EXHIBIT 10.5
 
RESTRICTED STOCK UNIT AGREEMENT
 
 
DST SYSTEMS, INC. 2005 EQUITY INCENTIVE PLAN
 
 
(Time Vesting; Tier 1 Grantee)

 
     
THIS AGREEMENT is made and entered into as of the "Grant Date" (see Paragraph
1(a)), by and between DST SYSTEMS, INC. ("Company") and recipient ("Employee")
of an Award under the DST Systems, Inc. 2005 Equity Incentive Plan, as amended
and interpreted from time to time (the "Plan").
    
WHEREAS, Awards under the Plan are administered by the Compensation Committee of
Company’s Board of Directors or other committee designated by the Board (the
"Committee") or Company officer to which the Committee delegates authority as
provided in the Plan;

WHEREAS, the Committee wishes to grant to Employee rights ("Restricted Stock
Units" or "RSUs") to receive shares of Company common stock ("Shares") on or
after the time the RSUs "Vest," which occurs with respect to all or a portion of
the RSUs on the "Vesting Dates" referenced in Paragraph 1(a) subject to the
other terms and provisions of this Agreement generally including without
limitation requirements for continued "Employment" (as defined in Paragraph
3(h)) and the risk of forfeiture as provided for in Paragraph 3(c); and

WHEREAS, Company, in its discretion, may allow Employee the potential tax
benefit of deferring the issuance of Shares beyond the RSU Vesting Dates as
provided in Paragraph 3(f), and, therefore, an RSU Vesting Date may not be the
same date as the issuance of one or more of the Shares underlying the Vested
RSUs.

The parties agree as follows:
    
1.    GRANT OF RSU.

a.    RSU Grant. The Grant Date, the number of RSUs granted in this Award, and
the Vesting Dates are shown in the online or other grant communication to which
this Agreement is attached. Vesting of each RSU as provided in Section 3
entitles Employee to the issuance of one Share, subject to the other terms and
conditions of the Plan and this Agreement. In order for the grant to be
effective, Employee must timely confirm acceptance of the terms and conditions
of this Agreement pursuant to the instructions in the communication.

b.    Administration. Company’s Chief Financial Officer may adopt Administrative
Procedures for RSUs and the Committee may maintain rules for Awards issued under
the Plan. As amended from time to time, such procedures and rules (collectively,
the "Rules") shall apply to all actions taken with respect to this Agreement.
The Committee or its delegate may take any action deemed necessary or
appropriate to administer this Agreement and the issuance of Shares attributable
to Vested RSUs in accordance and consistent with Internal Revenue Code ("Code")
Section 409A and regulations and guidance issued thereunder ("409A").

2.    RESTRICTIONS.

a.    Non-Transferability. Except as may be permitted under the Plan with
respect to transfers to a Permitted Transferee, the RSUs are not transferable
during the "Original Delay Period" (as defined in Paragraph 3(f)) and through
any "Extended Issuance Date" (as defined in Paragraph 3(f)), by sale,
assignment, disposition, gift, exchange, pledge, hypothecation, or otherwise,
other than as provided in Paragraph 3(i) upon Employee’s death. Any attempted
disposition of the RSUs, or the levy of any execution, attachment or similar
process upon the RSUs prior to issuance of the Shares, shall be null and void
and without effect.

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b.     No Privilege of Stock Ownership; Dividend Equivalents. Holding RSUs does
not give Employee the rights of a shareholder (including without limitation the
right to vote or receive dividends or other distributions) with respect to any
Shares that Company may issue under the terms and conditions of this Agreement
before the date such Shares are issued pursuant to this Agreement.
Notwithstanding the foregoing, if Company declares a dividend on Shares, then a
"Dividend Equivalent" (as defined in the Plan) in the form of additional RSUs
("Dividend Equivalent RSUs") will be credited and paid on the RSUs (including
Dividend Equivalent RSUs) as follows:

(i)    The number of additional Dividend Equivalent RSUs credited (which may
include fractional RSUs) shall be the quotient obtained by dividing the
aggregate cash amount that would have been paid as a dividend on the Shares
underlying all RSUs (including any Dividend Equivalent RSUs) then credited to
Employee in this Award (whether or not such RSUs have Vested) by the Fair Market
Value of a Share on the date such dividend payment is made to Company
shareholders.

