Exhibit 10.6
DST SYSTEMS, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
As Amended and Restated January 1, 2009
GENERAL
1.1 Purpose.
The purpose of the DST Systems, Inc. Supplemental Executive Retirement Plan
("Plan") is to supplement the DST Systems, Inc. 401(k) Profit Sharing Plan
("Qualified Plan"). The Plan is intended to generally replace lost benefits
under the Qualified Plan due to limitations applicable to plans of that nature
under the Internal Revenue Code of 1986, as amended ("Code").
1.2 Effective Dates; Code Section 409A.
(a) The Plan was initially effective January 1, 1999 and was most recently
amended and restated as of May 14, 2002. Pursuant to Committee action
on July 31, 2007, the accounts of all participants in the Plan, other
than Messrs. McDonnell, McCullough and Hager, were distributed on or
about March 14, 2008.
(b) The Plan is hereby amended and restated herein as of January 1, 2009.
The terms of the Plan as stated herein (other than Appendix A) shall
apply to all amounts in the Plan as of January 1, 2009 which were
deferred and vested on or after January 1, 2005 (and earnings
thereon). This Plan (other than Appendix A) shall be interpreted and
applied at all times in accordance with Code Section 409A, and
guidance issued thereunder.
(c) Amounts in the Plan as of January 1, 2009 which were deferred and
vested on or before December 31, 2004 (and earnings thereon) shall
continue to be governed at all times by the Plan as in effect on such
date, which Plan is attached hereto as Appendix A. Appendix A shall
not be materially modified (within the meaning of Code Section 409A
and guidance thereunder) (formally or informally, including by
interpretation), unless such modification expressly provides that it
is intended to be a material modification within the meaning of Code
Section 409A and guidance issued thereunder.
1.3 Nature of Plan.
The Plan is, and shall be administered as, an employee pension plan
benefiting a select group of management or highly compensated employees under
the provisions of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"). The Plan shall be "unfunded" for tax purposes and for
purposes of Title I of ERISA. Any and all payments under the Plan shall be made
solely from the general assets of the Company. A Participant's interests under
the Plan do not represent or create a claim against specific assets of the
Company or any Employer.
Nothing herein shall be deemed to create a trust of any kind or create any
fiduciary relationship between the Company or its Board of Directors, any
Employer, the Committee or its delegates, and a Participant, a Beneficiary or
any other person or entity claiming for or through a Participant or Beneficiary.
To the extent any person acquires a right to receive payments from the Company
under this Plan, such right is no greater than the right of any other unsecured
general creditor of the Company.
ARTICLE II.
DEFINITIONS
Whenever used in this Plan, the following words and phrases have the
meaning set forth below unless the context plainly requires a different meaning:
2.1 "Account" means the bookkeeping account established to reflect amounts
in the Plan as of January 1, 2009 which were deferred and vested on and after
January 1, 2005 and credited earnings, gains or losses thereon. "Accounts" as
used herein shall not include Grandfathered Accounts.
2.2 "Beneficiary" means the primary and contingent beneficiaries designated
by a Participant to receive any benefits payable hereunder following the
Participant's death. Any such designation will apply to both the Participant's
Account and his or her Grandfathered Account, if any; a Participant may not
designate different beneficiaries for his or her Account and Grandfathered
Account. Beneficiary designations shall be by written or electronic instrument
delivered to the Committee or its delegate, in accordance with procedures
established by the Committee. A Participant may designate the proportions in
which such beneficiaries are to receive such payments and may change such
designation from time to time. The last designation filed with the Committee or
its delegate prior to the Participant's death shall control. In the event no
beneficiary is designated, or if the designated beneficiary predeceases the
Participant or dies before the Participant's entire benefit under the Plan has
been distributed, "Beneficiary" shall mean first the Participant's surviving
spouse known to the Committee, then the Participant's natural or adopted
surviving children known to the Committee in equal amounts or, if there are no
such surviving spouse or children, the Participant's estate.
2.3 "Change in Control" occurs on:
(a) the date that any one person, or more than one person acting as a
group, acquires ownership of stock of the Employer that, together with
stock held by such person or group, constitutes more than 50% of the
total fair market value or total voting power of the stock of the
Employer;
b) the date that either:
(1) Any one person, or more than one person acting as a group,
acquires (or has acquired during a 12-month period ending on the
date of the most recent acquisition by such person or group)
ownership of stock of the Employer possessing 35% or more of the
total voting power of the stock of the Employer; or
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(2) A majority of the members of the Employer's board of directors is
replaced during an 12-month period by directors whose appointment
is not endorsed by a majority of the members of the Employer's
board of directors prior to the date of the appointment; or
(c) the date that any one person, or more than one person acting as a
group, acquires (or has acquired during a 12-month period ending on
the date of the most recent acquisition by such person or group)
assets from the Employer that have a total gross fair market value
equal to or more than 40% of the total gross fair market value of all
of the assets of the Employer immediately before such acquisitions.
2.4 "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
2.5 "Committee" means the Compensation Committee of the Company's Board of
Directors.
2.6 "Company" means DST Systems, Inc.
2.7 "Compensation" means the Participant's base salary actually paid during
a specified Plan Year, plus the value of accrued cash bonuses for such year.
2.8 "Disability" means that the Participant has a Separation from Service
and has been found to be disabled for purposes of the Company's separate
long-term disability plan. In the event the Participant is not a participant in
the Company's separate long-term disability plan, the Participant shall be
considered to be Disabled for purposes of this Plan if the Participant has a
Separation from Service and has been determined to be disabled by the Social
Security Administration and the Participant has provided sufficient evidence of
such determination.
2.9 "Effective Date" means January l, 1999, the first day of the first Plan
Year for which this Plan is effective.
