equifax
Inc., a Georgia corporation (the "Company"), and the above-named Participant
("Participant"), is made pursuant and subject to the provisions of the Company's
Employees Stock Incentive Plan (the "Plan"). All terms used herein that are
defined in the Plan have the same meaning given them in the Plan.
1. Grant of Option. Pursuant to the Plan, the Company, on the "Date of Grant"
---------------
granted to Participant, subject to the terms and conditions of the Plan and
subject further to the terms and conditions herein set forth, the right and
option to purchase from the Company the Number of Shares stated above, or
any part thereof. Such option will be exercisable as hereinafter provided.
2. Terms and Conditions. This option is subject to the following terms and
--------------------
conditions:
(a) Expiration Date, This option shall expire ten years from the date of
---------------
Grant of this option (the "Expiration Date").
(b) Exercise of Option. Except as provided in paragraphs 2(e), 3, 4 and
------------------
5, this option shall be exercisable with respect to one-fourth of the
shares subject to this option on the first anniversary of the Date of
Grant and with respect to an additional one-fourth of the shares
subject to this option on each anniversary of the Date of Grant so
that this option shall be fully exercisable on the fourth anniversary
of the Date of Grant. Once this option has become exercisable in
accordance with the preceding sentence, it shall continue to be
exercisable until the termination of Participant's rights hereunder
pursuant to paragraphs 2(e), 3, 4 or 5 or until the Expiration Date,
whichever occurs first. This option may be exercised with respect to
any number of whole shares less than the full number for which the
option could be exercised; provided, however, that this option may be
exercised for no less than twenty-five shares of Common Stock or, if
less, the number of shares of Common Stock that remains subject to
this option. A partial exercise of this option shall not affect
Participant's right to exercise this option with respect to the
remaining shares, subject to the conditions of the Plan and this
Agreement.
<PAGE>
(c) Method of Exercising and Payment for Shares. This option shall be
-------------------------------------------
exercised by written notice, accompanied by payment of the option
price, delivered to the attention of the Company's Stock Option
Administrator at the Company's principal office in Atlanta, GA. The
Date of Exercise shall be the date as indicated on the proper stock
option exercise form (e.g., exercise date on Company's stock option
exercise form; trade date on broker's letter of intent to exercise;
exercise date via computer file). The option price may be paid in
cash or cash equivalent acceptable to the Committee, or by the
surrender of shares of Common Stock (that have been held by
Participant for at least six months) with an aggregate Fair Market
Value (determined as of the closing price on the Date of Exercise as
defined above) which is not less than option price or part thereof.
(d) Non-transferability. This option is non-transferable except by will
-------------------
or by the laws of descent and distribution. In the event of any such
transfer, this option must be transferred to the same person or
persons. During Participant's lifetime, this option may be exercised
only by Participant.
(e) Termination of Employment. Except as provided below and in paragraphs
-------------------------
3, 4 and 5, this option is not exercisable after the Participant's
termination of employment with the Company or a Subsidiary. In the
event Participant's termination of employment from the Company or a
Subsidiary is due to job elimination, Participant may exercise this
option for the number of shares he was entitled to purchase pursuant
to paragraph 2 above within twelve (12) months after such termination
of employment (but in no event on or after the Expiration Date).
3. Exercise After Retirement. In the event Participant ceases to be employed
-------------------------
by the Company or a Subsidiary on account of Participant's Retirement and
prior to the Expiration Date, Participant may exercise this option at any
time within sixty months next following his Retirement (but in any event
prior to the Expiration Date) for the number of shares he was entitled to
purchase pursuant to paragraph 2 above or paragraph 5 hereinafter on the
date of his Retirement.
4. Exercise in the Event of Death or Disability. This option shall be
--------------------------------------------
exercisable with respect to the number of shares that the Participant was
entitled to purchase pursuant to paragraph 2 above on the date of his
death, in the event Participant dies while employed by the Company or
within sixty months following his Retirement and prior to the Expiration
Date of this option. In such event this option may be exercised by
Participant's estate, or the person or persons to whom his rights under
this option shall pass by will or the laws of descent and distribution.
Participant's estate or such persons may exercise this option within sixty
months of Participant's death or during the remainder of the pen-od
preceding the Expiration Date, whichever is shorter.
If Participant ceases employment with the Company due to total and
permanent disability, this option shall be exercisable with respect to the
number of shares that the Participant was entitled to purchase pursuant to
paragraph 2 above on the last date of active
-2-
<PAGE>
employment with the Company for sixty months following the last date of
active employment with the Company and prior to the Expiration Date of this
option.
5. Exercise in the Event of Change in Control. In the event a Change in
------------------------------------------
Control of the Company occurs while Participant is in the employ of the
Company, Participant may exercise this option at any time on or after the
Control Change Date (but in no event on or after the Expiration Date) for
the number of shares granted pursuant to paragraph 1 above. Should
Participant's employment with the Company or a Subsidiary terminate after
the Control Change Date other than for "cause", Participant may exercise
this option within sixty (60) months after such termination of employment
(but in no event on or after the Expiration Date). Termination for "cause"
shall mean termination upon (a) the willful and continued failure by
Participant to substantially perform his or her duties with the Company
(other than any such failure resulting from Participant's incapacity due to
physical or mental illness), after a demand for substantial performance is
delivered to Participant by his or her superior officer which specifically
identifies the manner in which such officer believes that Participant has
not substantially performed his or her duties, or (b) the engaging by
Participant in misconduct which is materially injurious to the Company,
monetarily or otherwise. For purposes of this paragraph, no act, or failure
to act, on Participant's part shall be considered "willful" unless done, or
omitted to be done, by Participant not in good faith and without reasonable
belief that Participant's action or omission was in the best interest of
the Company.
6. Retirement. For purposes of this Agreement, "Retirement" means retirement
----------
from the Company or a Subsidiary in accordance with the Participant's
applicable Retirement Plan.
7. Change in Control. For purposes of this Agreement, a "change in control of
-----------------
the Company" shall be deemed to exist in the event any person, corporation,
partnership or other entity, either alone or in conjunction with its
"affiliates" as that term is defined in Rule 405 of the General Rules and
Regulations under the Securities Act of 1933, as amended, or other group of
persons, corporations, partnerships or other entities who are not
affiliates, but who are acting in concert, are determined to own of record
or beneficially more than fifty percent (50%) of the shares of outstanding
stock of the Company. The "Control Change Date" means the date on which a
Change Control occurs.
8. Fractional Share. A fractional share shall not be issuable hereunder, and
----------------
when any provision hereof may entitle Participant to a fractional share,
such fraction shall be disregarded.
9. Limitation on Acceleration. Notwithstanding any other provision of this
--------------------------
Agreement to the contrary, this option may not be exercisable and, without
the Participant's consent, the exercisability of this option may not be
accelerated so that the shares for which the option (and all other
incentive stock options granted to the Participant by the Company or a
Subsidiary) are first exercisable in any calendar year have a Fair Market
Value (determined as the Date of Grant) exceeding $100,000.
-3-
<PAGE>
10. No Right to Continued Employment. This option does not confer upon
--------------------------------
Participant any right with respect to continuance of employment by the
Company or a Subsidiary, nor shall it interfere in any way with the right
of the Company or a Subsidiary to terminate his employment at any time.
11. Change in Capital Structure. The terms of this option shall be adjusted as
---------------------------
the Committee determines is equitably required in the event the Company (a)
effects one or more stock dividends, stock split-ups, subdivisions or
consolidations of shares or (b) engages in a transaction to which section
425 of the Code applies.
12. Governing Law. This Agreement shall be governed by the laws of the State
-------------
of Georgia.
13. Conflicts. In the event of any conflict between the provisions of the Plan
---------
as in effect on the date hereof and the provisions of this Agreement, the
provisions of the Plan shall govern. All references herein to the Plan
shall mean the Plan as in effect as of the date hereof.
14. Participant Bound by Plan. Participant hereby acknowledges receipt of a
-------------------------
copy of the Plan and agrees to be bound by all the terms and provisions
thereof.
15. Binding Effect. Subject to the limitations stated above and in the Plan,
--------------
this Agreement shall be binding upon and inure to the benefit of the
legatees, distributees, and personal representatives of Participant and the
successors of the Company.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by a
duly authorized officer, and Participant has affixed his signature hereto.
- --------------------------------------------------------------------------------
EQUIFAX INC.
By
-----------------------------------------
D. W. McGlaughlin
President and Chief Executive Officer
--------------------------------------------
Participant
-4-
<PAGE>
EQUIFAX INC.
------------
NON-QUALIFIED STOCK OPTION AGREEMENT
Number of Shares:
Option Price:
Date of Grant: January 31, 1996
THIS AGREEMENT dated as of the Date of Grant, stated above, between
Equifax Inc., a Georgia corporation (the "Company"), and the above-named
Participant ("Participant"), is made pursuant and subject to the provisions of
the Company's Employees Stock Incentive Plan (the "Plan"). All terms used
herein that are defined in the Plan have the same meaning given them in the
Plan.
1. Grant of Options. Pursuant to the Plan, the Company, on the "Date of
----------------
Grant" granted to Participant, subject to the terms and conditions of the
Plan and subject further to the terms and conditions herein set forth, the
right and option to purchase from the Company the Number of Shares stated
above, or any part thereof. This option is not intended to be an incentive
stock option under section 422A of the Internal Revenue Code. Such option
will be exercisable as hereinafter provided.
2. Terms and Conditions. This option is subject to the following terms and
--------------------
conditions:
(a) Expiration Date. This option shall expire ten years from the Date of
---------------
Grant of this option (the "Expiration Date").
(b) Exercise of 0ption. Except as provided in paragraphs 2(e), 3, 4 and
------------------
5, this option shall be exercisable as outlined on Attachment A of
this agreement. Once this option has become exercisable in accordance
with the preceding sentence, it shall continue to be exercisable until
the termination of Participant's rights hereunder pursuant to
paragraphs 2(e), 3, 4 or 5 or until the Expiration Date, whichever
occurs first. This option may be exercised with respect to any number
of whole shares less than the full number for which the option could
be exercised; provided, however, that this option may be exercised for
no less than twenty-five shares of Common Stock or, if less, the
number of shares of Common Stock that remains subject to this option.
A partial exercise of this option shall not affect Participant's right
to exercise this option with respect to the remaining shares, subject
to the conditions of the Plan and this Agreement.
(c) Method of Exercising and Payment for Shares. This option shall be
-------------------------------------------
exercised by written notice, accompanied by payment of the option
price, delivered to the attention of the company's Stock Option
Administrator at the Company's Principal office in Atlanta, GA. The
Date of Exercise shall be the date as
<PAGE>
indicated on the proper stock option exercise form (e.g., exercise
date on Company's stock option exercise form; trade date on broker's
letter of intent to exercise; exercise date via computer file). The
option price may be paid in cash or cash equivalent acceptable to the
Committee, or by the surrender of shares of Common Stock (that have
been held by Participant for at least six months) with an aggregate
Fair Market Value (determined as of the closing price on the Date of
Exercise as defined above) which is not less than the option price or
part thereof.
(d) Non-transferability. This option is non-transferable except by will
-------------------
or by the laws of descent and distribution. In the event of any such
transfer, this option must be transferred to the same person or
persons. During Participant's lifetime, this option may be exercised
only by Participant.
(e) Termination of Employment. Except as provided below and in paragraphs
-------------------------
3, 4 and 5, this option is not exercisable after the Participant's
termination of employment with the Company or a Subsidiary. In the
event Participant's termination of employment from the Company or a
Subsidiary is due to job elimination, Participant may exercise this
option for the number of shares he was entitled to purchase pursuant
to paragraph 2 above within twelve (12) months after such termination
of employment (but in no event on or after the ExpirationDate).
3. Exercise After Retirement. In the event Participant ceases to be employed
-------------------------
by the Company or a Subsidiary on account of Participant's Retirement and
prior to the Expiration Date, Participant may exercise this option at any
time within sixty months next following his Retirement (but in any event
prior to the Expiration Date) for the number of shares he was entitled to
purchase pursuant to paragraph 2 above or paragraph 5 hereinafter on the
date of his Retirement.
4. Exercise in the Event of Death or Disability. This option shall be
--------------------------------------------
exercisable with respect to the number of shares that the Participant was
entitled to purchase pursuant to paragraph 2 above on the date of his
death, in the event Participant dies while employed by the Company or
within sixty months following his Retirement and prior to the Expiration
Date of this option. In such event, this option may be exercised by
Participant's estate, or the person or persons to whom his rights under
this option shall pass by will or the laws of descent and distribution.
Participant's estate or such persons may exercise this option within sixty
months of Participant's death or during the remainder of the period
preceding the Expiration Date, whichever is shorter.
If Participant ceases employment with the Company due to total and
permanent disability, confirmed by a licensed physician's statement, this
option shall be exercisable with respect to the number of shares that the
Participant was entitled to purchase pursuant to paragraph 2 above on the
last date of active employment with the Company for sixty months following
the last date of active employment with the Company and prior to the
Expiration Date of this option.
-2-
<PAGE>
5. Exercise in the Event of Change in Control. In the event a Change in
------------------------------------------
Control of the Company occurs while Participant is in the employ of the
Company, Participant may exercise this option at any time on or after the
Control Change Date (but in no event on or after the Expiration Date) for
the number of shares granted pursuant to paragraph 1 above. Should
Participant's employment with the Company or a Subsidiary terminate after
the Control Change Date other than for "cause," Participant may exercise
this option within sixty (60) months after such termination of employment
(but in no event on or after the Expiration Date). Termination for "cause"
shall mean termination upon (a) the willful and continued failure by
Participant to substantially perform his or her duties with the Company
(other than any such failure resulting from Participant's incapacity due to
physical or mental illness), after a demand for substantial performance is
delivered to Participant by his or her superior officer which specifically
identifies the manner in which such officer believes that Participant has
not substantially performed his or her duties, or (b) the willful engaging
by Participant in misconduct which is materially injurious to the Company,
monetarily or otherwise. For purposes of this paragraph, no act, or
failure to act, on Participant's part shall be considered "willful" unless
done, or omitted to be done, by Participant not in good faith and without
reasonable belief that Participant's action or omission was in the best
interest of the Company.
6. Retirement. For purposes of this Agreement, "Retirement" means retirement
----------
from the Company or a Subsidiary in accordance with the Participant's
applicable Retirement Plan.
7. Change in Control. For purposes of this Agreement, a "change in control of
-----------------
the Company" shall be deemed to exist in the event any person, corporation,
partnership or other entity, either alone or in conjunction with its
"affiliates" as that term is defined in Rule 405 of the General Rules and
Regulations under the Securities act of 1933, as amended, or other group of
persons, corporations, partnerships or other entities who are not
affiliates, but who are acting in concert, are determined to own of record
or beneficially more than fifty percent (50%) of the shares of outstanding
stock of the Company. The "Control Change Date" means the date on which a
Change in Control occurs.
8. Fractional Share. A fractional share shall not be issuable hereunder, and
----------------
when any provision hereof may entitle Participant to a fractional share,
such fraction shall be disregarded.
9. No Right to Continued Employment. This option does not confer upon
--------------------------------
Participant any right with respect to continuance of employment by the
Company or a Subsidiary, nor shall it interfere in any way with the right
of the Company or a Subsidiary to terminate his employment at any time.
10. Change in Capital Structure. The terms of this option shall be adjusted as
---------------------------
the Committee determines is equitably required in the event the Company (a)
effects one or more stock dividends, stock split-ups, subdivisions or
consolidations of shares or (b) engages in a transaction to which section
425 of the Code applies.
11. Governing Law. This Agreement shall be governed by the laws of the State
-------------
of Georgia.
-3-
<PAGE>
12. Conflicts. In the event of any conflict between the provisions of the Plan
---------
as in effect on the date hereof and the provisions of this Agreement, the
provisions of the Plan shall govern. All references herein to the Plan
shall mean the Plan as in effect as of the date hereof.
13. Participant Bound by Plan. Participant hereby acknowledges receipt of a
-------------------------
copy of the Plan and agrees to be bound by all the terms and provisions
thereof.
14. Binding Effect. Subject to the limitations stated above and in the Plan,
--------------
this Agreement shall be binding upon and inure to the benefit of the
legatees, distributees, and personal representatives of Participant and the
successors of the Company.
15. Taxes. In accordance with procedures established by the Committee, the
-----
Company may withhold from Common Stock delivered to the Participant,
sufficient shares of Common Stock (valued as of the Date of Exercise) to
satisfy withholding and employment taxes, or the Participant shall pay to
the Company in cash or Common Stock (valued as of the Date of Exercise)
sufficient amounts or shares to satisfy such obligation.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed
by a duly authorized officer, and Participant has affixed his signature hereto.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
EQUIFAX INC.
By
------------------------------------------
D. W. McGlaughlin
President & Chief Executive Officer
---------------------------------------------
Participant
-4-
<PAGE>
EXHIBIT 10.19
EQUIFAX INC.
------------
Restricted Stock Award
THIS AGREEMENT, dated the 1st day of February, 1995, between EQUIFAX INC.,
a Georgia corporation (the "Company"), and D. W. McGlaughlin ("Participant"), is
made pursuant and subject to the provisions of the Company's Omnibus Stock
Incentive Plan (the "Plan"), a copy of which was previously furnished to the
Participant. All terms used herein that are defined in the Plan have the same
meaning given them in the Plan.
1. Award of Stock. Pursuant to the Plan, the Company, on 1/29/97 (the "Date
--------------
of Grant"), awarded the Participant, subject to the terms and conditions of
the Plan and subject further to the terms and conditions set forth herein,
14,921 shares of Common Stock of the Company (the "Restricted
Stock").
2. Terms and Conditions
--------------------
a) Conditions for Vesting. Attached hereto is Exhibit A - Conditions for
----------------------
Vesting, which is hereby incorporated by reference.
b) Stock Power. The Participant shall deliver to the Company a stock
-----------
power, endorsed in blank, with respect the Restricted Stock.
c) Custody of Certificate. Custody of stock certificates evidencing
----------------------
shares of Restricted Stock shall by retained by the Company until the
Conditions for Vesting are satisfied (except as provided in paragraph
3, below).
3. Death, Disability, Retirement or Change in Control. Paragraph 2 to the
--------------------------------------------------
contrary notwithstanding, in the event of the Participant's dearth,
disability termination or Retirement while in the employ of the Company or
a Subsidiary or if a Change in Control occurs, Participant's rights in the
shares of Restricted Stock awarded pursuant to this Agreement shall become
nonforfeitable and transferable as of the date of the Participant's death,
disability termination or Retirement or the Control Change Date.
4. Retirement. For purposes of this Agreement, "Retirement" means retirement
----------
from the Company or a Subsidiary in accordance with Participant's
applicable Retirement Plan.
5. Change in Control. For purposes of this Agreement, a "change in control of
-----------------
the Company" shall be deemed to exist in the event any person,
1
<PAGE>
corporation, partnership or other entity, either alone or in conjunction
with its "affiliates" as that term is defined in Rule 405 of the General
Rules and Regulations under the Securities Act of 1933, as amended, or
other group of persons, corporations, partnerships or other entities who
are not affiliates, but who are acting in concert, are determined to own of
record or beneficially more than fifty percent (50%) of the shares of
outstanding stock of any class of voting stock of the Company. The "Control
Change Date" means the date on which a Change in Control occurs.
6. Shareholder Rights. With respect to Restricted Stock, a Participant will
------------------
have the right to receive dividends and vote shares of Restricted Stock.
7. Fractional Shares. Fractional shares shall not be issuable hereunder, and
-----------------
when any provision hereof may entitle Participant to a fractional share
such fraction shall be disregarded.
8. Non Rights To Continue Employment. This Restricted Stock award does not
---------------------------------
confer upon Participant any right with respect to continuance of employment
by the Company or a Subsidiary, nor shall it interfere in any way with the
right of the Company or Subsidiary to terminate a Participant's employment
at any time.
9. Change in Capital Structure. The terms of this Restricted Stock Award
---------------------------
shall be adjusted as the Committee determines is equitably required in the
event the Company (a) effects one or more stock dividends, stock split-ups,
subdivisions or consolidations of shares or (b) engages in transaction to
which section 425 of the Code applies.
10. Governing Law. This Agreement shall be governed by the laws of the State
-------------
of Georgia.
11. Conflicts. In the event of any conflict between the provisions of the Plan
---------
as in effect on the Date of Grant and the provisions of this Agreement, the
provisions of the Plan shall govern. All references herein to the Plan
shall mean the Plan as in effect on the date of the award of Restricted
Stock.
12. Participant Bound by Plan. Participant hereby acknowledges receipt of a
-------------------------
copy of the Plan and agrees to be bound by all the terms and provisions
thereof.
13. Binding Effect. Subject to the limitations stated above and in the Plan,
--------------
this Agreement shall be binding upon an inure to the benefit of the
legatees, distributes, and personal representatives of the Participant and
the successors of the Company.
2
<PAGE>
14. Taxes. The Participant shall pay to the company such amount as may be
-----
required to satisfy withholding and employment taxes on or before the date
when the Restricted Stock is delivered to Participant. Said payment shall
be in cash unless Participant executes a withholding tax election form. In
such case a sufficient number of shares will be withheld to satisfy all tax
obligations.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by a
duly authorized officer, and Participant has affixed his signature hereto.
EQUIFAX INC.
By:
--------------------------------
J. T. Chandler
Corporate Vice President
Human Resources
---------------------------------
Participant
3
<PAGE>
EXHIBIT 10.23
FOURTH AMENDMENT TO THE
EQUIFAX INC. SUPPLEMENTAL
EXECUTIVE RETIREMENT PLAN
-------------------------
THIS AMENDMENT to the Equifax Inc. Supplemental Executive Retirement
Plan (the "Plan"), made this 2nd day of December, 1996, by Equifax Inc., a
corporation organized and existing under the laws of the State of Georgia
(hereinafter referred to as the "Company"), to be effective as indicated below.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company has heretofore adopted the Plan in order to
provide supplemental retirement benefits to certain employees of the Company;
WHEREAS, pursuant to Section 6.1 of the Plan,
the Board of Directors has the right to amend the Plan from time to time;
WHEREAS, the Plan was amended and restated in its entirety effective
as of October 1, 1989, and has subsequently been amended on three separate
occasions;
WHEREAS, the Company desires further to amend the Plan at this time in
order to take into account the Company's new salary classification system,
effective May 1, 1996; and
WHEREAS, the Board of Directors has authorized
the following amendment to the Plan;
NOW, THEREFORE, the Company does hereby amend
the Plan as follows:
I.
In accordance with a change in the salary administration program of
the Company, references in the Plan to "Exempt Grade No. 79" and "Exempt Grade
No. 84"
<PAGE>
shall mean Exempt Grade No. 3 and Exempt Grade No. 5, respectively, effective as
of May 1, 1996. References in the Plan to Exempt Grade No. 45 shall mean Exempt
Grade No. 83 for the period April 1, 1993 through April 30, 1996, and shall mean
Exempt Grade No. 4 on and after May 1, 1996.
II.
All other parts of the Plan not inconsistent herewith are hereby
confirmed and ratified.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed by its duly authorized officers, and the corporate seal affixed, as of
the day and year first above written.
COMPANY:
EQUIFAX INC.
By: /s/ D. E. McGuffey
-------------------------------
Title: Vice President - CIBF
----------------------------
ATTEST:
By: /s/ Kathy Kelpen
---------------------------
Title: Staff Assistant Senior
------------------------
-2-
<PAGE>
EXHIBIT 10.26
FIRST AMENDMENT
TO
AGREEMENT FOR
COMPUTERIZED CREDIT REPORTING SERVICES
AND
OPTIONS TO PURCHASE AND SELL ASSETS
THIS FIRST AMENDMENT TO AGREEMENT FOR COMPUTERIZED CREDIT REPORTING
SERVICES AND OPTIONS TO PURCHASE AND SELL ASSETS (the "Amendment") dated as of
December 28, 1990, is made by and among THE CREDIT BUREAU, INCORPORATED OF
GEORGIA, a Georgia corporation ("CBI"), EQUIFAX INC., a Georgia corporation
("Equifax"), COMPUTER SCIENCES CORPORATION, a Nevada corporation ("CSC"), CSC
CREDIT SERVICES, INC., a Texas corporation ("Credit Services") (for itself and
as successor in interest to CSC CREDIT SERVICES OF MINNESOTA, INC., a Texas
corporation ("Minnesota")), CREDIT BUREAU OF CINCINNATI, INC., an Ohio
corporation ("Cincinnati"), CREDIT BUREAU OF GREATER KANSAS CITY, INC., a
Missouri corporation ("Kansas City"), JOHNS HOLDING COMPANY, a Delaware
corporation ("JHC"), CSC ACCOUNTS MANAGEMENT, INC., a Texas corporation
("Accounts Management"), CSC ENTERPRISES, INC., a Nevada corporation ("CEI"),
and CSC ENTERPRISES, a Delaware general partnership (the "Partnership");
WITNESSETH:
WHEREAS, CBI, Equifax, CSC, Credit Services, Minnesota, Cincinnati,
Kansas City, JHC and Accounts Management were parties to that certain Agreement
for Computerized Credit Reporting Services and Options to Purchase and Sell
Assets, dated as of August 1, 1988 (the "Agreement"); and
WHEREAS, Minnesota has been merged into Credit Services effective
September 30, 1988; and
WHEREAS, Credit Services, CEI, CSC Ventures, Inc., a Nevada
corporation ("CSCV"), CBI Ventures Inc., a Georgia corporation ("CBIV"), and
Equifax Ventures Inc., a Georgia corporation ("Equifax Sub"), have entered into
that certain Partnership Agreement of the Partnership dated December 28, 1990
(the "Partnership Agreement"); and
WHEREAS, pursuant to that certain Assignment and Assumption Agreement
dated of even date herewith (the "Initial Assignment") by and among Credit
Services, Cincinnati, Kansas City and JHC (collectively, the "Initial
Assignors") and CEI, the Initial Assignors have assigned to CEI all of their
right, title and interest in and to the Agreement, and CEI has assumed all of
the Initial Assignors' obligations under the Agreement; and
<PAGE>
WHEREAS, pursuant to that certain Assignment and Assumption Agreement
of even date herewith (the "Subsequent Assignment") by and between CEI, Credit
Services and the Partnership, CEI has assigned to the Partnership, among other
things, all of its right, title and interest in and to the Agreement, and the
Partnership has assumed all of CEI's obligations under the Agreement; and
WHEREAS, the parties hereto have agreed to amend the Agreement in
certain respects as set forth herein.
NOW, THEREFORE, in consideration of the premises and of other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Acknowledgement of Assignments. CBI and Equifax, as evidenced by
------------------------------
their signatures hereto, hereby acknowledge and consent to (i) the assignment by
the Initial Assignors to CEI of all of their right, title and interest
(including the assumption by CEI of their obligations) in and to the Agreement
pursuant to the Initial Assignment and (ii) the assignment by CEI to the
Partnership of all of its right, title and interest (including the assumption by
the Partnership of its obligations) in and to the Agreement pursuant to the
Subsequent Assignment. By virtue of the acquisition and the assumption by the
Partnership of the rights, titles and interests and the liabilities,
respectively, under the Agreement of the Initial Assignors (referred to as
Bureaus in the Agreement), the provisions of the Agreement referring to Bureaus
should be read accordingly.
