SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
EQUIFAX INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/X/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
[paste-up logo and letterhead]
Dear Shareholder:
The 1996 Annual Meeting of Shareholders of Equifax Inc. will be held in the
Walter C. Hill Auditorium at the High Museum of Art, 1280 Peachtree Street,
N.E., Atlanta, Georgia. The meeting is scheduled for 10:00 a.m. on Wednesday,
May 1, 1996.
Information concerning the meeting, the nominees for the Board of Directors, and
other pertinent information is set forth in the Proxy Statement which follows.
As is our custom, a brief report will be made at this meeting on highlights for
the year 1995 as well as significant developments thus far in 1996. I sincerely
hope that you will be able to attend this meeting and that I will have the
opportunity to speak with you personally.
Please sign and return your proxy promptly, whether or not you plan to attend.
Your vote is very important to the Company.
On behalf of the Officers and Directors, I wish to thank you for your interest
in the Company and your confidence in its future.
Sincerely,
Chairman
Atlanta, Georgia
March 28, 1996
YOUR VOTE IS IMPORTANT.
PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD PROMPTLY.
EQUIFAX INC.
1600 PEACHTREE STREET, N.W.
P.O. BOX 4081
ATLANTA, GEORGIA 30302
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 1, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Equifax Inc.
will be held on May 1, 1996, at 10:00 a.m., local time, in the Walter C. Hill
Auditorium at the High Museum of Art, 1280 Peachtree Street, N.E., Atlanta,
Georgia, for the following purposes:
(1) To elect six Directors of the Company, one to serve a term of one year
and five to serve terms of three years;
(2) To vote on a proposal to approve the amended Equifax Inc. 1988
Performance Share Plan for Officers;
(3) To vote on a proposal to amend the Company's Articles of Incorporation
to increase the amount of authorized common stock;
(4) To vote on a proposal to amend the Company's Articles of Incorporation
to authorize "blank check" preferred stock;
(5) To vote on a proposal to amend the Company's Articles of Incorporation
to adopt the minimum shareholder vote required under current State of
Georgia law;
(6) To vote on a proposal to amend and restate the Company's Articles of
Incorporation to modernize and conform to current State of Georgia law;
(7) To appoint Arthur Andersen LLP as independent public accountants of the
Company for the year 1996; and
(8) To transact such other business as may properly come before the
meeting.
Shareholders of record at the close of business March 12, 1996, are entitled to
notice of and to vote at the meeting.
By order of the Board of Directors
T. H. Magis
Secretary
Atlanta, Georgia
March 28, 1996
PLEASE SIGN AND RETURN YOUR PROXY EVEN THOUGH YOU PLAN TO ATTEND THE MEETING. IF
YOU DO ATTEND, YOU MAY, OF COURSE, VOTE IN PERSON.
EQUIFAX INC.
1600 PEACHTREE STREET, N.W.
P.O. BOX 4081
ATLANTA, GEORGIA 30302
March 28, 1996
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 1, 1996
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Equifax Inc. of proxies to be used at the Annual Meeting
of Shareholders to be held in the Walter C. Hill Auditorium at the High Museum
of Art, 1280 Peachtree Street, N.E., Atlanta, Georgia, on May 1, 1996, at 10:00
a.m., local time. The approximate date on which the 1995 Annual Report, Proxy
Statement and form of proxy are first being sent or given to Shareholders is
March 28, 1996.
Any Shareholder who executes and delivers a proxy may revoke it any time prior
to its use.
All shares represented by effective proxies will be voted as specified in
connection with the six nominees for election to the Board of Directors,
proposed amendments to the Equifax Inc. 1988 Performance Share Plan for
Officers, amendment and restatement of the Company's Articles of Incorporation
and appointment of independent public accountants for the year 1996, all as more
fully described elsewhere herein. Unless otherwise specified, the proxies will
be voted in favor of the matters mentioned above.
Only holders of issued and outstanding shares of common stock of the Company, of
record, at the close of business on March 12, 1996, are entitled to notice of,
or to vote at, the meeting. The number of shares of common stock outstanding and
entitled to vote as of March 12, 1996, was 153,559,524. Each share is entitled
to one vote.
The solicitation of proxies will be made primarily by mail. Proxies may also be
solicited personally and by telephone or facsimile transmission by regular
employees of the Company, without any additional remuneration and at minimal
cost. Also, the Company has retained the firm of Morrow & Co., Inc. to assist in
the solicitation of proxies for a fee estimated at $15,000 plus expenses. The
Company intends to request banks, brokerage houses, custodians, nominees and
fiduciaries to forward the proxy material to their principals and request
authority for the execution of proxies. The Company will reimburse such persons
for their expenses in so doing, in accordance with the rules and regulations of
the New York Stock Exchange. The cost of soliciting the proxies will be borne by
the Company.
ELECTION OF DIRECTORS
(PROXY ITEM NO. 1)
The Board of Directors is divided into three classes with each class elected for
three year terms. Terms are staggered so that one class is elected each year.
Due to the voluntary resignation of Dr. Leroy Keith, a vacancy exists in the
class whose members' terms expire in 1997. To maintain equal class size, Derek
V. Smith is nominated to serve for a term of one year. Messrs. Chapman,
Forrestal, Irvin, Riddle and Dr. Siegel, are nominated for election as Directors
for a term of three years. Proxies cannot be voted for a greater number of
persons than the nominees named below.
Proxies in the accompanying form will be voted for the six nominees listed below
to serve for the terms indicated or until their successors are elected and have
qualified. Each nominee must receive a plurality of the votes cast by the shares
entitled to vote at the meeting at which a quorum is present. A quorum exists if
one-half of all shares of the capital stock of the Company entitled to vote at
the meeting is present, either in person or represented by proxy. Abstentions
and broker non-votes are each included in determining the number of
shares present and voting, with each being tabulated separately. Abstentions are
counted in tabulations of votes for election of Directors. Broker non-votes are
counted as abstentions. SunTrust Bank, Atlanta, the Company's transfer agent,
tabulates votes through the use of an automated system.
NOMINEE FOR TERM EXPIRING IN 1997
NAME EXPERIENCE
- ---------------------------- ---------------------------------------------------------------
Derek V. Smith Executive Vice President of the Company and Group Executive of
the Company's Insurance Services Group. Mr. Smith has overall
responsibility for the Company's personal life, health, auto
and property underwriting and claims reports, health
measurements, medical history reports, claim investigations,
motor vehicle records, specimen testing for life and health
insurance applicants and employment evaluation services and
related international operations. He has served as an Executive
Officer of the Company since 1990. He is 41.
NOMINEES FOR TERMS EXPIRING IN 1999
NAME EXPERIENCE
- ---------------------------- ---------------------------------------------------------------
Thomas F. Chapman Executive Vice President of the Company and Group Executive of
the Company's Financial Services Group. Mr. Chapman has overall
responsibility for the Company's credit marketing, target
marketing, credit reporting, collection and risk management,
check and credit card processing services and related
international operations. He has served as an Executive Officer
of the Company since 1990 and has served as a Director since
January 1994. He is 52.
Robert P. Forrestal Partner, Smith, Gambrell & Russell, a law firm located in
Atlanta, Georgia. Mr. Forrestal has served as a partner with
this firm since early 1996. Prior to that, Mr. Forrestal served
as President and Chief Executive Officer of the Federal Reserve
Bank of Atlanta from 1983 through 1995. He is 64.
Tinsley H. Irvin Retired Chairman and Chief Executive Officer, Alexander &
Alexander Services Inc., an international insurance brokerage
company. Mr. Irvin served in various executive capacities with
Alexander & Alexander Services Inc. or its subsidiaries for
more than five years. Mr. Irvin has served as a Director of the
Company since 1989. He is 62.
D. Raymond Riddle Retired Chairman of the Board and Chief Executive Officer of
National Service Industries, Inc., a diversified manufacturing
and service company. Mr. Riddle served in an executive capacity
with National Service Industries, Inc. from January 1993 until
his retirement in February 1996. Prior to that, Mr. Riddle
served as President and Chief Executive Officer of Wachovia
Corporation of Georgia, a bank holding company, President and
Chief Executive Officer of Wachovia Bank of Georgia, N.A., and
Executive Vice President of Wachovia Corporation, the parent of
Wachovia Corporation of Georgia. Mr. Riddle was employed by
these organizations for more than five years. He serves as a
Director of National Service Industries, Inc., Atlanta Gas
Light Company, Atlantic American Corporation, Munich American
Reassurance Company, Wachovia Corporation of Georgia, Wachovia
Bank of Georgia, N.A. and Fuqua Enterprises, Inc. Mr. Riddle
has served as a Director of the Company since 1989. He is 62.
2
NAME EXPERIENCE
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Betty L. Siegel, Ph.D. President of Kennesaw State College, a senior college in the
University System of Georgia. Dr. Siegel has been President of
Kennesaw State College for more than five years. She serves as
a Director of Atlanta Gas Light Company and National Service
Industries, Inc. Dr. Siegel has served as a Director of the
Company since 1987. She is 65.
DIRECTORS WHOSE TERMS CONTINUE UNTIL 1997
NAME EXPERIENCE
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D. W. McGlaughlin President and Chief Executive Officer of the Company. He has
served as an Executive Officer of the Company for more than
five years. He serves as a Director of Wachovia Corporation of
Georgia and its subsidiary Wachovia Bank of Georgia, N.A. Mr.
McGlaughlin has served as a Director of the Company since 1990.
He is 59.
Larry L. Prince Chairman of the Board and Chief Executive Officer, Genuine
Parts Company, an automotive parts wholesaler. Mr. Prince has
been employed in various executive capacities by Genuine Parts
Company for more than five years. He serves as a Director of
SunTrust Bank of Georgia, SunTrust Bank, Atlanta, Crawford &
Co., Southern Mills, Inc., John H. Harland Company and UAP,
Inc. (Canada). Mr. Prince has served as a Director of the
Company since 1988. He is 57.
C. B. Rogers, Jr. Chairman of the Board of the Company. Prior to his retirement
on December 31, 1995, Mr. Rogers served as Chairman and Chief
Executive Officer of the Company. Mr. Rogers has served as an
Executive Officer of the Company for more than five years. He
serves as a Director of Sears, Roebuck & Co., Dean Witter,
Discover & Co., Briggs & Stratton Corporation and Oxford
Industries, Inc. Mr. Rogers has served as a Director of the
Company since 1978. He is 66.
L. W. Sullivan, M.D. President of Morehouse School of Medicine, a private medical
school located in Atlanta, Georgia. Dr. Sullivan has been
President of Morehouse School of Medicine since January 1993.
Prior to that, Dr. Sullivan served as Secretary of the U.S.
Department of Health and Human Services from March 1989 to
January 1993. He serves as a Director of General Motors
Corporation, 3-M Company, Bristol-Myers Squibb, CIGNA
Corporation, Georgia-Pacific Corporation and Household
International. Dr. Sullivan has served as a Director of the
Company since January 1995. He is 62.
DIRECTORS WHOSE TERMS CONTINUE UNTIL 1998
NAME EXPERIENCE
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Lee A. Ault, III Private Investor. Prior to his retirement in January 1992, Mr.
Ault was Senior Vice President of the Company and Chief
Executive Officer of Telecredit, Inc., which was acquired by
the Company in December 1990. Prior to the acquisition of
Telecredit, Inc. by the Company, Mr. Ault served as Chairman
and Chief Executive Officer of Telecredit, Inc. for more than
five years. He serves as a Director of Alex Brown Incorporated,
Sunrise Medical Inc. and Viking Office Products, Inc. Mr. Ault
has served as a Director of the Company since 1991. He is 59.
3
NAME EXPERIENCE
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Ron D. Barbaro Retired President of The Prudential Insurance Company of
America, an international multi-line insurance company. Prior
to his retirement in December 1992, Mr. Barbaro served in
various executive positions with The Prudential Insurance
Company of America or its subsidiaries for more than five
years. He serves as a Director of Prudential of America Life
Insurance Company (Canada), the Canadian Prudential Mutual
Funds, The Thomson Corporation, Canbra Foods Limited, Flow
International, Inc. and Clairvest Group, Inc. Mr. Barbaro has
served as a Director of the Company since 1992. He is 64.
John L. Clendenin Chairman of the Board and Chief Executive Officer, BellSouth
Corporation, a regional telephone utility. Mr. Clendenin has
been Chairman and Chief Executive Officer of BellSouth
Corporation since 1984. He serves as a Director of BellSouth
Corporation, Wachovia Corporation, Providian Corporation, The
Kroger Company, Coca-Cola Enterprises, Inc., RJR Nabisco, Inc.
and Springs Industries, Inc. Mr. Clendenin has served as a
Director of the Company since 1982. He is 61.
A. W. Dahlberg Chairman of the Board, President and Chief Executive Officer,
The Southern Company, a regional electric utility holding
company. Mr. Dahlberg has served in an executive capacity with
The Southern Company since January 1994. Prior to that, he
served as President and Chief Executive Officer of Georgia
Power Company, an electric utility and largest subsidiary of
The Southern Company. Mr. Dahlberg has served in various
executive positions with The Southern Company or its
subsidiaries for more than five years. He serves as a Director
of The Southern Company, SunTrust Bank of Georgia, SunTrust
Bank, Atlanta, and Protective Life Corporation. Mr. Dahlberg
has served as a Director of the Company since 1992. He is 55.
L. Phillip Humann President of SunTrust Banks, Inc., a multi-bank holding
company. Mr. Humann has served in various executive positions
with SunTrust Banks, Inc. or its subsidiary SunTrust Bank,
Atlanta, for more than five years. He serves as a Director of
SunTrust Banks, Inc., Coca-Cola Enterprises, Inc. and Haverty
Furniture Companies, Inc. Mr. Humann has served as a Director
of the Company since 1992. He is 50.
If any nominee shall be unable to serve, the persons named in the proxy may vote
for a substitute nominee. The management has no reason to believe that any
nominee will be unable to serve. There are no family relationships between any
Director, person nominated to be a Director or Executive Officer of the Company
or its subsidiaries. Except for Equifax Payment Services, Inc., formerly
Telecredit, Inc., none of the companies or organizations named in the above
table is a parent, subsidiary or other affiliate of the Company.
