UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): MAY 10, 2005
DST SYSTEMS, INC.
(Exact Name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
1-14036 43-1581814
(Commission File Number) (IRS Employer Identification No.)
333 WEST 11TH STREET, KANSAS CITY, MISSOURI 64105
(Address of principal executive offices) (Zip Code)
(816) 435-1000
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2.):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On March 2, 2005, the Board of Directors (the "DST Board") of DST Systems,
Inc. ("DST" or the "Company") approved the DST Systems, Inc. 2005 Equity
Incentive Plan (the "Employee Plan") and the DST Systems, Inc. 2005 Non-Employee
Directors' Award Plan (the "Directors' Plan"), in each case, subject to
stockholder approval. At the Annual Meeting of Stockholders of DST on May 10,
2005, stockholders approved the Employee Plan and the Directors' Plan. These
plans became effective as of May 10, 2005. The Employee Plan amends, restates
and renames the DST Systems, Inc. 1995 Stock Option and Performance Award Plan
("1995 Plan"). The Directors' Plan will replace the component of the 1995 Plan
that provided for equity awards to directors who are not employees of DST or any
affiliate ("Non-Employee Directors"). The descriptions of certain material terms
of the Employee Plan and the Directors' Plan set forth below are subject to the
specific provisions in the full text of such plans, which are attached as
Exhibits 10.1 and 10.2, respectively.
DST SYSTEMS, INC. 2005 EQUITY INCENTIVE PLAN
The term of the Employee Plan is from May 10, 2005 through May 9, 2015.
Eligible participants in the Employee Plan are employees, prospective employees
and consultants to DST or an affiliate. The Compensation Committee (the
"Committee") of the DST Board, which is made up entirely of independent
directors, or another committee of the DST Board that meets specified
independence criteria, will administer this plan. The Committee may interpret
and administer the Employee Plan, establish, amend, suspend or waive any rules
relating to the Employee Plan, and make any other determination and take any
other action that may be necessary or advisable for administration of the
Employee Plan. Except as otherwise expressly provided in the Employee Plan, all
determinations, designations, interpretations, and other decisions of the
Committee are final, conclusive and binding.
Subject to adjustment as provided in the Employee Plan, the number of
shares of common stock reserved for delivery under this plan is the sum of
4,000,000 shares, plus the number of shares remaining under the 1995 Plan as of
May 10, 2005 which are not subject to outstanding awards under the 1995 Plan and
not delivered out the shares reserved under the 1995 Plan, plus shares that
become available under the 1995 Plan after May 10, 2005 pursuant to forfeiture,
termination, lapse or satisfaction of an award in cash or property other than
shares of common stock, application as payment for an award, or, except with
respect to restricted stock, to satisfy tax withholding, plus any shares of
common stock required to satisfy substitute awards.
Subject to limits set forth in the Employee Plan, the Committee determines
the size of awards. The Committee may grant Shares of DST common stock, Dividend
Equivalents, Options (including Non-Qualified Stock Options and Incentive Stock
Options), Stock Appreciation Rights, Limited Stock Appreciation Rights,
Performance Units, Restricted Stock, Restricted Stock Units, Deferred Stock,
Annual Incentive Awards, Service Awards and Substitute Awards (each as defined
in the Employee Plan), any or all of which may be made contingent on continued
employment and/or achievement of performance-based criteria. The Employee Plan
sets forth a list of performance criteria, one or more of which may be applied
to awards. The Committee may adjust any award downward in its discretion. In
addition, the Committee may include or exclude items to measure specific
objectives, such as losses from discontinued operations, extraordinary gains or
losses, the cumulative effect of accounting changes, acquisitions or
divestitures, foreign exchange impacts and any unusual non-recurring gain or
loss. Performance-based awards may be paid in cash, shares, or the equivalent
value in any other form of award allowed in the Employee Plan, or any
combination thereof, as determined by the Committee.
The maximum number of shares with respect to which an individual may be
granted awards in one year is 800,000. The maximum cash award payout for which
an individual may be granted an award in any year is 600% of his or her base
salary (up to $1,000,000 of base salary). Vesting is determined by the Committee
at the time of grant, except that time-based restrictions on Restricted Stock
shall remain in effect at least until the third anniversary of the grant date
(subject to acceleration if the Committee allows in the event of death,
disability, change in control, constructive termination of employment or
termination of employment by DST other than for cause). Grantees may elect to or
may be required to defer receipt of cash awards or delivery of stock awards on
terms and conditions established by the Committee. Unless otherwise provided in
an agreement governing an award made under the Employee Plan, all awards other
than Service Awards become fully vested on a Change in Control (as defined in
the Employee Plan). In addition, if there is a Change in Control, the Committee
may provide for the cash-out of any award, adjust the award as appropriate to
reflect the Change in Control, or cause the award to be assumed by the survivor
or a Substitute Award to be granted by the survivor. Unless otherwise determined
by the Committee, awards granted under the Employee Plan are not transferable
except by will or the laws of descent and distribution. The Committee will have
sole discretion to permit the transfer of an award to certain family members
specified in the Employee Plan.
