THE EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST AGREEMENT
OF DST SYSTEMS, INC.
THE EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST AGREEMENT
OF DST SYSTEMS, INC.
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS...................................... 2
1.01 "Plan"........................................... 2
1.02 "DST"............................................ 2
1.03 "Employer"....................................... 2
1.04 "Trustee"........................................ 2
1.05 "Plan Administrator"............................. 2
1.06 "Advisory Committee"............................. 2
1.07 "Employee"....................................... 2
1.08 "Highly Compensated Employee..................... 3
1.09 "Participant".................................... 4
1.10 "Beneficiary".................................... 4
1.11 "Compensation"................................... 4
1.12 "Account"........................................ 6
1.13 "Accrued Benefit"................................ 6
1.14 "Nonforfeitable"................................. 6
1.15 "Plan Year"...................................... 6
1.16 "Effective Date"................................. 6
1.17 "Plan Entry Date"................................ 6
1.18 "Accounting Date"................................ 6
1.19 "Trust".......................................... 6
1.20 "Trust Fund"..................................... 6
1.21 "Nontransferable Annuity"........................ 6
1.22 "ERISA".......................................... 7
1.23 "Code"........................................... 7
1.24 "Service"........................................ 7
1.25 "Hour of Service"................................ 7
1.26 "Disability"..................................... 8
1.27 Service for Predecessor Employer................. 9
1.28 Related Employers................................ 9
1.29 Leased Employees.................................. 10
1.30 Determination of Top Heavy Status................. 10
1.31 [Reserved]........................................ 12
1.32 "Disqualified Person"............................. 12
1.33 "Employer Securities"............................. 12
1.34 "Exempt Loan"..................................... 12
1.35 "Leveraged Employer Securities"................... 12
1.36 "Issuer".......................................... 12
ARTICLE II. EMPLOYEE PARTICIPANTS............................. 13
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2.01 ELIGIBILITY....................................... 13
2.02 SERVICE - PARTICIPATION........................... 14
2.03 BREAK IN SERVICE - PARTICIPATION.................. 14
2.04 PARTICIPATION UPON REEMPLOYMENT................... 14
ARTICLE III. EMPLOYER CONTRIBUTIONS AND FORFEITURES............ 14
3.01 AMOUNT............................................ 14
3.02 CONTRIBUTION ALLOCATION........................... 15
3.03 LIMITATIONS ON ALLOCATIONS TO PARTICIPANTS'
ACCOUNTS......................................... 16
3.04 DEFINITIONS....................................... 17
3.05 DEFINITIONS....................................... 19
3.06 DETERMINATION OF CONTRIBUTION..................... 21
3.07 TIME OF PAYMENT OF CONTRIBUTION................... 21
3.08 FORFEITURE ALLOCATION............................. 21
3.09 ACCRUAL OF BENEFIT................................ 21
ARTICLE IV. PARTICIPANT CONTRIBUTIONS......................... 22
4.01 PARTICIPANT VOLUNTARY CONTRIBUTIONS............... 22
4.02 PARTICIPANT ROLLOVER CONTRIBUTIONS................ 22
ARTICLE V. TERMINATION OF SERVICE - PARTICIPANT VESTING...... 22
5.01 NORMAL RETIREMENT AGE............................. 22
5.02 PARTICIPANT DISABILITY OR DEATH................... 22
5.03 VESTING SCHEDULE.................................. 22
5.04 CASH-OUT DISTRIBUTION TO PARTIALLY-VESTED
PARTICIPANTS/RESTORATION OF FORFEITED ACCRUED
BENEFIT.......................................... 23
5.05 [RESERVED]........................................ 25
5.06 YEAR OF SERVICE - VESTING......................... 25
5.07 BREAK IN SERVICE - VESTING........................ 25
5.08 INCLUDED YEARS OF SERVICE - VESTING............... 25
5.09 FORFEITURE OCCURS................................. 25
ARTICLE VI. TIME AND METHOD OF PAYMENT OF BENEFITS............ 26
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT................ 26
6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT.............. 28
6.03 BENEFIT PAYMENT ELECTIONS......................... 30
6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS............. 32
6.05 SPECIAL DISTRIBUTION AND PAYMENT REQUIREMENTS..... 32
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6.06 [Reserved]........................................ 33
6.07 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS..... 33
6.08 ROLLOVER DISTRIBUTIONS............................ 34
ARTICLE VII. EMPLOYER ADMINISTRATIVE PROVISIONS....... 35
7.01 INFORMATION TO COMMITTEE.......................... 35
7.02 NO LIABILITY...................................... 35
7.03 INDEMNITY OF COMMITTEE............................ 35
7.04 AMENDMENT TO VESTING SCHEDULE..................... 36
ARTICLE VIII. PARTICIPANT ADMINISTRATIVE PROVISIONS.... 36
8.01 BENEFICIARY DESIGNATION........................... 36
8.02 NO BENEFICIARY DESIGNATION........................ 37
8.03 PERSONAL DATA TO COMMITTEE........................ 37
8.04 ADDRESS FOR NOTIFICATION.......................... 37
8.05 ASSIGNMENT OR ALIENATION.......................... 38
8.06 NOTICE OF CHANGE IN TERMS......................... 38
8.07 LITIGATION AGAINST THE TRUST...................... 38
8.08 INFORMATION AVAILABLE............................. 38
8.09 APPEAL PROCEDURE FOR DENIAL OF BENEFITS........... 38
8.10 ESOP DIVERSIFICATION.............................. 39
ARTICLE IX. ADVISORY COMMITTEE--DUTIES WITH RESPECT TO
PARTICIPANTS' ACCOUNTS............................ 40
9.01 MEMBERS' COMPENSATION EXPENSES.................... 40
9.02 GENERAL........................................... 40
9.03 FUNDING POLICY.................................... 41
9.04 INDIVIDUAL ACCOUNTS............................... 41
9.05 VALUE OF PARTICIPANT'S ACCRUED BENEFIT............ 42
9.06 ALLOCATIONS TO PARTICIPANTS' ACCOUNTS............. 42
9.07 UNCLAIMED ACCOUNT PROCEDURE....................... 44
9.08 TERM.............................................. 45
9.09 POWERS............................................ 45
9.10 MANNER OF ACTION.................................. 45
9.11 AUTHORIZED REPRESENTATIVE......................... 45
9.12 INTERESTED MEMBER................................. 45
9.13 INDIVIDUAL STATEMENT.............................. 45
9.14 ACCOUNT CHARGED................................... 45
9.15 TRANSFERRED ACCOUNTS.............................. 45
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ARTICLE X. TRUSTEE POWERS AND DUTIES................. 46
10.01 ACCEPTANCE........................................ 46
10.02 RECEIPT OF CONTRIBUTIONS.......................... 46
10.03 INVESTMENT POWERS................................. 46
10.04 RECORDS AND STATEMENTS............................ 50
10.05 FEES AND EXPENSES FROM FUND....................... 51
10.06 PARTIES TO LITIGATION............................. 51
10.07 PROFESSIONAL AGENTS............................... 51
10.08 DISTRIBUTION OF TRUST FUND........................ 51
10.09 DISTRIBUTION DIRECTIONS........................... 52
10.10 THIRD PARTY....................................... 52
10.11 RESIGNATION....................................... 52
10.12 REMOVAL........................................... 52
10.13 INTERIM DUTIES AND SUCCESSOR TRUSTEE.............. 52
10.14 VALUATION OF TRUST................................ 53
10.15 PARTICIPANT VOTING RIGHTS - EMPLOYER SECURITIES... 53
10.16 LIMITATION ON LIABILITY - IF INVESTMENT MANAGER
APPOINTED. ....................................... 54
10.17 USE OF INDEPENDENT APPRAISER...................... 54
10.18 INVESTMENT IN GROUP TRUST FUND.................... 54
10.19 KCSI SHARE RESTRICTIONS........................... 55
ARTICLE XI. REPURCHASE OF EMPLOYER SECURITIES........ 55
11.01 PUT OPTION........................................ 55
11.02 CONTINUATION OF PUT OPTION........................ 56
ARTICLE XII. MISCELLANEOUS............................ 56
12.01 EVIDENCE.......................................... 56
12.02 NO RESPONSIBILITY FOR EMPLOYER ACTION............. 57
12.03 FIDUCIARIES NOT INSURERS.......................... 57
12.04 WAIVER OF NOTICE.................................. 57
12.05 SUCCESSORS........................................ 57
12.06 WORD USAGE........................................ 57
12.07 STATE LAW......................................... 57
12.08 EMPLOYMENT NOT GUARANTEED......................... 57
ARTICLE XIII. EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION 58
13.01 EXCLUSIVE BENEFIT................................. 58
13.02 AMENDMENT BY EMPLOYER............................. 58
13.03 DISCONTINUANCE.................................... 59
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13.04 FULL VESTING ON TERMINATION....................... 59
13.05 MERGER/DIRECT TRANSFER............................ 59
13.06 TERMINATION....................................... 60
ARTICLE XIV. PROVISIONS EFFECTIVE UPON CHANGE IN
CONTROL................................. 61
14.01 DEFINITION OF "CHANGE IN CONTROL OF DST".......... 61
14.02 PROVISIONS EFFECTIVE UPON CHANGE OF CONTROL....... 61
14.03 RIGHT TO AMEND PART 1 OF ARTICLE XIV PRIOR TO CHANGE
IN CONTROL OF DST................................. 62
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ALPHABETICAL LISTING OF DEFINITIONS
Plan Definition Section Reference
(Page Number)
Account.................................................................1.12 (6)
Accounting Date.........................................................1.18 (6)
Accrued Benefit.........................................................1.13 (6)
Advisory Committee......................................................1.06 (2)
Affiliate..............................................................1.28A (9)
Annual Addition.....................................................3.04(a) (12)
Annuity Starting Date..................................................6.01 (26)
Advisory Committee......................................................1.06 (2)
Beneficial Owner......................................................14.01 (60)
Beneficiary.............................................................1.10 (4)
Break in Service for Eligibility Purposes..............................2.02 (14)
Break in Service for Vesting Purposes..................................5.07 (25)
Cash-Out Distribution..................................................5.04 (23)
Change in Control of DST..............................................14.01 (60)
Claimant...............................................................8.09 (38)
Code....................................................................1.23 (6)
Code ss.411(d)(6) Protected Benefits..................................13.02 (57)
Compensation............................................................1.11 (4)
Compensation for Code ss.415 Purposes...............................3.04(e) (19)
Compensation for Top Heavy Purposes....................................1.30 (10)
Deemed Cash-Out Rule................................................5.04(C) (23)
Defined Contribution Plan...........................................3.04(c) (18)
Defined Benefit Plan................................................3.04(d) (19)
Determination Date..................................................1.30(g) (12)
Disability..............................................................1.26 (8)
Disqualified Person....................................................1.32 (12)
Distribution Date......................................................6.01 (26)
DST.....................................................................1.02 (2)
Effective Date..........................................................1.16 (6)
Elective Contributions..................................................1.11 (5)
Elective Transfer.....................................................13.05 (58)
Eligible Accrued Benefit...............................................8.10 (39)
Eligible Portion.......................................................6.05 (32)
Employee................................................................1.07 (2)
Employer................................................................1.03 (2)
Employer for Code ss.415 Purposes...................................8.01(b) (18)
Employer for Top Heavy Purposes.....................................1.30(f) (12)
Employer Securities....................................................1.33 (12)
Employer Securities Fund..........................................Witnesseth (1)
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Plan Definition Section Reference
(Page Number)
Employment Commencement Date...........................................2.01 (13)
ERISA...................................................................1.22 (7)
Exchange Act..........................................................14.01 (60)
Excess Amount.......................................................3.05(e) (21)
Exempt Loan............................................................1.34 (12)
5% Owner................................................................1.08 (3)
Forfeiture Break in Service............................................5.08 (25)
Former Plan.......................................................Witnesseth (1)
Group Trust Fund......................................................10.18 (57)
Highly Compensated Employee.............................................1.08 (4)
Hour of Service.........................................................1.25 (7)
Investment Manager..................................................9.02(i) (40)
Issuer.................................................................1.36 (12)
KCSI..............................................................Witnesseth (1)
KCSI Shares.......................................................Witnesseth (1)
KCSI Shares Fund..................................................Witnesseth (1)
Key Employee........................................................1.30(a) (10)
Leased Employees.......................................................1.29 (10)
Leveraged Employer Securities..........................................1.35 (12)
Limitation Year.....................................................3.04(f) (18)
Master Trust ...........................................................1.19 (6)
MDIB................................................................6.02(A) (29)
Maximum Permissible Amount..........................................3.05(a) (19)
Minimum Distribution Incidental Benefit (MDIB).........................6.02 (29)
Non-Key Employee....................................................1.31(b) (11)
Nonforfeitable..........................................................1.14 (6)
Nontransferable Annuity.................................................1.21 (6)
Normal Retirement Age..................................................5.01 (22)
Participant Forfeiture.................................................3.08 (21)
Participant.............................................................1.09 (4)
Permissive Aggregation Group........................................1.31(e) (11)
Plan..............................................................Witnesseth (1)
Plan Entry Date.........................................................1.17 (6)
Plan Administrator......................................................1.05 (2)
Plan Year...............................................................1.15 (6)
Predecessor Employer....................................................1.27 (8)
Qualified Domestic Relations Order.....................................6.07 (33)
Related Employers.......................................................1.28 (8)
Required Aggregation Group..........................................1.30(d) (11)
Required Beginning Date.............................................6.01(B) (27)
Separate Trust .........................................................1.19 (6)
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Plan Definition Section Reference
(Page Number)
Service.................................................................1.24 (7)
Top Heavy Minimum Allocation........................................3.02(B) (15)
Top Heavy Ratio.........................................................1.30 (9)
Trust...................................................................1.19 (6)
Trust Fund..............................................................1.20 (6)
Trustee.................................................................1.04 (2)
Trustee Powers.....................................................10.03(A) (46)
Years of Service.......................................................5.08 (25)
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THE EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST AGREEMENT
OF DST SYSTEMS, INC.
DST Systems, Inc., a corporation organized under the laws of the State
of Delaware, makes this Agreement with UMB Bank, N.A., as Trustee.
WITNESSETH:
DST Systems, Inc. establishes within this Trust Agreement The Employee
Stock Ownership Plan of DST Systems, Inc. (the "Plan") for the administration
and distribution of (a) amounts to be transferred to the Plan (as described
below) comprising the DST Portion ("DST Portion") of The Employee Stock
Ownership Plan and Trust Agreement of Kansas City Southern Industries, Inc. (the
"Former Plan") on behalf of current and former employees of the Employer, and
(b) contributions to be made by the Employer for the purpose of providing
retirement benefits for eligible Employees. The Plan as set forth herein is
effective as of 12:01 a.m. on the Effective Date. The Plan is an employee stock
ownership plan which is intended to qualify as a stock bonus plan under Section
401(a) of the Internal Revenue Code and as an employee stock ownership plan
under Section 4975(e)(7) of the Internal Revenue Code. The Plan shall consist of
Employer Securities Accounts and the General Investment Accounts. The assets of
the Plan shall be invested primarily in qualifying employer securities within
the meaning of Section 409(l) of the Internal Revenue Code.
Prior to the Effective Date, employees of the Employer are eligible to
participate in the Former Plan established by Kansas City Southern Industries,
Inc. ("KCSI"). The Former Plan includes assets attributable to a leveraged
employee stock ownership plan and consists largely of shares of stock of KCSI
("KCSI Shares"). As of October 1, 1995, the Former Plan was amended and restated
to comprise (1) a "DST Portion" of the Plan, consisting of the Accounts of those
Participants who are employed by DST, Accounts of former Employees who separated
from Service with DST, Accounts of former Employees employed or formerly
employed by Investors Fiduciary Trust Company, Xxxxxx Service Company or an
affiliate of DST, as defined in Section 1.28 ("DST Participants"), Accounts of
Beneficiaries of DST Participants, and the number of KCSI Shares allocable to
DST Participants for the 1995 Plan Year; and (2) an "Industries Portion" of the
Plan, consisting of the remaining Accounts and shares. As of the Effective Date,
the assets of the DST Portion of the Former Plan shall be transferred to this
Plan, with KCSI, and DST Systems Inc. by signature to this document, evidencing
having taken or agreeing to take all appropriate action to cause such transfer
to occur.
KCSI Shares to be transferred to this Plan from the Former Plan shall
be held in a KCSI Shares Fund. The KCSI Shares Fund is provided solely to permit
the continued holding of KCSI Shares allocated to Participants' Accounts
following the transfer. No future contributions or investments may be made in
the KCSI Shares Fund.
Effective as of the Effective Date, employees of the Employer shall
cease to be eligible to continue active participation in the Former Plan.
Effective as of the Effective Date, the Plan shall be established by the
Employer as a successor to the Former Plan to provide retirement benefits for
eligible employees who continue employment with or become employed by the
Employer following the Effective Date.
Now, therefore, in consideration of their mutual covenants, the
Employer and the Trustee agree as follows:
ARTICLE I.
DEFINITIONS
1.01 "Plan" means the retirement plan established by the Employer in
the form of this Agreement, designated as The Employee Stock Ownership Plan of
DST Systems, Inc.
1.02 "DST" means DST Systems, Inc., or any of its subsidiary companies,
that, with the written consent of DST Systems, Inc., adopts this Plan; PROVIDED,
in no event shall a subsidiary company be deemed to be within the definition of
"DST" prior to the date on which such subsidiary company became a member of a
controlled group of corporations (as defined in Code ss.414(b)) or a member of a
group of trades or businesses under common control (as defined in Code
ss.414(c)), which includes DST Systems, Inc. as a member of such group.
1.03 "Employer" means DST.
1.04 "Trustee" with respect to the Separate Trust means UMB Bank, N.A.,
or any successor in office who in writing accepts the position of Trustee under
this Plan and the Separate Trust; and with respect to the Master Trust means UMB
Bank, N.A., or any successor in office who in writing accepts the position of
Trustee under the Master Trust. Unless otherwise specified in this Plan,
references to the "Trustee" in this Plan include either or both of the Trustee
under the Separate Trust or the Trustee under the Master Trust.
1.05 "Plan Administrator" is DST Systems, Inc. unless DST Systems, Inc.
designates another person to hold the position of Plan Administrator. In
addition to its other duties, the Plan Administrator has full responsibility for
compliance with the reporting and disclosure rules under ERISA as respects this
Agreement.
1.06 "Advisory Committee" means the Advisory Committee for the Plan as
from time to time constituted.
1.07 "Employee" means any employee of the Employer, excluding any
Leased Employee, and excluding any individual who performs services for the
Employer and (i) is working in a classification described as independent
contractor (even if such person is subsequently determined to be a common-law
employee of the Employer), (ii) is paid, directly or indirectly, through an
Employer's accounts payable system, or (iii) performs such services pursuant to
a contract or agreement which provides that the person is an independent
contractor or consultant (even if such person is subsequently determined to be
a common-law employee of the Employer).
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1.08 "Highly Compensated Employee" means, for any Plan Year, any
individual who (i) is an Employee described in subsection (a) or (b) below, or
(ii) is a former Employee described in subsection (c), below:
(a) An Employee who at any time during the current Plan Year
or the preceding Plan Year is a more than five percent (5%) owner (or
is considered as owning more than five percent (5%) within the meaning
of Section 318 of the Code) ("5% Owner") of the Employer;
(b) An Employee who (i) received Compensation during the
preceding Plan Year in excess of $80,000 (in 1996, as adjusted in
accordance with regulations and rulings under Section 414(q) of the
Code), and (ii) if the Advisory Committee elects to apply this clause
(ii) to determine the Highly Compensated Employees for a Plan Year, for
this Plan and, except as otherwise permitted, consistently for all
plans of the Employer whose plan years begin in the same calendar year
as such preceding Plan Year, is in the group consisting of the top
twenty percent (20%) of the total number of persons employed by the
Employer when ranked on the basis of Compensation paid during the
preceding Plan Year, provided that, for purposes of determining the
total number of persons employed by the Employer, the following
Employees shall be excluded:
(1) Employees who have not completed an aggregate of
six (6) months of service during the preceding Plan Year,
(2) Employees who work less than seventeen and
one-half (17-1/2) hours per week for 50% or more of the total
weeks worked by such employees during the preceding Plan Year,
(3) Employees who normally work during not more than
six (6) months during any year,
(4) Employees who have not attained age 21 by the end
of the preceding Plan Year,
(5) Employees who are nonresident aliens and who
receive no earned income (within the meaning of Section
911(d)(2) of the Code) from the Employer which constitutes
income during the preceding Plan Year from sources within the
United States (within the meaning of Section 861(a)(3) of the
Code), and
(6) Except to the extent provided in regulations
prescribed by the Secretary of the Treasury, Employees who are
members of a collective bargaining unit represented by a
collective bargaining agent with which an Employer has or has
had a bargaining agreement.