2.10 "Employer" means the Company and all persons with whom the Company
would be considered a single employer under Code Sections 414(b) and 414(c),
except that in applying Code Sections 1563(a)(1), (2) and (3) for purposes of
determining a controlled group of corporations under Code Section 414(b), the
language "at least 50 percent" shall be used instead of "at least 80 percent" in
each place it appears in Code Sections 1563(a)(1), (2) and (3), and in applying
Treas. Regs. Sec. 1.414(c)-2 for purposes of determining a controlled group of
trades or businesses under Code Section 414(c), the language "at least 50
percent" shall be used instead of "at least 80 percent" in each place it appears
in Treas. Regs. Sec. 1.414(c)-2.
2.11 "Grandfathered Account" means the bookkeeping account established by
the Committee or its delegate to reflect amounts under the Plan as of January 1,
2009 which were deferred and vested under the Plan on or before December 31,
2004, and earnings credited on such amounts. Such amounts shall be governed at
all times by the terms of Appendix A.
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2.12 "Participant" means any individual who is eligible to participate in
the Plan under Section 3.1 and has been designated as a participant by the
Committee pursuant to Section 3.2 and whose benefits under the Plan have not
been fully distributed.
2.13 "Plan Year" means the twelve (12)-month period commencing each January
1 and ending on the next following December 31.
2.14 "Related Affiliate" means a trade or business, whether or not
incorporated, which is a member of a controlled group of corporations, trades or
businesses, as defined in Code Sections 414(b) and 414(c), of which the Company
is a member.
2.15 "Retirement" means a Separation from Service by a Participant after
attaining age 59 1/2.
2.16 "Separation from Service" means the Participant has a termination of
employment with the Employer. Whether a termination of employment has occurred
shall be determined based on whether the facts and circumstances indicate the
Participant and Employer reasonably anticipate that no further services will be
performed by the Participant for the Employer; provided, however, that a
Participant shall be deemed to have a termination of employment if the level of
services he or she would perform for the Employer after a certain date
permanently decreases to no more than twenty percent (20%) of the average level
of bona fide services performed for the Employer (whether as an employee or
independent contractor) over the immediately preceding 36-month period (or the
full period of services to the Employer if the Participant has been providing
services to the Employer for less than 36 months). For this purpose, a
Participant is not treated as having a Separation from Service while he or she
is on a military leave, sick leave, or other bona fide leave of absence, if the
period of such leave does not exceed six months, or if longer, so long as the
Participant has a right to reemployment with the Employer under an applicable
statute or by contract.
Notwithstanding the preceding, where a Participant would otherwise incur a
Separation from Service as provided above in connection with the Company's sale
or other disposition of assets (i.e., a transfer of substantial assets, such as
a plan or division, or substantially all the assets of a trade or business) to
an unrelated service recipient ("buyer"), the Company and the buyer may specify
whether a Participant who provides services to the Company or an Employer
immediately before the asset purchase transaction and who provides services to
the buyer immediately after the asset purchase transaction has experienced a
Separation from Service for this purpose, in accordance with Code Section 409A
and guidance issued thereunder.
2.17 "Specified Employee" has the meaning given such term by the Committee
by separate action given effect from time to time under Code Section 409A.
2.18 "Valuation Date" means the last business day of each month.
2.19 "Year of Service" has the meaning set forth in the Qualified Plan,
except that, for purposes of this Plan, the term shall be based on the
Participant's Years of Service with the Company or any Employer (as defined
herein).
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ARTICLE III.
PARTICIPATION
3.1 Eligibility.
An employee of the Company or a Related Affiliate who is in a select group
of management or highly compensated employees for purposes of Title I of ERISA,
other than any employee who is a participant in a nonqualified deferred
compensation plan sponsored by a Related Affiliate, shall be eligible to
participate in the Plan.
3.2 Participation.
An eligible employee under Section 3.1 shall become a Participant in the
Plan for a Plan Year for which such employee is designated by the Committee or
its delegate to receive an allocation credit for such Plan Year. Once an
eligible employee is designated by the Committee to receive any allocation
credit for such Plan Year, such employee shall continue to be eligible to
receive an allocation credit for following Plan Years unless he or she ceases to
be an eligible individual under Section 3.1 or the Committee otherwise provides.
Once amounts are credited to an employee's Account under Article IV, such
employee shall remain a Participant until his or her Account is distributed in
full in accordance with Article V. Notwithstanding anything in this Section 3.2
to the contrary, in order for the Participant's Account to be credited with an
allocation for a Plan Year, the Participant must satisfy the requirements of
Section 4.3 for such Plan Year.
Notwithstanding the preceding, no new Participants may be added to the Plan
after December 31, 2008.
ARTICLE IV.
PLAN ACCOUNTS AND CREDITS
4.1 Establishment of Plan Accounts.
The Committee or its delegate shall establish an Account on behalf of each
Participant. The amounts specified in Sections 4.4 and 4.5 shall be credited to
the Participant's Account.
4.2 Nature of Plan Accounts.
A Participant's Account shall be used solely as a measuring device to
determine the amount (if any) to be paid a Participant under this Plan. No
amounts shall actually be set aside with respect to any Account. All amounts at
any time attributable to an Account shall be, and remain, the sole property of
the Company. A Participant's rights hereunder are limited to the right to
receive Plan benefits as provided herein. An Account represents an unsecured
promise by the Company to pay the benefits provided by the Plan.
4.3 Allocation Requirements.
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To receive an allocation pursuant to Section 4.4 for a Plan Year, a
Participant must satisfy each of the following requirements:
(a) The Participant must have compensation, as defined in the Qualified
Plan, exceeding the annual compensation limit in effect for such Plan
Year under Code Section 401(a)(17);
(b) The Participant must be employed by the Company or an Employer on the
last day of such Plan Year; and
(c) The Participant must be credited with a Year of Service during such
Plan Year.
