EQUIFAX INC.

 

KEY MANAGEMENT INCENTIVE PLAN

 

Amended and Restated Effective As Of January 1, 2006

 

ARTICLE I

 

PURPOSE

 

The purpose of the Plan is to provide incentive compensation to Eligible Executives of Equifax Inc. and/or its subsidiaries who make substantial contributions to the success of their employers, to provide a means for such Eligible Executives to participate in such success, and to assist in attracting and retaining the highest quality individuals in key executive positions. The Plan was originally effective January 1, 2000. The effective date of this amended and restated Plan is January 1, 2006 and the amended and restated Plan shall apply to all Awards granted on or after January 1, 2006; provided, that if the Company’s shareholders fail to approve the amended and restated Plan at the annual meeting in 2006, Awards granted for 2006 to Covered Persons shall be cancelled and of no force or effect, but Awards to Eligible Executives who are not Covered Persons may remain in full force and effect.

 

ARTICLE II

 

DEFINITIONS

 

The following words and phrases shall have the respective meanings set forth below (unless the context indicates otherwise).

 

(A)    “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.

 

(B)    “Award” shall mean the stated cash amount(s) to which Participants will be entitled upon achievement of goals based on Management Objectives established at the time the Award is granted.

 

(C)    “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

(D)    “Committee” shall mean the Compensation, Human Resources and Management Succession Committee of the Company’s Board of Directors, as the same from time to time may be constituted.

 

(E)    “Common Stock” means the Common Stock, $1.25 par value per share, of the Company.

 

(F)    “Company” shall mean Equifax Inc.

 

(G)    “Covered Persons” shall mean for each calendar year the Chief Executive Officer of the Company and the four other most highly compensated executive officers, as provided in Code Section 162(m) and the regulations thereunder.

 

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 (H)    “Eligible Executive” shall mean Equifax Inc. elected officers and any other key management personnel of Equifax Inc. or a subsidiary or division of Equifax Inc. as determined by the Committee, from time to time, including any officer who is a Director. An Eligible Executive 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 Executive and a Director immediately prior to his retirement as an employee of the Company shall continue to be an Eligible Executive so long as he retains his position as an officer and Director.

 

(I)    “Employer” shall mean Equifax Inc. or the subsidiary or affiliate by whom the Participant is employed at the time in question.

 

(J)    “Management Objective” shall mean specified levels of, or growth or changes in, one or more of the following criteria:

 

 

(1)

 

earnings per share;

 

 

(2)

 

economic value added;

 

 

(3)

 

revenue;

 

 

(4)

 

operating profit;

 

 

(5)

 

operating margin;

 

 

(6)

 

net income;

 

 

(7)

 

total return to shareholders;

 

 

(8)

 

cash flow/net assets ratio;

 

 

(9)

 

debt/capital ratio;

 

 

(10)

 

return on total capital;

 

 

(11)

 

return on equity;

 

 

(12)

 

common stock price;

 

 

(13)

 

cash provided from operations;

 

 

(14)

 

gross profit margin;

 

 

(15)

 

capital expenditures;

 

 

(16)

 

price/earnings growth ratio; and

 

 

(17)

 

book value per share.

 

If the Committee makes an Award subject to a particular Management Objective, the Committee shall adopt or confirm a written definition of that Management Objective at the time of the Award. Management Objectives may be described in terms of Company-wide objectives or objectives that are related to a specific division, subsidiary, Employer, department, region, or function in which the Participant is employed. Management Objectives may be made relative to the performance of other corporations. The Committee may establish goals or objectives other than the Management Objectives set forth above for Participants who are not Covered Persons.

 

(K)    “Measurement Period:” Management Objectives may be calculated on the basis of a single year, cumulatively for a stated number of years, as an average over a stated number of years, or otherwise, as determined by the Committee at the time the Management Objective is established, which shall be the “Measurement Period.”

 

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 (L)    “Participant” means any Eligible Executive to whom an Award has been granted but not yet paid pursuant to this Plan.

 

(M)    “Plan” means this Equifax Inc. Key Management Incentive Plan, as amended and restated effective as of January 1, 2006, and as it may be amended from time to time.

 

ARTICLE III

 

ELIGIBILITY

 

All Eligible Executives, as determined by the Committee, from time to time, shall be eligible for participation in this Plan.

 

ARTICLE IV

 

SELECTION OF PARTICIPANTS,

GRANT OF AWARDS AND

ADMINISTRATION OF PLAN

 

The Committee shall determine, from time to time, those Eligible Executives who are to be granted Awards pursuant to Article V below. This Plan shall be administered by the Committee, and the Committee shall (1) construe and interpret the Plan, and (2) make such reasonable rules and regulations for the administration of the Plan as it deems advisable. 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. The Committee may delegate its responsibilities under the Plan to such individuals, including members of management, as the Committee may select, provided that no such delegation shall be made with respect to Covered Persons that will cause Awards to such individuals to fail to qualify under Code Section 162(m).

