EXHIBIT 10.5
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The Company currently has change in control agreements in effect with the
following officers: Bruce S. Richards, David A. Post, Marietta Edmunds Zakas and
John T. Chandler. These agreements are substantially identical in all material
respects except as to the parties thereto, dates of execution and other details,
which are not material. A copy of such agreement in effect for the above named
individuals is filed herewith.
Date
Dear ____________:
Equifax Inc. (the "Company") considers the establishment and maintenance of a
sound and vital management to be essential to protecting and enhancing the best
interests of the Company and its shareholders. In this connection, the Company
recognizes that, as is the case with many publicly held corporations, the
possibility of a change in control may exist and that such possibility, and the
uncertainty and questions which it may raise among management, may result in the
departure or distraction of management personnel to the detriment to the Company
and its shareholders. Accordingly, the Executive Committee of the Board of
Directors of the Company (the "Committee") has determined that appropriate steps
should be taken to reinforce and encourage the continued attention and
dedication of members of the Company's management, including yourself, to their
assigned duties without distraction in the face of potentially disturbing
circumstances arising from the possibility of a change in control of the
Company.
In order to induce you to remain in the employ of the Company, this Letter
Agreement sets forth the severance benefits which the Company agrees will be
provided to you (in lieu of any severance pay you would otherwise receive in
accord with the Company's general practices) in the event your employment with
the Company is terminated subsequent to a "change in control of the Company" (as
defined in Section 3 hereof) under the circumstances described below.
1. Company's Right to Terminate. Upon a change in control of the Company (as
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defined in Section 3 hereof) the Company may terminate your employment at any
time subject to providing the benefits hereinafter specified in accordance with
the terms hereof.
2. Term of Agreement. This Agreement shall commence on the date hereof and
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shall continue in effect until December 31, 2001, provided, however, that
commencing on January 1, 1998 and each January 1 thereafter, the term of this
Agreement shall automatically be extended for one additional year unless at
least 60 days prior to such January 1 date, the Company shall have given notice
that it does not wish to extend this Agreement; and provided, further, that this
Agreement shall continue in effect beyond the term provided herein if a change
in control of the Company as defined in Section 3 hereof shall have occurred
during such term.
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3. Change In Control. No benefits shall be payable hereunder unless there
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shall have been a change in control of the Company, as set forth below, and your
employment by the Company, shall thereafter have been terminated in accordance
with Section 4 below. For purposes of this Agreement, a "change in control of
the Company" shall be deemed to exist 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, are determined to own of record or beneficially
more than fifty percent (50%) of the shares of outstanding stock of any class of
voting stock of the Company.
4. Termination Following Change in Control. If any of the events described in
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Section 3 hereof constituting a change in control of the Company shall have
occurred, you shall be entitled to the benefits provided in Section 5 hereof
upon the subsequent termination of your employment within five (5) years from
the date of such change in control, unless such termination is (a) because of
your death, (b) by the Company for Cause or Disability or (c) by you other than
for Good Reason.
(i) Death During Employment. If you die during the term of your
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employment, this Agreement shall terminate at the end of the month in which
your death occurs.
(ii) Disability. If you have a Disability, you shall be entitled to the
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benefits described in Section 5(i) hereof. Termination by the Company of
your employment based on "Disability" shall mean termination because of
your absence from your duties with the Company on a full-time basis for 180
consecutive calendar days, as a result of your incapacity due to physical
or mental illness, unless within thirty (30) days after Notice of
Termination (as hereinafter defined) is given following such absence you
shall have returned to the full-time performance of your duties.