CERTAIN RELATIONSHIPS
In 1995, the Company was indebted, in the ordinary course of its business, to
Wachovia Bank of Georgia, N.A. and SunTrust Bank, Atlanta. The highest amount of
indebtedness during 1995 to Wachovia Bank of Georgia, N.A. was $91,890,000
composed of $31,890,000 in long-term debt and $60,000,000 in short-term debt.
The highest amount of indebtedness during 1995 to SunTrust Bank, Atlanta was
$66,340,341 composed of $36,340,341 in long-term debt and $30,000,000 in
short-term debt. Rates of interest charged on each of these debts were
competitive with other lending institutions. In September 1990, the Company
entered into a Loan Agreement with Wachovia Bank of Georgia, N.A. and SunTrust
Bank, Atlanta and four other commercial banks, whereby a $450 million,
five-year, committed revolving credit facility was established
4
to be used by the Company for general corporate purposes. Wachovia Bank of
Georgia, N.A. served as Co-Agent and Administrative Agent under this Loan
Agreement. Rates of interest charged pursuant to this Loan Agreement were
competitive with other lending institutions. In August 1995, the Company
replaced this revolving credit facility by entering into a Loan Agreement with
Wachovia Bank of Georgia, N.A. and SunTrust Bank, Atlanta and six other
commercial banks. Under this new Loan Agreement, a $550 million, five-year,
committed revolving credit facility was established to be used by the Company
for general corporate purposes. Wachovia Bank of Georgia, N.A. also serves as
Co-Agent and Administrative Agent under this Loan Agreement. Rates of interest
charged pursuant to this Loan Agreement are competitive with other lending
institutions. During 1995, $60,000,000 in short-term debt was borrowed by the
Company from Wachovia Bank of Georgia, N.A. under the replacement revolving loan
facility, which figure is included in the short-term debt figure noted above. No
other funds were borrowed or owed by the Company under either revolving loan
facility during 1995.
Messrs. Riddle and McGlaughlin serve as Directors of Wachovia Bank of Georgia,
N.A. and Wachovia Corporation of Georgia. Mr. Clendenin is a Director of
Wachovia Corporation, the parent of Wachovia Corporation of Georgia. Mr. Humann
is President and a Director of SunTrust Banks, Inc. which is the parent of
SunTrust Bank of Georgia. Messrs. Dahlberg and Prince are Directors of SunTrust
Bank of Georgia and its subsidiary SunTrust Bank, Atlanta.
COMMITTEES OF THE BOARD
The Board of Directors of Equifax Inc. met four times during 1995. The
committees of the Board, described below, met at various intervals as indicated.
All members of the Board of Directors attended at least 75% of the meetings of
the Board and the various committees of the Board of which they were members.
EXECUTIVE COMMITTEE
Members are Messrs. Rogers (Chairman), McGlaughlin, Clendenin and Riddle. The
Executive Committee met seven times during 1995. This Committee, in general, may
exercise the powers of the Board in managing the business and property of the
Company during the intervals between Board meetings, subject to Board direction.
The Committee also sets salaries for Executive Officers other than officers who
are members of the Executive Committee pursuant to guidelines established by the
Management Compensation Committee.
MANAGEMENT COMPENSATION COMMITTEE
Members are Messrs. Irvin (Chairman), Humann and Prince. The Management
Compensation Committee met three times during 1995. This Committee is
responsible for all decisions regarding the Chief Executive Officer's and Chief
Operating Officer's compensation and for establishing and administering
compensation policies and incentive compensation plans for Executive Officers.
AUDIT COMMITTEE
Members are Messrs. Riddle (Chairman), Dahlberg and Dr. Sullivan. The Audit
Committee met two times during 1995. The Committee meets with the Company's
independent public accountants to review (1) the scope of audit work to be
performed, (2) the results of the annual audit of the financial statements and
(3) other matters related to accounting and auditing.
PENSION, THRIFT AND GROUP BENEFIT PLANS COMMITTEE
Members are Messrs. Barbaro (Chairman), Prince and Rogers. The Pension, Thrift
and Group Benefit Plans Committee met one time during 1995. The Committee is
responsible for reporting to the Board periodically as to the effectiveness and
the funded status of the Company's retirement and thrift plans.
5
PUBLIC ISSUES COMMITTEE
Members are Dr. Siegel (Chairman) and Messrs. Ault and McGlaughlin. The Public
Issues Committee met one time during 1995. The Committee reviews significant
public issues of concern to the shareholders, the Company, the business
community or the general public and makes recommendations to the Board and
Company management as deemed appropriate.
NOMINATING COMMITTEE
The Board does not have a Nominating Committee or any other Committee performing
a similar function.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table reflects information relating to shares of common stock
owned by the Equifax Inc. Employees Thrift Plan as of January 1, 1996, and
information relating to share ownership as reported pursuant to Section 13(d) or
13(g) of the Securities Exchange Act of 1934, as amended. The number of
outstanding shares of Equifax Inc. common stock as of January 1, 1996 was
156,353,430. All outstanding equity securities are of a single class of common
stock.
PERCENT OF
CLASS (BASED ON
NAME AND ADDRESS AMOUNT (NUMBER OF NUMBER OF SHARES
OF BENEFICIAL SHARES) AND NATURE OF OUTSTANDING
OWNER BENEFICIAL OWNERSHIP(1. AS OF 1/1/96)
- ------------------------------------- ---------------------------------- ----------------
Equifax Inc. Employees Thrift Plan -0- Sole voting power
1600 Peachtree Street -0- Shared voting power
Atlanta, Georgia 30309 8,222,952 Sole investment power % 5.3
-0- Shared investment power
8,222,952 Aggregate amount(2.
(1.) Figures shown reflect 2-for-1 stock split effective November 24, 1995.
(2.) Participants in the Thrift Plan have the right to direct the Plan Trustee's
voting of shares held for their individual accounts. In the absence of such
direction, the Trustee may not vote said shares.
6
The following table reflects information, as of January 1, 1996, relating to
shares of common stock owned by all Directors and Nominees for Director, by each
of the Executive Officers named in the Summary Compensation Table which follows
and by all Directors and Executive Officers as a group. Share ownership shown
represents sole voting and investment power of shares.
AMOUNT AND NATURE
OF BENEFICIAL PERCENT
NAME OWNERSHIP(1) OF CLASS
- -------------------------------- -------------------------- -----------------------------
Lee A. Ault III 91,108 *
Ron D. Barbaro 6,000 *
Thomas F. Chapman 154,488(2) *
J. C. Chartrand 252,972(2) *
John L. Clendenin 2,400 *
A. W. Dahlberg 2,000 *
Robert P. Forrestal 1,000(3) *
L. Phillip Humann 3,000 *
Tinsley H. Irvin 4,000 *
D. W. McGlaughlin 367,075(2) *
Larry L. Prince 2,000 *
D. Raymond Riddle 3,000 *
C. B. Rogers, Jr.(4) 1,234,305(2) *
Betty L. Siegel, Ph.D. 1,152 *
Derek V. Smith 169,421(2) *
L. W. Sullivan, M.D. 300 *
D. F. Walsh(4) 224,092(2)
All Directors and Executive
Officers as a Group (23
persons) 2,827,448(2) 1.8%
- ---------------
* Less than 1%
(1) Figures shown reflect 2-for-1 stock split effective November 24, 1995.
(2) Includes shares held in the Company Thrift Plan and stock options
exercisable on January 1, 1996, or within 60 days thereafter, as follows: Mr.
Chapman -- 5,118 Thrift Plan shares and 70,000 option shares; Mr.
Chartrand -- 72,000 option shares; Mr. McGlaughlin -- 3,815 Thrift Plan
shares and 153,500 option shares; Mr. Rogers -- 14,846 Thrift Plan shares and
317,500 option shares; Mr. Smith -- 5,461 Thrift Plan shares and 77,000
option shares; and Mr. Walsh -- 30,066 Thrift Plan shares and 92,600 option
shares. As of January 1, 1996, the aggregate of such shares for all Directors
and Executive Officers as a Group was as follows: 129,575 Thrift Plan shares
and 944,050 option shares.
(3) Purchased 1,000 shares of common stock in February 1996.
(4) Messrs. Rogers and Walsh retired from the Company effective December 31,
1995.
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EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the fiscal years ended December 31, 1995, 1994
and 1993, the cash compensation paid by the Company, as well as compensation
accrued for those years, to each of the five most highly compensated Executive
Officers of the Company in 1995 in all capacities in which they served:
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION AWARDS
--------------------------------------- ------------------------------- PAYOUTS
OTHER SECURITIES ---------
ANNUAL RESTRICTED UNDERLYING LTIP ALL OTHER
SALARY BONUS COMPENSATION STOCK OPTIONS PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($)(1) ($) AWARDS($)(1)(2)(3) (#)(3) ($) ($)(4)
- --------------------------- ---- ------- ------- ------------ ------------------ ---------- --------- ------------
C. B. Rogers, Jr. 1995 543,700 0 22,723 1,323,501 200,000 1,310,100 32,450
Chairman and Chief 1994 522,696 0 31,733 769,697 100,000 898,050 32,450
Executive Officer 1993 496,184 0 21,445 524,963 70,000 551,950 48,275
D. W. McGlaughlin 1995 377,200 143,350 8,721 658,628 100,000 786,060 4,950
President and Chief 1994 354,424 192,381 10,263 221,214 50,000 449,025 4,950
Operating Officer 1993 338,924 135,570 14,959 155,906 50,000 331,170 15,475
Thomas F. Chapman 1995 264,600 116,294 12,720 390,017 60,000 327,525 4,950
Executive Vice President 1994 240,052 155,266 11,463 0 24,000 224,513 4,950
1993 224,668 114,581 6,220 43,923 24,000 264,936 10,664
Derek V. Smith 1995 240,800 167,593 11,871 343,500 60,000 327,525 4,950
Executive Vice President 1994 221,534 132,900 11,599 106,943 24,000 224,513 4,950
1993 209,038 106,609 11,737 0 24,000 264,936 11,691
D. F. Walsh 1995 210,500 125,598 7,294 0 40,000 262,020 4,950
Senior Vice President 1994 202,042 120,325 4,475 66,524 18,000 179,610 4,950
1993 193,596 90,023 6,668 34,500 16,000 264,936 11,228
- ---------------
(1) The "Bonus ($)" column represents any annual incentive award earned and paid
in cash. In all three reporting years, participants could elect to receive
all or part of any cash bonus earned in the form of restricted stock.
Beginning in 1994, all amounts earned above a designated percentage of
salary are only awarded in the form of restricted stock. These amounts are
included under the "Restricted Stock Awards" column for each respective
year, although the grants were not awarded until the following year.
(2) Dividend income is paid on restricted stock at the same rate as paid to all
shareholders. Value of restricted stock shown in table is as of the date of
grant. As of December 31, 1995, total restricted stock awards outstanding
and related fair market values were as follows: Mr. Rogers - 146,632 shares
($3,134,259); Mr. McGlaughlin - 62,182 shares ($1,329,140); Mr.
Chapman - 27,584 shares ($589,608); Mr. Smith - 31,472 shares ($672,714);
and Mr. Walsh 7,464 shares ($159,543). Of these shares, over 50% were
awarded as restricted stock in lieu of cash bonus payments to these
officers.
(3) Figures shown reflect 2-for-1 stock split effective November 24, 1995.
(4) Column "All Other Compensation" includes $27,500 in premiums for a universal
life insurance policy for Mr. Rogers to provide coverage which is otherwise
limited by the Company's group life insurance plan provisions and Company
thrift plan matching contributions in the amount of $4,950 for each officer.
8
STOCK OPTIONS
The following table contains information concerning the grant of stock options
to the named Executive Officers during 1995. Consistent with Company policy, no
stock appreciation rights were awarded to any Executive Officer and no
outstanding stock options were repriced during 1995.
OPTION GRANTS DURING YEAR
ENDED DECEMBER 31, 1995
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
- ---------------------------------------------------------------------------------------- VALUE AT ASSUME
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE OR FOR OPTION TERM(3)
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION -----------------------
NAME GRANTED(#)(1)(2) FISCAL YEAR ($/SHARE) DATE 5% 10%
- ------------------------ ---------------- ------------ ----------- ---------- ---------- ----------
C. B. Rogers, Jr. 200,000 4.19% $ 14.3125 1/25/05 $1,800,211 $4,562,088
D. W. McGlaughlin 100,000 2.09% $ 14.3125 1/25/05 $ 900,105 $2,281,044
Thomas F. Chapman 60,000 1.26% $ 14.3125 1/25/05 $ 540,063 $1,368,626
Derek V. Smith 60,000 1.26% $ 14.3125 1/25/05 $ 540,063 $1,368,626
D. F. Walsh 40,000 0.84% $ 14.3125 1/25/05 $ 360,042 $ 912,418
- ---------------
(1) Options have a ten-year term and vest 25% on the first through the fourth
anniversary of the date of grant.
(2) Figures shown reflect 2-for-1 stock split effective November 24, 1995.
(3) The dollar amounts under these columns are the result of calculations at 5%
and 10% rates of appreciation. They are not intended to forecast possible
future appreciation, if any, of Equifax stock price.
The following table shows options that were exercised and options outstanding as
of year-end for each named Executive Officer. No stock appreciation rights are
currently held by any Executive Officer.
AGGREGATED OPTION EXERCISES DURING YEAR ENDED DECEMBER 31, 1995
AND OPTION VALUES AS OF DECEMBER 31, 1995
NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AS OF IN-THE-MONEY OPTIONS
ACQUIRED ON VALUE 12/31/95 (#) AS OF 12/31/95 ($)
EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#)(1) ($) UNEXERCISABLE(1) UNEXERCISABLE(1)(2)
- -------------------------------- ----------- -------- ---------------- ---------------------
C. B. Rogers, Jr. 39,700 $282,900 335,000/ 200,000 $3,794,600/ $1,412,500
D. W. McGlaughlin 0 0 92,800/ 173,200 $1,093,675/ $1,472,950
Thomas F. Chapman 0 0 37,400/ 95,600 $ 430,837/ $797,850
Derek V. Smith 0 0 45,400/ 94,600 $ 532,900/ $784,600
D. F. Walsh 19,600 $173,600 92,600/ 0 $ 869,600/ $0
- ---------------
(1) Figures shown reflect 2-for-1 stock split effective November 24, 1995.