4.4 Allocation Credits.
With respect to each Participant who has satisfied the requirements of
Section 4.3 for a Plan Year, the Committee or its delegate shall credit for such
Plan Year to such Participant's Account, as of March 31 next following the end
of such Plan Year, the sum of the following amounts:
(a) a percentage of compensation, as defined for this purpose under the
Qualified Plan, determined in the sole discretion of the Committee to
generally approximate the percentage of employer contributions and
forfeitures allocated under the Qualified Plan for the Plan Year,
multiplied by the Participant's Compensation hereunder for the Plan
Year in excess of the limit specified in Section 4.3(a); and
(b) an additional percentage, if any, determined in the sole discretion of
the Committee, multiplied by the Participant's Compensation for such
Plan Year; and
Notwithstanding anything to the contrary, the allocation credit under this
Section 4.4 shall be at the discretion of the Committee. For a Plan Year, the
Committee may determine a zero percentage (0%) allocation credit under (a)
and/or (b) above. The formula of (a) above shall not be construed as an
obligation to exactly match the applicable percentage under the Qualified Plan.
4.5 Income, Gain or Loss Adjustment on Plan Accounts.
As of each Valuation Date, the Committee or its delegate shall adjust each
Account to reflect the income, gain or loss that would have been earned on the
Account had such amounts been invested since the preceding Valuation Date in one
or more investment vehicles as provided in Section 4.6.
4.6 Participant Election.
Effective January 1, 2008, a Participant's Account shall be credited with
interest at a rate selected from time to time by the Committee or its delegate.
ARTICLE V.
VESTING AND FORFEITURE
5.1 Vesting.
A Participant's right to amounts allocated to his or her Account pursuant
to Article IV shall become nonforfeitable based on such Participant's credited
Years of Service from the Effective Date of the Plan through Separation from
Service in accordance with the following schedule:
Years of Service Percentage Vested
---------------- -----------------
Less than 5 0%
5 or more 100%
Notwithstanding the above, a Participant shall become fully vested in his
or her Account upon his or her Retirement, death, Disability, or upon a Change
of Control.
5.2 Application of Forfeitures.
Any amounts forfeited under this Article V shall remain the sole property
of the Company and shall not be credited to the Accounts of other Participants
as a forfeiture reallocation.
ARTICLE VI.
PLAN BENEFITS
6.1 No In-Service Distributions.
Except as provided in Section 6.6, benefits hereunder shall not be payable
to a Participant prior to the Participant's Separation from Service.
6.2 Benefits Upon Separation from Service (Other Than Retirement or
Death).
Upon a Participant's Separation from Service (for any reason other than
Retirement or death), the vested portion of the Participant's Account shall be
distributed to the Participant in a lump sum cash payment on the Valuation Date
coinciding with or immediately following such Separation from Service, or within
ninety (90) days thereafter; provided, however, that in the event the
Participant is a Specified Employee as of such Separation from Service, the
vested portion of the Participant's Account shall be distributed to the
Participant in a lump sum cash payment on the first Valuation Date coinciding
with or immediately following the six (6)-month
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anniversary of such Separation from Service, or within ninety (90) days
thereafter. The amount to be distributed to a Participant pursuant to this
paragraph shall be the value of the vested portion of the Participant's Account
as of the Valuation Date coinciding with or immediately preceding the date of
the distribution.
6.3 Benefits Upon Retirement.
Upon a Participant's Retirement, the Participant's Account shall be
distributed to the Participant in a lump sum cash payment or in substantially
equal annual cash installments as elected by the Participant in accordance with
Section 6.5.
(a) If lump sum distribution is elected by the Participant or if no
installment election is given effect under Section 6.5, the
Participant's Account shall be distributed to the Participant in a
lump sum cash payment on the Valuation Date coinciding with or
immediately following such Retirement, or within ninety (90) days
thereafter; provided, however, that in the event the Participant is a
Specified Employee as of such Retirement, the Participant's Account
shall be distributed to the Participant in a lump sum cash payment on
the first Valuation Date coinciding with or immediately following the
six (6)-month anniversary of such Retirement, or within ninety (90)
days thereafter. The amount to be distributed to a Participant
pursuant to this paragraph shall be the value of the Participant's
Account as of the Valuation Date coinciding with or immediately
preceding the date of the distribution.
(b) If an installment election is given effect under Section 6.5, the
first annual installment shall be made during April of the Plan Year
following the Plan Year in which the Participant's Separation from
Service occurs or, if the Participant is a Specified Employee, during
the later of such April or the first calendar month that begins at
least six (6) months following the Participant's Separation from
Service, and subsequent installments shall be made during each
succeeding January during the installment period. The amount of the
first installment payment shall equal the value of the Participant's
Account as of the Valuation Date coinciding with or immediately
preceding the date of distribution, divided by the total number of
annual installment payments to be made. The amount of each succeeding
installment payment shall equal the value of the Participant's Account
as of December 31 immediately preceding such payment, divided by the
total number of annual installment payments remaining to be made
(including the installment being calculated).
6.4 Benefits Upon Death.
Notwithstanding anything herein to the contrary, if the Participant dies
prior to full distribution of his or her Account under Section 6.2 or 6.3 above,
the Participant's remaining Account shall be paid to the Participant's
Beneficiary in a lump sum cash payment on the Valuation Date coinciding with or
immediately following the Participant's death, or within ninety (90) days
thereafter. The amount to be distributed to a Beneficiary pursuant to this
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Section 6.4 shall be the value of the Participant's Account as of the Valuation
Date coinciding with or immediately preceding the distribution.
6.5 Form Election.
(a) If the Participant's Separation from Service is due to Retirement,
distribution may be made under Section 6.3 in substantially equal cash
installments over a fixed period not to exceed ten (10) years or in a
lump sum payment, as elected by the Participant. A distribution
election, once given effect under this Section 6.5, shall apply to the
Participant's entire Account under the Plan (other than his or her
Grandfathered Account). For purposes of this Section 6.5 and Code
Section 409A, the entitlement to annual installment payments is
treated as the entitlement to a single payment.
