UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): MARCH 2, 2005
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DST SYSTEMS, INC.
(Exact Name of registrant as specified in its charter)
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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)
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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))
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
AMENDMENT OF STOCK OPTION AND PERFORMANCE AWARD PLAN
On March 2, 2005, the Board of Directors (the "Board") of DST Systems, Inc.
("DST" or the "Company") approved an amendment and restatement of DST's 1995
Stock Option and Performance Award Plan (the "1995 Plan") to update the
definition of "Change in Control" for awards with grant dates on or after
November 10, 2004. The 1995 Stock Option and Performance Award Plan, Amended and
Restated as of 3/2/05 (the "Amended 1995 Plan") amends the Change in Control
definition with respect to such awards to provide that a Change in Control will
occur (i) if Incumbent Directors (as defined in Amended 1995 Plan) cease for any
reason to constitute at least seventy-five percent (75%) of the directors of the
Company then serving, (ii) if any person becomes the beneficial owner of 20% or
more of DST's outstanding voting securities, with certain exceptions, (iii) in
the event of certain Reorganization Transactions (as defined in the Amended 1995
Plan), or (iv) in the event the Company's stockholders approve a plan of
complete liquidation of the Company, other than in connection with a
Reorganization Transaction.
The above description of the amended provisions in the Amended 1995 Plan is
qualified in its entirety by reference to the terms of the Amended 1995 Plan
attached hereto as Exhibit 10.1.
AMENDMENT OF EXECUTIVE INCENTIVE PLAN
In connection with the amendment to the 1995 Plan, on March 2, 2005, the
Compensation Committee of the DST Board (the "Compensation Committee") approved
an amendment and restatement of DST's Executive Incentive Plan, which plan was
adopted pursuant to, and as an implementation of, the 1995 Plan. The Executive
Incentive Plan (Amended and Restated as of March 2, 2005) (the "Amended
Executive Plan") includes amended change in control provisions and amended
provisions to allow Deferred Cash as an additional type of incentive
compensation that could be awarded. The change in control provisions have been
amended to (i) in effect, use the definition of "Change in Control" in the
Amended 1995 Plan (as set forth in that plan for grants on or after November 10,
2004) for grants under the Amended Executive Plan of Restricted Stock, Options
and Deferred Cash (each defined in the Amended Executive Plan) on or after March
2, 2005, and (ii) to include a provision regarding the effect of a Change in
Control on Deferred Cash grants.
The above description of the amended provisions in the Amended Executive
Plan is qualified in its entirety by reference to the terms of the Amended
Executive Plan attached hereto as Exhibit 10.2.
AMENDMENT TO RESTRICTED SHARE AWARD AGREEMENT
In connection with the amendment to the change in control provisions in the
1995 Plan, on March 2, 2005, the Compensation Committee approved a First
Amendment to Restricted Shares Award Agreement (the "Amendment") with respect to
certain officers, including Thomas A. McDonnell, the President and Chief
Executive Officer, and certain of the other four most highly compensated
officers in 2004, including Thomas A. McCullough, Executive Vice President and
Chief Operating Officer, Steven J. Towle, President and Chief Executive Officer
of DST Output, LLC, and J. Michael Winn, Group Chief Executive of DST
International Group Services Limited. The Amendment amends the provisions
regarding the lapsing of restrictions in the event of a change in control with
respect to the shares of restricted stock granted to such officers on November
10, 2004. The Compensation Committee's grant of such restricted shares was
reported on the Company's Form 8-K filed on October 29, 2004, and the form of
Restricted Share Award Agreement was filed as an exhibit to that Form 8-K.
The First Amendment to Restricted Shares Award Agreement provides for the
restrictions on the restricted shares to lapse pro rata upon a change in control
of DST, followed by full lapsing on the earlier of (a) January 31, 2010, or (b)
the date within three years after the change in control date that the officer is
terminated without cause or resigns for good reason.
The above description of the Amendment is qualified in its entirety by
reference to the terms of the Amendment attached hereto as Exhibit 10.3.
AMENDMENT TO RIGHTS AGREEMENT
On March 2, 2005, the DST Board approved an amendment to the Rights
Agreement dated as of October 6, 1995, as amended, to delete the exclusion of
Janus Capital Group Inc. from the definition of an "Acquiring Person" in such
agreement. DST entered into the Fourth Amendment to Rights Agreement, dated as
of March 2, 2005, with EquiServe Trust Company, N.A., the Rights Agent, which
amends the definition of "Acquiring Person" to delete such exclusion.
The above description of the Amendment is qualified in its entirety by
reference to the terms of the Amendment attached hereto as Exhibit 10.4.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(C). EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
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10.1 1995 Stock Option and Performance Award Plan, Amended and
Restated as of 3/2/05
10.2 Executive Incentive Plan (Amended and Restated as of March
2, 2005)
10.3 Form of First Amendment to Restricted Shares Award Agreement
10.4 Fourth Amendment to Rights Agreement
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 4th day of March, 2005.
DST SYSTEMS, INC.
By: /s/ Randall D. Young
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Name: Randall D. Young
Title: Vice President and General Counsel