Exhibit 10.10
KANSAS CITY SOUTHERN
DIRECTORS' DEFERRED FEE PLAN
ADOPTED AUGUST 20, 1982
AS AMENDED AND RESTATED EFFECTIVE JUNE 1, 2002
Section 1. Establishment
1.1 Establishment. Kansas City Southern (formerly Kansas City Southern
Industries, Inc. hereinafter called "Company") established, pursuant to
resolution adopted by the Board of Directors of the Company, at a meeting held
on August 20, 1982, a deferred fee plan for members of its Board of Directors,
which was known as "KANSAS CITY SOUTHERN INDUSTRIES, INC. DIRECTORS' DEFERRED
FEE PLAN" (the "Plan").
1.2 Transition and Name Change. The Plan originally became effective on
January 1, 1983. This amended and restated Plan is hereby made effective June 1,
2002. Also effective June 1, 2002, the name of the Plan is changed to the
"Kansas City Southern Directors' Deferred Fee Plan." Section 2. Definitions
2.1 Definitions. Whenever used in the Plan the following terms shall have
the meaning set forth below:
a. The term "Board" means the Board of Directors of the Company.
b. The term "Director" means a member of the Board of Directors of the
Company.
c. The term "Participant" means a Director or former Director who has an
account under the Plan.
d. The term "Fees" means direct monetary remuneration from the Company due
to the Directors for the discharge of their duties as directors.
2.2 Gender and Number. Except when otherwise indicated by the context, any
masculine terminology used herein shall also include the feminine gender, and
the definition of any term herein in the singular shall also include the plural.
Section 3. Eligibility for Participation
A Director shall be eligible for participation in the Plan and may elect to
defer Fees to be earned as a Director of the Company in accordance with the
provisions of this Plan for a period consisting of any calendar year or years
during which he is a member of the Board. In the case of a newly elected
Director who was not a Director on the preceding December 31st, he shall become
eligible for participation for a period consisting of the balance of the
calendar year following such election, and for succeeding calendar years.
Section 4. Election to Defer Fees
4.1 Procedure for Election to Defer Fees. On or before December 31st of any
calendar year, a Director may elect to become a Participant beginning the
following calendar year. Any person elected to fill a vacancy on the Board of a
newly created Directorship who was not a Director on the preceding December 31st
may elect within 10 days of becoming a Director to become a Participant for the
balance of the calendar year during which he was elected to the Board. An
election to participate in the Plan shall be effected by the Director submitting
a letter so stating to the administrator of the Plan.
4.2 Effect of Election or Failure to Elect to Participate. Failure to
effect a timely election in accordance with the foregoing provisions shall
preclude a Director's participation during the calendar year or portion of the
calendar year in question, but shall not preclude the Director from becoming
eligible for participation in any subsequent calendar year.
An election to commence participation, made in accordance with the
foregoing provision, shall be irrevocable for the immediately ensuing calendar
year, or the balance of the current year in the case of a newly elected
Director. Such election shall continue in effect with respect to each calendar
year thereafter until modified in accordance with subsection 4.4.
4.3 Amount Deferred. A Director may defer any amount up to 100% of the Fees
for the calendar year. If less than 100% of the Fees are deferred, then the
amount deferred will be prorated over the payment periods anticipated to be
served by the Director during the calendar year, or until the directorship is
terminated.
4.4 Modification of Election. On or before December 31st of each year a
Participant may elect, within the limits of subsection 4.3, to increase or
decrease the amount of his Fees to be deferred during the ensuing calendar
years, and this election shall include the right to terminate the deferral of
Fees earned in such ensuing calendar years.
Section 5. Crediting of Fees
5.1 Participants' Accounts. The Company shall establish a bookkeeping
account ("account") for each Participant to be credited as of the date the Fee
is deferred.
5.2 Earnings on Accounts.
a. Prior to June 1, 2002. Earnings for time periods prior to June 1, 2002,
shall accrue on deferred Fees from the date the Fees are credited to the
Participant's account, and on the earnings on deferred Fees from the date the
earnings are credited to the account. The rate of earnings shall be determined
annually and shall be at a rate one percentage point less than the prime rate in
effect at Chemical Bank, a New York banking corporation, on the last day of the
calendar year (accrued interest shall be credited to the account at the end of
each year). PROVIDED, a Participant shall have the right to request in writing
directed to the plan administrator that the rate of earnings shall be determined
by reference to the gains and losses on the following hypothetical investments
as if an amount equal to the Participant's account had been invested as follows:
Prior to February 6, 1997
50 percent of the account in Janus Venture Fund and
50 percent of the account in Janus Twenty Fund
On and after February 6, 1997, but prior to June 1, 2002
33 1/3 percent of the account in Janus Venture Fund and
33 1/3 percent of the account in Janus Twenty Fund
33 1/3 percent of the account in Janus Worldwide Fund
PROVIDED, HOWEVER; the plan administrator shall not be obligated to follow such
Participant's request, and shall at its sole discretion be able to decide to
continue to determine earnings by reference to the aforementioned prime rate in
effect at Chemical Bank.