(2) Represents aggregate excess of market value of shares under option as of
December 31, 1995, over the exercise price of the options.
9
LONG-TERM INCENTIVE PLAN
The following table provides information concerning awards under the Company's
1988 Performance Share Plan for Officers. Each unit awarded represents the
right, subject to certain conditions set forth in the Plan, to receive one share
of the Company's common stock or its cash equivalent (up to 50% of total units
awarded), plus cash representing dividends. Payments of awards are tied to
achieving specified levels of return on equity, growth in earnings per share and
stock price appreciation. The target amount will be earned if 100% of targeted
goals are achieved. If targeted goals are not met or are exceeded, the award
will be reduced or increased proportionately. Awards are subject to forfeiture
if minimum established performance goals are not achieved or if a participant
terminates employment during the performance period. The dollar value of each
unit awarded is determined at the end of the measurement period with each unit's
value being equal to the stock price at the close of the measurement period plus
dividends accrued over the measurement period.
LONG-TERM INCENTIVE PLANS -- AWARDS DURING YEAR ENDED DECEMBER 31, 1995
ESTIMATED FUTURE PAYOUTS UNDER NON-
NUMBER OF PERFORMANCE STOCK PRICE -- BASED PLANS
SHARES, OR OTHER ----------------------------------------------
UNITS PERIOD UNTIL
OR OTHER MATURATION THRESHOLD TARGET MAXIMUM
NAME RIGHTS(1) OR PAYOUT (# OF UNITS) (# OF UNITS) (# OF UNITS)
- ------------------------------------------------------- ------------ ------------ ------------
C. B. Rogers, Jr. 50,000 12/31/97 25,000 50,000 75,000
D. W. McGlaughlin 30,000 12/31/97 15,000 30,000 45,000
Thomas F. Chapman 16,000 12/31/97 8,000 16,000 24,000
Derek V. Smith 16,000 12/31/97 8,000 16,000 24,000
D. F. Walsh 10,000 12/31/97 5,000 10,000 15,000
- ---------------
(1) Figures shown reflect 2-for-1 stock split effective November 24, 1995.
PENSION PLANS
The following table shows the estimated pension benefits payable to a covered
participant at normal retirement age under the Company's qualified defined
benefit retirement plan ("Retirement Plan") and the Company's non-qualified
supplemental retirement plan, both described below, based on remuneration that
is covered under the plans and years of service with the Company and its
subsidiaries.
PENSION PLAN TABLE
YEARS OF SERVICE
REMUNERATION -----------------------------------------------------------------
15 20 25 30 35
- ------------ --------- --------- --------- --------- ---------
$ 200,000 120,000 120,000 120,000 120,000 120,000
$ 400,000 240,000 240,000 240,000 240,000 240,000
$ 600,000 360,000 360,000 360,000 360,000 360,000
$ 800,000 480,000 480,000 480,000 480,000 480,000
$1,000,000 600,000 600,000 600,000 600,000 600,000
$1,200,000 720,000 720,000 720,000 720,000 720,000
$1,400,000 840,000 840,000 840,000 840,000 840,000
$1,600,000 960,000 960,000 960,000 960,000 960,000
$1,800,000 1,080,000 1,080,000 1,080,000 1,080,000 1,080,000
$2,000,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000
Benefits under the Retirement Plan are based upon length of service with the
Company and the participant's average total earnings (base salary and bonus as
reported in the Summary Compensation Table), up to a maximum of 125% of base
salary. This average is determined by reference to the thirty-six consecutive
months
10
during which the participant was most highly compensated. Benefits are computed
on a straight life annuity basis.
Under the Company's Supplemental Executive Retirement Plan ("SERP"), certain
Executive Officers may receive annual benefits equal to 1.5% of average total
earnings, multiplied by the number of years of credited service (as defined in
the plan) up to 40 years; or, depending upon the Executive Officer's salary
classification, 3% of average total earnings multiplied by the number of years
of credited service, up to 20 years. Benefits payable from the SERP are net of
benefits from the Retirement Plan, without regard to the limitations of Internal
Revenue Code Sections 401(a) and 415. Participants may receive a combined
benefit amount under both plans equal to a maximum of 60% of their average total
earnings. The amount of each participant's benefit under the SERP is calculated
with reference to all salary and bonuses paid and deferred (as reported in the
Summary Compensation Table). The supplemental benefits are payable from the
assets of a trust established by the Company and the general assets of the
Company.
The benefit amounts listed in the table are not subject to reductions for Social
Security. Benefits payable under the plans may be reduced for Executive Officers
with less than 20 years of credited service in an amount equal to benefits
receivable from previous employers. The estimated years of service for each
named Executive Officer is as follows: C. B. Rogers, Jr. -- 8 years (See
"Employment Agreements" below); D. W. McGlaughlin -- 7 years (See "Employment
Agreements" below); T. F. Chapman -- 6 years; D. V. Smith -- 15 years; and D. F.
Walsh -- 42 years.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Management Compensation Committee of the Company's Board of Directors
consists of three Directors: Tinsley H. Irvin (Chairman), L. Phillip Humann and
Larry L. Prince. For additional information concerning this Committee, see
"Management Compensation Committee" above.
The Executive Committee of the Company's Board of Directors consists of four
Directors: C. B. Rogers, Jr. (Chairman), D. W. McGlaughlin, John L. Clendenin,
and D. Raymond Riddle. The Executive Committee approves the salaries of all
Executive Officers of the Company (except members of the Executive Committee).
Mr. McGlaughlin has served as an Executive Officer of the Company since 1989.
Mr. Rogers served as an Executive Officer of the Company from 1987 until his
retirement on December 31, 1995.
Mr. Humann serves as an Executive Officer and Director of SunTrust Banks, Inc.
Mr. Prince serves as a Director of SunTrust Bank of Georgia and its subsidiary
SunTrust Bank, Atlanta. In 1995, the Company was indebted, in the ordinary
course of business, to SunTrust Bank, Atlanta with the highest amount of
indebtedness of $66,340,341 composed of $36,340,341 in long-term debt and
$30,000,000 in short-term debt. Rates of interest charged on this debt were
competitive with other lending institutions. Messrs. Riddle and McGlaughlin
serve as Directors of Wachovia Bank of Georgia, N.A., and its parent Wachovia
Corporation of Georgia. Mr. Clendenin is a Director of Wachovia Corporation, the
parent of Wachovia Corporation of Georgia. In 1995, the Company was indebted, in
the ordinary course of business, to Wachovia Bank of Georgia, N.A. with the
highest amount of indebtedness of $91,890,000 composed of $31,890,000 in
long-term debt and $60,000,000 in short-term debt. Rates of interest charged on
this debt were competitive with other lending institutions. During 1995,
Wachovia Bank of Georgia, N.A. and SunTrust Bank, Atlanta also participated in a
$450 million committed revolving credit facility which was replaced in August
1995 with a $550 million, five-year committed revolving credit facility which is
used by the Company for general corporate purposes. Rates of interest charged
under this facility are competitive with other lending institutions. In 1995,
the Company borrowed $60,000,000 in short-term debt from Wachovia Bank of
Georgia, N.A. under the replacement revolving loan facility, which amount is
included in the short-term debt figure shown above.
EMPLOYMENT AGREEMENTS AND CHANGE IN CONTROL AGREEMENTS
The Company currently has in effect an employment agreement with Mr.
McGlaughlin. This agreement provides for participation by Mr. McGlaughlin in all
employee benefit plans and the receipt of full executive
11
benefits, including participation in all executive incentive plans as well as a
Change in Control Agreement. Mr. McGlaughlin is entitled to retirement benefits,
at age 63, equivalent to those provided to an Executive Officer with 20 years of
Company service.
Prior to his retirement on December 31, 1995, the Company had in effect with Mr.
Rogers an employment agreement which provided for Mr. Rogers' participation in
all employee benefit plans and the receipt of full executive benefits, including
participation in all executive incentive plans and a Change in Control
Agreement. This agreement, which terminated upon Mr. Rogers' retirement,
provides for retirement benefits based on 25 years of Company service. The Board
of Directors has authorized and the Company has executed a Consulting Agreement,
effective January 1, 1996, for Mr. Rogers to serve until December 31, 1999, as
an independent consultant, in order to retain and benefit from his substantial
expertise in the information industry. Mr. Rogers' activities as consultant
shall include advising the Company on matters involving international expansion,
government and community relations and attraction of new customers and
maintenance of existing customers, as well as special projects assigned by the
Chief Executive Officer or the Board of Directors. Mr. Rogers' duties under this
agreement are separate and distinct from his duties as Chairman of the Board,
and he has agreed to be available up to 26 weeks per year. In return, Mr. Rogers
will receive an annual payment of $250,000, payable in equal monthly
installments.
The Board of Directors of the Company has approved Change in Control Agreements
for certain key employees. Such agreements are currently in effect for Messrs.
McGlaughlin, Chapman and Smith. These Agreements are for renewable five-year
terms and are effective only upon a change in control of the Company. A "change
in control" is defined by the Agreements to mean the acquisition by an entity,
or a group of entities acting in concert, of more than fifty percent of the
shares of outstanding stock of any class of voting stock of the Company. In such
event, upon termination of the executive's employment, within five years after
the date of a change in control, the executive is entitled to severance pay and
certain other benefits, unless the executive's employment terminates because of
death, disability, cause, or for other than "good reason" (as defined by the
Agreements). The severance payment is a derivative of annual compensation,
multiplied by a factor of three. All benefits payable under the Agreements are
subject to reduction in accordance with the provisions of Section 280G of the
Internal Revenue Code. No payment will be made if a change in control of the
Company has not occurred before the executive reaches the age of 65. No payments
have been made to any Executive Officer under these Agreements.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Executive Officer compensation is determined by two committees of the Company's
Board of Directors. The Management Compensation Committee ("Committee"),
composed solely of outside directors, is responsible for all decisions regarding
the Chief Executive Officer's and Chief Operating Officer's compensation and for
establishing and administering compensation policies and incentive compensation
plans for the Executive Officers of the Company. The Executive Committee sets
salaries for Executive Officers other than the members of the Executive
Committee, pursuant to guidelines prescribed by the Committee. On an annual
basis, the Committee reviews all decisions of the Executive Committee with
respect to Executive Officer salaries made during the preceding twelve months.
The Committee has set forth the following goals for the Executive Officer
compensation program to ensure that it relates to and supports the Company's
overall objective of enhancing shareholder value.
- Total compensation opportunities should be market competitive to attract
and retain talented executives.
- The compensation program should be performance-based, providing a strong
link between performance and rewards. A significant part of each officer's
total compensation opportunity should be in the form of variable
compensation, which is expected to vary from below market to above market
as performance varies. Additionally, the degree of risk associated with
variable pay should be greatest at the topmost levels of the organization.
12
- Compensation opportunities for Executive Officers should place a strong
emphasis on sustained long-term performance of the Company.
- Stock ownership by Executive Officers is very important and the officer
compensation program should be designed to facilitate such ownership.
The Committee believes the Executive Officer compensation program should serve
to achieve these goals while minimizing any effect on the Company of Section
162(m) of the Internal Revenue Code. In recognition of this provision, the
Committee recommended, and the shareholders approved, amendments to the
Company's Omnibus Stock Incentive Plan in 1994. The Committee believes the
approval of these amendments assures that any compensation arising from stock
options under this Plan will continue to be classified as performance-based. In
1996, the Committee has proposed that the shareholders approve amendments to the
Company's Performance Share Plan to assure that any compensation arising from
awards under the Plan will continue to be performance-based compensation.
The Committee believes competitive compensation data from a broad sample of
companies, particularly those in the services industry and those reporting
annual revenues of $1 billion or more, represents the best reflection of the
market rate for executive talent. Although some companies are included in both
this group and the group used for shareholder return comparisons, the Committee
recognizes that the Company's most direct competition for executive talent is
not necessarily the same companies that are used for performance graph purposes.
In administering the compensation program for Executive Officers, the Committee
establishes performance goals at the beginning of each performance period and
determines compensation earned on the basis of actual results achieved. As
accounting rules may require that the Company adjust actual operating earnings
to recognize and report the impact of extraordinary expense or revenue on
occasion, the Committee believes it should reserve sole discretion to take such
extraordinary items into account as they may impact the determination of any
incentive compensation amounts earned by Executive Officers. In addition, the
Committee reserves sole discretion to determine the impact other actions or
items may have on incentive compensation earned as these arise. In 1995, the
Company acquired all or part of several businesses to enhance future
profitability. The combined unplanned impact of these actions on 1995 operating
results resulted in a reduction in reported earnings. In light of the favorable
impact on operating results in 1996 and beyond which these actions are
anticipated to provide, these actions did not adversely affect the 1995
incentive compensation amounts approved for Executive Officers by the Committee.
EXECUTIVE OFFICER COMPENSATION
Executive Officer compensation includes several principal elements: base salary,
annual incentive and long-term incentives. The Committee's objective is to set
salaries and target incentive opportunity levels at a median competitive level
and to assure that superior performance is rewarded with above-market total
compensation through the operation of the various incentive plans.
Salary: The Committee believes that competitive salaries are important in
attracting and maintaining a high-quality executive team. Salary increases are
based on market-competitive salary increase budgets which are updated annually,
and on job performance and any new or additional responsibilities assumed by
Executive Officers. Merit salary reviews are normally scheduled at 13- to
15-month intervals for Executive Officers.
The Chief Executive Officer, Mr. Rogers, received a base salary adjustment of
3.8% in March, 1995. On an annual basis, this is equivalent to an increase of
3.5%, as the time between increases was 13 months. The Committee considered the
excellent financial results reported for the Company under his leadership in
1994 and his outstanding job performance with respect to goals established for
him by the Committee in January 1994. Competitive salary levels reported for
other companies (particularly those reporting annual sales or revenues of $1-3
billion) were also reviewed by the Committee. Although this excellent job
performance would normally result in a substantially larger salary increase, the
Committee took into account Mr. Rogers' request that his salary increase be set
at the lowest level of any executive officer during 1995.
