Document:

DST EX 10.2 12.31.13

EXHIBIT 10.2
DST SYSTEMS, INC. 
EXECUTIVE SEVERANCE PLAN
(Effective as of February 25, 2014)
		
	1.
	Purpose.

The DST Systems, Inc. Executive Severance Plan (the "Plan") is a top-hat welfare plan under the Employee Retirement Income Security Act of 1974, and is intended to provide financial protection in the event of unexpected job loss to certain executive employees of DST Systems, Inc. or an Affiliate of DST Systems, Inc. who are expected to make substantial contributions to the success of the Company and thereby provide for stability and continuity of management, and to secure the continued services, dedication and objectivity of such employees in the event of a Change in Control or Potential Change in Control (each as defined below). 
		
	2.
	Definitions.

As used herein, the terms identified below shall have the meanings indicated:
"Administrator" means the Committee.
"Affiliate" means any person with whom DST would be considered a single employer under Code sections 414(b) or 414(c), provided that in applying Code section 1563(a)(1), (2), and (3), for purposes of determining a controlled group of corporations under section 414(b), the language “at least 50 percent” shall be used instead of “at least 80 percent” each place it appears in Code section 1563(a)(1), (2), and (3), and in applying §1.414(c)-2 for purposes of determining trades or businesses (whether or not incorporated) that are under common control for purposes of Code section 414(c), “at least 50 percent” is used instead of “at least 80 percent” each place it appears in §1.414(c)-2. 
"Base Compensation" means the Eligible Executive's total direct compensation (which includes annual base salary, annual incentives and long-term incentives) from the Company. 
"Board" means the Board of Directors of DST.
"Cause" means the Company's termination of an Eligible Executive's employment with the Company as a result of: (i) the Eligible Executive's dishonesty involving the Company or otherwise relating to the Eligible Executive's employment; (ii) the Eligible Executive's gross negligence or willful misconduct in the performance of his or her duties as determined by DST's Chief Executive Officer; (iii) the willful failure by the Eligible Executive to diligently follow reasonable instructions of the Board or any officer to whom the Eligible Executive reports concerning performance of the Eligible Executive's duties for the Company or the operations or business of the Company; (iv) the Eligible Executive's fraud or criminal activity which, in either case, is alleged to have resulted in gain or personal enrichment of the Eligible Executive at the expense of the Company, or which is reasonably expected to have an adverse effect on the business, reputation or financial situation of the Company; or (v) embezzlement or material misappropriation by the Eligible Executive.
"Change in Control" has the meaning ascribed to it in the Equity Plan.  
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
"Code" means the Internal Revenue Code of 1986, as amended, and the regulations and other guidance promulgated by the Treasury Department and the Internal Revenue Service thereunder.
"Committee" means the compensation committee of the Board.
"Company" means DST and/or an Affiliate of DST. 
"Constructive Termination" means the Eligible Executive's voluntary termination of employment (e.g., resignation) with the Company as a result of:

		
	i.
	a material diminution in the Eligible Executive's authority, duties or responsibilities, or a change in the Eligible Executive’s supervisory reporting relationship within the Company that materially and negatively alters the Eligible Executive’s ability to perform his or her duties and responsibilities (other than pursuant to a transfer or promotion to a position of equal or enhanced responsibility or authority); 

		
	ii.
	a change, caused by the Company, in geographic location of greater than fifty (50) miles of the location at which the Eligible Executive primarily performs services for the Company; or

		
	iii.
	a material reduction in the Eligible Executive's Base Compensation, exclusive of any across the board reduction similarly affecting all or substantially all similarly-situated employees.

Notwithstanding the foregoing, no voluntary termination by the Eligible Executive shall constitute a "Constructive Termination" unless (x) the Eligible Executive has given notice of the proposed termination due to Constructive Termination, with particulars, to the Company not later than ninety (90) days following the initial occurrence of such condition; (y) the Company has an opportunity for 30 days after such notice within which to remedy such condition, and fails to reasonably cure such condition; and (z) the Eligible Executive resigns within 180 days after the initial occurrence of the condition potentially giving rise to a Constructive Termination. 
"Disability" means the Eligible Executive must, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, be receiving or be reasonably expected to receive income replacement benefits for a period of not less than three months under an accident and health plan covering the Eligible Executive (or, if none, covering the Company’s employees).
"DST" means DST Systems, Inc. 
"Effective Date" means February 25, 2014.
"Eligible Executive" means a key employee of the Company who:
		
	i.
	is expressly designated as an "Eligible Executive" by the Committee for the purposes of this Plan pursuant to resolutions duly adopted by the Committee; and

		
	ii.
	except as otherwise provided by the Committee, is not a party to an employment agreement with the Company pursuant to which severance benefits (whether relating to a change in control or otherwise) or payments are provided for (other than agreements such as a stock option, restricted stock, share or unit, performance share or unit, annual incentive, supplemental retirement, deferred compensation or similar plan or agreement which may contain provisions operative on the Executive's involuntary termination from the Company, a Change in Control or termination of employment following a Change in Control); and

		
	iii.
	receives written notice of his or her status as an Eligible Executive, which status has not been terminated by the Administrator as provided herein, and which notice describes which benefits the Eligible Executive is eligible to receive under this Plan. The Administrator may terminate an Eligible Executive's right to receive severance benefits upon either or both of a Qualifying Termination or a Qualifying CIC Termination by delivering to the Eligible Executive, at least 90 days prior to the end of the General Term or the CIC Term (as such terms are defined in Section 7(c) and as the case may be with respect to eligibility for benefits under Sections 4 and 5 of this Plan), written notice that the Eligible Executive is no longer eligible to participate in such portion of the Plan, which notice, if timely given, will terminate the Eligible Executive's right to receive severance benefits upon either or both of a Qualifying Termination or a Qualifying CIC Termination at the end of the General Term or CIC Term, respectively. Notwithstanding the foregoing, in no event may the Administrator terminate the participation of an Eligible Executive during the Protection Period if the Eligible Executive is eligible to receive severance benefits upon a Qualifying CIC Termination in accordance with Section 5. 

"Equity Plan" means the Company's 2005 Equity Incentive Plan (or the equity incentive plan most recently approved by the Company's stockholders and in use by the Company).

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Minority Subsidiary" means any corporation or limited liability company of which the Company directly or indirectly owns shares or membership interests representing at least 20 percent but less than 50 percent of the combined voting power of the shares of all classes or series of capital stock or membership interests of such corporation or limited liability company which have the right to vote generally on matters submitted to a vote of the shareholders or members of such corporation or limited liability company. 
"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.
"Potential Change in Control" means the first occurrence of any one of the following: 
    
(i)     DST enters into an agreement, the consummation of which would result in the occurrence of a Change in Control;
(ii)     DST or any Person publicly announces an intention to take or to consider taking actions which, if consummated, would constitute a Change in Control; or
(iii)     the Board adopts a resolution to the effect that a Potential Change in Control has occurred.
"Protection Period" means (i) the period following a Change in Control until the second anniversary of the Change in Control and (ii) the period following a Potential Change in Control, which period ends at the earlier of the (a) date DST makes a public announcement; (y) that it has terminated the agreement, the consummation of which would have resulted in the occurrence of a Change in Control; or (z) that the circumstances giving rise to a Potential Change in Control will not result in an actual Change in Control and (b) the date the Board declares in good faith that the circumstances giving rise to a Potential Change in Control will not result in an actual Change in Control.
"Qualifying CIC Termination" means, the occurrence during the CIC Term (as defined in Section 7(c)) and the Protection Period of either:
		
	i.
	an involuntary termination of an Eligible Executive's employment with the Company without Cause and other than as a result of the Eligible Executive's death or Disability; or

		
	ii.
	a voluntary termination of an Eligible Executive's employment by the Eligible Executive as a result of a Constructive Termination.