2. Amendments. The Agreement is hereby amended as follows:
----------
a. Section I shall be amended to insert the following additional
definition: "Partnership" means CSC Enterprises, a Delaware general
partnership.
b. Paragraph 9(b) shall be amended to delete in two places the
phrase "Credit Services" and to insert in lieu thereof the phrase "the
Partnership".
c. Paragraph 14(c) shall be amended to delete the requirement that
Test Statements be delivered in respect of Credit Services' fiscal years
1990 and 1991, and to provide instead that, to the extent CBI is obligated
to make future payments pursuant to Paragraph 14, the Partnership shall
deliver to CBI information which is the practical equivalent of such Test
Statements.
d. Paragraph 21(b) shall be amended to read as follows:
"The Partnership covenants that, so long as the provisions of Articles IV
and V of this Agreement remain in effect, it will prepare, or cause to be
prepared, and deliver, or cause to be delivered, to CBI unaudited quarterly
combined financial statements of that part of the business of the
Partnership (and its subsidiaries) related to the Subsidiaries' Assets and
Liabilities, as soon as available, accompanied by a certificate executed by
a representative of the Partnership certifying that such financial
statements have been prepared in accordance with generally accepted
accounting principles (except for the
-2-
<PAGE>
provisions for income taxes) consistently applied subject to the right, as
permitted by such principles, to choose alternative treatments of certain
matters. Such financial statements shall include sufficient financial
information to permit the parties to this Agreement to define the rights
and obligations of such parties upon the exercise of their respective
rights under said Articles IV and V."
e. Paragraph 37(a) shall be amended to read as follows:
If to CSC, Accounts Management, the Bureaus or the Partnership:
---------------------------------------------------------------
CSC Enterprises, Inc.
652 E. North Belt, Suite 400
Houston, Texas 77060
Attention: President
3. Paragraph 13. The parties acknowledge that as a result of the
------------
Partnership Agreement and the Subsequent Assignment, compliance with the
requirements of Paragraph 13 is no longer practicable. The parties therefore
agree that Paragraph 13 of the Agreement shall be null and void so long as the
Subsidiaries' Assets and Liabilities are held by the Partnership and its
subsidiaries. The parties, however, agree that if (i) the conditions described
in the first sentence of Paragraph 13(a) prior to its amendment hereby are
satisfied, (ii) CBI receives written notice from the Subsidiaries of their
intention to sell the Subsidiaries' Assets and Liabilities to CBI, and (iii)
within thirty (30) days of the receipt of such notice, CBI delivers to the
Partnership a written request describing a proposed restructuring of the said
sale, the parties will use their best efforts to cause the Subsidiaries to
restructure the said sale based upon CBI's request, so long as such
restructuring does not result in any material adverse economic, accounting, tax
or other consequence to the Subsidiaries or to the partners in the Partnership
(other than the Equifax Partners, as defined in the Partnership Agreement) or in
any material way adversely affect the rights of the Subsidiaries with respect to
such sale of the Subsidiaries' Assets and Liabilities. The determination of any
such adverse consequence or effect to the Subsidiaries shall be based on the
sole discretion of the Managing Partner on behalf of the Partnership and the
Board of Directors of each of the other Subsidiaries on behalf of such
Subsidiaries. The determination of any such adverse consequence or effect to
any partner in the Partnership shall be based on the sole discretion of such
partner. The parties agree that the sole reason for the proposal of a
restructuring by CBI would be to provide CBI with the benefits that were
contemplated by Paragraph 13 prior to its amendment hereby.
4. Certain Partnership Acquisitions. The parties acknowledge that
--------------------------------
corporations or other entities all of the stock or substantially all of the
assets of which are acquired by the Partnership after the date hereof must meet,
in order to qualify as Acquired Corporations under the Agreement, the tests set
forth in Paragraph 11(c) of the Agreement.
5. References to the Agreement. All capitalized terms which are
---------------------------
defined in the Agreement and not otherwise defined herein shall have the same
meaning herein as in the Agreement. On or after the date hereof, each reference
in the Agreement to "this Agreement," "hereunder," "herein," or words of like
import shall mean and be a reference to the Agreement,
-3-
<PAGE>
as amended by this Amendment. All references to Paragraph numbers in this
Amendment shall be references to the corresponding Paragraph of the Agreement.
6. Authority. Each of the parties hereto represents to the other
---------
parties hereto that: (a) it has the full corporate (or, in the case of the
Partnership, partnership) power and authority to execute and deliver this
Amendment, to perform under the Agreement, as amended by this Amendment, and to
consummate the transactions contemplated by the Agreement, as amended by this
Amendment, without the necessity of any act, approval or consent of any other
Person whomsoever, except such as have been, or will be, obtained; (b) the
Agreement, as amended by this Amendment, has been approved by its Board of
Directors, or the Executive Committee thereof, (or, in the case of the
Partnership, by the respective Boards of Directors, or the Executive Committees
thereof, of each of its partners), except that this Amendment has not been
formally considered by the Board of Directors of Equifax or any committee
thereof, and constitutes the valid and legally binding obligation of such party
enforceable against such party in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws from time to time in effect which affect the
enforcement of creditors' rights generally, and except as enforcement of
remedies may be limited by general equitable principles. Equifax undertakes
that its Executive Committee will formally consider the ratification of the
execution of this Amendment no later than January 31, 1991.
7. Counterparts. This Amendment may be executed in several
------------
counterparts, and each counterpart, when so executed and delivered, shall
constitute an original instrument, and all such separate counterparts shall
constitute but one and the same instrument.
8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
Executed as of the date first above written:
THE CREDIT BUREAU, INCORPORATED OF GEORGIA
By
-----------------------------------------
Title
--------------------------------------
EQUIFAX INC.
By:
----------------------------------------
Title:
-------------------------------------
-4-
<PAGE>
COMPUTER SCIENCES CORPORATION
By:
----------------------------------------
Title:
-------------------------------------
CSC CREDIT SERVICES, INC.
By:
----------------------------------------
Title:
-------------------------------------
CREDIT BUREAU OF CINCINNATI, INC.
By:
----------------------------------------
Title:
-------------------------------------
CREDIT BUREAU OF GREATER KANSAS CITY, INC.
By:
----------------------------------------
Title:
-------------------------------------
JOHNS HOLDING COMPANY
By:
----------------------------------------
Title:
-------------------------------------
CSC ACCOUNTS MANAGEMENT, INC.
By:
----------------------------------------
Title:
-------------------------------------
CSC ENTERPRISES, INC.
By:
----------------------------------------
Title:
-------------------------------------
-5-
<PAGE>
CSC ENTERPRISES
By: CSC ENTERPRISES, INC., Its Managing
Partner
By:
----------------------------------------
Title:
-------------------------------------
-6-
<PAGE>
SECOND AMENDMENT
TO
AGREEMENT FOR
COMPUTERIZED CREDIT REPORTING SERVICES
AND
OPTIONS TO PURCHASE AND SELL ASSETS
THIS SECOND AMENDMENT TO AGREEMENT FOR COMPUTERIZED CREDIT REPORTING
SERVICES AND OPTIONS TO PURCHASE AND SELL ASSETS (the "Second Amendment") dated
as of the _____ day of ____________, 1991, is made by and among THE CREDIT
BUREAU, INCORPORATED OF GEORGIA, a Georgia corporation ("ECIS" or "CBI"),
EQUIFAX INC., a Georgia corporation ("Equifax"), and CSC ENTERPRISES, a Delaware
general partnership (the "Partnership"), CSC ACCOUNTS MANAGEMENT, INC., a Texas
corporation ("Accounts Management") and COMPUTER SCIENCES CORPORATION, a Nevada
corporation ("CSC").
WITNESSETH:
----------
WHEREAS, CBI Ventures Inc., a Georgia corporation, and Equifax Ventures
Inc., a Georgia corporation, entered into that Partnership Agreement (the
Partnership Agreement") of the Partnership; and
WHEREAS, pursuant to that certain Assignment and Assumption Agreement,
dated as of December 28, 1990, by and among Credit Services, Cincinnati, Kansas
City, JHC, as assignors, and CEI, as assignee, CEI was assigned all of
assignors' right, title and interest in and to the Original Agreement and CEI
assumed all of the assignors' obligations under the Original Agreement; and
WHEREAS, pursuant to that certain Assignment and Assumption Agreement,
dated as of December 28, 1990, by and between CEI, Credit Services, as
assignors, and the Partnership, as assignee, CEI assigned to the Partnership,
among other things, all of its right, title and interest in and to the Original
Agreement, and the Partnership assumed all of CEI's obligations under the
Original Agreement; and
WHEREAS, the Original Agreement was amended as of December 28, 1990, by
that First Amendment to Agreement For Computerized Credit Reporting Services and
Options to Purchase and Sell Assets, among ECIS, Equifax, CSC, Credit Services,
Cincinnati, Kansas City, JHC, Accounts Management, CEI and the Partnership (the
"First Amendment," the Original Agreement, as amended by the First Amendment
being referred to herein as the "Agreement");
WHEREAS, CBI has adopted the assumed name "Equifax Credit Information
Services" and desires to use the acronym "ECIS" instead of "CBI" and any
reference to "CBI" or "ECIS" refers to THE CREDIT BUREAU, INCORPORATED OF
GEORGIA, a Georgia corporation; and
-7-
<PAGE>
WHEREAS, the parties hereto have agreed to amend the Agreement in certain
respects as set forth herein.
1. Amendment
Exhibit A to the Agreement titled "The Automated Credit Reporting
Online Package (ACROPAC(TM)) System Description," is amended as follows:
a. At page 9 of Exhibit A the following language is deleted:
"CREDIT MARKETING SERVICE (CMS)
- CMS will represent the bureau at the national and regional level on
promotion programs sales.
- CMS will also assist the bureau on any promotion program sold by the
bureau."
and inserted in lieu thereof is the following language:
"PROMOTION MARKETING
1. ECIS Customer List. All promotion sales to any credit grantor (a
------------------
"Listed Customer") listed on Exhibit 1 annexed to this Exhibit A, as
amended from time to time pursuant to the provisions hereof (the "ECIS
Customer List") will be conducted solely by ECIS. A subsidiary or
division of a Listed Customer shall be deemed to be a Listed Customer
unless specifically excepted.
2. Promotion Sales by the Partnership. Notwithstanding any provision in
----------------------------------
the Agreement to the contrary and subject to the restrictions provided
in subparagraphs (i) and (ii) below, the Partnership shall have the
non-exclusive right to sell promotions to a credit grantor (a
"Potential Partnership Customer") who at the time of such sale is not
listed on the ECIS Customer List and whose decision-making office is
within the following area: Arkansas; Illinois (except for Cook,
DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will
Counties); Indiana; Iowa; Kansas; Kentucky; Bienville, Bossier, Caddo,
Claiborne, Desoto, Jackson, Lincoln, Natchitoches, Red River, Sabine,
Webster, Morehouse, Oauchita, Richland, Union and West Carroll
Parishes, Louisiana; Minnesota; Missouri; Nebraska; North Dakota;
Ohio; Oklahoma; South Dakota; Texas; and Wisconsin (the "Partnership
Area"), where the promotion covers consumers residing in and/or
outside of the Partnership Area, provided that:
(i) the Partnership shall have given notice to ECIS of the
Partnership's intention to make a Presentation to a Potential
Partnership Customer, describing the Presentation in reasonable
detail, including the nature of the Presentation, the name and
address of the Potential Partnership Customer, and the persons
proposed to be contacted at the Potential Partnership Customer.
Notwithstanding any provision of the Agreement - to the
-8-
<PAGE>
contrary, for purposes of this subparagraph (i), notice shall be
deemed sufficient if: A) Sent by telecopy to ECIS at the
following facsimile number, or any such other facsimile number
as ECIS may, by giving written notice under the Agreement,
designate and B) the Partnership places a voice telephone call
to the following number to alert ECIS that a facsimile has been
sent or is forthcoming.
The Credit Bureau, Incorporated of Georgia
Attention: Mary Deal
Facsimile Number: 404-888-3402
Telephone Number: 404-885-8063
and;
(ii) ECIS does not within 24 hours after receipt of the notice
provided for in subparagraph (i) above (except that Saturdays,
Sundays, New Year's Day, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day, the Friday following Thanksgiving Day,
Christmas Eve and Christmas Day shall be excluded in such time
measurement) give written notice to the Partnership, Attention:
Executive Vice-President CRD, Facsimile Number: 713-878-1905 (or
any such other facsimile number as the Partnership may, by
giving written notice under the Agreement, designate), that,
prior to ECIS's receipt of such notice, ECIS had begun a Sales
Effort directed toward that Potential Partnership Customer in
respect of a sale of a promotion which comprises or includes in
substantial part the promotion contemplated by the Partnership,
describing the Sales Effort in reasonable detail, including the
nature of such Sales Effort, the persons contacted at the
Potential Partnership Customer, and the place and date of such
Sales Effort. In the event ECIS gives such notice, the
Partnership will not make such Presentation to this customer.
The Partnership will notify ECIS of the result of the
Presentation. Should a sale by the Partnership not result, the
next subsequent effort to market a promotion to that Potential
Partnership Customer @shall be subject to the procedure
described in these subparagraphs (i) and (ii). If a sale does
result, subsequent Presentations to that Potential Partnership
Customer do not require the Partnership to follow the procedure
described in these subparagraphs (i) and (ii).
Notwithstanding any provision in the Agreement to the contrary, the
Partnership shall have the right to market and to sell promotions to a
credit grantor who at the time of such sale is not listed on the ECIS
Customer List and whose decision-making office is within a zip code
area covered by a file of a bureau owned by the Partnership
("Partnership Zip Code Area"), where the promotion covers only
consumers residing in the Partnership Area,and in connection with such
sale, the Partnership shall not be required to follow the procedures
referred to in subparagraphs (i) and (ii) above. If the decision
making office is not within the
-9-
<PAGE>
Partnership Area, the Partnership agrees to obtain permission from the
bureau file owner before marketing or selling a promotion.
3. ACROPAC(TM) Marketing by ECIS and the Partnership. ECIS and the
----------------------------------------------
Partnership agree that each will aggressively market all files in
ACROPAC(TM) irrespective of ownership, consistent with the provisions
hereof. The seller of a promotion shall set the price, terms and
conditions of the sale. Since the parties agree that the ECIS data
processing costs chargeable to a promotion sold by the Partnership
shall not exceed 10% of the gross revenue of that promotion, the
Partnership agrees not to sell promotions processed by ECIS for less
than $2,000. The parties agree that the Partnership may use a third-
party processor to process its data to create promotions or it may
process the data itself. Upon the Partnership's request, ECIS will
furnish the Partnership a copy of all of the data contained in the
credit files in the Partnership Zip Code Area in ECIS Master Record
format for $15,000.00 per copy ("File Copy Rate"). The parties agree
that when ECIS does not process the promotions sold by the
Partnership, ECIS is not entitled to the data processing costs or the
6% of net revenue administrative fee described in Exhibit A.
Consistent with the terms and conditions contained in the Agreement
and this Second Amendment, the Partnership shall have the right to
access all files in ACROPAC(TM) in connection with its promotion sales
processed by ECIS. Upon request of the Partnership, ECIS will assist
the Partnership on all promotion sales without charge to the
Partnership unless the Partnership requests that an ECIS sales
representative contact the customer directly, either by telephone or
in person. In the event that the Partnership requests that an ECIS
sales representative contact a customer directly, either by telephone
or in person, ECIS will receive 50% of the 25% commission on that
promotion sale.
4. Joint Annual Meeting of ECIS and the Partnership. In order to assure
------------------------------------------------
the aggressive marketing of all of the files in the ACROPAC(TM) System
and to provide a once-a-year forum to voice concerns regarding such,
the parties agree to hold an joint annual meeting. The meeting will
be held on the anniversary, or as dose as reasonably possible thereto,
to the signing of the Second Amendment ("Anniversary").
(i) The agenda of the meeting is to discuss aggressive marketing of
the ACROPAC(TM) system and to discuss additions and deletions to
the ECIS Customer List. Each party agrees that the joint meeting
is the proper and only forum for discussion of additions and
deletions. Each party will bring all of the necessary
information to the meeting in order to adequately discuss the
issues included in the meeting agenda. Each party may bring any
personnel it believes are reasonably necessary. While the
attendance of the President of ECIS and the attendance of the
President of the Credit Reporting Division of the Partnership is
not required, it is required that both presidents be available
to consult with the participants of the joint meeting during the
meeting. If presidential participation is
-10-
<PAGE>
requested on a topic and the president whose participation is
requested is unavailable, the topic will be tabled for further
discussion when such president is available.
(ii) The parties will discuss the addition to the ECIS Customer List
of any customer to which the Partnership has sold two (2) or
more promotions each involving more than 500,000 names since, in
the case of the first joint review meeting, the signing of the
Second Amendment, or in the case of subsequent joint review
meetings, since the last joint review meeting. The parties will
discuss afl relevant factors relating to the customer
contemplated to be added to the ECIS Customer List. Upon
consideration of the factors, ECIS will decide at the joint
review meeting whether or not to add the customer to the ECIS
Customer List. ff ECIS adds the customer to the ECIS Customer
List, the Partnership will receive 50% of the 25% commission for
all subsequent promotion sales to that customer for the next 24
months.
(iii) The parties will discuss deleting customers from the ECIS
Customer List who have not purchased any promotions from ECIS
since, in the case of the first joint review meeting, the
signing of the Second Amendment, or in the case of subsequent
joint review meetings, since the last joint review meeting. In
discussing the deletion of the customer from the ECIS Customer
List, the parties will consider:
1. Has the customer purchased any promotions from other
vendors within the time frame considered?
2. Has ECIS made a Presentation within the time frame
considered?
3. Has ECIS made a Sales Effort within the time frame
considered?
4. Any other relevant considerations/circumstances.
(iv) After considering all the factors raised in the discussion, the
parties must jointly agree to remove the customer from the ECIS
Customer List. If the parties cannot jointly agree before the
end of the annual meeting that the customer should be deleted,
the customer will not be deleted from the ECIS Customer List.
(v) ECIS will provide a copy of the ECIS Customer List for the year
as soon as possible after the joint annual meeting.
5. Audit. ECIS agrees to have its independent public accounting firm
-----
annually perform, at no cost to the Partnership, a third party review,
as defined in accordance with SAS #44, of the ECIS data processing
system as it relates to promotions.
-11-
<PAGE>
6. ECIS Affiliates. In the exercise of its rights and performance of its
---------------
duties under this Exhibit A, ECIS may act through an Affiliate,
provided, however, ECIS shall not thereby be relieved of any of its
obligations hereunder.
7. Definitions. For purposes of this Exhibit A:
-----------
"Affiliate" means any Person controlling, controlled by or under
common control with any other Person. For purposes of this
definition, "control" (including"controlled by" and "under common
control with") means ownership, directly or indirectly, beneficially
and of record of all of the equity of another Person.
"Presentation" means verbal or written communications with a Potential
Partnership Customer regarding a specific promotion and containing a
pricing proposal. Verbal and written communications, absent such
pricing proposal, shall not be a Presentation but will be a Sales
Effort.
"Promotion" means a list of consumer names and corresponding addresses
compiled from credit files by identifying such names on the basis of
credit information that match certain credit criteria supplied and/or
approved by the promotion customer. The definition of "promotion"
shall include products which review a customer's account portfolio to
screen or monitor for positive or negative changes to the
portfolio or individual accounts therein.
"Sales Effort" means verbal or written communications with a Potential
Partnership Customer regarding a specific promotion."
b. Wherever the term "CMS" appears in Exhibit A, such term is deleted and the
phrase "ECIS or any Affiliate of ECIS designated by ECIS" is inserted in lieu
thereof.
c. On page 1 of the Agreement, the term CBI is defined as referring to THE
CREDIT BUREAU, INCORPORATED OF GEORGIA, a Georgia corporation. Subsequently
that corporation has adopted the assumed name "Equifax Credit Information
Services" and desires to use the acronym "ECIS" instead of "CBI." Therefore, the
Agreement shall be amended such that the acronyms "ECIS" and "CBI" are
interchangeable and either may be used to refer to THE CREDIT BUREAU,
INCORPORATED OF GEORGIA.
2. References to the Agreement.
---------------------------
All capitalized terms which are defined in the Agreement and not otherwise
defined herein shall have the same meaning herein as in the Agreement. On or
after the date hereof, each reference in the Agreement to "this Agreement",
"hereunder", "herein", or words of like import shall mean and be a reference to
the Agreement, as amended by this Second Amendment.
3. Authority.
---------
6
<PAGE>
Each of the parties hereto represents to the other parties hereto that:
(a) it has the full corporate (or, in the case of the Partnership, partnership)
power and authority to execute and deliver this Second Amendment, to perform
under the Agreement, as amended by this Second Amendment, and to consummate the
transactions contemplated by the Agreement, as amended by this Second Amendment,
without the necessity of any act, approval or consent of any other person
whomsoever, except such as having been obtained; and (b) the Agreement, as
amended by this Second Amendment, has been approved by its Board of Directors,
or the Executive Committee thereof (or, in the case of the Partnership, by the
respective Boards of Directors, or the Executive Committees thereof, of each of
its partners), and constitutes the valid and legally binding obligation of such
party enforceable against such party in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws from time to time in effect which affect the
enforcement of creditors' rights generally, and except as enforcement of
remedies may be limited by general equitable principles.
4. Counterparts.
------------
This Second Amendment may be executed in several counterparts, and each
counterpart, when so executed and delivered, shall constitute an original
instrument, and all such separate counterparts shall constitute but one and the
same instrument.
5. Merger.
------
This Second Amendment sets forth the entire understanding of the parties
regarding the subject matter hereof, and all prior such understandings, written
or oral, are merged herein.
6. Governing Law.
-------------
THIS SECOND AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF TEXAS.
Executed as of the date first above written:
THE CREDIT BUREAU, INCORPORATED OF GEORGIA
By:
---------------------------------------
Title:
------------------------------------
EQUIFAX INC.
By:
---------------------------------------
Title:
------------------------------------
7
<PAGE>
CSC ENTERPRISES
By: CSC ENTERPRISES, INC.
Its Managing Partner
By:
---------------------------------------
Title:
------------------------------------
CSC ACCOUNTS MANAGEMENT, INC.
By:
---------------------------------------
Title:
------------------------------------
COMPUTER SCIENCES CORPORATION
By:
---------------------------------------
Title:
------------------------------------
<PAGE>
EXHIBIT ONE
ECIS CUSTOMER LIST
American General Huntington National Bank
Ameritrust Hartmarx
Amoco Oil Company Higbees
Associates IDS Deposit Corporation
Bank One ITT
Boatmans Bank J. C. Penney Company
Cellular One May Company**
Cenex Merchantile Bank
Citgo Mobil Oil
Conoco More Card
Dayton Hudson Maison Blanche
Diamond Shamrock Neiman Marcus
Exxon Oil Company Norwest
Federated Allied Phillips Petroleum
Fidelity Investments Pier One
Fina Oil Seiferts
Fingerhut Shell Oil Company
First Bank Systems Star Bank
First City Bank Tandy
First Financial Bank of Milwaukee Texaco
First National Bank of Omaha USAA Federal Savings Bank
First Tier Bank Corp. Western Auto
G. E. Capital Zales/Gordons/Bailey, Banks &
Herbergers Biddle
**(except for Foleys where the promotion covers only consumers residing in the
Partnership Zip Code Area.)
<PAGE>
THIRD AMENDMENT
TO
AGREEMENT FOR
COMPUTERIZED CREDIT REPORTING SERVICES
AND
OPTIONS TO PURCHASE AND SELL ASSETS
THIS THIRD AMENDMENT TO AGREEMENT FOR COMPUTERIZED CREDIT REPORTING
SERVICES AND OPTIONS TO PURCHASE AND SELL ASSETS (the "Third Amendment") dated
as of the 27th day of September, 1991, is made by and among THE CREDIT BUREAU,
INCORPORATED OF GEORGIA, a Georgia corporation ("CBI" or "ECIS"), EQUIFAX INC.,
a Georgia corporation ("Equifax"), and CSC ENTERPRISES, a Delaware general
partnership (the "Partnership"), CSC ACCOUNTS MANAGEMENT, INC., a Texas
corporation ("Accounts Management") and COMPUTER SCIENCES CORPORATION, a Nevada
corporation ("CSC").
WITNESSETH:
-----------
WHEREAS, ECIS, Equifax, CSC, CSC Credit Services, Inc., a Texas corporation
("Credit Services"), (for itself and as successor in interest to CSC Credit
Services of Minnesota, Inc., a Texas corporation ("Minnesota")), Credit Bureau
of Cincinnati, Inc., an Ohio corporation ("Cincinnati"), Credit Bureau of
Greater Kansas City, Inc., a Missouri corporation ("Kansas City"), Johns Holding
Company, a Delaware corporation ("JHC"), and Accounts Management entered into an
Agreement for Computerized Credit Reporting Services and Options to Purchase and
Sell Assets, dated as of August 1, 1988 (the "Original Agreement"); and
WHEREAS, Minnesota has been merged into Credit Services effective September
30, 1988; and
WHEREAS, as of December 28, 1990, Credit Services, CSC Enterprises, Inc., a
Nevada corporation ("CEI"), CSC Ventures, Inc., a Nevada corporation, CBI
Ventures Inc., a Georgia corporation, and Equifax Ventures Inc., a Georgia
corporation, entered into that Partnership Agreement (the "Partnership
Agreement") of the Partnership; and
WHEREAS, pursuant to that certain Assignment and Assumption Agreement,
dated as of December 28, 1990, by and among Credit Services, Cincinnati, Kansas
City, JHC, as assignors, and CEI, as assignee, CEI was assigned all of
assignors' right, title and interest in and to the Original Agreement and CEI
assumed all of the assignors' obligations under the Original Agreement; and
WHEREAS, pursuant to that certain Assignment and Assumption Agreement,
dated as of December 28, 1990, by and between CEI, Credit Services, as
assignors, and the Partnership, as assignee, CEI assigned to the Partnership,
among other things, all of its right, title and
<PAGE>
interest in and to the Original Agreement, and the Partnership assumed all of
CEI's obligations under the Original Agreement; and
WHEREAS, the Original Agreement was amended as of December 28, 1990, by
that First Amendment to Agreement For Computerized Credit Reporting Services and
Options to Purchase. and Sell Assets, among ECIS, Equifax, CSC, Credit Services,
Cincinnati, Kansas City, JHC, Accounts Management, CEI and the Partnership (the
"First Amendment");
WHEREAS, the Original Agreement, as amended by the First
Amendment, was further amended as of the _____ day of __________ 1991, by that
Second Amendment to Agreement for Computerized Credit Reporting, Services and
Options to Purchase and Sell Assets, among ECIS, Equifax, the Partnership,
Accounts Management and CSC (the "Second Amendment", the Original Agreement, as
amended by the First Amendment and the Second Amendment being referred to herein
as the "Agreement");
WHEREAS, CBI has adopted the assumed name "Equifax Credit Information
Services" and desires to use the acronym "ECIS" instead of "CBI" and any
reference to "CBI" or "ECIS" refers to THE CREDIT BUREAU, INCORPORATED OF
GEORGIA, a Georgia corporation; and
WHEREAS, the parties hereto have agreed to amend the Agreement in certain
respects as set forth herein.
NOW THEREFORE, in consideration of the premises and of other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Addition of Exhibit K to the Agreement.
