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): July 31, 2007
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) (I.R.S. 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. below):
[ ] 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 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On July 31, 2007, the DST Board of Directors granted new director
Robert T. Jackson equity compensation having a grant date fair market value of
$130,000. The Board made the grant under the 2005 Non-Employee Directors' Award
Plan in the form of 1,696 restricted shares of DST common stock. DST announced
Mr. Jackson's appointment to the DST Board in a Form 8-K dated July 17, 2007,
and the Board granted the shares in connection with the appointment.
The grant dollar value equals that of the annual equity grant to
non-employee directors, as described in DST's Proxy Statement for the 2007
annual stockholders' meeting, filed March 15, 2007 (the "Proxy Statement"). At
its July 31, 2007 meeting, the Board determined that any new director appointed
other than in connection with an annual stockholders' meeting shall
automatically receive, as of the date of appointment, an equity award equal in
value to annual equity awards to non-employee directors.
The Board also determined at the meeting that Mr. Jackson's grant, and
automatic new director and annual meeting grants, are restricted for one year
from the date of grant, subject to certain early vesting and forfeiture
provisions described in the form of award agreement attached hereto as Exhibit
10.1. Previously, share grants to non-employee directors were restricted for
three years. Other than the shorter restriction period, the restrictions are as
described in the Proxy Statement.
The above description of non-employee director equity awards is
qualified in its entirety by reference to the terms of the form award agreement
attached hereto as Exhibit 10.1.
ITEM 9.01 Financial Statements and Exhibits
(d). Exhibits.
Exhibit
Number Description
10.1 Form of Restricted Shares Award Agreement (approved on July 31,
2007) under the 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 6th day August, 2007.
DST SYSTEMS, INC.
By: /s/ Randall D. Young
Name: Randall D. Young
Title: Vice President, General Counsel
and Secretary
EXHIBIT 10.1
RESTRICTED SHARES AWARD AGREEMENT
-----------------------------
DST SYSTEMS, INC. 2005 NON-EMPLOYEE DIRECTORS' AWARD PLAN
---------------------
THIS AGREEMENT, is made and entered into this _____ day of ________,
____ (the "Grant Date"), by and between DST SYSTEMS, INC. ("Company") and
_____________________ ("Director").
The parties agree as follows:
1. Grant and Designation of Restricted Shares. Pursuant to Company's 2005
Non-Employee Directors' Award Plan, as amended and interpreted from time to time
("Plan"), Director is hereby granted, as of the Grant Date, _____________
(_________) shares of Company common stock ("Shares") restricted as set forth
herein. This award is granted pursuant to 2003 and 2007 actions of the Board of
Directors of the Company ("Board") setting equity compensation for non-employee
Board members and is administered by the Board or agents appointed by the Board
as provided in the Plan.
2. Restrictions and Privileges.
a. Scope of Restrictions. Prior to the Release Date (as set forth in
Paragraph 3(a) hereof), the Shares shall not be transferable (by sale,
assignment, disposition, gift, exchange, pledge, hypothecation, or otherwise)
other than by will or the laws of descent and distribution or pursuant to
Director's written beneficiary designation filed with the Company's Corporate
Secretary prior to Director's death. However, notwithstanding the foregoing,
Director may gift the Shares to a spouse, child, step-child, grandchild, parent,
sibling, or legal dependent of Director or to a trust of which the beneficiary
or beneficiaries of the corpus and the income shall be either such a person or
Director; provided, however, that the Shares gifted shall remain subject to the
restrictions, obligations and conditions described herein. Any attempted
disposition of the Shares contrary to the provisions hereof, and the levy of any
execution, attachment or similar process upon the Shares prior to the Release
Date, shall be null and void and without effect.
b. Evidence of Restrictions. The Company's Corporate Secretary shall
determine whether the Shares shall be evidenced by a certificate or held in book
entry form with the Company's transfer agent. Any certificate for the Shares
shall bear such legend evidencing the restrictions as is determined by the
Company's General Counsel, and any book entry account into which the Shares are
issued shall be marked as restricted.
c. Privilege of Stock Ownership. As of the Grant Date, and except as
provided in Paragraph 2(a) hereof, Director shall have all rights of a
stockholder with respect to the Shares including the right to vote and receive
all dividends or other distributions made or paid with respect to the Shares;
provided that (a) prior to the Release Date the Shares and any new, additional
or different securities Director may become entitled to receive with respect to
the Shares by virtue of a stock split or stock dividend or any other
distribution for the Shares or change in the corporate structure of the Company
shall be subject to the restrictions described in Paragraph 2(a) hereof; and (b)
all such stockholder rights shall cease upon forfeiture of the Shares under
Paragraph 3(b) hereof.
3. Release of Restrictions.
a. Release Date. The Shares shall be free and clear of the restrictions
set forth in Paragraph 2(a) hereof upon the "Release Date" which shall be the
earliest date on which any of the following occur: (i) the one year anniversary
of the Grant Date, (ii) Director's retirement from service as a Board member on
or after age 59 1/2, (iii) Director's cessation of service on the Board
("Termination of Affiliation") as a result of Disability (as defined in the
Plan, as amended and interpreted from time to time), (iv) Director's death, or
(v) a Special Termination (as defined in the Paragraph 3(d)) of Director's
service on the Board.
b. Forfeiture. Prior to the Release Date for Shares as set forth in
Paragraph 3(a), and except as provided in Paragraph 3(e), the Shares shall be
immediately forfeited to Company without payment by Company of any consideration
to Director if Director ceases to serve on the Board for any reasons other than
those set forth in Paragraph 3(a)(ii)-(v).
c. How Released. Provided Director has satisfied any tax withholding
obligations as referenced in Paragraph 4 hereof, Company shall at Director's
request on or after the Release Date have Company's transfer agent remove from
any certificate evidencing the Shares the legend evidencing the restrictions as
referenced in Paragraph 2(b) or instruct the transfer agent to note on the book
entry account that such restrictions on the Shares are removed. Upon death of
Director followed by a proper request for delivery of the Shares and proof of
payment of applicable income or other taxes, the Shares shall be delivered to
Director's beneficiary named in a written beneficiary designation filed with the
Company's Corporate Secretary or, if there is no such designated beneficiary, to
Director's executor or administrator or other personal representative acceptable
to the Company's Corporate Secretary. Any request to release the Shares to any
person or persons other than Director shall be accompanied by such documentation
as Company may reasonably require, including without limitation, evidence
satisfactory to Company of the authority of such person or persons to receive
the Shares.
d. Special Termination. A "Special Termination" shall mean a
Termination of Affiliation due to any one of the following: (a) a requirement of
the Director's employer that Director terminate service on the Board, provided
that Director does not control the employer as determined by the Board; (b) upon
the advice of counsel to the Company or independent counsel to the Board that
Director should terminate his or her service on the Board due to legal,
regulatory or other reasons, provided that such other reasons are not a basis
for Termination of Affiliation for Cause (as defined in the Plan) and are not
related to Director's failure to perform duties to the Company or its
stockholders; or (c) a failure to be nominated for re-election as a member of
the Board, provided that the reason for such failure to nominate is not due to
either Director's Termination of Affiliation for Cause or Director declining to
stand for reelection.
e. Release Date Subsequent to Change in Control. Notwithstanding any
other provision of this Agreement, if a Change in Control (as defined in
Paragraph 5 hereof) occurs prior to the Release Date, the Shares shall be free
and clear of the restrictions set forth in Paragraph 2(a) hereof upon the
earliest of any date subsequent to the Change in Control date that is (a) a
Release Date as set forth in Paragraph 3(a), or (b) the date of Director's
failure to be reelected to serve on the Board.
4. Taxes. Company shall pay all original issue and transfer taxes and all
other fees and expenses necessarily incurred by Company in connection with the
issuance of the Shares and the release of restrictions thereon; provided,
however, that such issuance and release are subject to payment on the Grant
Date, Release Date or other date as determined by the Company Chief Financial
Officer of any required federal, state and local withholding and other taxes,
which shall be paid by Director (or his or her guardian, legal representative or
successor). The valuation of the Shares for tax and other purposes shall be as
set forth in the rules and determinations of the Board and in applicable laws
and regulations. When and in the manner permitted by the Board and unless
otherwise prohibited by law, Director (or his or her guardian, legal
representative or successor) may irrevocably elect in writing on a Company
designated form to satisfy any income tax withholding obligation in connection
with the lapsing of restrictions on the Shares by requesting Company to retain
whole Shares which would otherwise have been released from restriction, which
Shares shall no longer belong to Director. Any such retention, and any use of
additional shares of common stock for tax withholding purposes ("Attested
Shares") as allowed by the Board, shall be governed by Board rules and
determinations. The Board may prescribe, among other things, that Attested
Shares shall (i) be fully paid and free and clear from all liens and
encumbrances and (ii) have been acquired on the open stock market or directly
held for a designated time period and not used for certain designated purposes
prior to the attestation. If authorized by the Board, Attested Shares may be
subject to contractual restrictions imposed by Company or restrictions under
federal or state securities law. If Shares have been delivered or restrictions
released prior to the time any withholding obligation arises, Company shall have
the right to require Director (or his or her guardian, legal representative or
successor) to remit to Company amounts sufficient to satisfy all federal, state
and local withholding tax requirements at the time such obligation arises and to
withhold from other amounts payable by Company to Director, as necessary. If,
within the deadline imposed by Company, Director has not selected, if allowed by
the Board, whether to have Shares retained or to pay cash for any required tax
withholding, or has failed to pay such tax withholding amounts if due, then
Company may (a) retain whole Shares which would otherwise have been issued or
released, (b) deduct such amounts from fees or amounts Company owes or will owe
Director, or (c) effect some combination of Share retention and deduction.
5. Definition of Change in Control. For purposes of this Agreement, a
"Change in Control" shall be deemed to have occurred if:
a. the Incumbent Directors (as defined in Paragraph 6) cease for any
reason to constitute at least seventy-five percent (75%) of the directors of the
Company then serving;
b. any "person" (as such term is used in Sections 13(d) and 14(d)(2) of
the Exchange Act of 1934 ("Exchange Act")) other than the Company or any
majority-owned Subsidiary of the Company, or an employee benefit plan of the
Company or of any majority-owned Subsidiary of the Company shall have become the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) directly or
indirectly, of securities of the Company representing twenty percent (20%) or
more (calculated in accordance with Rule 13d-3) of the combined voting power of
the Company's then outstanding voting securities; provided, however, that a
person's becoming such a beneficial owner shall not constitute a Change in
Control if such person is party to an agreement that limits the ability of such
person and its affiliates (as defined in Rule 12b-2 under the Exchange Act) to
obtain and exercise control over the management and policies of the Company.
c. a Reorganization Transaction (as defined in Paragraph 6) is
consummated, other than a Reorganization Transaction which results in the Voting
Securities (as defined in Paragraph 6) of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into Voting Securities of the surviving entity) at least sixty
percent (60%) of the total voting power represented by the Voting Securities of
such surviving entity outstanding immediately after the Reorganization
Transaction, if the voting rights of each Voting Security relative to the other
Voting Securities were not altered in the Reorganization Transaction; or
d. the stockholders of the Company approve a plan of complete
liquidation of the Company, other than in connection with a Reorganization
Transaction.
Notwithstanding the occurrence of any of the foregoing events, a Change
in Control shall not occur with respect to Director if, in advance of such
event, Director agrees in writing that such event shall not constitute a Change
in Control.