13
Accordingly, the Committee approved an increase below corporate guidelines which
resulted in a new salary at the median competitive level.
Annual Incentive: For annual incentive purposes, performance is measured in
terms of annual corporate, business unit and individual performance in a manner
consistent with each Executive Officer's position. Performance objectives are
established at the beginning of each year and are based upon financial plans
approved by the Board. In the case of financial objectives, a minimum or
threshold level of performance is established, and no incentive is payable below
this level of performance. Also, levels of performance are established which
correspond to target and maximum incentive awards. The target incentive
opportunity has generally corresponded to the Company's annual financial plan
approved by the Board.
For 1995, the Committee approved a plan which emphasized after-tax profit minus
the cost of capital employed as the primary performance measurement factor.
Also, the Committee recognizes the significant interest in earnings per share as
an indicator of the Company's performance. Consequently, it established for
1995, in addition to the measurement of profitability net of the cost of capital
employed, a minimum earnings per share growth level which must be achieved in
order for participants to earn an incentive at or above the incentive threshold
level.
In 1995, the Company's after-tax profit minus the cost of capital employed was
the primary basis for determining annual incentive awards earned by Messrs.
Rogers and McGlaughlin. For other Executive Officers, a 30% weighting on
corporate financial results was applied in determining the awards for Messrs.
Chapman and Smith and a 50% weighting on corporate financial results was
applicable for Mr. Walsh. Business unit measurement emphasized individual
financial results for the appropriate business units. Also, certain
non-financial goals were established and considered for each participant.
Prior to 1994, annual incentive awards were paid in cash or could be deferred at
the election of the individual Executive Officer. Beginning in 1994, the
Committee implemented a maximum amount which would be paid in cash. Incentives
earned above this maximum are awarded as restricted stock, with vesting at the
end of five years. The Committee believes this provides an excellent vehicle for
expanding stock ownership of Executive Officers and that such an immediate
identification with shareholder interests will serve to further emphasize the
officer's commitment to the sustained long-term performance of the Company.
Mr. Rogers' target annual incentive opportunity during 1995 was 60% of his base
salary, with a maximum opportunity of 180%. His plan provided that the Company's
after-tax profit minus the cost of capital employed for 1995 would represent an
80% weighting and that his achievement of certain personal goals would represent
a 20% weighting. His earned award for 1995 was 94% of salary.
In accordance with the restricted stock payment alternative for annual
incentives described in this report, Mr. Rogers elected to receive a restricted
stock grant in lieu of cash payment for the full amount of his 1995 annual
incentive award. This provided an immediate expansion of Mr. Rogers' stock
ownership in the amount of 32,636 shares, although these shares remain in an
escrow account subject to his fulfilling specified continued service
obligations.
Performance Shares: Executive Officers participate in a performance share plan,
with awards earned primarily on the basis of three-year earnings per share
growth (for measurement periods commencing prior to 1996). In addition, a
minimum level of return on equity is required and a specified stock price
appreciation goal must be achieved in order to earn an award above a certain
amount. Award levels are established such that a target performance share award
combined with stock option grants approximate a median long-term incentive
competitiveness level. Award amounts increase and decrease in value directly
with stock price over the performance period.
The value of performance share awards earned will be determined by the Company's
stock price at the end of the measurement period. Awards earned are paid out at
least one-half in Company common stock, which is consistent with the Committee's
objective with respect to officer stock ownership.
Mr. Rogers and the other Executive Officers earned a payment of performance
share units for Company performance during the period 1993 through 1995. The
earned award was paid in shares of Company common
14
stock and cash, and represented a payout of the maximum opportunity available
under the award. Company performance during the period exceeded the established
minimum return on equity and the stock price appreciation goal for the Plan also
was exceeded. Mr. Rogers received a performance share unit award for the
performance period 1995 through 1997, according to the criteria described above.
Stock Options: In recent years, the Company has granted stock options to
Executive Officers on an annual basis, with competitive grant sizes determined
accordingly. Neither the number of outstanding options held by an officer nor
the total options previously granted will have a direct effect upon decisions
regarding eligibility for or the size of current grants. Stock options are
granted to motivate Executive Officers to contribute to an increase in the value
of the Company rather than being utilized as a specific award for past personal
performance. Additionally, the past performance of the Company will not directly
affect option grant determinations, except to the extent the Company's
historical stock price and dividend performance may be considered in the grant
valuation models utilized by independent compensation consultants to the
Company. Grant sizes are based on the Executive Officer's level of
responsibility and his corresponding potential contribution to the Company's
growth and profitability. All options granted through 1995 have exercise prices
equal to the market price of the Company's stock on the date of grant. Thus,
Executive Officers will only benefit if the Company's stock price increases
above the exercise price. Mr. Rogers and the other Executive Officers were
granted stock options during 1995, based on these criteria.
Restricted Stock: In 1993, the Committee introduced an application of
restricted stock to significantly enhance the fulfillment of the established
officer compensation philosophy, particularly with respect to retention and the
alignment of the interests of Executive Officers and the Company's shareholders.
Executive Officers are provided a choice of receiving any annual incentive
earned in the form of a cash payment or a restricted stock grant. As a
consequence of this grant approach, any prior restricted stock grant would have
no bearing upon the approval of the new award. The restricted stock vests at the
conclusion of five years of continued service. In recognition of the substantial
risk assumed by the executive in terms of forfeiture of such restricted shares,
as well as the associated market risk and deferral of economic benefits of
current cash compensation, the Committee provided an incentive to encourage
voluntary deferrals into stock. An incremental amount of stock equivalent to 20%
of the cash award earned was determined to be an appropriate incentive for this
purpose. In 1993, 1994 and 1995, at least one-half of the Executive Officers
voluntarily elected restricted stock grants in lieu of cash incentive payments.
As described previously in the discussion of Annual Incentives, the Committee
added mandatory restricted stock grants as a form of award for annual incentives
earned above an established amount in 1994. No Executive Officers earned
incentives above this amount for 1995. The voluntary deferrals into restricted
stock of 1995 incentives resulted in immediate additional Company stock
ownership of 46,274 shares awarded to four of the Company's Executive Officers.
The Committee also approved additional restricted stock awards in 1995 to Mr.
Rogers and six other Executive Officers. No part of these awards will vest prior
to December 31, 1998, and they will remain subject to forfeiture if the
designated continued service requirements are not satisfied. Although not a
normal part of the compensation of an Executive Officer, these special awards,
which were determined in the discretion of the Committee, are considered an
important element in the Company's overall executive compensation program. The
Committee recognizes the importance of retaining key executives during a senior
management transition period within the Company, particularly in light of
current competitive environment for talented information industry executives. In
addition to supporting such retention objectives, these awards will immediately
increase the stock ownership of these executives and provide greater alignment
of the interests of key executives and the Company's shareholders. An additional
incentive to increase the price of the Company's stock was incorporated by the
Committee in approving these stock awards. Provided an established goal for
stock price appreciation is achieved for at least 20 consecutive business days
within the vesting period, each executive will be eligible to earn an amount in
the form of a corresponding cash incentive which is determined as a percentage
of the value of the stock at the time of vesting. The Committee believes this
provision will both provide an additional incentive to increase shareholder
value, and it will enable an executive to satisfy income tax obligations
associated with the value of any vested shares, without the necessity to
liquidate a part of the executive's share ownership.
15
To the extent the above report pertains to the setting of salaries for Executive
Officers other than the Chief Executive Officer and the Chief Operating Officer,
it is jointly submitted by the Executive Committee.
MANAGEMENT COMPENSATION COMMITTEE EXECUTIVE COMMITTEE
T. H. Irvin, Chairman C. B. Rogers, Jr., Chairman
L. P. Humann J. L. Clendenin
L. L. Prince D. W. McGlaughlin
D. R. Riddle
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the cumulative
total return (including dividends) from $100 invested in the Company's common
stock over the five fiscal years in the period ending December 31, 1995, with
cumulative total returns from the same investment in both the S&P 500 Index and
the Dow Jones Industrial and Commercial Services -- General Index published by
Dow Jones and Company, Inc. The comparison is based on a $100 investment on
December 31, 1990, in the Company's common stock and in each of the specified
indices and assumes all dividends were reinvested.
COMPARISON OF FIVE-YEAR
CUMULATIVE TOTAL RETURN AMOUNG EQUIFAX INC.
THE S&P 500 STOCK
INDEX AND THE DOW JONES INDUSTRIAL &
COMMERCIAL
SERVICES - GENERAL
INDEX
D J IND &
Measurement Period COMM
(Fiscal Year Covered) Equifax Inc. S&P 500 SRVC-GENL
12/90 100 100 100
12/91 101 130 125
12/92 135 140 142
12/93 183 155 149
12/94 181 157 144
12/95 299 215 184
DIRECTOR COMPENSATION
Each Director of the Company who is not an employee of the Company is paid a fee
of $1,000 for attendance at any meeting of the Board of Directors. Each such
Director who is a member of a committee elected or appointed by the Board of
Directors receives a fee of $1,000 for each regular meeting of the committee
attended. Additionally, the Chairman of the Board of Directors, provided such
person is not an employee of the Company, receives a fee of $7,500 per quarter
for services as a Director. Each non-employee Director, other than the Chairman
of the Board, receives a fee of $5,000 per quarter for services as a Director.
Non-employee Directors receive an additional $1,000 per quarter if a member of
the Executive Committee or if
16
Chairman of any other Committee other than the Executive Committee. The Chairman
of the Executive Committee, provided such person is not an employee of the
Company, receives a fee of $4,000 per quarter.
Non-employee Directors are eligible for participation in the Company's Deferred
Compensation Plan (the "Plan") whereby each non-employee Director may elect to
defer up to 100% of earned Director fees into, and are credited with amounts
based on, one or more of the following accounts: (a) the market value of and
dividends on the Company's common shares ("common share equivalents"), or (b)
the prime lending rate (determined the first day of each month) as reported in
the Wall Street Journal. Funds invested in common share equivalents may be
redeemed only for cash on a fixed date or upon termination of service as a
Director. Annual elections by a non-employee Director with respect to common
share equivalents are irrevocable and transfers of funds into or out of this
account, as well as hardship withdrawals, are not permitted. No Director has
voting or investment powers in common share equivalents. The approximate number
of common share equivalents held by Directors, as of December 31, 1995, is as
follows: T. H. Irvin -- 2,843 units, L. P. Humann -- 2,488 units, B. L.
Siegel -- 1,157 units, L. L. Prince -- 2,553 units, L. W. Sullivan -- 312 units
and R. D. Barbaro -- 308 units.
Non-employee Directors each receive 2,000 non-qualified stock options once each
year at the regularly scheduled Annual Meeting of Shareholders pursuant to the
Equifax Inc. Non-Employee Director Stock Option Plan. The Plan provided
originally that no more than 150,000 shares were issuable under this Plan.
Effective November 24, 1995, the Company's common stock was split on a 2-for-1
basis. To reflect this stock split, all stock options then outstanding, as well
as the number of options to be awarded each year to each non-employee Director,
and the remaining shares to be issued under this Plan also were split on a
2-for-1 basis. All option awards become 100% vested one year after date of grant
and expire five years after date of grant. The option exercise price for each
share of stock is the greater of (i) the par value of a share of stock, or (ii)
the fair market value of a share of stock on the date the option is granted.
Payment of the option price upon the exercise of an option may be made only in
cash. All options granted under this Plan are non-transferable other than by
will, the laws of descent and distribution or pursuant to a qualified domestic
relations order. This Plan will expire April 30, 2005.
APPROVAL OF THE AMENDED
EQUIFAX INC. 1988 PERFORMANCE SHARE PLAN FOR OFFICERS
(PROXY ITEM NO. 2)
In 1988, the shareholders approved the Equifax Inc. 1988 Performance Share Plan
for Officers (the "Plan"), a stock-based incentive compensation plan under which
the Company may grant performance share units to officers of the Company and its
subsidiaries. The Plan was later amended by the Executive Committee and the
Board of Directors, respectively, on March 18, 1992 and January 25, 1995, to
provide for the establishment of performance goals, in addition to aggregate
earnings per share and return on equity, as the Management Compensation
Committee deemed appropriate and to extend the time until January 31, 2000, for
which awards may be made under the Plan.
The Board of Directors believes that the continued success of the Company
depends on its ability to attract, retain and motivate key employees.
Accordingly the Management Compensation Committee of the Board of Directors (the
"Committee") has reviewed the Plan and has recommended to the Board that certain
key amendments, described below, be made to the Plan. These amendments are
proposed in order to (a) more closely link the Company's performance with
rewards paid under the Plan, and (b) to allow payments by the Company under the
Plan, as amended, to be deductible under current Internal Revenue Code
provisions.
In order for the proposed amendments to become effective and in order for
payment of incentive awards made under the Plan to be fully deductible to the
Company under Section 162(m) of the current Internal Revenue Code, the Plan, as
amended, must be approved by the Company's shareholders.
The principal features of the Plan are described below. The full text of the
Plan, which includes the proposed amendments, is annexed hereto as Exhibit A and
should be referred to for a complete description of its provisions.
17
Generally. The Plan provides for the grant of performance share units ("share
units") to elected officers and other key officers of the Company. Awards under
the Plan were made in January 1996 to the named executive officers, subject to
shareholder approval of the proposed amendments described below. In the event
shareholder approval of the Plan, as amended, is not obtained, said awards to
the named executive officers will be canceled.
Administration. The Plan vests broad powers in the Committee to administer and
interpret the Plan. The Committee shall consist of members of the Company's
Board of Directors who are considered outside and disinterested for purposes of
the Internal Revenue Code and the Securities Exchange Act of 1934.
The Committee's powers include authority, within the limitations set forth in
the Plan, to select the persons to be granted awards, to determine the size
(subject to certain limitations in the event the proposed amendments are
adopted) and the time when awards will be granted and any conditions for
receiving awards, to establish objectives and conditions for earning awards, to
determine when such conditions have been met and whether payment of an award
will be made at the end of a measurement period, or to determine whether a
payment of an award shall be reduced, but not increased, or eliminated. The Plan
currently contains no restriction of the number of share units that can be
awarded in any calendar year. Upon adoption of the proposed amendments, the
maximum number of share units that can be awarded to any individual during a
calendar year will be 100,000 share units.
