EXHIBIT 10.4
[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 exists and that possibility, and the
uncertainty and questions that it may raise among management, may result in the
departure or distraction of management personnel to the detriment of the Company
and its shareholders. Accordingly, the Board of Directors of the Company 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 its employ, the Company agrees to provide
you the payments and benefits described in this Letter (in lieu of any severance
payments and benefits you would otherwise receive in accordance with the
Company's severance pay practices) if your employment with the Company is
terminated subsequent to a "Change in Control" of the Company (as defined in
PARAGRAPH 3) under the circumstances described in PARAGRAPH 4.
1. No Right to Continued Employment. This Letter does not give you any right
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to continued employment by the Company or a Subsidiary, and it will not
interfere in any way with the right the Company or a Subsidiary otherwise may
have to terminate your employment at any time.
2. Term of this Letter. The terms of this Letter will be effective as of
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January 1, 1998, and, except as otherwise provided in this Letter, will continue
in effect until December 31, 2002; provided that commencing on January 1, 1999
and each subsequent January 1, the terms of this Letter will be extended
automatically for one (1) additional year unless at least sixty (60) days prior
to January 1 of a given year, the Company notifies you that it does not wish to
continue this Letter in effect beyond its then current expiration date; and
provided further that if a Change in Control occurs prior to the expiration of
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this Letter, this Letter will continue in effect for three (3) years from the
Change in Control.
3. Change In Control. No benefits will be payable under this Letter unless
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there is a Change in Control and your employment by the Company is terminated
subsequently under the circumstances described in PARAGRAPH 4 entitling you to
benefits. For purposes of this Letter, a "Change in Control" of the Company
means the occurrence of any of the following events during the period in which
this Letter remains in effect:
3.1 Voting Stock Accumulations. The accumulation by any Person of
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Beneficial Ownership of twenty percent (20%) or more of the combined voting
power of the Company's Voting Stock; provided that for purposes of this
SUBPARAGRAPH 3.1, a Change in Control will not be deemed to have occurred
if the accumulation of twenty percent (20%) or more of the voting power of
the Company's Voting Stock results from any acquisition of Voting Stock (a)
directly from the Company that is approved by the Incumbent Board, (b) by
the Company, (c) by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any Subsidiary, or (d) by any Person
pursuant to a Business Combination that complies with CLAUSES (A), (B) AND
(C) of SUBPARAGRAPH 3.2; or
3.2 Business Combinations. Consummation of a Business Combination,
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unless, immediately following that Business Combination, (a) all or
substantially all of the Persons who were the beneficial owners of Voting
Stock of the Company immediately prior to that Business Combination
beneficially own, directly or indirectly, more than sixty-six and two-
thirds percent (66b%) of the then outstanding shares of common stock and
the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of Directors of the entity
resulting from that Business Combination (including, without limitation, an
entity that as a result of that transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or
more subsidiaries) in substantially the same proportions relative to each
other as their ownership, immediately prior to that Business Combination,
of the Voting Stock of the Company, (b) no Person (other than the Company,
that entity resulting from that Business Combination, or any employee
benefit plan (or related trust) sponsored or maintained by the Company, any
Eighty Percent (80%) Subsidiary or that entity resulting from that Business
Combination) beneficially owns, directly or indirectly, twenty percent
(20%) or more of the then outstanding shares of common stock of the entity
resulting from that Business Combination or the combined voting power of
the then outstanding voting securities entitled to vote generally in the
election of directors of that entity, and (c) at least a majority of the
members of the Board of Directors of the entity resulting from that
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement or of the action of the Board providing
for that Business Combination; or
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3.3 Sale of Assets. A sale or other disposition of all or substantially
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all of the assets of the Company; or
3.4 Liquidations or Dissolutions. Approval by the shareholders of the
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Company of a complete liquidation or dissolution of the Company, except
pursuant to a Business Combination that complies with CLAUSES (A), (B) AND
(C) of SUBPARAGRAPH 3.2.
For purposes of this PARAGRAPH 3, the following definitions will apply:
"Beneficial Ownership" means beneficial ownership as that term is used in
Rule 13d-3 promulgated under the Exchange Act.
