Equifax 2015 Annual Report Download - page 60

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divestitures; the introduction of significant new technologies; foreign currency; or the general rate of inflation. In certain
circumstances (e.g., a change in control or for our convenience), we may terminate these data processing and outsourcing
agreements, and, in doing so, certain of these agreements require us to pay significant termination fees.
During 2012, we amended certain portions and terminated certain other portions of our operations support services
agreement for North America with IBM. The amended agreement extends certain terms through December 2016 and changes
certain variable cost to fixed cost intended to provide financial savings to the Company. In 2015, we further amended our IBM
agreement to extend our commitment for services provided in the U.S. to 2020. Under our agreement with IBM (which covers
our operations in North America and Europe), we have outsourced certain of our mainframe and midrange operations, help
desk service and desktop support functions, and the operation of our voice and data networks. The scope of services provided
by IBM, and the term of our agreement with respect to such services, varies by geography and location. The estimated future
minimum contractual obligation under the revised North America (US and Canada) agreements is approximately $30 million
for the remaining term, with no individual year's minimum expected to exceed approximately $20 million. We may terminate
certain portions of this agreement without penalty in the event that IBM is in material breach of the terms of the agreement.
During 2015, 2014 and 2013, we paid approximately $50 million, $50 million and $60 million, respectively, for these services.
Change in Control Agreements. We have entered into change in control severance agreements with certain key
executives. The agreements provide for, among other things, certain payments and benefits in the event of a qualifying
termination of employment (i.e., termination of employment by the executive for “good reason” or termination of employment
by the Company without “cause,” each as defined in the agreements) following a change in control of the Company. In the
event of a qualifying termination, the executive will become entitled to continuation of group health, dental, vision, life,
disability, 401(k) and similar benefits for two or three years, depending on the eligibility, as well as a lump sum severance
payment, all of which differs by executive.
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, 2015, payments of approximately $54.7
million would have been made (excluding tax gross-up amounts of $30.8 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 restrictions on any outstanding nonvested stock awards. With respect to unvested performance based share
awards dependent upon the Company’s three-year relative total shareholder return, if at least one calendar year of performance
during the performance period has been completed prior to the change in control event, the awards will be paid out based on the
Company’s performance at that time; otherwise the payout of shares will be at 100% of the target award.
Guarantees. We will from time to time issue standby letters of credit, performance bonds or other guarantees in the
normal course of business. The aggregate notional amount of all performance bonds and standby letters of credit is not material
at December 31, 2015, and all have a remaining maturity of one year or less. We may issue other guarantees in ordinary course
of business. The maximum potential future payments we could be required to make under the guarantees is not material at
December 31, 2015. We have agreed to guarantee the liabilities and performance obligations (some of which have limitations)
of a certain debt collections and recovery management VIE under its commercial agreements. We cannot reasonably estimate
our potential future payments under the guarantees and related provisions described above because we cannot predict when and
under what circumstances these provisions may be triggered. We had no accruals related to guarantees on our Consolidated
Balance Sheets at December 31, 2015.
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
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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