Eligibility. Key officers of Equifax Inc. and its divisions, subsidiaries and
affiliates are eligible to be granted awards under the Plan. Key officers of
Equifax Inc. and its divisions and subsidiaries, a group now consisting of
approximately sixty-five persons, including Equifax Inc.'s Chief Executive
Officer and other executive officers, have been or will be granted awards under
the Plan. Because the number of executives may change and because the selection
of additional participants is discretionary, it is impossible to determine the
exact number of persons who will be eligible for awards under the Plan during
its term.
Share Units. A share unit represents the right to receive one share of the
Company's common stock, plus cash equal to the dividends paid on said share of
stock from the date of the share unit award, without payments of any amount to
the Company, provided specified performance measures are achieved during a
three-year measurement period. Currently, such performance measures are
determined by the Company's aggregate earnings per share ("EPS"), aggregate
return on equity and other performance measures as may be established by the
Committee. The Company proposes amending the Plan by adding two new performance
measures, "Economic Value Added"(1) and stock price appreciation. "Economic
Value Added" is defined, for a particular fiscal year, as the Company's net
operating profit after income taxes, subject to certain adjustments as set forth
in the Plan, less the capital charge for using the capital that is needed to
generate the Company's after tax operating income. Stock price appreciation is
the increase in value of the Company's Common Stock as determined by the closing
price of the common stock on the New York Stock Exchange on any given date. Upon
approval of the proposed amendments, the Committee may, in selecting a
performance measure, select one of the above measures or a combination thereof.
The measurement period for share units shall be a three-year period, commencing
at the beginning of the fiscal year in which a grant is made. The Committee
shall establish measurement targets to be obtained by the Company within each
three-year period. In calculating earnings for the purpose of certifying that a
performance target has been achieved, the Committee will exclude significant
unusual charges or income, including gains and losses resulting from
divestitures, currency fluctuations or changes in accounting, which are
distortive of results year over year either on a segment or consolidated basis.
"Significant unusual" items are items which are unusual as to their frequency or
as to their size, as defined under generally accepted accounting principals. In
addition, the Committee will adjust the calculation to exclude the effect on EPS
of changes in the Internal Revenue Code or other tax laws, or the regulations
relating thereto.
Attainment of the primary target will result in 100% of share unit value being
paid, and no payment will be made if a minimum target is not achieved.
Attainment of performance above or below the primary target will result in a
proportionate increase or decrease in payment of the share units value.
- ---------------
(1)"Economic Value Added" is a registered trademark of Stern Stewart & Co.
18
Payment of a share unit award will be made upon a determination by the Committee
that the Company has achieved established measurement goals for the three-year
period. Upon adoption of the proposed amendments, the Committee shall have the
discretion to reduce some or all of an award even though an established target
is attained. Payment of share units shall be made in shares of common stock,
plus cash representing dividends; provided, however, a participant may notify
the Committee of a preference to surrender up to one half of the stock he or she
is entitled to receive, and in lieu thereof, receive an amount in cash
representing the fair market value of the stock surrendered. The Committee may,
in its sole discretion, approve or disapprove such preference. The "fair market
value" of shares of the Company's common stock is currently deemed to be the
closing sale price thereof on the New York Stock Exchange on the last business
day of a measurement period. Upon adoption of the proposed amendments, the "fair
market value" of shares shall be the closing sale price thereof on the New York
Stock Exchange on the day the share unit payouts are approved by the Committee.
Shares of Stock Subject to the Plan. As originally adopted, the total number of
shares of common stock issuable under the Plan could not exceed 600,000 shares.
However, the Plan provides that in the event of any change in the Company's
outstanding common stock by reason of a stock split, stock dividend, merger or
similar events, such equitable adjustment shall be made in the Plan and awards
as deemed necessary by the Committee. In November 1989, the Company effected a
100% stock dividend, and in November 1995, the Company effected a 2-for-1 stock
split. After adjustment for these events, a total of 1,145,935 common shares
have already been distributed under the Plan, leaving 1,254,065 shares available
for issuance thereunder.
Assignment. No award under the Plan shall be assignable or transferrable.
Death, Disability, Retirement or Change in Control. Generally, in the event of
the death, disability or retirement of a holder of share units, such units shall
be payable at the end of the measurement period in proportion to the service of
the employee during such period. Generally, if any participant shall cease to be
employed for any reason other than death, disability or retirement, prior to the
end of a measurement period the participant's rights to any share unit award
shall terminate. Notwithstanding these provisions, in the event of a change in
control of the Company, a participant is entitled to receive, in lieu of the
cash and stock represented by the share unit, an amount in cash equal to the
fair market value of the stock, plus any cash said participant would have
received in the absence of a change in control. Such payment shall be made
within 60 days following the end of the applicable measurement period. "Fair
market value" is the highest price at which the common stock of the Company
traded on the New York Stock Exchange during the 3 months immediately prior to
such change in control.
Amendment and Termination. The Committee may amend, suspend or terminate the
Plan so long as such action does not adversely affect any rights or obligations
with respect to share unit awards already outstanding under the Plan. Unless
approved by the shareholders, no amendment of the Plan may increase the maximum
number of shares which can be delivered under the Plan. No awards of share units
may be made under the Plan after January 31, 2000.
Federal Tax Consequences. Under the Internal Revenue Code as presently in
effect, a grant under the Plan of share units will have no federal income tax
consequence. The payment of share units, whether paid in shares of common stock,
or a combination of common stock and cash, is taxable to a participant as
ordinary income. All amounts taxable to employees under the Plan in respect of
share units generally are deductible by the Company as compensation. Upon a sale
of common stock acquired under the Plan, the participants realize long or
short-term gain or loss, and the Company receives no further deduction.
Approval of the Plan, as amended, requires the affirmative vote of a majority of
the Company's outstanding shares voted at the meeting at which a quorum is
present. A quorum exists if one-half of all shares of the capital stock of the
Company entitled to vote at the meeting are present, either in person or
represented by proxy. Abstentions and broker non-votes are each included in
determining the number of shares present and voting with each being tabulated
separately. Abstentions are counted in tabulations of votes for passage of this
proposal. Broker non-votes are counted as abstentions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROXY ITEM NO. 2.
19
PROXY ITEM NOS. 3 THROUGH 6
TO AMEND AND RESTATE THE ARTICLES OF INCORPORATION
The Board of Directors has approved the amendment and restatement of the
Articles of Incorporation of the Company in the form attached hereto as Exhibit
B (the "Restated Articles") and recommended that the Company's shareholders
consider and adopt the Restated Articles at the Annual Meeting of Shareholders.
The current Articles of Incorporation (the "Articles") of the Company were last
restated in full in 1931. Since that time, the Articles as well as the
applicable corporate law provisions have been amended numerous times. The
proposed Restated Articles will modernize the Company's current Articles by
taking advantage of the most recent provisions of the current Georgia Business
Corporation Code (the "Georgia Code") and by deleting provisions of the current
Articles which are unnecessary, ineffective or otherwise inappropriate as a
result of revisions to applicable law since 1931. If Proxy Item Nos. 3 through 6
are approved, the Restated Articles will become effective upon filing of the
Articles of Restatement with the Secretary of State of the State of Georgia.
Proxy Item Nos. 3 through 6 are primarily intended to modernize the Articles
generally and to enhance the flexibility of the Company to respond in a timely
fashion to opportunities in the capital markets as they arise. Although the
Restated Articles are not proposed for the purpose of discouraging or rendering
unsolicited takeover attempts more difficult, certain provisions of the Restated
Articles could be deemed to have a potential anti-takeover effect.
APPROVAL OF AMENDED ARTICLES OF INCORPORATION
TO INCREASE AUTHORIZED COMMON STOCK
(PROXY ITEM NO. 3)
The Board of Directors of the Company has adopted a resolution unanimously
approving and recommending to the Company's shareholders for their approval an
amendment to the current Restated Articles of Incorporation of the Company (the
"Articles") increasing the authorized Common Stock of the Company from
250,000,000 to 300,000,000 shares.
The Company's current Articles provide that the Company is authorized to issue
up to 250,000,000 shares of Common Stock. Approximately 169,000,000 Common
Shares are currently issued and approximately 6,000,000 additional Common Shares
are estimated to be reserved for issuance in connection with the Company's
employee benefit plans. Accordingly, approximately 75,000,000 authorized but
unissued and unreserved Common Stock are available for general use by the
Company on an unrestricted basis. The proposed amendment would increase the
authorized Common Stock of the Company from 250,000,000 shares to 300,000,000
shares.
The Board of Directors recommends the increase in authorized Common Stock to
enable the Company to have additional shares available for issuance in
connection with future acquisitions, public or private offerings, conversions of
convertible securities, employee benefit plans, stock splits effected in the
form of stock dividends, and other general corporate purposes. Increasing the
authorized Common Stock will give the Company greater flexibility and will allow
the Company to issue additional Common Stock for the purposes described above,
subject to the requirements of the New York Stock Exchange.
The Company has no current plans, agreements or arrangements for the issuance of
additional Common Stock, other than the issuance of shares pursuant to its stock
option and other employee benefit plans.
The additional authorized shares of Common Stock would also be available for
issuance (subject to further shareholder approval if required by law or stock
exchange rules as noted above) at such times and for such proper corporate
purposes as the Board of Directors may approve, including possible future
financing and acquisition transactions. Depending upon the nature and terms
thereof, such transactions could enable the Board to render more difficult an
attempt by a third party to obtain control of the Company. For example, the
issuance of shares of Common Stock in a public or private sale, merger, or
similar transaction would increase the number of the Company's outstanding
shares, thereby diluting the interest of a party seeking to acquire control of
the Company.
20
The affirmative vote of the holders of a majority of the outstanding shares of
Common Stock is needed for the approval of this proposal. Abstentions and broker
non-votes will have the same effect as a vote against the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROXY ITEM NO. 3.
APPROVAL OF AMENDED ARTICLES OF INCORPORATION
TO AUTHORIZE "BLANK CHECK" PREFERRED STOCK
(PROXY ITEM NO. 4)
The Board of Directors of the Company has adopted a resolution unanimously
approving and recommending to the Company's shareholders for their approval, an
amendment to the current Articles to authorize 10,000,000 shares of "blank
check" preferred stock (the "Preferred Stock"), issuable in one or more series.
The term "blank check" preferred stock refers to stock for which the
designations, preferences, conversion rights, cumulative, relative,
participating, optional or other rights, including voting rights (subject to the
limitations described below), qualifications, limitations or restrictions
thereof (collectively, the "Designations") are determined by the board of
directors of a company.
The Articles of the Company currently authorize 50,000 shares of Class A
Preferred Stock without par value. The current Articles provide that the maximum
capital stock of the Company shall be 250,000,000 shares of Common Stock and
50,000 shares of Class A Preferred Stock.
The preferences, rights and terms of the Class A Preferred Stock are expressly
set forth in Article 8, which does not provide any flexibility to modify the
terms and conditions of the Class A Preferred Stock. None of the Class A Stock
has been outstanding since December 31, 1958. The Board of Directors has
recommended the authorization of new modern "blank check" preferred stock
because it is highly unlikely that the Company would use the existing Class A
Preferred Stock for corporate financing or other purposes in view of the fixed
and outdated terms of the Class A Preferred Stock. Management believes that the
lack of flexible modern "blank check" Preferred Stock greatly reduces the
ability of the Company to utilize preferred stock in response to rapidly
developing acquisition and corporate financing opportunities. If Proxy Item No.
6 regarding the approval of the Restated Articles is approved, the Class A
Preferred Stock would be eliminated. If Proxy Item No. 4 to adopt modern "blank
check" provisions is approved and Proxy Item No. 6 is not approved, the Class A
Preferred Stock would remain authorized, but the Company does not intend to
issue any Class A Preferred Stock.
Under the proposed amendment, the Board could authorize the issuance, at any
time or from time to time, of one or more series of Preferred Stock subject to
further shareholder approval if required by law or stock exchange rules as noted
above. In addition, the board would determine all designations, relative rights,
preferences, and limitations of such stock including but not limited to the
following: designation of series and numbers of shares; dividend rights; rights
upon liquidation or distribution of assets of the Company; conversion or
exchange rights; redemption provisions; sinking fund provisions; and voting
rights, provided that the holders of shares of Preferred Stock will not be
entitled to more than the greater of (i) one vote per $100 liquidation value or
(ii) one vote per share, when voting as a class with holders of shares of
capital stock generally, and will not be entitled to vote separately as a class
except where such class or series of Preferred Stock is adversely affected. No
holder of shares of the Company will have any preemptive rights to acquire any
securities of the Company.
The Board of Directors is required to make any determination to issue shares of
Common Stock or Preferred Stock based on its judgment as to the best interests
of the shareholders and the Company. The Board of Directors could issue shares
of Preferred Stock that could, depending on the terms of such series, make more
difficult an attempt to obtain control of the Company by merger, tender offer,
proxy contest or other means, although the Board of Directors has no intention
of doing so and has limited the voting power of the Preferred Stock to reduce
such potential effect. Even though voting rights of preferred stock are limited
as described above, the issuance of Preferred Stock could have the effect of
discouraging unsolicited takeover attempts.
21
While the Company may consider effecting an equity offering of Common or
Preferred Stock or otherwise issuing such stock in the future for purposes of
raising additional capital or acquisitions, the Company, as of the date hereof,
has no agreements or understandings with any third party to effect any such
offering or acquisition, or to purchase any shares offered in connection
therewith, or to vote any such shares, and no assurances are given that any
offering will in fact be effected or that an acquisition pursuant to which such
shares may be issued will be proposed and consummated. Therefore, the terms of
any Preferred Stock subject to this proposal cannot be stated or estimated with
respect to any or all of the securities authorized.
The affirmative vote of the holders of a majority of the outstanding shares of
Common Stock is needed for approval of this proposal. Abstentions and broker
non-votes will have the same effect as a vote against the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROXY ITEM NO. 4.
