Exhibit 10.26


 


RESTRICTED SHARES AWARD AGREEMENT


 


DST SYSTEMS, INC. 2005 NON-EMPLOYEE DIRECTORS’ AWARD PLAN


 


THIS AGREEMENT, is
made and entered into this         day
of                ,
        (the “Grant Date”), by and between
DST SYSTEMS, INC. (“Company”) and                                    
(“Director”).


 


The parties agree as follows:


 


1.             Grant
and Designation of Restricted Shares. 
Pursuant to Company’s 2005 Non-Employee Directors’ Award Plan, as
amended and interpreted from time to time (“Plan”), Director is hereby granted,
as of the Grant Date,                      
(              )
shares of Company common stock (“Shares”) restricted as set forth herein.  This award is granted pursuant to 2003
actions of the Board of Directors of the Company (“Board”) setting annual
compensation for non-employee Board members and is administered by the Board or
agents appointed by the Board as provided in the Plan.


 


2.             Restrictions
and Privileges.


 


a.             Scope
of Restrictions.  Prior to the
Release Date (as set forth in Paragraph 3(a) hereof), the Shares shall not
be transferable (by sale, assignment, disposition, gift, exchange, pledge,
hypothecation, or otherwise) other than by will or the laws of descent and
distribution or pursuant to Director’s written beneficiary designation filed
with the Company’s Corporate Secretary prior to Director’s death.  However, notwithstanding the foregoing,
Director may gift the Shares to a spouse, child, step-child, grandchild,
parent, sibling, or legal dependent of Director or to a trust of which the
beneficiary or beneficiaries of the corpus and the income shall be either such
a person or Director; provided, however, that the Shares gifted shall remain
subject to the restrictions, obligations and conditions described herein.  Any attempted disposition of the Shares
contrary to the provisions hereof, and the levy of any execution, attachment or
similar process upon the Shares prior to the Release Date, shall be null and
void and without effect.


 


b.             Evidence
of Restrictions.  The Company’s
Corporate Secretary shall determine whether the Shares shall be evidenced by a
certificate or held in book entry form with the Company’s transfer agent.  Any certificate for the Shares shall bear
such legend evidencing the restrictions as is determined by the Company’s
General Counsel, and any book entry account into which
the Shares are issued shall be marked as restricted.


 


c.             Privilege
of Stock Ownership.   As of the Grant
Date, and except as provided in Paragraph 2(a) hereof, Director shall have
all rights of a stockholder with respect to the Shares including the right to
vote and receive all dividends or other distributions made or paid with respect
to the Shares; provided that (a) prior to the Release Date the Shares and
any new, additional or 


 


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different securities Director may become entitled to
receive with respect to the Shares by virtue of a stock split or stock dividend
or any other distribution for the Shares or change in the corporate structure
of the Company shall be subject to the restrictions described in Paragraph 2(a) hereof;
and (b) all such stockholder rights shall cease upon forfeiture of the
Shares under Paragraph 3(b) hereof.


 


3.             Release
of Restrictions.


 


a.             Release
Date. The Shares shall be free and clear of the restrictions set forth in
Paragraph 2(a) hereof upon the “Release Date” which shall be the earliest
date on which any of the following occur: (i) the three year anniversary
of the Grant Date, (ii) Director’s retirement from service as a Board
member on or after age 59 1⁄2, (iii) Director’s cessation of service on the
Board (“Termination of Affiliation”) as a result of Disability (as defined in
the Plan, as amended and interpreted from time to time), (iv) Director’s
death, or (v) a Special Termination (as defined in the Paragraph 3(d)) of
Director’s service on the Board.


 


b.             Forfeiture.  Prior to the Release Date for Shares as set
forth in Paragraph 3(a), and except as provided in Paragraph 3(e), the Shares
shall be immediately forfeited to Company without payment by Company of any
consideration to Director if Director ceases to serve on the Board for any
reasons other than those set forth in Paragraph 3(a)(ii)-(v).


 


c.             How
Released.  Provided Director has
satisfied tax withholding obligations as referenced in Paragraph 4 hereof,
Company shall at Director’s request on or after the Release Date have Company’s
transfer agent remove from any certificate evidencing the Shares the legend
evidencing the restrictions as referenced in Paragraph 2(b) or instruct
the transfer agent to note on the book entry account that such restrictions on
the Shares are removed.  Upon death of
Director followed by a proper request for delivery of the Shares and proof of
payment of applicable income or other taxes, the Shares shall be delivered to
Director’s beneficiary named in a written beneficiary designation filed with
the Company’s Corporate Secretary or, if there is no such designated
beneficiary, to Director’s executor or administrator or other personal
representative acceptable to the Company’s Corporate Secretary.  Any request to release the Shares to any
person or persons other than Director 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 Shares.