(b) The form of payment election of any individual who is an active
Participant as of December 31, 2008 shall be the last affirmative
election made by such active Participant on or before December 31,
2008; provided, however, that in no event may any such election made
in 2008 defer any amount otherwise payable during 2008 to 2009 or any
later year or accelerate any amount otherwise payable during 2009 or
any later year into 2008. If any such active Participant does not make
an affirmative election on or before December 31, 2008, he or she
shall be deemed to have elected payment in a lump sum.
(c) A Participant may change his or her form of payment election (or
deemed payment election) at any time by making a new election
(referred to in this subsection as a "subsequent election") on a form
approved by, and filed with, the Committee or its delegate; provided,
however, that such subsequent election shall be subject to the
following restrictions:
(1) A subsequent election made after December 31, 2008 may not take
effect until at least twelve (12) months after the date on which
such subsequent election is made; and
(2) Payment or initial payment of the Participant's benefit (or any
part thereof) pursuant to a subsequent election made after
December 31, 2008 may not be made earlier than five (5) years
from the date such payment would have been made absent the
subsequent election, unless the distribution is made on account
of the Participant's death.
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If a Participant's form of payment election is subject to this Section
6.5(c) and does not satisfy the requirements set forth herein, it
shall not be recognized or given effect by the Committee or its
delegate. In that event, distribution shall be made in accordance with
the Participant's most recent election which does satisfy the
requirements of this Section 6.5(c) or as otherwise provided in the
Plan.
6.6 Distribution Upon Change in Control.
Upon a Change in Control, the vested portion of the Participant's Account
shall be distributed to the Participant in a lump sum cash payment on the
Valuation Date coinciding with or immediately following such Change in Control,
or within ninety (90) days thereafter. The amount to be distributed to a
Participant pursuant to this paragraph shall be the value of the vested portion
of the Participant's Account as of the Valuation Date coinciding with or
immediately preceding the date of the distribution.
ARTICLE VII.
ADMINISTRATION
7.1 Administration.
The Committee is responsible for the administration of the Plan. In such
capacity, the Committee is granted the following rights and duties:
(a) The Committee shall have the exclusive duty, authority and discretion
to interpret and construe the provisions of the Plan, to determine
eligibility for and the amount (including the vested percentage) of
any benefit payable under the Plan, and to decide any dispute which
may arise regarding the rights of Plan Participants (or their
Beneficiaries) under this Plan;
(b) The Committee shall have the sole and complete authority to adopt,
alter, and repeal such administrative rules, regulations, and
practices governing the operation of the Plan as it shall from time to
time deem advisable;
(c) The Committee may appoint a person or persons to assist the Committee
in the day-to-day administration of the Plan;
(d) The decision of the Committee in matters pertaining to this Plan shall
be final, binding, and conclusive upon the Company and any Employer;
and the Plan Participant, such Participant's Beneficiary, and upon any
person affected by such decision, subject to the claims procedure set
forth in Article VIII; and
(e) In any matter relating solely to a Committee member's individual
rights or benefits under this Plan, such Committee member shall not
participate in any Committee proceeding pertaining to, or vote on,
such matter.
7.2 Allocation and Delegation of Duties.
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(a) The Committee shall have the authority to allocate, from time to time,
by instrument in writing filed in its records, all or any part of its
respective responsibilities under the Plan to one or more of its
members as may be deemed advisable, and in the same manner to revoke
such allocation of responsibilities. In the exercise of such allocated
responsibilities, any action of the member to whom responsibilities
are allocated shall have the same force and effect for all purposes
hereunder as if such action had been taken by the Committee. The
Committee shall not be liable for any acts or omissions of such
member. The member to whom responsibilities have been allocated shall
periodically report to the Committee concerning the discharge of the
allocated responsibilities.
(b) The Committee shall have the authority to delegate, from time to time,
by written instrument filed in its records, all or any part of its
responsibilities under the Plan to such person or persons as the
Committee may deem advisable (and may authorize such person to
delegate such responsibilities to such other person or persons as the
Committee shall authorize) and in the same manner to revoke any such
delegation of responsibility. Any action of the delegate in the
exercise of such delegated responsibilities shall have the same force
and effect for all purposes hereunder as if such action had been taken
by the Committee. The Committee shall not be liable for any acts or
omissions of any such delegate. The delegate shall periodically report
to the Committee concerning the discharge of the delegated
responsibilities.
ARTICLE VIII.
CLAIMS AND APPEALS PROCEDURES
8.1 General.
A Participant or Beneficiary ("claimant") who believes he or she is
entitled to Plan benefits which have not been paid may file a written claim for
benefits with the Committee within one (1) year of the Participant's Separation
from Service. If any such claim is not filed within one (1) year of the
Participant's Separation from Service, neither the Plan nor the Company or any
Employer shall have any obligation to pay the disputed benefit and the claimant
shall have no further rights under the Plan. If a claim for a disputed Plan
benefit is wholly or partially denied, notice of the decision will be furnished
to the claimant by the Committee or its delegate within a reasonable period of
time, not to exceed sixty (60) days (or forty-five (45) days in the case of a
Disability determination), after receipt of the claim by the Committee or its
delegate. (In the event of a Disability determination, the Committee or its
delegate may extend this period for up to an additional thirty (30) days due to
matters beyond the Committee's control, provided the claimant is notified of the
extension before the end of the initial forty-five (45)-day period and of the
date by which the Committee or its delegate expects to render a decision. If the
extension is required to allow the claimant to provide additional information,
the claimant must be given at least forty-five (45) days to provide such
information and the period from the date the claimant is notified of such
required additional information through the date the claimant responds is not
counted as part of the Committee's determination period.) Any claimant who is
denied a claim for benefits will be furnished written notice setting forth:
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(a) the specific reason or reasons for the denial;
(b) specific reference to the pertinent Plan provision upon which the
denial is based;
(c) a description of any additional material or information necessary for
the claimant to perfect the claim; and
(d) an explanation of the Plan's appeals procedure.