--------------------------------------
The following new Exhibit K titled "Use of Demographic Data" is hereby
added to the Agreement as follows:
1. Definitions. For the purposes of this Exhibit K, the following terms
-----------
will have the meanings specified:
"Affiliate" means any Person controlling, controlled by or under
common control with any other Person. For purposes of this
definition,"control" (including "controlled by" and "under common
control with") means ownership, directly or indirectly,
beneficially and of record of all of the equity of another
Person.
"Changed Address Product" means the product described in Exhibit
2 hereto, as modified or added to pursuant to paragraph 2.c
hereof.
"Demographic Data" means, with respect to any individual,
information and employment information owned by the Partnership
consisting of
-17-
<PAGE>
identification information, including name, current address,
origin and date of current address, former address, second former
address, also known as, sex, marital status, date of birth,
social security number, dependents, employer, position, firm,
location, date employed, date verified, monthly salary, former
employment, position, location, date left, employment second
former, name of spouse and similar information.
"Direct Marketing Products" means the products described in
Exhibit I hereto, as modified or added to pursuant to paragraph
2.c hereof.
"Products" means Direct Marketing Products and Changed Address
Product.
"Profit" means Gross Revenues from the Products, less (i) all
costs of sales and production, (ii) general and administrative
expenses, and (iii) payments made to Affiliate Bureaus under
their respective direct marketing revenue sharing agreements with
ECIS.
"Gross Revenues" means gross revenue from the production, sale,
license or distribution of the Products (without deducting for
commission, production, operations or other costs).
2. Use and Modification of Products.
--------------------------------
a. Subject to the terms of this Exhibit K, ECIS may use the Demographic
Data owned by the Partnership and maintained within the ACROPAC(TM)
System only in order to incorporate such Demographic Data into
Products produced, sold, licensed or distributed by ECIS.
b. ECIS represents and warrants that ECIS and its Affiliates have
previously used Demographic Data for the Products (and no other
products or services). The Partnership hereby ratifies and consents
to the previous use of the Demographic Data for the Products, subject
to compliance by ECIS with the terms of this Exhibit K. ECIS has made
payments to the Partnership for Demographic Data previously used. To
the extent that the payments were made in accordance with the terms of
this Exhibit K, such payments previously made constitute payment in
full. The Partnership has the right to retain any payments previously
made.
C. ECIS may in its sole discretion determine that it is necessary to
modify the Products. ECIS's rights to use the Demographic Data in
Products as described in paragraph 2.a above extends to Products as so
modified, as long as the modified product is similar to a Product
described in Exhibit 1 or 2. Prior to using any Demographic Data with
respect to any other product not similar to those products described
on Exhibit I or 2, ECIS shall provide to the Partnership a written
description of the proposed product, including a description of its
information parameters and market, and shall request that the
Partnership consent
-18-
<PAGE>
in writing to the use of Demographic Data with respect to such other
product, which written consent shall not be unreasonably withheld.
3. Payment to the Partnership for Direct Marketing Products.
--------------------------------------------------------
a. For the calendar year 1990, ECIS will pay the Partnership five percent
(5%) of Profit from the Direct Marketing Products. This percentage is
derived from the Partnership's right to receive 25% of the Profit from
the Direct Marketing Products times 20% (the previously established
percentage of all consumer credit files owned by the Partnership in
the ACROPAC/(TM)/ System).
b. From and after January 1, 1991, ECIS will pay the Partnership one
percent (I %) of all Gross Revenues from all Direct Marketing
Products. This percentage is derived from the Partnership's right to
receive 5% of the Gross Revenues from the Direct Marketing Products
times 20% (the previously established percentage of all consumer
credit files owned by the Partnership in the ACROPAC/(TM)/ System).
c. Payments due the Partnership will be calculated in respect of each
calendar quarter and paid to the Partnership no more than sixty (60)
days after the end of such calendar quarter.
4. Payment to the Partnership for Changed Address Product.
------------------------------------------------------
a. From and after January 1, 1990, ECIS will pay the Partnership three
percent (3%) of all Gross Revenues from the Changed Address Product.
This percentage is derived from the Partnership's right to receive 15%
of the Gross Revenues from the Changed Address Product times 20% (the
previously established percentage of all consumer credit files owned
by the Partnership in the ACROPAC(TM) System).
b. Payments due the Partnership will be calculated in respect of each
calendar quarter and paid to the Partnership no more than sixty (60)
days after the end of such calendar quarter.
5. Term of Exhibit K. This Exhibit K will be effective as of January 1, 1990
-----------------
and shall continue for an initial term of two (2) years from January 1,
1990 through December 31, 1991 (the "Initial Term"). Unless the
Partnership or ECIS shall give to the other written notice at least @ (30)
days prior to the expiration of the Initial Term of the intention of such
party to terminate this Exhibit K at the end of such Initial Term, this
Exhibit K shall be automatically renewed for an additional term of one (1)
year (a "Renewal Term") and such automatic renewal of this Exhibit K shall
continue for successive additional Renewal Terms of one (1) year each
unless such prior written notice of a desire to terminate shall be given at
least thirty (30) days prior to the expiration of the then current Renewal
Term. If this Exhibit K is terminated, ECIS's permission to use the
Demographic Data owned by the Partnership and maintained within the
ACROPAC/(TM)/ system is terminated even date therewith.
-19-
<PAGE>
6. Audit Right. The Partnership shall have the right to audit ECIS's relevant
-----------
records to verify compliance with the terms of this Exhibit K. Such audit
may be conducted after reasonable notice, during normal business hours,
using reasonable procedures to assure an accurate audit. Each party will
cooperate with the other during the conduct of any such audit, it being
expressly understood that in no event shall auditors be permitted access to
confidential data, files or information belonging to a third party or not
directly related to this Exhibit K. Auditors will not be given free access
to facilities, documents or files. Auditors will work only in designated
locations and will conduct their business quietly without significant
disruption of work being done by others. Notwithstanding anything to the
contrary herein contained, ECIS will make available to the Partnership
appropriate personnel to answer the Partnership's questions associated with
the -audit. All expenses of the audit are the responsibility of the
Partnership.
7. ECIS Affiliates. In the exercise of its rights and performance of its
---------------
duties under this Exhibit K, ECIS may act through an Affiliate,
provided, however, ECIS shall not thereby be relieved of any of its
obligations hereunder.
2. References to the Agreement.
---------------------------
All capitalized terms which are defined in the Agreement and not otherwise
defined herein shall have the same meaning herein as in the Agreement. On or
after the date hereof, each reference in the Agreement to "this Agreement",
"hereunder", "herein", or words of like import shall mean and be a reference to
the Agreement, as amended by this Third Amendment.
3. Authority.
---------
Each of the parties hereto represents to the other parties hereto that: (a)
it has the full corporate (or, in the case of the Partnership, partnership)
power and authority to execute and deliver this Third Amendment, to perform
under the Agreement, as amended by this Third Amendment, and to consummate
the transactions contemplated by the Agreement, as amended by this Third
Amendment, without the necessity of any act, approval or consent of any
other person whomsoever, except such as having been obtained; and (b) the
Agreement, as amended by this Third Amendment, has been approved by its
Board of Directors, or the Executive Committee thereof (or, in the case of
the Partnership, by the respective Boards of Directors, or the Executive
Committees thereof, of each of its partners), and constitutes the valid and
legally binding obligation of such party enforceable against such party in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
from time to time in effect which affect the enforcement of creditors'
rights generally, and except as enforcement of remedies may be limited by
general equitable principles.
4. Counterparts.
------------
This Third Amendment may be executed in several counterparts, and each
counterpart, when so executed and delivered, shall constitute an original
instrument, and all such separate counterparts shall constitute but one and the
same instrument.
-20-
<PAGE>
5. Merger.
------
This Third Amendment sets forth the entire understanding of the parties
regarding the subject matter hereof, and all prior such understandings, written
or oral, are merged herein.
6. Governing Law.
-------------
THIS THIRD AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF TEXAS.
THE CREDIT BUREAU, INCORPORATED
OF GEORGIA
By:
-----------------------------------
Title:
--------------------------------
EQUIFAX INC.
By:
-----------------------------------
Title:
--------------------------------
CSC ENTERPRISES
By: CSC ENTERPRISES, INC.
Its Managing Partner
By:
-----------------------------------
Title:
--------------------------------
CSC ACCOUNTS MANAGEMENT,
INC.
By:
-----------------------------------
Title:
--------------------------------
COMPUTER SCIENCES
CORPORATION
By:
-----------------------------------
Title:
--------------------------------
-21-
<PAGE>
EXHIBIT I
---------
DIRECT MARKETING PRODUCTS
Service Description
- ------- -----------
PowerList A list product consisting of names and addresses selected by
geographic, demographic an-d buying behavior characteristics.
This is a 30-day active file. It may not be used to determine
creditworthiness.
PowerHouse A list product consisting of names and addresses selectable by
geographic, demographic and buying behavior characteristics.
This file is different from PowerLists in that it does not
require 30-day activity and it has refined geographic
selectability (household level).
Power Data The customer's own file is enhanced by PowerList indexes,
Overlay Census Data, Demographic and externally supplied data. It may
not be used to determine creditworthiness nor applied anywhere
other than their own customer base.
Custom A list selection derived directly from the Equifax Consumer
Modeling Marketing Database (ECMD) based on a quantitative model custom
built for the direct mailer. The model is designed to select
consumers who are likely to have an interest in the customer's
products and respond via the mail. It may not be used to
determine creditworthiness.
-22-
<PAGE>
EXHIBIT 2
---------
CHANGED ADDRESS PRODUCT
Service Description
- ------- -----------
CB Movers Using the National Change of Address List (NCOA) to match against
the off-line screening database to determine if the NCOA is a new
address.
-23-
<PAGE>
RESOLUTION AGREEMENT
--------------------
THIS RESOLUTION AGREEMENT, ("Resolution Agreement"), made and entered into
as of the 27th day of September, 1991, by and among THE CREDIT BUREAU,
INCORPORATED OF GEORGIA, a Georgia corporation ("CBI" or "ECIS"), EQUIFAX INC.,
a Georgia corporation ("Equifax") (CBI and Equifax are sometimes together
referred to herein as the "Equifax Parties"), COMPUTER SCIENCES CORPORATION, a
Nevada corporation ("CSC"), CSC CREDIT SERVICES, INC., a Texas corporation
("Credit Services") (for itself and as successor in interest to CSC CREDIT
SERVICES OF MINNESOTA, INC., a Texas corporation ("Minnesota")), CREDIT BUREAU
OF CINCINNATI, INC., an Ohio corporation ("Cincinnati"), CREDIT BUREAU OF
GREATER KANSAS CITY, INC., a Missouri corporation ("Kansas City"), JOHNS HOLDING
COMPANY, a Delaware corporation ("JHC"), CSC ACCOUNTS MANAGEMENT, INC., a Texas
corporation ("Accounts Management"), CSC ENTERPRISES, INC., a Nevada corporation
("CEI"), and CSC ENTERPRISES, a Delaware general partnership (the "Partnership")
(CSC, Credit Services, Cincinnati, Kansas City, JHC, Accounts Management, CEI
and the Partnership are sometimes collectively referred to herein as the "CSC
Parties").
RECITALS:
---------
WHEREAS, ECIS, Equifax, CSC, Credit Services, Minnesota, Cincinnati, Kansas
City, JHC and Accounts Management entered into an Agreement for Computerized
Credit Reporting Services and Options to Purchase and Sell Assets, dated as of
August 1, 1988 (the "Original Agreement"); and
WHEREAS, Minnesota has been merged into Credit Services effective September
30, 1988; and
WHEREAS, as of December 28. 1990, Credit Services, CEI, CSC Ventures, Inc.,
a Nevada corporation, CBI Ventures Inc., a Georgia corporation, and Equifax
Ventures Inc., a Georgia corporation, entered into a Partnership Agreement (the
"Partnership Agreement") of the Partnership; and
WHEREAS, pursuant to that certain Assignment and Assumption Agreement,
dated as of December 28, 1990, among Credit Services, Cincinnati, Kansas City,
JHC, as assignors, and CEI, as assignee, CEI was assigned all of assignors'
right, title and interest in and to the Original Agreement and CEI assumed all
of the assignors' obligations under the Original Agreement; and
WHEREAS, pursuant to that certain Assignment and Assumption Agreement
entered into as of December 28, 1990, by and between CEI and Credit Services, as
assignors, and the Partnership, as assignee, CEI assigned to the Partnership,
among other things, all of its right,
-24-
<PAGE>
title and interest in and to the Original Agreement, and the Partnership assumed
all of CEI's obligations under the Original Agreement, and
WHEREAS, the Original Agreement was amended as of December 28, 1990, by
that First Amendment to Agreement for Computerized Credit Reporting Services and
Options to Purchase and Sell Assets among ECIS, Equifax, CSC, Credit Services,
Cincinnati, Kansas City, JHC, Accounts Management, CEI, and the Partnership (the
"First Amendment," and the Original Agreement, as amended by the First
Amendment, being herein referred to as the "Agreement"); and
WHEREAS, CBI has adopted the assumed name "Equifax Credit Information
Services" and desires to use the acronym "ECIS" instead of "CBI" and any
reference to "CBI" or "ECIS" refers to THE CREDIT BUREAU, INCORPORATED OF
GEORGIA, a Georgia corporation; and
WHEREAS, the CSC Parties have claimed that CBI and Credit Marketing
Services, Inc. ("CMS") are obligated to waive or forego the 25% commission on
promotion sales for regional and national sales of promotions made by CBI or
CMS, which CBI has denied; and
WHEREAS, the parties desire to resolve the aforesaid contested claim and
for that purpose are entering into this Resolution Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein provided, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Second and Third Amendments to the Agreement.
--------------------------------------------
CBI, Equifax, the Partnership, Accounts Management and CSC are executing
and delivering contemporaneously with the execution of this Resolution
Agreement, those Second and Third Amendments to the Agreement for Computerized
Credit Reporting Services and Options to Purchase and Sell Assets in the forms
annexed as Schedules I and 2 to this Resolution Agreement (the "Second
Amendment" and the "Third Amendment," respectively).
2. Purchase and Sale of Software,
-----------------------------
Contemporaneously with the execution and delivery of this Resolution
Agreement, the Second Amendment and the Third Amendment, the Partnership and CBI
are executing and delivering an Agreement For the Purchase and Sale of Software
in the form annexed hereto as Schedule 3 (the "Software Purchase Agreement").
3. Payments by CBI.
---------------
On the date hereof, CBI shall pay to the Partnership $150,000, and from and
after the date hereof, CBI shall pay to the Partnership $25,000 on the first
business day of each month commencing in October 1991, and continuing regularly
thereafter through and including March 1994 (for an aggregate payment of
$900,000). Payments are to be made in lawful money of the
-25-
<PAGE>
United States of America in immediately available funds at the office of the
Partnership, 652 North Belt East, Suite 400, Houston, Texas 77060, Attention:
Controller, or such other place as the Partnership shall designate in Writing to
CBI. Furthermore, from and after the date hereof, (a) payments required to be
made to the Partnership under the phrase "25% of total net revenue" referred to
in the last sentence of indented paragraph 2. set forth in the first paragraph
on page 10 of Exhibit A of the Agreement shall be deemed to be payments under
this Resolution Agreement, and (b) payments required to be made to the
Partnership under the Third Amendment and the shared commissions under the
Second Amendment Section 1 (a)(4)(ii) shall be deemed to be payments under this
Resolution Agreement until such time as an aggregate amount of $376,316.00 shall
have been so received by the Partnership. After such time, amounts referred to
in clauses (a) and (b) of the preceding sentence shall continue to be paid to
the Partnership as provided by the Agreement, the Second Amendment and the Third
Amendment.
4. No Further Claims.
-----------------
The CSC Parties agree that the payments already made to them (and payments
to be made pursuant to the Agreement) by CBI and CMS for promotions sold CBI and
execution and performance of this Resolution Agreement, the Second Amendment,
the Third Amendment and the Software Purchase Agreement fully satisfy all claims
of the CSC Parties that CBI or CMS is obligated to waive or forego the 25%
commissions on promotion sales made by CBI or CMS as provided in Exhibit A of
the Agreement; and the CSC Parties and the Equifax Parties agree that they have
no knowledge of any other disputed claims they may have- regarding payment for
promotions already sold. Hereafter, payments for promotions will be governed by
this Resolution Agreement and the terms of the Agreement, and as amended by the
Second Amendment and the Third Amendment.
-26-
<PAGE>
5. Entire Agreement.
----------------
This Resolution Agreement expresses the entire understanding and agreement
of the parties hereto regarding the subject matters hereof, and all prior
understandings and agreements, written or oral, among the parties regarding such
subject matters are merged herein.
6. Schedules.
---------
The Schedules referenced herein and annexed hereto are incorporated herein.
7. Counterparts.
------------
This Resolution Agreement may be executed in several counterparts, and each
counterpart, when so executed and delivered, shall constitute an original
instrument, and all such counterparts, together, shall evidence and constitute
one and the same instrument.
8. Governing Law.
-------------
THIS RESOLUTION AGREEMENT SHALL BE CONSTRUED UNDER AND GOVERNED BY THE LAWS
OF THE STATE OF TEXAS.
IN WITNESS WHEREOF, the parties have caused this Resolution Agreement to be
executed as of the date first above written.
THE CREDIT BUREAU, INCORPORATED
OF GEORGIA
By:
--------------------------------------
Title:
-----------------------------------
EQUIFAX INC.
By:
--------------------------------------
Title:
-----------------------------------
COMPUTER SCIENCES CORPORATION
By:
--------------------------------------
Title:
-----------------------------------
CSC CREDIT SERVICES, INC.
-4-
<PAGE>
By:
--------------------------------------
Title:
-----------------------------------
CREDIT BUREAU OF CINCINNATI, INC.
By:
--------------------------------------
Title:
-----------------------------------
CREDIT BUREAU OF GREATER KANSAS
CITY, INC.
By:
--------------------------------------
Title:
-----------------------------------
JOHNS HOLDING COMPANY
By:
--------------------------------------
Title:
-----------------------------------
CSC ACCOUNTS MANAGEMENT, INC.
By:
--------------------------------------
Title:
-----------------------------------
CSC ENTERPRISES, INC.
By:
--------------------------------------
Title:
-----------------------------------
CSC ENTERPRISES
Its Managing Partner
By:
--------------------------------------
Title:
-----------------------------------
-5-
<PAGE>
SCHEDULE 1
SECOND AMENDMENT
TO
AGREEMENT
FOR
COMPUTERIZED CREDIT REPORTING SERVICES
AND
OPTIONS TO PURCHASE AND SELL ASSETS
THIS SECOND AMENDMENT TO AGREEMENT FOR COMPUTERIZED CREDIT REPORTING
SERVICES AND OPTIONS TO PURCHASE AND SELL ASSETS (the "Second Amendment") dated
as of the _____ day of ____________, 1991, is made by and among THE CREDIT
BUREAU, INCORPORATED OF GEORGIA, a Georgia corporation ("ECIS" or "CBI"),
EQUIFAX INC., a Georgia corporation ("Equifax"), and CSC ENTERPRISES, a Delaware
general partnership (the "Partnership"), CSC ACCOUNTS MANAGEMENT, INC., a Texas
corporation ("Accounts Management") and COMPUTER SCIENCES CORPORATION, a Nevada
corporation ("CSC").
WITNESSETH:
-----------
WHEREAS, ECIS, Equifax, CSC, CSC Credit Services, Inc., a Texas corporation
("Credit Services"), (for itself and as successor in interest to CSC Credit
Services of Minnesota, Inc., a Texas corporation ("Minnesota")), Credit Bureau
of Cincinnati, Inc., an Ohio corporation ("Cincinnati"), Credit Bureau of
Greater Kansas City, Inc., a Missouri corporation ("Kansas City"), Johns Holding
Company, a Delaware corporation ("JHC"), and Accounts Management entered into an
Agreement for Computerized Credit Reporting Services and Options to Purchase and
Sell Assets, dated as of August 1, 1988 (the "Original Agreement"); and
WHEREAS, Minnesota has been merged into Credit Services effective September
30, 1988; and
WHEREAS, as of December 28, 1990, Credit Services, CSC Enterprises, Inc., a
Nevada corporation ("CEI"), CSC Ventures, Inc., a Nevada corporation, CBI
Ventures Inc., a Georgia corporation, and Equifax Ventures Inc., a Georgia
corporation, entered into that Partnership Agreement (the "Partnership
Agreement") of the Partnership; and
WHEREAS, pursuant to that certain Assignment and Assumption Agreement,
dated as of December 28, 1990, by and among Credit Services, Cincinnati, Kansas
City, JHC, as assignors, and CEI, as assignee, CEI was assigned all of
assignors' right, title and interest in and to the Original Agreement and CEI
assumed all of the assignors' obligations under the Original Agreement; and
WHEREAS, pursuant to that certain Assignment and Assumption Agreement,
dated as of December 28, 1990, by and between CEI, Credit Services, as
assignors, and the Partnership, as assignee, CEI assigned to the Partnership,
among other things, all of its right, title and interest
<PAGE>
in and to the Original Agreement, and the Partnership assumed all of CEI's
obligations under the Original Agreement; and
WHEREAS, the Original Agreement was amended as of December 28, 1990, by
that First Amendment to Agreement For Computerized Credit Reporting Services and
Options to Purchase and Sell Assets, among ECIS, Equifax, CSC, Credit Services,
Cincinnati, Kansas City, JHC, Accounts Management, CEI and the Partnership (the
"First Amendment," the Original Agreement, as amended by the First Amendment
being referred to herein as the "Agreement");
WHEREAS, CBI has adopted the assumed name "Equifax Credit Information
Services" and desires to use the acronym "ECIS" instead of "CBI" and any
reference to "CBI" or "ECIS" refers to THE CREDIT BUREAU, INCORPORATED OF
GEORGIA, a Georgia corporation; and
WHEREAS, the parties hereto have agreed to amend the Agreement in certain
respects as set forth herein.
NOW THEREFORE, in consideration of the premises and of other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Amendment
Exhibit A to the Agreement titled "The Automated Credit Reporting
Online Package (ACROPAC(TM)) System Description," is amended as follows:
a. At page 9 of Exhibit A the following language is deleted:
"CREDIT MARKETING SERVICE (CMS)
- CMS will represent the bureau at the national and regional level
on promotion programs sales.
- CMS will also assist the bureau on any promotion program sold by
the bureau."
and inserted in lieu thereof is the following language:
-2-
<PAGE>
"PROMOTION MARKETING
1. ECIS Customer List. All promotion sales to any credit grantor (a
------------------
"Listed Customer") listed on Exhibit I annexed to this Exhibit A, as
amended from time to time pursuant to the provisions hereof (the
"ECIS Customer List") will be conducted solely by ECIS. A subsidiary
or division of a Listed Customer shall be deemed to be a Listed
Customer unless specifically excepted.
2. Promotion Sales by the Partnership. Notwithstanding any provision in
----------------------------------
the Agreement to the contrary and subject to the restrictions provided
in subparagraphs (i) and (ii) below, the Partnership shall have the
non-exclusive right to sell promotions to a credit grantor (a
"Potential Partnership Customer") who at the time of such sale is not
listed on the ECIS Customer List and whose decision-making office is
within the following area: Arkansas; Illinois (except for Cook,
DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will
Counties); Indiana; Iowa; Kansas; Kentucky; Bienville, Bessier, Caddo,
Claiborne, Desoto, Jackson, Lincoln, Natchitoches, Red River, Sabine,
Webster, Morehouse, Oauchita, Richland, Union and West Carroll
Parishes, Louisiana; Minnesota; Missouri; Nebraska; North Dakota;
Ohio; Oklahoma; South Dakota; Texas; and Wisconsin (the "Partnership
Area"), where the promotion covers consumers residing in and/or
outside of the Partnership Area, provided that:
(i) the Partnership shall have given notice to ECIS of the Partnership's
intention to make a Presentation to a Potential Partnership Customer,
describing the Presentation in reasonable detail, including the nature
of the Presentation, the name and address of the Potential Partnership
Customer, and the persons proposed to be contacted at the Potential
Partnership Customer. Notwithstanding any provision of the Agreement
- to the contrary, for purposes of this subparagraph (i), notice shall
be deemed sufficient if: A) Sent by telecopy to ECIS at the following
facsimile number, or any such other facsimile number as ECIS may, by
giving written notice under the Agreement, designate and B) the
Partnership places a voice telephone call to the following number to
alert ECIS that a facsimile has been sent or is forthcoming.
-3-
<PAGE>
The Credit Bureau, Incorporated of Georgia
Attention: Mary Deal
Facsimile Number: 404-888-3402
Telephone Number: 404-885-8063
;and
(ii) ECIS does not within 24 hours after receipt of the notice provided for
in subparagraph (i) above (except that Saturdays, Sundays, New Year's
Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, the
Friday following Thanksgiving Day, Christmas Eve and Christmas Day
shall be excluded in such time measurement) give written notice to the
Partnership, Attention: Executive Vice-President CRD, Facsimile
Number: 713-878-1905 (or any such other facsimile number as the
Partnership may, by giving written notice under the Agreement,
designate), that, prior to ECIS's receipt of such notice, ECIS had
begun a Sales Effort directed toward that Potential Partnership
Customer in respect of a sale of a promotion which comprises or
includes in substantial part the promotion contemplated by the
Partnership, describing the Sales Effort in reasonable detail,
including the nature of such Sales Effort, the persons contacted at
the Potential Partnership Customer, and the place and date of such
Sales Effort. In the event ECIS gives such notice, the Partnership
will not make such Presentation to this customer.
The Partnership will notify ECIS of the result of the Presentation.
Should a sale by the Partnership not result, the next subsequent
effort to market a promotion to that Potential Partnership Customer
shall be subject to the procedure described in these subparagraphs (i)
and (ii). If a sale does result, subsequent Presentations to that
Potential Partnership Customer do not require the Partnership to
follow the procedure described in these subparagraphs (i) and (ii).
Notwithstanding any provision in the Agreement to the contrary, the
Partnership shall have the right to market and to sell promotions to a
credit grantor who at the time of such sale is not listed on the ECIS
Customer List and whose decision-making office is within a zip code
area covered by a file of a bureau owned by the Partnership
("Partnership Zip Code Area"), where the promotion covers only
consumers residing in the Partnership Area,and in connection with such
sale, the Partnership shall not be required to follow
-4-
<PAGE>
the procedures referred to in subparagraphs (i) and (ii) above. If the
decision making office is not within the Partnership Area, the
Partnership agrees to obtain permission from the bureau file owner
before marketing or selling a promotion.
3. ACROPAC(TM) Marketing by ECIS and the Partnership. ECIS and the
----------------------------------------------
Partnership agree that each will aggressively market all files in
ACROPAC(TM) irrespective of ownership, consistent with the provisions
hereof. The seller of a promotion shall set the price, terms and
conditions of the sale. Since the parties agree that the ECIS data
processing costs chargeable to a promotion sold by the Partnership
shall not exceed 10% of the gross revenue of that promotion, the
Partnership agrees not to sell promotions processed by ECIS for less
than $2,000. The parties agree that the Partnership may use a third-
party processor to process its data to create promotions or it may
process the data itself. Upon the Partnership's request, ECIS will
furnish the Partnership a copy of the data which it has the right to
use in ECIS Master Record format for $15,000-00 per copy ("File Copy
Rate"). The parties agree that when ECIS does not process the
promotions sold by the Partnership, ECIS is not entitled to the data
processing costs or the 6% of net revenue administrative fee described
in Exhibit A.