(iii) Cause. If you terminate due to Cause, you shall be entitled to the
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benefits described in Section 5(ii) hereof. Termination by the Company of
your employment for "Cause" shall mean termination upon (A) the willful and
continued failure by you to substantially perform your duties with the
Company (other than any such failure resulting from your incapacity due to
physical or mental illness), after a demand for substantial performance is
delivered to you by the Chief Executive Officer of the Company which
specifically identifies the manner in which such Chief Executive Officer
believes that you have not substantially performed your duties, or (B) the
willful engaging by you in misconduct which is materially injurious to the
Company, monetarily or otherwise. For purposes of this paragraph, no act,
or failure to act, on your part shall be considered "willful" unless done,
or omitted to be done, by you not in good faith and without reasonable
belief that your action or omission
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was in the best interest of the Company. Notwithstanding the foregoing,
you shall not be deemed to have been terminated for Cause unless and until
there shall have been delivered to you a copy of a Notice of Termination
from the Chief Executive Officer of the Company after reasonable notice to
you and an opportunity for you, together with your counsel, to be heard
before (i) the Chief Executive Officer, or (ii) if you are an elected
officer of the Company, the Board of Directors of the Company, finding that
in the good faith opinion of such Chief Executive Officer, or, in the case
of an elected officer, finding that in the good faith opinion of two-thirds
of the Board of Directors that you were guilty of conduct set forth above
in Clauses (A) or (B) of this sub-paragraph, and specifying the particulars
thereof in detail.
(iv) Good Reason. If you terminate due to Good Reason, you shall be
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entitled to the benefits described in Section 5(iii) hereof. Termination
by you of your employment for "Good Reason" shall mean termination based
on:
(A) The assignment to you of any duties inconsistent with your
positions, duties, responsibilities and status with the Company
immediately prior to a change in control, or a change in your
reporting responsibilities, titles or offices as in effect
immediately prior to a change in control, or any removal of you from
or any failure to re-elect you to any of such positions, except in
connection with the termination of your employment for Cause or
Disability or as a result of your death or by you other than for
Good Reason;
(B) A reduction by the Company in your base salary as in effect on
the date hereof or as the same may be increased from time-to-time;
(C) A failure by the Company to continue the Company's incentive
compensation plan(s) as the same may be modified from time-to-time
but substantially in the form currently in effect immediately prior
to a change in control of the Company (the "Plan"), or a failure by
the Company to continue you as a participant in the Plan on at least
the present basis or to pay you the amounts which you would be
entitled to receive based on the Company's performance in accordance
with the Plan;
(D) The Company's requiring you to be based anywhere other than the
location where you are based immediately prior to a change in
control of the Company except for required travel on the Company's
business to an extent substantially consistent with your present
business travel obligations, or in the event you consent to any such
relocation, the failure by the Company to pay (or reimburse you for)
all reasonable moving expenses incurred by you
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or to indemnify you against any loss realized in the sale of your
principal residence in connection with any such relocation;
(E) The failure by the Company to continue in effect any benefit,
retirement or compensation plan, performance share plan, stock
option plan, life insurance plan, health and accident plan,
disability plan or another benefit plan in which you are
participating at the time of a change in control of the Company (or
plans providing you with substantially similar benefits), the taking
of any action by the Company which would adversely affect your
participation or materially reduce your benefits under any of such
plans or deprive you of any material fringe benefit enjoyed by you
at the time of the change in control, or the failure by the Company
to provide you with the number of paid vacation days to which you
are then entitled in accordance with the Company's normal vacation
practices in effect on the date hereof;
(F) The failure by the Company to obtain the assumption of the
agreement to perform this Agreement by any successor, as
contemplated in Section 6 hereof; or
(G) Any purported termination of your employment which is not
effected pursuant to a Notice of Termination satisfying the
requirements of paragraph (v) below (and, if applicable, Paragraph
(iii) above); and for purposes of this Agreement, no such purported
termination shall be effective.
(v) Notice of Termination. Any purported termination by the Company
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pursuant to Paragraphs (ii) or (iii) above or by you pursuant to
Paragraph (iv) above shall be communication by written Notice of
Termination to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which shall indicate the
specific termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of your employment under the provisions so indicated.
(vi) Date of Termination. "Date of Termination" shall mean (A) if your
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employment is terminated by your death, the end of the month in which your
death occurs, (B) if your employment is terminated for Disability, thirty
(30) days after Notice of Termination is given (provided that you shall not
have returned to the performance of your duties on a full-time basis during
such thirty (30) day period), (C) if your employment is terminated pursuant
to Paragraph (iii) above, the date specified in the Notice of Termination,
and (D) if your employment is terminated for any other reason, the date on
which a Notice of Termination is given; provided in all events that if
within thirty (30)
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days after any Notice of Termination is given, the party receiving such
Notice of Termination notifies the other party that a dispute exists
concerning the termination, the Date of Termination shall be the date on
which the dispute is finally determined, either by mutual written agreement
of the parties, by a binding and final arbitration award if agreed upon by
you and the Company, or by a final judgment, order or decree of a court of
competent jurisdiction, the time for appeal therefrom having expired and no
appeal having been perfected.
