Equifax 2006 Annual Report Download - page 74

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
72 EQUIFAX 2006 ANNUAL REPORT
Rights Plan. Our Board of Directors has adopted a share-
holder rights plan designed to protect our shareholders
against abusive takeover attempts and tactics. The rights
plan operates to dilute the interests of any person or group
attempting to take control of the Company if the attempt is
not deemed by our Board of Directors to be in the best
interests of our shareholders. Under the rights agreement,
as originally adopted in October 1995 and amended and
restated in October 2005, holders of our common stock
were granted one right to purchase common stock (“Right”)
for each outstanding share of common stock held of record
on November 24, 1995. All newly issued shares of common
stock since that date have been accompanied by a Right.
The Rights will become exercisable and trade indepen-
dently from our common stock if a person or group
acquires or obtains the right to acquire 20% or more of
Equifax’s outstanding shares of common stock, or com-
mences a tender or exchange offer that would result in that
person or group acquiring 20% or more of the outstanding
common stock, in each case without the consent of our
Board. In the event the Rights become exercisable, each
holder (other than the acquiring person or group) will be
entitled to purchase that number of shares of securities or
other property of Equifax having a market value equal to
two times the exercise price of the Right. If Equifax were
acquired in a merger or other business combination, each
Right would entitle its holder to purchase the number of
the acquiring company’s common stock having a market
value of two times the exercise price of the Right. In either
case, our Board may choose to redeem the Rights for $0.01
per Right before they become exercisable. The Rights will
expire on November 6, 2015, unless earlier redeemed,
exchanged or amended by the Board.
9.
BENEFIT PLANS
We have defi ned benefi t pension plans and defi ned contri-
bution plans. Substantially all U.S., Canadian and U.K.
employees participate in one or more of these plans. We
also maintain certain healthcare and life insurance benefi t
plans for eligible retired employees. The measurement date
for our defi ned benefi t pension plans and other postretire-
ment benefi t plans is December 31st of each year.
Pension Benefi ts. Pension benefi ts are provided through
U.S. and Canadian defi ned benefi t pension plans and two
supplemental executive defi ned benefi t pension plans.
U.S. and Canadian Retirement Plans. Prior to January 1,
2005, we had one non-contributory qualifi ed retirement
plan covering most U.S. salaried employees (the U.S.
Retirement Income Plan, or “USRIP”) and a defi ned benefi t
plan for most salaried employees in Canada (the Canadian
Retirement Income Plan, or “CRIP”). Benefi ts of both plans
are primarily a function of salary and years of service.
On January 1, 2005, we separated the USRIP into two
defi ned benefi t plans subject to the Employee Retirement
Income Security Act (“ERISA”). The new plan, the Equifax
Inc. Pension Plan (“EIPP”), was funded in January 2005
with the transfer of $17.0 million of assets from the USRIP
and a company contribution of $20.0 million. In November
2005, an additional $30.1 million of plan assets were
transferred from the USRIP to the EIPP. At the time of
separation, the EIPP covered all active employee partici-
pants of Equifax, and the USRIP covered all inactive retired
and vested participants as of that date. Inactive participants
constituted approximately 85% of total participants prior to
the separation. The benefi ts of participants in both plans
were unaffected by the separation. The two groups of partici-
pants – active and inactive – had projected patterns of
actuarial liabilities which were markedly different, due to the
demographic differences between the two populations. The
two plans will have separate assumed rates of return and
separate asset allocation strategies, which will allow us to
more effectively fund our pension liabilities. Additionally, the
assets of one plan will not be available to fund the liabilities
of the other plan. The CRIP was not impacted by the separa-
tion of the USRIP.
In 2006, we made a discretionary contribution of $20.0
million to the EIPP and $2.0 million to fund our other post-
retirement benefi t plans. At December 31, 2006, the USRIP
and the EIPP met or exceeded ERISA’s minimum funding
requirements. We do not expect to have to make any mini-
mum funding contributions under ERISA for 2007 with
respect to the USRIP or the EIPP, based on applicable law
as currently in effect. In January 2007, however, we made a
discretionary contribution of $12.0 million to the EIPP.
The annual report produced by our consulting actuaries
specifi es the funding requirements for our plans, based on
projected benefi ts for plan participants, historical investment
results on plan assets, current discount rates for liabilities,
assumptions for future demographic developments, invest-
ment performance and recent changes in statutory
requirements. We may elect to make additional discretionary
contributions to our plans in excess of minimum funding
requirements, subject to statutory limitations.
Supplemental Retirement Plans. We maintain two supple-
mental executive retirement programs for certain key
employees. The plans, which are unfunded, provide
supplemental retirement payments, based on salary
and years of service.
Other Benefi ts. We maintain certain healthcare and life
insurance benefi t plans for eligible retired employees.
Substantially all of our U.S. employees may become eligible
for the healthcare benefi ts if they reach retirement age
while working for us and satisfy certain years of service
requirements. The retiree life insurance program was fro-
zen to new participants on December 31, 2003. We accrue
the cost of providing healthcare benefi ts over the active
service period of the employee.