Notwithstanding the foregoing, an Eligible Executive does not experience a Qualifying CIC Termination in connection with a Qualifying Departure.  
"Qualifying Departure" means an Eligible Executive's employment with the Company is terminated solely as a result of or in connection with a sale or other divestiture by DST of a division, subsidiary or other business segment (including, without limitation, by sale of shares of stock or of assets) or transfer of the Eligible Executive's employment to a Minority Subsidiary pursuant to which the Eligible Executive's employer ceases to be the Company, but the Eligible Executive was offered continued employment by the acquirer or transferee employer in such sale or divesture or transfer on terms such that, if accepted by the Eligible Executive, such continued employment (i) would not materially diminish the Eligible Executive's authority, duties or responsibilities immediately before the sale or divesture or transfer of employment; (ii) would not result in the Eligible Executive working at a location more than fifty (50) miles from Eligible Executive's current place of employment; or (iii) would not result in a material reduction in the Eligible Executive's Base Compensation immediately before such sale, divestiture or transfer of employment; and (iv) would entitle, for a two-year period immediately following such sale or divesture or transfer, the Eligible Executive to participate in a severance plan or agreement providing substantially similar severance rights and benefits as the Eligible Executive was eligible to receive pursuant to this Plan. 
"Qualifying Termination" means the occurrence during the General Term (as defined in Section 7(c)) of an involuntary termination of an Eligible Executive's employment with the Company without Cause and other than as a result of the 

Eligible Executive's death or Disability.  Notwithstanding the foregoing, an Eligible Executive does not experience a Qualifying Termination in connection with a Qualifying Departure.   
"Specified Employee" means any employee of the Company that DST determines is a Specified Employee within the meaning of Section 409A of the Code.  DST shall determine whether an employee is a Specified Employee by applying DST's Specified Employee Identification Procedure effective January 1, 2009, and if no longer in effect, by applying reasonable, objectively determinable identification procedures established by the Board (or a committee thereof) from time to time in accordance with Section 409A of the Code.    
"Termination Date" means the date on which an Eligible Executive has a "separation from service," within the meaning of Section 409A of the Code, from the Company.
		
	3.
	Eligibility.

a)Eligible Executives. Only Eligible Executives shall be eligible to receive benefits under this Plan. The Committee shall limit the class of persons selected to participate in the Plan to a "select group of management or highly compensated employees," within the meaning of Sections 201, 301 and 401 of ERISA.

b)Qualifying Termination. Subject to the conditions described herein, including, without limitation, the requirements of Section 6 (Code § 280G potential carve-back) and 9(a) (Release requirements) of this Plan, the Company will pay severance benefits pursuant to Section 4 of this Plan to an Eligible Executive who is eligible to receive severance benefits upon a Qualifying Termination and who incurs a Qualifying Termination; provided, however, that if an Eligible Executive is also eligible to receive severance benefits upon a Qualifying CIC Termination, the Eligible Executive is eligible to receive severance benefits payable upon a Qualifying Termination only if the Qualifying Termination is not also a Qualifying CIC Termination. 

c)Qualifying CIC Termination. Subject to the conditions described herein, including, without limitation, the requirements of Section 6 (Code § 280G potential carve-back) and 9(a) (Release requirements) of this Plan, the Company will pay severance benefits pursuant to Section 5 of this Plan solely to an Eligible Executive who is eligible to receive severance benefits upon a Qualifying CIC Termination and who incurs a Qualifying CIC Termination. 

d)Non-Qualifying Termination. Notwithstanding any other provision of this Plan to the contrary, nothing in this Plan shall be construed to require the Company to pay any of the severance benefits under this Plan to an Eligible Executive if the Eligible Executive terminates employment with the Company under any circumstances that do not constitute a Qualifying Termination or a Qualifying CIC Termination. 

		
	4.
	Amount and Payment of Benefits upon a Qualifying Termination.

Subject to Sections 6 (Code § 280G potential carve-back) and 9(a) (Release requirements) of this Plan, an Eligible Executive who incurs a Qualifying Termination and is not eligible to receive severance benefits pursuant to Section 5 (Qualifying CIC Termination) shall be entitled to receive the following severance benefits described in this Section 4:
a)Payment.  Unless otherwise provided herein, an Eligible Executive who incurs a Qualifying Termination shall receive a severance payment in an amount equal to the sum of:

		
	i.
	one (1) times the Eligible Executive's annual base salary as of the Eligible Executive's Termination Date;

		
	ii.
	one (1) times the amount that the Eligible Executive would have received as an annual bonus under the Equity Plan for the plan year in which the Termination Date occurs, if an "at target" level of performance were achieved for such plan year and the Eligible Executive had remained employed through the end of the applicable performance year; and

		
	iii.
	one (1) times the Company-paid portion of the COBRA continuation premium cost to cover the Eligible Executive and his or her eligible dependents, if any, for twelve (12) months under the Company's health, vision and dental plans in effect as of the date of the Qualifying Termination.  Such amount will include the Company-paid portion of the cost of the premiums for coverage of the Eligible Executive's dependents if, and only to the extent that, such dependents were enrolled in a health, vision or dental plan sponsored by the Company before the Qualifying Termination. 

The severance payment pursuant to this Section 4(a) shall be paid in a single lump-sum cash payment, less all applicable withholding taxes, within the sixty (60)-day period following the Eligible Executive's Termination Date. Notwithstanding any other provision of this Plan, if the Eligible Executive is a Specified Employee on his or her Termination Date, any portion of the severance payment under this Section 4(a) which may constitute non-exempt "nonqualified deferred compensation" subject to Code Section 409A shall be delayed until the earlier of (i) the first day after six-months following such Termination Date, as determined by the Company for the avoidance of penalties and/or excise taxes under Code Section 409A; or (ii) the date the Eligible Executive dies following such Termination Date. 
b)Additional Payment.  In addition to the severance payment pursuant to Section 4(a), an Eligible Executive who incurs a Qualifying Termination shall also be entitled to receive a pro rata portion of the annual incentive bonus that the Eligible Executive would have received under the Equity Plan (or other annual incentive plan then in use by the Company) for the performance year during which his or her Termination Date occurs if the Eligible Executive had remained employed through the end of such performance year.  The amount of such pro rata portion shall be the amount that the Eligible Executive would have received if the Eligible Executive had remained employed through the end of the applicable performance year, divided by three hundred sixty five (365), multiplied by the number of days between the first day of the performance year and the Eligible Executive's Termination Date.  The severance payment eligible to be paid pursuant to this Section 4(b), if any, shall be paid in a single lump-sum cash payment, less all applicable withholding taxes, at the same time as the annual bonus payments are paid to other active bonus plan participants, and in no event later than the end of the calendar year in which the level of performance goal achievement is determined and certified by the Committee.

c)Outplacement Services.  The Company shall reimburse the Eligible Executive for all reasonable and well-documented expenses directly relating to outplacement counseling services obtained by the Eligible Executive during the eighteen (18) month period following the Eligible Executive's Qualifying Termination. The Eligible Executive may select the organization that will provide the outplacement counseling; however, the Company's obligation to reimburse the Eligible Executive for such expenses shall not exceed $25,000. Reimbursement shall be made as soon as practicable after submission of appropriate expense reports with the Company, but in no event later than the end of the Eligible Executive's taxable year following the year in which the expense for outplacement counseling services was incurred.

d)Equity Award Vesting.  An Eligible Executive who incurs a Qualifying Termination shall vest, if at all, in any and all previously granted stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, deferred cash or any other form of equity awards issued by the Company and held by the Eligible Executive on his or her Termination Date (collectively, "Equity Awards") in accordance with the terms and conditions of the plan(s) and award agreements pursuant to which such Equity Awards are governed.

		
	5.
	Amount and Payment of Benefits upon a Qualifying CIC Termination.

Subject to Sections 6 (Code § 280G potential carve-back) and 9(a) (Release requirements) of this Plan, an Eligible Executive who incurs a Qualifying CIC Termination and is eligible to receive the following severance benefits on account thereof, shall be entitled to receive the severance benefits described in this Section 5 in lieu of any severance benefits that the Eligible Executive is eligible to receive pursuant to Section 4 of this Plan:
a)Payment.  Unless otherwise provided herein, an Eligible Executive who incurs a Qualifying CIC Termination shall receive a severance payment in an amount equal to the sum of:

		
	i.
	two (2) times the Eligible Executive's annual base salary as of the Eligible Executive's Termination Date;

		
	ii.
	two (2) times the amount that the Eligible Executive would have received as an annual bonus under the Equity Plan for the plan year in which the Termination Date occurs, if an "at target" level of performance were achieved for such plan year and the Eligible Executive had remained employed through the end of the applicable performance year; 

		
	iii.
	two (2) times the Company-paid portion of the COBRA continuation premium cost to cover the Eligible Executive and his or her eligible dependents, if any, for twelve (12) months under the Company's health, vision and dental plans in effect as of the date of the Qualifying CIC Termination.  Such amount will include the Company-paid portion of the cost of the premiums for coverage of the Eligible Executive's dependents if, and only to the extent that, such dependents were enrolled in a health, vision or dental plan sponsored by the Company before the Qualifying CIC Termination; and

		
	iv.
	a pro rata portion of the annual incentive bonus that the Eligible Executive would have received under the Equity Plan (or other annual incentive plan then in use by the Company) for the performance year during which his or her Termination Date occurs as if the Eligible Executive had remained employed through the end of such performance year and if an "at target" level of performance were achieved for such performance year. The amount of such pro rata portion shall be the amount that the Eligible Executive would have received if the Eligible Executive had remained employed through the end of the applicable performance year and if an "at target" level of performance were achieved for such performance year, divided by three hundred sixty five (365), multiplied by the number of days between the first day of the performance year and the Eligible Executive's Termination Date.  

The severance payment pursuant to this Section 5(a) shall be paid in a single lump-sum cash payment, less all applicable withholding taxes within the sixty (60)-day period following the Eligible Executive's Termination Date. Notwithstanding any other provision of this Plan, if the Eligible Executive is a Specified Employee on his or her Termination Date, any portion of the severance payment under this Section 5(a) which may constitute non-exempt "nonqualified deferred compensation" subject to Code Section 409A shall be delayed until the earlier of (i) the first day after six months following such Termination Date, as determined by the Company for the avoidance of penalties and/or excise taxes under Code Section 409A, or (ii)  the date the Eligible Executive dies following such Termination Date. 
b)Outplacement Services.  The Company shall reimburse the Eligible Executive for all reasonable and well-documented expenses directly relating to outplacement counseling services obtained by the Eligible Executive during the eighteen (18) month period following the Eligible Executive's Qualifying CIC Termination. The Eligible Executive may select the organization that will provide the outplacement counseling, however, the Company's obligation to reimburse the Eligible Executive for such expenses shall not exceed $25,000. Reimbursement shall be made as soon as practicable after submission of appropriate expense reports with the Company but in no event later than the end of the Eligible Executive's taxable year following the year in which the expense for outplacement counseling services was incurred.

c)Equity Award Vesting.  An Eligible Executive who incurs a Qualifying CIC Termination shall vest, if at all, in any and all previously granted Equity Awards in accordance with the terms and conditions of the plan(s) and award agreements pursuant to which such Equity Awards are governed.

		
	6.
	IRC § 280G: Best Net Protection. 

In the event that the severance payments, distributions or benefits to be made by the Company to or for the benefit of the Eligible Executive (whether paid, payable, distributed, distributable or provided pursuant to the terms of this Plan, under some other plan, agreement, or arrangement, or otherwise) ("Payments") (i) constitute "parachute payments" within the meaning of Code Section 280G and (ii) but for this Section 6 would be subject to the excise tax imposed by Code Section 4999 (the "Excise Tax"), then the Payments to the Eligible Executive shall be either: (a) delivered in full, or (b) delivered after reducing the Payments $1 below the safe harbor limit (as described in Code Section 280G(b)(2)(A)(ii)) which would result in no portion of the Payments being subject to the Excise Tax.  The choice between (a) and (b) shall depend upon whichever of the foregoing amounts, taking into account the applicable federal, state, and local income taxes and the Excise Tax, results in the receipt by the Eligible Executive, on an after-tax basis, of the greater amount, notwithstanding that all or some portion of the Payments may be taxable under Code Section 4999. In the event that the Payments are required to be reduced by this paragraph, any amount payable pursuant to Sections 4 or 5 shall be reduced, first by reducing all Payments being made pursuant to Sections 4(a) through (b) or 5(a) that do not constitute "nonqualified deferred compensation" within the meaning of Code Section 409A (in the order designated by the Eligible Executive), second, by reducing all Payments other than those made pursuant to Sections 4(a) through (b) or 5(a) that do not constitute "nonqualified deferred compensation" within the meaning of Code Section 409A (in the order designated by the Eligible Executive), and third, reducing all Payments that constitute "nonqualified deferred compensation" within the meaning of Code Section 409A, with the latest of such scheduled payments being reduced first.  DST's accounting firm shall make all determinations required by this paragraph, and DST and the Eligible Executive shall cooperate with each other and the accounting firm and shall provide necessary information so that the accounting firm may make all such determinations. DST shall pay all of the fees of the accounting firm for services performed by the accounting firm as contemplated in this Section 6.
		
	7.
	Administration/Amendment/Termination.

a)Administrator. The Administrator has the sole discretionary authority to construe and interpret this Plan and to make any and all determinations related to administration of this Plan, including all questions of eligibility for 

participation and benefits, to the maximum extent permitted by law. The decisions, actions and interpretations of the Administrator are final and binding on all parties.

b)Amendment. The Administrator expressly reserves the right to amend this Plan, in whole or in part, at any time and in any way it determines to be advisable; provided that if the amendment will become effective during either the General Term or the CIC Term (as applicable to an Eligible Executive) then in progress (which, for this purpose, shall not include any renewal terms) and will materially and adversely affect the rights of any Eligible Executive under the Plan, the Company must obtain the Eligible Executive's written consent to the amendment. Notwithstanding the foregoing, any amendment to the definition of "Change in Control" made to the Equity Plan before a Change in Control or Potential Change in Control has occurred will not be deemed to adversely affect the rights of any Eligible Executives.  Further, in no event shall a notification to an Eligible Executive notifying him or her that his or her participation in the Plan will terminate at the end of the General Term or CIC Term (as applicable) then in progress constitute an amendment to the Plan requiring such Eligible Executive's prior written consent.

c)Termination.  An Eligible Executive's right under this Plan to receive severance benefits upon a Qualifying Termination shall commence upon the Effective Date and shall continue in effect through the first anniversary of the Effective Date (the "Initial General Term"). An Eligible Executive's right under this Plan to receive severance benefits upon a Qualifying CIC Termination shall commence upon the Effective Date and shall continue in effect through the third anniversary of the Effective Date (the "Initial CIC Term").  Unless terminated prior to either the end of the Initial General Term or the Initial CIC Term, both the Initial General Term and the Initial CIC Term shall be automatically renewed for successive one-year periods commencing at the end of the Initial General Term and Initial CIC Term, respectively, and on each anniversary date thereafter.  For purposes of this Plan, any reference to the "General Term" shall include the Initial General Term and any extension thereof and any reference to the "CIC Term" shall include the Initial CIC Term and any extension thereof.  Notwithstanding the foregoing, the Committee reserves the right to terminate this Plan by providing written notice to each Eligible Executive at least 90 days prior to the end of the General Term or CIC Term that such term will not be extended, and if such notice is timely given, the Plan will terminate with respect to the General Term or CIC Term at the end of the General Term or CIC Term, as applicable, then in effect; provided that if the CIC Term expires or is scheduled to expire during the Protection Period, the CIC Term shall be deemed to have been extended through, and the Plan shall continue in full force and effect and shall not terminate or expire until the first day immediately following the expiration of the Protection Period (as defined below). A proper termination of this Plan automatically shall effect a termination of all the Eligible Executives’ rights and benefits hereunder without further action or notice; provided, however, no termination shall reduce or terminate any Eligible Executive’s right to receive, or continue to receive, any benefits that became payable in respect of a termination of employment that occurred prior to the date of such termination.

		
	8.
	Claims for Benefits.

a)Initial Claims. In order to file a claim to receive benefits under the Plan, the Eligible Executive or his or her authorized representative must submit a written claim for benefits under the Plan within 60 days after the Eligible Executive's termination of employment. Claims should be addressed and sent to:

Vice President of Global Human Resources (the "Claims Administrator")
DST Systems, Inc.,
333 W. 11th Street, 5th Floor, 
Kansas City, MO 64105

If the Eligible Executive's claim is denied, in whole or in part, the Eligible Executive will be furnished with written notice of the denial within 90 days after the Claims Administrator's receipt of the Eligible Executive's written claim, unless special circumstances require an extension of time for processing the claim, in which case a period not to exceed 180 days will apply. If such an extension of time is required, written notice of the extension will be furnished to the Eligible Executive before the termination of the initial 90 day period and will describe the special circumstances requiring the extension, and the date on which a decision is expected to be rendered. Written notice of the denial of the Eligible Executive's claim will contain the following information:
		
	i.
	the specific reason or reasons for the denial of the Eligible Executive's claim;

		
	ii.
	references to the specific Plan provisions on which the denial of the Eligible Executive's claim was based;

		
	iii.
	a description of any additional information or material required by the Claims Administrator to reconsider the Eligible Executive's claim (to the extent applicable) and an explanation of why such material or information is necessary; and

		
	iv.
	a description of the Plan's review procedure and time limits applicable to such procedures, including a statement of the Eligible Executive's right to bring a civil action under Section 502(a) of ERISA following a benefit claim denial on review.

		
	v.
	

b)Appeal of Denied Claims. If the Eligible Executive's claim is denied and he or she wishes to submit a request for a review of the denied claim, the Eligible Executive or his or her authorized representative must follow the procedures described below:
		
	i.
	Upon receipt of the denied claim, the Eligible Executive (or his or her authorized representative) may file a request for review of the claim in writing with the Claims Administrator. This request for review must be filed no later than 60 days after the Eligible Executive has received written notification of the denial.