Consistent with the terms and conditions contained in the Agreement
and this Second Amendment, the Partnership shall have the right to
access all files in ACROPAC(TM) in connection with its promotion sales
processed by ECIS. Upon request of the Partnership, ECIS will assist
the Partnership on all promotion sales without charge to the
Partnership unless the Partnership requests that an ECIS sales
representative contact the customer directly, either by telephone or
in person. In the event that the Partnership requests that an ECIS
sales representative contact a customer directly, either by telephone
or in person, ECIS will receive 50% of the 25% commission on that
promotion sale.
4. Joint Annual Meeting of ECIS and the Partnership. In order to assure
------------------------------------------------
the aggressive marketing of all of the files in the ACROPAC(TM) System
and to provide a once-a-year forum to voice concerns regarding such,
the parties agree to hold an joint annual meeting. The meeting will
be held on the anniversary, or as close as reasonably possible
thereto, to the signing of the Second Amendment ("Anniversary").
-5-
<PAGE>
(i) The agenda of the meeting is to discuss aggressive marketing of the
ACROPAC(TM) system and to discuss additions and deletions to the ECIS
Customer List. Each party agrees that the joint meeting is the proper
and only forum for discussion of additions and deletions.
Each party will bring all of the necessary information to the meeting
in order to adequately discuss the issues included in the meeting
agenda. Each party may bring any personnel it believes are reasonably
necessary. While the attendance of the President of ECIS and the
attendance of the President of the Credit Reporting Division of the
Partnership is not required, it is required that both presidents be
available to consult with the participants of the joint meeting during
the meeting. ff presidential participation is requested on a topic and
the president whose participation is requested is unavailable, the
topic will be tabled for further discussion when such president is
available.
(ii) The parties will discuss the addition to the ECIS Customer List of any
customer to which the Partnership has sold two (2) or more promotions
each involving more than 500,000 names since, in the case of the first
joint review meeting, the signing of the Second Amendment, or in the
case of subsequent joint review meetings, since the last joint review
meeting. The parties will discuss all relevant factors relating to
the customer contemplated to be added to the ECIS Customer List. Upon
consideration of the factors, ECIS will decide at the joint review
meeting whether or not to add the customer to the ECIS Customer List.
If ECIS adds the customer to the ECIS Customer List, the Partnership
will receive 50% of the 25% commission for all subsequent promotion
sales to that customer for the next 24 months.
(iii) The parties will discuss deleting customers from the ECIS Customer
List who have not purchased any promotions from ECIS since, in the
case of the first joint review meeting, the signing of the Second
Amendment, or in the case of subsequent joint review meetings, since
the last joint review meeting. In discussing the deletion of the
customer from the ECIS Customer List, the parties will consider:
1. Has the customer purchased any promotions from other vendors
within the time frame considered?
-6-
<PAGE>
2. Has ECIS made a Presentation within the time frame
considered?
3. Has ECIS made a Sales Effort within the time frame
considered?
4. Any other relevant considerations/circumstances.
(iv) After considering all the factors raised in the discussion, the
parties must jointly agree to remove the customer from the ECIS
Customer List. If the parties cannot jointly agree before the end of
the annual meeting that the customer should be deleted, the customer
will not be deleted from the ECIS Customer List.
(v) ECIS will provide a copy of the ECIS Customer List for the year as
soon as possible after the joint annual meeting.
5. Audit. ECIS agrees to have its independent public accounting firm
-----
annually perform, at no cost to the Partnership, a third party review,
as defined in accordance with SAS #44, of the ECIS data processing
system as it relates to promotions.
6. ECIS Affiliates. In the exercise of its rights and performance of its
---------------
duties under this Exhibit A, ECIS may act through an Affiliate,
provided, however, ECIS shall not thereby be relieved of any of its
obligations hereunder.
7. Definitions. For purposes of this Exhibit A:
-----------
"Affiliate" means any Person controlling, controlled by or under
common control with any other Person. For purposes of this
definition, "control" (including"controlled by" and "under common
control with") means ownership, directly or indirectly,
beneficially and of record of all of the equity of another
Person.
"Presentation" means verbal or written communications with a
Potential Partnership Customer regarding a specific promotion and
containing a pricing proposal. Verbal and written
-7-
<PAGE>
communications, absent such pricing proposal, shall not be a
Presentation but will be a Sales Effort.
"Promotion" means a list of consumer names and corresponding
addresses compiled from credit files by identifying such names on
the basis of credit information that match certain credit
criteria supplied and/or approved by the promotion customer. The
definition of "promotion" shall include products which review a
customer's account portfolio to screen or monitor for positive or
negative changes to the portfolio or individual accounts therein.
"Sales Effort" means verbal or written communications with a
Potential Partnership Customer regarding a specific promotion."
b. Wherever the term "CMS" appears in Exhibit A, such term is deleted and the
phrase "ECIS or any Affiliate of ECIS designated by ECIS" is inserted in lieu
thereof.
c. On page 1 of the Agreement, the term CBI is defined as referring to THE
CREDIT BUREAU, INCORPORATED OF GEORGIA, a Georgia corporation.
Subsequently that corporation has adopted the assumed name "Equifax Credit
Information Services" and desires to use the acronym "ECIS" instead of "CBI."
Therefore, the Agreement shall be amended such that the acronyms "ECIS" and
"CBI" are interchangeable and either may be used to refer to THE CREDIT BUREAU,
INCORPORATED OF GEORGIA.
2. References to the Agreement.
---------------------------
All capitalized terms which are defined in the Agreement and not otherwise
defined herein shall have the same meaning herein as in the Agreement. On or
after the date hereof, each reference in the Agreement to "this Agreement",
"hereunder", "herein", or words of like import shall mean and be a reference to
the Agreement, as amended by this Second Amendment.
3. Authority.
---------
Each of the parties hereto represents to the other parties hereto that:
-8-
<PAGE>
(a) it has the full corporate (or, in the case of the Partnership, partnership)
power and authority to execute and deliver this Second Amendment, to perform
under the Agreement, as amended by this Second Amendment, and to consummate the
transactions contemplated by the Agreement, as amended by this Second Amendment,
without the necessity of any act, approval or consent of any other person
whomsoever, except such as having been obtained; and (b) the Agreement, as
amended by this Second Amendment, has been approved by its Board of Directors,
or the Executive Committee thereof (or, in the case of the Partnership, by the
respective Boards of Directors, or the Executive Committees thereof, of each of
its partners), and constitutes the valid and legally binding obligation of such
party enforceable against such party in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws from time to time in effect which affect the
enforcement of creditors' rights generally, and except as enforcement of
remedies may be limited by general equitable principles.
4. Counterparts.
------------
This Second Amendment may be executed in several counterparts, and each
counterpart, when so executed and delivered, shall constitute an original
instrument, and all such separate counterparts shall constitute but one and the
same instrument.
5. Merger.
------
This Second Amendment sets forth the entire understanding of the parties
regarding the subject matter hereof, and all prior such understandings, written
or oral, are merged herein.
6. Governing Law.
-------------
THIS SECOND AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF TEXAS.
Executed as of the date first above written:
THE CREDIT BUREAU, INCORPORATED OF GEORGIA
By:
---------------------------------------
<PAGE>
Title:
------------------------------------
EQUIFAX INC.
By:
---------------------------------------
Title:
------------------------------------
CSC ENTERPRISES
By: CSC ENTERPRISES, INC.
Its Managing Partner
By:
---------------------------------------
Title:
------------------------------------
CSC ACCOUNTS MANAGEMENT, INC.
By:
---------------------------------------
Title:
------------------------------------
COMPUTER SCIENCES CORPORATION
By:
---------------------------------------
Title:
------------------------------------
-10-
<PAGE>
EXHIBIT ONE
ECIS CUSTOMER LIST
<TABLE>
<CAPTION>
<S> <C>
American General Huntington National Bank
Ameritrust Hartmarx
Amoco Oil Company Higbees
Associates IDS Deposit Corporation
Bank One ITT
Boatmans Bank J. C. Penney Company
Cellular One May Company**
Cenex Merchantile Bank
Citgo Mobil Oil
Conoco More Card
Dayton Hudson Maison Blanche
Diamond Shamrock Neiman Marcus
Exxon Oil Company Norwest
Federated Allied Phillips Petroleum
Fidelity Investments Pier One
Fina Oil Seiferts
Fingerhut Shell Oil Company
First Bank Systems Star Bank
First City Bank Tandy
First Financial Bank of Milwaukee Texaco
First National Bank of Omaha USAA Federal Savings Bank
First Tier Bank Corp. Western Auto
G. E. Capital Zales/Gordons/Bailey, Banks &
Herbergers Biddle
</TABLE>
**(except for Foleys where the promotion covers only consumers residing in the
Partnership Zip Code Area.)
<PAGE>
SCHEDULE 2
- ----------
THIRD AMENDMENT
TO
AGREEMENT FOR
COMPUTERIZED CREDIT REPORTING SERVICES
AND
OPTIONS TO PURCHASE AND SELL ASSETS
THIS THIRD AMENDMENT TO AGREEMENT FOR COMPUTERIZED CREDIT REPORTING
SERVICES AND OPTIONS TO PURCHASE AND SELL ASSETS (the "Third Amendment") dated
as of the 27th day of September, 1991, is made by and among THE CREDIT BUREAU,
INCORPORATED OF GEORGIA, a Georgia corporation ("CBI" or "ECIS"), EQUIFAX INC.,
a Georgia corporation ("Equifax"), and CSC ENTERPRISES, a Delaware general
partnership (the "Partnership"), CSC ACCOUNTS MANAGEMENT, INC., a Texas
corporation ("Accounts Management") and COMPUTER SCIENCES CORPORATION, a Nevada
corporation ("CSC").
WITNESSETH:
-----------
WHEREAS, ECIS, Equifax, CSC, CSC Credit Services, Inc., a Texas corporation
("Credit Services"), (for itself and as successor in interest to CSC Credit
Services of Minnesota, Inc., a Texas corporation ("Minnesota")), Credit Bureau
of Cincinnati, Inc., an Ohio corporation ("Cincinnati"), Credit Bureau of
Greater Kansas City, Inc., a Missouri corporation ("Kansas City"), Johns Holding
Company, a Delaware corporation ("JHC"), and Accounts Management entered into an
Agreement for Computerized Credit Reporting Services and Options to Purchase and
Sell Assets, dated as of August 1, 1988 (the "Original Agreement"); and
WHEREAS, Minnesota has been merged into Credit Services effective
September 30, 1988; and
WHEREAS, as of December 28, 1990, Credit Services, CSC Enterprises, Inc., a
Nevada corporation ("CEI"), CSC Ventures, Inc., a Nevada corporation, CBI
Ventures Inc., a Georgia corporation, and Equifax Ventures Inc., a Georgia
corporation, entered into that Partnership Agreement (the
<PAGE>
- 2 -
"Partnership Agreement") of the Partnership; and
WHEREAS, pursuant to that certain Assignment and Assumption Agreement,
dated as of December 28, 1990, by and among Credit Services, Cincinnati, Kansas
City, JHC, as assignors, and CEI, as assignee, CEI was assigned all of
assignors' right, title and interest in and to the Original Agreement and CEI
assumed all of the assignors' obligations under the Original Agreement; and
WHEREAS, pursuant to that certain Assignment and Assumption Agreement,
dated as of December 28, 1990, by and between CEI, Credit Services, as
assignors, and the Partnership, as assignee, CEI assigned to the Partnership,
among other things, all of its right, title and interest in and to the Original
Agreement, and the Partnership assumed all of CEI's obligations under the
Original Agreement; and
WHEREAS, the Original Agreement was amended as of December 28, 1990, by
that First Amendment to Agreement For Computerized Credit Reporting Services and
Options to Purchase. and Sell Assets, among ECIS, Equifax, CSC, Credit Services,
Cincinnati, Kansas City, JHC, Accounts Management, CEI and the Partnership (the
"First Amendment");
WHEREAS, the Original Agreement, as amended by the First Amendment, was
further amended as of the _____ day of __________ 1991, by that Second Amendment
to Agreement for Computerized Credit Reporting, Services and Options to Purchase
and Sell Assets, among ECIS, Equifax, the Partnership, Accounts Management and
CSC (the "Second Amendment", the Original Agreement, as amended by the First
Amendment and the Second Amendment being referred to herein as the "Agreement");
WHEREAS, CBI has adopted the assumed name "Equifax Credit Information
Services" and desires to use the acronym "ECIS" instead of "CBI" and any
reference to "CBI" or "ECIS" refers to THE CREDIT BUREAU, INCORPORATED OF
GEORGIA, a Georgia corporation; and
WHEREAS, the parties hereto have agreed to amend the Agreement in certain
respects as set forth herein.
<PAGE>
- 3 -
NOW THEREFORE, in consideration of the premises and of other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Addition of Exhibit K to the Agreement.
--------------------------------------
The following new Exhibit K titled "Use of Demographic Data" is hereby
added to the Agreement as follows:
1. Definitions. For the purposes of this Exhibit K, the following terms
-----------
will have the meanings specified:
"Affiliate" means any Person controlling, controlled by or under
common control with any other Person. For purposes of this
definition,"control" (including "controlled by" and "under common
control with") means ownership, directly or indirectly,
beneficially and of record of all of the equity of another
Person.
"Changed Address Product" means the product described in
Exhibit 2 hereto, as modified or added to pursuant to paragraph
2.c hereof.
"Demographic Data" means, with respect to any individual,
information and employment information owned by the Partnership
consisting of identification information, including name, current
address, origin and date of current address, former address,
second former address, also known as, sex, marital status, date
of birth, social security number, dependents, employer, position,
firm, location, date employed, date verified, monthly salary,
former employment, position, location, date left, employment
second former, name of spouse and similar information.
<PAGE>
- 4 -
"Direct Marketing Products" means the products described in
Exhibit I hereto, as modified or added to pursuant to paragraph
2.c hereof.
"Products" means Direct Marketing Products and Changed Address
Product.
"Profit" means Gross Revenues from the Products, less (i) all
costs of sales and production, (ii) general and administrative
expenses, and (iii) payments made to Affiliate Bureaus under
their respective direct marketing revenue sharing agreements
with ECIS.
"Gross Revenues" means gross revenue from the production, sale,
license or distribution of the Products (without deducting for
commission, production, operations or other costs).
2. Use and Modification of Products.
--------------------------------
a. Subject to the terms of this Exhibit K, ECIS may use the
Demographic Data owned by the Partnership and maintained within
the ACROPAC(TM) System only in order to incorporate such
Demographic Data into Products produced, sold, licensed or
distributed by ECIS.
b. ECIS represents and warrants that ECIS and its Affiliates have
previously used Demographic Data for the Products (and no other
products or services). The Partnership hereby ratifies and
consents to the previous use of the Demographic Data for the
Products, subject to compliance by ECIS with the terms of this
Exhibit K. ECIS has made payments to the Partnership for
Demographic Data previously used. To the extent that the payments
were made in accordance with the terms of this Exhibit K, such
payments previously made constitute payment in full. The
Partnership has the right to retain any payments previously made.
<PAGE>
- 5 -
c. ECIS may in its sole discretion determine that it is necessary to
modify the Products. ECIS's rights to use the Demographic Data in
Products as described in paragraph 2.a above extends to Products
as so modified, as long as the modified product is similar to a
Product described in Exhibit 1 or 2. Prior to using any
Demographic Data with respect to any other product not similar to
those products described on Exhibit I or 2, ECIS shall provide to
the Partnership a written description of the proposed product,
including a description of its information parameters and market,
and shall request that the Partnership consent in writing to the
use of Demographic Data with respect to such other product, which
written consent shall not be unreasonably withheld.
3. Payment to the Partnership for Direct Marketing Products.
--------------------------------------------------------
a. For the calendar year 1990, ECIS will pay the Partnership five
percent (5%) of Profit from the Direct Marketing Products. This
percentage is derived from the Partnership's right to receive 25%
of the Profit from the Direct Marketing Products times 20% (the
previously established percentage of all consumer credit files
owned by the Partnership in the ACROPAC(TM) System).
b. From and after January 1, 1991, ECIS will pay the Partnership one
percent (1 %) of all Gross Revenues from all Direct Marketing
Products. This percentage is derived from the Partnership's right
to receive 5% of the Gross Revenues from the Direct Marketing
Products times 20% (the previously established percentage of all
consumer credit files owned by the Partnership in the ACROPAC(TM)
System).
c. Payments due the Partnership will be calculated in respect of
each calendar quarter and paid to the Partnership no more than
sixty (60) days after the end of such calendar quarter.
4. Payment to the Partnership for Changed Address Product.
------------------------------------------------------
<PAGE>
- 6 -
a. From and after January 1, 1990, ECIS will pay the Partnership
three percent (3%) of all Gross Revenues from the Changed Address
Product. This percentage is derived from the Partnership's right
to receive 15% of the Gross Revenues from the Changed Address
Product times 20% (the previously established percentage of all
consumer credit files owned by the Partnership in the ACROPAC(TM)
System).
b. Payments due the Partnership will be calculated in respect of
each calendar quarter and paid to the Partnership no more than
sixty (60) days after the end of such calendar quarter.
5. Term of Exhibit K. This Exhibit K will be effective as of January 1,
-----------------
1990 and shall continue for an initial term of two (2) years from
January 1, 1990 through December 31, 1991 (the "Initial Term"). Unless
the Partnership or ECIS shall give to the other written notice at
least @ (30) days prior to the expiration of the Initial Term of the
intention of such party to terminate this Exhibit K at the end of such
Initial Term, this Exhibit K shall be automatically renewed for an
additional term of one (1) year (a "Renewal Term") and such automatic
renewal of this Exhibit K shall continue for successive additional
Renewal Terms of one (1) year each unless such prior written notice of
a desire to terminate shall be given at least thirty (30) days prior
to the expiration of the then current Renewal Term. If this Exhibit K
is terminated, ECIS's permission to use the Demographic Data owned by
the Partnership and maintained within the ACROPAC(TM) system is
terminated even date therewith.
6. Audit Right. The Partnership shall have the right to audit ECIS's
-----------
relevant records to verify compliance with the terms of this Exhibit
K. Such audit may be conducted after reasonable notice, during normal
business hours, using reasonable procedures to assure an accurate
audit. Each party will cooperate with the other during the conduct of
any such audit, it being expressly understood that in no event shall
auditors be permitted access to confidential data, files or
information belonging to a third party or not directly
<PAGE>
- 7 -
related to this Exhibit K. Auditors will not be given free access to
facilities, documents or files. Auditors will work only in designated
locations and will conduct their business quietly without significant
disruption of work being done by others. Notwithstanding anything to
the contrary herein contained, ECIS will make available to the
Partnership appropriate personnel to answer the Partnership's
questions associated with the audit. All expenses of the audit are
the responsibility of the Partnership.
7. ECIS Affiliates. In the exercise of its rights and performance of its
---------------
duties under this Exhibit K, ECIS may act through an Affiliate,
provided, however, ECIS shall not thereby be relieved of any of its
obligations hereunder.
2. References to the Agreement.
---------------------------
All capitalized terms which are defined in the Agreement and not otherwise
defined herein shall have the same meaning herein as in the Agreement. On or
after the date hereof, each reference in the Agreement to "this Agreement",
"hereunder", "herein", or words of like import shall mean and be a reference to
the Agreement, as amended by this Third Amendment.
3. Authority.
---------
Each of the parties hereto represents to the other parties hereto that: (a)
it has the full corporate (or, in the case of the Partnership, partnership)
power and authority to execute and deliver this Third Amendment, to perform
under the Agreement, as amended by this Third Amendment, and to consummate the
transactions contemplated by the Agreement, as amended by this Third Amendment,
without the necessity of any act, approval or consent of any other person
whomsoever, except such as having been obtained; and (b) the Agreement, as
amended by this Third Amendment, has been approved by its Board of Directors, or
the Executive Committee thereof (or, in the case of the Partnership, by the
respective Boards of Directors, or the Executive Committees thereof, of each of
its partners), and constitutes the valid and legally binding obligation of such
party enforceable against such party in accordance with its terms, except as
enforceability may be limited by
<PAGE>
- 8 -
bankruptcy, insolvency, reorganization, moratorium and other similar laws from
time to time in effect which affect the enforcement of creditors' rights
generally, and except as enforcement of remedies may be limited by general
equitable principles.
4. Counterparts.
------------
This Third Amendment may be executed in several counterparts, and each
counterpart, when so executed and delivered, shall constitute an original
instrument, and all such separate counterparts shall constitute but one and the
same instrument.
5. Merger.
------
This Third Amendment sets forth the entire understanding of the parties
regarding the subject matter hereof, and all prior such understandings, written
or oral, are merged herein.
6. Governing Law.
-------------
THIS THIRD AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF TEXAS.
THE CREDIT BUREAU, INCORPORATED
OF GEORGIA
By:
---------------------------------------
Title:
------------------------------------
EQUIFAX INC.
By:
---------------------------------------
Title:
------------------------------------
<PAGE>
- 9 -
CSC ENTERPRISES
By: CSC ENTERPRISES, INC.
Its Managing Partner
By:
---------------------------------------
Title:
------------------------------------
CSC ACCOUNTS MANAGEMENT, INC.
By:
---------------------------------------
Title:
------------------------------------
COMPUTER SCIENCES CORPORATION
By:
---------------------------------------
Title:
------------------------------------
<PAGE>
- 10 -
EXHIBIT I
---------
DIRECT MARKETING PRODUCTS
Service Description
- ------- -----------
PowerList A list product consisting of names and addresses selected
by geographic, demographic an-d buying behavior
characteristics. This is a 30-day active file. It may not
be used to determine creditworthiness.
PowerHouse A list product consisting of names and addresses
selectable by geographic, demographic and buying behavior
characteristics. This file is different from PowerLists
in that it does not require 30-day activity and it has
refined geographic selectability (household level).
Power Data Overlay The customer's own file is enhanced by PowerList indexes,
Census Data, Demographic and externally supplied data. It
may not be used to determine creditworthiness nor applied
anywhere other than their own customer base.
Custom Modeling A list selection derived directly from the Equifax
Consumer Marketing Database (ECMD) based on a
quantitative model custom built for the direct mailer.
The model is designed to select consumers who are likely
to have an interest in the customer's products and
respond via the mail. It may not be used to determine
creditworthiness.
<PAGE>
- 11 -
EXHIBIT 2
---------
CHANGED ADDRESS PRODUCT
Service Description
- ------- -----------
CBMovers Using the National Change of Address List (NCOA) to match
against the off-line screening database to determine if the
NCOA is a new address.
<PAGE>
- 1 -
SCHEDULE 3
- ----------
AGREEMENT FOR PURCHASE AND SALE OF SOFTWARE
THIS AGREEMENT FOR THE PURCHASE AND SALE OF SOFTWARE (the "Software
Agreement") is made and entered into as of the ____ day of ____________, 1991 by
and between CSC ENTERPRISES, a Delaware general partnership (the "Partnership")
and THE CREDIT BUREAU, INCORPORATED OF GEORGIA, a Georgia corporation ("CBI" or
"ECIS").
RECITALS:
The Partnership is the owner of that computer software described with
specificity on Exhibit A attached hereto (the "Software") and the source code
related thereto ("Source Code") and the Documentation as hereinafter defined.
"Documentation" shall mean: 1) operational documentation consisting of a summary
of the jobs and detailed instructions by job; 2) technical documentation
consisting of a detailed technical description of each job; 3) a cross-reference
report explaining the outputs from each job and 4) any and all other
miscellaneous reports and records which may assist ECIS in the operation of the
Software.
CBI has adopted the assumed name "Equifax Credit Information Services"
and desires to use the acronym "ECIS" instead of "CBI" and any reference to
"CBI" or "ECIS" refers to THE CREDIT BUREAU, INCORPORATED OF GEORGIA, a Georgia
corporation.
ECIS wishes to purchase, and the Partnership wishes to sell, the Software,
Documentation and Source Code in accordance with the terms of this Software
Agreement.
AGREEMENT:
1. Sale of Software Documentation and Source Code. Subject to the
----------------------------------------------
terms and conditions hereinafter set forth, the Partnership does hereby
<PAGE>
- 2-
transfer, grant, convey and assign to ECIS all of the Partnership's right, title
and interest in and to the Software, Documentation and Source Code.
2. Purchase Price. For and in consideration of the conveyance of
--------------
the Software, Documentation and Source Code as contemplated by Section 1 above,
and in reliance upon the representations and warranties made herein by the
Partnership, ECIS shall in full payment for the Software, Documentation and
Source Code pay on the date hereof Five Hundred Thousand Dollars ($500,000), by
wire transfer of funds to the Partnership.
3. Installation Support. The Partnership agrees that it will
--------------------
provide installation support to ECIS with respect to the Software described on
Exhibit A attached. The Partnership will provide one person on-site, at a
location determined by ECIS, for up to five (5) consecutive business days for
the purpose of installing the Software and training ECIS regarding the use of
the Software. Five additional days of support will be available to ECIS, for
thirty (30) days following initial installation, ECIS will pay $500 per day per
support person plus travel and accommodations with a one-half day one person
minimum.
4. Representations and Warranties of the Partnership. The
-------------------------------------------------
Partnership represents and warrants to ECIS that: (i) it is a partnership duly
organized, validly existing and in good standing under the laws of Delaware;
(ii) it has the partnership power and authority, and unencumbered right to enter
into this Software Agreement and perform all of its obligations hereunder; (iii)
it has good and marketable title to the Software, Documentation and Source Code,
free and clear of any liens or security interests, and, to its knowledge, free
and clear of any other charges, options, rights or claims or other encumbrances;
and (iv) it has not previously licensed the Software to any other parties.
5. Warranty Disclaimer. THE SOFTWARE, DOCUMENTATION AND SOURCE CODE
-------------------
ARE SOLD ON AN AS IS BASIS, AND, EXCEPT FOR THE WARRANTIES EXPRESSED IN SECTION
4 ABOVE, THE PARTNERS@ MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED, CONCERNING THE SOFTWARE, THE DOCUMENTATION AND THE SOURCE CODE AND ALL
OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS AND IMPLIED,
<PAGE>
- 3 -
INCLUDING, WITHOUT LIMITATION THOSE OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, ARE HEREBY SPECIFICALLY EXCLUDED.
6. Nonexclusive License. ECIS does hereby grant to the Partnership
--------------------
a nonexclusive perpetual license to use the Software, Documentation and Source
Code solely in the internal operations of its business anywhere in the world.
It is agreed such license to the Partnership does not require ECIS to provide
any software support to the Partnership in connection with the Software. In
connection with the exercise of its license herein granted, the Partnership
shall be permitted to enhance and modify the Software, Documentation and Source
Code, which, to the extent such enhancements and modifications are made during
the two year period commencing with the date of this Software Agreement, shall
be the sole and exclusive property of ECIS. During such two year period, upon
making such enhancements and modifications, the Partnership shall deliver to
ECIS at the Software installation site copies of all Source Code, documentation
and other information regarding the same. The Partnership shall, and shall
cause all of its officers and employees to, keep confidential and not disclose
to others the Source Code. The Partnership may utilize the Software,
Documentation and the Source Code to create derivative products; however, the
Partnership shall not license such derivative products to any party other than
ECIS.
