<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 12-31-97 or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from
----------------
to
-------------------------
Commission file number 1-6605
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EQUIFAX INC.
- ----------------------------------------------------------------------------
(Exact name of Registrant as specified in its Charter)
GEORGIA 58-0401110
- ------------------------------------- --------------------------------------
(State of other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1600 Peachtree St., N.W., Atlanta, GA 30309
- -------------------------------------- -------------------------------------
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (404) 885-8000
--------------
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Common Stock
($1.25 Par Value) New York Stock Exchange
----------------- -----------------------
Securities registered pursuant to Section 12(g) of the Act:
None
----
(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. [X]
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 20, 1998: $5,433,254,437.
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 20, 1998
----- -----------------------------
COMMON STOCK, $1.25 PAR VALUE 147,858,905
----------------------------- ---------------
DOCUMENTS INCORPORATED BY REFERENCE
THE PROXY STATEMENT FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL
29, 1998, 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
- ------- --------
Equifax Inc. is a holding company which conducts its business operations through
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 on its domestic and international basis 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." In mid-
1997, the Company divested its insurance services operations which was
accomplished through the spinoff of a subsidiary company to shareholders. 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 share repurchase program.
During 1997, the Company repurchased 4,143,000 shares at a cost of $129.1
million.
In February 1997, the Company acquired two companies, HLS Financial Group and
Foothills Collection Services, risk management companies offering collections
services to the healthcare industry.
In March 1997, the Company acquired the remaining fifty percent interest in
DICOM S.A., a provider of consumer and commercial information in Chile.
The Company sold its National Decision Systems business unit (part of the North
American Information Services segment) in the second quarter of 1997.
In August 1997, the Company spun off of its Insurance Services segment to
shareholders.
Through a joint venture with Asociacion Nacional de Entidades de Financiacion
(ASNEF), the Company in July 1997 acquired Group Incresa S.A., a Spanish
commercial information services company.
In November 1997, the Company entered into a joint venture with Transaction
Technologies Limited, to provide credit card processing services to commercial
banks in India. The Company owns fifty percent in this new venture.
In December 1997, the Company contracted to purchase an additional 1/3 of
Organizacion Veraz S.A., increasing the Company's ownership interest to 66 2/3%.
This transaction was completed in February 1998. Veraz is the largest provider
of financial information in Argentina.
Also, in December 1997, the Company acquired Goldleaf Technologies, Inc., an
electronic banking software company located in Hahira, Georgia.
-1-
<PAGE>
The Company also acquired sixteen credit bureaus during 1997.
Reference is made to acquisitions and investments in unconsolidated affiliates
reported in Note 4 and industry segment information reported in Note 14 of the
Notes to Consolidated Financial Statements, included as Exhibit 13.3 in Part IV,
Item 14 of this report, which are hereby incorporated by reference.
A description of the Company's products or services by industry segment follows:
North American Information Services Segment
- -------------------------------------------
This segment includes Equifax Credit Information Services, Inc. and its wholly-
owned subsidiaries Credit Northwest Corporation; Market Knowledge, Incorporated;
Equifax-Rochester, Inc.; Acrofax Inc.; Equifax Canada Inc. and its wholly-owned
subsidiaries Equifax Canada (AFX) Inc. and Telecredit Canada, Inc.
The Company's principal classes of service for this segment are informational
services for consumer credit reporting purposes and risk management services.
Customers include banks, financial institutions, retailers, 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, mortgage lenders,
hospitals and healthcare administrative companies. Informational services for
consumer credit reporting purposes accounted for 40% of the Company's 1997 total
revenue, as compared with 41% in 1996 and 41% in 1995. Risk management services
accounted for 10% of the Company's 1997 total revenue, as compared with 10% in
1996 and 9% in 1995.
Businesses in this segment primarily furnish consumer credit reporting
information and decision support and credit management services designed to meet
specific customer needs. These services include consumer credit reporting
information, credit marketing services, risk management, locate services, fraud
detection and prevention services and mortgage loan origination information.
Distribution of information to customers is made primarily through electronic
data interfaces.
In the U.S., the Company's consumer credit services operations, including non-
owned affiliate bureaus, compete with two similar automated credit reporting
companies -- Experian Corporation and Trans Union Corporation.
In Canada, financial services include consumer and business credit information,
risk management and check warranty services. Equifax Canada Inc. is the leading
provider of both consumer and commercial credit information.
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.; Equifax India Private Ltd.; Equifax Mauritius Private Limited;
and Tecnicob, S.A.
-2-
<PAGE>
The Company's principal classes of service for this segment are card services
and check services. Card Services include bank and debit card transaction
processing; cardholder support; marketing services; portfolio management and
analysis; facilities management; merchant processing; credit marketing; and risk
management. This class of service accounted for 21% of the Company's 1997
total operating revenue, as compared with 16% in 1996 and 13% in 1995. Check
services, which includes check warranty and verification services; check
management systems; on-line point of sale credit prescreening; customer service;
risk consulting; data exchanges; point-of-sale credit and marketing solutions;
and retail collections. Check Services accounted for 11% of the Company's 1997
total operating revenue, as compared with 12% in 1996 and 13% in 1995. First
Bankcard Systems offers software services for card issuing, merchant processing
and collections processing. 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 retailers.
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 holiday
shopping season and during other periods of increased consumer spending.
Equifax Europe Segment
- ----------------------
This segment includes Equifax Europe (U.K.) Ltd.; Equifax Europe Ltd., UAPT-
Infolink plc; The Infocheck Group Ltd.; Transax plc.; Precision Marketing
Information Ltd. (49% owned); The Equifax Database Company Ltd.; Transax
Australia plc and Transax SNC. Also included in this segment are ASNEF-Equifax,
Servicios de Information de Credito, S.L. (49% owned).
The Company's principal class of service is providing consumer and commercial
information and consumer marketing lists in the United Kingdom.
The businesses in this segment primarily provide consumer and commercial credit
services, but also provide other financial services, including credit
application processing, credit scoring, check warranty and payment services,
auto lien and other information, marketing services, modeling, and analytic and
risk management services.
Customers include banks, financial institutions, retailers, automobile
manufacturers, utilities and telecommunications companies, auto finance and
leasing firms, automobile dealers and rental companies and mortgage lenders.
Throughout the United Kingdom, Equifax also supports small- and medium-size
businesses operating in a variety of diverse markets. Consumers are supported
by direct services from Equifax in Europe.
Equifax Europe has operations in the United Kingdom, Spain, Portugal, Ireland,
France, Australia and New Zealand. 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.
-3-
<PAGE>
Latin America Segment
- ---------------------
This segment includes Equifax South America, Inc.; Equifax de Chile, S.A.;
Equifax de Mexico Sociedad de Informacion Crediticia, S.A.; Credinformacoes,
Informacoes de Credito, LDA; DICOM S.A.; and Organizacion Veraz S.A. (66 2/3%).
This segment is comprised of two main companies: DICOM in Chile and Veraz in
Argentina. The principal class of service for this segment is consumer and
commercial credit information services. In addition to consumer credit
services, DICOM provides import/export data, legal trademark, stock market and
other consumer information while Veraz provides consumer and commercial credit
information. Customers include retailers, banks, utilities, telecommunications
companies, manufacturers and individual consumers.
Veraz is the leading consumer and commercial credit information provider in
Argentina, while DICOM is the leading provider in Chile. Equifax Latin America
also has operations in Peru, Colombia, El Salvador and Mexico.
Other Segment
- -------------
This segment includes High Integrity Systems, Inc. and health information
services, which was divested in the fourth quarter of 1996.
The Company's single class of service for this segment is lottery services. In
1996, the Company subcontracted many of its lottery obligations to GTECH
Corporation, and as a result, these operations are not material to a general
understanding of the Company's business. The Company is no longer in the lottery
business. Reference is made to Note 6 of the Notes to Consolidated Financial
Statements, included in Part II, Item 3 of this report, for a more detailed
discussion.
================================================================================
The principal methods of competition for the Company are price, scope, speed and
ease of service and quality of the information furnished.
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 10,000 employees, as of December 31, 1997.
ITEM 2. PROPERTIES
- ------- ----------
The Company is in a service industry and does not own any mines, extractive
properties or manufacturing plants. Consequently, 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 two office buildings, one of which is located in
Wexford, Ireland and one in Salisbury, England. The Company owns approximately
46 acres in Windward Office Park located in Alpharetta, Georgia adjacent to
office space currently under lease by the Company.
-4-
<PAGE>
The Company ordinarily leases office space of the general commercial type for
conducting its business and is obligated under approximately 211 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 $36,243,000 in 1995,
$39,443,000 in 1996 and $38,779,000 in 1997.
In the fourth quarter of 1997, the Company announced its intention to relocate
to a new headquarters building to be constructed in Atlanta, Georgia. The
Company will occupy the entire building which will be leased through a
"synthetic lease" with financing provided by SunTrust Bank, Atlanta.
Construction is to begin Spring 1998 with completion scheduled for early Fall
1999. The Company plans to relocate in the Fall of 1999 for the 100th
anniversary of its founding. The Company will continue to lease a portion of
its current headquarters building after relocation which will be occupied by
field staff relocated from various other locations.
Future minimum payment obligations for noncancelable operating leases exceeding
one year are as follows as of December 31, 1997:
<TABLE>
<CAPTION>
(In thousands) Amount
- ---------------- --------
<S> <C>
1998 $ 25,927
1999 23,353
2000 20,674
2001 18,402
2002 15,213
Thereafter 132,789
--------
$236,358
========
</TABLE>
ITEM 3. LEGAL PROCEEDINGS
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Reference is made to Note 11 of the Notes to Consolidated Financial Statements,
included in Part IV, Item 14 of this report, which is hereby incorporated by
reference.
-5-
<PAGE>
EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------
The Company's executive officers, as of March 20, 1998, 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>
Thomas F. Chapman, President and Chief Executive Officer* 54 1991
James J. Allhusen, Executive Vice President & Group Executive 49 1998
Lee A. Kennedy, Executive Vice President & Group Executive 47 1997
John T. Chandler, Corporate Vice President 50 1995
C. Richard Crutchfield, Corporate Vice President and 47 1997
Chief Technology Officer
Philip J. Mazzilli, Corporate Vice President, Treasurer & Controller 57 1995
David A. Post, Corporate Vice President & Chief Financial Officer 45 1996
Bruce S. Richards, Corporate Vice President & General Counsel 43 1996
Marietta Edmunds Zakas, Corporate Vice President and Secretary 39 1995
*Also serves as a Director
</TABLE>
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 subject to earlier termination in accordance with the By-
laws. Election of officers occurs each year at the Board of Directors meeting
held in conjunction with the Annual Meeting of the Shareholders.
Mr. Chapman, elected in January 1998, serves as President and Chief Executive
Officer of the Company. Prior to this election, Mr. Chapman served as President
and Chief Operating Officer of the Company. Before that, he was Executive Vice
President and Group Executive of the Company's former Financial Services Group.
He has served as an officer of the Company for at least five years.
Mr. Allhusen, elected in January 1998, serves as Executive Vice President and
Group Executive of the Company. Prior to this election, Mr. Allhusen served as
Executive Vice President of Advanta Corporation, a bankcard issuer, since 1995.
Before that, he served as General Manager with Standard Chartered Bank in Hong
Kong from 1990 until 1995.
Mr. Kennedy, elected in October 1997, serves as Executive Vice President and
Group Executive of the Company. Prior to this election, Mr. Kennedy served as
Group Executive of the Company's Payment Services Group since 1995. From 1990
to 1995, he served as Senior Vice President and General Manager of the Company's
Card Services Division.
Mr. Chandler, elected in October 1995, serves as Corporate Vice President of the
Company. Prior to this election, Mr. Chandler served as Vice President-
Compensation and Benefits Administration upon joining the Company in 1991.
-6-
<PAGE>
Mr. Crutchfield, elected in October 1997, serves as Corporate Vice President and
Chief Technology Officer of the Company. Prior to this election, Mr.
Crutchfield served as Senior Vice President and Chief Information Officer since
April 1997. Previously, he served as Chief Technology Officer for the Company's
Financial Services Group for more than five years.
Mr. Mazzilli, elected in October 1996, serves as Corporate Vice President,
Treasurer and Controller of the Company. Prior to this election, Mr. Mazzilli
served as Corporate Vice President and Controller since October 1995. Before
that, he served as Vice President and Controller of the Company since 1992.
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.
Mr. Richards, elected in October 1996, serves as Corporate Vice President and
General Counsel of the Company. Prior to this election, Mr. Richards served as
Senior Vice President and Group Counsel of the Company's Financial Services
Group since 1991.
Ms. Zakas, elected in October 1996, serves as Corporate Vice President and
Secretary of the Company. Prior to this election, Ms. Zakas 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 as Director-Strategic Planning and Analysis from
1992-1993 and as Director-Project Finance from 1991-1992. Before that, she was
a Vice President in the Capital Market Services Group of Morgan Stanley and Co.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
- ------- -----------------------------------------------------
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>
Quarter 1991 1992 1993 1994 1995 1996 1997
- --------------------- ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
First $0.065 $0.065 $0.070 $0.070 $0.078 $0.083 $0.083
Second 0.065 0.065 0.070 0.078 0.078 0.083 0.088
Third 0.065 0.065 0.070 0.078 0.078 0.083 0.088
Fourth 0.065 0.065 0.070 0.078 0.083 0.083 0.088
- --------------------- ------ ------ ------ ------ ------ ------ ------
Annual $0.260 $0.260 $0.280 $0.303 $0.315 $0.330 $0.345
- --------------------- ------ ------ ------ ------ ------ ------ ------
</TABLE>
-7-
<PAGE>
STOCK PRICES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
(In Dollars) 1993 1994 1995 1996 1997
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
High Low High Low High Low High Low High Low
First Quarter 10.016 8.563 12.250 9.797 15.219 11.297 20.141 15.891 30.094 23.938
Second Quarter 9.391 7.781 13.594 10.344 15.656 13.703 24.844 17.563 33.281 23.719
Third Quarter 11.688 8.844 13.531 11.969 18.844 14.594 24.500 21.594 33.000 27.750
Fourth Quarter 12.250 10.234 13.813 10.734 19.469 16.109 30.875 23.719 36.438 28.625
- ------------------------------------------------------------------------------------------------
Year 12.250 7.781 13.813 9.797 19.469 11.297 30.875 15.891 36.438 23.719
</TABLE>
As of March 20, 1998, there were approximately 11,851 holders of record of the
Company's common stock.
In October 1997, the Company, relying on Section 4(2) of the '33 Securities Act,
issued 266,374 shares of unregistered common stock, as partial consideration for
the purchase of Goldleaf Technologies, Inc. A registration statement on Form S-
3 covering these shares was filed with the Securities and Exchange Commission on
December 22, 1997, and became effective December 30, 1997 (File No. 333-42955).
ITEM 6. SELECTED FINANCIAL DATA
- ------- ------------------------
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
- ------- -------------------------------------------------
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
- ------- -------------------------------------------
Reference is made to Exhibit 13.3, included in Part IV, Item 14 of this report,
which is hereby incorporated
by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
- ------- -------------------------------------------------
ACCOUNTING AND FINANCIAL DISCLOSURE
-----------------------------------
None.
-8-
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- -------- --------------------------------------------------
The Company's Proxy Statement for the Annual Meeting of Shareholders to be held
on April 29, 1998, contains, on pages 2 through 5 thereof, information relating
to the Company's Directors and persons nominated to become Directors, which is
incorporated hereby by reference.
ITEM 11. EXECUTIVE COMPENSATION
- -------- ----------------------
The Company's Proxy Statement for the Annual Meeting of Shareholders to be held
on April 29, 1998, contains, on pages 13 through 17 thereof, information
relating to Executive Officer compensation, which is incorporated herein by
reference.
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 29, 1998, contains on page 8 information relating to security
ownership of certain beneficial owners and management, which is incorporated
herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -------- ----------------------------------------------
The Company's Proxy Statement for the Annual Meeting of Shareholders to be held
on April 29, 1998, contains, on pages 9 and 10 thereof, information relating to
certain relationships and related transactions, which is incorporated herein by
reference.
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, 1997 and 1996
. Consolidated Statements of Income for the Years Ended December 31,
1997, 1996 and 1995
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<PAGE>
. Consolidated Statements of Shareholders' Equity for the Years
Ended December 31, 1997, 1996 and 1995
. Consolidated Statements of Cash Flows for the Years Ended December
31, 1997, 1996 and 1995
. 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
A list of exhibits included as part of this Annual Report is set
forth in the Exhibit Index appearing elsewhere herein and is
incorporated herein by reference.
. 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. owns a personal life
insurance policy in the face amount of $1,000,000. The Company
pays the annual premiums on these policies.
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 did not file any reports on Form 8-K during the fourth quarter
of the year ended December 31, 1997.
-10-
<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, 1998 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, 1998 /s/ C.B. Rogers, Jr.
-----------------------------------------
C. B. Rogers, Jr., Chairman of the Board
Date March 31, 1998 /s/ Thomas F. Chapman
-----------------------------------------
Thomas F. Chapman, President and
Chief Executive Officer
Date March 31, 1998 /s/ Philip J. Mazzilli
-----------------------------------------
Philip J. Mazzilli, Corporate Vice
President, Treasurer and Controller
(Principal Accounting Officer)
Date March 31, 1998 /s/ Lee A. Ault
-----------------------------------------
Lee A. Ault, III, Director
Date March 16, 1998 /s/ John L. Clendenin
-----------------------------------------
John L. Clendenin, Director
Date March 31, 1998 /s/ A. W. Dahlberg
-----------------------------------------
A. W. Dahlberg, Director
-11-
<PAGE>
Date March 16, 1998 /s/ Robert P. Forrestal
-----------------------------------------
Robert P. Forrestal, Director
Date March 31, 1998 /s/ L. Phillip Humann
-----------------------------------------
L. Phillip Humann, Director
Date March 31, 1998 /s/ Daniel W. McGlaughlin
-----------------------------------------
Daniel W. McGlaughlin, Director
Date March 31, 1998 /s/ Larry L. Prince
-----------------------------------------
Larry L. Prince, Director
Date March 31, 1998 /s/ D. Raymond Riddle
-----------------------------------------
D. Raymond Riddle, Director
Date March 31, 1998 /s/ Dr. Betty L. Siegel
-----------------------------------------
Dr. Betty L. Siegel, Director
Date March 31, 1998 /s/ Dr. Louis W. Sullivan
-----------------------------------------
Dr. Louis W. Sullivan, Director
-12-
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER
- -------
Plan of Acquisition, Reorganization, Arrangement, Liquidation or
----------------------------------------------------------------
Succession
----------
2.1 Distribution Agreement, Plan of Reorganization and Distribution (24
pages)(8)
Articles of Incorporation and By-laws
-------------------------------------
3.1 . Amended and Restated Articles of Incorporation (3 pages) (6)
3.2 . By-Laws (23 pages) (7)
Instruments Defining the Rights of Security Holders, Including
--------------------------------------------------------------
Indentures
----------
4.1 . Loan Agreement (151 pages)
4.2 . Portion of Prospectus and Trust Indenture (134 pages) (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" (54 pages) (4)
4.4 . Shelf Registration Statement Prospectus (22 pages) (9)
4.5 . Form of Indenture to be entered into relating to Debt Securities
covered by Shelf Registration Statement (98 pages) (10)
Material Contracts and Compensation Plans
-----------------------------------------
10.1 . Equifax Inc. 1988 Performance Share Plan for Officers, as amended
(13 pages) (11)
10.2 . Equifax Inc. 1997 Incentive Compensation Plan (6 pages) (11)
10.3 . Deferred Compensation Plan (22 pages) (5) (11)
10.4 . Change in Control Agreement (11 pages) (11)
10.5 . Consulting Agreement, dated January 1, 1996 (6 pages) (5) (11)
10.6 . Executive Agreement, dated December 8, 1997 (6 pages) (11)
10.7 . Executive Agreement, dated January 22, 1998 (3 pages) (11)
10.8 . Equifax Inc. Omnibus Stock Incentive Plan, as amended (17 pages)
(11)
10.9 . Form of 1998 Incentive and Non-Qualified Stock Option Agreements
(9 pages) (11)
10.10 . Form of 1998 Restricted Stock Option Agreement (3 pages) (11)
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<PAGE>
10.11 . Form of 1996 Incentive and Non-Qualified Stock Option Agreements (8
pages) (7)(11)
10.12 . Form of 1996 Restricted Stock Award Agreement (3 pages) (7) (11)
10.13 . Form of 1995 Incentive and Non-Qualified Stock Option Agreements (8
pages) (3) (11)
10.14 . Form of 1995 Non-Qualified Stock Option Agreement (4 pages) (3)
(11)
10.15 . Form of 1995 Restricted Stock Award Agreement (3 pages) (3) (11)
10.16 . Form of 1994 Incentive and Non-Qualified Stock Option Agreements (8
pages) (2) (11)
10.17 . Form of 1994 Restricted Stock Award Agreement (4 pages) (2) (11)
10.18 . Equifax Inc. Non-Employee Director Stock Option Plan and Agreement
(10 pages) (3) (11)
10.19 . Equifax Inc. Supplemental Executive Retirement Plan (24 pages) (3)
(11)
10.20 . Equifax Inc. Supplemental Executive Retirement Plan Amendments (26
pages) (2) (11)
10.21 . Equifax Inc. Supplemental Executive Retirement Plan Amendment (2
pages) (7) (11)
10.22 . Equifax Inc. Severance Pay Plan for Salaried Employees (1 pages)
(11)
10.23 . Agreement For Computerized Credit Reporting Services (204 pages)
(2)
10.24 . Amendments to Agreement for Computerized Credit Reporting Services
and related documents (66 page) (7)
10.25 . Amendment to Agreement for Computerized Credit Reporting Services
(8 pages) (1)
10.26 . Amendment to Agreement for Computerized Credit Reporting Services
(9 pages) (2)
10.27 . Amendment to Agreement for Computerized Credit Reporting Services
(14 pages) (3)
10.28 . Computer and network operations agreement (redacted version) (31
pages) (2)
10.29 . Purchase and Lease Agreement (109 pages) (2)
10.30 . Headquarters Facility Lease (77 pages) (2)
10.31 . Lease Agreement (71 pages) (2)
10.32 . Lease Agreement (76 pages)
-14-
<PAGE>
Annual Report to Security Holders
---------------------------------
13.1 . Summary of Selected Financial Data (1 page)
13.2 . Management's Discussion and Analysis of Financial Condition and
Results of Operation (8 pages)
13.3 . Financial Statements and Supplementary Data (19 pages)
21 Subsidiaries of the Registrant (6 pages)
------------------------------
23 Consent of Independent Public Accountants to incorporation by
-------------------------------------------------------------
reference (1 page)
---------
27 Financial Data Schedule (for SEC use only)
-----------------------
/(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 31, 1994, as
amended on Form 10-K/A, filed October 14, 1994, and hereby incorporated by
reference.
/(3)/ Previously filed as an exhibit on Form 10-K, filed March 30, 1995, and
hereby incorporated by reference.
/(4)/ Previously filed as exhibits on form 8-A, filed November 2, 1995, and
hereby incorporated by reference.
/(5)/ 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.
/(6)/ Previously filed as an exhibit on Schedule 14A, filed, March 26, 1996, and
hereby incorporated by reference.
/(7)/ Previously filed as an exhibit on Schedule 14A, filed March 31, 1997, and
hereby incorporated by reference.
/(8)/ Previously filed as an exhibit to Pre-effective Amendment No. 1 to
ChoicePoint Inc. Registration Statement on Form S-1, Registration No. 333-30297,
filed July 16, 1997, and hereby incorporated by reference.
/(9)/ Previously filed as pages 1 through 22 to the Company's Registration
Statement on Form S-3, Registration No. 333-47599, filed March 9, 1998, and
hereby incorporated by reference.
/(10)/ Previously filed as Exhibit 4.6 to the Company's Registration Statement
on Form S-3, Registration Statement No. 333-47599, filed March 9, 1998, and
hereby incorporated by reference.
/(11)/ Management Contract or Compensatory Plan.
-15-
<PAGE>
EXHIBIT 4.1
$750,000,000
CREDIT AGREEMENT
dated as of
November 21, 1997
among
EQUIFAX INC.,
And Certain Wholly Owned Subsidiaries of Equifax Inc.,
The Banks Listed Herein
and
WACHOVIA BANK, N.A.,
as Agent
<PAGE>
TABLE OF CONTENTS
CREDIT AGREEMENT
Page
ARTICLE I
DEFINITIONS.............................................. 1
SECTION 1.01. Definitions........................................ 1
SECTION 1.02. Accounting Terms and Determinations................ 22
SECTION 1.03. References......................................... 22
SECTION 1.04. Use of Defined Terms............................... 22
SECTION 1.05. Terminology........................................ 23
ARTICLE II
THE CREDITS.............................................. 23
SECTION 2.01. Commitments to Lend................................ 23
SECTION 2.02. Method of Borrowing................................ 25
SECTION 2.03. Money Market Loans................................. 28
SECTION 2.04. Notes.............................................. 33
SECTION 2.05. Maturity of Loans.................................. 34
SECTION 2.06. Interest Rates..................................... 34
SECTION 2.07. Fees............................................... 38
SECTION 2.08. Optional Termination or Reduction of Commitments... 38
SECTION 2.09. Mandatory Termination of Commitments............... 39
SECTION 2.10. Optional Prepayments............................... 39
SECTION 2.11. Mandatory Prepayments and Repayments............... 39
SECTION 2.12. General Provisions as to Payments.................. 40
SECTION 2.13. Computation of Interest and Fees................... 44
<PAGE>
SECTION 2.14. Election and Release of Borrowers................. 45
ARTICLE III
CONDITIONS TO BORROWINGS................................. 45
SECTION 3.01. Conditions to First Borrowing...................... 45
SECTION 3.02. Conditions to All Borrowings....................... 48
ARTICLE IV
REPRESENTATIONS AND WARRANTIES........................... 48
SECTION 4.01. Corporate Existence and Power...................... 48
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention............................................... 49
SECTION 4.03. Binding Effect..................................... 49
SECTION 4.04. Financial Information.............................. 49
SECTION 4.05. No Litigation...................................... 50
SECTION 4.06. Compliance with ERISA.............................. 50
SECTION 4.07. Compliance with Laws; Payment of Taxes............. 50
SECTION 4.08. Subsidiaries; Identification of Consolidated
Subsidiaries................................................ 50
SECTION 4.09. Investment Company Act............................. 51
SECTION 4.10. Public Utility Holding Company Act................. 51
SECTION 4.11. Ownership of Property; Liens....................... 51
SECTION 4.12. No Default......................................... 51
SECTION 4.13. Full Disclosure.................................... 51
SECTION 4.14. Environmental Matters.............................. 52
SECTION 4.15. Capital Stock...................................... 52
SECTION 4.16. Margin Stock....................................... 53
SECTION 4.17. Insolvency......................................... 53
<PAGE>
SECTION 4.18. Insurance.......................................... 53
ARTICLE V
COVENANTS................................................ 54
SECTION 5.01. Information........................................ 54
SECTION 5.02. Inspection of Property, Books and Records.......... 56
SECTION 5.03. Maintenance of Existence........................... 57
SECTION 5.04. Dissolution........................................ 57
SECTION 5.05. Consolidations, Mergers and Sales of Assets........ 57
SECTION 5.06. Use of Proceeds.................................... 58
SECTION 5.07. Compliance with Laws; Payment of Taxes............. 59
SECTION 5.08. Insurance.......................................... 59
SECTION 5.09. Change in Fiscal Year.............................. 59
SECTION 5.10. Maintenance of Property............................ 59
SECTION 5.11. Environmental Notices.............................. 59
SECTION 5.12. Environmental Matters.............................. 60
SECTION 5.13. Environmental Release.............................. 60
SECTION 5.14. Transactions with Affiliates....................... 60
SECTION 5.15. Restricted Investments............................. 60
SECTION 5.16. Intentionally Deleted.............................. 60
SECTION 5.17. Debt of Consolidated Subsidiaries.................. 60
SECTION 5.18. Negative Pledge.................................... 61
SECTION 5.19. Interest Coverage Ratio............................ 63
SECTION 5.20. Ratio of Consolidated Funded Debt to Cash Flow..... 63
ARTICLE VI
DEFAULTS................................................. 64
SECTION 6.01. Events of Default.................................. 64
<PAGE>
SECTION 6.02. Notice of Default.................................. 68
ARTICLE VII
THE AGENT................................................ 68
SECTION 7.01. Appointment; Powers and Immunities................. 68
SECTION 7.02. Reliance by Agent.................................. 69
SECTION 7.03. Defaults........................................... 69
SECTION 7.04. Rights of Agent as a Bank.......................... 69
SECTION 7.05. Indemnification.................................... 70
SECTION 7.06 Consequential Damages.............................. 70
SECTION 7.07. Payee of Note Treated as Owner..................... 70
SECTION 7.08. Nonreliance on Agent and Other Banks............... 71
SECTION 7.09. Failure to Act..................................... 71
SECTION 7.10. Resignation or Removal of Agent.................... 71
ARTICLE VIII
CHANGE IN CIRCUMSTANCES; COMPENSATION.................... 72
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
Unfair...................................................... 72
SECTION 8.02. Illegality......................................... 73
SECTION 8.03. Increased Cost and Reduced Return.................. 73
SECTION 8.04. Base Rate Loans or Other Fixed Rate Loans
Substituted for Affected Fixed Rate Loans....................... 75
SECTION 8.05. Compensation....................................... 76
SECTION 8.06. Failure to Pay in Foreign Currency................ 77
SECTION 8.07. Judgment Currency................................. 77
SECTION 8.08. Limitation on Certain Payment Obligations......... 78
<PAGE>
ARTICLE IX
MISCELLANEOUS............................................ 78
SECTION 9.01. Notices............................................ 78
SECTION 9.02. No Waivers......................................... 79
SECTION 9.03. Expenses; Documentary Taxes........................ 79
SECTION 9.04. Indemnification.................................... 79
SECTION 9.05 Setoff; Sharing of Setoffs......................... 80
SECTION 9.06. Amendments and Waivers............................. 81
SECTION 9.07. No Margin Stock Collateral......................... 82
SECTION 9.08. Successors and Assigns............................. 82
SECTION 9.09. Confidentiality.................................... 85
SECTION 9.10. Representation by Banks............................ 85
SECTION 9.11. Obligations Several................................ 85
SECTION 9.12. Georgia Law........................................ 86
SECTION 9.13. Severability....................................... 86
SECTION 9.14. Interest........................................... 86
SECTION 9.15. Interpretation..................................... 87
SECTION 9.16. Waiver of Jury Trial; Consent to Jurisdiction...... 87
SECTION 9.17. Counterparts....................................... 88
SECTION 9.18. Source of Funds -- ERISA........................... 88
<PAGE>
EXHIBIT A-1 Form of Syndicated Dollar Note
EXHIBIT A-2 Form of Swing Loan Note
EXHIBIT A-3 Form of Dollar Money Market Note
EXHIBIT A-4 Form of Syndicated Foreign Currency Note
EXHIBIT A-5 Form of Foreign Currency Money Market Note
EXHIBIT B Form of Opinion of Counsel for the Borrower
- ---------
EXHIBIT C Form of Opinion of Special Counsel for the Agent
- ---------
EXHIBIT D Form of Assignment and Acceptance
- ---------
EXHIBIT E Form of Notice of Borrowing
- ---------
EXHIBIT F Form of Compliance Certificate
- ---------
EXHIBIT G Form of Closing Certificate
- ---------
EXHIBIT H Form of Money Market Quote Request
- ---------
EXHIBIT I Form of Money Market Quote
- ---------
EXHIBIT J Form of Parent Guaranty
- ---------
EXHIBIT K Borrower Acknowledgment and Agreement
- ---------
EXHIBIT L Borrower Notice of Withdrawal
- ---------
Schedule 4.06 Compliance with ERISA
- -------------
Schedule 4.08 Subsidiaries
- -------------
Schedule 4.14 Environmental Matters
- -------------
Schedule 4.15 Capital Stock
- -------------
Schedule 5.12 Hazardous Materials
- -------------
Schedule 5.18 Existing Liens
- -------------
<PAGE>
CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of November 21, 1997, among EQUIFAX
INC., its Wholly Owned Subsidiaries which become a party hereto from time to
time, the BANKS listed on the signature pages hereof and WACHOVIA BANK, N.A., as
Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The terms as defined in this Section 1.01
-----------
shall, for all purposes of this Agreement and any amendment hereto (except as
herein otherwise expressly provided or unless the context otherwise requires),
have the meanings set forth herein:
"Accounts Management Assets and Liabilities" has the meaning set forth
in the CSC Agreement.
"Acquisition" means any acquisition of the stock in or a significant
part of the assets of any Person, other than acquisition of supplies and raw
materials in the ordinary course of business.
"Adjusted IBOR Rate" has the meaning set forth in Section 2.06(e).
"Adjusted London Interbank Offered Rate" has the meaning set forth in
Section 2.06(c).
"Affected Bank" has the meaning set forth in Section 8.03(d).
"Affiliate" of any relevant Person means (i) any Person that directly,
or indirectly through one or more intermediaries, controls the relevant Person
(a "Controlling Person"), (ii) any Person (other than the relevant Person or a
Subsidiary of the relevant Person) which is controlled by or is under common
control with a Controlling Person, or (iii) any Person (other than a Subsidiary
of the relevant Person) of which the relevant Person owns, directly or
indirectly, 20% or more of the common stock or equivalent equity interests. As
used herein, the term "control" means possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
<PAGE>
"Agent" means Wachovia Bank, N.A., a national banking association
organized under the laws of the United States of America, in its capacity as
agent for the Banks hereunder, and its successors and permitted assigns in such
capacity.
"Agent's Letter Agreement" means that certain letter agreement, dated
as of October 14, 1997, between the Parent and the Agent relating to the
structure of the Loans and certain fees from time to time payable by the
Borrowers to the Agent, together with all amendments and supplements thereto.
"Agreement" means this Credit Agreement, together with all amendments
and supplements hereto.
"Aggregate Commitments" means the sum of the Commitments of all of the
Banks.
"Aggregate Outstanding Loans" means at any time the sum of (i) the
outstanding principal amount of the Syndicated Dollar Loans, plus (ii) the
----
outstanding principal amount of the Dollar Money Market Loans, plus (iii) the
----
Dollar Equivalent of the outstanding principal amount of the Foreign Currency
Loans, plus (iv) the outstanding principal amount of the Swing Loans.
----
"Applicable Margin" has the meaning set forth in Section 2.06(a).
"Assignee" has the meaning set forth in Section 9.08(c).
"Assignment and Acceptance" means an Assignment and Acceptance
executed in accordance with Section 9.08(c) in the form attached hereto as
Exhibit D.
- ---------
"Authority" has the meaning set forth in Section 8.02.
"Authorized Officer" means (i) any of the following officers of the
Parent: Chairman, President, Executive Vice Presidents, Senior Vice Presidents,
Chief Financial Officer, Treasurer, Assistant Treasurer and Corporate
Controller, and (ii) any other officers of the Parent as the Parent may notify
the Agent in writing from time to time.
"Bank" means each bank listed on the signature pages hereof as having
a Commitment, and its successors and assigns.
"Base Rate" means for any Base Rate Loan for any day, the rate per
annum equal to the higher as of such day of (i) the Prime Rate, or (ii) one-half
of one percent above the Federal Funds Rate. For purposes of determining the
Base Rate or the
<PAGE>
Federal Funds Rate for any day, changes in the Prime Rate shall be effective on
the date of each such change.
"Base Rate Loan" means a Loan to be made as a Base Rate Loan pursuant
to the applicable Notice of Borrowing, Section 2.02(f), or Article VIII, as
applicable.
"Borrower" or "Borrowers" means, individually and collectively, as the
context shall require, (i) the Parent, (ii) the Parent's Wholly Owned
Subsidiaries located in the United States of America which become Borrowers as
provided in Section 2.14, and their respective successors and permitted assigns,
and (iii) the Parent's Wholly Owned Subsidiaries located outside of the United
States of America in jurisdictions listed in the Foreign Jurisdiction Letter
which become Borrowers as provided in Section 2.14, and their respective
successors and permitted assigns.
"Borrowing" means a borrowing hereunder consisting of Loans made to
the applicable Borrower (i) at the same time by all of the Banks, in the case of
a Syndicated Borrowing, or (ii) separately by Wachovia, in the case of a Swing
Loan Borrowing, or (iii) separately by one or more Banks, in the case of a Money
Market Borrowing, in each case pursuant to Article II. A Borrowing is a
"Domestic Borrowing" if such Loans are Domestic Loans, or a "Euro-Dollar
Borrowing" if such Loans are Euro-Dollar Loans. A Borrowing is a "Dollar
Borrowing" if it is a Domestic Borrowing or a Euro-Dollar Borrowing. A
Borrowing is a "Money Market Borrowing" if such Loans are either Dollar Money
Market Loans or Foreign Currency Money Market Loans, or a "Syndicated Borrowing"
if such Loans are Syndicated Loans. A Borrowing is a "Dollar Money Market
Borrowing" if such Loans are Dollar Money Market Loans. A Borrowing is a
"Foreign Currency Money Market Borrowing" if such Loans are Foreign Currency
Money Market Loans. A Borrowing is a "Swing Loan Borrowing" if such Loans are
Swing Loans.
"Capital Stock" means any nonredeemable capital stock of a Person (to
the extent issued to another Person), whether common or preferred.
"Cash Flow" means the sum of the Parent's and its Consolidated
Subsidiaries', for any applicable period, (i) Consolidated Net Income, plus (ii)
----
Consolidated Interest Expense, plus (iii) income taxes, plus (iv) depreciation
---- ----
and amortization, all as determined on a consolidated basis in accordance with
GAAP.
"CERCLA" means the Comprehensive Environmental Response Compensation
and Liability Act, 42 U.S.C. (S) 9601 et. seq. and its implementing regulations
and amendments.
<PAGE>
"CERCLIS" means the Comprehensive Environmental Response Compensation
and Liability Inventory System established pursuant to CERCLA.
"CSC" means Computer Sciences Corporation, a Texas corporation.
"CSC Agreement" means the Agreement for Computerized Credit Reporting
Services and Options to Purchase and Sell Assets, dated as of the 1st day of
August, 1988, among The Credit Bureau, Incorporated of Georgia, the Borrower,
CSC, CSC Credit Services, Inc., Credit Bureau of Cincinnati, Inc., Credit Bureau
of Greater Kansas City, Inc., Johns Holding Company, CSC Credit Services of
Minnesota, Inc. and CSC Accounts Management, Inc.
"CSC Put" means either of (i) the giving of any notice to the Borrower
or any Affiliate of the Borrower in accordance with the CSC Agreement which
shall require the Borrower or any Affiliate of the Borrower to purchase or
otherwise acquire the Accounts Management Assets and Liabilities, or the
Subsidiaries' Assets and Liabilities, or both of them; or (ii) the occurrence of
an event or series of events which shall result at any time or times in the
direct or indirect ownership by the Borrower, any one or more Affiliates of the
Borrower, or any combination the Borrower and any one or more of its Affiliates,
of the Accounts Management Assets and Liabilities, or the Subsidiaries Assets
and Liabilities, or both of them.
"Change of Law" has the meaning set forth in Section 8.02.
"Closing Certificate" has the meaning set forth in Section 3.01(e).
"Closing Date" means November 21, 1997.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor Federal tax code.
"Commitment" means, with respect to each Bank, the amount set forth
opposite the name of such Bank on the signature pages hereof, as such amount may
be reduced from time to time pursuant to Sections 2.08 and 2.09, or as set forth
in any Assignment and Acceptance executed pursuant to Section 9.08(c).
"Compliance Certificate" has the meaning set forth in Section 5.01(c).
"Consolidated Debt" means at any date the Debt of the Parent and its
Consolidated Subsidiaries, determined on a consolidated basis as of such date.
<PAGE>
"Consolidated Funded Debt" means, with respect to the Parent and its
Consolidated Subsidiaries at any date and as determined on a consolidated basis,
the sum (without duplication) of (i) Long-Term Debt, plus (ii) capital leases
----
(excluding any Synthetic Leases), plus (iii) Current Maturities of Long-Term
----
Debt, plus (iv) Short-Term Debt, plus (v) all Debt Guaranteed by the Parent or
---- ----
any of its Consolidated Subsidiaries (other than Debt of the Parent or any of
its Consolidated Subsidiaries).
"Consolidated Interest Expense" for any period means interest, whether
expensed or capitalized, in respect of Debt of the Parent or any of its
Consolidated Subsidiaries outstanding during such period.
"Consolidated Net Income" means, for any period, the Net Income of the
Parent and its Consolidated Subsidiaries determined on a consolidated basis, but
excluding (i) extraordinary items and (ii) any equity interests of the Parent or
any Subsidiary in the unremitted earnings of any Person that is not a
Subsidiary.
"Consolidated Net Tangible Assets" means, at any time, Consolidated
Total Assets, less the sum of the value, as set forth or reflected on the most
recent consolidated balance sheet of the Parent and its Consolidated
Subsidiaries, prepared in accordance with GAAP, of:
(A) All assets which would be treated as intangible assets for balance
sheet presentation purposes under GAAP, excluding "Purchased Data Files", but
including without limitation goodwill (as determined by the Parent in a manner
consistent with its past accounting practices and in accordance with GAAP),
trademarks, tradenames, copyrights, patents and technologies, and unamortized
debt discount and expense;
(B) To the extent not included in (A) of this definition, any amount
at which shares of Capital Stock of the Parent appear as an asset on the balance
sheet of its Consolidated Subsidiaries; and
(C) To the extent not included in (A) of this definition, deferred
expenses.
"Consolidated Operating Profits" means, for any period, the Operating
Profits of the Parent and its Consolidated Subsidiaries.
"Consolidated Subsidiary" means at any date any Subsidiary or other
entity the accounts of which, in accordance with GAAP, would be consolidated
with those of the Parent in its consolidated financial statements as of such
date.
<PAGE>
"Consolidated Total Assets" means, at any time, the total assets of
the Parent and its Consolidated Subsidiaries, determined on a consolidated
basis, as set forth or reflected on the most recent consolidated balance sheet
of the Parent and its Consolidated Subsidiaries, prepared in accordance with
GAAP.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Code.
"Current Maturities of Long Term Debt" means all payments in respect
of Long Term Debt (other than Debt under this Agreement) that are required to be
made within one year from the date of determination, whether or not the
obligation to make such payments would constitute a current liability of the
obligor under GAAP.
"Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except (A) trade accounts payable arising in the ordinary course of
business and (B) any obligation relating to or arising out of the CSC Put prior
to the actual payment therefor, (iv) all obligations of such Person as lessee
under capital leases (excluding, however, Synthetic Leases), (v) all obligations
of such Person to reimburse any bank or other Person in respect of amounts
payable under a banker's acceptance, (vi) all Redeemable Preferred Stock of such
Person (in the event such Person is a corporation), (vii) all obligations of
such Person to reimburse any bank or other Person in respect of amounts paid or
to be paid under a letter of credit or similar instrument, (viii) all Debt of
others secured by a Lien on any asset of such Person, whether or not such Debt
is assumed by such Person, and (ix) all Debt and other obligations of others
Guaranteed by such Person (other than the Debt and other obligations of the
Parent or the Consolidated Subsidiaries of the Parent Guaranteed by,
respectively, the Parent or the Consolidated Subsidiaries of the Parent).
"Debt Rating" means, at any time, whichever is the higher of the
rating of the Parent's senior unsecured, unenhanced debt by Moody's Investor
Service or Standard and Poor's (provided, that in the event of a double or
--------
greater split rating, the rating immediately below the highest rating shall
apply), or if only one of them rates the Parent's senior unsecured, unenhanced
debt, such rating.
<PAGE>
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Default Rate" means, with respect to any Loan, on any day, the sum of
2% plus the then highest interest rate (including the Applicable Margin) which
may be applicable to any Loans hereunder (irrespective of whether any such type
of Loans are actually outstanding hereunder).
"Dollar Borrowing" has the meaning set forth in the definition of
"Borrowing."
"Dollar Equivalent" means the Dollar equivalent of the amount of a
Foreign Currency Loan, determined by the Agent on the basis of its spot rate for
the purchase of the appropriate Foreign Currency with Dollars.
"Dollar Money Market Borrowing" has the meaning set forth in the
definition of "Borrowing."
"Dollar Money Market Loans" means Money Market Loans made in Dollars.
"Dollar Money Market Notes" means the promissory notes of each of the
Borrowers, substantially in the form of Exhibit A-2, evidencing the obligation
-----------
of the Borrowers to repay the Dollar Money Market Loans, together with all
amendments, consolidations, modifications, renewals and supplements thereto.
"Dollars" or "$" means dollars in lawful currency of the United States
of America.
"Domestic Borrowing" has the meaning set forth in the definition of
"Borrowing."
"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in Georgia are authorized by law to close.
"Domestic Loans" means Base Rate Loans or Dollar Money Market Loans,
or any or all of them, as the context shall require.
"Environmental Authority" means any foreign, federal, state, local or
regional government that exercises any form of jurisdiction or authority under
any Environmental Requirement.
"Environmental Authorizations" means all licenses, permits, orders,
approvals, notices, registrations or other legal
<PAGE>
prerequisites for conducting the business of the Parent or any Consolidated
Subsidiary required by any Environmental Requirement.
"Environmental Judgments and Orders" means all judgments, decrees or
orders arising from or in any way associated with any Environmental
Requirements, whether or not entered upon consent or written agreements with an
Environmental Authority or other entity arising from or in any way associated
with any Environmental Requirement, whether or not incorporated in a judgment,
decree or order.
"Environmental Liabilities" means any liabilities, whether accrued,
contingent or otherwise, arising from and in any way associated with any
Environmental Requirements.
"Environmental Notices" means notice from any Environmental Authority
or by any other person or entity, of possible or alleged noncompliance with or
liability under any Environmental Requirement, including without limitation any
complaints, citations, demands or requests from any Environmental Authority or
from any other person or entity for correction of any, violation of any
Environmental Requirement or any investigations concerning any violation of any
Environmental Requirement.
"Environmental Proceedings" means any judicial or administrative
proceedings arising from or in any way associated with any Environmental
Requirement.
"Environmental Releases" means releases as defined in CERCLA or under
any applicable state or local environmental law or regulation.
"Environmental Requirements" means any legal requirement relating to
public health, safety or the environment and applicable to the Parent, any
Consolidated Subsidiary or the Properties, including but not limited to any such
requirement under CERCLA or similar state legislation and all federal, state and
local laws, ordinances, regulations, orders, writs, decrees and common law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, or any successor law. Any reference to any provision
of ERISA shall also be deemed to be a reference to any successor provision or
provisions thereof.
"Euro-Dollar Borrowing" has the meaning set forth in the definition of
"Borrowing."
<PAGE>
"Euro-Dollar Business Day" means any Domestic Business Day on which
dealings in Dollar deposits are carried out in the London interbank market.
"Euro-Dollar Loan" means a Loan to be made as a Euro-Dollar Loan
pursuant to the applicable Notice of Borrowing.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section
2.06(c).
"Event of Default" has the meaning set forth in Section 6.01.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the next higher 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if the day for which such rate is to
be determined is not a Domestic Business Day, the Federal Funds Rate for such
day shall be such rate on such transactions on the next preceding Domestic
Business Day as so published on the next succeeding Domestic Business Day, and
(ii) if such rate is not so published for any day, the Federal Funds Rate for
such day shall be the average rate charged to the Agent on such day on such
transactions, as determined by the Agent.
"Fiscal Quarter" means any fiscal quarter of the Parent.
"Fiscal Year" means any fiscal year of the Parent.
"Fixed Rate Borrowing" means each Borrowing other than a Base Rate
Borrowing.
"Fixed Rate Loans" means each Loan other than a Base Rate Loan.
"Foreign Currencies" means, individually and collectively, as the
context requires, the lawful currency of each of the following countries,
provided that such currencies are not deemed unavailable to a Bank as a result
of any of the circumstances relevant to such Bank as set forth in Sections 8.01,
8.02 or 8.03: (i) Canada, Italy, Japan, Republic of France, Republic of Germany,
United Kingdom, Switzerland, Netherlands, Norway, Australia, and Spain; and (ii)
at the option of all of the Banks, any other currency which is freely
transferable and convertible into Dollars; and (iii) at the option of any Bank
upon acceptance of a request for a Foreign Currency Money Market
<PAGE>
Borrowing, any currency which is freely transferable and convertible into
Dollars; provided, however, that no such currency under clause (ii) or (iii) of
-------- -------
this paragraph shall be included as a Foreign Currency hereunder, or included in
a Notice of Borrowing, unless (x) a Borrower has first submitted a request to
the Agent and the Banks that it be so included, and (y) the Agent and all of the
Banks, in their sole discretion, have agreed to such request.
"Foreign Currency Borrowing" has the meaning set forth in the
definition of "Borrowing."
"Foreign Currency Business Day" means any Domestic Business Day,
excluding one on which trading is not carried on by and between banks in
deposits of the applicable Foreign Currency in the applicable interbank market
for such Foreign Currency.
"Foreign Currency Loans" means Syndicated Foreign Currency Loans and
Foreign Currency Money Market Loans.
"Foreign Currency Money Market Borrowing" has the meaning set forth in
the definition of "Borrowing."
"Foreign Currency Money Market Loan" means a Money Market Loan made in
a Foreign Currency.
"Foreign Currency Money Market Notes" means the promissory notes of
each of the Borrowers, substantially in the form of Exhibit A-3, evidencing the
-----------
obligation of the Borrowers to repay the Foreign Currency Money Market Loans,
together with all amendments, consolidations, modifications, renewals and
supplements thereto.
"Foreign Jurisdiction Letter" means that certain letter from the
Parent to the Agent dated as of November 6, 1997, setting forth the
jurisdictions from which Borrowers located outside of the United States of
America may request Borrowings.
"GAAP" means generally accepted accounting principles applied on a
basis consistent with those which, in accordance with Section 1.02, are to be
used in making the calculations for purposes of determining compliance with the
terms of this Agreement.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to secure, purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation
<PAGE>
(whether arising by virtue of partnership arrangements, by agreement to keep-
well, to purchase assets, goods, securities or services, to provide collateral
security, to take-or-pay, or to maintain financial statement conditions or
otherwise) or (ii) entered into for the purpose of assuring in any other manner
the obligee of such Debt or other obligation of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in part),
provided that the term Guarantee shall not include endorsements for collection
- --------
or deposit in the ordinary course of business. The term "Guarantee" used as a
verb has a corresponding meaning.
"Hazardous Materials" includes, without limitation, (a) solid or
hazardous waste, as defined in the Resource Conservation and Recovery Act of
1980, 42 U.S.C. (S) 6901 et seq. and its implementing regulations and
amendments, or in any applicable state or local law or regulation, (b)
"hazardous substance", "pollutant", or "contaminant" as defined in CERCLA, or in
any applicable state or local law or regulation, (c) gasoline, or any other
petroleum product or by-product, including, crude oil or any fraction thereof
(d) toxic substances, as defined in the Toxic Substances Control Act of 1976, or
in any applicable state or local law or regulation or (e) insecticides,
fungicides, or rodenticides, as defined in the Federal Insecticide, Fungicide,
and Rodenticide Act of 1975, or in any applicable state or local law or
regulation, as each such Act, statute or regulation may be amended from time to
time.
"IBOR" has the meaning set forth in Section 2.06(e).
"Interest Coverage Ratio" means, for any period of determination, the
ratio of the Parent's and its Consolidated Subsidiaries' (i) Consolidated Net
Income before Consolidated Interest Expense and income taxes, to (ii)
Consolidated Interest Expense, such ratio being calculated on a consolidated
basis for the Fiscal Quarter just ended and the immediately preceding three
Fiscal Quarters.
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing and Syndicated Foreign Currency Borrowing, subject to paragraph (c)
below, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the first, second, third or sixth month
thereafter, as the Borrower may elect in the applicable Notice of Borrowing;
provided that:
- --------
(a) any Interest Period which would otherwise end on a day which is
not a Euro-Dollar Business Day or Foreign Currency Business Day, as the
case may be, shall be extended to the next succeeding Euro-Dollar Business
Day or Foreign Currency Business Day, as the case may be, unless such
<PAGE>
Euro-Dollar Business Day or Foreign Currency Business Day, as the case may
be, falls in another calendar month, in which case such Interest Period
shall, subject to paragraph (c) below end on the next preceding Euro-Dollar
Business Day or Foreign Currency Business Day, as the case may be;
(b) any Interest Period which begins on the last Euro-Dollar Business
Day or Foreign Currency Business Day, as the case may be, of a calendar
month (or on a day for which there is no numerically corresponding day in
the appropriate subsequent calendar month) shall end on the last Euro-
Dollar Business Day or Foreign Currency Business Day, as the case may be,
of the appropriate subsequent calendar month; and
(c) no Interest Period may be selected which begins before the
Termination Date and would otherwise end after the Termination Date.
(2) with respect to each Base Rate Borrowing, the period commencing on the date
of such Borrowing and ending 30 days thereafter; provided that:
--------
(a) any Interest Period which would otherwise end on a day which is
not a Domestic Business Day shall be extended to the next succeeding
Domestic Business Day; and
(b) no Interest Period which begins before the Termination Date and
would otherwise end after the Termination Date may be selected.
(3) with respect to each Dollar Money Market Borrowing, the period commencing on
the date of such Borrowing and ending on the Stated Maturity Date or such other
date or dates as may be specified in the applicable Money Market Quote; provided
--------
that:
(a) any Interest Period (subject to clause (b) below) which would
otherwise end on a day which is not a Domestic Business Day shall be
extended to the next succeeding Domestic Business Day; and
(b) no Interest Period may be selected which begins before the
Termination Date and would otherwise end after the Termination Date.
(4) with respect to each Foreign Currency Money Market Borrowing, the period
commencing on the date of such Borrowing and ending on the Stated Maturity Date
or such other date or dates as may be specified in the applicable Money Market
Quote; provided that:
--------
<PAGE>
(a) any Interest Period (subject to clause (b) below) which would
otherwise end on a day which is not a Foreign Currency Business Day shall
be extended to the next succeeding Foreign Currency Business Day; and
(b) no Interest Period may be selected which begins before the
Termination Date and would otherwise end after the Termination Date.
(5) with respect to each Swing Loan Borrowing bearing interest at the Wachovia
Alternative Rate, the period commencing on the date of such Borrowing and ending
on the fifth Domestic Business Day thereafter; provided that:
--------
(a) any Interest Period (subject to clause (b) below) which would
otherwise end on a day which is not a Domestic Business Day shall be
extended to the next succeeding Domestic Business Day; and
(b) no Interest Period may be selected which begins before the
Termination Date and would otherwise end after the Termination Date.
"Investment" means any investment in any Person, whether by means of
purchase or acquisition of obligations or securities of such Person, capital
contribution to such Person, making of a time deposit with such Person,
Guarantee or assumption of any obligation of such Person or otherwise.
"Investment Guidelines" means the guidelines for investment of funds
of the Parent and the Subsidiaries as approved by the Board of Directors of the
Parent or an authorized executive committee thereof and in effect on the Closing
Date, a copy of which has been furnished to the Banks, as modified from time to
time with the approval of the Board of Directors of the Parent or an authorized
executive committee with notification to the Banks.
"Lending Office" means, as to each Bank, its office located at its
address set forth on the signature pages hereof (or identified on the signature
pages hereof as its Lending Office) or such other office or an affiliate of such
Bank as such Bank may hereafter designate as its Lending Office by notice to the
Parent and the Agent. Each Bank may designate a Lending Office for Syndicated
Dollar Loans and Dollar Money Market Loans and a different Lending Office for
Foreign Currency Loans, and the term "Lending Office" shall in such case mean
either such Lending Office, as the context shall require.
"Lien" means, with respect to any asset, any mortgage, deed to secure
debt, deed of trust, lien, pledge, charge,
<PAGE>
security interest, security title, preferential arrangement which has the
practical effect of constituting a security interest or encumbrance, or
encumbrance or servitude of any kind in respect of such asset to secure or
assure payment of a Debt or a Guarantee, whether by consensual agreement or by
operation of statute or other law, or by any agreement, contingent or otherwise,
to provide any of the foregoing (excluding, however, any Synthetic Leases). For
the purposes of this Agreement, the Borrower or any Consolidated Subsidiary
shall be deemed to own subject to a Lien any asset which it has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement (other than an
operating lease under GAAP or a Synthetic Lease) relating to such asset.
"Loan" means a Base Rate Loan, Euro-Dollar Loan, Money Market Loan,
Dollar Money Market Loan, Foreign Currency Money Market Loan, Domestic Loan,
Swing Loan, Syndicated Loan, Syndicated Dollar Loan or a Syndicated Foreign
Currency Loan, and "Loans" means Base Rate Loans, Euro-Dollar Loans, Money
Market Loans, Dollar Money Market Loans, Foreign Currency Money Market Loan,
Domestic Loans, Swing Loans, Syndicated Loans, Syndicated Dollar Loans or a
Syndicated Foreign Currency Loans, or any or all of them, as the context
requires.
"Loan Documents" means this Agreement, the Notes, the Parent Guaranty
any other document evidencing, relating to or securing the Loans, and any other
document or instrument delivered from time to time in connection with this
Agreement, the Notes, the Parent Guaranty or the Loans, as such documents and
instruments may be amended or supplemented from time to time.
"London Interbank Offered Rate" has the meaning set forth in Section
2.06(c).
"Long-Term Debt" means at any date any Consolidated Debt (including,
without limitation, any subordinated Debt) which matures (or the maturity of
which may at the option of the Parent or any Consolidated Subsidiary be extended
such that it matures) more than one year after such date.
"Margin Stock" means "margin stock" as defined in Regulations G, T, U
or X.
"Material Adverse Effect" means, with respect to any event, act,
condition or occurrence of whatever nature (including any adverse determination
in any litigation, arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences, whether or not related, a
material adverse change in, or a material adverse
<PAGE>
effect upon, any of (a) the financial condition, operations, business,
properties or prospects of the Parent and its Consolidated Subsidiaries taken as
a whole, (b) the rights and remedies of the Agent or the Banks under the Loan
Documents, or the ability of each of the Parent and its Consolidated
Subsidiaries taken as a whole to perform its obligations under the Loan
Documents to which it is a party, as applicable (including, without limitation,
any repudiation by the Parent of the Parent Guaranty), or (c) the legality,
validity or enforceability of any Loan Document.
"Money Market Borrowing" has the meaning set forth in the definition
of "Borrowing."
"Money Market Borrowing Date" has the meaning specified in Section
2.03.
"Money Market Loans" means Loans made pursuant to the terms and
conditions set forth in Section 2.03.
"Money Market Quote" has the meaning specified in Section 2.03.
"Money Market Quote Request" has the meaning specified in Section
2.03(b).
"Money Market Rate" has the meaning specified in Section
2.03(c)(ii)(C).
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Net Income" means, as applied to any Person for any period, the
aggregate amount of net income of such Person, after taxes, for such period, as
determined in accordance with GAAP.
"Non-U.K. Bank" has the meaning set forth in Section 2.12(d).
"Non-U.S. Bank" has the meaning set forth in Section 2.12(d).
"Notes" means the Syndicated Dollar Notes, the Syndicated Foreign
Currency Notes, the Dollar Money Market Notes, the Foreign Currency Money Market
Notes, the Swing Loan Note or any or all of them, as the context shall require.
"Notice of Borrowing" has the meaning set forth in Section 2.02(a).
<PAGE>
"Operating Profits" means, as applied to any Person for any period,
the operating revenue of such Person for such period, minus its costs of
services for such period, and minus its selling, general and administrative
costs for such period, but excluding therefrom all extraordinary gains or
losses, as determined in accordance with GAAP.
"Parent" means Equifax Inc., a Georgia corporation, and its successors
and permitted assigns.
"Parent Guaranty" means the Guaranty Agreement dated as of even date
herewith substantially in the form of Exhibit J, executed by Parent in favor of
---------
the Agent, for the benefit of the Banks, unconditionally Guaranteeing the
payment of all obligations of the other Borrowers hereunder, under the Notes and
under the other Loan Documents executed by them.
"Participant" has the meaning set forth in Section 9.08(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Performance Pricing Determination Date" has the meaning set forth in
Section 2.06(a).
"Person" means an individual, a corporation, a partnership, an
unincorporated association, a trust or any other entity or organization,
including, but not limited to, a government or political subdivision or an
agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by a member of the
Controlled Group for employees of any member of the Controlled Group or (ii)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
a member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding 5 plan years made contributions.
"Prime Rate" refers to that interest rate so denominated and set by
Wachovia from time to time as an interest rate basis for borrowings. The Prime
Rate is but one of several interest rate bases used by Wachovia. Wachovia lends
at interest rates above and below the Prime Rate.
<PAGE>
"Principal Officer" means any of the Authorized Officers or the
General Counsel of the Parent.
"Prior Credit Agreement" means that certain $550,000,000 Credit
Agreement by and among the Parent, Wachovia as agent, and the Banks party
thereto, dated as of August 2, 1995.
"Properties" means all real property owned, leased or otherwise used
or occupied by any Borrower or any Consolidated Subsidiary, wherever located.
"Redeemable Preferred Stock" of any Person means any preferred stock
issued by such Person which is at any time prior to the Termination Date either
(i) mandatorily redeemable (by sinking fund or similar payments or otherwise) or
(ii) redeemable at the option of the holder thereof.
"Refunding Loan" means a new Syndicated Loan made on the day on which
an outstanding Syndicated Loan is maturing or being converted to a Fixed Rate
Borrowing, if and to the extent that the proceeds thereof are used entirely for
the purpose of paying such maturing Loan or Loan being converted, excluding any
difference between the amount of such maturing Loan or Loan being converted and
any greater amount being borrowed on such day and actually either being made
available to the Borrower pursuant to Section 2.02(c) or remitted to the Agent
as provided in Section 2.12, in each case as contemplated in Section 2.02(d).
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation G" means Regulation G of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation T" means Regulation T of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System, as in effect from time
<PAGE>
to time, together with all official rulings and interpretations issued
thereunder.
"Required Banks" means at any time Banks having at least 51% of the
Aggregate Commitments or, if the Commitments are no longer in effect, Banks
holding at least 51% of the Aggregate Outstanding Loans.
"Restricted Investments" means Investments in joint ventures and in
Subsidiaries of the Parent which are not Consolidated Subsidiaries. Restricted
Investments shall not include Investments made in the acquisition of a Person
which becomes a Consolidated Subsidiary upon the closing of such acquisition.
"Reuters Screen" means, when used in connection with any designated
page and the London Interbank Offered Rate, the display page so designated on
the Reuter Monitor Money Rates Service (or such other page as may replace that
page on that service for the purpose of displaying rates comparable to the
London Interbank Offered Rate).
"Short-Term Debt" means at any date any Consolidated Debt (including,
without limitation, any subordinated Debt) which matures less than one year
after such date.
"Spin Off" means the distribution to the Parent's shareholders of the
Parent's Insurance Services Group, which distribution became effective on August
7, 1997.
"Stated Maturity Date" means, with respect to any Money Market Loan,
the Stated Maturity Date therefor specified by the Bank in the applicable Money
Market Quote.
"Subsidiaries' Assets and Liabilities" has the meaning set forth in
the CSC Agreement.
"Subsidiary" means any corporation or other entity of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by the Parent.
"Swing Loan" means a Loan made by Wachovia to the applicable Borrower
pursuant to Section 2.01(b) bearing interest at either the Base Rate (plus the
Applicable Margin, if any) or the Wachovia Alternative Rate.
"Swing Loan Note" means the promissory note of each of the Borrowers,
substantially in the form of Exhibit A-2, evidencing the obligation of the
-----------
Borrowers to repay the Swing
<PAGE>
Loans, together with all amendments, consolidations, modifications, renewals,
and supplements thereto.
"Syndicated Borrowing" has the meaning set forth in the definition of
"Borrowing."
"Syndicated Dollar Borrowing" has the meaning set forth in the
definition of "Borrowing."
"Syndicated Dollar Loans" means Loans made in Dollars by all of the
Banks at the same time pursuant to Section 2.01(a), which may be either Base
Rate Loans or Euro-Dollar Loans.
"Syndicated Dollar Notes" means promissory notes of each of the
Borrowers, substantially in the form of Exhibit A-1, evidencing the obligation
-----------
of the Borrowers to repay the Syndicated Dollar Loans, together with all
amendments, consolidations, modifications, renewals, and supplements thereto.
"Syndicated Foreign Currency Borrowing" has the meaning set forth in
the definition of "Borrowing."
"Syndicated Foreign Currency Loans" means Foreign Currency Loans made
in a Foreign Currency by all of the Banks at the same time pursuant to Section
2.01(a).
"Syndicated Foreign Currency Notes" means promissory notes of each of
the Borrowers, substantially in the form of Exhibit A-4, evidencing the
-----------
obligation of the Borrowers to repay the Syndicated Foreign Currency Loans,
together with all amendments, consolidations, modifications, renewals, and
supplements thereto.
"Syndicated Loans" means Syndicated Dollar Loans or Syndicated Foreign
Currency Loans, or either or both of them, as the context requires.
"Synthetic Lease" means any operating lease under GAAP for which the
lessee retains or obtains federal tax ownership of the property leased.
"Synthetic Lease Obligations" means any and all liabilities,
indebtedness, rent, and all other obligations of the Parent or any Consolidated
Subsidiary owed under any Synthetic Lease.
"Taxes" has the meaning set forth in Section 2.12(c).
"Telerate" means, when used in connection with any designated page and
IBOR, the display page so designated on the Dow Jones Telerate Service (or such
other page as may replace
<PAGE>
that page on that service for the purpose of displaying rates comparable to
IBOR).
"Termination Date" means November 21, 2002.
"Third Parties" means all lessees, sublessees, licensees and other
users of the Properties, excluding those users of the Properties in the ordinary
course of the Borrower's business and on a temporary basis.
"Transferee" has the meaning set forth in Section 9.08(d).
"U.K. Tax Form" has the meaning set forth in Section 2.12(d).
"Unused Commitment" means at any date, with respect to any Bank, an
amount equal to its Commitment less the aggregate outstanding principal amount
of its Syndicated Loans, excluding therefrom, however, with respect to Wachovia,
the Swing Loan.
"Wachovia" means Wachovia Bank, N.A., a national banking association,
and its successors.
"Wachovia Alternative Rate" means each interest rate per annum as may
be agreed between the Borrower and Wachovia from time to time.
"Wholly Owned Subsidiary" means any Subsidiary all of the shares of
capital stock or other ownership interests of which (except directors'
qualifying shares, or, in the case of any Subsidiary which is not organized or
created under the laws of the United States of America or any state thereof or
the District of Columbia, such nominal ownership interests which are required to
be held by third parties under the laws of the foreign jurisdiction under which
such Subsidiary was incorporated or organized) are at the time directly or
indirectly owned by the Parent.
SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
-----------------------------------
specified herein, all terms of an accounting character used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared, in
accordance with GAAP, applied on a basis consistent (except for changes
concurred in by the Parent's and its Consolidated Subsidiaries' independent
public accountants or otherwise required by a change in GAAP) with the most
recent audited consolidated financial statements of the Parent and its
Consolidated Subsidiaries delivered to the Banks, unless with respect to any
such change concurred in by the Parent's
<PAGE>
independent public accountants or required by GAAP in determining compliance
with any of the provisions of this Agreement or any of the other Loan Documents:
(i) the Parent shall have objected to determining such compliance on such basis
at the time of delivery of such financial statements, or (ii) the Required Banks
shall so object in writing within 30 days after the delivery of such financial
statements, in either of which events such calculations shall be made on a basis
consistent with those used in the preparation of the latest financial statements
as to which such objection shall not have been made (which, if objection is made
in respect of the first financial statements delivered under Section 5.01
hereof, shall mean the financial statements referred to in Section 4.04).
SECTION 1.03. References. Unless otherwise indicated, references in
----------
this Agreement to "Articles", "Exhibits", "Schedules", "Sections" and other
Subdivisions are references to articles, exhibits, schedules, sections and other
subdivisions hereof.
SECTION 1.04. Use of Defined Terms. All terms defined in this
--------------------
Agreement have the same defined meanings when used in any of the other Loan
Documents, unless otherwise defined therein or unless the context shall require
otherwise.