(c) The term "Highly Compensated Employee" also includes any
former Employee who separated from Service (or has a deemed Separation
from Service, as determined under Treasury regulations) prior to the
Plan Year, performs no Service for the Employer during the Plan Year,
and was a Highly Compensated Employee either for the separation year or
any Plan Year ending on or after his 55th birthday.
For purposes of this Section 1.08, "Compensation" means
Compensation as defined in Section 1.11, except any exclusions from
Compensation, and Compensation must include Elective Contributions.
The Advisory Committee must make the determination of who is a
Highly Compensated Employee, including the determinations of the number
and identity of the top paid 20% group and the relevant Compensation,
consistent with Code ss.414(q) and regulations issued under that Code
section. The Employer may make a calendar year election to determine
the Highly Compensated Employees for the Plan Year, as prescribed by
Treasury regulations. Except as otherwise permitted, a calendar year
election must apply to all plans and arrangements of the Employer.
1.09 "Participant" is an Employee who is eligible to be and becomes a
Participant in accordance with the provisions of Section 2.01.
1.10 "Beneficiary" is a person designated by a Participant who is or
may become entitled to a benefit under the Plan. A Beneficiary who becomes
entitled to a benefit under the Plan remains a Beneficiary under the Plan until
the Trustee has fully distributed his benefit to him. A Beneficiary's right to
(and the Plan Administrator's, the Advisory Committee's or a Trustee's duty to
provide to the Beneficiary) information or data concerning the Plan does not
arise until he first becomes entitled to receive a benefit under the Plan.
1.11 "Compensation" means, with respect to a Participant in the Plan,
all wages, salaries, fees for professional service and other amounts (whether or
not paid in cash) for personal services actually rendered in the course of
employment with DST, but only to the extent includible in gross income. This
definition of Compensation includes, but is not limited to, commissions paid
salesmen, compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips, fringe benefits, reimbursements and
expense allowances. This definition of Compensation does not include:
(a) Employer contributions to a plan of deferred compensation
to the extent the contributions are not includible in gross income of
the Employee for the taxable year in which contributed, on behalf of an
Employee to a Simplified Employee Pension Plan to the extent such
contributions are excludible from the Employee's gross income, and any
distributions from a plan of deferred compensation, regardless of
whether such amounts are includible in the gross income of the Employee
when distributed.
(b) Amounts realized from the exercise of a non qualified
stock option, or when restricted stock (or property) held by an
Employee either becomes freely transferable or is no longer subject to
a substantial risk of forfeiture.
(c) Amounts realized from the sale, exchange or other
disposition of stock acquired under a stock option described in Part
II, Subchapter D, Chapter 1 of the Code.
(d) Other amounts which receive special tax benefits, such as
premiums for group term life insurance (but only to the extent that the
premiums are not includible in the gross income of the Employee), or
contributions made by an Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract
described in Code ss. 403(b) (whether or not the contributions are
excludible from the gross income of the Employee).
To determine a Participant's contribution allocation under Section
3.02(A), Compensation means the general definition of Compensation described in
this Section 1.11, but excluding reimbursements or other expense allowances,
fringe benefits (cash and noncash), moving expenses, deferred compensation and
welfare benefits, and including Elective Contributions. "Elective Contributions"
are amounts excludible from the Employee's gross income under Code xx.xx. 125,
402(a)(8), 402(h) or 403(b), and contributed by the Employer, at the Employee's
election, to a Code ss. 401(k) arrangement, a Simplified Employee Pension,
cafeteria plan or tax-sheltered annuity.
For purposes of determining whether the Plan discriminates in favor of
Highly Compensated Employees, Compensation means Compensation as defined in this
Section 1.11, unless DST elects to use an alternate nondiscriminatory
definition, in accordance with the requirements of Code ss.414(s) and the
regulations issued under that Code section. DST may elect to include all
Elective Contributions made by DST on behalf of the Employees of DST. DST's
election to include Elective Contributions must be consistent and uniform with
respect to Employees of DST and all plans of DST for any particular Plan Year.
DST may make this election to include Elective Contributions for
nondiscrimination testing purposes, irrespective of whether this Section 1.11
includes Elective Contributions in the general Compensation definition
applicable to the Plan.
Any reference in this Plan to Compensation is a reference to the
definition in this Section 1.11, unless the Plan reference specifies a
modification to this definition. The Advisory Committee will take into account
only Compensation actually paid for the relevant period.
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, the annual
Compensation of each Employee taken into account under the Plan shall not exceed
the OBRA '93 annual compensation limit. The OBRA '93 annual compensation limit
is $150,000, as adjusted by the Commissioner for
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increases in the cost of living in accordance with Code ss.401(a)(17)(B). The
cost-of-living adjustment in effect for a calendar year applies to any period,
not exceeding 12 months, over which Compensation is determined (determination
period) beginning in such calendar year. If a determination period consists of
fewer than 12 months, the OBRA '93 annual compensation limit will be multiplied
by a fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
Any reference in this Plan to the limitation under Code ss.401(a)(17)
shall mean the OBRA '93 annual compensation limit set forth in this provision.
1.12 "Account" means the separate account(s) which the Advisory
Committee or the Trustee maintains for a Participant under the Plan pursuant to
Section 9.04.
1.13 "Accrued Benefit" means the amount standing in a Participant's
Account(s) as of any date derived from Employer contributions.
1.14 "Nonforfeitable" means a Participant's or Beneficiary's
unconditional claim, legally enforceable against the Plan, to the Participant's
Accrued Benefit.
1.15 "Plan Year" means the fiscal year of the Plan, a 12 consecutive
month period ending every December 31.
1.16 "Effective Date" of this Plan means January 1, 1998.
1.17 "Plan Entry Date" means the Effective Date and every January 1 and
July 1 after the Effective Date.
1.18 "Accounting Date" shall be the last day of the Plan Year. Unless
otherwise specified in the Plan, the Advisory Committee shall make all Plan
allocations for a particular Plan Year as of the last Accounting Date of that
Plan Year.
1.19 "Trust" means either or both of (i) the separate Trust created
under Article X of this Plan (the "Separate Trust") and (ii) the Separate Plan
Account (as defined in the Master Trust) for this Plan under the DST Systems,
Inc. Master Trust created by the Master Trust Agreement by and between DST
Systems, Inc. and UMB Bank, N.A., as Trustee of the Master Trust effective as of
January 1, 1998 (the "Master Trust").
1.20 "Trust Fund" means all property of every kind held or acquired by
the Trustee of the Separate Trust under this Agreement or by the Trustee of the
Master Trust for purposes of this Plan under the Master Trust Agreement. This
Plan together with the Master Trust creates two separate trusts each of which
applies to all Employers participating under The Employee Stock Ownership Plan
and Trust Agreement of DST Systems, Inc. However, the Trustee will maintain
separate records of account in order to reflect properly each Participant's
Accrued Benefit derived from the participating Employer.
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1.21 "Nontransferable Annuity" means an annuity which by its terms
provides that it may not be sold, assigned, discounted, pledged as collateral
for a loan or security for the performance of an obligation or for any purpose
to any person other than the insurance company. If the Trustee distributes an
annuity contract, the contract must be a Nontransferable Annuity.
1.22 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
1.23 "Code" means the Internal Revenue Code of 1986, as amended.
1.24 "Service" means any period of time the Employee is in the employ
of the Employer, including any period the Employee is on an unpaid leave of
absence authorized by the Employer under a uniform, nondiscriminatory policy
applicable to all Employees. Notwithstanding any provision of this Plan to the
contrary, contributions, benefits and service credit with respect to qualified
military service shall be provided in accordance with Section 414(u) of the
Code. "Separation from Service" means a separation from Service with the
Employer maintaining this Plan.
1.25 "Hour of Service" means:
(a) Each Hour of Service for which the Employer, either
directly or indirectly, pays an Employee, or for which the Employee is
entitled to payment, for the performance of duties. The Advisory
Committee credits Hours of Service under this paragraph (a) to the
Employee for the computation period in which the Employee performs the
duties, irrespective of when paid;
(b) Each Hour of Service for back pay, irrespective of
mitigation of damages, to which the Employer has agreed or for which
the Employee has received an award. The Advisory Committee credits
Hours of Service under this paragraph (b) to the Employee for the
computation period(s) to which the award or the agreement pertains
rather than for the computation period in which the award, agreement or
payment is made; and
(c) Each Hour of Service for which the Employer, either
directly or indirectly, pays an Employee, or for which the Employee is
entitled to payment (irrespective of whether the employment
relationship is terminated), for reasons other than for the performance
of duties during a computation period, such as leave of absence,
vacation, holiday, sick leave, illness, incapacity (including
disability), layoff, jury duty or military duty. The Advisory Committee
will credit no more than 501 Hours of Service under this paragraph (c)
to an Employee on account of any single continuous period during which
the Employee does not perform any duties (whether or not such period
occurs during a single computation period). The Advisory Committee
credits Hours of Service under this paragraph (c) in accordance with
the rules of paragraphs (b) and (c) of Labor Reg.
-7-
ss.2530.200b-2, which the Plan, by this reference, specifically
incorporates in full within this paragraph (c).
The Advisory Committee will not credit an Hour of Service under more
than one of the above paragraphs. A computation period for purposes of this
Section 1.25 is the Plan Year, Year of Service period, Break in Service period
or other period, as determined under the Plan provision for which the Advisory
Committee is measuring an Employee's Hours of Service.
The Employer will credit every Employee with Hours of Service on the
basis of the "actual" method. For purposes of the Plan, "actual" method means
the determination of Hours of Service from records of hours worked and hours for
which the Employer makes payment or for which payment is due from the Employer.
However, for an employee who is paid on other than an hourly basis, Hours of
Service shall be credited according to the following schedule, based on the
payroll period of the Employee, for each payroll period with respect to which he
or she is paid or is entitled to payment of compensation:
PAYROLL PERIOD HOURS OF SERVICE
Daily 10
Weekly 45
Semi-Monthly 95
Monthly 190
Solely for purposes of determining whether the Employee incurs a Break
in Service under any provision of this Plan, the Advisory Committee must credit
Hours of Service during an Employee's unpaid absence period due to maternity or
paternity leave. The Advisory Committee considers an Employee on maternity or
paternity leave if the Employee's absence is due to the Employee's pregnancy,
the birth of the Employee's child, the placement with the Employee of an adopted
child, or the care of the Employee's child immediately following the child's
birth or placement. The Advisory Committee credits Hours of Service under this
paragraph on the basis of the number of Hours of Service the Employee would
receive if he were paid during the absence period or, if the Advisory Committee
cannot determine the number of Hours of Service the Employee would receive, on
the basis of 8 hours per day during the absence period. The Advisory Committee
will credit only the number (not exceeding 501) of Hours of Service necessary to
prevent an Employee's Break in Service. The Advisory Committee credits all Hours
of Service described in this paragraph to the computation period in which the
absence period begins or, if the Employee does not need these Hours of Service
to prevent a Break in Service in the computation period in which his absence
period begins, the Advisory Committee credits these Hours of Service to the
immediately following computation period.
1.26 "Disability" means the Participant, because of a physical or
mental disability, will be unable to perform the duties of his customary
position of employment (or is unable to engage in any substantial gainful
activity) for an indefinite period which the Advisory Committee considers will
be of long continued duration. The Plan considers a Participant disabled on the
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date the Advisory Committee determines the Participant satisfies the definition
of disability. The Advisory Committee may require a Participant to submit to a
physical examination in order to confirm disability. The Advisory Committee will
apply the provisions of this Section 1.26 in a nondiscriminatory, consistent and
uniform manner.
1.27 SERVICE FOR PREDECESSOR EMPLOYER. If the Employer maintains the
plan of a predecessor employer, the Plan treats service of the Employee with the
predecessor employer as service with the Employer.
1.28 RELATED EMPLOYERS. A related group is a controlled group of
corporations (as defined in Code ss.414(b)), trades or businesses (whether or
not incorporated) which are under common control (as defined in Code ss.414(c))
or an affiliated service group (as defined in Code ss.414(m) or in Code
ss.414(o)). If the Employer is a member of a related group, the term 'Employer'
includes the related group members for purposes of crediting Hours of Service,
determining Years of Service and Breaks in Service under Articles II and V,
applying the limitations on allocations in Article III, applying the top heavy
rules and the minimum allocation requirements of Article III, the definitions of
Employee, Highly Compensated Employee, Compensation and Leased Employee, and for
any other purpose required by the applicable Code section or by a Plan
provision. In addition, except as provided in Section 1.28(A), (1) the Plan
shall treat all service credited with respect to an Employee under the Former
Plan prior to the Effective Date as service with the Employer under this Plan,
and (2) the Plan shall treat service of an Employee on or after the Effective
Date with an "affiliate" of DST as service with DST. For purposes of this
Section 1.28, the term "affiliate" means any corporation, partnership, joint
venture or other business entity with respect to which fifteen percent (15%) or
more of the equity interests therein are owned, directly or indirectly, by DST
in the case of an affiliate of DST, or by the Employer in the case of an
affiliate of the Employer. However, only an Employer described in Section 1.03
may contribute to the Plan and only an Employee employed by an Employer
described in Section 1.03 is eligible to participate in this Plan. For Plan
allocation purposes, "Compensation" does not include Compensation received from
a related employer that is not participating in this Plan.
(A) SERVICE PRIOR AND SUBSEQUENT TO ADOPTION OF PLAN BY AFFILIATE. For
purposes of this Section 1.28(A), the term "affiliate" means any corporation,
partnership, joint venture or other business entity with respect to which
fifteen percent (15%) or more of the equity interests therein are owned,
directly or indirectly, by DST. This paragraph shall apply solely to affiliates
that become Employers. For purposes of crediting Hours of Service and
determining Years of Service and Breaks in Service under Articles II and V, the
Plan shall treat service of an Employee with the Employer before the date the
affiliate became an affiliate and after the date it ceases to be an affiliate as
service with the Employer. If an Employee was not employed by such affiliate on
the date it became an affiliate, the Plan shall exclude service with the
Employer prior to such date. If the Employee was employed by such affiliate on
the date it became an affiliate, the Plan shall treat service with such
affiliate prior to such date as service for the above purposes under the Plan,
other than such service prior to a separation from service with the affiliate.
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(B) SPECIAL RULE FOR KCSI GROUP SERVICE. For purposes of determining
service with an affiliate, an affiliate shall also include Kansas City Southern
Industries, Inc. ("KCSI"), and any corporation, partnership, joint venture, or
other business entity that would be an affiliate of KCSI under the foregoing
definitions of "affiliate" if KCSI were substituted for DST therein (a "KCSI
Affiliate"); but only for periods (before or after the Effective Date) during
which DST is also a KCSI affiliate under the foregoing definitions.
1.29 LEASED EMPLOYEES. The Plan does not treat a Leased Employee as an
Employee of the Employer. A Leased Employee is an individual (who otherwise is
not an Employee of the Employer) who, pursuant to a leasing agreement between
the Employer and any other person, has performed services for the Employer (or
for the Employer and any persons related to the Employer within the meaning of
Code ss.144(a)(3)) on a substantially full time basis for at least one year and
who performs services under the primary direction or control of the Employer. A
Leased Employee who performs services for the Employer pursuant to a contract or
agreement which provides that the person is a Leased Employee will not become
eligible to participate in this Plan merely by reason of a determination that
the person is a common-law employee of the Employer, unless and until the
Employer changes the employment classification of such person.
1.30 DETERMINATION OF TOP HEAVY STATUS.
If this Plan is the only qualified plan maintained by DST, Plan is top
heavy for a Plan Year if the top heavy ratio as of the Determination Date
exceeds 60%. The top heavy ratio is a fraction, the numerator of which is the
sum of the present value of Accrued Benefits of all Key Employees in the Plan as
of the Determination Date and the denominator of which is a similar sum
determined for all Employees in the Plan. The Advisory Committee must include in
the top heavy ratio, as part of the present value of Accrued Benefits, any
contribution by DST not made as of the Determination Date but includible under
Code ss.416 and the applicable Treasury regulations, and distributions made
within the Determination Period. The Advisory Committee must calculate the top
heavy ratio by disregarding the Accrued Benefit (and distributions, if any, of
the Accrued Benefit) of any Non-Key Employee who was formerly a Key Employee,
and by disregarding the Accrued Benefit (including distributions, if any, of the
Accrued Benefit) of an individual who has not received credit for at least one
Hour of Service with DST during the Determination Period. The Advisory Committee
must calculate the top heavy ratio, including the extent to which it must take
into account distributions, rollovers and transfers, in accordance with Code
ss.416 and the regulations under that Code section.
If DST maintains other qualified plans (including a simplified employee
pension plan), or maintained another such plan which now is terminated, the Plan
is top heavy only if it is part of the Required Aggregation Group, and the top
heavy ratio for the Required Aggregation Group and for the Permissive
Aggregation Group, if any, each exceeds 60%. The Advisory Committee will
calculate the top heavy ratio in the same manner as required by the first
paragraph of this Section 1.30(A), taking into account all plans within the
Aggregation Group. To the extent the Advisory Committee must take into account
distributions to a Participant, the Advisory
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Committee must include distributions from a terminated plan which would have
been part of the Required Aggregation Group if it were in existence on the
Determination Date. The Advisory Committee will calculate the present value of
Accrued Benefits under defined benefit plans or simplified employee pension
plans included within the group in accordance with the terms of those plans,
Code ss.416 and the regulations under that Code section. If a Participant in a
defined benefit plan is a Non-Key Employee, the Advisory Committee will
determine his Accrued Benefit under the accrual method, if any, which is
applicable uniformly to all defined benefit plans maintained by DST or, if there
is no uniform method, in accordance with the slowest accrual rate permitted
under the fractional rule accrual method described in Code ss.411(b)(1)(C). To
calculate the present value of benefits from a defined benefit plan, the
Advisory Committee will use the actuarial assumptions (interest and mortality
only) prescribed by the defined benefit plan(s) to value benefits for top heavy
purposes. If an aggregated plan does not have a valuation date coinciding with
the Determination Date, the Advisory Committee must value the Accrued Benefits
in the aggregated plan as of the most recent valuation date falling within the
12-month period ending on the Determination Date, except as Code ss.416 and
applicable Treasury regulations require for the first and second plan year of a
defined benefit plan. The Advisory Committee will calculate the top heavy ratio
with reference to the Determination Dates that fall within the same calendar
year.
Definitions. For purposes of applying the provisions of this Section 1.30:
(a) "Key Employee" means, as of any Determination Date, any
Employee or former Employee of DST (or Beneficiary of such Employee)
who, for any Plan Year in the Determination Period: (i) has
Compensation in excess of 50% of the dollar amount prescribed in Code
ss.415(b)(1)(A) (relating to defined benefit plans) and is an officer
of DST; (ii) has Compensation in excess of the dollar amount prescribed
in Code ss.415(c)(1)(A) (relating to defined contribution plans) and is
one of the Employees of DST owning the ten largest interests in DST;
(iii) is a more than 5% owner of DST; or (iv) is a more than 1% owner
of DST and has Compensation of more than $150,000. The constructive
ownership rules of Code ss.318 (or the principles of that section, in
the case of an unincorporated Employer) will apply to determine
ownership in DST. The number of officers taken into account under
clause (i) will not exceed the greater of 3 or 10% of the total number
(after application of the Code ss.414(q)(8) exclusions) of Employees of
DST, but no more than 50 officers. The Advisory Committee will make the
determination of who is a Key Employee in accordance with Code
ss.416(i)(1) and the regulations under that Code section.
(b) "Non-Key Employee" is an Employee of DST who does not meet
the definition of Key Employee.
(c) "Compensation" means Compensation as determined under
Section 1.08 (relating to the Highly Compensated Employee definition).
(d) "Required Aggregation Group" means: (1) each qualified
plan of DST in
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which at least one Key Employee participates at any time during the
Determination Period; and (2) any other qualified plan of DST which
enables a plan described in clause (1) to meet the requirements of Code
ss.401(a)(4) or Code ss.410.
(e) "Permissive Aggregation Group" is the Required Aggregation
Group plus any other qualified plans maintained by DST, but only if
such group would satisfy in the aggregate the requirements of Code
ss.401(a)(4) and Code ss.410. The Advisory Committee will determine the
Permissive Aggregation Group.
(f) "Employer" means DST and any related employers described
in Section 1.28.
(g) "Determination Date" for any Plan Year is the last
Accounting Date of the preceding Plan Year or, in the case of the first
Plan Year of the Plan, the last Accounting Date of that Plan Year. The
"Determination Period" is the 5-year period ending on the Determination
Date.
1.31 [RESERVED].
1.32 "Disqualified Person" has the meaning ascribed to that term under
Code ss.4975(e)(2).