"Business Combination" means a reorganization, merger or consolidation of
the Company.
"Eighty Percent (80%) Subsidiary" means an entity in which the Company
directly or indirectly beneficially owns eighty percent (80%) or more of
the outstanding Voting Stock.
"Exchange Act" means the Securities Exchange Act of 1934, including
amendments, or successor statutes of similar intent.
"Incumbent Board" means a Board of Directors at least a majority of whom
consist of individuals who either are (a) members of the Company's Board of
Directors as of the date of this Letter or (b) members who become members
of the Company's Board of Directors subsequent to the date of this Letter
whose election, or nomination for election by the Company's shareholders,
was approved by a vote of at least two-thirds (2/3) of the directors then
comprising the Incumbent Board (either by a specific vote or by approval of
the proxy statement of the Company in which that person is named as a
nominee for director, without objection to that nomination), but excluding,
for that purpose, any individual whose initial assumption of office occurs
as a result of an actual or threatened election contest (within the meaning
of Rule 14a-11 of the Exchange Act) with respect to the election or removal
of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board of Directors.
"Person" means any individual, entity or group (within the meaning of
Section 13(d)(3) or 14 (d)(2) of the Exchange Act).
"Voting Stock" means the then outstanding securities of an entity
entitled to vote generally in the election of members of that entity's
Board of Directors.
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4. Termination Following Change in Control. If any of the events described in
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PARAGRAPH 3 constituting a Change in Control occurs, you will be entitled to the
payments and benefits provided for in PARAGRAPH 5 if a subsequent termination of
your employment occurs within three (3) years from the date of that Change in
Control, unless that termination is (a) because of your death, (b) by the
Company for Cause or Disability or (c) by you other than for Good Reason. Those
payments and benefits will be in lieu of any severance payments you would
otherwise receive in accordance with the Company's severance pay practices, and
will have no effect on any of the Company's other employee benefit plans or
practices, as amended from time to time.
4.1 Cause. Termination by the Company of your employment for "Cause"
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means termination by the Company of your employment upon (a) your willful
and continued failure to substantially perform your duties with the Company
(other than any failure resulting from your incapacity due to physical or
mental illness), after a written demand for substantial performance is
delivered to you by the Chief Executive Officer of the Company (or if you
are the Chief Executive Officer, the Chairman of the Compensation Committee
of the Board of Directors) that specifically identifies the manner in which
the Chief Executive Officer believes that you have not substantially
performed your duties, or (b) your willfully engaging in misconduct that is
materially injurious to the Company, monetarily or otherwise. For purposes
of this SUBPARAGRAPH 4.1, no act, or failure to act, on your part will 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 was in the
best interest of the Company. Notwithstanding the above, you will not be
deemed to have been terminated for Cause unless and until you have been
given a copy of a Notice of Termination from the Chief Executive Officer of
the Company (or if you are the Chief Executive Officer, the Chairman of the
Compensation Committee of the Board of Directors), 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 the 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, you committed the conduct set forth above in
CLAUSES (A) OR (B) of this SUBPARAGRAPH 4.1, and specifying the particulars
of that finding in detail.
4.2 Disability. Termination by the Company of your employment for
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"Disability" means termination by the Company of your employment following
and because of your failure to perform your duties as an employee for a
period of at least one hundred eighty (180) consecutive calendar days as a
result of total and permanent incapacity due to physical or mental illness
or injury. Your incapacity must be certified by a licensed medical doctor
selected by you. You will continue to receive your full base salary at the
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rate in effect and any bonus payments under the Plan payable during the one
hundred eighty (180) day qualification period until termination of your
employment for Disability. After that termination, your benefits will be
determined in accordance with the Company's long-term disability plan then
in effect and any of the Company's other benefit plans and practices then
in effect that apply to you. The Company will have no further obligation
to you under this Letter and all supplemental benefits will be terminated.
If the Company disagrees with the certification of your incapacity, it may
appoint another medical doctor to certify his opinion as to your
incapacity, and if that doctor does not certify as to your incapacity, then
the two doctors will appoint a third medical doctor to certify their
opinion as to your incapacity, and the decision of a majority of the three
doctors will prevail. (The Company will bear the costs of the doctors
opinions.)