SECTION 1.05. Terminology. All personal pronouns used in this
-----------
Agreement, whether used in the masculine, feminine or neuter gender, shall
include all other genders; the singular includes the plural, and the plural
shall include the singular. Titles of Articles and Sections in this Agreement
are for convenience only, and neither limit nor amplify the provisions of this
Agreement. As used in this Agreement and in any certificate delivered pursuant
to Sections 3.01, 3.02 and 5.01, "knowledge" and "becomes aware" or words of
similar meaning shall mean, with respect to the Parent, any Borrower or
Subsidiary, that a Principal Officer (i) has actual knowledge of such matters,
or (ii) from all the facts and circumstances actually known to him at the time
in question he has reason to know such matters exist.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. (a) Syndicated Loans. Each Bank
------------------- ----------------
severally agrees, on the terms and conditions set forth herein, to make
Syndicated Loans (which may be, at the option of any relevant Borrower and
subject to the terms and conditions hereof, Syndicated Foreign Currency Loans or
Syndicated Dollar Loans, and Syndicated Dollar Loans may be Base Rate Loans or
Euro-Dollar Loans) to any of the Borrowers from
<PAGE>
time to time before the Termination Date; provided that immediately after each
--------
such Loan is made:
(i) the sum of the aggregate principal amount of Syndicated Dollar
Loans and the Dollar Equivalent of the aggregate principal amount of
Syndicated Foreign Currency Loans by such Bank to all Borrowers does not
exceed the amount of its Commitment, and
(ii) the aggregate outstanding principal amount of all Syndicated
Dollar Loans, Swing Loans, Dollar Money Market Loans, the Dollar Equivalent
of Syndicated Foreign Currency Loans, and the Dollar Equivalent of Foreign
Currency Money Market Loans does not exceed the aggregate amount of the
Commitments of all of the Banks.
Subject to the foregoing, and subject to the provisions of Section 2.11(c), the
Borrowers are permitted, subject to the terms and conditions hereof, to obtain
Loans up to the full aggregate amount of the Unused Commitments of the Banks.
The Dollar Equivalent of each Foreign Currency Loan on the date such Foreign
Currency Loan is disbursed is to be deemed to be the amount of such Foreign
Currency Loan outstanding for the purpose of calculating the unutilized portion
of the Commitments on the date of such disbursement. Each Fixed Rate Borrowing
under this Section is required to be in an aggregate principal amount of
$5,000,000 (or the Dollar Equivalent thereof in any Foreign Currency) or, with
respect to Syndicated Dollar Loans only, any larger multiple of $500,000 (except
that any such Borrowing may be in the aggregate amount of the Unused
Commitments) and is required to be made from the several Banks ratably in
proportion to their respective Commitments. Each Base Rate Borrowing under this
Section is required to be in an aggregate principal amount of $5,000,000 or any
larger multiple of $1,000,000 (except that any such Borrowing may be in the
aggregate amount of the Unused Commitments) and is required to be made from the
several Banks ratably in proportion to their respective Commitments. Within the
foregoing limits, the Borrowers may, through the Parent, borrow under this
Section, and each such Borrower may repay or, to the extent permitted by Section
2.10, prepay Syndicated Loans and reborrow under this Section at any time before
the Termination Date.
(b) Swing Loans. In addition to the foregoing, Wachovia will from time to
-----------
time, upon the request of the Parent, if the applicable conditions precedent in
Article III have been satisfied, make Swing Loans to any Borrower, in an
aggregate principal amount at any time outstanding not exceeding $30,000,000;
provided that, immediately after such Swing Loan is made, the conditions set
- --------
forth in clause (ii) of Section 2.01(a) must be satisfied. Each Swing Loan
Borrowing under this Section
<PAGE>
2.01(b) must be in an aggregate principal amount of $500,000 or any larger
multiple of $100,000. Within the foregoing limits, the Borrower may borrow under
this Section 2.01(b), prepay and reborrow under this Section 2.01(b) at any time
before the Termination Date. All Swing Loans must bear interest at the Base Rate
(plus the Applicable Margin, if any) or at the Wachovia Alternative Rate. At any
time, upon the request of Wachovia, each Bank other than Wachovia is required
to, on the third Domestic Business Day after such request is made, purchase a
participating interest in the outstanding Swing Loans in an amount equal to its
ratable share (based upon its respective Commitment) of such Swing Loans. On
such third Domestic Business Day, each Bank must immediately transfer to
Wachovia, in immediately available funds, the amount of its participation.
Whenever, at any time after Wachovia has received from any such Bank its
participating interest in a Swing Loan, the Agent receives any payment on
account thereof, the Agent will distribute to such Bank its participating
interest in such amount (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Bank's participating
interest was outstanding and funded); provided, however, that in the event that
-------- -------
such payment received by the Agent is required to be returned, such Bank will
return to the Agent any portion thereof previously distributed by the Agent to
it. Each Bank's obligation to purchase such participating interests is absolute
and unconditional and is not affected by any circumstance, including, without
limitation: (i) any set-off, counterclaim, recoupment, defense or other right
which such Bank or any other Person may have against Wachovia requesting such
purchase or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of a Default or an Event of Default or the termination of the
Commitments; (iii) any adverse change in the condition (financial or otherwise)
of the Borrower, the Parent or any other Person; (iv) any breach of this
Agreement by the Borrower or any other Bank; or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
The Swing Loans of Wachovia are to be deemed to be usage of the Commitments for
the purpose of calculating availability pursuant to Section 2.01(a)(ii), but
will not reduce Wachovia's or any Bank's obligation to lend its pro rata share
of the remaining Unused Commitment.
SECTION 2.02. Method of Borrowing. (a) The Parent shall give the
-------------------
Agent notice (a "Notice of Borrowing"), which shall be substantially in the form
of Exhibit E, prior to 10:30 A.M. (Atlanta, Georgia time) on the same Domestic
---------
Business Day for Base Rate Borrowings and 9:30 A.M. (Atlanta, Georgia time) for
Euro-Dollar Borrowings and Syndicated Foreign Currency Borrowings with at least
2 Euro-Dollar Business Days before each Euro-Dollar Borrowing and at least 3
Foreign Currency Business
<PAGE>
Days before each Syndicated Foreign Currency Borrowing, specifying:
(i) the identity of the Borrower, the country from which such Borrower
will make a Borrowing, and the date of such Syndicated Borrowing, which
shall be a Domestic Business Day in the case of a Domestic Borrowing or a
Euro-Dollar Business Day in the case of a Euro-Dollar Borrowing, or a
Foreign Currency Business Day in the case of a Foreign Currency Borrowing;
(ii) the aggregate amount of such Syndicated Borrowing;
(iii) whether the Loans comprising such Borrowing are to be Syndicated
Dollar Loans, Swing Loans or Syndicated Foreign Currency Loans, and (A) if
such Loans are to be Syndicated Dollar Loans, whether they are to be Base
Rate Loans or Euro-Dollar Loans, and (B) if such Loans are to be Syndicated
Foreign Currency Loans, specifying the Foreign Currency; and
(iv) in the case of a Fixed Rate Borrowing, the duration of the
Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period.
(b) Upon receipt of a Notice of Borrowing, the Agent shall promptly notify
each Bank of the contents thereof and of such Bank's ratable share of such
Borrowing (unless it is a Swing Loan Borrowing) and such Notice of Borrowing,
once received by the Agent, shall not thereafter be revocable by the Parent or
any Borrower.
(c) Not later than 11:00 A.M. (Atlanta, Georgia time) on the date of each
Syndicated Borrowing denominated in Dollars, each Bank must (except as provided
in paragraph (d) of this Section) make available its ratable share of such
Borrowing, in Federal or other funds immediately available in Atlanta, Georgia,
to the Agent at its address referred to in Section 9.01, or if such Borrowing is
a Foreign Currency Borrowing, each Bank must (except as provided in paragraph
(d) of this Section) make available its ratable share of such Borrowing,
immediately available at such office or at a correspondent bank as the Agent has
previously specified in a notice to each Bank, in such Foreign Currency and no
later than such local time as is necessary for such funds to be received and
transferred to the Borrower for same day value on the date of the Borrowing.
Unless the Agent determines that any applicable condition specified in Article
III has not been satisfied, the Agent will make the funds so received from the
Banks available to the Borrower by no later than 4:00 P.M. (Atlanta, Georgia
time) at the Agent's address referred to in Section 9.01, or such other address
as the Agent and the Parent
<PAGE>
agree, in each case in the type of funds received by the Agent from the Banks.
Unless the Agent receives notice from a Bank, at the Agent's address referred to
in or specified pursuant to Section 9.01, no later than 4:00 P.M. (local time at
such address) on the Domestic Business Day before the date of a Borrowing
stating that such Bank will not make a Loan in connection with such Borrowing,
the Agent shall be entitled to assume that such Bank will make a Loan in
connection with such Borrowing and, in reliance on such assumption, the Agent
may (but shall not be obligated to) make available such Bank's ratable share of
such Borrowing to the Borrower for the account of such Bank. If the Agent makes
such Bank's ratable share available to the Borrower and such Bank does not in
fact make its ratable share of such Borrowing available on such date, the Agent
will be entitled to recover such Bank's ratable share from such Bank or the
Borrower (and for such purpose will be entitled to charge such amount to any
account of the Borrower maintained with the Agent), together with interest
thereon for each day during the period from the date of such Borrowing until
such sum will be paid in full at a rate per annum equal to the rate at which the
Agent determines that it obtained (or could have obtained) overnight Federal
funds to cover such amount for each such day during such period, provided that
--------
any such payment by the Borrower of such Bank's ratable share and interest
thereon will be without prejudice to any rights that the Borrower may have
against such Bank. If the Agent does not exercise its option to advance funds
for the account of such Bank, it will forthwith notify the Borrower of such
decision. Unless Wachovia has received prior written notice of a Default,
Wachovia will make available to the Borrower at Wachovia's Lending Office the
amount of any such Borrowing which is a Swing Loan Borrowing by no later than
4:00 P.M. (Atlanta, Georgia time).
(d) If any Bank makes a new Syndicated Loan hereunder on a day on which the
Borrower is to repay all or any part of an outstanding Loan from such Bank, such
Bank will apply the proceeds of its new Syndicated Loan to make such repayment
as a Refunding Loan and only an amount equal to the difference (if any) between
the amount being borrowed and the amount of such Refunding Loan shall be made
available by such Bank to the Agent as provided in paragraph (c) of this
Section, or remitted by the Borrower to the Agent as provided in Section 2.12 as
the case may be; provided, however, that if the Loan which is to be repaid is a
-------- -------
Syndicated Foreign Currency Loan, the foregoing provisions shall apply only if
the new Loan is to be made in the same Foreign Currency.
(e) Notwithstanding anything to the contrary contained in this Agreement,
no Fixed Rate Borrowing may be made if there shall have occurred a Default or an
Event of Default, which Default or Event of Default shall not have been cured or
waived,
<PAGE>
and in such case all Refunding Loans will be made as Base Rate Loans thereafter
(but shall bear interest at the Default Rate, if applicable).
(f) In the event that a Notice of Borrowing fails to specify whether the
Loans comprising such Borrowing are to be Base Rate Loans, Euro-Dollar Loans or
Syndicated Foreign Currency Loans, or fails to include any other information
required in connection therewith as set forth on the form of Notice of
Borrowing, such Loans shall be made as Base Rate Loans. If the Borrower is
otherwise entitled under this Agreement to repay any Loans maturing at the end
of an Interest Period applicable thereto with the proceeds of a new Borrowing,
and the Borrower fails to repay such Loans using its own moneys and fails to
give a Notice of Borrowing in connection with such new Borrowing, a new
Borrowing shall be deemed to be made on the date such Loans mature in an amount
equal to the principal amount of the Loans so maturing, and the Loans comprising
such new Borrowing shall be Base Rate Loans. In the event such maturing Loans
are Syndicated Foreign Loans, the new Borrowing will be in the Dollar Equivalent
of such maturing Loans.
(g) Notwithstanding anything to the contrary contained herein, there shall
not be more than 9 interest rates (including the Applicable Margins) applicable
to the Fixed Rate Loans at any given time.
SECTION 2.03. Money Market Loans. (a) In addition to making
------------------
Syndicated Borrowings or Swing Loan Borrowings, a Borrower may, through the
Parent, as set forth in this Section 2.03, request the Banks to make offers to
make Money Market Borrowings available to such Borrower, which may be Dollar
Money Market Borrowings or Foreign Currency Money Market Borrowings. The Banks
may, but shall have no obligation to, make such offers and the Borrower may, but
shall have no obligation to, accept any such offers in the manner set forth in
this Section 2.03, provided that:
--------
(i) the number of interest rates applicable to Money Market Loans
which may be outstanding at any given time is subject to the provisions of
Section 2.02(g);
(ii) after giving effect to any Money Market Borrowings, the
conditions set forth in clause (ii) of Section 2.01(a) are satisfied; and
(iii) the Money Market Loans of any Bank will be deemed to be usage of
the Commitments for the purpose of calculating availability pursuant to
Section 2.01(a)(ii) and 2.03(a)(ii), but will not reduce such Bank's
obligation to lend its pro rata share of the remaining Unused Commitment.
<PAGE>
(b) When a Borrower wishes to request offers to make Money Market Loans,
the Parent (on behalf of such Borrower) shall give the Agent (which shall
promptly notify the Banks) notice substantially in the form of Exhibit H hereto
---------
(a "Money Market Quote Request") so as to be received no later than:
(i) 11:00 A.M. (Atlanta, Georgia time) at least 3 Domestic Business
Days, with respect to Dollar Money Market Borrowings; and
(ii) 9:30 A.M. (Atlanta, Georgia time) at least 3 Foreign Currency
Business Days with respect to Foreign Currency Money Market Loans;
prior to the date of the Money Market Borrowing proposed therein (or such other
time and date as the Parent and the Agent, with the consent of the Required
Banks, may agree), specifying:
(A) the identity of the Borrower, whether such Money Market
Borrowing is to be a Dollar Money Market Borrowing or a Foreign
Currency Money Market Borrowing, and if the latter, specifying the
Foreign Currency of such Foreign Currency Money Market Borrowing,
together with the proposed date of such Money Market Borrowing, which
shall be (x) with respect to a Dollar Money Market Borrowing, a
Domestic Business Day and (y) with respect to a Foreign Currency Money
Market Borrowing, a Foreign Currency Business Day (the "Money Market
Borrowing Date");
(B) the maturity date (or dates) (each a "Stated Maturity
Date") for repayment of each Money Market Loan to be made as part of
such Money Market Borrowing (which Stated Maturity Date shall be that
date occurring (x) with respect to a Dollar Money Market Borrowing,
not less than 7 days but not greater than 180 days from the date of
such Money Market Borrowing and (y) with respect to a Foreign Currency
Money Market Borrowing, not less than 7 days but not greater than 60
days from the date of such Money Market Borrowing); provided that the
--------
Stated Maturity Date for any Money Market Loan may not extend beyond
the Termination Date (as in effect on the date of such Money Market
Quote Request); and
(C) the aggregate amount of principal to be requested by the
Borrower as a result of such Money Market Borrowing, which shall be at
least (x) with respect to Dollar Money Market Loans, $5,000,000 (and
in larger integral multiples of $1,000,000 and (y) with respect to
Foreign Currency Money Market Loans, the
<PAGE>
Dollar Equivalent of $5,000,000 (and in larger integral multiples of
the Dollar Equivalent of $1,000,000), but in each case shall not cause
the limits specified in Section 2.03(a) to be violated.
The Parent (on behalf of such Borrower) may request offers to make Money Market
Loans having up to 2 different Stated Maturity Dates in a single Money Market
Quote Request; provided that the request for each separate Stated Maturity Date
--------
shall be deemed to be a separate Money Market Quote Request for a separate Money
Market Borrowing. Except as otherwise provided in the immediately preceding
sentence, after the first Money Market Quote Request has been given hereunder,
no Money Market Quote Request shall be given until at least 3 Domestic Business
Days after the Agent has notified the applicable Banks pursuant to the first
sentence of Section 2.03(e).
(c) (i) Each Bank may, but shall have no obligation to, submit a response
containing an offer to make a Money Market Loan substantially in the form of
Exhibit I hereto (a "Money Market Quote") in response to any Money Market Quote
- ---------
Request; provided that, if the Borrower's request under Section 2.03(b)
--------
specified more than 1 Stated Maturity Date, such Bank may, but shall have no
obligation to, make a single submission containing a separate offer for each
such Stated Maturity Date and each such separate offer shall be deemed to be a
separate Money Market Quote. Each Money Market Quote must be submitted to the
Agent not later than 9:30 A.M. (Atlanta, Georgia time) 2 Domestic Business Days
prior to the Money Market Borrowing Date; provided that any Money Market Quote
--------
submitted by Wachovia may be submitted, and may only be submitted, if Wachovia
notifies the Borrower of the terms of the offer contained therein not later than
9:15 A.M. (Atlanta, Georgia time) 2 Domestic Business Days prior to the Money
Market Borrowing Date (or 15 minutes prior to the time that the other Banks must
have submitted their respective Money Market Quotes). Subject to Section 6.01,
any Money Market Quote so made shall be irrevocable except with the written
consent of the Agent given on the instructions of the Borrower.
(ii) Each Money Market Quote shall specify:
(A) the proposed Money Market Borrowing Date and the Stated
Maturity Date therefor;
(B) the principal amounts of the Money Market Loan which the
quoting Bank is willing to make for the applicable Money Market Quote,
which principal amounts: (x) may be greater than or less than the
Commitment of the quoting Bank; (y) shall be at least (A) with respect to a
Dollar Money Market Borrowing, $5,000,000 or a larger integral multiple of
$1,000,000, and (B)
<PAGE>
with respect to a Foreign Currency Money Market Borrowing, the Dollar
Equivalent of $5,000,000 or a larger integral multiple of the Dollar
Equivalent of $1,000,000; and (z) may not exceed the principal amount of
the Money Market Borrowing for which offers were requested;
(C) the rate of interest per annum (rounded upwards, if
necessary, to the nearest 1/100th of 1%) offered for each such Money Market
Loan (which in the case of a Foreign Currency Money Market Loan shall
consist of a margin over the Adjusted IBOR Rate as determined by the Agent
as set forth in Section 2.03(e) (which margin shall include any applicable
withholding taxes), such rate being hereinafter referred to as the "Money
Market Rate"); and
(D) the identity of the quoting Bank.
Unless otherwise agreed by the Agent and the Borrower, no Money Market Quote
shall contain qualifying, conditional or similar language or propose terms other
than or in addition to those set forth in the applicable Money Market Quote
Request (other than setting forth the maximum principal amounts of the Money
Market Loan which the quoting Bank is willing to make for the applicable
Interest Period) and, in particular, no Money Market Quote may be conditioned
upon acceptance by the Borrower of all (or some specified minimum) of the
principal amount of the Money Market Loan for which such Money Market Quote is
being made.
(d) The Agent shall as promptly as practicable after the Money Market Quote
is submitted (but in any event not later than 10:00 A.M. (Atlanta, Georgia
time)) 2 Domestic Business Days prior to the Money Market Borrowing Date, notify
the Parent (on behalf of such Borrower) of the terms (i) of any Money Market
Quote submitted by a Bank that is in accordance with Section 2.03(c) and (ii) of
any Money Market Quote that amends, modifies or is otherwise inconsistent with a
previous Money Market Quote submitted by such Bank with respect to the same
Money Market Quote Request. Any such subsequent Money Market Quote shall be
disregarded by the Agent unless such subsequent Money Market Quote is submitted
solely to correct a manifest error in such former Money Market Quote. The
Agent's notice to the Parent shall specify (A) the principal amounts of the
Money Market Borrowing for which offers have been received and (B) the
respective principal amounts and Money Market Rates so offered by each Bank
(identifying the Bank that made each Money Market Quote).
(e) Not later than 10:30 A.M. (Atlanta, Georgia time) 2 Domestic Business
Days prior to the Money Market Borrowing Date,
<PAGE>
the Parent (on behalf of such Borrower) shall notify the Agent of the Borrower's
acceptance or nonacceptance of the offers so notified to it pursuant to Section
2.03(d) and the Agent shall promptly notify each affected Bank. In the case of
acceptance, such notice shall specify the aggregate principal amount of offers
(for each Stated Maturity Date) that are accepted and the Adjusted IBOR Rate
determined by the Agent for the purposes thereof. The Parent (on behalf of such
Borrower) may accept any Money Market Quote in whole or in part; provided that:
--------
(i) the aggregate principal amount of each Money Market Borrowing may
not exceed the applicable amount set forth in the related Money Market
Quote Request;
(ii) the aggregate principal amount of each Money Market Loan
comprising a Money Market Borrowing shall be at least (x) with respect to a
Dollar Money Market Borrowing, 5,000,000 (and in larger multiples of
$1,000,000) and (y) with respect to a Foreign Currency Money Market
Borrowing, the Dollar Equivalent of $5,000,000 (and in larger multiples of
the Dollar Equivalent of $1,000,000), but in each case shall not cause the
limits specified in Section 2.03(a) to be violated;
(iii) acceptance of offers may only be made in ascending order of
Money Market Rates; and
(iv) the Parent (on behalf of such Borrower) may not accept any offer
where the Agent has advised the Borrower that such offer fails to comply
with Section 2.03(c)(ii) or otherwise fails to comply with the requirements
of this Agreement (including without limitation, Section 2.03(a)).
If offers are made by 2 or more Banks with the same Money Market Rates for a
greater aggregate principal amount than the amount in respect of which offers
are accepted for the related Stated Maturity Date, the principal amount of Money
Market Loans in respect of which such offers are accepted shall be allocated by
the Parent (on behalf of such Borrower) among such Banks as nearly as possible
in proportion to the aggregate principal amount of such offers. Determinations
by the Parent (on behalf of such Borrower) of the amounts of Money Market Loans
shall be conclusive in the absence of manifest error.
(f) Any Bank whose offer to make any Dollar Money Market Loan has been
accepted shall, not later than 12:00 P.M. (Atlanta, Georgia time) on the Money
Market Borrowing Date, make the appropriate amount of such Money Market Loan
available to the Agent at its address referred to in Section 9.01 in immediately
available funds. Any Bank whose offer to make any Foreign Money Market Loan has
been accepted shall, not later than 12:00 P.M.
<PAGE>
(Atlanta, Georgia time) on the Money Market Borrowing Date, make the appropriate
amount of such Money Market Loan available to the Agent in immediately available
funds at such office as the Agent has previously specified in a notice to each
Bank, in such Foreign Currency and no later than such local time as is necessary
for such funds to be received and transferred to the Borrower for same day value
on the date of the Borrowing. The amount so received by the Agent shall, subject
to the terms and conditions of this Agreement, be made available to the Borrower
on such date by depositing the same, in immediately available funds, not later
than 4:00 P.M. (Atlanta, Georgia time), in an account of such Borrower
maintained with Wachovia.
(g) After any Money Market Loan has been funded, the Agent shall notify the
Banks of the aggregate principal amount of the Money Market Quotes received and
the highest and lowest rates included in such Money Market Quotes.
SECTION 2.04. Notes. (a) The Loans of each Bank shall be evidenced by
-----
a single Syndicated Dollar Note, a single Syndicated Foreign Currency Note, a
single Dollar Money Market Note, and a single Foreign Currency Money Market Note
executed and delivered by each Borrower, each payable to the order of such Bank
for the account of its Lending Office in an amount equal to the original
principal amount of such Bank's Commitment. The Swing Loans shall be evidenced
by a single Swing Loan Note, payable to the order of Wachovia in the original
principal amount of $30,000,000.
(b) Upon receipt of each Bank's Notes pursuant to Section 3.01, the
Agent shall deliver such Notes to such Bank. Each Bank (or Wachovia, with
respect to the Swing Loan Note) shall record, and prior to any transfer of its
Notes shall endorse on the schedule forming a part thereof appropriate notations
to evidence the date, amount and maturity of, and effective interest rate for,
each Loan made by it, the date and amount of each payment of principal made by
the Borrower with respect thereto, whether such Loan is a Base Rate Loan, Euro-
Dollar Loan or Foreign Currency Loan, and if a Foreign Currency Loan, a
specification of the Foreign Currency, and such schedules of each Note shall
constitute rebuttable presumptive evidence of the principal amounts owing and
unpaid on such Bank's Note; provided that the failure of any Bank to make any
--------
such recordation or endorsement shall not affect the obligation of any Borrower
hereunder or under the Notes or the ability of any Bank to assign its Notes.
Each Bank is hereby irrevocably authorized by each Borrower so to endorse its
Notes and to attach to and make a part of any Note a continuation of any such
schedule as and when required.
<PAGE>
SECTION 2.05. Maturity of Loans. (a) Each Loan included in any
-----------------
Borrowing shall mature, and the principal amount thereof shall be due and
payable, on the last day of the Interest Period applicable to such Borrowing.
(b) Notwithstanding the foregoing, the outstanding principal amount of the
Loans, if any, together with all accrued but unpaid interest thereon, if any,
shall be due and payable on the Termination Date.
SECTION 2.06. Interest Rates. (a) "Applicable Margin" means:
--------------
(i) for the period commencing on the Closing Date to and including the
first Performance Pricing Determination Date, (x) for any Base Rate Loan, 0%,
and (y) for any Euro-Dollar Loan or Foreign Currency Loan, 0.155%; and
(ii) from and after each Performance Pricing Determination Date and until
the next Performance Pricing Determination Date, (x) for any Base Rate Loan, 0%,
and (y) for any Euro-Dollar Loan or Foreign Currency Loan, the percentage
determined on such Performance Pricing Determination Date by reference to the
table set forth below and the Debt Rating (or if there is no Debt Rating, the
percentage set forth under Level VI):
<TABLE>
<CAPTION>
==========================================================================================
Level I Level II Level III Level IV Level V Level VI
==========================================================================================
equal to equal to equal to equal to equal to
or greater or greater or greater or greater or greater less
than than than than than than
Debt Rating A/A2 A-/A3 BBB+/ BBB/ BBB-/ BBB-/
Baa1 Baa2 Baa3 Baa3
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Adjusted London 0.13% 0.155% 0.185% 0.215% 0.30% 0.425%
Interbank
Offered Rate + /
Adjusted IBOR
Rate +
==========================================================================================
</TABLE>
In determining interest for the purposes of this Section 2.06 and fees for
purposes of Section 2.07, the Parent and the Banks shall refer to the Debt
Rating from time to time. For purposes hereof, "Performance Pricing
Determination Date" shall mean each date on which the Debt Rating changes,
provided that: (i) for Fixed Rate Loans, changes in interest shall only be
- --------
effective for Interest Periods commencing on or after the Performance Pricing
Determination Date; and (ii) no fees or interest shall be decreased pursuant to
this Section 2.06 or Section 2.07 if a Default is in existence on the
Performance Pricing Determination Date. All determinations hereunder shall be
made by the Agent unless the Required Banks shall object to any
<PAGE>
such determination. The Parent shall represent its current Debt Rating in each
Notice of Borrowing and promptly notify the Agent of any change in the Debt
Rating at any other time.
(b) Each Base Rate Loan shall bear interest on the outstanding principal
amount thereof, for each day from the date such Loan is made until it becomes
due, at a rate per annum equal to the Base Rate for such day plus the Applicable
Margin. Such interest shall be payable for each Interest Period on the last day
thereof. Any overdue principal of and, to the extent permitted by applicable
law, overdue interest on any Base Rate Loan shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to the Default Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding principal
amount thereof, for the Interest Period applicable thereto, at a rate per annum
equal to the sum of the Applicable Margin plus the applicable Adjusted London
Interbank Offered Rate for such Interest Period. Such interest shall be payable
for each Interest Period on the last day thereof and, if such Interest Period is
longer than 3 months, at intervals of 3 months after the first day thereof. Any
overdue principal of and, to the extent permitted by law, overdue interest on
any Euro-Dollar Loan shall bear interest, payable on demand, for each day until
paid at a rate per annum equal to the Default Rate.
The "Adjusted London Interbank Offered Rate" applicable to any Interest
Period means a rate per annum equal to the quotient obtained (rounded upwards,
if necessary, to the next higher 1/100th of 1%) by dividing (i) the applicable
London Interbank Offered Rate for such Interest Period by (ii) 1.00 minus the
Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Euro-Dollar Loan
means for the Interest Period of such Euro-Dollar Loan, the rate per annum
determined on the basis of the offered rate for deposits in Dollars of amounts
equal or comparable to the principal amount of such Euro-Dollar Loan offered for
a term comparable to such Interest Period, which rates appear on Dow Jones
Markets, Inc. Page 3750 (formerly known as Dow Jones Telerate Service Page 3750)
as of 11:00 A.M. (London, England time), 2 Euro-Dollar Business Days prior to
the first day of such Interest Period, provided that (i) if more than one such
offered rate appears on the Dow Jones Markets Inc. Page, the "London Interbank
Offered Rate" will be the arithmetic average (rounded upward, if necessary, to
the next higher 1/100th of 1%) of such offered rates; (ii) if no such offered
rates appear on such page, the "London Interbank Offered Rate" for such Interest
Period will be the arithmetic average (rounded upward, if necessary, to the next
higher 1/16th of 1%) of rates quoted by not less than 2
<PAGE>
major banks in New York City, selected by the Agent, at approximately 10:00
A.M., New York City time, 2 Euro-Dollar Business Days prior to the first day of
such Interest Period, for deposits in Dollars offered to leading European banks
for a period comparable to such Interest Period in an amount comparable to the
principal amount of such Euro-Dollar Loan.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for the Agent (as the same may be
adjusted for any other Bank in accordance with Section 8.03) in respect of
"Eurocurrency liabilities" (or in respect of any other category of liabilities
which includes deposits by reference to which the interest rate on Euro-Dollar
Loans is determined or any category of extensions of credit or other assets
which includes loans by a non-United States office of any Bank to United States
residents). The Adjusted London Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of any change in the Euro-Dollar
Reserve Percentage.
(d) Each Money Market Loan shall bear interest on the outstanding principal
amount thereof, for each day from the date such Money Market Loan is made until
it becomes due, at a rate per annum equal to the applicable Money Market Rate
set forth in the relevant Money Market Quote, which, if such Money Market Loan
is a Foreign Currency Money Market Loan, shall be the Adjusted IBOR Rate plus
the margin determined by each Bank in connection with its Money Market Quote.
Such interest shall be payable on the Stated Maturity Date thereof, and, if the
Stated Maturity Date occurs more than 90 days after the date of the relevant
Money Market Loan, at intervals of 90 days after the first day thereof. Any
overdue principal of and, to the extent permitted by law, overdue interest on
any Money Market Loan shall bear interest, payable on demand, for each day until
paid at a rate per annum equal to the Default Rate.
(e) Each Foreign Currency Loan (other than Foreign Currency Money Market
Loans) shall bear interest on the outstanding principal amount thereof, for the
Interest Period applicable thereto, at a rate per annum equal to the sum of the
Applicable Margin plus the applicable Adjusted IBOR Rate for such Interest
Period. Such interest shall be payable for each Interest Period on the last day
thereof and, if such Interest Period is longer than 3 months, at intervals of 3
months after the first day thereof. Any overdue principal of and, to the extent
permitted by law, overdue interest on any Foreign Currency Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the Default Rate.
<PAGE>
"Adjusted IBOR Rate" means, with respect to each Foreign Currency Loan, the
sum of (i) the rate obtained by dividing (A) IBOR for such Interest Period by
(B) a percentage equal to 1 minus the then stated maximum rate (stated as a
-----
decimal) of all reserves requirements (including, without limitation, any
marginal, emergency, supplemental, special or other reserves) applicable to the
Bank providing the Money Market Quote of the Federal Reserve System as defined
in Regulation D (or against any successor category of liabilities as defined in
Regulation D), plus (ii) if the relevant Foreign Currency Loan is in British
----
pounds sterling, a percentage sufficient to compensate the Bank providing the
Money Market Quote for the cost of complying with any reserves, liquidity and/or
special deposit requirements of the Bank of England directly or indirectly
affecting the maintenance or funding of such Foreign Currency Loan.
"IBOR" means, with respect to each Foreign Currency Loan, the offered rate
for deposits in the applicable Foreign Currency, for a period comparable to the
Interest Period and in an amount comparable to the amount of such Foreign
Currency Loan appearing under the British Association Settlement Rate found on
the Reuters Screen on pages FRBD, FRBE, FRBF, FRBG and FRBH, as of 11:00 A.M.
(London, England time) on the day that is two Foreign Currency Business Days
prior to the date such Foreign Currency Loan is made.
(f) The Agent shall determine each interest rate applicable to the Loans
hereunder. The Agent shall give prompt notice to the Borrower and the Banks by
telecopier of each rate of interest so determined, and its determination thereof
shall be conclusive in the absence of manifest error.
(g) After the occurrence and during the continuance of a Default, the
principal amount of the Loans (and, to the extent permitted by applicable law,
all accrued interest thereon) may, at the election of the Required Banks, bear
interest at the Default Rate.
SECTION 2.07. Fees. (a) The Borrower shall pay to the Agent, for the
----
ratable account of each Bank, a facility fee, calculated in the manner provided
in the last paragraph of Section 2.06(a), on the aggregate amount of such Bank's
Commitment (whether such Commitment is used or unused), at a rate per annum
equal to: (i) for the period commencing on the Closing Date to and including the
first Performance Pricing Determination Date 0.07%; and (ii) from and after each
first Performance Pricing Determination Date and until the next Performance
Pricing Determination Date, the percentage determined on such Performance
Pricing Determination Date by reference to the table set forth below and the
Debt Rating (or if there is no Debt Rating, the percentage set forth under Level
VI):
<PAGE>
<TABLE>
<CAPTION>
===============================================================================================
Level I Level II Level III Level IV Level V Level VI
===============================================================================================
equal to equal to equal to equal to equal to
or greater or greater or greater or greater or greater less
than than than than than than
<S> <C> <C> <C> <C> <C> <C>
Debt Rating A/A2 A-/A3 BBB+/ BBB/ BBB-/ BBB-/
Baa1 Baa2 Baa3 Baa3
- -----------------------------------------------------------------------------------------------
Facility Fee 0.06% 0.07% 0.09% 0.11% 0.15% 0.20%
===============================================================================================
</TABLE>
Such facility fees shall accrue from and including the Closing Date to (but
excluding the Termination Date) and shall be payable on each March 31, June 30,
September 30 and December 31 and on the Termination Date.
(b) The Borrower shall pay to the Agent, for the account and sole
benefit of the Agent, such fees and other amounts at such times as set forth in
the Agent's Letter Agreement.
SECTION 2.08. Optional Termination or Reduction of Commitments. The
------------------------------------------------
Borrowers may, through the Parent, upon at least 3 Domestic Business Days'
notice to the Agent, terminate at any time, or proportionately reduce the Unused
Commitments from time to time by an aggregate amount of at least $5,000,000 or
any larger multiple of $1,000,000. If the Commitments are terminated in their
entirety, all accrued fees (as provided under Section 2.07) shall be due and
payable on the effective date of such termination.
SECTION 2.09. Mandatory Termination of Commitments. The Commitments
------------------------------------
shall terminate on the Termination Date and any Loans then outstanding (together
with accrued interest thereon) shall be due and payable on such date.
SECTION 2.10. Optional Prepayments. (a) The Borrowers may, upon at
--------------------
least 1 Domestic Business Days' notice to the Agent, prepay any Base Rate
Borrowing in whole at any time, or from time to time in part in amounts
aggregating at least $5,000,000 or any larger multiple of $1,000,000, by paying
the principal amount to be prepaid together with accrued interest thereon to the
date of prepayment. Each such optional prepayment shall be applied to prepay
ratably the Base Rate Loans of the several Banks included in such Base Rate
Borrowing.
(b) Except as provided in Section 8.02, the Borrower may not prepay all or
any portion of the principal amount of any Fixed Rate Loan prior to the end of
the applicable Interest Period thereof.
<PAGE>
(c) Upon receipt of a notice of prepayment pursuant to this Section 2.10,
the Agent shall promptly notify each Bank of the contents thereof and of such
Bank's ratable share of such prepayment and such notice, once received by the
Agent, shall not thereafter be revocable by the Borrower.
SECTION 2.11. Mandatory Prepayments and Repayments. (a) On each date
------------------------------------
on which the Commitments are reduced pursuant to Section 2.08, the Borrower
shall repay or prepay such principal amount of the outstanding Loans, if any
(together with interest accrued thereon), as may be necessary so that after such
repayment or payment the Aggregate Outstanding Loans do not exceed the Aggregate
Commitments as then reduced.
(b) If the Agent determines at any time (either on its own initiative or at
the insistence of any Bank) that the aggregate principal amount of the Foreign
Currency Loans outstanding (after converting each such Foreign Currency Loan to
its Dollar Equivalent on the date of such calculation) at any time exceeds 105%
of the amount of the aggregate Commitments less the outstanding aggregate amount
of all Syndicated Dollar Loans, Dollar Money Market Loans and Swing Loans, then
upon 5 Foreign Currency Business Days' written notice from the Agent to the
Parent, the Borrowers shall prepay an aggregate principal amount of Loans
sufficient to bring the Aggregate Outstanding Loans to an amount not exceeding
100% of the amount of the Aggregate Commitments. Nothing in the foregoing
requires the Agent to make any such calculation unless expressly requested to do
so by the Required Banks, except as provided below. All such prepayments shall
be applied in the following order: (i) first to Swing Loans; (ii) then to other
Base Rate Loans; (iii) then to Euro-Dollar Loans; (iv) then to Syndicated
Foreign Currency Loans; (v) then to Dollar Money Market Loans, and (vi) lastly,
to Foreign Currency Money Market Loans.
(c) Notwithstanding any provision in Section 2.01 or 2.11 to the contrary,
if at the time of receipt of any Notice of Borrowing or Money Market Quote
Request, the Aggregate Outstanding Loans is equal to or greater than 66 and 2/3%
of the Aggregate Commitments, then the Dollar Equivalent of each Foreign
Currency Loan shall be calculated by the Agent as of such date, rather than as
of the date such Foreign Currency Loans were disbursed, and in the event that,
as a result of such calculation, the Aggregate Outstanding Loans exceeds the
Aggregate Commitments, then (i) no additional Borrowings shall be permitted and
(ii) the Foreign Currency Loans shall be subject to mandatory repayment as
provided in Section 2.11(b).
SECTION 2.12. General Provisions as to Payments. (a) The Borrower
---------------------------------
shall make each payment of principal of, and
<PAGE>
interest on, the Loans and of fees hereunder, not later than 11:00 A.M.
(Atlanta, Georgia time) on the date when due, in Federal or other funds (subject
to paragraph (c) below with respect to Foreign Currency Loans) immediately
available in Atlanta, Georgia, to the Agent at its address referred to in
Section 9.01. The Agent will promptly distribute to each Bank its ratable share
of each such payment received by the Agent for the account of the Banks.
(b) Whenever any payment of principal of, or interest on, the Domestic
Loans or of fees hereunder shall be due on a day which is not a Domestic
Business Day, the date for payment thereof shall be extended to the next
succeeding Domestic Business Day. Whenever any payment of principal of, or
interest on, the Euro-Dollar Loans or the Foreign Currency Loans, shall be due
on a day which is not a Euro-Dollar Business Day or Foreign Currency Business
Day, as the case may be, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day or Foreign Currency Business Day, as
the case may be, unless such Euro-Dollar Business Day or Foreign Currency
Business Day, as the case may be, falls in another calendar month, in which case
the date for payment thereof shall be the next preceding Euro-Dollar Business
Day or Foreign Currency Business Day, as the case may be.
(c) All payments of principal and interest with respect to Foreign Currency
Loans shall be made in the Foreign Currency in which the related Foreign
Currency Loan was made.
(d) (i) All payments of principal, interest and fees and all other
amounts to be made by a Borrower pursuant to this Agreement with respect to any
Loan or fee relating thereto shall be paid without deduction for, and free from,
any tax, imposts, levies, duties, deductions, or withholdings of any nature now
or at anytime hereafter imposed by the United States, the United Kingdom, or any
other governmental authority or by any other taxing authority, excluding, in the
case of each Bank, (A) taxes imposed on or measured by its net income, and
franchise or branch profit taxes imposed on it, by the jurisdiction under the
laws of which such Bank is organized or any political subdivision thereof, (B)
taxes imposed on its income (except as expressly provided below), and franchise
and branch profit taxes imposed on it, by the jurisdiction of such Bank's
applicable Lending Office or any political subdivision thereof, and (C) in the
case of Foreign Currency Money Market Loans, any applicable withholding taxes
pertaining thereto (all such non-excluded taxes, imposts, levies, duties,
deductions or withholdings of any nature being "Taxes"). In the event that any
Borrower is required by applicable law to make any such withholding or deduction
of Taxes with respect to any Loan or fee or other amount, such Borrower shall
pay such deduction or withholding to the applicable taxing
<PAGE>
authority, shall promptly furnish to any Bank in respect of which such deduction
or withholding is made all receipts and other documents evidencing such payment,
and shall pay to such Bank additional amounts as may be necessary in order that
the amount received by such Bank, after deduction of the required withholding or
other payment and payment of any Tax (including income taxes with respect to
withholding tax payments) or excluded tax described in this paragraph imposed by
any jurisdiction with respect to such additional amounts, shall equal the amount
such Bank would have received had no such withholding or other payment been
made.
(ii) Each Bank that is organized under the laws of a jurisdiction other
than the United States of America or any state thereof or the District of
Columbia (each a "Non-U.S. Bank") agrees to furnish to the Parent and the Agent,
within 7 Domestic Business Days after it becomes a Bank hereunder, two (2)
copies of either U.S. Internal Revenue Service Form 4224 or U. S. Internal
Revenue Service Form 1001 or any successor forms thereto (wherein such Non-U.S.
Bank claims entitlement to complete exemption from or a reduced rate of U.S.
federal withholding tax on interest paid by the Borrowers hereunder) and to
provide to the Borrowers and the Agent a new Form 4224 or Form 1001 or any
successor forms thereto if any previously delivered form is found to be
incomplete or incorrect in any material respect or upon the obsolescence of any
previously delivered form; provided, however, that no Non-U.S. Bank shall be
-------- -------
required to furnish any such form under this paragraph if it is not entitled to
claim an exemption from or reduced rate of withholding under applicable law. At
any time a Non-U.S. Bank is not entitled to claim an exemption from or a reduced
rate of withholding under applicable law, such Non-U.S. Bank shall so inform the
Parent and the Agent.
(iii) No Borrower shall be required to pay any amounts pursuant to this
Section 2.12(d) to any Non-U.S. Bank for the account of such Non-U.S. Bank or
any Lending Office of such Non-U.S. Bank in respect of any United States
withholding taxes payable hereunder (and each Borrower, if required by law to do
so, shall be entitled to withhold such amounts and to pay such amounts to the
United States Internal Revenue Service) if the obligation to pay such additional
amounts would not have arisen but for the failure by such Non-U.S. Bank to
deliver the forms described in Section 2.12(d)(ii) (regardless of such Bank's
Lending Office), and such Non-U.S. Bank shall not be entitled to exemption from
deduction or withholding of United States federal income tax in respect of the
payment of any such sum by any Borrower hereunder for, in each case, any reason
other than a change in the United States law or regulations or any applicable
tax treaty or regulations or in the official interpretation of any such law,
treaty or regulations by any governmental authority charged with the
interpretation or administration thereof
<PAGE>
(whether or not having the force of law) after the date such Non-U.S. Bank
becomes a Bank hereunder.
(iv) (A) Each Bank that is not a United Kingdom Bank (as defined in
Section 840A of the United Kingdom Income and Corporation Taxes Act of 1988)
subject to United Kingdom corporation tax as respects interest payments to it
pursuant to this Agreement (each a "Non-U.K. Bank") shall deliver to the United
Kingdom Inland Revenue(whether directly, through the United States Internal
Revenue Service or such other appropriate channels), with copies sent
contemporaneously therewith to the Parent and the Agent, within 7 Domestic
Business Days after it becomes a Bank hereunder, a form 13-D or such other
appropriate official form (each, a "U.K. Tax Form") duly completed and signed by
such Bank establishing that such Non-U.K. Bank is entitled to exemption
(regardless of such Bank's Lending Office) from United Kingdom withholding tax
in respect of interest payments hereunder under a United Kingdom tax treaty with
the appropriate jurisdiction, or establishing that it is otherwise entitled to
receive payments without such withholding; provided, however, that no Non-U.K.
-------- -------
Bank shall be required to furnish any such documentation under this subparagraph
(A) if it is not entitled to claim an exemption from or reduced rate of
withholding under applicable law. At any time a Non-U.K. Bank is not entitled to
claim an exemption from or a reduced rate of withholding under applicable law,
such Non-U.K. Bank shall so inform the Parent and the Agent.
(B) Each Bank that is a United Kingdom Bank (as defined in Section 840A of
the United Kingdom Income and Corporation Taxes Act of 1988) (each a "U.K.
Bank") shall complete and deliver to the Parent and the Agent a statement signed
by an authorized signatory of such U.K. Bank, and other documentation reasonably
required to the effect that it is subject to United Kingdom corporation tax on
interest payable to it pursuant to this Agreement.
(C) No Borrower shall be required to pay any additional amount to any Non-
U.K. Bank or U.K. Bank in respect of United Kingdom withholding taxes under this
Section 2.12(d) if such Bank shall have failed to deliver (1) the U.K. Tax Form
as required under subparagraph (A) in the case of a Non-U.K. Bank, or (2) the
statement and other documentation under subparagraph (B) in the case of a U.K.
Bank; provided, however, that if a Non-U.K. Bank shall not have a Lending Office
-------- -------
in the United Kingdom and shall not be entitled to an exemption from United
Kingdom withholding tax under a treaty, each as of the time of a given payment
by Borrower hereunder, then Section 2.12(d)(i) shall not apply with respect to
such payment.
<PAGE>
(v) Within 90 days after receipt of the written request of the Borrower,
each Bank shall execute and deliver such certificates, forms or other documents,
which in each such case can be reasonably furnished by such Bank consistent with
the facts and which are reasonably necessary to assist any Borrower in applying
for refunds of Taxes remitted by such Borrower hereunder.
(vi) With respect to each Bank, the provisions of paragraph (i) of this
Section 2.12(d) shall apply to interest payments made by Borrowers with respect
to all Taxes other than United States Taxes and United Kingdom Taxes unless and
to the extent that such Bank is able to avoid or minimize any such amounts which
might be payable; provided, however, that this paragraph (vi) shall not apply
-------- -------
to the extent that any Bank determines that such efforts would be
disadvantageous to such Bank, as determined by such Bank and which
determination, if made in good faith, shall be binding and conclusive on all
parties hereto. Upon the reasonable request of any Borrower, each Bank agrees to
promptly execute and deliver appropriate documentation to such Borrower with
respect to all Taxes other than United States Taxes and United Kingdom Taxes
(except as otherwise provided in this Section 2.12) in order to eliminate or
reduce any such Taxes.
(vii) To the extent that the payment of any Bank's Taxes by any Borrower
hereunder gives rise from time to time to a Tax Benefit to such Bank in any
jurisdiction other than the jurisdiction which imposed such Taxes, such Bank
shall pay to such Borrower the amount of each such Tax Benefit so recognized or
received. The amount of each Tax Benefit and, therefore, payment to such
Borrower will be determined from time to time by the relevant Bank in its sole
discretion, which determination shall be binding and conclusive on all parties
hereto. Each such payment will be due and payable by such Bank to such Borrower
within a reasonable time after the filing of the tax return in which such Tax
Benefit is recognized or, in the case of any tax refund, after the refund is
received; provided, however, if at any time thereafter such Bank is required to
-------- -------
rescind such Tax Benefit or such Tax Benefit is otherwise disallowed or
nullified, the relevant Borrower shall promptly, after notice thereof from such
Bank, repay to such Bank the amount of such Tax Benefit previously paid to such
Bank and which has been rescinded, disallowed or nullified. For purposes
hereof, the term "Tax Benefit" shall mean the amount by which any Bank's income
tax liability for the taxable period in question is reduced below what would
have been payable had the relevant Borrower not been required to pay such Bank's
taxes hereunder.
(viii) Without prejudice to the survival of any other agreement of the
Borrowers hereunder, the agreements and obligations of the Borrowers and the
Banks contained in this
<PAGE>
Section 2.12(d) shall be applicable with respect to any Assignee, and any
calculations required by such provisions (A) shall be made based upon the
circumstances of such Assignee, and (B) constitute a continuing agreement and
shall survive the termination of this Agreement and the payment in full or
cancellation of the Notes.
SECTION 2.13. Computation of Interest and Fees. Interest on Swing Loans
--------------------------------
bearing interest at the Wachovia Alternative Rate and Dollar Money Market Loans
shall be computed on the basis of a year of 360 days and interest on Base Rate
Loans shall be computed on the basis of a year of 365/366 days, and in each such
case interest shall be paid for the actual number of days elapsed (including the
first day but excluding the last day). Interest on Euro-Dollar Loans and on
Foreign Currency Loans shall be computed on the basis of a year of 360 days
(except for any Foreign Currency Loans outstanding in British pounds sterling,
Australian dollars, or Canadian dollars, which shall be computed on the basis of
a year of 365 or 366 days, as the case may be) and paid for the actual number of
days elapsed, calculated as to each Interest Period from and including the first
day thereof to but excluding the last day thereof. Facility fees and any other
fees payable hereunder shall be computed on the basis of a year of 360 days and
paid for the actual number of days elapsed (including the first day but
excluding the last day).
SECTION 2.14. Election and Release of Borrowers. Any Wholly Owned
---------------------------------
Subsidiary (whether existing on the Closing Date or acquired or created
thereafter) described in clauses (ii) and (iii) of the definition of "Borrower"
may elect to become a Borrower hereunder at any time after delivering 10
Domestic Business Days' prior written notice thereof to the Agent and the Banks
and by executing and delivering to the Agent for delivery to each of the Banks
(i) an original Borrower Acknowledgment And Agreement in the form of Exhibit K,
---------
thereby becoming a party to this Agreement, and (ii) the other items described
in such Acknowledgment and Agreement, including, without limitation, the Notes
described therein. Any Borrower, other than the Parent, may elect to be released
as a Borrower hereunder at any time upon (i) payment in full of all Loans
outstanding to such Borrower in immediately available funds (including any
amounts owed in connection therewith under Article VIII) and (ii) execution and
delivery by such Borrower to the Agent of an original Borrower Notice of
Withdrawal in the form of Exhibit L.
---------
<PAGE>
ARTICLE III
CONDITIONS TO BORROWINGS
SECTION 3.01. Conditions to First Borrowing. The obligation of each
-----------------------------
Bank to make a Loan on the occasion of the first Borrowing (or in the event no
Borrowing is made on the Closing Date, on the Closing Date) is subject to the
satisfaction of the conditions set forth in Section 3.02 and receipt by the
Agent of the following (as to the documents described in paragraphs (a),(c), (d)
and (e) below (in sufficient number of counterparts for delivery of a
counterpart to each Bank and retention of one counterpart by the Agent):
(a) from each of the parties hereto either (i) a duly executed
counterpart of this Agreement signed by such party or (ii) a facsimile
transmission stating that such party has duly executed a counterpart of
this Agreement and sent such counterpart to the Agent;
(b) from the relevant Borrower described in the definition of
"Borrower", a duly executed Dollar Money Market Note and a duly executed
Foreign Currency Money Market Note, and from the relevant Borrower
described in the definition of "Borrower", a duly executed Syndicated
Dollar Note and a duly executed Syndicated Foreign Currency Note, in each
case for the account of each Bank complying with the provisions of Section
2.04; and from the Borrower a duly executed Swing Loan Note;
(c) (i) with respect to the Parent, an opinion letter of Kilpatrick
Stockton LLP, counsel for the Parent, together with an opinion of the
Parent's General Counsel, both dated as of the Closing Date, which taken
together cover substantially the opinions set forth in the form of opinion
attached as Exhibit B and covering such additional matters relating to the
---------
transactions contemplated hereby as the Agent or any Bank may reasonably
request, and (ii) with respect to any other Borrower, an opinion letter of
Kilpatrick Stockton LLP or such other counsel acceptable to the Agent dated
as of the Closing Date (or for the purposes of any delivery of any Borrower
Acknowledgment and Agreement after the Closing Date, as of the date
thereof), which cover substantially the opinions set forth in the form of
opinion attached as Exhibit B and covering such additional matters relating
---------
to the transactions contemplated hereby as the Agent or any Bank may
reasonably request, including, without limitation, with respect to
Borrowers located in jurisdictions outside of the state of Georgia,
opinions confirming that the provisions of Section 9.12 and 9.16 are
enforceable against such Borrower under the laws applicable
<PAGE>
to such jurisdiction to the extent public policy of such jurisdiction
permits;
(d) an opinion of Jones, Day, Reavis & Pogue, special counsel for the
Agent, dated as of the Closing Date, substantially in the form of Exhibit C
---------
and covering such additional matters relating to the transactions
contemplated hereby as the Agent may reasonably request;
(e) a certificate substantially in the form of Exhibit G (the "Closing
---------
Certificate"), dated as of the Closing Date, signed by an Authorized
Officer of the Parent, to the effect that (i) no Default has occurred and
is continuing on the Closing Date and (ii) the representations and
warranties of the Borrowers contained in Article IV are true on and as of
the Closing Date (x) as stated as to representations and warranties which
contain materiality limitations, and (y) and in all material respects as to
all other representations and warranties;
(f) a certificate of incumbency of each Borrower, signed by the
Secretary or an Assistant Secretary of each Borrower, certifying as to the
names, true signatures and incumbency of the officer or officers of the
Borrower authorized to execute and deliver the Loan Documents, and
certified copies of the following items: (i) each Borrower's Certificate of
Incorporation or equivalent organic document, (ii) each Borrower's Bylaws,
(iii) a certificate of the Secretary of State of each state of
incorporation of Parent and each domestic Borrower as to the corporate good
standing, respectively, of Parent and each Borrower, and, if available, a
comparable certificate from the appropriate governing authorities of each
foreign Borrower and (iv) the action taken by the Board of Directors of
each Borrower authorizing such Borrower's execution, delivery and
performance of this Agreement, the Notes and the other Loan Documents to
which such Borrower is a party;
(g) in the event of a Borrowing on the Closing Date, a Notice of
Borrowing or notification pursuant to Section 2.03(e) of acceptance of one
or more Money Market Quotes, as applicable;
(h) receipt by the Agent of a letter agreement whereby the Prior
Credit Agreement is terminated; and
(i) the fees payable pursuant to the Agent's Letter Agreement.
In addition, if any Borrower desires funding of a Fixed Rate Loan on the Closing
Date, the Agent shall have received, the requisite
<PAGE>
number of days prior to the Closing Date, a funding indemnification letter
satisfactory to it, pursuant to which (i) the Agent and the relevant Borrowers
shall have agreed upon the interest rate, amount of Borrowing and Interest
Period for such Fixed Rate Loan, and (ii) such Borrowers shall indemnify the
Banks from any loss or expense arising from the failure to close on the
anticipated Closing Date identified in such letter or the failure to borrow such
Fixed Rate Loan on such date.
SECTION 3.02. Conditions to All Borrowings. The obligation of each
----------------------------
Bank to make a Syndicated Loan or of Wachovia to make a Swing Loan, other than a
Refunding Loan, on the occasion of each Borrowing is subject to the satisfaction
of the following conditions except as expressly provided in the last sentence of
this Section 3.02:
(a) receipt by the Agent of a Notice of Borrowing.
(b) the fact that, immediately before and after such Borrowing, no
Default shall have occurred and be continuing;
(c) the fact that the representations and warranties of the Borrower
contained in Article IV of this Agreement (other than the representation
and warranty contained in Section 4.04(b), which is made only on and as of
the Closing Date) shall be true on and as of the date of such Borrowing (x)
as stated as to representations and warranties which contain materiality
limitations, and (y) and in all material respects as to all other
representations and warranties; and
(d) the fact that, immediately after such Borrowing, the conditions
set forth in clauses (i) and (ii) of Section 2.01(a) shall have been
satisfied.
Each Borrowing (both Syndicated and Money Market), other than of a
Refunding Loan, hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the truth and accuracy of the
facts specified in paragraphs (b), (c) and (d) of this Section.
<PAGE>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Parent represents and warrants, as to itself and the Subsidiaries,
and each of the Borrowers represents and warrants, as to itself, that:
SECTION 4.01. Corporate Existence and Power. Each Borrower is a
-----------------------------
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, is duly qualified to transact business
in every jurisdiction where the failure to qualify would have a Material Adverse
Effect, and has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.
SECTION 4.02. Corporate and Governmental Authorization; No
--------------------------------------------
Contravention. The execution, delivery and performance by each Borrower and the
- -------------
Parent of this Agreement, the Notes, the Parent Guaranty and the other Loan
Documents (i) are within such Borrower's corporate powers, (ii) have been duly
authorized by all necessary corporate action, (iii) require no action by or in
respect of or filing with, any governmental body, agency or official, (iv) do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the certificate of incorporation or by-laws of such Borrower
or of any agreement, judgment, injunction, order, decree or other instrument
binding upon such Borrower or any of the Subsidiaries, and (v) do not result in
the creation or imposition of any Lien on any asset of such Borrower or any of
the Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement and the Parent Guaranty
--------------
each constitute a valid and binding agreement of each Borrower and the Parent,
respectively, enforceable in accordance with its terms, and the Notes, and the
other Loan Documents, when executed and delivered in accordance with this
Agreement, will constitute valid and binding obligations of the Borrowers
parties thereto, enforceable in accordance with their respective terms, provided
--------
that the enforceability hereof and thereof is subject in each case to general
principles of equity and to bankruptcy, insolvency and similar laws affecting
the enforcement of creditors' rights generally.
SECTION 4.04. Financial Information. (a) The consolidated balance
---------------------
sheet of the Parent and its Consolidated Subsidiaries as of December 31, 1996
and the related consolidated statements of income, shareholders' equity and cash
flows for the Fiscal Year then ended, reported on by Arthur Andersen & Co.,
copies of which have been delivered to each of the Banks, and the unaudited
consolidated financial statements of the Parent for the
<PAGE>
interim period ended June 30, 1997, copies of which have been delivered to each
of the Banks, fairly present, in conformity with GAAP (except for year-end
adjustments and the absence of footnotes in the case of interim statements), the
consolidated financial position of the Parent and its Consolidated Subsidiaries
as of such dates and their consolidated results of operations and cash flows for
such periods stated.
(b) Since June 30, 1997 there has been no event, act, condition or
occurrence having a Material Adverse Effect. The parties hereto acknowledge and
agree that the Spin Off shall not constitute the occurrence of a Material
Adverse Effect.
SECTION 4.05. No Litigation. There is no action, suit or proceeding
-------------
pending against or affecting the Parent or any of the Subsidiaries before any
court or arbitrator or any governmental body, agency or official which could
reasonably be expected to have a Material Adverse Effect.
SECTION 4.06. Compliance with ERISA. Except as set forth in Schedule
---------------------
4.06, as the same may be revised from time to time, (i) the Parent and each
member of the Controlled Group have fulfilled their obligations under the
minimum funding standards of ERISA and the Code with respect to each Plan and
are in compliance in all material respects with the presently applicable
provisions of ERISA and the Code, and have not incurred any liability to the
PBGC or a Plan under Title IV of ERISA; and (ii) neither the Parent nor any
member of the Controlled Group is or ever has been obligated to any material
contribution to any Multiemployer Plan.
SECTION 4.07. Compliance with Laws; Payment of Taxes. Each Borrower
--------------------------------------
and Consolidated Subsidiary is in compliance with all applicable laws,
regulations and similar requirements of governmental authorities the failure to
comply with which would result in a Material Adverse Effect, except where such
compliance is being contested in good faith through appropriate proceedings.
There have been filed on behalf of each Borrower and Consolidated Subsidiary all
Federal, state and local income, excise, property and other material tax returns
which are required to be filed by them (or appropriate extensions of such
filings have been obtained) and all taxes due pursuant to such returns or
pursuant to any assessment received by or on behalf of each Borrower or any
Consolidated Subsidiary (which are not being contested in good faith by such
Person) have been paid. The charges, accruals and reserves on the books of each
Borrower and Consolidated Subsidiary in respect of taxes or other governmental
charges are, in the opinion of Parent and each Borrower, adequate. United
States federal income tax returns (where applicable) of each Borrower and
Consolidated Subsidiary have been examined and closed through the Fiscal Year
ended December 31, 1993.
<PAGE>
SECTION 4.08. Subsidiaries; Identification of Consolidated
--------------------------------------------
Subsidiaries. Each of the Consolidated Subsidiaries which is not a Borrower is
- ------------
a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, is duly qualified to transact
business in every jurisdiction where the failure to so qualify would have a
Material Adverse Effect, and has all corporate powers and all governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted in each case where the failure to have the same would
have a Material Adverse Effect. As of the Closing Date, the Parent has no
Subsidiaries except for those Subsidiaries listed on Schedule 4.08 which
accurately sets forth each such Subsidiary's complete name and jurisdiction of
incorporation, and which identifies Consolidated Subsidiaries as being such.
After the Closing Date, in the event that Parent's Subsidiaries are no longer
published in the Parent's annual reports filed with the Securities and Exchange
Commission, Schedule 4.08 shall be supplemented from time to time by the Parent,
with copies to the Agent and the Banks, to identify any additional Subsidiary
and any Subsidiary which has become a Consolidated Subsidiary and which has not
previously been shown as such on such annual reports or on Schedule 4.08 as
previously supplemented.
SECTION 4.09. Investment Company Act. Neither any Borrower nor any
----------------------
Subsidiary is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
SECTION 4.10. Public Utility Holding Company Act. Neither any Borrower
----------------------------------
nor any Subsidiary is a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company", as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended.
SECTION 4.11. Ownership of Property; Liens. Each Borrower and each
----------------------------
Consolidated Subsidiary has title to its properties sufficient for the conduct
of its business, and none of such property is subject to any Lien except as
permitted in Section 5.18.
SECTION 4.12. No Default. Neither any Borrower nor any Consolidated
----------
Subsidiary is in default under or with respect to any agreement, instrument or
undertaking to which it is a party or by which it or any of its property is
bound which could reasonably be expected to have or cause a Material Adverse
Effect. No Default or Event of Default has occurred and is continuing.
SECTION 4.13. Full Disclosure. All information heretofore furnished
---------------
by the Borrowers to the Agent or any Bank
<PAGE>
(including, without limitation, information contained in the Parent's form 10-K
annual report for Fiscal Year 1996 and form 10-Q quarterly report for the second
Fiscal Quarter of 1997) for purposes of or in connection with this Agreement or
any transaction contemplated hereby is, and all such information hereafter
furnished by the Borrowers to the Agent or any Bank will be, true, accurate and
complete in every material respect or based on reasonable estimates on the date
as of which such information is stated or certified.
SECTION 4.14. Environmental Matters. (a) Neither any Borrower nor any
---------------------
Consolidated Subsidiary is subject to any Environmental Liability which could
reasonably be expected to have or cause a Material Adverse Effect and neither
any Borrower nor any Consolidated Subsidiary has been designated as a
potentially responsible party under CERCLA or under any state statute similar to
CERCLA where the probable resulting liability would have a Material Adverse
Effect. Except as disclosed on Schedule 4.14, as revised from time to time, to
the knowledge of the Parent, none of the Properties has been identified on any
current or proposed (i) National Priorities List under 40 C.F.R. (S) 300, (ii)
CERCLIS list or (iii) any list arising from a state statute similar to CERCLA,
in each case under circumstances which have or could reasonably be expected to
have a Material Adverse Effect.
(b) Except as disclosed on Schedule 4.14, as revised from time to
time, to the knowledge of the Parent, no Hazardous Materials have been or are
being used, produced, manufactured, processed, treated, recycled, generated,
stored, disposed of, managed or otherwise handled at, or shipped or transported
to or from the Properties or are otherwise present at, on, in or under the
Properties, except for Hazardous Materials, such as cleaning solvents,
pesticides and other materials used, produced, manufactured, processed, treated,
recycled, generated, stored, disposed of, managed, or otherwise handled in
minimal amounts in the ordinary course of business in compliance with all
applicable Environmental Requirements, except in such instances where such
failure of compliance would not have a Material Adverse Effect.
(c) Except as disclosed on Schedule 4.14, as revised from time to
time, each Borrower, and each of the Subsidiaries has procured all Environmental
Authorizations necessary for the conduct of its business, and is in compliance
with all Environmental Requirements in connection with the operation of the
Properties and each Borrower's and each Consolidated Subsidiary's respective
businesses, except in such instances where such failure of compliance would not
have a Material Adverse Effect.
<PAGE>
SECTION 4.15. Capital Stock. All Capital Stock, debentures, bonds,
-------------
notes and all other securities of each Borrower and each Consolidated Subsidiary
presently issued and outstanding are validly and properly issued in accordance
with all applicable laws, including but not limited to, the "Blue Sky" laws of
all applicable states and the federal securities laws. Except as set forth in
Schedule 4.15, as revised from time to time, the issued shares of Capital Stock
of the Parent's Wholly Owned Subsidiaries which are owned by the Parent are
owned by the Parent free and clear of any Lien or adverse claim and at least a
majority of the issued shares of capital stock of each of the Parent's other
Subsidiaries (other than Wholly Owned Subsidiaries) is owned by the Parent free
and clear of any Lien or adverse claim.
SECTION 4.16. Margin Stock. Neither any Borrower nor any Subsidiary
------------
is engaged principally, or as one of its important activities, in the business
of purchasing or carrying any Margin Stock, and no part of the proceeds of any
Loan will be used for any purpose which violates, or which is inconsistent with,
the provisions of Regulation U or Regulation X.
SECTION 4.17. Insolvency. After giving effect to the execution and
----------
delivery of the Loan Documents and the making of the Loans under this Agreement:
(i) no Borrower will (x) be "insolvent," within the meaning of such term as used
in O.C.G.A. (S) 18-2-22 or as defined in (S) 101 of the "Bankruptcy Code", or
Section 2 of either the "UFTA" or the "UFCA", or as defined or used in any
"Other Applicable Law" (as those terms are defined below), or (y) be unable to
pay its debts generally as such debts become due within the meaning of Section
548 of the Bankruptcy Code, Section 4 of the UFTA or Section 6 of the UFCA, or
(z) have an unreasonably small capital to engage in any business or transaction,
whether current or contemplated, within the meaning of Section 548 of the
Bankruptcy Code, Section 4 of the UFTA or Section 5 of the UFCA; and (ii) the
obligations of each Borrower under the Loan Documents and with respect to the
Loans will not be rendered avoidable under any Other Applicable Law. For
purposes of this Section 4.17, "Bankruptcy Code" means Title 11 of the United
States Code, "UFTA" means the Uniform Fraudulent Transfer Act, "UFCA" means the
Uniform Fraudulent Conveyance Act, and "Other Applicable Law" means any other
applicable state law pertaining to fraudulent transfers or acts voidable by
creditors, in each case as such law may be amended from time to time.
SECTION 4.18. Insurance. Each Borrower and each Consolidated
---------
Subsidiary has (either in the name of such Borrower or in such Consolidated
Subsidiary's own name), with financially sound and reputable insurance
companies, insurance on all its property in comparable amounts and against
comparable risks as
<PAGE>
are usually insured against in the same general area by companies of established
repute engaged in the same or similar business.