1.33 "Employer Securities" means voting common stock issued by DST
Systems, Inc., or by a corporation which is a member of the same controlled
group of corporations, which is readily tradable on an established securities
market. Noncallable preferred stock of DST Systems Inc. shall be treated as
Employer Securities with respect to the Plan if such stock is convertible at any
time into voting common stock issued by DST Systems, Inc. if such conversion is
at a conversion price which (as of the date of acquisition by the Plan) is
reasonable. Under regulations under Code ss.409(l), preferred stock shall be
treated as noncallable if after the call there will be a reasonable opportunity
for a conversion which meets the requirements of the preceding sentence.
For purposes of Sections 3.08, 5.09, 6.05, 8.10(A), 10.03(o), 10.15,
10.17 and 11.01 only, in order to comply with Code ss.ss.401(a)(28), 409 and
411(d)(6), the term "Employer Securities" shall include voting common stock of
Kansas City Southern Industries, Inc., which is readily tradable on an
established securities market.
1.34 "Exempt Loan" means a loan made to this Plan by a Disqualified
Person, or a loan to this Plan which a Disqualified Person guarantees, provided
the loan satisfies the requirements of Treas. Reg. ss.54.4975-7(b).
1.35 "Leveraged Employer Securities" means Employer Securities acquired
by the Trust with the proceeds of an Exempt Loan and which satisfy the
definition of "qualifying employer securities" in Code ss.4975(e)(8) with
respect to the Plan to which the Exempt Loan was made.
1.36 "Issuer" means the corporation that issued the Employer Securities.
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ARTICLE II.
EMPLOYEE PARTICIPANTS
2.01 ELIGIBILITY. Each Employee (other than an Excluded Employee)
becomes a Participant in the Plan on the Plan Entry Date (if employed on that
date) coincident with or immediately following his Employment Commencement Date.
Each Employee who was a Participant in the Former Plan on the day before the
Effective Date and whose Employer becomes an Employer under this Plan as of the
Effective Date of this Plan shall become a Participant in the Plan as of the
Effective Date. The term "Employment Commencement Date" means the date on which
the Employee first performs an Hour of Service for an Employer.
An Employee is an Excluded Employee if he is (a) a nonresident alien
who receives no earned income (within the meaning of Code ss.911(d)(2)) from an
Employer which constitutes income from sources within the United States (within
the meaning of Code ss.861(a)(3)), or (b) a member of a collective bargaining
unit, unless the collective bargaining agreement provides otherwise. An Employee
is a member of a collective bargaining unit if he is included in a unit of
employees covered by an agreement which the Secretary of Labor finds to be a
collective bargaining agreement between employee representatives and one or more
employers if there is evidence that retirement benefits were the subject of good
faith bargaining between such employee representatives and such employer or
employers. The term "employee representatives" does not include an organization
more than one half the members of which are owners, officers or executives of an
Employer.
If a Participant has not incurred a Separation from Service but becomes
an Excluded Employee, then during the period such a Participant is an Excluded
Employee, the Advisory Committee will limit that Participant's sharing in the
allocation of Employer contributions and Participant forfeitures, if any, under
the Plan by disregarding his Compensation paid by an Employer for services
rendered in his capacity as an Excluded Employee. However, during such period of
exclusion, the Participant, without regard to employment classification,
continues to receive credit for vesting under Article V for each included Year
of Service and the Participant's Account continues to share fully in Trust Fund
allocations under Section 9.06.
If an Excluded Employee who is not a Participant becomes eligible to
participate in the Plan by reason of a change in employment classification, he
will participate in the Plan immediately if he would have been a Participant had
he not been an Excluded Employee during his period of Service. Furthermore, the
Plan takes into account all of the Participant's included years of Service with
an Employer as an Excluded Employee for purposes of vesting credit under Article
V.
-13-
A Leased Employee who performs services for the Employer pursuant to a
contract or agreement which provides that the person is a Leased Employee will
not become eligible to participate in this Plan merely by reason of a
determination that the person is a common-law employee of the Employer, unless
and until the Employer changes the employment classification of such person. If
a Leased Employee who is not a Participant becomes eligible to participate in
the Plan by reason of a change in employment classification, he will participate
in the Plan immediately if he has satisfied the eligibility conditions of
Section 2.01 and would have been a Participant had he not been a Leased Employee
during his period of Service. Furthermore, the Plan takes into account all of
the Participant's included Years of Service with an Employer as a Leased
Employee for purposes of vesting credit under Article V.
2.02 SERVICE - PARTICIPATION. For purposes of participation under
Section 2.01, the Plan does not apply any minimum Hour of Service requirement.
The Plan does not require an Employee who terminates employment to establish a
new Employment Commencement Date if reemployed by an Employer.
2.03 BREAK IN SERVICE - PARTICIPATION. For purposes of participation in
the Plan, the Plan does not apply any Break in Service rule.
2.04 PARTICIPATION UPON REEMPLOYMENT. A Participant whose employment
terminates reenters the Plan as a Participant on the date of his reemployment.
An Employee who satisfies the Plan's eligibility conditions but who terminates
employment prior to becoming a Participant becomes a Participant in the Plan on
the later of the Plan Entry Date on which he would have entered the Plan had he
not terminated employment or the date of his reemployment.
ARTICLE III.
EMPLOYER CONTRIBUTIONS AND FORFEITURES
3.01 AMOUNT. For each Plan Year, DST will contribute to the Trust an
amount which DST may from time to time deem advisable. DST (or the Advisory
Committee on behalf of DST) shall determine the extent to which such
contributions are directed to the Separate Trust or the Master Trust. DST may
not make a contribution to the Trust for any Plan Year to the extent the
contribution would exceed the Participants' in the Plan "Maximum Permissible
Amounts".
DST contributes to this Plan on the condition its contribution is not
due to a mistake of fact and the Internal Revenue Service will not disallow the
deduction for its contribution. The Trustee, upon written request from DST, must
return to DST the amount of DST's contribution made by DST by mistake of fact or
the amount of DST's contribution disallowed as a deduction under Code ss.404.
The Trustee will not return any portion of DST's contribution under the
provisions of this paragraph more than one year after:
(a) DST made the contribution by mistake of fact; or
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(b) The disallowance of the contribution as a deduction, and
then, only to the extent of the disallowance.
The Trustee will not increase the amount of DST's contribution
returnable under this Section 3.01 for any earnings attributable to the
contribution, but the Trustee will decrease DST's contribution returnable for
any losses attributable to it. The Trustee may require DST to furnish it
whatever evidence the Trustee deems necessary to enable the Trustee to confirm
the amount DST has requested be returned is properly returnable under ERISA.
DST may make its contribution in cash or in Employer Securities as DST
from time to time may determine. DST may make its contribution of Employer
Securities at fair market value determined at the time of contribution.
3.02 CONTRIBUTION ALLOCATION.
(A) METHOD OF ALLOCATION. Subject to any restoration allocation required under
Section 5.04, the Advisory Committee will allocate and credit each annual DST
contribution (and Participant forfeitures, if any) to the Account of each
Participant in the Plan who satisfies the conditions of Section 3.09. The
Advisory Committee will make this allocation in the same ratio that each such
Participant in the Plan's Compensation for the Plan Year bears to the total
Compensation of all such Participants in the Plan for the Plan Year.
(B) TOP HEAVY MINIMUM ALLOCATION.
(1) MINIMUM ALLOCATION. If the Plan is top heavy in any Plan
Year:
(a) Each Non-Key Employee (as defined in Section
1.30) who is a Participant in the Plan and is employed by DST
on the last day of the Plan Year will receive a top heavy
minimum allocation for that Plan Year, irrespective of whether
he satisfies the Hours of Service condition under Section
3.09(B); and
(b) The top heavy minimum allocation is the lesser of
3% of the NonKey Employee's Compensation for the Plan Year or
the highest contribution rate for the Plan Year made on behalf
of any Key Employee in the Plan (as defined in Section 1.30).
However, if a defined benefit plan maintained by DST which
benefits a Key Employee in the Plan depends on this Plan to
satisfy the antidiscrimination rules of Code ss.401(a)(4) or
the coverage rules of Code ss.410 (or another plan benefiting
the Key Employee so depends on such defined benefit plan), the
top heavy minimum allocation is 3% of the Non-Key Employee's
Compensation regardless of the contribution rate for the Key
Employees in the Plan.
For purposes of clause (b), "Compensation" means Compensation
as defined in Section 1.11, except (i) compensation does not include
Elective Contributions; (ii) any
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exclusions from Compensation (other than the exclusion of elective
contributions and the exclusions described in paragraphs (a), (b), (c)
and (d) of Section 1.11) do not apply, and (iii) the Advisory Committee
must disregard the requirements of Section 3.13. For purposes of this
Section 3.02(B), a Participant's contribution rate is the sum of
Employer contributions (not including Employer contributions to Social
Security) and forfeitures allocated to the Participant's Account for
the Plan Year under Sections 3.02 and 3.08 divided by his Compensation
for the entire Plan Year. However, a Non-Key Employee's contribution
rate does not include any elective contributions under a Code ss.401(k)
arrangement maintained by DST nor any Employer matching contributions
made by DST subject to the nondiscrimination requirements of Code
ss.401(k) or of Code ss.401(m). To determine a Participant's
contribution rate, the Advisory Committee must treat all qualified top
heavy defined contribution plans maintained by DST (or by any related
Employers described in Section 1.28) as a single plan.
(2) METHOD OF COMPLIANCE. The Plan will satisfy the top heavy
minimum allocation in accordance with this Section 3.02(B)(2). The
Advisory Committee first will allocate the Employer contributions (and
Participant forfeitures, if any) for the Plan Year in accordance with
the allocation formula under Section 3.02(A). DST then will contribute
an additional amount for the Account of any Participant in the Plan who
is entitled under this Section 3.02(B) to a top heavy minimum
allocation and whose contribution rate for the Plan Year is less than
the top heavy minimum allocation. The additional amount is the amount
necessary to increase the Participant's contribution rate to the top
heavy minimum allocation. The Advisory Committee will allocate the
additional contribution to the Account of the Participant on whose
behalf DST makes the contribution.
3.03 LIMITATIONS ON ALLOCATIONS TO PARTICIPANTS' ACCOUNTS. The amount
of Annual Additions which the Advisory Committee may allocate under the Plan on
a Participant's behalf for a Limitation Year may not exceed the Maximum
Permissible Amount. If the amount DST otherwise would contribute to the
Participant's Account would cause the Annual Additions for the Limitation Year
to exceed the Maximum Permissible Amount, DST will reduce the amount of its
contribution so the Annual Additions for the Limitation Year will equal the
Maximum Permissible Amount. If an allocation of Employer contributions, pursuant
to Section 3.02, would result in an Excess Amount (other than an Excess Amount
resulting from the circumstances described in Section 3.02(B)) to the
Participant's Account, the Advisory Committee will reallocate the Excess Amount
to the remaining Participants in the Plan who are eligible for an allocation of
Employer contributions for the Plan Year in which the Limitation Year ends. The
Advisory Committee will make this reallocation on the basis of the allocation
method under the Plan as if the Participant whose Account otherwise would
receive the Excess Amount is not eligible for an allocation of Employer
contributions.
(A) ESTIMATION OF COMPENSATION. Prior to the determination of a Participant's
actual Compensation for a Limitation Year, the Advisory Committee may determine
the Maximum Permissible Amount on the basis of the Participant's estimated
annual Compensation for such
-16-
Limitation Year. The Advisory Committee must make this determination on a
reasonable and uniform basis for all Participants in the Plan similarly
situated. The Advisory Committee must reduce any Employer contributions
(including any allocation of forfeitures) based on estimated annual Compensation
by any Excess Amount carried over from prior years. As soon as is
administratively feasible after the end of the Limitation Year, the Advisory
Committee will determine the Maximum Permissible Amount for such Limitation Year
on the basis of the Participant's actual Compensation for such Limitation Year.
(B) DISPOSITION OF EXCESS AMOUNT. If, pursuant to Section 3.03(A), or because of
the allocation of forfeitures, there is an Excess Amount with respect to a
Participant in the Plan for a Limitation Year, the Advisory Committee will
dispose of such Excess Amount as follows:
(a) The Advisory Committee will return any nondeductible
voluntary Employee contributions to the Participant to the extent that
the return would reduce the Excess Amount.
(b) If, after the application of paragraph (a), an Excess
Amount still exists, and the Plan covers the Participant at the end of
the Limitation Year, then the Advisory Committee will use the Excess
Amount(s) to reduce future Employer contributions (including any
allocation of forfeitures) under the Plan for the next Limitation Year
and for each succeeding Limitation Year, as is necessary, for the
Participant.
(c) If, after the application of paragraph (a), an Excess
Amount still exists, and the Plan does not cover the Participant at the
end of the Limitation Year, then the Advisory Committee will hold the
Excess Amount unallocated in a suspense account. The Advisory Committee
will apply the suspense account to reduce Employer contributions
(including allocation of forfeitures) for all remaining Participants in
the Plan in the next Limitation Year, and in each succeeding Limitation
Year if necessary.
(d) The Advisory Committee will not distribute any Excess
Amount(s) to Participants or to former Participants.
(C) MORE THAN ONE PLAN. If the Advisory Committee allocated an Excess Amount to
a Participant's Account on an allocation date of the Plan which coincides with
an allocation date of another defined contribution plan maintained by DST, the
Advisory Committee will attribute the Excess Amount allocated as of such date
first to the DST Systems, Inc. Profit Sharing Plan. If an Excess Amount remains,
it will then be attributed to this Plan and then, if necessary, to the DST
Systems, Inc. 401(k) Plan.
(D) DEFINED BENEFIT PLAN LIMITATION. If the Participant presently participates,
or has ever participated, under a defined benefit plan maintained by DST, then
the sum of the defined benefit plan fraction and the defined contribution plan
fraction for the Participant for that Limitation Year must not exceed 1.0. To
the extent necessary to satisfy this limitation, DST will reduce the
Participant's annual benefit under the defined benefit plan under which the
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Participant participates and then, if necessary, its contribution or allocation
on behalf of the Participant to the defined contribution plan under which the
Participant participates.
3.04 DEFINITIONS. For purposes of Sections 3.01 through 3.04, the
following terms mean:
(a) "Annual Addition" - The sum of the following amounts
allocated in the Plan on behalf of a Participant for a Limitation Year:
(i) all contributions; (ii) all forfeitures; and (iii) all Employee
contributions. Except to the extent provided in Treasury Regulations,
Annual Additions include excess contributions described in Code
ss.401(k), excess aggregate contributions described in Code ss.401(m)
and excess deferrals described in Code ss.402(g), irrespective of
whether the plan distributes or forfeits such excess amounts. Annual
Additions also include Excess Amounts reapplied to reduce Employer
contributions under Section 3.03. Amounts allocated after March 31,
1984, to an individual medical account (as defined in Code
ss.415(l)(2)) included as part of a defined benefit plan maintained by
DST are Annual Additions. Furthermore, Annual Additions include
contributions paid or accrued after December 31, 1985, for taxable
years ending after December 31, 1985, attributable to post-retirement
medical benefits allocated to the separate account of a key employee
(as defined in Code ss.419A(d)(3)) under a welfare benefit fund (as
defined in Code ss.419(e)) maintained by DST, but only for purposes of
the dollar limitation applicable to the Maximum Permissible Amount.
"Annual Additions" do not include any Employer contributions
applied by the Advisory Committee (not later than the due date,
including extensions, for filing DST's Federal income tax return for
that Plan Year) to pay interest on an Exempt Loan, and any Leveraged
Employer Securities the Advisory Committee allocates as forfeitures;
provided, however, the provisions of this sentence do not apply in a
Plan Year for which the Advisory Committee allocates more than
one-third (1/3) of the Employer contributions applied to pay principal
and interest on an Exempt Loan to Restricted Participants. The Advisory
Committee may reallocate the Employer contributions in accordance with
Section 3.03 to the Accounts of non-Restricted Participants to the
extent necessary in order to satisfy this special limitation. For
purposes of this Section 3.03, "Restricted Participants" mean
Participants in the Plan who are Highly Compensated Employees within
the meaning of Code ss.414(q).
(b) "Employer" - DST and any related employers described in
Section 1.28. Solely for purposes of applying the limitations of
Section 3.03, the Advisory Committee will determine related employers
described in Section 1.28 by modifying Code ss.ss.414(b) and (c) in
accordance with Code ss.415(h).
(c) "Defined contribution plan" - A retirement plan which
provides for an individual account for each participant and for
benefits based solely on the amount contributed to the participant's
account, and any income, expenses, gains and losses, and
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any forfeitures of accounts of other participants which the plan may
allocate to such participant's account. The Advisory Committee must
treat all defined contribution plans (whether or not terminated)
maintained by DST as a single plan. For purposes of the limitations of
Section 3.03, the Advisory Committee will treat employee contributions
made to a defined benefit plan maintained by DST as a separate defined
contribution plan. The Advisory Committee also will treat as a defined
contribution plan an individual medical account (as defined in Code
ss.415(l)(2)) included as part of a defined benefit plan maintained by
DST and, for taxable years ending after December 31, 1985, a welfare
benefit fund under Code ss.419(e) maintained by DST to the extent there
are post-retirement medical benefits allocated to the separate account
of a key employee (as defined in Code ss.419A(d)(3)).
(d) "Defined benefit plan" - A retirement plan which does not
provide for individual accounts for Employer contributions. The
Advisory Committee must treat all defined benefit plans (whether or not
terminated) maintained by DST as a single plan.
(e) "Compensation" - For purposes of applying the limitations
of Section 3.03, "Compensation" means Compensation as defined in
Section 1.11, disregarding any exclusions from Compensation and
disregarding elective contributions for limitations years beginning
prior to January 1, 1998, but including Elective Contributions for
limitation years beginning after December 31, 1997.
(f) "Limitation Year" - The Plan Year. If DST amends the
Limitation Year to a different 12 consecutive month period, the new
Limitation Year must begin on a date within the Limitation Year for
which DST makes the amendment, creating a short Limitation Year.
3.05 DEFINITIONS. For purposes of Article III, the following terms
mean:
(a) "Maximum Permissible Amount" - The lesser of (i) $30,000
or (ii) 25% of the Participant's Compensation for the Limitation Year.
If there is a short Limitation Year because of a change in Limitation
Year, the Advisory Committee will multiply the $30,000 limitation by
the following fraction:
Number of months in the short Limitation Year
---------------------------------------------
12
(b) "Defined benefit plan fraction"
Projected annual benefit of the Participant under the
defined benefit plan(s)
------------------------------------------------------
The lesser of (i) 125% (subject to the "100% limitation"
in paragraph (d)) of the dollar limitation in effect
under Code ss.415(b)(1)(A) for the Limitation Year,
or (ii) 140% of the Participant's average Compensation
for his high 3 consecutive Years of Service
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To determine the denominator of this fraction, the Advisory
Committee will make any adjustment required under Code ss.415(b) and
will determine a Year of Service as a Plan Year in which the Employee
completed at least 1,000 Hours of Service. The "projected annual
benefit" is the annual retirement benefit (adjusted to an actuarially
equivalent straight life annuity if the plan expresses such benefit in
a form other than a straight life annuity or qualified joint and
survivor annuity) of the Participant under the terms of the defined
benefit plan on the assumptions he continues employment until his
normal retirement age (or current age, if later) as stated in the
defined benefit plan, his compensation continues at the same rate as in
effect in the Limitation Year under consideration until the date of his
normal retirement age and all other relevant factors used to determine
benefits under the defined benefit plan remain constant as of the
current Limitation Year for all future Limitation Years.
CURRENT ACCRUED BENEFIT. If the Participant accrued benefits
in one or more defined benefit plans maintained by an Employer which
were in existence on May 5, 1986, the dollar limitation used in the
denominator of this fraction will not be less than the Participant's
Current Accrued Benefit. A Participant's Current Accrued Benefit is the
sum of the annual benefits under such defined benefit plans which the
Participant had accrued as of the end of the 1986 Limitation Year (the
last Limitation Year beginning before January 1, 1987), determined
without regard to any change in the terms or conditions of the Plan
made after May 5, 1986, and without regard to any cost of living
adjustment occurring after May 5, 1986. This Current Accrued Benefit
rule applies only if the defined benefit plans individually and in the
aggregate satisfied the requirements of Code ss.415 as in effect at the
end of the 1986 Limitation Year.
(c) "Defined contribution plan fraction"
The sum, as of the close of the Limitation Year, of the
Annual Additions to the Participant's Account under the
defined contribution plan(s)
--------------------------------------------------------
The sum of the lesser of the following amounts determined
for the Limitation Year and for each prior Year of Service
with the Employer: (i) 125% (subject to the
"100% limitation" in paragraph (d)) of the dollar
limitation in effect under Code ss.415(c)(1)(A) for the
Limitation Year (determined without regard to the
special dollar limitations for employee stock ownership
plans), or (ii) 35% of the Participant's Compensation
for the Limitation Year
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For purposes of determining the defined contribution plan
fraction, the Advisory Committee will not recompute Annual Additions in
Limitation Years beginning prior to January 1, 1987, to treat all
Employee contributions as Annual Additions. If the Plan satisfied Code
ss.415 for Limitation Years beginning prior to January 1, 1987, the
Advisory Committee will redetermine the defined contribution plan
fraction and the defined benefit plan fraction as of the end of the
1986 Limitation Year, in accordance with this Section 3.05. If the sum
of the redetermined fractions exceeds 1.0, the Advisory Committee will
subtract permanently from the numerator of the defined contribution
plan fraction an amount equal to the product of (1) the excess of the
sum of the fractions over 1.0, times (2) the denominator of the defined
contribution plan fraction. In making the adjustment, the Advisory
Committee must disregard any accrued benefit under the defined benefit
plan which is in excess of the Current Accrued Benefit. This Plan
continues any transitional rules applicable to the determination of the
defined contribution plan fraction under the Employer's Plan as of the
end of the 1986 Limitation Year.
(d) "100% limitation." If the 100% limitation applies, the
Applicable Advisory Committee must determine the denominator of the
defined benefit plan fraction and the denominator of the defined
contribution plan fraction by substituting 100% for 125%. The 100%
limitation applies only if: (i) the Plan's top heavy ratio exceeds 90%;
or (ii) the Plan's top heavy ratio is greater than 60%, and the
Employer does not provide extra minimum benefits which satisfy Code
ss.416(h)(2).
(e) "Excess Amount" - The excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible Amount.
3.06 DETERMINATION OF CONTRIBUTION. Each Employer, from its
records, determines the amount of any contributions to be made by it to the
Trust under the terms of the Plan.
3.07 TIME OF PAYMENT OF CONTRIBUTION. An Employer may pay its
contribution for each Plan Year in one or more monthly installments without
interest. An Employer must make its contribution to the Trustee within the time
prescribed by the Code or applicable Treasury regulations.
3.08 FORFEITURE ALLOCATION. The amount of a Participant's Accrued
Benefit forfeited under the Plan is a Participant forfeiture. Subject to any
restoration allocation required under Sections 5.04 or 9.07, the Advisory
Committee will allocate the forfeiture in accordance with Section 3.02, as an
Employer contribution for the Plan Year in which the forfeiture occurs, as if
the Participant forfeiture were an additional Employer contribution for that
Plan Year. The Advisory Committee will continue to hold the undistributed,
non-vested portion of a terminated Participant's Accrued Benefit in his Account
solely for his benefit until a forfeiture occurs at the time specified in
Section 5.09. Except as provided under Section 5.04, a Participant will not
share in the allocation of a
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forfeiture of any portion of his Accrued Benefit. In making a forfeiture
allocation under this Section 3.08, the Advisory Committee will base forfeitures
of Employer Securities upon the fair market value of the Employer Securities as
of the Accounting Date of the forfeitures.
3.09 ACCRUAL OF BENEFIT. The Advisory Committee will determine the
accrual of benefit (Employer contributions and Participant forfeitures) on the
basis of the Plan Year.
(A) COMPENSATION TAKEN INTO ACCOUNT. In allocating an Employer contribution to a
Participant's account, the Advisory Committee, except for purposes of
determining the top heavy minimum contribution under Section 3.02(B), will take
into account only the Compensation determined for the portion of the Plan Year
in which the Employee actually is a Participant.
(B) HOURS OF SERVICE REQUIREMENT. Subject to the top heavy minimum allocation
requirement of Section 3.02(B), the Advisory Committee will not allocate any
portion of an Employer contribution for a Plan Year to any Participant's Account
if the Participant does not complete a minimum of 1,000 Hours of Service during
the Plan Year, unless the Participant terminates employment during the Plan Year
because of death or disability or because of the attainment of Normal Retirement
Age in the current Plan Year or in a prior Plan Year.
(C) EMPLOYMENT REQUIREMENT. A Participant who, during a particular Plan Year,
completes the Hours of Service requirement under this Section 3.09 will share in
the allocation of Employer contributions and Participant forfeitures without
regard to whether he is employed by an Employer on the last day of that Plan
Year.
ARTICLE IV.
PARTICIPANT CONTRIBUTIONS
4.01 PARTICIPANT VOLUNTARY CONTRIBUTIONS. The Plan does not permit or
require Participant contributions.
4.02 PARTICIPANT ROLLOVER CONTRIBUTIONS. The Plan does not permit
Participant rollover contributions.
ARTICLE V.
TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 NORMAL RETIREMENT AGE. A Participant's Normal Retirement Age is 65
years of age. A Participant who remains in the employ of an Employer after
attaining Normal Retirement Age will continue to participate in Employer
contributions. A Participant's Accrued Benefit derived from Employer
contributions is 100% Nonforfeitable upon and after his attaining Normal
Retirement Age (if employed by an Employer on or after that date).
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5.02 PARTICIPANT DISABILITY OR DEATH. If a Participant's employment
with an Employer terminates as a result of death or disability, the
Participant's Accrued Benefit derived from Employer contributions will be 100%
Nonforfeitable.
5.03 VESTING SCHEDULE. Except as provided in Sections 5.01 and 5.02,
for each Year of Service, a Participant's Nonforfeitable percentage of his
Accrued Benefit derived from Employer contributions equals the percentage in the
following vesting schedule:
Percent of
Years of Service Nonforfeitable
With the Employer Accrued Benefit
----------------- ---------------
Less than 5 None
5 or more 100%
For any Plan Year in which the Plan is a top heavy Plan (as defined in
Section 1.30) the Advisory Committees will calculate a Participant's
Nonforfeitable percentage of his Accrued Benefit under the following schedule:
Percent of
Year of Service Nonforfeitable
With the Employer Accrued Benefit
----------------- ---------------
Less than 2 None
2 20%
3 40%
4 60%
5 80%
6 or more 100%
The Advisory Committee will apply the top heavy schedule to
Participants who earn at least one Hour of Service after the top heavy schedule
becomes effective. A shift between vesting schedules under this Section 5.03 is
an amendment to the vesting schedule and the Advisory Committee must apply the
rules of Section 7.04 accordingly. A shift to a new vesting schedule under this
Section 5.03 is effective on the first day of the Plan Year for which the top
heavy status of the Plan changes.
5.04 CASH-OUT DISTRIBUTION TO PARTIALLY-VESTED
PARTICIPANTS/RESTORATION OF FORFEITED ACCRUED BENEFIT. If, pursuant to
Article VI, a partially-vested Participant receives a cash-out distribution from
the Plan before he incurs a Forfeiture Break in Service (as defined in Section
5.08), the cash-out distribution will result in an immediate forfeiture of the
non-vested portion of the Participant's Accrued
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Benefit derived from Employer contributions in the Plan. See Section 5.09. A
partially- vested Participant is a Participant whose Nonforfeitable Percentage
determined under Section 5.03 is less than 100%. A cash-out distribution is a
distribution of the entire present value of the Participant's Nonforfeitable
Accrued Benefit.
(A) RESTORATION AND CONDITIONS UPON RESTORATION. A partially vested Participant
who is reemployed by an Employer after receiving a cash-out distribution of the
Nonforfeitable percentage of his Accrued Benefit shall have a right to
restoration under the requirements of this Section 5.04.
The Advisory Committee, subject to the conditions of this paragraph
(A), must restore the Accrued Benefit of such Participant attributable to
Employer contributions in the Plan to the same dollar amount as the dollar
amount of his Accrued Benefit on the Accounting Date, or other valuation date,
immediately preceding the date of the cash-out distribution, unadjusted for any
gains or losses occurring subsequent to that Accounting Date, or other valuation
date. Restoration of the Participant's Accrued Benefit includes restoration of
all Code ss.411(d)(6) protected benefits with respect to that restored Accrued
Benefit, in accordance with applicable Treasury regulations.
The Advisory Committee, subject to the conditions of this paragraph
(A), must restore the Accrued Benefit of such Participant attributable to
Employer contributions in the Former Plan to the same dollar amount as the
dollar amount of his Accrued Benefit on the Accounting Date, or other valuation
date, immediately preceding the date of the cash-out distribution, unadjusted
for any gains or losses occurring subsequent to that Accounting Date, or other
valuation date. Restoration of the Participant's Accrued Benefit includes
restoration of all Code ss.411(d)(6) protected benefits with respect to that
restored Accrued Benefit, in accordance with applicable Treasury regulations.
The Advisory Committee will not restore a reemployed Participant's
Accrued Benefit under this paragraph if:
(1) 5 years have elapsed since the Participant's
first reemployment date following the cash-out distribution; or
(2) The Participant incurred a Forfeiture Break in
Service (as defined in Section 5.08).
(B) TIME AND METHOD OF RESTORATION. If neither of the two conditions preventing
restoration of the Participant's Accrued Benefit applies, the Advisory Committee
will restore the Participant's Accrued Benefit as of the Plan Year Accounting
Date coincident with or immediately following the reemployment. To restore the
Participant's Accrued Benefit, the Advisory Committee, to the extent necessary,
will allocate to the Participant's Account:
(1) First, the amount, if any, of Participant
forfeitures the Advisory Committee would otherwise allocate under
Section 3.08;
-24-
(2) Second, the amount, if any, of the net income or
gain for the Plan for the Plan Year; and
(3) Third, the Employer contribution for the Plan
Year to the extent made under a discretionary formula.
To the extent the amounts described in clauses (1), (2) and (3) are
insufficient to enable the Advisory Committee to make any required restoration,
DST must contribute, without regard to any requirement or condition of Section
3.01, the additional amount necessary to enable the Advisory Committee to make
the required restoration. If, for a particular Plan Year, the Advisory Committee
must restore the Accrued Benefit of more than one reemployed Participant, then
the Advisory Committee will make the restoration allocation(s) to each such
Participant's Account in the same proportion that a Participant's restored
amount for the Plan Year bears to the restored amount for the Plan Year of all
reemployed Participants in the Plan. The Advisory Committee will not take into
account the allocation under this Section 5.04 in applying the limitation on
allocations under Section 3.03.
(C) 0% VESTED PARTICIPANT. The deemed cash-out rule applies to a 0% vested
Participant. A 0% vested Participant is a Participant whose Accrued Benefit
derived from Employer contributions is entirely forfeitable at the time of his
Separation from Service. Under the deemed cash-out rule, the Advisory Committee
will treat a 0% vested Participant as having received a cash-out distribution on
the first day of the Plan Year immediately following the Plan Year in which he
separates from Service.
5.05 [RESERVED].
5.06 YEAR OF SERVICE - VESTING. For purposes of vesting under Section
5.03, Year of Service means any Plan Year during which an Employee completes not
less than 1,000 Hours of Service, including Plan Years prior to the Effective
Date of the Plan.
5.07 BREAK IN SERVICE - VESTING. For purposes of this Article V, a
Participant incurs a "Break in Service" if during any Plan Year he does not
complete more than 500 Hours of Service.
5.08 INCLUDED YEARS OF SERVICE - VESTING. For purposes of determining
"Years of Service" under Section 5.06, the Plan takes into account all Years of
Service an Employee completes with an Employer. For the sole purpose of
determining a Participant's Nonforfeitable percentage of his Accrued Benefit
derived from Employer contributions which accrued for his benefit prior to a
Forfeiture Break in Service, the Plan disregards any Year of Service after the
Participant first incurs a Forfeiture Break in Service. The Participant incurs a
Forfeiture Break in Service when he incurs 5 consecutive Breaks in Service.
-25-
5.09 FORFEITURE OCCURS. A Participant's forfeiture, if any, of his
Accrued Benefit derived from Employer contributions occurs under the Plan on the
earlier of:
(a) The last day of the Plan Year in which the Participant
first incurs a Forfeiture Break in Service; or
(b) The last day of the Plan Year in which the Participant
receives a cash-out distribution.
The Advisory Committee determines the percentage of a Participant's
forfeiture, if any, under this Section 5.09 solely by reference to the vesting
schedule of Section 5.03. A Participant will not forfeit any portion of his
Accrued Benefit for any other reason or cause except as expressly provided by
this Section 5.09 or as provided under Section 9.07. Employer Securities
allocated to the Participant's Account under Section 9.06 of the Plan must be
forfeited only after other assets.
ARTICLE VI.
TIME AND METHOD OF PAYMENT OF BENEFITS
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT. Unless, pursuant to
Section 6.03, the Participant or the Beneficiary elects in writing to a
different time or method of payment, the Advisory Committee will direct the
Trustee to commence distribution of a Participant's Nonforfeitable Accrued
Benefit in accordance with this Section 6.01. A Participant must consent, in
writing, to any distribution required under this Section 6.01 if the present
value of the Participant's Nonforfeitable Accrued Benefit, at the time of the
distribution to the Participant, exceeds $5,000 and the Participant has not
attained the later of Normal Retirement Age or age 62. For all purposes of this
Article VI, the term "annuity starting date" means the first day of the first
period for which the Plan pays an amount as an annuity or in any other form. A
distribution date under this Article VI, unless otherwise specified within the
Plan, is the last day of each Plan Year or as soon as administratively
practicable following such last day of the Plan Year. For purposes of the
consent requirements under this Article VI, if the present value of the
Participant's Nonforfeitable Accrued Benefit, at the time of any distribution,
exceeds $5,000, the Advisory Committee must treat that present value as
exceeding $5,000 for purposes of all subsequent Plan distributions to the
Participant.
(A) TERMINATION OF EMPLOYMENT FOR A REASON OTHER THAN DEATH. For a Participant
who terminates employment with the Employer for a reason other than death, the
Advisory Committee will direct the Trustee to commence distribution of the
Participant's Accrued Benefit, as follows:
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(1) PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT NOT EXCEEDING
$5,000.
In a lump sum, on the first distribution date after the close of the
Plan Year in which the Participant's Separation from Service occurs,
but in no event later than sixty (60) days after the latest of the
close of the Plan Year in which (a) the Participant attains age
sixty-five (65), (b) occurs the tenth (10th) anniversary of the date on
which the Participant commenced participation in the Plan, and (c) the
Participant had a Separation from Service; or as soon thereafter as the
amount of the payment can be ascertained, in which event the
distribution shall be retroactive to such date. In the case of a
Participant who separates from Service between January 1, and September
30, and who has attained age 55 on or before the date of his Separation
from Service, the Participant may elect to have the Trustee commence
distribution as of the 30th day after the end of the calendar quarter
in which his Separation from Service occurs, or as soon as
administratively practicable thereafter If a Participant incurred a
Separation from Service (under this Plan or the Former Plan) before
January 1, 1998 with a nonforfeitable Accrued Benefit of more than
$3,500 but not more than $5,000, and has not otherwise made a
distribution election under subsection (2) below and Section 6.03,
distribution to the Participant shall be made under this subsection (1)
as soon as practicable after January 1, 1998.
(2) PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT EXCEEDS
$5,000. In a form and at the time elected by the Participant, pursuant
to Section 6.03. In the absence of an election by the Participant, the
Advisory Committee will direct the Trustee to distribute the
Participant's Nonforfeitable Accrued Benefit in a lump sum not later
than sixty (60) days after the latest of the close of the Plan Year in
which (a) the Participant attains age sixty-five (65), (b) occurs the
tenth (10th) anniversary of the date on which the Participant commenced
participation in the Plan, and (c) the Participant had a Separation
from Service or as soon thereafter as the amount of the payment can be
ascertained in which event the distribution shall be retroactive to
such date.
(3) DISABILITY. If the Participant terminates employment
because of disability, in a form and at the time elected by the
Participant, pursuant to Section 6.03. In the absence of an election by
the Participant, the Advisory Committee will direct the Trustee to
distribute the Participant's Nonforfeitable Accrued Benefit in a lump
sum, on the first distribution date after the close of the Plan Year in
which the Participant terminates employment because of disability,
subject to the notice and consent requirements of this Article VI and
to the applicable mandatory commencement dates described in Paragraph
(1) or in Paragraph (2).
(B) REQUIRED BEGINNING DATE. If any distribution commencement date described
under Paragraph (A) of this Section 6.01, either by Plan provision or by
Participant election (or non-election), is later than the Participant's Required
Beginning Date, the Advisory Committee instead must direct the Trustee to make
distribution under this Section 6.01 on the Participant's Required Beginning
Date. A Participant's Required Beginning Date is the April 1 of the calendar
year following the later of (i) the calendar year in which the Participant
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attains age 70-1/2 or (ii) the calendar year in which the Participant separates
from Service. However, clause (ii) of the preceding sentence shall not apply if
the Participant is a 5% owner (as defined in Section 1.07(a)) with respect to
the Plan Year ending in the calendar year in which he attains age 70-1/2). If
the Participant attains age 70-1/2 prior to January 1, 1999, the Participant may
elect by written notice to the Plan Administrator not to have clause (ii) of the
preceding sentence apply. A mandatory distribution at the Participant's Required
Beginning Date will be in lump sum unless the Participant, pursuant to the
provisions of this Article VI, makes a valid election to receive an alternative
form of payment.
(C) DEATH OF THE PARTICIPANT. The Advisory Committee will direct the Trustee, in
accordance with this Section 6.01(C), to distribute to the Participant's
Beneficiary the Participant's Nonforfeitable Accrued Benefit remaining in the
Trust at the time of the Participant's death. The Advisory Committee will
determine the death benefit by reducing the Participant's Nonforfeitable Accrued
Benefit by any security interest the Plan has against that Nonforfeitable
Accrued Benefit by reason of an outstanding Participant loan.
(1) DECEASED PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT DOES
NOT EXCEED $5,000. The Advisory Committee must direct the Trustee to
pay the deceased Participant's Nonforfeitable Accrued Benefit in a
single cash sum, as soon as administratively practicable following the
Participant's death or, if later, the date on which the Advisory
Committee receives notification of or otherwise confirms the
Participant's death.
(2) DECEASED PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT
EXCEEDS $5,000. The Advisory Committee will direct the Trustee to pay
the deceased Participant's Nonforfeitable Accrued Benefit at the time
and in the form elected by the Participant or, if applicable by the
Beneficiary, as permitted under this Article VI. In the absence of an
election, the Advisory Committee will direct the Trustee to distribute
the Participant's undistributed Nonforfeitable Accrued Benefit in a
lump sum on the first distribution date following the close of the Plan
Year in which the Participant's death occurs or, if later, the first
distribution date following the date the Advisory Committee receives
notification of or otherwise confirms the Participant's death.
If the death benefit is payable to the Participant's surviving spouse
in full, the surviving spouse, in addition to the distribution options provided
in this Section 6.01(C), may elect distribution at any time or in any form this
Article VI would permit for a Participant.
6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. Subject to any
restrictions prescribed by Section 6.03, a Participant or Beneficiary may elect
distribution under one, or any combination, of the following methods: (a) by
payment in a lump sum; or (b) by payment in monthly, quarterly or annual
installments over a fixed reasonable period of time, not exceeding the life
expectancy of the Participant, or the joint life and last survivor expectancy of
the Participant and his Beneficiary.
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The distribution options permitted under this Section 6.02 are
available only if the present value of the Participant's Nonforfeitable Accrued
Benefit, at the time of the distribution to the Participant, exceeds $5,000.
Under an installment distribution, the Participant or Beneficiary, at any time,
may elect to accelerate the payment of all, or any portion, of the Participant's
unpaid Nonforfeitable Accrued Benefit.
(A) MINIMUM DISTRIBUTION REQUIREMENTS FOR PARTICIPANTS. The Advisory Committee
may not direct the Trustee to distribute the Participant's Nonforfeitable
Accrued Benefit, nor may the Participant elect to have the Trustee distribute
his Nonforfeitable Accrued Benefit, under a method of payment which, as of the
Required Beginning Date, does not satisfy the minimum distribution requirements
under Code ss.401(a)(9) and the applicable Treasury regulations.
The minimum distribution for a calendar year for a Participant in the
Plan equals the Participant's Nonforfeitable Accrued Benefit in the Plan as of
the latest valuation date preceding the beginning of the calendar year divided
by the Participant's life expectancy or, if applicable, the joint and last
survivor expectancy of the Participant and his designated Beneficiary (as
determined under Article VIII, subject to the requirements of the Code
ss.401(a)(9) regulations). The Advisory Committee will increase the
Participant's Nonforfeitable Accrued Benefit in the Plan, as determined on the
relevant valuation date, for contributions or forfeitures allocated after the
valuation date and by December 31 of the valuation calendar year, and will
decrease the valuation by distributions made after the valuation date and by
December 31 of the valuation calendar year. For purposes of this valuation, the
Advisory Committee will treat any portion of the minimum distribution for the
first distribution calendar year made after the close of that year as a
distribution occurring in that first distribution calendar year. In computing a
minimum distribution, the Advisory Committee must use the unisex life expectancy
multiples under Treas. Reg. ss.1.72-9. The Advisory Committee, only upon the
Participant's written request, may compute the minimum distribution for a
calendar year subsequent to the first calendar year for which the Plan requires
a minimum distribution by redetermining the applicable life expectancy. However,
the Advisory Committee may not redetermine the joint life and last survivor
expectancy of the Participant and a non-spouse designated Beneficiary in a
manner which takes into account any adjustment to a life expectancy other than
the Participant's life expectancy.
