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 AWARD TYPE;
A