ARTICLE V
COVENANTS
The Borrowers agree that, so long as any Bank has any Commitment
hereunder or any amount payable hereunder or under any Note remains unpaid:
SECTION 5.01. Information. The Parent will deliver to each of the
-----------
Banks:
(a) as soon as available and in any event within 90 days after the end
of each Fiscal Year, a consolidated balance sheet of the Parent and its
Consolidated Subsidiaries as of the end of such Fiscal Year and the related
consolidated statements of income, shareholders' equity and cash flows for
such Fiscal Year, setting forth in each case in comparative form the
figures for the previous fiscal year, all certified by Arthur Andersen &
Co. or other independent public accountants of nationally recognized
standing, with such certification to be free of exceptions and
qualifications not acceptable to the Required Banks;
(b) as soon as available and in any event within 60 days after the end
of each of the first 3 Fiscal Quarters of each Fiscal Year, a consolidated
balance sheet of the Parent and its Consolidated Subsidiaries as of the end
of such Fiscal Quarter and the related statement of income and statement of
cash flows for such Fiscal Quarter and for the portion of the Fiscal Year
ended at the end of such Fiscal Quarter, setting forth in each case in
comparative form the figures for the corresponding Fiscal Quarter and the
corresponding portion of the previous Fiscal Year, all certified (subject
to normal year-end adjustments) as to fairness of presentation, GAAP and
consistency by an Authorized Officer or the chief accounting officer of the
Parent;
(c) within 10 Domestic Business Days after the delivery of each set of
financial statements referred to in paragraph (a) above and simultaneously
with the delivery of each set of financial statements referred to in
paragraph (b) above, a certificate, substantially in the form of Exhibit F
---------
(a "Compliance Certificate"), of an Authorized Officer or the chief
accounting officer of the Parent (i) setting forth in reasonable detail the
calculations required to establish whether the Parent was in compliance
with the requirements of Sections 5.15 through 5.20, inclusive, on the date
of
<PAGE>
such financial statements and (ii) stating whether any Default exists on
the date of such certificate and, if any Default then exists, setting forth
the details thereof and the action which the Parent is taking or proposes
to take with respect thereto;
(d) simultaneously with the delivery of each set of annual financial
statements referred to in paragraph (a) above, a statement of the firm of
independent public accountants which reported on such statements to the
effect that nothing has come to their attention to cause them to believe
that any Default existed on the date of such financial statements;
(e) within 5 Domestic Business Days after a Principal Officer becomes
aware of the occurrence of any Default, a certificate of an Authorized
Officer or the chief accounting officer of the Parent setting forth the
details thereof and the action which the Parent is taking or proposes to
take with respect thereto;
(f) promptly upon the mailing thereof to the shareholders of the
Parent generally, copies of all financial statements, reports and proxy
statements so mailed;
(g) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements
on Form S-8 or its equivalent) and annual, quarterly or monthly reports
which the Parent shall have filed with the Securities and Exchange
Commission;
(h) if and when any member of the Controlled Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined
in Section 4043 of ERISA) with respect to any Plan which could reasonably
be expected to constitute grounds for a termination of such Plan under
Title IV of ERISA, or knows that the plan administrator of any Plan has
given or is required to give notice of any such reportable event, a copy of
the notice of such reportable event given or required to be given to the
PBGC; (ii) receives notice of complete or partial withdrawal liability
under Title IV of ERISA, a copy of such notice; or (iii) receives notice
from the PBGC under Title IV of ERISA of an intent to terminate or appoint
a trustee to administer any Plan, a copy of such notice, provided, however,
that each of the foregoing notices shall not be required to be given unless
the reportable event, withdrawal liability, plan termination, or trustee
appointment involved could reasonably be expected to give rise to a
liability of more
<PAGE>
than $1,000,000 on the part of the Parent or any of its Subsidiaries; and
(i) from time to time such additional information regarding the
financial position or business of the Borrowers and the Subsidiaries as the
Agent, at the request of any Bank, may reasonably request.
SECTION 5.02. Inspection of Property, Books and Records.
-----------------------------------------
(a) Each Borrower will keep, and the Parent will cause each
Consolidated Subsidiary to keep, proper books of record and account in
which full, true and correct entries in conformity with GAAP shall be made
of all dealings and transactions in relation to its business and
activities.
(b) Prior to the occurrence of a Default, each Borrower will, and the
Parent will cause each Consolidated Subsidiary to, permit representatives
of any Bank at such Bank's expense after reasonable notice during regular
business hours (which date of visit shall be mutually agreed upon but shall
not be later than 2 weeks after the date requested by such Bank) to visit
and inspect, in the company of any of the Principal Officers or their
designees and their independent public accountants, any of their respective
properties, and to examine and make abstracts from any of their respective
books and records and to discuss with any of the Principal Officers the
respective affairs, finances and accounts of the Parent and its
Subsidiaries.
(c) After the occurrence of a Default, each Borrower will permit, and
the Parent will cause each Consolidated Subsidiary to permit, at the
Borrower's expense, representatives of any Bank to visit and inspect any of
their respective properties, to examine and make abstracts from any of
their respective books and records and to discuss their respective affairs,
finances and accounts with their respective officers, employees and
independent public accountants.
Each Borrower agrees to cooperate and assist in such visits and inspections set
forth in paragraphs (b) and (c) above in this Section, in each case at such
reasonable times and as often as may reasonably be desired. Provided, however,
(i) in no event shall any Bank have access to information prohibited by law, and
(ii) in the event any Bank desires to inspect confidential matters (which
matters shall in no event include financial information and data of the Parent
or its Subsidiaries or other information the Banks may require in order to
determine compliance with this Agreement) under this Section, such Bank
<PAGE>
shall execute a confidentiality agreement relating to such matters, which
agreement shall contain reasonable terms acceptable to such Bank and its
counsel.
SECTION 5.03. Maintenance of Existence. The Parent shall and shall
------------------------
cause each Consolidated Subsidiary to maintain its corporate existence (except
for any corporate reorganization, dissolutions or liquidations expressly
permitted by Section 5.04 or 5.05 hereof) and to carry on its business in
substantially the same manner and in substantially the same field as such
business is now carried on and maintained.
SECTION 5.04. Dissolution. Neither any Borrower nor any Consolidated
-----------
Subsidiaries shall (a) suffer or permit dissolution or liquidation either in
whole or in part, or (b) redeem or retire any shares of its own stock or that of
any Consolidated Subsidiary, except (i) through corporate reorganization to the
extent permitted by Section 5.05, or (ii) solely in accordance with its policies
and programs approved by the Parent's Board of Directors from time to time, but
in no event during the existence of an uncured Event of Default, whether caused
by such dissolution, liquidation or otherwise.
SECTION 5.05. Consolidations, Mergers and Sales of Assets. No Borrower
-------------------------------------------
will, nor will the Parent permit any Consolidated Subsidiary to, consolidate or
merge with or into, or sell, lease or otherwise transfer all or any substantial
part of its assets to, any other Person, or discontinue or eliminate any
Subsidiary or division, provided that (a) any Borrower may merge with another
--------
Person (provided that in the event of such merger involving the Parent, the
Parent is the surviving Person) if (i) such Person was organized under the laws
of the United States of America or one of its states, (ii) a Borrower is the
corporation surviving such merger and (iii) immediately after giving effect to
such merger, no Default shall have occurred and be continuing, (b) Subsidiaries
may merge with one another or with the Parent or with any other Person which
will become a Subsidiary as a result of such merger, and (c) the foregoing
limitation on the sale, lease or other transfer of assets and on the
discontinuation or elimination of a Subsidiary or division shall not prohibit,
(i) during any Fiscal Quarter, a transfer of assets or the discontinuance or
elimination of a Subsidiary or division (in a single transaction or in a series
of related transactions) unless the aggregate assets to be so transferred or
utilized in a Subsidiary or division to be so discontinued, when combined with
all other assets transferred, and all other assets utilized in all other
Subsidiaries or divisions discontinued, in any Fiscal Year contributed more than
17.5% of Consolidated Operating Profits for the immediately preceding Fiscal
Year (which amount shall be exclusive of any Consolidated Operating Profits
attributable to the operations of the Parent's Insurance Services
<PAGE>
Group prior to the Spin Off), or (ii) sales of accounts receivable in connection
with an accounts receivable securitization program in which the aggregate
principal amount invested by the purchaser of such receivables does not exceed
$150,000,000 at any one time.
SECTION 5.06. Use of Proceeds. The Borrowers will use the proceeds of
---------------
the Loans hereunder for general corporate purposes (in compliance with all
applicable legal and regulatory requirements, including, without limitation,
Regulations U and X and the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended, and the regulations thereunder);
provided, that in the event the Parent or any Borrower intends to use the
- --------
proceeds of any of the Loans hereunder to finance or refinance, directly or
indirectly, an Acquisition of any Person (or the acquisition of (i) more than
50% of the publicly traded stock (of any class) of any Person or (ii) any of the
publicly traded stock (of any class) of any Person after the Parent, such
Borrower or any of the Subsidiaries shall have been required to file a Schedule
13D under the Securities Exchange Act of 1934, as amended, with respect to such
stock), then unless such Acquisition (or such other acquisition) has been
approved by the board of directors of such Person or officers thereof duly
authorized to do so, then (A) the Parent or such Borrower shall give the Agent
and the Banks written notice, not less than 10 days prior to the earlier of (x)
the public announcement or other commencement of a tender offer or (y) the
commencement of solicitation of proxies in the opposition to the Board of
Directors of the Person proposed to be acquired, of such intent (which notice
shall describe the proposed Acquisition or such other acquisition in reasonable
detail), and (B) notwithstanding any other provision of the Credit Agreement,
each Bank shall have the right to assign all of its interest in its Loans and
Commitments under the Facility, after first offering such assignment of its
interest to each of the other Banks, without the consent of the Agent or the
Parent, provided that such Assignment is made within 90 days after such Bank
receives notice of such Acquisition (or other acquisition).
SECTION 5.07. Compliance with Laws; Payment of Taxes. The Parent will,
--------------------------------------
and will cause each of the Subsidiaries and each member of the Controlled Group
to, comply with applicable laws (including but not limited to ERISA),
regulations and similar requirements of governmental authorities (including but
not limited to PBGC), except (i) where the necessity of such compliance is being
contested in good faith through appropriate proceedings, or (ii) where the
failure to do so would not have a Material Adverse Effect. The Parent will, and
will cause each of the Subsidiaries to, pay prior to the time the same become
delinquent all taxes, assessments, governmental charges, claims for labor,
supplies, rent and other obligations which, if unpaid,
<PAGE>
might become a lien against the property of the Parent or any Consolidated
Subsidiary, except (i) liabilities being contested in good faith and against
which, if requested by the Agent, the Parent will set up reserves in accordance
with GAAP, or (ii) where the failure to do so would not have a Material Adverse
Effect.
SECTION 5.08. Insurance. Each Borrower will maintain, and the Parent
---------
will cause each of the Subsidiaries to maintain (either in the name of such
Borrower or in such Consolidated Subsidiary's own name), with financially sound
and reputable insurance companies, insurance on all its property material to
its business in comparable amounts and against such risks as are usually insured
against in the same general area by companies of established repute engaged in
the same or similar business.
SECTION 5.09. Change in Fiscal Year. No Borrower will change its
---------------------
Fiscal Year without the consent of the Required Banks.
SECTION 5.10. Maintenance of Property. Each Borrower shall, and the
-----------------------
Parent shall cause each Consolidated Subsidiary to, maintain all of its
properties and assets in good condition, repair and working order, ordinary wear
and tear excepted, except where the failure to do so would not have a Material
Adverse Effect.
SECTION 5.11. Environmental Notices. Upon becoming aware of such
---------------------
matters, the Parent shall furnish to the Banks and the Agent prompt written
notice of all Environmental Liabilities, pending or anticipated Environmental
Proceedings, Environmental Notices, Environmental Judgments and Orders, and
Environmental Releases at, on, in, under or in any way affecting the Properties
or any adjacent property, and all facts, events, or conditions that could lead
to any of the foregoing, in each case if the same would have a Material Adverse
Effect.
SECTION 5.12. Environmental Matters. Except as set forth in Schedule
---------------------
5.12, as revised from time to time, neither any Borrower nor any Consolidated
Subsidiary will, and the Parent will not permit any Third Party to, use,
produce, manufacture, process, treat, recycle, generate, store, dispose of,
manage at, or otherwise handle, or ship or transport to or from the Properties
any Hazardous Materials, except for Hazardous Materials such as cleaning
solvents, pesticides and other similar materials used, produced, manufactured,
processed, treated, recycled, generated, stored, disposed, managed, or otherwise
handled in minimal amounts in the ordinary course of business in compliance with
all applicable Environmental Requirements in each case where the failure to
comply would not have a Material Adverse Effect.
<PAGE>
SECTION 5.13. Environmental Release. Each Borrower (and the Parent,
---------------------
with respect to the Subsidiaries) agrees that upon the occurrence of an
Environmental Release at or on any of the Properties owned by it or any
Consolidated Subsidiary, it will take appropriate action required by applicable
law, except in such cases where the failure to take such action would not have a
Material Adverse Effect.
SECTION 5.14. Transactions with Affiliates. Neither any Borrower nor
----------------------------
any of its Consolidated Subsidiaries shall enter into, or be a party to, any
transaction with any Affiliate of such Borrower or such Subsidiary (which
Affiliate is not a Borrower or a Wholly Owned Subsidiary), except as permitted
by law and in the ordinary course of business and pursuant to reasonable terms
which are no less favorable to such Borrower or such Subsidiary than would be
obtained in a comparable arm's length transaction with a Person which is not an
Affiliate.
SECTION 5.15. Restricted Investments. The Parent will not, and will
----------------------
not permit any of its Subsidiaries to, make any Restricted Investments unless,
after giving effect thereto, the aggregate amount of all such Restricted
Investments outstanding at any time does not exceed 20% of the Parent's
Consolidated Total Assets; provided that (i) the foregoing shall be tested as at
--------
the end of each Fiscal Quarter, and (ii) after giving effect to the making of
any Restricted Investments permitted by this Section, the Borrowers will be in
full compliance with all the provisions of this Agreement.
SECTION 5.16. Intentionally Deleted.
---------------------
SECTION 5.17. Debt of Consolidated Subsidiaries. The Borrowers (other
---------------------------------
than the Parent) shall not, and the Parent shall not permit any other
Consolidated Subsidiary to, incur or permit to exist any Debt not in existence
on the Closing Date, and extensions or renewals thereof, other than (i) the
obligations to the Banks under this Agreement; (ii) Debt of the types described
in clause (vii) of the definition of Debt which is incurred in the ordinary
course of business in connection with (1) the sale or purchase of goods, or (2)
to assure performance of any Subsidiaries' service contracts, operating leases,
obligations to a utility or a governmental entity, or worker's compensation
obligations; and (iii) Debt (including Debt secured by Liens permitted by
Section 5.18) not exceeding an aggregate amount outstanding at any time equal to
20% of Consolidated Net Tangible Assets.
Any corporation which becomes a Consolidated Subsidiary after the date
hereof shall for all purposes of this Section be deemed to have created, assumed
or incurred at the time it
<PAGE>
becomes a Consolidated Subsidiary all Debt of such corporation existing
immediately after it becomes a Consolidated Subsidiary.
SECTION 5.18. Negative Pledge. The Borrowers shall not, and the
---------------
Parent shall not permit any Consolidated Subsidiary to, create, assume or suffer
to exist any Lien on any asset now owned or hereafter acquired by it, except:
(a) Liens existing on the date of this Agreement and disclosed on
Schedule 5.18(a);
----------------
(b) any Lien existing on any specific fixed asset of any corporation
at the time such corporation becomes a Consolidated Subsidiary and not
created in contemplation of such event;
(c) any Lien on any specific fixed asset securing Debt incurred or
assumed for the purpose of financing all or any part of the cost of
acquiring or constructing such asset, provided that (i) such Lien attaches
--------
to such asset concurrently with or within 18 months after the acquisition
or completion of construction thereof, and (ii) such acquisition is not in
connection with the purchase of all or substantially all of the assets of a
Person;
(d) any Lien on any specific fixed asset of any corporation existing
at the time such corporation is merged or consolidated with or into any
Borrower or a Consolidated Subsidiary and not created in contemplation of
such event;
(e) any Lien existing on any specific fixed asset prior to the
acquisition thereof by any Borrower or a Consolidated Subsidiary and not
created in contemplation of such acquisition;
(f) Liens securing Debt owing by any Subsidiary to the Parent or
another Wholly Owned Subsidiary;
(g) Liens on and transfers of accounts receivable in connection with
an accounts receivable securitization program in which the aggregate
principal amount invested by the purchaser of such receivables does not
exceed $150,000,000 at any one time;
(h) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the foregoing
paragraphs of this Section, provided that (i) such Debt is not secured by
--------
any additional assets, and (ii) the amount of such Debt secured by any such
Lien is not increased;
<PAGE>
(i) any Lien on Margin Stock (subject to the limitation of Debt
secured thereby set forth in Section 5.18(p) below);
(j) subject to Section 6.01(k), Liens for taxes (including ad valorem
taxes), assessments or other governmental charges or levies not yet due or
which are being actively contested in good faith by appropriate
proceedings, if adequate reserves with respect thereto are maintained on
the books of such Borrower or Subsidiary, as the case may be, in accordance
with GAAP;
(k) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other Liens imposed by law created in the
ordinary course of business for amounts not yet due or which are being
contested in good faith by appropriate proceedings, if adequate reserves
with respect thereto are maintained on the books of such Borrower or such
Subsidiary, as the case may be, in accordance with GAAP;
(l) Liens incurred or deposits made in the ordinary course of business
in connection with worker's compensation, unemployment insurance and other
types of social security benefits or obligations or to secure performance
of tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, performance and return-of-money bonds and other
similar obligations, provided that such Liens were not incurred in
connection with the incurrence of any Debt;
(m) zoning ordinances, easements, licenses, restrictions on the use of
real property and minor irregularities in title thereto which do not
materially impair the use of such property and the operation of the
business of such Borrower or such Subsidiary (as the case may be) thereon
or the value of such property;
(n) inchoate Liens arising under ERISA to secure current service
pension liabilities as they are incurred under the provisions of Plans from
time to time in effect;
(o) rights reserved to or invested in any municipality or
governmental, statutory or public authority to control or regulate any
property of such Borrower or such Subsidiary, as the case may be, or to use
such property in a manner which does not materially impair the use of such
property for the purposes of which it is held by such Borrower or such
Subsidiary, as the case may be; and
<PAGE>
(p) Liens not otherwise permitted by the foregoing paragraphs of this
Section securing Debt (other than indebtedness represented by the Notes),
which, when added to the principal amount of Debt secured by Margin Stock,
in the aggregate principal amount at any time outstanding, does not exceed
20% of Consolidated Net Tangible Assets.
SECTION 5.19. Interest Coverage Ratio. At the end of each Fiscal
-----------------------
Quarter commencing with the Fiscal Quarter ending September 30, 1997, the
Interest Coverage Ratio shall be greater than or equal to 3.0 to 1.0, determined
in accordance with GAAP.
SECTION 5.20. Ratio of Consolidated Funded Debt to Cash Flow. At the
----------------------------------------------
end of each Fiscal Quarter, commencing with the Fiscal Quarter ending September
30, 1997, the ratio of Consolidated Funded Debt to Cash Flow for the Fiscal
Quarter just ended and the immediately preceding 3 Fiscal Quarters shall not
exceed 4.0 to 1.0, determined in accordance with GAAP.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following
-----------------
events ("Events of Default") shall have occurred and be continuing:
(a) any Borrower shall fail to pay (i) when due any principal of any
Loan or (ii) any interest on any Loan within 5 Domestic Business Days after
such interest shall become due, or (iii) any fee or other amount payable
hereunder within 5 Domestic Business Days after such fee or other amount
becomes due; or
(b) any Borrower shall fail to observe or perform any covenant (i)
contained in Sections 5.17 or 5.18 and such failure shall not have been
cured within 15 days after the earlier to occur of (1) written notice
thereof has been given to the Parent by the Agent at the request of any
Bank or (2) the Parent otherwise becomes aware of any such failure, or (ii)
contained in Sections 5.01(e), 5.02(b), 5.02(c), 5.03 to 5.06, inclusive,
5.15, 5.19 or 5.20; or
(c) any Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those covered by
paragraph (a) or (b) above) and such failure shall not have been cured
within 30 days after the earlier to occur of (i) written notice thereof has
been given to the Parent by the Agent at the request of any Bank
<PAGE>
or (ii) the Parent otherwise becomes aware of any such failure; or
(d) any representation, warranty, certification or statement made by
any Borrower in Article IV of this Agreement or in any certificate,
financial statement or other document delivered pursuant to this Agreement
shall prove to have been incorrect or misleading in any material respect
when made (or deemed made); or
(e) any Borrower or any Consolidated Subsidiary shall fail to make any
payment in respect of Debt (or Synthetic Lease Obligations) in an aggregate
principal amount in excess of $20,000,000 outstanding (other than the
Notes) when due or within any applicable grace period; or
(f) any event or condition shall occur which results in the
acceleration of the maturity of Debt (or Synthetic Lease Obligations) of
any Borrower or any Consolidated Subsidiary in an aggregate principal
amount outstanding equal to or in excess of $20,000,000 (including, without
limitation, any required mandatory prepayment or "put" of such Debt (or
Synthetic Lease Obligations) to any Borrower or any Consolidated Subsidiary
which can be effected by the holder of such Debt (or such Synthetic Lease
Obligations) upon the occurrence of an event in the nature of a default) or
enables the holders of such Debt (or Synthetic Lease Obligations) or any
Person acting on such holders' behalf to accelerate the maturity thereof
(including, without limitation, any required mandatory prepayment or "put"
of such Debt (or Synthetic Lease Obligations) to any Borrower or any
Consolidated Subsidiary which can be effected by the holder of such Debt
(or Synthetic Lease Obligations) upon the occurrence of an event in the
nature of a default), excluding, however, from this paragraph (f), (i) any
"put" of Debt to any Borrower or any Consolidated Subsidiary pursuant to
the CSC Put, and (ii) any "put" to any Borrower or any Consolidated
Subsidiary of Debt evidenced by the Parent's 6 1/2% Senior Notes due 2003
pursuant to the Indenture relating thereto, unless the event resulting in
such "put" under this clause (ii) shall have a Material Adverse Effect; or
(g) any Borrower or any Consolidated Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or shall consent to
any such relief or to the
<PAGE>
appointment of or taking possession by any such official in an involuntary
case or other proceeding commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay its
debts as they become due, or shall take any corporate action to authorize
any of the foregoing; or
(h) an involuntary case or other proceeding shall be commenced against
any Borrower or any Consolidated Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and
unstayed for a period of 60 days; or an order for relief shall be entered
against any Borrower or any Consolidated Subsidiary under the federal
bankruptcy laws as now or hereafter in effect; or
(i) any Borrower or any member of the Controlled Group shall fail to
pay when due any material amount which it shall have become liable to pay
to the PBGC or to a Plan under Title IV of ERISA; or notice of intent to
terminate a Plan or Plans shall be filed under Title IV of ERISA by any
Borrower, any member of the Controlled Group, any plan administrator or any
combination of the foregoing which results in an obligation which would
have a Material Adverse Effect; or the PBGC shall institute proceedings
under Title IV of ERISA to terminate or to cause a trustee to be appointed
to administer any such Plan or Plans or a proceeding shall be instituted by
a fiduciary of any such Plan or Plans to enforce Section 515 or 4219(c)(5)
of ERISA and such proceeding shall not have been dismissed within 30 days
thereafter which results in an obligation which would have a Material
Adverse Effect; or a condition shall exist by reason of which the PBGC
would be entitled to obtain a decree adjudicating that any such Plan or
Plans must be terminated which results in an obligation which would have a
Material Adverse Effect; or any Borrower or any other member of the
Controlled Group shall enter into, contribute or be obligated to contribute
to, terminate or incur any withdrawal liability with respect to, a
Multiemployer Plan which results in an obligation which would have a
Material Adverse Effect; or
(j) one or more judgments or orders for the payment of money in an
aggregate amount in excess of $10,000,000 (exclusive of the portion of the
judgment amount fully covered by insurance where the insurer has admitted
<PAGE>
liability in respect of such judgment in writing) shall be rendered against
any Borrower or any Consolidated Subsidiary and (i) such judgment or order
shall not be discharged within or shall continue unsatisfied and unstayed
for a period of 30 days after the entry thereof, or (ii) such Borrower or
the applicable Consolidated Subsidiary shall not appeal such judgment
within such 30 day period and the execution of such judgment shall not be
stayed during such appeal; or
(k) a federal tax lien shall be filed against any Borrower or any
Consolidated Subsidiary under Section 6323 of the Code or a lien of the
PBGC shall be filed against any Borrower or any Consolidated Subsidiary
under Section 4068 of ERISA and in either case the amount of such lien
shall exceed $5,000,000 and shall remain undischarged for a period of 25
days after the date of filing; or
(l) (i) any Person or two or more Persons acting in concert shall,
after the Closing Date, have acquired beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934) of 25% or more of the outstanding shares
of the voting stock of the Parent; or (ii) as of any date a majority of the
Board of Directors of the Parent consists of individuals who were not
either (A) directors of the Parent as of the corresponding date of the
previous year, (B) selected or nominated to become directors by the Board
of Directors of the Parent of which a majority consisted of individuals
described in clause (A), or (C) selected or nominated to become directors
by the Board of Directors of the Parent of which a majority consisted of
individuals described in clause (A) and individuals described in clause
(B); or
(m) any breach or default occurs under the Parent Guaranty;
then, and in every such event,(i) the Agent shall if requested by the Required
Banks, by notice to the Parent on behalf of the Borrowers terminate the
Commitments and they shall thereupon terminate, (ii) any Bank may terminate its
obligation to fund a Money Market Loan in connection with any relevant Money
Market Quote, and (iii) the Agent shall if requested by the Required Banks, by
notice to the Borrowers declare the Notes (together with accrued interest
thereon) to be, and the Notes shall thereupon become, immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrowers together with interest at the Default
Rate accruing on the principal amount thereof from and after the date and during
the continuation of such Event of
<PAGE>
Default; provided that if any Event of Default specified in paragraph (g) or (h)
--------
above occurs with respect to any Borrower, without any notice to such Borrower
or any other act by the Agent or the Banks, the Commitments shall thereupon
terminate and the Notes (together with accrued interest thereon) shall become
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by each Borrower together with
interest thereon at the Default Rate accruing on the principal amount thereof
from and after the date and during the continuation of such Event of Default.
Notwithstanding the foregoing, the Agent shall have available to it all other
remedies at law or equity, and shall exercise any one or all of them at the
request of the Required Banks.
SECTION 6.02. Notice of Default. The Agent shall give notice to the
-----------------
Parent on behalf of each Borrower of any Default under Section 6.01(c) promptly
upon being requested to do so by any Bank and shall thereupon notify all the
Banks thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment; Powers and Immunities. Each Bank hereby
----------------------------------
irrevocably appoints and authorizes the Agent to act as its agent hereunder and
under the other Loan Documents with such powers as are specifically delegated to
the Agent by the terms hereof and thereof, together with such other powers as
are reasonably incidental thereto. The Agent: (a) shall have no duties or
responsibilities except as expressly set forth in this Agreement and the other
Loan Documents, and shall not by reason of this Agreement or any other Loan
Document be a trustee for any Bank; (b) shall not be responsible to the Banks
for any recitals, statements, representations or warranties contained in this
Agreement or any other Loan Document, or in any certificate or other document
referred to or provided for in, or received by any Bank under, this Agreement or
any other Loan Document, or for the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
any other document referred to or provided for herein or therein or for any
failure by any Borrower to perform any of its obligations hereunder or
thereunder; (c) shall not be required to initiate or conduct any litigation or
collection proceedings hereunder or under any other Loan Document except to the
extent requested by the Required Banks, and then only on terms and conditions
satisfactory to the Agent, and (d) shall not be responsible for any action taken
or omitted to be taken by it hereunder or under any other Loan Document or any
other document or instrument referred to or provided for herein or therein or in
connection herewith or therewith, except for its own gross negligence or
<PAGE>
willful misconduct. The Agent may employ agents and attorneys-in-fact and shall
not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The provisions of this
Article VII are solely for the benefit of the Agent and the Banks, and the
Borrower shall not have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under this Agreement
and under the other Loan Documents, the Agent shall act solely as agent of the
Banks and does not assume and shall not be deemed to have assumed any obligation
towards or relationship of agency or trust with or for the Borrower. The duties
of the Agent shall be ministerial and administrative in nature, and the Agent
shall not have by reason of this Agreement or any other Loan Document a
fiduciary relationship in respect of any Bank.
SECTION 7.02. Reliance by Agent. The Agent shall be entitled to rely
-----------------
upon any certification, notice or other communication (including any thereof by
telephone, telecopier, telegram or cable) believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants or other experts selected by the Agent. As to any matters not
expressly provided for by this Agreement or any other Loan Document, the Agent
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder and thereunder in accordance with instructions signed by the Required
Banks, and such instructions of the Required Banks in any action taken or
failure to act pursuant thereto shall be binding on all of the Banks.
SECTION 7.03. Defaults. The Agent shall not be deemed to have
--------
knowledge of the occurrence of a Default or an Event of Default (other than the
nonpayment of principal of or interest on the Loans) unless the Agent has
received notice from a Bank or the Borrower specifying such Default or Event of
Default and stating that such notice is a "Notice of Default". In the event
that the Agent receives such a notice of the occurrence of a Default or an Event
of Default, the Agent shall give prompt notice thereof to the Banks. The Agent
shall give each Bank prompt notice of each nonpayment of principal of or
interest on the Loans whether or not it has received any notice of the
occurrence of such nonpayment. The Agent shall (subject to Section 9.06) take
such action hereunder with respect to such Default or Event of Default as shall
be directed by the Required Banks, provided that, unless and until the Agent
shall have received such directions, the Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests of
the Banks.
<PAGE>
SECTION 7.04. Rights of Agent as a Bank. With respect to the Loans
-------------------------
made by it, Wachovia in its capacity as a Bank hereunder shall have the same
rights and powers hereunder as any other Bank and may exercise the same as
though it were not acting as the Agent, and the term "Bank" or "Banks" shall,
unless the context otherwise indicates, include Wachovia in its individual
capacity. The Agent may (without having to account therefor to any Bank) accept
deposits from, lend money to and generally engage in any kind of banking, trust
or other business with the Borrowers (and any of their Affiliates) as if it were
not acting as the Agent, and the Agent may accept fees and other consideration
from the Borrowers (in addition to any agency fees and arrangement fees
heretofore agreed to between the Borrowers and the Agent) for services in
connection with this Agreement or any other Loan Document or otherwise without
having to account for the same to the Banks.
SECTION 7.05. Indemnification. Each Bank severally agrees to
---------------
indemnify the Agent, to the extent the Agent shall not have been reimbursed by
the Borrowers, ratably in accordance with its Commitment, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including, without limitation, counsel fees and disbursements)
or disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of this Agreement or any other Loan Document or any other documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby (excluding, unless an Event of Default has occurred and is continuing,
the normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or any such other documents; provided, however that no Bank shall be
-------- -------
liable for any of the foregoing to the extent they arise from the gross
negligence or wilful misconduct of the Agent. If any indemnity furnished to the
Agent for any purpose shall, in the opinion of the Agent, be insufficient or
become impaired, the Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished.
SECTION 7.06 Consequential Damages. THE AGENT SHALL NOT BE
---------------------
RESPONSIBLE OR LIABLE TO ANY BANK, THE BORROWER OR ANY OTHER PERSON OR ENTITY
FOR ANY PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A
RESULT OF THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
SECTION 7.07. Payee of Note Treated as Owner. The Agent may deem and
------------------------------
treat the payee of any Note as the owner thereof for all purposes hereof unless
and until a written notice
<PAGE>
of the assignment or transfer thereof shall have been filed with the Agent and
the provisions of Section 9.08(c) have been satisfied. Any requests, authority
or consent of any Person who at the time of making such request or giving such
authority or consent is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee or assignee of that Note or of any Note or
Notes issued in exchange therefor or replacement thereof.
SECTION 7.08. Nonreliance on Agent and Other Banks. Each Bank agrees
------------------------------------
that it has, independently and without reliance on the Agent or any other Bank,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis of the Borrower and decision to enter into this
Agreement and that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any of the other Loan
Documents. The Agent shall not be required to keep itself informed as to the
performance or observance by the Borrowers of this Agreement or any of the other
Loan Documents or any other document referred to or provided for herein or
therein or to inspect the properties or books of the Borrowers or any other
Person. Except for notices, reports and other documents and information
expressly required to be furnished to the Banks by the Agent hereunder or under
the other Loan Documents, the Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning the affairs,
financial condition or business of the Borrower or any other Person (or any of
their Affiliates) which may come into the possession of the Agent.
SECTION 7.09. Failure to Act. Except for action expressly required of
--------------
the Agent hereunder or under the other Loan Documents, the Agent shall in all
cases be fully justified in failing or refusing to act hereunder and thereunder
unless it shall receive further assurances to its satisfaction by the Banks of
their indemnification obligations under Section 7.05 against any and all
liability and expense which may be incurred by the Agent by reason of taking,
continuing to take, or failing to take any such action.
SECTION 7.10. Resignation or Removal of Agent. Subject to the
-------------------------------
appointment and acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving notice thereof to the Banks and the Borrowers and
the Agent may be removed at any time with or without cause by the Required
Banks. Upon any such resignation or removal, the Required Banks shall have the
right to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Required Banks and shall have accepted such appointment within
30 days after the
<PAGE>
retiring Agent's notice of resignation or the Required Banks' removal of the
retiring Agent, then the retiring Agent may, on behalf of the Banks, appoint a
successor Agent. Any successor Agent shall be a bank which has a combined
capital and surplus of at least $1,000,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article VII
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent hereunder.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
-------------------------------------------------
Unfair. If on or prior to the first day of any Interest Period:
(a) the Agent determines that deposits in Dollars or any Foreign
Currency (in the applicable amounts) are not being offered in the relevant
market for such Interest Period, or
(b) the Required Banks advise the Agent that the London Interbank
Offered Rate or IBOR, as the case may be, as determined by the Agent will
not adequately and fairly reflect the cost to such Banks of funding the
relevant type of Fixed Rate Loans for such Interest Period,
the Agent shall forthwith give notice thereof to the Borrowers and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, the obligations of the Banks to make
the type of Fixed Rate Loans specified in such notice shall be suspended.
Unless the relevant Borrower notifies the Agent at least 2 Domestic Business
Days before the date of any Borrowing of such type of Fixed Rate Loans for which
a Notice of Borrowing has previously been given that it elects not to borrow on
such date, such Borrowing shall instead be made as a Base Rate Borrowing.
SECTION 8.02. Illegality. If, after the date hereof, the adoption of
----------
any applicable law, rule or regulation, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
<PAGE>
administration thereof (any such agency being referred to as an "Authority" and
any such event being referred to as a "Change of Law"), or compliance by any
Bank (or its Lending Office) with any request or directive (whether or not
having the force of law) of any Authority shall make it unlawful or impossible
for any Bank (or its Lending Office) to make, maintain or fund its Euro-Dollar
Loans or Foreign Currency Loans and such Bank shall so notify the Agent, the
Agent shall forthwith give notice thereof to the other Banks and the Borrowers,
whereupon until such Bank notifies the Borrower and the Agent that the
circumstances giving rise to such suspension no longer exist, the obligation of
such Bank to make Euro-Dollar Loans or Foreign Currency Loans, as the case may
be, shall be suspended. Before giving any notice to the Agent pursuant to this
Section, such Bank shall designate a different Lending Office if such
designation will avoid the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. If such Bank
shall determine that it may not lawfully continue to maintain and fund any of
its outstanding Euro-Dollar Loans or Foreign Currency Loans, as the case may be,
to maturity and shall so specify in such notice, the relevant Borrower shall
immediately prepay in full the then outstanding principal amount of each Euro-
Dollar Loan or Foreign Currency Loans, as the case may be, of such Bank,
together with accrued interest thereon. Concurrently with prepaying each such
Euro-Dollar Loan or Foreign Currency Loans, as the case may be, the relevant
Borrower shall borrow a Base Rate Loan in an equal principal amount from such
Bank (on which interest and principal shall be payable contemporaneously with
the related Euro-Dollar Loans or Foreign Currency Loans, as the case may be, of
the other Banks), and such Bank shall make such a Base Rate Loan.
SECTION 8.03. Increased Cost and Reduced Return. (a) If after the
---------------------------------
date hereof, a Change of Law or compliance by any Bank (or its Lending Office)
with any request or directive (whether or not having the force of law) of any
Authority:
(i) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including, without limitation, (1) any such
requirement imposed by the Board of Governors of the Federal Reserve
System, and (2) with respect to any Euro-Dollar Loan, any reserve
requirement described in the definition of Euro-Dollar Reserve Percentage
in excess of the reserve requirement of the Agent, but excluding, with
respect to any Foreign Currency Loan, any such requirement described in the
definition of Adjusted IBOR Rate) against assets of, deposits with or for
the account of, or credit extended by, any Bank (or its Lending Office); or
<PAGE>
(ii) shall impose on any Bank (or its Lending Office) or on the United
States market for certificates of deposit or the London interbank market
any other condition affecting its Fixed Rate Loans, its Notes or its
obligation to make Fixed Rate Loans;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Lending Office) of making or maintaining any Fixed Rate Loan, or to reduce
the amount of any sum received or receivable by such Bank (or its Lending
Office) under this Agreement or under its Notes with respect thereto, by an
amount deemed by such Bank to be material, then, within 15 days after demand by
such Bank (with a copy to the Agent), the relevant Borrower shall pay to such
Bank such additional amount or amounts as will compensate such Bank for such
increased cost or reduction.
(b) If any Bank shall have determined that after the date hereof the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change therein, or any change in the interpretation or administration
thereof, or compliance by any Bank (or its Lending Office) with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any Authority, has or would have the effect of reducing the rate of return on
such Bank's capital as a consequence of its obligations hereunder to a level
below that which such Bank could have achieved but for such adoption, change or
compliance (taking into consideration such Bank's policies with respect to
capital adequacy) by an amount deemed by such Bank to be material, then within
15 days after demand by such Bank (with a copy to the Agent), the Borrower shall
pay to such Bank such additional amount or amounts as will compensate such Bank
for such reduction, but in no event shall the Borrower be liable for amounts
incurred more than 90 days prior to receipt of such demand.
(c) Each Bank will promptly notify the Borrowers and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Bank to compensation pursuant to this Section and will designate a
different Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. A certificate of any Bank claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods.
(d) Notwithstanding the foregoing, in the event the Borrowers are
required to pay any Bank amounts pursuant to
<PAGE>
Section 2.12, Section 8.02 or this Section 8.03 and the designation of a
different Lending Office pursuant to Section 2.12, Section 8.02 or Section
8.03(c) will not avoid the need for compensation to such Bank (an "Affected
Bank"), the Borrower may give notice to such Affected Bank (with copies to the
Agent) that it wishes to seek one or more assignees (which may be one or more of
the Banks) to assume the Commitment of such Affected Bank and to purchase its
outstanding Loans and Notes; provided, that if there is more than one Affected
--------
Bank which has requested substantially and proportionally equal compensation
hereunder, the Borrower shall elect to seek an assignee to assume the
Commitments of all such Affected Banks. Each Affected Bank agrees to sell its
Commitment, Loans, Notes and interest in this Agreement in accordance with
Section 9.08(c) to any such assignee for an amount equal to the sum of the
outstanding unpaid principal of and accrued interest on such Loans and Notes,
plus all other fees and amounts (including, without limitation, any compensation
due to such Affected Banks under Section 2.12, Section 8.02 or this Section
8.03) due to such Affected Bank hereunder calculated, in each case, to the date
such Loans, Notes and interest are purchased. Upon such sale or prepayment, each
such Affected Bank shall have no further commitment or other obligation to the
Borrower hereunder or under any Note.
(e) The provisions of this Section 8.03 (i) shall be applicable with
respect to any Assignee, and any calculations required by such provisions shall
be made based upon the circumstances of such Assignee and (ii) shall constitute
a continuing agreement and shall survive the termination of this Agreement and
the payment in full or cancellation of the Notes.
SECTION 8.04. Base Rate Loans or Other Fixed Rate Loans Substituted
-----------------------------------------------------
for Affected Fixed Rate Loans. If (i) the obligation of any Bank to make or
- -----------------------------
maintain any type of Fixed Rate Loans has been suspended pursuant to Section
8.02 or (ii) any Bank has demanded compensation under Section 8.03, and the
Borrower shall, by at least 5 Euro-Dollar Business Days' or Foreign Currency
Business Days, as applicable, prior notice to such Bank through the Agent, have
elected that the provisions of this Section shall apply to such Bank, then,
unless and until such Bank notifies the Borrower that the circumstances giving
rise to such suspension or demand for compensation no longer apply:
(a) all Loans which would otherwise be made by such Bank as Euro-
Dollar Loans or Foreign Currency Loans, as the case may be, shall be made
instead as Base Rate Loans, except that if such demand for compensation
relates to Foreign Currency Loans, but not Euro-Dollar Loans, as either
Base Rate Loans or Euro-Dollar Loans, as the relevant Borrower may elect in
the notice to such Bank through the Agent referred to hereinabove (in all
cases interest and
<PAGE>
principal on such Loans shall be payable contemporaneously with the related
Fixed Rate Loans of the other Banks), and
(b) after each of its Euro-Dollar Loans or Foreign Currency Loans, as
the case may be, has been repaid, all payments of principal which would
otherwise be applied to repay such Fixed Rate Loans shall be applied to
repay its Base Rate Loans instead.
SECTION 8.05. Compensation. Upon the request of any Bank, delivered
------------
to the Borrower and the Agent, the Borrowers shall pay to such Bank such amount
or amounts as shall compensate such Bank for any loss, cost or expense incurred
by such Bank as a result of:
(a) any payment or prepayment (pursuant to Section 2.10, 2.11, 6.01,
8.02 or otherwise) of a Fixed Rate Loan on a date other than the last day of an
Interest Period for such Fixed Rate Loan; or
(b) if the Banks have permitted prepayment of any Fixed Rate Loan, any
failure by the relevant Borrower to prepay such Fixed Rate Loan on the date for
such prepayment specified in the relevant notice of prepayment hereunder; or
(c) any failure by a Borrower to borrow a Fixed Rate Loan on the date
for the Fixed Rate Borrowing of which such Fixed Rate Loan is a part specified
in the applicable Notice of Borrowing delivered pursuant to Section 2.02 or
notification of acceptance of Money Market Quotes pursuant to Section 2.03(e);
or
(d) any failure by a Borrower to pay a Foreign Currency Loan in the
applicable Foreign Currency;
such compensation to include, without limitation, as applicable: (A) an amount
equal to the excess, if any, of (x) the amount of interest which would have
accrued on the amount so paid or prepaid or not prepaid or borrowed for the
period from the date of such payment, prepayment or failure to prepay or borrow
to the last day of the then current Interest Period for such Fixed Rate Loan
(or, in the case of a failure to prepay or borrow, the Interest Period for such
Fixed Rate Loan which would have commenced on the date of such failure to prepay
or borrow) at the applicable rate of interest for such Fixed Rate Loan provided
for herein over (y) the amount of interest (as reasonably determined by such
Bank) such Bank would have paid on (i) deposits in Dollars of comparable amounts
having terms comparable to such period placed with it by leading banks in the
London interbank market (if such Fixed Rate Loan is a Euro-Dollar Loan), or (ii)
any deposit in a Foreign Currency of comparable amounts having terms comparable
to such period placed with it by lending banks
<PAGE>
in the applicable interbank market for such Foreign Currency (if such Fixed Rate
Loan is a Foreign Currency Loan); or (B) any such loss, cost or expense incurred
by such Bank in liquidating or closing out any foreign currency contract
undertaken by such Bank in funding or maintaining such Fixed Rate Loan (if such
Fixed Rate Loan is a Foreign Currency Loan).
SECTION 8.06. Failure to Pay in Foreign Currency. If any Borrower is
----------------------------------
unable for any reason to effect payment in a Foreign Currency as required by
this Agreement or if any Borrower shall default in the Foreign Currency, each
Bank may, through the Agent, require such payment to be made in Dollars in the
Dollar Equivalent amount of such payment. In any case in which any Borrower
shall make such payment in Dollars, such Borrower agrees to hold the Banks
harmless from any loss incurred by the Banks arising from any change in the
value of Dollars in relation to such Foreign Currency between the date such
payment became due and the date of payment thereof.
SECTION 8.07. Judgment Currency. If for the purpose of obtaining
-----------------
judgment in any court or enforcing any such judgment it is necessary to convert
any amount due in any Foreign Currency into any other currency, the rate of
exchange used shall be the Agent's spot rate of exchange for the purchase of the
Foreign Currency with such other currency at the close of business on the
Foreign Currency Business Day preceding the date on which judgment is given or
any order for payment is made. The obligation of the relevant Borrower in
respect of any amount due from it hereunder shall, notwithstanding any judgment
or order for a liquidated sum or sums in respect of amounts due hereunder or
under any judgment or order in any other currency or otherwise be discharged
only to the extent that on the Foreign Currency Business Day following receipt
by the Agent of any payment in a currency other than the relevant Foreign
Currency the Agent is able (in accordance with normal banking procedures) to
purchase an amount of the relevant Foreign Currency with such other currency
equal to the amount owed. If the amount of the relevant Foreign Currency that
the Agent is able to purchase with such other currency is less than the amount
due in the relevant Foreign Currency, notwithstanding any judgment or order,
such Borrower shall indemnify the Banks for the shortfall.
SECTION 8.08. Limitation on Certain Payment Obligations. (a) Each
-----------------------------------------
Bank or the Agent shall make written demand on any Borrower for indemnification
or compensation pursuant to Section 8.03, 8.05 or 8.06 hereof no later than 120
days after the event giving rise to the claim for indemnification or
compensation occurs.
(b) In the event that any Bank or the Agent fails to give any Borrower
notice within the applicable time limitation
<PAGE>
prescribed in (a) above, neither such Borrower nor any other Borrower shall have
any obligation to pay such claim for compensation or indemnification hereunder.
ARTICLE IX
MISCELLANEOUS
-------------
SECTION 9.01. Notices. All notices, requests and other communications
-------
to any party hereunder shall be in writing (including bank wire, telecopier or
similar writing) and shall be given to such party at its address or telecopier
number set forth on the signature pages hereof or such other address or
telecopier number as such party may hereafter specify for the purpose by notice
to each other party. Each such notice, request or other communication shall be
effective (i) if given by telecopier, when such telecopy is transmitted to the
telecopier number specified in this Section and the appropriate confirmation is
received, (ii) if given by mail, 72 hours after such communication is deposited
in the mails with first class postage prepaid, addressed as aforesaid or (iii)
if given by any other means, when delivered at the address specified in this
Section; provided that notices to the Agent under Article II or Article VIII
--------
shall not be effective until received.
SECTION 9.02. No Waivers. No failure or delay by the Agent or any
----------
Bank in exercising any right, power or privilege hereunder or under any Note or
other Loan Document shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 9.03. Expenses; Documentary Taxes. The Borrowers shall pay
---------------------------
(i) all reasonable out-of-pocket expenses of the Agent, including actual fees
and disbursements of special counsel for the Banks and the Agent, in connection
with the preparation and negotiation of this Agreement and the other Loan
Documents, any waiver or consent hereunder or thereunder or any amendment hereof
or thereof or any Default or alleged Default hereunder or thereunder and (ii) if
a Default occurs, all reasonable out-of-pocket expenses incurred by the Agent
and the Banks, including actual fees and disbursements of outside counsel or the
equivalent allocated costs of in-house counsel, in connection with such Default
and collection and other enforcement proceedings resulting therefrom, including
out-of-pocket expenses incurred in enforcing this Agreement and
<PAGE>
the other Loan Documents. The Borrowers shall indemnify the Agent and each Bank
against any transfer taxes, documentary taxes, and other similar taxes,
assessments or charges made by any Authority by reason of the execution and
delivery of this Agreement or the other Loan Documents.
SECTION 9.04. Indemnification. The Borrowers shall indemnify the
---------------
Agent, the Banks and each Affiliate thereof and their respective directors,
officers, employees and agents from, and hold each of them harmless against, any
and all actual losses, liabilities, claims or damages to which any of them may
become subject, insofar as such losses, liabilities, claims or damages arise out
of or result from any actual or proposed use by the Borrowers of the proceeds of
any extension of credit by any Bank hereunder or breach by the Borrowers of this
Agreement or any other Loan Document or from any investigation, litigation
(including, without limitation, any actions taken by the Agent or any of the
Banks to enforce this Agreement or any of the other Loan Documents) or other
proceeding (including, without limitation, any threatened investigation or
proceeding) relating to the foregoing, and the Borrowers shall reimburse the
Agent and each Bank, and each Affiliate thereof and their respective directors,
officers, employees and agents, upon demand for any expenses (including, without
limitation, actual and reasonable legal fees) incurred in connection with any
such investigation or proceeding; but excluding any such losses, liabilities,
claims, damages or expenses incurred by reason of the gross negligence or wilful
misconduct of the Person to be indemnified; provided, however, that a Borrower
-------- -------
shall not be liable under this Section 9.04 in connection with any claim under
any cause of action by or against any Person indemnified under this Section 9.04
with respect to which and solely to the extent to which such Borrower or an
Affiliate of such Borrower is both (i) adverse to the Person being indemnified
with respect to such claim under such cause of action, and (ii) the prevailing
party with respect to such claim under such cause of action.
SECTION 9.05 Setoff; Sharing of Setoffs. (a) Each Borrower agrees
--------------------------
that the Agent and each Bank, and Wachovia as to the Swing Loan Note, shall have
a lien for all indebtedness and obligations owing to them from such Borrower
under the Loan Documents upon all deposits or deposit accounts, of any kind, or
any interest in any deposits or deposit accounts thereof, now or hereafter
pledged, mortgaged, transferred or assigned to the Agent or any such Bank or
otherwise in the possession or control of the Agent or any such Bank for any
purpose for the account or benefit of such Borrower and including any balance of
any deposit account or of any credit of such Borrower with the Agent or any such
Bank, whether now existing or hereafter established hereby authorizing the Agent
and each Bank at any time or times during the continuation of an Event of
Default with or without prior
<PAGE>
notice to apply such balances or any part thereof to such of the indebtedness
and obligations owing by such Borrower to the Banks and/or the Agent then past
due and in such amounts as they may elect, and whether or not the collateral, if
any, or the responsibility of other Persons primarily, secondarily or otherwise
liable may be deemed adequate. For the purposes of this paragraph, all
remittances and property shall be deemed to be in the possession of the Agent or
any such Bank as soon as the same may be put in transit to it by mail or carrier
or by other bailee.
(b) Each Bank agrees that if it shall, by exercising any right of
setoff or counterclaim or resort to collateral security or otherwise, receive
payment of a proportion of the aggregate amount of principal and interest owing
with respect to the Note held by it which is greater than the proportion
received by any other Bank in respect of the aggregate amount of all principal
and interest owing with respect to the Note held by such other Bank, the Bank
receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Banks owing to such other Banks,
and such other adjustments shall be made, as may be required so that all such
payments of principal and interest with respect to the Notes held by the Banks
owing to such other Banks shall be shared by the Banks pro rata; provided that
--------
(i) nothing in this Section shall impair the right of any Bank to exercise any
right of setoff or counterclaim it may have and to apply the amount subject to
such exercise to the payment of indebtedness of the Borrower other than its
indebtedness under the Notes, and (ii) if all or any portion of such payment
received by the purchasing Bank is thereafter recovered from such purchasing
Bank, such purchase from each other Bank shall be rescinded and such other Bank
shall repay to the purchasing Bank the purchase price of such participation to
the extent of such recovery together with an amount equal to such other Bank's
ratable share (according to the proportion of (x) the amount of such other
Bank's required repayment to (y) the total amount so recovered from the
purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. Each Borrower
agrees, to the fullest extent it may effectively do so under applicable law,
that any holder of a participation in a Note, whether or not acquired pursuant
to the foregoing arrangements, may exercise rights of setoff or counterclaim and
other rights with respect to such participation as fully as if such holder of a
participation were a direct creditor of such Borrower in the amount of such
participation.
SECTION 9.06. Amendments and Waivers. (a) Any provision of this
----------------------
Agreement, the Notes, the Parent Guaranty or any other Loan Documents may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed by the
<PAGE>
Borrowers or the Parent (with respect to the Parent Guaranty) and the Required
Banks (and, if the rights or duties of the Agent are affected thereby, by the
Agent); provided that, no such amendment or waiver shall, unless signed by all
--------
Banks, (i) change the Commitment of any Bank or subject any Bank to any
additional obligation, (ii) change the principal of or rate of interest on any
Loan or any fees (other than fees payable to the Agent) hereunder, (iii) change
the date fixed for any payment of principal of or interest on any Loan or any
fees hereunder, (iv) change the amount of principal, interest or fees due on any
date fixed for the payment thereof, (v) change the percentage of the Commitments
or of the aggregate unpaid principal amount of the Notes, or the percentage of
Banks, which shall be required for the Banks or any of them to take any action
under this Section or any other provision of this Agreement, (vi) change the
manner of application of any payments made under this Agreement or the Notes, or
(vii) release any the Parent Guaranty or any other Guarantee given to support
payment of the Loans.
(b) The Borrowers will not solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of this
Agreement unless each Bank shall be informed thereof by the Borrowers and shall
be afforded an opportunity of considering the same and shall be supplied by the
Borrower with sufficient information to enable it to make an informed decision
with respect thereto. Executed or true and correct copies of any waiver or
consent effected pursuant to the provisions of this Agreement shall be delivered
by the Borrowers to each Bank forthwith following the date on which the same
shall have been executed and delivered by the requisite percentage of Banks.
The Borrowers will not, directly or indirectly, pay or cause to be paid any
remuneration, whether by way of supplemental or additional interest, fee or
otherwise, to any Bank (in its capacity as such) as consideration for or as an
inducement to the entering into by such Bank of any waiver or amendment of any
of the terms and provisions of this Agreement unless such remuneration is
concurrently paid, on the same terms, ratably to all such Banks.
SECTION 9.07. No Margin Stock Collateral. Each of the Banks
--------------------------
represents to the Agent and each of the other Banks that it in good faith is
not, directly or indirectly (by negative pledge or otherwise), relying upon any
Margin Stock as collateral in the extension or maintenance of the credit
provided for in this Agreement.
SECTION 9.08. Successors and Assigns. (a) The provisions of this
----------------------
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided that the Borrower may not
assign or otherwise transfer any of its rights under this Agreement.
<PAGE>
(b) Any Bank may at any time sell to one or more Persons (each a
"Participant") participating interests in any Loan owing to such Bank, any Note
held by such Bank, any Commitment hereunder or any other interest of such Bank
hereunder. In the event of any such sale by a Bank of a participating interest
to a Participant, such Bank's obligations under this Agreement shall remain
unchanged, such Bank shall remain solely responsible for the performance
thereof, such Bank shall remain the holder of any such Note for all purposes
under this Agreement, and the Borrower and the Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement. In no event shall a Bank that sells a
participation be obligated to the Participant to take or refrain from taking any
action hereunder except that such Bank may agree that it will not (except as
provided below), without the consent of the Participant, agree to (i) the change
of any date fixed for the payment of principal of or interest on the related
loan or loans, (ii) the change of the amount of any principal, interest or fees
due on any date fixed for the payment thereof with respect to the related loan
or loans, (iii) the change of the principal of the related loan or loans, (iv)
any change in the rate at which either interest is payable thereon or (if the
Participant is entitled to any part thereof) fee is payable hereunder from the
rate at which the Participant is entitled to receive interest or fee (as the
case may be) in respect of such participation, (v) the release or substitution
of all or any substantial part of the collateral (if any) held as security for
the Loans, or (vi) the release of any Guarantee given to support payment of the
Loans. The Borrowers agree that each Participant shall be entitled to the
benefits of Article VIII with respect to its participation in Loans outstanding
from time to time.
(c) Subject to the proviso set forth below, any Bank may at any time
assign to one or more banks or financial institutions (each an "Assignee") all,
or in the case of its Syndicated Loans and Commitments, a proportionate part of
all its Syndicated Loans and Commitments, of its rights and obligations under
this Agreement, the Notes and the other Loan Documents, and such Assignee shall
assume all such rights and obligations, pursuant to an Assignment and
Acceptance, executed by such Assignee, such transferor Bank and the Agent (and,
in the case of an Assignee that is not then a Bank, subject to clause (iii)
below, by the Parent); provided that (i) no interest may be sold by a Bank
-------------
pursuant to this paragraph (c) unless the Assignee shall agree to assume ratably
equivalent portions of the transferor Bank's Commitment, (ii) if a Bank is
assigning only a portion of its Commitment, then, the amount of the Commitment
being assigned (determined as of the effective date of the assignment) shall be
in an amount not less than $15,000,000, (iii) except during the continuance of a
Default, no interest may
<PAGE>
be sold by a Bank pursuant to this paragraph (c) to any Assignee that is not
then a Bank (or an Affiliate of a Bank) without the consent of the Borrower and
the Agent, which consent shall not be unreasonably withheld, (iv) no Bank may
have more than 2 Assignees that are not then Banks or Affiliates thereof at any
one time, and (v) except during the continuance of a Default, the Agent may not
assign more than 50% of its Commitment in effect as of the Closing Date. Upon
(A) execution of the Assignment and Acceptance by such transferor Bank, such
Assignee, the Agent and (if applicable) the Parent, (B) delivery of an executed
copy of the Assignment and Acceptance to the Parent and the Agent, (C) payment
by such Assignee to such transferor Bank of an amount equal to the purchase
price agreed between such transferor Bank and such Assignee, and (D) payment of
a processing and recordation fee of $2,500 to the Agent, such Assignee shall for
all purposes be a Bank party to this Agreement and shall have all the rights and
obligations of a Bank under this Agreement to the same extent as if it were an
original party hereto with a Commitment as set forth in such instrument of
assumption, and the transferor Bank shall be released from its obligations
hereunder to a corresponding extent, and no further consent or action by the
Parent, the Banks or the Agent shall be required. Upon the consummation of any
transfer to an Assignee pursuant to this paragraph (c), the transferor Bank, the
Agent and the Borrowers shall make appropriate arrangements so that, if
required, new Notes are issued to such Assignee.
(d) Subject to the provisions of Section 9.09 (which shall be binding
on each Transferee), the Borrowers authorize each Bank to disclose to any
potential and actual Participant or potential and actual Assignee (each a
"Transferee") and any prospective Transferee any and all financial information
in such Bank's possession concerning the Borrowers which has been delivered to
such Bank by the Borrowers pursuant to this Agreement or which has been
delivered to such Bank by the Borrower in connection with such Bank's credit
evaluation prior to entering into this Agreement.
(e) No Transferee shall be entitled to receive any greater payment
under Section 2.12(d), Section 8.03, or Section 8.05 than the transferor Bank
would have been entitled to receive with respect to the rights transferred as
such transferred rights existed as of such date, unless such transfer is made
(i) with the Borrower's prior written consent, (ii) by reason of the provisions
of Section 8.02 or 8.03 requiring such Bank to designate a different Lending
Office under certain circumstances, or (iii) at a time when the circumstances
giving rise to such greater payment did not exist.
(f) Anything in this Section 9.08 to the contrary notwithstanding, any
Bank may assign and pledge all or any
<PAGE>
portion of the Loans and/or obligations owing to it to any Federal Reserve Bank
or the United States Treasury as collateral security pursuant to Regulation A of
the Board of Governors of the Federal Reserve System and any Operating Circular
issued by such Federal Reserve Bank, provided that any payment in respect of
such assigned Loans and/or obligations made by the Borrower to the assigning
and/or pledging Bank in accordance with the terms of this Agreement shall
satisfy the Borrowers' obligations hereunder in respect of such assigned Loans
and/or obligations to the extent of such payment. No such assignment shall
release the assigning and/or pledging Bank from its obligations hereunder.
SECTION 9.09. Confidentiality. Each Bank agrees to exercise
---------------
commercially reasonable efforts to keep any information delivered or made
available by the Borrowers to it which is clearly indicated to be confidential
information (including, without limitation, the information set forth in the
Foreign Jurisdiction Letter, a copy of which has been delivered to each of the
Banks prior to the Closing Date), confidential from anyone other than persons
employed or retained by such Bank who are or are expected to become engaged in
evaluating, approving, structuring or administering the Loans; provided, however
-------- -------
that nothing herein shall prevent any Bank from disclosing such information (i)
to any other Bank, (ii) upon the order of any court or administrative agency,
(iii) upon the request or demand of any regulatory agency or authority having
jurisdiction over such Bank, (iv) which has been publicly disclosed, (v) to the
extent reasonably required in connection with any litigation to which the Agent,
any Bank or their respective Affiliates may be a party, (vi) to the extent
reasonably required in connection with the exercise of any remedy hereunder,
(vii) to such Bank's legal counsel and independent auditors and (viii) to any
actual or proposed Participant, Assignee or other Transferee of all or part of
its rights hereunder which has agreed in writing to be bound by the provisions
of this Section 9.09; provided that should disclosure of any such confidential
--------
information be required by virtue of clause (ii) of the immediately preceding
sentence, any relevant Bank shall promptly notify the Borrowers of same (unless
prohibited by such order in clause (ii)) so as to allow the Borrower to seek a
protective order or to take any other appropriate action; provided, further,
-------- -------
that, no Bank shall be required to delay compliance with any directive to
- ----
disclose any such information so as to allow the Borrowers to effect any such
action.
SECTION 9.10. Representation by Banks. Each Bank hereby represents
-----------------------
that it is a commercial lender or financial institution which makes Loans in the
ordinary course of its business and that it will make its Loans hereunder for
its own account in the ordinary course of such business; provided, however that,
-------- -------
subject to Section 9.08, the disposition of the
<PAGE>
Note or Notes held by that Bank shall at all times be within its exclusive
control.
SECTION 9.11. Obligations Several. The obligations of each Bank
-------------------
hereunder are several, and no Bank shall be responsible for the obligations or
commitment of any other Bank hereunder. Nothing contained in this Agreement and
no action taken by the Banks pursuant hereto shall be deemed to constitute the
Banks to be a partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Bank shall be a
separate and independent debt, and each Bank shall be entitled to protect and
enforce its rights arising out of this Agreement or any other Loan Document and
it shall not be necessary for any other Bank to be joined as an additional party
in any proceeding for such purpose.
SECTION 9.12. Georgia Law. This Agreement and each Note shall be
-----------
construed in accordance with and governed by the law of the State of Georgia.
SECTION 9.13. Severability. In case any one or more of the provisions
------------
contained in this Agreement, the Notes, the Parent Guaranty or any of the other
Loan Documents should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired thereby and
shall be enforced to the greatest extent permitted by law.
SECTION 9.14. Interest. In no event shall the amount of interest, and
--------
all charges, amounts or fees contracted for, charged or collected pursuant to
this Agreement, the Notes or the other Loan Documents and deemed to be interest
under applicable law (collectively, "Interest") exceed the highest rate of
interest allowed by applicable law (the "Maximum Rate"), and in the event any
such payment is inadvertently received by any Bank, then the excess sum (the
"Excess") shall be credited as a payment of principal, unless a Borrower shall
notify such Bank in writing that it elects to have the Excess returned
forthwith. It is the express intent hereof that the Borrowers not pay and the
Banks not receive, directly or indirectly in any manner whatsoever, interest in
excess of that which may legally be paid by the Borrower under applicable law.
The right to accelerate maturity of any of the Loans does not include the right
to accelerate any interest that has not otherwise accrued on the date of such
acceleration, and the Agent and the Banks do not intend to collect any unearned
interest in the event of any such acceleration. All monies paid to the Agent or
the Banks hereunder or under any of the Notes or the other Loan Documents,
whether at maturity or by prepayment, shall be subject to rebate of unearned
interest as and to the extent required by applicable law. By the execution of
this Agreement, each Borrower covenants
<PAGE>
that (i) the credit or return of any Excess shall constitute the acceptance by
such Borrower of such Excess, and (ii) such Borrower shall not seek or pursue
any other remedy, legal or equitable , against the Agent or any Bank, based in
whole or in part upon contracting for charging or receiving any Interest in
excess of the Maximum Rate. For the purpose of determining whether or not any
Excess has been contracted for, charged or received by the Agent or any Bank,
all interest at any time contracted for, charged or received from the Borrower
in connection with this Agreement, the Notes or any of the other Loan Documents
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread in equal parts throughout the full term of the Commitments.
The Borrowers, the Agent and each Bank shall, to the maximum extent permitted
under applicable law, (i) characterize any non-principal payment as an expense,
fee or premium rather than as Interest and (ii) exclude voluntary prepayments
and the effects thereof. The provisions of this Section shall be deemed to be
incorporated into each Note and each of the other Loan Documents (whether or not
any provision of this Section is referred to therein). All such Loan Documents
and communications relating to any Interest owed by the Borrowers and all
figures set forth therein shall, for the sole purpose of computing the extent of
obligations hereunder and under the Notes and the other Loan Documents be
automatically recomputed by the Borrowers, and by any court considering the
same, to give effect to the adjustments or credits required by this Section.
SECTION 9.15. Interpretation. No provision of this Agreement or any
--------------
of the other Loan Documents shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have structured or
dictated such provision.
SECTION 9.16. Waiver of Jury Trial; Consent to Jurisdiction. Each
---------------------------------------------
Borrower (a) and each of the Banks and the Agent irrevocably waives, to the
fullest extent permitted by law, any and all right to trial by jury in any legal
proceeding arising out of this Agreement, any of the other Loan Documents, or
any of the transactions contemplated hereby or thereby, (b) submits to the
nonexclusive personal jurisdiction in the State of Georgia, the courts thereof
sitting in Fulton County, Georgia and the United States District Courts sitting
in Fulton County, Georgia, for the enforcement of this Agreement, the Notes and
the other Loan Documents, (c) waives any and all personal rights under the law
of any jurisdiction to object on any basis (including, without limitation,
inconvenience of forum) to jurisdiction or venue within the State of Georgia for
the purpose of litigation to enforce this Agreement, the Notes or the other Loan
Documents, and (d) agrees that service of process may be
<PAGE>
made upon it in the manner prescribed in Section 9.01 for the giving of notice
to the Borrowers. Nothing herein contained, however, shall prevent the Agent
from bringing any action or exercising any rights against any security and
against the Borrower personally, and against any assets of the Borrowers, within
any other state or jurisdiction.
SECTION 9.17. Counterparts. This Agreement may be signed in any
------------
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
SECTION 9.18. Source of Funds -- ERISA. Each of the Banks hereby
------------------------
severally (and not jointly) represents to the Borrowers that no part of the
funds to be used by such Bank to fund the Loans hereunder from time to time
constitutes (i) assets allocated to any separate account maintained by such Bank
in which any employee benefit plan (or its related trust) has any interest nor
(ii) any other assets of any employee benefit plan. As used in this Section, the
terms "employee benefit plan" and "separate account" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, under seal, by their respective authorized officers as of the
day and year first above written.
EQUIFAX INC.
By:
---------------------------------
Title:
1600 Peachtree Street, N.W.
Atlanta, Georgia 30309
Attention: Assistant Treasurer
Telecopier number: (404) 888-3528
Confirmation number: (404) 885-8059
<PAGE>
COMMITMENTS WACHOVIA BANK, N.A.,
- ----------- as Agent and as a Bank (SEAL)
$125,000,000 By:
----------- ---------------------------------
Title:
Lending Office
--------------
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Brad Marcus
Telecopier number: 404-332-5016
Confirmation number: 404-332-5920
<PAGE>
NATIONSBANK, N.A.
as Co-Agent and as a Bank (SEAL)
$87,500,000
---------- By:
-----------------------------------
Title:
Lending Office
--------------
600 Peachtree Street, N.E.
21st Floor
Atlanta, Georgia 30308
Attention: Kathy Robinson
Telecopier number: 404-607-6484
Confirmation number: 404-607-5887
<PAGE>
BANK OF AMERICA NT&SA
as Co-Agent and as a Bank (SEAL)
$87,500,000
---------- By:
-----------------------------------
Title:
Lending Office
--------------
1230 Peachtree Street
Suite 3800
Atlanta, Georgia 30309
Attention: Michelle Kacergis
Telecopier number: 404-249-6938
Confirmation number: 404-249-6906
<PAGE>
SUNTRUST BANK, ATLANTA
as Co-Agent and as a Bank (SEAL)
$87,500,000
---------- By:
-----------------------------------
Title:
By:
-----------------------------------
Title:
Lending Office
--------------
25 Park Place
Atlanta, Georgia 30303
Attention: Brian Peters
Telecopier number: 404-588-8833
Confirmation number: 404-827-6118
<PAGE>
THE FIRST NATIONAL BANK OF CHICAGO
as Co-Agent and as a Bank (SEAL)
$87,500,000
---------- By:
-----------------------------------
Title:
Lending Office
--------------
One First National Plaza
Suite 0374634
Chicago, Illinois 60670
Attention: Brett C. Neubert
Telecopier number: 312-732-2991
Confirmation number: 312-732-2752
<PAGE>
CIBC INC.
as a Bank (SEAL)
$70,000,000
---------- By:
-----------------------------------
Title:
Lending Office
--------------
2727 Paces Ferry Road
Bldg. 2, Suite 1200
Atlanta, Georgia 30339
Attention: Roger Colden
Telecopier number: 770-319-4954
Confirmation number: 770-319-4902
<PAGE>
CITIBANK, N.A.
as a Bank (SEAL)
$45,000,000
---------- By:
-----------------------------------
Title:
Lending Office
--------------
400 Perimeter Center Terrace
Suite 600
Atlanta, Georgia 30346
Attention: Bruce Simmons
Telecopier number: 770-668-8137
Confirmation number: 770-668-8108
<PAGE>
BARCLAYS BANK
as a Bank (SEAL)
$45,000,000
---------- By:
-----------------------------------
Title:
Lending Office
--------------
75 Wall Street
New York, New York 10265
Attention: Terrance Bullock
Telecopier number: 212-412-7590
Confirmation number: 212-412-2554
<PAGE>
MELLON BANK, N.A.
as a Bank (SEAL)
$45,000,000
---------- By:
-----------------------------------
Title:
Lending Office
--------------
One Mellon Bank Center
Room 4350
Pittsburgh, Pennsylvania 15258-0001
Attention: Chip Staub
Telecopier number: 412-236-1914
Confirmation number: 412-234-1068
<PAGE>
BANK OF TOKYO-MITSUBISHI, LTD.
as a Bank (SEAL)
$45,000,000
---------- By:
-----------------------------------
Title:
Lending Office
--------------
133 Peachtree Street, N.E.
Suite 4970
Atlanta, Georgia 30303-1808
Attention: Bill Otott
Telecopier number: 404-577-1155
Confirmation number: 404-222-4208
<PAGE>
THE FIRST UNION NATIONAL BANK
as a Bank (SEAL)
$45,000,000
---------- By:
-----------------------------------
Title:
Lending Office
--------------
999 Peachtree Street, N.E.
12th Floor
Atlanta, Georgia 30309
Attention: Johnathan D. Hook
Telecopier number: 404-225-4255
Confirmation number: 404-225-4055
- -----------------
TOTAL COMMITMENTS:
$750,000,000
<PAGE>
EXHIBIT A-1
-----------
FORM OF SYNDICATED DOLLAR NOTE
Atlanta, Georgia
_______________, 1997
For value received, [INSERT BORROWER NAME], a [_______] corporation
(the "Borrower"), promises to pay to the order of _______________,(the "Bank"),
for the account of its Lending Office, the principal sum of
___________________________________ AND NO/100 DOLLARS ($______), or such lesser
amount as shall equal the unpaid principal amount of each Loan made by the Bank
to the Borrower pursuant to the Credit Agreement referred to below, on the dates
and in the amounts provided in the Credit Agreement. The Borrower promises to
pay interest on the unpaid principal amount of this Syndicated Dollar Note on
the dates and at the rate or rates provided for Syndicated Loans in the Credit
Agreement. Interest on any overdue principal of and, to the extent permitted by
law, overdue interest on the principal amount hereof shall bear interest at the
Default Rate, as provided for in the Credit Agreement. All such payments of
principal and interest shall be made in lawful money of the United States in
Federal or other immediately available funds at the office of Wachovia Bank,
N.A., 191 Peachtree Street, N.E., Atlanta, Georgia 30303-1757, or such other
address as may be specified from time to time pursuant to the Credit Agreement.