If the Participant's spouse is not his designated Beneficiary, a method
of payment to the Participant (whether by Participant election or by Advisory
Committee direction) may not provide more than incidental benefits to the
Beneficiary. For Plan Years beginning after December 31, 1988, the Plan must
satisfy the minimum distribution incidental benefit ("MDIB") requirement in the
Treasury regulations issued under Code ss.401(a)(9) for distributions made on or
after the Participant's Required Beginning Date and before the Participant's
death. To satisfy the MDIB requirement, the Advisory Committee will compute the
minimum distribution required by this Section 6.02(A) by substituting the
applicable MDIB divisor for the applicable life expectancy factor, if the MDIB
divisor is a lesser number. Following the Participant's death, the Advisory
Committee will compute the
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minimum distribution required by this Section 6.02(A) solely on the basis of the
applicable life expectancy factor and will disregard the MDIB factor. For Plan
Years beginning prior to January 1, 1989, the Plan satisfies the incidental
benefits requirement if the distributions to the Participant satisfied the MDIB
requirement or if the present value of the retirement benefits payable solely to
the Participant is greater than 50% of the present value of the total benefits
payable to the Participant and his Beneficiaries. The Advisory Committee must
determine whether benefits to the Beneficiary are incidental as of the date the
Trustee is to commence payment of the retirement benefits to the Participant, or
as of any date the Trustee redetermines the payment period to the Participant.
The minimum distribution for the first distribution calendar year is
due by the Participant's Required Beginning Date. The minimum distribution for
each subsequent distribution calendar year, including the calendar year in which
the Participant's Required Beginning Date falls, is due by December 31 of that
year. If the Participant receives distribution in the form of a Nontransferable
Annuity Contract, the distribution satisfies this Section 6.02(A) if the
contract complies with the requirements of Code ss.401(a)(9) and the applicable
Treasury regulations.
(B) MINIMUM DISTRIBUTION REQUIREMENTS FOR BENEFICIARIES. The method of
distribution to the Participant's Beneficiary must satisfy Code ss.401(a)(9) and
the applicable Treasury regulations. If the Participant's death occurs after his
Required Beginning Date, the method of payment to the Beneficiary must provide
for completion of payment over a period which does not exceed the payment period
which had commenced for the Participant. If the Participant's death occurs prior
to his Required Beginning Date, the method of payment to the Beneficiary, must
provide for completion of payment to the Beneficiary over a period not
exceeding: (i) 5 years after the date of the Participant's death; or (ii) if the
Beneficiary is a designated Beneficiary, the designated Beneficiary's life
expectancy.
The Advisory Committee may not direct payment of a Participant's
Nonforfeitable Accrued Benefit in the Plan over a period described in clause
(ii) above unless the Trustee will commence payment to the designated
Beneficiary no later than the December 31 following the close of the calendar
year in which the Participant's death occurred or, if later, and the designated
Beneficiary is the Participant's surviving spouse, December 31 of the calendar
year in which the Participant would have attained age 70-1/2. If the Trustee
will make distribution in accordance with clause (ii), the minimum distribution
for a calendar year equals the Participant's Nonforfeitable Accrued Benefit in
the Plan as of the latest valuation date preceding the beginning of the calendar
year divided by the designated Beneficiary's life expectancy.
The Advisory Committee must use the unisex life expectancy multiples
under Treas. Reg. ss.1.72-9 for purposes of applying this Section 6.02(B). The
Advisory Committee, only upon the written request of the Participant or of the
Participant's surviving spouse, may recalculate the life expectancy of the
Participant's surviving spouse not more frequently than annually, but may not
recalculate the life expectancy of a non-spouse designated Beneficiary
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after the Trustee commences payment to the designated Beneficiary. The Advisory
Committee will apply this Section 6.02(B) by treating any amount paid to the
Participant's child, which becomes payable to the Participant's surviving spouse
upon the child's attaining the age of majority, as paid to the Participant's
surviving spouse. Upon the Beneficiary's written request, the Advisory Committee
must direct the Trustee to accelerate payment of all, or any portion, of the
Participant's unpaid Accrued Benefit, as soon as administratively practicable
following the effective date of that request.
6.03 BENEFIT PAYMENT ELECTIONS. Not earlier than ninety (90) days
before nor later than thirty (30) days before the Participant's annuity starting
date, the Plan Administrator must provide a benefit notice to a Participant who
is eligible to make an election under this Section 6.03. The benefit notice must
explain the optional forms of benefit in the Plan, including the material
features and relative values of those options, and the Participant's right to
defer distribution until he attains the later of Normal Retirement Age or age
62.
A distribution may commence less than 30 days after the benefit notice
is given, provided that:
(1) the Plan Administrator clearly informs the Participant
that the Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution
option), and
(2) the Participant, after receiving the notice, affirmatively
elects a distribution.
If a Participant or Beneficiary makes an election prescribed by this
Section 6.03, the Advisory Committee will direct the Trustee to distribute the
Participant's Nonforfeitable Accrued Benefit in accordance with that election.
Any election under this Section 6.03 is subject to the requirements of Section
6.02. The Participant or Beneficiary must make an election under this Section
6.03 by filing his election form with the Applicable Advisory Committee at any
time before the Trustee otherwise would commence to pay a Participant's Accrued
Benefit in accordance with the requirements of Article VI.
(A) PARTICIPANT ELECTIONS AFTER TERMINATION OF EMPLOYMENT. If the present value
of a Participant's Nonforfeitable Accrued Benefit exceeds $5,000, he may elect
to have the Trustee commence distribution as of any distribution date, but not
earlier than the first distribution date at the close of the Plan Year in which
the Participant's Separation from Service occurs. The Participant may reconsider
an election at any time prior to the annuity starting date and elect to commence
distribution as of any other distribution date, but not earlier than the date
described in the first sentence of this Section 6.03(A). In the case of a
Participant who separates from Service between January 1 and September 30, and
who has attained age 55 on or before the date of his Separation from Service,
the Participant, in
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addition to the benefit payment elections provided for in the first two
sentences of this Section 6.03(A), shall have the right to elect to have the
Trustee commence distribution as of the 30th day after the end of the calendar
quarter in which his Separation from Service occurs, or as soon as
administratively practicable thereafter. A Participant who has separated from
Service may elect distribution as of any distribution date following his
attainment of Normal Retirement Age, irrespective of the restrictions otherwise
applicable under this Section 6.03(A). If the Participant is partially vested in
his Accrued Benefit, an election under this Section 6.03(A) to distribute prior
to the Participant's incurring a Forfeiture Break in Service (as defined in
Section 5.08), must be in the form of a cash-out distribution (as defined in
Article V). A Participant may not receive a cash-out distribution if, prior to
the time the Trustee actually makes the cash-out distribution, the Participant
returns to employment with an Employer.
(B) PARTICIPANT ELECTIONS PRIOR TO TERMINATION OF EMPLOYMENT. After a
Participant (1) attains Normal Retirement Age or (2) attains 59-1/2 and has at
least five years of Participation in the Plan (including the Former Plan), the
Participant, until he retires, has a continuing election to receive all or any
portion of his Nonforfeitable Accrued Benefit. A Participant must make an
election under this Section 6.03(B) on a form prescribed by the Advisory
Committee at any time during the Plan Year for which his election is to be
effective. In his written election, the Participant must specify the percentage
or dollar amount he wishes the Trustee to distribute to him. The Participant's
election relates solely to the percentage or dollar amount specified in his
election form and his right to elect to receive an amount, if any, for a
particular Plan Year greater than the dollar amount or percentage specified in
his election form terminates on the Accounting Date. The Trustee must make a
distribution to a Participant in accordance with his election under this Section
6.03(B) within the 90-day period (or as soon as administratively practicable)
after the distribution date next following the date the Participant files his
written election with the Trustee. The Trustee will distribute the balance of
the Participant's Nonforfeitable Accrued Benefit not distributed pursuant to
this election(s) in accordance with the other distribution provision of this
Plan.
(C) DEATH BENEFIT ELECTIONS. If the present value of the deceased Participant's
Nonforfeitable Accrued Benefit exceeds $5,000, the Participant's Beneficiary may
elect to have the Trustee distribute the Participant's Nonforfeitable Accrued
Benefit in a form and within a period permitted under Section 6.02. The
Beneficiary's election is subject to any restrictions designated in writing by
the Participant and not revoked as of his date of death.
6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS. The joint and survivor
annuity requirements of the Code do not apply to this Plan. The Plan does not
provide any annuity distributions to Participants. A transfer agreement
described in Section 13.05 may not permit a plan which is subject to the
provisions of Code ss.417 to transfer assets to this Plan.
6.05 SPECIAL DISTRIBUTION AND PAYMENT REQUIREMENTS. Unless the
Participant elects in writing to have the Trustee apply other distribution
provisions of the
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Plan, or unless other distribution provisions of the Plan require earlier
distribution of the Participant's Accrued Benefit, the Trustee must distribute
the Participant's vested Accrued Benefit (the "Eligible Portion") no later than
the time prescribed by this Section 6.05, irrespective of any other provision of
the Plan. The distribution provisions of this Section 6.05 are subject to the
consent and form of distribution requirements of Articles V and VI of the Plan.
(a) If the Participant separates from Service by reason of the
attainment of Normal Retirement Age, death, or disability, the Advisory
Committee will direct the Trustee to commence distribution of the
Participant's Eligible Portion not later than one year after the close
of the Plan Year in which that event occurs.
(b) If the Participant separates from Service for any reason
other than by reason of the attainment of Normal Retirement Age, death
or disability, the Advisory Committee will direct the Trustee to
commence distribution of the Participant's Eligible Portion not later
than one year after the close of the fifth Plan Year following the Plan
Year in which the Participant separates from Service. If the
Participant resumes employment with an Employer on or before the last
day of the fifth Plan Year following the Plan Year of his Separation
from Service, the distribution provisions of this paragraph (b) do not
apply.
For purposes of this Section 6.05, Eligible Portion does not include
any Employer Securities acquired with the proceeds of an Exempt Loan until the
close of the Plan Year in which the borrower repays the Exempt Loan in full.
Notwithstanding anything else in this Plan, unless the Participant
otherwise elects, the distribution of the Participant's Accrued Benefit will be
in substantially equal periodic payment (not less frequently than annually) over
a period not longer than the greater of:
(a) Five years, or
(b) In the case of a Participant with an Accrued Benefit in excess of
Five Hundred Thousand Dollars ($500,000) (or beginning January 1, 1990,
such larger amount as the Commissioner of Internal Revenue shall
prescribe), five (5) years plus one (1) additional year (not more than
five (5) additional years) for each One Hundred Thousand Dollars
($100,000) (or beginning January 1, 1990, such larger amount as the
Commissioner of Internal Revenue shall prescribe) or fraction thereof
by which such balance exceeds $500,000.
The foregoing provisions of this paragraph shall not be construed so as to
preclude the distribution of a Participant's Accrued Benefit in the form of a
single lump-sum payment.
6.06 [Reserved]
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6.07 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS. Nothing contained
in this Plan prevents the Trustee, in accordance with the direction of the
Advisory Committee, from complying with the provisions of a qualified domestic
relations order (as defined in Code ss.414(p)). This Plan specifically permits
distribution to an alternate payee under a qualified domestic relations order as
of March 31, April 30, July 30 or October 30 of any Plan Year, irrespective of
whether the Participant has attained his earliest retirement age (as defined
under Code ss.414(p)) under the Plan. A distribution to an alternate payee prior
to the Participant's attainment of earliest retirement age is available only if:
(1) the order specifies distribution at that time or permits an agreement
between the Plan and the alternate payee to authorize an earlier distribution;
and (2) if the present value of the alternate payee's benefits under the Plan
exceeds $5,000, and the order requires and the alternate payee consents to any
distribution occurring prior to the Participant's attainment of earliest
retirement age. Nothing in this Section 6.07 permits a Participant a right to
receive distribution at a time otherwise not permitted under the Plan nor does
it permit the alternate payee to receive a form of payment not permitted under
the Plan.
The Plan Administrator must establish reasonable procedures to
determine the qualified status of a domestic relations order. Upon receiving a
domestic relations order, the Plan Administrator promptly will notify the
Participant and any alternate payee named in the order, in writing, of the
receipt of the order and the Plan's procedures for determining the qualified
status of the order. Within a reasonable period of time after receiving the
domestic relations order, the Plan Administrator must determine the qualified
status of the order and must notify the Participant and each alternate payee, in
writing, of its determination. The Plan Administrator must provide notice under
this paragraph by mailing to the individual's address specified in the domestic
relations order, or in a manner consistent with Department of Labor regulations.
A qualified domestic relations order under the Former Plan with respect to the
Accrued Benefit of a DST Participant shall be treated as a qualified domestic
relations order under this Plan.
If any portion of the Participant's Nonforfeitable Accrued Benefit is
payable during the period the Plan Administrator is making its determination of
the qualified status of the domestic relations order, the Advisory Committee
must make a separate accounting of the amounts payable. If the Plan
Administrator determines the order is a qualified domestic relations order
within 18 months of the date amounts first are payable following receipt of the
order, the Advisory Committee will direct the Trustee to distribute the payable
amounts in accordance with the order. If the Plan Administrator does not make
its determination of the qualified status of the order within the 18-month
determination period, the Advisory Committee will direct the Trustee to
distribute the payable amounts in the manner the Plan would distribute if the
order did not exist and will apply the order prospectively if the Plan
Administrator later determines the order is a qualified domestic relations
order.
To the extent it is not inconsistent with the provisions of the
qualified domestic relations order, the Advisory Committee may direct the
Trustee to invest any partitioned amount in a segregated subaccount or separate
account and to invest the account in Federally
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insured, interest-bearing savings account(s) or time deposit(s) (or a
combination of both), or in other fixed income investments. A segregated
subaccount remains a part of the Trust, but it alone shares in any income it
earns, and it alone bears any expense or loss it incurs. The Trustee will make
any payments or distributions required under this Section 6.07 by separate
benefit checks or other separate distribution to the alternate payee(s).
6.08 ROLLOVER DISTRIBUTIONS. Notwithstanding any provision of the Plan
to the contrary that would otherwise limit a distributee's election under this
Section 6.08, a distributee may elect, at the time and in the manner prescribed
by the Plan Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover. For purposes of this Section 6.08, the
following definitions shall apply.
(A) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the balance
to the credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a series
of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee and
the distributee's designated beneficiary, or for a specified period of
ten years or more; any distribution to the extent such distribution is
required under Code ss.401(a)(9); and the portion of any distribution
that is not includible in gross income (determined without regard to
the exclusion for net unrealized appreciation with respect to employer
securities).
(B) Eligible retirement plan: An eligible retirement plan is
an individual retirement account described in Code ss.408(a), an
individual retirement annuity described in Code ss.408(b), an annuity
plan described in Code ss.403(a), or a qualified trust described in
Code ss.401(a), that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover distribution
to the surviving spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
(C) Distributee: A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving
spouse and the Employee's or former Employee's spouse or former spouse
who is the alternate payee under a qualified domestic relations order,
as defined in section 414(p) of the Code, are distributees with regard
to the interest of the spouse or former spouse.
(D) Direct rollover: A direct rollover is a payment by the
plan to eligible retirement plan specified by the distributee.
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ARTICLE VII.
EMPLOYER ADMINISTRATIVE PROVISIONS
7.01 INFORMATION TO COMMITTEE. DST must supply current information to
the Advisory Committee as to the name, date of birth, date of employment, annual
compensation, leaves of absence, Years of Service and date of termination of
employment of each Employee who is, or who will be eligible to become, a
Participant under the Plan, together with any other information which the
Advisory Committee considers necessary. DST's records as to the current
information DST furnishes to the Advisory Committee are conclusive as to all
persons.
7.02 NO LIABILITY. No Employer assumes any obligation or responsibility
to any of its Employees, Participants or Beneficiaries for any act of, or
failure to act, on the part of the Advisory Committee (unless the Employer is
the Advisory Committee), the Trustee or the Plan Administrator (unless the
Employer is the Plan Administrator).
7.03 INDEMNITY OF COMMITTEE. DST Systems, Inc. indemnifies and saves
harmless the Plan Administrator and the members of the Advisory Committee, and
each of them, from and against any and all loss resulting from liability to
which the Plan Administrator and the Advisory Committee, or the members of the
Advisory Committee, may be subjected by reason of any act or conduct (except
willful misconduct or gross negligence) in their official capacities in the
administration of this Trust or Plan or both, including all expenses reasonably
incurred in their defense, in case DST Systems, Inc. fails to provide such
defense. The indemnification provisions of this Section 7.03 do not relieve the
Plan Administrator or any member of the Advisory Committee from any liability he
may have under ERISA for breach of a fiduciary duty. Furthermore, the Plan
Administrator and the members of the Advisory Committee and DST Systems, Inc.
may execute a letter agreement further delineating the indemnification agreement
of this paragraph, provided the agreement must be consistent with and must not
violate ERISA. The indemnification provisions of this paragraph extend to the
Trustee solely to the extent provided by a letter agreement executed by the
Trustee and DST Systems, Inc.
7.04 AMENDMENT TO VESTING SCHEDULE. Though DST Systems, Inc. reserves
the right to amend the vesting schedule of the Plan at any time, the Advisory
Committee will not apply the amended vesting schedule to reduce the
Nonforfeitable percentage of any Participant's Accrued Benefit derived from
Employer contributions (determined as of the later of the date the amendment is
adopted, or the date the amendment becomes effective) to a percentage less than
the Nonforfeitable percentage computed under the Plan prior to the amendment.
If an Employer makes a permissible amendment to the vesting schedule,
each Participant having at least 3 Years of Service with an Employer may elect
to have the percentage of his Nonforfeitable Accrued Benefit computed under the
Plan without regard to the amendment. The Participant must file his election
with the Plan Administrator within
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sixty (60) days of the latest of (a) the adoption of the amendment; (b) the
effective date of the amendment; or (c) his receipt of a copy of the amendment.
The Plan Administrator, as soon as practicable, must forward a true copy of any
amendment to the vesting schedule to each affected Participant, together with an
explanation of the effect of the amendment, the appropriate form upon which the
Participant may make an election to remain under the vesting schedule provided
under the Plan prior to the amendment and notice of the time within which the
Participant must make an election to remain under the prior vesting schedule.
For purposes of this Section 7.04, an amendment to the vesting schedule includes
any Plan amendment which directly or indirectly affects the computation of the
Nonforfeitable percentage of an Employee's rights to his Employer derived
Accrued Benefit.
ARTICLE VIII.
PARTICIPANT ADMINISTRATIVE PROVISIONS
8.01 BENEFICIARY DESIGNATION. Any Participant may from time to time
designate, in writing, any person or persons, contingently or successively, to
whom the Trustee will pay his Accrued Benefit in the event of his death and the
Participant may designate the form and method of payment. The Advisory Committee
will prescribe the form for the written designation of Beneficiary and, upon the
Participant's filing the form with the Advisory Committee, the form effectively
revokes all designations filed prior to that date by the same Participant. A
Beneficiary designation valid under the Former Plan by a DST Participant shall
be effective under this Plan until changed by the Participant in accordance with
this Section.
A married Participant's Beneficiary designation is not valid unless the
Participant's spouse consents, in writing, to the Beneficiary designation. The
spouse's consent must acknowledge the effect of that consent and a notary public
or the Plan Administrator (or his representative) must witness that consent. The
spousal consent requirements of this paragraph do not apply if: (1) the
Participant's spouse is the Participant's sole primary beneficiary; (2) the
Participant's spouse cannot be located; (3) the Participant is legally separated
or has been abandoned (within the meaning of State law) and the Participant has
a court order to that effect; or (4) other circumstances exist under which the
Secretary of the Treasury will excuse the consent requirement. If the
Participant's spouse is legally incompetent to give consent, the spouse's legal
guardian (even if the guardian is the Participant) may give consent.
8.02 NO BENEFICIARY DESIGNATION. If a Participant fails to name a
Beneficiary in accordance with Section 8.01, or if the Beneficiary named by a
Participant predeceases him, then the Trustee will pay the Participant's Accrued
Benefit in accordance with Section 6.02 in the following order of priority to:
(a) The Participant's surviving spouse;
(b) The Participant's surviving children, including adopted
children, in equal shares;
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(c) The Participant's surviving parents, in equal shares; or
(d) The legal representative of the estate of the Participant.
If the Beneficiary does not predecease the Participant, but dies prior
to the distribution of the Participant's entire Nonforfeitable Accrued Benefit,
the Trustee will pay the remaining Nonforfeitable Accrued Benefit to the
Beneficiary's estate unless the Participant's Beneficiary designation provides
otherwise. The Advisory Committee will direct the Trustee as to the method and
to whom the Trustee will make payment under this Section 8.02.