8.2 Appeals Procedure.
To appeal a denial of a claim, a claimant or the claimant's duly authorized
representative:
(a) may request a review by written application to the Committee not later
than sixty (60) days (or 180 days in the event of a Disability claim)
after receipt by the claimant of the written notification of denial of
a claim;
(b) may review pertinent documents; and
(c) may submit issues and comments in writing.
A decision on review of a denied claim will be made by the Committee or its
delegate not later than sixty (60) days (or forty-five (45) days in the event of
a Disability determination) after receipt of a request for review, unless
special circumstances require an extension of time for processing, in which case
a decision will be rendered within a reasonable period of time, but not later
than one hundred twenty (120) days (or ninety (90) days in the event of a
Disability determination) after receipt of a request for review. The decision on
review will be in writing and shall include the specific reasons for the denial
and the specific references to the pertinent Plan provisions on which the
decision is based.
ARTICLE IX.
MISCELLANEOUS PROVISIONS
9.1 Amendment, Suspension or Termination of Plan.
The Company, by action of the Committee, reserves the right to amend,
suspend or terminate the Plan in any manner it deems advisable; provided,
however, that in no event shall any such amendment, suspension or termination
accelerate the payment of any benefit, except as provided below or as otherwise
permitted by law. Notwithstanding the preceding sentence, the Plan may not be
amended, suspended or terminated to cause a Participant to forfeit the
Participant's then-existing vested Account.
9.2 Non-Alienability.
The rights of a Plan Participant to the payment of benefits as provided in
the Plan, may not be assigned, transferred, pledged or encumbered or be subject
in any manner to alienation or anticipation. No Plan Participant may borrow
against the Participant's interest in the Plan. No interest or amounts payable
under the Plan may be subject in any manner to anticipation,
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alienation, sale, transfer, assignment, pledge, encumbrance, charge,
garnishment, execution or levy of any kind, whether voluntary or involuntary,
including but not limited to, any liability which is for alimony or other
payments for the support of a spouse or former spouse, or for any other relative
of any Participant.
9.3 No Employment Rights.
Nothing contained herein shall be construed as conferring upon a Plan
Participant the right to continue in the employ of the Company or any Related
Affiliate in the Participant's current position or in any other capacity.
9.4 Withholding and Employment Taxes.
To the extent required by law, the Company or a Related Affiliate shall
withhold from a Plan Participant's current compensation such taxes as are
required to be withheld for employment taxes. To the extent required by law, the
Company or a Related Affiliate shall withhold from a Participant's Plan
distributions such taxes as are required to be withheld for federal, state or
local government purposes.
9.5 Income and Excise Taxes.
Each Plan Participant (or the Participant's Beneficiaries) is solely
responsible for the payment of all federal, state, and local income and excise
taxes resulting from the Participant's participation in this Plan.
9.6 Successors and Assigns.
The provisions of this Plan are binding upon and inure to the benefit of
the Company, its successors and assigns, and each Plan Participant, such
Participant's Beneficiaries, heirs, and legal representatives.
9.7 Governing Law.
This Plan shall be subject to and construed in accordance with the laws of
the State of Missouri to the extent not preempted by federal law.
IN WITNESS WHEREOF, this Supplemental Executive Retirement Plan has been
executed as of the 15th day of September, 2008.
DST SYSTEMS, INC.
By: /s/ Kenneth V. Hager
---------------------------------------
Kenneth V. Hager
Vice President, Chief Financial Officer
and Treasurer
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APPENDIX A
==========================================================================
Amounts in the Plan as of January 1, 2009 which were deferred and
vested on or before December 31, 2004 are subject to the terms of the
Plan as it existed as of such date, which Plan is set forth in this
Appendix A. The terms of this Appendix A shall not be materially
modified (as that phrase is defined by Code Section 409A and guidance
thereunder), either formally or informally, unless such modification
or the preceding Plan specifically provides that it is intended to be
a material modification within the meaning of Code Section 409A and
guidance thereunder.
To the extent this Appendix A references a definition contained in a
Qualified Plan, such definition shall mean the definition under the
Qualified Plan as in effective on October 3, 2004, without regard to
any subsequent amendments that may have been made to such Qualified
Plan.
==========================================================================
DST SYSTEMS, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(Amended and Restated as of May 14, 2002)
ARTICLE I.
GENERAL
1.1 Purpose.
The purpose of this Supplemental Executive Retirement Plan ("Plan") is to
supplement the DST Systems, Inc. 401(k) Profit Sharing Plan and its predecessor
plans (collectively called the "401(k) Plan"), and The Employee Stock Ownership
Plan and Trust Agreement of DST Systems, Inc. (the "ESOP"). The 401(k) Plan and
the ESOP are collectively referred to herein as the "Qualified Plan." The Plan
is intended to generally replace lost benefits under the Qualified Plan due to
limitations applicable to plans of that nature under the Internal Revenue Code
of 1986, as amended (the "Code").
1.2 Nature of Plan.
The Plan is, and shall be administered as, an employee pension plan
benefiting a select group of management or highly compensated employees under
the provisions of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"). The Plan shall be "unfunded" for tax purposes and for
purposes of Title I of ERISA. Any and all payments under the Plan shall be made
solely from the general assets of DST Systems, Inc. ("DST"). A Participant's
interests under the Plan do not represent or create a claim against specific
assets of DST or any Affiliated Company. Nothing herein shall be deemed to
create a trust of any kind or create any fiduciary relationship between DST or
its Board of Directors, any Affiliated Company, the
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Committee or its delegates, and a Participant, a Beneficiary or any other person
or entity claiming for or through a Participant or Beneficiary. To the extent
any person acquires a right to receive payments from DST under this Plan, such
right is no greater than the right of any other unsecured general creditor of
DST.
