Equifax 2012 Annual Report Download - page 62

60 Equifax 2012 Annual Report
Nonvested Stock. Our 2008 Omnibus Incentive Plan also provides
for awards of nonvested shares of our common stock that can be
granted to executive officers, employees and directors. Nonvested
stock awards are generally subject to cliff vesting over a period
between one to three years based on service.
The fair value of nonvested stock is based on the fair market value of
our common stock on the date of grant. However, since our
nonvested stock does not pay dividends during the vesting period,
the fair value on the date of grant is reduced by the present value of
the expected dividends over the requisite service period (discounted
using the appropriate risk-free interest rate).
In 2012, pursuant to our 2008 Omnibus Incentive Plan, certain
executive officers were granted nonvested shares in which the
number of shares is dependent upon the Company’s three-year rela-
tive total shareholder return as compared to the three-year
cumulative average quarterly shareholder return of the companies in
the S&P 500, subject to adjustment. The number of shares which
could potentially be issued ranges from zero to 200% of the target
award. The grants outstanding subject to market performance as of
December 31, 2012 would result in 181,803 shares outstanding at
100% of target and 363,606 at 200% of target at the end of the vest-
ing period. Compensation expense is recognized on a straight-line
basis over the measurement period and is based upon the fair market
value of the shares estimated to be earned at the date of grant. The
fair value of the performance-based shares is estimated on the date
of grant using a Monte-Carlo simulation.
The following table summarizes changes in our nonvested stock
during the twelve months ended December 31, 2012, 2011 and
2010 and the related weighted-average grant date fair value:
(in thousands) Shares
Weighted-Average
Grant Date
Fair Value
Nonvested at December 31, 2009 1,110 $33.10
Granted 553 $33.27
Vested (317) $38.08
Forfeited (36) $33.20
Nonvested at December 31, 2010 1,310 $31.54
Granted 513 $34.07
Vested (340) $34.34
Forfeited (52) $30.70
Nonvested at December 31, 2011 1,431 $31.79
Granted 685 $44.59
Vested (440) $29.02
Forfeited (60) $33.31
Nonvested at December 31, 2012 1,616 $37.95
The total fair value of nonvested stock that vested during the twelve
months ended December 31, 2012, 2011 and 2010, was
$19.9 million, $12.1 million and $10.3 million, respectively, based on
the weighted-average fair value on the vesting date, and
$12.8 million, $11.7 million and $12.1 million, respectively, based on
the weighted-average fair value on the date of grant. At
December 31, 2012, our total unrecognized compensation cost
related to nonvested stock was $24.7 million with a weighted-aver-
age recognition period of 1.9 years.
10. SHAREHOLDER 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 exercis-
able, 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.
11. BENEFIT PLANS
We have defined benefit pension plans and defined contribution
plans. We also maintain certain healthcare and life insurance benefit
plans for eligible retired employees. The measurement date for our
defined benefit pension plans and other postretirement benefit plans
is December 31 of each year.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued