KANSAS
CITY SOUTHERN
2008 STOCK OPTION
AND PERFORMANCE AWARD PLAN
RESTRICTED
SHARES AWARD AND PERFORMANCE SHARES AWARD AGREEMENT
By
this Agreement, Kansas City Southern, a Delaware corporation (the
“Company”), awards to you, [Name] , an employee
of the Company or of an Affiliate, as Grantee, the number of
Restricted Shares of the Company’s Common Stock, $.01 par
value, set forth below (“Restricted Shares”), and the
number of Performance Shares set forth below for each specified
Performance Period, which Performance Shares represent a
conditional right to receive a number of shares of the
Company’s Common Stock, $.01 par value, determined by the
satisfaction of target performance goals for the applicable
Performance Period (“Performance Shares”). This Award
of Restricted Shares and this Award of target Performance Shares
are subject to the terms and conditions set forth below and in the
attached Exhibit A hereto and in the Kansas City Southern 2008
Stock Option and Performance Award Plan (including Committee rules,
regulations, policies and procedures established thereunder), as
may from time to time be amended (the “Plan”), all of
which are an integral part of this Agreement.
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[Date]
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3
Years, ending on [Date]
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Number
of Restricted Shares
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[No.
of Shares]
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TARGET
PERFORMANCE SHARES
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[Date]
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[Date]
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Number
of Target Performance Shares and Corresponding Performance
Periods:
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[Beginning
Date and Ending Date or Calendar Year]
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[Beginning
Date and Ending Date or Calendar Year]
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[Beginning
Date and Ending Date or Calendar Year]
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The
Awards evidenced by this Agreement shall not be effective until you
have indicated your acceptance of this Agreement by signing one
copy of this Agreement in the space provided below and returning it
to the Corporate Secretary’s Office, in the envelope
provided, within ten (10) days after your receipt of this
Agreement from the Company. You should retain one copy of this
Agreement for your records.
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Kansas
City Southern
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By:
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Name
and Title:
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[Name of Grantee]
[Address]
[City, State, Zip]
EXHIBIT
A
to
RESTRICTED SHARES AWARD AND PERFORMANCE SHARES AWARD
AGREEMENT
You
receive two Awards under this Agreement: an Award of Restricted
Shares and an Award of Performance Shares. This Exhibit A of
this Agreement consists of three sections. The first section
applies to your Award of Restricted Shares. The second section
applies to your Award of Performance Shares. The third section
contains provisions that apply to both your Award of Restricted
Shares and your Award of Performance Shares. This Exhibit A of
this Agreement also includes the attached Schedule of Performance
Goals
1.
Payment . The Restricted Shares are awarded to you without
requirement of payment.
2.
Transfer Restrictions . Until the restrictions lapse, the
Restricted Shares may not be assigned, alienated, pledged,
attached, sold or otherwise transferred or encumbered by you, and
any such purported assignment, alienation, pledge, attachment,
sale, transfer or encumbrance shall be void and unenforceable;
provided that the designation of a beneficiary pursuant to
Article 14 of the Plan shall not constitute an assignment,
alienation, pledge, attachment, sale, transfer or encumbrance.
Certificates will be transferred to you only as provided in
paragraph 3 of this Restricted Shares Award section.
3.
Certificates . You will receive certificates for the number
of your Restricted Shares with respect to which the restrictions
have lapsed. Until the restrictions lapse, your Restricted Shares
either will be evidenced by certificates held by or on behalf of
the Company (in which case you will sign and deliver to the Company
a stock power relating to the Restricted Shares so that the Company
may cancel the Restricted Shares in the event of forfeiture), or
the Restricted Shares will be reflected in a book-entry form or
other account maintained by the Company, as determined by the
Company.
4.
Rights as Stockholder . During the Period of Restriction you
will have all of the rights of a stockholder of the Company with
respect to the Restricted Shares subject to the provisions of
paragraph 2 of this Restricted Shares Award section.
5.
Lapse of Restrictions Other than Upon Retirement or
Disability . The Restricted Shares will vest and no longer be
subject to restrictions upon the first of the following events to
occur:
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(a)
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The end of the Period of Restriction, provided your Termination of
Affiliation does not occur prior to that date; or
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(b)
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Your Termination of Affiliation by reason of your death;
or
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(c)
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A Change of Control.