7. Limitation of Liability. It is the intent of the parties that the
-----------------------
sale of the Software, Documentation and Source Code is AS IS, and that ECIS
should have no claim or cause of action against the Partnership in any way
relating to the Software, Documentation, Source Code or this Agreement.
However, in the event that a court deems the Partnership to have liability to
ECIS because of any claim relating in any way to the Software, Documentation,
Source Code or this Agreement, it is the further intent of the parties that such
liability shall be no more than $5,000. Patent and copyright infringement
claims by third parties against ECIS related to the Software and ECIS's costs
related thereto are excepted from the above limitation of liability.
8. Counterparts. This Software Agreement may be executed in
------------
counterparts, all of which taken together shall constitute a single agreement
between the parties.
<PAGE>
- 4 -
9. Section Headings; Exhibits. The section headings used herein are
--------------------------
for reference and convenience only, and shall not enter into the interpretation
hereof. The exhibits attached hereto are incorporated by reference herein.
10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
11. Entire Agreement. This Software Agreement and the exhibits
----------------
attached hereto constitute the entire agreement between the parties, and
supersedes and cancels any prior agreements, whether oral or written, between
the parties hereto, relating to the subject matter herein. This Software
Agreement may not be modified or amended orally, but only by an agreement in
writing signed by both parties.
12. Binding Effect. This Software Agreement shall be binding upon
--------------
and inure to the benefit of the parties hereto and their respective successors
and assigns.
IN WITNESS WHEREOF, each party hereto has executed this Software Agreement
on the date first above written.
CSC ENTERPRISES
By: CSC ENTERPRISES, INC.
Its Managing Partner
By:
--------------------------------------------
Title:
-----------------------------------------
THE CREDIT BUREAU, INCORPORATED
OF GEORGIA
By:
--------------------------------------------
Title:
-----------------------------------------
<PAGE>
- 5 -
EXHIBIT A
JOB Name/Number Description
- ------------------ -----------------------------------------------------------
CEIDELTS Deletes the disk files created in the prior month's run of
the CBI jobs. This frees up disk space for the current
month's run.
CBIREV Copies Revenue tape file to disk and a backup tape.
CBI430 Builds the frontend Revenue file for CBISSS. Reads the
Revenue disk file. Validates the data against VSAM files
containing valid region and service codes. Produces
validation reports (i.e. error listings). Retrieves CSC
service code values (summarized level of service codes).
Does a determination of whether a service fee is to be
calculated Reformats the file with additional data.
CBICOST Copies Cost Allocation tape file to disk and also to a
backup tape.
C21800 Builds the frontend Cost files for CBIBSS.
Reads the cost disk file. Validates the data against VSAM
files containing valid region and service codes. Specifies
each record as G(ain) or L(oss). Sorts transactions,
assigns Record Types 2-5 and writes to a file for use in
the update of the Customer History File. Record Types are
as follows:
2 - outbound Intercompany
3 - Outbound Affiliate
4 - Inbound Intercompany
5 - Inbound Affiliate
CBI855 Reads both Cost and Revenue output files. Assigns record
type 1 to Local transactions. Sorts, summarizes and formats
each record into the format of the Customer History File.
Writes the file out as a tape file. Merges
<PAGE>
- 6 -
the current month's output with the previous month's CEF to
create the current period-to-date file.
CBM4800 Reads the Customer History File (CHF) and creates a
validation report. Summarizes the entire file by record
type. Prints report showing service amount, expense amount,
and quantity for the last four (4) periods. Used for
validation of the CHF against the tapes. (see CB244900)
CBM4900 Reads the Cost and Revenue files to create validation
reports. Summarizes the files by Gain, Loss, Local and
Unassigned. Used for validation of the CHF against the
tapes. (see CBM4800)
CBM5000 Builds the extracted and enhanced Customer History File for
use in Sales Reporting. Extracts additional data from the
Revenue tape: Customer name, sales rep, sibling indicator,
customer abbr, and family code. Uses the Sales
representative number for 905 territory salesmen from an
uploaded sequential file. Assigns Service Group codes from
the VSAM 'Group' table. Validates/overlays the family code
read in an uploaded National Pricing file. Creates
'enhanced' records using 13 periods of data from CHF, sorts
and writes new files to tape
CBM5100 Creates detail report:
"Sales Representative Report"
"Local Member - Local Revenue"
CBM5200 Creates detail report:
"Sales Representative Report"
"Local Member - Outbound Revenue"
CBM5300 Creates summary reports:
1. "Sales Representative Report"
"Local member - Local Revenue"
<PAGE>
- 7 -
2. "Sales Representative Report"
"Local Member - Outbound Revenue"
CBM5400 Creates report: "Inbound Revenue Activity Report"
CBM5500 Creates report: "Sales Representative Report"
"Local & outbound by Current Revenue"
CBF5600 Creates report: "Bureau Sales Report"
"Local and Outbound by Current Revenue"
CBM5700 Creates reports:
1. "Top 200 members"
"Local and outbound by Current Revenue"
2. "Top 200 members of Affiliates"
"Inbound by Current Revenue"
3. "Fiscal YTD Top 200 Members"
"Local and Outbound by YTD Revenue
4. "Fiscal YTD Top 200 members of
Affiliates"
"Inbound by YTD Revenue"
CBM5800 Creates detail and summary reports:
1. "Revenue by Industry Code"
"Local and Outbound"
2. "Reporting Units by Industry Code"
"Local and Outbound"
CBM5900 Creates report: "Credit Reporting Units"
"Local and Outbound by Sales Representative"
CBM6000 Creates reports:
1. "DAS Revenue by Sales Representative"
2. "DTEC Units by Sales Representative"
CBM6100 Creates reports:
<PAGE>
- 8 -
1. "Online Directory Units by Sales Representative"
2. "Persona Units by Sales Representative"
3. "Safescan Revenue by Sales Representative"
4. "Finders Revenue by Sales Representative"
5. "Beacon Revenue by Sales Representative"
CBM6200 Creates report: "Member Dues Report"
CBM6300 Creates report: "Terminal equipment Report"
CBM6400 Creates detail & summary reports:
"Verbal & Written Credit Reporting Units"
CBM6500 Creates reports:
1. "Outbound Revenue Activity by Large Volume"
2. "Outbound Revenue Activity by Region"
3 "Outbound Revenue Activity"
CBM6550 Creates report: "Local and Outbound Units
"ZB Members only"
CBM6600 Creates report: "Member Roster Report"
CBM6700 Creates detail & summary reports:
"Local & Outbound Units by Major Service Group"
<PAGE>
- 1 -
AGREEMENT FOR PURCHASE AND SALE OF SOFTWARE
THIS AGREEMENT FOR THE PURCHASE AND SALE OF SO@ARE (the "Software
Agreement") is made and entered into as of the ____ day of ____________, 1991 by
and between CSC ENTERPRISES, a Delaware general partnership (the "Partnership")
and THE CREDIT BUREAU, INCORPORATED OF GEORGIA, a Georgia corporation ("CBI" or
"ECIS").
RECITALS:
The Partnership is the owner of that computer software described with
specificity on Exhibit A attached hereto (the "Software") and the source code
related thereto ("Source Code") and the Documentation as hereinafter defined.
"Documentation" shall mean: 1) operational documentation consisting of a summary
of the jobs and detailed instructions by job; 2) technical documentation
consisting of a detailed technical description of each job; 3) a cross-reference
report explaining the outputs from each job and 4) any and all other
miscellaneous reports and records which may assist ECIS in the operation of the
Software.
CBI has adopted the assumed name "Equifax Credit Information Services"
and desires to use the acronym "ECIS" instead of "CBI" and any reference to
"CBI" or "ECIS" refers to THE CREDIT BUREAU, INCORPORATED OF GEORGIA, a Georgia
corporation.
ECIS wishes to purchase, and the Partnership wishes to sell, the
Software, Documentation and Source Code in accordance with the terms of this
Software Agreement.
AGREEMENT:
1. Sale of Software Documentation and Source Code. Subject to the
----------------------------------------------
terms and conditions hereinafter set forth, the Partnership does hereby
<PAGE>
- 2 -
transfer, grant, convey and assign to ECIS all of the Partnership's right, title
and interest in and to the Software, Documentation and Source Code.
2. Purchase Price. For and in consideration of the conveyance of the
--------------
Software, Documentation and Source Code as contemplated by Section 1 above, and
in reliance upon the representations and warranties made herein by the
Partnership, ECIS shall in full payment for the Software, Documentation and
Source Code pay on the date hereof Five Hundred Thousand Dollars ($500,000), by
wire transfer of funds to the Partnership.
3. Installation Support. The Partnership agrees that it will provide
--------------------
installation support to ECIS with respect to the Software described on Exhibit A
attached. The Partnership will provide one person on-site, at a location
determined by ECIS, for up to five (5) consecutive business days for the purpose
of installing the Software and training ECIS regarding the use of the Software.
Five additional days of support will be available to ECIS, for thirty (30) days
following initial installation, ECIS will pay $500 per day per support person
plus travel and accommodations with a one-half day one person minimum.
4. Representations and Warranties of the Partnership. The
-------------------------------------------------
Partnership represents and warrants to ECIS that: (i) it is a partnership duly
organized, validly existing and in good standing under the laws of Delaware;
(ii) it has the partnership power and authority, and unencumbered right to enter
into this Software Agreement and perform all of its obligations hereunder; (iii)
it has good and marketable title to the Software, Documentation and Source Code,
free and clear of any liens or security interests, and, to its knowledge, free
and clear of any other charges, options, rights or claims or other encumbrances;
and (iv) it has not previously licensed the Software to any other parties.
5. Warranty Disclaimer. THE SOFTWARE, DOCUMENTATION AND SOURCE CODE
-------------------
ARE SOLD ON AN AS IS BASIS, AND, EXCEPT FOR THE WARRANTIES EXPRESSED IN SECTION
4 ABOVE, THE PARTNERSHIP MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED, CONCERNING THE SOFTWARE, THE DOCUMENTATION AND THE SOURCE CODE AND ALL
OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS AND IMPLIED,
<PAGE>
- 3 -
INCLUDING, WITHOUT LIMITATION THOSE OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, ARE HEREBY SPECIFICALLY EXCLUDED.
6. Nonexclusive License. ECIS does hereby grant to the Partnership a
--------------------
nonexclusive perpetual license to use the Software, Documentation and Source
Code solely in the internal operations of its business anywhere in the world.
It is agreed such license to the Partnership does not require ECIS to provide
any software support to the Partnership in connection with the Software. In
connection with the exercise of its license herein granted, the Partnership
shall be permitted to enhance and modify the Software, Documentation and Source
Code, which, to the extent such enhancements and modifications are made during
the two year period commencing with the date of this Software Agreement, shall
be the sole and exclusive property of ECIS. During such two year period, upon
making such enhancements and modifications, the Partnership shall deliver to
ECIS at the Software installation site copies of all Source Code, documentation
and other information regarding the same. The Partnership shall, and shall
cause all of its officers and employees to, keep confidential and not disclose
to others the Source Code. The Partnership may utilize the Software,
Documentation and the Source Code to create derivative products; however, the
Partnership shall not license such derivative products to any party other than
ECIS.
7. Limitation of Liability. It is the intent of the parties that the
-----------------------
sale of the Software, Documentation and Source Code is AS IS, and that ECIS
should have no claim or cause of action against the Partnership in any way
relating to the Software, Documentation, Source Code or this Agreement.
However, in the event that a court deems the Partnership to have liability to
ECIS because of any claim relating in any way to the Software, Documentation,
Source Code or this Agreement, it is the further intent of the parties that such
liability shall be no more than $5,000. Patent and copyright infringement
claims by third parties against ECIS related to the Software and ECIS's costs
related thereto are excepted from the above limitation of liability.
8. Counterparts. This Software Agreement may be executed in
------------
counterparts, all of which taken together shall constitute a single agreement
between the parties.
<PAGE>
- 4 -
9. Section Headings; Exhibits The section headings used herein are
--------------------------
for reference and convenience only, and shall not enter into the interpretation
hereof. The exhibits attached hereto are incorporated by reference herein.
10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
11. Entire Agreement. This Software Agreement and the exhibits
----------------
attached hereto constitute the entire agreement between the parties, and
supersedes and cancels any prior agreements, whether oral or written, between
the parties hereto, relating to the subject matter herein. This Software
Agreement may not be modified or amended orally, but only by an agreement in
writing signed by both parties.
12. Binding Effect. This Software Agreement shall be binding upon
--------------
and inure to the benefit of the parties hereto and their respective successors
and assigns.
IN WITNESS WHEREOF, each party hereto has executed this Software
Agreement on the date first above written.
CSC ENTERPRISES
By: CSC ENTERPRISES, INC.
Its Managing Partner
By:
----------------------------
Title:
-------------------------
THE CREDIT BUREAU, INCORPORATED
OF GEORGIA
By:
----------------------------
Title:
-------------------------
<PAGE>
EXHIBIT 13.1
------------
Summary of Selected Financial Data
PART I (1996 - 1994)
<TABLE>
<CAPTION>
(dollars in thousands, except per share amounts)
- --------------------------------------------------------------------------------------------------------------------
Year ended December 31 1996 1995 1994
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SUMMARY OF OPERATIONS
Operating revenue $1,811,223 $1,622,958 $1,421,996
Operating costs and
expenses before unusual items 1,496,492 1,360,019 1,207,889
Unusual items (10,313) -- --
- --------------------------------------------------------------------------------------------------------------------
Operating income 304,418 262,939 214,107
Other income 22,181 7,471 8,994
Interest expense (23,036) (21,172) (15,624)
- --------------------------------------------------------------------------------------------------------------------
Income before income taxes
and accounting changes 303,563 249,238 207,477
Provision for income taxes 125,946 101,588 87,131
- --------------------------------------------------------------------------------------------------------------------
Income before accounting changes 177,617 147,650 120,346
Cumulative prior years effect of
changes in accounting principles* -- -- --
- --------------------------------------------------------------------------------------------------------------------
Net income $177,617 $147,650 $120,346
- --------------------------------------------------------------------------------------------------------------------
Dividends paid $49,704 $50,223 $47,161
PER COMMON SHARE DATA
Income before accounting changes $1.22 $0.98 $0.81
Cumulative prior years effect of
changes in accounting principles* -- -- --
- --------------------------------------------------------------------------------------------------------------------
Net income $1.22 $0.98 $0.81
- --------------------------------------------------------------------------------------------------------------------
Dividends $0.330 $0.315 $0.303
Weighted average common shares
outstanding 145,518,000 151,357,000 148,608,000
BALANCE SHEET DATA
Assets at December 31 $1,302,784 $1,053,695 $1,021,174
Long-term debt at December 31 $305,992 $302,665 $211,967
Shareholders equity at December 31 $424,865 $353,422 $361,859
Common shares outstanding at
December 31 144,876,000 147,245,000 151,790,000
OTHER INFORMATION
Stock price per share at December 31 $30.63 $21.38 $13.19
Book value per share at December 31 $2.93 $2.40 $2.38
Market capitalization at December 31 $4,436,797 $3,147,362 $2,001,731
Number of employees at December 31 14,100 14,200 14,200
</TABLE>
* The 1991 accounting change relates to SFAS No. 106, "Postretirement Benefits
Other Than Pensions." The 1988 accounting change relates to SFAS No. 96,
"Accounting for Income Taxes."
<PAGE>
PART II (1993 - 1988)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
1993 1992 1991 1990 1989 1988
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$1,217,217 $1,134,333 $1,093,827 $1,078,753 $1,001,617 $894,482
1,049,750 992,995 969,136 941,976 881,606 801,785
(48,438) -- (32,044) (21,793) (14,656) (27,669)
- -----------------------------------------------------------------------------------------------------------------
119,029 141,338 92,647 114,984 105,355 65,028
3,890 7,482 8,128 11,055 9,712 5,648
(10,923) (4,029) (7,253) (13,177) (10,365) (3,331)
----------------------------------------------------------------------------------------------------------------
111,996 144,791 93,522 112,862 104,702 67,345
48,481 59,445 39,424 48,932 41,170 33,295
- -----------------------------------------------------------------------------------------------------------------
63,515 85,346 54,098 63,930 63,532 34,050
-- -- (48,991) -- -- 5,400
- -----------------------------------------------------------------------------------------------------------------
$63,515 $85,346 $5,107 $63,930 $63,532 $39,450
- -----------------------------------------------------------------------------------------------------------------
$42,041 $42,770 $42,623 $35,823 $32,003 $22,948
$0.42 $0.52 $0.33 $0.39 $0.40 $0.22
-- -- (0.30) -- -- 0.04
- -----------------------------------------------------------------------------------------------------------------
$0.42 $0.52 $0.03 $0.39 $0.40 $0.26
- -----------------------------------------------------------------------------------------------------------------
$0.280 $0.260 $0.260 $0.240 $0.215 $0.195
150,114,000 163,918,000 163,856,000 161,930,000 160,552,000 154,380,000
$731,201 $708,882 $716,103 $754,279 $685,188 $528,287
$200,070 $191,749 $77,114 $143,050 $88,883 $30,169
$254,031 $257,990 $350,314 $373,306 $339,918 $297,914
149,618,000 151,550,000 164,294,000 162,424,000 161,058,000 159,974,000
$13.69 $10.31 $7.94 $8.13 $8.00 $6.78
$1.70 $1.70 $2.13 $2.30 $2.11 $1.86
$2,047,896 $1,562,859 $1,304,084 $1,319,695 $1,288,464 $1,084,864
12,800 12,400 13,400 14,200 13,900 13,500
</TABLE>
<PAGE>
EXHIBIT 13.2
------------
This discussion and analysis should be read in conjunction with the consolidated
financial statements and accompanying notes.
SPINOFF OF INSURANCE SERVICES GROUP.
On December 9, 1996, Equifax announced its intention to split into two
independent publicly traded companies by spinning off its Insurance Services
Group as a tax-free dividend to shareholders. The spinoff will be contingent on
receiving a favorable ruling from the IRS, among other things. Subsequent to
receipt of a favorable ruling, Equifax shareholders will be awarded a pro-rata
distribution of stock in the new company. The exact ratio and timing of the
distribution have not been finalized, but the estimated date for the spinoff is
mid-1997.
Current shares will reflect a new Equifax consisting of the Financial Services
Group, a company that will continue to be a worldwide leader in the financial
information markets. The Insurance Services spinoff, ChoicePoint, will remain a
leading provider of risk management and fraud prevention information to the
insurance industry.
RESULTS OF OPERATIONS.
Consolidated revenue for the year was $1.8 billion, an increase of $188.3
million or 11.6% over 1995. This increase is less than the 14.1% increase in
1995, due primarily to 1994 acquisitions and the divestitures occurring in 1995.
Revenue increased 11.7% in 1996 compared to 7.9% in 1995 after adjusting for
acquisitions and divestitures (Notes 2 and 3). Revenue growth in 1996 benefited
from strong growth in credit reporting and credit marketing services, card
services, European operations and Insurance Services.
Operating income of $304.4 million increased $41.5 million or 15.8% in 1996.
Excluding a $10.3 million write-off in the second quarter of 1996 related to
asset impairments in the General Information Services segment (Note 3),
operating income improved 19.7% over the prior year. In 1995, operating income
increased $48.8 million or 22.8%. The improvements in both years are the result
of revenue increases in the higher margin businesses and continuing expense
controls throughout the organization. Operating income in 1996 was also aided
by the recognition of revenue from the lottery subcontract (Note 4). The
operating income margin in 1996 was 16.8% compared to 16.2% in 1995. The gains
in 1996 were achieved despite very competitive conditions both domestically and
internationally, and investments in integrating acquisitions and new products.
Acquisitions and divestitures caused 1996 operating income to be lower by 1.4
percentage points whereas they improved 1995 operating income by about 2.7
percentage points. In 1996, the net impact of acquisitions and divestitures was
slightly dilutive to net income and earnings per share due to acquisition costs.
In 1995, the net impact of acquisitions and divestitures was slightly dilutive
to net income and earnings per share due to higher interest expense and higher
number of outstanding shares.
Earnings per share increased 24.5% to $1.22 in 1996 from $0.98 in 1995. Net
income was $177.6 million in 1996, an increase of 20.3% over 1995's net income
of $147.6 million. Higher earnings per share increases relative to net income
increases reflect the Company's repurchase of common shares during 1996. For
the year, the average shares outstanding declined by 3.9% as a result of
Equifax's open market share repurchase plan.
<PAGE>
In February 1996, Equifax's subsidiary, High Integrity Systems, Inc. (HISI)
announced that it had signed a subcontract under which GTECH will provide
services on HISI's California lottery contract. Under the agreement, HISI
subcontracted many of its obligations under the reinstated contract to GTECH. In
connection with this subcontract, Equifax received $58 million, which is being
recognized as revenue net of related expenses over the 66-month life of the
contract. During 1996, Equifax recorded revenue of $5.4 million in connection
with the lottery subcontract.
Equifax received a $25 million payment from the California State Lottery during
the fourth quarter of 1995 in connection with the reinstatement of the lottery
contract with HISI. The $25 million payment was partially offset by certain
expenses associated with the contract, resulting in a net pre-tax gain of $19.7
million.
During the fourth quarter of 1995, the Company provided for certain
restructuring charges in the operating groups totaling $19.6 million, in
connection with reduced staffing levels, lease terminations and the
discontinuance of a certain product line.
There are five reporting segments: Credit Services, Payment Services and
International Operations (comprising the Financial Services Group), Insurance
Services and General Information Services. These segments generally follow the
Company's internal management organization and are based on similarities in
product lines and industries served. General Information Services is primarily
comprised of the Health Information Services businesses, which were divested
during the fourth quarter of 1996. The following discussion analyzes (1)
revenue and operating income by the five segments; (2) general corporate
expense; (3) consolidated other income, interest expense and effective income
tax rates; and (4) financial condition. Note 11 breaks out the segment results
by quarter for 1996 and 1995.
<TABLE>
<CAPTION>
CREDIT SERVICES.
(in millions)
- --------------------------------------------------------------------------------
1996 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenue $580.9 $512.7 $476.4
Operating income* $203.8 $180.1 $149.9
</TABLE>
*before restructuring charge of $3.2 million in 1995
(Note 10)
Credit Services is part of the Financial Services Group and comprises Credit
Reporting Services, Risk Management Services, Equifax National Decision Systems
and Mortgage Services. Revenue growth in Credit Services was 13.3% in 1996,
compared to 7.6% in 1995. Acquisitions accounted for 1.9 percentage points of
the 1996 revenue increase and 0.7 percentage points of the 1995 increase.
Credit Reporting Services showed a revenue increase of 14% in 1996, which was
driven by volume growth of finance, automotive, banking and utilities customers;
growth in prescreening for credit card issuers; and acquisitions. Average
prices for credit reports continued to decline in 1996, comparable to the rate
of decline in 1995. This decline, however, was more than offset by continued
volume growth and market share expansion. Pricing pressures are expected to
persist, but volume growth is expected to continue to more than offset price
declines. Credit Reporting Services continued to provide new services and
products, which contributed to revenue growth in 1996 and is expected to
continue adding to growth in 1997.
Revenue in Risk Management Services increased 15.6% due primarily to new
business from customers outsourcing the accounts receivable management function
of their businesses.
-51-
<PAGE>
Revenue at Equifax National Decision Systems increased 13.4% in 1996, and
operating income more than doubled. Growth was driven primarily by the success
of new products developed in 1995, although one new product, Business
Geometrics, did not generate the projected level of revenue. In addition,
National Decision Systems experienced a high retention rate with its customers,
further contributing to the strong revenue growth.
Revenue in Mortgage Services declined 5.9% for the year. This decline was due
primarily to the continuing shift to a lower-priced automated product.
Operating income for Credit Services increased 13.2% in 1996, following a 20.2%
increase in 1995, due primarily to strong revenue growth across all its
businesses. Operating margin was flat due to increased expense in 1996 related
to new product introductions, the upgrading of systems technology, Year 2000
compliance expenses and $2 million in severance costs incurred as part of
ongoing cost containment efforts.
During the fourth quarter of 1995, a restructuring charge of $3.2 million was
recorded primarily to reduce fixed expenses associated with Mortgage Services,
reflecting the increasingly automated nature of the marketplace. The charge was
taken to consolidate the number of offices from seven to three and reduce
staffing levels.
<TABLE>
<CAPTION>
PAYMENT SERVICES.
(in millions)
- --------------------------------------------------------------------------------
1996 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenue $339.3 $284.4 $246.6
Operating income* $66.9 $64.0 $57.5
</TABLE>
*before restructuring charge of $0.5 million in 1995
(Note 10)
Payment Services is part of the Financial Services Group and consists of Card
Services, Check Services and FBS Software. Payment Services revenue increased
19.3% in 1996, with 2.4 percentage points of the revenue increase attributable
to the fourth quarter 1996 acquisition of CSG Card Services and the 1995
acquisition of TecniCob. Card Services revenue increased 28.0%, Check Services
revenue increased 4.1%, and FBS Software revenue more than doubled. In 1995,
Payment Services revenue increased 15.3% with 3.8 percentage points attributable
to the 1994 acquisitions of First Security Processing Services (FSPS) and FBS
Software. In 1995, Card Services revenue increased 24.6% and Check Services
revenue increased 4.5%.
Growth within Card Services is attributed to the higher number of cardholder
accounts processed, due to business from new customers (i.e., credit unions and
IBAA member banks) that either converted to or began using Equifax Card Services
credit and debit card processing services, and to volume growth from existing
customers. The acquisition of CSG Card Services in the fourth quarter also
contributed to revenue growth. During 1994, contracts with two major
association customers, IBAA Bancard Inc. and Card Services for Credit Unions,
Inc. (CSCU), were renewed, both for five-year terms with incremental revenue due
to increased service levels provided. The contract with IBAA Bancard Inc. was
extended during 1996 for an additional five years through 2004.
Although Check Services revenue had been projected to decline in 1996, it
actually showed a modest increase because a slight decline in check warranty
revenue was offset by increases in other Check Services products, particularly
its verification product, PathWays. Check Services was also able to retain
-52-
<PAGE>
certain customers which had been expected to discontinue service and was able to
re-sign a significant customer which had discontinued service, contributing to
its better-than-expected performance. The dollar amount of checks warranted and
verified by Check Services was $14.1 billion in 1996 versus $12.6 billion in
1995.
FBS Software revenue more than doubled in 1996 due primarily to several large
consulting contracts that were signed during 1996.
Payment Services operating income increased $2.9 million in 1996 versus a $6.5
million increase in 1995. The 1996 increase in operating income was adversely
impacted by $5.1 million in one-time expenses incurred in connection with a move
to a new location in the Tampa area. Excluding these expenses, 1996 operating
income increased by $8.0 million, or 12.5%, driven primarily by higher profits
resulting from higher revenue in Card Services and by the performance of FBS
Software.
Operating income for Card Services increased 11.3% in 1996 as the benefits of
strong revenue growth were partially offset by expenses related to the move.
Operating income in Check Services declined by 10.2%, a result of higher
customer service and support expenses and one-time move costs.
<TABLE>
<CAPTION>
INTERNATIONAL OPERATIONS.