4.3 Good Reason. Termination by you of your employment for "Good
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Reason" means termination by you of your employment based on:
(a) The assignment to you of duties inconsistent with your position
and status with the Company as they existed immediately prior to a
Change in Control, or a substantial change in your title, offices or
authority, or in the nature of your responsibilities, as they
existed immediately prior to a Change in Control, 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 of this Letter or as your salary may be increased from time
to time;
(c) A failure by the Company to continue the Company's incentive
compensation plan(s), as it may be modified from time to time,
substantially in the form in effect immediately prior to a Change in
Control (the "Plan"), or a failure by the Company to continue you as
a participant in the Plan on at least the basis of your
participation immediately prior to a Change in Control or to pay you
the amounts that you would be entitled to receive in accordance with
the Plan;
(d) The Company's requiring you to be based more than thirty-five
(35) miles from the location where you are based immediately prior
to a Change in Control, except for required travel on the Company's
business to an extent substantially consistent with your business
travel obligations prior to the Change in Control, or if you consent
to that relocation, the failure by the Company to pay (or reimburse
you for) all reasonable moving expenses incurred by you or to
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indemnify you against any loss realized in the sale of your
principal residence in connection with that relocation;
(e) The failure by the Company to continue in effect any 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 immediately
prior to a Change in Control of the Company (or provide plans
providing you with substantially similar benefits), the taking of
any action by the Company that would adversely affect your
participation or materially reduce your benefits under any of those
plans or deprive you of any material fringe benefit enjoyed by you
immediately prior to a 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 immediately prior to a Change in
Control;
(f) The failure by the Company to obtain the assumption of the
agreement to perform this Letter by any successor, as contemplated
in PARAGRAPH 6; or
(g) Any purported termination of your employment that is not
effected pursuant to a Notice of Termination satisfying the
requirements of SUBPARAGRAPH 4.4 (and, if applicable, SUBPARAGRAPH
4.1).
4.4 Notice of Termination. Any purported termination by the Company
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pursuant to SUBPARAGRAPHS 4.1 OR 4.2 or by you pursuant to SUBPARAGRAPH 4.3
will be communicated by written Notice of Termination to the other party.
For purposes of this Letter, a "Notice of Termination" means a notice that
indicates the specific termination provision in this Letter relied upon and
setting forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the provision so
indicated. Any purported termination not effected pursuant to a Notice of
Termination meeting the requirements set forth in this Letter will not be
effective.
4.5 Date of Termination. For purposes of this Letter, the date of the
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termination of your employment ("Date of Termination") will be (a) if your
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, or (c) if your employment
is terminated by you or the Company for any other reason, the date
specified in the Notice of Termination, which will not be later than thirty
(30) days after the date on which the Notice of Termination is given.
5. Benefits upon Certain Terminations following a Change in Control. If within
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three (3) years following the Change in Control, your employment by the Company
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is terminated by the Company other than for Death, Disability or Cause, or if
you terminate your employment for Good Reason, then the following provisions
will apply:
5.1 Compensation through Date of Termination. The Company will pay you
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(i) any unpaid amount of your base salary through the Date of Termination,
(ii) with respect to any year then completed, any unpaid amount accrued to
you pursuant to the Plan, and (iii) with respect to any year then partially
completed, a pro rata portion through the Date of Termination of your
target annual bonus under the Plan. For purposes of (iii) above, your
"targeted annual bonus under the Plan" will be your annual base salary as
of the Date of Termination multiplied by the target percentage of your
bonus under the Plan.
5.2 Additional Severance. In lieu of any further salary payments to you
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for periods subsequent to the Date of Termination, the Company will pay as
severance pay to you on the fifth (5th) business day following the Date of
Termination a lump sum equal to three (3) times the sum of (i) your annual
base salary at the highest rate in effect during the twelve (12) months
immediately preceding the Date of Termination plus (ii) the higher of (A)
the highest annual bonus paid to you or paid but deferred on your behalf
under the Plan, (B) any earned, but unpaid, bonus accrued for your benefit
under the Plan, or (C) your highest targeted annual bonus under the Plan,
whether or not earned, in each case with respect to the three (3) calendar
years immediately preceding the Date of Termination and the partial
calendar year ending on the Date of Termination. For purposes of ITEM (C)
above and SUBPARAGRAPH 5.3, the "highest targeted annual bonus under the
Plan" for the partial calendar year ending on the Date of Termination will
be your annual base salary as of the Date of Termination multiplied by the
target percentage of your bonus under the Plan.
