Equifax 2011 Annual Report Download - page 57

The change in control agreements have a three-year term and
automatically renew for another three years unless we elect not to
renew the agreements. Change in control events potentially triggering
benefits under the agreements would occur, subject to certain
exceptions, if (1) any person acquires 20% or more of our voting
stock; (2) upon a merger or other business combination, our
shareholders receive less than two-thirds of the common stock and
combined voting power of the new company; (3) we sell or otherwise
dispose of all or substantially all of our assets; or (4) we liquidate
or dissolve.
If these change in control agreements had been triggered as of
December 31, 2011, payments of approximately $46.1 million would
have been made (excluding tax gross-up amounts of $19.3 million).
Under the Company’s existing director and employee stock benefit
plans, a change in control generally would result in the immediate
vesting of all outstanding stock options and satisfaction of the restric-
tions on any outstanding nonvested stock awards.
Guarantees. We will from time to time issue standby letters of credit,
performance bonds or other guarantees in the normal course of busi-
ness. The aggregate notional amount of all performance bonds and
standby letters of credit is not material at December 31, 2011, and all
have a remaining maturity of one year or less. The maximum potential
future payments we could be required to make under the guarantees
is not material at December 31, 2011.
General Indemnifications. We are the lessee under many real estate
leases. It is common in these commercial lease transactions for us,
as the lessee, to agree to indemnify the lessor and other related third
parties for tort, environmental and other liabilities that arise out of or
relate to our use or occupancy of the leased premises. This type of
indemnity would typically make us responsible to indemnified parties
for liabilities arising out of the conduct of, among others, contractors,
licensees and invitees at or in connection with the use or occupancy
of the leased premises. This indemnity often extends to related
liabilities arising from the negligence of the indemnified parties, but
usually excludes any liabilities caused by either their sole or gross
negligence and their willful misconduct.
Certain of our credit agreements include provisions which require us
to make payments to preserve an expected economic return to the
lenders if that economic return is diminished due to certain changes
in law or regulations. In certain of these credit agreements, we also
bear the risk of certain changes in tax laws that would subject pay-
ments to non-U.S. lenders to withholding taxes.
In conjunction with certain transactions, such as sales or purchases
of operating assets or services in the ordinary course of business, or
the disposition of certain assets or businesses, we sometimes
provide routine indemnifications, the terms of which range in duration
and sometimes are not limited.
The Company has entered into indemnification agreements with its
directors and executive officers. Under these agreements, the
Company has agreed to indemnify such individuals to the fullest
extent permitted by law against liabilities that arise by reason of their
status as directors or officers and to advance expenses incurred by
such individuals in connection with the related legal proceedings. The
Company maintains directors and officers liability insurance coverage
to reduce its exposure to such obligations.
We cannot reasonably estimate our potential future payments under
the indemnities and related provisions described above because we
cannot predict when and under what circumstances these provisions
may be triggered. We have no accrual related to indemnifications on
our Consolidated Balance Sheets at December 31, 2011 and 2010.
Subsidiary Dividend and Fund Transfer Limitations. The ability of
some of our subsidiaries and associated companies to transfer funds
to us is limited, in some cases, by certain restrictions imposed by
foreign governments, which do not, individually or in the aggregate,
materially limit our ability to service our indebtedness, meet our cur-
rent obligations or pay dividends.
Contingencies. We are involved in legal proceedings, claims and
litigation arising in the ordinary course of business. We periodically
assess our exposure related to these matters based on the informa-
tion which is available. We have recorded accruals in our
Consolidated Financial Statements for those matters in which it is
probable that we have incurred a loss and the amount of the loss, or
range of loss, can be reasonably estimated.
For other legal proceedings, claims and litigation, we have recorded
loss contingencies that are immaterial, or we cannot reasonably
estimate the potential loss because of uncertainties about the
outcome of the matter and the amount of the loss or range of loss.
We also accrue for unpaid legal fees for services performed to date.
Although the final outcome of these other matters cannot be
predicted with certainty, any possible adverse outcome arising from
these matters is not expected to have a material impact on our
Consolidated Financial Statements, either individually or in the
aggregate. However, our evaluation of the likely impact of these mat-
ters may change in the future.
Tax Matters. In 2003, the Canada Revenue Agency, or CRA,
issued Notices of Reassessment, asserting that Acrofax, Inc., a
wholly-owned Canadian subsidiary of Equifax, was liable for
additional tax for the 1995 through 2000 tax years, related to certain
intercompany capital contributions and loans. Subsequently in 2003,
we made a statutorily-required deposit for a portion of the claim. On
May 31, 2011, we settled this CRA claim for $1.1 million (1.1 million
in Canadian dollars) and received a net refund of the deposit and
accrued interest in the amount of $9.9 million (9.7 million in
Canadian dollars).
EQUIFAX 2011 ANNUAL REPORT 55