8.03 PERSONAL DATA TO COMMITTEE. Each Participant (and each Beneficiary
of a deceased Participant) must furnish to the Advisory Committee such evidence,
data or information as the Advisory Committee considers necessary or desirable
for the purpose of administering the Plan. The provisions of this Plan are
effective for the benefit of each Participant upon the condition precedent that
each Participant will furnish promptly full, true and complete evidence, data
and information when requested by the Advisory Committee, provided the Advisory
Committee advises each Participant of the effect of his failure to comply with
its request.
8.04 ADDRESS FOR NOTIFICATION. Each Participant (and each Beneficiary
of a deceased Participant) must file with the Advisory Committee from time to
time, in writing, his post office address and any change of post office address.
Any communication, statement or notice addressed to a Participant, or
Beneficiary, at his last post office address filed with the Advisory Committee,
or as shown on the records of an Employer, binds the Participant, or
Beneficiary, for all purposes of this Plan.
8.05 ASSIGNMENT OR ALIENATION. Subject to Code ss.414(p) relating to
qualified domestic relations orders, neither a Participant nor a Beneficiary may
anticipate, assign or alienate (either at law or in equity) any benefit provided
under the Plan, and the Trustee will not recognize any such anticipation,
assignment or alienation. Furthermore, a benefit under the Plan is not subject
to attachment, garnishment, levy, execution or other legal or equitable process.
8.06 NOTICE OF CHANGE IN TERMS. The Plan Administrator, within the time
prescribed by ERISA and the applicable regulations, must furnish all
Participants and Beneficiaries in the Plan a summary description of any material
amendment to, or notice of discontinuance of, the Plan and all other information
required by ERISA to be furnished without charge.
8.07 LITIGATION AGAINST THE TRUST. A court of competent jurisdiction
may authorize any appropriate equitable relief to redress violations of ERISA or
to enforce
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any provisions of ERISA or the terms of the Plan. A fiduciary may receive
reimbursement of expenses properly and actually incurred in the performance of
his duties with the Plan.
8.08 INFORMATION AVAILABLE. Any Participant in the Plan or any
Beneficiary may examine copies of the Plan description, latest annual report,
any bargaining agreement, this Plan and Trust, contract or any other instrument
under which the Plan was established or is operated. The Plan Administrator will
maintain all of the items listed in this Section 8.08 in his office, or in such
other place or places as he may designate from time to time in order to comply
with the regulations issued under ERISA, for examination during reasonable
business hours. Upon the written request of a Participant or Beneficiary the
Plan Administrator will furnish him with a copy of any item listed in this
Section 8.08. The Plan Administrator may make a reasonable charge to the
requesting person for the copy so furnished.
8.09 APPEAL PROCEDURE FOR DENIAL OF BENEFITS. The Plan
Administrator will provide adequate notice in writing to any Participant or to
any Beneficiary ("Claimant") whose claim for benefits under the Plan the
Advisory Committee has denied.
The Plan Administrator's notice to the Claimant must set forth:
(a) The specific reason for the denial;
(b) Specific references to pertinent Plan provisions on which
the Advisory Committee based its denial;
(c) A description of any additional material and information
needed for the Claimant to perfect his claim and an explanation of why
the material or information is needed; and
(d) That any appeal the Claimant wishes to make of the adverse
determination must be in writing to the Advisory Committee within 75
days after receipt of the Plan Administrator's notice of denial of
benefits. The Plan Administrator's notice must further advise the
Claimant that his failure to appeal the action to the Advisory
Committee in writing within the 75-day period will render the Advisory
Committee's determination final, binding and conclusive.
If the Claimant should appeal to the Advisory Committee, he, or his
duly authorized representative, may submit, in writing, whatever issues and
comments he, or his duly authorized representative, feels are pertinent. The
Claimant, or his duly authorized representative, may review pertinent plan
documents. The Advisory Committee will reexamine all facts related to the appeal
and make a final determination as to whether the denial of benefits is justified
under the circumstances. The Advisory Committee must advise the Claimant of its
decision within sixty (60) days of the Claimant's written request for review,
unless special circumstances (such as a hearing) would make the rendering of a
decision within the sixty (60) day limit unfeasible, but in no event may the
Advisory
-39-
Committee render a decision respecting a denial for a claim for benefits later
than 120 days after its receipt of a request for review.
The Plan Administrator's notice of denial of benefits must identify the
name of each member of the Advisory Committee and the name and address of the
Advisory Committee member to whom the Claimant may forward his appeal.
8.10 ESOP DIVERSIFICATION. Each Qualified Participant may direct the
Trustee as to the distribution of 25% of the aggregate value of the
Participant's Employer Securities Shares Account (the "Eligible Accrued
Benefit"), within 90 days after the last Accounting Date of each Plan Year (to
the extent a direction amount exceeds the amount to which a prior direction
under this Section 8.10(A) or Section 8.10(B) applies) during the Participant's
Qualified Election Period. For the last Plan Year in the Participant's Qualified
Election Period, the Trustee will substitute "50%" for "25%" in the immediately
preceding sentence. The Qualified Participant must make his direction to the
Trustee in writing, the direction may be effective no later than 180 days after
the close of the Plan Year to which the direction applies. The Trustee will make
the distribution within 90 days after the last day of the period during which
the Qualified Participant may make the election. The provisions of this Plan
applicable to a distribution of Employer Securities, including the put option
requirements of Article XI, apply to this investment option.
For purpose of this Section 8.10, the following definitions apply:
(1) "Qualified Participant" means a Participant who has
attained age 55 and who has completed at least 10 years of
participation in the Plan. A "year of participation" means a Plan Year
of the Plan or Former Plan in which the Participant was eligible for an
allocation of Employer contributions, irrespective of whether the
Employer actually contributed to the Plan for that Plan Year.
(2) "Qualified Election Period" means the six (6) Plan Year
period beginning with the Plan Year in which the Participant first
becomes a Qualified Participant.
A Participant's right under this Section 8.10(A) to direct the
distribution of his Account applies solely to Employer Securities acquired by
the Plan or Former Plan after December 31, 1986.
Except as provided in this Section 8.10, a Participant does not have
the right to direct the Trustee with respect to the investment or reinvestment
of the assets comprising the Participant's individual Accounts.
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ARTICLE IX.
ADVISORY COMMITTEE--DUTIES WITH RESPECT
TO PARTICIPANTS' ACCOUNTS
9.01 MEMBERS' COMPENSATION EXPENSES. DST Systems, Inc. must appoint an
Advisory Committee to administer the Plan, the members of which may or may not
be Participants in the Plan, or which may be the Plan Administrator acting
alone. The members of the Advisory Committee will serve without compensation for
services as such, but DST will pay all expenses of the Advisory Committee,
including the expense for any bond required under ERISA.
9.02 GENERAL. The Advisory Committee has the following powers and
duties:
(a) To select a Secretary, who need not be a member of the
Advisory Committee;
(b) To determine the rights of eligibility of an Employee to
participate in the Plan, the value of a Participant's Accrued Benefit
in the Plan and the Nonforfeitable percentage of each Participant's
Accrued Benefit in the Plan;
(c) To adopt rules of procedure and regulations necessary for
the proper and efficient administration of the Plan provided the rules
are not inconsistent with the terms of this Agreement;
(d) Discretionary authority to construe, interpret and enforce
the terms of the Plan (including making factual determinations) and the
rules and regulations it adopts, including interpretation of the Plan
documents and documents related to the Plan's operation and its
decisions shall be final and binding on all interested persons;
(e) To direct the Trustee as respects the crediting and
distribution of the Plan;
(f) To direct the Trustee as respects the purchase and sale of
Employer Securities;
(g) To review and render decisions respecting a claim for (or
denial of a claim for) a benefit under the Plan;
(h) To furnish DST with information which DST may require for
tax or other purposes;
(i) To engage the service of agents whom it may deem advisable
to assist it with the performance of its duties;
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(j) To engage the services of an Investment Manager or
Managers (as defined in ERISA ss.3(38)), each of whom will have full
power and authority to manage, acquire or dispose (or direct the
Trustee with respect to acquisition or disposition) of any asset in the
Plan under its control; and
(k) To direct Employer contributions between the Separate
Trust and the Master Trust and to direct the Trustee to transfer assets
from the Separate Trust to the Master Trust or from the Master Trust to
the Separate Trust.
The Advisory Committee must exercise all of its powers, duties and
discretion under the Plan in a uniform and nondiscriminatory manner.
9.03 FUNDING POLICY. The Advisory Committee will review, not less often
than annually, all pertinent Employee information and Plan data in order to
establish the funding policy of the Plan and to determine the appropriate
methods of carrying out the Plan's objectives. The Advisory Committee must
communicate periodically, as it deems appropriate, to the Trustee and to any
Plan Investment Manager the Plan's short-term and long-term financial needs so
investment policy can be coordinated with Plan financial requirements.
9.04 INDIVIDUAL ACCOUNTS. The Trustee shall maintain a separate
Account, or multiple separate Accounts, in the name of each Participant in the
Plan to reflect the Participant's Accrued Benefit under the Plan. The Trustee
must maintain for purposes of the Plan one Account designated as the Employer
Securities Account to reflect a Participant's interest in Employer Securities
held by the Plan, another Account designated as the General Investment Account
to reflect the Participant's interest in the Plan attributable to assets other
than Employer Securities and other than KCSI Shares, and another Account
designated as the KCSI Shares Account to reflect a Participant's interest in the
KCSI Shares held by the Plan. If a Participant reenters the Plan subsequent to
his having a Forfeiture Break in Service (as defined in Section 5.08), the
Trustee must maintain separate Accounts for the Participant's pre-Forfeiture
Break in Service Accrued Benefit and separate Accounts for his post- Forfeiture
Break in Service Accrued Benefit unless the Participant's entire Accrued Benefit
under the Plan is 100% Nonforfeitable.
The Trustee shall make its allocations to the Accounts of the
Participants in the Plan in accordance with the provisions of Section 9.06. The
Trustee may and if directed by the Advisory Committee shall maintain a temporary
segregated investment Account in the name of a Participant to prevent a
distortion of income, gain or loss allocations under Section 9.06.
The Trustee shall maintain records of its activities.
9.05 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. The value of each
Participant's Accrued Benefit consists of that portion of the net worth (at fair
market value) of the Plan which the net credit balance in his Accounts bears to
the total net credit balance in the Accounts of all Participants in the Plan.
For purposes of a distribution under the Plan,
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the value of a Participant's Accrued Benefit is its value as of the valuation
date immediately preceding the date of the distribution. A Participant's Accrued
Benefit shall not include or be deemed to include, any Employer Security held in
a suspense account, as provided in Section 10.03(B).
9.06 ALLOCATIONS TO PARTICIPANTS' ACCOUNTS. A "valuation date" under
this Plan is each Accounting Date and each interim valuation date determined
under Section 10.14. As of each valuation date the Trustee must adjust Accounts
to reflect net income, gain or loss since the last valuation date. In adjusting
Accounts the Trustee of the Separate Trust may rely on information provided by
the Trustee of the Master Trust with respect to income, gain or loss on the
intent of Accounts in the Master Trust, and the Trustee of the Master Trust may
similarly rely on information provided by the Trustee of the Separate Trust. The
valuation period is the period beginning the day after the last valuation date
and ending on the current valuation date.
(A) EMPLOYER SECURITIES ACCOUNT. As of the Accounting Date of each Plan
Year, the Trustee first will reduce Employer Securities Accounts in the Plan for
any forfeitures arising under Section 5.09 and then will credit the Employer
Securities Account maintained for each Participant in the Plan with the
Participant's allocable share of Employer Securities (including fractional
shares) purchased and paid for by the Trust or contributed in kind to the Trust,
with any forfeitures of Employer Securities and with any stock dividends on
Employer Securities allocated to his Employer Securities Account. The Trustee
will allocate Employer Securities acquired with an Exempt Loan under Section
10.03(B) in accordance with that Section. Except as otherwise specifically
provided in Section 10.03(B), the Trustee will base allocations to the
Participants' Accounts on dollar values of Employer Securities or on the basis
of actual Employer Securities shares where there is a single class of Employer
Securities. In making a forfeiture reduction under this Section 9.06(A), the
Trustee, to the extent possible, first must forfeit from a Participant's General
Investment Account before making a forfeiture from his Employer Securities
Account.
(B) GENERAL INVESTMENT ACCOUNT.
TRUST FUND ACCOUNTS. The allocation provisions of this paragraph apply
to all Participant General Investment Accounts in the Plan other than segregated
investment Accounts. The Trustee first will adjust such Participant General
Investment Accounts, as those Accounts stood at the beginning of the current
valuation period, by reducing the Accounts for any forfeitures arising under
Section 5.09 or under Section 9.07, for amounts charged during the valuation
period to the Accounts in accordance with Section 9.14 (relating to
distributions) and for the amount of any such General Investment Account which
the Trustee has fully distributed since the immediately preceding valuation
date. The Trustee then, subject to the restoration allocation requirements of
Section 5.04 or of Section 9.07, will allocate the net income, gain or loss pro
rata to the adjusted Participant General Investment Accounts in the Plan. The
allocable net income, gain or loss is the net income (or net loss), including
the increase or decrease in the fair market value of assets, since the
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last valuation date. In making its allocations under this Section 9.06(B), the
Trustee will exclude Employer Securities allocated to Employer Securities
Accounts, stock dividends on allocated Employer Securities and interest paid by
the Trust on an Exempt Loan. The Trustee will include cash dividends on Employer
Securities as income (available for payment on an Exempt Loan to the extent such
dividends are attributable to Employer Securities acquired with the proceeds of
an Exempt Loan) except cash dividends which the Advisory Committee has directed
the Trustee to distribute in accordance with Section 10.08, or which the
Advisory Committee has directed the Trustee to use for the payment of principal
and/or interest on any Exempt Loan, or to use for the funding of a benefit
distribution in cash, in lieu of Employer Securities, to a Participant pursuant
to Section 10.08. If dividends on any Employer Securities are used for the
funding of such a benefit distribution in cash pursuant to Section 10.08, then
the Employer Securities which, but for such benefit distribution in cash rather
than Employer Securities, would have been distributed to the Participant shall
be allocated for the Plan Year in which such cash benefit distribution occurred
to the Accounts of Participants as if such Employer Securities constituted
earnings for such Plan Year.
SEGREGATED INVESTMENT ACCOUNTS. A segregated investment Account
receives all income it earns and bears all expense or loss it incurs. As of the
valuation date, the Trustee must reduce a segregated investment Account for any
forfeiture arising under Section 5.089 after the Trustee has made all other
allocations, changes or adjustments to the Account for the Plan Year.
ADDITIONAL RULES. An Excess Amount or suspense account described in
Article III does not share in the allocation of net income, gain or loss
described in this Section 9.06(B). The Trustee will allocate the Employer
contributions and Participant forfeitures, if any, in accordance with Article
III.
(C) KCSI SHARES ACCOUNT. As of each valuation date of each Plan Year,
the Trustee first will reduce KCSI Shares Accounts in the Plan for any
forfeitures arising under Section 5.09 and then will credit the KCSI Shares
Account maintained for each Participant in the Plan with any forfeitures of KCSI
Shares and with any stock dividends on KCSI Shares allocated to his KCSI Shares
Account. The Trustee will base allocations to the Participants' Accounts on
dollar values of KCSI Shares or on the basis of actual shares where there is a
single class of KCSI Shares. In making a forfeiture reduction under this Section
9.06(C), the Trustee, to the extent possible, first must forfeit from a
Participant's General Investment Account before making a forfeiture from his
KCSI Shares Account.
9.07 UNCLAIMED ACCOUNT PROCEDURE. The Plan does not require either the
Trustee or the Advisory Committee to search for, or ascertain the whereabouts
of, any Participant or Beneficiary. At the time the Participant's or
Beneficiary's benefit becomes distributable under Article VI, the Advisory
Committee, by certified or registered mail addressed to his last known address
of record with the Advisory Committee or the Employer, must notify the
Participant, or Beneficiary, that he is entitled to a distribution under this
Plan. The notice must quote the provisions of this Section 9.07 and otherwise
must comply
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with the notice requirements of Article VI. If the Participant, or Beneficiary,
fails to claim his distributive share or make his whereabouts known in writing
to the Advisory Committee within 6 months from the date of mailing of the
notice, the Advisory Committee will treat the Participant's or Beneficiary's
unclaimed payable Accrued Benefit as forfeited and will reallocate the unclaimed
payable Accrued Benefit in accordance with Section 3.08. Where the benefit is
distributable to the Participant, the forfeiture under this paragraph occurs as
of the last day of the notice period, if the Participant's Nonforfeitable
Accrued Benefit does not exceed $5,000, or as of the first day the benefit is
distributable without the Participant's consent, if the present value of the
Participant's Nonforfeitable Accrued Benefit exceeds $5,000. Where the benefit
is distributed to a Beneficiary, the forfeiture occurs on the date the notice
period ends except, if the Beneficiary is the Participant's spouse and the
Nonforfeitable Accrued Benefit payable to the spouse exceeds $5,000, the
forfeiture occurs as of the first day the benefit is distributable without the
spouse's consent. Pending forfeiture, the Advisory Committee, following the
expiration of the notice period, may direct the Trustee to segregate the
Nonforfeiture Accrued Benefit in the Plan in a segregated Account and to invest
that segregated Account in Federally insured interest bearing savings accounts
or time deposits (or in a combination of both), or in other fixed income
investments.
If a Participant or Beneficiary in the Plan who has incurred a
forfeiture of his Accrued Benefit in the Plan under the provisions of the first
paragraph of this Section 9.07 makes a claim, at any time, for the forfeited
Accrued Benefit, the Advisory Committee must restore such forfeited Accrued
Benefit to the same dollar amount as the dollar amount of the Accrued Benefit
forfeited, unadjusted for any gains or losses occurring subsequent to the date
of the forfeiture. The Advisory Committee will make the restoration during the
Plan Year in which the Participant or Beneficiary makes the claim, first from
the amount, if any, of Participant forfeitures the Advisory Committee otherwise
would allocate for the Plan Year in the Plan, then from the amount, if any, of
the Trust Fund net income or gain allocable to the Plan for the Plan Year and
then from the amount, or additional amount, that DST contributes to enable the
Advisory Committee to make the required restoration. The Advisory Committee will
direct the Trustee to distribute the Participant's or Beneficiary's restored
Accrued Benefit to him not later than 60 days after the close of the Plan Year
in which the Advisory Committee restores the forfeited Accrued Benefit. The
forfeiture provisions of this Section 9.07 apply solely to the Participant's or
the Beneficiary's Accrued Benefit derived from Employer contributions.
9.08 TERM. Each member of the Advisory Committee serves until the
appointment of his successor.
9.09 POWERS. In case of a vacancy in the membership of the Advisory
Committee, the remaining members of the Advisory Committee may exercise any and
all of the powers, authority, duties and discretion conferred the such Advisory
Committee pending the filling of the vacancy.
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9.10 MANNER OF ACTION. The decision of a majority of the members
appointed and qualified controls.
9.11 AUTHORIZED REPRESENTATIVE. The Advisory Committee may authorize
any one of its members, or its Secretary, to sign on its behalf any notices,
directions, applications, certificates, consents, approvals, waivers, letters or
other documents. The Advisory Committee must evidence this authority by an
instrument signed by all its members and filed with the Trustee.
9.12 INTERESTED MEMBER. No member of the Advisory Committee may decide
or determine any matter concerning the distribution, nature or method of
settlement of his own benefits under the Plan, except in exercising an election
available to that member in his capacity as a Participant, unless the Plan
Administrator is acting alone in the capacity of the Advisory Committee.
9.13 INDIVIDUAL STATEMENT. As soon as practicable after the last
Accounting Date of each Plan Year, but within the time prescribed by ERISA and
the regulations under ERISA, the Plan Administrator will deliver to each
Participant (and to each Beneficiary) a statement reflecting the condition of
his Accrued Benefit in the Trust as of that date and such other information
ERISA requires be furnished the Participant or Beneficiary. No Participant,
except a member of the Advisory Committee, has the right to inspect the records
reflecting the Account of any other Participant.
9.14 ACCOUNT CHARGED. The Advisory Committee will charge all
distributions made to a Participant or to his Beneficiary from his Account
against the Account of the Participant when made.
9.15 TRANSFERRED ACCOUNTS. Subject to Section 13.05, the Trustee shall
accept as of the Effective Date a transfer from the Former Plan of assets in
kind and liabilities comprising the Accounts representing the DST Portion of the
Former Plan; and each DST Participant shall become a Participant in this Plan as
of the Effective Date. The Trustee and the Advisory Committee shall allocate
such assets and liabilities to Accounts of Participants in this Plan that
correspond to the Accounts (as defined in the Former Plan) of the DST
Participants in the DST Portion of the Former Plan, based on the information
supplied by the Trustee and Advisory Committee under the Former Plan respecting
such transfer. Such transfer of Accounts shall not itself alter the vesting,
beneficiary election, distribution election, or other benefits, rights and
features of such transferred Accounts. Transferred Accounts shall thereafter be
maintained under this Plan, subject to the Sponsor's right to amend and
terminate this Plan as provided in Article XIII. Any Qualified Domestic
Relations Order applying under the Former Plan to a transferred Account shall be
transferred to and shall be deemed to apply against this Plan.