(in millions)
- --------------------------------------------------------------------------------
1996 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenue $243.3 $211.0 $143.4
Operating income* $34.3 $21.7 $16.5
</TABLE>
*before restructuring charge of $1.7 million in 1995
(Note 10)
International Operations, part of the Financial Services Group, consists of
Credit Services and Payment Services operations in Europe (primarily in the
United Kingdom) and Canada. Equifax also has Credit Services joint ventures in
Europe (Spain and Portugal) and South America (Chile and Argentina). In 1996,
revenue increased by 15.3% primarily due to volume increases in U.K. Consumer
and Commercial Credit Services and the 1995 acquisition of Infocheck, and in
Canada due to the fourth quarter 1996 acquisition of Creditel. Revenue for 1995
was up 47.2%, primarily due to significant acquisition activity, which accounted
for 42.7 percentage points of the increase. In 1996 Equifax increased its
ownership of Transax to 100% from 50.1%.
Canadian revenue, exclusive of acquisitions and divestitures, was up 4.3% in
1996, as increases in credit report unit volumes were partially offset by
average price declines and lower revenues in several other related products.
Revenue from European operations increased 19.2% in 1996. The gains within
European operations were attributable primarily to consumer credit volumes,
marketing services and auto lien information, as well as the inclusion of
Infocheck results for a full year.
Operating income for International Operations increased 58.3% in 1996 versus
31.7% in 1995, primarily due to improved results in Europe and a strong
performance from DICOM in Chile. Operating income in Canada declined modestly
in 1996 as improvements in credit volumes, collections services and the
acquisition of Creditel were more than offset by $1 million in severance
expenses incurred related to the unification of United States and Canadian
operations within a North American management structure.
-53-
<PAGE>
In Europe, operating efficiencies resulting from the integration of the 1994
Infolink and 1995 Infocheck acquisitions continue to enhance the value of the
Company's databases and create substantial savings by eliminating duplicate
costs. Operating income increased from $4.7 million in 1995 to $15.7 million in
1996 as a result of these synergies and a strong performance in auto lien
information.
During the fourth quarter of 1995, a restructuring charge of $1.7 million was
taken within Canadian operations to reduce staffing levels and other fixed
expenses.
<TABLE>
<CAPTION>
INSURANCE SERVICES.
(in millions)
- --------------------------------------------------------------------------------
1996 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenue $587.1 $516.9 $453.4
Operating income* $50.7 $43.9 $18.5
</TABLE>
*before restructuring charge of $9.2 million in 1995
(Note 10)
Revenue increased 13.6% in 1996 within Insurance Services, versus an increase of
14.0% in 1995, as a result of the improved performance of substantially all
business units and increased Motor Vehicle Records (MVR) registry revenue.
Excluding acquisitions, Insurance Services revenue increased 11.3% in 1996.
Insurance Services consists of Field Services, Data Services, Osborn
Laboratories, Commercial Specialists, PRC, CUE UK and the newly acquired CDB
Infotek.
Revenue from Field Services, which includes Medical Products, Employment
Services, Health and Safety Solutions, Business Services and Claims Services,
increased 3.4% in 1996 and 3.1% in 1995. The increase in 1996 is primarily the
result of growth within Employment Services.
Revenue from Data Services products increased 17.5% in 1996 versus 9.4% in 1995,
primarily due to volume increases in most product lines and higher market share.
MVR registry revenue (the fee charged by states for motor vehicle records, which
the Company passes on to its customers) was up $33.1 million in 1996 due to
continued growth in MVR units, as compared with a $19.8 million increase in
1995. Osborn Laboratories revenue increased 30.8% in 1996 as volume increased
and its market share continued to expand. Revenue at CUE UK increased 54.5% as
a result of the late 1995 roll-out of the CUE Motor product and increased usage
of the CUE Home product. Revenue at PRC increased 20.8% while Commercial
Specialists experienced a 9.2% decline in revenue.
Operating income increased 15.6% in 1996 versus 1995, primarily driven by strong
performances at Data Services, Osborn Labs and CUE UK, but was partially offset
by a decline at Commercial Specialists and the slightly dilutive impact of the
CDB Infotek acquisition. In 1995, operating income more than doubled to $43.9
million. The increase in 1995 resulted from the strong performance of Data
Services, cost controls within Field Services, continued improvement in CUE UK
and Commercial Specialists, and the full-year impact of 1994 acquisitions.
During the fourth quarter of 1995 a charge of $9.2 million was taken, primarily
in Field Services, to reduce staffing levels and bring fixed expenses in line
with expected revenue levels.
-54-
<PAGE>
<TABLE>
<CAPTION>
GENERAL INFORMATION SERVICES.
(in millions)
- --------------------------------------------------------------------------------
1996 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenue $60.5 $97.9 $102.2
Operating income
(loss)* $1.1 $(11.7) $1.0
</TABLE>
*excludes a $10.3 million loss related to the write-off of certain intangible
assets within Health Information Services (Note 3) in 1996 and income from
lottery settlement of $19.7 million (Note 4) and restructuring charge of $4.4
million in 1995 (Note 10)
This segment comprises healthcare operations, development projects, marketing
services operations and HISI, the lottery subsidiary. The revenue decline in
1996 of $37.3 million is primarily attributable to the divestiture of two
marketing companies during the third quarter of 1995 and the divestiture of
Health Information Services companies during the fourth quarter of 1996. The
revenue decline was partially offset by HISI's recognition of $5.4 million in
revenue from its lottery subcontract with GTECH in 1996.
During the fourth quarter, the company sold Equifax Health EDI Services, Equifax
Health Analytical Services, Equifax Health Administrative Services and Equifax
Medical Credentials Verification Services (MCVS). The decision to divest the
Company's health information businesses was made to better focus on
opportunities in the core businesses of financial and insurance services,
particularly in light of the changing trends within the healthcare industry.
Equifax has now completed the divestiture of its health information businesses.
During the third quarter of 1995, Equifax sold Elrick & Lavidge and Quick Test,
two marketing services companies, to better focus on its core businesses. In
1995 revenue was up 8.3% excluding acquisitions and divestitures.
This segments operating income in 1996 was $1.1 million versus an operating loss
of $11.7 million in 1995. The improvement in operating income was primarily
related to results from the lottery subsidiary, as well as a reduction in the
operating losses incurred by Health Information Services businesses prior to
their divestiture. The 1995 operating loss was due primarily to higher expenses
associated with the integration of health information acquisitions and the
development of MCVS, an internally developed database product.
During the fourth quarter of 1995, Equifax received a $25 million payment from
the California State Lottery in connection with the reinstatement of the lottery
contract with Equifax's subsidiary, High Integrity Systems, Inc. (HISI).
Partially offsetting this $25 million payment were expenses associated with the
contract, resulting in a net gain of $19.7 million.
In June 1996 the Company recorded a $10.3 million loss to write off certain
intangible assets within Health Information Services, in accordance with
Financial Accounting Standards Board Statement No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of."
A restructuring charge of $4.4 million was taken during the fourth quarter of
1995, largely to reduce staffing levels within Health Information Services and
to write off a discontinued product line.
-55-
<PAGE>
<TABLE>
<CAPTION>
GENERAL CORPORATE EXPENSE.
(in millions)
- --------------------------------------------------------------------------------
1996 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Expense* $42.1 $35.1 $29.2
</TABLE>
*before restructuring charge of $0.5 million in 1995
(Note 10)
General corporate expense increased $7.0 million due primarily to higher bonus
expense resulting from strong financial performance, performance share expense
driven by higher share price, and expenses related to systems enhancements. The
increase of $5.9 million in 1995 was due primarily to higher performance share
plan expense driven by the Company's higher share price.
<TABLE>
<CAPTION>
OTHER INCOME, INTEREST EXPENSE AND EFFECTIVE INCOME TAX RATES.
(in millions)
- --------------------------------------------------------------------------------
1996 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Other income $22.2 $7.5 $9.0
Interest expense $23.0 $21.2 $15.6
Effective income tax rate 41.5% 40.8% 42.0%
</TABLE>
Other income increased $14.7 million over 1995 primarily as a result of an $11.6
million gain on the sale of the businesses comprising Health Information
Services and an $8.2 million gain recorded in connection with the second quarter
sale of the Company's investment in Physician Computer Network, Inc. These
gains were partially offset by lower levels of interest income.
The increase in interest expense reflects the higher levels of borrowing due to
acquisitions and share repurchases.
The effective tax rate of 41.5% in 1996 was higher than 1995's rate due to the
impact of non-deductible goodwill recorded at two of the Health Information
Services businesses, which were divested in the fourth quarter. As a result,
the $11.6 million gain on the sales was offset by tax expense of $9.9 million,
resulting in a $1.6 million after-tax gain ($.01 per share).
Exclusive of the tax impact of the Health Information Services divestiture,
1996's effective tax rate was lower than 1995's due in large part to a change in
the mix of foreign income between tax jurisdictions with different effective tax
rates. The effective tax rate in 1997 is expected to be slightly lower than
1996's rate, due to the tax impact of the 1996 divestitures partially offset by
higher tax expenses in the U.K. where most net operating loss carryforwards have
been utilized.
FINANCIAL CONDITION.
The Company's financial condition remained strong during 1996. Net cash
provided by operations increased from $160.0 million to $308.8 million. This
increase resulted primarily from the receipt of $58.0 million related to the
lottery subcontract (Note 4) and the timing of payments between years for income
taxes and certain other accrued expenses.
Normal capital expenditures and dividend payments were met with internally
generated funds. Other significant outlays in 1996 included $105.6 million for
treasury stock purchases (Note 7) and $152.8
-56-
<PAGE>
million for acquisitions (Note 2). These items were financed through a
combination of excess cash from operations, a net $20.8 million cash inflow from
short-term notes and long-term debt, and net proceeds of $67.4 million from the
sales of the healthcare businesses and the sale of an investment in Physician
Computer Network, Inc.
Capital expenditures for 1996, exclusive of acquisitions, were $100.2 million.
Capital expenditures for 1997 are expected to be $119 million due to continued
investment in products and services and system enhancements, in addition to
investments in international development and capital expenditures associated
with 1996 acquisitions. Budgeted capital expenditures are expected to be met
with internally generated funds. As of December 31, 1996, approximately $52
million remains authorized under the Company's share repurchase program.
At December 31, 1996, $490 million was available under the Company's $550
million revolving credit facility to fund future capital requirements, including
the possible purchase of the CSC collections and credit reporting businesses
(Note 9). Management feels that the Company's liquidity will remain strong in
both the short and long terms, and that the Company has sufficient debt capacity
to finance all its capital needs, if necessary.
FORWARD-LOOKING INFORMATION.
This discussion includes forward-looking statements within the meaning of the
federal securities laws. These forward-looking statements include, among
others, statements concerning the Company's outlook for 1997, volume and pricing
trends, cost control measures and their results, the Company's expectations
as to funding its capital expenditures and operations during 1997, the Company's
intention to spin off its Insurance Services Group and other statements relative
to future plans and strategies. These forward-looking statements reflect
management's current expectations and are based upon currently available data.
Actual results are subject to future events, risks and uncertainties which could
materially impact performance from that expressed or implied in these
statements.
Equifax expects to post another record financial performance in 1997. To
accomplish this goal, Equifax must successfully continue to implement its
strategy of expanding and leveraging its core businesses in markets where it
holds a substantial market share while positioning itself to exploit
opportunities in the fast-growing credit economies worldwide. Equifax expects
to achieve these results by growing through global expansion, acquisitions and
the development of new value-added products and services. The Company will also
need to continue its focus on cost containment, notwithstanding expected one-
time costs associated with the spinoff of the Insurance Services Group.
In 1996, Equifax expensed about one cent per share to modify computer software
for compliance with Year 2000 as required by the FASB's Emerging Issues Task
Force Issue No. 96-14. Year 2000 expenses will continue to impact results in
1997 (approximately $.04 to $.05 per share) and 1998, as Equifax plans to be
Year 2000-compliant in advance of the millennium. The amount and timing of
these expenses may vary as current estimates are refined.
Important factors that could cause actual results to differ materially from
those expressed in the forward-looking statements include, but are not limited
to, the following: a significant change in the growth rate of the overall U.S.
economy, such that consumer spending and related consumer debt are materially
impacted; a material decline or change in the marketing techniques of credit
card issuers; unexpected pricing pressure above and beyond the levels
experienced in the last several years; a significant reversal of the trend
toward credit card use increasing as a percentage of total consumer
expenditures; the inability of the Company to realize the expected levels of
cost control and synergies from integration of
-57-
<PAGE>
acquisitions; risks associated with investments and operations in foreign
countries, including regulatory environments, exchange rate fluctuations and
local political, social and economic factors; the inability of the Company to
continue its successful development and marketing of new products and services
to existing and new industries; material changes in regulatory environments; the
inability of the Company to accurately estimate the cost of systems preparation
for Year 2000 compliance; the inability of the Company to successfully complete
the spinoff of Insurance Services, due to an adverse ruling by the IRS; or a
drastic negative change in market conditions or other unforeseen difficulties.
-58-
<PAGE>
EXHIBIT 13.3
------------
Consolidated Balance Sheets
<TABLE>
<CAPTION>
(in thousands)
- --------------------------------------------------------------------------------
December 31 1996 1995
- --------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
Current Assets:
Cash and cash equivalents $49,886 $26,136
Accounts receivable, net of allowance for doubtful
accounts of $7,714 in 1996 and $7,077 in 1995 305,678 258,335
Deferred income tax assets 36,999 30,594
Other current assets 44,475 51,611
- --------------------------------------------------------------------------------
Total current assets 437,038 366,676
- --------------------------------------------------------------------------------
Property and Equipment:
Land, building and improvements 29,563 18,050
Data processing equipment and furniture 257,321 218,699
- --------------------------------------------------------------------------------
286,884 236,749
Less accumulated depreciation 164,613 148,901
- --------------------------------------------------------------------------------
122,271 87,848
- --------------------------------------------------------------------------------
Goodwill 433,758 353,571
- --------------------------------------------------------------------------------
Purchased Data Files 87,025 74,828
- --------------------------------------------------------------------------------
Other Assets 222,692 170,772
- --------------------------------------------------------------------------------
$1,302,784 $1,053,695
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
<PAGE>
<TABLE>
<CAPTION>
(in thousands, except par values)
- --------------------------------------------------------------------------------
December 31 1996 1995
- --------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities:
Short-term debt and current maturities
of long-term debt $ 60,490 $ 20,384
Accounts payable 84,628 62,194
Accrued salaries and bonuses 39,276 27,919
Income taxes payable 17,659 --
Other current liabilities 172,626 140,123
- --------------------------------------------------------------------------------
Total current liabilities 374,679 250,620
- --------------------------------------------------------------------------------
Long-Term Debt, Less Current Maturities 305,992 302,665
- --------------------------------------------------------------------------------
Postretirement Benefit Obligations 79,400 80,885
- --------------------------------------------------------------------------------
Long-Term Deferred Revenue 42,964 --
- --------------------------------------------------------------------------------
Other Long-Term Liabilities 74,884 66,103
- --------------------------------------------------------------------------------
Commitments and Contingencies (Note 9)
Shareholders' Equity:
Common stock, $1.25 par value; shares
authorized - 300,000; issued - 170,859 in 1996
and 168,812 in 1995; outstanding - 144,876
in 1996 and 147,245 in 1995 213,573 211,015
Preferred stock, $0.01 par value; shares authorized -
10,000; issued and outstanding - none in 1996 or 1995 -- --
Paid-in capital 207,142 171,020
Retained earnings 396,340 269,986
Cumulative foreign currency translation adjustment (3,998) (13,777)
Treasury stock, at cost, 19,430 shares in 1996 and
14,847 shares in 1995 (Note 7) (323,625) (218,613)
Stock held by employee benefits trusts, at cost,
6,553 shares in 1996 and 6,719 shares in 1995
(Note 7) (64,567) (66,209)
- --------------------------------------------------------------------------------
Total shareholders' equity 424,865 353,422
- --------------------------------------------------------------------------------
$1,302,784 $1,053,695
- --------------------------------------------------------------------------------
</TABLE>
-60-
<PAGE>
Consolidated Statements of Income
<TABLE>
<CAPTION>
(in thousands, except per share amounts)
- --------------------------------------------------------------------------------
Year Ended December 31 1996 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating revenue $1,811,223 $1,622,958 $1,421,996
- --------------------------------------------------------------------------------
Costs and expenses:
Costs of services 1,126,741 1,038,881 905,307
Selling, general and administrative
expenses 369,751 321,231 302,582
Asset impairment (Note 3) 10,313 -- --
Credit related to lottery contract (Note 4) -- (19,665) --
Restructuring provision (Note 10) -- 19,572 --
- --------------------------------------------------------------------------------
Total costs and expenses 1,506,805 1,360,019 1,207,889
- --------------------------------------------------------------------------------
Operating income 304,418 262,939 214,107
Other income, net 22,181 7,471 8,994
Interest expense 23,036 21,172 15,624
- --------------------------------------------------------------------------------
Income before income taxes 303,563 249,238 207,477
Provision for income taxes 125,946 101,588 87,131
- --------------------------------------------------------------------------------
Net income $177,617 $147,650 $120,346
- --------------------------------------------------------------------------------
Weighted average common shares outstanding 145,518 151,357 148,608
- --------------------------------------------------------------------------------
Per common share:
Net income $1.22 $0.98 $0.81
- --------------------------------------------------------------------------------
Dividends $0.330 $0.315 $0.303
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
-61-
<PAGE>
Consolidated Statements of Shareholders' Equity
<TABLE>
<CAPTION>
(in thousands)
- --------------------------------------------------------------------------------
Year Ended December 31 1996 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock:
Balance at beginning of year $211,015 $208,471 $206,554
Shares issued under stock plans 2,558 2,544 1,917
- --------------------------------------------------------------------------------
Balance at end of year $213,573 $211,015 $208,471
- --------------------------------------------------------------------------------
Paid-In Capital:
Balance at beginning of year $171,020 $145,859 $108,807
Shares issued under stock plans 25,795 17,243 12,930
Adjustment for treasury stock
reissued for acquisitions 360 884 20,267
Other 9,967 7,034 3,855
- --------------------------------------------------------------------------------
Balance at end of year $207,142 $171,020 $145,859
- --------------------------------------------------------------------------------
Retained Earnings:
Balance at beginning of year $269,986 $175,894 $102,709
Net income 177,617 147,650 120,346
Cash dividends (49,704) (50,223) (47,161)
Other (1,559) (3,335) --
- --------------------------------------------------------------------------------
Balance at end of year $396,340 $269,986 $175,894
- --------------------------------------------------------------------------------
Cumulative Foreign Currency
Translation Adjustment:
Balance at beginning of year $(13,777) $(13,386) $(10,077)
Adjustment during year 9,779 (391) (3,309)
- --------------------------------------------------------------------------------
Balance at end of year $(3,998) $(13,777) $(13,386)
- --------------------------------------------------------------------------------
Treasury Stock:
Balance at beginning of year $(218,613) $(87,975) $(92,870)
Cost of shares repurchased (105,550) (132,668) (57,985)
Cost of shares transferred to employee
benefits trusts -- -- 5,912
Cost of shares reissued for acquisitions 538 2,030 56,968
- --------------------------------------------------------------------------------
Balance at end of year $(323,625) $(218,613) $(87,975)
- --------------------------------------------------------------------------------
Stock Held By Employee Benefits Trusts:
Balance at beginning of year $(66,209) $ (67,004) $(61,092)
Cost of shares transferred from treasury
stock -- -- (5,912)
Cost of shares reissued under stock plans 1,642 795 --
- --------------------------------------------------------------------------------
Balance at end of year $(64,567) $ (66,209) $(67,004)
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
-62-
<PAGE>
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
(in thousands)
- -------------------------------------------------------------------------------------------------
Year Ended December 31 1996 1995 1994
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 177,617 $ 147,650 $ 120,346
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 85,896 77,045 66,496
Asset impairment write-off 10,313 -- --
Gain from sale of long-term investments (8,232) -- --
Gain from sale of businesses (11,564) -- --
Restructuring provision, net of
cash payments -- 16,136 --
Changes in assets and liabilities,
excluding effects of acquisitions:
Accounts receivable, net (34,037) (20,618) (28,018)
Current liabilities, excluding debt 55,074 (40,585) 23,972
Other current assets 11,559 (22,479) (5,035)
Deferred income taxes (20,110) 10,373 (15,725)
Other long-term liabilities, excluding debt 53,351 450 569
Other assets (11,053) (8,024) --
- -------------------------------------------------------------------------------------------------
Net cash provided by operating activities 308,814 159,948 162,605
- -------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Additions to property and equipment (55,991) (31,687) (20,173)
Additions to other assets, net (44,198) (27,344) (12,163)
Acquisitions, net of cash acquired (152,763) (14,716) (144,528)
Investments in unconsolidated affiliates -- (14,066) (15,303)
Deferred payments on prior year acquisitions -- (8,743) --
Proceeds from sale of long-term investments 18,356 -- --
Proceeds from sale of businesses 49,081 14,868 --
Proceeds from sale of land and buildings -- -- 57,079
- -------------------------------------------------------------------------------------------------
Net cash used by investing activities (185,515) (81,688) (135,088)
- -------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Net short-term borrowings (payments) 20,220 (44,274) 62,227
Additions to long-term debt 12,820 82,402 --
Payments on long-term debt (12,248) (11,462) (2,375)
Treasury stock purchases (105,550) (132,668) (57,985)
Dividends paid (49,704) (50,223) (47,161)
Proceeds from exercise of stock options 25,945 16,596 11,786
Other 9,967 7,034 3,855
- -------------------------------------------------------------------------------------------------
Net cash used by financing activities (98,550) (132,595) (29,653)
- -------------------------------------------------------------------------------------------------
Effect of foreign currency exchange rates on cash (999) 1,062 (4,059)
- -------------------------------------------------------------------------------------------------
Net cash provided (used) 23,750 (53,273) (6,195)
Cash and cash equivalents, beginning of year 26,136 79,409 85,604
- -------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of year $ 49,886 $ 26,136 $ 79,409
- -------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
-63-
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING AND REPORTING POLICIES.
Principles of consolidation. The consolidated financial statements include the
accounts of the Company and its majority-owned subsidiaries. All significant
intercompany transactions and balances have been eliminated. Certain prior year
amounts have been reclassified to conform with the current year presentation.
Nature of operations. The Company principally provides information services to
businesses to help them grant credit, authorize and process credit card and
check transactions, and insure lives and property. The principal lines of
business are credit services, payment services and insurance services (see Note
12 for industry segment information). The principal markets for credit and
payment services are retailers, banks and financial institutions, while those
for insurance services are life and health and property and casualty insurance
companies. The Company's operations are predominantly located within the United
States. On December 9, 1996, the Company announced its intention to split into
two independent publicly traded companies by spinning off its Insurance Services
industry segment. The spinoff will be effected through a pro rata tax-free
dividend of stock in the new company to existing Equifax shareholders and is
contingent on receiving a favorable ruling from the IRS, among other things. The
timing of the distribution has not yet been finalized but is currently expected
to occur mid-1997.
Use of estimates. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions. These estimates and assumptions affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements as well as reported amounts of revenues and
expenses during the reporting period. Actual results could differ from these
estimates.
Property and equipment. The cost of property and equipment is depreciated
primarily on a straight-line basis over estimated asset lives of 30 to 50 years
for buildings; useful lives, not to exceed lease terms, for leasehold
improvements; three to five years for data processing equipment and eight to 20
years for furniture.
Goodwill. Goodwill is amortized on a straight-line basis predominantly over
periods from 20 to 40 years. Amortization expense was $13,111,000 in 1996,
$11,033,000 in 1995 and $7,380,000 in 1994. As of December 31, 1996 and 1995,
accumulated amortization was $44,066,000 and $33,761,000, respectively. The
Company regularly evaluates whether events and circumstances have occurred that
indicate the carrying amount of goodwill may warrant revision or may not be
recoverable. When factors indicate that goodwill should be evaluated for
possible impairment, the Company uses an estimate of the future undiscounted net
cash flows of the related business over the remaining life of the goodwill in
measuring whether the goodwill is recoverable.
Purchased data files. Purchased data files are amortized on a straight-line
basis primarily over 15 years. Amortization expense was $10,294,000 in 1996,
$11,029,000 in 1995 and $11,331,000 in 1994. As of December 31, 1996 and 1995,
accumulated amortization was $74,546,000 and $63,528,000, respectively.
-64-
<PAGE>
Other assets. Other assets at December 31, 1996 and 1995 consist of the
following:
<TABLE>
<CAPTION>
(in thousands) 1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Purchased software $57,281 $43,692
Systems development and other deferred costs 69,351 42,826
Investments in unconsolidated affiliates 42,615 39,998
Deferred income tax assets 15,323 4,455
Other 38,122 39,801
- --------------------------------------------------------------------------------
$222,692 $170,772
- --------------------------------------------------------------------------------
</TABLE>
Purchased software, systems development and other deferred costs are being
amortized on a straight-line basis over five to ten years. Amortization expense
for other assets was $26,249,000 in 1996, $22,390,000 in 1995 and $18,138,000 in
1994. As of December 31, 1996 and 1995, accumulated amortization was $92,071,000
and $82,164,000, respectively.
Foreign currency translation. The assets and liabilities of foreign
subsidiaries are translated at the year-end rate of exchange, and income
statement items are translated at the average rates prevailing during the year.
The resulting translation adjustment is recorded as a component of shareholders'
equity. Exchange gains and losses on intercompany balances of a long-term
investment nature are also recorded as a component of shareholders' equity.
Other foreign currency translation gains and losses, which are not material, are
recorded in the consolidated statements of income.
Consolidated statements of cash flows. The Company considers cash equivalents
to be short-term cash investments with original maturities of three months or
less.
Cash paid for income taxes and interest is as follows:
<TABLE>
<CAPTION>
(in thousands) 1996 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Income taxes, net of amounts refunded $106,460 $118,645 $91,643
Interest $23,553 $21,127 $14,604
</TABLE>
In 1996, 1995 and 1994, the Company acquired various businesses that were
accounted for as purchases (Note 2). In conjunction with these transactions,
liabilities were assumed as follows:
<TABLE>
<CAPTION>
(in thousands) 1996 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Fair value of assets acquired $201,589 $60,187 $330,898
Cash paid for acquisitions 154,874 14,836 153,143
Value of treasury shares reissued
for acquisitions -- -- 77,235
Notes and deferred payments 1,542 13,369 16,974
- --------------------------------------------------------------------------------
Liabilities assumed $45,173 $31,982 $83,546
- --------------------------------------------------------------------------------
</TABLE>
Financial instruments. The Company's financial instruments consist primarily of
cash and cash equivalents, accounts and notes receivable, accounts payable and
short-term and long-term debt. The carrying amounts of these items, other than
long-term debt, approximate their fair market value due to their short maturity.
As of December 31, 1996, the fair value of the Company's long-term debt
(determined primarily by broker quotes) was $307,759,000 compared to its
carrying value of $310,976,000. During 1996, the Company did not hold any
material derivative financial instruments.