(ii)    All rights to any Dividend Equivalent RSUs shall be subject to the
restrictions on transferability described in Paragraph 2(a) and shall become
null and void upon forfeiture of the RSUs under Paragraph 3(c). Dividend
Equivalent RSUs shall be subject to the same risk of forfeiture and the same
Vesting terms and conditions as the original RSUs. To the extent that an
Extended Issuance Delay (as defined in Paragraph 3(g)) is in effect with respect
to any Vested RSUs, Dividend Equivalent RSUs will be determined and credited on
such RSUs in accordance with the same rules set forth above. Any Shares relating
to Vested Dividend Equivalent RSUs credited to Employee pursuant to this
Agreement shall be issued at the same time as the Shares relating to the
original underlying RSUs ("Issuance Date"); provided, however, if Company
declares a dividend for which the dividend record date is prior to the Issuance
Date, but for which the dividend payment date is on or after the Issuance Date
(a "Straddle Dividend"), the Shares relating to such Dividend Equivalent RSUs
shall be issued within ten (10) business days of such Straddle Dividend payment
date, rather than on the Issuance Date.

3.    VESTING, FORFEITURE, AND SHARE ISSUANCE.

a.     Vesting Date(s). The RSUs shall become Vested on the Vesting Date(s) as
shown in the online or other grant communication to which this Agreement is
attached.

b.     Other Vesting.

(i)    Effect of Change in Control on Vesting. Subject to Section 6 of this
Agreement and Section 14 of the Plan, upon a “Termination Without Cause” or a
termination of Employment in connection with a “Resignation for Good Reason”
(each as defined in Paragraph 3(h)), in each case that occurs subsequent to the
date of a Change in Control (as defined in Paragraph 6(a)), all RSUs shall
become fully Vested. Prior to any such event, the RSUs shall continue to Vest as
provided in Paragraph 2(a).

(ii)    Effect of Death and Disability on Vesting. In addition to any potential
Vesting which may occur as provided in this Section 3 and subject to the other
terms and conditions of this Agreement, Vesting shall occur in full as of the
date of Employee’s "Disability" (as that term is defined in the Rules) or death;
provided, however, in no event shall Vesting occur on account of Employee's
death or Disability if Employee's Employment has been terminated before the date
of Employee's death or Disability. Any death or Disability occurring after
forfeiture of the RSUs under Paragraph 3(c) of this Agreement shall not affect
the forfeited status of such RSUs.

(iii)    Effect of a Reduction in Force, Business Unit Divestiture, or
Retirement on Vesting. Upon either a “Reduction in Force,” “Business Unit
Divestiture” or "Retirement (each as defined in Paragraph 3(h) and an "Event"),
a pro rata portion of the tranche of RSUs scheduled to Vest on the next Vesting
Date (the "Tranche") shall Vest as set forth in (iv) below. The RSUs that do not
Vest under this Paragraph 3(b)(iii) shall be forfeited as of the date of the
Event.

(iv)    Calculations. To determine the pro rata portion of the Tranche Vesting,
divide the number of RSUs scheduled to Vest on the next scheduled Vesting Date
by 12 and multiply by the number of months from one year prior to the upcoming
Vesting Date ("Commencement Date") to the Event. The pro rata calculations shall
include the calendar month in which the Commencement Date occurred only if the
date is prior to the 16th day of such month and shall include the calendar month
in which the Event occurred only if the date is subsequent to the 15th day of
such month. For any calculations in this Agreement that require the number of
RSUs to be divided or for a designated percentage of the RSUs to Vest, if such
number is not evenly divisible or an applied percentage or formula would result
in the issuance of a fractional Share, any fractional Share shall, except as
otherwise provided in Paragraph 3(d)(iv), be rounded up to the next whole number
and the Corporate Secretary’s office shall allocate the additional Shares(s), if
applicable, to the Vesting

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tranche. In no event shall Vesting occur with respect to a number of RSUs that
exceeds the original RSU grant amount, plus if any, additional RSUs resulting
from the crediting of Dividend Equivalents pursuant to Paragraph 2(b).
    
c.     Forfeiture. Forfeiture of RSUs shall occur under the circumstances set
forth below. Upon any such forfeiture, under no circumstance will Company be
obligated to make any payment to Employee, and no Shares shall be issued, as a
result of such forfeited RSUs. In addition to the forfeiture of all RSUs, upon
forfeiture for "Cause" (as defined in Paragraph 3(h)) all Shares previously
issued under this Agreement shall also be forfeited and transferred to Company
as provided in Section 5.

(i)    Subject to the other provisions of this Section 3, all non-Vested RSUs
shall be forfeited if Employee ceases Employment during the Original Delay
Period (even if a portion of the RSUs have Vested).

(ii)    Notwithstanding any other provision of this Agreement, Cause shall
result in forfeiture of the RSUs and all Shares issued pursuant thereto.
Employee acknowledges and agrees that forfeiture for Cause can occur during any
Original Delay Period or Extended Delay Period, prior or subsequent to any RSU
Vesting or Share issuance and whether or not Employee is eligible for a
Retirement.

d.    Share Issuance.