 


d.             Special
Termination.  A “Special Termination”
shall mean a Termination of Affiliation due to any one of the following: (a) a
requirement of the Director’s employer that Director terminate service on the
Board, provided that Director
does not control the employer as determined by the Board; (b) upon the
advice of counsel to the Company or independent counsel to the Board that
Director should terminate his or her service on the Board due to legal,
regulatory or other reasons, provided
that such other reasons are not a basis for Termination of Affiliation for
Cause (as defined in the Plan) and are not related to Director’s failure to
perform duties to the Company or its stockholders; or (c) a failure to be
nominated for re-election as a member of the Board, provided that the reason for such failure to nominate is not
due to either Director’s Termination of Affiliation for Cause or Director
declining to stand for reelection.


 


e.             Release
Date Subsequent to Change in Control. 
Notwithstanding any other provision of this Agreement, if a Change in
Control (as defined in Paragraph 5 hereof) occurs 


 


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prior to the Release Date, the Shares shall be free
and clear of the restrictions set forth in Paragraph 2(a) hereof upon the
earliest of any date subsequent to the Change in Control date that is (a) a
Release Date as set forth in Paragraph 3(a), or (b) the date of Director’s
failure to be reelected to serve on the Board.


 


4.             Taxes.  Company shall pay all original issue and
transfer taxes and all other fees and expenses necessarily incurred by Company
in connection with the issuance of the Shares and the release of restrictions
thereon; provided, however, that such issuance and release are subject to
payment on the Grant Date, Release Date or other date as determined by the
Company Chief Financial Officer of any required federal, state and local
withholding and other taxes, which shall be paid by Director (or his or her
guardian, legal representative or successor). 
The valuation of the Shares for tax and other purposes shall be as set
forth in the rules and determinations of the Board and in applicable laws
and regulations. When and in the manner permitted by the Board and unless
otherwise prohibited by law, Director (or his or her guardian, legal
representative or successor) may irrevocably elect in writing on a Company
designated form to satisfy any income tax withholding obligation in connection
with the lapsing of restrictions on the Shares by requesting Company to retain
whole Shares which would otherwise have been released from restriction, which
Shares shall no longer belong to Director. 
Any such retention, and any use of additional shares of common stock for
tax withholding purposes (“Attested Shares”) as allowed by the Board, shall be
governed by Board rules and determinations.  The Board may prescribe, among other things,
that Attested Shares shall (i) be fully paid and free and clear from all
liens and encumbrances and (ii) have been acquired on the open stock
market or directly held for a designated time period and not used for certain
designated purposes prior to the attestation. If authorized by the Board,
Attested Shares may be subject to contractual restrictions imposed by Company
or restrictions under federal or state securities law.  If Shares have been delivered or restrictions
released prior to the time a withholding obligation arises, Company shall have
the right to require Director (or his or her guardian, legal representative or
successor) to remit to Company amounts sufficient to satisfy all federal, state
and local withholding tax requirements at the time such obligation arises and
to withhold from other amounts payable by Company to Director, as
necessary.   If, within the deadline
imposed by Company, Director has not selected, if allowed by the Board, whether
to have Shares retained for taxes or to pay cash for the tax or tax
withholding, or has failed to pay tax or tax withholding amounts when due, then
Company may (a) retain whole Shares which would otherwise have been issued
or released, (b) deduct such amounts from fees or amounts Company owes or
will owe Director, or (c) effect some combination of Share retention and
deduction.


 


5.             Definition
of Change in Control.  For purposes
of this Agreement, a “Change in Control” shall be deemed to have
occurred if:


 


a.             the Incumbent Directors (as defined in Paragraph 6)
cease for any reason to constitute at least seventy-five percent (75%) of the
directors of the Company then serving;


 


b.             any “person”
(as such term is used in Sections 13(d) and 14(d)(2) of the
Exchange Act of 1934 (“Exchange Act”)) other than the Company or any majority-owned
Subsidiary of the Company, or an employee benefit plan of the Company or of any
majority-owned Subsidiary of the Company shall have become the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act)
directly or indirectly, of securities of the Company representing twenty
percent (20%) or more (calculated in accordance with Rule 13d-3) of
the combined voting power of the Company’s then outstanding voting securities; provided, however, that a person’s
becoming such a 


 


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beneficial owner shall not constitute a Change in
Control if such person is party to an agreement that limits the ability of such
person and its affiliates (as defined in Rule 12b-2 under the
Exchange Act) to obtain and exercise control over the management and policies
of the Company.


 


c.             a  Reorganization Transaction (as defined in
Paragraph 6) is consummated, other than a Reorganization Transaction which
results in the Voting Securities (as defined in Paragraph 6) of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the
surviving entity) at least sixty percent (60%) of the total voting power
represented by the Voting Securities of such surviving entity outstanding
immediately after the Reorganization Transaction, if the voting rights of each
Voting Security relative to the other Voting Securities were not altered in the
Reorganization Transaction; or


 


d.             the
stockholders of the Company approve a plan of complete liquidation of the
Company, other than in connection with a Reorganization Transaction.