-65-
<PAGE>
2. ACQUISITIONS AND INVESTMENTS IN UNCONSOLIDATED AFFILIATES.
During 1996, 1995 and 1994, the Company acquired or made equity investments in
the following businesses:
<TABLE>
<CAPTION>
Date Industry Percentage
Business Acquired Segment Ownership
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CUNA Service Group, Inc. December 1996 Payment Services 100.0%
Creditel of Canada Limited September 1996 International 100.0%
CDB Infotek August 1996 Insurance 70.0%
Transax plc (U.K.) June 1996 International 100.0% /1/
Collective Credit Bureaus Ltd. (Canada) May 1996 International 100.0%
Professional Test Administrators, Inc. April 1996 Insurance 100.0%
Market Knowledge, Inc. January 1996 Credit 100.0%
DICOM S.A. (Chile) December 1995 International 50.0% /2/
TecniCob S.A. (France) July 1995 Payment Services 100.0%
The Infocheck Group Limited (U.K.) July 1995 International 100.0%
UCB Services, Inc. April 1995 Credit 100.0%
Medical Review Systems, L.P. March 1995 General 100.0% /4/
Vallance and Associates, Inc. February 1995 Insurance 100.0%
Osborn Laboratories, Inc. November 1994 Insurance 100.0%
UAPT-Infolink plc (U.K.) October 1994 International 100.0%
Electronic Tabulating Service September 1994 General 100.0% /4/
DICOM S.A. (Chile) August 1994 International 25.0%
Canadian Bonded Credits August 1994 International 100.0%
FBS Software (First Bankcard Systems, Inc.) July 1994 Payment Services 100.0%
First Security Processing Services July 1994 Payment Services 100.0%
Organizacion Veraz (Argentina) May 1994 International 33.3%
ASNEF-Equifax Servicios de Informacion
de Credito, S.L. (Spain) May 1994 International 49.0%
HealthChex May 1994 General 100.0% /4/
Programming Resources Company April 1994 Insurance 100.0%
Transax plc (U.K.) April 1994 International 50.1% /3/
Charlotte Credit Bureau February 1994 Credit 100.0%
Cooperative Healthcare Networks January 1994 General 100.0% /4/
</TABLE>
/1/Increased to 100.0% from the 50.1% ownership position acquired in 1994 and
1992.
/2/Increased to 50.0% from the 25.0% ownership position acquired in 1994.
/3/Increased to 50.1% from the 20.0% ownership position acquired in 1992.
/4/Divested in the fourth quarter, 1996 (Note 3).
In 1996, in addition to the businesses above, the Company acquired the credit
files of seven credit bureaus located in the United States. These business and
credit file acquisitions were accounted for as purchases, and had an aggregate
purchase price of $156,416,000, with $102,847,000 allocated to goodwill,
$21,531,000 to purchased data files, and $35,903,000 to other assets (primarily
purchased software).
Their results of operations have been included in the consolidated statements of
income from the dates of acquisition and were not material. They were purchased
using a combination of cash totaling $154,874,000 and notes payable to sellers
of $1,542,000. Additional consideration may be paid for certain of the
acquisitions based on their future operating performance.
-66-
<PAGE>
The 1995 acquisitions of greater than 50% ownership were accounted for as
purchases, and had an aggregate purchase price of $28,205,000, with $33,147,000
allocated to goodwill and $11,337,000 to other assets (primarily purchased
software). Their results of operations have been included in the consolidated
statements of income from the dates of acquisition and were not material. They
were purchased using a combination of cash totaling $14,836,000 and notes
payable to sellers of $13,369,000. Additional consideration may be paid for
certain of the acquisitions based on their future operating performance.
During 1995, the Company increased its investment in DICOM S.A. from 25% to 50%
at a total cost of $11,502,000, and made investments in several other
unconsolidated affiliates totaling $2,564,000. These investments, accounted for
under the equity method, were purchased with cash and recorded as other assets.
The 1994 acquisitions of greater than 50% ownership were accounted for as
purchases, and had an aggregate purchase price of $247,352,000, with
$212,765,000 allocated to goodwill, $19,987,000 to purchased data files, and
$37,883,000 to other assets (primarily purchased software). Their results of
operations have been included in the consolidated statements of income from the
dates of acquisition. They were purchased using a combination of cash totaling
$153,143,000, notes and deferred payments of $16,974,000, and the reissuance of
treasury shares with a market value of $77,235,000.
The 1994 acquisitions of less than 50% ownership were accounted for under the
equity method and had an aggregate purchase price of $15,303,000. They were
purchased with cash and recorded as other assets.
3. ASSET IMPAIRMENT AND DIVESTITURES.
In accordance with Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of," in June 1996 the Company recorded a pre-tax loss of $10,313,000
to write off certain intangible assets in the Healthcare Administrative Services
business unit in its General Information Services segment.
During the fourth quarter of 1996, the Company sold all of the healthcare
information business units from its General Information Services industry
segment. Cash proceeds, net of related divestiture costs, totaled $49,081,000
and resulted in an $11,564,000 gain recorded in other income ($1,631,000 after
tax, or $.01 per share).
During the third quarter of 1995, the Company sold its two market research
businesses in the General Information Services segment, Elrick & Lavidge and
Quick Test. Cash proceeds from these sales totaled $14,868,000 and resulted in
an immaterial gain, recorded in other income.
4. LOTTERY CONTRACT DISPUTE, LITIGATION AND SETTLEMENT.
High Integrity Systems, Inc. (HISI), a Company subsidiary, entered into a
contract in July 1992 to provide lottery services to the state of California,
whereby HISI agreed to provide a system to automate the processing of instant
lottery tickets and a system to sell on-line game tickets through 10,000 low-
volume terminals.
On April 26, 1993, the California State Lottery (CSL) filed suit against HISI in
Superior Court, Sacramento
-67-
<PAGE>
County, California, with said complaint amended May 7, 1993, naming Equifax
Inc., et al. and Federal Insurance Company as additional defendants. The CSL
sought unspecified damages for alleged breach of contract and injunctive relief.
On May 7, 1993, HISI filed a cross-complaint against the CSL seeking
compensatory and general damages in an amount not less than $65 million and
special and consequential damages in an amount not less than $100 million
alleging breach of contract and seeking recovery of the reasonable value of the
labor and materials expended on behalf of the CSL based on the theory of quantum
meruit and unjust enrichment.
In September 1993, the Company recorded a provision of $48,438,000 ($30,939,000
after tax, or $.21 per share) related to the lottery contract to write down data
processing equipment and other assets to their estimated net realizable value
and to accrue for estimated costs related to litigation with the CSL.
On July 14, 1995, the CSL and HISI jointly announced a renewed business
agreement which allowed the litigation between the parties to be settled pending
execution of the terms of the contract. On November 9, 1995, the CSL and HISI
finalized the terms of the reinstated contract. The final settlement was
approved by the trial court on December 19, 1995, and provides that the CSL and
HISI shall file dismissals with prejudice of their respective claims no later
than 365 days following the trial courts approval. The CSL and HISI dismissals
with prejudice of their respective claims were entered by the court on December
17, 1996.
The settlement provides for a reinstated contract whereby HISI will install its
system to automate the processing of instant lottery tickets, with the CSL
purchasing 6,700 terminals and related security hardware, and licensing various
software applications developed to support the system from HISI for $25,000,000.
In the fourth quarter of 1995, the Company recorded a credit of $19,665,000
($11,996,000 after tax, or $.08 per share) to reflect the financial impact of
this settlement net of related legal expenses and additional costs to be
incurred by the Company to complete the system software and install the
terminals. Under the reinstated contract, HISI will initially install a minimum
of 6,000 terminals with HISI retaining an option to install up to 4,000
additional terminal locations, with CSL approval. HISI is also guaranteed to
receive 66 months of revenue for each of the 6,000 terminals at the rate of 5%
on each dollar of lottery ticket sales occurring from each terminal. If HISI
completes the system and acceptance testing within specified dates, an incentive
payment of up to $4,000,000 may be earned. HISI and the CSL have established an
oversight committee and engaged an independent technical adviser who will
consult in the design and implementation of acceptance testing and start-up
activities.
On February 6, 1996, HISI and GTECH Corporation (GTECH) entered into an
agreement whereby HISI subcontracted many of its obligations under the
reinstated contract to GTECH. This subcontract provides for a one-time payment
of $58,000,000 by GTECH to HISI, and also provides that future payments received
by HISI from the CSL for lottery ticket sales and incentives earned be paid to
GTECH. The Company received the $58,000,000 payment from GTECH and recognized
$5,400,000 in revenue related to the subcontract in 1996. The $52,600,000
remaining balance will be recognized as revenue over the term of the reinstated
CSL contract, net of related expenses. The current portion of the remaining
balance is included in other current liabilities, and the non-current portion is
recorded as long-term deferred revenue.
-68-
<PAGE>
5. LONG-TERM DEBT AND SHORT-TERM BORROWINGS.
Long-term debt at December 31, 1996 and 1995 is as follows:
<TABLE>
<CAPTION>
(in thousands) 1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Senior Notes, 6.5%, due 2003, net of unamortized
discount of $663 in 1996 and $765 in 1995 $199,337 $199,235
Borrowings under revolving credit facility, varying
interest rate, 5.89% at December 31, 1996 60,000 --
Term loan, varying interest rate, repaid in 1996 -- 50,000
Term loan, denominated in Pounds Sterling, varying
interest rate, 6.63% at December 31, 1996, due 2000 34,250 31,890
Other 17,389 23,541
- --------------------------------------------------------------------------------
310,976 304,666
Less current maturities 4,984 2,001
- --------------------------------------------------------------------------------
$305,992 $302,665
- --------------------------------------------------------------------------------
</TABLE>
The Company has available a committed $550 million revolving credit facility
with a group of commercial banks that expires August 2000. The agreement
provides interest rate options tied to Base Rate, LIBOR, or Money Market
indexes, and contains certain financial covenants related to fixed charge
coverage, funded debt to cash flow and limitations on subsidiary indebtedness.
Scheduled maturities of long-term debt during the five years subsequent to
December 31, 1996, are as follows: $4,984,000 in 1997, $9,960,000 in 1998,
$2,164,000 in 1999, $94,361,000 in 2000 and none in 2001.
Short-term borrowings at December 31, 1996, consist of $55,506,000 in notes
payable to banks, and have a weighted average interest rate of 6.40%. These
notes are primarily denominated in Pounds Sterling.
6. INCOME TAXES.
The Company records deferred income taxes using enacted tax laws and rates for
the years in which the taxes are expected to be paid. Deferred income tax
assets and liabilities are recorded based on the differences between the
financial reporting and income tax bases of assets and liabilities.
The provision for income taxes consists of the following:
<TABLE>
<CAPTION>
(in thousands) 1996 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Current:
Federal $117,905 $69,274 $75,736
State 18,872 14,548 13,904
Foreign 8,423 7,914 10,713
- --------------------------------------------------------------------------------
145,200 91,736 100,353
- --------------------------------------------------------------------------------
Deferred:
Federal (20,111) 8,161 (10,774)
State (827) 1,163 (1,437)
Foreign 1,684 528 (1,011)
- --------------------------------------------------------------------------------
(19,254) 9,852 (13,222)
- --------------------------------------------------------------------------------
Total $125,946 $101,588 $87,131
- --------------------------------------------------------------------------------
</TABLE>
-69-
<PAGE>
The provision for income taxes is based upon income before income taxes as
follows:
<TABLE>
<S> <C> <C> <C>
(in thousands) 1996 1995 1994
- ------------------------------------------------------------------------------
United States $274,139 $232,871 $191,332
Foreign 29,424 16,367 16,145
- ------------------------------------------------------------------------------
$303,563 $249,238 $207,477
- ------------------------------------------------------------------------------
<CAPTION>
The provision for income taxes is reconciled with the federal statutory rate as
follows:
<S> <C> <C> <C>
(dollars in thousands) 1996 1995 1994
- ------------------------------------------------------------------------------
Federal statutory rate 35.0% 35.0% 35.0%
- ------------------------------------------------------------------------------
Provision computed at federal
statutory rate $106,247 $ 87,233 $ 72,617
State and local taxes, net of
federal tax benefit 11,729 10,212 8,104
Other 7,970 4,143 6,410
- ------------------------------------------------------------------------------
$125,946 $101,588 $ 87,131
- ------------------------------------------------------------------------------
<CAPTION>
Components of the Company's deferred income tax assets and liabilities at
December 31, 1996 and 1995, are as follows:
<S> <C> <C>
(in thousands) 1996 1995
- ------------------------------------------------------------------------------
Deferred income tax assets:
Reserves and accrued expenses $ 37,312 $ 32,720
Postretirement benefits 31,668 32,868
Employee compensation programs 21,202 15,561
Deferred revenue 20,532 700
Other 15,711 11,757
- ------------------------------------------------------------------------------
126,425 93,606
- ------------------------------------------------------------------------------
Deferred income tax liabilities:
Data files and other assets (53,352) (41,300)
Depreciation (4,354) (4,401)
Pension expense (5,301) (7,128)
Safe harbor lease agreements (1,780) (3,557)
Other (15,973) (11,419)
- ------------------------------------------------------------------------------
(80,760) (67,805)
- ------------------------------------------------------------------------------
Net deferred income tax asset $ 45,665 $ 25,801
- ------------------------------------------------------------------------------
<CAPTION>
The Company's deferred income tax assets and liabilities at December 31, 1996
and 1995, are included in the balance sheet as follows:
(in thousands) 1996 1995
- ------------------------------------------------------------------------------
<S> <C> <C>
Deferred income tax assets $36,999 $30,594
Other assets 15,323 4,454
Other long-term liabilities (6,657) (9,247)
- ------------------------------------------------------------------------------
Net deferred income tax asset $45,665 $25,801
- ------------------------------------------------------------------------------
</TABLE>
<PAGE>
Accumulated undistributed retained earnings of Canadian subsidiaries amounted to
approximately $109,047,000 at December 31, 1996. No provision for Canadian
withholding taxes or United States federal income taxes is made on these
earnings because they are considered by management to be permanently invested in
those subsidiaries and, under the tax laws, are not subject to such taxes until
distributed as dividends. If the earnings were not considered permanently
invested, approximately $6,543,000 of deferred income taxes would have been
provided. Such taxes, if ultimately paid, may be recoverable as foreign tax
credits in the United States.
7. SHAREHOLDERS EQUITY.
Common and preferred stock. In May 1996 the Company's shareholders approved a
Board of Directors resolution that increased the authorized common stock of the
Company from 250 million to 300 million shares. The shareholders also approved
another Board of Directors resolution to authorize 10 million shares of blank
check preferred stock.
Stock split and rights plan. In October 1995, the Company's Board of Directors
approved a two-for-one stock split payable December 15, 1995, to shareholders of
record on November 24, 1995. Accordingly, all share and per share data have been
restated to give effect to this split.
Also in October 1995, the Company's Board of Directors adopted a Shareholder
Rights Plan (Rights Plan). The Rights Plan contains provisions to protect the
Company's shareholders in the event of an unsolicited offer to acquire the
Company, including offers that do not treat all shareholders equally, the
acquisition in the open market of shares constituting control without offering
fair value to all shareholders, and other coercive, unfair or inadequate
takeover bids and practices that could impair the ability of the Board of
Directors to represent shareholders' interests fully. Pursuant to the Rights
Plan, the Board of Directors declared a dividend of one Share Purchase Right (a
Right) for each outstanding share of the Company's common stock, with
distribution to be made to shareholders of record as of November 24, 1995. The
Rights, which will expire in November 2005, initially will be represented by,
and trade together with, the Company's common stock. The Rights are not
currently exercisable and do not become exercisable unless certain triggering
events occur. Among the triggering events is the acquisition of 20% or more of
the Company's common stock by a person or group of affiliated or associated
persons. Unless previously redeemed, upon the occurrence of one of the specified
triggering events, each Right that is not held by the 20% or more shareholder
will entitle its holder to purchase one share of common stock or, under certain
circumstances, additional shares of common stock at a discounted price.
Treasury shares. During 1996, 1995 and 1994, the Company repurchased 4,614,000,
6,847,000 and 4,780,000, respectively, of its own common shares through open
market transactions at an aggregate cost of $105,550,000, $132,668,000 and
$57,985,000, respectively. During 1995, the Company's Board of Directors
authorized an additional $250,000,000 in share repurchases, and at December 31,
1996, approximately $52,000,000 remained available for future purchases. During
1994, the Company reissued 5,417,000 treasury shares in connection with four
acquisitions (Note 2).
In April 1993, the Company established the Equifax Inc. Employee Stock Benefits
Trust to fund various employee benefit plans and compensation programs. In
November 1993, the Company transferred 6,200,000 treasury shares to the Trust.
During the first quarter of 1994, the Company transferred 600,000 treasury
shares to another employee benefits trust. Shares held by the trusts are not
considered outstanding for earnings per share calculations until released to the
employee benefit plans or programs. During 1996 and 1995, 166,702 and 80,720
shares, respectively, were transferred from the Employee Stock Benefits Trust
and used for performance share awards, stock option exercises and restricted
share
<PAGE>
grants.
Stock options. The Company's shareholders have approved several stock option
plans which provide that qualified and nonqualified options may be granted to
officers and employees at exercise prices not less than market value on the date
of grant. Generally, options vest proportionately over a four-year period and
are exercisable for ten years from grant date. Grants in 1995 included 2,913,000
options awarded under programs that included essentially all full-time salaried
employees. Those grants all vested in 1996 and are exercisable through January
2000. Certain of the plans also provide for awards of restricted shares of the
Company's common stock. At December 31, 1996, there were 4,965,000 shares
available for future option grants and restricted stock awards.
A summary of changes in outstanding options and the related weighted average
exercise price per share is as follows (shares in thousands):
<TABLE>
<CAPTION>
1996 1995 1994
-------- -------- --------
Shares Avg. Price Shares Avg. Price Shares Avg. Price
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance, beginning of year 7,987 $12.21 5,874 $ 9.98 6,270 $ 9.28
Granted:
At market price 915 $18.78 4,799 $14.33 1,376 $12.36
In excess of market price 1,092 $25.14 -- -- -- --
Canceled (382) $14.51 (848) $13.29 (354) $ 9.95
Exercised (2,086) $12.73 (1,838) $10.06 (1,418) $ 9.25
- ---------------------------------------------------------------------------------------------------
Balance, end of year 7,526 $14.62 7,987 $12.21 5,874 $ 9.98
- ---------------------------------------------------------------------------------------------------
Exercisable at end of year 4,412 $13.30 2,561 $ 9.87 2,670 $ 9.26
- ---------------------------------------------------------------------------------------------------
</TABLE>
The following table summarizes information about stock options outstanding at
December 31, 1996 (shares in thousands):
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
----------------------------------- -------------------------
Wgtd. Avg.
Remaining Weighted Weighted
Contractual Average Average
Range of Exercise Prices Shares Life In Years Exercise Price Shares Exercise Price
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$5.74-$9.44 1,157 4.2 $ 8.55 1,157 $ 8.55
$9.94-$14.13 2,068 6.0 $11.11 1,411 $10.90
$14.31-$16.25 2,367 6.1 $14.34 1,289 $14.34
$18.63-$27.94 1,934 9.0 $22.34 555 $26.92
- ----------------------------------------------------------------------------------------------
7,526 6.5 $14.62 4,412 $13.30
- ----------------------------------------------------------------------------------------------
<CAPTION>
The weighted average grant date fair value per share of options granted in 1996
and 1995 is as follows:
1996 1995
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Grants at market price $ 6.91 $ 3.46
Grants in excess of market price $ 4.21 --
</TABLE>
<PAGE>
The fair value of each option granted in 1996 and 1995 is estimated on the date
of grant using the Black-Scholes option pricing model with the following
assumptions:
<TABLE>
<CAPTION>
1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Dividend yield 1.8% 2.2%
Expected volatility 42.3% 33.1%
Risk-free interest rate 5.1% 7.3%
Expected life in years 4.1 2.8
</TABLE>
Performance share plan. The Company has a performance share plan for certain
key officers that provides for distribution of the Company's common stock at the
end of three-year measurement periods based upon the growth in earnings per
share and certain other criteria. Recipients may elect to receive up to 50
percent of their distribution in cash based on the Company's common stock price
at the end of the measurement period. The total expense under the plan was
$11,200,000 in 1996, $9,870,000 in 1995 and $3,987,000 in 1994. At December 31,
1996, 878,619 shares of common stock were available for future awards under the
plan. Other information regarding performance share units is presented below:
<TABLE>
<CAPTION>
1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Units awarded 356,000 366,000
Award date fair value per unit $ 18.63 $ 14.31
Units outstanding, end of year 893,028 988,332
</TABLE>
Pro forma information. During 1996 the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based Compensation."
In accordance with the provisions of SFAS No. 123, the Company has elected to
apply APB Opinion No. 25 and related Interpretations in accounting for its stock
option and performance share plans. Accordingly, the Company does not recognize
compensation cost in connection with its stock option plans, and records
compensation expense related to its performance share plan based on the current
market price of the Company's common stock and the extent to which performance
criteria are being met. If the Company had elected to recognize compensation
cost for these plans based on the fair value at grant date as prescribed by SFAS
No. 123, net income and net income per share would have been reduced to the pro
forma amounts indicated in the table below (in thousands, except per share
amounts):
<TABLE>
<CAPTION>
1996 1995
------------------- -------------------
Reported Pro forma Reported Pro forma
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Net income $177,617 $172,787 $147,650 $140,798
- ----------------------------------------------------------------
Net income per share $ 1.22 $ 1.19 $ 0.98 $ 0.93
- ----------------------------------------------------------------
</TABLE>
Because the SFAS No. 123 fair value disclosure requirements apply only to
options and performance share units granted after December 31, 1994, the
resulting pro forma compensation cost may not be representative of that to be
expected in future years.
8. EMPLOYEE BENEFITS.
The Company and its subsidiaries have non-contributory qualified retirement
plans covering most salaried employees, including certain employees in Canada.
Under the plans, retirement benefits are primarily
<PAGE>
a function of years of service and the level of compensation during the final
years of employment. Total pension expense for all qualified plans was
$8,350,000 in 1996, $7,275,000 in 1995 and $7,143,000 in 1994.
U.S. retirement plan. The following table sets forth the U.S. plan's funded
status at December 31, 1996 and 1995:
<TABLE>
<CAPTION>
(in thousands) 1996 1995
- ----------------------------------------------------------------------
<S> <C> <C>
Accumulated plan benefits:
Vested benefits $328,496 $320,784
Nonvested benefits 9,487 10,286
- ----------------------------------------------------------------------
337,983 331,070
Effect of projected future compensation levels 27,220 41,680
- ----------------------------------------------------------------------
Projected benefit obligation 365,203 372,750
Plan assets at fair value 373,362 332,726
- ----------------------------------------------------------------------
Plan assets in excess of (less than) projected
benefit obligation 8,159 (40,024)
Unrecognized net (gains) losses (3,653) 38,610
Prior service cost not yet recognized in period
pension cost 4,850 6,488
Net asset at transition being amortized (62) (528)
- ----------------------------------------------------------------------
Prepaid pension cost $ 9,294 $ 4,546
- ----------------------------------------------------------------------
</TABLE>
The plan's assets consist primarily of listed common stocks and fixed income
obligations. At December 31, 1996, the plans assets included 980,355 shares of
the Company's common stock with a market value of approximately $30,023,000.
Pension expense for the plan includes the following components:
<TABLE>
<CAPTION>
(in thousands) 1996 1995 1994
- ---------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost $ 7,465 $ 5,627 $ 7,694
Interest cost on projected benefit
obligation 26,692 26,805 24,058
Actual return on plan assets (53,065) (58,539) (2,064)
Net amortization and deferrals 26,960 32,995 (23,168)
- ---------------------------------------------------------------------------------
Pension expense $ 8,052 $ 6,888 $ 6,520
- ---------------------------------------------------------------------------------
</TABLE>
Assumptions used in the accounting for the U.S. Retirement Plan are as follows:
<TABLE>
<CAPTION>
1996 1995 1994
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Discount rate used to determine projected
benefit obligation at December 31 7.5% 7.25% 8.75%
Rate of increase in future compensation levels 4.25% 4.25% 5.0%
Expected long-term rate of return on
plan assets 9.5% 9.5% 9.0%
</TABLE>
Canadian retirement plan. The Company's Canadian subsidiaries also have a
retirement plan that covers approximately 800 employees. The plans assets
consist primarily of fixed income obligations and equity securities, and their
aggregate fair market value approximates the projected benefit obligation at
December 31, 1996.
<PAGE>
Supplemental retirement plan. The Company maintains a supplemental executive
retirement program for certain key employees. The plan, which is unfunded,
provides supplemental retirement payments based on salary and years of service.
The expense for this plan was $3,517,000 in 1996, $2,982,000 in 1995 and
$2,609,000 in 1994. The accrued liability for this plan at December 31, 1996 and
1995, was $24,379,000 and $20,926,000, respectively, and is included in other
long-term liabilities in the accompanying balance sheets.
Employee retirement savings plans. The Company's retirement savings plans
provide for annual contributions, within specified ranges, determined at the
discretion of the Board of Directors for the benefit of eligible employees in
the form of cash or shares of the Company's common stock. The expense for these
plans was $4,544,000 in 1996, $4,454,000 in 1995 and $4,739,000 in 1994.
Postretirement benefits. The Company provides certain healthcare and life
insurance benefits for eligible retired employees. Healthcare benefits are
provided through a trust, while life insurance benefits are provided through an
insurance company. Substantially all of the Company's U.S. employees may become
eligible for these benefits if they reach normal retirement age while working
for the Company and satisfy certain years of service requirements. The Company
accrues the cost of providing postretirement benefits for medical and life
insurance coverage over the active service period of the employee.
The following table presents a reconciliation of the plans status at December
31, 1996 and 1995:
<TABLE>
<CAPTION>
(in thousands) 1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees $ 64,097 $ 71,581
Fully eligible active plan participants 6,391 9,730
Other active participants 8,556 10,340
- --------------------------------------------------------------------------------
79,044 91,651
Plan assets at fair value -- --
- --------------------------------------------------------------------------------
Accumulated benefit obligation in excess of
plan assets (79,044) (91,651)
Unrecognized prior service credit due to plan
amendments (11,930) (10,103)
Unrecognized net losses 8,274 17,462
- --------------------------------------------------------------------------------
(82,700) (84,292)
Less current portion (3,300) (3,407)
- --------------------------------------------------------------------------------
Accrued postretirement benefit obligation $(79,400) $(80,885)
- --------------------------------------------------------------------------------
<CAPTION>
Net periodic postretirement benefit expense includes the following components:
(in thousands) 1996 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost $ 1,824 $ 2,079 $ 2,264
Interest cost on accumulated benefit obligation 5,418 6,439 5,908
Amortization of prior service credit (3,913) (3,315) (3,839)
Amortization of losses 174 -- 656
- --------------------------------------------------------------------------------
Net periodic postretirement benefit expense $ 3,503 $ 5,203 $ 4,989
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
Assumptions used in the computation of postretirement benefit expense and the
related obligation are as follows:
<TABLE>
<CAPTION>
1996 1995 1994
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Discount rate used to determine accumulated
postretirement benefit obligation
at December 31 7.5% 7.25% 8.75%
Initial healthcare cost trend rate 10.5% 11.0% 11.0%
Ultimate healthcare cost trend rate 6.0% 6.0% 6.0%
Year ultimate healthcare cost trend rate reached 2005 2005 2005
</TABLE>
If the healthcare cost trend rate were increased 1% for all future years, the
accumulated postretirement benefit obligation as of December 31, 1996, would
have increased 12.2 percent. The effect of such a change on the aggregate of
service and interest cost for 1996 would have been an increase of 8.4 percent.