All Loans made by the Bank, the respective maturities thereof, the
interest rates from time to time applicable thereto, and all repayments of the
principal thereof shall be recorded by the Bank and, prior to any transfer
hereof, endorsed by the Bank on the schedule attached hereto, or on a
continuation of such schedule attached to and made a part hereof; provided that
--------
the failure of the Bank to make any such recordation or endorsement shall not
affect the obligations of the Borrower hereunder or under the Credit Agreement.
This Syndicated Dollar Note is one of the Syndicated Dollar Notes
referred to in the Credit Agreement dated as of November 21, 1997 among the
Equifax Inc., its Wholly Owned Subsidiaries parties thereto, the Banks listed on
the signature pages thereof and Wachovia Bank, N.A., as Agent (as the same may
be amended and modified from time to time, the "Credit Agreement"). Terms
defined in the Credit Agreement are used herein with the same meanings.
Reference is made to the Credit Agreement for provisions for the optional and
mandatory prepayment and the repayment hereof and the acceleration of the
maturity hereof.
<PAGE>
IN WITNESS WHEREOF, the Borrower has caused this Syndicated Dollar
Note to be duly executed, under seal, by its duly authorized officer as of the
day and year first above written.
[BORROWER] (SEAL)
By: __________________________
Title:
<PAGE>
Syndicated Dollar Note (cont'd)
SYNDICATED DOLLAR LOANS AND PAYMENTS OF PRINCIPAL
--------------------------------------------------
Base Rate, Amount Amount of
or Euro- of Principal Maturity Notation
Date Dollar Loan Loan Repaid Date Made By
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT A-2
-----------
FORM OF SWING LOAN NOTE
Atlanta, Georgia
_____________________, 1997
For value received, [insert name of Borrower], a [_______] corporation
(the "Borrower"), promises to pay to the order of WACHOVIA BANK, N.A., (the
"Bank"), for the account of its Lending Office, the principal sum of THIRTY
MILLION AND NO/100 DOLLARS ($30,000,000), or such lesser amount as shall equal
the unpaid principal amount of each Swing Loan made by the Bank to the Borrower
pursuant to the Credit Agreement referred to below, on the dates and in the
amounts provided in the Credit Agreement. The Borrower promises to pay interest
on the unpaid principal amount of this Swing Loan Note at the rate provided for
Swing Loans on the dates provided for in the Credit Agreement. Interest on any
overdue principal of and, to the extent permitted by law, overdue interest on
the principal amount hereof shall bear interest at the Default Rate, as provided
for in the Credit Agreement. All such payments of principal and interest shall
be made in lawful money of the United States in Federal or other immediately
available funds at the office of Wachovia Bank, N.A., 191 Peachtree Street,
N.E., Atlanta, Georgia-1757, or such other address as may be specified from time
to time pursuant to the Credit Agreement.
All Swing Loans made by the Bank, the respective maturities thereof,
and all repayments of the principal thereof shall be recorded by the Bank and,
prior to any transfer hereof, endorsed by the Bank on the schedule attached
hereto, or on a continuation of such schedule attached to and made a part
hereof; provided that the failure of the Bank to make any such recordation or
--------
endorsement shall not affect the obligations of the Borrower hereunder or under
the Credit Agreement.
This Swing Loan Note is the Swing Loan Note referred to in the Credit
Agreement dated as of even date herewith among the Borrower, the other Borrowers
and the Banks listed on the signature pages thereof and Wachovia Bank, N.A., as
Agent (as the same may be amended and modified from time to time, the "Credit
Agreement"). Terms defined in the Credit Agreement are used herein with the
same meanings. Reference is made to the Credit Agreement for provisions for the
optional and mandatory prepayment and the repayment hereof and the acceleration
of the maturity hereof.
<PAGE>
IN WITNESS WHEREOF, the Borrower has caused this Swing Loan Note to be
duly executed, under seal, by its duly authorized officer as of the day and year
first above written.
[BORROWER] (SEAL)
By: __________________________
Title:
<PAGE>
Swing Loan Note (cont'd)
SWING LOANS AND PAYMENTS OF PRINCIPAL
- --------------------------------------------------------------------------------
Amount Amount of
of Principal Maturity Notation
Date Loan Repaid Date Made By
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT A-3
-----------
DOLLAR MONEY MARKET NOTE
Atlanta, Georgia
__________________, 1997
For value received, [INSERT NAME OF BORROWER], a [___________________]
corporation (the "Borrower"), promises to pay to the order of _______________,
(the "Bank"), for the account of its Lending Office, the outstanding principal
amount of each Dollar Money Market Loan made by the Bank to the Borrower
pursuant to the Credit Agreement referred to below, on the dates and in the
amounts provided in the Credit Agreement. The Borrower promises to pay interest
on the unpaid principal amount of each Dollar Money Market Loan on the dates and
at the rate or rates provided for in the Credit Agreement referred to below.
Interest on any overdue principal of and, to the extent permitted by law,
overdue interest on the principal amount hereof shall bear interest at the
Default Rate, as provided for in the Credit Agreement. All such payments of
principal and interest shall be made in lawful money of the United States in
Federal or other immediately available funds at the office of Wachovia Bank,
N.A., 191 Peachtree Street, N.E., Atlanta, Georgia 30303-1757, or such other
address as may be specified from time to time pursuant to the Credit Agreement.
All Dollar Money Market Loans made by the Bank, the respective
maturities thereof, the interest rates from time to time applicable thereto, and
all repayments of the principal thereof shall be recorded by the Bank and, prior
to any transfer hereof, endorsed by the Bank on the schedule attached hereto, or
on a continuation of such schedule attached to and made a part hereof; provided
--------
that the failure of the Bank to make any such recordation or endorsement shall
not affect the obligations of the Borrower hereunder or under the Credit
Agreement.
This Dollar Money Market Note is one of the Dollar Money Market Notes
referred to in the Credit Agreement dated as of November 21, 1997 among Equifax
Inc., its Wholly Owned Subsidiaries parties thereto, the Banks listed on the
signature pages thereof, Wachovia Bank, N.A., as Agent (as the same may be
amended and modified from time to time, the "Credit Agreement"). Terms defined
in the Credit Agreement are used herein with the same meanings. Reference is
made to the Credit Agreement for provisions for the optional and mandatory
prepayment and the repayment hereof and the acceleration of the maturity hereof.
<PAGE>
IN WITNESS WHEREOF, the Borrower has caused this Dollar Money Market
Note to be duly executed, under seal, by its duly authorized officer as of the
day and year first above written.
[BORROWER] (SEAL)
By: __________________________
Title:
<PAGE>
Dollar Money Market Note (cont'd)
DOLLAR MONEY MARKET LOANS AND PAYMENTS OF PRINCIPAL
- --------------------------------------------------------------------------------
Amount Amount of Stated
Interest of Principal Maturity Notation
Date Rate Loan Repaid Date Made By
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT A-4
-----------
FORM OF SYNDICATED FOREIGN CURRENCY NOTE
Atlanta, Georgia
_______________, 1997
For value received, [INSERT BORROWER NAME], a [_______] corporation
(the "Borrower"), promises to pay to the order of ______________________, a
____________________ (the "Bank"), for the account of its Lending Office, the
outstanding principal amount of the Syndicated Foreign Currency Loans made by
the Bank to the Borrower as Syndicated Foreign Currency Loans pursuant to the
Credit Agreement referred to below, on the dates and in the amounts provided in
the Credit Agreement. The Borrower promises to pay interest on the unpaid
principal amount of this Note on the dates and at the rate or rates provided for
Syndicated Foreign Currency Loans in the Credit Agreement. Interest on any
overdue principal of and, to the extent permitted by law, overdue interest on
the principal amount hereof shall bear interest at the Default Rate, as provided
for in the Credit Agreement. All such payments of principal and interest shall
be made in lawful money of the applicable Foreign Currency in immediately
available funds at the office of Wachovia Bank, N.A., 191 Peachtree Street,
N.E., Atlanta, Georgia 30303-1757, or such other address as may be specified
from time to time pursuant to the Credit Agreement.
All Syndicated Foreign Currency Loans made by the Bank, the respective
maturities thereof, the Foreign Currency in which made, the interest rates from
time to time applicable thereto, and all repayments of the principal thereof
shall be recorded by the Bank and, prior to any transfer hereof, endorsed by the
Bank on the schedule attached hereto, or on a continuation of such schedule
attached to and made a part hereof; provided that the failure of the Bank to
--------
make any such recordation or endorsement shall not affect the obligations of the
Borrower hereunder or under the Credit Agreement.
This Note is one of the Syndicated Foreign Currency Notes referred to
in the Credit Agreement dated as November 21, 1997 among the Borrower, the other
Borrowers and the Banks listed on the signature pages thereof and Wachovia Bank,
N.A., as Agent (as the same may be amended and modified from time to time, the
"Credit Agreement"). Terms defined in the Credit Agreement are used herein with
the same meanings. Reference is made to the Credit Agreement for provisions for
the optional and mandatory prepayment and the repayment hereof and the
acceleration of the maturity hereof.
<PAGE>
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed, under seal, by its duly authorized officer as of the day and year
first above written.
[BORROWER] (SEAL)
By: __________________________
Title:
<PAGE>
Syndicated Foreign Currency Note (cont'd)
SYNDICATED FOREIGN CURRENCY LOANS AND PAYMENTS OF PRINCIPAL
-----------------------------------------------------------
Amount of Amount of
Interest Loan and Principal Maturity Notation
Date Rate Currency Repaid Date Made By
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT A-5
-----------
FOREIGN CURRENCY MONEY MARKET NOTE
Atlanta, Georgia
_______________, 1997
For value received, [INSERT BORROWER NAME], a [_______] corporation
(the "Borrower"), promises to pay to the order of _______________,(the "Bank"),
for the account of its Lending Office, the outstanding principal amount of each
Foreign Currency Money Market Loan made by the Bank to the Borrower pursuant to
the Credit Agreement referred to below, on the dates and in the amounts provided
in the Credit Agreement. The Borrower promises to pay interest on the unpaid
principal amount of this Foreign Currency Money Market Note on the dates and at
the rate or rates provided for in the Credit Agreement referred to below.
Interest on any overdue principal of and, to the extent permitted by law,
overdue interest on the principal amount hereof shall bear interest at the
Default Rate, as provided for in the Credit Agreement. All such payments of
principal and interest shall be made in lawful money of the applicable Foreign
Currency for each such Foreign Currency Money Market Loan in immediately
available funds at the office of Wachovia Bank, N.A., 191 Peachtree Street,
N.E., Atlanta, Georgia 30303-1757, or such other address as may be specified
from time to time pursuant to the Credit Agreement.
All Foreign Currency Money Market Loans made by the Bank, the
respective maturities thereof, Foreign Currency in which made, the interest
rates from time to time applicable thereto, and all repayments of the principal
thereof shall be recorded by the Bank and, prior to any transfer hereof,
endorsed by the Bank on the schedule attached hereto, or on a continuation of
such schedule attached to and made a part hereof; provided that the failure of
--------
the Bank to make any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Credit Agreement.
This Foreign Currency Money Market Note is one of the Foreign Currency
Money Market Notes referred to in the Credit Agreement dated as of November 21,
1997 among Equifax Inc., its Wholly Owned Subsidiaries parties thereto, the
Banks listed on the signature pages thereof, Wachovia Bank, N.A., as Agent (as
the same may be amended and modified from time to time, the "Credit Agreement").
Terms defined in the Credit Agreement are used herein with the same meanings.
Reference is made to the Credit Agreement for provisions for the optional and
mandatory prepayment and the repayment hereof and the acceleration of the
maturity hereof.
<PAGE>
IN WITNESS WHEREOF, the Borrower has caused this Foreign Currency
Money Market Note to be duly executed, under seal, by its duly authorized
officer as of the day and year first above written.
[BORROWER] (SEAL)
By: __________________________
Title:
<PAGE>
Foreign Currency Money Market Note (cont'd)
FOREIGN CURRENCY MONEY MARKET LOANS AND PAYMENTS OF PRINCIPAL
-------------------------------------------------------------------
Amount of Amount of Stated
Interest Loan and Principal Maturity Notation
Date Rate Currency Repaid Date Made By
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT B
---------
OPINION OF
COUNSEL FOR THE BORROWER
------------------------
[Dated as provided in Section 3.01 of the Credit Agreement]
To the Banks and the Agent
Referred to Below
c/o Wachovia Bank, N.A.,
as Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attn: Syndications Group
Dear Sirs:
We have served as special counsel for Equifax, Inc., a Georgia
corporation (the "BORROWER"), in connection with the Credit Agreement (the
"CREDIT AGREEMENT"), dated as of November 21, 1997, among the Borrower, the
Banks listed on the signature pages thereof and Wachovia Bank, N.A., as Agent.
Capitalized terms used herein and not otherwise defined herein are used herein
with the meanings ascribed to them in the Credit Agreement and in the
Interpretative Standards (as defined below); provided, however, that in the
event of any conflict between the definitions contained in the Credit Agreement
(on the one hand) and those contained in the Interpretative Standards (on the
other hand), the definitions in the Credit Agreement shall control.
This opinion letter is limited by, and is in accordance with, the
January 1, 1992 edition of the Interpretative Standards applicable to Legal
Opinions to Third Parties in Corporate Transactions adopted by the Legal Opinion
Committee of the Corporate and Banking Law Section of the State Bar of Georgia
(the "INTERPRETATIVE STANDARDS"), which Interpretative Standards are
incorporated in this opinion letter by this reference.
In connection with this representation, we have examined fully
executed counterparts of the following documents (items (a) through (c) below
are hereinafter referred to collectively as the "CREDIT DOCUMENTS"):
The Credit Agreement; The Notes, dated as of November 21, 1997, from
the Borrower to each of the Lenders; The Parent Guaranty, dated as of November
21, 1997, from the Borrower; and The
<PAGE>
other documents and material written agreements listed on Schedule I attached
----------
hereto.
In the capacity described above, we also have considered such matters
of law and of fact, together with such other records and documents of the
Borrower, certificates of officers or other representatives of the Borrower,
certificates of public officials, and such other documents as we have deemed
appropriate for the opinions and confirmations herein set forth.
The opinions set forth herein are limited to the laws of the State of
Georgia (the "STATE") and any applicable federal laws of the United States.
Based upon the foregoing, and subject to the other exceptions,
assumptions and qualifications set forth or incorporated herein by reference, it
is our opinion that:
1. The Borrower was duly organized as a corporation, and is
existing, and in good standing, under the laws of the State.
2. The Borrower has the corporate power to execute and deliver the
Credit Documents, to perform its obligations thereunder, to own and use its
Assets and to conduct its business.
3. The Borrower has duly authorized the execution and delivery of
the Credit Documents and all performance by it thereunder.
4. The Borrower has duly executed and delivered the Credit
Documents.
5. The execution and delivery by the Borrower of the Credit
Documents to which it is a party do not, and if the Borrower were now to perform
its obligations thereunder, such performance would not, result in any:
(i) violation of the Articles of Incorporation or By-Laws of the
Borrower;
(ii) violation of any existing United States federal or State
constitution, statute, regulation, rule, order or law to which the Borrower or
its Assets are subject;
(iii) breach of or default of any material written agreements;
(iv) creation or imposition of any contractual lien or security
interest in, on or against the Borrower's Assets under any material written
agreements (except as they may be contemplated by the Credit Documents); or
<PAGE>
(v) violation of any judicial or administrative decree, writ, judgment
or order to which, to our knowledge, the Borrower or its Assets are subject.
With your permission, we have assumed that the term "material written
agreements" used in clauses (iii) and (iv) above includes only those agreements
listed as such on Schedule I attached hereto.
----------
6. No consent, approval, authorization or other action by, or notice to
or filing with, any court or administrative or governmental body of the United
States or the State is required in connection with the execution and delivery by
the Borrower of the Credit Documents to which it is a party or the incurrence by
the Borrower of its obligations thereunder, except such consents, approvals,
authorizations, registrations or filings as have been made or obtained and are
in full force and effect.
7. Each Credit Document is enforceable against the Borrower.
8. To our knowledge, neither the Borrower nor any of the its
Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
9. To be best of our knowledge, neither the Borrower nor any of its
Subsidiaries is a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company" as such terms are defined in the Public Utility Holding
Company Act of 1935 as amended.
Based upon the foregoing, and subject to the other exceptions,
assumptions and qualifications set forth or incorporated by reference herein, we
hereby confirm to you that, to our knowledge, no litigation or other proceedings
against the Borrower or any of its Subsidiaries is pending or overtly threatened
by written communication to such person except such litigation or other proceeds
as are disclosed on Schedule I to the Credit Agreement as in effect on this
----------
date.
This opinion letter has been delivered solely for the benefit of the
addressees and their respective Transferees and counsel (including Jones, Day,
Reavis & Pogue) pursuant to the Credit Agreement and may not be relied upon by
any other person or entity or for any other purpose without the express written
permission of the undersigned.
Very truly yours,
<PAGE>
EXHIBIT C
---------
OPINION OF
JONES, DAY, REAVIS & POGUE, SPECIAL COUNSEL
FOR THE AGENT
-------------
[Dated as provided in Section 3.01 of the Credit Agreement]
To the Banks and the Agent
Referred to Below
c/o Wachovia Bank, N.A.,
as Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attn: Syndications Group
Dear Sirs:
We have participated in the preparation of the Credit Agreement (the
"Credit Agreement") dated as of November 21, 1997, among Equifax Inc., a Georgia
corporation (the "Parent"), its Wholly Owned Subsidiaries parties thereto
(together with the Parent, in its capacity as a borrower, the "Borrowers"), the
banks listed on the signature pages thereof (the "Banks") and Wachovia Bank,
N.A., as Agent (the "Agent"), and have acted as special counsel for the Agent
for the purpose of rendering this opinion pursuant to Section 3.01(d) of the
Credit Agreement. Terms defined in the Credit Agreement are used herein as
therein defined.
This opinion letter is limited by, and is in accordance with, the January
1, 1992 edition of the Interpretive Standards applicable to Legal Opinions to
Third Parties in Corporate Transactions adopted by the Legal Opinion Committee
of the Corporate and Banking Law Section of the State Bar of Georgia which
Interpretive Standards are incorporated herein by this reference.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, and assuming the due authorization,
execution and delivery of the Credit Agreement and each of the Notes by or on
behalf of the Borrower, and the Parent Guaranty by the Parent, we are of the
opinion that the Credit Agreement constitutes a valid and binding agreement of
the Borrower
<PAGE>
each Note constitutes a valid and binding obligations of the Borrower, and the
Parent Guaranty constitutes a valid and binding obligations of the Parent, in
each case enforceable in accordance with its terms except as: (i) the
enforceability thereof may be affected by bankruptcy, insolvency,
reorganization, fraudulent conveyance, voidable preference, moratorium or
similar laws applicable to creditors' rights or the collection of debtors'
obligations generally; (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability; and (iii) the enforceability of certain of the remedial, waiver
and other provisions of the Credit Agreement and the Notes may be further
limited by the laws of the State of Georgia; provided, however, such additional
laws do not, in our opinion, substantially interfere with the practical
realization of the benefits expressed in the Credit Agreement, the Notes and the
Parent Guaranty, except for the economic consequences of any procedural delay
which may result from such laws.
In giving the foregoing opinion, we express no opinion as to the effect (if
any) of any law of any jurisdiction except the State of Georgia. We express no
opinion as to the effect of the compliance or noncompliance of the Agent or any
of the Banks with any state or federal laws or regulations applicable to the
Agent or any of the Banks by reason of the legal or regulatory status or the
nature of the business of the Agent or any of the Banks.
This opinion is delivered to you in connection with the transaction referenced
above and may only be relied upon by you and any Assignee, Participant or other
Transferee under the Credit Agreement without our prior written consent.
Very truly yours,
<PAGE>
EXHIBIT D
---------
ASSIGNMENT AND ACCEPTANCE
-------------------------
Dated __________ __, ____
Reference is made to the Credit Agreement dated as of November 21, 1997
(together with all amendments and modifications thereto, the "Credit Agreement")
among Equifax Inc., its Wholly Owned Subsidiaries parties thereto (the
"Borrowers"), the Banks from time to time parties thereto and Wachovia Bank,
N.A., as Agent (the "Agent"). Terms defined in the Credit Agreement are used
herein with the same meaning.
_______________________________________________________ (the "Assignor")
and ________________________________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, without
recourse to the Assignor, and the Assignee hereby purchases and assumes from the
Assignor, a ______% interest in and to all of the Assignor's rights and
obligations under the Credit Agreement as of the Effective Date (as defined
below) (including, without limitation, a _____% interest (which on the Effective
Date hereof is $__________) in the Assignor's Commitment and a ______ interest
(which on the Effective Date hereof is $_______________) in the Syndicated Loans
and Money Market Loans owing to the Assignor and a ___% interest in the Notes
held by the Assignor (which on the Effective Date hereof is in the amount and
the Dollar Equivalent of $__________).
2. The Assignor (i) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant thereto, other
than that it is the legal and beneficial owner of the interest being assigned by
it hereunder, that such interest is free and clear of any adverse claim and that
as of the date hereof its Commitment (without giving effect to assignments
thereof which have not yet become effective) is $__________ and the aggregate
outstanding principal amount of Syndicated Loans owing to it is $_____________
[the aggregate principal amount of Dollar Money Market Loans owing to it is
$_________________ and the aggregate principal amount of Foreign Currency Money
Market Loans owing to it is the Dollar Equivalent of $________] (without giving
effect to assignments thereof which have not yet become effective); (ii) makes
no representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or observance by the
Borrower of any of its obligations under the Credit Agreement or any other
instrument
<PAGE>
or document furnished pursuant thereto; and (iii) attaches the Note[s] referred
to in paragraph 1 above and requests that the Agent exchange such Note[s] for
[(x)] a new Syndicated Dollar Note dated ________________, ____ in the principal
amount of $________, a new Syndicated Foreign Currency Note dated
________________, ___, a new Dollar Money Market Note dated _________,_____, and
a new Foreign Currency Money Market Note dated __________, ____, each payable to
the order of the Assignee [and (y) a new Syndicated Dollar Note dated
________________, ____ in the principal amount of $_____________, a new
Syndicated Foreign Currency Note dated _______________, ____, a new Dollar Money
Market Note dated _____________, ____ and a new Foreign Currency Money Market
Note dated ________________, ____, each payable to the order of the Assignor].
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.04(a) thereof (or any more recent financial statements of the Borrower
delivered pursuant to Section 5.01(a) or (b) thereof) and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (ii) agrees that it will,
independently and without reliance upon the Agent, the Assignor or any other
Bank and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement; (iii) confirms that it is a bank or financial
institution; (iv) appoints and authorizes the Agent to take such action as agent
on its behalf and to exercise such powers under the Credit Agreement as are
delegated to the Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Bank; (vi) specifies as its
Lending Office (and address for notices) the office set forth beneath its name
on the signature pages hereof, (vii) represents and warrants that the execution,
delivery and performance of this Assignment and Acceptance are within its
corporate powers and have been duly authorized by all necessary corporate action
(viii) makes the representation and warranty contained in Section 9.18 of the
Credit Agreement [, and (ix) attaches the forms prescribed by the Internal
Revenue Service of the United States certifying as to the Assignee's status for
purposes of determining exemption from United States withholding taxes with
respect to all payments to be made to the Assignee under the Credit Agreement
and the Notes or such other documents as are necessary to indicate that all such
payments are subject to such taxes at a rate reduced by an applicable tax
treaty].
4. The Effective Date for this Assignment and Acceptance shall be
__________, ____ (the "Effective Date"). Following the execution of this
Assignment and Acceptance, it will be delivered
<PAGE>
to the Agent for execution and acceptance by the Agent and to the Borrower for
execution by the Borrower.
5. Upon such execution and acceptance by the Agent [and execution by the
Parent] [If required by the Credit Agreement], from and after the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and, to the
extent rights and obligations have been transferred to it by this Assignment and
Acceptance, have the rights and obligations of a Bank thereunder and (ii) the
Assignor shall, to the extent its rights and obligations have been transferred
to the Assignee by this Assignment and Acceptance, relinquish its rights (other
than under Sections 8.03, 9.03 and 9.04 of the Credit Agreement) and be released
from its obligations under the Credit Agreement.
6. Upon such execution and acceptance by the Agent [and execution by the
Parent] [If required by the Credit Agreement], from and after the Effective
Date, the Agent shall make all payments in respect of the interest assigned
hereby to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments for periods prior to such acceptance by the Agent
directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of Georgia.
[NAME OF ASSIGNOR]
By:___________________________
Title:
[NAME OF ASSIGNEE]
By:___________________________
Title:
Lending Office:
[Address]
WACHOVIA BANK, N.A.,
As Agent
By:__________________________
Title:
[EQUIFAX INC.]
IF REQUIRED BY THE CREDIT AGREEMENT.
By:__________________________
Title:
<PAGE>
EXHIBIT E
---------
NOTICE OF BORROWING
-------------------
_____________________, 199__
Wachovia Bank, N.A., as Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Syndications Group
Re: Credit Agreement (as amended and modified from time to time, the
"Credit Agreement") dated as of November 21, 1997 by and among Equifax
Inc., its Wholly Owned Subsidiaries parties thereto, the Banks from
time to time parties thereto, and Wachovia Bank, N.A., as Agent.
Gentlemen:
Unless otherwise defined herein, capitalized terms used herein shall have
the meanings attributable thereto in the Credit Agreement.
This Notice of Borrowing is delivered to you pursuant to Section 2.02 of
the Credit Agreement.
On behalf of [INSERT NAME OF BORROWER], the Parent hereby requests a [Euro-
Dollar Borrowing] [Base Rate Borrowing] [Swing Loan Borrowing] [Syndicated
Foreign Currency Borrowing] [specify Foreign Currency] in the aggregate
principal amount [Dollar Equivalent] of $___________ to be made on
______________, _____, and for interest to accrue thereon at the rate
established by the Credit Agreement for [Euro-Dollar Loans] [Base Rate
Loans][Syndicated Foreign Currency Loans]. The duration of the Interest Period
with respect thereto (other than Swing Loan Borrowings bearing interest at the
Wachovia Alternative Rate which have an Interest Period of 5 Domestic Business
Days) shall be [1 month] [2 months] [3 months] [6 months] [30 days]. The
Borrowing requested hereunder for [insert name of Borrower] shall be advanced to
such Borrower in [insert name of country from Foreign Jurisdiction Letter].
The Aggregate Outstanding Loans on the date hereof, without giving effect
to the Borrowing requested hereby, is [less than] [equal to or greater than] 66
2/3% of the Aggregate Commitments.
The Parent's current Debt Rating is [_________].
<PAGE>
The Borrower, through the Parent, has caused this Notice of Borrowing to be
executed and delivered by its duly authorized officer this _____ day of
___________, _____.
EQUIFAX INC.
By:_______________________________
Title:
<PAGE>
EXHIBIT F
---------
COMPLIANCE CERTIFICATE
----------------------
Reference is made to the Credit Agreement dated as of November 21,
1997 (as modified and supplemented and in effect from time to time, the "Credit
Agreement") among Equifax Inc., its Wholly Owned Subsidiaries parties thereto,
the Banks from time to time parties thereto, Wachovia Bank, N.A., as Agent.
Capitalized terms used herein shall have the meanings ascribed thereto in the
Credit Agreement.
Pursuant to Section 5.01(c) of the Credit Agreement, (i)
_______________, the duly authorized ____________________ of Equifax Inc. hereby
certifies to the Agent and the Banks as required by Section 5.01(c) that the
information contained in the Compliance Check List attached hereto is true,
accurate and complete as of __________, ____, and (ii) ____________________, the
duly authorized ______________________________ of Equifax Inc. hereby (A)
certifies to the Agent and the Banks as required by Section 5.01(c) that to the
knowledge of such officer, no Default is in existence on and as of the date
hereof and (B) restates and reaffirms as required by Section 5.01(c) that to the
knowledge of such officer, the representations and warranties contained in
Article IV of the Credit Agreement are true on and as of the date hereof (x) as
stated as to representations and warranties which contain materiality
limitations, and (y) and in all material respects as to all other
representations and warranties.
Dated this _____ day of ____________, 199/200__.
EQUIFAX INC.
By:_______________________________
Title:
<PAGE>
COMPLIANCE CHECK LIST
Equifax Inc.
--------------------------
[TO BE COMPLETED]
<PAGE>
EXHIBIT G
---------
CLOSING CERTIFICATE
-------------------
Reference is made to the Credit Agreement (the "Credit Agreement") dated as
of November 21, 1997, among Equifax Inc., its Wholly Owned Subsidiaries parties
thereto, the Banks listed therein, and Wachovia Bank, N.A., as Agent.
Capitalized terms used herein have the meanings ascribed thereto in the Credit
Agreement.
Pursuant to Section 3.01(e) of the Credit Agreement,
_____________________________, the duly authorized ____________________ of
Equifax Inc. hereby certifies to the Agent and the Banks as required by Section
3.01(e) that (i) no Default has occurred and is continuing as of the date
hereof, and (ii) the representations and warranties contained in Article IV of
the Credit Agreement are true on and as of the date hereof (x) as stated as to
representations and warranties which contain materiality limitations, and (y)
and in all material respects as to all other representations and warranties.
Certified as of this 21st day of November, 1997.
EQUIFAX INC.
By:___________________________
Printed Name:______________
Title:_____________________
<PAGE>
EXHIBIT H
---------
MONEY MARKET QUOTE REQUEST
--------------------------
Wachovia Bank, N.A.,
as Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Syndications Group
Re: Money Market Quote Request
--------------------------
This Money Market Quote Request is given in accordance with Section 2.03 of
the Credit Agreement (as amended or modified from time to time, the "Credit
Agreement") dated as of November 21, 1997 among EQUIFAX INC, its Wholly Owned
Subsidiaries parties thereto, the Banks from time to time parties thereto, and
WACHOVIA BANK, N.A., as Agent. Terms defined in the Credit Agreement are used
herein as defined therein.
The Parent, on behalf of the Borrower listed below, hereby requests that
the Agent obtain quotes for a Money Market Borrowing based upon the following:
1. The Borrower for the requested Money Market Borrowing is
_______________________, a __________________ corporation, and the proposed
date of the Money Market Borrowing shall be ______________, ____ (the
"Money Market Borrowing Date")./1/*
2. The Money Market Borrowing shall be [a Dollar Money Market Borrowing] [a
Foreign Currency Money Market Borrowing to be made in the following Foreign
Currency: ______________].
3. The aggregate amount of the [Dollar Money Market Borrowing] [Foreign
Currency Money Market Borrowing] shall be [[__]______________________,
being the Dollar Equivalent of] $______________________./2/
4. The Stated Maturity Date(s) applicable to the Money Market Borrowing
shall be ______ days./3/
- ------------------------
* All numbered footnotes appear on the last page of this Exhibit H.
---------
<PAGE>
Very truly yours,
EQUIFAX INC., on behalf of the
above named Borrower.
By:
----------------------------------
Title:
- -------------------
/1/ The date must be a Euro-Dollar Business Day, with respect to a Dollar Money
Market Borrowing, or a Foreign Currency Business Day, with respect to a
Foreign Currency Money Market Borrowing.
/2/ The amount of the Money Market Borrowing is subject to Section 2.03(a) and
(b).
/3/ The Stated Maturity Dates are subject to Section 2.03(b)(ii)(B). The
Borrower may request that up to 2 different Stated Maturity Dates be
applicable to any Money Market Borrowing, provided that (i) each such
--------
Stated Maturity Date shall be deemed to be a separate Money Market Quote
Request and (ii) the Borrower shall specify the amounts of such Money
Market Borrowing to be subject to each such different Stated Maturity Date.
<PAGE>
EXHIBIT I
---------
MONEY MARKET QUOTE
------------------
Wachovia Bank, N.A.,
as Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Syndications Group
Re: Money Market Quote to [name of requesting Borrower]
---------------------------------------------------
This Money Market Quote is given in accordance with Section
2.03(c)(ii) of the Credit Agreement (as amended or modified from time to time,
the "Credit Agreement") dated as of November 21, 1997, among EQUIFAX INC. and
its Wholly Owned Subsidiaries parties thereto (the "Borrowers"), the Banks from
time to time parties thereto, and WACHOVIA BANK, N.A., as Agent. Terms defined
in the Credit Agreement are used herein as defined therein.
In response to the Money Market Quote Request of Equifax Inc. on
behalf of [name of requesting Borrower] dated ___________, ____, we hereby make
the following Money Market Quote on the following terms:
1. Quoting Bank:
2. Person to contact
at Quoting Bank:
3. Date of Money Market Borrowing:/1/*
4. We hereby offer to make Money Market Loan(s) in the following maximum
principal amounts for the following Interest Periods and at the following rates:
Maximum Stated
Principal Maturity
Amount /2/ Date /3/ Rate Per Annum/4/
--------- -------- ---- --- -----
5. Applicable withholding taxes, if any:
6. Total "all-in" rate (excluding the Adjusted IBOR Rate if a Foreign
Currency Money Market Borrowing):
- ------------------------
* All numbered footnotes appear on the last page of this Exhibit I.
---------
<PAGE>
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the Credit Agreement,
irrevocably obligate(s) us to make the Money Market Loan(s) for which any
offer(s) [is] [are] accepted, in whole or in part (subject to the last sentence
of Section 2.03(c)(i) of the Credit Agreement).
Very truly yours,
[Name of Bank]
Dated: By: __________________________
Authorized Officer
- ---------------------------
- ------------------------
/1/ As specified in the related Money Market Quote Request.
/2/ The principal amount bid for each Stated Maturity Date may not exceed the
principal amount requested. Money Market Quotes must be made for at least
(x) with respect to a Dollar Money Market Borrowing, $5,000,000 or a larger
multiple of $1.000,000 and (y) with respect to a Foreign Currency Money
Market Borrowing, the Dollar Equivalent of $5,000,000 or a larger multiple
of the Dollar Equivalent of $1,000,000.
/3/ The Stated Maturity Dates are subject to Section 2.03(b)(iii).
/4/ Subject to Section 2.03(c)(ii)(C).
<PAGE>
EXHIBIT J
---------
FORM OF PARENT GUARANTY
-----------------------
THIS GUARANTY (this "Guaranty") is made as of the 21st day of November,
1997, by EQUIFAX INC., a Georgia corporation (the "Guarantor") in favor of the
Agent, for the ratable benefit of the Banks, under the Credit Agreement referred
to below;
W I T N E S S E T H
WHEREAS, pursuant to a Credit Agreement dated as of even date herewith
(as amended or modified from time to time, the "Credit Agreement"), the
Guarantor, as a Borrower, its Wholly Owned Subsidiaries parties thereto, as
Borrowers thereunder from time to time (all such Borrowers, other than the
Guarantor, being collectively or individually, as the context shall require,
referred to as the "Principal" or the "Principals"), the Banks parties thereto
from time to time, and WACHOVIA BANK, N.A., as Agent (the "Agent"), the Banks
have provided, subject to the terms and conditions thereof, for extensions of
credit to be made by the Banks to the Principals and the Guarantor for the
benefit of the Principals and of the Guarantor;
WHEREAS, it is a condition precedent to the Agent and the Banks
executing the Credit Agreement that the Guarantor execute and deliver this
Guaranty whereby the Guarantor shall guarantee the payment when due of all
principal, interest and other amounts that shall be at any time payable by the
Principals under the Credit Agreement, the Notes and the other Loan Documents;
and
WHEREAS, in consideration of the financial and other support that the
Principals have provided, and such financial and other support as the Principals
may in the future provide, to Guarantor, and in order to induce the Banks and
the Agent to enter into the Credit Agreement, the Guarantor is willing to
guarantee the obligations of the Principals under the Credit Agreement, the
Notes, and the other Loan Documents;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
<PAGE>
SECTION 1. Definitions. Terms defined in the Credit Agreement and not
-----------
otherwise defined herein have, as used herein, the respective meanings provided
for therein.
SECTION 2. Representations and Warranties. The Guarantor incorporates
------------------------------
herein by reference as fully as if set forth herein all of its representations
and warranties contained in Article V of the Credit Agreement (which
representations and warranties shall be deemed to have been renewed by the
Guarantor upon each Borrowing under the Credit Agreement).
SECTION 3. The Guaranty. The Guarantor hereby unconditionally and
------------
irrevocably guarantees the full and punctual payment when due (whether at stated
maturity, upon acceleration or otherwise) of the principal of and interest on
each Note issued by the Principals pursuant to the Credit Agreement, and the
full and punctual payment when due of all other amounts payable by the
Principals under the Credit Agreement and the other Loan Documents, including
without limitation, all fees, costs, expenses, compensation amounts and
indemnification amounts (all of the foregoing obligations being referred to
collectively as the "Guaranteed Obligations"). Upon failure by the Principals
to pay punctually any such amount when due, the Guarantor agrees that it shall
forthwith on demand pay the amount not so paid at the relevant place and in the
manner and relevant currency specified in the Credit Agreement, the relevant
Note or the relevant Loan Document, as the case may be, together with interest
on amounts recoverable under this Guaranty from the time such amounts become due
until payment, at the Default Rate as provided in the Credit Agreement.
SECTION 4. Guaranty Unconditional. The obligations of the Guarantor
----------------------
hereunder shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(i) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of the Principals under the Credit
Agreement, any Note, or any other Loan Document, by operation of law or
otherwise or any obligation of any other guarantor of any of the
Obligations;
(ii) any modification or amendment of or supplement to the Credit
Agreement, any Note, or any other Loan Document;
(iii) any release, nonperfection or invalidity of any direct or
indirect security for any obligation of the Principals under the Credit
Agreement, any Note, any Loan Document, or any obligations of any other
guarantor of any of the Guaranteed Obligations;
<PAGE>
(iv) any change in the corporate existence, structure or
ownership of the Principals or any other guarantor of any of the Guaranteed
Obligations, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting the Principals, or any other guarantor of the
Guaranteed Obligations, or its assets or any resulting release or discharge
of any obligation of the Principals, or any other guarantor of any of the
Guaranteed Obligations;
(v) the existence of any claim, setoff or other rights which the
Guarantor may have at any time against the Principals, any other guarantor
of any of the Guaranteed Obligations, the Agent, any Bank or any other
Person, whether in connection herewith or any unrelated transactions,
provided that nothing herein shall prevent the assertion of any such claim
by separate suit or compulsory counterclaim;
(vi) any invalidity or unenforceability relating to or against
the Principals, or any other guarantor of any of the Guaranteed Obligations,
for any reason related to the Credit Agreement, any other Loan Document, or
any other Guaranty, or the lack of legal existence of any Principal, or any
provision of applicable law or regulation purporting to prohibit or make
illegal the payment by the Principals, or any other guarantor of the
Guaranteed Obligations, of the principal of or interest on any Note or any
other amount payable by the Principals under the Credit Agreement, the
Notes, or any other Loan Document, or the performance of any other
obligation or undertaking of any of the Principals under the Credit
Agreement, any other Loan Document, or any other Guaranty or otherwise
making any of the Guaranteed Obligations irrecoverable from any of the
Principals for any reason;
(vii) any law, regulation, order, decree or directive (whether or
not having the force of law) or any interpretation thereof, now or hereafter
in effect in any jurisdiction, that purports to modify any of the terms of
or rights of any Bank with respect to any Guaranteed Obligation or under the
Credit Agreement or any other Loan Document or this Guaranty, including
without limitation any law, regulation, order, decree or directive or
interpretation thereof that purports to require or permit the satisfaction
of any Guaranteed Obligation other than strictly in accordance with the
terms of the Credit Agreement or any other Loan Document (such as by the
tender of a currency other than the relevant Foreign Currency) or that
restricts the procurement of the Foreign Currency by any Borrower or the
Guarantor, or any agreement, whether or not signed by or on behalf of any
Bank, in connection with the
<PAGE>
restructuring or rescheduling of public or private obligations in any
Borrower's country, whether or not such agreement is stated to cause or
permit the discharge of the Guaranteed Obligations prior to the final
payment in full of the Guaranteed Obligations in the relevant Foreign
Currency in strict accordance with the Credit Agreement or other Loan
Documents; or
(viii) any other act or omission to act or delay of any kind by
the Principals, any other guarantor of the Guaranteed Obligations, the
Agent, any Bank or any other Person or any other circumstance whatsoever
which might, but for the provisions of this paragraph, constitute a legal or
equitable discharge of the Guarantor's obligations hereunder.
SECTION 5. Discharge Only Upon Payment In Full; Reinstatement In
-----------------------------------------------------
Certain Circumstances. The Guarantor's obligations hereunder shall remain in
- ---------------------
full force and effect until all Guaranteed Obligations shall have been paid in
full and the Commitments under the Credit Agreement shall have terminated or
expired. If at any time any payment of the principal of or interest on any Note
or any other amount payable by the Principals under the Credit Agreement or any
other Loan Document is rescinded or must be otherwise restored or returned upon
the insolvency, bankruptcy or reorganization of the Principals or otherwise, the
Guarantor's obligations hereunder with respect to such payment shall be
reinstated as though such payment had been due but not made at such time.
SECTION 6. Waiver of Notice by the Guarantor. The Guarantor
---------------------------------
irrevocably waives acceptance hereof, presentment, demand, protest and, to the
fullest extent permitted by law, any notice not provided for herein, as well as
any requirement that at any time any action be taken by any Person against the
Principals, any other guarantor of the Guaranteed Obligations, or any other
Person.
SECTION 7. Stay of Acceleration. If acceleration of the time for
--------------------
payment of any amount payable by the Principals under the Credit Agreement, any
Note or any other Loan Document is stayed upon the insolvency, bankruptcy or
reorganization of the Principals, all such amounts otherwise subject to
acceleration under the terms of the Credit Agreement, any Note or any other Loan
Document shall nonetheless be payable by the Guarantor hereunder forthwith on
demand by the Agent made at the request of the Required Banks.
SECTION 8. Notices. All notices, requests and other communications to
-------
any party hereunder shall be given or made by telecopier or other writing and
telecopied or mailed or delivered to the intended recipient at its address
<PAGE>
or telecopier number set forth on the signature pages hereof or such other
address or telecopy number as such party may hereafter specify for such purpose
by notice to the Agent in accordance with the provisions of Section 9.01 of the
Credit Agreement. Except as otherwise provided in this Guaranty, all such
communications shall be deemed to have been duly given when transmitted by
telecopier, or personally delivered or, in the case of a mailed notice, 72 hours
after such communication is deposited in the mails with first class postage
prepaid, in each case given or addressed as aforesaid.
SECTION 9. No Waivers. No failure or delay by either Agent or any
----------
Banks in exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies provided in this Guaranty, the Credit
Agreement, the Notes, and the other Loan Documents shall be cumulative and not
exclusive of any rights or remedies provided by law.
SECTION 10. Successors and Assigns. This Guaranty is for the benefit
----------------------
of the Agent and the Banks and their respective successors and assigns and in
the event of an assignment of any amounts payable under the Credit Agreement,
the Notes, or the other Loan Documents, the rights hereunder, to the extent
applicable to the indebtedness so assigned, may be transferred with such
indebtedness. This Guaranty may not be assigned by the Guarantor without the
prior written consent of the Agent and the Required Banks, and shall be binding
upon the Guarantor and its successors and permitted assigns.
SECTION 11. Changes in Writing. Neither this Guaranty nor any
------------------
provision hereof may be changed, waived, discharged or terminated orally, but
only in writing signed by the Guarantor and the Agent with the consent of the
Required Banks.
SECTION 12. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
---------------------------------------------------------
TRIAL. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
- -----
LAW OF THE STATE OF GEORGIA. EACH OF THE GUARANTOR AND THE AGENT HEREBY SUBMITS
TO THE NONEXCLUSIVE JURISDICTION OF THE STATE OF GEORGIA, THE COURTS THEREOF
SITTING IN FULTON COUNTY, GEORGIA AND THE UNITED STATES DISTRICT COURTS SITTING
IN FULTON COUNTY, GEORGIA, AND FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT
OF OR RELATING TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE
GUARANTOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY
SUCH PROCEEDING BROUGHT IN SUCH
<PAGE>
A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE GUARANTOR AND THE AGENT HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 13. Taxes, etc. All payments required to be made by the
-----------
Guarantor hereunder shall be made without setoff or counterclaim and free and
clear of and without deduction or withholding for or on account of, any present
or future taxes, levies, imposts, duties or other charges of whatsoever nature
imposed by any government or any political or taxing authority as required
pursuant to Sections 2.12(d) of the Credit Agreement.
SECTION 14. Failure to Pay in Foreign Currency. With respect to any of
----------------------------------
the Guaranteed Obligations which were advanced under the Credit Agreement in a
Foreign Currency, the Guarantor agrees to make any payments required by it
hereunder in connection therewith in such Foreign Currency. If the Guarantor is
unable for any reason to effect payment in a relevant Foreign Currency as
required by this Guaranty or if the Guarantor shall default in the Foreign
Currency, each Bank may, through the Agent, require such payment to be made in
Dollars in the Dollar Equivalent amount of such payment. In any case in which
the Guarantor shall make such payment in Dollars, the Guarantor agrees to hold
the Banks harmless from any loss incurred by the Banks arising from any change
in the value of Dollars in relation to such Foreign Currency between the date
such payment became due and the date of payment thereof.
SECTION 15. Judgment Currency. If for the purpose of obtaining
-----------------
judgment in any court or enforcing any such judgment it is necessary to convert
any amount due in any Foreign Currency into any other currency, the rate of
exchange used shall be the Agent's spot rate of exchange for the purchase of the
Foreign Currency with such other currency at the close of business on the
Foreign Currency Business Day preceding the date on which judgment is given or
any order for payment is made. The obligation of the Guarantor in respect of any
amount due from it hereunder shall, notwithstanding any judgment or order for a
liquidated sum or sums in respect of amounts due hereunder or under any judgment
or order in any other currency or otherwise be discharged only to the extent
that on the Foreign Currency Business Day following receipt by the Agent of any
payment in a currency other than the relevant Foreign Currency the Agent is able
(in accordance with normal banking procedures) to purchase the relevant Foreign
Currency with such other currency. If the amount of the relevant Foreign
Currency that the Agent is able to purchase with such other currency is less
than the amount due in the
<PAGE>
relevant Foreign Currency, notwithstanding any judgment or order, the Guarantor
shall indemnify the Banks for the shortfall.
SECTION 16. Subrogation. The Guarantor hereby agrees that it will not
------------
exercise any rights which it may acquire by way of subrogation under this
Guaranty, by any payment made hereunder or otherwise, unless and until all of
the Guaranteed Obligations shall have been paid in full. If any amount shall be
paid to the Guarantor on account of such subrogation rights at any time when all
of the Guaranteed Obligations shall not have been paid in full, such amount
shall be held in trust for the benefit of the Agent and the Banks and shall
forthwith be paid to the Agent to be credited and applied upon the Guaranteed
Obligations, whether matured or unmatured, in accordance with the terms of the
Credit Agreement.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed by its authorized officer as of the date first above written.
EQUIFAX INC.
By: _____________________________
Title:
-----------------------------------
-----------------------------------
Attention: _______________________
Telecopier number: ________________
Confirmation number: ______________
<PAGE>
EXHIBIT K
---------
BORROWER ACKNOWLEDGMENT AND AGREEMENT
-------------------------------------
As of the _____ day of ________________________, the undersigned (the
"Additional Borrower"), a wholly-owned subsidiary of Equifax Inc. (the
"Parent"), hereby elects, under Section 2.14 of that certain $750,000,000 Credit
Agreement dated as of November 21, 1997, by and among the Parent, certain of the
Parent's other subsidiaries, the Banks listed therein, and Wachovia Bank, N.A.
(the "Agent"; as amended or otherwise modified from time to time, the "Credit
Agreement") to become a "Borrower" as defined in clause [(ii) or (iii)] of the
definition of "Borrower" under Section 1.01 of the Credit Agreement and agrees
as such to become hereby subject to all obligations, liabilities,
representations, warranties, covenants, terms, conditions, and other provisions
applicable to a Borrower under the Credit Agreement. The Additional Borrower
delivers this Acknowledgment and Agreement along with: (i) original counterparts
hereof to the Agent to be delivered to the Banks, (ii) an original of each of
the Notes issued by the Additional Borrower as set forth in Section 3.01(b) of
the Credit Agreement, and (iii) other items required by a Borrower to be
delivered under Section 3.01 of the Credit Agreement, as the same may be
required by the Agent.
IN WITNESS WHEREOF, the Additional Borrower has caused this
Acknowledgment and Agreement to be duly executed, under seal, by its authorized
officer as of the day and year first above written.
[Additional Borrower]
By:
----------------------------------
Title:
--------------------------------------
--------------------------------------
--------------------------------------
Attention:
----------------------------
Telecopier number:
-------------------
Confirmation number:
------------------
<PAGE>
EXHIBIT L
---------
BORROWER NOTICE OF WITHDRAWAL
-----------------------------
As of the _____ day of ________________________, the undersigned (the
"Withdrawing Borrower"), a wholly-owned subsidiary of Equifax Inc. (the
"Parent"), hereby gives notice to the Agent, under Section 2.14 of that certain
$750,000,000 Credit Agreement dated as of November 21, 1997, by and among the
Parent, certain of the Parent's other subsidiaries, the Banks listed therein,
and Wachovia Bank, N.A. (the "Agent"; as amended or otherwise modified from time
to time, the "Credit Agreement") of its intention to withdraw as a "Borrower"
under Section 1.01 of the Credit Agreement and that it has made payment in full
of all Loans outstanding to the Withdrawing Borrower in immediately available
funds (including any amounts owed in connection therewith under Article VIII of
the Credit Agreement).
IN WITNESS WHEREOF, the Withdrawing Borrower has caused this Notice of
Withdrawal to be duly executed, under seal, by its authorized officer as of the
day and year first above written.
[Withdrawing Borrower]
By:
----------------------------------
Title:
--------------------------------------
--------------------------------------
--------------------------------------
Attention:
----------------------------
Telecopier number:
-------------------
Confirmation number:
------------------
<PAGE>
Schedule 4.06
-------------
Compliance with ERISA
---------------------
[TO BE COMPLETED BY THE PARENT]
<PAGE>
Schedule 4.08
-------------
Consolidated Subsidiaries
-------------------------
Name
- ----
Jurisdiction of Incorporation
- -----------------------------
[TO BE COMPLETED BY THE PARENT]
Subsidiaries Which Are Not Consolidated Subsidiaries
----------------------------------------------------
Name
- ----
Jurisdiction of Incorporation
- -----------------------------
[TO BE COMPLETED BY THE PARENT]
<PAGE>
Schedule 4.14
-------------
Environmental Matters
[TO BE COMPLETED BY THE PARENT]
<PAGE>
Schedule 4.15
-------------
Capital Stock
[TO BE COMPLETED BY THE PARENT]
<PAGE>
Schedule 5.12
-------------
Hazardous Materials
[TO BE COMPLETED BY THE PARENT]
<PAGE>
Schedule 5.18
-------------
Liens existing on the date of this Agreement are as follows:
1. Liens constituting capitalized computer equipment leases of The Equifax
Database Company Limited, as debtor, securing 245,356 British pounds sterling.
2. Liens constituting capitalized computer equipment leases of Infocheck Group
Limited, as debtor, securing 174,921 British pounds sterling.
<PAGE>
EXHIBIT 10.1
EQUIFAX INC.
1988 PERFORMANCE SHARE PLAN FOR OFFICERS, AS CAMENDED
THROUGH MARCH 1998
ARTICLE I
PURPOSE
The purpose of the plan is to provide incentive to key Officers of the
corporation (Equifax Inc. and/or its subsidiaries) who contribute in a
substantial degree to the long-term success of the Company, to provide a means
for such Officers to participate in such success and to assist in attracting and
retaining the highest quality people in key executive positions.
ARTICLE II
DEFINITIONS
The following words and phrases shall have the respective meanings set forth
below (unless the context indicates otherwise).
(1) "Approval of Shareholders" shall mean the affirmative vote of the holders
of at least a majority of the shares of common stock of the Company then
outstanding.
(2) "Committee" shall mean the Management Compensation Committee of the Equifax
Inc. Board of Directors, as the same from time to time may be constituted.
(3) "Common Stock" means the Common Stock, $2.50 par value per share, of the
Company.
(4) "Company" shall mean Equifax Inc.
(5) "Earnings Per Share" shall mean, with respect to any fiscal year of the
Company, the Company's primary earnings per share after taxes from
continuing operations for such fiscal year, as determined in accordance
with generally accepted accounting principles consistently applied, as
shown in the (consolidated) financial statements of the Company for such
fiscal year certified by its independent certified public accountants, but
excluding capital gains or losses, extra-ordinary items (including any
acquisition or divestiture which is reported on Form 8-K) and the amount
accrued for the expense of this plan, all on an after-tax basis, based on
applicable tax law on the date the Share Unit is awarded, so that any
change or changes in any tax or accounting law or regulation during the
course of the Measurement Period will be disregarded in determining the
amount of awards to be distributed following the close of the Measurement
Period.
<PAGE>
(6) "Economic Value Added" or "EVA" shall mean, with respect to any fiscal year
of the Company, the Company's net operating profit after income taxes
("NOPAT") less a capital charge for using the capital that is needed to
generate the Company's NOPAT. NOPAT is defined to be the Company's
operating income plus goodwill amortization and imputed interest on
operating leases, all on an after tax basis. Operating income shall be
determined in accordance with generally accepted accounting principles
consistently applied, as shown in the (consolidated) financial statements
of the Company for such fiscal year certified by its independent certified
public accountants, but excluding capital gains or losses, extra-ordinary
items (including any acquisition or divestiture which is reported on Form
8-K) and the amount accrued for the expense of this plan, all on an after-
tax basis, based on applicable tax law on the date the Share Unit is
awarded, so that any change or changes in any tax or accounting law or
regulation during the course of the Measurement Period will be disregarded
in determining the amount of awards to be distributed following the close
of the Measurement Period. Capital charge is determined by multiplying (a)
capital by (b) the cost of capital. The cost of capital is the weighted
average cost of the Company's debt and shareholder's equity, as determined
on a consistent basis. Capital is defined as the Company's total assets,
less (a) current liabilities, (b) cash and cash equivalents, (c) deferred
income tax assets and (d) intangible assets recorded under Statement of
Financial Accounting Standards No. 87, "Employers' Accounting for
Pensions," plus (a) accumulated goodwill amortization, (b) present value of
operating leases, (c) short-term debt and current maturities of long-term
debt and (d) implied goodwill relating to acquisitions accounted for on a
"pooling of interest" basis.
(7) "Eligible Officer" shall mean Equifax Inc. elected Officers and any other
key Officer of Equifax Inc. or a subsidiary or division of Equifax Inc. as
determined by the Committee, from time to time, including any such Officer
who is a Director. An Eligible Officer shall not include an Officer who is
not a full-time employee, even though said Officer is a Director, except
that a person who was an Eligible Officer and a Director immediately prior
to his retirement as an employee of the Company shall continue to be an
Eligible Officer so long as he retains his position as an Officer and
Director.
(8) "Measurement Period" shall mean the three fiscal years of the Company
commencing with the fiscal year 1988, provided awards of share units are
made prior to July 31, 1988; otherwise, it shall mean the three fiscal
years of the Company commencing with the fiscal year following that in
which the award of a particular share unit is made; except that the
Measurement Period for a Share Unit awarded in the first quarter of the
fiscal year shall be the three fiscal years of the Company commencing with
the fiscal year in which the award is made.
(9) "Return on Equity" shall mean, with respect to any Measurement Period, the
percentage determined by dividing the sum of the Company's net earnings
after taxes from continuing operations, as shown in the financial
statements of the Company for such fiscal years certified by its
independent certified public accountants, but excluding capital gains or
losses, extraordinary items (including any acquisition or divestiture which
is reported on Form 8-K) and the amount accrued for the expense of this
plan, all on an after-tax basis, for the three fiscal years included in the
Measurement Period by the sum of the shareholders' equity of the Company as
of the beginning of each such year, based on applicable tax law on the date
the Share Unit is awarded, so that any change or changes in any tax or
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<PAGE>
accounting law or regulation during the course of the Measurement Period
will be disregarded in determining the amount of awards to be distributed
following the close of the Measurement Period.
(10) "Share Unit" shall mean the right to receive, subject to the provisions of
Articles V and VI of this plan, one share of Common Stock plus an amount of
cash equivalent to all cash dividends that would have been paid to the
holder of such Share Unit, if one share of Common Stock had been issued to
the holder on the date the Share Unit was issued. Provided, however, that
in no event will such cash equivalent to dividends be paid on any Share
Units forfeited.
ARTICLE III
ELIGIBILITY
All Equifax Inc. elected Officers, and any other key Officers of Equifax Inc. or
its subsidiaries or divisions, as determined by the Committee, from time to
time, shall be eligible for participation in this plan.
ARTICLE IV
ADMINISTRATION OF PLAN AND
SELECTION OF PARTICIPANTS
This plan shall be administered by the Committee, and the Committee shall (1)
construe and interpret the plan, (2) make such reasonable rules and regulations
for the administration of the plan as it deems advisable, and (3) determine,
from time to time, those Officers who are to be awarded Share Units and the
number of Share Units to be awarded to each such Officer. No participant may be
awarded more than 100,000 share units during any fiscal year. In construing and
interpreting the plan, including the appropriateness of the forfeiture
provisions, the Committee is authorized to modify, from time to time, such
forfeiture provisions so as to eliminate forfeitures of Share Units where, in
the Committee's judgment, circumstances encountered over the Measurement Period
warrant such modification. Any determination by the Committee in administering,
interpreting or construing the plan in accordance with this Article shall be
final, binding and conclusive for all purposes and upon all interested persons.
-3-
<PAGE>
ARTICLE V
NUMBER OF SHARES SUBJECT TO PLAN
ADJUSTMENTS, EFFECTIVE DATE AND TERMINATION
Subject to the provisions hereafter in this Article set forth, the number of
shares of Common Stock issued under this plan shall not exceed 600,000. In the
event that the Common Stock should, as a result of a stock-split, stock
dividend, reclassification, reorganization, recapitalization, combination of
shares or any other similar change, be changed into or exchanged for a different
number or kind of shares of stock or other securities of the Company or of any
affiliated corporation or entity, the number of shares of Common Stock then
subject to Share Units previously granted and then outstanding, and the
remaining shares of Common Stock which may be issued under this plan, shall be
appropriately adjusted by the Committee to reflect such change or exchange;
provided, however, that any fractional shares resulting from any such
adjustments shall be disregarded and the number of shares rounded to the next
lower whole number. If any Shares of Common Stock represented by Share Units
awarded under this plan are forfeited, canceled, or otherwise fail to be issued,
whether for failure to satisfy the conditions set forth in Article VI hereof or
otherwise, such Common Stock shall return to the status of authorized but
unissued under the plan. Subject to the approval of the shareholders of the
Company, this plan shall become effective for the year commencing January 1,
1988. No Share Units may be awarded under this plan after January 31, 2000.
ARTICLE VI
RIGHT TO RECEIVE COMMON STOCK
AND DIVIDEND EQUIVALENTS
Subject to the provisions of Article V and this Article VI, the holder of each
Share Unit shall be entitled to receive the Common Stock and cash to which such
unit entitles him as soon as practical after the end of the Measurement Period
with respect to that unit; provided, however, that:
(a) Each Share Unit awarded under the plan shall be forfeited and canceled in
all respects, and no Common Stock or cash shall be delivered or paid to the
holder thereof, in the event that:
(i) The employment of such holder by the Company is terminated, either
voluntarily or involuntarily, by the Company or the holder, for any
reason whatsoever (subject to the provisions of Article VII hereof)
prior to the end of the Measurement Period for that Share Unit, or
(ii) The employment status of the holder has changed prior to the end of
the Measurement Period for that Share Unit so that the holder is no
longer an Eligible Officer.
(iii) The Return on Equity for the initial Measurement Period for such
Share Unit is less than twenty percent (20%).
(b) A portion, or all, of each award of Share Units shall be forfeited and
canceled in all respects, and no Common Stock or cash shall be delivered or
-4-
<PAGE>
paid with respect to the portion of such award so forfeited and canceled,
in the event that the aggregate Earnings Per Share for the initial
Measurement Period with respect to the Share Units which were the subject
of such award is not at least equal to an index of 399 (or 15% compounded
rate of increase) of the Earnings Per Share for the fiscal year (the "Base
Year") immediately preceding such Measuring Period. The portion of each
such award to be forfeited shall be determined in accordance with the
following table:
If Aggregate Earnings Per
Share for Measurement Period
as an index of Earnings Per Percentage of Share
Share for Base Year is Units Forfeited
---------------------------- -------------------
At Least But Less Than
399 -- None
381 399 10%
364 381 25%
350 364 50%
--- 350 100%
(c) The Committee shall establish, for each Measurement Period commencing after
1995, the Company goals based on one or more of the following measures:
(a) aggregate Earnings Per Share, (b) aggregate Return on Equity, (c)
Economic Value Added and/or (d) the Company's common stock price. The
Committee may also establish such additional goals as the Committee, in its
discretion, deems appropriate. These goals will be established on or
before the date any Share Units relating to said Measurement Period are
awarded. The goals will be established with consideration given to the
economic conditions existing at the time said goals are established. A
portion, or all, of each award of Share Units shall be forfeited and
canceled in all respects, and no Common Stock or cash shall be delivered or
paid with respect to the portion of such award so forfeited and canceled,
in the event that the goals established for the Measurement Period are not
achieved, all as prescribed by the Committee. The Committee shall cause
each holder of Share Units to receive written notice of the goals
established for the Measurement Period to which said Share Units relate,
along with the forfeiture provisions relating to said Share Units. Even
though performance goals established for each Measurement Period are met or
exceeded, the Committee shall have the discretion, by participant, to
reduce the amount of an award that would otherwise be paid or to determine
that no portion should be paid. The Committee may not increase the amount
of an award that would otherwise be paid.
Nothing contained in this Article VI or elsewhere in this plan shall eliminate,
impair or otherwise affect the right of the Company to terminate or change the
employment of any Officer at any time, and the award of Share Units to any such
Officer shall not be deemed to, and shall not, result in any agreement,
expressed or implied, by the Company to retain such employee in any specific
position or in its employ for the duration of the Measurement Period with
respect to such Share Units or for any other period. Subject to the provisions
of this paragraph, each holder of Share Units may elect, by delivering written
notice of such election to the Secretary of the Company during the period
-5-
<PAGE>
defined below, to surrender his or her right to receive up to one-half of the
Common Stock that would otherwise be issued with respect to such Share Units at
the end of the Measurement Period, in exchange for the right to receive an
amount of cash equal to the "Fair Market Value," as defined below, of the shares
of Common Stock the right to which is so surrendered. In order to be effective,
such written notice of election must be delivered to the Secretary of the
Company during a period beginning on the third business day following release
for publication (in the manner hereinafter set forth) of the Company's quarterly
statements of sales and earnings for the third fiscal quarter of the third
fiscal year of the Measurement Period and ending on the twelfth business day
following said release for publication. Any such election shall be subject to
the right of the Committee to disapprove the same, in whole or in part, at any
time after such election but prior to the issuance of shares of Common Stock
with respect to the particular Share Unit in accordance with the provisions of
this plan. In the event of the death, disability or retirement of the Officer
holding the Share Units, at any time during the Measurement Period to which said
Share Units relate, the award shall be distributed as provided in Article VII
hereof regardless of any election made by such Officer. The release for
publication of the Company's quarterly statements as referred to in the first
sentence of this paragraph shall be deemed to have been made at the time such
data appears (i) on a wire service, (ii) in a financial news service, (iii) in a
newspaper of general circulation or (iv) is otherwise made publicly available.
For purposes of this paragraph, the "Fair Market Value" of the Common Stock
shall be deemed to be the closing sale price thereof on the New York Stock
Exchange on the day the Committee approves the payout of each award of Share
Units, if any. In the event such date is not a business day or the shares of
Common Stock did not trade on such business day, the "Fair Market Value" shall
be deemed to be the closing sale price on the last previous day on which trading
occurred in the Common Stock on such Exchange.
ARTICLE VII
DEATH, DISABILITY OR RETIREMENT OF ELIGIBLE OFFICER
OR CHANGE IN CONTROL OF THE COMPANY
(a) In the event of the termination of employment with the Company during any
Measurement Period of any Officer who then holds Share Units under this
plan by reason of the death or disability or retirement of such Officer,
the Committee may, but shall not be obligated to waive the continuation of
the employment requirement set forth in paragraph (a)(i) of Article VI
above. In the event that such requirement is waived, such Officer or his
estate, as the case may be, will be entitled to receive an award in cash
equivalent to a pro rata portion of the amount which said Officer would
have received, if the employment of such Officer had continued through the
Measurement Period for such Share Units. For purposes of Article VI and
this Article VII, an Eligible Officer shall not be deemed to have
terminated his employment although he retires from said employment, if he
continues to serve as an elected Officer of Equifax Inc. or a subsidiary of
the Company and to serve as a Director of Equifax Inc.; said Officer shall
be deemed to have terminated his employment when his term of office expires
and he is not re-elected thereto, or when he is removed or resigns from
office, if earlier.
(b) This pro rata portion shall be computed as follows:
(i) The shares of Common Stock shall be replaced with a cash amount
equivalent to the "Fair Market Value" of said shares, as described in
Article VI hereof;
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<PAGE>
(ii) The sum resulting from the immediately preceding calculation will be
added to the other cash portion of the award representing dividend
equivalents, as described in Article II (9) hereof;
(iii) The resulting sum will be multiplied by a fraction, the numerator
of which shall be the number of full calendar months during the
Measurement Period prior to the Officer's death, disability or
retirement and the denominator of which shall be thirty-six (36).
(c) In the event of the termination of employment with the Company, for any
reason, of any Officer after completing a Measurement Period, but before
distribution of his award is made, such Officer or his estate, as the case
may be, will be entitled to receive the shares of Common Stock and cash
represented by the Share Units held by such Officer at the end of the
Measurement Period to the same extent, in the same manner and at the same
time as if the employment of such Officer had not terminated.