b. On and After June 1, 2002. Earnings on the amount credited to a
Participant's account as of May 31, 2002, and earnings on deferred Fees and
earnings credited to the Participant's account on and after June 1, 2002, will
be determined by the hypothetical "investment" of deferred Fees. The
"investment" will based on the Director's election among investment options
designated by the Company from time to time for the Plan. An Underlying
Investment Rate determined form time to time by the Board (currently the ten
year treasury bond rate plus one percent) is used to monthly credit with
interest, any part of a Director's account for which a mutual fund has not been
designated as the "investment". The Company has arranged for participants to
receive quarterly statements from the funds, and the Company sends participants
semi-annual statements.
c. A Director may change investment allocation percentages by giving at
least ten (10) days written notice to the Company prior to the beginning of a
calendar month. In the written change in election, the Director must indicate
whether the election is to apply (i) to all amounts credited to the Director's
account as of the effective date of the written change in election, and/or (ii)
to Fees deferred after the effective date of the written change in election.
Section 6. Distribution Upon Cessation as Director of the Company
Whenever a Participant ceases to be a Director of the Company, the Board
shall exercise its sole discretion in electing one of the following methods of
distributing the value of the Participant's account:
a. Installment Method. The value of the Participant's account as of the end
of the calendar year in which a Participant ceases to be a Director shall be
distributed to the Participant in annual installments over a ten-year period
beginning with the first day of the year immediately following the year in which
the Participant ceases to be a Director. The amount of the Participant's account
shall be reduced by the amount of each payment to the Participant as of the date
of each payment. Earnings shall be credited to the Participant's account
pursuant to subsection 5.2 (after taking into account reductions in the account
under the preceding sentence) until the Participant (or his beneficiary) has
received full payment of his account. The amount of the initial payment to the
Participant shall be a fraction of the value of the Participant's account as of
the end of the calendar year in which the Participant ceases to be a Director,
the numerator of which fraction is 1 and the denominator of which fraction is
10. Subject to the provisions of subsection 7.1, for each annual payment the
denominator of the fraction shall be reduced by 1 until the value of the
Participant's account has been fully paid at which time the Participant's
account shall be closed.
b. Single Payment Method. The value of the Participant's account shall be
distributed to the Participant in a lump sum within one year after the date upon
which the Participant ceases to be a Director. The earnings on the Participant's
account pursuant to subsection 5.2 shall be included in the calculation of the
value of the Participant's account for distribution purposes. Upon delivery of
the lump sum payment provided for above, the Participant's account shall be
closed.
7.1 Death of Director or Former Director. Each Participant may designate
one or more beneficiaries on a form provided by the plan administrator and
delivered to the plan administrator before his death. Any such beneficiary
thereafter may be changed without the consent of any prior beneficiary by
similar written designation delivered to the plan administrator before the
Participant's death. If no such beneficiary shall have been designated or if no
designated beneficiary shall survive the Participant's death, any part or all of
the balance of the Participant's account may be paid to the Participant's
estate. Any remaining installment payments due a Participant at the time of his
death may be paid at such time or times as directed by the Board in its sole
discretion to the Participant's beneficiary or beneficiaries, if the Participant
has designated one or more beneficiaries on the form described in this Section
7.1, or, if no beneficiary has been designated, or if no designated beneficiary
shall survive the Participant, to the Participant's estate.
7.2 Financial Hardship of a Participant Caused by a Medical Emergency or
Disability. Upon the determination by the Board that a Participant, or a member
of the Participant's immediate family, has suffered a medical emergency or
disability which has resulted in a financial hardship for the Participant, then
the Board may, at its sole discretion, direct that some or all of the
Participant's account be paid to the Participant; PROVIDED, that the amount paid
to the Participant shall not exceed the amount determined by the Board to be
necessary to relieve the financial hardship caused by the medical emergency or
disability. The Board may require the Participant to provide any expert medical
or financial information or opinions that the Board deems necessary to arrive at
a determination.
7.3 Loss of Principal Residence of a Participant. Upon the determination by
the Board that a Participant's principal residence, that being the personal
residence at which he spends a majority of his time, has been damaged or
destroyed by accident or natural causes, then the Board may, at its sole
discretion, direct that some or all of the Participant's account be paid to the
Participant; PROVIDED, that the amount paid to the Participant shall not exceed
the amount determined by the Board to be necessary to relieve the financial
hardship caused by the loss of the principal residence. The Board may require
the Participant to provide any expert opinion or financial information that the
Board deems necessary to arrive at a determination.