		
	ii.
	The Eligible Executive has the right to submit in writing to the Claims Administrator any comments, documents, records or other information relating to his claim for benefits.

		
	iii.
	The Eligible Executive has the right to be provided with, upon request and free of charge, reasonable access to and copies of all pertinent documents, records and other information that is relevant to his claim for benefits.

		
	iv.
	The review of the denied claim will take into account all comments, documents, records and other information that the Eligible Executive submitted relating to his claim, without regard to whether such information was submitted or considered in the initial denial of his claim.

c)Claims Administrator's Response to Appeal. The Claims Administrator will provide the Eligible Executive with written notice of its decision within 60 days after the Claims Administrator's receipt of the Eligible Executive's written claim for review. There may be special circumstances which require an extension of this 60-day period. In any such case, the Claims Administrator will notify the Eligible Executive in writing within the 60 day period, and the final decision will be made no later than 120 days after the Claims Administrator's receipt of the Eligible Executive's written claim for review. The Claims Administrator's decision on the Eligible Executive's claim for review will be communicated to the Eligible Executive in writing and, if denied, will clearly state:

		
	i.
	the specific reason or reasons for the denial of the Eligible Executive's claim;

		
	ii.
	reference to the specific Plan provisions on which the denial of the Eligible Executive's claim is based;

		
	iii.
	a statement that the Eligible Executive is entitled to receive, upon request and free of charge, reasonable access to, and copies of, the Plan and all documents, records and other information relevant to his claim for benefits; and

		
	iv.
	a statement describing the Eligible Executive's right to bring an action under Section 502(a) of ERISA.

d)Deadline to File Claim. To be considered timely under these claims procedures, a claim must be filed under Sections 8(a) within 60 days following the Eligible Executive's termination of employment.

e)Exhaustion of Administrative Remedies. The exhaustion of these claims procedures is mandatory for resolving every claim and dispute arising under this Plan. As to such claims and disputes: (i) no claimant shall be permitted to commence any legal action to recover benefits or to enforce or clarify rights under the Plan under Section 502 or Section 510 of ERISA or under any other provision of law, whether or not statutory, until these claims procedures have been exhausted in their entirety; and (ii) in any such legal action, all explicit and all implicit determinations by the Claims Administrator (including, but not limited to, determinations as to whether the claim, or a request for a review of a denied claim, was timely filed) shall be afforded the maximum deference permitted by law. 

f)Deadline to File Action. No legal action to recover benefits under this Plan or to enforce or clarify rights under the Plan under Section 502 or Section 510 of ERISA or under any other provision of law, whether or not statutory, may be brought by any claimant on any matter pertaining to this Plan unless the legal action is commenced in the proper forum 

before the earlier of: (i) 18 months after the claimant knew or reasonably should have known of the principal facts on which the claim is based; or (ii) six months after the claimant has exhausted the claims procedure under this Plan. Knowledge of all facts that the claimant knew or reasonably should have known shall be imputed to every claimant who is or claims to be a Beneficiary of an Eligible Executive or otherwise claims to derive an entitlement by reference to the Eligible Executive for the purpose of applying the previously-specified periods.

g)Plan Claims Administrator Discretion; Court Review. The Claims Administrator and all persons determining or reviewing claims have full discretion to determine benefit claims under this Plan. Any interpretation, determination or other action of such persons shall be subject to review only if it is arbitrary or capricious or otherwise an abuse of discretion. Any review of a final decision or action of the persons reviewing a claim shall be based only on such evidence presented to or considered by such persons at the time they made the decision that is the subject of review.

h)Arbitration.  Subject to Section 8(e), any and all disputes under this Plan and any other legal disputes between the Eligible Executive and Company arising out of the employment relationship are subject to independent and neutral arbitration under the terms of the Arbitration Policy currently in effect in the Associate Handbook applicable to Company employees, unless the Eligible Executive and the Company agree to a modification of that policy, or the Eligible Executive properly and timely opts out under the terms of the policy.  The Associate Handbook is available on the intranet site maintained for associate information, or can be obtained from the Human Resources Department.  The Arbitration Policy is administered by the American Arbitration Association ("AAA") and adopts the AAA's Employment Arbitration Rules, except as modified by the Company's Arbitration Policy. The AAA's Employment Arbitration Rules are part of AAA's Employment Arbitration Rules and Mediation procedures, which are available at www.adr.org.  

		
	9.
	Miscellaneous Provisions.

a)Release. In consideration of the covenants under this Plan and as a condition precedent to receiving any payments under this Plan, an Eligible Executive or the Eligible Executive's Beneficiary (as defined in paragraph (c) of this Section 9) shall (i) execute and deliver to the Company a release of all claims in such form as requested by the Company within twenty-two (22) days following the Eligible Executive's Termination Date (or any such longer period if required by applicable law and communicated to the Eligible Executive) and (ii) not revoke the release during the seven (7) day period following the date that the Eligible Executive executed the release. The Company shall supply a form of such release to the Eligible Executive no later than the Termination Date. Such release will include the restrictive covenants described in Appendix A, each of which will apply during the Eligible Executive's employment and for a period of time after the termination of the Eligible Executive's employment as described therein. 

b)Waiver. The failure of the Company to enforce at any time any of the provisions of this Plan, or to require at any time performance of any of the provisions of this Plan, shall in no way be construed to be a waiver of these provisions, nor in any way to affect the validity of this Plan or any part thereof, or the right of the Company thereafter to enforce every provision.

c)Benefits Not Transferable. Except as may be required by law, no benefit eligible to be payable under this Plan to any Eligible Executive shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any attempt to alienate, sell, transfer, assign, pledge, encumber or charge all or any part of the benefit shall be void; provided, however, that if a terminated Eligible Executive dies before the end of the period over which such Eligible Executive is entitled to receive severance benefits under this Plan, the severance benefits payable hereunder shall be paid to the estate of such Eligible Executive or to the Person who acquired the rights to such benefits by bequest or inheritance (the "Beneficiary"), provided such Beneficiary satisfies the release requirements in Section 9(a). Except as may be provided by law, no benefit shall in any manner be subject to the debts, contracts, liabilities, engagements or torts of any Eligible Executive, nor shall it be subject to attachment or legal process for, or against, the Eligible Executive and the same shall not be recognized under this Plan.

d)Successors of the Company. This Plan shall bind any successor of the Company, its assets or its businesses (whether direct or indirect, by purchase, merger, consolidation or otherwise), in the same manner and to the same extent that the Company would be obligated under this Plan if no succession had taken place. In the case of any transaction in which a successor would not by the foregoing provision or by operation of law be bound by this Plan, the Company shall require such successor expressly and unconditionally to assume and agree to perform the Company’s obligations under this Plan, in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. The term "Company," as used in this Plan, shall mean the Company as heretofore defined and any successor or assignee to the business or assets which by reason hereof becomes bound by this Plan.

e)No Contract of Employment. The definitions and criteria set forth herein are solely for the purpose of defining Plan eligibility. No legal rights to employment are created or implied by this Plan, nor are any conditions or restrictions hereby placed on termination of employment. Unless the employee has a written employment agreement binding on the Company that provides otherwise, employment with the Company is employment-at-will. As such, termination of employment may be initiated by the Eligible Executive or by the Company at any time for any reason that is not unlawful, with or without Cause.

f)Governing Law. To the extent not pre-empted by federal law, this Plan shall be construed, administered and governed in accordance with and governed by the laws of the State of Missouri, without regard to any conflict of law principles. Subject to Section 8(h), any action concerning this Plan shall be brought in a court of competent jurisdiction in Jackson County, Missouri, and each party consents to the venue and jurisdiction of such court.

g)Entire Plan. This Plan constitutes the Company's entire Executive Severance Plan for the Eligible Executive and, except as provided in Section 9(h) and Section 10 of this Plan, supersedes any and all previous representations, understandings and plans with respect to general severance for the Eligible Executives, and any such representations, understandings and plans with respect to Eligible Executive severance are hereby canceled and terminated in all respects.

h)Severability and Interpretation. Whenever possible, each provision of this Plan and any portion hereof shall be interpreted in such a manner as to be effective and valid under applicable law, rules and regulations. If any covenant or other provision of this Plan (or portion thereof) shall be held to be invalid, illegal, or incapable of being enforced, by reason of any rule of law, rule, regulation, administrative order, judicial decision or public policy, all other conditions and provisions of this Plan shall, nevertheless, remain in full force and effect, and no covenant or provision shall be deemed dependent upon any other covenant or provision (or portion) unless so expressed herein. The parties hereto desire and consent that the court or other body making such determination shall, to the extent necessary to avoid any unenforceability, so reform such covenant or other provision or portion of this Plan to the minimum extent necessary so as to render the same enforceable in accordance with the intent herein expressed.