ARTICLE II.
DEFINITIONS
Except as expressly provided herein, capitalized terms used in the Plan
shall have the same meanings as set forth in the 401(k) Plan, and the 401(k)
Plan's definitions and operative terms are incorporated herein by reference. In
the event of a conflict between the meaning of the terms used in the Plan and
the meaning of terms used in the 401(k) Plan, the meaning as set forth in the
Plan shall prevail.
2.1 "Account" means the bookkeeping account established by the Committee or
its delegate to reflect allocations made on behalf of a Participant and credited
earnings, gains or losses thereon.
2.2 "Beneficiary" means the primary and contingent beneficiaries designated
by a Participant by written instrument delivered to the Committee or its
designee to receive any benefits payable hereunder following the Participant's
death. A Participant may designate the proportions in which such beneficiaries
are to receive such payments and may change such designation from time to time.
The last written designation filed with the Committee or its designee prior to
the Participant's death shall control. In the event no beneficiary is
designated, or if the designated beneficiary predeceases the Participant,
"Beneficiary" shall mean first the Participant's surviving spouse, then the
Participant's known natural or adopted surviving children in equal amounts or,
if there are no such surviving spouse or children, the Participant's estate.
2.3 "Committee" means the Compensation Committee of the DST Board of
Directors.
2.4 "Compensation" means the Participant's base salary actually paid during
a specified Plan Year, plus the value of accrued cash bonuses for such year.
Solely for the 1999 Plan Year, "Compensation" shall also include the dollar
value of restricted stock granted to such Participant for 1999 under the DST
Systems, Inc. Officers Incentive Plan.
2.5 "Effective Date" means January l, 1999, the first day of the first Plan
Year for which this Plan is effective.
2.6 "Key Employee" means an employee of DST or an Affiliated Company who is
in a select group of management or highly compensated employees.
2.7 "Participant" means any individual who is designated as a participant
by the Committee pursuant to Section 3.2 and whose benefits under the Plan have
not been fully distributed.
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2.8 "Retirement" means a Termination of Employment by a Participant after
attaining Normal Retirement Age, or such other Termination of Employment as
determined by the Committee or its delegate from time to time.
2.9 "Valuation Date" means each March 31, June 30, September 30 and
December 31, or such other dates as determined by the Committee in its sole
discretion.
ARTICLE III.
PARTICIPATION
3.1 Eligibility.
The following Key Employees shall be eligible to participate in the Plan:
(a) For the 1999 Plan Year, Key Employees of DST and any Affiliated
Company (other than USCS International, Inc. and its subsidiaries);
and
(b) For subsequent Plan Years, Key Employees of DST and its Affiliated
Companies, including Key Employees of USCS International, Inc. and its
subsidiaries, other than any Key Employee who is a participant in a
nonqualified deferred compensation plan sponsored by such Affiliated
Company.
3.2 Participation.
An eligible individual under Section 3.1 shall become a Participant in the
Plan for a Plan Year for which such individual is designated by the Committee or
its delegate to receive an allocation credit for such Plan Year. Once an
eligible individual is designated by the Committee to receive any allocation
credit for such Plan Year, such individual shall continue to receive an
allocation credit for following Plan Years unless he or she ceases to be a Key
Employee or the Committee otherwise provides. Once amounts are credited to an
individual's Account under Article IV, such individual shall remain a
Participant until his or her Account is distributed in full in accordance with
Article V. Notwithstanding anything in this Section 3.2 to the contrary, in
order for the Participant's Account to be credited with an allocation for a Plan
Year, the Participant must satisfy the requirements of Section 4.3 for such Plan
Year.
ARTICLE IV.
PLAN ACCOUNTS AND CREDITS
4.1 Establishment of Plan Accounts.
The Committee or its delegate shall establish an Account on behalf of each
Participant. The amounts specified in Sections 4.4 and 4.5 shall be credited to
the Participant's Account.
4.2 Nature of Plan Accounts.
A Participant's Account shall be used solely as a measuring device to
determine the amount (if any) to be paid a Participant under this Plan. No
amounts shall actually be set aside with respect to any Account. All amounts at
any time attributable to an Account shall be, and
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remain, the sole property of DST. A Participant's rights hereunder are limited
to the right to receive Plan benefits as provided herein. An Account represents
an unsecured promise by DST to pay the benefits provided by the Plan.
4.3 Allocation Requirements.
To receive an allocation pursuant to Section 4.4 for a Plan Year, a
Participant must satisfy each of the following requirements:
(a) The Participant must have Compensation of at least the threshold
amount. The threshold amount for 1999 is $170,000. For all subsequent
Plan Years, the threshold amount is equal to the annual compensation
limit in effect for the Plan Year under Code Section 401(a)(17).
Notwithstanding Section 2.4 to the contrary, in determining if the
threshold amount is satisfied, the dollar value of the equity portion
of awards granted to a Participant for any Plan Year under the DST
Systems, Inc. Officers Incentive Plan shall always be disregarded in
determining Compensation for purposes of this Section 4.3(a);
(b) The Participant must be employed by DST or an Affiliated Company on
the last day of such Plan Year;
(c) The Participant must be credited with a Year of Service during such
Plan Year; and
(d) The Participant must be designated by the Committee, as provided in
Section 3.2, as eligible to participate in any allocation credit for
such year.
4.4 Allocation Credits.
With respect to each Participant who has satisfied the requirements of
Section 4.3 for a Plan Year, the Committee or its delegate shall credit for such
Plan Year to such Participant's Account, as of March 31 next following the end
of such Plan Year, the sum of the following amounts:
(a) a percentage of Compensation, as defined for this purpose under the
Qualified Plan, determined in the sole discretion of the Committee to
generally approximate the percentage of employer contributions and
forfeitures allocated under the Qualified Plan for the Plan Year,
multiplied by the Participant's Compensation hereunder for the Plan
Year in excess of the limit specified in Section 4.3(a); and
(b) an additional percentage, if any, determined in the sole discretion of
the Committee, multiplied by the Participant's Compensation for such
Plan Year.