5. Compensation Upon Termination or During Disability.
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(i) During any period that you fail to perform your duties hereunder as a
result of incapacity due to physical or mental illness, you shall continue
to receive your full base salary at the rate then in effect and any bonus
payments under the Plan paid during such period until this Agreement is
terminated pursuant to Paragraph 4(ii) hereof. Thereafter, your benefits
shall be determined in accordance with the Company's long-term disability
plan then in effect.
(ii) If your employment shall be terminated for Cause, the Company shall
pay you your full base salary through the Date of Termination at the rate
in effect at the time Notice of Termination is given. The Company shall
have no further obligation to you under this Agreement and all supplemental
benefits shall be terminated. (This Agreement has no effect upon the
retirement benefits to which you are or will be entitled under the
Company's Retirement Plan and other tax qualified employee benefit plans,
as amended from time-to-time).
(iii) If your employment by the Company shall be terminated (A) by the
Company other than for Cause or Disability or (B) if you terminate your
employment for Good Reason, then you shall be entitled to the benefits
provided below:
(A) The Company shall pay you your full base salary through the Date
of Termination at the rate in effect at the time Notice of
Termination is given and the amount, if any, with respect to any
year then ended which pursuant to the Plan would have accrued to you
on the basis of the Company's performance but which has not yet been
paid to you;
(B) Subject to Section 5(vi) hereof, in lieu of any further salary
payments to you for periods subsequent to the Date of Termination,
the Company shall pay as severance pay to you on the fifth day
following the Date of Termination a lump sum equal to the product of
(i) the sum of (A) your annual base salary at the highest rate in
effect during the twelve (12) months immediately preceding the
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Date of Termination plus (B) the average of the three highest annual
bonus payments made to you or earned, but unpaid, bonus payments
accrued for your account under the Executive Incentive Plan, or
other annual cash incentive plan in lieu thereof, with respect to
the preceding five years, multiplied by (ii) the number three (3);
(C) In addition to the retirement benefits to which you are or would
be entitled under the Equifax Inc. U.S. Retirement Income Plan, as
amended from time-to-time, (the "Retirement Plan"), the Company
shall pay a retirement benefit hereunder, which benefit (except as
provided below) shall be payable in the form and at the times
provided in the Retirement Plan. Said benefits under this paragraph
shall be calculated as provided for in the Retirement Plan with the
following exceptions: (1) regardless of your Years of Vesting
Service under the Retirement Plan, you will be treated as if you
were 100% vested under the Retirement Plan, (2) the number of Years
of Benefit Service used will be the actual number of Years of
Benefit Service accumulated as of the date of termination plus an
additional number of Years of Benefit Service (up to a maximum of
five (5) additional years) equal to the number of additional Years
of Benefit Service that you would have earned if you had remained an
employee of Equifax until attainment of age sixty-two (62), (3) the
Final Average Earnings (for purposes of applying the benefit formula
under the Retirement Plan) shall be determined using (A) the highest
monthly rate of Base Salary in effect during the twelve (12) months
immediately preceding the Date of Termination) plus (B) the average
of the three highest annual bonus payments made to you or earned,
but unpaid bonus payments accrued for your benefit with respect to
the preceding five years (whether paid currently or deferred)
divided by twelve (regardless of the earnings limitations under the
Retirement Plan or regulations controlling such plans) provided,
however, that the retirement benefit payable hereunder shall be
reduced by an amount equal to the retirement benefit payable to you
by the Retirement Plan. All capitalized terms used herein, unless
otherwise defined, shall have the same meanings as such terms are
defined in the Retirement Plan.