i)No Mitigation Required. The Eligible Executive shall not be required to mitigate the amount provided for in Sections 4 or 5 of this Plan by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in Section 4 of this Plan be reduced by any compensation earned by the Eligible Executive as the result of employment by another employer after the date of termination, or otherwise.

j)Validity. If any provision of this Plan is held invalid, void or unenforceable, the same shall not affect, in any respect whatsoever, the validity of any other provision of this Plan.

k)Captions and Titles. Captions and titles have been used in this Plan only for convenience, and in no way define, limit or describe the meaning of this Plan or any part thereof.

l)Section 409A Savings Clause. This Plan is intended to comply with the provisions of Section 409A of the Code, including the exceptions for short-term deferrals, separation pay arrangements, reimbursements and in-kind distributions, and shall be administered and interpreted in accordance with such intent.  Without limiting the generality of the foregoing, any term or provision that is determined by the Administrator to have an ambiguous definition shall be interpreted, to the extent reasonable, to comply with Section 409A of the Code. Any reference in this Plan to a “termination of employment” or similar term or phrase shall be interpreted as a “separation from service” within the meaning of Section 409A of the Code. Each payment under this Plan shall be treated as a separate payment for purposes of Section 409A of the Code. In no event may an Eligible Executive, directly or indirectly, designate the calendar year of any payment to be made under this Plan. All reimbursements and in-kind benefits, including any taxable health, dental and vision benefits provided under this Plan that constitute deferred compensation within the meaning of Section 409A of the Code shall be made or provided in accordance with the requirements of Section 409A of the Code, including, without limitation, that (i) in no event shall reimbursements by the Company under this Plan be made later than the end of the calendar year next following the calendar year in which the applicable fees and expenses were incurred, provided that the Eligible Executive shall have submitted an invoice for such fees and expenses at least ten (10) days before the end of the calendar year next following the calendar year in which such fees and expenses were incurred; (ii) the amount of in-kind benefits that the Company is obligated to pay or provide in any given calendar year (other than medical reimbursements described in Treas. Reg. Section 1.409A-3(i)(1)(iv)(B)) shall not affect the in-kind benefits that the Company is obligated to pay or provide in any other calendar year; (iii) the Eligible Executive's right to have the Company pay or provide such reimbursements and in-kind benefits may not be liquidated or exchanged for any other benefit; and (iv) in no event shall the Company's obligations to make such reimbursements or to provide such in-kind benefits apply later than the end of the third year following the year in which the Eligible Executive's Termination Date occurred.

		
	10.
	No Duplication of Benefits.

Notwithstanding the foregoing, any benefits received by an Eligible Executive pursuant to this Plan shall be in lieu of any general severance policy or other change in control severance plan maintained by the Company except to the extent any such substitution in severance benefits or payment timing would result in a violation of Code Section 409A.
DST SYSTEMS, INC.
By:  /s/ M. Elizabeth Sweetman
M. Elizabeth Sweetman
Vice President - Global Human Resources
Date:  February 25, 2014

Appendix A
Restrictive Covenants Under the DST Systems, Inc. Executive Severance Plan
Subject to the conditions and limitations of the Plan, an Eligible Executive who experiences a Qualifying Termination or Qualifying CIC Termination shall be entitled to receive severance benefits as set forth in Section 4 or Section 5 of the Plan, only if the Eligible Executive executes a comprehensive release agreement and waiver of claims against the Company, its Affiliates and certain other released parties as set forth in the release provided by the Company.  The Eligible Executive will also be subject to the restrictive covenants set forth below, which apply during the Eligible Executive's employment and for a period of time thereafter (as described below and which will also be contained in the release agreement) pursuant to the terms of Section 9(a) (Release requirements) of the Plan. All capitalized terms used herein and not otherwise defined shall have the definitions ascribed to them in the Plan.
A.1.    Noncompetition and Nonsolicitation
The Eligible Executive understands the global nature of the Company's businesses and the effort the Company undertakes to develop and protect their business and their competitive advantage. Accordingly, the Eligible Executive recognizes and agrees that, in light of the Eligible Executive's high level of responsibility, broad access to personnel and unique position of trust and influence with the Company, the scope and duration of the restrictions described in the Plan are reasonable and necessary to protect the legitimate business interests of the Company. Notwithstanding anything in the Plan or this Appendix A to the contrary, all severance benefits of the Eligible Executive covered under this Plan are conditioned expressly on the Eligible Executive's compliance with each of the restrictive covenants of this Appendix A. During the period of an Eligible Executive's employment and for the specific period set forth in each subsection below following the Eligible Executive's Termination Date (in each case, the "Restricted Period"), the Eligible Executive shall not:
a)for a period of twelve (12) months after the Eligible Executive's Termination Date in the event of a Qualifying Termination or for a period of twenty-four (24) months after the Eligible Executive's Termination Date in the event of a Qualifying CIC Termination, directly or indirectly become employed by, enter into a consulting arrangement with or otherwise agree to perform services for a Competitor operating in the Applicable Geographical Area or acquire an ownership interest in such a Competitor, other than an equity interest in a publicly-traded Competitor that does not exceed two percent (2%);

b)for a period of twelve (12) months after the Eligible Executive's Termination Date in the event of a Qualifying Termination or for a period of twenty-four (24) months after the Eligible Executive's Termination Date in the event of a Qualifying CIC Termination, for or on behalf of the Eligible Executive’s account or jointly with another, either directly or indirectly, on behalf of the Eligible Executive or any individual, partnership, corporation, or other legal entity, as principal agent, employee or otherwise, solicit, influence, entice or induce, or attempt to solicit, influence, entice or induce any person to leave the employ of the Company; or

c)for a period of twelve (12) months after the Eligible Executive's Termination Date in the event of a Qualifying Termination or for a period of twenty-four (24) months after the Eligible Executive's Termination Date in the event of a Qualifying CIC Termination, directly or indirectly solicit any Customers or Prospective Customers or vendors or potential vendors of the Company on behalf of or for the benefit of a Competitor.

d)Definitions.

i."Applicable Company Entity" means DST and any DST subsidiary or Affiliate with which the Eligible Executive worked or was involved during the course of the Eligible Executive's employment with DST or any Affiliate thereof or about which the Eligible Executive gained Proprietary Information during the course of the Eligible Executive’s employment with DST.

ii."Applicable Geographic Area" means the United States as well as any other country in which any Applicable Company Entity has, as of the Eligible Executive's Termination Date, offices or operations involving the services of any Applicable Company Entity or any Customers of such services.

iii."Competitor" means, unless the Chief Executive Officer of DST determines otherwise, any Person that sells goods or services that are directly or indirectly related to the services of any Applicable Company Entity. 

iv."Prospective Customer" means any Person to whom or to which any Applicable Company Entity has made a proposal to do business; provided, however, that for that portion of the Restricted Period that follows the period of employment, Prospective Customers shall include only entities that were Prospective Customers during the twelve (12) month period before the Eligible Executive’s Termination Date.

v."Customer" means any Person that has done business with any Applicable Company Entity; provided, however, that for that portion of the Restricted Period that follows the period of employment, Customers shall include only entities that were Customers during the twelve (12) month period before the Eligible Executive’s Termination Date.

A.2.    Ownership and Confidentiality of Proprietary Information
a)Ownership of Proprietary Information.  All Proprietary Information and all files, databases, letters, memoranda, reports, records, data, sketches, drawings, research notebooks, program listings or other written, photographic or other material containing Proprietary Information, whether created by the Eligible Executive or others, and whether in tangible, intangible, written or electronic form, shall be and are the exclusive property of Company to be used by the Eligible Executive only in the performance of the Eligible Executive's duties for Company.  All Proprietary Information and all records or copies thereof and all tangible property of Company in the custody or possession of the Eligible Executive shall be delivered to Company upon the earlier of (i) a request by Company, or (ii) on the Eligible Executive's Termination Date.

a)Non-disclosure.  The Eligible Executive shall not, either during or after the Eligible Executive's employment by Company, disclose any Proprietary Information to others outside Company, or use the same for any purpose without prior written approval by the Chief Executive Officer of DST other than to discharge the Eligible Executive's duties of such employment, unless and to the extent that any Proprietary Information becomes generally known to and available for use by the public other than as a result of the Eligible Executive's acts or omissions or unless any Proprietary Information is required to be disclosed by valid court order and the Eligible Executive has given Company prompt notice of the order in advance of the disclosure.

b)Definition of Proprietary Information.  All information and know how, whether or not in writing or other tangible or electronic form, concerning the business or financial affairs of Company, including but not limited to all (i) inventions, discoveries, improvements and trade secrets, (ii) products and services and all plans, service levels, specifications and concepts for products and services, (iii) business plans, business and systems processes, methods, techniques, specifications and formulas, (iv) research and development projects and data, (v) financial and marketing data and information, (vi) information about customers and prospective customers, including contractual terms, customer specifications and the identity of and relationships with customer employees, (vii) names and other data relating to Company employees, consultants, suppliers and prospective employees, consultants and suppliers, (viii) computer data, reports, computer programs, source codes, object codes, manuals, tapes, listings, specifications, test results, programming sequences, application programming interfaces, screen designs and formats and user interfaces, algorithms, flow charts, program formats, user documentation and operating processes, and (ix) trade names, copyrights and other intellectual property rights, in each case whether developed or invented by the Eligible Executive or others before or after the execution of this Plan and whether patentable, copyrightable or not, shall be "Proprietary Information."