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ARTICLE X.
TRUSTEE POWERS AND DUTIES
10.01 ACCEPTANCE. The Trustee accepts the Trust created under the Plan
and agrees to perform the obligations imposed. The Trustee must provide bond for
the faithful performance of its duties under the Trust to the extent required by
ERISA.
10.02 RECEIPT OF CONTRIBUTIONS. The Trustee is accountable to the
Employer for the funds contributed to it by the Employer, but does not have any
duty to see that the contributions received comply with the provisions of the
Plan. DST (or the Advisory Committee on behalf of DST) shall direct
contributions from time to time to this Separate Trust or to the Master Trust
and make direct transfers from time to time from the Separate Trust to the
Master Trust or from the Master Trust to the Separate Trust, and the Trustee of
the Separate Trust does not have any duty under the Separate Trust with respect
to contributions and transfers so directed to the Master Trust. The Trustee is
not obliged to collect any contributions from the Employer, nor is it obliged to
see that funds deposited with it are deposited according to the provisions of
the Plan.
10.03 INVESTMENT POWERS.
(A) TRUSTEE POWERS. The Trustee has full discretion and authority with regard to
the investment of the Separate Trust Fund, except with respect to a Plan asset
under the control or direction of a properly appointed Investment Manager or
with respect to a Plan asset subject to Employer, Separate or Advisory Committee
direction of investment. The Trustee must coordinate its investment policy with
Plan financial needs as communicated to it by the Advisory Committees. The
Trustee is authorized and empowered, but not by way of limitation, with the
following powers, rights and duties:
(a) To invest the leveraged employee stock ownership portion
of the Trust Fund primarily in Employer Securities ("primarily" meaning
the authority to hold and acquire not more than 100% of the Trust Fund
in Employer Securities) as directed by the Advisory Committee and to
invest any part or all of the Separate Trust Fund in shares of stock
issued by DST, any common or preferred stocks, open-end or closed-end
mutual funds, put and call options traded on a national exchange,
United States retirement plan bonds, corporate bonds, debentures,
convertible debentures, commercial paper, U.S. Treasury bills, U.S.
Treasury notes and other direct or indirect obligations of the United
States Government or its agencies, improved or unimproved real estate
situated in the United States, limited partnerships, insurance
contracts of any type, mortgages, notes or other property of any kind,
real or personal, and to buy or sell options on common stock on a
nationally recognized exchange with or without holding the underlying
common stock, and to make any other investments the Trustee deems
appropriate, as a prudent man would do under like circumstances with
due regard for the purposes of this Plan. Any investment made or
retained by the Trustee in good faith is proper but must be of a kind
(with the exception of Employer Securities) constituting a
diversification considered by law suitable for trust investments.
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(b) To retain in cash so much of the Separate Trust Fund as it
may deem advisable to satisfy liquidity needs of the Plan and to
deposit any cash held in the Separate Trust Fund in a bank account at
reasonable interest. If the Trustee is a bank or similar financial
institution supervised by the United States or by a State, this
paragraph (c) includes specific authority to invest in any type of
deposit of the Trustee (or of a bank related to the Trustee within the
meaning of Code ss.414(b)) at a reasonable rate of interest or in a
common trust fund (the provisions of which govern the investment of
such assets and which the Plan incorporates by this reference) as
described in Code ss.584 which the Trustee (or its affiliate, as
defined in Code ss.1504) maintains exclusively for the collective
investment of money contributed by the bank (or the affiliate) in its
capacity as trustee and which conforms to the rules of the Comptroller
of the Currency.
(c) To manage, sell, contract to sell, grant options to
purchase, convey, exchange, transfer, abandon, improve, repair, insure,
lease for any term even though commencing in the future or extending
beyond the term of the Trust, and otherwise deal with all property,
real or personal, in such manner, for such considerations and on such
terms and conditions as the Trustee decides.
(d) To credit and distribute the Plan as directed by the
Advisory Committee. The Trustee is not obliged to inquire as to whether
any payee or distributee is entitled to any payment or whether the
distribution is proper or within the terms of the Plan, or as to the
manner of making any payment or distribution. The Trustee is
accountable only to the Advisory Committee for any payment or
distribution made by it in good faith on the order or direction of the
Advisory Committee.
(e) To borrow money, to assume indebtedness, extend mortgages
and encumber by mortgage or pledge.
(f) To compromise, contest, arbitrate or abandon claims and
demands, in its discretion.
(g) to vote the stock held by the Separate Trust Fund, subject
to Section 10.15.
(h) To lease for oil, gas and other mineral purposes and to
create mineral severances by grant or reservation; to pool or unitize
interests in oil, gas and other minerals; and to enter into operating
agreements and to execute division and transfer orders.
(i) To hold any securities or other property in the name of
the Trustee or its nominee, with depositories or agent depositories or
in another form as it may deem best, with or without disclosing the
trust relationship.
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(j) To perform any and all other acts in its judgment
necessary or appropriate for the proper and advantageous management,
investment and distribution of the Trust.
(k) To retain any funds or property subject to any dispute
without liability for the payment of interest, and to decline to make
payment or delivery of the funds or property until final adjudication
is made by a court of competent jurisdiction.
(l) To file all tax returns required of the Trustee.
(m) To furnish to the Employer, the Plan Administrator and the
Advisory Committee an annual statement of account showing the condition
of the Separate Trust Fund and all investments, receipts, disbursements
and other transactions effected by the Trustee during the Plan Year
covered by the statement and also stating the assets of the Trust held
at the end of the Plan Year, which accounts are conclusive on all
persons, including the Employer, the Plan Administrator and the
Advisory Committee, except as to any act or transaction concerning
which the Employer, the Plan Administrator or the Advisory Committee
files with the Trustee written exceptions or objections within 90 days
after the receipt of the accounts or for which ERISA authorizes a
longer period within which to object.
(n) To begin, maintain or defend any litigation necessary in
connection with the administration of the Plan, except that the Trustee
is not obligated or required to do so unless indemnified to its
satisfaction.
(o) To respond to a tender offer, exchange offer or any other
offer to purchase Employer Securities, subject to Section 10.15.
(B) EXEMPT LOAN. This Section 10.03(B) specifically authorizes the Trustee to
enter into an Exempt Loan transaction with respect to the Plan. The following
terms and conditions will apply to any Exempt Loan authorized by this Section
10.03(B).
(1) The Trustee will use the proceeds of the loan within a
reasonable time after receipt only for any or all of the following
purposes: (i) to acquire Employer Securities, (ii) to repay such loan,
or (iii) to repay a prior Exempt Loan. Except as provided under Article
XI, no Employer Security acquired with the proceeds of an Exempt Loan
may be subject to a put, call or other option, or buy-sell or similar
arrangement while held by and when distributed from this Plan, whether
or not this Plan is then an employee stock ownership plan.
(2) The interest rate of the loan may not be more than a
reasonable rate of interest.
(3) Any collateral the Trustee pledges to the creditor must
consist only of the assets purchased by the borrowed funds and those
assets the Trust used as collateral on the prior Exempt Loan repaid
with the proceeds of the current Exempt Loan.
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(4) The creditor may have no recourse against the Trust under
the loan except with respect to such collateral given for the loan,
contributions (other than contributions of Employer Securities) made to
the Trust to meet its obligations under the loan, and earnings
attributable to such collateral and the investment of such
contributions. The payment made with respect to an Exempt Loan by the
Plan during a Plan Year must not exceed an amount equal to the sum of
such contributions and earnings received during or prior to the year
less such payments in prior years. The Advisory Committee and the
Trustee must account separately for such contributions and earnings in
the books of account of the Plan until the Trust repays the loan.
(5) In the event of default upon the loan, the value of Plan
assets transferred in satisfaction of the loan must not exceed the
amount of the default, and if the lender is a Disqualified Person, the
loan must provide for transfer of Plan assets upon default only upon
and to the extent of the failure of the Plan to meet the payment
schedule of the loan.
(6) The Trustee must add and maintain all assets acquired with
the proceeds of an Exempt Loan in a Suspense Account. In withdrawing
assets from the Suspense Account, the Trustee will apply the provisions
of Treas. Reg. ss.ss.54.4975- 7(b)(8) and (15) as if all securities in
the Suspense Account were encumbered. Upon the payment of any portion
of the loan, the Trustee will effect the release of assets in the
Suspense Account from encumbrances. For each Plan Year during the
duration of the loan, the number of Employer Securities released must
equal the number of encumbered Employer Securities held immediately
before release for the current Plan Year multiplied by a fraction. The
numerator of the fraction is the amount of principal and interest paid
for the Plan Year. The denominator of the fraction is the sum of the
numerator plus the principal and interest to be paid for all future
Plan Years. The number of future Plan Years under the loan must be
definitely ascertainable and must be determined without taking into
account any possible extension or renewal periods. If the interest rate
under the loan is variable, the interest to be paid in future Plan
Years must be computed by using the interest rate applicable as of the
end of the Plan Year. If collateral includes more than one class of
Employer Securities, the number of Employer Securities of each class to
be released for a Plan Year must be determined by applying the same
fraction to each such class. The Advisory Committee will allocate
assets withdrawn from the Suspense Account to the Accounts of
Participants who otherwise share in the allocation of DST's
contribution for the Plan Year for which the Trustee has paid the
portion of the loan resulting in the release of the assets. The
Advisory Committee consistently will make this allocation as of the
last business day of each Plan Year (unless otherwise specified by DST)
on the basis of nonmonetary units, taking into
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account the relative Compensation of all such Participants for such
Plan Year. Notwithstanding the foregoing provisions for the allocation
of Employer Securities withdrawn from the Suspense Account, if
dividends on any Employer Securities which are allocated to any
Participant are used to make any payment on an Exempt Loan, then
Employer Securities with a fair market value not less than the amount
of such dividends shall be allocated to the Account of such Participant
for the Plan Year in which, but for the use of the dividends to make a
payment on the loan, such dividends would have been allocated to the
Account of such Participant. Employer Securities acquired by the Trust
must be accounted for in accordance with the provisions of Treasury
Regulation ss.54.4975-11(d)(1), both while they are held in the
Suspense Account and after release therefrom.
(7) The loan must be for a specific term and may not be
payable at the demand of any person except in the case of default.
(8) Notwithstanding the fact this Plan ceases to be an
employee stock ownership plan, Employer Securities acquired with the
proceeds of an Exempt Loan will continue after the Trustee repays the
loan to be subject to the provisions of Treas. Reg.
ss.ss.54.4975-7(b)(4), (10), (11) and (12) relating to put, call or
other options and to buy-sell or similar arrangements, except to the
extent these regulations are inconsistent with Code ss.409(h).
10.04 RECORDS AND STATEMENTS. The records of the Trustee pertaining to
the Plan must be open to the inspection of the Plan Administrator, Advisory
Committee and the Employer at all reasonable times and may be audited from time
to time by any person or persons as the Employer, Plan Administrator or Advisory
Committee may specify in writing. The Trustee must furnish the Plan
Administrator or Advisory Committee with whatever information relating to the
Trust Fund the Plan Administrator or Advisory Committee considers necessary.
10.05 FEES AND EXPENSES FROM FUND. The Trustee will receive reasonable
annual compensation as may be agreed upon from time to time between the Employer
and the Trustee. The Trustee will pay all fees and expenses reasonably incurred
by it in its administration of the Plan from the Trust Fund, unless the Employer
pays the fees and expenses. The Applicable Advisory Committee will not treat any
fee or expense paid, directly or indirectly, by an Employer as an Employer
contribution, provided the fee expense relates to the ordinary and necessary
administration of the Fund. No person who is receiving full pay from the
Employer may receive compensation for services as Trustee.
10.06 PARTIES TO LITIGATION. Except as otherwise provided by ERISA,
only the Employer, the Plan Administrator, the Advisory Committee, and the
Trustee are necessary parties to any court proceeding involving the Trustee or
the Trust Fund. No Participant, or Beneficiary, is entitled to any notice of
process unless required by ERISA. Any final judgment entered in any proceeding
will be conclusive upon the Employer, the Plan Administrator, the Advisory
Committee, the Trustee, Participants and Beneficiaries.
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10.07 PROFESSIONAL AGENTS. The Trustee may employ and pay from the
Trust Fund reasonable compensation to agents, attorneys, accountants and other
persons to advise the Trustee as in its opinion may be necessary. The Trustee
may delegate to any agent, attorney, accountant or other person selected by it
any non-Trustee power or duty vested in it by the Plan, and the Trustee may act
or refrain from acting on the advice or opinion of any agent, attorney,
accountant or other person so selected.
10.08 DISTRIBUTION OF TRUST FUND. In the absence of a contrary
Participant election, the Trustee shall, to the extent of the Employer
Securities in a Participant's Accounts, make all distributions of benefits to
such Participant under the Plan in Employer Securities. A Participant may,
however, elect to receive this distribution in cash based on the fair market
value of the Employer Securities at the time of the distribution or in a
combination of cash and Employer Securities. The Trustee shall pay in cash any
fractional security share to which a Participant or his Beneficiary is entitled.
Any remaining balance in a Participant's Accounts shall be paid in cash, except
that, at the Participant's election, such balance shall be applied to provide
whole shares of common stock of DST Systems, Inc. for Participants in the Plan
for distribution at the then fair market value.
If the charter or bylaws of the Issuer of the Employer Securities
restrict ownership of substantially all shares of Employer Securities to
Employees and the Trust, as described in Code ss.409(h)(2), the Trustee may make
the distribution of a Participant's Accrued Benefit entirely in cash without
granting the Participant the right to demand distribution in shares of Employer
securities.
In addition to the distribution options set forth above, a Participant
in the Plan may elect to receive a distribution in the form of a number of
shares of common stock of Kansas City Southern Industries, Inc. allocated to
such Participant's Accounts as of the date of the distribution, with the balance
in cash, shares of common stock of DST or a combination of both.
Notwithstanding the preceding provisions of this Section 10.08, the
Trustee, if directed in writing by the Advisory Committee, shall pay, in cash,
any cash dividends on Employer Securities allocated, or allocable to
Participants' Employer Securities Account in the Plan, irrespective of whether a
Participant is fully vested in his Employer Securities Account. The Advisory
Committee's direction shall state whether the Trustee is to pay the cash
dividend distributions currently, or within the ninety (90) day period following
the close of the Plan Year in which DST pays the dividends to the Trust. The
Advisory Committee may request DST to pay dividends on Employer Securities
directly to Participants in the Plan.
10.09 DISTRIBUTION DIRECTIONS. If no one claims a payment or
distribution made from the Trust, the Trustee must promptly notify the Advisory
Committee and then dispose of the payment in accordance with the subsequent
direction of the Advisory Committee.
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10.10 THIRD PARTY. No person dealing with the Trustee is obligated to
see to the proper application of any money paid or property delivered to the
Trustee, or to inquire whether the Trustee has acted pursuant to any of the
terms of the Plan. Each person dealing with the Trustee may act upon any notice,
request or representation in writing by the Trustee, or by the Trustee's duly
authorized agent, and is not liable to any person in so acting. The certificate
of the Trustee that is acting in accordance with the Plan will be conclusive in
favor of any person relying on the certificate.
10.11 RESIGNATION. The Trustee may resign at any time as Trustee of the
Plan by giving sixty (60) days' written notice in advance to the Employer and to
the Advisory Committee. If the Employer fails to appoint a successor Trustee
within sixty (60) days of its receipt of the Trustee's written notice of
resignation, the Trustee shall appoint a bank or trust company authorized to
exercise trust powers as the successor trustee, which shall accept its
appointment in writing delivered to the former Trustee and the Employer.
10.12 REMOVAL. The Employers, by giving written notice in advance to
the Trustee, may remove any Trustee. In the event of the resignation or removal
of a Trustee, the Employers must appoint a successor Trustee if they intend to
continue the Plan.
10.13 INTERIM DUTIES AND SUCCESSOR TRUSTEE. Each successor Trustee
succeeds to the title to the Trust vested in his predecessor by accepting in
writing his appointment as successor Trustee and filing the acceptance with the
former Trustee and the Advisory Committee without the signing or filing of any
further statement. The resigning or removed Trustee, upon receipt of acceptance
in writing of the Trust by the successor Trustee, must execute all documents and
do all acts necessary to vest the title of record in any successor Trustee. Each
successor Trustee has and enjoys all of the powers, both discretionary and
ministerial, conferred under this Agreement upon his predecessor. A successor
Trustee is not personally liable for any act or failure to act of any
predecessor Trustee, except as required under ERISA. With the approval of the
Employer and the Advisory Committee, a successor Trustee, with respect to the
Plan, may accept the account rendered and the property delivered to it by a
predecessor Trustee without incurring any liability or responsibility for so
doing.
10.14 VALUATION OF TRUST. The Trustee must value the Trust Fund as of
each Accounting Date to determine the fair market value of each Participant's
Accrued Benefit in the Trust. The Trustee also must value the Trust Fund on such
other dates as directed in writing by the Advisory Committee.
10.15 PARTICIPANT VOTING RIGHTS - EMPLOYER SECURITIES. Each
Participant (or the Beneficiary thereof) acting as a named fiduciary shall have
the right, with respect to Employer Securities, to direct the Trustee as to the
manner in which (a) to vote
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any stock allocated to his Employer Securities Account as of the applicable
record date of any shareholder meeting in any matter put to a shareholder vote;
and (b) to respond to a tender offer, exchange offer or any other offer to
purchase Employer Securities allocated to the Participant's Employer Securities
Account or KCSI Shares Account.
Before any meeting in which a shareholder vote is to be taken, the
Employer will deliver to the Trustee or its designee such quantities of proxy
soliciting materials as are necessary to solicit voting instructions from the
Participants. The Trustee or its designee will mail the proxy solicitation
materials (and any additional material made available to other shareholders or
otherwise deemed appropriate by the Trustee) to the Participants within a
reasonable time before the meeting. A reasonable deadline for the return of such
materials may be specified.
Shares will be voted as instructed by the Participants on each matter
brought before the meeting. Such participants are appointed as named fiduciaries
to direct the Trustee as to the voting of shares allocated to the accounts of
Participants who have not timely instructed the Trustee how to vote them and any
unallocated shares. Such shares will be voted in the same proportions as the
shares for which the Trustee has received timely instructions. The Trustee may
submit to the Employer one summary proxy for the aggregate number of shares.
With regard to any tender offer, exchange offer or any other offer to
purchase Employer Securities, the Trustee or its designee will solicit such
instructions from Participants by distributing to each Participant such
information as is distributed to shareholders of the Employer or of KCSI, as
applicable, generally in connection with any such offer, and any additional
information the Trustee deems appropriate in order for each Participant to give
instructions. A reasonable deadline for the return of such materials may be
specified.
Shares will, in response to a tender offer, exchange offer or other
offer to purchase, be tendered, exchanged or sold as instructed by the
Participants. Fractional shares will be aggregated for purposes of tendering,
exchanging or selling shares, to the extent possible, to reflect the
instructions of the Participants. Such participants are appointed as named
fiduciaries to direct the Trustee as to the tender, exchange or sale of shares
allocated to an account of a Participant who has not timely instructed the
Trustee how to respond to such offer and any unallocated shares. Such shares
will be tendered, exchanged or sold in the same proportion as shares for which
the Trustee has received timely instructions.
For purposes of receiving, tabulating and transmitting instructions,
the Trustee will establish a procedure to insure that instructions received from
individual Participants regarding voting or responding to a tender offer,
exchange offer, or any other offer are held in confidence, and are not divulged,
released or otherwise utilized in a manner that, in the Trustee's reasonable
judgment, might influence the Participant's free exercise of the rights set
forth in this Section 10.15.
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In the event a Participant eligible to receive a distribution of that
Participant's Employer Securities Account or KCSI Shares Account does not elect
in accordance with Section 10.08 to receive the distribution in the form of
Employer Securities, a sale of the Employer Securities in such Account in order
to fund the resulting cash distribution shall be deemed to satisfy the
requirements of this Section 10.15.
10.16 LIMITATION ON LIABILITY - IF INVESTMENT MANAGER APPOINTED. The
Trustee is not liable for the acts or omissions of any Investment Manager or
Managers the Advisory Committee may appoint, nor is the Trustee under any
obligation to invest or otherwise manage any asset of the Plan which is subject
to the management of a properly appointed Investment Manager. The Advisory
Committee, the Trustee and any properly appointed Investment Manager may execute
a letter agreement as a part of this Plan delineating the duties,
responsibilities and liabilities of the Investment Manager with respect to any
part of the Plan under the control of the Investment Manager.