 


Notwithstanding the occurrence of any of the foregoing
events, a Change in Control shall not occur with respect to Director if, in
advance of such event, Director agrees in writing that such event shall not
constitute a Change in Control.





6.             Other
Definitions.


 


For purposes of the Paragraph 5 definition of Change
in Control, the following terms have the meaning set forth below:


 


a.             “Affiliate”
means any Person that directly or indirectly, through one or more
intermediaries, controls or is controlled by, or is under common control with,
the Company.


 


b.             “Incumbent
Directors” means (i) an individual who was a member of the Board on
the Effective Date; or (ii) an individual whose election, or nomination
for election by the Company’s stockholders, was approved by a vote of at least
seventy-five percent (75%) of the members of the Board then still in office who
were members of the Board on the Effective Date; or (iii) individuals
whose election, or nomination for election by the Company’s stockholders, was
approved by a vote of at least seventy-five percent (75%) of the members of the
Board then still in office who were elected in the manner described in (i) or
(ii) above; provided that no
director whose election was in connection with a proposed transaction which, if
consummated, would be a Change in Control shall be an Incumbent Director.


 


c.             “Person” means any individual, sole
proprietorship, corporation, partnership, joint venture, limited liability
company, association, joint-stock company, trust, unincorporated organization,
institution, public benefit corporation, entity or government instrumentality,
division, agency, body or department.


 


d.             “Related
Party” means (i) a majority-owned Subsidiary of the Company; or (ii) an
employee or group of employees of the Company or of any majority-owned
Subsidiary of the Company; or (iii) an employee benefit plan of the
Company or of any majority-owned Subsidiary of the Company; or (iv) a
corporation owned directly or indirectly by the stockholders of the 


 


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Company in substantially
the same proportion as their ownership of the voting power of Voting Securities
of the Company.


 


e.             “Reorganization
Transaction” means a merger, reorganization, consolidation, or similar
transaction or a sale of all or substantially all of the Company’s assets other
than any such sale which would result in a Related Party owning or acquiring more
than fifty percent (50%) of the assets owned by the Company immediately prior
to the sale.


 


f.              “Subsidiary”
means an Affiliate controlled by the Company directly, or indirectly, through
one or more intermediaries.


 


g.             “Voting
Securities” of a corporation means securities of such corporation that are
entitled to vote generally in the election of directors, but not including any
other class of securities of such corporation that may have voting power by
reason of the occurrence of a contingency.


 


7.             General.


 


a.             Compliance
With Certain Laws and Regulations.  If the Board determines that the consent or
approval of any governmental regulatory body, or that the listing, registration
or qualification of the Shares upon any securities exchange or under any law or
regulation, is necessary or desirable in connection with the issuing of the
Shares or the lapsing of restrictions thereon, Director shall supply Company
with such certificates, representations and information as Company may request
and shall otherwise cooperate with Company in obtaining any such listing,
registration, qualification, consent or approval.


 


b.             Construction
and No Waiver.  Notwithstanding any
provision of this Agreement, the issuance of and the release of restrictions on
the Shares are subject to the provisions of the Plan.  The failure of Company in any instance to
exercise any of its rights granted under this Agreement shall not constitute a
waiver of any other rights that may arise under this Agreement.


 


c.             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 Director shall be in writing and addressed to Director at the address
indicated below Director’s signature line on this Agreement or such other
address specified in a written notice given by Director 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.


 


d.             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.


 


e.             Entire
Agreement.  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.


 


f.              Amendments.  This Agreement may be amended in writing
executed by both parties.  This Agreement
shall also be amended, without prior notice to Director and without 


 


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Director’s consent, by the Board in the event the
Board deems it necessary or appropriate to make such amendments for purposes of
compliance with the American Jobs Creation Act of 2004 or regulations issued
pursuant thereto.


 


This Agreement
will not be deemed to be binding or effective until fully executed by both
Director and an authorized representative of Company as reflected on both
signature pages attached hereto.


 


IN
WITNESS WHEREOF, Director executed this Agreement as of the
day and year first above written.


 


	
   

  	
  DIRECTOR

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Director
  signature)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Print
  name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Print
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						



 


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IN WITNESS WHEREOF, DST Systems, Inc. has caused this Agreement to
be executed on its behalf by and through its duly authorized officer as of the
day and year first above written.


 


	
   

  	
  DST SYSTEMS, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  (Signature of authorized DST representative)

  	
   

  



 


 


 


	
  Grant Date: [insert grant date]

  	
  Director: [insert director’s name]

  	
   

  



 


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