Equifax 2000 Annual Report Download - page 43

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Data Processing Services Agreements The
Company has separate agreements with IBM,
EDS, and Xerox Connect which outsource por-
tions of its computer data processing operations
and related functions, and expire between 2004
and 2009. The aggregate contractual obligation
remaining under these agreements is currently
estimated to be approximately $1.105 billion
as of December 31, 2000, with no future year
expected to exceed $150 million. However,
these amounts could be more or less depend-
ing on various factors such as the inflation rate,
the introduction of significant new technolo-
gies, or changes in the Company’s data pro-
cessing 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 these agreements. However, the
agreements provide 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 21 of its officers which
provide severance pay and benefits in the
event of a termination of the officer’s employ-
ment under certain circumstances following a
“change in control” 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 plan provides
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 other criteria. At
December 31, 2000, the maximum contingent
liability under the agreements and plans was
approximately $21,316,000.
Litigation A number of lawsuits seeking dam-
ages 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 man-
agement, the ultimate resolution of these
matters will not have a materially adverse
effect on the Company’s financial position,
liquidity, or results of operations.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued...
42