(d) If there is a "change in control of the Company," as hereinafter defined,
during any Measurement Period, then, notwithstanding any other provision of
this plan to the contrary, any Officer holding any Share Unit shall be
irrevocably entitled to receive, in lieu of the cash and stock represented
by the Share Unit, an amount in cash which is equal to the Fair Market
Value of the stock, plus the cash which said Officer would have received in
the absence of such "change of control of the Company," and said Officer
shall be so entitled regardless of whether there is a change in employment
status subsequent to such "change in control of the Company." Such payment
will be made within sixty (60) days following the end of the applicable
Measurement Period. In determining the amount of such cash payment, the
aggregate Earnings Per Share for the Measurement Period will be the greater
of actual Earnings Per Share for the Measurement Period or the result of
projecting Earnings Per Share for the entire Measurement Period at the same
annually compounded rate of increase of Earnings Per Share actually
experienced by the Company over that portion of the Measurement Period
prior to such "change of control of the Company." If twelve months of the
Measurement Period have not occurred prior to the "change of control of the
Company," then aggregate Earnings Per Share for the Measurement Period will
be projected to be an amount such that the percentages of forfeitures and
cancellations, as provided in Article VI, do not exceed the percentages of
forfeitures and cancellations applicable to awards for the most recently
completed Measurement Period. In determining the amount of cash payment
under this paragraph VII (d), "Economic Value Added" for the Measurement
Period will be the lesser of (a) the product of target EVA established for
such share unit award multiplied by two, or (b) maximum EVA established for
such share unit award. In determining the "Fair Market Value" of the
Common Stock for purposes of such payment, the Fair Market Value of the
Common Stock shall be the highest price at which the Common Stock of the
Company traded on the New York Stock Exchange during the three (3) months
immediately prior to the "change in control of the Company."
(e) For purposes of this Article VII, a "change in control of the Company"
shall be deemed to have occurred upon the occurrence of any of the
following events:
(1) Voting Stock Accumulations. The accumulation by any Person of
---------------------------
Beneficial Ownership of twenty percent (20%) or more of the combined voting
-7-
<PAGE>
power of the Company's Voting Stock; provided that for purposes of this
SUBPARAGRAPH (E)(1), a Change in Control will not be deemed to have
occurred if the accumulation of twenty percent (20%) or more of the voting
power of the Company's Voting Stock results from any acquisition of Voting
Stock (a) directly from the Company that is approved by the Incumbent
Board, (b) by the Company, (c) by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any Subsidiary, or (d) by
any Person pursuant to a Business Combination that complies with CLAUSES
(A), (B) AND (C) of SUBPARAGRAPH (E)(2); or
(2) Business Combinations. Consummation of a Business Combination, unless,
----------------------
immediately following that Business Combination, (a) all or substantially
all of the Persons who were the beneficial owners of Voting Stock of the
Company immediately prior to that Business Combination beneficially own,
directly or indirectly, more than sixty-six and two-thirds percent (66
2/3%) of the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of Directors of the entity resulting from that
Business Combination (including, without limitation, an entity that as a
result of that transaction owns the Company or all or substantially all of
the Company's assets either directly or through one or more subsidiaries)
in substantially the same proportions relative to each other as their
ownership, immediately prior to that Business Combination, of the Voting
Stock of the Company, (b) no Person (other than the Company, that entity
resulting from that Business Combination, or any employee benefit plan (or
related trust) sponsored or maintained by the Company, any Eighty Percent
(80%) Subsidiary or that entity resulting from that Business Combination)
beneficially owns, directly or indirectly, twenty percent (20%) or more of
the then outstanding shares of common stock of the entity resulting from
that Business Combination or the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors of that entity, and (c) at least a majority of the members of the
Board of Directors of the entity resulting from that Business Combination
were members of the Incumbent Board at the time of the execution of the
initial agreement or of the action of the Board providing for that Business
Combination; or
(3) Sale of Assets. A sale or other disposition of all or substantially
---------------
all of the assets of the Company; or
(4) Liquidations or Dissolutions. Approval by the shareholders of the
-----------------------------
Company of a complete liquidation or dissolution of the Company, except
pursuant to a Business Combination that complies with CLAUSES (A), (B) AND
(C) of SUBPARAGRAPH (E)(2) OF THIS ARTICLE VII.
For purposes of this ARTICLE VII, the following definitions will apply:
"Beneficial Ownership" means beneficial ownership as that term is used in
Rule 13d-3 promulgated under the Exchange Act.
"Business Combination" means a reorganization, merger or consolidation of
the Company.
-8-
<PAGE>
"Eighty Percent (80%) Subsidiary" means an entity in which the Company
directly or indirectly beneficially owns eighty percent (80%) or more of
the outstanding Voting Stock.
"Exchange Act" means the Securities Exchange Act of 1934, including
amendments, or successor statutes of similar intent.
"Incumbent Board" means a Board of Directors at least a majority of whom
consist of individuals who either are (a) members of the Company's Board of
Directors as of the date of this Letter or (b) members who become members
of the Company's Board of Directors subsequent to the date of this Letter
whose election, or nomination for election by the Company's shareholders,
was approved by a vote of at least two-thirds (2/3) of the directors then
comprising the Incumbent Board (either by a specific vote or by approval of
the proxy statement of the Company in which that person is named as a
nominee for director, without objection to that nomination), but excluding,
for that purpose, any individual whose initial assumption of office occurs
as a result of an actual or threatened election contest (within the meaning
of Rule 14a-11 of the Exchange Act) with respect to the election or removal
of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board of Directors.
"Person" means any individual, entity or group (within the meaning of
Section 13(d)(3) or 14 (d)(2) of the Exchange Act).
"Voting Stock" means the then outstanding securities of an entity
entitled to vote generally in the election of members of that entity's
Board of Directors.
ARTICLE VIII
NO RIGHTS AS SHAREHOLDER;
NONALIENATION OF BENEFITS
Until such time as Common Stock represented by a Share Unit is delivered to the
holder of such unit, such holder shall have no right, title or interest in any
specific share or shares of Common Stock, no right to vote such Common Stock or
to receive dividends thereon or any other right or privilege of a shareholder of
the Company.
Neither Share Units, the certificates referred to in Article IX below nor any
other right or benefit under this plan shall be subject to anticipation,
alienation, sale, assignment, pledge, encumbrance or charge, and any attempt to
anticipate, alienate, sell, assign, pledge, encumber or charge the same shall be
void and shall not be recognized or given effect by the Company.
-9-
<PAGE>
ARTICLE IX
CERTIFICATES OF AWARD
The Company shall execute and deliver to each Officer awarded Share Units a
certificate, in the form prescribed by the Committee, evidencing such award and
stating the date thereof and number of Share Units that are the subject of the
award.
ARTICLE X
REGISTRATION AND LISTING
OF COMMON STOCK
The Company may, at its discretion, cause the shares of Common Stock issued
under this plan to be registered under the Securities Act of 1933, on Form S-8
or a substantially similar form, and to be registered under any applicable state
securities laws, prior to the delivery of such shares. In the event that the
issuance of any such shares is not so registered, the Company may require, as a
condition to the issuance thereof, that the Officer to whom such shares are to
be issued represent and warrant in writing to the Company that the shares are
being acquired by him for investment for his own account and not with a view to,
for resale in connection with, or with an intent of participating directly or
indirectly in, any distribution of such shares within the meaning of that Act,
and a legend to that effect may be placed on the certificate(s) representing
such shares.
The Company shall cause the shares of Common Stock to be issued under this plan
to be listed on each securities exchange on which the Common Stock is listed
prior to the delivery of such shares.
ARTICLE XI
AMENDMENT, SUSPENSION OR
TERMINATION OF PLAN
The Board of Directors of the Company may amend, suspend or terminate this plan
in whole or in part at any time; provided that no such amendment, suspension or
termination shall adversely affect the rights of the holders of any Share Units
then outstanding; and provided further that, without the approval of the
shareholders of the Company, no modification of this plan by the Board of
Directors shall increase the number of shares of Common Stock which may be
issued hereunder.
-10-
<PAGE>
EXHIBIT 10.2
EQUIFAX INC.
EXECUTIVE INCENTIVE PLAN (EIP)
EXECUTIVE MANAGEMENT GROUP
I. PURPOSE
The Equifax Inc. Incentive Compensation Plan rewards eligible officers for their
contribution toward the success of the Corporation. The purpose of the Plan is
to encourage and reward the attainment of performance goals established annually
for the executive management of the Corporation.
II. DEFINITIONS
The Following words and phrases used in the Plan shall have these meanings:
"Board of Directors" means the Board of Directors of Equifax Inc.
------------------
"Cash Payment Maximum" means the incentive amount equal to two times the
--------------------
incentive target opportunity and above which any award earned will be paid
only in the forms of restricted stock.
"Change in Control" ("CIC") for purposes of this document, a "Change in
-----------------
Control" means the occurrence of any of the following events during the
period in which this Letter remains in effect:
Voting Stock Accumulations. The accumulation by any of the Beneficial
---------------------------
Ownership of 20% or more of the combined voting power of the Company's
Voting Stock; provided that for purposes of this paragraph, a Change
in Control will not be deemed to have occurred if the accumulation of
20% or more of the voting power of the Company's Voting Stock results
from any acquisition of Voting Stock (a) directly from the Company
that is approved by the Incumbent Board, (b) by the Company, (c) by
any employee benefit plan (or related trust) sponsored or maintained
by the Company or any Subsidiary, or (d) by any Person pursuant to a
Business Combination that complies with clauses (a), (b) and (c) of
the following paragraph;
Business Combinations. Consummation of a Business Combination, unless
----------------------
immediately following that Business Combination, (a) all or
substantially all of the Persons who were the beneficial owners of
Voting Stock of the Company immediately prior to that Business
Combination beneficially own, directly or indirectly, more than sixty-
six and two-thirds percent (66 2/3 %) of the then outstanding shares
of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of
Directors of the entity resulting from that Business
<PAGE>
Combination (including, without limitation, an entity that as a
result of that transaction owns the Company or all or substantially
all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions relative to each
other as their ownership, immediately prior to that Business
Combination, of the Voting Stock of the Company, (b) no Person
(other than the Company, that entity resulting from that Business
Combination, or any employee benefit plan (or related trust)
sponsored or maintained by the Company, any Subsidiary or that
entity resulting from that Business Combination) beneficially owns
directly or indirectly, 20% or more of the then outstanding shares
of common stock of the entity resulting from that Business
Combination or the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of
directors of that entity, and (c) at least a majority of the members
of the Board of Directors of the entity resulting from that Business
Combination were members of the Incumbent Board at the time of the
execution of the initial agreement or of the action of the Board
providing for that Business Combination; or
Liquidation or Dissolutions. Approval by the shareholders of the Company of a
----------------------------
complete liquidation or dissolution of the Company, except pursuant to
a Business Combination that complies with clauses (a), (b) and (c)
of the preceding paragraph;
For purposes of this paragraph, the following definitions will apply:
"Beneficial Ownership" means a beneficial ownership as that term is
used in Rule 13d-3 promulgated under the Exchange Act.
"Business Combination" means a reorganization, merger or
consolidation, or a sale or other disposition of all or
substantially all of the assets of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, including
amendments, or successor statutes of similar intent.
"Incumbent Board" means a Board of Directors at least a majority of
whom consist of individuals who either are (a) members of the
Company's Board of Directors as of the date of this Letter or (b)
members who become members of the Company's Board of Directors
subsequent to the date of this Letter whose election, or nomination
for election by the Company's shareholders, was approved by a vote
of at least two-thirds (2/3) of the directors then comprising the
Incumbent Board (either by a specific vote or by approval of the
proxy statement of the Company in which that person is named as a
nominee for director, without objection to that nomination), but
excluding, for that purpose, any individual whose initial assumption
of office occurs as a result of an actual or threatened election
contest (within the meaning of Rule 14a-11 of the Exchange Act) with
respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board of Directors.
"Person" means any individual, entity or group (within the meaning of
Section 13 (d)(3) or
<PAGE>
14 (d)(2) of the Exchange Act).
"Subsidiary" means an entity in which the Company directly or
indirectly beneficially owns 50% or more of the outstanding Voting
Stock.
"Voting Stock" means the then outstanding securities of an entity
entitled to vote generally in the election of members of that
entity's Board of Directors.
"Corporation" means the amalgam of all divisions and companies, domestic and
-----------
foreign, including equity accounting entities consolidated with Equifax
Inc. for reporting purposes.
"Earnings Per Share" " ("EPS") 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, the Management
Compensation Committee may approve adjustments to EPS for the Executive
Incentive Plan.
"Equifax Inc." means the corporate entity.
------------
"EVA" "Economic Value Added" means the net income after taxes less the charge
---
for employed capital.
"Executive Officer" means any officer of Equifax Inc., holding the title of
-----------------
Chief Executive Officer, President, Executive Vice President or Senior
Vice President (or an equivalent position as determined by the Committee).
"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.
"Management Compensation Committee" (the "Committee") means the Management
---------------------------------
Compensation committee of the Board of Directors of Equifax Inc.
"Operating Profit" is defined to be revenue less operating expense (including
----------------
amortization of goodwill and other intangibles related to acquisitions) in
the Company's monthly Consolidated Financial Report, excluding unbudgeted
acquisitions.
"Plan" means the Equifax Inc. Incentive Compensation Plan for Executive
----
Management.
"Plan Maximum" means the maximum incentive opportunity under the Plan and
------------
includes any payments in cash or stock which may be earned.
"Revenue" is defined to be the amount of the Company's monthly Consolidated
-------
Financial Report, excluding unbudgeted acquisitions.
<PAGE>
"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.
III. ADMINISTRATION
The Plan shall be administered by the Compensation and Benefits 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 Executive Incentive Compensation Plan
include all Executive Officers of Equifax Inc. as defined for Plan purposes.
Eligibility is also extended to employees in this management 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.
Participants 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 50 and 25 years of credited service or
age 55 and 5 years of credited service during the incentive period; who die or
are forced to leave because of disability or job elimination during the
incentive period; are also eligible for participation. If a participant is
terminated 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 the period for any reason
other than an immediately dismissable offense, the full award 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.
<PAGE>
V. DETERMINATION OF AWARDS
For each fiscal year, the Committee will establish minimum financial goals
(i.e., EPS, EVA, etc.) for the Corporation for Plan purposes. If the
Corporation fails to meet these minimum goals 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 financial goals for the year, incentive
awards will be determined on the basis of actual performance during the
Incentive Year as compared with the established goals, as described below, and
as indicated on the attachment to this Plan.
The Committee shall establish the target level of Corporate Performance, as
well as the Corporate Performance level necessary for Maximum incentive
awards, for each participant.
The target level of the business unit goals applicable to participants shall
be based on the annual business plan and other relevant data.
Individual performance goals will be established by the Committee for the
CEO. The CEO will establish individual performance goals for other
participants.
The Committee will approve the relative weighting of the above-mentioned
goals for the CEO. The CEO will approve the relative weighting of these
goals for each other participant.
A target incentive award and a maximum incentive award shall be established
by the Committee 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. Any interpolation
between designated award levels between designated award levels for the Plan
year shall be determined by the Committee in its sole discretion. In the event
a participant is rated "below full attainment" on his individual performance
goals, no incentive payment is awarded except at the discretion of the
Committee.
Eligible employees transferred into or out of organizational entities covered by
this Plan will be paid incentive for the months 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 disability are excluded from the incentive calculation. Salary received
while on Salary Continuance is considered eligible for incentive pay
calculations.
In the event a CIC occurs while an eligible employee is in the employ of the
Company, Participant will receive a prorated portion of his or her incentive
award. This prorated payment will be the greater of, a). the target percentage;
or b) the projected results compared to plan targets at the time of the CIC.
VI. PAYMENT OF AWARDS
<PAGE>
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 participants shall forfeit any
incentive award to which he otherwise may have been entitled.
No employee, nor any employee's personal representative, shall presume any claim
or right to be granted an award under this Plan.
Participants in this Plan should in no way be construed as giving to an employee
the right to be retained in the Corporation's employ.
All incentive awards under this Plan shall be paid from the general assets of
the Company, no participant shall have the right to require the Corporation to
segregate or secure any assets or property to provide for incentive awards
hereunder.
VIII. TERM OF THE PLAN
The Plan shall continue from year to year at the discretion of the Board of
Directors. In keeping with its purposes, the Committee will review the Plan
annually and will report to the Board any recommendations for changes and
improvements to assure the fulfillment of the objectives of the Plan.
IX. EFFECTIVE DATE
This plan, as amended and restated, shall become effective for the 1997 plan
year.
X. AMENDMENTS
The Committee, or the Board of Directors, may amend, suspend or terminate this
Plan at any time.
<PAGE>
EXHIBIT 10.4
[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 exists and that possibility, and the
uncertainty and questions that it may raise among management, may result in the
departure or distraction of management personnel to the detriment of the Company
and its shareholders. Accordingly, the Board of Directors of the Company 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 its employ, the Company agrees to provide
you the payments and benefits described in this Letter (in lieu of any severance
payments and benefits you would otherwise receive in accordance with the
Company's severance pay practices) if your employment with the Company is
terminated subsequent to a "Change in Control" of the Company (as defined in
PARAGRAPH 3) under the circumstances described in PARAGRAPH 4.
1. No Right to Continued Employment. This Letter does not give you any right
--------------------------------
to continued employment by the Company or a Subsidiary, and it will not
interfere in any way with the right the Company or a Subsidiary otherwise may
have to terminate your employment at any time.
2. Term of this Letter. The terms of this Letter will be effective as of
-------------------
January 1, 1998, and, except as otherwise provided in this Letter, will continue
in effect until December 31, 2002; provided that commencing on January 1, 1999
and each subsequent January 1, the terms of this Letter will be extended
automatically for one (1) additional year unless at least sixty (60) days prior
to January 1 of a given year, the Company notifies you that it does not wish to
continue this Letter in effect beyond its then current expiration date; and
provided further that if a Change in Control occurs prior to the expiration of
<PAGE>
- ---------------------------------
- ---------------------------------
Page 2
this Letter, this Letter will continue in effect for three (3) years from the
Change in Control.
3. Change In Control. No benefits will be payable under this Letter unless
------------------
there is a Change in Control and your employment by the Company is terminated
subsequently under the circumstances described in PARAGRAPH 4 entitling you to
benefits. For purposes of this Letter, a "Change in Control" of the Company
means the occurrence of any of the following events during the period in which
this Letter remains in effect:
3.1 Voting Stock Accumulations. The accumulation by any Person of
---------------------------
Beneficial Ownership of twenty percent (20%) or more of the combined voting
power of the Company's Voting Stock; provided that for purposes of this
SUBPARAGRAPH 3.1, a Change in Control will not be deemed to have occurred
if the accumulation of twenty percent (20%) or more of the voting power of
the Company's Voting Stock results from any acquisition of Voting Stock (a)
directly from the Company that is approved by the Incumbent Board, (b) by
the Company, (c) by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any Subsidiary, or (d) by any Person
pursuant to a Business Combination that complies with CLAUSES (A), (B) AND
(C) of SUBPARAGRAPH 3.2; or
3.2 Business Combinations. Consummation of a Business Combination,
----------------------
unless, immediately following that Business Combination, (a) all or
substantially all of the Persons who were the beneficial owners of Voting
Stock of the Company immediately prior to that Business Combination
beneficially own, directly or indirectly, more than sixty-six and two-
thirds percent (66b%) of the then outstanding shares of common stock and
the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of Directors of the entity
resulting from that Business Combination (including, without limitation, an
entity that as a result of that transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or
more subsidiaries) in substantially the same proportions relative to each
other as their ownership, immediately prior to that Business Combination,
of the Voting Stock of the Company, (b) no Person (other than the Company,
that entity resulting from that Business Combination, or any employee
benefit plan (or related trust) sponsored or maintained by the Company, any
Eighty Percent (80%) Subsidiary or that entity resulting from that Business
Combination) beneficially owns, directly or indirectly, twenty percent
(20%) or more of the then outstanding shares of common stock of the entity
resulting from that Business Combination or the combined voting power of
the then outstanding voting securities entitled to vote generally in the
election of directors of that entity, and (c) at least a majority of the
members of the Board of Directors of the entity resulting from that
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement or of the action of the Board providing
for that Business Combination; or
<PAGE>
- ---------------------------------
- ---------------------------------
Page 3
3.3 Sale of Assets. A sale or other disposition of all or substantially
---------------
all of the assets of the Company; or
3.4 Liquidations or Dissolutions. Approval by the shareholders of the
-----------------------------
Company of a complete liquidation or dissolution of the Company, except
pursuant to a Business Combination that complies with CLAUSES (A), (B) AND
(C) of SUBPARAGRAPH 3.2.
For purposes of this PARAGRAPH 3, the following definitions will apply:
"Beneficial Ownership" means beneficial ownership as that term is used in
Rule 13d-3 promulgated under the Exchange Act.
"Business Combination" means a reorganization, merger or consolidation of
the Company.
"Eighty Percent (80%) Subsidiary" means an entity in which the Company
directly or indirectly beneficially owns eighty percent (80%) or more of
the outstanding Voting Stock.
"Exchange Act" means the Securities Exchange Act of 1934, including
amendments, or successor statutes of similar intent.
"Incumbent Board" means a Board of Directors at least a majority of whom
consist of individuals who either are (a) members of the Company's Board of
Directors as of the date of this Letter or (b) members who become members
of the Company's Board of Directors subsequent to the date of this Letter
whose election, or nomination for election by the Company's shareholders,
was approved by a vote of at least two-thirds (2/3) of the directors then
comprising the Incumbent Board (either by a specific vote or by approval of
the proxy statement of the Company in which that person is named as a
nominee for director, without objection to that nomination), but excluding,
for that purpose, any individual whose initial assumption of office occurs
as a result of an actual or threatened election contest (within the meaning
of Rule 14a-11 of the Exchange Act) with respect to the election or removal
of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board of Directors.
"Person" means any individual, entity or group (within the meaning of
Section 13(d)(3) or 14 (d)(2) of the Exchange Act).
"Voting Stock" means the then outstanding securities of an entity
entitled to vote generally in the election of members of that entity's
Board of Directors.
<PAGE>
- ---------------------------------
- ---------------------------------
Page 4
4. Termination Following Change in Control. If any of the events described in
----------------------------------------
PARAGRAPH 3 constituting a Change in Control occurs, you will be entitled to the
payments and benefits provided for in PARAGRAPH 5 if a subsequent termination of
your employment occurs within three (3) years from the date of that Change in
Control, unless that termination is (a) because of your death, (b) by the
Company for Cause or Disability or (c) by you other than for Good Reason. Those
payments and benefits will be in lieu of any severance payments you would
otherwise receive in accordance with the Company's severance pay practices, and
will have no effect on any of the Company's other employee benefit plans or
practices, as amended from time to time.
4.1 Cause. Termination by the Company of your employment for "Cause"
------
means termination by the Company of your employment upon (a) your willful
and continued failure to substantially perform your duties with the Company
(other than any failure resulting from your incapacity due to physical or
mental illness), after a written demand for substantial performance is
delivered to you by the Chief Executive Officer of the Company (or if you
are the Chief Executive Officer, the Chairman of the Compensation Committee
of the Board of Directors) that specifically identifies the manner in which
the Chief Executive Officer believes that you have not substantially
performed your duties, or (b) your willfully engaging in misconduct that is
materially injurious to the Company, monetarily or otherwise. For purposes
of this SUBPARAGRAPH 4.1, no act, or failure to act, on your part will 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 was in the
best interest of the Company. Notwithstanding the above, you will not be
deemed to have been terminated for Cause unless and until you have been
given a copy of a Notice of Termination from the Chief Executive Officer of
the Company (or if you are the Chief Executive Officer, the Chairman of the
Compensation Committee of the Board of Directors), 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 the 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, you committed the conduct set forth above in
CLAUSES (A) OR (B) of this SUBPARAGRAPH 4.1, and specifying the particulars
of that finding in detail.
4.2 Disability. Termination by the Company of your employment for
-----------
"Disability" means termination by the Company of your employment following
and because of your failure to perform your duties as an employee for a
period of at least one hundred eighty (180) consecutive calendar days as a
result of total and permanent incapacity due to physical or mental illness
or injury. Your incapacity must be certified by a licensed medical doctor
selected by you. You will continue to receive your full base salary at the
<PAGE>
- ---------------------------------
- ---------------------------------
Page 5
rate in effect and any bonus payments under the Plan payable during the one
hundred eighty (180) day qualification period until termination of your
employment for Disability. After that termination, your benefits will be
determined in accordance with the Company's long-term disability plan then
in effect and any of the Company's other benefit plans and practices then
in effect that apply to you. The Company will have no further obligation
to you under this Letter and all supplemental benefits will be terminated.
If the Company disagrees with the certification of your incapacity, it may
appoint another medical doctor to certify his opinion as to your
incapacity, and if that doctor does not certify as to your incapacity, then
the two doctors will appoint a third medical doctor to certify their
opinion as to your incapacity, and the decision of a majority of the three
doctors will prevail. (The Company will bear the costs of the doctors
opinions.)
4.3 Good Reason. Termination by you of your employment for "Good
------------
Reason" means termination by you of your employment based on:
(a) The assignment to you of duties inconsistent with your position
and status with the Company as they existed immediately prior to a
Change in Control, or a substantial change in your title, offices or
authority, or in the nature of your responsibilities, as they
existed immediately prior to a Change in Control, 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 of this Letter or as your salary may be increased from time
to time;
(c) A failure by the Company to continue the Company's incentive
compensation plan(s), as it may be modified from time to time,
substantially in the form in effect immediately prior to a Change in
Control (the "Plan"), or a failure by the Company to continue you as
a participant in the Plan on at least the basis of your
participation immediately prior to a Change in Control or to pay you
the amounts that you would be entitled to receive in accordance with
the Plan;
(d) The Company's requiring you to be based more than thirty-five
(35) miles from the location where you are based immediately prior
to a Change in Control, except for required travel on the Company's
business to an extent substantially consistent with your business
travel obligations prior to the Change in Control, or if you consent
to that relocation, the failure by the Company to pay (or reimburse
you for) all reasonable moving expenses incurred by you or to
<PAGE>
- ---------------------------------
- ---------------------------------
Page 6
indemnify you against any loss realized in the sale of your
principal residence in connection with that relocation;
(e) The failure by the Company to continue in effect any 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 immediately
prior to a Change in Control of the Company (or provide plans
providing you with substantially similar benefits), the taking of
any action by the Company that would adversely affect your
participation or materially reduce your benefits under any of those
plans or deprive you of any material fringe benefit enjoyed by you
immediately prior to a 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 immediately prior to a Change in
Control;
(f) The failure by the Company to obtain the assumption of the
agreement to perform this Letter by any successor, as contemplated
in PARAGRAPH 6; or
(g) Any purported termination of your employment that is not
effected pursuant to a Notice of Termination satisfying the
requirements of SUBPARAGRAPH 4.4 (and, if applicable, SUBPARAGRAPH
4.1).
4.4 Notice of Termination. Any purported termination by the Company
----------------------
pursuant to SUBPARAGRAPHS 4.1 OR 4.2 or by you pursuant to SUBPARAGRAPH 4.3
will be communicated by written Notice of Termination to the other party.
For purposes of this Letter, a "Notice of Termination" means a notice that
indicates the specific termination provision in this Letter relied upon and
setting forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the provision so
indicated. Any purported termination not effected pursuant to a Notice of
Termination meeting the requirements set forth in this Letter will not be
effective.
4.5 Date of Termination. For purposes of this Letter, the date of the
--------------------
termination of your employment ("Date of Termination") will be (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, or (c) if your employment
is terminated by you or the Company for any other reason, the date
specified in the Notice of Termination, which will not be later than thirty
(30) days after the date on which the Notice of Termination is given.
5. Benefits upon Certain Terminations following a Change in Control. If within
----------------------------------------------------------------
three (3) years following the Change in Control, your employment by the Company
<PAGE>
- ---------------------------------
- ---------------------------------
Page 7
is terminated by the Company other than for Death, Disability or Cause, or if
you terminate your employment for Good Reason, then the following provisions
will apply:
5.1 Compensation through Date of Termination. The Company will pay you
-----------------------------------------
(i) any unpaid amount of your base salary through the Date of Termination,
(ii) with respect to any year then completed, any unpaid amount accrued to
you pursuant to the Plan, and (iii) with respect to any year then partially
completed, a pro rata portion through the Date of Termination of your
target annual bonus under the Plan. For purposes of (iii) above, your
"targeted annual bonus under the Plan" will be your annual base salary as
of the Date of Termination multiplied by the target percentage of your
bonus under the Plan.
5.2 Additional Severance. In lieu of any further salary payments to you
---------------------
for periods subsequent to the Date of Termination, the Company will pay as
severance pay to you on the fifth (5th) business day following the Date of
Termination a lump sum equal to three (3) times the sum of (i) your annual
base salary at the highest rate in effect during the twelve (12) months
immediately preceding the Date of Termination plus (ii) the higher of (A)
the highest annual bonus paid to you or paid but deferred on your behalf
under the Plan, (B) any earned, but unpaid, bonus accrued for your benefit
under the Plan, or (C) your highest targeted annual bonus under the Plan,
whether or not earned, in each case with respect to the three (3) calendar
years immediately preceding the Date of Termination and the partial
calendar year ending on the Date of Termination. For purposes of ITEM (C)
above and SUBPARAGRAPH 5.3, the "highest targeted annual bonus under the
Plan" for the partial calendar year ending on the Date of Termination will
be your annual base salary as of the Date of Termination multiplied by the
target percentage of your bonus under the Plan.
5.3 Additional Retirement Benefit. If you are a participant in the
------------------------------
Company's U.S. Retirement Income Plan (the "Retirement Plan"), , the
Company will pay you a retirement benefit, in addition to the benefits to
which you are or would be entitled under the Retirement Plan. That benefit
will be a lump sum that is the actuarial equivalent of your benefits
calculated pursuant to the terms of the Retirement Plan with the following
adjustments: (i) 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, (ii) 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 the Company until attainment of age sixty-two (62), (iii) the
Final Average Earnings (for purposes of applying the benefit formula under
the Retirement Plan) will be determined using (A) the highest monthly rate
of Base Salary in effect during the twelve (12) months immediately
<PAGE>
- ---------------------------------
- ---------------------------------
Page 8
preceding the Date of Termination, plus (B) the higher of (I) the highest
annual bonus paid to you or paid but deferred on your behalf under the
Plan, (II) any earned, but unpaid, bonus accrued for your benefit under the
Plan, or (III) your highest targeted annual bonus under the Plan, whether
or not earned, in each case with respect to the three (3) calendar years
immediately preceding the Date of Termination and the partial calendar year
ending on the Date of Termination, divided by twelve (12) (regardless of
the earnings limitations under the Retirement Plan or governmental
regulations applicable to those plans), and (iv) the monthly retirement
benefit so calculated will be reduced by an amount equal to the monthly
retirement benefit payable to you under the Retirement Plan and any
supplemental retirement plan of the Company in which you participate. All
capitalized terms used in this CLAUSE (C), unless otherwise defined, will
have the same meanings as those terms are defined in the Retirement Plan.
The actuarial equivalent will be calculated based on the assumptions
contained in the Retirement Plan on the Date of Termination; provided that
the assumptions on which the actuarial equivalent will be calculated will
be no less favorable to you than those assumptions contained in the
Retirement Plan on the date of the Change in Control.
5.4 Benefit Plans. Unless your employment is terminated for Cause, the
--------------
Company will maintain in full force and effect, for your continued benefit
for three (3) years after your Date of Termination, all employee benefit
plans, programs and 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 those
plans, programs and arrangements. If your continued participation in any
of those plans, programs and arrangements is barred, the Company will
arrange to provide you with benefits substantially similar to those that
you were entitled to receive under them.
5.5 No Mitigation Required. You will not be required to mitigate the
-----------------------
amount of any payment provided for in this PARAGRAPH 5 by seeking other
employment or otherwise, nor will the amount of any payment provided for in
this PARAGRAPH 5 be reduced by any compensation earned by you as the result
of employment by another employer after the Date of Termination, or
otherwise.
5.6 Tax Gross-up Payment. If any payments or benefits provided pursuant
---------------------
to this Letter or any other payments or benefits provided to you by the
Company are deemed Aexcess parachute payments@ under Section 280G of the
Internal Revenue Code of 1986, as amended (the ACode@), or are subject to
an excise or penalty tax under any similar provision of any other revenue
system to which you may be subject, the Company will provide a gross-up
payment to you in order to place you in the same after-tax position you
would have been in had no excise or penalty tax become due and payable
under Code Section 4999 or any similar provision of that other revenue
system. That gross-up payment will not apply to any excise or penalty tax
<PAGE>
- ---------------------------------
- ---------------------------------
Page 9
attributable to any incentive stock option granted to you prior to April 1,
1998. Any gross-up payment to which you are entitled as a result of the
applicability of an excise tax under Code Section 4999 or any successor
provision of the Code, or as a result of any excise or penalty tax under
any similar provision of any other revenue system to which you may be
subject, will be determined in accordance with a "Policy with Respect to
Tax Gross-up Payments" adopted, or which will be adopted, by the Board of
Directors' Executive Committee, and once that policy is adopted, no
amendment of that policy will be effective with respect to your rights
under this Letter without your written consent.
6. Successors: Binding Agreement.
------------------------------
6.1 Assumption by Company's Successor. 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, to expressly assume and agree to perform this Letter. Failure of the
Company to obtain that agreement prior to the effectiveness of any
succession will be a breach of this Letter and will entitle you to
compensation from the Company in the same amount and on the same terms as
you would be entitled under this Letter if you terminated your employment
for Good Reason within three (3) years following a Change in Control,
except that for purposes of implementing the foregoing, the date on which
that succession becomes effective will be deemed the Date of Termination.
As used in this Letter, "Company" means Equifax Inc. and any successor to
its business and/or assets that executes and delivers the agreement
provided for in this SUBPARAGRAPH 6.1 or that otherwise becomes bound by
all the terms and provisions of this Letter by operation of law.
6.2 Enforcement by Your Successor. This Letter will inure to the benefit
------------------------------
of and be enforceable by your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
you die subsequent to the termination of your employment while any amount
would still be payable to you pursuant to this Letter if you had continued
to live, all those amounts, unless otherwise provided in this Letter, will
be paid in accordance with the terms of this Letter to your devisee,
legatee or other designee or, if there be no designee, to your estate; that
payment to be made in a lump sum within sixty (60) days from the date of
your death.
7. Notice. For purposes of this Letter, notices and all other communications
-------
provided for in this Letter will be in writing and will 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 Letter, provided that all notices to the Company
will be directed to the attention of the Chief Executive Officer of the Company
(or if the notice is from the Chief Executive Officer, to the General Counsel of
the Company), or to that other address as either party may have furnished to the
<PAGE>
- ---------------------------------
- ---------------------------------
Page 10
other in writing in accordance with this PARAGRAPH 7, except that notice of
change of address will be effective only upon receipt.
8. Modification and Waiver. No provision of this Letter may be modified,
------------------------
waived or discharged unless that waiver, modification or discharge is agreed to
in writing by you and that officer as may be specifically designated by the
Board of Directors of the Company. No waiver by either party at any time of any
breach by the other party of, or compliance with, any condition or provision of
this Letter to be performed by that other party will be deemed a waiver of
similar or dissimilar provisions or conditions at the time or at any prior or
subsequent time.
9. Construction. This Letter supersedes (a) any oral agreement between you and
-------------
the Company and any oral representation by the Company to you with respect to
the subject matter of this Letter and (b) that letter agreement dated
______________ between you and the Company pertaining to change-in-control. The
validity, interpretation, construction and performance of this Letter will be
governed by the laws of the State of Georgia.
10. Severability. If any one or more of the provisions of this Letter or any
-------------
word, phrase, clause, sentence or other portion of a provision is deemed illegal
or unenforceable for any reason, that provision or portion will be modified or
deleted in such a manner as to make this Letter as modified legal and
enforceable to the fullest extent permitted under applicable laws. The validity
and enforceability of the remaining provisions or portions will remain in full
force and effect.
11. Counterparts. This Letter may be executed in two or more counterparts,
-------------
each of which will take effect as an original and all of which will evidence one
and the same agreement.
12. Legal Fees. If the Company breaches this Letter or if, within three (3)
-----------
years following a Change in Control, (a) your employment is terminated by the
Company other than for Cause or Disability or (b) you terminate your employment
for Good Reason, the Company will reimburse you for all legal fees and expenses
reasonably incurred by you as a result of that termination (including all those
fees and expenses, if any, incurred in contesting or disputing the termination
or in seeking to obtain or enforce any right or benefit provided by this
Letter).
13. Employment by a Subsidiary. Either the Company or a Subsidiary may be your
--------------------------
legal employer. For purposes of this Letter, any reference to your termination
of employment with the Company means termination of employment with the Company
and all Subsidiaries, and does not include a transfer of employment between any
of them. The actions referred to under the definition of "Good Reason" in
SUBPARAGRAPH 4.3 include the actions of the Company or your employing
Subsidiary, as applicable. The obligations created under this Letter are
obligations of the Company. A change in control of a Subsidiary will not
constitute a Change in Control for purposes of this Letter unless there is also
a contemporaneous Change in Control of the Company. For purposes of PARAGRAPH 1
and this paragraph, a "Subsidiary" means an entity more than fifty percent (50%)
of whose equity interests are owned directly or indirectly by the Company.
<PAGE>
- ---------------------------------
- ---------------------------------
Page 11
If you accept the above terms, please sign and return to me the enclosed copy of
this Letter.
Sincerely,
Thomas F. Chapman
Agreed to as of , 199
------------------------- -
- -----------------------------------------------
your signature
<PAGE>
EXHIBIT 10.6
[LETTERHEAD OF EQUIFAX APPEARS HERE]
December 8, 1997
Mr. Daniel W. McGlaughlin
Equifax Inc.
1600 Peachtree Street
Atlanta, GA 30309
Dear Dan:
This letter is intended to serve as a memorandum of our agreement with respect
to payments and benefits to be made available to you by the Company as a
consequence of your retirement effective December 31, 1997. By your signature on
this letter, you also agree to take, or refrain from taking, certain actions
with respect to the Company, all of which we have previously discussed.
1. Retirement Payments
-------------------
The provisions of this agreement are in addition to and not in replacement of
any benefits due to you under the Company's tax-qualified employee benefit plans
and under that certain letter agreement with you dated June 22, 1989, as it has
been amended on July 1, 1991, and December 29, 1995.
2. Advancement of Incentive Payment
--------------------------------
For purposes of calculations required under the letter referenced above, in
order to provide a thirty-six month final average earnings figure for you as of
December 31, 1997, which will be equivalent to that which would have existed had
you not retired until February 28, 1998, the Company will pay you a portion of
your anticipated 1997 annual incentive payment prior to December 31, 1997. That
portion is $403,000. The remainder of the incentive which is owed to you will
be paid in February of 1998. In the event that the adjustment described above
does not provide you with the mathematically equivalent final average earnings,
because the incentive payment is higher than estimated, the Company will pay you
a lump sum prior to June 1, 1998, which is the actuarial equivalent of the
difference.
<PAGE>
Mr. Daniel W. McGlaughlin
December 8, 1997
Page 2
3. Vesting of Outstanding Stock Options
------------------------------------
Although certain of your options to purchase Company stock are not yet vested,
the Management Compensation Committee has resolved to accelerate the vesting of
all of your outstanding stock options as a consequence of your retirement, so
that all of your options are exercisable as of December 31, 1997. A complete
summary of your stock options is attached.
4. Restricted Stock
----------------
The Company will accelerate the vesting and eliminate the restrictions on the
bonus deferrals portion of your outstanding Company restricted stock, which is
also reflected on our attached exhibit, as of the first business day of 1998
(i.e., January 2, 1998). The special retention grant dated January 25, 1995 and
the corresponding cash performance bonus which accompanied this grant will vest
as originally provided, respectively on December 31, 1998 (stock) and on January
1, 1999 (cash).
5. Performance Share Plan
----------------------
You currently participate in the Company's Performance Share Plan and have
outstanding awards for the years 1995-1997, 1996-1998, and 1997-1999. Pursuant
to the current terms of the plan, you will receive a pro rata payment (two
thirds of the payment due for 1996-1998 and one-third of the payment due for
1997-1999) of the awards as earned at the time they would normally be paid to
the participants who remain actively employed. The award for earned 1995-1997
will be paid to you in full at the normal time in February, 1998. These
payments will al be made in cash.
6. Executive Perquisites
---------------------
(a) You will continue to receive executive financial planning and tax services
at the Company's expense for the rest of your life, with a maximum
reimbursable amount of $50,000 for 1998 and $15,000 per calendar year
thereafter.
<PAGE>
Mr. Daniel W. McGlaughlin
December 8, 1997
Page 3
(b) The Company will pay your membership dues at a local golf club of the
Company's choice through December 31, 1998.
(c) The Company will pay the cost of your personal excess liability insurance,
with an indemnity of $5,000,000, through December 31, 1998.
(d) The Company will reimburse you for the cost of an executive physical
examination either in 1998 or 1999, subject to the standard $1,000 maximum
reimbursement amount.
(e) The Company will provide you with secretarial support during 1998 and 1999.
(f) The Company will provide you with tax gross-up payments on the above
perquisites to the degree that it would normally do so for active executive
employees.
7. Directorships
-------------
You have agreed to continue to serve as a member of the Boards of Directors of
Equifax Inc. and Equifax Canada Inc. through December 31, 1998.
8. Noncompetition and Nondisparagement
-----------------------------------
For a period of two years commencing January 1, 1998, you will not engage in any
business activities which are directly competitive with the Company's business
as and where it is carried on at the time of your retirement on December 31,
1997. As the chief executive officer of the Company, you have unique knowledge
of the Company's business and have been actively involved in the management of
that business wherever it has been carried on throughout the world. You
acknowledge that your agreement not to compete with the Company cannot therefore
be limited geographically in any practical way. For purposes of this agreement,
you will be deemed to be engaged in business directly competitive with the
Company's business whether that competition
<PAGE>
Mr. Daniel W. McGlaughlin
December 8, 1997
Page 4
consists of active employment, or serving as an officer or director or owner of
more than 1% of a company which is a competitor of the Company. The Company's
business, for these purposes, consists of (i) credit reporting, (ii) credit card
processing and support, (iii) check guarantee or authorization, and (iv)
collection of debt.
You and the Company further agree that, during the two years commencing January
1, 1998, neither will make any disparaging remarks concerning each other. You
also acknowledge that you have signed, on August 3, 1989, a Confidentiality and
Assignment Agreement which remains in effect with the Company.
9. Release
-------
You acknowledge that the payments referred to above are in lieu of any payments
to which you might be entitled under the Company's Severance Pay Plan. In
consideration of the additional payments and privileges provided to you as
described in this agreement, you acknowledge that you have no legal or other
claims against the Company, its subsidiaries, or their officers, directors,
employees, former employees, agents or shareholders, and that you will bring no
such claims pertaining to any matter or condition which may have occurred prior
to the date on which you execute this agreement. You hereby release all of
those parties from liability for any claims which you may currently have,
whether related to your employment or otherwise, including any claims under the
Age Discrimination in Employment Act, or any other state or federal law. This
agreement and release is voluntary on your part. You understand that you have
twenty-one (21) days to consider signing this agreement, and that you may revoke
it within seven (7) days of signing and returning it to Equifax. It will become
effective on the eighth day after you sign and return it.
<PAGE>
Mr. Daniel W. McGlaughlin
December 8, 1997
Page 5
The Company agrees that it has no claim against you and will bring no claim with
respect to any actions taken or failed to be taken by you prior to the date of
this agreement.
This agreement supersedes any prior agreement, verbal or otherwise, relating to
your retirement from the Company.
Sincerely,
/s/ John T. Chandler
- ---------------------------
John T. Chandler
JTC:cbp
Attachments
Agreed to this 8th day of December, 1997.
/s/ Daniel W. McGlaughlin
- ---------------------------------
Daniel W. McGlaughlin
Copy to: C. B. Rogers, Jr., Chairman
<PAGE>
D. W. MCGLAUGHLIN STOCK OPTION SUMMARY
Option Date Unvested Shares Option Price
----------- --------------- ------------
1/26/94 14,320 $10.6934
1/25/95 57,279 $12.4938
1/31/96 42,959 $16.2583
1/31/96 42,959 $19.5099
1/31/96 42,959 $21.1362
D. W. MCGLAUGHLIN RESTRICTED STOCK GRANT SUMMARY
Date of Grant # Shares
------------- --------
Bonus Deferrals 1/26/94 14,579
1/25/95 17,706
1/31/96 10,580
1/29/97 17,093
Retention Grant 1/25/95 38,949
<PAGE>
EXHIBIT 10.7
[LETTERHEAD OF EQUIFAX APPEARS HERE]
January 22, 1998
Mr. James John Allhusen
608 Pennlyn Pike
Pennlyn, PA 19044
Dear Jim:
This letter outlines the terms of our offer of employment to you as Executive
Vice President & Group Executive - North American Information Services,
reporting to me. I intend that your employment would commence as soon as
possible, preferably on or before January 28, 1998, the date of our Board of
Directors meeting.
Your total compensation package at Equifax will include several key components
or plans, with significant earnings opportunities available to our executive
team based upon performance. Because of the substantial performance leverage in
our annual and long-term compensation plans, your salary would be targeted to
represent approximately a third of your total compensation at lower performance
levels and at higher levels of performance the magnitude of the various
incentives grow dramatically and the relative importance of salary becomes less
of your total.
SALARY AND ANNUAL INCENTIVE:
- ---------------------------
Your starting salary will be $325,000 annually. You will also be eligible for
an annual incentive in accordance with our plan, with the amount earned being
determined by Equifax=s overall financial performance and your individual and
group performance. Your target bonus will be 50% of salary paid in the year,
with the opportunity to earn up to a maximum of 150%. Although we are
optimistic about the results expected and the corresponding performance
incentive you will earn, in no event will your annual incentive be less than 50%
of salary earned for the calendar year, 1998. Annual incentives are paid during
the first quarter of the year following the year earned, and you will also be
eligible to voluntarily defer all or part of your annual incentive into
restricted stock and receive an additional 20% premium in stock on any cash
amounts deferred. We provide this stock deferral opportunity for tax deferral
reasons, of course, but even more importantly to encourage and facilitate the
accumulation of Equifax stock by our executive team.
EMPLOYMENT BONUS:
- ----------------
An employment bonus of $150,000 will be paid to you in two equal installments.
The first payment will be made within two weeks of your employment. The second
installment will be paid on the first anniversary of your employment.
<PAGE>
Mr. James John Allhusen
January 22, 1998
Page 2
STOCK OPTIONS:
- -------------
I will request that the Board Compensation Committee approve a stock option
grant to you of 30,000 shares of Equifax common stock, effective January 28,
1998 or on the first date of your employment, if later, having the following
exercise prices and vesting terms:
a. Options to purchase 6,000 shares at the closing price ("fair market
value") on the day of the meeting (or your first day of employment, if
later), to vest 25% per year, beginning on the first anniversary of this
grant;
b. 6,000 shares at 120% of fair market value to vest 25% per year, beginning
on the first anniversary of the grant;
c. 6,000 shares at 130% of fair market value to vest 25% per year, beginning
on the first anniversary of the grant;
d. 6,000 shares with an exercise price of 140% of fair market value with
immediate vesting; and
e. 6,000 shares with an exercise price of 150% of fair market value with
immediate vesting.
These grants will be tax qualified, or incentive stock options, to the full
extent permitted under applicable laws or regulations.
PERFORMANCE SHARES:
- ------------------
I will propose to the Committee that you be granted an award of Performance
Share Units for the 1998-2000 measurement period at a level consistent with that
of other group executives of the Company.
The Performance Share Plan normally pays earned awards in the form of Equifax
common stock, but participants may elect to receive up to 50% of total earned
performance share units in the form of cash. These awards are paid in early
February, following the end of the three-year measurement period.
CHANGE-IN-CONTROL BENEFITS:
- --------------------------
Within 30 days of your employment I will have approved a Change-in-Control
Agreement for you. This agreement provides for a three-year "window" following
a change in control of the Company, during which you may be eligible for certain
benefits if the Company were to terminate your employment without cause, or if
you left the Company for a so-called "good reason." The major benefits provided
for in our Change-in-Control Agreement are:
<PAGE>
Mr.James John Allhusen
January 22, 1998
Page 3
a. Severance pay equal to three times your base salary + bonus (bonus being
defined as the higher of target or highest paid within the prior 36
months); and
b. Excise Tax Gross-Up on all payments
c. Benefits continuation for 3 years following termination
In addition to the above, your stock options and other long-term incentive
awards have separate vesting provisions upon a change in control of the company.
RELOCATION:
- ----------
You will be provided the benefits of the Equifax Executive relocation assistance
program, which include, but are not limited to, reimbursement for househunting,
temporary living assistance, loss on sale protection of your current residence,
closing cost assistance on the purchase of your new residence, and household
goods transportation from Pennsylvania to Georgia.
OTHER BENEFITS:
- --------------
In addition to the above compensation, you will also be eligible to participate
in all benefit plans offered on a Company-wide basis, including health, life,
disability and dental insurance, retirement plans, etc., in accordance with the
respective plan provisions. As a senior executive of the Company, you will
also be eligible for certain additional benefits including reimbursement for an
annual physical exam and executive financial planning and tax services provided
by Arthur Andersen.
As I believe you are aware, this offer of employment is subject to your
satisfactory completion of a standard pre-employment drug screen as well as a
routine credit and background check. Further, this agreement supercedes any
prior agreement, verbal or otherwise, covering your employment with the
Company.
I am very excited about your joining Equifax. Please sign and return one copy
of this letter to me for our records, and let's agree on a starting date at your
earliest convenience.
Warmest Regards,
/s/ Tom
- -------------------------------
AGREED TO THIS 28th DAY OF JANUARY, 1998
/s/ James J. Allhusen
- --------------------------------
James John Allhusen
<PAGE>
EXHIBIT 10.8
EQUIFAX INC.
OMNIBUS STOCK INCENTIVE PLAN
----------------------------
ARTICLE I
DEFINITIONS
-----------
1.01. Agreement means a written agreement (including any amendment or
---------
supplement thereto) between the Company and a Participant specifying the terms
and conditions of an award of Restricted Stock or an Option or SAR granted to
such Participant.
1.02. Board means the Board of Directors of the Company.
-----
1.03. Code means the Internal Revenue Code of 1986, and any amendments
----
thereto.
1.04. Committee means a committee of the Board appointed to administer
---------
the Plan.
1.05. Common Stock means the common stock of the Company.
------------
1.06. Company means Equifax Inc.
-------
1.07. Corresponding SAR means an SAR that is granted in relation to a
-----------------
particular option and that can be exercised only upon the surrender to the
Company, unexercised, of that portion of the option to which the SAR relates.
1.08. Date of Exercise means (i) with respect to an option, the date that
----------------
the Option price is received by the Company and (ii) with respect to an SAR, the
date that the notice of exercise is received by the Company.
1.09. Fair Market Value means, on any given date, the closing price of a
-----------------
share of Common Stock as reported on the New York Stock Exchange composite tape
on such day or, if the Common Stock was not traded on the New York Stock
Exchange on such day, then on the next preceding day that the Common Stock was
traded on such exchange, all as reported by such source as the Committee may
select.
(Includes amendments approved at 4/94 Shareholders' Meeting,
second amendment adopted July 1994 and
amendments adopted June 1995 and March 1998)
<PAGE>
1.10. Initial Value means, with respect to an SAR, the Fair Market Value
-------------
of one share of Common Stock on the date of grant, as set forth in the
Agreement.
1.11. Option means a stock option that entitles the holder to purchase
------
from the Company a stated number of shares of Common Stock at the price set
forth in an Agreement.
1.12. Participant means an officer or key employee of the Company or of a
-----------
Subsidiary, including an officer or key employee who is a member of the Board,
who satisfies the requirements of Article IV and is selected by the Committee to
receive a Restricted Stock award, an option, an SAR, or a combination thereof.
1.13. Plan means the Equifax Inc. Omnibus Stock Incentive Plan.
1.14. Restricted Stock means shares of Common Stock
----------
awarded to a Participant under Article IX. Shares of Common Stock shall cease
to be Restricted stock when, in accordance with the terms of the applicable
Agreement, they become transferable and free of substantial risks of forfeiture.
1.15. SAR means a stock appreciation right that entitles the holder to
---
receive, with respect to each share of Common Stock encompassed by the exercise
of such SAR, the amount determined by the Committee and specified in an
Agreement. In the absence of such a determination, the holder shall be entitled
to receive, with respect to each share of Common Stock encompassed by the
exercise of such SAR, the excess of the Fair Market Value on the Date of
Exercise over the Initial Value. References to "SARS" include both
Corresponding SARs and SARs granted independently of Options, unless the context
requires otherwise.
1.16. Subsidiary means any "subsidiary" (within the meaning of Section
----------
425 of the Code) of the Company.
2
<PAGE>
ARTICLE II
PURPOSES
--------
The Plan is intended to assist the Company in recruiting and retaining
officers and key employees with ability and initiative by enabling officers and
key employees to participate in its future success and to associate their
interests with those of the Company and its shareholders. The Plan is intended
to permit the award of shares of Restricted Stock, the grant of SARS, and the
grant of both options qualifying under section 422A of the Code ("incentive
stock options") and options not so qualifying. No Option that is intended to be
an incentive stock option shall be invalid for failure to qualify as an
incentive stock option. The proceeds received by the Company from the sale of
Common Stock pursuant to this Plan shall be used for general corporate purposes.
ARTICLE III
ADMINISTRATION
--------------
Except as provided in this Article III, the Plan shall be administered by
the Committee. The Committee shall have authority to award Restricted Stock and
to grant Options and SARs upon such terms (not inconsistent with the provisions
of this Plan) as the Committee may consider appropriate. Such terms may include
conditions (in addition to those contained in this Plan) on the exercisability
of all or any part of an Option or SAR or on the transferability or
forfeitability of Restricted Stock. Notwithstanding any such conditions, the
Committee may, in its discretion, accelerate the time at which any Option or SAR
may be exercised or the time at which Restricted Stock may become transferable
or nonforfeitable, but only in the event of the death, retirement or disability
of a Participant or a change in control of the Company. For purposes hereof,
"retirement" means retirement from the Company or a Subsidiary on or after age
65, or, otherwise with the consent of the Company. A "change in control of the
Company" means the occurrence of any of the following events:
3
<PAGE>
1. Voting Stock Accumulations. The accumulation by any Person of
---------------------------
Beneficial Ownership of twenty percent (20%) or more of the combined voting
power of the Company's Voting Stock; provided that for purposes of this ARTRICLE
III, SUBPARAGRAPH 1, a Change in Control will not be deemed to have occurred if
the accumulation of twenty percent (20%) or more of the voting power of the
Company's Voting Stock results from any acquisition of Voting Stock (a) directly
from the Company that is approved by the Incumbent Board, (b) by the Company,
(c) by any employee benefit plan (or related trust) sponsored or maintained by
the Company or any Subsidiary, or (d) by any Person pursuant to a Business
Combination that complies with CLAUSES (A), (B) AND (C) of ARTICLE III,
SUBPARAGRAPH 2; or
2. Business Combinations. Consummation of a Business Combination,
----------------------
unless, immediately following that Business Combination, (a) all or
substantially all of the Persons who were the beneficial owners of Voting Stock
of the Company immediately prior to that Business Combination beneficially own,
directly or indirectly, more than sixty-six and two-thirds percent (66 2/3%) of
the then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
Directors of the entity resulting from that Business Combination (including,
without limitation, an entity that as a result of that transaction owns the
Company or all or substantially all of the Company's assets either directly or
through one or more subsidiaries) in substantially the same proportions relative
to each other as their ownership, immediately prior to that Business
Combination, of the Voting Stock of the Company, (b) no Person (other than the
Company, that entity resulting from that Business Combination, or any employee
benefit plan (or related trust) sponsored or maintained by the Company, any
Eighty Percent (80%) Subsidiary or that entity resulting from that Business
Combination) beneficially owns, directly or indirectly, twenty percent (20%) or
more of the then outstanding shares of common stock of the entity resulting from
that Business Combination or the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors of
4
<PAGE>
that entity, and (c) at least a majority of the members of the Board of
Directors of the entity resulting from that Business Combination were members of
the Incumbent Board at the time of the execution of the initial agreement or of
the action of the Board providing for that Business Combination; or
3. Sale of Assets. A sale or other disposition of all or substantially
---------------
all of the assets of the Company; or
4. Liquidations or Dissolutions. Approval by the shareholders of the
-----------------------------
Company of a complete liquidation or dissolution of the Company, except pursuant
to a Business Combination that complies with CLAUSES (A), (B) AND (C) of ARTICLE
III, SUBPARAGRAPH 2.
For purposes of this ARTICLE III, the following definitions will apply:
"Beneficial Ownership" means beneficial ownership as that term is used in
Rule 13d-3 promulgated under the Exchange Act.
"Business Combination" means a reorganization, merger or consolidation of
the Company.
"Eighty Percent (80%) Subsidiary" means an entity in which the Company
directly or indirectly beneficially owns eighty percent (80%) or more of the
outstanding Voting Stock.
"Exchange Act" means the Securities Exchange Act of 1934, including
amendments, or successor statutes of similar intent.
"Incumbent Board" means a Board of Directors at least a majority of whom
consist of individuals who either are (a) members of the Company's Board of
Directors as of the date of this Letter or (b) members who become members of the
Company's Board of Directors subsequent to the date of this Letter whose
election, or nomination for election by the Company's shareholders, was approved
by a vote of at least two-thirds (2/3) of the directors then comprising the
Incumbent Board (either by a specific vote or by approval of the proxy statement
of the Company in which that person is named as a nominee for director, without
5
<PAGE>
objection to that nomination), but excluding, for that purpose, any individual
whose initial assumption of office occurs as a result of an actual or threatened
election contest (within the meaning of Rule 14a-11 of the Exchange Act) with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board of Directors.
"Person" means any individual, entity or group (within the meaning of
Section 13(d)(3) or 14 (d)(2) of the Exchange Act).
"Voting Stock" means the then outstanding securities of an entity entitled
to vote generally in the election of members of that entity's Board of
Directors.
"Disability" means permanently and totally disabled as defined in Code
Section 22(e)(3). In addition, the Committee shall have complete authority to
interpret all provisions of this Plan; to prescribe the form of Agreements; to
adopt, amend, and rescind rules and regulations pertaining to the administration
of the Plan; and to make all other determinations necessary or advisable for the
administration of this Plan. The express grant in the Plan of any specific
power to the Committee shall not be construed as limiting any power or authority
of the Committee. Any decision made, or action taken, by the committee or in
connection with the administration of this Plan shall be final and conclusive.
No member of the Committee shall be liable for any act done in good faith with
respect to this Plan or any Agreement, Option, SAR or Restricted Stock award.
All expenses of administering this Plan shall be borne by the Company.
The Committee, in its discretion, may delegate to one or more officers
of the Company, all or part of the Committee's authority and duties with respect
to Participants who are not subject to the reporting and other provisions of
Section 16 of the Securities Exchange Act of 1934, as in effect from time to
time. In the event of such delegation, and as to matters encompassed by the
delegation, references in the Plan to the Committee shall be interpreted as a
reference to the Committee's delegate or delegates. The Committee may revoke or
amend the terms of a delegation at any time but such action shall not invalidate
any prior actions of the Committee's delegate or delegates that were consistent
with the terms of the Plan.
6
<PAGE>
ARTICLE IV
ELIGIBILITY
-----------
4.01. General. Any employee of the Company or of any Subsidiary
-------
(including any corporation that becomes a Subsidiary after the adoption of this
Plan) is eligible to participate in this Plan if the Committee, in its sole
discretion, determines that such person is an officer or key employee. Any such
officer or key employee may be awarded shares of Restricted Stock or may be
granted one or more Options, SARS, or options and SARS. Directors of the
Company who are employees of the Company or a Subsidiary and who are determined
to be officers or key employees are eligible to participate in this Plan. A
person who is a member of the Committee may not be awarded shares of Restricted
Stock and may not be granted options or SARs under this Plan.
4.02. Grants. The Committee will designate individuals to whom shares of
------
Restricted Stock are to be awarded and to whom Options and SARs are to be
granted and will specify the number of shares of Common Stock subject to each
award or grant. An option may be granted with or without a related SAR. An SAR
may be granted with or without a related Option. All shares of Restricted Stock
awarded, and all options and SARs granted, under this Plan shall be evidenced by
Agreements which shall be subject to applicable provisions of this Plan and to
such other provisions as the Committee may adopt. No Participant may be granted
incentive stock options or related SARs (under all incentive stock option plans
of the Company and its Subsidiaries) which are first exercisable in any calendar
year for stock having an aggregate Fair Market Value (determined as of the date
an option is granted) exceeding $100,000. The preceding annual limitation shall
not apply with respect to Options that are not incentive stock options. The
aggregate number of options and SARs granted to any Participant during any
calendar year shall not exceed 150,000 Options and/or SARS. For purposes of the
preceding sentence, Options and any Corresponding SARs shall be treated as a
single award.
7
<PAGE>
ARTICLE V
STOCK SUBJECT TO OPTIONS
------------------------
Upon the award of shares of Restricted Stock the Company may issue
authorized but unissued Common Stock. Upon the exercise of any Option or SAR,
the Company may deliver to the Participant (or the Participant's broker if the
Participant so directs), authorized but unissued Common Stock. The maximum
aggregate number of shares of Common Stock that may be issued pursuant to the
exercise of Options and SARs and the award of Restricted Stock under this Plan
is 4,000,000, subject to adjustment as provided in Article X. If an Option or
SAR is terminated, in whole or in part, for any reason other than its exercise,
the number of shares of Common Stock allocated to the Option or SAR or portion
thereof may be reallocated to other Options, SARS, and Restricted Stock awards
to be granted under this Plan. Any shares of Restricted Stock that are
forfeited may be reallocated to other Options, SARs or Restricted Stock awards
to be granted under this Plan.
ARTICLE VI
OPTION PRICE
------------
The price per share for Common Stock purchased on the exercise of an
option shall be determined by the Committee on the date of grant; provided,
however, that the price per share for Common Stock purchased on the exercise of
any Option shall not be less than the Fair Market Value on the date the Option
is granted.
ARTICLE VII
EXERCISE OF OPTION
------------------
7.01. Maximum Option or SAR Period. The maximum period in which an
----------------------------
Option or SAR may be exercised shall be determined by the Committee on the date
8
<PAGE>
of grant except that no Option or SAR shall be exercisable after the expiration
of 10 years from the date the Option or SAR was granted. The terms of any
option or SAR may provide that it is exercisable for a period less than such
maximum period.
7.02. Nontransferability. Any Option or SAR granted under this Plan
------------------
shall be nontransferable except by will or by the laws of descent and
distribution. The preceding sentence to the contrary notwithstanding, if
permitted by the Agreement, an Option or SAR granted under this Plan may be
transferred to (1) members of the Participant's immediate family, (2) a trust
established for the benefit of members of the Participant's immediate family, or
(3) a partnership comprised only of immediate family members. "Immediate
family" shall include Participant's child(ren), spouse and grandchildren. In
the event of any such transfer, the Option and any Corresponding SAR that
relates to such Option must be transferred to the same person or person(s),
trust or partnership. No right or interest of a Participant in any Option or
SAR shall be liable for, or subject to, any lien, obligation, or liability of
such Participant or transferee. Any option or SAR transferred shall continue to
be subject to the same terms and conditions that were applicable to such Option
or SAR prior to such transfer.
7.03. Employee Status. For purposes of determining the applicability of
---------------
Section 422A of the Code (relating to incentive stock options), or in the event
that the terms of any Option or SAR provide that it may be exercised only during
employment or within a specified period of time after termination of employment,
the Committee may decide to what extent leaves of absence for governmental or
military service, illness, temporary disability, or other reasons shall not be
deemed interruptions of continuous employment.
ARTICLE VIII
METHOD OF EXERCISE
------------------
8.01. Exercise. An Option or SAR granted under this Plan shall be deemed
--------
to have been exercised on the Date of Exercise. Subject to the provisions of
9
<PAGE>
Articles VII and XI, an option or SAR may be exercised in whole at any time or
in part from time to time at such times and in compliance with such requirements
as the Committee shall determine; provided, however, that a Corresponding SAR
that is related to an incentive stock option may be exercised only to the extent
that the related Option is exercisable and when the Fair Market Value exceeds
the option price of the related option. An Option or SAR granted under this
Plan may be exercised with respect to any number of whole shares less than the
full number for which the option or SAR could be exercised; provided, however,
that an option or SAR must be exercised for no less than twenty-five shares of
Common Stock or, if less, the number of shares of Common Stock that remain
subject to the Option or SAR. A partial exercise of an Option or SAR shall not
affect the right to exercise the Option or SAR from time to time in accordance
with this Plan and the applicable Agreement with respect to remaining shares
subject to the Option or related to the SAR. The exercise of either an Option
or Corresponding SAR shall result in the termination of the other to the extent
of the number of shares with respect to which the option or Corresponding SAR is
exercised.
8.02. Payment. Unless otherwise provided by the Agreement, payment of
-------
the Option price shall be made in cash or a cash equivalent acceptable to the
Committee. If the Agreement provides, payment of all or part of the Option
price may be made by surrendering shares of Common Stock to the Company;
provided, however, that shares of Common Stock may be surrendered in payment of
all or part of the option price only if the surrendered shares have been held by
the Participant for at least six months prior to the Date of Exercise. If
Common Stock is used to pay all or part of the option price, the shares
surrendered must have a Fair Market Value (determined as of the day preceding
the Date of Exercise) that is not less than such price or part thereof.
8.03. Determination of Payment of Cash and/or Common Stock Upon Exercise
------------------------------------------------------------------
of SAR. At the Committee's discretion, the amount payable as a result of the
- ------
exercise of an SAR may be settled in cash, Common Stock, or a combination of
cash and Common Stock. No fractional shares shall be deliverable upon the
exercise of an SAR but a cash payment will be made in lieu thereof.
10
<PAGE>
8.04. Shareholder Rights. No Participant shall have any rights as a
------------------
stockholder with respect to shares subject to his option or SAR until the Date
of Exercise of such Option or SAR.
ARTICLE IX
RESTRICTED STOCK
----------------
9.01. Award. In accordance with the provisions of Article IV, the
-----
Committee will designate each individual to whom an award of Restricted Stock is
to be made and will specify the number of shares of Common Stock covered by the
award.
9.02. Vesting. The Committee, on the date of the award, shall prescribe
-------
that a Participant's rights in the Restricted Stock shall be non-transferable
and forfeitable for a period of time no less than three (3) years from the date
of grant. By way of example and not of limitation, shares shall vest no earlier
than three (3) years after date of grant and may provide that the shares will be
forfeited if the Participant separates from the service of the Company and its
Subsidiaries before the expiration of a stated term (not less than three years)
or if the Company, the Company and its Subsidiaries or the Participant fail to
achieve stated objectives.
9.03. Shareholder Rights. Prior to their forfeiture in accordance with
------------------
the terms of the Agreement and while the shares are Restricted Stock, a
Participant will have all rights of a shareholder with respect to Restricted
Stock, including the right to receive dividends and vote the shares; provided,
however, that (i) a Participant may not sell, transfer, pledge, exchange,
hypothecate, or otherwise dispose of Restricted Stock, (ii) the Company shall
retain custody of the certificates evidencing shares of Restricted Stock, and
(iii) the Participant will deliver to the Company a stock power, endorsed in
blank, with respect to each award of Restricted Stock. The limitations set
forth in the preceding sentence shall not apply after the shares cease to be
Restricted Stock.
11
<PAGE>
ARTICLE X
ADJUSTMENT UPON CHANGE IN COMMON STOCK
--------------------------------------
The maximum number of shares as to which Restricted Stock may be awarded
and as to which options and SARs may be granted under this Plan shall be
proportionately adjusted, and the terms of outstanding Restricted Stock awards,
options, and SARs shall be adjusted, as the Committee shall determine to be
equitably required in the event that 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. Any
determination made under this Article X by the Committee shall be final and
conclusive.
The issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or property,
or for labor or services, either upon direct sale or upon the exercise of rights
or warrants to subscribe therefor, or upon conversion of shares or obligations
of the Company convertible into such shares or other securities, shall not
affect, and no adjustment by reason thereof shall be made with respect to,
outstanding awards of Restricted Stock, Options or SARS.