(iv) Unless you are terminated for Cause, the Company shall maintain in
full force and effect, for your continued benefit for five (5) years all
employee benefit plans and programs or arrangements in which you are
entitled to participate immediately prior to the Date of Termination,
provided that your continued participation is possible under the general
terms and provisions of such plans and programs. In the event that your
continued participation in any such plan or program is barred, the Company
shall arrange to provide you with benefits substantially similar to those
which you were entitled to receive under
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such plans and programs.
(v) You shall not be required to mitigate the amount of any payment
provided for in this Section 5 by seeking other employment or otherwise,
nor shall the amount of any payment provided for in this Section 5 be
reduced by any compensation earned by you as the result of employment by
another employer after the Date of Termination, or otherwise.
(vi) Notwithstanding any other provision of this Agreement, the amount of
all payments to be made hereunder upon termination after a change of
control shall not exceed one dollar ($1.00) less than that amount which
would cause any such payment to be deemed a "parachute payment" as defined
in Section 280G of the Internal Revenue Code of 1954, as amended, and as
said statute is then in effect at the time of such payment. The foregoing
limitation shall apply only to sums paid pursuant to the terms of this
Agreement and shall not apply to any other sums or benefits to which you
are or will be entitled under other Company benefit, retirement or
compensation plans, including, but not limited to, the Company's
performance share plan, stock option plan, life insurance plan, disability
plan or health and accident plan.
6. Successors: Binding Agreement.
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(i) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all
of the business and/or assets of the Company, by agreement in form and
substance, reasonably satisfactory to you, expressly assume and agree to
perform this Agreement. Failure of the Company to obtain such agreement
prior to the effectiveness of any succession shall be a breach of this
Agreement and shall entitle you to compensation from the Company in the
same amount and on the same terms as you would be entitled hereunder if you
terminated your employment for Good Reason, except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination. As used in this
Agreement, "Company" shall mean the Company as hereinbefore named and any
successor to its business and/or assets as aforesaid which executes and
delivers the agreement provided for in this Paragraph 6 or which otherwise
becomes bound by all the terms and provisions of this Agreement by
operation of law.
(ii) This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If you should die
subsequent to the termination of your employment while any amount would
still be payable to you hereunder if you had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement
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to your devisee, legatee or other designee or, if there be no such
designee, to your estate; such payment to be made in a lump sum within
sixty (60) days from the date of your death.
7. Notice. For the purposes of this Agreement, notices and all other
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communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
Registered Mail, Return Receipt Requested, Postage Pre-Paid, addressed to the
respective addresses set forth on the first page of this Agreement, provided
that all notices to the Company shall be directed to the attention of the Chief
Executive Officer of the Company, or to such other address as either party may
have furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon receipt.
8. Miscellaneous. No provision of this Agreement may be modified, waived or
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discharged unless such waiver, modification or discharge is agreed to in writing
signed by you and such officer as may be specifically designated by the Board of
Directors of the Company. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the time or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
expressed or implied, with respect to the subject matter hereof have been made
by either party which are not set forth expressly in this Agreement. The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of Georgia.
9. Severability. In the event that any one or more of the provisions of this
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Agreement or any word, phrase, clause, sentence or other portion thereof shall
be deemed to be illegal or unenforceable for any reason, such provision or
portion thereof shall be modified or deleted in such a manner as to make this
Agreement as modified legal and enforceable to the fullest extent permitted
under applicable laws. The validity and enforceability of the remaining
provisions or portions thereof shall remain in full force and effect.
10. Counterparts. This Agreement may be executed in two or more counterparts,
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each of which shall take effect as an original and all of which shall evidence
one and the same Agreement.
11. Legal Fees. In the event the Company breaches this Agreement or in the
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event (A) you are terminated by the Company other than for Cause or Disability
or (B) you terminate your employment for Good Reason, the Company shall
reimburse you for all legal fees and expenses reasonably incurred by you as a
result of such termination (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination or in seeking to obtain
or enforce any right or benefit provided by this Agreement).
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If this letter correctly sets forth our agreement on the subject matter hereof,
kindly sign and return to me the enclosed copy of this letter which will then
constitute the Agreement between the Company and you on this subject.
Sincerely,
Equifax Inc.
By:____________________________
D. W. McGlaughlin
President & Chief Executive
Officer
Agreed to this _____ day of _______________, 19___
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