SECOND AMENDMENT TO
THE EMPLOYEE STOCK OWNERSHIP PLAN
AND TRUST AGREEMENT
(1998 Restatement)
WHEREAS, by written instrument dated as of January 1, 1998,
DST Systems, Inc. amended and restated The Employee Stock Ownership Plan and
Trust Agreement (1998 Restatement); and
WHEREAS, DST Systems, Inc., in Section 13.02 of said Plan, reserved the
right to amend the Plan;
WHEREAS, DST Systems, Inc., finds it desirable to amend the Plan to
provide for the holding in the ESOP of common stock of FAM Holdings, Inc.
distributed with respect to common stock of Kansas City Southern Industries,
Inc. held in the ESOP; and to make conforming and clarifying changes related to
the above; and UMB Bank, N.A. agrees to such amendment.
NOW, THEREFORE, DST Systems, Inc. and UMB Bank, N.A. agree that The
Employee Stock Ownership Plan and Trust Agreement (1998 Restatement) be amended
as follows:
1. The third paragraph of the recitals to the Plan following
"Witnesseth" is amended to read as follows:
KCSI Shares transferred to this Plan from the Former Plan are
held in a KCSI Shares Fund. Following the Effective Date KCSI is
distributing (the "Spinoff") to its shareowners, including the Plan,
substantially all of the shares ("FAM Shares") owned by it of FAM
Holdings, Inc. ("FAM"). Effective as of the Spinoff FAM Shares
distributed to this Plan are held in a FAM Shares Fund. The KCSI Shares
Fund and FAM Shares Fund are provided solely to permit the continued
holding of KCSI Shares allocated to Participants' Accounts following
the transfer and FAM Shares allocated to Participants' Accounts
following the Spinoff. No future contributions or investments may be
made in the KCSI Shares Fund or the FAM Shares Fund.
2. A new Section 1.28(C) is added to read as follows:
(C) Special Rule for FAM Group Service. For purposes of determining
service with an affiliate, an affiliate shall also include FAM
Holdings, Inc. ("FAM"), and any corporation, partnership, joint
venture, or other business entity that would be an affiliate of FAM
under the foregoing definitions of "affiliate" if FAM were substituted
for DST therein (a "KCSI Affiliate"); but only for periods (after the
Effective Date) during which DST is also a FAM affiliate under the
foregoing definitions.
3. The second paragraph of Section 1.33 is amended to read as follows:
For purposes of Sections 3.08, 5.09, 6.05, 8.10(A), 10.03(o),
10.17 and 11.01 only, in order to comply with Code ss.ss.401(a)(28),
409 and 411(d)(6), the term "Employer Securities" shall include voting
common stock of Kansas City Southern Industries, Inc., and of FAM
Holdings, Inc., which is readily tradable on an established securities
market.
4. The first paragraph of Section 9.04 is amended to read as follows:
The Trustee shall maintain a separate Account, or multiple
separate Accounts, in the name of each Participant in the Plan to
reflect the Participant's Accrued Benefit under the Plan. The Trustee
must maintain for purposes of the Plan one Account designated as the
Employer Securities Account to reflect a Participant's interest in
Employer Securities held by the Plan, another Account designated as the
General Investment Account to reflect the Participant's interest in the
Plan attributable to assets other than Employer Securities and other
than KCSI Shares and FAM Shares, another Account designated as the KCSI
Shares Account to reflect a Participant's interest in the KCSI Shares
held by the Plan, and another Account designated as the FAM Shares
Account to reflect a Participant's interest in the FAM Shares held by
the Plan. If a Participant reenters the Plan subsequent to his having a
Forfeiture Break in Service (as defined in Section 5.08), the Trustee
must maintain separate Accounts for the Participant's pre-Forfeiture
Break in Service Accrued Benefit and separate Accounts for his
post-Forfeiture Break in Service Accrued Benefit unless the
Participant's entire Accrued Benefit under the Plan is 100%
Nonforfeitable.
5. A new Section 9.06(D) is added to read as follows:
(D) FAM Shares Account. As of each valuation date of each Plan Year,
the Trustee first will reduce FAM Shares Accounts in the Plan for any
forfeitures arising under Section 5.09 and then will credit the FAM
Shares Account maintained for each Participant in the Plan with any
forfeitures of FAM Shares and with any stock dividends on FAM Shares
allocated to his FAM Shares Account. The Trustee will base allocations
to the Participants' Accounts on dollar values of FAM Shares or on the
basis of actual shares where there is a single class of FAM Shares. In
making a forfeiture reduction under this Section 9.06(D), the Trustee,
to the extent possible, first must forfeit from a Participant's General
Investment Account before making a forfeiture from his FAM Shares
Account.
6. The first paragraph of Section 10.15 is amended to read as follows:
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Each Participant (or the Beneficiary thereof) acting as a
named fiduciary shall have the right, with respect to Employer
Securities, to direct the Trustee as to the manner in which (a) to vote
any stock allocated to his Employer Securities Account as of the
applicable record date of any shareowner meeting in any matter put to
a shareholder vote; and (b) to respond to a tender offer, exchange
offer or any other offer to purchase Employer Securities allocated to
the Participant's Employer Securities Account.
7. The fourth paragraph of Section 10.15 is amended to read as follows:
With regard to any tender offer, exchange offer or any other
offer to purchase Employer Securities, the Trustee or its designee will
solicit such instructions from Participants by distributing to each
Participant such information as is distributed to shareowners of the
Employer generally in connection with any such offer, and any
additional information the Trustee deems appropriate in order for each
Participant to give instructions. A reasonable deadline for the return
of such materials may be specified.
8. The seventh paragraph of Section 10.15 is amended to read as
follows:
In the event a Participant eligible to receive a distribution
of that Participant's Employer Securities Account does not elect in
accordance with Section 10.08 to receive the distribution in the form
of Employer Securities, a sale of the Employer Securities in such
Account in order to fund the resulting cash distribution shall be
deemed to satisfy the requirements of this Section 10.15.
9. Section 10.19 is amended to read as follows:
10.19 KCSI SHARE RESTRICTIONS. Any KCSI Shares acquired under the
Former Plan with the proceeds of an exempt loan and FAM Shares
distributed with respect to such KCSI Shares shall continue to be
subject to the provisions of Treas. Reg. ss.ss.54-4975-7(b)(4), (10),
(11) and (12) relating to put, call or other options and to buy-sell or
similar arrangements, except to the extent these regulations are
inconsistent with Code ss.409(h).
10. These amendments shall be effective as of the date of distribution
by Kansas City Southern Industries, Inc., of substantially all of the shares
owned by it of FAM Holdings, Inc.
11. Except as herein amended, the Plan is hereby ratified and
confirmed.
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IN WITNESS WHEREOF, DST Systems, Inc. and UMB Bank, N.A., have
executed this Second Amendment as of this 17th day of August, 1998.
DST SYSTEMS, INC.
By: /s/Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Vice President, Chief Financial
Officer and Treasurer
UMB BANK, N.A.
By: /s/Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
Senior Vice President
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