Equifax 2007 Annual Report Download - page 75

EQUIFAX | 2007 ANNUAL REPORT 73
2005 Pro Forma Impact.
Prior to January 1, 2006, we accounted for stock-based compensation
under APB 25 and related interpretations, as permitted by SFAS 123
and SFAS No. 148, “Accounting for Stock-Based Compensation –
Transitional Disclosure.” Accordingly, by our use of the intrinsic
value method to account for stock-based employee compensation,
we did not recognize compensation cost in connection with our
stock option plans during the twelve months ended December 31,
2005. If we had elected to recognize compensation cost for our
stock option plans during the twelve months ended December 31,
2005 based on the grant date fair value as prescribed by SFAS 123,
net income and EPS would have been reduced to the pro forma
amounts indicated in the table below:
Twelve Months Ended
(In millions, except per share amounts) December 31, 2005
Net income, as reported $246.5
Add: Total stock-based employee compensation
expense, net of related tax effect, included in
reported net income 5.2
Deduct: Total stock-based employee compensation
expense determined under fair value-based method
for all awards, net of related tax effects (7.2)
Pro forma net income $244.5
Earnings per share:
Basic – as reported $ 1.90
Basic – pro forma $ 1.88
Diluted – as reported $ 1.86
Diluted – pro forma $ 1.85
8.
SHAREHOLDERS’ EQUITY
Employee Benefi t Trusts. We maintain three employee benefi t trusts
for the purpose of satisfying obligations under certain benefi t plans.
These trusts held 3.7 million and 3.9 million shares of Equifax
stock with a value, at cost, of $57.7 million and $59.5 million at
December 31, 2007 and 2006, respectively, as well as cash, which
was not material for both periods presented. The three employee
benefi ts trusts are as follows:
• The Employee Stock Benefits Trust, which constitutes a
funding vehicle for a variety of employee benefit programs.
Each year, this trust releases a certain number of shares which
are distributed to employees in the course of share option
exercises or nonvested share distributions upon vesting. The
cash in this trust can also be used to satisfy our obligations
under other benefit plans.
• The Executive Life and Supplemental Retirement Benefit
Plan Grantor Trust is used to ensure that the insurance
premiums due under the Executive Life and Supplemental
Retirement Benefit Plan are paid in case we fail to make
scheduled payments following a change in control, as defined
in this trust agreement.
• The Supplemental Executive Retirement Plans Grantor Trust’s
assets are dedicated to ensure the payment of benefits accrued
under our Supplemental Executive Retirement Plans in case
of a change in control, as defined in this trust agreement.
The assets in these plans are subject to creditors claims in case
of insolvency of Equifax Inc.
Rights Plan. Our Board of Directors has adopted a shareholder
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, or 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 independently 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 commences 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.