5.3 Additional Retirement Benefit. If you are a participant in the
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Company's U.S. Retirement Income Plan (the "Retirement Plan"), , the
Company will pay you a retirement benefit, in addition to the benefits to
which you are or would be entitled under the Retirement Plan. That benefit
will be a lump sum that is the actuarial equivalent of your benefits
calculated pursuant to the terms of the Retirement Plan with the following
adjustments: (i) 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, (ii) 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 the Company until attainment of age sixty-two (62), (iii) the
Final Average Earnings (for purposes of applying the benefit formula under
the Retirement Plan) will be determined using (A) the highest monthly rate
of Base Salary in effect during the twelve (12) months immediately
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preceding the Date of Termination, plus (B) the higher of (I) the highest
annual bonus paid to you or paid but deferred on your behalf under the
Plan, (II) any earned, but unpaid, bonus accrued for your benefit under the
Plan, or (III) your highest targeted annual bonus under the Plan, whether
or not earned, in each case with respect to the three (3) calendar years
immediately preceding the Date of Termination and the partial calendar year
ending on the Date of Termination, divided by twelve (12) (regardless of
the earnings limitations under the Retirement Plan or governmental
regulations applicable to those plans), and (iv) the monthly retirement
benefit so calculated will be reduced by an amount equal to the monthly
retirement benefit payable to you under the Retirement Plan and any
supplemental retirement plan of the Company in which you participate. All
capitalized terms used in this CLAUSE (C), unless otherwise defined, will
have the same meanings as those terms are defined in the Retirement Plan.
The actuarial equivalent will be calculated based on the assumptions
contained in the Retirement Plan on the Date of Termination; provided that
the assumptions on which the actuarial equivalent will be calculated will
be no less favorable to you than those assumptions contained in the
Retirement Plan on the date of the Change in Control.
5.4 Benefit Plans. Unless your employment is terminated for Cause, the
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Company will maintain in full force and effect, for your continued benefit
for three (3) years after your Date of Termination, all employee benefit
plans, programs and 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 those
plans, programs and arrangements. If your continued participation in any
of those plans, programs and arrangements is barred, the Company will
arrange to provide you with benefits substantially similar to those that
you were entitled to receive under them.
5.5 No Mitigation Required. You will not be required to mitigate the
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amount of any payment provided for in this PARAGRAPH 5 by seeking other
employment or otherwise, nor will the amount of any payment provided for in
this PARAGRAPH 5 be reduced by any compensation earned by you as the result
of employment by another employer after the Date of Termination, or
otherwise.
5.6 Tax Gross-up Payment. If any payments or benefits provided pursuant
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to this Letter or any other payments or benefits provided to you by the
Company are deemed Aexcess parachute payments@ under Section 280G of the
Internal Revenue Code of 1986, as amended (the ACode@), or are subject to
an excise or penalty tax under any similar provision of any other revenue
system to which you may be subject, the Company will provide a gross-up
payment to you in order to place you in the same after-tax position you
would have been in had no excise or penalty tax become due and payable
under Code Section 4999 or any similar provision of that other revenue
system. That gross-up payment will not apply to any excise or penalty tax
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attributable to any incentive stock option granted to you prior to April 1,
1998. Any gross-up payment to which you are entitled as a result of the
applicability of an excise tax under Code Section 4999 or any successor
provision of the Code, or as a result of any excise or penalty tax under
any similar provision of any other revenue system to which you may be
subject, will be determined in accordance with a "Policy with Respect to
Tax Gross-up Payments" adopted, or which will be adopted, by the Board of
Directors' Executive Committee, and once that policy is adopted, no
amendment of that policy will be effective with respect to your rights
under this Letter without your written consent.