The Committee may award shares of Restricted Stock, may grant Options,
and may grant SARs in substitution for stock awards, stock options, stock
appreciation rights, or similar awards held by an individual who becomes an
employee of the Company or a Subsidiary in connection with a transaction
described in the first paragraph of this Article X. Notwithstanding any
provision of the Plan (other than the limitation of Article V) , the terms of
such substituted Restricted Stock awards and Option or SAR grants shall be as
the Committee, in its discretion, determines is appropriate.
ARTICLE XI
COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
-----------------------------------------------------
No Option or SAR shall be exercisable, no Common Stock shall be issued,
no certificates for shares of Common Stock shall be delivered, and no payment
shall be made under this Plan except in compliance with all applicable federal
12
<PAGE>
and state laws and regulations (including, without limitation, withholding tax
requirements) and the rules of all domestic stock exchanges on which the
Company's shares may be listed. The Company shall have the right to rely on an
opinion of its counsel as to such compliance. Any share certificate issued to
evidence Common Stock for which shares of Restricted Stock are awarded or for
which an option or SAR is exercised may bear such legends and statements as the
Committee may deem advisable to assure compliance with federal and state laws
and regulations. No Option or SAR shall be exercisable, no Common Stock shall
be issued, no certificate for shares shall be delivered, and no payment shall be
made under this Plan until the Company has obtained such consent or approval as
the Committee may deem advisable from regulatory bodies having jurisdiction over
such matters.
ARTICLE XII
GENERAL PROVISIONS
------------------
12.01. Effect on Employment. Neither the adoption of this Plan, its
--------------------
operation, nor any documents describing or referring to this Plan (or any part
thereof) shall confer upon any employee any right to continue in the employ of
the Company or a Subsidiary or in any way affect any right and power of the
Company or a Subsidiary to terminate the employment of any employee at any time
with or without assigning a reason therefor.
12.02. Unfunded Plan. The Plan, insofar as it provides for grants,
-------------
shall be unfunded, and the Company shall not be required to segregate any assets
that may at any time be represented by grants under this Plan. Any liability of
the Company to any person with respect to any grant under this Plan shall be
based solely upon any contractual obligations that may be created pursuant to
this Plan. No such obligation of the Company shall be deemed to be secured by
any pledge of, or other encumbrance on, any property of the Company.
12.03. Rules of Construction. Headings are given to the articles and
---------------------
sections of this Plan solely as a convenience to facilitate reference. The
reference to any statute, regulation, or other provision of law shall be
construed to refer to any amendment to or successor of such provision of law.
13
<PAGE>
ARTICLE XIII
AMENDMENT
---------
The Board may amend or terminate this Plan from time to time; provided,
however, that no amendment may become effective until shareholder approval is
obtained if (i) the amendment increases the aggregate number of shares of Common
Stock that may be issued under the Plan, (ii) the amendment changes the class of
individuals eligible to become Participants, or (iii) the amendment extends the
duration of the Plan. No amendment shall, without a Participant's consent,
adversely affect any rights of such Participant under any outstanding Restricted
Stock award or under any Option or SAR outstanding at the time such amendment is
made.
14
<PAGE>
ARTICLE XIV
DURATION OF PLAN
----------------
No shares of Restricted Stock may be awarded and no Option or SAR may be
granted under this Plan after January 31, 2000. Restricted Stock awards and
Options and SARs granted before that date shall remain valid in accordance with
their terms.
ARTICLE XV
EFFECTIVE DATE OF PLAN
----------------------
Shares of Restricted Stock may be awarded and Options and SARs may be
granted under this Plan upon its adoption by the Board, provided that no
Restricted Stock award, Option or SAR will be effective unless this Plan is
approved by shareholders holding a majority of the Company's outstanding voting
stock, voting either in person or by proxy at a duly held shareholders' meeting
within twelve months of such adoption.
15
<PAGE>
EQUIFAX INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
Number of Shares:
Option Price: $
Date of Grant:
THIS AGREEMENT is entered into as of the above Date of Grant, by and
between Equifax Inc., a Georgia corporation (the "Company"), and the above-named
Participant ("Participant"). This Agreement is subject to the provisions of the
[____________________________] (the "Plan") and, unless defined in this
Agreement, all terms used in this Agreement have the same meanings given them in
the Plan.
1. GRANT OF OPTION. The Company on the "Date of Grant" granted to Participant
---------------
(subject to the terms of the Plan and this Agreement) the right to purchase
from the Company all or part of the Number of Shares stated above (the
"Option"). This Agreement is not intended to be an incentive stock option
under section 422A of the Internal Revenue Code of 1986 (the "Code").
2. BASIC TERMS AND CONDITIONS. The Option is subject to the following basic
---------------------------
terms and conditions:
(a) EXPIRATION DATE. The Option will expire ten (10) years from the Date
---------------
of Grant (the "Expiration Date").
(b) EXERCISE OF OPTION. Except as provided in SUBPARAGRAPH 2(E) or
------------------
PARAGRAPH 3, the Option will be exercisable in accordance with
schedule on Attachment "A" of this Agreement. Once exercisable, it
will continue to be exercisable until the earlier of the termination
of Participant's rights under SUBPARAGRAPH 2(E) or PARAGRAPH 3, or the
Expiration Date. The Option may be exercised in one or more
exercises, provided that each exercise must be for a multiple of
twenty-five (25) shares (e.g., 25 shares, 50 shares, 100 shares), up
to the full number for which the option is then exercisable, unless
the number of shares then exercisable is less than twenty-five (25),
in which case the Option may be exercised for that lesser number of
shares.
(c) METHOD OF EXERCISE AND PAYMENT FOR SHARES. In order to exercise
-----------------------------------------
the Option, Participant, or Participant's broker, must give written
notice on the Company's stock option exercise form or by electronic
notification, together with payment of the Option Price to the
Company's Stock Option Administrator at the Company's principal office
in Atlanta, Georgia, or as otherwise directed by the Administrator.
The Date of Exercise will be the date of the notice. Participant must
pay the Option Price in cash or a cash equivalent acceptable to the
Committee, or by the surrender of shares of Common Stock (held by
Participant for at least six (6) months) with an aggregate Fair Market
Value (based on the closing price of a share of Common Stock as
reported on the New York Stock Exchange composite index on the Date of
Exercise) that is not less than the Option Price.
If at exercise, Participant is not in compliance with the Company's
minimum stock ownership guidelines then in effect for Participant's
job grade or classification, Participant will not be entitled to
exercise the Option using a "cashless exercise program" of the Company
(if then in effect)and receive any net cash proceeds upon the exercise
of the Option, unless Participant uses those proceeds to pay the
exercise price in connection with a further exercise of the Option and
agrees to hold the stock acquired as a result of that additional
exercise for at least one (1) year.
<PAGE>
(d) NON-TRANSFERABILITY. Participant's rights under this Agreement are non-
-------------------
transferable except by will or by the laws of descent and distribution, in
which case all of Participant's remaining rights under this Agreement must
be transferred undivided to the same person or persons. During
Participant's lifetime, only Participant (or Participant's legal
representative if Participant is incompetent) may exercise the Option.
(e) TERMINATION OF EMPLOYMENT. Except as provided IN SUBPARAGRAPHS (I),
-------------------------
(II), (III) OR (IV) below, or PARAGRAPH 3, the Option is not
exercisable after termination of Participant's employment with the
Company or a Subsidiary.
(i) JOB ELIMINATION. Except as provided in SUBPARAGRAPH (IV) below
---------------
FOR PARAGRAPH 3, if the termination of Participant's employment
results from the Company's elimination of the position held by
Participant, then Participant will continue to have those
exercise rights specified in SUBPARAGRAPH 2(B), and PARAGRAPH 3
if applicable, existing as of the date of termination until the
earlier of the last day of the twelve (12) month period following
termination of employment or the Expiration Date.
(ii) RETIREMENT. Except as provided in SUBPARAGRAPH (IV) below or
----------
PARAGRAPH 3,if the termination of Participant's employment results
from Participant's Retirement, Participant will continue to have
those exercise rights specified in SUBPARAGRAPH 2(B), and PARAGRAPH 3
if applicable, existing as of the date of termination until the
earlier of the last day of the sixty (60) month period following
Participant's Retirement or the Expiration Date. "Retirement" means
Participant's termination of employment with the Company or a
Subsidiary (other than by the Company or a Subsidiary for Cause) at a
time when Participant is eligible for immediate benefits under
Participant's applicable retirement plan, if any.
(iii) DISABILITY. Except as provided in SUBPARAGRAPH (IV) below or
----------
PARAGRAPH 3, if the termination of Participant's employment results
from Participant's total and permanent disability, confirmed by a
licensed physician's statement, then the Participant will have the
exercise rights specified in SUBPARAGRAPH 2(B), and PARAGRAPH 3 if
applicable, as of the last date of Participant's active employment
until the earlier of the last day of the sixty (60) month period
following the last date of Participant's active employment or the
Expiration Date.
(iv) DEATH. If the termination of Participant's employment results from
-----
Participant's death, then Participant's estate, or the person(s) to
whom Participant's rights under this Agreement pass by will or the
laws of descent and distribution, will have those exercise rights
specified in SUBPARAGRAPH 2(B), and PARAGRAPH 3 if applicable, as of
the date of death until the earlier of the last day of the sixty (60)
month period following Participant's death or the Expiration Date. If
Participant dies following termination of employment and prior to the
expiration of any remaining period during which the Option may be
exercised in accordance with SUBPARAGRAPHS (I), (II) OR (III) above,
then notwithstanding the provisions of those subparagraphs, the
remaining period during which the option will be exercisable (by
Participant's estate, or the person(s) to whom Participant's rights
under this Agreement pass by will or the laws of descent and
distribution) will not be less than six (6) months from the date of
death; provide that under no circumstances will the Option be
exercisable after the Expiration Date.
2
<PAGE>
3. CHANGE IN CONTROL. If a Change in Control of the Company occurs while
-----------------
Participant is employed by the Company or a Subsidiary, then the Option
will become immediately exercisable with respect to that portion of the
Number of Shares with respect to which the Option had not yet been
exercised or exercisable (the "Unexercised Portion"). If Participant's
employment with the Company or a Subsidiary terminates after the Date on
which the Change in Control occurs other than as a result of a termination
by the Company or a Subsidiary for Cause, then Participant (or, if
applicable, Participant's estate or the person(s) to whom Participant's
rights under this Agreement pass by will or the laws of descent and
distribution) may exercise the Unexercised Portion until the earlier of the
last day of the sixty (60) month period following the termination of
Participant's employment or the Expiration Date.
4. TERMINATION FOR CAUSE. For purposes of this Agreement, termination for
---------------------
"Cause" means termination as a result of (a) the willful and continued
failure by Participant to substantially perform his or her duties with the
Company (other than a failure resulting from Participant's incapacity due
to physical or mental illness), after a written demand for substantial
performance is delivered to Participant by his or her superior officer
which specifically identifies the manner the officer believes that
Participant has not substantially performed his or her duties, or (b)
Participant's willful misconduct which materially injures the Company,
monetarily or otherwise. For purposes of this paragraph, Participant's act,
or failure to act, will not be considered "willful" unless the act or
failure to act is not in good faith and without reasonable belief that his
or her action or omission was in the best interest of the Company.
5. FRACTIONAL SHARES. Fractional shares will not be issued, and when any
-----------------
provision of this Agreement otherwise would entitle Participant to receive
a fractional share, that fraction will be disregarded.
6. NO RIGHT TO CONTINUED EMPLOYMENT. This Agreement does not give Participant
--------------------------------
any right to continued employment by the Company or a Subsidiary, and it
will not interfere in any way with the right the Company or Subsidiary
otherwise may have to terminate Participant's employment at any time.
7. CHANGE IN CAPITAL STRUCTURE. The terms of this Option will be adjusted as
---------------------------
the Committee determines is equitably required if the Company (a) effects
one or more stock dividends, stock splits, subdivisions or consolidations
of shares or (b) engages in a transaction to which section 425 or any
successor provision of the Code applies.
8. GOVERNING LAW. The Agreement is governed by the laws of the State of
-------------
Georgia.
9. CONFLICTS. If provisions of the Plan in effect on the Date of Grant and the
---------
provisions of this Agreement conflict, the Plan provisions will govern.
All references to the Plan in this Agreement mean the Plan in effect on the
Date of Grant.
10. PARTICIPANT BOUND BY PLAN. Participant acknowledges receiving a copy of
-------------------------
the Plan and agrees to be bound by all its terms and provisions.
11. BINDING EFFECT. Except as limited by the Plan or this Agreement, this
--------------
Agreement is binding on and extends to the legatees, distributes, and
personal representatives of Participant and the successors of the Company.
3
<PAGE>
12. TAXES. Under 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 federal,
state and local withholding and employment taxes, or the Participant will
pay or deliver to the Company cash or Common Stock (valued as of the Date
of Exercise) in sufficient amounts to satisfy these obligations.
IN WITNESS WHEREOF, the undersigned duly authorized officer of the Company
and Participant have signed this Agreement effective as of the Date of Grant.
EQUIFAX INC. _____________________________
Participant's Signature
By: _____________________________ _____________________________
Print Participant's Name
Name: ___________________________
Title: ____________________________
4
<PAGE>
EQUIFAX INC.
-----------
RESTRICTED STOCK AWARD
THIS AGREEMENT, is entered into this _____ day of _________, 199_, between
EQUIFAX INC., a Georgia corporation (the "Company"), and _________________
_____________________ ("Participant"), and is made pursuant and subject to the
provisions of the Company's _______________________ (the "Plan"), a copy of
which was previously furnished to the Participant. All terms used in this
Agreement 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 _______ (the "Date of
--------------
Grant"), awarded the Participant, subject to the terms and conditions of the
Plan and subject to the terms and conditions contained in this Agreement,
______________ shares of Common Stock of the Company (the "Restricted
Stock").
1. Terms and Conditions.
--------------------
a) Conditions for Vesting. Attached to this Agreement is Exhibit "A,"
----------------------
which contains terms and conditions for Vesting ("Conditions for
Vesting"), which is a part of this Agreement.
b) Stock Power. The participant will deliver to the Company a stock power,
-----------
endorsed in blank, with respect to the Restricted Stock.
c) Custody of Certificate. Custody of stock certificates evidencing shares
----------------------
of Restricted Stock will be 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 death,
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 will become
nonforfeitable and transferable as of the date of the Participant's death,
disability termination or Retirement or the Control Change Date. The
"Control Change Date" means the date on which the Change in Control occurs.
4. Retirement. For purposes of this Agreement, "Retirement" means
----------
Participant's termination of employment with the Company or a Subsidiary
(other than by the Company or a Subsidiary for Cause) at a time when
Participant is eligible for immediate benefits under Participant's
applicable retirement plan, if any, or in the absence of an applicable
retirement plan, as determined by the Committee.
<PAGE>
5. Shareholder Rights. With respect to Restricted Stock, a Participant will
------------------
have the right to receive dividends and vote shares of Restricted Stock.
6. Fractional Shares. Fractional shares will not be issuable hereunder, and
-----------------
when any provision hereof may entitle Participant to a fractional share such
fraction shall be disregarded.
7. No Right To Continued Employment. This Restricted Stock award does not give
--------------------------------
Participant any right to continued employment by the Company or a
Subsidiary. Nothing in this Agreement will interfere in any way with the
right of the Company or Subsidiary to terminate a Participant's employment
at any time.
8. Change in Capital Structure. The terms of this Restricted Stock Award will
---------------------------
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.
9. Governing Law. This Agreement will be governed by the laws of the State of
-------------
Georgia.
10. Conflicts. In the event of any conflict between the provisions of the Plan
---------
in effect on the Date of Grant and the provisions of this Agreement, the
provisions of the Plan will govern. All references to the Plan in this
Agreement mean the Plan as in effect on the Date of Grant of Restricted
Stock.
11. Participant Bound by Plan. Participant acknowledges receipt of a copy of
-------------------------
the Plan and agrees to be bound by its terms and provisions.
12. Binding Effect. Subject to the limitations above and in the Plan, this
--------------
Agreement will be binding upon and inure to the benefit of the legatees,
distributees., and personal representatives of the Participant and the
successors of the Company.
13. Taxes. The Participant will pay to the Company an amount as may be
-----
required to satisfy withholding and employment taxes on or before the date
when the Restricted Stock is delivered to Participant. Such payment will be
in cash unless participant executes a tax withholding election form. In this
case, a sufficient number of shares will be withheld to satisfy all tax
obligations.
IN WITNESS WHEREOF, a duly authorized officer of the Company and Participant
have signed this Agreement.
EQUIFAX INC.
By: /s/ John T. Chandler
------------------------------
John T. Chandler
Corporate Vice President
----------------------------------
Participant
<PAGE>
EXHIBIT 10.20
-------------
SEVERANCE PAY PLAN SUMMARY
The Equifax Inc. Severance Pay Plan was amended effective January 1, 1998 to
provide a competitive benefit to Equifax employees who are terminated due to job
elimination or office relocation, to simplify the General Release employees must
sign to receive this benefit, and to reduce or eliminate severance paid for poor
performance and conduct-related terminations.
Non-exempt employees terminated due to job elimination, overstaffing or closed
offices will receive two weeks severance pay for the first four years of
employment, plus one additional week of pay for every year beginning the 5th
year they complete with Equifax, with a maximum of 26 weeks. Exempt employees
will receive four weeks of severance pay for their first year of employment,
plus an additional two weeks pay for every year they complete, with a maximum of
52 weeks.
Non-exempt employees terminated due to poor or unsatisfactory performance who
have been at Equifax less than ten years will receive two weeks of severance
pay, those with at least ten years but less than 15 will receive four weeks, and
those with 15 or more years will receive six weeks severance pay. Exempt
employees who have been at Equifax for less than five years will receive four
weeks severance pay, those with at least five but less than ten will receive
eight weeks, and those with ten years or more will receive 12 weeks severance
pay.
Payments to employees are made in two ways: a single lump sum for employees
receiving severance pay of four weeks of less, and bi-weekly for those receiving
severance pay for more than four weeks.
Severance is not paid to employees who voluntarily resign, retire or are
terminated for conduct related issues such as poor attendance, insubordination,
dishonesty, drug/alcohol use or possession, poor conduct, violation of
fundamental procedures or conflict of interest.
<PAGE>
SPACE LEASE
BETWEEN
1600 PEACHTREE, L.L.C.
"LESSOR"
AND
EQUIFAX INC.
"LESSEE"
<PAGE>
SPACE LEASE
-----------
THIS SPACE LEASE (this "Lease"), made and entered into this ____ day of
March, 1998, by and between 1600 PEACHTREE, L.L.C. ("LESSOR") , and EQUIFAX INC.
("LESSEE"), a Georgia corporation.
ARTICLE I
DEMISE OF PREMISES
------------------
SECTION 1.01. DEMISE. For and in consideration of the payment of rent
------
herein reserved to be paid by LESSEE and the performance of the covenants and
agreements herein contained on the part of LESSEE to be kept, observed and
performed, LESSOR does hereby demise and lease to LESSEE, and LESSEE does hereby
take and hire, upon and subject to the terms and conditions herein contained,
approximately 92,500 square feet of building space which is outlined in red on
Exhibit "A" hereof (the "Premises") and located on the land described in Exhibit
- ----------- -------
"I" hereto (the "Land") together with (i) the right to park up to 390
- ---
automobiles in the multistory parking garage which is situated under the
building in which the Premises is located and in the surface parking spaces
located around the Premises and the Land (provided that if the aggregate number
of parking spaces available in such parking garage and the surface parking
spaces is less than 1,100, then the 390 parking spaces for LESSEE shall be
reduced proportionately to maintain the same ratio of parking spaces as 390
bears to 1,100 but in no event shall such number be less than 350), and (ii) the
non-exclusive right to use all access roads and drives that connect the parking
garage and surface parking to all public roads or private drives and the other
Common
<PAGE>
Areas, provided that LESSOR may change, relocate or eliminate such access
roads or drives so long as it provides uninterrupted access to the parking
garage and surface parking spaces and such actions do not interfere with
LESSEE'S operations from the Premises, all subject to the encumbrances set forth
in Exhibit "B" hereof.
-----------
SECTION 1.02. PARKING. In the event that either LESSOR or LESSEE requires
-------
parking spaces in addition to those available in the parking garage under the
Premises and the surface parking spaces, LESSOR will at LESSOR'S expense pave
and stripe the land around the parking garage. LESSEE will reimburse LESSOR for
a share of LESSOR'S actual, out-of-pocket expense in providing such paving and
striping, such share to be determined by the ratio of the number of parking
spaces available to LESSEE and the total number of parking spaces after such
paving and striping. In the event that LESSOR provides reserved parking spaces
to any third party tenant of the buildings on the Land, then a ratio shall be
established showing the number of reserved spaces provided to such third party
tenant to the number of square feet leased by such third party tenant, and
LESSEE shall be entitled to a number of comparable reserved parking spaces so
that its ratio of reserved spaces to square feet leased is equal to such ratio
for such third party tenant. LESSOR cannot grant to third party tenants of the
buildings on the Land a number of parking spaces which when added to those
allotted to LESSEE herein exceed the available parking at the Premises and on
the Land unless LESSOR adds an additional number of spaces acceptable to LESSEE.
In the event that LESSEE shall obtain for its own benefit the right to park
automobiles on property other than the Land, such rights shall be exclusively
for the benefit of LESSEE and shall not affect the provisions of this paragraph.
LESSEE represents that as of
-2-
<PAGE>
the date hereof there are at least 987 parking spaces located in the parking
garage and the surface parking spaces located around the Premises and the Land.
SECTION 1.03. CAFETERIA. LESSOR further grants to LESSEE the right to
---------
use the cafeteria presently located in the building in front of the building in
which the Premises is located, together with the right of reasonable access
through such adjoining building to such cafeteria until such time as LESSOR
leases to a third party the building located in front of the building in which
the Premises is located and commonly referred to as "Building B". In the event
that LESSOR leases the buildings in front of the building in which the Premises
is located to an entity which intends to operate the cafeteria presently located
in such building, LESSOR will use reasonable efforts to insert into its lease
with such entity that such entity must negotiate with LESSEE for an agreement
permitting LESSEE'S employees in the Premises to utilize such cafeteria in
common with the employees of such entity. In the event that LESSEE's employees
are not allowed to use such cafeteria, LESSEE shall be permitted to remove all
of its equipment from such cafeteria, and LESSEE shall repair any damage to such
building as a result of such removal. As of the date hereof, the cafeteria
equipment of LESSEE is described on Exhibit "H" hereto. In the event that after
-----------
March 31, 2004 LESSEE is the exclusive user of such cafeteria LESSEE shall pay
Rent with respect to the cafeteria for so long as LESSEE is the exclusive user
thereof at the rate of $11.00 per square foot being used for the cafeteria.
LESSEE and LESSOR shall in good faith attempt to agree upon a calculation of the
square footage of the cafeteria being used, and in the event that LESSOR and
LESSEE are unable to agree upon such calculation, then the calculation of such
square footage shall be made by an independent architect mutually acceptable to
LESSOR and
-3-
<PAGE>
LESSEE in accordance with the standard method for measuring floor area in office
buildings as calculated pursuant to the 1996 BOMA Standard for calculation.
SECTION 1.04. SIGN. LESSEE has a sign on the rear of the parking garage
----
facing the I-75, I-85 Interchange and LESSEE may keep such sign in place, paying
all costs and expenses in connection therewith until the earlier of (i) March
31, 2004; or (ii) the date of receipt by LESSEE of a written notice stating that
it is a notice given pursuant to this Section 1.04 and that LESSOR has executed
a lease with a tenant any part of the buildings on the Land (other than the
building in which the Premises is located) (the "Sign Removal Date").
Commencing on the Sign Removal Date , LESSEE will, at LESSEE'S sole cost and
expense, remove such sign and repair all damage to the building caused by such
sign and/or its removal and provided that LESSEE completes removal and
restoration within 30 days after the Sign Removal Date, LESSEE will be entitled,
throughout the balance of the Term, to maintain a smaller sign on the rear of
such parking garage on the following terms and conditions:
(i) the sign will have on it only the name of LESSEE'S company or division,
and the size and format of the letters forming such name will be subject to
LESSOR'S prior written approval, not to be unreasonably withheld or delayed;
(ii) the sign will be placed below the sign of the principal occupant of
the building which was formerly LESSEE'S headquarters building; and
(iii) the sign will occupy not more than forty percent (40%) of the
space allowed by applicable municipal ordinances.
The provision of this Section 1.04 shall be for the benefit of Equifax Inc. only
and its successors by merger or a purchaser of all or substantially all of the
assets of Equifax Inc.
-4-
<PAGE>
Lessee shall be entitled to have "directional" signs on the Land, but the
size and location of such directional signs will always be subject to Lessor's
prior written approval.
ARTICLE II
TERM OF LEASE
-------------
SECTION 2.01. TERM OF LEASE. The term of this Lease (the "Term") shall
-------------
commence on the date that the termination of the HEADQUARTERS FACILITY LEASE
becomes effective pursuant to a Lease Termination Agreement of even date
herewith and, unless sooner terminated as herein provided, shall continue
thereafter for fourteen (14) years. Upon the commencement of the Term, LESSOR
and LESSEE shall upon the request of either of them enter into an agreement
confirming the dates the Term commenced and is scheduled to terminate.
ARTICLE III
COVENANTS AND WARRANTIES OF LESSOR AND LESSEE
---------------------------------------------
SECTION 3.01. DEMISE OF LEASEHOLD ESTATE BY LESSOR. LESSOR warrants that
------------------------------------
it has full right and lawful authority to enter into this Lease; and that it is
lawfully seized of good, marketable and indefeasible record fee simple title to
the Land and the Premises, subject to the encumbrances set forth in Exhibit "B"
-----------
hereof.
SECTION 3.02. AUTHORITY OF LESSEE. LESSEE warrants that it has full right
-------------------
and lawful authority to enter into this Lease and to keep and perform the
covenants herein contained.
-5-
<PAGE>
SECTION 3.03. QUIET ENJOYMENT. LESSOR warrants that, unless an Event of
---------------
Default shall have occurred and be continuing, the LESSEE'S peaceful possession,
use and enjoyment of the Premises in accordance with this Lease shall not be
interrupted or disturbed by the LESSOR or any person or entity claiming by,
through or under the LESSOR.
ARTICLE IV
ANNUAL RENT AND ADDITIONAL RENTAL
---------------------------------
SECTION 4.01. RENT. LESSEE covenants and agrees to pay LESSOR, in lawful
----
money of the United States of America, without set-off or deduction, during the
Term as rent hereunder, a base annual rent (the "Rent") as follows:
YEARS RENT RENT BASED ON 92,500 SQUARE
FEET LEASED
(i) 1-5 $ 9.50 per square foot $ 878,750
(ii) 6-10 $10.25 per square foot $ 948,125
(iii) 11-14 $11.00 per square foot $1,017,500
Rent shall be payable in equal monthly installments, in advance, on or
before the first day of each month. Rent for a partial month at the beginning
or end of the term shall be prorated.
SECTION 4.02. ADDITIONAL RENTAL. LESSEE covenants and agrees to pay to
-----------------
LESSOR, from time to time as provided in this Lease, and as "Additional Rental":
(a) interest (hereinafter called "Interest") at the annual rate equal to ten
percent (10%) on all installments of Rent not paid within five (5) days after
LESSEE receives from LESSOR written notice that one or more installments of Rent
were not paid on the due date, until the date of payment; (b) all other sums
which LESSEE herein agrees to assume and pay to third parties in those
circumstances where
-6-
<PAGE>
LESSEE shall fail or refuse to pay such third parties and the same is paid by
LESSOR; and (c) Interest at the rate specified in Section 4.02 on the sums
described in (b), next preceding, from the due date until paid or, if demand is
required therefor by the terms of this Lease, from the date of demand until
paid. In the event of any failure on the part of LESSEE to pay any Additional
Rental, LESSOR shall have all the rights, powers and remedies provided for in
this Lease or at law or in equity or otherwise in the event of the nonpayment of
Rent.
SECTION 4.03. NET LEASE; NON-TERMINATION. This Lease is a net Lease and
--------------------------
Rent and Additional Rental shall be paid without notice, demand (except as
expressly provided herein in the case of certain Additional Rental),
counterclaim, setoff, deduction or defense and, without abatement, suspension,
deferment, diminution or reduction. Except as otherwise provided in this Lease,
this Lease shall not terminate nor shall LESSEE have any right to terminate this
Lease or be entitled to the abatement of any Rent hereunder or any reduction
thereof, nor shall the obligations of LESSEE under this Lease be otherwise
affected, by reason of (a) any damage to or destruction of all or any portion of
the Premises from whatever cause, except as provided in ARTICLE XIII or ARTICLE
XIV, (b) the prohibition, limitation or restriction of or interference with
LESSEE'S use of all or any portion of the Premises (except when such constitutes
a breach of LESSOR'S covenant of quiet enjoyment), (c) the failure on the part
of LESSOR to perform or comply with any term, provision or covenant of any other
agreement to which LESSOR and LESSEE may be parties, (d) the entry of a decree
or order for relief by a court having jurisdiction in the Premises in respect of
LESSEE in an involuntary case under the federal bankruptcy laws, as now or
hereafter constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of LESSEE or for any
substantial part of its property, or ordering the winding-up or liquidation of
its affairs and the continuance of any such decree or order unstayed and in
effect for a period of sixty (60) consecutive days, (e) the commencement by
LESSEE of a voluntary case under the federal bankruptcy laws, as now constituted
or hereafter amended, or any other applicable federal or state bankruptcy,
insolvency or other similar law, or the consent by it to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator
-7-
<PAGE>
(or other similar official) of LESSEE or for any substantial part of its
property, or the making by it of any assignment for the benefit of creditors, or
the failure of LESSEE generally to pay its debts as such debts become due, or
the taking of corporate action by LESSEE in furtherance of any of the foregoing,
or (f) any claim which LESSEE has or might have against LESSOR. Except as
otherwise expressly provided in this Lease, LESSEE waives all rights now or
hereafter conferred by statute or otherwise to quit, terminate or surrender this
Lease or the leasehold estate in the Premises or any part thereof, or to any
abatement, suspension, deferment, diminution or reduction of Rent. It is the
purpose and intent of LESSOR and LESSEE that Rent and Additional Rental (where
payable to LESSOR) shall be absolutely net to LESSOR, so that this Lease shall
yield, net, to LESSOR, Rent specified in 4.01 and Additional Rental specified in
4.02 hereof throughout the Term, and that all costs, expenses and obligations of
every kind or nature whatsoever relating to the Premises which may arise and
become due as specified in 5.01 and 5.02 hereof or elsewhere herein during the
Term shall be paid by LESSEE, and that LESSOR shall be indemnified and saved
harmless by LESSEE from and against the same, except as expressly provided
herein.
-8-
<PAGE>
ARTICLE V
TAXES, ASSESSMENTS AND CHARGES
------------------------------
SECTION 5.01. TAXES AND ASSESSMENTS. Subject to the provisions of 11.01
---------------------
hereof (concerning "Permitted Contests"), LESSEE covenants and agrees to pay to
LESSOR after receipt of a copy of the tax bill and a calculation of LESSEE'S
prorata share of taxes from Lessor, but before the same become delinquent and
before any fine, penalty, or interest may be added for nonpayment, LESSEE'S
prorata share of any and all taxes, assessments, license or permit fees,
excises, imposts and charges of every nature and classification (all or any one
of which are hereinafter referred to as "Tax") that at any time during the Term
are levied, assessed, charged or imposed upon LESSOR'S fee simple and/or
reversionary interest in land and buildings on and in which the Premises is
situated, LESSEE shall pay to LESSOR any tax on Rent or Additional Rental
reserved or payable hereunder (including any gross receipts or other taxes
levied upon, assessed against or measured by the Rent or Additional Rental);
provided, however, that LESSEE shall not be obligated to pay any municipal,
state or federal income, inheritance or estate tax or any tax imposed, levied or
assessed with respect to or because of the income, appreciation or other benefit
derived by LESSOR from or by virtue of this Lease or the estate of LESSOR under
this Lease under currently existing applicable laws and regulations; provided,
however, that if at any time during the Term the methods of taxation prevailing
at the commencement of the Term shall be altered so that any imposition which at
the commencement of or during the Term is or shall be levied, assessed or
imposed on real estate and the improvements thereon is thereafter levied,
assessed or imposed wholly or partially (a) on the rents received from real
estate or the improvements thereon, or (b) as a tax assessment, levy or license
fee (regardless of the form and
-9-
<PAGE>
regardless of the taxing authority) upon LESSOR, measured by Rent and Additional
Rental payable under this Lease, then all such substitute taxes, assessments,
levies or license fees shall be deemed to be included within the meaning of the
term "Tax" for purposes hereof, and LESSEE shall pay and discharge the same as
herein provided in respect to the payment of Tax. LESSEE'S prorata share shall
be determined by multiplying the Tax by a fraction, the numerator of which is
the total number of square feet in the Premises and the denominator of which is
the total number of square feet in the office buildings located on the Land, but
not the parking garage which are the subject of the Tax. The quotient so
obtained shall be LESSEE'S prorata share of such Tax. As of the date hereof,
LESSEE'S prorata share of such Tax is 27.82% (92,500 / 332,500). Tax due during
the initial and final year of the Term, will be prorated. Lessee shall not be
responsible for any part of any tax increases that are assessed because of new
construction on the Land unless such new construction is performed at the
request of Lessee. In the event of any assessment for improvements serving or
relating to the use of the Premises which is payable in installments, LESSEE'S
prorata share thereof shall be further limited to those installments becoming
due during the Term.
Notwithstanding the calculation of LESSEE's prorata share as provided
above, LESSOR may in connection with the leasing of the space in the buildings
located in front of the building in which the Premises is located remeasure the
rentable square feet of such improvements and the Premises. Such remeasurement
shall be performed by an independent architect reasonably acceptable to LESSOR
and LESSEE and shall be performed in accordance with the provisions of Section
1.03 of this Lease. Upon completion of such remeasurement, LESSOR shall provide
a copy of such architect's determination to LESSEE, and LESSEE's prorata share
shall be
-10-
<PAGE>
redetermined from and after such date, with the area of the improvements to the
Land and the Premises being based on such measurement. Such recalculation shall
only affect the calculation of LESSEE's prorata share and shall not, without
limiting the foregoing, affect the calculation of the Rent.
SECTION 5.02. CHARGES. LESSOR covenants and agrees that it shall be
-------
responsible for providing to the Premises (including the signs maintained by
LESSEE pursuant to 1.04 above) and the Common Facilities all public or private
utility services including, but not limited to, water, sewer, gas, light, heat
and air conditioning, telephone, electricity, trash removal, power and other
utility and communication services, together with the services described in
Exhibit "C" attached hereto and made a part hereof. Subject to the provisions
- -----------
of 11.01 hereof (concerning Permitted Contests) and 6.03 (concerning Audits),
LESSEE covenants and agrees that it shall pay in accordance with usual and
customary business practices as such shall become due all charges for all public
or private utility services including, but not limited to, water, sewer, gas,
light, heat and air conditioning, telephone, electricity, trash removal, power
and other utility and communications services together with the services
described in Exhibit "C" (all or anyone of which are hereinafter referred to as
-----------
"Charge") that at any time during the Term are rendered or become due and
payable with respect to the Premises. LESSEE will be responsible for installing
meters so that electrical service to the Premises is separately metered for the
Premises, and LESSOR shall install meters so that electrical service to the
balance of the improvements on the Land is separately metered. LESSEE shall pay
to LESSOR within thirty (30) days of receipt of an invoice therefor from LESSOR
LESSEE's prorata share of the actual, out-of-pocket costs of the Charges for
water and sewer, subject to the provisions of 6.03 (concerning Audits) below.
If LESSEE's business in the
-11-
<PAGE>
Premises, or any portion thereof, is materially adversely affected as a result
of any interruption in the services described above as a result of the acts or
omissions of LESSOR or its agents or contractors for a period of five (5)
consecutive business days, then Rent and all other amounts payable hereunder
shall abate in the proportion that the Premises are so materially adversely
affected until the entire Premises or portion thereof that was so materially
adversely affected are again usable without such material adverse effect, such
abatement to commence on the sixth (6th) day after such interruption.
The parties acknowledge that the Premises contains a heating and air
conditioning system designed primarily to provide service to the Premises, and
that the remainder of the buildings on the Land also have a separate heating and
air conditioning system which is intended primarily to provide service to such
buildings. Notwithstanding the foregoing, such systems are designed such that
they may serve the other buildings located on the Land. LESSOR and LESSEE agree
that the heating and air conditioning system serving the Premises and the
heating and air conditioning system serving the balance of the buildings on the
Land, respectively, may be utilized to provide such service to the other
building(s) in the event that the main system for such improvements is
temporarily interrupted. The party receiving such temporary service shall pay
to the other within thirty (30) days of demand therefor a charge of $35.00 per
hour for such service. Upon the request of either LESSOR or LESSEE, an
independent third party building manager may make recommendations to LESSOR and
LESSEE for the adjustment of such rate, which rate shall be based upon the
chilled water rate for operating the respective heating and air conditioning
systems. Such adjustments shall be subject to the mutual approval of LESSOR and
LESSEE.
-12-
<PAGE>
SECTION 5.03. GENERAL. LESSOR shall prepare and file, all reports and
-------
returns required by law and governmental regulations with respect to any Tax and
shall furnish copies thereof to LESSEE. LESSOR and LESSEE shall promptly
forward to the other, upon receipt, copies of any bill or assessment respecting
any Tax. Upon request of LESSEE, LESSOR agrees to furnish and deliver to LESSEE
receipts evidencing the payment of any Tax and/or Charge payable by LESSEE as in
5.01 provided. If any Tax and/or Charge may be paid in installments, LESSOR
shall be obligated to pay only such installments as they become due; provided,
however, that any and all installments which are incurred during the Lease Term,
and become due and payable after the expiration of the Term shall be paid on or
before the date which is prior to the expiration of the Term, or, in event of
the termination of this Lease, prior to the date of such termination. If LESSEE
fails to pay its prorata share of any Tax and/or Charge (or any installment
thereof) when due, LESSOR, without declaring a default hereunder, may, but shall
not be obligated to, pay any such Tax and/or Charge (or any installment thereof)
and any amount so paid by LESSOR, together with all reasonable costs and
expenses incurred by LESSOR in connection therewith, shall constitute Additional
Rental hereunder and shall be paid by LESSEE to LESSOR on demand with Interest
thereon in the manner provided in 4.03. LESSEE'S obligation to pay Taxes and
Charges which accrue during the Term shall survive any termination of this
Lease.
ARTICLE VI
CONDITION AND USE OF THE PREMISES
---------------------------------
SECTION 6.01. CONDITION OF THE PREMISES. LESSEE represents, covenants and
-------------------------
agrees that the Premises in its present state is accepted as being in good order
and condition and that the
-13-
<PAGE>
Premises comply in all respects with the requirements of this Lease (including
without limitation the electrical capacity requirements specified in Section (f)
of Exhibit "C" hereto), and is in all respects suitable for the purposes
----------
intended by LESSEE. LESSOR leases the Premises and LESSEE accepts the Premises,
"as is" at the date hereof without representation or warranty by LESSOR, express
or implied, in fact or by law, and without recourse to LESSOR, with respect to:
(i) the condition of the Premises, including, but not limited to the soil and
subsurface conditions thereof; (ii) the ability to use the Premises for any
particular purpose; (iii) access to or from the Premises; or, (iv) the existence
or adequacy of present availability of any utilities to service the Premises,
including, but not limited to, drainage and sewage facilities.
SECTION 6.02. MAINTENANCE AND REPAIRS. LESSEE shall, at its own cost and
------------------------
expense, maintain the Premises, exterior and interior, structural and
nonstructural, in as good a condition and repair as existed on the date of this
Lease, normal wear and tear and damage by casualty or condemnation (subject to
the terms of this Lease) excepted, including, without limitation, repair,
maintenance and replacement of the exterior walls, roofs, the foundation and
structural frame of each building and the interior of each building, including
but not limited to the electrical systems, heating, air conditioning and
ventilation systems, plate glass, windows and doors, and sprinkler and plumbing
systems. Notwithstanding the foregoing, from and after the date that LESSOR
leases all or any portion of the buildings located in front of the building in
which the Premises are located to one or more tenants, LESSOR shall maintain the
exterior of the Premises including all structural elements of the Premises and
the interior of the Premises as hereinafter provided, in as good a condition and
repair as existed on the date of this Lease, normal wear and tear and damage by
casualty or condemnation (subject to the term of this Lease) excepted,
including, without
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limitation, repair, maintenance or replacement of the exterior walls, roofs, the
foundation and structural frame of each building and the major building systems
(including but not limited to the electrical systems, elevators, mechanical
systems, heating, air conditioning and ventilation systems and sprinkler and
plumbing systems). LESSEE shall within thirty (30) days of receipt from LESSOR
of an invoice therefor reimburse LESSOR for its actual, out-of-pocket expenses
reasonably incurred in connection with performing such obligations, subject to
the provisions of 6.03 hereof (concerning Audits). Notwithstanding anything
herein to the contrary, LESSEE shall not be responsible for the maintenance,
repair or replacement of the parking structure located below the Premises or any
structural elements thereof.
SECTION 6.03. COMMON FACILITIES. The Common Facilities shall consist of
-----------------
the drives, ways and access, the parking garage and the paved parking areas, the
landscaped areas, and the building entrance area and security room described in
Exhibit "G" hereto, all located on the Land formerly occupied by LESSEE as its
- -----------
headquarters facility.
LESSOR shall keep all Common Facilities in a first-class state of repair
and condition and shall regularly perform maintenance to such Common Facilities
to ensure that the same are in a first-class state of repair and condition
("Common Area Maintenance"). LESSOR'S obligations hereunder shall include, but
not be limited to: maintenance; repair required to clean, preserve and maintain
the Common Facilities; lighting facilities serving them; policing and traffic
direction; fire protection; security protection; ice and snow removal; removal
of trash, rubbish and debris; pest extermination; repairing all above and
underground utility conduits and lines and sewers wherever such lines run over
or under any part of the Common Facilities; public liability, workers'
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compensation, property damage and hazard insurance. All holes or breaks in the
paving shall be repaired by LESSOR immediately after LESSOR becomes aware of
such an occurrence.
LESSEE covenants and agrees to pay as provided herein its pro rata share
(determined as provided in 5.01 hereof) of the reasonable cost of Common Area
Maintenance ("Common Area Maintenance Cost") during the Term of this Lease,
which shall include, without limitation, the following costs or expenses
incurred in connection with or reasonably attributable to the maintenance,
repair and operation of the Common Facilities: lighting, gardening and
landscaping (including planting, replanting and replacing flowers and shrubs);
cleaning; public liability, workers' compensation, property damage and hazard
insurance; fire and security protection; personal property taxes; line painting;
sanitary control; water and sewerage charges; removal of ice, snow, trash,
rubbish, debris, garbage and other refuse; personnel to provide and supervise
such service and to direct parking (including unemployment and social security
taxes). Notwithstanding anything herein to the contrary, LESSEE shall be
responsible for all costs relating to the elevators located within the area
described in Exhibit "G" hereto and the elevators located within the Premises.
-----------
In no event shall the Common Area Maintenance Cost include:
(i) cost of repairs and replacements to the extent that proceeds of
insurance or condemnation awards are received therefor;
(ii) interior improvements to individual tenant space or the cost of
any special work or service performed for any tenant at such
tenant's cost;
(iii) costs (or related depreciation) incurred in a comprehensive
rehabilitation or renovation of any building or improvement;
(iv) losses or damages caused by the negligence or willful misconduct
of LESSOR;
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(v) capital expenditures on the Land or any buildings or
improvements;
(vi) expenses for legal services and income tax accounting;
(vii) principal, interest, depreciation or the costs of obtaining
financing;
(viii) the cost of repairs or replacements incurred by reason of fire or
other casualty (but the amount of any deductible not exceeding
$100,000.00 may be included) or by reason of condemnation;
(ix) expenses incurred by LESSOR to lease space including leasing
commissions, advertising and promotional expenditures in
connection therewith;
(x) expenses for the replacement of any item covered under warranty
to the extent replaced without cost to LESSOR;
(xi) costs to correct any penalty or fine incurred by LESSOR due to
LESSOR's violation of any federal, state or local law or
regulation and any interest or penalties due for late payment by
LESSOR of any of the Common Area Maintenance Costs;
(xii) expenses for any item or service which LESSEE pays directly to a
third party or separately reimburses LESSOR and expenses incurred
by LESSOR to the extent the same are reimbursable or reimbursed
from any other tenants, occupants of the property, or third
parties other than as a reimbursement for Common Area Maintenance
Costs;
(xiii) expenses for any item or service not provided to LESSEE but
exclusively to certain other tenants in the building located on
the Land;
(xiv) a property management fee in excess of five percent (5.0%) of the
Common Area Maintenance Costs (provided that the Common Area
Maintenance Costs shall only include a management fee if such fee
is paid to an unaffiliated third party);
(xv) compensation of (i) employees above the grade of building
superintendent or building manager, and (ii) employees whose time
is not spent directly in the operation of the buildings on the
Land;
(xvi) LESSOR's general corporate overhead and administrative expenses
except if it is solely for the buildings on the Land;
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(xvii) taxes (other than personal property taxes on maintenance
equipment used in the performance of LESSOR's obligations with
respect to the Common Facilities);
(xviii) fees paid to affiliates of LESSOR to the extent that such fees
exceed the customary amount charged for the services provided;
(xix) costs for sculptures, paintings or other objects of art;
(xx) reserves;
(xxi) expenses incurred by LESSOR in order to comply with laws
(including without limitation Environmental Laws) or address
Hazardous Materials to the extent the same are not the
responsibility of LESSEE under this Lease; and
(xxii) any costs or expenses relating to the escalators located near
the area described in Exhibit "G" hereto.
----------
Prior to the commencement of the Term, and within ninety (90) days after the end
of each calendar year during the term hereof, LESSOR shall submit to LESSEE a
statement of the anticipated Common Area Maintenance Costs (the "Estimated
Costs"). The Estimated Costs for each such calendar year shall be the
anticipated for such calendar year as reasonably estimated by LESSOR in good
faith, which estimate shall bear a reasonable relationship to the Common Area
Maintenance Costs for the previous calendar years. LESSEE's prorata share of
any Estimated Costs shall be due and payable in twelve (12) monthly installments
on the same terms and conditions as payments of Rent. If LESSEE is in
possession of the Premises for a portion of a month, such obligation for said
month shall be prorated for the number of days of LESSEE's possession during
that month. Within ninety (90) days after the end of each calendar year, LESSOR
shall give LESSEE a detailed statement (the "Statement") as prepared by a
certified public accountant reasonably acceptable to LESSOR and LESSEE and
certified by LESSOR to be correct showing the total actual Common Area
Maintenance Costs for the prior calendar year
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and LESSEE's prorata share thereof (provided that such statement need not be
prepared by a certified public accountant for so long as 1600 Peachtree, L.L.C.
or Wachovia Bank, N.A. (or any wholly-owned subsidiary or affiliate of Wachovia
Bank, N.A. or nominee thereof) is the LESSOR). In the event that the total of
the payments required herein which LESSEE has made for such calendar year is
less than LESSEE's actual prorata share, LESSEE shall pay the difference within
thirty (30) days after receipt of the Statement from LESSOR. At the option of
LESSEE, any overpayment by LESSEE shall be refunded to LESSEE within thirty (30)
days from the receipt of the Statement by LESSEE, or credited toward the amounts
next become due pursuant to this Section. LESSOR shall deliver a Statement to
LESSEE on or before March 31 of the calendar year following the year for which
the Statement applies.
LESSEE, at its expense, shall have the right, upon giving reasonable notice
to LESSOR, to audit LESSOR's books and records relating to any Common Area
Maintenance Costs payable hereunder for a period of up to two (2) years after
LESSEE's receipt of a Statement (the rights pursuant to this paragraph are
hereinafter referred to as an "Audit") . In the event that such audit reveals
that the amount of Common Area Maintenance Costs stated by LESSOR in a Statement
is in excess of three percent (3%) over the actual Common Area Maintenance
Costs, then LESSOR shall pay the reasonable costs and expenses incurred in
connection with such audit. In the event that LESSEE in good faith disputes all
or any portion of the amount due by LESSEE hereunder, LESSEE shall not be in
breach of this Agreement if LESSEE pays to LESSOR such amount as is not in
dispute, and any remaining amount in dispute between LESSOR and LESSEE with
respect to Common Area Maintenance Costs shall be determined by arbitration by a
panel of three (3) arbitrators in accordance with the rules and regulations for
commercial
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matters then in effect for the American Arbitration Association or its successor
(the "AAA"). The determination of the arbitrators shall be final, binding and
conclusive on LESSOR and LESSEE, and judgment may be rendered thereon by any
court having jurisdiction, upon application of either LESSOR or LESSEE. Each
party shall have the right to select one of the arbitrators and shall be
responsible for the costs of their respective arbitrator and the third
arbitrator, who shall be a competent and impartial person with at least ten (10)
years experience in commercial leasing in the Atlanta metropolitan area, shall
be selected by the other two arbitrators or, failing agreement by them, the AAA.
The cost of such third arbitrator shall be borne equally by LESSOR and LESSEE.
Notwithstanding anything herein to the contrary (including without
limitation the provisions of Exhibit "C" hereto), LESSOR and LESSEE agree that
-----------
the maintenance and operation of the security system serving the Premises and
the balance of the improvements on the Land shall be performed jointly. LESSOR
shall not reduce the level of security provided to the Premises below that
provided as of the commencement of the Term or alter the physical security
system without the prior written approval of LESSEE. In addition, LESSOR shall,
at LESSEE's expense, upgrade or alter such security system affecting the
Premises as LESSEE may from time to time require.
SECTION 6.04. LESSEE'S PERSONAL PROPERTY; INDEMNITY. All of LESSEE'S
-------------------------------------
personal property now or hereafter placed or installed in the Premises ("Trade
Fixtures") shall be and remain LESSEE'S property at LESSEE'S sole risk, and
LESSOR shall not be liable for and LESSEE hereby releases LESSOR from any and
all liability for theft thereof or any damage thereto occasioned by any acts,
omissions or negligence of any third persons, or any act of God.
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<PAGE>
LESSEE shall have the right to install in the Premises additional Trade
Fixtures required by LESSEE or used by it in its business, and to remove any and
all Trade Fixtures upon expiration or termination of this Lease; provided,
however, that LESSEE shall repair and restore any damage or injury to the
Premises (to the condition in which the Premises existed prior to such
installation) caused by the installation and/or removal of any such Trade
Fixtures.
SECTION 6.05. ALTERATIONS AND ADDITIONS. So long as no Event of Default
--------------------------
remains uncured, LESSEE at its expense may make alterations of and additions
(both structural and non-structural) to the Premises or any part thereof,
provided that any alteration or addition (a) shall not change the general
character of the Premises as office space, or reduce the fair market value
thereof below its value immediately before such alteration or addition, or
impair the usefulness of the Premises as an office building (provided, however
that such requirements shall not be construed to require LESSEE to operate the
Premises as an office building, it being the intent of this Lease that the
Premises may be used for any lawful purpose), (b) is effected with due
diligence, in a good and workmanlike manner, in compliance with all legal
requirements and in a manner that will not unreasonably disturb LESSOR or
LESSOR's tenants, (c) is promptly and fully paid for by LESSEE, and (d) is made,
in case the estimated cost of such alteration or addition exceeds $2,000,000,
under the supervision of an architect or engineer reasonably satisfactory to
LESSOR and in accordance with plans, specifications and cost estimates approved
by LESSOR, such approval not to be unreasonably withheld or delayed. Title to
all such modifications, alterations and/or additions shall be and remain in the
LESSEE during the Term hereof and any extensions thereof, but shall revert to
LESSOR at the end of the Term, or such extensions.
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<PAGE>
SECTION 6.06. ACCESS TO PREMISES. LESSOR, its agents and designees, shall
------------------
have the right, but only at reasonable times upon reasonable prior notice to
LESSEE or any authorized employee of LESSEE at the Premises (except in the event
of an emergency), to enter the Premises, other than secured areas where
valuables or confidential documents or information are kept, for the making of
repairs or alterations which LESSOR shall be required to or shall have the right
to make under this Lease. LESSOR shall be allowed to take such material into
and upon the Premises that may be reasonably required for repairs and
alterations without the same constituting an eviction of LESSEE in whole or in
part and the Rent reserved shall abate equitably while said repairs or
alterations are being made in the event that such repairs or alterations
interfere with LESSEE's operations from the Premises for more than two (2) days.
LESSOR shall use reasonable efforts to minimize any disturbance to LESSEE's
occupancy and business operations. LESSOR shall be responsible for the safety
of all such work. LESSEE shall have the right to approve all persons who may
enter the Premises on behalf of LESSOR or any management company retained by
LESSOR (including without limitation the right to perform background checks on
such persons). In the event that the cost to LESSOR of any management company
shall materially increase as a result of LESSEE's disapproval of such persons,
LESSEE shall bear such increased costs.
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ARTICLE VII
COMPLIANCE WITH LAWS: LIENS AND ENCUMBRANCES
---------------------------------------------
SECTION 7.01. COMPLIANCE WITH LAWS. LESSEE shall, at LESSEE'S sole cost
--------------------
and expense, and subject to all of the provisions of this Section 7.01, promptly
comply in all material respects with any and all present and future laws,
ordinances, rules, regulations, directives and standards of all federal, state,
county and municipal governments and all departments and agencies thereof having
jurisdiction over the Premises relating to LESSEE'S use and occupancy thereof
("laws"), including but not limited to, the making of all changes to the
Premises which now or hereafter may be required in order to comply with the
foregoing; and LESSEE acknowledges its responsibility to comply with and hereby
agrees to comply with as to the Premises only Chapter One of the City of Atlanta
Building Code, 1983, as amended through December 22, 1989, requiring the
installation of automatic sprinkler protection in certain instances. In the
event that such requirement to comply with such laws occurs at any time during
the final two (2) years of the Term, Lessee shall only be responsible for
payment of its prorata share of the costs of such compliance based on the
remaining term of this Lease multiplied by the quotient obtained by dividing the
total costs of such compliance by the anticipated useful life of the changes to
the Premises.
SECTION 7.02. LIENS AND ENCUMBRANCES. Subject to the provisions of Section
----------------------
11.01 hereof (concerning Permitted Contests) and the provisions of Section 10.01
hereof (permitting mortgaging of LESSEE'S leasehold estate), LESSEE shall not
create or permit to be created or to remain, and, shall promptly discharge or
remove or otherwise render ineffective by payment or posting of a surety bond,
or otherwise, within thirty (30) days after notice by LESSOR, at its
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sole cost and expense, any lien, encumbrance or charge (each or all of which are
herein referred to as "Lien") upon the Premises and/or the cafeteria, or any
part thereof or upon LESSEE'S leasehold estate hereunder that arises from the
use or occupancy of the Premises and/or the cafeteria by LESSEE or by reason of
any labor, service or material furnished or claimed to have been furnished to
LESSEE or by reason of any construction, repair or demolition by LESSEE. Notice
is hereby given that LESSOR shall not be liable for the cost and expense of any
labor, services or material furnished or to be furnished with respect to the
Premises and/or the cafeteria at or by the direction of LESSEE or anyone holding
the Premises and/or the cafeteria or any part thereof by, through or under
LESSEE and that no laborer's, mechanic's or materialman's or other lien for any
such labor, services or materials shall attach to or affect the interest of
LESSOR in and to the Premises and/or the cafeteria. Nothing in this Lease
contained shall be deemed or construed in any way as constituting the consent or
request of LESSOR, express or implied, by inference or otherwise, to any
contractor, subcontractor, laborer or materialman for the performance of any
labor or the furnishing of any materials for any specific improvements or repair
to or of the Premises and/or the cafeteria or any part thereof, nor as giving
LESSEE any right, power or authority on behalf of LESSOR to contract for or
permit the rendering of any services or the furnishing of any materials that
would give rise to the filing of any lien against the Premises and/or the
cafeteria or any part thereof. If LESSEE fails to discharge, remove or otherwise
render ineffective by payment, posting of a surety bond, or otherwise, any Lien
as hereinabove provided, LESSOR, without declaring a default hereunder and
without relieving LESSEE of any liability hereunder, may, but shall not be
obligated to, discharge or pay the same, either by paying the amount claimed to
be due or by procuring the discharge of such Lien by
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deposit or by bonding proceedings, and any amount so paid by LESSOR and all
costs and expenses incurred by LESSOR in connection therewith shall constitute
Additional Rental hereunder and shall be paid by LESSEE to LESSOR on demand with
Interest thereon. For the purposes of this Section 7.02, LESSEE's obligations
with respect to the cafeteria shall only be effective so long as LESSEE is a
user of the cafeteria.
ARTICLE VIII
INDEMNIFICATION
---------------
SECTION 8.01. INDEMNIFICATION BY LESSEE. LESSEE covenants and agrees to
-------------------------
pay, defend, and save harmless LESSOR from and against any and all liability,
loss, damage, causes of action, suits, claims, demands or judgments of any
nature whatsoever (a) arising from any injury to or the death of any person or
damage to any property occurring on the Premises during the Term of this Lease
(except for those matters covered pursuant to Section 8.02(a) below), or (b) in
any manner arising out of or connected with the use, non-use, condition,
possession, operation, maintenance, management or occupation of the Premises or
any part thereof during the Term of this Lease or any extensions thereof, (c)
any negligence on the part of the LESSEE or its agents, contractors, servants,
employees, licensees or invitees, (d) resulting from the violation by LESSEE of
any term, condition or covenant of this Lease or of any contract, agreement or
restriction created by, through or under LESSEE which affects the Premises, or
any regulation affecting the Premises or any part thereof applicable to LESSEE
during the Term of this Lease or the occupancy or use thereof by LESSEE during
the Term of this Lease, or (e) any use by LESSEE or its agents, contractors,
servants, employees, licensees or invitees of the
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parking garage under the Premises and/or the cafeteria in the buildings in front
of the Premises and/or the Common Facilities; provided, however, that the
indemnification provided hereunder shall not apply to any liability, loss,
damage or expense resulting from the negligence or willful misconduct of LESSOR,
its officers, employees, servants, licensees, invitees, agents or contractors.
LESSEE, at its sole cost and expense, shall defend LESSOR against such causes of
action, suits, claims, and demands and be responsible for such judgments as to
which LESSOR is indemnified. Should LESSOR elect to participate in any defense
it may do so only at LESSOR'S sole cost and expense. Promptly upon receipt by
LESSOR of any summons, complaints, lawsuit, charge or process in which there
shall be asserted any causes of action, suits, claims or demands against which
LESSOR is indemnified in this Section 8.01, LESSOR shall promptly cause the same
to be transmitted and delivered to LESSEE. LESSOR shall cooperate with LESSEE in
the defense of any such cause of action, suit, claim or demand. Written notice
of the assertion against LESSOR of any such cause of action, suit, claim or
demand shall be delivered by LESSOR to LESSEE promptly after LESSOR receives
knowledge thereof. The obligations of LESSEE under this 8.01 shall survive any
termination of this Lease and any transfer or assignment by LESSOR or LESSEE of
this Lease or any interest hereunder.
SECTION 8.02. INDEMNIFICATION BY LESSOR. LESSOR covenants and agrees to
-------------------------
pay, defend, indemnify and save harmless LESSEE from and against any and all
liability, loss, damage, cost, expense (including all attorneys' fees and
expenses of LESSEE), causes of action, suits, claims, demands or judgments of
any nature whatsoever (a) arising from any injury to or the death of any person
or damage to any property occurring on the Land (or the Premises) caused by
LESSOR or its agents, contractors, servants, employees, licensees or invitees or
in any
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manner arising out of or connected with the use, non-use, condition, possession,
operation, maintenance, management or occupation of the Land or any part thereof
exclusive of the Premises, (b) any negligence on the part of the LESSOR or its
agents, contractors, servants, employees, licensees or invitees, or resulting
from the violation by LESSOR of any term, condition or covenant of this Lease or
of any contract, agreement, restriction, or regulation affecting the Land or the
Premises or any part thereof or the ownership, occupancy or use thereof.
Promptly upon receipt by LESSEE of any summons, complaints, lawsuit, charge or
process in which there shall be asserted any causes of action, suits, claims or
demands against which LESSEE is indemnified in this Section 8.02, LESSEE shall
promptly cause the same to be transmitted and delivered to LESSOR. LESSEE shall
cooperate with LESSOR in the defense of any such cause of action, suit, claim or
demand. Written notice of the assertion against LESSEE of any such cause of
action, suit, claim or demand shall be delivered by LESSEE to LESSOR promptly
after LESSEE receives knowledge thereof. The obligations of LESSOR under this
8.02 shall survive any termination of this Lease and any transfer or assignment
by LESSOR or LESSEE of this Lease or any interest hereunder.
ARTICLE IX
SURRENDER
---------
SECTION 9.01. SURRENDER. Upon any termination of this Lease, LESSEE shall
---------
peaceably quit and surrender the Premises to LESSOR, and any and all machinery
and equipment constructed, installed or placed by LESSEE thereon, excepting
Trade Fixtures, inventory, merchandise and other personalty owned by LESSEE.
Lessee may remove all confidential
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information and trade secrets and in the event LESSEE is not then in default
under this Lease, beyond any applicable grace or cure periods herein provided,
LESSEE shall have the right upon a termination or expiration of this Lease to
remove from the Premises all Trade Fixtures and other personal property and
equipment used in LESSEE'S business, as distinguished from machinery and
equipment used in and necessary to the operation of the Premises. Any Trade
Fixtures or other machinery and equipment not removed by LESSEE on or before
termination or expiration of this Lease shall become the property of LESSOR.
LESSEE shall leave the Premises in a "broom clean" condition.
SECTION 9.02. REMOVAL. LESSEE, at its sole cost and expense, and upon
-------
LESSOR'S written request therefor delivered sixty (60) days prior to any
termination or expiration, shall remove on or before termination or expiration
all or any Trade Fixtures from the Premises. LESSEE, at its sole cost and
expense, shall repair any damage caused thereby to the Premises.
ARTICLE X
ASSIGNMENT AND SUBLETTING
-------------------------
SECTION 10.01. LESSEE'S ASSIGNMENT. LESSEE shall have the right to assign
-------------------
this Lease or its leasehold interest in the Premises, or any part thereof, and
shall be entitled to sublease any portion of the Premises (whether such
assignment or subleasing occurs by operation of law or otherwise) without the
prior consent of Lessor; provided, however, no assignment or subleasing by
LESSEE shall relieve the LESSEE of its obligations under this Lease. LESSEE
agrees to cause any assignee to execute and deliver to LESSOR an agreement, in
form and substance reasonably satisfactory to LESSOR, pursuant to which such
assignee agrees to assume
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and to discharge all the obligations of LESSEE under this Lease, without,
however, relieving LESSEE of any such obligations. LESSEE shall have the right
to mortgage, grant security title to or a security interest in the leasehold
estate created hereby, or to collaterally assign its interest in the Lease, to
any lender or debt holder of LESSEE; provided, however, no such mortgaging,
granting security title to or security interest in or collateral assignment
shall encumber LESSOR'S interest in the Lease or in the Premises, it being the
parties' specific intent that LESSOR shall not be required to subordinate its
fee interest or its interest in this LEASE to LESSEE'S lender.
SECTION 10.02. LESSOR'S ASSIGNMENT. Except as prohibited in this Section
-------------------
below, LESSOR shall be permitted to assign this lease or any of his interest
herein, to any assignee, without the necessity of any consent by LESSEE.
Notwithstanding the foregoing, without the prior written consent of LESSEE,
which may be arbitrarily denied, LESSOR shall not assign this Lease or any of
LESSOR'S interests herein or lease all or any portion of the other buildings on
the Land or consent to the subleasing of such buildings to any "LESSEE
Competitor". A "LESSEE Competitor" shall mean (i) each person or entity whose
name appears on the most recently revised Competitor List which has been sent to
LESSOR prior to the commencement by LESSOR of negotiations for such sale or
assignment or lease or prior to LESSOR being requested to approve any such
sublease and (ii) all affiliates of such person or entity. Attached hereto as
Exhibit "E" is the current list (the "Competitor List") of LESSEE's competitors.
- -----------
LESSEE shall have the right to update the Competitor List no more often than
once every twelve (12) months during the Term. In updating the Competitor List,
Lessee may add thereto any person or entity that at the time of such updating is
engaged, directly or indirectly, within any
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of the fifty (50) states of the United States, District of Columbia, Puerto
Rico, Canada or the United Kingdom, (a) in the business of consumer credit
reporting, collection of consumer debt or obligations, consumer check credit
clearance or guarantee, consumer marketing studies or surveys, consumer reports
for life or property and casualty insurers, automation of data for use by
insurers or providers in the health care industry, design or implementation of
alliances for delivery of health care services, or (b) in any other business in
which LESSEE or its affiliates shall then be engaged, if the revenues from such
other business comprised as much as two percent (2%) of the revenue of LESSEE or
its affiliates realized throughout the preceding four (4) fiscal quarters of
LESSEE, on a consolidated basis, and if the revenues of such proposed assignee,
realized throughout its preceding four (4) fiscal quarters derived from such
other competing business or businesses, on a consolidated basis, were as much as
twenty percent (20%) of the gross revenues of such proposed assignee during such
fiscal period, on a consolidated basis.
ARTICLE XI
RIGHT TO CONTEST
----------------
SECTION 11.01. PERMITTED CONTESTS. LESSEE, at its expense, may contest by
------------------
appropriate legal proceedings conducted in good faith and with due diligence the
amount, validity or application, in whole or in part, of any Tax or Charge
referred to in 5.01 and 5.02 hereof, the application of any laws referred to in
Section 7.01 any Lien referred to in 7.02 hereof; provided that (a) LESSEE shall
give LESSOR prior written notice of such contest, (b) LESSEE shall first make
all contested payments (under protest if it desires) unless such proceeding
shall suspend the
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collection thereof from LESSOR and from Rent under this Lease or from the
Premises, (c) no part of the Premises or any interest therein or the Rent under
this Lease shall be subjected thereby to sale, forfeiture, foreclosure or
interference, (d) LESSOR shall not be subject to any civil or criminal liability
for failure to comply with any governmental regulation and the Premises shall
not be subject to the imposition of any Lien as a result of such failure other
than the lien then being contested. LESSEE agrees that it shall pay, and save
LESSOR harmless from and against, any and all losses, judgments, decrees and
costs (including all reasonable attorneys' fees and expenses) in connection with
any Permitted Contest and that, promptly after the final determination of every
Permitted Contest, LESSEE shall fully pay and discharge the amounts which shall
be levied, assessed, charged or imposed or be determined to be payable therein,
together with all penalties, fines, interests, costs and expenses resulting
therefrom and will promptly comply with any regulation of any governmental body
or agency having jurisdiction under which compliance is required.
ARTICLE XII
INSURANCE
---------
SECTION 12.01. LESSEE'S INSURANCE. LESSEE covenants and agrees that,
---------------------------------
except as permitted in Section 12.05 hereof, LESSEE will carry and maintain, at
its sole cost and expense, the following types of insurance, in the amounts and
in form hereinafter required:
(i) Liability insurance in the Commercial General Liability form (or
reasonable equivalent thereto) covering the Premises and the cafeteria (so long
as LESSEE is a user of the cafeteria) and LESSEE'S use thereof against claims
for personal injury or death and property
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damage occurring upon, in or about the Premises and the cafeteria, such
insurance to be written on an occurrence basis if commercially available at a
reasonable cost (not a claims made basis), with a Combined Single Limits amounts
not less than One Million Dollars ($1,000,000.00) aggregate per occurrence and
not less than Two Million Dollars ($2,000,000.00) for each policy year
specifically at this location. If LESSEE cannot obtain such insurance on an
occurrence basis at a reasonable cost, LESSEE may maintain such insurance on a
"claims made" basis, provided that (a) LESSEE gives LESSOR prior written notice
of the change in insurance and (b) LESSEE provides LESSOR with evidence that
LESSEE has, to the satisfaction of LESSOR, insured the "gap" in insurance
coverage which resulted from converting to a claims made basis of insurance.
LESSEE shall also maintain an "umbrella" policy insuring the risks insured under
the Commercial General Liability policy in an amount not less than Thirty
Million Dollars ($30,000,000.00) for each policy year.
(ii) worker's compensation insurance covering LESSEE'S employees and
those of its subsidiaries and affiliates to the extent necessary to protect
LESSOR, the Premises and the cafeteria against workmen's compensation claims.
(iii) insurance on LESSEE's furnishings, fixtures, equipment, Trade
Fixtures and other personal property in such amounts as LESSEE may reasonably
determine.