(i)    Except as otherwise provided herein, upon the Vesting of a specific
number of RSUs as provided in Paragraphs 3(a) and (b), Company shall issue a
corresponding number of Shares to Employee as soon as administratively practical
after the Vesting Date; provided that tax withholding obligations have been
satisfied as provided in Section 4. The preceding sentence notwithstanding,

(A)
if the Vesting event is Retirement, Reduction in Force, Termination Without
Cause, Resignation for Good Reason or Business Unit Divestiture, no issuance of
Shares is to occur with respect to such Vesting event unless it is also a 409A
Separation;

(B)
if the Vesting event is Retirement, Reduction in Force, Termination Without
Cause, Resignation for Good Reason or Business Unit Divestiture but such Vesting
event is not a 409A Separation, issuance of Shares shall not occur until
Employee's 409A Separation;

(C)
if the Vesting event is a Change in Control and the RSUs are subject to 409A, no
issuance of Shares is to occur unless that Change in Control is also a 409A
Change in Control; and

(D)
if the Vesting event is a Change in Control but such Change in Control is not a
409A Change in Control, no issuance of Shares is to occur until the first to
occur of Employee's 409A Separation or a 409A Change in Control.

(ii)    Company will not issue Shares upon a Vesting Date to the extent that
either Employee has elected an "Extended Issuance Delay" (as defined in
Paragraph 3(f)) and/or the issuance of Shares is subject to the six-month delay
period required under Section 409A a "409A Issuance Delay" (as defined in
Paragraph 3(g)). Employee acknowledges and agrees that Company will not issue
any Shares pursuant to this Agreement any earlier than the first business day
after the Vesting Date nor any later than ninety days after such Vesting Date.
If one or both of an Extended Issuance Delay or a 409A Issuance Delay applies,
Company shall issue the Shares as soon as administratively practical (but no
earlier than one business day and no later than ninety days) after expiration of
the latest ending applicable period. Company’s transfer agent may issue Shares
in certificate or book entry form as determined by Company’s Corporate
Secretary.

(iii)    Upon issuance of the Shares, Employee shall have all rights of a
shareholder with respect thereto including the right to vote and receive all
dividends or other distributions made or paid with respect to the Shares. The
number of Shares issuable in any circumstance shall be reduced by the number of
Shares withheld for taxes as provided in Section 4.

(iv)    Except as otherwise expressly provided in this Agreement, at any time a
fractional Share would otherwise be issued pursuant to this Agreement, such
fraction shall be rounded up or down to the nearest whole Share in accordance
with the applicable rounding methodology set forth in the Rules or other
applicable rules or procedures.

e.     Limited Accelerated Issuance of Shares for FICA Related Taxes. Paragraph
4(b) governs the limited accelerated payment of Shares underlying RSUs for the
satisfaction of "FICA Related Taxes" (as defined in Paragraph 4(b)) if those
should occur for any reason prior to the Vesting Date.

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f.    Extended Issuance Delays. The period from the Grant Date to a Vesting Date
is the "Original Delay Period." In circumstances allowed by the Rules and where
a valid and timely Section 409A deferral election has been made (an "Extended
Issuance Delay"), Shares that Company would otherwise issue after the Original
Delay Period may be issued on the Extended Issuance Date timely elected by
Employee. The period from the Vesting Date to the Extended Issuance Date is the
"Extended Delay Period."

g.     Section 409A Issuance Delays. To the extent that an RSU is or becomes
subject to 409A and Employee is a "specified employee" under Company’s Specified
Employee Identification Procedures, then, notwithstanding any other provision of
this Agreement or the Rules and for the avoidance of negative tax consequences
to Employee, any issuance of Shares or cash pursuant to this Agreement on
account of Employee's 409A Separation shall be delayed until the first day after
six-months following such 409A Separation, as required for the avoidance of
penalties and/or excise taxes under 409A ("409A Issuance Delay").

h.     Definitions. For purposes of this Agreement, the following terms have the
meanings set forth below:

(i)    A "409A Change in Control" is a Change in Control that also qualifies as
a change in control under 409A(a)(2)(A)(v).

(ii)    A "409A Separation" is Employee’s separation from service with Company
as determined under 409A(a)(2)(A)(i). A 409A Separation may occur on account of
any separation from service including separation due to death, disability,
resignation, or termination of employment by Company with or without Cause.

(iii)    A "Business Unit Divestiture" is Employee's termination of Employment
in connection with the consummation of a merger, reorganization, consolidation,
or sale of assets, or stock or other transaction that the Committee determines
is a business unit divestiture event, that involves a Subsidiary (as defined in
Subparagraph 3(h)(v)(B)), joint venture, division or other business unit, and
that results in a group of employees of such business unit being employed by an
acquiring company and no longer having employment with Company.