A.3.    Invention Non-Disclosure and Ownership
a)Disclosure of Developments to Company.  The Eligible Executive shall make full and prompt disclosure to Company of all inventions, designs, processes, improvements, discoveries, methods, computer hardware and software and other works of authorship, whether or not fully integrated, debugged or documented and whether patentable, copyrightable or not, which are created, made, conceived or reduced to practice by the Eligible Executive or under the Eligible Executive's direction or jointly with others during the Eligible Executive's employment by or performance of services for Company (whether before or after the receipt of any payments under this Plan) and related in any way to the business of Company, whether or not during normal working hours or on the premises of Company during the Eligible Executive's employment by or performance of services for Company (all of which are collectively referred to as "Developments").  All of the Developments shall be deemed to be Proprietary Information.

b)Assignment of Developments.  All Developments will be the property of Company, and to the extent necessary, the Eligible Executive hereby assigns to Company (or any Person designated by Company) all the Eligible Executive's right, title and interest in and to all such Developments and all related trademarks, patents, patent applications, copyrights and copyright applications.  If this Plan shall be construed in accordance with the laws of any state which precludes a requirement in an agreement to assign certain classes of inventions made by the Eligible Executive ("Non-Assignable Inventions"), this paragraph shall not apply to any Non-Assignable Invention which, pursuant to a final binding, enforceable order of a court of competent jurisdiction, or pursuant to an agreement of Company, falls within such classes.  However, with respect to any Non-Assignable Invention, the Eligible Executive hereby grants to Company a worldwide, perpetual, royalty-free, non-exclusive license to make, use and sub-license such Non-Assignable Invention, and to create derivative works therefrom, in connection with the conduct of Company's business.

c)Further Assurances.  The Eligible Executive agrees to cooperate fully with Company, both during and after the Eligible Executive's employment with Company, with respect to the procurement, maintenance and enforcement of trademarks, copyrights and patents (in the United States and foreign countries) relating to Developments.  The Eligible Executive agrees to sign all papers, including, without limitation, trademark applications, copyright applications, patent applications, declarations, oaths, formal assignments, assignments of priority rights and powers of attorney, which Company may deem necessary or desirable in order to protect its rights and interests in any Development.

A.4.    Company's Right to Notify Subsequent Employers.  Company may do all necessary things, and take all necessary action, in Company's discretion, to protect its rights under this Plan, including, without limitation, notifying any subsequent employer, partner or business associate of the Eligible Executive of the existence of (and furnishing to any such Person) the provisions of this Appendix A.
A.5.    Other Agreements.  The Eligible Executive hereby represents that the Eligible Executive's employment with Company will not breach the terms of any agreement with any previous employer or other third party including, without limitation, any requirement to refrain from directly or indirectly competing with the business or soliciting the customers of such previous employer or any other party.  The Eligible Executive further represents that the Eligible Executive's performance as an employee of Company does not and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by the Eligible Executive in confidence or in trust before the Eligible Executive's employment with Company.  The Eligible Executive agrees not to disclose to Company or induce Company to use any confidential proprietary information or material belonging to any previous employers or others.
A.6.    Remedies. If the Eligible Executive violates or threatens to violate any provisions of Sections A.1 through A.5 of Appendix A to the Plan, the Company or its successors in interest shall be entitled, in addition to any other remedies that they may have, including money damages, to an injunction to be issued by a court of competent jurisdiction restraining the Eligible Executive from committing or continuing any violation of Sections A.1 through A.5 of Appendix A to the Plan. If the Eligible Executive is found to have breached any provision set forth in Sections A.1 through A.5 of Appendix A to the Plan, the time period provided for in that provision shall be deemed tolled (i.e., it will not begin to run) for so long as the Eligible Executive was in violation of that provision.

DST SYSTEMS, INC. EXECUTIVE SEVERANCE PLAN

ACKNOWLEDGMENT AND ACCEPTANCE OF
THE TERMS AND CONDITIONS OF THE PLAN

DST Systems, Inc. (the "Company") has established the DST Systems, Inc. Executive Severance Plan (the "Plan"). The Plan provides severance payments and benefits to certain eligible executives in the event of a Qualifying Termination or Qualifying CIC Termination (as defined in the Plan). You are eligible to participate in the Plan.

By the signatures below of the representative of the Company and the Eligible Executive named herein, the Company and the Eligible Executive agree that the Company hereby designates the Eligible Executive as eligible to participate in the Plan, and the Eligible Executive hereby acknowledges and accepts such participation, subject to the terms and conditions of the Plan, and agrees to the terms of the Plan, which is attached hereto and made a part hereof.

Name of Eligible Executive: «FirstName» «LastName»
Date of Eligibility and Participation: «Date»

At Will Employment. Nothing in this Acknowledgment and Acceptance or in the Plan confers upon the Eligible Executive any right to continue in employment for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company or of the Eligible Executive, which rights are hereby expressly reserved by each, terminate the Eligible Executive's employment at any time for any reason.

Amendment and Termination of Plan. The Company reserves the right, on a case-by-case basis or on a general basis, to amend the Plan in accordance with Section 7(b) and Section 7(c). No amendment or termination shall eliminate or reduce any benefit with respect to any Eligible Executive who experiences a Qualifying Termination or Qualifying CIC Termination that occurs on or before such amendment or termination becomes effective.

	
			
	Eligible Executive:
	 
	DST Systems, Inc.

	By:________________________
	 
	By:____________________

	Name:_____________________
	 
	Name:__________________

	 
	 
	Title:___________________

Attachment:
DST Systems, Inc. Executive Severance PlanDST EX 10.3 12.31.13

EXHIBIT 10.3
 
	
		
	
	 

 
February 25, 2014

Robert L. Tritt
4206 N. Hickory Lane
Kansas City, MO  64116

Dear Bob:

In recognition of your service to the organization, and your separation from employment with DST Systems, Inc. (“Company”), we are offering you the separation package set forth in this agreement.  This type of agreement is normal Company practice when we offer a special package.  The agreement confirms the agreement in writing and makes clear the commitments by the Company and you.

1.    Your employment will end on March 31, 2014.  Regardless of whether you sign this agreement and release, you will be paid your normal base salary compensation through March 31, 2014 less applicable taxes and withholdings.  You will also be paid your 2013 vacation balance and your vacation entitlement for 2014, less time used in 2014.

You acknowledge and agree that you have been provided with an Equity Summary that provides guidance about your Annual Incentive Program balances and equity awards (“Award Information”).  When you accepted your awards you agreed to noncompetition, nonsolicitation, nondisclosure and other terms and conditions, as set forth in your Deferred Cash Award Agreements, Restricted Stock Unit (“RSU”) Agreements, Option Agreements or any other award agreements you have executed or accepted during your employ (“Award Agreements”).  These obligations remain applicable, as further stated in Section 6, subject to the time limitations set forth for certain obligations in the Award Agreements.

If you sign this agreement and release, you will have a binding agreement with the Company on the terms set forth in the remainder of this agreement.

2.    If you sign this agreement and release, you will receive:

A lump sum separation payment of $900,000, less applicable taxes and withholdings.  Payment of this amount will be made within fifteen (15) calendar days from March 31, 2014, provided this agreement has been signed and not revoked, and further provided that this agreement was signed and returned to the Company on or before the expiration of twenty-one (21) days after you received this agreement.  You will not receive any other payments from the Company.

By signing this agreement and release, you acknowledge that:

		
	i)
	the payments set forth above and the vestings set forth in the Equity Summary are adequate consideration for the promises and agreements set forth in this agreement and release;

		
	ii)
	you will not receive any awards or award vesting other than as set forth in the Equity Summary; and

		
	iii)
	you will receive no other payments or consideration from the Company other than the payments and considerations set forth in this Section 2.

