Equifax 2009 Annual Report Download - page 59

Agreement with Computer Sciences Corporation. We have an the agreements. Change in control events potentially triggering ben-
agreement with Computer Sciences Corporation, or CSC, and cer- efits under the agreements would occur, subject to certain excep-
tain of its affiliates, collectively CSC, under which CSC-owned credit tions, if (1) any person acquires 20% or more of our voting stock;
reporting agencies utilize our computerized credit database services. (2) upon a merger or other business combination, our shareholders
CSC retains ownership of its credit files and the revenues generated receive less than two-thirds of the common stock and combined
by its credit reporting activities. We receive a processing fee for voting power of the new company; (3) we sell or otherwise dispose
maintaining the database and for each report supplied. The agree- of all or substantially all of our assets; or (4) we liquidate or dissolve.
ment will expire on July 31, 2018 and is renewable at the option of
CSC for successive ten-year periods. The agreement provides us If these change in control agreements had been triggered as of
with an option to purchase CSC’s credit reporting business if it does December 31, 2009, payments of approximately $54.6 million would
not elect to renew the agreement or if there is a change in control have been made (excluding tax gross-up amounts of $12.8 million).
of CSC while the agreement is in effect. Under the agreement CSC Under the Company’s existing director and employee stock benefit
also has an option, exercisable at any time, to sell its credit report- plans, a change in control generally would result in the immediate
ing business to us. The option expires in 2013. The option exercise vesting of all outstanding stock options and satisfaction of the
price will be determined by a third-party appraisal process and restrictions on any outstanding nonvested stock awards.
would be due in cash within 180 days after the exercise of the
option. We estimate that if the option were exercised at Decem- Guarantees. We will from time to time issue standby letters of
ber 31, 2009, the price range would approximate $600 million to credit, performance bonds or other guarantees in the normal course
$675 million. This estimate is based solely on our internal analysis of of business. The aggregate notional amount of all performance
the value of the business, current market conditions and other fac- bonds and standby letters of credit is not material at December 31,
tors, all of which are subject to constant change. Therefore, the 2009, and all have a remaining maturity of one year or less. The
actual option exercise price could be materially higher or lower than maximum potential future payments we could be required to make
the estimated amount. under the guarantees is not material at December 31, 2009.
Change in Control Agreements. We have entered into change in General Indemnifications. We are the lessee under many real
control severance agreements with certain key executives. The estate leases. It is common in these commercial lease transactions
agreements provide for, among other things, certain payments and for us, as the lessee, to agree to indemnify the lessor and other
benefits in the event of a qualifying termination of employment related third parties for tort, environmental and other liabilities that
(i.e., termination of employment by the executive for ‘‘good reason’’ arise out of or relate to our use or occupancy of the leased prem-
or termination of employment by the Company without ‘‘cause,’’ ises. This type of indemnity would typically make us responsible to
each as defined in the agreements) following a change in control of indemnified parties for liabilities arising out of the conduct of, among
the Company. In the event of a qualifying termination, the executive others, contractors, licensees and invitees at or in connection with
will become entitled to continuation of group health, dental, vision, the use or occupancy of the leased premises. This indemnity often
life, disability, 401(k) and similar benefits for three years, as well as a extends to related liabilities arising from the negligence of the
lump sum severance payment, all of which differs by executive. indemnified parties, but usually excludes any liabilities caused by
either their sole or gross negligence and their willful misconduct.
The change in control agreements have a five-year term and auto-
matically renew for another five years unless we elect not to renew
EQUIFAX 2009 ANNUAL REPORT 57
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