(iv)    "Cause" means either a violation of Section 5 or termination of
Employment for any act of dishonesty, willful misconduct, gross negligence,
intentional or conscious abandonment or neglect of duty, criminal activity,
fraud or embezzlement, any unauthorized disclosure or use of material
confidential information or trade secrets, or violation of any noncompete or
non-disclosure agreement to which Employee is subject.

(v)    "Employment" means Employee is regularly and continuously employed, for
more than fifty percent (50%) of the number of hours designated for base salary
purposes as full-time employment, by:

(A)
Company;

(B)
any corporation in an unbroken chain of corporations beginning with Company or
in an unbroken chain of corporations ending with Company if, on the Grant Date,
each corporation other than the last corporation in the unbroken chain owns
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain or any
entity in which Company has a direct or indirect equity interest of at least
fifty percent (50%) ("Subsidiary");

(C)
any individual or entity that directly or through one or more intermediaries
controls or is controlled by or under common control with Company ("Affiliate");
or

(D)
any entity in which Company directly or indirectly owns stock possessing such
minimum percentage (at least twenty percent (20%)) of the total combined voting
power of all classes of stock or owns such minimum percentage (at least twenty
percent 20%)) of the capital interests or profit interests as the Committee from
time to time determines for purposes of this Subparagraph 3(h)(v) (also an
"Affiliate").

Employee is not deemed to have terminated Employment through, and the RSUs shall
not be forfeited solely as a result of, any change in Employee’s duties or
position or Employee’s temporary leave of absence approved by Company.

(vi)    The "Extended Issuance Date" is (a) if a Retirement Installment applies,
each date during an Extended Delay Period that Employee shall receive an
issuance of Shares in an installment, or if earlier, the date of death following

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Retirement; or (b) if a Retirement Installment does not apply, the earlier of
(i) the Extended Issuance Date elected by Employee pursuant to the Rules; or
(ii) the date of a 409A Separation during the Extended Delay Period.

(vii)    A "Reduction in Force" means a termination of Employee's Employment
with Company during the Original Delay Period as part of Company’s termination
of the employment of at least ten (10) employees within a business unit in
connection with a single plan of reduction to occur within a rolling 90-day
period or longer period incorporated into a specific plan of reduction.

(viii)    A "Resignation for Good Reason" means Employee's resignation for good
reason (as defined below) subsequent to the date of a Change in Control during
the three-year period following such date if: (x) Employee provides written
notice to the Company Secretary within ninety (90) days after the initial
occurrence of a good reason event describing in detail the event and stating
that Employee's employment will terminate upon a specified date in such notice
(the "Good Reason Termination Date"), which date is not earlier than thirty (30)
days after the date such notice is provided to Company (the "Notice Delivery
Date") and not later than ninety (90) days after the Notice Delivery Date, and
(y) Company does not remedy the event prior to the Good Reason Termination Date.
In no event shall there be a Resignation for Good Reason unless such resignation
also constitutes a 409A Separation. For purposes of this Agreement, Employee
shall have "good reason" if there occurs without Employee's consent:

(A)
a material reduction in the character of the duties assigned to Employee or in
Employee’s level of work responsibility or conditions;

(B)
a material reduction in Employee’s base salary as in effect immediately prior to
the Change in Control or as the same may have been increased thereafter;

(C)
the material relocation of Employee's principal office to a location at least 35
miles outside of the metropolitan area where such office was located at the time
of the Change in Control, except for required travel on Company business to an
extent substantially consistent with Employee’s obligations immediately prior to
the Change in Control; or

(D)
any material breach by Company of an employment agreement between Company or its
successor and Employee, provided, however, that Employee shall not have "good
reason" under this Subparagraph (viii) on account of any alleged breach of an
employment agreement based on a material reduction in employee benefits as of a
Change in Control that is immaterial or where benefits to Employee from
participation in such employee benefit plans are not reduced by more than ten
percent (10%) in the aggregate.

(ix)    A "Retirement" means, notwithstanding the definition of "Retirement"
under the Plan, a termination of Employee's Employment (either by Employee
voluntarily or by Company as a Termination Without Cause) that meets either of
the following criteria: (i) termination is at age 59 ½ or older with no less
than 3 years of service, or (ii) termination is at age 55 or older with no less
than 20 years of service.

(x)    A "Termination Without Cause" means Company’s termination of Employee’s
Employment that is not for Cause.