APPROVAL OF AMENDED ARTICLES OF INCORPORATION
TO ADOPT THE MINIMUM SHAREHOLDER VOTE
REQUIRED UNDER CURRENT STATE OF GEORGIA LAW
(PROXY ITEM NO. 5)
The Georgia Code provides that shareholder approval of mergers, mandatory share
exchanges and amendments to the articles of incorporation generally require the
approval of a majority of the votes entitled to be cast, unless the articles of
incorporation provide otherwise. The Company's current Articles require the
approval of the holders of two-thirds of the outstanding Common Stock to approve
amendments to the Articles of Incorporation and mergers. The Board has adopted a
resolution unanimously approving and recommending to the Company's shareholders
an amendment to the current Articles conforming the minimum vote required for
shareholder action to the current provisions of the Georgia Code, except for
certain amendments relating to the Board of Directors. If Proxy Item No. 5 is
approved, shareholder approval of amendments to the Articles of Incorporation
(except as noted below), mergers and mandatory share exchanges would require the
affirmative vote of a majority of the votes entitled to be cast, rather than
two-thirds of the outstanding Common Stock as currently required.
The Board is recommending the approval of several amendments to the Articles
which currently require the affirmative vote of the holders of at least
two-thirds of the outstanding Common Stock. Although the Company has never
failed to obtain the two-thirds vote required to amend its Articles in
connection with any proposal by the Board of Directors in the past, the Board
believes that the lesser affirmative vote requirement for amending the Articles
would reduce the costs of future proxy solicitations and offer the Company and
its shareholders greater flexibility and ease in taking advantage of current
corporate developments which may be in the best interests of the Company and its
shareholders.
The proposed Restated Articles contain provisions relating to the authority and
structure of the Board of Directors substantially similar to the provisions
currently contained in the Company's Articles of Incorporation and By-laws, with
several minor revisions described in Proxy Item No. 6. Consistent with the
current Articles, amendments to the provisions of the Restated Articles relating
to the Board of Directors or shareholder adoption of By-laws with respect
thereto would continue to require the approval of two-thirds of the outstanding
Common Stock, notwithstanding the approval of Proxy Item No. 6, unless such
amendments were approved by a majority of the Board of Directors.
The Company has no plans and is not aware of any plans or intent of any person
or entity regarding a merger or business combination involving the Company. The
proposed amendment generally enhances the ability of shareholders to take
corporate action on mergers involving the Company by eliminating the existing
two-thirds supermajority vote required for mergers.
The affirmative vote of the holders of at least two-thirds of the outstanding
shares of Common Stock is needed for approval of this proposal. Abstentions and
broker non-votes will have the same effect as a vote against the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROXY ITEM NO. 5.
22
APPROVAL OF AMENDED AND RESTATED ARTICLES OF INCORPORATION
TO MODERNIZE AND CONFORM TO CURRENT STATE OF GEORGIA LAW
(PROXY ITEM NO. 6)
The Board of Directors adopted all of the foregoing amendments as part of a
complete restatement of the Company's Articles of Incorporation. From time to
time the Company is required to deliver copies of its Restated Articles of
Incorporation, as amended, to governmental and private entities in connection
with its business activities. The total number of pages of the Company's current
Articles, which have been amended several times since 1931, exceeds 75 pages. By
deleting ineffective and unnecessary provisions, the proposed Restated Articles
will update the Company's current Articles to be consistent with the Georgia
Code as well as eliminate the number of separate documents which are now
required.
As noted above, the Georgia Code has been revised extensively since the last
time the Company's Articles of Incorporation were restated in full. As of result
of these revisions, many of the provisions of the current Articles are
unnecessary, ineffective or otherwise inappropriate under modern law. For
example, the modern Georgia Code provides that every corporation has a perpetual
duration and may engage in any lawful business unless its articles provide
otherwise. Accordingly, lengthy provisions in the articles of incorporation
limiting the duration of a corporation and specifying the nature of the business
to be conducted are no longer necessary. The proposed Restated Articles
incorporate a number of these types of changes, including the following.
Article 1, Object of the Corporation. This provision is no longer required
by the Georgia Code and has been deleted.
Articles 2, 3, 5 and 12, Nature of Business and Corporate Powers. The
Georgia Code sets forth all the powers and authority of a corporation,
unless the articles specifically provide for more limited power and
authority, and therefore, these provisions have been deleted.
Article 4, Principal Place of Business. This provision is no longer
required by the Georgia Code and has been deleted.
Article 7, Class A Preferred Stock. In view of the fixed and outdated
provisions of the Class A Preferred Stock which render it highly unlikely
that Class A Preferred Stock would be used for corporate financing or other
purposes, the authorization of 50,000 shares of Class A Preferred Stock has
been deleted. See Proxy Item No. 4 regarding the proposed "blank check"
preferred stock.
Article 10, Preemptive Rights. The Georgia Code provides that shareholders
do not have preemptive rights except to the extent the articles of
incorporation so provide, and therefore, the provision expressly denying
preemptive rights has been deleted.
Article 14, Inspection of Company Records. Eliminating inspection rights
for shareholders owning less than five percent of the outstanding Common
Stock is inconsistent with the current Georgia Code and has been deleted.
Article 15, Duration of the Company. The Georgia Code provides for
perpetual duration unless the Articles provide otherwise, and therefore
this provision has been deleted.
In addition to the foregoing provisions, the Restated Articles include the
provisions listed below which are intended to update the Company's current
Articles to be consistent with the current Georgia Code:
LIMITATION OF LIABILITY OF DIRECTORS
In 1987, the Georgia ("the Code") was amended to permit a Georgia corporation
to include in its articles of incorporation a provision that limits or
eliminates, with certain exceptions, a director's personal liability for
monetary damages resulting from a breach of his or her fiduciary duty of care
to the corporation. Proposed Article V to the Company's Restated Articles
eliminates, to the maximum extent permitted by the Code, a director's liability
to the Company and its shareholders for monetary damages for breach of his or
her fiduciary duty of care or other duty as a director by reason of any act or
omission occurring after Article V becomes effective. Article V
23
does not, however, eliminate or limit a director's liability for (i) any
appropriation in violation of his or her duties, of any business opportunity of
the Company, (ii) any act or omission involving intentional misconduct or a
knowing violation of law, (iii) the payment of unlawful dividends, stock
repurchases, or redemptions or other distributions, or (iv) a transaction in
which the director receives an improper personal benefit. Furthermore, it does
not limit liability for claims against a director arising out of his or her role
as an officer or in any other capacity, nor does it affect the director's
responsibilities under the federal securities laws or any other law. Because the
Directors may have a beneficial financial interest in this proposal, they may be
deemed to have a conflict of interest in recommending it to the shareholders.
The Board of Directors believes that the diligence exercised by directors arises
primarily from their desire to act in the best interests of the corporation and
not from fear of monetary damage awards. The Board also believes, however, that
effective corporate governance is hindered by the threat of personal liability
for business judgments made in good faith by directors and the threat of
lawsuits seeking to establish liability for good faith business judgments.
Consequently, the Board believes that the elimination of liability provided by
Article V will not affect the level of scrutiny and care exercised by directors,
but will instead serve the Company's best interests by enhancing its ability to
attract and retain qualified non-employee directors. The measures limiting the
liability of directors are not being proposed in response to any specific
resignation, threat of resignation, or refusal to serve by any present or
potential member of the Board of Directors. The Company intends to continue to
provide liability insurance for its directors and officers, to the extent such
insurance is available to the Company on satisfactory terms, regardless of
whether the shareholders approve this Proposal. Article V will effectively
eliminate a potential cause of action against a director of the Company for
damages for an alleged violation of the director's fiduciary duty to the
Company. Management is not aware of any presently pending or threatened lawsuits
to which Article V would apply if it were currently in effect.
INDEMNIFICATION OF DIRECTORS AND OTHERS
The Code allows a Georgia corporation to include in its articles of
incorporation, by-laws or agreements between the corporation and its directors,
officers and employees, provisions expanding the rights to indemnification
beyond that otherwise provided by the Code. The Code provides a detailed
statutory framework covering indemnification of officers, directors or other
agents of the corporation ("Indemnified Parties") who have been or are
threatened to be made parties to any legal proceeding by reason of their service
to a corporation. Under Georgia law, indemnification must be made to Indemnified
Parties who have been successful "on the merits or otherwise" with respect to
the defense of any such proceeding, but Georgia law does not require
indemnification in any other circumstance. The Company may not, however,
indemnify persons who acted in a manner that they did not believe in good faith
to be in or not opposed to the best interests of the Company, or with respect to
any criminal proceeding, that they had reasonable cause to believe was unlawful.
The Code permits a corporation to advance expenses incurred in defending such a
proceeding if the Indemnified Party undertakes to repay such sums in the event
it is later determined that he or she should not have been indemnified.
The Board of Directors believes it is appropriate to provide mandatory
indemnification to its officers and directors in response to the increasing
hazard of unfounded litigation directed against directors and officers and its
related expense and the Company's potential liability to continue to attract and
retain qualified directors and officers in light of these circumstances. Because
the directors may have a beneficial financial interest in its adoption, they may
be deemed to have a conflict of interest in recommending this Proposal to the
shareholders. At present, there is no pending litigation or proceeding involving
a director or officer of the Company for which indemnification would be required
or permitted. Management is not aware of any threatened litigation or proceeding
that could result in a claim for indemnification by any director or officer.
AUTHORITY AND STRUCTURE OF THE BOARD OF DIRECTORS
The proposed Restated Articles contain provisions relating to the authority and
structure of the Board of Directors that are substantially similar to the
provisions currently contained in the Company's By-laws. The current Articles
and By-laws of the Company provide that the Directors shall consist of not less
than nine nor more than fifteen shareholders and the number of Directors shall
be determined from time to time by the
24
Shareholders. The proposed Restated Articles provide that the number of
Directors shall be not less than nine nor more than twenty shareholders, and
shall be fixed within such range by the Board of Directors. Both the current
By-laws and the proposed Restated Articles provide that the Board shall be the
total number of directors divided into three classes, each consisting, as nearly
as possible, of one-third the total number of directors constituting the entire
Board of Directors, with one class of directors standing for election to three-
year terms at each annual meeting.
If Proxy Item No. 6 is not approved, the current Articles as heretofore amended,
will be retained and modified to the extend required to implement any of the
foregoing Proxy Items submitted to shareholders which are adopted.
The affirmative vote of the holders of at least two-thirds of the outstanding
shares of Common Stock is needed for the approval of this proposal. Abstentions
and broker non-votes will have the same effect as a vote against the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROXY ITEM NO. 6.
APPROVAL OF INDEPENDENT PUBLIC ACCOUNTANTS
(PROXY ITEM NO. 7)
The firm of Arthur Andersen LLP, independent public accountants, is recommended
to the shareholders to audit the accounts and financial statements of the
Company for the year 1996. This firm has served in this capacity since 1948.
Representatives of the firm will be present at the shareholders' meeting and
shall have the opportunity to make a statement if they desire to do so and to
respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROXY ITEM NO. 7.
OTHER MATTERS
SECURITIES EXCHANGE ACT OF 1934: Under the securities laws of the United States,
the Company's Directors, Executive Officers and certain other Officers, and any
persons holding more than ten percent of the Company's common stock are required
to report their ownership of the Company's common stock and any changes in that
ownership to the Securities and Exchange Commission and any exchange on which
its stock is traded. Specific due dates for these reports have been established,
and the Company is required to report in this proxy statement any failure to
file by these dates. All of these filing requirements have been satisfied by its
Directors and Officers. In making these statements, the Company has relied on
the written representations of its Directors and Officers and copies of the
reports that they have filed with the Commission.
SHAREHOLDER PROPOSALS: To be considered for inclusion in the Proxy Statement for
the Annual Meeting of Shareholders to be held in 1997, shareholder proposals
must be received by the Company at its Company Headquarters in Atlanta, Georgia
on or before November 24, 1996.
Management is not aware at this date that any other business matters will come
before the meeting. If, however, any other matters should properly come before
the meeting, it is the intention of the persons named in the proxy to vote
thereon in accordance with their judgment.
EQUIFAX INC.
T. H. Magis
Secretary
Atlanta, Georgia
March 28, 1996
25
EXHIBIT "A"
EQUIFAX INC.
1988 PERFORMANCE SHARE PLAN FOR OFFICERS,
INCLUDING PROPOSED AMENDMENTS
ARTICLE I
PURPOSE
The purpose of the plan is to provide incentive to key Officers of the
corporation (Equifax Inc. and/or its subsidiaries) who contribute in a
substantial degree to the long-term success of the Company, to provide a means
for such Officers to participate in such success and to assist in attracting and
retaining the highest quality people in key executive positions.
ARTICLE II
DEFINITIONS
The following words and phrases shall have the respective meanings set forth
below (unless the context indicates otherwise).
(1) "Approval of Shareholders" shall mean the affirmative vote of the
holders of at least a majority of the shares of common stock of the Company
then outstanding.
(2) "Committee" shall mean the Management Compensation Committee of the
Equifax Inc. Board of Directors, as the same from time to time may be
constituted.
(3) "Common Stock" means the Common Stock, $2.50 par value per share, of
the Company.
(4) "Company" shall mean Equifax Inc.
(5) "Earnings Per Share" shall mean, with respect to any fiscal year of the
Company, the Company's primary earnings per share after taxes from
continuing operations for such fiscal year, as determined in accordance
with generally accepted accounting principles consistently applied, as
shown in the (consolidated) financial statements of the Company for such
fiscal year certified by its independent certified public accountants, but
excluding capital gains or losses, extra-ordinary items (including any
acquisition or divestiture which is reported on Form 8-K) and the amount
accrued for the expense of this plan, all on an after-tax basis, based on
applicable tax law on the date the Share Unit is awarded, so that any
change or changes in any tax or accounting law or regulation during the
course of the Measurement Period will be disregarded in determining the
amount of awards to be distributed following the close of the Measurement
Period.