Notwithstanding anything to the contrary, the allocation credit under this
Section 4.4 shall be at the discretion of the Committee. For a Plan Year, the
Committee may determine a zero percentage (0%) allocation credit under (a)
and/or (b) above. The formula of (a) above shall not be construed as an
obligation to exactly match the applicable percentage under the Qualified Plan.
16
4.5 Income, Gain or Loss Adjustment on Plan Accounts.
As of each Valuation Date, the Committee or its delegate shall also adjust
each Account to reflect the income, gain or loss that would have been earned on
the Account had such amounts been invested since the preceding Valuation Date in
one or more investment vehicles as selected by the Committee or its delegate
prior to the applicable valuation period. The investment vehicle(s) may be
indexed or other mutual funds, but in no event shall the investment vehicle be
common stock of DST.
4.6 Participant Election.
(a) A Participant may elect on a written election form to have his or her
account adjusted on the basis that amounts in the Participant's
account had been invested since the effective date of the
Participant's latest dated written election in any of the investment
vehicles designated by the Committee or its delegate, in such
proportion as the Participant has designated on the written election
form.
(b) A Participant may change such election annually, to be effective March
31, by written notice to DST's Corporate Secretary no later than ten
days prior to March 31, by written notice to DST's Corporate Secretary
no later than ten days prior to March 31.
(c) Any election made pursuant to this Section 4.6 shall remain in effect
until changed by the Participant as provided in Section 4.6(b). If the
Participant makes no election pursuant to this Section 4.6, makes an
election with respect to only a part of the Participant's Account, or
terminates an election, then all portions of the Account not subject
to an election pursuant to this Section 4.6 shall be credited with
interest based on at the announced rate of return on an investment or
investments selected from time to time by this Committee or its
delegate. Subsequent to the Participant's Termination of Employment,
the Participant may change an election pursuant to this Section 4.6
with respect to amounts that are not yet distributed pursuant to
Section 5.3.
[NOTE: For clarification purposes only, as of January 1, 2008, accounts
under this Appendix A are adjusted for earnings equal to one percent over
the yield on a 10-year Treasury Note as of March 31 of each plan year. The
Company's President or Chief Financial Officer may change such hypothetical
earnings measure from time to time; provided, however, that no such change
from and after October 3, 2004 constituted or will constitute a material
modification, as that term is defined in Code Section 409A.]
17
ARTICLE V.
PLAN BENEFITS
5.1 No In-Service Distributions.
Benefits hereunder shall not be payable to a Participant prior to the
Participant's Termination of Employment.
5.2 Benefits Upon Termination of Employment (Other Than Retirement).
Upon a Participant's Termination of Employment (for any reason other than
Retirement), the vested portion of the Participant's Plan benefits shall be
distributed to the Participant in a lump sum cash payment as soon as
administratively practicable after the Valuation Date coinciding with or
immediately following such Termination of Employment. The amount to be
distributed to a Participant pursuant to this Section 5.2 shall be the value of
the vested portion of the Participant's Account as of the Valuation Date
coinciding with or immediately following the Participant's Termination of
Employment.
5.3 Benefits Upon Retirement.
Upon a Participant's Retirement, the Participant's Plan benefits shall be
distributed to the Participant in a lump sum cash payment or in substantially
equal annual cash installments over a fixed period not to exceed such period
established by the Committee or its delegate, as elected by the Participant in
accordance with Section 5.5.
(a) If lump sum distribution is elected by the Participant or if no
installment election is given effect under Section 5.5, the amount to
be distributed shall be the value of the Participant's Account as of
the Valuation Date immediately following the Participant's Retirement
and such distribution shall be made as soon as administratively
practicable after the Valuation Date coinciding with or immediately
following such Retirement.
(b) If installments are elected by the Participant, the first annual
installment shall be made as soon as administratively practicable
following December 31 of the Plan Year in which the Participant's
Retirement occurs, and as soon as administratively practicable
following each succeeding December 31 until the Participant's Account
is distributed in full. The amount of the first installment payment
shall equal the value of the Participant's Account as of the December
31 of the Plan Year in which the Participant's Retirement occurs,
divided by the total number of annual installment payments to be made.
The amount of each succeeding installment payment shall equal the
value of the vested portion of the Participant's Account as of the
December 31 immediately preceding such payment, divided by the total
number of annual installment payments remaining to be made (including
the installment being calculated).
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5.4 Benefits Upon Death.
If the Participant dies prior to full payment of his or her Plan benefits
under Section 5.2 or 5.3 above, the Participant's Plan benefits shall be paid to
the Participant's Beneficiary in a lump sum cash payment as soon as
administratively practicable after the Valuation Date coinciding with or
immediately following the Participant's death.
5.5 Form Election.
If a Participant's Termination of Employment is due to Retirement,
distribution may be made under Section 5.3 in substantially equal cash
installments over a fixed period not to exceed ten (10) years. A Participant may
file a distribution election with the Committee on forms prescribed by the
Committee. A distribution election, once given effect under this Section 5.5,
will apply to the Participant's total benefits. To be given effect under this
Section 5.5, any distribution election for benefits payable under Section 5.3
must have been filed with the Committee at least six (6) months before the
Participant's Retirement. If a Participant's distribution election has not been
on file with the Committee for the full six (6)-month period, it will not be
recognized or given effect by the Committee. In that event, distribution shall
be made in accordance with the Participant's most recent distribution election
which was filed with the Committee at least six (6) months before the
Participant's Retirement.
ARTICLE VI.