(xi)     A "Retirement Installment" is an election made pursuant to the Rules to
receive, after Retirement and prior to death, any Share issuance amounts in
incremental installments over the number of years elected by Employee as allowed
by the Rules.

i.    Payments to Third Party. Upon death of Employee followed by a valid
written request for payment, the Shares shall be issued as soon as
administratively practical to Employee’s beneficiary named in a written
beneficiary designation filed with Company’s Corporate Secretary on a form for
the Plan or, if there is no such designated beneficiary, to Employee’s executor
or administrator or other personal representative acceptable to the Corporate
Secretary. Any request to pay any person or persons other than Employee shall be
accompanied by such documentation as Company may reasonably require, including
without limitation, evidence satisfactory to Company of the authority of such
person or persons to receive the payment.

4.    TAXES.

a.    Tax Withholding; Valuation. Employee understands and agrees that, at the
time any tax withholding obligation arises in connection with (i) a Share
issuance, (ii) Retirement-eligibility, or (iii) an RSU Vesting, Company may
withhold, in Shares

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if Company requires or a valid election applies under this Section 4 or in cash
from payroll or other amounts Company owes or will owe Employee, any applicable
withholding, payroll and other required tax amounts due upon Vesting, issuance
of Shares, Retirement-eligibility, or any other applicable event. Tax
Withholding may be made by any means permitted under the Plan, as approved by
the Committee, and as permitted under the law. The valuation of the RSUs, and
any Shares that Company may issue attributable to Vested RSUs, for tax and other
purposes shall be as set forth in the Rules and in applicable laws and
regulations ("Valuation Rules"). In the absence of the satisfaction of tax
obligations, Company may refuse to issue the Shares.

b.    Acceleration of Share Issuance to Cover Employment Tax Liabilities.
Employee understands and agrees that certain tax withholding amounts may be due
prior to an issuance of Shares. For instance, withholding amounts for the
Federal Insurance Contributions Act tax imposed under Code Sections 3101,
3121(a) or 3121(v)(2) ("FICA Tax") may be due upon Employee meeting
Retirement-eligibility requirements during an Original Delay Period subsequent
to a Change in Control. If Shares are issued on an accelerated basis to satisfy
the FICA Tax as provided in this Paragraph, then Employee may have income tax at
source on wages imposed under Code Section 3401 or the corresponding withholding
provisions of applicable state, local, or foreign tax laws (together with the
FICA Tax, the "FICA Related Taxes"). When and in the manner permitted by the
Committee or its delegate in their sole discretion and unless otherwise
prohibited by law, Company may satisfy (or may allow Employee to elect to
satisfy) the FICA Related Taxes through the accelerated issuance of Shares
(including the accelerated issuance of Shares for which a Vesting Date may not
have yet occurred but for which the underlying RSU is no longer subject to
substantial risk of forfeiture). In no event, however, may the value (determined
under the Valuation Rules) of the total accelerated Share issuance exceed the
aggregate amount of the FICA Related Taxes.

c.    Satisfaction in Share Retention. Subject to the requirements of the
Committee or its delegate in their sole discretion and unless otherwise
prohibited by law, Company may require Employee to satisfy, or may allow
Employee (or his or her guardian, legal representative or successor) to
irrevocably elect in writing on a Company designated form to satisfy any income
tax withholding obligation in connection with the RSUs through the retention of
whole Shares which would otherwise have been issued, which Shares shall not
belong to Employee upon such retention.

d.    Remedies. If withholding is not effected by Company for any reason at the
time of the taxation event, then Employee agrees to pay Company any withholding
amounts due within the deadline imposed by Company. If, within the deadline
imposed by Company, Employee has not paid any withholding amounts due or,
subject to compliance with Treasury Regulations § 1.409A-3(j)(4), has not
elected, if allowed by the Committee or its delegate in their sole discretion,
whether to have Shares retained for taxes or to pay cash for the tax
withholding, then Company may, at its sole discretion (a) retain whole Shares
which would otherwise have been issued (including without limitation withdrawal
of Shares that had previously been placed into Employee’s book entry account),
(b) deduct such amounts in cash from payroll or other amounts Company owes or
will owe Employee, or (c) effect some combination of Share retention and cash
deduction (collectively, “Remedies for Amounts Owed”).