SECTION 12.02. LESSOR'S INSURANCE. LESSOR covenants and agrees that LESSOR
------------------
will carry and maintain, at its sole cost and expense, but subject to partial
reimbursement as herein provided, the following types of insurance, in the
amounts and in the form hereinafter required:
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(A) insurance on the "All-Risk" or equivalent form on a Replacement
Cost Basis against loss or damage to the all improvements except tenant
improvements made after January 1, 1998 now or hereafter located on the Premises
and the Land; and in an amount sufficient to prevent LESSOR or LESSEE from
becoming a co-insurer of any loss, but in any event in amounts not less than 90%
of the actual cost to replace the improvements with improvements which are
sufficient for continued use and occupancy by LESSEE and the other tenants
thereof at least comparable to such use and occupancy as it existed immediately
prior to the loss or damage, including utilities and amenities at least
comparable to those repaired or replaced. For the purpose of determining actual
cost of such replacement, it is agreed that currently such cost shall be deemed
$100.00 per square foot of finished and usable space, which amount will be used
to compute the required coverage amount of the initial insurance. Required
policy amounts of renewal policies shall be the same as the initial policy,
increased or decreased annually by the percentage change reflected in the R. S.
Means Square Foot Cost Index for Atlanta, Georgia published by F. W. Dodge
Company from its index as of twelve (12) months earlier; provided, however, that
if prior to a renewal date, LESSOR obtains an appraisal of such actual cost of
replacement by a qualified independent real property appraiser setting forth a
lesser then current cost of replacement, such lesser cost of replacement shall
be the policy amount for the renewal period and subsequent periods, subject to
adjustment by the aforesaid Index.
(B) boiler and machinery insurance covering losses to or from any
steam boilers, pressure vessels or similar apparatus requiring inspection under
applicable state or municipal laws or regulations which are located at the
Premises or the buildings on the Land or on any other building systems for which
such coverage is commercially available at reasonable
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rates, in the amount equal to the replacement costs of the boiler and machinery
and having a deductible of not more than Ten Thousand Dollars ($10,000.00);
coverage shall be on a broad form comprehensive basis; provided, however, that
the foregoing limits shall only be effective in the event that the insurance
maintained by LESSOR pursuant to Section 12.02(A) shall insure damage to other
property that results from accidents involving the boiler and machinery, and in
the event that such coverage is not available, then the amount of coverage shall
be Fifty Million Dollars ($50,000,000.00) with a deductible of not more than Two
Million Dollars ($2,000,000.00); and
(C) Liability insurance in the Commercial General Liability form (or
reasonable equivalent thereto) covering the Land and the Premises and LESSOR's
use thereof against claims for personal injury or death and property damage
occurring upon, in or about the Premises, such insurance to be written on an
occurrence basis if commercially available at a reasonable cost (not a claims
made basis), with a combined single limits amounts not less than One Million
Dollars ($1,000,000.00) per occurrence and not less than Two Million Dollars
($2,000,000.00) in the aggregate for each policy year. LESSOR shall also
maintain an "umbrella" policy insuring the risks insured under the Commercial
General Liability policy in an amount not less than Thirty Million Dollars
($30,000,000.00) for each policy year.
SECTION 12.03. POLICIES. All policies of the insurance provided for in
--------
Section 12.01 and Section 12.02 shall be issued in form acceptable to the
Insurance Commissioner of the State of Georgia by responsible insurance
companies licensed to do business in the State of Georgia. Each and every such
insurance policy with the exception of the workers' compensation policy:
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(i) shall name the other party, and any mortgagee of other party if
requested in writing by such mortgagee as an additional designated insured as
their interest may appear;
(ii) shall be described as to coverage and amounts in a certificate of
insurance from the appropriate insurance carrier delivered to other party prior
to the commencement of this Lease. Renewal certificates shall be procured by
each party and delivered to the other party within thirty (30) days prior to
the expiration of such policies, describing coverage and amounts applicable
under this Lease and as reflected in such policies;
(iii) shall contain a provision that the insurer will give to
LESSOR and LESSEE and such other parties in interest at least ten (10) days
notice in writing in advance of cancellation for non-payment of premiums; and
(iv) shall be written as a primary policy which does not contribute to
and is not in excess of coverage which the other party may carry.
(c) Any insurance provided for in Section 12.01 and/or Section 12.02 may be
maintained by means of a policy or policies of blanket insurance, covering
additional items or locations or insureds, provided, however, that LESSOR and
LESSEE and any other parties in interest as designated in this Lease shall be
named as an additional insured thereunder as their interests may appear, and the
requirements set forth in Section 12.01 and Section 12.02 are otherwise
satisfied.
SECTION 12.04. FAILURE TO CARRY. Except as permitted in Section 12.06
----------------
hereof, in the event that either party shall fail to carry and maintain the
insurance coverages set forth in this Section 12.01 or Section 12.02, the other
party may upon thirty (30) days notice to the other party (unless such coverages
will lapse in which event no such notice shall be necessary) procure
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such policies of insurance and the party obligated to carry the insurance shall
promptly reimburse the other party therefor.
SECTION 12.05. INSURANCE REVIEW. Each party may, at any time, but not more
----------------
than one (1) time in any twelve (12) month period, require a review of the
insurance coverage and limits of liability set forth in Section 12.01 and
Section 12.02 to determine whether the coverage and the limits are reasonable
and adequate in the then existing circumstances. The review shall be undertaken
on a date and at a time set forth in a party's notice requesting a review and
shall be conducted at the Premises. If the parties are, after a review, unable
to agree on either the coverage or the limits, then the parties shall arbitrate
the issue through the American Arbitration Association, or its then successor.
In rendering the decision the arbitrators shall consider the requirements of
Section 12.01, and/or Section 12.02, the cost of the insurance to be obtained,
inflation, changes in condition, and the insurance then being carried by similar
developments in the area of the Premises.
SECTION 12.06. SELF INSURANCE. LESSEE may become a "self insurer" of the
--------------
first Ten Million Dollars ($10,000,000.00) of risks insured pursuant to clause
12.01(i) so long as LESSEE maintains the umbrella insurance required by clause
12.01(i) and LESSEE may become a "self insurer" of the first Ten Million Dollars
($10,000,000.00) of the risks insured pursuant to clause 12.01(ii).
SECTION 12.07. LESSEE'S INSURANCE REIMBURSEMENT. LESSEE shall reimburse
--------------------------------
LESSOR for LESSEE'S prorata share of the premium cost of the insurance carried
by LESSOR on the Premises pursuant to Section 12.02 which prorata share shall be
determined by multiplying such premium cost by a fraction, the denominator of
which is the number of square
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feet in all buildings insured under such insurance, including the building in
which the Premises is located and the numerator of which is the number of square
feet in the Premises and the product so obtained will be LESSEE'S prorata share
and will be paid within thirty (30) days of the dated billed by LESSOR to
LESSEE. As of the date hereof, such prorata share is as specified in 5.01.
SECTION 12.08. MUTUAL RELEASE/WAIVER OF SUBROGATION. LESSOR and LESSEE,
------------------------------------
for themselves and any insurer claiming through or under them by way of
subrogation or otherwise, each hereby releases the other from any and all
liability or responsibility for any loss, injury or damage to the Premises or
other improvements on the Land, or its contents, caused by fire or any other
property casualty, during the term of this Lease, even if such fire or casualty
may have been caused by the negligence of the other party or one for whom such
party may be responsible. Inasmuch as the above mutual waivers will preclude the
assignment of any aforesaid claim by way of subrogation (or otherwise) to an
insurance company (or any other person), each party hereto hereby agrees if
required by said policies to give each insurance company which has issued to it
policies of fire and extended coverage insurance, and other insurance, written
notice of the terms of said mutual waivers, and to have said insurance policies
properly endorsed, if necessary, to prevent the invalidation of said insurance
coverage by reason of said waivers.
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ARTICLE XIII
FIRE AND OTHER CASUALTIES
-------------------------
SECTION 13.01. DAMAGE. If the building in which the Premises is located
------
and/or the parking garage or other Common Facilities shall be damaged or
destroyed by fire or other casualty, LESSOR, at LESSOR'S sole cost and expense,
shall promptly and diligently proceed to adjust the loss with the insurance
companies and arrange for the disbursement of insurance proceeds, and repair,
rebuild or replace such buildings, the parking garage or other Common
Facilities, and other improvements, so as to restore the Premises building
and/or the parking garage and other improvements to the condition in which they
were immediately prior to such damage or destruction to the extent reasonably
practical. The net proceeds of any insurance recovered by reason of such damage
or destruction in excess of the cost of adjusting the insurance claim and
collecting the insurance proceeds (such excess being referred to herein as the
"Net Insurance Proceeds") shall, if such Net Insurance Proceeds exceeds Five
Million and No/Dollars ($5,000,000.00), be held by the LESSOR'S mortgagee
(provided that such Mortgagee is a bank, savings association, insurance company
or other similar institutional lender having capital surplus and undivided
profits of at least $50,000,000.00; herein called "Institutional Lender"), or,
if no Institutional Lender then holds a mortgage lien, or deed to secure debt on
the building , by any escrow agent which is reasonably acceptable to LESSOR and
LESSEE; and the Net Insurance Proceeds shall be released for the purpose of
paying the fair and reasonable cost of restoring such building, garage and other
improvements. Such Net Insurance Proceeds shall be released to LESSOR, or to
LESSOR'S contractors, from time to
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time as the work progresses, pursuant to such requirements and limitations as
may be reasonably acceptable to LESSEE, LESSOR and LESSOR'S mortgagee (if the
mortgagee so requires), including, without limitation, lien waivers from each of
the contractors, subcontractors, materialmen and suppliers performing the work.
If the Net Insurance Proceeds (less any applicable deductible) are insufficient
to restore the Premises the parking garage and other improvements, LESSOR shall
be obligated to pay such deficiency and the amount of any such deductible.
If the Net Insurance Proceeds are less than Five Million Dollars
($5,000,000.00), such Net Insurance Proceeds may be held by LESSOR and used by
LESSOR to pay the fair and reasonable cost of restoring such building and other
improvements.
If the Net Insurance Proceeds (regardless of the amount thereof) exceed the
full cost of the repair, rebuilding or replacement of the damaged building or
other improvements, then the amount of such excess Net Insurance Proceeds shall
be paid to LESSOR or retained by the insurance carrier upon the completion of
such repair, rebuilding or replacement. Rent shall abate proportionally during
restoration. In the event that, in the opinion of an architect retained by
LESSEE and acceptable to LESSOR, the Premises cannot be restored within 180 days
of commencement of restoration, then LESSEE may, by written notice to LESSOR
delivered prior to the commencement of restoration, terminate this Lease.
SECTION 13.02. PLANS. Whenever LESSOR shall be required to carry out any
-----
work or repair and restoration pursuant to Section 13.01, if the estimated cost
of repair and restoration exceeds $5,000,000.00, LESSOR, prior to the
commencement of such work, shall deliver to LESSEE for LESSEE'S prior approval
(which shall not be unreasonably withheld or delayed) a
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full set of the plans and specifications therefor, together with a copy of all
approvals and permits which shall be required from any Governmental Authority
having jurisdiction. After completion of any major repair or restoration, LESSOR
shall, as soon as reasonably possible, obtain and deliver to LESSEE a
Certificate of Substantial Completion from LESSOR'S inspecting architect or
engineer and a permanent Certificate of Occupancy (or amended Certificate of
Occupancy), if required by applicable laws, issued by the appropriate authority
with respect to the use of the Premises, as thus repaired and restored. Any such
work or repair and restoration, in all cases, shall be carried out by LESSOR in
a good and workmanlike manner with first quality materials. LESSEE shall be
entitled to withdraw monies held pursuant to Section 13.01 for application to
the costs of such work from time to time as such costs are incurred.
SECTION 13.03. RIGHT TO TERMINATE. In the event that the property loss,
------------------
fire or other casualty which materially and substantially damages the Premises
occurs during the last two (2) years of the Term, LESSOR and LESSEE shall each
have the option, exercisable by written notice to the other delivered within
thirty (30) days of such fire or casualty, to terminate this Lease and LESSOR
shall thereby be relieved of the obligation to make the restorations required by
Section 13.01.
SECTION 13.04. DAMAGE TO OTHER BUILDINGS. In the event that the buildings
--------------------------
on the Land, other than the building in which the Premises is located, are
damaged or destroyed by fire or other casualty, LESSOR will either promptly
repair and restore the same or, provided utility and other building services to
be provided to the Premises are not affected, raze such damaged or destroyed
buildings and landscape the ground formerly occupied thereby.
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ARTICLE XIV
CONDEMNATION
------------
SECTION 14.01. TOTAL CONDEMNATION. If all of the Premises or such a
------------------
material portion of the Premises that the remaining portion is not usable by
LESSEE for its intended purpose is condemned or taken by the United States or
any other legal entity having the power of eminent domain with respect thereto,
this Lease shall terminate as of the date that title to the Premises or portion
thereof vests in the condemnor; provided, however, that such termination shall
not benefit the condemnor and shall be without prejudice to the rights of either
LESSOR or LESSEE to recover just and adequate compensation from the condemning
authority. Upon such termination pursuant to this 14.01, all Rent and other
amounts payable hereunder shall be apportioned and shall be paid up to and
including the date of such termination, and any excess prepaid Rent or other
amounts shall be promptly refunded to LESSEE.
SECTION 14.02. PARTIAL CONDEMNATION. If a portion of the Premises is
--------------------
condemned or taken by the United States or any other legal entity having the
power of eminent domain with respect thereto, and the part of the Premises
remaining is usable by LESSEE for its intended purpose then this Lease shall
remain in full force and effect and LESSOR, to the extent of any award to LESSOR
is sufficient therefor, shall forthwith cause the Premises (including, without
limitation, any tenant improvements and alterations) to be restored to as nearly
the same condition as existed prior to such taking. Monthly Rent shall be
reduced through March 31, 2004 by .7762% of the amount of the condemnation award
paid to LESSOR because of such taking and not applied to restoration, and
thereafter Monthly Rent shall be reduced equitably to
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the extent LESSEE's use and occupancy is affected thereby. During any period of
restoration, the Rent and other amounts payable hereunder shall abate equitably
to the extent LESSEE's use of the Premises is affected thereby.
SECTION 14.03. AWARDS. The court in any condemnation proceeding shall, if
------
not prohibited by law, be requested to make separate awards to LESSOR and
LESSEE. LESSOR and LESSEE agree to request such action of the court. This
Article XIV, to the extent permitted by law, shall be construed as superseding
any statutory provisions now in force or hereafter enacted concerning
condemnation proceedings. In the event that the court in such proceeding shall
not make separate awards, LESSEE shall be entitled to receive from LESSOR such
amount which represents compensation for moving expenses incurred by LESSEE, any
costs incurred and paid by LESSEE from and after January 1, 1998 in connection
with any alteration or improvement made by LESSEE to the Premises and the value
of any of LESSEE's property so taken, and for interruption of business.
SECTION 14.04. GENERAL. Nothing contained in this Lease to the contrary
-------
shall be deemed to prohibit LESSOR or LESSEE from introducing into any
condemnation proceeding or proceedings with respect to the Premises such
appraisals or other estimates of value, loss and/or damage as each may in its
discretion determine.
SECTION 14.05. PARKING. For the purpose of this Article XIV, the taking or
-------
condemnation of a material part of the garage and open spaces available for
vehicular parking or a loss of access to the Premises from Peachtree Street or
the means of access to the Premises or the entrances or lobbies of the Premises
described on Exhibit "G" hereto shall be deemed to render the remaining portion
-----------
of the Premises unusable for LESSEE'S intended purpose unless LESSOR
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shall provide to LESSEE parking spaces equivalent both as to covered and outside
parking to those condemned or taken and at a location reasonably accessible to
the Premises or reasonably equivalent access to the Premises, as applicable. For
the purposes hereof, a loss of access to the Premises from Peachtree Street
shall be deemed to have occurred only if LESSEE is denied permanent use of both
of the existing driveways on the Land providing access to Peachtree Street.
SECTION 14.06. TEMPORARY TAKING. If all or any part of the Premises shall
----------------
be temporarily taken, this Lease shall nevertheless remain in full force and
effect, and the Rent and other amounts payable hereunder shall not abate.
LESSEE shall continue to be responsible for all of its obligations hereunder to
the extent that such obligations are not materially affected by such taking.
All awards for any such temporary taking payable for any period prior to the
expiration of the Lease shall be paid to LESSEE and for periods after expiration
of the Lease to LESSOR.
ARTICLE XV
DEFAULT
-------
SECTION 15.01. LESSEE EVENTS OF DEFAULT. The occurrence of any of the
------------------------
following acts, events or conditions, regardless of the pendency of any
proceeding which has or might have the effect of preventing LESSEE from
complying with the terms, conditions or covenants of this Lease, shall
constitute an "Event of Default" under this Lease:
(a) LESSEE fails to make any payment of Rent or Additional Rental
within ten (10) days of the date LESSEE received from LESSOR written
notice of such failure to pay; or
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(b) LESSEE fails or refuses to fulfill or perform any other
covenant, agreement or obligation of LESSEE hereunder and such failure
or refusal shall continue for a period of thirty (30) consecutive
calendar days from and after the date upon which LESSEE receives from
LESSOR written notice of such default unless correction is commenced
within such period and thereafter diligently pursued; or
(c) The estate or interest of LESSEE in the Premises, or any portion
thereof, or in this Lease is levied upon or attached in any proceedings
and such process is not vacated, discharged or bonded over within thirty
(30) days after the date of such levy or attachment; or
(d) There is any entry of a decree or order for relief by a court
having jurisdiction in the Premises in respect of LESSEE in an
involuntary case under the federal bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of
LESSEE or for any substantial part of its property, or ordering the
winding-up or liquidation of its affairs and the continuance of any such
decree or order unstayed and in effect for a period of sixty (60)
consecutive days; or
(e) There is commencement by LESSEE of a voluntary case under the
federal bankruptcy laws, as now constituted or hereafter amended, or any
other applicable federal or state bankruptcy, insolvency or other
similar law, or the consent by it to the appointment of or taking
possession by a receiver, liquidator,
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assignee, trustee, custodian, sequestrator (or other similar official)
of LESSEE or for any substantial part of its property, or the making by
it of any assignment for the benefit of creditors, or the failure of
LESSEE generally to pay its debts as such debts become due, or the
taking of corporate action by LESSEE in furtherance of any of the
foregoing.
SECTION 15.02. TERMINATION. Upon the occurrence of any Event of Default
-----------
hereunder, LESSOR shall have the right, at its election and regardless of the
availability to LESSOR of any other remedy under this Lease or by law or in
equity provided, to give LESSEE (then or at any time thereafter while any such
Event of Default exists or continues) written notice of the termination of this
Lease as of the date specified in such notice of termination, which date shall
be not less than ten (10) days after the date of the giving of such notice. On
such termination date this Lease and the Term and estate herein granted shall,
subject to the provisions of 15.05 hereof, expire and terminate by limitation,
and all rights of LESSEE under this Lease shall expire and terminate, unless
prior to such termination date LESSEE pays to LESSOR all arrears of Rent and
Additional Rental payable by LESSEE under this Lease (together with Interest
thereon) and all costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) incurred by or on behalf of LESSOR by reason of
any Event of Default and fully cures and corrects any Event of Default then
existing hereunder to the satisfaction of LESSOR.
SECTION 15.03. REENTRY BY LESSOR. Whether or not this Lease has been
-----------------
terminated pursuant to 15.02 hereof, if an Event of Default occurs, LESSOR may,
for and on behalf of LESSEE and as LESSEE'S legal representative, enter upon and
repossess the Premises or any part thereof by force, summary proceedings,
ejectment or otherwise, and may dispossess LESSEE
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and remove LESSEE and all other persons and any and all property therefrom.
LESSOR shall not be liable to LESSEE or to any person or entity claiming by,
through or under LESSEE for or by reason of any such entry, repossession or
removal.
SECTION 15.04. RIGHTS UPON REPOSSESSION. At any time or from time to time
------------------------
after the repossession of the Premises or any part thereof pursuant to 15.03
hereof, and whether or not this Lease shall have been terminated pursuant to
15.02 hereof, LESSOR may at its option (a) repair or alter the Premises in such
manner as LESSOR may deem necessary or advisable so as to put the Premises in
good order and make the same rentable, and (b) relet or operate the Premises or
any part thereof for the account of LESSEE for such term or terms (which may be
greater or less than the period which would otherwise have constituted the
remainder of the Term) on such conditions (which may include concessions or free
rent) and for such uses as LESSOR in its discretion may determine, and may
collect and receive the rents therefor. All costs and expenses incurred by
LESSOR in the exercise of its right to reenter and to relet the Premises, or any
part thereof, including, without limitation, reasonable attorneys' fees,
construction and alteration costs, brokerage fees and all such similar and
dissimilar expenses, shall be charged to LESSEE and shall be and become the due
obligation of LESSEE to pay LESSOR, as Additional Rental, hereunder. All rental
and other sums collected by LESSOR during any period of reletting of the
Premises shall be and remain the property of LESSOR and the total collected
amount thereof, to the extent it exceeds the sum of all costs and expenses
incurred in reletting as aforesaid, is herein defined as the "Reletting
Proceeds" which, to the extent such Reletting Proceeds shall ever exceed all
Rent and Additional Rental due from LESSEE to LESSOR hereunder and provided no
termination has been declared, shall be and belong to LESSEE. LESSOR shall not
be responsible or liable for any
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failure to relet the Premises or any part hereof or for any failure to collect
any rent due upon any such reletting, but LESSOR shall make reasonable efforts
to mitigate LESSOR'S damages. No repossession of the Premises by LESSOR shall be
construed as an election to terminate this Lease and the Term herein demised
unless, in conjunction therewith, a written notice of termination evidencing
such intention is given to LESSEE as provided in 15.02 hereof.
15.05. LIABILITY OF LESSEE. No termination of this Lease pursuant to 15.02
-------------------
hereof or by operation of law or otherwise (except as expressly provided herein)
and no repossession of the Premises or any part thereof pursuant to 15.03 hereof
or otherwise, shall relieve LESSEE of its liability and obligations hereunder,
all of which shall survive such termination or repossession. LESSOR shall be
entitled, at its election, to sue for and receive each increment of Rent and
Additional Rental as and when the same shall become due, irrespective of whether
LESSOR shall have terminated this Lease or reentered and relet the Premises or
any portion thereof, provided only that in the event of reletting, LESSEE shall
be entitled to a credit for the Reletting Proceeds, if any, up to the amount of
Rent and Additional Rental that would otherwise have been due from LESSEE to
LESSOR hereunder. LESSOR agrees to make reasonable efforts, and to permit
LESSEE to make reasonable efforts to mitigate the liability and obligations of
LESSEE hereunder.
SECTION 15.06. RIGHT OF LESSOR TO PERFORM FOR LESSEE. Notwithstanding any
-------------------------------------
other provision of this Lease to the contrary, upon the occurrence of any Event
of Default hereunder, LESSOR may, at its exclusive option, take, on behalf of
LESSEE, whatever steps it deems reasonably necessary to cure such Event of
Default and to charge LESSEE for the costs and expenses attributable thereto.
LESSEE shall pay all costs and expenses immediately upon receipt
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of a statement thereof from LESSOR. Any such amounts, paid or unpaid, shall be
deemed Additional Rental hereunder.
SECTION 15.07. GENERAL. Each right, power and remedy of LESSOR provided in
-------
this Lease or now or hereafter existing at law or in equity or by statute or
otherwise shall be cumulative and concurrent and shall be in addition to each
and every other right, power or remedy provided in this Lease or now or
hereafter existing at law or in equity or by statute or otherwise. In addition
to any other remedy provided in this Lease, LESSOR shall be entitled, to the
extent permitted by applicable law, to injunctive relief in the event of the
violation or attempted or threatened violation of any term, condition or
covenant of this Lease or to a decree compelling performance thereof. The
exercise by LESSOR of any one or more of the rights, powers or remedies provided
in this Lease or now or hereafter existing at law or in equity or by statute or
otherwise shall not preclude the simultaneous or later exercise by LESSOR of any
such right, power or remedy.
SECTION 15.08. LESSOR DEFAULT. If LESSOR shall be in default in the
--------------
performance of any obligation required to be performed by LESSOR under this
Lease, and such default continues for a period of thirty (30) days following
written notice of such default from LESSEE, then LESSEE may exercise any of its
rights provided at law or in equity, all of which shall be cumulative and
concurrent remedies of LESSEE and shall be in addition to each and every other
right, power and remedy provided to LESSEE and shall be in addition to each and
every other right, power and remedy provided by LESSEE in this Lease or now or
hereinafter existing, at law or in equity, by statute or otherwise, but in no
event shall LESSEE have any right to set off sums owed or claimed to be owed to
LESSEE against Rent. LESSEE agrees that, should LESSOR'S
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mortgagee notify LESSEE in writing of the existence of any such mortgage or deed
to secure debt encumbering the Premises, LESSEE will simultaneously give
LESSOR'S mortgagee any default provided to LESSOR, and LESSOR'S mortgagee may
cure such default (and LESSEE will accept such cure) on behalf of the LESSOR.
ARTICLE XVI
ENVIRONMENTAL MATTERS
---------------------
SECTION 16.01. DEFINITIONS. For purposes of this Article XVI:
---------------------------
(i) "Contamination" as used herein means the uncontained or
uncontrolled presence of or release of Hazardous Substances into any
environmental media and into or on any portion of the Premises or any part
thereof so as to require remediation, cleanup or investigation under any
applicable Environmental Law.
(ii) "Environmental Laws" as used herein means all federal, state, and
local laws, regulations, orders, permits, ordinances, and the like concerning
protection of human health and/or the environment.
(iii) "Hazardous Substances" as used herein means any hazardous or
toxic substance or waste as those terms are defined by any applicable federal or
state law or regulation (including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601 et. sec.
("CERCLA") and the Resource Conservation and Recovery Act, 42 U.S.C. 6901 et.
sec. ["RCRA"]) and petroleum products and oil.
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SECTION 16.02. COMPLIANCE. LESSEE warrants that all its activities on the
----------
Premises, during the course of this Lease will be conducted in compliance with
Environmental Laws. LESSEE warrants that it and the Premises are, to the best of
LESSEE'S knowledge currently in compliance with all applicable Environmental
Laws and that there are no pending or threatened notices of deficiency, notices
of violation, orders, or judicial or administrative actions involving alleged
violations by LESSEE or the Premises of any Environmental Laws. LESSEE, at
LESSEE'S sole cost and expense, shall be responsible for obtaining all permits
or licenses or approvals under Environmental Laws necessary for LESSEE'S
operation of its business on the Premises and shall make all notifications and
registrations required by any applicable Environmental Laws. LESSEE, at
LESSEE'S sole cost and expense, shall at all times comply with the terms and
conditions of all such permits, licenses, approvals, notifications and
registrations and with any other applicable Environmental Laws. LESSEE warrants
that it has obtained all such permits, licenses or approvals and made all such
notifications and registrations required by any applicable Environmental Laws
necessary for LESSEE'S operation of its business on the Premises.
SECTION 16.03. HAZARDOUS SUBSTANCES. Except in compliance with all laws
--------------------
and/or regulations and the requirements of any insurance carrier insuring the
Premises, LESSEE shall not cause or permit any Hazardous Substances to be
brought upon, kept or used in or about the Premises. Except in compliance with
all laws and/or regulations and the requirements of any insurance carrier
insuring the Premises, LESSEE shall not cause or permit the release of any
Hazardous Substances into any environmental media such as air, water or land, or
into or on the Premises. If such release shall occur during the Term or any
extension thereof, LESSEE shall (i)
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immediately take all necessary steps to contain, control and clean up such
release and any associated Contamination, (ii) notify LESSOR, and (iii) take any
and all other action which may be required by Environmental Laws and/or,
governmental agencies, . LESSEE shall under no circumstances whatsoever (i)
treat, store or dispose of any Hazardous Waste (as all such terms are defined by
RCRA, and the regulations promulgated thereunder) within the Premises, or (ii)
discharge Hazardous Substances into the storm sewer system serving the Premises;
other than as shall be reasonably required in the use and occupancy of the
Premises and then only in full compliance with all laws and/or regulations. If
at any time during the Term, or any extensions thereof any governmental body or
agency requires that the asbestos in the Premises be removed LESSEE shall, at
its sole cost and expense, if required by law or governmental order, remove such
asbestos; but, except for asbestos which, according to governmental laws or
regulations should have been removed prior to the end of the Term, or any
extension thereof, LESSEE shall have no obligation to remove asbestos and LESSOR
shall thereafter be responsible for any removal thereof which may be required.
SECTION 16.04. INDEMNITY OF LESSEE. LESSEE shall and hereby does
-------------------
indemnify LESSOR and hold LESSOR harmless from and against any and all expense,
loss, and liability suffered by LESSOR (with the exception of those expenses,
losses, and liabilities arising from LESSOR'S own negligence or willful act), by
reason of LESSEE'S improper storage, generation, handling, treatment,
transportation, disposal, or arrangement for transportation or disposal, of any
Hazardous Substances (whether accidental, intentional, or negligent) or by
reason of LESSEE'S breach of any warranty or of the provisions of this Article
XVI. Such expenses, losses and liabilities shall include, without limitation,
(i) any and all expenses that LESSOR may incur to
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comply with any Environmental Laws as a result of LESSEE'S failure to comply
therewith; (ii) any and all costs that LESSOR may incur in studying or remedying
any Contamination at or arising from the Premises to the extent such remedying
is required by applicable law, (iii) any and all costs that LESSOR may incur in
studying, removing, disposing or otherwise addressing any Hazardous Substances
that LESSEE improperly stored, generated, handled, treated, transported or
disposed of or failed to remove from the Premises to the extent the same is
required by applicable law; (iv) any and all fines, penalties or other sanctions
assessed upon LESSOR by reason of LESSEE'S failure to comply with Environmental
Laws; and (v) any and all legal and professional fees and costs incurred by
LESSOR in connection with the foregoing. The indemnity contained herein shall
survive the termination or expiration of this Lease but only with regard to
conditions or provisions which LESSEE is obligated by this Lease to prevent,
correct, or comply with during the Term of this Lease and any extensions
thereof.
SECTION 16.05. INDEMNITY OF LESSOR. LESSOR shall and hereby does
-------------------
indemnify LESSEE and hold LESSEE harmless from and against any and all expense,
loss, and liability suffered by LESSEE (with the exception of those expenses,
losses, and liabilities arising from LESSEE'S own negligence or willful act), by
reason of the improper storage, generation, handling, treatment, transportation,
disposal, or arrangement for transportation or disposal, of any Hazardous
Substances (whether accidental, intentional, or negligent) or by reason of the
violation of any Environmental Law by LESSOR or its agents, but excluding those
matters pursuant to which LESSEE has indemnified LESSOR pursuant to Section
16.04 above. Such expenses, losses and liabilities shall include, without
limitation, (i) any and all expenses that LESSEE may incur to comply with any
Environmental Laws as a result of LESSOR'S or its agent's failure to
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comply therewith; (ii) any and all costs that LESSEE may incur in studying or
remedying any Contamination at or arising from the Land to the extent such
remedying is required by applicable law, (iii) any and all costs that LESSEE may
incur in studying, removing, disposing or otherwise addressing any Hazardous
Substances that LESSOR or its agents improperly stored, generated, handled,
treated, transported or disposed of or failed to remove from the Premises to the
extent the same is required by applicable law; (iv) any and all fines, penalties
or other sanctions assessed upon LESSEE by reason of LESSOR or its agent's
failure to comply with Environmental Laws; and (v) any and all legal and
professional fees and costs incurred by LESSEE in connection with the foregoing.
The indemnity contained herein shall survive the termination or expiration of
this Lease.
ARTICLE XVII
BROKERAGE PROVISIONS
--------------------
SECTION 17.01. NO BROKER. LESSOR and LESSEE represent and warrant that no
---------
broker, commission agent, real estate agent or salesman has participated in the
negotiation of this Lease, its procurement or in the procurement of LESSOR or
LESSEE except for Bruce Williams Properties, L.L.C. and CRE Services, L.L.C.,
who will be paid by LESSOR under a separate agreement and that no such person,
firm or corporation is or shall be entitled to the payment of any fee,
commission, compensation or other form of remuneration in connection herewith in
any manner. LESSOR and LESSEE shall and do hereby mutually indemnify and hold
harmless each other from and against any and all loss, cost, claim, damage or
expense (including court costs and reasonable attorneys' fees) arising from and
out of or in any manner connected with this Lease or
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any claim (meritorious or otherwise), demand or assertion which is in the nature
of a brokerage fee, commission or other compensation for services rendered. The
terms of this 17.01 shall survive any termination of this Lease.
ARTICLE XVIII
MISCELLANEOUS
-------------
SECTION 18.01. LESSOR LIABILITY. No owner of the Premises, whether or not
----------------
named herein, shall have liability hereunder after such owner ceases to hold
title to the Premises, except for obligations which may have theretofore
accrued. Neither LESSOR nor any officer, director, shareholder, partner or
principal, whether disclosed or undisclosed, of LESSOR shall be under any
personal liability with respect to any of the provisions of this Lease, and if
LESSOR is in breach or default with respect to LESSOR'S obligations or otherwise
under this Lease, LESSEE shall look solely to the equity of LESSOR in the
Premises and the Land and improvements thereon and the amount of any casualty or
condemnation proceeds paid to LESSOR for the satisfaction of LESSEE'S remedies.
It is expressly understood and agreed that LESSOR'S liability under the terms,
covenants, conditions, warranties and obligations of this Lease shall in no
event exceed the loss of LESSOR'S equity interest in the Premises and the Land
and improvements thereon and the amount of any casualty or condemnation proceeds
paid to LESSOR which are not applied as required by this Lease. Notwithstanding
anything in this Section 18.01 to the contrary, in no event shall the amount of
LESSOR'S equity in the Land and the improvements thereon be less than One
Million Dollars ($1,000,000.00).
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SECTION 18.02. WAIVER. Failure of LESSOR to insist upon the strict
------
performance by LESSEE of any term, condition or covenant on LESSEE'S part to be
performed pursuant to the terms of this Lease or to exercise any option, right,
power, or remedy of LESSOR contained in this Lease shall not be deemed to be nor
be construed as a waiver of such performance or relinquishment of such right now
or subsequent hereto. The receipt by LESSOR of any Rent or Additional Rental
required to be paid by LESSEE hereunder with knowledge of any default by LESSEE
hereunder shall not be deemed a waiver of such default. No waiver by LESSOR of
any provision of this Lease shall be deemed to have been made unless expressed
in writing and signed by LESSOR.
SECTION 18.03. WAIVER OF REDEMPTION. LESSEE hereby waives and surrenders
--------------------
any right or privilege under any present or future constitution, statute or law
to redeem the Premises or to continue this Lease after the termination of this
Lease for any reason, and the benefits of any present or future constitution,
statute or rule of law which exempts property from liability for debt or for
distress for rent.
SECTION 18.04. ESTOPPEL CERTIFICATES. Upon written request of LESSOR, but
---------------------
no more frequently than once in any twelve (12) month period, LESSEE shall from
time to time execute, acknowledge and deliver to LESSOR and to any mortgagee of
or prospective purchaser from LESSOR, a written certificate certifying (a) that
this Lease is unmodified and in full force and effect (or if there have been
modifications, that the Lease is in full force and effect as modified, and
stating the modifications), (b) the dates to which Rent and Additional Rental
payable by LESSEE hereunder have been paid, and (c) that no notice has been
received by LESSEE of any
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default by LESSEE hereunder which has not been cured, except as to any default
specified in said certificate.
Upon written request of LESSEE, but no more frequently than once in any
twelve (12) month period, LESSOR shall from time to time execute, acknowledge
and deliver to LESSEE a written certificate certifying (d) that this Lease is
unmodified and in full force and effect (or if there have been modifications,
that this Lease is in full force and effect as modified, and stating the
modifications), (e) the dates to which Rent and Additional Rental payable by
LESSEE hereunder have been paid, and (f) whether or not, to the knowledge of
LESSOR, there is then existing a default by LESSEE under this Lease (and if so,
specifying the same).
SECTION 18.05. NO MERGER OF TITLE. There shall be no merger of the
------------------
leasehold estate created by this Lease with the fee estate of LESSOR by reason
of the fact that the same person may own or hold both the leasehold estate
created by this Lease or any interest therein and the fee estate in the Premises
or any interest therein; and no such merger shall occur unless and until all
persons or entities (including any mortgagee with respect to the fee estate of
LESSOR) having any interest in the leasehold estate created by this Lease or the
fee estate in the Premises shall join in a written instrument effecting such
merger and shall duly record the same.
SECTION 18.06. MORTGAGEE'S RIGHTS. Subject to all the provisions of this
------------------
Section 18.06, this Lease may be either superior or subordinate to any
"Mortgage". The term "Mortgage", as used in this Lease, shall mean any and all
mortgages, deeds to secure debt, deeds of trust, or other instruments creating a
lien or conveying a security title at any time and from time to time, granted by
LESSOR and affecting or encumbering the title of LESSOR to the Premises or this
Lease. The term "Mortgagee" refers to the holder of the Mortgage. Any Mortgagee
may elect to have
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this Lease superior to its Mortgage by signifying such election in the Mortgage
or by separate recorded instrument. Upon request by any Mortgagee, LESSEE shall
execute and deliver a written instrument, in a form acceptable for recording in
the real estate records of Fulton County, Georgia, recognizing that this Lease
is superior to a Mortgage and that, upon foreclosure of or exercise of the power
of sale contained in the Mortgage, LESSEE shall recognize and attorn to the
purchaser at the foreclosure sale as the LESSOR under this Lease, subject to all
the terms and provisions of this Lease. If a Mortgage is subordinate to this
Lease, any person who becomes the holder of the interest of the LESSOR by virtue
of foreclosure of the Mortgage shall be subject to and bound by all the
provisions of this Lease. If a Mortgagee desires for this Lease to be
subordinate to its Mortgage, LESSEE agrees that it shall subordinate this Lease
by execution and delivery of the Subordination, Non-Disturbance and Attornment
Agreement attached to this Lease as Exhibit "F" and by this reference made a
----------
part hereof; provided, however, that such Agreement must be fully executed by
all parties thereto and properly recorded in the real estate records of Fulton
County, Georgia, such delivery being a condition precedent to LESSEE'S agreement
to subordinate. Such Subordination, Non-Disturbance and Attornment Agreement
shall provide any insurance proceeds shall be applied as set forth herein.
SECTION 18.07. SEPARABILITY. Each and every covenant and agreement
------------
contained in this Lease shall be for any and all purposes hereof construed as
separate and independent and the breach of any covenant by LESSOR shall not
discharge or relieve LESSEE from its obligation to perform each and every
covenant and agreement to be performed by LESSEE under this Lease. All rights,
powers and remedies provided herein may be exercised only to the extent that the
exercise thereof does not violate applicable law and shall be limited to the
extent necessary to
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render this Lease valid and enforceable. If any term, provision or covenant of
this Lease or the application thereof to any person or circumstance shall be
held to be invalid, illegal or unenforceable, by a court of last resort having
jurisdiction in the premises, the validity of the remainder of this Lease shall
not be affected; this Lease shall not terminate, and there shall be substituted
for such illegal, invalid or unenforceable provision a like provision which is
legal, valid and enforceable within the limits established by such court's final
opinion and which most nearly accomplishes and reflects the original intention
of the parties.
SECTION 18.08. NOTICES, DEMANDS AND OTHER INSTRUMENTS. All notices,
--------------------------------------
demands, requests, consents, and approvals desired, necessary, required or
permitted to be given pursuant to the terms of this Lease shall be in writing
and shall be deemed to have been properly given if personally delivered or sent,
postage prepaid, by first class registered or certified United States mail,
return receipt requested, addressed to each party hereto at the following
address:
LESSOR: 1600 Peachtree, L.L.C.
c/o Brogdon Consulting, Inc.
3525 Mall Boulevard
Suite 5FF
Duluth, Georgia 30136
LESSEE: Equifax Inc.
1600 Peachtree Street, NW
Atlanta, Georgia 30309
Attention: General Counsel
with a copy to: Equifax Inc.
1600 Peachtree Street, NW
Atlanta, Georgia 30309
Attention: Director of Corporate Real Estate
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with a copy to: William F. Timmons, Esq.
Long Aldridge & Norman LLP
5300 SunTrust Tower
303 Peachtree Street
Atlanta, Georgia 30308
or at such other address in the United States as LESSOR or LESSEE may from time
to time designate by like notice. Any such notice, demand, request or other
communication shall be considered given or delivered, as the case may be, on the
date of personal delivery or on the date of deposit in the United States mail as
provided above. Rejection or other refusal to accept or inability to deliver
because of changed address of which no notice was given shall be deemed to be
receipt of the notice, demand, request or other communication.
SECTION 18.09. SUCCESSORS AND ASSIGNS. Each and every covenant, term,
----------------------
condition and obligation contained in this Lease shall apply to and be binding
upon and inure to the benefit or detriment of the respective legal
representatives, heirs, successors and assigns of LESSOR and LESSEE. Whenever
reference to the parties hereto is made in this Lease, such reference shall be
deemed to include the legal representatives, successors, heirs and assigns of
said party the same as if in each case expressed. The term "person" when used
in this Lease shall mean any individual, corporation, partnership, firm, trust,
joint venture, business association, syndicate, government or governmental
organization or any other entity.
SECTION 18.10. HEADINGS. The headings to the various Articles and
--------
Sections of this Lease have been inserted for purposes of reference only and
shall not limit or define or otherwise affect the express terms and provisions
of this Lease.
SECTION 18.11. COUNTERPARTS. This Lease may be executed in any number of
------------
counterparts, each of which is an original, but all of which shall constitute
one instrument.
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SECTION 18.12. APPLICABLE LAW. This Lease shall be construed under and
--------------
enforced in accordance with the laws of the State of Georgia.
SECTION 18.13. ENTIRE AGREEMENT; AMENDMENTS. This Lease and the Lease
----------------------------
Termination Agreement dated of even date and each of the documents referred to
therein set forth the entire understanding and agreement of LESSOR and LESSEE
with respect to the Premises; all courses of dealing, usage of trade and all
prior representations, promises, understandings and agreements, whether oral or
written, are superseded by and merged into this Lease. No modification or
amendment of this Lease shall be binding upon LESSOR and LESSEE, or either of
them, unless in writing and fully executed.
SECTION 18.14. ALL GENDERS AND NUMBERS INCLUDED. Whenever the singular or
--------------------------------
plural number, or masculine, feminine, or neuter gender is used in this Lease,
it shall equally apply to, extend to, and include the other.
SECTION 18.15. TIME IS OF ESSENCE. Time is of the essence of this Lease.
------------------
Whenever a day certain is provided for the payment of any sum of money or the
performance of any act or thing, the same enters into and becomes a part of the
consideration for this Lease.
SECTION 18.16. SHORT FORM LEASE. LESSOR and LESSEE hereby agree that this
----------------
Lease shall not be recorded in the public records of Fulton County, Georgia.
LESSOR and LESSEE shall, contemporaneously with the execution hereof, execute a
Short Form Lease in the form attached hereto as Exhibit "D". The Short Form
-----------
Lease shall be filed for record with the Clerk of the Superior Court of Fulton
County, Georgia. Any and all recording cost and tax, if any, required in
connection with the recording of the Short Form Lease shall be at the sole cost
and expense of LESSEE.
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SECTION 18.17. WAIVER OF LIEN. Except as provided in this Section 18.17,
--------------
LESSOR does hereby waive any and all lien or claim of lien against LESSEE and
the property of LESSEE located on the Premises, arising from this Lease or the
relationship of LESSOR and LESSEE (including, without limitation, any lien
created pursuant to O.C.G.A. Section 44-14-341); provided, however, that except
as hereinafter provided, such waiver shall not extend to the tangible personal
property of LESSEE located on the Premises. Notwithstanding the foregoing, in
no event shall any such lien or claim of lien extend to any computers, computer
systems (including hardware, software and firmware), all data (including
proprietary data) stored on such systems, intellectual property, trade secrets,
confidential information and other proprietary information of LESSEE.
SECTION 18.18. EXPANSION. Subject to the terms and conditions set forth
---------
herein, LESSEE shall have the option from time to time to lease the space
located on the second and third floors of the building located immediately in
front of the building in which the Premises is located (such building being
hereinafter referred to as "Building B"), but excluding the space currently
utilized as the cafeteria (such expansion space is hereinafter referred to as
the "Additional Space") upon the same terms and conditions as this Lease except
that the term thereof must end, at LESSEE's option, either on March 31, 2004 or
the date upon which the Term of this Lease expires. LESSOR shall provide LESSEE
with (a) a copy of any letter of intent that is executed with any prospective
tenant of the Additional Space (or if no such letter of intent is executed by
LESSOR, then a copy of the proposed draft of the lease for such space) or (b) a
copy of a negotiated letter of intent with a prospective tenant of the
Additional Space with terms that appear to be acceptable to such prospective
tenant, together in any event with a notice
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stating that such notice is delivered pursuant to this Section 18.18. LESSEE
shall notify LESSOR, in writing, within ten (10) days of receipt of such notice
that LESSEE elects to lease the Additional Space. LESSEE's failure to timely
respond in writing shall constitute a waiver of LESSEE's option to lease such
space. In the event that LESSOR fails to execute a lease for the Additional
Space with such prospective tenant within one hundred twenty (120) days of
receipt of such notice by LESSEE, then LESSEE's option shall be reinstated with
respect to the Additional Space. In the event that LESSEE elects to lease any
Additional Space, LESSEE and LESSOR shall execute and deliver an amendment to
the Lease increasing the number of square feet constituting the Premises by the
amount of the Additional Space, and otherwise subjecting the Additional Space to
the same terms and conditions of the Lease as currently in effect, including but
not limited to a provision providing that Rent for the Additional Space shall be
the same rent per square foot as currently in effect under the Lease (as the
same may be increased as provided in the Lease). Rent payment for any Additional
Space shall begin upon the first to occur of (a) occupancy of such Additional
Space by LESSEE for the purposes of conducting business or (b) 90 days after the
exercise by LESSEE of the expansion option. In the event that LESSOR notifies
LESSEE of its intention to lease the Additional Space within Building B as
provided in this Section 18.18, and the third and fourth floors of the building
located immediately in front of Building B (such building is hereinafter
referred to as "Building A") is unleased, and the LESSEE elects not to take the
Additional Space within Building B, then for the purposes hereof the Additional
Space shall thereafter mean the third and fourth floors of Building A.
Notwithstanding anything herein to the contrary, in the event that the space to
be leased to a prospective tenant constitutes all of Building A and Building B,
then in order to exercise the expansion option
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granted herein, LESSEE must elect to lease all of such space, or in the event
that the space to be leased to any prospective tenant constitutes all of the
Additional Space and any other space within Building A or Building B, then in
order or exercise the expansion option granted herein, LESSEE must elect to
lease all of such space which such prospective tenant proposes to lease.
IN WITNESS WHEREOF, LESSOR and LESSEE have executed this Lease, have
affixed their seals hereunto and have delivered same, all in duplicate (or
triplicate) original, at Atlanta, Georgia as of the day and year first above
written.
"LESSOR"
1600 Peachtree, L.L.C.
By: Gwinnett Prado, L.P., a Manager and Member
By: Prado Manager, Inc., its sole general
partner
By: /s/ D. Scott Hudgens, Jr.
-----------------------------
D. Scott Hudgens, Jr.
President
[CORPORATE SEAL]
By: /s/ Herman J. Russell [SEAL]
----------------------------------
Herman J. Russell
A Manager and Member
"LESSEE"
EQUIFAX INC.
By: ______________________________________
Name:____________________________
Title:_________________________________
[CORPORATE SEAL]
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EXHIBITS
--------
Exhibit "A" Description of Premises
Exhibit "B" Permitted Encumbrances
Exhibit "C" Building Standard Services
Exhibit "D" Short Form Lease
Exhibit "E" Competitor List
Exhibit "F" Subordination, Non-Disturbance and Attornment Agreement
Exhibit "G" Description of Access Area
Exhibit "H" Current Cafeteria Equipment
Exhibit "I" Legal Description of Land
<PAGE>
EXHIBIT "A"
-----------
DESCRIPTION OF PREMISES
<PAGE>
EXHIBIT "B"
-----------
PERMITTED TITLE EXCEPTIONS
<PAGE>
EXHIBIT "C"
-----------
BUILDING STANDARD SERVICES
LESSOR shall furnish the following services to LESSEE during the period
required by Section 5.02 of the Lease (the "Building Standard Services"):
(a) Hot and cold domestic water and common-use rest rooms and sinks and
toilets at locations provided for general use as reasonably deemed by LESSOR to
be in keeping with the existing standards of the Premises.
(b) Central heat and air conditioning in season, at such temperatures and
in such amounts as are reasonably deemed by LESSOR to be in keeping with the
first-class standards of the Premises. Such heating and air conditioning shall
be furnished 24 hours a day, seven days a week, 52 weeks per year.
(c) Electric lighting service for all public areas and special service
areas of the Premises and Common Facilities in the manner and to the extent
reasonably deemed by LESSOR to be in keeping with the first-class standards of
the Premises.
(d) Janitor service shall be provided seven (7) days per week, after
midnight, in a manner that LESSOR reasonably deems to be consistent with the
first-class standards of the Premises. (See Schedule 1 hereto) In addition,
----------
the carpet shall be cleaned once each year of the lease Term.
(e) Security services for the Premises comparable as to coverage, control
and responsiveness (but not necessarily as to means for accomplishing same) to
the level provided as of the commencement of the Term; provided, however, LESSOR
shall have no responsibility to prevent, and shall not be liable to LESSEE for,
any liability or loss to LESSEE, its agents, employees and visitors arising out
of losses due to theft, burglary, damage or injury to persons or property caused
by persons gaining access to the Premises, and LESSEE hereby releases LESSOR
from all liability for such losses, damages or injury. [One additional security
guard will be on duty from 5:30 p.m. to 12:00 midnight, 7 days per week, 52
weeks per year.]
(f) Sufficient electrical capacity to operate (i) incandescent lights,
typewriters, calculating machines, photocopying machines and other machines of
the same low voltage electrical consumption (120/208 volts), provided that the
total rated electrical design load for said lighting and machines of low
electrical voltage shall not exceed 3 watts per square foot of rentable area;
and (ii) lighting (277/480 volts), provided that the total rated electrical
design load for said lighting shall not exceed 2 watts per square foot of
rentable area (each such rated electrical design load to be hereinafter referred
to as the "Building Standard Rated Electrical Design Load"). LESSOR acknowledges
that LESSEE will have the use of the electrical outlets beyond the standard
Building Operating Hours.
<PAGE>
Should LESSEE's total rated electrical design load exceed the building
Standard Rated Electrical Design Load for either low or high voltage electrical
consumption, or if LESSEE's electrical design requires low voltage or high
voltage electrical consumption, or if LESSEE's electrical design requires low
voltage or high voltage circuits in excess of LESSEE's share of the Building
Standard circuits, LESSOR will (at LESSEE's expense) install such additional
circuits and associated high voltage panels and/or additional low voltage panels
with associated transformers (which additional circuits, panels and transformers
shall be hereinafter referred to as the "Additional Electrical Equipment"). If
the Additional Electrical Equipment is installed because LESSEE's low or high
voltage rated electrical design load exceeds the applicable Building Standard
Rated Electrical Design Load, then a meter shall also be added (at LESSEE's
expense) to measure the electricity used through the Additional Electrical
Equipment.
The design and installation of any Additional Electrical Equipment (or any
related meter) required by LESSEE shall be subject to the prior approval of
LESSOR (which approval shall not be unreasonably withheld). All expenses
incurred by LESSOR in connection with the review and approval of any Additional
Electrical Equipment shall also be reimbursed to LESSOR by LESSEE. LESSEE shall
also pay on demand the actual metered cost of electricity consumed through the
Additional Electrical Equipment (if applicable), plus any actual accounting
expenses incurred by LESSOR in connection with the metering thereof.
If any of LESSEE's electrical equipment required conditioned air in excess
of Building Standard air conditioning, the same shall be installed by LESSOR (on
LESSEE's behalf), and LESSEE shall pay all design, installation, metering and
operating costs relating thereto.
If LESSEE requires that certain areas within LESSEE's Demised Premises must
operate in excess of the normal Business Operating Hours, 8:00 a.m. to 6:00
p.m., Monday through Fridays (the "Standard Building Operating Hours"), the
electrical service to such areas shall be separately circuited and metered (at
LESSEE's expense) or separately calculated, such that LESSEE shall be billed the
costs associated with electricity consumed during hours other than Building
Operating Hours.
All normal electrical Building Standard Services will be available to
LESSEE 24 hours a day, seven days a week, 52 weeks a year.
(g) All Building Standard fluorescent bulb replacement in all areas and all
incandescent bulb replacement in public areas, toilet and restroom areas and
stairwells.
<PAGE>
EXHIBIT "D"
-----------
SHORT FORM LEASE
<PAGE>
EXHIBIT "E"
-----------
COMPETITOR LIST
All of the following and their respective directly owned subsidiaries:
TRW Information Services, Inc. (and TRW, Inc., its parent)
TransUnion (TU)
Computer Sciences Corporation (CSC)
Dun & Bradstreet (D&B)
First Financial Management Corp. (FFMC), (includes Telecheck NABANCO)
EDS (and General Motors Corp., its parent)
Total Systems Services, Inc.
First Data Resources (FDR)
Policy Management Systems Corp. (PMSC)
Hooper Holmes
Pinkerton
National Processing Co. (NPC)
Deluxe Check Printers (including SCAN)
Fair, Issac & Co.
National Data Corp.
CYCARE, Inc.
ENVOY
DATEQ
Continuum
Creditel
EMSI
PAYCO American Corp.
Olsten's Temporary
CCN (and Great Universal Stores, its parent)
Grattan, PLC
Next PLC
<PAGE>
EXHIBIT "F"
-----------
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
<PAGE>
EXHIBIT "G"
-----------
DESCRIPTION OF ACCESS AREA
<PAGE>
EXHIBIT "H"
-----------
CURRENT CAFETERIA EQUIPMENT
<PAGE>
EXHIBIT "I"
-----------
LEGAL DESCRIPTION OF LAND
<PAGE>
EXHIBIT 13.1
SUMMARY OF SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
(dollars in thousands, except per share amounts)
- -----------------------------------------------------------------------------------------------------------------------------
Year ended December 31 1997 1996 1995 1994 1993 1992
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
Operating revenue $ 1,366,087 $ 1,222,798 $ 1,105,309 $ 968,660 $ 813,235 $ 724,030
Operating costs and expenses
before unusual items 1,042,179 955,897 883,405 770,779 649,135 584,204
Unusual items (25,000) (10,313) 9,243 - (48,438) -
- -----------------------------------------------------------------------------------------------------------------------------
Operating income 298,908 256,588 231,147 197,881 115,662 139,826
Other income, net 45,027 22,400 7,335 8,643 3,881 7,474
Interest expense (20,797) (16,439) (15,342) (12,986) (8,742) (3,031)
- -----------------------------------------------------------------------------------------------------------------------------
Income from continuing
operations before income
taxes and cumulative effect
of accounting change 323,138 262,549 223,140 193,538 110,801 144,269
Provision for income taxes 137,613 109,452 90,355 79,804 48,525 59,056
- -----------------------------------------------------------------------------------------------------------------------------
Income from continuing
operations before
cumulative effect of
accounting change 185,525 153,097 132,785 113,734 62,276 85,213
Discontinued operations, net
of income taxes 1,449 24,520 14,865 6,612 1,239 133
Cumulative effect of
accounting change, net
of income taxes * (3,237) - - - - -
- -----------------------------------------------------------------------------------------------------------------------------
Net income $ 183,737 $ 177,617 $ 147,650 $ 120,346 $ 63,515 $ 85,346
- -----------------------------------------------------------------------------------------------------------------------------
Dividends paid $ 52,030 $ 49,704 $ 50,223 $ 47,161 $ 42,041 $ 42,770
PER COMMON SHARE (basic)
Income from continuing
operations before
cumulative effect of
accounting change $ 1.29 $ 1.05 $ 0.88 $ 0.77 $ 0.41 $ 0.52
Discontinued operations 0.01 0.17 0.10 0.04 0.01 -
Cumulative effect of
accounting change (0.02) - - - - -
- -----------------------------------------------------------------------------------------------------------------------------
Net income $ 1.27 $ 1.22 $ 0.98 $ 0.81 $ 0.42 $ 0.52
- -----------------------------------------------------------------------------------------------------------------------------
Weighted average common
shares outstanding
(basic) 144,233,000 145,518,000 151,357,000 148,608,000 150,114,000 163,918,000
PER COMMON SHARE (diluted)
Income from continuing
operations before
cumulative effect
of accounting change $ 1.26 $ 1.03 $ 0.86 $ 0.75 $ 0.41 $ 0.52
Discontinued operations 0.01 0.16 0.10 0.04 0.01 -
Cumulative effect of
accounting change (0.02) - - - - -
- -----------------------------------------------------------------------------------------------------------------------------
Net income $ 1.24 $ 1.19 $ 0.96 $ 0.79 $ 0.42 $ 0.52
- -----------------------------------------------------------------------------------------------------------------------------
Weighted average common
shares outstanding (diluted) 147,818,000 149,207,000 154,375,000 150,691,000 151,631,000 164,746,000
Dividends per share $ 0.345 $ 0.330 $ 0.315 $ 0.303 $ 0.280 $ 0.260
BALANCE SHEET DATA
(at December 31)
Total assets - continuing
operations $ 1,177,104 $ 1,011,104 $ 871,489 $ 836,728 $ 629,318 $ 621,322
Total assets $ 1,177,104 $ 1,207,518 $ 976,173 $ 934,832 $ 643,279 $ 638,375
Long-term debt $ 339,301 $ 304,942 $ 302,665 $ 211,962 $ 200,070 $ 191,749
Shareholders' equity $ 349,397 $ 424,950 $ 353,465 $ 361,935 $ 254,031 $ 257,990
Common shares outstanding 142,609,000 144,876,000 147,245,000 151,790,000 149,618,000 151,550,000
OTHER INFORMATION
(at December 31)
Stock price per share ** $35.44 $27.41 $19.13 $11.80 $12.25 $9.23
Book value per share $2.45 $2.93 $2.40 $2.38 $1.70 $1.70
Market capitalization ** $ 5,053,706 $ 3,970,444 $ 2,816,061 $ 1,790,667 $ 1,832,821 $ 1,399,413
Employees - continuing
operations 10,000 9,500 9,800 9,600 8,000 7,500
* The 1997 accounting change relates to EITF No. 97-13 regarding accounting for business process reengineering costs.
** Stock prices and market capitalization have been restated to reflect the spinoff of ChoicePoint.
</TABLE>
<PAGE>
EXHIBIT 13.2
1997 ANNUAL REPORT MD&A
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
This discussion and analysis should be read in conjunction with the consolidated
financial statements and accompanying notes.
RESULTS OF OPERATIONS.
On August 7, 1997, the Company completed the spinoff of its Insurance Services
industry segment, "ChoicePoint" (Note 2). Accordingly, the results of
operations information presented below reflect only the continuing operations of
the Company.
Consolidated revenue for the year was $1.37 billion, an increase of $143.3
million or 11.7% over 1996. This increase is more than the 10.6% increase in
1996, despite the divestitures of the health information services businesses in
1996 and National Decision Systems in 1997. Excluding these divestitures,
revenue increased 19.3% in 1997 and 15.3% in 1996 with acquisitions contributing
about 10.6 and 3.4 percentage points, respectively, of the increases. Revenue
growth in 1997 benefited from the performances of Card Services, Credit
Information and Marketing Services, and Equifax Europe, as well as
acquisitions.
Operating income of $298.9 million increased $42.3 million in 1997. Excluding a
$25.0 million expense charge in the fourth quarter of 1997 related to the
pending acquisition of the collections business from Computer Sciences
Corporation (Note 11) and a $10.3 million write-off in the second quarter of
1996 related to an asset impairment (Note 5), operating income improved 21.4%,
from $266.9 million in 1996 to $323.9 million in 1997. In 1996, operating
income before unusual items increased $45.0 million or 20.3% versus 1995.
The improvements in both years are the result of revenue increases in the higher
margin businesses, continued operating leverage in Equifax Europe and Latin
America and continuing expense controls throughout the organization. The 1997
increase was also aided by acquisitions while the 1996 increase benefited by
lower losses within Health Information Services as well as the recognition of
revenue from a lottery subcontract (Note 6). The impact of acquisitions and
divestitures increased 1997 operating income about 4.6 percentage points and
decreased 1996 operating income by 1.5 percentage points.
The operating income margin in 1997 was 23.7% compared to 21.8% in 1996,
excluding the unusual charges. The gains in 1997 were achieved despite very
competitive conditions both domestically and internationally, investments in
integrating acquisitions and new products, as well as time and effort required
by management relating to the spinoff.
During the second quarter of 1997, the Company's National Decision Systems
business unit was sold resulting in a gain of $42.8 million ($17.9 million after
tax, or $.12 per share). During the fourth quarter, Equifax recorded a $25.0
million expense charge ($15.0 million after tax, or $.10 per share) in
connection with its upcoming purchase of Computer Science Corporation's
collections business. This charge reflects valuation differences on this
pending acquisition.
The fourth quarter's results were also affected by a nonrecurring after-tax,
noncash charge of $3.2 million or $.02 per share related to a new accounting
rule established by the Financial Accounting Standards Board Emerging Issues
Task Force on November 20, 1997. This rule, EITF Issue No. 97-13, requires
certain components of computer system development projects to be expensed as
they are incurred, and also requires that any unamortized amounts previously
capitalized be written off in the current period (Note 3).
1
<PAGE>
Diluted earnings per share from continuing operations (excluding the 1997
nonrecurring gain, unusual charge and accounting change mentioned above)
increased 20.4% to $1.24 in 1997 from $1.03 in 1996. Net income from continuing
operations (before the nonrecurring gain, unusual charge and accounting change)
was $182.6 million in 1997, an increase of 19.3% over 1996's net income from
continuing operations of $153.1 million. Higher diluted earnings per share
increases relative to net income increases reflect the Company's repurchase of
common shares during 1997. For the year, the average diluted shares outstanding
declined approximately 1% as a result of Equifax's share repurchase plan.
There are five reporting segments: North American Information Services, Payment
Services, Equifax Europe, Equifax Latin America and Other. These segments were
revised in 1997 to more closely follow the Company's internal management
organization. Other is primarily comprised of the health information services
businesses, which were divested during the fourth quarter of 1996, and the
lottery subcontract. 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 13 breaks out the segment results by quarter for
1997 and 1996.
NORTH AMERICAN INFORMATION SERVICES.
(In millions)
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Revenue $709.0 $668.8 $594.4
Operating income* $241.6 $220.4 $196.9
</TABLE>
*before valuation loss on pending acquisition of $25.0 million in 1997 (Note 11)
and restructuring charge of $5.0 million in 1995 (Note 12)
North American Information Services comprises Credit Services, Risk Management
Services, Mortgage Services, Canadian Operations, as well as National Decision
Systems (divested in May 1997). Revenue growth in North American Information
Services was 6.0% in 1997, compared to 12.5% in 1996. Excluding divestitures,
revenue increased 10.4% in 1997 and 13.1% in 1996, with 5.1 and 2.8 percentage
points of the increases attributable to acquisitions, respectively.
U.S. Credit Services showed a revenue increase of 8.4% in 1997, driven by volume
growth of banking and telecommunications customers, growth in credit marketing
services, and acquisitions. Average prices for credit reports were relatively
stable in 1997, versus a decline in 1996. The decline in 1996, however, was
more than offset by continued volume growth. Pricing pressures are expected to
persist, but volume growth is expected to continue to more than offset price
declines. During 1997, management restructured the organization to focus on its
customers by industries and established the following vertical markets: banking,
finance, retail, telecommunications and utilities, and healthcare
administration. This focus on customers by vertical markets, as well as the
continual introduction of new services and products contributed to revenue
growth in 1997 and is expected to continue adding to growth in 1998.
Revenue in U.S. Risk Management Services increased 18.1% due primarily to new
business from customers outsourcing the accounts receivable management function
of their businesses.
Revenue in Mortgage Services declined 9.0% for the year due primarily to the
continuing shift to the Company's lower-priced, automated product.
Canadian revenue was up 17.6% in 1997, as a result of 1996 acquisitions and
increases in credit report unit volumes which were partially offset by average
price declines. Excluding acquisitions, in local currency, revenue was
approximately level between years, as a 6.1% gain in credit reporting services
was offset by a decline in collection services.
2
<PAGE>
Excluding a $25.0 million unusual charge in 1997 related to a pending
acquisition (Note 11) and a $5.0 million restructuring charge in 1995 (Note 12),
operating income for North American Information Services increased 9.6% in 1997,
following an 11.9% increase in 1996, due primarily to revenue growth across most
of its businesses. This segment's operating margin increased due to operating
leverage in all businesses as well as the sale of National Decision Systems.
PAYMENT SERVICES.
<TABLE>
<CAPTION>
(In millions)
1997 1996 1995
<S> <C> <C> <C>
Revenue $440.0 $339.3 $284.4
Operating income* $81.2 $66.9 $64.0
</TABLE>
*before restructuring charge of $0.5 million in 1995
(Note 12)
Payment Services consists of Card Services, Check Services and FBS Software.
Payment Services revenue increased 29.7% in 1997, with about 18 percentage
points of the revenue increase attributable to the fourth quarter 1996
acquisition of CSG Card Services. Card Services 1997 revenue increased 54.6%,
with about 34.9 percentage points of the increase attributable to the CSG
acquisition. Check Services revenue increased 4.5%, while FBS Software revenue
was relatively level. In 1996, Payment Services revenue increased 19.3% with
2.4 percentage points attributable to acquisitions. Card Services 1996 revenue
increased 28.0% over 1995, while Check Services revenue increased 4.1%, and FBS
Software revenue more than doubled.
Exclusive of the CSG acquisition, growth within Card Services in 1997 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. Growth in 1997 was also attributed to volume and new
account growth from existing customers.
Check Services has shown more modest growth in recent years due to slower
industry growth as well as increasing sales of our lower-priced verification
product, PathWays(R). As a result of this product introduction, Check Services
retained targeted customers by offering an alternative to the warranty product.
The dollar amount of checks warranted or verified by Check Services was $15.8
billion in 1997 versus $14.1 billion in 1996.
Payment Services operating income increased $14.3 million in 1997 versus a $2.9
million increase in 1996. The 1997 increase in operating income was largely
attributable to the revenue growth in Card Services as well as the absence of
moving expenses which occurred in 1996. 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. Excluding these expenses, 1996
operating income increased by $8.0 million, or 12.5% versus 1995, 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 35.1% in 1997, benefiting from
strong revenue growth. The CSG acquisition was modestly positive to this
segment's operating income growth. Beginning mid-1998, Card Services is
expected to realize additional operating leverage from this acquisition, after
all the card accounts have been converted to Equifax's card processing system
and the Company begins to recognize the synergies from this acquisition.
Operating income in Check Services declined by 4.7%, a result of higher customer
service and support expenses as well as the customer mix.
3
<PAGE>
EQUIFAX EUROPE.
<TABLE>
<CAPTION>
(In millions)
<S> <C> <C> <C>
1997 1996 1995
Revenue $178.6 $157.5 $132.1
Operating income $27.1 $15.7 $4.7
</TABLE>
Equifax Europe consists of operations primarily in the United Kingdom as well as
joint ventures in Spain and Portugal. In 1997, revenue increased by 13.4%
primarily due to volume increases in U.K. Consumer and Business Credit Services
and improved performance across all industry groups.
Revenue from Equifax Europe increased 19.2% in 1996. This was attributable
primarily to increased consumer credit volumes, marketing services and auto lien
information, as well as the inclusion of the full year results of a 1995
acquisition.
Operating income for Equifax Europe increased $11.5 million in 1997 and $11.0
million in 1996. These increases resulted primarily from increased revenue and
the operating leverage obtained from the continued integration of 1994 and 1995
acquisitions.
EQUIFAX LATIN AMERICA.
<TABLE>
<CAPTION>
(In millions)
<S> <C> <C> <C>
1997 1996 1995
Revenue $28.8 $0 $0
Operating income $9.2 $3.3 $1.0
</TABLE>
Equifax Latin America consists of the leading credit information companies in
Chile, DICOM, as well as Argentina, VERAZ, and a developing operation in Mexico.