6. Successors: Binding Agreement.
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6.1 Assumption by Company's Successor. The Company will require any
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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, to expressly assume and agree to perform this Letter. Failure of the
Company to obtain that agreement prior to the effectiveness of any
succession will be a breach of this Letter and will entitle you to
compensation from the Company in the same amount and on the same terms as
you would be entitled under this Letter if you terminated your employment
for Good Reason within three (3) years following a Change in Control,
except that for purposes of implementing the foregoing, the date on which
that succession becomes effective will be deemed the Date of Termination.
As used in this Letter, "Company" means Equifax Inc. and any successor to
its business and/or assets that executes and delivers the agreement
provided for in this SUBPARAGRAPH 6.1 or that otherwise becomes bound by
all the terms and provisions of this Letter by operation of law.
6.2 Enforcement by Your Successor. This Letter will inure to the benefit
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of and be enforceable by your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
you die subsequent to the termination of your employment while any amount
would still be payable to you pursuant to this Letter if you had continued
to live, all those amounts, unless otherwise provided in this Letter, will
be paid in accordance with the terms of this Letter to your devisee,
legatee or other designee or, if there be no designee, to your estate; that
payment to be made in a lump sum within sixty (60) days from the date of
your death.
7. Notice. For purposes of this Letter, notices and all other communications
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provided for in this Letter will be in writing and will 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 Letter, provided that all notices to the Company
will be directed to the attention of the Chief Executive Officer of the Company
(or if the notice is from the Chief Executive Officer, to the General Counsel of
the Company), or to that other address as either party may have furnished to the
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other in writing in accordance with this PARAGRAPH 7, except that notice of
change of address will be effective only upon receipt.
8. Modification and Waiver. No provision of this Letter may be modified,
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waived or discharged unless that waiver, modification or discharge is agreed to
in writing by you and that officer as may be specifically designated by the
Board of Directors of the Company. No waiver by either party at any time of any
breach by the other party of, or compliance with, any condition or provision of
this Letter to be performed by that other party will be deemed a waiver of
similar or dissimilar provisions or conditions at the time or at any prior or
subsequent time.
9. Construction. This Letter supersedes (a) any oral agreement between you and
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the Company and any oral representation by the Company to you with respect to
the subject matter of this Letter and (b) that letter agreement dated
______________ between you and the Company pertaining to change-in-control. The
validity, interpretation, construction and performance of this Letter will be
governed by the laws of the State of Georgia.
10. Severability. If any one or more of the provisions of this Letter or any
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word, phrase, clause, sentence or other portion of a provision is deemed illegal
or unenforceable for any reason, that provision or portion will be modified or
deleted in such a manner as to make this Letter as modified legal and
enforceable to the fullest extent permitted under applicable laws. The validity
and enforceability of the remaining provisions or portions will remain in full
force and effect.
11. Counterparts. This Letter may be executed in two or more counterparts,
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each of which will take effect as an original and all of which will evidence one
and the same agreement.
12. Legal Fees. If the Company breaches this Letter or if, within three (3)
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years following a Change in Control, (a) your employment is terminated by the
Company other than for Cause or Disability or (b) you terminate your employment
for Good Reason, the Company will reimburse you for all legal fees and expenses
reasonably incurred by you as a result of that termination (including all those
fees and expenses, if any, incurred in contesting or disputing the termination
or in seeking to obtain or enforce any right or benefit provided by this
Letter).
13. Employment by a Subsidiary. Either the Company or a Subsidiary may be your
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legal employer. For purposes of this Letter, any reference to your termination
of employment with the Company means termination of employment with the Company
and all Subsidiaries, and does not include a transfer of employment between any
of them. The actions referred to under the definition of "Good Reason" in
SUBPARAGRAPH 4.3 include the actions of the Company or your employing
Subsidiary, as applicable. The obligations created under this Letter are
obligations of the Company. A change in control of a Subsidiary will not
constitute a Change in Control for purposes of this Letter unless there is also
a contemporaneous Change in Control of the Company. For purposes of PARAGRAPH 1
and this paragraph, a "Subsidiary" means an entity more than fifty percent (50%)
of whose equity interests are owned directly or indirectly by the Company.
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If you accept the above terms, please sign and return to me the enclosed copy of
this Letter.
Sincerely,
Xxxxxx X. Xxxxxxx
Agreed to as of , 199
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your signature