3.    By signing this agreement, you indicate that this agreement is satisfactory and that, subject to the specific exclusions set forth in this Section 3, you will not assert any claims against DST Systems, Inc. and its predecessors, successors, assigns, parents, subsidiaries, joint ventures, or affiliated entities, and/or the shareholders, directors, officers, 

1

managers, partners, employees, or agents of any of the foregoing (each such released person or entity referred to for purposes of this agreement as “DST Entity”) or against any benefit, award, incentive, commission or other plan of any DST Entity, the administrator, trustee, fiduciary, or administrative committee thereof, or any person associated with any of the foregoing (each such released plan, committee, entity or person referred to for purposes of this agreement as a “Plan”).

This means that, except for the specific exclusions set forth in this Section 3, when you sign at the bottom of this agreement, you are thereby forever releasing and waiving any and all claims and causes of action of any kind or nature for money or for any other form of personal relief, that you have or may have against any DST Entity or against any Plan, based on any events or circumstances arising or occurring on or before the date of your execution of this agreement and release, whether known or unknown, suspected or unsuspected, even if you did not know of or suspect the existence of such a right or claim until after this agreement and release is signed and becomes effective, that relate in any way to your employment, to the ending of your employment, or to any Plan.  This release includes, but is not limited to any previous employment agreement, or any federal, state or local common law or under any federal, state or local statute, regulation or ordinance, including, but not limited to, claims of breach of an express or implied contract, claims of breach of the covenant of good faith and fair dealing, claims of defamation or other tort type claims, and any and all claims of unlawful discrimination, harassment, retaliation or other unlawful conduct under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq.; Civil Rights Act of 1866, 42 U.S.C. § 1981; Americans With Disabilities Act, 42 U.S.C. § 12101 et seq.; Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq.; Family and Medical Leave Act, 29 U.S.C. § 2601 et seq.; Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq.; Missouri Human Rights Act, Mo. Rev. Stat. § 213.010 et seq.; or Civil Rights Ordinance of Kansas City, Missouri (Ordinance #53581, Chapter 26, Article IX, 26.201-26.236); or under any other federal, state or local statutory or common law.

This release of claims does not include any of the following claims that you have or might have:

		
	a)
	any rights or claims related to benefits vested and/or accrued at the time you sign this release of claims under the DST Welfare Benefit Plan, DST Systems, Inc. 401(k) Profit Sharing Plan, or DST Employee Stock Ownership Plan, which rights and claims are governed by the terms of each plan;

		
	b)
	the right to continued benefits upon your payment of premiums in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”);

		
	c)
	any claim to receive workers’ compensation benefits or unemployment insurance, in accordance with applicable law;

		
	d)
	any claim to enforce the terms of this agreement and release;

		
	e)
	any rights or claims that arise after March 31, 2014 except that if you sign this agreement, you agree to the ending of your employment on March 31, 2014 and that this release specifically includes all claims related to the ending of your employment; or

		
	f)
	any claim that cannot be waived as a matter of law.

In addition, nothing in this agreement and release shall interfere with your right to file a charge with, or participate in an investigation or proceeding before the Equal Employment Opportunity Commission (“EEOC”) or any other federal, state or local regulatory or law enforcement agency.  However, the consideration provided to you in this agreement and release shall be the sole relief provided to you for the claims that are released by you in this agreement and release, and you expressly acknowledge and agree to waive, surrender, and give up any personal monetary benefits or recovery against the Company in connection with any such claim, charge, or proceeding without regard to how the charge, investigation, or proceeding was initiated.

4.    If you have questions about any of your qualified retirement plan accounts, please contact Debbie Boll at 816/435-8611.  If you are interested in determining whether your coverage could be continued under the Executive Life and/or Executive Long Term Disability Program beyond your termination date, you should contact insurance broker/agent Gary Fulk at 816/561-1336.  The expenses of any such continuation are yours not that of the Company, which shall not be responsible for obtaining or maintaining such coverage.

5.    You agree that you shall not disclose, reveal, or divulge to any person or entity, and you shall not use, any “Confidential Information,” “Inventions,” or “Works” (each as defined in this Section) for any purpose.

2

“Confidential Information” means trade secrets and other valuable non-public information relating to any DST Entity or Plan (as defined in Section 3 of this agreement), including without limitation, the following: (a) inventions, 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 any DST Entity, all of which is Confidential Information, whether or not patentable or made on DST Entity premises or during normal working hours; (b) strategies of any DST Entity including without limitation strategies pertaining to data security, processing errors, intellectual property protection, regulatory compliance, business interruption, contract or dispute negotiation or management of liability, fraud and other risk; (c) the identity of or information pertaining to DST Entity suppliers or employees; (d) information that is proprietary and/or sensitive including without limitation information pertaining to form contracts or provisions thereof, pending contracts or amendments to current contracts, unannounced services or products or the development thereof, employee compensation benefits, sales, marketing, or operating plans, or claims, disputes, errors or litigation; (e) information identifying or pertaining to DST Entity customers or prospective customers or their services, products, accounts, clients, shareowners, account holders, requirements, or operating procedures and including without limitation client lists, pricing information, referral source lists, presentations to actual and proposed clients, past, current, or proposed contracts, unannounced services or products, sales projections, marketing, sales, negotiation and pricing plans and strategies, techniques of operation; (f) the business strategies, trade secrets, and information, including financial, account, account holder, member, client, product, service or other information, of current and prospective suppliers and clients; (g) financial information relating to any DST Entity including without limitation budget, projection, profit margin and financing information; and (h) any other non-public information obtained as a consequence of employment by a DST Entity or otherwise.

“Inventions” mean all discoveries, improvements, and inventions relating to or used in the past, current or prospective business or operations of any DST Entity, whether or not patentable, which were created, made, conceived or reduced to practice by you or under your direction or jointly with others during your employment by a DST Entity, whether or not during normal working hours or on the premises of a DST Entity, or were created by others and disclosed to you.

“Works” mean all original works fixed in a tangible medium of expression by you or under your direction or jointly with others during your employment by a DST Entity, whether or not during normal working hours or on the premises of a DST Entity, and relating to or used in the past, current or prospective business or operations of a DST Entity.  You agree to cooperate with the Company in providing information and assistance on any matters that you worked on during your employment.

As stated in Section 11, the purpose of this proposed agreement is to provide for an amicable separation from employment and to help you avoid economic hardship, and we want to provide you with up to twenty-one (21) days to consider the proposed agreement and to consult with an attorney; however, this proposed agreement is contingent on your compliance with the following conditions and, if you fail to comply with these conditions, the proposed agreement will be withdrawn:

You agree not to disclose the terms of this agreement or the circumstances or events of or related to your separation from the Company to anyone other than your spouse or tax or legal advisors (“Separation Matters”).  You further agree that you, your spouse, and your tax or legal advisors shall keep the Separation Matters confidential and not disclose them to anyone, unless required to do so by law or court order.  The persons and entities to whom you should not disclose Separation Matters include without limitation any actual or prospective customers, clients or vendors of any DST Entity and any employees of any DST Entity.

6.    You agree to continue to abide by and conform to the terms and conditions of the DST Systems, Inc. Business Ethics and Legal Compliance Policy (the "Ethics Policy"), and to comply with your duty of loyalty and other legal obligations.  Until March 31, 2015 you agree that you will continue to act in the best interests of DST Entities to the exclusion of your personal advantage, and will avoid and not engage in situations which involve a conflict between your personal interests and the interests of DST Entities.

As provided in your Award Agreements, which you accepted in consideration of receiving the awards and their vesting potential, you are bound to an obligation not to compete with DST Entities for six (6) months from the effective date of your termination of employment and you are also bound for a period of six (6) months from the effective date of your termination of employment not to solicit employees or customers or certain prospective customers of DST Entities, as 

3

set forth in additional detail in your Award Agreements.  You should have retained a copy of your Award Agreements at the time you accepted them, but if not, they are available from Jennifer Stewart, our Stock Plan Administrator.  The obligations in your Award Agreements continue to apply for the period of restrictions set forth therein, and you should review and understand them.  The payment in Section 2 of this letter is additional consideration for such obligations, which you re-commit and agree to by signing this letter.  You further agree to and acknowledge the following:

4

		
	A.
	Through March 31, 2015, you shall not, without the express written consent of the Company’s President, engage as an employee, owner, partner or in any other capacity in any business activity that is competitive with the services or products of Company or any other DST Entity with which you worked or about which you gained confidential information during the course of your employment with Company (collectively, “DST Solutions”); that is the same or similar or may be used as a substitute for any of the DST Solutions; or that pertains to any of the DST Solutions or the development or sale of software or platforms directly or indirectly related to any of the DST Solutions.  This restriction applies to your activities that would pertain to business in the United States or any other country in which any DST Entity has, as of March 31, 2014, offices or operations which accounted for one percent (1%) or more of the annual revenues of such DST Entity.