10.17 USE OF INDEPENDENT APPRAISER. All valuations of Employer
Securities acquired after December 31, 1986, which are not readily tradable on
an established securities market (within the meaning of Code ss.401(a)(28)(C))
with respect to activities carried on by the Plan shall be by an independent
appraiser. For purposes of the preceding sentence, the term "independent
appraiser" means any appraiser meeting requirements similar to the requirements
of the Treasury Regulations prescribed under Code ss.170(a)(1).
10.18 INVESTMENT IN GROUP TRUST FUND. The Trustee, for collective
investment purposes, may combine into one trust fund the Trust created under
this Plan with the Trust created under any other qualified retirement plan the
Employer maintains. However, the Trustee must maintain separate records of
account for the assets of each Trust in order to reflect properly each
Participant's Accrued Benefit under the plan(s) in which he is a Participant.
Notwithstanding the provisions of Section 10.03, but subject to the
provisions for the investment of Plan assets as set forth in Articles VIII and
IX, the Employer specifically authorizes the Trustee to invest all or any
portion of the assets comprising the Trust Fund in any group trust fund which at
the time of the investment provides for the pooling of the assets of plans
qualified under Code ss. 401(a). This authorization applies solely to a group
trust fund exempt from taxation under Code ss. 501(a) and the trust agreement of
which satisfies the requirements of Revenue Ruling 81-100. The provisions of the
group trust fund agreement, as amended from time to time, are by this reference
incorporated within this Plan and Trust. The provisions of the group trust fund
will govern any investment of Plan assets in that fund.
10.19 KCSI SHARE RESTRICTIONS. Any KCSI shares acquired under the
Former Plan with the proceeds of an exempt loan shall continue to be subject to
the provisions of Treas. Reg. ss.ss.54-4975-7(b)(4), (10), (11) and (12)
relating to put, call or other options and to buy-sell or similar arrangements,
except to the extent these regulations are inconsistent with Code ss.409(h).
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ARTICLE XI.
REPURCHASE OF EMPLOYER SECURITIES
11.01 PUT OPTION. Shares of Employer Securities distributed to a
Participant from the Trust shall be subject to a "put" option at the time of
distribution, provided that at such time the shares are either not readily
tradable on an established market within the meaning of Code ss.409(h) or are
subject to a trading limitation. The "put" option shall be exercisable by the
Participant or his Beneficiary, by the donees of either, or by a person
(including an estate or its distributee) to whom the Employer Securities pass by
reason of the Participant's or Beneficiary's death. The "put" option shall
provide that for a period of at least fifteen (15) months after such shares are
distributed, the holder of the option shall have the right to cause the
Employer, by notifying it in writing, to purchase such shares at their fair
market value, as determined by the Advisory Committee, in accordance with
Treasury Regulation ss.54.4975-11(d)(5) and Section 10.17 hereof. The Advisory
Committee may give the Trustee the option to assume the rights and obligations
of the Employer at the time the "put" option is exercised, insofar as the
repurchase of Employer Securities is concerned. The period during which the
"put" option is exercisable shall not include any period during which the holder
is unable to exercise such "put" option because the Employer is prohibited from
honoring it by federal or state law. If the Employer is prohibited from honoring
the "put" option by federal or state law, the holder shall be entitled to cause
it to be honored, consistent with such law, by an affiliate or shareholder of
the Employer that has substantial net worth and whose net worth is reasonably
expected to remain substantial. If shares of Employer Securities are readily
tradable on an established market on the date of distribution, but cease to be
readily tradable on an established market (as described above) within fifteen
(15) months after such date, the Employer Securities distributed shall be
subject to the "put" option described herein for the balance of the fifteen (15)
month period. The Employer shall give written notice to each shareholder within
ten (10) days of the date the Employer Securities cease to be readily tradable
on an established market or that the Employer Securities become subject to a
trading limitation that the Employer Securities are subject to the "put" option
for the remainder of the fifteen (15) month period. If the Employer fails to
give such notice to the shareholder within such ten (10) day period, then the
number of days between such tenth (10th) day and the date on which the notice is
actually given shall be added to the duration of the fifteen (15) month period.
The terms of payment for the purchase of such shares of Employer Securities
shall be as set forth in the "put" option and, if the Employer Securities are
distributed as part of a total distribution, may be either in a lump sum or in
installments, as determined by the Advisory Committee. For purposes of the
preceding sentence, the term "total distribution" means the distribution within
one taxable year to the Participant of the balance to the credit of the
Participant's Account. If the "put" option is exercised with respect to Employer
Securities constituting part of an installment distribution to a Participant,
the amount to be paid for the Employer Securities shall be paid not later than
thirty (30) days after the date the "put" option is exercised.
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An installment payment in connection with a "put" option shall:
(1) provide for acceleration in the event of thirty (30) days'
default in the payment of interest or principal and shall permit
prepayment of the installment obligation in whole or in part at any
time or times without penalty;
(2) be adequately secured and bear a reasonable rate of
interest, both as determined by the Advisory Committee;
(3) require equal annual payments;
(4) have a payment period not longer than five (5) years from
the date the "put" option is exercised;
(5) require that any payments pursuant to the installment
obligation must be substantially equal and begin to be made no later
than thirty (30) days after the date the "put" option is exercised; and
(6) satisfy the requirements of Treasury Regulation
ss.54.4975-7(b)(12), except to the extent this regulation is
inconsistent with Code ss.409(h).
11.02 CONTINUATION OF PUT OPTION. The "put" option provided for by
Section 11.01 is nonterminable and shall continue to apply to shares of Employer
Securities distributed hereunder notwithstanding the repayment of any Exempt
Loan or any amendment to, or termination of, this Plan which causes the Plan or
a portion of the Plan to cease to be an employee stock ownership plan within the
meaning of Code ss.4975(e)(7).
ARTICLE XII.
MISCELLANEOUS
12.01 EVIDENCE. Anyone required to give evidence under the terms of the
Plan may do so by certificate, affidavit, document or other information which
the person to act in reliance may consider pertinent, reliable and genuine, and
to have been signed, made or presented by the proper party or parties. Both the
Advisory Committee and the Trustee are fully protected in acting and relying
upon any evidence described under the immediately preceding sentence.
12.02 NO RESPONSIBILITY FOR EMPLOYER ACTION. Neither the Trustee nor
Advisory Committee has any obligation or responsibility with respect to any
action required by the Plan to be taken by an Employer, any Participant or
eligible Employee, or for the failure of any of the above persons to act or make
any payment or contribution, or to otherwise provide any benefit contemplated
under this Plan. Furthermore, the Plan does not require the Trustee or the
Advisory Committee to collect any contribution required under the Plan, or to
determine the correctness of the amount of any Employer contribution. Neither
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the Trustee nor Advisory Committee needs to inquire into or be responsible for
any action or failure to act on the part of the others. Any action required of a
corporate Employer must be by its Board of Directors or its designate. Any
action required of DST Systems, Inc. must be by its Board of Directors, the
Compensation and Organization Committee of such Board, or the designees of such
Board or Committee. Any action required of any other corporate Employer must be
by its Board of Directors.
12.03 FIDUCIARIES NOT INSURERS. The Trustee, the Advisory Committee,
the Plan Administrator and the Employers in no way guarantee the Trust Fund from
loss or depreciation. The Employers do not guarantee the payment of any money
which may be or becomes due to any person from the Trust Fund. The liability of
the Advisory Committee and the Trustee to make any payment from the Trust Fund
at any time and all times is limited to the then available assets of the Trust.
12.04 WAIVER OF NOTICE. Any person entitled to notice under the Plan
may waive the notice.
12.05 SUCCESSORS. The Plan is binding upon all persons entitled to
benefits under the Plan, their respective heirs and legal representatives, upon
the Employer, its successors and assigns, and upon the Trustee and the Advisory
Committee and their successors.
12.06 WORD USAGE. Words used in the masculine also apply to the
feminine where applicable, and wherever the context of the Plan dictates, the
plural includes the singular and the singular includes the plural.
12.07 STATE LAW. Missouri law will determine all questions arising with
respect to the provisions of this Agreement except to the extent Federal law
supersedes Missouri law.
12.08 EMPLOYMENT NOT GUARANTEED. Nothing contained in this Plan, or
with respect to the establishment of the Trust, or any modification or amendment
to the Plan or Trust, or in the creation of any Account, or the payment of any
benefit, gives any Employee, Employee-Participant or any Beneficiary any right
to continue employment, any legal or equitable right against an Employer, or
Employee of an Employer or against the Trustee, or its agents or employees, or
against the Plan Administrator, except as expressly provided by the Plan, the
Trust, ERISA or by a separate agreement.
ARTICLE XIII.
EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
13.01 EXCLUSIVE BENEFIT. Except as provided under Article III, no
Employer has any beneficial interest in any asset of the Trust and no part of
any asset in the Trust may ever revert to or be repaid to an Employer, either
directly or indirectly; nor, prior to the
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satisfaction of all liabilities with respect to the Participants and their
Beneficiaries under the Plan, may any part of the corpus or income of the Trust
Fund, or any asset of the Trust, be (at any time) used for, or diverted to,
purposes other than the exclusive benefit of the Participants or their
Beneficiaries.
13.02 AMENDMENT BY EMPLOYER. DST Systems, Inc., by duly adopted
resolution of its Board of Directors, or of the Compensation and Organization
Committee of its Board of Directors, or by written instrument executed by its
Chief Executive Officer or by its Vice President - Human Resources, has the
right at any time and from time to time to amend the provisions of this
Agreement (a) in any manner it deems necessary or advisable in order to qualify
(or maintain qualification of) this Plan and the Trust created under it under
the appropriate provisions of Code ss.401(a), and (b) to amend the provisions of
this Agreement in any other manner.
No amendment may authorize or permit any of the Trust Fund (other than
the part which is required to pay taxes and administration expenses) to be used
for or diverted to purposes other than for the exclusive benefit of the
Participants or their Beneficiaries or estates. No amendment may cause or permit
any portion of the Trust Fund to revert to or become a property of the Employer.
No amendment may be made which affects the rights, duties or responsibilities of
the Trustee or the Plan Administrator without the written consent of the
affected Trustee or the Plan Administrator. No amendment may be made which
affects the rights, duties or responsibilities of the Advisory Committee without
the written consent of the affected member of the Advisory Committee.
CODE SS.411(D)(6) PROTECTED BENEFITS. An amendment (including the
adoption of this Plan as a transferor of assets from the Former Plan) may not
decrease a Participant's Accrued Benefit, except to the extent permitted under
Code ss.412(c)(8), and may not reduce or eliminate Code ss.411(d)(6) protected
benefits determined immediately prior to the adoption date (or, if later, the
effective date) of the amendment. An amendment reduces or eliminates Code
ss.411(d)(6) protected benefits if the amendment has the effect of either (1)
eliminating or reducing an early retirement benefit or a retirement-type subsidy
(as defined in Treasury regulations), or (2) except as provided by Treasury
regulations, eliminating an optional form of benefit. The Advisory Committee
must disregard an amendment to the extent application of the amendment would
fail to satisfy this paragraph. If the Advisory Committee must disregard an
amendment because the amendment would violate clause (1) or clause (2), the
Advisory Committee must maintain a schedule of the early retirement option or
other optional forms of benefit the Plan must continue for the affected
Participants.
All amendments must be made in writing. Each amendment must state the
date to which it is either retroactively or prospectively effective.
13.03 DISCONTINUANCE. Each Employer has the right, at any time, to
suspend or discontinue its contributions under the Plan. The Board of Directors
of DST Systems, Inc., or any duly authorized committee thereof, has the right to
terminate, at any time, the
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Plan created under this Agreement. The Plan will terminate upon the date
terminated by action of the Board of Directors of DST Systems, Inc., or any duly
authorized committee thereof.
13.04 FULL VESTING ON TERMINATION. Upon either full or partial
termination of the Plan, or, if applicable, upon complete discontinuance of
contributions to the Plan, an affected Participant's right to his Accrued
Benefit is 100% Nonforfeitable, irrespective of the Nonforfeitable percentage
which otherwise would apply under Article V.
13.05 MERGER/DIRECT TRANSFER. The Trustee may not consent to, or be a
party to, any merger or consolidation with another plan, or to a transfer of
assets or liabilities to another plan, unless immediately after the merger,
consolidation or transfer, the surviving Plan provides each Participant a
benefit equal to or greater than the benefit each Participant would have
received had the Plan terminated immediately before the merger or consolidation
or transfer. The Trustee possesses the specific authority to enter into merger
agreements or direct transfer of assets agreements with the trustees of other
retirement plans described in Code ss.401(a), including an elective transfer,
and to accept the direct transfer of plan assets, or to transfer plan assets, as
a party to any such agreement.
The Trustee may accept a direct transfer of plan assets on behalf of an
Employee prior to the date the Employee satisfies the Plan's eligibility
conditions. If the Trustee accepts a direct transfer of plan assets under this
paragraph, the Advisory Committee and Trustee must treat the Employee as a
Participant in the Plan for all purposes of the Plan except the Employee is not
a Participant in the Plan for purposes of sharing in Employer contributions or
Participant forfeitures under the Plan until he actually becomes a Participant
in the Plan.
The Trustee may not consent to, or be a party to a merger,
consolidation or transfer of assets with a defined benefit plan, except with
respect to an elective transfer. The Trustee will hold, administer and
distribute the transferred assets as a part of the Trust Fund and the Trustee
must maintain a separate Employer contribution Account for the benefit of the
Employee on whose behalf the Trustee accepted the transfer in order to reflect
the value of the transferred assets. Unless a transfer of assets to this Plan is
an elective transfer, the Plan will preserve all Code ss.411(d)(6) protected
benefits with respect to those transferred assets, in the manner described in
Section 13.02. A transfer is an elective transfer if: (1) the transfer satisfies
the first paragraph of this Section 13.05; (2) the transfer is voluntary, under
a fully informed election by the Participant; (3) the Participant has an
alternative that retains his Code ss.411(d)(6) protected benefits (including an
option to leave his benefit in the transferor plan, if that plan is not
terminating); (4) the transfer satisfies the applicable spousal consent
requirements of the Code; (5) the transferor plan satisfies the joint and
survivor notice requirements of the Code, if the Participant's transferred
benefit is subject to those requirements; (6) the Participant has a right to
immediate distribution from the transferor plan, in lieu of the elective
transfer; (7) the transferred benefit is at least the greater of the single sum
distribution provided by the transferor plan for which the Participant is
eligible or
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the present value of the Participant's accrued benefit under the transferor plan
payable at that plan's normal retirement age; (8) the Participant has a 100%
Nonforfeitable interest in the transferred benefit; and (9) the transfer
otherwise satisfies applicable Treasury regulations.
An elective transfer may occur between qualified plans of any type.
DISTRIBUTION RESTRICTIONS UNDER CODE SS.401(K). If the Plan receives a direct
transfer (by merger or otherwise) of elective contributions (or amounts treated
as elective contributions) under a Plan with a Code ss.401(k) arrangement, the
distribution restrictions of Code ss.ss.401(k)(2) and (10) continue to apply to
those transferred elective contributions.
13.06 TERMINATION. Upon termination of the Plan, the distribution
provisions of Article VI remain operative, with the following exceptions:
(1) if the present value of the Participant's Nonforfeitable
Accrued Benefit does not exceed $5,000, the Advisory Committee will
direct the Trustee to distribute the Participant's Nonforfeitable
Accrued Benefit to him in lump sum as soon as administratively
practicable after the Plan terminates; and
(2) if the present value of the Participant's Nonforfeitable
Accrued Benefit exceeds $5,000 the Participant or the Beneficiary, in
addition to the distribution events permitted under Article VI, may
elect to have the Trustee commence distribution of his Nonforfeitable
Accrued Benefit as soon as administratively practicable after the Plan
terminates.
To liquidate the Trust, the Advisory Committee will purchase a deferred
annuity contract for each Participant which protects the Participant's
distribution rights under the Plan, if the Participant's Nonforfeitable Accrued
Benefit exceeds $5,000 and the Participant does not elect an immediate
distribution pursuant to Paragraph (2). The Trust will continue until the
Trustee in accordance with the direction of the Advisory Committee has
distributed all of the benefits under the Plan.
On each valuation date, the Advisory Committee will credit any part of
a Participant's Accrued Benefit retained in the Trust with its allocable share
of the Trust's income, expenses, gains and losses, both realized and unrealized.
Upon termination of the Plan, the amount, if any, in a suspense account under
such portion under Article III will revert to the Employer, subject to the
conditions of the Treasury regulations permitting such a reversion. A resolution
or amendment to freeze all future benefit accruals but otherwise to continue
maintenance of this Plan is not a termination for purposes of this Section
13.06.
ARTICLE XIV.
PROVISIONS EFFECTIVE UPON CHANGE IN CONTROL
14.01 DEFINITION OF "CHANGE IN CONTROL OF DST". For purposes of this
Plan and Trust Agreement, a "Change in Control of DST" shall be deemed to have
occurred if:
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(a) for any reason at any time less than seventy-five percent
(75%) of the members of the DST Board shall be individuals who fall
into any of the following categories: (A) individuals who were members
of the DST Board on the Effective Date; or (B) individuals whose
election, or nomination for election by DST's stockholders, was
approved by a vote of at least seventy-five percent (75%) of the
members of the DST Board then still in office who were members of the
DST Board on the Effective Date; or (C) individuals whose election, or
nomination for election, by DST's stockholders, was approved by a vote
of at least seventy-five percent (75%) of the members of the DST Board
then still in office who were elected in the manner described in (A) or
(B) above, or
(b) any "person" (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange Act"))
shall have become after the Effective Date, according to a public
announcement or filing, the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of
DST, representing thirty percent (30%) or more (calculated in
accordance with Rule 13d-3) of the combined voting power of DST's then
outstanding voting securities; PROVIDED, HOWEVER, that for purposes of
this Section 14.01(b), KCSI (which on the Effective Date is the
beneficial owner of approximately forty percent (40%) of the voting
power of DST's then-oustanding voting securities) shall not be deemed
to be "person" unless and until it ceases to be the beneficial owner of
at least thirty percent (30%) of the combined voting power of DST's
then outstanding voting securities and subsequently becomes the
beneficial owner of securities of DST representing thirty percent (30%)
or more of the combined voting power of DST's then outstanding voting
securities; or
(c) the stockholders of DST shall have approved a merger,
consolidation or dissolution of DST or a sale, lease, exchange or
disposition of all or substantially all of DST's assets, if persons who
were the beneficial owners of the combined voting power of DST's voting
securities immediately before any such merger, consolidation,
dissolution, sale, lease, exchange or disposition do not immediately
thereafter, beneficially own, directly or indirectly, in substantially
the same proportions, more than 60% of the combined voting power of the
corporation resulting from any such transaction.
14.02 PROVISIONS EFFECTIVE UPON CHANGE OF CONTROL. Upon a Change in
Control of DST as defined in Section 14.01, notwithstanding what is otherwise
provided in this Plan and Trust Agreement, the following provisions will
supersede the indicated sections and otherwise govern the operation of the Plan
and Trust from that point forward:
(a) "Section 5.03, Vesting Schedule" shall provide as
follows:
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5.03 VESTING SCHEDULE. A Participant's Accrued Benefit derived from
Employer contributions in the Plan shall be One Hundred Percent (100%)
Nonforfeitable at all times.
(b) A new subsection (o) is added to Section 10.03(A) to read
as follows:
(o) Notwithstanding anything to the contrary in this
Plan, the Trustee shall not invest any portion of the Trust in
employer securities (within the meaning of either Section
409(l) of the Code or Section 407(d)(1) of ERISA) other than
DST Shares.
(c) Except for the right to amend the Agreement pursuant to
Section 13.02 to qualify or maintain the qualification of the Plan and
the Trust created under it under the appropriate provisions of Code
ss.401(a), the Board of Directors of DST Systems, Inc., or any duly
authorized officer or committee thereof, shall not exercise its right
to amend pursuant to Section 13.02(b), discontinue or terminate
pursuant to Section 13.03, or merge pursuant to Section 13.05 the Plan
or Trust Agreement without the prior written consent to such aforesaid
action by seventy-five percent (75%) of the Participants in the Plan on
a per-capita basis.
14.03 RIGHT TO AMEND PART 1 OF ARTICLE XIV PRIOR TO CHANGE IN CONTROL
OF DST. The Board of Directors of DST Systems, Inc., or any duly authorized
committee thereof, reserves the right to amend or eliminate this Article XIV
prior to the date of a Change in Control of DST.
IN WITNESS WHEREOF, the Employer and the Trustee have executed this
Plan and Trust in Kansas City, Missouri, as of this 1st day of January, 1998.
DST SYSTEMS, INC.
By: /s/Xxxxxxx X. Xxxxx
UMB BANK, N.A.
By: /s/Xxxx Xxxxxx
-63-