5.    VIOLATION OF NON-SOLICITATION, NONUSE AND NONDISCLOSURE PROVISIONS.
Employee acknowledges that Employee’s agreement to this Section 5 is a key
consideration for the grant of the RSUs. Employee hereby agrees with Company as
follows:

a.    Non-Solicitation of Employees, Customers and Prospective Customers.
Employee agrees that during the twelve (12) month period subsequent to
termination of employment with “Employer” (as defined in Paragraph 5(g)),
Employee will not solicit any employee of Employer or of any “Applicable Company
Entity” (as defined in Paragraph 5(g)) to leave such employment to become
employed by a competitor of Employer or of any Applicable Company Entity.
Employee further agrees that, during the twelve (12) month period subsequent to
termination of employment with Employer, Employee will not solicit or contact
any person, business or entity which was a “Customer” or “Prospective Customer”
(each as defined in Paragraph 5(g)) for purposes of selling goods or services of
the type sold or rendered by Employer or any Applicable Company Entity.

b.    Ownership of Confidential Information, and Inventions and Works. All
"Confidential Information," "Inventions" and "Works" (each as defined in
Paragraph 5(g)) and documents and other materials containing Confidential
Information, Inventions and Works are the exclusive property of Employer.
Employee shall make full and prompt disclosure to Employer of all Inventions.
Employee assigns and agrees to assign to Employer all of Employee’s right, title
and interest in Inventions. Employee acknowledges and agrees that all Works are
"works made for hire" under the United States copyright laws and that all
ownership rights vest exclusively in Employer from the time each Work is
created. Should a court of competent jurisdiction hold that a Work is not a
"work made for hire," Employee agrees to assign and hereby assigns to Employer
all of Employee’s right, title and interest in the Work. In the event any
Invention or Work may be construed to be non-assignable, Employee hereby grants
to Employer a perpetual, royalty-free, non-exclusive license to make, use, sell,
have made, and/or sublicense such non-assignable Invention or Work. Employee
agrees to assist Employer to obtain and vest its title to all Inventions and
Works, including any patent or copyright applications or patents or copyrights
in any country, by executing all necessary or desirable documents, including
applications for

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patent or copyright and assignments thereof, during and after employment,
without charge to Employer, at the request and expense of Employer.

c.    Recordkeeping and Return of Confidential Information, Inventions and
Works. Employee agrees to maintain regular records of all Inventions and Works
developed or written while employed with Employer. Employee agrees to comply
with any procedures disseminated by Employer with respect to such recordkeeping.
Employee agrees to provide such records to Employer periodically and/or upon
request by Employer. Employee agrees to return to Employer all Confidential
Information, Inventions and Works in any tangible form, and copies thereof in
the custody or possession of Employee, and all originals and copies of analyses,
compilations, studies or documents pertaining to any Confidential Information,
Inventions and Works, in whatever form or medium, upon a request by Employer, or
upon termination of employment.

d.    Nonuse and Nondisclosure. Employee shall not, either during or after
Employee’s employment by Employer, disclose any Confidential Information,
Inventions or Works to any other person or entity outside of his employment, or
use any Confidential Information, Inventions or Works for any purpose without
the prior written approval of an officer of Employer, except to the extent
required to discharge Employee’s duties assigned by Employer.

e.    Subsequent Employer Notice. During the term of Employee’s employment with
Employer and for the longer of one year thereafter, or any period in which the
non-solicitation obligation set forth herein applies (the "Identification
Period"), Employee agrees to identify to potential subsequent employer(s),
partner(s) or business associate(s) Employee’s obligations under this Agreement
prior to committing to a position with the employer(s), partner(s), or business
associate(s). Employee agrees that Employer may, at its discretion, provide a
copy of Section 5 of this Agreement to any of Employee’s subsequent employer(s),
partner(s), or business associate(s), and may notify any or all of them of
Employee’s obligations under this Agreement. During the Identification Period,
Employee shall give written notice to Employer’s Human Resources Department
identifying any subsequent employer(s), partner(s), or business associate(s) of
Employee.

f.    Remedies. Notwithstanding anything to the contrary herein, if in
Employer’s sole discretion an event has occurred that constitutes Cause
(including, without limitation, a violation of this Section 5), whether prior
to, on or after an RSU Vesting or Share issuance date or during an Original
Delay Period or Extended Delay Period, then, in addition to all other remedies
available to Company, the RSUs for which Share issuance has not occurred shall
be immediately forfeited to Company and any Shares that have been issued
pursuant the Vesting of underlying RSUs, if such issuance has occurred, shall be
immediately transferred by Employee to Company (with Employee taking all steps
necessary to effect the transfer and provided that, if the Shares are no longer
available for transfer, Employee shall reimburse to Company the amount of
Employee’s ordinary income from the Vesting of the RSUs); provided, however,
that no consideration shall be paid by Company to Employee for any forfeiture,
transfer or reimbursement pursuant to this Paragraph 5(f). Company may apply all
or any of the Remedies for Amounts Owed, as described in Paragraph 4(d).
Employee agrees that the provisions of Section 5 hereof are necessary for
protection of the business of Company and that violation of such provisions is
cause for termination of employment and would cause irreparable injury to
Company not adequately remediable in damages. Employee agrees that any breach of
its obligations under Section 5 shall, in addition to any other relief to which
Company may be entitled, entitle Company to temporary, preliminary and final
injunctive relief against further breach of such obligations, along with
attorneys’ fees and other costs incurred by Company in connection with such
action. Employee agrees to the waiver of any requirement for the posting of any
bond as a condition to such equitable relief.

g.    Section 5 Definitions. For purposes of Section 5, the following terms have
the meanings set forth below:

(i)    “Applicable Company Entity” means Company, a Subsidiary (as defined in
Paragraph 3(h)), or Affiliate (as defined in Paragraph 3(h) and also as defined
in Paragraph 5(g)(iv)) with which Employee worked or was involved during the
course of his employment with Employer or about which Employee gained
Confidential Information during the course of Employee’s employment with
Employer.