VESTING AND FORFEITURE
6.1 Vesting.
A Participant's right to amounts allocated to his Account pursuant to
Article IV shall become nonforfeitable based on such Participant's credited
Years of Service from the Effective Date of the Plan in accordance with the
following schedule:
Years of Service Percentage Vested
---------------- -----------------
Less than 5 0%
5 or more 100%
Notwithstanding the above, a Participant shall become fully vested in his
or her Account upon his or her Retirement, death, Disability, or upon a "Change
of Control" of DST, as the phrase "Change of Control" is defined under the DST
Systems, Inc. 1995 Stock Option and Performance Award Plan, as may be amended or
restated from time to time.
6.1 Application of Forfeitures.
Any amounts forfeited under this Article VI shall remain the sole property
of DST and shall not be credited to the Accounts of other Participants as a
forfeiture reallocation.
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ARTICLE VII.
ADMINISTRATION
7.1 Administration.
The Committee is responsible for the administration of the Plan. In such
capacity, the Committee is granted the following rights and duties:
(a) The Committee shall have the exclusive duty, authority and discretion
to interpret and construe the provisions of the Plan, to determine
eligibility for and the amount of any benefit payable under the Plan,
and to decide any dispute which may arise regarding the rights of Plan
Participants (or their Beneficiaries) under this Plan;
(b) The Committee shall have the sole and complete authority to adopt,
alter, and repeal such administrative rules, regulations, and
practices governing the operation of the Plan as it shall from time to
time deem advisable;
(c) The Committee may appoint a person or persons to assist the Committee
in the day-to-day administration of the Plan;
(d) The decision of the Committee in matters pertaining to this Plan shall
be final, binding, and conclusive upon DST and any Affiliated Company;
and the Plan Participant, such Participant's Beneficiary, and upon any
person affected by such decision, subject to the claims procedure set
forth in Article VIII; and
(e) In any matter relating solely to a Committee member's individual
rights or benefits under this Plan, such Committee member shall not
participate in any Committee proceeding pertaining to, or vote on,
such matter.
ARTICLE VIII.
CLAIMS AND APPEALS PROCEDURES
8.1 General.
Any claim for benefits under the Plan must be filed by the Plan Participant
or Beneficiary ("claimant") in writing with the Committee or its delegate. If a
claim for a Plan benefit is wholly or partially denied, notice of the decision
will be furnished to the claimant by the Committee or its delegate within a
reasonable period of time, not to exceed sixty (60) days, after receipt of the
claim by the Committee or its delegate. Any claimant who is denied a claim for
benefits will be furnished written notice setting forth:
(a) the specific reason or reasons for the denial;
(b) specific reference to the pertinent Plan provision upon which the
denial is based;
(c) a description of any additional material or information necessary for
the claimant to perfect the claim; and
20
(d) an explanation of the Plan's appeals procedure.
8.2 Appeals Procedure.
To appeal a denial of a claim, a claimant or the claimant's duly authorized
representative:
(a) may request a review by written application to the Committee not later
than sixty (60) days after receipt by the claimant of the written
notification of denial of a claim;
(b) may review pertinent documents; and
(c) may submit issues and comments in writing.
A decision on review of a denied claim will be made by the Committee not
later than sixty (60) days after receipt of a request for review, unless special
circumstances require an extension of time for processing, in which case a
decision will be rendered within a reasonable period of time, but not later than
one hundred twenty (120) days after receipt of a request for review. The
decision on review will be in writing and shall include the specific reasons for
the denial and the specific references to the pertinent Plan provisions on which
the decision is based.
ARTICLE IX.
MISCELLANEOUS PROVISIONS
9.1 Amendment, Suspension or Termination of Plan.
DST, by action of the Committee, reserves the right to amend, suspend or to
terminate the Plan in any manner that it deems advisable. Notwithstanding the
preceding sentence, the Plan may not be amended, suspended or terminated to
cause a Participant to forfeit the Participant's then-existing vested Account.
9.2 Non-Alienability.
The rights of a Plan Participant to the payment of benefits as provided in
the Plan, may not be assigned, transferred, pledged or encumbered or be subject
in any manner to alienation or anticipation. No Plan Participant may borrow
against the Participant's interest in the Plan. No interest or amounts payable
under the Plan may be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, charge, garnishment, execution or
levy of any kind, whether voluntary or involuntary, including but not limited
to, any liability which is for alimony or other payments for the support of a
spouse or former spouse, or for any other relative of any Participant.
9.3 No Employment Rights.
Nothing contained herein shall be construed as conferring upon a Plan
Participant the right to continue in the employ of DST or any Affiliated Company
in the Participant's current position or in any other capacity.
21
9.4 Withholding and Employment Taxes.
DST or an Affiliated Company may withhold from a Plan Participant's current
compensation or from Plan distributions, as the case may be, such taxes as are
required to be withheld for federal, state or local government purposes.
9.5 Income and Excise Taxes.
Each Plan Participant (or the Participant's Beneficiaries) is solely
responsible for the payment of all federal, state, and local income and excise
taxes resulting from the Participant's participation in this Plan.
9.6 Successors and Assigns.
The provisions of this Plan are binding upon and inure to the benefit of
DST, its successors and assigns, and each Plan Participant, such Participant's
Beneficiaries, heirs, and legal representatives.
9.7 Forfeiture of Unclaimed Amounts.
Unclaimed amounts shall consist of the amounts credited to the Account of a
Participant that cannot be distributed because of the Committee's inability,
after a reasonable search, to locate a Participant or his Beneficiary, as
applicable, within a period of two (2) years after the date on which the payment
of benefits became due. Unclaimed amounts shall be forfeited at the end of such
two-year period. These forfeitures will reduce the obligations of DST under the
Plan. After an unclaimed amount has been forfeited, the Participant or
Beneficiary, as applicable, shall have no further right to his Account.
9.8 Governing Law.
This Plan shall be subject to and construed in accordance with the laws of
the State of Missouri to the extent not preempted by federal law.