In the second quarter of 1997, Equifax acquired the remaining 50% of DICOM S.A.
in Chile which accounts for the entire increase in revenue of $28.8 million in
1997. Prior to 1997, Equifax did not have a controlling interest in any of its
Latin American joint ventures and therefore did not record any revenue since the
investments were accounted for under the equity method of accounting. During
the fourth quarter of 1997, the Company increased its ownership interest in
VERAZ from 33.3% to 66.7%, but did not obtain the control necessary to
consolidate their operations until early 1998. Accordingly the Company
accounted for VERAZ as an equity investment in 1997, but will recognize revenue
and consolidate VERAZ beginning in 1998. VERAZ's 1997 revenue was approximately
$22 million.
Operating income of $9.2 million increased $6.0 million versus 1996. This
increase is attributable to the improved performance of all operations, as well
as the ownership increase in Chile. These gains were partially offset by the
increased investment in Mexico. The Mexican operations are not expected to be
significant in the near term, and will require continued moderate investment
over the next few years.
4
<PAGE>
OTHER.
<TABLE>
<CAPTION>
(In millions)
<S> <C> <C> <C>
1997 1996 1995
Revenue $9.6 $57.2 $94.5
Operating income (loss)* $8.9 $0.5 $(12.7)
</TABLE>
*excludes a $10.3 million loss related to the write-off of certain intangible
assets within Health Information Services (Note 5) in 1996, and income from
lottery settlement of $19.7 million (Note 6) and restructuring charge of $4.4
million in 1995
(Note 12)
This segment comprises HISI, the lottery subsidiary and the health information
businesses which the Company divested in the fourth quarter of 1996. After
adjusting for the effect of the health information divestitures, HISI's revenues
were up $4.2 million or 78.4%. The changes in HISI's revenue resulted from the
Company's recognition of $5.0 million in revenue in the first quarter of 1996 in
conjunction with its $58 million subcontracting agreement with GTECH. The
remaining $53 million was recorded as deferred revenue on the balance sheet and
beginning in December 1996 is being recognized over a 66 month term, and
resulted in an additional $.4 million revenue in 1996, and $9.6 million in
revenue in 1997.
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 businesses 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 of 1996, 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, particularly in light of the changing
trends within the healthcare industry. During the third quarter of 1995,
Equifax sold Elrick & Lavidge and Quick Test, two marketing services companies,
to better focus on its core businesses.
This segment's operating income in 1997 was $8.9 million versus an operating
loss of $9.8 million in 1996. Excluding a $10.3 million second quarter 1996
expense related to asset impairments (Note 5), operating income for this segment
increased $8.4 million in 1997 due primarily to the divestiture of the health
information businesses. Excluding the asset impairment expense in 1996, a $4.4
million restructuring change in 1995 (Note 12) and a $19.7 million lottery
settlement (Note 6), 1996 operating income improved $13.2 million over 1995.
This improvement related to results from the lottery subsidiary, as well as a
reduction in the operating losses incurred by health information businesses
prior to their divestitures.
GENERAL CORPORATE EXPENSE.
<TABLE>
<CAPTION>
(In millions)
<S> <C> <C> <C>
1997 1996 1995
Expense* $44.1 $39.7 $32.0
</TABLE>
*before restructuring charge of $0.5 million in 1995
(Note 12)
General corporate expense increased $4.4 million in 1997 due primarily to higher
international development costs and supplemental retirement expenses. The
increase of $7.8 million in 1996 was 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.
5
<PAGE>
OTHER INCOME, INTEREST EXPENSE AND
EFFECTIVE INCOME TAX RATES.
<TABLE>
<CAPTION>
(In millions)
<S> <C> <C> <C>
1997 1996 1995
Other income, net $45.0 $22.4 $7.3
Interest expense $20.8 $16.4 $15.3
Effective income tax rate* 42.6% 41.7% 40.5%
</TABLE>
*on income from continuing operations before accounting change
Other income increased $22.6 million in 1997 over 1996. The increase in other
income in 1997 was due to a $42.8 million gain recorded in the second quarter of
1997 related to the sale of National Decision Systems (Note 5).
Other income increased $15.1 million in 1996 over 1995 primarily as a result of
an $11.6 million gain on the sale of the health information businesses 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 in both years reflects the higher levels of
borrowing due to acquisitions and share repurchases.
The increase in the effective income tax rates in 1997 and 1996 resulted
primarily from non-deductible goodwill related to the second quarter, 1997, sale
of National Decision Systems and the fourth quarter, 1996, sale of two health
information companies.
Exclusive of the tax impact of the health information divestitures, 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 1998 is expected to approximate 40%, with the
decline from 1997's rate due to the tax impact of non-deductible goodwill
related to the 1997 divestiture of National Decision Systems.
FINANCIAL CONDITION.
The Company's financial condition remained strong during 1997. Net cash
provided by operations decreased from $271.0 million to $210.1 million primarily
due to the first quarter 1996 receipt of $58 million related to a lottery
subcontract and the timing of payments between years for income taxes and
certain other accrued expenses. Normal capital expenditures and dividend
payments were met with these internally generated funds.
Other significant outlays in 1997 included $129.1 million of treasury stock
purchases and $115.5 million for acquisitions and equity investments. These
items were principally financed by the $81.0 million in net proceeds from the
sale of National Decision Systems, $82.7 million in cash provided by
discontinued operations, and excess cash from operations. Significant 1997
transactions with ChoicePoint related to the spinoff included:
> The Company transferred $29 million of its
long-term debt to ChoicePoint.
> The Company made a $13 million capital
contribution to ChoicePoint.
> ChoicePoint repaid its July 31, 1997
intercompany liability to the Company
totaling $85.6 million.
6
<PAGE>
Capital expenditures for 1997, exclusive of acquisitions, were $86.0 million.
Capital expenditures for 1998 are expected to be about $115 million due to
continued investment in products and services and system enhancements,
additional projects to improve processes, investments in international
development, and capital expenditures associated with acquisitions. Budgeted
capital expenditures are expected to be met with internally generated funds.
During 1997, the Company's Board of Directors authorized an additional $300
million for future share repurchases of the Company's common stock. As of
December 31, 1997, approximately $223 million remained available under these
authorizations for future purchases.
In 1997, the Company increased its revolving credit facility with its bank group
from $550 million to $750 million. At December 31, 1997, $625 million was
available under this facility to fund future capital requirements, including the
possible purchase of the CSC credit reporting businesses (Note 11). Management
believes 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.
YEAR 2000 INFORMATION.
The widespread use of computer software that relies on two digits, rather than
four digits, to define the applicable year may cause computers and computer-
controlled systems to malfunction when processing data across the year 2000
date. In view of the potential adverse impact of this "year 2000" issue on its
business, operations, and financial condition, the Company has established a
central function to coordinate and report on a continuing basis with regard to
the assessment, remediation planning, and plan implementation processes of the
Company directed to "year 2000."
The Company is continuing its assessment of the impact of "year 2000" across its
business and operations, including its customer and vendor base. Further, the
Company continues to develop and implement remediation plans pursuant to
established processes to avoid, or in some instances reduce to an acceptable
level, any adverse impact of "year 2000" on its business and operations.
The Company is devoting the resources necessary to achieve a level of readiness
that will meet its "year 2000" challenges in a timely manner. Further, the
Company believes its assessment, remediation planning, and plan implementation
processes will be effective to achieve "year 2000" readiness.
In 1997, Equifax expensed approximately two cents per share in connection with
"year 2000" assessment, remediation planning, and plan implementation. The
Company plans to expense approximately eight cents per share in 1998 as it
expands and accelerates its activities in connection with its efforts to achieve
"year 2000" readiness in advance of 2000. The company anticipates that most of
its remaining costs allocable to the remediation of its critical software
systems will be expensed in 1998. Pending completion of its "year 2000"
assessments, the Company cannot as yet estimate precisely the costs remaining
after 1998 to achieve "year 2000" readiness, but does not expect those costs to
be material.
FORWARD-LOOKING INFORMATION.
The management's discussion and analysis, and other portions of this Annual
Report, include "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 1998, volume and pricing trends,
cost control measures and their results, the Company's expectations as to
funding its capital expenditures and operations during 1998, 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 year of record financial performance in 1998.
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 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.
7
<PAGE>
The Company will also need to continue its focus on cost containment.
Important factors that either individually or in the aggregate 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 Company's realization of cost control and synergies
from integration of acquisitions at levels lower than expected; risks associated
with investments and operations in foreign countries, including regulatory
environments, exchange rate fluctuations and local political, social and
economic factors; the extent to which the Company will continue its successful
development and marketing of new products and services to existing and new
industries; material changes in regulatory environments; the Company incurring
higher than expected costs to achieve, or not achieving, "year 2000" readiness,
or the failure of Company vendors or customers to timely achieve "year 2000"
readiness, in a manner that has a material adverse impact on the business,
operations or financial results of the Company; a drastic negative change in
market conditions; or other unforeseen difficulties.
8
<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, 1997 and 1996 and the
related consolidated statements of income, shareholders' equity, and cash flows
for each of the three years in the period ended December 31, 1997. 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
misstatement. 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, 1997 and 1996 and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 1997 in
conformity with generally accepted accounting principles.
/s/ Arthur Andersen LLP
Atlanta, Georgia
February 19, 1998
<PAGE>
EXHIBIT 13.3
EQUIFAX INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(In thousands)
-----------------------------------------------------------------------------------
December 31 1997 1996
-----------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 52,251 $ 48,160
Accounts receivable, net of allowance for doubtful
accounts of $6,188 in 1997 and $6,136 in 1996 270,665 227,540
Deferred income tax assets 39,221 33,016
Other current assets 38,795 36,392
----------- -----------
Total current assets 400,932 345,108
----------- -----------
Property and Equipment:
Land, buildings and improvements 24,870 18,739
Data processing equipment and furniture 194,553 191,302
----------- -----------
219,423 210,041
Less accumulated depreciation 124,689 123,177
----------- -----------
94,734 86,864
----------- -----------
Goodwill 365,427 313,760
----------- -----------
Purchased Data Files 103,282 84,025
----------- -----------
Other Assets 212,729 181,347
----------- -----------
Net Assets of Discontinued Operations -- 196,414
----------- -----------
$1,177,104 $1,207,518
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
<PAGE>
EQUIFAX INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(In Thousands)
- ---------------------------------------------------------------------------------------------------
December 31 1997 1996
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term debt and current maturities of long-term debt $ 12,984 $ 59,563
Accounts payable 94,682 71,801
Accrued salaries and bonuses 26,404 27,682
Income taxes payable 13,827 18,321
Other current liabilities 179,712 152,348
---------- ----------
Total current liabilities 327,609 329,715
---------- ----------
Long-Term Debt, Less Current Maturities 339,301 304,942
---------- ----------
Long-Term Deferred Revenue 42,848 42,964
---------- ----------
Other Long-Term Liabilities 117,949 104,947
---------- ----------
Commitments and Contingencies (Note 11)
Shareholders' Equity:
Common stock, $1.25 par value; shares
authorized - 300,000; issued - 172,465 in 1997
and 170,859 in 1996; outstanding - 142,609 in
1997 and 144,876 in 1996 215,581 213,573
Preferred stock, $0.01 par value; shares
authorized - 10,000; issued and outstanding -
none in 1997 or 1996 -- --
Paid-in capital 244,496 207,142
Retained earnings 415,149 396,340
Cumulative foreign currency translation adjustment (13,684) (3,913)
Treasury stock at cost, 23,304 shares in 1997
and 19,430 shares in 1996 (Note 9) (447,578) (323,625)
Stock held by employee benefits trusts, at cost,
6,553 shares in 1997 and 1996 (Note 9) (64,567) (64,567)
---------- ----------
Total shareholders' equity 349,397 424,950
---------- ----------
$1,177,104 $1,207,518
========== ==========
</TABLE>
<PAGE>
EQUIFAX INC.
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
(In thousands, except per share amounts)
--------------------------------------------------------------------------------------------------------------
Year Ended December 31 1997 1996 1995
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating revenue $1,366,087 $1,222,798 $1,105,309
---------- ---------- ----------
Costs and expenses:
Costs of services 778,936 697,168 651,304
Selling, general and administrative expenses 263,243 258,729 232,101
Unusual charges (credits) (Note 3) 25,000 10,313 (9,243)
---------- ---------- ----------
Total costs and expenses 1,067,179 966,210 874,162
---------- ---------- ----------
Operating income 298,908 256,588 231,147
Other income, net 45,027 22,400 7,335
Interest expense 20,797 16,439 15,342
---------- ---------- ----------
Income from continuing operations before income
taxes and cumulative effect of accounting change 323,138 262,549 223,140
Provision for income taxes 137,613 109,452 90,355
---------- ---------- ----------
Income from continuing operations before
cumulative effect of accounting change 185,525 153,097 132,785
---------- ---------- ----------
Discontinued operations (Note 2):
Income from discontinued operations, net of income
taxes of $10,179, $16,494 and $11,233 respectively 14,336 24,520 14,865
Costs associated with effecting the spinoff, net of
income tax benefit of $2,154 (12,887) -- --
---------- ---------- ----------
Total discontinued operations 1,449 24,520 14,865
---------- ---------- ----------
Income before cumulative effect of accounting change 186,974 177,617 147,650
Cumulative effect of change in accounting for
business process reengineering, net of income
tax benefit of $2,061 (Note 3) (3,237) -- --
---------- ---------- ----------
Net income $ 183,737 $ 177,617 $ 147,650
========== ========== ==========
Per common share (basic):
Income from continuing operations before
cumulative effect of accounting change $ 1.29 $ 1.05 $ 0.88
Discontinued operations 0.01 0.17 0.10
Cumulative effect of accounting change (0.02) -- --
---------- ---------- ----------
Net income $ 1.27 $ 1.22 $ 0.98
========== ========== ==========
Shares used in computing basic earnings per share 144,233 145,518 151,357
========== ========== ==========
Per common share (diluted):
Income from continuing operations before
cumulative effect of accounting change $ 1.26 $ 1.03 $ 0.86
Discontinued operations 0.01 0.16 0.10
Cumulative effect of accounting change (0.02) -- --
---------- ---------- ----------
Net income $ 1.24 $ 1.19 $ 0.96
========== ========== ==========
Shares used in computing diluted earnings per share 147,818 149,207 154,375
========== ========== ==========
Dividends per common share $ 0.345 $ 0.330 $ 0.315
========== ========== ==========
The accompanying notes are an integral part of these consolidated statements.
</TABLE>
<PAGE>
EQUIFAX INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
(In thousands)
--------------------------------------------------------------------------------------------------------------
Year Ended December 31 1997 1996 1995
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock:
Balance at beginning of year $ 213,573 $ 211,015 $ 208,471
Shares issued under stock plans 2,008 2,558 2,544
--------- --------- ---------
Balance at end of year $ 215,581 $ 213,573 $ 211,015
========= ========= =========
Paid-In Capital:
Balance at beginning of year $ 207,142 $ 171,020 $ 145,859
Shares issued under stock plans 22,800 25,795 17,243
Adjustment for treasury stock reissued for acquisitions 3,468 360 884
Other 11,086 9,967 7,034
--------- --------- ---------
Balance at end of year $ 244,496 $ 207,142 $ 171,020
========= ========= =========
Retained Earnings:
Balance at beginning of year $ 396,340 $ 269,986 $ 175,894
Net income 183,737 177,617 147,650
Cash dividends (52,030) (49,704) (50,223)
Spinoff dividend (111,396) - -
Other (1,502) (1,559) (3,335)
--------- --------- ---------
Balance at end of year $ 415,149 $ 396,340 $ 269,986
========= ========= =========
Cumulative Foreign Currency
Translation Adjustment:
Balance at beginning of year $ (3,913) $ (13,734) $ (13,310)
Adjustment during year (9,771) 9,821 (424)
--------- --------- ---------
Balance at end of year $ (13,684) $ (3,913) $ (13,734)
========= ========= =========
Treasury Stock:
Balance at beginning of year $(323,625) $(218,613) $ (87,975)
Cost of shares repurchased (129,085) (105,550) (132,668)
Cost of shares reissued for acquisitions 5,132 538 2,030
--------- --------- ---------
Balance at end of year $(447,578) $(323,625) $(218,613)
========= ========= =========
Stock Held By Employee Benefits Trusts:
Balance at beginning of year $ (64,567) $ (66,209) $ (67,004)
Cost of shares reissued under stock plans - 1,642 795
--------- --------- ----------
Balance at end of year $ (64,567) $ (64,567) $ (66,209)
========= ========= ==========
The accompanying notes are an integral part of these consolidated statements.
</TABLE>
<PAGE>
EQUIFAX INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(In thousands)
------------------------------------------------------------------------------------------------------------------------------
Year Ended December 31 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 183,737 $ 177,617 $ 147,650
Adjustments to reconcile net income to net cash provided
by operating activities of continuing operations:
Income from discontinued operations (14,336) (24,520) (14,865)
Costs associated with effecting the spinoff 12,887 - -
Cumulative effect of accounting change 3,237 - -
Depreciation and amortization 77,069 67,475 63,724
Valuation loss on pending acquisition 25,000 - -
Asset impairment write-off - 10,313 -
Gain from sale of long-term investments - (8,232) -
Gain from sale of businesses (42,798) (11,564) -
Restructuring provision, net of cash payments - - 9,192
Changes in assets and liabilities, excluding effects of acquisitions:
Accounts receivable, net (45,982) (26,674) (17,653)
Current liabilities, excluding debt 11,909 55,134 (36,000)
Other current assets (3,827) 13,141 (21,993)
Deferred income taxes 9,726 (22,162) 15,219
Other long-term liabilities, excluding debt 4,894 51,554 2,458
Other assets (11,431) (11,053) (8,024)
--------- --------- ---------
Net cash provided by operating activities of continuing operations 210,085 271,029 139,708
--------- --------- ---------
Cash flows from investing activities:
Additions to property and equipment (34,587) (38,099) (26,333)
Additions to other assets, net (51,452) (40,191) (22,112)
Acquisitions, net of cash acquired (96,630) (83,109) (13,295)
Investments in unconsolidated affiliates (18,839) - (14,066)
Deferred payments on prior year acquisitions - - (8,743)
Proceeds from sale of long-term investments - 18,356 -
Proceeds from sale of businesses 80,998 49,081 14,868
--------- --------- ---------
Net cash used by investing activities of continuing operations (120,510) (93,962) (69,681)
--------- --------- ---------
Cash flows from financing activities:
Net short-term borrowings (payments) 8,556 31,998 (44,274)
Additions to long-term debt 67,285 12,820 82,402
Payments on long-term debt (92,582) (11,933) (11,451)
Treasury stock purchases (129,085) (105,550) (132,668)
Dividends paid (52,030) (49,704) (50,223)
Proceeds from exercise of stock options 18,343 25,945 16,596
Other 11,085 9,967 7,034
--------- --------- ---------
Net cash used by financing activities of continuing operations (168,428) (86,457) (132,584)
--------- --------- ---------
Effect of foreign currency exchange rates on cash 196 (1,023) 1,041
Net cash provided (used) by discontinued operations 82,748 (66,918) 9,875
--------- --------- ---------
Net cash provided (used) 4,091 22,669 (51,641)
Cash and cash equivalents, beginning of year 48,160 25,491 77,132
--------- --------- ---------
Cash and cash equivalents, end of year $ 52,251 $ 48,160 $ 25,491
========= ========= =========
The accompanying notes are an integral part of these consolidated statements.
</TABLE>
<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 and controlled subsidiaries.
All significant intercompany transactions and balances have been eliminated.
Certain prior year amounts have been reclassified to conform with the current
year presentation. The historical financial statements presented have been
restated to reflect the spinoff of ChoicePoint Inc. (Note 2).
NATURE OF OPERATIONS. - The Company principally provides information services
to businesses to help them grant credit and authorize and process credit card
and check transactions. The principal lines of business are credit services and
payment services (see Note 14 for industry segment information). The principal
markets for both credit and payment services are retailers, banks and other
financial institutions, with credit services also serving the telecommunication
and utility industries. The Company's operations are predominately located
within the United States, with foreign operations principally located within
Canada and the United Kingdom.
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.
REVENUE RECOGNITION. - Revenue is recognized principally as services are
provided to customers. Amounts billed in advance are recorded as current or
long-term deferred revenue on the balance sheet, with current deferred revenue
reflecting services expected to be provided within the next twelve months.
Current deferred revenue is included with other current liabilities in the
accompanying consolidated balance sheets, and as of December 31, 1997 and 1996
totaled $29,345,000 and $27,935,000, respectively.
EARNINGS PER SHARE. - Earnings per share (EPS) is calculated in accordance with
Statement of Financial Accounting Standards No. 128, "Earnings Per Share,"
issued in February 1997, which requires the Company to present both basic and
diluted EPS on the face of the income statement. Basic EPS is calculated as
income available to common stockholders divided by the weighted average number
of common shares outstanding during the period. Diluted EPS is calculated to
reflect the potential dilution that would occur if stock options or other
contracts to issue common stock were exercised and resulted in additional common
shares outstanding. The income amount used in the Company's EPS calculations is
the same for both basic and diluted EPS. A reconciliation of the average
outstanding shares used in the two calculations is as follows:
<TABLE>
<CAPTION>
(in thousands) 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Weighted average shares outstanding (basic) 144,233 145,518 151,357
Effect of dilutive securities:
Stock options 3,099 3,154 2,436
Performance share plan 486 535 582
- ------------------------------------------------------------------------------------------------------------------
Weighted average shares outstanding (diluted) 147,818 149,207 154,375
==================================================================================================================
</TABLE>
PROPERTY AND EQUIPMENT. - The cost of property and equipment is depreciated
primarily on the 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 predominately over
periods from 20 to 40 years. Amortization expense was $12,221,000 in 1997,
$10,238,000 in 1996, and $9,020,000 in 1995. As of December 31, 1997 and 1996,
accumulated amortization was $42,996,000 and $35,034,000, respectively. The
Company regularly evaluates whether events and circumstances have occurred which
indicate that 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 $11,506,000 in 1997,
$9,961,000 in 1996, and $11,029,000 in 1995. As of December 31, 1997 and 1996,
accumulated amortization was $77,587,000 and $72,546,000, respectively.
OTHER ASSETS. - Other assets at December 31, 1997 and 1996 consist of the
following:
<TABLE>
<CAPTION>
(in thousands) 1997 1996
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Systems development and other deferred costs $ 81,927 $ 63,330
Purchased software 40,627 37,123
Prepaid pension cost 40,171 13,148
Investments in unconsolidated affiliates 28,200 42,505
Deferred income tax assets -- 10,426
Other 21,804 14,815
- ----------------------------------------------------------------------------------------------------------------------------
$212,729 $181,347
============================================================================================================================
</TABLE>
<PAGE>
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 $23,018,000 in 1997, $20,139,000 in 1996, and $18,579,000
in 1995. As of December 31, 1997 and 1996, accumulated amortization was
$91,915,000 and $76,338,000, 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 from continuing operations is as
follows:
<TABLE>
<CAPTION>
(in thousands) 1997 1996 1995
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income taxes, net of amounts refunded $123,670 $92,276 $109,842
Interest $ 21,593 $16,922 $ 15,332
</TABLE>
In 1997, 1996 and 1995, the Company acquired various businesses that were
accounted for as purchases (Note 4). In conjunction with these transactions,
liabilities were assumed as follows:
<TABLE>
<CAPTION>
(in thousands) 1997 1996 1995
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fair value of assets acquired $127,724 $104,385 $58,749
Cash paid for acquisitions 102,903 83,214 13,415
Value of treasury shares reissued
for acquisitions 8,600 -- --
Notes and deferred payments 5,800 1,542 13,369
- --------------------------------------------------------------------------------------------------------------------
Liabilities assumed $ 10,421 $ 19,629 $31,965
====================================================================================================================
</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 values due to their short
maturity. As of December 31, 1997, the fair value of the Company's long-term
debt (determined primarily by broker quotes) was $347,146,000 compared to its
carrying value of $344,585,000. During 1997, the Company did not hold any
material derivative financial instruments.
2. DISCONTINUED OPERATIONS.
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, contingent on receiving a favorable ruling from the IRS
regarding the tax-free status of the dividend for U.S. shareholders. In July
1997, the Company received the favorable IRS ruling and on August 7, 1997
completed the spinoff of its Insurance Services industry segment. The spinoff
was accomplished by the Company's contribution of the business units that
comprised the Insurance Services segment into one wholly owned subsidiary,
ChoicePoint Inc. All of the common stock of ChoicePoint was then distributed to
Equifax shareholders as a dividend, with one share of ChoicePoint common stock
distributed for each ten shares of Equifax common stock held.
As a result of the spinoff, the Company's December 31, 1997 financial statements
have been prepared with the Insurance Services segment results of operations and
cash flows shown as "discontinued operations". All historical financial
statements presented have been restated to conform to this presentation, with
the historical assets and liabilities of that segment presented on the balance
sheet as "Net assets of discontinued operations". During the second quarter of
1997, the Company recorded an expense of $15,041,000 to reflect the net costs
associated with effecting the spinoff ($12,887,000 after tax, or $.09 per
share). These costs include duplicate software licenses, severance, legal and
investment banker fees, and other related costs, partially offset by a $17.1
million curtailment gain related to the U.S. retirement plan caused by the
spinoff and the pretax earnings of ChoicePoint for July.
Summarized financial information for the discontinued operation is as follows:
<TABLE>
<CAPTION>
(in thousands) 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenue $340,251 $588,425 $517,649
Income before income taxes 24,515 41,014 26,098
Net income 14,336 24,520 14,865
</TABLE>
<TABLE>
<CAPTION>
(in thousands) December 31,
1996
- ----------------------------------------------------------------------------------------------------------------------
<S> <C>
Current assets $ 91,931
Total assets 301,824
Current liabilities 44,965
Total liabilities 105,410
Net assets of discontinued operations 196,414
</TABLE>
<PAGE>
The results of operation of ChoicePoint in the table above include its
operations only through June 30, 1997. ChoicePoint's results after June 30, 1997
through the spinoff date (July 31, 1997 for accounting purposes) are included
with "Costs associated with effecting the spinoff" in the accompanying
consolidated statements of income. These July results totaled $4.5 million of
income before income taxes and $2.6 million of net income.
The net assets of discontinued operations include the Company's intercompany
receivable from ChoicePoint, which totaled $84.0 million at December 31, 1996.
The balance of this intercompany receivable was $85.6 million at July 31, 1997
and was repaid to the Company by ChoicePoint in August 1997. Other significant
spinoff-related transactions occurring near the date of the spinoff included
ChoicePoint's assumption of $29.0 million of the Company's long-term debt and a
$13.0 million capital contribution made by the Company to ChoicePoint. These
transactions, net of cash payments related to spinoff costs, have been included
in "Net cash provided by discontinued operations" in the accompanying
consolidated statements of cash flows.
3. UNUSUAL ITEMS AND ACCOUNTING CHANGE.
Unusual items consist of the following charges (credits):
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(in thousands) 1997 1996 1995
- -------------------------------------------------------------------------------------------------------------------
Valuation loss accrued for pending acquisition (Note 11) $25,000 $ -- $ --
Asset impairment write-off (Note 5) -- 10,313 --
Credit related to lottery contract (Note 6) -- -- (19,665)
Restructuring provision (Note 12) -- -- 10,422
- -------------------------------------------------------------------------------------------------------------------
$25,000 $10,313 $ (9,243)
===================================================================================================================
</TABLE>
In November 1997, the Financial Accounting Standards Board Emerging Issues Task
Force released Issue No. 97-13 "Accounting for Costs Incurred in Connection with
a Consulting Contract or an Internal Project That Combines Business Process
Reengineering and Information Technology Transformation" (EITF 97-13). This
issue requires that the cost of business process reengineering activities that
are a part of a systems development project be expensed as incurred, and that
any costs previously capitalized be written off net of tax as a change in
accounting principle in the current period. Prior to the issuance of EITF 97-13,
the Company had capitalized certain costs of business process reengineering
related to several of its systems development projects. Accordingly, during the
fourth quarter, 1997, the Company recorded an expense of $5,298,000 ($3,237,000
after tax, or $.02 per share) to reflect the write off of these previously
capitalized costs in accordance with EITF 97-13.
4. ACQUISITIONS AND INVESTMENTS IN UNCONSOLIDATED AFFILIATES.
During 1997, 1996 and 1995, the Company acquired or made equity investments in
the following businesses:
<TABLE>
<CAPTION>
Date Industry Percentage
Business Acquired Segment Ownership
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Goldleaf Technologies, Inc. December 1997 Payment Services 100.0%
Organizacion VERAZ S.A. (Argentina) December 1997 Latin America 66.7% 1
Equifax Venture Infotek (India) November 1997 Payment Services 50.0%
Group Incresa (Spain) July 1997 Europe 100.0%
DICOM S.A. (Chile) March 1997 Latin America 100.0% 2
HLS Financial Group, Inc. February 1997 North America 100.0%
Foothill Collection Services, Inc. February 1997 North America 100.0%
CUNA Service Group, Inc. December 1996 Payment Services 100.0%
Creditel of Canada Limited September 1996 North America 100.0%
Transax plc (U.K.) June 1996 Europe 100.0% 3
Collective Credit Bureaus Ltd. (Canada) May 1996 North America 100.0%
Market Knowledge, Inc. January 1996 North America 100.0%
DICOM S.A. (Chile) December 1995 Latin America 50.0% 4
TecniCob S.A. (France) July 1995 Payment Services 100.0%
The Infocheck Group Limited (U.K.) July 1995 Europe 100.0%
UCB Services, Inc. April 1995 North America 100.0%
Medical Review Systems, LP March 1995 Other 100.0% 5
</TABLE>
1 Increased to 66.7% from the 33.3% ownership position acquired in 1994.
2 Increased to 100.0% from the 50.0% ownership position acquired in 1995 and
1994.
3 Increased to 100.0% from the 50.1% ownership position acquired in 1994 and
1992.
4 Increased to 50.0% from the 25.0% ownership position acquired in 1994.
5 Divested in the fourth quarter, 1996 (see Note 5).
In 1997, in addition to the businesses above, the Company acquired the credit
files of sixteen credit bureaus located in the United States. The investments in
companies in India and Argentina totaled $18.8 million and were accounted for
under the equity method. They were purchased with cash and recorded as other
assets. The investment in Group Incresa in Spain was made by the Company's 49%-
owned equity investment, ASNEF. The remaining 1997 business and credit file
acquisitions were accounted for as purchases and had an aggregate purchase price
of $117,303,000, with
<PAGE>
$88,661,000 allocated to goodwill, $32,695,000 to purchased data files, and
$10,096,000 to other assets (primarily purchased software). These allocations
include $25.2 million reallocated from other assets related to the Company's
first 50% ownership in DICOM S.A. 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
$102,903,000, notes payable to sellers of $5,800,000 and the reissuance of
treasury stock with a fair market value of $8,600,000.
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 $84,756,000, with $47,389,000 allocated to goodwill,
$18,198,000 to purchased data files, and $14,304,000 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 $83,214,000
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.
The 1995 acquisitions of greater than 50% ownership were accounted for as
purchases and had an aggregate purchase price of $26,784,000, with $31,925,000
allocated to goodwill and $11,121,000 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 $13,415,000 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. Also
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.
5. DIVESTITURES AND ASSET IMPAIRMENT.
During the second quarter of 1997, the Company sold its National Decision
Systems business unit from its North America Information Services segment. Cash
proceeds, net of related divestiture expenses, totaled $80,998,000 and resulted
in a gain of $42,798,000 recorded in other income ($17,881,000 after tax, or
$.12 per share).
During the fourth quarter of 1996, the Company sold all of the health
information business units from its Other 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).
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 Other segment.
During the third quarter of 1995, the Company sold Elrick & Lavidge and Quick
Test, the market research businesses in its Other segment. Cash proceeds from
these sales totaled $14,868,000 and resulted in an immaterial gain, recorded in
other income.
6. LOTTERY CONTRACT DISPUTE, LITIGATION, AND SETTLEMENT.
In 1992, High Integrity Systems, Inc. (HISI), a Company subsidiary, entered into
a contract 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.
During 1993, the California State Lottery (CSL) filed suit against HISI for
alleged breach of contract and injunctive relief and HISI filed a cross-
complaint against the CSL alleging breach of contract and seeking recovery of
the reasonable value of the labor and materials expended on behalf of the CSL.
In September 1993, the Company recorded a provision of $48,438,000 ($30,939,000
after tax, or $.20 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.
During 1995, the CSL and HISI settled the litigation and finalized the terms of
a reinstated contract under which HISI agreed to install its system to automate
the processing of instant lottery tickets, and the CSL agreed to purchase 6,700
terminals and related security hardware and license 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 expenses. Under the reinstated contract, HISI
was also guaranteed to receive 66 months of revenue at the rate of 5% on each
dollar of lottery ticket sales occurring from each terminal installed.
In 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 provided for a one-time payment of $58,000,000 by GTECH
to HISI, and also provided that future payments received by HISI from the CSL
for lottery ticket sales 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 remaining balance is being recognized as revenue over
the term of the reinstated CSL contract, and $9,636,000 was recognized as
revenue in 1997. The unrecognized balance at December 31, 1997 totaled
$42,964,000, with $9,636,000 included as deferred revenue in other current
liabilities and $33,328,000 included in long-term deferred revenue in the
accompanying consolidated balance sheets.
7. LONG-TERM DEBT AND SHORT-TERM BORROWINGS.
Long-term debt at December 31, 1997 and 1996 is as follows:
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
(in thousands) 1997 1996
- ----------------------------------------------------------------------------------------------------------------------------
Senior Notes, 6.5%, due 2003, net of unamortized
discount of $561 in 1997 and $663 in 1996 $199,439 $199,337
Borrowings under $750 million revolving credit facility,
varying interest rate, 6.13% at December 31, 1997 125,000 60,000
Term loan, denominated in pounds sterling, paid in 1997 -- 34,250
Other 20,146 15,412
- ----------------------------------------------------------------------------------------------------------------------------
344,585 308,999
Less current maturities 5,284 4,057
- ----------------------------------------------------------------------------------------------------------------------------
$339,301 $304,942
============================================================================================================================
</TABLE>
In November 1997, the Company replaced its $550 million revolving credit
facility with a new, committed $750 million revolving credit facility with a
group of commercial banks that expires November 2002. The agreement provides
interest rate options tied to Base Rate, LIBOR, or Money Market indexes, and
contains certain financial covenants related to interest coverage, funded debt
to cash flow and limitations on subsidiary indebtedness.
In 1997, the Company also arranged for a $75 million revolving credit facility
with a commercial bank that expires December 2000. The agreement provides
interest rate options tied to LIBOR, Prime and Federal Funds indexes, and
contains certain financial covenants related to interest coverage, funded debt
to cash flow, and limitations on subsidiary indebtedness. No amounts were
outstanding under this facility at December 31, 1997.
Scheduled maturities of long-term debt during the five years subsequent to
December 31, 1997 are as follows:
$5,284,000 in 1998; $2,888,000 in 1999; $1,886,000 in 2000; $967,000 in 2001;
and $125,967,000 in 2002.
Short-term borrowings at December 31, 1997 and 1996 consisted of notes payable
to banks totaling $7,700,000 and $55,506,000, respectively. These notes had a
weighted average interest rate of 7.15% at December 31, 1997 and 6.4% at
December 31, 1996.
8. 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 from continuing operations consists of the
following:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(in thousands) 1997 1996 1995
- --------------------------------------------------------------------------------------------------------------------
Current:
Federal $109,804 $104,754 $58,721
State 21,408 16,677 11,936
Foreign 9,093 7,979 7,915
- --------------------------------------------------------------------------------------------------------------------
140,305 129,410 78,572
- --------------------------------------------------------------------------------------------------------------------
Deferred:
<S> <C> <C> <C>
Federal (8,361) (20,035) 10,546
State (2,269) (1,612) 710
Foreign 7,938 1,689 527
-------------------------------------------------------------------------------------------------------------------
(2,692) (19,958) 11,783
- --------------------------------------------------------------------------------------------------------------------
Total $137,613 $109,452 $90,355
====================================================================================================================
</TABLE>
The provision for income taxes from continuing operations is based upon income
from continuing operations before income taxes as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(in thousands) 1997 1996 1995
- --------------------------------------------------------------------------------------------------------------------
United States $284,116 $235,761 $214,838
Foreign 39,022 26,788 8,302
- --------------------------------------------------------------------------------------------------------------------
$323,138 $262,549 $223,140
====================================================================================================================
</TABLE>
The provision for income taxes from continuing operations is reconciled with the
federal statutory rate as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
(in thousands) 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------
Federal statutory rate 35.0% 35.0% 35.0%
- ----------------------------------------------------------------------------------------------------------------------
Provision computed at federal statutory rate $113,098 $ 91,892 $78,099
State and local taxes, net of federal tax benefit 12,440 9,792 8,220
Nondeductible goodwill from divestitures 5,652 4,633 --
Other 6,423 3,135 4,036
- ----------------------------------------------------------------------------------------------------------------------
$137,613 $109,452 $90,355
====================================================================================================================
</TABLE>
Components of the Company's deferred income tax assets and liabilities at
December 31, 1997 and 1996 are as follows:
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
(in thousands) 1997 1996
- -------------------------------------------------------------------------------------------------------------------------------
Deferred income tax assets:
Reserves and accrued expenses $ 37,821 $ 33,171
Postretirement benefits 9,398 8,737
Employee compensation programs 21,150 18,827
Deferred revenue 18,769 20,532
Other 21,874 16,923
- -------------------------------------------------------------------------------------------------------------------------------
109,012 98,190
- -------------------------------------------------------------------------------------------------------------------------------
Deferred income tax liabilities:
Data files and other assets (52,752) (45,244)
Depreciation (4,545) (2,635)
Pension expense (15,832) (6,057)
Other (21,079) (17,614)
- --------------------------------------------------------------------------------------------------------------------------------
(94,208) (71,550)
- --------------------------------------------------------------------------------------------------------------------------------
Net deferred income tax asset $ 14,804 $ 26,640
================================================================================================================================
</TABLE>
The Company's deferred income tax assets and liabilities at December 31, 1997
and 1996 are included in the accompanying consolidated balance sheets as
follows:
<TABLE>
<CAPTION>
<S> <C> <C>
(in thousands) 1997 1996
- --------------------------------------------------------------------------------------------------------------------------------
Deferred income tax assets $ 39,221 $ 33,016
Other assets -- 10,426
Other long-term liabilities (24,417) (16,802)
- --------------------------------------------------------------------------------------------------------------------------------
Net deferred income tax asset $ 14,804 $ 26,640
================================================================================================================================
</TABLE>
Accumulated undistributed retained earnings of Canadian subsidiaries amounted to
approximately $107,441,000 at December 31, 1997. 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 $5,372,000 of deferred income taxes would have been
provided. Such taxes, if ultimately paid, may be recoverable as foreign tax
credits in the United States.
9. 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.
RIGHTS PLAN. - 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 1997, 1996, and 1995, the Company repurchased
4,143,000, 4,614,000 and 6,847,000 of its own common shares through open market
transactions at an aggregate cost of $129,085,000, $105,550,000 and
$132,668,000, respectively. During 1997, the Company's Board of Directors
authorized an additional $300,000,000 in share repurchases, and at December 31,
1997, approximately $223 million remained available for future purchases. During
1997, the Company reissued approximately 270,000 treasury shares in connection
with an acquisition (Note 4).
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 grants. No shares were used in 1997.
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
<PAGE>
also provide for awards of restricted shares of the Company's common stock. At
December 31, 1997, there were 4,391,000 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 shown in the following table. The number of options
outstanding and their exercise prices were adjusted pursuant to a formula as a
result of the spinoff of ChoicePoint in August 1997. The 1997 grant,
cancellation and exercise information reflects the impact of this adjustment
back to January 1, 1997, with the adjustment increasing the number of options
outstanding at the beginning of fiscal 1997 by approximately 1,096,000 shares.
<TABLE>
<CAPTION>
1997 1996 1995
-------------------------------------------------------------------
(shares in thousands) Shares Avg. Price Shares Avg. Price Shares Avg. Price
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance, Beginning of year 7,526 $14.62 7,987 $12.21 5,874 $ 9.98
Adjustment to beginning balance
due to spinoff 1,096 -- -- -- -- --
Granted:
At market price 968 $26.06 915 $18.78 4,799 $14.33
In excess of market price 119 $35.44 1,092 $25.14 -- --
Canceled (1,434) $15.81 (382) $14.51 (848) $13.29
Exercised (1,693) $11.45 (2,086) $12.73 (1,838) $10.06
Balance, end of year 6,582 $14.89 7,526 $14.62 7,987 $12.21
- -------------------------------------------------------------------------------------------------------------
Exercisable at end of year 4,420 $12.53 4,412 $13.30 2,561 $ 9.87
=============================================================================================================
</TABLE>
The following table summarizes information about stock options outstanding at
December 31, 1997 (shares in thousands):
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
--------------------------------------------------------
Wgtd. Avg. Weighted Weighted
Range of Remaining Average Average
Exercise Contractual Exercise Exercise
Prices Shares Life in years Price Shares Price
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$5.01-$8.67 1,698 3.6 $ 7.99 1,698 $ 7.99
10.37-12.49 2,378 5.2 $11.90 1,760 $11.84
13.37-25.75 2,343 8.3 $21.61 903 $20.73
26.41-40.59 163 9.4 $33.70 59 $38.07
- --------------------------------------------------------------------------------
6,582 6.0 $14.89 4,420 $12.53
================================================================================
</TABLE>
The weighted-average grant-date fair value per share of options granted in 1997,
1996 and 1995 is as follows:
<TABLE>
<CAPTION>
1997 1996 1995
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Grants at market price $10.05 $6.91 $3.46
Grants in excess of market price $ 6.17 $4.21 --
</TABLE>
The fair value of options granted in 1997, 1996 and 1995 is estimated on the
date of grant using the Black-Scholes option-pricing model based on the
following weighted average assumptions:
<TABLE>
<CAPTION>
1997 1996 1995
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Dividend yield 1.1% 1.8% 2.2%
Expected volatility 41.3% 42.3% 33.1%
Risk-free interest rate 6.3% 5.1% 7.3%
Expected life in years 4.3 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 on the growth in earnings per share
and certain other criteria. Recipients may elect to receive up to 50% of their
distribution in cash based on the Company's common stock price at the end of the
measurement period. Units outstanding at July 31, 1997 were increased by
approximately 14.6% to reflect the impact of the ChoicePoint spinoff. The total
expense under the plan was $11,022,000 in 1997, $11,200,000 in 1996, and
$9,870,000 in 1995. At December 31, 1997, 672,630 shares of common stock were
available for future awards under the plan. Units awarded during the year were
190,000 in 1997, 356,000 in 1996, and 366,000 in 1995. Award-date fair value per
unit was $29.50 in 1997, $18.63 in 1996, and $14.31 in 1995. Units outstanding
at December 31 were 809,600 in 1997, 893,028 in 1996, and 988,332 in 1995.
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 25 and related Interpretations in accounting for its stock
option and performance share plans. Accordingly, the Company does not recognize
compensation
<PAGE>
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>
1997 1996 1995
---------------------------------------------------------------------
Reported Pro Forma Reported Pro forma Reported Pro forma
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net income $183,737 $182,239 $177,617 $172,787 $147,650 $140,798
==========================================================================================================
Net income per share (basic) $ 1.27 $ 1.26 $ 1.22 $ 1.19 $ 0.98 $ 0.93
==========================================================================================================
Net income per share (diluted) $ 1.24 $ 1.23 $ 1.19 $ 1.16 $ 0.96 $ 0.91
==========================================================================================================
</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.
10. EMPLOYEE BENEFITS.
The Company and its subsidiaries have non-contributory qualified retirement
plans covering most salaried employees in the U.S. and Canada. Under the plans,
retirement benefits are primarily 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 $573,000 in 1997, $8,350,000 in 1996 and $7,275,000 in
1995.
U.S. RETIREMENT PLAN. - The following table sets forth the U.S. plan's funded
status at December 31, 1997 and 1996:
<TABLE>
<CAPTION>
(in thousands) 1997 1996
- -----------------------------------------------------------------------------------------------------------
Accumulated plan benefits:
<S> <C> <C>
Vested benefits $369,461 $328,496
Nonvested benefits 7,107 9,487
- -----------------------------------------------------------------------------------------------------------
376,568 337,983
Effect of projected future compensation levels 12,291 27,220
- -----------------------------------------------------------------------------------------------------------
Projected benefit obligation 388,859 365,203
Plan assets at fair value 435,005 373,362
- -----------------------------------------------------------------------------------------------------------
Plan assets in excess of projected benefit obligation 46,146 8,159
Unrecognized net gains (12,003) (3,653)
Prior service cost not yet recognized in period pension cost 1,872 4,850
Net asset at transition being amortized through 1996 -- (62)
- -----------------------------------------------------------------------------------------------------------
Prepaid pension cost $ 36,015 $ 9,294
===========================================================================================================
</TABLE>
The plan's assets consist primarily of listed common stocks and fixed income
obligations. At December 31, 1997, the plan's assets included 980,355 shares of
the Company's common stock with a market value of approximately $34,741,000.
Pension expense for the plan includes the following components:
<TABLE>
<CAPTION>
(in thousands) 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost $ 5,267 $ 7,465 $ 5,627
Interest cost on projected benefit obligation 26,735 26,692 26,805
Actual return on plan assets (76,544) (53,065) (58,539)
Net amortization and deferrals 44,939 26,960 32,995
- ------------------------------------------------------------------------------------------------------------
Pension expense $ 397 $ 8,052 $ 6,888
============================================================================================================
</TABLE>
Pension expense includes amounts allocated to discontinued operations totaling
$411,000 in 1997, $3,261,000 in 1996 and $3,296,000 in 1995. As a result of the
spinoff, employees of ChoicePoint ceased accruing benefits under the plan and
the Company recognized a curtailment gain of $17,118,000 in the second quarter
of 1997 (see Note 2).
Assumptions used in the accounting for the U.S. Retirement Plan are as follows:
<TABLE>
<CAPTION>
1997 1996 1995
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Discount rate used to determine projected
benefit obligation at December 31 7.25% 7.5% 7.25%
Rate of increase in future compensation levels 4.25% 4.25% 4.25%
Expected long-term rate of return on plan assets 9.5% 9.5% 9.5%
</TABLE>
FOREIGN RETIREMENT PLANS. - The aggregate fair market value of the Company's
Canadian plan assets approximates that plan's projected benefit obligation,
which totaled $23,659,000 and $20,809,000 at December 31, 1997 and 1996,
respectively. Prepaid pension cost for the Canadian plan was $4,156,000 and
$3,854,000 at December 31, 1997 and 1996, respectively. The Company also
maintains defined contribution plans for certain employees in the United
Kingdom.
<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 $3,691,000 in 1997, $3,517,000 in 1996, and
$2,982,000 in 1995. The accrued liability for this plan at December 31, 1997 and
1996, was $27,764,000 and $24,379,000, respectively, and is included in other
long-term liabilities in the accompanying consolidated balance sheets.
EMPLOYEE RETIREMENT SAVINGS PLAN. - 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. Expense for these
plans was $3,294,000 in 1997, $2,912,000 in 1996, and $2,854,000 in 1995.
POSTRETIREMENT BENEFITS. - The Company maintains certain unfunded healthcare
and life insurance benefit plans for eligible retired employees. 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 these benefits over the active service period of the employee. Expense
for these plans was $1,690,000 in 1997, $1,547,000 in 1996, and $2,087,000 in
1995. The accrued liability for these plans at December 31, 1997 and 1996 was
$24,384,000 and $24,078,000, respectively, and is included in other long-term
liabilities in the accompanying consolidated balance sheets.
11. COMMITMENTS AND CONTINGENCIES.
LEASES. - The Company's operating leases involve principally office space and
office equipment. Rental expense relating to these leases was $38,779,000 in
1997, $39,443,000 in 1996, and $36,243,000 in 1995.
Future minimum payment obligations for noncancelable operating leases exceeding
one year are as follows as of December 31, 1997:
<TABLE>
<CAPTION>
(in thousands) Amount
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
1998 $ 25,927
1999 23,353
2000 20,674
2001 18,402
2002 15,213
Thereafter 132,789
- ------------------------------------------------------------------------------------------------------------------------------------
$236,358
====================================================================================================================================
</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 July 1998 and is renewable at the option of CSC for
successive ten-year periods. CSC has elected to allow the term of the agreement
to be renewed for the ten-year period beginning August 1, 1998. The agreement
provides CSC with an option to sell its collection and credit reporting
businesses to the Company, and provides the Company with an option to purchase
CSC's collection and credit reporting businesses if CSC does not elect to renew
the agreement or if there is a change in control of CSC while the agreement is
in effect. Both options expire in 2013. The option price is determined through
July 31, 1998 by certain financial formulas and after July 31, 1998 by appraised
value.
On November 25, 1997, CSC exercised its option to sell a portion of its
collection and credit reporting businesses to the Company, essentially
comprising its collection operations, at a purchase price currently estimated at
approximately $38 million. This transaction is expected to be finalized in the
second quarter of 1998. Subsequent to November 25, 1997, the Company determined
that the fair value of the business being sold (based on its estimated
discounted cash flows) was less than the contractual purchase price because a
major contract expiring in 1998 would not be renewed. Accordingly, in the fourth
quarter of 1997, the Company recorded a $25,000,000 charge ($14,950,000 after
tax, or $.10 per share) to reflect a valuation loss on this pending acquisition,
with a corresponding $25,000,000 liability included in other current liabilities
at December 31, 1997.
CSC's option to sell, and the Company's option to purchase, remain in effect as
described above with respect to the remainder of the businesses subject to the
option, essentially comprising CSC's credit reporting operations. The Company
currently estimates the option price for those businesses, as determined by the
financial formulas, to be approximately $375 million. In its annual report for
the fiscal year ended March 28, 1997, CSC stated that the option price for both
its credit reporting and collection businesses "approximated $538 million at
March 28, 1997." The Company continues to periodically evaluate the estimated
fair value of the remaining CSC businesses subject to the option, essentially
comprising CSC's credit reporting operations, using estimates of its discounted
cash flows. Based on this analysis, at December 31, 1997, the fair value of
those 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. In 1997, IBM assumed ISSC's obligations under this
agreement. The Company currently estimates the future annual obligation under
this agreement to be approximately $80,000,000 per year, although this amount
could be more or less depending on 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, or for the
Company's convenience), the Company may terminate this agreement; however, the
agreement provides that the Company must pay a significant termination charge in
the event of such a termination.
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
termination of the officer's employment under certain circumstances following a
"change in control"
<PAGE>
of the Company. "Change in control" is defined as the accumulation by any
person, entity or group of 20% or more of the combined voting power of the
Company's voting stock or the occurrence of certain other specified events. 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, 1997, the maximum contingent liability under the agreements and
plans was approximately $22,545,000.
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.
12. 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 400 employees
primarily in the Other and North American Information Services segments. The
total cost of this program was $10,422,000 ($6,357,000 net of tax, or $.04 per
share). Components of the restructuring provision and utilization through
December 31, 1997 are as follows:
<TABLE>
<CAPTION>
Severance and
Termination Asset Lease
(in thousands) Benefits Write-Offs Costs Total
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Original provision $ 6,341 $ 2,994 $1,087 $10,422
Utilized in 1995 (1,231) (2,994) -- (4,225)
- -------------------------------------------------------------------------------------------------------------
Balance, December 31, 1995 5,110 -- 1,087 6,197
Utilized in 1996 (4,494) -- (468) (4,962)
- -------------------------------------------------------------------------------------------------------------
Balance, December 31, 1996 616 -- 619 1,235
Utilized in 1997 (438) -- (417) (855)
- -------------------------------------------------------------------------------------------------------------
Balance, December 31, 1997 $ 178 $ -- $ 202 $ 380
=============================================================================================================
</TABLE>
The reserve balance at December 31, 1997 is included in other current
liabilities in the accompanying consolidated balance sheets.
13. QUARTERLY FINANCIAL DATA (UNAUDITED).
Quarterly operating revenue and operating income by industry segment and other
summarized quarterly financial data for 1997 and 1996 are as follows (in
thousands, except per share amounts):
<TABLE>
<CAPTION>
1997 First Second Third Fourth
- ------------------------------------------------------------------------------------------------------------------
Operating revenue:
<S> <C> <C> <C> <C>
North American Information Services $172,240 $182,296 $178,670 $175,817
Payment Services 98,820 105,519 108,612 127,094
Equifax Europe 38,583 43,127 45,547 51,309
Equifax Latin America 6 9,620 8,848 10,344
Other 2,413 2,404 2,409 2,409
- -------------------------------------------------------------------------------------------------------------------
$312,062 $342,966 $344,086 $366,973
===================================================================================================================
Operating income:
North American Information Services $ 56,734 $ 62,904 $ 63,064 $ 33,875 / 1/
Payment Services 16,083 18,476 18,223 28,445
Equifax Europe 1,960 4,705 7,240 13,228
Equifax Latin America 542 2,590 1,785 4,291
Other 2,217 2,217 2,217 2,217
- ------------------------------------------------------------------------------------------------------------------
Operating Contribution 77,536 90,892 92,529 82,056
General Corporate Expense (8,989) (13,128) (9,792) (12,196)
- ------------------------------------------------------------------------------------------------------------------
$ 68,547 $ 77,764 $ 82,737 $ 69,860
===================================================================================================================
Income from continuing operations before
cumulative effect of accounting change $ 38,541 $ 61,190 $ 47,240 $ 38,554
===================================================================================================================
Income before cumulative effect of
accounting change $ 44,717 $ 56,463 $ 47,240 $ 38,554
===================================================================================================================
Per common share (basic):
Income from continuing operations before
cumulative effect of accounting change $ 0.27 $ 0.42 $ 0.33 $ 0.27
===================================================================================================================
Income before cumulative effect of
accounting change $ 0.31 $ 0.39 $ 0.33 $ 0.27
===================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Per common share (diluted):
Income from continuing operations before
cumulative effect of accounting change / 3/ $ 0.26 $ 0.41 $ 0.32 $ 0.26
====================================================================================================================
Income before cumulative effect of
accounting change / 3/ $ 0.30 $ 0.38 $ 0.32 $ 0.26
====================================================================================================================
1996 First Second Third Fourth
- ----------------------------------------------------------------------------------------------------------------------
Operating revenue:
North American Information Services $158,653 $168,229 $164,671 $177,218
Payment Services 71,598 79,252 84,732 103,744
Equifax Europe 35,385 36,738 39,715 45,673
Equifax Latin America -- -- -- --
Other 21,501 16,593 13,594 5,502
- ----------------------------------------------------------------------------------------------------------------------
$287,137 $300,812 $302,712 $332,137
====================================================================================================================
Operating income (loss):
North American Information Services $ 51,681 $ 56,599 $ 56,449 $ 55,630
Payment Services 11,815 14,414 16,051 24,601
Equifax Europe (339) 1,828 5,624 8,537
Equifax Latin America 475 1,045 1,125 611
Other 3,083 (10,700) /2/ (2,472) 277
- ----------------------------------------------------------------------------------------------------------------------
Operating Contribution 66,715 63,186 76,777 89,656
General Corporate Expense (9,725) (11,344) (9,477) (9,200)
- ----------------------------------------------------------------------------------------------------------------------
$ 56,990 $ 51,842 $ 67,300 $ 80,456
====================================================================================================================
Income from continuing operations before
cumulative effect of accounting change $ 32,409 $ 34,585 $ 38,541 $ 47,562
====================================================================================================================
Income before cumulative effect of
accounting change $ 36,845 $ 41,130 $ 45,804 $ 53,838
====================================================================================================================
Per common share (basic):
Income from continuing operations before
cumulative effect of accounting change /3/ $ 0.22 $ 0.24 $ 0.27 $ 0.33
====================================================================================================================
Income before cumulative effect of
accounting change $ 0.25 $ 0.28 $ 0.32 $ 0.37
====================================================================================================================
Per common share (diluted):
Income from continuing operations before
cumulative effect of accounting change $ 0.22 $ 0.23 $ 0.26 $ 0.32
====================================================================================================================
Income before cumulative effect of
accounting change $ 0.25 $ 0.27 $ 0.31 $ 0.36
====================================================================================================================
/1/ Includes $25,000 loss related to the valuation of a pending acquisition (Note 11).
/2/ Includes $10,313 loss related to asset impairment (Note 5).
/3/ Quarterly per share amounts do not add to the amounts shown in the consolidated statements of income due to rounding.
</TABLE>
14. INDUSTRY SEGMENT INFORMATION.
In the fourth quarter of 1997, the Company changed its segment reporting
structure to more closely match management's internal reporting of business
operations. Prior year information has been restated to conform with the 1997
presentation. Industry segment information for 1997, 1996 and 1995 is as follows
(dollars in thousands):
<TABLE>
<CAPTION>
1997 1996 1995
- -----------------------------------------------------------------------------------------------------------
Amount % Amount % Amount %
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operating revenue:
North American Information Services $ 709,023 52% $ 668,771 55% $ 594,363 54%
Payment Services 440,045 32 339,326 28 284,382 26
Equifax Europe 178,566 13 157,511 13 132,092 12
Equifax Latin America 28,818 2 -- - -- -
Other 9,635 1 57,190 4 94,472 8
- -----------------------------------------------------------------------------------------------------------
$1,366,087 100% $1,222,798 100% $1,105,309 100%
====================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Operating income (loss):
North American Information Services $ 216,577 63 % $ 220,359 74% $ 191,929 73%
Payment Services 81,227 24 66,881 23 63,460 24
Equifax Europe 27,133 8 15,650 5 4,685 2
Equifax Latin America 9,208 3 3,256 1 992 -
Other 8,868 2 (9,812) (3) 2,555 1
- -----------------------------------------------------------------------------------------------------------
Operating Contribution 343,013 100% 296,334 100% 263,621 100%
General Corporate Expense (44,105) (39,746) (32,474)
- -----------------------------------------------------------------------------------------------------------
$ 298,908 $ 256,588 $ 231,147
===========================================================================================================
Identifiable assets at
December 31:
North American Information Services $ 453,141 39% $ 433,075 43% $ 369,784 43%
Payment Services 236,921 20 199,957 20 122,272 14
Equifax Europe 261,414 22 241,337 24 207,112 24
Equifax Latin America 115,617 10 32,452 3 27,233 3
Other 4,227 - 12,828 1 81,282 9
Corporate 105,784 9 91,455 9 63,806 7
- -----------------------------------------------------------------------------------------------------------
1,177,104 100% 1,011,104 100% 871,489 100%
Net Assets of Discontinued Operations -- 196,414 104,684
- -----------------------------------------------------------------------------------------------------------
$1,177,104 $1,207,518 $ 976,173
===========================================================================================================
</TABLE>
Description of Segments:
NORTH AMERICAN INFORMATION SERVICES: Consumer credit reporting information;
credit card marketing services; check warranty services in Canada; commercial
credit reporting in Canada; risk management and collection services; locate
services; fraud detection and prevention services; mortgage loan origination
information; analytics and consulting; and through May 1997 PC-based marketing
systems, geo-demographic systems and mapping tools.
PAYMENT SERVICES: Credit and debit card authorization and processing; credit
card marketing enhancement; software products to manage credit card, merchant
and collection processing; and check warranty and verification services.
EQUIFAX EUROPE: Consumer and commercial credit reporting and marketing services;
credit scoring and modeling services; check warranty services; and auto lien
information.
EQUIFAX LATIN AMERICA: Credit information services and commercial, financial and
consumer information.
OTHER: Lottery services; Health Information Services, divested in the fourth
quarter of 1996; Marketing Services, divested August 1995.
Notes 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) 1997 1996 1995
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
North American Information Services $38,650 $34,258 $33,043
Payment Services 14,965 9,391 6,870
Equifax Europe 13,542 12,894 10,163
Equifax Latin America 4,736 1,108 600
Other 768 6,264 9,193
Corporate 4,408 3,560 3,855
- --------------------------------------------------------------------------------------------------------
$77,069 $67,475 $63,724
========================================================================================================
</TABLE>
4. Capital expenditures by industry segment, excluding property and equipment
and other assets acquired in acquisitions, are as follows:
<TABLE>
<CAPTION>
(in thousands) 1997 1996 1995
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
North American Information Services $30,775 $30,112 $ 9,968
Payment Services 21,302 32,581 12,719
Equifax Europe 18,160 4,688 1,094
Equifax Latin America 4,771 405 321
Other -- 1,693 16,364
Corporate 11,031 8,811 7,979
- --------------------------------------------------------------------------------------------------------
$86,039 $78,290 $48,445
========================================================================================================
</TABLE>
<PAGE>
5. In the fourth quarter of 1997, the Company recorded a loss related to the
valuation of a pending acquisition (Note 11). In the second quarter of 1996, the
Company recorded a loss related to the impairment of certain assets (Note 5). In
the fourth quarter of 1995, the Company recorded a restructuring provision (Note
12) and a settlement with the California State Lottery (Note 6). Operating
income by industry segment decreased (increased) as a result of these items as
follows:
<TABLE>
<CAPTION>
1997 1996 1995
-------------------------------------------------------------------------
ACQUISITION Asset Restructuring Lottery
(in thousands) VALUATION Impairment Provision Settlement Total
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
North American Information Services $25,000 $ -- $ 4,959 $ -- $ 4,959
Payment Services -- -- 521 -- 521
Equifax Europe -- -- -- -- --
Equifax Latin America -- -- -- -- --
Other -- 10,313 4,442 (19,665) (15,223)
Corporate -- -- 500 -- 500
- ----------------------------------------------------------------------------------------------------------------
$25,000 $10,313 $10,422 $(19,665) $ (9,243)
================================================================================================================
</TABLE>
6. Financial information by geographic area is as follows:
<TABLE>
<CAPTION>
1997 1996 1995
- ----------------------------------------------------------------------------------------------------------
(dollars in thousands) AMOUNT % Amount % Amount %
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operating revenue:
United States $1,057,032 78% $ 978,575 80% $ 893,311 81%
Canada 100,943 7 85,832 7 78,952 7
Europe 179,294 13 158,391 13 133,046 12
Latin America 28,818 2 -- - -- -
- ----------------------------------------------------------------------------------------------------------
$1,366,087 100% $1,222,798 100% $1,105,309 100%
==========================================================================================================
Operating contribution (loss):
United States $ 287,991 84% $ 260,736 88% $ 242,947 92%
Canada 19,037 5 16,551 6 15,065 6
Europe 26,908 8 15,805 5 4,617 2
Latin America 9,208 3 3,256 1 992 -
Other (131) - (14) - -- -
- ----------------------------------------------------------------------------------------------------------
$ 343,013 100 % $ 296,334 100% $ 263,621 100%
==========================================================================================================
Identifiable assets from continuing
operations at December 31:
United States $ 710,462 61% $ 639,373 63% $ 561,262 65%
Canada 84,362 7 87,533 9 70,984 8
Europe 263,750 22 251,693 25 212,010 24
Latin America 115,616 10 32,452 3 27,233 3
Other 2,914 - 53 - -- -
- ----------------------------------------------------------------------------------------------------------
$1,177,104 100 % $1,011,104 100% $ 871,489 100%
==========================================================================================================
</TABLE>
<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, 1998 (all of which are included in the consolidated
financial statements):
State or
Country of
Name of Subsidiary Incorporation
- ------------------ -------------
1nfo Inc. Georgia
Acrofax Inc./(6)/ Canada
CBI Ventures, Inc./(6)/ Georgia
Computer Ventures, Inc./(6)/ Delaware
Credence, Inc. Georgia
Credit Northwest Corporation/(6)/ Washington
Credit Union Card Services, Inc./(5)/ Wisconsin
Equifax Asia Pacific Holdings, Inc. Georgia
Equifax Card Services (Madison), Inc./(4)/ Wisconsin
Equifax Check Services, Inc./(13)/ Delaware
<PAGE>
State or
Country of
Name of Subsidiary Incorporation
- ------------------ -------------
Equifax Card Services, Inc./(13)/ Florida
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 (U.K.) Ltd./(7)/ United Kingdom
Equifax Healthcare Information Services, Inc. Georgia
Equifax Holdings (Mexico) Inc. Georgia
Equifax India Private Ltd./(3)/ India
Equifax Information Technology, Inc./(6)/ 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 Mauritius Private Limited/(3)/ Mauritius
Equifax Payment Services, Inc. Delaware
Equifax Properties, Inc. Georgia
Equifax-Rochester, Inc./(6)/ New York
Equifax South America, Inc. Georgia
Equifax U.K. Finance Ltd./(11)/ United Kingdom
Equifax U.K. Finance (No. 2)/(12)/ United Kingdom
<PAGE>
State or
Country of
Name of Subsidiary Incorporation
- ------------------ -------------
Equifax Ventures, Inc. Georgia
Financial Institution Benefit Association,
Inc./(13)/ District of Columbia
Financial Insurance Marketing
Group, Inc./(13)/ District of Columbia
First Bankcard Systems, Inc./(13)/ Georgia
Global Scan Ltd./(18)/ United Kingdom
Global Scan (USA), Inc./(15)/ Delaware
Goldleaf Technologies, Inc./(13)/ Georgia
High Integrity Systems, Inc./(13)/ California
Infolink Ltd./(22)/ United Kingdom
<PAGE>
State or
Country of
Name of Subsidiary Incorporation
- ------------------ -------------
Light Signatures, Inc./(13)/ California
Market Knowledge, Incorporated/(6)/ Illinois
Stewardship, Inc./(6)/ Mississippi
Tecnicob S.A./(7)(8)/ France
The Equifax Database Company Ltd./(7)/ Ireland
The Infocheck Group Ltd./(8)/ United Kingdom
Transax Australia plc/(21)/ United Kingdom
Transax France plc/(21)/ United Kingdom
Transax (Ireland) plc/(21)/ Ireland
Transax Ltd./(8)/ New Zealand
Transax plc./(8)/ United Kingdom
Transax pty Ltd./(19)/ Australia
Transax S.N.C./(2)(20)/ France
UAPT-Infolink, plc/(8)/ United Kingdom
<PAGE>
State or
Country of
Name of Subsidiary Incorporation
- ------------------ -------------
In addition, Registrant's subsidiary, Equifax Credit Information Services, Inc.,
owns 100% of the stock of Acrofax Inc. (Canada) which holds 84% of the stock of
Equifax Canada Inc. (Canada). Equifax Canada Inc. owns 100% of the stock of
Telecredit Canada, Inc. and 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 66% 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 Marketing Services,
S.A. (TISCA) (Chile) and Dicom S.A. (Chile).
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).
Registrant's subsidiary Equifax Asia Pacific Holdings, Inc. owns 100% of the
stock of Equifax Mauritius Private Ltd. which owns 50% of the stock of Equifax
Venture Infotek Private Ltd. (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)/Subsidiary of Equifax Credit Information Services, Inc.
<PAGE>
/(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 Luxembourg (No. 2) S.A.
/(13)/Subsidiary of Equifax Payment Services, Inc.
/(14)/Subsidiary of Global Scan Limited
/(15)/Subsidiary of Global Scan Investments Ltd.
/(16)/Subsidiary of H.P. Information plc
/(17)/Subsidiary of Infolink Ltd.
/(18)/Subsidiary of The Infocheck Group Ltd.
/(19)/Subsidiary of Transax Australia plc
/(20)/Subsidiary of Transax France plc
/(21)/Subsidiary of Transax plc
/(22)/Subsidiary of UAPT-Infolink plc
/(23)/Subsidiary of Vivat plc
<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, File No. 333-12961, File No. 33-04583, as amended,
File No. 333-42613, File No. 333-42955 and File No. 333-47599.
/s/Arthur Andersen LLP
Atlanta, Georgia
March 30, 1998
<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, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<EXCHANGE-RATE> 1
<CASH> 52,251
<SECURITIES> 0
<RECEIVABLES> 276,853
<ALLOWANCES> 6,188
<INVENTORY> 0
<CURRENT-ASSETS> 400,932
<PP&E> 219,423
<DEPRECIATION> 124,689
<TOTAL-ASSETS> 1,177,104
<CURRENT-LIABILITIES> 327,609
<BONDS> 339,301
0
0
<COMMON> 215,581
<OTHER-SE> 659,645
<TOTAL-LIABILITY-AND-EQUITY> 1,177,104
<SALES> 1,366,087
<TOTAL-REVENUES> 1,366,087
<CGS> 778,936
<TOTAL-COSTS> 778,936
<OTHER-EXPENSES> 288,243
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 20,797
<INCOME-PRETAX> 323,138
<INCOME-TAX> 137,613
<INCOME-CONTINUING> 185,525
<DISCONTINUED> 1,449
<EXTRAORDINARY> 0
<CHANGES> (3,237)
<NET-INCOME> 183,737
<EPS-PRIMARY> 1.27
<EPS-DILUTED> 1.24
</TABLE>
