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Exhibit 10.2
DST SYSTEMS, INC.
EXECUTIVE INCENTIVE PLAN
(AMENDED AND RESTATED AS OF MARCH 2, 2005)
SECTION 1. PURPOSE
The purpose of the Executive Incentive Plan is to reward plan
participants for
achieving defined earnings per share objectives that support
increasing
profitability of DST Systems, Inc. The Plan provides both annual
and long-term
incentives, contingent upon meeting annual and cumulative
Earnings Per Share
goals. The Company intends that the Plan will facilitate in
securing, retaining,
and motivating employees of superior capability; in providing
competitive
management compensation; and in linking incentive awards to
objectives that
should enhance shareholder value.
SECTION 2. DEFINITIONS
When used in the Plan, the following words and phrases shall
have the following
meanings:
(a) "Affiliate" means any entity (other than the Company or a
Subsidiary) of
which the Company or a Subsidiary directly or indirectly owns
50% or more
of the combined voting power of all classes of stocks of such
entity or 50%
or more of the ownership interests in such entity.
(b) "Beneficiary" means the person, persons, trust, or trusts
which have been
designated by a Participant in his or her most recent written
beneficiary
designation filed with the Company to receive the benefits
specified under
this Plan, if any, upon the Participant's death, or, if there is
no
designated Beneficiary or surviving designated Beneficiary, then
the
person, persons, trust, or trusts entitled by will or the laws
of descent
and distribution to receive such benefits.
(c) "Board" means the Board of Directors of the Company.
(d) "Committee" means the Compensation Committee of the Board or
such other
Board Committee as may be designated by the Board to administer
the Plan;
provided, however, that the Committee shall consist of two or
more
directors of the Company each of whom is a "disinterested
person" within
the meaning of Rule 16b-3 under the Securities Exchange Act of
1934, as
amended from time to time and an "outside director" as required
by Section
162(m) of the Internal Revenue Code.
(e) "Common Stock" means the Common Stock of the Company.
(f) "Common Stock Outstanding" means the weighted average number
of actual
shares of Common Stock issued and outstanding during the Plan
Year,
determined in accordance with generally accepted principles. In
the event
of a reorganization, recapitalization, stock split, spin off,
stock
dividend, combination of shares, merger, consolidation,
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rights offering, or any other change in the capital structure of
the
Company, the Committee may make such adjustment, if any, as it
deems
appropriate in the determination of Common Stock
Outstanding.
(g) "Company" means DST Systems, Inc., a corporation organized
under the laws
of Delaware, or any successor company.
(g1) "Deferred Cash" means a right to receive the Non-Cash
Portion of the award
in cash (less any amounts required to be withheld for federal,
state and
local taxes and accounting for increases or decreases in amount
as provided
in Section 7(d)(ii)) as soon as practicable after the Release
of
Restriction Date set forth in Section 7(b)(iv).
(h) "Disability" means the Participant, because of a physical or
mental
disability, will be unable to perform the duties of his or her
customary
position of employment (or is unable to engage in any
substantial gainful
activity for Company) for an indefinite period which the
Committee
considers will be of long continued duration. The Plan considers
a
Participant disabled on the date the Committee determines the
Participant
satisfies the definition of disability. The Committee may
require a
Participant to submit to a physical examination in order to
confirm
disability. The Committee will apply the provisions of this
section in a
nondiscriminatory, consistent and uniform manner.
(i) "Earnings Per Share" or "EPS" means diluted earnings per
share, determined
in accordance with generally accepted accounting principles.
(j) "Equity" shall mean either Restricted Common Stock or
Options.
(k) "Income" means net income of the Company and its
consolidated Subsidiaries,
determined in accordance with generally accepted principles,
consistently
applied, for any Plan Year for which the incentive awards are
calculated,
as reported by the Company and certified by the Company's
independent
certified public accountants.
(l) "Market Price" shall be the average of the highest and
lowest reported
sales prices of Common Stock on the New York Stock Exchange.
(l1) "Non-Cash Portion" means that portion of an award
consisting of Restricted
Common Stock, Options or Deferred Cash.
(m) "Options" shall mean non-qualified options to purchase
Common Stock granted
pursuant to Sections 5 and 7.
(n) "Participant(s)" shall mean all officers of the Company, all
employees of
the Company who hold the managerial title of director, and such
employees
of Subsidiaries and Affiliates holding officer or managerial
director
positions as are designated from time to time by the
Compensation
Committee.
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(o) "Plan" means this Executive Incentive Plan, as it may be
amended from time
to time.
(p) "Plan Year" means the fiscal year of the Company.
