AND PERFORMANCE AWARD PLAN (As Amended and Restated Effective as of May 5, 2005) RESTRICTED SHARES AWARD AGREEMENT
1991 AMENDED AND RESTATED STOCK OPTION
AND PERFORMANCE AWARD PLAN
(As Amended and Restated Effective as of May 5, 2005)
RESTRICTED SHARES AWARD AGREEMENT
By this Agreement, Kansas City Southern, a Delaware corporation (the “Company”), awards to you, [Name], a Director of the Company or a Subsidiary, as Grantee, that number of shares (“Restricted Shares”) of the Company’s Common Stock, $.01 par value, set forth below, subject to the terms and conditions set forth below and in the attached Exhibit A hereto and in the Kansas City Southern 1991 Amended and Restated Stock Option and Performance Award Plan (As Amended and Restated Effective as of May 5, 2005), as may from time to time be amended (the “Plan”), all of which are an integral part of this Agreement.
Grant Date [Date]
Number of Restricted Shares [No. of Shares]
Period of Restriction Commencing on [Grant Date] and Ending on Earlier of (a) [One year from the
Grant Date] or (b) the day prior to the Annual Meeting of Shareholders held in [Next Year]
The Award evidenced by this Agreement shall not be effective until you have indicated your acceptance of this Agreement by signing one copy of this Agreement in the space provided below and returning it to the Corporate Secretary’s Office, in the envelope provided, within ten (10) days after your receipt of this Agreement from the Company. You should retain one copy of this Agreement for your records.
By:
Xxx X. Xxxxxxx
Associate General Counsel &
Corporate Secretary
ACCEPTED AND AGREED:
[Name of Grantee]
[Address]
[City, State, Zip]
Dated: , 200_
EXHIBIT A
to
RESTRICTED SHARES AWARD AGREEMENT
1. Plan Governs. The Award and this Agreement are subject to the terms and conditions of the Plan. The Plan is incorporated in this Agreement by this reference. All capitalized terms used in this Agreement have the meaning set forth in the Plan unless otherwise defined in this Agreement. By executing this Agreement, you acknowledge receipt of a copy of the Plan and the prospectus covering the Plan and you acknowledge that the Award is subject to all the terms and provisions of the Plan. You further agree to accept as binding, conclusive and final all decisions and interpretations by the Plan Committee with respect to any questions arising under the Plan.
2. Payment. The Restricted Shares are awarded to you without requirement of payment.
3. Transfer Restrictions. Until the restrictions lapse, the Restricted Shares may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by you, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable; provided that the designation of a beneficiary pursuant to Article 11 of the Plan shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance. Certificates will be transferred to you only as provided in paragraph 4 of this Exhibit A.
4. Certificates. You will receive certificates for your Restricted Shares after the restrictions have lapsed. Until the restrictions lapse, your Restricted Shares either will be evidenced by certificates held by or on behalf of the Company (in which case you will sign and deliver to the Company a stock power relating to the Restricted Shares so that the Company may cancel the Restricted Shares in the event of forfeiture), or the Restricted Shares will be reflected in a book-entry form or other account maintained by the Company, as determined by the Company.
5. Rights as Stockholder. During the Period of Restriction you will have all of the rights of a stockholder of the Company with respect to the Restricted Shares.
6. Lapse of Restrictions. The Restricted Shares will no longer be subject to restrictions upon the first of the following events to occur:
(a) The end of the Period of Restriction, provided your Termination of Affiliation does not occur prior to that date; or
(b) Your Termination of Affiliation due to your death; or
(c) Your Termination of Affiliation due to your Disability; or
(d) A Change of Control.
7. Forfeiture. If you have a Termination of Affiliation (other than due to death or Disability) prior to any of the events specified in paragraph 6 of this Exhibit A, then you will forfeit your Restricted Shares upon such Termination of Affiliation. All of your rights to and interest in any Restricted Shares that are forfeited under this paragraph 7 will terminate upon forfeiture. You agree to immediately repay to the Company all dividends, if any, paid in cash or in stock with respect to your forfeited Restricted Shares. For purposes of this paragraph 7, if you are a director of a corporation that is a Subsidiary of the Company, you will be deemed to have had a Termination of Affiliation as of the first day on which such corporation ceases to be a Subsidiary of the Company.
8. Tax Withholding. As of any date that your Restricted Shares would no longer be forfeited if you were to have a Termination of Affiliation on such date, or as of any other date that a Required Withholding liability occurs, you must remit the minimum amount necessary to satisfy the Required Withholding relating to your Restricted Shares. The Committee may require you to satisfy the Required Withholding by any (or a combination) of the following means: (i) a cash payment; (ii) withholding from compensation otherwise payable to you; (iii) authorizing the Company to withhold from your Restricted Shares a number of Shares having a Fair Market Value less than or equal to the Required Withholding; or (iv) delivering to the Company Mature Shares having a Fair Market Value less than or equal to the amount of the Required Withholding. The Committee may, but is not required to, approve your irrevocable election made prior to the time the Required Withholding liability occurs to have the Company withhold from your Restricted Shares a number of Shares having a Fair Market Value less than or equal to the Required Withholding. The Company will not deliver your certificates for your Restricted Shares unless you remit (or in appropriate cases agree to remit) the Required Withholding relating to your Restricted Shares as described above.
9. Notices. Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of its Secretary. Any notice to be given to you shall be addressed to you at the address listed in the Company’s records. By written notice referencing this paragraph of this Agreement, either party may designate a different address for notices. Any notice under this Agreement to the Company shall become effective upon receipt by the Company. Any notice under this Agreement to you will be deemed to have been delivered to you when delivered in person or when deposited in the United States mail, addressed to you at your address on the shareholder records of the Company, or such other address as you have designated under this paragraph.
10. Tax Consultation. Your signature on this Agreement means that you understand that you may incur tax consequences as of any date that your Restricted Shares would no longer be forfeited if you were to have a Termination of Affiliation on such date. You agree to consult with any tax consultants you think advisable in connection with the Restricted Shares and you acknowledge that you are not relying, and will not rely, on the Company for any tax advice. Please see Section 16.2 of the Plan regarding Code Section 83(b) elections.
11. Amendment. The Company reserves the right to amend the Plan at any time. The Committee reserves the right to amend this Agreement at any time.
12. Severability. If any part of this Agreement is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not serve to invalidate any part of this Agreement not declared to be unlawful or invalid. Any part so declared unlawful or invalid shall, if possible, be construed in a manner which gives effect to the terms of such part to the fullest extent possible while remaining lawful and valid.
13. Applicable Law. This Agreement shall be governed by the laws of the State of Delaware other than its laws respecting choice of law.
14. Headings. Headings are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.