The Company continues to evaluate ways in which it can better manage these
benefits and control their costs. Any changes in the plan, revisions to
assumptions or changes in the Medicare program that affect the amount of
expected future benefits may have a significant effect on the amount of the
reported obligation and future annual expense.
9. COMMITMENTS AND CONTINGENCIES.
Leases. The Company's operating leases involve principally office space and
office equipment. Rental expense relating to these leases was $52,796,000 in
1996, $46,898,000 in 1995 and $46,534,000 in 1994. In March 1994 the Company
sold and leased back under operating leases certain land and buildings. The net
sales price of $55.1 million approximated the net book value of the related
assets.
Future minimum payment obligations for noncancelable operating leases exceeding
one year are as follows as of December 31, 1996:
<TABLE>
<CAPTION>
(in thousands) Amount
- -------------------------------------------------------------------------------
<S> <C>
1997 $ 37,546
1998 31,150
1999 24,928
2000 20,242
2001 16,665
Thereafter 107,931
- -------------------------------------------------------------------------------
$238,462
- -------------------------------------------------------------------------------
</TABLE>
Agreement with computer sciences corporation. The Company has an agreement with
Computer Sciences Corporation (CSC) under which CSC-owned credit bureaus and
certain CSC affiliate bureaus utilize the Company's credit database service.
CSC and these affiliates retain ownership of their respective credit files and
the revenues generated by their credit reporting activity. The Company receives
a processing fee for maintaining the database and for each report supplied. The
agreement expires in 1998, is renewable at the option of CSC for successive ten-
year periods, and provides CSC with an option to sell its collection and credit
reporting businesses to the Company. The option is currently exercisable and
expires in 2013. In the event CSC does not exercise its option to sell and does
not renew the agreement, or if there is a change in control of CSC, the Company
has the option to
<PAGE>
purchase CSC's collection and credit reporting businesses. The option price is
determined, for all purposes, in accordance with the following schedule: on or
before July 31, 1998, at the price determined by certain financial formulas, and
after July 31, 1998, at appraised value. The Company currently estimates the
option price determined by the financial formulas to be approximately $400
million. In its annual report for the fiscal year ended March 29, 1996, CSC
stated that the option price "approached $500 million at March 29, 1996." The
Company periodically evaluates the estimated fair value of the CSC collection
and credit reporting businesses using estimates of their discounted cash flows.
Based on this analysis, at December 31, 1996, the fair value of these businesses
is not less than their potential purchase price.
Data processing services agreement. In April 1993, the Company entered into a
ten-year agreement to outsource a portion of its computer data processing
operations and related functions to Integrated Systems Solutions Corporation
(ISSC), a subsidiary of IBM. The Company currently estimates the future annual
obligation under this agreement to be approximately $70,000,000 per year,
although this amount could be more or less depending upon various factors such
as the inflation rate, the introduction of significant new technologies or
changes in the Company's data processing needs as a result of acquisitions or
divestitures. Under certain circumstances (e.g., a change in control of the
Company), the Company may cancel the ISSC agreement; however, the agreement
provides that the Company must pay a significant penalty in the event of such a
cancellation.
Change in control agreements. The Company has agreements with ten of its
officers which provide certain severance pay and benefits in the event of a
"change in control" of the Company, which is defined as the acquisition of more
than 50% of the Company's outstanding common stock by an entity or a concerted
group of entities. In the event of a "change in control," the Company's
performance share and restricted stock plans provide that all shares designated
for future distribution will become fully vested and payable, subject to the
achievement of certain levels of growth in earnings per share and certain other
criteria. At December 31, 1996, the maximum contingent liability under the
agreements and plans was approximately $26,146,000.
Litigation. A number of lawsuits seeking damages are brought against the
Company each year, largely as a result of reports issued by the Company. The
Company provides for estimated legal fees and settlements relating to pending
lawsuits. In the opinion of management, the ultimate resolution of these matters
will not have a materially adverse effect on the Company's financial position,
liquidity or results of operations.
10. RESTRUCTURING.
In the fourth quarter of 1995, the Company initiated a restructuring program
designed to streamline operations by reducing staffing levels and consolidating
facilities. Staffing levels were reduced by approximately 750 employees
primarily in the Insurance Services, General Information Services and Credit
Services Segments. The total cost of this program was $19,572,000 ($11,939,000
net of tax, or $.08 per share). Components of the restructuring provision and
utilization through December 31, 1996, are as follows:
<PAGE>
<TABLE>
<CAPTION>
Severance &
Termination Asset Lease
(in thousands) Benefits Write-offs Costs Total
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Original provision $13,813 $ 2,994 $ 2,765 $ 19,572
Utilized in 1995 (2,521) (2,994) (915) (6,430)
- ----------------------------------------------------------------------------
Balance, December 31, 1995 11,292 -- 1,850 13,142
Utilized in 1996 (9,470) -- (1,652) (11,122)
- ----------------------------------------------------------------------------
Balance, December 31, 1996 $ 1,822 $ -- $ 198 $ 2,020
- ----------------------------------------------------------------------------
</TABLE>
The reserve balance at December 31, 1996, is included in other current
liabilities in the accompanying balance sheets.
<PAGE>
11. QUARTERLY FINANCIAL DATA (UNAUDITED).
Quarterly operating revenue and operating income by industry segment and other
summarized quarterly financial data for 1996 and 1995 are as follows (in
thousands, except per share amounts):
<TABLE>
<CAPTION>
1996 First Second Third Fourth
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue:
Credit Services $138,690 $146,950 $144,764 $150,501
Payment Services 71,598 79,252 84,732 103,744
International Operations 54,646 57,796 58,992 71,909
Insurance Services 135,755 144,958 151,593 154,810
General Information Services 22,322 16,659 14,905 6,647
- -------------------------------------------------------------------------------------------
$423,011 $445,615 $454,986 $487,611
- -------------------------------------------------------------------------------------------
Operating income (loss):
Credit Services $47,539 $51,288 $52,145 $52,836
Payment Services 11,815 14,414 16,051 24,601
International Operations 4,012 7,901 10,764 11,628
Insurance Services 9,858 13,116 14,790 12,942
General Information Services 3,209 (10,586)/1/ (2,299) 496
- -------------------------------------------------------------------------------------------
Operating Contribution 76,433 76,133 91,451 102,503
General Corporate Expense (10,509) (11,490) (10,410) (9,693)
- -------------------------------------------------------------------------------------------
$65,924 $64,643 $81,041 $92,810
- -------------------------------------------------------------------------------------------
Income before income taxes $61,133 $68,243 $75,998 $98,189
- -------------------------------------------------------------------------------------------
Net income $36,845 $41,130 $45,804 $53,838
- -------------------------------------------------------------------------------------------
Net income per common share $0.25 $0.28 $0.32 $0.37
- -------------------------------------------------------------------------------------------
1995 First Second Third Fourth
- -------------------------------------------------------------------------------------------
Revenue:
Credit Services $119,320 $125,682 $129,836 $137,885
Payment Services 60,878 68,831 72,645 82,028
International Operations 48,932 50,199 55,532 56,381
Insurance Services 127,099 132,439 130,362 127,046
General Information Services 27,964 30,255 23,652 15,992
- -------------------------------------------------------------------------------------------
$384,193 $407,406 $412,027 $419,332
- -------------------------------------------------------------------------------------------
Operating income (loss):/2/
Credit Services $40,615 $42,123 $45,069 $49,057
Payment Services 11,003 15,660 16,090 20,707
International Operations 2,280 4,507 7,939 5,233
Insurance Services 9,558 11,141 11,353 2,669
General Information Services (1,481) (2,275) (3,560) 10,828
- -------------------------------------------------------------------------------------------
Operating Contribution 61,975 71,156 76,891 88,494
General Corporate Expense (8,740) (7,638) (10,791) (8,408)
- -------------------------------------------------------------------------------------------
$53,235 $63,518 $66,100 $80,086
- -------------------------------------------------------------------------------------------
Income before income taxes $50,492 $60,586 $62,935 $75,225
- -------------------------------------------------------------------------------------------
Net income $29,472 $35,814 $37,981 $44,383
- -------------------------------------------------------------------------------------------
Net income per common share $0.19 $0.23 $0.25 $0.30
</TABLE>
/1/Includes $10,313 loss related to asset impairment (Note 3).
/2/See Industry Segment Information (Note 12) regarding the effects of
restructuring provision and lottery settlement on fourth quarter 1995 operating
income.
-79-
<PAGE>
12. INDUSTRY SEGMENT INFORMATION.
Industry segment information for 1996, 1995 and 1994 is as follows (dollars in
thousands):
<TABLE>
<CAPTION>
1996 1995 1994
- ----------------------------------------------------------------------------------------------
(dollars in thousands) Amount % Amount % Amount %
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operating revenue:
Credit Services $580,905 32% $512,723 32% $476,397 34%
Payment Services 339,326 19 284,382 17 246,597 17
International Operations 243,343 13 211,044 13 143,371 10
Insurance Services 587,116 33 516,946 32 453,409 32
General Information Services 60,533 3 97,863 6 102,222 7
- ----------------------------------------------------------------------------------------------
$1,811,223 100% $1,622,958 100% $1,421,996 100%
- ----------------------------------------------------------------------------------------------
Operating income (loss):
Credit Services $203,808 59% $176,864 59% $149,867 61%
Payment Services 66,881 19 63,460 21 57,460 24
International Operations 34,305 10 19,959 7 16,458 7
Insurance Services 50,706 15 34,721 12 18,504 8
General Information Services (9,180) (3) 3,512 1 1,024 --
- ----------------------------------------------------------------------------------------------
Operating Contribution 346,520 100% 298,516 100% 243,313 100%
General Corporate Expense (42,102) (35,577) (29,206)
- ----------------------------------------------------------------------------------------------
$304,418 $262,939 $214,107
- ----------------------------------------------------------------------------------------------
Identifiable assets at December 31:
Credit Services $345,432 27% $298,095 28% $293,947 29%
Payment Services 200,479 15 122,925 12 115,929 11
International Operations 369,430 28 307,864 29 293,318 29
Insurance Services 281,141 22 171,499 16 171,904 17
General Information Services 14,155 1 82,874 8 84,352 8
Corporate 92,147 7 70,438 7 61,724 6
- ----------------------------------------------------------------------------------------------
$1,302,784 100% $1,053,695 100% $1,021,174 100%
- ----------------------------------------------------------------------------------------------
</TABLE>
Description of Segments:
Credit Services: Consumer credit reporting information; credit card marketing
services; risk management and collection services; locate services; fraud
detection and prevention services; mortgage loan origination information; and
PC-based marketing systems, geo-demographic systems and mapping tools.
Payment Services: Check warranty and verification services; credit and debit
card authorization and processing; credit card marketing enhancement; and
software products for managing credit card operations.
International Operations: In Canada, consumer and business credit reporting
information; accounts receivable; collection services; and check warranty
services. In Europe (primarily the United Kingdom), credit reporting and
marketing services; credit scoring and modeling services; check warranty
services; and auto lien information. In South America, credit information
services and commercial, financial and medical information.
-80-
<PAGE>
Insurance Services: Underwriting and claims reporting services; inspection and
loss control services; workers' compensation audits; software for commercial
insurers; specimen testing for life and health insurance applicants; on-line
public record information; and employment evaluation services.
General Information Services: Healthcare Information Services, divested in the
fourth quarter of 1996, included electronic claims processing; physician
profiling; claims auditing; claims analysis, administration and utilization
management; electronic remittance; hospital bill audits; and medical credentials
verification. Marketing Services, divested in August 1995, included research
and analysis and custom opinion surveys.
Note to Industry Segment Information:
1. Operating revenue is to unaffiliated customers only.
2. Operating income is operating revenue less operating costs and expenses,
excluding interest expense, other income and income taxes.
3. Depreciation and amortization by industry segment are as follows:
<TABLE>
<CAPTION>
(in thousands) 1996 1995 1994
- ------------------------------------------------------------
<S> <C> <C> <C>
Credit Services $28,439 $26,624 $29,412
Payment Services 9,522 7,000 4,970
International Operations 19,762 16,844 10,986
Insurance Services 18,456 13,514 10,680
General Information Services 6,306 9,361 6,990
Corporate 3,411 3,702 3,458
- ------------------------------------------------------------
$85,896 $77,045 $66,496
- ------------------------------------------------------------
</TABLE>
4. Capital expenditures by industry segment, excluding property and equipment
and other assets acquired in acquisitions, are as follows:
<TABLE>
<CAPTION>
(in thousands) 1996 1995 1994
- ------------------------------------------------------------
<S> <C> <C> <C>
Credit Services $ 27,849 $ 8,225 $ 7,251
Payment Services 32,581 12,719 9,422
International Operations 7,342 4,125 5,306
Insurance Services 22,243 9,487 5,734
General Information Services 1,740 16,800 3,277
Corporate 8,434 7,675 1,346
- ------------------------------------------------------------
$100,189 $59,031 $32,336
- ------------------------------------------------------------
</TABLE>
5. In the second quarter of 1996, the Company recorded a loss related to the
impairment of certain assets (Note 3). In the fourth quarter of 1995, the
Company recorded a restructuring provision (Note 10) and a settlement with
the California State Lottery (Note 4). Operating income by industry segment
decreased (increased) as a result of these items as follows:
-81-
<PAGE>
<TABLE>
<CAPTION>
1996 1995
---- ---------------------------------------------------
Asset Restructuring Lottery
(in thousands) Impairment Provision Settlement Total
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Credit Services $ -- $3,243 $ -- $3,243
Payment Services -- 521 -- 521
International Operations -- 1,716 -- 1,716
Insurance Services -- 9,150 -- 9,150
General Information Services 10,313 4,442 (19,665) (15,223)
Corporate -- 500 -- 500
- ------------------------------------------------------------------------------------------------------------------------------------
$10,313 $19,572 $(19,665) $(93)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
6. Financial information by geographic area is as follows:
<TABLE>
<CAPTION>
1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
(dollars in thousands) Amount % Amount % Amount %
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
United States $1,558,656 86% $1,405,560 87% $1,277,196 90%
Canada 85,832 5 78,952 5 78,277 5
Europe 166,735 9 138,446 8 66,523 5
- ------------------------------------------------------------------------------------------------------------------------------------
$1,811,223 100% $1,622,958 100% $1,421,996 100%
- ------------------------------------------------------------------------------------------------------------------------------------
Operating contribution (loss):
United States $308,650 89% $277,070 93% $228,280 94%
Canada 16,551 5 15,065 5 15,476 6
Europe 18,077 5 5,389 2 (851) --
South America 4,340 1 992 -- 408 --
Other (1,098) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
$346,520 100% $298,516 100% $243,313 100%
- ------------------------------------------------------------------------------------------------------------------------------------
Identifiable assets at December 31:
United States $925,182 71% $737,575 70% $723,466 71%
Canada 87,533 7 70,984 7 109,004 11
Europe 257,564 20 217,903 21 173,054 17
South America 31,873 2 27,233 2 15,650 1
Other 632
- ------------------------------------------------------------------------------------------------------------------------------------
$1,302,784 100% $1,053,695 100% $1,021,174 100%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-82-
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders of Equifax Inc.:
We have audited the accompanying consolidated balance sheets of Equifax Inc. (a
Georgia corporation) and subsidiaries as of December 31, 1996 and 1995, and the
related consolidated statements of income, shareholders' equity and cash flows
for each of the three years in the period ended December 31, 1996. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Equifax Inc. and subsidiaries
as of December 31, 1996 and 1995, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 1996, in
conformity with generally accepted accounting principles.
/s/ARTHUR ANDERSEN LLP
Atlanta, Georgia
February 14, 1997
-83-
<PAGE>
EXHIBIT 21
----------
SUBSIDIARIES
Registrant - Equifax Inc. (a Georgia corporation).
The Registrant owns, directly or indirectly, 100% of the stock of the
following subsidiaries as of March 20, 1997 (all of which are included in the
consolidated financial statements):
State or
Country of
Name of Subsidiary Incorporation
- ------------------ -------------
1nfo Inc. Georgia
Acrofax Inc. Canada
Admast Tax Free Shopping Ltd./(24)/ United Kingdom
Brentorian Ltd./(17)/ United Kingdom
Callcheck Chargecard Ltd./(19)/ United Kingdom
CBI Ventures, Inc./(6)/ Georgia
Central Credit Services Ltd./(22)/ Scotland
Computacheck Ltd./(19)/ United Kingdom
Computer Ventures, Inc./(6)/ Delaware
Corporate Investigation UK Ltd./(22)/ United Kingdom
Credence, Inc. Georgia
Credit Northwest Corporation/(6)/ Washington
Credit Union Card Services, Inc./(5)/ Wisconsin
Dart Telemarketing Ltd./(17)/ United Kingdom
Decision (PTY) Ltd./(23)/ South Africa
Equifax Asia Pacific Holdings, Inc. Georgia
Equifax Card Services, Inc./(12)/ Florida
Equifax Card Services (Madison), Inc./(4)/ Wisconsin
Equifax Check Services, Inc./(12)/ Delaware
<PAGE>
State or
Country of
Name of Subsidiary Incorporation
- ------------------ -------------
Equifax Credit Information Services, Inc. Georgia
Equifax Decision Systems B.V. Netherlands
Equifax de Mexico Sociedad de Informacion
Creditica, S.A./(9)(10)/ Mexico
Equifax Europe Ltd. Georgia
Equifax Europe Ltd./(8)/ United Kingdom
Equifax Europe (U.K.) Ltd./(7)/ United Kingdom
Equifax Government and Special Systems, Inc. Georgia
Equifax Healthcare Information Services, Inc. Georgia
Equifax Holdings (Mexico) Inc. Georgia
Equifax India Private Ltd./(3)/ India
Equifax Information Technology, Inc. Georgia
Equifax Investments (Mexico) Inc. Georgia
Equifax Investments (U.S.) Inc. Georgia
Equifax Luxembourg S.A./(1)(8)/ Luxembourg
Equifax Luxembourg (No. 2) S.A. Luxembourg
Equifax Marketing Decision Systems, Inc. Georgia
Equifax Mauritius Private Limited/(3)/ Mauritius
Equifax Payment Services, Inc./(20)/ Delaware
Equifax Properties, Inc. Georgia
Equifax-Rochester, Inc./(6)/ New York
Equifax Services Inc. Georgia
Equifax South America, Inc. Georgia
Equifax U.K. Finance Ltd./(11)/ United Kingdom
<PAGE>
State or
Country of
Name of Subsidiary Incorporation
- ------------------ -------------
Equifax U.K. Finance (No. 2)/(25)/ United Kingdom
Equifax Ventures, Inc. Georgia
Financial Institution Benefit
Association, Inc./(12)/ District of Columbia
Financial Insurance Marketing Group, Inc./(12)/ District of Columbia
First Bankcard Systems, Inc. Georgia
Freightcheck Information Services Limited/(19)/ United Kingdom
Global Scan Investments Ltd./(14)/ United Kingdom
Global Scan Ltd./(19)/ United Kingdom
Global Scan (USA), Inc./(15)/ Delaware
High Integrity Systems, Inc./(12)/ California
H.P. Information plc/(23)/ United Kingdom
H.P.I. Ltd./(16)/ United Kingdom
Infocheck Computer Services Ltd./(19)/ United Kingdom
Infocheck Credit Indemnity Ltd./(19)/ United Kingdom
Infocheck Direct Ltd./(19)/ United Kingdom
Infocheck Financial Analysis Ltd./(19)/ United Kingdom
Infocheck Insurance Services Ltd./(19)/ United Kingdom
Infocheck On Line Ltd./(19)/ United Kingdom
Infocheck Online Scotland Ltd./(19)/ Scotland
Infocheck Training Services Ltd./(19)/ United Kingdom
Infocredit Ltd./(19)/ United Kingdom
Infolink Decision Services Ltd./(23)/ United Kingdom
Infolink Ltd./(23)/ United Kingdom
<PAGE>
State or
Country of
Name of Subsidiary Incorporation
- ------------------ -------------
Intelligent Terminals Ltd./(17)/ United Kingdom
Intellisys, Inc./(13)/ Georgia
Knowledgelink Ltd./(17)/ United Kingdom
Light Signatures, Inc./(12)/ California
Market Knowledge, Incorporated/(6)/ Illinois
Mid-American Technologies, Inc./(18)/ Kansas
Mutual Indemnity Ltd. Bermuda
Osborn Laboratories, Inc. Delaware
Osborn Laboratories (Canada) Inc./(18)/ Canada
PRC Corporation/(13)/ Georgia
Precision Marketing International Ltd./(8)/ United Kingdom
Professional Test Administrators, Inc./(13)/ Illinois
Retail Credit Management Ltd./(22)/ United Kingdom
School House U.K. Ltd./(22)/ United Kingdom
Scorelink Ltd./(17)/ United Kingdom
S.S.R. Ltd./(16)/ United Kingdom
Stewardship, Inc./(6)/ Mississippi
Taxback Ltd./(24)/ United Kingdom
TecniCob S.A./(7)(8)/ France
The Equifax Database Company Ltd./(7)/ Ireland
The Infocheck Group Ltd./(8)/ United Kingdom
The Kit Factory, Inc./(18)/ Kansas
The Quantum Card Ltd./(19)/ United Kingdom
<PAGE>
State or
Country of
Name of Subsidiary Incorporation
- ------------------ -------------
T.I. Holding Corp. Delaware
Transax Australia plc/(22)/ United Kingdom
Transax France plc/(22)/ United Kingdom
Transax (Ireland) plc/(22)/ Ireland
Transax Ltd./(22)/ New Zealand
Transax plc./(8)/ United Kingdom
Transax pty Ltd./(22)/ Australia
Transax S.N.C./(2)(21)/ France
UAPT-Infolink, plc/(8)/ United Kingdom
Vivat plc/(22)/ United Kingdom
Wincheck Ltd./(19)/ United Kingdom
In addition, Registrant's subsidiary Equifax Services Inc. owns 70% of the stock
of CDB Infotek (California). CDB Infotek owns 100% of the stock of Charles E.
Simon & Company (Delaware) and Innovative Data Services, Inc. (Delaware).
Registrant's Canadian subsidiary Acrofax Inc. owns 84% of the stock of Equifax
Canada Inc. (Canada). Equifax Canada Inc. owns 100% of the stock of Telecredit
Canada, Inc., Equifax Canada (AFX) Inc. (Canadian corporations). In addition,
the Company also manages Equifax Accounts Receivable Services, Inc.
Registrant's subsidiary Equifax South America, Inc. owns 33% of the stock of
Organizacion Veraz, S.A. (Argentina), and, also, owns 99% of the stock of
Equifax de Chile, S.A. (Chile). Equifax de Chile, S.A. owns 50% of the stock of
TICSA (Chile) and 50% of the stock of Dicom S.A. (Chile). Dicom S.A. owns 99%
of the stock of Cobranza Integral S.A. (Chile), 50% of Covidata S.A. (Columbia),
100% of Dial S.A. (Argentina), 100% of Dicom Comercial Ltda. (Chile), 50% of
Dicom Dominicana (Dominican Republic), 60% of Global Data Servicios Integradoes
de Informacion S.A. (Ecuador), 35% of InfoCorp S.A. (Peru), 50% of Infotrade
Argentina S.A. (Argentina), 99% of Infotrade S.A. (Chile), 54% of Softmarket
S.A. (Chile), and 96% of DIPAS S.A. de C.V. which owns 50% of DICOM
Centroamerica, S.A. de C.V.
Registrant's subsidiary Equifax Europe Ltd. (Georgia corporation) owns 49% of
the stock of Precision Marketing Information Ltd. (Ireland) and 49% of the stock
of ASNEF-Equifax Servicios de Informacion de Credito S.L. (Spain). ASNEF-
Equifax owns 50% of the stock of Credinformacoes, Informacoes de Credito, LDA
(Portugal), along with Equifax Decision Systems B.V. which owns 25%.
<PAGE>
Registrant's subsidiary Equifax Europe Ltd. (Georgia) owns 100% of Equifax
Europe (U.K.) Ltd., which owns 100% of the stock of The Infocheck Group Ltd.
(United Kingdom) which owns 22% of the stock of EFIS Ltd.
Registrant's subsidiary Equifax Asia Pacific Holdings, Inc. owns 50% of the
stock of Equifax Venture Infotek Private Limited (India).
Registrant's
- -------------
/(1)/Subsidiary of Acrofax Inc.
/(2)/Subsidiary of Central Credit Services Ltd.
/(3)/Subsidiary of Equifax Asia Pacific Holdings, Inc.
/(4)/Subsidiary of Equifax Card Services, Inc.
/(5)/Subsidiary of Equifax Card Services (Madison), Inc.
/(6)/Equifax Credit Information Services, Inc.
/(7)/Subsidiary of Equifax Europe Ltd. (Georgia corporation)
/(8)/Subsidiary of Equifax Europe (U.K.) Ltd.
/(9)/Subsidiary of Equifax Holdings (Mexico) Inc.
/(10)/Subsidiary of Equifax Investments (Mexico) Inc.
/(11)/Subsidiary of Equifax Luxembourg, S.A.
/(12)/Subsidiary of Equifax Payment Services, Inc.
/(13)/Subsidiary of Equifax Services Inc.
/(14)/Subsidiary of Global Scan Limited
/(15)/Subsidiary of Global Scan Investments Limited
/(16)/Subsidiary of H.P. Information plc
/(17)/Subsidiary of Infolink Ltd.
/(18)/Subsidiary of Osborn Laboratories, Inc.
/(19)/Subsidiary of The Infocheck Group Limited
/(20)/Subsidiary of T.I. Holding Corp.
/(21)/Subsidiary of Transax France plc
/(22)/Subsidiary of Transax plc
/(23)/Subsidiary of UAPT-Infolink plc
/(24)/Subsidiary of Vivat plc
/(25)/Subsidiary of Equifax Inc. and Equifax Luxembourg (No. 2) S.A.
<PAGE>
EXHIBIT 23
----------
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
- -----------------------------------------
As independent public accountants, we hereby consent to the incorporation
of our report included in this Form 10-K into the Company's previously filed
Registration Statements on Form S-3 or Form S-8, File No. 33-40011, File No. 33-
58734, File No. 33-34640, File No. 33-71202, as amended, File No. 33-66728, File
No. 33-71200, File No. 33-82374, File No. 33-86018, File No. 33-86978, File No.
33-58627, File No. 33-63001 and File No. 333-12961.
/s/Arthur Andersen LLP
Atlanta, Georgia
March 27, 1997
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM EQUIFAX INC.
FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED DECEMBER 31, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 49,886
<SECURITIES> 0
<RECEIVABLES> 313,392
<ALLOWANCES> 7,714
<INVENTORY> 0
<CURRENT-ASSETS> 437,038
<PP&E> 286,884
<DEPRECIATION> 164,613
<TOTAL-ASSETS> 1,302,784
<CURRENT-LIABILITIES> 374,679
<BONDS> 305,992
0
0
<COMMON> 213,573
<OTHER-SE> 603,482
<TOTAL-LIABILITY-AND-EQUITY> 1,302,784
<SALES> 1,811,223
<TOTAL-REVENUES> 1,811,223
<CGS> 1,126,741
<TOTAL-COSTS> 1,126,741
<OTHER-EXPENSES> 380,064
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 23,036
<INCOME-PRETAX> 303,563
<INCOME-TAX> 125,946
<INCOME-CONTINUING> 177,617
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 177,617
<EPS-PRIMARY> 1.22
<EPS-DILUTED> 1.22
</TABLE>