(ii)    “Confidential Information” means non-public information about Company,
its Subsidiaries and Affiliates, including without limitation:

(A)
inventions not disclosed to the public by Company, its Subsidiary or Affiliate,
products, designs, prototypes, data, models, file formats, interface protocols,
documentation, formulas, improvements, discoveries, methods, computer hardware,
firmware and software, source code, object code, programming sequences,
algorithms, flow charts, test results, program formats and other works of
authorship relating to or used in the current or prospective business or
operations of Company, Subsidiaries and Affiliates, all of which is Confidential
Information,

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whether or not patentable or made on Employer premises or during normal working
hours; and

(B)
business strategies, trade secrets, pending contracts, unannounced services and
products, financial projections, customer lists, information about real estate
Company, its Subsidiary or Affiliate is interested in acquiring, and non-public
information about others obtained as a consequence of employment by Employer,
including without limitation information about customers and their services and
products, the account holders or shareholders of customers of Company,
Subsidiaries and Affiliates, and associates, suppliers or competitors of
Company, Subsidiaries and Affiliates.

(iii)    “Customer” means any person, business or entity that has done business
with Employer or any Applicable Company Entity at any time during the twelve
(12) month period prior to the date of termination of Employee’s employment.

(iv)    “Employer” means any Company-related entity that has employed Employee,
whether it be Company, its Subsidiary (as defined in Paragraph 3(h)), or
Affiliate (as defined in Paragraph 3(h) and also for purposes of this Section 5
including any entity in which Company has a direct or indirect equity interest
of at least twenty-five percent (25%)).

(v)    “Inventions” means all discoveries, improvements, and inventions relating
to or used in the current or prospective business or operations of Company,
Subsidiaries and Affiliates, whether or not patentable, which are created, made,
conceived or reduced to practice by Employee or under Employee’s direction or
jointly with others during Employee’s employment by Employer, whether or not
during normal working hours or on the premises of Employer.

(vi)    “Prospective Customer” means any person, business or entity to whom or
to which Employer or any Applicable Company Entity has made, at any time during
the twelve (12) month period prior to the date of termination of Employee’s
employment, a proposal to do business.

(vii)    “Works” mean all original works fixed in a tangible medium of
expression by Employee or under Employee’s direction or jointly with others
during Employee’s employment by Employer, whether or not during normal working
hours or on the premises of Employer, and related to or used in the current or
prospective business or operations of Employer.

h.    Survival. Except as limited in time in Paragraph 5(a), Employee’s
obligations in this Section 5 shall survive and continue beyond the RSU Vesting
or forfeiture dates, the Original Delay Period or an Extended Delay Period, any
issuance or transfer of Shares, and any termination or expiration of the
Agreement for any reason.

i.    Competing Obligations.  Employee may have entered or may enter into an
agreement that contains an obligation protective of any Company-related entity
that is similar to, but more or less restrictive than, an obligation set forth
in this Section 5 ("Competing Obligation").  By executing this Agreement,
Employee agrees that if any Competing Obligation applies, he shall be bound by
the obligation (whether in this Agreement or in a separate agreement) that is
the most protective to the Company-related entity.  

j.      Enforceability.  If the final judgment of a court or arbitrator with
competent jurisdiction declares that any term or provision of this Section 5 is
invalid or unenforceable, Employee agrees that the court or arbitrator making
the determination of invalidity or unenforceability will have the power to
reduce the scope, duration, or geographic area of the applicable term or
provision, to delete specific words or phrases, or to replace any invalid or
unenforceable term or provision with a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision, and that the terms and provisions of this
Section 5 will be enforceable as so modified.  Employee further agrees that if
any part of this Section 5 is held by a court or arbitrator with competent
jurisdiction to be invalid, illegal or incapable of being enforced in whole or
in part by reason of any rule of law or public policy, and cannot be modified in
accordance with this paragraph, such part shall be deemed to be severed from the
remainder of this Section 5 for the purpose only of the particular legal
proceedings in question, and all other covenants and provisions of this
Agreement shall in every other respect continue in full force and effect, and no
covenant or provision shall be deemed dependent upon any other covenant or
provision.