 

ARTICLE V

 

GRANTS OF AWARDS

EFFECTIVE DATE AND TERMINATION

 

Subject to the provisions below, the maximum Award granted to any Participant in any fiscal year of the Company shall not exceed $5,000,000. Subject to the approval of the shareholders of the Company, this amended and restated Plan shall become effective for the Company’s fiscal year commencing January 1, 2006.

 

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ARTICLE VI

 

RIGHT TO RECEIVE CASH AWARD

CONVERSION TO EQUITY INTEREST

 

(A)    Subject to the provisions of Article V, the Participant shall be entitled to receive the cash to which his Award entitles him as soon as practical after the end of the Measurement Period with respect to that Award; provided, however, that:

 

(1)    Each Award granted under the Plan shall be forfeited and canceled in all respects, and no cash shall be delivered or paid to the Participant thereof, in the event that:

 

(a)    The employment of the Participant by the Employer is terminated, either voluntarily or involuntarily, by the Employer or the Participant, for any reason whatsoever (subject to the provisions of Article VII hereof) prior to the end of the Measurement Period for that Award;

 

(b)    The employment status of the Participant has changed prior to the end of the Measurement Period for that Award so that the Participant is no longer an Eligible Executive; or

 

(c)    The Management Objective for the Measurement Period for such Award is less than the minimum stated in the Award.

 

(2)    Except as otherwise provided below, a portion, or all, of each Award shall be forfeited and canceled in all respects, and no cash shall be delivered or paid with respect to the portion of such Award so forfeited and canceled, in the event that the aggregate Management Objective for the Measurement Period with respect to the Award is not at least equal to a minimum stated in the Award.

 

(3)    The Committee shall establish, for each Measurement Period, the goals based on one or more Management Objectives. These goals will be established on or before the date any Award relating to said Measurement Period is granted. 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 shall be forfeited and canceled in all respects, and no 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 deliver to each Participant written notice of the goals established for the Measurement Period to which said Award relates, along with the forfeiture provisions relating to said Award. Even though performance goals established for each Measurement Period are met or exceeded, the Committee shall have the discretion, as to each Participant, to reduce the amount of an Award that would otherwise be paid or to determine that no portion should be paid. In the event that the achievement of the performance goals for a Measurement Period are below expectations or are not met at all, the Committee may in its discretion grant Awards (or increase the otherwise earned Awards) to deserving Participants, other than Covered Persons. Except as otherwise provided herein, the Committee may not increase the amount of an Award that would otherwise be paid to a Covered Person.

 

(4)    In determining whether any Management Objective has been satisfied, the Committee may exclude any or all extraordinary items (as determined under U.S. generally accepted accounting principles), and any other unusual or non-recurring items, including but not limited to, charges or costs associated with restructurings of the Company, discontinued operations and the cumulative effects of accounting changes. In addition, the Committee may adjust any Management Objectives for a year as it deems equitable to recognize

 

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unusual or non-recurring events affecting the Company, changes in tax laws or accounting procedures and any other factors as the Committee may determine (including adjustments that would result in the Company’s payment of non-deductible compensation). The Committee may identify any such exclusions and adjustments which the Committee will use to determine whether a Management Objective has been satisfied by a Covered Employee when the Committee sets the related Management Objective.

 

(5)    Nothing contained in this Article VI or elsewhere in this Plan shall eliminate, impair or otherwise affect the right of the Employer to terminate or change the employment of any Eligible Executive at any time, and the grant of an Award to any such Eligible Executive shall not be deemed to, and shall not, result in any agreement, expressed or implied, by the Employer to retain such person in any specific position or in its employ for the duration of the Measurement Period with respect to such Award or for any other period.

 

(6)    Subject to the provisions of this paragraph, the terms of an Award may provide, if the Committee so directs in each instance, that each Participant may elect, by delivering written notice of such election to the Company in such manner and at such time as may be provided by the Committee to surrender his or her right to receive up to the full value of the Award that would otherwise be paid to the Participant at the end of the Measurement Period, in exchange for the right to receive an equity interest as described below. 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 cash with respect to the particular Award in accordance with the provisions of this Plan. In the event of the death, disability or retirement of a Participant, at any time during the Measurement Period to which an Award relates, the Award shall be distributed as provided in Article VII hereof regardless of any election made by such Participant. For purposes of this paragraph, the determination of the appropriate equity interest into which the cash award is converted shall be made based on rules adopted by the Committee and uniformly applied, and said rules shall be adopted prior to or at the time of the grant of the Award in question, and the aggregate value of the cash portion and the value of the equity interest for any individual, determined at the date of grant, shall not exceed the maximum referred to in Article V. The equity interest may be an option for purchase of Common Stock, restricted shares of Common Stock, or any other equity interest determined by the Committee. The equity interest may be issued by the Committee pursuant to the Company’s 2000 Stock Incentive Plan. To the extent applicable, any conversion of an Award under this paragraph shall be made in a manner consistent with Code Section 409A and the regulations thereunder.