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6.
Lapse of Restrictions Upon Retirement or Disability . If,
prior to the occurrence of any of the events specified in paragraph
5 of this Restricted Shares Award section, you have a Termination
of Affiliation by reason of your Retirement or by reason of your
Disability, then upon such Termination of Affiliation, for every
consecutive 12-month period of employment completed beginning on
the Restricted Shares Grant Date and ending on the date of such
Termination of
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Affiliation,
one third (1/3) of the number of your Restricted Shares will vest
and no longer be subject to restrictions. Retirement means
Retirement as defined in the Plan (Termination of Affiliation after
having both attained age 55 and completed 10 years of service)
and as specified in Committee rules, regulations or policies (which
currently provide an additional Retirement event of Termination of
Affiliation after having attained age 65); provided, however, you
will not have a Termination of Affiliation by reason of your
Retirement unless your Termination of Affiliation occurs on or
after the last business day of the month in which you first satisfy
the conditions for Retirement.
7.
Acceleration of Vesting . The Committee may at any time or
times in its discretion accelerate the vesting of some or all of
your Restricted Shares by specifying a date, other than what is
provided in this Agreement, on which the Period of Restriction ends
and such Shares will no longer be subject to restrictions. Any such
Shares that become vested under this paragraph 7 will not be
forfeited under paragraph 8 of this Restricted Shares Award
section.
8.
Forfeiture . If you have a Termination of Affiliation prior
to any of the events specified in paragraph 5 and paragraph 6 of
this Restricted Shares Award section, then you will forfeit all of
your Restricted Shares upon such Termination of Affiliation. If you
have a Termination of Affiliation due to your Retirement or due to
your Disability under the provisions of paragraph 6 of this
Restricted Shares Award section, then you will forfeit that number
of your Restricted Shares that are not vested under the provisions
of paragraph 6 of this Restricted Shares Award section. All of your
rights to and interest in any Restricted Shares that are forfeited
under this paragraph 8 will terminate upon forfeiture. You agree to
immediately repay to the Company all dividends, if any, paid in
cash or in stock with respect to your forfeited Restricted
Shares.
1.
Payment . The Performance Shares are awarded to you without
requirement of payment by you.
2.
Transfer Restrictions . The Performance Shares are rights
that may not be assigned, alienated, pledged, attached, sold or
otherwise transferred or encumbered by you, and any such purported
assignment, alienation, pledge, attachment, sale, transfer or
encumbrance shall be void and unenforceable; provided that the
designation of a beneficiary pursuant to Article 14 of the
Plan shall not constitute an assignment, alienation, pledge,
attachment, sale, transfer or encumbrance.
3.
Number of Shares Earned . Your Award of Performance Shares
specifies a number of Performance Shares awarded with respect to
each of three different Performance Periods. The number of
Performance Shares designated for a Performance Period represents a
target number of Shares to be earned if the Company performance
goals (the “Performance Goals”) are met during the
Performance Period. As of the last day of each Performance Period,
the Committee will determine, in accordance with this paragraph 3,
the number of Shares, if any, earned by you with respect to that
Performance Period. The earned Shares will be paid as provided in
paragraph 7 of this Performance Shares Award section subject to
satisfaction of the vesting requirements and forfeiture provisions
of paragraph 4 and paragraph 11 of this Performance Shares Award
section. The number of Shares earned by you for a Performance
Period will equal the percentage determined under this paragraph 3
(the “Applicable Percentage”) multiplied by the number
of Performance Shares awarded to you for the Performance Period.
The Committee will determine the Applicable Percentage as soon as
practicable after the audited financial statements are received for
the final year of the Performance Period, or for the Performance
Period year if only one year. To determine the Applicable
Percentage,
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the
Committee will compare the Company’s actual performance for
the Performance Period to the Performance Goals for the Performance
Period as set forth on the schedule of Performance Goals attached
to this Exhibit A (the “Schedule”). The Schedule
describes and defines three levels of Performance Goals: Threshold,
Target and Maximum. The Schedule also specifies the Applicable
Percentage for each Performance Period if the actual performance
for the Performance Period is at Threshold, Target or Maximum. If
the actual performance is between Threshold and Target, then the
Applicable Percentage will be prorated between
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