 

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6.    CHANGE IN CONTROL.

a.    Definition of Change in Control. For purposes of this Agreement, a "Change
in Control" shall have the same meaning as the definition of such term in the
Plan, as amended and interpreted from time to time, as of the date of the event
that may cause a Change in Control.

Notwithstanding the occurrence of a Change in Control under the applicable
definition, a Change in Control shall not occur with respect to Employee if, in
advance of such event, Employee agrees with Company in writing that such event
shall not constitute a Change in Control; provided, however, in no event shall
Employee's agreement under this paragraph affect a payment subject to 409A from
being made where such payment event is a 409A Change in Control.
b.     Committee Action in Connection with Change in Control. The Committee (as
constituted before such Change in Control) has the authority to take the actions
set forth in Section 14 of the Plan. For instance, by way of example and not
limitation, the Committee (as constituted before such Change in Control) may
determine in its sole discretion that Company, or any successor company in the
applicable merger or sale agreement, may pay cash to Employee in an amount equal
to the amount (as determined by the Committee) that could have been attained by
Employee had the Award been currently payable, in lieu of issuing Shares that
would otherwise be issued in connection with Vesting or the termination of an
Extended Delay Period on or after the Change in Control.
 
7.    GENERAL.

a.    No Employment Contract. Except to the extent the terms of any separate
written employment contract between Employee and Company may expressly provide
otherwise, Company shall be under no obligation to continue Employee’s
employment with Company for any period of specific duration and may terminate
such employment at any time, for Cause or as a Termination Without Cause.

b.    Compliance With Certain Laws and Regulations. If the Committee determines
that the consent or approval of any governmental regulatory body or that any
action with respect to the RSUs is necessary or desirable in connection with the
granting of the RSUs or the issuance of Shares, Employee shall supply Company
with such representations and information as Company may request and shall
otherwise cooperate with Company in obtaining any such approval or taking such
action.

c.    Construction and No Waiver. Notwithstanding any provision of this
Agreement, the granting of the RSUs and the issuance of the Shares are subject
to the provisions of the Plan and any procedures or Rules promulgated thereunder
by the Committee or its delegate. The failure of Company in any instance to
exercise any of its rights granted under this Agreement, the Plan or the Rules
shall not constitute a waiver of any other rights that may arise under this
Agreement.

d.    Notices. Any notice required to be given or delivered to Company under the
terms of this Agreement shall be in writing and addressed to Company in care of
its Corporate Secretary at its corporate offices, and such notice shall be
deemed given only upon actual receipt by Company. Any notice required to be
given or delivered to Employee shall be in writing and addressed to Employee at
the address on file with Company’s Human Resources Department or such other
address specified in a written notice given by Employee to Company, and all such
notices shall be deemed to have been given or delivered upon personal delivery
or upon deposit in the U.S. mail, postage prepaid and properly addressed to the
party to be notified.

e.    Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of Delaware without reference to its principles of
conflicts of law.

f.    Entire Agreement. Subject to Paragraph 5(i), this Agreement contains the
entire agreement between the parties with respect to the subject matter hereof,
and supersedes all prior agreements or understandings between the parties
relating thereto.

g.     Amendment. This Agreement may be amended only in a manner approved by
Company evidencing both parties’ agreement to the amendment. This Agreement may
also be amended, without prior notice to Employee and without Employee's
consent, (i) prior to any Change in Control by the Committee if the Committee in
good faith determines that the amendment does not materially adversely affect
any of Employee's rights under this Agreement or (ii) at any time if the
Committee deems it necessary or appropriate to ensure that the RSUs either
remain exempt from, or compliant with, Internal Revenue Code Section 409A.
    
h.    Acknowledgement. The RSU grant and this Agreement are subject to the terms
and conditions of the Plan, the Rules, and any other rules or procedures adopted
by the Committee or its delegate. The Plan is incorporated in this Agreement by
reference and all capitalized terms used in this Agreement have the meaning set
forth in the Plan, unless this Agreement specifies a different meaning. Employee
agrees to accept as binding, conclusive and final all decisions and
interpretations by the Committee

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of the Plan, this Agreement, the Rules, and other applicable rules or procedures
regarding any issues arising thereunder, including without limitation all
decisions and interpretations related to 409A and regulations and guidance
issued thereunder.

By accepting the terms and conditions of this Agreement, Employee accepts the
RSUs and acknowledges that the RSUs are subject to all the terms and provisions
of the Plan (including without limitation the powers of the Committee to make
determinations and adjustments as provided in Sections 3, 4.2, 5, 14.1 and 15.1
of the Plan), this Agreement, the Rules, and other applicable rules or
procedures.

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