(6) "Economic Value Added" or "EVA" shall mean, with respect to any fiscal
year of the Company, the Company's net operating profit after income taxes
("NOPAT") less a capital charge for using the capital that is needed to
generate the Company's NOPAT. NOPAT is defined to be the Company's
operating income, plus goodwill amortization and imputed interest on
operating leases, all on an after tax basis. Operating income shall be
determined in accordance with generally accepted accounting principles
consistently applied, as shown in the (consolidated) financial statements
of the Company for such fiscal year certified by its independent certified
public accountants, but excluding capital gains or losses, extra-ordinary
items (including any acquisition or divestiture which is reported on Form
8-K) and the amount accrued for the expense of this plan, all on an
after-tax basis, based on applicable tax law on the date the Share Unit is
awarded, so that any change or changes in any tax or accounting law or
regulation during the course of the Measurement Period will be disregarded
in determining the amount of awards to be distributed following the close
of the Measurement Period. Capital charge is determined by multiplying (a)
capital by (b) the cost of capital. The cost of capital is the weighted
average cost of the Company's
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debt and shareholder's equity, as determined on a consistent basis. Capital
is defined as the Company's total assets, less (a) current liabilities, (b)
cash and cash equivalents (c) deferred income tax assets, and (d)
intangible assets recorded under Statement of Financial Accounting
Standards No. 87, "Employers' Accounting for Pensions," plus (a)
accumulated goodwill amortization, (b) present value of operating leases,
(c) short-term debt and current maturities of long-term debt and (d)
implied goodwill relating to acquisitions accounted for on a "pooling of
interest" basis.
(7) "Eligible Officer" shall mean Equifax Inc. elected Officers and any
other key Officer of Equifax Inc. or a subsidiary or division of Equifax
Inc. as determined by the Committee, from time to time, including any such
Officer who is a Director. An Eligible Officer shall not include an Officer
who is not a full-time employee, even though said Officer is a Director,
except that a person who was an Eligible Officer and a Director immediately
prior to his retirement as an employee of the Company shall continue to be
an Eligible Officer so long as he retains his position as an Officer and
Director.
(8) "Measurement Period" shall mean the three fiscal years of the Company
commencing with the fiscal year 1988, provided awards of share units are
made prior to July 31, 1988; otherwise, it shall mean the three fiscal
years of the Company commencing with the fiscal year following that in
which the award of a particular share unit is made; except that the
Measurement Period for a Share Unit awarded in the first quarter of the
fiscal year shall be the three fiscal years of the Company commencing with
the fiscal year in which the award is made.
(9) "Return on Equity" shall mean, with respect to any Measurement Period,
the percentage determined by dividing the sum of the Company's net earnings
after taxes from continuing operations, as shown in the financial
statements of the Company for such fiscal years certified by its
independent certified public accountants, but excluding capital gains or
losses, extraordinary items (including any acquisition or divestiture which
is reported on Form 8-K) and the amount accrued for the expense of this
plan, all on an after-tax basis, for the three fiscal years included in the
Measurement Period by the sum of the shareholders' equity of the Company as
of the beginning of each such year, based on applicable tax law on the date
the Share Unit is awarded, so that any change or changes in any tax or
accounting law or regulation during the course of the Measurement Period
will be disregarded in determining the amount of awards to be distributed
following the close of the Measurement Period.
(10) "Share Unit" shall mean the right to receive, subject to the
provisions of Articles V and VI of this plan, one share of Common Stock
plus an amount of cash equivalent to all cash dividends that would have
been paid to the holder of such Share Unit, if one share of Common Stock
had been issued to the holder on the date the Share Unit was issued.
Provided, however, that in no event will such cash equivalent to dividends
be paid on any Share Units forfeited.
ARTICLE III
ELIGIBILITY
All Equifax Inc. elected Officers, and any other key Officers of Equifax Inc. or
its subsidiaries or divisions, as determined by the Committee, from time to
time, shall be eligible for participation in this plan.
ARTICLE IV
ADMINISTRATION OF PLAN AND SELECTION OF PARTICIPANTS
This plan shall be administered by the Committee, and the Committee shall (1)
construe and interpret the plan, (2) make such reasonable rules and regulations
for the administration of the plan as it deems advisable, and (3) determine,
from time to time, those Officers who are to be awarded Share Units and the
number of Share Units to be awarded to each such Officer. No participant may be
awarded more than 100,000 share units during any fiscal year. In construing and
interpreting the plan, including the appropriateness of the forfeiture
provisions, the Committee is authorized to modify, from time to time, such
forfeiture provisions so as to eliminate forfeitures of Share Units where, in
the Committee's judgment, circumstances encountered
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over the Measurement Period warrant such modification. Any determination by the
Committee in administering, interpreting or construing the plan in accordance
with this Article shall be final, binding and conclusive for all purposes and
upon all interested persons.
ARTICLE V
NUMBER OF SHARES SUBJECT TO PLAN
ADJUSTMENTS, EFFECTIVE DATE AND TERMINATION
Subject to the provisions hereafter in this Article set forth, the number of
shares of Common Stock issued under this plan shall not exceed 600,000. In the
event that the Common Stock should, as a result of a stock-split, stock
dividend, reclassification, reorganization, recapitalization, combination of
shares or any other similar change, be changed into or exchanged for a different
number or kind of shares of stock or other securities of the Company or of any
affiliated corporation or entity, the number of shares of Common Stock then
subject to Share Units previously granted and then outstanding, and the
remaining shares of Common Stock which may be issued under this plan, shall be
appropriately adjusted by the Committee to reflect such change or exchange;
provided, however, that any fractional shares resulting from any such
adjustments shall be disregarded and the number of shares rounded to the next
lower whole number. If any Shares of Common Stock represented by Share Units
awarded under this plan are forfeited, canceled, or otherwise fail to be issued,
whether for failure to satisfy the conditions set forth in Article VI hereof or
otherwise, such Common Stock shall return to the status of authorized but
unissued under the plan. Subject to the approval of the shareholders of the
Company, this plan shall become effective for the year commencing January 1,
1988. No Share Units may be awarded under this plan after January 31, 2000.
ARTICLE VI
RIGHT TO RECEIVE COMMON STOCK
AND DIVIDEND EQUIVALENTS
Subject to the provisions of Article V and this Article VI, the holder of each
Share Unit shall be entitled to receive the Common Stock and cash to which such
unit entitles him or her as soon as practical after the end of the Measurement
Period with respect to that unit; provided, however, that:
(a) Each Share Unit awarded under the plan shall be forfeited and canceled
in all respects, and no Common Stock or cash shall be delivered or paid to
the holder thereof, in the event that:
(i) The employment of such holder by the Company is terminated, either
voluntarily or involuntarily, by the Company or the holder, for any
reason whatsoever (subject to the provisions of Article VII hereof)
prior to the end of the Measurement Period for that Share Unit, or
(ii) The employment status of the holder has changed prior to the end of
the Measurement Period for that Share Unit so that the holder is no
longer an Eligible Officer.
(iii) The Return on Equity for the initial Measurement Period for such
Share Unit is less than twenty percent (20%).
(b) A portion, or all, of each award of Share Units shall be forfeited and
canceled in all respects, and no Common Stock or cash shall be delivered or
paid with respect to the portion of such award so forfeited and canceled,
in the event that the aggregate Earnings Per Share for the initial
Measurement Period with respect to the Share Units which were the subject
of such award is not at least equal to an index of 399 (or 15% compounded
rate of increase) of the Earnings Per Share for the fiscal year (the "Base
Year")
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immediately preceding such Measuring Period. The portion of each such award
to be forfeited shall be determined in accordance with the following table:
IF AGGREGATE EARNINGS PER SHARE FOR MEASUREMENT PERIOD AS AN
INDEX OF EARNINGS PER SHARE FOR BASE YEAR IS
- --------------------------------------------------------------- PERCENTAGE OF SHARE
AT LEAST BUT LESS THAN UNITS FORFEITED
- -------- ------------------------------------------------ -------------------
399 --.............................................. None
381 399............................................. 10%
364 381............................................. 25%
350 364............................................. 50%
-- 350............................................. 100%
(c) The Committee shall establish, for each Measurement Period commencing
after 1995, the Company goals based on one or more of the following
measures: (a) aggregate Earnings Per Share, (b) aggregate Return on Equity,
(c) Economic Value Added and/or (d) the Company's common stock price. The
Committee may also establish such additional goals as the Committee, in its
discretion, deems appropriate. These goals will be established on or before
the date any Share Units relating to said Measurement Period are awarded.
The goals will be established with consideration given to the economic
conditions existing at the time said goals are established. A portion, or
all, of each award of Share Units shall be forfeited and canceled in all
respects, and no Common Stock or cash shall be delivered or paid with
respect to the portion of such award so forfeited and canceled, in the
event that the goals established for the Measurement Period are not
achieved, all as prescribed by the Committee. The Committee shall cause
each holder of Share Units to receive written notice of the goals
established for the Measurement Period to which said Share Units relate,
along with the forfeiture provisions relating to said Share Units. Even
though performance goals established for each Measurement Period are met or
exceeded, the Committee shall have the discretion, by participant, to
reduce the amount of an award that would otherwise be paid or to determine
that no portion should be paid. The Committee may not increase the amount
of an award that would otherwise be paid.
Nothing contained in this Article VI or elsewhere in this plan shall eliminate,
impair or otherwise affect the right of the Company to terminate or change the
employment of any Officer at any time, and the award of Share Units to any such
Officer shall not be deemed to, and shall not, result in any agreement,
expressed or implied, by the Company to retain such employee in any specific
position or in its employ for the duration of the Measurement Period with
respect to such Share Units or for any other period. Subject to the provisions
of this paragraph, each holder of Share Units may elect, by delivering written
notice of such election to the Secretary of the Company during the period
defined below, to surrender his or her right to receive up to one-half of the
Common Stock that would otherwise be issued with respect to such Share Units at
the end of the Measurement Period, in exchange for the right to receive an
amount of cash equal to the "Fair Market Value," as defined below, of the shares
of Common Stock the right to which is so surrendered. In order to be effective,
such written notice of election must be delivered to the Secretary of the
Company during a period beginning on the third business day following release
for publication (in the manner hereinafter set forth) of the Company's quarterly
statements of sales and earnings for the third fiscal quarter of the third
fiscal year of the Measurement Period and ending on the twelfth business day
following said release for publication. Any such election shall be subject to
the right of the Committee to disapprove the same, in whole or in part, at any
time after such election but prior to the issuance of shares of Common Stock
with respect to the particular Share Unit in accordance with the provisions of
this plan. In the event of the death, disability or retirement of the Officer
holding the Share Units, at any time during the Measurement Period to which said
Share Units relate, the award shall be distributed as provided in Article VII
hereof regardless of any election made by such Officer. The release for
publication of the Company's quarterly statements as referred to in the first
sentence of this paragraph shall be deemed to have been made at the time such
data appears (i) on a wire service, (ii) in a financial news service, (iii) in a
newspaper of general circulation or (iv) is otherwise made publicly available.
For purposes of this paragraph, the "Fair Market Value" of the Common Stock
shall be deemed to be the closing sale price thereof on the New York Stock
Exchange on the day the Committee approves the
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payout of each award of Share Units, if any. In the event such date is not a
business day or the shares of Common Stock did not trade on such business day,
the "Fair Market Value" shall be deemed to be the closing sale price on the last
previous day on which trading occurred in the Common Stock on such Exchange.
ARTICLE VII
DEATH, DISABILITY OR RETIREMENT OF ELIGIBLE OFFICER
OR CHANGE IN CONTROL OF THE COMPANY
(a) In the event of the termination of employment with the Company during any
Measurement Period of any Officer who then holds Share Units under this plan by
reason of the death or disability or retirement of such Officer, the Committee
may, but shall not be obligated to waive the continuation of the employment
requirement set forth in paragraph (a)(i) of Article VI above. In the event that
such requirement is waived, such Officer or his estate, as the case may be, will
be entitled to receive an award in cash equivalent to a pro rata portion of the
amount which said Officer would have received, if the employment of such Officer
had continued through the Measurement Period for such Share Units. For purposes
of Article VI and this Article VII, an Eligible Officer shall not be deemed to
have terminated his employment although he retires from said employment, if he
continues to serve as an elected Officer of Equifax Inc. or a subsidiary of the
Company and to serve as a Director of Equifax Inc.; said Officer shall be deemed
to have terminated his employment when his term of office expires and he is not
re-elected thereto, or when he is removed or resigns from office, if earlier.
(b) This pro rata portion shall be computed as follows:
(i) The shares of Common Stock shall be replaced with a cash amount
equivalent to the "Fair Market Value" of said shares, as described in
Article VI hereof;
(ii) The sum resulting from the immediately preceding calculation will be
added to the other cash portion of the award representing dividend
equivalents, as described in Article II (9) hereof;
(iii) The resulting sum will be multiplied by a fraction, the numerator of
which shall be the number of full calendar months during the Measurement
Period prior to the Officer's death, disability or retirement and the
denominator of which shall be thirty-six (36).
(c) In the event of the termination of employment with the Company, for any
reason, of any Officer after completing a Measurement Period, but before
distribution of his award is made, such Officer or his estate, as the case may
be, will be entitled to receive the shares of Common Stock and cash represented
by the Share Units held by such Officer at the end of the Measurement Period to
the same extent, in the same manner and at the same time as if the employment of
such Officer had not terminated.
(d) If there is a "change in control of the Company," as hereinafter defined,
during any Measurement Period, then, notwithstanding any other provision of this
plan to the contrary, any Officer holding any Share Unit shall be irrevocably
entitled to receive, in lieu of the cash and stock represented by the Share
Unit, an amount in cash which is equal to the Fair Market Value of the stock,
plus the cash which said Officer would have received in the absence of such
"change of control of the Company," and said Officer shall be so entitled
regardless of whether there is a change in employment status subsequent to such
"change in control of the Company." Such payment will be made within sixty (60)
days following the end of the applicable Measurement Period. In determining the
amount of such cash payment, the aggregate Earnings Per Share for the
Measurement Period will be the greater of actual Earnings Per Share for the
Measurement Period or the result of projecting Earnings Per Share for the entire
Measurement Period at the same annually compounded rate of increase of Earnings
Per Share actually experienced by the Company over that portion of the
Measurement Period prior to such "change of control of the Company." If twelve
months of the Measurement Period have not occurred prior to the "change of
control of the Company," then aggregate Earnings Per Share for the Measurement
Period will be projected to be an amount such that the percentages of
forfeitures and cancellations, as provided in Article VI, do not exceed the
percentages of forfeitures and cancellations applicable to awards for the most
recently completed Measurement Period. In determining the amount of cash
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payment under this paragraph VII (d), "Economic Value Added" for the Measurement
Period will be the lesser of (a) the product of target EVA established for such
share unit award multiplied by two, or (b) maximum EVA established for such
share unit award. In determining the "Fair Market Value" of the Common Stock for
purposes of such payment, the Fair Market Value of the Common Stock shall be the
highest price at which the Common Stock of the Company traded on the New York
Stock Exchange during the three (3) months immediately prior to the "change in
control of the Company."