The DST Board may amend or terminate the Employee Plan, without stockholder
approval unless stockholder approval is required by any federal or state law or
regulation or the rules of any stock exchange on which DST common stock is
traded. However, unless permitted by the Employee Plan or the terms of the
award, no amendment or termination may materially adversely affect any
outstanding award without the grantee's consent.
In the event a stock dividend, stock split, reorganization,
recapitalization, spin-off, or other similar event affects shares such that the
Committee determines an adjustment to be appropriate to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Employee Plan, then the Committee may (among other actions and subject
to certain exceptions) adjust the number and type of shares available under the
Employee Plan, the number and type of shares subject to outstanding awards and
the exercise price of outstanding stock options and other awards.
The above description of the Employee Plan is qualified in its entirety by
reference to the terms of the Employee Plan attached hereto as Exhibit 10.1.
DST SYSTEMS, INC. 2005 NON-EMPLOYEE DIRECTORS' AWARD PLAN
The term of the Directors' Plan is from May 10, 2005 through May 9, 2015.
Eligible participants in the Directors' Plan are Non-Employee Directors. The
full DST Board will administer the Directors' Plan, provided that any
determination under this plan with respect to a particular Non-Employee Director
will be determined by a vote of the majority of the members of the DST Board
excluding such Non-Employee Director. The DST Board may interpret and administer
the Directors' Plan, establish, amend, suspend or waive any rules relating to
the Directors' Plan, and make any other determination and take any other action
that may be necessary or advisable for administration of this plan. Except as
otherwise expressly provided in the Directors' Plan, all determinations,
designations, interpretations, and other decisions of the DST Board are final,
conclusive and binding. All determinations of the DST Board shall be made by a
majority of its members, excluding any director with respect to whom the
determination is being made.
Subject to adjustment as provided in the Directors' Plan, the number of
shares of common stock reserved for delivery under this plan is the sum of
300,000 shares plus any shares of common stock required to satisfy Substitute
Awards (as defined in the Directors' Plan).
Subject to limits set forth in the Directors' Plan, the DST Board
determines the size of awards. Non-Employee Directors may receive Shares of DST
common stock, Dividend Equivalents, Options (non-qualified stock options),
Restricted Stock, Restricted Stock Units, Deferred Stock and Substitute Awards
(each as defined in the Directors' Plan), any or all of which may be made
contingent on continued service on the DST Board and/or achievement of
performance-based criteria.
Vesting is determined by the full DST Board at the time of grant, except
that time-based restrictions on Restricted Stock shall remain in effect at least
until the third anniversary of the grant date with accelerated vesting in
certain limited circumstances.
The DST Board may amend or terminate the Directors' Plan, without
stockholder approval unless stockholder approval is required by any federal or
state law or regulation or the rules of any stock exchange on which DST common
stock is traded. However, unless permitted by the Directors' Plan or the terms
of the award, no amendment or termination may materially adversely affect any
outstanding award without the grantee's consent.
In the event a stock dividend, stock split, reorganization,
recapitalization, spin-off, or other similar event affects shares such that the
DST Board determines an adjustment to be appropriate to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Directors' Plan, then the DST Board may adjust the number and type of
shares available under the Directors' Plan or subject to outstanding grants,
and, subject to various limits set forth in the Directors' Plan, the exercise
price of outstanding stock options and other awards.
The above description of the Directors' Plan is qualified in its entirety
by reference to the terms of the Directors' Plan attached hereto as Exhibit
10.2.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(C). EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
------------- ------------------------------------------------------------
10.1 DST Systems, Inc. 2005 Equity Incentive Plan
10.2 DST Systems, Inc. 2005 Non-Employee Directors' Award Plan
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized on this 12th day of May, 2005.
DST SYSTEMS, INC.
By: /s/ Randall D. Young
-------------------------------------
Name: Randall D. Young
Title: Vice President and General Counsel
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------------- ------------------------------------------------------------
10.1 DST Systems, Inc. 2005 Equity Incentive Plan
10.2 DST Systems, Inc. 2005 Non-Employee Directors' Award Plan