(p1) "Resignation for Good Reason" means Participant's
resignation subsequent to
a Change in Control on not less than thirty (30) days written
notice to the
DST Systems, Inc. corporate secretary, effective at the end of
such notice
period, and for any of the following reasons occurring without
his consent:
(i) a change in the character of Participant's assigned duties
or a
reduction in the level of Participant's work or responsibility,
(ii) a
reduction in base salary or incentive bonus as in effect
immediately prior
to the Change in Control or in effect as a result of an increase
subsequent
to the Change in Control, (iii) a failure by Company or its
successor
either to continue in effect any benefit plans made generally
available to
Company executives at Participant's geographic location prior to
the Change
in Control or to provide other plans under which compensation
and benefits
are available in which Participant continues to participate on a
basis at
least equivalent to his participation in the Company plans
immediately
prior to the Change in Control, (iv) a failure by Company to
timely make to
Participant payment of any unfunded amounts due under any
Company benefit
plan as a result of the Change in Control, (v) the relocation of
the
principal office at which Participant worked immediately prior
to the
Change in Control to a location outside of the metropolitan area
where such
office was located but only if relocation requires Participant
to be based
anywhere other than such metropolitan area (except for required
travel on
Company business to an extent substantially consistent with
Participant's
obligations immediately prior to the Change in Control), or (vi)
any breach
of an employment agreement between Company, Subsidiary or
Affiliate, or any
successor company and Participant.
(q) "Restricted Common Stock" means Common Stock delivered in
payment of an
incentive award and subject to restrictions described in Section
7.
(r) "Subsidiary" means a corporation, domestic or foreign, the
majority of the
voting stock of which is owned directly or indirectly by the
Company.
(s) "Targeted Earnings Per Share" or "Targeted EPS" means the
Earnings Per
Share criteria to be established by the Committee, from time to
time and in
its sole discretion, pursuant to Section 4(b) for purposes of
determining
incentive awards.
(t) "Termination Without Cause" means a termination by Company,
Subsidiary or
Affiliate of Participant's employment that is not For Cause so
that
Participant is no longer employed by Company or by any
Subsidiary or
Affiliate. A termination of employment "For Cause" includes
termination for
any act of dishonesty, willful misconduct, gross negligence,
intentional or
conscious abandonment or neglect of duty, criminal activity,
fraud or
embezzlement, any unauthorized disclosure or use of material
confidential
information or trade secrets, or violation of any non-compete
or
non-disclosure agreement between Participant and Company,
Subsidiary or
Affiliate.
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SECTION 3. ELIGIBILITY AND PARTICIPATION
Except in the event of (i) retirement on or after age 60, (ii)
Disability, (iii)
death, or (iv) Termination Without Cause, a Participant must be
an active
employee of the Company, a Subsidiary, or Affiliate on December
31 of the Plan
Year to be eligible for an incentive award. In the event of
retirement,
Disability, death, or Termination Without Cause, the incentive
award as
calculated at the end of and for the full Plan Year shall be
pro-rated to
reflect the actual period of employment during the Plan
Year.
SECTION 4. INCENTIVE AWARD DETERMINATION
(a) INCENTIVE AWARD OPPORTUNITY The Committee shall establish
award opportunity
levels (which may be Threshold, Target and Maximum levels) at
the times and
in the manner it deems appropriate for carrying out the intent
of this
Plan.
The amount of the incentive award earned will be pro-rated
between
incentive award opportunity levels to reflect actual performance
attained.
Unless otherwise determined by the Committee, opportunity levels
expressed
as percentages of base salary shall be based on base salary as
of the
beginning of a Plan Year. No incentive award will be payable
with respect
to a performance measure and weighting where less than
Threshold
performance has been attained. No incentive award for a Plan
Year shall
exceed 300% of the Participant's base salary as of the beginning
of the
Plan Year.
(b) PERFORMANCE MEASURES AND WEIGHTING The Committee shall
establish
performance criteria (which may be Threshold, Target and Maximum
criteria)
and weighting among criteria for each Participant at the times
and in the
manner it deems appropriate for carrying out the intent of this
Plan.
SECTION 5. PAYMENT OF EARNED INCENTIVE AWARDS
As soon as practical after the end of the Plan Year and upon the
compilation of
the necessary information, the Committee shall determine the
degree of
attainment of the performance measures and the awards payable in
accordance with
Section 4 and this Section 5. The Committee shall certify, in
writing, prior to
the payment of incentive awards that the performance goals and
other material
terms of the Plan have been satisfied.
Unless otherwise determined by the Committee, the aggregate
incentive award
determined for a Plan Year (annual and cumulative) shall be paid
to the
Participant in a combination of cash and Equity or Deferred
Cash, depending on
the level of incentive award earned, as follows:
(a) 100% cash for that portion of a Participant's incentive
award up to and
including his or her Threshold incentive opportunity level;
(b) 50% cash and 50% Equity or Deferred Cash for that portion of
a
Participant's incentive award above his or her Threshold
incentive
opportunity levels up to and including his or her Maximum
incentive
opportunity level; and
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Upon the Committee's written certification, the Company shall
pay the cash
portion of the incentive award earned, less any amounts required
to be withheld
for federal, state and local taxes, as soon as practicable and
shall grant the
Non-Cash Portion in accordance with the procedures and
restrictions set forth in
Section 7.
SECTION 6. LIMITATIONS ON INCENTIVE AWARDS
The aggregate value of all incentive awards for a Plan Year
shall not exceed ten
percent (10%) of the Company's pre-tax income for such Plan
Year. If incentive
awards generated in a Plan Year exceed this amount, the
incentive awards for all
Participants shall be reduced pro-rata.
SECTION 7. NON-CASH PORTION ELECTION AND PROCEDURES
(a) SELECTION OF AWA
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