 

(7)    Promptly after the date on which the necessary information for a particular year becomes available, the Committee, or such persons as the Committee shall designate, shall determine in accordance with this section the extent to which the Management Objective or other goals have been achieved for such year and authorize the payment of the value of an Award, if any, to each Participant. The Committee shall review and ratify the Award determinations and shall certify such Award determinations in writing. Payment of Awards shall be made as soon as practical after the certification of Awards by the Committee, but no later than March 15 of the year following the Plan Year to which the Award relates. The amount of applicable Federal, State, or Local withholding taxes of any kind required by law to be withheld by the Company shall be withheld from the Award.

 

(8)    The Management Objectives and Awards under the Plan will be administered in a manner to qualify payments under the Plan to Covered Persons under Code Section 162(m), except when the Committee determines such compliance is not necessary.

 

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ARTICLE VII

 

DEATH, DISABILITY OR RETIREMENT OF ELIGIBLE EXECUTIVE

OR CHANGE IN CONTROL OF THE COMPANY

 

(A)    Except with respect to Awards to Covered Persons, in the event of the termination of employment with the Employer during any Measurement Period of any Participant by reason of the death or disability or retirement of such Participant, the Committee may, but shall not be obligated to, waive the continuation of the employment requirement set forth in paragraph (A)(1)(a) of Article VI above. In the event that such requirement is waived, such Participant 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 Participant would have received, if the employment of such Participant had continued through the Measurement Period for such Award. For purposes of Article VI and this Article VII, a Participant 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 Eligible Executive 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:

 

The level of Award which would have been earned based on the level of actual achievement of the Management Objective at the end of the Measurement Period will be multiplied by the base salary paid to the Participant during the Measurement Period prior to the Participant’s termination of employment

 

(C)    In the event of the termination of employment with the Employer of any Participant after completing a Measurement Period, but before distribution of his Award is made, such Participant or his estate, as the case may be, will be entitled to receive the Award to the same extent, in the same manner and at the same time as if the employment of such Eligible Executive had not terminated, except that if the Participant has directly or indirectly engaged in any activity that is harmful to the Company or the Employer, as determined by the Committee in its sole discretion (including without limitation the disclosure or misuse of any confidential information or trade secrets of the Company or the Employer), then Participant shall forfeit any entitlement to such Award.

 

(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 Participant holding any Award shall be irrevocably entitled to receive an amount in cash which is equal to (i) the target award if the change in control occurs during the first measurement year, or (ii) 150% of the target award if the change in control occurs after said first year (but no less than the projected payout determined on the effective date of the change in control if the change in control occurs during the last three months of the Measurement Period). Such payment will be made within sixty (60) days following 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 upon the occurrence of any of the following events:

 

(1)    Voting Stock Accumulations.    The accumulation by any Person of 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 Article VII(E)(1), a Change in Control will not be deemed to have occurred if the accumulation of twenty percent (20%) or more of the voting

 

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power of the Company’s Voting Stock results from any acquisition of Voting Stock (i) directly from the Company that is approved by the Incumbent Board, (ii) by the Company, (iii) 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 all of the provisions of clauses (i), (ii) and (iii) of subparagraph VII(E)(2); or

 

(2)    Business Combinations.    Consummation of a Business Combination, unless, immediately following that Business Combination, (i) 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 (66 2/3%) 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, (ii) 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 (iii) 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 of the action of the Board of Directors providing for that Business Combination; or

 

(3)    Sale of Assets.    A sale or other disposition of all or substantially all of the assets of the Company; or

 

(4)    Liquidations or Dissolutions.    Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company, except pursuant to a Business Combination that complies with all of the provisions of clauses (i), (ii) and (iii) of subparagraph (E)(2) of this Article VII.

 

For purposes of this Article VII, 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 January 1, 2006, or (b) members who become members of the Company’s Board of Directors subsequent to January 1, 2006, 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

 

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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.

 

“Disability” means permanently and totally disabled as defined in Code Section 22(e)(3).

 

ARTICLE VIII

 

NONALIENATION OF BENEFITS

 

Neither the Award 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

 

AMENDMENT, SUSPENSION OR TERMINATION OF PLAN

 

The Plan shall continue from year to year unless and until suspended or terminated. 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 Award then outstanding.

 

ARTICLE X

 

GOVERNING LAW

 

The Plan shall be construed and administered in accordance with the laws of the State of Georgia.

 

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