6. Other Definitions.
For purposes of the Paragraph 5 definition of Change in Control, the
following terms have the meaning set forth below:
a. "Affiliate" means any Person that directly or indirectly, through
one or more intermediaries, controls or is controlled by, or is under common
control with, the Company.
b. "Incumbent Directors" means (i) an individual who was a member of
the Board on the Effective Date; or (ii) an individual whose election, or
nomination for election by the Company's stockholders, was approved by a vote of
at least seventy-five percent (75%) of the members of the Board then still in
office who were members of the Board on the Effective Date; or (iii) individuals
whose election, or nomination for election by the Company's stockholders, was
approved by a vote of at least seventy-five percent (75%) of the members of the
Board then still in office who were elected in the manner described in (i) or
(ii) above; provided that no director whose election was in connection with a
proposed transaction which, if consummated, would be a Change in Control shall
be an Incumbent Director.
c. "Person" means any individual, sole proprietorship, corporation,
partnership, joint venture, limited liability company, association, joint-stock
company, trust, unincorporated organization, institution, public benefit
corporation, entity or government instrumentality, division, agency, body or
department.
d. "Related Party" means (i) a majority-owned Subsidiary of the
Company; or (ii) an employee or group of employees of the Company or of any
majority-owned Subsidiary of the Company; or (iii) an employee benefit plan of
the Company or of any majority-owned Subsidiary of the Company; or (iv) a
corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportion as their ownership of the voting power of
Voting Securities of the Company.
e. "Reorganization Transaction" means a merger, reorganization,
consolidation, or similar transaction or a sale of all or substantially all of
the Company's assets other than any such sale which would result in a Related
Party owning or acquiring more than fifty percent (50%) of the assets owned by
the Company immediately prior to the sale.
f. "Subsidiary" means an Affiliate controlled by the Company directly,
or indirectly, through one or more intermediaries.
g. "Voting Securities" of a corporation means securities of such
corporation that are entitled to vote generally in the election of directors,
but not including any other class of securities of such corporation that may
have voting power by reason of the occurrence of a contingency.
7. General.
a. Compliance With Certain Laws and Regulations. If the Board
determines that the consent or approval of any governmental regulatory body, or
that the listing, registration or qualification of the Shares upon any
securities exchange or under any law or regulation, is necessary or desirable in
connection with the issuing of the Shares or the lapsing of restrictions
thereon, Director shall supply Company with such certificates, representations
and information as Company may request and shall otherwise cooperate with
Company in obtaining any such listing, registration, qualification, consent or
approval.
b. Construction and No Waiver. Notwithstanding any provision of this
Agreement, the issuance of and the release of restrictions on the Shares are
subject to the provisions of the Plan. The failure of Company in any instance to
exercise any of its rights granted under this Agreement shall not constitute a
waiver of any other rights that may arise under this Agreement.
c. Notices. Any notice required to be given or delivered to Company
under the terms of this Agreement shall be in writing and addressed to Company
in care of its Corporate Secretary at its corporate offices, and such notice
shall be deemed given only upon actual receipt by Company. Any notice required
to be given or delivered to Director shall be in writing and addressed to
Director at the address indicated below Director's signature line on this
Agreement or such other address specified in a written notice given by Director
to Company, and all such notices shall be deemed to have been given or delivered
upon personal delivery or upon deposit in the U.S. mail, postage prepaid and
properly addressed to the party to be notified.
d. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of Delaware without reference to its principles of
conflicts of law.
e. Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof, and supersedes
all prior agreements or understandings between the parties relating thereto.
f. Amendments. This Agreement may be amended in writing executed by
both parties. This Agreement shall also be amended, without prior notice to
Director and without Director's consent, by the Board in the event the Board
deems it necessary or appropriate to make such amendments for purposes of
compliance with the American Jobs Creation Act of 2004 or regulations issued
pursuant thereto.
This Agreement will not be deemed to be binding or effective until
fully executed by both Director and an authorized representative of Company.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day
and year first above written.
DST SYSTEMS, INC.
By:___________________________________
(Signature of authorized DST representative)
DIRECTOR
___________________________________
(Director signature)
Print name:________________________
Print Address:_____________________
______________________________