		
	B.
	Through March 31, 2015, you shall not, without the express written consent of the Company's President, directly or indirectly solicit business that is in any way competitive with any of the DST Solutions from any person or entity which was either (i) a customer of any DST Entity as of March 31, 2014, or (ii) a prospective customer of a DST Entity to which a DST Entity made a proposal to do business during 2013.

		
	C.
	Any of the activities described above in this Section 6 would inevitably result in your use and/or disclosure of such Confidential Information.

		
	D.
	Through March 31, 2015, you shall not directly or indirectly solicit or induce any employee of any DST Entity that is offering or has customers of any of the DST Solutions to leave employment with the DST Entity or otherwise communicate with any employee of any DST Entity regarding the possibility of leaving employment with the DST Entity.

		
	E.
	The restrictions set forth above in this Section 6 are fair and reasonable in view of: (1) the extent of your important client and vendor contacts; and (2) the extent of your knowledge of trade secrets and other Confidential Information, especially financial and technological information related to the DST Solutions.

		
	F.
	The periods of restriction in this Section 6 and your Award Agreements shall be tolled during any period of time during which you are not in compliance with the provisions of this Section 6 and your Award Agreements, such that the aggregate duration of the restricted period shall be extended for a period of time equal to the aggregate period of time of any such non-compliance; and the Company may do all necessary things, and take all necessary action, in Company’s discretion, to protect its rights under this agreement and your Award Agreements, including without limitation notifying any of your subsequent employers, partners or business associates of the existence of (and furnishing to any such person) the provisions of this Section 6 and your Award Agreements.

		
	G.
	If the final judgment of a court or arbitrator with competent jurisdiction declares that any term or provision of this Section 6 or your Award Agreements is invalid or unenforceable, 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 6 and your Award Agreements will be enforceable as so modified.

		
	H.
	If any part of this Section 6 or your Award Agreements 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 6 or your Award Agreements 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.

7.    You agree not to take any action to adversely affect or negatively influence the relationship of any DST Entity with any of its current or prospective clients, vendors or employees.  You further agree not to make any oral or written statements or engage in conduct of any kind that either directly or indirectly disparages, criticizes, defames, or otherwise 

5

casts a negative characterization upon any DST Entity, any member of the Board of Directors of a DST Entity, or any employee of a DST Entity, and you agree not to direct, encourage, or assist anyone else to do so.  This prohibition includes, without limitation, making negative comments through emails, on the Internet, through social networking media, or in any other public or semi-public forum.

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8.    You agree that you will cooperate to the fullest extent possible with the Company regarding any pending or future litigation, claim, proceeding or other disputed issue involving any DST Entity or Plan that relates to matters within your knowledge or relates to your responsibilities while employed.  Cooperation, as used herein, means you shall: (a) meet with DST Entity representatives and attorneys at reasonable times and places to answer questions regarding facts and other related issues (this includes travel to such locations as requested by the Company); (b) appear and provide testimony if requested by a DST Entity (this includes travel to such locations as requested by the DST Entity); (c) provide full, complete and truthful testimony if you ever testify in deposition, trial or any other proceeding involving any DST Entity or a Plan; (d) notify the General Counsel within three (3) business days if you are served with a subpoena relating to any litigation, claim or proceeding involving a DST Entity or Plan, or if you are contacted by any adverse party or by any representative of an adverse party; and (e) not engage in any discussions with or otherwise assist any adverse party or any adverse party’s representatives related to any claim against any DST Entity or Plan, except as may be required by law.  The Company agrees to reimburse you for reasonable time and expenses incurred with respect to your compliance with your obligations under this Section 8.

9.    You agree that for a violation of this agreement that either: (i) pertains to Section 6 of this agreement; or (ii) pertains to Section 5 or 7 of this agreement and is in intentional or reckless disregard of your obligations and has significantly harmed, or could reasonably be deemed to have the potential of significantly harming, a DST Entity or the position of a DST Entity in any potential or actual negotiation, dispute or transaction, then you shall (a) return to the Company within ten (10) business days ninety percent (90%) of the lump sum amount referenced in Section 2 of this agreement, and (b) for any other violation you shall return to the Company within ten (10) business days fifty percent (50%) of the lump sum amount referenced in Section 2; provided if there are multiple violations, you will not be obligated to return a cumulative total of more than ninety (90%) of the lump sum amount referenced in Section 2.

The remedies set forth above are in addition to the Company’s right to seek injunctive relief and right to seek monetary damages above the amount of the required repayments under this Section 9.  You and the Company further agree that upon proof of a material violation of your obligations in Sections 5 through 7 of this agreement, such violation may cause irreparable injury to the relevant DST Entity that is not adequately remediable in damages and may entitle the DST Entity to temporary, preliminary and final injunctive relief against further breach of such obligations.  You agree to the waiver of any requirement for the posting of any bond as a condition to such equitable relief.

Your obligations in Sections 5 through 8 are in addition to and independent of your existing nondisclosure and intellectual property protection obligations under any Award Agreements, your nondisclosure, intellectual property protection and other obligations under the Ethics Policy, and your obligations under the DST Arbitration Policy.  Those obligations remain in full force and effect and apply even after termination of your employment and your signing of this agreement and release of claims.  Your noncompetition and nonsolicitation obligations in the Award Agreements also remain in full force and effect and apply even after termination of your employment and your signing of this agreement and release of claims, but they are limited in time as set forth in those agreements and referenced in Section 6 of this letter.  The Ethics Policy is available at dstsystems.com under Investor Center/Corporate Governance and the DST Arbitration Policy is available from Human Resources.

10.    You agree to return to the Company by March 31, 2014 all business equipment provided to you by the Company and the originals and copies of business related files, documents, information and materials.  You also will return to the Company by March 31, 2014 all Company-supplied credit cards, identification cards and equipment.  You also agree to present any requests for reimbursement of business expenses by March 31, 2014 and that any expenses not presented by that date will not be eligible for reimbursement.

11.    This agreement and the release of claims in Section 3 are normal Company practice.  The purpose is to provide for an amicable separation from employment and to help you avoid economic hardship.  We believe the agreement and release of claims are fair and reasonable, but because it is important for you to fully understand the agreement and release and for you to voluntarily agree to them, we advise you of the following:

		
	a)
	You are hereby advised and encouraged to consult with an attorney of your choice before signing this agreement and releasing your claims.

		
	b)
	You have up to twenty-one (21) days to consider this agreement and release of claims.  If you fail to sign and return this agreement and release of claims on or before the expiration of twenty-one (21) days after you receive the agreement and release of claims, the separation pay package set forth in this agreement will no longer be available to you.

7

		
	c)
	If you sign this agreement and release of claims, you then will have seven (7) calendar days to revoke the agreement and release if you change your mind.  The agreement and release do not become effective or enforceable until expiration of seven (7) calendar days and any revocation must be in writing and received by the undersigned person within seven (7) calendar days after you sign this agreement and release of claims.  In order to be effective, the written revocation must be mailed to Lisa Fielden and postmarked within seven (7) calendar days or delivered to Lisa Fielden through personal delivery, telefax (816/435-8546) or email (lmfielden@dstsystems.com) within seven (7) calendar days.  Any payments made under Section 2 above must be returned for the revocation to be effective.

12.    This agreement sets forth the entire agreement between you and the Company and replaces or supersedes any other oral or written agreement, except for your continuing obligations under the Ethics Policy, any existing arbitration agreement (including the Company Arbitration Policy) and any Award Agreements you accepted during your employ.  The Company has made no representations, agreements or promises other than the representations, agreements and promises specifically stated in this agreement.  This agreement cannot be changed except by a written agreement signed by you and myself as representative of the Company.  This agreement is for the compromise of potential and disputed claims, and the agreement and the consideration provided by the Company are not, and shall not be construed as, an admission of any liability whatsoever by any DST Entity or Plan.

If you voluntarily agree to the terms of the agreement and release as set forth in this agreement, please sign in the space provided below.

	
		
	 
	/s/ M. Elizabeth Sweetman

	 
	M. Elizabeth Sweetman

	 
	Vice President of Global Human Resources

	 
	On Behalf of DST Systems, Inc.

	 
	and All Persons and Entities

	 
	Released Herein

 
KNOWING AND VOLUNTARY AGREEMENT BY ROBERT TRITT

I have read and fully understand the terms of this agreement.  I knowingly and voluntarily agree to the terms set forth in this agreement, which include a release of my claims against DST Entities and the Plans that relate in any way to my employment or the termination of my employment.
 
	
					
	Signature:
	/s/ Robert Tritt
	 
	 
	 

	 
	Robert Tritt
	 
	 
	 

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