7.4 Financial Hardship of a Participant Caused By Other Unanticipated
Events. Upon the determination by the Board that a Participant has suffered or
will suffer a severe financial hardship because of unanticipated circumstances
caused by an event beyond the reasonable control of such Participant, the Board
may, at its sole discretion, direct that some or all of the Participant's
account be paid to the Participant; PROVIDED, that the amount paid to the
Participant shall not exceed the amount determined by the Board to be necessary
to relieve the financial hardship. The Board may require the Participant to
provide any expert opinion or financial information that the Board deems
necessary to arrive at an opinion.
7.5 Special Provisions. Payments made pursuant to these Sections 7.2
through 7.4 during a Section 6(a) ten-year distribution shall be deemed to have
been made from the last principal installment or installments to be made and the
earnings credited to such installment or installments.
For purposes of Sections 7.3 and 7.4 the Board shall not include the
Participant if the Participant is a Director.
Section 8. Transfers From Retirement Plan
8.1 Transferred Amounts. On May 2, 1996, this Plan shall accept a transfer
of accrued benefits from the Kansas City Southern Industries, Inc. Retirement
Plan for Directors (the "Retirement Plan") with respect to Directors continuing
as Directors after such date. For each Participant with an account balance in
the Retirement Plan to be transferred to this Plan, the Company shall establish
a bookkeeping account ("retirement plan account") separate from the accounts
established pursuant to Section 5.1 above. The amount in each Participant's
retirement plan account shall earn a return determined by reference to the gains
and losses on a hypothetical investment as if an amount equal to the
Participant's retirement plan account had been invested in Company common stock,
with a starting value for such common stock equal to the mean between the high
and low for such common stock as reported on the New York Stock Exchange for May
2, 1996. When the Participant ceases to be a Director due to retirement or for
any other reason, the balance in the Participant's retirement plan account as of
the Director's last day of service as a Director shall be paid to the Director
within 30 days. The Director, or his designated beneficiary or estate, as the
case may be, shall have the election to receive the retirement plan account
balance in either Company common stock, valued at the mean between the high and
low prices reported by the New York Stock Exchange for such stock on the
Participant's last day as a Director, or in cash.
8.2 Other Provisions. The provisions of this Plan other than Sections 3, 4,
5 and 6 shall be applicable to amounts transferred to this Plan in accordance
with Section 8.1.
Section 9. Dissolution. Liquidation. Merger. Consolidation and Sale of Assets
9.1 Dissolution or Liquidation of Company. Notwithstanding anything to the
contrary, upon the dissolution or liquidation of the Company, each Participant
who is a Director of the Company on the day preceding the date of the
dissolution or liquidation shall be deemed to have ceased to be a Director of
the Company on the date preceding such dissolution or liquidation. The accounts
of all Participants shall be valued and distributed in lump sums at the time of
such liquidation.
9.2 Merger, Consolidation, and Sale of Assets. Notwithstanding anything
herein to the contrary, in the event that the Company consolidates with, merges
into, or transfers all or substantially all of its assets to another corporation
(hereinafter referred to as "Successor Corporation"), such Successor Corporation
shall assume all obligations under this Plan. Upon such assumption, the Board of
Directors of the Successor Corporation shall be substituted for the Board in
this Plan.
Section 10. Rights of Participants
No Participant nor any Participant's estate or heirs shall have any
interest in any fund or in any specific asset or assets of the Company by reason
of any payments made under the Plan, or by reason of any account maintained for
the Participant under the Plan. The Company shall have merely a contractual
obligation to make payments when due hereunder and the Company shall not hold
any funds in reserve or trust to secure payments hereunder. No Participant nor
any Participant's estate or heirs may assign, pledge or in any way encumber his
interest under the Plan, or any part thereof.
Section 11. Administration and Amendment
11.1 Administration. The Board may designate an administrator of the Plan.
Absent designation of an administrator by the Board, the Secretary of the
Company shall administer the Plan. The Board may, from time to time, establish
rules for the administration of the Plan that are not inconsistent with the
provisions of the Plan.
11.2 Amendment. This Plan may be amended by a favorable vote of two-thirds
of the members of the Board who are not Participants in the Plan or, in the
event all Directors are Participants, by a favorable vote of a majority of the
stockholders present or represented and voting at an annual or special meeting
of the stockholders.
IN WITNESS WHEREOF, this restated Plan has been duly executed as of this
31st day of May, 2002. Kansas City Southern
By /s/ Michael R. Haverty
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Michael R. Haverty