(e) For purposes of this Article VII, a "change in control of the Company" shall
be deemed to have occurred in the event any person, corporation, partnership or
other entity, either alone or in conjunction with its "affiliates" as that term
is defined in Rule 405 of the General Rules and Regulations under the Securities
Act of 1933, as amended, or other group of persons, corporations, partnerships
or other entities who are not affiliates, but who are acting in concert, shall
own of record or beneficially more than fifty percent (50%) of the outstanding
shares of any class of voting stock of the Company.
ARTICLE VIII
NO RIGHTS AS SHAREHOLDER;
NONALIENATION OF BENEFITS
Until such time as Common Stock represented by a Share Unit is delivered to the
holder of such unit, such holder shall have no right, title or interest in any
specific share or shares of Common Stock, no right to vote such Common Stock or
to receive dividends thereon or any other right or privilege of a shareholder of
the Company.
Neither Share Units, the certificates referred to in Article IX below nor any
other right or benefit under this plan shall be subject to anticipation,
alienation, sale, assignment, pledge, encumbrance or charge, and any attempt to
anticipate, alienate, sell, assign, pledge, encumber or charge the same shall be
void and shall not be recognized or given effect by the Company.
ARTICLE IX
CERTIFICATES OF AWARD
The Company shall execute and deliver to each Officer awarded Share Units a
certificate, in the form prescribed by the Committee, evidencing such award and
stating the date thereof and number of Share Units that are the subject of the
award.
ARTICLE X
REGISTRATION AND LISTING OF COMMON STOCK
The Company may, at its discretion, cause the shares of Common Stock issued
under this plan to be registered under the Securities Act of 1933, on Form S-8
or a substantially similar form, and to be registered under any applicable state
securities laws, prior to the delivery of such shares. In the event that the
issuance of any such shares is not so registered, the Company may require, as a
condition to the issuance thereof, that the Officer to whom such shares are to
be issued represent and warrant in writing to the Company that the shares are
being acquired by him or her for investment for his or her own account and not
with a view to, for resale in connection with, or with an intent of
participating directly or indirectly in, any distribution of such shares within
the meaning of that Act, and a legend to that effect may be placed on the
certificate(s) representing such shares.
The Company shall cause the shares of Common Stock to be issued under this plan
to be listed on each securities exchange on which the Common Stock is listed
prior to the delivery of such shares.
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ARTICLE XI
AMENDMENT, SUSPENSION OR TERMINATION OF PLAN
The Board of Directors of the Company may amend, suspend or terminate this plan
in whole or in part at any time; provided that no such amendment, suspension or
termination shall adversely affect the rights of the holders of any Share Units
then outstanding; and provided further that, without the approval of the
shareholders of the Company, no modification of this plan by the Board of
Directors shall increase the number of shares of Common Stock which may be
issued hereunder.
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EXHIBIT B
AMENDED AND RESTATED ARTICLES OF INCORPORATION OF
EQUIFAX INC.
I.
The name of the Corporation is EQUIFAX INC.
II.
The Corporation shall have authority to issue Three Hundred Ten Million
(310,000,000) shares of stock of which Three Hundred Million (300,000,000)
shares shall be designated "Common Stock," $1.25 par value per share, and Ten
Million (10,000,000) shares shall be designated "Preferred Stock," $.01 par
value per share. Shares that are reacquired by the Corporation shall be
classified as treasury shares unless the terms of such stock provide to the
contrary.
The designations and preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption of the shares of stock are as follows:
COMMON STOCK
Subject to all of the rights of the Preferred Stock and Series A Participating
Preferred Stock as expressly provided herein, by law or by the Board of
Directors pursuant to this Article II, the Common Stock of the Corporation shall
possess all such rights and privileges as are afforded to capital stock by
applicable law in the absence of any express grant of rights or privileges
provided for herein, including, but not limited to, the following rights and
privileges:
(a) Dividends may be declared and paid or set apart for payment upon the
Common Stock out of any assets or funds of the Corporation legally
available for the payment of dividends;
(b) The holders of Common Stock shall have the right to vote for the
election of directors and on all other matters requiring shareholder
action, each share being entitled to one vote; and
(c) Upon the voluntary or involuntary liquidation, dissolution or
winding-up of the Corporation, the net assets of the Corporation available
for distribution shall be distributed pro rata to the holders of the Common
Stock in accordance with their respective rights and interests.
PREFERRED STOCK
The Preferred Stock may be issued from time to time by the Board of Directors as
shares of one or more series. The description of shares of each series of
Preferred Stock, including any preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption shall be as set forth in resolutions adopted by the
Board of Directors, and articles of amendment shall be filed with the Georgia
Secretary of State as required by law to be filed with respect to issuance of
such Preferred Stock, prior to the issuance of any such shares, provided that
the holders of shares of Preferred Stock will not be entitled to more than the
greater of (i) one vote per $100 liquidation value or (ii) one vote per share.
The holders of shares of Preferred Stock will not be entitled to vote on any
matter separately as a class, except to the extent specified with respect to
each series with respect to any amendment or alteration of the provisions of the
Articles of Incorporation that would adversely affect the powers, preferences,
or special rights of the applicable series of Preferred Stock.
The Board of Directors is expressly authorized at any time to adopt resolutions
providing for the issuance of, or providing for a change in the number of,
shares of any particular series of Preferred Stock and, if and to the extent
from time to time required by law, to file articles of amendment which are
effective without shareholder action to increase or decrease the number of
shares included in each series of Preferred Stock (but not to
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decrease the number of shares in any series below the number of shares then
issued), and to set or change in any one or more respects the designations,
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, or terms and conditions of
redemption relating to the shares of each series.
III.
Except as otherwise provided in these Amended and Restated Articles of
Incorporation or pursuant to the terms of any authorized series of Preferred
Stock or by action of the Board of Directors pursuant to the Georgia Business
Corporation Code, the vote required for shareholder action on all matters shall
be the minimum vote required by the Georgia Business Corporation Code.
IV.
(a) The business and affairs of the Corporation shall be managed by, or under
the direction of, a Board of Directors comprised as follows:
1. The number of Directors shall be not less than nine, nor more than 20
shareholders, and shall be fixed within such range by the Board of
Directors.
2. The Directors shall be divided into three classes, designated as Class
I, Class II and Class III. Each class shall consist, as nearly as may be
possible, of one-third of the total number of directors constituting the
entire Board of Directors. At each Annual Meeting of Shareholders,
successors to the class of directors whose term expires at that Annual
Meeting of Shareholders shall be elected for a three-year term. If the
number of directors has changed, any increase or decrease shall be
apportioned among the classes so as to maintain the number of directors in
each class as nearly equal as possible, and any additional director of any
class elected to the Board of Directors to fill a vacancy resulting from an
increase in such a class shall hold office for a term that shall coincide
with the remaining term of that Class, unless otherwise required by law,
but in no case shall a decrease in the number of directors for a class
shorten the term of an incumbent director. A director shall hold office
until the Annual Meeting of Shareholders for the year in which such
director's term expires and until his or her successor shall be elected and
qualified, subject, however, to prior death, resignation, retirement,
disqualification or removal from office.
3. Any vacancy on the Board of Directors that results from an increase in
the number of directors or from prior death, resignation, retirement,
disqualification or removal from office of a director shall be filled by a
majority of the Board of Directors then in office, though less than a
quorum, or by the sole remaining director. Any director elected to fill a
vacancy resulting from prior death, resignation, retirement,
disqualification or removal from office of a director, shall have the same
remaining term as that of his or her predecessor.
(b) Except as may be prohibited by law or by these Amended and Restated Articles
of Incorporation, the Board of Directors shall have the right to make, alter,
amend, change, add to, or repeal the By-laws of the Corporation, and have the
right (which, to the extent exercised, shall be exclusive) to establish the
rights, powers, duties, rules and procedures that from time to time shall govern
the Board of Directors, each of its members, including without limitation, the
vote required for any action by the Board of Directors, and that from time to
time shall affect the directors' powers to manage the business and affairs of
the Corporation. No By-law shall be adopted by shareholders that shall impair or
impede the implementation of the foregoing.
(c) Notwithstanding any other provisions of these Amended and Restated Articles
of Incorporation or the By-laws of the Corporation (and notwithstanding the fact
that a lesser percentage for separate class vote for certain actions may be
permitted by law, by these Amended and Restated Articles of Incorporation or by
the By-laws of the Corporation), the affirmative vote of the holders of not less
than two-thirds (2/3) of the votes entitled to be cast by the holders of all
then outstanding shares of Voting Stock, voting together as a single class,
shall be required to make, alter, amend, change, add to or repeal any provision
of these Amended and
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Restated Articles of Incorporation or the By-laws of the Corporation
inconsistent with this Article IV; provided, however, that this Article IV(c)
shall not apply to, and such two-thirds (2/3) vote shall not be required to
alter, amend, change, add to or repeal any provisions of the By-laws relating to
this Article IV, or this Article IV of these Amended and Restated Articles of
Incorporation, recommended by a majority of the Board of Directors.
(d) The invalidity or unenforceability of this Article IV, or any portion
hereof, or of any action taken pursuant to this Article IV shall not affect the
validity or enforceability of any other provision of these Amended and Restated
Articles of Incorporation, any action taken pursuant to such other provision, or
any action taken pursuant to this Article IV.
V.
No director shall have any personal liability to the Corporation or to its
shareholders for monetary damages for breach of duty of care or other duty as a
director, by reason of any act or omission occurring subsequent to the date when
this provision becomes effective, except that this provision shall not eliminate
or limit the liability of a director for:
(a) Any appropriation of any business opportunity of the Corporation in
violation of the director's duties;
(b) Acts or omissions which involve intentional misconduct or a knowing
violation of law;
(c) Liabilities of a director imposed by Section 14-2-832 of the Georgia
Business Corporation Code; or
(d) Any transaction from which the director derived an improper personal
benefit.
VI.
The Corporation shall indemnify its officers and directors to the fullest extent
permitted under the Georgia Business Corporation Code. Such indemnification
shall not be deemed exclusive of any additional indemnification that the Board
of Directors may deem advisable or of any rights to which those indemnified may
otherwise be entitled. The Board of Directors of the Corporation may determine
from time to time whether and to what extent to maintain insurance providing
indemnification for officers and directors and such insurance need not be
limited to the Corporation's power of indemnification under the Georgia Business
Corporation Code.
IN WITNESS WHEREOF, EQUIFAX INC. has caused these Amended and Restated Articles
of Incorporation to be executed by its duly authorized officer on the
day of , 1996.
EQUIFAX INC.
By:
Name:
Title:
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EXHIBIT C
PROXY
EQUIFAX INC.
The undersigned hereby appoints C. B. Rogers, Jr.; D. W. McGlaughlin; John L.
Clendenin; and D. Raymond Riddle and each of them with power of substitution in
each, proxies to appear and vote all common stock of the undersigned in Equifax
Inc. at the Annual Meeting of the Shareholders to be held May 1, 1996, and at
all adjournments thereof, for the following purposes:
(1) Election of Directors / / FOR all nominees / / WITHHOLD AUTHORITY to
listed below (except as vote for all nominees
marked to the contrary listed below
below)
Thomas F. Chapman; Robert P. Forrestal; Tinsley H. Irvin; D. Raymond Riddle;
Betty L. Siegel, Ph.D.; and Derek V. Smith
(Instruction: To withhold authority to vote for any individual nominee(s), write
the name(s) of such nominee(s) immediately below.)
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(2) Proposal to Approve the Amended Equifax Inc. 1988 Performance Share Plan for
Officers
/ / For / / Against / / Abstain
(3) Proposal to Amend the Articles of Incorporation to Increase the Amount of
Authorized Common Stock
/ / For / / Against / / Abstain
(4) Proposal to Amend the Articles of Incorporation to Authorize "Blank Check"
Preferred Stock
/ / For / / Against / / Abstain
(5) Proposal to Amend the Articles of Incorporation to Adopt the Minimum
Shareholder Vote Required Under Current State of Georgia Law
/ / For / / Against / / Abstain
(6) Proposal to Amend and Restate the Articles of Incorporation to Modernize and
Conform to Current State of Georgia Law
/ / For / / Against / / Abstain
(7) Proposal to Appoint Arthur Andersen LLP as Independent Public Accountants
for the Company for the Year 1996.
/ / For / / Against / / Abstain
(8) In their discretion, upon such other matters in connection with the
foregoing or otherwise as may properly come before the meeting, or any
adjournment thereof; all as set forth in the Notice of the Annual Meeting
and Proxy Statement, as dated, receipt of which is hereby acknowledged.
THIS PROXY WILL BE VOTED AS DIRECTED, OR, IF NO DIRECTION IS INDICATED, WILL BE
VOTED "FOR" THE ABOVE MATTERS.
CONTINUED ON REVERSE -- PLEASE COMPLETE OTHER SIDE
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(CONTINUED FROM OTHER SIDE)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
IMPORTANT: Please date this proxy and sign exactly as your name or names appear
hereon. If stock is held jointly, signature should include both names.
Executors, administrators, trustees, guardians and others signing in a
representative capacity, please give your full title(s).
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(SIGNATURE OF SHAREHOLDER)
Dated , 1996
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IMPORTANT: PLEASE SIGN PROXY EXACTLY AS YOUR NAME OR
NAMES APPEAR HEREON.
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